SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to __________
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Commission File No. 1-10308
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Cendant Membership Services, Inc.
Savings Incentive Plan
(Full title of the Plan)
Cendant Corporation
(Name of issuer of the securities held pursuant to the Plan)
9 West 57th Street
New York, New York 10019
(Address of principal executive office)
CENDANT MEMBERSHIP SERVICES, INC.
SAVINGS INCENTIVE PLAN
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
Independent Auditors' Report
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997
Statements of Net Assets Available for Benefits
as of December 31, 1998 and 1997
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 1998 and 1997
Notes to Financial Statements
SUPPLEMENTAL SCHEDULES:
Item 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1998
Item 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1998
Schedules required under the Employee Retirement Income Security Act of 1974
("ERISA"), other than the schedules listed above, are omitted because of the
absence of the conditions under which they are required.
INDEPENDENT AUDITORS' REPORT
To the Trustees and Participants of
Cendant Membership Services, Inc. Savings Incentive Plan
Parsippany, New Jersey 07054
We have audited the accompanying statements of net assets available for benefits
of the Cendant Membership Services, Inc. Savings Incentive Plan (the "Plan") as
of December 31, 1998 and 1997, and the related statements of changes in net
assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1998 and 1997, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment purposes as of December 31, 1998 and (2) reportable
transactions for the year ended December 31, 1998 are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
/s/ Deloitte & Touche LLP
Parsippany, New Jersey
June 28, 1999
CENDANT MEMBERSHIP SERVICES, INC.
SAVINGS INCENTIVE PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1998 AND 1997
1998 1997
------------- ------------
ASSETS
Investments, at fair value $ 133,512,866 $137,550,992
Contributions receivable from:
Participants 392,679 329,760
Employer 148,345 134,619
Interest and dividends receivable 22,769 36,926
------------- ------------
Total receivables 563,793 501,305
------------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 134,076,659 $138,052,297
============= ============
See notes to financial statements.
CENDANT MEMBERSHIP SERVICES, INC.
SAVINGS INCENTIVE PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
------------- -------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions from:
Participants $ 12,999,827 $ 9,761,052
Employer 4,607,701 4,000,585
Rollovers 10,984,632 8,440,233
------------- -------------
Total contributions 28,592,160 22,201,870
------------- -------------
Investment income:
Net (depreciation) appreciation in fair value of investments (14,161,742) 28,796,409
Interest and dividends 2,225,798 2,379,464
------------- -------------
Total investment (losses) income (11,935,944) 31,175,873
-------------- -------------
Total additions 16,656,216 53,377,743
------------- -------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (20,631,854) (10,514,348)
------------- -------------
NET (DECREASE) INCREASE IN
NET ASSETS AVAILABLE FOR BENEFITS (3,975,638) 42,863,395
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 138,052,297 95,188,902
------------- -------------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 134,076,659 $ 138,052,297
============= =============
See notes to financial statements.
CENDANT MEMBERSHIP SERVICES, INC.
SAVINGS INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN
The following description of the Cendant Membership Services, Inc. Savings
Incentive Plan (the "Plan"), formerly the Savings Incentive Plan of CUC
International Inc. ("CUC"), provides only general information.
Participants should refer to the Summary Plan Description or the Plan
documents, which are available from Cendant Membership Services, Inc. (the
"Company" or the "Plan Sponsor"), a wholly-owned subsidiary of Cendant
Corporation ("Cendant"), for a more complete description of the Plan's
provisions. In December 1997, HFS Incorporated merged with and into CUC
(the "Cendant Merger") and the resultant merged company was renamed
Cendant Corporation. Each of the existing employee savings plans of the
merged companies are currently being maintained.
The Plan is a defined contribution plan which provides retirement,
disability and death benefits to eligible employees of the Company and its
subsidiaries. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"). The Plan was amended
various times during 1998 and 1997 to allow for existing plans of
companies acquired by the Company to be combined into the Plan (See
"Rollovers").
The following is a summary of certain Plan provisions:
a. Eligibility - The Plan covers substantially all full-time employees
and certain part-time employees of the Company and certain of its
subsidiaries who have been employed for at least six months and are
age twenty-one or older.
b. Employee contributions - Participants may elect to make pre-tax
contributions of up to fifteen percent of pre-tax annual
compensation, up to a maximum of $10,000 and $9,500 for 1998 and
1997, respectively. Plan participants may change their deferral
elections under the Plan on a monthly basis.
c. Employer contributions - The Company matches each participant's
bi-weekly contribution dollar for dollar of the first $27.69, $0.60
for each dollar of the next $36.93, and $0.40 for each dollar of the
next $27.69 up to a maximum of 6% of pre-tax annual compensation, as
defined in the Plan, for a total maximum match of $60.92 per
bi-weekly pay period.
d. Rollovers - All employees, upon commencement of employment, are
provided the option of making a rollover contribution to the Plan in
accordance with Internal Revenue Service ("IRS") regulations.
Plan assets associated with the qualified plans of companies
previously acquired by the Company, prior to the Cendant Merger,
including Davidson and Associates, Inc., Ideon Group, Inc. and North
American Outdoor Group, were transferred into the Plan. Accordingly,
$9.5 million and $7.6 million of assets were merged into the Plan
during 1998 and 1997, respectively and are included in Contributions
From - Rollovers in the statements of changes in net assets available
for benefits for the years ended December 31, 1998 and 1997. In
addition, effective January 1, 1998, the profit sharing plan of NUMA
Corporation, a company previously acquired by the Company, was term-
inated and NUMA Corporation employees had the option of rolling over
their plan assets as of such date.
e. Vesting - Participants are immediately vested in their contributions
plus actual earnings thereon. Vesting in the Company matching portion
of their accounts (plus actual earnings thereon) is based on years of
credited service as follows:
Years of Credited Service Percentage Vesting
Less than one 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
f. Termination - Although the Company has not expressed any intent to do
so, the Company reserves the right under the Plan to discontinue its
contributions and to modify, suspend, amend or terminate the Plan in
whole or in part at any time subject to the provisions of ERISA. In
the event of Plan termination, participants will become fully vested
and will receive lump-sum distributions in an amount equal to the
value of their accounts.
g. Loan Provision - Participants may borrow from their fund accounts up
to the lesser of $50,000 or fifty percent of their vested balance.
Loan terms range from 1-5 years and are secured by the balance in the
participant's account. The loans bear interest at a rate commensurate
with prime rate plus one percent. Interest rates on outstanding loans
as of December 31, 1998 ranged from 7.64% to 11%. Principal and
interest is paid ratably through payroll deductions.
h. Participant Accounts -Each participant's account is credited with the
participant's contributions and allocations of the Company's
contributions and Plan earnings. Allocations are based on participant
earnings or account balances as defined. Forfeited balances of
terminated participants' nonvested accounts are used at the
discretion of the Plan admistrative committee, either to pay
administrative expenses of the plan or to reduce future Company
contributions. During the years ended December 31, 1998 and 1997,
forfeited account balances amounted to $361,000 and $220,000.
i. Benefits Paid to Participants - Upon termination of employment, a
participant may receive a lump-sum amount equal to the vested value
of his or her account balance. Distributions to terminated employees
are recorded in each fund when paid. Participants are entitled to
withdraw all or any portion of their after-tax contributions.
Participants may make full or partial withdrawals of funds in any of
their accounts upon attaining age 59 1/2 or, from certain accounts,
for financial hardship, as defined in the Plan, before that age.
Amounts payable to participants who have terminated participation in
the Plan were $620,817 and $238,000 at December 31, 1998 and 1997,
respectively. These amounts will be reflected as liabilities in the
Plan's Form 5500 in accordance with Department of Labor Regulations.
In December 1997, the Company disposed of Interval International,
Inc. ("Interval"), a timeshare exchange business. In connection with
the sale, during 1998, Plan assets of $7.5 million which related to
Interval employees were transferred from the Plan into the acquiring
company's plan. Such distribution of Plan assets is included in
Benefits Paid to Participants in the statement of changes in net
assets available for benefits for the year ended December 31, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Presentation - The accompanying financial statements are
prepared on the accrual basis of accounting. All administrative costs
of the Plan, other than costs incurred to maintain the participant
loan accounts, were paid by the Company.
b. Valuation of Investments - The Plan's investments are stated at fair
value. Securities traded on a national securities exchange are valued
at the last reported sales price on the last business day of the plan
year. Investments traded on the over-the-counter market for which no
sale was reported on that date are valued at the average of the last
reported bid and ask prices. The shares of registered investment
companies are valued at the quoted market price which represent the
net asset value of shares held by the Plan at year-end. Loans to
participants are valued at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Dividends are recorded on the ex-dividend date.
The change between the fair value and the cost of investments which
are held at each statement date is reflected as net (depreciation)
appreciation in the statement of changes in net assets available for
benefits. The net realized gains (losses) on investments is the
difference between the proceeds received, after fees and expenses, and
the average cost of the investments sold.
c. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect reported
amounts and related disclosures. Actual results could differ from
those estimates.
3. INVESTMENTS
Participants direct employer and employee contributions in 1% increments
into investment options made available by the Plan. Participants may
change their investment allocation between funds on a daily basis.
The investment options available to participants as of December 31, 1998
consisted of the following:
a. Neuberger & Berman Equity Separate Account - Funds are invested in a
variety of common and preferred stocks with emphasis on a balanced
portfolio of primarily common stocks or in mutual funds which
specialize in such equity investments.
b. Cendant Corporation Common Stock Fund - Funds are invested in the
common stock of Cendant, the Plan Sponsor's parent company, which is
traded on the New York Stock Exchange under the symbol "CD".
c. Neuberger & Berman Limited Maturity Bond Fund - Funds are invested
in a diversified portfolio of short to intermediate term U.S.
government and agency securities as well as primarily investment
grade debt securities issued by financial institutions, corporations
and others.
d. Neuberger & Berman International Equity Fund - Funds are invested in
a diversified portfolio of equity securities of medium to large
capitalized companies doing business outside the United States and
traded on foreign exchanges.
e. Neuberger & Berman Genesis Fund - Funds are invested principally in
common stocks of companies with a market capitalization of
$750 million or less.
f. First Union Evergreen Money Market Fund - Funds are invested in
high-quality money market instruments.
g. MetLife Stock Market Index Guarantee Fund - Funds are invested
primarily in a portfolio of equity securities designed to
substantially equal or "match" the performance of the Standard &
Poor's 500 Composite Stock Price Index.
h. Kobrick Capital Fund - Funds are invested in a portfolio that seeks
maximum capital appreciation by investing primarily in equity
securities of companies with a wide range of capitalizations,
including undervalued special situations and emerging growth
companies. The fund may invest up to 35% of its total assets in
other types of securities, including corporate bonds.
i. Kobrick Emerging Growth Fund - Funds are invested in a portfolio
that seeks growth of capital by investing in the equity securities
of emerging growth companies, primarily with small capitalizations.
The fund may invest up to 35% of its total assets in other types of
securities, including corporate bonds, or in larger, more mature
companies.
j. Kobrick Growth Fund - Funds are invested in a portfolio that seeks
to provide long-term growth of capital by investing in the equity
securities of large capitalization companies. The fund may invest up
to 35% of its total assets in other types of securities, including
corporate bonds, or in small capitalization and emerging growth
companies.
Participants should refer to each fund's prospectus for a more
complete description of the risks associated with each fund.
4. INVESTMENTS EXCEEDING 5% OF NET ASSETS
The following investments represent five percent or more of the Plan's net
assets available for benefits as of December 31, 1998 and 1997.
1998 1997
------------ -------------
Neuberger & Berman Equity Separate Account $ 49,438,016 $ 46,410,528
Cendant Corporation Common Stock Fund 30,296,338 50,354,179
First Union Evergreen Money Market Fund 16,443,650 12,598,636
Neuberger & Berman Limited Maturity Bond Fund 11,282,657 11,496,221
Neuberger & Berman Genesis Fund 10,076,330 7,617,528
------------ -------------
$117,536,991 $ 128,477,092
============ =============
5. INTERNAL REVENUE SERVICE STATUS
The Plan is qualified under section 401(a) of the Internal Revenue Code of
1986 (the "Code") and is exempt from taxation under section 501(a) of the
Code. The Plan received a favorable IRS determination letter dated
September 7, 1995. The Plan has been amended since receiving the
determination letter. However, the Plan administrator believes that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Code and the related trust was tax exempt
as of the financial statement dates. Therefore, no provision for income
taxes has been included in the Plan's financial statements.
6. OTHER EVENTS
Company litigation
In April 1998, Cendant publicly announced that it had discovered
accounting irregularities in the former business units of CUC. Such
discovery prompted investigations into such matters by Cendant and the
Audit Committee of its Board of Directors. As a result of the findings
from the investigations, Cendant restated its previously reported
financial results for 1997, 1996 and 1995. Since such announcement, more
than 70 lawsuits claiming to be class actions, two lawsuits claiming to be
brought derivatively on Cendant's behalf and several individual lawsuits
have been filed in various courts against Cendant and other defendants.
The Court has ordered consolidation of many of the actions.
The Securities and Exchange Commission (the "SEC") and the United States
Attorney for the District of New Jersey are conducting investigations
relating to the matters referenced above. The SEC advised Cendant that
its inquiry should not be construed as an indication by the SEC or its
staff that any violations of law have occurred.
Cendant does not believe it is feasible to predict or determine the final
outcome or resolution of these proceedings or to estimate the amounts or
potential range of loss with respect to these proceedings and
investigations. In addition, the timing of the final resolution of these
proceedings and investigations is uncertain. The possible outcomes or
resolutions of these proceedings and investigations could include
judgments against Cendant or settlements and could require substantial
payments by Cendant. However, the Company does not expect the outcome from
these proceedings to have any material adverse impact on the Plan. The
aforementioned matters resulted in a significant decline in the per share
price of Cendant common stock and a corresponding diminution of the
Cendant Corporation Common Stock Fund. At December 31, 1997 the closing
per share price of Cendant common stock was $34.375 compared to $19.125 at
December 31, 1998.
In connection with the aforementioned matters, it has come to the
attention of Cendant that certain former fiduciaries of the Plan may have
committed acts that constitute either negligence in their administration
of the Plan or a breach of their fiduciary duties. The Company believes
that the safekeeping of Plan assets was not affected by such acts.
7. PARTY-IN-INTEREST
A portion of the Plan's investments are shares in a fund managed by
MetLife, the MetLife Stock Market Index Guarantee Fund. MetLife is the
custodian of these investments as defined by the Plan and, therefore,
these transactions qualify as party-in-interest transactions.
8. SUBSEQUENT EVENTS
On January 12, 1999, Cendant completed the sale of its wholly-owned
consumer software business, Cendant Software Corporation ("CDS"). Upon
consummation, Plan participants who were CDS employees were given the
option to remain in the Plan or to withdraw their vested account balances.
On April 21, 1999, Cendant announced that the Board of Directors approved
the plan to pursue the sale of Entertainment Publications, Inc. ("EPub"),
a wholly-owned subsidiary. Cendant has not yet determined what impact the
disposition of EPub will have on the Plan assets.
9. PLAN SUMMARY BY FUND
The following tables represent the statements of net assets available for
benefits as of December 31, 1998 and 1997 and the statement of changes in
net assets available for benefits, summarized by fund, for the years ended
December 31, 1998 and 1997.
CENDANT MEMBERSHIP SERVICES, INC. SAVINGS INCENTIVE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1998
Neuberger Neuberger &
& Berman Cendant Berman Neuberger &
Equity Corporation Limited Berman Neuberger &
Separate Company Maturity International Berman
Account Stock Fund Bond Fund Equity Fund Genesis Fund Subtotal
------------- ----------- ----------- ------------- ------------ ------------
ASSETS
Investments, at fair value $ 49,438,016 $30,296,338 $11,282,657 $ 5,227,966 $10,076,330 $106,321,307
Contributions receivable from:
Participants 106,653 38,608 29,607 29,117 50,087 254,072
Employer 40,698 13,677 13,288 9,483 17,298 94,444
Interest and dividends receivable 22,769 - - - - 22,769
------------- ----------- ----------- ----------- ----------- ------------
Total receivables 170,120 52,285 42,895 38,600 67,385 371,285
------------- ----------- ----------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 49,608,136 $30,348,623 $11,325,552 $ 5,266,566 $10,143,715 $106,692,592
============= =========== =========== =========== =========== ============
CENDANT MEMBERSHIP SERVICES, INC. SAVINGS INCENTIVE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
(Concluded)
DECEMBER 31, 1998
First Union MetLife
Evergreen Stock Market Kobrick
Money Index Kobrick Emerging Kobrick
Market Guarantee Capital Growth Growth Loan
Subtotal Fund Fund Fund Fund Fund Fund Total
------------ ----------- ---------- -------- --------- --------- ---------- ------------
ASSETS
Investments, at fair value $106,321,307 $16,443,650 $6,556,064 $172,278 $ 73,169 $199,319 $3,747,079 $133,512,866
Contributions receivable from:
Participants 254,072 87,805 45,642 1,790 1,378 1,992 - 392,679
Employer 94,444 36,703 15,418 698 546 536 - 148,345
Interest and dividends
receivable 22,769 - - - - - - 22,769
------------ ----------- ---------- -------- --------- -------- ---------- ------------
Total receivables 371,285 124,508 61,060 2,488 1,924 2,528 - 563,793
------------ ----------- ---------- -------- --------- -------- ---------- ------------
NET ASSETS AVAILABLE FOR
BENEFITS $106,692,592 $16,568,158 $6,617,124 $174,766 $ 75,093 $201,847 $3,747,079 $134,076,659
============ =========== ========== ======== ========= ======== ========== ============
CENDANT MEMBERSHIP SERVICES, INC. SAVINGS INCENTIVE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1997
MetLife
Neuberger Neuberger Stock
& Berman Cendant & Berman Neuberger & Neuberger First Union Market
Equity Corporation Limited Berman & Berman Evergreen Index
Separate Company Maturity International Genesis Money Guarantee
Account Stock Fund Bond Fund Equity Fund Fund Market Fund Account Subtotal
----------- ----------- ----------- ------------ ---------- ----------- ---------- ------------
ASSETS
Investments, at fair value $46,410,528 $50,354,179 $11,496,221 $ 4,102,802 $7,617,528 $12,598,636 $1,353,750 $133,933,644
Contributions receivable from:
Participants 102,825 95,480 30,826 22,215 40,966 25,354 12,094 329,760
Employer 40,826 39,985 14,988 7,315 13,596 13,647 4,262 134,619
Interest and dividends
receivable 36,926 - - - - - - 36,926
---------- ----------- ----------- ----------- ---------- ----------- ---------- ------------
Total receivables 180,577 135,465 45,814 29,530 54,562 39,001 16,356 501,305
---------- ----------- ----------- ----------- ---------- ----------- ---------- ------------
NET ASSETS AVAILABLE
FOR BENEFITS $46,591,105 $50,489,644 $11,542,035 $ 4,132,332 $7,672,090 $12,637,637 $1,370,106 $134,434,949
=========== =========== =========== =========== ========== =========== ========== ============
CENDANT MEMBERSHIP SERVICES, INC. SAVINGS INCENTIVE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
(Concluded)
DECEMBER 31, 1997
Loan
Subtotal Fund Total
------------ ------------ --------------
ASSETS
Investments, at fair value $133,933,644 $ 3,617,348 $ 137,550,992
Contributions receivable from:
Participants 329,760 - 329,760
Employer 134,619 - 134,619
Interest and dividends receivable 36,926 - 36,926
------------ ------------ --------------
Total receivables 501,305 - 501,305
------------ ------------ --------------
NET ASSETS AVAILABLE FOR
BENEFITS $134,434,949 $ 3,617,348 $ 138,052,297
============ ============ ==============
CENDANT MEMBERSHIP SERVICES, INC. SAVINGS INCENTIVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1998
Neuberger Neuberger Neuberger First Union
& Berman Cendant & Berman & Berman Neuberger Evergreen
Equity Corporation Limited International & Berman Money
Separate Company Maturity Equity Genesis Market
Account Stock Fund Bond Fund Fund Fund Fund Subtotal
----------- ------------ ----------- ----------- ----------- ----------- -----------
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Contributions from:
Participants $ 3,648,191 $ 988,895 $ 1,051,787 $1,060,673 $ 2,165,522 $ 2,741,557 $11,656,625
Employer 1,271,924 341,251 431,562 356,295 737,748 1,003,624 4,142,404
Rollovers 1,808,062 227,106 602,079 839,472 2,282,081 3,513,354 9,272,154
----------- ------------ ----------- ---------- ----------- ----------- -----------
Total contributions 6,728,177 1,557,252 2,085,428 2,256,440 5,185,351 7,258,535 25,071,183
----------- ------------ ----------- ----------- ----------- ----------- -----------
Investment income:
Net appreciation (depreciation)
in fair value of investments 5,747,299 (19,739,703) (166,160) (193,080) (837,934) (41) (15,189,619)
Interest and dividends 333,103 - 662,962 10,899 107,302 797,799 1,912,065
----------- ------------ ----------- ----------- ----------- ----------- ------------
Total investment income
(losses) 6,080,402 (19,739,703) 496,802 (182,181) (730,632) 797,758 (13,277,554)
Loan repayments 471,170 214,955 176,829 71,607 132,254 437,026 1,503,841
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total additions 13,279,749 (17,967,496) 2,759,059 2,145,866 4,586,973 8,493,319 13,297,470
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Loan disbursements (694,678) (515,227) (202,116) (71,320) (220,458) (283,488) (1,987,287)
Benefits paid to participants (7,079,336) (4,166,611) (1,773,134) (720,816) (1,335,024) (4,480,904) (19,555,825)
----------- ------------ ------------ ----------- ----------- ----------- ------------
Total deductions (7,774,014) (4,681,838) (1,975,250) (792,136) (1,555,482) (4,764,392) (21,543,112)
----------- ----------- ------------ ----------- ----------- ----------- ------------
INTERFUND TRANSFERS (2,488,704) 2,508,313 (1,000,292) (219,496) (559,866) 201,594 (1,558,451)
----------- ----------- ------------ ---------- ----------- ----------- ------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 3,017,031 (20,141,021) (216,483) 1,134,234 2,471,625 3,930,521 (9,804,093)
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR 46,591,105 50,489,644 11,542,035 4,132,332 7,672,090 12,637,637 133,064,843
----------- ----------- ----------- ---------- ---------- ----------- ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR $49,608,136 $30,348,623 $11,325,552 $5,266,566 $10,143,715 $16,568,158 $123,260,750
=========== =========== =========== ========== =========== =========== ============
CENDANT MEMBERSHIP SERVICES, INC. SAVINGS INCENTIVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
(Concluded)
FOR THE YEAR ENDED DECEMBER 31, 1998
Met Life
Stock Market Kobrick
Index Kobrick Emerging Kobrick
Guaranteed Capital Growth Growth Loan
Subtotal Fund Fund Fund Fund Fund Total
----------- ----------- -------- -------- -------- --------- ------------
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Contributions from:
Participants $11,656,625 $1,320,388 $ 8,354 $ 6,729 $ 7,731 $ - $ 12,999,827
Employer 4,142,404 457,250 3,283 2,387 2,377 - 4,607,701
Rollovers 9,272,154 1,649,598 2,613 - 754 59,513 10,984,632
----------- ----------- -------- -------- -------- ---------- ------------
Total contributions 25,071,183 3,427,236 14,250 9,116 10,862 59,513 28,592,160
----------- ----------- -------- -------- -------- ---------- ------------
Investment income:
Net (depreciation) appreciation in
fair value of investments (15,189,619) 932,884 41,826 15,078 38,089 - (14,161,742)
Interest and dividends 1,912,065 13,609 - - 31 300,093 2,225,798
----------- ----------- -------- -------- -------- ---------- ------------
Total investment
(losses) income (13,277,554) 946,493 41,826 15,078 38,120 300,093 (11,935,944)
Loan repayments 1,503,841 53,844 687 381 1,189 (1,559,942) -
----------- ----------- -------- -------- -------- ---------- -------------
Total additions 13,297,470 4,427,573 56,763 24,575 50,171 (1,200,336) 16,656,216
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Loan disbursements (1,987,287) (67,915) (92) (1,361) (1,372) 2,058,027 -
Benefits paid to participants (19,555,825) (345,869) (736) (738) (726) (727,960) (20,631,854)
------------ ------------ --------- --------- --------- ---------- ------------
Total deductions (21,543,112) (413,784) (828) (2,099) (2,098) 1,330,067 (20,631,854)
------------ ------------ --------- --------- -------- ---------- ------------
INTERFUND TRANSFERS (1,558,451) 1,233,229 118,831 52,617 153,774 - -
------------ ---------- -------- -------- -------- ---------- ------------
NET (DECREASE) INCREASE IN NET
ASSETS AVAILABLE FOR BENEFITS (9,804,093) 5,247,018 174,766 75,093 201,847 129,731 (3,975,638)
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR 133,064,843 1,370,106 - - - 3,617,348 138,052,297
----------- ---------- -------- -------- -------- ---------- ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR $123,260,750 $6,617,124 $174,766 $ 75,093 $201,847 $3,747,079 $134,076,659
============ ========== ======== ======== ======== ========== ============
CENDANT MEMBERSHIP SERVICES, INC. SAVINGS INCENTIVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
Neuberger Neuberger
Cendant & Berman & Berman
Equity Corporation Limited International
Fixed Separate Company Maturity Equity
Fund Bond Fund Fund Stock Fund Bond Fund Fund Subtotal
----------- ----------- ---------- ------------- ----------- ------------- ------------
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Contributions from:
Participants $ - $ - $ 3,273,174 $ 2,754,794 $ 1,041,686 $ 596,920 $ 7,666,574
Employer - - 1,353,977 1,220,738 509,524 212,375 3,296,614
Rollovers - - 1,661,608 661,625 470,730 1,006,192 3,800,155
----------- ---------- ----------- ----------- ---------- ---------- ------------
Total contributions - - 6,288,759 4,637,157 2,021,940 1,815,487 14,763,343
----------- ---------- ----------- ----------- ---------- ---------- ------------
Investment income:
Net appreciation (depreciation)
in fair value of investments - - 12,984,495 14,663,603 (271,057) 31,783 27,408,824
Interest and dividends - - 324,644 47,952 814,297 39,346 1,226,239
----------- ---------- ----------- ----------- ---------- ---------- ------------
Total investment income - - 13,309,139 14,711,555 543,240 71,129 28,635,063
----------- ---------- ----------- ----------- ---------- ---------- ------------
Loan repayments - - 484,469 574,393 220,470 40,021 1,319,353
Total additions - - 20,082,367 19,923,105 2,785,650 1,926,637 44,717,759
----------- ---------- ----------- ----------- ----------- ---------- ------------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Benefits paid to participants - - (3,709,685) (3,154,214) (1,018,162) (43,051) (7,925,112)
Loan disbursements - - (810,446) (984,594) (231,587) (63,023) (2,089,650)
----------- ----------- ----------- ----------- ----------- ---------- -------------
Total deductions - - (4,520,131) (4,138,808) (1,249,749) (106,074) (10,014,762)
----------- ----------- ----------- ----------- ------------ ----------- -------------
INTERFUND TRANSFERS (32,636) (28,357) (4,095,676) (1,175,649) (769,976) 2,262,767 (3,839,527)
------------ ----------- ----------- ----------- ----------- ---------- ------------
NET (DECREASE) INCREASE IN NET
ASSETS AVAILABLE FOR BENEFITS (32,636) (28,357) 11,466,560 14,608,648 765,925 4,083,330 30,863,470
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR 32,636 28,357 35,124,545 35,880,996 10,776,110 49,002 81,891,646
----------- ---------- ------------ ----------- ----------- ---------- ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR $ - $ - $46,591,105 $50,489,644 $11,542,035 $4,132,332 $112,755,116
=========== ========== =========== =========== =========== ========== ============
CENDANT MEMBERSHIP SERVICES, INC. SAVINGS INCENTIVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
(Concluded)
FOR THE YEAR ENDED DECEMBER 31, 1997
First Union MetLife
Neuberger Evergreen Stock Market
& Berman Money Index
Genesis Market Guarantee Loan
Subtotal Fund Fund Fund Fund Total
----------- ----------- ------------ ------------- ----------- -------------
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Contributions from:
Participants $ 7,666,574 $ 970,382 $ 990,439 $ 133,657 $ - $ 9,761,052
Employer 3,296,614 353,807 303,375 46,789 - 4,000,585
Rollovers 3,800,155 2,026,307 2,456,286 157,485 - 8,440,233
----------- ----------- ------------ ---------- ----------- ------------
Total contributions 14,763,343 3,350,496 3,750,100 337,931 - 22,201,870
----------- ----------- ------------ ---------- ----------- ------------
Investment income:
Net appreciation in
fair value of investments 27,408,824 1,303,634 - 83,951 - 28,796,409
Interest and dividends 1,226,239 50,924 686,269 11 416,021 2,379,464
----------- ----------- ------------ ----------- ----------- ------------
Total investment income 28,635,063 1,354,558 686,269 83,962 416,021 31,175,873
----------- ----------- ------------ ---------- ----------- ------------
Loan repayments 1,319,353 62,591 224,858 6,936 (1,613,738) -
Total additions 44,717,759 4,767,645 4,661,227 428,829 (1,197,717) 53,377,743
----------- ----------- ------------ ---------- ----------- ------------
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO:
Benefits paid to participants (7,925,112) (117,825) (1,868,091) (18,392) (584,928) (10,514,348)
Loan disbursements (2,089,650) (123,814) (297,512) (6,464) 2,517,440 -
------------ ------------ ------------- ----------- ----------- ------------
Total deductions (10,014,762) (241,639) (2,165,603) (24,856) 1,932,512 (10,514,348)
------------ ------------ ------------- ----------- ----------- -----------
INTERFUND TRANSFERS (3,839,527) 3,079,842 (206,448) 966,133 - -
------------ ----------- ------------ ---------- ---------- ------------
NET INCREASE IN NET ASSETS
AVAILABLE FOR BENEFITS 30,863,470 7,605,848 2,289,176 1,370,106 734,795 42,863,395
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR 81,891,646 66,242 10,348,461 - 2,882,553 95,188,902
----------- ----------- ------------ ---------- ----------- ------------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR $112,755,116 $ 7,672,090 $ 12,637,637 $1,370,106 $ 3,617,348 $138,052,297
============ =========== ============ ========== =========== ============
SUPPLEMENTAL SCHEDULES
CENDANT MEMBERSHIP SERVICES, INC.
SAVINGS INCENTIVE PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
Contract or
Number of Current
Description Units/Shares Cost Value
---------------------------------------------- ------------- ------------------ ----------------
Neuberger & Berman Equity Separate Account 1,345,294 $ 35,870,293 $ 49,438,016
Cendant Corporation Company Stock Fund 1,529,625 38,407,006 30,296,338
Neuberger & Berman Limited Maturity Bond Fund 1,198,804 11,405,134 11,282,657
Neuberger & Berman International Equity Fund 353,241 5,364,239 5,227,966
Neuberger & Berman Genesis Fund 495,395 9,886,119 10,076,330
First Union Evergreen Money Market Fund 16,443,650 16,443,650 16,443,650
MetLife Stock Market Index Guarantee Fund 15,108 5,616,396 6,556,064
Kobrick Capital Fund 11,485 132,417 172,278
Kobrick Emerging Growth Fund 5,245 59,776 73,169
Kobrick Growth Fund 14,485 165,778 199,319
Loans to participants 3,747,079 3,747,079 3,747,079
CENDANT MEMBERSHIP SERVICES, INC.
SAVINGS INCENTIVE PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
Purchases Sales
Identity of Description Purchase Number of Selling Number of Net Gain
Party Involved of Asset Price Transactions Price Transactions or (Loss)
-------------- ------------ ---------- ------------ ---------- ------------ -----------
A series of transactions in excess of 5%
of the beginning value of plan assets
Cendant Corporation Company Stock Fund Common Stock $ 7,781,705 214 $ 8,100,383 599 $ (329,471)
Neuberger & Berman Genesis Fund Mutual Fund 7,089,206 308 3,792,001 437 79,348
Neuberger & Berman Equity
Separate Account Mutual Fund 9,164,096 356 12,300,820 592 2,996,674
First Union Evergreen Money Market Fund Money Market 11,378,421 445 7,269,777 553 -
SIGNATURE
The Plan. Pursuant to the requirement of the Securities Exchange Act of 1934,
the Plan Committee has duly caused this annual report to be signed on its behalf
by the undersigned hereunto duly authorized.
Cendant Membership Services, Inc.
Savings Incentive Plan
Date: June 28, 1999 By: /s/ David M. Johnson
David M. Johnson
Plan Committee Member
Cendant Membership Services, Inc.
Savings Incentive Plan
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-80834 of Cendant Corporation on Form S-8 of our report dated June 28, 1999,
appearing in this Annual Report on Form 11-K of Cendant Membership Services,
Inc. Savings Incentive Plan for the year ended December 31, 1998.
/s/ Deloitte & Touche LLP
Parsippany, New Jersey
June 28, 1999
