Cendant Corp. today announced that company officials are meeting with institutional investors in connection with the planned spin-off of Realogy Corp., a new company that will incorporate Cendant’s real estate-related operations.

Cendant’s board of directors is expected to declare the dividend of Realogy Corp. common stock during the week of June 5, according to the announcement. “It is expected that Realogy common stock will begin trading on the New York Stock Exchange on a ‘when issued’ basis in mid-June and as a separate public company by the end of June,” the company also reported.

Cendant’s Real Estate Services Division, which will become Realogy Corp. upon completion of its spin-off from Cendant, is the world’s largest residential real estate brokerage franchisor, the largest U.S. residential real estate brokerage firm, a provider of relocation services, and a provider of title and settlement services. Cendant’s real estate brands include Century 21, Coldwell Banker, Coldwell Banker Commercial, ERA, Sotheby’s International Realty, NRT Inc., Cartus and Title Resource Group.

Realogy has applied to have its common stock listed on the New York Stock Exchange under the symbol “H.”

The company noted that it has lowered its 2006 revenue and EBITDA (earnings before interest, taxes, depreciation and amortization) expectations for Realogy. Full-year revenue for 2006 is expected to be about $7.1 billion, company officials announced, with pro forma EBITDA of about $1 billion before restructuring and separation-related expenses and assuming the spin-off had occurred Jan. 1, 2006.

“These estimates are down from the company’s prior forecast, reflecting the company’s, the National Association of Realtors’ and (the Federal National Mortgage Association’s) most recent projections with respect to existing-home sales for the balance of 2006,” the announcement states.

In 2005, Cendant’s company-owned and franchise real estate brokerage offices pulled in about 25 percent of all broker commissions, and the company’s real estate operations that make up Realogy had revenue of $7.1 billion and EBITDA of $1.2 billion.

Information that will be presented during upcoming investor meetings, including additional pro forma 2006 estimates and the Realogy Form 10 filing are available online at Cendant.com.

“The balance of the separation plan continues on schedule, and the company’s full-year 2006 estimated financial results, excluding the effects of the separation, for each of Wyndham Worldwide, Travelport and Avis Budget remain unchanged from Cendant’s most recent estimate,” according to the announcement.

For second-quarter 2006, the company expects revenue from core operations for Cendant to increase modestly and EBITDA from core operations (before separation costs) to decrease 5 percent to 10 percent versus second-quarter 2005. The company expects EBITDA (before separation costs) to increase at Hospitality Services and Timeshare Resorts, to be flat at Travelport, and to be down at Avis Budget. Realogy’s second-quarter EBITDA (before separation costs) is expected to be down approximately 20 percent year-over-year, reflecting the moderation in home-sale activity.

The company also announced progress in pursuing an alternative plan to sell Travelport, rather than spin it off as a separate company, “making a sale of Travelport the more likely alternative.” If there is a sale, the company “expects that the majority of the net proceeds (after transaction costs, taxes and repayment of debt incurred by Travelport to fund repayment of Cendant’s outstanding corporate debt) will be paid to Realogy and Wyndham Worldwide. Each of Realogy and Wyndham Worldwide will be required to use these proceeds to repay indebtedness incurred by them to fund the repayment of Cendant’s corporate debt,” according to the announcement.

There is no assurance, though, that Travelport will be sold.

“After the spin-offs of Realogy and Wyndham Worldwide and upon the sale or spin-off of Travelport, Cendant will be a separate publicly held company and will operate its Avis and Budget vehicle rental operations as Avis Budget Group Inc.”


Send tips or a Letter to the Editor to glenn@inman.com or call (510) 658-9252, ext. 137.

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