UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) October 24, 2005 (October 24, 2005)

Cendant Corporation

Delaware		1-10308		06-0918165
(State or other jurisdiction of incorporation)		(Commission File No.)		(I.R.S. Employer Identification Number)
9 West 57th Street
New York, NY				10019
(Address of principal executive office)				(Zip Code)

Registrant’s telephone number, including area code (212) 413-1800

None

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02 Results of Operations and Financial Condition.

          On October 24, 2005, we reported our third quarter 2005 results. Our third quarter 2005 results are discussed in detail in the press release attached hereto as Exhibit 99.1, which, other than the first and fifth paragraphs under the heading “Outlook”, is incorporated by reference in its entirety.

          The information in this item, including Exhibit 99.1, is being furnished, not filed. Accordingly, the information in this item will not be incorporated by reference into any registration statement filed by Cendant under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 9.01 Financial Statements and Exhibits.

	(c)		Exhibits
	99.1		Press Release: Cendant Reports Results for Third Quarter 2005.

SIGNATURE

          Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 24, 2005

CENDANT CORPORATION
CURRENT REPORT ON FORM 8-K
Report Dated October 24, 2005

EXHIBIT INDEX

Exhibit
No.				Description
	99.1			Press Release: Cendant Reports Results for Third Quarter 2005.

Exhibit 99.1

CENDANT REPORTS RESULTS FOR THIRD QUARTER 2005

3Q 2005 EPS from Continuing Operations Was $0.44

3Q 2005 Revenue Increased 12% to $5.0 Billion versus $4.5 Billion in 3Q 2004

3Q 2005 Net Cash Provided by Operating Activities Was $937 Million

3Q 2005 Free Cash Flow Increased 23% to $665 Million
Versus $540 million in 3Q 2004

Company Reassesses Impact of Recent Trends and Events on Future Results

New York, October 24, 2005 – Cendant Corporation (NYSE: CD) today reported results for third quarter 2005. Revenue totaled $5.0 billion, an increase of 12% over third quarter 2004, reflecting growth in the Company’s core real estate and travel services businesses. EPS from Continuing Operations was $0.44 and Net Income was $514 million, versus $593 million in third quarter 2004. Disruptions in the global travel environment, primarily as a consequence of the hurricanes in the Gulf Coast, are estimated to have negatively impacted EPS by approximately $0.03.

Third 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 and settlement services)

		2005				2004				%change
Revenue		$	2,068			$	1,856				11	%
EBITDA		$	409			$	379				8	%

Revenue and EBITDA increased due to growth in all of our real estate services businesses. Revenue growth at real estate franchise and NRT was driven principally by home price increases and tuck-in acquisitions at NRT. Home prices increased 15% at real estate franchise and 16% at NRT. Revenue generated by Cendant Mobility increased 9%, driven by higher fixed fee revenues and an overall increase in transaction fees, and revenue generated by Cendant Settlement Services Group increased 9%, due to growth in title and closing volumes.

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

		2005				2004				% change
Revenue		$	404			$	365				11	%
EBITDA		$	144			$	131				10	%

Revenue and EBITDA increased due to growth in all of our hospitality services businesses. Revenue from our lodging business grew 12%, including a 7% increase in revenue per available room on an organic basis, the addition of Ramada International and continuing growth in our TripRewards loyalty program. Revenue from RCI, our timeshare exchange business, increased 3%, driven by a 5% increase in subscribers. Revenue from our vacation rental business increased 21%, due primarily to the acquisition of Canvas Holidays Limited in October 2004 as well as organic growth in our remaining vacation rental businesses of 9%.

Timeshare Resorts
(Consisting of the Company’s timeshare sales and development businesses)

		2005				2004				% change
Revenue		$	484			$	424				14	%
EBITDA		$	80			$	80				—

Revenue increased due to 10% growth in tour volume and a 6% increase in revenue per guest. Tour flow and revenue per guest were enhanced by our expansion in premium destinations including Hawaii, Las Vegas and Orlando and the opening of new sales offices. In addition, revenue and EBITDA were positively impacted by increased consumer financing income. EBITDA remained unchanged, year-over-year, due to $14 million of expenses resulting from the hurricanes in the Gulf Coast, which primarily include a provision for timeshare contract receivable losses and estimated costs to repair timeshare properties, some of which we expect will ultimately be recovered through insurance claims.

Vehicle Rental
(Consisting of the Company’s car and truck rental businesses)

		2005				2004				% change
Revenue		$	1,433			$	1,243				15	%
EBITDA		$	183			$	179				2	%

Revenue increased due to growth in our domestic and international car rental operations as well as our truck rental business. Car rental revenue grew 17% worldwide due to a 17% increase in rental day volume. EBITDA was negatively impacted by $10 million of expenses reflecting the effects of the hurricanes in the Gulf Coast, which primarily include the impairment of rental car assets, most of which we expect will ultimately be recovered through insurance claims. EBITDA was also negatively impacted by higher vehicle depreciation and other volume-related costs resulting from 14% growth in our rental fleet to support increased demand, the

absence of significant incentives from car manufacturers available in third quarter 2004 and increased fleet costs for model year 2006 vehicles. We initiated price increases in the second and third quarters of 2005 in order to attempt to partially offset the increased fleet costs as model year 2006 vehicles cycle into our inventory. To date, these price increases generally appear to be succeeding and we anticipate positive year-over-year pricing comparisons beginning in fourth quarter 2005, which should partially offset increased fleet costs.

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		$	646			$	437				48	%
EBITDA		$	160			$	123				30	%

Revenue and EBITDA increased primarily due to growth in our online travel agency and other consumer travel businesses. The acquisitions of Orbitz, Gullivers and ebookers contributed $215 million of revenue and $46 million of EBITDA, despite costs incurred to integrate these businesses. The revenue and EBITDA contribution from acquisitions was partially offset by $14 million and $3 million, respectively, due to the transfer of our membership travel business to the discontinued Marketing Services division effective January 1, 2005. The integration of Orbitz is substantially complete and the integrations of ebookers and Gullivers remain on track for completion during 2006. Apart from these transactions, gross bookings at our online travel agencies increased 15% and these businesses also achieved higher margins. Revenue from GDS and Supplier Services grew 1%, driven primarily by a 5% increase in global GDS segments and increased hosting services and other revenue, which was partially offset by a decline in domestic air yield and subscriber fees.

Recent Achievements and Strategic Initiatives
During the third quarter, the Company made considerable progress toward its cash flow generation, share repurchase and dividend payment goals:

•		Generated Net Cash Provided by Operating Activities of $937 million and Free Cash Flow of $665 million. Year-to-date, the Company generated Net Cash Provided by Operating Activities of approximately $2.5 billion and Free Cash Flow of approximately $1.6 billion. For the full year 2005, the Company’s projection remains unchanged at more than $3 billion of Net Cash Provided by Operating Activities and $1.8 to $2.0 billion of Free Cash Flow.
•		Utilized $558 million of cash for the repurchase of common stock ($521 million net of proceeds from option exercises). Year-to-date, the Company utilized $1.0 billion of cash for the repurchase of common stock ($790 million net of proceeds from option exercises). Fully diluted shares decreased by approximately 15 million from the second quarter 2005 amount.

•

Utilized $117 million of cash to pay its quarterly dividend of $0.11 per share. Year-to-date, the Company utilized $309 million of cash to pay quarterly dividends.

In addition, the Company has:

•		Completed the sale of its Marketing Services division for approximately $1.8 billion in total consideration, of which approximately $1.7 billion was in cash, net of estimated closing adjustments, and the balance was in preferred stock and warrants. The transaction is expected to result in a pretax gain in excess of $1.0 billion.
•		Acquired the Wyndham hotel brand and franchise system, relating to more than 100 upscale, full-service lodging properties in major U.S., Mexican and Caribbean markets, for approximately $100 million in cash. The acquisition includes franchise agreements for 82 hotels and management contracts for 27 hotels, as well as the worldwide rights to the Wyndham brand for hotel and timeshare development.

Other Items

•		Corporate and Other – As previously disclosed, third quarter 2004 EBITDA includes a $12 million credit related to the termination of a lease, which did not recur in 2005.
•		Depreciation and Amortization – Third quarter 2005 results include $18 million of incremental depreciation and amortization related to the Orbitz, Gullivers and ebookers acquisitions.
•		Interest Expense – As previously disclosed, third quarter 2004 interest expense includes interest income of $26 million related to a federal tax refund, which did not recur in third quarter 2005.
•		Discontinued Operations – Includes income from the Company’s former Marketing Services Division and, in prior periods, results of operations of the Company’s former Jackson Hewitt, Wright Express, fleet and appraisal units, which have been disposed.

Outlook
Based upon current trends in the Company’s consumer-oriented travel businesses, EBITDA from core operating segments (excluding restructuring charges) is expected to increase approximately 14%, year-over-year, in fourth quarter 2005, as compared with our previous projected growth of approximately 25%.

President and Chief Financial Officer Ronald L. Nelson commented, “Several of our leisure travel units began to show signs of slowing growth during the third quarter. Although some of what we experienced can be directly attributed to the impact of terrorism, devastating hurricanes and higher gasoline prices, we also began to feel the

impact of, among other things, the slowdown in the rate of growth currently affecting all online travel businesses, as well as the ongoing channel shift to supplier sites, demand weakness in certain key markets in the global distribution business, and continued economic weakness in Europe.

“In addition, we combined our timeshare exchange business, RCI, and our Vacation Rental Group to create the new Vacation Network Group. This combination is expected to save the Company approximately $9 million annually, as well as broaden the marketing capability of our European travel business, but will result in severance and facility closing costs of approximately $0.01 per share in fourth quarter 2005.”

As a result of this restructuring and the slower growth noted above, the Company reduced its projection for fourth quarter 2005 EPS by $0.03 — $0.04, to a range of $0.23 — $0.26. This projection does not include any potential charges associated with the contemplated separation of the Company into four separately traded public companies announced this morning.

Mr. Nelson continued, “The effect of these items on 2006 is not yet clear. However, based upon the current trends noted above, together with increased fleet costs and higher interest cost in the rental car business, we preliminarily project revenue to grow by approximately 10% and EBITDA from core operating segments to grow by 11% — 13% in 2006 versus 2005, down from our previous estimate of 11% revenue growth and 19% EBITDA growth.”

The Company will not be providing specific EPS guidance for Cendant for 2006, as it is no longer relevant due to the contemplated separation of the Company into four separately traded public companies announced this morning. The Company expects to provide guidance for each of the proposed new companies at its 2006 Investor Day, currently planned for February 2, 2006. The Company updated its EPS projections for the remainder of 2005 as follows:

		Fourth				Full
		Quarter				Year
2005 EPS from Continuing Operations before Transaction Related Charges(a)		$	0.23-$0.26			$	1.28-$1.31
2005 Transaction Related Charges(b)			—				($0.20	)
2005 EPS from Continuing Operations(a) (b)		$	0.23-$0.26			$	1.08-$1.11

The Company updated its financial projections for full year 2005 as follows:

		Full Year 2004				Full Year 2005
(in millions)		Actual				Projected (a)
Revenue
Real Estate Services		$	6,552			$	7,200 – 7,300
Hospitality Services			1,340				1,500 – 1,550
Timeshare Resorts			1,544				1,675 – 1,725
Vehicle Rental			4,424				4,900 – 5,000
Total Travel Content		$	7,308			$	8,075 – 8,275
Travel Distribution Services			1,788				2,400 – 2,500
Total Travel		$	9,096			$	10,475 – 10,775
Total Core Operating Segments		$	15,648			$	17,800 – 17,950
Mortgage Services (b)			700				46
Corporate and Other			56				4 – 54
Total Company		$	16,404			$	17,850 – 18,050
EBITDA (c)
Real Estate Services		$	1,131			$	1,200 – 1,225
Hospitality Services			460				455 – 475
Timeshare Resorts			254				260 – 280
Vehicle Rental			467				440 – 465
Total Travel Content		$	1,181			$	1,155 – 1,220
Travel Distribution Services			466				570 – 595
Total Travel		$	1,647			$	1,725 – 1,815
Total Core Operating Segments		$	2,778			$	2,955 – 2,975
Mortgage Services (b) (d)			97				(181	)
Corporate and Other			(66	)			(195 – 180	)
Depreciation and amortization (e)			(483	)			(545 – 540	)
Amortization of pendings/listings			(16	)			(30 – 25	)
Interest expense, net (e) (f)			(263	)			(185 – 175	)
Pretax income (c) (d)		$	2,047			$	1,819 – 1,874
Provision for income taxes			(674	)			(670 – 690	)
Minority interest			(8	)			(4	)
Income from continuing operations (c) (d)		$	1,365			$	1,145 – 1,180
Diluted weighted average shares outstanding			1,064				1,065 – 1,060

Investor Conference Call
Cendant will host a conference call to discuss the third quarter results on Tuesday, October 25, 2005, at 11:00 a.m. (ET). Investors may access the call live at www.cendant.com or by dialing (913) 981-5542. A web replay will be available at www.cendant.com following the call. A telephone replay will be available from 2:00 p.m. (ET) on October 25, 2005 until midnight (ET) on November 1, 2005 at (719) 457-0820, access code: 1047115.

Cendant Corporation is primarily a provider of travel and residential real estate services. With approximately 85,000 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 www.cendant.com.

Forward Looking Statements
Certain statements in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words “believes”, “expects”, “anticipates”, “intends”, “projects”, “estimates”, “plans”, “may increase”, “may fluctuate” and similar expressions or future or conditional verbs such as “will”, “should”, “would”, “may” and “could” are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements. The Company cannot provide any assurances that the contemplated 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 contemplated separation is 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 press release include, but are not limited to: risks inherent in the contemplated separation and related transactions and borrowings and costs related to the proposed transactions; distraction of the Company and its management as a result of the proposed transactions; changes in business, political and economic conditions in the United States 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 press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward looking statements are specified in Cendant’s 10-Q for the quarter ended June 30, 2005, including under headings such as “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Except for the Company’s ongoing obligations to disclose material information under the federal securities laws, the Company undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless required by law.

This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained on Table 9 to this release. This press release also includes management’s estimate of EBITDA growth from core operating segments for the year ended December 31, 2006. Management believes the most directly comparable GAAP measure would be “Net income.” Due to the difficulty in forecasting and quantifying the amounts that would be required to be included in this comparable GAAP measure, the Company is not providing an estimate of 2006 Net Income at this time.

Media Contact:		Investor Contacts:
Elliot Bloom		Sam Levenson
212-413-1832		212-413-1834
		Henry A. Diamond
		212-413-1920

# # #

Tables Follow

		Third Quarter
		2005				2004				% Change
Income Statement Items
Net Revenues		$	5,046			$	4,505				12	%
Pretax Income (A)			720				736				(2	%)
Income from Continuing Operations			468				497				(6	%)
EPS from Continuing Operations (diluted)			0.44				0.47				(6	%)
Cash Flow Items
Net Cash Provided by Operating Activities		$	937			$	1,919
Free Cash Flow (B)			665				540
Payments Made for Current Period Acquisitions, Net of Cash Acquired			(166	)			(53	)
Net Debt Repayments			(63	)			(214	)
Issuance of Common Stock in Connection with the Upper DECS			—				863
Net Repurchases of Common Stock			(521	)			(103	)
Payment of Dividends			(117	)			(93	)
		As of				As of
		September 30, 2005				December 31, 2004
Balance Sheet Items
Total Corporate Debt		$	4,814			$	4,330
Cash and Cash Equivalents			356				467
Total Stockholders’ Equity			11,230				12,695
Segment Results
		Third Quarter
		2005				2004				% Change
Net Revenues
Real Estate Services		$	2,068			$	1,856				11	%
Hospitality Services			404				365				11	%
Timeshare Resorts			484				424				14	%
Vehicle Rental			1,433				1,243				15	%
Total Travel Content			2,321				2,032				14	%
Travel Distribution Services			646				437				48	%
Total Travel			2,967				2,469				20	%
Total Core Operating Segments			5,035				4,325				16	%
Mortgage Services			—				175				*
Corporate and Other			11				5				*
Total Company		$	5,046			$	4,505				12	%
EBITDA (C)
Real Estate Services		$	409			$	379				8	%
Hospitality Services			144				131				10	%
Timeshare Resorts			80				80				—
Vehicle Rental			183				179				2	%
Total Travel Content			407				390				4	%
Travel Distribution Services			160				123				30	%
Total Travel			567				513				11	%
Total Core Operating Segments			976				892				9	%
Mortgage Services			—				29				*
Corporate and Other			(50	)			(30	)			*
Total Company		$	926			$	891				4	%
Reconciliation of EBITDA to Pretax Income
Total Company EBITDA		$	926			$	891
Less: Non-program related depreciation and amortization			134				118
Non-program related interest expense, net			66				32
Amortization of pendings and listings			6				5
Pretax Income (A)		$	720			$	736				(2	%)

		Nine Months Ended September 30,
		2005				2004				% Change
Income Statement Items
Net Revenues		$	13,658			$	12,449				10	%
Pretax Income (A)			1,487				1,664				(11	%)
Income from Continuing Operations			922				1,116				(17	%)
EPS from Continuing Operations (diluted)			0.86				1.05				(18	%)
Cash Flow Items
Net Cash Provided by Operating Activities		$	2,541			$	2,771
Free Cash Flow (B)			1,581				1,355
Payments Made for Current Period Acquisitions, Net of Cash Acquired			(1,670	)			(328	)
Net Debt Borrowings (Repayments)			470				(1,311	)
Issuance of Common Stock in Connection with the Upper DECS			—				863
Net Repurchases of Common Stock			(790	)			(669	)
Payment of Dividends			(309	)			(237	)
		As of				As of
		September 30, 2005				December 31, 2004
Balance Sheet Items
Total Corporate Debt		$	4,814			$	4,330
Cash and Cash Equivalents			356				467
Total Stockholders’ Equity			11,230				12,695
Segment Results
		Nine Months Ended September 30,
		2005				2004				% Change
Net Revenues
Real Estate Services		$	5,520			$	4,980				11	%
Hospitality Services			1,166				1,017				15	%
Timeshare Resorts			1,288				1,155				12	%
Vehicle Rental			3,745				3,363				11	%
Total Travel Content			6,199				5,535				12	%
Travel Distribution Services			1,858				1,337				39	%
Total Travel			8,057				6,872				17	%
Total Core Operating Segments			13,577				11,852				15	%
Mortgage Services			46				545				*
Corporate and Other			35				52				*
Total Company		$	13,658			$	12,449				10	%
EBITDA (C)
Real Estate Services		$	963			$	894				8	%
Hospitality Services			369				378				(2	%)
Timeshare Resorts			192				180				7	%
Vehicle Rental			377				387				(3	%)
Total Travel Content			938				945				(1	%)
Travel Distribution Services			432				364				19	%
Total Travel			1,370				1,309				5	%
Total Core Operating Segments			2,333				2,203				6	%
Mortgage Services (D)			(181	)			88				*
Corporate and Other			(124	)			(75	)			*
Total Company		$	2,028			$	2,216				(8	%)
Reconciliation of EBITDA to Pretax Income
Total Company EBITDA		$	2,028			$	2,216
Less: Non-program related depreciation and amortization			411				341
Non-program related interest expense, net			118				180
Early extinguishment of debt			—				18
Amortization of pendings and listings			12				13
Pretax Income (A)		$	1,487			$	1,664				(11	%)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2005				2004				2005				2004
Revenues
Service fees and membership, net		$	3,606			$	3,255			$	9,864			$	9,018
Vehicle-related			1,433				1,243				3,745				3,363
Other			7				7				49				68
Net revenues			5,046				4,505				13,658				12,449
Expenses
Operating			2,868				2,604				7,853				7,233
Vehicle depreciation, lease charges and interest, net			428				342				1,126				935
Marketing and reservation			446				383				1,325				1,119
General and administrative			369				294				1,065				950
Non-program related depreciation and amortization			134				118				411				341
Non-program related interest, net:
Interest expense, net			66				32				118				180
Early extinguishment of debt			—				—				—				18
Acquisition and integration related costs:
Amortization of pendings and listings			6				5				12				13
Other			8				(9	)			29				(4	)
Restructuring and transaction-related charges			1				—				52				—
Valuation charge associated with PHH spin-off			—				—				180				—
Total expenses			4,326				3,769				12,171				10,785
Income before income taxes and minority interest			720				736				1,487				1,664
Provision for income taxes			251				238				562				541
Minority interest, net of tax			1				1				3				7
Income from continuing operations			468				497				922				1,116
Income from discontinued operations, net of tax (*)			43				96				28				411
Gain (loss) on disposal of discontinued operations, net of tax:
PHH valuation and transaction-related charges			—				—				(312	)			—
Gain on disposal			3				—				181				198
Net income		$	514			$	593			$	819			$	1,725
Earnings per share
Basic
Income from continuing operations		$	0.45			$	0.48			$	0.88			$	1.09
Income from discontinued operations			0.05				0.09				0.03				0.40
Gain (loss) on disposal of discontinued operations			—				—				(0.13	)			0.20
Net income		$	0.50			$	0.57			$	0.78			$	1.69
Diluted
Income from continuing operations		$	0.44			$	0.47			$	0.86			$	1.05
Income from discontinued operations			0.05				0.09				0.03				0.39
Gain (loss) on disposal of discontinued operations			—				—				(0.12	)			0.19
Net income		$	0.49			$	0.56			$	0.77			$	1.63
Weighted average shares outstanding
Basic			1,037				1,036				1,047				1,024
Diluted			1,057				1,064				1,069				1,059

		REVENUES
		Third Quarter
		2005				2004				%*
Real Estate Services (A)		$	2,005			$	1,851				8	%
Hospitality Services (B)			389				365				7	%
Timeshare Resorts (C)			482				424				14	%
Vehicle Rental			1,433				1,243				15	%
Total Travel Content			2,304				2,032				13	%
Travel Distribution Services (D)			431				423				2	%
Total Travel			2,735				2,455				11	%
Total Core Operating Segments		$	4,740			$	4,306				10	%
		EBITDA
		Third Quarter
		2005				2004				%*
Real Estate Services (A)		$	401			$	375				7	%
Hospitality Services (B)			139				131				6	%
Timeshare Resorts (C)			79				80				—
Vehicle Rental			183				179				2	%
Total Travel Content			401				390				3	%
Travel Distribution Services (D)			114				120				(5	%)
Total Travel			515				510				1	%
Total Core Operating Segments		$	916			$	885				4	%
Reconciliation of Organic EBITDA to Pretax Income
Pretax Income (E)		$	720			$	736
Add: Non-program related depreciation and amortization			134				118
Non-program related interest expense, net			66				32
Amortization of pendings and listings			6				5
Total Company EBITDA			926				891
Less: Mortgage Services			—				29
Corporate and Other			(50	)			(30	)
EBITDA for Total Core Operating Segments			976				892
Adjustments to arrive at Organic EBITDA for Total Core Operating Segments			(60	)			(7	)
Organic EBITDA for Total Core Operating Segments (per above)		$	916			$	885

		REVENUES
		Nine Months Ended September 30,
		2005				2004				%*
Real Estate Services (B)		$	5,335			$	4,959				8	%
Hospitality Services (C)			1,085				1,017				7	%
Timeshare Resorts (D)			1,286				1,149				12	%
Vehicle Rental			3,745				3,363				11	%
Total Travel Content			6,116				5,529				11	%
Travel Distribution Services (E)			1,327				1,292				3	%
Total Travel			7,443				6,821				9	%
Total Core Operating Segments		$	12,778			$	11,780				8	%
		EBITDA												EBITDA Excluding Restructuring Charges
		Nine Months Ended September 30,												Nine Months Ended September 30,
		2005				2004				% *				2005 (A)				2004				% *
Real Estate Services (B)		$	938			$	874				7	%		$	944			$	874				8	%
Hospitality Services (C)			366				378				(3	%)			371				378				(2	%)
Timeshare Resorts (D)			192				175				10	%			193				175				10	%
Vehicle Rental			377				387				(3	%)			385				387				(1	%)
Total Travel Content			935				940				(1	%)			949				940				1	%
Travel Distribution Services (E)			351				358				(2	%)			362				358				1	%
Total Travel			1,286				1,298				(1	%)			1,311				1,298				1	%
Total Core Operating Segments		$	2,224			$	2,172				2	%		$	2,255			$	2,172				4	%
Reconciliation of Organic EBITDA to Pretax Income
Pretax Income (F)		$	1,487			$	1,664							$	1,487			$	1,664
Add: Non-program related depreciation and amortization			411				341								411				341
Non-program related interest expense, net			118				180								118				180
Early extinguishment of debt			—				18								—				18
Amortization of pendings and listings			12				13								12				13
Total Company EBITDA			2,028				2,216								2,028				2,216
Less: Mortgage Services			(181	)			88								(181	)			88
Corporate and Other			(124	)			(75	)							(124	)			(75	)
EBITDA for Total Core Operating Segments			2,333				2,203								2,333				2,203
Adjustments to arrive at Organic EBITDA for Total Core Operating Segments			(109	)			(31	)							(78	)			(31	)
Organic EBITDA for Total Core Operating Segments (per above)		$	2,224			$	2,172							$	2,255			$	2,172

		Third Quarter
		2005				2004				% Change
REAL ESTATE SERVICES SEGMENT
Real Estate Franchise
Closed Sides			516,534				516,747				—
Average Price		$	233,211			$	201,952				15	%
Royalty Revenue (A)		$	147,268			$	131,062				12	%
Total Revenue (A)		$	168,900			$	148,776				14	%
Real Estate Brokerage
Closed Sides			135,463				137,805				(2	%)
Average Price		$	476,636			$	412,058				16	%
Net Revenue from Real Estate Transactions		$	1,649,607			$	1,481,887				11	%
Total Revenue		$	1,666,738			$	1,494,002				12	%
Relocation
Transaction Volume			25,149				24,863				1	%
Total Revenue		$	139,202			$	127,951				9	%
Settlement Services
Purchase Title and Closing Units			43,613				40,618				7	%
Refinance Title and Closing Units			14,222				11,590				23	%
Total Revenue		$	93,440			$	85,406				9	%
HOSPITALITY SERVICES SEGMENT
Lodging
RevPAR (B)		$	36.86			$	34.04				8	%
Weighted Average Rooms Available (B)			511,531				507,330				1	%
Royalty, Marketing and Reservation Revenue (C)		$	119,829			$	112,765				6	%
Total Revenue (C)		$	148,215			$	132,349				12	%
RCI
Average Number of Subscribers			3,232,901				3,073,811				5	%
Subscriber Related Revenue		$	144,723			$	140,958				3	%
Total Revenue		$	151,737			$	147,224				3	%
Vacation Rental Group
Cottage Weeks Sold			242,899				223,850				9	%
Total Revenue		$	104,106			$	85,871				21	%

		Third Quarter
		2005				2004				% Change
TIMESHARE RESORTS SEGMENT
Tours			271,591				245,820				10	%
Total Revenue		$	483,748			$	423,831				14	%
VEHICLE RENTAL SEGMENT
Car
Rental Days (000’s)			28,720				24,583				17	%
Time and Mileage Revenue per Day		$	38.29			$	38.41				—
Total Car Revenue		$	1,265,600			$	1,081,957				17	%
Truck
Total Truck Revenue		$	167,118			$	160,952				4	%
TRAVEL DISTRIBUTION SERVICES SEGMENT
Transaction Volume, by Region (000’s) (A) United States			27,894				26,541				5	%
International			43,722				41,924				4	%
Transaction Volume, by Channel (000’s) Traditional Agency			61,542				60,500				2	%
Online (A)			10,074				7,965				26	%
Online Gross Bookings ($000’s) (B)		$	1,922,369			$	1,656,119				16	%
Offline Gross Bookings ($000’s) (B)		$	455,935			$	221,600				106	%
GDS and Supplier Services Revenue (C)		$	382,563			$	378,306				1	%
Owned Travel Agency Revenue (D)		$	263,192			$	58,704				348	%