Cendant Corporation (NYSE: CD) today commented on the expected impact of Hurricane Katrina on its results of operations. Cendant's President and Chief Financial Officer, Ronald L. Nelson, stated: "Like all companies doing business in the Gulf Coast and Southeast, our operations in those areas have been affected by Hurricane Katrina. While our immediate efforts have been focused on ensuring the safety and well-being of our employees in those areas, we are now in a position to assess the expected impact on our financial results. "Preliminarily, we estimate that the adverse impact to pretax income will be in the range of $35 to $70 million. This amount includes $15 to $40 million related to asset impairment losses, primarily timeshare properties and rental cars, and $20 to $30 million related to lost revenues spread across our real estate and travel businesses. "Although we expect that approximately $10 to $35 million of these losses will ultimately be recovered through insurance (excluding the potential for business interruption recoveries), making the net impact to our pretax income about $25 to $35 million, the entire loss will be recorded in 2005 while some or all of the expected insurance recovery may not be recorded until 2006. Accordingly, our revised 2005 guidance does not include any offset for insurance recoveries." Cendant's revised EPS projections for 2005 are set forth below. The Company does not expect that its results of operations in 2006 will be materially impacted by this event, with the exception of the potential positive impact of insurance recoveries. Nelson further commented: "We have also begun to move forward with plans to assist in the rebuilding effort within the region." Cendant's current efforts include a special fundraising campaign on behalf of the American Red Cross Hurricane 2005 Relief Fund through which the Cendant Charitable Foundation will be matching employee donations up to an aggregate $500,000. In addition, Cendant's Car Rental Group, Hotel Group and Timeshare Resort Group are all working with the Federal Emergency Management Agency, the Department of Homeland Security and the American Red Cross to provide assistance, including access to housing and rental vehicles for emergency response personnel moving into the area to coordinate relief efforts. Separately, the Company announced that it has utilized $473 million of cash, net of proceeds from option exercises, for the repurchase of its common stock during third quarter 2005, bringing its year-to-date use of cash for share repurchases, net of proceeds from option exercises, to $810 million. Outlook As a result of the expected impact of Hurricane Katrina, the Company revised its projections for EPS from Continuing Operations for the remainder of 2005 as set forth below. These projections include a $35 to $70 million impact to pretax income from the hurricane but do not include an estimated $10 to $35 million of expected insurance recoveries, some or all of which may not be recorded until 2006.
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