EXHIBIT 99.1
CENDANT COMPLETES ACCOUNTING INVESTIGATION
1997, 1996, 1995 Net Income Before One-time Charges
Revised by $0.28, $0.18 and $0.14 Per Share
In Line with Previous Estimates
PARSIPPANY, NJ, August 13, 1998 - Cendant Corporation (NYSE: CD) reported today
that its investigation of accounting irregularities and errors in the CUC
businesses was complete. The 1998 financial results announced today in a
separate release incorporate all relevant information obtained in that
investigation and reflect the correction of accounting policies changed as a
result of its findings. These 1998 results will not be subject to further
revision based on the results of the Company's investigation. Quarterly
financial statements for 1998 and the comparable periods of 1997 will be filed
with the SEC on Form 10-Q on Friday, August 14. Full restated, audited
financial statements for Cendant's fiscal years 1997, 1996 and 1995 will be
filed with the SEC on Form 10-K/A later this month. Furthermore, a full report
on the Audit Committee's investigation of these accounting irregularities will
be issued later this month.
Michael P. Monaco, Vice Chairman and Chief Financial Officer reported "we have
now concluded our investigation of the accounting issues at CUC. Millions of
dollars and hundreds of thousands of hours of work have determined what was
wrong and what must be put right. While we take no joy in reporting these
results, our shareholders should take great comfort from the thoroughness of
this investigation and the fact that we have unflinchingly accepted and
reported its results, even when it uncovered much greater and more systematic
fraud than we had any conception of when we launched this effort in April."
Adjustments for
Reversal of Merger & Unusual Charges
------------------------------------------
Adjustments for Total Previously Reversals New Total
Irregularities and Errors Reported One- of CUC One-Time
Total Time Charges Charges Charges
----- ---------------- --------- ---------
1997 ($0.28) ($0.94) $0.32 ($0.62)
1996 (0.18) (0.14) 0.02 (0.12)
1995 (0.14) (0.08) -- (0.08)
Cendant reported its final calculation of the impact of accounting
irregularities and errors on its 1997, 1996 and 1995 full year results. Cendant
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.
Cendant 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
on December 17, 1997. This will increase 1997 net income by $279 million
after-tax or $0.32 per share.
Cendant 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.
Certain matters discussed in the news release are forward-looking statements,
as defined in the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to a number of known and unknown risks
and uncertainties including, but not limited to, the outcome of the Audit
Committee's investigation relating to the previously announced accounting
irregularities; the outcome of the pending class action litigation relating to
the previously announced accounting irregularities; uncertainty as to the
Company's future profitability; the Company's ability to develop and implement
operational and financial systems to manage rapidly growing operations;
competition in the Company's existing and potential future lines of business;
the Company's ability to integrate and operate successfully acquired businesses
and the risks associated with such businesses; the Company's ability to obtain
financing on acceptable terms to finance the Company's growth strategy and for
the Company to operate within the limitations imposed by financing
arrangements; uncertainty as to the future profitability of acquired
businesses; and other factors. Other factors and assumptions not identified
above were also involved in the derivation of these forward-looking statements,
and the failure of such other assumptions to be realized as well as other
factors may also cause actual results to differ materially from those
projected. The Company assumes no obligation to update these forward-looking
statements to reflect actual results, changes in assumptions or changes in
other factors affecting such forward-looking statements.
Cendant (NYSE:CD) is the world's premier provider of consumer and business
services. The Company operates in three principal segments: Travel Services,
Real Estate Services and Alliance Marketing. In Travel Services, Cendant is the
leading franchisor of hotels and rental car agencies worldwide; the largest
provider of vacation exchange services; a leading fleet management company, the
UK's largest private car park operator, and a leading motorist assistance group
in the UK. In Real Estate Services, Cendant is the world's largest franchisor
of residential real estate brokerage offices, a major provider of mortgage
services to consumers and a global leader in corporate employee relocation. In
Alliance Marketing, Cendant provides access to insurance, travel, shopping,
auto, and other services, primarily through direct marketing to customers of
its affinity partners. Headquartered in Parsippany, NJ, the company has more
than 40,000 employees and operates in over 100 countries.
Media Contact: Investor Contact:
Cendant Corporation Cendant Corporation
Elliot Bloom David M. Johnson
973-496-8414 or 973-496-7909
Denise L. Gillen
973-496-7303
Kekst and Company
Jim Fingeroth
Roanne Kulakoff
212-521-4800