<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-10308
----------------
NOVEMBER 16, 1998 (NOVEMBER 16, 1998)
(Date of Report (date of earliest event reported))
CENDANT CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 06-0918165
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
6 SYLVAN WAY,
PARSIPPANY, NEW JERSEY 07054
(Address of Principal Executive Office) (Zip Code)
(973) 428-9700
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fixcal year, if appliable)
================================================================================
<PAGE>
ITEM 5. OTHER EVENTS
This Current Report on Form 8-K is being filed by Cendant Corporation for
purposes of incorporating by reference the exhibit listed in Item 7 hereof in
Registration Statements currently on file with the Securities and Exchange
Commission.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBIT
NO. DESCRIPTION
99.1 Unaudited pro forma financial statements of Cendant Corporation giving
effect to the acquisition of National Parking Corporation Limited for:
(i) the year ended December 31, 1997; and (ii) the nine months ended
September 30, 1998;
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENDANT CORPORATION
BY: /s/ Scott E. Forbes
---------------------
Scott E. Forbes
Executive Vice President
and Chief Accounting Officer
Date: November 16, 1998
3
<PAGE>
CENDANT CORPORATION
CURRENT REPORT ON FORM 8-K
REPORT DATED NOVEMBER 16, 1998 (NOVEMBER 16, 1998)
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99.1 Unaudited proforma financial statements of Cendant Corporation
giving effect to the acquisition of National Parking
Corporation Limited for: (i) the year ended December 31, 1997;
and (ii) the nine months ended September 30, 1998.
4
<PAGE>
CENDANT CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited pro forma consolidated financial statements
give effect to the acquisition of National Parking Corporation Limited ("NPC")
by Cendant Corporation ("Cendant" or the "Company") on April 27, 1998. The
acquisition of NPC was accounted for under the purchase method of accounting
and, accordingly, assets acquired and liabilities assumed were recorded at
their estimated fair values which are subject to further refinement, including
appraisals and other analyses, with appropriate recognition given to the effect
of current interest rates and income taxes. Management does not expect that the
final allocation of the purchase price for the NPC acquisition will differ
materially from the initial allocation. The unaudited pro forma consolidated
statements of income for the year ended December 31, 1997, and nine months
ended September 30, 1998 are presented as if the acquisition of NPC occurred on
January 1, 1997. Such financial statements do not purport to present the
results of operations of Cendant had the acquisition of NPC occurred on the
dates specified, nor are they necessarily indicative of the operating results
that may be achieved in the future.
The unaudited pro forma consolidated financial statements of Cendant are
based on certain assumptions and adjustments described in the Notes to
Unaudited Pro Forma Consolidated Financial Statements, as set forth herein, and
should be read in conjunction therewith and with the consolidated financial
statements and related notes thereto of Cendant, as included in the Company's
(i) Annual Report on Form 10-K/A for the year ended December 31, 1997 which was
filed with the Securities and Exchange Commission ("SEC") on September 29,
1998; and (ii) Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1998. The unaudited pro forma consolidated financial statements
should also be read in conjunction with NPC's consolidated financial statement
and related notes thereto for the 52 week period ended March 27, 1998 included
on the Current Report on Form 8-K of the Company dated November 4, 1998.
1
<PAGE>
CENDANT CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL
CENDANT HISTORICAL NPC
------------------- ----------------------
YEAR ENDED 52 WEEK PERIOD ENDED PRO FORMA
DECEMBER 31, 1997 MARCH 27, 1998(1) ADJUSTMENTS(A) PRO FORMA
------------------- ---------------------- ---------------- -----------
<S> <C> <C> <C> <C>
REVENUES
Membership and service fees, net ....................... $ 3,988.7 $ 575.9 $ 4,564.6
Fleet leasing (net of depreciation and interest costs
of $1,205.2).......................................... 59.5 -- 59.5
Other .................................................. 191.8 22.4 $ (0.9)(b) 213.3
--------- -------- -------- ---------
Net revenues ............................................ 4,240.0 598.3 (0.9) 4,837.4
--------- -------- -------- ---------
EXPENSES
Operating .............................................. 1,322.3 371.8 1,694.1
Marketing and reservation .............................. 1,031.8 -- 1,031.8
General and administrative ............................. 636.2 119.2 (8.7)(c) 746.7
Merger-related costs and other unusual charges ......... 704.1 -- 704.1
Depreciation and amortization .......................... 237.7 17.5 28.2 (d) 283.4
Interest, net .......................................... 50.6 14.6 75.9 (e) 141.1
--------- -------- -------- ---------
Total expenses .......................................... 3,982.7 523.1 95.4 4,601.2
--------- -------- -------- ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND MINORITY INTEREST ..................... 257.3 75.2 (96.3) 236.2
Provision (benefit) for income taxes .................... 191.0 42.2 (50.3)(f) 182.9
Minority interest, net .................................. 0.4 0.4
--------- -------- -------- ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS ................ $ 66.3 $ 32.6 $ (46.0) $ 52.9
PER SHARE INFORMATION: ========= ======== ======== =========
INCOME FROM CONTINUING OPERATIONS
Basic ............................................... $ 0.08 $ 0.07
Diluted ............................................. 0.08 0.06
WEIGHTED AVERAGE SHARES
Basic ............................................... 811.2 811.2
Diluted ............................................. 851.7 851.7
</TABLE>
- ----------
(1) The historical statement of income for NPC includes certain adjustments
to conform generally accepted accounting principles ("GAAP") in the
United Kingdom to United States GAAP. NPC's statement of income has been
converted to U.S. dollars at the average exchange rate for the twelve
month period presented. The financial results of NPC for the period
January 1, 1998 through March 27, 1998 are included in the pro forma
statements of income for the year ended December 31, 1997 and the nine
months ended September 30, 1998. Revenues and net income for such
duplicated period were $148.2 million and $4.6 million, respectively.
See notes to unaudited pro forma consolidated financial statements.
2
<PAGE>
CENDANT CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL
CENDANT NPC
----------------------- ---------------------
NINE MONTHS ENDED FOR THE PERIOD 1/1/98 PRO FORMA
SEPTEMBER 30, 1998(1) THROUGH 4/27/98(2) ADJUSTMENTS(A) PRO FORMA
----------------------- --------------------- ---------------- ------------
<S> <C> <C> <C> <C>
REVENUES
Membership and service fees--net .................... $ 3,678.8 $ 195.7 $ 3,874.5
Fleet leasing (net of depreciation and interest costs
of $954.6).......................................... 57.5 57.5
Other ............................................... 128.8 14.8 $ (9.0)(b) 134.6
--------- -------- -------- ---------
Net revenues ......................................... 3,865.1 210.5 (9.0) 4,066.6
--------- -------- -------- ---------
EXPENSES
Operating ........................................... 1,306.9 126.6 1,433.5
Marketing and reservation ........................... 853.2 -- 853.2
General and administrative .......................... 487.4 46.1 (10.4)(c) 523.1
Depreciation and amortization ....................... 241.3 6.1 8.8 (d) 256.2
Other charges:
Merger related costs and other unusual charges
(credits) ........................................ (24.4) (24.4)
Investigation related costs ........................ 81.4 81.4
Financing costs .................................... 27.2 27.2
Asset impairments .................................. 50.0 -- -- 50.0
Interest--net ....................................... 72.9 5.6 24.8 (e) 103.3
---------- -------- -------- ----------
Total expenses ....................................... 3,095.9 184.4 23.2 3,303.5
---------- -------- -------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND MINORITY INTEREST .................. 769.2 26.1 (32.2) 763.1
Provision (benefit) for income taxes ................. 273.0 7.8 (13.9)(f) 266.9
Minority interest, net ............................... 34.3 0.1 -- 34.4
---------- -------- -------- ----------
INCOME (LOSS) FROM CONTINUING OPERATIONS ............. $ 461.9 $ 18.2 $ (18.3) $ 461.8
========== ======== ======== ==========
PER SHARE INFORMATION:
INCOME FROM CONTINUING OPERATIONS
Basic ............................................. $ 0.55 $ 0.55
Diluted ........................................... 0.53 0.53
WEIGHTED AVERAGE SHARES
Basic ............................................. 844.8 844.8
Diluted ........................................... 895.0 895.0
</TABLE>
- ---------
(1) Historical Cendant for the nine months ended September 30, 1998 includes
the financial results of NPC from April 27, 1998 (the acquisition date)
through September 30, 1998.
(2) The historical statement of income for NPC includes certain adjustments
to conform generally accepted accounting principles ("GAAP") in the
United Kingdom to United States GAAP. NPC's statement of income has been
converted to U.S. dollars at the average exchange rate for the nine month
period presented. The financial results of NPC for the period January 1,
1998 through March 27, 1998 are included in the pro forma statements of
income for the year ended December 31, 1997 and the nine months ended
September 30, 1998. Revenues and net income for such duplicated period
were $148.2 million and $4.6 million, respectively.
See notes to unaudited pro forma consolidated financial statements.
3
<PAGE>
CENDANT CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS
(IN MILLIONS, UNLESS OTHERWISE NOTED)
(A) ACQUISITION OF NATIONAL PARKING CORPORATION LIMITED
Certain of the underlying pro forma adjustments to the statements of
income for the year ended December 31, 1997 and nine months ended September 30,
1998 are calculated from the fair market value adjustments which were made in
the allocation of the purchase price. The consideration paid and the fair value
of net assets acquired in connection with the acquisition of NPC were as
follows:
Cash consideration (i) ................................. $ 1,591.9
----------
Fair value of net assets acquired:
Historical net book value of NPC ...................... 477.0
Fair value adjustments to net assets acquired:
Assets:
Property and Equipment ................................ (1.5)
Other Intangible ...................................... 11.6
Other Assets .......................................... (3.6)
Liabilities:
Accrued Expenses and Other ............................ 205.9
Deferred Income Taxes (ii) ............................ (95.7)
----------
FAIR VALUE OF IDENTIFIABLE NET ASSETS ACQUIRED ......... 593.7
----------
GOODWILL .............................................. $ 998.2
==========
- ----------
(i) Cash consideration of $1.6 billion was financed from borrowings
under the Company's revolving credit facilities and includes the
repayment of $227 million of NPC indebtedness on the date of
acquisition.
(ii) Reflects deferred income taxes associated with the difference
between the fair value of liabilities accrued and their respective
tax bases.
(B) OTHER REVENUE
The pro forma adjustment reflects the elimination of gains recognized on
the sale of disposed properties. As such, properties would have been adjusted
to their fair market values at the acquisition date.
(C) GENERAL AND ADMINISTRATIVE
The pro forma adjustment for the year ended December 31, 1997 and the nine
months ended September 30, 1998 of $8.7 million and $10.4 million, respectively
reflect the reversal of non-recurring professional fees incurred by NPC during
the 52 week period ended March 27, 1998 and 17 week period ended April 27, 1998
respectively, directly associated with the acquisition of NPC by the Company.
(D) DEPRECIATION AND AMORTIZATION
The pro forma adjustment for depreciation and amortization is comprised of
the following:
4
<PAGE>
CENDANT CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS (CONTINUED)
(IN MILLIONS, UNLESS OTHERWISE NOTED)
(D) DEPRECIATION AND AMORTIZATION (CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
-------------- --------------
<S> <C> <C>
Elimination of historical NPC goodwill amortization ......... $ (1.8) $ (0.6)
Goodwill .................................................... 25.0 8.0
Other intangibles ........................................... 4.6 1.3
Property and equipment ...................................... 0.4 0.1
------- ------
$ 28.2 $ 8.8
======= ======
</TABLE>
Goodwill of approximately $998.2 million (see note (a)) is determined to
have a benefit period of forty years, which is based on NPC's position as the
largest private (non municipal) car park operator in the United Kingdom ("UK")
and the third largest roadside assistance company in the UK.
NPC's intangible assets represents the estimated value which has been
attributed to the membership base comprising the roadside assistance portion of
NPC's business. This intangible asset is amortized on an accelerated basis with
amortization in the initial year calculated based on a 2.5 year benefit period.
The valuation of the intangible asset was based on the historical lives and
profitability of NPC's membership bases.
(E) INTEREST EXPENSE--NET
The pro forma adjustment is calculated as follows:
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
-------------- --------------
<S> <C> <C>
Elimination of historical NPC interest expense (i) ......................... $ (16.7) $ (5.9)
Interest expense incurred on debt used to finance NPC acquisition (ii) ..... 92.6 30.7
------- -------
$ 75.9 $ 24.8
======= =======
</TABLE>
(i) Coincident with the acquisition of NPC, the Company repaid $227
million of NPC indebtedness. The elimination adjustment for the year ended
December 31, 1997 assumed an interest rate of 7.37% which was the weighted
average interest rate on NPC borrowings for the 52 week period ended March 27,
1998. The elimination adjustment during the nine months ended September 30,
1998 represents the reversal of interest expense incurred by NPC during the
period January 1, 1998 through the acquisition date (April 27, 1998) which was
calculated at an interest rate of 7.23%, representing the weighted average
interest rate in effect for such 17 week period.
(ii) Reflects interest expense incurred on $1.6 billion of borrowings
under the Company's revolving credit facilities at an interest rate of 5.82%
which was the weighted average variable rate in effect on the date of
borrowing. The Company financed the acquisition of NPC with borrowings under
its revolving credit facilities. Interest expense on the $1.6 billion of
borrowings for the nine months ended September 30, 1998 was calculated from
January 1, 1998 through the acquisition date (April 27, 1998). Interest expense
on such borrowings subsequent to the acquisition date is included in the nine
month results of Historical Cendant.
(F) INCOME TAXES
The pro forma adjustment was calculated at the applicable statutory rate
in effect for the periods presented with consideration given to the
deductibility of the pre-tax pro forma adjustments and the relative statutory
jurisdictions to which such pro forma adjustments pertain.
5
