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Item
7.01
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Regulation
FD
Disclosure.
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Cendant
Corporation anticipates that it will disclose to prospective lenders in
connection with previously disclosed planned financings that the parent company
of its vehicle rental business, Cendant Car Rental Group, LLC (“CCRG”), which is
expected to change its name to Avis Budget Car Rental, LLC, had an intercompany
receivable from Cendant Corporation of approximately $800 million and
stockholder’s equity of approximately $2.9 billion at December 31, 2005. In
addition, Cendant plans to disclose that it currently estimates that the
replacement of general corporate overhead charges from Cendant with public
company costs will not have a material effect on the post-separation results
of
CCRG following Cendant's previously announced plan to separate into four
independent, publicly traded, pure-play companies — one each for Cendant’s real
estate, travel distribution, hospitality and vehicle rental businesses. Cendant
further anticipates the expected absence of intercompany interest income
(which
totaled approximately $20 million in 2005) from Cendant, however, to reduce
CCRG’s pretax income in future periods. Cendant also expects CCRG’s planned
borrowings of $1.875 billion, and the use of proceeds therefrom, to reduce
CCRG’s vehicle-backed interest expense, but to increase CCRG’s
non-vehicle-backed interest expense. The net increase in interest expense
will
depend on the rates at which the financings are effected, as well as future
market interest rates.
Forward-Looking
Statements
Certain
statements in this report 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 separation or any of the proposed transactions related
thereto will be completed, nor can it give assurances as to the terms on
which
such transactions will be consummated. The separation transactions are subject
to certain conditions precedent, including final approval by the Board of
Directors of Cendant.
Various
risks that could cause future results to differ from those expressed by the
forward-looking statements included in this report include, but are not limited
to: risks inherent in the contemplated separation and related transactions,
including risks related to borrowings and costs related to the proposed
transactions; increased demands on Cendant’s management teams as a result of the
proposed transactions; changes in business, political and economic conditions
in
the U.S. and in other countries in which Cendant and its companies currently
do
business; changes in governmental regulations and policies and actions of
regulatory bodies; changes in operating performance; and access to capital
markets and changes in credit ratings, including those that may result from
the
proposed transactions. 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 report 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 report. 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 10-K for the year ended December 31, 2005, 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 any revisions to any forward-looking statements, to
report
events or to report the occurrence of unanticipated events unless required
by
law.