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 million, the entire loss will be recorded in 2005 while some or all of the expected insurance recovery may not be recorded until 2006,” he said.

In response, the company has revised its 2005 guidance to not include any offset for insurance recoveries. Revised earnings per share projections from continuing operations for year-end are now $1.11 to $1.18 per share.

Cendant said it does not expect that its results of operations in 2006 will be materially impacted by this event, with the exception of the potential positive impact of insurance recoveries.

Nelson further commented: “We have also begun to move forward with plans to assist in the rebuilding effort within the region.”

Cendant’s current efforts include a special fundraising campaign on behalf of the American Red Cross Hurricane 2005 Relief Fund through which the Cendant Charitable Foundation will be matching employee donations up to an aggregate $500,000.

In addition, Cendant’s Car Rental Group, Hotel Group and Timeshare Resort Group are all working with the Federal Emergency Management Agency, the Department of Homeland Security and the American Red Cross to provide assistance, including access to housing and rental vehicles for emergency response personnel moving into the area to coordinate relief efforts.

Separately, the company announced that it has utilized $473 million of cash, net of proceeds from option exercises, for the repurchase of its common stock during third quarter 2005, bringing its year-to-date use of cash for share repurchases, net of proceeds from option exercises, to $810 million.

Cendant owns NRT, one of the largest residential real estate brokerages in the nation, and is the franchisor of several major real estate brands including Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA and Sotheby’s International Realty.


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