SOURCE: Realogy Corporation

Realogy Corporation

August 11, 2009 14:00 ET

Realogy Reports Results for Second Quarter 2009

PARSIPPANY, NJ--(Marketwire - August 11, 2009) - Realogy Corporation, a global provider of real estate and relocation services, today reported results for the second quarter of 2009. The Company had second quarter 2009 net revenue of $1.0 billion, a net loss of $15 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $185 million. Realogy generated $172 million of cash flow from operations in the first half of 2009 -- a year-over-year improvement of $246 million -- and, as of June 30, 2009, had $356 million of readily available cash.

Realogy's EBITDA for the period was positively affected by $36 million of legacy items net of restructuring charges, including $49 million from the prepayment of a receivable from Wright Express.

"While the rate of decline in home sales is slowing and there are emerging positive signals, given the macroeconomic headwinds it is premature to conclude that the housing market has started its rebound," said Realogy Chief Executive Officer Richard A. Smith. "That said, long term we remain bullish on housing and are very well positioned to capitalize on its eventual recovery."

In the second quarter, Realogy's core business drivers continued to reflect a weak overall housing market. On a year-over-year basis, the Realogy Franchise Group (RFG) and NRT, the Company's owned brokerage unit, saw transaction sides decline by 8 percent and 9 percent, respectively. RFG's average home sales price decreased 15 percent for the quarter while NRT's average sales price declined 24 percent. Particularly for NRT, the decrease in average sales price was driven largely by a shift in the mix of business away from higher price-points.

"Our variable and fixed cost savings in the second quarter helped to largely offset year-over-year revenue declines of approximately $370 million," said Chief Financial Officer Anthony E. Hull. "We have worked diligently to create efficiencies and act upon cost-saving opportunities within our businesses, and we will continue to do so."

Covenant Compliance

As of June 30, 2009, the Company's senior secured leverage ratio was 5.1 to 1. The senior secured leverage ratio is determined by taking Realogy's senior secured net debt of $3.4 billion at June 30, 2009 and dividing it by the Company's Adjusted EBITDA of $655 million for the 12 months ended June 30, 2009. (Please see Table 4a for a reconciliation of net loss to EBITDA, Table 5 for a reconciliation of net loss to Adjusted EBITDA and Table 6 for the definition of non-GAAP financial measures.)

Balance Sheet Information as of June 30, 2009:

As of June 30, 2009, Realogy had a net revolver debt balance of $254 million, which consists of the $610 million revolver drawn less $356 million of readily available cash, the latter of which is included in cash and cash equivalents of $388 million. A complete balance sheet is included as Table 2 of this press release.

Investor Webcast

Realogy will hold a Webcast to review its second quarter 2009 results at 5:00 p.m. (ET) today. The call will be hosted by Richard A. Smith, president and CEO, and Anthony E. Hull, executive vice president, CFO and treasurer. The conference call will be made available live via Webcast on the Investor Information section of the Realogy.com Web site. A replay of the Webcast will be available at www.realogy.com from August 11 through August 25.

About Realogy Corporation

Realogy Corporation, a global provider of real estate and relocation services, has a diversified business model that includes real estate franchising, brokerage, relocation and title services. Realogy's world-renowned brands and business units include Better Homes and Gardens® Real Estate, CENTURY 21®, Coldwell Banker®, Coldwell Banker Commercial®, The Corcoran Group®, ERA®, Sotheby's International Realty®, NRT LLC, Cartus and Title Resource Group. Collectively, Realogy's franchise systems have approximately 14,400 offices and 270,000 sales associates doing business in 93 countries around the world. Headquartered in Parsippany, N.J., Realogy (www.realogy.com) is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor. To receive future Realogy news releases, you can sign up for an e-mail subscription or secure a link for your RSS reader at www.realogy.com/media.

Forward-Looking Statements

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Realogy Corporation ("Realogy") to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", "may increase", "may fluctuate" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.

Various factors that could cause actual future results and other future events to differ materially from those estimated by management include, but are not limited to: our substantial amount of outstanding debt; constraints on sources of liquidity; our ability to comply with the affirmative and negative covenants contained in our debt agreements; continuing adverse developments in the residential real estate markets; the final resolution or outcomes with respect to Cendant's contingent liabilities, including contingent tax liabilities; continuing adverse developments in general business, economic and political conditions, including reduced availability of credit and the instability of financial markets in the U.S. and abroad, substantial volatility in the equity or bond markets, and changes in short-term or long-term interest rates, or any outbreak or escalation of hostilities on a national, regional or international basis; a continuing drop in consumer confidence and/or the impact of the recession and the related high levels of unemployment in the U.S. and abroad; our failure to complete future acquisitions or to realize anticipated benefits from completed acquisitions; our failure to maintain or acquire franchisees and brands or the inability of franchisees to survive the current real estate downturn; and our inability to access capital and/or securitization markets.

Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings "Forward-Looking Statements" and "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2008 and "Forward-Looking Statements" in our Form 10-Q for the quarter ended June 30, 2009 and in our other periodic reports filed from time to time, in connection with considering any forward-looking statements that may be made by us and our businesses generally. Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law.

This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained in the Tables attached to this release.

Table 1

                            REALOGY CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                               (In millions)


                              Three Months Ended        Six Months Ended
                                    June 30,               June 30,
                            ----------------------  ----------------------
                               2009        2008        2009        2008
                            ----------  ----------  ----------  ----------
Revenues
    Gross commission income $      746  $    1,040  $    1,218  $    1,788
    Service revenue                161         208         295         392
    Franchise fees                  72          91         122         164
    Other                           39          50          80          96
                            ----------  ----------  ----------  ----------
Net revenues                     1,018       1,389       1,715       2,440
                            ----------  ----------  ----------  ----------

Expenses
    Commission and other
     agent-related costs           477         685         769       1,171
    Operating                      313         422         641         851
    Marketing                       45          60          86         115
    General and administrative      53          55         116         118
    Former parent legacy costs
     (benefit), net                (46)         (7)        (42)         (1)
    Restructuring costs             10          14          44          23
    Merger costs                     -           -           -           2
    Depreciation and
     amortization                   48          55          99         111
    Interest expense/
     (income), net                 147         152         291         316
    Other (income)/expense,
     net                           (11)          -         (10)          -
                            ----------  ----------  ----------  ----------
Total expenses                   1,036       1,436       1,994       2,706
                            ----------  ----------  ----------  ----------

Loss before income taxes,
 equity in earnings and
 noncontrolling interest           (18)        (47)       (279)       (266)
Income tax expense (benefit)         5         (19)          7        (102)
Equity in earnings of
 unconsolidated entities            (8)         (1)        (12)         (4)
                            ----------  ----------  ----------  ----------
Net loss                    $      (15) $      (27) $     (274) $     (160)
                            ==========  ==========  ==========  ==========



Table 2

                            REALOGY CORPORATION
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                               (In millions)

                                              June 30,       December 31,
                                               2009             2008
                                          ---------------  ---------------
ASSETS
Current assets:
    Cash and cash equivalents             $           388  $           437
    Trade receivables (net of allowance
     for doubtful accounts of $72 and $46)            151              140
    Relocation receivables                            499              765
    Relocation properties held for sale                 3               22
    Deferred income taxes                              27               92
    Due from former parent                              3                3
    Other current assets                              106              112
                                          ---------------  ---------------
        Total current assets                        1,177            1,571

Property and equipment, net                           232              276
Goodwill                                            2,575            2,572
Trademarks                                            732              732
Franchise agreements, net                           3,009            3,043
Other intangibles, net                                467              480
Other non-current assets                              233              238
                                          ---------------  ---------------
Total assets                              $         8,425  $         8,912
                                          ===============  ===============

LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
    Accounts payable                      $           142  $           133
    Securitization obligations                        442              703
    Due to former parent                              560              554
    Revolving credit facility and
     current portion of long-term debt                642              547
    Accrued expenses and other current
     liabilities                                      492              513
                                          ---------------  ---------------
        Total current liabilities                   2,278            2,450

Long-term debt                                      6,233            6,213
Deferred income taxes                                 767              826
Other non-current liabilities                         152              163
                                          ---------------  ---------------
Total liabilities                                   9,430            9,652
                                          ---------------  ---------------

Commitments and contingencies

Stockholder's deficit:
    Common stock                                        -                -
    Additional paid-in capital                      2,016            2,013
    Accumulated deficit                            (2,983)          (2,709)
    Accumulated other comprehensive loss              (39)             (46)
                                          ---------------  ---------------
        Total Realogy stockholder's
         deficit                                   (1,006)            (742)
                                          ---------------  ---------------
    Noncontrolling interest                             1                2
                                          ---------------  ---------------
Total stockholder's deficit                        (1,005)            (740)
                                          ---------------  ---------------
Total liabilities and stockholder's
 deficit                                  $         8,425  $         8,912
                                          ===============  ===============




Table 3
                            REALOGY CORPORATION
                                KEY DRIVERS

                Three Months Ended June 30,     Six Months Ended June 30,
               ---------------------------   ----------------------------
                 2009      2008   % Change     2009      2008    % Change
               --------  --------  -------   --------  ---------  -------
Real Estate
 Franchise
 Services (a)
Closed homesale
 sides          259,476   282,333       (8%)  437,708    491,646      (11%)
Average homesale
 price         $188,489  $221,351      (15%) $186,199  $ 218,351      (15%)
Average homesale
 broker commission
 rate              2.57%     2.52%     5 bps     2.57%      2.51%     6 bps
Net effective
 royalty rate      5.10%     5.10%     - bps     5.12%      5.08%     4 bps
Royalty per
 side          $    256  $    294      (13%) $    255  $     289      (12%)

Company Owned
 Real Estate
 Brokerage
 Services
Closed homesale
 sides           72,362    79,823       (9%)  119,861    133,871      (10%)
Average homesale
 price         $378,870  $497,203      (24%) $369,743  $ 509,059      (27%)
Average homesale
 broker
 commission
 rate              2.52%     2.48%     4 bps     2.53%      2.47%     6 bps
Gross commission
 income per
 side          $ 10,292  $ 12,981      (21%) $ 10,140  $  13,322      (24%)

Relocation
 Services
Initiations      33,074    42,439      (22%)   60,751     75,194      (19%)
Referrals        17,349    20,943      (17%)   28,068     34,875      (20%)

Title and
 Settlement
 Services
Purchase title
 and closing
 units           28,148    32,938      (15%)   46,959     56,947      (18%)
Refinance title
 and closing
 units           22,693    10,504      116%    42,625     21,775       96%
Average price
 per closing
 unit          $  1,255  $  1,535      (18%) $  1,236  $   1,485      (17%)

(a)  Includes all franchisees except for our Company Owned Real Estate
     Brokerage Services segment.



Table 4a


                           REALOGY CORPORATION
                 SELECTED 2009 QUARTERLY FINANCIAL DATA
                              (In millions)

                                           For The Three    For The Three
                                            Months Ended     Months Ended
                                          March 31, 2009    June 30, 2009
                                          ---------------  ---------------
Revenue
  Real Estate Franchise Services          $           105  $           143
  Company Owned Real Estate
   Brokerage Services                                 491              764
  Relocation Services                                  71               80
  Title and Settlement Services                        68               88
  Corporate and Other (a)                             (38)             (57)
                                          ---------------  ---------------
                                          $           697  $         1,018
                                          ===============  ===============
EBITDA (b)
  Real Estate Franchise Services          $            44  $            85
  Company Owned Real Estate
   Brokerage Services                                 (84)              24
  Relocation Services                                   -               72
  Title and Settlement Services                        (5)              12
  Corporate and Other                                 (17)              (8)
                                          ---------------  ---------------
Total                                     $           (62) $           185
                                          ---------------  ---------------
    Depreciation and Amortization                      51               48
    Interest, Net                                     144              147
    Income Tax Expense/(Benefit)                        2                5
                                          ---------------  ---------------
    Net Loss                              $          (259) $           (15)
                                          ===============  ===============

(a)  Transactions between segments are eliminated in consolidation.
     Revenues for the Real Estate Franchise Services segment include
     intercompany royalties and marketing fees paid by the Company Owned
     Real Estate Brokerage Services segment of $38 million and $57 million
     for the three months ended March 31, 2009 and June 30, 2009,
     respectively. Such amounts are eliminated through the Corporate and
     Other line. Revenues for the Relocation Services segment include $6
     million and $9 million of intercompany referral and relocation fees
     paid by the Company Owned Real Estate Brokerage Services segment
     during the three months ended March 31, 2009 and June 30, 2009,
     respectively. Such amounts are recorded as contra-revenues by the
     Company Owned Real Estate Brokerage Services segment. There are no
     other material inter-segment transactions.

(b)  Includes $34 million and $4 million of restructuring costs and former
     parent legacy items, respectively, for the three months ended March
     31, 2009, compared to $10 million of restructuring costs offset by a
     benefit of $46 million of former parent legacy items (comprised of a
     benefit of $55 million recorded at Cartus related to Wright Express
     Corporation partially offset by $9 million of expenses recorded at
     Corporate) for the three months ended June 30, 2009.

                                           For the three    For the three
                                            months ended     months ended
                                           March 31, 2009   June 30, 2009
                                          ---------------- ---------------
Real Estate Franchise Services            $              1 $             1
Company Owned Real Estate Brokerage
 Services                                               25               5
Relocation Services                                      5             (52)
Title and Settlement Services                            1               1
Corporate and Other                                      6               9
                                          ---------------- ---------------
Total                                     $             38 $           (36)
                                          ================ ===============

EBITDA by segment before restructuring and other items detailed above for
the three months ended March 31, 2009 was:  RFG $45 million, NRT ($59)
million, Cartus $5 million, TRG ($4) million and Corporate ($11) million.
EBITDA by segment before restructuring and other items detailed above for
the corresponding three months ended June 30, 2009 was as follows:  RFG $86
million, NRT $29 million, Cartus $20 million, TRG $13 million, and
Corporate $1 million.



Table 4b


                           REALOGY CORPORATION
                 SELECTED 2008 QUARTERLY FINANCIAL DATA
                              (In millions)

                                 For The    For The    For The    For The
                                  Three      Three      Three      Three
                                  Months     Months     Months     Months
                                  Ended      Ended      Ended      Ended
                                March 31,  June 30,   September  December
                                  2008       2008     30, 2008   31, 2008
                                ---------  ---------  ---------  ---------
Revenue (a)
  Real Estate Franchise
   Services                     $     152  $     185  $     172  $     133
  Company Owned Real Estate
   Brokerage Services                 767      1,061      1,026        707
  Relocation Services                 108        124        129         90
  Title and Settlement Services        81         94         84         63
  Corporate and Other (d)             (57)       (75)       (70)       (49)
                                ---------  ---------  ---------  ---------
                                $   1,051  $   1,389  $   1,341  $     944
                                =========  =========  =========  =========
EBITDA (b) (c)
  Real Estate Franchise
   Services                     $      80  $     109  $      98  $    (884)
  Company Owned Real Estate
   Brokerage Services (e)             (60)        26         (9)      (226)
  Relocation Services                   -         23         39       (319)
  Title and Settlement Services        (2)         5          9       (315)
  Corporate and Other (d)             (14)        (2)        (8)         1
                                ---------  ---------  ---------  ---------
Total                           $       4  $     161  $     129  $  (1,743)
                                ---------  ---------  ---------  ---------
    Depreciation and
     Amortization                      56         55         54         54
    Interest, Net                     164        152        152        156
    Income Tax Benefit                (84)       (19)       (27)      (250)
                                ---------  ---------  ---------  ---------
    Net Loss                    $    (132) $     (27) $     (50) $  (1,703)
                                =========  =========  =========  =========

(a)  Transactions between segments are eliminated in consolidation.
     Revenues for the Real Estate Franchise Services segment include
     intercompany royalties and marketing fees paid by the Company Owned
     Real Estate Brokerage Services segment of $57 million, $75 million,
     $70 million and $49 million for the three months ended March 31, 2008,
     June 30, 2008, September 30, 2008 and December 31, 2008, respectively.
     Such amounts are eliminated through the Corporate and Other line.
     Revenues for the Relocation Services segment include $7 million, $12
     million, $14 million and $9 million of intercompany referral and
     relocation fees paid by the Company Owned Real Estate Brokerage
     Services segment during the three months ended March 31, 2008, June
     30, 2008, September 30, 2008 and December 31, 2008 respectively. Such
     amounts are recorded as contra-revenues by the Company Owned Real
     Estate Brokerage Services segment. There are no other material
     inter-segment transactions.
(b)  EBITDA includes Former Parent Legacy Costs (Benefits),  Restructuring
     Costs, Merger Costs and Impairment Charges as follows ($ In Millions):

                                 For The    For The    For The    For The
                                  Three      Three      Three      Three
                                  Months     Months     Months     Months
                                  Ended      Ended      Ended      Ended
                                March 31,  June 30,   September  December
                                  2008       2008     30, 2008   31, 2008
                                ---------- ---------  ---------- ---------
Real Estate Franchise Services  $        - $       -  $        1 $     954
Company Owned Real Estate
 Brokerage Services                      9        13          56       193
Relocation Services                      -         -           2       337
Title and Settlement Services            -         1           1       309
Corporate and Other                      7        (7)          1       (17)
                                ---------- ---------  ---------- ---------
Total                           $       16 $       7  $       61 $   1,776
                                ========== =========  ========== =========


EBITDA by segment before restructuring and other items detailed above for
the three months ended March 31, 2008 was:  RFG $80 million, NRT ($51)
million, Cartus $0, TRG ($2) million and Corporate ($7) million.  For the
three months ended June 30, 2008 was:  RFG $109 million, NRT $39 million,
Cartus $23 million, TRG $6 million, and Corporate ($9) million. For the
three months ended September 30, 2008 was:  RFG $99 million, NRT $47
million, Cartus $41 million, TRG $10 million, and Corporate ($7) million.
For the three months ended December 31, 2008 was:  RFG $70 million, NRT
($33) million, Cartus $18 million, TRG ($6) million, and Corporate ($16)
million.

(c)  For the year ended December 31, 2008, Realogy's joint venture partner
     PHH Home Loans, of which Realogy owns 49.9%, recorded an impairment
     charge for which Realogy recorded its portion of the charge in equity
     (earnings) losses of unconsolidated entities of $31 million. As a
     result of the impairment analysis completed by PHH Home Loans, Realogy
     performed an impairment analysis of its investment in the entity and
     recognized an incremental impairment loss of $33 million.



Table 5

                            REALOGY CORPORATION
                        EBITDA AND ADJUSTED EBITDA

  A reconciliation of net loss to EBITDA and Adjusted EBITDA for the twelve
months ended June 30, 2009 is set forth in the following table:


                                  Less     Equals     Plus     Equals
                                --------  --------  --------  --------
                                  Six       Six       Six      Twelve
                        Year     Months    Months    Months    Months
                        Ended    Ended      Ended     Ended     Ended
                      December    June    December    June      June
                         31,       30,       31,       30,       30,
                        2008      2008      2008      2009      2009
                      --------  --------  --------  --------  --------
Net loss              $ (1,912) $   (160) $ (1,752) $   (274) $ (2,026) (a)
Income tax expense
 (benefit)                (380)     (102)     (278)        7      (271)
                      --------  --------  --------  --------  --------
Loss before income
 taxes                  (2,292)     (262)   (2,030)     (267)   (2,297)
Interest expense/
 (income), net             624       316       308       291       599
Depreciation and
 amortization              219       111       108        99       207
                      --------  --------  --------  --------  --------
EBITDA                  (1,449)      165    (1,614)      123    (1,491) (b)
Covenant calculation adjustments:
    Restructuring costs and former parent legacy cost (benefit)
     items, net (c)                                                 18
    Impairment of intangible assets, goodwill and investments in
     unconsolidated entities (d)                                 1,789
    Non-cash charges for PHH Home Loans impairment                  31
    Pro forma cost savings for 2009 restructuring initiatives (e)   60
    Pro forma cost savings for 2008 restructuring initiatives (f)   24
    Pro forma effect of business optimization initiatives (g)       67
    Non-cash charges (h)                                            58
    Non-recurring fair value adjustments for purchase
     accounting (i)                                                  6
    Pro forma effect of NRT acquisitions and RFG acquisitions and
     new franchisees (j)                                             8
    Apollo management fees (k)                                      15
    Proceeds from WEX contingent asset (l)                          61
    Incremental securitization interest costs (m)                    4
    Expenses incurred in debt modification activities (n)            5
                                                              --------
Adjusted EBITDA                                               $    655
                                                              --------
Total senior secured net debt (o)                             $  3,373
Senior secured leverage ratio                                     5.1x


(a)  Net loss consists of a loss of: (i) $50 million for the third quarter
     of 2008; (ii) $1,703 million for the fourth quarter of 2008; (iii)
     $259 million for the first quarter of 2009 and (iv) $15 million for
     the second quarter of 2009.
(b)  EBITDA consists of: (i) a positive $129 million for the third quarter
     of 2008; (ii) a negative $1,743 million for the fourth quarter of
     2008; (iii) a negative $62 million for the first quarter of 2009 and
     (iv) a positive $185 million for the second quarter of 2009.
(c)  Consists of $79 million of restructuring costs offset by a net benefit
     of $61 million for former parent legacy items.
(d)  Represents the non-cash adjustment for the 2008 impairment of
     goodwill, intangible assets and investments in unconsolidated
     entities.
(e)  Represents actual costs incurred that are not expected to recur in
     subsequent periods due to restructuring activities initiated during
     the first half of 2009. From this restructuring, we expect to reduce
     our operating costs by approximately $84 million on a twelve month
     run-rate basis and estimate that $24 million of such savings were
     realized in the first half of 2009. The adjustment shown represents
     the impact the savings would have had on the period from July 1, 2008
     through the time they were put in place had those actions been
     effected on July 1, 2008.
(f)  Represents actual costs incurred that are not expected to recur in
     subsequent periods due to restructuring activities initiated during
     the second half of 2008. From this restructuring, we expect to reduce
     our operating costs by approximately $69 million on a twelve month
     run-rate basis and estimate that $45 million of such savings were
     realized from the time they were put in place. The adjustment shown
     represents the impact the savings would have had on the period from
     July 1, 2008 through the time they were put in place had those actions
     been effected on July 1, 2008.
(g)  Represents the twelve month pro forma effect of business optimization
     initiatives that have been completed to reduce costs including $20
     million for initiatives to improve the Company Owned Real Estate
     Brokerage profit margin, $12 million for initiatives to improve
     Relocation Services and Title and Settlement Services fees, $10
     million due to the add back of the retention accrual and $25 million
     related to other initiatives.
(h)  Represents the elimination of non-cash expenses, including $36 million
     for the change in the allowance for doubtful accounts and the reserves
     for development advance notes and promissory notes from July 1, 2008
     through June 30, 2009, $7 million of stock based compensation expense
     and $15 million related to the unrealized net losses on foreign
     currency transactions and foreign currency forward contracts.
(i)  Reflects the adjustment for the negative impact of fair value
     adjustments for purchase accounting at the operating business segments
     primarily related to deferred rent for the twelve months ended June
     30, 2009.
(j)  Represents the estimated impact of acquisitions made by NRT and RFG
     acquisitions and new franchisees as if they had been acquired or
     signed on July 1, 2008. We have made a number of assumptions in
     calculating such estimate and there can be no assurance that we would
     have generated the projected levels of EBITDA had we owned the
     acquired entities or entered into the franchise contracts as of July
     1, 2008.
(k)  Represents the elimination of annual management fees payable to Apollo
     for the twelve months ended June 30, 2009.
(l)  Wright Express Corporation ("WEX") was divested by Cendant in February
     2005 through an initial public offering ("IPO"). As a result of such
     IPO, the tax basis of WEX's tangible and intangible assets increased
     to their fair market value which may reduce federal income tax that
     WEX might otherwise be obligated to pay in future periods. Under
     Article III of the Tax Receivable Agreement dated February 22, 2005
     among WEX, Cendant and Cartus (the "TRA"),WEX was required to pay
     Cendant 85% of any tax savings related to the increase in fair value
     utilized for a period of time that we expect will be beyond the
     maturity of the notes. Cendant is required to pay 62.5% of these tax
     savings payments received from WEX to us.   The Company received $12
     million of recurring tax receivable payments from Wright Express
     Corporation ("WEX") during the last twelve months. On June 26, 2009,
     we entered into a Tax Receivable Prepayment Agreement with WEX,
     pursuant to which WEX simultaneously paid us the sum of $51 million,
     less expenses of approximately $2 million, as prepayment in full of
     its remaining contingent obligations to Realogy under Article III of
     the TRA.
(m)  Incremental borrowing costs incurred as a result of the securitization
     facilities refinancing for the twelve months ended June 30, 2009.
(n)  Represents the expenses incurred in connection with the Company's
     unsuccessful debt modification activities in the second half of 2008.
(o)  Represents total borrowings under the senior secured credit facility,
     including the revolving credit facility, of $3,717 million plus $12
     million of capital lease obligations less $356 million of readily
     available cash as of June 30, 2009.

Table 6

Definitions

EBITDA is defined by the Company as net income (loss) before depreciation
and amortization, interest (income) expense, net (other than relocation
services interest for securitization assets and securitization obligations)
and income taxes. EBITDA before restructuring and other items is calculated
by adjusting EBITDA by restructuring, legacy, and other items as described
in Table 4 above.  Adjusted EBITDA is calculated by adjusting EBITDA by the
items described in Table 5 above. Adjusted EBITDA corresponds to the
definition of "EBITDA," calculated on a "pro forma basis," used in the
senior secured credit facility to calculate the senior secured leverage
ratio and substantially corresponds to the definition of "EBITDA" used in
the indentures governing the Unsecured Notes to test the permissibility of
certain types of transactions, including debt incurrence. We present EBITDA
and EBITDA before restructuring and other items because we believe EBITDA
and EBITDA adjusted for restructuring and other items are useful
supplemental measures in evaluating the performance of our operating
businesses and provide greater transparency into our results of operations.
The EBITDA and EBITDA before restructuring and other items measures are
used by our management, including our chief operating decision maker, to
perform such evaluation, and Adjusted EBITDA is used in measuring
compliance with debt covenants relating to certain of our borrowing
arrangements. EBITDA, EBITDA before restructuring and other items and
Adjusted EBITDA should not be considered in isolation or as a substitute
for net income or other statement of operations data prepared in accordance
with GAAP.

We believe EBITDA facilitates company-to-company operating performance
comparisons by backing out potential differences caused by variations in
capital structures (affecting net interest expense), taxation, the age and
book depreciation of facilities (affecting relative depreciation expense)
and the amortization of intangibles, which may vary for different companies
for reasons unrelated to operating performance. We further believe that
EBITDA is frequently used by securities analysts, investors and other
interested parties in their evaluation of companies, many of which present
an EBITDA measure when reporting their results.

EBITDA and EBITDA before restructuring and other items have limitations as
an analytical tool, and you should not consider EBITDA either in isolation
or as a substitute for analyzing our results as reported under GAAP. Some
of these limitations are:

--  EBITDA does not reflect changes in, or cash requirement for, our
    working capital needs;
--  EBITDA does not reflect our interest expense (except for interest
    related to our securitization obligations), or the cash requirements
    necessary to service interest or principal payments, on our debt;
--  EBITDA does not reflect our income tax expense or the cash requirements
    to pay our taxes;
--  EBITDA does not reflect historical cash expenditures or future
    requirements for capital expenditures or contractual commitments;
    although depreciation and amortization are non-cash charges, the assets
    being depreciated and amortized will often have to be replaced in the
    future, and these EBITDA measures do not reflect any cash requirements
    for such replacements; and other companies in our industry may
    calculate these EBITDA measures differently so they may not be
    comparable.

In addition to the limitations described above with respect to EBITDA and
EBITDA before restructuring and other items, Adjusted EBITDA includes pro
forma cost savings and the pro forma full year effect of NRT acquisitions
and RFG acquisitions/new franchisees. These adjustments may not reflect the
actual cost savings or pro forma effect recognized in future periods.

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