EXHIBIT 99.1
[CENDANT LOGO]
CENDANT REPORTS BETTER THAN EXPECTED FIRST QUARTER 2001 RESULTS
1Q Adjusted EPS of $0.19 Exceeds Projection by $0.03
Company Increases Full Year Projected 2001 Adjusted EPS to $1.00
Compared with $0.91 in 2000 and Increases 2001 Second Quarter Outlook
to $0.27 from $0.26
1Q Adjusted EPS $0.19 in 2001 vs. $0.22 in 2000
1Q Reported EPS from Continuing Operations $0.28 in 2001 vs. $0.15 in 2000
NEW YORK, NY, APRIL 18, 2001 - Cendant Corporation (NYSE: CD) today reported
better than expected first quarter 2001 results and increased its outlook for
second quarter and full year 2001. The Company's four reportable segments - Real
Estate Services, Hospitality, Vehicle Services and Financial Services - all
exceeded or met forecasts for first quarter 2001, and each exceeded last year's
results.
"We are pleased that we have exceeded our projections in the quarter and are
once again raising our projected results for the full year 2001. Strong
contributions from many of our businesses and the addition of the operations of
Avis to our Vehicle Services segment drove the increase in our first quarter
EBITDA over prior projections and last year," said Cendant Chairman, President
and Chief Executive Officer, Henry R. Silverman. "Despite a challenging economic
environment, we believe that the diversity of our portfolio of companies, which
is hedged against economic cycles, coupled with our fee-for-services business
model will continue to drive growth in revenue and earnings in 2001."
The Company announced that first quarter 2001 Adjusted earnings per share from
continuing operations (adjusted to remove non-recurring or unusual items),
excluding move.com operating results and the effect of an equity ownership of
Homestore.com ("Adjusted EPS") of $0.19 exceeded prior first quarter 2001
projections of $0.16. The Company also announced that based on the leading
indicators from its business units, the impact of lower interest rates and using
cash instead of shares to acquire Fairfield Resorts, it has increased its second
quarter 2001 Adjusted EPS projection to $0.27 from the prior projection of $0.26
and its full year 2001 projection to $1.00 from the prior projection of $0.95.
This compares with 2000 actual Adjusted EPS of $0.91. The Company anticipates
that further improvements in existing operations, benefits from recent
acquisitions and other strategic activity may result in further increases in
projected earnings for 2001.
1
The Company noted that 2001 Adjusted EPS is now projected to be 10% ahead of
last year, despite 2001 being burdened by an estimated $0.07 per share of
additional interest ($0.03 in the first quarter) resulting from the settlement
of the Company's principal class action litigation. In addition, the prior
year's first quarter benefited from a previously disclosed $0.03 per share of
financial income derived from certain of the Company's investments.
RECENT ACTIVITIES
Consistent with its new growth agenda, the Company has completed several
strategic transactions:
o Acquired the remaining shares of Avis Group Holdings not already owned
for approximately $937 million in March 2001. This transaction was
immediately accretive to earnings.
o Acquired Fairfield, the largest independent vacation ownership company in
the United States, in April 2001 for approximately $690 million. This
transaction is expected to be immediately accretive to earnings.
o Acquired Holiday Cottages, a leading provider of holiday cottage rentals
in Europe, in January 2001 and RCI Southern Africa, a timeshare exchange
business, in March 2001.
o Sold its full service real estate Internet portal, move.com, along with
certain ancillary businesses, to Homestore.com for more than $700 million
in February 2001. The transaction resulted in an approximately 10 times
return on Cendant's investment. Cendant currently owns approximately 19%
of the outstanding shares of Homestore.com.
o Completed an agreement whereby Merrill Lynch outsourced its mortgage
origination and servicing operations to Cendant Mortgage, effective
January 2001.
o Raised $1.5 billion through a common stock and senior zero coupon
convertible notes offering in February 2001.
FIRST QUARTER SEGMENT RESULTS
The underlying discussion of results from continuing operations focuses on
Adjusted EBITDA, which is defined as earnings before non-operating interest,
income taxes, depreciation, amortization, minority interest and equity in
Homestore.com, adjusted to exclude certain items which are of a non-recurring or
unusual nature and are not measured in assessing segment performance or are not
segment specific. Such discussion is the most informative representation of how
management evaluates performance and allocates resources.
In connection with the significant acquisitions and dispositions of businesses
completed during 2001, we have realigned the operations and management of our
businesses. Accordingly, we have changed our reportable segments to coincide
with this realignment. Beginning with first quarter 2001, we have the following
reportable operating segments: Real Estate Services (consisting of the Company's
three real estate brands, mortgage and relocation services); Hospitality
(consisting of the Company's nine lodging brands, timeshare, travel agency and
cottage rental); Vehicle Services (consisting of car rental, vehicle management
services and National Car Parks); and Financial Services (consisting of
insurance related services, financial services enhancement products and tax
preparation services). Additionally, Corporate and Other includes unallocated
corporate overhead and the operating results of certain other non-material
business units, some of which have been disposed. All prior periods have been
restated to reflect the change in segments. (See Table 3 for first quarter 2001
and 2000 Revenues and Adjusted EBITDA by Segment; Table 4 for Revenues
2
and Adjusted EBITDA by Segment for the quarters and full year of 2000; Table 5
for expanded first quarter 2001 and 2000 Segment Revenue Driver Analysis and
Table 6 for Segment Revenue Driver Analysis for the quarters of 2000.)
REAL ESTATE SERVICES
2001 2000 % CHANGE
- --------------------------------------------------------------------------
REVENUES $339 $289 17%
- --------------------------------------------------------------------------
ADJUSTED EBITDA $132 $114 16%
- --------------------------------------------------------------------------
ADJUSTED EBITDA MARGIN 39% 39%
- -----------------------------------------------------
The increase in operating results was principally driven by a significant
increase in mortgage loan production, growth in our mortgage servicing portfolio
and increased relocation service based fees. Recurring royalties from real
estate franchising were essentially unchanged despite soft industry-wide
conditions, particularly in California, due to growth in our franchise systems
as a result of franchise sales and NRT acquisitions.
HOSPITALITY
2001 2000 % CHANGE
- --------------------------------------------------------------------------
REVENUES $264 $242 9%
- --------------------------------------------------------------------------
ADJUSTED EBITDA $104 $91 14%
- --------------------------------------------------------------------------
ADJUSTED EBITDA MARGIN 39% 38%
- -----------------------------------------------------
Revenues and Adjusted EBITDA increased primarily from our timeshare operations
and the January 2001 acquisition of Holiday Cottages. Timeshare revenues grew
due to an increase in members and the number of exchange transactions.
VEHICLE SERVICES
2001 2000 % CHANGE
- --------------------------------------------------------------------------
REVENUES $454 $137 231%
- --------------------------------------------------------------------------
ADJUSTED EBITDA $93 $72 29%
- --------------------------------------------------------------------------
In March 2001, we acquired the remaining 82% of outstanding common shares of
Avis Group Holdings that we did not already own. The acquisition was accounted
for as a purchase and, accordingly, its operating results are included since the
acquisition date. Prior to the acquisition, revenue and Adjusted EBITDA
principally consisted of Avis royalties, earnings from our equity investment in
Avis and the operations of National Car Parks.
FINANCIAL SERVICES
2001 2000 % CHANGE
- --------------------------------------------------------------------------
REVENUES $203 $194 5%
- --------------------------------------------------------------------------
ADJUSTED EBITDA $84 $82 2%
- --------------------------------------------------------------------------
ADJUSTED EBITDA MARGIN 41% 42%
- -----------------------------------------------------
Revenue and Adjusted EBITDA reflect strong tax return volume growth at Jackson
Hewitt partially offset by modest declines at FISI/BCI due to reduced direct
mail offerings in prior periods and reduced billings and collections of
insurance premiums.
3
2001 OUTLOOK
The Company raised full year 2001 projected Adjusted EPS to $1.00 compared with
most recent 2001 projections of $0.95 (and original 2001 projections of $0.91)
and compared with $0.91 for full year 2000. The raised outlook for 2001 reflects
strong operating performance across our comparable business units, an increased
contribution from Avis in first quarter 2001, reduced interest expense and lower
projected weighted average shares outstanding. The Company also raised second
quarter 2001 projected Adjusted EPS to $0.27 compared with $0.23 in second
quarter 2000, and reiterated that Adjusted EPS in the third and fourth quarters
of 2001 are also projected to be higher than the corresponding quarters in 2000.
The Company revised its 2001 financial projections from continuing operations,
excluding the results of move.com/Homestore.com and including the results of
Avis and Fairfield, as follows:
($ in millions) Current 2001 Projection Prior 2001 Projection 2000 Annual
----------------------- --------------------- -----------
Adjusted EBITDA:
Real Estate Services $825 - $845 N/A $752
Hospitality $535 - $550 N/A $394
Vehicle Services $530 - $545 N/A $306
Financial Services $210 - $220 N/A $200
Corporate and Other ($45 - $55) N/A ($15)
Total Adjusted EBITDA $2,060 - $2,100 $2,015 - $2,060 $1,637
Depreciation and Amortization $450 - $460 $425 - $435 $324
Interest Expense, net $255 - $270 $335 - $350 $146
Effective Tax Rate
on Adjusted Results 35.2% 35.2% 34.0%
Minority Interest $29 $31 $84
Weighted Average Shares
Outstanding (millions) 875 - 895 900 - 925 762
Capital Expenditures $275 - $325 N/A $199
The increase in net interest expense in 2001 compared with 2000 is principally
due to the Company's principal class action litigation settlement obligation.
The Company expects year-over-year interest expense comparisons to improve by
fourth quarter 2001 as it discharges the liability and anniversaries the expense
recorded in the prior year. The decrease in projected interest expense compared
with the prior projection is due to lower corporate borrowing costs, including
the February 2001 issuance of zero coupon convertible notes. The higher 2001 tax
rate is principally a result of the acquisition of Avis; however, the Company
continues to examine ways to reduce its 2001 effective tax rate. Reduced
minority interest in 2001 is primarily a result of the retirement of the Feline
PRIDES in February 2001. The increase in projected weighted average shares
outstanding in 2001 compared with 2000 is primarily the result of the issuance
of 61 million shares of common stock in connection with the retirement of Feline
PRIDES and the issuance of 46 million shares in February 2001. The increased
projected capital spending and depreciation and amortization in 2001 is
primarily related to the acquisitions of Avis and Fairfield, as well as Holiday
Cottages and RCI Southern Africa.
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FIRST QUARTER BALANCE SHEET
o As of March 31, 2001, we had approximately $2.2 billion of cash and cash
equivalents and $4.7 billion of debt and minority interest. In February 2001,
we issued zero coupon convertible senior notes for gross proceeds of $900
million.
o As of March 31, 2001 the net debt to total capital ratio was 32%. The ratio
of Adjusted EBITDA, excluding move.com/Homestore.com, to net interest expense
was 7.1 in first quarter 2001.
o In first quarter 2001 we paid $250 million to a settlement trust, reducing
the net outstanding obligation associated with the principal class action
litigation settlement at March 31, 2001 to $2.25 billion.
o Common shares outstanding increased in first quarter 2001 primarily from the
issuance of 61 million shares in connection with the retirement of $1.7
billion of Feline PRIDES and the sale of 46 million shares in February 2001.
FIRST QUARTER EPS ITEMS
Reported EPS for CD common stock includes Cendant Group operations and a
retained interest in Move.com Group. (See Table 2 for calculation of earnings.)
Reported EPS from continuing operations for Cendant Group was $0.28 in first
quarter 2001 and $0.15 in first quarter 2000. The following are the significant
items reflected in reported results from continuing operations that are
considered to be of an unusual or non-recurring nature for purposes of deriving
Adjusted EBITDA and Adjusted EPS:
FIRST QUARTER 2001
o A net gain of $435 million ($261 million after tax) on the disposition of
businesses, primarily related to the sale of move.com. Cendant Group's
retained interest in the move.com after tax gain was $234 million or $0.28
per share.
o A charge totaling $95 million ($62 million or $0.07 per share after tax) to
fund a contribution to an independent technology trust responsible for
providing technology initiatives for the benefit of current and future
franchisees at Century 21, Coldwell Banker and ERA.
o A charge totaling $85 million ($56 million or $0.07 per share after tax)
incurred in conjunction with the development and launch of an Internet travel
portal. The Company's financial contribution to the independent entity
developing the portal, which is required to be expensed immediately, is
expected to provide attractive financial returns to Cendant and its
franchisees with limited risk and to significantly expand the Internet
presence of the Company's travel brands.
o A net loss of $18 million after tax or $0.02 per share related to Cendant's
proportionate ownership in Homestore.com.
o A charge of $11 million ($7 million or $0.01 per share after tax) for
litigation settlement and investigation costs, net of a credit for
distributed Feline PRIDES Rights that expired unexercised.
o Merger related charges totaling $8 million ($5 million or $0.01 per share
after tax) related to the acquisition and integration of Avis.
o A charge of $7 million ($5 million or $0.01 per share after tax) related to a
special contribution made to a newly formed Cendant Charitable Foundation.
5
FIRST QUARTER 2000
o A net credit of $38 million ($25 million or $0.03 per share after tax) for
disallowed claims in connection with the Feline PRIDES class action
litigation, net of investigation related costs.
o Restructuring and other unusual charges totaling $86 million ($56 million or
$0.07 per share after tax).
o Charges totaling $13 million ($9 million or $0.01 per share after tax) for
losses on the disposition of businesses.
INVESTOR CONFERENCE CALL
Cendant will host a conference call to discuss first quarter results on
Thursday, April 19, 2001 at 1:00 p.m. Eastern Time. Investors may access this
call live at www.Cendant.com or dial in to 913-981-5571. A web replay will be
available beginning at 4:00 p.m. Eastern Time on April 19, 2001 at
www.Cendant.com. A telephone replay will be available from 4:00 p.m. Eastern
Time on April 19, 2001 until 8:00 p.m. on April 23 at 719-457-0820, access code:
461306.
STATEMENTS ABOUT FUTURE RESULTS MADE IN THIS RELEASE 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. THE COMPANY CAUTIONS THAT THESE STATEMENTS ARE NOT
GUARANTEES OF FUTURE PERFORMANCE. ACTUAL RESULTS MAY 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
THE COMPANY'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2000.
SUCH FORWARD-LOOKING STATEMENTS INCLUDE PROJECTIONS. SUCH PROJECTIONS WERE NOT
PREPARED IN ACCORDANCE WITH PUBLISHED GUIDELINES OF THE AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS OR THE SEC REGARDING PROJECTIONS AND FORECASTS, NOR
HAVE SUCH PROJECTIONS BEEN AUDITED, EXAMINED OR OTHERWISE REVIEWED BY
INDEPENDENT AUDITORS OF CENDANT OR ITS AFFILIATES. IN ADDITION, SUCH PROJECTIONS
ARE BASED UPON MANY ESTIMATES AND ARE INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC
AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE
CONTROL OF MANAGEMENT OF CENDANT AND ITS AFFILIATES. CERTAIN OF SUCH
UNCERTAINTIES AND CONTINGENCIES ARE SPECIFIED IN CENDANT'S FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 2000. ACCORDINGLY, ACTUAL RESULTS MAY BE MATERIALLY
HIGHER OR LOWER THAN THOSE PROJECTED. THE INCLUSION OF SUCH PROJECTIONS HEREIN
SHOULD NOT BE REGARDED AS A REPRESENTATION BY CENDANT OR ITS AFFILIATES THAT THE
PROJECTIONS WILL PROVE TO BE CORRECT.
Cendant Corporation is a diversified global provider of business and consumer
services primarily within the real estate and travel sectors. The Company's
fee-for-service businesses include hotel, real estate and tax preparation
franchising; rental cars, fleet leasing and fuel cards; mortgage origination and
employee relocation; customer loyalty programs; vacation exchange and rental
services and vacation interval sales. Other business units include the UK's
largest private car park
6
operator and electronic reservations processing for the travel industry. With
headquarters in New York City, the Company has approximately 60,000 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
calling 877-4INFO-CD (877-446-3623).
Media Contact: Investor Contacts:
- ------------- -----------------
Elliot Bloom Denise Gillen Sam Levenson
212-413-1832 212-413-1833 212-413-1834
*****
Tables Follow
7
TABLE 1
CENDANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
THREE MONTHS ENDED
MARCH 31,
------- -------
2001 2000
------- -------
REVENUES
Service fees, net $ 893 $ 812
Vehicle-related 398 70
Other 12 63
------- -------
Net revenues 1,303 945
------- -------
EXPENSES
Operating 433 338
Marketing and reservation 158 140
Vehicle depreciation, lease charges and interest, net * 181 --
General and administrative 135 107
Non-vehicle depreciation and amortization 95 81
Other charges (credits):
Restructuring and other unusual charges 186 86
Merger-related costs 8 --
Litigation settlement and related costs 11 (38)
Non-vehicle interest, net 57 25
------- -------
Total expenses 1,264 739
------- -------
Net gain (loss) on dispositions of businesses 435 (13)
------- -------
INCOME BEFORE INCOME TAXES, MINORITY INTEREST AND EQUITY IN HOMESTORE.COM 474 193
Provision for income taxes 189 66
Minority interest, net of tax 13 16
Equity in Homestore.com, net of tax 18 --
------- -------
INCOME FROM CONTINUING OPERATIONS 254 111
Discontinued operations:
Income from discontinued operations, net of tax -- 16
Gain on disposal of discontinued operations, net of tax 23 --
------- -------
INCOME BEFORE EXTRAORDINARY LOSS AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 277 127
Extraordinary loss, net of tax -- (2)
------- -------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 277 125
Cumulative effect of accounting change, net of tax (38) (56)
------- -------
NET INCOME $ 239 $ 69
======= =======
CD COMMON STOCK INCOME PER SHARE
BASIC
Income from continuing operations $ 0.29 $ 0.15
Net income $ 0.28 $ 0.10
DILUTED
Income from continuing operations $ 0.28 $ 0.15
Net income $ 0.26 $ 0.09
WEIGHTED AVERAGE SHARES
Basic 790 717
Diluted 830 751
MOVE.COM COMMON STOCK INCOME PER SHARE
BASIC
Income from continuing operations $ 10.41
Net income $ 10.34
DILUTED
Income from continuing operations $ 10.13
Net income $ 10.07
WEIGHTED AVERAGE SHARES
Basic 2
Diluted 3
- -------
* Includes interest charges of $39 million for the three months ended March 31,
2001.
TABLE 2
CENDANT CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INCOME (LOSS) PER SHARE DATA - CALCULATION OF EARNINGS BY
CLASS OF COMMON STOCK
(IN MILLIONS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
MARCH 31, 2001
--------------------
AS AS
REPORTED ADJUSTED
-------- --------
CD COMMON STOCK INCOME PER SHARE
INCOME FROM CONTINUING OPERATIONS:
Income from continuing operations, including Cendant Group's retained
interest in Move.com Group $ 233 $ 146
Convertible debt interest, net of tax 3 3
Adjustment to Cendant Group's retained interest in Move.com Group (A) (6) --
----- -----
Income from continuing operations - Diluted $ 230 $ 149
===== =====
NET INCOME:
Net income, including Cendant Group's retained interest in Move.com Group $ 218 $ 146
Convertible debt interest, net of tax 3 3
Adjustment to Cendant Group's retained interest in Move.com Group(A) (6) --
----- -----
Net income - Diluted $ 215 $ 149
===== =====
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 790 790
Diluted 830 830
INCOME PER SHARE:
Basic
Income from continuing operations $0.29 $ 0.18 *
Net income 0.28 0.18 *
Diluted
Income from continuing operations $0.28 $ 0.18 *
Net income 0.26 0.18 *
MOVE.COM COMMON STOCK INCOME (LOSS) PER SHARE INCOME (LOSS) FROM CONTINUING
OPERATIONS(B):
Income (loss) from continuing operations, excluding Cendant Group's retained
interest in Move.com Group $ 21 $ (1)
Adjustment to Cendant Group's retained interest in Move.com Group (A) 6 --
----- -----
Income from continuing operations - Diluted $ 27 $ (1)
===== =====
NET INCOME (LOSS)(C):
Net income (loss), excluding Cendant Group's retained interest in Move.com Group $ 21 $ (1)
Adjustment to Cendant Group's retained interest in Move.com Group (A) 6 --
----- -----
Net income - Diluted $ 27 $ (1)
===== =====
WEIGHTED AVERAGE SHARES OUTSTANDING(D):
Basic 2 2
Diluted 3 3
INCOME (LOSS) PER SHARE:
Basic
Income (loss) from continuing operations $10.41 $(0.26)
Net income (loss) 10.34 (0.26)
Diluted
Income (loss) from continuing operations $10.13 $(0.25)
Net income (loss) 10.07 (0.25)
- ----------
* Includes Cendant Group's retained interest in the adjusted results of
operations of Move.com Group.
(A) Amount represents the differential between Cendant Group's retained
interest in Move.com Group for its basic and diluted income (loss) per
share calculations.
(B) In thousands, the As Reported and As Adjusted basic income (loss) from
continuing operations attributable to Move.com common stock was $20,983
and ($525), respectively, and the As Reported and As Adjusted diluted
income (loss) from continuing operations attributable to Move.com common
stock was $27,086 and ($678), respectively.
(C) In thousands, the As Reported and As Adjusted basic net income (loss)
attributable to Move.com common stock was $20,847 and ($525),
respectively, and the As Reported and As Adjusted diluted net income
(loss) attributable to Move.com common stock was $26,911 and ($678),
respectively.
(D) In thousands, the As Reported and As Adjusted basic and diluted weighted
average shares outstanding were 2,016 and 2,673, respectively.
Table 3
Cendant Corporation and Subsidiaries
Revenues and Adjusted EBITDA by Segment *
(Dollars in millions)
Three Months Ended March 31,
----------------------------
Revenues Adjusted EBITDA (A)
-------------------------------- -------------------------------
2001 2000 % Change 2001 2000 (B) % Change
-------------------------------- -------------------------------
Real Estate Services $ 339 $ 289 17% $ 132 (D) $ 114 16%
Hospitality 264 242 9% 104 91 (G) 14%
Vehicle Services 454 137 231% 93 (E) 72 29%
Financial Services 203 194 5% 84 82 2%
------- ----- ----- -----
Total Reportable Segments 1,260 862 413 359
Corporate and Other (C) 43 83 ** (17) (F) 1 (H) **
------- ----- ----- -----
Total Company $ 1,303 $ 945 $ 396 $ 360
======= ===== ===== =====
- ----------
* In connection with significant acquisitions and dispositions of businesses
completed during 2001, the Company realigned the operations and management
of certain of its businesses. Accordingly, the Company's segment reporting
structure now encompasses the following four reportable segments: Real
Estate Services, Hospitality, Vehicle Services and Financial Services.
** Not meaningful.
(A) Defined as earnings before non-operating interest, income taxes,
depreciation and amortization, minority interest and equity in
Homestore.com, adjusted to exclude certain items which are of a
non-recurring or unusual nature and not measured in assessing segment
performance or are not segment specific.
(B) Excludes a charge of $86 million in connection with restructuring and
other initiatives ($63 million, $11 million and $2 million of charges were
recorded within the Real Estate Services, Hospitality and Financial
Services segments, respectively. Charges of $10 million were recorded
within businesses not classified by the Company as reportable operating
segments).
(C) Includes Move.com Group revenues of $10 million and $11 million and
Move.com Group Adjusted EBITDA losses of $9 million and $26 million for
the three months ended March 31, 2001 and 2000, respectively.
(D) Excludes a charge of $95 million to fund an irrevocable contribution to an
independent technology trust responsible for providing technology
initiatives for the benefit of current and future franchisees at Century
21, Coldwell Banker and ERA.
(E) Excludes a charge of $4 million related to the acquisition and integration
of Avis Group Holdings, Inc. ("Avis") and includes $5 million of interest
expense related to debt used in the acquisition of Avis.
(F) Excludes (i) a net gain of $435 million related to the dispositions of
businesses and (ii) a credit of $14 million to reflect an adjustment to
the settlement charge recorded in the fourth quarter of 1998 for the
PRIDES class action litigation primarily related to Rights that expired
unexercised. Such amounts were partially offset by charges of (i) $85
million incurred in connection with the creation of Travel Portal, Inc., a
company that was created to pursue the development of an online travel
business, (ii) $25 million for investigation-related costs, (iii) $7
million related to a contribution to the Cendant Charitable Foundation and
(iv) $4 million related to the acquisition and integration of Avis.
(G) Excludes $4 million of losses related to the dispositions of businesses.
(H) Excludes a non-cash credit of $41 million in connection with a change to
the original estimate of the number of Rights to be issued in connection
with the PRIDES settlement resulting from unclaimed and uncontested
Rights. Such credit was partially offset by (i) $9 million of losses
related to the dispositions of businesses and (ii) $3 million of
investigation-related costs.
TABLE 4
CENDANT CORPORATION AND SUBSIDIARIES
2000 REVENUES AND ADJUSTED EBITDA BY SEGMENT (A)
(DOLLARS IN MILLIONS)
YEAR ENDED DECEMBER 31, 2000
REVENUES
---------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year
------- ------- ------- ------- ---------
Real Estate Services $ 289 $ 377 $ 419 $ 376 $ 1,461
Hospitality 242 257 278 236 1,013
Vehicle Services 137 135 146 150 568
Financial Services 194 153 148 143 638
------- ------- ------- ------- -------
Total Reportable Segments 862 922 991 905 3,680
Corporate and Other (B) 83 51 53 63 250
------- ------- ------- ------- -------
Total Company $ 945 $ 973 $ 1,044 $ 968 $ 3,930
======= ======= ======= ======= =======
ADJUSTED EBITDA
---------------------------------------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year
------- ------- ------- ------- ---------
Real Estate Services $ 114 $ 193 $ 242 $ 203 $ 752
Hospitality 91 103 115 85 394
Vehicle Services 72 67 81 86 306
Financial Services 82 42 42 34 200
------- ------- ------- ------- -------
Total Reportable Segments 359 405 480 408 1,652
Corporate and Other (C) 1 (45) (36) (29) (109)
------- ------- ------- ------- -------
Total Company $ 360 $ 360 $ 444 $ 379 $ 1,543
======= ======= ======= ======= =======
- ----------
(A) In connection with significant acquisitions and dispositions of businesses
completed during 2001, the Company realigned the operations and management
of certain of its businesses. Accordingly, the Company's segment reporting
structure now encompasses the following four reportable segments: Real
Estate Services, Hospitality, Vehicle Services and Financial Services.
Amounts are presented herein as if the 2001 segment reporting structure
was applicable to 2000.
(B) Includes Move.com Group revenues of $11 million, $15 million, $15
million, $18 million and $59 million for the first, second, third and
fourth quarters and for the full year, respectively.
(C) Includes Move.com Group Adjusted EBITDA losses of $26 million, $28
million, $20 million, $20 million and $94 million for the first,
second, third and fourth quarters and for the full year, respectively.
TABLE 5
CENDANT CORPORATION AND SUBSIDIARIES
SEGMENT REVENUE DRIVER ANALYSIS
(REVENUE DOLLARS IN THOUSANDS)
THREE MONTHS ENDED MARCH 31,
----------------------------------------
2001 2000 % CHANGE
---------- ---------- ----------
REAL ESTATE SERVICES SEGMENT
REAL ESTATE
Closed Sides - Domestic (000's) 359,561 372,403 (3%)
Average Price $ 171,865 $ 162,908 5%
Royalty and Marketing Revenue $ 103,370 $ 103,843 --
Total Revenue $ 117,849 $ 120,744 (2%)
RELOCATION
Service Based Revenue (Referrals,
Outsourcing, etc.) $ 61,174 $ 53,606 14%
Asset Based Revenue (Corporate and
Government Home Sale Closings and Financial Income) $ 41,916 $ 37,626 11%
Total Revenue $ 103,090 $ 91,232 13%
MORTGAGE
Production Loans Sold (millions) $ 5,916 $ 3,713 59%
Production Revenue $ 87,153 $ 53,279 64%
Average Servicing Loan Portfolio (millions) $ 83,275 $ 51,955 60%
Servicing Revenue $ 31,403 $ 23,444 34%
Total Revenue $ 118,823 $ 76,903 55%
HOSPITALITY SEGMENT
LODGING
RevPar ($) $ 24.17 $ 24.12 --
Weighted Average Rooms Available 508,685 501,160 2%
Royalty, Marketing and Reservation Revenue $ 84,484 $ 83,494 1%
Total Revenue $ 106,809 $ 105,643 1%
RCI
Average Subscriptions 2,562,682 2,336,574 10%
Number of Timeshare Exchanges 506,590 468,692 8%
Total Revenue $ 127,005 $ 115,516 10%
VEHICLE SERVICES SEGMENT (A)
CAR RENTAL
Rental Days (000's) 5,395 n/a n/a
Time and Mileage Revenue per Day $ 39.36 n/a n/a
Total Revenue $ 251,028 n/a n/a
FLEET
Average Fleet (Leased) 311,907 n/a n/a
Average Number of Cards (000's) 3,554 n/a n/a
Total Revenue $ 128,377 n/a n/a
FINANCIAL SERVICES SEGMENT
Insurance/Wholesale-related Revenue $ 143,313 $ 144,551 (1%)
Other Revenue $ 59,959 $ 49,538 21%
Total Revenue $ 203,272 $ 194,089 5%
- ----------
(A) On March 1, 2001 the Company acquired the remaining shares of Avis that
were not owned by the Company.
TABLE 6
CENDANT CORPORATION AND SUBSIDIARIES
2000 SEGMENT REVENUE DRIVER ANALYSIS
(REVENUE DOLLARS IN THOUSANDS)
THREE MONTHS ENDED
-------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31,
2000 2000 2000 2000
---------- ---------- ---------- ----------
REAL ESTATE SERVICES SEGMENT
REAL ESTATE
Closed Sides - Domestic (000's) 372,403 503,921 518,652 465,072
Average Price $ 162,908 $ 172,594 $ 171,856 $ 172,061
Royalty and Marketing Revenue $ 103,843 $ 144,092 $ 145,838 $ 129,682
Total Revenue $ 120,744 $ 165,683 $ 161,945 $ 144,306
RELOCATION
Service Based Revenue (Referrals,
Outsourcing, etc.) $ 53,606 $ 66,803 $ 77,085 $ 70,046
Asset Based Revenue (Corporate and
Government Home Sale Closings and Financial Income) $ 37,626 $ 47,631 $ 49,583 $ 45,756
Total Revenue $ 91,232 $ 114,434 $ 126,668 $ 115,802
MORTGAGE
Production Loans Sold (millions) $ 3,713 $ 4,746 $ 6,754 $ 5,883
Production Revenue $ 53,279 $ 73,714 $ 107,798 $ 78,014
Average Servicing Loan Portfolio (millions) $ 51,955 $ 58,264 $ 64,298 $ 69,052
Servicing Revenue $ 23,444 $ 23,347 $ 24,355 $ 38,558
Total Revenue $ 76,903 $ 97,241 $ 132,330 $ 116,749
HOSPITALITY SEGMENT
LODGING
RevPar ($) $ 24.12 $ 30.33 $ 35.17 $ 25.33
Weighted Average Rooms Available 501,160 501,929 504,648 506,240
Royalty, Marketing and Reservation Revenue $ 83,494 $ 106,397 $ 123,738 $ 89,240
Total Revenue $ 105,643 $ 129,899 $ 147,113 $ 110,659
RCI
Average Subscriptions 2,336,574 2,341,576 2,362,479 2,377,862
Number of Timeshare Exchanges 468,692 360,968 386,451 355,537
Total Revenue $ 115,516 $ 103,311 $ 107,697 $ 106,410
FINANCIAL SERVICES SEGMENT
Insurance/Wholesale-related Revenue $ 144,551 $ 145,386 $ 144,921 $ 139,609
Other Revenue $ 49,538 $ 7,335 $ 3,040 $ 3,141
Total Revenue $ 194,089 $ 152,721 $ 147,961 $ 142,750
TABLE 7
CENDANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN BILLIONS)
MARCH 31, DECEMBER 31,
2001 2000
--------- ------------
ASSETS
Current assets
Cash and cash equivalents $ 2.2 $ 1.0
Other current assets 2.4 1.4
----- -----
Total current assets 4.6 2.4
Property and equipment, net 1.4 1.3
Goodwill, net 4.8 3.0
Other assets* 6.0 4.9
----- -----
Total assets exclusive of assets under programs 16.8 11.6
Assets under management and mortgage programs 10.2 2.9
----- -----
TOTAL ASSETS $27.0 $14.5
===== =====
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current liabilities $ 2.7 $ 1.6
Net liabilities of discontinued operations 0.4 0.3
----- -----
Total current liabilities 3.1 1.9
Long-term debt 4.2 1.9
Stockholder litigation settlement 2.9 2.9
Other noncurrent liabilities 0.6 0.5
----- -----
Total liabilities exclusive of liabilities under programs 10.8 7.2
Liabilities under management and mortgage programs 10.5 2.5
Mandatorily redeemable preferred securities issued by subsidiaries 0.4 2.1
Total stockholders' equity 5.3 2.7
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $27.0 $14.5
===== =====
- ----------
* Includes stockholder litigation settlement trust of $607 million.