1355001--3/19/2008--REALOGY

related topics

{debt, indebtedness, cash}

{loan, real, estate}

{regulation, change, law}

{condition, economic, financial}

{acquisition, growth, future}

{financial, litigation, operation}

{loss, insurance, financial}

{tax, income, asset}

{operation, natural, condition}

{regulation, government, change}

{interest, director, officer}

{system, service, information}

{personnel, key, retain}

{property, intellectual, protect}

{operation, international, foreign}

{cost, contract, operation}

{provision, law, control}

Risks relating to our indebtedness Our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our obligations under the notes. Restrictive covenants under our indentures and the senior secured credit facility may adversely affect our operations. Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. Our ability to service our debt and meet our cash requirements depends on many factors, some of which are beyond our control. We are a holding company and are dependent on dividends and other distributions from our subsidiaries. We are controlled by Apollo who will be able to make important decisions about our business and capital structure; their interests may differ from the interests of the holders of our notes and our lenders under our senior secured credit facility. Risks relating to our business Adverse developments in general business, economic and political conditions could have a material adverse effect on our financial condition and our results of operations. We are negatively impacted by a downturn in the residential real estate market. A decline in the number of homesales and/or prices could adversely affect our revenues and profitability. Competition in the residential real estate and relocation business is intense and may adversely affect our financial performance. Several of our businesses are highly regulated and any failure to comply with such regulations or any changes in such regulations could adversely affect our business. Seasonal fluctuations in the residential real estate brokerage and relocation businesses could adversely affect our business. Our brokerage operations are concentrated in metropolitan areas which could subject us to local and regional economic conditions that could differ materially from prevailing conditions in other parts of the country. The pro forma combined financial information in this Annual Report may not be reflective of our operating results following the Transactions and we may be unable to achieve anticipated cost savings and other benefits. Changes in accounting standards, subjective assumptions and estimates used by management related to complex accounting matters could have an adverse effect on results of operations. We may not have the ability to complete future acquisitions; we may not be successful in developing the Better Homes and Gardens Real Estate brand. We may not realize anticipated benefits from future acquisitions. Our franchisees and sales associates could take actions that could harm our business. Our relocation business is subject to risks related to acquiring, carrying and reselling real estate. Clients of our relocation business may terminate their contracts at any time. We may experience significant claims relating to our operations and losses resulting from fraud, defalcation or misconduct. We would be subject to severe losses if banks do not honor our escrow deposits. Title insurance regulations limit the ability of our insurance underwriters to pay cash dividends to us. We may be unable to continue to securitize certain of our relocation assets which may adversely impact our liquidity. We are dependent on our senior management and a loss of any of our senior managers may adversely affect our business and results of operations. The cost of compliance or failure to comply with the Sarbanes-Oxley Act of 2002 may adversely affect our business. Our international operations are subject to risks not generally experienced by our U.S. operations. We are subject to certain risks related to litigation filed by or against us, and adverse results may harm our business and financial condition. We are reliant upon information technology to operate our business and maintain our competitiveness, and any disruption or reduction in our information technology capabilities could harm our business. The weakening or unavailability of our intellectual property rights could adversely impact our business. Risks relating to our separation from Cendant We have a short operating history as a separate independent company and our historical financial information is not necessarily representative of the results we would have achieved as a separate independent company and may not be a reliable indicator of our future results. We are responsible for certain of Cendant s contingent and other corporate liabilities. If the distribution, together with certain related transactions, were to fail to qualify as a reorganization for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Internal Revenue Code of 1986, as amended (the Code ), then our stockholders and/or we and Avis Budget might be required to pay U.S. federal income taxes. We might not be able to engage in desirable strategic transactions and equity issuances. The Merger might be characterized as part of a plan.

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1355001--3/19/2008--REALOGY_CORP