Segment Information

9 Months Ended

Sep. 30, 2019

SEGMENT INFORMATION

The reportable segments presented below represent the Company’s operating segments for which separate financial information is available and which is utilized on a regular basis by its chief operating decision maker to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its operating segments. 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) (b)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2019		2018		2019		2018
Real Estate Franchise Services	$	216	$	221	$	613	$	634
Company Owned Real Estate Brokerage Services	1,222		1,268		3,369		3,593
Relocation Services	103		108		276		292
Title and Settlement Services	170		162		444		444
Corporate and Other (c)	(82)		(83)		(224)		(238)
Total Company	$	1,629	$	1,676	$	4,478	$	4,725

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(a)Transactions between segments are eliminated in consolidation. Revenues for the Real Estate Franchise Services segment include intercompany royalties and marketing fees paid by the Company Owned Real Estate Brokerage Services segment of $82 million and $224 million for the three and nine months ended September 30, 2019, respectively, and $83 million and $238 million for the three and nine months ended September 30, 2018, respectively. Such amounts are eliminated through the Corporate and Other line.

(b)Revenues for the Relocation Services segment include intercompany referral commissions paid by the Company Owned Real Estate Brokerage Services segment of $11 million and $29 million for the three and nine months ended September 30, 2019, respectively, and $10 million and $30 million for the three and nine months ended September 30, 2018, respectively. Such amounts are recorded as contra-revenues by the Company Owned Real Estate Brokerage Services segment. There are no other material intersegment transactions.

(c)Includes the elimination of transactions between segments.


	Operating EBITDA
	Three Months Ended September 30,						Nine Months Ended September 30,
	2019		2018		2019		2018
Real Estate Franchise Services	$	153	$	161	$	406	$	439
Company Owned Real Estate Brokerage Services	31		43		16		59
Relocation Services	34		39		63		72
Title and Settlement Services	31		20		54		45
Corporate and Other (a)	(26)		(21)		(75)		(63)

Less: Depreciation and amortization (b)	50		49		149		148
Interest expense, net	66		41		210		120
Income tax (benefit) expense	(8)		40		(9)		73
Restructuring costs, net (c)	11		9		32		45
Impairments (d)	183		—		186		—
Former parent legacy cost (e)	1		—		1		—
(Gain) loss on the early extinguishment of debt (e)	(10)		—		(5)		7
Net (loss) income attributable to Realogy Holdings and Realogy Group	$	(70)	$	103	$	(100)	$	159

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(a)Includes the elimination of transactions between segments.

(b)Depreciation and amortization for the nine months ended September 30, 2018 includes $2 million of amortization expense related to Guaranteed Rate Affinity's purchase accounting included in the "Equity in (earnings) losses of unconsolidated entities" line on the Condensed Consolidated Statement of Operations.

(c)The three months ended September 30, 2019 includes restructuring charges of $1 million in the Real Estate Franchise Services segment, $8 million in the Company Owned Real Estate Brokerage Services segment, $1 million in the Relocation Services segment and $1 million in Corporate and Other.

The three months ended September 30, 2018 includes restructuring charges of $1 million in the Real Estate Franchise Services and $8 million in the Company Owned Real Estate Brokerage Services segment.

The nine months ended September 30, 2019 includes restructuring charges of $1 million in Real Estate Franchise Services segment, $18 million in the Company Owned Real Estate Brokerage Services segment, $5 million in the Relocation Services segment, $2 million in the Title and Settlement Services segment and $6 million in Corporate and Other.

The nine months ended September 30, 2018 includes restructuring charges of $3 million in the Real Estate Franchise Services segment, $29 million in the Company Owned Real Estate Brokerage Services segment, $9 million in the Relocation Services segment, $2 million in the Title and Settlement Services segment and $2 million in Corporate and Other.

(d)Impairments for the three and nine months ended September 30, 2019 includes a goodwill impairment charge of $180 million at the Company Owned Real Estate Brokerage Services segment. In addition, other impairment charges, primarily related to lease asset impairments, of $3 million and $6 million were incurred for the three and nine months ended September 30, 2019, respectively.

(e)Former parent legacy items and (gain) loss on the early extinguishment of debt is recorded in the Corporate and Other segment.