EXHIBIT 99.1
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The following Unaudited Pro Forma Condensed Combined Statement of Operations for
the six months ended June 30, 2001 gives effect to the Company's March 1, 2001
acquisition (the "Acquisition") of Avis Group Holdings, Inc. ("Avis"), which has
been accounted for under the purchase method of accounting.
The Unaudited Pro Forma Condensed Combined Statement of Operations assumes the
Acquisition occurred on January 1, 2001. The unaudited pro forma financial
information is based on the historical consolidated financial statements of the
Company and Avis under the assumptions and adjustments set forth in the
accompanying explanatory notes.
Since Avis was consolidated with the Company as of March 1, 2001, the results of
operations of Avis between January 1, 2001 and February 28, 2001 were combined
with the Company's results of operations to report the combined pro forma
results of operations for the six month period ended June 30, 2001. All
intercompany transactions were eliminated on a pro forma basis. Historically,
Avis paid the Company for services the Company provided related to call centers
and information technology and for the use of the Company's trademarks.
As a result of the Acquisition, the Company made payments totaling approximately
$994 million, including payments of $937 million to Avis stockholders, direct
expenses of $40 million related to the transaction and the net cash obligation
of $17 million related to Avis stock options settled prior to consummation. The
purchase price also included the fair value of CD common stock options exchanged
with certain fully-vested Avis stock options. The Unaudited Pro Forma Condensed
Combined Statement of Operations reflects interest expense resulting from a
portion of the purchase price being funded by the issuance of $600 million in
debt, with the remaining amount provided by cash.
The unaudited pro forma financial information excludes any benefits that might
result from the Acquisition due to synergies that may be derived or from the
elimination of duplicate efforts.
The Company's management believes that the assumptions used provide a reasonable
basis on which to present the unaudited pro forma financial information. The
Company has completed other acquisitions and dispositions which are not
significant and, accordingly, have not been included in the accompanying
unaudited pro forma financial information. The unaudited pro forma financial
information may not be indicative of the results of operations that would have
occurred if the Acquisition had been in effect on the dates indicated or which
might be obtained in the future.
The unaudited pro forma financial information should be read in conjunction with
the historical consolidated financial statements and accompanying notes for the
Company and Avis.
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CENDANT CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
HISTORICAL
HISTORICAL AVIS PURCHASE COMBINED
CENDANT JAN 1- FEB 28, 2001 ADJUSTMENTS PRO FORMA
---------- ------------------- ----------- ---------
REVENUES
Membership and service fees, net $ 2,431 $ 27 $ (34)(a) $ 2,424
Vehicle-related 1,433 594 -- 2,027
Other 25 20 -- (b) 45
---------- ------------------- ----------- ---------
Net revenues 3,889 641 (34) 4,496
EXPENSES
Operating 1,239 174 (34)(a) 1,379
Vehicle depreciation, lease charges and interest, net 725 350 -- 1,075
Selling, general and administrative 895 115 -- 1,010
Non-vehicle depreciation and amortization 222 23 2 (d) 247
Other charges, net 212 - -- 212
Non-vehicle interest, net 122 12 1 (c) 135
---------- ------------------- ----------- ---------
Total expenses 3,415 674 (31) 4,058
Net gain on dispositions of businesses 435 -- -- 435
---------- ------------------- ----------- ---------
INCOME (LOSS) BEFORE INCOME TAXES, MINORITY INTEREST
AND EQUITY IN HOMESTORE.COM 909 (33) (3) 873
Provision (benefit) for income taxes 336 (10) (2)(e) 324
Minority interest, net of tax 18 -- -- 18
Losses related to equity in Homestore.com, net of tax 36 -- -- 36
---------- ------------------- ----------- ---------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE $ 519 $ (23) $ (1) $ 495
========== ================= =========== =========
CD COMMON STOCK INCOME PER SHARE
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE
Basic $ 0.61 $ 0.58
Diluted 0.58 0.55
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 820 820
Diluted 868 868
MOVE.COM COMMON STOCK INCOME PER SHARE
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE
Basic $ 9.94 $ 9.94
Diluted 9.81 9.81
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 2 2
Diluted 2 2
</Table>
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF
OPERATIONS.
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CENDANT CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001
(DOLLARS IN MILLIONS)
(a) Represents the elimination of amounts paid by Avis to the Company for
services provided by the Company related to call centers and information
technology and for the use of trademarks.
(b) Represents the elimination of the Company's earnings attributable to its
investment in Avis for which the combined effect is zero.
(c) Represents interest expense on debt issued to finance the acquisition of
Avis ($7), net of amortization of the fair value adjustment on acquired
debt ($4) and the reversal of Avis' amortization of debt-related costs
($2).
(d) Represents the amortization of goodwill generated on the excess of fair
value over the net assets acquired on a straight-line basis over 40 years,
net of the reversal of Avis' amortization of pre-acquisition goodwill and
other identifiable intangibles resulting from the allocation of purchase
price on a straight-line basis over 20 years.
(e) Represents the income tax effect of the purchase adjustments and other pro
forma adjustments at an estimated statutory rate of 38.5% (not including
adjustments for non-deductible goodwill).
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