|
|
PARSIPPANY, NJ AND STAMFORD, CT, JULY 28, 1998--Cendant
Corporation (NYSE:CD) today announced that the Audit Committee of its Board
of Directors had received an oral summary of the conclusions of Arthur
Andersen LLP's forensic audit of the accounting records of the former CUC
International. Arthur Andersen reported that its investigation was virtually
complete. Deloitte & Touche LLP also reported on the status of its
audit and indicated that it was substantially complete. Their conclusions
were consistent with the Company's July 14 $0.22 to $0.28 per share estimate
of the aggregate restatement of net income before one-time and extraordinary
items required to correct 1997 accounting irregularities and accounting
errors.
The Company also now expects the restatement will reverse significantly more 1997 one-time merger charges than the $200 million amount ($0.22 per share) estimated on July 14. This reversal of one-time merger charges will not benefit 1997 net income before one-time and extraordinary items. It will, however, have the effect of further reducing the impact of the restatement on 1997 net income and on Cendant's shareholders' equity. Cendant expects to issue full restated and audited historical financial statements in early August. Deloitte & Touche acts as independent auditors to Cendant and has replaced Ernst & Young as the auditor of these historical statements. Arthur Andersen's forensic audit was commissioned by Willkie Farr & Gallagher as part of its overall investigation of the accounting irregularities on behalf of the Audit Committee of the Cendant Board. The Audit Committee's report of that investigation should be complete in late August. Certain matters discussed in the news release are forward-looking statements,
as defined in the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to a number of known and unknown
risks and uncertainties including, but not limited to, the outcome of the
Audit Committee's investigation; uncertainty as to the Company's future
profitability; the Company's ability to develop and implement operational
and financial systems to manage rapidly growing operations; competition
in the Company's existing and potential future lines of business; the Company's
ability to integrate and operate successfully acquired businesses and the
risks associated with such businesses; the Company's ability to obtain
financing on acceptable terms to finance the Company's growth strategy
and for the Company to operate within the limitations imposed by financing
arrangements; uncertainty as to the future profitability of acquired businesses;
and other factors. Other factors and assumptions not identified above were
also involved in the derivation of these forward-looking statements, and
the failure of such other assumptions to be realized as well as other factors
may also cause actual results to differ materially from those projected.
The Company assumes no obligation to update these forward-looking statements
to reflect actual results, changes in assumptions or changes in other factors
affecting such forward-looking statements.
Media Contacts: Jim Fingeroth/Roanne Kulakoff Kekst and Company (212) 521-4800 Investor Contact: David M. Johnson (973) 496-7909
|
|
|
Walter Forbes Steps Down as Cendant Chairman - Forbes Severance includes $35 Million Cash and Limited Release / July 1998 |