BASIS OF PRESENTATION

Realogy Holdings Corp. (previously known as Domus 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. On October 11, 2012, Intermediate and Realogy Group converted their form of business organization from a Delaware corporation to a Delaware limited liability company and upon such conversions, Intermediate and Realogy Group changed their names from "Domus Intermediate Holdings Corp." to "Realogy Intermediate Holdings LLC" and from "Realogy Corporation" to “Realogy Group LLC." Neither Realogy Holdings, the indirect parent of Realogy Group, nor 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.

Realogy Holdings was incorporated on December 14, 2006. On December 15, 2006, Realogy Holdings and its wholly owned subsidiary Domus Acquisition Corp., entered into an agreement and plan of merger (the “Merger”) with Realogy Group which was consummated on April 10, 2007 with Realogy Holdings becoming the indirect parent company of Realogy Group. Prior to the consummation of the initial public offering and related transactions in October 2012, Realogy Holdings was owned by investment funds affiliated with, or co-investment vehicles managed by, Apollo Management VI, L.P., an entity affiliated with Apollo Management, L.P. (collectively referred to as “Apollo”) and members of the Company’s management. As of December 31, 2012 and 2011, Realogy Group is wholly-owned by Realogy Intermediate, a direct wholly-owned subsidiary of Realogy Holdings.

Realogy is a global provider of residential real estate services. Realogy was incorporated in January 2006 to facilitate a plan by Cendant Corporation (now known as Avis Budget Group, Inc.) to separate into four independent companies—one for each of Cendant’s business units—real estate services or Realogy, travel distribution services (“Travelport”), hospitality services including timeshare resorts (“Wyndham Worldwide”), and vehicle rental (“Avis Budget Group”). On July 31, 2006, the separation (“Separation”) from Cendant became effective.

The accompanying financial statements comprise the consolidated financial statements of Realogy Holdings and Realogy Group. Realogy Holdings’ only asset is its investment in the common stock of Intermediate, and 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 Intermediate are for the benefit of Realogy Group and have been reflected in Realogy Group’s consolidated financial statements. The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions have been eliminated.

Initial Public Offering and Related Transactions

In October 2012, the Company issued 46 million shares of common stock and raised net proceeds of approximately $1,176 million in the initial public offering of its common stock. The net proceeds have been primarily utilized to prepay or redeem outstanding indebtedness. In conjunction with the closing of the offering, holders of $2,110 million of Convertible Notes converted all of their Convertible Notes into common stock.

The shares began trading on The New York Stock Exchange on October 11, 2012 under the symbol “RLGY.”

On October 12, 2012, Realogy used a portion of the net proceeds from the IPO to prepay all of Realogy’s outstanding $650 million of Second Lien Loans plus accrued and unpaid interest to the date of prepayment and a “make-whole" premium, resulting in an aggregate payment by Realogy of approximately $694 million.

On October 16, 2012, Realogy issued redemption notices to holders of the $64 million principal amount of 10.50% Senior Notes and for the $41 million principal amount of Senior Toggle Notes to redeem those notes on November 16, 2012 at the redemption price set forth in the indentures governing those notes for an aggregate amount of $109 million, including accrued interest and redemption premiums.

On October 23, 2012, the Company repaid $50 million outstanding under a facility which was included in other indebtedness, plus accrued interest, and terminated this facility which would have expired in January 2013. This facility was supported by a $50 million letter of credit issued under the Realogy senior secured credit facility which has also been terminated.

Amended and Restated Certificate of Incorporation

On October 12, 2012, in connection with the consummation of the IPO, Realogy Holdings amended and restated its certificate of incorporation. Under its amended and restated certificate of incorporation, Realogy Holdings has the authority to issue up to 450 million shares, of which 400 million shares are common stock, $0.01 par value and 50 million shares are preferred stock, $0.01 par value. Upon consummation of the IPO, all of the previously outstanding shares of Class A Common Stock and Class B Common Stock were automatically converted into common stock.

Amendment to Certificate of Incorporation and Reverse Stock Split

On September 11, 2012, the Board of Directors approved an amendment to its Certificate of Incorporation to effect a change in the name of Domus Holdings Corp. to Realogy Holdings Corp., to amend and restate its authorized capital stock and to approve a reverse stock split of Holdings' Class A and Class B Common Stock at a ratio of 1 to 25 (the “Reverse Stock Split”). On the same day, the stockholders of the Company approved the foregoing amendments to the Company's Certificate of Incorporation.

On September 27, 2012, the Company filed a Certificate of Amendment to its Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware to effect the change in authorized capital stock, the Reverse Stock Split and the name change. The Certificate of Amendment provides that the Reverse Stock Split became effective upon filing, at which time every twenty five (25) issued and outstanding shares of the Company's Class A Common Stock and Class B Common Stock were automatically combined into one (1) issued and outstanding share of the respective class of the Company's Common Stock, without any change in par value. The Company did not issue any fractional shares in connection with the Reverse Stock Split, but rounded those shares up to the next whole share. Pursuant to the terms of the Convertible Notes, the stated conversion rates applicable to each series of Convertible Notes were adjusted to reflect the Reverse Stock Split. In addition, pursuant to the terms of Holdings 2007 Stock Incentive Plan, the number of shares reserved thereunder, as well as the number of options outstanding and their stated exercise prices, was adjusted to reflect the Reverse Stock Split. All amounts and per share data presented in the accompanying consolidated financial statements and related notes give retroactive effect to the Reverse Stock Split for all periods presented.

Business Description

The Company reports its operations in the following business segments:

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Real Estate Franchise Services (known as Realogy Franchise Group or RFG)—franchises the Century 21^®, Coldwell Banker^®, ERA^®, Sotheby’s International Realty^®, Coldwell Banker Commercial^® and Better Homes and Gardens^® Real Estate brand names. As of December 31, 2012, the Company’s franchise systems had approximately 13,600 franchised and company owned offices and 238,900 independent sales associates operating under the Company’s brands in the U.S. and 101 other countries and territories around the world, which included approximately 710 company owned and operated brokerage offices with approximately 41,300 independent sales associates.


•	Company Owned Real Estate Brokerage Services (known as NRT)—operates a full-service real estate brokerage business principally under the Coldwell Banker^®, ERA^®, Corcoran Group^® and Sotheby’s International Realty^® brand names.


•	Relocation Services (known as Cartus)—primarily offers clients employee relocation services such as homesale assistance, home finding and other destination services, expense processing, relocation policy counseling and other consulting services, arranging household goods moving services, visa and immigration support, intercultural and language training, and group move management services.


•	Title and Settlement Services (known as Title Resource Group or TRG)—provides full-service title, settlement and vendor management services to real estate companies, affinity groups, corporations and financial institutions with many of these services provided in connection with the Company’s real estate brokerage and relocation services business.