Cendant Hosts Investor Meeting and Announces Increased 2001 Earnings Projections
Company Increases Fourth Quarter 2001 Projected Adjusted EPS to $0.21 From Previously Announced $0.20; $0.01 Above Wall Street Estimates; Full Year
Projected Adjusted EPS Increases to $1.04
Company Reiterates 2002 Projected Adjusted EPS of $1.25 and Indicates Upward Revisions Likely Based on Current Trends; Company Projects $2 Billion in Free
Cash Flow in 2002
Company Reiterates Long-Term Organic Growth Goals of 5%-7% for Revenue,
10% for EBITDA and 13% for EPS
NEW YORK, Dec. 10 /PRNewswire/ -- At a meeting of institutional investors and analysts here today, Cendant Corporation (NYSE: CD) will announce that its projected adjusted EPS for fourth quarter 2001 has increased to $0.21, up one cent from previous Company projections and from Wall Street estimates. Full year 2001 adjusted EPS is projected to be $1.04. The Company also will reiterate its projected adjusted EPS for 2002 to be $1.25, or 20% higher than in 2001, and indicate that upward revisions for 2002 are likely based on current trends in its businesses. Free cash flow in 2002 is projected to be approximately $2 billion. The Company will reiterate its long-term organic growth goals of 5% to 7% for revenue, 10% for EBITDA and 13% for EPS.
The Company will announce the following financial projections for fourth quarter 2001:
-- Adjusted EBITDA is projected to be between $545 million and $550
million compared with $439 million in fourth quarter 2000.
-- Depreciation and amortization (non-vehicle and program related) is
projected to be between $155 million and $160 million compared with
93 million in fourth quarter 2000. The increase is principally due to
the 2001 acquisitions of Avis, Fairfield Resorts, Galileo and Cheap
Tickets.
-- Net interest expense (non-vehicle and program related) is projected to
be between $70 million and $80 million compared with $63 million in
fourth quarter 2000. The increase is principally due to the Company's
2001 acquisitions.
-- The Company's fourth quarter and full year 2001 tax rates on adjusted
pretax income are projected to be 33.2% compared with 34.0% in 2000.
The decrease is principally due to the recognition of certain foreign
tax credits in 2001.
-- Minority interest is projected to be approximately $3 million compared
with $23 million in 2000. The reduction is primarily a result of the
retirement of the Feline PRIDES in February 2001.
-- Diluted shares are projected to be between 1.015 billion and 1.025
billion compared with 757 million in 2000. The increase is primarily
the result of the issuance of 61 million shares of common stock in
connection with the retirement of the Feline PRIDES, the issuance of
46 million shares of common stock in February 2001 and the issuance of
117 million shares of common stock in connection with the acquisition
of Galileo.
The Company will announce the following financial projections for 2002:
-- Adjusted EBITDA is projected to be between $2.720 billion and $2.880
billion compared with $2.145 billion to $2.215 billion in 2001.
-- Depreciation and amortization (non-vehicle and program related) is
projected to be between $475 million and $490 million compared with
500 million to $510 million in 2001. Depreciation is projected to
increase because of the 2001 acquisitions and amortization is
projected to decrease because of the adoption of Statement of
Financial Accounting Standards No. 142, which eliminates the
amortization of goodwill.
-- Net interest expense (non-vehicle and program related) is projected to
be between $300 million and $325 million compared with $245 million to
255 million in 2001. The increase is principally due to the
Company's 2001 acquisitions.
-- The Company's tax rate on adjusted pretax income is projected to be
34.0% in 2002 compared with 33.2% in 2001. The increase is
principally because of the 2001 acquisitions and a change in the mix
of earnings.
-- Minority interest is projected to be approximately $12 million
compared with $25 million in 2001.
-- Diluted shares are projected to be between 1.050 billion and 1.075
billion compared with 915 million to 920 million in 2001.
Additionally, the Company will announce its revenue and adjusted EBITDA growth outlook by business unit for 2001 and 2002 and the seasonality of EPS by quarter in 2001 and 2002. (See attached table for projected results and footnotes.)
Adjusted EBITDA and adjusted earnings per share (EPS) exclude non- recurring or unusual items and the effect of an equity ownership in Homestore.com. As previously announced, in the fourth quarter 2001, the Company expects to incur charges of approximately $125 million after-tax, of which approximately $35 million is non-cash, related to rightsizing the corporation in response to developments in the economy, particularly the travel industry, since the attacks of September 11 and the integration of Galileo International and Cheap Tickets which were acquired in fourth quarter 2001. The Company continues to review the carrying value of its mortgage servicing rights and believes any necessary adjustment would result in a non- cash charge of no more than $60 million after-tax. In addition, as previously disclosed, the Company is examining its investment in Homestore.com, received through the sale of Move.com earlier this year, which could result in a non- cash adjustment of up to $260 million after-tax, which would offset the gain recognized in the first quarter 2001. Adjusted EBITDA and adjusted EPS are non-GAAP (generally accepted accounting principles) measures, but the Company believes that they are useful to assist investors in gaining an understanding of the trends and results of operations for the Company's core businesses. Adjusted earnings per share should be viewed in addition to our GAAP results and not in lieu of GAAP results.
Webcast
The Company intends to update and publish forward-looking statements regarding its projected financial performance on a periodic basis. Today's investor meeting will be simultaneously webcast on the Company's Web site at cendant.com beginning at 8:30 a.m. Eastern Time.
Cendant Corporation is primarily a provider of travel and residential real estate services. With approximately 60,000 employees, New York City-based Cendant provides these services to businesses and consumers in over 100 countries. More information about Cendant, its companies, brands and current SEC filings may be obtained by visiting www.Cendant.com or by calling 877-4- INFOCD (877-446-3623). |
