UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Form 8-K

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

Date of Report (Date of earliest event reported) February 7, 2005 (February 7, 2005)

Cendant Corporation

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

None

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

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

Table of Contents

Item 2.02 Results of Operations and Financial Condition.

     On February 7, 2005, we reported our fourth quarter and full year 2004 results. Our fourth quarter and full year 2004 results are discussed in detail in the press release attached hereto as Exhibit 99.1, which is incorporated by reference in its entirety.

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

Item 7.01 Regulation FD Disclosure.

     On February 7, 2005, we announced that we would incur a charge to fourth quarter 2004 earnings related to a third party dispute. The press release announcing this charge is attached as Exhibit 99.2 and is incorporated by reference herein.

     The information in this item is being furnished, not filed, pursuant to Regulation FD. Accordingly, the information in this item will not be incorporated by reference into any registration statement filed by Cendant under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this item is not intended to, and does not, constitute a determination or admission by Cendant that the information in this item is material or complete, or that investors should consider this information before making an investment decision with respect to any security of Cendant or any of its affiliates.

Item 9.01 Financial Statements and Exhibits.

     (c)   Exhibits

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SIGNATURE

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

Date: February 7, 2005

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CENDANT CORPORATION
CURRENT REPORT ON FORM 8-K
Report Dated February 7, 2005
 

EXHIBIT INDEX

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Exhibit 99.1

CENDANT REPORTS RECORD RESULTS
FOR FOURTH QUARTER AND FULL YEAR 2004

4Q 2004 EPS from Continuing Operations Increased 18% to $0.33
Versus $0.28 in 4Q 2003

Full Year 2004 EPS from Continuing Operations Increased 27% to $1.71
Versus $1.35 in 2003

Full Year 2004 Net Cash Provided by Operating Activities Was $5.4 Billion

Full Year 2004 Free Cash Flow Was $2.2 Billion

New York, February 7, 2005 – Cendant Corporation (NYSE: CD) today reported record results for fourth quarter and full year 2004. Fourth quarter EPS from Continuing Operations increased 18% to $0.33, versus $0.28 in fourth quarter 2003, and full year 2004 EPS from Continuing Operations increased 27% to $1.71, versus $1.35 in 2003. Full year 2004 Revenue increased 10% to $19.8 billion and Net Income was $2.1 billion.

The fourth quarter results reflected strong performance in the Company’s real estate and travel units, including record fourth quarter revenues in its real estate franchise and brokerage, employee relocation, car rental, fuel card, GDS and online travel businesses. A number of items, both positive and negative, were included in fourth quarter results but did not materially impact earnings per share in the aggregate.

Cendant’s President and Chief Financial Officer, Ronald L. Nelson, stated: “The last twelve months have been a watershed year for Cendant, during which we began the process of positioning the Company for accelerated, long-term growth in our core travel and real estate businesses. We divested non-core assets, including our tax preparation, mortgage and fleet management businesses, and are progressing towards the divestiture of our Wright Express fuel card business and Marketing Services division in 2005. At the same time, we are re-investing in our travel and real estate businesses. With the recent acquisition of Orbitz and pending acquisitions of ebookers and Gullivers Travel Associates, we will have secured a leading worldwide position in the fast-growing online travel industry, while substantially enhancing our merchant strategy with access to significant amounts of hotel inventory.

“2004 was also a year of solid operational growth. Excluding the results of PHH, which was recently spun-off, our operations generated organic revenue and EBITDA growth well in excess of our long-term targets. In our real estate vertical, the combination of our leading market position in residential real estate, together with

prolonged strength in that market, enabled our Real Estate Franchise and Operations segment to generate organic revenue growth of 15% and organic EBITDA growth of 19%. Across our travel vertical, a modestly improved environment, together with solid execution on our key business initiatives, enabled each of our travel related segments to generate organic growth. In particular, our Hospitality Services segment generated organic revenue and EBITDA growth of 11% and 15%, respectively, and our Vehicle Services segment produced organic revenue and EBITDA growth of 3% and 39%, respectively.

“2005 will be a transitional year as we integrate acquired businesses and reinvest the proceeds from divestitures, as well as our over $3 billion of expected Net Cash Provided by Operating Activities and almost $2 billion of expected Free Cash Flow. Beyond 2005, we expect that the absence of transaction related expenses, together with continued reinvestment in our core real estate and travel businesses, will enable us to generate accelerated growth. At the same time, we will also continue to return capital to shareholders by deploying incremental cash to repurchase stock and increase our dividend.”

Fourth Quarter 2004 Results of Reportable Segments
The following discussion of operating results focuses on revenue and EBITDA for each of our reportable operating segments. EBITDA 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. EBITDA is the measure that we use to evaluate performance in each of our reportable operating segments. Our presentation of EBITDA may not be comparable to similarly titled measures used by other companies. Revenue and EBITDA are expressed in millions.

Real Estate Franchise and Operations
(Consisting of the Company’s real estate franchise brands, brokerage operations and relocation services)

Revenue and EBITDA increased due to strong growth in royalties earned by our real estate franchise businesses, real estate commissions earned by our NRT real estate brokerage unit, and service fees earned by Cendant Mobility, our relocation services business. Real estate franchise royalty and marketing fund revenue increased 15%, primarily due to a 14% increase in the average price of homes sold. Revenue generated by NRT increased 16%, primarily due to an 18% increase in the average price of homes sold, which included the impact of acquisitions of certain higher-end real estate brokers. The increase in the average price of homes sold at both our franchised and owned brokerage operations continues to reflect the broad-based strength of the residential real estate market, along with historically low levels of unsold inventory. Closed sides volume modestly declined due primarily to the continued impact of hurricanes in the third quarter. Revenues from our relocation

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services business increased 21%, principally resulting from higher referral volume and a higher average fee per referral.

Mortgage Services
(Consisting of mortgage services and settlement services)

Revenue and EBITDA decreased due to lower production revenues resulting from the industry-wide decline in mortgage refinancing volumes, as expected. This decline was partially offset by a $57 million increase in net revenues from mortgage servicing activities, driven by a 9% increase in the average size of the servicing portfolio and lower net amortization of our servicing asset.

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

Revenue was positively impacted by growth in virtually all of our hospitality businesses. Revenue from RCI and lodging franchise each increased 13% and revenue from the Timeshare Resort Group increased 8%, primarily reflecting higher revenue per transaction. The May 2004 acquisition of Landal Green Parks and the October 2004 acquisition of Canvas Holidays Limited by our European Vacation Rental Group positively impacted revenue by $40 million but modestly reduced EBITDA due to the seasonality of these businesses. In addition, EBITDA was reduced due to costs associated with prior period acquisitions.

Travel Distribution Services
(Consisting of electronic global distribution services for the travel industry, corporate and consumer online travel services, and travel agency services)

The acquisition of Orbitz, Inc. in November 2004 contributed $37 million of revenue and reduced EBITDA by $8 million due to costs incurred to integrate our online travel businesses. In addition, revenue and EBITDA were both positively impacted by the acquisitions of Flairview Travel in second quarter 2004 and Travel 2/ Travel 4 in fourth quarter 2003. Apart from these acquisitions, revenue and EBITDA benefited from a 34% increase in our global on-line travel bookings, while revenue decreased and EBITDA benefited from our efforts to shift our off-line travel business to on-line channels. The growth in on-line bookings was substantially a result of increased

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conversion rates and more visitors at CheapTickets.com, which also experienced improved margins. Galileo worldwide booking fees were unchanged year-over-year as improvements in global yield were offset by a 1% reduction in global volume. In addition, year-over-year EBITDA comparisons were negatively impacted by approximately $10 million due to higher reserves taken for bad debt expense, including to reserve for receivables from bankrupt airlines.

Vehicle Services
(Consisting of vehicle rental, vehicle management services and fleet card services)

Revenue and EBITDA increased primarily due to growth at our Avis and Budget car rental operations and operating efficiencies realized from the successful integration of Budget. Revenue and EBITDA were also positively impacted by growth in our Wright Express fuel card management business and by our former PHH Fleet Management unit’s February 2004 acquisition of First Fleet Corporation. Avis and Budget car rental experienced increases in rental day volume of 3% and 18%, respectively, which were partially offset by decreases in price of 2% and 8%, respectively. The increased volume and reduced pricing at Budget resulted primarily from the Company’s strategic decision to reduce its cost structure and pricing to be more competitive with other leisure-focused car rental brands. In addition, pricing at both Avis and Budget was negatively impacted by higher industry fleet levels due to increased incentives from car manufacturers. The impact of lower prices on revenues was partially offset in EBITDA by lower fleet costs.

Marketing Services
(Consisting of individual membership products, insurance-related services and financial services enhancement products)

Revenue and EBITDA benefited from the sale of commission rights related to our long-term care insurance business and the termination of a contractual relationship with a third-party marketing partner, both of which occurred in fourth quarter 2004 and were partially offset by the absence of royalties generated under a contractual relationship that was terminated in the previous quarter. These benefits were more than offset in EBITDA by a verdict rendered in connection with a contractual dispute of approximately $25 million and slightly higher amortization of deferred expenses. The net impact of these items was an increase in revenue of $33 million and a reduction in EBITDA of $9 million. Revenue and EBITDA were also positively impacted by growth in our individual membership business.

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Recent Achievements and Strategic Initiatives
The Company’s results in the fourth quarter enabled it to achieve its full year 2004 cash flow generation, debt reduction and share repurchase goals:

In addition, the Company recently:

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Outlook
The Company projects the following EPS:

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The Company also announced the following detailed financial projections for full year 2005 (in millions):

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Investor Conference Call
Cendant will host a conference call to discuss the fourth quarter results on Tuesday, February 8, 2005, at 11:00 a.m. (ET). Investors may access the call live at www.cendant.com or by dialing 719-457-2666. A web replay will be available at www.cendant.com following the call. A telephone replay will be available from 2:00 p.m. (ET) on February 8, 2005 until 8:00 p.m. (ET) on February 15, 2005 at 719-457-0820, access code: 5253453.

Cendant Corporation is primarily a provider of travel and residential real estate services. With approximately 80,000 employees, New York City-based Cendant provides these services to businesses and consumers in over 100 countries. More information about Cendant, its companies, brands and current SEC filings may be obtained by visiting the Company’s Web site at www.cendant.com.

A registration statement relating to the shares of Wright Express common stock has been filed with the Securities and Exchange Commission but has not yet become effective. The shares of Wright Express common stock may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the shares of Wright Express common stock in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. A copy of the prospectus relating to the shares of Wright Express common stock may be obtained, when available, from J.P. Morgan Securities Inc., Prospectus Department, One Chase Manhattan Plaza, New York, NY 10081 (Telephone: (212) 552-5164); Credit Suisse First Boston LLC, Prospectus Department, One Madison Avenue, Level 1B, New York, New York 10010 by faxing a request to (212) 325-8057; or Merrill Lynch & Co. at 4 World Financial Center, New York, New York 10080 (Telephone: (212) 449-1000).

Cendant can give no assurances that the Wright Express initial public offering or the disposition of the Marketing Services Division will be consummated. Prior to consummating the initial public offering, Cendant and Wright Express will need to complete the negotiation of financial and other terms, including the initial public offering price. In addition, consummation of the initial public offering is subject to market conditions and other factors outside of the control of Cendant and Wright Express.

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Statements about future results made in this release, including the projections and the statements attached hereto constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and the current economic environment. The Company cautions that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in Cendant’s Form 10-Q for the quarter ended September 30, 2004.

Such forward-looking statements include projections. Such projections were not prepared in accordance with published guidelines of the American Institute of Certified Public Accountants or the SEC regarding projections and forecasts, nor have such projections been audited, examined or otherwise reviewed by independent auditors of Cendant or its affiliates. In addition, such projections are based upon many estimates and are inherently subject to significant economic, competitive and other uncertainties and contingencies, including but not limited to the impact of war or terrorism, which are beyond the control of management of Cendant and its affiliates. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by Cendant or its affiliates that the projections will prove to be correct.

This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is contained in the tables to this release and on our web site at www.cendant.com.

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Tables Follow

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Table 1
(page 1 of 2)

Cendant Corporation and Subsidiaries
SUMMARY DATA SHEET
(Dollars in millions, except per share data)

Table 1
(page 2 of 2)

Cendant Corporation and Subsidiaries
SUMMARY DATA SHEET
(Dollars in millions, except per share data)

Table 2

Cendant Corporation and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In millions, except per share data)

Table 3
(page 1 of 2)

Cendant Corporation and Affiliates
SEGMENT REVENUE DRIVER ANALYSIS
(Revenue dollars in thousands)

Table 3
(page 2 of 2)

Cendant Corporation and Affiliates
SEGMENT REVENUE DRIVER ANALYSIS
(Revenue dollars in thousands)

Table 4

Cendant Corporation and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
(In billions)

Table 5

Cendant Corporation and Subsidiaries
SCHEDULE OF CORPORATE DEBT (A)
(In millions)