SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
March 12, 2001 (March 12, 2001)
Date of Report (Date of earliest event reported)
CENDANT CORPORATION
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(Exact name of Registrant as specified in its charter)
DELAWARE 1-10308 06-0918165
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(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation or Organization) File Number) Identification No.)
9 WEST 57TH STREET NEW YORK, NEW YORK 10019
(Address of principal executive offices) (zip code)
(212) 314-1800
Registrant's telephone number, including area code
NOT APPLICABLE
(Former name, former address and former fiscal year, if applicable)
ITEM 5. OTHER EVENTS.
Free cash flow is another measure used by management to
evaluate liquidity and financial condition. Free cash flow represents cash
available for the repayment of debt and other corporate purposes such as
stock repurchases, acquisitions and investments. Such measure of
performance may not be comparable to similarly titled measures used by
other companies and is not a measurement recognized under generally
accepted accounting principles. Therefore, free cash flow should not be
construed as a substitute for income or cash flow from continuing
operations in measuring operating results or liquidity. A Consolidated
Schedule of Free Cash Flow for the years ended December 31, 2000 and 1999
is attached hereto as Exhibit 99.1, which is incorporated herein by
reference in its entirety, and should be read in conjunction with the
Company's Consolidated Statements of Operations and Cash Flows presented in
accordance with generally accepted accounting principles and filed with the
Securities and Exchange Commission within the Company's earnings
release of full year results filed on Form 8-K on February 8, 2001, the
Company's Form 10-Q for the quarterly period ended September 30, 2000 filed
on November 14, 2000 and the Company's restated audited consolidated
financial statements at December 31, 1999 and 1998 and for each of the
three years in the period ended December 31, 1999 and restated management's
discussion and analysis of results of operations both filed on Form 8-K/A
on January 19, 2001.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
No. Description
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99.1 Consolidated Schedule of Free Cash Flow for the years ended
December 31, 2000 and 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CENDANT CORPORATION
By: /s/ John T. McClain
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Name: John T. McClain
Title: Senior Vice President,
Finance and Corporate
Controller
Dated: March 12, 2001
EXHIBIT INDEX
Exhibit No. Description
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99.1 Consolidated Schedule of Free Cash Flow for the years
ended December 31, 2000 and 1999.
EXHIBIT 99.1
CENDANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF FREE CASH FLOW
(IN MILLIONS)
YEAR ENDED
DECEMBER 31,
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2000 1999
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Adjusted EBITDA $ 1,543(A) $ 1,783(B)
Less: Move.com Group (94) (22)
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Adjusted EBITDA, excluding Move.com Group 1,637 1,805
Interest expense (145) (196)
Minority interest, excluding tax benefit (133)(C) (90)(C)
Tax payments (42) (42)
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CASH FLOW NET OF TAXES PAID 1,317 1,477
Tax refunds 109 88
Restructuring and other unusual payments (46) (49)
Working capital and other (21) (55)
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OPERATING CASH FLOW 1,359 1,461
Adjusted capital expenditures (199)(D) (252)(D)
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FREE CASH FLOW 1,160 1,209
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NON OPERATING ACTIVITIES:
Investments (318) (45)
Acquisitions, net of cash acquired (136) (205)
Funding of litigation settlement trust (350) -
Net proceeds from sale of subsidiaries,
net of investment in leased vehicles 4 2,591
Other (141) (E) (106)(E)
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(941) 2,235
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FINANCING ACTIVITIES:
Net repayments on borrowings (522) (F) (494)(F)
Net issuance (repurchase) of equity securities 313 (2,736)
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(209) (3,230)
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NET CHANGE IN CASH BEFORE MANAGEMENT AND MORTGAGE PROGRAMS 10 214
MANAGEMENT & MORTGAGE PROGRAMS
Net mortgage originations and sales 385 2,001
Net mortgage servicing rights (694) (571)
Net relocation advances 372 80
Net financing for assets of management programs (274) (1,558)
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(211) (48)
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NET CHANGE IN CASH AND CASH EQUIVALENTS $ (201) $ 166
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(A) Excludes (i) charges in connection with restructuring and other
initiatives ($86 million); (ii) losses related to the dispositions of
businesses ($43 million); (iii) investigation-related costs ($23
million); (iv) charges in connection with litigation asserting claims
associated with accounting irregularities in the former business units
of CUC and outside of the principal common stockholder class action
lawsuit ($20 million) and (v) charges incurred in connection with the
postponement of the initial public offering of Move.com common stock
($3 million). Such amounts were partially offset by (i) a non-cash
credit incurred in connection with a change to the original estimate
of the number of Rights to be issued in connection with the PRIDES
settlement resulting from unclaimed and uncontested Rights ($41
million) and (ii) a gain representing the recognition of a portion of
the Company's previously recorded deferred gain from the sale of its
fleet businesses due to the disposition of VMS Europe by Avis Group
Holdings, Inc. in August 2000 ($35 million).
(B) Excludes (i) charges associated with the agreement to settle the
principal common stockholder class action lawsuit ($2,894 million);
(ii) charges in connection with the transition of the Company's
lodging franchisees to a Company sponsored property managment system
($23 million); (iii) investigation-related costs ($21 million); (iv)
termination of a proposed acquisition costs ($7 million) and (v)
charges principally related to the consolidation of European call
centers in Ireland ($2 million). Such amounts were partially offset by
a net gain related to the dispositions of businesses ($967 million).
(C) Represents the before tax amounts of minority interest.
(D) Represents total capital expenditures exclusive of Move.com Group
capital expenditures ($18 million in 2000 and $2 million in 1999).
(E) Includes net cash used in Move.com Group operations, the effects of
changes in exchange rates and cash provided by or used in discontinued
operations.
(F) Represents debt repayments, net of proceeds received from borrowings
(including the issuance of a mandatorily redeemable preferred interest
in a subsidiary in 2000).
