Exhibit 99.3
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following Unaudited Pro Forma Condensed Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003 and the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended September 30, 2004 and for the years ended December 31, 2003, 2002 and 2001 have been derived from our historical financial statements and adjusted to give effect to the following, all of which were consummated in connection with the distribution of PHH Corporation common stock to Cendant stockholders by Cendant on January 31, 2005:
Ÿ the equity contribution from us to PHH of $100 million in cash and our assumption of $55 million of pension-related liabilities for which PHH was previously responsible; and
Ÿ the subsequent distribution of our mortgage, fleet leasing and appraisal business as PHH Corporation to our common stockholders.
The Unaudited Pro Forma Condensed Consolidated Balance Sheets assume that the above-mentioned transactions occurred on the date of such balance sheet and the Unaudited Pro Forma Condensed Consolidated Statements of Operations assume that the above-mentioned transactions occurred on January 1 of each period presented.
Management believes that the assumptions used to derive the Unaudited Pro Forma Condensed Consolidated Financial Statements are reasonable under the circumstances and given the information available. The Unaudited Pro Forma Condensed Consolidated Financial Statements have been provided for information purposes and are not necessarily indicative of the future financial condition or results of future operations or the actual financial condition or results that would have been achieved had the transactions occurred on the dates indicated. These Unaudited Pro Forma Condensed Consolidated Financial Statements (together with the footnotes thereto) should be read in conjunction with our historical consolidated financial statements and accompanying notes thereto, which can be found in our quarterly report on Form 10-Q for the period ended September 30, 2004 filed with the Securities and Exchange Commission on November 2, 2004, our current report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2004 and our annual report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission on March 1, 2004.
The Unaudited Pro Forma Condensed Consolidated Statements of Operations do not reflect material non-recurring charges which will impact net income within the 12 months following the transaction, including: (i) any non-cash impairment charge that we may be required to record to reflect any difference between PHH’s carrying value and PHH’s market value, which, based upon currently available information, we estimate will be in the range of $535 million to $590 million after tax ($0.50 to $0.55 per diluted share); (ii) any tax provision associated with separating the appraisal business from us upon spin-off, which we currently estimate to be approximately $24 million ($0.02 per diluted share) and (iii) any transaction costs, which we currently estimate to be approximately $15 million ($0.01 per diluted share).
CENDANT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2004
(in millions)
Historical | Spin-off of | Equity | Pro Forma | Pro Forma | ||||||||||||||||||
As Reported | PHH Corporation (a) | Contribution (b) | Adjustments | Cendant | ||||||||||||||||||
Assets | ||||||||||||||||||||||
Cash and cash equivalents | $ | 1,633 | $ | (243 | ) | $ | (100 | ) | $ | 3 | (c) | $ | 1,293 | |||||||||
Restricted cash | 364 | (231 | ) | — | — | 133 | ||||||||||||||||
Receivables, net | 1,544 | (329 | ) | — | — | 1,215 | ||||||||||||||||
Deferred income taxes | 502 | (51 | ) | — | (14 | ) | (d) | 437 | ||||||||||||||
Other current assets | 812 | (41 | ) | — | — | 771 | ||||||||||||||||
Total current assets | 4,855 | (895 | ) | (100 | ) | (11 | ) | 3,849 | ||||||||||||||
Property and equipment, net | 1,749 | (101 | ) | — | — | 1,648 | ||||||||||||||||
Deferred income taxes | 1,848 | 20 | — | — | 1,868 | |||||||||||||||||
Goodwill | 10,981 | (504 | ) | — | 208 | (e) | 10,685 | |||||||||||||||
Other intangibles, net | 2,494 | (58 | ) | — | — | 2,436 | ||||||||||||||||
Other non-current assets | 830 | (223 | ) | — | 29 | (f) | 636 | |||||||||||||||
Total assets exclusive of assets under programs | 22,757 | (1,761 | ) | (100 | ) | 226 | 21,122 | |||||||||||||||
Assets under management and mortgage programs: | ||||||||||||||||||||||
Program cash | 457 | (309 | ) | — | — | 148 | ||||||||||||||||
Mortgage loans held for sale | 2,150 | (2,150 | ) | — | — | — | ||||||||||||||||
Relocation receivables | 761 | — | — | — | 761 | |||||||||||||||||
Vehicle-related, net | 11,242 | (3,684 | ) | — | — | 7,558 | ||||||||||||||||
Timeshare-related, net | 2,306 | — | — | — | 2,306 | |||||||||||||||||
Mortgage servicing rights, net | 1,653 | (1,653 | ) | — | — | — | ||||||||||||||||
Other | 283 | (151 | ) | — | — | 132 | ||||||||||||||||
18,852 | (7,947 | ) | — | — | 10,905 | |||||||||||||||||
Total assets | $ | 41,609 | $ | (9,708 | ) | $ | (100 | ) | $ | 226 | $ | 32,027 | ||||||||||
Liabilities and stockholders’ equity | ||||||||||||||||||||||
Accounts payable and other current liabilities | $ | 4,429 | $ | (73 | ) | $ | — | $ | (16 | ) | (g) | $ | 4,340 | |||||||||
Current portion of long-term debt | 864 | (3 | ) | — | — | 861 | ||||||||||||||||
Deferred income | 809 | (1 | ) | — | — | 808 | ||||||||||||||||
Total current liabilities | 6,102 | (77 | ) | — | (16 | ) | 6,009 | |||||||||||||||
Long-term debt | 3,601 | (5 | ) | — | — | 3,596 | ||||||||||||||||
Deferred income | 316 | (6 | ) | — | — | 310 | ||||||||||||||||
Other non-current liabilities | 830 | (78 | ) | 55 | — | 807 | ||||||||||||||||
Total liabilities exclusive of liabilities under programs | 10,849 | (166 | ) | 55 | (16 | ) | 10,722 | |||||||||||||||
Liabilities under management and mortgage programs: | ||||||||||||||||||||||
Debt | 15,570 | (6,706 | ) | — | — | 8,864 | ||||||||||||||||
Deferred income taxes | 2,712 | (943 | ) | — | — | 1,769 | ||||||||||||||||
Other | 67 | (67 | ) | — | — | — | ||||||||||||||||
18,349 | (7,716 | ) | — | — | 10,633 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||
Stockholders’ equity | 12,411 | (1,826 | ) | (155 | ) | 242 | (h) | 10,672 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 41,609 | $ | (9,708 | ) | $ | (100 | ) | $ | 226 | $ | 32,027 | ||||||||||
CENDANT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2003
(in millions)
Historical | Spin-off of | Equity | Pro Forma | Pro Forma | ||||||||||||||||||
As Reported | PHH Corporation (a) | Contribution (b) | Adjustments | Cendant | ||||||||||||||||||
Assets | ||||||||||||||||||||||
Cash and cash equivalents | $ | 839 | $ | (58 | ) | $ | (100 | ) | $ | (10 | ) | (c) | $ | 671 | ||||||||
Restricted cash | 448 | (214 | ) | — | — | 234 | ||||||||||||||||
Receivables, net | 1,665 | (369 | ) | — | — | 1,296 | ||||||||||||||||
Deferred income taxes | 454 | (48 | ) | — | (86 | ) | (d) | 320 | ||||||||||||||
Assets of discontinued operations | 556 | — | — | — | 556 | |||||||||||||||||
Other current assets | 1,060 | (56 | ) | — | — | 1,004 | ||||||||||||||||
Total current assets | 5,022 | (745 | ) | (100 | ) | (96 | ) | 4,081 | ||||||||||||||
Property and equipment, net | 1,763 | (104 | ) | — | — | 1,659 | ||||||||||||||||
Deferred income taxes | 1,040 | 12 | — | — | 1,052 | |||||||||||||||||
Goodwill | 10,716 | (481 | ) | — | 200 | (e) | 10,435 | |||||||||||||||
Other intangible assets | 2,311 | (52 | ) | — | — | 2,259 | ||||||||||||||||
Other non-current assets | 965 | (256 | ) | — | 29 | (f) | 738 | |||||||||||||||
Total assets exclusive of assets under programs | 21,817 | (1,626 | ) | (100 | ) | 133 | 20,224 | |||||||||||||||
Assets under management and mortgage programs: | ||||||||||||||||||||||
Program cash | 542 | (441 | ) | — | — | 101 | ||||||||||||||||
Mortgage loans held for sale | 2,508 | (2,508 | ) | — | — | — | ||||||||||||||||
Relocation receivables | 534 | — | — | — | 534 | |||||||||||||||||
Vehicle-related, net | 10,143 | (3,405 | ) | — | — | 6,738 | ||||||||||||||||
Timeshare-related, net | 1,803 | — | — | — | 1,803 | |||||||||||||||||
Mortgage servicing rights, net | 1,641 | (1,641 | ) | — | — | — | ||||||||||||||||
Other | 468 | (465 | ) | — | — | 3 | ||||||||||||||||
17,639 | (8,460 | ) | — | — | 9,179 | |||||||||||||||||
Total assets | $ | 39,456 | $ | (10,086 | ) | $ | (100 | ) | $ | 133 | $ | 29,403 | ||||||||||
Liabilities and stockholders’ equity | ||||||||||||||||||||||
Accounts payable and other current liabilities | $ | 4,668 | $ | (112 | ) | $ | — | $ | (75 | ) | (g) | $ | 4,481 | |||||||||
Current portion of long-term debt | 1,629 | (1 | ) | — | — | 1,628 | ||||||||||||||||
Liabilities of discontinued operations | 61 | — | — | — | 61 | |||||||||||||||||
Deferred income | 854 | (1 | ) | — | — | 853 | ||||||||||||||||
Total liabilities exclusive of liabilities under programs | 7,212 | (114 | ) | — | (75 | ) | 7,023 | |||||||||||||||
Long-term debt | 4,373 | (1 | ) | — | — | 4,372 | ||||||||||||||||
Deferred income | 311 | (2 | ) | — | — | 309 | ||||||||||||||||
Other non-current liabilities | 883 | (84 | ) | 55 | — | 854 | ||||||||||||||||
Total liabilities exclusive of liabilities under programs | 12,779 | (201 | ) | 55 | (75 | ) | 12,558 | |||||||||||||||
Liabilities under management and mortgage programs: | ||||||||||||||||||||||
Debt | 14,785 | (6,868 | ) | — | — | 7,917 | ||||||||||||||||
Deferred income taxes | 1,429 | (943 | ) | — | — | 486 | ||||||||||||||||
Other | 277 | (277 | ) | — | — | — | ||||||||||||||||
16,491 | (8,088 | ) | — | — | 8,403 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||
Stockholders’ equity | 10,186 | (1,797 | ) | (155 | ) | 208 | (i) | 8,442 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 39,456 | $ | (10,086 | ) | $ | (100 | ) | $ | 133 | $ | 29,403 | ||||||||||
CENDANT CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2004 AND DECEMBER 31, 2003
(Dollars in millions)
(a) | Represents the assets, liabilities and equity of our mortgage, fleet and appraisal businesses, which have been distributed to our shareholders. The fuel card and relocation operations of PHH were distributed to Cendant prior to the spin-off. | |
(b) | Represents our equity contribution to PHH, comprising (i) a cash contribution of $100 million from us and (ii) our assumption of $55 million of PHH’s pension-related liabilities. Cendant’s contribution of its appraisal business to PHH is reflected in the column entitled “Spin-off of PHH Corporation(a).” | |
(c) | Represents a cash inflow relating to the settlement of intercompany liabilities due from PHH ($32 million and $19 million at September 30, 2004 and December 31, 2003, respectively), offset by a cash outflow relating to our purchase of a 49.9% ownership interest in the mortgage venture to be established with PHH ($29 million at September 30, 2004 and December 31, 2003). | |
(d) | Represents an adjustment to reflect an estimate of the tax benefit of net operating losses we expect to allocate to PHH at the time of spin-off. | |
(e) | Represents the reallocation of goodwill from PHH relating to the separation of entities that will not be included within the PHH ownership structure following the spin-off ($208 million and $200 million as of September 30, 2004 and December 31, 2003, respectively). | |
(f) | Represents an estimate of our 49.9% ownership interest in the mortgage venture. | |
(g) | Represents an adjustment to reflect the forgiveness of an estimated intercompany tax payable to PHH as of the date of the spin-off ($48 million and $94 million at September 30, 2004 and December 31, 2003, respectively), after giving effect to the current estimate of $24 million of taxes associated with separating the appraisal business from us; partially offset by the cash settlement of intercompany liabilities from PHH ($32 million and $19 million at September 30, 2004 and December 31, 2003, respectively). | |
(h) | Represents (i) the reallocation of $208 million of goodwill and (ii) the $48 million forgiveness of the intercompany tax payable; partially offset by the $14 million tax benefit adjustment. | |
(i) | Represents (i) the reallocation of $200 million of goodwill and (ii) the $94 million forgiveness of the intercompany tax payable; partially offset by the $86 million tax benefit adjustment. |
CENDANT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
(in millions, except per share data)
Historical | Spin-off of | Pro Forma | Pro Forma | |||||||||||||||
As Reported | PHH Corporation (a) | Adjustments | Cendant | |||||||||||||||
Revenues | ||||||||||||||||||
Net revenues | $ | 14,881 | $ | (1,753 | ) | $ | 10 | (b) | $ | 13,138 | ||||||||
Expenses | ||||||||||||||||||
Operating | 7,717 | (516 | ) | — | 7,201 | |||||||||||||
Vehicle depreciation, lease charges and interest, net | 1,882 | (947 | ) | — | 935 | |||||||||||||
Marketing and reservation | 1,514 | (5 | ) | — | 1,509 | |||||||||||||
General and administrative | 1,122 | (145 | ) | 23 | (c) | 1,000 | ||||||||||||
Non-program related depreciation and amortization | 395 | (34 | ) | — | 361 | |||||||||||||
Non-program related interest, net | 202 | — | — | 202 | ||||||||||||||
Acquisition and integration related costs: | ||||||||||||||||||
Amortization of pendings and listings | 13 | — | — | 13 | ||||||||||||||
Other | (3 | ) | — | — | (3 | ) | ||||||||||||
Total expenses | 12,842 | (1,647 | ) | 23 | 11,218 | |||||||||||||
Income before income taxes and minority interest | 2,039 | (106 | ) | (13 | ) | 1,920 | ||||||||||||
Provision for income taxes | 570 | (41 | ) | (4 | ) | (d) | 525 | |||||||||||
Minority interest, net of tax | 6 | — | — | 6 | ||||||||||||||
Income from continuing operations | $ | 1,463 | $ | (65 | ) | $ | (9 | ) | $ | 1,389 | ||||||||
Weighted average shares outstanding (e) | ||||||||||||||||||
Basic | 1,024 | 1,024 | ||||||||||||||||
Diluted | 1,059 | 1,059 | ||||||||||||||||
Earnings per share (e) | ||||||||||||||||||
Basic | $ | 1.43 | $ | 1.36 | ||||||||||||||
Diluted | $ | 1.38 | $ | 1.31 |
CENDANT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2003
(in millions, except per share data)
Historical | Spin-off of | Pro Forma | Pro Forma | |||||||||||||||
As Reported | PHH Corporation (a) | Adjustments | Cendant | |||||||||||||||
Revenues | ||||||||||||||||||
Net revenues | $ | 18,015 | $ | (2,505 | ) | $ | 76 | (b) | $ | 15,586 | ||||||||
Expenses | ||||||||||||||||||
Operating | 9,341 | (730 | ) | — | 8,611 | |||||||||||||
Vehicle depreciation, lease charges and interest, net | 2,487 | (1,176 | ) | — | 1,311 | |||||||||||||
Marketing and reservation | 1,732 | (8 | ) | — | 1,724 | |||||||||||||
General and administrative | 1,352 | (221 | ) | 32 | (c) | 1,163 | ||||||||||||
Non-program related depreciation and amortization | 507 | (38 | ) | — | 469 | |||||||||||||
Non-program related interest, net | 364 | — | — | 364 | ||||||||||||||
Acquisition and integration related costs: | ||||||||||||||||||
Amortization of pendings and listings | 20 | — | — | 20 | ||||||||||||||
Other | 34 | — | — | 34 | ||||||||||||||
Litigation and related charges, net | 11 | — | — | 11 | ||||||||||||||
Restructuring and other unusual charges | (6 | ) | — | — | (6 | ) | ||||||||||||
Total expenses | 15,842 | (2,173 | ) | 32 | 13,701 | |||||||||||||
Income before income taxes and minority interest | 2,173 | (332 | ) | 44 | 1,885 | |||||||||||||
Provision for income taxes | 722 | (131 | ) | 14 | (d) | 605 | ||||||||||||
Minority interest, net of tax | 21 | — | — | 21 | ||||||||||||||
Income from continuing operations | $ | 1,430 | $ | (201 | ) | $ | 30 | $ | 1,259 | |||||||||
Weighted average shares outstanding (e) | ||||||||||||||||||
Basic | 1,017 | 1,017 | ||||||||||||||||
Diluted | 1,040 | 1,040 | ||||||||||||||||
Earnings per share (e) | ||||||||||||||||||
Basic | $ | 1.41 | $ | 1.24 | ||||||||||||||
Diluted | $ | 1.38 | $ | 1.21 |
CENDANT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2002
(in millions, except per share data)
Historical | Spin-off of | Pro Forma | Pro Forma | |||||||||||||||
As Reported | PHH Corporation (a) | Adjustments | Cendant | |||||||||||||||
Revenues | ||||||||||||||||||
Net revenues | $ | 14,025 | $ | (1,904 | ) | $ | 54 | (b) | $ | 12,175 | ||||||||
Expenses | ||||||||||||||||||
Operating | 6,765 | (495 | ) | — | 6,270 | |||||||||||||
Vehicle depreciation, lease charges and interest, net | 2,094 | (1,173 | ) | — | 921 | |||||||||||||
Marketing and reservation | 1,374 | (7 | ) | — | 1,367 | |||||||||||||
General and administrative | 1,112 | (183 | ) | 24 | (c) | 953 | ||||||||||||
Non-program related depreciation and amortization | 455 | (32 | ) | — | 423 | |||||||||||||
Non-program related interest, net | 304 | — | — | 304 | ||||||||||||||
Acquisition and integration related costs: | ||||||||||||||||||
Amortization of pendings and listings | 256 | — | — | 256 | ||||||||||||||
Other | 29 | — | — | 29 | ||||||||||||||
Litigation and related charges, net | 103 | — | — | 103 | ||||||||||||||
Restructuring and other unusual charges | (14 | ) | — | — | (14 | ) | ||||||||||||
Total expenses | 12,478 | (1,890 | ) | 24 | 10,612 | |||||||||||||
Income before income taxes and minority interest | 1,547 | (14 | ) | 30 | 1,563 | |||||||||||||
Provision for income taxes | 516 | (7 | ) | 11 | (d) | 520 | ||||||||||||
Minority interest, net of tax | 22 | (1 | ) | — | 21 | |||||||||||||
Income from continuing operations | $ | 1,009 | $ | (6 | ) | $ | 19 | $ | 1,022 | |||||||||
Weighted average shares outstanding (e) | ||||||||||||||||||
Basic | 1,019 | 1,019 | ||||||||||||||||
Diluted | 1,043 | 1,043 | ||||||||||||||||
Earnings per share (e) | ||||||||||||||||||
Basic | $ | 0.99 | $ | 1.00 | ||||||||||||||
Diluted | $ | 0.97 | $ | 0.98 |
CENDANT CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2001
(in millions, except per share data)
Historical | Spin-off of | Pro Forma | Pro Forma | |||||||||||||||
As Reported | PHH Corporation (a) | Adjustments | Cendant | |||||||||||||||
Revenues | ||||||||||||||||||
Net revenues | $ | 8,612 | $ | (2,014 | ) | $ | 55 | (b) | $ | 6,653 | ||||||||
Expenses | ||||||||||||||||||
Operating | 2,718 | (362 | ) | — | 2,356 | |||||||||||||
Vehicle depreciation, lease charges and interest, net | 1,789 | (1,020 | ) | — | 769 | |||||||||||||
Marketing and reservation | 1,100 | (7 | ) | — | 1,093 | |||||||||||||
General and administrative | 957 | (174 | ) | 16 | (c) | 799 | ||||||||||||
Non-program related depreciation and amortization | 462 | (44 | ) | — | 418 | |||||||||||||
Non-program related interest, net | 254 | — | — | 254 | ||||||||||||||
Acquisition and integration related costs: | ||||||||||||||||||
Amortization of pendings and listings | — | — | — | — | ||||||||||||||
Other | 112 | — | — | 112 | ||||||||||||||
Litigation and related charges, net | 86 | — | — | 86 | ||||||||||||||
Restructuring and other unusual charges | 378 | — | — | 378 | ||||||||||||||
Mortgage servicing rights impairment | 94 | (94 | ) | — | — | |||||||||||||
Total expenses | 7,950 | (1,701 | ) | 16 | 6,265 | |||||||||||||
Net losses relating to impairments of investments and dispositions of businesses | (24 | ) | — | — | (24 | ) | ||||||||||||
Income before income taxes, minority interest and equity in Homestore | 638 | (313 | ) | 39 | 364 | |||||||||||||
Provision for income taxes | 207 | (128 | ) | 14 | (d) | 93 | ||||||||||||
Minority interest, net of tax | 24 | — | — | 24 | ||||||||||||||
Losses related to equity in Homestore, net of tax | 77 | — | — | 77 | ||||||||||||||
Income from continuing operations | $ | 330 | $ | (185 | ) | $ | 25 | $ | 170 | |||||||||
Weighted average shares outstanding(e) | ||||||||||||||||||
Basic | 869 | 869 | ||||||||||||||||
Diluted | 917 | 917 | ||||||||||||||||
Earnings per share(e) | ||||||||||||||||||
Basic | $ | 0.36 | $ | 0.18 | ||||||||||||||
Diluted | $ | 0.35 | $ | 0.17 |
CENDANT CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
(a) | Represents the results of operations of our mortgage, fleet and appraisal businesses, which have been distributed to our shareholders. The fuel card and relocation operations of PHH were distributed to Cendant prior to the spin-off. | |
(b) | Represents (i) our portion of the mortgage venture’s earnings based upon our 49.9% ownership interest ($15 million and $84 million for the nine months ended September 30, 2004 and the year ended December 31, 2003, respectively, and $63 million for both the years ended December 31, 2002 and 2001) and (ii) income associated with marketing services and license agreements executed with PHH ($3 million for the nine months ended September 30, 2004 and $4 million for each of the years ended December 31, 2003, 2002 and 2001); partially offset by the elimination of interest expense allocations to PHH ($8 million, $12 million, $13 million and $12 million for the nine months ended September 30, 2004 and the years ended December 31, 2003, 2002 and 2001, respectively). | |
(c) | Represents (i) the elimination of general corporate overhead allocations to PHH ($20 million $28 million, $25 million and $19 million for the nine months ended September 30, 2004 and the years ended December 31, 2003, 2002 and 2001, respectively) and (ii) the assumption by us of a portion of PHH’s pension plan and the related expense (income) ($3 million, $4 million, $(1) million and $(3) million for the nine months ended September 30, 2004 and the years ended December 31, 2003, 2002 and 2001, respectively). | |
(d) | Represents the tax effects of (b) and (c) above. | |
(e) | Earnings per share and weighted average shares outstanding do not reflect any adjustments required to be made to existing Cendant common stock options and restricted stock units in connection with the spin-off of PHH. We estimate that an incremental six million common stock options and one million restricted stock units will be issued to Cendant employees as an equitable adjustment to existing equity awards. |