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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File No. 001-35674
Commission File No. 333-148153
REALOGY HOLDINGS CORP.REALOGY GROUP LLC
(Exact name of registrant as specified in its charter)(Exact name of registrant as specified in its charter)
20-8050955 20-4381990
(I.R.S. Employer Identification Number)(I.R.S. Employer Identification Number)
Delaware
(State or other jurisdiction of incorporation or organization)
175 Park Avenue
Madison, NJ 07940
(Address of principal executive offices) (Zip Code)
(973) 407-2000
(Registrants' telephone number, including area code)
___________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Realogy Holdings Corp.Common Stock, par value $0.01 per shareRLGYNew York Stock Exchange
Realogy Group LLCNoneNoneNone
Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.  
Realogy Holdings Corp. Yes   No  Realogy Group LLC Yes   No 
Indicate by check mark whether the Registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit such files). 
Realogy Holdings Corp. Yes   No  Realogy Group LLC Yes   No 
Indicate by check mark whether the Registrants are large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies, or emerging growth companies. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
Realogy Holdings Corp.
Realogy Group LLC
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the Registrants are a shell company (as defined in Rule 12b-2 of the Exchange Act).  
Realogy Holdings Corp. Yes   No  Realogy Group LLC Yes   No 
There were 118,158,193 shares of Common Stock, $0.01 par value, of Realogy Holdings Corp. outstanding as of May 2, 2022.
__________________________________________________________________________________________________________________


TABLE OF CONTENTS
Page
PART IFINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II
OTHER INFORMATION
Item 1.
Item 6.




INTRODUCTORY NOTE
Except as otherwise indicated or unless the context otherwise requires, the terms "we," "us," "our," "our company," "Realogy," "Realogy Holdings" and the "Company" refer to Realogy Holdings Corp., a Delaware corporation, and its consolidated subsidiaries, including Realogy Intermediate Holdings LLC, a Delaware limited liability company ("Realogy Intermediate"), and Realogy Group LLC, a Delaware limited liability company ("Realogy Group"). Neither Realogy Holdings, the indirect parent of Realogy Group, nor Realogy Intermediate, the direct parent company of Realogy Group, conducts any operations other than with respect to its respective direct or indirect ownership of Realogy Group. As a result, the consolidated financial positions, results of operations and cash flows of Realogy Holdings, Realogy Intermediate and Realogy Group are the same.
As used in this Quarterly Report on Form 10-Q:
"Senior Secured Credit Agreement" refers to the Amended and Restated Credit Agreement dated as of March 5, 2013, as amended, amended and restated, modified or supplemented from time to time, that governs our senior secured credit facility, or "Senior Secured Credit Facility;"
"Non-extended Revolving Credit Commitment" and "Extended Revolving Credit Commitment" each refer to the applicable portion of the revolving credit facility under the Senior Secured Credit Facility and are referred to collectively as the "Revolving Credit Facility;"
"Term Loan B Facility" (paid in full in September 2021) refers to the term loans under the Senior Secured Credit Facility;
"Term Loan A Agreement" refers to the Term Loan A Agreement, dated as of October 23, 2015, as amended, amended and restated, modified or supplemented from time to time;
"Non-extended Term Loan A" (paid in full in September 2021) and "Extended Term Loan A" each refer to the applicable portion of the Term Loan A facility under the Term Loan A Agreement and are referred to collectively as the "Term Loan A Facility;"
"4.875% Senior Notes", "9.375% Senior Notes", "5.75% Senior Notes" and "5.25% Senior Notes" refer to our 4.875% Senior Notes due 2023, 9.375% Senior Notes due 2027 (redeemed in full in February 2022), 5.75% Senior Notes due 2029 and 5.25% Senior Notes due 2030 (issued in January 2022), respectively, and are referred to collectively as the "Unsecured Notes;"
"7.625% Senior Secured Second Lien Notes" refers to our 7.625% Senior Secured Second Lien Notes due 2025 (redeemed in full in February 2022); and
"Exchangeable Senior Notes" refers to our 0.25% Exchangeable Senior Notes due 2026.

FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as "believe," "expect," "anticipate," "intend," "project," "estimate," "plan," and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could."
In particular, information appearing under "Management's Discussion and Analysis of Financial Condition and Results of Operations" includes forward-looking statements. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, it is based on management's current plans and expectations, expressed in good faith and believed to have a reasonable basis. However, we can give no assurance that any such expectation or belief will result or will be achieved or accomplished.

1

The following include some, but not all, of the risks and uncertainties that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements:
The residential real estate market is cyclical, and we are negatively impacted by adverse developments or the absence of sustained improvement in the U.S. residential real estate markets, either regionally or nationally, which could include, but are not limited to factors that impact homesale transaction volume, such as:
continued or accelerated declines in inventory or a decline in the number of home sales;
increases in mortgage rates or tightened mortgage underwriting standards;
reductions in housing affordability;
changes in consumer preferences, including weakening in the consumer trends that have benefited us since the second half of 2020; and
stagnant or declining home prices;
We are negatively impacted by adverse developments or the absence of sustained improvement in macroeconomic conditions (such as business, economic or political conditions) on a global, domestic or local basis, which could include, but are not limited to:
contraction or stagnation in the U.S. economy; and
fiscal and monetary policies of the federal government and its agencies, particularly those that may result in unfavorable changes to the interest rate environment or tax reform;
Adverse developments or outcomes in current or future litigation, in particular pending antitrust litigation, may materially harm our business and financial condition;
We are subject to risks related to industry structure changes that disrupt the functioning of the residential real estate market, including as a result of legal or regulatory developments, revisions to the rules of the multiple listing services ("MLSs") or the National Association of Realtors ("NAR") or otherwise;
Risks related to the impact of evolving competitive and consumer dynamics, whether driven by competitive or regulatory factors or other changes to industry rules, which could include, but are not limited to:
the Company's share of the commission income generated by homesale transactions may continue to shift to affiliated independent sales agents or otherwise erode due to market factors;
our ability to compete against traditional and non-traditional competitors;
decreased use of agents and brokers in residential real estate transactions; and
meaningful decreases in the average broker commission rate;
Our business and financial results may be materially and adversely impacted if we are unable to execute our business strategy and achieve growth, including if we are not successful in our efforts to:
recruit and retain productive independent sales agents and/or independent sales agent teams;
attract and retain franchisees or renew existing franchise agreements without reducing contractual royalty rates or increasing the amount and prevalence of sales incentives;
develop or procure products, services and technology that support our strategic initiatives;
simplify and modernize our business and achieve or maintain a beneficial cost structure or savings and other benefits from our cost-saving initiatives;
generate a meaningful number of high-quality leads for independent sales agents and franchisees; and
complete or integrate acquisitions and joint ventures or effectively manage divestitures;
We may not realize the expected benefits from our existing or future joint ventures and strategic partnerships, including our mortgage origination joint venture, which is impacted by increases in mortgage rates and competitive margin compression;
The COVID-19 crisis has in the past, and may again (due to the impact of virus mutations or otherwise), amplify risks to our business, and could again result in adverse macroeconomic conditions or the reinstatement of significant limitations on normal business operations;

2

Our financial condition and/or results of operations may be adversely impacted by risks related to our business structure, including, but not limited to:
our geographic and high-end market concentration;
the operating results of affiliated franchisees and their ability to pay franchise and related fees;
continued consolidation among our top 250 franchisees and growing ownership concentration of franchisees in our luxury brands;
difficulties in the business or challenges in our relationships with the owners of the two brands we do not own;
the loss of our largest real estate benefit program client or multiple significant relocation clients; and
the failure of third-party vendors or partners to perform as expected or our failure to adequately monitor them;
We face risks related to further disruption in the residential real estate brokerage industry related to listing aggregator market power and concentration, including with respect to ancillary services;
Our substantial indebtedness could adversely limit our operations and/or adversely impact our liquidity including, but not limited to, with respect to our interest obligations and the negative covenant restrictions contained in our debt agreements and our ability to refinance or repay our indebtedness or incur additional indebtedness;
We are subject to risks related to legal and regulatory matters, which may cause us to incur increased costs (including in connection with compliance efforts) and/or result in adverse financial, operational or reputational consequences to us, including but not limited to our failure or alleged failure to comply with laws, regulations and regulatory interpretations and any changes or stricter interpretations of any of the foregoing (whether through private litigation or governmental action), including but not limited to: (1) antitrust laws and regulations, (2) the Real Estate Settlement Procedures Act ("RESPA") or other federal or state consumer protection or similar laws, (3) state or federal employment laws or regulations that would require reclassification of independent contractor sales agents to employee status, and (4) privacy or data security laws and regulations;
We face reputational, business continuity and legal and financial risks associated with cybersecurity incidents;
Our goodwill and other long-lived assets are subject to impairment which could negatively impact our earnings;
We face risks related to severe weather events or natural disasters, including increasing severity or frequency of such events, or other catastrophic events, including public health crises, such as pandemics and epidemics;
Market forecasts and estimates, including our internal estimates, may prove to be inaccurate and, even if achieved, our business could fail to grow;
The price of our common stock may fluctuate significantly; and
Share repurchase programs could affect the price of our common stock.
More information on factors that could cause actual results or events to differ materially from those anticipated is included from time to time in our reports filed with the Securities and Exchange Commission ("SEC"), including this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Form 10-K"), particularly under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations". Most of these factors are difficult to anticipate and are generally beyond our control. You should consider these factors in connection with any forward-looking statements that may be made by us and our businesses generally.
All forward-looking statements herein speak only as of the date of this Quarterly Report. Except as is required by law, we expressly disclaim any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of this Quarterly Report. For any forward-looking statement contained in this Quarterly Report, our public filings or other public statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

3

PART I - FINANCIAL INFORMATION
Item 1.    Financial Statements.
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Realogy Holdings Corp.
Results of Review of Interim Financial Statements
We have reviewed the accompanying condensed consolidated balance sheet of Realogy Holdings Corp. and its subsidiaries (the "Company") as of March 31, 2022, and the related condensed consolidated statements of operations, comprehensive income and cash flows for the three-month periods ended March 31, 2022 and 2021, including the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2021, and the related consolidated statements of operations, comprehensive income (loss), equity and of cash flows for the year then ended (not presented herein), and in our report dated February 25, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
May 4, 2022

4

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholder of Realogy Group LLC
Results of Review of Interim Financial Statements
We have reviewed the accompanying condensed consolidated balance sheet of Realogy Group LLC and its subsidiaries (the "Company") as of March 31, 2022, and the related condensed consolidated statements of operations, comprehensive income and cash flows for the three-month periods ended March 31, 2022 and 2021, including the related notes (collectively referred to as the "interim financial statements"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) and in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of the Company as of December 31, 2021, and the related consolidated statements of operations, comprehensive income (loss), and of cash flows for the year then ended (not presented herein), and in our report dated February 25, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These interim financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our reviews in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America applicable to reviews of interim financial information. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB or in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
May 4, 2022


5

REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
Three Months Ended
 March 31,
 20222021
Revenues
Gross commission income$1,247 $1,154 
Service revenue246 249 
Franchise fees99 105 
Other43 39 
Net revenues1,635 1,547 
Expenses
Commission and other agent-related costs988 885 
Operating406 384 
Marketing64 58 
General and administrative98 90 
Restructuring costs, net4 5 
Impairments 1 
Depreciation and amortization51 51 
Interest expense, net18 38 
Loss on the early extinguishment of debt92 17 
Other income, net(131)(2)
Total expenses1,590 1,527 
Income before income taxes, equity in losses (earnings) and noncontrolling interests
45 20 
Income tax expense12 17 
Equity in losses (earnings) of unconsolidated entities10 (31)
Net income23 34 
Less: Net income attributable to noncontrolling interests (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:
Basic117.1 115.9 
Diluted120.4 118.4 

See Notes to Condensed Consolidated Financial Statements.
6

REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
Three Months Ended
March 31,
20222021
Net income$23 $34 
Currency translation adjustment (1)
Defined benefit pension plan—amortization of actuarial loss to periodic pension cost
1 1 
Other comprehensive income, before tax1  
Income tax expense (benefit) related to items of other comprehensive income amounts
  
Other comprehensive income, net of tax1  
Comprehensive income24 34 
Less: comprehensive income attributable to noncontrolling interests
 (1)
Comprehensive income attributable to Realogy Holdings and Realogy Group
$24 $33 


See Notes to Condensed Consolidated Financial Statements.
7

REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
(Unaudited)
 March 31,
2022
December 31, 2021
 
ASSETS
Current assets:
Cash and cash equivalents$306 $735 
Restricted cash3 8 
Trade receivables (net of allowance for doubtful accounts of $11 for both periods presented)
124 123 
Relocation receivables175 139 
Other current assets195 183 
Total current assets803 1,188 
Property and equipment, net311 310 
Operating lease assets, net447 453 
Goodwill2,897 2,923 
Trademarks687 687 
Franchise agreements, net1,004 1,021 
Other intangibles, net164 171 
Other non-current assets544 457 
Total assets$6,857 $7,210 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$119 $130 
Securitization obligations105 118 
Current portion of long-term debt12 10 
Current portion of operating lease liabilities128 128 
Accrued expenses and other current liabilities517 666 
Total current liabilities881 1,052 
Long-term debt2,899 2,940 
Long-term operating lease liabilities406 417 
Deferred income taxes329 353 
Other non-current liabilities185 256 
Total liabilities4,700 5,018 
Commitments and contingencies (Note 8)
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
  
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 
Additional paid-in capital4,886 4,947 
Accumulated deficit(2,684)(2,712)
Accumulated other comprehensive loss(49)(50)
Total stockholders' equity2,154 2,186 
Noncontrolling interests3 6 
Total equity2,157 2,192 
Total liabilities and equity$6,857 $7,210 
See Notes to Condensed Consolidated Financial Statements.
8

REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Three Months Ended
March 31,
 20222021
Operating Activities
Net income$23 $34 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization51 51 
Deferred income taxes(6)15 
Impairments 1 
Amortization of deferred financing costs and debt discount (premium)3 3 
Loss on the early extinguishment of debt92 17 
Gain on the sale of business, net(131) 
Equity in losses (earnings) of unconsolidated entities10 (31)
Stock-based compensation6 6 
Mark-to-market adjustments on derivatives(26)(13)
Other adjustments to net income1 (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 entities1 31 
Other, net(11)(11)
Net cash used in operating activities(233)(37)
Investing Activities
Property and equipment additions(29)(23)
Payments for acquisitions, net of cash acquired(3)(2)
Net proceeds from the sale of businesses58 2 
Investment in unconsolidated entities(7)(6)
Other, net17 (3)
Net cash provided by (used in) investing activities36 (32)
Financing Activities
Repayments of Term Loan A Facility and Term Loan B Facility (905)
Proceeds from issuance of Senior Notes1,000 905 
Redemption of Senior Secured Second Lien Notes(550) 
Redemption of Senior Notes(550) 
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  
Net decrease in cash, cash equivalents and restricted cash(434)(114)
Cash, cash equivalents and restricted cash, beginning of period743 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, net2 2 
See Notes to Condensed Consolidated Financial Statements.
9

REALOGY HOLDINGS CORP. AND REALOGY GROUP LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise noted, all amounts are in millions)
(Unaudited)
1.    BASIS OF PRESENTATION
Realogy Holdings Corp. ("Realogy Holdings", "Realogy" or the "Company") is a holding company for its consolidated subsidiaries including Realogy Intermediate Holdings LLC ("Realogy Intermediate") and Realogy Group LLC ("Realogy Group") and its consolidated subsidiaries. Realogy, through its subsidiaries, is a global provider of residential real estate services. Neither Realogy Holdings, the indirect parent of Realogy Group, nor Realogy Intermediate, the direct parent company of Realogy Group, conducts any operations other than with respect to its respective direct or indirect ownership of Realogy Group. As a result, the consolidated financial positions, results of operations, comprehensive income (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.

10

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 ILevel IILevel IIITotal
Deferred compensation plan assets (included in other non-current assets)$1 $ $ $1 
Interest rate swaps (included in other current and non-current liabilities) 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 ILevel IILevel IIITotal
Deferred compensation plan assets (included in other non-current assets)$1 $ $ $1 
Interest rate swaps (included in other current and non-current liabilities) 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.

11

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 period2 
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, 2022December 31, 2021
DebtPrincipal AmountEstimated
Fair Value (a)
Principal AmountEstimated
Fair Value (a)
Revolving Credit Facility    
Extended Term Loan A231 227 232 231 
7.625% Senior Secured Second Lien Notes  550 583 
4.875% Senior Notes407 408 407 418 
9.375% Senior Notes  550 596 
5.75% Senior Notes900 844 900 923 
5.25% Senior Notes1,000 918   
0.25% Exchangeable Senior Notes403 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 DateExpiration Date
$450November 2017November 2022
$400August 2020August 2025
$150November 2022November 2027
The swaps help to protect our outstanding variable rate borrowings from future interest rate volatility. The Company has not elected to utilize hedge accounting for these interest rate swaps; therefore, any change in fair value is recorded in the Condensed Consolidated Statements of Operations.
The fair value of derivative instruments was as follows:
Not Designated as Hedging InstrumentsBalance Sheet LocationMarch 31, 2022December 31, 2021
Interest rate swap contractsOther current and non-current liabilities15 46 

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The effect of derivative instruments on earnings was as follows:
Derivative Instruments Not Designated as Hedging InstrumentsLocation of Gain Recognized for Derivative InstrumentsGain Recognized on Derivatives
Three Months Ended March 31,
20222021
Interest rate swap contractsInterest 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 GroupRealogy Brokerage GroupRealogy Title
Group
Corporate and OtherTotal
Company
2022202120222021202220212022202120222021
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, 2022Additions during the periodRecognized as Revenue during the periodEnding 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 contracts9 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 contracts3 2 (1)4 
Total Realogy Brokerage Group14 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.

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(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.

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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, 2021Impact of the adoption of ASU 2020-06Balance 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 taxes353 (17)336 
Total liabilities5,018 48 5,066 
Equity:
Additional paid-in capital4,947 (53)4,894 
Accumulated deficit(2,712)5 (2,707)
Total stockholders' equity2,186 (48)2,138 
Total equity2,192 (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.
2.    GOODWILL AND INTANGIBLE ASSETS
Goodwill
Goodwill by reporting unit and changes in the carrying amount are as follows:
Realogy Franchise GroupRealogy Brokerage GroupRealogy
Title Group
Total
Company
Balance at December 31, 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, 2022As of December 31, 2021
 Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
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 

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_______________
(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,
 20222021
Franchise agreements$17 $17 
Customer relationships5 6 
Other2  
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.
3.    ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consisted of:
 March 31, 2022December 31, 2021
Accrued payroll and related employee costs$142 $284 
Advances from clients26 31 
Accrued volume incentives50 60 
Accrued commissions60 49 
Restructuring accruals9 10 
Deferred income65 59 
Accrued interest