SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
Form 11-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to __________
------------
Commission File No. 1-7797
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PHH CORPORATION
Employee Investment Plan
(Full title of the Plan)
PHH Corporation
(Name of issuer of the securities held pursuant to the Plan)
6 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive office)
<PAGE>
PHH CORPORATION EMPLOYEE
INVESTMENT PLAN
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORTS
FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 1997 AND 1996:
Statements of Net Assets Available for Benefits
Statements of Changes in Net Assets Available for Benefits
Notes to Financial Statements
SUPPLEMENTAL SCHEDULES FOR THE YEAR
ENDED DECEMBER 31, 1997:
Item 27a - Schedule of Assets Held for Investment Purposes
Item 27d - Schedule of Reportable Transactions
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
PHH Corporation Employee Investment Plan
Parsippany, New Jersey
We have audited the accompanying statement of net assets available for benefits
of PHH Corporation Employee Investment Plan (the Plan) as of December 31, 1997
and the related statement of changes in net assets available for benefits for
the year then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31,
1997, and the changes in net assets available for benefits of the year then
ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purposes of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment purposes as of December 31, 1997, and (2) transactions in
excess of five percent of the current value of plan assets for the year ended
December 31, 1997 are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's management. Such
schedules have been subjected to the auditing procedures applied in our audit of
the basic 1997 financial statements and, in our opinion, are fairly stated in
all material respects when considered in relation to the basic financial
statements taken as a whole.
/s/ Deloitte & Touche LLP
Washinton, D.C.
June 30, 1998
<PAGE>
Independent Auditors' Report
The Employee Benefits Committee
PHH Corporation
We have audited the accompanying statement of net assets available for plan
benefits of the PHH Corporation Employee Investment Plan as of December 31, 1996
and the related statement of changes in net assets available for plan benefits
for the year then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan
at December 31, 1996, and the changes in net assets available for benefits
f the year then ended in conformity with generally accepted accounting
principles.
/s/ KPMG Peat Marwick LLP
Baltimore, Maryland
April 29, 1997
<PAGE>
PHH CORPORATION EMPLOYEE
INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997 AND 1996
- ---------------------------------------------------------------------------
ASSETS 1997 1996
- --------------------------------------------- ------------ ------------
INVESTMENTS:
Cendant Corporation common stock ......... $100,839,906 $ --
PHH Corporation common stock ............. -- 73,604,551
Fidelity US Equity Index Portfolio ....... 22,986,867 15,566,475
Fidelity Magellan Fund ................... 26,038,455 20,966,923
Fidelity Retirement Money Market Portfolio 14,446,587 11,546,298
Fidelity Asset Manager ................... 3,968,087 2,511,787
Fidelity Europe Fund ..................... 5,710,881 3,466,056
Fidelity US Bond Index Portfolio ......... 1,345,672 862,406
Participant loans receivable ............. 3,691,913 3,464,922
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS ........... $179,028,368 $131,989,418
============ ============
See notes to financial statements.
<PAGE>
PHH CORPORATION EMPLOYEE
INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- -----------------------------------------------------------------------
1997 1996
------------ ------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions:
Participants ....................... $ 7,954,721 $ 7,431,194
Employer ........................... 6,897,990 4,910,626
------------ ------------
Total contributions ..................... 14,852,711 12,341,820
------------ ------------
Investment income:
Realized and unrealized gains ........ 48,816,989 35,533,366
Interest and dividends ............... 4,351,887 6,219,775
------------ ------------
Total investment income ................. 53,168,876 41,753,141
------------ ------------
Total additions ......................... 68,021,587 54,094,961
------------ ------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants ........ 20,889,265 13,793,059
Trustee fees ......................... 93,372 88,121
------------ ------------
Total deductions 20,982,637 13,881,180
------------ ------------
NET INCREASE IN NET ASSETS
AVAILABLE FOR BENEFITS ............... 47,038,950 40,213,781
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR .................... 131,989,418 91,775,637
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR .......................... $179,028,368 $131,989,418
============ ============
See notes to financial statements.
<PAGE>
PHH CORPORATION EMPLOYEE
INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------------------------------
1. BUSINESS COMBINATIONS AND PLAN MERGER
On April 30, 1997, PHH Corporation (the "Company") was merged with and
into HFS Incorporated ("HFS") (the "HFS Merger") and on December 17, 1997,
HFS was merged with and into CUC International Inc. ("CUC") to form
Cendant Corporation ("Cendant"). The Company is a wholly owned subsidiary
of Cendant Corporation.
On May 1, 1998, the PHH Corporation Employee Investment Plan (the "Plan")
comprised of $148.5 million in Plan assets, was merged into the Cendant
Corporation Employee Savings Plan (the "Cendant Plan"), formerly the HFS
Incorporated Employee Savings Plan (the "Plan Merger"). Coincident with
the Plan Merger, plan participants became participants in the Cendant
Plan. Accordingly, the transfer of each of the participants plan assets
that existed at the transfer date under the Plan were invested in
comparable investment categories in proportionate amounts within the
Cendant Plan. Effective the date of the Plan Merger, investment options
for participants under the Plan were terminated and all future
contributions were invested in options available under the Cendant Plan.
After the Plan Merger, plan participants maintained the same vesting
for their plan assets as was in effect under the Plan. Plan participants
can refer to the Cendant Plan document for a more complete description of
that plan.
Although it has not expressed any intention to do so, Cendant reserves the
right to modify, suspend, amend or terminate the Cendant Plan in whole or
in part at any time subject to the provisions of ERISA. If the Cendant
Plan is terminated, the amounts credited to the employer contribution
accounts of all participants shall become fully vested.
2. DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information
relative to the Plan as it existed prior to the Plan Merger. Participants
can refer to the Plan agreement for a more complete description of the
Plan's provisions that were in effect for the financial statement periods
presented.
The Plan is a defined contribution plan. It is subject to the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA"). The
following is a summary of certain plan provisions that were in effect for
1997 and 1996.
A. Eligibility - Each employee of the Company is eligible to participate
in the Plan after six months of service if at least 1,000 hours were
worked in a consecutive 12-month period commencing on the date of
employment, or in any Plan year commencing after the date of
employment. There is no age requirement for eligibility to
participate in the Plan.
B. Employee Contributions - Each participant may contribute to the Plan
each year between 0% and 10% of eligible earnings subject to certain
limits contained in the Internal Revenue Code of 1986, as amended.
C. Employer Contributions - Prior to May 1, 1997, the Company's matching
contribution was dollar-for-dollar up to 3% of the participant's
eligible deferred earnings and up to an additional 3% of eligible
deferred earnings based upon the profitability of the Company from
continuing operations for the relevant fiscal year. The
profitability-based rate of the matchable portion was determined each
year by the Board of Directors. All Company contributions matching
the first 3% of the participant's eligible deferred earnings were
invested in PHH Corporation common stock with no transfers permitted
until age 50. All Company contributions matching up to an
additional 3% based upon Company profitability were initially
invested in the Fidelity Retirement Money Market Portfolio with no
transfer restrictions. During Plan years 1997 and 1996, additional
Company matching contributions totaling approximately $2,541,100 and
$1,761,700, respectively, were paid to participants based
on Company profitability.
Effective May 1, 1997, in connection with the HFS Merger, the
provisions of the Plan were amended to provide for a Company match of
100% of employee contributions up to 3% of the participant's eligible
deferred earnings and 50% of additional contributions up to 6% of the
participant's eligible deferred earnings and, as amended, all such
Company match contributions to the Plan were to be invested
proportionately in the same investment options as the participant had
designated for his or her salary deferral contributions with no
transfer restrictions.
D. Vesting - Participants have a full and immediate vested interest in
amounts contributed by them and earnings thereon. Participants have a
vested interest in the Company's matching contributions determined by
the participants' years of vested service. Generally, after three
years of such service, participants have a 100% vested interest in
all Company contributions made and to be made in the future.
E. Rollovers - All employees , upon commencement of employment, are
provided the option of making a rollover contribution to the Plan in
accordance with the Internal Revenue Service regulations.
F. Loan Provision - Participants may obtain a loan of up to 50% of their
vested account balance not to exceed $50,000. The interest rate
charged on loans outstanding is the prime rate plus 1% fixed for the
entire term of the loan. Loan terms may range up to five years unless
the purpose of the loan is to buy or build a primary residence in
which case the loan term may be extended to ten years. Repayment of
the loan principal and interest occurs through equal payroll
deductions. Participants incur no taxable income as a result of
taking a loan unless the loan is not repaid.
G. Benefits Payable - Distributions to terminated participants are
reported in the financial statements when paid. Amounts payable to
participants who have terminated participation in the Plan were
approximately $8.5 million and $6.1 million at December 31, 1997 and
1996, respectively. The benefits payable to participants as of
December 31, 1997 will be reflected as a liability on the Plan's Form
5500 in accordance with Department of Labor regulations.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS
Basis of Presentation - The accompanying financial statements of the Plan
have been prepared on the accrual basis of accounting and present the net
assets available for plan benefits and the changes in net assets available
for plan benefits. Expenses of administering the Plan incurred by the
Company (i.e., the cost of printing literature and forms, the disbursement
of benefits, the compensation of administrators, consultants, counsel,
etc.), may be paid from forfeited Plan assets at the discrection of the
Company. Internal Company support costs (i.e., the cost of staff time,
etc.) are paid by the Company.
Valuation of Investments - Purchases and sales of securities are recorded
on a trade-date basis. Investments are carried at fair value as determined
by quoted market prices.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and judgments that affect the reported amounts and related
disclosures at the date of the financial statements. Actual results could
differ from those estimates.
<PAGE>
4. INVESTMENTS
The Plan's investments which exceeded 5% of net assets available for
benefits as of December 31, 1997 and 1996 are as follows:
Description of investment ................ 1997 1996
------------ ------------
Cendant Corporation common stock ......... $100,839,906 $ --
PHH Corporation common stock ............. -- 73,604,551
Fidelity US Equity Index Portfolio ....... 22,986,867 15,566,475
Fidelity Magellan Fund ................... 26,038,455 20,966,923
Fidelity Retirement Money Market Portfolio 14,446,587 11,546,298
Prior to the Plan Merger, each participant had the following investment
options: (a) the common stock of Cendant Corporation, (b) an Equity-Income
Fund (Fidelity U.S. Equity Index Portfolio), consisting of
income-producing equity securities; (c) a Growth Fund (Fidelity Magellan
Fund), consisting of equity securities of corporations that are growth
companies; (d) a Money Market Fund (Fidelity Retirement Money Market
Portfolio) consisting of various short-term money market instruments; (e)
an Asset Allocation Fund (Fidelity Asset Manager) consisting of domestic
and foreign equity securities, bonds, and short-term instruments; (f) an
International Growth Fund (Fidelity Europe Fund), consisting of securities
of Western European issues; or (g) a Bond-Income Fund (Fidelity U.S. Bond
Index Portfolio) consisting of securities contained in the Aggregate Bond
Index.
5. INTERNAL REVENUE SERVICE STATUS
The Internal Revenue Service issued its latest determination letter on
January 23, 1995 which stated that the Plan and its underlying trust
qualify by design under the applicable provisions of the Internal Revenue
Code and therefore are exempt from federal income taxes. The Plan and its
underlying trust had been amended and restated since the date covered by
this letter. In the opinion of Plan management, the Plan and its
underlying trust have operated within the terms of the Plan and remained
qualified under the applicable provisions of the Internal Revenue Code.
6. RELATED PARTY TRANSACTIONS
A significant portion of the plan investments are shares in various mutual
funds managed by Fidelity Investments("Fidelity"). Fidelity is the
custodian of these investments as defined by the Plan and, therefore,
these transactions qualify as party-in interest. Fees paid by the Plan
for plan record keeping services amounted to $93,372 and $88,121 for the
years ended December 31, 1997 and 1996, respectively.
7. SUBSEQUENT EVENTS
On April 15, 1998, Cendant announced that it had discovered accounting
irregularities in certain former CUC business units, which are part of
Cendant's Alliance Marketing segment (formerly the Membership segment),
and the Audit Committee of Cendant's Board of Directors has initiated an
investigation into such matters. Accordingly, the Company will restate
annual and quarterly net income and earnings per share for 1997 and may
restate certain other previous periods related to the former CUC
businesses. The investigation is expected to be completed during the
summer of 1998.
Since the aforementioned announcement, and prior to the date thereof,
class action lawsuits, certain legal actions, and other legal complaints
have been filed against Cendant, its predecessor, CUC, and certain current
and former officers and directors of Cendant and CUC. These complaints
assert, among other things, claims under the federal securities law and
allege various breaches of fiduciary duty, mismanagement, and negligence.
While it is not feasible to predict or determine the final outcome of
these legal proceedings, the Company does not expect these legal
proceedings to have any material adverse impact on the Plan (see Note 1,
Business Combination and Plan Merger).
The aforementioned announcement resulted in a decline in the per-share
price of the Cendant Corporation common stock. At December 31, 1997, the
Plan's investment in Cendant Corporation common stock was valued at $100.8
million, comprised of approximately 2.9 million shares at a closing price
of $34.375. At June 30, 1998 (the date of the Independent Auditors'
Report), the closing price of the Cendant Corporation common stock
was $20.875 per share. At this price, the value of the Plan's
investment in Cendant Corporation common stock at December 31, 1997
would have been valued at $61.2 million.
<PAGE>
8. PLAN SUMMARY BY FUND
The following tables represent the changes in net assets available for
benefits, summarized by fund, for the years ended December 31, 1997 and
1996, and the statements of net assets available for benefits as of
December 31, 1997 and 1996.
<PAGE>
PHH CORPORATION EMPLOYEE INVESTMENT PLAN
ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS TO INVESTMENT PROGRAMS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Fidelity
PHH HFS Cendant US Equity
Corporation Incorporated Corporation Index
common stock common stock common stock Portfolio
---------------- ---------------- ---------------- -------------
<S> <C> <C> <C> <C>
Net asset available for benefits,
beginning of year $ 73,604,551 $ - $ - $15,566,475
---------------- ---------------- ---------------- -----------
Contributions:
Employee 590,229 1,412,603 93,989 1,597,371
Employer 1,027,799 618,343 51,615 472,893
---------------- ---------------- ---------------- ------------
Total contributions 1,618,028 2,030,946 145,604 2,070,264
Realized and unrealized
gains/(losses) 7,080,744 26,079,305 6,308,922 4,923,896
Dividend and interest income 325,020 17,500 - 495,212
Withdrawal and distributions (2,211,111) (9,046,038) - (3,386,047)
Plan expenses (348) (476) - (2,206)
Transfers:
Interfund transfers (1,346,575) (3,759,235) (6,931) 3,319,273
Conversion of Company
common stock (79,070,309) (15,322,002) 94,392,311 -
----------------- ----------------- ---------------- ------------
Net transfers (80,416,884) (19,081,237) 94,385,380 3,319,273
Increase/(decrease) in net assets
available for benefits (73,604,551) - 100,839,906 7,420,392
----------------- ---------------- ---------------- ------------
Net assets available for benefits,
end of year $ - $ - $ 100,839,906 $ 22,986,867
================ ================ ================ ============
</TABLE>
<PAGE>
PHH CORPORATION EMPLOYEE INVESTMENT PLAN
ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS TO INVESTMENT PROGRAMS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Fidelity
Retirement Fidelity
Fidelity Money Fidelity Fidelity US Bond
Magellan Market Asset Europe Index Participant
Fund Portfolio Manager Fund Portfolio Loans Total
------------ ------------ ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset available for
benefits beginning of year $ 20,966,923 $ 11,546,298 $ 2,511,787 $ 3,466,056 $ 862,406 $ 3,464,922 $ 131,989,418
------------ ------------ ----------- ----------- ----------- ----------- -------------
Contributions:
Employee 2,175,809 791,874 488,611 600,852 203,383 - 7,954,721
Employer 650,490 3,710,551 136,697 170,625 58,977 - 6,897,990
------------ ------------ ----------- ----------- ----------- ----------- -------------
Total contributions 2,826,299 4,502,425 625,308 771,477 262,360 - 14,852,711
------------ ------------ ----------- ----------- ----------- ----------- -------------
Realized and unrealized
gains/(losses) 3,615,398 - 293,739 490,309 24,676 - 48,816,989
Dividend and interest income 1,648,680 695,440 334,129 471,843 68,336 295,727 4,351,887
Withdrawal and distributions (2,824,050) (1,929,269) (360,658) (644,194) (90,492) (397,406) (20,889,265)
Plan expenses (1,362) (83,701) (979) (3,855) (445) - (93,372)
Transfers:
Interfund transfers (193,433) (284,606) 564,761 1,159,245 218,831 328,670 -
Conversion of Company
common stock - - - - - - -
----------- ------------ ----------- ----------- ----------- ----------- -------------
Net transfers (193,433) (284,606) 564,761 1,159,245 218,831 328,670 -
Increase/(decrease) in net assets
available for benefits 5,071,532 2,900,289 1,456,300 2,244,825 483,266 226,991 47,038,950
------------ ------------ ----------- ----------- ----------- ----------- ------------
Net assets available for benefits
end of year $ 26,038,455 $ 14,446,587 $ 3,968,087 $ 5,710,881 $ 1,345,672 $ 3,691,913 $ 179,028,368
============ ============ =========== =========== =========== =========== =============
</TABLE>
<PAGE>
PHH CORPORATION EMPLOYEE INVESTMENT PLAN
ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS TO INVESTMENT PROGRAMS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Fidelity
PHH Fidelity Retirement Fidelity
Corporation US Equity Fidelity Money Fidelity Fidelity US Bond
common Index Magellan Market Asset Europe Index Participant
stock Portfolio Fund Portfolio Manager Fund Portfolio Loans Total
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset available
for benefits,
beginning of year $41,363,751 $10,758,347 $20,356,814 $11,729,769 $2,018,667 $1,830,309 $ 597,756 $3,120,224 $ 91,775,637
----------- ----------- ----------- ----------- ---------- --------- ---------- ---------- ------------
Contributions:
Employee 1,411,844 1,334,555 2,640,505 884,811 470,219 481,461 207,799 - 7,431,194
Employer 3,148,904 - - 1,761,722 - - - - 4,910,626
----------- ----------- ----------- ----------- ---------- -------- ---------- ---------- ------------
Total contributions 4,560,748 1,334,555 2,640,505 2,646,533 470,219 481,461 207,799 - 12,341,820
Realized and unrealized
gains/(losses) 33,844,797 2,311,273 (1,025,401) - 74,027 349,866 (21,196) - 35,533,366
Dividend and interest
income 1,244,520 366,519 3,273,070 605,295 192,544 226,787 50,896 260,144 6,219,775
Withdrawal and
distributions (6,492,273) (1,335,050) (2,160,557) (2,927,415) (274,057) (254,614) (71,394) (277,699) 13,793,059
Plan expenses (454) (2,794) (1,890) (80,732) (1,129) (696) (426) - (88,121)
Interfund transfers (916,538) 2,133,625 (2,115,618) (427,152) 31,516 832,943 98,971 362,253 -
Conversion of Company
common stock - - - - - - - - -
---------- ----------- ----------- ----------- ---------- --------- ---------- ---------- -----------
Net transfers (916,538) 2,133,625 (2,115,618) (427,152) 31,516 832,943 98,971 362,253 -
Increase/(decrease) in
net assets available
for benefits 32,240,800 4,808,128 610,109 (183,471) 493,120 1,635,747 264,650 344,698 40,213,781
----------- ----------- ----------- ----------- ---------- ---------- ---------- ---------- ------------
Net assets available
for benefits, end
of year $73,604,551 $15,566,475 $20,966,923 $11,546,298 $2,511,787 $3,466,056 $ 862,406 $3,464,922 $131,989,418
=========== =========== =========== =========== ========== ========== ========== ========== ============
</TABLE>
<PAGE>
SUPPLEMENTAL SCHEDULES
<PAGE>
PHH CORPORATION EMPLOYEE INVESTMENT PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
Number of Current
Name of issuer and title of issue shares Cost value
- --------------------------------- ---------- ------------ ------------
<S> <C> <C>
*Cendant Corporation common stock ........................................ 2,933,525 $ 32,502,718 $100,839,906
*Fidelity US Equity Index Portfolio ...................................... 657,143 14,817,537 22,986,867
*Fidelity Magellan Fund .................................................. 273,312 21,281,462 26,038,455
*Fidelity Retirement Money Market Portfolio .............................. 14,446,587 14,446,587 14,446,587
*Fidelity Asset Manager .................................................. 216,245 3,612,085 3,968,087
*Fidelity Europe Fund .................................................... 190,744 4,954,107 5,710,881
*Fidelity US Bond Index Portfolio ........................................ 124,715 1,322,738 1,345,672
------------ ------------
92,937,234 175,336,455
Participant loans receivable
(at interest rates ranging from 7.0% to 10.0%) .......................... 3,691,913 3,691,913
------------ ------------
$ 96,629,147 $179,028,368
============ ============
</TABLE>
*Party in interest
<PAGE>
PHH CORPORATION EMPLOYEE INVESTMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Purchases Sales
-------------------------- -----------------------------------------------------------
Current Value Sales
Transaction Redemption Current Value
Purchase at or Selling Cost of at Transaction Net
Description of assets Price Date Price Asset Date Gain
- ------------------------------ ---------- ---------- ----------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
*HFS Incorporated common stock $4,419,926 $4,419,926 $15,177,229 $ 4,419,926 $15,177,229 $10,757,303
*PHH Corporation common stock 2,968,967 2,968,967 4,583,953 4,442,555 4,583,953 141,398
*Fidelity Magellan Fund 7,401,626 7,401,626 5,945,492 5,034,417 5,945,492 911,075
*Fidelity Retirement Money Market
Portfolio 9,200,539 9,200,539 6,300,250 6,300,250 6,300,250 -
*Fidelity US Equity Index Portfolio 7,567,850 7,567,850 5,071,354 3,725,376 5,071,354 1,345,978
</TABLE>
*Party in interest
Notes:
(1) Reportable transactions are presented in accordance with Department of
labor regulations relating to requirements for employee benefits plan
annual reports filed under the Employee Retirement Income Security Act of
1974.
<PAGE>
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan Committee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
Cendant Corporation
Employee Savings Plan
Date: July 7, 1998 BY: /s/ Scott E. Forbes
Scott E. Forbes
Plan Administrative Committee Member
PHH Corporation Employee Investment Plan
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-42549 of Cendant Corporation on Form S-8 of our report dated June 30, 1998
appearing in this Annual Report on Form 11-K of PHH Corporation Employee
Investment Plan, for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
Washington, D.C.
June 30, 1998
Exhibit 23.2
The Board of Directors
PHH Corporation
We consent to the incorporation by reference in the Registration Statement of
Cendant Corporation on Form S-8 (No. 333-42549) of our report dated April 29,
1997, relating to the statement of net assets available for plan benefits of PHH
Corporation Employee Investment Plan as of December 31, 1996 and the related
statement of changes in net assets available for plan benefits for the year then
ended, which report appears in the Form 11-K of PHH Corporation, incorporated by
reference in the Registration Statement.
/s/ KPMG Peat Marwick LLP
Baltimore, Maryland
July 2, 1998
