CD Cendant

NEW YORK, Aug. 9 /PRNewswire-FirstCall/ -- Cendant Corporation (NYSE:CD) today reported results for second quarter 2006. Revenue totaled $4.3 billion, an increase of 2% over second quarter 2005, reflecting growth across Wyndham Worldwide and the Company's Avis Budget businesses. EPS from Continuing Operations was $0.17, which excludes the results of Travelport, formerly the Company's Travel Distribution Services division, which are classified as discontinued operations due to the pending sale of that business. As previously announced, the Company completed the spin-offs of Realogy and Wyndham Worldwide in tax-free distributions to its stockholders on July 31, 2006. Excluding separation and restructuring costs and the previously disclosed tax accrual at Wyndham Worldwide, EPS from Continuing Operations was $0.24. Cendant's Chairman and CEO, Henry R. Silverman, stated: "The past several months were a period of strategic milestones for Cendant. We completed the spin-offs of Realogy and Wyndham Worldwide to our shareholders and each is now an independent, publicly-traded company. The sale of Travelport is expected to be completed this month, after which Avis Budget Group will be an independent, publicly-traded company. These companies are leaders in their respective industries and we are excited about the prospects for each to grow, prosper and create long-term value for its shareholders." Second Quarter 2006 Results of Core Operating Segments The following discussion of operating results focuses on revenue and EBITDA for each of the Company's core operating segments as of June 30, 2006. Revenue and EBITDA are expressed in millions. Realogy (formerly Real Estate Services) (Consisting of the Company's former real estate franchise brands, brokerage operations, relocation services and settlement services businesses) 2006 2005 % change Revenue $1,903 $2,043 (7%) EBITDA $306 $393 (22%) Revenue and EBITDA declined in line with Realogy's expectations principally due to lower revenue at Realogy's real estate franchise and NRT real estate brokerage businesses, partially offset by growth in its settlement services business due to the acquisition of Texas American Title Company and related companies in January 2006. Home prices increased 5% at both real estate franchise and NRT. These increases were offset by closed sides decreases of 16% and 13% at real estate franchise and NRT, respectively. The decreases in closed sides were impacted by the acquisitions of brokerages by NRT. Excluding this impact, closed sides would have decreased 14% and 17% at real estate franchise and NRT, respectively. The decline in closed sides volume reflects moderation of the residential real estate market, particularly in some of the areas where NRT is concentrated such as Florida and California. In addition, EBITDA comparisons were negatively impacted by an incremental $13 million of separation and restructuring costs. Excluding these costs, EBITDA would have been down 19%. Hospitality Services (now part of Wyndham Worldwide) (Consisting of the Company's former franchised lodging brands, hotel management, timeshare exchange and vacation rental businesses) 2006 2005 % change Revenue $421 $367 15% EBITDA $77 $100 (23%) Revenue increased due to growth in Wyndham Worldwide's lodging and Vacation Network Group (VNG) businesses. The largest contributor to revenue growth was the inclusion of approximately $35 million of revenue resulting from the acquisition of Wyndham Hotels and Resorts, of which approximately $28 million had no impact on EBITDA because it related to reimbursable expenses. Lodging revenue was also positively impacted by a 10% improvement in RevPAR, excluding Wyndham Hotels and Resorts and Baymont Hotels, both of which were recently acquired. EBITDA declined principally due to a previously announced $25 million foreign tax accrual that was recorded in the European vacation rental operations. Timeshare Resorts (now part of Wyndham Worldwide) (Consisting of the Company's former timeshare sales and development businesses) 2006 2005 % change Revenue $479 $436 10% EBITDA $84 $73 15% Revenue and EBITDA increased principally due to growth in timeshare sales and increased consumer financing income. Growth in timeshare sales revenue was driven by an 11% increase in revenue per guest and a 9% increase in tour flow. Revenue per guest benefited from higher pricing and increased conversion of tours into sales, and tour flow was positively impacted by the continued development of the Trendwest in-house sales program and continued improvement in local marketing efforts. Operating results were negatively impacted by the adoption in first quarter 2006 of a new accounting standard for the recognition of timeshare sales revenue and expenses (SFAS No. 152), and the absence of $11 million of income that was recognized in second quarter 2005 in connection with a previously disclosed disposal of land that was no longer needed for development. Excluding the impact of these items, revenue and EBITDA would have increased 24% and 39%, respectively. Avis Budget (formerly Vehicle Rental) (Consisting of the Company's car and truck rental businesses) 2006 2005 % change Revenue $1,439 $1,312 10% EBITDA $111 $128 (13%) Revenue increased due to growth in our domestic and international car rental operations. Car rental revenue grew 12% worldwide due to a 9% increase in price and a 3% increase in rental day volume. As expected, EBITDA comparisons were negatively impacted by increased fleet costs. We expect continuing year-over-year price increases for the remainder of 2006 as we seek to offset the impact of higher fleet costs. Other Items -- Completion of Spin-Offs -- We have completed the spin-offs of Realogy and Wyndham Worldwide in tax-free distributions to the Company's shareholders. Realogy and Wyndham Worldwide are now independent, publicly-traded companies listed on the New York Stock Exchange under the ticker symbols "H" and "WYN," respectively. As a result, Cendant will classify Realogy and Wyndham Worldwide as discontinued operations when it reports its third quarter results. -- Sale of Travelport -- We agreed to sell Travelport to an affiliate of The Blackstone Group for $4.3 billion in cash and confirmed that the net proceeds (after taxes, fees and expenses, and retirement of Travelport borrowings) from such sale will be used to reduce the initial indebtedness of Realogy and Wyndham Worldwide. The sale is expected to close this month. -- Repayment of Corporate Debt -- In connection with our separation plan, we repurchased approximately $2.5 billion aggregate principal amount under our 6.25% Senior Notes due 2008 and 2010, 7.375% Senior Notes due 2013, and 7.125% Senior Notes due 2015. We also pre-funded the payment of $950 million under our 4.89% and 6 7/8% Notes Due 2006 and repaid amounts outstanding under our $2.0 billion revolving credit facility. -- Cendant Name Change and Reverse Stock Split -- We have submitted several proposals to be voted upon at our annual stockholders meeting scheduled for August 29, 2006, including one to change Cendant's name to Avis Budget Group, Inc. and another to authorize a 1-for-10 reverse stock split of Cendant's common stock. If approved, these proposals are expected to become effective on September 5, 2006 and at such time we expect that our New York Stock Exchange ticker symbol will be changed to "CAR". -- Discontinued Operations -- Income from discontinued operations includes results of the Company's Travelport unit and, in prior periods, results of operations of the Company's former Marketing Services Division, Wright Express fuel card business, and fleet and appraisal units, all of which have been disposed. In addition, the loss on disposal of discontinued operations in second quarter 2006 includes a previously announced, non-cash impairment charge of approximately $1.0 billion in connection with the sale of Travelport. -- Separation Costs -- Second quarter 2006 EBITDA includes separation costs of $49 million, including $42 million recorded in Corporate and Other, $2 million recorded in Realogy, $2 million recorded in Hospitality Services, $2 million recorded in Timeshare Resorts and $1 million recorded in Avis Budget. These costs consist primarily of legal, accounting, other professional and consulting fees, and employee costs. -- Foreign Tax Accrual -- Second quarter 2006 results include a previously announced $36 million pretax accrual for foreign taxes related to Wyndham Worldwide's European vacation rental operations. $25 million of this accrual is recorded in the segment results for Hospitality Services and $11 million is recorded as interest expense, below EBITDA. -- Free Cash Flow -- Free cash flow in second quarter 2006 is not comparable to second quarter 2005 due to the impact of the repayment of certain vehicle related debt using the proceeds from the $1.875 billion of corporate borrowings completed in April 2006. See Table 7. Outlook for Avis Budget The following table presents the previously announced pro forma 2005 and expected pro forma 2006 financial data for Avis Budget Car Rental, LLC and its subsidiaries, the companies that comprise Cendant's vehicle rental business. ($ millions) 2005 (1) 2006E (1)(2) Revenue $5,316 $5,600 - 5,800 EBITDA $497 $400 - 440 Corporate interest expense, net 141 140 - 145 EBITDA less corporate interest expense 356 260 - 295 Non-vehicle depreciation and amortization 98 90 - 100 Pretax income $258 $165 - 200 (1) The expected pro forma results provided above give effect to the $1.875 billion of corporate borrowings completed in April 2006 and repayment of vehicle-backed debt with a portion of the net proceeds of such financing, removal of Cendant-allocated general overhead costs, the incurrence of stand- alone public company costs, elimination of the approximately $802 million intercompany balance with Cendant and the associated interest income, and increased truck lease financing costs due to the separation. (2) Full year estimates may not total because actual results are not expected to be at the lowest or highest of the expected range. Investor Conference Call Cendant will host a conference call to discuss the second quarter results on Thursday, August 10, 2006, at 11:00 a.m. (ET). Investors may access the call live at http://www.cendant.com/ or by dialing (913) 981-5509. A web replay will be available at http://www.cendant.com/ following the call. A telephone replay will be available from 2:00 p.m. (ET) on August 10, 2006 until 8:00 p.m. (ET) on August 17, 2006 at (719) 457-0820, access code: 6465003. About Cendant Corporation Cendant is now comprised of its Travelport and Avis Budget Group businesses. Travelport is classified as a discontinued operation due to its impending sale. Avis Budget Group is a leading provider of vehicle rental services with operations in more than 50 countries. Through its Avis and Budget brands, Avis Budget Group is the largest general-use vehicle rental operator in each of North America, Australia, New Zealand and certain other regions. Avis Budget Group is headquartered in Parsippany, NJ and has more than 30,000 employees. About Realogy Corporation Realogy Corporation (NYSE:H) is the world's largest residential real estate brokerage franchisor, the largest U.S. residential real estate brokerage firm, a leading global provider of outsourced employee relocation services, and a provider of title and settlement services. Realogy's brands include Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA, Sotheby's International Realty, NRT Incorporated, Cartus and Title Resource Group. Realogy is headquartered in Parsippany, NJ and has more than 15,000 employees. About Wyndham Worldwide Corporation Wyndham Worldwide Corporation (NYSE:WYN) is one of the world's largest hospitality companies offering individual consumers and business-to-business customers a broad suite of hospitality products and services including lodging, vacation exchange and rental services, and vacation ownership interests in resorts. Wyndham Worldwide is headquartered in Parsippany, NJ, and is supported by approximately 28,800 employees around the world. Forward-Looking Statements Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", "may increase", "may fluctuate" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements. The Company cannot provide any assurances that the remaining proposed transactions related to the separation, principally the proposed sale of Travelport, will be completed, nor can it give assurances as to the terms on which such transactions will be consummated. Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this press release include, but are not limited to risks related to the proposed sale of Travelport, the high level of competition in the vehicle rental industry, increased costs for new vehicles, a downturn in airline passenger traffic, an occurrence or threat of terrorism, a significant increase in interest rates or borrowing costs and the Company's ability to make changes necessary to operate following completion of the separation plan. Other unknown or unpredictable factors also could have material adverse effects on Cendant's and its companies' performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward looking statements are specified in Cendant's Quarterly Report on Form 10-Q for the period ended June 30, 2006, including under headings such as "Forward-Looking Statements," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Except for the Company's ongoing obligations to disclose material information under the federal securities laws, the Company undertakes no obligation to release publicly any revisions to any forward- looking statements, to report events or to report the occurrence of unanticipated events unless required by law. This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained on Table 8 to this release. Tables Follow Table 1 page 1 of 2 Cendant Corporation and Subsidiaries SUMMARY DATA SHEET (Dollars in millions, except per share data) Second Quarter 2006 2005 % Change Income Statement Items Net Revenues $4,257 $4,170 2% Pretax Income (A) 277 505 (45%) Income from Continuing Operations 174 316 (45%) EPS from Continuing Operations (diluted) 0.17 0.29 (41%) Cash Flow Items Net Cash Provided by Operating Activities 724 869 Free Cash Flow (B) (1,488) 549 Payments Made for Current Period Acquisitions, Net of Cash Acquired (66) (56) Net Borrowings 1,838 (45) Net Repurchases of Common Stock 14 (158) Payment of Dividends - (96) As of As of June 30, December 31, 2006 2005 Balance Sheet Items Total Corporate and Other Debt $3,694 $3,578 Total Avis Budget Car Rental Corporate Debt 1,875 - Cash and Cash Equivalents 441 730 Total Stockholders' Equity 10,501 11,291 Segment Results Second Quarter 2006 2005 % Change Net Revenues Realogy (formerly known as Real Estate Services) $1,903 $2,043 (7%) Hospitality Services 421 367 15% Timeshare Resorts 479 436 10% Wyndham Worldwide 900 803 12% Avis Budget Group (formerly known as Vehicle Rental) (C) 1,439 1,312 10% Total Core Operating Segments 4,242 4,158 2% Corporate and Other 15 12 * Cendant Corporation $4,257 $4,170 2% EBITDA (D) Realogy (formerly known as Real Estate Services) $306 $393 (22%) Hospitality Services 77 100 (23%) Timeshare Resorts 84 73 15% Wyndham Worldwide 161 173 (7%) Avis Budget Group (formerly known as Vehicle Rental) 111 128 (13%) Total Core Operating Segments 578 694 (17%) Corporate and Other (95) (35) * Cendant Corporation $483 $659 (27%) Reconciliation of EBITDA to Pretax Income Total Company EBITDA $483 $659 Less: Non-program related depreciation and amortization 94 85 Non-program related interest expense, net 110 66 Amortization of pendings and listings 2 3 Pretax Income (A) $277 $505 (45%) * Not meaningful. (A) Referred to as "Income before income taxes and minority interest" on the Consolidated Condensed Statements of Income presented on Table 2. See Table 2 for a reconciliation of Pretax Income to Net Income (loss). (B) See Table 8 for a description of Free Cash Flow and Table 7 for the underlying calculations. (C) For comparability purposes, 2005 vehicle rental revenue has been grossed-up by $88 million to reflect a change in accounting presentation during fourth quarter 2005 to be consistent with industry competitors. This change had no impact on EBITDA. (D) See Table 8 for a description of EBITDA. Table 1 page 2 of 2 Cendant Corporation and Subsidiaries SUMMARY DATA SHEET (Dollars in millions, except per share data) Six Months Ended June 30, 2006 2005 % Change Income Statement Items Net Revenues $7,834 $7,580 3% Pretax Income (A) 420 609 (31%) Income from Continuing Operations 255 358 (29%) EPS from Continuing Operations (diluted) 0.25 0.33 (24%) Cash Flow Items Net Cash Provided by Operating Activities 754 1,264 Free Cash Flow (B) (1,763) 626 Payments Made for Current Period Acquisitions, Net of Cash Acquired (180) (87) Net Borrowings 2,051 576 Net Repurchases of Common Stock (207) (269) Payment of Dividends (113) (192) As of As of June 30, 2006 December 31, 2005 Balance Sheet Items Total Corporate and Other Debt $3,694 $3,578 Total Avis Budget Car Rental Corporate Debt 1,875 - Cash and Cash Equivalents 441 730 Total Stockholders' Equity 10,501 11,291 Segment Results Six Months Ended June 30, 2006 2005 % Change Net Revenues Realogy (formerly known as Real Estate Services) $3,329 $3,452 (4%) Hospitality Services 830 762 9% Timeshare Resorts 886 805 10% Wyndham Worldwide 1,716 1,567 10% Avis Budget Group (formerly known as Vehicle Rental) (C) 2,758 2,477 11% Total Core Operating Segments 7,803 7,496 4% Mortgage Services - 46 * Corporate and Other 31 38 * Cendant Corporation $7,834 $7,580 3% EBITDA (D) Realogy (formerly known as Real Estate Services) $427 $554 (23%) Hospitality Services 194 225 (14%) Timeshare Resorts 151 113 34% Wyndham Worldwide 345 338 2% Avis Budget Group (formerly known as Vehicle Rental) 166 194 (14%) Total Core Operating Segments 938 1,086 (14%) Mortgage Services - (181) * Corporate and Other (158) (72) * Cendant Corporation $780 $833 (6%) Reconciliation of EBITDA to Pretax Income Total Company EBITDA $780 $833 Less: Non-program related depreciation and amortization 183 172 Non-program related interest expense, net 168 46 Amortization of pendings and listings 9 6 Pretax Income (A) $420 $609 (31%) * Not meaningful. (A) Referred to as "Income before income taxes and minority interest" on the Consolidated Condensed Statements of Income presented on Table 2. See Table 2 for a reconciliation of Pretax Income to Net Income (loss). (B) See Table 8 for a description of Free Cash Flow and Table 7 for the underlying calculations. (C) For comparability purposes, 2005 vehicle rental revenue has been grossed-up by $165 million to reflect a change in accounting presentation during fourth quarter 2005 to be consistent with industry competitors. This change had no impact on EBITDA. (D) See Table 8 for a description of EBITDA. Table 2 Cendant Corporation and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF INCOME (In millions, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 Revenues Service fees and membership, net $2,813 $2,847 $5,064 $5,060 Vehicle-related 1,439 1,312 2,758 2,477 Other 5 11 12 43 Net revenues 4,257 4,170 7,834 7,580 Expenses Operating 2,602 2,539 4,825 4,647 Vehicle depreciation, lease charges and interest, net 439 373 860 697 Marketing and reservation 359 321 683 617 General and administrative 324 276 599 564 Non-program related depreciation and amortization 94 85 183 172 Non-program related interest expense, net 110 66 168 46 Acquisition and integration related costs: Amortization of pendings and listings 2 3 9 6 Other 1 1 2 2 Separation costs (A) 49 - 85 - Restructuring and transaction- related charges - 1 - 40 Valuation charge associated with PHH spin-off - - - 180 Total expenses 3,980 3,665 7,414 6,971 Income before income taxes and minority interest 277 505 420 609 Provision for income taxes 103 188 164 249 Minority interest, net of tax - 1 1 2 Income from continuing operations 174 316 255 358 Income from discontinued operations, net of tax (B) 53 67 106 81 Gain (loss) on disposal of discontinued operations, net of tax: (981) 4 (981) (133) Income (loss) before cumulative effect of accounting changes (754) 387 (620) 306 Cumulative effect of accounting changes, net of tax (C) - - (64) - Net income (loss) $(754) $387 $(684) $306 Earnings per share Basic Income from continuing operations $0.17 $0.30 $0.25 $0.34 Income from discontinued operations 0.06 0.07 0.11 0.08 Gain (loss) on disposal of discontinued operations (0.98) - (0.98) (0.13) Cumulative effect of accounting changes - - (0.06) - Net income (loss) $(0.75) $0.37 $(0.68) $0.29 Diluted Income from continuing operations $0.17 $0.29 $0.25 $0.33 Income from discontinued operations 0.05 0.07 0.11 0.08 Gain (loss) on disposal of discontinued operations (0.97) - (0.97) (0.13) Cumulative effect of accounting changes - - (0.06) - Net income (loss) $(0.75) $0.36 $(0.67) $0.28 Weighted average shares outstanding Basic 1,002 1,050 1,004 1,052 Diluted 1,011 1,072 1,014 1,075 (A) Represents costs we incurred in connection with the execution of our plan to separate Cendant into four independent companies. For the three months ended June 30, 2006, the Company incurred $42 million, $2 million, $2 million, $2 million and $1 million of such costs within Corporate and Other, Realogy, Timeshare, Hospitality Services and Avis Budget Group, respectively. For the six months ended June 30, 2006, the Company incurred $75 million, $4 million, $2 million, $2 million and $2 million of such costs within Corporate and Other, Realogy, Timeshare, Hospitality Services and Avis Budget Group, respectively. (B) Includes the results of operations of the Company's (i) Travelport business, the sale of which is anticipated to close in August 2006, (ii) former Marketing Services division, which was disposed of in October 2005, (iii) former fuel card business, Wright Express Corporation, which was disposed of in February 2005 and (iv) former fleet leasing and appraisal businesses which were spun-off in January 2005. (C) Represents non-cash charges to reflect the cumulative effect of adopting (i) Statement of Financial Accounting Standards ("SFAS") No. 152, "Accounting for Real Estate Time-Sharing Transactions," and American Institute of Certified Public Accountants' Statement of Position No. 04-2, "Accounting for Real Estate Time-Sharing Transactions" on January 1, 2006, which resulted in a non-cash charge of $65 million, after tax, and (ii) SFAS No. 123R, "Share-Based Payment," on January 1, 2006, which resulted in a non-cash credit of $1 million, after tax. Table 3 Cendant Corporation and Affiliates SEGMENT REVENUE DRIVER ANALYSIS (Revenue dollars in thousands) Second Quarter 2006 2005 % Change REALOGY SEGMENT Real Estate Franchise Closed Sides 439,914 521,471 (16%) Average Price $233,457 $221,737 5% Royalty Revenue (A) $128,233 $141,553 (9%) Total Revenue (A) $158,035 $160,366 (1%) Real Estate Brokerage Closed Sides 117,799 135,173 (13%) Average Price $492,809 $470,404 5% Net Revenue from Real Estate Transactions $1,485,603 $1,638,710 (9%) Total Revenue $1,501,245 $1,654,855 (9%) Cartus (formerly "Relocation") Transaction Volume 26,771 28,655 (7%) Total Revenue $131,333 $135,108 (3%) Title Resource Group (formerly "Settlement Services") (B) Purchase Title and Closing Units 47,163 42,954 10% Refinance Title and Closing Units 10,639 12,776 (17%) Total Revenue $112,837 $92,312 22% HOSPITALITY SERVICES SEGMENT Lodging (C) RevPAR $36.97 $31.91 16% Weighted Average Rooms Available 531,019 511,998 4% Royalty, Marketing and Reservation Revenue $125,409 $104,281 20% Total Revenue $176,368 $128,953 37% Vacation Exchange and Rental Average Number of Exchange Subscribers 3,327,129 3,185,419 4% Subscriber Related Revenue $152,316 $148,735 2% European Cottage Weeks Sold 256,860 246,002 4% Total Revenue $244,525 $237,966 3% TIMESHARE RESORTS SEGMENT Tours 273,343 250,231 9% Total Revenue $479,285 $436,183 10% AVIS BUDGET GROUP SEGMENT Car Rental Days (000's) 26,526 25,809 3% Time and Mileage Revenue per Day $39.30 $36.13 9% Total Car Revenue (D) $1,309,575 $1,165,574 12% Truck Total Truck Revenue (D) $129,543 $146,513 (12%) (A) Excludes $96 million and $110 million of intercompany royalties paid primarily by our NRT real estate brokerage business during second quarter 2006 and 2005, respectively. (B) The 2006 amounts include Texas American Title Company, which we acquired on January 6, 2006. Therefore, the revenue and driver amounts for 2006 are not presented on a comparable basis to the 2005 amounts. On a comparable basis (excluding Texas American Title Company from the 2006 amounts), Purchase Title and Closing Units and Refinance Title and Closing Units would have decreased 10% and 19%, respectively. (C) The 2006 amounts include Wyndham hotel brand and franchise system, which we acquired on October 11, 2005. Therefore, the revenue and driver amounts for 2006 are not presented on a comparable basis to the 2005 amounts. On a comparable basis (excluding Wyndham from the 2006 amounts), RevPAR would have increased 10% and Weighted Average Rooms Available would have decreased 1%. (D) For comparability purposes, 2005 vehicle rental revenue has been grossed-up by $88 million to reflect a change in accounting presentation adopted during fourth quarter 2005 to be consistent with industry competitors. Table 4 Cendant Corporation and Subsidiaries CONSOLIDATED CONDENSED BALANCE SHEETS (In billions) As of As of June 30, 2006 December 31, 2005 Assets Current assets: Cash and cash equivalents $0.4 $0.7 Assets of discontinued operations 6.3 6.9 Other current assets 2.5 2.0 Total current assets 9.2 9.6 Property and equipment, net 1.2 1.3 Goodwill 8.1 7.9 Other non-current assets 3.0 2.9 Total assets exclusive of assets under programs 21.5 21.7 Assets under management programs 13.7 12.4 Total assets $35.2 $34.1 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt $3.6 $1.0 Liabilities of discontinued operations 1.8 1.6 Other current liabilities 3.9 3.8 Total current liabilities 9.3 6.4 Long-term debt 2.0 2.6 Other non-current liabilities 1.2 1.2 Total liabilities exclusive of liabilities under programs 12.5 10.2 Liabilities under management programs(*) 12.2 12.6 Total stockholders' equity 10.5 11.3 Total liabilities and stockholders' equity $35.2 $34.1 (*) Liabilities under management programs includes deferred income tax liabilities of $1.8 billion and $1.7 billion as of June 30, 2006 and December 31, 2005, respectively. Table 5 Cendant Corporation and Subsidiaries SCHEDULE OF CORPORATE DEBT (*) (In millions) June 30, Maturity Date 2006 Pro June 30, March 31, December 31 forma (A) 2006 2006 2005 Corporate debt: August 2006 6 7/8% notes (B) $ - $850 $850 $850 August 2006 4.89% notes (B) - 100 100 100 January 2008 6 1/4% notes (C) 30 799 798 798 March 2010 6 1/4% notes (C) 12 349 349 349 January 2013 7 3/8% notes (C) 18 1,192 1,192 1,192 March 2015 7 1/8% notes (C) 3 250 250 250 November 2009 Revolver borrowings (C)(D) - 200 225 7 Net hedging losses (E) - (123) (91) (47) 63 3,617 3,673 3,499 Avis Budget Car Rental Corporate debt: (F) April 2012 Floating rate term loan 875 875 - - May 2014 Floating rate senior notes 250 250 - - May 2014 7 5/8% notes 375 375 - - May 2016 7 3/4% notes 375 375 - - 1,875 1,875 - - Other (G) 11 77 85 79 Total Debt $1,949 $5,569 $3,758 $3,578 (*) Amounts presented herein exclude assets and liabilities under management programs. In addition, amounts as of March 31, 2006 and December 31, 2005 have been restated to exclude debt and cash balances related to Travelport, which is accounted for as a discontinued operation. (A) Presents our Corporate debt and Avis Budget Car Rental Corporate Debt on a pro forma basis after giving effect to (i) the repayment of certain Corporate debt, discussed in (B) and (C), below, (ii) the settlement of derivatives associated with our Corporate debt and (iii) the distributions of Realogy and Wyndham to our stockholders on July 31, 2006. (B) During July 2006, we funded the aggregate principal amount of $950 million due in August 2006 under the 6 7/8% notes and 4.89% notes. (C) In connection with the execution of our separation plan, on July 28, 2006, we repurchased approximately $2.5 billion aggregate principal under our 6 1/4% notes due in January 2008 and March 2010, 7 3/8% notes due in January 2013 and 7 1/8% notes due in March 2015 and repaid outstanding borrowings under our corporate revolving credit facility. (D) The outstanding borrowings do not include $265 million of borrowings for which our Travelport subsidiary is the primary obligor. This amount is included within liabilities of discontinued operations on our Consolidated Condensed Balance Sheet at June 30, 2006. (E) As of June 30, 2006, this balance represents $212 million of mark-to-market adjustments on current interest rate hedges, partially offset by $89 million of net gains resulting from the termination of interest rate hedges. (F) The floating rate term loan and fixed and floating rate notes were issued in April 2006 by Avis Budget Car Rental, LLC, the parent company of our vehicle rental subsidiary. The proceeds from these borrowings were utilized to repay vehicle-backed debt under management programs. (G) The pro forma amount at June 30, 2006 excludes $66 million related to Realogy and Wyndham. Table 6 Cendant Corporation and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In millions) Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 Operating Activities Net cash provided by operating activities exclusive of management programs $559 $693 $357 $822 Net cash provided by operating activities of management programs 165 176 397 442 Net Cash Provided by Operating Activities 724 869 754 1,264 Investing Activities Property and equipment additions (86) (80) (148) (133) Net assets acquired, net of cash acquired, and acquisition-related payments (169) (75) (303) (127) Proceeds received on asset sales 7 7 11 13 Proceeds from sale of available-for- sale securities - - - 18 Proceeds (payments) from disposition of businesses, net of transaction- related payments (9) 6 (28) 964 Other, net (23) (12) (32) (1) Net cash provided by (used in) investing activities exclusive of management programs (280) (154) (500) 734 Management programs: (Increase) decrease in program cash (42) 82 (75) (61) Net change in investment in vehicles (691) (1,079) (1,532) (2,572) Net change in relocation receivables (104) (115) (74) (118) Net change in mortgage servicing rights, related derivatives and mortgage-backed securities - - - 21 Other, net 1 (11) (6) (20) (836) (1,123) (1,687) (2,750) Net Cash Used in Investing Activities (1,116) (1,277) (2,187) (2,016) Financing Activities Proceeds from borrowings 1,875 4 1,875 4 Principal payments on borrowings (11) (5) (16) (44) Net change in short-term borrowings (26) (44) 192 616 Issuances of common stock 14 71 36 191 Repurchases of common stock - (229) (243) (460) Cash reduction due to spin-off of PHH - - - (259) Payment of dividends - (96) (113) (192) Other, net (27) 1 (30) 4 Net cash provided by (used in) financing activities exclusive of management programs 1,825 (298) 1,701 (140) Management programs: Proceeds from borrowings 3,217 3,137 7,011 6,983 Principal payments on borrowings (4,541) (2,456) (7,769) (4,907) Net change in short-term borrowings 61 223 104 184 Other, net (17) (6) (22) (12) (1,280) 898 (676) 2,248 Net Cash Provided by Financing Activities 545 600 1,025 2,108 Effect of changes in exchange rates on cash and cash equivalents - (14) - (20) Cash provided by (used in) discontinued operations 62 2 119 (1,397) Net increase (decrease) in cash and cash equivalents 215 180 (289) (61) Cash and cash equivalents, beginning of period 226 226 730 467 Cash and cash equivalents, end of period $441 $406 $441 $406 Table 7 Cendant Corporation and Subsidiaries CONSOLIDATED SCHEDULES OF FREE CASH FLOWS (*) (In millions) Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 Pretax income $277 $505 $420 $609 Addback of non-cash depreciation and amortization: Non-program related 94 85 183 172 Pendings and listings 2 3 9 6 Addback of non-cash valuation charge associated with PHH spin-off - - - 180 Tax payments, net of refunds (159) (82) (251) (99) Working capital and other 335 167 22 (49) Capital expenditures (86) (80) (148) (133) Free Cash Flow before Management Programs and Stockholder Litigation Payments 463 598 235 686 Management programs (A) (D) (1,951) (49) (1,966) (60) Stockholder litigation payments - - (32) - Free Cash Flow (B) (1,488) 549 (1,763) 626 Current period acquisitions, net of cash acquired (66) (56) (180) (87) Payments related to prior period acquisitions (103) (19) (123) (40) Proceeds from disposition of businesses, net (9) 6 (28) 964 Net repurchases of common stock 14 (158) (207) (269) Payment of dividends - (96) (113) (192) Investments and other (C) 29 (1) 74 (1,380) Cash reduction due to spin-off of PHH - - - (259) Net borrowings (D) 1,838 (45) 2,051 576 Net increase (decrease) in cash and cash equivalents (per Table 6) $215 $180 $(289) $(61) (*) See Table 8 for a description of Free Cash Flow. (A) Cash flows related to management programs may fluctuate significantly from period to period due to the timing of the underlying transactions. For the three months ended June 30, 2006 and 2005, the net cash flows from the activities of management programs are reflected on Table 6 as follows: (i) net cash provided by operating activities of $165 million and $176 million, respectively, (ii) net cash used in investing activities of $836 million and $1,123 million, respectively, and (iii) net cash provided by (used in) financing activities of $(1,280) million and $898 million, respectively. For the six months ended June 30, 2006 and 2005, the net cash flows from the activities of management programs are reflected on Table 6 as follows: (i) net cash provided by operating activities of $397 million and $442 million, respectively, (ii) net cash used in investing activities of $1,687 million and $2,750 million, respectively, and (iii) net cash provided by (used in) financing activities of $(676) million and $2,248 million, respectively. (B) Free cash flow amounts for the three and six months ended June 30, 2006 are not comparable to the corresponding amounts in 2005 due to the repayment of debt under management programs with proceeds generated from corporate financings of Avis Budget Car Rental, LLC, which is described in (D), below. (C) Represents net cash provided by discontinued operations, the effects of exchange rates on cash and cash equivalents, other investing and financing activities and the change in restricted cash. (D) Includes the repayment of our vehicle-related debt utilizing proceeds of $1,875 million received in connection with the issuance of $1,000 million of unsecured fixed rate notes and floating rate notes and an $875 million secured floating rate term loan under a senior credit facility by Avis Budget Car Rental, LLC, the parent company of our vehicle rental operations. RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES (In millions) Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 Free Cash Flow (per above) $(1,488) $549 $(1,763) $626 Cash (inflows) outflows included in Free Cash Flow but not reflected in Net Cash Provided by Operating Activities: Investing activities of management programs 836 1,123 1,687 2,750 Financing activities of management programs 1,280 (898) 676 (2,248) Capital expenditures 86 80 148 133 Proceeds received on asset sales (7) (7) (11) (13) Change in restricted cash 17 22 17 16 Net Cash Provided by Operating Activities (per Table 6) $724 $869 $754 $1,264 Table 8 Cendant Corporation and Subsidiaries Definitions of Non-GAAP Measures The accompanying press release includes certain non-GAAP (generally accepted accounting principles) financial measures as defined under SEC rules. As required by SEC rules, we have provided below the reasons we present these non-GAAP financial measures and a description of what they represent. EBITDA Represents income from continuing operations before non- program related depreciation and amortization, non- program related interest, amortization of pendings and listings, income taxes and minority interest. We believe that EBITDA is useful as a supplemental measure in evaluating the aggregate performance of our operating businesses. EBITDA is the measure that is used by our management, including our chief operating decision maker, to perform such evaluation, and it is a factor in measuring performance in our incentive compensation plans. It is also a component of our financial covenant calculations under our credit facilities, subject to certain adjustments. EBITDA should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with GAAP and our presentation of EBITDA may not be comparable to similarly- titled measures used by other companies. Second Quarter Represents second quarter 2006 EPS from Continuing 2006 EPS from Operations excluding pre-tax charges of (i) $49 million Continuing that were incurred in connection with the execution of Operations our plan to separate Cendant into four independent before companies, (ii) $14 million related to restructuring Separation initiatives primarily within our Realogy segment and and (iii) $36 million related to local taxes payable in Restructuring certain international jurisdictions in our Hospitality Costs and segment. The most directly comparable GAAP measure for Wyndham EPS from Continuing Operations before Separation and Worldwide Restructuring Costs and Wyndham Worldwide tax accrual is tax accrual EPS from Continuing Operations, which is presented in the earnings release. We exclude separation and restructuring costs and the Wyndham Worldwide tax accrual as such costs are not representative of the results of operations of our core businesses at June 30, 2006. Additionally, management believes excluding such costs presents our second quarter 2006 results on a more comparable basis to 2005, thereby providing greater transparency into the results of operations of our core businesses at June 30, 2006. Free Cash Flow Represents Net Cash Provided by Operating Activities adjusted to include the cash inflows and outflows relating to (i) capital expenditures, (ii) the investing and financing activities of our management programs, (iii) asset sales and (iv) the change in restricted cash. We believe that Free Cash Flow is useful to management and the Company's investors in measuring the cash generated by the Company that is available to be used to repurchase stock, repay debt obligations, pay dividends and invest in future growth through new business development activities or acquisitions. Free Cash Flow should not be construed as a substitute in measuring operating results or liquidity, and our presentation of Free Cash Flow may not be comparable to similarly titled measures used by other companies. A reconciliation of Free Cash Flow to the appropriate measure recognized under GAAP (Net Cash Provided by Operating Activities) is presented in Table 7, which accompanies this press release. DATASOURCE: Cendant Corporation CONTACT: Media Contacts: Kelli Segal, Cendant Corporation, +1-212-413-1871; Mark Panus, Realogy Corporation, +1-973-407-7215; Investor Contacts: Sam Levenson, Cendant Corporation, +1-212-413-1834; Henry A. Diamond, Realogy Corporation +1-973-407-2710; Margo C. Happer, Wyndham Worldwide Corporation, +1-973-496-2705; David Crowther, Avis Budget Group, +1-973-496-7277 Web site: http://www.cendant.com/

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