SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to __________
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Commission File No. 1-11402
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Cendant Corporation
Employee Savings Plan
(Full title of the Plan)
Cendant Corporation
(Name of issuer of the securities held pursuant to the Plan)
6 Sylvan Way
Parsippany, New Jersey 07054
(Address of principal executive office)
Cendant Corporation
Employee Savings Plan
Financial Statements for the Years Ended
December 31, 1997 and 1996
INDEX
Description
Independent Auditors' Report
Statements of Net Assets Available for Benefits
as of December 31, 1997 and 1996
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 1997 and 1996
Notes to Financial Statements
Item 27a -Schedule of Assets Held for Investment Purposes
as of December 31, 1997
Item 27d - Schedule of Reportable Transactions for the year ended
December 31, 1997
Schedules required under the Employee Retirement Income Security Act of 1974
("ERISA"), other than the schedules listed above, are omitted because of the
absence of the conditions under which they are required.
INDEPENDENT AUDITORS' REPORT
Board of Directors
Cendant Corporation
Employee Savings Plan
Parsippany, NJ 07054
We have audited the accompanying statements of net assets available for benefits
of the Cendant Corporation Employee Savings Plan (the "Plan"), formerly the HFS
Incorporated Employee Savings Plan, as of December 31, 1997 and 1996, and the
related statements of changes in net assets available for benefits for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1997
and 1996, and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment purposes as of December 31, 1997 and (2) reportable
transactions for the year ended December 31, 1997, are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements, but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These schedules are the responsibility
of the Plan's management. Such schedules have been subjected to the auditing
procedures applied in our audit of the basic 1997 financial statements and, in
our opinion, are fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
/s/Deloitte & Touche LLP
Parsippany, New Jersey
June 26, 1998
Cendant Corporation
Employee Savings Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997 and 1996
1997 1996
----------- -----------
ASSETS
Investments ..................... $76,862,504 $30,289,693
Interest and dividends receivable 25,420 14,637
Contributions receivable from:
Participants ................ 172,325 462,145
Employer .................... 38,414 95,035
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS ..... $77,098,663 $30,861,510
=========== ===========
-See notes to financial statements-
Cendant Corporation Employee Savings Plan
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1997 and 1996
1997 1996
----------- -----------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions:
Participants ...................... $ 6,447,240 $ 3,606,740
Employer .......................... 1,459,001 706,177
Rollovers ......................... 35,596,085 4,255,021
----------- -----------
Total contributions ........... 43,502,326 8,567,938
----------- -----------
Investment income:
Realized and unrealized gains ..... 3,463,920 1,429,130
Interest and dividends ............ 3,288,012 1,529,256
----------- -----------
Total investment income ....... 6,751,932 2,958,386
----------- -----------
Total additions ............... 50,254,258 11,526,324
----------- -----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants ..... 4,008,906 4,268,290
Trustee fees ...................... 8,199 11,425
----------- -----------
Total deductions .............. 4,017,105 4,279,715
----------- -----------
NET INCREASE IN NET ASSETS
AVAILABLE FOR BENEFITS ............ 46,237,153 7,246,609
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR ................. 30,861,510 23,614,901
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR ....................... $77,098,663 $30,861,510
=========== ===========
-See notes to financial statements-
Cendant Corporation Employee Savings Plan
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN
The following description of the Cendant Corporation Employee Savings Plan
(the "Plan"), formerly the HFS Incorporated Employee Savings Plan, provides
only general information. Participants should refer to the Plan agreement
for a more complete description of the Plan's provisions.
The Plan, established July 2, 1990 and amended and restated as of January
1, 1998 (see Note 6 - "Recent Events Plan Amendments"), is a defined
contribution plan established for certain eligible employees of Cendant
Corporation ("Cendant" or the "Company") that provides Internal Revenue
Code Section 401(k) employee salary deferral benefits and additional
employer contributions for the Company's employees. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
Effective January 1, 1996, the Company amended and restated the Plan.
Amendments effective as of such date included an adjustment to the vesting
schedule to provide for immediate vesting of employer contributions. The
Plan was also amended to allow for the eligibility of employees of acquired
companies subject to certain limitations. During 1996, additional
amendments to the plan were adopted related to merging the existing plans
of Electronic Realty Associates ("ERA"), The Century 21 of the MidAtlantic
States, Inc. and Century 21 of Eastern Pennsylvania, Inc. and portions of
the plan of Coldwell Banker Corporation ("Coldwell Banker") plan into the
Plan. In addition, the Plan was amended in 1997 to allow for existing
plans of acquired companies to be combined into the plan. The Company
completed the transfer of assets of the Century 21 MidAtlantic States and
Century 21 of Eastern Pennsylvania plans and the applicable portions of the
Coldwell Banker plan during 1997 and expects the transfer of assets of
the ERA plan to be completed during 1998.
During 1997 and 1996, the Company made contributions to the Plan equal to a
percent of the pre-tax contributions made by the employee with respect to
the first six percent of the employee's compensation as set forth in the
schedule below:
Years of Service as of the Employer Matching
Last Day of the Plan Year Percentage of Investment
---------------------------- ------------------------
All eligible employees with
less than 6 years of service 25%
At least 6 but less than 11
years of service 35%
11 or more years of service 50%
The following is a summary of certain Plan provisions that were in effect
for 1997 and 1996:
a. Eligibility - Each regular employee (as defined in the Plan) of the
Company is eligible to participate in the Plan on the entry date
following both attainment of age 21 and completion of six months
service.
b. Contributions - An employee may elect to make pre-tax contributions up
to fifteen percent of annual compensation to a maximum of $9,500 for
1997 and 1996, respectively.
c. Rollovers - All employees, upon commencement of employment, are
provided the option of making a rollover contribution to the Plan in
accordance with Internal Revenue Service regulations. The Company
acquired six CENTURY 21 non-owned regions and Coldwell Banker during
the second quarter of 1996. The Company merged portions of the existing
Coldwell Banker plan into the Plan in both 1997 and 1996. In October
1996, the Company completed the acquisition of Avis Inc. The Company
subsequently sold a majority of its interest in the car rental
operations of Avis Inc. by offering stock in its subsidiary, Avis Rent
A Car, Inc. ("ARAC") to the public but retained the business consistent
with its service provider profile, including the subsidiary of Avis
Inc. that provides reservation and technology services to ARAC
("Wizcom"). In 1997, the account balances of Wizcom employees were
transferred from the ARAC 401-k plan to the Plan and the Century 21
MidAtlantic States and Century 21 of Eastern Pennsylvania plan assets
were tranferred into the Plan. As a result of the aforementioned
acquisition and plan mergers, $34.4 million and $3.5 million were
transferred into the Plan in 1997 and 1996, respectively, and are
included in Contributions - Rollovers in the Statement of Changes
in Net Assets Available for Benefits for the years ended December 31,
1997 and 1996.
d. Vesting - Employee contributions are 100% vested at all times.
Effective January 1, 1996, all participants were 100% vested in
employer contributions.
e. Termination - Although it has not expressed any intention to do so, the
Company reserves the right to modify, suspend, amend or terminate the
Plan in whole or in part at any time subject to the provisions of
ERISA. If the Plan is terminated, the amounts credited to the employer
contribution accounts of all participants shall become fully vested.
f. Loan Provision - Employees may borrow up to the lesser of $50,000 or
fifty percent of their vested balance, provided the vested balance is
at least one thousand dollars. Interest is charged at a commercial rate
and is secured by the vested balance. Loan repayments must be made
through payroll deductions over a term not to exceed five years unless
the proceeds of the loan are used to purchase the principal residence
of the employee in which case the term is not to exceed fifteen years.
g. Benefits Payable - Distributions to terminated employees are recorded
in each fund's financial statements when paid. Amounts payable to
participants who have terminated participation in the Plan were
approximately $1.0 million and $1.1 million at December 31, 1997 and
1996, respectively. These amounts will be reflected as liabilities on
the Plan's Form 5500 in accordance with Department of Labor
Regulations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying financial statements are prepared
on an accrual basis of accounting. Effective with the change in Trustee
(see "Change in Trustee" below), as of February 1, 1996, all administrative
costs of the Plan other than costs incurred to maintain participant loan
accounts were paid by the Company. Prior to such date, all
administrative fees were paid by the Plan.
Change in Trustee - As of February 1, 1996, the trustee and record keeping
and administrative responsibilities previously performed by the Charles
Schwab Trust Company ("Charles Schwab") and the Segal Company,
respectively, were undertaken by Merrill Lynch Trust Company of New Jersey
(the "Trustee"). In connection with the change in trustee, net assets of
approximately $20.9 million were transferred from Charles Schwab to the
Trustee.
Valuation of Investments - The Plan's group annuity contract is valued at
contract value. Contract value represents contributions made under the
contract, plus interest, less funds used to pay benefits to participants.
The value of the remaining investments are based upon quoted market values
as determined by the Plan's trustee.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect reported amounts and related
disclosures. Actual results could differ from those estimates.
3. INVESTMENTS
The market or contract values of investments, including cash and cash
equivalents within the funds, are as follows:
At December 31,
-------------------------
1997 1996
Market or Market or
Contract Contract
Value Value
----------- -----------
Cendant Stable Value Fund
- RPT ........................................... $ 7,693,811 $ 6,768,959
- CIGNA ......................................... 1,088,325 1,030,123
- Hartford ...................................... 382,498 373,977
AIM Charter Fund ................................... 6,624,132 3,044,717
AIM Weingarten Fund ................................ 3,071,778 2,108,625
AIM Constellation Fund ............................. 5,789,319 4,620,263
Templeton Foreign Fund ............................. 2,211,423 1,425,092
Company Common Stock Fund .......................... 9,484,939 5,694,266
MFS Emerging Growth Fund ........................... 1,459,126 554,626
Merrill Lynch Growth Fund .......................... 4,796,664 888,246
Merrill Lynch Capital Fund ......................... 3,870,574 285,003
Merrill Lynch Inter Term Bond Fund ................. 1,497,531 989,373
Putnam New Opportunity Fund ........................ 2,708,444 1,238,781
Employee Loans Receivable .......................... 2,698,894 1,123,779
Cash Fund .......................................... 23,485,046 143,863
----------- -----------
$76,862,504 $30,289,693
=========== ===========
a. Cendant Stable Value Fund - Certain contributions in this fund are
invested under contracts with major insurance companies providing a
high level of security for principal and a fixed rate of return. As of
February 1, 1996, contributions made to this fund were invested in
the Merrill Lynch Retirement Preservation Trust ("RPT") which
invests in high quality fixed interest instruments. The account is
designed to provide the investor with a defined rate of return and low
risk of principal.
b. AIM Charter Fund - This balanced mutual fund seeks growth of capital
and current income by investing primarily in dividend-paying common
stocks. A significant portion of assets may also be held in cash or
other income-producing securities, including U.S. government securities
or debt securities.
c. AIM Weingarten Fund - This growth mutual fund seeks capital growth by
investing primarily in common stocks of leading U.S. companies that are
enjoying strong earnings momentum or a dramatic upsurge in earnings.
d. AIM Constellation Fund - This mutual fund seeks capital appreciation by
investing primarily in common stocks with emphasis on medium-sized and
smaller emerging growth companies.
e. Templeton Foreign Fund - This mutual fund seeks long-term capital
growth through investing in stocks and debt obligations of companies
and governments outside the United States.
f. Company Common Stock Fund - Participants may elect to invest up to 50%
of their account balance in the Company=s common stock which is an
equity security publicly traded on the New York Stock Exchange under
the symbol "CD".
g. MFS Emerging Growth Fund - This mutual fund invests primarily in common
stocks of companies that are early in their life cycles and have the
potential to become major enterprises. The Fund may also invest in more
established companies whose earning growth is expected to accelerate
due to new management, new products or changes in consumer demand.
h. Merrill Lynch Growth Fund - This mutual fund invests in securities that
are selling at discounts from price-to-book value ratios and have
dividend yields greater than the stock market average or historic
yields. Large capitalization issues will be emphasized, but the Fund
has flexibility to invest in small capitalization companies with
similar value. The Fund may invest up to 20% of total assets in foreign
securities.
i. Merrill Lynch Capital Fund - This mutual fund allows management to
shift emphasis based on its evaluation of changes in economic and
market trends. The Fund's portfolio may be invested substantially in
equity securities (stocks), corporate bonds or money market securities.
Over longer periods, a major portion of the Fund's portfolio will
consist ofequity securities of larger market capitalization companies.
The Fund may invest up to 25% of its total assets in foreign
securities.
j. Merrill Lynch Inter Term Bond Fund - This mutual fund invests in
corporate debt securities, primarily through high-quality investment
grade securities.
k. Putnam New Opportunity Fund - This mutual fund seeks above-average
capital appreciation from rapidly growing sectors of the economy. Fund
management searches for companies with strong and expanded earnings,
committed management, freedom from excessive government regulation, and
substantial insider equity holdings.
4. INTERNAL REVENUE SERVICE STATUS
The Plan is intended to be qualified under ss.401 (a) of the Internal
Revenue Code of 1986 (the "Code") and is intended to be exempt from taxation
under ss.501(a) of the Code. The Plan received a favorable IRS determination
letter dated May 21, 1996. The Plan has been amended since receiving the
determination letter. However, the Plan administrator believes that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Code and the related trust was tax exempt as of the
financial statement date. Therefore, no provision of income taxes has been
included in the Plan's financial statements.
5. BUSINESS COMBINATIONS
Cendant - On December 17, 1997, HFS Incorporated ("HFS") merged with and
into CUC International Inc. ("CUC") with CUC surviving and being renamed
Cendant Corporation (the "Cendant Merger"). Cendant is a leading global
provider of consumer and business services including technology-driven
membership-based consumer services, travel services and real estate
services. The Company currently maintains each of the existing employee
savings plans of the merged companies.
PHH Corporation - On April 30, 1997, the Company issued
approximately 72.8 million shares of Company common stock in exchange for
all of the outstanding common stock of PHH Corporation ("PHH").
PHH is the world's largest provider of corporate relocation services
and also provides mortgage services and vehicle management services.
On May 1, 1998, the Company merged the former PHH Corporation Employee
Investment Plan into the Plan.
6. RECENT EVENTS
Plan Amendments
Effective January 1, 1998, in connection with the Cendant Merger, the
Company amended and restated the Plan. In connection with this restatement,
certain provisions of the Plan were revised, including eligibility
requirements, Company matching contributions, and the vesting of Plan
benefits. Such revised provisions are summarized as follows:
Eligibility Requirements - attainment of age eighteen and six months of
service.
Company Matching Contributions - equal to one hundred percent (100%) of
all eligible employees' salary deferral up to three percent (3%) of the
employee's compensation. An additional discretionary employer contribution
may be made, equal to up to fifty percent (50%) of the employee's salary
deferral contributions over three percent (3%) of the employees'
compensation, up to a maximum of six percent (6%) of the employees'
compensation.
Vesting Schedule - employer contributions credited to accounts of
employees who commence employment on or subsequent to January 1, 1998 shall
vest according to the following schedule:
Years of Vested
Service Interest
------------ --------
Fewer than 1 0%
1 34%
2 67%
3 100%
Every employee of the Company prior to January 1, 1998 shall continue
to be 100% vested in the employer contributions.
Company Restatement, Investigation and Litigation
On April 15, 1998, the Company announced that it had discovered accounting
irregularities in certain former CUC business units, which are part of the
Company's Alliance Marketing segment (formerly the Membership segment) and
the Audit Committee of the Company's Board of Directors has initiated an
investigation into such matters. Accordingly, the Company will restate
annual and quarterly net income and earnings per share for 1997 and may
restate certain other previous periods related to the former CUC
businesses. The investigation is expected to be completed during the summer
of 1998.
Since the aforementioned Company announcement, and prior to the date
hereof, class action lawsuits, certain legal actions and other legal
complaints have been filed against the Company, its predecessor, CUC, and
certain current and former officers and directors of the Company and CUC.
These complaints assert, among other things, claims under the Federal
Securities law, allege various breaches of fiduciary duty, mismanagement
and negligence. While it is not feasible to predict or determine the final
outcome of these proceedings, the Company does not expect these proceedings
to have any material adverse impact on the Plan.
The aforementioned announcement resulted in a decline in the per share
price of the Company common stock. At December 31, 1997, the Company Common
Stock Fund, valued at $9.5 million, was comprised of 275,926 shares of
Company common stock which had a closing price per share of $34.375. At
June 26, 1998, the closing price of the Company common stock was $21.4375
per share. At $21.4375 per share, the Company Common Stock Fund at
December 31, 1997 would have been valued at $5.9 million.
Company Mergers and Acquisitions
Jackson Hewitt Inc. On January 7, 1998, the Company completed the
acquisition of Jackson Hewitt Inc. ("Jackson Hewitt"), for approximately
$480.0 million in cash or $68 per share of Jackson Hewitt common stock.
Jackson Hewitt operates the second largest tax preparation service
franchise system in the United States with locations in 41 states. Jackson
Hewitt franchises a system of approximately 2,050 offices that specialize
in computerized preparation of federal and state individual income tax
returns.
The Harpur Group Ltd. On January 20, 1998, the Company completed the
acquisition of The Harpur Group Ltd. ("Harpur"), a leading fuel card and
vehicle management company in the United Kingdom ("UK"), from privately
held H-G Holdings, Inc. for approximately $186.0 million in cash plus
future contingent payments of up to $20.0 million over the next two years.
National Parking Corporation. On April 27, 1998, the Company completed the
acquisition of National Parking Corporation ("NPC") for $1.3 billion in
cash. NPC is the largest private (non-municipal) single car park operator
in the UK with approximately 500 locations. NPC has also developed a
broad-based roadside assistance group under the name of Green Flag. Green
Flag offers a wide-range of emergency support and rescue services to
approximately 3.5 million members.
Pending Acquisitions
Providian Auto and Home Insurance Company. On December 9, 1997, the Company
executed a definitive agreement to acquire Providian Auto and Home
Insurance Company ("Providian") for approximately $219.0 million in cash.
Closing is subject to receipt of required regulatory approval which
will require restated financial statements of the Company and other
customary conditions. Providian sells automobile insurance to
consumers through direct response marketing in 45 states and the District
of Columbia.
RAC Motoring Services. On May 1, 1998, the Company signed a letter of
intent and entered into exclusive negotiations with Royal Automobile Club
Limited ("RACL") to acquire their RAC Motoring Services subsidiary for
approximately $750.0 million in cash. Closing is subject to the execution
of a definitive agreement and approval by seventy-five percent of RACL's
voting members and is anticipated in the summer of 1998. RAC Motoring
Services is the second-largest roadside assistance company in the UK and
also owns the UK's largest driving school company.
American Bankers Insurance Group, Inc. On March 23, 1998, the Company
entered into a definitive agreement to acquire American Bankers Insurance
Group, Inc. ("American Bankers") for $67 per share in cash and stock, for
aggregate consideration of approximately $3.1 billion. The Company intends
to purchase 23.5 million shares of American Bankers at $67 per share
through its pending cash tender offer, to be followed by a merger in which
the Company will deliver Cendant shares with a value of $67 for each
remaining share of American Bankers common stock outstanding. The Company
has received Hart-Scott-Rodino antitrust clearance to acquire American
Bankers. The tender offer is subject to the receipt of tenders representing
at least 51 percent of the common stock of American Bankers as well as
customary closing conditions. The transaction is expected to be completed
following the restatement of the Company's financial statements, receipt of
and approval by American Bankers' shareholders and receipt of required
regulatory approvals, which require restated financial statements.
American Bankers provides affordable, specialty insurance products and
services through financial institutions, retailers and other entities
offering consumer financing.
In connection with the Company's acquisitions noted above, the Company may
elect to merge employee savings plans maintained by such acquired companies
if any, into the Plan.
7. INVESTMENT CONTRACTS WITH INSURANCE COMPANIES
Prior to February 1, 1996, the Cendant Stable Value Fund primarily invested
in investment contracts providing a guaranteed return on principal invested
over a specified time period. Therefore, contributions to such fund are
invested in the Merrill Lynch Retirement Preservation Trust. The crediting
interest rates at December 31, 1997 for various investment contracts ranged
from 4.8% to 7.7% and the average yields of the Cendant Stable Value Fund,
established on February 1, 1996 in connection with the transfer of assets
to the Trustee (See Note 2 - Change in Trustee), for the 1997 and 1996
plan years were 6.0% and 6.1%, respectively. All investment contracts
in the Cendant Stable Value Fund are fully benefit-responsive and
are recorded at contract value, which equals principal plus accrued
interest. The Cendant Stable Value Fund balance at December 31, 1997 of
$9,164,634 approximated the fair value.
8. PLAN SUMMARY BY FUND
The following tables represent the changes in net assets available for
benefits, summarized by fund, for the years ended December 31, 1997 and
1996 and the statements of net assets available for benefits as of December
31, 1997 and 1996.
CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
Company
Cendant Aim Aim Aim Common
Stable Charter Weingarten Constellation Stock
Value Fund Fund Fund Fund Fund Subtotal
---------- ----------- ----------- ----------- ----------- -----------
Net assets available for
benefits-beginning of year $ 8,173,059 $ 3,044,717 $ 2,108,625 $ 4,620,263 $ - $17,946,664
----------- ---------- ----------- ----------- ----------- -----------
Additions:
Contributions:
Plan contributions:
Plan participants 889,078 624,073 439,731 812,166 91,196 2,856,244
Employer 236,678 154,821 96,763 192,336 19,213 699,811
Rollovers 1,552,307 2,705,402 71,159 110,452 - 4,439,320
Realized and unrealized gains (losses) (918) 112,2 151,011 214,787 3,864,027 4,341,159
Dividend and interest income 608,367 758,432 444,559 433,174 2,388 2,246,920
----------- ----------- ----------- ----------- ----------- -----------
3,285,512 4,354,980 1,203,223 1,762,915 3,976,824 14,583,454
----------- ----------- ----------- ----------- ----------- -----------
Deductions:
Distributions:
Plan participants 1,419,063 380,262 277,607 516,175 1,962 2,595,069
Trustee fees 1,842 771 543 1,110 - 4,266
----------- ----------- ----------- ----------- ----------- -----------
1,420,905 381,033 278,150 517,285 1,962 2,599,335
----------- ----------- ----------- ----------- ----------- -----------
Net Additions (Deductions) 1,864,607 3,973,947 925,073 1,245,630 3,974,862 11,984,119
----------- ----------- ----------- ----------- ----------- -----------
NET TRANSFERS (873,032) (394,532) 38,080 (76,574) 5,510,077 4,204,019
------------ ------------ ----------- ------------ ----------- -----------
Net assets available for
benefits-end of year $ 9,164,634 $ 6,624,132 $ 3,071,778 $ 5,789,319 $ 9,484,939 $34,134,802
=========== =========== =========== =========== =========== ===========
CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1997
Templeton HFS Accrued
Foreign Common Employee Amounts
Subtotal Fund Stock Fund Loans Unallocated Total
----------- ---------- ---------- ----------- ----------- -------------
Net assets available for
benefits-beginning of year $17,946,664 $1,425,092 $5,694,266 $ 1,123,779 $ 571,817 $ 26,761,618
Additions:
Contributions:
Plan contributions:
Plan participants 2,856,244 403,505 1,003,999 - (289,820) 3,973,928
Employer 699,811 86,250 198,722 - (56,621) 928,162
Rollovers 4,439,320 94,703 130,637 1,428,138 - 6,092,798
Realized and unrealized
gains (losses) 4,341,159 (129,210) (1,241,882) - - 2,970,067
Dividend and interest income 2,246,920 225,900 18,417 - 10,783 2,502,020
------------ ----------- ----------- ---------- ------------ ------------
14,583,454 681,148 109,893 1,428,138 (335,658) 16,466,975
------------ ----------- ----------- ---------- ------------ -------------
Deductions:
Distributions:
Plan participants 2,595,069 164,514 572,010 124,250 - 3,455,843
Trustee fees 4,266 435 1,837 122 - 6,660
------------ ----------- ----------- ---------- ----------- ------------
2,599,335 164,949 573,847 124,372 - 3,462,503
------------ ----------- ----------- ---------- ----------- ------------
Net Additions (Deductions) 11,984,119 516,199 (463,954) 1,303,766 (335,658) 13,004,472
NET TRANSFERS 4,204,019 270,132 (5,230,312) 271,349 - (484,812)
------------ ----------- ------------ ---------- ------------ ------------
Net assets available for
benefits-end of year $ 34,134,802 $ 2,211,423 $ - $2,698,894 $ 236,159 $ 39,281,278
============ =========== =========== ========== ============ ============
CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1997
MFS Merrill Merrill Merrill Putnam
Emerging Lynch Lynch Lynch New
Cash Growth Growth Capital Inter Term Opportunity
Subtotal Fund Fund Fund Fund Bond Fund Fund Subtotal
------------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net assets available
for benefits-beginning
of year $ 26,761,618 $ 143,863 $ 554,626 $ 888,246 $ 285,003 $ 989,373 $ 1,238,781 $30,861,510
------------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
Additions:
Contributions:
Plan contributions:
Plan participants 3,973,928 82,699 376,513 689,676 389,772 250,490 684,162 6,447,240
Employer 928,162 4,208 70,293 151,819 93,614 55,955 154,950 1,459,001
Rollovers 6,092,798 23,313,409 147,735 2,696,733 2,972,949 102,094 270,367 35,596,085
Realized and unrealized
gains (losses) 2,970,067 - 142,206 (82,287) 38,435 21,408 374,091 3,463,920
Dividend and interest
income 2,502,020 - 17,428 427,209 197,839 79,828 63,688 3,288,012
------------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
16,466,975 23,400,316 754,175 3,883,150 3,692,609 509,775 1,547,258 50,254,258
------------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
Deductions:
Distributions:
Plan participants 3,455,843 42,699 61,767 122,145 60,669 113,973 151,810 4,008,906
Trustee fees 6,660 - 213 468 250 225 383 8,199
------------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
3,462,503 42,699 61,980 122,613 60,919 114,198 152,193 4,017,105
------------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Additions
(Deductions) 13,004,472 23,357,617 692,195 3,760,537 3,631,690 395,577 1,395,065 46,237,153
------------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
NET TRANSFERS (484,812) (16,434) 212,305 147,881 (46,119) 112,581 74,598 -
------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net assets available
for benefits-end
of year $ 39,281,278 $23,485,046 $ 1,459,126 $ 4,796,664 $ 3,870,574 $ 1,497,531 $ 2,708,444 $77,098,663
============ =========== =========== =========== =========== =========== =========== ===========
CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
Guaranteed Aim Aim Aim
Income Charter Weingarten Constellation SteinRoe
Fund Fund Fund Fund Fund Subtotal
----------- ----------- ------------ ------------- ----------- -----------
Net assets available for
benefits-beginning of year $ 9,089,176 $ 2,353,460 $ 1,848,084 $3,895,624 $ 1,051,199 $18,237,543
----------- ----------- ----------- ---------- ----------- -----------
Additions:
Contributions:
Plan contributions:
Plan participants 1,074,729 296,633 265,313 522,262 16,815 2,175,752
Employer 183,746 69,108 86,471 181,687 (33,642) 487,370
Rollovers 698,704 346,836 150,706 353,398 (5,231) 1,544,413
Realized and unrealized
gains (losses) - 193,994 125,178 14,808 (15,742) 318,238
Dividend and interest
income 465,064 194,224 235,602 347,663 4,442 1,246,995
----------- ----------- ----------- ----------- ----------- ----------
2,422,243 1,100,795 863,270 1,419,818 (33,358) 5,772,768
Deductions:
Distributions:
Plan participants 2,986,797 186,587 210,082 160,292 41,732 3,585,490
Trustee fees 606 1,803 6,365 3,061 - 11,835
----------- ----------- ----------- ----------- ----------- ----------
2,987,403 188,390 216,447 163,353 41,732 3,597,325
Net Additions (Deductions) (565,160) 912,405 646,823 1,256,465 (75,090) 2,175,443
NET TRANSFERS (350,957) (221,148) (386,282) (531,826) (976,109) (2,466,322)
------------ ------------ ------------ ------------ ------------ -----------
Net assets available for
benefits-end of year $ 8,173,059 $ 3,044,717 $ 2,108,625 $ 4,620,263 $ - $17,946,664
=========== =========== =========== =========== =========== ===========
CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1996
Templeton Company Accrued
Foreign Common Employee Amounts
Subtotal Fund Stock Fund Loans Unallocated Subtotal
----------- ----------- ----------- ----------- ----------- ------------
Net assets available for
benefits-beginning of year $18,237,543 $ 1,196,564 $ 2,855,993 $ 974,960 $ 349,841 $ 23,614,901
----------- ----------- ----------- ----------- ----------- ------------
Additions:
Contributions:
Plan contributions:
Plan participants 2,175,752 89,673 720,943 - 282,668 3,269,036
Employer 487,370 61,358 163,826 - (80,132) 632,422
Rollovers 1,544,413 155,772 310,432 108,760 - 2,119,377
Realized and unrealized
gains (losses) 318,238 127,701 1,106,517 - - 1,552,456
Dividend and interest
income 1,246,995 70,763 32,277 (260) 14,637 1,364,412
---------- ----------- ----------- ------------ ----------- ------------
5,772,768 505,267 2,333,995 108,500 217,173 8,937,703
---------- ----------- ----------- ----------- ----------- ------------
Deductions:
Distributions:
Plan participants 3,585,490 152,833 448,118 117,536 - 4,303,977
Trustee fees 11,835 733 (1,432) 160 - 11,296
---------- ----------- ------------ ----------- ----------- ------------
3,597,325 153,566 446,686 117,696 - 4,315,273
---------- ----------- ----------- ----------- ----------- ------------
Net Additions (Deductions) 2,175,443 351,701 1,887,309 (9,196) 217,173 4,622,430
NET TRANSFERS (2,466,322) (123,173) 950,964 158,015 4,803 (1,475,713)
----------- ------------ ----------- -------------- ------------ -----------
Net assets available for
benefits-end of year $17,946,664 $ 1,425,092 $ 5,694,266 $ 1,123,779 $ 571,817 $ 26,761,618
=========== =========== =========== =========== =========== ============
CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1996
MFS Merrill Merrill Merrill Putnam
Emerging Lynch Lynch Lynch New
Cash Growth Growth Capital Inter Term Opportunity
Subtotal Fund Fund Fund Fund Bond Fund Fund Total
------------ ---------- --------- ---------- ----------- ----------- ----------- ------------
Net assets available
for benefits-beginning
of year $ 23,614,901 $ - $ - $ - $ - $ - $ - $ 23,614,901
------------ ---------- --------- ---------- ----------- ----------- ----------- ------------
Additions:
Contributions:
Plan contributions:
Plan participants 3,269,036 (6,838) 41,657 48,286 32,669 111,599 110,331 3,606,740
Employer 632,422 - 8,304 9,763 5,978 24,890 24,820 706,177
Rollovers 2,119,377 54,243 344,760 691,809 199,729 125,762 719,341 4,255,021
Realized and unrealized
gains (losses) 1,552,456 - (18,935) (36,013) (6,562) (34,961) (26,855) 1,429,130
Dividend and interest
income 1,364,412 20,670 8,078 63,501 5,444 55,280 11,871 1,529,256
------------ ---------- --------- --------- ---------- ---------- ----------- ------------
8,937,703 68,075 383,864 777,346 237,258 282,570 839,508 11,526,324
------------ ---------- --------- --------- ---------- ---------- ----------- ------------
Deductions:
Distributions:
Plan participants 4,303,977 (125,937) 475 902 533 88,170 170 4,268,290
Trustee fees 11,296 - (37) (47) (20) 233 - 11,425
------------ ---------- --------- --------- ---------- ----------- ------------ ------------
4,315,273 (125,937) 438 855 513 88,403 170 4,279,715
------------ ---------- --------- --------- ---------- ----------- ------------ ------------
Net Additions (Deductions) 4,622,430 194,012 383,426 776,491 236,745 194,167 839,338 7,246,609
NET TRANSFERS (1,475,713) (50,149) 171,200 111,755 48,258 795,206 399,443 -
------------- ----------- --------- --------- ---------- ------------ ------------ ------------
Net assets available
for benefits-end
of year $ 26,761,618 $ 143,863 $ 554,626 $ 888,246 $ 285,003 $ 989,373 $ 1,238,781 $ 30,861,510
============ ========== ========= ========= ========== ========== =========== ============
NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
Cendant Aim Aim Aim
Stable Value Charter Weingarten Constellation
Fund Fund Fund Fund Subtotal
------------ ----------- ----------- ------------- -----------
Assets:
Investments $ 9,164,634 $ 6,624,132 $ 3,071,778 $ 5,789,319 $24,649,863
Interest and dividends
receivable - - - - -
Contributions receivable from:
Plan participants - - - -
Employer - - - - -
----------- ----------- ----------- ------------ -----------
Net assets available for
benefits $ 9,164,634 $ 6,624,132 $ 3,071,778 $ 5,789,319 $24,649,863
=========== =========== =========== ============ ===========
NET ASSETS AVAILABLE FOR BENEFITS (Continued)
DECEMBER 31, 1997
Templeton Company Accrued
Foreign Common Employee Amounts
Subtotal Fund Stock Fund Loans Unallocated Subtotal
----------- ----------- ----------- ----------- ----------- ------------
Assets:
Investments $24,649,863 $ 2,211,423 $ 9,484,939 $ 2,698,894 $ - $39,045,119
Interest receivable - - - - 25,420 25,420
Contributions receivable:
Plan participants - - - - 172,325 172,325
Employer - - - - 38,414 38,414
----------- ----------- ----------- ----------- ----------- -----------
Net assets available for
benefits $24,649,863 $ 2,211,423 $ 9,484,939 $ 2,698,894 $ 236,159 $39,281,278
=========== =========== =========== =========== =========== ===========
NET ASSETS AVAILABLE FOR BENEFITS (Continued)
DECEMBER 31, 1997
MFS Merrill Merrill Merrill Putnam
Emerging Lynch Lynch Lynch New
Cash Growth Growth Capital Inter Term Opportunity
Subtotal Fund Fund Fund Fund Bond Fund Fund Total
------------ ----------- --------- ------------ ----------- ----------- ----------- -----------
Assets:
Investments $ 39,045,119 $23,485,046 $1,459,126 $ 4,796,664 $ 3,870,574 $ 1,497,531 $ 2,708,444 $76,862,504
Interest receivable 25,420 - - - - - - 25,420
Contributions receivable:
Plan participants 172,325 - - - - - - 172,325
Employer 38,414 - - - - - - 38,414
------------ ----------- --------- ------------ ----------- ----------- ----------- -----------
Net assets available
for benefits $ 39,281,278 $23,485,046 $1,459,126 $ 4,796,664 $ 3,870,574 $ 1,497,531 $ 2,708,444 $77,098,663
============ =========== ========== ============ =========== =========== =========== ===========
NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
Guaranteed Aim Aim Aim
Income Charter Weingarten Constellation
Fund Fund Fund Fund Subtotal
----------- ----------- ----------- -------------- -----------
Assets:
Investments $ 8,173,059 $ 3,044,717 $ 2,108,625 $ 4,620,263 $17,946,664
Interest receivable - - - - -
Contributions receivable:
Plan participants - - - - -
Employer - - - - -
----------- ----------- ----------- ------------ -----------
Net assets available for
benefits $ 8,173,059 $ 3,044,717 $ 2,108,625 $ 4,620,263 $17,946,664
=========== =========== =========== ============ ===========
NET ASSETS AVAILABLE FOR BENEFITS (Continued)
DECEMBER 31, 1996
Templeton Company Accrued
Foreign Common Employee Amounts
Subtotal Fund Stock Fund Loans Unallocated Subtotal
----------- ----------- ----------- ----------- ----------- -----------
Assets:
Investments $17,946,664 $ 1,425,092 $ 5,694,266 $ 1,123,779 $ - $26,189,801
Interest receivable - - - - 14,637 14,637
Contributions receivable:
Plan participants - - - - 462,145 462,145
Employer - - - - 95,035 95,035
----------- ----------- ----------- ----------- ----------- -----------
Net assets available for
benefits $17,946,664 $ 1,425,092 $ 5,694,266 $ 1,123,779 $ 571,817 $26,761,618
=========== =========== =========== =========== =========== ===========
NET ASSETS AVAILABLE FOR BENEFITS (Continued)
DECEMBER 31, 1996
MFS Merrill Merrill Merrill Putnam
Emerging Lynch Lynch Lynch New
Cash Growth Growth Capital Inter Term Opportunity
Subtotal Fund Fund Fund Fund Bond Fund Fund Total
----------- ---------- --------- ----------- ---------- ---------- ----------- -------------
Assets:
Investments $26,189,801 $ 143,863 $ 554,626 $ 888,246 $ 285,003 $ 989,373 $ 1,238,781 $ 30,289,693
Interest receivable 14,637 - - - - - - 14,637
Contributions receivable:
Plan participants 462,145 - - - - - - 462,145
Employer 95,035 - - - - - - 95,035
----------- ---------- --------- ----------- ---------- ---------- ----------- -------------
Net assets available
for benefits $26,761,618 $ 143,863 $ 554,626 $ 888,246 $ 285,003 $ 989,373 $ 1,238,781 $ 30,861,510
=========== ========== ========== =========== ========== ========== =========== ============
SUPPLEMENTAL SCHEDULES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
Contract or
Interest Maturity Number of Current
Description Rates Dates Units/Shares Cost Value
- ----------- ------------- ------------- -------------- -------------- ------------
Cendant Stable Value Fund 9,164,634 $ 9,165,192 $ 9,164,634
AIM Charter Fund 538,110 6,440,665 6,624,132
AIM Weingarten Fund 154,438 2,954,452 3,071,778
AIM Constellation Fund 219,459 5,371,458 5,789,319
Templeton Foreign Fund 222,254 2,284,539 2,211,423
Company Common Stock Fund 275,926 5,621,333 9,484,939
Employee Loans Receivable Prime + 1%; 1 month to 2,698,894 2,698,894 2,698,894
5 years
MFS Emerging Growth Fund 40,330 1,351,794 1,459,126
Merrill Lynch Growth Fund 167,423 4,952,012 4,796,664
Merrill Lynch Capital Fund 112,158 3,851,569 3,870,574
Merrill Lynch Corp. Inter Term Bond Fund 129,544 1,496,683 1,497,531
Putnam New Opportunity Fund 55,672 2,384,931 2,708,444
Cash Fund 23,485,046 23,485,046
-------------- ------------
$ 72,058,568 $ 76,862,504
============== ============
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
Purchases Sales
Identity of Description Purchase Number of Selling Number of Net Gain
Party Involved of Assets Price Transactions Price Transactions or (Loss)
- -------------- -------------- ------------- ------------ ----------- ------------- -----------
Cendant Stable Value Fund Investment $ 5,036,034 650 $ - - $ -
Contract 4,044,840 - 4,044,480 428 (360)
AIM Charter Fund Mutual Fund 4,655,129 315 - - -
1,091,175 - 1,188,029 351 96,854
AIM Weingarten Fund Mutual Fund 1,306,275 279 - - -
443,937 - 494,427 297 50,490
AIM Constellation Fund Mutual Fund 2,093,062 323 - - -
990,535 - 1,140,598 412 150,063
Templeton Foreign Mutual Fund 1,414,083 272 - - -
Fund 463,025 - 500,389 265 37,364
Company Common Common Stock 3,347,544 417 - - -
Stock Fund 1,710,211 - 2,219,180 492 508,969
Merrill Lynch Growth Mutual Fund 4,689,847 299 - - -
Fund 662,728 - 699,142 191 36,414
Merrill Lynch Capital Mutual Fund 4,025,862 222 - - -
Fund 467,494 - 480,131 143 12,637
Putnam New Opportunity Mutual Fund 1,624,450 255 - - -
Fund 506,060 - 529,877 210 23,817
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan Committee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
Cendant Corporation
Employee Savings Plan
By:
/s/ Scott E. Forbes
Scott E. Forbes
Executive Vice President and
Chief Accounting Officer
Date: June 29, 1998 Cendant Corporation
EXHIBIT INDEX
Exhibit
23.1 Consent of Deloitte & Touche LLP
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-42549 of Cendant Corporation on Form S-8 and of our report dated June 26,
1998, appearing in this Annual Report on Form 11-K of Cendant Corporation
Employee Savings Plan (formerly HFS Incorporated Employee Savings Plan), for the
year ended December 31, 1997.
/s/ Deloitte & Touche LLP
Parsippany, NJ
June 26, 1998
