Despite heavy fourth quarter write-offs and more than $900 million in new expense charges, Cendant Corp., the Parsippany, NJ-based franchiser and marketing firm, had $160 million in income for the year ended Dec. 31, 1998, up from $66 million in 1997. The company’s revenue rose from $4.24 billion in 1997 to $5.28 billion in 1998.
Cendant’s 1998 expenses contained several charges that did not appear in previous years: For the full year, the company reported $351 million in litigation settlements, $433.5 million in total terminated acquisition costs, $33.4 million in investigation costs stemming from reported “accounting irregularities” and $52.5 million in executive termination compensation.
The one-time costs of terminating the acquisitions of American Bankers Insurance Group and Providian Auto and Home Insurance amounted to almost $282 million in the fourth quarter. The charges, combined with a $228 million shareholder lawsuit settlement in early January, contributed to an overall fourth quarter loss of $302 million. In fourth quarter 1997 the company took a loss of $181 million.
Revenue for the company in fourth quarter 1998 was $1.42 billion, up from $1.06 billion in fourth quarter 1997.
Cendant said it will sell three of its Internet businesses–RentNet, Match.com and Bookstacks Inc.–but it plans to develop its Internet membership operations, including discount auto service provider AutoVantage, shopping service NetMarket, credit information service Privacy Guard and discount travel service provider Travelers Advantage.
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