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Car/Limo Rentals

 August 23, 2002
Cendant Agrees To Acquire Budget Group

 Cendant Corporation has entered into a definitive agreement to acquire substantially all of the assets of Budget Group, Inc. for $107.5 million in cash plus the payment of certain transaction related expenses and assumption of certain contracts and trade payables. In addition, a subsidiary of Cendant will assume approximately $2.7 billion in non-recourse asset-backed vehicle-related debt. Budget Group is the third-largest general use car and truck rental company in the United States.

Pursuant to the definitive agreement, Cendant will acquire Budget?s operations in the United States, Canada, Australia, New Zealand and Latin America. Budget is seeking a buyer for its operations in Europe, the Middle East and Africa and anticipates that these operations will continue to operate as usual under the Budget brand name. The companies expect to complete the transaction during the fourth quarter of 2002.

Following the acquisition, Budget will continue to operate as a separate and independent brand. Budget will complement the travel services currently offered by Cendant, including Avis car rental, Galileo travel distribution services, Trendwest and Fairfield Resorts timeshare development, RCI timeshare exchange, Cendant Travel Services, Cendant?s nine lodging brands, and CheapTickets and Trip.com through Cendant?s affiliation with Trip Network, Inc. ?We believe that bringing Budget into our family of companies provides numerous synergies with Cendant?s existing lines of business. Beyond the clear cost efficiencies of combining overhead and administrative functions of Avis and Budget, adding the Budget brand to our travel mix will allow us to reach value-conscious travellers more effectively through our timeshare, travel services and online booking channels,? said Henry R. Silverman, chairman, president and chief executive officer of Cendant.

?This transaction is also consistent with our articulated strategy of making add on acquisitions in our core travel and residential real estate segments. We remain committed to our plan to use our free cash flow primarily to reduce indebtedness,? Mr. Silverman concluded.

Sandy Miller, chairman and chief executive officer of Budget Group, Inc., said, ?As a strategic buyer, Cendant will provide numerous resources to strengthen and grow Budget?s rental operations. In addition, joining forces with Cendant will allow Budget to operate as an independent brand, enjoy many synergies created by this transaction and continue serving its customers in the same quality manner.?

Cendant and Budget have agreed to assemble a transition team comprised of senior managers to ensure a seamless integration of the companies. Cendant does not anticipate changes in Budget?s operational management or workforce that would impact service to customers or suppliers.

Cendant will not assume roughly $750 million of Budget?s non-vehicle-related debt and preferred securities. Budget believes it is unlikely that holders of its Convertible Subordinated Notes, Trust Preferred Securities, and Common Stock will receive any distribution or recovery. It is expected that the holders of Budget Senior Notes will receive a distribution at the conclusion of the bankruptcy process.

The official committee of unsecured creditors of Budget Group, Inc. stated that it supports the sale of substantially all of the assets of Budget?s US, Canadian, Latin American and Asian-Pacific operations to Cendant Corporation pursuant to a definitive purchase agreement entered into today by Budget and Cendant. The committee has taken the position that the prompt sale of Budget?s business is important and likely to maximise the potential recovery to unsecured creditors. Subject to a bankruptcy court auction for higher and better offers to acquire the business for cash, the committee supports the transaction including the proposed bidding procedures and the timetable to close the transaction.

Consummation of the transaction remains subject to certain conditions, including bankruptcy court and regulatory approval outside the United States. The transaction has received clearance under US antitrust regulations. Lazard Freres & Co. is acting as Budget?s exclusive advisor with respect to the sale process; Salomon Smith Barney is acting as Cendant?s financial advisor.