DEFENSE

SOMERS, NY -- Cendant Corporation and IBM today announced they have formed a ten-year, $1.4 billion IT services relationship that will provide Cendant with the data operations and processing foundation it requires to provide the highest quality services to its customers and support its future endeavors. With Cendant's strong presence in the travel industry, the agreement covers a full spectrum of services related to airline, car rental, hotel, and leisure companies, including Galileo International, which Cendant acquired earlier this year. Galileo's electronic global distribution system (GDS) is among the largest systems of its kind, connecting approximately 44,000 travel agency locations to 500 airlines, 40 car rental companies, 47,000 hotel properties, 370 tour operators, and all major cruise lines throughout the world. Additional Cendant travel units utilizing services related to the agreement include Avis Rental Cars and Ramada, Days Inn, Motel 8, and Howard Johnson Hotel chains, as well as vacation travel companies such as Resort Condominiums International (RCI) and Fairfield Properties. The deal also includes Cendant's Coldwell Banker, Coldwell Banker Commercial, ERA, Cendant Mortgage, Century 21, and Cendant Mobility units. IBM Global Services will manage IT data operations for Cendant's 40-plus business units -- including Galileo's GDS -- from Cendant's data center in Denver. IBM will run Cendant's 1,400-plus computer servers and host many of the Web sites and interactive services operated by the corporation's brands. Among these are Avis Rental Car, RCI, and many others. IBM will also assume responsibility for IT data operations of third-party companies that are currently outsourcing these functions to Cendant. In sum, the IT infrastructure IBM will manage represents approximately 13,000 MIPS of computer processing power. Cendant has also selected IBM to provide both help desk and desktop support services to thousands of its employees. The help desk services -- which will be provided to Cendant's Avis, Wizcom, and real estate businesses -- will be delivered from an IBM Global Services facility in Toronto. IBM will provide the desktop support services on-site to thousands of employees at Cendant's corporate offices and several remote locations. About 500 Cendant employees will join IBM Global Services as a result of the agreement. ``Given IBM's strong global travel industry expertise, the company is uniquely equipped to help us establish a world-class data processing and technology infrastructure that will be second to none and improve our ability to deliver the best value to our customers,'' said Tom Christopoul, senior executive vice president and chief administrative officer, Cendant Corporation. ``This partnership sets the stage for continued strategic cooperation with IBM in all of Cendant's businesses.'' ``This relationship represents a great opportunity for both companies,'' said Sean Ryan, general manager, distribution sector, IBM Global Services -- Americas. ``By selecting IBM to manage its IT operations, Cendant can focus on what it does best -- providing its customers with great service in its key industry segments. For IBM, this cements a long-standing relationship with a leader in the travel industry. And coupled with our recent contracts with Air Canada and Japan Airlines, this agreement demonstrates our continuing commitment to delivering sustainable business value to the industry.'' Cendant's relevant IT infrastructure includes mainframe computers and a broad mix of Unix and Intel computer servers. The corporation's mainframe operations run primarily on IBM S/390 servers, while IBM RS/6000 servers are also an integral part of its infrastructure. Cendant relies on IBM's transaction processing software to handle booking and ticketing transactions for all the reservations made through Galileo's systems.