EXHIBIT 12
CENDANT CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
In connection with the Company's discovery and announcement of accounting
irregularities, previously reported information for periods prior to December
31, 1994 should not be relied upon (see Note 18 to the consolidated financial
statements). Accordingly, the computation of Ratio of Earnings to Fixed Charges
is presented for years subsequent to and including December 31, 1995.
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1998 1997 1996 1995
----------- ----------- ----------- -----------
Income from continuing operations before income
taxes, minority interest, extraordinary gain and
cumulative effect of accounting change ................... $ 315.0 $ 257.3 $ 533.5 $ 350.3
Plus: Fixed charges ....................................... 676.6 409.4 325.6 291.2
Less: Equity income in unconsolidated affiliates .......... 13.5 51.3 -- --
Capitalized interest ..................................... -- -- 0.6 --
Minority interest in mandatorily preferred
securities ............................................. 80.4 -- -- --
--------- --------- --------- ---------
Earnings available to cover fixed charges ................. $ 897.7 $ 615.4 $ 858.5 $ 641.5
========= ========= ========= =========
Fixed charges (1):
Interest, including amortization of deferred financing
costs .................................................... $ 509.0 $ 379.0 $ 299.9 $ 270.4
Capitalized interest ...................................... -- -- 0.6 --
Other charges, financing costs ............................ 27.9 -- -- --
Minority interest in mandatorily preferred securities ..... 80.4 -- -- --
Interest portion of rental payment ........................ 59.3 30.4 25.1 20.8
--------- --------- --------- ---------
Total fixed charges ....................................... $ 676.6 $ 409.4 $ 325.6 $ 291.2
========= ========= ========= =========
Ratio of earnings to fixed charges (2) .................... 1.33x 1.50x 2.64x 2.20x
========= ========= ========= =========
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(1) 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).
(2) For the years ended December 31, 1998, 1997 and 1996, income from
continuing operations before income taxes, minority interest,
extraordinary gain and cumulative effect of accounting change includes
non-recurring other charges of $810.4 million (exclusive of financing
costs of $27.9 million), $704.1 million and $109.4 million, respectively.
Excluding such charges, the ratio of earnings to fixed charges for the
years ended December 31, 1998, 1997 and 1996 is 2.52x, 3.22x and 2.97x,
respectively.