Avis 2006 Annual Report Download - page 75

Table of Contents
related to asset basis differences resulting from the 2001 acquisition of a Travelport subsidiary. The loss is subject to revision related to
customary post-closing purchase price adjustments.
Realogy and Wyndham. On July 31, 2006, the Company completed the spin-offs of Realogy and Wyndham in tax-free distributions of
one share each of Realogy and Wyndham common stock for every four and five shares, respectively, of Cendant Corporation common
stock held on July 21, 2006. Costs incurred in connection with the spin-offs of Realogy and Wyndham are included within gain (loss) on
disposal of discontinued operations, net of tax on the accompanying Consolidated Statement of Operations.
Marketing Services Division.
On October 17, 2005, the Company completed the sale of its Marketing Services division for approximately
$1.8 billion. The purchase price consisted of approximately $1.7 billion of cash, net of closing adjustments, plus $125 million face value of
newly issued preferred stock of Affinion and warrants to purchase up to 7.5% of the common equity of Affinion (see Note 2—
Summary of
Significant Accounting Policies for more detailed information on the preferred stock and warrants). The Company is obligated to distribute
any proceeds from the sale of Affinion preferred stock and warrants to Realogy and Wyndham. During 2007, a portion of the Company’s
preferred stock investment in Affinion was redeemed (see Note 24 – Subsequent Event).
Wright Express. On February 22, 2005, the Company completed the initial public offering of Wright Express for $964 million of cash.
Additionally, the Company entered into a tax receivable agreement with Wright Express pursuant to which Wright Express is obligated to
make payments to the Company over a 15 year term. The Company is obligated to distribute all such payments received from Wright
Express to Realogy and Wyndham following the separation. Excluding amounts remitted to Realogy and Wyndham, the Company
received $9 million in connection with this tax receivable agreement during 2006 and $15 million during 2005. Such amounts are recorded
within gain (loss) on disposal of discontinued operations, net of tax on the accompanying Consolidated Statements of Operations.
PHH. On January 31, 2005, the Company completed the spin-off of PHH, which includes its former mortgage, fleet leasing and appraisal
businesses. In connection with the spin-off, the Company recorded a non-cash impairment charge of $281 million and transaction costs of
$4 million during first quarter 2005. There were no tax benefits recorded in connection with these charges, as such charges are not tax
deductible.
Jackson Hewitt. On June 25, 2004, the Company completed the initial public offering of Jackson Hewitt. In connection with the initial
public offering, the Company received $772 million in cash.
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