|
|
 | | | |
- close
- close
- close
- close
| |||||||||
WYN » Topics » We will be responsible for certain of Cendants contingent and other corporate liabilities.This excerpt taken from the WYN 10-Q filed May 7, 2009. We are
responsible for certain of Cendant’s contingent and other
corporate liabilities.
Under the separation agreement and the tax sharing agreement
that we executed with Cendant (now Avis Budget Group) and former
Cendant units, Realogy and Travelport, we and Realogy generally
are responsible for 37.5% and 62.5%, respectively, of certain of
Cendant’s contingent and other corporate liabilities and
associated costs, including taxes imposed on Cendant and certain
other subsidiaries and certain contingent and other corporate
liabilities of Cendant
and/or its
Table of Contents
subsidiaries to the extent incurred on or prior to
August 23, 2006, including liabilities relating to certain
of Cendant’s terminated or divested businesses, the
Travelport sale, the Cendant litigation described in this report
under “Cendant Litigation,” actions with respect to
the separation plan and payments under certain contracts that
were not allocated to any specific party in connection with the
separation. In addition, each of us, Cendant, and Realogy may be
responsible for 100% of certain of Cendant’s tax
liabilities that will provide the responsible party with a
future, offsetting tax benefit.
If any party responsible for the liabilities described above
were to default on its obligations, each non-defaulting party
(including Avis Budget) would be required to pay an equal
portion of the amounts in default. Accordingly, we could, under
certain circumstances, be obligated to pay amounts in excess of
our share of the assumed obligations related to such liabilities
including associated costs. On or about April 10, 2007,
Realogy Corporation was acquired by affiliates of Apollo
Management VI, L.P. and its stock is no longer publicly traded.
The acquisition does not negate Realogy’s obligation to
satisfy 62.5% of such contingent and other corporate liabilities
of Cendant or its subsidiaries pursuant to the term of the
separation agreement. As a result of the acquisition, however,
Realogy has greater debt obligations and its ability to satisfy
its portion of these liabilities may be adversely impacted. In
accordance with the terms of the separation agreement, Realogy
posted a letter of credit in April 2007 for our benefit and
Cendant to cover its estimated share of the assumed liabilities
discussed above, although there can be no assurance that such
letter of credit will be sufficient to cover Realogy’s
actual obligations if and when they arise.
The rules governing taxation are complex and subject to varying
interpretations. Therefore, our tax accruals reflect a series of
complex judgments about future events and rely heavily on
estimates and assumptions. While we believe that the estimates
and assumptions supporting our tax accruals are reasonable, tax
audits and any related litigation could result in tax
liabilities for us that are materially different than those
reflected in our historical income tax provisions and recorded
assets and liabilities. The result of an audit or litigation
could have a material adverse effect on our income tax
provision, net income,
and/or cash
flows in the period or periods to which such audit or litigation
relates.
As mentioned above, the IRS has commenced an audit of
Cendant’s taxable years 2003 through 2006, during which we
were included in Cendant’s tax returns. Our recorded tax
liabilities in respect of such taxable years represent our
current best estimates of the probable outcome with respect to
certain tax positions taken by Cendant for which we would be
responsible under the tax sharing agreement. As discussed above,
however, the rules governing taxation are complex and subject to
varying interpretation. There can be no assurance that the IRS
will not propose adjustments to the returns for which we would
be responsible under the tax sharing agreement or that any such
proposed adjustments would not be material. Any determination by
the IRS or a court that imposed tax liabilities on us under the
tax sharing agreement in excess of our tax accruals could have a
material adverse effect on our income tax provision, net income,
and/or cash
flows.
This excerpt taken from the WYN 10-K filed Feb 27, 2009. We are
responsible for certain of Cendant’s contingent and other
corporate liabilities.
Under the separation agreement and the tax sharing agreement
that we executed with Cendant (now Avis Budget Group) and former
Cendant units, Realogy and Travelport, we and Realogy generally
are responsible for 37.5% and 62.5%, respectively, of certain of
Cendant’s contingent and other corporate liabilities and
associated costs, including taxes imposed on Cendant and certain
other subsidiaries and certain contingent and other corporate
liabilities of Cendant
and/or its
subsidiaries to the extent incurred on or prior to
August 23, 2006, including liabilities relating to certain
of Cendant’s terminated or divested businesses, the
Travelport sale, the Cendant litigation described in this report
under “Cendant Litigation,” actions with respect to
the separation plan and payments under certain contracts that
were not allocated to any specific party in connection with the
separation. In addition, each of us, Cendant, and Realogy may be
responsible for 100% of certain of Cendant’s tax
liabilities that will provide the responsible party with a
future, offsetting tax benefit.
If any party responsible for the liabilities described above
were to default on its obligations, each non-defaulting party
(including Avis Budget) would be required to pay an equal
portion of the amounts in default. Accordingly, we could, under
certain circumstances, be obligated to pay amounts in excess of
our share of the assumed obligations related to such liabilities
including associated costs. On or about April 10, 2007,
Realogy Corporation was acquired by affiliates of Apollo
Management VI, L.P. and its stock is no longer publicly traded.
The acquisition does not negate Realogy’s obligation to
satisfy 62.5% of such contingent and other corporate liabilities
of Cendant or its subsidiaries pursuant to the term of the
separation agreement. As a result of the acquisition, however,
Realogy has greater debt obligations and its ability to satisfy
its portion of these liabilities may be adversely impacted. In
accordance with the terms of the separation agreement, Realogy
posted a letter of credit in April 2007 for our benefit and
Cendant to cover its estimated share of the assumed liabilities
discussed above, although there can be no assurance that such
letter of credit will be sufficient to cover Realogy’s
actual obligations if and when they arise.
As discussed below, the IRS has commenced an audit of
Cendant’s taxable years 2003 through 2006, during which we
were included in Cendant’s tax returns.
The rules governing taxation are complex and subject to varying
interpretations. Therefore, our tax accruals reflect a series of
complex judgments about future events and rely heavily on
estimates and assumptions. While we believe that the estimates
and assumptions supporting our tax accruals are reasonable, tax
audits and any related litigation could result in tax
liabilities for us that are materially different than those
reflected in our historical income tax provisions and recorded
assets and liabilities. The result of an audit or litigation
could have a material adverse effect on our income tax
provision, net income,
and/or cash
flows in the period or periods to which such audit or litigation
relates.
As mentioned above, the IRS has commenced an audit of
Cendant’s taxable years 2003 through 2006, during which we
were included in Cendant’s tax returns. Our recorded tax
liabilities in respect of such taxable years represent our
current best estimates of the probable outcome with respect to
certain tax positions taken by Cendant for which we would be
responsible under the tax sharing agreement. As discussed above,
however, the rules governing taxation are complex and subject to
varying interpretation. There can be no assurance that the IRS
will not propose adjustments to the returns for which we would
be responsible under the tax sharing agreement or that any such
proposed adjustments would not be material. Any determination by
the IRS or a court that imposed tax liabilities on us under the
tax sharing agreement in excess of our tax accruals could have a
material adverse effect on our income tax provision, net income,
and/or cash
flows.
This excerpt taken from the WYN 10-Q filed Nov 10, 2008. We are
responsible for certain of Cendant’s contingent and other
corporate liabilities.
Under the separation agreements we executed with Cendant (now
Avis Budget Group) and former Cendant units, Realogy and
Travelport, we and Realogy are responsible for 37.5% and 62.5%,
respectively, of certain of Cendant’s contingent and other
corporate liabilities including those relating to unresolved tax
and legal matters and associated costs. We generally are
responsible for the payment of our share of all taxes imposed on
Cendant and certain other subsidiaries and certain contingent
and other corporate liabilities of Cendant
and/or its
subsidiaries to the extent incurred on or prior to
August 23, 2006, including liabilities relating to certain
of Cendant’s terminated or divested businesses, liabilities
relating to the Travelport sale, the Cendant litigation
described above under “Legal Proceedings —
Cendant Litigation,” generally any actions with respect to
the separation plan and payments under certain contracts that
were not allocated to any specific party in connection with the
separation.
If any party responsible for these liabilities were to default
on its obligations, each non-defaulting party (including Avis
Budget) would be required to pay an equal portion of the amounts
in default. Accordingly, we may, under certain circumstances, be
obligated to pay amounts in excess of our share of the assumed
obligations related to such contingent and other corporate
liabilities including associated costs. On or about
April 10, 2007, Realogy Corporation was acquired by
affiliates of Apollo Management VI, L.P. The acquisition does
not negate Realogy’s obligation to satisfy 62.5% of such
contingent and other corporate liabilities of Cendant or its
subsidiaries pursuant to the terms of the separation agreement
and, in connection with the acquisition, Realogy was required to
and has posted a $500 million standby letter of credit in
favor of Avis Budget to satisfy these liabilities. As a result
of the acquisition, however, Realogy has greater debt
obligations and its ability to satisfy its portion of these
liabilities may be adversely impacted.
This excerpt taken from the WYN 10-K filed Feb 29, 2008. We are
responsible for certain of Cendant’s contingent and other
corporate liabilities.
Under the separation agreements we executed with Cendant (now
Avis Budget Group) and former Cendant units, Realogy and
Travelport, we and Realogy are responsible for 37.5% and 62.5%,
respectively, of certain of Cendant’s contingent and other
corporate liabilities including those relating to unresolved tax
and legal matters and associated costs. We generally are
responsible for the payment of our share of all taxes imposed on
Cendant and certain other subsidiaries and certain contingent
and other corporate liabilities of Cendant
and/or its
subsidiaries to the extent incurred on or prior to
August 23, 2006, including liabilities relating to certain
of Cendant’s terminated or divested businesses, liabilities
relating to the Travelport sale, the Cendant litigation
described below under “Cendant Litigation,” generally
any actions with respect to the separation plan and payments
under certain contracts that were not allocated to any specific
party in connection with the separation.
If any party responsible for these liabilities were to default
on its obligations, each non-defaulting party (including Avis
Budget) would be required to pay an equal portion of the amounts
in default. Accordingly, we may, under certain circumstances, be
obligated to pay amounts in excess of our share of the assumed
obligations related to such contingent and other corporate
liabilities including associated costs. On or about
April 10, 2007, Realogy Corporation was acquired by
affiliates of Apollo Management VI, L.P. and no longer trades
its common stock as an independent public company. The
acquisition does not negate Realogy’s obligation to satisfy
62.5% of such contingent and other corporate liabilities of
Cendant or its subsidiaries pursuant to the terms of the
separation agreement. As a result of the acquisition, however,
Realogy has greater debt obligations and its ability to satisfy
its portion of these liabilities may be adversely impacted.
This excerpt taken from the WYN 10-K filed Mar 7, 2007. We are
responsible for certain of Cendant’s contingent and other
corporate liabilities.
Under the separation agreements we executed with Cendant and
former Cendant units, Realogy and Travelport, we and Realogy are
responsible for 37.5% and 62.5%, respectively, of certain of
Cendant’s contingent and other corporate liabilities
including those relating to unresolved tax and legal matters and
associated costs. We generally are responsible for the payment
of our share of all taxes imposed on Cendant and certain other
subsidiaries and certain contingent and other corporate
liabilities of Cendant
and/or its
subsidiaries to the extent incurred on or prior to
August 23, 2006, including liabilities relating to certain
of Cendant’s terminated or divested businesses, liabilities
relating to the Travelport sale, the Cendant litigation
described below under “Cendant Litigation,” generally
any actions with respect to the separation plan and payments
under certain contracts that were not allocated to any specific
party in connection with the separation.
If any party responsible for these liabilities were to default
on its obligations, each non-defaulting party (including Avis
Budget) would be required to pay an equal portion of the amounts
in default. Accordingly, we may, under certain circumstances, be
obligated to pay amounts in excess of our share of the assumed
obligations related to such contingent and other corporate
liabilities including associated costs. On December 15,
2006, Realogy entered into an agreement and plan of merger with
an affiliate of Apollo Management VI, L.P. pursuant to which
Realogy will be acquired by Apollo and no longer trade as an
independent public company. The proposed merger does not negate
Realogy’s obligation to satisfy 62.5% of such contingent
and other corporate liabilities of Cendant or its subsidiaries
pursuant to the terms of the separation agreement. Following
closing of the proposed merger, however, Realogy is expected to
have greater debt obligations and its ability to satisfy its
portion of these liabilities may be adversely impacted.
This excerpt taken from the WYN 8-K filed Jul 19, 2006. We will be responsible for certain of Cendant’s contingent and other corporate liabilities. Under the Separation and Distribution Agreement and other agreements, subject to certain exceptions contained in the Tax Sharing Agreement, we and Realogy will each assume and be responsible for 37.5% and 62.5%, respectively, of certain of Cendant’s contingent and other corporate liabilities including those relating to unresolved tax and legal matters and associated costs and expenses. However, in the event that the sale of Travelport is not completed, we, Realogy and Travelport will each assume and be responsible for 30%, 50% and 20%, respectively, of these contingent and other liabilities, and Travelport will have no responsibility. More specifically, we generally will assume and be responsible for the payment of our share of (i) all taxes imposed on Cendant and certain other subsidiaries and (ii) certain contingent and other corporate liabilities of Cendant and/or its subsidiaries to the extent incurred on or prior to the earlier of (x) December 31, 2006 or (y) the date of the separation of Travelport from Cendant. These contingent and other corporate liabilities include liabilities relating to, arising out of or resulting from (i) certain of Cendant’s terminated or divested businesses, including among others, Cendant’s former PHH and Marketing Services (Affinion) businesses, (ii) liabilities relating to the Travelport sale, including, in general (but subject to certain exceptions), liabilities for taxes of Travelport for taxable periods through the date of the Travelport sale, (iii) the Securities Action, the PRIDES Action and the ABI Actions (for a further description of these litigation matters, see “Business—Employees, Properties and Facilities, Government Regulation and Legal Proceedings—Legal Proceedings—Legal—Cendant Corporate
40
Table of ContentsLitigation”), (iv) generally any actions with respect to the separation plan or the distributions made or brought by any third party and (v) payments under certain identified contracts (or portions thereof) that were not allocated to any specific party in connection with the separation. However, in almost all cases, contingent and other corporate liabilities do not include liabilities that are specifically related to the business of one of the four separated companies which will be allocated 100% to the relevant company, including any liabilities related to the business disclosure in a separated company’s registration statement on Form 10 or similar disclosure document filed or distributed in connection with the separation plan. Assuming our separation from Cendant occurred on March 31, 2006 and the sale of Travelport is completed, we would have recorded liabilities of $321 million relating to our assumption of Cendant’s contingent and other corporate liabilities, which are reflected on our pro forma balance sheet. (See “Unaudited Pro Forma Condensed Combined Financial Statements.”) This amount does not reflect liabilities that may be required to be established in connection with the guarantees we expect to provide Cendant in connection with the separation. Any such liabilities, which could be material, will reflect the fair value of the guarantees, which is currently being determined. If any party responsible for such liabilities were to default in its payment, when due, of any such assumed obligations related to any such contingent corporate liability, each non-defaulting party (including Avis Budget Group, Inc.) would be required to pay an equal portion of the amounts in default. Accordingly, we may, under certain circumstances, be obligated to pay amounts in excess of our share of the assumed obligations related to such contingent and other corporate liabilities including associated costs and expenses. Many lawsuits are currently outstanding against Cendant, some of which relate to accounting irregularities arising from some of the CUC International, Inc. business units acquired when HFS Incorporated merged with CUC to form Cendant. While Cendant has settled many of the principal lawsuits relating to the accounting irregularities, these settlements do not encompass all litigation associated with the accounting irregularities. We do not believe that it is feasible to predict or determine the final outcome or resolution of these unresolved proceedings. Although we will share any costs and expenses arising out of this litigation with Realogy (and with Travelport if the sale of Travelport is not completed), an adverse outcome from such unresolved proceedings or liabilities or other proceedings for which we have assumed partial liability under the Separation and Distribution Agreement could be material with respect to our earnings in any given reporting period. Additionally, Realogy (and not us) will act as the managing party and will manage and assume control of most legal matters related to the contingent and other corporate liabilities and assets of Cendant. Furthermore, assuming the sale of Travelport is completed, Realogy will have full control of most decisions relating to the settlement, resolution or disposition of most legal matters relating to contingent and other corporate liabilities (including certain tax-related matters) and assets and we will be responsible for 37.5% of any payments made in respect of such matters. For a more detailed description of the Separation and Distribution Agreement and treatment of certain historical Cendant contingent and other corporate liabilities, see “Certain Relationships and Related Party Transactions—Agreements with Cendant—The Separation and Distribution Agreement.” | EXCERPTS ON THIS PAGE:
RELATED TOPICS for WYN:
|
| |||||||
