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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________
FORM 10-Q
þ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20172020
OR
¨☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File No. 001-35674
REALOGY HOLDINGS CORP.
(Exact name of registrant as specified in its charter)
20-8050955
(I.R.S. Employer Identification Number)
Commission File No. 333-148153
REALOGY GROUP LLC
(Exact name of registrant as specified in its charter)
20-4381990
Commission File No. 001-35674Commission File No. 333-148153
REALOGY HOLDINGS CORP.REALOGY GROUP LLC
(Exact name of registrant as specified in its charter)(Exact name of registrant as specified in its charter)
20-805095520-4381990
(I.R.S. Employer Identification Number)(I.R.S. Employer Identification Number)
Delaware
(State or other jurisdiction of incorporation or organization)
175 Park Avenue
Madison, NJ 07940
(Address of principal executive offices) (Zip Code)
(973) 407-2000
(Registrants' telephone number, including area code)
___________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Realogy Holdings Corp.Common Stock, par value $0.01 per shareRLGYNew York Stock Exchange
Realogy Group LLCNoneNoneNone
Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.  
Realogy Holdings Corp. Yes þ☑  No ¨☐Realogy Group LLC Yes ¨☐  No þ☑
Indicate by check mark whether the Registrants have submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit and post such files). 
Realogy Holdings Corp. Yes þ☑  No ¨☐Realogy Group LLC Yes þ☑  No ¨☐
Indicate by check mark whether the Registrants are large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies, or emerging growth companies. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated
filer
Accelerated
filer
Non-accelerated filer
(Do not check if a smaller
Smaller reporting company)company
Smaller reporting
company
Emerging growth company
Realogy Holdings Corp.þ☑¨☐¨☐¨☐¨☐
Realogy Group LLC¨☐¨☐þ☑¨☐¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the Registrants are a shell company (as defined in Rule 12b-2 of the Exchange Act).  
Realogy Holdings Corp. Yes ¨☐  No þ☑Realogy Group LLC Yes ¨☐  No þ☑
There were 134,616,566115,436,348 shares of Common Stock, $0.01 par value, of Realogy Holdings Corp. outstanding as of November 1, 2017.August 3, 2020.



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TABLE OF CONTENTS
Page
1
1
PART IPageFINANCIAL INFORMATION
Item 1.
14
Forward-Looking Statements
PART IFINANCIAL INFORMATION
Item 1.
Financial Statements
4
Report of Independent Registered Public Accounting Firm for Realogy Holdings Corp.
4
5
Condensed Consolidated Statements of Operations for the three and ninesix months ended SeptemberJune 30, 20172020 and 20162019
6
Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and ninesix months ended SeptemberJune 30, 20172020 and 20162019
7
8
Condensed Consolidated Statements of Cash Flows for the ninesix months ended SeptemberJune 30, 20172020 and 20162019
9
1011
Item 2.
3136
Item 3.
5263
Item 4.
5364
PART IIOTHER INFORMATION
Item 1.
5565
Item 1.1A.
5565
Item 2.5.
5568
Item 5.6.
5670
Item 6.
Exhibits
56
5771
5872






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INTRODUCTORY NOTE
Except as otherwise indicated or unless the context otherwise requires, the terms "we," "us," "our," "our company," "Realogy," "Realogy Holdings" and the "Company" refer to Realogy Holdings Corp., a Delaware corporation, and its consolidated subsidiaries, including Realogy Intermediate Holdings LLC, a Delaware limited liability company ("Realogy Intermediate"), and Realogy Group LLC, a Delaware limited liability company ("Realogy Group"). Neither Realogy Holdings, the indirect parent of Realogy Group, nor Realogy Intermediate, the direct parent company of Realogy Group, conducts any operations other than with respect to its respective direct or indirect ownership of Realogy Group. As a result, the consolidated financial positions, results of operations and cash flows of Realogy Holdings, Realogy Intermediate and Realogy Group are the same.
Realogy Holdings is not a party to the SeniorAmended and Restated Credit Agreement dated as of March 5, 2013, as amended, amended and restated, modified or supplemented from time to time (the "Senior Secured Credit FacilityAgreement") that governs our senior secured credit facility (the "Senior Secured Credit Facility", which includes our "Revolving Credit Facility" and our "Term Loan B Facility") and the Term Loan A FacilityAgreement dated as of October 23, 2015, as amended from time to time (the "Term Loan A Agreement") that governs our senior secured term loan A credit facility (the "Term Loan A Facility") and certain references in this report to our consolidated indebtedness exclude Realogy Holdings with respect to indebtedness under the Senior Secured Credit Facility and Term Loan A Facility. In addition, while Realogy Holdings is a guarantor of Realogy Group's obligations under both its unsecured and secured second lien notes (in each case on an unsecured senior subordinated basis), Realogy Holdings is not subject to the restrictive covenants in the indentures governing such indebtedness.
As used in this Quarterly Report on Form 10-Q, the terms "4.875% Senior Notes" and "9.375% Senior Notes" refer to our 4.875% Senior Notes due 2023 and our 9.375% Senior Notes due 2027, respectively, and are referred to collectively as the "Unsecured Notes." The term "7.625% Senior Secured Second Lien Notes" refer to our 7.625% Senior Secured Second Lien Notes due 2025. The term "5.25% Senior Notes" refers to our 5.25% Senior Notes due 2021 (paid in full in June 2020).
FORWARD-LOOKING STATEMENTS
Forward-lookingThis Quarterly Report on Form 10-Q includes forward-looking statements included in this reportwithin the meaning of Section 27A of the Securities Act of 1933 and our other public filings or other public statements that we make from time to time are based on various facts and derived utilizing numerous important assumptions and are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the information concerning our future financial performance, business strategy, projected plans and objectives,use of words such as well as projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words "believes,"believe," "expects,"expect," "anticipates,"anticipate," "intends,"intend," "projects,"project," "estimates,"estimate," "plans,"plan," and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally"could."
In particular, information appearing under "Management's Discussion and Analysis of Financial Condition and Results of Operations" includes forward-looking statements. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in naturethese statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, it is based on management's current plans and expectations, expressed in good faith and believed to have a reasonable basis. However, we can give no assurance that any such expectation or belief will result or will be achieved or accomplished.
The following include some, but not historical facts. You should understandall, of the factors that the following important factors could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements:statements. Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the coronavirus disease (COVID-19) pandemic:
•the extent, duration and severity of the spread of the COVID-19 pandemic and the extent, duration and severity of the economic consequences stemming from the COVID-19 crisis (including continued economic contraction) as well as related risks related tosuch as governmental regulation (including those that preclude or strictly limit showings of properties), changes in patterns of commerce or consumer activities and changes in consumer attitudes and the impact of any of the foregoing on our business, results of operations and liquidity;
•adverse developments or the absence of sustained improvement in general business, economic employment andor political conditions andor the U.S. residential real estate markets, either regionally or nationally, including but not limited to:
◦a lack of improvement or a decline in the number of homesales, stagnant or declining home prices and/or a deterioration in other economic factors that particularly impact the residential real estate market and the business segments in which we operate;
◦increasing mortgage rates and/or constraints on the availability of mortgage financing;
◦insufficient or excessive home inventory levels by market and price point;
◦a decrease in consumer confidence;
◦the impact of recessions, slow economic growth, disruptions in the U.S. government or banking system, disruptions in a major geoeconomic region, or equity or commodity markets and high levels of unemployment in the U.S. and abroad, which may impact all or a portion of the housing markets in which we and our franchisees operate;
◦legislative, tax or regulatory changes (including changes in regulatory interpretations or enforcement practices) that would adversely impact the residential real estate market, including changes relating to the Real Estate Settlement Procedures Act ("RESPA"), potential reforms of Fannie Mae and Freddie Mac, immigration reform, and potential tax code reform (including reforms related to the deductibility of home mortgage interest or state, local and property taxes);
◦a decrease in housing affordability due to higher mortgage rates and increases in average homesale prices;
◦high levels of foreclosure activity;
◦changing attitudes towards home ownership, particularly among potential first-time homebuyers who may delay, or decide not to, purchase a home, as well as the potential impact of decisions to rent versus purchase a home; and

◦a decline in consumer confidence or spending;
◦weak capital, credit and financial markets and/or the instability of financial institutions;


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◦intensifying 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);
◦the inability or unwillingness
◦continued low or accelerated declines in home inventory levels;
◦continuing high levels of unemployment and/or declining wages or stagnant wage growth in the U.S.;
◦the potential economic impact of the curtailment of one or more federal and/or state programs meant to assist businesses and individuals navigate COVID-19 related financial challenges;
◦an increase in potential homebuyers with low credit ratings, inability to afford down payments, or other mortgage challenges due to disrupted earnings, including constraints on the availability of mortgage financing;
◦an increase in foreclosure activity;
◦a decline or a lack of improvement in the number of homesales;
◦stagnant or declining home prices;
◦a reduction in the affordability of housing;
◦a lack of improvement or deceleration in the building of new housing and/or irregular timing or volume of new development closings;
◦the potential negative impact of certain provisions of the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) on (i) home values over time in states with high property, sales and state and local income taxes and (ii) homeownership rates, in particular in light of our market concentration in high-tax states; and/or
◦geopolitical and economic instability;
•risks associated with our substantial indebtedness, interest obligations and the restrictions contained in our debt agreements, including risks relating to our ability to comply with the financial covenant under the Senior Secured Credit Facility and Term Loan A Facility and generate sufficient cash flows to service our debt (in particular if the COVID-19 crisis continues for a prolonged period) as well as risks relating to our having to dedicate a significant portion of our cash flows from operations to service our debt and our ability to refinance or repay our indebtedness or incur additional indebtedness;
•risks related to disruptions in the securitization markets, including in connection with the COVID-19 crisis, which may adversely impact our ability to continue to securitize certain of the relocation assets of Cartus Relocation Services or increase our cost of funding;
•the impact of current homeowners to purchase their next home due to various factors, including limited or negative equity in their current home, difficult mortgage underwriting standards, attractive rates on existing mortgages and the lack of available inventory in their market;
increased competition whether through traditional competitors, in the industry for clients, for the affiliation of independent sales agents and for the affiliation of franchisees on our results of operations and market share, including competition from:
◦real estate brokerages, including those seeking to disrupt historical real estate brokerage models;
◦other industry participants or competitors with alternative business models (such as flat fee, capped fee or desk fee models) including companies employing technologies intendedseeking to disrupt the traditional brokerage model, as well as eliminatingeliminate brokers or agents from, or minimizingminimize the role they play in, the homesale transaction, such as reducing brokerage commissions, and companiestransaction;
◦other industry participants otherwise competing for a portion of gross commission income; and
competition for more productive sales associates, sales associate teams,◦other residential real estate franchisors;
•the impact of disruption in the residential real estate brokerage industry, and manager talent will continue to impact the abilityon our results of our company owned brokerage businessoperations and our affiliated franchisees to attractfinancial condition, as a result of listing aggregator concentration and retain independent sales associates, either individually or as members of a team, and will result in market power;
•continuing pressure on the share of gross commission split ratesincome paid by our company owned brokerages and affiliated franchisees to affiliated independent sales agents and independent sales agent teams;
•our affiliatedinability to develop products, technology and programs (including our company-directed affinity programs) that support our strategy to grow the base of independent sales agents at our company owned and franchisee real estate brokerages and the base of our franchisees;
•our geographic and high-end market concentration, particularly with respect to our company owned brokerage operations;including the heightened competition for independent sales agents in those geographies and price points;
•our inability to enter into franchise agreements with new franchisees at current net effective royalty rates, or to realize royalty revenue growth from them;
our inability to renew existing franchise agreements, at current net effectivewithout reducing contractual royalty rates or without increasing the amount and prevalence of non-standard incentives, or to maintain or enhance our value proposition to franchisees;sales incentives;
•the lack of revenue growth or declining profitability of our franchisees and company owned brokerage operations includingor declines in other revenue streams;
•increases in uncollectible accounts receivable and note reserves as a result of the adverse financial effects of the COVID-19 crisis on our franchisees and relocation clients;

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•the potential impact of lower average broker commission rates;
disputesnegative industry or issues with entities that license us their tradenames for usebusiness trends (including further declines in our business or events that negativelymarket capitalization) on our valuation of goodwill and intangibles;
•the extent of the negative impact their brands that could impedeof the discontinuation of the USAA affinity program on our franchising of those brands;revenues and profits derived from affinity program referrals (including revenue to Realogy Brokerage Group, Realogy Franchise Group (including Realogy Leads Group), and Realogy Title Group);
actions by our franchisees that could harm our business or reputation, non-performance of our franchisees, controversies with our franchisees or actions against us by their independent sales associates or employees or third parties with which our franchisees have business relationships;
loss, attrition or changes among our senior executives, other key employees or our inability to recruit top talent;
our inability to achieve or maintain cost savings and other benefits from our restructuring activities;
our inability to realize the benefits from acquisitions due to •the loss of key personnelour next largest affinity client or productive agentsmultiple significant relocation clients;
•risks related to our ongoing litigation with affiliates of Madison Dearborn Partners, LLC and SIRVA Worldwide, Inc. regarding the acquired companies, as well asplanned sale of Cartus Relocation Services, including that such transaction will not close;
•changes in corporate relocation practices resulting in fewer employee relocations, reduced relocation benefits and/or increasing competition in corporate relocation;
•an increase in the possibility that expected benefits and synergiesexperienced claims losses of the transactions may not be achieved in a timely manner or at all;our title underwriter;
•our failure or alleged failure to comply with laws, regulations and regulatory interpretations and any changes in laws and regulations or stricter interpretations of regulatory requirements,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 associatesagents to employee status, (2) RESPAprivacy 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 (3) privacy or data security(4) antitrust laws and regulations;
•risks related to the impact on our operations and financial results that may be caused by any adverse resolutionfuture meaningful changes in industry operations or structure as a result of litigation, governmental pressures (including pressures for lower brokerage commission rates), the actions of certain competitors, the introduction or regulatory proceedingsgrowth of certain competitive models, changes to the rules of the multiple listing services ("MLS"), or arbitration awards as well as any adverse impact of decisions to voluntarily modify business arrangements or enter into settlement agreements to avoid the risk of protractedotherwise; and costly litigation or other proceedings;
our inability to obtain new technologies and systems, to replace or introduce new technologies and systems as quickly as our competitors and in a cost-effective manner or to achieve the benefits anticipated from new technologies or systems;
•risks and growing costs related to both cybersecurity threats to our data and customer, franchisee, employee and independent sales associateagent data, including but not limited to:
◦the failure or significant disruption of our operations from various causes, including human error, computer malware, ransomware, insecure software, zero day threats, or other events related to our critical information technologies and systems;
◦the increasing level and sophistication of cybersecurity attacks, including distributed denial of service attacks, data exfiltration, fraud or malicious acts on the part of trusted insiders, social engineering, or other unlawful tactics aimed at compromising the systems and data of our officers, employees and franchisee and company owned brokerage sales associates and their customers (including via systems not directly controlled by us); and


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◦the reputational or financial risks associated with a loss of data or material data breach (including unauthorized access to our proprietary business information or personal information of our customers, employees and independent sales associates), the transmission of computer malware, or the diversion of homesale transaction closing funds;
risksas well as those related to our international operations, including compliance with the Foreign Corrupt Practices Actgrowing number of laws, regulations and similar anti-corruption laws as well as risks relatingother requirements related to the master franchisor modelprotection of personal information.
More information on factors that we deploy internationally;
risks associated with our substantial indebtedness and interest obligations and restrictions containedcould cause actual results or events to differ materially from those anticipated is included from time to time in our debt agreements,reports filed with the Securities and Exchange Commission ("SEC"), including risks relating to having to dedicate a significant portion of our cash flows from operations to service our debt;
risks relating to our ability to refinance or repay our indebtedness, incur additional indebtedness or return capital to stockholders;
changes in corporate relocation practices resulting in fewer employee relocations, reduced relocation benefits or the loss of one or more significant affinity clients;
an increase in the claims rate of our title underwriterthis Quarterly Report and an increase in mortgage rates could adversely impact the revenue of our title and settlement services segment;
our inability to securitize certain assets of our relocation business, which would require us to find an alternative source of liquidity that may not be available, or if available, may not be on favorable terms;
risks that could materially adversely impact our equity investment in our mortgage origination joint venture, including increases in mortgage rates, the impact of joint venture operational or liquidity risks, the impact of a transition from our current joint venture to our new joint venture, regulatory changes, litigation, investigations and inquiries or any termination of the venture;
risks relating to the unfavorable impact on homesale activity due to severe weather events or natural disasters;
any remaining resolutions or outcomes with respect to contingent liabilities of our former parent, Cendant Corporation ("Cendant"), under the Separation and Distribution Agreement and the Tax Sharing Agreement (each as described in our Annual Report on Form 10-K for the year ended December 31, 2016, the "20162019 (the "2019 Form 10-K"), including any adverse impact on our future cash flows; and
new types of taxes or increases in state, local or federal taxes that could diminish profitability or liquidity.
Other factors not identified above, including those describedparticularly under the headingscaptions "Forward-Looking Statements," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 2016 Form 10-K, filed with the Securities and Exchange Commission ("SEC"), may also cause actual results to differ materially from those described in our forward-looking statements.Operations." Most of these factors are difficult to anticipate and are generally beyond our control. You should consider these factors in connection with any forward-looking statements that may be made by us and our businesses generally.
All forward-looking statements herein speak only as of the date of this Quarterly Report and are expressly qualified in their entirety by the cautionary statements included in or incorporated by reference into this Quarterly Report. Except for our ongoing obligations to disclose material information under the federal securities laws,as is required by law, we undertake noexpressly disclaim any obligation to publicly release publicly any revisions to any forward-looking statements to reportreflect events or to reportafter the occurrencedate of unanticipated events unless we are required to do so by law.this Quarterly Report. For any forward-looking statement contained in this Quarterly Report, our public filings or other public statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.



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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMReport of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Realogy Holdings Corp.:
Results of Review of Interim Financial Statements
We have reviewed the accompanying condensed consolidated balance sheet of Realogy Holdings Corp. and its subsidiaries (the "Company") as of SeptemberJune 30, 2017,2020, and the related condensed consolidated statements of operations and comprehensive (loss) income for the three-month and nine-monthsix-month periods ended SeptemberJune 30, 20172020 and 20162019, and the condensed consolidated statement of cash flows for the nine-monthsix-month periods ended SeptemberJune 30, 20172020 and 2016. These2019, including the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements arefor them to be in conformity with accounting principles generally accepted in the responsibilityUnited States of the Company's management.America.

We conducted our reviewhave previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)., the consolidated balance sheet of the Company as of December 31, 2019, and the related consolidated statements of operations, comprehensive (loss) income, equity and of cash flows for the year then ended (not presented herein), and in our report dated February 25, 2020, which included a paragraph describing a change in the manner of accounting for leases in the 2019 financial statements, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheetinformation as of December 31, 2019, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These interim financial statements are the responsibility of the Company’s management.We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States),PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.



/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
August 6, 2020

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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholder of Realogy Group LLC
Results of Review of Interim Financial Statements
We have reviewed the accompanying condensed consolidated balance sheet of Realogy Group LLC and its subsidiaries (the "Company") as of June 30, 2020, and the related condensed consolidated statements of operations and comprehensive (loss) income for the three-month and six-month periods ended June 30, 2020 and 2019, and of cash flows for the six-month periods ended June 30, 2020 and 2019, including the related notes (collectively referred to as the "interim financial statements"). Based on our review,reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial informationstatements for itthem to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), and in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of the Company as of December 31, 2016,2019, and the related consolidated statements of operations, comprehensive (loss) income equity, and of cash flows for the year then ended (not presented herein), and in our report dated February 24, 2017,25, 2020, which included a paragraph describing a change in the manner of accounting for leases in the 2019 financial statements, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet information as of December 31, 2016,2019, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

/s/ PricewaterhouseCoopers LLP
Florham Park, NJ
November 3, 2017





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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholder of Realogy Group LLC:
We have reviewed the accompanying condensed consolidated balance sheet of Realogy Group LLC and its subsidiaries as of September 30, 2017, and the related condensed consolidated statements of operations and comprehensive income for the three-month and nine-month periods ended September 30, 2017 and 2016 and the condensed consolidated statement of cash flows for the nine-month periods ended September 30, 2017 and 2016. These interim financial statements are the responsibility of the Company's management.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our reviewreviews in accordance with the standards of the Public Company Accounting Oversight Board (United States)PCAOB and in accordance with auditing standards generally accepted in the United States of America applicable to reviews of interim financial information. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States)PCAOB or in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) and in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet as of December 31, 2016, and the related consolidated statements of operations, comprehensive income, equity, and of cash flows for the year then ended (not presented herein), and in our report dated February 24, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet information as of December 31, 2016, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.



/s/ PricewaterhouseCoopers LLP
Florham Park, NJNew Jersey
November 3, 2017August 6, 2020





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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months EndedSix Months Ended
 June 30,June 30,
 2020201920202019
Revenues
Gross commission income$919  $1,310  $1,769  $2,109  
Service revenue172  183  323  312  
Franchise fees85  112  156  182  
Other31  59  75  115  
Net revenues1,207  1,664  2,323  2,718  
Expenses
Commission and other agent-related costs685  955  1,315  1,530  
Operating286  343  611  673  
Marketing40  69  99  137  
General and administrative59  68  133  148  
Restructuring costs, net14  9  25  18  
Impairments7  2  454  3  
Depreciation and amortization46  43  91  84  
Interest expense, net59  80  160  143  
Loss on the early extinguishment of debt8  —  8  5  
Total expenses1,204  1,569  2,896  2,741  
Income (loss) from continuing operations before income taxes, equity in earnings and noncontrolling interests3  95  (573) (23) 
Income tax expense (benefit) from continuing operations11  33  (121) 1  
Equity in earnings of unconsolidated entities(36) (7) (45) (8) 
Net income (loss) from continuing operations28  69  (407) (16) 
(Loss) income from discontinued operations, net of tax(9) 1  (14) (13) 
Estimated loss on the sale of discontinued operations, net of tax(32) —  (54) —  
Net (loss) income from discontinued operations(41) 1  (68) (13) 
Net (loss) income(13) 70  (475) (29) 
Less: Net income attributable to noncontrolling interests(1) (1) (1) (1) 
Net (loss) income attributable to Realogy Holdings and Realogy Group$(14) $69  $(476) $(30) 
Basic (loss) earnings per share attributable to Realogy Holdings shareholders:
Basic earnings (loss) per share from continuing operations$0.23  $0.59  $(3.55) $(0.15) 
Basic (loss) earnings per share from discontinued operations(0.35) 0.01  (0.59) (0.11) 
Basic (loss) earnings per share$(0.12) $0.60  $(4.14) $(0.26) 
Diluted (loss) earnings per share attributable to Realogy Holdings shareholders:
Diluted earnings (loss) per share from continuing operations$0.23  $0.59  $(3.55) $(0.15) 
Diluted (loss) earnings per share from discontinued operations(0.35) 0.01  (0.59) (0.11) 
Diluted (loss) earnings per share$(0.12) $0.60  $(4.14) $(0.26) 
Weighted average common and common equivalent shares of Realogy Holdings outstanding:
Basic115.4  114.3  115.0  114.1  
Diluted116.2  114.9  115.0  114.1  
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Revenues       
Gross commission income$1,250
 $1,211
 $3,505
 $3,288
Service revenue261
 273
 710
 715
Franchise fees111
 107
 296
 280
Other52
 53
 159
 157
Net revenues1,674
 1,644
 4,670
 4,440
Expenses       
Commission and other agent-related costs887
 834
 2,462
 2,256
Operating394
 400
 1,162
 1,158
Marketing63
 58
 195
 181
General and administrative82
 78
 269
 234
Former parent legacy cost (benefit), net1
 —
 (10) 1
Restructuring costs2
 9
 9
 30
Depreciation and amortization50
 53
 149
 149
Interest expense, net41
 37
 127
 169
Loss on the early extinguishment of debt1
 —
 5
 —
Other income, net—
 (1) —
 (1)
Total expenses1,521
 1,468
 4,368
 4,177
Income before income taxes, equity in earnings and noncontrolling interests153
 176
 302
 263
Income tax expense67
 74
 131
 114
Equity in earnings of unconsolidated entities(10) (5) (7) (10)
Net income96
 107
 178
 159
Less: Net income attributable to noncontrolling interests(1) (1) (2) (3)
Net income attributable to Realogy Holdings and Realogy Group$95
 $106
 $176
 $156
        
Earnings per share attributable to Realogy Holdings:       
Basic earnings per share$0.70
 $0.74
 $1.28
 $1.07
Diluted earnings per share$0.69
 $0.73
 $1.26
 $1.06
Weighted average common and common equivalent shares of Realogy Holdings outstanding:
Basic136.1
 144.0
 137.8
 145.4
Diluted138.1
 145.1
 139.4
 146.6
        
Cash dividends declared per share (beginning in August 2016)$0.09
 $0.09
 $0.27
 $0.09




See Notes to Condensed Consolidated Financial Statements.
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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In millions)
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
Net (loss) income$(13) $70  $(475) $(29) 
Currency translation adjustment1  (1) (1) —  
Defined benefit pension plan—amortization of actuarial loss to periodic pension cost—  —  1  1  
Other comprehensive income (loss), before tax1  (1) —  1  
Income tax expense (benefit) related to items of other comprehensive income amounts—  —  —  —  
Other comprehensive income (loss), net of tax1  (1) —  1  
Comprehensive (loss) income(12) 69  (475) (28) 
Less: comprehensive income attributable to noncontrolling interests(1) (1) (1) (1) 
Comprehensive (loss) income attributable to Realogy Holdings and Realogy Group$(13) $68  $(476) $(29) 
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Net income$96
 $107
 $178
 $159
Currency translation adjustment1
 —
 3
 (3)
Defined benefit pension plan - amortization of actuarial loss to periodic pension cost1
 —
 1
 1
Other comprehensive income (loss), before tax2
 —
 4
 (2)
Income tax expense related to items of other comprehensive income1
 1
 1
 1
Other comprehensive income (loss), net of tax1
 (1) 3
 (3)
Comprehensive income97
 106
 181
 156
Less: comprehensive income attributable to noncontrolling interests(1) (1) (2) (3)
Comprehensive income attributable to Realogy Holdings and Realogy Group$96
 $105
 $179
 $153






See Notes to Condensed Consolidated Financial Statements.
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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
 June 30,
2020		December 31,
2019
 
ASSETS
Current assets:
Cash and cash equivalents$686  $235  
Trade receivables (net of allowance for doubtful accounts of $14 and $11)92  79  
Other current assets173  147  
Current assets - held for sale631  750  
Total current assets1,582  1,211  
Property and equipment, net293  308  
Operating lease assets, net491  515  
Goodwill2,887  3,300  
Trademarks643  673  
Franchise agreements, net1,126  1,160  
Other intangibles, net70  72  
Other non-current assets341  304  
Total assets$7,433  $7,543  
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$86  $84  
Current portion of long-term debt868  234  
Current portion of operating lease liabilities121  122  
Accrued expenses and other current liabilities332  350  
Current liabilities - held for sale231  356  
Total current liabilities1,638  1,146  
Long-term debt3,175  3,211  
Long-term operating lease liabilities455  467  
Deferred income taxes249  390  
Other non-current liabilities291  233  
Total liabilities5,808  5,447  
Commitments and contingencies (Note 9)
Equity:
Realogy Holdings preferred stock: $0.01 par value; 50,000,000 shares authorized, NaN issued and outstanding at June 30, 2020 and December 31, 2019—  —  
Realogy Holdings common stock: $0.01 par value; 400,000,000 shares authorized, 115,424,033 shares issued and outstanding at June 30, 2020 and 114,355,519 shares issued and outstanding at December 31, 20191  1  
Additional paid-in capital4,847  4,842  
Accumulated deficit(3,171) (2,695) 
Accumulated other comprehensive loss(56) (56) 
Total stockholders' equity1,621  2,092  
Noncontrolling interests4  4  
Total equity1,625  2,096  
Total liabilities and equity$7,433  $7,543  
 September 30,
2017		 December 31,
2016
  
ASSETS   
Current assets:   
Cash and cash equivalents$348
 $274
Trade receivables (net of allowance for doubtful accounts of $10 and $13)166
 152
Relocation receivables275
 244
Other current assets153
 148
Total current assets942
 818
Property and equipment, net272
 267
Goodwill3,704
 3,690
Trademarks748
 748
Franchise agreements, net1,311
 1,361
Other intangibles, net291
 313
Other non-current assets253
 224
Total assets$7,521
 $7,421
LIABILITIES AND EQUITY   
Current liabilities:   
Accounts payable$152
 $140
Securitization obligations234
 205
Due to former parent18
 28
Current portion of long-term debt242
 242
Accrued expenses and other current liabilities442
 435
Total current liabilities1,088
 1,050
Long-term debt3,234
 3,265
Deferred income taxes518
 389
Other non-current liabilities216
 248
Total liabilities5,056
 4,952
Commitments and contingencies (Note 9)   
Equity:   
Realogy Holdings preferred stock: $.01 par value; 50,000,000 shares authorized, none issued and outstanding at September 30, 2017 and December 31, 2016—
 —
Realogy Holdings common stock: $.01 par value; 400,000,000 shares authorized, 135,180,292 shares issued and outstanding at September 30, 2017 and 140,227,692 shares issued and outstanding at December 31, 20161
 1
Additional paid-in capital5,383
 5,565
Accumulated deficit(2,886) (3,062)
Accumulated other comprehensive loss(37) (40)
Total stockholders' equity2,461
 2,464
Noncontrolling interests4
 5
Total equity2,465
 2,469
Total liabilities and equity$7,521
 $7,421




See Notes to Condensed Consolidated Financial Statements.
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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Nine Months Ended
September 30,
 2017 2016
Operating Activities   
Net income$178
 $159
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization149
 149
Deferred income taxes129
 98
Amortization of deferred financing costs and discount12
 12
Noncash portion of loss on early extinguishment of debt4
 —
Equity in earnings of unconsolidated entities(7) (10)
Stock-based compensation38
 39
Mark-to-market adjustments on derivatives6
 39
Other adjustments to net income(2) (4)
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:   
Trade receivables(13) (29)
Relocation receivables(30) (14)
Other assets(33) (20)
Accounts payable, accrued expenses and other liabilities10
 (5)
Due to former parent(10) 1
Dividends received from unconsolidated entities24
 5
Other, net(11) (9)
Net cash provided by operating activities444
 411
Investing Activities   
Property and equipment additions(69) (61)
Payments for acquisitions, net of cash acquired(13) (95)
Investment in unconsolidated entities(34) —
Change in restricted cash3
 (2)
Other, net17
 (5)
Net cash used in investing activities(96) (163)
Financing Activities   
Net change in revolving credit facility(10) (45)
Proceeds from issuance of Term Loan A-1—
 355
Repayment of amended Term Loan B facility—
 (758)
Amortization payments on term loan facilities(31) (31)
Proceeds from issuance of Senior Notes—
 750
Redemption of Senior Notes—
 (500)
Net change in securitization obligations29
 9
Debt issuance costs(6) (15)
Repurchase of common stock(180) (134)
Dividends paid on common stock(37) (13)
Proceeds from exercise of stock options7
 1
Taxes paid related to net share settlement for stock-based compensation(11) (6)
Payments of contingent consideration related to acquisitions(18) (23)
Other, net(19) (28)
Net cash used in financing activities(276) (438)
Effect of changes in exchange rates on cash and cash equivalents2
 (1)
Net increase (decrease) in cash and cash equivalents74
 (191)
Cash and cash equivalents, beginning of period274
 415
Cash and cash equivalents, end of period$348
 $224
Supplemental Disclosure of Cash Flow Information   
Interest payments (including securitization interest of $5 for both periods presented)$111
 $117
Income tax payments, net10
 13

 Six Months Ended
June 30,
 20202019
Operating Activities
Net loss$(475) $(29) 
Net loss from discontinued operations68  13  
Net loss from continuing operations(407) (16) 
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities:
Depreciation and amortization91  84  
Deferred income taxes(117) (2) 
Impairments454  3  
Amortization of deferred financing costs and debt discount5  5  
Loss on the early extinguishment of debt8  5  
Equity in earnings of unconsolidated entities(45) (8) 
Stock-based compensation10  14  
Mark-to-market adjustments on derivatives59  38  
Other adjustments to net loss—  (2) 
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:
Trade receivables(13) (43) 
Other assets(9) (13) 
Accounts payable, accrued expenses and other liabilities(15) 48  
Dividends received from unconsolidated entities22  1  
Other, net(8) (1) 
Net cash provided by operating activities from continuing operations35  113  
Net cash used in operating activities from discontinued operations(2) (57) 
Net cash provided by operating activities33  56  
Investing Activities
Property and equipment additions(41) (50) 
Payments for acquisitions, net of cash acquired(1) (1) 
Investment in unconsolidated entities(2) (10) 
Other, net(11) 3  
Net cash used in investing activities from continuing operations(55) (58) 
Net cash used in investing activities from discontinued operations(8) (4) 
Net cash used in investing activities$(63) $(62) 

See Notes to Condensed Consolidated Financial Statements.
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 Six Months Ended
June 30,
 20202019
Financing Activities
Net change in Revolving Credit Facility$625  $60  
Proceeds from issuance of Senior Secured Second Lien Notes550  —  
Proceeds from issuance of Senior Notes—  550  
Redemption of Senior Notes(550) (450) 
Amortization payments on term loan facilities(19) (15) 
Debt issuance costs(8) (9) 
Cash paid for fees associated with early extinguishment of debt(7) (4) 
Repurchase of common stock—  (20) 
Dividends paid on common stock—  (21) 
Taxes paid related to net share settlement for stock-based compensation(5) (6) 
Payments of contingent consideration related to acquisitions—  (2) 
Other, net(15) (13) 
Net cash provided by financing activities from continuing operations571  70  
Net cash used in financing activities from discontinued operations(103) (24) 
Net cash provided by financing activities468  46  
Effect of changes in exchange rates on cash, cash equivalents and restricted cash—  —  
Net increase in cash, cash equivalents and restricted cash438  40  
Cash, cash equivalents and restricted cash, beginning of period266  238  
Cash, cash equivalents and restricted cash, end of period704  278  
Less cash, cash equivalents and restricted cash of discontinued operations, end of period18  18  
Cash, cash equivalents and restricted cash of continuing operations, end of period$686  $260  
Supplemental Disclosure of Cash Flow Information
Interest payments for continuing operations$102  $95  
Income tax payments for continuing operations, net—  6  

See Notes to Condensed Consolidated Financial Statements.
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REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise noted, all amounts are in millions)
(Unaudited)
1.BASIS OF PRESENTATION
1. BASIS OF PRESENTATION
Realogy Holdings Corp. ("Realogy Holdings", "Realogy" or the "Company") is a holding company for its consolidated subsidiaries including Realogy Intermediate Holdings LLC ("Realogy Intermediate") and Realogy Group LLC ("Realogy Group") and its consolidated subsidiaries. Realogy, through its subsidiaries, is a global provider of residential real estate services. Neither Realogy Holdings, the indirect parent of Realogy Group, nor Realogy Intermediate, the direct parent company of Realogy Group, conducts any operations other than with respect to its respective direct or indirect ownership of Realogy Group. As a result, the consolidated financial positions, results of operations, comprehensive income and cash flows of Realogy Holdings, Realogy Intermediate and Realogy Group are the same.
The accompanying Condensed Consolidated Financial Statements include the financial statements of Realogy Holdings and Realogy Group. Realogy Holdings' only asset is its investment in the common stock of Realogy Intermediate, and Realogy Intermediate's only asset is its investment in Realogy Group. Realogy Holdings' only obligations are its guarantees of certain borrowings and certain franchise obligations of Realogy Group. All expenses incurred by Realogy Holdings and Realogy Intermediate are for the benefit of Realogy Group and have been reflected in Realogy Group's Condensed Consolidated Financial Statements.
The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America and with Article 10 of Regulation S-X. Interim results may not be indicative of full year performance because of seasonal and short-term variations. The Company has eliminated all material intercompany transactions and balances between entities consolidated in these financial statements. In presenting the Condensed Consolidated Financial Statements, management makes estimates and assumptions that affect the amounts reported and the related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ materially from those estimates.
In management's opinion, the accompanying unaudited Condensed Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair statement of Realogy Holdings and Realogy Group's financial position as of SeptemberJune 30, 20172020 and the results of operations and comprehensive (loss) income for the three and ninesix months ended SeptemberJune 30, 20172020 and 20162019 and cash flows for the ninesix months ended SeptemberJune 30, 20172020 and 2016.2019. The Consolidated Balance Sheet at December 31, 20162019 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2016.2019.
COVID-19
The COVID-19 pandemic continues to have a profound effect on the global economy and financial markets, creating considerable risks and uncertainties for almost all sectors, including the U.S. real estate services industry, as well as for the Company and its affiliated franchisees. Among other things, the crisis has created risks and uncertainties arising from the adverse effects on the economy as well as risks related to employees, independent sales agents, franchisees, and consumers.
In mid-March 2020, we began taking a series of proactive cost-saving measures in reaction to the evolving crisis, including salary reductions, furloughs and reductions in spending which resulted in substantial cost-savings in the second quarter of 2020. Many of these cost-saving measures were or are temporary in nature and have been or will continue to be assessed and adjusted on an ongoing basis based upon the volume of homesale transactions and business needs.
See Note 3, "Goodwill and Intangible Assets", to the Condensed Consolidated Financial Statements for additional information on goodwill and intangible asset impairment charges recorded in the first quarter of 2020 due to the impact on future earnings related to the COVID-19 pandemic which qualified as a triggering event for all of our reporting units as of March 31, 2020, Note 5, "Short and Long-Term Debt", to the Condensed Consolidated Financial Statements for additional information on our short- and long-term debt, and Note 11, "Subsequent Events", to the Condensed Consolidated Financial Statements for information on recent amendments to the Senior Secured Credit Agreement and Term Loan A Agreement.

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Fair Value Measurements
The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.
Level Input:Input Definitions:
Level Input:Input Definitions:
Level I
Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the
measurement date.
Level II
Inputs other than quoted prices included in Level I that are observable for the asset or liability through
corroboration with market data at the measurement date.
Level III
Unobservable inputs that reflect management’s best estimate of what market participants would use in
pricing the asset or liability at the measurement date.
The availability of observable inputs can vary from asset to asset and is affected by a wide variety of factors, including, for example, the type of asset, whether the asset is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level III. In certain cases, the


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inputs used to measure fair value may fall into different levels of the fair value hierarchy.  In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The fair value of financial instruments is generally determined by reference to quoted market values. In cases where quoted market prices are not available, fair value is based on estimates using present value or other valuation techniques, as appropriate. The fair value of interest rate swaps is determined based upon a discounted cash flow approach.
The Company measures financial instruments at fair value on a recurring basis and recognizes transfers within the fair value hierarchy at the end of the fiscal quarter in which the change in circumstances that caused the transfer occurred.
The following table summarizes fair value measurements by level at SeptemberJune 30, 20172020 for assets and liabilities measured at fair value on a recurring basis:
Level ILevel IILevel IIITotal
Deferred compensation plan assets (included in other non-current assets)$1  $—  $—  $1  
Interest rate swaps (included in other current and non-current liabilities)—  99  —  99  
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities)—  —  5  5  
 Level I Level II Level III Total
Interest rate swaps (included in other current and non-current liabilities)$—
 $24
 $—
 $24
Deferred compensation plan assets (included in other non-current assets)3
 —
 —
 3
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and non-current liabilities)—
 —
 33
 33
The following table summarizes fair value measurements by level at December 31, 20162019 for assets and liabilities measured at fair value on a recurring basis:
 Level I Level II Level III Total
Interest rate swaps (included in other non-current liabilities)$—
 $33
 $—
 $33
Deferred compensation plan assets (included in other non-current assets)3
 —
 —
 3
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and non-current liabilities)—
 —
 50
 50
Level ILevel IILevel IIITotal
Deferred compensation plan assets (included in other non-current assets)$2  $—  $—  $2  
Interest rate swaps (included in other current and non-current liabilities)—  47  —  47  
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities)—  —  4  4  
The fair value of the Company’s contingent consideration for acquisitions is measured using a probability weighted-average discount rate to estimate future cash flows based upon the likelihood of achieving future operating results for individual acquisitions.  These assumptions are deemed to be unobservable inputs and as such the Company’s contingent consideration is classified within Level III of the valuation hierarchy. The Company reassesses the fair value of the contingent consideration liabilities on a quarterly basis.

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The following table presents changes in Level III financial liabilities measured at fair value on a recurring basis:
  Level III
Fair value of contingent consideration at December 31, 2016 $50
Additions: contingent consideration related to acquisitions completed during the period 3
Reductions: payments of contingent consideration (reflected in the financing section of the Consolidated Statement of Cash Flows) (18)
Changes in fair value (reflected in the Consolidated Statement of Operations) (2)
Fair value of contingent consideration at September 30, 2017 $33


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Level III
Fair value of contingent consideration at December 31, 2019$4 
Additions: contingent consideration related to acquisitions completed during the period1 
Reductions: payments of contingent consideration— 
Changes in fair value (reflected in general and administrative expenses)— 
Fair value of contingent consideration at June 30, 2020$5 
The following table summarizes the principal amount of the Company’s indebtedness compared to the estimated fair value, primarily determined by quoted market values, at:
September 30, 2017 December 31, 2016 June 30, 2020December 31, 2019
DebtPrincipal Amount Estimated
Fair Value (a)		 Principal Amount Estimated
Fair Value (a)		DebtPrincipal AmountEstimated
Fair Value (a)		Principal AmountEstimated
Fair Value (a)
Senior Secured Credit Facility:       Senior Secured Credit Facility:
Revolving Credit Facility$190
 $190
 $200
 $200
Revolving Credit Facility$815  $815  $190  $190  
Term Loan B1,086
 1,092
 1,094
 1,100
Term Loan B1,053  963  1,058  1,048  
Term Loan A Facility:       Term Loan A Facility:
Term Loan A397
 398
 413
 414
Term Loan A703  650  717  705  
Term Loan A-1344
 345
 351
 351
4.50% Senior Notes450
 462
 450
 461
7.625% Senior Secured Second Lien Notes7.625% Senior Secured Second Lien Notes550  549  —  —  
5.25% Senior Notes550
 573
 550
 562
5.25% Senior Notes—  —  550  557  
4.875% Senior Notes500
 514
 500
 483
4.875% Senior Notes407  383  407  401  
Securitization obligations234
 234
 205
 205
9.375% Senior Notes9.375% Senior Notes550  513  550  572  
_______________
(a)The fair value of the Company's indebtedness is categorized as Level II.
Investment in Mortgage Origination Ventures(a)The fair value of the Company's indebtedness is categorized as Level II.
Equity Method Investments
At June 30, 2020 and December 31, 2019, the Company had various equity method investments which are recorded within other non-current assets on the accompanying Condensed Consolidated Balance Sheets.
The Company owns 49.9% of PHH Home Loans, a mortgage origination venture formedCompany's investment in 2005 created for the purpose of originating and selling mortgage loans primarily sourced through the Company’s real estate brokerage and relocation businesses. PHH Corporation ("PHH") owns the remaining percentage. On February 15, 2017, Realogy announced that it and Guaranteed Rate, Inc. (“Guaranteed Rate”) agreed to form a new mortgage origination venture, Guaranteed Rate Affinity, LLC ("Guaranteed Rate Affinity"), which began doing business in August 2017. Guaranteed Rate owns a controlling 50.1% stake of Guaranteed Rate Affinity while at Realogy owns 49.9%. Guaranteed Rate has responsibility for the oversight of the officers and senior employees of Guaranteed Rate Affinity who are designated to manage Guaranteed Rate Affinity.
In accordance with the asset purchase agreement, Guaranteed Rate Affinity is acquiring certain assets of the mortgage operations of PHH Home Loans, including its four regional centers and employees across the United States, but not its mortgage assets. The asset purchase agreement and the movement of employees from the existing joint venture to the new joint venture is expected to be completed in a series of five phases. The first two phases were completed in the third quarter of 2017 and in October the third phase was completed. The remaining two phases are expected to be completed in the fourth quarter of 2017. While the equity earnings related to PHH Home Loans are included in the financial results of the Company Owned Real Estate Brokerage Services segment, the equity earnings related to Guaranteed Rate Affinity are included in the financial results of the Title and Settlement Services segment.
At SeptemberGroup had investment balances at June 30, 20172020 and December 31, 2016, the Company had various equity method investments aggregating $852019 of $84 million and $66$60 million, respectively. The Company's investment in PHH Home Loans was $46 million at September 30, 2017 and $59 million at December 31, 2016. The Company's investment in Guaranteed Rate Affinity was $31 million at September 30, 2017.
For the third quarter of 2017,three months ended June 30, 2020 and 2019, the Company recorded equity earnings of $10$35 million which consisted of $14and $6 million, ofrespectively, related to earnings from the sale of the first two phases of PHH Home Loans' assets toits investment in Guaranteed Rate Affinity, partially offset by $2 million of exit costs. In addition, there was a $2 million loss from equity method investments at the Title and Settlement Services segment primarily related to costs associated with the start up of operations of Guaranteed Rate Affinity, including $1 million of amortization of intangible assets recorded in purchase accounting.Affinity. For the third quarter of 2016,six months ended June 30, 2020 and 2019, the Company recorded equity earnings of $5$44 million of which $4and $7 million, respectively, related to earnings from its investment in PHH Home Loans.
For the nine months ended September 30, 2017, the Company recorded equity earnings of $7 million which consisted of $14 million of earnings from the sale of the first two phases of PHH Home Loans' assets to Guaranteed Rate Affinity, partially offset by $5 million of exit costs and losses of $1 million from the continuing operations results of PHH Home Loans. In addition, there was a $1 million loss from equity method investments at the Title and Settlement Services segment primarily related to costs associated with the start up of operations of Guaranteed Rate Affinity, including $1 million of


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amortization of intangible assets recorded in purchase accounting. For the nine months ended September 30, 2016, the Company recorded equity earnings of $10 million of which $7 million related to its investment in PHH Home Loans.
Affinity. The Company received $24 million and $5$20 million in cash dividends primarily from PHH Home Loans,Guaranteed Rate Affinity during the ninesix months ended SeptemberJune 30, 20172020 and 2016, respectively.0 cash dividends during the six months ended June 30, 2019. The Company invested $34$2 million of cash into Guaranteed Rate Affinity during the ninesix months ended SeptemberJune 30, 2017.2019.
The Company's other equity method investments at Realogy Title Group had investment balances at June 30, 2020 and December 31, 2019 totaling $8 million and $9 million, respectively. The Company recorded equity earnings from the operations of these equity method investments of $1 million in each period during both the three and six months ended June 30, 2020 and 2019. The Company received $2 million and $1 million in cash dividends from other equity method investments during the six months ended June 30, 2020 and 2019, respectively.
Income Taxes
The Company's provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against the income before income taxes for the period.  In addition, non-recurring or discrete items are recorded in the period in which they occur.  The provision for income taxes was an expense of $67$11 million and $74$33 million for the three months ended SeptemberJune 30, 20172020 and 2016,2019, respectively, and a benefit of $121 million and an expense of $131 million and $114$1 million for the ninesix months ended SeptemberJune 30, 20172020 and 2016,2019, respectively.

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Derivative Instruments
The Company records derivatives and hedging activities on the balance sheet at their respective fair values. The Company uses foreign currency forward contracts largely to manage its exposure to changes in foreign currency exchange rates associated with its foreign currency denominated receivables and payables.  The Company primarily manages its foreign currency exposure to the Euro, British Pound, Swiss Franc and Canadian Dollar. The Company has not elected to utilize hedge accounting for these forward contracts; therefore, any change in fair value is recorded in the Condensed Consolidated Statements of Operations. However, the fluctuations in the value of these forward contracts generally offset the impact of changes in the value of the underlying risk that they are intended to economically hedge. As of September 30, 2017, the Company had outstanding foreign currency forward contracts in an asset position with a fair value of less than $1 million and a notional value of $32 million. As of December 31, 2016, the Company had outstanding foreign currency forward contracts in a liability position with a fair value of $2 million and a notional value of $29 million.
The Company also enters into interest rate swaps to manage its exposure to changes in interest rates associated with its variable rate borrowings. TheAs of June 30, 2020, the Company hashad interest rate swaps with an aggregate notional value of $1,475$1,600 million to offset the variability in cash flows resulting from the term loan facilities as follows:
Notional Value (in millions)Commencement DateExpiration Date
$225600July 2012February 2018August 2015August 2020(a)
$200450January 2013February 2018November 2017November 2022
$600400August 2015August 2020(a)August 2025
$450150November 2017November 2022November 2027
_______________
(a)Interest rate swaps with a notional value of $600 million expire on August 7, 2020, and interest rate swaps with a notional value of $400 million commence on August 14, 2020.
The swaps help to protect our outstanding variable rate borrowings from future interest rate volatility. The Company has not elected to utilize hedge accounting for these interest rate swaps; therefore, any change in fair value is recorded in the Condensed Consolidated Statements of Operations.
The fair value of derivative instruments was as follows:
Liability Derivatives Fair Value
Not Designated as Hedging Instruments Balance Sheet Location September 30, 2017 December 31, 2016Not Designated as Hedging InstrumentsBalance Sheet LocationJune 30, 2020December 31, 2019
Interest rate swap contracts Other current and non-current liabilities $24
 $33
Interest rate swap contractsOther current and non-current liabilities99  47  
The effect of derivative instruments on earnings was as follows:
Derivative Instruments Not Designated as Hedging InstrumentsLocation of Loss Recognized for Derivative InstrumentsLoss Recognized on Derivatives
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Interest rate swap contractsInterest expense$8  $24  $59  $38  
Revenue
Revenue is recognized upon the transfer of control of promised services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services in accordance with the revenue standard.  The Company's revenue is disaggregated by major revenue categories on our Condensed Consolidated Statements of Operations and further disaggregated by business segment as follows:
Three Months Ended June 30,
 Realogy Franchise GroupRealogy Brokerage GroupRealogy Title
Group		Corporate and OtherTotal
Company
2020201920202019202020192020201920202019
Gross commission income (a)$—  $—  $919  $1,310  $—  $—  $—  $—  $919  $1,310  
Service revenue (b)14  26  4  3  154  154  —  —  172  183  
Franchise fees (c)148  196  —  —  —  —  (63) (84) 85  112  
Other (d)17  38  10  18  6  6  (2) (3) 31  59  
Net revenues$179  $260  $933  $1,331  $160  $160  $(65) $(87) $1,207  $1,664  

Six Months Ended June 30,
Realogy Franchise GroupRealogy Brokerage GroupRealogy Title
Group		Corporate and OtherTotal
Company
2020201920202019202020192020201920202019
Gross commission income (a)$—  $—  $1,769  $2,109  $—  $—  $—  $—  $1,769  $2,109  
Service revenue (b)27  42  9  5  287  265  —  —  323  312  
Franchise fees (c)275  319  —  —  —  —  (119) (137) 156  182  
Other (d)45  78  24  33  10  9  (4) (5) 75  115  
Net revenues$347  $439  $1,802  $2,147  $297  $274  $(123) $(142) $2,323  $2,718  
______________
(a)Consists primarily of revenues related to gross commission income at Realogy Brokerage Group, which is recognized at a point in time at the closing of a homesale transaction.

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Derivative Instruments Not Designated as Hedging Instruments Location of (Gain) or Loss Recognized for Derivative Instruments (Gain) or Loss Recognized on Derivatives
Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Interest rate swap contracts Interest expense $—
 $(5) $4
 $40
Foreign exchange contracts Operating expense 1
 (1) 2
 (1)
(b)Service revenue primarily consists of title and escrow fees at Realogy Title Group, which are recognized at a point in time at the closing of a homesale transaction.
Restricted Cash(c)Franchise fees at Realogy Franchise Group primarily include domestic royalties which are recognized at a point in time when the underlying franchisee revenue is earned (upon close of the homesale transaction).
Restricted cash primarily relates(d)Other revenue is comprised of brand marketing funds received at Realogy Franchise Group from franchisees, third-party listing fees in 2019 and other miscellaneous revenues across all of the business segments.
The following table shows the change in the Company's contract liabilities (deferred revenue) related to amounts specifically designated as collateralrevenue contracts by reportable segment for the repaymentperiod:
 Beginning Balance at January 1, 2020Additions during the periodRecognized as Revenue during the periodEnding Balance at June 30, 2020
Realogy Franchise Group:
Deferred area development fees (a)$48  $—  $(5) $43  
Deferred brand marketing fund fees (b)13  22  (32) 3  
Other deferred income related to revenue contracts11  14  (14) 11  
Total Realogy Franchise Group72  36  (51) 57  
Realogy Brokerage Group:
Advanced commissions related to development business (c)9  2  (2) 9  
Other deferred income related to revenue contracts4  1  (2) 3  
Total Realogy Brokerage Group13  3  (4) 12  
Total$85  $39  $(55) $69  
_______________
(a)The Company collects initial area development fees ("ADF") for international territory transactions, which are recorded as deferred revenue when received and recognized into franchise revenue over the average 25 year life of outstanding borrowings under the Company’s securitization facilities. Such amounts approximated $4 millionrelated franchise agreement as consideration for the right to access and $7 million atbenefit from Realogy’s brands. In the event an ADF agreement is terminated prior to the end of its term, the unamortized deferred revenue balance will be recognized into revenue immediately upon termination.

(b)Revenues recognized include intercompany marketing fees paid by Realogy Brokerage Group.

(c)New development closings generally have a development period of between 18 and 24 months from contracted date to closing.
13Allowance for Doubtful Accounts
TableThe Company estimates the allowance necessary to provide for uncollectible accounts receivable. The estimate is based on historical experience, combined with a review of Contents

September 30, 2017current conditions and December 31, 2016, respectively,forecasts of future losses, and includes specific accounts for which payment has become unlikely. The process by which the Company calculates the allowance begins in the individual business units where specific problem accounts are identified and reserved primarily included within other current assets onbased upon the Company’s Condensed Consolidated Balance Sheets.age profile of the receivables and specific payment issues, combined with reasonable and supportable forecasts of future losses.
Supplemental Cash Flow Information
Significant non-cash transactions during the ninesix months ended SeptemberJune 30, 20172020 and 20162019 included capitalfinance lease additions of $13$7 million and $10$9 million, respectively, which resulted in non-cash additions to property and equipment, net and other non-current liabilities.
Stock RepurchasesLeases
Other than the Company's facility closures as described in Note 6, "Restructuring Costs," the Company's lease obligations as of June 30, 2020 have not changed materially from the amounts reported in our 2019 Form 10-K.
Recently Adopted Accounting Pronouncements
The Company may repurchase sharesadopted the new accounting standard on Financial Instruments—Credit Losses (Topic 326) effective January 1, 2020. The new standard amends the guidance for measuring credit losses on certain financial instruments and financial assets, including trade receivables. The standard requires that companies recognize an allowance that reflects the current estimate of its common stock under authorizations made from its Board of Directors. Shares repurchased are retired and not displayed separately as treasury stock oncredit losses expected to be incurred over the consolidated financial statements. The par valuelife of the shares repurchasedfinancial instrument. The valuation allowance for credit losses should be recognized and retired is deducted from common stockmeasured based on historical experience, current conditions and the excessexpectations of the purchase price over par value is first charged against any available additional paid-in capital with the balance charged to retained earnings. Direct costs incurred to repurchase the shares are included in the total costfuture. The initial adoption of the shares.
In February 2016, the Company's Board of Directors authorized a share repurchase program of up to $275 million of the Company's common stock. In February 2017, the Company's Board of Directors authorized a new share repurchase program of up tothis guidance did not have an additional $300 million of the Company's common stock.
As of September 30, 2017, the Company had repurchased and retired 13 million shares of common stock for an aggregate of $275 million under the February 2016 share repurchase program and $102 million under the February 2017 share repurchase program at a total weighted average market price of $29.07 per share, including 1.8 million shares of common stock repurchased during the third quarter of 2017 for $58 million at a weighted average market price of $33.83 per share. As of September 30, 2017, approximately $198 million of authorization remains available for the repurchase of shares under the February 2017 share repurchase program.
Dividend Policy
In August 2016, the Company’s Board of Directors approved the initiation of a quarterly cash dividend policy of $0.09 per share on its common stock. The Board declared and paid a quarterly cash dividend of $0.09 per share of the Company’s common stock during each of the first, second and third quarters of 2017.
The declaration and payment of any future dividend will be subject to the discretion of the Board of Directors and will depend on a variety of factors, including the Company’s financial condition and results of operations, contractual restrictions, including restrictive covenants contained in the Company’s credit agreements, and the indentures governing the Company’s outstanding debt securities, capital requirements and other factors that the Board of Directors deems relevant.
Pursuantimpact to the Company’s policy, the dividends payable in cash are treated as a reductionCondensed Consolidated Financial Statements upon adoption on January 1, 2020.

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Table of additional paid-in capital since the Company is currently in a retained deficit position.Contents
Recently Issued Accounting Pronouncements
The Company considers the applicability and impact of all Accounting Standards Updates. ASUs not listed belowUpdates ("ASUs"). Recently issued standards were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.
In August 2016,
2. DISCONTINUED OPERATIONS
The Company entered into a Purchase and Sale Agreement on November 6, 2019 (the "Purchase Agreement"), for the FASB issued a new standard on classificationacquisition of Cartus Relocation Services, the Company's global employee relocation business, by North American Van Lines, Inc. (as assignee of SIRVA Worldwide, Inc., or "SIRVA") for $375 million in cash receipts and payments on the statement of cash flows intendingat closing, subject to reduce diversity in practice on how certain transactions are classified. In addition, in November 2016, the FASB issued a new standard requiring that the statement of cash flows explain the change during the periodadjustments set forth in the total of cash, cash equivalents,Purchase Agreement, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconcilinga $25 million deferred payment after the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new standards are effective for annual periods beginning after December 15, 2017 and will require a retrospective application at the beginningclosing of the earliest comparative period presented intransaction. SIRVA is a portfolio company of affiliates of Madison Dearborn Partners, LLC ("MDP"). See Note 9, "Commitments and Contingencies", to the yearCondensed Consolidated Financial Statements for additional information on litigation relating to the planned sale of adoption. Cartus Relocation.
The Company planstransaction under the Purchase Agreement includes all of Cartus Relocation Services, but not Realogy Leads Group. Realogy Leads Group is comprised of the Company's affinity and broker-to-broker business, as well as the broker network made up of agents and brokers from Realogy’s residential real estate brands and certain independent real estate brokers (which is referred to early adoptas the new standard inRealogy Advantage Broker Network).
In connection with the Company's signing of the Purchase Agreement during the fourth quarter of 2017. The2019, the Company expects theremet the requirements to be reclassifications between cash flow categories, but no net cash impactreport the operating results of the Cartus Relocation Services business as discontinued operations. Accordingly, the income (loss) related to itsCartus Relocation Services is reported in "Net (loss) income from discontinued operations" on the Condensed Consolidated StatementStatements of Operations for all periods presented. In addition, the related assets and liabilities are reported as assets and liabilities held for sale on the Condensed Consolidated Balance Sheets. The cash flows related to discontinued operations have been segregated and are included in the Condensed Consolidated Statements of Cash Flows.

The following table summarizes the operating results of discontinued operations described above and reflected within "Net (loss) income from discontinued operations" in the Company’s Condensed Consolidated Statements of Operations for each of the periods presented:

 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Net revenues$48  $71  $100  $131  
Total expenses61  70  119  147  
(Loss) income from discontinued operations(13) 1  (19) (16) 
Estimated loss on the sale of discontinued operations (a)(44) —  (74) —  
Income tax benefit from discontinued operations(16) —  (25) (3) 
Net (loss) income from discontinued operations$(41) $1  $(68) $(13) 
14_______________
Table(a)Adjustment to record assets and liabilities held for sale at the lower of Contents

In February 2016, the FASB issued its new standard on leases which requires virtually all leasescarrying value or fair value less any costs to be recognized on the balance sheet. Lessees will recognize a right-of-use asset and a lease liability for all leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will besell based on the liability, subjectestimated net purchase price.

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Assets and liabilities held for sale related to adjustment, such as for initial direct costs. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance leases. Operating leases will result in straight-line expense, similar to current operating leases, while finance leases will result in a front-loaded expense pattern, similar to current capital leases. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. The new standard is effective for annual periods beginning after December 15, 2018. Early adoption is permitted. The new leasing standard requires modified retrospective transition, which requires application of the new guidance at the beginning of the earliest comparative perioddiscontinued operations presented in the year of adoption. The Company is currently evaluating the impact of the standard on its consolidated financial statementsCondensed Consolidated Balance Sheets at June 30, 2020 and is in the process of implementing a new lease management system.
In May 2014, the FASB issued a standard on revenue recognition that will impact most companies to some extent. The objective of the revenue standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and the timing of revenue recognition. The new standard permits for two alternative implementation methods, the use of either (1) full retrospective application to each prior reporting period presented or (2) modified retrospective application in which the cumulative effect of initially applying the revenue standard is recognized as an adjustment to the opening balance of retained earnings in the period of adoption. The Company plans to adopt the new standard in the first quarter of 2018 using the modified retrospective transition method. The Company has made progress on redrafting its revenue recognition accounting policies affected by the standard, assessing the redesign of internal controls, as well as evaluating the expanded disclosure requirements. After a review of the Company's revenue streams, the Company does not expect the new standard to have a material impact on financial results as the majority of the Company's revenue is recognized at the completion of a homesale transaction which will not result in a change in the timing of recognition of revenue transactions under the new revenue recognition guidance.
2.ACQUISITIONS
2017 Acquisitions
During the nine months ended September 30, 2017, the Company acquired eleven real estate brokerage operations through its wholly owned subsidiary, NRT, for aggregate cash consideration of $6 million and established $1 million of contingent consideration. These acquisitions resulted in goodwill of $5 million, pendings and listings of $1 million and other intangibles of $1 million.
During the nine months ended September 30, 2017, the Company acquired one title and settlement operation through its wholly owned subsidiary, TRG, for cash consideration of $7 million and established $2 million of contingent consideration. This acquisition resulted in goodwill of $8 million and pendings of $1 million.
None of the 2017 acquisitions were significant to the Company’s results of operations, financial position or cash flows individually or in the aggregate.
2016 Acquisitions
During the year ended December 31, 2016, the Company acquired eleven real estate brokerage and property management operations through its wholly owned subsidiary, NRT, for aggregate cash consideration of $74 million and established $9 million of contingent consideration. These acquisitions resulted in goodwill of $52 million, customer relationships of $20 million, pendings and listings of $6 million, other intangible assets of $3 million, other assets of $5 million and other liabilities of $3 million.
During the year ended December 31, 2016, the Company acquired one title and settlement operation through its wholly owned subsidiary, TRG, for cash consideration of $24 million and established $10 million of contingent consideration. This acquisition resulted in goodwill of $20 million, title plant of $7 million, pendings of $5 million, trademarks of $3 million, other intangible assets of $2 million, other assets of $6 million and other liabilities of $9 million.


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None of the 2016 acquisitions were significant to the Company’s results of operations, financial position or cash flows individually or in the aggregate.


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3.INTANGIBLE ASSETS
Goodwill by segment and changes in the carrying amount2019 are as follows:
 June 30, 2020December 31, 2019
Carrying amounts of the major classes of assets held for sale
Cash and cash equivalents$11  $28  
Restricted cash7  3  
Trade receivables35  46  
Relocation receivables190  203  
Other current assets11  12  
Property and equipment, net41  36  
Operating lease assets, net24  36  
Goodwill176  176  
Trademarks76  76  
Other intangibles, net156  156  
Allowance for reduction of assets held for sale (a)(96) (22) 
Total assets classified as held for sale$631  $750  
Carrying amounts of the major classes of liabilities held for sale
Accounts payable$35  $53  
Securitization obligations113  206  
Current portion of operating lease liabilities5  6  
Accrued expenses and other current liabilities52  62  
Long-term operating lease liabilities26  29  
Total liabilities classified as held for sale$231  $356  
 
Real Estate
Franchise
Services
 
Company
Owned
Brokerage
Services
 
Relocation
Services
 
Title and
Settlement
Services
 
Total
Company
Gross goodwill as of December 31, 2016$3,315
 $1,051
 $641
 $469
 $5,476
Accumulated impairment losses(1,023) (158) (281) (324) (1,786)
Balance at December 31, 20162,292
 893
 360
 145
 3,690
Goodwill acquired—
 6
 —
 8
 14
Balance at September 30, 2017$2,292
 $899
 $360
 $153
 $3,704
_______________
Intangible(a)Adjustment to record assets and liabilities held for sale at the lower of carrying value or fair value less any costs to sell based on the Purchase Agreement.
Securitization Obligations
Securitization Obligations in the table above are further broken out as follows:
 As of September 30, 2017 As of December 31, 2016
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Amortizable—Franchise agreements (a)$2,019
 $708
 $1,311
 $2,019
 $658
 $1,361
Indefinite life—Trademarks (b)$748
   $748
 $748
   $748
Other Intangibles           
Amortizable—License agreements (c)$45
 $10
 $35
 $45
 $9
 $36
Amortizable—Customer relationships (d)550
 330
 220
 550
 312
 238
Indefinite life—Title plant shares (e)18
   18
 18
   18
Amortizable—Pendings and listings (f)2
 1
 1
 6
 5
 1
Amortizable—Other (g)33
 16
 17
 33
 13
 20
Total Other Intangibles$648
 $357
 $291
 $652
 $339
 $313
_______________
(a)    Generally amortized over a period of 30 years.
(b)
Primarily relates to the Century 21®, Coldwell Banker®, ERA®, Corcoran®, Coldwell Banker Commercial® and Cartus tradenames, which are expected to generate future cash flows for an indefinite period of time.
(c)
Relates to the Sotheby’s International Realty® and Better Homes and Gardens® Real Estate agreements which are being amortized over 50 years (the contractual term of the license agreements).
(d)Relates to the customer relationships at the Relocation Services segment, the Title and Settlement Services segment, the Real Estate Franchise Services segment and our Company Owned Real Estate Brokerage Services segment. These relationships are being amortized over a period of 2 to 20 years.
(e)Ownership in a title plant is required to transact title insurance in certain states. The Company expects to generate future cash flows for an indefinite period of time.
(f)Generally amortized over a period of 5 months.
(g)Consists of covenants not to compete which are amortized over their contract lives and other intangibles which are generally amortized over periods ranging from 5 to 10 years.
Intangible asset amortization expense is as follows:
 Three Months Ended
September 30,		 Nine Months Ended
September 30,
 2017 2016 2017 2016
Franchise agreements$16
 $16
 $50
 $50
License agreements1
 —
 1
 1
Customer relationships5
 7
 18
 20
Pendings and listings2
 7
 3
 9
Other1
 1
 4
 4
Total$25
 $31
 $76
 $84
Based on the Company’s amortizable intangible assets as of September 30, 2017, the Company expects related amortization expense for the remainder of 2017, the four succeeding years and thereafter to be approximately $25 million, $97 million, $97 million, $95 million, $92 million and $1,178 million, respectively.
4.ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consisted of:
 September 30, 2017 December 31, 2016
Accrued payroll and related employee costs$123
 $138
Accrued volume incentives38
 40
Accrued commissions41
 31
Restructuring accruals7
 14
Deferred income60
 69
Accrued interest31
 13
Contingent consideration for acquisitions23
 24
Other119
 106
Total accrued expenses and other current liabilities$442
 $435
5.    SHORT AND LONG-TERM DEBT
Total indebtedness is as follows:
 September 30, 2017 December 31, 2016
Senior Secured Credit Facility:   
Revolving Credit Facility$190
 $200
Term Loan B1,065
 1,069
Term Loan A Facility:   
Term Loan A395
 411
Term Loan A-1341
 347
4.50% Senior Notes443
 439
5.25% Senior Notes546
 545
4.875% Senior Notes496
 496
Total Short-Term & Long-Term Debt$3,476
 $3,507
Securitization obligations:   
Apple Ridge Funding LLC$223
 $192
Cartus Financing Limited11
 13
Total securitization obligations$234
 $205
Indebtedness Table
As of September 30, 2017, the Company’s borrowing arrangements were as follows:
 Interest
Rate		 Expiration
Date		 Principal Amount Unamortized Discount and Debt Issuance Costs Net Amount
Senior Secured Credit Facility:         
Revolving Credit Facility (1)(2) October 2020 $190
 $ *
 $190
Term Loan B(3) July 2022 1,086
 21
 1,065
Term Loan A Facility:         
Term Loan A(4) October 2020 397
 2
 395
Term Loan A-1(5) July 2021 344
 3
 341
Senior Notes4.50% April 2019 450
 7
 443
Senior Notes5.25% December 2021 550
 4
 546
Senior Notes4.875% June 2023 500
 4
 496
Securitization obligations: (6)         
        Apple Ridge Funding LLC (7)  June 2018 223
 *
 223
        Cartus Financing Limited (8)  August 2018 11
 *
 11
Total (9)$3,751
 $41
 $3,710


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_______________
*The debt issuance costs related to our Revolving Credit Facility and securitization obligations are classified as a deferred financing asset within other assets.
(1)As of September 30, 2017, the Company had $1,050 million of borrowing capacity under its Revolving Credit Facility, leaving $860 million of available capacity. The revolving credit facility expires in October 2020, but is classified on the balance sheet as current due to the revolving nature of the facility. On November 1, 2017, the Company had $70 million in outstanding borrowings under the Revolving Credit Facility, leaving $980 million of available capacity.
(2)Interest rates with respect to revolving loans under the Senior Secured Credit Facility at September 30, 2017 are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended September 30, 2017.
(3)
The Term Loan B provides for quarterly amortization payments totaling 1% per annum of the original principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at the Company’s option, (a) adjusted LIBOR plus 2.25% (with a LIBOR floor of 0.75%) or (b) JPMorgan Chase Bank, N.A.’s prime rate ("ABR") plus 1.25% (with an ABR floor of 1.75%).
(4)
The Term Loan A provides for quarterly amortization payments, which commenced March 31, 2016, totaling per annum 5%, 5%, 7.5%, 10.0% and 12.5% of the original principal amount of the Term Loan A in 2016, 2017, 2018, 2019 and 2020, respectively. The interest rates with respect to term loans under the Term Loan A are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended September 30, 2017.
(5)The Term Loan A-1 provides for quarterly amortization payments, which commenced on September 30, 2016, totaling per annum 2.5%, 2.5%, 5%, 7.5% and 10.0% of the original principal amount of the Term Loan A-1, with the last amortization payment made on June 30, 2021. The interest rates with respect to term loans under the Term Loan A-1 are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended September 30, 2017.
(6)Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations.
(7)In June 2017, Realogy Group extended the existing Apple Ridge Funding LLC securitization program utilized by Cartus until June 2018. As of September 30, 2017, the Company had $325 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving $102 million of available capacity.
(8)
Consists of a £10 million revolving loan facility and a £5 million working capital facility. As of September 30, 2017, the Company had $20 million of borrowing capacity under the Cartus Financing Limited securitization program leaving $9 million of available capacity. In September 2017, Realogy Group extended the existing Cartus Financing Limited securitization program to August 2018.
(9)Not included in this table is the Company's Unsecured Letter of Credit Facility which had a capacity of $74 million with $71 million utilized at a weighted average rate of 3.24% at September 30, 2017.
Maturities Table
As of September 30, 2017, the combined aggregate amount of maturities for long-term borrowings, excluding securitization obligations, for the remainder of 2017 and each of the next four years is as follows:
Year Amount
Remaining 2017 (a) $200
2018 57
2019 527
2020 357
2021 837
_______________

(a)The current portion of long-term debt consists of remaining 2017 amortization payments totaling $5 million, $2 million and $3 million for the Term Loan A, Term Loan A-1 and Term Loan B facilities, respectively, as well as $190 million of revolver borrowings under the revolving credit facility which expires in October 2020, but are classified on the balance sheet as current due to the revolving nature of the facility.


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Senior Secured Credit Facility
In July 2016, the Company entered into a third amendment (the “Third Amendment”) to the Amended and Restated Credit Agreement, dated as of March 5, 2013, as amended. The Third Amendment replaced the $1,858 million Term Loan B due March 2020 with a new $1,100 million Term Loan B due July 20, 2022. In January 2017, the Company entered into a fourth amendment (the “Fourth Amendment” to the Amended and Restated Credit Agreement, as so amended, the "Senior Secured Credit Agreement") that repriced the Term Loan B through a refinancing of the existing term loan with a new Term Loan B. The Fourth Amendment reduced the interest rate by 75 basis points but did not change the maturity date for the Term Loan B. The Company also entered into an Incremental Assumption Agreement to the Senior Secured Credit Agreement pursuant to which the Company increased the borrowing capacity under its Revolving Credit Facility to $1,050 million from the existing $815 million.
The Senior Secured Credit Agreement provides for:
(a) a Term Loan B issued in the original aggregate principal amount of $1,100 million with a maturity date of July 2022. The Term Loan B has quarterly amortization payments totaling 1% per annum of the initial aggregate principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at Realogy Group's option, adjusted LIBOR plus 2.25% (with a LIBOR floor of 0.75%) or ABR plus 1.25% (with an ABR floor of 1.75%); and
(b)a $1,050 million Revolving Credit Facility with a maturity date of October 23, 2020, which includes (i) a $125 million letter of credit subfacility and (ii) a swingline loan subfacility. The interest rate with respect to revolving loans under the Revolving Credit Facility is based on, at Realogy Group's option, adjusted LIBOR or ABR plus an additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:
Senior Secured Leverage Ratio Applicable LIBOR Margin Applicable ABR Margin
Greater than 3.50 to 1.00 2.50% 1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 2.25% 1.25%
Less than 2.50 to 1.00 2.00% 1.00%
The Senior Secured Credit Agreement permits the Company to obtain up to $500 million of additional credit facilities from lenders reasonably satisfactory to the administrative agent and us, without the consent of the existing lenders under the new senior secured credit facility, plus an unlimited amount if Realogy Group's senior secured leverage ratio is less than 3.50 to 1.00 on a pro forma basis. Subject to certain restrictions, the Senior Secured Credit Agreement also permits us to issue senior secured or unsecured notes in lieu of any incremental facility.
The obligations under the Senior Secured Credit Agreement are secured to the extent legally permissible by substantially all of the assets of Realogy Group, Realogy Intermediate and all of their domestic subsidiaries, other than certain excluded subsidiaries.
Realogy Group’s Senior Secured Credit Agreement contains financial, affirmative and negative covenants and requires Realogy Group to maintain a senior secured leverage ratio, not to exceed 4.75 to 1.00. The leverage ratio is tested quarterly regardless of the amount of borrowings outstanding and letters of credit issued under the revolver at the testing date. Total senior secured net debt does not include unsecured indebtedness, including the Unsecured Notes as well as the securitization obligations. At September 30, 2017, Realogy Group was in compliance with the senior secured leverage ratio covenant.
Term Loan A Facility
In October 2015, Realogy Group entered into the Term Loan A senior secured credit agreement which provides for a five-year, $435 million loan issued at par with a maturity date of October 23, 2020 (the “Term Loan A”) and has terms substantially similar to the Senior Secured Credit Agreement. The Term Loan A provides for quarterly amortization payments, which commenced March 31, 2016, totaling the amount per annum equal to the following percentages of the original principal amount of the Term Loan A: 5%, 5%, 7.5%, 10.0% and 12.5% for amortizations payable in 2016, 2017, 2018, 2019 and 2020, with the balance payable upon the final maturity date. The interest rates with respect to term loans under the Term Loan A are based on, at our option, adjusted LIBOR or ABR plus an additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:


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Senior Secured Leverage Ratio Applicable LIBOR Margin Applicable ABR Margin
Greater than 3.50 to 1.00 2.50% 1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 2.25% 1.25%
Less than 2.50 to 1.00 2.00% 1.00%
In July 2016, Realogy Group entered into a first amendment to the Term Loan A senior secured credit agreement. Under the amendment, the Company issued the Term Loan A-1 in the amount of $355 million with a maturity date in July 2021 under its existing Term Loan A Facility and on terms substantially similar to its existing Term Loan A. The Term Loan A-1 provides for quarterly amortization payments totaling per annum 2.5%, 2.5%, 5%, 7.5% and 10.0% of the original principal amount of the Term Loan A-1, which commenced September 30, 2016 continuing through June 30, 2021.
The interest rates with respect to term loans under the Term Loan A-1 are based on, at our option, adjusted LIBOR or ABR plus an additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:
Senior Secured Leverage Ratio Applicable LIBOR Margin Applicable ABR Margin
Greater than 3.50 to 1.00 2.50% 1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 2.25% 1.25%
Less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.00 2.00% 1.00%
Less than 2.00 to 1.00 1.75% 0.75%
Consistent with the Senior Secured Credit Agreement, the Term Loan A Facility permits the Company to obtain up to $500 million of additional credit facilities from lenders reasonably satisfactory to the administrative agent and the company, without the consent of the existing lenders under the Term Loan A, plus an unlimited amount if the Company's senior secured leverage ratio is less than 3.50 to 1.00 on a pro forma basis. Subject to certain restrictions, the Term Loan A Facility also permits us to issue senior secured or unsecured notes in lieu of any incremental facility.
Unsecured Notes
The 4.50% Senior Notes, 5.25% Senior Notes and 4.875% Senior Notes (each as defined below, collectively the "Unsecured Notes") are unsecured senior obligations of Realogy Group that mature on April 15, 2019, December 1, 2021 and June 1, 2023, respectively. Interest on the Unsecured Notes is payable each year semiannually on April 15 and October 15 for the 4.50% Senior Notes and June 1 and December 1 for both the 5.25% Senior Notes and 4.875% Senior Notes.
The Unsecured Notes are guaranteed on an unsecured senior basis by each domestic subsidiary of Realogy Group that is a guarantor under the Senior Secured Credit Facility and Realogy Group's outstanding debt securities and are guaranteed by Realogy Holdings on an unsecured senior subordinated basis.
Other Debt Facilities
The Company has an Unsecured Letter of Credit Facility to provide for the issuance of letters of credit required for general corporate purposes by the Company. At September 30, 2017, the capacity of the facility was $74 million with $71 million being utilized and at December 31, 2016, the capacity of the facility was $131 million with $127 million being utilized. In August 2017, the standby irrevocable letter of credit, which was utilized to support the Company’s payment obligations with respect to its share of Cendant contingent and other corporate liabilities, was terminated as a result of the resolution of a Cendant legacy tax matter, reducing the capacity and outstanding letters of credit under the Unsecured Letter of Credit Facility. The facility's expiration dates are as follows:
Capacity (in millions)Expiration Date
$8September 2018
$66December 2019


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The fixed pricing to the Company is based on a spread above the credit default swap rate for senior unsecured debt obligations of the Company over the applicable letter of credit period. Realogy Group's obligations under the Unsecured Letter of Credit Facility are guaranteed on an unsecured senior basis by each domestic subsidiary of Realogy Group that is a guarantor under the Senior Secured Credit Facility and Realogy Group's outstanding debt securities.
Securitization Obligations
 June 30, 2020December 31, 2019
Securitization Obligations:
Apple Ridge Funding LLC$106  $195  
Cartus Financing Limited7  11  
Total Securitization Obligations$113  $206  
Realogy Group has secured obligations through Apple Ridge Funding LLC under a securitization program. In June 2017,2020, Realogy Group extended the existing Apple Ridge Funding LLC securitization program until August 2020 and reduced the maximum borrowing capacity from $250 million to $200 million. As of June 2018. The program has a capacity of $325 million. At September 30, 2017, Realogy Group2020, the Company had $223$200 million of outstanding borrowingsborrowing capacity under the facility.Apple Ridge Funding LLC securitization program with $106 million being utilized leaving $94 million of available capacity subject to maintaining sufficient relocation related assets to collateralize the securitization obligation. In August 2020, the facility was further extended to June 2021.
Realogy Group, through a special purpose entity known as Cartus Financing Limited, has agreements providing for a £10 million revolving loan facility and a £5 million working capital facility. In September 2017, Realogy Group extended the existing Cartus Financing Limited securitization program tofacility which expires on August 2018. There31, 2020. As of June 30, 2020, there were $11$7 million of outstanding borrowings onunder the facilities at September 30, 2017.leaving $12 million of available capacity subject to maintaining sufficient relocation related assets to collateralize the securitization obligation. These Cartus Financing Limited facilities are secured by the relocation assets of a U.K. government contract in this special purpose entity and are therefore classified as permitted securitization financings as defined in Realogy Group’s Senior Secured Credit FacilityAgreement and the indentures governing the Unsecured Notes and 7.625% Senior Secured Second Lien Notes.

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The Apple Ridge entities and the Cartus Financing Limited entity are consolidated special purpose entities that are utilized to securitize relocation receivables and related assets. These assets are generated from advancing funds on behalf of clients of Realogy Group’s relocation business in order to facilitate the relocation of their employees. Assets of these special purpose entities are not available to pay Realogy Group’s general obligations. Under the Apple Ridge program, provided no termination or amortization event has occurred, any new receivables generated under the designated relocation management agreements are sold into the securitization program and as new eligible relocation management agreements are entered into, the new agreements are designated to the program.
The Apple Ridge program has restrictive covenants and trigger events, including performance triggers linked to the age and quality of the underlying assets, foreign obligor limits, multicurrency limits, financial reporting requirements, restrictions on mergers and change of control, any uncured breach of Realogy Group’s senior secured leverage ratio under Realogy Group’s Senior Secured Credit Facility, and cross-defaults to Realogy Group’s material indebtedness. The occurrence of a trigger event under the Apple Ridge securitization facility could restrict our ability to access new or existing funding under this facility or result in termination of the facility, either of which would adversely affect the operation of our relocation business.Cartus Relocation Services and the Company.
Certain of the funds that Realogy Group receivesreceived from relocation receivables and related assets mustare required to be utilized to repay securitization obligations. These obligations wereare collateralized by $259$182 million and $238$200 million of underlying relocation receivables and other related relocation assets at SeptemberJune 30, 20172020 and December 31, 2016,2019, respectively. Substantially all relocation related assets are realized in less than twelve months from the transaction date. Accordingly, all of Realogy Group’s securitization obligations are classified as current in the accompanying Condensed Consolidated Balance Sheets.
Interest incurred in connection with borrowings under these facilities amounted to $1 million and $2 million for the three months ended SeptemberJune 30, 20172020 and 20162019, respectively, and $5$3 million and $4 million for the ninesix months ended SeptemberJune 30, 20172020 and 2016. This interest is recorded within net revenues in the accompanying Condensed Consolidated Statements of Operations as related borrowings are utilized to fund Realogy Group's relocation business where interest is generally earned on such assets.2019, respectively. These securitization obligations represent floating rate debt for which the average weighted interest rate was 3.3%3.8% and 2.5%4.4% for the ninesix months ended SeptemberJune 30, 20172020 and 20162019, respectively.
3. GOODWILL AND INTANGIBLE ASSETS
Impairment of Goodwill and Other Indefinite-lived Intangible Assets
Goodwill represents the excess of acquisition costs over the fair value of the net tangible assets and identifiable intangible assets acquired in a business combination. Other indefinite-lived intangible assets primarily consist of trademarks acquired in business combinations. Goodwill and other indefinite-lived assets are not amortized, but are subject to impairment testing. The aggregate carrying values of our goodwill and other indefinite-lived intangible assets are subject to an impairment assessment annually as of October 1, or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. This assessment compares carrying values of the goodwill reporting units and other indefinite lived intangible assets to their respective fair values and, when appropriate, the carrying value is reduced to fair value.
In testing goodwill, the fair value of each reporting unit is estimated using the income approach, a discounted cash flow approach. For the other indefinite lived intangible assets, fair value is estimated using the relief from royalty method. Management utilizes long-term cash flow forecasts and the Company's annual operating plans adjusted for terminal value assumptions. The fair value of the Company's reporting units and other indefinite lived intangible assets are determined utilizing the best estimate of future revenues, operating expenses including commission expense, market and general economic conditions, trends in the industry, as well as assumptions that management believes marketplace participants would utilize including discount rates, cost of capital, trademark royalty rates, and long-term growth rates. The trademark royalty rate was determined by reviewing similar trademark agreements with third parties. Although management believes that assumptions are reasonable, actual results may vary significantly.
During the first quarter of 2020, the Company determined that the impact on future earnings related to the COVID-19 pandemic qualified as a triggering event for all of our reporting units and accordingly, the Company performed an impairment assessment of goodwill and other indefinite-lived intangible assets as of March 31, 2020. This assessment resulted in the recognition of an impairment of Realogy Franchise Group trademarks of $30 million and a goodwill impairment of $413 million for Realogy Brokerage Group offset by an income tax benefit of $99 million resulting in a net reduction to Realogy Brokerage Group's carrying value of $314 million. The primary drivers to the impairments were a significant increase in the weighted average cost of capital due to the volatility in the capital and debt markets due to COVID-19 and the related lower projected financial results for 2020. The impairment charges are recorded on a separate line in the accompanying Condensed Consolidated Statements of Operations and are non-cash in nature.

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These impairment assessments involve the use of accounting estimates and assumptions, changes in which could materially impact our financial condition or operating performance if actual results differ from such estimates and assumptions. To address this uncertainty, a sensitivity analysis is performed on key estimates and assumptions. Under the income approach, management used key valuation assumptions in determining the fair value estimates of the Company's reporting units including a discount rate based on the Company's best estimate of the weighted average cost of capital and a long-term growth rate based on the Company's best estimate of terminal growth rates.
As a result of the COVID-19 pandemic which caused volatility in the capital and debt markets, there was a significant increase in the weighted average cost of capital used to discount the future cash flows in the impairment assessment model. The following table provides a comparison of key assumptions used in the Company's impairment assessment performed in the first quarter of 2020 compared to the prior assessment performed in the fourth quarter of 2019:
Discount RateLong-term Growth Rates
First Quarter 2020Fourth Quarter 2019First Quarter 2020Fourth Quarter 2019
Realogy Franchise Group10.0%8.5%2.5%2.5%
Realogy Brokerage Group11.0%9.0%2.0%2.0%
Realogy Title Group11.0%9.5%2.5%2.5%
Given the increase in the discount rate and lower projected 2020 financial results in this impairment analysis, the estimated excess fair value over carrying value for Realogy Franchise Group and Realogy Title Group was reduced to 7% and 5%, respectively. While management believes the assumptions used in the impairment test are reasonable, a 100 basis point increase in the discount rate, holding other assumptions constant, would result in an impairment of goodwill at Realogy Franchise Group and Realogy Title Group.
There is a significant amount of future uncertainty related to the impact of the COVID-19 pandemic. In addition, significant negative industry or economic trends, disruptions to the business, unexpected significant changes or planned changes in use of the assets, a decrease in business results, growth rates that fall below management's assumptions, divestitures, and a sustained decline in the Company's stock price and market capitalization may have a negative effect on the fair values and key valuation assumptions, and such changes could result in changes to management's estimates of fair value and a material impairment of goodwill or other indefinite-lived intangible assets.
Goodwill
Goodwill by reporting unit and changes in the carrying amount are as follows:
Realogy Franchise GroupRealogy Brokerage GroupRealogy
Title
Group		Total
Company
Balance at December 31, 2019$2,476  $669  $155  $3,300  
Goodwill acquired—  —  —  —  
Impairment loss—  (413) —  (413) 
Balance at June 30, 2020$2,476  $256  $155  $2,887  
Accumulated impairment losses (a)$1,160  $808  $324  $2,292  
_______________
(a)Includes impairment charges which reduced goodwill by $413 million, $237 million, $1,153 million and $489 million during the first quarter of 2020, third quarter of 2019, fourth quarter of 2008 and fourth quarter of 2007, respectively.

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Intangible Assets
Intangible assets are as follows:
 As of June 30, 2020As of December 31, 2019
 Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount
Amortizable—Franchise agreements (a)$2,019  $893  $1,126  $2,019  $859  $1,160  
Indefinite life—Trademarks (b) (c)$643  $643  $673  $673  
Other Intangibles
Amortizable—License agreements (d)$45  $12  $33  $45  $12  $33  
Amortizable—Customer relationships (e)71  58  13  71  57  14  
Indefinite life—Title plant shares (f)19  19  19  19  
Amortizable—Other (g)23  18  5  27  21  6  
Total Other Intangibles$158  $88  $70  $162  $90  $72  
_______________
(a)Generally amortized over a period of 30 years.
(b)Primarily related to real estate franchise brands which are expected to generate future cash flows for an indefinite period of time.
(c)Realogy Franchise Group trademarks was impaired by $30 million during the first quarter of 2020.
(d)Relates to the Sotheby’s International Realty® and Better Homes and Gardens® Real Estate agreements which are being amortized over 50 years (the contractual term of the license agreements).
(e)Relates to the customer relationships at Realogy Title Group and Realogy Brokerage Group. These relationships are being amortized over a period of 2 to 12 years.
(f)Ownership in a title plant is required to transact title insurance in certain states. The Company expects to generate future cash flows for an indefinite period of time.
(g)Consists of covenants not to compete which are amortized over their contract lives and other intangibles which are generally amortized over periods ranging from 5 to 10 years.
Intangible asset amortization expense is as follows:
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2020201920202019
Franchise agreements$17  $17  $34  $34  
License agreements—  —  —  —  
Customer relationships—  1  1  2  
Other1  1  2  2  
Total$18  $19  $37  $38  
Based on the Company’s amortizable intangible assets as of June 30, 2020, the Company expects related amortization expense for the remainder of 2020, the 4 succeeding years and thereafter to be approximately $37 million, $72 million, $70 million, $70 million, $70 million and $858 million, respectively.
4. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consisted of:
 June 30, 2020December 31, 2019
Accrued payroll and related employee costs$93  $103  
Accrued volume incentives20  35  
Accrued commissions48  32  
Restructuring accruals8  11  
Deferred income34  43  
Accrued interest21  18  
Current portion of finance lease liabilities13  13  
Due to former parent19  18  
Other76  77  
Total accrued expenses and other current liabilities$332  $350  

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5. SHORT AND LONG-TERM DEBT
Total indebtedness is as follows:
 June 30, 2020December 31, 2019
Senior Secured Credit Facility:
Revolving Credit Facility$815  $190  
Term Loan B1,041  1,045  
Term Loan A Facility:
Term Loan A700  714  
7.625% Senior Secured Second Lien Notes539  —  
5.25% Senior Notes—  548  
4.875% Senior Notes405  405  
9.375% Senior Notes543  543  
Total Short-Term & Long-Term Debt$4,043  $3,445  
Indebtedness Table
As of June 30, 2020, the Company’s borrowing arrangements were as follows:
Interest
Rate		Expiration
Date		Principal AmountUnamortized Discount and Debt Issuance CostsNet Amount
Senior Secured Credit Facility:
Revolving Credit Facility (1)(2)February 2023$815  $ *$815  
Term Loan B(3)February 20251,053  12  1,041  
Term Loan A Facility:
Term Loan A(4)February 2023703  3  700  
Senior Secured Second Lien Notes7.625%June 2025550  11  539  
Senior Notes4.875%June 2023407  2  405  
Senior Notes9.375%April 2027550  7  543  
Total$4,078  $35  $4,043  
_______________
* The debt issuance costs related to our Revolving Credit Facility are classified as a deferred financing asset within other assets.
(1)In response to the rapidly evolving COVID-19 pandemic, the Company borrowed an additional $400 million under the Revolving Credit Facility in March 2020 as a proactive measure intended to increase liquidity to support our operations and supplement available cash on hand. As of June 30, 2020, the $1,425 million Revolving Credit Facility had outstanding borrowings of $815 million, as well as $40 million of outstanding undrawn letters of credit. The Revolving Credit Facility expires in February 2023 but is classified on the balance sheet as current due to the revolving nature and terms and conditions of the facility. On August 3, 2020, the Company had $815 million in outstanding borrowings under the Revolving Credit Facility and $40 million of outstanding undrawn letters of credit.
(2)Interest rates with respect to revolving loans under the Senior Secured Credit Facility at June 30, 2020 were based on, at the Company's option, (a) adjusted London Interbank Offering Rate ("LIBOR") plus an additional margin or (b) JP Morgan Chase Bank, N.A.'s prime rate ("ABR") plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter's senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended June 30, 2020.
(3)The Term Loan B provides for quarterly amortization payments totaling 1% per annum of the original principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at the Company’s option, (a) adjusted LIBOR plus 2.25% (with a LIBOR floor of 0.75%) or (b) ABR plus 1.25% (with an ABR floor of 1.75%).
(4)The Term Loan A provides for quarterly amortization payments, based on a percentage of the original principal amount of the Term Loan A, as follows: 0.625% per quarter from June 30, 2018 to March 31, 2020; 1.25% per quarter from June 30, 2020 to March 31, 2021; 1.875% per quarter from June 30, 2021 to March 31, 2022; and 2.50% per quarter for periods ending on or after June 30, 2022, with the balance of the Term Loan A due at maturity on February 8, 2023. The interest rates with respect to the Term Loan A are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each

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case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter's senior secured leverage ratio, the LIBOR margin was 2.25% and the ABR margin was 1.25% for the three months ended June 30, 2020.
Maturities Table
As of June 30, 2020, the combined aggregate amount of maturities for long-term borrowings for the remainder of 2020 and each of the next four years is as follows:
YearAmount
Remaining 2020 (a)$839  
202162  
202281  
2023981  
202411  
_______________
(a)Remaining 2020 includes amortization payments totaling $19 million and $5 million for the Term Loan A and Term Loan B facilities, respectively, as well as $815 million of revolver borrowings under the Revolving Credit Facility which expires in February 2023 but is classified on the balance sheet as current due to the revolving nature and terms and conditions of the facility. The current portion of long-term debt of $868 million shown on the condensed consolidated balance sheet consists of four quarters of amortization payments totaling $42 million and $11 million for the Term Loan A and Term Loan B facilities, respectively, and $815 million of revolver borrowings under the Revolving Credit Facility.
Senior Secured Credit Agreement and Term Loan A Agreement
The Company’s Amended and Restated Credit Agreement dated as of March 5, 2013, as amended, amended and restated, modified or supplemented from time to time (the “Senior Secured Credit Agreement”) governs the Company's senior secured credit facility (the “Senior Secured Credit Facility”, which includes the “Revolving Credit Facility” and the “Term Loan B”) and the Term Loan A Agreement dated as of October 23, 2015, as amended from time to time (the “Term Loan A Agreement”) governs the senior secured term loan A credit facility (the “Term Loan A Facility”).
Senior Secured Credit Facility
The Senior Secured Credit Facility includes:
(a)the Term Loan B issued in the original aggregate principal amount of $1,080 million with a maturity date of February 2025. The Term Loan B has quarterly amortization payments totaling 1% per annum of the initial aggregate principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at Realogy Group's option, adjusted LIBOR plus 2.25% (with a LIBOR floor of 0.75%) or ABR plus 1.25% (with an ABR floor of 1.75%); and
(b)a $1,425 million Revolving Credit Facility with a maturity date of February 2023, which includes a $125 million letter of credit subfacility. The interest rate with respect to revolving loans under the Revolving Credit Facility is based on, at Realogy Group's option, adjusted LIBOR or ABR plus an additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:
Senior Secured Leverage RatioApplicable LIBOR MarginApplicable ABR Margin
Greater than 3.50 to 1.002.50%1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.002.25%1.25%
Less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.002.00%1.00%
Less than 2.00 to 1.001.75%0.75%
The obligations under the Senior Secured Credit Agreement are secured to the extent legally permissible by substantially all of the assets of Realogy Group, Realogy Intermediate and all of their domestic subsidiaries, other than certain excluded subsidiaries.
Realogy Group’s Senior Secured Credit Agreement contains financial, affirmative and negative covenants and requires Realogy Group to maintain (so long as the Revolving Credit Facility is outstanding) a senior secured leverage ratio. As of June 30, 2020, Realogy Group was required to maintain a senior secured leverage ratio not to exceed 4.75 to 1.00. The leverage ratio is tested quarterly regardless of the amount of borrowings outstanding and letters of credit issued under the

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Revolving Credit Facility at the testing date. Total senior secured net debt does not include the securitization obligations, 7.625% Senior Secured Second Lien Notes, or our unsecured indebtedness, including the Unsecured Notes. At June 30, 2020, Realogy Group was in compliance with the senior secured leverage ratio covenant with a senior secured leverage ratio of 3.29 to 1.00 at June 30, 2020. For the calculation of the senior secured leverage ratio for the second quarter of 2020, see Part I., Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Senior Secured Leverage Ratio applicable to our Senior Secured Credit Facility and Term Loan A Facility.

On July 24, 2020, Realogy Group entered into amendments to the Senior Secured Credit Agreement and Term Loan A Agreement (referred to collectively herein as the “Amendments”), pursuant to which the senior secured leverage ratio has been eased and certain other covenants have been tightened. For additional information see Note 11, "Subsequent Events", to the Condensed Consolidated Financial Statements.
Term Loan A Facility
The Term Loan A of $750 million due February 2023 provides for quarterly amortization based on a percentage of the original principal amount of the Term Loan A, as follows: 0.625% per quarter from June 30, 2018 to March 31, 2020; 1.25% per quarter from June 30, 2020 to March 31, 2021; 1.875% per quarter from June 30, 2021 to March 31, 2022; and 2.50% per quarter for periods ending on or after June 30, 2022, with the balance of the Term Loan A due at maturity on February 8, 2023. The interest rates with respect to the Term Loan A are based on, at the Company's option, adjusted LIBOR or ABR plus an additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:
Senior Secured Leverage RatioApplicable LIBOR MarginApplicable ABR Margin
Greater than 3.50 to 1.002.50%1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.002.25%1.25%
Less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.002.00%1.00%
Less than 2.00 to 1.001.75%0.75%
The Term Loan A Agreement contains covenants that are substantially similar to those in the Senior Secured Credit Agreement. The Amendment to the Term Loan A Agreement, effective July 24, 2020, contains provisions substantially similar to those contained in the Amendment to the Senior Secured Credit Agreement. For additional information see Note 11, "Subsequent Events", to the Condensed Consolidated Financial Statements.
Senior Secured Second Lien Notes
In June 2020, Realogy Group issued $550 million 7.625% Senior Secured Second Lien Notes. The 7.625% Senior Secured Second Lien Notes mature on June 15, 2025 and interest is payable semiannually on June 15 and December 15 of each year, commencing December 15, 2020.
The 7.625% Senior Secured Second Lien Notes are guaranteed on a senior secured second priority basis by Realogy Intermediate and each domestic subsidiary of Realogy Group, other than certain excluded entities, that is a guarantor under its Senior Secured Credit Facility and Term Loan A Facility and certain of its outstanding debt securities. The 7.625% Senior Secured Second Lien Notes are also guaranteed by Realogy Holdings on an unsecured senior subordinated basis. The 7.625% Senior Secured Second Lien Notes are secured by substantially the same collateral as Realogy Group's existing first lien obligations under its Senior Secured Credit Facility and Term Loan A Facility on a second priority basis.
The indentures governing the 7.625% Senior Secured Second Lien Notes contain various covenants that limit the ability of Realogy Intermediate, Realogy Group and Realogy Group’s restricted subsidiaries to take certain actions, which covenants are subject to a number of important exceptions and qualifications. These covenants are substantially similar to the covenants in the indenture governing the 9.375% Senior Notes due 2027, as described under Unsecured Notes below.
Unsecured Notes
In June 2020, the Company used the entire net proceeds from the $550 million 7.625% Senior Secured Second Lien Notes, together with cash on hand, to fund the redemption of all of the outstanding 5.25% Senior Notes due 2021, and to pay related interest, premium, fees, and expenses.
The 4.875% Senior Notes and the 9.375% Senior Notes (collectively the "Unsecured Notes") are unsecured senior obligations of Realogy Group that mature on June 1, 2023 and April 1, 2027, respectively. Interest on the Unsecured Notes

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is payable each year semiannually on June 1 and December 1 for the 4.875% Senior Notes, and on April 1 and October 1 for the 9.375% Senior Notes.
The Unsecured Notes are guaranteed on an unsecured senior basis by each domestic subsidiary of Realogy Group that is a guarantor under the Senior Secured Credit Facility, Term Loan A Facility and Realogy Group's outstanding debt securities and are guaranteed by Realogy Holdings on an unsecured senior subordinated basis.
The indentures governing the Unsecured Notes contain various negative covenants that limit Realogy Group's and its restricted subsidiaries’ ability to take certain actions, which covenants are subject to a number of important exceptions and qualifications. These covenants include limitations on Realogy Group's and its restricted subsidiaries’ ability to (a) incur or guarantee additional indebtedness, or issue disqualified stock or preferred stock, (b) pay dividends or make distributions to their stockholders, (c) repurchase or redeem capital stock, (d) make investments or acquisitions, (e) incur restrictions on the ability of certain of their subsidiaries to pay dividends or to make other payments to Realogy Group, (f) enter into transactions with affiliates, (g) create liens, (h) merge or consolidate with other companies or transfer all or substantially all of their assets, (i) transfer or sell assets, including capital stock of subsidiaries and (j) prepay, redeem or repurchase debt that is subordinated in right of payment to the Unsecured Notes.
The covenants in the indenture governing the 9.375% Senior Notes are substantially similar to the covenants in the indentures governing the other Unsecured Notes, with certain exceptions, including several changes relating to Realogy Group’s ability to make restricted payments, and in particular, its ability to repurchase shares and pay dividends. Specifically, (a) the cumulative credit basket for restricted payments (i) was reset to 0 and builds from January 1, 2019, (ii) builds at 25% of Consolidated Net Income (as defined in the indenture governing the 9.375% Senior Notes) when the consolidated leverage ratio (as defined below) is equal to or greater than 4.0 to 1.0 (and 50% of Consolidated Net Income when it is less than 4.0 to 1.0) and, consistent with the indentures governing the other Unsecured Notes, is reduced by 100% of the deficit when Consolidated Net Income is a deficit and (iii) may not be used when the consolidated leverage ratio is equal to or greater than 4.0 to 1.0; (b) the $100 million general restricted payment basket may be used only for Restricted Investments (as defined in the indenture governing the 9.375% Senior Notes); (c) the indenture governing the 9.375% Senior Notes requires the consolidated leverage ratio to be less than 3.0 to 1.0 to use the unlimited general restricted payment basket (which payments will reduce the cumulative credit basket, but not below zero); and (d) the indenture governing the 9.375% Senior Notes contains a new restricted payment basket that may be used for up to $45 million of dividends per calendar year.
The consolidated leverage ratio is measured by dividing Realogy Group's total net debt by the trailing four quarters EBITDA. EBITDA, as defined in the indenture governing the 9.375% Senior Notes, is substantially similar to EBITDA calculated on a Pro Forma Basis, as those terms are defined in the Senior Secured Credit Agreement. Net debt under the indenture is Realogy Group's total indebtedness less (i) its cash and cash equivalents in excess of restricted cash and (ii) a $200 million seasonality adjustment permitted when measuring the ratio on a date during the period of March 1 to May 31.
Loss on the Early Extinguishment of Debt
During the six months ended June 30, 2020, the Company recorded a loss on the early extinguishment of debt of $8 million as a result of the issuance of $550 million of 7.625% Senior Secured Second Lien Notes due 2025 and the redemption of $550 million of 5.25% Senior Notes due 2021 in June 2020.
As a result of the refinancing transaction in January of 2017 and reduction of the Unsecured Letter of Credit Facility in September of 2017,February 2019, the Company recorded lossesa loss on the early extinguishment of debt of $5 million during the ninesix months ended SeptemberJune 30, 2017.2019.


6. RESTRUCTURING COSTS
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6.RESTRUCTURING COSTS
Restructuring charges were $2$14 million and $9$25 million for the three and ninesix months ended SeptemberJune 30, 2017,2020, respectively, and $9 million and $30$18 million for the three and ninesix months ended SeptemberJune 30, 2016,2019, respectively. The components of the restructuring charges for the three and ninesix months ended SeptemberJune 30, 20172020 and 20162019 were as follows:
 Three Months Ended June 30,Six Months Ended June 30,
2020 201920202019
Personnel-related costs (1)$4  $5  $7  $13  
Facility-related costs (2)10  4  18  5  
Total restructuring charges (3)$14  $9  $25  $18  

24
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Personnel-related costs (1)$1
 $6
 $7
 $17
Facility-related costs (2)—
 2
 1
 7
Accelerated depreciation on asset disposals—
 1
 —
 1
Other restructuring costs (3)1
 —
 1
 5
Total restructuring charges$2
 $9
 $9
 $30
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_______________
(1)Personnel-related costs consist of severance costs provided to employees who have been terminated and duplicate payroll costs during transition.
(2)Facility-related costs consist of costs associated with planned facility closures such as contract termination costs, lease payments that will continue to be incurred under the contract for its remaining term without economic benefit to the Company and other facility and employee relocation related costs.
(3)Other restructuring costs consist of costs related to professional fees, consulting fees and other costs associated with restructuring activities which are primarily included in the Corporate and Other business segment.
Business Optimization Initiative(1)Personnel-related costs consist of severance costs provided to employees who have been terminated and duplicate payroll costs during transition.
During(2)Facility-related costs consist of costs associated with planned facility closures such as contract termination costs, amortization of lease assets that will continue to be incurred under the contract for its remaining term without economic benefit to the Company, accelerated depreciation on asset disposals and other facility and employee relocation related costs.
(3)Restructuring charges for the three and six months ended June 30, 2020 include $12 million and $23 million, respectively, related to the Facility and Operational Efficiencies Program and $2 million related to the Leadership Realignment and Other Restructuring Activities Program. Restructuring charges for the three and six months ended June 30, 2019 include $9 million and $15 million, respectively, related to the Facility and Operational Efficiencies Program and 0 and $3 million, respectively, related to the Leadership Realignment and Other Restructuring Activities Program.
Facility and Operational Efficiencies Program
Beginning in the first quarter of 2019, the Company commenced the implementation of a plan to accelerate its office consolidation to reduce storefront costs, as well as institute other operational efficiencies to drive profitability. In addition, the Company commenced a plan to transform and centralize certain aspects of the operational support and drive changes in how it serves its affiliated independent sales agents from a marketing and technology perspective to help such agents be more productive and enable them to make their businesses more profitable. In the third quarter of 2019, the Company reduced headcount in connection with the wind-down of a former affinity program. In the fourth quarter of 2015,2019, the Company began a businessexpanded its operational efficiencies program to focus on workforce optimization. This workforce optimization initiative thatis focused on maximizingconsolidating similar or overlapping roles, reducing the efficiencynumber of hierarchical layers and effectivenessstreamlining work and decision making. Furthermore, at the end of 2019, the cost structure of each of the Company's business units.  The action was designedCompany expanded these strategic initiatives which are expected to improve client service levels across each of the business units while enhancing the Company's profitabilityresult in additional operational and incremental margins. The plan focused on several key areas of opportunity which include process improvementfacility related efficiencies office footprint optimization, leveraging technology and media spend, centralized procurement, outsourcing administrative services and organizational design. The expected costs of activities undertaken in connection with the restructuring plan are largely complete.2020.
The following is a reconciliation of the beginning and ending restructuring reserve balances related to the Facility and Operational Efficiencies Program:
Personnel-related costsFacility-related costsTotal
Balance at December 31, 2019$6  $5  $11  
Restructuring charges (1)7  16  23  
Costs paid or otherwise settled(10) (12) (22) 
Balance at June 30, 2020$3  $9  $12  
_______________
(1)In addition, the Company incurred an additional $11 million of facility-related costs for lease asset impairments in connection with the Business Optimization Initiative:
 Personnel-related costs Facility-related costs Accelerated depreciation on asset disposal Other restructuring costs Total
Balance at December 31, 2016$9
 $7
 $—
 $—
 $16
Restructuring charges7
 1
 —
 1
 9
Costs paid or otherwise settled(12) (5) —
 (1) (18)
Balance at September 30, 2017$4
 $3
 $—
 $—
 $7
Facility and Operational Efficiencies Program during the six months ended June 30, 2020.
The following table shows the total restructuring costs currently expected to be incurred by type of cost forrelated to the Business Optimization Initiative:Facility and Operational Efficiencies Program:
Total amount expected to be incurred Amount incurred
to date		 Total amount remaining to be incurred
Personnel-related costs$30  $28  $2  
Facility-related costs (1)50  32  18  
Other restructuring costs1  1  —  
Total$81  $61  $20  
_______________
(1)Facility-related costs includes lease asset impairments expected to be incurred under the Facility and Operational Efficiencies Program.

 Total amount expected to be incurred Amount incurred to date Total amount remaining to be incurred
Personnel-related costs$32
 $32
 $—
Facility-related costs16
 14
 2
Accelerated depreciation related to asset disposals2
 1
 1
Other restructuring costs12
 11
 1
Total$62
 $58
 $4
25


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The following table shows the total restructuring costs currently expected to be incurred by reportable segment related to the Facility and Operational Efficiencies Program:
Total amount expected to be incurred Amount incurred
to date		 Total amount remaining to be incurred
Realogy Franchise Group$5  $5  $—  
Realogy Brokerage Group62  44  18  
Realogy Title Group5  5  —  
Corporate and Other9   7  2  
Total$81  $61  $20  
Leadership Realignment and Other Restructuring Activities
Beginning in the first quarter of 2018, the Company commenced the implementation of a plan to drive its business forward and enhance stockholder value. The key aspects of this plan included senior leadership realignment, an enhanced focus on technology and talent, as well as further attention to office footprint and other operational efficiencies. The activities undertaken in connection with the restructuring plan are complete. At December 31, 2019, the remaining liability was $5 million. During the six months ended June 30, 2020, the Company incurred facility-related costs of $2 million and paid or settled costs of $4 million resulting in a remaining accrual of $3 million.
7. EQUITY
Condensed Consolidated Statement of Changes in Equity for the Business Optimization Initiative:Realogy Holdings
Three Months Ended June 30, 2020
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossNon- controlling InterestsTotal Equity
SharesAmount
Balance at March 31, 2020115.3  $1  $4,844  $(3,157) $(57) $3  $1,634  
Net (loss) income—  —  —  (14) —  1  (13) 
Other comprehensive income—  —  —  —  1  —  1  
Stock-based compensation—  —  4  —  —  —  4  
Issuance of shares for vesting of equity awards0.1  —  —  —  —  —  —  
Shares withheld for taxes on equity awards—  —  (1) —  —  —  (1) 
Balance at June 30, 2020115.4  $1  $4,847  $(3,171) $(56) $4  $1,625  
Three Months Ended June 30, 2019
Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossNon- controlling InterestsTotal Equity
SharesAmount
Balance at March 31, 2019114.2  $1  $4,841  $(2,606) $(50) $3  $2,189  
Net Income—  —  —  69  —  1  70  
Other comprehensive loss—  —  —  —  (1) —  (1) 
Stock-based compensation—  —  7  —  —  —  7  
Issuance of shares for vesting of equity awards0.1  —  —  —  —  —  —  
Dividends declared ($0.09 per share)—  —  (11) —  —  (1) (12) 
Balance at June 30, 2019114.3  $1  $4,837  $(2,537) $(51) $3  $2,253  
 Six Months Ended June 30, 2020
 Common StockAdditional
Paid-In
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Non-
controlling
Interests		Total
Equity
SharesAmount
Balance at December 31, 2019114.4  $1  $4,842  $(2,695) $(56) $4  $2,096  
Net (loss) income—  —  —  (476) —  1  (475) 
Stock-based compensation—  —  10  —  —  —  10  
Issuance of shares for vesting of equity awards1.5  —  —  —  —  —  —  
Shares withheld for taxes on equity awards(0.5) —  (5) —  —  —  (5) 
Dividends—  —  —  —  —  (1) (1) 
Balance at June 30, 2020115.4  $1  $4,847  $(3,171) $(56) $4  $1,625  

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 Total amount expected to be incurred Amount incurred to date Total amount remaining to be incurred
Real Estate Franchise Services$5
 $5
 $—
Company Owned Real Estate Brokerage Services37
 35
 2
Relocation Services5
 5
 —
Title and Settlement Services1
 1
 —
Corporate and Other14
 12
 2
Total$62
 $58
 $4
 Six Months Ended June 30, 2019
 Common StockAdditional
Paid-In
Capital		Accumulated
Deficit		Accumulated
Other
Comprehensive
Loss		Non-
controlling
Interests		Total
Equity
SharesAmount
Balance at December 31, 2018114.6  $1  $4,869  $(2,507) $(52) $4  $2,315  
Net (loss) income—  —  —  (30) —  1  (29) 
Other comprehensive income—  —  —  —  1  —  1  
Repurchase of common stock(1.2) —  (20) —  —  —  (20) 
Stock-based compensation—  —  15  —  —  —  15  
Issuance of shares for vesting of equity awards1.3  —  —  —  —  —  —  
Shares withheld for taxes on equity awards(0.4) —  (6) —  —  —  (6) 
Dividends declared ($0.18 per share)—  —  (21) —  —  (2) (23) 
Balance at June 30, 2019114.3  $1  $4,837  $(2,537) $(51) $3  $2,253  
Condensed Consolidated Statement of Changes in Equity for Realogy Group
7.STOCK-BASED COMPENSATION
The Company has stock-based compensation plans (the 2007 Stock Incentive Plannot included a statement of changes in equity for Realogy Group as the operating results of Group are consistent with the operating results of Realogy Holdings as all revenue and expenses of Realogy Group flow up to Realogy Holdings and there are no incremental activities at the 2012 Long-Term Incentive Plan) under which incentive equity awards such as non-qualified stock options, rights to purchase sharesRealogy Holdings level. The only difference between Realogy Group and Realogy Holdings is that the $1 million in par value of common stock restrictedin Realogy Holdings' equity is included in additional paid-in capital in Realogy Group's equity.
Stock Repurchases
Shares of Company common stock restrictedthat have been repurchased pursuant to prior authorizations from the Company's Board of Directors have been retired and are not displayed separately as treasury stock units ("RSUs"), performance restrictedon the consolidated financial statements. The par value of the shares repurchased and retired is deducted from common stock units and performance share units ("PSUs") may be issuedthe excess of the purchase price over par value is first charged against any available additional paid-in capital with the balance charged to employees, consultants and directorsretained earnings. Direct costs incurred to repurchase the shares are included in the total cost of Realogy. the shares.
The Company's stockholders approved the AmendedBoard of Directors authorized a share repurchase program of up to $275 million, $300 million, $350 million and Restated 2012 Long-Term Incentive Plan at the 2016 Annual Meeting of Stockholders held on May 4, 2016 (the "Amended and Restated 2012 LTIP"). The Amended and Restated 2012 LTIP increases the number of shares authorized for issuance under that plan by 9.8$175 million shares. The total number of shares authorized for issuance under the plans is 19.4 million shares.
Awards granted under the Amended and Restated 2012 LTIP utilizing the additional 9.8 million share reserve, except options and stock appreciation rights, must be counted against the foregoing share limit on a 2.22 share to one basis for each share actually granted in connection with such award. As of September 30, 2017, the total number of shares available for future grants under the Amended and Restated 2012 LTIP was approximately 3 million shares. The Company does not expect to issue any additional awards under the 2007 Stock Incentive Plan.
Consistent with the 2016 long-term incentive equity awards, the 2017 awards include a mix of PSUs, RSUs (performance restricted stock units for the CEO and direct reports) and options. The 2017 PSUs are incentives that reward grantees based upon the Company's financial performance over a three-year performance period ending December 31, 2019. There are two PSU awards: one is based upon the total stockholder return of Realogy's common stock relative to the total stockholder return of the SPDR S&P Homebuilders Index ("XHB") (the "RTSR award"), and the other is based upon the achievement of cumulative free cash flow goals. The number of shares that may be issued under the PSU is variable and based upon the extent to which the performance goals are achieved over the performance period (with a range of payout from 0% to 175% of target for the RTSR award and 0% to 200% of target for the achievement of cumulative free cash flow award). The shares earned will be distributed in early 2020. The RSUs vest over three years, with 33.33% vesting on each anniversary of the grant date. Time-vesting of the 2017 performance RSUs for the CEO and direct reports is subject to achievement of a minimum EBITDA performance goal for 2017. The stock options have a maximum term of ten years and vest over four years, with 25% vesting on each anniversary date of the grant date. The options have an exercise price equal to the closing sale price of the Company's common stock on the date of grant.in February 2016, 2017, 2018 and 2019, respectively.
In August 2016, the Company’sfirst quarter of 2019, the Company repurchased and retired 1.2 million shares of common stock for $20 million at a weighted average market price of $17.21 per share. The Company has not repurchased any shares under the share repurchase programs since 2019, and in May 2020, the Company's Board of Directors approvedterminated its outstanding share repurchase programs.
During the initiation of a quarterly cash dividend policy on its common stock. The Board declared a cash dividend of $0.09 per share ofcovenant period (as defined in Note 11, "Subsequent Events", to the Company’s common stock per quarter. When payment of cash dividends occurs,Condensed Consolidated Financial Statements) under the Amendments to the Senior Secured Credit Agreement and Term Loan A Agreement, the Company issues dividend equivalent units ("DEUs") to eligible holders of


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outstanding RSUsis restricted from repurchasing shares. In addition, the restrictive covenants in the indentures governing the 9.375% Senior Notes and PSUs. The number of DEUs granted for each RSU or PSU is calculated by dividing the amount of the cash dividend on the number of shares covered by the RSU or PSU at the time of the related dividend record date by the closing price of7.625% Senior Secured Second Lien Notes further restrict the Company's ability to repurchase shares. See Note 5. "Short and Long-Term Debt—Unsecured Notes", to the Condensed Consolidated Financial Statements for additional information.
Stock-Based Compensation
During the first quarter of 2020, the Company granted restricted stock onunits related to 0.7 million shares with a weighted average grant date fair value of $9.70 and performance stock units related to 0.9 million shares with a weighted average grant date fair value of $9.23. The Company granted all time-based equity awards in the related dividend payment date. The DEUsform of restricted stock units which are subject to ratable vesting over a three-year period. Therefore, the sameCompany did not grant shares of non-qualified stock options during the first quarter of 2020.

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Cash-Based Compensation
During the first quarter of 2020, instead of issuing stock based compensation to certain employees, the Company issued $18 million of time-vested cash awards which vest annually over a three-year vesting requirements, settlement provisions, and other terms and conditions asperiod, $6 million of cash-settled long-term performance awards which are tied to cumulative free cash flow goals that will vest at the original award to which they relate. The issuance of DEUs have an immaterial impact on the Company's stock-based compensation activity.
The fair value of RSUs and PSUs without a market condition is equal to the closing sale priceend of the Company's common stockthree-year performance cycle based on the date of grant. The fair valueachievement of the RTSR PSU award was estimated on the dateperformance metric and $3 million of grant using the Monte Carlo Simulation method utilizing the following assumptions. Expected volatility was based on historical volatilities of the Company and select comparable companies.
 2017 RTSR PSU
Weighted average grant date fair value$27.98
Weighted average expected volatility29.0%
Weighted average volatility of XHB18.4%
Weighted average correlation coefficient0.53
Weighted average risk-free interest rate1.5%
Weighted average dividend yield—
A summary of RSU activity for the nine months ended September 30, 2017 is presented below (number of shares in millions):
 Restricted
Stock Units		 Weighted Average Grant Date Fair Value
Unvested at January 1, 20171.4
 $37.53
Granted1.1
 28.22
Vested (a)(0.6) 39.56
Forfeited(0.1) 30.82
Unvested at September 30, 20171.8
 $31.34
______________
(a)The total fair value of RSUs which vested during the nine months ended September 30, 2017 was $26 million.
A summary of PSU activity for the nine months ended September 30, 2017 is presented below (number of shares in millions):
 Performance Share Units (a) Weighted Average Grant Date Fair Value
Unvested at January 1, 20171.0
 $36.66
Granted0.7
 27.70
Vested—
 —
Forfeited—
 —
Unvested at September 30, 20171.7
 $32.71
______________
(a)The PSU amounts in the table are shown at the target amount of the award.


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The fair value of the options was estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility was based on historical volatilities of the Company and select comparable companies. The expected term of the options granted represents the period of time that options are expected to be outstanding and iscash-settled awards based on the simplified method. The risk-free interest rate was based on the U.S. Treasury yield curvechange in effectRealogy stock price that will vest at the timeend of the grant, which corresponds to the expected term of the options.three-year performance cycle.
 2017 Options
Weighted average grant date fair value$8.00
Weighted average expected volatility30.7%
Weighted average expected term (years)6.25
Weighted average risk-free interest rate2.1%
Weighted average dividend yield1.3%
A summary of stock option unit activity for the nine months ended September 30, 2017 is presented below (number of shares in millions):
 Options 
Weighted Average
Exercise Price
Outstanding at January 1, 20173.3
 $31.69
Granted0.4
 27.56
Exercised (a) (b)(0.3) 23.77
Forfeited/Expired—
 —
Outstanding at September 30, 2017 (c)3.4
 $31.52
______________
(a)The intrinsic value of options exercised during the nine months ended September 30, 2017 was $2 million.
(b)Cash received from options exercised during the nine months ended September 30, 2017 was $7 million.
(c)Options outstanding at September 30, 2017 have an intrinsic value of $6 million and have a weighted average remaining contractual life of 5.8 years.
Stock-Based Compensation Expense
As of September 30, 2017, based on current performance achievement expectations, there was $45 million of unrecognized compensation cost related to incentive equity awards under the plans which will be recorded in future periods as compensation expense over a remaining weighted average period of approximately 1.2 years. The Company recorded stock-based compensation expense related to the incentive equity awards of $12 million and $38 million for the three and nine months ended September 30, 2017, respectively, and $14 million and $39 million for the three and nine months ended September 30, 2016, respectively.
8. EARNINGS (LOSS) PER SHARE
Earnings (loss) per share attributable to Realogy Holdings
Basic earnings (loss) per share is computed based on net income (loss) attributable to Realogy Holdings stockholders divided by the basic weighted-average shares outstanding during the period. Dilutive earnings per share is computed consistently with the basic computation while giving effect to all dilutive potential common shares and common share equivalents that were outstanding during the period. Realogy Holdings uses the treasury stock method to reflect the potential dilutive effect of unvested stock awards and unexercised options.The following table sets forth the computation of basic and diluted earnings (loss) per share:
Three Months Ended
June 30,		Six Months Ended
June 30,
(in millions, except per share data)2020201920202019
Numerator:
Numerator for earnings (loss) per share—continuing operations
Net income (loss) from continuing operations$28  $69  $(407) $(16) 
Less: Net income attributable to noncontrolling interests(1) (1) (1) (1) 
Net income (loss) from continuing operations attributable to Realogy Holdings$27  $68  $(408) $(17) 
Numerator for earnings (loss) per share—discontinued operations
Net (loss) income from discontinued operations$(41) $1  $(68) $(13) 
Net (loss) income attributable to Realogy Holdings shareholders$(14) $69  $(476) $(30) 
Denominator:
Weighted average common shares outstanding (denominator for basic (loss) earnings per share calculation)115.4  114.3  115.0  114.1  
Dilutive effect of stock-based compensation (a)(b)0.8  0.6  —  —  
Weighted average common shares outstanding (denominator for diluted (loss) earnings per share calculation)116.2  114.9  115.0  114.1  
Basic (loss) earnings per share attributable to Realogy Holdings shareholders:
Basic earnings (loss) per share from continuing operations$0.23  $0.59  $(3.55) $(0.15) 
Basic (loss) earnings per share from discontinued operations(0.35) 0.01  (0.59) (0.11) 
Basic (loss) earnings per share$(0.12) $0.60  $(4.14) $(0.26) 
Diluted (loss) earnings per share attributable to Realogy Holdings shareholders:
Diluted earnings (loss) per share from continuing operations$0.23  $0.59  $(3.55) $(0.15) 
Diluted (loss) earnings per share from discontinued operations(0.35) 0.01  (0.59) (0.11) 
Diluted (loss) earnings per share$(0.12) $0.60  $(4.14) $(0.26) 
 Three Months Ended September 30, Nine Months Ended September 30,
(in millions, except per share data)2017 2016 2017 2016
Net income attributable to Realogy Holdings shareholders$95
 $106
 $176
 $156
Basic weighted average shares136.1
 144.0
 137.8
 145.4
Stock options, restricted stock units and performance share units (a)2.0
 1.1
 1.6
 1.2
Weighted average diluted shares138.1
 145.1
 139.4
 146.6
Earnings Per Share:       
Basic$0.70
 $0.74
 $1.28
 $1.07
Diluted$0.69
 $0.73
 $1.26
 $1.06
_______________
_______________
(a)The three and nine months ended September 30, 2017 respectively exclude 4.9 million and 5.3 million shares of common stock issuable for incentive equity awards, which includes performance share units based on the achievement of target amounts, that are anti-dilutive to the diluted earnings per share computation. The three and nine months ended September 30, 2016 respectively exclude 5.2 million and 5.1 million shares of common stock issuable for incentive equity awards, which includes performance share units based on the achievement of target amounts, that are anti-dilutive to the diluted earnings per share computation.
In the third quarter of 2017, the Company repurchased(a)The three months ended June 30, 2020 and retired 1.82019 exclude 9.0 million and 10.4 million shares, respectively, of common stock issuable for $58 million at a weighted average market priceincentive equity awards, which includes performance share units based on the achievement of $33.83 per share. Fortarget amounts, that are anti-dilutive to the nine months ended September 30, 2017, the Company repurchased and retired 5.9 million shares of common stock for $178 million at a weighted average market price of $30.40 per share. The shares repurchased include 77,900 shares for which the trade date occurred in late September 2017 while settlement occurred in October 2017. The purchase of shares under this plan reduces the weighted-average number of shares outstanding in the basicdiluted earnings per share calculation.computation.
(b)The Company had a net loss from continuing operations for the six months ended June 30, 2020 and 2019 and therefore the impact of incentive equity awards were excluded from the computation of dilutive loss per share as the inclusion of such amounts would be anti-dilutive.

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9.COMMITMENTS AND CONTINGENCIES
9. COMMITMENTS AND CONTINGENCIES
Litigation
The Company is involved in claims, legal proceedings, alternative dispute resolution and governmental inquiries related to alleged contract disputes, business practices, intellectual property and other commercial, employment, regulatory and tax matters. Examples of such matters include but are not limited to allegations:
•that the Company is vicariously liable for the acts of franchisees under theories of actual or apparent agency;
by current or former franchisees that franchise agreements were breached including improper terminations;
concerning claims for alleged RESPA or state real estate law violations including but not limited to claims challenging the validity of sales associates indemnification, and administrative fees;
thatindependent residential real estate sales associatesagents engaged by NRT—Realogy Brokerage Group or by affiliated franchisees—under certain state or federal laws—are potentially employees instead of independent contractors, and they or regulators therefore may bring claims against NRTRealogy Brokerage Group for breach of contract, wage and hour classification claims, wrongful discharge, unemployment and workers' compensation and could seek benefits, back wages, overtime, indemnification, penalties related to classification practices and expense reimbursement available to employees;employees or similar claims against Realogy Franchise Group as an alleged joint employer of an affiliated franchisee’s independent sales agents;
•concerning other employment law matters, including other types of worker classification claims as well as wage and hour claims and retaliation claims;
•concerning anti-trust and anti-competition matters;
•that the Company is vicariously liable for the acts of franchisees under theories of actual or apparent agency;
•by current or former franchisees that franchise agreements were breached including improper terminations;
•concerning alleged RESPA or state real estate law violations;
•concerning claims related to the Telephone Consumer Protection Act, including autodialer claims;
•concerning claims generally against the company owned brokerage operations for negligence, misrepresentation or breach of fiduciary duty in connection with the performance of real estate brokerage or other professional services as well as other brokerage claims associated with listing information and property history;
•related to copyright law, including infringement actions alleging improper use of copyrighted photographs on websites or in marketing materials without consent of the copyright holder;
•concerning breach of obligations to make websites and other services accessible for consumers with disabilities;
•concerning claims generally against the title companyagent contending that as the escrow company, the companyagent knew or should have known that a transaction was fraudulent or concerning otherthat the agent was negligent in addressing title defects or settlement errors; andconducting the settlement;


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•concerning information security and cyber crime.cyber-crime, including claims under new and emerging data privacy laws related to the protection of customer, employee or third-party information, as well as those related to the diversion of homesale transaction closing funds; and
•those related to general fraud claims.
Worker Classification Litigation
Whitlach v. Premier Valley, Inc. d/b/a Century 21 M&M and Century 21 Real Estate LLC (Superior Court of California, Stanislaus County). This was filed as a putative class action complaint on December 20, 2018 by plaintiff James Whitlach against Premier Valley Inc., a Century 21 Real Estate independently-owned franchisee doing business as Century 21 M&M (“Century 21 M&M”). The complaint also names Century 21 Real Estate LLC, a wholly-owned subsidiary of the Company and the franchisor of Century 21 Real Estate (“Century 21”), as an alleged joint employer of the franchisee’s independent sales agents and seeks to certify a class that could potentially include all agents of both Century 21 M&M and Century 21 in California. The plaintiff alleges that Century 21 M&M misclassified all of its independent real estate agents, salespeople, sales professionals, broker associates and other similar positions as independent contractors, failed to pay minimum wages, failed to provide meal and rest breaks, failed to pay timely wages, failed to keep proper records, failed to provide appropriate wage statements, made unlawful deductions from wages, and failed to reimburse plaintiff and the putative class for business related expenses, resulting in violations of the California Labor Code. The complaint also asserts an unfair business practice claim based on the alleged violations described above.
On February 15, 2019, the plaintiff amended his complaint to assert claims pursuant to the California Private Attorneys General Act (“PAGA”). The PAGA claims included in the amended complaint are substantively similar to those asserted in the original complaint. Under California law, PAGA claims are generally not subject to arbitration and may result in exposure in the form of additional penalties. In April 2019, the defendants filed motions to compel arbitration of the non-PAGA claims and to stay the PAGA claims pending resolution of the arbitrable claims. On June 5, 2019, the Court

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dismissed the plaintiff’s non-PAGA claims without prejudice and withdrew the defendants’ motion to compel arbitration by stipulation of the parties. The plaintiff continues to pursue his PAGA claims as a representative of purported "aggrieved employees" as defined by PAGA. The plaintiff currently seeks, as the representative of all purported aggrieved employees, all non-individualized relief available to the purported aggrieved employees under PAGA, as well as attorneys’ fees. In November 2019, Century 21 M&M filed a demurrer to the complaint, seeking to dismiss the remaining claim in the action, to which Century 21 filed a joinder. The demurrer was granted by the Court in June 2020, however, the Court permitted the plaintiff to replead the complaint. The amended complaint, filed in June 2020 by the plaintiff, asserts one cause of action for alleged civil penalties under PAGA. Century 21 M&M filed its demurrer to the amended complaint, to which Century 21 filed a joinder (and, in the alternative, a motion to strike certain portions of the amended complaint), on August 3, 2020. This case raises various previously unlitigated claims and the PAGA claim adds additional litigation, financial and operating uncertainties.
Real Estate BusinessIndustry Litigation
Dodge, et al.Moehrl, Cole, Darnell, Nager, Ramey, Sawbill Strategic, Inc., Umpa and Ruh v. PHH Corporation, et al.The National Association of Realtors, Realogy Holdings Corp., formerly captioned Strader, et al.Homeservices of America, Inc., BHH Affiliates, LLC, The Long & Foster Companies, Inc., RE/MAX LLC, and HallKeller Williams Realty, Inc. (U.S. District Court for the Northern District of Illinois). This amended putative class action complaint (the "amended Moehrl complaint"), filed on June 14, 2019, (i) consolidates the Moehrl and Sawbill litigation reported in our Form 10-Q for the period ended March 31, 2019, (ii) adds certain plaintiffs and defendants, and (iii) serves as a response to the separate motions to dismiss filed on May 17, 2019 in the prior Moehrl litigation by each of NAR and the Company (along with the other defendants named in the prior Moehrl complaint).
In the amended Moehrl complaint, the plaintiffs allege that the defendants engaged in a continuing contract, combination, or conspiracy to unreasonably restrain trade and commerce in violation of Section 1 of the Sherman Act because defendant NAR allegedly established mandatory anticompetitive policies for the multiple listing services and its member brokers that require brokers to make an offer of buyer broker compensation when listing a property. The plaintiffs further allege that commission sharing, which provides for the broker representing the seller sharing or paying a portion of its commission to the broker representing the buyer, is anticompetitive and violates the Sherman Act, and that the defendant franchisors conspired with NAR by requiring their respective franchisees to comply with NAR’s policies and Code of Ethics. The plaintiffs seek a permanent injunction enjoining the defendants from requiring home sellers to pay buyer broker commissions or to otherwise restrict competition among buyer brokers, an award of damages and/or restitution, attorneys fees and costs of suit. Plaintiffs' counsel has filed a motion to appoint lead counsel in the case, which has yet to be decided by the Court. On August 9, 2019, NAR and the Company (together with the other defendants named in the amended Moehrl complaint) each filed separate motions to dismiss this litigation. The plaintiffs filed their opposition to the motions to dismiss on September 13, 2019, and the defendants filed their replies in support of the motions on October 18, 2019. In October 2019, the Department of Justice filed a statement of interest for this matter, in their words “to correct the inaccurate portrayal, by defendant The National Association of Realtors (‘NAR’), of a 2008 consent decree between the United States and NAR.” Discovery between the plaintiffs and defendants is stayed pending rulings on the outstanding motions to dismiss this litigation.
Sitzer and Winger v. PHH Corporation, et al.The National Association of Realtors, Realogy Holdings Corp., Homeservices of America, Inc., RE/MAX Holdings, Inc., and Keller Williams Realty, Inc. (U.S. District Court for the CentralWestern District of California)Missouri). This is a purportedputative class action broughtcomplaint filed on April 29, 2019 and amended on June 21, 2019 by four California residentsplaintiffs Joshua Sitzer and Amy Winger against 15NAR, the Company, Homeservices of America, Inc., RE/MAX Holdings, Inc., and Keller Williams Realty, Inc. The complaint contains substantially similar allegations, and seeks the same relief under the Sherman Act, as the Moehrl litigation. The Sitzer litigation is limited both in allegations and relief sought to the State of Missouri and includes an additional cause of action for alleged violation of the Missouri Merchandising Practices Act, or MMPA. On August 22, 2019, the Court denied defendants' motions to transfer the Sitzer matter to the U.S. District Court for the Northern District of Illinois and on October 16, 2019, denied the motions to dismiss this litigation filed respectively by NAR and the Company (together with the other named brokerage/franchisor defendants). In September 2019, the Department of Justice filed a statement of interest and appearances for this matter for the same purpose stated in the Moehrl matter and in July 2020 requested we provide them with all materials produced for Sitzer. Discovery between the plaintiffs and defendants is ongoing.
Rubenstein, Nolan v. The National Association of Realtors, Realogy Holdings Corp., Coldwell Banker, Sotheby’s Investment Realty, and Homeservices of America, Inc. (U.S. District Court for the District of Connecticut). In this action, the plaintiffs take issue with the same NAR policies related to buyer broker compensation at issue in the Moehrl and Sitzer matters, but claim the alleged conspiracy has harmed buyers (instead of sellers) and is a federal racketeering violation

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(instead of a violation of federal antitrust law). The predicate criminal act and other elements of the racketeering violation are not pled. The Company has not yet been served.
Securities Litigation
Tanaskovic v. Realogy Holdings Corp., et. al. (U.S. District Court for the District of New Jersey). This is a putative class action complaint filed on July 11, 2019 by plaintiff Sasa Tanaskovic against the Company and certain of its current and former executive officers. The lawsuit alleges violations of Sections 10(b), 20(a) and Rule 10b-5 of the Exchange Act in connection with allegedly false and misleading statements made by the Company about its business, operations, and prospects. The plaintiffs seek, among other things, compensatory damages for purchasers of the Company’s common stock between February 24, 2017 through May 22, 2019, as well as attorneys’ fees and costs. Locals 302 and 612 of the International Union of Operating Engineers-Employers Construction Industry Retirement Trust (the “Retirement Trust”), was appointed lead plaintiff on November 7, 2019. Lead plaintiff filed its amended complaint on March 6, 2020 and the Company filed its motion to dismiss the amended complaint on August 3, 2020.
Fried v. Realogy Holdings Corp., et al. (U.S. District Court for the District of New Jersey). This is a putative derivative action filed on October 23, 2019 by plaintiff Adam Fried against the Company (as nominal defendant) and certain of its current and former executive officers and members of its Board of Directors (as defendants). The lawsuit alleges violations of Section 14(a) of the Exchange Act and breach of fiduciary duties for, among other things, allegedly false and misleading statements made by the Company about its business, operations and prospects as well as unjust enrichment claims. The plaintiff seeks, among other things, compensatory damages, disgorgement of improper compensation, certain reforms to the Company’s corporate governance and internal procedures and attorneys’ fees and costs. On December 23, 2019, the Court approved a motion staying this case pending further action in the Tanaskovic matter.
The Company disputes the allegations in each of the captioned matters described above and will vigorously defend these actions. Given the early stages of each of these cases, we cannot estimate a range of reasonably possible losses for this litigation.
The Company believes that it has adequately accrued for legal matters as appropriate. The Company records litigation accruals for legal matters which are both probable and estimable.
Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. In addition, class action lawsuits can be costly to defend and, depending on the class size and claims, could be costly to settle.  As such, the Company could incur judgments or enter into settlements of claims with liability that are materially in excess of amounts accrued and these settlements could have a material adverse effect on the Company’s financial condition, results of operations or cash flows in any particular period.
* * *
Company-Initiated Litigation
Realogy Holdings Corp. v. SIRVA Worldwide, Inc., North American Van Lines, Inc., Madison Dearborn Capital Partners VII-A, L.P., Madison Dearborn Capital Partners VII-C, L.P., and Madison Dearborn Capital Partners VII Executive-A, L.P. (Court of Chancery of the State of Delaware). On April 27, 2020, the Company filed a complaint against affiliates of MDP and SIRVA to enforce SIRVA’s obligations under the Purchase Agreement for the sale of the Company’s employee relocation services business, which was amended by the Company on May 17, 2020. The Company alleges breach of contract and seeks specific performance by SIRVA to perform its obligations under the Purchase Agreement, or in the alternative, an order directing the defendants to specifically perform their contractual obligations to pay the Company a $30 million termination fee, as well as costs and expenses, including reasonable attorney’s fees. On June 8, 2020, the defendants filed their answer to the Company's complaint along with counterclaims alleging breach of contract as well as a motion to dismiss the Company's claims for specific performance under the Purchase Agreement. On July 17, 2020, the Court granted the defendants’ motion to dismiss, limited to the issue of the availability of specific performance with respect to the acquisition of Cartus Relocation Services. On July 27, 2020, the Company filed its application for certification of interlocutory appeal with the trial court. On July 28, 2020, the Company filed its Notice of Appeal with the Delaware Supreme Court, and on July 31, 2020, defendants filed their opposition to the Company's application for interlocutory appeal with the trial court. Trial on the remainder of the Company’s claims including seeking payment of the termination fee and the defendants’ counterclaims is currently scheduled for November 2020.

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Realogy Holdings Corp., NRT New York LLC (d/b/a The Corcoran Group), Sotheby’s International Realty, Inc., Coldwell Banker Residential Brokerage Company, Coldwell Banker Residential Real Estate LLC, NRT West, Inc., Martha Turner Properties, L.P. And Better Homes and Gardens Real Estate LLC v. Urban Compass, Inc., and Compass, Inc. (Supreme Court New York, New York County). On July 10, 2019, the Company and certain of its subsidiaries, PHH Corporationfiled a complaint against Urban Compass, Inc. and PHH Home Loans, LLC (a joint venture between RealogyCompass, Inc. (together, "Compass") alleging misappropriation of trade secrets; tortious interference with contract; intentional and PHH), allegingtortious interference with prospective economic advantage; unfair competition under New York common law; violations of the California Unfair Competition Law, Business and Professional Code Section 8(a)17200 et. seq. (unfair competition); violations of RESPA.  Plaintiffs seek to represent two subclasses comprisedNew York General Business Law Section 349 (deceptive acts or practices); violations of all persons in the United States who, since January 31, 2005, (1) obtained a RESPA-covered mortgage loan from either (a) PHH Home Loans, LLC or oneNew York General Business Law Sections 350 and 350-a (false advertising); conversion; and aiding and abetting breach of its subsidiaries, or (b) one of the mortgage services managed by PHH Corporation for other lenders, and (2) paid a fee for title insurance or settlement services to TRG or one of its subsidiaries.  Plaintiffs allege,contract. The Company seeks, among other things, that PHH Home Loans, LLC operates in violation of RESPAactual and that the other defendants violate RESPA by referring business to one another under agreements or arrangements.  Plaintiffs seek treblecompensatory damages, injunctive relief, and an award of attorneys’ fees costs and disbursements.  On May 19, 2017,costs. The Company subsequently amended its complaint (which, among other things, withdrew the parties heldcount for aiding and abetting breach of contract and added a mediation session, at which they agreedcount for defamation). Beginning in principle toSeptember 2019, Compass filed a settlementseries of the action, pursuant tomotions, which the Company would pay approximately $8 million (or one-halfopposed, including a motion to dismiss and a motion to compel arbitration with respect to certain claims involving Corcoran. In June 2020, having previously denied certain portions of Compass’ motion to dismiss, the Court denied the balance of the settlement). As a result,motion to dismiss, and denied as moot Compass’ motion to compel arbitration, granting the Company accrued $8 millionleave to amend the allegations in its complaint that relate to Corcoran’s exclusive listings in order to clarify the claims and damages sought in the second quarter of 2017 and the liability is included in accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. On July 31, 2017, the fourthaction. The Company filed its amended complaint was filed changing the named plaintiffs. At a hearing on the plaintiffs' motion for preliminary approval of the settlement held October 19, 2017, the Court indicated that if certain modest revisions are made to the settlement agreement and an amended motion for preliminary approval is filed by no later than November 3, 2017, the Court will grant preliminary approval to the settlement; however, there can be no assurance that the parties will reach a definitive settlement or that the Court will approve it.in July 2020.
* * *
The Company is involved in certain other claims and legal actions arising in the ordinary course of our business. Such litigation, regulatory actions and other proceedings may include, but are not limited to, actions relating to intellectual property, commercial arrangements, franchising arrangements, actions against our title company alleging it knew or should have known that others were committing mortgage fraud,the fiduciary duties of brokers, standard brokerage disputes like the failure to disclose accurate square footage or hidden defects in the property such as mold, vicarious liability based upon conduct of individuals or entities outside of our control, including franchisees and independent sales associates,agents, antitrust and anti-competition claims, general fraud claims (including wire fraud associated with third-party diversion of funds from a brokerage transaction), employment law claims, including claims challenging the classification of ourindependent sales associatesagents as independent contractors, wage and hour classificationrelated claims, and claims related to business actions responsive to the COVID-19 outbreak and governmental and regulatory directives thereto, and claims alleging violations of RESPA, or state consumer fraud statutes or federal consumer protection statutes. While the results of such claims and legal actions cannot be predicted with certainty, we do not believe based on information currently available to us that the final outcome of current proceedings against the Company will have a material adverse effect on our consolidated financial position, results of operations or cash flows. In addition, with the increasing requirements resulting from government laws and regulations concerning data breach notifications and data privacy and protection obligations, claims associated with these laws may become more common. While most litigation involves claims against the Company, from time to time the Company commences litigation, including litigation against former employees, franchisees and competitors when it alleges that such persons or entities have breached agreements or engaged in other wrongful conduct.
* * *
Cendant Corporate LitigationLiabilities and Guarantees to Cendant and Affiliates
Realogy Group (then Realogy Corporation) separated from Cendant on July 31, 2006 (the "Separation"), pursuant to a plan by Cendant (now known as Avis Budget Group, Inc.) to separate into four4 independent companies—one1 for each of Cendant's business units—real estate services (Realogy Group), travel distribution services ("Travelport"), hospitality services, including timeshare resorts ("Wyndham Worldwide"), and vehicle rental ("Avis Budget Group"). Pursuant to the Separation and Distribution Agreement dated as of July 27, 2006 among Cendant, Realogy Group, Wyndham Worldwide and Travelport (the "Separation and Distribution Agreement"), each of Realogy Group, Wyndham Worldwide and Travelport have assumed certain contingent and other corporate liabilities (and related costs and expenses), which are primarily related to each of their respective businesses. In addition, Realogy Group has assumed 62.5% and Wyndham Worldwide has assumed 37.5% of certain contingent and other corporate liabilities (and related costs and expenses) of Cendant or its subsidiaries, which are not primarily related to any of the respective businesses of Realogy Group, Wyndham Worldwide, Travelport and/or Cendant’s vehicle rental operations, in each case incurred or allegedly incurred on or prior to the date of the separation of Travelport from Cendant.
* * *
The Company believes that it has adequately accrued for legal matters as appropriate. The Company records litigation accruals for legal matters which are both probable and estimable.
Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. In addition, class action lawsuits can be costly to defend and, depending on the class size and claims, could be costly to settle.  As such, the Company could incur judgments or enter into settlements of claims with


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liability that are materially in excess of amounts accrued and these settlements could have a material adverse effect on the Company’s financial condition, results of operations or cash flows in any particular period.
Transfer of Cendant Corporate Liabilities, Issuance of Guarantees to Cendant and Affiliates and Contingent Liability Letter of Credit
Realogy Group has certain guarantee commitments with Cendant (pursuant to the assumption of certain liabilities and the obligation to indemnify Cendant, Wyndham Worldwide and Travelport for such liabilities). These guarantee arrangements primarily relate to certain contingent litigation liabilities, contingent tax liabilities, and other corporate liabilities, of which Realogy Group assumed and is generally responsible for 62.5%. Upon separation from Cendant, the liabilities assumed by Realogy Group were comprised of certain Cendant corporate liabilities which were recorded on the historical books of Cendant as well as additional liabilities which were established for guarantees issued at the date of Separation related to certain unresolved contingent matters that could arise during the guarantee period. Regarding the guarantees, if any of the companies responsible for all or a portion of such liabilities were to default in its payment of costs or expenses related to any such liability, Realogy Group would be responsible for a portion of the defaulting party or parties’ obligation. To the extent such recorded liabilities are in excess or are not adequate to cover the ultimate payment amounts, such excess or deficiency will be reflected in the results of operations in future periods.
In April 2007, the Company established a standby irrevocable letter of credit for the benefit of Avis Budget Group in accordance with the Separation and Distribution Agreement. The letter of credit was utilized to support the Company’s payment obligations with respect to its share of Cendant contingent and other corporate liabilities. The stated amount of the standby irrevocable letter of credit was subject to periodic adjustment to reflect the then current estimate of Cendant contingent and other liabilities. The standby irrevocable letter of credit terminates if (i) the Company’s senior unsecured credit rating is raised to BB by Standard and Poor’s or Ba2 by Moody’s or (ii) the aggregate value of the former parent contingent liabilities falls below $30 million.
The letter of credit was $53 million at December 31, 2016. With the resolution of a Cendant legacy tax matter in the third quarter of 2017, the aggregate value of the former parent contingent liabilities fell below $30 million to $18 million and therefore the standby irrevocable letter of credit was terminated in accordance with the agreement.
The due to former parent balance was $19 million at June 30, 2020 and $18 million and $28 million at September 30, 2017 and December 31, 2016,2019, respectively. The due to former parent balance was comprised of the Company’s portion of the following: (i) Cendant’s remaining state and foreign contingent tax liabilities, (ii) accrued interest on contingent tax liabilities, (iii) potential liabilities related to Cendant’s terminated or divested businesses, and (iv)(iii) potential liabilities related to the residual portion of accruals for Cendant operations.

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Tax Matters
The Company is subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording related assets and liabilities. In the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. The Company is regularly under audit by tax authorities whereby the outcome of the audits is uncertain. The Company believes there is appropriate support for positions taken on its tax returns. The liabilities that have been recorded represent the best estimates of the probable loss on certain positions and are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. However, the outcomes of tax audits are inherently uncertain.
Under the Tax Sharing Agreement with Cendant, Wyndham Worldwide and Travelport, the Company is generally responsible for 62.5% of payments made to settle claims with respect to tax periods ending on or prior to December 31, 2006 that relate to income taxes imposed on Cendant and certain of its subsidiaries, the operations (or former operations) of which were determined by Cendant not to relate specifically to the respective businesses of Realogy, Wyndham Worldwide, Avis Budget or Travelport.
With respect to any remaining legacy Cendant tax liabilities, the Company and its former parent believe there is appropriate support for the positions taken on Cendant’s tax returns. However, tax audits and any related litigation, including disputes or litigation on the allocation of tax liabilities between parties under the Tax Sharing Agreement, could result in outcomes for the Company that are different from those reflected in the Company’s historical financial statements.


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Escrow and Trust Deposits
As a service to its customers, the Company administers escrow and trust deposits which represent undisbursed amounts received for the settlement of real estate transactions. Deposits at FDIC-insured institutions are insured up to $250 thousand.$250 thousand. These escrow and trust deposits totaled $472$729 million at SeptemberJune 30, 20172020 and $415$475 million at December 31, 2016.2019. These escrow and trust deposits are not assets of the Company and, therefore, are excluded from the accompanying Condensed Consolidated Balance Sheets. However, the Company remains contingently liable for the disposition of these deposits.
10.SEGMENT INFORMATION
10. SEGMENT INFORMATION
The reportable segments presented below represent the Company’s operating segments for which separate financial information is available and which is utilized on a regular basis by its chief operating decision maker to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its operating segments. During the first quarter of 2020, Realogy Leads Group was consolidated into Realogy Franchise Group and the segment change is reflected for all periods presented. Realogy Leads Group, which previously was part of Cartus, consists of the Company's affinity and broker-to-broker business, as well as the broker network made up of agents and brokers from Realogy’s residential real estate brands and certain independent real estate brokers (which is referred to as the Realogy Advantage Broker Network). The Company initiated litigation against affiliates of MDP and SIRVA to enforce SIRVA’s obligations under the Purchase Agreement as described in Note 9. "Commitments and Contingencies". Based upon developments in this litigation, the Company may reassess segment classification in future periods.
Management evaluates the operating results of each of its reportable segments based upon revenue and Operating EBITDA. Operating EBITDA which is defined by us as net income (loss) before depreciation and amortization, interest (income) expense, net, (other than Relocation Services interest for relocation receivables and securitization obligations) and income taxes, eachand other items that are not core to the operating activities of which is presented in the Company’s Condensed Consolidated StatementsCompany such as restructuring charges, former parent legacy items, gains or losses on the early extinguishment of Operations.debt, impairments, gains or losses on discontinued operations and gains or losses on the sale of investments or other assets. The Company’s presentation of Operating EBITDA may not be comparable to similar measures used by other companies.
 Revenues (a) (b)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Real Estate Franchise Services$224
 $215
 $631
 $593
Company Owned Real Estate Brokerage Services1,267
 1,231
 3,556
 3,340
Relocation Services111
 116
 290
 308
Title and Settlement Services154
 164
 431
 424
Corporate and Other (c)(82) (82) (238) (225)
Total Company$1,674
 $1,644
 $4,670
 $4,440


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 Revenues (a) (b)
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Realogy Franchise Group$179  $260  $347  $439  
Realogy Brokerage Group933  1,331  1,802  2,147  
Realogy Title Group160  160  297  274  
Corporate and Other (c)(65) (87) (123) (142) 
Total Company$1,207  $1,664  $2,323  $2,718  
_______________
 
 
(a)Transactions between segments are eliminated in consolidation. Revenues for the Real Estate Franchise Services segment include intercompany royalties and marketing fees paid by the Company Owned Real Estate Brokerage Services segment of $82 million and $238 million for the three and nine months ended September 30, 2017, respectively, and $82 million and $225 million for the three and nine months ended September 30, 2016, respectively. Such amounts are eliminated through the Corporate and Other line.
(b)Revenues for the Relocation Services segment include intercompany referral commissions paid by the Company Owned Real Estate Brokerage Services segment of $11 million and $31 million for the three and nine months ended September 30, 2017, respectively, and $12 million and $33 million for the three and nine months ended September 30, 2016, respectively. Such amounts are recorded as contra-revenues by the Company Owned Real Estate Brokerage Services segment. There are no other material intersegment transactions.
(c)Includes the elimination of transactions between segments.
(a)Transactions between segments are eliminated in consolidation. Revenues for the Realogy Franchise Group include intercompany royalties and marketing fees paid by Realogy Brokerage Group of $65 million and $123 million for the three and six months ended June 30, 2020, respectively, and $87 million and $142 million for the three and six months ended June 30, 2019, respectively. Such amounts are eliminated through the Corporate and Other line.
 EBITDA
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 (a) 2016 (b) 2017 (c) 2016 (d)
Real Estate Franchise Services$159
 $153
 $427
 $394
Company Owned Real Estate Brokerage Services62
 74
 113
 131
Relocation Services37
 40
 65
 74
Title and Settlement Services21
 23
 49
 49
Corporate and Other (e)(25) (20) (70) (60)
Total Company$254
 $270
 $584
 $588
Less:       
Depreciation and amortization (f)$51
 $53
 $150
 $149
Interest expense, net41
 37
 127
 169
Income tax expense67
 74
 131
 114
Net income attributable to Realogy Holdings and Realogy Group$95
 $106
 $176
 $156
(b)Revenues for Realogy Franchise Group include intercompany referral commissions related to Realogy Advantage Broker Network paid by Realogy Brokerage Group of $3 million and $5 million for the three and six months ended June 30, 2020, respectively, and $5 million and $8 million for the three and six months ended June 30, 2019, respectively. Such amounts are recorded as contra-revenues by Realogy Brokerage Group. There are no other material intersegment transactions.
_______________
(a)The three months ended September 30, 2017 includes a net cost of $1 million of former parent legacy items and $1 million related to the loss on the early extinguishment of debt in Corporate and Other, and restructuring charges of $2 million in the Company Owned Real Estate Brokerage Services segment.
(b)The three months ended September 30, 2016 includes $9 million of restructuring charges as follows: $1 million in the Real Estate Franchise Services segment, $6 million in the Company Owned Real Estate Brokerage Services segment, $1 million in the Relocation Services segment and $1 million in the Title and Settlement Services segment.
(c)The nine months ended September 30, 2017 includes an $8 million expense related to the settlement of the Strader legal matter and $5 million related to the losses on the early extinguishment of debt, partially offset by a net benefit of $10 million of former parent legacy items in Corporate and Other, and $9 million of restructuring charges as follows: $8 million in the Company Owned Real Estate Brokerage Services segment and $1 million in the Real Estate Franchise Services segment.
(d)The nine months ended September 30, 2016 includes $30 million of restructuring charges as follows: $4 million in the Real Estate Franchise Services segment, $15 million in the Company Owned Real Estate Brokerage Services segment, $4 million in the Relocation Services segment, $1 million in the Title and Settlement Services segment and $6 million in Corporate and Other, and a net cost of $1 million of former parent legacy items included in Corporate and Other.
(e)Includes the elimination of transactions between segments.
(f)Depreciation and amortization for both the three and nine months ended September 30, 2017 includes $1 million of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in earnings of unconsolidated entities" line on the Condensed Consolidated Statement of Operations.

(c)Includes the elimination of transactions between segments.


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 Operating EBITDA
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Realogy Franchise Group$122  $180  $223  $278  
Realogy Brokerage Group15  47  (36) (15) 
Realogy Title Group61  32  73  23  
Corporate and Other (a)(26) (24) (51) (49) 
Total continuing operations172  235  209  237  
Less: Depreciation and amortization46  43  91  84  
Interest expense, net59  80  160  143  
Income tax expense (benefit)11  33  (121) 1  
Restructuring costs, net (b)14  9  25  18  
Impairments (c)7  2  454  3  
Loss on the early extinguishment of debt (d)8  —  8  5  
Net income (loss) from continuing operations attributable to Realogy Holdings and Realogy Group27  68  (408) (17) 
Net (loss) income from discontinued operations(41) 1  (68) (13) 
Net (loss) income attributable to Realogy Holdings and Realogy Group$(14) $69  $(476) $(30) 
11.SUBSEQUENT EVENTS
_______________
(a)Includes the elimination of transactions between segments.
(b)The three months ended June 30, 2020 includes restructuring charges of $12 million at Realogy Brokerage Group and $2 million at Realogy Title Group.
The three months ended June 30, 2019 includes restructuring charges of $1 million at Realogy Franchise Group, $6 million at Realogy Brokerage Group, $1 million at Realogy Title Group and $1 million at Corporate and Other.
The six months ended June 30, 2020 includes restructuring charges of $1 million at Realogy Franchise Group, $21 million at Realogy Brokerage Group and $3 million at Realogy Title Group.
The six months ended June 30, 2019 includes restructuring charges of $1 million at Realogy Franchise Group, $10 million at Realogy Brokerage Group, $2 million at Realogy Title Group and $5 million at Corporate and Other.
(c)Impairments for the three months ended June 30, 2020 and for the three and six months ended June 30, 2019 relate to lease asset impairments.
Impairments for the six months ended June 30, 2020 include a goodwill impairment charge of $413 million which reduced the net carrying value of Realogy Brokerage Group by $314 million after accounting for the related income tax benefit of $99 million, an impairment charge of $30 million which reduced the carrying value of trademarks at Realogy Franchise Group and $11 million related to lease asset impairments.
(d)Loss on the early extinguishment of debt is recorded in Corporate and Other.

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11. SUBSEQUENT EVENTS
On October 23, 2017,July 24, 2020, Realogy Group amended the Senior Secured Credit Agreement and Term Loan A Agreement (collectively referred to as the “Amendments”) to ease the senior secured leverage ratio financial covenant under each agreement. Under the Amendments, Realogy Group is required to maintain a senior secured leverage ratio not to exceed 6.50 to 1.00 commencing with the third quarter of 2020 through and including the second quarter of 2021. Following the second quarter of 2021, the maximum senior secured leverage ratio permitted will then step down to 5.50 to 1.00 for the third quarter of 2021 and thereafter step down by 0.25 on a quarterly basis to 4.75 to 1.00 (which was the applicable level prior to the effectiveness of the Amendments) on and after the second quarter of 2022. No changes were made to the commitments and pricing under the Senior Secured Credit Agreement and Term Loan A Agreement pursuant to the Amendments.
The Amendments also tighten certain other covenants during the period commencing on July 24, 2020 until the Company announced that Ryan Schneider has been electedissues its financial results for the third quarter of 2021 and concurrently delivers of an officer’s certificate to its lenders showing compliance with the quarterly financial covenant, subject to earlier termination, or the “covenant period.” If Realogy Group’s senior secured leverage ratio does not exceed 5.50 to 1.00 for the fiscal quarter ending June 30, 2021, the covenant period will end at the time the Company delivers the compliance certificate to the lenders for such period; however, in either instance, the gradual step down in the senior secured leverage ratio, as President and Chief Operating Officerdescribed above, will continue to apply. The covenants revised during this covenant period include the reduction or elimination of the amount available for certain types of additional indebtedness, liens, restricted payments (including dividends and stock repurchases), investments (including acquisitions and joint ventures), and voluntary junior debt repayments.
The Company and appointedalso may elect to end the covenant period at any time, provided the senior secured leverage ratio does not exceed 4.75 to 1.00 as a member of the Company’s Boardmost recently ended quarter for which financial statements have been delivered. In such event, the leverage ratio will reset to the pre-Amendment level of Directors. In accordance with the succession plan developed by the Board, Mr. Schneider is expected4.75 to be named Chief Executive Officer (the “CEO”) by December 31, 2017.
Upon the appointment of Mr. Schneider as CEO on or before December 31, 2017, Richard Smith, the Company’s Chairman and Chief Executive Officer, will retire from the Company and resign from the Board. The Company anticipates that Michael Williams, the Company’s Lead Independent Director, will be named Chairman of the Board upon the appointment of Mr. Schneider as CEO.
On October 23, 2017, the Company amended the employment agreement dated March 13, 2017 with Mr. Smith (the “Amended CEO Employment Agreement”). Under the Amended CEO Employment Agreement, Mr. Smith continues as the Company's CEO and Chairman of the Board until the earlier of (a) the Board appoints a new Chairman of the Board or a new CEO to assume these roles from Mr. Smith and (b) December 31, 2017 (the “Transition Date”). Upon the Transition Date, Mr. Smith’s employment with the Company will terminate and he will resign as an officer and director of the Company, which will be considered a termination by Mr. Smith with good reason under the terms of the Amended CEO Employment Agreement. As previously agreed under Mr. Smith's employment agreement, upon such a termination, subject to his continued compliance with his restrictive covenants and the execution and non-revocation of a release of claims, the Company will provide Mr. Smith with severance payments and benefits, including an amount equal to 2.4 times the sum of his annual base salary and target annual bonus, payable in 24 equal monthly installments (or $6 million).

1.00 thereafter.


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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying notes thereto included elsewhere herein and with our Consolidated Financial Statements and accompanying notes included in the 20162019 Form 10-K. Unless otherwise noted, all dollar amounts in tables are in millions. Neither Realogy Holdings, the indirect parent of Realogy Group, nor Realogy Intermediate, the direct parent company of Realogy Group, conducts any operations other than with respect to its respective direct or indirect ownership of Realogy Group. As a result, the condensed consolidated financial positions, results of operations and cash flows of Realogy Holdings, Realogy Intermediate and Realogy Group are the same. This Management's Discussion and Analysis of Financial Condition and Results of Operations, containor MD&A, contains forward-looking statements. See "Forward-Looking Statements" in this report and "Forward-Looking Statements" and "Risk Factors" in this Quarterly Report as well as our 20162019 Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results may differ materially from those contained in any forward-looking statements.
OVERVIEW
We are a global provider of real estate and relocation services and report our operations in the following fourthree business segments:
•
Real Estate Franchise Services (known as Realogy Franchise Group or RFG)—franchises the Century 21®, Coldwell Banker®, Coldwell Banker Commercial®, ERA®, Sotheby's International Realty® and Better Homes and Gardens® Real Estate brand names. As of September 30, 2017,
•Realogy Franchise Group—franchises the Century 21®, Coldwell Banker®, Coldwell Banker Commercial®, Corcoran®, ERA®, Sotheby's International Realty® and Better Homes and Gardens® Real Estate brand names. As of June 30, 2020, our franchise systems had approximately 14,450 franchised and company owned offices and approximately 286,500 independent sales associates operating under our franchise and proprietary brands in the U.S. and 113 other countries and territories around the world, which included more than 780 of our company owned and operated brokerage offices with more than 50,000 independent sales associates.
Our wholly-owned subsidiary, ZapLabs LLC (which changed its name from ZipRealty LLC in 2016), is the developer of our proprietary technology platform for the real estate brokeragesfranchise systems and proprietary brands had approximately 318,300 independent sales associates in our franchise system as well as their customers. We believe the Zap technology platform will increase the value proposition to franchisees,agents worldwide, including approximately 187,500 independent sales associates and customers as well as improveagents operating in the productivity ofU.S. (which included approximately 51,800 company owned brokerage independent sales associates.agents). As of June 30, 2020, our real estate franchise systems and proprietary brands had approximately 19,300 offices worldwide in 115 countries and territories, including approximately 5,800 brokerage offices in the U.S. (which included approximately 680 company owned brokerage offices). Realogy Leads Group, which consists of Company- and client- directed affinity programs, broker-to-broker referrals and the Realogy Advantage Broker Network (previously referred to as the Cartus Broker Network) was consolidated in Realogy Franchise Group beginning in the first quarter of 2020 (see Note 10, "Segment Information", to the Condensed Consolidated Financial Statements for additional information).
•
Company Owned Real Estate Brokerage Services (known as NRT)—operates a full-service real estate brokerage business with more than 780 owned and operated brokerage offices with more than 50,000 independent sales associates principally under the Coldwell Banker®, Corcoran®, Sotheby’s International Realty®, ZipRealty® and Citi HabitatsSM brand names in more than 50 of the 100 largest metropolitan areas in the U.S. This segment also includes the Company's share of earnings for our PHH Home Loans venture, which is in the process of winding down as we transition to our new mortgage origination joint venture with Guaranteed Rate Affinity.
•
Relocation Services (known as Cartus®)—primarily offers clients employee relocation services such as homesale assistance, providing home equity advances to transferees (generally guaranteed by the individual's employer), home finding and other destination services, expense processing, relocation policy counseling and consulting services, arranging household goods moving services, coordinating visa and immigration support, intercultural and language training and group move management services. In addition, we provide home buying and selling assistance to members of affinity clients.
•Realogy Brokerage Group—operates a full-service real estate brokerage business with approximately 680 owned and operated brokerage offices with approximately 51,800 independent sales agents principally under the Coldwell Banker®, Corcoran® and Sotheby’s International Realty® brand names in many of the largest metropolitan areas in the U.S.
•Realogy Title and Settlement Services (known as Title Resource Group or TRG)—provides full-service title and settlement services to real estate companies, affinity groups, corporations and financial institutions with many of these services provided in connection with the Company's real estate brokerage and relocation services business. This segment also includes the Company's share of equity earnings including start-up costs,and losses for our Guaranteed Rate Affinity mortgage origination joint venture.
Our technology and data group pursues technology-enabled solutions to support our business segments and franchisees as well as independent sales agents affiliated with Realogy Brokerage and Franchise Groups and their customers.
RECENT DEVELOPMENTS
Leadership Succession PlanCOVID-19
On October 23, 2017,The COVID-19 pandemic continues to have a profound effect on the Company announced that Ryan Schneider has been named Presidentglobal economy and Chief Operating Officer offinancial markets, creating considerable risks and uncertainties for almost all sectors, including the U.S. real estate services industry, as well as for the Company and appointedits affiliated franchisees. Among other things, the crisis has created risks and uncertainties arising from the adverse effects on the economy as well as risks related to employees, independent sales agents, franchisees, and consumers.
In the United States, federal, state and local governments continue to react to this evolving public health crisis. Although many states began the process of easing these restrictions during the second quarter of 2020, the vast majority of Americans continue to be subject to restrictions on their activities due to the Boardpublic health crisis. The level and duration of Directors. Mr. Schneider is expectedsuch restrictions vary by state and local mandates. In addition, multiple states have recently re-established certain restrictions or paused their plans to be named Chief Executive Officerease restrictions due to increased COVID-19 cases. We continue to prioritize the

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protection of the Companyhealth and safety of our employees, affiliated agents and franchisees and customers and, as of June 30, 2020, substantially all of our employees continued to work remotely.
In addition to federal, state and local regulations and guidelines related to the ongoing crisis as well as brokerage policies and procedures, residential real estate transactions may be additionally restricted due to each consumer's preferences, including with respect to health, financial and other matters, including, but not limited to, whether the home buyer or seller is affected by December 31, 2017. Upon the appointment of Mr. Schneider as CEO on or before December 31, 2017, Richard Smith, the Company’s Chairman and Chief Executive Officer, will retireheightened economic uncertainties resulting from the Company. The Company anticipates that Michael Williams,pandemic, including significant stock market volatility, declining wages and increased unemployment.
In mid-March 2020, we began taking a series of proactive cost-saving measures in reaction to the Company’s Lead Independent Director, will be named Chairmanevolving crisis, including salary reductions, furloughs and reductions in spending which resulted in substantial cost-savings in the second quarter of the Board upon the appointment2020. Many of Mr. Schneider as CEO.


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Strategic Initiatives
Our strategic initiativesthese cost-saving measures were or are focused on affiliated independent sales associates, including targeted recruiting strategies, best-in-class retention practices,temporary in nature and organizational changes with new centers of excellence to enhance support for services such as marketing and education for affiliated independent sales associates. We believe that this refined strategic plan will manifest itself in a variety of ways, including improved lead generation, education and performance coaching and strengthened technology and marketing services, all of which are designed to increase the productivity of our existing independent sales associates and attract new independent sales associates.
Consistent with this strategy, NRT hashave been placing, and will continue to place,be assessed and adjusted on an even greater focus onongoing basis based upon the qualityvolume of our services,homesale transactions and business needs. For example, given the continued improving trend in open transaction volume and closed homesale transaction volume, salaries were fully restored in July 2020, including the developmentvoluntary temporary salary reductions that had been previously agreed to by our CEO and other executive officers, and many furloughed employees have been returned to the workforce. Subject to industry and macroeconomic developments, we currently anticipate that most of toolsthe remaining temporary cost measures will be lifted by the fourth quarter of 2020 and, accordingly, do not expect to increase sales associate productivity,realize the same level of COVID-19 related expense reductions in the second half of 2020. As part of the future vision of the Company, we may incorporate certain of the cost-saving measures implemented in connection with the crisis into our long-term business model.
We continue to take actions to leverage technology for virtual showings, alternative processes for contract negotiation and execution, and recent legislative and procedural changes related to items such as remote appraisals and remote notarization.
We earn royalty or gross commission income from closed homesale sides (with each homesale transaction having a “buy” and “sell” side). Closed homesale transaction volume represents closed homesale sides times average homesale price. Open transaction volume represents new contracts entered into to buy or sell a home times average sale price.
In mid-April 2020, open transaction volume reached its low point and since then has rebounded in a fairly consistent manner as states began to ease restrictions on activities and/or consumers began to adjust to the new COVID-19 environment. Open transaction volume in the month of June 2020 was positive and higher than June 2019 volume for our company owned and franchised brokerage businesses on a combined basis, with this positive trend continuing in the first half of July 2020. Closed homesale transaction volume has also begun to improve. While closed homesale transaction volume was down 24% for the second quarter of 2020 compared to the same period in 2019 for our company owned and franchised brokerages on a combined basis, combined closed transaction volume improved meaningfully in June to negative 8% year-over-year after reaching a bottom in May 2020. The improvement in open transaction volume in June and the usefirst half of financial incentives to strengthen our recruiting and retention of independent sales associates and teams. These actions includeJuly should have a focused strategy to recruit and retain high performing sales associates. In addition, there is an enhanced focusbeneficial impact on the value proposition offered to independent sales associate teams. This strategic emphasis on recruitment and retention is driven by our overall goal to sustain or grow market shareclosed transaction volume in various markets and ultimately improve the Company's overall profitability. While we have seen revenue improvements directly related to these initiatives, we have experienced and expect to continue to experience pressure on costs and margin from these initiatives.
Impact of Natural Disasters
In the third quarter of 2017, Hurricanes Harvey2020, but growth may be limited by inventory constraints across geographies and Irma caused damageprice point.
During the second quarter of 2020, our company owned brokerages were also negatively impacted by steeper declines in closed transactions in densely populated areas, such as California and the New York metropolitan area (geographies which also have an average sales price much higher than the U.S. average), as well as from lower inventory in the high-end markets, resulting in lower homesale transaction activity for company owned brokerages compared to residentialfranchised brokerages due to geographic and commercial property and infrastructurehigh-end market concentration. We expect that if these markets continue the slow reopening process homesale transactions will continue to lag in Texas and Florida, which delayedthese markets.
While we are encouraged by the closing of homesale transactions. The hurricanes had an unfavorable impact onimprovement in open homesale transaction volume title closing units and broker-to-broker referral fees during thesince mid-April 2020, our third quarter 2020 results may continue to be negatively impacted by the pandemic. If the crisis worsens or economic side effects of 2017the crisis worsen, these negative impacts may be more pronounced in the affected areasfuture periods and are expected to have a similar unfavorable impact in the fourth quarter of 2017.
In October 2017, several catastrophic wildfires occurred in Northern California. We are assessing the impact of these wildfires, which we currently do not expect willcould have a material impactadverse effect on our results of operations and liquidity.

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Liquidity and Capital Resources Update
In June 2020, we issued $550 million 7.625% Senior Secured Second Lien Notes due in June 2025. We used the fourth quarterentire net proceeds from this offering, together with cash on hand, to fund the redemption of 2017.all of our outstanding 5.25% Senior Notes due 2021, and to pay related interest, premium, fees, and expenses. With this financing completed, our nearest debt maturity is not until early 2023, other than amortization payments for the Term Loan A and B Facilities.
Although our segments operate in the affected regions as noted above,On July 24, 2020, we did not incur significant damage to our office locations relatedentered into amendments to the hurricanesSenior Secured Credit Agreement and have not incurred any significant damageTerm Loan A Agreement (referred to our office locationscollectively herein as a resultthe “Amendments”).
Pursuant to the Amendments, the financial covenant contained in each of the wildfiresSenior Secured Credit Agreement and we believe we have adequate insurance coverageTerm Loan A Agreement has been eased to protect our property losses.
New Mortgage Origination Joint Venture
On February 15, 2017,require that Realogy announced that it and Guaranteed Rate, Inc. (“Guaranteed Rate”) agreedGroup maintain a senior secured leverage ratio not to form a new mortgage origination joint venture, Guaranteed Rate Affinity, LLC ("Guaranteed Rate Affinity"), which began doing business in August 2017. In accordanceexceed 6.50 to 1.00 commencing with the asset purchase agreement, Guaranteed Rate Affinity is acquiring certain assets of the mortgage operations of PHH Home Loans, the existing joint venture between Realogy and PHH Mortgage Corporation, including its four regional centers and employees across the United States, but not its mortgage assets.
Following completion of the transactions under the asset purchase agreement, Guaranteed Rate Affinity will originate and market its mortgage lending services to Realogy’s real estate brokerage and relocation subsidiaries as well as other real estate brokerage and relocation companies across the country. Guaranteed Rate owns a controlling 50.1% stake of Guaranteed Rate Affinity and Realogy owns 49.9%. Guaranteed Rate will have responsibility for the oversight of the officers and senior employees of Guaranteed Rate Affinity who are designated to manage Guaranteed Rate Affinity.
The asset purchase agreement and the movement of employees from the existing joint venture to the new joint venture is being completed in a series of five phases. The first two phases were completed in the third quarter of 20172020 through and in Octoberincluding the third phase was completed. The remaining two phases are expected to be completed in the fourthsecond quarter of 2017. After giving effect2021. The maximum senior secured leverage ratio permitted will then step down to the establishment of Guaranteed Rate Affinity and the liquidation of Realogy's interest in PHH Home Loans in early 2018, the Company expects5.50 to realize net cash proceeds of approximately $20 million. There can be no assurance that all of the transactions contemplated by the asset purchase agreement will be consummated in a timely manner or at all or that the Company will receive the cash it expects from the wind down of the existing joint venture and the establishment of the new joint venture. The equity earnings related to Guaranteed Rate Affinity will be included in the financial results of our Title and Settlement Services segment.


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Return of Capital to Stockholders
During1.00 for the third quarter of 2017,2021 and thereafter step down by 0.25 on a quarterly basis to 4.75 to 1.00 (which was the Company repurchased and retired 1.8 million shares of common stock for $58 million at a weighted average market price of $33.83 per share. Since beginningapplicable level prior to the repurchaseeffectiveness of the Company's common stock in February 2016,Amendments) on and after the Company has repurchased a totalsecond quarter of 13 million shares at a weighted average market price of $29.07 per share through September 30, 2017. As of September 30, 2017, approximately $198 million of authorization remains available for the repurchase of shares under the February 2017 share repurchase program.
Repurchases under these programs may be made at management's discretion from time to time on the open market,2022. Unless terminated earlier by us or pursuant to Rule 10b5-1 trading plans or privately negotiated transactions. The size and timingthe terms of these repurchases will depend on price, market and economic conditions, legal and contractual requirements and other factors. The repurchase programs have no time limit and may be suspended or discontinued at any time.
Referthe Amendments, until we deliver our covenant compliance certificate to "Part II—Other Information, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds"the lenders for additional information on the Company's share repurchase programs.
During the third quarter of 2017,2021, certain other covenants are tightened. The Amendments leave unchanged the Board declaredcommitments and paidpricing under the Senior Secured Credit Agreement (which includes the Revolving Credit Facility) and Term Loan A Agreement.
We were in compliance with the financial covenant in effect at June 30, 2020, with a quarterly cash dividendsenior secured leverage ratio of $0.09 per share3.29 to 1.00 as compared to the maximum ratio then permitted of 4.75 to 1.00.
See "Financial Condition, Liquidity and Capital Resources—Liquidity and Capital Resources" in this MD&A for additional information.
Update on Litigation Regarding the Planned Sale of Cartus Relocation Services
As previously disclosed, during the second quarter of 2020, we filed an action in the Court of Chancery of the State of Delaware (the “Court”) against affiliates of Madison Dearborn Partners, LLC and SIRVA Worldwide, Inc. (“SIRVA”), pursuant to which we allege breach of contract and seek specific performance by SIRVA to perform its obligations under the Purchase and Sale Agreement entered into on November 6, 2019 for the acquisition of Cartus Relocation Services, the Company’s common stock.global employee relocation business, by North American Van Lines, Inc., as assignee of SIRVA, or in the alternative, an order directing the defendants to specifically perform their contractual obligations to pay us a $30 million termination fee, as well as costs and expenses, including reasonable attorney’s fees. In July 2020, the Court granted the defendants’ motion to dismiss, limited to the issue of the availability of specific performance with respect to the acquisition of Cartus Relocation Services. We subsequently filed an application for certification of interlocutory appeal with the Court as well as a Notice of Appeal with the Delaware Supreme Court, and the defendants filed their opposition to our application for interlocutory appeal with the Court. Trial on the remainder of our claims including seeking payment of the termination fee and the defendants’ counterclaims is currently scheduled for November 2020.
CURRENT BUSINESS AND INDUSTRY TRENDS
According to the National Association of Realtors ("NAR"), during the first nine monthshalf of 2017,2020, homesale transaction volume increased 6%decreased 4% due to a 5% increase in the average homesale price and a 1% increasean 8% decrease in the number of homesale transactions. The highertransactions, partially offset by a 4% increase in the average homesale price relative to the increase in homesale transactions is a function of high demand against a limited supply of homes for sale. RFG and NRT homesaleprice.
Homesale transaction volume on a combined basis increased 7% infor Realogy Franchise and Brokerage Groups decreased 12% during the first ninesix months ended June 30, 2020 compared to the six months ended June 30, 2019. Homesale transaction volume at Realogy Brokerage Group decreased 16%, primarily as a result of 2017. NRT experienced a 2% increase14% decrease in existing homesale transactions and a 6%2% decrease in average homesale price and homesale transaction volume at Realogy Franchise Group decreased 9%, as a result of a 12% decrease in existing homesale transactions, partially offset by a 4% increase in average homesale price while RFG experiencedprice.
Homesale transaction volume on a 1% increasecombined basis for Realogy Franchise and Brokerage Groups decreased 24% during the three months ended June 30, 2020 compared to the three months ended June 30, 2019. Homesale transaction volume at Realogy Brokerage Group decreased 30%, primarily as a result of a 25% decrease in existing homesale transactions and a 6%7% decrease in average homesale price and homesale transaction volume at Realogy Franchise Group decreased 20%, as a result of a 21% decrease in existing homesale transactions, partially offset by a 1% increase in average homesale price.
Recruitment

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The COVID-19 crisis began meaningfully impacting our results in mid-March 2020 and retentionwe believe the ongoing crisis served as the primary driver of independent sales associatesthe decreases in homesale transaction volume for both the three- and independent sales associate teams are criticalsix- month periods ended June 30, 2020. Prior to the businessCOVID-19 crisis, incremental improvement in certain industry fundamentals, in particular declines in average mortgage rates, contributed to improvement in market conditions in the second half of 2019 and financial resultscontinued to positively impact the majority of the first quarter of 2020. While during the second quarter of 2020, we continued to benefit from a brokerage,low mortgage rate environment (as interest rates were further reduced in response to the COVID-19 crisis), homesale transaction volume was negatively impacted by factors related to the pandemic, including restrictive measures implemented by state and local governments in response to the COVID-19 crisis. These measures were especially impactful to our company owned brokerages and those operated bybrokerage operations due to our affiliated franchisees. Competition for independent sales associates in our industry, including within our franchise system, is high,geographic concentration, in particular with respectin California and the New York metropolitan area.
Inventory. Continued or accelerated declines in inventory, whether attributable to the COVID-19 crisis or otherwise, may result in insufficient supply to meet any increased demand driven by the lower interest rate environment. Even before the COVID-19 crisis, low housing inventory levels had been an industry-wide concern, in particular in certain highly sought-after geographies and at lower price points. According to NAR, the inventory of existing homes for sale in the U.S. decreased approximately 18% from 1.92 million as of June 2019 to 1.57 million as of June 2020. As a result, inventory has decreased from 4.3 months of supply in June 2019 to 4.0 months as of June 2020. These levels continue to be significantly below the 10-year average of 5.4 months, the 15-year average of 6.1 months and the 25-year average of 5.7 months.
Unemployment. Following the onset of the pandemic, many companies announced reductions in work weeks and salaries, although many people have recently returned to the labor market following weeks or months of COVID-19 induced restrictions. According to the U.S. Bureau of Labor Statistics, while the U.S. unemployment rate declined to 11.1% in June 2020, easing from a high of 14.7% reached in April 2020, this jobless rate still represents a 7.6% increase since February 2020. If the COVID-19 pandemic continues to impact employment levels and economic activity for a substantial period, it is likely to lead to an increase in loan defaults and foreclosure activity and may make it more productive sales associates. Mostdifficult for potential home buyers to arrange financing.
Mortgage Rates. A wide variety of a brokerage's real estate listings are sourced through the sphere of influence of their independent sales associates, notwithstandingfactors can contribute to mortgage rates, including federal interest rates, demand, consumer income, unemployment levels and foreclosure rates. In response to the growing influenceeconomic effects of internet-generated leads. Competitionthe COVID-19 crisis, yields on the 10-year Treasury note declined to an all-time low of 0.54% on March 9, 2020. In addition, the Federal Reserve Board cut the interest rate two times, dropping its benchmark interest rate to a range of 0% to 0.25% on March 15, 2020. According to Freddie Mac, mortgage rates on commitments for independent sales associates is generally subjecta 30-year, conventional, fixed-rate first mortgage lowered to numerous factors, including remuneration (such as sales commission percentage and other financial incentives paid to independent sales associates), other expensesan average of independent sales associates, leads or business opportunities generated3.23% for the independent sales associate fromsecond quarter of 2020 compared to 4.00% for the brokerage, independent sales associates' perceptionsecond quarter of 2019. On June 30, 2020, mortgage rates were 3.16%, according to Freddie Mac. Our financial results are favorably impacted by a low interest rate environment as a decline in mortgage rates generally drives increased refinancing activity and homesale transactions. Due to the economic effects of the valueCOVID-19 crisis, banks may tighten mortgage standards, even as rates decline, which could limit the availability of mortgage financing. In addition, many individuals and businesses have benefited and may be continuing to benefit from one or more federal and/or state programs meant to assist in the broker's brand affiliation, marketingnavigation of COVID-related financial challenges, and advertising efforts by the brokerage, the office manager, staffcurtailment of such programs could have a negative impact on their financial health. Increases in mortgage rates adversely impact housing affordability and fellow independent sales associates with whom they collaborate dailywe have been and technology, continuing professional education, and other services provided by the brokerage. We believe that the influence of independent sales associates and independent sales associate teams has increased during the past five years and, together with the increasing competition from other brokerages, hascould again be negatively impacted the recruitment and retention of independent sales associates and put pressure on commissionby a rising interest rate splits. These factors may also put pressure on RFG's net effective royalty rateenvironment.
Affordability. The fixed housing affordability index, as the economics for agents and agent teams change. At NRT, we continue to focus on our growth initiatives, specifically our recruiting programs and the focus on strengthening the sales agent value proposition. The new targeted recruiting initiatives that we introduced in late 2016 have enabled us to mitigate prior declines in market share through the addition of high performing NRT independent sales associates. While these recruiting and retention initiatives have increased our commission expense, we expect these initiatives will improve our operating results over the longer term and will continue to positively impact our market share trend.
As reported by NAR, theincreased from 151 for May 2019 to 169 for May 2020, which we believe is primarily attributable to lower mortgage rates. A housing affordability index has continued to be at historically favorable levels, despite the increases in the average homesale price over the past several years. An index above 100 signifies that a family earning the median income has sufficient income to purchase a median-priced home, assuming a 20 percent down payment and ability to qualify for a mortgage. The compositeWe expect housing affordability index was 150 for August 2017to be significantly impacted by the unprecedented rise in unemployment and 165 for 2016. The housing affordability index remains significantly higher thaneconomic challenges as a result of the averageCOVID-19 crisis, but are unable to estimate the extent due to the uncertainties regarding the duration and severity of 127the COVID-19 crisis and its related impact on the global economy.
Recruitment and Retention of Independent Sales Agents; Commission Income. Recruitment and retention of independent sales agents and independent sales agent teams are critical to the business and financial results of a brokerage, including our company owned brokerages and those operated by our affiliated franchisees. Aggressive competition for the periodaffiliation of independent sales agents has negatively impacted recruitment and retention efforts at both Realogy Franchise and Brokerage Groups, in particular with respect to more productive sales agents, and drove a loss in our market share for 2019 compared to 2018. This loss of market share has contributed to the decline in homesale transaction volume at both Realogy Franchise and Brokerage Groups and is expected to continue to adversely impact results.

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We believe that a variety of factors in recent years have driven intensifying recruitment and retention tactics for independent sales agents in the industry and has increasingly impacted our recruitment and retention of top producing agents. Such factors include increasing competition, increasing levels of commissions paid to agents (including up-front payments and equity), changes in the spending patterns of independent sales agents (as more independent sales agents purchase services from 1970 through 2016.
According to Freddie Mac, mortgage rates on commitments for a 30-year, conventional, fixed-rate first mortgages averaged 3.7% for 2016third-parties outside of their affiliated broker) and the rate at September 30, 2017 was 3.8%. Although mortgage rates have increased 30 basis pointsgrowth in independent sales agent teams.
In addition, industry competition for independent sales agents has been and is expected to 3.8% as of September 30, 2017 from 3.5% as of September 2016, they continue to be at low levelsfurther complicated by historical


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standards. While this increase adversely impacts housing affordability,competitive models that do not prioritize traditional business objectives. For example, we believe that rising wages, improving consumer confidencecertain owned-brokerage competitors have investors that have historically allowed the pursuit of increases in market share over profitability, which not only exacerbates competition for independent sales agents, but places additional pressure on the share of commission income received by the agent.
This competitive environment has continued despite general business disruption due to the COVID-19 crisis and we saw a continuation of low inventory levelsdecline in market share for the mainstream housing market will result in continued favorable demand conditions and existing homesale volume growth. To the extent that mortgage rates increase, consumersfirst half of 2020 compared to full-year 2019. Competition for productive agents is expected to continue to have financing alternativesa negative impact on our homesale transaction volume and market share and to put upward pressure on the average share of commissions earned by independent sales agents. These competitive market factors also impact our franchisees and such as adjustable rate mortgagesfranchisees have and may continue to seek reduced royalty fee arrangements or shorter term mortgagesother incentives from us to offset the continued business pressures on such franchisees, which can be utilizedwould result in a reduction in royalty fees paid to obtain a lower mortgage rate than a 30-year fixed-rate mortgage.us.
Partially offsettingNon-Traditional Market Participants. While real estate brokers using historical real estate brokerage models typically compete for business primarily on the positive impactbasis of historically favorable affordabilityservices offered, brokerage commission, reputation, utilization of technology and mortgage rates are low housing inventory levels, which have beenpersonal contacts, participants pursuing non-traditional methods of marketing real estate may compete in decline overother ways, including companies that employ technologies intended to disrupt historical real estate brokerage models or minimize or eliminate the past several years. According to NAR, the inventory of existing homes for salerole traditional brokers and sales agents perform in the U.S. was 1.9 millionhomesale transaction process.
A growing number of companies are competing in non-traditional ways for a portion of the gross commission income generated by homesale transactions. For example, many iBuying business models seek to disintermediate real estate brokers and 2.0 million atindependent sales agents from buyers and sellers of homes by reducing brokerage commissions that may be earned on those transactions. In addition, the endconcentration and market power of September 2017the top listing aggregators allow them to monetize their platforms by a variety of actions, including expanding into the brokerage business, charging significant referral fees, charging listing and September 2016, respectively. The September 2017 inventory represents a national average supplydisplay fees, diluting the relationship between agents and brokers (and between agents and the consumer), tying referrals to use of 4.2 months attheir products, consolidating and leveraging data, and engaging in preferential or exclusionary practices to favor or disfavor other industry participants. These actions divert and reduce the earnings of other industry participants, including our company owned and franchised brokerages. Aggregators could intensify their current homesales pacebusiness tactics or introduce new programs that could be materially disadvantageous to our business and other brokerage participants in the industry and such tactics could further increase pressures on the profitability of our company owned and franchised brokerages and affiliated independent sales agents, reduce our franchisor service revenue and dilute our relationships with our franchisees and our and our franchisees' relationships with affiliated independent sales agents and buyers and sellers of homes.
As previously disclosed, we have received meaningful listing fees for our provision of real estate listings under agreements that were scheduled to expire in March 2022. Due to disputes between the parties, which is significantly below the 6.1 month 25-year average as of December 31, 2016. The national average supply at the then-current homesales pace for September 2016, 2015 and 2014 was 4.5 months, 4.8 months and 5.4 months, respectively.
Additional offsetting factors include the ongoing rise in home prices, conservative mortgage underwriting standards and certain homeowners having limited or negative equity in homes. Mortgage credit conditions tightened significantlyheightened during the recent housing downturn,COVID-19 crisis, these agreements were terminated during the second quarter of 2020. While the termination of these agreements had (and will have) a negative impact on our revenues and earnings, it also eliminated various obligations, which could allow us to pursue certain strategic options that were previously unavailable to us and could result in certain reduced spend. We will continue to focus efforts on lead generation and other programs designed to benefit affiliated agents and franchisees.
New Development. Realogy Brokerage Group has relationships with banks limiting credit availabilitydevelopers, primarily in major cities, in particular New York City, to more creditworthy borrowersprovide marketing and requiring larger down payments, stricter appraisal standards,brokerage services in new developments. New development closings can vary significantly from year to year due to timing matters that are outside of our control, including long cycle times and more extensive mortgage documentation. Although mortgage credit conditions appearirregular project completion timing. In addition, the new development industry has also experienced significant disruption due to be easing, mortgages remain less availablethe COVID-19 crisis. Accordingly, earnings attributable to some borrowers and it frequently takes longerthis business can fluctuate meaningfully from year to close ayear, impacting both homesale transaction due to current mortgagevolume and underwriting requirements.the share of gross commission income we realize on such transactions.

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Existing Homesales
AccordingFor the six months ended June 30, 2020 compared to the same period in 2019, NAR existing homesale transactions for 2016 increaseddecreased to 5.52.3 million homes or up 4%, compared to 2015, while homesale transactions increased 2% on a combined basis for RFG and NRT.
down 8%. For the quarterssix months ended March 31, 2017, June 30, 2017 and September 30, 2017, compared to the same periods in 2016, NAR existing homesale transactions were 1.1 million, 1.6 million and 1.5 million homes, or up 5%, up 2% and down 2%, respectively. For the periods above, RFG and NRT2020, homesale transactions on a combined basis increased 3%, increased 1%for Realogy Franchise and Brokerage Groups decreased 1%, respectively,13% compared to the same periodsperiod in 2016. During2019 due primarily to the first nine monthsimpact, starting around mid-March 2020, of the year,COVID-19 crisis, the numberimpact of homesale transactions for RFGcompetition (including on our market share), the loss of certain franchisees and NRT has continued to be challenged by inventory constraints, however for NRT there has been a shift from stabilization to growth in the high endgeographic concentration of the housing market.Realogy Brokerage Group. The annualquarterly and quarterlyannual year-over-year trends in homesale transactions are as follows:
   2017 vs. 2016 
Number of Existing HomesalesFull Year
2016 vs.
2015		 First
Quarter		 Second
Quarter		 Third
Quarter		 Fourth
Quarter
Forecast		 Full Year
Forecast
2017 vs. 2016		 
Industry            
NAR4 %(a)5%(a)2%(a)(2%)(a)(4%)(b)—%(b)
Fannie Mae (c)4 % 5% 2% (2%) (5%) —% 
Realogy            
RFG and NRT Combined2 % 3% 1% (1%)     
RFG3 % 3% 1% (1%)     
NRT— % 4% 3% —%     
rlgy-20200630_g1.jpg

rlgy-20200630_g2.jpg
_______________
(a)Historical existing homesale data is as of the most recent NAR press release, which is subject to sampling error.
(b)Forecasted existing homesale data, on a seasonally adjusted basis, is as of the most recent NAR forecast.
(c)Forecasted existing homesale data, on a seasonally adjusted basis, is as of the most recent Fannie Mae press release.
(a)Q1 and Q2 existing homesale data is as of the most recent NAR press release, which is subject to sampling error.
(b)Forecasted existing homesale data, on a seasonally adjusted basis, is as of the most recent NAR forecast.
(c)Forecasted existing homesale data, on a seasonally adjusted basis, is as of the most recent Fannie Mae press release.
As of their most recent releases, NAR is forecasting existing homesaleshomesale transactions to increase 7% in 20182021 while Fannie Mae is forecasting an increase in existing homesale transactions to increase 4% for the same period.

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Existing Homesale Price
In 2016, NAR existing homesale average price increased 4%For the six months ended June 30, 2020 compared to the same period in 2015, while average homesale price increased 2% on a combined basis for RFG and NRT.


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For the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017, compared to the same periods in 2016,2019, NAR existing homesale average price increased 5%, 5% and 4%, respectively. . For the periods above, RFG and NRTsix months ended June 30, 2020, average homesale price on a combined basis for Realogy Franchise and Brokerage Groups increased 5%, 7%, and 6%, respectively,1% compared to the same periodsperiod in 2016. The combined2019. However, as noted above, beginning in April 2020, our company owned brokerages have experienced declines in average sale price due to geography mix and lower inventory in the high-end markets. Realogy Brokerage Group's geographic concentration and exposure to the high-end of the market plus the associated competitive pressures drove the year-over-year decline in homesale price increase was duecompared to the increase in homesale transactions at the high end of the markets served by NRToverall industry. The quarterly and RFG. Both RFG and NRT homesale price also improved as a result of increased demand due to the continuation of constrained inventory levels. The annual and quarterly year-over-year trends in the price of homes are as follows:
   2017 vs. 2016 
Price of Existing HomesFull Year
2016 vs.
2015		 First
Quarter		 Second
Quarter		 Third
Quarter		 Fourth
Quarter
Forecast		 Full Year
Forecast
2017 vs. 2016		 
Industry            
NAR4 %(a)5%(a)5%(a)4%(a)5%(b)6%(b)
Fannie Mae (c)5 % 7% 6% 6% 6% 6% 
Realogy            
RFG and NRT Combined2 % 5% 7% 6%     
RFG3 % 6% 6% 6%     
NRT— % 3% 9% 4%     
rlgy-20200630_g3.jpg
rlgy-20200630_g4.jpg_______________
(a)Historical homesale price data is for existing homesale average price and is as of the most recent NAR press release.
(b)Forecasted homesale price data is for median price and is as of the most recent NAR forecast.
(c)Existing homesale price data is for median price and is as of the most recent Fannie Mae press release.
(a)Q1 and Q2 homesale price data is for existing homesale average price and is as of the most recent NAR press release.
(b)Forecasted homesale price data is for median price and is as of the most recent NAR forecast.
(c)Existing homesale price data is for median price and is as of the most recent Fannie Mae press release.
As of their most recent releases, NAR and Fannie Mae are bothis forecasting an increase in median existing homesale price of 5%to increase 3% in 2018 compared2021 while Fannie Mae is forecasting median existing homesale price to 2017.increase 1% for the same period.
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We believe that long-term demand for housing and the growth of our industry are primarily driven by the affordability of housing, the economic health of the U.S. economy, demographic trends such as population growth, the increasegenerational transitions, increases in U.S. household formation, mortgage rate levels and mortgage availability, certain tax benefits, job growth, increases in renters that qualify as homebuyers, the inherent attributes of homeownership versus renting and the influenceavailability of local housing dynamics of supply versus demand.inventory in the consumer's desired location and within the consumer's price range. At this time, mostcertain of these factors are generally trending favorably.favorably, such as mortgage rate levels and household formation, although the COVID-19 pandemic continues to materially impact the entire industry and the global economy. Factors that may negatively affect continued growth in the housing industry include:
higher mortgage rates•the severity, length and spread of the COVID-19 pandemic and the extent, duration and severity of the economic consequences stemming from the COVID-19 crisis (including continued economic contraction), including with respect to governmental regulation, changes in patterns of commerce or consumer activities and changes in consumer attitudes;
•intensifying 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 increasesthe COVID-19 crisis or otherwise);
•continued low or accelerated declines in long-term interest rates as well as reduced availability of mortgage financing;
continued insufficienthome inventory levels or stagnant and/or declining home prices;
•continued high levels of unemployment and/or declining wages or stagnant wage growth in the U.S.;
•the potential termination or substantial curtailment of one or more federal and/or state programs meant to assist businesses and lack of building of new housing leading to lower unit sales;individuals navigate COVID-19 related financial challenges;
changing attitudes towards home ownership, particularly among potential first-time homebuyers who may delay, •decreasing consumer confidence in the economy and/or decide not to, purchase homes;the residential real estate market;
•an increase in potential homebuyers with a low credit ratingratings or inability to afford down payments;
•reduced availability of mortgage financing or increasing down payment requirements or other mortgage challenges due to disrupted earnings;
•weak capital, credit and financial markets and/or the impactinstability of limited or negative equity of current homeowners, as well asfinancial institutions;
•an increase in foreclosure activity;
•a reduction in the lack of available inventory may limit their proclivity to purchase an alternative home;
reduced affordability of homes;
economic stagnation or contraction in•certain provisions of the U.S. economy;
a decline in2017 Tax Act that directly impact traditional incentives associated with home ownership levels inand may reduce the U.S.;
geopoliticalfinancial distinction between renting and economic instability; and
legislative or regulatory reform,owning a home, including but not limited to reformthose that adversely impacts the financing of the U.S. housing market or amends the Internal Revenue Code in a manner that negatively impacts home ownership such as reform that reducesreduce the amount that certain taxpayers would be allowed to deduct for home mortgage interest or state, local and property taxes.taxes as well as certain state or local tax reform, such as the "mansion tax" in New York City;

•decelerated or lack of building of new housing for homesales, increased building of new rental properties, or irregular timing of new development closings leading to lower unit sales at Realogy Brokerage Group, which has relationships with developers, primarily in major cities, to provide marketing and brokerage services in new developments;

•geopolitical and economic instability;
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Table•homeowners retaining their homes for longer periods of Contents
time;

•changing attitudes towards home ownership, particularly among potential first-time homebuyers who may delay, or decide not to, purchase a home, as well as changing preferences to rent versus purchase a home;
Many•the lack of available inventory may limit the proclivity of home owners to purchase an alternative home;
•a decline in home ownership levels in the U.S.;
•natural disasters, such as hurricanes, earthquakes, wildfires, mudslides and other events that disrupt local or regional real estate markets, including public health crises, such as pandemics and epidemics; and
•other legislative or regulatory reforms, including but not limited to reform that adversely impacts the financing of the trends impacting our businesses that derive revenue from homesales also impact U.S. housing market, changes relating to RESPA, potential reform of Fannie Mae and Freddie Mac, immigration reform, and further potential federal, state or local tax code reform (including, for example, the proposed "pied-a-terre tax" in New York City).
Cartus whichRelocation Services is a global provider of outsourced employee relocation services. In addition toimpacted by these general residential housing trends key drivers of Cartus areas well as global corporate spending on relocation services which has not returned(which continue to levels that existed priorshift to the most recent recessionlower cost relocation benefits as corporate clients engage in cost reduction initiatives and/or restructuring programs) and changes in employment relocation trends. Cartus is subject to a competitive pricing environment and lower average revenue per relocation as a result of a shift in the mix of services and number of services being delivered per move. These factors have, and may continue to, put pressure on the growth and profitability of this segment.
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While data provided by NAR and Fannie Mae are two indicators of the direction of the residential housing market, we believe that homesale statistics will continue to vary between us and NAR and Fannie Mae because:
•they use survey data and estimates in their historical reports and forecasting models, which are subject to sampling error, whereas we use data based on actual reported results;
•there are geographical differences and concentrations in the markets in which we operate versus the national market. For example, many of our company owned brokerage offices are geographically located where average homesale prices are generally higher than the national average and therefore NAR survey data will not correlate with NRT'sRealogy Brokerage Group's results;
•comparability is also impaireddiminished due to NAR’s utilization of seasonally adjusted annualized rates whereas we report actual period-over-period changes and their use of median price for their forecasts compared to our average price;
•NAR historical data is subject to periodic review and revision and these revisions have been material in the past, and could be material in the future; and
•NAR and Fannie Mae generally update their forecasts on a monthly basis and a subsequent forecast may change materially from a forecast that was previously issued.
While we believe that the industry data presented herein is derived from the most widely recognized sources for reporting U.S. residential housing market statistical data, we do not endorse or suggest reliance on this data alone.  We also note that forecasts are inherently uncertain or speculative in nature and actual results for any period could materially differ. 
KEY DRIVERS OF OUR BUSINESSES
Within RFGRealogy Franchise and NRT,Brokerage Groups, we measure operating performance using the following key operating statistics:metrics: (i) closed homesale sides, which represents either the "buy" side or the "sell" side of a homesale transaction, (ii) average homesale price, which represents the average selling price of closed homesale transactions, and (iii) average homesale broker commission rate, which represents the average commission rate earned on either the "buy" side or "sell" side of a homesale transaction.
For RFG,Realogy Franchise Group, we also use net effective royalty rateper side, which represents the average percentage of our franchisees’ commission revenues payableroyalty payment to RFG, net of volume incentives achieved.
Since 2014 we have experienced approximately a one basis point decline in theRealogy Franchise Group for each homesale transaction side taking into account royalty rates, average broker commission rate each yearrates, volume incentives achieved and we expect that overother incentives. We utilize net royalty per side as it includes the long term the average brokerage commission rates will continue to modestly decline as a resultimpact of increaseschanges in average homesale prices and, to a lesser extent, competitors providing fewer services for a reduced fee. Continuing growth in the housing market should result in an increase in our revenues, although such increases could be offset by modestly declining brokerage commission rates and competitive pressures.
In general, most of our third-party franchisees are entitled to volume incentives, which are calculated for each franchisee as a progressive percentage of each franchisee's annual gross income.  These incentives decrease during times of declining homesale transaction volumes and increase when there is a corresponding increase in homesale transaction volume.  In addition, several of our larger franchisees have a flat royalty rate. If our top franchisees, who earn higher volume incentives or have a flat royalty rate, continue to grow faster than the majority of our other franchisees, the Company's net effective royalty rate will continue to modestly decline.
Royalty fees are charged to all franchisees pursuant to the terms of the relevant franchise agreements and are included in each of the real estate brands' franchise disclosure documents. Non-standard incentives may be used as consideration for new or renewing franchisees. Most of our franchisees do not receive these non-standard incentives and in contrast to royalties and volume incentives, they are not homesale transaction based. We have accordingly excluded the non-standard incentives from the calculation of the net effective royalty rate. Had these non-standard incentives been included, the net effective royalty rate would be lower by approximately 23 and 21 basis points for the years ended December 31, 2016 and


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2015, respectively. We expect that the trend of increasing non-standard incentives by approximately 3 to 4 basis points a year will continue in the future in order to attract and retain certain large franchisees.
NRT has a significant concentration of real estate brokerage offices and transactions in geographic regions where home prices are at the higher end of the U.S. real estate market, particularly the east and west coasts, while RFG has franchised offices that are more widely dispersed across the United States. Accordingly, operating results and homesale statistics may differ between NRT and RFG based upon geographic presence and the corresponding homesale activity in each geographic region. In addition, the share of commissions earned by sales associates directly impacts the margin earned by NRT. Such share of commissions earned by sales associates varies by region and commission schedules are generally progressive to incentivize sales associates to achieve higher levels of production. We expect that they will continue to be subject to upward pressure because of the increased bargaining power of independent sales associates and teamsprice as well as more aggressive recruitmentall incentives and represents the royalty revenue impact of each incremental side.
For Realogy Brokerage Group, we also use gross commission income per side, which represents gross commission income divided by closed homesale sides. Gross commission income includes commissions earned in homesale transactions and certain other activities, taken by our competitors.
As described above under "Current Industry Trends," competition for independent sales associates in our industry has intensifiedprimarily leasing and we expect this competition will continue particularly with respectproperty management transactions. Realogy Brokerage Group, as a franchisee of Realogy Franchise Group, pays a royalty fee of approximately 6% per transaction to more productive independent sales associates which has impacted NRT's market share and results of operations, as well as RFG toRealogy Franchise Group from the commission earned on a lesser extent.  Currently, there are several different compensation models being utilized by real estate brokerages to compensate their independent sales associates.transaction. The most common models are as follows: (1) a graduatedremainder of gross commission plan, sometimes referred to asincome is split between the "traditional model" wherebroker (Realogy Brokerage Group) and the independent sales associate receives a percentage ofagent in accordance with their applicable independent contractor agreement (which specifies the brokerage commission that increases as the independent sales associate increases his or her volume of homesale transactions and the brokerage frequently provides independent sales associates with a broad set of support offerings and promotion of properties, (2) a desk rental or 100% plan, where the independent sales associate is entitled to all or nearly allportion of the broker commission and pays the broker on both a monthly and transaction basis for office space, tools, technology and support while also being responsible for the promotion of properties and other items, (3) a capped model, which generally blends aspects of the first two models described herein, and (4) a fixed transaction fee model where the sales associate is entitled to all of the broker commission and pays a fixed fee per homesale transaction and often receives very limited support from the brokerage. Most brokerages focus primarily on one compensation model though some may offer one or more of these models to their sales associates. Increasingly, independent sales associates have affiliated with brokerages that offer fewer servicesbe paid to the independent sales associates, allowing the independent sales associate to retain a greater percentage of the commission. However, there are long-term trade-offs in the level of support independent sales associates receive in areas such as marketing, technology and professional education.
While NRT has historically compensated its independent sales associates using a traditional model, utilizing elements of other models depending upon the geographic market, we are placing an even greater focus on the quality of our services and use of financial incentives to strengthen our recruiting and retention of independent sales associates and teams. These actions include a more aggressive strategy to recruit and retain high performing sales associates. In addition, there is an enhanced focus on the value proposition offered to independent sales associate teams. This strategic emphasis on recruitment and retention is drivenagent), which varies by our overall goal to sustain or grow market share in various markets and ultimately improve the Company's overall profitability. While we have seen revenue improvements directly related to these initiatives, we have experienced and expect to continue to experience pressure on costs and margin from these initiatives.
Within Cartus, we measure operating performance using the following key operating statistics: (i) initiations,agent agreement, which represent the total number of new transferees and the total number of real estate closings for affinity members and (ii) referrals, which represent the number of referrals from which we earn revenue from real estate brokers.varies by agent.
In TRG,Realogy Title Group, operating performance is evaluated using the following key metrics: (i) purchase title and closing units, which represent the number of title and closing units we process as a result of home purchases, (ii) refinance title and closing units, which represent the number of title and closing units we process as a result of homeowners refinancing their home loans, and (iii) average fee per closing unit, which represents the average fee we earn on purchase title and refinancing title sides. Results are favorably impacted by the low mortgage rate environment. An increase or decrease in homesale transactions will impact the financial results of TRG;Realogy Title Group; however, the financial results are not significantly impacted by a change in homesale price. In addition,
Realogy Leads Group, which consists of Company- and client- directed affinity programs, broker-to-broker referrals and the average mortgage rate increasedRealogy Advantage Broker Network (previously referred to as the Cartus Broker Network) was consolidated into Realogy Franchise Group during the first quarter of 2020.
For the three months ended June 30, 2020, Cartus Relocation Services had 20,567 initiations as compared to 31,977 initiations during the same period in 2019. Cartus Relocation Services earned referral fee revenue from approximately 2,937 referrals for the three months ended June 30, 2020 as compared to 4,369 referrals during the second quarter of 2019.

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For the six months ended June 30, 2020, Cartus Relocation Services had 45,616 initiations as compared to 59,311 initiations during the same period of 2019. Cartus Relocation Services earned referral fee revenue from approximately 5,588 referrals for the six months ended June 30, 2020 as compared to 7,110 referrals during the first half of 2019. Cartus Relocation Services experienced a decline in new initiations attributable to the COVID-19 pandemic in the fourthsecond quarter of 20162020 and refinancing transactions have decreased as a result. We believe that a further increase in mortgage ratesthis trend is expected to continue in the future will most likely havethird quarter of 2020, and potentially beyond but to a negative impact on refinancing titlelesser extent than what we experienced in the second quarter.
The following table presents our drivers for the three and closing units.six months ended June 30, 2020 and 2019. See "Results of Operations" below for a discussion as to how these drivers affected our business for the periods presented.
Three Months Ended June 30,Six Months Ended June 30,
20202019% Change20202019% Change
Realogy Franchise Group (a)
Closed homesale sides238,085  301,377  (21)%441,273  504,039  (12)%
Average homesale price$321,308  $318,799  1 %$321,841  $310,581  4 %
Average homesale broker commission rate2.49 %2.47 %2  bps2.48 %2.47 %1  bps
Net royalty per side$324  $331  (2)%$321  $320  — %
Realogy Brokerage Group
Closed homesale sides71,375  95,251  (25)%133,916  155,693  (14)%
Average homesale price$503,935  $540,725  (7)%$517,888  $529,543  (2)%
Average homesale broker commission rate2.43 %2.41 %2  bps2.42 %2.41 %1  bps
Gross commission income per side$12,863  $13,758  (7)%$13,206  $13,546  (3)%
Realogy Title Group
Purchase title and closing units32,028  42,202  (24)%60,752  70,246  (14)%
Refinance title and closing units17,548  5,270  233 %26,447  9,281  185 %
Average fee per closing unit$2,062  $2,356  (12)%$2,151  $2,320  (7)%
_______________
(a)Includes all franchisees except for Realogy Brokerage Group.
A decline in the number of homesale transactions andand/or decline in homesale prices could adversely affect our results of operations by: (i) reducing the royalties we receive from our franchisees, (ii) reducing the commissions our company owned brokerage operations earn, (iii) reducing the demand for our title and settlement services, (iv) reducing the referral fees we earn in our relocation services business,from affinity, broker-to-broker and the Realogy Advantage Leads Network, and (v) increasing the risk of franchisee default due to lower homesale


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volume. Our results could also be negatively affected by a decline in commission rates charged by brokers or greater commission payments to sales associates.agents or by an increase in volume or other incentives paid to franchisees.
The following table presentsSince 2014, we have experienced approximately a one basis point decline in the average homesale broker commission rate each year, which we believe has been largely attributable to increases in average homesale prices (as higher priced homes tend to have a lower broker commission) and, to a lesser extent, competitors providing fewer or similar services for a reduced fee.
Royalty fees are charged to all franchisees pursuant to the terms of the relevant franchise agreements and are included in each of the real estate brands' franchise disclosure documents. Most of our driversthird-party franchisees are subject to a 6% royalty rate and entitled to volume incentives, although a royalty fee generally equal to 5% of franchisee commission (capped at a set amount per independent sales agent per year) is applicable to franchisees operating under the "capped fee model" that was launched for our Better Homes and Gardens® Real Estate franchise business in January 2019. Volume incentives are calculated as a progressive percentage of the applicable franchisee's eligible annual gross commission income and generally result in a net or effective royalty rate ranging from 6% to 3% for the threefranchisee (prior to taking into account other incentives that may be applicable to the franchisee). Volume incentives increase or decrease as the franchisee's gross commission income generated increases or decreases, respectively. We have the right to adjust the annual volume incentive tables on an annual basis in response to changing market conditions. In addition, certain of our franchisees (including some of our largest franchisees) have a flat royalty rate of less than 6% and nine months ended September 30, 2017are not eligible for volume incentives.

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Other incentives may also be used as consideration to attract new franchisees, grow franchisees (including through independent sales agent recruitment) or extend existing franchise agreements, although in contrast to volume incentives, the majority of other incentives are not homesale transaction based.
Transaction volume growth has exceeded royalty revenue growth due primarily to the growth in gross commission income generated by our top 250 franchisees and 2016. See "Resultsour increased use of Operations" belowother sales incentives, both of which directly impact royalty revenue. Over the past several years, our top 250 franchisees have grown faster than our other franchisees through organic growth and market consolidation. If the amount of gross commission income generated by our top 250 franchisees continues to grow at a quicker pace relative to our other franchisees, we would expect our royalty revenue to continue to increase, but at a slower pace than homesale transaction volume. Likewise, our royalty revenue would continue to increase, but at a slower pace than homesale transaction volume, if the gross commission income generated by all of our franchisees grows faster than the applicable annual volume incentive table increase or if we increase our use of standard volume or other incentives. However, in the event that the gross commission income generated by our franchisees increases as a result of increased transaction volume, we would expect to recognize an increase in overall royalty payments to us.
We face significant competition from other national real estate brokerage brand franchisors for franchisees and we expect that the trend of increasing incentives will continue in the future in order to attract, retain, and help grow certain franchisees. We expect to experience downward pressures on net royalty per side during 2020, largely due to the impact of competitive market factors noted above, continued concentration among our top 250 franchisees, and the impact of affiliated franchisees of our Better Homes and Gardens® Real Estate brand moving to the "capped fee model" we adopted in 2019.
Realogy Brokerage Group has a significant concentration of real estate brokerage offices and transactions in geographic regions where home prices are at the higher end of the U.S. real estate market, particularly the east and west coasts, while Realogy Franchise Group has franchised offices that are more widely dispersed across the United States. Accordingly, operating results and homesale statistics may differ between Realogy Brokerage Group and Realogy Franchise Group based upon geographic presence and the corresponding homesale activity in each geographic region. In addition, the share of commissions earned by independent sales agents directly impacts the margin earned by Realogy Brokerage Group. Such share of commissions earned by independent sales agents varies by region and commission schedules are generally progressive to incentivize sales agents to achieve higher levels of production. Commission share has been and we expect will continue to be subject to upward pressure in favor of the independent sales agent for a discussionvariety of factors, including more aggressive recruitment and retention activities taken by us and our competitors as to how these drivers affected our business for the periods presented.well as growth in independent sales agent teams.

46
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 % Change 2017 2016 % Change
RFG (a)           
Closed homesale sides318,961
 323,176
 (1%) 866,956
 861,254
 1%
Average homesale price$292,000
 $275,325
 6% $287,558
 $270,669
 6%
Average homesale broker commission rate2.49% 2.50% (1) bps 2.50% 2.51% (1) bps
Net effective royalty rate4.42% 4.50% (8) bps 4.42% 4.50% (8) bps
Royalty per side$334
 $322
 4% $331
 $318
 4%
NRT           
Closed homesale sides95,236
 95,605
 —% 262,849
 258,163
 2%
Average homesale price$506,418
 $486,343
 4% $515,617
 $487,781
 6%
Average homesale broker commission rate2.45% 2.46% (1) bps 2.45% 2.47% (2) bps
Gross commission income per side$13,142
 $12,681
 4% $13,358
 $12,750
 5%
Cartus           
Initiations39,608
 40,556
 (2%) 126,921
 129,290
 (2%)
Referrals23,905
 25,495
 (6%) 64,392
 68,526
 (6%)
TRG           
Purchase title and closing units (b)43,764
 42,932
 2% 122,069
 116,082
 5%
Refinance title and closing units (c)6,513
 15,170
 (57%) 21,370
 36,100
 (41%)
Average fee per closing unit$2,115
 $1,824
 16% $2,092
 $1,865
 12%
_______________
(a)Includes all franchisees except for NRT.
(b)
The amounts presented for the three and nine months ended September 30, 2017 include 3,325 and 8,351 purchase units, respectively, as a result of the acquisitions completed prior to the third quarter of 2017.
(c)
The amounts presented for the three and nine months ended September 30, 2017 include 725 and 1,858 refinance units, respectively, as a result of the acquisitions completed prior to the third quarter of 2017.


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RESULTS OF OPERATIONS
Discussed below are our condensed consolidated results of operations and the results of operations for each of our reportable segments. The reportable segments presented below represent our operating segments for which separate financial information is available and which is utilized on a regular basis by our chief operating decision maker to assess performance and to allocate resources. In identifying our reportable segments, we also consider the nature of services provided by our operating segments. Management evaluates the operating results of each of our reportable segments based upon revenue and Operating EBITDA. Operating EBITDA is defined by us as net income (loss) before depreciation and amortization, interest (income) expense, net, (other than Relocation Services interest for securitization assets and securitization obligations) and income taxes, eachand other items that are not core to the operating activities of which is presentedthe Company such as restructuring charges, former parent legacy items, gains or losses on our Condensed Consolidated Statementsthe early extinguishment of Operations.debt, impairments, gains or losses on discontinued operations and gains or losses on the sale of investments or other assets. Our presentation of Operating EBITDA may not be comparable to similarly titled measures used by other companies.
Our results of operations should be read in conjunction with our other disclosures in this Item 2. including under the headings Recent Developments—COVID-19 and Current Business and Industry Trends.
Three Months Ended September June 30, 20172020 vs. Three Months EndedSeptember June 30, 20162019
Our consolidated results comprised the following:
 Three Months Ended June 30,
 20202019Change
Net revenues$1,207  $1,664  $(457) 
Total expenses1,204  1,569  (365) 
Income from continuing operations before income taxes, equity in earnings and noncontrolling interests3  95  (92) 
Income tax expense11  33  (22) 
Equity in earnings of unconsolidated entities(36) (7) (29) 
Net income from continuing operations28  69  (41) 
Net (loss) income from discontinued operations(41) 1  (42) 
Net (loss) income(13) 70  (83) 
Less: Net income attributable to noncontrolling interests(1) (1) —  
Net (loss) income attributable to Realogy Holdings and Realogy Group$(14) $69  $(83) 
 Three Months Ended September 30,
 2017 2016 Change
Net revenues$1,674
 $1,644
 $30
Total expenses (1)1,521
 1,468
 53
Income before income taxes, equity in earnings and noncontrolling interests153
 176
 (23)
Income tax expense67
 74
 (7)
Equity in earnings of unconsolidated entities(10) (5) (5)
Net income96
 107
 (11)
Less: Net income attributable to noncontrolling interests(1) (1) —
Net income attributable to Realogy Holdings and Realogy Group$95
 $106
 $(11)

_______________
(1)Total expenses for the three months ended September 30, 2017 includes $2 million of restructuring charges, $1 million related to loss on the early extinguishment of debt and a net cost of $1 million of former parent legacy items. Total expenses for the three months ended September 30, 2016 includes $9 million of restructuring charges partially offset by $5 million of gains related to mark-to-market adjustments for our interest rate swaps.
Net revenues increased $30decreased $457 million or 2%27% for the three months ended SeptemberJune 30, 20172020 compared with the three months ended SeptemberJune 30, 2016, principally due to increases in gross commission income and franchise fees as a result of higher2019 driven bylower homesale transaction volume of 4% on a combined basis for NRTat both RealogyFranchise and RFG.Brokerage Groups primarily due to the COVID-19 pandemic.
Total expenses increased $53decreased $365 million or 4%23% for the second quarter of 2020 compared to the second quarter of 2019 primarily due to:
•a $53$270 million increasedecrease in commission and other sales associate-relatedagent-related costs due to an increase inprimarily as a result of the impact of lower homesale transaction volume at NRTRealogy Brokerage Group due to the COVID-19 pandemic, partially offset by higher agent commission costs primarily driven by retention efforts and a shift in mix as more productive, higher sales commissions paidcompensated agents completed a higher percentage of homesale transactions;
•a $66 million decrease in operating and general and administrative expenses primarily due to its independent sales associates;lower employee-related, occupancy and other operating costs as a result of COVID-19 related cost savings initiatives;
•a $5$29 million increasedecrease in marketing expenses;expense primarily due to not holding in person meetings and conferences and lower advertising costs due to the COVID-19 pandemic in the second quarter of 2020 compared to the second quarter of 2019; and
•a $4$21 million net increasedecrease in interest expense to $41 million in the third quarter of 2017 from $37 million in the third quarter of 2016primarily due to the absence ofa $16 million decline in expense related to our mark-to-market adjustments for our interest rate swaps that resulted in gainslosses of $5$8 million during the thirdsecond quarter of 2016 less2020 compared to losses of $24 million during the second quarter of 2019 and a $1decrease in interest expense due to LIBOR rate decreases,
partially offset by;
•an $8 million decreaseloss on the early extinguishment of debt during the second quarter of 2020 as a result of a reductionthe refinancing transactions in total outstanding indebtedness and a lower weighted average interest rate.June 2020;
The expense increases were partially offset by:

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•lease asset impairments of $7 million decreaseduring the second quarter of 2020 compared to $2 million during the second quarter of 2019; and
•a $5 million increase in restructuring costs.
Equity in earnings were $36 million during the second quarter of 2020 compared to earnings of $7 million during the second quarter of 2019 primarily due to improvement in earnings of Guaranteed Rate Affinity at Realogy Title Group. Equity in earnings for Guaranteed Rate Affinity increased by $29 million from $6 million in the second quarter of 2019 to $35 million in the second quarter of 2020 as a result of the low mortgage rate environment and improved margins in the venture. Equity in earnings for Realogy Title Group's other equity method investments remained flat at $1 million during the second quarter of 2020 and 2019.
During the second quarter of 2020, we incurred $14 million of restructuring costs primarily related to the Company's business optimization plan;restructuring program focused on office consolidation and
a $2 million decrease in operating and general and administrative expenses primarily driven by:
◦a $10 million increase in other expenses including professional fees and occupancy costs; and
◦a $1 million increase in employee-related costs primarily related to acquisitions;
partially offset by:
◦a $10 million decrease in variable operating costs at TRG primarily due to lower refinance and underwriter volume.
Earnings from equity investments were $10 million during the third quarter of 2017 compared instituting operational efficiencies to $5 million during the third quarter of 2016. The $5 million increase is equity earnings is primarily due to:


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an $8 million increase in equity earnings at NRT as a result of $14 million of earnings from the sale of the first two phases of PHH Home Loans' assets to Guaranteed Rate Affinity, partially offset by $2 million of exit costs. In addition, there was a $4 million decrease in earnings due to lower operating results as a result of lower origination volume, compressed industry margins and lower results due to the level of organizational change associated with the transition to the operations of Guaranteed Rate Affinity.
The increase in equity earnings was partially offset by:
a $3 million decrease in equity earnings at TRG primarily related to costs associated with the start up of operations of Guaranteed Rate Affinity, including $1 million of amortization of intangible assets recorded in purchase accounting.
As part of the business optimization initiative the Company began in the fourth quarter of 2015, we incurred $2 million of restructuring costs in the third quarter of 2017 compared to $9 million of costs in the third quarter of 2016.drive profitability. The Company expects to incur an additional $4 million related to initiatives still in progress bringing the estimated total cost of the initiativeplan which began in the first quarter of 2019 to be $62 million.approximately $81 million, with $61 million incurred to date. See Note 6, "Restructuring Costs", into the Condensed Consolidated Financial Statements for additional information.
The Company's provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against the income or loss before income taxes for the period.  In addition, non-recurring or discrete items are recorded in the period in which they occur.  The provision for income taxes was $67an expense of $11 million for the three months ended SeptemberJune 30, 20172020 compared to $74an expense of $33 million for the three months ended SeptemberJune 30, 2016. Our federal and state blended statutory rate is estimated to be 40% for 2017 and our full year effective tax rate is estimated to be 41%.2019. Our effective tax rate was 41%28% and 32% for both the three months ended SeptemberJune 30, 20172020 and SeptemberJune 30, 2016.2019, respectively. The effective tax rate for the three months ended June 30, 2020 was primarily impacted by the tax impact of vesting equity awards with a market value lower than at the date of grant.
The following table reflects the results of each of our reportable segments during the three months ended SeptemberJune 30, 20172020 and 2016:2019:
 Revenues (a)$ Change%
Change		Operating EBITDA$ Change%
Change		Operating EBITDA MarginChange
 202020192020201920202019
Realogy Franchise Group$179  $260  $(81) (31)%$122  $180  $(58) (32)%68 %69 %(1) 
Realogy Brokerage Group933  1,331  (398) (30) 15  47  (32) (68) 2  4  (2) 
Realogy Title Group160  160  —  —  61  32  29  9138  20  18  
Corporate and Other(65) (87) 22  *(26) (24) (2) *
Total continuing operations$1,207  $1,664  $(457) (27)%$172  $235  $(63) (27)%14 %14 %—  
Less: Depreciation and amortization46  43  
Interest expense, net59  80  
Income tax expense11  33  
Restructuring costs, net (b)14  9  
Impairments (c)7  2  
Loss on the early extinguishment of debt (d)8  —  
Net income from continuing operations attributable to Realogy Holdings and Realogy Group27  68  
Net (loss) income from discontinued operations(41) 1  
Net (loss) income attributable to Realogy Holdings and Realogy Group$(14) $69  
 Revenues (a) 
%
Change
 EBITDA (b) 
%
Change
 EBITDA Margin Change
 2017 2016  2017 2016  2017 2016 
RFG$224
 $215
 4 % $159
 $153
 4 % 71% 71% —
NRT1,267
 1,231
 3
 62
 74
 (16) 5
 6
 (1)
Cartus111
 116
 (4) 37
 40
 (8) 33
 34
 (1)
TRG154
 164
 (6) 21
 23
 (9) 14
 14
 —
Corporate and Other(82) (82) *
 (25) (20) *
      
Total Company$1,674
 $1,644
 2 % $254
 $270
 (6%) 15% 16% (1)
Less: Depreciation and amortization (c) 51
 53
        
Interest expense, net 41
 37
        
Income tax expense 67
 74
        
Net income attributable to Realogy Holdings and Realogy Group $95
 $106
        
_______________
_______________* not meaningful
(a)Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by Realogy Brokerage Group of $65 million and $87 million during the three months ended June 30, 2020 and 2019, respectively.
*not meaningful
(a)Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by NRT of $82 million during both the three months ended September 30, 2017 and September 30, 2016.
(b)EBITDA for the three months ended September 30, 2017 includes $1 million related to loss on the early extinguishment of debt and a net cost of $1 million of former parent legacy items in Corporate and Other and $2 million of restructuring charges in NRT.
EBITDA(b)Restructuring charges incurred for the three months ended SeptemberJune 30, 2016 includes $92020 include $12 million of restructuringat Realogy Brokerage Group and $2 million at Realogy Title Group. Restructuring charges reflected above as follows:incurred for the three months ended June 30, 2019 include $1 million at Realogy Franchise Group, $6 million in NRT,at Realogy Brokerage Group, $1 million in RFG, $1 million in Cartusat Realogy Title Group and $1 million at Corporate and Other.
(c)Impairments for the three months ended June 30, 2020 and 2019 relate to lease asset impairments.
(d)Loss on the early extinguishment of debt is recorded in TRG.Corporate and Other.
(c)Depreciation and amortization for the three months ended September 30, 2017 includes $1 million of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in earnings of unconsolidated entities" line on the Condensed Consolidated Statement of Operations.

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As described in the aforementioned table, Operating EBITDA margin for "Total Company"continuing operations" expressed as a percentage of revenues decreased 1 percentage point to 15% from 16%remained flat at 14% for the three months ended SeptemberJune 30, 20172020 compared to the same period in 2016.2019. On a segment basis, RFG's margin remained flat at 71%. NRT'sRealogy Franchise Group's margin decreased 1 percentage point to 5%68% from 6%69% primarily due a decrease in revenue and higher bad debt expense related to the early termination of third party listing fee agreements, partially offset by a decrease in employee and other operating costs primarily as a result of COVID-19 related cost savings initiatives. Realogy Brokerage Group's margin decreased 2 percentage points from 4% to 2% primarily due to higher salesagent commission percentages paid to its independent sales associatescosts primarily driven by retention efforts and a shift in mix as more productive, higher compensated agents completed a higher percentage of homesale transactions, partially offset by lower restructuring costsoperating and employee expenses primarily due to COVID-19 related cost savings initiatives. Realogy Title Group's margin increased 18 percentage points to 38% from 20% primarily as a result of an increase in equity in earnings relatedof Guaranteed Rate Affinity as a result of the low mortgage rate environment and improved margins in the venture.
Realogy Franchise and Brokerage Groups on a Combined Basis
The following table reflects Realogy Franchise and Brokerage Group's results before the intercompany royalties and marketing fees as well as on a combined basis to its equity investment in PHH Home Loansshow the Operating EBITDA contribution of these business segments to the overall Operating EBITDA of the Company. The Operating EBITDA margin for the combined segments decreased 2 percentage points from 15% to 13% primarily due to lower transaction volume during the thirdsecond quarter of 20172020 compared to the second quarter of 2019:
 Revenues$ Change%
Change		Operating EBITDA$ Change%
Change		Operating EBITDA MarginChange
 202020192020201920202019
Realogy Franchise Group (a)$114  $173  (59) (34) $57  $93  (36) (39) 50 %54 %(4) 
Realogy Brokerage Group (a)933  1,331  (398) (30) 80  134  (54) (40) 9  10  (1) 
Realogy Franchise and Brokerage Groups Combined$1,047  $1,504  (457) (30) $137  $227  (90) (40) 13 %15 %(2) 
_______________
(a)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 $65 million and $87 million during the three months ended June 30, 2020 and 2019, respectively.
Realogy Franchise Group
Revenues decreased $81 million to $179 million and Operating EBITDA decreased $58 million to $122 million for the three months ended June 30, 2020 compared with the same period in 2019.
Revenues decreased $81 million primarily as a result of:
•a $23 million decrease in third-party domestic franchisee royalty revenue primarily due to a 20% decrease in homesale transaction volume at Realogy Franchise Group which consisted of a 21% decrease in existing homesale transactions, partially offset by a 1% increase in average homesale price;
•a $21 million decrease in intercompany royalties received from Realogy Brokerage Group;
•a $15 million decrease in registration and brand marketing fund revenue (associated with the waiver of marketing fees from affiliates in the quarter), which had a related expense decrease of $18 million resulting in a $3 million net positive impact on Operating EBITDA, due to not holding in person meetings and conferences and lower advertising costs due to the COVID-19 pandemic in the second quarter of 2020 compared to the same period in 2016. Cartus' margin decreased 1 percentage point to 33% from 34%2019;
•a $12 million decrease in lead referral revenues driven by lower volume and referral transactions primarily due


40
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to lower international revenues. TRG's margin remained flat at 14% due to losses from equity investments duringthe USAA affinity program which ceased new enrollments in the third quarter of 2017 compared2019;
•a $6 million decrease in revenue related to earningsthe early termination of third party listing fee agreements; and
•a $4 million decrease in other revenue.
Realogy Franchise Group revenue includes intercompany royalties received from equity investmentsRealogy Brokerage Group of $63 million and $84 million during the thirdsecond quarter of 20162020 and 2019, respectively, which are eliminated in consolidation against the expense reflected in Realogy Brokerage Group's results.

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The $58 million decrease in Operating EBITDA was primarily due to costs associated with the start up$81 million decrease in revenues discussed above and $8 million of operationshigher bad debt expense primarily related to the early termination of Guaranteed Rate Affinity,third party listing fee agreements. These Operating EBITDA decreases were partially offset by the reversal$18 million decrease in registration and brand marketing fund expense discussed above and a $13 million decrease in employee and other operating costs principally due to COVID-19 related cost savings initiatives and the discontinuation of a legal reserve.the USAA affinity program.
Corporate and Other EBITDA for the three months ended September 30, 2017 declined $5
Realogy Brokerage Group
Revenues decreased $398 million to negative $25$933 million primarily dueand Operating EBITDA decreased $32 million to a $2 million increase in employee costs due to higher employee incentive accruals and investments in technology development, a $3 million increase in professional fees supporting strategic initiatives, $1 million related to loss on the early extinguishment of debt as a result of the reduction in the Unsecured Letter of Credit Facility and a net cost of $1 million of former parent legacy items during the third quarter of 2017 compared to the third quarter of 2016.
EBITDA before restructuring charges was $256$15 million for the three months ended SeptemberJune 30, 2017 compared to $279 million for the three months ended September 30, 2016. EBITDA before restructuring charges by reportable segment for the three months ended September 30, 2017 was as follows:
 Three Months Ended September 30,  
 2017 2016  
 EBITDA Restructuring Charges EBITDA Before Restructuring EBITDA Before Restructuring %
Change
RFG$159
 $—
 $159
 $154
 3 %
NRT62
 2
 64
 80
 (20)
Cartus37
 —
 37
 41
 (10)
TRG21
 —
 21
 24
 (13)
Corporate and Other(25) —
 (25) (20) *
Total Company$254
 $2
 $256
 $279
 (8%)
_______________
*not meaningful
The following table reflects RFG and NRT results on a combined basis for the third quarter of 2017 compared to the third quarter of 2016. The EBITDA before restructuring margin for the combined segments decreased 1 percentage point from 17% to 16% due primarily to higher sales commission percentages paid to NRT's independent sales associates:
 Revenues (a) 
%
Change
 EBITDA Before Restructuring (b) 
%
Change
 Margin Change
 2017 2016  2017 2016  2017 2016 
RFG and NRT Combined$1,409
 $1,364
 3% $223
 $234
 (5%) 16% 17% (1)
_______________
(a)Excludes transactions between segments, which consists of intercompany royalties and marketing fees paid by NRT to RFG of $82 million during both the three months ended September 30, 2017 and 2016.
(b)EBITDA for the combined RFG and NRT segments excludes $2 million and $7 million of restructuring charges for the three months ended September 30, 2017 and 2016, respectively.
Real Estate Franchise Services (RFG)
Revenues increased $9 million to $224 million and EBITDA increased $6 million to $159 million for the three months ended September 30, 20172020 compared with the same period in 2016.2019.
The increase in revenue decrease of $398 million was primarily driven by a $230% decrease in homesale transaction volume at our Realogy Brokerage Group due to the COVID-19 pandemic which consisted of a 25% decrease in existing homesale transactions and a 7% decrease in average homesale price.
Operating EBITDA decreased $32 million increase in third-party domestic franchisee royalty revenueprimarily due to a 6% increase in the average homesale price, partially offset by a 1% decrease in the number of homesale transactions including the negative impact attributable to regional market disruption due to hurricanes in the third quarter of 2017, and a lower net effective royalty rate. Revenue also increased due to a $2 million increase in royalties received from NRT as a result of volume increases at NRT, a $3 million increase in other revenue primarily due to brand conferences and franchisee events and a $2 million increase in international revenues.
The intercompany royalties received from NRT of $81 million and $79 million during the third quarter of 2017 and 2016, respectively, are eliminated in consolidation to avoid the revenue from being double counted in NRT and RFG. See "Company Owned Real Estate Brokerage Services" for a discussion of the drivers related to intercompany royalties paid to RFG.


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The $6 million increase in EBITDA was principally due to the $9 million increase in revenues discussed above and the absence of $1 million of restructuring charges incurred in the third quarter of 2016, partially offset by a $2 million increase in expenses related to the brand conferences and franchisee events.
Company Owned Real Estate Brokerage Services (NRT)
Revenues increased $36 million to $1,267 million and EBITDA decreased $12 million to $62 million for the three months ended September 30, 2017 compared with the same period in 2016.
The revenue increase of $36 million was comprised of a $19 million increase in commission income earned on homesale transactions by our existing brokerage operations and a $17 million increase in commission income earned from acquisitions. The increase was driven by a 4% increase in the average price of homes, partially offset by a 1 basis point decrease in the average broker commission rate. The number of homesale transactions remained flat in spite of the negative impact on homesale transaction volume attributable to the market disruption in Texas and Florida due to the hurricanes during the third quarter of 2017. We believe our positive revenue growth is attributable to the recruiting and organic growth focus by NRT management as well as stabilization in the high end of the housing market. The stabilization at the high end of the housing market had an adverse impact on the average homesale broker commission rate. In addition, homesale price is continuing to increase due to continued constrained inventory levels across the lower and mid price points in the markets served by NRT.
EBITDA decreased $12 million primarily due to:
a $53 million increase in commission expenses paid to independent sales associates from $834 million in the third quarter of 2016 to $887 million in the third quarter of 2017. The $53 million increase is comprised of a $41 million increase in commission expense due to our existing brokerage operations and was driven by the impact of initiatives focused on growing and retaining our productive independent sales associate base and higher homesale transaction volume, as well as a $12 million increase in commission expense related to acquisitions. The $53 million increase in commission expense was significantly impacted by the mix of business as approximately 70% of the increase was due to higher homesale transaction volume in the west region where we pay a greater proportion of commissions to independent sales associates;
a $7 million increase in other costs including occupancy costs;
a $2 million increase in marketing expenses including the effect of acquisitions; and
a $2 million increase in royalties paid to RFG from $79 million in the third quarter of 2016 to $81 million in the third quarter of 2017.
These EBITDA decreases were partially offset by:
the $36 million increase in revenues discussed above;
an $8 million increase in earnings for our equity method investment in PHH Home Loans for the third quarter of 2017 compared to the third quarter 2016 as a result of $14 million of earnings from the sale of the first two phases of PHH Home Loans' assets to Guaranteed Rate Affinity partially offset by $2 million of exit costs. In addition, there was a $4 million decrease in earnings due to lower operating results as a result of lower origination volume, compressed industry margins and lower results due to the level of organizational change associated with the transition of the operations to Guaranteed Rate Affinity;
a $4 million decrease in restructuring costs related to the Company's business optimization plan from $6 million in the third quarter of 2016 to $2 million in the third quarter of 2017; and
a $3 million decrease in employee-related costs due to a $5 million decrease primarily related to expense reduction initiatives offset by a $2 million increase in costs attributable to acquisitions.
Relocation Services (Cartus)
Revenues decreased $5 million to $111 million and EBITDA decreased $3 million to $37 million for the three months ended September 30, 2017 compared with the same period in 2016.
Revenues decreased $5 million primarily as a result of a $3 million decrease in other revenue due to lower volume and a $2 million decrease in international revenue as a result of an increasingly higher percentage of clients reducing their global relocation activity.
EBITDA decreased $3 million as a result of the $5$398 million decrease in revenues discussed above, partially offset by by:
•a $1$270 million decrease in employee relatedcommission expenses paid to independent sales agents from $955 million in the second quarter of 2019 to $685 million in the second quarter of 2020. Commission expense decreased primarily as a result of the impact of lower homesale transaction volume as discussed above, partially offset by higher agent commission costs primarily driven by retention efforts and a shift in mix as more productive, higher compensated agents completed a higher percentage of homesale transactions;
•a $58 million decrease in employee-related, occupancy costs and other operating costs due primarily to COVID-19 related cost savings initiatives;
•a $21 million decrease in royalties paid to Realogy Franchise Group from $84 million in the absence of $1 million of restructuring costs incurred during the thirdsecond quarter of 2016.2019 to $63 million in the second quarter of 2020 associated with the homesale transaction volume decline as described above; and
•a $17 million decrease in marketing expense due to lower advertising costs as a result of the COVID-19 pandemic.
Realogy Title and Settlement Services (TRG)Group
Revenues decreased $10remained flat at $160 million and Operating EBITDA increased $29 million to $154 million and EBITDA decreased $2 million to $21$61 million for the three months ended SeptemberJune 30, 20172020 compared with the same period in 2016.2019.
The decrease in revenues wasRevenues remained flat primarily as a result of a $6 million decrease in refinancing revenue, which was the primary driver of an $8 million decrease of underwriter revenue, partially offset by a $7$19 million increase in resalerefinance revenue related to acquisitions. The overall decline in revenue was due to a decreasean increase in activity in the refinance market and the negativea $10 million increase in underwriter revenue with unaffiliated agents, which had a $1 million net positive impact attributable to regional market disruptionon Operating EBITDA due to hurricanesthe related expense increase of $9 million. The revenue increases were offset by a $27 million decrease in resale revenue due to a decline in purchase transactions as a result of the COVID-19 pandemic.
Operating EBITDA increased $29 million primarily as a result of an increase in equity in earnings related to Guaranteed Rate Affinity due to the favorable mortgage rate environment and improved margins in the venture. The $9 million increase in underwriter expense with unaffiliated agents discussed above was offset by a decrease in employee and other operating costs due to COVID-19 related costs savings initiatives.
Discontinued Operations - Cartus Relocation
Revenues for Cartus Relocation Services decreased $23 million to $48 million from $71 million and Operating EBITDA decreased $7 million to $3 million from $10 million for the three months ended June 30, 2020 compared with the same period in 2019.
Revenues decreased $23 million primarily as a result of a $10 million decrease in international revenue due to lower volume and lost business as well as a $7 million decrease in referral revenue and a $7 million decrease in other revenue, both of which were primarily driven by lower volume. Beginning in the second half of March 2020, Cartus Relocation Services experienced a decline in new initiations due to the COVID-19 pandemic which continued through the second quarter of 2020 and this trend is expected to continue in the third quarter of 2017.2020 and potentially beyond but to a lesser extent than what we experienced in the second quarter.

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Operating EBITDA decreased $2$7 million as a result ofdue to the $10 millionrevenue decrease in revenues discussed above, an increase of $2 million in employee-related costs primarily related to acquisitions and a $2 million decrease in earnings from equity investments related to costs associated with the start up of operations of Guaranteed Rate Affinity during the third quarter of 2017. These decreases were mostlypartially offset by a $10 million decrease in variableemployee and other operating costs primarily due to lower refinancing and underwriter volume and $2 millionCOVID-19 related to the reversal of a legal reserve.cost savings initiatives.
NineSix Months Ended SeptemberJune 30, 20172020 vs. NineSix Months Ended SeptemberJune 30, 20162019
Our consolidated results comprised the following:
 Six Months Ended June 30,
 20202019Change
Net revenues$2,323  $2,718  $(395) 
Total expenses2,896  2,741  155  
Loss from continuing operations before income taxes, equity in earnings and noncontrolling interests(573) (23) (550) 
Income tax (benefit) expense(121) 1  (122) 
Equity in earnings of unconsolidated entities(45) (8) (37) 
Net loss from continuing operations(407) (16) (391) 
Net loss from discontinued operations(68) (13) (55) 
Net loss(475) (29) (446) 
Less: Net income attributable to noncontrolling interests(1) (1) —  
Net loss attributable to Realogy Holdings and Realogy Group$(476) $(30) $(446) 
 Nine Months Ended September 30,
 2017 2016 Change
Net revenues$4,670
 $4,440
 $230
Total expenses (1)4,368
 4,177
 191
Income before income taxes, equity in earnings and noncontrolling interests302
 263
 39
Income tax expense131
 114
 17
Equity in earnings of unconsolidated entities(7) (10) 3
Net income178
 159
 19
Less: Net income attributable to noncontrolling interests(2) (3) 1
Net income attributable to Realogy Holdings and Realogy Group$176
 $156
 $20

_______________
(1)Total expenses for the nine months ended September 30, 2017 includes $9 million of restructuring charges, an $8 million expense related to the settlement of the Strader legal matter, $5 million related to losses on the early extinguishment of debt and $4 million of losses related to mark-to-market adjustments for our interest rate swaps, partially offset by a net benefit of $10 million of former parent legacy items. Total expenses for the nine months ended September 30, 2016 includes $40 million of losses related to mark-to-market adjustments for our interest rate swaps, $30 million of restructuring charges and a net cost of $1 million of former parent legacy items.
Net revenues increased $230decreased $395 million or 5%15% for the ninesix months ended SeptemberJune 30, 20172020 compared with the same period in 2016, principally due to increases in gross commission income and franchise fees as a result of asix months ended June 30, 2019 driven bylower homesale transaction volume increase of 7% on a combined basis for NRTat both RealogyFranchise and RFG.Brokerage Groups primarily due to the COVID-19 pandemic.
Total expenses increased $191$155 million or 5%6% for the first half of 2020 compared to the first half of 2019 primarily due to:
•impairments of $454 million including a $206goodwill impairment charge of $413 million which reduced the net carrying value of Realogy Brokerage Group by $314 million after accounting for the related income tax benefit of $99 million, an impairment charge of $30 million which reduced the carrying value of trademarks at Realogy Franchise Group (see Note 3, "Goodwill and Intangible Assets", to the Condensed Consolidated Financial Statements for additional information) and $11 million related to lease asset impairments;
•a $17 million net increase in interest expense primarily due to a $21 million net expense related to our mark-to-market adjustments for our interest rate swaps that resulted in losses of $59 million for the six months ended June 30, 2020 compared to losses of $38 million during the same period of 2019, partially offset by a decrease in interest expense due to LIBOR rate decreases; and
•a $7 million increase in restructuring costs,
partially offset by;
•a $215 million decrease in commission and other sales associate-relatedagent-related costs due to an increase inprimarily as a result of the impact of lower homesale transaction volume at NRTRealogy Brokerage Group due to the COVID-19 pandemic, partially offset by higher agent commission costs primarily driven by retention efforts and a shift in mix as more productive, higher sales commissions paid to its independent sales associates;compensated agents completed a higher percentage of homesale transactions;
•a $39$77 million increasedecrease in operating and general and administrative expenses primarily driven by:due to lower employee-related, occupancy and other operating costs as a result of COVID-19 related cost savings initiatives; and
◦$24 million of additional employee-related costs associated with acquisitions;
◦a $24 million increase in other expenses including professional fees and occupancy costs; and
◦an $8 million expense related to the settlement of the Strader legal matter in the second quarter of 2017;
partially offset by:
◦a $7•a $38 million decrease in variable operating costs at TRG primarily due to lower refinance and underwriter volume;
a $14 million increase in marketing expenses;expense primarily due to not holding in person meetings and
$5 million related conferences and lower advertising costs due to the losses onCOVID-19 pandemic in the early extinguishmentfirst half of debt2020 compared to the first half of 2019.
Equity in earnings were $45 million for the six months ended June 30, 2020 compared to earnings of $8 million during the same period of 2019 primarily due to an improvement in earnings of Guaranteed Rate Affinity at Realogy Title Group. Equity in earnings for Guaranteed Rate Affinity increased by $37 million from $7 million in the first half of 2019 to $44 million in the first half of 2020 as a result of the refinancing transaction completedlow mortgage rate environment and improved margins in the venture. Equity in earnings for Realogy Title Group's other equity method investments remained flat at $1 million during the first half of 2020 and 2019.
During the six months ended June 30, 2020, we incurred $25 million of restructuring costs primarily related to the Company's restructuring program focused on office consolidation and instituting operational efficiencies to drive

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profitability. The Company expects the estimated total cost of the plan which began in the first quarter of 2017.
The expense increases were partially offset by:


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a $422019 to be approximately $81 million, net decrease in interest expensewith $61 million incurred to $127 million for the nine months ended September 30, 2017 from $169 million for the nine months ended September 30, 2016. Mark-to-market adjustments for our interest rate swaps resulted in losses of $4 million for the nine months ended September 30, 2017 compared to losses of $40 million in the same period of 2016. Before the mark-to-market adjustments for our interest rate swaps, interest expense decreased $6 million to $123 million for the nine months ended September 30, 2017 from $129 million for the nine months ended September 30, 2016 as a result of a reduction in total outstanding indebtedness and a lower weighted average interest rate;
a $21 million decrease in restructuring costs related to the Company's business optimization plan (seedate. See Note 6, "Restructuring Costs", into the Condensed Consolidated Financial Statements for additional information); andinformation.
an $11 million increase in the net benefit of former parent legacy items primarily as a result of the settlement of a Cendant legacy tax matter.
Earnings from equity investments were $7 million for the nine months ended September 30, 2017 compared to $10 million for the nine months ended September 30, 2016. The $3 million decrease in earnings is primarily due to:
a $4 million decrease in equity earnings at TRG primarily related to costs associated with the start up of operations of Guaranteed Rate Affinity, including $1 million of amortization of intangible assets recorded in purchase accounting.
The decrease in equity earnings was partially offset by:
a $1 million increase in equity earnings at NRT as a result of $14 million of earnings from the first two phases of the sale of PHH Home Loans' assets to Guaranteed Rate Affinity, partially offset by $5 million of exit costs. In addition, there was a $8 million decrease in earnings due to lower operating results as a result of lower origination volume, compressed industry margins and lower results due to the level of organizational change associated with the transition of the operations to Guaranteed Rate Affinity.
The Company's provision for income taxes in interim periods is computed by applying its estimated annual effective tax rate against the income or loss before income taxes for the period.  In addition, non-recurring or discrete items are recorded in the period in which they occur.  The provision for income taxes was $131a benefit of $121 million for the ninesix months ended SeptemberJune 30, 20172020 compared to $114an expense of $1 million for the ninesix months ended SeptemberJune 30, 2016. Our federal and state blended statutory rate is estimated to be 40% for 2017 and our full year effective tax rate is estimated to be 41%.2019. Our effective tax rate was 42%23% and negative 7% for both the ninesix months ended SeptemberJune 30, 20172020 and SeptemberJune 30, 2016.2019, respectively. The effective tax rate in each reporting periodfor the six months ended June 30, 2020 was primarily impacted by a discrete itemitems in the first half of 2020 related to the goodwill impairment charge and equity awards for which the market value at vesting was lower than at the date of grant.
The following table reflects the results of each of our reportable segments during the ninesix months ended SeptemberJune 30, 20172020 and 2016:2019:
 Revenues (a)$ Change%
Change		Operating EBITDA$ Change%
Change		Operating EBITDA MarginChange
 202020192020201920202019
Realogy Franchise Group$347  $439  $(92) (21)%$223  $278  $(55) (20)%64 %63 %1  
Realogy Brokerage Group1,802  2,147  (345) (16) (36) (15) (21) (140) (2) (1) (1) 
Realogy Title Group297  274  23  8  73  23  50  21725  8  17  
Corporate and Other(123) (142) 19  *(51) (49) (2) *
Total continuing operations$2,323  $2,718  $(395) (15)%$209  $237  $(28) (12)%9 %9 %—  
Less: Depreciation and amortization91  84  
Interest expense, net160  143  
Income tax (benefit) expense(121) 1  
Restructuring costs, net (b)25  18  
Impairments (c)454  3  
Loss on the early extinguishment of debt (d)8  5  
Net loss from continuing operations attributable to Realogy Holdings and Realogy Group(408) (17) 
Net loss from discontinued operations(68) (13) 
Net loss attributable to Realogy Holdings and Realogy Group$(476) $(30) 
 Revenues (a) 
%
Change
 EBITDA (b) 
%
Change
 EBITDA Margin Change
 2017 2016  2017 2016  2017 2016 
RFG$631
 $593
 6 % $427
 $394
 8 % 68% 66% 2
NRT3,556
 3,340
 6
 113
 131
 (14) 3
 4
 (1)
Cartus290
 308
 (6) 65
 74
 (12) 22
 24
 (2)
TRG431
 424
 2
 49
 49
 —
 11
 12
 (1)
Corporate and Other(238) (225) *
 (70) (60) *
      
Total Company$4,670
 $4,440
 5 % $584
 $588
 (1)% 13% 13% —
Less: Depreciation and amortization (c) 150
 149
        
Interest expense, net 127
 169
        
Income tax expense 131
 114
        
Net income attributable to Realogy Holdings and Realogy Group $176
 $156
        
_______________
_______________* not meaningful
(a)Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by Realogy Brokerage Group of $123 million and $142 million during the six months ended June 30, 2020 and 2019, respectively.
*not meaningful
(a)Includes the elimination of transactions between segments, which consists of intercompany royalties and marketing fees paid by NRT of $238 million and $225 million during the nine months ended September 30, 2017 and September 30, 2016, respectively.
(b)EBITDA for the nine months ended September 30, 2017 includes an $8 million expense related to the settlement of the Strader legal matter and $5 million related to losses on the early extinguishment of debt, partially offset by a net benefit of $10 million of former parent legacy items in Corporate and Other, and $9 million of restructuring charges discussed further below.
EBITDA(b)Restructuring charges incurred for the ninesix months ended SeptemberJune 30, 2016 includes2020 include $1 millionat Realogy Franchise Group, $21 million at Realogy Brokerage Group and$3 million at Realogy Title Group. Restructuring charges incurred for the six months ended June 30, 2019 include $1 million at Realogy Franchise Group, $10 million at Realogy Brokerage Group, $2 million at Realogy Title Group and $5 million at Corporate and Other.
(c)Impairments for the six months ended June 30, 2020 include a goodwill impairment charge of $413 million which reduced the net carrying value of Realogy Brokerage Group by $314 million after accounting for the related income tax benefit of $99 million, an impairment charge of $30 million which reduced the carrying value of restructuring charges reflected above as follows: $15trademarks at Realogy Franchise Group and $11 million in NRT, $6 millionrelated to lease asset impairments. Impairments for the six months ended June 30, 2019 relate to lease asset impairments.
(d)Loss on the early extinguishment of debt is recorded in Corporate and Other, $4 million in Cartus and $4 million in RFG, and a net cost of $1 million of former parent legacy items included in Corporate and Other.


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(c)Depreciation and amortization for the nine months ended September 30, 2017 includes $1 million of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in earnings of unconsolidated entities" line on the Condensed Consolidated Statement of Operations.
As described in the aforementioned table, Operating EBITDA margin for "Total Company"continuing operations" expressed as a percentage of revenues remained flat at 13%9% for the ninesix months ended SeptemberJune 30, 20172020 compared to the same period in 2016.2019. On a segment basis, RFG'sRealogy Franchise Group's margin increased 21 percentage pointspoint to 68%64% from 66%63% primarily due to an increasea decrease in homesale transaction volumeemployee and lower restructuring costs. NRT'sother operating costs primarily as a result of COVID-19 related cost savings initiatives, partially offset by a decrease in revenue related to the early termination of third party listing fee agreements. Realogy Brokerage Group's margin decreased 1 percentage point from negative 1% to 3% from 4%negative 2% primarily due to higher salesagent commission percentages paid to its independent sales associates offsetcosts primarily driven by lower restructuring costs for the nine months ended September 30, 2017 compared to the same periodretention efforts and a shift in 2016. Cartus' margin decreased 2mix as more productive, higher compensated agents completed a higher percentage points to 22% from 24% primarily due to lower international revenue and lower foreign currency exchange rate gains,of homesale transactions, partially offset by lower employee related costs during nine months ended the September 30, 2017 compared to the same period in 2016 and the absence of restructuring costs incurred during the nine months ended September 30, 2016. TRG's margin decreased 1 percentage point to 11% from 12% for the nine months ended September 30, 2017 compared to the same period in 2016 due to a decrease in earnings from equity investments primarily related to costs associated with the transition and start up of operations of Guaranteed Rate Affinity, partially offset by the reversal of a legal reserve.
Corporate and Other EBITDA for the nine months ended September 30, 2017 declined $10 million to negative $70 millionoperating expenses primarily due to an $8 million expenseCOVID-19 related cost savings initiatives. Realogy Title Group's margin increased 17 percentage points to the settlement of the Strader legal matter, $5 million related to the losses on the early extinguishment of debt25% from 8% primarily as a result of the refinancing transaction during the first quarter of 2017, a $10 millionan increase in other costsequity in earnings due to professional fees supporting strategic initiatives and occupancy costs and a $6 million increasean improvement in employee costs due to higher employee incentive accruals and investments in technology development. These expenses were partially offset by an $11 million increase in the net benefitearnings of former parent legacy items primarilyGuaranteed Rate Affinity as a result of the settlementlow mortgage rate environment and improved margins in the venture.

52
Table of a Cendant legacy tax matter and the absence of $6 million in restructuring charges incurred during the nine months ended September 30, 2016.
EBITDA before restructuring charges was $593 million for the nine months ended September 30, 2017 compared to $618 million for the nine months ended September 30, 2016. EBITDA before restructuring charges by reportable segment for the nine months ended September 30, 2017 was as follows:
Contents
 Nine Months Ended September 30,  
 2017 2016  
 EBITDA Restructuring Charges EBITDA Before Restructuring EBITDA Before Restructuring %
Change
RFG$427
 $1
 $428
 $398
 8 %
NRT113
 8
 121
 146
 (17)
Cartus65
 —
 65
 78
 (17)
TRG49
 —
 49
 50
 (2)
Corporate and Other(70) —
 (70) (54) *
Total Company$584
 $9
 $593
 $618
 (4%)
Realogy Franchise and Brokerage Groups on a Combined Basis
_______________
*not meaningful
The following table reflects RFGRealogy Franchise and NRTBrokerage Group's results before the intercompany royalties and marketing fees as well as on a combined basis forto show the nine months ended September 30, 2017 and 2016.Operating EBITDA contribution of these business segments to the overall Operating EBITDA of the Company. The Operating EBITDA before restructuring margin for the combined segments decreased 12 percentage pointpoints from 11% to 14% from 15%9% primarily due primarily to higher sales commission percentageslower transaction volume during the first half of 2020 compared to the first half of 2019:
 Revenues$ Change%
Change		Operating EBITDA$ Change%
Change		Operating EBITDA MarginChange
 202020192020201920202019
Realogy Franchise Group (a)$224  $297  (73) (25) $100  $136  (36) (26) 45 %46 %(1) 
Realogy Brokerage Group (a)1,802  2,147  (345) (16) 87  127  (40) (31) 5  6  (1) 
Realogy Franchise and Brokerage Groups Combined$2,026  $2,444  (418) (17) $187  $263  (76) (29) 9 %11 %(2) 
_______________
(a)The segment numbers noted above do not reflect the impact of intercompany royalties and marketing fees paid by Realogy Brokerage Group to NRT's independent sales associates:Realogy Franchise Group of $123 million and $142 million during the six months ended June 30, 2020 and 2019, respectively.
 Revenues (a) 
%
Change
 EBITDA Before Restructuring (b) 
%
Change
 Margin Change
 2017 2016  2017 2016  2017 2016 
RFG and NRT Combined$3,949
 $3,708
 6% $549
 $544
 1% 14% 15% (1)
_______________
(a)Excludes transactions between segments, which consists of intercompany royalties and marketing fees paid by NRT to RFG of $238 million and $225 million during the nine months ended September 30, 2017 and 2016, respectively.
(b)
EBITDA for the combined RFG and NRT segments excludes $9 million and $19 million of restructuring charges for the nine months ended September 30, 2017 and 2016, respectively.


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Real EstateRealogy Franchise Services (RFG)Group
Revenues increased $38decreased $92 million to $631$347 million and Operating EBITDA increased $33decreased $55 million to $427$223 million for the ninesix months ended SeptemberJune 30, 20172020 compared with the same period in 2016.2019.
The increaseRevenues decreased $92 million primarily as a result of:
•a $26 million decrease in registration revenue was driven byand brand marketing fund revenue (associated with the waiver of marketing fees from affiliates in the second quarter of 2020), which had a $12related expense decrease of $30 million increaseresulting in a net $4 million net positive impact on Operating EBITDA, due to not holding in person meetings and conferences and lower advertising costs due to the COVID-19 pandemic in the first half of 2020 compared to the first half of 2019;
•a $22 million decrease in third-party domestic franchisee royalty revenue primarily due to a 6% increase9% decrease in the average homesale price andtransaction volume at Realogy Franchise Group which consisted of a 1% increase12% decrease in the number ofexisting homesale transactions, partially offset by a lower net effective royalty rate. Revenue also increased due to a $124% increase in average homesale price;
•an $18 million increasedecrease in intercompany royalties received from NRT as Realogy Brokerage Group;
•a result$15 million decrease in leads referral revenues driven by lower volume and referral transactions primarily driven by the discontinuation of volume increases at NRT, the USAA affinity program which ceased new enrollments in the third quarter of 2019;
•a $4$6 million increasedecrease in revenue related to the early termination of third party listing fee agreements; and
•a $5 million decrease in other revenue.
Realogy Franchise Group revenue primarily due to other marketing related activitiesincludes intercompany royalties received from Realogy Brokerage Group of $119 million and brand conferences$137 million during the first half 2020 and franchisee events and $32019, respectively, which are eliminated in consolidation against the expense reflected in Realogy Brokerage Group's results.
The $55 million increasedecrease in international revenues. Brand marketing revenue and related expense both increased $6 millionOperating EBITDA was primarily due to the level of advertising spending during the nine months ended September 30, 2017 compared to the same period in 2016.
The intercompany royalties received from NRT of $229$92 million and $217 million during the nine months ended September 30, 2017 and September 30, 2016, respectively, are eliminated in consolidation to avoid the revenue from being double counted in NRT and RFG. See "Company Owned Real Estate Brokerage Services" for a discussion of the drivers related to intercompany royalties paid to RFG.
The $33 million increase in EBITDA was principally due to the $38 million increasedecrease in revenues discussed above and a $3$10 million of higher expense for bad debt primarily due to the early termination of third party listing fee agreements. These Operating EBITDA decreases were partially offset by the $30 million decrease in restructuring costs incurred in the first nine months of 2017 compared to the same period in 2016, partially offset by a $6 million increase inregistration and brand marketing fund expense discussed above and a $1$17 million increasedecrease in expenses relatedemployee and other operating costs principally due to the brand conferencesCOVID-19 related cost savings initiatives and franchisee events.the discontinuation of the USAA affinity program.

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Realogy Brokerage Services (NRT)Group
Revenues increased $216decreased $345 million to $3,556$1,802 million and Operating EBITDA declined $18decreased $21 million to $113negative $36 million for the ninesix months ended SeptemberJune 30, 20172020 compared with the same period in 2016.2019.
The revenue increasedecrease of $216$345 million was comprised of a $151 million increase in commission income earned on homesale transactions by our existing brokerage operations and a $65 million increase in commission income earned from acquisitions. The revenue increase wasprimarily driven by a 2% increase16% decrease in homesale transaction volume at Realogy Brokerage Group which started in the numberfinal weeks of the first quarter due to the COVID-19 pandemic and consisted of a 14% decrease in existing homesale transactions and a 6% increase in the average price of homes, partially offset by a 2 basis points2% decrease in the average broker commission rate as well as a negative impact on homesale transaction volume attributable to the market disruption in Texas and Florida due to hurricanes during the third quarter of 2017. We believe our positive revenue growth is attributable to the recruiting and organic growth focus by NRT management as well as a shift from stabilization to sustained growth in the high end of the housing market. The improvement in the high end of the housing market had an adverse impact on the average homesale broker commission rate. In addition, homesale price is continuing to increase due to continued constrained inventory levels across the lower and mid price points in the markets served by NRT.price.
Operating EBITDA decreased $18$21 million primarily due to:to a $345 million decrease in revenues discussed above, partially offset by:
•a $206$215 million increasedecrease in commission expenses paid to independent sales associatesagents from $2,256$1,530 million forin the nine months ended September 30, 2016first half of 2019 to $2,462$1,315 million forin the nine months ended September 30, 2017. The increase in commissionfirst half of 2020. Commission expense is due to an increasedecreased primarily as a result of $166 million by our existing brokerage operations due to the impact of initiatives focused on growing and retaining our productive independent sales associate base and higherlower homesale transaction volume as welldiscussed above, partially offset by higher agent commission costs primarily driven by retention efforts and a shift in mix as more productive, higher compensated agents completed a higher percentage of homesale transactions;
•a $70 million decrease in employee-related, occupancy costs and other operating costs due to COVID-19 related cost savings initiatives;
•a $21 million decrease in marketing expense due to lower advertising costs as a $40 million increase related to acquisitions. The $206 million increase in commission expense was impacted by the mix of business as approximately 46%result of the increase was due to higher homesale transaction volume in the west region where we pay a greater proportion of commissions to independent sales associates;COVID-19 pandemic; and
a $14•an $18 million increase in other costs including occupancy costs of which $6 million related to acquisitions;
a $12 million increasedecrease in royalties paid to RFGRealogy Franchise Group from $217$137 million in the first half of 2019 to $119 million in the same period of 2020 associated with the volume decline as described above.
Realogy Title Group
Revenues increased $23 million to $297 million and Operating EBITDA increased $50 million to $73 million for the ninesix months ended SeptemberJune 30, 2016 to $229 million for the nine months ended September 30, 2017;
a $6 million increase in employee-related costs due to a $12 million increase attributable to acquisitions offset by a $6 million decrease due to expense reduction initiatives; and
a $6 million increase in marketing expenses of which $3 million related to acquisitions.
These EBITDA decreases were partially offset by:
a $216 million increase in revenues discussed above;
a $7 million decrease in restructuring costs incurred during the nine months ended September 30, 2017 compared to the same period in 2016; and


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a $1 million increase in earnings for our equity method investment in PHH Home Loans for the nine months ended September 30, 2017 compared to the same period in 2016 as a result of $14 million of earnings from the first two phases of the sale of PHH Home Loans' assets to Guaranteed Rate Affinity partially offset by $5 million of exit costs. In addition, there was a $8 million decrease in earnings due to lower operating results as a result of lower origination volume, compressed industry margins and lower results due to the level of organizational change associated with the transition of the operations to Guaranteed Rate Affinity.
Relocation Services (Cartus)
Revenues decreased $18 million to $290 million and EBITDA decreased $9 million to $65 million for the nine months ended September 30, 20172020 compared with the same period in 2016.2019.
Revenues decreased $18increased $23 million primarily as a result of a $24 million increase in refinance revenue due to an $10increase in activity in the refinance market and a $20 million increase in underwriter revenue with unaffiliated agents, which had a $3 million net positive impact on Operating EBITDA due to the related expense increase of $17 million. These revenue increases were partially offset by a $21 million decrease in resale revenue due to a decline in purchase transactions as result of the COVID-19 pandemic.
Operating EBITDA increased $50 million primarily as a result of a $37 million increase in equity in earnings primarily related to Guaranteed Rate Affinity due to the favorable mortgage rate environment and improved margins in the venture, the $3 million net positive impact of underwriter transactions with unaffiliated agents discussed above and a $7 million decrease in employee and other operating costs due to COVID-19 related cost savings initiatives.
Discontinued Operations - Cartus Relocation
Revenues for Cartus Relocation Services decreased $31 million to $100 million from $131 million and Operating EBITDA decreased $6 million to negative $2 million from $4 million for the six months ended June 30, 2020 compared with the same period in 2019.
Revenues decreased $31 million primarily as a result of a $15 million decrease in international revenue as a result of an increasingly higher percentage of clients reducing their global relocation activity,due to lower volume and lost business, as well as a $9 million decrease in referral revenue and an $8 million decrease in other revenue, both of which were primarily driven by lower volume. Beginning in the second half of March 2020, Cartus Relocation Services experienced a decline in new initiations due to lower volume.
EBITDA decreased $9 million primarily as a resultthe COVID-19 pandemic which continued through the second quarter of the $18 million decrease in revenues discussed above2020 and a $3 million net negative impact from foreign currency exchange rates, partially offset by a $5 million decrease in employee related costs, the absence of $4 million of restructuring costs incurred during the nine months ended September 30, 2016 and a $2 million decrease in other operating expenses as a result of lower volume.
Title and Settlement Services (TRG)
Revenues increased $7 millionthis trend is expected to $431 million and EBITDA remained flat at $49 million for the nine months ended September 30, 2017 compared with the same period in 2016.
The increase in revenues was driven by a $24 million increase in resale revenue of which $16 million was related to acquisitions, partially offset by a $9 million decrease in refinancing revenue and a $5 million decrease of underwriter revenue due to an overall decrease in activity in the refinance marketcontinue in the third quarter of 2017.2020 and potentially beyond but to a lesser extent than what we experienced in the second quarter.
Operating EBITDA remained flat as a result of an increase of $11decreased $6 million in employee-related costs primarily relateddue to acquisitions, a $3 millionthe revenue decrease earnings from equity investments primarily related to costs associated with the start up of operations of Guaranteed Rate Affinity and a $2 million increase in other costs during the nine months ended September 30, 2017 compared with the same period in 2016. The decreases werediscussed above, partially offset by the $7 million increase in revenues discussed above, a $7 million decrease in variableemployee and other operating costs primarily due to lower refinancing and underwriter volume and $2 millionCOVID-19 related to the reversalcost savings initiatives.


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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Financial Condition
June 30, 2020December 31, 2019Change
Total assets$7,433  $7,543  $(110) 
Total liabilities5,808  5,447  361  
Total equity1,625  2,096  (471) 
 September 30, 2017 December 31, 2016 Change
Total assets$7,521
 $7,421
 $100
Total liabilities5,056
 4,952
 104
Total equity2,465
 2,469
 (4)
For the ninesix months ended SeptemberJune 30, 2017,2020, total assets increased $100decreased $110 million primarily due to:
•a $74$413 million increase in cash and cash equivalents, a $45 million increase in trade and relocation receivables due to seasonal increases in volume, a $29 million increase in other non-current assets primarily due to higher prepaid expenses and investments and a $14 million increasedecrease in goodwill from acquisitions. These increases were partially offset byas a $72result of the impairment at Realogy Brokerage Group during the first quarter of 2020;
•a $119 million decrease in assets held for sale;
•a $30 million decrease in trademarks as a result of the impairment of trademarks at Realogy Franchise Group during the first quarter of 2020;
•a $36 million net decrease in franchise agreements and other amortizable intangible assets primarily due to amortization.amortization;
•a $24 million net decrease in operating lease assets; and
•a $15 million decrease in property and equipment,
partially offset by:
•a $451 million increase in cash and cash equivalents due to additional borrowings under the Revolving Credit Facility;
•a $63 million increase in other current and non-current assets primarily related to an increase in our investment in Guaranteed Rate Affinity due to an increase in equity in earnings partially offset by dividends received, an increase in prepaid incentives and an increase in marketable securities due to the reinvestment of certificates of deposit at Realogy Title Group; and
•a $13 million increase in trade receivables primarily due to timing and seasonal volume.
Total liabilities increased $104$361 million primarily due to:
•a $598 million increase in corporate debt primarily due to a $129$625 million increase in borrowings under the Revolving Credit Facility which included an additional $400 million borrowed in 2020 due to COVID-19 uncertainties and the issuance of $550 million of 7.625% Senior Secured Second Lien Notes, partially offset by the redemption of all of the Company's outstanding $550 million 5.25% Senior Notes; and
•a $58 million increase in other non-current liabilities primarily due to mark-to-market adjustments on the Company's interest rate swaps,
partially offset by:
•a $141 million decrease in deferred tax liabilities primarily due to the recognition of an income tax benefit of $99 million related to the goodwill impairment charge during the first quarter of 2020;
•a $29$125 million increasedecrease in securitization obligations, a $12liabilities held for sale;
•an $18 million increase in accounts payable and a $7 million increasedecrease in accrued expenses and other current liabilities, partially offset by liabilities; and
•a $32$13 million decrease in other non-current liabilities due to interest rate swaps and liabilities related to contingent consideration from acquisitions, a $31 million decrease in corporate debt primarily due to amortization payments on the term loan facilities and a $10 million decrease in the due to former parent liability primarily as a result of the resolution of a Cendant legacy tax matter.operating lease liabilities.


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Total equity decreased $4$471 million primarily due to a $182 million decrease in additional paid in capital, primarily related to the Company's repurchasenet loss of $180 million of common stock and $37 million of dividend payments partially offset by stock-based compensation activity of $34 million. The decrease in additional paid in capital was mostly offset by net income of $176$476 million for the ninesix months ended SeptemberJune 30, 2017.2020. The loss was primarily due to impairments of $454 million in the first half of 2020.
Liquidity and Capital Resources
We have historically satisfied our liquidity needs with cash flows from operations and funds available under our Revolving Credit Facility and securitization facilities. Our primary liquidity needs have been to service our debt and finance our working capital and capital expenditures, whichexpenditures. We currently expect to prioritize investing in our business and reducing indebtedness. Accordingly, we have historically satisfied with cash flows from operations and funds available under our revolving credit facilities and securitization facilities. In January 2017, the Company increased the borrowing capacity under its Revolving Credit Facility from $815 million to $1,050 million.
We intend to use future cash flow primarily to acquirediscontinued acquiring stock under our share repurchase program, pay dividends, fund acquisitions, enter into strategic relationships and reduce indebtedness. In February 2016, the Company's Board of Directors authorized a share repurchase program of up to $275 million of the Company’s common stock. In February 2017, our Board authorized a new share repurchase program of up to an additional $300 million of the Company's common stock. Repurchases under these programs may be made at management's discretion from time to time on the open market, pursuant to Rule 10b5-1 trading plans or privately negotiated transactions. The size and timing of these repurchases will depend on price, market and economic conditions, legal and contractual requirements and other factors. The repurchase programs have no time limit and may be suspended or discontinued at any time. As of September 30, 2017, the Company had repurchased and retired 13 million shares of common stock for an aggregate of $275 million under the February 2016 share repurchase program and $102 million under the February 2017 share repurchase program at a total weighted average market price of $29.07 per share.
Included in the 13 million shares of common stock repurchased to date, the Company repurchased 5.9 million shares of common stock for $178 million at a weighted average market price of $30.40 per share during the first nine months of 2017. As of September 30, 2017, approximately $198 million of authorization remains available for the repurchase of shares under the February 2017 share repurchase program.
During the period October 1, 2017 through November 1, 2017, we repurchased an additional 0.5 million shares at a weighted average market price of $33.11. Giving effect to these repurchases, we had approximately $181 million of remaining capacity authorized under the February 2017 share repurchase program as of November 1, 2017.
In April 2007, the Company established a standby irrevocable letter of credit for the benefit of Avis Budget Group in accordance with the Separation and Distribution Agreement. The letter of credit was utilized to support the Company’s payment obligations with respect to its share of Cendant contingent and other corporate liabilities. In September 2017, the standby irrevocable letter of credit was terminated pursuant to the governing agreement as the aggregate value of the Cendant contingent and other liabilities fell below $30 million with the resolution of a Cendant legacy tax matter in the third quarter of 2017, reducing the capacity and outstanding letters of credit under the Unsecured Letter of Credit Facility. At September 30, 2017, the aggregate value of the former parent contingent liabilities was $18 million.
We also initiated and paid a quarterly cash dividend of $0.09 per share in August 2016 and paid $0.09 per share cash dividends in every subsequent quarter. During the first nine months of 2017, we returned $37 million to stockholders through the payment of cash dividends. The declaration and payment of any future dividend will be subject to the discretion of the Board of Directors and will depend on a variety of factors, including the Company’s financial condition and results of operations, contractual restrictions, including restrictive covenants contained in the Company’s credit agreement, and the indenture governing the Company’s outstanding debt securities, capital requirements and other factors that the Board of Directors deems relevant.
We may also from time to time seek to repurchase our outstanding notes through tender offers, open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.
We are currently experiencing growth in the residential real estate market; however, if the residential real estate market or the economy as a whole does not continue to improve or weakens, our business, financial condition and liquidity may be materially adversely affected, including our ability to access capital and grow our business.
Historically, operating results and revenues for all of our businesses have been strongest in the second and third quarters of the calendar year. A significant portion of the expenses we incur in our real estate brokerage operations are related to


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marketing activities and commissions and therefore, are variable. However, many of our other expenses, such as interest payments, facilities costs and certain personnel-related costs, are fixed and cannot be reduced during a seasonal slowdown. Consequently, our debt balances are generally at their highest levels at or around the end of the first quarter of every year.2019 and discontinued our quarterly dividend in the fourth quarter of 2019.

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We are significantly encumbered by our debt obligations. As of June 30, 2020, our total debt, excluding our securitization obligations, was $4,043 million. Our liquidity position has significantly improved but continuesbeen and is expected to continue to be negatively impacted by our remainingthe interest expense and wouldon our debt obligations, which could be adversely impacted by: (i) stagnation or a downturn of the residential real estate market, (ii)intensified by a significant increase in LIBOR (or any replacement rate) or ABR,ABR.
As noted under Liquidity and Capital Resources Update, our nearest debt maturity is not until early 2023 (other than amortization payments under our Term Loan B and Term Loan A Facilities) as we redeemed all of our outstanding 5.25% Senior Notes in June 2020 using the proceeds from our 7.625% Senior Secured Second Lien Notes, together with cash on hand.
At June 30, 2020, we were in compliance with the financial covenant in each of the Senior Secured Credit Agreement and the Term Loan A Agreement with a senior secured leverage of 3.29 to 1.00 (as compared to the maximum ratio then permitted of 4.75 to 1.00) with secured debt (net of readily available cash) of $2,026 million and trailing four quarters EBITDA calculated on a Pro Forma Basis (as those terms are defined in the credit agreement governing the Senior Secured Credit Facility) of $616 million.
Following our entry into the Amendments on July 24, 2020, the financial covenant contained in each of the Senior Secured Credit Agreement and Term Loan A Agreement has been eased to require that Realogy Group maintain a senior secured leverage ratio not to exceed 6.50 to 1.00 commencing with the third quarter of 2020 through and including the second quarter of 2021 and thereafter will step down on a quarterly basis to 4.75 to 1.00 (which was the applicable level prior to the effectiveness of the Amendments) on and after the second quarter of 2022.
The Amendments do not change either the commitments or (iii)pricing applicable to our inabilitySenior Secured Credit Facility (which includes our Revolving Credit Facility) or Term Loan A Facility.
The Amendments tighten certain other covenants during the period commencing on July 24, 2020 until we issue our financial results for the third quarter of 2021 and concurrently deliver an officer’s certificate to access our relocation securitization programs.lenders showing compliance with the quarterly financial covenant, subject to earlier termination (the “covenant period”). If Realogy Group’s senior secured leverage ratio does not exceed 5.50 to 1.00 for the fiscal quarter ending June 30, 2021, the covenant period will end at the time we deliver the compliance certificate to the lenders for such period; however, in either instance, the gradual step down in the senior secured leverage ratio, as described above, will continue to apply.The covenants revised during the covenant period include the reduction or elimination of the amount available for certain types of additional indebtedness, liens, restricted payments (including dividends and stock repurchases), investments (including acquisitions and joint ventures), and voluntary junior debt repayments.
We also may elect to end the covenant period at any time, provided the senior secured leverage ratio does not exceed 4.75 to 1.00 as of the most recently ended quarter for which financial statements have been delivered. In such event, the leverage ratio will reset to the pre-Amendment level of 4.75 to 1.00 thereafter.
We believe that we will continue to be in compliance with the senior secured leverage ratio and meet our cash flow needs during the next twelve months.
For additional information, see below under the header "Financial Obligations—Covenants under the Senior Secured Credit Facility, Term Loan A Facility and Indentures".
We will continue to evaluate potential refinancing and financing transactions.transactions, subject to the Amendments during the covenant period, including refinancing certain tranches of our indebtedness and extending maturities, among other potential alternatives, such public or private placements of our common stock or preferred stock (either of which could, among other things, dilute our current stockholders and materially and adversely affect the market price of our common stock). There can be no assurance as to which, if any, of these alternatives we may pursue as the choice of any alternative will depend upon numerous factors such as market conditions, our financial performance and the limitations applicable to such transactions under our existing financing agreements and the consents we may need to obtain under the relevant documents. There can be no assurance that financing willFinancing may not be available to us on commercially reasonable terms, on terms that are acceptable termsto us, or at all. Any future indebtedness may impose various additional restrictions and covenants on us which could limit our ability to respond to market conditions, to make capital investments or to take advantage of business opportunities.
Cash Flows
At September 30, 2017, we had $348 million of cash and cash equivalents, an increase of $74 million comparedSubject to the balancerestrictions against voluntary payments of $274 million at December 31, 2016. The following table summarizesjunior debt that apply to us during the covenant period under the Amendments, we may from time to time seek to repurchase our cash flows for the nine months ended September 30, 2017 and 2016:outstanding Unsecured Notes or 7.625% Senior Secured Second Lien Notes through tender offers, open market purchases, privately negotiated transactions or otherwise. Such

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 Nine Months Ended September 30,
 2017 2016 Change
Cash provided by (used in):     
Operating activities$444
 $411
 $33
Investing activities(96) (163) 67
Financing activities(276) (438) 162
Effects of change in exchange rates on cash and cash equivalents2
 (1) 3
Net change in cash and cash equivalents$74
 $(191) $265
For the nine months ended September 30, 2017, $33 million more cash was provided by operating activities compared to the same period in 2016. The change was principally due to $14 million of additional cash provided by operating results, $15 million less cash used for accounts payable, accrued expensesrepurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other liabilities and $19 million more cash received as dividendsfactors.
Under the Amendments, we are restricted from unconsolidated entities primarily from PHH Home Loans, partially offset by $13 million more cash used due to an increase in other assets.
For the nine months ended September 30, 2017, we used $67 million less cash for investing activities compared to the same period in 2016 primarily due to $82 million less cash used for acquisition relatedmaking certain restricted payments, and $22 million more cash provided by other investing activities, partially offset by $34 million of cash used for our investment in Guaranteed Rate Affinity and $8 million more cash used for property and equipment additions.
For the nine months ended September 30, 2017, $276 million of cash was used for financing activities compared to $438 million of cash usedincluding dividend payments or share repurchases during the same periodcovenant period. The covenants in 2016. For the nine months ended September 30, 2017, $276 million of cash was used for:
$180 million forindentures governing the repurchase of our common stock;
$37 million of dividend payments;
$31 million of quarterly amortization payments on the term loan facilities;
$19 million of other financing payments primarily related to capital leases and interest rate swaps;
$18 million for payments of contingent consideration;
$11 million of tax payments related to net share settlement for stock-based compensation;
$10 million repayment of borrowings under the Revolving Credit Facility; and
$6 million of debt issuance costs;
partially offset by,
a $29 million net decrease in securitization borrowings; and
•$7 million proceeds from exercise of stock options.
For the nine months ended September 30, 2016, $438 million of cash was used for financing activities as a result of:


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the repayment of $758 million to reduce the Term Loan B facility;
the repayment of $500 million to retire the 3.375% Senior Notes at maturity;
the net repayment of $45 million of borrowings under the Revolving Credit Facility;
$134 million for the purchase of our common stock;
$31 million of amortization payments on the term loan facilities;
$23 million for payments of contingent consideration; and
$28 million of other financing payments partially related to capital leases and interest rate swaps;
$15 million of debt issuance costs;
$13 million of dividend payments; and
$6 million of tax payments related to net share settlement for stock-based compensation;
partially offset by,
$750 million of proceeds from the issuance of $250 million of 5.25%9.375% Senior Notes and $500 million of 4.875%7.625% Senior Notes;
$355 million of proceeds from issuance of the Term Loan A-1 facility; and
a $9 million net increaseSecured Second Lien Notes further restrict our ability to make dividend payments or repurchase shares in securitization borrowings.
Financial Obligations
Indebtedness Table
As of September 30, 2017, the Company’s borrowing arrangements were as follows:
 Interest
Rate		 Expiration
Date		 Principal Amount Unamortized Discount and Debt Issuance Costs Net Amount
Senior Secured Credit Facility:         
Revolving Credit Facility (1)(2) October 2020 $190
 $ *
 $190
Term Loan B(3) July 2022 1,086
 21
 1,065
Term Loan A Facility:         
Term Loan A(4) October 2020 397
 2
 395
Term Loan A-1(5) July 2021 344
 3
 341
Senior Notes4.50% April 2019 450
 7
 443
Senior Notes5.25% December 2021 550
 4
 546
Senior Notes4.875% June 2023 500
 4
 496
Securitization obligations: (6)         
        Apple Ridge Funding LLC (7)  June 2018 223
 *
 223
        Cartus Financing Limited (8)  August 2018 11
 *
 11
Total (9)$3,751
 $41
 $3,710
_______________
*The debt issuance costs related to our Revolving Credit Facility and securitization obligations are classified as a deferred financing asset within other assets.
(1)As of September 30, 2017, the Company had $1,050 million of borrowing capacity under its Revolving Credit Facility leaving $860 million of available capacity. The revolving credit facility expires in October 2020, but is classified on the balance sheet as current due to the revolving nature of the facility. On November 1, 2017, the Company had $70 million in outstanding borrowings under the Revolving Credit Facility, leaving $980 million of available capacity.
(2)Interest rates with respect to revolving loans under the Senior Secured Credit Facility at September 30, 2017 are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended September 30, 2017.
(3)
The Term Loan B provides for quarterly amortization payments totaling 1% per annum of the original principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at the Company’s option, (a) adjusted LIBOR plus 2.25% (with a LIBOR floor of 0.75%) or (b) JPMorgan Chase Bank, N.A.’s prime rate ("ABR") plus 1.25% (with an ABR floor of 1.75%).
(4)The Term Loan A provides for quarterly amortization payments, which commenced March 31, 2016, totaling per annum 5%, 5%, 7.5%, 10.0% and 12.5% of the original principal amount of the Term Loan A in 2016, 2017, 2018, 2019 and 2020, respectively. The


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interest rates with respect to term loans under the Term Loan A are based on, atany amount until the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior securedconsolidated leverage ratio the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended September 30, 2017.
(5)The Term Loan A-1 provides for quarterly amortization payments, which commenced on September 30, 2016, totaling per annum 2.5%, 2.5%, 5%, 7.5% and 10.0% of the original principal amount of the Term Loan A-1, with the last amortization payment made on June 30, 2021. The interest rates with respect to term loans under the Term Loan A-1 are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended September 30, 2017.
(6)Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations.
(7)In June 2017, Realogy Group extended the existing Apple Ridge Funding LLC securitization program utilized by Cartus until June 2018. As of September 30, 2017, the Company had $325 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving $102 million of available capacity.
(8)Consists of a £10 million revolving loan facility and a £5 million working capital facility. As of September 30, 2017, the Company had $20 million of borrowing capacity under the Cartus Financing Limited securitization program leaving $9 million of available capacity. In September 2017, Realogy Group extended the existing Cartus Financing Limited securitization program to August 2018.
(9)Not included in this table, is the Company's Unsecured Letter of Credit Facility which had a capacity of $74 million with $71 million utilized at a weighted average rate of 3.24% at September 30, 2017.
is below 4.00 to 1.00. See Note 5, "Short and Long-Term Debt", to the Condensed Consolidated Financial Statements for additional information.
In addition, we are required to pay quarterly amortization payments for the Term Loan A and Term Loan B facilities. Remaining payments for 2020 total $19 million and $5 million for the Term Loan A and Term Loan B facilities, respectively, and we expect payments for 2021 to total $51 million and $11 million for the Term Loan A and Term Loan B facilities, respectively.
If the residential real estate market or the economy as a whole does not improve or continues to weaken, our business, financial condition and liquidity may be materially adversely affected, including our ability to access capital, grow our business and return capital to stockholders.
Cash Flows
At June 30, 2020, we had $686 million of cash, cash equivalents and restricted cash, an increase of $451 million compared to the balance of $235 million at December 31, 2019. The following table summarizes our cash flows from continuing operations for the six months ended June 30, 2020 and 2019:
 Six Months Ended June 30,
 20202019Change
Cash provided by (used in) activities from continuing operations:
Operating activities$35  $113  $(78) 
Investing activities(55) (58) 3  
Financing activities571  70  501  
For the six months ended June 30, 2020, $78 millionless cash was provided by operating activities from continuing operations compared to the same period in 2019 principally due to:
•$63 million more cash used for accounts payable, accrued expenses and other liabilities;
•$63 million less cash provided by operating results; and
•$7 million more cash used for other operating activities,
partially offset by:
•$30 million more cash provided by the net change in trade receivables;
•$21 million more cash dividends received primarily from Guaranteed Rate Affinity; and
•$4 million less cash used for other assets.
For the six months ended June 30, 2020, we used $3 million less cash for investing activities from continuing operations compared to the same period in 2019 primarily due to:
•$9 million less cash used for property and equipment additions; and
•$8 million less cash used for investments in unconsolidated entities,
partially offset by $14 million more cash used for other investing activities primarily due to the reinvestment of certificates of deposit.
For the six months ended June 30, 2020, $571 million of cash wasprovided by financing activities from continuing operations compared to $70 million of cash provided during the same period in 2019.
For the six months ended June 30, 2020, $571 million of cash provided by financing activities from continuing operations related to $625 million of additional borrowings under the Revolving Credit Facility, partially offset by:
•$19 million of quarterly amortization payments on the term loan facilities;
•$15 million of cash paid as a result of the refinancing transactions in the second quarter of 2020;

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•$15 million of other financing payments primarily related to finance leases; and
•$5 million of tax payments related to net share settlement for stock-based compensation.
For the six months ended June 30, 2019, $70 million of cash provided by financing activities from continuing operations related to:
•$87 million of cash received as a result of the refinancing transactions in the first quarter of 2019; and
•$60 million of additional borrowings under the Revolving Credit Facility,
partially offset by:
•$21 million of dividend payments;
•$20 million for the repurchase of our common stock;
•$15 million of quarterly amortization payments on the term loan facilities;
•$13 million of other financing payments primarily related to finance leases; and
•$6 million of tax payments related to net share settlement for stock-based compensation.
Financial Obligations
See Note 5, "Short and Long-Term Debt", to the Condensed Consolidated Financial Statements, for information on the Company's indebtedness.indebtedness as of June 30, 2020.
Issuance of $550 million of 7.625% Senior Secured Second Lien Notes and Redemption of $550 million of 5.25% Senior Notes
In June 2020, we issued $550 million 7.625% Senior Secured Second Lien Notes due in June 2025. We used the entire net proceeds from the offering, together with cash on hand, to fund the redemption of all of our outstanding 5.25% Senior Notes due 2021, and to pay related interest, premium, fees, and expenses.
LIBOR Transition
In July 2017, the Financial Conduct Authority, the UK regulator responsible for the oversight of the London Interbank Offering Rate ("LIBOR"), announced that it would no longer require banks to participate in the LIBOR submission process and would cease oversight over the rate after the end of 2021. Various industry groups continue to discuss replacement benchmark rates, the process for amending existing LIBOR-based contracts, and the potential economic impacts of different alternatives. For example, in the U.S., a proposed replacement benchmark rate is the Secured Overnight Funding Rate (SOFR), which is an overnight rate based on secured financing, although uncertainty exists as to the transition process and broad acceptance of SOFR as the primary alternative to LIBOR.
Our primary interest rate exposure is interest rate fluctuations, specifically with respect to LIBOR, due to its impact on our variable rate borrowings under the Senior Secured Credit Facility (for our Revolving Credit Facility and Term Loan B) and the Term Loan A Facility (for our Term Loan A). As of June 30, 2020, we had interest rate swaps based on LIBOR with a notional value of $1,600 million to manage a portion of our exposure to changes in interest rates associated with our variable rate borrowings.
At this time, it is not possible to predict the effect of any changes to LIBOR, any phase out of LIBOR or any establishment of alternative benchmark rates. LIBOR may disappear entirely or perform differently than in the past. Any new benchmark rate will likely not replicate LIBOR exactly and if future rates based upon a successor rate (or a new method of calculating LIBOR) are higher than LIBOR rates as currently determined, it could result in an increase in the cost of our variable rate indebtedness and may have a material adverse effect on our financial condition and results of operations.
Covenants under the Senior Secured Credit Facility, Term Loan A Facility and Indentures
The Senior Secured Credit Facility,Agreement, Term Loan A Facility, the Unsecured Letter of Credit FacilityAgreement, and the indentures governing the Unsecured Notes and 7.625% Senior Secured Second Lien Notes contain various covenants that limit (subject to certain exceptions) Realogy Group’s ability to, among other things:
•incur or guarantee additional debt or issue disqualified stock or preferred stock;
•pay dividends or make distributions to Realogy Group’s stockholders, including Realogy Holdings;

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•repurchase or redeem capital stock;
•make loans, investments or acquisitions;
•incur restrictions on the ability of certain of Realogy Group's subsidiaries to pay dividends or to make other payments to Realogy Group;
•enter into transactions with affiliates;
•create liens;
•merge or consolidate with other companies or transfer all or substantially all of Realogy Group's and its material subsidiaries' assets;
•transfer or sell assets, including capital stock of subsidiaries; and
•prepay, redeem or repurchase subordinated indebtedness.
Pursuant to the Amendments to the Senior Secured Credit Agreement and Term Loan A Agreement, certain of these restrictions were tightened, including reducing (or eliminating) the amount available for certain types of additional indebtedness, liens, restricted payments (including dividends and stock repurchases), investments (including acquisitions and joint ventures), and voluntary junior debt repayments. Under the Amendments, we are permitted during the covenant period to obtain up to $50 million of additional credit facilities on a combined basis (less any amounts previously incurred under this provision) from lenders reasonably satisfactory to the administrative agent and us, without the consent of the existing lenders under the Senior Secured Credit Agreement or Term Loan A Agreement. In addition, during the covenant period under the Amendments, our ability to issue senior secured or unsecured notes is limited to the use of financings junior to our first lien debt to refinance the Unsecured Notes or 7.625% Senior Secured Second Lien Notes.
As a result of the covenants to which we remain subject, we are limited in the manner in which we conduct our business and we may be unable to engage in favorable business activities or finance future operations or capital needs. In addition, the Senior Secured Credit FacilityAgreement and Term Loan A FacilityAgreement require us to maintain a senior secured leverage ratio. We are further restricted under the indentures governing the 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes from making restricted payments, including our ability to issue dividends in excess of $45 million per calendar year or our ability to repurchase shares in any amount for so long as our consolidated leverage ratio is equal to or greater than 4.00 to 1.00 and then (unless that ratio falls below 3.00 to 1.00) only to the extent of available cumulative credit, as defined under those indentures.
Senior Secured Leverage Ratio applicable to our Senior Secured Credit Facility and Term Loan A Facility
The senior secured leverage ratio is tested quarterly and mayquarterly. Prior to the Amendments (including at June 30, 2020), the senior secured leverage ratio could not exceed 4.75 to 1.00. Pursuant to the Amendments, the financial covenant contained in each of the Senior Secured Credit Agreement and Term Loan A Agreement has been amended to require that Realogy Group maintain a senior secured leverage ratio not to exceed 6.50 to 1.00 commencing with the third quarter of 2020 through and including the second quarter of 2021 and thereafter will step down on a quarterly basis to 4.75 to 1.00 (which was the applicable level prior to the effectiveness of the Amendments) on and after the second quarter of 2022.
The senior secured leverage ratio is measured by dividing Realogy's GroupRealogy Group's total senior secured net debt by the trailing twelve monthfour quarters EBITDA calculated on a Pro Forma Basis, as those terms are defined in the senior secured credit facilities.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, or the securitization obligations. EBITDA calculated on a Pro Forma Basis, as defined in the senior secured credit facilities,Senior Secured Credit Agreement, includes adjustments to EBITDA for restructuring, retention and disposition costs, former parent legacy cost (benefit) items, net, loss (gain) on the early extinguishment of debt, 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 twelve-monthtrailing four-quarter period. The Company was in compliance with the senior secured leverage ratio covenant at SeptemberJune 30, 2017.

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A reconciliation of net loss attributable to Realogy Group to Operating EBITDA including discontinued operations 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, 2020 is set forth in the following table:
LessEqualsPlusEquals
Year EndedSix Months EndedSix Months EndedSix Months EndedTwelve Months
Ended
December 31,
2019		June 30,
2019		December 31,
2019		June 30,
2020		June 30,
2020
Net loss attributable to Realogy Group (a)$(188) $(30) $(158) $(476) $(634) 
Income tax (benefit) expense(22) 1  (23) (121) (144) 
Loss before income taxes(210) (29) (181) (597) (778) 
Depreciation and amortization169  84  85  91  176  
Interest expense, net249  143  106  160  266  
Restructuring costs, net42  18  24  25  49  
Impairments249  3  246  454  700  
Former parent legacy cost, net1  —  1  —  1  
(Gain) loss on the early extinguishment of debt(5) 5  (10) 8  (2) 
Income statement impact of discontinued operations95  17  78  66  144  
Operating EBITDA including discontinued operations (b)590  241  349  207  556  
Bank covenant adjustments:
Operating EBITDA for discontinued operations (c)(22) 
Pro forma effect of business optimization initiatives (d)44  
Non-cash charges (e)29  
Pro forma effect of acquisitions and new franchisees (f)6  
Costs expensed related to the disposition3  
EBITDA as defined by the Senior Secured Credit Agreement$616  
Total senior secured net debt (g)$2,026  
Senior secured leverage ratio3.29 x
_______________
(a)Net loss attributable to Realogy consists of: (i) loss of $113 million for the third quarter of 2019, (ii) loss of $45 million for the fourth quarter of 2019, (iii) loss of $462 million for the first quarter of 2020 and (iv) loss of $14 million for the second quarter of 2020.
(b)Consists of Operating EBITDA including discontinued operations of: (i) $223 million for the third quarter of 2019, (ii) $126 million for the fourth quarter of 2019, (iii) $32 million for the first quarter of 2020 and (iv) $175 million for the second quarter of 2020.
(c)Represents the Operating EBITDA for Cartus Relocation. If the Operating EBITDA of Cartus Relocation were to be included in EBITDA as defined by the Senior Secured Credit Agreement, the Senior Secured Leverage Ratio would improve to 3.18x from 3.29x.
(d)Represents the four-quarter pro forma effect of business optimization initiatives.
(e)Represents the elimination of non-cash expenses including $24 million of stock-based compensation expense and$5 million for the change in the allowance for doubtful accounts and notes reserves for the four-quarter period ended June 30, 2020.
(f)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, 2019. 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, 2019.
(g)Represents total borrowings under the Senior Secured Credit Facility (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 $2,571 million plus $34 million of finance lease obligations less $579 million of readily available cash as of June 30, 2020. 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.

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Consolidated Leverage Ratio applicable to our 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes
The consolidated leverage ratio is measured by dividing Realogy Group's total net debt by the trailing four quarter EBITDA. EBITDA, as defined in the indentures governing the 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes, is substantially similar to EBITDA calculated on a Pro Forma Basis, as those terms are defined in the Senior Secured Credit Agreement. Net debt under the indenture is Realogy Group's total indebtedness (excluding securitizations) less (i) its cash and cash equivalents in excess of restricted cash and (ii) a $200 million seasonality adjustment permitted when measuring the ratio on a date during the period of March 1 to May 31.
The consolidated leverage ratio under the indentures governing the 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes for the four-quarter period ended June 30, 2020 is set forth in the following table:
As of June 30, 2020
Revolver$815 
Term Loan A703 
Term Loan B1,053 
7.625% Senior Secured Second Lien Notes550 
4.875% Senior Notes407 
9.375% Senior Notes550 
Finance lease obligations34 
Corporate Debt (excluding securitizations)4,112 
Less: Cash and cash equivalents686 
Net debt under the indenture governing the 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes$3,426 
EBITDA as defined under the indenture governing the 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes (a)$616 
Consolidated leverage ratio under the indenture governing the 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes5.6 x
_______________
(a)As set forth in the immediately preceding table, for the four-quarter period ended June 30, 2020, EBITDA, as defined under the indentures governing the 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes, was the same as EBITDA calculated on a Pro Forma Basis, as those terms are defined in the Senior Secured Credit Agreement.
See Note 5, "Short and Long-Term Debt—Senior Secured Credit Facility" and "Short and Long-Term Debt—, "—Term Loan A Facility", "—Unsecured Notes" and "—Senior Secured Second Lien Notes", to the Condensed Consolidated Financial Statements for additional information.
At June 30, 2020 the amount of the Company's cumulative credit under the 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes was approximately $129 million. Under the terms of the indentures governing the 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes, the Company may utilize its cumulative credit to make restricted payments when the Company's consolidated leverage ratio is less than 4.00 to 1.00, provided that any such restricted payments will reduce the amount of cumulative credit available for future restricted payments. The Company made approximately $21 million in dividend payments in 2019 after the issuance of the 9.375% Senior Notes (but prior to the issuance of the 7.625% Senior Secured Second Lien Notes) and accordingly at June 30, 2020, the cumulative credit basket available for restricted payments was approximately $108 million under the indenture governing the 9.375% Senior Notes and approximately $129 million under the indenture governing 7.625% Senior Secured Second Lien Notes. However, neither of these baskets may generally be utilized until the Company's consolidated leverage ratio is less than 4.0 to 1.0. In any event, during the covenant period under the Amendments to the Senior Secured Credit Facility and Term Loan A Facility, the Company is generally restricted from making restricted payments.
Non-GAAP Financial Measures
The SEC has adopted rules to regulate the use in filings with the SEC and in public disclosures of "non-GAAP financial measures," such as EBITDA and Operating EBITDA. These measures are derived on the basis of methodologies other than in accordance with GAAP.
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) and income taxes, and is our primary non-GAAP measure. Operating EBITDA is defined by usother items that are not core to the operating activities of the Company such as EBITDA before restructuring losscharges,

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former parent legacy items, gains or losses on the early extinguishment of debt, impairments, gains or losses on discontinued operations and former parent legacy items andgains or losses on the sale of investments or other assets. Operating EBITDA is used as a supplementary financialour primary non-GAAP measure.
We present EBITDA and Operating EBITDA because we believe they areit is useful as a supplemental measuresmeasure in evaluating the performance of our operating businesses and provideprovides 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. EBITDA and 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.
EBITDA and Operating EBITDA havehas limitations as an analytical tools,tool, and you should not consider EBITDA and Operating EBITDA either in isolation or as substitutesa substitute for analyzing our results as reported under GAAP. Some of these limitations are:
these measures do•this measure does not reflect changes in, or cash required for, our working capital needs;
these measures do•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;
these measures do•this measure does not reflect our income tax expense or the cash requirements to pay our taxes;
these measures do•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 these measures dothis measure does not reflect any cash requirements for such replacements; and
•other companies may calculate these measuresthis measure differently so they may not be comparable.


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Set forth in the table below is a reconciliation of net income attributable to Realogy to EBITDA and Operating EBITDA forincluding discontinued operations includes Operating EBITDA, as defined above plus the three-month periods ended September 30, 2017 and 2016:Operating EBITDA contribution from discontinued operations on the same basis.
 Three Months Ended
 September 30, 2017 September 30, 2016
Net income attributable to Realogy$95
 $106
Income tax expense67
 74
Income before income taxes162
 180
Interest expense, net41
 37
Depreciation and amortization (a)51
 53
EBITDA254
 270
EBITDA adjustments:   
Restructuring costs2
 9
Former parent legacy cost, net1
 —
Loss on the early extinguishment of debt1
 —
Operating EBITDA$258
 $279
(a)Depreciation and amortization for the three months ended September 30, 2017 includes $1 million of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in earnings of unconsolidated entities" line on the Condensed Consolidated Statement of Operations.
Contractual Obligations
AllOther than the Company's debt transactions which occurred during the second quarter of 2020, resulting in the issuance of $550 million of 7.625% Senior Secured Second Lien Notes due 2025 and the redemption of $550 million of 5.25% Senior Notes due 2021, and the Company's draw on the Revolving Credit Facility during the first quarter of 2020 as described in Note 5, "Short and Long-Term Debt", included elsewhere in this Quarterly Report, the Company's future contractual obligations as of SeptemberJune 30, 20172020 have not changed materially from the amounts reported in our 20162019 Form 10-K.
Critical Accounting Policies
In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to our combined results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time.
These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2016,2019, which includes a

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description of our critical accounting policies that involve subjective and complex judgments that could potentially affect reported results.
Impairment of goodwill and other indefinite-lived intangible assets
See Note 3, "Goodwill and Intangible Assets", to the Condensed Consolidated Financial Statements for a discussion on impairment of goodwill and other indefinite-lived intangible assets.
Recently Issued Accounting Pronouncements
See Note 1, "Basis of Presentation", to the Condensed Consolidated Financial Statements for a discussion of recently issued accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures about Market Risks.
We are exposed to market risk from changes in interest rates primarily through our senior secured debt. At SeptemberJune 30, 2017,2020, our primary interest rate exposure was to interest rate fluctuations, specifically LIBOR, due to its impact on our variable rate borrowings of our Revolving Credit Facility and Term Loan B under the Senior Secured Credit AgreementFacility and the Term Loan A Facility. Given that our borrowings under the Senior Secured Credit AgreementFacility and Term Loan A Facility are generally based upon LIBOR, this rate (or any replacement rate) will be the Company's primary market risk exposure for the foreseeable future. We do not have significant exposure to foreign currency risk nor do we expect to have significant exposure to foreign currency risk in the foreseeable future.
We assess our market risk based on changes in interest rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential impact on earnings, fair values and cash flows based on a hypothetical change (increase and


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decrease) in interest rates. We exclude the fair values of relocation receivables and advances and securitization borrowings from our sensitivity analysis because we believe the interest rate risk on these assets and liabilities is mitigated as the rate we earn on relocation receivables and advances and the rate we incur on our securitization borrowings are based on similar variable indices.
At SeptemberJune 30, 2017,2020, we had variable interest rate long-term debt fromoutstanding under our outstanding term loansSenior Secured Credit Facility and revolverTerm Loan A Facility of $2,017 million, which excludes $234 million of securitization obligations.$2,571 million.  The weighted average interest rate on the outstanding term loansamounts under our Senior Secured Credit Facility and revolverTerm Loan A Facility at SeptemberJune 30, 20172020 was 3.36%2.65%. The interest rate with respect to the Term Loan B is based on adjusted LIBOR plus 2.25% (with a LIBOR floor of 0.75%). The interest rates with respect to the Revolving Credit Facility and term loans under the Term Loan A Facility are based on adjusted LIBOR plus an additional margin subject to adjustment based on the current senior secured leverage ratio. Based on the SeptemberJune 30, 20172020 senior secured leverage ratio, the LIBOR margin was 2.00%2.25%. At SeptemberJune 30, 2017,2020, the one-month LIBOR rate was 1.23%0.16%; therefore, we have estimated that a 0.25% increase in LIBOR would have a $5$4 million impact on our annual interest expense.
We have entered intoAs of June 30, 2020, we had interest rate swaps with a notional value of $1,475$1,600 million to manage a portion of our exposure to changes in interest rates associated with our $2,017$2,571 million of variable rate borrowings. Our interest rate swaps arewere as follows:
Notional Value (in millions)Commencement DateExpiration Date
$225600July 2012February 2018August 2015August 2020(a)
$200450January 2013February 2018November 2017November 2022
$600400August 2015August 2020(a)August 2025
$450150November 2017November 2022November 2027
_______________
(a)Interest rate swaps with a notional value of $600 million expire on August 7, 2020, and interest rate swaps with a notional value of $400 million commence on August 14, 2020.
The swaps help protect our outstanding variable rate borrowings from future interest rate volatility. The fixed interest rates on the swaps range from 2.07% to 2.89%3.11%. The Company had a liability of $99 million for the fair value of the interest rate swaps of$24 million at SeptemberJune 30, 2017.2020.  The fair value of these interest rate swaps is subject to movements in LIBOR and will fluctuate in future periods.  We have estimated that a 0.25% increase in the LIBOR yield curve would increase the fair value of our interest rate swaps by $10 million and would decrease interest expense. While these results may be used as a benchmark, they should not be viewed as a forecast of future results.

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Item 4. Controls and Procedures.
Controls and Procedures for Realogy Holdings Corp.
(a)Realogy Holdings Corp. ("Realogy Holdings") maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its filings under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Realogy Holdings' management, including the Chief Executive Officer and the Chief Financial Officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
(b)As of the end of the period covered by this quarterly report on Form 10-Q, Realogy Holdings has carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Realogy Holdings' disclosure controls and procedures are effective at the "reasonable assurance" level.
(c)There has not been any change in Realogy Holdings' internal control over financial reporting during the period covered by this quarterly report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
(a)Realogy Holdings Corp. ("Realogy Holdings") maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its filings under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Realogy Holdings' management, including the Chief Executive Officer and the Chief Financial Officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
(b)As of the end of the period covered by this quarterly report on Form 10-Q, Realogy Holdings has carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Realogy Holdings' disclosure controls and procedures are effective at the "reasonable assurance" level.
(c)There has not been any change in Realogy Holdings' internal control over financial reporting during the period covered by this quarterly report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
Controls and Procedures for Realogy Group LLC
(a)
(a)Realogy Group LLC ("Realogy Group") maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its filings under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the periods specified in the rules and procedures that are designed to ensure that information required to be disclosed in its filings under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the periods specified in the rules and


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forms of the Securities and Exchange Commission. SuchCommission and that such information is accumulated and communicated to its management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Realogy Group's management, including the Chief Executive Officer and the Chief Financial Officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
(b)As of the end of the period covered by this quarterly report on Form 10-Q, Realogy Group has carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Realogy Group's disclosure controls and procedures are effective at the "reasonable assurance" level.
(c)There has not been any change in Realogy Group's internal control over financial reporting during the period covered by this quarterly report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
(b)As of the end of the period covered by this quarterly report on Form 10-Q, Realogy Group has carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Realogy Group's disclosure controls and procedures are effective at the "reasonable assurance" level.
(c)There has not been any change in Realogy Group's internal control over financial reporting during the period covered by this quarterly report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
Other Financial Information
The Condensed Consolidated Financial Statements as of SeptemberJune 30, 20172020 and for the three and nine-monthsix-month periods ended SeptemberJune 30, 20172020 and 20162019 have been reviewed by PricewaterhouseCoopers LLP, an independent registered public accounting firm.  Their reports, dated November 3, 2017,August 6, 2020, are included on pages 4 and 5.  The reports of PricewaterhouseCoopers LLP state that they did not audit and they do not express an opinion on that unaudited financial information.  Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied.  PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 (the "Act") for their report on the unaudited financial information because that report is not a "report" or a "part" of the registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act.



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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
See Note 9, "Commitments and Contingencies—Litigation", to the Condensed Consolidated Financial Statements included elsewhere in this Reportquarterly report on Form 10-Q for additional information on the Company's legal proceedings including a description of the Dodge, et al. v. PHH Corporation, et al. litigation, which we refer to as the Strader legal matter..
The Company believes that it has adequately accrued for legal matters as appropriate. The Company records litigation accruals for legal matters which are both probable and estimable.
Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur.occur and even cases brought by us can involve counterclaims asserted against us. In addition, litigation and other legal matters, including class action lawsuits orand regulatory proceedings challenging practices that have broad impact can be costly to defend and, depending on the class size and claims, could be costly to settle. As such, the Company could incur judgments or enter into settlements of claims with liability that are materially in excess of amounts accrued and these settlements could have a material adverse effect on the Company’s financial condition, results of operations or cash flows in any particular period.
* * *
Litigation, investigations and claims against other participants in the residential real estate industry may impact the Company and its affiliated franchisees when the rulings or settlements in those cases cover practices common to the broader industry.  Examples may include claims associated with RESPA compliance, broker fiduciary duties, andmultiple listing service practices, sales agent classification. One such case is PHH Corp. vs. Consumer Financial Protection Bureau, No. 15-1177. On October 11, 2016, a three-judge panel of the United States Court of Appeals for the D.C. Circuit issued a decision in that case addressing the constitutionality of the CFPB's structure as a single-Director independent agency where the CFPB Director can only be removed by the President of the U.S. for "cause" as well as various important RESPA issues, including that: (1) Section 8(c)(2) of RESPA (which permits “bona fide” payments for goodsclassification and services actually performed), remains a viable exception under RESPAfederal and does not constitute a payment for a referral in violation of RESPA where the amount paid does not exceed the reasonable market value of the goods or services; (2) new CFPB interpretations of RESPA cannot be enforced on a retroactive basis where there is reliance on prior regulatory interpretations; and (3) the CFPB is bound by the three-year statute of limitations for government enforcement of RESPA. On February 16, 2017, the full D.C. Circuit Court of Appeals agreed to hear an appeal of the October 11, 2016 decision and vacated that decision pending the appeal. Oral arguments were held on May 24, 2017. A decision from the full D.C. Circuit Court is pending.
state fair housing laws. The Company also may be impacted by litigation and other claims against companies in other industries. Rulings on matters such asChanges in current legislation, regulations or interpretations that are applicable to the enforcement of arbitration and class waiver agreements andresidential real estate service industry may also impact the Company.
For example, there is active worker classification litigation in several jurisdictions against a variety of industries—including residential real estate brokerages in multiple states, including California and New Jersey—where the plaintiffs seek to reclassify independent contractors as employees or to challenge the use of federal and state minimum wage and overtime exemptions. This type of litigation has been particularly prolific in California since the California Supreme Court adopted a worker classification test in the second quarter of 2018 that is significantly more restrictive than those historically used in wage and hour cases. In September 2019, this judicial worker classification test was codified into California statutory law, but the adopted legislation also provides an alternate worker classification test applicable to real estate professionals that is less restrictive than the judicial test.
Since the enactment, there have been several challenges to the constitutionality and enforceability of this law as it applies to other industries, which may adversely affectultimately impact the less restrictive test currently applicable to real estate professionals. For a summary of certain legal proceedings initiated in California involving the Company that allege worker misclassification, see Note 9, "Commitments and otherContingencies—Litigation", to the Condensed Consolidated Financial Statements in this Quarterly Report.
Item 1A. Risk Factors
Other than as described below, there were no material changes to the risk factors reported in Part 1, "Item 1A. Risk Factors" in our 2019 Form 10-K.
The COVID-19 crisis has resulted in homesale transaction declines in the residential real estate industry participantsand our business and continuation of the crisis could have a material adverse effect on our profitability, financial condition and results of operations.
The COVID-19 pandemic is having a profound effect on the global economy and financial markets. This unprecedented situation has created considerable risks and uncertainties for the U.S. real estate services industry in general and for the Company and its affiliated franchisees in particular, including those arising from the adverse effects on the economy as well as risks related to employees, independent sales agents, franchisees, and consumers.
Net revenues decreased $457 million or 27% for the three months ended June 30, 2020 compared with the three months ended June 30, 2019 driven bylower homesale transaction volume at both RealogyFranchise and Brokerage Groups primarily due to the impact of the COVID-19 pandemic. Material revenue declines relating to this crisis may have a material adverse effect on our profitability, financial condition and results of operations, notwithstanding the mitigation

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actions we have taken to date or may take in the future. In addition, we may determine that additional cost-saving initiatives, which may be material, are required and such additional mitigation actions may negatively impact our operations.
The duration and severity of the impact of the pandemic (and the corresponding economic and other consequences stemming from the pandemic) on our business and financial results will depend largely on future developments, which we are unable to accurately predict, including the extent and duration of the spread of the COVID-19 outbreak; the extent of related governmental regulation; the extent of related government financial support, including for franchisees, independent sales agents and corporations; evolving societal reactions to the pandemic; the duration and severity of the negative impact on the U.S. economy (including continued economic contraction) as well as capital, credit and financial markets (including with respect to increasing down payment requirements from mortgage lenders or other tighter mortgage standards or a reduction in the availability of mortgage financing as well as with respect to consumer, business and governmental credit defaults); the materiality of increases in mortgage delinquencies or foreclosure rates; the magnitude and duration of unemployment rates and adverse impact to wage growth; the related impact on consumer confidence and spending; and the magnitude of the financial and operational consequences to our franchisees, all of which are highly uncertain.
Our ability to advance our business strategy may continue to be impaired during the COVID-19 crisis.
Due to the extraordinary disruptions to us, the real estate services industry, society and the economy, and our significant debt leverage, we expect to face additional challenges to our ability to execute our growth strategy including our ability to recruit and retain independent sales agents and franchisees, provide and develop compelling data and technology programs to such agents and franchisees, and deleverage. An inability to execute our business strategy may have a material adverse effect on our profitability, financial condition and results of operations.
The COVID-19 crisis may amplify risks related to our franchise business.
Realogy Franchise Group is dependent upon the operational and financial success of current franchisees and our ability to grow our base of franchisees (without reducing contractual royalty rates or increasing the amount and prevalence of sales incentives). Affiliated franchisees have experienced, and are expected to continue to experience, similar adverse financial effects from the COVID-19 crisis as those affecting the Company and may seek reduced contractual royalty rates, increased sales incentives or other concessions at an increased level. During the crisis, eligible franchisees and independent sales agents may have benefited from certain federal and/or state programs meant to assist businesses and individuals navigate COVID-related financial challenges. Any termination or substantial curtailment of benefits under such programs could adversely effect their businesses. Our royalty revenues and profitability will decline if the financial results of our franchisees continue to worsen, if our franchisees become unable or unwilling to pay franchise fees, or we experience a material decline in our ability to enter into franchise agreements with new franchisees. In addition, the COVID-19 crisis could contribute to an acceleration in the consolidation of our top 250 franchisees, which could result in increased volume incentives and other incentives earned by such franchisees, both of which directly impact our royalty revenue. Any of the foregoing could have a material adverse effect on our revenues and profitability. Further, we may have to increase our bad debt and note reserves and terminate franchisees due to non-payment.
The COVID-19 crisis has amplified and is expected to continue to amplify risks related to our geographic and high-end market concentration.
Our company owned brokerage operations have experienced and may continue to experience even greater adverse financial consequences due to the ongoing COVID-19 crisis as a result of the classification of sales associates as independent contractors, irrespectivesignificant concentration for this business in transactions at the higher end of the fact thatmarket and in certain geographies, including California, the partiesNew York metropolitan area and Florida, which could materially adversely affect our revenues and profitability.
A decrease in homesale transaction volume will also have an adverse impact on Realogy Title Group and our mortgage joint venture and such impact may be intensified by pronounced regional declines in the areas in which our company owned brokerages are located, given the significant geographic overlap of these businesses.
Cartus Relocation Services is subject to risks related to global relocation services, including trends in global corporate spending on relocation services, which have been and are expected to be amplified by the rulingsCOVID-19 crisis.
Relocation service providers, including Cartus Relocation Services, are impacted by many of the general residential housing trends that impact our residential real estate services business, including those trends emerging in connection with the COVID-19 crisis.In addition, Cartus Relocation Services operates worldwide, which elevates risks related to the international aspects of this business. The risks involved in our international operations and relationships that could result in

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losses against which we are not insured and therefore affect our profitability include, but are not limited to, heightened exposure to local economic conditions and local laws and regulations (including those related to employees), fluctuations in foreign currency exchange rates, and potential adverse changes in the political stability of foreign countries or in their diplomatic relations with the U.S.
The financial results of Cartus Relocation Services are also directly impacted by global corporate spending on relocation services, which have for several years continued to shift to lower cost relocation benefits as corporate clients engage in cost reduction initiatives and/or restructuring programs, as well as changes in employment relocation trends. As a different industry.  Toresult of a shift in the extentmix of services and number of services being delivered per move, Cartus Relocation Services has been increasingly subject to a competitive pricing environment and lower average revenue per relocation. Competition is expected to continue to intensify as an increasingly higher percentage of relocation clients reduce their global relocation benefits and related spend. Lower volume, in particular with respect to global relocation activity, has also impacted the defendantsoperating results of Cartus Relocation Services.
The COVID-19 crisis has amplified and is expected to continue to amplify the foregoing risks and factors, which may continue to have an adverse effect on the growth and profitability of Cartus Relocation Services.
If multiple significant relocation clients cease or reduce volume under their contracts with Cartus Relocation Services, our revenues and profitability could be materially adversely affected.
Substantially all of our contracts with relocation clients of Cartus Relocation Services are unsuccessful in these typesterminable at any time at the option of litigation matters,the client, do not require such client to maintain any level of business with us and are non-exclusive. If multiple significant relocation clients cease or reduce volume under their contracts with Cartus Relocation Services, our revenues (including downstream revenue derived from relocation referrals) and profitability could be materially adversely affected.
We recognized significant non-cash impairment charges, including as related to management’s estimates with respect to the potential impact of the COVID-19 crisis on our business, and we or our franchisees cannot distinguish our or their practices (or our industry’s practices), we and our franchisees could face significant liability and couldmay be required to modify certaintake additional such charges in the future, which may be material.
During the first quarter of 2020, we performed an impairment assessment of goodwill and indefinite-lived intangible assets as of March 31, 2020, resulting in the recognition of a non-cash impairment of the Realogy Franchise Group trademarks and a non-cash goodwill impairment for Realogy Brokerage Group. The primary drivers to these impairments were a significant increase in the weighted average cost of capital due to the volatility in the capital and debt markets due to COVID-19 and lower projected financial results in 2020.
Given the increase in the discount rate and lower projected 2020 financial results in the first quarter of 2020 impairment analysis, the estimated excess fair value over carrying value for Realogy Franchise Group and Realogy Title Group was reduced to 7% and 5%, respectively. As a result, there is additional risk of an impairment.
Impairment analyses are highly complex and involve many subjective assumptions, estimates and judgments made by management.Suchassumptions, estimates and judgments may change in the near term due to multiple factors, including continued business relationships, eitherand economic disruptions related to the ongoing COVID-19 crisis. If business conditions deteriorate further than we have modeled or if changes in key assumptions and estimates differ significantly from management’s expectations, it may be necessary to record additional impairment charges in the future, which may be material.
The COVID-19 crisis has amplified and may continue to amplify risks related to our significant indebtedness and could have a material adverse effect on our liquidity and financial position.
Under the Senior Secured Credit and Term Loan A Agreements, we are required to comply with financial, affirmative and negative covenants, including compliance with a senior secured leverage ratio, as defined in such agreements. A material decline in our ability to generate EBITDA calculated on a Pro Forma Basis, as defined in the Senior Secured Credit Agreement governing the Senior Secured Credit Facility, as a result of the ongoing COVID-19 crisis or otherwise, could result in our failure to comply with the senior secured leverage ratio covenant under our Senior Secured Credit Facility (including the Revolving Credit Facility) and Term Loan A Facility, which would result in an event of default if we fail to remedy or avoid a default as permitted under the applicable debt arrangement.
Upon the occurrence of an event of default under the indentures governing our Senior Notes, the trustee or holders of 25% of the outstanding applicable notes could materiallyelect to declare the principal of, premium, if any, and adversely impactaccrued but unpaid interest on such notes to be due and payable. If an event of default is continuing under our Senior Secured Credit Facility,

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Term Loan A Facility, the indentures governing the Unsecured Notes or our other material indebtedness, such event could cause a termination of our ability to obtain future advances under, and amortization of, our Apple Ridge Funding LLC securitization program. Any of the foregoing would have a material adverse effect on our business, financial condition and results of operations. There
As discussed elsewhere in this Quarterly Report, in July 2020, we entered into the Amendments to the Senior Secured Credit and Term Loan A Agreements, which will temporarily ease the required senior secured leverage ratio, but also tighten certain other covenants during the covenant period, including reducing (or eliminating) the amount available for certain types of additional indebtedness, liens, restricted payments (including dividends and stock repurchases), investments (including acquisitions and joint ventures), and voluntary junior debt repayments. As a result, during the covenant period, we are changing employment-related regulatory interpretations at bothfurther limited in the federalmanner in which we conduct our business and state levels thatwe may be unable to engage in certain favorable business activities or finance future operations or capital needs, which could create risks around historic practiceshave an adverse effect on our business, financial condition and that could require changes in business practices, both for us and our franchisees.results of operations.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.
(c)The following table sets forth information relating to repurchase of shares of our common stock during the quarter ended September 30, 2017:
Period Total Number of Shares Purchased Average Price Paid per Share 
Total Number of Shares Purchased as Part of a Publicly Announced Programs (1)
 
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs (1)
July 1 - 31, 2017 452,691
 $33.14 452,691
 $241,402,984
August 1 - 31, 2017 516,900
 $34.33 516,900
 $223,657,807
September 1 - 30, 2017 (2)
 759,600
 $33.91 759,600
 $197,899,771
_______________
(1)In February 2016, the Company's Board of Directors authorized a share repurchase program of up to $275 million of the


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Company’s common stock. As of April 30, 2017, allWe may be unable to continue to securitize certain of the capacityrelocation assets of Cartus Relocation Services, which may adversely impact our liquidity.
At June 30, 2020, $113 million of securitization obligations were outstanding through special purpose entities monetizing certain assets of Cartus Relocation Services under two lending facilities. We have provided a performance guaranty which guarantees the obligations of our Cartus subsidiary and its subsidiaries, as originator and servicer under the Apple Ridge securitization program. Our significant debt obligations may limit our ability to incur additional borrowings under our existing securitization facilities and disruptions in the securitization markets, including in connection with the COVID-19 crisis, may have the effect of increasing our cost of funding or reducing our access to these markets in the future.
In addition, the Apple Ridge securitization facility contains terms which if triggered may result in a termination or limitation of new or existing funding under the facility and/or may result in a requirement that all collections on the assets be used to pay down the amounts outstanding under such facility. The triggering events include but are not limited to: (1) those tied to the age and quality of the underlying assets; (2) a change of control; (3) a breach of our senior secured leverage ratio covenant under our Senior Secured Credit Facility if uncured; and (4) the acceleration of indebtedness under our Senior Secured Credit Facility, Unsecured Notes or other material indebtedness. The occurrence of a trigger event under the Apple Ridge securitization facility could restrict our ability to access new or existing funding under this program had been utilized. In February 2017, our Board authorized a new share repurchase program of up to an additional $300 millionfacility or result in termination of the Company's common stock. Repurchasesfacility. If securitization financing is not available to us for any reason, we could be required to borrow under these programsthe Revolving Credit Facility, which would adversely impact our liquidity, or we may be made at management's discretion from timerequired to time on the open market, pursuant to Rule 10b5-1 trading plans or privately negotiated transactions. The size and timingfind additional sources of these repurchases will depend on price, market and economic conditions, legal and contractual requirements and other factors. The repurchase programs have no time limit andfunding which may be suspendedon less favorable terms or discontinuedmay not be available at any time. All of the repurchased common stock has been retired.
(2)Includes 77,900 of shares purchased for which the trade date occurred in late September 2017 while settlement occurred in October 2017.
During the period October 1, 2017 through November 1, 2017, we repurchased an additional 0.5 million shares at a weighted average market price of $33.11. Giving effect to these repurchases, we had approximately $181 million of remaining capacity authorized under the February 2017 share repurchase program as of November 1, 2017.all.
Item 5. Other Information.
On November 2, 2017,August 5, 2020, Realogy Group, an indirect subsidiary of Realogy Holdings, and certain of its subsidiaries amended and extended the existing Apple Ridge Funding LLC securitization program utilized by Realogy Group's relocation services subsidiary, Cartus Corporation (“Cartus”). The amendment and extension was effected pursuant to the Fifteenth Omnibus Amendment dated as of August 5, 2020, by and among Cartus, Cartus Financial Corporation, Apple Ridge Services Corporation, Apple Ridge Funding LLC (the “Issuer”), Realogy Group, U.S. Bank National Association, as indenture trustee, paying agent, authentication agent, and transfer agent and registrar, the managing agents party to the Note Purchase Agreement (as defined below) and Crédit Agricole Corporate and Investment Bank (“CA-CIB”), as administrative agent (the “Omnibus Amendment”). The managing agents that are parties to the Note Purchase Agreement and the Omnibus Amendment are CA-CIB, The Bank of Nova Scotia, and Barclays Bank PLC.
The Omnibus Amendment, among other things, amends the Note Purchase Agreement dated as of December 14, 2011, as amended (the “Note Purchase Agreement”), by and among the Issuer, Cartus, the managing agents, committed purchasers and conduit purchasers named therein, and CA-CIB, as administrative agent, to extend the securitization program until June 4, 2021, subject to extension for an additional period of 364 days.
The parties to the Omnibus Amendment and their respective affiliates have performed and may in the future perform, various commercial banking, investment banking and other financial advisory services for Realogy Holdings and its subsidiaries for which they have received, and will receive, customary fees and expenses.
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On August 4, 2020, the Compensation Committee of the Board of Directors of Realogy Holdings Corp. (the “Board”“Committee”) approved the Fourth Amended and Restated Bylaws of the Company took the following actions intended to drive performance and motivate and retain our senior leadership team, which we call our Executive Committee, including Ms. Simonelli, Mr. Peyton, Ms. Helmkamp and Ms. Wasser. No new cash-based awards were granted to Mr. Schneider, our President and Chief Executive Officer.
In making its determinations, the Committee took into account the 71% to 66% decline in aggregate realizable value of outstanding performance share unit awards held by the Company’s named executive officers who are members of the Executive Committee as compared to the original grant date fair value of those awards, based on the Company’s payout expectations as of June 30, 2020 and our stock price on August 4, 2020.
Amendment to 2019 and 2020 Performance Share Units. The Committee approved amendments to certain awards tied to a cumulative free cash flow metric, including performance share unit awards granted to its executive officers in 2019 and 2020 (the “Bylaws”“CFCF PSUs”), which include. The amendments to:seek to mitigate the business disruptions and related impacts of COVID-19 by eliminating fiscal year 2020 as well as the impact of CARES Act-related deferrals from the performance level required to be achieved in order to earn a portion of the award.
•remove certain provisionsBased on the Company’s expectations as of June 30, 2020, no payout was expected under the 2019 CFCF PSUs and below target payout was expected under the 2020 CFCF PSUs prior to amendment. We estimate that under the revised terms of the grants and the Company’s expectations as of June 30, 2020, the 2019 CFCF PSU awards would pay out below the target level, but above the threshold level, and the 2020 CFCF PSU awards would pay out at the target level.
No change was made to the 2018 CFCF PSU award or any of the outstanding performance share unit awards that are inapplicable followingtied to relative total stockholder return (“RTSR PSUs”), all of which were tracking to result in no payout based on the Company’s de-classificationexpectations through June 30, 2020 (other than the 2020 RSTR PSUs, which were tracking to payout below target level).
Performance and Retention Award (Excluding the CEO). The Committee granted a cash-based performance incentive and retention award (the “Performance Award”) under the Company’s 2018 Long-Term Incentive Plan to Executive Committee members, other than Mr. Schneider. In granting the award, the Committee took into consideration the significant decreases in realizable value to our executives, including the impact of the Board;
addCOVID-19 crisis on compensation and the positions of Chairmanvoluntary temporary salary reductions agreed to at the onset of the Boardcrisis, as well as the competitive landscape for executive talent and Lead Independent Directorthe potential business disruption likely to Article III (Board of Directors)be caused by unplanned attrition.
The performance component of the BylawsPerformance Award will be earned if our market share (as measured by our transaction volume for existing home sale transactions) as of September 30, 2022 exceeds market share as of September 30, 2020 (the “Performance Period”) and make related ancillary changes; andwould be equal to the executive officer’s base salary, without taking into consideration any voluntary temporary reductions agreed to in connection with the COVID-19 crisis (“Base Salary”). No amounts will be earned if the performance metric is not satisfied.
align statutory officer positionsEach participant generally must remain employed with the Company throughout the Performance Period in Article IV (Officers) with Company practice, including the eliminationorder to be eligible to receive a payout of the statutory officer rolesperformance component of Treasurerthe Performance Award. If a participant’s employment is terminated without cause or due to his or her death, disability, or retirement during the Performance Period, such participant will be eligible to receive a pro-rata amount of the performance portion of his or her Performance Award based on actual performance.
In order to be eligible to receive a payout of the retention portion of the Performance Award, equal to the participant’s Base Salary, a participant must remain employed with the Company from September 30, 2020 through September 30, 2021, unless terminated in connection with a change in control, in which case the participant would be entitled to a pro-rata payment. Any retention portion payable to a participant will be reduced by any other cash retention payments made to that participant in the same calendar year.
Our Clawback Policy will apply to both the performance and Chief Accounting Officer,retention portions of the Performance Award, which will allow our Board of Directors to recoup incentive compensation in the event of a material restatement or adjustment of our financial statements, misconduct, or breach of the participant’s restrictive covenants with the Company, including those related to non-competition and make related ancillary changes.non-solicitation.
The foregoing description of the amendments to the BylawsPerformance Award set forth above is qualified in its entirety by reference to the Bylaws, which are attachedform of Performance Award filed as Exhibit 10.9 to this Quarterly Report on Form 10-Q as Exhibit 3.1 and are incorporated herein by reference.
On November 2, 2017, the Board approved Amendment Number 1 (the "Plan Amendment") to the Realogy Holdings Corp. Amended and Restated 2012 Long-Term Incentive Plan (the "Amended and Restated 2012 LTIP") to allow for the elimination of fractional shares by rounding up or down in the discretion of plan administrator (which is generally the Compensation Committee of the Board). On November 2, 2017, the Compensation Committee amended outstanding performance restricted stock unit, performance share unit and restricted stock unit awards (the "Amended Awards") granted to employees, including executive officers, prior to the date of the Plan Amendment, to provide for the rounding up of fractional shares upon the final vesting of the Amended Awards.
The foregoing description of the Plan Amendment is qualified in its entirety by reference to the Plan Amendment, which is attached to this Quarterly Report on Form 10-Q as Exhibit 10.1 and is incorporated herein by reference.herein.

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Item 6. Exhibits.
See Exhibit Index.



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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


REALOGY HOLDINGS CORP.
and
REALOGY GROUP LLC
(Registrants)




Date: November 3, 2017August 6, 2020
/S/ ANTHONY E. HULL        CHARLOTTE C. SIMONELLI
Anthony E. HullCharlotte C. Simonelli
Executive Vice President and
Chief Financial Officer






Date: November 3, 2017August 6, 2020 
/S/ TIMOTHY B. GUSTAVSON 
Timothy B. Gustavson
Senior Vice President,
Chief Accounting Officer and
Controller



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EXHIBIT INDEX
Exhibit Description 
3.1*
Fourth Amended and Restated Bylaws of Realogy Holdings Corp., as adopted by the Board of Directors, effective November 2, 2017.
4.1   Indenture, dated as of June 16, 2020, among Realogy Group LLC, as Issuer, Realogy Co-Issuer Corp., as Co-Issuer, Realogy Intermediate Holdings LLC, Realogy Holdings Corp., the Note Guarantors (as defined therein) and The Bank of New York Mellon Trust Company, N.A., as Trustee and Collateral Agent, governing the 7.625% Senior Secured Second Lien Notes due 2025 (incorporated by reference to Exhibit 4.1 to Registrants' Current Report on Form 8-K filed on June 17, 2020).
10.1   First Lien / Second Lien Intercreditor Agreement, dated as of June 16, 2020, among Realogy Group LLC, the other Grantors (as defined therein) party thereto, JPMorgan Chase Bank, N.A., as the Initial First Lien Priority Representative (as defined therein), The Bank of New York, Mellon Trust Company, N.A., as the Initial Second Lien Priority Representative (as defined therein), and the additional authorized representatives from time to time party thereto (incorporated by reference to Exhibit 10.1 to Registrants' Current Report on Form 8-K filed on June 17, 2020).
10.2   Collateral Agreement, dated as of June 16, 2020, among Realogy Intermediate Holdings Corp., Realogy Group LLC, each other Grantor identified therein and party thereto and The Bank of New York Mellon Trust Company, N.A., as Collateral Agent (incorporated by reference to Exhibit 10.2 to Registrants' Current Report on Form 8-K filed on June 17, 2020).
10.3*  Supplemental Indenture No. 5 dated as of June 11, 2020 to the 4.875% Senior Note Indenture.
10.4*  Supplemental Indenture No. 1 dated as of June 11, 2020 to the 9.375% Senior Note Indenture.
10.5  Fourteenth Omnibus Amendment and Payoff and Reallocation Agreement, dated as of June 4, 2020, among Cartus Corporation, Cartus Financial Corporation, Apple Ridge Services Corporation, Apple Ridge Funding LLC, Realogy Group LLC, U.S. Bank National Association, the managing agents party to the Note Purchase Agreement dated December 14, 2011, as amended, Crédit Agricole Corporate and Investment Bank and the committed and conduit purchasers named therein (incorporated by reference to Exhibit 10.1 to Registrants' Current Report on Form 8-K filed on June 5, 2020).
10.6*   Fifteenth Omnibus Amendment, dated as of August 5, 2020, among Cartus Corporation, Cartus Financial Corporation, Apple Ridge Services Corporation, Apple Ridge Funding LLC, Realogy Group LLC, U.S. Bank National Association, the managing agents party to the Note Purchase Agreement dated December 14, 2011, as amended, and Crédit Agricole Corporate and Investment Bank.
10.7  Ninth Amendment, dated as of July 24, 2020, to the Amended and Restated Credit Agreement, datedas of March 5, 2013, as amended, among Realogy Intermediate Holdings LLC, Realogy Group LLC, theseveral lenders parties thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agentfor the lenders (Incorporated by reference to Exhibit 10.1 to theRegistrants' Current Report on Form 8-K filed on July 30, 2020).
10.8   Third Amendment, dated as of July 24, 2020, to the Term Loan A Agreement, dated as of October 23,2015, among Realogy Intermediate Holdings LLC, Realogy Group LLC, the lenders party thereto fromtime to time and JPMorgan Chase Bank, N.A., as administrative agent for the lenders (Incorporated byreference to Exhibit 10.2 to Registrants' Current Report on Form 8-K filed on July 30, 2020).
10.9*  Form of Performance and Retention Award.
15.1*  Letter Regarding Unaudited Interim Financial Statements.
31.1*  Certification of the Chief Executive Officer of Realogy Holdings Corp. pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.2*  Certification of the Chief Financial Officer of Realogy Holdings Corp. pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.3*  Certification of the Chief Executive Officer of Realogy Group LLC pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.4*  Certification of the Chief Financial Officer of Realogy Group LLC pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

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32.1*  Certification for Realogy Holdings Corp. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*  Certification for Realogy Group LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101   The following financial information from Realogy's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 formatted in iXBRL (Inline eXtensible Business Reporting Language) includes: (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Loss, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.
104  Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
10.1
Employment Agreement dated October 17, 2017 between Realogy Holdings Corp. and Ryan M. Schneider (Incorporated by reference to Exhibit 10.1 to Registrants' Current Report on Form 8-K filed on October 23, 2017).
10.2
Non-Plan Inducement Stock Option Agreement dated October 23, 2017 between Realogy Holdings Corp. and Ryan M. Schneider (Incorporated by reference to Exhibit 10.2 to Registrants' Current Report on Form 8-K filed on October 23, 2017).
10.3
Non-Plan Inducement Restricted Stock Unit Agreement dated October 23, 2017 between Realogy Holdings Corp. and Ryan M. Schneider (Incorporated by reference to Exhibit 10.3 to Registrants' Current Report on Form 8-K filed on October 23, 2017).
10.4
Amendment dated October 23, 2017 to Employment Agreement dated March 13, 2017, between Realogy Holdings Corp. and Richard A. Smith (Incorporated by reference to Exhibit 10.5 to Registrants' Current Report on Form 8-K filed on October 23, 2017).
10.5 *
Amendment No. 1 dated November 2, 2017 to the Amended and Restated Realogy Holdings Corp. 2012 Long-Term Incentive Plan.
15.1*
Letter Regarding Unaudited Interim Financial Statements.
31.1*
Certification of the Chief Executive Officer of Realogy Holdings Corp. pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.2*
Certification of the Chief Financial Officer of Realogy Holdings Corp. pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.3*
Certification of the Chief Executive Officer of Realogy Group LLC pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.4*
Certification of the Chief Financial Officer of Realogy Group LLC pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
32.1*
Certification for Realogy Holdings Corp. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*
Certification for Realogy Group LLC pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS ^XBRL Instance Document.
101.SCH ^XBRL Taxonomy Extension Schema Document.
101.CAL^XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF ^XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB ^XBRL Taxonomy Extension Label Linkbase Document.
101.PRE ^XBRL Taxonomy Extension Presentation Linkbase Document.
______________
*Filed herewith.
^Furnished electronically with this report.

* Filed herewith.



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