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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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JANUARY 27, 1998 (JANUARY 27, 1998)
(DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED))
CENDANT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-10308 06-0918165
(STATE OR OTHER JURISDICTION (COMMISSION FILE NO.) (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
6 SYLVAN WAY 07054
PARSIPPANY, NEW JERSEY (ZIP CODE)
(ADDRESS OF PRINCIPAL
EXECUTIVE OFFICE)
(973) 428-9700
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF APPLICABLE)
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ITEM 5. OTHER EVENTS
On January 27, 1997, Season Acquisition Corp., a wholly owned subsidiary
of Cendant Corporation ("Cendant"), proposed to acquire American Bankers
Insurance Group, Inc. for $58 per share in cash and stock, for an aggregate of
$2.7 billion on a fully diluted basis.
Cendant said it will promptly commence a cash tender offer to buy
approximately 23.5 million of American Bankers' common shares at a price of
$58 per share, which together with shares Cendant owns will equal 51% of the
fully diluted shares of American Bankers. Cendant will exchange, on a tax-free
basis, shares of its common stock with a fixed value of $58 per share for the
balance of American Bankers' common stock.
The following supplemental financial highlights of Cendant is being filed
for informational purposes.
CENDANT CORPORATION
SUPPLEMENTAL CONSOLIDATED FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
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HISTORICAL
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1992 1993 1994 1995 1996
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<S> <C> <C> <C> <C> <C>
INCOME STATEMENT HIGHLIGHTS:(1)(2)
Net revenues........... $1,835,471 $2,136,426 $2,446,731 $2,992,122 $3,908,780
Net income before
extraordinary loss ... 154,780 222,054(7) 284,590(6) 302,825(5) 423,611(4)
Net income before
extraordinary loss
per share (fully
diluted).............. 0.30(7) 0.37(7) 0.41(6) 0.41(5) 0.52(4)
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER
30,
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PRO FORMA HISTORICAL
1996(3) 1997(9)
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<S> <C> <C>
INCOME STATEMENT HIGHLIGHTS:(1)(2)
Net revenues........... $4,475,262 $3,890,015
Net income before
extraordinary loss ... 473,359(4) 400,694(8)
Net income before
extraordinary loss
per share (fully
diluted).............. 0.56(4) 0.47(8)
</TABLE>
<TABLE>
<CAPTION>
AT
SEPTEMBER
AT DECEMBER 31, 30, 1997(9)
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1992 1993 1994 1995 1996
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<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET HIGHLIGHTS:(1)(2)
Total assets ........$6,027,223 $6,698,832 $7,437,042 $8,994,384 $13,588,368 $14,997,006
Long-term debt....... 303,474 394,123 419,968 353,977 1,004,584 2,422,524
Shareholders'
equity.............. 1,054,123 1,319,253 1,629,762 2,148,646 4,423,599 4,608,893
Assets under
management and
mortgage programs .. 3,805,748 4,058,764 4,115,360 4,955,609 5,729,234 5,602,175
Debt under
management and
mortgage programs .. 3,273,080 3,629,701 3,791,562 4,427,872 5,089,943 4,952,083
</TABLE>
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(1) Includes the merger of HFS Incorporated ("HFS") with and into CUC
International, Inc. ("CUC"), which was renamed Cendant Corporation,
accounted for as a pooling of interests. Also includes acquisitions
by CUC and HFS accounted for as pooling of interests and other
acquisitions accounted for using the purchase method of accounting.
(2) On January 31, 1992, HFS purchased substantially all of the assets
comprising the franchise system of Days Inn of America, Inc. and
certain of its subsidiaries. On April 29, 1993, HFS purchased the
outstanding stock of the company which owns the Super 8 Motel
franchise system. On May 11, 1995, HFS acquired by merger Central
Credit Inc., a gambling patron credit information business. On August
1, 1995, a majority owned subsidiary of HFS acquired the CENTURY 21
real estate brokerage franchise system. On January 23, 1996, HFS
purchased the assets comprising the Travelodge hotel franchise system
in North America. On February 12, 1996, HFS purchased substantially
all the assets comprising Electronic Realty Associates (ERA) real
estate brokerage franchise system. During the second quarter of 1996,
HFS purchased the six previously non-owned CENTURY 21 U.S. regions.
On May 31, 1996, HFS acquired by merger Coldwell Banker Corporation.
Consolidated results of Parent include the operating results of the
aforementioned acquisitions since the respective dates of
acquisition.
(3) Pro forma results of operations include the following acquisitions by
HFS, as if they occurred on January 1, 1996: (i) the acquisition and
related financing of Coldwell Banker Corporation on May 31, 1996;
(ii) the acquisition and related financing of Avis, Inc. on October
16, 1996; (iii) the acquisition and related financing of Resorts
Condominiums International, Inc. on November 12, 1996.
(4) Includes provisions for costs incurred principally in connection with
the acquisitions of Davidson & Associates, Inc. ("Davidson"), Sierra
On-Line, Inc. ("Sierra") and Ideon Group Inc. ("Ideon"). The charges
aggregated $179.9 million ($118.7 million or $0.15 per share
after-tax effect). Such costs in connection with CUC's acquisitions
of Davidson and Sierra are non-recurring and are comprised primarily
of transaction costs and other professional fees. Such costs
associated with CUC's acquisition of Ideon are non-recurring and
include transaction costs as well as a provision relating to certain
litigation matters. On June 13, 1997, CUC entered into an agreement
which provides for the settlement of certain Ideon litigation
matters. Such agreement calls for the payment of $70.5 million over a
six-year period which was provided for during the year ended December
31, 1996.
(5) Includes provision for costs related to the abandonment of certain
Ideon development efforts and the restructuring of CUC's SafeCard
division and CUC's corporate infrastructure. The charges aggregated
$97.0 million ($62.1 million or $0.08 per share after-tax effect).
(6) Includes net gain of $9.8 million ($6.2 million or $0.01 per share
after-tax effect) related to the sale of The ImagiNation Network,
Inc. offset by costs related to Ideon's products abandoned and
restructuring.
(7) Excludes extraordinary loss, net of tax of $12.8 million or $0.02 per
share for the year ended December 31, 1993, related to the early
extinguishment of debt.
(8) Includes a one-time pre-tax merger and restructuring charge of $303
million ($227 million or $0.25 per share, after tax) during the
second quarter of 1997 in connection with the merger of HFS with PHH
Corporation for merger-related costs, including severance, facility and
system consolidations and terminations, costs associated with exiting
certain activities and merger-related professional fees.
(9) In the opinion of management, all adjustments necessary for a fair
presentation of the interim supplemental consolidated financial
highlights as of and for the nine months ended September 30, 1997 are
included. Such adjustments consist only of normal recurring items.
These interim results are not necessarily indicative of results of a
full year.
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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
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Scott E. Forbes
Senior Vice President
and Chief Accounting Officer
Date: January 27, 1998
