<PAGE>
[CENDANT LOGO]
CENDANT REPORTS THIRD QUARTER 2000 RESULTS
Adjusted EPS from Continuing Operations, Excluding Move.com,
$0.31 in 2000 vs. $0.31 in 1999
NEW YORK, NY, OCTOBER 18, 2000 - Cendant Corporation (NYSE: CD) today reported
third quarter 2000 results.
"The diversity of our operations allowed us to exceed expectations in the third
quarter," said Cendant Chairman, President and Chief Executive Officer, Henry R.
Silverman. "Strong performances in several business units, coupled with
effective cost controls, offset more modest results in other areas. We continue
to take an active, disciplined approach in pursuing potential strategic
transactions to increase revenue and earnings growth. We remain comfortable with
the range of full year earnings per share estimates of $1.02 to $1.05."
THIRD QUARTER DIVISION RESULTS
------------------------------
The underlying discussion of each division's operating results focuses on
revenues and EBITDA. EBITDA is defined as earnings before non-operating
interest, income taxes, depreciation, amortization and minority interest.
Adjusted results exclude net gains and losses on disposition of businesses and
other items that are of a non-recurring or unusual nature. In the third quarter
of 2000, management responsibility for Cendant Travel, our business unit that
facilitates travel arrangements for our travel and membership business units,
was shifted to our Travel segment. Accordingly, the results of Cendant Travel
have been included within the Travel segment. Prior to third quarter 2000,
Cendant Travel was included within the Individual Membership segment. The
historical financial results presented for the Travel and Individual Membership
segments have been restated to reflect the change. (See Table 4 for Revenues and
Adjusted EBITDA by Segment and Table 6 for Segment Revenue Driver Analysis.) All
dollar amounts are in millions.
TRAVEL DIVISION
---------------
Travel 2000 1999 % change
----------------------------------------------------------------------
Revenues $344 $335 3%
----------------------------------------------------------------------
Adjusted EBITDA $165 $164 1%
----------------------------------------------------------------------
Adjusted EBITDA Margin 48% 49%
-----------------------------------------------
Franchise fees rose primarily as a result of room growth and a higher average
daily rate in Lodging and increased car rental volume at Avis. Timeshare
subscription and exchange revenues also increased, primarily as a result of
increased memberships, increased transaction volume and higher fees per
transaction. Results include reductions due to the timing and
5
<PAGE>
allocation of certain revenues and expenses. Excluding non-recurring reductions,
revenues increased 6% and Adjusted EBITDA increased 10% in third quarter 2000
over third quarter 1999.
REAL ESTATE DIVISION
--------------------
Real Estate Franchise 2000 1999 % change
----------------------------------------------------------------------
Revenues $162 $161 1%
----------------------------------------------------------------------
EBITDA $119 $124 (4%)
----------------------------------------------------------------------
EBITDA Margin 73% 77%
-----------------------------------------------
Revenues increased slightly as a reduction in home sale volume was offset by an
increase in the average price of homes sold by our franchisees. While our
results reflected soft industry-wide conditions early in the quarter, we
continued to add franchised brokerages to our CENTURY 21, COLDWELL BANKER and
ERA brands. The volume of annual commission revenue added by our core franchise
sales in third quarter 2000 was 10% higher than in third quarter 1999. On the
other hand, growth was moderated by modestly declining volume and significantly
reduced acquisition activity at our largest franchisee, NRT Incorporated. The
EBITDA reduction includes higher corporate overhead allocations due to a
refinement of allocation methods and also reflects increased costs for enhanced
franchisee training programs.
Relocation 2000 1999 % change
----------------------------------------------------------------------
Revenues $127 $117 9%
----------------------------------------------------------------------
EBITDA $49 $42 17%
----------------------------------------------------------------------
EBITDA Margin 39% 36%
-----------------------------------------------
Revenues and EBITDA increased primarily from additional sales of outsourcing
services, higher international services fees and increased referral fees. These
results reflect a continuing trend from asset-based to service-based fees.
During the third quarter, we signed 42 new accounts and expanded 44 existing
business relationships, including an award from the U.S. Department of Defense
representing 14,000 annual household goods moves. Additionally we expanded our
international presence through the acquisition of two relocation firms, Hamilton
Watts International in Australia and Bradford and Bingley Relocation Services in
the U.K.
Mortgage 2000 1999 % change
----------------------------------------------------------------------
Revenues $132 $114 16%
----------------------------------------------------------------------
EBITDA $74 $59 25%
----------------------------------------------------------------------
EBITDA Margin 56% 52%
-----------------------------------------------
Revenues from mortgage loans closed increased $18 million during the quarter due
to favorable production margins. Total mortgage closings were $6.5 billion,
equal to the third quarter of 1999. Originations consisted of $6.1 billion in
purchase mortgages (up 5%) and $400 million in refinance mortgages (down 41% due
to the significant industry-wide refinancing activity in 1999). Mortgage
closings from our Internet business (Log In - Move In) were $183 million in
third quarter 2000 compared with $73 million in third quarter 1999. During the
quarter, we entered into new outsourcing arrangements with four banking
organizations bringing the total to twelve for the year for this unique service
capability.
6
<PAGE>
DIRECT MARKETING DIVISION
-------------------------
Individual Membership 2000 1999 % change
----------------------------------------------------------------------
Revenues $185 $261 (29%)
----------------------------------------------------------------------
Adjusted EBITDA $43 $48 (10%)
----------------------------------------------------------------------
Adjusted EBITDA Margin 23% 18%
-----------------------------------------------
Revenues decreased primarily as a result of the 1999 dispositions of certain
businesses. Excluding the operations of such disposed businesses, on a
comparable basis, revenues decreased 8% and Adjusted EBITDA decreased 10%. Since
revenues are recorded upon expiration of annual memberships, the net decline in
revenues and EBITDA primarily reflects fewer annual memberships expiring in
third quarter 2000 than in third quarter 1999. The decline was partially offset
by a favorable mix of products and programs with marketing partners.
Insurance/Wholesale 2000 1999 % change
----------------------------------------------------------------------
Revenues $145 $143 1%
----------------------------------------------------------------------
EBITDA $48 $48 --
----------------------------------------------------------------------
EBITDA Margin 33% 34%
-----------------------------------------------
Insurance/Wholesale revenues rose primarily as a result of international
expansion. There was a 17% increase in international memberships quarter over
quarter. Our previously announced venture with FundsXpress to provide Internet
banking capabilities to our financial institution customers substantially
exceeded expectations in the third quarter, and we expect this venture to
positively impact revenue growth and EBITDA in 2001.
DIVERSIFIED SERVICES DIVISION
-----------------------------
Diversified Services 2000 1999 % change
----------------------------------------------------------------------
Revenues $121 $278 (56%)
----------------------------------------------------------------------
Adjusted EBITDA $12 $50 (76%)
----------------------------------------------------------------------
Adjusted EBITDA Margin 10% 18%
-----------------------------------------------
Revenues decreased primarily as a result of the 1999 dispositions of several
business operations. The absence of these divested businesses from third quarter
2000 operations resulted in a reduction in revenues of $139 million and a
reduction in Adjusted EBITDA of $27 million. The decline in Adjusted EBITDA also
reflects costs incurred to pursue Internet initiatives and lower income from
financial investments.
MOVE.COM GROUP
--------------
Move.com Group 2000 1999
---------------------------------------------------
Revenues $15 $5
---------------------------------------------------
Adjusted EBITDA ($20) ($8)
---------------------------------------------------
Move.com Group revenues tripled because of higher sponsorship revenues made
possible by the first quarter 2000 launch of our Internet real estate services
portal, move.com. Results reflect increased investment in marketing and
development of the move.com portal. The Company expects Move.com Group will
continue to report losses for the foreseeable future resulting from continuing
investment in the growth of the business.
7
<PAGE>
EPS ITEMS
---------
Cendant Corporation has two classes of common stock: CD common stock and
Move.com common stock. CD common stock is intended to track the performance of
Cendant Group and Move.com common stock is intended to track the performance of
Move.com Group. Beginning with second quarter 2000, Cendant reported EPS on the
two class method. Reported EPS for CD common stock includes Cendant Group
operations and a majority retained interest in Move.com Group. Reported EPS for
Move.com common stock includes Move.com Group operations excluding Cendant
Group's retained interest in Move.com Group.
Reported earnings per share from continuing operations for Cendant Group was
$0.29 in third quarter 2000 and $0.27 in third quarter 1999. The following items
are reflected in reported results:
o A net gain of $0.02 in 2000 and $0.04 in 1999 per share after tax related to
the dispositions of certain non-strategic businesses
o A charge of $0.02 in 2000 and $0.07 in 1999 per share after tax for
investigation-related costs and other unusual items
o Cendant Group's retained interest in the losses of Move.com Group was
($0.02) in third quarter 2000 and ($0.01) in third quarter 1999.
BALANCE SHEET AND CASH FLOW ITEMS
---------------------------------
o As of September 30, 2000, we had approximately $1.2 billion of cash and cash
equivalents and $2.5 billion of debt. During the quarter the Company
arranged for $2.5 billion in letters of credit and surety bonds for the
litigation settlement. We also have a $750 million revolving credit
available for other corporate needs. The net debt to total capital ratio was
22%.
o Annualized return on common equity measured on year-to-date adjusted net
income was 31%.
o In third quarter 2000 in accordance with the settlement agreement, we began
to accrue interest expense on our $2.85 billion litigation settlement
obligation. The after tax impact on our earnings was $0.02 per share in the
third quarter and we expect the impact on fourth quarter 2000 earnings to be
approximately $0.04.
CONFERENCE CALL
---------------
Cendant will host a conference call to discuss third quarter results on
Thursday, October 19, 2000 at 11:00 a.m. Eastern Time. Investors may access this
call live at www.Cendant.com or dial in to 913-981-5507. A replay will be
available beginning at 2:00 p.m. Eastern Time on October 19 until 8:00 p.m. on
October 23, 2000 at www.Cendant.com or through the replay dial-in number:
719-457-0820, access code: 241875.
Statements about future results made in this release may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on current
expectations and the current economic environment. The Company cautions that
these statements are not guarantees of future performance. They involve a number
of risks and uncertainties that are difficult to predict including the outcome
of litigation. Actual results could differ materially from those expressed or
implied in the forward-looking statements. Important assumptions and other
important factors that could
8
<PAGE>
cause actual results to differ materially from those in the forward-looking
statements are specified in the Company's Form 10-Q for the quarter ended June
30, 2000, including completion of the settlement of the class action litigation.
Cendant Corporation is a global provider of real estate, travel and direct
marketing related consumer and business services. The Company's core
competencies include building franchise systems, providing outsourcing solutions
and direct marketing. As a franchiser, Cendant is among the world's leading
franchisers of real estate brokerage offices, hotels, rental car agencies, and
tax preparation services. The Company's real estate-related operations also
include Move.com Group, Cendant's relocation, real estate and home-related
services portal on the Internet. As a provider of outsourcing solutions, Cendant
is a major provider of mortgage services to consumers, the global leader in
employee relocation, and the world's largest vacation exchange service. In
direct marketing, Cendant provides access to insurance, travel, shopping, auto,
and other services primarily to customers of its affinity partners. In addition,
Cendant Internet Group is pursuing a convergence strategy for the Company's
off-line and online businesses. Other business units include NCP, the UK's
largest private car park operator, and Wizcom, an information technology
services provider. Headquartered in New York, NY, the Company has approximately
28,000 employees and operates in over 100 countries.
More information about Cendant, its companies, brands and current SEC filings
may be obtained by calling 877-4INFO-CD (877-446-3623) or by visiting the
Company's Web site at www.Cendant.com.
Media Contact: Investor Contacts:
Elliot Bloom Denise Gillen Sam Levenson
212-413-1832 212-413-1833 212-413-1834
9
<PAGE>
TABLE 1
CENDANT CORPORATION AND SUBSIDIARIES
FINANCIAL RESULTS OF OPERATIONS
(IN MILLIONS)
THREE MONTHS ENDED SEPTEMBER 30, 2000
-------------------------------------
<TABLE>
<CAPTION>
AS AS DISPOSED MOVE.COM COMPARABLE
REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B) GROUP (D) BASIS (E)
-------- ----------- -------- -------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 1,225 $ - $ 1,225 $ - $ 15 $ 1,210
EBITDA (A) 463 27 (F) 490 - (20) 510
THREE MONTHS ENDED SEPTEMBER 30, 1999
-------------------------------------
AS AS DISPOSED MOVE.COM COMPARABLE
REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B,C) GROUP (D) BASIS (E)
-------- ----------- -------- ---------------- --------- ---------
Revenues $ 1,410 $ - $ 1,410 $ 202 $ 5 $ 1,203
EBITDA (A) 507 20 (G) 527 31 (8) 504
NINE MONTHS ENDED SEPTEMBER 30, 2000
------------------------------------
AS AS DISPOSED MOVE.COM COMPARABLE
REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B) GROUP (D) BASIS (E)
-------- ----------- -------- -------------- --------- ---------
Revenues $ 3,490 $ - $ 3,490 $ 4 $ 41 $ 3,445
EBITDA (A) 1,196 110 (H) 1,306 (3) (74) 1,383
NINE MONTHS ENDED SEPTEMBER 30, 1999
------------------------------------
AS AS DISPOSED MOVE.COM COMPARABLE
REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B,C) GROUP (D) BASIS (E)
-------- ----------- -------- ---------------- --------- ---------
Revenues $ 4,119 $ - $ 4,119 $ 743 $ 11 $ 3,365
EBITDA (A) 2,111 (693) (I) 1,418 106 (14) 1,326
</TABLE>
----------
(A) Defined as earnings before non-operating interest, income taxes,
depreciation, amortization and minority interest.
(B) Reflects the operating results of businesses which were disposed.
(C) Reflects the operating results of Netmarket Group, Inc. ("NGI"), an
independent company that was created to pursue the development and expansion
of interactive businesses formerly within the Company's Direct Marketing
segment.
(D) The Move.com Group represents a group of businesses which provide a broad
range of quality relocation, real estate and home-related products and
services through its flagship portal site, move.com, and through the
move.com network.
(E) Comparable Basis reflects the As Adjusted results of operations less the
results of operations of the Disposed Businesses and the Move.com Group.
(F) Includes charges of (i) $20 million ($12 million, after tax or $.02 per
diluted share) in connection with litigation asserting claims associated
with accounting irregularities in the former business units of CUC
International Inc. ("CUC") and outside of the principal class action
lawsuit, (ii) $32 million ($20 million, after tax or $.03 per diluted
share) for losses related to the dispositions of businesses, (iii) $7
million ($4 million, after tax) for investigation-related costs and (iv)
$3 million ($2 million, after tax) in connection with the postponement of
the initial public offering of Move.com common stock. Such charges were
partially offset by a gain of $35 million ($35 million, after tax or $.05
per diluted share), which represents the recognition of a portion of the
Company's previously recorded deferred gain from the sale of its fleet
businesses due to the disposition of VMS Europe by Avis Group Holdings,
Inc. in August 2000.
(G) Includes charges of (i) $85 million ($48 million, after tax or $.06 per
diluted share) in connection with the creation of NGI, (ii) $5 million ($3
million, after tax) for investigation-related costs and (iii) $5 million ($3
million, after tax) principally related to the consolidation of European
call centers in Cork, Ireland. Such charges were partially offset by a net
gain of $75 million ($28 million, after tax or $.04 per diluted share)
related to the dispositions of businesses.
(H) Includes charges of (i) $106 million ($70 million, after tax or $.09 per
diluted share) in connection with restructuring and other initiatives, (ii)
$20 million ($12 million, after tax or $.02 per diluted share) in
connection with litigation asserting claims associated with accounting
irregularities in the former business units of CUC and outside of the
principal class action lawsuit, (iii) $15 million ($9 million, after tax or
$.01 per diluted share) for investigation-related costs, (iv) $42 million
($26 million, after tax, or $.03 per diluted share) for net losses related
to the dispositions of businesses and (v) $3 million ($2 million, after
tax) in connection with the postponement of the initial public offering of
Move.com common stock. Such charges were partially offset by (i) a non-cash
credit of $41 million ($26 million, after tax or $.03 per diluted share) in
connection with a change to the original estimate of the number of Rights
to be issued in connection with the PRIDES settlement resulting from
unclaimed and uncontested Rights and (ii) a gain of $35 million ($35
million, after tax or $.04 per diluted share), which represents the
recognition of a portion of the Company's previously recorded deferred gain
from the sale of its fleet businesses due to the disposition of VMS Europe
by Avis Group Holdings, Inc. in August 2000.
(I) Includes a net gain of $825 million ($737 million, after tax or $.90 per
diluted share) related to the dispositions of businesses and an unusual
credit of $1 million ($1 million, after tax) recorded in connection with
the sale of a Company subsidiary, partially offset by charges of (i) $85
million ($48 million, after tax or $.06 per diluted share) in connection
with the creation of NGI, (ii) $23 million ($15 million, after tax or $.02
per diluted share) in connection with the transition of the Company's
lodging franchisees to a Company sponsored property management system,
(iii) $13 million ($8 million, after tax or $.01 per diluted share) for
investigation-related costs, (iv) $7 million ($4 million, after tax)
related to the termination of a proposed acquisition and (v) $5 million ($4
million, after tax) principally related to the consolidation of European
call centers in Cork, Ireland.
<PAGE>
TABLE 2
CENDANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES
Membership and service fees, net $ 1,190 $ 1,372 $ 3,380 $ 3,972
Fleet leasing, net - - - 30
Other 35 38 110 117
------- ------- ------- -------
Net revenues 1,225 1,410 3,490 4,119
------- ------- ------- -------
EXPENSES
Operating 351 444 1,079 1,355
Marketing and reservation 233 270 676 821
General and administrative 151 169 429 525
Depreciation and amortization 87 87 258 277
Other charges (credits):
Restructuring and other unusual charges 3 90 109 112
Litigation settlement and related costs 20 - (21) -
Investigation-related costs 7 5 15 13
Termination of proposed acquisition - - - 7
Interest, net 38 52 86 154
------- ------- ------- -------
Total expenses 890 1,117 2,631 3,264
------- ------- ------- -------
Net gain (loss) on dispositions of businesses 3 75 (7) 825
------- ------- ------- -------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 338 368 852 1,680
Provision for income taxes 101 143 276 382
Minority interest, net of tax 23 16 61 46
------- ------- ------- -------
INCOME FROM CONTINUING OPERATIONS 214 209 515 1,252
Gain (loss) on sale of discontinued operations, net of tax - (7) - 174
------- ------- ------- -------
INCOME BEFORE EXTRAORDINARY LOSS AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE 214 202 515 1,426
Extraordinary loss, net of tax - - (2) -
------- ------- ------- -------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 214 202 513 1,426
Cumulative effect of accounting change, net of tax - - (56) -
------- ------- ------- -------
NET INCOME $ 214 $ 202 $ 457 $ 1,426
======= ======= ======= =======
CD COMMON STOCK INCOME PER SHARE
BASIC
Income from continuing operations $ 0.30 $ 0.29 $ 0.72 $ 1.64
Net income 0.30 0.28 0.64 1.86
DILUTED
Income from continuing operations $ 0.29 $ 0.27 $ 0.69 $ 1.54
Net income 0.29 0.26 0.62 1.75
WEIGHTED AVERAGE SHARES
Basic 725 726 722 765
Diluted 759 780 763 819
MOVE.COM COMMON STOCK LOSS PER SHARE
BASIC AND DILUTED
Net loss $ (0.55) $ (1.22)
WEIGHTED AVERAGE SHARES
Basic and Diluted 4 4
</TABLE>
<PAGE>
TABLE 3
CENDANT CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INCOME (LOSS) PER SHARE DATA - CALCULATION OF
EARNINGS BY CLASS OF COMMON STOCK
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 2000 SEPTEMBER 30, 2000
------------------ ------------------
AS AS AS AS
REPORTED ADJUSTED REPORTED ADJUSTED
-------- -------- -------- --------
<S> <C> <C> <C> <C>
CD COMMON STOCK INCOME PER SHARE
Income (loss) from continuing operations:
Cendant Group $ 228 $ 229 $ 563 $ 619
Cendant Group's retained interest in Move.com Group (A) (12) (10) (43) (42)
----- ----- ----- -----
Income from continuing operations - Basic 216 219 520 577
Convertible debt interest, net of tax 3 3 8 8
----- ----- ----- -----
Income from continuing operations - Diluted $ 219 $ 222 $ 528 $ 585
===== ===== ===== =====
Net income (loss):
Cendant Group $ 228 $ 229 $ 505 $ 619
Cendant Group's retained interest in Move.com Group (A) (12) (10) (43) (42)
----- ----- ----- -----
Net income - Basic 216 219 462 577
Convertible debt interest, net of tax 3 3 8 8
----- ----- ----- -----
Net income - Diluted $ 219 $ 222 $ 470 $ 585
===== ===== ===== =====
Weighted average shares outstanding:
Basic 725 725 722 722
Diluted 759 759 763 763
Income per share:
Basic
Income from continuing operations $0.30 $0.30 $0.72 $0.80
Net income 0.30 0.30 0.64 0.80
Diluted
Income from continuing operations $0.29 $0.29 $0.69 $0.77
Net income 0.29 0.29 0.62 0.77
MOVE.COM COMMON STOCK LOSS PER SHARE
Net loss:
Move.com Group $ (14) $ (12) $ (47) $ (46)
Less: Cendant Group's retained interest in Move.com Group (A) (12) (10) (43) (42)
----- ----- ----- -----
Net loss - Basic and Diluted $ (2) $ (2) $ (4) $ (4)
===== ===== ===== =====
Weighted average shares outstanding:
Basic and Diluted 4 4 4 (B) 4 (B)
Loss per share:
Basic and Diluted (C) $(0.55) $(0.48) $(1.22) $(1.15)
</TABLE>
----------
(A) As Adjusted excludes after tax charges of $2 million in connection with the
postponement of the initial public offering of Move.com common stock.
(B) Weighted average shares outstanding for the nine month period was calculated
from the date of issuance of Move.com common stock (March 31, 2000) through
September 30, 2000.
(C) In thousands, the as reported net loss attributable to Move.com common stock
for the three and nine months ended September 30, 2000 was $1,996 and
$4,363, respectively, and the as adjusted net loss attributable to Move.com
common stock for the three and nine months ended September 30, 2000 was
$1,752 and $4,119, respectively. The weighted average shares outstanding for
the three and nine months ended September 30, 2000 was 3,655 and 3,590,
respectively.
<PAGE>
TABLE 4
CENDANT CORPORATION AND SUBSIDIARIES
REVENUES AND ADJUSTED EBITDA BY SEGMENT *
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
--------------------------------
REVENUES ADJUSTED EBITDA (A)
------------------------------------ --------------------------------------
2000 1999 % CHANGE 2000 1999 % CHANGE
------------------------------------ --------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Travel $ 344 $ 335 3% $ 165 (C) $ 164 1%
Real Estate Franchise 162 161 1% 119 124 (4%)
Relocation 127 117 9% 49 42 17%
Mortgage 132 114 16% 74 59 25%
Individual Membership 185 261 (29%) 43 48 (F) (10%)
Insurance/Wholesale 145 143 1% 48 48 -
Move.com Group 15 5 ** (20)(D) (8) **
Diversified Services 121 278 (56%) 12 (E) 50 (G) (76%)
Inter-segment Eliminations (6) (4) ** - - -
------- ------- ----- -----
Total $ 1,225 $ 1,410 $ 490 $ 527
======= ======= ===== =====
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
REVENUES ADJUSTED EBITDA (A)
------------------------------------ --------------------------------------
2000 1999 % CHANGE 2000 (B) 1999 % CHANGE
------------------------------------ --------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Travel $ 954 $ 948 1% $ 440 (H) $ 463 (J) (5%)
Real Estate Franchise 448 417 7% 328 310 6%
Relocation 332 315 5% 105 94 12%
Mortgage 306 314 (3%) 117 153 (24%)
Individual Membership 540 703 (23%) 136 68 (K) 100%
Insurance/Wholesale 435 426 2% 138 137 1%
Move.com Group 41 11 ** (74)(D) (14) **
Diversified Services 448 789 (43%) 116 (I) 126 (L) (8%)
Fleet - 207 ** - 81 **
Inter-segment Eliminations (14) (11) ** - - -
------- ------- ------- -------
Total $ 3,490 $ 4,119 $ 1,306 $ 1,418
======= ======= ======= =======
</TABLE>
----------
* Cendant Travel, a Company subsidiary, which facilitates travel arrangements
for travel-related and membership businesses of the Company, was moved to
the Travel segment from the Individual Membership segment. Accordingly, the
operating results of Cendant Travel are now reflected in the Travel segment
for all periods presented.
** Not significant
(A) Defined as earnings before non-operating interest, income taxes,
depreciation, amortization and minority interest, adjusted to exclude
certain items which are of a non-recurring or unusual nature and not
measured in assessing segment performance or are not segment specific.
(B) Excludes a charge of $106 million in connection with restructuring and other
initiatives ($63 million, $1 million, $1 million, $20 million, $9 million,
$1 million and $11 million of charges were recorded within the Travel,
Relocation, Mortgage, Individual Membership, Insurance/Wholesale, Move.com
Group and Diversified Services segments, respectively).
(C) Excludes $8 million of losses related to the dispositions of businesses.
(D) Excludes charges of $3 million in connection with the postponement of the
initial public offering of Move.com common stock.
(E) Excludes a gain of $35 million, which represents the recognition of a
portion of the Company's previously recorded deferred gain from the sale of
its fleet businesses due to the disposition of VMS Europe by Avis Group
Holdings, Inc. in August 2000. Such gain was partially offset by (i) a loss
of $24 million related to the dispositions of businesses, (ii) $20 million
in connection with litigation asserting claims associated with accounting
irregularities in the former business units of CUC and outside of the
principal class action lawsuit and (iii) $7 million for
investigation-related costs.
(F) Excludes a charge of $85 million in connection with the creation of NGI and
$8 million of losses related to the disposition of a business.
(G) Excludes a net gain of $83 million related to the dispositions of
businesses, partially offset by $5 million of investigation-related costs
and a $5 million charge principally related to the consolidation of European
call centers in Cork, Ireland.
(H) Excludes $12 million of losses related to the dispositions of businesses.
(I) Excludes (i) a non-cash credit of $41 million in connection with a change in
the original estimate of the number of Rights to be issued in connection
with the PRIDES settlement resulting from unclaimed and uncontested Rights
and (ii) a gain of $35 million, which represents the recognition of a
portion of the Company's previously recorded deferred gain from the sale of
its fleet businesses due to the disposition of VMS Europe by Avis Group
Holdings, Inc. in August 2000; partially offset by (i) $30 million of losses
related to the dispositions of businesses, (ii) $15 million of
investigation-related costs and (iii) $20 million in connection with
litigation asserting claims associated with accounting irregularities in the
former business units of CUC and outside of the principal class action
lawuit.
(J) Excludes a charge of $23 million in connection with the transition of the
Company's lodging franchisees to a Company sponsored property management
system.
(K) Exlcudes a charge of $85 million in connection with the creation of NGI,
partially offset by $26 million of net gains related to the dispositions of
businesses.
(L) Excludes a net gain of $799 million related to the dispositions of
businesses and an unusual credit of $1 million recorded in connection with
the sale of a Company subsidiary, partially offset by (i) $13 million of
investigation-related costs, (ii) a $7 million charge related to the
termination of a proposed acquisition and (iii) $5 million principally
related to the consolidation of European call centers in Cork, Ireland.
<PAGE>
TABLE 5
CENDANT CORPORATION AND SUBSIDIARIES
COMPARABLE BASIS REVENUES AND ADJUSTED EBITDA BY SEGMENT *
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, **
-----------------------------------
COMPARABLE BASIS REVENUES COMPARABLE BASIS ADJUSTED EBITDA (A)(B)
---------------------------------- ---------------------------------------
2000 1999 % CHANGE 2000 1999 % CHANGE
---------------------------------- ---------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Travel $ 344 $ 333 3% $ 165 (D) $ 160 3%
Real Estate Franchise 162 161 1% 119 120 (1%)
Relocation 127 117 9% 49 43 14%
Mortgage 132 114 16% 74 60 23%
Individual Membership 185 200 (8%) 43 49 (F) (12%)
Insurance/Wholesale 145 143 1% 48 50 (4%)
Diversified Services 121 139 (13%) 12 (E) 22 (G) (45%)
Inter-segment Eliminations (6) (4) *** - - -
------- ------- ----- -----
Total $ 1,210 $ 1,203 $ 510 $ 504
======= ======= ===== =====
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, **
----------------------------------
COMPARABLE BASIS REVENUES COMPARABLE BASIS ADJUSTED EBITDA (A)(B)
---------------------------------- ---------------------------------------
2000 1999 % CHANGE 2000 (C) 1999 % CHANGE
---------------------------------- ---------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Travel $ 953 $ 943 1% $ 443 (H) $ 455 (J) (3%)
Real Estate Franchise 448 417 7% 328 303 8%
Relocation 332 315 5% 105 96 9%
Mortgage 306 314 (3%) 117 154 (24%)
Individual Membership 540 532 2% 136 86 (K) 58%
Insurance/Wholesale 435 426 2% 138 141 (2%)
Diversified Services 445 429 4% 116 (I) 91 (L) 27%
Inter-segment Eliminations (14) (11) *** - - -
------- ------- ------- -------
Total $ 3,445 $ 3,365 $ 1,383 $ 1,326
======= ======= ======= =======
</TABLE>
----------
* Comparable Basis reflects the As Adjusted results of operations less the
results of operations of the Disposed Businesses and the Move.com Group.
** Cendant Travel, a Company subsidiary, which facilitates travel arrangements
for travel-related and membership businesses of the Company, was moved to
the Travel segment from the Individual Membership segment. Accordingly, the
operating results of Cendant Travel are now reflected in the Travel segment
for all periods presented.
*** Not meaningful.
(A) Defined as earnings before non-operating interest, income taxes,
depreciation, amortization and minority interest, adjusted to exclude
certain items which are of a non-recurring or unusual nature and not
measured in assessing segment performance or are not segment specific.
(B) As of January 1, 2000, the Company refined its corporate overhead allocation
method. As a result, expenses determined to be primarily associated with a
specific business segment are recorded by that business segment versus
allocating those expenses among the segments based on a percentage of
revenue. The Company determined the refinement in corporate allocation
methods to be appropriate prospective to the completion of the Company's
divestiture plan and based on the composition of the business units
comprising the Company in 2000. Therefore, 1999 Adjusted EBITDA is presented
as if the refined method of allocating corporate overhead in 2000 was
applicable to 1999.
(C) Excludes a charge of $106 million in connection with restructuring and other
initiatives ($63 million, $1 million, $1 million, $20 million, $9 million,
$1 million and $11 million of charges were recorded within the Travel,
Relocation, Mortgage, Individual Membership, Insurance/Wholesale, Move.com
Group and Diversified Services segments, respectively).
(D) Excludes $8 million of losses related to the dispositions of businesses.
(E) Excludes a gain of $35 million, which represents the recognition of a
portion of the Company's previously recorded deferred gain from the sale of
its fleet businesses due to the disposition of VMS Europe by Avis Group
Holdings, Inc. in August 2000. Such gain was partially offset by (i) a loss
of $24 million related to the dispositions of businesses, (ii) $20 million
in connection with litigation asserting claims associated with accounting
irregularities in the former business units of CUC and outside of the
principal class action lawsuit and (iii) $7 million for
investigation-related costs.
(F) Excludes a charge of $85 million in connection with the creation of NGI and
$8 million of losses related to the disposition of a business.
(G) Excludes a net gain of $83 million related to the dispositions of
businesses, partially offset by $5 million of investigation-related costs
and a $5 million charge principally related to the consolidation of European
call centers in Cork, Ireland.
(H) Excludes $12 million of losses related to the dispositions of businesses.
(I) Excludes (i) a non-cash credit of $41 million in connection with a change in
the original estimate of the number of Rights to be issued in connection
with the PRIDES settlement resulting from unclaimed and uncontested Rights
and (ii) a gain of $35 million, which represents the recognition of a
portion of the Company's previously recorded deferred gain from the sale of
its fleet businesses due to the disposition of VMS Europe by Avis Group
Holdings, Inc. in August 2000; partially offset by (i) $30 million of losses
related to the dispositions of businesses, (ii) $15 million of
investigation-related costs and (iii) $20 million in connection with
litigation asserting claims associated with accounting irregularities in the
former business units of CUC and outside of the principal class action
lawuit.
(J) Excludes a charge of $23 million in connection with the transition of the
Company's lodging franchisees to a Company sponsored property management
system.
(K) Exlcudes a charge of $85 million in connection with the creation of NGI,
partially offset by $26 million of net gains related to the dispositions of
businesses.
(L) Excludes a net gain of $799 million related to the dispositions of
businesses and an unusual credit of $1 million recorded in connection with
the sale of a Company subsidiary, partially offset by (i) $13 million of
investigation-related costs, (ii) a $7 million charge related to the
termination of a proposed acquisition and (iii) $5 million principally
related to the consolidation of European call centers in Cork, Ireland.
<PAGE>
TABLE 6
CENDANT CORPORATION AND SUBSIDIARIES
SEGMENT REVENUE DRIVER ANALYSIS
(REVENUE DOLLARS AND MORTGAGE SEGMENT VOLUME IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
-----------------------------------------
2000 1999 % CHANGE
------------ ------------- ----------
<S> <C> <C> <C>
TRAVEL SEGMENT
--------------
Domestic Rooms (A)
Month End Actual Rooms 512,684 507,805 1%
Weighted Average Rooms Available 504,648 490,658 3%
Franchise Fee per Weighted Average Room $ 257.61 $ 254.15 1%
----------- -----------
Total Franchise Fees $ 130 $ 125 4%
Car Rental Days 17,701,460 16,952,151 4%
Franchise Fee per Rental Day $ 2.71 $ 2.74 (1%)
----------- -----------
Total Franchise Fees $ 48 $ 46 4%
Sub-Total Franchise Fees $ 178 $ 171 4%
Number of Timeshare Exchanges (B) 386,451 373,828 3%
Annualized Number of Exchanges 1,545,804 1,495,312 3%
Average Subscriptions 2,362,479 2,289,861 3%
----------- -----------
Total Exchanges and Subscriptions 3,908,283 3,785,173 3%
Average Fee $ 23.54 $ 22.17 6%
----------- -----------
Total Exchange/Subscription Fees (C) $ 92 $ 84 10%
Other Revenue $ 74 $ 80 (8%)
----------- -----------
Total Travel Revenue $ 344 $ 335 3%
=========== ===========
REAL ESTATE FRANCHISE SEGMENT
-----------------------------
Closed Sides - Domestic 518,652 564,574 (8%)
Average Price $ 171,856 $ 157,139 9%
Adjusted Royalty Rate 0.15% 0.16% (3%)
----------- -----------
Total Royalties 138 141 (2%)
Other 24 20 20%
----------- -----------
Total Revenue $ 162 $ 161 1%
=========== ===========
MORTGAGE SEGMENT
----------------
Production Loan Closings $ 6,546 $ 6,555 -
Average Servicing Loan Portfolio $ 64,298 $ 47,376 36%
</TABLE>
----------
(A) Adjusted retrospectively to reflect improved room count information not
previously available as a result of the "Power Up" technology initiative
within the lodging business unit.
(B) Adjusted retrospectively to reflect additional categories of confirmation
modifications.
(C) Third Quarter 2000 includes a $2 million reduction as a result of the
implementation of SAB 101 and its impact on the timing of subscription
revenue recognition.
<PAGE>
TABLE 7
CENDANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN BILLIONS)
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ -----------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 1.2 $ 1.2
Other current assets 3.0 3.4
------ ------
Total current assets 4.2 4.6
Property and equipment, net 1.3 1.3
Goodwill, net 3.2 3.3
Other assets 3.5 3.2
------ ------
Total assets exclusive of assets under programs 12.2 12.4
Assets under management and mortgage programs 3.0 2.7
------ ------
TOTAL ASSETS $ 15.2 $ 15.1
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Stockholder litigation settlement and related costs $ 2.9 $ 2.9
Other current liabilities 2.2 2.7
------ ------
Total current liabilities 5.1 5.6
Long-term debt 2.1 2.4
Other non-current liabilities 0.7 0.8
------ ------
Total liabilities exclusive of liabilities under programs 7.9 8.8
Liabilities under management and mortgage programs 2.5 2.6
Mandatorily redeemable preferred securities issued by subsidiaries 2.1 1.5
Total stockholders' equity 2.7 2.2
------ ------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 15.2 $ 15.1
====== ======
</TABLE>
<PAGE>
TABLE 8
CENDANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
2000 1999
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net cash provided by operating activities exclusive of management and mortgage programs $ 604 $ 672
Net cash provided by (used in) operating activities of management and mortgage programs (28) 1,298
------- -----
NET CASH PROVIDED BY OPERATING ACTIVITIES 576 1,970
------- -----
INVESTING ACTIVITIES
Property and equipment additions (168) (213)
Net assets acquired (net of cash acquired) and acquisition-related payments (43) (146)
Net proceeds from dispositions of businesses 4 2,772
Other, net (55) 79
------- -----
Net cash provided by (used in) investing activities exclusive of management and mortgage programs (262) 2,492
------- -----
Management and mortgage programs:
Repayment on advances on homes under management, net of equity advances 509 7
Additions to mortgage servicing rights, net of proceeds from sales (571) (476)
Investment in leases and leased vehicles, net - (774)
------- -----
(62) (1,243)
------- -----
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (324) 1,249
------- -----
FINANCING ACTIVITIES
Proceeds from debt issuance or borrowings 6 1,717
Principal payments on borrowings (776) (1,713)
Issuances of common stock 551 76
Repurchases of common stock (306) (2,635)
Proceeds from mandatorily redeemable preferred securities 91 -
Proceeds from mandatorily redeemable preferred interest in subsidiary 375 -
Other, net (1) -
------- -----
Net cash used in financing activities exclusive of management and mortgage programs (60) (2,555)
------- -----
Management and mortgage programs:
Proceeds received for debt repayment in connection with fleet segment disposition - 3,017
Proceeds from debt issuance or borrowings 3,237 4,157
Principal payments on borrowings (4,283) (6,484)
Net change in short-term borrowings 875 (1,772)
------- -----
(171) (1,082)
------- -----
NET CASH USED IN FINANCING ACTIVITIES (231) (3,637)
------- -----
Effect of changes in exchange rates on cash and cash equivalents 25 32
------- -----
Net increase (decrease) in cash and cash equivalents 46 (386)
Cash and cash equivalents, beginning of period 1,164 1,009
------- -----
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,210 $ 623
======= =====
</TABLE>
