Exhibit 12.1
CENDANT CORPORATION
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividend
PRO FORMA
HISTORICAL --------------------------
------------------------------------------------------- PRIOR TO THE GIVING EFFECT
FOR THE YEAR ENDED PROPOSED TO THE
------------------------------------------------------- CENDANT MERGER CENDANT MERGER
1992 1993 1994 1995 1996 1996 1996
---------- --------- --------- ---------- ------------ -------------- --------------
Income before income taxes,
and extraordinary loss......... $236,949 $365,930 $464,332 $503,332 $ 713,670 $ 797,003 $ 784,165
Plus: Fixed charges............. 239,343 217,431 238,610 295,214 345,421 370,515 471,225
Less: Capitalized interest...... -- (440) (246) -- (560) (560) (560)
Less: Preferred stock dividend.. -- -- -- -- -- -- (6,875)
---------- --------- ------- -------- ------------ ------------ ------------
Earnings available to cover
fixed charges and preferred
stock dividends................ $ 476,292 $582,921 $702,696 $798,546 $1,058,531 $1,166,958 $1,247,955
========== ========= ======== ========= ============ ============ ===============
Fixed charges (1):
Interest including amortization
of deferred loan costs......... $225,590 $198,847 $219,815 $273,174 $ 317,127 339,892 $ 430,671
Capitalized interest............ -- 440 246 -- 560 560 560
Interest portion of rental
payment........................ 13,753 18,144 18,549 22,040 27,734 30,063 33,119
Preferred stock dividend........ -- -- -- -- -- -- 6,875
---------- ---------- -------- -------- ------------ ------------ ---------------
Total combined fixed
charges and preferred
stock dividend............ $239,343 $217,431 $238,610 $295,214 $ 345,421 $ 370,515 $ 471,225
========== ========= ======== ========= ============ ========== ===============
Ratio of earnings to combined
fixed charges and preferred
stock dividend (1)............. 1.99x 2.68x 2.94x 2.70x 3.06x 3.15x 2.65x
========== ========= ========= ======== ============ ========== ===============
HISTORICAL PRO FORMA
------------ --------------
GIVING EFFECT
TO THE
CENDANT MERGER
--------------
NINE MONTHS ENDED
SEPTEMBER 30, 1997
----------------------------
Income before income taxes,
and extraordinary loss......... $ 747,230 $ 758,675
Plus: Fixed charges............. 300,697 374,063
Less: Capitalized interest...... -- --
Less: Preferred stock dividend.. -- (5,156)
------------ ------------
Earnings available to cover
fixed charges and preferred
stock dividends................ $1,047,927 $1,127,582
============= ============
Fixed charges (1):
Interest including amortization
of deferred loan costs......... $ 277,184 $ 341,356
Capitalized interest............ -- --
Interest portion of rental
payment........................ 23,513 27,551
Preferred stock dividend........ -- 5,156
------------ ------------
Total combined fixed
charges and preferred
stock dividend............ $ 300,697 $ 374,063
============= ============
Ratio of earnings to combined
fixed charges and preferred
stock dividend (1)............. 3.48x 3.01x
============= ============
(1) The ratio of earnings to combined fixed charges and preferred stock
dividend is computed by dividing income before income taxes and
extraordinary items plus fixed charges, less capitalized interest by
combined fixed charges and preferred stock dividends. Fixed charges consist
of interest expense on all indebtedness (including amortization of deferred
financing costs) and the portion of operating lease rental expense that is
representative of the interest factor (deemed to be one-third of operating
lease rentals). Preferred stock dividends represents dividends at the
annual rate of 3.125% per share of Cendant Series A Preferred Stock.