Cover Page and DEI Document and
Cover Page and DEI Document and Entity Information - $ / shares | 3 Months Ended | ||
Mar. 31, 2022 | May 02, 2022 | Dec. 31, 2021 | |
Entity Information [Line Items] | |||
Document Type | 10-Q | ||
Document Quarterly Report | true | ||
Document Period End Date | Mar. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-35674 | ||
Entity Registrant Name | REALOGY HOLDINGS CORP. | ||
Entity Tax Identification Number | 20-8050955 | ||
Entity Address, Address Line One | 175 Park Avenue | ||
Entity Address, City or Town | Madison | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 07940 | ||
City Area Code | 973 | ||
Local Phone Number | 407-2000 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | RLGY | ||
Security Exchange Name | NYSE | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 118,158,193 | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | $ 0.01 |
Entity Central Index Key | 0001398987 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | Q1 | ||
Amendment Flag | false | ||
Entity Incorporation, State or Country Code | DE | ||
Realogy Group LLC [Member] | |||
Entity Information [Line Items] | |||
Entity File Number | 333-148153 | ||
Entity Registrant Name | REALOGY GROUP LLC | ||
Entity Tax Identification Number | 20-4381990 | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Central Index Key | 0001355001 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Revenues [Abstract] | |||
Net revenues | [1] | $ 1,635 | $ 1,547 |
Expenses | |||
Commission and other agent-related costs | 988 | 885 | |
Operating | 406 | 384 | |
Marketing | 64 | 58 | |
General and administrative | 98 | 90 | |
Restructuring costs, net | [2] | 4 | 5 |
Impairments | [3] | 0 | 1 |
Depreciation and amortization | 51 | 51 | |
Interest expense, net | 18 | 38 | |
Loss on the early extinguishment of debt | [4] | 92 | 17 |
Other income, net | (131) | (2) | |
Total expenses | 1,590 | 1,527 | |
Income before income taxes, equity in losses (earnings) and noncontrolling interests | 45 | 20 | |
Income tax expense | 12 | 17 | |
Equity in losses (earnings) of unconsolidated entities | (10) | 31 | |
Net income | 23 | 34 | |
Less: Net income attributable to noncontrolling interests | 0 | (1) | |
Net income attributable to Realogy Holdings and Realogy Group | $ 23 | $ 33 | |
Earnings per share attributable to Realogy Holdings shareholders: | |||
Basic earnings per share | $ 0.20 | $ 0.28 | |
Diluted earnings per share | $ 0.19 | $ 0.28 | |
Weighted average common and common equivalent shares of Realogy Holdings outstanding: | |||
Basic | 117.1 | 115.9 | |
Diluted | 120.4 | 118.4 | |
Gross commission income | |||
Revenues [Abstract] | |||
Net revenues | [5] | $ 1,247 | $ 1,154 |
Service revenue | |||
Revenues [Abstract] | |||
Net revenues | [6] | 246 | 249 |
Franchise fees | |||
Revenues [Abstract] | |||
Net revenues | [7] | 99 | 105 |
Other | |||
Revenues [Abstract] | |||
Net revenues | [8] | $ 43 | $ 39 |
[1] | Transactions between segments are eliminated in consolidation. Revenues for Realogy Franchise Group include intercompany royalties and marketing fees paid by Realogy Brokerage Group of $86 million and $79 million for the three months ended March 31, 2022 and 2021, respectively. Such amounts are eliminated through the Corporate and Other line. | ||
[2] | (b) The three months ended March 31, 2022 includes restructuring charges of $1 million at Realogy Franchise Group, $2 million at Realogy Brokerage Group and $1 million at Corporate and Other. The three months ended March 31, 2021 includes restructuring charges of $2 million at Realogy Franchise Group, $2 million at Realogy Brokerage Group and $1 million at Corporate and Other. | ||
[3] | Non-cash impairments for the three months ended March 31, 2021 relate to lease asset impairments. | ||
[4] | Loss on the early extinguishment of debt is recorded in Corporate and Other | ||
[5] | Gross commission income at Realogy Brokerage Group is recognized at a point in time at the closing of a homesale transaction | ||
[6] | Service revenue primarily consists of title and escrow fees at Realogy Title Group and are recognized at a point in time at the closing of a homesale transaction. Service revenue at Realogy Franchise Group includes relocation fees, which are recognized as revenue when or as the related performance obligation is satisfied dependent on the type of service performed, and fees related to leads and related services, which are recognized at a point in time at the closing of a homesale transaction or at the completion of the related service. | ||
[7] | Franchise fees at Realogy Franchise Group primarily include domestic royalties which are recognized at a point in time when the underlying franchisee revenue is earned (upon close of the homesale transaction). | ||
[8] | Other revenue is comprised of brand marketing funds received from franchisees at Realogy Franchise Group and other miscellaneous revenues across all of the business segments. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 23 | $ 34 |
Currency translation adjustment | 0 | (1) |
Defined benefit pension plan—amortization of actuarial loss to periodic pension cost | 1 | 1 |
Other comprehensive income, before tax | 1 | 0 |
Income tax expense (benefit) related to items of other comprehensive income amounts | 0 | 0 |
Other comprehensive income, net of tax | 1 | 0 |
Comprehensive income | 24 | 34 |
Less: comprehensive income attributable to noncontrolling interests | 0 | (1) |
Comprehensive income attributable to Realogy Holdings and Realogy Group | $ 24 | $ 33 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 306 | $ 735 |
Restricted cash | 3 | 8 |
Trade receivables (net of allowance for doubtful accounts of $11 for both periods presented) | 124 | 123 |
Relocation receivables | 175 | 139 |
Other current assets | 195 | 183 |
Total current assets | 803 | 1,188 |
Property and equipment, net | 311 | 310 |
Operating lease assets, net | 447 | 453 |
Goodwill | 2,897 | 2,923 |
Trademarks | 687 | 687 |
Franchise agreements, net | 1,004 | 1,021 |
Other intangibles, net | 164 | 171 |
Other non-current assets | 544 | 457 |
Total assets | 6,857 | 7,210 |
Current liabilities: | ||
Accounts payable | 119 | 130 |
Securitization obligations | 105 | 118 |
Current portion of long-term debt | 12 | 10 |
Current portion of operating lease liabilities | 128 | 128 |
Accrued expenses and other current liabilities | 517 | 666 |
Total current liabilities | 881 | 1,052 |
Long-term debt | 2,899 | 2,940 |
Long-term operating lease liabilities | 406 | 417 |
Deferred income taxes | 329 | 353 |
Other non-current liabilities | 185 | 256 |
Total liabilities | 4,700 | 5,018 |
Equity: | ||
Realogy Holdings preferred stock: $0.01 par value; 50,000,000 shares authorized, none issued and outstanding at March 31, 2022 and December 31, 2021 | $ 0 | $ 0 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Realogy Holdings common stock: $0.01 par value; 400,000,000 shares authorized, 118,140,076 shares issued and outstanding at March 31, 2022 and 116,588,430 shares issued and outstanding at December 31, 2021 | $ 1 | $ 1 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Common Stock, Shares, Outstanding | 118,140,076 | 116,588,430 |
Additional paid-in capital | $ 4,886 | $ 4,947 |
Accumulated deficit | (2,684) | (2,712) |
Accumulated other comprehensive loss | (49) | (50) |
Total stockholders' equity | 2,154 | 2,186 |
Noncontrolling interests | 3 | 6 |
Total equity | 2,157 | 2,192 |
Total liabilities and equity | $ 6,857 | $ 7,210 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Operating Activities | |||
Net income | $ 23 | $ 34 | |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Depreciation and amortization | 51 | 51 | |
Deferred income taxes | (6) | 15 | |
Impairments | [1] | 0 | 1 |
Amortization of deferred financing costs and debt discount (premium) | 3 | 3 | |
Loss on the early extinguishment of debt | 92 | 17 | |
Gain on the sale of business, net | [2] | (131) | 0 |
Equity in losses (earnings) of unconsolidated entities | (10) | 31 | |
Stock-based compensation | 6 | 6 | |
Mark-to-market adjustments on derivatives | (26) | (13) | |
Other adjustments to net income | 1 | (2) | |
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions: | |||
Trade receivables | (2) | (3) | |
Relocation receivables | (35) | (4) | |
Other assets | (37) | (14) | |
Accounts payable, accrued expenses and other liabilities | (172) | (117) | |
Dividends received from unconsolidated entities | 1 | 31 | |
Other, net | (11) | (11) | |
Net cash used in operating activities | (233) | (37) | |
Investing Activities | |||
Property and equipment additions | (29) | (23) | |
Payments to Acquire Businesses, Net of Cash Acquired | (3) | (2) | |
Net proceeds from the sale of businesses | 58 | 2 | |
Investment in unconsolidated entities | (7) | (6) | |
Other, net | 17 | (3) | |
Net cash provided by (used in) investing activities | 36 | (32) | |
Financing Activities | |||
Repayments of Term Loan A Facility and Term Loan B Facility | 0 | (905) | |
Proceeds from issuance of Senior Notes | 1,000 | 905 | |
Redemption of Senior Secured Second Lien Notes | (550) | 0 | |
Redemption of Senior Notes | (550) | 0 | |
Amortization payments on term loan facilities | (1) | (3) | |
Net change in securitization obligations | (13) | (7) | |
Debt issuance costs | (18) | (8) | |
Cash paid for fees associated with early extinguishment of debt | (80) | (11) | |
Taxes paid related to net share settlement for stock-based compensation | (16) | (8) | |
Other, net | (9) | (8) | |
Net cash used in financing activities | (237) | (45) | |
Effect of changes in exchange rates on cash, cash equivalents and restricted cash | 0 | 0 | |
Net decrease in cash, cash equivalents and restricted cash | (434) | (114) | |
Cash, cash equivalents and restricted cash, beginning of period | 743 | 523 | |
Cash, cash equivalents and restricted cash, end of period | 309 | 409 | |
Supplemental Disclosure of Cash Flow Information | |||
Interest payments (including securitization interest of $1 for both periods presented) | 58 | 14 | |
Income tax payments, net | 2 | 2 | |
Payments to Acquire Retained Interest in Securitized Receivables | $ 1 | $ 1 | |
[1] | Non-cash impairments for the three months ended March 31, 2021 relate to lease asset impairments. | ||
[2] | Gain on the sale of business, net is recorded in Realogy Title Group related to the sale of the Title Underwriter. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | EQUITY Condensed Consolidated Statement of Changes in Equity for Realogy Holdings Effective January 1, 2022, the Company adopted ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . Accordingly, the Company recorded a net reduction to opening Accumulated deficit of $5 million and a net reduction to opening Additional paid-in capital of $53 million as of January 1, 2022 due to the cumulative impact of adopting this new standard. See Note 1, "Basis of Presentation—Recently Adopted Accounting Pronouncements", for additional information. Three Months Ended March 31, 2022 Common Stock Additional Accumulated Accumulated Non- Total Shares Amount Balance at December 31, 2021 116.6 $ 1 $ 4,947 $ (2,712) $ (50) $ 6 $ 2,192 Cumulative effect adjustment due to the adoption of ASU 2020-06 — — (53) 5 — — (48) Net income — — — 23 — — 23 Other comprehensive income — — — — 1 — 1 Exercise of stock options 0.1 — 2 — — — 2 Stock-based compensation — — 6 — — — 6 Issuance of shares for vesting of equity awards 2.3 — — — — — — Shares withheld for taxes on equity awards (0.9) — (16) — — — (16) Dividends — — — — — (3) (3) Balance at March 31, 2022 118.1 $ 1 $ 4,886 $ (2,684) $ (49) $ 3 $ 2,157 Three Months Ended March 31, 2021 Common Stock Additional Accumulated Accumulated Non- Total Shares Amount Balance at December 31, 2020 115.5 $ 1 $ 4,876 $ (3,055) $ (59) $ 4 $ 1,767 Net income — — — 33 — 1 34 Stock-based compensation — — 6 — — — 6 Issuance of shares for vesting of equity awards 1.4 — — — — — — Shares withheld for taxes on equity awards (0.5) — (8) — — — (8) Dividends — — — — — (2) (2) Balance at March 31, 2021 116.4 $ 1 $ 4,874 $ (3,022) $ (59) $ 3 $ 1,797 Condensed Consolidated Statement of Changes in Equity for Realogy Group The Company has not 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 Realogy Holdings level. The only difference between Realogy Group and Realogy Holdings is that the $1 million in par value of common stock in Realogy Holdings' equity is included in additional paid-in capital in Realogy Group's equity. Stock-Based Compensation During the first quarter of 2022, the Company granted restricted stock units related to 0.9 million shares with a weighted average grant date fair value of $18.00 and performance stock units related to 0.8 million shares with a weighted average grant date fair value of $16.51. The Company granted all time-based equity awards in the form of restricted stock units which are subject to ratable vesting over a three-year period. |
Basis Of Presentation
Basis Of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 (loss) 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 March 31, 2022 and the results of operations and comprehensive income for the three months ended March 31, 2022 and 2021 and cash flows for the three months ended March 31, 2022 and 2021. The Consolidated Balance Sheet at December 31, 2021 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, 2021. Sale of the Title Insurance Underwriter On March 29, 2022, the Company sold its title insurance underwriter, Title Resources Guaranty Company (the "Title Underwriter") (previously reported in the Realogy Title Group reportable segment), to an affiliate of Centerbridge for $210 million (prior to expenses and tax) and a 30% equity stake in the form of common units in a title insurance underwriter joint venture that owns the Title Underwriter (the "Title Insurance Underwriter Joint Venture"). Upon closing of the transaction, the Company received $208 million of cash and recorded a $90 million investment related to its 30% equity interest in the Title Insurance Underwriter Joint Venture (see Note 5, "Equity Method Investments", for additional information). As a result of the transaction, the Company disposed of $166 million of net assets, including $152 million of cash held as statutory reserves by the Title Underwriter and $32 million of goodwill, and recognized a gain of $131 million, net of fees, recorded in the Other income, net line on the Condensed Consolidated Statements of Operations. As this transaction did not represent a strategic shift that will have a major effect on the Company’s operations or financial results, the Title Underwriter's operations have not been classified as discontinued operations. Fair Value Measurements The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level Input: Input Definitions: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The availability of observable inputs can vary from asset to asset and is affected by a wide variety of factors, including, for example, the type of asset, whether the asset is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level III. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value of financial instruments is generally determined by reference to quoted market values. In cases where quoted market prices are not available, fair value is based on estimates using present value or other valuation techniques, as appropriate. The fair value of interest rate swaps is determined based upon a discounted cash flow approach. The Company measures financial instruments at fair value on a recurring basis and recognizes transfers within the fair value hierarchy at the end of the fiscal quarter in which the change in circumstances that caused the transfer occurred. The following table summarizes fair value measurements by level at March 31, 2022 for assets and liabilities measured at fair value on a recurring basis: Level I Level II Level III Total Deferred compensation plan assets (included in other non-current assets) $ 1 $ — $ — $ 1 Interest rate swaps (included in other current and non-current liabilities) — 15 — 15 Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) — — 11 11 The following table summarizes fair value measurements by level at December 31, 2021 for assets and liabilities measured at fair value on a recurring basis: Level I Level II Level III Total Deferred compensation plan assets (included in other non-current assets) $ 1 $ — $ — $ 1 Interest rate swaps (included in other current and non-current liabilities) — 46 — 46 Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) — — 9 9 The fair value of the Company’s contingent consideration for acquisitions is measured using a probability weighted-average discount rate to estimate future cash flows based upon the likelihood of achieving future operating results for individual acquisitions. These assumptions are deemed to be unobservable inputs and as such the Company’s contingent consideration is classified within Level III of the valuation hierarchy. The Company reassesses the fair value of the contingent consideration liabilities on a quarterly basis. The following table presents changes in Level III financial liabilities measured at fair value on a recurring basis: Level III Fair value of contingent consideration at December 31, 2021 $ 9 Additions: contingent consideration related to acquisitions completed during the period 2 Reductions: payments of contingent consideration — Changes in fair value (reflected in general and administrative expenses) — Fair value of contingent consideration at March 31, 2022 $ 11 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: March 31, 2022 December 31, 2021 Debt Principal Amount Estimated Principal Amount Estimated Revolving Credit Facility — — — — Extended Term Loan A 231 227 232 231 7.625% Senior Secured Second Lien Notes — — 550 583 4.875% Senior Notes 407 408 407 418 9.375% Senior Notes — — 550 596 5.75% Senior Notes 900 844 900 923 5.25% Senior Notes 1,000 918 — — 0.25% Exchangeable Senior Notes 403 365 403 399 _______________ (a) The fair value of the Company's indebtedness is categorized as Level II. 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 $12 million and $17 million for the three months ended March 31, 2022 and 2021, respectively. Derivative Instruments The Company records derivatives and hedging activities on the balance sheet at their respective fair values. The Company enters into interest rate swaps to manage its exposure to changes in interest rates associated with its variable rate borrowings. As of March 31, 2022, the Company had interest rate swaps with an aggregate notional value of $1,000 million to offset the variability in cash flows resulting from the term loan facilities as follows: Notional Value (in millions) Commencement Date Expiration Date $450 November 2017 November 2022 $400 August 2020 August 2025 $150 November 2022 November 2027 The swaps help to protect our outstanding variable rate borrowings from future interest rate volatility. The Company has not elected to utilize hedge accounting for these interest rate swaps; therefore, any change in fair value is recorded in the Condensed Consolidated Statements of Operations. The fair value of derivative instruments was as follows: Not Designated as Hedging Instruments Balance Sheet Location March 31, 2022 December 31, 2021 Interest rate swap contracts Other current and non-current liabilities 15 46 The effect of derivative instruments on earnings was as follows: Derivative Instruments Not Designated as Hedging Instruments Location of Gain Recognized for Derivative Instruments Gain Recognized on Derivatives Three Months Ended March 31, 2022 2021 Interest rate swap contracts Interest expense $ (26) $ (13) 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 accounting 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 March 31, Realogy Franchise Group Realogy Brokerage Group Realogy Title Corporate and Other Total 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Gross commission income (a) $ — $ — $ 1,247 $ 1,154 $ — $ — $ — $ — $ 1,247 $ 1,154 Service revenue (b) 55 47 6 7 185 195 — — 246 249 Franchise fees (c) 180 181 — — — — (81) (76) 99 105 Other (d) 32 26 11 10 5 6 (5) (3) 43 39 Net revenues $ 267 $ 254 $ 1,264 $ 1,171 $ 190 $ 201 $ (86) $ (79) $ 1,635 $ 1,547 ______________ (a) Gross commission income at Realogy Brokerage Group is recognized at a point in time at the closing of a homesale transaction. (b) Service revenue primarily consists of title and escrow fees at Realogy Title Group and are recognized at a point in time at the closing of a homesale transaction. Service revenue at Realogy Franchise Group includes relocation fees, which are recognized as revenue when or as the related performance obligation is satisfied dependent on the type of service performed, and fees related to leads and related services, which are recognized at a point in time at the closing of a homesale transaction or at the completion of the related service. (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). (d) Other revenue is comprised of brand marketing funds received from franchisees at Realogy Franchise Group 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 revenue contracts by reportable segment for the period: Beginning Balance at January 1, 2022 Additions during the period Recognized as Revenue during the period Ending Balance at March 31, 2022 Realogy Franchise Group: Deferred area development fees (a) $ 41 $ 1 $ (1) $ 41 Deferred brand marketing fund fees (b) 25 23 (26) 22 Deferred outsourcing management fees (c) 4 12 (11) 5 Other deferred income related to revenue contracts 9 15 (10) 14 Total Realogy Franchise Group 79 51 (48) 82 Realogy Brokerage Group: Advanced commissions related to development business (d) 11 1 (1) 11 Other deferred income related to revenue contracts 3 2 (1) 4 Total Realogy Brokerage Group 14 3 (2) 15 Total $ 93 $ 54 $ (50) $ 97 _______________ (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 the related franchise agreement as consideration for the right to access and benefit 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) The Company earns revenues from outsourcing management fees charged to clients that may cover several of the various relocation services according to the clients' specific needs. Outsourcing management fees are recorded as deferred revenue when billed (usually at the start of the relocation) and are recognized as revenue over the average time period required to complete the transferee's move, or a phase of the move that the fee covers, which is typically 3 to 6 months depending on the move type. (d) New development closings generally have a development period of between 18 and 24 months from contracted date to closing. Allowance for Doubtful Accounts The Company estimates the allowance necessary to provide for uncollectible accounts receivable. The estimate is based on historical experience, combined with a review of current conditions and 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 based upon the 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 three months ended March 31, 2022 included the establishment of a $90 million investment related to the Company's 30% equity interest in the Title Insurance Underwriter Joint Venture. Significant non-cash transactions also included finance lease additions of $3 million and $1 million during the three months ended March 31, 2022 and 2021, respectively, which resulted in non-cash additions to property and equipment, net and other non-current liabilities. Leases The Company's lease obligations as of March 31, 2022 have not changed materially from the amounts reported in the 2021 Form 10-K. Recently Issued Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates ("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. Recently Adopted Accounting Pronouncements On January 1, 2022, the Company adopted ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for instruments with characteristics of liabilities and equity, including convertible debt. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock resulting in fewer embedded conversion features being separately recognized from the host contract and the interest rate of more convertible debt instruments being closer to the coupon interest rate, as compared with prior guidance. In addition, ASU 2020-06 changes the diluted earnings per share calculation for instruments that may be settled in cash or shares and for convertible instruments requiring the use of the if-converted method. ASU 2020-06 is effective for reporting periods beginning on or after December 15, 2021 and permits the use of either the modified retrospective or fully retrospective method of transition. The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method. In accordance with the transition guidance, the Company applied the new guidance to its Exchangeable Senior Notes that were outstanding as of January 1, 2022 with the cumulative effect of adoption recognized as an adjustment to the opening balance of Accumulated deficit. Upon adoption, the Company re-combined the liability and equity components associated with the Exchangeable Senior Notes into single liability and derecognized the unamortized debt discount and related equity component. This resulted in an increase to Long-term debt of $65 million, a reduction to Additional paid-in capital of $53 million, net of taxes, and a reduction to Deferred tax liabilities of $17 million. The Company recorded a cumulative effect of adoption adjustment of $5 million, net of taxes, as a reduction to Accumulated deficit on January 1, 2022 related to the reversal of cumulative interest expense recognized for the amortization of the debt discount on its Exchangeable Senior Notes since issuance. The cumulative effect of adoption on the Company's consolidated balance sheets as of January 1, 2022 is summarized below: Balance as of December 31, 2021 Impact of the adoption of ASU 2020-06 Balance as of January 1, 2022 after the adoption of ASU 2020-06 LIABILITIES AND EQUITY Long-term debt $ 2,940 $ 65 $ 3,005 Deferred income taxes 353 (17) 336 Total liabilities 5,018 48 5,066 Equity: Additional paid-in capital 4,947 (53) 4,894 Accumulated deficit (2,712) 5 (2,707) Total stockholders' equity 2,186 (48) 2,138 Total equity 2,192 (48) 2,144 Total liabilities and equity $ 7,210 $ — $ 7,210 Furthermore, upon adoption, the Company is required to use the "if converted" method when calculating the dilutive impact of convertible debt on earnings per share, however this change did not have a financial impact upon adoption as the Company's Exchangeable Senior Notes have been antidilutive since issuance. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure | GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill by reporting unit and changes in the carrying amount are as follows: Realogy Franchise Group Realogy Brokerage Group Realogy Total Balance at December 31, 2021 $ 2,506 $ 259 $ 158 $ 2,923 Goodwill acquired (a) — 5 1 6 Goodwill reduction for sale of a business (b) — — (32) (32) Balance at March 31, 2022 $ 2,506 $ 264 $ 127 $ 2,897 Accumulated impairment losses (c) $ 1,447 $ 808 $ 324 $ 2,579 _______________ (a) Goodwill acquired during the three months ended March 31, 2022 relates to the acquisition of two real estate brokerage operations and one title and settlement operation. (b) Goodwill reduction during the three months ended March 31, 2022 relates to the sale of the Title Underwriter (see Note 1, "Basis of Presentation", for a description of the transaction). (c) Includes impairment charges which reduced goodwill by $540 million during 2020, $253 million during 2019, $1,279 million during 2008 and $507 million during 2007. Intangible Assets Intangible assets are as follows: As of March 31, 2022 As of December 31, 2021 Gross Accumulated Net Gross Accumulated Net Amortizable—Franchise agreements (a) $ 2,010 $ 1,006 $ 1,004 $ 2,010 $ 989 $ 1,021 Indefinite life—Trademarks (b) $ 687 $ 687 $ 687 $ 687 Other Intangibles Amortizable—License agreements (c) $ 45 $ 14 $ 31 $ 45 $ 14 $ 31 Amortizable—Customer relationships (d) 456 350 106 456 345 111 Indefinite life—Title plant shares (e) 24 24 25 25 Amortizable—Other (f) 13 10 3 16 12 4 Total Other Intangibles $ 538 $ 374 $ 164 $ 542 $ 371 $ 171 _______________ (a) Generally amortized over a period of 30 years. (b) Primarily related to real estate franchise brands, title and relocation 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 Realogy Franchise Group, Realogy Title Group and Realogy Brokerage Group. These relationships are being amortized over a period of 7 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) 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 March 31, 2022 2021 Franchise agreements $ 17 $ 17 Customer relationships 5 6 Other 2 — Total $ 24 $ 23 Based on the Company’s amortizable intangible assets as of March 31, 2022, the Company expects related amortization expense for the remainder of 2022, the four succeeding years and thereafter to be approximately $68 million, $89 million, $89 million, $89 million, $89 million and $720 million, respectively. |
Accrued Expenses And Other Curr
Accrued Expenses And Other Current Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses And Other Current Liabilities | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of: March 31, 2022 December 31, 2021 Accrued payroll and related employee costs $ 142 $ 284 Advances from clients 26 31 Accrued volume incentives 50 60 Accrued commissions 60 49 Restructuring accruals 9 10 Deferred income 65 59 Accrued interest 31 42 Current portion of finance lease liabilities 11 11 Due to former parent 20 19 Other 103 101 Total accrued expenses and other current liabilities $ 517 $ 666 |
Short And Long Term-Debt
Short And Long Term-Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Short And Long-Term Debt | SHORT AND LONG-TERM DEBT Total indebtedness is as follows: March 31, 2022 December 31, 2021 Revolving Credit Facility $ — $ — Extended Term Loan A 230 231 7.625% Senior Secured Second Lien Notes — 542 4.875% Senior Notes 406 406 9.375% Senior Notes — 545 5.75% Senior Notes 899 898 5.25% Senior Notes 983 — 0.25% Exchangeable Senior Notes 393 328 Total Short-Term & Long-Term Debt $ 2,911 $ 2,950 Securitization Obligations: Apple Ridge Funding LLC $ 104 $ 116 Cartus Financing Limited 1 2 Total Securitization Obligations $ 105 $ 118 Indebtedness Table As of March 31, 2022, the Company’s borrowing arrangements were as follows: Interest Expiration Principal Amount Unamortized Discount (Premium) and Debt Issuance Costs Net Amount Revolving Credit Facility (1) (2) (3) $ — $ * $ — Extended Term Loan A (2) (4) February 2025 (3) 231 1 230 Senior Notes 4.875% June 2023 407 1 406 Senior Notes 5.75% January 2029 900 1 899 Senior Notes (5) 5.25% April 2030 1,000 17 983 Exchangeable Senior Notes (6) 0.25% June 2026 403 10 393 Total Short-Term & Long-Term Debt $ 2,941 $ 30 $ 2,911 Securitization obligations: (7) Apple Ridge Funding LLC (8) June 2022 $ 104 $ * $ 104 Cartus Financing Limited (9) September 2022 1 * 1 Total Securitization Obligations $ 105 $ — $ 105 _______________ * The debt issuance costs related to our Revolving Credit Facility and securitization obligations are classified as a deferred financing asset within other assets. (1) The Revolving Credit Facility includes available capacity under the Non-extended Revolving Credit Commitment of $477 million and available capacity under the Extended Revolving Credit Commitment of $948 million. As of March 31, 2022, there were no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. On May 2, 2022, the Company had no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. (2) Interest rates with respect to revolving loans under the Revolving Credit Facility and outstanding borrowings under the Extended Term Loan A at March 31, 2022 are 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 1.75% and the ABR margin was 0.75% for the three months ended March 31, 2022. (3) The maturity date of the Non-Extended Revolving Credit Commitment under the Revolving Credit Facility is February 2023. The maturity date of each of the Extended Revolving Credit Commitment and Extended Term Loan A may spring forward to March 2, 2023 if on or before March 2, 2023, the 4.875% Senior Notes have not been extended, refinanced or replaced to have a maturity date after May 10, 2025 (or are not otherwise discharged, defeased or repaid by March 2, 2023). (4) The Extended Term Loan A has quarterly amortization payments equal to a percentage per quarter of the original principal amount of $237 million, as follows: 0.625% per quarter from June 30, 2021 to March 31, 2022; 1.25% per quarter from June 30, 2022 to March 31, 2023; 1.875% per quarter from June 30, 2023 to March 31, 2024; and 2.50% per quarter for periods ending on or after June 30, 2024, with the balance of the Extended Term Loan A due at maturity on February 8, 2025. (5) In the first quarter of 2022, the Company issued $1,000 million aggregate principal amount of 5.25% Senior Notes due 2030 and used net proceeds, together with cash on hand, to redeem in full both the outstanding 9.375% Senior Notes due 2027 and the 7.625% Senior Secured Second Lien Notes due 2025. See below under the header "5.25% Senior Notes Issuance and Redemption of 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes" for a description of these transactions. (6) See below under the header "Exchangeable Senior Notes" for additional information and Note 1, "Basis of Presentation—Recently Adopted Accounting Pronouncements", related to the January 1, 2022 adoption of the new standard on " Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity". (7) Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations. Certain of the funds that Realogy Group receives from relocation receivables and related assets are required to be utilized to repay securitization obligations. These obligations are collateralized by $157 million and $132 million of underlying relocation receivables and other related relocation assets at March 31, 2022 and December 31, 2021, 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 for both the three months ended March 31, 2022 and 2021. 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 operations where interest is generally earned on such assets. These securitization obligations represent floating rate debt for which the average weighted interest rate was 3.2% and 3.9% for the three months ended March 31, 2022 and 2021, respectively. (8) As of March 31, 2022, the Company had $200 million of borrowing capacity under the Apple Ridge Funding LLC securitization program with $104 million being utilized leaving $96 million of available capacity. (9) In January 2022, the program was amended and the revolving loan facility was reduced from £5 million to £2 million. As of March 31, 2022, Realogy Group has, through a special purpose entity known as Cartus Financing Limited, agreements providing for a £2 million revolving loan facility (with the ability to increase up to £10 million) and a £5 million working capital facility. As of March 31, 2022, the Company had $20 million of borrowing capacity under the Cartus Financing Limited securitization program with $1 million being utilized leaving $19 million of available capacity. Maturities Table As of March 31, 2022, the combined aggregate amount of maturities for long-term borrowings for the remainder of 2022 and each of the next four years is as follows: Year Amount Remaining 2022 (a) $ 9 2023 423 2024 22 2025 184 2026 403 _______________ (a) Remaining 2022 includes amortization payments for the Extended Term Loan A. The current portion of long-term debt of $12 million shown on the Condensed Consolidated Balance Sheets consists of four quarters of amortization payments for the Extended Term Loan A. There were no outstanding borrowings under the Revolving Credit Facility as of March 31, 2022, however any amounts outstanding would be classified on the balance sheet as current due to the revolving nature and terms and conditions of the facilities. 5.25% Senior Notes Issuance and Redemption of 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes On January 10, 2022, the Company issued $1,000 million aggregate principal amount of 5.25% Senior Notes due 2030. On February 4, 2022, the Company used the net proceeds from the issuance, together with cash on hand, to redeem in full both the $550 million aggregate principal amount of 9.375% Senior Notes and the $550 million aggregate principal amount of 7.625% Senior Secured Second Lien Notes, each at a redemption price of 100% plus the applicable "make whole" premium, together with accrued interest to the redemption date on both such notes. The 5.25% Senior Notes are unsecured senior obligations of Realogy Group, mature on April 15, 2030 and bear interest at a rate of 5.25% per annum. Interest on the 5.25% Senior Notes will be payable semiannually to holders of record at the close of business on April 1 or October 1, immediately preceding the interest payment date on April 15 and October 15 of each year, commencing April 15, 2022. The 5.25% Senior Notes are jointly and severally guaranteed by each of Realogy Group's existing and future U.S. subsidiaries that is a guarantor under its Senior Secured Credit Facility and Term Loan A Facility or that guarantees certain other indebtedness in the future (other than the Co-Issuer), subject to certain exceptions, and by Realogy Holdings on an unsecured senior subordinated basis. The indenture governing the 5.25% Senior Notes contains various covenants that limit Realogy Group and its restricted subsidiaries’ ability to take certain actions and are materially consistent with the covenants included in the indenture governing the 5.75% Senior Notes. In particular, under the 5.25% Senior Notes and 5.75% Senior Notes, • the cumulative credit basket is not available to repurchase shares to the extent the consolidated leverage ratio is equal to or greater than 4.0 to 1.0 on a pro forma basis giving effect to such repurchase; • the cumulative credit basket for which restricted payments may otherwise be available is equal to 50% of Consolidated Net Income (as defined in such indenture) for the period (taken as one accounting period) from January 1, 2019 to the end of the most recently ended fiscal quarter for which internal financial statements are available at the time of any such restricted payment; • the consolidated leverage ratio must be less than 3.0 to 1.0 to use the unlimited general restricted payment basket; and • a restricted payment basket is available for up to $45 million of dividends per calendar year (with any actual dividends deducted from the available cumulative credit basket). The consolidated leverage ratio is measured by dividing Realogy Group's total net debt (excluding securitizations) by the trailing twelve-month EBITDA. EBITDA, as defined in the applicable indentures governing the Unsecured 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 governing the 5.25% Senior Notes and 5.75% Senior Notes 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. Exchangeable Senior Notes In June 2021, Realogy Group issued an aggregate principal amount of $403 million of 0.25% Exchangeable Senior Notes due 2026. The Company used a portion of the net proceeds from this offering to pay the cost of the exchangeable note hedge transactions described below (with such cost partially offset by the proceeds to the Company from the sale of the warrants pursuant to the warrant transactions described below). The Exchangeable Senior Notes are unsecured senior obligations of Realogy Group that mature on June 15, 2026. Interest on the Exchangeable Senior Notes is payable each year semiannually on June 15 and December 15. The Exchangeable Senior 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. Before March 15, 2026, noteholders will have the right to exchange their Exchangeable Senior Notes upon the occurrence of certain events described in the indenture governing the notes. On or after March 15, 2026, noteholders may exchange their Exchangeable Senior Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date of the notes. Upon exchange, Realogy Group will pay cash up to the aggregate principal amount of the Exchangeable Senior Notes to be exchanged and pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at Realogy Group's election, in respect of the remainder, if any, of its exchange obligation in excess of the aggregate principal amount of the Exchangeable Senior Notes being exchanged. The initial exchange rate for Exchangeable Senior Notes is 40.8397 shares of the Company’s common stock per $1,000 principal amount of notes (which represents an initial exchange price of approximately $24.49 per share of the Company’s common stock). The exchange rate and exchange price of the Exchangeable Senior Notes are subject to customary adjustments upon the occurrence of certain events. In addition, if a “Make-Whole Fundamental Change” (as defined in the indenture governing the Exchangeable Senior Notes) occurs, then the exchange rate of the Exchangeable Senior Notes will, in certain circumstances, be increased for a specified period of time. Initially, a maximum of approximately 23,013,139 shares of the Company’s common stock may be issued upon the exchange of the Exchangeable Senior Notes, based on the initial maximum exchange rate of 57.1755 shares of the Company’s common stock per $1,000 principal amount of notes, which is subject to customary anti-dilution adjustment provisions. The Exchangeable Senior Notes will be redeemable, in whole or in part (subject to a partial redemption limitation described in the indenture governing the notes), at Realogy Group's option at any time, and from time to time, on or after June 20, 2024 and on or before the 30th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Exchangeable Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the exchange price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date it sends the related redemption notice; and (2) the trading day immediately before the date it sends such notice. In addition, calling any Exchangeable Senior Notes for redemption will constitute a Make-Whole Fundamental Change with respect to that note, in which case the exchange rate applicable to the exchange of that note will be increased in certain circumstances if it is exchanged with an exchange date occurring during the period from, and including, the date Realogy Group sends the redemption notice to, and including, the second business day immediately before the related redemption date. If certain corporate events that constitute a “Fundamental Change” (as defined in the indenture governing the Exchangeable Senior Notes) of the Company occur, then noteholders may require Realogy Group to repurchase their Exchangeable Senior Notes at a cash repurchase price equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes, among other things, certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock. The indenture governing the Exchangeable Senior Notes also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the Exchangeable Senior Notes to become or to be declared due and payable. Under the accounting standards applicable at the time of issuance, exchangeable debt instruments that may be settled in cash were required to be separated into liability and equity components. The allocation to the liability component was based on the fair value of a similar instrument that does not contain an equity conversion option. Based on this debt to equity ratio, debt issuance costs are then allocated to the liability and equity components in a similar manner. Accordingly, at issuance on June 2, 2021, the Company allocated $319 million to the debt liability and $53 million to additional paid in capital. The difference between the principal amount of the Exchangeable Senior Notes and the liability component, inclusive of issuance costs, represented the debt discount, which the Company amortized to interest expense over the term of the Exchangeable Senior Notes using an effective interest rate of 4.375%. As a result, the Company recognized non-cash interest expense of $8 million related to the Exchangeable Senior Notes during 2021. Upon the adoption of ASU 2020-06 on January 1, 2022, the Company was required to account for its Exchangeable Senior Notes as a single liability resulting in the recombination of the debt liability and equity components. As a result, the Company derecognized the unamortized debt discount and related equity component associated with its Exchangeable Senior Notes resulting in an increase to Long-term debt of $65 million, a reduction to Additional paid-in capital of $53 million, net of taxes, and a reduction to Deferred tax liabilities of $17 million. The Company recorded a cumulative effect of adoption adjustment of $5 million, net of taxes, as a reduction to Accumulated deficit on January 1, 2022 related to the reversal of cumulative interest expense recognized for the amortization of the debt discount on its Exchangeable Senior Notes since issuance. See Note 1, "Basis of Presentation—Recently Adopted Accounting Pronouncements," for additional information. Exchangeable Note Hedge and Warrant Transactions In connection with the pricing of the Exchangeable Senior Notes (and with the exercise by the initial purchasers of the notes to purchase additional notes), Realogy Group entered into exchangeable note hedge transactions with certain counterparties (the "Option Counterparties"). The exchangeable note hedge transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Exchangeable Senior Notes, the number of shares of the Company’s common stock underlying the Notes. The total cost of such exchangeable note hedge transactions was $67 million. Concurrently with Realogy Group entering into the exchangeable note hedge transactions, the Company entered into warrant transactions with the Option Counterparties whereby the Company sold to the Option Counterparties warrants to purchase, subject to customary adjustments, up to the same number of shares of the Company’s common stock. The initial strike price of the warrant transactions is $30.6075 per share. The Company received $46 million in cash proceeds from the sale of these warrant transactions. Taken together, the purchase of such exchangeable note hedges and the sale of such warrants are intended to offset (in whole or in part) any potential dilution and/or cash payments upon the exchange of the Exchangeable Senior Notes, and to effectively increase the overall exchange price from $24.49 to $30.6075 per share. At issuance, the Company recorded a deferred tax liability of $20 million related to the Exchangeable Senior Notes debt discount and a deferred tax asset of $18 million related to the exchangeable note hedge transactions. The deferred tax liability and deferred tax asset were recorded net within deferred income taxes in the unaudited consolidated balance sheets upon issuance. The deferred tax liability related to the Exchangeable Senior Notes debt discount was reversed on January 1, 2022 upon the adoption of ASU 2020-06 as discussed above. Loss on the Early Extinguishment of Debt and Write-Off of Financing Costs As a result of the refinancing transactions in the first quarter of 2022, the Company recorded a loss on the early extinguishment of debt of $92 million, which includes $80 million related to the make-whole premiums paid in connection with the early redemption of the 7.625% Senior Secured Second Lien Notes and 9.375% Senior Notes, during the three months ended March 31, 2022. As a result of the refinancing transactions in the first quarter of 2021, the Company recorded a loss on the early extinguishment of debt of $17 million and wrote off certain financing costs of $1 million to interest expense during the three months ended March 31, 2021. |
Investments, Equity Method and
Investments, Equity Method and Joint Ventures | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments and Joint Ventures Disclosure | 5. EQUITY METHOD INVESTMENTS The Company applies the equity method of accounting when it has the ability to exercise significant influence over operating and financial policies of an investee but does not have a controlling financial or operating interest in the joint venture. The Company records its share of the net earnings or losses of its equity method investments on the “Equity in losses (earnings) of unconsolidated entities” line in the accompanying Condensed Consolidated Statements of Operations. Investments not accounted for using the equity method are measured at fair value with changes in fair value recognized in net income or in the case that an investment does not have readily determinable fair values, at cost minus impairment (if any) plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment. The Company has various equity method investments which are recorded within other non-current assets on the accompanying Condensed Consolidated Balance Sheets. The Company's share of equity earnings or losses related to these investments are included in the financial results of the Realogy Title Group and Realogy Brokerage Group reportable segments. The Company's equity method investment balances at March 31, 2022 and December 31, 2021 were as follows: March 31, 2022 December 31, 2021 Guaranteed Rate Affinity $ 86 $ 94 Title Insurance Underwriter Joint Venture 78 — Realogy Title Group other equity method investments 8 8 Realogy Title Group equity method investments 172 102 Realogy Brokerage Group equity method investments 33 29 Total equity method investments $ 205 $ 131 Guaranteed Rate Affinity, the Company's 49.9% minority-owned mortgage origination joint venture with Guaranteed Rate, Inc., originates and markets its mortgage lending services to the Company's real estate brokerage as well as other real estate brokerage companies across the country. While the Company has certain governance rights, the Company does not have a controlling financial or operating interest in the joint venture. The Company recorded equity in losses of $8 million and equity in earnings of $30 million related to its investment in Guaranteed Rate Affinity for the first quarter of 2022 and 2021, respectively. The Company received no cash dividends and $30 million in cash dividends from Guaranteed Rate Affinity during the three months ended March 31, 2022 and 2021, respectively. The Company’s 30% equity interest in the Title Insurance Underwriter Joint Venture is accounted for as an equity method investment. While the Company has certain governance rights, the Company does not have a controlling financial or operating interest in the joint venture. The Company recorded a $90 million investment at the closing of the Title Underwriter sale transaction which represents the fair value of the Company's equity interest based upon the agreed upon purchase price. Subsequent to the closing, the Company received a dividend equal to $12 million from the Title Insurance Underwriter Joint Venture. This dividend reduced the Company’s investment balance to $78 million as of March 31, 2022. The Company did not record equity in earnings or losses from the Title Insurance Underwriter Joint Venture during the first quarter of 2022. The Company recorded equity earnings from the operations of Realogy Title Group's various other title related equity method investments of $1 million during both the first quarter of 2022 and 2021. The Company received $1 million in cash dividends from these equity method investments during both the three months ended March 31, 2022 and 2021. Realogy Brokerage Group's equity method investments include RealSure, the Real Estate Auction Joint Venture and other brokerage related investments. RealSure, the Company's 49% owned joint venture with Home Partners of America, was formed in 2020 and is designed to offer home buyers and sellers options that give them a competitive edge when buying or selling a home, while also keeping the expertise of an independent sales agent at the center of the transaction. The Real Estate Auction Joint Venture, the Company's 50% owned unconsolidated joint venture with Sotheby's, was formed in 2021 and holds an 80% ownership stake in Concierge Auctions, a global luxury real estate auction marketplace that partners with real estate agents to host luxury online auctions for clients. While the Company has certain governance rights over these equity method investments, the Company does not have a controlling financial or operating interest in the joint ventures. The Company recorded equity in losses of $3 million from the operations of Realogy Brokerage Group's equity method investments during the first quarter of 2022 and recorded no equity in earnings or losses during the first quarter of 2021. The Company invested $7 million and $3 million of cash into these equity method investments during the three months ended March 31, 2022 and 2021, respectively. |
Earnings (Loss) Per Share (Note
Earnings (Loss) Per Share (Notes) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Earnings per share attributable to Realogy Holdings Basic earnings per common share is computed based on net income attributable to Realogy Holdings stockholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is computed consistently with the basic computation plus the effect of dilutive potential common shares outstanding during the period. Dilutive potential common shares includes shares that the Company could be obligated to issue from outstanding stock-based compensation awards and its Exchangeable Senior Notes and warrants if dilutive (see Note 4, "Short and Long-Term Debt", for further discussion). For purposes of computing diluted earnings per common share, weighted average common shares do not include potentially dilutive common shares if their effect is anti-dilutive. As such, the shares that the Company could be obligated to issue from its stock options, warrants and Exchangeable Senior Notes are excluded from the earnings per share calculation if the exercise or exchangeable price exceeds the average market price of common shares. The Company uses the treasury stock method to calculate the dilutive effect of outstanding stock-based compensation. If dilutive, the Company uses the if converted method to calculate the dilutive effect of its Exchangeable Senior Notes. These notes will have a dilutive impact when the average market price of the Company’s common stock exceeds the initial exchange price of $24.49 per share. The Exchangeable Senior Notes were not dilutive as of March 31, 2022 as the closing price of the Company's common stock as of March 31, 2022 was less than the initial exchange price. The f ollowing table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, (In millions, except per share data) 2022 2021 Numerator: Net income attributable to Realogy Holdings shareholders $ 23 $ 33 Denominator: Weighted average common shares outstanding (denominator for basic earnings per share calculation) 117.1 115.9 Dilutive effect of stock-based compensation awards (a) 3.3 2.5 Dilutive effect of Exchangeable Senior Notes and warrants (b) — Weighted average common shares outstanding (denominator for diluted earnings per share calculation) 120.4 118.4 Earnings per share attributable to Realogy Holdings shareholders: Basic earnings per share $ 0.20 $ 0.28 Diluted earnings per share $ 0.19 $ 0.28 _______________ (a) The three months ended March 31, 2022 and 2021, respectively, exclude 3.5 million and 5.8 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. (b) Shares to be provided to the Company from the exchangeable note hedge transactions purchased concurrently with its issuance of Exchangeable Senior Notes in June 2021 are anti-dilutive and therefore they are not treated as a reduction to its diluted shares. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The reportable segments presented below represent the Company’s 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 segments. Management evaluates the operating results of each of its reportable segments based upon revenue and Operating EBITDA. Operating EBITDA is defined by us as net income (loss) before depreciation and amortization, interest expense, net (other than relocation services interest for securitization assets and securitization obligations), income taxes, and other items that are not core to the operating activities of the Company such as restructuring charges, former parent legacy items, gains or losses on the early extinguishment of debt, impairments, gains or losses on discontinued operations and gains or losses on the sale of investments or other assets. The Company’s presentation of Operating EBITDA may not be comparable to similar measures used by other companies. Revenues (a) Three Months Ended March 31, 2022 2021 Realogy Franchise Group $ 267 $ 254 Realogy Brokerage Group 1,264 1,171 Realogy Title Group 190 201 Corporate and Other (b) (86) (79) Total Company $ 1,635 $ 1,547 _______________ (a) Transactions between segments are eliminated in consolidation. Revenues for Realogy Franchise Group include intercompany royalties and marketing fees paid by Realogy Brokerage Group of $86 million and $79 million for the three months ended March 31, 2022 and 2021, respectively. Such amounts are eliminated through the Corporate and Other line. (b) Includes the elimination of transactions between segments. Operating EBITDA Three Months Ended March 31, 2022 2021 Realogy Franchise Group $ 138 $ 141 Realogy Brokerage Group (40) (5) Realogy Title Group (3) 61 Corporate and Other (a) (26) (35) Total Company $ 69 $ 162 Less: Depreciation and amortization 51 51 Interest expense, net 18 38 Income tax expense 12 17 Restructuring costs, net (b) 4 5 Impairments (c) — 1 Loss on the early extinguishment of debt (d) 92 17 Gain on the sale of business, net (e) (131) — Net income attributable to Realogy Holdings and Realogy Group $ 23 $ 33 _______________ (a) Includes the elimination of transactions between segments. (b) The three months ended March 31, 2022 includes restructuring charges of $1 million at Realogy Franchise Group, $2 million at Realogy Brokerage Group and $1 million at Corporate and Other. The three months ended March 31, 2021 includes restructuring charges of $2 million at Realogy Franchise Group, $2 million at Realogy Brokerage Group and $1 million at Corporate and Other. (c) Non-cash impairments for the three months ended March 31, 2021 relate to lease asset impairments. (d) Loss on the early extinguishment of debt is recorded in Corporate and Other. (e) Gain on the sale of business, net is recorded in Realogy Title Group related to the sale of the Title Underwriter. |
Basis Of Presentation Basis of
Basis Of Presentation Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fair Value Measurement, Policy | The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level Input: Input Definitions: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The availability of observable inputs can vary from asset to asset and is affected by a wide variety of factors, including, for example, the type of asset, whether the asset is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level III. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value of financial instruments is generally determined by reference to quoted market values. In cases where quoted market prices are not available, fair value is based on estimates using present value or other valuation techniques, as appropriate. The fair value of interest rate swaps is determined based upon a discounted cash flow approach. The Company measures financial instruments at fair value on a recurring basis and recognizes transfers within the fair value hierarchy at the end of the fiscal quarter in which the change in circumstances that caused the transfer occurred. The following table summarizes fair value measurements by level at March 31, 2022 for assets and liabilities measured at fair value on a recurring basis: Level I Level II Level III Total Deferred compensation plan assets (included in other non-current assets) $ 1 $ — $ — $ 1 Interest rate swaps (included in other current and non-current liabilities) — 15 — 15 Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) — — 11 11 The following table summarizes fair value measurements by level at December 31, 2021 for assets and liabilities measured at fair value on a recurring basis: Level I Level II Level III Total Deferred compensation plan assets (included in other non-current assets) $ 1 $ — $ — $ 1 Interest rate swaps (included in other current and non-current liabilities) — 46 — 46 Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) — — 9 9 The fair value of the Company’s contingent consideration for acquisitions is measured using a probability weighted-average discount rate to estimate future cash flows based upon the likelihood of achieving future operating results for individual acquisitions. These assumptions are deemed to be unobservable inputs and as such the Company’s contingent consideration is classified within Level III of the valuation hierarchy. The Company reassesses the fair value of the contingent consideration liabilities on a quarterly basis. The following table presents changes in Level III financial liabilities measured at fair value on a recurring basis: Level III Fair value of contingent consideration at December 31, 2021 $ 9 Additions: contingent consideration related to acquisitions completed during the period 2 Reductions: payments of contingent consideration — Changes in fair value (reflected in general and administrative expenses) — Fair value of contingent consideration at March 31, 2022 $ 11 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: March 31, 2022 December 31, 2021 Debt Principal Amount Estimated Principal Amount Estimated Revolving Credit Facility — — — — Extended Term Loan A 231 227 232 231 7.625% Senior Secured Second Lien Notes — — 550 583 4.875% Senior Notes 407 408 407 418 9.375% Senior Notes — — 550 596 5.75% Senior Notes 900 844 900 923 5.25% Senior Notes 1,000 918 — — 0.25% Exchangeable Senior Notes 403 365 403 399 _______________ (a) The fair value of the Company's indebtedness is categorized as Level II. |
Income Tax, Policy | 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 $12 million and $17 million for the three months ended March 31, 2022 and 2021, respectively. |
Derivatives, Policy | Derivative Instruments The Company records derivatives and hedging activities on the balance sheet at their respective fair values. The Company enters into interest rate swaps to manage its exposure to changes in interest rates associated with its variable rate borrowings. As of March 31, 2022, the Company had interest rate swaps with an aggregate notional value of $1,000 million to offset the variability in cash flows resulting from the term loan facilities as follows: Notional Value (in millions) Commencement Date Expiration Date $450 November 2017 November 2022 $400 August 2020 August 2025 $150 November 2022 November 2027 The swaps help to protect our outstanding variable rate borrowings from future interest rate volatility. The Company has not elected to utilize hedge accounting for these interest rate swaps; therefore, any change in fair value is recorded in the Condensed Consolidated Statements of Operations. The fair value of derivative instruments was as follows: Not Designated as Hedging Instruments Balance Sheet Location March 31, 2022 December 31, 2021 Interest rate swap contracts Other current and non-current liabilities 15 46 The effect of derivative instruments on earnings was as follows: Derivative Instruments Not Designated as Hedging Instruments Location of Gain Recognized for Derivative Instruments Gain Recognized on Derivatives Three Months Ended March 31, 2022 2021 Interest rate swap contracts Interest expense $ (26) $ (13) |
Revenue, Policy | 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 accounting 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 March 31, Realogy Franchise Group Realogy Brokerage Group Realogy Title Corporate and Other Total 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Gross commission income (a) $ — $ — $ 1,247 $ 1,154 $ — $ — $ — $ — $ 1,247 $ 1,154 Service revenue (b) 55 47 6 7 185 195 — — 246 249 Franchise fees (c) 180 181 — — — — (81) (76) 99 105 Other (d) 32 26 11 10 5 6 (5) (3) 43 39 Net revenues $ 267 $ 254 $ 1,264 $ 1,171 $ 190 $ 201 $ (86) $ (79) $ 1,635 $ 1,547 ______________ (a) Gross commission income at Realogy Brokerage Group is recognized at a point in time at the closing of a homesale transaction. (b) Service revenue primarily consists of title and escrow fees at Realogy Title Group and are recognized at a point in time at the closing of a homesale transaction. Service revenue at Realogy Franchise Group includes relocation fees, which are recognized as revenue when or as the related performance obligation is satisfied dependent on the type of service performed, and fees related to leads and related services, which are recognized at a point in time at the closing of a homesale transaction or at the completion of the related service. (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). (d) Other revenue is comprised of brand marketing funds received from franchisees at Realogy Franchise Group 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 revenue contracts by reportable segment for the period: Beginning Balance at January 1, 2022 Additions during the period Recognized as Revenue during the period Ending Balance at March 31, 2022 Realogy Franchise Group: Deferred area development fees (a) $ 41 $ 1 $ (1) $ 41 Deferred brand marketing fund fees (b) 25 23 (26) 22 Deferred outsourcing management fees (c) 4 12 (11) 5 Other deferred income related to revenue contracts 9 15 (10) 14 Total Realogy Franchise Group 79 51 (48) 82 Realogy Brokerage Group: Advanced commissions related to development business (d) 11 1 (1) 11 Other deferred income related to revenue contracts 3 2 (1) 4 Total Realogy Brokerage Group 14 3 (2) 15 Total $ 93 $ 54 $ (50) $ 97 _______________ (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 the related franchise agreement as consideration for the right to access and benefit 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) The Company earns revenues from outsourcing management fees charged to clients that may cover several of the various relocation services according to the clients' specific needs. Outsourcing management fees are recorded as deferred revenue when billed (usually at the start of the relocation) and are recognized as revenue over the average time period required to complete the transferee's move, or a phase of the move that the fee covers, which is typically 3 to 6 months depending on the move type. (d) New development closings generally have a development period of between 18 and 24 months from contracted date to closing. |
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy | Allowance for Doubtful Accounts The Company estimates the allowance necessary to provide for uncollectible accounts receivable. The estimate is based on historical experience, combined with a review of current conditions and 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 based upon the age profile of the receivables and specific payment issues, combined with reasonable and supportable forecasts of future losses. |
New Accounting Pronouncements, Policy | The Company considers the applicability and impact of all Accounting Standards Updates ("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. Recently Adopted Accounting Pronouncements On January 1, 2022, the Company adopted ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for instruments with characteristics of liabilities and equity, including convertible debt. ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock resulting in fewer embedded conversion features being separately recognized from the host contract and the interest rate of more convertible debt instruments being closer to the coupon interest rate, as compared with prior guidance. In addition, ASU 2020-06 changes the diluted earnings per share calculation for instruments that may be settled in cash or shares and for convertible instruments requiring the use of the if-converted method. ASU 2020-06 is effective for reporting periods beginning on or after December 15, 2021 and permits the use of either the modified retrospective or fully retrospective method of transition. The Company adopted ASU 2020-06 on January 1, 2022 using the modified retrospective method. In accordance with the transition guidance, the Company applied the new guidance to its Exchangeable Senior Notes that were outstanding as of January 1, 2022 with the cumulative effect of adoption recognized as an adjustment to the opening balance of Accumulated deficit. Upon adoption, the Company re-combined the liability and equity components associated with the Exchangeable Senior Notes into single liability and derecognized the unamortized debt discount and related equity component. This resulted in an increase to Long-term debt of $65 million, a reduction to Additional paid-in capital of $53 million, net of taxes, and a reduction to Deferred tax liabilities of $17 million. The Company recorded a cumulative effect of adoption adjustment of $5 million, net of taxes, as a reduction to Accumulated deficit on January 1, 2022 related to the reversal of cumulative interest expense recognized for the amortization of the debt discount on its Exchangeable Senior Notes since issuance. The cumulative effect of adoption on the Company's consolidated balance sheets as of January 1, 2022 is summarized below: Balance as of December 31, 2021 Impact of the adoption of ASU 2020-06 Balance as of January 1, 2022 after the adoption of ASU 2020-06 LIABILITIES AND EQUITY Long-term debt $ 2,940 $ 65 $ 3,005 Deferred income taxes 353 (17) 336 Total liabilities 5,018 48 5,066 Equity: Additional paid-in capital 4,947 (53) 4,894 Accumulated deficit (2,712) 5 (2,707) Total stockholders' equity 2,186 (48) 2,138 Total equity 2,192 (48) 2,144 Total liabilities and equity $ 7,210 $ — $ 7,210 Furthermore, upon adoption, the Company is required to use the "if converted" method when calculating the dilutive impact of convertible debt on earnings per share, however this change did not have a financial impact upon adoption as the Company's Exchangeable Senior Notes have been antidilutive since issuance. |
Investments, Equity Method an_2
Investments, Equity Method and Joint Ventures (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments, Policy | The Company applies the equity method of accounting when it has the ability to exercise significant influence over operating and financial policies of an investee but does not have a controlling financial or operating interest in the joint venture. The Company records its share of the net earnings or losses of its equity method investments on the “Equity in losses (earnings) of unconsolidated entities” line in the accompanying Condensed Consolidated Statements of Operations. Investments not accounted for using the equity method are measured at fair value with changes in fair value recognized in net income or in the case that an investment does not have readily determinable fair values, at cost minus impairment (if any) plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment. |
Earnings Per Share (Policies)
Earnings Per Share (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Policy | Basic earnings per common share is computed based on net income attributable to Realogy Holdings stockholders divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is computed consistently with the basic computation plus the effect of dilutive potential common shares outstanding during the period. Dilutive potential common shares includes shares that the Company could be obligated to issue from outstanding stock-based compensation awards and its Exchangeable Senior Notes and warrants if dilutive (see Note 4, "Short and Long-Term Debt", for further discussion). For purposes of computing diluted earnings per common share, weighted average common shares do not include potentially dilutive common shares if their effect is anti-dilutive. As such, the shares that the Company could be obligated to issue from its stock options, warrants and Exchangeable Senior Notes are excluded from the earnings per share calculation if the exercise or exchangeable price exceeds the average market price of common shares. The Company uses the treasury stock method to calculate the dilutive effect of outstanding stock-based compensation. If dilutive, the Company uses the if converted method to calculate the dilutive effect of its Exchangeable Senior Notes. These notes will have a dilutive impact when the average market price of the Company’s common stock exceeds the initial exchange price of $24.49 per share. The Exchangeable Senior Notes were not dilutive as of March 31, 2022 as the closing price of the Company's common stock as of March 31, 2022 was less than the initial exchange price. |
Basis Of Presentation (Tables)
Basis Of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fair Value Hierarchy | The following table summarizes fair value measurements by level at March 31, 2022 for assets and liabilities measured at fair value on a recurring basis: Level I Level II Level III Total Deferred compensation plan assets (included in other non-current assets) $ 1 $ — $ — $ 1 Interest rate swaps (included in other current and non-current liabilities) — 15 — 15 Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) — — 11 11 The following table summarizes fair value measurements by level at December 31, 2021 for assets and liabilities measured at fair value on a recurring basis: Level I Level II Level III Total Deferred compensation plan assets (included in other non-current assets) $ 1 $ — $ — $ 1 Interest rate swaps (included in other current and non-current liabilities) — 46 — 46 Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) — — 9 9 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | 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, 2021 $ 9 Additions: contingent consideration related to acquisitions completed during the period 2 Reductions: payments of contingent consideration — Changes in fair value (reflected in general and administrative expenses) — Fair value of contingent consideration at March 31, 2022 $ 11 |
Fair Value, by Balance Sheet Grouping | 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: March 31, 2022 December 31, 2021 Debt Principal Amount Estimated Principal Amount Estimated Revolving Credit Facility — — — — Extended Term Loan A 231 227 232 231 7.625% Senior Secured Second Lien Notes — — 550 583 4.875% Senior Notes 407 408 407 418 9.375% Senior Notes — — 550 596 5.75% Senior Notes 900 844 900 923 5.25% Senior Notes 1,000 918 — — 0.25% Exchangeable Senior Notes 403 365 403 399 _______________ (a) The fair value of the Company's indebtedness is categorized as Level II. |
Schedule of Derivative Instruments | As of March 31, 2022, the Company had interest rate swaps with an aggregate notional value of $1,000 million to offset the variability in cash flows resulting from the term loan facilities as follows: Notional Value (in millions) Commencement Date Expiration Date $450 November 2017 November 2022 $400 August 2020 August 2025 $150 November 2022 November 2027 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value of derivative instruments was as follows: Not Designated as Hedging Instruments Balance Sheet Location March 31, 2022 December 31, 2021 Interest rate swap contracts Other current and non-current liabilities 15 46 |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The effect of derivative instruments on earnings was as follows: Derivative Instruments Not Designated as Hedging Instruments Location of Gain Recognized for Derivative Instruments Gain Recognized on Derivatives Three Months Ended March 31, 2022 2021 Interest rate swap contracts Interest expense $ (26) $ (13) |
Disaggregation of Revenue | 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 March 31, Realogy Franchise Group Realogy Brokerage Group Realogy Title Corporate and Other Total 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Gross commission income (a) $ — $ — $ 1,247 $ 1,154 $ — $ — $ — $ — $ 1,247 $ 1,154 Service revenue (b) 55 47 6 7 185 195 — — 246 249 Franchise fees (c) 180 181 — — — — (81) (76) 99 105 Other (d) 32 26 11 10 5 6 (5) (3) 43 39 Net revenues $ 267 $ 254 $ 1,264 $ 1,171 $ 190 $ 201 $ (86) $ (79) $ 1,635 $ 1,547 ______________ (a) Gross commission income at Realogy Brokerage Group is recognized at a point in time at the closing of a homesale transaction. (b) Service revenue primarily consists of title and escrow fees at Realogy Title Group and are recognized at a point in time at the closing of a homesale transaction. Service revenue at Realogy Franchise Group includes relocation fees, which are recognized as revenue when or as the related performance obligation is satisfied dependent on the type of service performed, and fees related to leads and related services, which are recognized at a point in time at the closing of a homesale transaction or at the completion of the related service. (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). (d) Other revenue is comprised of brand marketing funds received from franchisees at Realogy Franchise Group and other miscellaneous revenues across all of the business segments. |
Deferred Revenue by Arrangement | The following table shows the change in the Company's contract liabilities (deferred revenue) related to revenue contracts by reportable segment for the period: Beginning Balance at January 1, 2022 Additions during the period Recognized as Revenue during the period Ending Balance at March 31, 2022 Realogy Franchise Group: Deferred area development fees (a) $ 41 $ 1 $ (1) $ 41 Deferred brand marketing fund fees (b) 25 23 (26) 22 Deferred outsourcing management fees (c) 4 12 (11) 5 Other deferred income related to revenue contracts 9 15 (10) 14 Total Realogy Franchise Group 79 51 (48) 82 Realogy Brokerage Group: Advanced commissions related to development business (d) 11 1 (1) 11 Other deferred income related to revenue contracts 3 2 (1) 4 Total Realogy Brokerage Group 14 3 (2) 15 Total $ 93 $ 54 $ (50) $ 97 _______________ (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 the related franchise agreement as consideration for the right to access and benefit 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) The Company earns revenues from outsourcing management fees charged to clients that may cover several of the various relocation services according to the clients' specific needs. Outsourcing management fees are recorded as deferred revenue when billed (usually at the start of the relocation) and are recognized as revenue over the average time period required to complete the transferee's move, or a phase of the move that the fee covers, which is typically 3 to 6 months depending on the move type. (d) New development closings generally have a development period of between 18 and 24 months from contracted date to closing. |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of adoption on the Company's consolidated balance sheets as of January 1, 2022 is summarized below: Balance as of December 31, 2021 Impact of the adoption of ASU 2020-06 Balance as of January 1, 2022 after the adoption of ASU 2020-06 LIABILITIES AND EQUITY Long-term debt $ 2,940 $ 65 $ 3,005 Deferred income taxes 353 (17) 336 Total liabilities 5,018 48 5,066 Equity: Additional paid-in capital 4,947 (53) 4,894 Accumulated deficit (2,712) 5 (2,707) Total stockholders' equity 2,186 (48) 2,138 Total equity 2,192 (48) 2,144 Total liabilities and equity $ 7,210 $ — $ 7,210 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill by segment and changes in the carrying amount | Goodwill by reporting unit and changes in the carrying amount are as follows: Realogy Franchise Group Realogy Brokerage Group Realogy Total Balance at December 31, 2021 $ 2,506 $ 259 $ 158 $ 2,923 Goodwill acquired (a) — 5 1 6 Goodwill reduction for sale of a business (b) — — (32) (32) Balance at March 31, 2022 $ 2,506 $ 264 $ 127 $ 2,897 Accumulated impairment losses (c) $ 1,447 $ 808 $ 324 $ 2,579 _______________ (a) Goodwill acquired during the three months ended March 31, 2022 relates to the acquisition of two real estate brokerage operations and one title and settlement operation. (b) Goodwill reduction during the three months ended March 31, 2022 relates to the sale of the Title Underwriter (see Note 1, "Basis of Presentation", for a description of the transaction). (c) Includes impairment charges which reduced goodwill by $540 million during 2020, $253 million during 2019, $1,279 million during 2008 and $507 million during 2007. |
Intangible Assets | Intangible assets are as follows: As of March 31, 2022 As of December 31, 2021 Gross Accumulated Net Gross Accumulated Net Amortizable—Franchise agreements (a) $ 2,010 $ 1,006 $ 1,004 $ 2,010 $ 989 $ 1,021 Indefinite life—Trademarks (b) $ 687 $ 687 $ 687 $ 687 Other Intangibles Amortizable—License agreements (c) $ 45 $ 14 $ 31 $ 45 $ 14 $ 31 Amortizable—Customer relationships (d) 456 350 106 456 345 111 Indefinite life—Title plant shares (e) 24 24 25 25 Amortizable—Other (f) 13 10 3 16 12 4 Total Other Intangibles $ 538 $ 374 $ 164 $ 542 $ 371 $ 171 _______________ (a) Generally amortized over a period of 30 years. (b) Primarily related to real estate franchise brands, title and relocation 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 Realogy Franchise Group, Realogy Title Group and Realogy Brokerage Group. These relationships are being amortized over a period of 7 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) 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 | Intangible asset amortization expense is as follows: Three Months Ended March 31, 2022 2021 Franchise agreements $ 17 $ 17 Customer relationships 5 6 Other 2 — Total $ 24 $ 23 |
Accrued Expenses And Other Cu_2
Accrued Expenses And Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of: March 31, 2022 December 31, 2021 Accrued payroll and related employee costs $ 142 $ 284 Advances from clients 26 31 Accrued volume incentives 50 60 Accrued commissions 60 49 Restructuring accruals 9 10 Deferred income 65 59 Accrued interest 31 42 Current portion of finance lease liabilities 11 11 Due to former parent 20 19 Other 103 101 Total accrued expenses and other current liabilities $ 517 $ 666 |
Short And Long-Term Debt (Table
Short And Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Total Indebtedness | Total indebtedness is as follows: March 31, 2022 December 31, 2021 Revolving Credit Facility $ — $ — Extended Term Loan A 230 231 7.625% Senior Secured Second Lien Notes — 542 4.875% Senior Notes 406 406 9.375% Senior Notes — 545 5.75% Senior Notes 899 898 5.25% Senior Notes 983 — 0.25% Exchangeable Senior Notes 393 328 Total Short-Term & Long-Term Debt $ 2,911 $ 2,950 Securitization Obligations: Apple Ridge Funding LLC $ 104 $ 116 Cartus Financing Limited 1 2 Total Securitization Obligations $ 105 $ 118 |
Schedule of Debt | As of March 31, 2022, the Company’s borrowing arrangements were as follows: Interest Expiration Principal Amount Unamortized Discount (Premium) and Debt Issuance Costs Net Amount Revolving Credit Facility (1) (2) (3) $ — $ * $ — Extended Term Loan A (2) (4) February 2025 (3) 231 1 230 Senior Notes 4.875% June 2023 407 1 406 Senior Notes 5.75% January 2029 900 1 899 Senior Notes (5) 5.25% April 2030 1,000 17 983 Exchangeable Senior Notes (6) 0.25% June 2026 403 10 393 Total Short-Term & Long-Term Debt $ 2,941 $ 30 $ 2,911 Securitization obligations: (7) Apple Ridge Funding LLC (8) June 2022 $ 104 $ * $ 104 Cartus Financing Limited (9) September 2022 1 * 1 Total Securitization Obligations $ 105 $ — $ 105 _______________ * The debt issuance costs related to our Revolving Credit Facility and securitization obligations are classified as a deferred financing asset within other assets. (1) The Revolving Credit Facility includes available capacity under the Non-extended Revolving Credit Commitment of $477 million and available capacity under the Extended Revolving Credit Commitment of $948 million. As of March 31, 2022, there were no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. On May 2, 2022, the Company had no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. (2) Interest rates with respect to revolving loans under the Revolving Credit Facility and outstanding borrowings under the Extended Term Loan A at March 31, 2022 are 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 1.75% and the ABR margin was 0.75% for the three months ended March 31, 2022. (3) The maturity date of the Non-Extended Revolving Credit Commitment under the Revolving Credit Facility is February 2023. The maturity date of each of the Extended Revolving Credit Commitment and Extended Term Loan A may spring forward to March 2, 2023 if on or before March 2, 2023, the 4.875% Senior Notes have not been extended, refinanced or replaced to have a maturity date after May 10, 2025 (or are not otherwise discharged, defeased or repaid by March 2, 2023). (4) The Extended Term Loan A has quarterly amortization payments equal to a percentage per quarter of the original principal amount of $237 million, as follows: 0.625% per quarter from June 30, 2021 to March 31, 2022; 1.25% per quarter from June 30, 2022 to March 31, 2023; 1.875% per quarter from June 30, 2023 to March 31, 2024; and 2.50% per quarter for periods ending on or after June 30, 2024, with the balance of the Extended Term Loan A due at maturity on February 8, 2025. (5) In the first quarter of 2022, the Company issued $1,000 million aggregate principal amount of 5.25% Senior Notes due 2030 and used net proceeds, together with cash on hand, to redeem in full both the outstanding 9.375% Senior Notes due 2027 and the 7.625% Senior Secured Second Lien Notes due 2025. See below under the header "5.25% Senior Notes Issuance and Redemption of 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes" for a description of these transactions. (6) See below under the header "Exchangeable Senior Notes" for additional information and Note 1, "Basis of Presentation—Recently Adopted Accounting Pronouncements", related to the January 1, 2022 adoption of the new standard on " Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity". (7) Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations. Certain of the funds that Realogy Group receives from relocation receivables and related assets are required to be utilized to repay securitization obligations. These obligations are collateralized by $157 million and $132 million of underlying relocation receivables and other related relocation assets at March 31, 2022 and December 31, 2021, 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 for both the three months ended March 31, 2022 and 2021. 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 operations where interest is generally earned on such assets. These securitization obligations represent floating rate debt for which the average weighted interest rate was 3.2% and 3.9% for the three months ended March 31, 2022 and 2021, respectively. (8) As of March 31, 2022, the Company had $200 million of borrowing capacity under the Apple Ridge Funding LLC securitization program with $104 million being utilized leaving $96 million of available capacity. (9) In January 2022, the program was amended and the revolving loan facility was reduced from £5 million to £2 million. As of March 31, 2022, Realogy Group has, through a special purpose entity known as Cartus Financing Limited, agreements providing for a £2 million revolving loan facility (with the ability to increase up to £10 million) and a £5 million working capital facility. As of March 31, 2022, the Company had $20 million of borrowing capacity under the Cartus Financing Limited securitization program with $1 million being utilized leaving $19 million of available capacity. |
Schedule of Maturities of Long-term Debt | Year Amount Remaining 2022 (a) $ 9 2023 423 2024 22 2025 184 2026 403 _______________ (a) Remaining 2022 includes amortization payments for the Extended Term Loan A. The current portion of long-term debt of $12 million shown on the Condensed Consolidated Balance Sheets consists of four quarters of amortization payments for the Extended Term Loan A. There were no outstanding borrowings under the Revolving Credit Facility as of March 31, 2022, however any amounts outstanding would be classified on the balance sheet as current due to the revolving nature and terms and conditions of the facilities. |
Investments, Equity Method an_3
Investments, Equity Method and Joint Ventures (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | The Company's equity method investment balances at March 31, 2022 and December 31, 2021 were as follows: March 31, 2022 December 31, 2021 Guaranteed Rate Affinity $ 86 $ 94 Title Insurance Underwriter Joint Venture 78 — Realogy Title Group other equity method investments 8 8 Realogy Title Group equity method investments 172 102 Realogy Brokerage Group equity method investments 33 29 Total equity method investments $ 205 $ 131 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Stockholders Equity [Table Text Block] | Three Months Ended March 31, 2022 Common Stock Additional Accumulated Accumulated Non- Total Shares Amount Balance at December 31, 2021 116.6 $ 1 $ 4,947 $ (2,712) $ (50) $ 6 $ 2,192 Cumulative effect adjustment due to the adoption of ASU 2020-06 — — (53) 5 — — (48) Net income — — — 23 — — 23 Other comprehensive income — — — — 1 — 1 Exercise of stock options 0.1 — 2 — — — 2 Stock-based compensation — — 6 — — — 6 Issuance of shares for vesting of equity awards 2.3 — — — — — — Shares withheld for taxes on equity awards (0.9) — (16) — — — (16) Dividends — — — — — (3) (3) Balance at March 31, 2022 118.1 $ 1 $ 4,886 $ (2,684) $ (49) $ 3 $ 2,157 Three Months Ended March 31, 2021 Common Stock Additional Accumulated Accumulated Non- Total Shares Amount Balance at December 31, 2020 115.5 $ 1 $ 4,876 $ (3,055) $ (59) $ 4 $ 1,767 Net income — — — 33 — 1 34 Stock-based compensation — — 6 — — — 6 Issuance of shares for vesting of equity awards 1.4 — — — — — — Shares withheld for taxes on equity awards (0.5) — (8) — — — (8) Dividends — — — — — (2) (2) Balance at March 31, 2021 116.4 $ 1 $ 4,874 $ (3,022) $ (59) $ 3 $ 1,797 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The f ollowing table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, (In millions, except per share data) 2022 2021 Numerator: Net income attributable to Realogy Holdings shareholders $ 23 $ 33 Denominator: Weighted average common shares outstanding (denominator for basic earnings per share calculation) 117.1 115.9 Dilutive effect of stock-based compensation awards (a) 3.3 2.5 Dilutive effect of Exchangeable Senior Notes and warrants (b) — Weighted average common shares outstanding (denominator for diluted earnings per share calculation) 120.4 118.4 Earnings per share attributable to Realogy Holdings shareholders: Basic earnings per share $ 0.20 $ 0.28 Diluted earnings per share $ 0.19 $ 0.28 _______________ (a) The three months ended March 31, 2022 and 2021, respectively, exclude 3.5 million and 5.8 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. (b) Shares to be provided to the Company from the exchangeable note hedge transactions purchased concurrently with its issuance of Exchangeable Senior Notes in June 2021 are anti-dilutive and therefore they are not treated as a reduction to its diluted shares. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Revenues | Revenues (a) Three Months Ended March 31, 2022 2021 Realogy Franchise Group $ 267 $ 254 Realogy Brokerage Group 1,264 1,171 Realogy Title Group 190 201 Corporate and Other (b) (86) (79) Total Company $ 1,635 $ 1,547 _______________ (a) Transactions between segments are eliminated in consolidation. Revenues for Realogy Franchise Group include intercompany royalties and marketing fees paid by Realogy Brokerage Group of $86 million and $79 million for the three months ended March 31, 2022 and 2021, respectively. Such amounts are eliminated through the Corporate and Other line. (b) Includes the elimination of transactions between segments. |
Operating EBITDA | Operating EBITDA Three Months Ended March 31, 2022 2021 Realogy Franchise Group $ 138 $ 141 Realogy Brokerage Group (40) (5) Realogy Title Group (3) 61 Corporate and Other (a) (26) (35) Total Company $ 69 $ 162 Less: Depreciation and amortization 51 51 Interest expense, net 18 38 Income tax expense 12 17 Restructuring costs, net (b) 4 5 Impairments (c) — 1 Loss on the early extinguishment of debt (d) 92 17 Gain on the sale of business, net (e) (131) — Net income attributable to Realogy Holdings and Realogy Group $ 23 $ 33 _______________ (a) Includes the elimination of transactions between segments. (b) The three months ended March 31, 2022 includes restructuring charges of $1 million at Realogy Franchise Group, $2 million at Realogy Brokerage Group and $1 million at Corporate and Other. The three months ended March 31, 2021 includes restructuring charges of $2 million at Realogy Franchise Group, $2 million at Realogy Brokerage Group and $1 million at Corporate and Other. (c) Non-cash impairments for the three months ended March 31, 2021 relate to lease asset impairments. (d) Loss on the early extinguishment of debt is recorded in Corporate and Other. (e) Gain on the sale of business, net is recorded in Realogy Title Group related to the sale of the Title Underwriter. |
Supplemental Balance Sheet (Det
Supplemental Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Supplemental Balance Sheet [Abstract] | ||
Accounts Receivable, Allowance for Credit Loss, Current (Parenthetical) | $ 11 | $ 11 |
Basis Of Presentation Sale of t
Basis Of Presentation Sale of the Title Insurance Underwriter (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Title Insurance Underwriter - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 29, 2022 | |
Sale of the Title Insurance Underwriter [Line Items] | ||
Disposal Group Consideration Received | $ 210 | |
Equity Method Investment, Ownership Percentage | 30.00% | |
Disposal Group Cash Consideration Received | $ 208 | |
Net Assets Disposed | (166) | |
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents | 152 | |
Disposal Group, Including Discontinued Operation, Goodwill, Noncurrent | $ 32 | |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ (131) |
Basis Of Presentation Financial
Basis Of Presentation Financial Instruments - Fair Value Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Rollforward [Roll Forward] | ||
Fair value of contingent consideration at December 31, 2021 | $ 9 | |
Additions: contingent consideration related to acquisitions completed during the period | 2 | |
Reductions: payments of contingent consideration | 0 | |
Changes in fair value (reflected in general and administrative expenses) | 0 | |
Fair value of contingent consideration at March 31, 2022 | 11 | |
Fair Value, Measurements, Recurring | Deferred Compensation Plan Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (included in other non-current assets) | 1 | $ 1 |
Fair Value, Measurements, Recurring | Deferred Compensation Plan Assets | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (included in other non-current assets) | 1 | 1 |
Fair Value, Measurements, Recurring | Deferred Compensation Plan Assets | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (included in other non-current assets) | 0 | 0 |
Fair Value, Measurements, Recurring | Deferred Compensation Plan Assets | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets (included in other non-current assets) | 0 | 0 |
Fair Value, Measurements, Recurring | Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps (included in other current and non-current liabilities) | 15 | 46 |
Fair Value, Measurements, Recurring | Interest Rate Swap | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps (included in other current and non-current liabilities) | 0 | 0 |
Fair Value, Measurements, Recurring | Interest Rate Swap | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps (included in other current and non-current liabilities) | 15 | 46 |
Fair Value, Measurements, Recurring | Interest Rate Swap | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps (included in other current and non-current liabilities) | 0 | 0 |
Fair Value, Measurements, Recurring | Contingent Consideration for Acquisitions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | 11 | 9 |
Fair Value, Measurements, Recurring | Contingent Consideration for Acquisitions | Level I | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | 0 | 0 |
Fair Value, Measurements, Recurring | Contingent Consideration for Acquisitions | Level II | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | 0 | 0 |
Fair Value, Measurements, Recurring | Contingent Consideration for Acquisitions | Level III | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration for acquisitions (included in accrued expenses and other current liabilities and other non-current liabilities) | $ 11 | $ 9 |
Basis Of Presentation Financi_2
Basis Of Presentation Financial Instruments - Fair Value Indebtedness Table (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Jan. 10, 2022 | Dec. 31, 2021 | Jun. 02, 2021 | Jan. 27, 2021 | ||
Long-term debt principal amount | $ 2,941 | ||||||
Secured Debt | Extended Term Loan A | |||||||
Long-term debt principal amount | 231 | $ 232 | $ 237 | ||||
Long-term debt fair value | [1] | 227 | 231 | ||||
Secured Debt | 7.625% Senior Secured Second Lien Notes | |||||||
Long-term debt principal amount | 0 | 550 | |||||
Long-term debt fair value | [1] | 0 | 583 | ||||
Senior Notes | 4.875% Senior Notes | |||||||
Long-term debt principal amount | 407 | 407 | |||||
Long-term debt fair value | [1] | 408 | 418 | ||||
Senior Notes | 9.375% Senior Notes | |||||||
Long-term debt principal amount | 0 | 550 | |||||
Long-term debt fair value | [1] | 0 | 596 | ||||
Senior Notes | 5.75% Senior Notes | |||||||
Long-term debt principal amount | 900 | 900 | |||||
Long-term debt fair value | [1] | 844 | 923 | ||||
Senior Notes | 5.25% Senior Notes | |||||||
Long-term debt principal amount | 1,000 | $ 1,000 | 0 | ||||
Long-term debt fair value | [1] | 918 | 0 | ||||
Convertible Debt | 0.25% Exchangeable Senior Notes | |||||||
Long-term debt principal amount | 403 | 403 | $ 403 | ||||
Long-term debt fair value | [1] | 365 | 399 | ||||
Line of Credit | Revolving Credit Facility | |||||||
Line of credit facility outstanding | 0 | [2],[3],[4] | 0 | ||||
Line of credit facility fair value | [1] | $ 0 | $ 0 | ||||
[1] | The fair value of the Company's indebtedness is categorized as Level II. | ||||||
[2] | Interest rates with respect to revolving loans under the Revolving Credit Facility and outstanding borrowings under the Extended Term Loan A at March 31, 2022 are 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 1.75% and the ABR margin was 0.75% for the three months ended March 31, 2022. | ||||||
[3] | The Revolving Credit Facility includes available capacity under the Non-extended Revolving Credit Commitment of $477 million and available capacity under the Extended Revolving Credit Commitment of $948 million. As of March 31, 2022, there were no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. On May 2, 2022, the Company had no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. | ||||||
[4] | The maturity date of the Non-Extended Revolving Credit Commitment under the Revolving Credit Facility is February 2023. The maturity date of each of the Extended Revolving Credit Commitment and Extended Term Loan A may spring forward to March 2, 2023 if on or before March 2, 2023, the 4.875% Senior Notes have not been extended, refinanced or replaced to have a maturity date after May 10, 2025 (or are not otherwise discharged, defeased or repaid by March 2, 2023). |
Basis Of Presentation Income Ta
Basis Of Presentation Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 12 | $ 17 |
Basis Of Presentation Derivativ
Basis Of Presentation Derivative Instruments (Details) - Interest Rate Swap - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Derivative [Line Items] | |||
Derivative, Notional Amount | $ 1,000 | ||
Not Designated as Hedging Instrument | Interest expense | |||
Derivative [Line Items] | |||
Derivative, Gain (Loss) on Derivative, Net | (26) | $ (13) | |
Not Designated as Hedging Instrument | Other current and non-current liabilities | |||
Derivative [Line Items] | |||
Interest rate swap contract - other current and non-current liabilities | 15 | $ 46 | |
November 2017 | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | 450 | ||
August 2020 | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | 400 | ||
November 2022 | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | $ 150 |
Basis Of Presentation Revenue R
Basis Of Presentation Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | |||
Revenues | [1] | $ 1,635 | $ 1,547 |
Gross commission income | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [2] | 1,247 | 1,154 |
Service revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [3] | 246 | 249 |
Franchise fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [4] | 99 | 105 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [5] | 43 | 39 |
Realogy Franchise Group | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [1] | 267 | 254 |
Realogy Franchise Group | Gross commission income | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [2] | 0 | 0 |
Realogy Franchise Group | Service revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [3] | 55 | 47 |
Realogy Franchise Group | Franchise fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [4] | 180 | 181 |
Realogy Franchise Group | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [5] | 32 | 26 |
Realogy Brokerage Group | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [1] | 1,264 | 1,171 |
Realogy Brokerage Group | Gross commission income | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [2] | 1,247 | 1,154 |
Realogy Brokerage Group | Service revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [3] | 6 | 7 |
Realogy Brokerage Group | Franchise fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [4] | 0 | 0 |
Realogy Brokerage Group | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [5] | 11 | 10 |
Realogy Title Group | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [1] | 190 | 201 |
Realogy Title Group | Gross commission income | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [2] | 0 | 0 |
Realogy Title Group | Service revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [3] | 185 | 195 |
Realogy Title Group | Franchise fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [4] | 0 | 0 |
Realogy Title Group | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [5] | 5 | 6 |
Corporate and Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [1],[6] | (86) | (79) |
Corporate and Other | Gross commission income | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [2] | 0 | 0 |
Corporate and Other | Service revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [3] | 0 | 0 |
Corporate and Other | Franchise fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [4] | (81) | (76) |
Corporate and Other | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | [5] | $ (5) | $ (3) |
[1] | Transactions between segments are eliminated in consolidation. Revenues for Realogy Franchise Group include intercompany royalties and marketing fees paid by Realogy Brokerage Group of $86 million and $79 million for the three months ended March 31, 2022 and 2021, respectively. Such amounts are eliminated through the Corporate and Other line. | ||
[2] | Gross commission income at Realogy Brokerage Group is recognized at a point in time at the closing of a homesale transaction | ||
[3] | Service revenue primarily consists of title and escrow fees at Realogy Title Group and are recognized at a point in time at the closing of a homesale transaction. Service revenue at Realogy Franchise Group includes relocation fees, which are recognized as revenue when or as the related performance obligation is satisfied dependent on the type of service performed, and fees related to leads and related services, which are recognized at a point in time at the closing of a homesale transaction or at the completion of the related service. | ||
[4] | Franchise fees at Realogy Franchise Group primarily include domestic royalties which are recognized at a point in time when the underlying franchisee revenue is earned (upon close of the homesale transaction). | ||
[5] | Other revenue is comprised of brand marketing funds received from franchisees at Realogy Franchise Group and other miscellaneous revenues across all of the business segments. | ||
[6] | Includes the elimination of transactions between segments. |
Basis Of Presentation Revenue_2
Basis Of Presentation Revenue Recognition - Deferred Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Jan. 01, 2022 | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Deferred Revenue | $ 97 | $ 93 | |
Deferred Revenue, Additions | 54 | ||
Deferred Revenue, Revenue Recognized | (50) | ||
Realogy Franchise Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Deferred Revenue | 82 | 79 | |
Deferred Revenue, Additions | 51 | ||
Deferred Revenue, Revenue Recognized | (48) | ||
Realogy Brokerage Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Deferred Revenue | 15 | 14 | |
Deferred Revenue, Additions | 3 | ||
Deferred Revenue, Revenue Recognized | $ (2) | ||
Minimum | Realogy Franchise Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Outsourcing Management Fees Period | 3 months | ||
Minimum | Realogy Brokerage Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
New Development Period | 18 months | ||
Maximum | Realogy Franchise Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Outsourcing Management Fees Period | 6 months | ||
Maximum | Realogy Brokerage Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
New Development Period | 24 months | ||
International Franchise Rights | Realogy Franchise Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 25 years | ||
Area Development Fees | Realogy Franchise Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Deferred Revenue | [1] | $ 41 | 41 |
Deferred Revenue, Additions | [1] | 1 | |
Deferred Revenue, Revenue Recognized | [1] | (1) | |
Brand Marketing Fees | Realogy Franchise Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Deferred Revenue | [2] | 22 | 25 |
Deferred Revenue, Additions | [2] | 23 | |
Deferred Revenue, Revenue Recognized | [2] | (26) | |
Outsourcing Management Fees | Realogy Franchise Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Deferred Revenue | [3] | 5 | 4 |
Deferred Revenue, Additions | [3] | 12 | |
Deferred Revenue, Revenue Recognized | [3] | (11) | |
Deferred Income, Other | Realogy Franchise Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Deferred Revenue | 14 | 9 | |
Deferred Revenue, Additions | 15 | ||
Deferred Revenue, Revenue Recognized | (10) | ||
Deferred Income, Other | Realogy Brokerage Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Deferred Revenue | 4 | 3 | |
Deferred Revenue, Additions | 2 | ||
Deferred Revenue, Revenue Recognized | (1) | ||
New Development Business | Realogy Brokerage Group | |||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
Deferred Revenue | [4] | 11 | $ 11 |
Deferred Revenue, Additions | [4] | 1 | |
Deferred Revenue, Revenue Recognized | [4] | $ (1) | |
[1] | 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 the related franchise agreement as consideration for the right to access and benefit 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. | ||
[2] | Revenues recognized include intercompany marketing fees paid by Realogy Brokerage Group. | ||
[3] | The Company earns revenues from outsourcing management fees charged to clients that may cover several of the various relocation services according to the clients' specific needs. Outsourcing management fees are recorded as deferred revenue when billed (usually at the start of the relocation) and are recognized as revenue over the average time period required to complete the transferee's move, or a phase of the move that the fee covers, which is typically 3 to 6 months depending on the move type. | ||
[4] | New development closings generally have a development period of between 18 and 24 months from contracted date to closing. |
Basis of Presentation Supplemen
Basis of Presentation Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Other Significant Noncash Transactions [Line Items] | ||
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 3 | $ 1 |
Title Insurance Underwriter Joint Venture | Realogy Title Group | ||
Other Significant Noncash Transactions [Line Items] | ||
Noncash or Part Noncash Acquisition, Investments Acquired | $ 90 | |
Equity Method Investment, Ownership Percentage | 30.00% |
Basis Of Presentation Recently
Basis Of Presentation Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Long-term debt | $ 2,899 | $ 3,005 | $ 2,940 | ||
Deferred income taxes | 329 | 336 | 353 | ||
Liabilities | 4,700 | 5,066 | 5,018 | ||
Additional paid-in capital | 4,886 | 4,894 | 4,947 | ||
Accumulated deficit | (2,684) | (2,707) | (2,712) | ||
Stockholders' Equity Attributable to Parent | 2,154 | 2,138 | 2,186 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 2,157 | 2,144 | 2,192 | $ 1,797 | $ 1,767 |
Liabilities and Equity | $ 6,857 | 7,210 | $ 7,210 | ||
Accounting Standards Update 2020-06 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Long-term debt | 65 | ||||
Deferred income taxes | (17) | ||||
Liabilities | 48 | ||||
Additional paid-in capital | (53) | ||||
Accumulated deficit | 5 | ||||
Stockholders' Equity Attributable to Parent | (48) | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (48) | ||||
Liabilities and Equity | $ 0 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2022USD ($)real_estate_brokerage_operations | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2008USD ($) | Dec. 31, 2007USD ($) | ||
Goodwill [Roll Forward] | ||||||
Balance at December 31, 2021 | $ 2,923 | |||||
Goodwill, Acquired During Period | [1] | 6 | ||||
Goodwill, Written off Related to Sale of Business Unit | [2] | (32) | ||||
Balance at March 31, 2022 | 2,897 | |||||
Accumulated Impairment Losses | [3] | 2,579 | ||||
Impairment Loss | $ 540 | $ 253 | $ 1,279 | $ 507 | ||
Realogy Franchise Group | ||||||
Goodwill [Roll Forward] | ||||||
Balance at December 31, 2021 | 2,506 | |||||
Goodwill, Acquired During Period | [1] | 0 | ||||
Goodwill, Written off Related to Sale of Business Unit | [2] | 0 | ||||
Balance at March 31, 2022 | 2,506 | |||||
Accumulated Impairment Losses | [3] | 1,447 | ||||
Realogy Brokerage Group | ||||||
Goodwill [Roll Forward] | ||||||
Balance at December 31, 2021 | 259 | |||||
Goodwill, Acquired During Period | [1] | 5 | ||||
Goodwill, Written off Related to Sale of Business Unit | [2] | 0 | ||||
Balance at March 31, 2022 | 264 | |||||
Accumulated Impairment Losses | [3] | $ 808 | ||||
Number of Businesses Acquired | real_estate_brokerage_operations | 2 | |||||
Realogy Title Group | ||||||
Goodwill [Roll Forward] | ||||||
Balance at December 31, 2021 | $ 158 | |||||
Goodwill, Acquired During Period | [1] | 1 | ||||
Goodwill, Written off Related to Sale of Business Unit | [2] | (32) | ||||
Balance at March 31, 2022 | 127 | |||||
Accumulated Impairment Losses | [3] | $ 324 | ||||
Number of Businesses Acquired | real_estate_brokerage_operations | 1 | |||||
[1] | Goodwill acquired during the three months ended March 31, 2022 relates to the acquisition of two real estate brokerage operations and one title and settlement operation. | |||||
[2] | Goodwill reduction during the three months ended March 31, 2022 relates to the sale of the Title Underwriter (see Note 1, "Basis of Presentation", for a description of the transaction). | |||||
[3] | Includes impairment charges which reduced goodwill by $540 million during 2020, $253 million during 2019, $1,279 million during 2008 and $507 million during 2007. |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Carrying amount of total other intangibles | $ 538 | $ 542 | |
Accumulated Amortization | 374 | 371 | |
Net carrying amount of finite-lived and indefinite-lived intangible assets | 164 | 171 | |
Indefinite life—Trademarks (b) | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of indefinite-lived intangible assets | [1] | 687 | 687 |
Indefinite life—Title plant shares (e) | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of indefinite-lived intangible assets | [2] | 24 | 25 |
Amortizable—Franchise agreements (a) | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of finite-lived intangible assets | [3] | 2,010 | 2,010 |
Accumulated Amortization | [3] | 1,006 | 989 |
Net carrying amount of finite-lived intangible assets | [3] | 1,004 | 1,021 |
Amortizable—License agreements (c) | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of finite-lived intangible assets | [4] | 45 | 45 |
Accumulated Amortization | [4] | 14 | 14 |
Net carrying amount of finite-lived intangible assets | [4] | $ 31 | 31 |
Amortization period | 50 years | ||
Amortizable—Customer relationships (d) | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of finite-lived intangible assets | [5] | $ 456 | 456 |
Accumulated Amortization | [5] | 350 | 345 |
Net carrying amount of finite-lived intangible assets | [5] | 106 | 111 |
Amortizable—Other (f) | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount of finite-lived intangible assets | [6] | 13 | 16 |
Accumulated Amortization | [6] | 10 | 12 |
Net carrying amount of finite-lived intangible assets | [6] | $ 3 | $ 4 |
Realogy Franchise Group | Amortizable—Franchise agreements (a) | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Amortization period | 30 years | ||
Minimum | Amortizable—Customer relationships (d) | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Amortization period | 7 years | ||
Minimum | Amortizable—Other (f) | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Amortization period | 5 years | ||
Maximum | Amortizable—Customer relationships (d) | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Amortization period | 20 years | ||
Maximum | Amortizable—Other (f) | |||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Amortization period | 10 years | ||
[1] | Primarily related to real estate franchise brands, title and relocation tradenames which are expected to generate future cash flows for an indefinite period of time. | ||
[2] | 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. | ||
[3] | Generally amortized over a period of 30 years. | ||
[4] | 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). | ||
[5] | Relates to the customer relationships at Realogy Franchise Group, Realogy Title Group and Realogy Brokerage Group. These relationships are being amortized over a period of 7 to 20 years. | ||
[6] | 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 Assets - Amortizatio
Intangible Assets - Amortization Expense (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)Years | Mar. 31, 2021USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset amortization expense | $ 24 | $ 23 |
The number of succeeding years for which amortization expense is disclosed | Years | 4 | |
Amortization expense for the remainder of the Year | $ 68 | |
Amortization expense for Year One | 89 | |
Amortization expense for Year Two | 89 | |
Amortization expense for Year Three | 89 | |
Amortization expense for Year Four | 89 | |
Amortization expense Thereafter | 720 | |
Amortizable—Franchise agreements (a) | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset amortization expense | 17 | 17 |
Amortizable—Customer relationships (d) | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset amortization expense | 5 | 6 |
Amortizable—Other (f) | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset amortization expense | $ 2 | $ 0 |
Accrued Expenses And Other Cu_3
Accrued Expenses And Other Current Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related employee costs | $ 142 | $ 284 |
Advances from clients | 26 | 31 |
Accrued volume incentives | 50 | 60 |
Accrued commissions | 60 | 49 |
Restructuring accruals | 9 | 10 |
Deferred income | 65 | 59 |
Accrued interest | 31 | 42 |
Current portion of finance lease liabilities | 11 | 11 |
Due to former parent | 20 | 19 |
Other | 103 | 101 |
Total accrued expenses and other current liabilities | $ 517 | $ 666 |
Short And Long-Term Debt Schedu
Short And Long-Term Debt Schedule of Total Indebtedness (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 02, 2021 | |
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Outstanding borrowings, long-term debt | $ 2,911 | |||
Total Short-Term & Long-Term Debt | 2,911 | $ 2,950 | ||
Securitization obligations | 105 | 118 | ||
Secured Debt | Extended Term Loan A | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Outstanding borrowings, long-term debt | 230 | [1],[2],[3] | 231 | |
Secured Debt | 7.625% Senior Secured Second Lien Notes | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Outstanding borrowings, long-term debt | 0 | 542 | ||
Senior Notes | 4.875% Senior Notes | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Outstanding borrowings, long-term debt | 406 | 406 | ||
Senior Notes | 9.375% Senior Notes | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Outstanding borrowings, long-term debt | 0 | 545 | ||
Senior Notes | 5.75% Senior Notes | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Outstanding borrowings, long-term debt | 899 | 898 | ||
Senior Notes | 5.25% Senior Notes | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Outstanding borrowings, long-term debt | 983 | [4] | 0 | |
Convertible Debt | 0.25% Exchangeable Senior Notes | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Outstanding borrowings, long-term debt | 393 | [5] | 328 | $ 319 |
Line of Credit | Revolving Credit Facility | ||||
Schedule of Long-term and Short-term Debt Instruments [Line Items] | ||||
Line of credit facility outstanding | $ 0 | [1],[3],[6] | $ 0 | |
[1] | Interest rates with respect to revolving loans under the Revolving Credit Facility and outstanding borrowings under the Extended Term Loan A at March 31, 2022 are 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 1.75% and the ABR margin was 0.75% for the three months ended March 31, 2022. | |||
[2] | The Extended Term Loan A has quarterly amortization payments equal to a percentage per quarter of the original principal amount of $237 million, as follows: 0.625% per quarter from June 30, 2021 to March 31, 2022; 1.25% per quarter from June 30, 2022 to March 31, 2023; 1.875% per quarter from June 30, 2023 to March 31, 2024; and 2.50% per quarter for periods ending on or after June 30, 2024, with the balance of the Extended Term Loan A due at maturity on February 8, 2025. | |||
[3] | The maturity date of the Non-Extended Revolving Credit Commitment under the Revolving Credit Facility is February 2023. The maturity date of each of the Extended Revolving Credit Commitment and Extended Term Loan A may spring forward to March 2, 2023 if on or before March 2, 2023, the 4.875% Senior Notes have not been extended, refinanced or replaced to have a maturity date after May 10, 2025 (or are not otherwise discharged, defeased or repaid by March 2, 2023). | |||
[4] | In the first quarter of 2022, the Company issued $1,000 million aggregate principal amount of 5.25% Senior Notes due 2030 and used net proceeds, together with cash on hand, to redeem in full both the outstanding 9.375% Senior Notes due 2027 and the 7.625% Senior Secured Second Lien Notes due 2025. See below under the header "5.25% Senior Notes Issuance and Redemption of 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes" for a description of these transactions. | |||
[5] | See below under the header "Exchangeable Senior Notes" for additional information and Note 1, "Basis of Presentation—Recently Adopted Accounting Pronouncements", related to the January 1, 2022 adoption of the new standard on " Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity". | |||
[6] | The Revolving Credit Facility includes available capacity under the Non-extended Revolving Credit Commitment of $477 million and available capacity under the Extended Revolving Credit Commitment of $948 million. As of March 31, 2022, there were no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. On May 2, 2022, the Company had no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. |
Short And Long-Term Debt Indebt
Short And Long-Term Debt Indebtedness Table (Details) £ in Millions, $ in Millions | 3 Months Ended | ||||||||||
Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | May 02, 2022USD ($) | Mar. 31, 2022GBP (£) | Jan. 10, 2022USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2021GBP (£) | Jun. 02, 2021USD ($) | Jan. 27, 2021USD ($) | |||
Principal Amount | |||||||||||
Long-term debt principal amount | $ 2,941 | ||||||||||
Securitization obligations | 105 | $ 118 | |||||||||
Unamortized Discount (Premium) and Debt Issuance Costs | |||||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 30 | ||||||||||
Net Amount | |||||||||||
Outstanding borrowings, long-term debt | 2,911 | ||||||||||
Securitization obligations | $ 105 | 118 | |||||||||
LIBOR | |||||||||||
Net Amount | |||||||||||
Description of variable interest rate basis | LIBOR | ||||||||||
ABR | |||||||||||
Net Amount | |||||||||||
Description of variable interest rate basis | ABR | ||||||||||
Secured Debt | Extended Term Loan A | |||||||||||
Principal Amount | |||||||||||
Long-term debt principal amount | $ 231 | 232 | $ 237 | ||||||||
Unamortized Discount (Premium) and Debt Issuance Costs | |||||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | [1],[2],[3] | 1 | |||||||||
Net Amount | |||||||||||
Outstanding borrowings, long-term debt | $ 230 | [1],[2],[3] | 231 | ||||||||
Secured Debt | Extended Term Loan A | June 2021 to March 2022 | |||||||||||
Net Amount | |||||||||||
Quarterly percentage of original principal amount for quarterly amortization payments | 0.625% | 0.625% | |||||||||
Secured Debt | Extended Term Loan A | June 2022 to March 2023 | |||||||||||
Net Amount | |||||||||||
Quarterly percentage of original principal amount for quarterly amortization payments | 1.25% | 1.25% | |||||||||
Secured Debt | Extended Term Loan A | June 2023 to March 2024 | |||||||||||
Net Amount | |||||||||||
Quarterly percentage of original principal amount for quarterly amortization payments | 1.875% | 1.875% | |||||||||
Secured Debt | Extended Term Loan A | June 2024 and thereafter | |||||||||||
Net Amount | |||||||||||
Quarterly percentage of original principal amount for quarterly amortization payments | 2.50% | 2.50% | |||||||||
Secured Debt | Extended Term Loan A | LIBOR | Less than 2.00 to 1.00 | |||||||||||
Net Amount | |||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||||||||||
Secured Debt | Extended Term Loan A | ABR | Less than 2.00 to 1.00 | |||||||||||
Net Amount | |||||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | ||||||||||
Senior Notes | 4.875% Senior Notes | |||||||||||
Principal Amount | |||||||||||
Long-term debt principal amount | $ 407 | 407 | |||||||||
Unamortized Discount (Premium) and Debt Issuance Costs | |||||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 1 | ||||||||||
Net Amount | |||||||||||
Outstanding borrowings, long-term debt | $ 406 | 406 | |||||||||
Interest Rate | 4.875% | 4.875% | |||||||||
Senior Notes | 5.75% Senior Notes | |||||||||||
Principal Amount | |||||||||||
Long-term debt principal amount | $ 900 | 900 | |||||||||
Unamortized Discount (Premium) and Debt Issuance Costs | |||||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 1 | ||||||||||
Net Amount | |||||||||||
Outstanding borrowings, long-term debt | $ 899 | 898 | |||||||||
Interest Rate | 5.75% | 5.75% | |||||||||
Senior Notes | 5.25% Senior Notes | |||||||||||
Principal Amount | |||||||||||
Long-term debt principal amount | $ 1,000 | $ 1,000 | 0 | ||||||||
Unamortized Discount (Premium) and Debt Issuance Costs | |||||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | [4] | 17 | |||||||||
Net Amount | |||||||||||
Outstanding borrowings, long-term debt | $ 983 | [4] | 0 | ||||||||
Interest Rate | 5.25% | 5.25% | |||||||||
Convertible Debt | 0.25% Exchangeable Senior Notes | |||||||||||
Principal Amount | |||||||||||
Long-term debt principal amount | $ 403 | 403 | $ 403 | ||||||||
Unamortized Discount (Premium) and Debt Issuance Costs | |||||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | [5] | 10 | |||||||||
Net Amount | |||||||||||
Outstanding borrowings, long-term debt | $ 393 | [5] | 328 | $ 319 | |||||||
Interest Rate | 0.25% | 0.25% | |||||||||
Line of Credit | Revolving Credit Facility | |||||||||||
Principal Amount | |||||||||||
Line of credit facility outstanding | $ 0 | [1],[3],[6] | 0 | ||||||||
Net Amount | |||||||||||
Outstanding borrowings, short-term debt, line of credit facility | 0 | [1],[3],[6] | 0 | ||||||||
Line of credit facility outstanding | $ 0 | [1],[3],[6] | 0 | ||||||||
Line of Credit | Revolving Credit Facility | LIBOR | Less than 2.00 to 1.00 | |||||||||||
Net Amount | |||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||||||||||
Line of Credit | Revolving Credit Facility | ABR | Less than 2.00 to 1.00 | |||||||||||
Net Amount | |||||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | ||||||||||
Line of Credit | Non-extended Revolving Credit Commitment | |||||||||||
Net Amount | |||||||||||
Total capacity, short-term debt, line of credit facility | $ 477 | ||||||||||
Line of Credit | Extended Revolving Credit Commitment | |||||||||||
Net Amount | |||||||||||
Total capacity, short-term debt, line of credit facility | 948 | ||||||||||
Securitization obligation | |||||||||||
Unamortized Discount (Premium) and Debt Issuance Costs | |||||||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 0 | ||||||||||
Net Amount | |||||||||||
Relocation receivables and other related relocation assets that collateralize securitization obligations | 157 | 132 | |||||||||
Interest Expense, Debt | $ 1 | $ 1 | |||||||||
Weighted average interest rate, securitization obligations | 3.20% | 3.90% | 3.20% | ||||||||
Securitization obligation | Apple Ridge Funding LLC | |||||||||||
Principal Amount | |||||||||||
Securitization obligations | $ 104 | [7],[8] | 116 | ||||||||
Net Amount | |||||||||||
Securitization obligations | 104 | [7],[8] | 116 | ||||||||
Total capacity, securitization obligations | 200 | ||||||||||
Debt Instrument, Unused Borrowing Capacity, Amount | 96 | ||||||||||
Securitization obligation | Cartus Financing Limited | |||||||||||
Principal Amount | |||||||||||
Securitization obligations | 1 | [8],[9] | 2 | ||||||||
Net Amount | |||||||||||
Securitization obligations | 1 | [8],[9] | $ 2 | ||||||||
Total capacity, securitization obligations | 20 | ||||||||||
Debt Instrument, Unused Borrowing Capacity, Amount | 19 | ||||||||||
Securitization obligation | Cartus Financing Limited | Revolving Credit Facility | |||||||||||
Net Amount | |||||||||||
Total capacity, securitization obligations | £ | £ 2 | £ 5 | |||||||||
Securitization obligation | Cartus Financing Limited | Working Capital Facility | |||||||||||
Net Amount | |||||||||||
Total capacity, securitization obligations | £ | 5 | ||||||||||
Securitization obligation | Cartus Financing Limited | Maximum Capacity | Revolving Credit Facility | |||||||||||
Net Amount | |||||||||||
Total capacity, securitization obligations | £ | £ 10 | ||||||||||
Letter of Credit | Revolving Credit Facility | |||||||||||
Principal Amount | |||||||||||
Line of credit facility outstanding | 42 | ||||||||||
Net Amount | |||||||||||
Outstanding borrowings, short-term debt, line of credit facility | 42 | ||||||||||
Line of credit facility outstanding | $ 42 | ||||||||||
Subsequent Event | Line of Credit | Revolving Credit Facility | |||||||||||
Principal Amount | |||||||||||
Line of credit facility outstanding | $ 0 | ||||||||||
Net Amount | |||||||||||
Outstanding borrowings, short-term debt, line of credit facility | 0 | ||||||||||
Line of credit facility outstanding | 0 | ||||||||||
Subsequent Event | Letter of Credit | Revolving Credit Facility | |||||||||||
Principal Amount | |||||||||||
Line of credit facility outstanding | 42 | ||||||||||
Net Amount | |||||||||||
Outstanding borrowings, short-term debt, line of credit facility | 42 | ||||||||||
Line of credit facility outstanding | $ 42 | ||||||||||
[1] | Interest rates with respect to revolving loans under the Revolving Credit Facility and outstanding borrowings under the Extended Term Loan A at March 31, 2022 are 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 1.75% and the ABR margin was 0.75% for the three months ended March 31, 2022. | ||||||||||
[2] | The Extended Term Loan A has quarterly amortization payments equal to a percentage per quarter of the original principal amount of $237 million, as follows: 0.625% per quarter from June 30, 2021 to March 31, 2022; 1.25% per quarter from June 30, 2022 to March 31, 2023; 1.875% per quarter from June 30, 2023 to March 31, 2024; and 2.50% per quarter for periods ending on or after June 30, 2024, with the balance of the Extended Term Loan A due at maturity on February 8, 2025. | ||||||||||
[3] | The maturity date of the Non-Extended Revolving Credit Commitment under the Revolving Credit Facility is February 2023. The maturity date of each of the Extended Revolving Credit Commitment and Extended Term Loan A may spring forward to March 2, 2023 if on or before March 2, 2023, the 4.875% Senior Notes have not been extended, refinanced or replaced to have a maturity date after May 10, 2025 (or are not otherwise discharged, defeased or repaid by March 2, 2023). | ||||||||||
[4] | In the first quarter of 2022, the Company issued $1,000 million aggregate principal amount of 5.25% Senior Notes due 2030 and used net proceeds, together with cash on hand, to redeem in full both the outstanding 9.375% Senior Notes due 2027 and the 7.625% Senior Secured Second Lien Notes due 2025. See below under the header "5.25% Senior Notes Issuance and Redemption of 9.375% Senior Notes and 7.625% Senior Secured Second Lien Notes" for a description of these transactions. | ||||||||||
[5] | See below under the header "Exchangeable Senior Notes" for additional information and Note 1, "Basis of Presentation—Recently Adopted Accounting Pronouncements", related to the January 1, 2022 adoption of the new standard on " Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity". | ||||||||||
[6] | The Revolving Credit Facility includes available capacity under the Non-extended Revolving Credit Commitment of $477 million and available capacity under the Extended Revolving Credit Commitment of $948 million. As of March 31, 2022, there were no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. On May 2, 2022, the Company had no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. | ||||||||||
[7] | As of March 31, 2022, the Company had $200 million of borrowing capacity under the Apple Ridge Funding LLC securitization program with $104 million being utilized leaving $96 million of available capacity. | ||||||||||
[8] | Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations. Certain of the funds that Realogy Group receives from relocation receivables and related assets are required to be utilized to repay securitization obligations. These obligations are collateralized by $157 million and $132 million of underlying relocation receivables and other related relocation assets at March 31, 2022 and December 31, 2021, 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 for both the three months ended March 31, 2022 and 2021. 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 operations where interest is generally earned on such assets. These securitization obligations represent floating rate debt for which the average weighted interest rate was 3.2% and 3.9% for the three months ended March 31, 2022 and 2021, respectively. | ||||||||||
[9] | In January 2022, the program was amended and the revolving loan facility was reduced from £5 million to £2 million. As of March 31, 2022, Realogy Group has, through a special purpose entity known as Cartus Financing Limited, agreements providing for a £2 million revolving loan facility (with the ability to increase up to £10 million) and a £5 million working capital facility. As of March 31, 2022, the Company had $20 million of borrowing capacity under the Cartus Financing Limited securitization program with $1 million being utilized leaving $19 million of available capacity. |
Short And Long-Term Debt Maturi
Short And Long-Term Debt Maturities Table (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2022 | Dec. 31, 2021 | |||
Maturities of Long-term Debt | ||||
Remaining 2022 (a) | [1] | $ 9 | ||
2023 | 423 | |||
2024 | 22 | |||
2025 | 184 | |||
2026 | $ 403 | |||
Long-term Debt Maturities, Years Presented | 4 years | |||
Current portion of long-term debt | $ 12 | $ 10 | ||
Revolving Credit Facility | Line of Credit | ||||
Maturities of Long-term Debt | ||||
Line of credit facility outstanding | $ 0 | [2],[3],[4] | $ 0 | |
[1] | Remaining 2022 includes amortization payments for the Extended Term Loan A. The current portion of long-term debt of $12 million shown on the Condensed Consolidated Balance Sheets consists of four quarters of amortization payments for the Extended Term Loan A. There were no outstanding borrowings under the Revolving Credit Facility as of March 31, 2022, however any amounts outstanding would be classified on the balance sheet as current due to the revolving nature and terms and conditions of the facilities. | |||
[2] | Interest rates with respect to revolving loans under the Revolving Credit Facility and outstanding borrowings under the Extended Term Loan A at March 31, 2022 are 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 1.75% and the ABR margin was 0.75% for the three months ended March 31, 2022. | |||
[3] | The Revolving Credit Facility includes available capacity under the Non-extended Revolving Credit Commitment of $477 million and available capacity under the Extended Revolving Credit Commitment of $948 million. As of March 31, 2022, there were no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. On May 2, 2022, the Company had no outstanding borrowings under the Revolving Credit Facility and $42 million of outstanding undrawn letters of credit. | |||
[4] | The maturity date of the Non-Extended Revolving Credit Commitment under the Revolving Credit Facility is February 2023. The maturity date of each of the Extended Revolving Credit Commitment and Extended Term Loan A may spring forward to March 2, 2023 if on or before March 2, 2023, the 4.875% Senior Notes have not been extended, refinanced or replaced to have a maturity date after May 10, 2025 (or are not otherwise discharged, defeased or repaid by March 2, 2023). |
Short And Long-Term Debt Issuan
Short And Long-Term Debt Issuance and Redemption of Notes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Jan. 10, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | $ 2,941 | ||
Debt Instrument, Redemption Price, Percentage | 100.00% | ||
Consolidated Leverage Ratio - Consolidated Net Income Build - Numerator | 4 | ||
Consolidated Leverage Ratio - Consolidated Net Income Build - Denominator | 1 | ||
Cumulative Credit Basket increase as a % of Consolidated Net Income when the consolidated leverage ratio is less than 4.0 to 1.0 | 50.00% | ||
Consolidated Leverage Ratio - Unlimited General Restricted Payment Basket - Numerator | 3 | ||
Consolidated Leverage Ratio - Unlimited Restricted Payment Basket - Denominator | 1 | ||
Max amount of shares repurchased and dividends declared per year under the 9.375 Credit Agreement | $ 45 | ||
Net Debt Seasonality Adjustment | 200 | ||
5.25% Senior Notes | Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | $ 1,000 | $ 1,000 | $ 0 |
Interest Rate | 5.25% | ||
9.375% Senior Notes | Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | $ 0 | 550 | |
7.625% Senior Secured Second Lien Notes | Secured Debt | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | 0 | 550 | |
5.75% Senior Notes | Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | $ 900 | $ 900 | |
Interest Rate | 5.75% |
Short and Long-Term Debt Exchan
Short and Long-Term Debt Exchangeable Senior Notes (Details) | Jun. 02, 2021USD ($)d$ / sharesshares | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Jan. 01, 2022USD ($) | |
Convertible Debt [Line Items] | ||||||
Long-term Debt, Gross | $ 2,941,000,000 | |||||
Long-term Debt | 2,911,000,000 | |||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 53,000,000 | |||||
Amortization of deferred financing costs and debt discount (premium) | 3,000,000 | $ 3,000,000 | ||||
Long-term debt | 2,899,000,000 | $ 2,940,000,000 | $ 3,005,000,000 | |||
Additional paid-in capital | 4,886,000,000 | 4,947,000,000 | 4,894,000,000 | |||
Deferred income taxes | 329,000,000 | 353,000,000 | 336,000,000 | |||
Accumulated deficit | (2,684,000,000) | (2,712,000,000) | (2,707,000,000) | |||
Payments for Hedge, Financing Activities | $ 67,000,000 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 30.6075 | |||||
Proceeds from Issuance of Warrants | $ 46,000,000 | |||||
Accounting Standards Update 2020-06 | ||||||
Convertible Debt [Line Items] | ||||||
Long-term debt | 65,000,000 | |||||
Additional paid-in capital | (53,000,000) | |||||
Deferred income taxes | (17,000,000) | |||||
Accumulated deficit | $ 5,000,000 | |||||
0.25% Exchangeable Senior Notes | Convertible Debt | ||||||
Convertible Debt [Line Items] | ||||||
Long-term Debt, Gross | $ 403,000,000 | $ 403,000,000 | 403,000,000 | |||
Interest Rate | 0.25% | |||||
Debt Instrument, Convertible, Conversion Ratio | 40.8397 | |||||
Debt Instrument Convertible Principal Amount | $ 1,000 | |||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 24.49 | |||||
Potential Conversion Shares Of Convertible Debt | shares | 23,013,139 | |||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 130.00% | |||||
Debt Instrument, Convertible, Threshold Trading Days | d | 20 | |||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | d | 30 | |||||
Long-term Debt | $ 319,000,000 | $ 393,000,000 | [1] | 328,000,000 | ||
Debt Instrument, Interest Rate, Effective Percentage | 4.375% | |||||
Amortization of deferred financing costs and debt discount (premium) | $ 8,000,000 | |||||
Deferred income taxes | $ 20,000,000 | |||||
Deferred Tax Assets, Net | $ 18,000,000 | |||||
0.25% Exchangeable Senior Notes | Convertible Debt | Maximum | ||||||
Convertible Debt [Line Items] | ||||||
Debt Instrument, Convertible, Conversion Ratio | 57.1755 | |||||
[1] | See below under the header "Exchangeable Senior Notes" for additional information and Note 1, "Basis of Presentation—Recently Adopted Accounting Pronouncements", related to the January 1, 2022 adoption of the new standard on " Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity". |
Short And Long-Term Debt Loss o
Short And Long-Term Debt Loss on the Early Extinguishment of Debt (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Debt Disclosure [Abstract] | |||
Gain (Loss) on Extinguishment of Debt | [1] | $ (92) | $ (17) |
Payment for Debt Extinguishment or Debt Prepayment Cost | $ (80) | (11) | |
Write off of Deferred Debt Issuance Cost | $ 1 | ||
[1] | Loss on the early extinguishment of debt is recorded in Corporate and Other |
Investments, Equity Method an_4
Investments, Equity Method and Joint Ventures (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||
Carrying value of equity method investments | $ 205 | $ 131 | |
Equity in losses (earnings) of unconsolidated entities | 10 | $ (31) | |
Dividends received from unconsolidated entities | 1 | 31 | |
Payments to Acquire Equity Method Investments | 7 | 6 | |
Realogy Title Group | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying value of equity method investments | 172 | 102 | |
Guaranteed Rate Affinity | Realogy Title Group | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying value of equity method investments | $ 86 | 94 | |
Equity Method Investment, Ownership Percentage | 49.90% | ||
Equity in losses (earnings) of unconsolidated entities | $ 8 | (30) | |
Dividends received from unconsolidated entities | 0 | 30 | |
Title Insurance Underwriter Joint Venture | Realogy Title Group | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying value of equity method investments | $ 78 | 0 | |
Equity Method Investment, Ownership Percentage | 30.00% | ||
Dividends received from unconsolidated entities | $ 12 | ||
Noncash or Part Noncash Acquisition, Investments Acquired | 90 | ||
Other Realogy Title Group's Equity Method Investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity in losses (earnings) of unconsolidated entities | (1) | ||
Other Realogy Title Group's Equity Method Investments | Realogy Title Group | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying value of equity method investments | 8 | 8 | |
Equity in losses (earnings) of unconsolidated entities | (1) | ||
Dividends received from unconsolidated entities | 1 | 1 | |
Realogy Brokerage Group's Equity Method Investments | Realogy Brokerage Group | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying value of equity method investments | 33 | $ 29 | |
Equity in losses (earnings) of unconsolidated entities | 3 | 0 | |
Payments to Acquire Equity Method Investments | $ 7 | $ 3 | |
RealSure Joint Venture | Realogy Brokerage Group | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 49.00% | ||
Real Estate Auction Joint Venture | Realogy Brokerage Group | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity Method Investment, Ownership Percentage | 50.00% |
Equity (Details)
Equity (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Jan. 01, 2022 | Dec. 31, 2021 | |
Statement of Equity Table [Line Items] | ||||
Beginning Balance | 116,588,430 | |||
Ending Balance | 118,140,076 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | $ 2,192 | $ 1,767 | ||
Additional paid-in capital | 4,886 | $ 4,894 | $ 4,947 | |
Accumulated deficit | (2,684) | (2,707) | $ (2,712) | |
Net income | 23 | 34 | ||
Other comprehensive income (loss) | 1 | 0 | ||
Exercise of stock options | 2 | |||
Stock-based compensation | 6 | 6 | ||
Issuance of shares for vesting of equity awards | 0 | 0 | ||
Shares withheld for taxes on equity awards | (16) | (8) | ||
Dividends declared, APIC | 0 | 0 | ||
Dividends declared | (3) | (2) | ||
Ending Balance | $ 2,157 | $ 1,797 | ||
Accounting Standards Update 2020-06 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Additional paid-in capital | (53) | |||
Accumulated deficit | $ 5 | |||
Common Stock | ||||
Statement of Equity Table [Line Items] | ||||
Beginning Balance | 116,600,000 | 115,500,000 | ||
Exercise of stock options | 100,000 | |||
Issuance of shares for vesting of equity awards | 2,300,000 | 1,400,000 | ||
Shares withheld for taxes on equity awards | (900,000) | (500,000) | ||
Ending Balance | 118,100,000 | 116,400,000 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | $ 1 | $ 1 | ||
Issuance of shares for vesting of equity awards | 0 | 0 | ||
Shares withheld for taxes on equity awards | 0 | 0 | ||
Ending Balance | 1 | 1 | ||
Additional Paid-In Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 4,947 | 4,876 | ||
Exercise of stock options | 2 | |||
Stock-based compensation | 6 | 6 | ||
Shares withheld for taxes on equity awards | (16) | (8) | ||
Ending Balance | 4,886 | 4,874 | ||
Accumulated Deficit | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (2,712) | (3,055) | ||
Net income | 23 | 33 | ||
Ending Balance | (2,684) | (3,022) | ||
Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (50) | (59) | ||
Other comprehensive income (loss) | 1 | |||
Ending Balance | (49) | (59) | ||
Non- controlling Interests | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 6 | 4 | ||
Net income | 0 | 1 | ||
Dividends declared, Noncontrolling Interest | (3) | (2) | ||
Ending Balance | $ 3 | $ 3 |
Equity Stock-Based Compensation
Equity Stock-Based Compensation (Details) shares in Millions | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Restricted Stock Units (RSUs) | |
Non Options Granted in Period | shares | 0.9 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 18 |
Performance Shares | |
Non Options Granted in Period | shares | 0.8 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 16.51 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Jun. 02, 2021 | ||
Earnings Per Share [Line Items] | ||||
Net income attributable to Realogy Holdings and Realogy Group | $ 23 | $ 33 | ||
Weighted average common shares outstanding, Basic | 117.1 | 115.9 | ||
Dilutive effect of stock-based compensation | [1] | 3.3 | 2.5 | |
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities | [2] | 0 | ||
Weighted average common shares outstanding, Diluted | 120.4 | 118.4 | ||
Basic earnings per share | $ 0.20 | $ 0.28 | ||
Diluted earnings per share | $ 0.19 | $ 0.28 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3.5 | 5.8 | ||
0.25% Exchangeable Senior Notes | Convertible Debt | ||||
Earnings Per Share [Line Items] | ||||
Debt Instrument, Convertible, Conversion Price | $ 24.49 | |||
[1] | The three months ended March 31, 2022 and 2021, respectively, exclude 3.5 million and 5.8 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. | |||
[2] | Shares to be provided to the Company from the exchangeable note hedge transactions purchased concurrently with its issuance of Exchangeable Senior Notes in June 2021 are anti-dilutive and therefore they are not treated as a reduction to its diluted shares. |
Commitments And Contingencies (
Commitments And Contingencies (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Jul. 31, 2006Independent_Companies | |
Commitments and Contingencies Disclosure [Abstract] | |||
Commitments and Contingencies Disclosure [Text Block] | COMMITMENTS AND CONTINGENCIES Litigation The Company is involved in claims, legal proceedings, alternative dispute resolution and governmental inquiries or regulatory actions related to alleged contract disputes, business practices, intellectual property and other commercial, employment, regulatory and tax matters. 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. Additionally, the below captioned matters address certain current litigation involving the Company, including antitrust litigation, worker classification litigation, and Company-initiated litigation and counterclaims against us. The Company disputes the allegations against it in each of the captioned matters described below and will vigorously defend these actions. We cannot estimate a range of reasonably possible losses for this litigation. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur and even cases brought by us can involve counterclaims asserted against us. In addition, litigation and other legal matters, including class action lawsuits and 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. Further, antitrust laws generally provide for joint and several liability and treble damages (see Antitrust Litigation below). We believe that additional antitrust litigation may be possible. Due to the foregoing, the Company could incur judgments or enter into settlements of claims, based upon future events or developments, with liability that are materially in excess of amounts accrued and these judgments or settlements could have a material adverse effect on the Company’s financial condition, results of operations or cash flows in any particular period. As such, an increase in accruals for one or more of these matters in any reporting period may have a material adverse effect on the Company's results of operations and cash flows for that period. Antitrust Litigation Sitzer and Winger v. 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 Western District of Missouri). This is a certified class action complaint filed on April 29, 2019 and amended on June 21, 2019 against NAR, the Company, Homeservices of America, Inc., RE/MAX Holdings, Inc., and Keller Williams Realty, Inc. This litigation may also be referred to as Burnett v. The National Association of Realtors . 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, and engaged in other allegedly anticompetitive conduct including steering. The plaintiffs seek a permanent injunction enjoining the defendants from requiring home sellers to pay buyer broker commissions or from otherwise restricting competition among brokers, an award of damages and/or restitution, attorneys fees and costs of suit. The Sitzer litigation is limited both in allegations and relief sought to home sellers who from April 29, 2015, to the present used a listing broker affiliated with one of the brokerage/franchisor defendants in four MLSs that primarily serve the State of Missouri, purportedly in violation of federal and Missouri antitrust laws. In addition, the plaintiffs include a cause of action for alleged violations of the Missouri Merchandising Practices Act, or MMPA, on behalf of Missouri residents only. 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, the Court 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 (“DOJ”) filed a statement of interest and appearances 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.” In July 2020, the DOJ requested the Company provide it with all materials produced for Sitzer ; that request related to and preceded the subsequent civil lawsuit and related proposed consent decree, which was filed in November 2020, proposing terms on which DOJ was willing to settle its investigation of NAR. In July 2021, the DOJ filed a notice of withdrawal of consent to its November 2020 proposed consent decree with NAR and submitted an additional request to the Company for any supplemental materials produced in Sitzer . Plaintiffs filed their motion for class certification on May 24, 2021 and on June 30, 2021, filed a second amended complaint limiting the class definition to home sellers who used a listing broker affiliated with one of the defendants, among other things. The Court granted class certification on April 22, 2022. The Company intends to petition the United States Court of Appeals for the Eighth Circuit to pursue an interlocutory appeal of the class certification decision, but there is no assurance such appeal will be granted or result in a stay of the proceedings. Discovery between the plaintiffs and defendants is ongoing. The deadline for the parties to file any motion(s) for summary judgment is August 19, 2022, and oral argument on the summary judgment is scheduled for November 18, 2022. The Court has set a trial date for February 21, 2023. Moehrl, Cole, Darnell, Ramey, Umpa and Ruh v. The National Association of Realtors, Realogy Holdings Corp., Homeservices of America, Inc., BHH Affiliates, LLC, The Long & Foster Companies, Inc., RE/MAX LLC, and Keller Williams Realty, Inc. (U.S. District Court for the Northern District of Illinois). The Moehrl complaint contains substantially similar allegations, and seeks the same relief under the Sherman Act, as the Sitzer litigation, however, it is brought on behalf of home sellers in 20 MLSs in various parts of the country that do not overlap with the Sitzer MLSs. In October 2019, the DOJ filed a statement of interest for this matter for the same purpose stated in the Sitzer matter. A motion to appoint lead counsel in the case was granted on an interim basis by the Court in May 2020. In October 2020, the Court denied the separate motions to dismiss filed in August 2019 by each of NAR and the Company (together with the other defendants named in the amended Moehrl complaint). Plaintiffs filed their motion for class certification on February 23, 2022. The Company’s opposition to the plaintiff’s class certification motion is due May 31, 2022, with plaintiffs’ reply in further support of their motion due August 22, 2022. Discovery between the plaintiffs and defendants is ongoing. Leeder v. The National Association of Realtors, Realogy Holdings Corp., Homeservices of America, Inc., BHH Affiliates, LLC, HSF Affiliates, LLC, The Long & Foster Companies, Inc., RE/MAX LLC, and Keller Williams Realty, Inc. (U.S. District Court for the Northern District of Illinois Eastern Division). In this putative nationwide class action filed on January 25, 2021, the plaintiff takes issue with certain NAR policies, including those related to buyer broker compensation at issue in the Moehrl and Sitzer matters as well as those at issue in the 2020 settlement between the DOJ and NAR, but claims the alleged conspiracy has harmed buyers (instead of sellers). The plaintiff alleges that the defendants made agreements and engaged in a conspiracy in restraint of trade in violation of the Sherman Act and were unjustly enriched, and seek a permanent injunction enjoining NAR from establishing in the future the same or similar rules, policies, or practices as those challenged in the action as well as an award of damages and/or restitution, interest, and reasonable attorneys’ fees and expenses. The Company (together with the other companies named in the complaint) filed a motion to dismiss the complaint on April 20, 2021 and, on June 4, 2021, the plaintiff filed his opposition to which the defendants replied on July 6, 2021. On May 2, 2022, the Court granted the motion to dismiss without prejudice. Nosalek, Hirschorn and Hirschorn v. MLS Property Information Network, Inc., Realogy Holdings Corp., Homeservices of America, Inc., BHH Affiliates, LLC, HSF Affiliates, LLC, RE/MAX LLC, and Keller Williams Realty, Inc. (U.S. District Court for the District of Massachusetts). This is a putative class action filed on December 17, 2020, wherein the plaintiffs take issue with policies and rules similar to those at issue in the Moehrl and Sitzer matters, but rather than objecting to the national policies and rules published by NAR, this lawsuit specifically objects to the alleged policies and rules of a multiple listing service (MLS Property Information Network, Inc . ) that is owned by realtors, including in part by one of Realogy’s company-owned brokerages. The plaintiffs allege that the defendants made agreements and engaged in a conspiracy in restraint of trade in violation of the Sherman Act and seek a permanent injunction, enjoining the defendants from continuing conduct determined to be unlawful, as well as an award of damages and/or restitution, interest, and reasonable attorneys’ fees and expenses. On December 10, 2021, the Court denied the motion to dismiss filed in March 2021 by the Company (together with the other defendants named in the complaint). On March 1, 2022, plaintiffs filed an amended complaint dismissing the Baumans as named plaintiffs, and substituting in two new named plaintiffs, and may consequently be referred to as Nosalek v. MLS Property Information Network, Inc . The lawsuit seeks to represent a class of sellers who used a listing broker affiliated with one of the brokerage/franchisor defendants to list a property in the MLS Property Information Network, Inc. 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. In February 2019, the plaintiff amended his complaint to assert claims pursuant to the California Private Attorneys General Act (“PAGA”). Following the Court's dismissal of the plaintiff's non-PAGA claims without prejudice in June 2019, the plaintiff filed a second amended complaint asserting one cause of action for alleged civil penalties under PAGA in June 2020 and continued to pursue his PAGA claims as a representative of purported "aggrieved employees" as defined by PAGA. As such representative, the plaintiff seeks all non-individualized relief available to the purported aggrieved employees under PAGA, as well as attorneys’ fees. Under California law, PAGA claims are generally not subject to arbitration and may result in exposure in the form of additional penalties. In the second amended complaint, the plaintiff continues to allege 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 demurrer filed by Century 21 M&M (and joined by Century 21) on August 3, 2020 to the plaintiff's amended complaint, was granted by the Court on November 10, 2020, dismissing the case without leave to replead. In January 2021, the plaintiff filed a notice of appeal of the Court’s order granting the demurrer and filed its brief in support of the appeal on June 28, 2021. On October 28, 2021, Century 21 and Century 21 M&M filed their appellate brief in opposition to plaintiff’s appeal and on January 14, 2022, plaintiff filed its reply brief in support of the appeal. This case raises various previously unlitigated claims and the PAGA claim adds additional litigation, financial and operating uncertainties. Company-Initiated Litigation and Related Counterclaims 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 filed a complaint against Urban Compass, Inc. and Compass, Inc. (together, "Compass"), which was subsequently amended by the Company. The Company’s current complaint alleges misappropriation of trade secrets; tortious interference with contract; intentional and tortious interference with prospective economic advantage; unfair competition under New York common law; violations of the California Unfair Competition Law, Business and Professional Code Section 17200 et. seq. (unfair competition); violations of New York General Business Law Section 349 (deceptive acts or practices); violations of New York General Business Law Sections 350 and 350-a (false advertising); conversion; and defamation. The Company seeks, among other things, actual and compensatory damages, injunctive relief, and attorneys’ fees and costs. In January 2021, Compass filed its answer to the Company’s amended complaint, as well as counterclaims and third-party claims against the Company and certain of its subsidiaries, alleging unfair competition, tortious interference with prospective business relations, defamation, injurious falsehoods, and misappropriation of trade secrets. Compass seeks compensatory and punitive damages, injunctive relief, disgorgement of profits, interest and attorneys’ fees. In March 2021, the Company filed a motion to dismiss (with respect to certain counterclaims) and a reply (to the remaining counts of the counterclaims). On April 22, 2021, pursuant to a stipulation of the parties, the Court ordered the dismissal without prejudice of Compass’s third-party claims and those counterclaims against the Company related to unfair competition under New York common law, conspiracy and misappropriation of trade secrets. Discovery in the case is continuing. Other Examples of other legal matters involving the Company may include but are not limited to allegations: • concerning antitrust and anti-competition matters; • concerning alleged violations of RESPA, state consumer fraud statutes, federal consumer protection statutes or other state real estate law violations; • that independent residential real estate sales agents engaged by 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 Realogy 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 or make 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 information security, including claims under new and emerging data privacy laws related to the protection of customer, employee or third-party information; • concerning cyber-crime, including claims related to the diversion of homesale transaction closing funds; • that the Company is vicariously or jointly liable for the conduct of individuals or entities traditionally outside of our control, including franchisees and independent sales agents, under joint employer claims or other theories of actual or apparent agency; • by current or former franchisees that franchise agreements were breached including improper terminations; • 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 intellectual property or copyright law, including infringement actions alleging improper use of copyrighted photographs on websites or in marketing materials without consent of the copyright holder or claims challenging our trademarks; • concerning breach of obligations to make websites and other services accessible for consumers with disabilities; • concerning claims generally against the title agent contending that the agent knew or should have known that a transaction was fraudulent or that the agent was negligent in addressing title defects or conducting the settlement; • related to disclosure or securities law violations as well as derivative suits; and • related to general fraud claims. Other ordinary course legal proceedings that may arise from time to time include those related to commercial arrangements, indemnification (under contract or common law), franchising arrangements, 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, claims under the False Claims Act (or similar state laws), consumer lending and debt collection law claims, employment law claims related to business actions responsive to the COVID-19 outbreak and governmental and regulatory directives thereto, state auction law, and violations of similar laws in countries where we operate around the world with respect to any of the foregoing. 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 Liabilities 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 four independent companies—one 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. The due to former parent balance was $20 million at March 31, 2022 and $19 million at December 31, 2021, respectively. The due to former parent balance was comprised of the Company’s portion of the following: (i) Cendant’s remaining contingent tax liabilities, (ii) potential liabilities related to Cendant’s terminated or divested businesses, and (iii) potential liabilities related to the residual portion of accruals for Cendant operations. 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. 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. These escrow and trust deposits totaled $1,399 million at March 31, 2022 and while these deposits are not assets of the Company (and therefore are excluded from the accompanying Condensed Consolidated Balance Sheets), the Company remains contingently liable for the disposition of these deposits. | ||
Loss Contingencies [Line Items] | |||
Cendant Spin-off Number of New Independent Companies | Independent_Companies | 4 | ||
Number of New Independent Companies per Cendant Business Unit | Independent_Companies | 1 | ||
Guaranty Arrangement Percentage of Obligations Assumed by Realogy | 62.50% | ||
Guaranty Arrangement Percentage of Obligations Assumed by Wyndham | 37.50% | ||
Due to former parent | $ 20,000 | $ 19,000 | |
Noninterest-bearing deposit liabilities | 1,399,000 | ||
Maximum | |||
Loss Contingencies [Line Items] | |||
Cash, FDIC insured amount | $ 250 |
Segment Information - Revenues
Segment Information - Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | [1] | $ 1,635 | $ 1,547 |
Realogy Franchise Group | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | [1] | 267 | 254 |
Realogy Franchise Group | Royalties and Marketing Fees | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | 86 | 79 | |
Realogy Brokerage Group | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | [1] | 1,264 | 1,171 |
Realogy Title Group | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | [1] | 190 | 201 |
Corporate and Other | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Revenues | [1],[2] | $ (86) | $ (79) |
[1] | Transactions between segments are eliminated in consolidation. Revenues for Realogy Franchise Group include intercompany royalties and marketing fees paid by Realogy Brokerage Group of $86 million and $79 million for the three months ended March 31, 2022 and 2021, respectively. Such amounts are eliminated through the Corporate and Other line. | ||
[2] | Includes the elimination of transactions between segments. |
Segment Information - Operating
Segment Information - Operating EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Segment Reporting Information [Line Items] | |||
Operating EBITDA | $ 69 | $ 162 | |
Depreciation and amortization | 51 | 51 | |
Interest expense, net | 18 | 38 | |
Income tax expense | 12 | 17 | |
Restructuring costs, net | [1] | 4 | 5 |
Impairments | [2] | 0 | 1 |
Loss on the early extinguishment of debt | [3] | 92 | 17 |
Gain on the sale of business, net | [4] | (131) | 0 |
Net income attributable to Realogy Holdings and Realogy Group | 23 | 33 | |
Realogy Franchise Group | |||
Segment Reporting Information [Line Items] | |||
Operating EBITDA | 138 | 141 | |
Restructuring costs, net | 1 | 2 | |
Realogy Brokerage Group | |||
Segment Reporting Information [Line Items] | |||
Operating EBITDA | (40) | (5) | |
Restructuring costs, net | 2 | 2 | |
Realogy Title Group | |||
Segment Reporting Information [Line Items] | |||
Operating EBITDA | (3) | 61 | |
Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Operating EBITDA | [5] | (26) | (35) |
Restructuring costs, net | $ 1 | $ 1 | |
[1] | (b) The three months ended March 31, 2022 includes restructuring charges of $1 million at Realogy Franchise Group, $2 million at Realogy Brokerage Group and $1 million at Corporate and Other. The three months ended March 31, 2021 includes restructuring charges of $2 million at Realogy Franchise Group, $2 million at Realogy Brokerage Group and $1 million at Corporate and Other. | ||
[2] | Non-cash impairments for the three months ended March 31, 2021 relate to lease asset impairments. | ||
[3] | Loss on the early extinguishment of debt is recorded in Corporate and Other | ||
[4] | Gain on the sale of business, net is recorded in Realogy Title Group related to the sale of the Title Underwriter. | ||
[5] | Includes the elimination of transactions between segments. |