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Real Estate

2000 Annual Report

REAL ESTATE

Real Estate is an integrated division where the real estate franchise, relocation and mortgage businesses complement one another and create numerous cross-marketing opportunities. Homebuyers need mortgages. Relocating customers need to sell current residences and buy new ones, requiring both brokerage assistance and mortgages.

39% of total revenuesTo our franchisees, we provide the purchasing power of our Preferred Alliance program, through which more than 100 world class companies offer discounts on everything from long distance phone service and insurance to computers, furniture and office products.

Size and Scope

Cendant owns three of the four largest residential real estate brands in the world - CENTURY 21®, COLDWELL BANKER®, and ERA® - and COLDWELL BANKER COMMERCIAL®, a leading franchisor of commercial real estate offices. We are the leading corporate employee relocation company in the world, and we are the second largest retail mortgage originator in the United States.

Real Estate Franchise

In 2000, Cendant franchisees closed nearly 1.8 million transaction sides, with an average sales price exceeding $170,000. Cendant's primary competition comes from the tens of thousands of independent agencies in residential real estate. In such a fragmented market, we have a strong opportunity to continue to grow the business by selling CENTURY 21, COLDWELL BANKER and ERA franchises to independent brokers. Franchisees benefit from our familiar brand names, national advertising, mortgage products, customer referrals, training, discounts on Preferred Alliance products and other value-added services - advantages that give brokers and agents a competitive edge, especially in a soft economy.

NRT Incorporated, a venture we formed with Apollo Management L.P. in 1997, is the largest franchisee of Cendant's real estate brands. NRT acquires residential real estate brokerage firms and converts them into one of our three brands, contributing to the growth of our franchise royalty stream. Since January 2000, NRT has acquired companies with more than $340 million in gross closed commissions.

In 2001, we will be testing a Web-based program that provides limited real estate services to home sellers at reduced rates. If successful, this program would be launched through our franchisees who could then offer both full and limited-service options, depending on the needs of the consumer. In 2000, our commercial arm continued to grow, with Coldwell Banker Commercial closing nearly 25,000 transactions with a total sales volume of $6.6 billion.

Relocation

Cendant Mobility is the leading employee relocation service in the world, assisting in the transfer of about 128,000 employees worldwide in 2000.

Our client retention rate of 98 percent over the past three years attests to the quality of our services. We have contracts with two-thirds of the Fortune 50 companies and nearly 30 federal government agencies. We continued to grow our base in 2000, renewing 194 contracts, while adding or expanding 248 contracts.

Under way is a pilot program with the U.S. Department of Defense, giving Cendant Mobility approximately 15,000 moves. This pilot could translate into substantial growth in revenues and cash flow.

In 2000, Cendant Mobility expanded its global reach through two acquisitions: Bradford & Bingley Relocation Services in the U.K. and Hamilton Watts International with operations in Australia and Southeast Asia.

Mortgage

Cendant Mortgage is now the second largest retail provider of residential mortgages in the United States, providing origination, sale and servicing of loans. In 2000, our mortgage originations totaled $22 billion. Our ability to generate business as the exclusive preferred provider of mortgage services to more than 7,000 franchised real estate offices, and also a growing list of financial institutions who offer our products under their private-label brands, gives us a competitive advantage and drives our business. In 2000, we added more than $5 billion in annual private label business. The alliance with Merrill Lynch that we announced in December 2000 is the most recent example of how our low-cost, world-class outsourcing services expand our reach through strong partners.

Our Phone In, Move In® program is a "killer application" for our outsource partners, with guarantees for same-day loan decisions and closing dates. We have leveraged its success by adapting the concept to the Internet with "Single Session" mortgage origination, which offers the same guarantees.

Through Cendant Real Estate, we provide a seamless process for buying, selling, financing, or refinancing homes... and for relocating across town or around the world.

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