EXHIBIT 99.2
PRO FORMA FINANCIAL INFORMATION
The following Unaudited Pro Forma Condensed Combined Balance Sheet
as of September 30, 2000 and the Unaudited Pro Forma Condensed
Combined Statements of Operations for the year ended December 31,
1999 and for the nine months ended September 30, 2000 give effect
to the planned acquisition of Avis Group Holdings, Inc. (Avis)
(the Acquisition) to be accounted for under the purchase method of
accounting. The Unaudited Pro Forma Condensed Combined Financial
Statements are based on the historical Consolidated Financial
Statements of Cendant Corporation (Cendant) and Avis under the
assumptions and adjustments set forth in the accompanying Notes to
the Unaudited Pro Forma Condensed Combined Financial Statements.
The Unaudited Pro Forma Condensed Combined Balance Sheet assumes
that the Acquisition was consummated on September 30, 2000 and the
Unaudited Pro Forma Condensed Combined Statements of Operations
assumes the Acquisition was consummated on January 1, 1999. Pro
forma adjustments to Cendant's historical results of operations
for the year ended December 31, 1999 have been included to reflect
its October 2000 plan to spin-off its individual membership
business as it has not yet been reflected in Cendant's historical
financial statements. This spin-off has been treated as a
discontinued operation in accordance with generally accepted
accounting principles. Avis currently pays Cendant for services
Cendant provides related to call centers and information
technology and for the use of Cendant trademarks. All intercompany
transactions have been eliminated on a pro forma basis.
Cendant currently retains an equity investment from its 18%
ownership in Avis common stock (5.5 million shares) and we also
own over 99% ($383 million) of the preferred stock of Avis. In
addition, Cendant has recorded a deferred gain liability,
proportionate to our common ownership percentage of Avis, relating
to a sale of our PHH Fleet business to Avis on June 30, 1999.
Accordingly, the historical statement of operations for the year
ended December 31, 1999 includes the results of operations for
the PHH Fleet business as follows: January 1, 1999-June 30, 1999
is reflected as part of Cendant historical and July 1,
1999-December 31, 1999 as part of Avis Historical. In
August, 2000, Avis contributed its European vehicle management
and leasing business (PHH Europe) to a newly formed a joint
venture in exchange for cash, settlement of intercompany
debt and a 20% interest in the venture (the PHH Europe
Transaction). The accompanying Unaudited Pro Forma Condensed
Combined Statement of Operations for the year ended December 31,
1999 for Avis and Cendant have been adjusted to reflect the PHH
Europe Transaction assuming it occurred (including accounting for
the retained interest as an equity investment) at July 1, 1999 for
Avis and January 1, 1999 for Cendant. The accompanying Avis
statement of operations for the nine months ended September 30,
2000 has also been adjusted to reflect the PHH Europe Transaction.
The Pro Forma adjustments are based on the Agreement and Plan of
Merger which provides for Avis stockholders to receive $33 in cash
for each share of Avis common stock. Cendant, through its
wholly-owned subsidiary PHH Corporation (PHH), will make payments
totaling $967 million, including payments to Avis shareholders
($937 million), inclusive of the net cash obligation related to
Avis stock options expected to be cancelled prior to the
consummation, and estimated expenses of the transaction
($30 million). The Pro Forma Condensed Combined Financial
Statements reflect $690 million of the purchase price will be
financed from new borrowings available to Cendant through
its wholly-owned subsidiary, PHH, and $277 million will be
provided from Cendant's available cash. The actual funding for the
Acquisition and the corresponding interest rate for the debt will
be determined subsequent to the filing of this Form 8-K but before
the expected closing date of the proposed acquisition. In
addition, actual funding could include proceeds from the potential
issuance of Cendant's CD common stock. The amount of borrowings
and the related interest rates will be determined based upon the
then market conditions and may differ from the amounts reflected
in the accompanying pro forma financial statements. In addition,
Cendant will assume approximately $7.3 billion of net debt of Avis
($6.7 billion of which relates to vehicle financing).
For purposes of developing the Unaudited Pro Forma Condensed
Combined Balance Sheet, Avis' assets and liabilities have been
recorded at their estimated fair market values and the excess
purchase price has been assigned to goodwill. These fair market
values are based on preliminary estimates. Cendant has not
performed appraisals, evaluations or other studies of the fair
value of Avis' assets and liabilities. Accordingly, the pro forma
adjustments may be subject to revision once the appraisals,
evaluations and other studies of the fair value of Avis' assets
and liabilities are complete. Subsequent to the Acquisition,
Cendant intends to implement a plan to realign and reorganize
certain ARAC operations. The costs of implementing the plan, which
may be substantial, have not been reflected in the accompanying
pro forma financial statements. The impact of this realignment
could increase or decrease the amount of goodwill and intangible
assets, net, and related amortization of goodwill in the
accompanying pro forma financial statements. The Unaudited Pro
Forma Condensed Combined Statements of Operations exclude any
benefits that may result from the Acquisition due to synergies
that may be derived or from the elimination of duplicate efforts.
Management believes that the assumptions used provide a reasonable
basis on which to present the unaudited pro forma condensed
combined results. Cendant has completed or announced other
acquisitions and dispositions which are not significant and
accordingly have not been included in the accompanying pro forma
financial statements. The Unaudited Pro Forma Condensed Combined
Financial Statements may not be indicative of the results that
would have occurred if the Acquisition had been in effect on the
dates indicated or which may be obtained in the future. The
Unaudited Pro Forma Condensed Combined Financial Statements should
be read in conjunction with the historical Consolidated Financial
Statements and accompanying notes for Cendant and Avis.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 30, 2000
(IN MILLIONS)
HISTORICAL PRO FORMA PRO FORMA
CENDANT AVIS ADJUSTMENTS COMBINED
-------- -------- ----------- ----------
ASSETS
Current Assets
Cash and cash equivalents $ 1,215 $ 106 $ (277)(a) $ 1,044
Deferred income taxes 1,293 -- 36 (b) 1,329
Receivables and other current assets 1,397 1,179 (33)(f) 2,543
-------- -------- -------- --------
Total current assets 3,905 1,285 (274) 4,916
Vehicles, net-rental -- 4,010 -- 4,010
Property and equipment, net 1,242 188 -- 1,430
Goodwill, net 3,000 1,299 201(c) 4,500
Other assets 3,421 475 (514)(c) 3,382
-------- -------- -------- --------
Total assets exclusive of assets under programs 11,568 7,257 (587) 18,238
Assets under management and mortgage programs 3,018 3,014 -- 6,032
-------- -------- -------- --------
TOTAL ASSETS $ 14,586 $ 10,271 $ (587) $ 24,270
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and other current liabilities $ 1,532 $ 1,365 $ (33)(f) $ 2,864
Stockholder litigation settlement and related costs 2,886 -- -- 2,886
-------- -------- -------- --------
Total current liabilities 4,418 1,365 (33) 5,750
Vehicle debt -- 3,920 -- 3,920
Long-term debt 2,074 605 -- 2,679
Deferred income and other noncurrent liabilities 884 323 (115)(c) 1,092
-------- -------- -------- --------
Total liabilities exclusive of liabilities
under management and mortgage programs 7,376 6,213 (148) 13,441
Liabilities under management and mortgage programs
Debt 2,143 2,830 690(d) 5,663
Deferred income taxes 321 -- -- 321
-------- -------- -------- --------
2,464 2,830 690 5,984
Preferred membership interest -- 99 -- 99
Mandatorily redeemable preferred interest
in a subsidiary holding debt 1,681 -- -- 1,681
Mandatorily redeemable preferred interest in
a subsidiary 375 -- -- 375
Commitments and contingencies
Stockholders' equity
Preferred stock -- 385 (385)(e) --
Common stock 9 -- -- 9
Move.com common stock -- -- -- --
Additional paid-in capital 4,571 593 (593)(e) 4,571
Retained earnings 1,883 267 (267)(e) 1,883
Accumulated other comprehensive loss (204) (13) 13 (e) (204)
Treasury stock (3,569) (103) 103 (e) (3,569)
-------- -------- -------- --------
Total stockholders' equity 2,690 1,129 (1,129) 2,690
-------- -------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 14,586 $ 10,271 $ (587) $ 24,270
======== ======== ======== ========
Note: Certain reclassifications have been made to the historical results of Avis
to conform with Cendant's classifications.
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial
Statements.
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
The accompanying Unaudited Pro Forma Condensed Combined Balance Sheet was
prepared to reflect the planned Acquisition of Avis, which will be accounted for
under the purchase method of accounting, as if it occurred on September 30,
2000. The purchase price of $967 (including expenses directly attributable to
the Acquisition of $30) was based on acquiring 100 percent of the Avis common
and preferred shares outstanding, which were not already owned by Cendant as of
the assumed acquisition date, and the purchase price as set forth in the
Agreement and Plan of Merger dated as of November 11, 2000 of $33 per share.
The following is a summary of estimated adjustments in the Unaudited Pro Forma
Condensed Combined Balance Sheet:
(a) Represents available cash expected to be used to fund the Acquisition.
(b) Represents the estimated tax benefit from the exercise of Avis stock
options ($24) and deferred tax asset ($12) resulting from the
difference between book and tax basis for transaction costs associated
with the Acquisition.
(c) Estimated adjustments to goodwill representing the excess of the cost
over the fair value of the net assets acquired:
Calculation of acquisition goodwill:
Cash consideration $ 967
Fair value of identifiable net assets acquired:
Book value of Avis 1,129
Tax benefit related to the estimated payment of the net cash obligation
from the cancellation of Avis stock options 24
Elimination of Avis goodwill (1,299)
Deferred income tax assets 12
--------------
Fair value of identifiable net assets acquired (134)
--------------
Cendant's basis in its current ownership of Avis (common and preferred equity
investment of $514 net of deferred gain of $115) 399
--------------
Acquisition goodwill $ 1,500
==============
Calculation of goodwill acquisition adjustment:
Acquisition goodwill $ 1,500
Avis goodwill (1,299)
--------------
Goodwill acquisition adjustment $ 201
==============
(d) Represents estimated acquisition borrowings for the purchase of outstanding
shares.
(e) The elimination of the equity balances of Avis.
(f) Elimination of balances between Cendant and Avis related to current business
relationships.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL ADJUSTED PRO FORMA PRO FORMA
CENDANT AVIS(1) ADJUSTMENTS COMBINED
-------- -------- ----------- ----------
REVENUES
Service fees, net $ 2,852 $ 113 $ (207)(a) $ 2,758
Vehicle rental -- 1,989 -- 1,989
Vehicle leasing and other fees -- 111 -- 111
Other 110 5 (31)(b) 84
------- ------- ------- -------
Net revenues 2,962 2,218 (238) 4,942
EXPENSES
Direct operating 994 716 (166)(a) 1,544
Vehicle depreciation and lease charges -- 511 -- 511
Selling, general, and administrative 804 482 -- 1,286
Interest, net 85 229 10(c) 324
Depreciation and amortization 244 56 4(d) 304
Other charges
Restructuring and unusual 89 -- -- 89
Litigation settlement (21) -- -- (21)
Investigation related 15 -- -- 15
------- ------- ------- -------
Total expenses 2,210 1,994 (152) 4,052
Net loss on disposition of businesses (7) -- (35)(e) (42)
------- ------- ------- -------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 745 224 (121) 848
Provision (benefit) for income taxes 234 105 (31)(f) 308
Minority interest 61 -- -- 61
------- ------- ------- -------
INCOME (LOSS) FROM CONTINUING OPERATIONS $ 450 $ 119 $ (90) $ 479
======= ======= ======= =======
CENDANT COMMON STOCK INCOME PER SHARE
INCOME PER SHARE FROM CONTINUING OPERATIONS:
Basic $ 0.63 -- -- $ 0.67
Diluted $ 0.61 -- -- $ 0.64
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 722 -- -- 722
Diluted 763 -- -- 763
MOVE.COM COMMON STOCK LOSS PER SHARE
LOSS PER SHARE FROM CONTINUING OPERATIONS:
Basic $ (1.22) -- -- $ (1.22)
Diluted $ (1.22) -- -- $ (1.22)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 4 -- -- 4
Diluted 4 -- -- 4
(1) See Supplemental Unaudited Pro Forma Condensed Statement of Operations of
Avis, included elsewhere herein.
See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial
Statements.
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
The following is a summary of the estimated adjustments in the Unaudited Pro
Forma Condensed Combined Statement of Operations:
(a) Elimination of amounts paid by Avis to Cendant ($166) for services
related to call centers and information technology and for the use of
trademarks and interest cost ($41) on the acquisition financing
computed based on PHH's estimated cost of debt of 8% (rates which are
currently available), based upon varying financing vehicles for the
total borrowings of $690. For every 1/8% (0.125 basis points) change in
the assumed interest rate for the borrowings, there would be a
corresponding effect of approximately $.5 (less than $.001 per share)
on the pro forma combined net earnings.
(b) Elimination of Cendant's earnings attributable to its investment in
Avis.
(c) The reduction of interest income ($10) from the use of existing cash to
fund a portion of the transaction. Interest income is based on
Cendant's current rate for cash investments of 5 percent. For every
1/8% change in the assumed interest rate on invested cash, there would
be a corresponding effect of approximately $.2 (less than $.001 per
share) on the pro forma combined net earnings.
(d) Amortization of goodwill generated on the excess of fair value over the
net assets acquired on a straight line basis over 40 years, net of
reversal of Avis' amortization of pre-acquisition goodwill.
(e) Reversal of a $35 gain recorded by Cendant, which represents the
recognition of a portion of its previously recorded deferred gain from
the sale of its fleet business due to the PHH Europe Transaction.
(f) Represents the income tax effect of the pro forma adjustments at an
estimated statutory rate of 37.5% (not including adjustments for
non-deductible goodwill), except item e, where the tax effect was
approximately 2% (the rate at which taxes were provided on the related
gain).
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
PRO FORMA ADJUSTMENTS
---------------------
HISTORICAL ADJUSTED DISCONTINUED PHH EUROPE PRO FORMA
CENDANT AVIS(1) OPERATIONS(2) TRANSACTION(3) ACQUISITION COMBINED
---------- -------- ------------- -------------- ----------- ---------
REVENUES
Service fees, net $ 5,183 $ 63 $ (895) $ (79) $ (263)(a) $ 4,009
Vehicle rental -- 2,501 -- -- -- 2,501
Vehicle leasing and other fees 30 76 -- (1) -- 105
Other 189 7 -- 8 (g) (41)(b) 163
------- ------- ------- ------- ------- -------
Net revenues 5,402 2,647 (895) (72) (304) 6,778
EXPENSES
Direct operating 1,795 957 (208) (26) (208)(a) 2,310
Vehicle depreciation and lease
charges -- 667 -- -- -- 667
Selling, general, and administrative 1,688 540 (552) (22) -- 1,654
Interest, net 199 241 (2) (41)(h) 14(c) 411
Depreciation and amortization 371 54 (24) (10) 5(d) 396
Other charges:
Litigation settlement 2,894 -- -- -- -- 2,894
Investigation related 21 -- -- -- -- 21
Merger-related costs and
other unusual 110 -- (85) -- -- 25
Termination of proposed
acquisition 7 -- -- -- -- 7
------- ------- ------- ------- ------- -------
Total expenses 7,085 2,459 (871) (99) (189) 8,385
Net gain on dispositions of
businesses 1,109 -- (142) -- (881)(e) 86
------- ------- ------- ------- ------- -------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST (574) 188 (166) 27 (996) (1,521)
Provision (benefit) for income
taxes (406) 90 (62) 11 (56)(f) (423)
Minority interest 61 -- -- -- -- 61
------- ------- ------- ------- ------- -------
INCOME (LOSS) FROM CONTINUING
OPERATIONS $ (229) $ 98 $ (104) $ 16 $ (940) $(1,159)
======= ======= ======= ======= ======= =======
INCOME (LOSS) PER SHARE FROM
CONTINUING OPERATIONS:
Basic $ (0.30) $ (1.54)
Diluted $ (0.30) $ (1.54)
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 751 751
Diluted 751 751
(1) See Supplemental Unaudited Pro Forma Condensed Statement of Operations of
Avis, included elsewhere herein.
(2) Represents the adjustment required to reflect Cendant's individual
membership business as discontinued operations.
(3) Reflects the results of PHH Europe operations for the period from January
1, 1999 to the date of disposition by Cendant (June 30, 1999) as adjusted
for equity in earnings from the retained investment, net of amortization of
the excess cost over assets acquired and the reduction in interest expense
resulting from the $1,053 in proceeds from the PHH Europe Transaction for
the period from January 1, 1999 to June 30, 1999 (see notes g and h in the
notes to Unaudited Pro Forma Condensed Combined Financial Statements)
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial
Statements.
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
The following is a summary of estimated adjustments in the Unaudited Pro Forma
Condensed Combined Statement of Operations:
(a) Elimination of amounts paid by Avis to Cendant ($208) for services
related to call centers and information technology and for the use of
trademarks and interest cost ($55) on the acquisition financing
computed based on PHH's estimated cost of debt of 8% (rates which are
currently available), based upon varying financing vehicles for the
total borrowings of $690. For every 1/8% (0.125 basis points) change in
the assumed interest rate for the borrowings, there would be a
corresponding effect of approximately $1 (less than $.001 per share) on
the pro forma combined net earnings.
(b) Elimination of Cendant's earnings attributable to its investment in
Avis.
(c) The reduction of interest income ($14) from the use of existing cash to
fund a portion of the transaction. Interest income is based on
Cendant's current rate for cash investments of 5 percent. For every
1/8% change in the assumed interest rate on invested cash, there would
be a corresponding effect of approximately $.2 (less than $.001 per
share) on the pro forma combined net earnings.
(d) Amortization of goodwill generated on the excess of cost over fair
value of the net assets acquired on a straight line basis over 40
years, net of reversal of Avis' amortization of pre-acquisition
goodwill.
(e) Reversal of an $881 gain recorded by Cendant on the sale of PHH Fleet
Leasing business to Avis on June 30, 1999.
(f) Represents the income tax effect of the pro forma adjustments at an
estimated statutory rate of 37.5% (not including adjustments for
non-deductible goodwill), except item (e), where the tax effect was
approximately 2% (the rate at which taxes were provided on the related
gain)
(g) Represents the fleet management technology fee income and the equity in
the earnings of the joint venture formed pursuant to the PHH Europe
Transaction for the period January 1, 1999 to June 30, 1999.
(h) Interest reduction as a result of the retirement of 7 3/4% term loans
related to the application of proceeds of $1,053 from the PHH Europe
Transaction.
AVIS SUPPLEMENTAL PRO FORMA FINANCIAL INFORMATION
The accompanying Unaudited Pro Forma Condensed Statements of
Operations were prepared to reflect the historical consolidated
financial statements of Avis adjusted to reflect the PHH Europe
Transaction as set forth in the accompanying Notes to the Avis
Supplemental Unaudited Pro Forma Condensed Statements of
Operations. Avis will receive an annual license fee in
connection with the PHH Europe Transaction for the license of
the PHH fleet management technology, PHH interactive. Avis
utilized the proceeds of the PHH Europe Transaction to
reduce Avis' indebtedness and pay transaction costs.
SUPPLEMENTAL UNAUDITED PRO FORMA CONDENSED
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN MILLIONS)
HISTORICAL PHH EUROPE PRO FORMA ADJUSTED
AVIS TRANSACTION(a) ADJUSTMENTS AVIS
---------- -------------- ----------- --------
REVENUES
Service fees, net $ 199 $ (86) $ -- $ 113
Vehicle rental 1,989 -- -- 1,989
Vehicle leasing and other fees 123 (12) -- 111
Other -- -- 5(b) 5
------ ------ ------ ------
Net revenues 2,311 (98) 5 2,218
EXPENSES
Direct operating 716 -- -- 716
Vehicle depreciation and lease charges 511 -- -- 511
Selling, general, and administrative 538 (56) -- 482
Interest, net 287 -- (58)(c) 229
Depreciation and amortization 71 (12) (3)(d) 56
Other charges
Restructuring and unusual -- -- -- --
Litigation settlement -- -- -- --
Investigation related -- -- -- --
------ ------ ------ ------
Total expenses 2,123 (68) (61) 1,994
Net gain on disposition of businesses -- -- -- --
------ ------ ------ ------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 188 (30) 66 224
Provision (benefit) for income taxes 83 (3) 25(e) 105
Minority interest -- -- -- --
------ ------ ------ ------
INCOME (LOSS) FROM CONTINUING OPERATIONS $ 105 $ (27) $ 41 $ 119
====== ====== ====== ======
Note: Certain reclassifications have been made to the historical results of Avis
to conform with Cendant's classifications.
See accompanying Notes to Supplemental Unaudited Pro Forma Condensed
Financial Statements.
SUPPLEMENTAL UNAUDITED PRO FORMA CONDENSED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN MILLIONS)
HISTORICAL PHH EUROPE PRO FORMA ADJUSTED
AVIS TRANSACTION(a) ADJUSTMENTS AVIS
---------- -------------- ----------- --------
REVENUES
Service fees, net $ 139 $ (76) $ -- $ 63
Vehicle rental 2,501 -- -- 2,501
Vehicle leasing and other fees 85 (9) -- 76
Other -- -- 7(b) 7
------ ------ ------ ------
Net revenues 2,725 (85) 7 2,647
EXPENSES
Direct operating 957 -- -- 957
Vehicle depreciation and lease charges 667 -- -- 667
Selling, general, and administrative 582 (42) -- 540
Interest, net 288 -- (47)(c) 241
Depreciation and amortization 65 (8) (3)(d) 54
Other charges
Litigation settlement -- -- -- --
Investigation related -- -- -- --
Merger-related costs and other unusual -- -- -- --
Termination of proposed acquisition -- -- -- --
------ ------ ------ ------
Total expenses 2,559 (50) (50) 2,459
Net gain on disposition of businesses -- -- -- --
------ ------ ------ ------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 166 (35) 57 188
Provision (benefit) for income taxes 73 (4) 21(e) 90
Minority interest -- -- -- --
------ ------ ------ ------
INCOME (LOSS) FROM CONTINUING OPERATIONS $ 93 $ (31) $ 36 $ 98
====== ====== ====== ======
Note: Certain reclassifications have been made to the historical results of Avis
to conform with Cendant's classifications.
See accompanying Notes to Supplemental Unaudited Pro Forma Condensed
Financial Statements.
NOTES TO SUPPLEMENTAL UNAUDITED PRO FORMA
CONDENSED FINANCIAL STATEMENTS
(IN MILLIONS)
The following is a summary of estimated adjustments to the Avis Pro Forma
Financial Statements:
(a) Represents the adjustment to remove the results of operations of PHH
Europe for the period July 1, 1999 to December 31, 1999 and for the
nine months ended September 30, 2000.
(b) Fleet management technology fee income and the equity in the earnings
of the joint venture formed pursuant to the PHH Europe Transaction for
the period July 1, 1999 to December 31, 1999 and for the nine months
ended September 30, 2000, net of amortization of the excess of cost
over the assets acquired.
(c) Interest reduction as a result of the retirement of acquisition debt
and revolving credit facilities related to the application of proceeds
of $1,053 from the PHH Europe Transaction.
(d) Decrease in amortization expense relating to goodwill generated from
the PHH Europe Transaction, net of reversal of PHH Europe goodwill.
(e) Represents the income tax effect of the pro forma adjustments at an
estimated statutory rate of 39% (not including adjustments for
non-deductible goodwill).
CENDANT CORPORATION TO ACQUIRE OUTSTANDING
AVIS GROUP SHARES FOR $33.00 PER SHARE IN CASH
NEW YORK AND GARDEN CITY, NY, NOVEMBER 13, 2000- Cendant Corporation
(NYSE: CD) and Avis Group Holdings, Inc. (NYSE: AVI) today announced that they
have entered into a definitive agreement for Cendant to acquire all of the
outstanding shares of Avis Group that are not currently owned by Cendant at a
price of $33.00 per share in cash. Approximately 25.6 million outstanding shares
of Avis Group common stock, and options to purchase an additional approximately
7.9 million Avis Group shares, are not owned by Cendant. Accordingly, the
transaction has an equity value of approximately $935 million, net of option
proceeds.
The shares will be acquired at a price of $33.00 per share in a cash merger
pursuant to which Avis Group will be merged with an indirect wholly owned
subsidiary of Cendant. Upon completion of the transaction, Avis Group will
become a subsidiary of Cendant. The merger is conditioned upon, among other
things, approval of a majority of the votes cast by Avis Group stockholders who
are unaffiliated with Cendant and customary regulatory approvals.
The transaction is expected to close in the first quarter of 2001.
"We expect this transaction to be immediately accretive to Cendant's earnings,"
said Cendant Chairman, President and Chief Executive Officer, Henry R.
Silverman. "Additionally we look forward to the combination with Avis Group to
enhance both our off-line and online travel strategies."
"We're very pleased that our successful business strategy has now resulted in a
substantial increase in shareholder value - approximately 74% over the past
year," said Avis Group Chairman and Chief Executive Officer A. Barry Rand. "Over
the past 12 months, we have successfully transformed Avis Group into the leading
comprehensive vehicle management solutions provider with award-winning
technology. We have substantially strengthened our balance sheet and
significantly improved our free cash flow, while attaining our 13th consecutive
quarter of EPS growth above 20%. Now, we look forward to combining with Cendant,
a company with significant financial strength and broad travel industry assets."
ABOUT AVIS GROUP HOLDINGS, INC.
Avis Group Holdings, Inc. is one of the world's leading service and information
providers for comprehensive automotive transportation and vehicle management
solutions. Avis Group operates Avis Rent A Car, the world's second largest
general-use car rental business, with locations in the United States, Canada,
Australia, New Zealand and the Latin American Caribbean region; PHH Arval, one
of the world's leading vehicle management companies; and Wright Express, the
world's largest fleet card provider. For additional information and news
concerning Avis Group, please log onto the Avis web site at www.avis.com or call
Company News on Call (800-758-5804, access code #078975).
ABOUT CENDANT CORPORATION
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, and
tax preparation services. 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. 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 visiting the Company's Web site at www.cendant.com or by
calling877-4INFO-CD (877-446-3623).
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. THESE STATEMENTS ARE NOT
GUARANTEES OF FUTURE PERFORMANCE. 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
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999 FOR AVIS GROUP AND IN FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2000 FOR CENDANT.
Media Contacts: Investor Contacts:
Cendant Corporation Cendant Corporation
Elliot Bloom Denise Gillen 212-413-1833
212-413-1832 Sam Levenson 212-413-1834
Avis Group Holdings, Inc. Avis Group Holdings, Inc.
David Fluhrer Elizabeth Logler
516-222-3230 516-222-4795