EXHIBIT 99.1
PRO FORMA FINANCIAL INFORMATION
The following Unaudited Pro Forma Condensed Combined Statement of Operations
for the three months ended March 31, 2001 gives effect to the March 1, 2001
acquisition (the "Acquisition") of Avis Group Holdings, Inc. ("Avis"), which has
been accounted for under the purchase method of accounting. The Unaudited Pro
Forma Condensed Combined Statement of Operations is based on the historical
Consolidated Financial Statements of Cendant Corporation ("Cendant") and Avis
under the assumptions and adjustments set forth in the accompanying explanatory
notes. The Unaudited Pro Forma Condensed Combined Statement of Operations
assumes the Acquisition occurred on January 1, 2001.
Since Avis and Cendant were consolidated as of March 1, 2001, the results of
operations of Avis between January 1, 2001 and February 28, 2001 were combined
with Cendant's results of operations to report the pro forma results of
operations for the three month period ended March 31, 2001. All intercompany
transactions have been eliminated on a pro forma basis. Historically, Avis paid
Cendant for services Cendant provided related to call centers and information
technology and for the use of Cendant trademarks.
The Pro Forma adjustments reflect the disbursement of $33 in cash for each
share of Avis common stock outstanding to Avis stockholders. Cendant made
payments totaling approximately $994 million, including payments to Avis
stockholders ($937 million), and direct expenses related to the transaction
($40 million) inclusive of the net cash obligation related to Avis stock options
settled prior to consummation. The purchase price also includes the fair value
of Cendant options exchanged with certain fully-vested Avis option holders who
elected not to exercise their options as part of the Acquisition. The Pro Forma
Condensed Combined Statement of Operations reflects the purchase price being
funded by $600 million in debt with the remaining amount provided by cash.
In addition, Cendant assumed approximately $7.5 billion of Avis' net debt
($6.8 billion of which relates to vehicle financing).
Management believes that the assumptions used provide a reasonable basis on
which to present the Unaudited Pro Forma Condensed Combined Statement of
Operations. Cendant has completed other acquisitions and dispositions which are
not significant and accordingly have not been included in the accompanying
Unaudited Pro Forma Condensed Combined Statement of Operations. The Unaudited
Pro Forma Condensed Combined Statement of Operations 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 Statement of Operations should be
read in conjunction with the historical Consolidated Financial Statements and
accompanying notes for Cendant and Avis.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2001
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL
HISTORICAL AVIS PURCHASE PRO FORMA
CENDANT JAN 1--FEB 28, 2001 ADJUSTMENTS COMBINED
---------- ------------------- ----------- ---------
REVENUES
Service fees, net $ 893 $ 27 $(34)a $ 886
Vehicle--related 398 594 -- 992
Other 12 20 -- b 32
------ ----- ---- ------
Net revenues 1,303 641 (34) 1,910
EXPENSES
Operating 433 174 (34)a 573
Vehicle depreciation, lease charges and
interest, net 181 284 -- 465
Selling, general and administrative 293 115 -- 408
Other depreciation and amortization 95 23 2 d 120
Other charges--
Restructuring and other unusual charges 186 -- -- 186
Litigation settlement and related costs 11 -- -- 11
Merger--related costs 8 -- -- 8
Non-vehicle interest, net 57 78 1 c 136
------ ----- ---- ------
Total expenses 1,264 674 (31) 1,907
Net gain on disposition of businesses 435 -- -- 435
------ ----- ---- ------
INCOME (LOSS) BEFORE INCOME TAXES, MINORITY
INTEREST AND EQUITY IN HOMESTORE.COM 474 (33) (3) 438
Provision (benefit) for income taxes 189 (10) (2)e 177
Minority interest, net of tax 13 -- -- 13
Losses related to equity in Homestore.com,
net of tax 18 -- -- 18
------ ----- ---- ------
INCOME (LOSS) FROM CONTINUING OPERATIONS $ 254 $ (23) $ (1) $ 230
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CD COMMON STOCK INCOME PER SHARE
INCOME PER SHARE FROM CONTINUING OPERATIONS--
Basic $ 0.29 $ 0.26
Diluted $ 0.28 $ 0.25
WEIGHTED AVERAGE SHARES OUTSTANDING--
Basic 790 790
Diluted 830 830
MOVE.COM COMMON STOCK INCOME PER SHARE
INCOME PER SHARE FROM CONTINUING OPERATIONS--
Basic $10.41 $10.41
Diluted $10.13 $10.13
WEIGHTED AVERAGE SHARES OUTSTANDING--
Basic 2 2
Diluted 3 3
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS.
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2001
(DOLLARS IN MILLIONS)
(a) Elimination of amounts paid by Avis to Cendant for services related to call
centers and information technology and for the use of trademarks.
(b) Elimination of Cendant's earnings attributable to its investment in Avis.
(c) Interest expense on the acquisition financing ($7), net of amortization of
fair value adjustment on acquired debt ($4) and reversal of Avis'
amortization of debt related costs ($2).
(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 and amortization of other
identifiable intangibles resulting from the allocation of purchase price on
a straight-line basis over 20 years.
(e) Income tax effect of the pro forma adjustments and other pro forma
adjustments at an estimated statutory rate of 38.5% (not including
adjustments for non-deductible goodwill).
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