Cendant Corporation Board Of Directors Announces Plan To Separate Cendant Into Four Publicly Owned, Pure-Play Compagnies
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Cendant Corporation Board Of Directors Announces Plan To Separate Cendant Into Four Publicly Owned, Pure-Play Compagnies
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Category: Worldwide
This is a press release selected by our editorial committee and published online for free on 2005-10-24
Creation of Separate Publicly Traded Real Estate, Travel Distribution, Hospitality and
Vehicle Rental Companies Intended to Maximize Value for Cendant Shareholders
New Companies Will Have Strong Balance Sheets, Significant Scale, Leading Market
Positions and Brands, and World-Class, Experienced Management Teams
Company Reassesses Impact of Recent Trends and Events on Future Results
New York, NY 10-24-2005 – Cendant Corporation (NYSE: CD) today announced that its
Board of Directors has approved a plan to separate Cendant into four independent, publicly
traded, pure-play companies – one each for Cendant’s real estate, travel distribution,
hospitality and vehicle rental businesses. The plan is designed to enable shareholders and the
four companies to realize Cendant’s value, which has not yet been fully recognized by the
market, despite the strong operating and financial performance of Cendant’s businesses.
Following the proposed transaction, Cendant’s shareholders will own 100% of the equity in
all four companies. The transaction is expected to be effected through three 100% spin-offs
in the summer of 2006. It is expected to be tax-free for the Company and its shareholders.
Move Designed to Unlock Value
Cendant’s Chairman and Chief Executive Officer, Henry R. Silverman, said, “We believe
that this is the right thing to do, for the right reasons and at the right time. Creating four
strong and focused pure-play companies is the best way to unlock the full value of Cendant’s
businesses for the benefit of our shareholders in both the short and long term. All of our
businesses have done well, yet despite Cendant’s consistently strong operating and financial
performance in recent years, the market has not fully recognized the value of the Company.
Our successful efforts to simplify Cendant’s structure and divest non-core businesses have
underscored the benefits of greater clarity and focus. With these efforts complete, we have
now concluded that it is in the best interests of our shareholders to establish pure-play
enterprises, as we and our advisors believe the sum of the parts has a value in excess of our
current share price.”
Cendant anticipates that the separation of the Company’s core businesses will facilitate a
clearer understanding and fairer market valuation of each of these businesses. The
transaction is intended to reduce the complexity surrounding investor understanding and
analysis of Cendant’s businesses and enable investors to choose how to diversify their
Cendant holdings. Cendant also expects to attract new interest from investors who want to
own stock in one or more of the separate companies, even though they might not have been
as interested in Cendant’s diversified holdings as a single company.
Cendant’s President and Chief Financial Officer, Ronald L. Nelson, added, “Since mid-2004,
we have created three focused public companies – Jackson Hewitt, PHH Corporation and
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Wright Express – through two initial public offerings and one spin-off. The share price
appreciation of each of these companies has significantly outperformed its respective
industry groupings, the S&P 500 and Cendant, giving greater credence to our view that the
aggregate valuations of the four proposed new companies will exceed that of Cendant today.”
Strategic Rationale
The Company and its advisors evaluated a number of strategic alternatives to increase
shareholder value, including a leveraged recapitalization; a sale of one, several or all of
Cendant’s business units; and different configurations of a separation.
“We concluded that this proposed transaction is the most feasible and the most financially
attractive,” Mr. Silverman continued. “It is a tax-efficient approach and does not preclude
the other alternatives considered by our Board after the separation occurs. This structure
removes another layer of complexity, enables the companies to have readily identifiable
market comparables and preserves most of the revenue synergies among our business units.
And we will seek to preserve other synergies through arms’-length contractual
arrangements.”
Geopolitical Risk
In considering this transaction, the Company also reassessed its previously articulated view
that it manages event-related risk through size and diversity. Commenting on this
reassessment, Mr. Nelson said, “Obviously, we thought long and hard about the fact that
there will be more volatility in the separate travel assets than currently exists. However, each
new company will be affected differently and we expect that each will be sufficiently
capitalized to manage event-driven risk. Moreover, it has become clear in the last few years
that the advantages of focused pure-play companies in the market outweigh the incremental
benefits offered by Cendant’s hedged portfolio.”
Four Strong Competitors
“From inception,” Mr. Silverman said, “each of the new companies will be a major
competitor in its sector. Each will have leading brands and market positions, strong balance
sheets, significant scale and world-class, experienced management teams.”
Mr. Silverman emphasized these key strengths of the new companies:
• Real Estate Services is the leader in the residential real estate services sector – the largest
real estate brokerage franchisor and operator, the world’s premier employee relocation
and mobility services company, and a leading provider of title agency and other
settlement services.
• Travel Network encompasses Cendant’s Travel Distribution Services division as well as
RCI and Vacation Rental Group – with a powerful portfolio of global brands and a strong
U.S. and international presence, it is a leader in the growing travel intermediary sector,
and is the largest timeshare exchange company as well as the largest marketer of
European vacation rentals.
• Hospitality is one of the world’s largest lodging companies, with nine of the best-known
brands, and the world’s largest developer, marketer and manager of timeshares.
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• Vehicle Rental Services, with two of the most-recognized brands in its sector, is one of
the largest general-use car rental businesses in the U.S.
Experienced Managements
The four new companies will be led by teams drawn from Cendant’s current senior
leadership. Richard A. Smith will be Chief Executive Officer of Real Estate Services, with
Mr. Silverman serving as Non-Executive Chairman. At Travel Network, Mr. Silverman will
serve as Chairman and Chief Executive Officer, with Samuel L. Katz as Vice Chairman and
President. Hospitality will be headed by Stephen P. Holmes as Chairman and Chief
Executive Officer, while Mr. Nelson will lead Vehicle Rental Services as its Chairman and
Chief Executive Officer.
“Cendant is fortunate to have these four world-class executives – Ron Nelson, Richard
Smith, Steve Holmes and Sam Katz – to provide the new companies with the leadership they
need,” Mr. Silverman commented. “The best way for me to make a contribution is to help
Richard and Sam launch these exciting new enterprises.”
Highest Governance Standards
Each of the new companies’ Board of Directors will be composed of a diverse group of
experienced directors, with a majority of independent directors and a commitment to the
highest standards of corporate governance.
No Change in Operations; New Opportunities for Employees
The Company emphasized that the planned transaction should not affect the operations of its
business units and that generally customers, suppliers, franchisees and other business partners
should see no changes in their relationships with Cendant businesses. It also emphasized that
employees generally should not be affected.
Mr. Nelson said, “The creation of four separate, pure-play companies will offer Cendant
employees important new opportunities for growth. Most business unit and division
employees won’t see any significant changes in their day-to-day responsibilities. And many
corporate employees will have new opportunities available to them in the four new
companies. One of our highest priorities will be to ensure that as many employees as
possible are placed in appropriate positions at the new companies.”
Strong Capitalization, Restructured Debt
It is expected that the new companies will be prudently and conservatively capitalized, which
is expected to offset any potential exposure to added market volatility they may face as
focused businesses, while at the same time providing flexibility for long-term growth.
Any refinancing of Cendant’s corporate debt will be apportioned between Real Estate
Services and Travel Network. Real Estate Services and Travel Network will share
responsibility for the Company’s contingent liabilities. It is expected that Hospitality and
Vehicle Rental Services will have no legacy corporate debt but will assume the existing
securitized debt related to timeshare and rental vehicle assets, respectively.
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Dividend and Share Repurchase Strategy
The Company noted that it expects to continue to recommend to its Board of Directors
payment of the regular $0.11 quarterly dividend until the separation is completed. Following
the separation, it is currently expected that all four companies will pay dividends, which, in
the aggregate, will approximate the dividend currently paid by Cendant. Individual company
payments will be determined at a later date and will be within the discretion of the respective
Boards of Directors, although Cendant anticipates that the Real Estate Services and Travel
Network entities will pay the substantial majority of the post-separation aggregate dividend.
The Company also said that, in light of the proposed transaction, it will re-assess its share
repurchase targets as it refines the capital structure and credit ratings of each of the four new
companies. Accordingly, while the Company’s share repurchase authorization remains in
place, its previously announced share repurchase target of $2 billion over the course of 2005
and 2006 is no longer operative.
Company Headquarters and Names
The Real Estate, Hospitality and Vehicle Rental companies are expected to continue to be
based in Parsippany, N.J., where they are now located. Travel Network will headquarter at
Cendant’s current New York City office. No change in the location of the Company’s
workforce is anticipated.
No new names have been selected yet for the new companies. That process will be
completed prior to the completion of the separation. The Cendant name will be retired.
Stock exchange listings for the four new publicly traded companies have not yet been
determined.
Cendant is being advised by Evercore Partners and JPMorgan in connection with this
transaction, and its outside legal counsel is Skadden, Arps, Slate, Meagher & Flom LLP.
Conditions Precedent to Completion of Transaction
Consummation of the proposed transaction will be subject to certain conditions precedent,
including final approval by Cendant’s Board of Directors, receipt of a tax opinion of counsel
and the filing and effectiveness of registration statements with the Securities and Exchange
Commission. Also, the separation is subject to the completion of applicable refinancings.
Approval of Cendant’s shareholders is not required.
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Additional Information on Four New Companies
The proposed four new companies will represent the following proportions of Cendant’s
estimated 2005 key financial metrics:
Real Estate
Services (a)
Travel
Network (a)
Hospitality
(a)
Vehicle Rental
Services (a)
% of Cendant
Estimated 2005
Revenue
39—41% 18—20% 12—14% 27—29%
% of Cendant
Estimated 2005
EBITDA (b)
40—42% 28—30% 14—16% 14—16%
% of Cendant
Estimated 2005 Pretax
Earnings (b)
44—46% 21—23% 16—18% 15—17%
(a) EBITDA represents income from continuing operations before non-program related depreciation and amortization, non-program
related interest, amortization of pendings and listings, income taxes and minority interest. All percentages are based on the
Company’s guidance to be issued in connection with its third quarter 2005 earnings release (excluding the results of its former
mortgage business). The percentages for Travel Network and Hospitality reflect the transfer of the Company’s timeshare exchange
business, RCI, and its European vacation rental business from Hospitality to Travel Network. The percentages have been provided
for informational purposes and are not necessarily indicative of the results of future operations or the actual results that would have
been achieved had the separation occurred at the beginning of 2005.
(b) EBITDA percentages reflect the allocation of corporate overhead based upon Cendant’s estimate of each company’s relative
consumption of Corporate services as a stand-alone public entity. Cendant’s preliminary estimates indicate that the aggregate
Corporate services costs incurred by the stand-alone entities will not exceed Cendant’s total Corporate services costs. The pre-tax
earnings percentages further reflect the allocation of (i) Corporate depreciation and amortization using the same methodology
described above and (ii) Corporate debt interest expense based upon each company’s proposed debt structure, under which Cendant
expects its Corporate debt to be apportioned equally between Real Estate Services and Travel Network.
Additional information about the four new companies is appended below.
Future Financial Results
Cendant will report its third quarter results today after the market closes. Earnings per share
were $0.44, which is consistent with the low end of the range of the Company’s previous
guidance.
Based upon current trends in the Company’s consumer-oriented travel businesses, EBITDA
from core operating segments (excluding restructuring charges) is expected to increase
approximately 14%, year-over-year, in the fourth quarter 2005, as compared with our
previous projected growth of approximately 25%.
Mr. Nelson commented, “Several of our leisure travel units began to show signs of slowing
growth during the third quarter. Although some of what we experienced can be directly
attributed to the impact of terrorism, devastating hurricanes and higher gasoline prices, we
also began to feel the impact of, among other things, the slowdown in the rate of growth
currently affecting all online businesses, as well as the ongoing channel shift to supplier sites,
demand weakness in certain key markets in the global distribution business, and continued
economic weakness in Europe. In addition, we combined our timeshare exchange business,
RCI, and our Vacation Rental Group to create the new Vacation Network Group. This
combination is expected to save the Company approximately $9 million annually as well as
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broaden the marketing capability of our European travel business, but will result in severance
and facility closing costs of approximately $0.01 per share in fourth quarter 2005. As a result
of this restructuring and the slower growth noted above, the Company will reduce its
projection for fourth quarter 2005 earnings per share by $0.03 to $0.04 to a range of $0.23 to
$0.26. This projection does not include any potential charges associated with the
transaction.”
Mr. Nelson continued, “The effect of these items on 2006 is not yet clear. However, based
upon the current trends noted above, together with increased fleet costs and higher interest
cost in the rental car business, we preliminarily project revenue to grow by approximately
10% and EBITDA from core operating segments to grow by 11%-13% in 2006 versus 2005,
down from our previous estimate of 11% revenue and 19% EBITDA growth.”
The Company will not be providing specific earnings per share guidance for Cendant for
2006, as it is no longer relevant due to the contemplated transaction. The Company expects
to provide guidance for each of the proposed new companies at its 2006 Investor Day,
currently planned for February 2, 2006.
Investor Conference Call
Cendant will host a conference call to discuss this announcement today, Monday October 24,
2005, at 9:00 AM (ET). Investors may access the call live at www.cendant.com or by dialing
888-889-1958 within the United States, or 517-308-9005 for international callers, using the
access code: “Cendant”. A web replay will be available at www.cendant.com following the
call. A telephone replay will be available from 12:00 PM (ET) on October 24, 2005 until
midnight (ET) on October 31, 2005 at 866-455-0587 within the United States, or at 203-369-
1266 for international callers.
About Cendant Corporation
Cendant Corporation is primarily a provider of travel and residential real estate services.
With approximately 85,000 employees, New York City-based Cendant provides these
services to businesses and consumers in over 100 countries. More information about
Cendant, its companies, brands and current SEC filings may be obtained by visiting the
Company’s Web site at www.cendant.com.
Forward-Looking Statements
Certain statements in this press release constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed or implied by such
forward-looking statements. Statements preceded by, followed by or that otherwise include
the words “believes”, “expects”, “anticipates”, “intends”, “projects”, “estimates”, “plans”,
“may increase”, “may fluctuate” and similar expressions or future or conditional verbs such
as “will”, “should”, “would”, “may” and “could” are generally forward-looking in nature and
not historical facts. Any statements that refer to expectations or other characterizations of
future events, circumstances or results are forward-looking statements. The Company cannot
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provide any assurances that the separation or any of the proposed transactions related thereto
will be completed, nor can it give assurances as to the terms on which such transactions will
be consummated. The transaction is subject to certain conditions precedent, including final
approval by the Board of Directors of Cendant.
Various risks that could cause future results to differ from those expressed by the forwardlooking
statements included in this press release include, but are not limited to: risks inherent
in the contemplated separation and related transactions and borrowings and costs related to
the proposed transactions; distraction of the Company and its management as a result of the
proposed transactions; changes in business, political and economic conditions in the U.S. and
in other countries in which Cendant and its companies currently do business; changes in
governmental regulations and policies and actions of regulatory bodies; changes in operating
performance; and access to capital markets and changes in credit ratings, including those that
may result from the proposed transaction. Other unknown or unpredictable factors also could
have material adverse effects on Cendant’s and its companies’ performance or achievements.
In light of these risks, uncertainties, assumptions and factors, the forward-looking events
discussed in this press release may not occur. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date stated, or if no date is
stated, as of the date of this press release. Important assumptions and other important factors
that could cause actual results to differ materially from those in the forward looking
statements are specified in Cendant’s 10-Q for the quarter ended June 30, 2005, including
under headings such as “Forward-Looking Statements” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations.” Except for the Company’s
ongoing obligations to disclose material information under the federal securities laws, the
Company undertakes no obligation to release publicly any revisions to any forward-looking
statements, to report events or to report the occurrence of unanticipated events unless
required by law.
This press release includes management’s estimate of EBITDA growth from core operating
segments for fourth quarter 2005. Management believes the most directly comparable GAAP
measure would be “Net Income.” As the Company has not yet completed its calculation of
the gain resulting from the October 17, 2005 sale of its Marketing Services division, the
Company is only capable of providing a reconciliation to Net Income before the results of
Discontinued Operations. Provided below is a reconciliation of EBITDA to Income from
Continuing Operations (which represents Net Income before the results of Discontinued
Operations) for fourth quarter 2005 (projected) and 2004:
2005P 2004
EBITDA for core operating segments $ 625 - 655 575 $
Mortgage Services - 9
Corporate and Other (70 - 55) 8
Total Company EBITDA 555 - 600 592
Less: Non-program related depreciation and amortization 135 - 130 141
Less: Non-program related interest expense, net 60 - 55 66
Less: Amortization of pendings and listings 20 - 10 3
Pretax income 340 - 405 382
Less: Provision for income taxes and minority interest 110 - 135 134
Income from continuing operations $ 230 - 270 248 $
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Media Contacts: Investor Contacts:
Elliot Bloom Sam Levenson
Cendant Corporation Cendant Corporation
212-413-1832 212-413-1834
Walter Montgomery Henry A. Diamond
Robinson Lerer & Montgomery Cendant Corporation
646-805-2002 212-413-1920
Rupert Younger
Finsbury Group
+44-207-251-3801
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VEHICLE RENTAL SERVICES
Vehicle Rental Services is one of the largest general-use car rental operators in the U.S. and an
industry leader in the car rental sector. It brings together two of the most recognized brands in the
industry, Avis, a leading supplier to the business travel segment, and Budget, a top brand in the leisure
travel market.
Avis Rent A Car is recognized as an industry leader in applying new technologies and is one of the
world’s top brands for customer loyalty. Budget Rent A Car is the owner and franchisor of one of the
world’s best-known car rental brands. Budget Truck Rental is the second-largest consumer truck
rental company in the United States, operating through a network of more than 2,800 locations
throughout the continental United States, serving both the consumer and light duty commercial
sectors.
Combined, the two brands have an extended global reach that includes over 6,600 car and truck rental
locations in the Americas, Australia, New Zealand and the Caribbean.
Avis Rent A Car System, Inc.
Avis and its subsidiaries operate the world’s second-largest general-use car rental business, with
approximately 2,000 locations in the United States, Canada, Australia, New Zealand and the Latin
American/Caribbean region. It is a leading brand for customer loyalty, ranking as the number one car
rental company in the 2005 Brand Keys® Customer Loyalty Index. Vehicle Rental Services will hold
marketing agreements with Avis Europe Plc, a separately owned UK-based company owning or
franchising an additional 3,000 Avis locations in Europe, Asia, the Middle East and Africa.
Budget Rent A Car System, Inc.
Budget operates and/or franchises approximately 1,800 rental locations in the U.S., Canada, Latin
America, Caribbean, Australia and New Zealand. Today, as an industry leader, Budget continues to
appeal to value-minded renters by offering quality vehicles and a rewarding rental experience.
The Budget System in Europe, Africa and the Middle East is operated under a royalty-free license
arrangement with Zodiac Europe Limited, an independent third party and an affiliate of Avis Europe,
and is comprised of approximately 800 locations.
Key Statistics
Headquarters: Parsippany, N.J.
Employees: 31,000
Worldwide car & truck locations (approx): 6,600
Airport car locations vs. Hertz: 175%
Airport car locations vs. Enterprise: 200%
Senior Executives
Ronald L. Nelson, Chairman and CEO
Robert Salerno, President and COO
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REAL ESTATE SERVICES
Real Estate Services is a leader in the residential real estate services sector, operating the world’s
largest real estate brokerage franchisor, the largest U.S. residential real estate brokerage firm, a
premier provider of employee relocation and global mobility services, as well as one of the country’s
leading providers of title agency and other settlement services.
Real Estate Franchise Group
The largest franchisor of real estate brokerages has more than 14,000 offices and 300,000 sales
associates worldwide, including the following brands:
Century 21® – World’s largest residential real estate sales organization with 137,000 brokers and
sales associates and over 7,500 independently owned and operated franchised broker offices in 39
countries and territories.
Coldwell Banker® – One of the nation’s oldest real estate companies with over 3,900 residential
and commercial real estate offices and 125,000 sales associates in 28 countries.
Coldwell Banker Commercial® – One of the nation’s largest commercial real estate franchise
operations with affiliates offering clients comprehensive buying, selling, leasing, acquisition,
disposition and management services.
ERA® – A growing residential real estate brokerage franchise system with over 2,700 offices,
more than half of which are international.
Sotheby's International Realty® – A luxury real estate network designed to connect the finest
independent real estate companies to the most prestigious clientele in the world.
Real Estate Brokerage Group
NRT is the largest residential real estate brokerage company in the U.S. It owns and operates
companies in more than 35 of the nation’s largest metropolitan markets. NRT has more than 1,000
offices, 8,000 employees and over 60,000 sales associates nationwide. In 2004, NRT again posted an
industry record with more than $200 billion in sales volume.
Relocation Services
Cendant Mobility is a premier provider of employee relocation and mobility services. It operates six
global services centers on four continents. The company annually assists over 100,000 employees
around the globe for a broad client base including nearly two-thirds of the Fortune 50, as well as
government agencies and affinity organizations. The performance-based Cendant Mobility Broker
Network closed over 70,000 properties on behalf of Cendant Mobility clients in 2004.
Title and Settlement Services
Cendant Settlement Services Group is one of the nation’s leading full-service title, settlement, and
vendor management services companies. It serves real estate companies, affinity groups, corporations
and financial institutions in support of residential and commercial real estate transactions.
Key Statistics
Headquarters: Parsippany, N.J.
Employees: 15,000
Senior Executives
Henry R. Silverman, Non-Executive Chairman
Richard A. Smith, CEO
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HOSPITALITY
Hospitality is the world’s largest lodging franchisor, with nearly 6,500 hotels on five continents under
nine brand names. Hospitality is also the world’s largest timeshare developer with over 140 resorts
throughout North America and the South Pacific. Currently comprised of Fairfield Resorts and
Trendwest Resorts, the Timeshare Resort Group accounts for more than 760,000 owner families
worldwide.
Hotel Group
This group is one of the world's largest lodging companies, with nearly 6,500 hotels and
approximately 540,000 rooms on five continents. Its TripRewards® loyalty program, the lodging
industry’s largest based on the number of participating hotels, has grown to more than 4 million
members in its first year. The group totals more than 5,300 employees and is headquartered in
Parsippany, N.J.
Wyndham® -- 109 hotels and resorts in the United States, Caribbean and Mexico
Ramada® – 977 hotels and resorts worldwide
Days Inn® – 1,863 hotels worldwideSuper 8® – 2,072 motels in the United States, Canada and
ChinaWingate Inn® – 143 hotels and resorts in the United States and Canada
Howard Johnson® – 457 hotels worldwide
Travelodge® – 521 hotels in the United States, Canada and Mexico
AmeriHost Inn® – 104 hotels in the United States
Knights Inn® – 212 motels in the United States and Canada
Timeshare Resort Group
The group consists of Fairfield Resorts and Trendwest Resorts, and is the largest vacation ownership
company in the world with over 140 resorts, more than 13,000 individual timeshare units, and over
760,000 owner families. The group totals more than 14,000 employees and is headquartered in
Orlando, Fla.
Fairfield Resorts specializes in the development and marketing of travel products including
vacation ownership intervals at over 70 resorts throughout the U.S. Fairfield was one of the first
U.S. developers to move from traditional fixed-week timeshare ownership to a points-based
exchange program with the launch of FairShare Plus in 1991.
Trendwest Resorts is a leading vacation ownership company offering a network of resorts with a
flexible points-based system of ownership. The company currently operates 57 WorldMark
resorts in the United States, British Columbia, Mexico and Fiji.
Key Statistics
Headquarters: Parsippany, NJ
Employees: 19,000
Worldwide Hotels: Nearly 6,500
Worldwide Timeshare Resorts: 143
TripRewards Membership: 4,100,000
Timeshare Owner Families: 760,000
Senior Executives
Stephen P. Holmes, Chairman and CEO
Franz Hanning, CEO, Timeshare Resort Group
Steven A. Rudnitsky, CEO, Hotel Group
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TRAVEL NETWORK
Travel Network (TN) is a leading global travel network focused on operating across both the
consumer direct and business-to-business channels, providing the most comprehensive blend of
technology and content available in the industry today.
TN’s customers include travel agencies, tour operators, resort developers, corporate travel buyers,
airlines, hotels, car rental companies and online and offline consumers. With over 17,000 employees
in approximately 140 countries, TN is the most geographically diverse and vertically integrated travel
company in the global travel industry today with unparalleled scale. Some of TN’s major business
activities are:
Business to Business
• Group travel and wholesale services including hotels, transfers and sight seeing provided by
Gullivers Travel Associates.
• Global Distribution System (GDS) services provided to travel agencies, suppliers and
corporations through Galileo.
• Corporate travel management services provided by Travelport and Orbitz for Business, for
corporations seeking fully managed on-line travel.
• Hotel inventory management and connectivity solutions provided by TRUST/Wizcom.
• Travel business intelligence provided by Shepherd Systems for airlines, travel agencies and
travel-related companies.
Business to Consumer
• Consumer retail travel through brands such as Orbitz and Cheap Tickets in the U.S. and the
ebookers, HotelClub.com, RatesToGo.com, aoyou.com and OctopusTravel.com brands
internationally.
Vacation Network Group
• Formed by the combination of RCI and Vacation Rental Group, Vacation Network Group offers
leisure accommodations, including more than 55,000 villas and cottages; vacation ownership
condominiums; and bungalow parks and campgrounds throughout the U.S., Europe and Asia
Pacific through brands such as RCI, Landal Green Parks, English Country Cottages and
Novosol. VNG includes luxury private residency clubs and a number of travel destination clubs.
• Through Leisure Real Estate Solutions, provides consultancy services to resort developers and
real estate investors.
Key Statistics:
Headquarters: New York, N.Y.
Employees: 17,000
Travel agencies served: Over 50,000
Hotel properties served: 59,000
Global locations: 140 countries
Vacation properties: 55,000
Exchange and rental customers: 4.4 million
GDS revenue in comparison to total TN revenue: Americas – 18%; International markets – 27%
Gross bookings (direct and indirect): 10 billion online; 47 billion offline
Senior Executives:
Henry R. Silverman, Chairman and CEO
Samuel L. Katz, Vice Chairman and President
Kenneth N. May, Chairman and CEO, Vacation Network Group
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