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DELAWARE		06-0918165
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
9 WEST 57TH STREET NEW YORK, NY		10019
(Address of principal executive offices)		(Zip Code)

			NAME OF EACH EXCHANGE
	TITLE OF EACH CLASS		ON WHICH REGISTERED
	CD Common Stock, Par Value $.01		New York Stock Exchange

Large accelerated filer  þ	Accelerated filer  o	Non-accelerated filer  o

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Item				Description		Page
				PART I
1				Business			4
1A				Risk Factors			39
1B				Unresolved Staff Comments			49
2				Properties			49
3				Legal Proceedings			50
4				Submission of Matters to a Vote of Security Holders			52
				PART II
5				Market for Registrant’s Common Equity, Related Stockholder Matters and  Issuer Purchases of Equity Securities			53
6				Selected Financial Data			55
7				Management’s Discussion and Analysis of Financial Condition and Results of Operations			58
7A				Quantitative and Qualitative Disclosures about Market Risk			84
8				Financial Statements and Supplementary Data			85
9				Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			85
9A				Controls and Procedures			85
9B				Other Information			88
				PART III
10				Directors and Executive Officers of the Registrant			88
11				Executive Compensation			94
12				Security Ownership of Certain Beneficial Owners and Management and  Related Stockholder Matters			101
13				Certain Relationships and Related Transactions			104
14				Principal Accountant Fees and Services			105
				PART IV
15				Exhibits and Financial Statement Schedules			106
				Signatures			107
EX-10.13.B: FIRST AMENDMENT TO THE DEFERRED COMPENSATION PLAN
EX-10.16: AMENDMENT TO VARIOUS EQUITY BASED PLANS
EX-10.25: FIRST AMENDMENT TO NON-EMPLOYEE DIRECTORS DEFERRED COMPENSATION PLAN
EX-10.28.B: SECOND AMENDMENT TO THE AMENDED AND RESTATED SUPPLEMENT
EX-10.29.B: FIRST AMENDMENT TO THE SUPPLEMENT
EX-10.30.B: FIRST AMENDMENT TO THE SUPPLEMENT
EX-10.34: SECOND AMENDED AND RESTATED ADMINISTRATION AGREEMENT
EX-10.35: ASSIGNMENT AND ASSUMPTION AGREEMENT
EX-10.36.B: FOURTH AMENDMENT TO THE AMENDED AND RESTATED SUPPLEMENT
EX-10.37.B: FOURTH AMENDMENT TO THE AMENDED AND RESTATED SUPPLEMENT
EX-10.38.B: THIRD AMENDMENT TO THE SUPPLEMENT
EX-10.39.B: FOURTH AMENDMENT TO THE AMENDED AND RESTATED SUPPLEMENT
EX-10.39.C: FIFTH AMENDMENT TO THE AMENDED AND RESTATED SUPPLEMENT
EX-10.40.B: SECOND AMENDMENT TO THE SUPPLEMENT
EX-10.40.C: THIRD AMENDMENT TO THE SUPPLEMENT
EX-10.41.B: SECOND AMENDMENT TO THE SUPPLEMENT
EX-10.42.B: SECOND AMENDMENT TO THE SUPPLEMENT
EX-10.43.B: SECOND AMENDMENT TO THE SUPPLEMENT
EX-10.44.B: SECOND AMENDMENT TO THE SUPPLEMENT
EX-10.45.B: SECOND AMENDMENT TO THE SUPPLEMENT
EX-10.46.A: SUPPLEMENT
EX-10.46.B: FIRST AMENDMENT TO THE SUPPLEMENT
EX-12: STATEMENT RE: COMPUTATION OF RATION OF EARNING TO FIXED CHARGES
EX-21: SUBSIDIARIES OF THE REGISTRANT
EX-23: CONSENT OF REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32: CERTIFICATION

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	l	terrorist attacks, such as the September 11, 2001 terrorist attacks on New York City and Washington, D.C. and the July 2005 bombings in London, which may negatively affect the travel and transportation industries and our financial results and which could also result in a disruption in our business;
	l	the effect of economic or political conditions or any outbreak or escalation of hostilities on the economy on a national, regional or international basis and the impact thereof on our businesses;
	l	the effects of a decline in travel, due to political instability, adverse economic conditions, pandemics, substantial increases in fuel prices or otherwise, on our travel related businesses;
	l	the effects of a decline in the volume or value of U.S. existing home sales, due to adverse economic changes or otherwise, on our real estate related businesses;
	l	the effects of changes in current interest rates, particularly on our real estate franchise and real estate brokerage businesses;
	l	the final resolution or outcome of our unresolved pending litigation relating to the previously announced accounting irregularities (which were discovered and addressed in 1998);
	l	our ability to develop and implement operational, technological and financial systems to manage growing operations and to achieve enhanced earnings or effect cost savings;
	l	competition in our existing and potential future lines of business and the financial resources of, and products offered by, competitors;
	l	our failure to reduce quickly our substantial technology costs and other overhead costs, if required, in response to a reduction in revenue in any future period, particularly with respect to our reservations systems, and in our global distribution systems, vehicle rental and real estate brokerage businesses;
	l	our failure to provide fully integrated disaster recovery technology solutions in the event of a disaster or other business interruption;
	l	our ability to successfully integrate and operate acquired and merged businesses and risks associated with such businesses, including the acquisitions of ebookers plc and Gullivers Travel Associates, the compatibility of the operating systems of the combining companies, and the degree to which our existing administrative and back-office functions and costs and those of the acquired companies are complementary or redundant;
	l	our ability to obtain financing on acceptable terms to finance our growth strategy and to operate within the limitations imposed by financing arrangements and to maintain our credit ratings;

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	l	in relation to our assets under management programs, (i) the deterioration in the performance of the underlying assets of such programs and (ii) our inability to access the secondary market for certain of our securitization facilities and to act as servicer thereto;
	l	competitive and pricing pressures in the travel industry, including the car rental and global distribution services industries;
	l	changes in the vehicle manufacturer arrangements in our Avis and Budget car rental business, including but not limited to the failure of the manufacturers to meet their obligations under repurchase arrangements, or changes in the credit quality of such vehicle manufacturers, each of which could have a material adverse effect on our results and the principal financing program for our car rental business;
	l	filing of bankruptcy by, or the loss of business from, any of our significant customers or suppliers, including our airline customers, and the ultimate disposition of any such bankruptcy, including the bankruptcy reorganization of Delta Air Lines, Inc. and Northwest Airlines Corporation;
	l	changes in laws and regulations, including changes in global distribution services rules, telemarketing and timeshare sales regulations and real estate related regulations, state, federal and international tax laws and privacy policy regulation;
	l	changes in accounting principles and/or business practices that may result in changes in the method in which we account for transactions and may affect comparability between periods and changes to the estimates and assumptions that we use to prepare our financial statements due to subsequent developments, such as court or similar rulings and actual experience; and
	l	substantial damage to, or interruption of business related to, our timeshare properties, our rental cars or hotel properties of our franchisees due to natural disasters, such as hurricanes, floods, fires or earthquakes.

	l	risks inherent in the contemplated separation and related transactions, including risks related to increased borrowings, and costs related to the proposed transaction;
	l	changes in business, political and economic conditions in the U.S. and in other countries in which Cendant and its companies currently do business;
	l	changes in Cendant’s overall operating performance and changes in the operating performance of any of Cendant’s business segments;
	l	access to financing sources, required changes to existing financings, and changes in credit ratings, including those that may result from the proposed transaction;
	l	the ability of Cendant to obtain the financing necessary to consummate all or a portion of the transaction;
	l	new costs, which may be greater than the general corporate overhead expenses currently allocated, due to each of the separating companies being operated as stand-alone companies, rather than as part of an integrated group;
	l	the terms of agreements among the separating companies, including the allocations of assets and liabilities, including contingent liabilities and guarantees, and commercial arrangements;
	l	increased demands on Cendant’s management team as a result of executing the proposed transactions, in addition to their regular day-to-day management responsibilities; and

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	l	our ability to complete all or a portion of the contemplated separation plan, which will be subject to certain conditions precedent, including final approval by our Board of Directors, receipt of a tax opinion of counsel, receipt of solvency opinions and the filing and effectiveness of registration statements.

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ITEM 1.	BUSINESS

	l	Our Real Estate Services segment franchises the real estate brokerage businesses of the CENTURY 21, Coldwell Banker, Coldwell Banker Commercial, Sotheby’s International Realty, and ERA brands; provides residential real estate brokerage services through our NRT subsidiary under our Coldwell Banker, ERA, Corcoran Group and Sotheby’s International Realty brands; assists companies and government agencies in relocating employees through Cendant Mobility; provides title and settlement services, including closing and escrow services, in connection with residential and commercial real estate transactions through our title and settlement services business; and includes home mortgage services through our venture with PHH Corporation.
	l	Our Hospitality Services segment franchises hotels under our Wyndham, Wingate Inns, Ramada, Days Inn, Super 8, Howard Johnson, AmeriHost Inn, Travelodge and Knights Inn lodging brands; facilitates the exchange of vacation ownership intervals through our RCI subsidiary; and markets and manages vacation rental properties through a number of brands recognized primarily in Europe.
	l	Our Timeshare Resorts segment includes the sales and marketing of vacation ownership interests, property management services to property owners’ associations, consumer financing in connection with the purchase by individuals of vacation ownership interests and the development of timeshare resorts through our Fairfield Resorts and Trendwest Resorts brands.
	l	Our Travel Distribution Services segment markets, sells and distributes a broad array of travel and travel-related products and services through multiple channels to facilitate travel commerce both on behalf of travel suppliers and travel distributors and directly to consumers. Our proprietary electronic global distribution business, Galileo, markets and distributes travel products on behalf of travel suppliers such as airlines, hotels and car rental companies to traditional and online travel agents throughout the world. Our numerous online travel web sites, including Orbitz.com and CheapTickets.com in the United States and ebookers.com in Europe, market and sell travel products and services directly to consumers. In addition, we own and operate Gullivers Travel Associates, a wholesale distribution business for travel agents and other distributors of travel content.
	l	Our Vehicle Rental segment operates and franchises our Avis and Budget vehicle rental businesses.

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	l	Coldwell Banker, one of the world’s leading brands for the sale of million-dollar-plus homes and one of the largest residential real estate brokerage franchisors, with approximately 3,800 franchise and company owned offices and approximately 125,000 sales associates in the United States, Canada and 28 other countries and territories;
	l	CENTURY 21, one of the world’s largest residential real estate brokerage franchisors, with approximately 7,900 franchise offices and approximately 143,000 sales associates located in 42 countries and territories;

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	l	ERA, a leading residential real estate brokerage franchisor, with approximately 2,800 franchise and company owned offices and approximately 36,600 sales associates located in 30 countries and territories;
	l	Sotheby’s International Realty, a luxury real estate brokerage franchisor which we acquired in February 2004 and have grown from 15 company owned offices to 220 franchise and company owned offices, with approximately 5,100 sales associates in the United States and four other countries and territories; and
	l	Coldwell Banker Commercial, a leading commercial real estate brokerage franchisor, with approximately 160 franchise offices and approximately 1,400 sales associates worldwide.

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	l	home-sale assistance, including the evaluation, inspection, purchasing and selling of a transferee’s home, the issuance of home equity advances to transferees permitting them to purchase a new home before selling their current home (these advances are generally guaranteed by the corporate client), certain home management services, assistance in locating a new home and closing on the sale of the old home, generally at the instruction of the client;
	l	expense processing, relocation policy counseling, relocation-related accounting, including international compensation administration, and other consulting services;

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	l	arranging household goods moving services, with over 70,000 domestic and international shipments in 2005, and providing support for all aspects of moving a transferee’s household goods, including the handling of insurance and claim assistance, invoice auditing and quality control;
	l	visa and immigration support, intercultural and language training and expatriation/repatriation counseling and destination services; and
	l	group move management services providing coordination for moves involving a large number of transferees to or from a specific regional area over a short period of time.

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	l	We intend to continue to grow our real estate franchise business by selling new franchises, establishing and/or purchasing new brands, assisting current franchisees with their acquisitions and helping franchisees recruit productive sales associates. According to the National Association of Realtors (“NAR”), approximately 50% of sales associates in the U.S. are unaffiliated with a franchise system. We believe our franchise sales force can effectively market our franchise systems to these unaffiliated brokerages. We also intend to continue to expand our international presence through the sale of international master franchise rights and by providing consulting services to the international master franchisors to facilitate growth in each respective territory.
	l	We intend to continue to grow our company owned real estate brokerage business both organically and through strategic acquisitions. To grow our business organically, our management will focus on working with office managers to recruit, retain and develop effective sales associates and also intends to selectively open new offices. With respect to acquisitions, we will continue to be opportunistic and identify areas where there is potential for growth or that otherwise complement our overall long-term strategy and goals.
	l	We intend to grow our relocation services business through a combination of new client signings, providing additional services to existing clients as well as new product offerings. We believe our comprehensive suite of services enables us to meet all of our clients’ relocation needs.
	l	We intend to grow our title and settlement services business by increasing the number of title and settlement services offices that are located in or around our company owned brokerage offices, and through entering into contracts and joint ventures with our franchisees. We will also continue to actively market the availability of these services to our franchisees.
	l	According to NAR, over 70% of all homebuyers used the Internet in their search for a new home in 2005. In addition, many potential new customers use the Internet to perform research on real estate

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		brokers. Recognizing this trend, we are increasing the percentage of our advertising dollars that are spent on Internet based advertising relative to print ads and other traditional forms of advertising. In addition, we intend to continue to develop new technologies that will be more responsive to our customers’ needs and that will help our sales associates become more efficient and successful.
	l	We intend to continue to increase revenues in all of our businesses by increasing our cross-selling opportunities. For example, we will seek to increase the percentage of successful referrals that our relocation services business makes to franchised and company owned brokerage offices through enhanced coordination as well as by maintaining a referral network that covers the entire United States.

	l	Wyndham Hotels & Resorts. Wyndham Hotels & Resorts serves the upscale and upper upscale segments of the lodging market. The brand includes Viva Wyndham Resorts, a collection of all-inclusive resorts in the Caribbean and Mexico. Wyndham Hotels & Resorts offer signature programs, which include Wyndham’s Meetings ByRequest, Wyndham’s Women On Their Way and Wyndham ByRequest. We acquired the Wyndham brand in 2005 for $111 million in cash.

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	l	Wingate Inns. Wingate Inns serves the upper middle segment of the lodging market.
	l	Ramada Worldwide. Ramada Worldwide serves the middle segment of the lodging market. In North America, we serve this segment through Ramada, Ramada Hotel, Ramada Plaza and Ramada Limited and internationally, we serve the middle segment of the lodging market through Ramada Resort, Ramada Hotel and Resort, Ramada Hotel and Suites, Ramada Plaza and Ramada Encore.
	l	Days Inns Worldwide. Days Inns Worldwide serves the upper economy segment of the lodging market. In the United States, we serve the upper economy segment of the lodging market through Days Inn, Days Hotel, Days Suites, DAYSTOP and Days Inn Business Place. In the United Kingdom, we serve the upper economy segment of the lodging market through Days Hotels, Days Inn and Days Serviced Apartments and in all other countries where we franchise Days Inn hotels, we serve the upper economy segment of the lodging market primarily through Days Inn and Days Hotel.
	l	Super 8 Motels. Super 8 Motels serves the economy segment of the lodging market.
	l	Howard Johnson. Howard Johnson serves the middle segment of the lodging market through Howard Johnson Plaza, Howard Johnson Inn and Howard Johnson Hotel and the economy segment of the lodging market through Howard Johnson Express.
	l	AmeriHost Inn. The AmeriHost Inn brand serves the middle segment of the lodging market through AmeriHost Inn and AmeriHost Inn & Suites.
	l	Travelodge Hotels. Travelodge Hotels serves the upper and lower economy segments of the lodging market through Travelodge Hotels, Travelodge, Travelodge Suites and Thriftlodge. Travelodge units in Canada serve the middle segment of the lodging market.
	l	Knights Inn. The Knights Inn brand serves the lower economy segment of the lodging market.

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																Average
												Average				Revenue Per
		Primary Domestic		Avg. Rooms		# of						Occupancy		Average Daily		Available
Brand		Sector Served		Per Property		Properties		# of Rooms (*)		Location		Rate		Room Rate		Room
Wyndham		Upscale & Upper Upscale		294		101		29,651		U.S. and International (1)		62.1%		$102.46		$63.66
Wingate Inns		Upper Middle		93		146		13,573		U.S. and International (2)		63.9%		$78.33		$50.08
Ramada		Middle		119		916		108,937		U.S. and International (3)		53.4%		$66.61		$35.60
Days Inn		Upper Economy		82		1,844		150,302		U.S. and International (4)		50.2%		$57.65		$28.96
Super 8		Economy		61		2,040		124,031		U.S. and International (5)		53.7%		$53.36		$28.65
Howard Johnson		Middle & Economy		95		458		43,430		U.S. and International (6)		48.4%		$60.12		$29.10
AmeriHost Inn		Middle		72		114		8,194		U.S. and International (7)		56.4%		$60.69		$34.24
Travelodge		Upper Economy & Lower Economy		75		513		38,410		U.S. and International (8)		48.9%		$57.44		$28.09
Knights Inn		Lower Economy		75		216		16,141		U.S. and International (9)		42.2%		$38.34		$16.19
Total				84		6,348		532,669		Total Average		51.9%		$59.78		$31.00

(*)	From time to time, as a result of hurricanes, other adverse weather events and ordinary wear and tear, some of the rooms at these hotels may be taken out of service for repair and renovation and therefore may be unavailable.
(1)	Two properties located in Canada and 14 properties located in Aruba, Bahamas, Bermuda, Dominican Republic, Mexico, Netherlands Antilles and U.S. Virgin Islands.
(2)	Two properties located in Canada.
(3)	66 properties located in Canada and 183 properties located in Australia, Bahrain, China, Costa Rica, Czech Republic, Egypt, England, Finland, France, Germany, Hungary, India, Indonesia, Ireland, Italy, Japan, Korea, Lithuania, Mexico, Morocco, Netherlands, New Caledonia, Oman, Qatar, Romania, Saudi Arabia, Sweden, Switzerland, Turkey and United Arab Emirates.
(4)	86 properties located in Canada, and 62 properties located in Argentina, China, Egypt, England, Guam, India, Ireland, Italy, Jordan, Mexico, Philippines, South Africa and Uruguay.
(5)	106 properties located in Canada and 12 located in China.
(6)	47 properties located in Canada and 50 located in Argentina, Brazil, China, Colombia, Dominican Republic, Ecuador, Guatemala, India, Israel, Jordan, Netherlands Antilles, Malta, Mexico, Peru, Romania, United Arab Emirates and Venezuela.
(7)	Four Aston properties located in Canada. Aston is a small lodging brand we franchise in Canada.
(8)	118 properties located in Canada and two located in Mexico. We do not own the rights to the Travelodge brand outside of the United States, Canada and Mexico.
(9)	10 properties located in Canada.

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	l	Lodging. Our long-term strategy is to focus our business in three areas to accelerate growth: (1) international expansion with our Wyndham, Ramada, Days Inn and Super 8 brands in Europe, Mexico and China; (2) domestic expansion of Wyndham, Wingate Inn and Ramada in the middle, upscale and upper upscale lodging segments; and (3) maximization of revenue per available room from our core domestic economy hotels through brand revitalization. In addition, we intend to further accelerate growth of all brands, in all market segments by expanding membership in our TripRewards consumer loyalty program.
	l	Vacation Rental and Exchange. Our long-term strategy is to grow our business of offering vacations to leisure travelers through the vacation networks of our integrated vacation rental and exchange businesses. We plan to grow our vacation networks in new geographic areas, such as the Middle East and Asia, increase the inventory of our vacation networks in existing geographic areas and develop new business models.

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	l	Continue growing Avis. We have designed initiatives to increase Avis’ car rental volume and maintain profitability while preserving the overall Avis brand position and product strategy. As a result of changes to fleet size and disposition, pricing, and promotion and advertising, Avis has recently experienced volume growth in terms of rental days, resulting in improved share in its core on-airport market segment. Key elements of the effort to grow Avis include winning corporate accounts, personalizing pricing for key customers and improving brand loyalty.
	l	Continue re-positioning of Budget brand. We have organized a group of interrelated plans that are designed to lower Budget’s costs and position the brand in the value-priced market segment. The Avis and Budget brand differentiation allows us to capture a wide range of car rental demand at multiple price points and with a variety of services and product levels.
	l	Accelerate off-airport development. We seek to grow off-airport revenue for Avis and Budget by continuing our effort to identify and attract segments of market demand and launch new products. In particular, we have dedicated an Insurance Replacement Sales team to serve the specific dynamics of the insurance replacement sector. As a result, our insurance replacement business has grown and we have positioned ourselves to serve insurance replacement customers nationwide. For 2005, we generated approximately 16% and 20% of our domestic Avis and Budget car rental revenue, respectively, from our owned off-airport locations. We opened 103 new off-airport locations in 2005.
	l	Pursue differential pricing and hidden channels. We have developed technology that will allow us to tailor our pricing to specific customer segments. We believe that approximately half of all car rental brand decisions are made based on price. By appropriately developing tailored price points for our different customers, we believe we can capture volume in the price-sensitive leisure market segment without altering the price points for our more inelastic customer groups. Specifically, we plan to utilize technology that allows Avis and Budget to target customers with rates and prices based on past shopping and rental behavior.
	l	Broaden vehicle manufacturer relationships. In an effort to mitigate increases in manufacturers’ car pricing going forward, we are seeking to broaden our relationships with more vehicle manufacturers. This new business strategy is expected to help Avis and Budget flexibly manage fleet costs by moving to a more balanced multi-supplier model, allowing them to continue to compete economically and competitively with other car rental companies. We plan to increase our purchases from Chrysler, Ford, Hyundai, and Toyota to broaden our relationships.

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	•	Our B2B businesses also include our Gullivers Travel Associates (“GTA”) wholesale distribution business.
	•	Our B2C businesses also include our online accommodation booking sites, OctopusTravel.com, HotelClub.com and RatesToGo.com and our travel information providers, Away.com, Gorp.com and OutsideOnline.com.

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	l	With respect to our B2B business, we intend to grow by effectively assisting our business customers with the distribution and sale of travel products and services. To accomplish this goal, we intend to utilize our numerous competitive strengths including: (i) a global inventory of products and services; (ii) established relationships with travel suppliers and travel agencies; and (iii) our low cost operating structure. By leveraging these strengths, we intend to capitalize on expected GDS growth in Asia Pacific, the Middle East and to a lesser degree Eastern Europe. We also intend to grow through acquisitions of additional independent national distribution companies.
	l	With respect to our B2C business, we plan to grow our differentiated consumer brands and target these brands towards different consumer needs and preferences to sell higher margin, higher complexity travel products across all channels. We also intend to continue to leverage our technology infrastructure in order to enhance and expand upon our OrbitzTLC customer care program through the development of new services.
	l	For both our B2B and B2C businesses, we plan to increase our importance to supplier partners by providing value-added distribution services. We intend to tailor specific distribution packages that cover the spectrum of both our B2B and B2C businesses to best meet the demands of our supplier partners, which will include offering TDS enterprise-wide sponsorship and advertising opportunities. With respect to our B2B supplier relations, we intend to: (i) renegotiate our airline distribution agreements in 2006 to continue to secure full content; (ii) develop our new airline reservations hosting business, aiRES, with the launch of our first customer, WestJet, which is expected before the end of 2006; and (iii) leverage the expertise within GTA to secure advantaged hotel and other destination services content and to integrate these offerings into the Galileo desktop. With respect to our B2C supplier relations, we plan to continue to enhance our consumer and web portal technology for our supplier direct website initiatives.
	l	For both our B2B and B2C businesses, we plan to operate more effectively by globally leveraging technology, content and other platforms and creating innovative products and services. For our B2B

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		business, we intend to develop agency productivity tools. For our B2C business, we intend to leverage our domestic technology platform to improve the functionality and ease of use of our international consumer businesses such as ebookers and OctopusTravel.

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	l	Generally, the working capital requirements and capital for general corporate purposes of each of our businesses, including acquisitions and capital expenditures, have historically been satisfied as part of Cendant’s corporate-wide cash management policies which include cash generated from the businesses we plan to separate. Subsequent to the completion of the Separation Plan, each of the independent companies will no longer have access to the businesses of the other separated companies in order to finance its working capital or other cash requirements. Without the opportunity to obtain financing from the other separated businesses, each of the independent companies is expected to need to obtain independent financing from banks, or through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements.
	l	Subsequent to the completion of the Separation Plan, the cost of capital for most of the separated businesses will likely be higher than Cendant’s cost of capital prior to the distributions due to several factors, including lower expected credit ratings for each independent company than Cendant’s current credit ratings.
	l	Prior to the completion of the Separation Plan, our businesses will have been operated by Cendant as part of our broader corporate organization, rather than as independent companies. We have performed various corporate functions for each of the businesses, including, but not limited to, tax administration, certain governance functions (including compliance with the Sarbanes-Oxley Act of 2002 and internal audit) and external reporting.

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	l	Other significant changes may occur in the cost structure, management, financing and business operations of each independent company as a result of each such business operating separate from each other.

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	l	global security issues, political instability, acts or threats of terrorism, hostilities or war,
	l	increased airport security that could reduce the convenience of air travel,
	l	natural disasters, such as the hurricanes that occurred in the Gulf Coast in 2005,
	l	travelers’ perception of the occurrence of travel-related accidents,
	l	travelers’ concerns about exposure to contagious diseases and pandemics, such as SARS or bird flu,
	l	increases in fuel prices,
	l	general economic conditions in the United States and worldwide,
	l	political issues in the Middle East, Asia, Latin America and elsewhere, and
	l	the financial condition of travel suppliers.

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	l	With respect to our real estate businesses, adverse developments in the home sale industry and our ability to control costs, particularly broker commission rates and storefront costs.
	l	With respect to our hospitality and timeshare resorts businesses, our ability to retain our hotel franchisees; our ability to generate tours and close timeshare sales; the availability of economically viable real estate in the areas of demand by consumers of our hospitality franchisees and timeshare resorts business; and RCI’s ability to compete with timeshare developers who have internal exchange programs as well as within the vacation rental industry.
	l	With respect to our travel distribution businesses, our ability to grow our online direct to consumer brands; our ability to sell complex travel, such as dynamic packaging; our failure to attract and retain customers in a cost effective manner; the cost of renewing contracts in our Preferred Fares Select program; our ability to address technology issues at ebookers; and management turnover and distraction from acquisition integration efforts.
	l	With respect to our vehicle rental business, our ability to properly react to changes in market conditions and successfully market to replacement renters and the insurance companies and our ability to increase our prices in order to offset increased fleet costs.

	l	Our ability to obtain additional financing on favorable terms could be negatively impacted;
	l	Our ability to maintain our asset-backed funding arrangements may be limited; and
	l	The interest rate and facility fees charged in connection with our borrowing facilities would increase.

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	l	the Gramm-Leach Bliley Act which governs the disclosure and safeguarding of consumer financial information;
	l	various state and federal privacy laws;
	l	the USA PATRIOT Act;
	l	restrictions on transactions with persons on the Specialty Designated Nationals and Blocked Persons list promulgated by the Office of Foreign Assets Control of the Department of the Treasury;
	l	the U.S. Foreign Corrupt Practices Act;
	l	“controlled business” statutes, which impose limits on the number of businesses that may be controlled by any one entity in a particular jurisdiction;
	l	regulation by insurance and other regulatory authorities;

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	l	requirements governing the licensing and conduct of real estate brokerage and brokerage-related businesses;
	l	environmental regulations with respect to our vehicle rental operations;
	l	the Fair Housing Act; and
	l	laws and regulations in jurisdictions outside the United States in which we do business.

	l	changes in government regulation
	l	periods of economic slowdown or recession;
	l	rising interest rates and general availability of mortgage financing;
	l	adverse changes in local or regional economic conditions;
	l	a decrease in the affordability of homes;
	l	shifts in populations away from the markets that we, NRT or our franchisees serve;
	l	tax law changes, including potential limits on, or elimination of, the deductibility of certain mortgage interest expense, real property taxes and employee relocation expenses;
	l	decreasing home ownership rates;
	l	declining demand for real estate; and/or
	l	acts of God, such as hurricanes, earthquakes and other natural disasters.

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Vehicle Rental Segment

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ITEM 2.	PROPERTIES

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ITEM 3.	LEGAL PROCEEDINGS

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ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

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ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Price of Common Stock

2005		High				Low
First Quarter		$	22.97			$	20.33
Second Quarter			22.37				19.17
Third Quarter			22.49				19.64
Fourth Quarter			20.54				16.50

2004		High				Low
First Quarter		$	24.39			$	21.74
Second Quarter			25.07				21.68
Third Quarter			24.94				21.07
Fourth Quarter			23.42				20.02

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											Number of Shares				Approximate Dollar
			Total Number								Purchased as Part of				Value of Shares that
			of Shares				Average Price				Publicly Announced				May Yet Be
			Purchased				Paid per Share				Plan (b)				Purchased Under Plan
	October 1 – 31, 2005		6,414,580				$18.11				6,414,580				$922,211,438
	November 1 – 30, 2005		8,646,700				$17.92				8,646,700				$769,699,752
	December 1 – 31, 2005(a)		4,325,557				$17.38				4,325,557				$698,152,828
	Total		19,386,837				$ 17.86				19,386,837				$698,152,828

(a)	Includes 1,015,000 shares purchased for which the trade date occurred during December 2005 while settlement occurred in January 2006.

(b)

Our share repurchase program, which does not have an expiration date, was first publicly announced on October 13, 1998 in the amount of $1 billion and has been increased from time to time and each such increase has been publicly announced, including an increase to include all stock option exercise proceeds in the program. The most recent increase, in the amount of $500 million, was approved by our Board of Directors in July 2005. No shares were purchased outside our share repurchase program during the periods set forth in the table above.

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			At or For the Year Ended December 31,
			2005				2004				2003				2002				2001
			(In millions, except per share data)
Results of Operations
Net revenues			$	18,236			$	16,689			$	15,418			$	11,487			$	6,177
Income from continuing operations			$	869			$	1,365			$	1,164			$	706			$	138
Income from discontinued operations, net of tax				480				717				301				140				285
Cumulative effect of accounting changes, net of tax				(8	)			-				(293	)			-				(38	)
Net income			$	1,341			$	2,082			$	1,172			$	846			$	385
Per Share Data
Income from continuing operations:
	Basic		$	0.84			$	1.32			$	1.14			$	0.69			$	0.14
	Diluted			0.82				1.28				1.10				0.67				0.14
Income from discontinued operations:
	Basic		$	0.46			$	0.70			$	0.30			$	0.14			$	0.33
	Diluted			0.45				0.68				0.28				0.13				0.31
Cumulative effect of accounting changes:
	Basic		$	(0.01	)		$	-			$	(0.29	)		$	-			$	(0.05	)
	Diluted			(0.01	)			-				(0.27	)			-				(0.04	)
Net income:
	Basic		$	1.29			$	2.02			$	1.15			$	0.83			$	0.42
	Diluted			1.26				1.96				1.11				0.80				0.41
Cash dividends declared			$	0.40			$	0.32			$	-			$	-			$	-
Financial Position
Total assets			$	34,104			$	42,570			$	39,527			$	36,017			$	33,597
Assets under management programs				12,411				14,698				13,673				11,227				8,095
Long-term debt, including current portion				3,936				4,330				5,984				6,460				6,992
Debt under management programs (*)				10,673				12,154				11,556				9,575				6,766
Mandatorily redeemable preferred interest in a subsidiary				-				-				-				375				375
Stockholders’ equity				11,291				12,695				10,186				9,315				7,068

(*)	Includes related-party debt due to Cendant Rental Car Funding (AESOP) LLC. See Note 15 to our Consolidated Financial Statements.

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ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	l	Real Estate Services—franchises the real estate brokerage businesses of our four residential brands and one commercial brand, provides real estate brokerage services, facilitates employee relocations and provides home buyers with title and closing services.
	l	Hospitality Services—franchises nine lodging brands, facilitates the exchange of vacation ownership intervals and markets vacation rental properties.
	l	Timeshare Resorts—markets and sells vacation ownership interests, provides property management services to property owners’ associations, provides consumer financing to individuals purchasing vacation ownership interests and develops resort properties.
	l	Vehicle Rental—operates and franchises our car and truck rental brands.
	l	Travel Distribution Services—provides global distribution services for the travel industry, corporate and consumer online travel agency services.
	l	Mortgage Services—provided home buyers with mortgage lending services (this business was disposed of in January 2005—see below for further discussion).

	l	Real Estate Services—will encompass our current Real Estate Services segment.
	l	Hospitality Services—will encompass our current Hospitality Services and Timeshare Resorts segments.

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	l	Travel Distribution—will encompass our current Travel Distribution Services segment.
	l	Vehicle Rental—will encompass our current Vehicle Rental Services segment.

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			2005				2004				Change
Net revenues			$	18,236			$	16,689			$	1,547
Total expenses				16,890				14,642				2,248
Income before income taxes and minority interest				1,346				2,047				(701	)
Provision for income taxes				474				674				(200	)
Minority interest, net of tax				3				8				(5	)
Income from continuing operations				869				1,365				(496	)
Income from discontinued operations, net of tax				27				519				(492	)
Gain (loss) on disposals of discontinued operations, net of tax:
	PHH valuation and transaction-related charges			(312	)			-				(312	)
	Gain on disposals			765				198				567
Cumulative effect of accounting change, net of tax				(8	)			-				(8	)
Net income			$	1,341			$	2,082			$	(741	)

						Contribution to				Contribution to
Acquired Business		Date of Acquisition				Net Revenues				Total Expenses
Orbitz (a)		November 2004				$	343			$	311
Gullivers (b)		April 2005					209				185
ebookers (c)		February 2005					94				138
Landal GreenParks (d)		May 2004					41				48
Real Estate brokerages		(*)					249				244
Total Contributions						$	936			$	926

	(*)	These businesses were acquired at various dates during or subsequent to 2004.

	(a)	Reflects the results of operations from January 1 through November 12, 2005 (the corresponding period during which this business was not included during 2004).

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	(b)	Reflects the results of operations from April 1 through December 31, 2005 (the corresponding period during which this business was not included during 2004).

	(c)	Principally reflects the results of operations from February 28 through December 31, 2005 (the corresponding period during which this business was not included during 2004).

	(d)	Principally reflects the results of operations from January 1 through May 5, 2005 (the corresponding period during which this business was not included during 2004).

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			Revenues												EBITDA
											%												%
			2005				2004				Change				2005				2004				Change
Real Estate Services			$	7,141			$	6,552				9	%		$	1,184			$	1,131				5	%
Hospitality Services				1,527				1,340				14				449				460				(2	)
Timeshare Resorts				1,735				1,544				12				289				254				14
Vehicle Rental				5,316				4,708				13				439				467				(6	)
Travel Distribution Services				2,429				1,788				36				100				466				(*	)
Mortgage Services				46				700				(*	)			(181	)			97				(*	)
Total Reportable Segments				18,194				16,632				9				2,280				2,875
Corporate and Other (a)				42				57				(*	)			(175	)			(66	)
Total Company			$	18,236			$	16,689				9				2,105				2,809
Less:	Non-program related depreciation and amortization															547				483
	Non-program related interest expense, net															189				245
	Early extinguishment of debt															—				18
	Amortization of pendings and listings															23				16
Income before income taxes and minority interest															$	1,346			$	2,047

	(*)	Not meaningful.

	(a)	Includes unallocated corporate overhead, the elimination of transactions between segments and the results of operations of certain non-strategic businesses.

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		2004				2003				Change
Net revenues		$	16,689			$	15,418			$	1,271
Total expenses			14,642				13,670				972
Income before income taxes and minority interest			2,047				1,748				299
Provision for income taxes			674				563				111
Minority interest, net of tax			8				21				(13	)
Income from continuing operations			1,365				1,164				201
Income from discontinued operations, net of tax			519				301				218
Gain on disposal of discontinued operations, net of tax			198				-				198
Cumulative effect of accounting change, net of tax			-				(293	)			293
Net income		$	2,082			$	1,172			$	910

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		Revenues												EBITDA
		2004				2003				% Change				2004				2003				% Change
Real Estate Services		$	6,552			$	5,569				18	%		$	1,131			$	942				20	%
Hospitality Services			1,340				1,096				22				460				385				19
Timeshare Resorts			1,544				1,428				8				254				248				2
Vehicle Rental			4,708				4,598				2				467				328				42
Travel Distribution Services			1,788				1,659				8				466				459				2
Mortgage Services			700				1,025				(32	)			97				302				(68	)
Total Reportable Segments			16,632				15,375				8				2,875				2,664
Corporate and Other (a)			57				43					*			(66	)			(101	)
Total Company		$	16,689			$	15,418				8				2,809				2,563
Less: Non-program related depreciation and amortization															483				439
Non-program related interest expense, net															245				298
Early extinguishment of debt															18				58
Amortization of pendings and listings															16				20
Income before income taxes and minority interest														$	2,047			$	1,748

(*)	Not meaningful.
(a)	Includes the results of operations of non-strategic businesses, unallocated corporate overhead and the elimination of transactions between segments.

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		2004				2003				Change				% Change
Loan closings and loan sales ($ in billions):
Loans closed to be securitized		$	34.4			$	60.3			$	(25.9	)			(43	)%
Fee-based loan closings			18.1				23.4				(5.3	)			(23	)
Total closings		$	52.5			$	83.7			$	(31.2	)			(37	)
Loan sales		$	32.5			$	58.1			$	(25.6	)			(44	)
Production revenue ($ in millions):
Production revenue from loan sales		$	323			$	958			$	(635	)			(66	)
Fee-based production revenue			273				354				(81	)			(23	)
Total production revenue		$	596			$	1,312			$	(716	)			(55	)

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		2005				2004				Change
Total assets exclusive of assets under management programs		$	21,693			$	27,872			$	(6,179	)
Total liabilities exclusive of liabilities under management programs			10,203				15,336				(5,133	)
Assets under management programs			12,411				14,698				(2,287	)
Liabilities under management programs			12,610				14,539				(1,929	)
Stockholders’ equity			11,291				12,695				(1,404	)

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			Twelve Months Ended December 31,
			2005				2004				Change
Cash provided by (used in):
	Operating activities		$	3,314			$	3,613			$	(299	)
	Investing activities			(2,483	)			(3,127	)			644
	Financing activities			(393	)			(1,297	)			904
Effects of exchange rate changes				(51	)			13				(64	)
Cash provided by discontinued operations				(19	)			519				(538	)
Net change in cash and cash equivalents			$	368			$	(279	)		$	647

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							As of				As of
							December 31,				December 31,
			Maturity Date				2005				2004				Change
Term notes
	67/8% notes		August 2006				$	850			$	850			$	-
	4.89% notes		August 2006					100				100				-
	61/4% notes		January 2008					798				797				1
	61/4% notes		March 2010					349				349				-
	73/8% notes		January 2013					1,192				1,191				1
	71/8% notes		March 2015					250				250				-
Other
	Revolver borrowings (a)		November 2009					357				650				(293	)
	Net hedging gains (losses) (b)							(47	)			17				(64	)
	Other							87				126				(39	)
							$	3,936			$	4,330			$	(394	)

(a)	Approximately $350 million of the outstanding borrowings at December 31, 2005 represent borrowings to repatriate foreign earnings under the American Jobs Creation Act of 2004.

(b)

As of December 31, 2005, this balance represents $153 million of mark-to-market adjustments on current interest rate hedges, partially offset by $106 million of net gains resulting from the termination of interest rate hedges, which will be amortized by the Company to reduce future interest expense. As of December 31, 2004, the balance represented $138 million of net gains resulting from the termination of interest rate hedges, which were partially offset by $121 million of mark-to-market adjustments on current interest rate hedges.

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				As of				As of
				December 31,				December 31,
				2005				2004				Change
Asset-Backed Debt:
	Vehicle rental program
		Cendant Rental Car Funding (a)		$	6,957			$	5,935			$	1,022
		Other (b)			952				792				160
	Timeshare program (c)				1,800				1,473				327
	Relocation program (d)				757				400				357
	Vacation rental program				207				251				(44	)
	Mortgage program (e)				-				1,306				(1,306	)
					10,673				10,157				516
Unsecured Debt (f):
	Term notes				-				1,833				(1,833	)
	Commercial paper				-				130				(130	)
	Other				-				34				(34	)
					-				1,997				(1,997	)
Total debt under management programs				$	10,673			$	12,154			$	(1,481	)

(a)	The change in the balance at December 31, 2005 principally reflects the issuance of fixed and floating rate asset-backed notes at various interest rates to support the acquisition of vehicles used in our vehicle rental business partially offset by net repayments of outstanding term notes.
(b)	The change in the balance at December 31, 2005 reflects $71 million of additional borrowings under our truck financing program and $89 million of additional borrowings in our international car rental operations to support the acquisition of vehicles in our vehicle rental business.
(c)	The change in the balance at December 31, 2005 principally reflects the issuance of $525 million of floating rate term notes, which were partially offset by the net repayment of $198 million of term notes.
(d)	The change in the balance at December 31, 2005 principally reflects the issuance of $513 million of variable funding notes and $109 million of additional borrowings under a conduit facility. Also, in 2005, we issued $135 million of debt under a separate conduit facility. Such increases were partially offset by the repayment of $400 million of term notes that matured in first quarter 2005.
(e)	Represents a borrowing arrangement of our former mortgage business, which was spun-off as part of PHH in January 2005.

(f)	The balance at December 31, 2004 represent unsecured borrowings of our former PHH subsidiary, which was spun-off in January 2005.

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						Debt Under
		Corporate				Management
		Debt				Programs
Due in 2006		$	1,021			$	3,548
Due in 2007			142				2,825
Due in 2008			928				1,970
Due in 2009			102				580
Due in 2010			342				909
Thereafter			1,401				841
		$	3,936			$	10,673

		Total				Outstanding				Letters of				Available
		Capacity				Borrowings				Credit Issued				Capacity
Revolving credit facility and commercial paper program (a)		$	3,500			$	357			$	1,256			$	1,887
Letter of credit facility (b)			303				-				303				-

(a)

Outstanding borrowings include $357 million under the Company’s $3.5 billion revolving credit facility, which has a final maturity date of November 2009. In addition to the letters of credit issued as of December 31, 2005, the revolving credit facility contains the committed capacity to issue an additional $494 million in letters of credit. The letters of credit outstanding under this facility at December 31, 2005 were issued primarily to support the Company’s vehicle rental business.

(b)	Final maturity date is July 2010.

			Total				Outstanding				Available
			Capacity				Borrowings				Capacity
Asset-Backed Funding Arrangements (a)
Vehicle rental program
	Cendant Rental Car Funding (b)		$	7,580			$	6,957			$	623
	Other (c)			1,340				952				388
Timeshare program (d)				2,276				1,800				476
Relocation program (e)				847				757				90
Vacation rental program (f)				207				207				-
			$	12,250			$	10,673			$	1,577

(a)	Capacity is subject to maintaining sufficient assets to collateralize debt.

(b)	The outstanding debt is collateralized by approximately $7.5 billion of underlying vehicles (the majority of which are subject to manufacturer repurchase obligations) and related assets.

(c)	The outstanding debt is collateralized by approximately $1.1 billion of underlying vehicles and related assets.

(d)	The outstanding debt is collateralized by approximately $2.9 billion of timeshare-related assets. Borrowings under our asset-linked facility ($550 million) are also recourse to us.

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(e)	The outstanding debt is collateralized by $856 million of underlying relocation receivables and related assets.
(f)	The outstanding debt consists of $139 million of capital leases and $68 million of bank debt. The bank debt is collateralized by $117 million of land and related vacation rental assets. The capital lease obligations have corresponding assets classified within assets under management programs on our Consolidated Balance Sheet as of December 31, 2005.

Moody’s

Investors

Standard

Fitch

Service

& Poor’s

Ratings

Senior unsecured debt

Baa1

BBB+

BBB+

Short-term debt

P-2

A-2

F2

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		2006				2007				2008				2009				2010				Thereafter				Total
Long-term debt, including current portion		$	1,021			$	142			$	928			$	102			$	342			$	1,401			$	3,936
Asset-backed debt under programs (a)			3,548				2,825				1,970				580				909				841				10,673
Operating leases			545				465				358				246				176				744				2,534
Commitments to purchase vehicles (b)			8,035				4,409				1,938				-				-				-				14,382
Other purchase commitments (c)			609				340				205				164				150				131				1,599
		$	13,758			$	8,181			$	5,399			$	1,092			$	1,577			$	3,117			$	33,124

(a)

Represents debt under management programs (including related party debt due to Cendant Rental Car Funding), which was issued to support the purchase of assets under management programs. These amounts represent the contractual maturities for such debt, except for notes issued under our timeshare program where the underlying indentures require payments based on cash inflows relating to the corresponding assets under management programs and for which estimates of repayments have been used.

(b)

Primarily represents commitments to purchase vehicles from either General Motors Corporation or Ford Motor Company. These commitments are subject to the vehicle manufacturers' satisfying their obligations under the repurchase agreements. The purchase of such vehicles is financed through the issuance of debt under management programs in addition to cash received upon the sale of vehicles primarily under repurchase programs (see Note 15 to our Consolidated Financial Statements).

(c)	Primarily represents commitments under service contracts for information technology and telecommunications.

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	l	FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations”

	l	SFAS No. 152, “Accounting for Real Estate Time-Sharing Transactions” and Statement of Position No. 04-2, “Accounting for Real Estate Time-Sharing Transactions”
	l	SFAS No. 123R, “Share Based Payment”

	l	Interest rate movements in one country, as well as relative interest rate movements between countries can materially impact our profitability. Our primary interest rate exposure at December 31, 2005 was to interest rate fluctuations in the United States, specifically LIBOR and commercial paper interest rates due to their impact on variable rate borrowings and other interest rate sensitive liabilities. We anticipate that LIBOR and commercial paper rates will remain a primary market risk exposure for the foreseeable future.
	l	We have foreign currency rate exposure to exchange rate fluctuations worldwide and particularly with respect to the British pound, Canadian dollar, Australian dollar and Euro. We anticipate that such foreign currency exchange rate risk will remain a market risk exposure for the foreseeable future.

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ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

(a)

Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.

(b)

Management’s Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2005. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on this assessment, our management believes that, as of December 31, 2005, our internal control over financial reporting is effective. Our independent auditors have issued an attestation report on our management’s assessment of the Company’s internal control over financial reporting, which is included below.

(c)

Changes in Internal Control Over Financial Reporting. During the second quarter of 2005, we began implementing integration activities related to our acquisitions of ebookers plc and Gullivers Travel Associates, which were consummated on February 28, 2005 and April 1, 2005, respectively. Total revenues and total assets related to these two acquisitions were $303 million for the year ended December 31, 2005 and approximately $1.8 billion as of December 31, 2005, respectively. Each of these companies, headquartered outside of the United States, was accustomed to operating under less stringent financial reporting and operating control frameworks when, compared to Cendant’s existing frameworks

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	(including reporting deadlines, application of U.S. GAAP, general computer controls, extent of process documentation, etc.). As part of the process of integrating these companies into the Cendant process and system of internal controls, we identified areas where improvements in process, systems and documentation were necessary at these businesses. As of December 31, 2005, the majority of the improvements that were initiated to strengthen the control environments at these businesses had been completed.
	Given the large number of businesses through which we operate and their wide variety of information systems and processes, we continue to modify our internal controls and procedures throughout the organization on a fairly continuous basis in order to improve our ability to run our businesses more effectively and/or efficiently. During the introduction and training phases related to these new systems and processes, there may be a temporary weakening in our system of internal controls. However, we do not believe that any such temporary weakening has had, or is likely to have, a material effect on the Company’s internal control over financial reporting.
	Except as described above, there have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s fiscal fourth quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Name		Age		Position
Henry R. Silverman		65		Chairman and Chief Executive Officer; Chairman of Executive Committee
Myra J. Biblowit		57		Director; Member of Compensation and Policy Committees
James E. Buckman		61		Vice Chairman and General Counsel; Director and Member of Executive Committee
Leonard S. Coleman		57		Presiding Director; Chairman of Policy Committee
Martin L. Edelman		64		Director; Member of Executive, Policy and Separation Committees
George Herrera		49		Director; Member of Policy Committee
Stephen P. Holmes		49		Vice Chairman; Chairman and Chief Executive Officer, Travel Content Division; and Director
Louise T. Blouin MacBain		47		Director
Cheryl D. Mills		41		Director; Member of Audit and Corporate Governance Committees
The Right Honourable Brian Mulroney		66		Director; Member of Corporate Governance Committee
Robert E. Nederlander		72		Director; Chairman of Corporate Governance Committee
Ronald L. Nelson		53		President and Chief Financial Officer; Chairman and Chief Executive Officer, Vehicle Rental; Interim Chief Executive Officer, Travel Distribution Division; Director and Member of Executive Committee
Robert W. Pittman		52		Director; Member of Separation Committee
Pauline D.E. Richards		57		Director; Chairman of Audit Committee
Sheli Z. Rosenberg		64		Director; Member of Audit, Compensation, Corporate Governance and Separation Committees
Robert F. Smith		73		Director; Chairman of Compensation Committee; Member of Audit Committee

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			2005 Compensation (1)(2)
Annual Retainer (3)			160,000
Annual Equity Incentive Grant			—(4)
Board Meeting Attendance Fees:
	Board Meeting Fee (per meeting)		0
	Committee Meeting Fee (Chair/Member)		0
	Action By Unanimous Written Consent		0
Audit Committee Chair			30,000
Audit Committee Member			20,000
Compensation Committee Chair			25,000
Compensation Committee Member			10,000
Corporate Governance Committee Chair			15,000
Corporate Governance Committee Member			8,000
Policy Committee Chair			10,000
Policy Committee Member			5,000
Executive Committee Member			10,000
Separation Committee Member (per meeting)			2,000
Presiding Director Stipend			20,000
Other Benefits			Life Insurance (5)

(1)	Members of the Board of Directors who are also our or our subsidiaries’ officers or employees do not receive compensation for serving as a Director.
(2)	The Presiding Director Stipend and all committee membership stipends are paid 50% in cash and 50% in shares of Common Stock required to be deferred under the Deferral Plan (described below). Directors may elect to receive more than 50% of such stipends in shares of deferred Common Stock.
(3)	The Annual Retainer (the “Retainer”) is paid on a quarterly basis on or near the date of regularly scheduled quarterly Board meetings. For 2005, $80,000 of the Retainer was paid in the form of Common Stock required to be deferred under a deferred compensation plan we maintain for the benefit of Non-Employee Directors (the “Deferral Plan”). For 2005, a Non-Employee Director could elect to receive a portion or all of the balance of the Retainer in the form of shares of Common Stock. The number of shares of Common Stock received pursuant to the Common Stock portion of the Retainer or any other compensation paid in the form of Common Stock equaled the value of the compensation being paid in the form of Common Stock, divided by the fair market value of the Common Stock as of the date of grant. All amounts deferred into the Deferral Plan are deferred in the form of deferred stock units. Each deferred stock unit entitles the Non-Employee Director to receive one share of Common Stock immediately following such Director’s retirement or separation of service from the Board for any reason. The Non-Employee Directors may not sell or receive value from any deferred stock unit prior to such separation of service.
(4)	Notwithstanding the elimination of the annual equity incentive grant in 2004, new Non-Employee Directors receive a one-time grant of 5,000 shares of Common Stock, which are required to be deferred under the Deferral Plan.

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(5)

We provide $100,000 of term life insurance coverage for each Non-Employee Director. In addition, we provide each Director with the ability to obtain life insurance in the amount of $1 million on his or her life. Certain, but not all, Directors participate in this program. Upon the death of such Director while still in office, we will donate an aggregate of $1 million to one or more charitable organizations that such Director served or supported.

Name		Offices or Positions Held
Henry R. Silverman		Chairman of the Board and Chief Executive Officer
James E. Buckman		Vice Chairman and General Counsel
Stephen P. Holmes		Vice Chairman, Chairman and Chief Executive Officer, Travel Content Division
Ronald L. Nelson		President and Chief Financial Officer; Chairman and Chief Executive Officer, Vehicle Rental; and Interim Chief Executive Officer, Travel Distribution Division
Richard A. Smith		Chairman and Chief Executive Officer, Real Estate Services Division and Senior Executive Vice President
Linda C. Coughlin		Chief Administrative Officer
Virginia M. Wilson		Executive Vice President and Chief Accounting Officer

Name		Biographical Information
Richard A. Smith		Mr. Smith, age 52, has been Senior Executive Vice President since September 1998 and Chairman and Chief Executive Officer of the Real Estate Services Division since December 1997. Mr. Smith was President of the Real Estate Division of HFS from October 1996 to December 1997 and Executive Vice President of Operations for HFS from February 1992 to October 1996.
Linda C. Coughlin		Ms. Coughlin, age 54, has been Chief Administrative Officer since October 2004. From September 2002 to October 2004, Ms. Coughlin served as President of Linkage, Inc., a leadership and organization development firm. Ms. Coughlin also held senior positions at Zurich Scudder Investments, Inc., Scudder, Stevens & Clark, Citibank and American Express Company since 1976.
Virginia M. Wilson		Ms. Wilson, age 51, has been Executive Vice President and Chief Accounting Officer since September 2003. From October 1999 until August 2003, Ms. Wilson served as Senior Vice President and Controller for MetLife, Inc., a provider of insurance and other financial services. From 1996 until 1999, Ms. Wilson served as Senior Vice President and Controller for Transamerica Life Companies, an insurance and financial services company.

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																			Long Term
																			Compensation
							Annual Compensation																Securities
																			Restricted				Options
															Other Annual				Stock				Common				All Other
Name and							Salary				Bonus				Compensation				Awards				Stock				Compensation
Principal Position			Year				($) (1)				($) (2)				($) (3)				($) (4)				(#) (5)				($) (6)
Henry R. Silverman				2005				3,300,000				12,316,600				100,374				0				0				6,600,496
	Chairman of the			2004				3,300,000				15,281,508				325,843				0				0				5,089,340
	Board and Chief			2003				3,300,000				13,787,520				121,001				0				0				5,604,524
	Executive Officer
James E. Buckman				2005				762,500				1,470,328				—				3,000,000				0				222,928
	Vice Chairman and			2004				762,500				1,969,703				—				3,000,000				0				142,828
	General Counsel			2003				762,500				1,372,500				—				1,046,475				0				132,900
Ronald L. Nelson (7)				2005				762,500				1,331,233				761,842				8,000,002				0				223,583
	President and Chief			2004				762,500				2,296,233				278,611				4,000,000				0				285,088
	Financial Officer;			2003				488,461				976,923				163,002				0				1,042,490				110,794
	Chairman and CEO, Vehicle Rental; Interim CEO, Travel Distribution Division
Stephen P. Holmes				2005				762,500				1,465,128				—				5,000,009				0				216,478
	Chairman and CEO,			2004				762,500				2,105,128				87,185				4,000,000				0				136,983
	Travel Content			2003				762,500				1,437,400				—				1,453,442				0				136,794
	Division
Richard A. Smith				2005				762,500				1,481,582				73,863				5,000,009				0				211,902
	Chairman and CEO,			2004				762,500				2,171,582				—				4,000,000				0				254,182
	Real Estate			2003				762,500				1,565,794				—				1,685,997				0				51,366
	Services Division

(1)	Mr. Silverman’s base salary was increased to $3.3 million in July 2002 and has not increased thereafter. Each other Named Executive Officer has been subject to a base salary freeze since 2003.
(2)	For 2005, bonus amounts include fiscal year 2005 profit-sharing bonuses approved by the Compensation Committee and paid in the first quarter of 2006. For each Named Executive Officer (other than Mr. Silverman), 2005 bonus amounts include regular annual bonuses providing an opportunity to receive a payment targeted at 200% of base

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	salary (175% for Mr. Buckman), but subject to our attainment of performance goals (and, as applicable, the performance of the Named Executive Officer’s division) and the personal performance of the Named Executive Officer. See “—Employment Contracts and Termination, Severance and Change of Control Arrangements” below. Mr. Silverman’s 2005 profit-sharing bonus was calculated pursuant to his employment agreement, which was amended in 2004 pursuant to the settlement of a stockholder derivative action. Amounts also include special bonuses paid to Named Executive Officers (other than Mr. Silverman) during the first quarter of 2006 under the Executive Officer Supplemental Life Insurance Program. The following amounts were paid to the Named Executive Officers under this program: Mr. Buckman—$135,328; Mr. Nelson—$96,233; Mr. Holmes—$80,128; and Mr. Smith—$96,582. See footnote (6) below.
(3)	Except where indicated, perquisites and personal benefits are less than the lesser of $50,000 or 10% of the salary and bonus for each Named Executive Officer in each year. In 2005, Mr. Silverman’s perquisites and personal benefits included $49,388 for personal use of corporate aircraft and $49,986 for provision of corporate automobiles and drivers; Mr. Nelson’s perquisites and personal benefits included $667,662 for payment or reimbursement of residential relocation expenses (including tax assistance); and Mr. Smith’s perquisites and personal benefits included $26,925 for personal use of corporate aircraft and $27,065 for provision of corporate automobiles (including tax assistance). In 2004, Mr. Silverman’s perquisites and personal benefits included $102,697 for personal use of corporate aircraft and $165,013 for the reimbursement of legal fees (including tax assistance) incurred in connection with the negotiation of his employment agreement; Mr. Nelson’s perquisites and personal benefits included $221,914 for payment or reimbursement of residential relocation expenses (including tax assistance); and Mr. Holmes’ perquisites and personal benefits included $42,537 for personal use of corporate aircraft. In 2003, Mr. Silverman’s perquisites and personal benefits included $59,825 for personal use of corporate aircraft and Mr. Nelson’s perquisites and personal benefits included $141,747 for payment or reimbursement of residential relocation expenses (including tax assistance).
(4)	On April 26, 2005, each Named Executive Officer (other than Mr. Silverman) was granted performance-vesting restricted stock units relating to shares of our common stock, par value $0.01 per share (“Common Stock”). Upon the vesting of a unit, the Named Executive Officer becomes entitled to receive a share of Common Stock. Up to one-eighth of the units may vest on April 27 in each of 2006, 2007, 2008 and 2009 based upon the extent to which we attain pre-established performance goals for fiscal year 2005 through the end of the most recently completed fiscal year prior to such business day (i.e., 25% of the units scheduled to vest each year will vest if performance reaches “threshold” levels, and 100% of such units will vest if performance reaches “target” levels). The performance goals relating to these units are based upon the “total unit growth” of the Common Stock in relation to the average historic “total stockholder return” of the S&P 500 (“total unit growth” is comprised of earnings before interest, taxes, depreciation and amortization, plus increases in free cash flow generation). Units which fail to vest in 2006, 2007 and 2008 may become vested in later year(s) subject to our attainment of cumulative multi-year performance goals. In addition, up to one-half of the units may vest on April 27, 2009 based upon the extent to which we attain cumulative four-year pre-established performance goals. The performance goals relating to these units are based upon the “total unit growth” of the Common Stock in relation to the top-quartile average historic “total stockholder return” of the S&P 500. In all cases, intermediate levels of vesting will occur for interim levels of performance. Vesting is also subject to the Named Executive Officer remaining continuously employed with us through the applicable vesting date. Each Named Executive Officer received the following number of performance-vesting restricted stock units (numbers reflect equitable adjustments made in connection with our spin-off of PHH Corporation): Mr. Silverman, 0; Mr. Buckman, 149,775; Mr. Nelson, 399,401; Mr. Holmes, 249,626; and Mr. Smith, 249,626. The number of units granted to each Named Executive Officer was approved by the Compensation Committee. All units are eligible to receive cash dividend equivalents, which remain restricted and subject to forfeiture until the unit for which it was paid becomes vested. The value of the shares of Common Stock underlying the units as of the date of grant are shown in the table above and reflect a per unit value of $20.03, based upon the closing price of the Common Stock on April 26, 2005. The value of the shares underlying all units held by each Named Executive Officer as of December 30, 2005 (including outstanding units granted in 2005 and prior years) reflect a per unit value of the Common Stock of $17.25 equaled: Mr. Silverman, $0; Mr. Buckman $5,231,822; Mr. Nelson, $9,625,586; Mr. Holmes, $7,870,123; and Mr. Smith, $8,002,586.
(5)	Reflects an equitable adjustment made in connection with our spin-off of PHH Corporation.

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(6)

Payments included in these amounts for fiscal year 2005 consist of (i) company matching contributions to a non-qualified deferred compensation plan that we maintain (“Defined Contribution Match”), (ii) benefits relating to supplemental life insurance and (iii) executive medical benefits. Defined Contribution Match includes matching contributions relating to deferred bonuses in respect of fiscal year 2005 and paid in the first quarter of 2006. The foregoing amounts were as follows:

										Life Insurance
						Defined				Premium/Life				Executive
						Contribution				Insurance Bonus				Medical
		Year				Match ($)				($) (*)				Benefits ($)				Totals ($)
Mr. Silverman			2005				936,996				5,656,000				7,500				6,600,496
Mr. Buckman			2005				80,100				135,328				7,500				222,928
Mr. Nelson			2005				119,850				96,233				7,500				223,583
Mr. Holmes			2005				128,850				80,128				7,500				216,478
Mr. Smith			2005				105,975				96,582				9,345				211,902

(*)

Amounts reflect benefits relating to supplemental life insurance. For Mr. Silverman, the amount represents premiums paid by us under Mr. Silverman’s insurance arrangement. For each other Named Executive Officer, amounts represent bonuses under the Executive Officer Supplemental Life Insurance Program (such bonus amounts are also reflected in the Summary Compensation Table above under the “Bonus” column). In connection with our Compensation Committee’s decision to terminate this life insurance program, we eliminated the requirement that such bonus amounts be applied to life insurance.

(7)	Mr. Nelson commenced employment with us on April 14, 2003.

Number of Securities

Value of Unexercised

Underlying Unexercised

In-the-Money

Shares

Options/SARS

Options/SARS at

Acquired on

Value

at FY-End (#) (1)

FY-End ($) (2)

Name

Exercise (#)

Realized ($)

Exercisable/Unexercisable

Exercisable/Unexercisable

Mr. Silverman

9,607,677

117,644,547

25,439,589/0

82,779,980/0

Mr. Buckman

698,397

9,372,944

3,499,277/0

11,996,721/0

Mr. Nelson

0

0

521,245/521,245

2,451,473/2,451,473

Mr. Holmes

293,821

4,662,648

3,623,054/0

14,090,247/0

Mr. Smith

5,323

76,581

3,484,579/0

17,563,686/0

(1)	Reflects an equitable adjustment made in connection with our spin-off of PHH Corporation.
(2)	Amounts are based upon a December 30, 2005 closing price per share of Common Stock on the NYSE of $17.25.

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ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

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											Of the Total
											Number of Shares
											Beneficially
			Total Amount								Owned, Shares
			of Shares				Percent of				Which may be
			Beneficially				Common Stock				Acquired Within
Name			Owned (1)				Owned (2)				60 Days (3)
Principal Stockholder:
	Barclays Global Investors, N.A. (4)			88,938,800				8.83%				88,938,800
Directors and Executive Officers (5):
	Henry R. Silverman			34,677,415				3.44%				25,439,589
	Myra J. Biblowit (6)			142,331				*				142,331
	James E. Buckman (7)			3,604,625				*				3,499,277
	Leonard S. Coleman (8)			405,930				*				405,930
	Martin L. Edelman (9)			334,341				*				331,341
	George Herrera (10)			14,477				*				14,477
	Stephen P. Holmes (11)			3,961,551				*				3,623,054
	Louise T. Blouin MacBain (12)			1,571,923				*				1,571,923
	Cheryl D. Mills (13)			141,662				*				134,948
	The Right Honourable Brian Mulroney (14)			464,145				*				455,361
	Robert E. Nederlander (15)			331,569				*				331,569
	Ronald L. Nelson (16)			969,566				*				781,867
	Robert W. Pittman (17)			902,771				*				839,943
	Pauline D. E. Richards (18)			18,099				*				18,099
	Sheli Z. Rosenberg (19)			154,473				*				123,291
	Robert F. Smith (20)			290,783				*				280,783
	Richard A. Smith (21)			3,604,052				*				3,484,579
	Executive Officers and Directors as a Group (19 persons)			51,627,066				5.13%				41,502,882

*		Amount represents less than 1% of the outstanding Common Stock.
(1)		Shares beneficially owned include direct and indirect ownership of shares, stock options and restricted stock units that are currently vested or will become vested within 60 days of February 15, 2006 (“Vested Awards”) and shares of Common Stock, the receipt of which has been deferred until retirement from the Board of Directors (“Deferred Shares”).
(2)		Based on 1,007,093,202 shares of Common Stock outstanding on February 15, 2006.
(3)		Includes Vested Awards and Deferred Shares.
(4)		Reflects beneficial ownership of 88,938,800 shares of Common Stock by Barclays Global Investors, N.A. and its affiliated entities (“Barclays”), as derived solely from information reported in a Schedule 13G under the Exchange Act filed by Barclays with the SEC on January 26, 2006. Such Schedule 13G indicates that Barclays has sole voting power over 78,108,267 of the shares and no voting power over 10,830,533 of the shares. The principal business address for Barclays Global Investors, N.A. is 45 Fremont Street, San Francisco, CA 94015. Information is based upon the assumption that Barclays holds 88,938,800 shares of Common Stock as of February 15, 2006.
(5)		Such Director’s and/or Executive Officer’s Vested Awards are deemed outstanding for purposes of computing the percentages of the class for such Director and/or Executive Officer.
(6)		Includes 27,658 Deferred Shares.
(7)		Includes 16,100 shares held in Mr. Buckman’s IRA account and 51,051 shares held in a non-qualified deferred compensation plan.
(8)		Includes 30,475 Deferred Shares.
(9)		Includes 29,022 Deferred Shares.

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(10)		Includes 14,477 Deferred Shares.
(11)		Includes 16,971 shares held by Mr. Holmes’ children, 110,000 shares held in trust and 66,973 shares held in a non-qualified deferred compensation plan.
(12)		Includes 8,188 Deferred Shares.
(13)		Includes 20,275 Deferred Shares.
(14)		Includes 27,782 Deferred Shares.
(15)		Includes 29,250 Deferred Shares
(16)		Includes 90,374 shares held in a non-qualified deferred compensation plan and 22,325 shares held in a second non-qualified deferred compensation plan.
(17)		Includes 36,583 Deferred Shares.
(18)		Includes 18,099 Deferred Shares.
(19)		Includes 20,780 Deferred Shares.
(20)		Includes 30,588 Deferred Shares.
(21)		Includes 77,600 shares held in a non-qualified deferred compensation plan and 517 shares held in a second non-qualified deferred compensation plan.

Number of Securities

Weighted-Average

Remaining Available for

Number of Securities to

Exercise Price of

Future Issuance Under

be Issued Upon Exercise

Outstanding Options,

Equity Compensation

of Outstanding Options,

Warrants and Rights

Plans (Excluding

Warrants, Rights and

(Excludes Restricted

Securities Reflected in

Plan Category

Restricted Stock Units (d)

Stock Units) ($) (e)

First Column)

Equity compensation plans approved by Company stockholders (a)

73,268,375

$19.62

48,247,471

Equity compensation plans not approved by Company stockholders (b)(e)

58,370,029

$16.84

62,618,647

Equity compensation plans assumed in mergers, acquisitions and corporate transactions (c)

3,289,791

$14.67

14,946,453

Total

134,928,195

$18.30

125,812,571

(a)

Includes options and other awards granted under the following plans: 1997 Stock Incentive Plan; 1997 Stock Option Plan; and 1987 Stock Option Plan. Each plan was approved by stockholders with respect to an initial allocation of shares. Subsequent to such approvals, our Board of Directors approved the allocation of additional treasury shares for issuance under the plans (which are included in the table) without further stockholder approval as follows: 1997 Stock

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	Incentive Plan (20,000,000); 1997 Stock Option Plan (69,970,794); 1987 Stock Option Plan (10,000,000). No additional awards will be made under the 1987 Stock Option Plan.

(b)

Includes options and other awards granted under the following plans: 1999 Broad-Based Employee Stock Option Plan; 1997 Employee Stock Plan; 1992 Employee Stock Option Plan; 1992 Bonus and Salary Replacement Stock Option Plan; and stand-alone option grants to former officers. Substantially all options remaining available for future grants are under the 1999 Broad-Based Employee Stock Option Plan. The material terms of these plans are set forth under footnote (e) below. Notwithstanding the terms of these plans to the contrary, no option granted under any of these plans provides for a term in excess of 10 years or an exercise price below fair market value as of the date of grant (other than options assumed or replaced in connection with acquisitions). All options granted under these plans have been approved by the Board of Directors or the Compensation Committee of the Board of Directors.

(c)

Includes options granted under the following plans: Galileo International, Inc. 1999 Equity and Performance Incentive Plan; Trendwest Resorts, Inc. 1997 Employee Stock Option Plan; and Orbitz, Inc. 2002 Stock Plan. We have assumed additional option plans in connection with mergers, acquisitions and corporate transactions pursuant to which no shares remain available for future grants. There were 16,955,984 outstanding options under such plans as of December 31, 2005. The weighted-average exercise price for these options is $19.94.

(d)	Reflects an equitable adjustment of stock options and restricted stock units in connection with the spin-off of PHH Corporation to our stockholders during 2005. The equitable adjustment included an increase in the number of shares, and a decrease in the exercise price, of all then outstanding options and an increase in the number of restricted stock units.

(e)	Following are the material terms of plans not submitted for stockholder approval:

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	CENDANT CORPORATION
	By:	/s/ JAMES E. BUCKMAN
		James E. Buckman
		Vice Chairman and General Counsel
		Date: March 1, 2006

Signature		Title		Date
/s/     HENRY R. SILVERMAN (Henry R. Silverman)		Chairman of the Board, Chief Executive Officer and Director		March 1, 2006
/s/     JAMES E. BUCKMAN (James E. Buckman)		Vice Chairman, General Counsel and Director		March 1, 2006
/s/     STEPHEN P. HOLMES (Stephen P. Holmes)		Vice Chairman and Director		March 1, 2006
/s/     RONALD L. NELSON (Ronald L. Nelson)		President, Chief Financial Officer and Director		March 1, 2006
/s/     VIRGINIA M. WILSON (Virginia M. Wilson)		Executive Vice President and Chief Accounting Officer		March 1, 2006
/s/     MYRA J. BIBLOWIT (Myra J. Biblowit)		Director		March 1, 2006
/s/     LEONARD S. COLEMAN, JR. (Leonard S. Coleman)		Director		March 1, 2006
/s/     MARTIN L. EDELMAN (Martin L. Edelman)		Director		March 1, 2006
/s/     GEORGE HERRERA (George Herrera)		Director		March 1, 2006

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Signature		Title		Date
/s/    LOUISE T. BLOUIN MACBAIN (Louise T. Blouin MacBain)		Director		March 1, 2006
/s/     CHERYL D. MILLS (Cheryl D. Mills)		Director		March 1, 2006
/s/     BRIAN MULRONEY (The Right Honourable Brian Mulroney)		Director		March 1, 2006
/s/     ROBERT E. NEDERLANDER (Robert E. Nederlander)		Director		March 1, 2006
/s/     ROBERT W. PITTMAN (Robert W. Pittman)		Director		March 1, 2006
/s/     PAULINE D. E. RICHARDS (Pauline D. E. Richards)		Director		March 1, 2006
/s/     SHELI Z. ROSENBERG (Sheli Z. Rosenberg)		Director		March 1, 2006
/s/     ROBERT F. SMITH (Robert F. Smith)		Director		March 1, 2006

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		Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Statements of Income for the years ended December 31, 2005, 2004 and 2003		F-3
Consolidated Balance Sheets as of December 31, 2005 and 2004		F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003		F-5
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2005, 2004 and 2003		F-7
Notes to Consolidated Financial Statements		F-9

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				Year Ended December 31,
				2005				2004				2003
Revenues
	Service fees and membership, net			$	12,865			$	11,907			$	10,774
	Vehicle-related				5,316				4,708				4,598
	Other				55				74				46
Net revenues					18,236				16,689				15,418
Expenses
	Operating				10,684				9,888				8,989
	Vehicle depreciation, lease charges and interest, net				1,547				1,232				1,311
	Marketing and reservation				1,712				1,477				1,356
	General and administrative				1,485				1,279				1,165
	Non-program related depreciation and amortization				547				483				439
	Non-program related interest, net:
		Interest expense (net of interest income of $37, $45 and $18)			189				245				298
		Early extinguishment of debt			-				18				58
	Acquisition and integration related costs:
		Amortization of pendings and listings			23				16				20
		Other			32				4				34
	Restructuring and transaction-related charges				50				-				-
	Separation costs				16				-				-
	Impairment of intangible assets				425				-				-
	Valuation charge associated with PHH spin-off				180				-				-
Total expenses					16,890				14,642				13,670
Income before income taxes and minority interest					1,346				2,047				1,748
Provision for income taxes					474				674				563
Minority interest, net of tax					3				8				21
Income from continuing operations					869				1,365				1,164
Income from discontinued operations, net of tax					27				519				301
Gain (loss) on disposals of discontinued operations, net of tax:
	PHH valuation and transaction-related charges				(312	)			-				-
	Gain on disposals				765				198				-
Income before cumulative effect of accounting changes					1,349				2,082				1,465
Cumulative effect of accounting changes, net of tax					(8	)			-				(293	)
Net income				$	1,341			$	2,082			$	1,172
Earnings per share:
	Basic
		Income from continuing operations		$	0.84			$	1.32			$	1.14
		Net income			1.29				2.02				1.15
	Diluted
		Income from continuing operations		$	0.82			$	1.28			$	1.10
		Net income			1.26				1.96				1.11

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			December 31,
			2005				2004
Assets
Current assets:
	Cash and cash equivalents		$	835			$	467
	Restricted cash			71				370
	Receivables (net of allowance for doubtful accounts of $146 and $150)			1,271				1,237
	Deferred income taxes			604				385
	Other current assets			645				611
	Assets of discontinued operations			-				6,639
Total current assets				3,426				9,709
Property and equipment, net				1,791				1,685
Deferred income taxes				649				2,192
Goodwill				12,026				11,087
Other intangibles, net				3,241				2,608
Other non-current assets				560				591
Total assets exclusive of assets under programs				21,693				27,872
Assets under management programs:
	Program cash			126				530
	Relocation-related, net			855				720
	Vehicle-related, net			8,485				7,072
	Timeshare-related, net			2,723				2,385
	Vacation rental			216				254
	Mortgage loans held for sale			-				1,981
	Mortgage servicing rights, net			-				1,608
	Other			6				148
				12,411				14,698
Total assets			$	34,104			$	42,570
Liabilities and stockholders’ equity
Current liabilities:
	Accounts payable and other current liabilities		$	4,314			$	3,851
	Current portion of long-term debt			1,021				739
	Deferred income			382				335
	Liabilities of discontinued operations			-				5,274
Total current liabilities				5,717				10,199
Long-term debt				2,915				3,591
Deferred income				279				285
Other non-current liabilities				1,292				1,261
Total liabilities exclusive of liabilities under programs				10,203				15,336
Liabilities under management programs:
	Debt			3,716				6,219
	Debt due to Cendant Rental Car Funding (AESOP) LLC—related party			6,957				5,935
	Deferred income taxes			1,723				2,200
	Other			214				185
				12,610				14,539
Commitments and contingencies (Note 17)
Stockholders’ equity:
	Preferred stock, $.01 par value—authorized 10 million shares; none issued and outstanding			-				-
	CD common stock, $.01 par value—authorized 2 billion shares; issued 1,350,852,215 and 1,333,462,545 shares			14				13
	Additional paid-in capital			12,449				12,091
	Deferred compensation			(440	)			(301	)
	Retained earnings			5,946				6,179
	Accumulated other comprehensive income			40				274
	CD treasury stock, at cost—339,246,211 and 282,135,978 shares			(6,718	)			(5,561	)
Total stockholders’ equity				11,291				12,695
Total liabilities and stockholders’ equity			$	34,104			$	42,570

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				Year Ended December 31,
				2005				2004				2003
Operating Activities
Net income				$	1,341			$	2,082			$	1,172
Adjustments to arrive at income from continuing operations					(472	)			(717	)			(8	)
Income from continuing operations					869				1,365				1,164
Adjustments to reconcile income from continuing operations to net cash provided by operating activities exclusive of management programs:
	Impairment of intangible assets				425				-				-
	Valuation charge associated with PHH spin-off				180				-				-
	Non-program related depreciation and amortization				547				483				439
	Amortization of pendings and listings				23				16				20
	Deferred income taxes				227				535				299
	Net change in assets and liabilities, excluding the impact of acquisitions and dispositions:
		Receivables			(66	)			12				2
		Income taxes			(3	)			(26	)			272
		Accounts payable and other current liabilities			194				(143	)			(167	)
		Deferred income			(10	)			18				7
	Proceeds from (payments for) termination of fair value hedges				-				(9	)			200
	Other, net				59				(17	)			307
Net cash provided by operating activities exclusive of management programs					2,445				2,234				2,543
Management programs:
	Vehicle depreciation				1,191				941				942
	Amortization and impairment of mortgage servicing rights				101				527				893
	Net gain on mortgage servicing rights and related derivatives				(83	)			(117	)			(163	)
	Origination of timeshare-related assets				(1,087	)			(1,097	)			(1,015	)
	Principal collection of investment in timeshare-related assets				651				610				799
	Origination of mortgage loans				(2,062	)			(36,518	)			(62,880	)
	Proceeds on sale of and payments from mortgage loans held for sale				2,150				37,045				64,371
	Other				8				(12	)			37
					869				1,379				2,984
Net cash provided by operating activities					3,314				3,613				5,527
Investing activities
Property and equipment additions					(540	)			(428	)			(419	)
Net assets acquired (net of cash acquired of $252, $216 and $99) and acquisition-related payments					(2,094	)			(1,710	)			(322	)
Proceeds received on asset sales					54				36				133
Proceeds from sales of available-for-sale securities					23				62				1
Proceeds from dispositions of businesses, net of transaction-related payments					2,636				832				-
Other, net					48				149				(17	)
Net cash provided by (used in) investing activities exclusive of management programs					127				(1,059	)			(624	)

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			Year Ended December 31,
			2005				2004				2003
Management programs:
	Increase in program cash			(72	)			(254	)			(102	)
	Investment in vehicles			(11,265	)			(10,373	)			(9,584	)
	Payments received on investment in vehicles			8,869				8,882				8,818
	Equity advances on homes under management			(5,072	)			(4,718	)			(5,699	)
	Repayment on advances on homes under management			4,930				4,702				5,635
	Additions to mortgage servicing rights			(23	)			(498	)			(1,008	)
	Proceeds from sales of mortgage servicing rights			-				-				10
	Cash received on derivatives related to mortgage servicing rights, net			44				142				295
	Other, net			(21	)			49				20
				(2,610	)			(2,068	)			(1,615	)
Net cash used in investing activities				(2,483	)			(3,127	)			(2,239	)
Financing activities
Proceeds from borrowings				471				51				2,588
Principal payments on borrowings				(231	)			(2,146	)			(3,469	)
Net short-term borrowing (repayments) under revolving credit agreement				(639	)			650				-
Issuances of common stock				289				1,430				446
Repurchases of common stock				(1,349	)			(1,323	)			(1,090	)
Payment of dividends				(423	)			(333	)			-
Cash reduction due to spin-off of PHH				(259	)			-				-
Other, net				9				(29	)			(79	)
Net cash used in financing activities exclusive of management programs				(2,132	)			(1,700	)			(1,604	)
Management programs:
	Proceeds from borrowings			13,013				12,506				23,826
	Principal payments on borrowings			(11,302	)			(12,127	)			(24,620	)
	Net change in short-term borrowings			51				44				(702	)
	Other, net			(23	)			(20	)			(26	)
				1,739				403				(1,522	)
Net cash used in financing activities				(393	)			(1,297	)			(3,126	)
Effect of changes in exchange rates on cash and cash equivalents				(51	)			13				(3	)
Cash provided by (used in) discontinued operations (Revised—See Note 1)
	Operating activities			199				1,778				1,599
	Investing activities			(236	)			(1,382	)			(1,085	)
	Financing activities			18				118				(9	)
	Effect of exchange rate changes			-				5				(3	)
				(19	)			519				502
Net increase (decrease) in cash and cash equivalents				368				(279	)			661
Cash and cash equivalents, beginning of period				467				746				85
Cash and cash equivalents, end of period			$	835			$	467			$	746
Supplemental Disclosure of Cash Flow Information
Interest payments			$	743			$	851			$	719
Income tax payments, net			$	250			$	164			$	(21	)

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																						Accumulated
										Additional												Other												Total
		Common Stock								Paid-In				Deferred				Retained				Comprehensive				Treasury Stock								Stockholders’
		Shares				Amount				Capital				Compensation				Earnings				Income				Shares				Amount				Equity
Balance at January 1, 2003			1,239			$	12			$	10,090			$	-			$	3,258			$	(14	)			(207	)		$	(4,031	)		$	9,315
Comprehensive income:
Net income			-				-				-				-				1,172				-				-				-
Currency translation adjustment			-				-				-				-				-				143				-				-
Unrealized gains on cash flow hedges, net of tax of $27			-				-				-				-				-				38				-				-
Unrealized gains on available-for-sale, securities, net of tax of $25			-				-				-				-				-				45				-				-
Reclassification for realized holding gains on available-for-sale securities, net of tax of $(1)			-				-				-				-				-				(3	)			-				-
Total comprehensive income																																			1,395
Issuance of CD common stock			-				-				(4	)			-				-				-				1				21				17
Net activity related to restricted stock units			-				-				88				(73	)			-				-				-				-				15
Exercise of stock options			21				-				75				-				-				-				19				359				434
Tax benefit from exercise of stock options			-				-				106				-				-				-				-				-				106
Repurchases of CD common stock			-				-				-				-				-				-				(65	)			(1,090	)			(1,090	)
Other			-				1				2				-				-				-				-				(9	)			(6	)
Balance at December 31, 2003			1,260			$	13			$	10,357			$	(73	)		$	4,430			$	209				(252	)		$	(4,750	)		$	10,186
Comprehensive income:
Net income			-				-				-				-				2,082				-				-				-
Currency translation adjustment							-				-				-				-				84				-				-
Unrealized gains on cash flow hedges, net of tax of $16			-				-				-				-				-				31				-				-
Reclassification for gains on cash flow hedges, net of tax of $(4)			-				-				-				-				-				(8	)			-				-
Unrealized losses on available-for-sale, securities, net of tax of ($2)			-				-				-				-				-				(3	)			-				-
Reclassification for realized holding gains on available-for-sale securities, net of tax of $(18)			-				-				-				-				-				(27	)			-				-
Minimum pension liability adjustment, net of tax of ($6)			-				-				-				-				-				(12	)			-				-
Total comprehensive income																																			2,147
Conversion of zero coupon senior convertible contingent notes			22				-				430				-				-				-				-				-				430
Settlement of forward purchase contracts—Upper DEC securities			38				-				863				-				-				-				-				-				863
Net activity related to restricted stock units			-				-				243				(228	)			-				-				2				29				44
Exercise of stock options			13				-				71				-				-				-				25				482				553
Tax benefit from exercise of stock options			-				-				116				-				-				-				-				-				116
Repurchases of CD common stock			-				-				-				-				-				-				(58	)			(1,323	)			(1,323	)
Payment of dividends			-				-				-				-				(333	)			-				-				-				(333	)
Other			-				-				11				-				-				-				1				1				12
Balance at December 31, 2004			1,333			$	13			$	12,091			$	(301	)		$	6,179			$	274				(282	)		$	(5,561	)		$	12,695

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																						Accumulated
										Additional												Other												Total
		Common Stock								Paid-In				Deferred				Retained				Comprehensive				Treasury Stock								Stockholders’
		Shares				Amount				Capital				Compensation				Earnings				Income				Shares				Amount				Equity
Balance at January 1, 2005			1,333			$	13			$	12,091			$	(301	)		$	6,179			$	274				(282	)		$	(5,561	)		$	12,695
Comprehensive income:
Net income			-				-				-				-				1,341				-				-				-
Currency translation adjustment, net of tax of $(20)			-				-				-				-				-				(219	)			-				-
Unrealized gains on cash flow hedges, net of tax of $26			-				-				-				-				-				39				-				-
Reclassification for gains on cash flow hedges, net of tax of $(8)			-				-				-				-				-				(11	)			-				-
Unrealized loss on available-for-sale securities, net of tax of $1			-				-				-				-				-				(2	)			-				-
Reclassification for realized holding gains on available-for-sale securities, net of tax of $(10)			-				-				-				-				-				(13	)			-				-
Minimum pension liability adjustment, net of tax of $(12)			-				-				-				-				-				(17	)			-				-
Total comprehensive income																																			1,118
Net activity related to restricted stock units			-				-				153				(139	)			-				-				3				63				77
Exercise of stock options			17				-				135				-				-				-				8				133				268
Tax benefit from exercise of stock options			-				-				79				-				-				-				-				-				79
Repurchases of CD common stock			-				-				-				-				-				-				(68	)			(1,349	)			(1,349	)
Payment of dividends			-				-				-				-				(423	)			-				-				-				(423	)
Dividend of PHH Corporation			-				-				-				-				(1,639	)			(11	)			-				-				(1,650	)
Adjustment to offset PHH valuation charge included in net income			-				-				-				-				488				-				-				-				488
Other			1				1				(9	)			-				-				-				-				(4	)			(12	)
Balance at December 31, 2005			1,351			$	14			$	12,449			$	(440	)		$	5,946			$	40				(339	)		$	(6,718	)		$	11,291

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1.	Basis of Presentation

	Cendant Corporation is a global provider of real estate and travel services. The accompanying Consolidated Financial Statements include the accounts and transactions of Cendant Corporation and its subsidiaries (“Cendant”), as well as entities in which Cendant directly or indirectly has a controlling financial interest (collectively, the “Company”). For more detailed information regarding the Company’s consolidation policy, refer to Note 2—Summary of Significant Accounting Policies.
	The Company operates in the following business segments:

	l	Real Estate Services—franchises the real estate brokerage businesses of four residential and one commercial brands, provides real estate brokerage services, facilitates employee relocations and provides home buyers with title and closing services.
	l	Hospitality Services—franchises nine lodging brands, facilitates the exchange of vacation ownership intervals and markets vacation rental properties.
	l	Timeshare Resorts—markets and sells vacation ownership interests, provides property management services to property owners’ associations, provides consumer financing to individuals purchasing vacation ownership interests and develops resort properties.
	l	Vehicle Rental—operates and franchises the Company’s car and truck rental brands.
	l	Travel Distribution Services—provides global distribution services for the travel industry, corporate and consumer online travel services and travel agency services.
	l	Mortgage Services—provided home buyers with mortgage lending services through January 31, 2005 (see Note 24— Spin-off of PHH Corporation).

	In presenting the Consolidated Financial Statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. Certain reclassifications have been made to prior year amounts to conform to the current year presentation. Additionally, in 2005, the Company has separately disclosed the operating, investing and financing portions of cash flows attributable to its discontinued operations (as described in more detail below), which in prior periods were reported on a combined basis as a single amount.
	Discontinued Operations. In June 2004, the Company completed an initial public offering of Jackson Hewitt Tax Service Inc. (“Jackson Hewitt”), an operator and franchisor of tax preparation systems and services. In January 2005, the Company completed the spin-off of its former mortgage, fleet leasing and appraisal businesses in a tax-free distribution of the common stock of PHH Corporation (“PHH”) to the Company’s stockholders. In February 2005, the Company completed an initial public offering of Wright Express Corporation, its former fuel card subsidiary, and in October 2005, the Company sold its former Marketing Services division, which was comprised of its individual membership and loyalty/insurance marketing businesses. Pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the account balances and activities of Wright Express, the former fleet leasing and appraisal businesses, Jackson Hewitt and the former Marketing Services division have been segregated and reported as discontinued operations for all periods presented. The Company’s former mortgage business cannot be classified as a discontinued operation due to the Company’s participation in a mortgage origination venture that was established with PHH in connection with the spin-off (see Note 24— Spin-off of PHH Corporation for more information on the venture). Summarized financial data for the aforementioned disposed businesses are provided in Note 3— Discontinued Operations.

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Management Programs. The Company presents separately the financial data of its management programs. These programs are distinct from the Company’s other activities since the assets are generally funded through the issuance of debt that is collateralized by such assets. Specifically, in the Company’s vehicle rental, relocation, and vacation ownership and rental businesses, assets under management programs are funded through borrowings under asset-backed funding or other similar arrangements. Additionally, during 2004, in the Company’s former mortgage services business, assets under management programs were funded through borrowings under asset-backed funding arrangements or unsecured borrowings at its former PHH subsidiary. Such borrowings are classified as debt under management programs. The income generated by these assets is used, in part, to repay the principal and interest associated with the debt. Cash inflows and outflows relating to the generation or acquisition of such assets and the principal debt repayment or financing of such assets are classified as activities of the Company’s management programs. The Company believes it is appropriate to segregate the financial data of its management programs because, ultimately, the source of repayment of such debt is the realization of such assets.

	In October 2005, the Company’s Board of Directors approved a plan to separate Cendant into four independent, publicly traded companies:

	l	Real Estate Services—will encompass the Company’s current Real Estate Services segment.
	l	Hospitality Services—will encompass the Company’s current Hospitality Services and Timeshare Resorts segments.
	l	Travel Distribution—will encompass the Company’s current Travel Distribution Services segment.
	l	Vehicle Rental—will encompass the Company’s current Vehicle Rental Services segment.

	The separation is expected to be effected through three spin-offs and is expected to be tax-free for Cendant and its shareholders. The Company expects to incur material costs in connection with executing this plan (during 2005, these costs amounted to $16 million). There can be no assurances that the plan of separation will be completed.

2.	Summary of Significant Accounting Policies

	The Company adopted Financial Accounting Standards Board (“FASB”) FASB Interpretation No. 46 (Revised 2003), “Consolidation of Variable Interest Entities” (“FIN 46”), in its entirety as of December 31, 2003.
	In connection with the implementation of FIN 46, the Company consolidated Bishop’s Gate Residential Mortgage Trust (“Bishop’s Gate”) effective July 1, 2003 through the application of the prospective transition method. Additionally, the Company deconsolidated Cendant Rental Car Funding (AESOP) LLC (“Cendant Rental Car Funding”) in connection with its adoption of FIN 46 on December 31, 2003. The consolidation of Bishop’s Gate did not result in the recognition of a cumulative effect of accounting change, nor did the deconsolidation of Cendant Rental Car Funding. See Note 15—Debt Under Management Programs and Borrowing Arrangements for more complete information regarding Bishop’s Gate and Cendant Rental Car Funding.
	Additionally, the Company consolidated TRL Group, Inc. (“TRL Group”) (formerly known as Trilegiant Corporation) effective July 1, 2003 through the application of the prospective transition method. The consolidation of TRL Group resulted in a non-cash charge of $293 million (both before and after tax) recorded on July 1, 2003 to reflect the cumulative effect of the accounting change. This non-cash charge represented the negative equity of TRL Group and is comprised of assets and liabilities of $205 million and $498 million, respectively. Since TRL Group was a component of the Company’s individual membership business, the results of operations of TRL Group from July 1, 2003 and forward are

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	reflected within discontinued operations. See Note 26—TRL Group, Inc. for more information regarding TRL Group.
	New Policy. In connection with FIN 46, when evaluating an entity for consolidation, the Company first determines whether an entity is within the scope of FIN 46 and if it is deemed to be a VIE. If the entity is considered to be a VIE, the Company determines whether it would be considered the entity’s primary beneficiary. The Company consolidates those VIEs for which it has determined that it is the primary beneficiary. Generally, the Company will consolidate an entity not deemed either a VIE or qualifying special purpose entity (“QSPE”) upon a determination that its ownership, direct or indirect, exceeds fifty percent of the outstanding voting shares of an entity and/or that it has the ability to control the financial or operating policies through its voting rights, board representation or other similar rights. For entities where the Company does not have a controlling interest (financial or operating), the investments in such entities are classified as available-for-sale securities or accounted for using the equity or cost method, as appropriate. The Company applies the equity method of accounting when it has the ability to exercise significant influence over operating and financial policies of an investee in accordance with APB Opinion No. 18, “The Equity Method of Accounting for Investments in Common Stock.”
	Previous Policy. Prior to the adoption of FIN 46, the Company did not consolidate SPE and SPE-type entities unless the Company retained both control of the assets transferred and the risks and rewards of those assets. Additionally, non-SPE-type entities were only consolidated if the Company’s ownership exceeded fifty percent of the outstanding voting shares of an entity and/or if the Company had the ability to control the financial or operating policies of an entity through its voting rights, board representation or other similar rights.

	Real Estate Franchise. The Company franchises its real estate brokerage franchise systems to the owners of independent real estate brokerage businesses. The Company provides operational and administrative services to franchisees, which are designed to increase franchisee revenue and profitability. Such services include advertising and promotions, training and volume purchasing discounts. Franchise revenue principally consists of royalty and marketing fees from the Company’s franchisees. The royalty received is primarily based on a percentage of the franchisee’s commissions and/or gross commission income. Royalty fees are accrued as the underlying franchisee revenue is earned (upon close of the home sale transaction). Annual volume incentives given to certain franchisees on royalty fees are recorded as a reduction to revenue and are accrued for in relative proportion to the recognition of the underlying gross franchise revenue. Franchise revenue also includes initial franchise fees, which are paid by new franchisees, are generally non-refundable and are recognized by the Company as revenue when all material services or conditions relating to the sale have been substantially performed (generally when a franchised unit opens for business). The Company also earns marketing fees from its franchisees and utilizes such fees to fund advertising campaigns on behalf of its franchisees. In arrangements under which the Company does not serve as an agent in coordinating advertising campaigns, marketing revenues are accrued as the revenue is earned, which occurs as related marketing expenses are incurred. The Company does not recognize revenues or expenses in connection with marketing fees it collects under arrangements in which it functions as an agent on behalf of its franchisees.
	Real Estate Brokerage. As an owner-operator of real estate brokerages, the Company assists home buyers and sellers in listing, marketing, selling and finding homes. Real estate commissions earned by the Company’s real estate brokerage business are recorded as revenue on a gross basis upon the closing of a real estate transaction (i.e., purchase or sale of a home). The commissions the Company pays to real estate agents, which approximated $3.8 billion, $3.5 billion and $2.9 billion during 2005, 2004 and 2003, respectively, are recognized concurrently with associated revenues and recorded as a component of the operating expenses line item on the Consolidated Statements of Income.

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	Relocation Services. The Company provides relocation services to corporate and government clients for the transfer of their employees. Such services include the purchasing and/or selling of a transferee’s home, providing home equity advances to transferees (generally guaranteed by the corporate client), expense processing, arranging household goods moving services, home-finding and other related services. The Company earns revenues from fees charged to clients for the performance and/or facilitation of these services and recognizes such revenue on a net basis as services are provided, except for instances in which the Company assumes the risk of loss on the sale of a transferring employee’s home. In such cases, revenues are recorded on a gross basis as earned with associated costs recorded within operating expenses. In the majority of relocation transactions, the gain or loss on the sale of a transferee’s home is borne by the client; however, as discussed above, in certain instances the Company will assume the risk of loss. When the risk of loss is assumed, the Company records the value of the home on its Consolidated Balance Sheets within the relocation-related assets, net line item. The difference between the actual purchase price and proceeds received on the sale of the home are recorded within the operating expenses line item on the Company’s Consolidated Statements of Income. The aggregate selling prices of such homes was $694 million, $651 million and $553 million for 2005, 2004 and 2003, respectively.
	Additionally, the Company earns interest income on the funds it advances to the transferring employee, which is recorded as earned until the point of repayment by the client. The Company also earns revenue from real estate brokers and other third-party service providers. The Company recognizes such fees from real estate brokers at the time its obligations are complete. For services where the Company pays a third-party provider on behalf of its clients, the Company generally earns a referral fee or commission, which is recognized at the time of completion of services.
	Title and Settlement Services. The Company provides title and closing services, which include title search procedures for title insurance policies, home sale escrow and other closing services. Title revenues, which are recorded net of fees paid to third party insurance underwriters and title and closing service fees, are recorded at the time a home sale transaction or refinancing closes.

	Lodging Franchise. The Company enters into agreements to franchise its nine lodging franchise systems to independent hotel owners. These agreements typically have an initial term of fifteen or twenty years (depending on brand, generally twenty years for new construction and fifteen years for conversions) with provisions permitting franchisees to terminate after five, ten, or fifteen years under certain circumstances. Lodging revenue, recorded as a component of service fees and membership, net on the Consolidated Statements of Income, principally consists of royalty fees, as well as marketing and reservation fees, which are typically based on a percentage of gross room revenues of each franchisee. Royalty fees are accrued as the underlying franchisee revenues are earned from the franchisees. An estimate of uncollectible royalty fees is charged to bad debt expense and included in operating expenses in the accompanying Consolidated Statements of Income. Lodging revenue also includes initial franchise fees, which are recognized as revenue when all material services or conditions relating to the revenue have been substantially performed (generally when a franchised unit opens for business).
	The Company provides operational and administrative services to franchisees, which include access to international reservation systems, national advertising and promotional campaigns, co-marketing programs, referrals, training and volume purchasing discounts. The Company is contractually obligated to expend the marketing and reservation fees it collects from franchisees in accordance with the franchise agreements; as such, revenues earned in excess of costs incurred are accrued as a liability for future marketing or reservation costs. Costs incurred in excess of revenues are expensed as incurred. In accordance with the Company’s franchise agreements, the Company includes an allocation of certain overhead costs required to carry out marketing and reservation activities within marketing and reservation expenses. The Company records marketing and reservation revenues and expenses on a gross basis.

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	The Company also provides property management services for selected hotels under long-term contracts. Management fees are comprised of a base fee, which is generally a percentage of hotel revenue, and an incentive fee, which is generally based on the hotel’s profitability. Management fee revenue is recognized when earned in accordance with the terms of the contract and is recorded as a component of service fees and membership, net on the Consolidated Statements of Income.
	Vacation Exchange. As a provider of vacation exchange services, the Company enters into affiliation agreements with resort property owners/developers to allow owners of vacation ownership interests to trade their interests with other subscribers. Vacation exchange revenue principally consists of exchange fees and subscription revenue. Exchange fees are recognized as revenue when the exchange request has been confirmed to the subscribing members. Subscription revenue represents the fees from subscribing members. The Company records subscription revenue as deferred income on its Consolidated Balance Sheets and recognizes it on a straight-line basis over the subscription period during which delivery of publications and other services are provided to the subscribing members. Marketing and advertising costs are generally expensed as incurred; commissions paid on subscriptions are deferred and amortized over the life of the subscription.
	Vacation Rental. The Company earns commissions from the rental of holiday accommodations to consumers on behalf of third party property owners. Commission revenue is generally recognized in the period that the rental reservation is made, net of expected cancellations. The Company also earns rental fees in connection with properties it owns or leases under capital leases. Rental revenue is recognized when the customers’ stay occurs.

	The Company sells and markets vacation ownership interests (“VOIs”) and provides consumer financing to individuals purchasing VOIs. VOIs sold by the Company consist of either undivided fee simple interests or point-based vacation credits. The Company recognizes sales of VOIs on a full accrual basis for fully constructed inventory after a binding sales contract has been executed, a 10% minimum down payment has been received, the statutory rescission period has expired and receivables are deemed collectible. During periods of construction, subsequent to the preliminary construction phase and upon assurance that the property will not revert to a rental property, the Company recognizes revenues using the percentage-of-completion method of accounting. For percentage-of-completion accounting, the preliminary stage is deemed to be complete when the engineering and design work is complete, the construction contracts have been executed, the site has been cleared, prepared and excavated and the building foundation is complete. The completion percentage is determined by the proportion of real estate inventory and certain sales and marketing costs incurred to total estimated costs. These estimated costs are based upon historical experience and the related contractual terms. The remaining revenue and related costs of sales, including commissions and direct expenses, are deferred and recognized as the remaining costs are incurred. Commissions and other direct costs related to the sale are deferred until the sale is recorded. If a contract is cancelled before qualifying as a sale, non-recoverable expenses and deposits forfeited are charged and credited, respectively, to operating expense in the current period on the Consolidated Statements of Income.
	The Company offers consumer financing as an option to customers purchasing VOIs. Generally, the financing terms are for seven to ten years. An estimate of uncollectible amounts is recorded based on factors including economic conditions, defaults, past due aging and historical write-offs of contract receivables. The balance of the allowance for uncollectible accounts was $137 million and $119 million at December 31, 2005 and 2004, respectively. The interest income earned from the financing arrangements is earned on the principal balance outstanding over the life of the arrangement.

	The Company operates and franchises the Avis and Budget rental systems, providing vehicle rentals to business and leisure travelers. Revenue from vehicle rentals is recognized over the period the vehicle is rented. Franchise revenue principally consists of royalties received from the

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	Company’s franchisees in conjunction with vehicle rental transactions. Royalties are accrued as the underlying franchisee revenue is earned (generally over the rental period of a vehicle). Revenue from the sale of gasoline is recognized over the period the vehicle is rented and is based on the volume of gasoline consumed during the rental period or a contracted fee paid by the customer at the time the vehicle rental agreement is executed. The Company is reimbursed by its customers for certain operating expenses it incurs, including gasoline and vehicle licensing fees, as well as airport concession fees, which the Company pays in exchange for the right to operate at airports and other locations. Revenues and expenses associated with gasoline, vehicle licensing and airport concessions are recorded on a gross basis within revenue and operating expenses on the accompanying Consolidated Statements of Income. During 2005, the Company made a reclassification to reflect an immaterial correction to prior year vehicle-related revenues and operating expenses to conform to the current year gross reporting presentation for vehicle licensing and airport concession fees, which resulted in additional vehicle-related revenues and operating expenses of $285 million and $259 million in 2004 and 2003, respectively. Such amounts had been previously presented on a net basis. This correction had no effect on previously reported pretax income.
	Vehicles are stated at cost, net of accumulated depreciation. The initial cost of the vehicles is net of incentives and allowances from vehicle manufacturers. The Company acquires the majority of its rental vehicles pursuant to repurchase programs established by automobile manufacturers. Under these programs, the manufacturers agree to repurchase vehicles at a specified price and date, subject to certain eligibility criteria (such as car condition and mileage requirements). The Company depreciates vehicles such that the net book value of the vehicles on the date of return to the manufacturers is intended to equal the contractual guaranteed residual values, thereby minimizing any gain or loss on the sale of the vehicles. The Company records depreciation expense for any expected deficiency in the contracted guaranteed residual values due to excessive wear or damages. At December 31, 2005, the Company estimates that the difference between the contracted guaranteed residual value and the carrying value of these vehicles was $76 million, which has already been reflected in the Company’s Consolidated Income Statement.
	Rental vehicles are depreciated on a straight-line basis giving consideration to the contractual guaranteed residual values and the number of months between the original purchase date of the vehicle and the expected sale date of the vehicle back to the manufacturers. For 2005, 2004 and 2003, rental vehicles were depreciated at rates ranging from 7% to 28% per annum. As market conditions change, the Company adjusts its depreciation. Upon disposal of the vehicles, depreciation expense is also adjusted for any difference between the net proceeds from the sale and the remaining book value.

	The Company’s Galileo and supplier services businesses provide global distribution and computer reservation services and travel marketing information to airline, car rental and hotel clients. Specifically, these businesses provide scheduling and ticketing services and fare and other information to travel agencies, Internet travel sites, corporations and individuals to assist them with the placement of airline, car rental and hotel reservations. Such services are provided through the use of a computerized reservation system. Further, the Company provides hotels, car rental companies and tour/leisure travel operators, including Internet travel companies, with access to reservation systems and processing. Revenues generated from fees charged to airline, car rental, hotel and other travel suppliers for bookings made through the Company’s computerized reservation system are recognized at the time the reservation is made for air bookings, at the time of pick-up for car bookings and at the time of check-out, net of cancellation reserves, for hotel bookings. Revenues generated from leased equipment charges to system subscribers are recognized over the term of the contract at stipulated rates.
	The Company’s online and traditional travel agency businesses provide hotel rooms, destination services and travel packages to consumers and travel agencies. For certain services, the Company contracts in

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advance with travel suppliers, principally hotels and other lodging properties, for an allotment of inventory at negotiated discount prices. The Company has certain latitude in establishing the prices charged to consumers and travel distributors, but does not typically assume inventory risk. The Company collects the full cost of the travel product prior to the time of travel and records the revenue on a net basis when the customers’ travel occurs or the flight departs. For other services, the Company earns commissions and fees on the sale of airline tickets, hotel rooms and car rentals to consumers and travel agencies. The associated revenues are recognized as the commissions and fees are earned, which occurs at booking for airline tickets, when the customers’ stay occurs for hotel rooms and upon pick-up for car rentals.

	Mortgage services included the origination (funding either a purchase or refinancing), sale and servicing of residential mortgage loans. Mortgage loans were originated through a variety of marketing techniques, including relationships with corporations, affinity groups, financial institutions and real estate brokerage firms. The Company also purchased mortgage loans originated by third parties. Upon the closing of a residential mortgage loan originated or purchased by the Company, the mortgage loan was typically warehoused for a period up to 60 days and then sold into the secondary market (which is customary in the mortgage industry). Mortgage loans held for sale as of December 31, 2004 represented those mortgage loans originated or purchased by the Company, which were pending sale to permanent investors. The Company primarily sold its mortgage loans to government-sponsored entities. Upon sale, the servicing rights and obligations of the underlying mortgage loans were generally retained by the Company. A mortgage servicing right (“MSR”) is the right to receive a portion of the interest coupon and fees collected from the mortgagor for performing specified mortgage servicing activities, which consisted of collecting loan payments, remitting principal and interest payments to investors, holding escrow funds for payment of mortgage-related expenses such as taxes and insurance, and otherwise administering the Company’s mortgage loan servicing portfolio.
	Loan origination and commitment fees paid by the borrower in connection with the origination of mortgage loans and certain direct loan origination costs were deferred until such loans are sold to investors. Mortgage loans pending sale were recorded on the Company’s Consolidated Balance Sheets at the lower of cost or market value on an aggregate basis. Sales of mortgage loans were generally recorded on the date a loan was delivered to an investor. Gains or losses on sales of mortgage loans were recognized based upon the difference between the selling price and the allocated carrying value of the related mortgage loans sold. The capitalization of the MSRs also occurred upon sale of the underlying mortgages into the secondary market. Upon initial recording of the MSR asset, the total cost of loans originated or acquired was allocated between the MSR asset and the mortgage loan without the servicing rights based on relative fair values. Servicing revenues comprised several components, including recurring servicing fees, ancillary income and the amortization of the MSR asset. Recurring servicing fees were recognized upon receipt of the coupon payment from the borrower and recorded net of guaranty fees. Costs associated with loan servicing were charged to expense as incurred. The MSR asset was amortized over the estimated life of the related loan portfolio in proportion to projected net servicing revenues. Such amortization was recorded as a reduction of net servicing revenue in the Consolidated Statements of Income.
	The MSR asset was routinely evaluated for impairment, but at least on a quarterly basis. For purposes of performing its impairment evaluation, the Company stratified its portfolio on the basis of product type and interest rates of the underlying mortgage loans. The Company measured impairment for each stratum by comparing estimated fair value to the carrying amount. Fair value was estimated based upon an internal valuation that reflects management’s estimates of expected future cash flows considering prepayment estimates (developed using a third party model described below), the Company’s historical prepayment rates, portfolio characteristics, interest rates based on interest rate yield curves, implied volatility and other economic factors. The Company used a third party model to forecast prepayment rates used in the development of its expected future cash flows. The prepayment forecast was based on historical observations of prepayment behavior in similar periods comparing current mortgage interest rates to the mortgage interest

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rates in the Company’s servicing portfolio and incorporates loan characteristics (e.g., loan type and note rate) and factors such as then-recent prepayment experience, previous refinance opportunities and estimated levels of home equity. Temporary impairment was recorded through a valuation allowance in the period of occurrence as a reduction of net revenue in the Consolidated Statements of Income. The Company periodically evaluated the MSR asset to determine if the carrying value before the application of the valuation allowance is recoverable. When the Company determined that a portion of the asset was not recoverable, the asset and the previously designated valuation allowance were reduced to reflect the write-down.

	Advertising costs are generally expensed in the period incurred. Advertising expenses, recorded within marketing and reservation expenses on the Company’s Consolidated Statements of Income, were approximately $1.7 billion, $1.2 billion and $1.1 billion in 2005, 2004 and 2003, respectively.

The Company’s provision for income taxes is determined using the asset and liability method, under which deferred tax assets and liabilities are calculated based upon the temporary differences between the financial statement and income tax bases of assets and liabilities using currently enacted tax rates. The Company’s deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to the Company’s provision for income taxes while increases to the valuation allowance result in additional provision. However, if the valuation allowance is adjusted in connection with an acquisition, such adjustment is recorded through goodwill rather than the provision for income taxes. The realization of the Company’s deferred tax assets, net of the valuation allowance, is primarily dependent on estimated future taxable income. A change in the Company’s estimate of future taxable income may require an addition or reduction to the valuation allowance.

	The Company considers highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

The Company is required to set aside cash primarily in relation to agreements entered into by its timeshare resort, car rental and relocation businesses. Restricted cash amounts are classified as current assets and include (i) cash receipts held in escrow related to timeshare purchases or rental deposits, (ii) insurance claim payments related to the car rental business and (iii) cash held to maintain insurance reserve ratios in our relocation business. In 2004, the Company’s restricted cash amounts also include (i) fees collected and held for pending mortgage closings in the Company’s former mortgage business and (ii) accounts held for the capital fund requirements of and potential claims related to mortgage reinsurance agreements in the Company’s former mortgage business.

	The Company uses derivative instruments as part of its overall strategy to manage its exposure to market risks associated with fluctuations in foreign currency exchange rates and interest rates. As a matter of policy, the Company does not use derivatives for trading or speculative purposes.
	All derivatives are recorded at fair value either as assets or liabilities. Changes in fair value of derivatives not designated as hedging instruments and of derivatives designated as fair value hedging instruments are recognized currently in earnings and included either as a component of net revenues or net non-program related interest expense, based upon the nature of the hedged item, in the Consolidated Statements of Income. Changes in fair value of the hedged item in a fair value hedge are recorded as an adjustment to the carrying amount of the hedged item and recognized currently in earnings as a component of net

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revenues or net non-program interest expense, based upon the nature of the hedged item, in the Consolidated Statements of Income. The effective portion of changes in fair value of derivatives designated as cash flow hedging instruments is recorded as a component of other comprehensive income. The ineffective portion is reported currently in earnings as a component of net revenues or net non-program related interest expense, based upon the nature of the hedged item. Amounts included in other comprehensive income are reclassified into earnings in the same period during which the hedged item affects earnings.

	The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determination at each balance sheet date. The Company’s non-marketable preferred stock investments are accounted for at cost. Common stock investments in affiliates over which the Company has the ability to exercise significant influence but not a controlling interest are carried on the equity method of accounting. Available-for-sale securities are carried at current fair value with unrealized gains or losses reported net of taxes as a separate component of stockholders’ equity. Trading securities are recorded at fair value with realized and unrealized gains and losses reported currently in earnings.
	All of the Company’s short-term investments are included in other current assets on the Company’s Consolidated Balance Sheets and all long-term investments are included in other non-current assets (with the exception of retained interests in securitizations, which are included in assets under management programs). All realized gains and losses and preferred dividend income are recorded within other revenues in the Consolidated Statements of Income. Gains and losses on securities sold are based on the specific identification method. Declines in market value that are judged to be “other than temporary” are recorded as a component of impairment of investments in the Consolidated Statements of Income.
	The following table summarizes the Company’s investment portfolio:

			As of December 31,
			2005				2004
Retained Interests from Securitizations:
	Trading—retained interest in securitized timeshare receivables		$	13			$	40
	Available for sale—mortgage backed securities			-				47
Affinion Group Holdings, Inc.				86				-
Homestore, Inc.				-				22
Equity method investments				67				29
Other				7				9
			$	173			$	147

Retained Interests from Securitizations. The retained interests from the Company’s securitizations of timeshare receivables are classified as trading securities and recorded within timeshare-related assets under management programs on the Company’s Consolidated Balance Sheets. The retained interests from the Company’s securitizations of residential mortgage loans, with the exception of mortgage servicing rights (the accounting for which is described above under “Revenue Recognition—Mortgage Services”), were classified as available-for-sale mortgage-backed securities and recorded as a component of other assets under management programs within the Company’s Consolidated Balance Sheet. Gains or losses relating to the assets securitized are allocated between such assets and the retained interests based on their relative fair values on the date of sale. The Company estimates fair value of retained interests based upon the present value of expected future cash flows, which is subject to the prepayment risks, expected credit losses and interest rate risks of the sold financial assets. See Note 16—Securitizations of Timeshare and Relocation Receivables for more information regarding these retained interests.

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	Affinion Group Holdings, Inc. The Company’s investment in Affinion Group Holdings, Inc. (“Affinion”) was received in connection with the October 2005 sale of its former Marketing Services division, along with cash proceeds approximating $1.7 billion. This investment represents preferred stock with a carrying value of $83 million (face value of $125 million) and warrants with a carrying value of $3 million that are exercisable into 7.5% of the common equity of Affinion upon the earlier of four years or the achievement of specified investment hurdles.
	Homestore, Inc. The Company’s investment in Homestore, Inc. (“Homestore”) was received in exchange for the February 2001 sale of its former move.com and ancillary businesses. During 2005 and 2004, the Company sold 7.3 million and 9.8 million, respectively, shares of Homestore and recognized gains of $18 million and $40 million, respectively, within net revenues on its Consolidated Statements of Income. As of December 31, 2005, the Company had sold all of its shares of Homestore stock.

	Property and equipment (including leasehold improvements) are recorded at cost, net of accumulated depreciation and amortization. Depreciation, recorded as a component of non-program related depreciation and amortization in the Consolidated Statements of Income, is computed utilizing the straight-line method over the estimated useful lives of the related assets. Amortization of leasehold improvements, also recorded as a component of non-program related depreciation and amortization, is computed utilizing the straight-line method over the estimated benefit period of the related assets, which may not exceed 20 years, or the lease term, if shorter. Useful lives are generally 30 years for buildings, from three to eight years for capitalized software and from three to seven years for furniture, fixtures and equipment.
	On March 30, 2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations” (“FIN 47”), which clarifies that conditional asset retirement obligations are within the scope of SFAS No. 143, “Accounting for Asset Retirement Obligations.” FIN 47 requires the Company to recognize a liability for the fair value of conditional asset retirement obligations if the fair value of the liability can be reasonably estimated. The Company adopted the provisions of FIN 47 in fourth quarter 2005, as required. Accordingly, the Company recorded a $14 million ($8 million after tax, or $0.01 per diluted share) non-cash charge to reflect the cumulative effect of accounting change during 2005 relating to the Company’s obligation to remove assets at certain leased properties.

	In connection with SFAS No. 142, “Goodwill and Other Intangible Assets,” the Company is required to assess goodwill and other indefinite-lived intangible assets for impairment annually, or more frequently if circumstances indicate impairment may have occurred. The Company assesses goodwill for such impairment by comparing the carrying value of its reporting units to their fair values. The Company’s Real Estate Services segment has four reporting units, the Company’s Hospitality Services, Vehicle Rental and Travel Distribution Services segments each have three reporting units and the Company’s Timeshare Resorts segment has one reporting unit. The Company determines the fair value of its reporting units utilizing discounted cash flows and incorporates assumptions that it believes marketplace participants would utilize. When available and as appropriate, the Company uses comparative market multiples and other factors to corroborate the discounted cash flow results. Other indefinite-lived intangible assets are tested for impairment and written down to fair value, as required by SFAS No. 142.
	The Company evaluates the recoverability of its other long-lived assets, including amortizing intangible assets, if circumstances indicate an impairment may have occurred pursuant to SFAS No. 144. This analysis is performed by comparing the respective carrying values of the assets to the current and expected future cash flows, on an undiscounted basis, to be generated from such assets. Property and equipment is evaluated separately within each business. If such analysis indicates that the carrying value of these assets is not recoverable, the carrying value of such assets is reduced to fair value through a charge to the Company’s Consolidated Statements of Income.

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	The Company performs its annual impairment testing in the fourth quarter of each year subsequent to completing its annual forecasting process. In performing this test, the Company determines fair value using the present value of expected future cash flows. As a result of the analysis performed in 2005, the Company determined that the carrying values of goodwill and certain other indefinite-lived intangible assets assigned to its consumer travel businesses exceeded their estimated fair values. Consequently, the Company also tested its other long-lived assets within the consumer travel business for impairment. In connection with the impairment assessments performed, the Company recorded a pretax charge of $425 million, of which $254 million reduced the value of goodwill and $171 million reduced the value of other intangibles assets (including $120 million related to trademarks), within the Travel Distribution segment. This impairment resulted from a decline in future anticipated cash flows primarily generated by its consumer travel businesses.
	Apart from this impairment, there were no other impairments relating to intangible assets during 2005. Further, there was no impairment of intangible assets in 2004 or 2003. Impairment charges recorded for other long-lived assets were not material during 2005, 2004 and 2003.

	Program cash primarily relates to amounts specifically designated to purchase assets under management programs and/or to repay the related debt. Program cash also includes amounts set aside for the collateralization requirements of outstanding debt for the Company’s timeshare businesses.

	The Consolidated Balance Sheets include approximately $422 million and $411 million of liabilities with respect to self-insured public liability and property damage as of December 31, 2005 and 2004, respectively. The current portion of such amounts is included within accounts payable and other current liabilities and the non-current portion is included in other non-current liabilities. The Company estimates the required liability of such claims on an undiscounted basis utilizing an actuarial method that is based upon various assumptions which include, but are not limited to, the Company’s historical loss experience and projected loss development factors. The required liability is also subject to adjustment in the future based upon the changes in claims experience, including changes in the number of incidents (frequency) and change in the ultimate cost per incident (severity).
	In addition, at December 31, 2005 and 2004, the Consolidated Balance Sheets include liabilities of approximately $183 million and $195 million, respectively, relating to health and welfare, workers’ compensation and other benefits the Company provides to its employees. The Company estimates the liability required for such benefits based on actual claims outstanding and the estimated cost of claims incurred as of the balance sheet date. These amounts are included within accounts payable and other current liabilities on the Company’s Consolidated Balance Sheets.

	Timeshare Transactions. In December 2004, the FASB issued SFAS No. 152, “Accounting for Real Estate Time-Sharing Transactions,” in connection with the previous issuance of the American Institute of Certified Public Accountants’ Statement of Position No. 04-2, “Accounting for Real Estate Time-Sharing Transactions” (“SOP 04-2”). The Company will adopt the provisions of SFAS No. 152 and SOP 04-2 effective January 1, 2006, as required, and anticipates recording an after tax charge in the range of $50 million to $80 million on such date as a cumulative effect of an accounting change. There is no expected impact to cash flows from the adoption.
	Stock-Based Compensation. In December 2004, the FASB issued SFAS No. 123R, “Share Based Payment,” which eliminates the alternative to measure stock-based compensation awards using the intrinsic value approach permitted by APB Opinion No. 25 and by SFAS No. 123, “Accounting for Stock-Based Compensation.” The Company will adopt SFAS No. 123R on January 1, 2006, as required by the Securities and Exchange Commission. Although the Company has not yet completed its assessment of adopting SFAS No. 123R, it does not believe that such adoption will significantly affect

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	its earnings, financial position or cash flows since the Company does not use the alternative intrinsic value approach.

	Summarized statement of income data for discontinued operations is as follows:

	(*)	Results are through the dates of disposition.

	(a)	The provision for income taxes reflects a $24 million charge associated with separating the appraisal business from the Company in connection with the PHH spin-off.

	Wright Express. On February 22, 2005, the Company completed the initial public offering of Wright Express for $964 million of cash. Additionally, the Company entered into a tax receivable agreement with Wright Express pursuant to which Wright Express is obligated to make payments to the Company over a 15 year term. The Company currently expects such payments to aggregate over $400 million pretax. During 2005, the Company received $15 million in connection with this tax receivable agreement, which is recorded within the gain on disposal line item. The actual amount and timing of receipt of such payments are dependent upon a number of factors, including whether Wright Express earns sufficient future taxable income to realize the full tax benefit of the amortization of certain assets.
	Fleet and Appraisal Businesses. On January 31, 2005, the Company completed the spin-off of its former mortgage, fleet leasing and appraisal businesses. In connection with the spin-off, the Company recorded a non-cash impairment charge of $488 million and transaction costs of $7 million during first quarter 2005. Of these costs, $308 million and $4 million, respectively, were allocated to the fleet leasing and appraisal businesses and, therefore, recorded within discontinued operations. As previously stated, the charges allocated to the mortgage business are not classified as discontinued operations. There were no tax benefits recorded in connection with these charges as such charges are not tax deductible.
	Marketing Services Division. On October 17, 2005, the Company completed the sale of its Marketing Services division for approximately $1.8 billion. The purchase price consisted of approximately $1.7 billion of cash, net of closing adjustments, plus $125 million face value of newly issued preferred stock of Affinion and warrants to purchase up to 7.5% of the common equity of Affinion (see Note 2—Summary of Significant Accounting Policies for more detailed information on the preferred stock and warrants).

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	(a)	The provision for income taxes reflects the reversal of a valuation allowance of $121 million by TRL Group associated with federal and state deferred tax assets, partially offset by a $13 million cash payment the Company made to TRL Group in connection with the January 2004 transaction for the contract termination (see Note 26 — TRL Group, Inc).

	(b)	Results are through the date of disposition.

	Jackson Hewitt. On June 25, 2004, the Company completed the initial public offering of Jackson Hewitt. In connection with the initial public offering, the Company received $772 million in cash.

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	Summarized balance sheet data for discontinued operations is as follows:

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	The following table sets forth the computation of basic and diluted earnings per share (“EPS”):

	(a)	Excludes restricted stock units for which performance based vesting criteria have not been achieved.

	(b)	The 2004 balance reflects the dilutive impact of the Company’s zero coupon senior convertible contingent notes prior to conversion on February 13, 2004 into shares of Cendant common stock, the impact of which is reflected within basic weighted average shares outstanding from the conversion date forward (20 million shares in 2004). The 2003 balance reflects the entire dilutive impact of these notes.

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	The following table summarizes the Company’s outstanding common stock equivalents that were antidilutive and therefore excluded from the computation of diluted EPS:

	(a)	The increase in the number of antidilutive options for 2005 represents approximately 15 million options that became “out-of-the-money” between $20.44 (the average stock price for 2005) and $21.82 (the average stock price for 2004). The weighted average exercise price for antidilutive options at December 31, 2005, 2004 and 2003 was $25.89, $29.76 and $21.65, respectively.

	(b)	The weighted average exercise price for antidilutive warrants at December 31, 2005 and 2003 was $21.31.

	(c)	Represents the shares that were issuable under the forward purchase contract component of the Company’s Upper DECS securities prior to the settlement of such securities on August 17, 2004, at which time the Company issued 38 million shares of Cendant common stock. The impact of this share issuance is included in basic EPS from the settlement date forward (14 million shares in 2004, due to a partial year impact). However, diluted EPS does not reflect any shares that were issuable prior to August 17, 2004, as the Upper DECS were antidilutive during such periods (since the appreciation price of $28.42 was greater than the average price of Cendant common stock).

Assets acquired and liabilities assumed in business combinations were recorded on the Company’s Consolidated Balance Sheets as of the respective acquisition dates based upon their estimated fair values at such dates. The results of operations of businesses acquired by the Company have been included in the Company’s Consolidated Statements of Income since their respective dates of acquisition. The excess of the purchase price over the estimated fair values of the underlying assets acquired and liabilities assumed was allocated to goodwill. In certain circumstances, the allocations of the excess purchase price are based upon preliminary estimates and assumptions. Accordingly, the allocations may be subject to revision when the Company receives final information, including appraisals and other analyses. Any revisions to the fair values, which may be significant, will be recorded by the Company as further adjustments to the purchase price allocations. The Company is also in the process of integrating the operations of its acquired businesses and expects to incur costs relating to such integrations. These costs may result from integrating operating systems, relocating employees, closing facilities, reducing duplicative efforts and exiting and consolidating other activities. These costs will be recorded on the Company’s Consolidated Balance Sheets as adjustments to the purchase price or on the Company’s Consolidated Statements of Income as expenses, as appropriate.

	Wyndham Worldwide. On October 11, 2005, the Company acquired the management and franchise business of the Wyndham hotel chain for $111 million in cash. The acquisition includes franchise agreements, management contracts and the Wyndham brand, which will be used both in the Company’s lodging and timeshare businesses. This acquisition resulted in goodwill (based on the preliminary purchase price) of $20 million, all of which is expected to be deductible for tax purposes. Such goodwill was assigned to the Company’s Hospitality Services segment. This acquisition also resulted in $85 million of other intangible assets. Management believes that this acquisition adds an upscale brand to the Company’s lodging portfolio and also represents the Company’s entry into managing hotels in addition to its lodging franchise business.
	Gullivers Travel Associates. On April 1, 2005, the Company completed the acquisition of Donvand Limited, which operates under the name of Gullivers Travel Associates, and Octopus Travel Group Limited (collectively, “Gullivers”). Gullivers is a wholesaler of hotel rooms, destination services, travel packages and group tours and a global online provider of lodging and destination services. Management

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	believes that this acquisition positions the Company as a worldwide leader in the global online travel intermediary space. The preliminary allocation of the purchase price is summarized as follows:

	The fair value adjustments included in the preliminary allocation of the purchase price above primarily consisted of:

	(a)	Represents (i) $109 million of indefinite-lived trademarks associated with the Company’s exclusive right to use the Gullivers name, (ii) $342 million of customer relationships with an estimated weighted average life of 14 years and (iii) $33 million of other intangible assets with an estimated weighted average life of 20 years.

	(b)	As part of the acquisition, the Company’s management formally committed to various strategic initiatives primarily aimed at creating synergies between the cost structures of the Company and Gullivers, which were expected to be achieved through the involuntary termination of certain Gullivers employees. The Company formally communicated the termination of employment to approximately 14 employees, principally representing certain members of Gullivers’ senior management, and as of December 31, 2005, all of these employees had been terminated. As a result of these actions, the Company established personnel-related liabilities of $4 million. As of December 31, 2005, all of the personnel-related liabilities had been paid.

	The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed in connection with the Company’s acquisition of Gullivers:

	The goodwill, none of which is expected to be deductible for tax purposes, was assigned to the Company’s Travel Distribution Services segment. This acquisition was not significant to the Company’s results of operations, financial position or cash flows.

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ebookers plc. On February 28, 2005, the Company acquired ebookers plc (“ebookers”), a travel agency with Web sites servicing 14 European countries offering a wide range of discount and standard price travel products including airfares, hotels, car rentals, cruises and travel insurance. Management believes that this acquisition enhances the Company’s role in the global online travel intermediary space. The preliminary allocation of the purchase price is summarized as follows:

	The fair value adjustments included in the preliminary allocation of the purchase price above primarily consisted of:

	(a)	Represents (i) $135 million of indefinite-lived trademarks associated with the Company’s exclusive right to use the ebookers names, (ii) $41 million of customer relationships with an estimated weighted average life of five years and (iii) $11 million of other intangible assets with an estimated weighted average life of 10 years.

	(b)	As part of the acquisition, the Company’s management formally committed to various strategic initiatives primarily aimed at creating synergies between the cost structures of the Company and ebookers, which were expected to be achieved through the involuntary termination of certain ebookers employees and the termination of certain lease obligations. The Company formally communicated the termination of employment to approximately 110 employees, representing a wide range of employee groups, and as of December 31, 2005, substantially all of these employees had been terminated. As a result of these actions, the Company established personnel-related and facility-related liabilities of $6 million and $4 million, respectively. As of December 31, 2005, cash payments of $6 million were made to reduce the personnel-related liability. Accordingly, as of December 31, 2005, substantially all of the personnel-related liability costs had been paid. Additionally, during 2005, other adjustments of $1 million were made to reduce the facility-related liability. Accordingly, the remaining balance for the facility-related liability as of December 31, 2005 was $3 million. The Company anticipates the remainder of the lease termination costs will be paid by 2009.

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	The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed in connection with the Company’s acquisition of ebookers:

	The goodwill, all of which is expected to be deductible for tax purposes, was assigned to the Company’s Travel Distribution Services segment. This acquisition was not significant to the Company’s results of operations, financial position or cash flows.
	Other. During 2005, the Company also acquired 32 real estate brokerage operations through its wholly-owned subsidiary, NRT Incorporated (“NRT”), for $237 million of cash, in the aggregate, which resulted in goodwill (based on the preliminary allocation of the purchase price) of $206 million that was assigned to the Company’s Real Estate Services segment, of which $142 million is expected to be deductible for tax purposes. These acquisitions also resulted in $26 million of other intangible assets. The acquisition of real estate brokerages by NRT is a core part of its growth strategy. In addition, the Company acquired 34 other individually non-significant businesses during 2005 for aggregate consideration of $206 million in cash, which resulted in goodwill (based on the preliminary allocation of the purchase price) of $37 million, of which $7 million is expected to be deductible for tax purposes. The goodwill was assigned to the Company’s Timeshare Resorts ($17 million), Travel Distribution Services ($8 million), Vehicle Rental ($6 million), Hospitality Services ($4 million) and Real Estate Services ($2 million) segments. These acquisitions also resulted in $98 million of other intangible assets. These acquisitions were not significant to the Company’s results of operations, financial position or cash flows.

	Orbitz, Inc. On November 12, 2004, the Company acquired Orbitz, Inc. (“Orbitz”), an online travel company. Management believes that the addition of Orbitz to the Company’s portfolio of travel distribution businesses places the Company in a leading competitive position in the domestic online travel distribution business.
	The allocation of the purchase price as of December 31, 2005 is summarized as follows:

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	The fair value adjustments included in the allocation of the purchase price above primarily consisted of:

	(a)	Represents (i) $209 million of indefinite-lived trademarks associated with the Company’s exclusive right to use the Orbitz name and (ii) $52 million of customer relationships with a weighted average life of eight years.

	(b)	As part of the acquisition, the Company’s management formally committed to various strategic initiatives primarily aimed at creating synergies between the cost structures of the Company and Orbitz, which were expected to be achieved through the involuntarily termination of certain Orbitz employees and the consolidation of facilities. The Company formally communicated the termination of employment to approximately 40 employees, representing a wide range of employee groups, and as of December 31, 2005, the Company had terminated all of these employees. As a result of these actions, the Company established personnel-related and facility-related liabilities of $15 million and $7 million, respectively. As of December 31, 2005, cash payments and other reductions of $14 million and $1 million, respectively, of which $6 million and $1 million, respectively, were recorded during 2005, had been made to reduce the personnel-related liability. As such, all personnel-related liabilities have been paid. No payments or reductions have been made to the facility-related liability; however, the Company anticipates the remainder of the facility-related costs will be paid by 2009.

	(c)	Primarily represents (i) amounts due to former Orbitz owners related to a pre-existing tax sharing agreement for which the Company has determined payment is probable as a result of its expected utilization of Orbitz tax benefits (prior to Cendant’s acquisition, Orbitz had not established a liability for this tax-sharing agreement as it did not expect to be able to utilize the associated benefits within the statutory periods) and (ii) costs associated with certain Orbitz contracts containing above-market terms.

	The following table summarizes the fair values of the assets acquired and liabilities assumed in connection with the Company’s acquisition of Orbitz:

	The goodwill, all of which is expected to be deductible for tax purposes, was assigned to the Company’s Travel Distribution Services segment.
	Sotheby’s International Realty. On February 17, 2004, the Company acquired the domestic residential real estate brokerage operations of Sotheby’s International Realty and obtained the rights to create a Sotheby’s International Realty franchise system pursuant to an agreement to license the Sotheby’s International Realty brand in exchange for a license fee to Sotheby’s Holdings, Inc., the former parent of Sotheby’s International Realty. Such license agreement has a 50-year initial term and a 50-year renewal option. The total cash purchase price for these transactions was approximately $100 million. The

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	allocation of the purchase price resulted in goodwill of $51 million, all of which is expected to be deductible for tax purposes. Such goodwill was assigned to the Company’s Real Estate Services segment. This acquisition also resulted in $50 million of other intangible assets. Management believes that this acquisition enhances the Company’s role in the market place as a premier real estate brokerage firm and increases exposure to high net worth families throughout the United States.
	Flairview Travel. On April 8, 2004, the Company acquired Flairview Travel (“Flairview”), a leading online hotel distributor that specializes in the distribution of international hotel content throughout Europe and the Asia Pacific region, for approximately $88 million, net of cash acquired of $26 million. The allocation of the purchase price resulted in goodwill of $87 million, none of which is expected to be deductible for tax purposes. Such goodwill was assigned to the Company’s Travel Distribution Services segment. This acquisition also resulted in $19 million of other intangible assets. Management believes that this acquisition enhances the Company’s growing global travel portfolio and accelerates the planned international expansion of its online travel offerings.
	Landal GreenParks. On May 5, 2004, the Company acquired Landal GreenParks (“Landal”), a Dutch vacation rental company that specializes in the rental of privately owned vacation homes located in European holiday parks, for $81 million in cash, net of cash acquired of $22 million. As part of this acquisition, the Company also assumed $78 million of debt. The allocation of the purchase price resulted in goodwill of $56 million, of which $7 million is expected to be deductible for tax purposes. This acquisition also resulted in $41 million of other intangible assets. Management believes that this acquisition offers the Company both increased access to the important Dutch and German consumer markets as well as rental properties in high demand locations.
	Other. During 2004, the Company also acquired 21 other real estate brokerage operations through its wholly-owned subsidiary, NRT, for $115 million in cash, which resulted in goodwill of $101 million that was assigned to the Company’s Real Estate Services segment, of which $95 million is expected to be deductible for tax purposes. This acquisition also resulted in $13 million of other intangible assets. The acquisition of real estate brokerages by NRT is a core part of its growth strategy. In addition, the Company acquired 35 other individually non-significant businesses, primarily car rental licensees, during 2004 for aggregate consideration of approximately $179 million in cash. The goodwill resulting from the allocations of the purchase prices of these acquisitions aggregated $84 million, of which $49 million is expected to be deductible for tax purposes and was assigned to the Company’s Vehicle Rental ($33 million), Hospitality Services ($31 million), Real Estate Services ($9 million), Travel Distribution Services ($6 million) and former Mortgage Services ($5 million) segments. These acquisitions also resulted in $49 million of other intangible assets. These acquisitions were not significant to the Company’s results of operations, financial position or cash flows on a pro forma basis individually or in the aggregate.

	FFD Development Company, LLC. On February 3, 2003, the Company acquired all of the common interests of FFD Development Company, LLC (“FFD”) from an independent business trust for approximately $27 million in cash. As part of this acquisition, the Company also assumed approximately $58 million of debt, which was subsequently repaid. The allocation of the purchase price resulted in goodwill of approximately $16 million, none of which is expected to be deductible for tax purposes. Such goodwill was allocated to the Company’s Timeshare Resorts segment. FFD was formed prior to the Company’s April 2001 acquisition of Fairfield Resorts, Inc. (“Fairfield”) and was the primary developer of timeshare inventory for Fairfield.
	Trip Network, Inc. On March 31, 2003, the Company acquired a majority interest in Trip Network, Inc. (“Trip Network”) through the conversion of its preferred stock investment and, on April 1, 2003, the Company acquired all of the remaining common stock for $4 million in cash. To determine the goodwill to be recorded in connection with this acquisition, the Company’s basis in Trip Network was adjusted for $2 million of transaction-related expenses, its $17 million preferred stock investment and its $33 million deferred tax asset related to the initial funding of Trip Network. Accordingly, the Company’s total basis

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	in Trip Network was $56 million. Together with $21 million of historical value of liabilities assumed in excess of assets acquired and insignificant fair value adjustments, the Company recorded $73 million of goodwill, none of which is expected to be deductible for tax purposes. Such goodwill was allocated to the Travel Distribution Services segment. Trip Network is an online travel agent.
	Other. During 2003, the Company also acquired 19 real estate brokerage operations through its wholly-owned subsidiary, NRT, for approximately $123 million, which resulted in goodwill of $118 million that was assigned to the Company’s Real Estate Services segment, of which $100 million is expected to be deductible for tax purposes. This acquisition also resulted in $14 million of other intangible assets. The acquisition of real estate brokerages by NRT is a core part of its growth strategy. The Company also acquired 9 other non-significant businesses during 2003 for aggregate consideration of approximately $30 million in cash. The goodwill resulting from the allocations of the purchase prices of these acquisitions aggregated $27 million, of which $10 million is expected to be deductible for tax purposes and was assigned to the Company’s Travel Distribution Services ($17 million), Vehicle Rental ($8 million) and former Mortgage Services ($2 million) segments. These acquisitions were not significant to the Company’s results of operations, financial position or cash flows on a pro forma basis individually or in the aggregate.

	Amortization of Pendings and Listings. During 2005, 2004 and 2003, the Company amortized $23 million, $16 million and $20 million of its contractual pendings and listings intangible assets, all of which were acquired in connection with the acquisitions of real estate brokerages by NRT, except $3 million in 2003 which related to the acquisition of Trendwest. The Company segregated the pendings and listings amortization to enhance the comparability of its results of operations since these intangible assets are amortized over a short period of time (generally four to five months).
	Other. During 2005, 2004, and 2003, the Company incurred other acquisition and integration related costs of $32 million, $4 million and $34 million, respectively. The 2005 amount principally reflects costs that were incurred to integrate and combine the operations and Internet booking technology at the Company’s Orbitz, ebookers, Gullivers and Cheaptickets.com businesses. The 2004 amount is comprised of $16 million of costs primarily associated with the integration of Budget’s information technology systems with the Company’s platform, the integration of Orbitz and the integration of real estate brokerages acquired by NRT, partially offset by the reversal of a previously established $12 million accrual, which resulted from the termination of a lease on more favorable terms than originally anticipated. The 2003 amount primarily related to the integration of Budget’s information technology systems into the Company’s platform and revisions to the Company’s original estimate of costs to exit a facility in connection with the outsourcing of its data operations.

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6.	Intangible Assets

	Intangible assets consisted of:

	(a)	The balances at December 31, 2005 reflect the impairment charge recorded at the Company’s Travel Distribution Services segment (see Note 2—Summary of Significant Accounting Policies).

	(b)	Primarily amortized over periods ranging from 20 to 40 years.

	(c)	Primarily amortized over periods ranging from 10 to 25 years.

	(d)	Primarily amortized over periods ranging from 5 to 20 years.

	(e)	Represents contracts acquired with economic terms below market rates on the date of acquisition, which are amortized over the remaining life of the underlying agreement, generally ranging from 20 to 30 years.
	(f)	Amortized over 50 years.

	(g)	Generally amortized over periods ranging from 6 to 20 years.
	(h)	Comprised of various tradenames (including the Avis, Budget, Ramada, Days Inn, Wyndham, ebookers, Gullivers, Galileo and Orbitz tradenames) that the Company has acquired and which distinguish the Company’s consumer services as market leaders. These tradenames are expected to generate future cash flows for an indefinite period of time.

	The changes in the carrying amount of goodwill are as follows:

	(a)	Primarily relates to the acquisitions of real estate brokerages by NRT (January 2005 and forward).

	(b)	Primarily relates to the acquisition of Wyndham Worldwide (see Note 5— Acquisitions).

	(c)	Relates to the acquisition of a timeshare resort business (August 2005).

	(d)	Relates to the acquisition of a Budget licensee (July 2005).

	(e)	Primarily relates to the acquisitions of ebookers and Gullivers (see Note 5— Acquisitions).

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	(f)	Relates to the acquisitions of real estate brokerages by NRT (see Note 5— Acquisitions), including earnout payments.

	(g)	Primarily relates to the acquisitions of Landal GreenParks (see Note 5— Acquisitions) and Ramada International, Inc. (December 2004).
	(h)	Primarily relates to the acquisition of Orbitz (see Note 5— Acquisitions).

	(i)	Primarily relates to (i) a change in the tax basis of acquired assets, (ii) earnout payments for acquisitions of real estate brokerages by NRT prior to 2004 and (iii) the reallocation to the Real Estate Services segment of goodwill recorded within the Mortgage Services segment at December 31, 2004 as a result of the spin-off of PHH.
	(j)	Primarily relates to foreign exchange translation adjustments.

	(k)	Primarily relates to changes in the tax basis of acquired assets.

	(l)	Reflects the impairment charge described in Note 2— Summary of Significant Accounting Policies, which reduced goodwill by $254 million, as well as foreign exchange translation adjustments (principally at Gullivers and ebookers).

	(m)	Represents goodwill of the Company’s mortgage business, which was disposed of on January 31, 2005 (see Note 24— Spin-off of PHH Corporation).

	Amortization expense relating to all intangible assets, excluding mortgage servicing rights (see Note 24— Spin-off of PHH Corporation), was as follows:

	(*)	Includes pendings and listings amortization expense during the year ended December 31, 2005, 2004 and 2003 of $23 million, $16 million and $20 million, respectively.

	Based on the Company’s amortizable intangible assets as of December 31, 2005, the Company expects related amortization expense for the five succeeding fiscal years to approximate $110 million, $90 million, $80 million, $80 million and $80 million, respectively.

7.	Franchising and Marketing/ Reservation Activities

	Franchising revenues are comprised of the following:

	(*)	Amounts exclude $383 million, $355 million and $303 million of royalties primarily paid by NRT to the Company’s real estate franchise business during 2005, 2004 and 2003, respectively, which were eliminated in consolidation. The 2005, 2004 and 2003 amounts are net of annual rebates to the Company’s real estate franchisees of $115 million, $104 million and $80 million, respectively. The Company’s real estate franchisees may receive rebates on their royalty payments. Such rebates are based upon the amount of commission income earned during a calendar year. Each brand has several rebate schedules currently in effect.

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	Franchising revenues included initial franchise fees as follows:

	The number of Company-operated and franchised outlets in operation are as follows:

	The Company also receives marketing and reservation fees primarily from its lodging franchisees and marketing fees from its real estate franchisees, which are calculated based on a specified percentage of gross room revenues or based on a specified percentage of gross closed commissions earned on the sale of real estate, subject to certain minimum and maximum payments. Such fees totaled $235 million, $212 million and $206 million during 2005, 2004 and 2003, respectively, and were included within service fees and membership revenues on the Consolidated Statements of Income. As provided for in the franchise agreements and generally at the Company’s discretion, all of these fees are to be expended for marketing purposes and, in the case of lodging and car rental franchisees, the operation of a centralized brand-specific reservation system for the respective franchisees. Such fees are controlled by the Company until disbursement.
	In connection with ongoing fees the Company receives from its franchisees pursuant to the franchise agreements, the Company is required to provide certain services, such as training, marketing and the operation of reservation systems.
	In order to assist the franchisees of its lodging and real estate franchise businesses in converting to one of the Company’s brands to assist in franchise expansion, the Company may, at its discretion, provide development advances to franchisees who are either new or who are expanding their operations. Provided the franchisee meets certain minimum operational thresholds and maintains the terms of the franchise agreement, all or a portion of the advances may be forgivable and are, therefore, amortized over the length of the underlying note (typically between nine and fifteen years). Otherwise, related principal is due and payable to the Company. In certain instances, the Company may earn interest on unpaid franchisee development advances, which was not significant during 2005, 2004 or 2003. The balances of such development advances were $21 million for the Company’s lodging business at both December 31, 2005 and 2004 and $69 million and $59 million for its real estate franchise business at December 31, 2005 and 2004, respectively. These amounts are classified primarily within the other non-current assets line item on the Company’s Consolidated Balance Sheets. Related amortization expense approximated $15 million, $14 million and $11 million during 2005, 2004 and 2003, respectively, and was recorded within the operating expense line item on the Company’s Consolidated Statements of Income.

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8.	Vehicle Rental Activities

	The components of the Company’s vehicle-related assets under management programs are comprised of the following:

	The components of vehicle depreciation, lease charges and interest, net are summarized below:

	(*)	Amounts are net of interest income of $4 million, $4 million and $5 million during 2005, 2004 and 2003, respectively.

9.	Restructuring and Transaction Related Charges

	During 2005, the Company recorded $50 million of restructuring and transaction-related charges, of which $47 million was incurred as a result of restructuring activities undertaken following the PHH spin-off and the initial public offering of Wright Express and $3 million related to transaction costs incurred during the year ended December 31, 2005 in connection with the PHH spin-off.

During first quarter 2005, the Company committed to various strategic initiatives targeted principally at reducing costs, enhancing organizational efficiency and consolidating and rationalizing existing processes and facilities. The more significant areas of cost reduction include the closure of a call center and field locations of the Company’s truck rental business, consolidation of processes and offices in the Company’s real estate brokerage business and reductions in staff within the Travel Distribution Services and Hospitality Services segments and the Company’s corporate functions. The Company recorded restructuring charges of $47 million in 2005, of which $40 million is anticipated to be cash and $34 million had been paid as of December 31, 2005.

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	The initial recognition of the restructuring charge and the corresponding utilization from inception are summarized by category as follows:

	(a)	The initial charge primarily represents severance benefits resulting from the reductions in staff. The Company formally communicated the termination of employment to approximately 900 employees, representing a wide range of employee groups. As of December 31, 2005, the Company had terminated all of these employees.

	(b)	The initial charge principally represents costs incurred in connection with facility closures and lease obligations resulting from the consolidation of truck rental operations.

	(c)	The initial charge principally represents the write-off of leasehold improvements in connection with lease terminations.

	(d)	Other reductions to charges recorded for personnel-related costs represent the accelerated vesting of restricted stock units previously granted to individuals who were terminated in connection with this restructuring action. Other reductions to liabilities established for asset impairments principally represent the write-off of leasehold improvements in connection with lease terminations.

	Total restructuring charges are recorded as follows:

10.	Income Taxes

	The income tax provision consists of the following:

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	Pre-tax income for domestic and foreign operations consists of the following:

	Current and non-current deferred income tax assets and liabilities are comprised of the following:

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	Net deferred income tax liabilities related to management programs are comprised of the following:

	As of December 31, 2005, the Company had federal net operating loss carryforwards of $469 million, which primarily expire in 2024. No provision has been made for U.S. federal deferred income taxes on approximately $845 million of accumulated and undistributed earnings of foreign subsidiaries at December 31, 2005 since it is the present intention of management to reinvest the undistributed earnings indefinitely in those foreign operations. The determination of the amount of unrecognized U.S. federal deferred income tax liability for unremitted earnings is not practicable.
	In December 2004, the FASB issued FASB Staff Position No. FAS 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004.” The American Jobs Creation Act of 2004, which became effective October 22, 2004, provides a one-time dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer, provided certain criteria are met. The Company has applied the provisions of this act to qualifying earnings repatriations through December 31, 2005. In December 2005, the Company repatriated $350 million of unremitted earnings, which will be used for domestic investment purposes. This repatriation resulted in income tax expense of approximately $28 million.
	The Company’s effective income tax rate for continuing operations differs from the U.S. federal statutory rate as follows:

The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining the Company’s worldwide provision for income taxes and recording the related assets and liabilities. In the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. The Company is regularly under audit by tax authorities. Accruals for tax contingencies are provided for in accordance with the requirements of SFAS No. 5, “Accounting for Contingencies.”

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The Internal Revenue Service (“IRS”) is currently examining the Company’s taxable years 1998 through 2002. Over the course of this audit, the Company has responded to numerous requests for information, primarily focused on the 1999 statutory merger of the Company’s former fleet business; the calculation of the stock basis in the 1999 sale of a subsidiary; and the deductibility of expenses associated with the shareholder class action litigation. To date, the Company has not received any IRS proposed adjustments related to such period.

Although the Company believes it has appropriate support for the positions taken on its tax returns, the Company has recorded a liability for its best estimate of the probable loss on certain of these positions. The Company believes that its accruals for tax liabilities are adequate for all open years, based on its assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. Although the Company believes its recorded assets and liabilities are reasonable, tax regulations are subject to interpretation and tax litigation is inherently uncertain; therefore the Company’s assessments can involve both a series of complex judgments about future events and rely heavily on estimates and assumptions. While the Company believes that the estimates and assumptions supporting its assessments are reasonable, the final determination of tax audits and any related litigation could be materially different than that which is reflected in historical income tax provisions and recorded assets and liabilities. Based on the results of an audit or litigation, a material effect on our income tax provision, net income, or cash flows in the period or periods for which that determination is made could result.

	Other current assets consisted of:

	Property and equipment, net consisted of:

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	Accounts payable and other current liabilities consisted of:

	Long-term debt consisted of:

	(a)	Approximately $350 million of the outstanding borrowings at December 31, 2005 represent borrowings to repatriate foreign earnings under the American Jobs Creation Act of 2004.

	(b)	As of December 31, 2005, this balance represents $153 million of mark-to-market adjustments on current interest rate hedges, partially offset by $106 million of net gains resulting from the termination of interest rate hedges, which will be amortized by the Company to reduce future interest expense. As of December 31, 2004, the balance represented $138 million of net gains resulting from the termination of interest rate hedges, which were partially offset by $121 million of mark-to-market adjustments on current interest rate hedges.

	(c)	The balance as of December 31, 2005 includes $850 million and $100 million of borrowings under the Company’s 67/8% and 4.89% notes, respectively, due in August 2006. The balance as of December 31, 2004 includes $650 million of borrowings under the Company’s $3.5 billion revolving credit facility.

	The Company’s 67/8% notes, with a face value of $850 million, were issued in August 2001 for net proceeds of $843 million. The interest rate on these notes is subject to an upward adjustment of 150 basis points in the event that the credit ratings assigned to the Company by nationally recognized credit rating agencies are downgraded below investment grade. The Company does not have the right to

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	redeem these notes prior to maturity. These notes are senior unsecured obligations and rank equally in right of payment with all the Company’s existing and future unsecured senior indebtedness.

On May 10, 2004, the Company’s outstanding 6.75% senior notes that formed a part of the Upper DECS, a hybrid instrument previously issued by the Company that consisted of both equity linked and debt securities, were successfully remarketed and the interest rate was reset to 4.89%. Each Upper DECS consisted of both a senior note and a forward purchase contract to purchase shares of the Company’s common stock. In connection with such remarketing, the Company purchased and retired $763 million of the senior notes for $778 million in cash and recorded a loss of $18 million on the early extinguishment. The forward purchase contract was settled on August 17, 2004 (see Note 18—Stockholders’ Equity for more information on the forward purchase contract). These notes are senior unsecured obligations and rank equally in right of payment with all the Company’s existing and future unsecured senior indebtedness.

The Company’s 61/4% notes (with face values of $800 million and $350 million) were issued in January and March 2003 for aggregate net proceeds of $1,137 million. The notes are redeemable at the Company’s option at any time, in whole or in part, at the appropriate redemption prices plus accrued interest through the redemption date. These notes are senior unsecured obligations and rank equally in right of payment with all the Company’s existing and future unsecured senior indebtedness.

The Company’s 73/8% notes, with a face value of $1.2 billion, were issued in January 2003 for net proceeds of $1,181 million. The notes are redeemable at the Company’s option at any time, in whole or in part, at the appropriate redemption prices plus accrued interest through the redemption date. These notes are senior unsecured obligations and rank equally in right of payment with all the Company’s existing and future unsecured senior indebtedness.

The Company’s 71/8% notes, with a face value of $250 million, were issued in March 2003 for net proceeds of $248 million. The notes are redeemable at the Company’s option at any time, in whole or in part, at the appropriate redemption prices plus accrued interest through the redemption date. These notes are senior unsecured obligations and rank equally in right of payment with all the Company’s existing and future unsecured senior indebtedness.

	Aggregate maturities of debt are as follows:

	(*)	Includes $850 million and $100 million of the Company’s outstanding 67/8% and 4.89% notes, respectively, due in August 2006.

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	In connection with the separation plan, the Company expects to retire substantially all its then-outstanding corporate indebtedness. The Company expects to fund this retirement with available cash and proceeds raised from new borrowings at each of the new Real Estate Services, Hospitality Services and Travel Distribution companies.

	At December 31, 2005, the committed credit facilities and commercial paper program available to the Company at the corporate level were as follows:

	(a)	Outstanding borrowings include $357 million under the Company’s $3.5 billion revolving credit facility, which has a final maturity date of November 2009. In addition to the letters of credit issued as of December 31, 2005, the revolving credit facility contains the committed capacity to issue an additional $494 million in letters of credit. The letters of credit outstanding under this facility at December 31, 2005 were issued primarily to support the Company’s vehicle rental business. Following the proposed separation plan, the Company expects to terminate this facility.

	(b)	Final maturity date is July 2010. Following the proposed separation plan, the Company expects to terminate this facility.

	The Company also maintains short-term borrowing facilities that are renewable annually and provide for borrowings up to $535 million within its settlement services and real estate brokerage businesses, which are callable by the lenders at any time. In the normal course of business, the Company borrows amounts under these facilities, which it invests in high quality short-term liquid investments. Net amounts earned under these arrangements were not significant in 2005, 2004 or 2003 and there were no outstanding borrowings under these facilities at December 31, 2005 or 2004.
	As of December 31, 2005, the Company also had $400 million of availability for public debt or equity issuances under a shelf registration statement.

Certain of the Company’s debt instruments and credit facilities contain restrictive covenants, including restrictions on indebtedness of material subsidiaries, mergers, limitations on liens, liquidations and sale and leaseback transactions, and also require the maintenance of certain financial ratios. At December 31, 2005, the Company was in compliance with all restrictive and financial covenants. The Company’s debt instruments permit the debt issued thereunder to be accelerated upon certain events, including the failure to pay principal when due under any of the Company’s other debt instruments or credit facilities subject to materiality thresholds. The Company’s credit facilities permit the loans made thereunder to be accelerated upon certain events, including the failure to pay principal when due under any of the Company’s debt instruments subject to materiality thresholds.

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	Debt under management programs (including related party debt due to Cendant Rental Car Funding) consisted of:

	Cendant Rental Car Funding. Cendant Rental Car Funding was established by the Company as a bankruptcy remote special purpose limited liability company that issues private placement notes and uses the proceeds from such issuances to make loans to a wholly-owned subsidiary of the Company, AESOP Leasing LP (“AESOP Leasing”) on a continuing basis. AESOP Leasing is required to use these proceeds to acquire or finance the acquisition of vehicles used in the Company’s rental car operations. Prior to December 31, 2003, both Cendant Rental Car Funding and AESOP Leasing were consolidated by the Company and, as such, the intercompany transactions between these two entities were eliminated causing only the third-party debt issued by Cendant Rental Car Funding and the vehicles purchased by AESOP Leasing to be presented within the Company’s Consolidated Financial Statements. However, in connection with the adoption of FIN 46, the Company determined that it was not the primary beneficiary of Cendant Rental Car Funding. Accordingly, the Company deconsolidated Cendant Rental Car Funding on December 31, 2003. As a result, AESOP Leasing’s obligation to Cendant Rental Car Funding is reflected as related party debt on the Company’s Consolidated Balance Sheet as of December 31, 2005 and 2004. The Company also recorded an asset within vehicle-related, net assets under management programs on its Consolidated Balance Sheet at December 31, 2005 and 2004, which represented the equity issued by Cendant Rental Car Funding to the Company. The vehicles purchased by AESOP Leasing remain on the Company’s Consolidated Balance Sheet as AESOP Leasing continues to be consolidated by the Company. Such vehicles and related assets, which approximate $7.5 billion, collateralize the debt issued by Cendant Rental Car Funding and are not available to pay the obligations of the Company.
	The business activities of Cendant Rental Car Funding are limited primarily to issuing indebtedness and using the proceeds thereof to make loans to AESOP Leasing for the purpose of acquiring or financing the acquisition of vehicles to be leased to the Company’s rental car subsidiary and pledging its assets to secure the indebtedness. As the deconsolidation of Cendant Rental Car Funding occurred on December 31, 2003, the income statement and cash flow activity of the Company are not impacted for

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	2003. Beginning on January 1, 2004, the results of operations and cash flows of Cendant Rental Car Funding are no longer reflected within the Company’s Consolidated Financial Statements. Borrowings under the Cendant Rental Car Funding program primarily represent floating rate term notes with a weighted average interest rate of 4% for 2005 and 3% for both 2004 and 2003.
	Other. As of December 31, 2005 and 2004, borrowings under the Company’s other vehicle rental programs include $519 million and $445 million, respectively, of financing to support the acquisition of vehicles in the Company’s Budget truck operations, which consist of capital leases and bank debt. The other borrowings also include $433 million and $347 million at December 31, 2005 and 2004, respectively, of bank debt to support the acquisition of vehicles used in the Company’s international vehicle rental operations. These borrowings are collateralized by approximately $1.1 billion of vehicles and related assets, which are recorded within assets under management programs on the Company’s Consolidated Balance Sheet as of December 31, 2005. These borrowings have a weighted average interest rate of 4%, 3% and 2% for 2005, 2004 and 2003, respectively.

	Cendant Timeshare Receivables Funding Entities (formerly, the Sierra Receivables Funding Entities). The Cendant Timeshare Receivables Funding entities (the “Timeshare Funding entities”) are consolidated bankruptcy remote SPEs that are utilized to securitize timeshare receivables generated from financing the sale of vacation ownership interests by the Company’s timeshare businesses. The debt issued by the Timeshare Funding entities, which approximated $1.1 billion and $911 million at December 31, 2005 and 2004, respectively, is collateralized by approximately $1.5 billion of underlying timeshare receivables and assets. The timeshare receivables are serviced by the Company and recorded within timeshare-related assets under management programs on the Company’s Consolidated Balance Sheet as of December 31, 2005 and 2004. Prior to September 1, 2003, sales of timeshare receivables to the Timeshare Funding entities were treated as off-balance sheet sales, as these entities were structured as bankruptcy remote QSPEs pursuant to SFAS No. 140 “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” and, therefore, excluded from the scope of FIN 46. However, on September 1, 2003, the underlying structures of the Timeshare Funding entities were amended in a manner that resulted in these entities no longer meeting the criteria to qualify as QSPEs. Consequently, the Company began consolidating the account balances and activities of the Timeshare Funding entities on September 1, 2003 pursuant to FIN 46. The activities of the Timeshare Funding entities are limited to (i) purchasing timeshare receivables from the Company’s timeshare subsidiaries, (ii) issuing debt securities and/or borrowing under a conduit facility to effect such purchases and (iii) entering into derivatives to hedge interest rate exposure. The assets of the Timeshare Funding entities are not available to pay the obligations of the Company. The debt issued under the Timeshare Funding entities primarily represents fixed rate and floating rate term notes for which the weighted average interest rate was 4% for 2005 and 3% for both 2004 and 2003.
	Other. At December 31, 2005 and 2004, amounts outstanding under the Company’s other timeshare programs represent borrowings of $550 million and $425 million, respectively, under an asset-linked facility and $112 million and $137 million, respectively, of bank debt. The asset-linked facility has a three-year term, bears interest at a rate of LIBOR plus 62.5 basis points and supports the creation of consumer notes receivable and the acquisition of timeshare properties related to the Company’s timeshare development business. These borrowings are recourse to the Company and collateralized by approximately $1.4 billion of timeshare-related assets, which are recorded within assets under management programs on the Company’s Consolidated Balance Sheet. The weighted average interest rate on these borrowings was 5% for 2005 and 3% for both 2004 and 2003.

	Cendant Mobility Client-Backed Relocation Receivables Funding, LLC. The Company issues secured obligations through Cendant Mobility Client-Backed Relocation Receivables Funding, LLC (formerly Apple Ridge Funding, LLC) (the “Relocation Funding Entity”), which is a consolidated bankruptcy remote SPE that is utilized to securitize relocation receivables and advances, which are generated from

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	advancing funds on behalf of clients of the Company’s relocation business. The secured obligations issued by the Relocation Funding Entity, which approximated $513 million and $400 million at December 31, 2005 and 2004, respectively, are collateralized by underlying relocation receivables, relocation properties held for sale and other related assets which are serviced by the Company and aggregate $565 million at December 31, 2005. These relocation receivables and related assets are recorded within assets under management programs on the Company’s Consolidated Balance Sheet as of December 31, 2005 and 2004. Prior to November 26, 2003, sales of relocation receivables to this entity were treated as off-balance sheet sales, as it was structured as a bankruptcy remote QSPE and, therefore, excluded from the scope of FIN 46. However, on November 26, 2003, the underlying structure of this entity was amended in a manner that resulted in it no longer meeting the criteria to qualify as a QSPE pursuant to SFAS No. 140. Consequently, the Company began consolidating the account balances and activities of the Relocation Funding Entity on November 26, 2003 pursuant to FIN 46. The assets of the Relocation Funding Entity are not available to pay the Company’s general obligations. The secured obligations issued under the Relocation Funding Entity represent floating rate notes for which the weighted average interest rate was 4%, 2% and 1% for 2005, 2004 and 2003, respectively. This program is subject to annual renewal.
	Other. At December 31, 2005, amounts outstanding under the Company’s other relocation programs which aggregate $244 million, are collateralized by approximately $291 million of underlying relocation receivables, relocation properties held for sale and other related assets. These borrowings represent floating rate debt for which the weighted average interest rate was 5% for 2005.

As of December 31, 2005 and 2004, borrowings under the Company’s vacation rental program comprise $139 million and $167 million of capital leases, respectively, and $68 million and $84 million of bank debt, respectively, assumed in connection with the Company’s acquisition of Landal during 2004. The bank debt is collateralized by $117 million of land and related vacation rental assets. For the capital lease obligations, there are corresponding assets classified within assets under management programs on the Company’s Consolidated Balance Sheet as of December 31, 2005. These borrowings have a weighted average interest rate of 6% for both 2005 and 2004.

Borrowings at December 31, 2004 under the Company’s former mortgage program represented issuances by Bishop’s Gate. Bishop’s Gate is a bankruptcy remote SPE that was utilized by the Company to warehouse mortgage loans originated by the Company’s mortgage business, which was spun-off in January 2005 (see Note 24 —Spin-off of PHH Corporation), prior to their sale into the secondary market, which is customary practice in the mortgage industry. The debt issued by Bishop’s Gate as of December 31, 2004 was collateralized by approximately $1.4 billion of underlying mortgage loans and related assets. The mortgage loans were serviced by the Company and recorded within mortgage loans held for sale on the Company’s Consolidated Balance Sheet as of December 31, 2004. Prior to the adoption of FIN 46, sales of mortgage loans to Bishop’s Gate were treated as off-balance sheet sales. The activities of Bishop’s Gate were limited to (i) purchasing mortgage loans from the Company’s mortgage subsidiary, (ii) issuing commercial paper or other debt instruments and/or borrowing under a liquidity agreement to effect such purchases, (iii) entering into interest rate swaps to hedge interest rate risk and certain non-credit related market risk on the purchased mortgage loans, (iv) selling and securitizing the acquired mortgage loans to third parties and (v) engaging in certain related transactions. The assets of Bishop’s Gate were not available to pay the obligations of the Company. The debt issued by Bishop’s Gate primarily represented term notes for which the weighted average interest rate was 2% for both 2004 and 2003.

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These term notes were issued by and were for the exclusive use of the Company’s former PHH subsidiary, which was spun-off in January 2005 (see Note 24 —Spin-off of PHH Corporation). The balance at December 31, 2004 consisted of (i) $983 million of publicly issued medium-term notes bearing interest at a blended rate of 7%, (ii) $453 million of privately-placed medium-term notes bearing interest at a blended rate of 8% and (iii) $397 million of short-term notes bearing interest at a blended rate of 7%. Such amounts include aggregate hedging losses of $18 million.

	This commercial paper facility was entered into and used exclusively by the Company’s former PHH subsidiary, which was spun-off in January 2005 (see Note 24 —Spin-off of PHH Corporation). The weighted average interest rate on the commercial paper outstanding at December 31, 2004 was 1%.

The following table provides the contractual maturities of the Company’s debt under management programs (including related party debt due to Cendant Rental Car Funding at December 31, 2005 (except for notes issued under the Company’s timeshare program where the underlying indentures require payments based on cash inflows relating to the corresponding assets under management programs and for which estimates of repayments have been used):

	As of December 31, 2005, available funding under the Company’s asset-backed debt programs (including related party debt due to Cendant Rental Car Funding related to the Company’s management programs) consisted of:

	(*)	Capacity is subject to maintaining sufficient assets to collateralize debt.

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Certain of the Company’s debt instruments and credit facilities related to its management programs contain restrictive covenants, including restrictions on dividends paid to the Company by certain of its subsidiaries and indebtedness of material subsidiaries, mergers, limitations on liens, liquidations, and sale and leaseback transactions, and also require the maintenance of certain financial ratios. At December 31, 2005, the Company was in compliance with all financial covenants of its debt instruments and credit facilities related to management programs.

	In 2001, the Company sold timeshare receivables to multiple bankruptcy remote QSPEs retaining the servicing rights and a subordinated interest. As these entities are QSPEs and precluded from consolidation pursuant to generally accepted accounting principles, the debt issued by these entities and the collateralizing assets, which are serviced by the Company, are not reflected on the Company’s Consolidated Balance Sheets. The assets of these QSPEs are not available to pay the Company’s obligations. Additionally, the creditors of these QSPEs have no recourse to the Company’s credit. However, the Company has made representations and warranties customary for securitization transactions, including eligibility characteristics of the receivables and servicing responsibilities, in connection with the securitization of these assets. Sales of timeshare receivables to these entities after 2001 were insignificant since substantially all timeshare receivables were securitized during such years through the Timeshare Funding entities, which are consolidated on the Company’s Consolidated Balance Sheets as of December 31, 2005 and 2004. The Company’s retained interest in the QSPEs at December 31, 2005 is insignificant.
	The cash flow activity presented below covers the period up to and including the date of consolidation of these structures in addition to the full year activity between the Company and securitization trusts that remain off-balance sheet as of December 31, 2005.

	(a)	Represents cash flows received on retained interests other than servicing fees.

	(b)	The purchase of delinquent or foreclosed timeshare receivables is primarily at the Company’s option and not based on a contractual relationship with the securitization trusts.

	(c)	Represents the purchase of contracts that no longer meet the securitization criteria, primarily due to modifications to the original contract as a result of an upgrade by a current owner.

	During 2003, the Company recognized pre-tax gains of $39 million on the securitization of timeshare receivables through the Timeshare Funding entities (prior to the Company’s consolidation thereof on September 1, 2003), which were calculated using the following key economic assumptions: 7-15% prepayment speed; 7.0-7.6 weighted average life (in years); 15% discount rate; 9.5-13.7% anticipated credit losses. Such gains were recorded within net revenues on the Company’s Consolidated Statement of Income.
	As previously discussed, the Company sold financial assets to the Relocation Funding Entity prior to its consolidation thereof on November 26, 2003. For the period January 1, 2003 through November 26,

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	2003 (the date of consolidation), cash flow activity between the Company and the Relocation Funding Entity was as follows:

	(a)	Represents cash flows received on retained interests other than servicing fees.

	Gains recognized on the securitization of relocation receivables were not material during 2003.
	The Company has made representations and warranties customary for securitization transactions, including eligibility characteristics of timeshare receivables and relocation receivables and servicing responsibilities, in connection with the securitization of these assets. See Note 17—Commitments and Contingencies.

	The Company is committed to making rental payments under noncancelable operating leases covering various facilities and equipment. Future minimum lease payments required under noncancelable operating leases as of December 31, 2005 are as follows:

Other than those within the Company’s vehicle rental and vacation rental programs, for which the future minimum lease payments have been reflected in Note 15—Debt Under Management Programs and Borrowing Arrangements, commitments under capital leases are not significant. During 2005, 2004 and 2003, the Company incurred total rental expense of $800 million, $753 million and $701 million, respectively, inclusive of contingent rental expense of $138 million, $97 million and $93 million in 2005, 2004 and 2003, respectively, principally based on car rental volume. Included within the Company’s total rental expense for 2005, 2004 and 2003 are fees paid by the Company in connection with agreements with airports that allow the Company to conduct its car rental operations on-site. Such agreements require the Company to guarantee a minimum amount of fees to be paid to the airports regardless of the amount of revenue generated by the on-site car rental operations. The Company has also included the future minimum payments to be made in connection with these guarantees in the above table.

The Company maintains agreements with vehicle manufacturers, which require the Company to purchase approximately $14.4 billion of vehicles from these manufacturers over the next three years (approximately $8.0 billion, $4.4 billion and $1.9 billion during 2006, 2007 and 2008, respectively). These commitments are subject to the vehicle manufacturers’ satisfying their obligations under the repurchase agreements. The Company’s primary suppliers for the Avis and Budget brands are General Motors Corporation and Ford Motor Company, respectively. The purchase of such vehicles is financed through the issuance of debt under management programs in addition to cash received upon the sale of vehicles primarily under repurchase programs.

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In the normal course of business, the Company makes various commitments to purchase goods or services from specific suppliers, including those related to capital expenditures. None of the purchase commitments made by the Company as of December 31, 2005 (aggregating approximately $1.6 billion) was individually significant with the exception of the Company’s commitments under service contracts for information technology and telecommunications (aggregating $1.2 billion, of which $279 million relates to 2006). These purchase obligations extend through 2011.

	The Company is involved in litigation asserting claims associated with accounting irregularities discovered in 1998 at former CUC business units outside of the principal common stockholder class action litigation. While the Company has an accrued liability of approximately $80 million recorded on its Consolidated Balance Sheet as of December 31, 2005 for these claims based upon its best estimates, it does not believe that it is feasible to predict or determine the final outcome or resolution of any unresolved proceedings. An adverse outcome from any unresolved proceedings could be material with respect to earnings in any given reporting period. However, the Company does not believe that the impact of any unresolved proceedings should result in a material liability to the Company in relation to its consolidated financial position or liquidity.
	In addition to the matters discussed above, the Company is also involved in claims, legal proceedings and governmental inquiries related to contract disputes, business practices, intellectual property, environmental issues and other commercial, employment and tax matters. Such matters include but are not limited to various suits relating to wages paid to sales representatives at the Company’s timeshare resort business. The Company believes that it has adequately accrued for such matters as appropriate or, for matters not requiring accrual, believes that they will not have a material adverse effect on its results of operations, financial position or cash flows based on information currently available. However, litigation is inherently unpredictable and, although the Company believes that its accruals are adequate and/or that it has valid defenses in these matters, unfavorable resolutions could occur, which could have a material adverse effect on the Company’s results of operations or cash flows in a particular reporting period.

In the ordinary course of business, the Company enters into numerous agreements that contain standard guarantees and indemnities whereby the Company indemnifies another party for breaches of representations and warranties. In addition, many of these parties are also indemnified against any third party claim resulting from the transaction that is contemplated in the underlying agreement. Such guarantees or indemnifications are granted under various agreements, including those governing (i) purchases, sales or outsourcing of assets or businesses, (ii) leases of real estate, (iii) licensing of trademarks, (iv) development of timeshare properties, (v) access to credit facilities and use of derivatives, (vi) sales of mortgage loans, (vii) issuances of debt or equity securities, (viii) licensing of computer software and (ix) GDS subscriber services. The guarantees or indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements, (iv) developers in timeshare development agreements, (v) financial institutions in credit facility arrangements and derivative contracts, (vi) purchasers and insurers of the loans in sales of mortgage loans, (vii) underwriters in debt or equity security issuances and (viii) travel agents or other users in GDS subscriber services. While some of these guarantees extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments that the Company could be required to make under these guarantees, nor is the Company able to develop an estimate of the maximum potential amount of future payments to be made under these guarantees as the triggering events are not subject to predictability. With respect to certain of the aforementioned guarantees, such as

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	indemnifications of landlords against third party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates any potential payments to be made.
	The Company also provides guarantees for the benefit of landlords in lease contracts where the lease was assigned to a third party due to the sale of a business which occupied the leased facility. These guarantees extend only the duration of the underlying lease contract. The maximum potential amount of future payments that the Company may be required to make under these guarantees is approximately $17 million in the aggregate. If the Company were required to make payments under these guarantees, it would have similar recourse against the tenant (third party to which the lease was assigned).

	The Company’s timeshare businesses provide guarantees to certain owners’ associations for funds required to operate and maintain timeshare properties in excess of assessments collected from owners of the timeshare interests. The Company may be required to fund such excess as a result of unsold Company-owned timeshare interests or failure by owners to pay such assessments. These guarantees extend for the duration of the underlying service agreements (which approximate one year and are renewable on an annual basis) or until a stipulated percentage (typically 80% or higher) of related timeshare interests are sold. The maximum potential future payments that the Company could be required to make under these guarantees was approximately $175 million as of December 31, 2005. The Company would only be required to pay this maximum amount if none of the owners assessed paid their maintenance fees. Any fees collected from the owners of the timeshare interests would reduce the maximum potential amount of future payments to be made by the Company. Additionally, should the Company be required to fund the deficit through the payment of any owners’ fees under these guarantees, the Company would be permitted access to the property for its own use and may use that property to engage in revenue producing activities, such as advertising or rental. Historically, the Company has not been required to make material payments under these guarantees as the fees collected from owners of timeshare interests have been sufficient to support the operation and maintenance of the timeshare properties. As of December 31, 2005, the liability recorded by the Company in connection with these guarantees was approximately $11 million.
	The Company coordinates numerous events for its franchisees and thus reserves a number of venues with certain minimum guarantees, such as room rentals at hotels local to the conference center. However, such room rentals are paid by each individual franchisee. If the franchisees do not meet the minimum guarantees, the Company is obligated to fulfill the minimum guaranteed fees. These guarantees extend into 2008 and the maximum potential amount of future payments that the Company may be required to make under such guarantees is approximately $18 million. The Company would only be required to pay this maximum amount if none of the franchisees conducted their planned events at the reserved venues. Historically, the Company has not been required to make material payments under these guarantees. As of December 31, 2005, the liability recorded by the Company in connection with these guarantees was approximately $1 million.
	The Company has provided certain guarantees to subsidiaries of PHH, which, as previously discussed, was spun-off during first quarter 2005. These guarantees relate primarily to various real estate and product operating leases. The maximum potential amount of future payments that the Company may be required to make under the guarantees relating to the various real estate and product operating leases is estimated to be approximately $40 million. At December 31, 2005, the liability recorded by the Company in connection with these guarantees was approximately $1 million. To the extent that the Company would be required to perform under any of these guarantees, PHH has agreed to indemnify the Company.
	In connection with the Company’s disposition of its Marketing Services Division (“MSD”), the Company agreed to provide certain indemnifications related to, among other things, litigation matters related to various suits brought against MSD by individual consumers and state regulatory authorities seeking monetary and/or injunctive relief regarding the marketing of certain membership programs and inquiries from state regulatory authorities related to such programs. Such indemnification entitles the

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purchaser to reimbursement for a portion of the actual losses suffered by it in regards to such matters. In addition, pursuant to a number of post-closing commercial arrangements entered into between certain of the Company’s subsidiaries and MSD, the Company also agreed to provide a minimum number of call transfers to certain MSD subsidiaries, as well as retaining pre-existing guarantee obligations for certain real estate operating lease obligations on behalf of certain MSD subsidiaries. The Company established a liability for the estimated fair value of these guarantees in the amount of approximately $100 million on the sale date, which reduced the gain on the transaction recorded within discontinued operations. The maximum potential amount of future payments to be made under these guarantees is approximately $400 million excluding one litigation matter for which there is no limitation to the maximum potential amount of future payments.

During the quarterly periods ended March 31, June 30, September 30 and December 31, 2005, the Company paid cash dividends of $0.09, $0.09, $0.11 and $0.11 per common share, respectively ($423 million in the aggregate). During the quarterly periods ended March 31, June 30, September 30 and December 31, 2004, the Company paid cash dividends of $0.07, $0.07, $0.09 and $0.09 per common share, respectively ($333 million in the aggregate).

During 2005, the Company used $1.1 billion of available cash and $289 million of proceeds primarily received in connection with option exercises to repurchase approximately $1.3 billion (approximately 68 million shares) of Cendant common stock under its common stock repurchase program. During 2004, the Company used $756 million of available cash and $567 million of proceeds primarily received in connection with option exercises to repurchase approximately $1.3 billion (approximately 58 million shares) of Cendant common stock under its common stock repurchase program. During 2003, the Company used $644 million of available cash and $446 million of proceeds primarily received in connection with option exercises to repurchase approximately $1.1 billion (approximately 65 million shares) of Cendant common stock under its common stock repurchase program.

	During first quarter 2004, the Company announced its intention to redeem its $430 million then-outstanding zero coupon senior convertible contingent notes for cash. As a result, holders had the right to convert their notes into shares of Cendant common stock. Virtually all holders elected to convert their notes. Accordingly, the Company issued approximately 22 million shares in exchange for approximately $430 million in notes (carrying value) during February 2004. The Company used the cash that otherwise would have been used to redeem these notes to repurchase shares in the open market.
	On August 17, 2004, the forward purchase contracts that formed a portion of the Company’s Upper DECS securities settled pursuant to the terms of such contracts. Accordingly, the Company issued approximately 38 million shares in exchange for $863 million in cash and recorded an increase of $863 million to stockholders’ equity.

During 2004, the Company redeemed its former 37/8% convertible senior debentures for cash. However, holders could have elected to convert each $1,000 par value debenture into 41.58 shares of Cendant common stock (33.4 million shares in the aggregate). In order to offset a portion of the dilution that would have occurred if the holders elected to convert their debentures, the Company purchased call spread options on April 30, 2004 covering 16.3 million of the 33.4 million shares issuable upon conversion. The call spread options, which expired unexercised in fourth quarter 2004, and which cost $23 million, were accounted for as a capital transaction and included as a component of stockholders’ equity.

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	The after-tax components of accumulated other comprehensive income are as follows:

	(*)	Assets and liabilities of foreign subsidiaries having non-U.S.-dollar functional currencies are translated at exchange rates at the Consolidated Balance Sheet dates. Revenues and expenses are translated at average exchange rates during the periods presented. The gains or losses resulting from translating foreign currency financial statements into U.S. dollars, net of hedging gains or losses and taxes, are included in accumulated other comprehensive income. Gains or losses resulting from foreign currency transactions are included in the Consolidated Statements of Income.

	All components of accumulated other comprehensive income are net of tax except currency translation adjustments, which exclude income taxes related to indefinite investments in foreign subsidiaries.

The Company may grant stock options, stock appreciation rights, restricted shares and restricted stock units (“RSUs”) to its employees, including directors and officers of the Company and its affiliates. Beginning in 2003, the Company changed the method by which it provides stock-based compensation to its employees by significantly reducing the number of stock options granted and instead, issuing RSUs as a form of compensation. The Company is authorized to grant up to 318 million shares of its common stock under its active stock plans and at December 31, 2005, approximately 123 million shares were available for future grants under the terms of these plans.

Stock options generally have a ten-year term, and those granted prior to 2004 vest ratably over periods ranging from two to five years. In 2004, the Company adopted performance and time vesting criteria for stock option grants. The predetermined performance criteria determine the number of options that will ultimately vest and are based on the growth of the Company’s earnings and cash flows over the vesting period of the respective award. The number of options that will ultimately vest may range from 0% to 200% of the base award. Vesting occurs over a four-year period, but cannot exceed 25% of the base award in each of the three years following the grant date. The Company’s policy is to grant options with

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	exercise prices at then-current fair market value. The annual activity of the Company’s common stock option plans consisted of:

	(*)	Not meaningful.

	(a)	In 2005 and 2004, reflects the maximum number of options assuming achievement of all performance and time vesting criteria.
	(b)	As a result of the spin-off of PHH, the closing price of Cendant common stock was adjusted downward by $1.10 on January 31, 2005. Additionally, the Company granted incremental options to achieve a balance of 1.04249 options outstanding subsequent to the spin-off for each option outstanding prior to the spin-off. The exercise price of each option was also adjusted downward by a proportionate value.

	The Company records pre-tax compensation expense related to the issuance of stock options to its employees over the vesting period of the award and based on the estimated number of options the Company believes it will ultimately provide. During 2005, 2004 and 2003, the Company recorded $10 million, $4 million and $1 million, respectively, of pre-tax compensation expense within general and administrative expenses related to the stock options issued subsequent to January 1, 2003.
	The table below summarizes information regarding the Company’s outstanding and exercisable stock options as of December 31, 2005:

	As a result of the contemplated separation plan, approximately 128 million of the options outstanding at December 31, 2005 are expected to be accelerated and converted into options of the new companies based upon the pro rata market values of each new company. An additional one million options are expected to be cancelled in connection with the plan. The actual options to be accelerated, converted and cancelled will be contingent upon the options outstanding balance at the date of each respective spin-off.
	The weighted-average grant-date fair value of Cendant common stock options granted in the normal course of business during 2005, 2004 and 2003 was $5.89, $6.90 and $5.19, respectively. The weighted-average grant-date fair value of Cendant common stock options granted in connection with acquisitions

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	made during 2004 and 2003 was $9.49 and $3.89, respectively. No options were granted in connection with acquisitions made in 2005. The fair values of these stock options are estimated on the dates of grant using the Black-Scholes option-pricing model with the following weighted average assumptions for Cendant common stock options granted in 2005, 2004 and 2003:

RSUs granted by the Company entitle the employee to receive one share of Cendant common stock upon vesting. RSUs granted in 2003 vest ratably over a four-year term. In 2004, the Company adopted performance and time vesting criteria for RSU grants. The predetermined performance criteria determine the number of RSUs that will ultimately vest and are based on the growth of the Company’s earnings and cash flows over the vesting period of the respective award. The number of RSUs that will ultimately vest may range from 0% to 200% of the base award. Vesting occurs over a four-year period, but cannot exceed 25% of the base award in each of the three years following the grant date. The annual activity related to the Company’s RSU plan consisted of:

	(*)	Not meaningful.

	(a)	In 2004 and 2005, reflects the maximum number of RSUs assuming achievement of all performance and time vesting criteria.

	(b)	As a result of the spin-off of PHH, the closing price of Cendant common stock was adjusted downward by $1.10 on January 31, 2005. In order to provide an equitable adjustment to holders of its RSUs, the Company granted incremental RSUs to achieve a balance of 1.0477 RSUs outstanding subsequent to the spin-off for each RSU outstanding prior to the spin-off.

	During 2005, 2004 and 2003, the Company recorded pre-tax compensation expense in connection with these RSUs of (i) $61 million, $37 million and $13 million, respectively, included within general and administrative expenses, and (ii) $3 million, $7 million and $2 million, respectively, included within discontinued operations. The related deferred compensation balance is recorded on the Company’s Consolidated Balance Sheets as a reduction to additional paid-in capital and approximated $440 million and $301 million as of December 31, 2005 and 2004, respectively. The Company will amortize the deferred compensation balance as of December 31, 2005 to expense over the remaining vesting periods of the respective RSUs and based on the estimated performance goals of the award the Company believes it will ultimately achieve. Currently, such amortization expense is predicated on the base award.
	As a result of the contemplated separation plan, approximately 13 million of the RSUs outstanding at December 31, 2005 are expected to convert into shares of the new Real Estate Services, Hospitality

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	Services, Travel Distribution and Vehicle Rental companies based upon the pro rata market values of each new company. An additional 10 million RSUs are expected to be cancelled in connection with the separation plan.

	The effect on net income and earnings per share for 2004 and 2003 if the Company had applied the fair value based method to all employee stock awards granted (including those granted prior to January 1, 2003 for which the Company has not recorded compensation expense) is as follows:

	As of January 1, 2005, the Company recorded compensation expense for all outstanding employee stock awards; accordingly, pro forma information is not presented subsequent to December 31, 2004.

The Company is also authorized to sell up to 8.5 million shares of its CD common stock to eligible employees under its current non-compensatory employee stock purchase plan (“ESPP”), which expires in March 2006. Under the terms of the ESPP, employees may authorize the Company to withhold up to 10% of their compensation from each paycheck for the purchase of CD common stock. For amounts withheld during 2005, 2004 and 2003, the purchase price of the stock was calculated as 95% of the fair market value of CD common stock as of the first day of each month. During 2005, the Company issued approximately 0.5 million shares under the ESPP, bringing the cumulative issuances to approximately 4.6 million shares. As of December 31, 2005, approximately 3.9 million shares were available for issuance under the ESPP.

In 2002, the Company formed Two Flags Joint Venture LLC (“Two Flags”) through the contribution of its domestic Days Inn trademark and related license agreements. The Company did not contribute any other assets to Two Flags. The Company then sold 49.9999% of Two Flags to Marriott International, Inc. (“Marriott”) in exchange for the contribution to Two Flags of the domestic Ramada trademark and related license agreements. The Company retained a 50.0001% controlling equity interest in Two Flags. Both Marriott and the Company had the right, but were not obligated, to cause the sale of Marriott’s interest at any time after March 1, 2004 for approximately $200 million, which represented the projected fair market value of Marriott’s interest at such time. On April 1, 2004, the Company exercised its right to purchase Marriott’s interest in Two Flags for approximately $200 million. In connection with such transaction, the Company assumed a note payable of approximately $200 million, which was paid in

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	September 2004. As a result, the Company now owns 100% of Two Flags and has exclusive rights to the domestic Ramada and Days Inn trademarks and the related license agreements.
	Prior to April 1, 2004, the Company consolidated Two Flags and, as a result, Marriott’s equity interest in Two Flags, which approximated $100 million as of December 31, 2003, was recorded as minority interest on the Company’s Consolidated Balance Sheet. Pursuant to the terms of the venture, the Company and Marriott shared income from Two Flags on a substantially equal basis. For the period January 1, 2004 through April 1, 2004 (the date on which the Company purchased Marriott’s interest) and for the year ended December 31, 2003, the Company recorded pre-tax minority interest expense of $6 million and $25 million, respectively, in connection with Two Flags.

21.	Employee Benefit Plans

The Company sponsors several defined contribution savings plans that provide certain eligible employees of the Company an opportunity to accumulate funds for retirement. The Company matches the contributions of participating employees on the basis specified by the plans. The Company’s cost for contributions to these plans was $69 million, $73 million and $65 million during 2005, 2004 and 2003, respectively.

The Company sponsors domestic non-contributory defined benefit pension plans, which cover certain eligible employees. The majority of the employees participating in these plans are no longer accruing benefits. Additionally, the Company sponsors contributory defined benefit pension plans in certain foreign subsidiaries with participation in the plans at the employees’ option. Under both the domestic and foreign plans, benefits are based on an employee’s years of credited service and a percentage of final average compensation or as otherwise described by the plan. As of December 31, 2005 and 2004, the aggregate projected benefit obligation of these plans was $561 million and $549 million, respectively, and the aggregate fair value of the plans’ assets was $395 million and $383 million, respectively. Accordingly, the plans were underfunded by $166 million at both December 31, 2005 and 2004. However, the net pension liability recorded by the Company (primarily as a component of other non-current liabilities) as of December 31, 2005 and 2004 approximated $157 million and $160 million, respectively, of which approximately $131 million and $112 million, as of December 31, 2005 and 2004, respectively, represents additional minimum pension liability recorded as a charge to other comprehensive income. The Company’s policy is to contribute amounts sufficient to meet minimum funding requirements as set forth in employee benefit and tax laws plus such additional amounts the Company determines to be appropriate. During 2005, 2004 and 2003, the Company recorded pension expense of $11 million, $9 million and $16 million, respectively.

The Company also maintains post-retirement health and welfare plans for certain domestic subsidiaries. As of December 31, 2005 and 2004, the related projected benefit obligation, which was fully accrued for on the Company’s Consolidated Balance Sheets (included primarily within other non-current liabilities), was $19 million and $16 million, respectively. The expense the Company recorded in 2005 related to these plans was not significant. During 2004, the Company recorded post-retirement income of $40 million from plan amendments adopted in 2003. During 2003, the Company recorded post-retirement income of $18 million (including $23 million of post-retirement income resulting from plan amendments, partially offset by $5 million of expense) related to these plans. The $23 million of post-retirement income recorded in 2003 (discussed above) resulted from amendments made to the plan whereby coverage for all retirees over age 65 and for certain employees under the age of 50 was eliminated and the participant premiums were increased. All post-retirement income (expense) is recorded within general and administrative expenses on the Company’s Consolidated Statements of Income.

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22.	Financial Instruments
	RISK MANAGEMENT

	Following is a description of the Company’s risk management policies.
	Foreign Currency Risk

	The Company uses foreign currency forward contracts to manage its exposure to changes in foreign currency exchange rates associated with its foreign currency denominated receivables and forecasted royalties, forecasted earnings of foreign subsidiaries and forecasted foreign currency denominated acquisitions. The Company primarily hedges its foreign currency exposure to the British pound, Canadian dollar, Australian dollar and Euro. The majority of forward contracts utilized by the Company do not qualify for hedge accounting treatment under SFAS No. 133. The fluctuations in the value of these forward contracts do, however, largely offset the impact of changes in the value of the underlying risk that they are intended to economically hedge. Forward contracts that are used to hedge certain forecasted third party receipts and disbursements up to 12 months are designated and do qualify as cash flow hedges. The amount of gains or losses reclassified from other comprehensive income to earnings resulting from ineffectiveness or from excluding a component of the forward contracts’ gain or loss from the effectiveness calculation for cash flow hedges during 2005, 2004 and 2003 was not material, nor is the amount of gains or losses the Company expects to reclassify from other comprehensive income to earnings over the next 12 months.
	Interest Rate Risk

	Debt. The debt used to finance much of the Company’s operations is also exposed to interest rate fluctuations. The Company uses various hedging strategies and derivative financial instruments to create an appropriate mix of fixed and floating rate assets and liabilities. Derivative instruments currently used in these hedging strategies include swaps and instruments with purchased option features. The derivatives used to manage the risk associated with the Company’s fixed rate debt were designated as either fair value hedges or freestanding derivatives. The fair value hedges were perfectly effective resulting in no net impact on the Company’s consolidated results of operations during 2005, 2004 and 2003, except to create the accrual of interest expense at variable rates. In 2005, the freestanding derivatives, resulted in $12 million of expenses to the Company’s consolidated results of operations. During 2004 and 2003, these derivatives had a nominal impact on the Company’s results of operations. During 2004 and 2003, the Company terminated certain of its fair value hedges, which resulted in cash gains (losses) of ($9) million and $200 million, respectively. Such gains (losses) are deferred and being recognized over the lives of the formerly hedged items as a component of interest expense. During 2005, 2004 and 2003, the Company recorded $32 million, $33 million and $50 million, respectively, of such amortization.
	The derivatives used to manage the risk associated with the Company’s floating rate debt included freestanding derivatives and derivatives designated as cash flow hedges. In connection with its cash flow hedges, the Company recorded net gains of $39 million, $31 million and $36 million during 2005, 2004 and 2003, respectively, to other comprehensive income. The after-tax amount of gains reclassified from other comprehensive income to earnings resulting from discontinuance of cash flow hedges, ineffectiveness or from excluding a component of the derivatives’ gain or loss from the effectiveness calculation for cash flow hedges was $11 million and $8 million during 2005 and 2004, respectively. Such gains or losses were insignificant in 2003. The amount of losses the Company expects to reclassify from other comprehensive income to earnings during the next 12 months is not material. In 2005, these freestanding derivatives resulted in a $12 million gain on the Company’s consolidated results of operations. In 2004, these freestanding derivatives had a nominal impact on the Company’s consolidated results of operations. In 2003, the Company recorded losses of $9 million related to freestanding derivatives.
	Mortgage Servicing Rights. The Company’s mortgage servicing rights asset was subject to substantial interest rate risk as the mortgage notes underlying the MSR asset permit the borrower to prepay the loan. Therefore, the value of the MSR asset tended to diminish in periods of declining interest rates (as

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	prepayments increase) and increase in periods of rising interest rates (as prepayments decrease). The Company used a combination of derivative instruments (including option contracts and interest rate swaps) and other investment securities to offset potential changes in fair value on its MSR asset that could affect reported earnings. These derivatives were designated as freestanding derivatives in 2004 and as either freestanding derivatives or fair value hedging instruments in 2003, and recorded at fair value with changes in fair value recorded to current earnings. The changes in fair value for the hedged portion of the MSR asset in 2003 were also recorded to current earnings.
	During 2005, 2004 and 2003, the net impact of the Company’s derivative activity related to its MSR asset after giving effect to the offsetting changes in fair value of the MSR asset was a gain of $83 million, $117 million and $163 million, respectively. The 2003 amount consisted of gains of $155 million to reflect the ineffective portion of the fair value hedges and gains of $8 million resulting from the component of the derivatives’ fair value excluded from the assessment of effectiveness (as such amount relates to freestanding derivatives).
	Other Mortgage Related Assets. The Company’s other mortgage-related assets were subject to interest rate risk created by (i) its commitments to finance mortgages to borrowers who had applied for loan funding and (ii) loans held in inventory awaiting sale into the secondary market. The Company used derivative instruments (including futures, options and forward delivery contracts) to economically hedge its commitments to fund mortgages. Commitments to fund mortgages and related hedges were classified and accounted for as freestanding derivatives. Accordingly, these positions were recorded at fair value with changes in fair value recorded to current earnings and generally offset the fair value changes recorded relating to the underlying assets. During 2005, 2004 and 2003, the net impact of these freestanding derivatives was a net gain (loss) of $(4) million, $5 million and ($10) million, respectively. Such amounts were recorded within net revenues in the Consolidated Statements of Income.
	Interest rate and price risk stemming from loans held in inventory awaiting sale into the secondary market (which were classified on the Company’s Consolidated Balance Sheets as mortgage loans held for sale) were sometimes hedged with mortgage forward delivery contracts. These forward delivery contracts fixed the forward sales price which would be realized in the secondary market and thereby substantially eliminated the interest rate and price risk to the Company. Such forward delivery contracts were either classified and accounted for as fair value hedges or freestanding derivatives. During 2005, 2004 and 2003, the net impact of these derivatives, after giving effect to changes in fair value of the underlying loans, was gains (losses) of ($3) million, $17 million and ($20) million, respectively. Such amounts were recorded within net revenues on the Consolidated Statements of Income.

	The Company is exposed to counterparty credit risks in the event of nonperformance by counterparties to various agreements and sales transactions. The Company manages such risk by evaluating the financial position and creditworthiness of such counterparties and by requiring collateral in certain instances in which financing is provided. The Company mitigates counterparty credit risk associated with its derivative contracts by monitoring the amount for which it is at risk with each counterparty to such contracts, periodically evaluating counterparty creditworthiness and financial position, and where possible, dispersing its risk among multiple counterparties.
	As of December 31, 2005, there were no significant concentrations of credit risk with any individual counterparty or groups of counterparties other than risks related to the Company’s repurchase agreements with automobile manufacturers (see Note 2—Summary of Significant Accounting Policies) and airline customers of the Company’s Travel Distribution Services segment. Concentrations of credit risk associated with receivables are considered minimal due to the Company’s diverse customer base. With the exception of the financing provided to customers of its timeshare business, the Company does not normally require collateral or other security to support credit sales.

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The fair value of financial instruments is generally determined by reference to market values resulting from trading on a national securities exchange or in an over-the-counter market. In cases where quoted market prices are not available, fair value is based on estimates using present value or other valuation techniques, as appropriate. The carrying amounts of cash and cash equivalents, restricted cash, available-for-sale securities, accounts receivable, program cash, relocation receivables and accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The carrying amounts and estimated fair values of all other financial instruments at December 31, are as follows:

	(*)	Derivative instruments in gain (loss) positions.

23.	Segment Information

The reportable segments presented below represent the Company’s operating segments for which separate financial information is available and which is utilized on a regular basis by its chief decision maker to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its operating segments. Management evaluates the operating results of each of its reportable segments based upon revenue and “EBITDA,” which is defined as 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. The Company’s presentation of EBITDA may not be comparable to similar measures used by other companies.

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	(a)	Inter-segment net revenues were not significant to the net revenues of any one segment.

	(b)	Excludes assets of discontinued operations.

	(c)	Includes the results of operations of the Company’s non-strategic businesses, unallocated corporate overhead and the elimination of transactions between segments.

	Provided below is a reconciliation of EBITDA to income before income taxes and minority interest.

	The geographic segment information provided below is classified based on the geographic location of the Company’s subsidiaries.

	(*)	Excludes assets of discontinued operations.

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24.	Spin-off of PHH Corporation

	As previously discussed, on January 31, 2005, the Company completed the spin-off of its former mortgage, fleet leasing and appraisal businesses in a tax-free distribution to the Company’s stockholders of one share of PHH common stock per every twenty shares of Cendant common stock held on January 19, 2005. As a result, the Company’s total stockholders’ equity was reduced by approximately $1.65 billion during first quarter 2005 (see the Consolidated Statement of Stockholders’ Equity).
	Pursuant to SFAS No. 144, the Company was required to perform an impairment analysis upon completion of the PHH spin-off. Accordingly, the Company recorded a non-cash impairment charge of $488 million in first quarter 2005, to reflect the difference between PHH’s carrying value and PHH’s initial market value, as determined by the average trading price of PHH common stock on February 1, 2005. The charge was recorded as a reduction to net income with an offsetting increase to retained earnings since the impaired assets had been disposed of on January 31, 2005. Of the $488 million total charge, approximately $180 million ($0.17 per diluted share) was allocated to the mortgage business and, therefore, recorded within continuing operations. The remaining charge, approximately $308 million ($0.29 per diluted share), was allocated to the fleet leasing and appraisal businesses and, therefore, recorded within discontinued operations. There were no tax benefits recorded in connection with these charges as such charges are not tax deductible.
	Similarly, the Company incurred $7 million of transaction costs during first quarter 2005 associated with the PHH spin-off, of which $3 million was allocated to continuing operations (which is recorded within the restructuring and transaction-related costs line item on the Consolidated Statement of Income within the Mortgage Services segment) and $4 million was allocated to discontinued operations (which is recorded within the PHH valuation and transaction-related charges line item on the Company’s Consolidated Statement of Income). There were no tax benefits recorded in connection with these charges as such charges are not tax deductible.
	The account balances and activities of the Company’s former fleet leasing and appraisal businesses, as well as the $308 million impairment charge described above and $4 million of transaction costs also described above, have been presented as discontinued operations (see Note 3—Discontinued Operations for summary financial data for these entities). However, as previously discussed, the Company’s mortgage business cannot be classified as a discontinued operation.
	The activity in the Company’s capitalized MSR asset prior to the spin-off consisted of:

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	(a)	Represents activity through January 31, 2005 (date of PHH spin-off).

	(b)	Represents changes in estimates of interest rates and borrower prepayment behavior, the after tax amount of which is $123 million and the diluted effect of which is $0.12 per share.

	(c)	Represents changes in estimates of interest rates and borrower prepayment behavior, the after tax amount of which was $115 million and the diluted effect of which was $0.11 per share.

The MSR asset was subject to substantial interest rate risk as the mortgage notes underlying the asset permitted the borrowers to prepay the loans. The Company primarily used a combination of derivative instruments to offset expected changes in fair value of its MSR asset that could affect reported earnings. Beginning in 2004, the Company designated the full change in fair value of its MSR asset as the hedged risk and, as a result, discontinued hedge accounting treatment until such time that the documentation required to support the assessment of hedge effectiveness on a full fair value basis could be completed. During 2005 and 2004, all of the derivatives associated with the MSR asset were designated as freestanding derivatives. The net activity in the Company’s derivatives related to mortgage servicing rights consisted of:

	(a)	Represents activity through January 31, 2005 (date of PHH spin-off).

	(b)	The net balance represents the gross asset of $316 million (recorded within other assets under management programs on the accompanying Consolidated Balance Sheet) net of the gross liability of $231 million (recorded within other liabilities under management programs on the accompanying Consolidated Balance Sheet).

	(c)	The net balance represents the gross asset of $79 million (recorded within other assets under management programs on the accompanying Consolidated Balance Sheet) net of the gross liability of $19 million (recorded within other liabilities under management programs on the accompanying Consolidated Balance Sheet).

Prior to the spin-off of PHH, the Company sold residential mortgage loans in securitization transactions typically retaining one or more of the following: servicing rights, interest-only strips, principal-only strips and/or subordinated interests. Key economic assumptions used during 2004 and 2003 to measure the fair value of the Company’s retained interests in mortgage loans at the time of the securitization were as follows (sales during 2005 prior to spin-off were not significant):

	(*)	Includes interest-only strips, principal-only strips and subordinated interests.

	As discussed in Note 15—Debt Under Management Programs and Borrowing Arrangements, the Company sold financial assets to Bishop’s Gate, prior to its consolidation thereof on July 1, 2003. The cash flow activity presented below covers the period up to and including the date of consolidation of

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	Bishop’s Gate in addition to cash flow activity resulting from the Company’s securitization of mortgage loans directly into the secondary market, which was insignificant for the period January 1 through January 31, 2005 (the date of spin-off).

	(a)	Represents cash flows received on retained interests other than servicing fees.
	(b)	The purchase of delinquent or foreclosed loans was primarily at the Company’s option and not based on a contractual relationship with the securitization trust.

	During 2005 (through January 31, 2005), 2004 and 2003, the Company recognized pre-tax gains of $15 million, $228 million and $850 million, respectively, related to the securitization of residential mortgage loans. Such gains are recorded within net revenues on the Company’s Consolidated Statements of Income.
	In connection with the spin-off, the Company entered into a mortgage origination venture with PHH to continue to participate in the earnings generated from originating mortgages for customers of its real estate brokerage and relocation businesses. PHH manages this venture and retains all risk related to the servicing asset. During 2005, the venture’s results of operations were not material as the venture did not become operational until fourth quarter 2005.

25.	Selected Quarterly Financial Data—(unaudited)

	Provided below is selected unaudited quarterly financial data for 2005 and 2004.
	The underlying diluted per share information is calculated from the weighted average common and common stock equivalents outstanding during each quarter, which may fluctuate based on quarterly income levels, market prices and share repurchases. Therefore, the sum of the quarters’ per share information may not equal the total year amounts presented on the Consolidated Statements of Income.
	The Vehicle Rental revenue amounts presented below for all periods (with the exception of fourth quarter 2005) have been revised to reflect a gross reporting presentation for vehicle licensing and airport concession fees (see Note 2 — Summary of Significant Accounting Policies for more detailed information). The fourth quarter 2005 amount was originally reported on a gross basis; therefore, revision to this period was not necessary.

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	(a)	Includes a $180 million non-cash valuation charge associated with the PHH spin-off (see Note 24-Spin-off of PHH Corporation) and the reversal of $73 million of accrued interest associated with the resolution of amounts due under a litigation settlement reached in 1999.

	(b)	Includes an impairment charge of $425 million ($256 million, after tax) associated with the Company’s travel distribution businesses (see Note 2—Summary of Significant Accounting Policies) and $16 million of separation costs.

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	(*)	Income before income taxes and minority interest for fourth quarter includes a $60 million credit associated with previously established liabilities relating to severance and other termination benefits for which the Company no longer believes it is liable.

	From July 2, 2001 to January 30, 2004, TRL Group operated membership-based clubs and programs and other incentive-based loyalty programs through an outsourcing arrangement with Cendant whereby Cendant licensed TRL Group the right to market products to new members utilizing certain assets of Cendant’s individual membership business. Accordingly, Cendant collected membership fees from, and was obligated to provide services to, members of its individual membership business that existed as of July 2, 2001, including their renewals, and TRL Group provided fulfillment services for these members in exchange for a servicing fee paid by Cendant. Furthermore, TRL Group collected the membership fees from, and was obligated to provide membership benefits to, any members who joined the membership-based clubs and programs and all other incentive programs subsequent to July 2, 2001 and recognized the related revenue and expenses. Accordingly, similar to Cendant’s franchise businesses, Cendant received a royalty from TRL Group on all revenue generated by TRL Group’s new members (those who joined TRL’s clubs as a result of TRL Group’s marketing efforts occurring between July 2001 and January 2004). The assets licensed to TRL Group included various tradenames, trademarks, logos, service marks and other intellectual property relating to its membership business.
	During 2003, Cendant performed a strategic review of the TRL Group membership business, Cendant’s existing membership business and Cendant’s loyalty/insurance marketing business, which provided enhancement packages for financial institutions and marketing for accidental death and dismemberment insurance and certain other insurance products. Upon completion of such review, Cendant concluded that it could achieve certain revenue and expense synergies by combining its loyalty/insurance marketing business with the new-member marketing performed by TRL Group. Additionally, as a result of the adoption of FIN 46, the Company had been consolidating the results of TRL Group since July 1, 2003 even though it did not have managerial control of the entity. Therefore, in an effort to achieve the revenue and expense synergies identified in Cendant’s strategic review and to obtain managerial control over an entity whose results were being consolidated, Cendant and TRL Group agreed to amend their contractual relationship by terminating the contractual rights, intellectual property license and third party administrator arrangements that Cendant had previously entered into with TRL Group in 2001.
	In connection with this new relationship, Cendant (i) terminated leases of Cendant assets by TRL Group, (ii) terminated the original third party administration agreement, (iii) entered into a new third party administration agreement whereby Cendant performs fulfillment services for TRL Group, (iv) leased certain TRL Group fixed assets from TRL Group, (v) offered employment to substantially all of TRL Group’s employees and (vi) entered into other incidental agreements. These contracts were negotiated on an arm’s-length basis and have terms that Cendant’s management believes are reasonable from an economic standpoint and consistent with what management would expect from similar arrangements with

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	non-affiliated parties. None of these agreements had an impact on the Company’s Consolidated Financial Statements as the Company continues to consolidate TRL Group subsequent to this transaction. In connection with the transaction, the parties agreed to liquidate and dissolve TRL Group in an orderly fashion when and if the number of TRL Group members decreased below 1.3 million, provided that such dissolution may not occur prior to January 2007. Cendant paid $13 million in cash on January 30, 2004 for the contract termination, regained exclusive access to the various tradenames, trademarks, logos, service marks and other intellectual property that it had previously licensed to TRL Group for its use in marketing to new members and had managerial control of TRL Group through its majority representation on the TRL Group board of directors. TRL Group continued to service and collect membership fees from its members to whom it marketed through January 29, 2004, including their renewals. Cendant provided fulfillment services (including collecting cash, paying commissions, processing refunds, providing membership services and benefits and maintaining specified service level standards) for TRL Group’s members in exchange for a servicing fee. TRL Group no longer had the ability to market to new members; rather, Cendant marketed to new members under the Trilegiant tradename.
	On January 30, 2004, TRL Group had net deferred tax assets of approximately $121 million, which were mainly comprised of net operating loss carryforwards expiring in years 2021, 2022 and 2023. These deferred tax assets were fully reserved for by TRL Group through a valuation allowance, as TRL Group had not been able to demonstrate future profitability due to the large marketing expenditures it incurred (new member marketing has historically been TRL Group’s single largest expenditure). However, given the fact that TRL Group would no longer incur marketing expenses (as they no longer have the ability to market to new members as a result of this transaction), TRL Group determined that it was more likely than not that it would generate sufficient taxable income (as it would continue to recognize revenue from TRL Group’s existing membership base in the form of renewals and the lapsing of the refund privilege period) to utilize its net operating loss carryforwards within the statutory periods. Accordingly, TRL Group reversed the entire valuation allowance of $121 million in January 2004, which resulted in a reduction to the Company’s tax provision relating to discontinued operations during 2004 of $121 million, with a corresponding increase in consolidated net income. The $13 million cash payment the Company made to TRL Group was also recorded by the Company as a component of its discontinued operations’ provision for income taxes line item on the Consolidated Statement of Income for 2004 and partially offsets the $121 million reversal of TRL Group’s valuation allowance.
	Immediately following consummation of this transaction, Cendant owned approximately 43% of TRL Group on a fully diluted basis. On October 17, 2005, Cendant completed the sale of the Marketing Services division, including TRL Group, to Affinion for approximately $1.8 billion, of which approximately $1.7 billion represented cash (see Note 3 — Discontinued Operations for more detailed information).
	During the period from January 1, 2004 through January 30, 2004 (the date on which Cendant executed various contracts that provided it managerial control of TRL Group), TRL Group contributed revenues of $44 million and expenses of $39 million (on a stand-alone basis before eliminations of intercompany entries in consolidation) to discontinued operations.
	For the period July 1, 2003 through December 31, 2003 (post consolidation), TRL Group contributed revenues and expenses of $241 million and $256 million, respectively (on a stand-alone basis before eliminations of intercompany entries in consolidation), to discontinued operations. The consolidation of TRL Group resulted in a non-cash charge of $293 million ($0.27 per diluted share) recorded on July 1, 2003 as a cumulative effect of the accounting change. The results for 2003 further reflect revenues and expenses recorded by the Company within discontinued operations for the period January 1, 2003 through June 30, 2003 (prior to the consolidation of TRL Group) in connection with the outsourcing arrangement. The Company recorded revenues of $33 million (representing royalties, licensing and leasing fees and travel agency fees) and net expenses of $76 million (relating to fulfillment services and the amortization of the marketing advance made in 2001) within discontinued operations for such period.

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	On January 6, 2006, the Company completed the acquisition of multiple title companies in Texas in a single transaction for $93 million. These entities provide title and closing services, including title searches, title insurance, home sale escrow and other closing services.

	On January 19, 2006, the Company issued $600 million of asset-backed notes under its vehicle rental program. The issuance consisted of five-year floating rate notes currently bearing interest at LIBOR plus 22 basis points.

	On February 9, 2006, the Company’s Board of Directors declared a quarterly cash dividend of $0.11 per common share payable on March 14, 2006 to stockholders of record as of February 27, 2006.

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Exhibit No.				Description
3.1				Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Form 10-Q for the quarterly period ended March 31, 2004).
3.2				Amended and Restated By-Laws of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated October 20, 2004).
4.1				Form of Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).
4.2				Indenture, dated as of February 24, 1998, between the Company and The Bank of Nova Scotia Trust Company of New York, as Trustee (Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-3, File No. 333-45227, filed on January 29, 1998).
4.3				Form of 67/8% Note due 2006 (Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-4 filed on November 2, 2001).
4.4				Indenture, dated as of January 13, 2003, between Cendant Corporation and The Bank of Nova Scotia Trust Company of New York, as Trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated January 17, 2003).
4.5				Form of 6.250% Senior Note due 2008 and Form of 7.375% Senior Note due 2013 (Incorporated by reference to Exhibits 4.2 and 4.3, respectively, to the Company’s Current Report on Form 8-K dated January 17, 2003).
4.6				Form of 6.25% Senior Note due 2010 and Form of 7.125% Senior Note due 2015 (Incorporated by reference to Exhibits 4.2 and 4.3, respectively, to the Company’s Current Report on Form 8-K dated March 13, 2003).
4.7				Fourth Supplemental Indenture, dated as of July 27, 2001, to the Indenture, dated as of February 24, 1998, between Cendant Corporation and The Bank of Nova Scotia Trust Company of New York, as Trustee (pursuant to which the 4.89% Senior Notes (formerly the 6.75% Senior Notes making up a portion of the Upper DECS) were issued) (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated August 1, 2001) (Includes Form of 4.89% Note).
10.1(a)				Amended and Extended Employment Agreement dated as of July 1, 2002 by and between Cendant Corporation and Henry R. Silverman (Incorporated by reference to Exhibit 10.73 to the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2001 dated November 4, 2002).
10.1(b)				First Amendment to Amended and Extended Employment Agreement of Henry R. Silverman, dated July 28, 2003 (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003 dated August 7, 2003).
10.1(c)				Second Amendment to Amended and Extended Employment Agreement dated August 20, 2004 by and between Cendant Corporation and Henry R. Silverman (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 24, 2004).
10.1(d)				Third Amendment to Amended and Extended Employment Agreement of Henry R. Silverman dated January 21, 2005 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 26, 2005).
10.2(a)				Agreement with Stephen P. Holmes, dated as of May 27, 1997 (Incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-4, Registration No. 333-34517, dated August 28, 1997).

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Exhibit No.				Description
10.2(b)				Amendment to Agreement with Stephen P. Holmes, dated January 11, 1999 (Incorporated by reference to Exhibit 10.2(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998 dated March 29, 1999, File No. 1-10308).
10.2(c)				Amendment to Agreement with Stephen P. Holmes, dated January 3, 2001 (Incorporated by reference to Exhibit 10.2(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001 dated April 1, 2002).
10.2(d)				Letter Agreement of Stephen P. Holmes, dated May 2, 2003 (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003 dated August 7, 2003).
10.3(a)				Agreement with James E. Buckman, dated as of May 27, 1997 (Incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-4, Registration No. 333-34517, dated August 28, 1997).
10.3(b)				Amendment to Agreement with James E. Buckman, dated January 11, 1999 (Incorporated by reference to Exhibit 10.4(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998 dated March 29, 1999, File No. 1-10308).
10.3(c)				Amendment to Agreement with James E. Buckman, dated January 3, 2001 (Incorporated by reference to Exhibit 10.3(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001 dated April 1, 2002).
10.3(d)				Letter Agreement of James E. Buckman, dated May 2, 2003 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003 dated August 7, 2003).
10.4				Amended and Restated Employment Agreement of Richard Smith, dated June 30, 2004 (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 dated August 2, 2004).
10.5				Employment Agreement with Ronald L. Nelson, dated April 14, 2003 (Incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K dated April 16, 2003).
10.6(a)				1987 Stock Option Plan, as amended (Incorporated by reference to Exhibit 10.16 to the Company’s Form 10-Q for the quarterly period ended October 31, 1996 dated December 13, 1996, File No. 1-10308).
10.6(b)				Amendment to 1987 Stock Option Plan dated January 3, 2001 (Incorporated by reference to Exhibit 10.7(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).
10.7				Galileo International 1999 Equity and Performance Incentive Plan (Incorporated by reference to Galileo International, Inc.’s Registration Statement on Form S-8, File No. 333-77421, dated April 30, 1999).
10.8				Trendwest Resorts, Inc. 1997 Employee Stock Option Plan (Incorporated by reference to the Company’s Registration Statement on Form S-8, File No. 333-89686, dated June 3, 2002).
10.9(a)				1997 Stock Option Plan (Incorporated by reference to Exhibit 10.23 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended April 30, 1997 dated June 16, 1997, File No. 1-10308).
10.9(b)				Amendment to 1997 Stock Option Plan dated January 3, 2001 (Incorporated by reference to Exhibit 10.11(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).

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Exhibit No.				Description
10.9(c)				Amendment to 1997 Stock Option Plan dated March 19, 2002 (Incorporated by reference to Exhibit 10.11(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 dated March 5, 2003).
10.10(a)				1997 Stock Incentive Plan (Incorporated by reference to Appendix E to the Joint Proxy Statement/ Prospectus included as part of the Company’s Registration Statement on Form S-4, Registration No. 333-34517, dated August 28, 1997).
10.10(b)				Amendment to 1997 Stock Incentive Plan dated March 27, 2000 (Incorporated by reference to Exhibit 10.12(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).
10.10(c)				Amendment to 1997 Stock Incentive Plan dated March 28, 2000 (Incorporated by reference to Exhibit 10.12(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).
10.10(d)				Amendment to 1997 Stock Incentive Plan dated January 3, 2001 (Incorporated by reference to Exhibit 10.12(d) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).
10.11(a)				HFS Incorporated’s Amended and Restated 1993 Stock Option Plan (Incorporated by reference to Exhibit 4.1 to HFS Incorporated’s Registration Statement on Form S-8, Registration No. 33-83956).
10.11(b)				First Amendment to the Amended and Restated 1993 Stock Option Plan dated May 5, 1995 (Incorporated by reference to Exhibit 4.1 to HFS Incorporated’s Registration Statement on Form S-8, Registration No. 33-094756).
10.11(c)				Second Amendment to the Amended and Restated 1993 Stock Option Plan dated January 22, 1996 (Incorporated by reference to Exhibit 10.21(b) to HFS Incorporated’s Annual Report on Form 10-K for the year ended December 31, 1995, File No. 1-11402).
10.11(d)				Third Amendment to the Amended and Restated 1993 Stock Option Plan dated January 22, 1996 (Incorporated by reference to Exhibit 10.21(c) to HFS Incorporated’s Annual Report on Form 10-K for the year ended December 31, 1995, File No. 1-11402).
10.11(e)				Fourth Amendment to the Amended and Restated 1993 Stock Option Plan dated May 20, 1996 (Incorporated by reference to Exhibit 4.5 to HFS Incorporated’s Registration Statement on Form S-8, Registration No. 333-06733).
10.11(f)				Fifth Amendment to the Amended and Restated 1993 Stock Option Plan dated July 24, 1996 (Incorporated by reference to Exhibit 10.21(e) to HFS Incorporated’s Annual Report on Form 10-K for the year ended December 31, 1995, File No. 1-11402).
10.11(g)				Sixth Amendment to the Amended and Restated 1993 Stock Option Plan dated September 24, 1996 (Incorporated by reference to Exhibit 10.21(e) to HFS Incorporated’s Annual Report on Form 10-K for the year ended December 31, 1995, File No. 1-11402).
10.11(h)				Seventh Amendment to the Amended and Restated 1993 Stock Option Plan dated April 30, 1997 (Incorporated by reference to Exhibit 10.17(g) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997 dated March 31, 1998, File No. 1-10308).
10.11(i)				Eighth Amendment to the Amended and Restated 1993 Stock Option Plan dated May 27, 1997 (Incorporated by reference to Exhibit 10.17(h) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997 dated March 31, 1998, File No. 1-10308).
10.12(a)				1997 Employee Stock Plan (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8, Registration No. 333-45183, dated January 29, 1998).

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Exhibit No.				Description
10.12(b)				Amendment to 1997 Employee Stock Plan dated January 3, 2001 (Incorporated by reference to Exhibit 10.15(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 dated March 1, 2004).
10.13(a)				Cendant Corporation Deferred Compensation Plan (Incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998 dated March 29,1999, File No. 1-10308).
10.13(b)				First Amendment to Cendant Corporation Deferred Compensation Plan.
10.14				Amendment to Certain Stock Plans (Incorporated by reference to Exhibit 10.16(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 dated March 5, 2003).
10.15				1999 Broad-Based Employee Stock Option Plan, including the Third Amendment dated March 19, 2002, Second Amendment dated April 2, 2001 and First Amendment dated March 29, 1999 (Incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 dated March 5, 2003).
10.16				Amendment to Various Equity-Based Plans.
10.17				2004 Performance Metric Long Term Incentive Plan, as amended and restated as of July 19, 2005 (Incorporated by reference to Exhibit 10 to the Company’s Current Report on Form 8-K dated July 22, 2005).
10.18				Form of Award Agreement for the 2004 Performance Metric Long Term Incentive Plan and the 1997 Stock Option Plan (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated April 29, 2005).
10.19				Employee Retention Letter—LTIP Vesting (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 dated November 2, 2005).
10.20				Cendant Corporation 2003 Long-term Incentive Plan (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 dated August 2, 2004).
10.21				Cendant Corporation Executive Officer Supplemental Life Insurance Program (Incorporated by reference to Exhibit 10.76 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 dated March 1, 2004).
10.22				Five Year Competitive Advance and Revolving Credit Agreement dated as of November 22, 2004 among Cendant Corporation, as Borrower, the lenders referred to therein, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, and The Bank of Nova Scotia, Barclays Bank Plc, Calyon New York Branch and Citibank, N.A., as Co-Documentation Agents (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 23, 2004).
10.23				Three Year Asset-Linked Revolving Credit Agreement, dated as of June 17, 2004, among Cendant Corporation, as Borrower, the Lenders referred to therein, Bank of America, N.A., as Administrative Agent and Citicorp USA, Inc., as Syndication Agent, Banc of America Securities LLC and Citigroup Global Markets Inc., as Co-Lead Arrangers and Co-Bookrunners (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 dated August 2, 2004).
10.24				Cendant Amended and Restated 1999 Non-Employee Directors Deferred Compensation Plan (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated April 29, 2005).

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Exhibit No.				Description
10.25				First Amendment to Cendant Corporation 1999 Non-Employee Directors Deferred Compensation Plan, as Amended and Restated as of January 22, 2006.
10.26				Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 dated August 2, 2004).
10.27				Supplemental Indenture No. 1 dated as of December 23, 2005, between Cendant Rental Car Funding (AESOP) LLC, as Issuer and The Bank of New York, as Trustee, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 20, 2006).
10.28(a)				Amended and Restated Series 2004-1 Supplement dated as of March 29, 2005, among Cendant Rental Car Funding (AESOP) LLC, as Issuer, Cendant Car Rental Group, LLC (formerly known as Cendant Car Rental Group, Inc.), as Administrator, Mizuho Corporate Bank, Ltd., as Administrative Agent, Bayerische Landesbank New York Branch, as Syndication Agent, Calyon Cayman Islands Branch, as Documentation Agent, certain financial institutions, as Purchasers and The Bank of New York, as Trustee and Series 2004-1 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated March 31, 2005).
10.28(b)				Second Amendment dated as of December 23, 2005 to the Amended and Restated Series 2004-1 Supplement, dated as of March 29, 2005, among Cendant Rental Car Funding (AESOP) LLC, as Issuer, Cendant Car Rental Group, LLC (formerly known as Cendant Car Rental Group, Inc.), as Administrator, Mizuho Corporate Bank, Ltd., as Administrative Agent, Bayerische Landesbank New York Branch, as Syndication Agent, Calyon Cayman Islands Branch, as Documentation Agent, certain financial institutions, as Purchasers and The Bank of New York, as Trustee and Series 2004-1 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.
10.29(a)				Series 2005-1 Supplement dated as of February 25, 2005, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee and Series 2005-1 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 2, 2005).
10.29(b)				First Amendment dated as of December 23, 2005 to the Series 2005-1 Supplement dated as of February 25, 2005, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee and Series 2005-1 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.
10.30(a)				Series 2005-4 Supplement dated as of June 1, 2005, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee and as Series 2005-4 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 7, 2005).

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Exhibit No.				Description
10.30(b)				First Amendment dated as of December 23, 2005 to the Series 2005-4 Supplement dated as of June 1, 2005, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee and Series 2005-4 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC and The Bank of New York, as Trustee.
10.31				Series 2006-1 Supplement dated as of January 19, 2006, between Cendant Rental Car Funding (AESOP) LLC, as Issuer and The Bank of New York, as Trustee and as Series 2006-1 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated January 20, 2006).
10.32(a)				Second Amended and Restated Loan Agreement dated as of June 3, 2004, among AESOP Leasing L.P., as Borrower, Quartx Fleet Management, Inc., as a Permitted Nominee, PV Holding Corp., as a Permitted Nominee and Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Lender (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 dated August 2, 2004).
10.32(b)				First Amendment to the Second Amended and Restated Loan Agreement dated as of December 23, 2005, among AESOP Leasing L.P., as Borrower, Quartx Fleet Management, Inc., as a Permitted Nominee, PV Holding Corp., as Permitted Nominee and Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II LLC), as Lender (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 20, 2006).
10.33(a)				Second Amended and Restated Master Motor Vehicle Operating Lease Agreement dated as of June 3, 2004, between AESOP Leasing L.P., as Lessor and Cendant Rental Car Group, Inc., as Lessee and as Administrator (Incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 dated August 2, 2004).
10.33(b)				First Amendment to the Second Amended and Restated Master Motor Vehicle Operating Lease Agreement dated as of December 23, 2005, between AESOP Leasing L.P., as Lessor and Cendant Car Rental Group, LLC (formerly known as Cendant Car Rental Group, Inc.), as Lessee and as Administrator (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated January 20, 2006).
10.34				Second Amended and Restated Administration Agreement dated as of June 3, 2004, among Cendant Rental Car Funding (AESOP) LLC, AESOP Leasing, L.P., AESOP Leasing Corp. II, Avis Rent A Car System, LLC (formerly known as Avis Rent A Car System, Inc.), Budget Rent A Car System, Inc., Cendant Car Rental Group, LLC (formerly known as Cendant Car Rental Group, Inc.) and The Bank of New York, as Trustee.
10.35				Assignment and Assumption Agreement dated as of June 3, 2004, among Avis Rent A Car System, LLC (formerly known as Avis Rent A Car System, Inc.), Avis Group Holdings, LLC (formerly known as Avis Group Holdings, Inc.) and Cendant Car Rental Group, LLC (formerly known as Cendant Car Rental Group, Inc.)

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Exhibit No.				Description
10.36(a)				Amended and Restated Series 2000-2 Supplement dated as of June 29, 2001, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2000-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 4.24 to Avis Group Holdings, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2001 dated March 29, 2002).
10.36(b)				Fourth Amendment dated as of December 23, 2005 to the Amended and Restated Series 2000-2 Supplement dated as of June 29, 2001, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York as the Trustee and Series 2000-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer and The Bank of New York, as Trustee.
10.37(a)				Amended and Restated Series 2001-2 Supplement dated as of June 29, 2001, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2001-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 4.28 to Avis Group Holdings, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2001 dated March 29, 2002).
10.37(b)				Fourth Amendment dated as of December 23, 2005 to the Amended and Restated Series 2001-2 Supplement dated as of June 29, 2001, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2001-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer and The Bank of New York, as Trustee.
10.38(a)				Series 2002-1 Supplement dated as of July 25, 2002, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2002-1 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.4 to Avis Group Holdings, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2002 dated March 6, 2003).
10.38(b)				Third Amendment dated as of December 23, 2005 to the Series 2002-1 Supplement dated as of July 25, 2002, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2002-1 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer and The Bank of New York, as Trustee.
10.39(a)				Amended and Restated Series 2002-2 Supplement dated as of November 22, 2002, among Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, Cendant Car Rental Group, LLC (formerly known as Cendant Car Rental Group, Inc.), as assignee of Avis Rent A Car System, LLC (formerly known as Avis Rent A Car System, Inc.), as Servicer, JPMorgan Chase Bank, National Association (formerly known as JPMorgan Chase Bank), as Administrative Agent, certain CP Conduit Purchasers, certain Funding Agents, certain APA Banks, and The Bank of New York, as Trustee and Series 2002-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.6 to Avis Group Holdings, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2002 dated March 6, 2003).

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Table of Contents

Exhibit No.				Description
10.39(b)				Fourth Amendment dated as of November 30, 2005 to the Amended and Restated Series 2002-2 Supplement dated as of November 22, 2002, among Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, Avis Rent A Car System, LLC (formerly known as Avis Rent A Car System, Inc.), as Administrator, certain CP Conduit Purchasers, certain APA Banks and the Funding Agents named therein and The Bank of New York, as Trustee and Series 2002-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.
10.39(c)				Fifth Amendment dated as of December 23, 2005 to the Amended and Restated Series 2002-2 Supplement dated as of November 22, 2002, among Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, Avis Rent A Car System, LLC (formerly known as Avis Rent A Car System, Inc.), as Administrator, certain CP Conduit Purchasers, certain APA Banks and the Funding Agents named therein and The Bank of New York, as Trustee and Series 2002-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.
10.40(a)				Series 2003-1 Supplement dated as of January 28, 2003, among Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, Cendant Corporation, as Purchaser and The Bank of New York, as Trustee and Series 2003-1 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.12 to Avis Group Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003 dated May 14, 2003).
10.40(b)				Second Amendment dated as of December 23, 2005 to the Series 2003-1 Supplement dated as of January 28, 2003, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, Cendant Corporation, as Purchaser, and The Bank of New York, as Trustee and Series 2003-1 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.
10.40(c)				Third Amendment dated as of January 27, 2006 to the Series 2003-1 Supplement dated as of January 28, 2003, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, Cendant Corporation, as Purchaser, and The Bank of New York, as Trustee and Series 2003-1 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.
10.41(a)				Series 2003-2 Supplement dated as of March 6, 2003 between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2003-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.11 to Avis Group Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003 dated May 14, 2003).
10.41(b)				Second Amendment dated as of December 23, 2005 to the Series 2003-2 Supplement dated as of March 6, 2003, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2003-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer and The Bank of New York, as Trustee.

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Table of Contents

Exhibit No.				Description
10.42(a)				Series 2003-3 Supplement dated as of May 6, 2003, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2003-3 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.14 to Avis Group Holdings, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2003 dated March 23, 2004).
10.42(b)				Second Amendment dated as of December 23, 2005 to the Series 2003-3 Supplement dated as of May 6, 2003, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2003-3 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.
10.43(a)				Series 2003-4 Supplement dated as of June 19, 2003, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2003-4 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.2 to Avis Group Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003 dated August 13, 2003).
10.43(b)				Second Amendment dated as of December 23, 2005 to the Series 2003-4 Supplement dated as of June 19, 2003, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2003-4 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.
10.44(a)				Series 2003-5 Supplement dated as of October 9, 2003, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2003-5 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.41 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 dated March 1, 2004).
10.44(b)				Second Amendment dated as of December 23, 2005 to the Series 2003-5 Supplement dated as of October 9, 2003, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2003-5 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.
10.45(a)				Series 2004-2 Supplement dated as of February 18, 2004, among Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer and The Bank of New York, as Trustee and Series 2004-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004 dated May 3, 2004).
10.45(b)				Second Amendment dated as of December 23, 2005 to the Series 2004-2 Supplement dated as of February 18, 2004, between Cendant Rental Car Funding (AESOP) LLC (formerly known as AESOP Funding II L.L.C.), as Issuer, and The Bank of New York, as Trustee and Series 2004-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.

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Table of Contents

Exhibit No.				Description
10.46(a)				Series 2004-4 Supplement dated as of November 30, 2004, among Cendant Rental Car Funding (AESOP) LLC, as Issuer, Cendant Car Rental Group, LLC (formerly known as Cendant Car Rental Group, Inc.) as assignee of Avis Rent A Car System, LLC (formerly known as Avis Rent A Car System, Inc), as Servicer, JPMorgan Chase Bank, National Association (formerly known as JPMorgan Chase Bank), as Administrative Agent, certain CP Conduit Purchasers, certain Funding Agents, certain APA Banks, and The Bank of New York, as Trustee and Series 2002-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.
10.46(b)				First Amendment dated as of December 23, 2005 to the Series 2004-4 Supplement dated as of November 30, 2004, among Cendant Rental Car Funding (AESOP) LLC, as Issuer, Cendant Car Rental Group, LLC (formerly known as Cendant Car Rental Group, Inc.) as assignee of Avis Rent A Car System, LLC (formerly known as Avis Rent A Car System, Inc.), as Servicer, JPMorgan Chase Bank, National Association (formerly known as JPMorgan Chase Bank), as Administrative Agent, certain CP Conduit Purchasers, certain Funding Agents, certain APA Banks, and The Bank of New York, as Trustee and Series 2002-2 Agent, to the Second Amended and Restated Base Indenture dated as of June 3, 2004, between Cendant Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York, as Trustee.
10.47				Master Indenture and Servicing Agreement, dated as of August 29, 2002 and Amended and Restated as of November 14, 2005, by and among Cendant Timeshare Conduit Receivables Funding, LLC, as Issuer, Cendant Timeshare Resort Group-Consumer Finance, Inc., as Master Servicer, and Wachovia Bank, National Association, as Trustee and Collateral Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated November 17, 2005).
10.48				Series 2002-1 Supplement, dated as of August 29, 2002 and Amended and Restated as of November 14, 2005, to Master Indenture and Servicing Agreement, dated as of August 29, 2002, among Cendant Timeshare Conduit Receivables Funding, LLC, as Issuer, Cendant Timeshare Resort Group—Consumer Finance, Inc., as Master Servicer, and Wachovia Bank, National Association, as Trustee and Collateral Agent (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated November 17, 2005).
10.49				Master Loan Purchase Agreement, dated as of August 29, 2002 and Amended and Restated as of November 14, 2005, by and between Cendant Timeshare Resort Group-Consumer Finance, Inc., as Seller and Fairfield Resorts, Inc., as Co-Originator and Fairfield Myrtle Beach, Inc., as Co-Originator and Kona Hawaiian Vacation Ownership, LLC, as an Originator and Shawnee Development, Inc., as an Originator and Sea Gardens Beach and Tennis Resort, Inc., Vacation Break Resorts, Inc., Vacation Break Resorts at Star Island, Inc., Palm Vacation Group and Ocean Ranch Vacation Group, each as a VB Subsidiary and Palm Vacation Group and Ocean Ranch Vacation Group, each as VB Partnership and Sierra Deposit Company, LLC., as Purchaser (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated November 17, 2005).
10.50				Series 2002-1 Supplement, dated as of August 29, 2002 and Amended and Restated as of November 14, 2005, to Master Loan Purchase Agreement, dated as of August 29, 2002, by and between Cendant Timeshare Resort Group-Consumer Finance, Inc., as Seller, Fairfield Resorts, Inc., as Co-Originator, Fairfield Myrtle Beach, Inc., as Co-Originator, Kona Hawaiian Vacation Ownership, LLC, as an Originator, Shawnee Development, Inc., as an Originator, Sea Gardens Beach and Tennis Resort, Inc., Vacation Break Resorts, Inc., Vacation Break Resorts at Star Island, Inc., Palm Vacation Group and Ocean Ranch Vacation Group, each as a VB subsidiary, and Palm Vacation Group and Ocean Ranch Vacation Group, each as VB Partnership and Sierra Deposit Company, LLC, as Purchaser (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated November 17, 2005).

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Table of Contents

Exhibit No.				Description
10.51				Master Loan Purchase Agreement, dated as of August 29, 2002, Amended and Restated as of November 14, 2005, by and between Trendwest Resorts, Inc., as Seller and Sierra Deposit Company, LLC as Purchaser (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated November 17, 2005).
10.52				Series 2002-1 Supplement, dated as of August 29, 2002 and amended as of November 14, 2005 to the Master Loan Purchase Agreement dated as of August 29, 2002, by and between Trendwest Resorts, Inc., as Seller and Sierra Deposit Company, LLC, as Purchaser (Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K dated November 17, 2005).
10.53				Master Pool Purchase Agreement, dated as of August 29, 2002, amended and restated as of November 14, 2005, by and between, Sierra Deposit Company, LLC, as Depositor and Cendant Timeshare Conduit Receivables Funding, LLC, as Issuer (Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K dated November 17, 2005).
10.54				Indenture and Servicing Agreement dated as of March 31, 2003 by and among Sierra 2003-1 Receivables Funding Company, LLC, as Issuer and Fairfield Acceptance Corporation—Nevada**, as Servicer and Wachovia Bank, National Association, as Trustee and Wachovia Bank, National Association, as Collateral Agent (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003 dated May 9, 2003).
10.55				Indenture and Servicing Agreement dated as of December 5, 2003 by and among Sierra 2003-2 Receivables Funding Company, LLC, as Issuer and Fairfield Acceptance Corporation—Nevada**, as Servicer and Wachovia Bank, National Association, as Trustee and Wachovia Bank, National Association, as Collateral Agent (Incorporated by reference to Exhibit 10.70 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 dated March 1, 2004).
10.56				Indenture and Servicing Agreement, dated as of May 27, 2004, by and among Cendant Timeshare 2004-1 Receivables Funding, LLC, as Issuer, and Fairfield Acceptance Corporation—Nevada**, as Servicer, and Wachovia Bank, National Association, as Trustee, and Wachovia Bank, National Association, as Collateral Agent (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 dated August 2, 2004).
10.57				Indenture and Servicing Agreement, dated as of August 11, 2005, by and among Cendant Timeshare 2005-1 Receivables Funding, LLC, as Issuer, Cendant Timeshare Resort Group-Consumer Finance, Inc., as Servicer, Wells Fargo Bank, National Association, as Trustee and Wachovia Bank, National Association, as Collateral Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 17, 2005).
10.58(a)				Asset and Stock Purchase Agreement by and among Budget Group, Inc. and certain of its Subsidiaries, Cendant Corporation and Cherokee Acquisition Corporation dated as of August 22, 2002 (Incorporated by reference to Exhibit 10.71 to the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2001 dated November 4, 2002).
10.58(b)				First Amendment to Asset and Stock Purchase Agreement by and among Budget Group, Inc. and certain of its Subsidiaries, Cendant Corporation and Cherokee Acquisition Corporation dated as of September 10, 2002 (Incorporated by reference to Exhibit 10.72 to the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2001 dated November 4, 2002).
10.59				Share Purchase Agreement among Cendant Corporation, Cendant Travel Services Limited, David Babai, Uzi Kattan, Edward Faith, Murray Sweet and Bernard Bialylew dated December 16, 2004 for the purchase of Donvand Limited and Octopustravel Group Limited (Incorporated by reference to Exhibit 10.67 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 dated March 1, 2005).

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Table of Contents

Exhibit No.				Description
10.60				Agreement and Plan of Merger, dated September 29, 2004, by and among Cendant Corporation, Robertson Acquisition Corporation and Orbitz, Inc. (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated September 29, 2004).
10.61				Amended and Restated Limited Liability Company Operating Agreement, dated as of January 31, 2005, of PHH Home Loans, LLC, by and between PHH Broker Partner Corporation and Cendant Real Estate Services Venture Partner, Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 4, 2005).
10.62				Strategic Relationship Agreement, dated as of January 31, 2005, by and among Cendant Real Estate Services Group, LLC, Cendant Real Estate Services Venture Partner, Inc., PHH Corporation, PHH Mortgage Corporation, PHH Broker Partner Corporation and PHH Home Loans, LLC (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated February 4, 2005). ***
10.63				Separation Agreement, dated as of January 31, 2005, by and between Cendant Corporation and PHH Corporation (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated February 4, 2005).
10.64				Tax Sharing Agreement, dated as of January 31, 2005, by and among Cendant Corporation, PHH Corporation and certain affiliates of PHH Corporation named therein (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated February 4, 2005).***
10.65				Purchase Agreement dated as of April 25, 2000 by and between Cendant Mobility Services Corporation, as originator and Cendant Mobility Financial Corporation, as buyer (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated February 3, 2005).
10.66				Receivables Purchase Agreement dated as of April 25, 2000 by and between Cendant Mobility Financial Corporation, as originator and seller, and Apple Ridge Services Corporation as buyer (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated February 3, 2005).
10.67				Transfer and Servicing Agreement dated as of April 25, 2000, by and between Apple Ridge Services Corporation, as transferor, Cendant Mobility Services Corporation, as originator and servicer, Cendant Mobility Financial Corporation, as originator and Apple Ridge Funding LLC (now known as Cendant Mobility Client-Backed Relocation Receivables Funding LLC), as transferee and Bank One, National Association (now JPMorgan Chase Bank, National Association), as indenture trustee (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated February 3, 2005).
10.68				Performance Guaranty dated as of April 25, 2000 executed by PHH Corporation in favor of Cendant Mobility Financial Corporation and Apple Ridge Funding LLC (now known as Cendant Mobility Client-Backed Relocation Receivables Funding LLC) (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated February 3, 2005).
10.69				Assignment and Assumption Agreement Relating to Performance Guaranty entered into December 20, 2004 by PHH Corporation and Cendant Corporation and was agreed and consented to and accepted by Cendant Mobility Financial Corporation, Apple Ridge Funding LLC (now known as Cendant Mobility Client-Backed Relocation Receivables Funding LLC) and JPMorgan Chase Bank, National Association, as indenture trustee (Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K dated February 3, 2005).

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Table of Contents

Exhibit No.				Description
10.70				Omnibus Amendment, Agreement and Consent entered into December 20, 2004 among Cendant Mobility Services Corporation, Cendant Mobility Financial Corporation, Apple Ridge Services Corporation, Apple Ridge Funding LLC (now known as Cendant Mobility Client-Backed Relocation Receivables Funding LLC), JPMorgan Chase Bank, National Association, as indenture trustee, The Bank of New York, as paying agent, the insurer and series enhancer and the then existing commercial paper conduits and banks as noteholders or committed purchasers (Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K dated February 3, 2005).
10.71				Second Omnibus Amendment, Agreement and Consent entered into January 31, 2005 among Cendant Mobility Services Corporation, Cendant Mobility Financial Corporation, Apple Ridge Services Corporation, Cendant Mobility Client-Backed Relocation Receivables Funding LLC, JPMorgan Chase Bank, National Association, as indenture trustee, The Bank of New York, as paying agent, the insurer and series enhancer and the then existing commercial paper conduits and banks as noteholders or committed purchasers (Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K dated February 3, 2005).
10.72				Indenture Supplement dated as of January 31, 2005 among Cendant Mobility Client-Backed Relocation Receivables Funding LLC, JPMorgan Chase Bank, National Association, as indenture trustee, and The Bank of New York, as paying agent, authentication agent, transfer agent and registrant (Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K dated February 3, 2005).
10.73				Cendant Corporation Officer Personal Financial Services Policy (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated January 26, 2005).
10.74				Commercial Paper Dealer agreement between Cendant Corporation, as Issuer and Banc of America Securities LLC, as Dealer, dated as of March 30, 2005 (Incorporated by reference to Exhibit 10.1(a) to the Company’s Current Report on Form 8-K dated March 31, 2005).
10.75				Commercial Paper Dealer agreement between Cendant Corporation, as Issuer and J.P. Morgan Securities Inc., as Dealer, dated as of March 30, 2005 (Incorporated by reference to Exhibit 10.1(c) to the Company’s Current Report on Form 8-K dated March 31, 2005).
10.76				Commercial Paper Dealer agreement between Cendant Corporation, as Issuer and Citigroup Global Markets Inc., as Dealer, dated as of March 30, 2005 (Incorporated by reference to Exhibit 10.1(b) to the Company’s Current Report on Form 8-K dated March 31, 2005).
10.77				Issuing and Paying Agency Agreement dated March 30, 2005 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated March 31, 2005).
10.78				Form of TRAC Participation Agreement (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 26, 2005).
10.79				Form of TRAC Lease (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated May 26, 2005).
10.80				Form of TRAC Guaranty (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated May 26, 2005).
10.81(a)				Purchase Agreement by and among Cendant Corporation, Affinity Acquisition, Inc. and Affinity Acquisition Holdings, Inc. dated as of July 26, 2005 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 dated November 2, 2005).

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Table of Contents

Exhibit No.				Description
10.81(b)				Amendment No. 1 dated as of October 17, 2005 to the Purchase Agreement dated as of July 26, 2005 by and among Cendant Corporation, Affinity Acquisition, Inc. (now known as Affinion Group, Inc. ) and Affinity Acquisition Holdings, Inc. (now known as Affinion Group Holdings, Inc.) (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 dated November 2, 2005).***
10.82				WTH Funding Limited Partnership Fourth Amended and Restated Limited Partnership Agreement among Aviscar Inc., Budgetcar Inc., STARS Trust and Bay Street Funding Trust dated April 20, 2005 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005 dated August 2, 2005).
12				Statement Re: Computation of Ratio of Earnings to Fixed Charges.
21				Subsidiaries of Registrant.
23				Consent of Independent Registered Public Accounting Firm.
31.1				Certification of Chief Executive Officer Pursuant to Rules 13(a)-14(a) and 15(d)-14(a) Promulgated Under the Securities Exchange Act of 1934, as amended.
31.2				Certification of Chief Financial Officer Pursuant to Rules 13(a)-14(a) and 15(d)-14(a) Promulgated Under the Securities Exchange Act of 1934, as amended.
32				Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Sierra Receivables Funding Company, LLC is now known as Cendant Timeshare Conduit Receivables Funding, LLC.

**	Fairfield Acceptance Corporation—Nevada is now known as Cendant Timeshare Resort Group—Consumer Finance, Inc.

***	Confidential treatment has been requested for certain portions of this Exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, which portions have been omitted and filed separately with the Securities and Exchange Commission.

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			Year Ended December 31,
			2005				2004				2003				2002				2001
Earnings available to cover fixed charges:
Income before income taxes, minority interest and equity in Homestore			$	1,346			$	2,047			$	1,748			$	1,065			$	321
Plus: Fixed charges				885				971				928				737				764
	Amortization of capitalized interest			5				6				4				-				-
Less: Equity income (loss) in unconsolidated affiliates				-				-				-				2				(5	)
	Minority interest (pre-tax) in mandatorily redeemable preferred interest in a subsidiary			-				6				6				14				23
	Minority interest (pre-tax) in mandatorily redeemable trust preferred securities			-				-				-				-				14
	Minority interest in pre-tax income of subsidiaries that have not incurred fixed charges (a)			-				-				25				20				-
	Capitalized interest			7				5				7				-				-
Earnings available to cover fixed charges			$	2,229			$	3,013			$	2,642			$	1,766			$	1,053
Fixed charges (b):
Interest, including amortization of deferred financing costs (c)			$	734			$	820			$	791			$	632			$	685
Minority interest (pre-tax) in mandatorily redeemable preferred interest in a subsidiary				-				6				6				14				23
Minority interest (pre-tax) in mandatorily redeemable trust preferred securities				-				-				-				-				14
Interest portion of rental payment				151				145				131				91				42
Total fixed charges			$	885			$	971			$	928				737			$	764
Ratio of earnings to fixed charges				2.52	x			3.10	x			2.85	x			2.40	x			1.38	x

(a)		Includes minority expense related to the Company’s venture with Marriott International, Inc. of $25 million and $20 million during 2003 and 2002, respectively.
(b)		Consists of interest expense on all indebtedness (including amortization of deferred financing costs) and the portion of operating lease rental expense that is representative of the interest factor. Interest expense on all indebtedness is detailed as follows:

		Year Ended December 31,
		2005				2004				2003				2002				2001
Related to the debt under management programs incurred by the Company’s car rental subsidiary		$	313			$	263			$	270			$	213			$	189
Related to the Company’s stockholder litigation settlement liability			-				-				-				-				131
All other			421				557				521				419				365
		$	734			$	820			$	791			$	632			$	685

(c)	Does not include interest expense from discontinued operations of $11 million, $96 million, $67 million, $106 million and $157 million for the years ended December 31, 2005, 2004, 2003, 2002 and 2001, respectively.

 

	Jurisdiction of
Subsidiary	Incorporation
9805 Willows Avenue, LLC		WA
Aesop Leasing Corporation		DE
AFS Mortgage		CA
Allmon, Tiernan & Ely, Inc.		FL
American Home Settlement Services, LLC		DE
American Title Company of Houston		TX
Amerihost Franchise Systems, Inc.		DE
Apanage B.V.		Netherlands
Apex Marketing, Inc.		AR
APEX Real Estate Information Services Alabama, L.L.C.		AL
Apex Real Estate Information Services LLP		PA
Apollo Galileo USA Partnership		DE
Apollo Galileo USA Sub I, Inc.		DE
Apollo Galileo USA Sub II, Inc.		DE
Apple Ridge Services Corporation		DE
ARAC Management Services, Inc.		DE
Asia-Hotels.com, Limited Hong Kong Associates Investments		CA
Associates Realty, Inc.		CA
Associates Title, LLC		DE
Atlantic Title & Trust, LLC		DE
ATS (RCI) Pty Ltd		Australia
Avenue Plaza LLC		LA
Avis Asia and Pacific, Limited		DE
Avis Car Rental Group, LLC		DE
Avis Caribbean, Limited		DE
Avis Enterprises, Inc.		DE
Avis Group Holdings, LLC		DE
Avis International, Ltd.		DE
Avis Management Pty. Limited		Australia
Avis Operations, LLC		DE
Avis Rent A Car de Puerto Rico, Inc.		Puerto Rico
Avis Rent A Car Limited		New Zealand
Avis Rent A Car System, LLC		DE
Aviscar Inc.		Canada
Baldwin County Settlement Services, LLC		AL
Buccaneer Development, Inc.		Virgin Islands
Budget Rent A Car Australia Pty. Ltd.		Australia
Budget Rent A Car Operations Pty. Ltd.		Australia
Budget Rent A Car System, Inc.		DE
Budget Truck Rental LLC		DE

---

 

	Jurisdiction of
Subsidiary	Incorporation
Burnet Realty, Inc.		WI
Burnet Title L.L.C.		MN
Burnet Title of Indiana, LLC		IN
Burnet Title of Ohio, LLC		OH
Burnet Title, Inc.		MN
Burrow Escrow Services, Inc.		CA
Cambridge Settlement Services.com, LLC		AL
Canvas Holidays Limited		UK
CD Intellectual Property Holdings, LLC		DE
Cendant (UK) Holdings Limited		UK
Cendant Canada, Inc.		Canada
Cendant Car Rental Group, LLC		DE
Cendant Denmark Aps		Denmark
Cendant Finance Holding Company LLC		DE
Cendant Hospitality, Inc.		DE
Cendant Hotel Group, Inc.		DE
Cendant Hotel Management, Inc.		DE
Cendant International Holdings Limited		UK
Cendant Mobility Client-Backed Relocation Receivables Funding, LLC		DE
Cendant Mobility Financial Corporation		DE
Cendant Mobility Holdings Limited		UK
Cendant Mobility II Ltd.		UK
Cendant Mobility Limited.		UK
Cendant Mobility Relocation Company		DE
Cendant Mobility Services Corporation		DE
Cendant Operations, Inc.		DE
Cendant Real Estate Services Group LLC		DE
Cendant Rental Car Funding (AESOP) LLC		DE
Cendant Settlement Services Group LLC		DE
Cendant TDS China Holdings, Inc.		DE
Cendant Technology Holding, LLC		DE
Cendant Timeshare 2004-1 Receivables Funding, LLC		DE
Cendant Timeshare 2005-1 Receivables Funding, LLC		DE
Cendant Timeshare Conduit Receivables Funding LLC		DE
Cendant Timeshare Resort Group, Inc.		DE
Cendant Timeshare Resort Group-Consumer Finance, Inc.		DE
Cendant Travel Distribution Service Group, Inc.		DE
Cendant Travel Germany GmbH & Co, KG		Frankfurt
Cendant Travel Germany Verwaltungs GmbH		Frankfurt
Cendant Travel Services Co., Ltd.		China
Cendant Travel, Inc.		TN
Cendant UK Acquisition Corporation		DE

2

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	Jurisdiction of
Subsidiary	Incorporation
Cendant Vacation Holdco Subsidiary LLC		DE
Cendant Vacation Holdco, Inc.		DE
Cendant Vacation Network Group, Inc.		DE
Cendant Vacation Rental Group Holdings C.V.		Netherlands
Central Florida Title Company		FL
Century 21 Real Estate LLC		DE
Chaconne Pty. Ltd.		Australia
CHM St. Thomas, Inc.		Virgin Islands
Coldwell Banker Corporation		DE
Coldwell Banker King Thompson Auction Services, Inc.		DE
Coldwell Banker Pacific Properties Ltd.		HI
Coldwell Banker Real Estate Corporation		CA
Coldwell Banker Real Estate Services, Inc.		NJ
Coldwell Banker Residential Brokerage Company		CA
Coldwell Banker Residential Brokerage Corporation		DE
Coldwell Banker Residential Brokerage Insurance Agency, Inc.		NJ
Coldwell Banker Residential Real Estate Services of Wisconsin, Inc.		WI
Coldwell Banker Residential Real Estate, Inc.		CA
Coldwell Banker Residential Referral Network, Inc.		CA
Constellation Reinsurance Company Limited		Barbados
Corcoran Group Brooklyn Landmark LLC		NY
Corcoran MLS Holdings LLC		DE
Cornish & Carey Residential, Inc.		CA
Cotton Real Estate, Inc.		MA
CSSG Affiliates Holdings, Inc.		DE
Cuendet & Cie S.p.A.		Italy
Dansommer A/ S		Denmark
Days Inns Worldwide, Inc.		DE
Distribution Systems, Inc.		DE
Donvand Ltd.		United Kingdom
Douglas & Jean Burgdorff, Inc.		NJ
Eastern Resorts Company LLC		RI
Eastern Resorts Corporation		DE
ebookers Limited		United Kingdom
EFI Development Funding, Inc.		DE
EFI Funding Company, Inc.		DE
EMEA Holdings C.V.		Netherlands
English Country Cottages Ltd.		United Kingdom
Entriks Holdings B.V.		Netherlands
Equity Title Company		CA
Equivest Finance, Inc.		DE
Equivest Louisiana, Inc.		DE
Equivest Maryland, Inc.		DE

3

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	Jurisdiction of
Subsidiary	Incorporation
Equivest St. Thomas, Inc.		US Virgin Islands
Equivest Vacation and Travel Club, Inc.		NC
ERA Franchise Systems, Inc.		DE
Extra Holidays, LLC		DE
Fairfield Funding Corporation, III		DE
Fairfield Myrtle Beach, Inc.		DE
Fairfield Resort Management Services, Inc.		IN
Fairfield Resorts, Inc.		DE
Fairtide Insurance Ltd.		Bermuda
FFD Development Company, LLC		DE
First California Escrow Corporation		DE
Flairview Travel Pty Ltd		Australia
Flairview Travel, LLC		MD
FRI Daytona, LLC		FL
FSA Membership Services LLC		DE
Galileo Asia, LLC		DE
Galileo BA, Inc.		DE
Galileo Canada Distribution Systems, Inc.		Canada
Galileo International Canada ULC		Nova Scotia
Galileo International Limited		UK
Galileo International Technology, LLC		DE
Galileo International, Inc.		DE
Galileo International, L.L.C.		DE
Galileo Latin America, L.L.C.		DE
Galileo Malaysia, LLC		DE
Galileo Operations, LLC		DE
Galileo Switzerland AG		Switzerland
Galileo Technologies, Inc.		DE
GI Worldwide Holdings C.V.		Netherlands
GIW Holdings, C.V.		Netherlands
Guardian Title Agency, LLC		CO
Gullivers Jersey I Limited		Jersey Channel Islands
Gullivers Jersey II Limited		Jersey Channel Islands
Gullivers Jersey III Limited		Jersey Channel Islands
Gullivers Travel Associates Limited		United Kingdom
HFS Truck Funding Corporation		DE
Hickory Title, LLC		DE
HJ Flavors, Inc.		DE
Holiday Cottages Group Limited (operating under the Blakes and Country Cottages names)		UK
Holiday Homes Africa		DE
Hospitality Operations, Inc.		DE
Hotel Dynamics Argentina S.R.L.		Argentina
HotelClub Pty Limited		Australia

4

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	Jurisdiction of
Subsidiary	Incorporation
HotelPORT, Inc.		DE
Howard Johnson International, Inc.		DE
Inmobiliaria Recidencial Los Cabos No. 1 S. de R.L. de C.V.		Mexico
Inmobiliaria Recidencial Los Cabos No. 2 S. de R.L. de C.V.		Mexico
Intercambios Endless Vacation IEV, Inc.		IN
International Life Leisure Group Limited (operating under the Ferrysavers and French Life names)		UK
Internetwork Publishing Corporation (d/b/a lodging.com)		FL
Island Settlement Services, LLC		DE
Jack Gaughen, Inc.		PA
Kenosia Funding, LLC		DE
Knights Franchise Systems, Inc.		DE
Kona Hawaiian Vacation Ownership, L.L.C.		HI
KT Leisure Limited		United Kingdom
Landal Green Parks BV		Netherlands
Leading Residences of the World, LLC		DE
Magellen Technologies, Inc.		DE
Market Street Settlement Group, Inc.		NH
Mercury Settlement Services, LLC		DE
Metro Title, LLC		DE
Mid-State Escrow, LLC		DE
National Internet Travel Agency, LP		FL
Neat Group Corporation		DE
Nisbet Corporation		OH
Novasol A/ S		Denmark
NRT Arizona Commercial, Inc.		DE
NRT Arizona Exito, Inc.		DE
NRT Arizona Referral, Inc.		DE
NRT Arizona Southwest, Inc.		DE
NRT Arizona Success, Inc.		DE
NRT Arizona, Inc.		DE
NRT Chicago LLC		DE
NRT Colorado, Inc.		CO
NRT Columbus, Inc.		DE
NRT Hawaii Referral, LLC		DE
NRT Incorporated		DE
NRT Mid-Atlantic Title Services, LLC		MD
NRT Mid-Atlantic, Inc.		MD
NRT Missouri, Inc.		MO
NRT New England Incorporated		DE
NRT New York, Inc.		DE
NRT Settlement Services of Missouri, Inc.		DE
NRT Settlement Services, LLC		MD
NRT Sunshine Inc.		DE

5

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	Jurisdiction of
Subsidiary	Incorporation
NRT Texas, Inc.		TX
NRT Title Services of Maryland, LLC		DE
NRT Utah, Inc.		DE
O’Conor, Piper & Flynn Insurance Agency, LLC		MD
Octopus Travel Group Ltd.		United Kingdom
OctopusTravel Ltd.		Thailand
OctopusTravel.com Ltd.		United Kingdom
Orbitz Away LLC		DE
Orbitz, Inc.		DE
Orbitz, LLC		DE
Palm Resort Group, Inc.		FL
Palm Vacation Group		FL
Paragon Travel Limited		Hong Kong
Pathfinder Insurance Company		CO
Peppertree Resorts Ltd.		NC
Peppertree Resorts Villas, Inc.		NC
Planedrive Limited		United Kingdom
Platinum Title & Settlement Services, LLC		DE
Pointtravel Co. Ltd.		UK
Pointuero V Limited		UK
Prime Commercial, Inc.		UT
Professionals’ Title Company, LLC		DE
Progressive Title Company, Inc.		CA
Quantitude, Inc.		DE
R.J. Young Co.		CA
Raccoon Acquisition I, LLC		DE
Ramada International, Inc.		DE
Ramada Worldwide Inc.		DE
RCI Argentina, Inc.		IN
RCI Brasil Ltda.		Brazil
RCI Call Centre (Ireland) Limited		Ireland
RCI Canada, Inc.		IN
RCI Chile, Inc.		IN
RCI Colombia, Inc.		IN
RCI Consulting, Inc.		IN
RCI Europe		UK
RCI General Holdco 2, Inc.		DE
RCI Hawaii No. 1, LLC		DE
RCI Hawaii No. 2, LLC		DE
RCI India Pvt. Ltd.		India
RCI Kiawah Island, LLC		DE
RCI Pacific Pty. Ltd.		IN
RCI Rewards LLC		DE

6

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	Jurisdiction of
Subsidiary	Incorporation
RCI Technology Corp.		CO
RCI Tourism Development (India) Ltd.		UK
Referral Network, LLC		CO
Resort Condominiums International De Mexico S. De R.L. De C.V.		Mexico
Resort Condominiums International, LLC		DE
Resort Rental, LLC		DE
Riverbend Title, LLC		DE
S.D. Shepherd Systems, Inc.		TX
Seawind Settlement Services, LLC		DE
Shawnee Development Inc.		PA
Sierra 2003-1 Receivables Funding Company, LLC		DE
Sierra 2003-2 Receivables Funding Company, LLC		DE
Sierra Deposit Company, LLC		DE
Skyline Title, LLC		DE
Soleil Florida Corp.		FL
Sotheby’s International Realty Affiliates, Inc.		DE
Sotheby’s International Realty Licensee Corporation		DE
Sotheby’s International Realty Westchester, Inc.		DE
Sotheby’s International Realty, Inc.		MI
St. Joe Real Estate Services, Inc.		FL
St. Joe Title Services, LLC		FL
St. Mary’s Title Services, LLC		NH
Steamboat No. 1, LLC		DE
Steamboat No. 2, LLC		DE
Steamboat No. 3, LLC		DE
Steamboat No. 4, LLC		DE
Stilwell Publishing Limited		United Kingdom
Success Financial Equity Management, LLC		DE
Sunland Title, LLC		DE
Super 8 Motels, Inc.		SD
Susquehanna Land Transfers, LLC		DE
Team Fleet Financing Corporation		DE
Telluride No. 1, LLC		DE
Terramar Guaranty Title & Trust, Inc.		FL
Terren Corporation		Canada
Texas American Title Company		TX
The DeWolfe Companies, Inc.		MA
The DeWolfe Company, Inc.		MA
The Four Star Corp.		CT
The Galileo Company		UK
The Individual Travellers Company Limited		UK
The Masiello Group Closing Services, LLC		NH
The Sunshine Group (Florida) Limited Partnership		FL

7

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	Jurisdiction of
Subsidiary	Incorporation
The Sunshine Group (Florida) Ltd. Corp.		DE
Title Resources Guaranty Company		TX
TM Acquisition Corp.		DE
Travel 2 Limited		England & Wales
Travel 4 Limited Travel Acquisition Corporation Pty. Limited		England & Wales
Travelbag Limited		UK
Travel Industries, Inc. (d/b/a THOR, Inc.)		Australia
Travelodge Hotels, Inc.		DE
Travelport Corporate Solutions, Inc.		WA
Travelwire A/ S		Denmark
Trendwest Funding I, Inc.		DE
Trendwest Leasing, L.L.C.		WA
Trendwest Resorts, Inc.		OR
Trendwest South Pacific Pty. Limited		Australia
TRI Funding III, Inc.		DE
TRI Funding IV, Inc.		DE
TRI Funding V, Inc.		DE
Trip Network, Inc.		DE
Trip.com, Inc.		DE
TRUST International Hotel Reservation Services GmbH		Germany
TTG Independent Holidays Group Limited		UK
TW Holdings II, Inc.		DE
Two Flags Joint Venture LLC		DE
UK Relocation Receivables Funding Limited		United Kingdom
Vacation Break Resorts at Palm Aire, Inc.		FL
Vacation Break U.S.A., Inc.		FL
Vacation Exchanges International Pty. Limited		South Africa
Vacation Management Services		South Africa
Valley of California, Inc.		CA
Welcome Holidays Limited		UK
West Coast Escrow Company		CA
West Coast Valencia Escrow Company, Inc.		DE
William Orange Realty, Inc.		CT
Wingate Inns International, Inc.		DE
Wizard Co., Inc.		DE
WizCom International, Ltd.		DE
Wizcom, Inc.		DE
Worldbookers Limited		United Kingdom
WTH Canada, Inc.		Canada
WTH Pty Limited		Australia
Wyndham Franchise Systems, LLC		DE
Wyndham Worldwide Inc.		DE

8

 

 

1.	I have reviewed this annual report on Form 10-K of Cendant Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/     HENRY R. SILVERMAN
Chief Executive Officer

 

1.	I have reviewed this annual report on Form 10-K of Cendant Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/     RONALD L. NELSON
Chief Financial Officer

 

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/    HENRY R. SILVERMAN
Henry R. Silverman
Chief Executive Officer
March 1, 2006
/s/    RONALD L. NELSON
Ronald L. Nelson
Chief Financial Officer
March 1, 2006