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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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AUGUST 13, 1998 (AUGUST 12, 1998)
(Date of Report (date of earliest event reported))
CENDANT CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 1-10308 06-0918165
(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation or organization) Identification Number)
6 SYLVAN WAY
PARSIPPANY, NEW JERSEY 07054
(Address of principal executive office) (Zip Code)
(973) 428-9700
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year, if applicable)
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ITEM 5. OTHER
Completion of Accounting Investigation. On August 13, 1998, Cendant Corporation
(the "Company") announced that its investigation of accounting irregularities
and errors in the CUC International Inc. ("CUC") businesses was complete. The
Company reported its final calculation of the impact of accounting
irregularities and errors on its 1997, 1996 and 1995 full year results. The
Company will lower 1997 results by $0.28 per share or $392 million pretax. The
net impact of this restatement plus $0.02 of discontinued operations will lower
net income from continuing operations before one-time merger and other unusual
charges to $0.70 per share versus the $1.00 per share previously reported. A
substantial amount of the adjustment had the impact of reducing revenues.
The Compay also announced a $457 million pre-tax adjustment to the charge
associated with the CUC businesses taken on the date of CUC's merger with HFS
Incorporated on December 17, 1997. This will increase 1997 net income by $279
million after-tax or $0.32 per share.
The Company will lower 1996 results by $0.18 per share. Cendant has also
determined that certain one-time merger charges taken by CUC in 1996 should be
reversed and will eliminate $0.02 per share of these charges. 1995 results will
be lowered by $0.14 per share.
Earnings. On August 13, 1998, Cendant Corporation (the "Company") announced
second quarter from continuing operations of $0.23 per share for 1998 versus
$0.16 per share for 1997, an increase of 44%. 1998 results are before $0.02
unusual expenses associated with the resolution of accounting irregularities
plus $0.03 of income from reversal of prior restructuring chages. 1997 results
are before merger charges associated with the acquisition of PHH Corporation.
RAC Motoring Services Acquisition. On August 12, 1998, the Company reported
that the Board of RAC Holdings Limited, the company which indirectly owns RAC
Motoring Services (RACMS), announced that its shareholders overwhelmingly
approved the sale of RACMS to Cendant for approximately $735 million, in cash.
Sale of Hebdo Mag and Plan to Sell Software Business. On August 12, 1998, the
Company announced that it agreed to sell 100% of its Hebdo Mag International
("Hebdo") subsidiary to a company organized by Hebdo management for
approximately 7 million shares of company common stock and $410 million in
cash. The sale of Hebdo is conditioned upon, among other things, the receipt of
certain governmental approvals and financing. The transaction is expected to be
completed in the fourth quarter of 1998.
The Company also announced that it has engaged Credit Suisse First Boston to
analyze strategic alternatives in regard to the potential 100% initial pubic
offering or a third party sale of its entire consumer software business unit.
The information set forth in the press releases attached hereto as Exhibits
99.1, 99.2, 99.3 and 99.4 are incorporated herein by reference in their
entirety.
Segment Information. Reference is made to Exhibit 99.5 for certain financial
information regarding the Company's business segments, which is incorporated
herein by reference in its entirety.
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ITEM 7. EXHIBITS
Exhibit
No. Description
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99.1 Press Release: Cendant Completes Accounting Investigation, dated August 13, 1998.
99.2 Press Release: Cendant Announces Second Quarter Earnings, dated August 13, 1998.
99.3 Press Release: Shareholders Approve Sale of RAC Motoring Services to Cendant, dated
August 12, 1998.
99.4 Press Release: Cendant Corporation to Sell Hebdo Mag International to Hebdo
Management for Approximately Seven Million Shares of Cendant Common Stock and
$410 million in Cash, dated August 12, 1998.
99.5 Cendant Segment Information
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENDANT CORPORATION
BY: /s/ James E. Buckman
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James E. Buckman
Senior Executive Vice President
and General Counsel
Date: August 13, 1998
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CENDANT CORPORATION
CURRENT REPORT ON FORM 8-K
REPORT DATED AUGUST 13, 1998 (AUGUST 12, 1998)
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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99.1 Press Release: Cendant Completes Accounting Investigation, dated August 13, 1998.
99.2 Press Release: Cendant Announces Second Quarter Earnings, dated August 13, 1998.
99.3 Press Release: Shareholders Approve Sale of RAC Motoring Services to Cendant, dated
August 12, 1998.
99.4 Press Release: Cendant Corporation to Sell Hebdo Mag International to Hebdo
Management for Approximately Seven Million Shares of Cendant Common Stock and
$410 million in Cash, dated August 12, 1998.
99.5 Cendant Segment Information
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