Exhibit 12
Cendant Corporation and Subsidiaries
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)
In connection with the Company's discovery and announcement of accounting
irregularities, previously reported information for periods prior to December
31, 1994 should not be relied upon. Accordingly, the computation of Ratio of
Earnings to Fixed Charges is presented for years subsequent to and including
December 31, 1995.
Year Ended December 31,
------------------------------------------------
1998 1997 1996 1995
--------- --------- --------- ---------
Income from continuing operations before
income taxes, minority interest, extraordinary gain
and cumulative effect of accounting change $ 291.7 $ 229.2 $ 518.6 $ 312.9
Plus: Fixed charges 674.5 407.3 323.6 289.4
Less: Equity income (loss) in unconsolidated affiliates 13.5 51.3 - -
Capitalized interest - - 0.6 -
Minority interest in mandatorily preferred
securities 80.4 - - -
--------- --------- --------- ---------
Earnings available to cover fixed charges $ 872.3 $ 585.2 $ 841.6 $ 602.3
========= ========= ========= =========
Fixed charges (1):
Interest, including amortization of deferred
financing costs $ 509.0 $ 379.0 $ 299.9 $ 270.4
Capitalized interest - - 0.6 -
Other charges, financing costs 27.9 - - -
Minority interest in mandatorily preferred securities 80.4 - - -
Interest portion of rental payment 57.2 28.3 23.1 19.0
--------- --------- --------- ---------
Total fixed charges $ 674.5 $ 407.3 $ 323.6 $ 289.4
========= ========= ========= =========
Ratio of earnings to fixed charges (2) 1.29x 1.44x 2.60x 2.08x
========= ========= ========= =========
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(1) Fixed charges consist of interest expense on all indebtedness (including
amortization of deferred financing costs) and the portion of operating
lease rental expense that is representative of the interest factor
(deemed to be one-third of operating lease rentals).
(2) For the years ended December 31, 1998, 1997, 1996 and 1995, income from
continuing operations before income taxes, minority interest,
extraordinary gain and cumulative effect of accounting change includes
non-recurring other charges of $810.4 million (exclusive of financing
costs of $27.9 million), $704.1 million, $109.4 million and $97.0
million, respectively. Excluding such charges, the ratio of earnings to
fixed charges for the years ended December 31, 1998, 1997, 1996 and 1995
is 2.49x, 3.17x, 2.94x and 2.42x, respectively.