Cendant: A Letter to the Editor of Forbes

“In this post-Enron era, the media has a significant responsibility to provide careful, accurate coverage of the accounting procedures companies use to verify their results. Forbes failed to uphold this responsibility in an article provocatively entitled “Accounting Acrobatics” in the April 29th issue.

Despite spending an inordinate amount of time (several hours in total) briefing a Forbes reporter and researcher on facts we have previously disclosed on several occasions and that are readily available in the public domain, this article unfairly and incorrectly cast aspersions on Cendant`s relationship with Trilegiant - a leading provider of consumer membership programs. It also questioned whether our company had properly informed our shareholders of this relationship. At best, the article reflects a willful disregard of the facts.

At Cendant, we take our commitment to disclosure seriously, and did so with regard to Trilegiant. Cendant fully disclosed information about Trilegiant to the financial community - on a conference call and in a press release when the transaction was announced in July, 2001; on subsequent quarterly earnings conference calls; and on our Web site. In that regard, the article presented “no new news” according to JPMorgan analyst Amanda Tepper. Merrill Lynch analyst Phua Young wrote, “Nothing new was revealed in the article. Cendant has already communicated the Trilegiant transaction in detail.” And, as Lehman Brothers analyst Jeffrey Kessler noted, Cendant has been “extraordinarily transparent over the last 18 months.”

In addition, Cendant`s relationship with Trilegiant is similar to the ones we have with thousands of other franchise-based businesses. In this case, we outsourced and licensed Cendant`s individual membership and loyalty business to Trilegiant and they in turn are paying our company royalties, similar to our business relationship with Cendant brands such as Century 21 Ramada and Jackson Hewitt.

Furthermore, it is important to note that Trilegiant is a successful business in its own right, contrary to the impression given by the article. For example, Trilegiant also has partnerships with other major business leaders, including AOL Time Warner.


Beyond the factual inaccuracies, the article also gratuitously insulted Cendant employees by calling Cendant “unrepentant” about accounting. This remark was baseless, flippant and reflective of the mean-spirited tone of the article’s references to Cendant. The men and women of this company were the victims of accounting fraud at the former CUC International, and they have worked diligently for four years to rebuild investor confidence by continuing to achieve outstanding financial performance quarter after quarter. They, and your readers, deserve better from Forbes.”

Sincerely, Elliot Bloom,
Senior Vice President,
Corporate Communications,
Cendant Corporation,
9 West 57 Street,
New York, NY 10019
212-413-1917 (fax)