Investments, Equity Method and Joint Ventures

3 Months Ended

Mar. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Joint Ventures Disclosure

5. EQUITY METHOD INVESTMENTS

The Company applies the equity method of accounting when it has the ability to exercise significant influence over operating and financial policies of an investee but does not have a controlling financial or operating interest in the joint venture. The Company records its share of the net earnings or losses of its equity method investments on the “Equity in losses (earnings) of unconsolidated entities” line in the accompanying Condensed Consolidated Statements of Operations. Investments not accounted for using the equity method are measured at fair value with changes in fair value recognized in net income or in the case that an investment does not have readily determinable fair values, at cost minus impairment (if any) plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment.

The Company has various equity method investments which are recorded within other non-current assets on the accompanying Condensed Consolidated Balance Sheets. The Company's share of equity earnings or losses related to these investments are included in the financial results of the Realogy Title Group and Realogy Brokerage Group reportable segments. The Company's equity method investment balances at March 31, 2022 and December 31, 2021 were as follows:


	March 31, 2022		December 31, 2021
Guaranteed Rate Affinity	$	86	$	94
Title Insurance Underwriter Joint Venture	78		—
Realogy Title Group other equity method investments	8		8
Realogy Title Group equity method investments	172		102
Realogy Brokerage Group equity method investments	33		29
Total equity method investments	$	205	$	131

Guaranteed Rate Affinity, the Company's 49.9% minority-owned mortgage origination joint venture with Guaranteed Rate, Inc., originates and markets its mortgage lending services to the Company's real estate brokerage as well as other real estate brokerage companies across the country. While the Company has certain governance rights, the Company does not have a controlling financial or operating interest in the joint venture. The Company recorded equity in losses of $8 million and equity in earnings of $30 million related to its investment in Guaranteed Rate Affinity for the first quarter of 2022 and 2021, respectively. The Company received no cash dividends and $30 million in cash dividends from Guaranteed Rate Affinity during the three months ended March 31, 2022 and 2021, respectively.

The Company’s 30% equity interest in the Title Insurance Underwriter Joint Venture is accounted for as an equity method investment. While the Company has certain governance rights, the Company does not have a controlling financial or operating interest in the joint venture. The Company recorded a $90 million investment at the closing of the Title Underwriter sale transaction which represents the fair value of the Company's equity interest based upon the agreed upon purchase price. Subsequent to the closing, the Company received a dividend equal to $12 million from the Title Insurance

Underwriter Joint Venture. This dividend reduced the Company’s investment balance to $78 million as of March 31, 2022. The Company did not record equity in earnings or losses from the Title Insurance Underwriter Joint Venture during the first quarter of 2022.

The Company recorded equity earnings from the operations of Realogy Title Group's various other title related equity method investments of $1 million during both the first quarter of 2022 and 2021. The Company received $1 million in cash dividends from these equity method investments during both the three months ended March 31, 2022 and 2021.

Realogy Brokerage Group's equity method investments include RealSure, the Real Estate Auction Joint Venture and other brokerage related investments. RealSure, the Company's 49% owned joint venture with Home Partners of America, was formed in 2020 and is designed to offer home buyers and sellers options that give them a competitive edge when buying or selling a home, while also keeping the expertise of an independent sales agent at the center of the transaction. The Real Estate Auction Joint Venture, the Company's 50% owned unconsolidated joint venture with Sotheby's, was formed in 2021 and holds an 80% ownership stake in Concierge Auctions, a global luxury real estate auction marketplace that partners with real estate agents to host luxury online auctions for clients. While the Company has certain governance rights over these equity method investments, the Company does not have a controlling financial or operating interest in the joint ventures. The Company recorded equity in losses of $3 million from the operations of Realogy Brokerage Group's equity method investments during the first quarter of 2022 and recorded no equity in earnings or losses during the first quarter of 2021. The Company invested $7 million and $3 million of cash into these equity method investments during the three months ended March 31, 2022 and 2021, respectively.