SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to __________
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COMMISSION FILE NO. 1-11402
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CENDANT CORPORATION
EMPLOYEE SAVINGS PLAN
(FULL TITLE OF THE PLAN)
CENDANT CORPORATION
(NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN)
9 WEST 57TH STREET
NEW YORK, NEW YORK 10019
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
CENDANT CORPORATION
EMPLOYEE SAVINGS PLAN
TABLE OF CONTENTS
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PAGE
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999
Statements of Net Assets Available for Benefits
as of December 31, 2000 and 1999 2
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 2000 and 1999 3
Notes to Financial Statements 4-8
SUPPLEMENTAL SCHEDULE:
Schedule of Assets Held for Investment Purposes at End of Year 10
SCHEDULES REQUIRED UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
("ERISA"), OTHER THAN THE SCHEDULE LISTED ABOVE, ARE OMITTED BECAUSE OF THE
ABSENCE OF THE CONDITIONS UNDER WHICH THEY ARE REQUIRED.
INDEPENDENT AUDITORS' REPORT
To the Trustees and Participants of
Cendant Corporation Employee Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Cendant Corporation Employee Savings Plan (the "Plan") as of December 31,
2000 and 1999, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2000 and 1999, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes as of December 31, 2000 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This schedule is the responsibility of the Plan's
management. Such schedule has been subjected to the auditing procedures applied
in our audit of the basic 2000 financial statements and, in our opinion, is
fairly stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
New York, New York
June 20, 2001
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CENDANT CORPORATION EMPLOYEE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
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2000 1999
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ASSETS
Investments, at fair value $ 367,896,275 $ 335,037,627
Contributions receivable from:
Participants 914,351 168,879
Employer 596,480 63,256
Interest and dividends receivable 76,127 59,331
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Total receivables 1,586,958 291,466
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NET ASSETS AVAILABLE FOR BENEFITS $ 369,483,233 $ 335,329,093
=============== ===============
See notes to financial statements.
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CENDANT CORPORATION EMPLOYEE SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
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2000 1999
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ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions from:
Participants $ 34,989,945 $ 25,740,022
Employer 15,913,326 11,718,967
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Total contributions 50,903,271 37,458,989
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Investment income:
Net appreciation (depreciation) in fair value of investments (96,825,650) 57,538,512
Interest and dividends 20,013,961 14,041,884
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Total investment income (loss) (76,811,689) 71,580,396
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Total additions (25,908,418) 109,039,385
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Net benefits paid to participants 36,933,618 23,637,283
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Total deductions 36,933,618 23,637,283
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NET INCREASE (DECREASE) IN NET ASSETS
AVAILABLE FOR BENEFITS (62,842,036) 85,402,102
TRANSFER IN OF ASSETS FROM MERGED PLAN(S) 96,996,176 12,488,238
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 335,329,093 237,438,753
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NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 369,483,233 $335,329,093
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See notes to financial statements.
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CENDANT CORPORATION EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999
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1. DESCRIPTION OF PLAN
The following description of Cendant Corporation Employee Savings Plan (the
"Plan") provides only general information. Participants should refer to the
Summary Plan Description or the Plan documents, which are available from
Cendant Corporation, ("Cendant" or the "Company" or the "Plan Sponsor") for
a more complete description of the Plan's provisions.
The Plan is a defined contribution plan established for certain eligible
employees of Cendant Corporation that provides Internal Revenue Code
Section 401(k) employee salary deferral benefits and additional employer
contributions for the Company's employees. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA"). The Plan was amended various times during 2000 and 1999 to allow
for existing plans of companies acquired by Cendant to be combined into the
Plan (see "Rollovers").
The following is a summary of certain Plan provisions:
a. ELIGIBILITY - Each regular employee (as defined in the Plan) of the
Company is eligible to participate in the Plan on the entry date
following both attainment of age 18 and completion of six months of
service.
b. EMPLOYEE CONTRIBUTIONS - Participants may elect to make pre-tax
contributions up to fifteen percent of pre-tax annual compensation up
to a maximum of $10,500 for 2000 and $10,000 for 1999. Participants
may change their investment allocations between funds on a daily
basis. Participants should refer to each fund's prospectus for a more
complete description of the risks associated with each fund.
c. EMPLOYER CONTRIBUTIONS - The Company makes contributions to the Plan
equal to 100% of all eligible employees' salary deferral up to 3% of
the employees' eligible compensation. An additional discretionary
employer contribution may be made, no greater than 50% of the
employees' eligible salary deferral contributions over 3% of the
employees' compensation, up to a maximum of 6% of the employees'
eligible compensation.
d. ROLLOVERS - All employees, upon commencement of employment, are
provided the option of making a rollover contribution into the Plan in
accordance with Internal Revenue Service ("IRS") regulations.
During 2000, approximately $97.0 million in plan assets associated
with the qualified plan of Cendant Membership Services, a wholly-owned
subsidiary of Cendant Corporation, were merged into the Plan and are
included in Transfer In of Assets from Merged Plan(s) in the Statement
of Changes in Net Assets Available for Benefits for the year ended
December 31, 2000.
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During 1999, in connection with companies previously acquired by
Cendant, the Company completed the transfer of assets from the
existing plans of such acquired companies, including Electronic Realty
Associates, Inc., Credential Services International, Inc., Jackson
Hewitt Inc., Resort Computer Corporation and Home Mortgage Network.
In addition, the accumulated plan benefits of the reservation center
employees of Avis Group Holdings, Inc. were transferred into the Plan.
The resulting plan transfers accounted for plan assets of
approximately $12.5 million being merged into the Plan in 1999 and are
included in Transfer In of Assets from Merged Plan(s) in the
Statements of Changes in Net Assets Available for Benefits for the
year ended December 31, 1999.
e. VESTING SCHEDULE - Employer contributions credited to accounts of
employees who commenced employment on or subsequent to January 1, 1998
vest according to the following schedule:
YEARS OF VESTED
SERVICE INTEREST
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Fewer than 1 0%
1 34%
2 67%
3 100%
Employer contributions credited to accounts of employees who commenced
employment prior to January 1, 1998 are 100% vested in such
contributions.
f. LOAN PROVISION - Participants may borrow from their fund accounts up
to the lesser of $50,000 or 50% of their vested balance, provided the
vested balance is at least one thousand dollars. Loan terms range from
1-5 years or up to 15 years for the purchase of a primary residence
and are secured by the participant's vested account balance. Loan
repayments must be made through payroll deductions over a term not to
exceed five years unless the proceeds of the loan are used to purchase
the principal residence of the employee, in which case the term is not
to exceed fifteen years. The loans bear interest at a rate
commensurate with the prime rate plus one percent. Principal and
interest is paid ratably through periodic payroll deductions.
g. PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contributions and allocations of the Company's
contribution and Plan earnings. Allocations are based on participant
earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
h. BENEFITS PAID TO PARTICIPANTS - Participants are entitled to withdraw
all or any portion of their after-tax contributions. Participants may
make full or partial withdrawals of funds in any of their accounts
upon attaining age 59 1/2 or for hardship in certain circumstances,
as defined in the Plan, before that age. Distributions to terminated
employees are recorded in each fund's financial statements when paid.
Amounts payable to participants who have
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terminated participation in the Plan were approximately $1.2 million
and $0.6 million at December 31, 2000 and 1999, respectively.
i. FORFEITED ACCOUNTS - Forfeited balances of participants' nonvested
accounts are used to reduce future employer contributions or other
purposes permitted by law and in accordance with the Plan. During the
years ended December 31, 2000 and 1999, forfeited account balances
were approximately $22,400 and $280,300, respectively. In 2000 and
1999, employer contributions were reduced by $12,400 and $316,000,
respectively, from the forfeited nonvested accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF ACCOUNTING - The accompanying financial statements are
prepared on an accrual basis of accounting. Certain reclassifications
have been made to prior year amounts to conform to current year
presentation. All administrative costs of the Plan, other than costs
incurred to maintain participant loan accounts, were paid by the
Company.
b. VALUATION OF INVESTMENTS AND INCOME RECOGNITION - The Plan's
investments are stated at fair value. Securities traded on a national
securities exchange are valued at the last reported sales price on the
last business day of the plan year. The shares of registered
investment companies are valued at the quoted market price, which
represents the net asset value of shares held by the Plan at year-end.
Loans to participants are valued at cost, which approximates fair
value. Purchases and sales of securities are recorded on a trade-date
basis. Dividends are recorded on the ex-dividend date.
The Plan's investment contract is valued at contract value. Contract
value represents contributions made under the contract, plus interest,
less funds used to pay benefits to participants.
c. USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect reported
amounts of assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from
those estimates.
d. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS - In June 2000, the
Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards ("SFAS") No. 138, "ACCOUNTING FOR
CERTAIN DERIVATIVE INSTRUMENTS AND CERTAIN HEDGING ACTIVITIES," which
amends SFAS No. 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND
HEDGING ACTIVITIES." SFAS No. 133, as amended and interpreted,
establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. The Plan adopted SFAS No.
133, as amended and interpreted, effective January 1, 2001. The
adoption of SFAS No. 133, as amended and interpreted through June
2001, did not have an impact on the Plan's financial statements.
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3. INVESTMENTS
The following investments represent five percent or more of the Plan's net
assets available for benefits as of December 31, 2000 and 1999.
2000 1999
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Stable Value Fund $ 71,606,613 $ 49,917,705
Aim Charter Fund 43,787,178 55,078,853
Cendant Corporation Common Stock Fund 37,263,966 76,155,397
Merrill Lynch Equity Index Trust 35,988,975 37,437,860
Neuberger Berman Separately Managed Portfolio 33,158,954 --
Putnam New Opportunities Fund -- 19,339,075
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$221,805,686 $237,928,890
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During 2000, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year)
(depreciated)/appreciated in value as follows:
Mutual Funds $(43,798,035)
Collective Trusts (3,415,374)
Cendant Stock (49,813,364)
Corporate Bond Funds 201,123
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$(96,825,650)
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4. TAX STATUS
The Plan is qualified under section 401(a) of the Internal Revenue Code of
1986 (the "Code") and is exempt from taxation under section 501(a) of the
Code. The Plan received a favorable IRS determination letter dated May 21,
1996. The Plan has been amended since receiving the determination letter.
However, the Plan administrator believes that the Plan is currently
designed and being operated in compliance with the applicable requirements
of the Code and the related trust was tax exempt as of the financial
statement dates. Therefore, no provision for income taxes has been included
in the Plan's financial statements.
5. INVESTMENT CONTRACTS WITH INSURANCE COMPANIES
The Stable Value Fund (the "Fund") is composed of the CIGNA Guaranteed
Account and the Merrill Lynch Retirement Preservation Trust. The Fund
primarily invests in investment contracts providing a guaranteed return on
principal invested over a specified time period, which varies by contract.
As of February 1, 1996, contributions to the CIGNA Guaranteed Account were
frozen; thereafter, contributions were made only to the Merrill Lynch
Retirement Preservation Trust. The crediting interest rates at December 31,
2000 for various investment contracts ranged from 5.3% to 6.2% and the
average yield of the Fund for the 2000 and 1999 plan years was
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6.4% and 6.2%, respectively. All investment contracts in the Fund are fully
benefit responsive and are recorded at contract value, which equals
principal plus accrued interest. The contract value of the Fund at December
31, 2000 and 1999 was $71,606,613 and $49,917,705, respectively.
6. PARTY-IN-INTEREST
A portion of the Plan's investments is shares in funds managed by Merrill
Lynch. Merrill Lynch is the custodian of these investments as defined by
the Plan and, therefore, these transactions qualify as party-in-interest
transactions.
7. PLAN TERMINATION
Although the Company has not expressed any intention to do so, the Company
reserves the right to modify, suspend, amend or terminate the Plan in whole
or in part at any time subject to the provisions of ERISA. If the Plan is
terminated, the amounts credited to the employer contribution accounts of
all participants become fully vested.
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SUPPLEMENTAL SCHEDULE
CENDANT CORPORATION EMPLOYEE SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 2000
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Contract or
Number of Current
Description Units/Shares Value
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Cendant Corporation Common Stock Fund 3,871,581 $ 37,263,966
Merrill Lynch Equity Index Trust ** 392,165 35,988,975
Stable Value Fund ** 71,606,613 71,606,613
Neuberger Berman International Equity Fund 327,671 4,600,502
Neuberger Berman Separately Managed Portfolio 3,716,245 33,158,954
Kobrick Capital Fund 488,367 6,441,557
Kobrick Emerging Growth Fund 357,728 4,711,276
Kobrick Growth Fund 248,006 4,449,229
GAM International Fund 107,673 2,155,622
MFS Emerging Growth Fund 174,875 7,830,897
PIMCO Total Return Fund 393,724 4,090,789
Merrill Lynch Small Cap Index ** 46,349 484,343
Merrill Lynch Aggregate Bond Index Fund ** 16,444 169,540
Merrill Lynch International Index Fund ** 75,688 859,059
Neuberger Berman Genesis Trust 314,570 8,414,735
Oppenheimer Capital Income Fund 68,205 868,927
Alliance Premier Growth Fund 138,233 3,692,194
Alliance Quasar Fund 60,955 1,434,271
AIM Charter Fund 2,938,737 43,787,178
Merrill Lynch EuroFund ** 46,246 705,712
Merrill Lynch Growth Fund ** 293,061 6,092,736
AIM Constellation Fund 399,639 11,561,552
Franklin Balance Sheet 47,442 1,692,272
Putnam New Opportunities Fund 301,357 17,665,566
Templeton Foreign Fund 833,052 8,613,753
Federated High Income Bond Fund 26,246 223,614
PIMCO Renaissance Fund 74,636 1,371,062
MASS Investment Growth 354,591 6,077,694
Merrill Lynch Balanced Capital Fund ** 325,727 9,892,324
Merrill Lynch Corp Bond Fund Inter-Term ** 386,216 4,306,312
Davis NY Venture Fund 121,801 3,500,561
AIM Weingarten Fund 611,914 12,525,870
Loan Fund * 11,062,111 11,062,111
Cash Fund - 593,258
Other 3,251 3,251
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Total 100,231,119 $ 367,896,275
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* Maturity dates range from January 2001 to November 2015. Interest rates
range from 6.00 % to 10.75 %.
** This fund is managed by Merrill Lynch. As such, these amounts are the
result of party-in-interest transactions.
THIS SCHEDULE SHOULD BE READ IN CONJUNCTION
WITH THE ACCOMPANYING FINANCIAL STATEMENTS AND NOTES THERETO.
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CENDANT CORPORATION EMPLOYEE SAVINGS PLAN
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Committee has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENDANT CORPORATION
EMPLOYEE SAVINGS PLAN
BY: /s/ TERENCE P. CONLEY
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Terence P. Conley
Senior Vice President,
Human Resources
CENDANT CORPORATION
BY: /s/ KEVIN M. SHEEHAN
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Kevin M. Sheehan
Senior Vice President and Chief
Financial Officer
Date: June 20, 2001 Cendant Corporation
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EXHIBIT INDEX
EXHIBIT PAGE NO.
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23.1 Consent of Deloitte & Touche LLP 14
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