SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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April 17, 1998 (April 9, 1998)
(Date of Report (date of earliest event reported))
Cendant Corporation
(Exact name of Registrant as specified in its charter)
Delaware 1-10308 06-0918165
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation or organization) Identification Number)
6 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive office) (Zip Code)
(973) 428-9700
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if applicable)
Item 5. Other
Restatement of Earnings. On April 15, 1998, Cendant Corporation (the "Company")
announced that in the course of transferring responsibility for the Company's
accounting functions from former CUC International Inc. personnel to former HFS
Incorporated accounting personnel and preparing for the reporting of first
quarter 1998 results, it has discovered potential accounting irregularities in
certain former CUC business units which are part of the Company's Alliance
Marketing division (formerly the Membership segment). Accordingly, the Company
expects to 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.
Based on presently available information, the effect on 1997 results is expected
to be a reduction to net income prior to restructuring and unusual charges of
approximately $100 to $115 million and earnings per share by about 11 to 13
cents, respectively. In 1997, the Company had previously reported net income
prior to restructuring and unusual charges of $872 million and earnings per
share of $1.00.
The potential accounting irregularities are limited to certain former CUC
businesses, which accounted for less than one third of the Company's net income
in 1997. All of the Company's current businesses continue to perform strongly
and the Company's anticipated percentage growth of earnings per share in 1998
over restated 1997 appear achievable. The Company expects to meet or exceed the
currently forecasted Wall Street consensus estimate of 25 cents per share for
the quarter of 1998. However, since 1997 earnings per share will be reduced by
about 11 to 13 cents, the Company anticipates that 1998 full-year earnings
expectations will be reduced from current levels by approximately the same
amount.
Resignations. On April 9, 1998, the Company announced that Kirk Shelton, one of
six vice chairmen of the Company, Amy N. Lipton, executive vice president and
deputy general counsel and Cosmo Corigliano, executive vice president, will
resign from the Company to pursue other interests.
Termination of Executive. On April 17, 1998, the Company terminated the
employment of Cosmo Corigliano, executive vice president of the Company.
The Company further announced that John Fullmer, Cendant's executive vice
president and chief marketing officer, Tony Menchaca, president of the Company's
Comp-U-Card Division, have been named co-chairman and co-chief executives of the
Company's newly named Alliance Marketing Division and will succeed Mr. Shelton.
In addition, John W. Chidsey, currently executive vice president of business
development, has been named president and chief operating officer of this
division. These changes have been initiated and jointly endorsed by Walter A.
Forbes, Chairman and Henry R. Silverman, President and CEO to ensure the stable
management base which is currently functioning well.
The information set forth in the press releases attached hereto as Exhibits
99.1, 99.2 and 99.3 are incorporated herein by reference in their entirety.
Item 7. Exhibits
Exhibit
No. Description
99.1 Press Release: Cendant Confirms Report that Shelton, Lipton and
Corigliano to Resign, dated April 9, 1998.
99.2 Press Release: Cendant Corporation to Restate Earnings, dated April
15, 1998.
99.3 Press Release: Cendant Terminated Executive, dated April 17, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENDANT CORPORATION
By: /s/ James E. Buckman
James E. Buckman
Senior Executive Vice President
and General Counsel
Date: April 17, 1998
CENDANT CORPORATION
CURRENT REPORT ON FORM 8-K
Report Dated April 17, 1998 (April 9, 1998)
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release: Cendant Confirms Report that Shelton, Lipton
and Corigliano to Resign, dated April 9, 1998.
99.2 Press Release: Cendant Corporation to Restate Earnings, dated
April 15, 1998.
99.3 Press Release: Cendant Terminated Executive, dated April 17,
1998.