Industry News

Katrina’s financial impact hits real estate company

Cendant expects up to $70 million loss excluding insurance recoveries

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Real estate franchise giant Cendant expects to lose about $35 million to $70 million on pretax income excluding insurance recoveries, the company said today. The company said it continues to focus on the safety and well being of employees on affected areas. "Like all companies doing business in the Gulf Coast and Southeast, our operations in those areas have been affected by Hurricane Katrina," said Ronald L. Nelson, Cendant's chief financial officer. The estimate of $35 million to $70 million includes $15 million to $40 million related to asset impairment losses, primarily timeshare properties and rental cars, and $20 million to $30 million related to revenues spread across the company's real estate and travel businesses, Nelson said. "Although we expect that approximately $10 to $35 million of these losses will ultimately be recovered through insurance (excluding the potential for business interruption recoveries), making the net impact to our pretax income about $25 to $35 mil...