<PAGE>
[CENDANT LOGO]
CENDANT REPORTS SECOND QUARTER 2000 RESULTS
Adjusted EPS from Continuing Operations, Excluding Move.com,
Rose 13% to $0.26 in 2000 vs. $0.23 in 1999
Reported EPS from Continuing Operations was $0.24 in 2000 vs. $1.06 in 1999,
Including $0.86 Gain in 1999 from Disposition of Businesses
NEW YORK, NY, JULY 19, 2000 - Cendant Corporation (NYSE: CD) today reported
second quarter and first half 2000 results.
"We had a good quarter with our earnings per share up 13% and year-to-date
earnings per share up 18% compared with last year," said Cendant Chairman,
President and Chief Executive Officer, Henry R. Silverman. "We achieved these
results through the solid performance of our franchise brands, the improved
financial results in our membership businesses, and several initiatives to
control costs. Our management remains focused on increasing shareholder value
and to that end, we continue to pursue organic growth of our businesses,
implementation of our convergence strategy to apply our off-line assets to the
online world, and acquisitions and joint ventures that leverage our core
competencies."
SECOND 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. (See Table 4 for
Revenues and Adjusted EBITDA by Segment and Table 5 for Segment Revenue Driver
Analysis.) All dollar amounts are in millions.
TRAVEL DIVISION
Travel 2000 1999 % change
------------------------------------------------------------------------------
Revenues $294 $290 1%
------------------------------------------------------------------------------
Adjusted EBITDA $145 $146 (1%)
------------------------------------------------------------------------------
Adjusted EBITDA Margin 49% 50%
------------------------------------------------------------------------------
Franchise fees rose primarily as a result of room growth in Lodging. Timeshare
subscription revenues also increased, primarily as a result of increased
memberships. Results include reductions due to the timing and allocation of
certain revenues and expenses. Excluding these reductions, revenues increased 2%
and Adjusted EBITDA increased 4% in second quarter 2000 over second quarter
1999.
1
<PAGE>
REAL ESTATE DIVISION
Real Estate Franchise 2000 1999 % change
----------------------------------------------------------------------------
Revenues $166 $159 4%
----------------------------------------------------------------------------
EBITDA $125 $114 10%
----------------------------------------------------------------------------
EBITDA Margin 75% 72%
----------------------------------------------------------------------------
Revenues increased as a result of higher royalty fees supported by unit growth
and an increase in the average price of homes sold by our franchisees. Through
our continued franchise sales efforts, we have increased our market share.
Second quarter 2000 includes a $10 million gain on a payment from NRT, our
largest real estate franchisee, pursuant to its now completed recapitalization
plan. Since there was an identical gain in second quarter 1999, there was no
impact on EBITDA growth year over year. Excluding timing differences in the
revenues recorded for our real estate brand national advertising funds that have
no impact on EBITDA, revenues for the segment increased 9% and the EBITDA margin
remained constant at 75%.
Relocation 2000 1999 % change
--------------------------------------------------------------------------
Revenues $114 $107 7%
--------------------------------------------------------------------------
EBITDA $38 $34 12%
--------------------------------------------------------------------------
EBITDA Margin 33% 32%
--------------------------------------------------------------------------
Revenues and EBITDA increased primarily from additional sales of outsourcing
services to existing customers, higher international services fees from new and
existing clients and other ancillary service fees. These results reflect a
continuing trend from asset-based to service-based fees. During the second
quarter, we signed 30 new accounts and expanded 31 existing business
relationships. A gain recognized in the second quarter of 1999 on the sale of a
minority interest in an insurance subsidiary partially offset revenue and EBITDA
growth. Excluding this gain, revenues increased 14% and EBITDA increased 41% in
second quarter 2000 over 1999.
Mortgage 2000 1999 % change
------------------------------------------------------------------------
Revenues $97 $107 ( 9%)
------------------------------------------------------------------------
EBITDA $30 $50 (40%)
------------------------------------------------------------------------
EBITDA Margin 31% 47%
------------------------------------------------------------------------
Revenues decreased due to a reduction in origination revenues. Total mortgage
closings of $5.9 billion consisted of $5.5 billion in purchase mortgages and
$400 million in refinance mortgages. Total closings declined by $1.9 billion
compared with second quarter 1999 primarily because of a reduction in refinance
volume from the unprecedented refinancing activity in 1999. Mortgage closings
from our Log In - Move In Internet business continued to grow and were $244
million in second quarter 2000 compared with $64 million in second quarter 1999.
EBITDA margin decreased principally as a result of the reduced volume of
refinancings and increased spending for technology. During the quarter, we
entered into outsourcing agreements with eight major organizations to provide
mortgage origination services, including AOL for its Member Perks program. As
previously disclosed, we expect full year 2000 EBITDA in the mortgage segment to
be slightly lower than 1999.
2
<PAGE>
DIRECT MARKETING DIVISION
Individual Membership 2000 1999 % change
--------------------------------------------------------------------------------
Revenues $188 $246 (24%)
--------------------------------------------------------------------------------
Adjusted EBITDA $45 $17 165%
--------------------------------------------------------------------------------
Adjusted EBITDA Margin 24% 7%
--------------------------------------------------------------------------------
While Individual Membership revenues decreased on a reported basis, revenues
were relatively flat and Adjusted EBITDA increased 80% on a comparable basis,
excluding the operations of disposed businesses. Adjusted EBITDA increased
principally due to our focus on profitability by carefully targeting marketing
efforts and reducing solicitation spending.
Insurance/Wholesale 2000 1999 % change
--------------------------------------------------------------------------------
Revenues $145 $143 1%
--------------------------------------------------------------------------------
EBITDA $42 $50 (16%)
--------------------------------------------------------------------------------
EBITDA Margin 29% 35%
--------------------------------------------------------------------------------
Insurance/Wholesale revenues rose primarily as a result of international
expansion. EBITDA decreased primarily due to costs associated with the
consolidation of domestic operations from California to Tennessee. For the first
six months, EBITDA increased marginally over last year and we expect that full
year results will continue to show improvement over 1999.
DIVERSIFIED SERVICES DIVISION
Diversified Services 2000 1999 % change
-----------------------------------------------------------------------------
Revenues $118 $230 (49%)
-----------------------------------------------------------------------------
Adjusted EBITDA $8 $12 (33%)
-----------------------------------------------------------------------------
Adjusted EBITDA Margin 7% 5%
-----------------------------------------------------------------------------
Revenues decreased as a result of the 1999 business dispositions, including
Global Refund Group, Entertainment Publications, and Green Flag Group. The
absence of these divested businesses from second quarter 2000 operations
resulted in a reduction in revenues of $113 million with no impact on Adjusted
EBITDA. Adjusted EBITDA also includes the costs incurred to pursue Internet
initiatives through Cendant Internet Group.
MOVE.COM GROUP
Move.com Group 2000 1999
--------------------------------------------------------------
Revenues $15 $3
--------------------------------------------------------------
EBITDA ($29) ($6)
--------------------------------------------------------------
Move.com Group revenues increased fivefold 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.
3
<PAGE>
EPS ITEMS
Cendant Corporation has two classes of common stock: CD stock and Move.com
stock. CD stock is intended to track the performance of Cendant Group and
Move.com 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 stock includes Cendant Group operations and a majority interest in
Move.com Group. Reported EPS for Move.com stock includes Move.com Group
operations less Cendant Group's retained interest in Move.com Group.
The following items are reflected in second quarter 1999 reported results:
o A gain of $0.86 per share after tax on the dispositions of the Company's
Fleet business segment and certain other non-strategic businesses
o A charge of $0.02 per share after tax to fund a contribution to a trust for
the transition of the Company's lodging franchisees to a company-sponsored
property management system
BALANCE SHEET AND CASH FLOW ITEMS
o In second quarter 2000, we purchased approximately 7 million shares of CD
stock under a program initiated in October 1998. Since the inception of the
program, we have reduced shares outstanding by 21%. The Company has $500
million remaining under its authorized share repurchase program.
o As of June 30, 2000, we had approximately $2.4 billion of debt, available
credit of $1.75 billion, and $1.2 billion of cash and cash equivalents on
hand. The net debt to total capital ratio was 22%.
o Annualized return on common equity measured on year-to-date adjusted net
income was 30%.
CONFERENCE CALL
Cendant will host a conference call to discuss second quarter results on
Thursday, July 20, 2000 at 11:00 a.m. Eastern Time. Investors may access this
call live at www.Cendant.com or dial in to 719-457-2621. A replay will be
available beginning at 2:00 p.m. Eastern Time on July 20 until 8:00 p.m. on July
24, 2000 at www.Cendant.com or through the replay dial-in number: (719)
457-0820, access code: 286781.
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 cause actual results to differ materially from
those in the forward-looking statements are specified in the Company's Form 10-K
for the year ended December 31, 1999, 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,
4
<PAGE>
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
5
<PAGE>
TABLE 1
CENDANT CORPORATION AND SUBSIDIARIES
FINANCIAL RESULTS OF OPERATIONS
(IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, 2000
--------------------------------
AS AS DISPOSED MOVE.COM COMPARABLE
REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B) GROUP (C) BASIS (D)
-------- ----------- -------- -------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 1,137 $ - $ 1,137 $ 1 $ 15 $ 1,121
EBITDA (A) 403 1(E) 404 - (29) 433
<CAPTION>
THREE MONTHS ENDED JUNE 30, 1999
--------------------------------
AS AS DISPOSED MOVE.COM COMPARABLE
REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B) GROUP (C) BASIS (D)
-------- ----------- -------- -------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 1,391 $ - $ 1,391 $ 282 $ 3 $ 1,106
EBITDA (A) 1,179 (721)(F) 458 39 (6) 425
<CAPTION>
SIX MONTHS ENDED JUNE 30, 2000
------------------------------
AS AS DISPOSED MOVE.COM COMPARABLE
REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B) GROUP (C) BASIS (D)
-------- ----------- -------- -------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 2,265 $ - $ 2,265 $ 4 $ 26 $ 2,235
EBITDA (A) 733 83(G) 816 - (55) 871
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1999
------------------------------
AS AS DISPOSED MOVE.COM COMPARABLE
REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B) GROUP (C) BASIS (D)
-------- ----------- -------- -------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 2,708 $ - $ 2,708 $ 540 $ 6 $ 2,162
EBITDA (A) 1,604 (713) (H) 891 74 (6) 823
</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) 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.
(D) Comparable Basis reflects the consolidated As Adjusted results of
operations less the operating results of the Disposed Businesses and the
Move.com Group.
(E) Includes $5 million ($3 million, after tax) of investigation-related
costs, partially offset by $4 million ($2 million, after tax) of gains
related to the dispositions of businesses.
(F) Includes a net gain of $750 million ($709 million, after tax or $.86 per
diluted share) related to the dispositions of businesses. Such gain was
partially offset by charges of (i) $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 and
(ii) $6 million ($4 million, after tax or $.01 per diluted share) for
investigation-related costs.
(G) Includes charges of (i) $106 million ($70 million, after tax or $.09 per
diluted share) in connection with restructuring and other initiatives
focused principally on improving the overall level of organizational
efficiency, consolidating and rationalizing existing processes, reducing
cost structures in the Company's underlying businesses and other related
efforts, (ii) $10 million ($6 million, after tax or $.01 per diluted
share) for net losses related to the dispositions of businesses and (iii)
$8 million ($5 million, after tax or $.01 per diluted share) for
investigation-related costs. Such charges were partially offset by 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.
(H) Includes a net gain of $750 million ($709 million, after tax or $.85 per
diluted share) related to the dispositions of businesses and a $1 million
unusual credit recorded in connection with the sale of a Company
subsidiary, partially offset by charges of (i) $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, (ii) $8 million ($5 million, after tax or $.01 per
diluted share) for investigation-related costs and (iii) $7 million ($4
million, after tax) related to the termination of a proposed acquisition.
<PAGE>
TABLE 2
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 SIX MONTHS ENDED
JUNE 30, 2000 JUNE 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 $ 192 $ 193 $ 335 $ 389
Cendant Group's retained interest in Move.com Group (15) (15) (32) (31)
------ ------ ------ ------
Income from continuing operations - Basic 177 178 303 358
====== ====== ====== ======
Convertible debt interest, net of tax 3 3 5 5
------ ------ ------ ------
Income from continuing operations - Diluted $ 180 $ 181 $ 308 $ 363
====== ====== ====== ======
Net income (loss):
Cendant Group $ 192 $ 193 $ 277 $ 389
Cendant Group's retained interest in Move.com Group (15) (15) (32) (31)
------ ------ ------ ------
Net income - Basic 177 178 245 358
Convertible debt interest, net of tax 3 3 5 5
------ ------ ------ ------
Net income - Diluted $ 180 $ 181 $ 250 $ 363
Weighted average shares outstanding:
Basic 722 722 720 720
Diluted 762 762 765 765
Income per share:
Basic
Income from continuing operations $ 0.25 $ 0.25 $ 0.42 $ 0.50
Net income 0.25 0.25 0.34 0.50
Diluted
Income from continuing operations 0.24 0.24 0.40 0.48
Net income 0.24 0.24 0.33 0.48
MOVE.COM COMMON STOCK LOSS PER SHARE
Net loss:
Move.com Group $ (17) $ (17) $ (34) $ (33)
Less: Cendant Group's retained interest in Move.com Group (15) (15) (32) (31)
------ ------ ------ ------
Net loss - Basic and Diluted $ (2) $ (2) $ (2) $ (2)
====== ====== ====== ======
Weighted average shares outstanding:
Basic and Diluted 4 4 4(B) 4(B)
Loss per share:
Basic and Diluted (A) $(0.67) $(0.67) $(0.67) $(0.67)
</TABLE>
----------
(A) In thousands, the net loss attributable to the Move.com common stock for
the three and six months ended June 30, 2000 was $2,367 and the weighted
average shares outstanding for three and six months ended June 30, 2000
was 3,524.
(B) Weighted average shares outstanding for the six month period was
calculated from the date of issuance of the Move.com common stock (March
31, 2000) through June 30, 2000.
<PAGE>
TABLE 3
CENDANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In millions, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues
Membership and service fees, net $ 1,124 $ 1,347 $ 2,190 $ 2,600
Fleet leasing, net -- 11 -- 30
Other 13 33 75 78
------- ------- ------- -------
Net revenues 1,137 1,391 2,265 2,708
EXPENSES
Operating 361 455 728 912
Marketing and reservation 228 288 444 550
General and administrative 144 190 277 355
Depreciation and amortization 86 97 171 190
Other charges (credits):
Restructuring and other unusual charges -- 23 106 22
Litigation settlement and related costs -- -- (41) --
Investigation-related costs 5 6 8 8
Termination of proposed acquisition -- -- -- 7
Interest, net 22 54 47 102
------- ------- ------- -------
Total expenses 846 1,113 1,740 2,146
------- ------- ------- -------
Net gain (loss) on dispositions of businesses 4 750 (10) 750
------- ------- ------- -------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 295 1,028 515 1,312
Provision for income taxes 98 138 176 238
Minority interest, net of tax 22 16 38 31
------- ------- ------- -------
INCOME FROM CONTINUING OPERATIONS 175 874 301 1,043
Gain (loss) on sale of discontinued operations, net of tax -- (12) -- 181
------- ------- ------- -------
INCOME BEFORE EXTRAORDINARY LOSS AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE 175 862 301 1,224
Extraordinary loss, net of tax -- -- (2) --
------- ------- ------- -------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 175 862 299 1,224
Cumulative effect of accounting change, net of tax -- -- (56) --
------- ------- ------- -------
NET INCOME $ 175 $ 862 $ 243 $ 1,224
======= ======= ======= =======
CD COMMON STOCK INCOME PER SHARE
BASIC
Income from continuing operations $ 0.25 $ 1.14 $ 0.42 $ 1.33
Net income 0.25 1.12 0.34 1.56
DILUTED
Income from continuing operations 0.24 1.06 0.40 1.25
Net income 0.24 1.05 0.33 1.47
WEIGHTED AVERAGE SHARES
Basic 722 770 720 785
Diluted 762 824 765 839
MOVE.COM COMMON STOCK LOSS PER SHARE
BASIC AND DILUTED
Net loss $ (0.67) $ (0.67)
WEIGHTED AVERAGE SHARES
Basic and Diluted 4 4
</TABLE>
<PAGE>
TABLE 4
CENDANT CORPORATION AND SUBSIDIARIES
Revenues and Adjusted EBITDA by Segment
(Dollars in millions)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------
REVENUES ADJUSTED EBITDA (A)
---------------------------------- ------------------------------------------
2000 1999 % CHANGE 2000 1999 % CHANGE
---------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Travel $ 294 $ 290 1% $ 145 $ 146(D) (1%)
Real Estate Franchise 166 159 4% 125 114 10%
Relocation 114 107 7% 38 34 12%
Mortgage 97 107 (9%) 30 50 (40%)
Individual Membership 188 246 (24%) 45 17(E) 165%
Insurance/Wholesale 145 143 1% 42 50 (16%)
Move.com Group 15 3 * (29) (6) *
Diversified Services 118 230 (49%) 8(C) 12(F) (33%)
Fleet -- 106 * -- 41 *
------ ------ ------ ------
Total $1,137 $1,391 $ 404 $ 458
====== ====== ====== ======
<CAPTION>
SIX MONTHS ENDED JUNE 30,
REVENUES ADJUSTED EBITDA (A)
---------------------------------- ------------------------------------------
2000 1999 % CHANGE 2000 1999 % CHANGE
---------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Travel $ 565 $ 562 1% $ 271(G) $ 291(D) (7%)
Real Estate Franchise 286 256 12% 209 185 13%
Relocation 206 198 4% 56 52 8%
Mortgage 174 200 (13%) 42 94 (55%)
Individual Membership 393 487 (19%) 96 29(E) 231%
Insurance/Wholesale 290 283 2% 90 88 2%
Move.com Group 26 6 * (55) (6) *
Diversified Services 325 509 (36%) 107(H) 77(I) 39%
Fleet -- 207 * -- 81 *
------ ------ ------ ------
Total $2,265 $2,708 $ 816 $ 891
====== ====== ====== ======
</TABLE>
-------------
* 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) Excludes a charge of $106 million in connection with restructuring and
other initiatives focused principally on improving the overall level of
organizational efficiency, consolidating and rationalizing existing
processes, reducing cost structures in the Company's underlying businesses
and other related efforts ($60 million, $1 million, $1 million, $23
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 $5 million of investigation-related costs, partially offset by $4
million of gains related to the dispositions of businesses.
(D) Excludes $23 million in connection with the transition of the Company's
lodging franchisees to a Company sponsored property management system.
(E) Excludes $34 million of net gains related to the dispositions of
businesses.
(F) Excludes $716 million of net gains related to the dispositions of
businesses, partially offset by $6 million of investigation-related costs.
(G) Excludes $4 million of losses related to the dispositions of businesses.
(H) Excludes a non-cash credit of $41 million 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. Such credit was partially offset by $6 million of losses related
to the dispositions of businesses and $8 million of investigation-related
costs.
(I) Excludes $716 million of net gains related to the dispositions of
businesses and a $1 million unusual credit recorded in connection with the
sale of a Company subsidiary, partially offset by $8 million of
investigation-related costs and a $7 million charge related to the
termination of a proposed acquisition.
<PAGE>
TABLE 5
CENDANT CORPORATION AND SUBSIDIARIES
SEGMENT REVENUE DRIVER ANALYSIS
(REVENUE DOLLARS AND MORTGAGE SEGMENT VOLUME IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
-------------------------------------------
2000 1999 % CHANGE
----------- ---------- --------
<S> <C> <C> <C>
TRAVEL SEGMENT
Domestic Rooms (A)
Month End Actual Rooms .............. 513,703 499,484 3%
Weighted Average Rooms Available .... 501,929 486,077 3%
Franchise Fee per Weighted Average Room $ 228.32 $ 232.88 (2%)
----------- -----------
Total Franchise Fees .................. $ 115 $ 113 2%
Car Rental Days ....................... 15,851,719 15,315,889 3%
Franchise Fee per Rental Day .......... $ 2.83 $ 2.92 (3%)
----------- -----------
Total Franchise Fees .................. $ 45 $ 45 --
Sub-Total Franchise Fees ............ $ 160 $ 158 1%
Number of Timeshare Exchanges (B) ..... 360,968 390,809
Annualized Number of Exchanges ........ 1,443,872 1,563,236
Average Subscriptions ................. 2,341,576 2,299,123
----------- -----------
Total Exchanges and Subscriptions ..... 3,785,448 3,862,359
Average Fee ........................... $ 23.01 $ 22.06 4%
----------- -----------
Total Exchange/Subscription Fees (C) .. $ 87 $ 85 2%
----------- -----------
Other Revenue ......................... $ 47 $ 47 --
----------- -----------
TOTAL TRAVEL REVENUE .................. $ 294 $ 290 1%
=========== ===========
REAL ESTATE FRANCHISE SEGMENT
Closed Sides - Domestic ............... 503,921 524,777 (4%)
Average Price ......................... $ 172,594 $ 151,430 14%
Adjusted Royalty Rate ................. 0.16% 0.15% 7%
----------- -----------
Total Royalties ....................... 137 122 12%
Other ................................. 29 37 (22%)
----------- -----------
Total Revenue ......................... $ 166 $ 159 4%
=========== ===========
MORTGAGE SEGMENT
Production Loan Closings (D) .......... $ 5,916 $ 7,816 (24%)
Average Servicing Loan Portfolio ...... $ 58,273 $ 43,751 33%
</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) Second Quarter 2000 includes $2 million reduction as a result of the
implementation of SAB 101 and its impact on the timing of subscription
revenue recognition.
(D) The $1.9 billion decrease in production loan closings is comprised of a
$1.4 billion reduction in mortgage refinancing volume and a $500 million
decrease in closings for home purchases.
<PAGE>
TABLE 6
CENDANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN BILLIONS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
--------- ---------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 1.2 $ 1.2
Other current assets 3.1 3.4
--------- ---------
Total current assets 4.3 4.6
Property and equipment, net 1.3 1.3
Goodwill, net 3.2 3.3
Other assets 3.3 3.2
--------- ---------
Total assets exclusive of assets under programs 12.1 12.4
Assets under management and mortgage programs 3.0 2.7
--------- ---------
TOTAL ASSETS $ 15.1 $ 15.1
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Stockholder litigation settlement and related costs $ 2.9 $ 2.9
Other current liabilities 2.1 2.7
--------- ---------
Total current liabilities 5.0 5.6
Long-term debt 2.1 2.4
Other non-current liabilities 0.7 0.8
--------- ---------
Total liabilities exclusive of liabilities under programs 7.8 8.8
Liabilities under management and mortgage programs 2.7 2.6
Mandatorily redeemable preferred securities issued by subsidiaries 2.1 1.5
Total stockholders' equity 2.5 2.2
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 15.1 $ 15.1
========== ==========
</TABLE>
<PAGE>
TABLE 7
CENDANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
------------------------------
2000 1999
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net cash provided by operating activities exclusive of management and mortgage programs $ 385 $ 339
Net cash provided by (used in) operating activities of management and mortgage programs (214) 895
---------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 171 1,234
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INVESTING ACTIVITIES
Property and equipment additions (115) (130)
Net assets acquired (net of cash acquired) and acquisition-related payments (16) (142)
Net proceeds from dispositions of businesses 4 2,615
Other, net (79) 30
---------- ---------
Net cash provided by (used in) investing activities exclusive of management and mortgage programs (206) 2,373
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Management and mortgage programs:
Repayment on advances on homes under management, net of equity advances 423 30
Additions to mortgage servicing rights, net of proceeds from sale (319) (247)
Investment in leases and leased vehicles, net - (773)
---------- ---------
104 (990)
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NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (102) 1,383
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FINANCING ACTIVITIES
Principal payments on borrowings (776) (1)
Debt financing costs - (6)
Issuances of common stock 536 52
Repurchases of common stock (300) (1,342)
Proceeds from mandatorily redeemable preferred securities issued by subsidiaries 466 -
Other, net (3) -
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Net cash used in financing activities exclusive of management and mortgage programs (77) (1,297)
---------- ---------
Management and mortgage programs:
Proceeds received for debt repayment in connection with fleet segment disposition - 3,017
Proceeds from debt issuance or borrowings 2,009 3,068
Principal payments on borrowings (2,719) (4,655)
Net change in short-term borrowings 765 (763)
---------- ---------
55 667
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NET CASH USED IN FINANCING ACTIVITIES (22) (630)
---------- ---------
Effect of changes in exchange rates on cash and cash equivalents 23 67
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Net increase in cash and cash equivalents 70 2,054
Cash and cash equivalents, beginning of period 1,164 1,009
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,234 $ 3,063
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</TABLE>
