Realogy Reports Results for Second Quarter 2008

Business Wire, August 12, 2008

Net Revenue of $1.4 Billion; EBITDA of $161 Million; and Net Loss of $27 Million

Senior Secured Leverage Ratio of 4.9x, in Compliance with 5.6x Allowable Ratio Under Credit Agreement

PARSIPPANY, N.J. -- Realogy Corporation, a global provider of real estate and relocation services, today reported results for the second quarter 2008. Specifically, second quarter 2008 net revenue totaled $1.4 billion; EBITDA was $161 million, and net loss was $27 million.

"In the midst of a very difficult housing market, Realogy remains focused on increasing productivity and reducing our operating costs to enhance our ability to manage through this protracted downturn and, ultimately, be well-positioned to capitalize on the real estate market when it recovers," said Richard A. Smith, Realogy's president and CEO. "We also continue to implement strategic growth initiatives that we believe will pay dividends for us over the long-term. Our launch of the Better Homes and Gardens Real Estate franchise system last month certainly speaks to our commitment to growth. We are proud of our accomplishments and the continued efforts of our management and employees to help guide the Company through this challenging economic environment."

In line with the second-quarter reports issued by the National Association of Realtors (NAR) and Fannie Mae, Realogy's year-over-year home sale transaction sides declined by 21 percent at the Realogy Franchise Group (RFG) and by 19 percent at NRT, the Company's owned brokerage unit, during the three months ended June 30, 2008 compared to the same period in the prior year.

For the second quarter of 2008, RFG's average home sales price decreased 5 percent and NRT's average home sale price declined 8 percent compared to the same period in 2007. These price declines were driven by various factors, including high inventory levels, the increased prominence of short sale and foreclosure activity and, particularly as it relates to NRT, a relative shift in the mix of transactions from higher price ranges to lower- and middle-range homes. This shift is due in part to the constrained availability of jumbo mortgages for buyers in the higher price ranges.

Strategic and Operational Accomplishments

The Company highlighted the following recent accomplishments:

* Realogy launched the Better Homes and Gardens([R]) Real Estate brand on July 23with the opening of its first franchise in northeast Pennsylvania and the unveiling of its Web site for consumers, www.bhgrealestate.com.

* Net domestic franchise sales for Realogy's leading brands - Better Homes and Gardens([R]) Real Estate, CENTURY 21([R]), Coldwell Banker([R]), Coldwell Banker Commercial([R]), ERA([R]) and Sotheby's International Realty([R]) - totaled $171 million in gross commission income (GCI) for the second quarter of 2008, a year-over-year increase of 24 percent.

* NRT maintained a 92 percent retention rate for the top two quartiles of its sales associates.

* NRT's REO division, REO Experts, which is the largest independent Real Estate Owned asset management company in the United States, saw its transaction volume of foreclosed properties nearly double to approximately 10,000 units in the second quarter of 2008 as compared to the second quarter of the prior year.

* Cartus, our relocation services firm, added 43 new clients, including Procter & Gamble, Adidas, Halliburton and other leading firms.

* Title Resource Group (TRG) continues to expand its lender channel business, working with various national lenders as their provider of settlement services, and to grow its underwriter channel business. According to a title industry report published in June, TRG ranked third among the Top 10 national underwriters based on net operating gain for the first quarter of 2008.

Covenant Compliance & Revolver Balance

As of June 30, 2008, the Company's senior secured leverage ratio was 4.9 to 1. This is 0.7x below the maximum 5.6 to 1 ratio required for Realogy to be in compliance under its Credit Agreement. The senior secured leverage ratio is determined by taking Realogy's senior secured net debt of $3.3 billion at June 30, 2008 and dividing it by the Company's Adjusted EBITDA of $679 million for the 12 months ended June 30, 2008. (Please see Table 7 for a reconciliation of net loss to Adjusted EBITDA and Table 8 for the definition of non-GAAP financial measures.)

Realogy's revolver balance as of June 30, 2008 was $205 million.

Investor Webcast

Realogy will hold a Webcast to review its second quarter 2008 results at 10:00 a.m. (EDT) on Thursday, August 14. The call will be hosted by Richard A. Smith, president and CEO, and Tony Hull, executive vice president, CFO and treasurer. Questions to be answered on the call should be submitted in advance to Investor.Relations@Realogy.com by 5:00 p.m. (EDT) on Wednesday, August 13.

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 14 through August 28.