Cendant Reports Results for First Quarter 2005

NEW YORK, April 25 /PRNewswire-FirstCall/ -- Cendant Corporation today reported results for first quarter 2005, which reflected revenue growth in the Company's core real estate and travel services businesses. Revenue totaled $3.9 billion, an increase of 10% over first quarter 2004. EPS from Continuing Operations was $0.06, including a previously disclosed non-cash impairment charge of $180 million ($0.17 per share) in connection with the spin-off of PHH and a pretax charge of $49 million ($0.03 per share) related to restructuring activities undertaken following the PHH spin-off and initial public offering of Wright Express, and other transaction related costs. Net Income (Loss) was ($82) million, versus $441 million in first quarter 2004, reflecting the above-referenced charges as well as net losses of $145 million related to the disposition of discontinued operations.

Cendant's Chairman and Chief Executive Officer, Henry R. Silverman, stated: "Our first quarter results reflect the strength and improving fundamentals of our businesses, and our Board and management believe that our equity is being significantly undervalued by the market. Accordingly, we have doubled our planned minimum funding for share repurchases in 2005 to $1.0 billion, plus proceeds from option exercises."

Cendant's President and Chief Financial Officer, Ronald L. Nelson, elaborated: "The first quarter results reflect continued strong performance in the Company's core real estate and travel units, including record first quarter revenues in virtually all of our business units. While reported EPS was distorted by charges and integration costs, on an organic basis the Company's revenue and EBITDA from core operating segments increased by 8% and 9%, respectively, excluding the impact of the restructuring charges.

"Additionally, we are nearing completion of our strategic realignment to solely a travel and real estate services company. Already this year, we have successfully completed the spin-off of PHH, the IPO of Wright Express and the acquisitions of ebookers and Gullivers Travel Associates. As previously announced, we expect to complete the realignment with the sale of our Marketing Services Division in the third quarter.

"Looking ahead to 2006, we expect to achieve accelerated growth as we begin to reap the benefits of the investments we are making in 2005. In addition, we continue to return capital to shareholders through our dividend, which we recently increased by 22% effective in the third quarter, and by repurchasing $231 million of our stock ($111 million net of option exercise proceeds) during the first quarter."

First Quarter 2005 Results of Core Operating Segments

The following discussion of operating results focuses on revenue and EBITDA for each of our core operating segments. Revenue and EBITDA are expressed in millions.

Real Estate Services

(Consisting of the Company's real estate franchise brands, brokerage operations, relocation services, settlement services and, subsequent to January 31, 2005, the mortgage origination venture with PHH Corporation)

2005 2004 % change Revenue $ 1,410 $ 1,216 16% EBITDA $ 161 $ 131 23%

Revenue and EBITDA increased primarily due to strong growth in royalties earned by our real estate franchise businesses and real estate commissions earned by NRT, our real estate brokerage unit. Real estate franchise royalty and marketing fund revenue increased 29%, primarily due to a 15% increase in the average price of homes sold and a 9% increase in organic closed sides volume. Revenue generated by NRT increased 17%, primarily due to a 20% increase in the average price of homes sold. Closed sides volume at NRT declined, as expected, reflecting unusually low inventories of homes for sale in the primary coastal regions where NRT operates, which also positively impacted pricing growth. In addition, EBITDA includes a previously disclosed $4 million charge related to restructuring activities.

Hospitality Services

(Consisting of the Company's franchised lodging brands, timeshare exchange and vacation rental businesses)

2005 2004 % change Revenue $ 395 $ 331 19% EBITDA $ 125 $ 126 (1%)

Revenue increased due to growth in all of our hospitality services businesses. Revenue from lodging franchise grew 20%, including a 13% increase in revenue per available room; revenue from our timeshare exchange business increased 6%, including a 5% increase in subscribers; and revenue from our vacation rental business increased 52% due to the 2004 acquisitions of Landal GreenParks and Canvas Holidays Limited. EBITDA was negatively impacted by a $6 million loss at Landal GreenParks, which we did not own in first quarter 2004, and a previously disclosed $5 million charge related to restructuring activities. Landal GreenParks is seasonally weakest and generally operates at a loss in the first quarter.

Timeshare Resorts (Consisting of the Company's timeshare sales and development businesses) 2005 2004 % change Revenue $ 368 $ 350 5% EBITDA $ 40 $ 43 (7%)

Revenue grew due to an 8% increase in tour volume and a 15% increase in average price per sales transaction, partially offset by lower close rates and a reduction in high-margin upgrade sales, which were $12 million higher in first quarter 2004 due to a special promotion. Tour flow and average price were enhanced by our expansion in premium destinations including Hawaii, Las Vegas and Orlando, the opening of new sales offices and marketing alliances. EBITDA comparisons were negatively impacted primarily by the reduction in upgrade sales and by a previously disclosed $1 million charge related to restructuring activities.

Vehicle Rental (Consisting of the Company's car and truck rental businesses) 2005 2004 % change Revenue $ 1,089 $ 1,001 9% EBITDA $ 66 $ 68 (3%)

Revenue increased due to growth in our Avis and Budget car rental operations and our Budget truck rental operations. Car rental revenue increased 9% worldwide due to a 10% increase in rental day volume, which was partially offset by a 2% decrease in price. The reduced pricing resulted primarily from the Company's strategic decision to reposition Budget to be more competitive with other leisure-focused car rental brands, which in turn had a positive impact on rental day volume growth. In addition, truck rental revenue increased 11%. The positive revenue impact was more than offset in EBITDA by a previously disclosed $8 million charge related to restructuring activities and by higher vehicle depreciation and operating expenses due to growth in our rental fleet to support higher demand.

Travel Distribution Services

(Consisting of electronic global distribution services for the travel industry, corporate and consumer online travel services, and travel agency services)

2005 2004 % change Revenue $ 552 $ 452 22% EBITDA $ 129 $ 124 4%

Revenue and EBITDA increased principally due to growth in our online travel agency businesses. The acquisitions of Orbitz, ebookers and Flairview Travel contributed $114 million of revenue and $12 million of EBITDA, despite $10 million of costs incurred to integrate these businesses. Apart from these acquisitions, revenue in our travel agency businesses increased $12 million, or 44% organically, driven by 43% growth in on-line gross bookings, substantially at CheapTickets.com, which also experienced improved margins. Revenue from GDS and Supplier Services decreased 3% primarily due to a decline in global GDS yield. In addition, revenue was negatively impacted by $15 million due to the transfer of our membership travel business to our Marketing Services Division effective January 1, 2005. EBITDA comparisons were negatively impacted by a previously disclosed $10 million charge related to restructuring activities and by $11 million relating to a benefit plan change that reduced expenses in first quarter 2004.

Recent Achievements and Strategic Initiatives -- Generated Net Cash Provided by Operating Activities of $585 million and Free Cash Flow of $236 million. For the full year 2005, the Company continues to project more than $3 billion of Net Cash Provided by Operating Activities and almost $2 billion of Free Cash Flow. However, the seasonality of the Company's cash flow has changed as a result of the recent divestitures and increasing focus on travel. Therefore, the majority of the Company's Free Cash Flow is expected to be generated during the second and third quarters of this year. -- Utilized $231 million of cash for the repurchase of common stock ($111 million net of proceeds from option exercises). In addition, the Company today announced that its Board of Directors approved a $500 million increase to the Company's existing stock repurchase program and that the Company plans to utilize at least $1.0 billion, plus proceeds from option exercises, for share repurchases in 2005, an increase of $400 - 600 million from its previously announced plan. The Company expects that fully diluted shares will decrease by about 10 million shares per quarter during the remainder of 2005. Fully diluted shares decreased by approximately 4.5 million as of March 31, 2005 from the December 31, 2004 amount. In addition, the Company recently: -- Completed the spin-off of its former mortgage, fleet leasing and appraisal businesses to Cendant's shareholders in a tax-free distribution of the common stock of PHH Corporation. In connection with the spin-off, Cendant entered into a mortgage origination venture with PHH. PHH will manage this venture. Cendant did not retain any mortgage servicing rights asset risk. -- Completed the sale of 100% of its ownership interest in Wright Express in an initial public offering. Cendant received approximately $1 billion in aggregate proceeds from the transaction. -- Completed the acquisition of UK-based ebookers, a leading pan-European travel agency with Web sites serving 13 European countries. The acquisition is expected to be neutral to Cendant's EPS in 2005, including the impact of integration costs, and $0.02 - $0.03 accretive in 2006. -- Completed the acquisition of UK-based Gullivers Travel Associates, including its Octopus Travel Group Ltd. subsidiary. Gullivers is a leading wholesaler of hotel stays, destination services, travel packages and group tours, primarily serving the Asian and European markets, and OctopusTravel.com is a global online provider of lodging and destination services, selling directly to consumers, as well as through third-party affiliates and primarily low cost airlines. The transaction is expected to be $0.00 - $0.01 dilutive to Cendant's EPS in 2005, including the impact of integration costs, and $0.05 - $0.06 accretive in 2006. -- Announced a 22% increase in the Company's regular quarterly cash dividend to $0.11 from $0.09 per common share, effective with the third quarter 2005 dividend payment and subject to official declaration of such dividend by its Board of Directors. -- Announced that, pursuant to the recently enacted American Jobs Creation Act, the Company plans to repatriate approximately $555 million of foreign earnings and profits in 2005, which it will use for domestic investment purposes. -- Announced that, with respect to the sale of the Marketing Services Division, the process is progressing as planned and the Company has received several non-binding indications of interest well in excess of $2 billion. As a result, the Company continues to expect that the disposition will be completed during the third quarter of 2005. See Forward Looking Statements at the end of this release for certain contingencies relating to the Marketing Services Division disposition. Other Items -- Corporate and Other - The first quarter 2005 Revenue and EBITDA amounts include gains of $18 million related to the Company's sales of Homestore common stock, versus gains of $33 million in first quarter 2004. The gains in first quarter 2005 were offset in EBITDA by previously disclosed charges aggregating $18 million related to restructuring activities. -- Mortgage Services - Revenue and EBITDA amounts reflect the results of the Company's former mortgage unit for the full first quarter in 2004 but only for the month of January in 2005, due to the spin-off of PHH Corporation on January 31, 2005. In addition, Mortgage Services EBITDA in first quarter 2005 includes the previously disclosed non-cash impairment charge of $180 million ($0.17 per share) and transaction costs of $3 million, both in connection with the spin-off of PHH. -- Depreciation and Amortization - First quarter 2005 results include $11 million of accelerated depreciation and amortization related to the Orbitz acquisition. -- Provision for Income Taxes - The Company's effective tax rate for first quarter 2005 was higher primarily due to the non-deductibility of the impairment charge associated with the PHH spin-off. -- Discontinued Operations - Includes income from the Company's Marketing Services Division and former fleet, Wright Express and appraisal units, which have been reclassified as discontinued operations. Also includes a previously disclosed non-cash impairment charge of $308 million ($0.29 per share) and transaction costs of $4 million, both in connection with the spin-off of PHH, and a gain on the disposal of Wright Express of $175 million ($0.16 per share). Outlook

The Company increased the low-end of its EPS projections for full year 2005, announced in its press release dated April 6, 2005, by $0.01 per share to reflect the impact of the first quarter results:

Second Third Fourth Full Quarter Quarter Quarter Year 2005 EPS from Continuing Operations before Transaction Related Charges $0.34 - $0.36 $0.47 - $0.50 $0.29 - $0.32 $1.35 - $1.42 2005 Transaction Related Charges(a) - - - ($0.20) 2005 EPS from Continuing Operations(a) $0.34 - $0.36 $0.47 - $0.50 $0.29 - $0.32 $1.15 - $1.22 2006 EPS from Continuing Operations $1.62 - $1.72 (a) Includes a non-cash impairment charge of $0.17 per share in connection with the spin-off of PHH and a $0.03 per share charge related to restructuring activities and other transaction related costs, both of which were recorded in first quarter 2005.

The Company continues to expect each of its core operating segments to report growth in revenue and EBITDA for full year 2005, despite the charges related to restructuring activities recorded in the first quarter and integration costs throughout the year. In particular, the Company announced the following detailed financial projections for full year 2005:

(in millions) Full Year 2004 Full Year 2005 Actual Projected (a) Revenue Real Estate Services $6,552 $7,050 - 7,250 Hospitality Services 1,340 1,500 - 1,575 Timeshare Resorts 1,544 1,650 - 1,725 Vehicle Rental 4,424 4,750 - 5,000 Total Travel Content $7,308 $7,900 - 8,300 Travel Distribution Services (b) 1,788 2,600 - 2,700 Total Travel $9,096 $10,500 - 11,000 Total Core Operating Segments $15,648 $17,625 - 18,125 Mortgage Services (c) 700 46 Corporate and Other 56 4 - 54 Total Company $16,404 $17,675 - 18,225 EBITDA (d) Real Estate Services $1,131 $1,150 - 1,200 Hospitality Services 460 485 - 510 Timeshare Resorts 254 265 - 290 Vehicle Rental 467 475 - 525 Total Travel Content $1,181 $1,225 - 1,325 Travel Distribution Services 466 640 - 690 Total Travel $1,647 $1,865 - 2,015 Total Core Operating Segments $2,778 $3,070 - 3,130 Mortgage Services (c) (e) 97 (181) Corporate and Other (66) (144 - 109) Depreciation and amortization (f) (483) (580 - 550) Amortization of pendings/listings (16) (25 - 15) Interest expense, net (f) (g) (263) (195 - 175) Pretax income (d) (e) $2,047 $1,945 - 2,100 Provision for income taxes (674) (725 - 780) Minority interest (8) (5 - 10) Income from continuing operations (d) (e) $1,365 $1,215 - 1,310 Diluted weighted average shares outstanding (h) 1,064 1,075 - 1,060 (a) Projections do not total because we do not expect the actual results of all segments to be at the lowest or highest end of any projected range simultaneously. (b) 2005 revenue projections for Travel Distribution Services have been reduced by $100 million to reflect the impact of the transfer of our membership travel business to our Marketing Services Division effective January 1, 2005. (c) Reflects the results of the Company's former mortgage unit for the full year in 2004 but only for the month of January in 2005, due to the spin-off of PHH Corporation on January 31, 2005. (d) 2005 includes approximately $53 million of pretax charges related to restructuring activities and other transaction related costs, approximately $49 million of which was recorded in the first quarter. (e) 2005 includes the previously disclosed non-cash impairment charge recorded in connection with the spin-off of PHH of $180 million ($0.17 per share). (f) Depreciation and amortization excludes amounts related to our assets under management programs, and interest expense excludes amounts related to our debt under management programs, both of which are already reflected in EBITDA. (g) 2005 interest expense includes the reversal of $73 million of accrued interest in the first quarter related to a litigation settlement. (h) Diluted weighted average shares outstanding is expected to increase modestly in 2005 due primarily to the full-year impact of the settlement of the Upper DECS securities in August 2004, which resulted in the issuance of 38 million shares of Cendant common stock. Our diluted shares outstanding are expected to decrease throughout 2005 due to share repurchases. However, diluted shares outstanding may be influenced by factors outside of the Company's control, including Cendant's stock price. Investor Conference Call

Cendant will host a conference call to discuss the first quarter results on Tuesday, April 26, 2005, at 11:00 a.m. (ET). Investors may access the call live at http://www.cendant.com/ or by dialing 312-461-9409. 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 April 26, 2005 until 8:00 p.m. (ET) on May 3, 2005 at 719-457-0820, access code: 9297747.

Cendant Corporation is primarily a provider of travel and residential real estate services. With approximately 80,000 employees, New York City-based Cendant provides these services to businesses and consumers in over 100 countries. More information about Cendant, its companies, brands and current SEC filings may be obtained by visiting the Company's Web site at http://www.cendant.com/.

Forward Looking Statements

Statements about future results made in this release, including the projections and the statements attached hereto, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and the current economic environment. The Company cautions that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. 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 Form 10-K for the year ended December 31, 2004.

Such forward-looking statements include projections. Such projections were not prepared in accordance with published guidelines of the American Institute of Certified Public Accountants or the SEC regarding projections and forecasts, nor have such projections been audited, examined or otherwise reviewed by independent auditors of Cendant or its affiliates. In addition, such projections are based upon many estimates and are inherently subject to significant economic, competitive and other uncertainties and contingencies. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by Cendant or its affiliates that the projections will prove to be correct.

In connection with the disposition of the Marketing Services Division, the transaction is subject to a number of uncertainties and there can be no assurances that a transaction will be entered into, or consummated during the time period expected by Cendant or at a specific valuation. The ability to enter into the transaction, consummate the transaction and/or obtain a specific valuation is subject to completion of due diligence by the prospective purchasers, the negotiation of definitive documentation relating to the transaction, the ability of such purchasers to finance the transaction, changes in the business or prospects of the Marketing Services Division and receipt of any necessary consents and/or regulatory approvals.

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 10 to this release.

Table 1 Cendant Corporation and Subsidiaries SUMMARY DATA SHEET (Dollars in millions, except per share data) First Quarter 2005 2004 % Change Income Statement Items Net Revenues $3,877 $3,540 10% Pretax Income (A) 179 296 (40%) Income from Continuing Operations 63 200 (69%) EPS from Continuing Operations (diluted) 0.06 0.19 (68%) Cash Flow Items Net Cash Provided by Operating Activities $585 $346 Free Cash Flow (B) 236 262 Payments Made for Current Period Acquisitions, Net of Cash Acquired (393) (100) Net Borrowings 597 9 Net Repurchases of Common Stock (111) (405) Payment of Dividends (96) (72) As of As of March 31, December 31, 2005 2004 Balance Sheet Items Total Corporate Debt $4,908 $4,330 Cash and Cash Equivalents 1,363 467 Total Stockholders' Equity 11,195 12,695 Segment Results First Quarter 2005 2004 % Change Net Revenues Real Estate Services $1,410 $1,216 16% Hospitality Services 395 331 19% Timeshare Resorts 368 350 5% Vehicle Rental 1,089 1,001 9% Total Travel Content 1,852 1,682 10% Travel Distribution Services 552 452 22% Total Travel 2,404 2,134 13% Total Core Operating Segments 3,814 3,350 14% Mortgage Services 46 152 * Corporate and Other 17 38 * Total Company $3,877 $3,540 10% EBITDA (C) Real Estate Services $161 $131 23% Hospitality Services 125 126 (1%) Timeshare Resorts 40 43 (7%) Vehicle Rental 66 68 (3%) Total Travel Content 231 237 (3%) Travel Distribution Services 129 124 4% Total Travel 360 361 - Total Core Operating Segments 521 492 6% Mortgage Services (181) 1 * Corporate and Other (39) (5) * Total Company $301 $488 (38%) Reconciliation of EBITDA to Pretax Income Total Company EBITDA $301 $488 Less: Non-program related depreciation and amortization 137 111 Non-program related interest expense, net (18) 77 Amortization of pendings and listings 3 4 Pretax Income (A) $179 $296 (40%) * 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 10 for a description of Free Cash Flow and Table 8 for the underlying calculations. (C) See Table 10 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 March 31, 2005 2004 Revenues Service fees and membership, net $2,756 $2,497 Vehicle-related 1,089 1,001 Other 32 42 Net revenues 3,877 3,540 Expenses Operating 2,252 2,050 Vehicle depreciation, lease charges and interest, net 324 311 Marketing and reservation 424 355 General and administrative 336 333 Non-program related depreciation and amortization 137 111 Non-program related interest expense, net (18) 77 Acquisition and integration related costs: Amortization of pendings and listings 3 4 Other 11 3 Restructuring and transaction- related charges 49 - Valuation charge associated with PHH spin-off 180 - Total expenses 3,698 3,244 Income before income taxes and minority interest 179 296 Provision for income taxes 115 92 Minority interest, net of tax 1 4 Income from continuing operations 63 200 Income (loss) from discontinued operations, net of tax (*) (8) 241 Loss on disposal of discontinued operations, net of tax Valuation and transaction-related charges associated with PHH spin- off (312) - Gain on disposal of Wright Express Corporation 175 - Net income (loss) $(82) $441 Earnings per share Basic Income from continuing operations $0.06 $0.20 Income (loss) from discontinued operations (0.01) 0.23 Loss on disposal of discontinued operations (0.13) - Net income (loss) $(0.08) $0.43 Diluted Income from continuing operations $0.06 $0.19 Income (loss) from discontinued operations (0.01) 0.23 Loss on disposal of discontinued operations (0.13) - Net income (loss) $(0.08) $0.42 Weighted average shares outstanding Basic 1,053 1,015 Diluted 1,079 1,059 (*) Includes the results of operations of (i) the Company's former fuel card business, Wright Express Corporation, which was disposed of in February 2005, (ii) the Company's former fleet leasing and appraisal businesses, which were spun-off with its former mortgage business in January 2005 (the Company was prohibited from presenting the former mortgage business as a discontinued operation due to its participation in a venture), (iii) the Company's Marketing Services division, for which its Board of Directors formally approved a disposition plan in March 2005 and (iv) in 2004, the Company's former tax preparation business, Jackson Hewitt Tax Service Inc., which was disposed of in June 2004. Table 3 Cendant Corporation and Subsidiaries ORGANIC GROWTH BY SEGMENT (In millions) REVENUES First Quarter 2005 2004 %* Real Estate Services (B) $1,348 $1,215 11% Hospitality Services (C) 351 331 6% Timeshare Resorts (D) 368 344 7% Vehicle Rental 1,089 1,001 9% Total Travel Content 1,808 1,676 8% Travel Distribution Services (E) 438 437 - Total Travel 2,246 2,113 6% Total Core Operating Segments $3,594 $3,328 8% EBITDA Excluding Restructuring EBITDA Charges First Quarter First Quarter 2005 2004 %* 2005(A) 2004 %* Real Estate Services (B) $153 $131 17% $157 $131 20% Hospitality Services (C) 127 126 1% 132 126 5% Timeshare Resorts (D) 40 37 7% 41 37 8% Vehicle Rental 66 68 (3%) 74 68 8% Total Travel Content 233 231 1% 247 231 6% Travel Distribution Services (E) 118 123 (4%) 128 123 4% Total Travel 351 354 (1%) 375 354 6% Total Core Operating Segments $504 $485 4% $532 $485 9% Reconciliation of Organic EBITDA to Pretax Income Pretax Income (F) $179 $296 $179 $296 Add: Non-program related depreciation and amortization 137 111 137 111 Non-program related interest expense, net (18) 77 (18) 77 Amortization of pendings and listings 3 4 3 4 Total Company EBITDA 301 488 301 488 Less: Mortgage Services (181) 1 (181) 1 Corporate and Other (39) (5) (39) (5) EBITDA for Total Core Operating Segments 521 492 521 492 Adjustments to arrive at Organic EBITDA for Total Core Operating Segments (17) (7) 11 (7) Organic EBITDA for Total Core Operating Segments (per above) $504 $485 $532 $485 * Amounts may not calculate due to rounding in millions. (A) Excludes restructuring charges of $4 million, $5 million, $1 million, $8 million and $10 million within the Real Estate Services, Hospitality Services, Timeshare Resorts, Vehicle Rental and Travel Distribution Services segments, respectively. (B) Includes a reduction to revenue and EBITDA growth of $61 million and $8 million, respectively, primarily related to the acquisition of Sotheby's International Realty in February 2004, the acquisitions of significant real estate brokerage businesses during or subsequent to first quarter 2004 and a refinement during first quarter 2005 to how we estimate transactions that closed during the quarter when those transactions have not yet been reported to us by our franchisees. (C) Includes a reduction to revenue growth of $44 million and an increase to EBITDA growth of $2 million primarily related to the acquisition of Landal GreenParks in May 2004 and Canvas Holidays Limited in October 2004. (D) Includes an increase to revenue and EBITDA growth of $6 million each primarily related to the sale of Equivest Capital in March 2004. (E) Includes a reduction to revenue and EBITDA growth of $99 million and $10 million, respectively, primarily related to the acquisitions of Orbitz, Inc. (November 2004), ebookers plc (February 2005) and Flairview Travel (April 2004), partially offset by the transfer of the Company's membership travel business to the discontinued Marketing Services division. (F) See Table 2 for a reconciliation of Pretax Income to Net Income. Table 4 (page 1 of 2) Cendant Corporation and Affiliates SEGMENT REVENUE DRIVER ANALYSIS (*) (Revenue dollars in thousands) First Quarter 2005 2004 % Change REAL ESTATE SERVICES SEGMENT Real Estate Franchise Closed Sides (A) 389,374 341,741 14% Average Price $208,412 $181,466 15% Royalty and Marketing Revenue (B) $115,870 $89,735 29% Total Revenue (B) $125,266 $98,434 27% Real Estate Brokerage Closed Sides 91,757 95,767 (4%) Average Price $463,177 $385,365 20% Net Revenue from Real Estate Transactions (C) $1,097,687 $940,013 17% Total Revenue (C) $1,113,164 $951,710 17% Relocation Transaction Volume 18,629 18,992 (2%) Total Revenue $105,626 $105,705 - Settlement Services Purchase Title and Closing Units 29,323 27,605 6% Refinance Title and Closing Units 11,914 12,915 (8%) Total Revenue $68,430 $62,632 9% HOSPITALITY SERVICES SEGMENT Lodging RevPAR (D) $25.53 $22.50 13% Weighted Average Rooms Available (D) 517,354 511,962 1% Royalty, Marketing and Reservation Revenue (C) $84,704 $77,830 9% Total Revenue (C) $111,727 $93,063 20% RCI Average Number of Subscribers 3,147,721 2,994,799 5% Subscriber Related Revenue $173,451 $163,779 6% Total Revenue $179,877 $169,542 6% Vacation Rental Group (E) Cottage Weeks Sold 321,616 325,568 (1%) Total Revenue $103,628 $68,343 52% (*) Certain of the 2004 amounts presented herein have been revised to reflect the new segment reporting structure and a new presentation of drivers. All comparable quarterly amounts for 2003 and 2004 are available on the Cendant website, which may be accessed at http://www.cendant.com/. (A) The 2005 amount reflects a 5% increase resulting from a refinement to how we estimate transactions that closed during the quarter when those transactions have not yet been reported to us by our franchisees. Excluding this effect, closed sides increased 9%. (B) During the three months ended March 31, 2005 and 2004, intercompany royalties paid by NRT were $73 million and $64 million, respectively. (C) The 2005 amounts include the revenues of businesses acquired during or subsequent to first quarter 2004 and are therefore not comparable to the 2004 amounts. (D) We acquired the Ramada International Hotels and Resorts trademark on December 10, 2004. The 2004 drivers do not include RevPAR and Weighted Average Rooms Available of Ramada International. On a comparable basis (excluding Ramada International from the 2005 amounts), RevPAR would have increased 10% and Weighted Average Rooms Available would have decreased 4%. (E) We acquired Landal GreenParks on May 5, 2004. Revenue generated by Landal prior to acquisition is not reflected in the revenue data presented herein and, therefore, the revenue data are not comparable. However, the number of cottage weeks sold for first quarter 2004 has been adjusted to include 84,583 cottage weeks sold by Landal so as to present comparable driver data. Table 4 (page 2 of 2) Cendant Corporation and Affiliates SEGMENT REVENUE DRIVER ANALYSIS (*) (Revenue dollars in thousands) First Quarter 2005 2004 % Change TIMESHARE RESORTS SEGMENT Tours 194,908 181,038 8% Total Revenue $368,458 $350,451 5% VEHICLE RENTAL SEGMENT Car Rental Days (000's) 22,044 20,036 10% Time and Mileage Revenue per Day $38.84 $39.74 (2%) Total Car Revenue $986,494 $909,143 9% Truck Total Truck Revenue $102,047 $91,888 11% TRAVEL DISTRIBUTION SERVICES SEGMENT Transaction Volume, by Region (000's) (A) United States 30,395 28,283 7% International 45,856 47,378 (3%) Transaction Volume, by Channel (000's) Traditional Agency 66,404 68,812 (3%) Online (A) 9,847 6,849 44% Online Gross Bookings ($000's) (B) $1,868,862 $1,568,140 19% Offline Gross Bookings ($000's) (B) $158,339 $319,358 (50%) GDS and Supplier Services Revenue (C) $397,697 $409,465 (3%) Owned Travel Agency Revenue (D) $153,911 $42,600 261% (*) Certain of the 2004 amounts presented herein have been revised to reflect the new segment reporting structure and a new presentation of drivers. All comparable quarterly amounts for 2003 and 2004 are available on the Cendant website, which may be accessed at http://www.cendant.com/. (A) Includes supplier link and merchant hotel transactions not booked through the Galileo GDS system. (B) We acquired ebookers plc on February 28, 2005, Orbitz, Inc. on November 12, 2004 and Flairview Travel on April 2, 2004. Revenue generated by these businesses prior to acquisition is not reflected in the revenue data presented herein and, therefore, the revenue data are not comparable. However, the online gross bookings and offline gross bookings data for first quarter 2004 have been adjusted to include bookings of $1,288 million and $105 million, respectively, by these businesses so as to present comparable driver data. (C) We refer to this as our "Order Taker" business. Includes Galileo revenue of $390.4 million and $401.1 million for first quarter 2005 and 2004, respectively. (D) We refer to this as our "Order Maker" business, which is primarily comprised of ebookers, Orbitz, Flairview, Cheaptickets and Lodging.com. Table 5 Cendant Corporation and Subsidiaries CONSOLIDATED CONDENSED BALANCE SHEETS (In billions) As of As of March 31, 2005 December 31, 2004 Assets Current assets: Cash and cash equivalents $1.4 $0.5 Assets of discontinued operations 1.1 6.6 Other current assets 3.3 2.6 Total current assets 5.8 9.7 Property and equipment, net 1.6 1.7 Goodwill 11.2 11.1 Other non-current assets 4.2 5.4 Total assets exclusive of assets under programs 22.8 27.9 Assets under management programs 11.9 14.7 Total assets $34.7 $42.6 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt $1.4 $0.7 Liabilities of discontinued operations 0.7 5.3 Other current liabilities 4.3 4.4 Total current liabilities 6.4 10.4 Long-term debt 3.5 3.6 Other non-current liabilities 1.5 1.5 Total liabilities exclusive of liabilities under programs 11.4 15.5 Liabilities under management programs (*) 12.1 14.4 Total stockholders' equity 11.2 12.7 Total liabilities and stockholders' equity $34.7 $42.6 (*) Liabilities under management programs includes deferred income tax liabilities of $1.8 billion and $2.2 billion as of March 31, 2005 and December 31, 2004, respectively. Table 6 Cendant Corporation and Subsidiaries SCHEDULE OF CORPORATE DEBT (*) (In millions) Maturity Date March 31, December 31, 2005 2004 Net Debt August 2006 6 7/8% notes $850 $850 August 2006 4.89% notes 100 100 January 2008 6 1/4% notes 798 797 March 2010 6 1/4% notes 349 349 January 2013 7 3/8% notes 1,191 1,191 March 2015 7 1/8% notes 250 250 November 2009 Revolver borrowings (A) 1,310 650 Net hedging gains (losses) (B) (29) 17 Other 89 126 Total Debt 4,908 4,330 Less: Cash and cash equivalents 1,363 467 Net Debt $3,545 $3,863 Net Capitalization Total Stockholders' Equity $11,195 $12,695 Total Debt (per above) 4,908 4,330 Total Capitalization 16,103 17,025 Less: Cash and cash equivalents 1,363 467 Net Capitalization $14,740 $16,558 Net Debt to Net Capitalization Ratio (C) 24.1% 23.3% Total Debt to Total Capitalization Ratio 30.5% 25.4% (*) Amounts presented herein exclude assets and liabilities under management programs. (A) As of March 31, 2005, this balance primarily reflects borrowings of approximately $1.0 billion to fund the acquisition of Gullivers Travel Associates on April 1, 2005. (B) As of March 31, 2005, this balance represents $159 million of mark to market adjustments on current interest rate hedges, partially offset by $130 million of net gains resulting from the termination of interest rate hedges, which will be amortized by the Company to reduce future interest expense. (C) See Table 10 for a description of this ratio. Table 7 Cendant Corporation and Subsidiaries CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In millions) Three Months Ended March 31, 2005 2004 Operating Activities Net cash provided by operating activities exclusive of management programs $319 $136 Net cash provided by operating activities of management programs 266 210 Net Cash Provided by Operating Activities 585 346 Investing Activities Property and equipment additions (78) (91) Net assets acquired, net of cash acquired, and acquisition-related payments (455) (123) Proceeds received on asset sales 6 18 Proceeds from disposition of businesses, net of transaction-related payments 958 42 Other, net 21 45 Net cash provided by (used in) investing activities exclusive of management programs 452 (109) Management programs: Net change in program cash (143) 144 Net change in investment in vehicles (1,493) (1,440) Net change in relocation receivables (3) 19 Net change in mortgage servicing rights, related derivatives and mortgage-backed securities 12 141 (1,627) (1,136) Net Cash Used in Investing Activities (1,175) (1,245) Financing Activities Proceeds from borrowings - 19 Principal payments on borrowings (63) (10) Net change in short-term borrowings 660 - Issuances of common stock 120 207 Repurchases of common stock (231) (612) Payments of dividends (96) (72) Cash reduction due to spin-off of PHH (259) - Other, net 2 (1) Net cash provided by (used in) financing activities exclusive of management programs 133 (469) Management programs: Proceeds from borrowings 3,846 3,039 Principal payments on borrowings (2,451) (2,039) Net change in short-term borrowings (39) 129 Other, net (6) (4) 1,350 1,125 Net Cash Provided by Financing Activities 1,483 656 Effect of changes in exchange rates on cash and cash equivalents (27) (14) Cash provided by discontinued operations 30 43 Net increase (decrease) in cash and cash equivalents 896 (214) Cash and cash equivalents, beginning of period 467 746 Cash and cash equivalents, end of period $1,363 $532 Table 8 Cendant Corporation and Subsidiaries CONSOLIDATED SCHEDULES OF FREE CASH FLOWS (*) (In millions) Three Months Ended March 31, 2005 2004 Pretax income $179 $296 Addback of non-cash depreciation and amortization: Non-program related 137 111 Pendings and listings 3 4 Addback of non-cash valuation charge associated with PHH spin-off 180 - Tax payments, net of refunds (22) (56) Working capital and other (152) (201) Capital expenditures (78) (91) Management programs (A) (11) 199 Free Cash Flow 236 262 Current period acquisitions, net of cash acquired (393) (100) Payments related to prior period acquisitions (62) (23) Proceeds from disposition of businesses, net 958 42 Net repurchases of common stock (111) (405) Payment of dividends (96) (72) Investments and other (B) 26 73 Cash reduction due to spin-off of PHH (259) - Net borrowings 597 9 Net increase (decrease) in cash and cash equivalents (per Table 7) $896 $(214) (*) See Table 10 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 March 31, 2005 and 2004, the net cash flows from the activities of management programs are reflected on Table 7 as follows: (i) net cash provided by operating activities of $266 million and $210 million, respectively, (ii) net cash used in investing activities of $1,627 million and $1,136 million, respectively, and (iii) net cash provided by financing activities of $1,350 million and $1,125 million, respectively. (B) Represents net cash provided by discontinued operations, the effects of exchange rates on cash and cash equivalents and other investing and financing activities. RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES (In millions) Three Months Ended March 31, 2005 2004 Free Cash Flow (per above) $236 $262 Cash (inflows) outflows included in Free Cash Flow but not reflected in Net Cash Provided by Operating Activities: Investing activities of management programs 1,627 1,136 Financing activities of management programs (1,350) (1,125) Capital expenditures 78 91 Proceeds received on asset sales (6) (18) Net Cash Provided by Operating Activities (per Table 7) $585 $346 Full Year 2005 Projected Free Cash Flow $1,800 - $2,000 Cash outflows included in Free Cash Flow but not reflected in Net Cash Provided by Operating Activities: Investing and financing activities of management programs 800 - 1,000 Capital expenditures 450 - 500 Net Cash Provided by Operating Activities $3,050 - $3,500 Table 9 Cendant Corporation and Subsidiaries HISTORICAL SELECTED FINANCIAL DATA (In millions) The financial information presented below has been revised to reflect discontinued operations treatment for (i) the Company's former fuel card business, Wright Express Corporation, which was disposed of in February 2005, (ii) the Company's former fleet leasing and appraisal businesses, which were spun-off with its former mortgage business in January 2005 (the Company was prohibited from presenting the former mortgage business as a discontinued operation due to its participation in a venture), (iii) the Company's Marketing Services division, for which its Board of Directors formally approved a plan to dispose of in March 2005 and (iv) the Company's former tax preparation business, Jackson Hewitt Tax Service Inc., which was disposed of in June 2004. The financial information below also reflects a change in the Company's segment reporting structure whereby (i) the Company's timeshare resort businesses have been segregated from the Hospitality Services segment and reported as a separate segment, Timeshare Resorts, and (ii) the Company's settlement services business have been reclassified from the Mortgage Services segment to the Real Estate Services segment. 2004 1st 2nd 3rd 4th Revenues Quarter Quarter Quarter Quarter Full Year Real Estate Services $1,216 $1,908 $1,856 $1,572 $6,552 Hospitality Services 331 320 365 324 1,340 Timeshare Resorts 350 381 424 389 1,544 Vehicle Rental 1,001 1,119 1,243 1,061 4,424 Total Travel Content 1,682 1,820 2,032 1,774 7,308 Travel Distribution Services 452 448 437 451 1,788 Total Travel 2,134 2,268 2,469 2,225 9,096 Total Core Operating Segments 3,350 4,176 4,325 3,797 15,648 Mortgage Services 152 217 175 156 700 Corporate and Other 38 11 5 2 56 Total Company $3,540 $4,404 $4,505 $3,955 $16,404 2004 EBITDA 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Full Year Real Estate Services $131 $383 $379 238 $1,131 Hospitality Services 126 120 131 83 460 Timeshare Resorts 43 58 80 73 254 Vehicle Rental 68 140 179 80 467 Total Travel Content 237 318 390 236 1,181 Travel Distribution Services 124 118 123 101 466 Total Travel 361 436 513 337 1,647 Total Core Operating Segments 492 819 892 575 2,778 Mortgage Services 1 58 29 9 97 Corporate and Other (5) (39) (30) 8 (66) Total Company 488 838 891 592 2,809 Less: Non-program related depreciation and amortization 111 113 118 141 483 Non-program related interest expense, net 77 70 32 66 245 Early extinguishment of debt - 18 - - 18 Amortization of pendings and listings 4 4 5 3 16 Income before income taxes and minority interest 296 633 736 382 2,047 Provision for income taxes 92 212 238 132 674 Minority interest, net of tax 4 1 1 2 8 Income from continuing operations 200 420 497 248 1,365 Income from discontinued operations, net of tax 241 73 96 109 519 Gain on disposal of discontinued operations, net of tax - 198 - - 198 Net income $441 $691 $593 $357 $2,082 Diluted earnings per share Income from continuing operations $0.19 $0.40 $0.47 $0.23 $1.28 Income from discontinued operations 0.23 0.07 0.09 0.10 0.49 Gain on disposal of discontinued operations - 0.19 - - 0.19 Net income $0.42 $0.66 $0.56 $0.33 $1.96 Table 10 Cendant Corporation and Subsidiaries Definitions of Non-GAAP Measures

The accompanying press release includes certain non-GAAP 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 generally accepted accounting principles and our presentation of EBITDA may not be comparable to similarly titled measures used by other companies. A reconciliation of EBITDA to pretax income is included in Table 1 and a reconciliation of pretax income to net income is included in Table 2, both of which accompany this press release. Net Debt to Net Represents (i) net corporate debt (which reflects total Capitalization corporate debt adjusted to assume the application of Ratio available cash to reduce outstanding indebtedness) divided by (ii) net capitalization (which reflects total capitalization also adjusted for the application of available cash). We believe that this ratio is useful in measuring the Company's leverage and indicating the strength of its financial condition. We also believe that adjusting corporate debt to assume the application of available cash to reduce outstanding indebtedness eliminates the effect of timing differences relating to the use of debt proceeds. A reconciliation of the "Net Debt to Net Capitalization Ratio" to the appropriate measure recognized under generally accepted accounting principles (Total Debt to Total Capitalization Ratio) is presented in Table 6, which accompanies this press release. 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, and (iii) asset sales. 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 generally accepted accounting principles (Net Cash Provided by Operating Activities) is presented in Table 8, which accompanies this press release. Organic Growth Represents the results of our reportable operating segments excluding the impact of acquisitions and dispositions. We believe that Organic Growth is useful to management and the Company's investors in evaluating the operating performance of its reportable segments on a comparable basis. We also present Organic EBITDA growth excluding charges associated with the 2005 restructuring activities undertaken following the PHH spin-off and initial public offering of Wright Express. Our management believes this metric is useful in measuring the normalized performance of the Company's reportable operating segments. The reconciliations of Organic revenue and EBITDA growth to the comparable measures recognized under generally accepted accounting principles are presented in Table 3, which accompanies this press release. 2005 EPS from Represents EPS from Continuing Operations adjusted to Continuing exclude the non-cash impairment charge of $0.17 per Operations share and restructuring and transaction-related costs before of $0.03 per share. We believe that by providing the Transaction calculation of EPS from Continuing Operations both Related Charges including and excluding these charges, we are enhancing an investor's ability to analyze our financial results on a comparable basis, thereby providing greater transparency. We also believe that excluding the impairment charge is useful to investors because it is a non-cash charge directly resulting from the spin-off of PHH and will not recur in subsequent periods. EPS from Continuing before Transaction Related Charges should not be considered in isolation or as a substitute for EPS from Continuing Operations prepared in accordance with generally accepted accounting principles. A reconciliation of EPS from Continuing Operations before Transaction Related Charges to the most comparable measure (EPS from Continuing Operations) recognized under generally accepted accounting principles is presented within the body of the accompanying press release.