[CENDANT LOGO] CENDANT REPORTS SECOND QUARTER 2000 RESULTS Adjusted EPS from Continuing Operations, Excluding Move.com, Rose 13% to $0.26 in 2000 vs. $0.23 in 1999 Reported EPS from Continuing Operations was $0.24 in 2000 vs. $1.06 in 1999, Including $0.86 Gain in 1999 from Disposition of Businesses NEW YORK, NY, JULY 19, 2000 - Cendant Corporation (NYSE: CD) today reported second quarter and first half 2000 results. "We had a good quarter with our earnings per share up 13% and year-to-date earnings per share up 18% compared with last year," said Cendant Chairman, President and Chief Executive Officer, Henry R. Silverman. "We achieved these results through the solid performance of our franchise brands, the improved financial results in our membership businesses, and several initiatives to control costs. Our management remains focused on increasing shareholder value and to that end, we continue to pursue organic growth of our businesses, implementation of our convergence strategy to apply our off-line assets to the online world, and acquisitions and joint ventures that leverage our core competencies." SECOND QUARTER DIVISION RESULTS The underlying discussion of each division's operating results focuses on revenues and EBITDA. EBITDA is defined as earnings before non-operating interest, income taxes, depreciation, amortization and minority interest. Adjusted results exclude net gains and losses on disposition of businesses and other items that are of a non-recurring or unusual nature. (See Table 4 for Revenues and Adjusted EBITDA by Segment and Table 5 for Segment Revenue Driver Analysis.) All dollar amounts are in millions. TRAVEL DIVISION Travel 2000 1999 % change - ------------------------------------------------------------------------------ Revenues $294 $290 1% - ------------------------------------------------------------------------------ Adjusted EBITDA $145 $146 (1%) - ------------------------------------------------------------------------------ Adjusted EBITDA Margin 49% 50% - ------------------------------------------------------------------------------ Franchise fees rose primarily as a result of room growth in Lodging. Timeshare subscription revenues also increased, primarily as a result of increased memberships. Results include reductions due to the timing and allocation of certain revenues and expenses. Excluding these reductions, revenues increased 2% and Adjusted EBITDA increased 4% in second quarter 2000 over second quarter 1999. 1 REAL ESTATE DIVISION Real Estate Franchise 2000 1999 % change - ---------------------------------------------------------------------------- Revenues $166 $159 4% - ---------------------------------------------------------------------------- EBITDA $125 $114 10% - ---------------------------------------------------------------------------- EBITDA Margin 75% 72% - ---------------------------------------------------------------------------- Revenues increased as a result of higher royalty fees supported by unit growth and an increase in the average price of homes sold by our franchisees. Through our continued franchise sales efforts, we have increased our market share. Second quarter 2000 includes a $10 million gain on a payment from NRT, our largest real estate franchisee, pursuant to its now completed recapitalization plan. Since there was an identical gain in second quarter 1999, there was no impact on EBITDA growth year over year. Excluding timing differences in the revenues recorded for our real estate brand national advertising funds that have no impact on EBITDA, revenues for the segment increased 9% and the EBITDA margin remained constant at 75%. Relocation 2000 1999 % change - -------------------------------------------------------------------------- Revenues $114 $107 7% - -------------------------------------------------------------------------- EBITDA $38 $34 12% - -------------------------------------------------------------------------- EBITDA Margin 33% 32% - -------------------------------------------------------------------------- Revenues and EBITDA increased primarily from additional sales of outsourcing services to existing customers, higher international services fees from new and existing clients and other ancillary service fees. These results reflect a continuing trend from asset-based to service-based fees. During the second quarter, we signed 30 new accounts and expanded 31 existing business relationships. A gain recognized in the second quarter of 1999 on the sale of a minority interest in an insurance subsidiary partially offset revenue and EBITDA growth. Excluding this gain, revenues increased 14% and EBITDA increased 41% in second quarter 2000 over 1999. Mortgage 2000 1999 % change - ------------------------------------------------------------------------ Revenues $97 $107 ( 9%) - ------------------------------------------------------------------------ EBITDA $30 $50 (40%) - ------------------------------------------------------------------------ EBITDA Margin 31% 47% - ------------------------------------------------------------------------ Revenues decreased due to a reduction in origination revenues. Total mortgage closings of $5.9 billion consisted of $5.5 billion in purchase mortgages and $400 million in refinance mortgages. Total closings declined by $1.9 billion compared with second quarter 1999 primarily because of a reduction in refinance volume from the unprecedented refinancing activity in 1999. Mortgage closings from our Log In - Move In Internet business continued to grow and were $244 million in second quarter 2000 compared with $64 million in second quarter 1999. EBITDA margin decreased principally as a result of the reduced volume of refinancings and increased spending for technology. During the quarter, we entered into outsourcing agreements with eight major organizations to provide mortgage origination services, including AOL for its Member Perks program. As previously disclosed, we expect full year 2000 EBITDA in the mortgage segment to be slightly lower than 1999. 2 DIRECT MARKETING DIVISION Individual Membership 2000 1999 % change - -------------------------------------------------------------------------------- Revenues $188 $246 (24%) - -------------------------------------------------------------------------------- Adjusted EBITDA $45 $17 165% - -------------------------------------------------------------------------------- Adjusted EBITDA Margin 24% 7% - -------------------------------------------------------------------------------- While Individual Membership revenues decreased on a reported basis, revenues were relatively flat and Adjusted EBITDA increased 80% on a comparable basis, excluding the operations of disposed businesses. Adjusted EBITDA increased principally due to our focus on profitability by carefully targeting marketing efforts and reducing solicitation spending. Insurance/Wholesale 2000 1999 % change - -------------------------------------------------------------------------------- Revenues $145 $143 1% - -------------------------------------------------------------------------------- EBITDA $42 $50 (16%) - -------------------------------------------------------------------------------- EBITDA Margin 29% 35% - -------------------------------------------------------------------------------- Insurance/Wholesale revenues rose primarily as a result of international expansion. EBITDA decreased primarily due to costs associated with the consolidation of domestic operations from California to Tennessee. For the first six months, EBITDA increased marginally over last year and we expect that full year results will continue to show improvement over 1999. DIVERSIFIED SERVICES DIVISION Diversified Services 2000 1999 % change - ----------------------------------------------------------------------------- Revenues $118 $230 (49%) - ----------------------------------------------------------------------------- Adjusted EBITDA $8 $12 (33%) - ----------------------------------------------------------------------------- Adjusted EBITDA Margin 7% 5% - ----------------------------------------------------------------------------- Revenues decreased as a result of the 1999 business dispositions, including Global Refund Group, Entertainment Publications, and Green Flag Group. The absence of these divested businesses from second quarter 2000 operations resulted in a reduction in revenues of $113 million with no impact on Adjusted EBITDA. Adjusted EBITDA also includes the costs incurred to pursue Internet initiatives through Cendant Internet Group. MOVE.COM GROUP Move.com Group 2000 1999 - -------------------------------------------------------------- Revenues $15 $3 - -------------------------------------------------------------- EBITDA ($29) ($6) - -------------------------------------------------------------- Move.com Group revenues increased fivefold because of higher sponsorship revenues made possible by the first quarter 2000 launch of our Internet real estate services portal, move.com. Results reflect increased investment in marketing and development of the move.com portal. The Company expects Move.com Group will continue to report losses for the foreseeable future resulting from continuing investment in the growth of the business. 3 EPS ITEMS Cendant Corporation has two classes of common stock: CD stock and Move.com stock. CD stock is intended to track the performance of Cendant Group and Move.com stock is intended to track the performance of Move.com Group. Beginning with second quarter 2000, Cendant reported EPS on the two class method. Reported EPS for CD stock includes Cendant Group operations and a majority interest in Move.com Group. Reported EPS for Move.com stock includes Move.com Group operations less Cendant Group's retained interest in Move.com Group. The following items are reflected in second quarter 1999 reported results: o A gain of $0.86 per share after tax on the dispositions of the Company's Fleet business segment and certain other non-strategic businesses o A charge of $0.02 per share after tax to fund a contribution to a trust for the transition of the Company's lodging franchisees to a company-sponsored property management system BALANCE SHEET AND CASH FLOW ITEMS o In second quarter 2000, we purchased approximately 7 million shares of CD stock under a program initiated in October 1998. Since the inception of the program, we have reduced shares outstanding by 21%. The Company has $500 million remaining under its authorized share repurchase program. o As of June 30, 2000, we had approximately $2.4 billion of debt, available credit of $1.75 billion, and $1.2 billion of cash and cash equivalents on hand. The net debt to total capital ratio was 22%. o Annualized return on common equity measured on year-to-date adjusted net income was 30%. CONFERENCE CALL Cendant will host a conference call to discuss second quarter results on Thursday, July 20, 2000 at 11:00 a.m. Eastern Time. Investors may access this call live at www.Cendant.com or dial in to 719-457-2621. A replay will be available beginning at 2:00 p.m. Eastern Time on July 20 until 8:00 p.m. on July 24, 2000 at www.Cendant.com or through the replay dial-in number: (719) 457-0820, access code: 286781. 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. The Company cautions that these statements are not guarantees of future performance. They involve a number of risks and uncertainties that are difficult to predict including the outcome of litigation. 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 the Company's Form 10-K for the year ended December 31, 1999, including completion of the settlement of the class action litigation. 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, 4 and tax preparation services. The Company's real estate-related operations also include Move.com Group, Cendant's relocation, real estate and home-related services portal on the Internet. 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. In addition, Cendant Internet Group is pursuing a convergence strategy for the Company's off-line and online businesses. 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 calling 877-4INFO-CD (877-446-3623) or by visiting the Company's Web site at www.Cendant.com. Media Contact: Investor Contacts: Elliot Bloom Denise Gillen Sam Levenson 212-413-1832 212-413-1833 212-413-1834 5 TABLE 1 CENDANT CORPORATION AND SUBSIDIARIES FINANCIAL RESULTS OF OPERATIONS (IN MILLIONS) THREE MONTHS ENDED JUNE 30, 2000 -------------------------------- AS AS DISPOSED MOVE.COM COMPARABLE REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B) GROUP (C) BASIS (D) -------- ----------- -------- -------------- --------- --------- Revenues $ 1,137 $ - $ 1,137 $ 1 $ 15 $ 1,121 EBITDA (A) 403 1(E) 404 - (29) 433 THREE MONTHS ENDED JUNE 30, 1999 -------------------------------- AS AS DISPOSED MOVE.COM COMPARABLE REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B) GROUP (C) BASIS (D) -------- ----------- -------- -------------- --------- --------- Revenues $ 1,391 $ - $ 1,391 $ 282 $ 3 $ 1,106 EBITDA (A) 1,179 (721)(F) 458 39 (6) 425 SIX MONTHS ENDED JUNE 30, 2000 ------------------------------ AS AS DISPOSED MOVE.COM COMPARABLE REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B) GROUP (C) BASIS (D) -------- ----------- -------- -------------- --------- --------- Revenues $ 2,265 $ - $ 2,265 $ 4 $ 26 $ 2,235 EBITDA (A) 733 83(G) 816 - (55) 871 SIX MONTHS ENDED JUNE 30, 1999 ------------------------------ AS AS DISPOSED MOVE.COM COMPARABLE REPORTED ADJUSTMENTS ADJUSTED BUSINESSES (B) GROUP (C) BASIS (D) -------- ----------- -------- -------------- --------- --------- Revenues $ 2,708 $ - $ 2,708 $ 540 $ 6 $ 2,162 EBITDA (A) 1,604 (713) (H) 891 74 (6) 823 - ----------- (A) Defined as earnings before non-operating interest, income taxes, depreciation, amortization and minority interest. (B) Reflects the operating results of businesses which were disposed. (C) The Move.com Group represents a group of businesses which provide a broad range of quality relocation, real estate and home-related products and services through its flagship portal site, move.com, and through the move.com network. (D) Comparable Basis reflects the consolidated As Adjusted results of operations less the operating results of the Disposed Businesses and the Move.com Group. (E) Includes $5 million ($3 million, after tax) of investigation-related costs, partially offset by $4 million ($2 million, after tax) of gains related to the dispositions of businesses. (F) Includes a net gain of $750 million ($709 million, after tax or $.86 per diluted share) related to the dispositions of businesses. Such gain was partially offset by charges of (i) $23 million ($15 million, after tax or $.02 per diluted share) in connection with the transition of the Company's lodging franchisees to a Company sponsored property management system and (ii) $6 million ($4 million, after tax or $.01 per diluted share) for investigation-related costs. (G) Includes charges of (i) $106 million ($70 million, after tax or $.09 per diluted share) in connection with restructuring and other initiatives focused principally on improving the overall level of organizational efficiency, consolidating and rationalizing existing processes, reducing cost structures in the Company's underlying businesses and other related efforts, (ii) $10 million ($6 million, after tax or $.01 per diluted share) for net losses related to the dispositions of businesses and (iii) $8 million ($5 million, after tax or $.01 per diluted share) for investigation-related costs. Such charges were partially offset by a non-cash credit of $41 million ($26 million, after tax or $.03 per diluted share) 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. (H) Includes a net gain of $750 million ($709 million, after tax or $.85 per diluted share) related to the dispositions of businesses and a $1 million unusual credit recorded in connection with the sale of a Company subsidiary, partially offset by charges of (i) $23 million ($15 million, after tax or $.02 per diluted share) in connection with the transition of the Company's lodging franchisees to a Company sponsored property management system, (ii) $8 million ($5 million, after tax or $.01 per diluted share) for investigation-related costs and (iii) $7 million ($4 million, after tax) related to the termination of a proposed acquisition. 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 SIX MONTHS ENDED JUNE 30, 2000 JUNE 30, 2000 ------------------------ ------------------------ AS AS AS AS REPORTED ADJUSTED REPORTED ADJUSTED -------- -------- -------- -------- CD COMMON STOCK INCOME PER SHARE Income (loss) from continuing operations: Cendant Group $ 192 $ 193 $ 335 $ 389 Cendant Group's retained interest in Move.com Group (15) (15) (32) (31) ------ ------ ------ ------ Income from continuing operations - Basic 177 178 303 358 ====== ====== ====== ====== Convertible debt interest, net of tax 3 3 5 5 ------ ------ ------ ------ Income from continuing operations - Diluted $ 180 $ 181 $ 308 $ 363 ====== ====== ====== ====== Net income (loss): Cendant Group $ 192 $ 193 $ 277 $ 389 Cendant Group's retained interest in Move.com Group (15) (15) (32) (31) ------ ------ ------ ------ Net income - Basic 177 178 245 358 Convertible debt interest, net of tax 3 3 5 5 ------ ------ ------ ------ Net income - Diluted $ 180 $ 181 $ 250 $ 363 Weighted average shares outstanding: Basic 722 722 720 720 Diluted 762 762 765 765 Income per share: Basic Income from continuing operations $ 0.25 $ 0.25 $ 0.42 $ 0.50 Net income 0.25 0.25 0.34 0.50 Diluted Income from continuing operations 0.24 0.24 0.40 0.48 Net income 0.24 0.24 0.33 0.48 MOVE.COM COMMON STOCK LOSS PER SHARE Net loss: Move.com Group $ (17) $ (17) $ (34) $ (33) Less: Cendant Group's retained interest in Move.com Group (15) (15) (32) (31) ------ ------ ------ ------ Net loss - Basic and Diluted $ (2) $ (2) $ (2) $ (2) ====== ====== ====== ====== Weighted average shares outstanding: Basic and Diluted 4 4 4(B) 4(B) Loss per share: Basic and Diluted (A) $(0.67) $(0.67) $(0.67) $(0.67) - ---------- (A) In thousands, the net loss attributable to the Move.com common stock for the three and six months ended June 30, 2000 was $2,367 and the weighted average shares outstanding for three and six months ended June 30, 2000 was 3,524. (B) Weighted average shares outstanding for the six month period was calculated from the date of issuance of the Move.com common stock (March 31, 2000) through June 30, 2000. TABLE 3 CENDANT CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (In millions, except per share data) THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ---------------------- ---------------------- 2000 1999 2000 1999 ------- ------- ------- ------- Revenues Membership and service fees, net $ 1,124 $ 1,347 $ 2,190 $ 2,600 Fleet leasing, net -- 11 -- 30 Other 13 33 75 78 ------- ------- ------- ------- Net revenues 1,137 1,391 2,265 2,708 EXPENSES Operating 361 455 728 912 Marketing and reservation 228 288 444 550 General and administrative 144 190 277 355 Depreciation and amortization 86 97 171 190 Other charges (credits): Restructuring and other unusual charges -- 23 106 22 Litigation settlement and related costs -- -- (41) -- Investigation-related costs 5 6 8 8 Termination of proposed acquisition -- -- -- 7 Interest, net 22 54 47 102 ------- ------- ------- ------- Total expenses 846 1,113 1,740 2,146 ------- ------- ------- ------- Net gain (loss) on dispositions of businesses 4 750 (10) 750 ------- ------- ------- ------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 295 1,028 515 1,312 Provision for income taxes 98 138 176 238 Minority interest, net of tax 22 16 38 31 ------- ------- ------- ------- INCOME FROM CONTINUING OPERATIONS 175 874 301 1,043 Gain (loss) on sale of discontinued operations, net of tax -- (12) -- 181 ------- ------- ------- ------- INCOME BEFORE EXTRAORDINARY LOSS AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE 175 862 301 1,224 Extraordinary loss, net of tax -- -- (2) -- ------- ------- ------- ------- INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 175 862 299 1,224 Cumulative effect of accounting change, net of tax -- -- (56) -- ------- ------- ------- ------- NET INCOME $ 175 $ 862 $ 243 $ 1,224 ======= ======= ======= ======= CD COMMON STOCK INCOME PER SHARE BASIC Income from continuing operations $ 0.25 $ 1.14 $ 0.42 $ 1.33 Net income 0.25 1.12 0.34 1.56 DILUTED Income from continuing operations 0.24 1.06 0.40 1.25 Net income 0.24 1.05 0.33 1.47 WEIGHTED AVERAGE SHARES Basic 722 770 720 785 Diluted 762 824 765 839 MOVE.COM COMMON STOCK LOSS PER SHARE BASIC AND DILUTED Net loss $ (0.67) $ (0.67) WEIGHTED AVERAGE SHARES Basic and Diluted 4 4 TABLE 4 CENDANT CORPORATION AND SUBSIDIARIES Revenues and Adjusted EBITDA by Segment (Dollars in millions) THREE MONTHS ENDED JUNE 30, --------------------------- REVENUES ADJUSTED EBITDA (A) ---------------------------------- ------------------------------------------ 2000 1999 % CHANGE 2000 1999 % CHANGE ---------------------------------- ------------------------------------------ Travel $ 294 $ 290 1% $ 145 $ 146(D) (1%) Real Estate Franchise 166 159 4% 125 114 10% Relocation 114 107 7% 38 34 12% Mortgage 97 107 (9%) 30 50 (40%) Individual Membership 188 246 (24%) 45 17(E) 165% Insurance/Wholesale 145 143 1% 42 50 (16%) Move.com Group 15 3 * (29) (6) * Diversified Services 118 230 (49%) 8(C) 12(F) (33%) Fleet -- 106 * -- 41 * ------ ------ ------ ------ Total $1,137 $1,391 $ 404 $ 458 ====== ====== ====== ====== SIX MONTHS ENDED JUNE 30, REVENUES ADJUSTED EBITDA (A) ---------------------------------- ------------------------------------------ 2000 1999 % CHANGE 2000 1999 % CHANGE ---------------------------------- ------------------------------------------ Travel $ 565 $ 562 1% $ 271(G) $ 291(D) (7%) Real Estate Franchise 286 256 12% 209 185 13% Relocation 206 198 4% 56 52 8% Mortgage 174 200 (13%) 42 94 (55%) Individual Membership 393 487 (19%) 96 29(E) 231% Insurance/Wholesale 290 283 2% 90 88 2% Move.com Group 26 6 * (55) (6) * Diversified Services 325 509 (36%) 107(H) 77(I) 39% Fleet -- 207 * -- 81 * ------ ------ ------ ------ Total $2,265 $2,708 $ 816 $ 891 ====== ====== ====== ====== - ------------- * Not meaningful. (A) Defined as earnings before non-operating interest, income taxes, depreciation, amortization and minority interest, 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 $106 million in connection with restructuring and other initiatives focused principally on improving the overall level of organizational efficiency, consolidating and rationalizing existing processes, reducing cost structures in the Company's underlying businesses and other related efforts ($60 million, $1 million, $1 million, $23 million, $9 million, $1 million and $11 million of charges were recorded within the Travel, Relocation, Mortgage, Individual Membership, Insurance/Wholesale, Move.com Group and Diversified Services segments, respectively). (C) Excludes $5 million of investigation-related costs, partially offset by $4 million of gains related to the dispositions of businesses. (D) Excludes $23 million in connection with the transition of the Company's lodging franchisees to a Company sponsored property management system. (E) Excludes $34 million of net gains related to the dispositions of businesses. (F) Excludes $716 million of net gains related to the dispositions of businesses, partially offset by $6 million of investigation-related costs. (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 $6 million of losses related to the dispositions of businesses and $8 million of investigation-related costs. (I) Excludes $716 million of net gains related to the dispositions of businesses and a $1 million unusual credit recorded in connection with the sale of a Company subsidiary, partially offset by $8 million of investigation-related costs and a $7 million charge related to the termination of a proposed acquisition. TABLE 5 CENDANT CORPORATION AND SUBSIDIARIES SEGMENT REVENUE DRIVER ANALYSIS (REVENUE DOLLARS AND MORTGAGE SEGMENT VOLUME IN MILLIONS) THREE MONTHS ENDED JUNE 30, ------------------------------------------- 2000 1999 % CHANGE ----------- ---------- -------- TRAVEL SEGMENT Domestic Rooms (A) Month End Actual Rooms .............. 513,703 499,484 3% Weighted Average Rooms Available .... 501,929 486,077 3% Franchise Fee per Weighted Average Room $ 228.32 $ 232.88 (2%) ----------- ----------- Total Franchise Fees .................. $ 115 $ 113 2% Car Rental Days ....................... 15,851,719 15,315,889 3% Franchise Fee per Rental Day .......... $ 2.83 $ 2.92 (3%) ----------- ----------- Total Franchise Fees .................. $ 45 $ 45 -- Sub-Total Franchise Fees ............ $ 160 $ 158 1% Number of Timeshare Exchanges (B) ..... 360,968 390,809 Annualized Number of Exchanges ........ 1,443,872 1,563,236 Average Subscriptions ................. 2,341,576 2,299,123 ----------- ----------- Total Exchanges and Subscriptions ..... 3,785,448 3,862,359 Average Fee ........................... $ 23.01 $ 22.06 4% ----------- ----------- Total Exchange/Subscription Fees (C) .. $ 87 $ 85 2% ----------- ----------- Other Revenue ......................... $ 47 $ 47 -- ----------- ----------- TOTAL TRAVEL REVENUE .................. $ 294 $ 290 1% =========== =========== REAL ESTATE FRANCHISE SEGMENT Closed Sides - Domestic ............... 503,921 524,777 (4%) Average Price ......................... $ 172,594 $ 151,430 14% Adjusted Royalty Rate ................. 0.16% 0.15% 7% ----------- ----------- Total Royalties ....................... 137 122 12% Other ................................. 29 37 (22%) ----------- ----------- Total Revenue ......................... $ 166 $ 159 4% =========== =========== MORTGAGE SEGMENT Production Loan Closings (D) .......... $ 5,916 $ 7,816 (24%) Average Servicing Loan Portfolio ...... $ 58,273 $ 43,751 33% - ---------- (A) Adjusted retrospectively to reflect improved room count information not previously available as a result of the "Power Up" technology initiative within the lodging business unit. (B) Adjusted retrospectively to reflect additional categories of confirmation modifications. (C) Second Quarter 2000 includes $2 million reduction as a result of the implementation of SAB 101 and its impact on the timing of subscription revenue recognition. (D) The $1.9 billion decrease in production loan closings is comprised of a $1.4 billion reduction in mortgage refinancing volume and a $500 million decrease in closings for home purchases. TABLE 6 CENDANT CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (IN BILLIONS) JUNE 30, DECEMBER 31, 2000 1999 --------- --------- ASSETS Current assets Cash and cash equivalents $ 1.2 $ 1.2 Other current assets 3.1 3.4 --------- --------- Total current assets 4.3 4.6 Property and equipment, net 1.3 1.3 Goodwill, net 3.2 3.3 Other assets 3.3 3.2 --------- --------- Total assets exclusive of assets under programs 12.1 12.4 Assets under management and mortgage programs 3.0 2.7 --------- --------- TOTAL ASSETS $ 15.1 $ 15.1 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Stockholder litigation settlement and related costs $ 2.9 $ 2.9 Other current liabilities 2.1 2.7 --------- --------- Total current liabilities 5.0 5.6 Long-term debt 2.1 2.4 Other non-current liabilities 0.7 0.8 --------- --------- Total liabilities exclusive of liabilities under programs 7.8 8.8 Liabilities under management and mortgage programs 2.7 2.6 Mandatorily redeemable preferred securities issued by subsidiaries 2.1 1.5 Total stockholders' equity 2.5 2.2 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 15.1 $ 15.1 ========== ========== TABLE 7 CENDANT CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (IN MILLIONS) SIX MONTHS ENDED JUNE 30, ------------------------------ 2000 1999 ---- ---- OPERATING ACTIVITIES Net cash provided by operating activities exclusive of management and mortgage programs $ 385 $ 339 Net cash provided by (used in) operating activities of management and mortgage programs (214) 895 ---------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 171 1,234 ---------- --------- INVESTING ACTIVITIES Property and equipment additions (115) (130) Net assets acquired (net of cash acquired) and acquisition-related payments (16) (142) Net proceeds from dispositions of businesses 4 2,615 Other, net (79) 30 ---------- --------- Net cash provided by (used in) investing activities exclusive of management and mortgage programs (206) 2,373 ---------- --------- Management and mortgage programs: Repayment on advances on homes under management, net of equity advances 423 30 Additions to mortgage servicing rights, net of proceeds from sale (319) (247) Investment in leases and leased vehicles, net - (773) ---------- --------- 104 (990) ---------- --------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (102) 1,383 ---------- --------- FINANCING ACTIVITIES Principal payments on borrowings (776) (1) Debt financing costs - (6) Issuances of common stock 536 52 Repurchases of common stock (300) (1,342) Proceeds from mandatorily redeemable preferred securities issued by subsidiaries 466 - Other, net (3) - ---------- --------- Net cash used in financing activities exclusive of management and mortgage programs (77) (1,297) ---------- --------- Management and mortgage programs: Proceeds received for debt repayment in connection with fleet segment disposition - 3,017 Proceeds from debt issuance or borrowings 2,009 3,068 Principal payments on borrowings (2,719) (4,655) Net change in short-term borrowings 765 (763) ---------- --------- 55 667 ---------- --------- NET CASH USED IN FINANCING ACTIVITIES (22) (630) ---------- --------- Effect of changes in exchange rates on cash and cash equivalents 23 67 ---------- --------- Net increase in cash and cash equivalents 70 2,054 Cash and cash equivalents, beginning of period 1,164 1,009 ---------- --------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,234 $ 3,063 ========== =========