Form 10-K, Fiscal Year Ended December 31, 2022 — Avis Budget Group, Inc.
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Summary
The Annual Report on Form 10-K of Avis Budget Group, Inc., Commission File No. 001-10308, for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission. The cover page reports an aggregate market value of $4,269,199,382 for common stock held by non-affiliates as of June 30, 2022, and 39,470,532 shares outstanding as of February 10, 2023. After a table of contents and forward-looking statements listing risk factors, including COVID-19, the business overview states that the company operates the Avis, Budget and Zipcar brands, averaged approximately 655,000 vehicles and generated total revenues of approximately $12 billion during 2022. The report closes with officer certifications, including an Exhibit 32 certification under 18 U.S.C. Section 1350 signed February 16, 2023 by the Chief Executive Officer and Chief Financial Officer.
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“Form 10-K, Fiscal Year Ended December 31, 2022 — Avis Budget Group, Inc.”
Original at ir.avisbudgetgroup.com. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/dr0070-ir-network/
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
☒ SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
☐ SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
COMMISSION FILE NO. 001-10308
AVIS BUDGET GROUP, INC.
(Exact name of Registrant as specified in its charter)
Delaware 06-0918165
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
6 Sylvan Way
Parsippany, NJ 07054
(Address of principal executive offices) (Zip Code)
(973) 496-4700
(Registrant’s telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE ON WHICH
TITLE OF EACH CLASS TRADING SYMBOL(S) REGISTERED
Common Stock, Par Value $.01 CAR The Nasdaq Global Select Market
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ☒ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the
definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐
Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. þ
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any
of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No þ
As of June 30, 2022, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $4,269,199,382 based on the closing
price of its common stock on the Nasdaq Global Select Market.
As of February 10, 2023, the number of shares outstanding of the registrant’s common stock was 39,470,532.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement to be mailed to stockholders in connection with the registrant’s 2023 annual meeting of stockholders (the
“Annual Proxy Statement”) are incorporated by reference into Part III hereof.
TABLE OF CONTENTS
Item Description Page
PART I
1 Business 4
1A Risk Factors 18
1B Unresolved Staff Comments 31
2 Properties 31
3 Legal Proceedings 31
4 Mine Safety Disclosures 31
PART II
5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of 32
Equity Securities
6 Selected Financial Data 33
7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 34
7A Quantitative and Qualitative Disclosures about Market Risk 42
8 Financial Statements and Supplementary Data 43
9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 43
9A Controls and Procedures 43
9B Other Information 45
9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 45
PART III
10 Directors, Executive Officers and Corporate Governance 46
11 Executive Compensation 46
12 Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters 46
13 Certain Relationships and Related Transactions, and Director Independence 46
14 Principal Accountant Fees and Services 46
PART IV
15 Exhibits and Financial Statement Schedules 47
16 Form 10–K Summary 47
Signatures 48
Table of Contents
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Annual Report on Form 10-K may be considered “forward-looking
statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward-looking
statements contained herein are subject to known and unknown risks, uncertainties, assumptions and other
factors that may cause our actual results, performance or achievements to be materially different from those
expressed or implied by any such forward-looking statements. Forward-looking statements include information
concerning our future financial performance, business strategy, projected plans and objectives. These statements
may be identified by the fact that they do not relate to historical or current facts and may use words such as
“believes,” “expects,” “anticipates,” “will,” “should,” “could,” “may,” “would,” “intends,” “projects,” “estimates,”
“plans,” “forecasts,” “guidance,” and similar words, expressions or phrases. The following important factors and
assumptions could affect our future results and could cause actual results to differ materially from those
expressed in such forward-looking statements. These factors include, but are not limited to:
• the high level of competition in the mobility industry, including from new companies or technology, and the
impact such competition may have on pricing and rental volume;
• a change in our fleet costs, including as a result of a change in the cost of new vehicles, resulting from
inflation or otherwise, manufacturer recalls, disruption in the supply of new vehicles, shortages in
semiconductors used in new vehicle production, and/or a change in the price at which we dispose of used
vehicles either in the used vehicle market or under repurchase or guaranteed depreciation programs;
• the results of operations or financial condition of the manufacturers of our vehicles, which could impact
their ability to perform their payment obligations under our agreements with them, including repurchase
and/or guaranteed depreciation arrangements, and/or their willingness or ability to make vehicles
available to us or the mobility industry as a whole on commercially reasonable terms or at all, particularly
as COVID-19 related restrictions are lifted and travel demand increases;
• levels of and volatility in travel demand, including the current and any future volatility in airline passenger
traffic;
• a deterioration in economic conditions, resulting in a recession or otherwise, particularly during our peak
season or in key market segments;
• an occurrence or threat of terrorism, the current and any future pandemic diseases, natural disasters,
military conflict, including the ongoing military conflict between Russia and Ukraine, or civil unrest in the
locations in which we operate, and the potential effects of sanctions on the world economy and markets
and/or international trade;
• any substantial changes in the cost or supply of fuel, vehicle parts, energy, labor or other resources on
which we depend to operate our business, including as a result of COVID-19, inflation, the ongoing
military conflict between Russia and Ukraine, and any embargos on oil sales imposed on or by the
Russian government;
• our ability to continue to successfully implement or achieve our business plans and strategies, achieve
and maintain cost savings and adapt our business to changes in mobility;
• political, economic or commercial instability in the countries in which we operate, and our ability to
conform to multiple and conflicting laws or regulations in those countries;
• our ability to dispose of vehicles in the used-vehicle market on attractive terms;
• our dependence on third-party distribution channels, third-party suppliers of other services and co-
marketing arrangements with third parties;
• risks related to completed or future acquisitions or investments that we may pursue, including the
incurrence of incremental indebtedness to help fund such transactions and our ability to promptly and
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effectively integrate any acquired businesses or capitalize on joint ventures, partnerships and other
investments;
• our ability to utilize derivative instruments, and the impact of derivative instruments we utilize, which can
be affected by fluctuations in interest rates, gasoline prices and exchange rates, changes in government
regulations and other factors;
• our exposure to uninsured or unpaid claims in excess of historical levels and our ability to obtain
insurance at desired levels and the cost of that insurance;
• risks associated with litigation or governmental or regulatory inquiries, or any failure or inability to comply
with laws, regulations or contractual obligations or any changes in laws, regulations or contractual
obligations, including with respect to personally identifiable information and consumer privacy, labor and
employment, and tax;
• risks related to protecting the integrity of, and preventing unauthorized access to, our information
technology systems or those of our third-party vendors, licensees, dealers, independent operators and
independent contractors, and protecting the confidential information of our employees and customers
against security breaches, including physical or cybersecurity breaches, attacks, or other disruptions,
compliance with privacy and data protection regulation, and the effects of any potential increase in
cyberattacks on the world economy and markets and/or international trade;
• any impact on us from the actions of our third-party vendors, licensees, dealers, independent operators
and independent contractors and/or disputes that may arise out of our agreements with such parties;
• any major disruptions in our communication networks or information systems;
• risks related to tax obligations and the effect of future changes in tax laws and accounting standards;
• risks related to our indebtedness, including our substantial outstanding debt obligations, recent and future
interest rate increases, which increase our financing costs, downgrades by rating agencies and our ability
to incur substantially more debt;
• our ability to obtain financing for our global operations, including the funding of our vehicle fleet through
the issuance of asset-backed securities and use of the global lending markets;
• our ability to meet the financial and other covenants contained in the agreements governing our
indebtedness, or to obtain a waiver or amendment of such covenants should we be unable to meet such
covenants;
• significant changes in the assumptions and estimates that are used in our impairment testing for goodwill
or intangible assets, which could result in a significant impairment of our goodwill or intangible assets;
• COVID-19 and its uncertain future impact on the global economy, including impacts on the ability or
desire of people to travel, including due to travel restrictions, and other restrictions and orders, which may
continue to impact our results, operations, outlooks, plans, goals, growth, cash flows, liquidity, and stock
price; and
• other business, economic, competitive, governmental, regulatory, political or technological factors
affecting our operations, pricing or services.
We operate in a continuously changing business environment and new risk factors emerge from time to time. New
risk factors, factors beyond our control, or changes in the impact of identified risk factors may cause actual results
to differ materially from those set forth in any forward-looking statements. Accordingly, forward-looking statements
should not be relied upon as a prediction of actual results. Moreover, we do not assume responsibility if future
results are materially different from those forecasted or anticipated. Other factors and assumptions not identified
above, including those discussed in “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” set forth in Part II, Item 7, in “Risk Factors” set forth in Part I, Item 1A and in other portions of this
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Annual Report on Form 10-K, may contain forward-looking statements and involve uncertainties that could cause
actual results to differ materially from those projected in any forward-looking statements.
Although we believe that our assumptions are reasonable, any or all of our forward-looking statements may prove
to be inaccurate and we can make no guarantees about our future performance. Should unknown risks or
uncertainties materialize or underlying assumptions prove inaccurate, actual results could differ materially from
past results and/or those anticipated, estimated or projected. We undertake no obligation to release any revisions
to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any
forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-
looking statements contained in the Private Securities Litigation Reform Act of 1995.
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PART I
ITEM 1. BUSINESS
Except as expressly indicated or unless the context otherwise requires, the “Company,” “Avis Budget,” “we,” “our”
or “us” means Avis Budget Group, Inc. and its subsidiaries. Unless the context requires otherwise, these
references and references to our brands do not include the operations of our licensees, as further discussed
below.
OVERVIEW
We are a leading global provider of mobility solutions through our three most recognized brands, Avis, Budget and
Zipcar, as well as several other brands, well recognized in their respective markets. Our brands offer a range of
options, from car and truck rental to car sharing. We license the use of the Avis, Budget, Zipcar and other brands’
trademarks to licensees in areas in which we do not operate directly. We and our licensees operate our brands in
approximately 180 countries throughout the world. We generally maintain a leading share of airport car rental
revenues in North America, Europe and Australasia, and we operate a leading car sharing network, and one of the
leading commercial truck rental businesses in the United States. We believe the range of options from our
diversified brands enjoy complementary demand patterns with mid-week commercial demand balanced by
weekend leisure demand.
On average, our global rental fleet totaled approximately 655,000 vehicles in 2022. We completed more than 36
million vehicle rental transactions worldwide and generated total revenues of approximately $12 billion during
2022. Our brands and mobility solutions have an extended global reach with nearly 10,250 rental locations
throughout the world, including approximately 3,900 locations operated by our licensees.
We categorize our operations into two reportable business segments:
• Americas - consisting primarily of (i) vehicle rental operations in North America, South America, Central
America and the Caribbean, (ii) car sharing operations in certain of these markets, and (iii) licensees in
certain areas in which we do not operate directly.
• International - consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia
and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in certain areas
in which we do not operate directly.
Additional discussion of our reportable segments is included in Part II, Item 7, “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and in Note 21 – Segment Information to the
Consolidated Financial Statements included in this Annual Report on Form 10-K.
OUR STRATEGY
For 2023, we expect our strategy to continue to primarily focus on costs and customer experience to strengthen
our Company, enable resilience and deliver stakeholder value. To execute our strategy, we expect to leverage
marketing and technology, increase the electric vehicles in our fleet, and invest in related infrastructure. With
respect to costs, we aim to achieve operational excellence and invest strategically to lower costs over the long
term. For customer experience, we seek to enhance the customer journey by leveraging technology to, among
other things, streamline reservations, modernize pick-up and exit, and digitize the on-rent experience to continue
to offer value and convenience.
OUR BRANDS AND OPERATIONS
OUR BRANDS
Our Avis, Budget and Zipcar brands are three of the most recognized brands in our industry. We believe that each
of our brands is positioned to be embraced by different target customers, and we see benefits and savings from
our brands sharing some of the same facilities, systems, and administrative infrastructure. In addition, we are able
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to recognize benefits as a result of complementary demand patterns with commercial rentals occurring primarily
on business days and leisure rentals occurring primarily on holidays and weekends. We also operate the Payless
and Apex brands in the value segment of the car rental industry, augmenting our Avis, Budget and Zipcar brands.
In addition, our Maggiore and Morini Rent brands in Italy, FranceCars brand in France and Turiscar brand in
Portugal further extend our offerings.
The following graphs present the approximate composition of our revenues in 2022.
Revenues by Brand Revenues by Customer Revenues by Market
Airport
Leisure 70%
Avis 64%
55%
Budget *
39%
Commercial
36% Off-Airport ***
30%
Other **
6%
* Includes Budget Truck.
** Includes Zipcar and other operating brands.
*** Includes Budget Truck and Zipcar.
The Avis brand provides high-quality vehicle rental and other mobility solutions at price points generally above
non-branded and value-branded vehicle rental companies and serves the premium commercial and leisure
segments of the travel industry. We operate or license Avis vehicle rental locations at virtually all of the largest
commercial airports and cities in the world.
The table below presents the approximate number of Avis locations as of December 31, 2022.
Avis Locations*
Americas International Total
Company-operated locations 1,890 1,080 2,970
Licensee locations 430 1,720 2,150
Total Avis Locations 2,320 2,800 5,120
* Certain locations support multiple brands.
In 2022, our Company-operated Avis locations generated total revenues of approximately $6.5 billion. The
following graphs present the approximate composition of our Avis revenues in 2022.
Avis Revenues Avis Revenues Avis Revenues
by Segment by Customer by Market
Airport
Americas 72%
74%
Leisure
56%
Commercial
44% Off-Airport
International
28%
26%
We also license the Avis brand to independent commercial owners who operate approximately half of our
locations worldwide and generally pay royalty fees to us based on a percentage of applicable revenues. In 2022,
these royalty fees totaled approximately 1% of our Avis revenues.
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We offer Avis customers a variety of premium services, including:
• the Avis mobile application, which allows customers a unique and innovative way to control many
elements of their rental experience via their mobile devices without the need to visit the rental counter.
The Avis mobile application also allows customers to track Avis shuttle buses to rental locations, find their
vehicle, and locate nearby gas stations and parking facilities;
• Avis Preferred, an award-winning frequent renter rewards program that offers counter-bypass at major
airport locations. Avis QuickPass, a feature on the Avis mobile application, allows Avis Preferred
customers to choose, exchange or upgrade their car in the mobile application upon arrival, proceed
straight to the vehicle, and utilize a unique code to exit via our automated Express Exit for a completely
contactless rental experience;
• the Avis Signature Series, a selection of luxury vehicles;
• invited or earned customer status levels allowing for upgrades and counter bypass;
• availability of premium, sport and performance vehicles as well as eco-friendly vehicles, including hybrids
and full electric;
• access to portable navigation units, tablets and satellite radio service;
• Avis rental services such as roadside assistance, fuel service options, e-receipts, electronic toll collection
services that allow customers to pay highway tolls without waiting in toll booth lines, and amenities such
as Avis Access, a full range of special products and services for drivers and passengers with disabilities;
• Curbside Delivery, a service that provides customers at select airport locations in the United States with
the added convenience of being dropped off at the airport terminal in the same car that they rented; and
• for our corporate customers, Avis Budget Group Business Intelligence, a proprietary customer reporting
solution that provides a centralized reporting tool and customer reporting portal for corporate clients in
North America and Europe, enabling them to easily view and analyze their rental activity, permitting them
to better manage their travel budgets and monitor employee compliance with applicable travel policies.
Car Rental
The Budget brand is a leading supplier of vehicle rental and other mobility solutions focused primarily on more
value-conscious customers. We operate or license Budget car rental locations at most of the largest airports and
cities in the world.
The table below presents the approximate number of Budget locations as of December 31, 2022.
Budget Locations*
Americas International Total
Company-operated locations 1,390 800 2,190
Licensee locations 480 1,060 1,540
Total Budget Locations 1,870 1,860 3,730
* Certain locations support multiple brands.
We also license the Budget brand to independent commercial owners who generally pay royalty fees to us based
on a percentage of applicable revenues. In 2022, these royalty fees totaled approximately 1% of our Budget
revenues.
Budget offers its customers several products and services similar to Avis, such as refueling options, roadside
assistance, electronic toll collection, curbside delivery and other supplemental rental products, emailed receipts
and special rental rates for frequent renters. In addition, Budget’s mobile application allows customers to reserve,
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modify and cancel reservations on their mobile device, and its Fastbreak or QuickPass service expedites rental
service for frequent travelers.
Budget Truck
Our Budget Truck rental business is one of the largest local and one-way truck and cargo van rental businesses in
the United States. As of December 31, 2022, our Budget Truck fleet is comprised of approximately 19,000
vehicles that are rented through a network of approximately 415 dealer-operated and 390 Company-operated
locations throughout the continental United States. These dealers are independently-owned businesses that
generally operate other retail service businesses. In addition to their principal businesses, the dealers rent our
light- and medium-duty trucks and commercial cargo vans to customers and are responsible for collecting
payments on our behalf. The dealers receive a commission on all truck, van and ancillary equipment rentals. The
Budget Truck rental business serves both the light commercial and consumer sectors. The light commercial sector
consists of a wide range of businesses that rent light- to medium-duty trucks, which we define as trucks having a
gross vehicle weight of less than 26,000 pounds, for a variety of commercial applications. The consumer sector
consists primarily of individuals who rent trucks to move household goods on either a one-way or local basis.
In 2022, our Company-operated Budget vehicle rental operations generated total revenues of approximately
$4.7 billion. The following graphs present the approximate composition of our Budget revenues in 2022.
Budget Revenues Budget Revenues Budget Revenues
by Segment by Customer by Market
Americas Leisure
90% Airport
78% 70%
Off-Airport
Commercial
International 30%
22%
10%
Zipcar is a leading car sharing network, driven by a mission to enable simple and responsible urban living. With its
wide variety of self-service vehicles available by the hour or day, Zipcar offers comprehensive, convenient and
flexible car sharing options in urban areas and college campuses in hundreds of cities and towns. Zipcar provides
its members on-demand, self-service vehicles in reserved parking spaces located in neighborhoods, business
districts, office complexes and college campuses, as an alternative to car ownership. We continue to offer our
Zipcar Flex product in London providing for one-way rentals, including to and from Heathrow airport, which can be
parked in public on-street spots in designated areas of the city.
Other Brands
Our other brands include the following:
• Payless, a leading rental car supplier serving the deep-value segment of the industry, which we license or
operate in approximately 265 locations worldwide, including more than 175 locations operated by
licensees and approximately 90 Company-operated locations.
◦ Company-operated Payless locations are primarily located in North America, the majority of which
are at or near major airports. Payless’ rental fees are often lower than those of larger, more
established vehicle rental brands.
◦ The Payless business model allows us to extend the life-cycle of a portion of our rental fleet, as
we “cascade” certain vehicles that exceed certain Avis and Budget age or mileage thresholds to
be used by Payless.
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• Maggiore and Morini Rent, leading vehicle rental brands in Italy.
◦ Maggiore has a strong local reputation and benefits from a strong presence at airport, off-airport
and railway locations and from the integration of our existing operations and rental fleet
management expertise. We operate or license in approximately 135 rental locations throughout
the country.
◦ Morini Rent offers rental of cars, vans, and refrigerated vehicles. We operate in approximately 45
rental locations throughout the country.
• FranceCars, which operates one of the largest light commercial vehicle rental fleets in France in
approximately 75 rental locations and leverages our existing operational processes and local customer
base.
• Apex, which operates in approximately 30 rental locations at, or near, major airports and in several
metropolitan cities in New Zealand and Australia.
• Turiscar, a leading vehicle rental brand in Portugal, which operates primarily in the corporate market,
including light commercial vehicles, at approximately 25 rental locations throughout the country.
• ACL Hire, a provider of quality vehicle rental and maintenance services in the UK, with a strong focus on
light commercial vehicles.
RESERVATIONS, MARKETING AND SALES
Reservations
Our customers can make vehicle rental reservations through our brand-specific websites and toll-free reservation
centers, through our brand-specific mobile applications, online travel agencies, travel agents or through selected
partners, including many major airlines, associations and retailers. Travel agents can access our reservation
systems through all major global distribution systems, which provide information with respect to rental locations,
vehicle availability and applicable rate structures.
Our Zipcar members can reserve vehicles through Zipcar’s reservation system, which is accessible online or on a
mobile device, by the minute, hour, or day, at rates that include gasoline, secondary insurance and other costs
associated with vehicle ownership.
Marketing and Sales
We support our brands through a range of marketing channels and campaigns, including traditional media as well
as digital media, including Internet and email marketing, social media, streaming services, and mobile device
applications. We market through sponsorships of major sports entities. We also market through sponsorships of
charitable organizations. We utilize a customer relationship management system that enables us to deliver more
targeted and relevant offers to customers across online and offline channels, including an expedited and
contactless rental process, and loyalty programs that reward frequent renters with free rental days and car class
upgrades.
We maintain strong links to the travel industry including marketing alliances with numerous marketing partners,
such as airlines and major hotel companies. In addition, we have developed relationships that provide brand
exposure and access to new customers, including deals to provide vehicles to ride-hail drivers in cities across
North America.
In 2022, approximately 60% of vehicle rental transactions originating from our Company-operated Avis locations
were generated by travelers who rented from Avis under contracts between Avis and their employers or through
membership in an organization with which Avis has a contractual affiliation. We offer Business Intelligence, an
online portal complete with rental summary dashboards, visualizations and detailed reports that provides our
corporate customers with insight into their program’s performance, giving them direct access to more data in a
customer-facing portal offering useful data insights, including options to customize and schedule reports. Avis also
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maintains marketing relationships with other organizations through which we are able to provide their customers
with incentives to rent from Avis.
Additionally, we offer “Unlimited Rewards,” an award-winning loyalty incentive program for travel agents, and Avis
and Budget programs for small businesses that offer discounted rates, central billing options and rental credits to
members.
Our Zipcar brand utilizes a diverse set of marketing and sales strategies to acquire and engage members,
including digital marketing, email and in-app messaging, and social media engagement. Zipcar maintains close
relationships with universities that provide access to campuses and various marketing channels to attract students
who, upon graduation, may continue their relationship with us. Through our Zipcar for Business program, we also
offer direct-bill accounts and employee benefit programs to companies and governments that support the use of
Zipcars.
LICENSING
We have licensees in approximately 175 countries throughout the world. Royalty fee revenues derived from our
vehicle rental licensees in 2022 totaled $134 million, with approximately $92 million in our International segment
and $42 million in our Americas segment. Licensed locations are independently operated by our licensees and
range from large operations at major airport locations and territories encompassing entire countries to relatively
small operations in suburban or rural locations. Our licensees generally maintain separate independently owned
and operated fleets. Royalties generated from licensing provide us with a source of high-margin revenue because
there are relatively limited additional costs associated with fees paid by licensees to us. In some geographies we
facilitate one-way vehicle rentals between Company-operated and licensed locations, which enables us to offer an
integrated network of locations to our customers.
We generally enjoy good relationships with our licensees and meet regularly with them at regional, national and
international meetings. Our relationships with our licensees are governed by license agreements that grant the
licensee the right to operate independently operated vehicle rental businesses in certain territories. Our license
agreements generally provide our licensees with the exclusive right to operate under one or more of our brands in
their assigned territory. These agreements impose obligations on the licensee regarding its operations, and most
agreements restrict the licensee’s ability to sell, transfer or assign its rights granted under the license agreement
or to change the control of its ownership without our consent.
The terms of our license agreements, including duration, royalty fees and termination provisions, vary based upon
brand, territory, and original signing date. Royalty fees are generally structured to be a percentage of the
licensee’s gross rental income. We maintain the right to monitor the operations of licensees and, when applicable,
can declare a licensee to be in default under its license agreement. We perform audits as part of our program to
assure licensee compliance with brand quality standards and contract provisions. Generally, we can terminate
license agreements for certain defaults, including failure to pay royalties or to adhere to our operational standards.
Upon termination of a license agreement, the licensee is prohibited from using our brand names and related
marks in any business. In the United States, these license relationships constitute “franchises” under most federal
and state laws regulating the offer and sale of franchises and the relationship of the parties to a franchise
agreement.
We continue to optimize the Avis and Budget brands by issuing new license agreements and periodically
acquiring licensees to grow our revenues and expand our global presence. Discussion of our acquisitions is
included in Note 6 – Acquisitions to the Consolidated Financial Statements included in this Annual Report on Form
10-K.
OTHER REVENUES
In addition to revenues derived from time and mileage fees from our vehicle rentals and licensee royalties, we
generate revenues from our customers through the sale and/or rental of optional ancillary products and services.
We offer products to customers that will enhance their rental experience, including:
• collision and loss damage waivers, under which we agree to relieve a customer from financial
responsibility arising from vehicle damage incurred during the rental;
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• additional/supplemental liability insurance or personal accident/effects insurance products which provide
customers with additional protections for personal or third-party losses incurred;
• products for driving convenience such as fuel service options, roadside assistance services, electronic toll
collection services, curbside delivery, tablet rentals, access to satellite radio, portable navigation units and
child safety seat rentals; and
• products that supplement truck rental including automobile towing equipment and other moving
accessories such as hand trucks, furniture pads and moving supplies.
We offer customized bundling of certain of these ancillary products and services, allowing our customers to
benefit from discounted pricing and providing customers the flexibility to add multiple products or services that suit
their needs.
We also receive payment from our customers for certain operating expenses that we incur, including vehicle
licensing fees, as well as airport concession fees that we pay in exchange for the right to operate at airports and
other locations. In addition, we collect membership fees in connection with our car sharing business.
OUR FLEET
We offer a wide variety of vehicles in our rental fleet, including luxury cars, electric, hybrid and fuel efficient
vehicles, specialty-use vehicles and light commercial vehicles. Our fleet consists primarily of vehicles from the
current and immediately preceding model year. We maintain a single fleet of vehicles for Avis and Budget in
countries where we operate both brands. A substantial majority of Zipcar’s fleet is dedicated to use by Zipcar.
Fleet Purchases
We maintain a diverse rental fleet, in which no vehicle manufacturer represented more than 21% of our 2022 fleet
purchases, and we regularly adjust our fleet levels to be consistent with demand. We participate in a variety of
vehicle purchase programs with major vehicle manufacturers. In 2022, we primarily purchased vehicles from
Stellantis N.V., Toyota Motor Corporation, Hyundai Motor Group, General Motors Company, Ford Motor Company,
Volkswagen Group and Renault-Nissan-Mitsubishi Alliance.
Fleet costs represented approximately 10% of our aggregate expenses in 2022. Fleet costs can vary from year to
year based on the prices at which we are able to purchase and dispose of rental vehicles, the mix of risk and
program vehicles, holding periods, and overall fleet mix.
In 2022, approximately 12% of our average rental fleet was comprised of vehicles subject to agreements requiring
automobile manufacturers to repurchase vehicles at a specified price during a specified time period or guarantee
our rate of depreciation on the vehicles during a specified period of time; or vehicles subject to operating leases
with a fixed lease period and interest rate. We refer to vehicles subject to these agreements as “program” vehicles
and vehicles not subject to these agreements as “risk” vehicles because we retain the risk associated with such
vehicles’ residual values at the time of their disposition. Our agreements with automobile manufacturers typically
require that we pay more for program vehicles and maintain them in our fleet for a minimum number of months
and impose certain return conditions, including vehicle condition and mileage requirements. When we return
program vehicles to the manufacturer, we receive the price guaranteed at the time of purchase and are therefore
protected from fluctuations in the price of previously-owned vehicles in the wholesale market. In 2022,
approximately 24% of the vehicles we disposed of were sold pursuant to repurchase or guaranteed depreciation
programs. Over the past several years, program vehicles have comprised of a decreasing proportion of our fleet.
The approximate percentage of program vehicles in our average rental fleet within each of our reporting segments
in 2022 was 44% for International and less than 1% for the Americas, respectively. The future percentages of
program and risk vehicles in our fleet will depend on several factors, including our expectations for future used
vehicle prices, our seasonal needs and the availability and attractiveness of manufacturers’ repurchase and
guaranteed depreciation programs.
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Fleet Dispositions
We dispose of our risk vehicles largely through alternative disposition channels, including direct-to-consumer,
online auctions, and direct-to-dealer sales, as well as through more traditional automobile auctions. Alternative
disposition channels provide the opportunity to increase vehicle sales prices and reduce relevant fleet costs
compared to selling vehicles at auctions. Ultimate Test Drive program, retail locations, and RubyCar, our online
retail sales platform, offer customers the ability to purchase well-maintained, late-model rental vehicles from our
fleet. We dispose of our program vehicles in accordance with repurchase or guaranteed depreciation programs
with major vehicle manufacturers.
Fleet Utilization
In 2022, our average quarterly vehicle rental fleet size ranged from a low of approximately 594,000 vehicles in the
first quarter to a high of approximately 707,000 vehicles in the third quarter. Average fleet utilization for 2022,
which is based on the number of rental days (or portion thereof) that vehicles are rented compared to the total
amount of time that vehicles are available for rent, ranged from approximately 67% to approximately 71%. Our
average car rental fleet size and utilization are typically highest in the summer months. Our calculation of
utilization may not be comparable to other companies’ calculation of similarly titled metrics.
Fleet Maintenance
We place a strong emphasis on the quality of our vehicle maintenance for customer safety and customer
satisfaction reasons, and because quick and proper repairs are critical to fleet utilization. To accomplish this task,
we have developed and continue to evolve specialized training programs for our technicians. Our Supply Chain
Department reviews, distributes, and makes accessible OEM technical service bulletins that can be retrieved
electronically at our repair locations. In addition, we have implemented policies and procedures to promptly
address manufacturer recalls as part of our ongoing maintenance and repair efforts to maximize the customer
experience.
CUSTOMER SERVICE
Our commitment to delivering a consistently high level of customer service across all of our brands is a critical
element of our success and business strategy. Our Customer Led, Service Driven™ program focuses on
continually improving the overall customer experience based on our research of customer service practices,
improved customer insights, executing our customer relationship management strategy, delivering customer-
centric employee training and leverage our mobile applications technology and the enriched experience it
provides our customers. In addition, our social media platform allows us to engage with our customers in their
preferred channel, which enables us to meet the needs of our customers while promoting our brands to gain more
market share and drive customer loyalty.
The employees at our Company-operated locations are trained and empowered to resolve most customer issues
at the location level. We also continuously track customer-satisfaction levels by sending location-specific surveys
to recent customers and utilize detailed reports and tracking to assess and identify ways that we can improve our
customer service delivery and the overall customer experience. Our location-specific surveys ask customers to
evaluate their overall satisfaction with their rental experience and the likelihood that they will recommend our
brands, as well as key elements of the rental experience. Results are analyzed in aggregate and by location to
help further enhance our service levels to our customers.
We also offer rental options that provide greater control, self-service and contactless capabilities. While our mobile
applications provide a fast customer experience, a company representative is available to meet customers’ needs.
Our survey platform includes specific questions to learn more about individual preferences and find innovative
ways to better serve and anticipate our customers’ needs.
AIRPORT CONCESSION AGREEMENTS
We generally operate our vehicle rental and car sharing services at airports under concession agreements with
airport authorities, pursuant to which we typically make airport concession payments and/or lease payments. In
general, concession fees for on-airport locations are based on a percentage of total commissionable revenues (as
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defined by each airport authority), often subject to minimum annual guaranteed amounts. Concessions are
typically awarded by airport authorities every three to ten years based upon competitive bids. Our concession
agreements with the various airport authorities generally impose certain minimum operating requirements, provide
for relocation in the event of future construction and provide for abatement of the minimum annual guarantee in
the event of extended low passenger volume.
OTHER BUSINESS CONSIDERATIONS
SEASONALITY
Our operating results are subject to variability due to seasonality, macroeconomic conditions and other factors.
Car rental volumes tend to be associated with the travel industry, particularly airline passenger volumes, or
enplanements, which in turn tend to reflect general economic conditions. Our operations are also seasonal, with
the third quarter of the year historically having been our strongest due to the increased level of leisure travel
during the quarter. We have a partially variable cost structure and routinely adjust the size, and therefore the cost,
of our rental fleet in response to fluctuations in demand.
The following chart presents our quarterly revenues for the years ended December 31, 2020, 2021 and 2022.
Revenues by Quarter
$4,000
$3,547
$3,244
$3,001
$2,771
$2,569 $2,432
$2,371
Millions
$2,000 $1,753
$1,534
$1,355 $1,372
$760
$0
Q Q Q Q Q Q Q Q Q Q Q Q
1- 2- 3- 4- 1- 2- 3- 4- 1- 2- 3- 4-
20 20 20 20 20 20 20 20 20 20 20 20
20 20 20 20 21 21 21 21 22 22 22 22
COMPETITION
The competitive environment for our industry is generally characterized by intense price and service competition
among global, local and regional competitors. Competition in our vehicle rental operations is based primarily upon
price, customer service quality, including usability of booking systems and ease of rental and return, vehicle
availability, reliability, rental locations, product innovation and national or international distribution. In addition,
competition is also influenced strongly by advertising, marketing, loyalty programs and brand reputation. We
believe the prominence and service reputation of our brands, extensive worldwide ownership of mobility solutions
and commitment to innovation provides us with a competitive advantage.
The use of technology has increased pricing transparency among vehicle rental companies and other mobility
solutions providers enabling cost-conscious customers to more easily compare on the Internet and their mobile
devices the rates available for the mobility solutions that fit their needs. This transparency has further increased
the prevalence and intensity of price competition in the industry.
Our vehicle rental operations compete primarily with Enterprise Holdings, Inc., which operates the Enterprise,
National and Alamo car rental brands; Hertz Global Holdings, Inc., which operates the Hertz, Dollar and Thrifty
brands; Europcar Mobility Group, which operates the Europcar, Goldcar, InterRent, Buchbinder, Fox Rent A Car
and Ubeeqo brands; and Sixt SE. We also compete with smaller local and regional vehicle rental companies for
vehicle rental market share, and with ride-hailing companies largely for short length trips in urban areas. Our
Zipcar brand also competes with various local and regional mobility companies, including mobility services
sponsored by several auto manufacturers, ride-hailing and car sharing companies and other technology players in
the mobility industry. Our Budget Truck operations in the United States competes with several other local, regional
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and nationwide truck rental companies including U-Haul International, Inc., Penske Truck Leasing Corporation,
Ryder System, Inc., Enterprise Truck Rental, and Hertz.
INSURANCE AND RISK MANAGEMENT
Our vehicle rental and corporate operations expose us to various types of claims for bodily injury, death and
property damage related to the use of our vehicles and/or properties, as well as general employment-related
matters stemming from our operations. In addition, we currently purchase insurance coverage to limit our
exposure to legal fees and expenses resulting from cybersecurity breaches. We generally retain economic
exposure for liability to third parties arising from vehicle rental and car sharing services in the United States,
Canada, Puerto Rico and the U.S. Virgin Islands, in accordance with the minimum financial responsibility
requirements (“MFRs”) and primacy of coverage laws of the relevant jurisdiction. In certain cases, we assume
liability above applicable MFRs, up to $5 million per occurrence, other than in cases involving a negligent act on
the part of the Company, for which we purchase insurance coverage for exposures beyond retained amounts from
a combination of unaffiliated excess insurers.
In Europe, we insure the risk of liability to third parties arising from vehicle rental and car sharing services in
accordance with local regulatory requirements primarily through insurance policies provided by unaffiliated
insurers. We retain a portion of the insured risk of liability through local deductibles, and by reinsuring certain risks
through our captive insurance subsidiary AEGIS Motor Insurance Limited. In Australasia, motor vehicle bodily
injury insurance coverage is compulsory and provided upon vehicle registration. In addition, we provide our
customers with third-party property damage insurance through an unaffiliated third-party insurer. We retain a
share of property damage risk through local deductibles. AEGIS Motor Insurance Limited reinsures certain risks
through unaffiliated companies, which limits its liabilities.
We offer our U.S. customers a range of optional insurance products and coverages such as supplemental liability
insurance, personal accident insurance, personal effects protection, emergency sickness protection, automobile
towing protection and cargo insurance, which create additional risk exposure for us. When a customer elects to
purchase supplemental liability insurance or other optional insurance related products, we typically retain
economic exposure to loss, since the insurance is provided by an unaffiliated insurer that is reinsuring its
exposure through our captive insurance subsidiary, Constellation Reinsurance Co., Ltd. Additional personal
accident insurance offered to our customers in Europe is provided by a third-party insurer, and primarily reinsured
by our Avis Budget Europe International Reinsurance Limited subsidiary. We otherwise bear these and other risks,
except to the extent that the risks are transferred through insurance or contractual arrangements.
OUR INTELLECTUAL PROPERTY
We rely primarily on a combination of trademark, trade secret and copyright laws, as well as contractual
provisions with employees and third parties, to establish and protect our intellectual property rights. The service
marks “Avis,” “Budget” and “Zipcar” and related marks or designs incorporating such terms and related logos and
marks such as “We Try Harder,” “We Know The Road” and “Own The Trip, Not The Car” are material to our
vehicle rental and car sharing businesses. Our subsidiaries and licensees actively use these marks. All of the
material marks used by Avis, Budget and Zipcar are registered (or have applications pending for registration) with
the U.S. Patent and Trademark Office as well as in foreign jurisdictions. Our subsidiaries own the marks and other
intellectual property, including the Wizard system, used in our business. We also own trademarks and logos
related to the “Apex Car Rentals” brand in Australia and New Zealand, the “Payless Car Rental” brand in the
United States and several other countries, the “Maggiore” and “Morini Rent” brands in Italy, the “FranceCars”
brand in France and the “Turiscar” brand in Portugal. Our subsidiaries have also filed patent applications
pertaining to fleet and connected car technology in the U.S. and other countries.
ENVIRONMENTAL, SOCIAL & GOVERNANCE (“ESG”)
We recognize our role as one of the world’s leading mobility solutions providers. As a result, we are focused on
supporting the transition to a low-carbon economy and employ practices designed to promote a more fair, just and
equal workplace and community.
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The Environment: We are committed to offering safe and low-carbon transportation solutions:
• Greenhouse Gas Emissions: As our corporate and leisure customers become increasingly aware and
concerned about pollution and congestion caused by vehicles, we aim to provide sustainable
transportation solutions by leveraging connected vehicle technology and introducing more fuel efficient
and low emission vehicles.
• Sustainable Operations: We are driving the efficiencies needed to reduce our environmental impact and
enhance the sustainability of our operations. These are mainly driven by improvements in vehicle
preventive maintenance, the incorporation of green building practices and by complying with
environmental regulations.
• Carbon Offset Program: We work closely with our corporate customers to help them achieve their
environmental impact reduction targets through our carbon offset program.
• Sustainable Fleet: We are actively anticipating and driving changes in mobility. Connected and
autonomous vehicles are likely to become a common feature worldwide, along with an increased use of
electric and shared vehicles, which is why we are building on our core experience, data intelligence and
technology to develop entirely new lines of business and extend our offering and capabilities for our
customers, businesses and cities. Our efforts include:
◦ Car Sharing: Zipcar continually improves its car sharing technology, which includes its mobile
member app, in-vehicle telematics hardware, and reservation, fleet management and community
management systems. Zipcar’s technology platform is key to providing a successful self-service
experience for its members and effectively managing a distributed fleet of vehicles and associated
parking locations. With more than one million members worldwide, Zipcar is helping reduce traffic and
congestion.
◦ Connected Vehicles: Connected vehicles support our ability to reduce emissions through a steadfast
focus on fleet maintenance and optimization.
◦ Fleet Efficiency: We offer our customers the opportunity to choose from a wide variety of vehicles,
including hybrids, electric or fuel-efficient vehicles at almost all of our locations. Our fleet consists
primarily of vehicles from the current and immediately preceding model year - this ensures the highest
possible standards of air emissions control.
Social: We believe that our success has its foundation in how we treat our employees. We seek to foster an
environment where communication among our employees is open, honest, and respectful; performance is
recognized; growth is encouraged; and accomplishments - individual and collective - are celebrated. We also
seek to support the well-being and development of the people we employ and the communities in which they
work. Our efforts include:
• Giving Back: We are a global company with local reach in numerous communities around the world.
Whether we work individually or as a team, doing the right thing and supporting our communities helps
employees feel their work is more than just a job, and makes them feel proud to be part of the Avis
Budget Group family. As well as encouraging our employees to volunteer in their local communities, we
are committed to supporting a variety of causes and charities that aid people in crisis situations.
• Supporting Community Resilience: Over the past 70 years, we have developed strong competencies in
responding to business disruptions. Whether the disruption is man-made, an extreme weather event or a
global health crisis, our business continuity programs are central to how we respond in times of crisis. Our
program’s focus is on preparing and protecting our people, property and infrastructure. We utilize an “all
hands on deck” approach within our incident management and command structure to ensure that we
respond as rapidly and effectively as possible. We have also developed longstanding partnerships with
leading national disaster response agencies, which strengthen our ability to provide support to affected
customers, employees and communities.
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Governance: Our Board of Directors monitors the effectiveness of our policy and decision making, including with
respect to ESG, on the current and long-term value of our company.
Our most recent Corporate Governance documents are available on the Company’s website. The information
contained on the Company’s website is not included in, or incorporated by reference into, this Annual Report on
Form 10-K.
OUR HUMAN CAPITAL RESOURCES AND MANAGEMENT
Our human capital objectives include identifying, recruiting, retaining, incentivizing and integrating our existing and
future or prospective employees. Our compensation program is designed to attract, retain and motivate highly
qualified employees and executives.
Employees
As of December 31, 2022, we employed approximately 24,500 people worldwide, of whom approximately 6,000
were employed on a part-time basis. Of our approximately 24,500 employees, approximately 8,000 were
employed in our International segment. In our Americas segment, the majority of our employees are at-will
employees and, therefore, not subject to any type of employment contract or agreement. In our International
segment, we enter into employment contracts and agreements in those countries in which such relationships are
mandatory or customary. The provisions of these agreements correspond in each case with the required or
customary terms in the subject jurisdiction. Many of our employees are covered by a variety of union contracts
and governmental regulations affecting, among other things, compensation, job retention rights and pensions.
We strive to maintain satisfactory relationships with all of our employees, including the unions and work councils
representing these employees. As of December 31, 2022, approximately 28% of our employees were covered by
collective bargaining or similar agreements with various labor unions. We believe our employee relations are
satisfactory. We have never experienced a large-scale work stoppage.
Employee Benefits
Supporting our employees with the right benefits is one of the most important things we do. We understand
benefits are a key element to a total reward package, so ensuring we provide meaningful benefit programs and
resources across the globe is an integral part of how we reward employees, including with respect to healthcare
and retirement. As a global company, benefits will vary by country to reflect local practices and cultures, but our
commitment to providing comprehensive and meaningful benefits and resources is consistent across the world.
We continuously review and, when necessary, update our programs to ensure they remain flexible, competitive,
and aligned to what is important for our employees and their families.
Global Gender Pay Equity
To ensure we are compensating both men and women employees fairly and equitably, we utilize a global Center
of Excellence total rewards function which standardizes and harmonizes our rewards programs across all
countries. As a result, we have established pay programs that provide for equal incentive pay opportunity for all
employees in same or similar positions across the globe. Additionally, we utilize global guidelines and standards
to inform compensation decisions for all new hires and promotions. To monitor our performance for our
management employees, we evaluate base salary placement relative to our internal salary ranges for men and
women. For our hourly field workforce (non-management employees), we maintain pay equity through our
standardized compensation practices in which all employees begin at the same start rate, based on their location
and position, and annual pay increases are applied consistently to all employees based on tenure.
Recruitment and Development
Our talent strategy is solidly rooted in attracting and retaining a diverse workforce. We run numerous recruitment
programs that aim to give back to our local communities. Our Talent Acquisition teams have strong relationships
with organizations that help us reach a diverse pool of candidates including LGBTQ+ and those with disabilities.
We believe that our employees possess a wealth of knowledge that could and should be shared with others. We
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have a wealth of established learning and talent programs that we make available to our employees, including a
digital learning platform that has transformed the way we produce, manage and share learning resources.
Diversity, Inclusion and Belonging
We embrace diversity and inclusion. We value each employee around the world, whose talent, skill and
personality have helped establish us as a leading global mobility provider. We believe that embracing and
promoting diversity is a critical component of our success and we have committed to creating a safe, supportive
and inclusive environment. As an equal-opportunity employer, we are proud to provide an inclusive workplace that
embraces and celebrates demographic, cultural and lifestyle differences. We strive to have a diverse and
inclusive work environment where employees feel valued for their uniqueness, recognized for their diverse talents,
and where they can bring their whole selves to work. We have created employee resource groups (“ERGs”) to
advocate for equality, provide opportunities for advancement, and facilitate discussion around best practices and
resources to advance more targeted cultural and racial understanding and diversity. These ERGs provide a space
where employees can foster connections and develop in a supportive environment. As of the end of 2022, we had
the following ERGs: Power of Women, Power of Veterans, Power of Pride, and Power of Color.
Health and Safety
The health and safety of our employees is our highest priority because our people are our most valuable asset.
Consistent with our operating philosophy, we are committed to safety and our core belief is that health and safety
is every employee’s responsibility, not only for our employees but for our customers, vendors, and all
stakeholders. We currently collect incident rates to track safety performance for our United States operations,
which represents our largest employee population.
Well-being
We take a holistic approach to well-being. We understand that to deliver our best performance, our employees
need to be healthy and happy in all areas of their lives. Our Connecting You to Well-Being program focuses on
helping our people achieve all aspects of wellness through encouraging habits that promote physical, emotional,
and financial well-being.
REGULATION
We are subject to a wide variety of laws and regulations in the countries in which we operate, including those
relating to, among others, consumer protection, insurance products and rates, franchising, customer privacy and
data protection, securities and public disclosure, competition and antitrust, environmental matters, taxes,
automobile-related liability, corruption and anti-bribery, labor and employment matters, health and safety, claims
management, automotive retail sales, currency-exchange and other various banking and financial industry
regulations, cost and fee recovery, the protection of our trademarks and other intellectual property, and local
ownership or investment requirements. Additional information about the regulations that we are subject to can be
found in Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K.
COMPANY INFORMATION
Our principal executive office is located at 6 Sylvan Way, Parsippany, New Jersey 07054 (our telephone number
is 973-496-4700). The Company files electronically with the Securities and Exchange Commission (the “SEC”)
required reports on Form 8-K, Form 10-Q and Form 10-K; proxy materials; registration statements and other
forms or reports as required. Certain of the Company’s officers, directors and stockholders also file statements of
beneficial ownership and of changes in beneficial ownership on Forms 3, 4 and 5 with the SEC. Such materials
may be accessed electronically on the SEC’s Internet site (sec.gov). The Company maintains a website
(avisbudgetgroup.com) and copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, Section 16 reports, proxy materials and any amendments to these reports filed or furnished
with the SEC are available free of charge in the Investor Relations section of our website
(ir.avisbudgetgroup.com), as soon as reasonably practicable after filing with the SEC. Copies of our board
committee charters, Codes of Conduct and Ethics, Corporate Governance Guidelines and other corporate
governance information are also available on our website. If the Company should decide to amend any of its
board committee charters, Codes of Conduct and Ethics or other corporate governance documents, copies of
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such amendments will be made available to the public through the Company’s website. The information contained
on the Company’s website is not included in, or incorporated by reference into, this Annual Report on Form 10-K.
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ITEM 1A. RISK FACTORS
The following is a discussion of the risks, uncertainties and assumptions that we believe are material to our
business and should be considered carefully in conjunction with all of the other information set forth in this Annual
Report on Form 10-K. Although the risks are organized by headings, and each risk is discussed separately, many
are interrelated. In addition to the factors discussed elsewhere in this Annual Report on Form 10-K, the factors
described in this item could, individually or in the aggregate, cause our actual results to differ materially from
those described in any forward-looking statements. Should unknown risks or uncertainties materialize or
underlying assumptions prove inaccurate, actual results could materially differ from past results and/or those
anticipated, estimated or projected.
RISKS RELATED TO OUR INDUSTRY AND THE BROADER ECONOMY
We face risks related to the high level of competition in the mobility industry.
The mobility industry is highly competitive, with price being one of the primary factors. To the extent that our
competitors reduce their pricing and we do not provide competitive pricing, or if price increases we implement
make us less competitive, we risk losing rental volume, and reducing the chances of success for bids for customer
accounts. If competitive pressures lead us to lose rental volume or match any downward pricing and we are
unable to reduce our operating costs, then our financial condition or results of operations could be materially
adversely impacted.
Additionally, pricing in the vehicle rental industry is impacted by the size of rental fleets and the supply of vehicles
available for rent. Any significant fluctuations in the supply of rental vehicles, including as a result of actions taken
by our competitors that increases fleet significantly above market demand, could negatively affect our pricing,
operating plans or results of operations.
The competitive environment for our mobility services has become more intense as additional companies,
including automobile manufacturers, ride-hailing companies, car sharing companies and other technology players
in the mobility industry enter our existing markets or expand their operations, which may affect demand for rental
vehicles. Some of these companies may have access to substantial capital, innovative technologies or have the
ability to provide services at a relatively low cost. To the extent these companies can improve transportation
efficiency, alter driving patterns or attitudes toward vehicle rental, offer more competitive prices, undertake more
aggressive marketing campaigns, price their competing services below market or otherwise disrupt the mobility
industry, we risk heightened pricing competition and/or loss of rental volume, which could adversely impact our
business and results of operations.
The risk of competition on the basis of pricing in the truck rental industry can be even more impactful than in the
car rental industry as it can be more difficult to reduce the size of our truck rental fleet in response to significantly
reduced demand.
We face risks related to fleet costs and availability.
Fleet costs typically represent our single largest expense and can vary from year to year based on the prices that
we are able to purchase and dispose of our vehicles. We purchase program vehicles, which are guaranteed a rate
of depreciation through agreements with auto manufacturers, and non-program, or “risk” vehicles. In 2022, on
average approximately 88% of our rental fleet was comprised of risk vehicles.
The costs of our risk vehicles may be adversely impacted by the relative strength of the used car market,
particularly the market for one- to two-year old used vehicles, or potentially by the insolvency or bankruptcy of an
auto manufacturer from whom we purchase vehicles. We currently sell risk vehicles through various sales
channels in the used vehicle marketplace, including traditional auctions, on-line auctions, direct-to-dealer sales
and directly to consumers through either retail lots or on-line. These channels may not produce stable vehicle
prices in the future, as the market for used vehicles is subject to changes in demand for such vehicles, consumer
interests, inventory levels, new car pricing, interest rates, fuel costs, tariffs and general economic conditions, and
recent reports have suggested that prices in the used vehicle market may decrease in 2023 amid rising interest
rates and improved availability of new cars and trucks. A reduction in residual values for risk vehicles in our rental
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fleet could cause us to sustain a substantial loss on the sale of such vehicles or require us to depreciate those
vehicles at a more accelerated rate than previously anticipated while we own them.
If the market value of the vehicles in our fleet is reduced or our ability to sell vehicles in the used vehicle
marketplace were to become severely limited, we may have difficulty meeting collateral requirements under our
asset-backed financing facilities, which could lead to decreased capacity in such facilities and effectively increase
our fleet costs or adversely impact our profitability. In addition, if we are unable to meet our collateral requirements
under such facilities, the outstanding principal amount due may be required to be repaid earlier than anticipated. If
that were to occur, the holders of our asset-backed debt may have the ability to exercise their right to instruct the
trustee to direct the return of program vehicles and/or the sale of risk vehicles to generate proceeds sufficient to
repay such debt.
Program and leased vehicles enable us to determine our depreciation expense in advance of purchase. Our
program and leased vehicles also generally provide us with flexibility to reduce the size of our fleet rapidly. This
flexibility is affected as the percentage of program vehicles in our fleet is reduced, or if the features of the
programs provided by auto manufacturers are less favorable. Our inability to reduce the size of our fleet in
response to seasonal demand fluctuations, economic constraints or other changes in demand could have an
adverse impact on our fleet costs and results of operations.
Failure by a manufacturer to fulfill its obligations under any program agreement or incentive payment obligation,
due to insolvency, bankruptcy or other reasons, could leave us with a material expense if we are unable to
dispose of program vehicles at prices estimated at the time of purchase or with a substantial unpaid claim against
the manufacturer, particularly with respect to program vehicles that were either (i) resold for an amount less than
the amount guaranteed under the applicable program; or (ii) returned to the manufacturer, but for which we were
not paid, and therefore we could incur a substantial loss as a result of such failure to perform.
While we source our fleet purchases from a wide range of auto manufacturers, we are exposed to risk to the
extent that any auto manufacturer significantly curtails production. Such production may be curtailed as a result of
a wide range of factors, including impacts of a pandemic and supply chain impacts, including shortages of parts,
such as semiconductors, which have caused and may continue to cause certain auto manufacturers to suspend
or slow production of new vehicles. We are also exposed to risk to the extent that any auto manufacturer
increases the cost of vehicles, including as a result of inflation, labor shortages or supply chain disruptions, or
declines to sell vehicles to us on terms or at prices consistent with past practice. Should any of these risks occur,
we may be unable to obtain a sufficient number of vehicles to operate our business without significantly increasing
our fleet costs or reducing our volumes.
We face risks related to safety recalls affecting our vehicles.
Our vehicles may be subject to safety recalls by their manufacturers, which could have an adverse impact on our
business when we remove recalled vehicles from our rentable fleet. We cannot control nor predict the number of
vehicles that will be subject to manufacturer recalls in the future. Recalls often require us to retrieve vehicles from
customers and/or hold vehicles until we can arrange for the repairs described in the recalls to be completed. As
such, recalls can increase our costs, negatively impact our revenues and/or reduce our fleet utilization. If a large
number of vehicles were to be the subject of one or more recalls, or if needed replacement parts were not in
adequate supply, we may be unable to utilize recalled vehicles for a significant period of time. We may also be
subject to material liability claims or regulatory action related to vehicles subject to a safety recall. Depending on
the nature and severity of the recall, it could create customer service problems, reduce the residual value of the
vehicles involved, harm our reputation and/or have an adverse impact on our financial condition or results of
operations.
Weakness or fluctuations in travel demand or general economic conditions, or a significant increase in
fuel costs, can adversely impact our business.
Demand for vehicle rentals is generally subject to and impacted by international, national and local economic
conditions and travel demand, which can be impacted by many factors, including inflation. When travel demand or
economic conditions in the United States, Europe and/or worldwide weakens, our financial condition and results of
operations are often adversely impacted.
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Any significant airline capacity reductions, airfare or related fee increases, reduced flight schedules, or any events
that disrupt or reduce business or leisure air travel or weaken travel demand and tourism, such as work
stoppages, military conflicts, terrorist incidents, natural disasters, disease epidemics, or the response of
governments to any such events, could have an adverse impact on our results of operations. In addition, any
significant increases in fuel prices, a severe protracted disruption in fuel supplies or rationing of fuel, or severe
inflation that disrupts consumers’ discretionary spending patterns could discourage our customers from renting
vehicles or reduce or disrupt air travel, which could also adversely impact our results of operations.
Our truck rental business can be impacted by the housing market. If conditions in the housing market were to
weaken, we may see a reduction in truck rental transactions, which could have an adverse impact on our
business. Our truck rental business can also be impacted by changes in the light commercial business sector. If
the light commercial business develops their own package delivery service with a fleet of trucks and vans to use
for their business, or other large competitors enter the package delivery service industry, in particular around the
holiday season, we may see a reduction in truck rental transactions, which could have an adverse impact on our
business.
We face risks related to political, economic and commercial instability or uncertainty in the countries in
which we operate.
Our global operations expose us to risks related to international, national and local economic and political
conditions and instability. Operating our business in a number of different regions and countries exposes us to a
number of other risks, including:
• multiple and potentially conflicting laws, regulations, trade policies and agreements, and varying tax
regimes that are subject to change;
• the imposition of currency restrictions, restrictions on repatriation of earnings or other restraints, as well
as difficulties in obtaining financing in foreign countries for local operations;
• potential changes to import-export laws, trade treaties or tariffs in the countries where we purchase
vehicles;
• international trade disruptions or disputes;
• local ownership or investment requirements, or compliance with local laws, regulations or business
practices;
• uncertainty and changes to political and regulatory regimes as a result of changing social, political,
regulatory and economic environments in the United States and internationally;
• national and international conflict, including terrorist acts; and
• political and economic instability or civil unrest that may severely disrupt economic activity in affected
countries.
Exposure to these risks may adversely impact our financial condition or results of operations. Our licensees’
vehicle rental operations may also be impacted by these risks, which in turn could impact the amount of royalty
payments they make to us.
The ongoing military conflict between Russia and Ukraine and the related sanctions are causing
uncertainty that may have an adverse impact on our business, financial condition and results of
operations.
The world economy and markets are experiencing volatility and disruption from the ongoing military conflict
between Russia and Ukraine, the length and impact of which are highly unpredictable. This conflict has led to, and
could in the future lead to, significant volatility in our costs, including gas and fleet costs, including as a result of
sanctions or any embargos on oil sales imposed on or by the Russian government; further impacts to fleet
availability; and impacts on demand for travel as a result of weakness in economic conditions, increased inflation
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or increases in the cost of gas. In addition, as a result of the conflict, governmental and non-governmental entities
have issued alerts noting the potential for increased cyber-attacks. Such risks and disruptions could adversely
impact our business, results of operations and financial condition.
Impacts from COVID-19 continue to impact our company.
The COVID-19 pandemic has affected, and may continue to affect, our business, financial condition, results of
operations and/or cash flows. Governmental authorities took, and continue to take, measures to address the
pandemic, including, but not limited to, restrictions on travel. As a result, we faced, among other impacts to our
business, reductions in travel volumes, impacts to staffing levels, and delays in receiving delivery of new vehicles
from vehicle manufacturers, including, but not limited to, due to a global semiconductor supply shortage. As a
result of the delays in receiving new vehicle deliveries, the average mileage of a portion of the vehicles in our fleet
has increased, and we could face challenges meeting consumer demand and customer expectations should such
delays continue. We cannot anticipate with any certainty the length, scope or severity of the pandemic’s impact in
each of the jurisdictions that we operate, including due to new variants. If the pandemic continues, there could be
adverse impacts to our revenues, customer demand and expenses, the used car market, our workforce, our
indebtedness and adequacy of cash flow, earnings and liquidity, consumer sentiment and discretionary spending
patterns, and our overall financial condition, any of which could be material.
RISKS RELATED TO THE NATURE OF OUR BUSINESS
Damage to our reputation or brands may negatively impact our business.
Our reputation and global brands are integral to the success of our business. Maintenance of our Company’s
reputation and brands depends on many factors, including the quality of our products and services and the trust
we maintain with our customers. Negative claims or publicity regarding our Company or our operations, offerings,
practices, among many other things, may damage our brands or reputation, even if such claims are untrue.
Damage to our reputation or brands could adversely impact our revenue and profitability.
We face risks related to third-party distribution channels that we rely upon.
We rely upon third-party distribution channels to generate a significant portion of our vehicle rental reservations,
including:
• traditional and online travel agencies, airlines and hotel companies, marketing partners such as credit
card companies and membership organizations and other entities that help us attract customers; and
• global distribution systems (“GDS”), such as Amadeus, Galileo/Apollo, Sabre and Worldspan, that
connect travel agents, travel service providers and corporations to our reservation systems.
Changes in our pricing agreements, commission schedules or arrangements with third-party distribution channels,
the termination of any of our relationships or a reduction in the transaction volume of such channels, or a GDS’s
inability to process and communicate reservations to us could have an adverse impact on our financial condition
or results of operations.
We face risks related to our property leases and vehicle rental concessions.
We lease or have vehicle rental concessions at locations throughout the world, including at most airports where
we operate and at train stations throughout Europe, where vehicle rental companies are frequently required to bid
periodically for space at these locations. If we were to lose a property lease or vehicle rental concession,
particularly at an airport or a train station in a major metropolitan area, there can be no assurance that we would
be able to find a suitable replacement location on reasonable terms which could adversely impact our business.
Most leases and airport concessions have fixed obligations that can be required even if our volume drops
significantly. While we have been successful at partially mitigating some of these requirements in the past,
including when enplanements have decreased significantly, there is no guarantee that we will be able to do so in
the future, and if we are not successful our costs as a percentage of revenue could increase.
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We face risks related to the seasonality of our business.
In our business, the third quarter of the year has historically been our most profitable quarter, as measured by net
income and Adjusted EBITDA, due to the increased level of summer leisure travel and household moving activity.
We vary our fleet size over the course of the year to help manage seasonal variations in demand, as well as
localized changes in demand that we may encounter in the various regions in which we operate. Any
circumstance or occurrence that disrupts rental activity during the third quarter, especially in North America and
Europe, could have a disproportionately adverse impact on our financial condition or results of operations.
We face risks related to acquisitions, including the acquisition of existing licensees or investments in or
partnerships with other related businesses.
We may engage in strategic transactions, including the acquisition of, or investment in, existing licensees and/or
other businesses, partnerships or joint ventures. The risks involved in engaging in these types of transactions
include the possible failure to successfully integrate the operations of acquired businesses, or to realize expected
benefits within the anticipated time frame, or at all, such as cost savings, synergies, sales and growth
opportunities. In addition, the integration of an acquired business or oversight of a partnership or joint venture may
result in material unanticipated challenges, expenses, liabilities or competitive responses, including:
• inconsistencies between our standards, procedures and policies and those of an acquired business,
partnership and/or joint venture;
• costs or inefficiencies associated with the integration of our operational and administrative systems;
• the increased scope and complexity of our operations could require significant attention from
management and could impose constraints on our operations or other projects;
• unforeseen expenses, delays or conditions, including required regulatory or other third-party approvals or
consents, or provisions in contracts with third parties that could limit our flexibility to take certain actions;
• an inability to retain the customers, employees, suppliers and/or marketing partners of an acquired
business, partnership or joint venture or generate new customers or revenue opportunities through a
strategic partnership;
• the costs of compliance with local laws and regulations and the implementation of compliance processes,
as well as the assumption of unexpected liabilities, litigation, penalties or other enforcement actions;
• exposure to undetected malware and viruses embedded in the acquired IT systems of the acquired entity;
and
• higher than expected costs arising due to unforeseen changes in tax, trade, environmental, labor, safety,
payroll or pension policies.
Any one of these factors could result in delays, increased costs or decreases in the amount of expected revenues
related to or derived from a strategic transaction and could adversely impact our financial condition or results of
operations.
We face risks related to vehicle electrification.
Vehicle electrification refers to a range of technologies that uses electricity to propel a vehicle and includes hybrid,
plug-in, extended range and battery electric vehicles, as well as autonomous vehicles. We believe that the vehicle
industry will continue to experience significant change in the coming years, in particular as it relates to vehicle
electrification. Worldwide demand for electric and hybrid vehicles continues to increase, and manufacturers
continue to invest more time and cost into producing these types of vehicles in an effort to reduce fuel
consumption and greenhouse gas emissions, as mandated by various governmental standards and regulations. If
we are not adequately prepared to meet consumer demand for electric, hybrid and autonomous vehicles as such
demand develops, including if we are unable to attain an optimal and consistently reliable charging infrastructure
and systems, which will require substantial capital investment, our financial condition or results of operations
could be adversely impacted.
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We face risks related to liability and insurance.
Our global operations expose us to several forms of liability, including claims for bodily injury, death and property
damage related to the use of our vehicles, or for having our customers on our premises, as well as workers’
compensation and other claims. We may become exposed to uninsured liability at levels in excess of our
historical levels, which may exceed the level of our reserves and could adversely impact our financial condition
and results of operations. Furthermore, insurance with unaffiliated insurers may not continue to be available to us
on economically reasonable terms or at all. Should we be subject to an adverse ruling, or experience other
significant liability for which we did not plan and were not adequately insured, our results of operations, financial
position or cash flows could be negatively impacted.
We reinsure certain insurance exposures as well as offer optional insurance coverages through unaffiliated third-
party insurers that then reinsure all or a portion of their risks through our insurance company subsidiaries, which
subjects us to regulation under various insurance laws and statutes. Any changes in regulations that alter or
impede our reinsurance obligations or insurance subsidiary operations, or any negative regulatory or other legal
action against us with respect to our reinsurance, could adversely impact the economic benefits that we rely upon
to support our reinsurance efforts, which in turn would adversely impact our financial condition or results of
operations.
Optional insurance products that we offer to renters in the United States, including, but not limited to,
supplemental or additional liability insurance, personal accident insurance and personal effects protection, are
regulated under state laws. Our vehicle rental operations outside the United States must also comply with certain
local laws and regulations regarding the sale of personal accident and effects insurance by intermediaries. Any
changes in law that affect our operating requirements with respect to our sale of optional insurance products could
increase our costs of compliance or make it uneconomical to offer such products, which would lead to a reduction
in revenue and profitability. Should more of our customers decline to purchase optional liability insurance products
as a result of any changes in these laws, or otherwise, our financial condition or results of operations could be
adversely impacted.
We offer loss damage waivers to our customers as an option for them to reduce their financial responsibility that
may be incurred as a result of loss or damage to the rental vehicle. Certain states in the United States have
enacted legislation that mandates disclosure to each customer and some states have statutes that establish or
cap the daily rate that can be charged for loss damage waivers. Should new laws or regulations arise that place
new limits on our ability to offer loss damage waivers to our customers, our financial condition or results of
operations could be adversely impacted.
Additionally, current U.S. federal law pre-empts state laws that impute tort liability based solely on ownership of a
vehicle involved in an accident. If such federal law were to change, our insurance liability exposure could
materially increase.
We may be unable to collect amounts that we believe are owed to us by customers, insurers and other third
parties related to vehicle damage claims or liabilities. The inability to collect such amounts in a timely manner or to
the extent that we expect could adversely impact our financial condition or results of operations.
We face risks related to fluctuations in currency exchange rates.
Our operations generate revenue and incur operating costs in a variety of currencies. The financial position and
results of operations of many of our foreign subsidiaries are reported in the relevant local currency and then
translated to U.S. dollars at the applicable currency exchange rate for inclusion in our Consolidated Financial
Statements. Changes in exchange rates among these currencies and the U.S. dollar have affected, and will
continue to affect, among other things, the recorded levels of our assets and liabilities in our Consolidated
Financial Statements. While we take steps to manage our currency exposure, such as currency hedging, we may
not be able to effectively limit our exposure to intermediate- or long-term movements in currency exchange rates,
which could adversely impact our financial condition or results of operations.
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We face risks related to our derivative instruments.
We typically utilize derivative instruments to manage fluctuations in foreign exchange rates, interest rates and
gasoline prices. The derivative instruments we use to manage our risk are usually in the form of interest rate
swaps and caps and foreign exchange and commodity contracts. Periodically, we are required to determine the
change in fair value, called the “mark-to-market,” of some of these derivative instruments, which could expose us
to substantial mark-to-market losses or gains if such rates or prices fluctuate materially from the time we entered
into the derivatives. Accordingly, volatility in rates or prices may adversely impact our financial position or results
of operations and could impact the cost and effectiveness of our derivative instruments in managing our risks.
Earnings for future periods may be impacted by impairment charges for goodwill and intangible assets.
We carry a significant amount of goodwill and identifiable intangible assets on our consolidated balance sheets.
Goodwill is the excess of purchase price over the fair value of the net assets of acquired businesses. We assess
goodwill and indefinite-lived intangible assets for impairment each year, or more frequently if circumstances
suggest an impairment may have occurred. We have determined in the past and may again determine in the
future that a significant impairment has occurred in the value of our goodwill. Additionally, we have a significant
amount of identifiable intangible assets and fixed assets that could also be subject to impairment. If we determine
that a significant impairment has occurred in the value of our unamortized intangible assets or fixed assets, we
could be required to write off a portion of our assets, which could adversely affect our consolidated financial
condition or our reported results of operations.
RISKS RELATED TO LEGAL, REGULATORY AND ESG-RELATED MATTERS
Costs associated with lawsuits, investigations or increases in legal reserves that we establish based on
our assessment of contingent liabilities may have an adverse effect on our results of operations.
Our global operations expose us to various claims, lawsuits and other legal proceedings that arise in and outside
of the ordinary course of our business in the countries in which we operate. We may be subject to complaints and/
or litigation involving our customers, licensees, employees, independent operators and others with whom we
conduct business, including claims for bodily injury, death and property damage related to use of our vehicles or
our locations, or claims based on allegations of discrimination, misclassification as exempt, wage and hour pay
disputes, and various other claims. We could be subject to substantial costs and/or adverse outcomes from such
claims, which could have a material adverse effect on our financial condition, cash flows or results of operations.
At some of our locations, we outsource to third party independent contractors who operate the business as a
separate entity and pay a commission for operating their business under our brands. There is a growing trend in
the United States aimed at the gig economy to define independent contractors as employees. As such, we are
subject to legislative and or judicial determination that any such changes are applicable to these independent
contractors. Such determinations may require us to change the business operations and make such independent
contractor locations employee operated. This could potentially expose us to additional costs and material liability
under federal and state labor and employment and tax laws.
From time to time, our Company may be reviewed or investigated by government regulators, which could lead to
tax assessments, enforcement actions, fines and penalties or the assertion of private litigation claims. It is not
possible to predict with certainty the outcome of claims, investigations and lawsuits, which could have an adverse
impact on our financial condition or results of operations. In addition, while we maintain insurance coverage with
respect to exposure for certain types of legal claims, we may not be able to obtain such insurance on acceptable
terms in the future, if at all, and any such insurance may not provide adequate coverage against any such claims.
We face risks related to laws and regulations that could impact our global operations.
We are subject to multiple, and sometimes conflicting, laws and regulations in the countries in which we operate
that relate to, among others, consumer protection, competition and antitrust, customer privacy and data
protection, securities and public disclosure, automotive retail sales, franchising, corruption and anti-bribery,
environmental matters, taxes, automobile-related liability, labor and employment matters, cost and fee recovery,
currency-exchange and other various banking and financial industry regulations, health and safety, insurance
rates and products, claims management, protection of our trademarks and other intellectual property and other
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trade-related laws and regulations. We cannot predict the nature, scope or effect of future regulatory requirements
to which our global operations may be subject or the manner in which existing or future laws may be administered
or interpreted. Any alleged or actual violations of any law or regulation, change in law, regulation, trade treaties or
tariffs, or changes in the interpretation of existing laws or regulations may subject us to government scrutiny,
investigation and civil and criminal penalties, limit our ability to provide services in any of the countries in which we
operate and could result in a material adverse impact on our reputation, business, financial position or results of
operations.
In certain countries where we have Company-operated locations, we may recover certain costs from consumers,
including costs associated with the title and registration of our vehicles, or concession costs imposed by an airport
authority or the owner and/or operator of the premises from which our vehicles are rented. We may in the future
be subject to potential laws or regulations that could negatively impact our ability to separately state, charge and
recover such costs, which could adversely impact our financial condition or results of operations.
We are seeking Advanced Pricing Agreements with certain tax authorities to obtain certainty regarding our
transfer pricing policy While this effort is ongoing, the process of negotiating and ultimately entering into these
agreements may take several years. The ultimate results of our negotiations of these agreements with tax
authorities, the expiration of such agreements, or changes in circumstances or in the interpretation of such
agreements could increase our tax costs in these jurisdictions, including through the assessment of significant
interest charges and/or penalties if non-compliance is adjudicated. To the extent we do not have an existing
Advance Pricing Agreement or other agreement, governmental authorities could challenge our transfer pricing
policy in the future and, if challenged, we may not prevail, which could increase our tax costs or reduce savings
related to our transfer pricing policy.
We face risks related to environmental laws and regulations.
We are subject to a wide variety of environmental laws and regulations in connection with our operations,
including, among other things, with respect to the ownership or use of tanks for the storage of petroleum products
such as gasoline, diesel fuel and motor and waste oils; the treatment or discharge of waste waters; and the
generation, storage, transportation and off-site treatment or disposal of solid or liquid wastes. We maintain liability
insurance covering storage tanks at our locations. In the United States, we administer an environmental
compliance program designed to ensure that these tanks are properly registered in the jurisdiction in which they
are located and are in compliance with applicable technical and operational requirements. The tank systems
located at each of our locations may not at all times remain free from undetected leaks, and the use of these
tanks has resulted in, and from time to time in the future may result in, spills, which may be significant and may
require remediation and expose us to material uninsured liability or liabilities in excess of insurance.
We may also be subject to requirements related to the remediation of substances that have been released into
the environment at properties owned or operated by us or at properties to which we send substances for
treatment or disposal. Such remediation requirements may be imposed without regard to fault and liability for
environmental remediation can be substantial. These remediation requirements and other environmental
regulations differ depending on the country where the property is located. We have made, and will continue to
make, expenditures to comply with environmental laws and regulations, including, among others, expenditures for
the remediation of contamination at our owned and leased properties, as well as contamination at other locations
at which our wastes have reportedly been identified. Our compliance with existing or future environmental laws
and regulations may, however, require material expenditures by us or otherwise have an adverse impact on our
financial condition or results of operations.
Governments are likely to continue to pursue measures related to climate change and greenhouse gas emissions,
including vehicle travel restrictions. Should rules establishing limitations on greenhouse gas or other emissions or
rules imposing fees on entities deemed to be responsible for greenhouse gas emissions, or rules establishing
bans on diesel or fuel vehicles from entering certain locations become effective in the countries in which we
operate, demand for our services could be affected, our fleet and/or other costs could increase, and our business
could be adversely impacted.
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We face risks related to ESG matters.
Increasing attention to climate change, increasing societal expectations on companies to address climate change,
and potential consumer and customer use of substitutes to our products may result in increased costs, reduced
demand for our products, reduced profits, increased investigations and litigation, reputational harm and negative
impacts on our stock price and access to capital markets. We have developed certain initiatives, goals and
practices relating to environmental, social and governance (ESG) matters. We may not be successful in
implementing these initiatives, goals and practices, including due to factors beyond our control, and even if
successful, they may not achieve our desired or expected outcomes. If our ESG initiatives, goals, and practices
do not meet our expectations or those of our investors or other stakeholders, which continue to evolve, we may
incur additional costs, and our brand, reputation and our results of operations and financial condition may be
adversely impacted.
In addition, organizations that provide information to investors on corporate governance and related matters have
developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used
by some investors to inform their investment and voting decisions. Unfavorable ESG ratings and investment
community divestment initiatives may lead to negative publicity or investor sentiment toward us and to the
diversion of investment to other industries, which could have a negative impact on our stock price and our access
to and costs of capital.
We face risks related to franchising or licensing laws and regulations.
We license to third parties the right to operate locations using our brands in exchange for royalty payments. Our
licensing activities are subject to various laws and regulations in the countries in which we operate. In particular,
laws in the United States require that we provide extensive disclosure to prospective licensees in connection with
licensing offers and sales, as well as comply with franchise relationship laws that could limit our ability to, among
other things, terminate license agreements or withhold consent to the renewal or transfer of these agreements.
We are also subject to certain regulations affecting our license arrangements in Europe and other international
locations. Should our operations become subject to new laws or regulations that negatively impact our ability to
engage in licensing activities, our financial condition or results of operations could be adversely impacted.
We face risks related to the actions of, or failures to act by, our licensees, dealers, independent operators
or third-party vendors.
Our vehicle rental licensee and dealer locations are independently owned and operated. We also operate many of
our Company-owned locations through agreements with independent operators, which are third-party
independent contractors who receive commissions to operate such locations. We also enter into service contracts
with various third-party vendors that provide services for us or in support of our business. Under our agreements
with our licensees, dealers, independent operators and third-party vendors (collectively referred to as “third-party
operators”), the third-party operators retain control over the employment and management of all personnel at their
locations or in support of the services that they provide our Company. These agreements also generally require
that third-party operators comply with all laws and regulations applicable to their businesses, including relevant
internal policies and standards. Regulators, courts or others may seek to hold us responsible for the actions of, or
failures to act by, third-party operators or their employees based on theories of vicarious liability, negligence, joint
operations or joint employer liability. Although we actively monitor the operations of these third-party operators,
and under certain circumstances have the ability to terminate their agreements for failure to adhere to contracted
operational standards, we are unlikely to detect all misconduct or noncompliance by a third-party operator or its
employees. It is our policy to vigorously seek to be dismissed from any claims involving third-party operators and
to pursue indemnity for any adverse outcomes that affect the Company. Failure of third-party operators to comply
with laws and regulations or our operational standards, or our inability to be dismissed from claims against our
third-party operators, may expose us to liability, damages and negative publicity that may damage our brand and
reputation and adversely affect our financial condition or results of operations.
We face risks associated with changes in tax laws.
The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) eliminated the use of like-kind exchange for personal property
and allowed for full expensing of qualified property purchases through 2022. From 2004 until its elimination, we
utilized like-kind exchange to replace vehicles in a manner that allowed for a material deferral of U.S. federal and
state income taxes. The effect of the repeal of the like-kind exchange treatment for vehicle sales has been largely
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offset through 2022 by the availability of full expensing for certain business assets (including our vehicles) in the
year placed in service. The full expensing provision is scheduled to start to phase-out ratably over five years
starting in 2023 and there can be no assurance that the phase-out will be delayed or that full expensing will be
made permanent. Certain U.S. states have modified their tax statutes as a result of the Tax Act, and such state
legislation does not allow the use of full expensing benefits for state tax purposes, which negatively impacts our
tax liability in such states. Other U.S. states continue to modify their tax statutes related to full expensing.
Therefore, we cannot offer assurance that the benefits from the expected tax deductions will continue.
The Inflation Reduction Act of 2022 (the “IRA”) includes a 15% corporate alternative minimum tax on certain large
corporations and a 1% excise tax on certain corporate stock repurchases. The impact on the Company of these
provisions, which became effective on January 1, 2023, will depend on several factors, including recently released
and forthcoming interpretive regulatory guidance. The Company continues to review and assess the provisions of
the IRA, and its potential impact on our financial condition, results of operations, liquidity, and cash flows.
There is also a high level of uncertainty in today’s tax environment stemming from both global initiatives put forth
by the Organisation for Economic Co-operation and Development (the “OECD”), and unilateral measures being
implemented by various countries. As an example, the OECD has put forth two proposals—Pillar One and Pillar
Two—that revise the existing profit allocation and nexus rules (profit allocation based on location of sales versus
physical presence) and ensure a minimal level of taxation, respectively. The Council of the EU recently adopted a
Directive to ensure a global minimum level of taxation for certain multinational groups active in the EU consistent
with Pillar Two, to be effective beginning after 2023.
RISKS RELATED TO OUR CAPITAL STRUCTURE AND INDEBTEDNESS
We face risks related to our current and future debt obligations, including risks related to conditions in
the credit and asset-backed securities markets.
Our ability to satisfy and manage our debt obligations depends on our ability to generate cash flow and on overall
financial market conditions. To some extent, this is subject to prevailing economic and competitive conditions and
to certain financial, business and other factors, many of which are beyond our control. Our outstanding debt
obligations require us to dedicate a significant portion of our cash flows to pay interest and principal on our debt,
which reduces funds available to us for other purposes. Our business may not generate sufficient cash flow from
operations to permit us to service our debt obligations and meet our other cash needs, which may force us to
reduce or delay capital expenditures, sell or curtail assets or operations, seek additional capital or seek to
restructure or refinance our indebtedness. If we must sell or curtail our assets or operations, it may negatively
affect our ability to generate revenue. Certain of our debt obligations contain restrictive covenants and provisions
that limit our ability to, among other things, incur additional debt; provide guarantees; pay dividends or
distributions, redeem or repurchase capital stock; prepay, redeem or repurchase debt; create or incur liens; make
distributions from our subsidiaries; sell assets and capital stock of our subsidiaries; and consolidate merge with or
into, or sell substantially all of our assets to, another person. These covenants and provisions also limit our ability
to respond to adverse changes in general economic, industry and competitive conditions, as well as changes in
government regulation and changes to our business.
Our failure to comply with these restrictive covenants and provisions, if not waived, would cause a default under
the applicable debt agreement and could result in a cross-default under several of our other debt obligations,
including our U.S. and European asset-backed debt facilities. If such a default were to occur, we could be required
to repay or accelerate debt payments to the lenders or holders of our debt, and there can be no assurance that
we would be able to refinance or obtain a replacement for such financing programs.
We finance our vehicle fleet purchases and operations through the use of asset-backed securities in the United
States, Canada, Australia and Europe and other debt financing structures available through the credit markets. If
the asset-backed financing and/or credit markets were to be disrupted for any reason, we may be unable to obtain
refinancing for our operations or vehicle fleet purchases at current levels, or at all, when our respective asset-
backed financings or debt financings mature. Likewise, any disruption of the asset-backed financing or credit
markets could also increase our borrowing costs, as we seek to refinance existing debt or increase our
indebtedness. In addition, we could be subject to increased collateral requirements to the extent that we request
any amendment or renewal of any of our existing asset-backed or debt financings.
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We face risks related to increases in interest rates.
A portion of our borrowings, primarily our vehicle-backed borrowings, bears interest at variable rates that expose
us to interest rate risk. If interest rates continue to increase, whether due to continued increases in market interest
rates or one or more increases in our own cost of borrowing, our debt service obligations for our variable rate
indebtedness would increase even though the amount of borrowings remain the same, and our results of
operations could be adversely affected. As of December 31, 2022, our total outstanding debt of approximately
$18.6 billion included unhedged interest rate sensitive debt of approximately $5.8 billion. During our seasonal
borrowing peak in 2022, outstanding unhedged interest rate sensitive debt totaled approximately $7.2 billion.
Virtually all of our debt under vehicle programs and certain of our corporate indebtedness matures within the next
five years. If we are unable to refinance maturing indebtedness at interest rates that are equivalent to or lower
than the interest rates on our maturing debt, our results of operations or our financial condition may be adversely
affected.
We face certain risks related to our share repurchase program.
Our Board of Directors previously authorized the repurchase of up to $8.1 billion of our common stock under a
plan originally approved in 2013 and subsequently expanded most recently in February 2023 (the “Share
Repurchase Program”). As of February 13, 2023, approximately $1.7 billion remains available under the Share
Repurchase Program. If we purchase additional shares of our common stock under the Share Repurchase
Program, the percentage of our outstanding common stock owned by SRS Investment Management, LLC and its
affiliates (“SRS”) may increase, even without further action by SRS. Under the terms of the Fourth Amended and
Restated Cooperation Agreement between the Company and SRS, SRS has committed, with respect to shares of
common stock SRS holds in excess of 35% of the Company’s outstanding common stock, to exercise its voting
rights in the same proportion in which other shares of common stock are voted. Notwithstanding this commitment,
the ownership by SRS of more than 50% of the Company’s outstanding common stock could trigger, or increase
the likelihood that we trigger, certain change in control provisions in the indentures governing our senior notes.
The Company must make a 101% change of control offer for the senior notes if, within 60 days following a change
of control, the ratings on the notes are downgraded by one or more gradations or withdrawn and the applicable
rating agency announces that such downgrade or withdrawal is attributable to the change of control.
RISKS RELATED TO OUR INTELLECTUAL PROPERTY MATTERS, DATA SECURITY AND PRIVACY
We face risks related to our protection of our intellectual property.
We have registered certain marks and designs as trademarks in the United States and in certain other countries.
At times, competitors may adopt service names similar to ours, thereby impeding our ability to build brand identity
and possibly leading to market confusion. In addition, we have been subject to, and from time to time in the future
may be subject to, trade name or trademark infringement claims brought by owners of other registered
trademarks or trademarks that incorporate variations of our registered trademarks. From time to time, we have
acquired or attempted to acquire Internet domain names held by others when such names have caused consumer
confusion or had the potential to cause consumer confusion. Our efforts to enforce or protect our proprietary rights
related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective
and could result in substantial costs and diversion of resources and could adversely impact our financial condition
or results of operations.
We face risks related to our reliance on communications networks and centralized information systems.
We rely heavily on the satisfactory performance and availability of our information systems, including our
reservation systems, websites and network infrastructure to attract and retain customers, accept reservations,
process rental and sales transactions, manage our fleet of vehicles, account for our activities and otherwise
conduct our business. We rely on third-party communications service and system providers for technology
services. We have been subjected to, and from time to time in the future may be subject to, a failure or
interruption that results in the unavailability of certain of our information systems. Such a failure or interruption, or
a major disruption, could cause a loss of reservations, interfere with our fleet management, slow rental and sales
processes, create negative publicity that damages our reputation or otherwise adversely impacts our ability to
manage our business effectively. We may experience system interruptions or disruptions for a variety of reasons,
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including from network failures, power outages, cyber-attacks, employee errors, software errors, an unusually
high volume of visitors attempting to access our systems, or other events such as fire, explosions, earthquakes,
storms, floods, epidemics, strikes, acts of war, civil unrest or terrorist acts. Because we are dependent in part on
independent third parties for the implementation and maintenance of certain aspects of our systems and because
some of the causes of system interruptions may be outside of our control, we may not be able to remedy such
interruptions in a timely manner, or at all. Our systems’ business continuity plans and insurance programs seek to
mitigate such risks but they cannot fully eliminate the risks.
We face risks related to cybersecurity breaches of our systems and information technology.
Threats to network and data security are becoming increasingly diverse and sophisticated. As cybersecurity
threats become more frequent, intense and sophisticated, costs of proactive defense measures may increase.
Third parties may have the technology or expertise to breach the security of our customer transaction data and
our security measures may not prevent or timely detect physical security or cybersecurity breaches, which could
result in substantial harm to our business, our reputation or our results of operations. We rely on encryption and/or
authentication technology licensed from and, at times, administered by independent third parties to secure
transmission of confidential information, including credit card numbers and other customer personal information.
Our outsourcing agreements with these third-party service providers, including third-party hosted cloud
environments, generally require that they have adequate security systems in place to protect our customer
transaction data. Despite the implementation of cybersecurity measures (including access controls, data
encryption, vulnerability assessments, continuous monitoring, and maintenance of backup and protective
systems), our information technology systems or those used by our third-party service providers may still be
vulnerable to a breach. Additionally, if a third-party service provider on which we rely experiences a breach, we
may not learn of such breach in a timely manner, or at all, which may inhibit our ability to mitigate its impacts, and
exacerbate the risks described in this paragraph.
In addition, anyone who is able to circumvent our security measures, or those of our third-party service providers,
could misappropriate proprietary information or cause interruptions in our operations. Risks of cybersecurity
incidents caused by malicious third parties using sophisticated, targeted methods to circumvent firewalls,
encryption, and other security defenses, could include hacking, viruses, malicious software, ransomware, phishing
attacks, denial of service attacks and other attempts to capture, disrupt or gain unauthorized access to data are
rapidly evolving and could lead to disruptions in our reservation system or other data systems, unauthorized
release of confidential or otherwise protected information or corruption of data. The techniques used by third
parties change frequently and may be difficult to detect for long periods of time. Any successful efforts by
individuals to infiltrate, break into, disrupt, damage or otherwise steal from the Company’s, its licensees’ or its
third-party service providers’ security or information systems could damage our reputation and expose us to
increased cybersecurity protection costs, litigation or other liability that could adversely impact our financial
condition or results of operations. A cybersecurity breach resulting in the unauthorized use or disclosure of certain
personal information could put individuals at risk of identity theft and financial or other harm and result in costs to
the Company in investigation, remediation, legal defense and in liability to parties who are financially harmed.
Failure to appropriately address these issues could also give rise to potentially material legal risks and liabilities.
We are subject to privacy, data protection, data security and other regulations, as well as private industry
standards, which could negatively impact our global operations and cause us to incur additional
incremental expense or reputational harm that impacts our future operating results.
Our business requires the secure processing and storage of personal information relating to our customers,
employees, business partners and others. Current privacy and data protection laws, particularly the European
Union’s General Data Protection Regulation and the equivalent in the United Kingdom (collectively, the “GDPR”),
California Consumer Privacy Act including modifications by the California Privacy Rights Act (collectively, the
“CCPA”), the Virginia Consumer Data Protection Act (“VCDPA”), and other regulations in the jurisdictions in which
we operate impose obligations and restrictions regarding the types of information that we may collect, process,
sell and retain about our customers, employees and other individuals with whom we deal or propose to deal,
some of which may be non-public personal data. Several other US state privacy laws will go into effect in 2023,
including the Colorado Privacy Act, the Connecticut Data Privacy Act, and the Utah Consumer Privacy Act. These
laws and regulations, each wide-ranging in scope, provide individuals located in those jurisdictions greater control
over their personal data. These laws impose several requirements relating to rights of the individuals to whom the
personal data relates, the information provided to the individuals, the security and confidentiality of the personal
data, data breach notification, the use of third-party processors in connection with the processing of personal
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data, and the transfer or sale of personal data, and measures we must take to demonstrate compliance. These
laws also impose significant forfeitures and penalties for noncompliance and afford private rights of action to
individuals under certain circumstances. The Company has adopted policies and procedures in compliance with
these laws, which may need to be updated as additional information concerning best practices are made available
through guidance from regulatory authorities or published enforcement decisions. Privacy laws in the countries
where we operate are developing at a rapid pace and may be interpreted and applied inconsistently from
jurisdiction to jurisdiction and impose inconsistent or conflicting requirements. Complying with varying
jurisdictional privacy requirements could increase our operating costs, divert management attention or require
additional changes to our business practices. Should we be found to not be in compliance with the GDPR, CCPA,
VCDPA or similar privacy and data protection laws, we could be subject to substantial monetary forfeitures,
government consent decrees, regulatory enforcement actions, and other penalties that could negatively impact
our operating results or harm our reputation.
The centralized nature of our information systems combined with the global nature of our business requires the
routine flow of information about employees, customers and potential customers across national borders,
particularly in the United States, the United Kingdom and Europe. In 2020, the Court of Justice of the European
Union invalidated mechanisms for transferring personal information out of the EU. This decision imposes
additional obligations and restrictions related to data transfers between the EU and other countries, including the
U.S., and may affect our ability to serve our customers and efficiently manage our employees and operations. In
addition, our failure to maintain the security of the data we hold, whether as a result of our own error or the actions
of others, could harm our reputation or give rise to legal liabilities that adversely impact our financial condition or
results of operations. Privacy and data protection laws and regulations restrict the ways that we process our
transaction information and the Payment Card Industry imposes strict customer credit card data security
standards to ensure that our customers’ credit card information is protected. Failure to meet these data security
standards could result in substantial increased fees to credit card companies, other liabilities and/or loss of the
right to collect credit card payments, which could adversely impact our financial condition or results of operations.
GENERAL RISK FACTORS
We face risks related to the market price of our common stock.
We cannot predict the prices at which our common stock will trade. The market price of our common stock has
experienced substantial volatility in the past and may fluctuate widely in the future, depending on many factors,
some of which may be beyond our control, including, but not limited to, the factors described in this “Risk Factors”
section and the section titled “Forward-Looking Statements.” If any of these factors materialize, it could cause our
stock price to fall and may expose us to litigation, including class action lawsuits that, even if unsuccessful, could
be costly to defend, distract management, and harm our reputation.
Certain provisions of our certificate of incorporation and by-laws and Delaware law could prevent or delay
a potential acquisition of control of our Company, which could decrease the trading price of our common
stock.
Our amended and restated certificate of incorporation, amended and restated by-laws and the laws in the State of
Delaware contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids
by making such practices or bids unacceptably expensive to the prospective acquirer and to encourage
prospective acquirers to negotiate with our Board of Directors rather than to attempt a hostile takeover. Delaware
law also imposes restrictions on mergers and other business combinations between us and any holder of 15% or
more of our outstanding common stock.
We believe these provisions protect our stockholders from coercive or otherwise unfair takeover tactics by
effectively requiring those who seek to obtain control of the Company to negotiate with our Board of Directors and
by providing our Board with more time to assess any such potential acquisition of control. However, these
provisions could apply even if such a potential acquisition of control of the Company may be considered beneficial
by some stockholders and could delay or prevent an acquisition of control that our Board of Directors determines
is not in the best interests of our Company and our stockholders.
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ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our principal executive offices are located at 6 Sylvan Way, Parsippany, New Jersey 07054 pursuant to a lease
agreement that expires in October 2023. Upon expiration of our lease agreement, we plan to relocate to another
property in the same city. We own a facility in Virginia Beach, Virginia, which serves as a satellite administrative
facility for our car and truck rental operations. We also lease office space in Tulsa, Oklahoma, and Boston,
Massachusetts, pursuant to leases expiring in 2025 and 2031, respectively. These locations primarily provide
operational and administrative services or contact center operations for our Americas segment. We also lease
office space in Bracknell, England, Barcelona, Spain and Budapest, Hungary, pursuant to leases expiring in 2032,
2026 and 2026, respectively, for corporate offices, contact center activities and other administrative functions,
respectively, for our International segment. Other office locations throughout the world are leased for
administrative, regional sales and operations activities.
We lease or have vehicle rental concessions for our brands at locations throughout the world. We own
approximately 3% of the locations from which we operate and in some cases we sublease to licensees or other
third parties. The remaining locations from which we operate our vehicle rental businesses are leased or operated
under concession agreements with governmental authorities and private entities. Those leases and concession
agreements typically require the payment of minimum rents or minimum concession fees and often also require
us to pay or reimburse operating expenses, to pay additional rent, or concession fees above guaranteed
minimums, based on a percentage of revenues or sales arising at the relevant premises, or to do both. See
Note 3 – Leases to our Consolidated Financial Statements for information regarding lease commitments.
We believe that our properties are sufficient to meet our present needs and we do not anticipate any difficulty in
securing additional space, as needed, on acceptable terms.
ITEM 3. LEGAL PROCEEDINGS
For information regarding legal proceedings, see Note 15 – Commitments and Contingencies to our Consolidated
Financial Statements.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
MARKET FOR COMMON EQUITY
Our common stock is currently traded on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “CAR.”
At January 31, 2023, the number of stockholders of record was 2,083.
DIVIDEND POLICY
We neither declared nor paid any cash dividends on our common stock in 2022 or 2021, and we do not currently
anticipate paying cash dividends on our common stock. However, we evaluate our dividend policy on a regular
basis and may pay dividends in the future, subject to compliance with the covenants in our senior credit facility,
the indentures governing our senior notes and our vehicle financing programs. The declaration and payment of
future dividends to holders of our common stock will be at the discretion of our Board of Directors and will also
depend upon many factors, including our financial condition, earnings, capital requirements of our businesses,
covenants associated with certain debt obligations, legal requirements, regulatory constraints, industry practice
and other factors that the Board of Directors deems relevant.
ISSUER PURCHASES OF EQUITY SECURITIES
Total Number of Total Number of Shares Approximate Dollar Value of
Shares Average Purchased as Part of Publicly Shares That May Yet Be
Purchased (in Price Paid Announced Plans or Programs Purchased Under the Plans or
millions) per Share (in millions) Programs ($ in millions)
October 2022 1.5 $ 173.33 1.5 $ 1,123
November 2022 1.5 225.02 1.5 785
December 2022 0.5 188.54 0.5 691
3.5 $ 197.68 3.5 $ 691
The Company’s Board of Directors has authorized the repurchase of up to approximately $8.1 billion of its
common stock under a plan originally approved in 2013 and subsequently expanded, most recently in February
2023. Under the Company’s stock repurchase program, the Company repurchases shares from time to time in
open market transactions, and may also repurchase shares in accelerated share repurchases, tender offers,
privately negotiated transactions or by other means. Repurchases may also be made under a plan pursuant to
Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The timing and
amount of repurchase transactions will be determined by the Company’s management based on its evaluation of
market conditions, the Company’s share price, legal requirements, restricted payment capacity under its debt
instruments and other factors. The stock repurchase program may be suspended, modified or discontinued
without prior notice.
PERFORMANCE GRAPH
Set forth below are a line graph and table comparing the cumulative total stockholder return of our common stock
against the cumulative total returns of peer group indices, the S&P Midcap 400 Index, and the Dow Jones US
Transportation Average Index for the period of five fiscal years commencing December 31, 2017 and ending
December 31, 2022. The broad equity market indices used by the Company are the S&P Midcap 400 Index,
which measures the performance of mid-sized companies, and the Dow Jones US Transportation Average Index,
which measures the performance of transportation companies. The graph and table depict the result of an
investment on December 31, 2017 of $100 in the Company’s common stock, the S&P Midcap 400 Index and the
Dow Jones US Transportation Average Index, including investment of dividends.
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As of December 31,
2017 2018 2019 2020 2021 2022
Avis Budget Group, Inc. $ 100.00 $ 51.23 $ 73.47 $ 85.00 $ 472.58 $ 373.59
S&P Midcap 400 Index $ 100.00 $ 88.92 $ 112.21 $ 127.54 $ 159.12 $ 138.34
Dow Jones US Transportation
Average Index $ 100.00 $ 87.67 $ 105.94 $ 123.44 $ 164.44 $ 135.56
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with Part I, Item 1, “Business”, Item 1A, “Risk Factors” and
our Consolidated Financial Statements and accompanying Notes included in this Annual Report on Form 10-K
commencing on page F-1. Our actual results of operations may differ materially from those discussed in forward-
looking statements as a result of various factors, including but not limited to those included in Part I, Item 1A,
“Risk Factors” and other portions of this Annual Report on Form 10-K. Unless otherwise noted, all dollar amounts
in tables are in millions.
OVERVIEW
OUR COMPANY
We operate three of the most globally recognized brands in mobility solutions, Avis, Budget and Zipcar together
with several other brands, well recognized in their respective markets. We are a leading vehicle rental operator in
North America, Europe, Australasia and certain other regions we serve, with an average rental fleet of
approximately 655,000 vehicles in 2022. We also license the use of our trademarks to licensees in the areas in
which we do not operate directly. We and our licensees operate our brands in approximately 180 countries
throughout the world.
RESULTS OF OPERATIONS
A discussion regarding our financial condition and results of operations for the year ended December 31, 2022
compared to 2021 is presented below. A discussion regarding our financial condition and results of operations for
the year ended December 31, 2021 compared to 2020 can be found under Part II, Item 7 in our Annual Report on
Form 10-K for the year ended December 31, 2021, filed with the SEC on February 17, 2022, which is available on
the SEC’s website at www.sec.gov and our Investor Relations website at ir.avisbudgetgroup.com.
In 2022, we saw strong demand and pricing for vehicle rentals, driven by global travel demand, and favorable
conditions in the used-vehicle market in the United States. This coupled with disciplined cost management and
continued fleet management resulted in revenues of approximately $12.0 billion, net income of $2.8 billion and
Adjusted EBITDA of $4.1 billion for the year ended December 31, 2022.
We are susceptible to a number of industry-specific and global macroeconomic factors that may cause our actual
results of operations to differ from our historical results of operations or current expectations. The factors and
trends that we currently believe are or will be most impactful to our results of operations and financial condition
include the following: interest rates, inflationary impact on items such as commodity prices and wages, used car
values, and an economic downturn that may impact travel demand. We continue to monitor the potential favorable
or unfavorable impacts of these and other factors on our business, operations, financial condition, and future
results of operations. Our strategy continues to primarily focus on costs and customer experience to strengthen
our company, enable resilience, and deliver stakeholder value.
We measure performance principally using the following key metrics: (i) rental days, which represent the total
number of days (or portion thereof) a vehicle was rented, (ii) revenue per day, which represents revenues divided
by rental days, (iii) vehicle utilization, which represents rental days divided by available rental days, with available
rental days being defined as average rental fleet times the number of days in the period, and (iv) per-unit fleet
costs, which represent vehicle depreciation, lease charges and gain or loss on vehicle sales, divided by average
rental fleet. Our rental days, revenue per day and vehicle utilization metrics are all calculated based on the actual
rental of the vehicle during a 24-hour period. We believe that this methodology provides management with the
most relevant metrics in order to effectively manage the performance of the business. Our calculation may not be
comparable to the calculation of similarly-titled metrics by other companies. We present currency exchange rate
effects to provide a method of assessing how our business performed excluding the effects of foreign currency
rate fluctuations. Currency exchange rate effects are calculated by translating the current-year results at the prior-
period average exchange rate plus any related gains and losses on currency hedges.
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We assess performance and allocate resources based upon the separate financial information of our operating
segments. In identifying our reportable segments, we also consider the nature of services provided by our
operating segments, the geographical areas in which our segments operate and other relevant factors.
Management evaluates the operating results of each of our reportable segments based upon revenues and
“Adjusted EBITDA,” which we define as income from continuing operations before non-vehicle related
depreciation and amortization; any impairment charges; restructuring and other related charges; early
extinguishment of debt costs; non-vehicle related interest; transaction-related costs, net; charges for
unprecedented personal-injury and other legal matters, net, which includes amounts recorded in excess of $5
million related to class action lawsuits; non-operational charges related to shareholder activist activity, which
include third party advisory, legal and other professional fees; COVID-19 charges, net; other (income) expense,
net, and income taxes.
We revised our definition of Adjusted EBITDA to exclude other (income) expense, net. We did not revise prior
years' Adjusted EBITDA because there were no other charges similar in nature. We believe Adjusted EBITDA is
useful as a supplemental measure in evaluating the performance of our operating businesses and in comparing
our results from period to period. We also believe that Adjusted EBITDA is useful to investors because it allows
them to assess our results of operations and financial condition on the same basis that management uses
internally. Adjusted EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute
for net income or other income statement data prepared in accordance with U.S. GAAP. Our presentation of
Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.
Year Ended December 31, 2022 vs. Year Ended December 31, 2021
Our consolidated results of operations comprised the following:
Year Ended
December 31,
%
2022 2021 $ Change Change
Revenues $ 11,994 $ 9,313 $ 2,681 29%
Expenses
Operating 5,285 4,255 1,030 24%
Vehicle depreciation and lease charges, net 828 1,197 (369) (31%)
Selling, general and administrative 1,348 1,145 203 18%
Vehicle interest, net 402 313 89 28%
Non-vehicle related depreciation and amortization 225 272 (47) (17%)
Interest expense related to corporate debt, net:
Interest expense 250 218 32 15%
Early extinguishment of debt — 136 (136) n/m
Restructuring and other related charges 19 64 (45) (70%)
Transaction-related costs, net 8 5 3 60%
Other (income) expense, net (7) — (7) n/m
Total expenses $ 8,358 $ 7,605 $ 753 10%
Income before income taxes 3,636 1,708 1,928 n/m
Provision for income taxes 880 425 455 n/m
Net income $ 2,756 $ 1,283 $ 1,473 n/m
Less: net loss attributable to non-controlling interests (8) (2) (6) n/m
Net income attributable to Avis Budget Group, Inc. $ 2,764 $ 1,285 $ 1,479 n/m
__________
n/m Not meaningful.
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Revenues increased $2.7 billion, or 29%, for the year ended December 31, 2022 compared to 2021, primarily due
to a 23% increase in volume and a 8% increase in revenue per day, excluding exchange rate effects, partially
offset by a $327 million negative impact from currency exchange rate movements. Total expenses increased 10%
for the year ended December 31, 2022, compared to 2021, primarily due to increased demand, partially offset by
cost discipline as volume returned. Our effective tax rates for the years ended December 31, 2022 and 2021 were
provisions of approximately 24% and 25% , respectively. As a result of these items, our net income increased by
$1.5 billion compared to 2021. For the years ended December 31, 2022 and 2021, we reported earnings per
diluted share of $57.16 and $19.44, respectively.
Operating expenses decreased to 44.1% of revenue for the year ended December 31, 2022 compared to 45.7%
in 2021, primarily due to increased revenues and cost discipline as volume returned. Vehicle depreciation and
lease charges decreased to 6.9% of revenue for the year ended December 31, 2022 compared to 12.9% in 2021,
primarily due to 41% lower per unit fleet cost, excluding exchange rate effects, driven by a favorable trend in the
used-vehicle market. Selling, general and administrative costs decreased to 11.2% of revenue for the year ended
December 31, 2022 compared to 12.3% in 2021, primarily due to increased revenues and cost discipline as
volume returned. Vehicle interest costs represented 3.4% of revenue, unchanged for the year ended
December 31, 2022 compared to 2021.
Following is a more detailed discussion of the results of each of our reportable segments and reconciliation of net
income to Adjusted EBITDA:
2022 2021
Adjusted Adjusted
Revenues EBITDA Revenues EBITDA
Americas $ 9,474 $ 3,660 $ 7,557 $ 2,364
International 2,520 560 1,756 118
Corporate and Other (a) — (87) — (71)
Total Company $ 11,994 $ 4,133 $ 9,313 $ 2,411
Reconciliation of net income (loss) to Adjusted EBITDA
2022 2021
Net income $ 2,756 $ 1,283
Provision for income taxes 880 425
Income before income taxes $ 3,636 $ 1,708
Add: Non-vehicle related depreciation and amortization (b) 235 279
Interest expense related to corporate debt, net:
Interest expense 250 218
Early extinguishment of debt — 136
Restructuring and other related charges (c) 19 64
Transaction-related costs, net (d) 8 5
Unprecedented personal-injury and other legal matters, net (e) 1 3
COVID-19 charges, net (f) (9) (2)
Other (income) expense, net (7) —
Adjusted EBITDA $ 4,133 $ 2,411
__________
(a)
Includes unallocated corporate overhead which is not attributable to a particular segment.
(b)
Includes cloud computing costs of $10 million and $7 million in 2022 and 2021, respectively, within operating expenses.
(c)
Other related charges include costs associated with the separation of certain of our officers.
(d)
Primarily comprised of acquisition and integration related expenses.
(e)
Reported within operating expenses in our consolidated results of operations.
(f)
The following table presents the unusual, direct and incremental costs due to the COVID-19 pandemic:
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2022 2021
Minimum annual guaranteed rent in excess of concession fees, net $ (9) $ (2)
Vehicles damaged in overflow parking lots, net of insurance proceeds — (7)
Other charges — 7
Operating expenses (9) (3)
Selling, general and administrative expenses — 1
COVID-19 charges, net $ (9) $ (2)
Americas
2022 2021 % Change
Revenues $ 9,474 $ 7,557 25%
Adjusted EBITDA $ 3,660 $ 2,364 55%
Revenues increased 25% for the year ended December 31, 2022 compared to 2021, primarily due to a 22%
increase in volume and a 3% increase in revenue per day.
Operating expenses are consistent with prior year at 43.8% of revenue for the year ended December 31, 2022
compared to 43.7% in 2021. Vehicle depreciation and lease charges decreased to 4.4% of revenue for the year
ended December 31, 2022 compared to 11.3% in 2021, primarily due to increased revenues and a 61% decrease
in per-unit fleet costs, excluding exchange rate effects, driven by a favorable trend in the used-vehicle market.
Selling, general and administrative costs decreased to 9.5% of revenue for the year ended December 31, 2022
compared to 10.3% in 2021, primarily due to increased revenues and cost discipline as volume returned. Vehicle
interest costs increased to 3.7% of revenue for the year ended December 31, 2022 compared to 3.4% in 2021,
primarily due to higher interest rates.
Adjusted EBITDA was $1.3 billion higher for the year ended December 31, 2022 compared to 2021, primarily due
to increased revenues, lower per-unit fleet costs and cost discipline as volume returned.
International
2022 2021 % Change
Revenues $ 2,520 $ 1,756 44%
Adjusted EBITDA $ 560 $ 118 375%
Revenues increased 44% for the year ended December 31, 2022, compared to 2021, primarily due to a 31%
increase in revenue per day, excluding exchange rate effects, a 23% increase in volume, partially offset by a $310
million negative impact from currency exchange rate movements.
Operating expenses decreased to 44.3% of revenue for the year ended December 31, 2022 compared to 53.5%
in 2021, primarily due to increased revenues and cost discipline as volume returned. Vehicle depreciation and
lease charges decreased to 16.4% of revenue for the year ended December 31, 2022 compared to 19.7% in
2021, primarily due to increased revenues and improved utilization, partially offset by a 10% increase in per-unit
fleet costs, excluding exchange rate effects. Selling, general and administrative costs decreased to 15.0% of
revenue for the year ended December 31, 2022 compared to 17.1% in 2021, primarily due to increased revenues
and cost discipline as volume returned. Vehicle interest costs decreased to 2.2% of revenue for the year ended
December 31, 2022 compared to 3.1% in 2021, primarily due to increased revenue.
Adjusted EBITDA was $442 million higher for the year ended December 31, 2022 compared to 2021, primarily
due to increased revenues and cost discipline as volume returned, partially offset by an increase in per-unit fleet
costs and a $80 million negative impact from currency exchange rate movements.
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Corporate and Other
2022 2021 % Change
Revenues $ — $ — n/m
Adjusted EBITDA $ (87) $ (71) 23%
__________
n/m Not meaningful.
Adjusted EBITDA decreased $16 million for the year ended December 31, 2022, compared to 2021, due to higher
selling, general and administrative expenses related to current year performance accruals and computer
technology transformation costs, which are not attributable to a particular segment.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
We present separately the financial data of our vehicle programs. These programs are distinct from our other
activities as the assets under vehicle programs are generally funded through the issuance of debt that is
collateralized by such assets. The income generated by these assets is used, in part, to repay the principal and
interest associated with the debt. Cash inflows and outflows relating to the generation or acquisition of such
assets and the principal debt repayment or financing of such assets are classified as activities of our vehicle
programs. We believe it is appropriate to segregate the financial data of our vehicle programs because, ultimately,
the source of repayment of such debt is the realization of such assets.
FINANCIAL CONDITION
As of December 31,
2022 2021 Change
Total assets exclusive of assets under vehicle programs $ 8,499 $ 8,581 $ (82)
Total liabilities exclusive of liabilities under vehicle programs 9,656 8,933 723
Assets under vehicle programs 17,428 14,019 3,409
Liabilities under vehicle programs 16,971 13,876 3,095
Stockholders’ equity (700) (209) (491)
The increase in liabilities exclusive of liabilities under vehicle programs compared to 2021 is principally related to
the increase in corporate indebtedness from the issuance of Floating Rate Term Loan due March 2029. See
“Liquidity and Capital Resources” and Note 13 – Long-term Corporate Debt and Borrowing Arrangements to our
Consolidated Financial Statements.
The increases in assets and liabilities under vehicle programs are principally related to the increase in the size of
our vehicle rental fleet to meet increased demand. The decrease in stockholders’ equity compared to 2021 is
principally related to our share repurchases, partially offset by comprehensive income.
LIQUIDITY AND CAPITAL RESOURCES
Overview
Our principal sources of liquidity are cash on hand and our ability to generate cash through operations and
financing activities, as well as available funding arrangements and committed credit facilities, each of which is
discussed below.
In March 2022, we entered into a $750 million Floating Rate Term Loan due March 2029, at a price of 97% of the
aggregate principal amount, with interest paid monthly, which is part of our senior credit facilities. The Floating
Rate Term Loan due March 2029 bears interest at one-month Secured Overnight Financing Rate (“SOFR”) plus
350 basis points.
During 2022, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued approximately $2.1 billion of
asset-backed notes with expected final payment dates ranging from March 2023 to February 2028, and a
weighted average interest rate of 4.94%. The proceeds from these borrowings were used to fund the repayment
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of maturing vehicle-backed debt and the acquisition of rental cars in the United States.
Our Board of Directors has authorized the repurchase of up to $8.1 billion of our common stock under a plan
originally approved in 2013 and subsequently expanded, most recently in February 2023. Our stock repurchases
may occur through open market purchases, privately negotiated transactions or trading plans pursuant to Rule
10b5-1 of the Exchange Act. The amount and timing of specific repurchases are subject to market conditions,
applicable legal requirements, restricted payment capacity under our debt instruments and other factors. The
repurchase program may be suspended, modified or discontinued at any time without prior notice. The
repurchase program has no set expiration or termination date. For the year ended December 31, 2022, we
repurchased approximately 16.7 million shares of common stock at a cost of approximately $3.3 billion under the
program. As of February 13, 2023, approximately $1.7 billion of authorization remained available to repurchase
common stock under the program.
Cash Flows
Year Ended December 31, 2022 vs. Year Ended December 31, 2021
The following table summarizes our cash flows:
Year Ended December 31,
2022 2021 Change
Cash provided by (used in):
Operating activities $ 4,707 $ 3,491 $ 1,216
Investing activities (4,299) (6,306) 2,007
Financing activities (360) 2,687 (3,047)
Effect of changes in exchange rates on cash and cash
equivalents, program and restricted cash (32) (11) (21)
Net change in cash and cash equivalents, program and restricted
cash 16 (139) 155
Cash and cash equivalents, program and restricted cash,
beginning of period 626 765 (139)
Cash and cash equivalents, program and restricted cash, end of
period $ 642 $ 626 $ 16
The increase in cash provided by operating activities during 2022 compared with 2021 is primarily due to the
increase in our net income.
The decrease in cash used in investing activities during 2022 compared with 2021 is primarily due to the increase
in proceeds received on vehicle sales.
The decrease in cash provided by financing activities during 2022 compared with 2021 is primarily due to the
increase in repurchases of common stock and net payments on vehicle borrowings, offset by a decrease in net
payments on corporate borrowings.
We anticipate that our non-vehicle property and equipment additions will be approximately $325 million in 2023.
Debt and Financing Arrangements
At December 31, 2022, we had approximately $18.5 billion of indebtedness (including corporate indebtedness of
approximately $4.7 billion and debt under vehicle programs of approximately $13.8 billion). For information
regarding our debt and borrowing arrangements, see Note 1 – Basis of Presentation, Note 13 – Long-term
Corporate Debt and Borrowing Arrangements, and Note 14 – Debt Under Vehicle Programs and Borrowing
Arrangements to our Consolidated Financial Statements.
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LIQUIDITY RISK
Our primary liquidity needs include the procurement of rental vehicles to be used in our operations, servicing of
corporate and vehicle-related debt and the payment of operating expenses. The present intention of management
is to reinvest the undistributed earnings of our foreign subsidiaries indefinitely into our foreign operations. Our
primary sources of funding are operating revenue, cash received upon the sale of vehicles, borrowings under our
vehicle-backed borrowing arrangements and our senior revolving credit facility, and other financing activities.
Our liquidity has in the past been, and could in the future be, negatively affected by any financial market
disruptions or the absence of a recovery or worsening of the U.S. and worldwide economies, which may result in
unfavorable conditions in the mobility industry, in the asset-backed financing market and in the credit markets
generally. We believe these factors have affected and could further affect the debt ratings assigned to us by credit
rating agencies and the cost of our borrowings. Additionally, a worsening or prolonged downturn in the worldwide
economy or a disruption in the credit markets could further impact our liquidity due to (i) decreased demand and
pricing for vehicles in the used-vehicle market, (ii) increased costs associated with, and/or reduced capacity or
increased collateral needs under, our financings, (iii) the adverse impact of vehicle manufacturers being unable or
unwilling to honor their obligations to repurchase or guarantee the depreciation on the related program vehicles
and (iv) disruption in our ability to obtain financing due to negative credit events specific to us or affecting the
overall debt market (see Part I, Item 1A, “Risk Factors” for further discussion).
As of December 31, 2022, we had access to $0.6 billion of available cash and cash equivalents and available
borrowings under our revolving credit facility of approximately $1.0 billion, providing us with access to an
approximate $1.6 billion of total liquidity.
Our liquidity position could also be negatively impacted if we are unable to remain in compliance with the
consolidated first lien leverage ratio requirement and other covenants associated with our senior credit facilities
and other borrowings. As of December 31, 2022, we were in compliance with the financial covenants governing
our indebtedness. For additional information regarding our liquidity risks, see Part I, Item 1A, “Risk Factors”.
CONTRACTUAL OBLIGATIONS
For contractual obligations for material cash requirements from known contractual and other obligations as part of
a liquidity and capital resources discussion, see Note 3 – Leases, Note 13 – Long-term Corporate Debt and
Borrowing Arrangements, Note 14 – Debt Under Vehicle Programs and Borrowing Arrangements, and Note 15 –
Commitments and Contingencies to our Consolidated Financial Statements.
CRITICAL ACCOUNTING ESTIMATES
Accounting Policies
The results of the majority of our recurring operations are recorded in our financial statements using accounting
policies that are not particularly subjective, nor complex. However, in presenting our financial statements in
conformity with generally accepted accounting principals (GAAP), we are required to make estimates and
assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required
to make relate to matters that are inherently uncertain as they relate to future events and/or events that are
outside of our control. If there is a significant unfavorable change to current conditions, it could result in a material
adverse impact to our consolidated results of operations, financial position and liquidity. We believe that the
estimates and assumptions we used when preparing our financial statements were the most appropriate at that
time. Presented below are those accounting policies that we believe require subjective and complex judgments
that could potentially affect reported results.
Goodwill and Other Indefinite-lived Intangible Assets. We have reviewed the carrying value of our goodwill and
other indefinite-lived intangible assets for impairment. In performing this review, we are required to make an
assessment of fair value for our goodwill and other indefinite-lived intangible assets. When determining fair value,
we utilize various assumptions, including the fair market trading price of our common stock and management’s
projections of future cash flows, which include forecast of future revenue and Adjusted EBITDA. When
appropriate, comparative market multiples and other factors are used to corroborate the discounted cash flow
results. A change in these underlying assumptions will cause a change in the results of the tests and, as such,
could cause the fair value to be less than the respective carrying amount. In such event, we would then be
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required to record a charge, which would impact earnings. We review the carrying value of goodwill and other
indefinite-lived intangible assets for impairment annually or more frequently if circumstances indicate that an
impairment may have occurred.
Our goodwill and other indefinite-lived intangible assets are allocated among our reporting units. During 2022,
2021 and 2020, there was no impairment of goodwill and other intangible assets. See Note 7 – Intangible Assets
to our Consolidated Financial Statements.
Vehicles. We present vehicles at cost, net of accumulated depreciation, on the Consolidated Balance Sheets. We
record the initial cost of the vehicle, net of incentives and allowances from manufacturers. We acquire our rental
vehicles either through repurchase and guaranteed depreciation programs with certain automobile manufacturers
or outside of such programs. For rental vehicles purchased under such programs, we depreciate the vehicles
such that the net book value on the date of sale or return to the manufacturers is intended to equal the contractual
guaranteed residual values. For risk vehicles acquired outside of manufacturer repurchase and guaranteed
depreciation programs, we depreciate based on the vehicles’ estimated residual market values at their expected
dates of disposition. The estimation of residual values requires us to make assumptions regarding the age and
mileage of the vehicle at the time of disposal, as well as expected used vehicle market conditions. We regularly
evaluate estimated residual values and adjusts depreciation rates as appropriate. Differences between actual
residual values and those estimated result in a gain or loss on disposal and are recorded as part of vehicle
depreciation and lease charges, net, at the time of sale. See Note 2 – Summary of Significant Accounting Policies
to our Consolidated Financial Statements. For a discussion of risk factors and assumptions relative to our vehicle
valuations, refer to Item 1A, “Risk Factors”, included under Part 1 of this Annual Report on Form 10-K.
Income Taxes. We account for income taxes under the asset and liability method, which requires the recognition
of deferred tax assets and liabilities for the expected future tax consequences of events that have been reflected
in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the
differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect
for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax
assets and liabilities is recognized in income in the period that includes the enactment date.
We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In
making such determination, we consider all available positive and negative evidence, including scheduled
reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent results of
operations. In the event we were to determine that we would be able to realize deferred income tax assets in the
future in excess of their net recorded amount, we would make an adjustment to the valuation allowance which
would reduce the provision for income taxes. Currently we do not record valuation allowances on the majority of
our tax loss carryforwards as there are adequate deferred tax liabilities that could be realized within the
carryforward period.
See Note 2 – Summary of Significant Accounting Policies and Note 9 – Income Taxes to our Consolidated
Financial Statements for more information regarding income taxes.
Public Liability, Property Damage and Other Insurance Liabilities. Insurance liabilities on our Consolidated
Balance Sheets include supplemental liability insurance, personal effects protection insurance, public liability,
property damage and personal accident insurance claims for which we are self-insured. We estimate the required
liability of such claims on an undiscounted basis utilizing an actuarial method that is based upon various
assumptions which include, but are not limited to, our historical loss experience and projected loss development
factors. The required liability is also subject to adjustment in the future based upon changes in claims experience,
including changes in the number of incidents for which we are ultimately liable and changes in the cost per
incident. See Note 2 – Summary of Significant Accounting Policies to our Consolidated Financial Statements.
Adoption of New Accounting Pronouncements
For a description of our adoption of new accounting pronouncements and the impact thereof on our business, see
Note 2 – Summary of Significant Accounting Policies to our Consolidated Financial Statements.
Recently Issued Accounting Pronouncements
For a description of recently issued accounting pronouncements and the impact thereof on our business, see
Note 2 – Summary of Significant Accounting Policies to our Consolidated Financial Statements.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to a variety of market risks, including changes in currency exchange rates, interest rates and
gasoline prices. We manage our exposure to market risks through our regular operating and financing activities
and, when deemed appropriate, through the use of derivative financial instruments, particularly currency forward
contracts to manage and reduce currency exchange rate risk; swap contracts, futures and options contracts, to
manage and reduce the interest rate risk related to our debt; and derivative commodity instruments to manage
and reduce the risk of changing unleaded gasoline prices.
We are exclusively an end user of these instruments. We do not engage in trading, market-making or other
speculative activities in the derivatives markets. We manage our exposure to counterparty credit risk related to
our use of derivatives through specific minimum credit standards, diversification of counterparties, and procedures
to monitor concentrations of credit risk. Our counterparties are substantial investment and commercial banks with
significant experience providing such derivative instruments.
Our total market risk is influenced by a wide variety of factors including the volatility present within the markets
and the liquidity of the markets. There are certain limitations inherent in the sensitivity analyses discussed below.
These “shock tests” are constrained by several factors, including the necessity to conduct the analysis based on a
single point in time and the inability to include the complex market reactions that normally would arise from the
market shifts modeled. For additional information regarding our borrowings and financial instruments, see
Note 13 – Long-term Corporate Debt and Borrowing Arrangements, Note 14 – Debt Under Vehicle Programs and
Borrowing Arrangements and Note 20 – Financial Instruments to our Consolidated Financial Statements.
Currency Risk Management
We have exposure to currency exchange rate fluctuations worldwide and particularly with respect to the
Australian, Canadian and New Zealand dollars, the euro and British pound sterling. We use currency forward
contracts and currency swap contracts to manage exchange rate risk that arises from certain intercompany
transactions and from non-functional currency denominated assets and liabilities and earnings denominated in
non-U.S. dollar currencies. Our currency forward contracts are often not designated as hedges and therefore
changes in the fair value of these derivatives are recognized in earnings as they occur. We anticipate that such
currency exchange rate risk will remain a market risk exposure for the foreseeable future.
We assess our market risk based on changes in currency exchange rates utilizing a sensitivity analysis. The
sensitivity analysis measures the potential impact on earnings, cash flows and fair values based on a hypothetical
10% appreciation or depreciation in the value of the underlying currencies being hedged, against the U.S. dollar at
December 31, 2022. With all other variables held constant, a hypothetical 10% change (increase or decrease) in
currency exchange rates would not have a material impact on our 2022 earnings. Because unrealized gains or
losses related to foreign currency forward and swap contracts are expected to be offset by corresponding gains or
losses on the underlying exposures being hedged, when combined, these foreign currency contracts and the
offsetting underlying commitments do not create a material impact on our Consolidated Financial Statements.
Interest Rate Risk Management
Our primary interest rate exposure at December 31, 2022 was interest rate fluctuation in the U.S. due to its impact
on variable rate borrowings and other interest rate sensitive liabilities. We use interest rate swaps and caps to
manage our exposure to interest rate movements. We anticipate interest rate fluctuation will remain a primary
market risk exposure for the foreseeable future.
We assess our market risk based on changes in interest rates utilizing a sensitivity analysis. Based on our interest
rate exposures and derivatives as of December 31, 2022, we estimate that a 10% change in interest rates would
not have a material impact on our 2022 earnings. Because gains or losses related to interest rate derivatives are
expected to be offset by corresponding gains or losses on the underlying exposures being hedged, when
combined, these interest rate contracts and the offsetting underlying commitments do not create a material impact
on our Consolidated Financial Statements.
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Commodity Risk Management
We have commodity price exposure related to fluctuations in the price of gasoline. We anticipate that such
commodity risk will remain a market risk exposure for the foreseeable future. We determined that a hypothetical
10% change in the price of gasoline would not have a material impact on our earnings as of December 31, 2022.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Consolidated Financial Statements and Consolidated Financial Statement Index commencing on Page F-1
hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures. Under the supervision and with the participation of our Chief Executive
Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our
disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on such evaluation, our Chief
Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures
were effective as of the end of the period covered by this annual report.
(b) Management’s Annual Report on Internal Control Over Financial Reporting. Our management is responsible
for establishing and maintaining adequate internal control over financial reporting, as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act. Our management assessed the effectiveness of our internal
control over financial reporting as of December 31, 2022. In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control - Integrated Framework (2013). Based on this assessment, our management believes that, as
of December 31, 2022, our internal control over financial reporting was effective. The effectiveness of our
internal control over financial reporting as of December 31, 2022 has been audited by Deloitte & Touche LLP,
an independent registered public accounting firm. Their attestation report is included below.
(c) Changes in Internal Control Over Financial Reporting. During the fourth quarter of 2022, there was no change
in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of
Avis Budget Group, Inc.
Parsippany, New Jersey
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Avis Budget Group, Inc. and subsidiaries (the "Company") as of
December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal
Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022 of the Company and our
report dated February 16, 2023 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 16, 2023
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ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this Item is incorporated by reference from our definitive proxy statement for the 2023
Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after
December 31, 2022.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated by reference from our definitive proxy statement for the 2023
Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after
December 31, 2022.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The information required by this Item is incorporated by reference from our definitive proxy statement for the 2023
Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after
December 31, 2022.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item is incorporated by reference from our definitive proxy statement for the 2023
Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after
December 31, 2022.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this Item is incorporated by reference from our definitive proxy statement for the 2023
Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after
December 31, 2022.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15(A)(1). FINANCIAL STATEMENTS
See Consolidated Financial Statements and Consolidated Financial Statements Index commencing on page F-1
hereof.
ITEM 15(A)(2). FINANCIAL STATEMENT SCHEDULES
See Schedule II – Valuation and Qualifying Accounts for the years ended December 31, 2022, 2021 and 2020
commencing on page G-1 hereof.
ITEM 15(A)(3). EXHIBITS
See Exhibit Index commencing on page H-1 hereof.
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AVIS BUDGET GROUP, INC.
By: /s/ CATHLEEN DEGENOVA
Cathleen DeGenova
Vice President and Chief Accounting Officer
Date: February 16, 2023
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ JOSEPH A. FERRARO President and Chief Executive Officer February 16, 2023
(Joseph A. Ferraro)
/s/ BRIAN CHOI Executive Vice President and Chief February 16, 2023
Financial Officer
(Brian Choi)
/s/ CATHLEEN DEGENOVA Vice President and Chief Accounting February 16, 2023
Officer
(Cathleen DeGenova)
/s/ BERNARDO HEES Executive Chairman of the Board of February 16, 2023
Directors
(Bernardo Hees)
/s/ JAGDEEP PAHWA Vice Chairman of the Board of Directors February 16, 2023
(Jagdeep Pahwa)
/s/ ANU HARIHARAN Director February 16, 2023
(Anu Hariharan)
/s/ LYNN KROMINGA Director February 16, 2023
(Lynn Krominga)
/s/ GLENN LURIE Director February 16, 2023
(Glenn Lurie)
/s/ KARTHIK SARMA Director February 16, 2023
(Karthik Sarma)
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) 2
Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020 5
Consolidated Statements of Comprehensive Income for the years ended December 31, 2022,
2021 and 2020 6
Consolidated Balance Sheets as of December 31, 2022 and 2021 7
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020 8
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2022, 2021
and 2020 10
Notes to Consolidated Financial Statements 11
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of
Avis Budget Group, Inc.
Parsippany, New Jersey
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Avis Budget Group, Inc. and subsidiaries (the
"Company") as of December 31, 2022 and 2021, the related consolidated statements of operations,
comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended
December 31, 2022, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to
as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting
principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based
on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated February 16, 2023, expressed an unqualified
opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express
an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that (1) relate to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our
opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters
below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they
relate.
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Vehicles - Depreciation Expense - United States Risk Vehicles - Refer to Notes 2 and 8 to the financial
statements
Critical Audit Matter Description
The Company records rental vehicles at cost, net of accumulated depreciation. The initial cost of the vehicles is
recorded net of incentives and allowances from manufacturers. Rental vehicles acquired by the Company outside
of manufacturer repurchase and guaranteed depreciation programs are referred to as risk vehicles and the
carrying values of these risk vehicles are depreciated based upon the vehicles’ estimated residual values at their
expected dates of disposition. The estimation of residual values for risk vehicles requires the Company to make
assumptions regarding factors which include, but are not limited to, the anticipated age of the vehicles and market
conditions for used vehicles at the time of disposal. The Company regularly evaluates estimated residual values
and adjusts vehicle depreciation rates as appropriate. Any adjustments to depreciation are made prospectively.
Given the volume of risk vehicles in the United States and the significant estimation uncertainty and judgments
made by management to calculate the estimated residual values of these risk vehicles, auditing the estimated
residual values of United States risk vehicles and related vehicle depreciation expense required extensive audit
effort to develop an independent expectation of residual values and depreciation expense, and a high degree of
auditor judgment was required when performing audit procedures and evaluating the results of those procedures.
The significant estimation uncertainty was primarily due to management’s assumptions regarding the impact of
future consumer demand and general economic conditions on expected pricing of used vehicles. Additionally,
auditing the calculation of the estimated residual values for United States risk vehicles was challenging due to the
volume of data inputs utilized in management’s calculation, including historical sales data and data specific to the
Company’s current fleet.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures to assess the reasonableness of the estimated residual values and vehicle depreciation
expense related to United States risk vehicles included the following, among others:
• We evaluated the appropriateness and consistency of the Company’s methods, significant assumptions and
judgments to calculate the estimated residual values of risk vehicles and the expected dates of disposition.
• We tested the effectiveness of controls over vehicle depreciation expense related to risk vehicles and
management’s review of the significant assumptions and judgments to calculate the estimated residual values
of risk vehicles, including those over the Company’s monitoring of residual values and used vehicle market
conditions.
• We assessed the reasonableness of the estimated residual values of risk vehicles by performing the following
procedures on a selection of risk vehicles:
– We tested the underlying historical data that served as the basis for the Company’s calculation of the
estimated residual values to evaluate the reasonableness of the inputs.
– We tested the mathematical accuracy of the Company’s calculation of the estimated residual values and
vehicle depreciation expense rates.
– We tested significant assumptions and judgments used in the Company’s calculation by developing an
independent expectation of residual values and compared them to the estimated residual values
calculated by the Company. Our independent expectation was calculated using our professional judgment
by reference to third-party data, information produced by the Company, subsequent vehicle sales, and
inquiries of management.
– We searched for contradictory evidence associated with the significant assumptions and judgments made
by management based on our knowledge of the industry and review of third-party industry data.
• We developed an independent expectation of depreciation expense based on, but not limited to, the vehicles’
age and results of our residual value testing and compared it to the amount recorded by the Company as
depreciation expense.
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Self-Insurance Reserves - Public Liability and Property Damage Claims - United States - Refer to Note 2 to
the financial statements
Critical Audit Matter Description
The Company is self-insured for public liability and property damage claims. These self-insurance reserves
represent an estimate for both reported claims not yet paid and claims incurred but not yet reported. The
estimated reserve requirements for such claims are calculated on an undiscounted basis using actuarial methods
and various assumptions which include, but are not limited to, historical loss experience and projected loss
development factors. The required liability is subject to adjustment in the future based upon changes in claims
experience, including changes in the number of incidents for which the Company is ultimately liable and changes
in the cost per incident.
Given the volume of public liability and property damage claims in the United States and the subjectivity of
estimating the related self-insurance reserves for reported claims not yet paid and claims incurred but not yet
reported due to uncertain exposure and projected loss development, performing audit procedures to evaluate
whether these self-insurance reserves were appropriately recorded as of December 31, 2022 required a
significant degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial
specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to United States public liability and property damage self-insurance reserves
included the following, among others:
• We tested the effectiveness of controls over management’s review of significant assumptions, key inputs and
methods used to calculate the estimate of the reported claims not yet paid and claims incurred but not yet
reported.
• We tested the underlying data that served as the basis for the Company’s actuarial analysis, including
historical claims, to test the reasonableness of the inputs to the actuarial estimate.
• With the assistance of our actuarial specialists, we developed an independent estimate of the self-insurance
reserves, including assessment of loss data and claim development factors, and compared our estimate to
management’s estimate. In addition, we performed the following:
– Evaluated the reasonableness of the methodologies used in management’s estimate based on actuarial
methods followed in the insurance industry associated with such liabilities.
– Evaluated the reasonableness of the assumptions used in management’s estimate by comparing prior-
year assumptions of expected development and ultimate loss to actuals incurred during the current year
to identify potential bias in the determination of these liabilities.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 16, 2023
We have served as the Company’s auditor since 1997.
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Avis Budget Group, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Year Ended December 31,
2022 2021 2020
Revenues $ 11,994 $ 9,313 $ 5,402
Expenses
Operating 5,285 4,255 3,322
Vehicle depreciation and lease charges, net 828 1,197 1,368
Selling, general and administrative 1,348 1,145 703
Vehicle interest, net 402 313 318
Non-vehicle related depreciation and amortization 225 272 286
Interest expense related to corporate debt, net:
Interest expense 250 218 231
Early extinguishment of debt — 136 9
Restructuring and other related charges 19 64 118
Transaction-related costs, net 8 5 3
Other (income) expense, net (7) — —
Total expenses 8,358 7,605 6,358
Income (loss) before income taxes 3,636 1,708 (956)
Provision for (benefit from) income taxes 880 425 (272)
Net income (loss) 2,756 1,283 (684)
Less: net loss attributable to non-controlling interests (8) (2) —
Net income (loss) attributable to Avis Budget Group, Inc. $ 2,764 $ 1,285 $ (684)
Earnings (loss) per share
Basic $ 58.41 $ 19.79 $ (9.71)
Diluted $ 57.16 $ 19.44 $ (9.71)
See Notes to Consolidated Financial Statements.
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Avis Budget Group, Inc.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
Year Ended December 31,
2022 2021 2020
Net income (loss) $ 2,756 $ 1,283 $ (684)
Less: net loss attributable to non-controlling interests (8) (2) —
Net income (loss) attributable to Avis Budget Group, Inc. 2,764 1,285 (684)
Other comprehensive income (loss), net of tax
Currency translation adjustments:
Currency translation adjustments, net of tax of $(11), $(20) and $23,
respectively (46) $ (35) $ 33
Reclassification of currency translation adjustments to earnings — 11 (2)
Cash flow hedges:
Net unrealized holding gains (losses), net of tax of $(20), $(6), and
$14, respectively 57 18 (39)
Reclassification of cash flow hedges to earnings, net of tax of $(2),
$(5), and $(3), respectively 7 14 8
Minimum pension liability adjustment:
Pension and post-retirement benefits, net of tax of $(4), $(13), and $12,
respectively 11 39 (36)
Reclassification of pension and post-retirement benefits to earnings,
net of tax of $(2), $(2), and $(3), respectively 3 7 6
32 54 (30)
Total comprehensive income (loss) attributable to Avis Budget
Group, Inc. $ 2,796 $ 1,339 $ (714)
See Notes to Consolidated Financial Statements.
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Avis Budget Group, Inc.
CONSOLIDATED BALANCE SHEETS
(In millions, except par value)
As of December 31,
2022 2021
Assets
Current assets:
Cash and cash equivalents $ 570 $ 534
Receivables (net of allowance for doubtful accounts of $86 and $84, respectively) 810 775
Other current assets 506 538
Total current assets 1,886 1,847
Property and equipment, net 594 537
Operating lease right-of-use assets 2,405 2,368
Deferred income taxes 1,379 1,615
Goodwill 1,070 1,108
Other intangibles, net 666 724
Other non-current assets 499 382
Total assets exclusive of assets under vehicle programs 8,499 8,581
Assets under vehicle programs:
Program cash 70 89
Vehicles, net 15,961 12,866
Receivables from vehicle manufacturers and other 421 222
Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party 976 842
17,428 14,019
Total assets $ 25,927 $ 22,600
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and other current liabilities $ 2,547 $ 2,389
Short-term debt and current portion of long-term debt 27 19
Total current liabilities 2,574 2,408
Long-term debt 4,644 3,990
Long-term operating lease liabilities 1,884 1,910
Other non-current liabilities 554 625
Total liabilities exclusive of liabilities under vehicle programs 9,656 8,933
Liabilities under vehicle programs:
Debt 2,534 2,542
Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party 11,275 8,848
Deferred income taxes 2,754 2,242
Other 408 244
16,971 13,876
Commitments and contingencies (Note 15)
Stockholders’ equity:
Preferred stock, $.01 par value—authorized 10 shares; none issued and outstanding — —
Common stock, $.01 par value—authorized 250 shares; issued 137 shares, respectively 1 1
Additional paid-in capital 6,666 6,676
Retained earnings (accumulated deficit) 2,579 (185)
Accumulated other comprehensive loss (101) (133)
Treasury stock, at cost 98 and 81 shares, respectively (9,848) (6,579)
Stockholders’ equity attributable to Avis Budget Group, Inc. (703) (220)
Non-controlling interests 3 11
Total stockholders’ equity (700) (209)
Total liabilities and stockholders’ equity $ 25,927 $ 22,600
See Notes to Consolidated Financial Statements.
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Avis Budget Group, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Year Ended December 31,
2022 2021 2020
Operating activities
Net income (loss) $ 2,756 $ 1,283 $ (684)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Vehicle depreciation 1,709 1,402 1,330
Amortization of right-of-use assets 877 806 945
(Gain) loss on sale of vehicles, net (1,019) (361) (157)
Non-vehicle related depreciation and amortization 225 272 286
Deferred income taxes 682 378 (317)
Stock-based compensation 25 30 9
Amortization of debt financing fees 34 33 33
Early extinguishment of debt costs — 136 9
Net change in assets and liabilities:
Receivables (97) (143) 115
Income taxes 6 (28) 1
Accounts payable and other current liabilities 217 414 (181)
Operating lease liabilities (879) (801) (936)
Other, net 171 70 238
Net cash provided by operating activities 4,707 3,491 691
Investing activities
Property and equipment additions (246) (108) (94)
Proceeds received on asset sales 2 3 6
Net assets acquired (net of cash acquired) (3) (46) (69)
Other, net (33) (3) —
Net cash used in investing activities exclusive of vehicle programs (280) (154) (157)
Vehicle programs:
Investment in vehicles (10,491) (10,054) (5,401)
Proceeds received on disposition of vehicles 6,606 4,077 8,753
Investment in debt securities of Avis Budget Rental Car Funding (AESOP)—related
party (439) (367) (286)
Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP)—related
party 305 192 268
(4,019) (6,152) 3,334
Net cash provided by (used in) investing activities (4,299) (6,306) 3,177
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Avis Budget Group, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In millions)
Year Ended December 31,
2022 2021 2020
Financing activities
Proceeds from long-term borrowings $ 729 $ 1,100 $ 991
Payments on long-term borrowings (24) (1,354) (308)
Net change in short-term borrowings (1) 1 —
Debt financing fees (7) (24) (26)
Proceeds from issuance of common stock — — 15
Repurchases of common stock (3,329) (1,460) (119)
Contributions from non-controlling interests 40 38 —
Net cash provided by (used in) financing activities exclusive of vehicle (2,592) (1,699) 553
programs
Vehicle programs:
Proceeds from borrowings 17,419 14,467 13,558
Payments on borrowings (15,160) (10,056) (18,138)
Debt financing fees (27) (25) (18)
2,232 4,386 (4,598)
Net cash provided by (used in) financing activities (360) 2,687 (4,045)
Effect of changes in exchange rates on cash and cash equivalents, program and
restricted cash (32) (11) 42
Net increase (decrease) in cash and cash equivalents, program and restricted cash 16 (139) (135)
Cash and cash equivalents, program and restricted cash, beginning of period 626 765 900
Cash and cash equivalents, program and restricted cash, end of period $ 642 $ 626 $ 765
Supplemental disclosure
Interest payments $ 543 $ 509 $ 503
Income tax payments, net $ 192 $ 75 $ 44
See Notes to Consolidated Financial Statements.
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Avis Budget Group, Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions)
Stockholders’
Retained Accumulated Equity
Common Stock Additional Earnings Other Treasury Stock Attributable to Non- Total
Paid-in (Accumulated Comprehensive Avis Budget controlling Stockholders’
Shares Amount Capital Deficit) Income (Loss) Shares Amount Group, Inc. Interests Equity
Balance at January 1, 2020 137.1 $ 1 $ 6,741 $ (785) $ (157) (63.2) $ (5,144) $ 656 $ — $ 656
Cumulative effect of
accounting change — — (1) — — (1) — (1)
Comprehensive loss:
Net loss — — — (684) — — — — — (684)
Other comprehensive loss — — — — (30) — — — — (30)
Total comprehensive loss (684) (30) (714) — (714)
Non-controlling interests — — (2) — — — — (2) — (2)
Net activity related to restricted
stock units — — (50) — — 0.5 54 4 — 4
Activity related to employee
stock purchase plan — — (1) — — — 1 — — —
Issuance of common stock — — (20) — — 0.4 35 15 — 15
Repurchases of common stock — — — — — (5.0) (113) (113) — (113)
Balance at December 31,
2020 137.1 $ 1 $ 6,668 $ (1,470) $ (187) (67.3) $ (5,167) $ (155) $ — $ (155)
Comprehensive income:
Net income — — — 1,285 — — — — (2) 1,283
Other comprehensive income — — — — 54 — — — — 54
Total comprehensive income 1,285 54 1,339 (2) 1,337
Contributions from non-
controlling interests — — 25 — — — — 25 13 38
Net activity related to restricted
stock units — — (17) — — 0.4 31 14 — 14
Repurchases of common stock — — — — — (14.3) (1,443) (1,443) — (1,443)
Balance at December 31,
2021 137.1 $ 1 $ 6,676 $ (185) $ (133) (81.2) $ (6,579) $ (220) $ 11 $ (209)
Comprehensive income:
Net income — — — 2,764 — — — 2,764 (8) 2,756
Other comprehensive income — — — — 32 — — 32 — 32
Total comprehensive income 2,764 32 2,796 (8) 2,788
Contributions from non-
controlling interests — — 24 — — — — 24 — 24
Net activity related to restricted
stock units — — (34) — — 0.3 (2) (36) — (36)
Repurchases of common stock — — — — — (16.7) (3,267) (3,267) — (3,267)
Balance at December 31,
2022 137.1 $ 1 $ 6,666 $ 2,579 $ (101) (97.6) $ (9,848) $ (703) $ 3 $ (700)
See Notes to Consolidated Financial Statements.
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Avis Budget Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unless otherwise noted, all dollar amounts are in millions, except per share amounts)
1. Basis of Presentation
Avis Budget Group, Inc. provides mobility solutions to businesses and consumers worldwide. The
accompanying Consolidated Financial Statements include the accounts and transactions of Avis Budget
Group, Inc. and its subsidiaries, as well as entities in which Avis Budget Group, Inc. directly or indirectly has
a controlling financial interest (collectively, “we”, “our”, “us”, or the “Company”).
We operate the following reportable business segments:
• Americas - consisting primarily of (i) vehicle rental operations in North America, South America,
Central America and the Caribbean, (ii) car sharing operations in certain of these markets, and
(iii) licensees in the areas in which we do not operate directly.
• International - consisting primarily of (i) vehicle rental operations in Europe, the Middle East,
Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii)
licensees in the areas in which we do not operate directly.
We have completed the business acquisitions discussed in Note 6 – Acquisitions to these Consolidated
Financial Statements. The operating results of the acquired businesses are included in the accompanying
Consolidated Financial Statements from the dates of acquisition.
We present separately the financial data of our vehicle programs. These programs are distinct from our
other activities since the assets under vehicle programs are generally funded through the issuance of debt
that is collateralized by such assets. The income generated by these assets is used, in part, to repay the
principal and interest associated with the debt. Cash inflows and outflows relating to the acquisition of such
assets and the principal debt repayment or financing of such assets are classified as activities of our vehicle
programs. We believe it is appropriate to segregate the financial data of our vehicle programs because,
ultimately, the source of repayment of such debt is the realization of such assets.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The Consolidated Financial Statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (“GAAP”) and include the accounts of our and all entities
in which we have a direct or indirect controlling financial interest and variable interest entities for which we
have determined we are the primary beneficiary. We consolidate joint venture activities when we have a
controlling interest and record non-controlling interests within stockholders’ equity and the statement of
comprehensive income equal to the percentage of ownership interest retained in such entities by the
respective non-controlling party. Intercompany transactions have been eliminated in consolidation.
Use of Estimates and Assumptions
The use of estimates and assumptions as determined by management is required in the preparation of the
Consolidated Financial Statements in conformity with GAAP. These estimates are based on management’s
evaluation of historical trends and other information available when the Consolidated Financial Statements
are prepared and may affect the amounts reported and related disclosures. Actual results could differ from
those estimates.
Revenue Recognition
We derive revenues primarily by providing vehicle rentals and other related products and mobility services
to commercial and leisure customers, as well as through licensing of our rental brands. Other related
products and mobility services include sales of collision and loss damage waivers under which a customer
is relieved from financial responsibility arising from vehicle damage incurred during the rental; products and
services for driving convenience such as fuel service options, roadside safety net, electronic toll collection,
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tablet rentals, access to satellite radio, portable navigation units and child safety seat rentals; and rentals of
other supplemental items including automobile towing equipment and other moving accessories and
supplies. We also receive payment from customers for certain operating expenses that we incur, including
airport concession fees that are paid by us in exchange for the right to operate at airports and other
locations, as well as vehicle licensing fees. In addition, we collect membership fees in connection with our
car sharing business.
We combine all lease and non-lease components of our vehicle rental contracts for which the timing and
pattern of transfer are the same and the lease component meets the classification of an operating lease.
Vehicle rentals and other related products and mobility services are recognized evenly over the period of
rental, which is on average approximately five days. (See Note 3 – Leases).
Licensing revenues principally consist of royalties paid by our licensees and are recorded as the licensees’
revenues are earned (over the rental period). We renew license agreements in the normal course of
business and occasionally terminate, purchase or sell license agreements. In connection with ongoing fees
that we receive from our licensees pursuant to license agreements, we are required to provide certain
services, such as training, marketing and the operation of reservation systems.
We exclude from the measurement of our transaction price any tax assessed by a governmental authority
that is both imposed on and concurrent with a specific revenue-producing transaction and collected from a
customer. As a result, revenue is recorded net of such taxes collected. Revenues and expenses associated
with gasoline, airport concessions and vehicle licensing are recorded on a gross basis within revenues and
operating expenses. Membership fees related to our car sharing business are generally nonrefundable, are
deferred and recognized ratably over the period of membership.
Revenues are recognized under Leases (Topic 842) with the exception of royalty fee revenue derived from
our licensees and revenue related to our customer loyalty program, which were approximately $165 million,
$127 million and $159 million for the years ended December 31, 2022, 2021 and 2020, respectively.
The following table presents our revenues disaggregated by geography:
Year Ended December 31,
2022 2021 2020
Americas $ 9,474 $ 7,557 $ 3,965
Europe, Middle East and Africa 1,927 1,400 1,127
Asia and Australasia 593 356 310
Total revenues $ 11,994 $ 9,313 $ 5,402
The following table presents our revenues disaggregated by brand:
Year Ended December 31,
2022 2021 2020
Avis $ 6,519 $ 4,894 $ 2,961
Budget 4,701 3,715 1,908
Other 774 704 533
Total revenues $ 11,994 $ 9,313 $ 5,402
________
Other includes Zipcar and other operating brands.
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Deferred Revenue
We record deferred revenues when cash payments are received in advance of satisfying our performance
obligations, including amounts that are refundable. In addition, certain customers earn loyalty points on
rentals, for which we defer a portion of our rental revenues generally equivalent to the estimated retail value
of points expected to be redeemed. We estimate points that will never be redeemed based upon actual
redemption and expiration patterns. Currently loyalty points expire after 12 months of member inactivity.
Future changes to expiration assumptions or expiration policy, or to program rules, may result in changes to
deferred revenue as well as recognized revenues from the program.
The following table presents changes in deferred revenue associated with our customer loyalty program:
Year Ended December 31,
2022 2021
Balance, January 1 $ 50 $ 34
Revenue deferred 52 49
Revenue recognized (41) (33)
Balance, December 31 $ 61 $ 50
_______
At December 31, 2022 and 2021, $15 million and $33 million was included in accounts payable and other current liabilities,
respectively, and $46 million and $17 million in other non-current liabilities, respectively. Non-current amounts are expected to be
recognized as revenue within two to three years.
Currency Translation
Assets and liabilities of foreign operations are translated at the rate of exchange in effect on the balance
sheet date; income and expenses are translated at the prevailing monthly average rate of exchange. The
related translation adjustments are reflected in accumulated other comprehensive income (loss) in the
stockholders’ equity section of the Consolidated Balance Sheets and in the Consolidated Statements of
Comprehensive Income (See Note 16 – Stockholders' Equity). We have designated our euro-denominated
Notes as a hedge of our investment in euro-denominated foreign operations and, accordingly, record the
effective portion of gains or losses on this net investment hedge in accumulated other comprehensive
income (loss) as part of currency translation adjustments.
Cash and Cash Equivalents, Program Cash and Restricted Cash
We consider highly liquid investments purchased with an original maturity of three months or less to be cash
equivalents. Program cash primarily represents amounts specifically designated to purchase assets under
vehicle programs and/or to repay the related debt, as such we consider it a restricted cash equivalent. The
following table provides a detail of cash and cash equivalents, program and restricted cash reported within
the Consolidated Balance Sheets to the amounts shown in the Consolidated Statements of Cash Flows:
As of December 31,
2022 2021
Cash and cash equivalents $ 570 $ 534
Program cash 70 89
Restricted cash (a) 2 3
Total cash and cash equivalents, program and restricted cash $ 642 $ 626
_________
(a)
Included within other current assets.
Property and Equipment
Property and equipment (including leasehold improvements) are stated at cost, net of accumulated
depreciation and amortization. Depreciation (non-vehicle related) is computed utilizing the straight-line
method over the estimated useful lives of the related assets. Leasehold improvements are amortized over
the shorter of the term of the lease or the estimated useful lives of the improvements. Useful lives are as
follows:
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Buildings 30 years
Furniture, fixtures & equipment 3 to 10 years
Capitalized software 3 to 7 years
Buses and support vehicles 4 to 15 years
We capitalize the costs of software developed for internal use when the preliminary project stage is
completed and management (i) commits to funding the project and (ii) believes it is probable that the project
will be completed and the software will be used to perform the function intended. The software developed or
obtained for internal use is amortized on a straight-line basis commencing when such software is ready for
its intended use. The net carrying value of software developed or obtained for internal use was $174 million
and $188 million as of December 31, 2022 and 2021, respectively.
Goodwill and Other Intangible Assets
Goodwill represents the excess, if any, of the fair value of the consideration transferred by the acquirer and
the fair value of any non-controlling interest remaining in the acquiree, if any, over the fair values of the
identifiable net assets acquired. We do not amortize goodwill, but assess it for impairment at least annually
and whenever events or changes in circumstances indicate that the carrying amounts of their respective
reporting units exceed their fair values. We perform our annual impairment assessment in the fourth quarter
of each year at the reporting unit level. We assess goodwill for such impairment by comparing the carrying
value of each reporting unit to its fair value using the present value of expected future cash flows. When
appropriate, comparative market multiples and other factors are used to corroborate the discounted cash
flow results.
Other intangible assets, primarily trademarks, with indefinite lives are not amortized but are evaluated
annually for impairment and whenever events or changes in circumstances indicate that the carrying
amount of this asset may exceed its fair value. If the carrying value of an other intangible asset exceeds its
fair value, an impairment loss is recognized in an amount equal to that excess. Other intangible assets with
finite lives are amortized over their estimated useful lives and are evaluated each reporting period to
determine if circumstances warrant a revision to these lives.
Impairment of Long-Lived Assets
We are required to assess long-lived assets for impairment whenever circumstances indicate impairment
may have occurred. This analysis is performed by comparing the respective carrying values of the assets to
the undiscounted expected future cash flows to be generated from such assets. Property and equipment is
evaluated separately at the lowest level of identifiable cash flows. If such analysis indicates that the carrying
value of these assets is not recoverable, the carrying value of such assets is reduced to fair value.
Vehicles
Vehicles are stated at cost, net of accumulated depreciation. The initial cost of the vehicles is recorded net
of incentives and allowances from manufacturers. We acquire a portion of our rental vehicles pursuant to
repurchase and guaranteed depreciation programs established by automobile manufacturers. Under these
programs, the manufacturers agree to repurchase vehicles at a specified price and date, or guarantee the
depreciation rate for a specified period of time, subject to certain eligibility criteria (such as car condition and
mileage requirements). We depreciate vehicles such that the net book value on the date of return to the
manufacturers is intended to equal the contractual guaranteed residual values, thereby minimizing any gain
or loss.
Rental vehicles acquired outside of manufacturer repurchase and guaranteed depreciation programs are
depreciated based upon their estimated residual values at their expected dates of disposition, after giving
effect to anticipated conditions in the used car market. Any adjustments to depreciation are made
prospectively.
The estimation of residual values requires us to make assumptions regarding the age and mileage of the
car at the time of disposal, as well as expected used vehicle auction market conditions. We regularly
evaluate estimated residual values and adjust depreciation rates as appropriate. Differences between
actual residual values and those estimated result in a gain or loss on disposal and are recorded as part of
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vehicle depreciation at the time of sale. Vehicle-related interest expense amounts are net of vehicle-related
interest income of $1 million, $1 million and $12 million for 2022, 2021 and 2020, respectively.
Advertising Expenses
Advertising and digital marketing costs are generally expensed in the period incurred and are recorded
within selling, general and administrative expenses in our Consolidated Statements of Operations. During
2022, 2021 and 2020, advertising costs were approximately $64 million, $81 million and $54 million,
respectively. In addition, during 2022, 2021 and 2020, digital marketing costs were approximately
$71 million, $44 million and $37 million, respectively.
Taxes
We account for income taxes under the asset and liability method, which requires the recognition of
deferred tax assets and liabilities for the expected future tax consequences of events that have been
included in the financial statements. Under this method, deferred tax assets and liabilities are determined
based on the differences between the financial statement and tax basis of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a
change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes
the enactment date. As a result of the provisions of the Tax Cuts and Jobs Act, we account for Global
Intangible Low-Taxed Income (“GILTI”) as a component of current period income tax expense in the year
incurred.
We record net deferred tax assets to the extent we believe that it is more likely than not that these assets
will be realized. In making such determination, we consider all available positive and negative evidence,
including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning
strategies and recent results of operations. In the event we were to determine that we would be able to
realize the deferred income tax assets in the future in excess of their net recorded amount, we would adjust
the valuation allowance, which would reduce the provision for income taxes.
Fair Value Measurements
We measure the fair value of assets and liabilities and discloses the source for such fair value
measurements. Financial assets and liabilities are classified as follows: Level 1, which refers to assets and
liabilities valued using quoted prices from active markets for identical assets or liabilities; Level 2, which
refers to assets and liabilities for which significant other observable market inputs are readily available; and
Level 3, which are valued based on significant unobservable inputs.
The fair value of our financial instruments is generally determined by reference to market values resulting
from trading on a national securities exchange or in an over-the-counter market (Level 1 inputs). In some
cases where quoted market prices are not available, prices are derived by considering the yield of the
benchmark security that was issued to initially price the instruments and adjusting this rate by the credit
spread that market participants would demand for the instruments as of the measurement date (Level 2
inputs). In situations where long-term borrowings are part of a conduit facility backed by short-term floating
rate debt, we have determined that its carrying value approximates the fair value of this debt (Level 2
inputs). The carrying amounts of cash and cash equivalents, available-for-sale securities, accounts
receivable, program cash and accounts payable and accrued liabilities approximate fair value due to the
short-term maturities of these assets and liabilities.
Our derivative assets and liabilities consist principally of currency exchange contracts, interest rate swaps,
interest rate caps and commodity contracts, and are carried at fair value based on significant observable
inputs (Level 2 inputs). Derivatives entered into by us are typically executed over-the-counter and are
valued using internal valuation techniques, as no quoted market prices exist for such instruments. The
valuation technique and inputs depend on the type of derivative and the nature of the underlying exposure.
We principally use discounted cash flows to value these instruments. These models take into account a
variety of factors including, where applicable, maturity, currency exchange rates, our interest rate yield
curves and counterparties, credit curves, counterparty creditworthiness and commodity prices. These
factors are applied on a consistent basis and are based upon observable inputs where available.
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Derivative Instruments
Derivative instruments are used as part of our overall strategy to manage exposure to market risks
associated with fluctuations in currency exchange rates, interest rates and gasoline costs. As a matter of
policy, derivatives are not used for trading or speculative purposes.
All derivatives are recorded at fair value either as assets or liabilities. Changes in fair value of derivatives
not designated as hedging instruments are recognized currently in earnings within the same line item as the
hedged item. The changes in fair value of a derivative that is designated as either a cash flow or net
investment hedge is recorded as a component of accumulated other comprehensive income (loss) and
reclassified into earnings in the same period or periods during which the hedged transaction affects
earnings and is presented in the same income statement line item as the earnings effect of the hedged
item. Amounts related to our derivative instruments are recognized in the Consolidated Statements of Cash
Flows consistent with the nature of the hedged item (principally operating activities).
Currency Transactions
Currency gains and losses resulting from foreign currency transactions are generally included in operating
expenses within the Consolidated Statements of Operations; however, the net gain or loss of currency
transactions on intercompany loans and the unrealized gain or loss on intercompany loan hedges are
included within interest expense related to corporate debt, net.
Self-Insurance Reserves
The Consolidated Balance Sheets include $391 million and $383 million of liabilities associated with
retained risks of liability to third parties as of December 31, 2022 and 2021, respectively. Such liabilities
relate primarily to public liability and third-party property damage claims, as well as claims arising from the
sale of ancillary insurance products including, but not limited to, supplemental liability, personal effects
protection and personal accident insurance. These obligations represent an estimate for both reported
claims not yet paid and claims incurred but not yet reported. The estimated reserve requirements for such
claims are recorded on an undiscounted basis utilizing actuarial methodologies and various assumptions
which include, but are not limited to, our historical loss experience and projected loss development factors.
The required liability is also subject to adjustment in the future based upon changes in claims experience,
including changes in the number of incidents for which we are ultimately liable and changes in the cost per
incident. These amounts are included within accounts payable and other current liabilities and other non-
current liabilities.
The Consolidated Balance Sheets also include liabilities of approximately $53 million and $48 million as of
December 31, 2022 and 2021, respectively, related to workers’ compensation, health and welfare and other
employee benefit programs. The liabilities represent an estimate for both reported claims not yet paid and
claims incurred but not yet reported, utilizing actuarial methodologies similar to those described above.
These amounts are included within accounts payable and other current liabilities and other non-current
liabilities.
Stock-Based Compensation
Stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is
recognized as expense on a straight-line basis over the vesting period. Our policy is to record
compensation expense for stock options, and restricted stock units that are time- and performance-
based, for the portion of the award that vests. Compensation expense related to market-based restricted
stock units is recognized provided that the requisite service is rendered, regardless of when, if ever, the
market condition is satisfied. We estimate the fair value of restricted stock units using the market price of
our common stock on the date of grant. We estimate the fair value of stock-based and cash unit awards
containing a market condition using a Monte Carlo simulation model. Key inputs and assumptions used in
the Monte Carlo simulation model include the stock price of the award on the grant date, the expected term,
the risk-free interest rate over the expected term, the expected annual dividend yield and the expected
stock price volatility. The expected volatility is based on a combination of the historical and implied volatility
of our publicly traded, near-the-money stock options, and the valuation period is based on the vesting
period of the awards. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the
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time of grant and, since we do not currently pay or plan to pay a dividend on our common stock, the
expected dividend yield was zero.
Business Combinations
We use the acquisition method of accounting for business combinations, which requires that the assets
acquired and liabilities assumed be recorded at their respective fair values at the date of acquisition. Assets
acquired and liabilities assumed in a business combination that arise from contingencies are recognized if
fair value can be reasonably estimated at the acquisition date. The excess, if any, of (i) the fair value of the
consideration transferred by the acquirer and the fair value of any non-controlling interest remaining in the
acquiree, over (ii) the fair values of the identifiable net assets acquired is recorded as goodwill. Gains and
losses on the re-acquisition of license agreements are recorded in the Consolidated Statements of
Operations within transaction-related costs, net, upon completion of the respective acquisition. Costs
incurred to effect a business combination are expensed as incurred, except for the cost to issue debt related
to the acquisition.
We record contingent consideration resulting from a business combination at its fair value on the acquisition
date. The fair value of the contingent consideration is generally estimated by utilizing a Monte Carlo
simulation technique, based on a range of possible future results (Level 3). Any changes in contingent
consideration are recorded in transaction-related costs, net.
Transaction-related Costs, net
Transaction-related costs, net are classified separately in the Consolidated Statements of Operations.
These costs are comprised of expenses primarily related to acquisition-related activities such as due-
diligence and other advisory costs, expenses related to the integration of the acquiree’s operations with our
comparable expenses, including the implementation of best practices and process improvements, non-cash
gains and losses related to re-acquired rights, expenses related to pre-acquisition contingencies and
contingent consideration related to acquisitions.
Investments
We account for investments for which we have the ability to exercise significant influence, but do not have a
controlling interest, using the equity method of accounting and record our proportional share of net income
or loss within operating expenses in the Consolidated Statements of Operations. We assess equity method
investments for impairment whenever events or changes in circumstances indicate that the carrying
amounts of such investments may not be recoverable. Any difference between the carrying value of the
equity method investment and its estimated fair value is recognized as an impairment charge if the loss in
value is deemed other than temporary. As of December 31, 2022 and 2021, we had investments with a
carrying value of $77 million and $72 million, respectively, recorded within other non-current assets on the
Consolidated Balance Sheets.
Aggregate realized gains and losses on equity investments and dividend income are recorded within
operating expenses on the Consolidated Statements of Operations. During 2022, 2021 and 2020, the
amounts realized from the sale of equity investments and dividend income was $12 million, $10 million and
$5 million, respectively. See Note 17 – Related Party Transactions for our equity method investment in our
former subsidiary.
Divestitures
We classify long-lived assets and liabilities to be disposed of as held for sale in the period in which they are
available for immediate sale in their present condition and the sale is probable and expected to be
completed within one year. We initially measure assets and liabilities held for sale at the lower of their
carrying value or fair value less costs to sell and assesses their fair value each reporting period until
disposed. When the divestiture represents a strategic shift that has, or will have, a major effect on our
operations and financial results, the disposal is presented as a discontinued operation.
In February 2022, we completed the sale of our operations in the United States Virgin Islands for
$13 million, for the right to operate the Avis brand. During the year ended December 31, 2022, we recorded
a gain of $2 million within restructuring and other related charges.
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In December 2021, we entered into a stock purchase agreement with Spuigroep B.V. to sell our operations
in the Netherlands. In March 2022, we completed the sale of our operations in the Netherlands for
$15 million, subject to working capital adjustments, for the right to operate the Avis and Budget brands.
During the year ended December 31, 2022, we recorded a loss of $7 million, net of impact of foreign
currency adjustments, within restructuring and other related charges. The Netherlands operations are
reported within our International reporting segment.
In May 2021, we completed the sale of our operation in Argentina to Urbiz S.A. for $4 million. As part of the
sale, Urbiz S.A. agreed to pay the purchase price, plus interest, over two years for the right to operate the
Avis and Budget brands. During the year ended December 31, 2021, we recorded a loss of $14 million, net
of the impact of foreign currency adjustments, within restructuring and other related charges. In addition, we
paid severance to terminated employees of $2 million.
Variable Interest Entity (“VIE”)
We review our investments to determine if they are VIEs. A VIE is an entity in which either (i) the equity
investors as a group lack the power through voting or similar rights to direct the activities of such entity that
most significantly impact such entity’s economic performance or (ii) the equity investment at risk is
insufficient to finance that entity’s activities without additional subordinated financial support. Entities that
are determined to be VIEs are consolidated if we are the primary beneficiary of the entity. The primary
beneficiary possesses the power to direct the activities of the VIE that most significantly impact its economic
performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are
significant to it. We will reconsider our original assessment of a VIE upon the occurrence of certain events
such as contributions and redemptions, either by us, or third parties, or amendments to an entity’s
governing documents. On an ongoing basis, we reconsider whether we are deemed to be a VIE’s primary
beneficiary. See Note 17 – Related Party Transactions for our VIE investment in our former subsidiary.
Nonmarketable Equity Securities
We classify investments without readily determinable fair values that are not accounted for under the equity
method as nonmarketable equity securities. The accounting guidance requires nonmarketable equity
securities to be recorded at cost and adjusted to fair value at each reporting period. We apply the
measurement alternative, which allows these investments to be recorded at cost, less impairment, if any,
and subsequently adjust for observable price changes of identical or similar investments of the same issuer.
Any changes in value are recorded within operating expenses. As of December 31, 2022 and 2021, our
nonmarketable equity securities within non-current assets on our Consolidated Balance sheets were not
material and no material adjustments were made to the carrying values of these securities during the years
ended December 31, 2022, 2021 or 2020.
Recently Issued Accounting Pronouncements
Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
In October 2021, the FASB issued ASU 2021-08, “Accounting for Contract Assets and Contract Liabilities
from Contracts with Customers,” which amends Topic 805 to add contract assets and contract liabilities to
the list of exceptions to the recognition and measurement principles that apply to business combinations
and to require an acquirer to recognize and measure contract assets and contract liabilities acquired in a
business combination in accordance with Topic 606. ASU 2021-08 becomes effective for us on January 1,
2023. Early adoption is permitted on a retrospective or prospective basis. The adoption of this accounting
pronouncement is not expected to have a material impact on our Consolidated Financial Statements.
Reference Rate Reform
In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848),” which amends ASU
2020-04 and clarifies the scope and guidance of Topic 848 to allow derivatives impacted by the reference
rate reform to qualify for certain optional expedients and exceptions for contract modifications and hedge
accounting. The guidance is optional and is effective for a limited period of time through December 31,
2022. As of December 31, 2022, this guidance had no impact on our Consolidated Financial Statements
and we will continue to evaluate this guidance.
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3. Leases
Lessor
The following table presents our lease revenues disaggregated by geography:
Year Ended December 31,
2022 2021 2020
Americas $ 9,401 $ 7,501 $ 3,864
Europe, Middle East and Africa 1,852 1,343 1,080
Asia and Australasia 576 342 299
Total lease revenues $ 11,829 $ 9,186 $ 5,243
The following table presents our lease revenues disaggregated by brand:
Year Ended December 31,
2022 2021 2020
Avis $ 6,420 $ 4,828 $ 2,851
Budget 4,650 3,674 1,878
Other 759 684 514
Total lease revenues $ 11,829 $ 9,186 $ 5,243
________
Other includes Zipcar and other operating brands.
Lessee
We have operating and finance leases for rental locations, corporate offices, vehicle rental fleet and
equipment. Many of our operating leases for rental locations contain concession agreements with various
airport authorities that allow us to conduct our vehicle rental operations on site. In general, concession fees
for airport locations are based on a percentage of total commissionable revenue as defined by each airport
authority, some of which are subject to minimum annual guaranteed amounts. Concession fees other than
minimum annual guaranteed amounts are not included in the measurement of operating lease ROU assets
and operating lease liabilities, and are recorded as variable lease expense as incurred. Our operating
leases for rental locations often also require us to pay or reimburse operating expenses.
We lease a portion of our vehicles under operating leases. As of December 31, 2022 and 2021, we have
guaranteed up to $65 million and $102 million, respectively, of residual values for these vehicles at the end
of their respective lease terms. We believe that, based on current market conditions, the net proceeds from
the sale of these vehicles at the end of their lease terms will equal or exceed their net book values and
therefore have not recorded a liability related to guaranteed residual values.
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The components of lease expense are as follows:
Year Ended December 31,
2022 2021 2020
Property leases (a)
Operating lease expense $ 703 $ 561 $ 575
Variable lease expense 520 433 152
Sublease income (5) (6) (6)
Total property lease expense $ 1,218 $ 988 $ 721
Vehicle leases
Finance lease expense:
Amortization of ROU assets (b) $ 29 $ 37 $ 33
Interest on lease liabilities (c) 3 4 3
Operating lease expense (b) 138 156 195
Total vehicle lease expense $ 170 $ 197 $ 231
__________
(a)
Primarily included in operating expenses and includes $(9) million, $(2) million and $60 million of minimum annual guaranteed
rent in excess of concession fees as defined in our rental concession agreement for the years ended December 31, 2022, 2021
and 2020, respectively.
(b)
Included in vehicle depreciation and lease charges, net.
(c)
Included in vehicle interest, net.
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Supplemental balance sheet information related to leases is as follows:
As of December 31,
2022 2021
Property leases
Operating lease ROU assets $ 2,405 $ 2,368
Short-term operating lease liabilities (a) $ 555 $ 496
Long-term operating lease liabilities 1,884 1,910
Operating lease liabilities $ 2,439 $ 2,406
Weighted average remaining lease term 8.2 years 8.8 years
Weighted average discount rate 4.30 % 3.84 %
Vehicle leases
Finance
Finance lease ROU assets, gross $ 267 $ 353
Accumulated amortization (45) (72)
Finance lease ROU assets, net (b) $ 222 $ 281
Short-term vehicle finance lease liabilities $ 44 $ 126
Long-term vehicle finance lease liabilities 132 116
Vehicle finance lease liabilities (c) $ 176 $ 242
Weighted average remaining lease term 2.0 years 2.2 years
Weighted average discount rate 1.82 % 1.97 %
Operating
Vehicle operating lease ROU assets (d) $ 86 $ 63
Short-term vehicle operating lease liabilities $ 64 $ 50
Long-term vehicle operating lease liabilities 22 14
Vehicle operating lease liabilities (e) $ 86 $ 64
Weighted average remaining lease term 1.4 years 1.3 years
Weighted average discount rate 4.86 % 2.66 %
_________
(a)
Included in accounts payable and other current liabilities.
(b)
Included in vehicles, net within Assets under vehicle programs.
(c)
Included in debt within liabilities under vehicle programs.
(d)
Included in receivables from vehicle manufacturers and other within assets under vehicle programs.
(e)
Included in other within liabilities under vehicle programs.
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Supplemental cash flow information related to leases is as follows:
Year Ended December 31,
2022 2021 2020
Cash payments for lease liabilities within operating
activities:
Property operating leases $ 743 $ 639 $ 740
Vehicle finance leases 3 4 3
Vehicle operating leases 137 162 196
Cash payments for lease liabilities within financing
activities:
Vehicle finance leases 181 193 294
Non-cash activities - increase in ROU assets in exchange
for lease liabilities:
Property operating leases 812 484 666
Vehicle finance leases 153 223 257
Vehicle operating leases 161 115 111
Maturities of lease liabilities as of December 31, 2022 are as follows:
Property Vehicle Vehicle
Operating Finance Operating
Leases Leases Leases
Within 1 year $ 646 $ 44 $ 64
Between 1 and 2 years 441 4 18
Between 2 and 3 years 345 128 6
Between 3 and 4 years 286 — 1
Between 4 and 5 years 234 — —
Thereafter 967 — —
Total lease payments 2,919 176 89
Less: Imputed interest (480) — (3)
Total $ 2,439 $ 176 $ 86
4. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (“EPS”) (shares in
millions):
Year Ended December 31,
2022 2021 2020
Net income (loss) attributable to Avis Budget Group, Inc.
for basic and diluted EPS $ 2,764 $ 1,285 $ (684)
Basic weighted average shares outstanding 47.3 64.9 70.5
Options and non-vested stock 1.1 1.2 —
Diluted weighted average shares outstanding $ 48.4 $ 66.1 $ 70.5
Earnings (loss) per share:
Basic $ 58.41 $ 19.79 $ (9.71)
Diluted $ 57.16 $ 19.44 $ (9.71)
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The following table summarizes our outstanding common stock equivalents that were anti-dilutive and
therefore excluded from the computation of diluted EPS (shares in millions):
As of December 31,
2022 2021 2020
Non-vested stock (a) 0.2 — 1.2
__________
(a)
The weighted average grant date fair value for anti-dilutive non-vested stock for 2022 and 2020 was $177.70 and $26.20,
respectively.
5. Restructuring and Other Related Charges
Restructuring
During second quarter 2022, we initiated a restructuring plan to focus on consolidating our global operations
by designing new processes and implementing new systems (“Cost Optimization”). As of December 31,
2022, we formally communicated and terminated employment of approximately 200 employees as part of
this process. We expect no further restructuring expense related to this initiative.
During the first quarter of 2021, we initiated a global restructuring plan to focus on cost discipline by
reviewing headcounts, facilities and contractor agreements. We transformed our business as we exited the
COVID-19 crisis by controlling fixed costs and matching variable costs to demand (“T21”). We expect no
further restructuring expense related to this initiative.
During first quarter 2020, we initiated a global restructuring plan to reduce operating costs, such as
headcount and facilities, due to declining reservations and revenue resulting from the COVID-19 outbreak
(“2020 Optimization”). We expect no further restructuring expense related to this initiative.
During third quarter 2019, we initiated a restructuring plan to exit our operations in Brazil by closing rental
facilities, disposing of assets and terminating personnel (“Brazil”). This initiative is complete.
During first quarter 2019, we initiated a restructuring plan to drive global efficiency by improving processes
and consolidating functions, and to create new objectives and strategies for our truck rental operations in
the U.S. by reducing headcount, large vehicles and rental locations (“T19”). This initiative is complete.
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The following tables summarize the change to our restructuring-related liabilities and identifies the amounts
recorded within our reporting segments for restructuring charges and corresponding payments and
utilizations:
Personnel Facility
Related Related Other (a) Total
Balance at January 1, 2020 $ 3 $ 1 $ 2 $ 6
Restructuring expense:
2020 Optimization 73 3 3 79
Brazil 1 1 (2) —
T19 — — 14 14
Restructuring payment/utilization:
2020 Optimization (68) (2) (1) (71)
Brazil — (1) 2 1
T19 (5) — (15) (20)
Balance as of December 31, 2020 $ 4 $ 2 $ 3 $ 9
Restructuring expense:
T21 26 4 2 32
T19 — — (2) (2)
Restructuring payment/utilization:
T21 (17) (4) (4) (25)
2020 Optimization (5) — — (5)
T19 (1) — 2 1
Balance as of December 31, 2021 $ 7 $ 2 $ 1 $ 10
Restructuring expense:
Cost Optimization 9 — — 9
T21 3 — — 3
Brazil — — 1 1
Restructuring payment/utilization:
Cost Optimization (6) — (1) (7)
T21 (8) (1) — (9)
2020 Optimization (1) — — (1)
Brazil — — (1) (1)
T19 — (1) — (1)
Balance as of December 31, 2022 $ 4 $ — $ — $ 4
__________
(a)
Includes expenses primarily related to the disposition of vehicles.
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Americas International Total
Balance at January 1, 2020 $ 2 $ 4 $ 6
Restructuring expense:
2020 Optimization 31 48 79
T19 14 — 14
Restructuring payment/utilization:
2020 Optimization (29) (42) (71)
Brazil 1 — 1
T19 (16) (4) (20)
Balance as of December 31, 2020 3 6 9
Restructuring expense:
T21 5 27 32
T19 (2) — (2)
Restructuring payment/utilization:
T21 (4) (21) (25)
2020 Optimization (2) (3) (5)
T19 2 (1) 1
Balance as of December 31, 2021 2 8 10
Restructuring expense:
Cost Optimization 2 7 9
T21 1 2 3
Brazil 1 — 1
Restructuring payment/utilization:
Cost Optimization (2) (5) (7)
T21 (2) (7) (9)
2020 Optimization — (1) (1)
Brazil (1) — (1)
T19 — (1) (1)
Balance as of December 31, 2022 $ 1 $ 3 $ 4
Other Related Charges
Limited Voluntary Opportunity Plans (“LVOP”)
During the second quarter of 2021, our operations in our International segment offered a voluntary
termination program to certain employees in field operations and general and administrative functions for a
limited time. These employees, if qualified, elected resignation from employment in return for enhanced
severance benefits to be settled in cash. During the year ended December 31, 2021, we recorded other
related charges of approximately $17 million in connection with the LVOP. As of December 31, 2021,
approximately 130 employees elected to participate in the plan and the participants have been terminated.
During 2020, we offered a voluntary termination program to certain employees in field operations, shared
services, and general and administrative functions for a limited time. These employees, if qualified, elected
resignation from employment in return for enhanced severance benefits to be settled in cash. During the
year ended December 31, 2020, we recorded other related charges of approximately $18 million in
connection with the LVOP.
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Officer Separation Costs
In April 2022, we announced the departure of Veresh Sita as Executive Vice President and Chief Digital and
Innovation Officer effective May 13, 2022. In connection with Mr. Sita’s separation, we recorded other
related charges of approximately $1 million, inclusive of accelerated stock-based compensation expense,
for the year ended December 31, 2022.
In August 2020, we announced the resignation of John F. North, III as our Chief Financial Officer. Following
his post-resignation transition to an advisory position, Mr. North continued to serve as a consultant through
January 1, 2021. In connection with Mr. North’s departure, we recorded other related charges of
approximately $5 million, inclusive of accelerated stock-based compensation expense for the year ended
December 31, 2020.
In March 2020, we announced the departure of Michael K. Tucker as Executive Vice President, General
Counsel effective March 27, 2020. In connection with Mr. Tucker’s separation, we recorded other related
charges of approximately $2 million for the year ended December 31, 2020.
6. Acquisitions
2021
During 2021, we completed the acquisitions of various licensees in Europe and North America, for
approximately $23 million, plus $22 million for acquired fleet. These investments were in-line with our
strategy to re-acquire licensees when advantageous to expand our footprint of Company-operated
locations. The acquired fleet was financed under our existing financing arrangements. In connection with
these acquisitions, approximately $28 million was recorded to other intangibles related to franchise
agreements. The license agreements are being amortized over a weighted average useful life of
approximately one year. Differences between the preliminary allocation of purchase price and the final
allocation were not material.
2020
During 2020, we completed the acquisitions of various licensees in North America and Europe, for
approximately $28 million, plus $22 million for acquired fleet. These investments were in-line with our
strategy to re-acquire licensees when advantageous to expand our footprint of Company-operated
locations. The acquired fleet was financed under our existing arrangements. In connection with these
acquisitions, approximately $28 million was recorded in other intangibles related to license agreements. The
license agreements are being amortized over a weighted average useful life of approximately two years.
Differences between the preliminary allocation of purchase price and the final allocation were not material
for Avis and Budget Licensees.
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7. Intangible Assets
Intangible assets consisted of:
As of December 31, 2022 As of December 31, 2021
Gross Net Gross Net
Carrying Accumulated Carrying Carrying Accumulated Carrying
Amount Amortization Amount Amount Amortization Amount
Amortized Intangible Assets
License agreements (a) $ 290 $ 217 $ 73 $ 298 $ 193 $ 105
Customer relationships (b) 247 207 40 257 204 53
(c)
Other 48 39 9 51 36 15
$ 585 $ 463 $ 122 $ 606 $ 433 $ 173
Unamortized Intangible Assets
Goodwill $ 1,070 $ 1,108
Trademarks $ 544 $ 551
_________
(a)
Primarily amortized over a period ranging from 0 to 40 years with a weighted average life of 16 years.
(b)
Primarily amortized over a period ranging from 3 to 20 years with a weighted average life of 12 years.
(c)
Primarily amortized over a period ranging from 2 to 10 years with a weighted average life of 9 years.
Amortization expense relating to all intangible assets was as follows:
Year Ended December 31,
2022 2021 2020
License agreements $ 29 $ 47 $ 37
Customer relationships 10 14 23
Other 5 6 5
Total $ 44 $ 67 $ 65
Based on our amortizable intangible assets at December 31, 2022, we expect related amortization expense
of approximately $27 million for 2023, $22 million for 2024, $16 million for 2025, $15 million for 2026 and
$12 million for 2027 excluding effects of currency exchange rates.
The carrying amounts of goodwill and related changes are as follows:
Total
Americas International Company
Goodwill as of January 1, 2021 $ 2,140 $ 1,115 $ 3,255
Accumulated impairment losses as of January 1, 2021 (1,587) (531) (2,118)
Goodwill as of January 1, 2021 553 584 1,137
Currency translation adjustments and other — (29) (29)
Goodwill as of December 31, 2021 553 555 1,108
Currency translation adjustments and other (3) (35) (38)
Goodwill as of December 31, 2022 $ 550 $ 520 $ 1,070
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8. Vehicle Rental Activities
The components of vehicles, net within assets under vehicle programs are as follows:
As of December 31,
2022 2021
Rental vehicles $ 17,819 $ 14,612
Less: Accumulated depreciation (2,211) (1,911)
15,608 12,701
Vehicles held for sale 317 165
Vehicles, net investment in lease(a) 36 —
Vehicles, net $ 15,961 $ 12,866
_______
(a)
See Note 17 – Related Party Transactions
The components of vehicle depreciation and lease charges, net are summarized below:
Year Ended December 31,
2022 2021 2020
Depreciation expense $ 1,709 $ 1,402 $ 1,330
Lease charges 138 156 195
(Gain) loss on sale of vehicles, net (1,019) (361) (157)
Vehicle depreciation and lease charges, net $ 828 $ 1,197 $ 1,368
At December 31, 2022, 2021 and 2020, we had payables related to vehicle purchases included in liabilities
under vehicle programs - other of $265 million, $142 million and $232 million, respectively, and receivables
related to vehicle sales included in assets under vehicle programs - receivables from vehicle manufacturers
and other of $212 million, $134 million and $162 million, respectively.
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9. Income Taxes
The provision for (benefit from) income taxes consists of the following:
Year Ended December 31,
2022 2021 2020
Current
Federal $ — $ — $ (5)
State 137 35 21
Foreign 61 12 29
Current income tax provision 198 47 45
Deferred
Federal 622 309 (104)
State (22) 78 (90)
Foreign 82 (9) (123)
Deferred income tax provision (benefit) 682 378 (317)
Provision for (benefit from) income taxes $ 880 $ 425 $ (272)
Income (loss) before income taxes is comprised of the following:
Year Ended December 31,
2022 2021 2020
United States $ 3,114 $ 1,529 $ (590)
Foreign 522 179 (366)
Income (loss) before income taxes $ 3,636 $ 1,708 $ (956)
Deferred income tax assets, net is comprised of the following:
As of December 31,
2022 2021
Deferred income tax assets:
Net tax loss carryforwards $ 1,109 $ 1,480
Long-term operating lease liabilities 666 625
Accrued liabilities and deferred revenue 231 272
Tax credits 38 11
Depreciation and amortization 25 19
Provision for doubtful accounts 19 18
Other 167 100
Valuation allowance (a) (101) (167)
Deferred income tax assets 2,154 2,358
Deferred income tax liabilities:
Operating lease right-of-use assets 657 614
Depreciation and amortization 90 102
Prepaid expenses 24 23
Other 4 4
Deferred income tax liabilities 775 743
Deferred income tax assets, net $ 1,379 $ 1,615
__________
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(a)
The valuation allowance of $101 million at December 31, 2022 relates to tax loss carryforwards and certain deferred tax assets of
$97 million and $4 million, respectively. The valuation allowance of $167 million at December 31, 2021 relates to tax loss
carryforwards and certain deferred tax assets of $163 million and $4 million, respectively. The valuation allowances will be
reduced when and if we determine it is more likely than not that the related deferred income tax assets will be realized. The
decrease in valuation allowance as compared to the year ended December 31, 2021 is primarily related to a release of valuation
allowance for certain state net operating losses.
Deferred income tax assets and liabilities related to vehicle programs are comprised of the following:
As of December 31,
2022 2021
Deferred income tax assets:
Depreciation and amortization $ 63 $ 80
Other 22 19
Deferred income tax assets 85 99
Deferred income tax liabilities:
Depreciation and amortization 2,815 2,321
Other 24 20
Deferred income tax liabilities 2,839 2,341
Deferred income tax liabilities under vehicle programs, net $ 2,754 $ 2,242
At December 31, 2022, we had U.S. federal net operating loss carryforwards of approximately $3.6 billion.
The majority of the net operating loss carryforwards have an indefinite utilization period pursuant to the Tax
Act and a significant remaining portion expires by 2031. Such net operating loss carryforwards are primarily
related to accelerated depreciation of our U.S. vehicles. Currently, we do not record valuation allowances on
the majority of our U.S. federal tax loss carryforwards as there are adequate deferred tax liabilities that
could be realized within the carryforward period. At December 31, 2022, we had foreign net operating loss
carryforwards of approximately $1.1 billion, the majority of which has an indefinite utilization period.
At December 31, 2022, we had undistributed earnings of certain foreign subsidiaries of approximately $1.2
billion that we have indefinitely reinvested, and on which we have not recognized deferred taxes. Estimating
the amount of potential tax is not practicable because of the complexity and variety of assumptions
necessary to compute the tax.
The reconciliation between the U.S. federal income tax statutory rate and our effective income tax rate is as
follows:
Year Ended December 31,
2022 2021 2020
U.S. federal statutory rate 21.0 % 21.0 % 21.0 %
Adjustments to reconcile to the effective rate:
State and local income taxes, net of federal tax benefits 3.9 5.5 4.8
Changes in valuation allowances (1.3) (0.6) —
Taxes on foreign operations at rates different than U.S.
federal statutory rates 1.2 (2.0) 3.1
Stock-based compensation (0.5) (0.3) (0.1)
Other non-deductible (non-taxable) items 0.4 0.6 (0.4)
Other (0.5) 0.7 —
24.2 % 24.9 % 28.4 %
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The following is a tabular reconciliation of the gross amount of unrecognized tax benefits for the year:
2022 2021 2020
Balance, January 1 $ 58 $ 57 $ 54
Additions for tax positions related to current year 4 4 4
Additions for tax positions for prior years 3 3 —
Reductions for tax positions for prior years (5) (3) (1)
Settlements (5) — (3)
Foreign currency translation (2) (3) 3
Balance, December 31 $ 53 $ 58 $ 57
We do not anticipate that total unrecognized tax benefits will change significantly in 2023.
We are subject to taxation in the United States and various foreign jurisdictions. As of December 31, 2022,
the 2007 through 2021 tax years generally remain subject to examination by the federal tax authorities. The
2012 through 2021 tax years generally remain subject to examination by various state tax authorities. In
significant foreign jurisdictions, the 2012 through 2021 tax years generally remain subject to examination by
their respective tax authorities.
Substantially all of the gross amount of the unrecognized tax benefits at December 31, 2022, 2021 and
2020, if recognized, would affect our provision for (benefit from) income taxes. As of December 31, 2022,
our unrecognized tax benefits were offset by tax loss carryforwards and other deferred tax assets in the
amount of $24 million.
The following table presents unrecognized tax benefits:
As of December 31,
2022 2021
Unrecognized tax benefit in non-current income taxes payable (a) $ 33 $ 30
Accrued interest payable on potential tax liabilities (b) 31 29
__________
(a)
Pursuant to the agreements governing the disposition of certain subsidiaries in 2006, we are entitled to indemnification for certain
predisposition tax contingencies. As of December 31, 2022 and 2021, $13 million, in each period, of unrecognized tax benefits are
related to tax contingencies for which we believe we are entitled to indemnification.
(b)
We recognize potential interest related to unrecognized tax benefits within interest expense related to corporate debt, net on the
accompanying Consolidated Statements of Operations. Penalties incurred during the years ended December 31, 2022, 2021 and
2020, were not significant and were recognized as a component of the provision for (benefit from) income taxes.
10. Other Current Assets
Other current assets consisted of:
As of December 31,
2022 2021
Prepaid expenses $ 252 $ 205
Sales and use taxes 142 238
Other 112 95
Other current assets $ 506 $ 538
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11. Property and Equipment, net
Property and equipment, net consisted of:
As of December 31,
2022 2021
Land $ 59 $ 50
Buildings and leasehold improvements 507 525
Capitalized software 906 932
Furniture, fixtures and equipment 382 426
Projects in process 89 84
Buses and support vehicles 90 80
2,033 2,097
Less: Accumulated depreciation and amortization (1,439) (1,560)
Property and equipment, net $ 594 $ 537
Depreciation and amortization expense relating to property and equipment during 2022, 2021 and 2020 was
$181 million, $205 million and $218 million, respectively (including $115 million, $105 million and $113
million, respectively, of amortization expense relating to capitalized software). At December 31, 2022, we
had payables related to property and equipment included in accounts payable and other current liabilities
and in other non-current liabilities of $19 million and $1 million, respectively. At December 31, 2021, we had
payables related to property and equipment included in accounts payable and other current liabilities and in
other non-current liabilities of $20 million and $2 million, respectively.
12. Accounts Payable and Other Current Liabilities
Accounts payable and other current liabilities consisted of:
As of December 31,
2022 2021
Short-term operating lease liabilities $ 555 $ 496
Accounts payable 466 407
Accrued advertising and marketing 268 218
Accrued sales and use taxes 246 313
Accrued payroll and related 205 193
Deferred lease revenues – current 188 185
Public liability and property damage insurance liabilities – current 174 159
Other 445 418
Accounts payable and other current liabilities $ 2,547 $ 2,389
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13. Long-term Corporate Debt and Borrowing Arrangements
Long-term debt and other borrowing arrangements consisted of:
As of December 31,
Maturity
Date 2022 2021
4.125% euro-denominated Senior Notes November 2024 $ 321 $ 341
4.500% euro-denominated Senior Notes May 2025 268 284
4.750% euro-denominated Senior Notes January 2026 375 398
5.750% Senior Notes July 2027 732 728
4.750% Senior Notes April 2028 500 500
5.375% Senior Notes March 2029 600 600
Floating Rate Term Loan (a) August 2027 1,176 1,187
Floating Rate Term Loan (a) March 2029 725 —
Other (b) 18 19
Deferred financing fees (44) (48)
Total 4,671 4,009
Less: Short-term debt and current portion of long-term debt 27 19
Long-term debt $ 4,644 $ 3,990
_________
(a)
The floating rate term loan is part of our senior revolving credit facility, which is secured by pledges of capital stock of certain our
subsidiaries, and liens on substantially all of our intellectual property and certain other real and personal property.
(b)
Primarily includes finance leases which are secured by liens on the related assets.
Term Loan
Floating Rate Term Loan due 2029. In March 2022, we entered into a $750 million Floating Rate Term Loan
due March 2029, at a price of 97% of the aggregate principal amount, with interest paid monthly. The Term
Loan bears interest at one-month Secured Overnight Financing Rate (“SOFR”) plus 350 basis points for an
aggregate rate of 7.92%.
Floating Rate Term Loan due 2027. In February 2020, we amended our Floating Rate Term Loan and
extended its maturity term to 2027. We increased the outstanding borrowing principal amount of the
Floating Rate Term Loan to $1.2 billion and on April 1, 2020 used the additional loan amount to redeem
$100 million of our outstanding 5.500% Senior Notes due 2023. As of December 31, 2022, the loan bears
interest at one-month LIBOR plus 1.75%, for an aggregate rate of 6.14%; however, we entered into an
interest rate swap to hedge $700 million of our interest rate exposure related to the floating rate term loan at
an aggregate rate of 4.75%.
Senior Notes
4.125% euro-denominated Senior Notes due 2024. In September 2016, we issued €300 million of 4.125%
euro-denominated Senior Notes due 2024 at par, with interest payable semi-annually. We have the right to
redeem these notes in whole or in part at any time on or after November 15, 2019 at specified redemption
prices plus accrued interest. In October 2016, we used the net proceeds from the offering primarily to
redeem €275 million of our outstanding 6.000% euro-denominated Senior Notes due 2021.
4.500% euro-denominated Senior Notes due 2025. In March 2017, we issued €250 million of 4.500% euro-
denominated Senior Notes due 2025, at par, with interest payable semi-annually. We have the right to
redeem these notes in whole or in part on or after May 15, 2020 at specified redemption prices plus accrued
interest. In April 2017, we used the net proceeds from the offering to redeem our outstanding €175 million
principal amount of 6.000% euro-denominated Senior Notes due 2021 for €180 million plus accrued
interest. In June 2017, we used the remaining proceeds to redeem a portion of our Floating Rate Senior
Notes due 2017.
4.750% euro-denominated Senior Notes due 2026. In October 2018, we issued €350 million of 4.750%
euro-denominated Senior Notes due 2026, at par, with interest payable semi-annually. We have the right to
redeem these notes in whole or in part on or after September 30, 2021 at specified redemption prices plus
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accrued interest. In October 2018, we used the net proceeds from the offering to redeem our 5.125% Senior
Notes due June 2022 for $410 million plus accrued interest.
5.750% Senior Notes due 2027. In July 2019, we issued $400 million of 5.750% Senior Notes due July
2027, at par, with interest payable semi-annually. We used the net proceeds from the offering to redeem
$400 million principal amount of our 5.500% Senior Notes due April 2023. In August 2020, we issued
$350 million of additional 5.750% Senior Notes due July 2027, at 92% of face value, under the indenture
governing our existing 5.750% Senior Notes. We used the proceeds from this offering to redeem the
outstanding $100 million in aggregate principal amount of our 5.500% Senior Notes due 2023, with the
remainder being used for general corporate purposes.
4.750% Senior Notes due 2028. In March 2021, we issued $500 million of 4.750% Senior Notes due April
2028, at par, with interest paid semiannually. We have the right to redeem these notes in whole or in part at
any time on or after April 1, 2024 at specified redemption prices plus accrued interest. Net proceeds,
together with cash on hand, were used to redeem all of the outstanding 6.375% Senior Notes due 2024 for
$356 million plus accrued interest and a portion of our outstanding 5.250% Senior Notes due 2025 for
$142 million plus accrued interest.
5.375% Senior Notes due 2029. In March 2021, we issued $600 million of 5.375% Senior Notes due March
2029, at par, with interest paid semiannually. We have the right to redeem these notes in whole or in part at
any time on or after March 1, 2024 at specified redemption prices plus accrued interest. Net proceeds,
together with cash on hand, were used to redeem all of the outstanding 10.500% Senior Secured Notes due
2025 for $599 million plus accrued interest.
In connection with the debt amendments and repayments for the years ended December 31, 2021 and
2020, we recorded $136 million and $9 million in early extinguishment of debt costs, respectively.
The 5.750% Senior Notes, the 4.750% Senior Notes and the 5.375% Senior Notes are senior unsecured
obligations of our Avis Budget Car Rental, LLC (“ABCR”) subsidiary, are guaranteed by us and certain of
our domestic subsidiaries and rank equally in right of payment with all of our existing and future senior
unsecured indebtedness.
The 4.125% euro-denominated Senior Notes, 4.500% euro-denominated Senior Notes and 4.750% euro-
denominated Senior Notes are unsecured obligations of our Avis Budget Finance plc subsidiary, are
guaranteed on a senior basis by us and certain of our domestic subsidiaries and rank equally with all of our
existing senior unsecured debt.
Debt Maturities
The following table provides contractual maturities of our corporate debt at December 31, 2022:
Year Amount
2023 $ 27
2024 346
2025 291
2026 396
2027 1,867
Thereafter 1,788
$ 4,715
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Committed Credit Facilities And Available Funding Arrangements
At December 31, 2022, the committed corporate credit facilities available to us and/or our subsidiaries were
as follows:
Total Outstanding Letters of Available
Capacity Borrowings Credit Issued Capacity
Senior revolving credit facility maturing 2026 (a) $ 2,000 $ — $ 966 $ 1,034
__________
(a)
The senior revolving credit facility bears interest at one-month LIBOR plus 175 basis points and is part of our senior credit
facilities, which include the floating rate term loan and the senior revolving credit facility, and which are secured by pledges of
capital stock of certain of our subsidiaries, and liens on substantially all of our intellectual property and certain other real and
personal property.
Debt Covenants
The agreements governing our indebtedness contain restrictive covenants, including restrictions on
dividends paid to us by certain of our subsidiaries, the incurrence of additional indebtedness and/or liens by
us and certain of our subsidiaries, acquisitions, mergers, liquidations, and sale and leaseback transactions.
Our senior credit facility also contains a maximum leverage ratio requirement. As of December 31, 2022, we
were in compliance with the financial covenants governing our indebtedness.
14. Debt Under Vehicle Programs and Borrowing Arrangements
Debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding (AESOP)
LLC (“Avis Budget Rental Car Funding”), consisted of:
As of December 31,
2022 2021
Americas – Debt due to Avis Budget Rental Car Funding (a) $ 11,322 $ 8,889
Americas – Debt borrowings 598 612
International – Debt borrowings 1,700 1,757
International – Finance leases 176 177
Other 65 3
Deferred financing fees (b) (52) (48)
Total $ 13,809 $ 11,390
__________
(a)
Increase reflects additional borrowings principally to fund increases in our rental fleet.
(b)
Deferred financing fees related to Debt due to Avis Budget Rental Car Funding as of December 31, 2022 and 2021 were
$47 million and $41 million, respectively.
Americas
Debt due to Avis Budget Rental Car Funding. Avis Budget Rental Car Funding, an unconsolidated
bankruptcy remote qualifying special purpose limited liability company, issues privately placed notes to
investors as well as to banks and bank-sponsored conduit entities. Avis Budget Rental Car Funding uses
the proceeds from its note issuances to make loans to our wholly-owned subsidiary, AESOP Leasing LP
(“AESOP Leasing”), on a continuing basis. AESOP Leasing is required to use the proceeds of such loans to
acquire or finance the acquisition of vehicles used in our rental car operations. By issuing debt through the
Avis Budget Rental Car Funding program, we pay a lower rate of interest than if we had issued debt directly
to third parties. Avis Budget Rental Car Funding is not consolidated, as we are not the “primary beneficiary”
of Avis Budget Rental Car Funding. We determined that we are not the primary beneficiary because we do
not have the obligation to absorb the potential losses or receive the benefits of Avis Budget Rental Car
Funding’s activities since our only significant source of variability in the earnings, losses or cash flows of
Avis Budget Rental Car Funding is exposure to our own creditworthiness, due to our loan from Avis Budget
Rental Car Funding. Because Avis Budget Rental Car Funding is not consolidated, AESOP Leasing’s loan
obligations to Avis Budget Rental Car Funding are reflected as related party debt on our Consolidated
Balance Sheets. We also have an asset within Assets under vehicle programs on our Consolidated Balance
Sheets which represents securities issued to us by Avis Budget Rental Car Funding. AESOP Leasing is
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consolidated, as we are the “primary beneficiary” of AESOP Leasing; as a result, the vehicles purchased by
AESOP Leasing remain on our Consolidated Balance Sheets. We determined we are the primary
beneficiary of AESOP Leasing, as we have the ability to direct its activities, an obligation to absorb a
majority of its expected losses and the right to receive the benefits of AESOP Leasing’s activities. AESOP
Leasing’s vehicles and related assets, which as of December 31, 2022, approximate $13.2 billion and some
of which are subject to manufacturer repurchase and guaranteed depreciation agreements, collateralize the
debt issued by Avis Budget Rental Car Funding. The assets and liabilities of AESOP Leasing are presented
on our Consolidated Balance Sheets within Assets under vehicle programs and Liabilities under vehicle
programs, respectively. The assets of AESOP Leasing, included within assets under vehicle programs
(excluding the investment in Avis Budget Rental Car Funding (AESOP) LLC—related party) are restricted.
Such assets may be used only to repay the respective AESOP Leasing liabilities, included within Liabilities
under vehicle programs, and to purchase new vehicles, although if certain collateral coverage requirements
are met, AESOP Leasing may pay dividends from excess cash. The creditors of AESOP Leasing and Avis
Budget Rental Car Funding have no recourse to our general credit. We periodically provide Avis Budget
Rental Car Funding with non-contractually required support, in the form of equity and loans, to serve as
additional collateral for the debt issued by Avis Budget Rental Car Funding.
The business activities of Avis Budget Rental Car Funding are limited primarily to issuing indebtedness and
using the proceeds thereof to make loans to AESOP Leasing for the purpose of acquiring or financing the
acquisition of vehicles to be leased to our rental car subsidiaries and pledging its assets to secure the
indebtedness. Because Avis Budget Rental Car Funding is not consolidated by us, its results of operations
and cash flows are not reflected within our financial statements.
In May 2021, AESOP issued $800 million of asset-backed notes with an expected final payment date of
August 2026. In June 2021, AESOP issued $96 million, $105 million and $103 million of asset-backed notes
with expected final payment dates of March 2024, September 2024 and August 2025, respectively. In
November 2021, AESOP issued $650 million of asset-backed notes with an expected final payment date of
February 2027. In April 2022, AESOP issued $660 million of asset-backed notes to investors with an
expected final payment date of August 2027. In May 2022, AESOP issued $87 million, $68 million and
$55 million of asset-backed notes with expected final payment dates of March 2025, March 2023 and
September 2023, respectively. In June 2022, AESOP entered into $800 million of variable funding asset-
backed notes to investors with a final payment date of September 2022. In July 2022, AESOP issued
$389 million and $374 million of asset-backed notes to investors with expected final payment dates of
February 2026 and February 2028, respectively. Following this issuance, amounts available under our
$800 million variable funding asset-backed notes supplement entered into during June 2022 were reduced
to zero. In November 2022, AESOP issued $500 million of asset-backed notes to investors with an
expected final payment date of April 2026. We used the proceeds from these borrowings to fund the
repayment of maturing vehicle-backed debt and the acquisition of rental cars in the United States.
Borrowings under the Avis Budget Rental Car Funding program primarily represent fixed rate notes and had
a weighted average interest rate of 4.07% and 2.66% as of December 31, 2022 and 2021 respectively.
Debt borrowings. We finance the acquisition of vehicles used in our Canadian rental operations through a
consolidated, bankruptcy remote special-purpose entity, which issues privately placed notes to investors
and bank-sponsored conduits. We finance the acquisition of fleet for our truck rental operations in the
United States through a combination of debt facilities and leases. These debt borrowings represent a mix of
fixed and floating rate debt and had a weighted average interest rate of 4.26% and 2.64% as of
December 31, 2022 and 2021 respectively.
International
Debt borrowings. In EMEA we operate a €1.7 billion European rental fleet securitization program, with
maturity in 2024, which is used to finance fleet purchases for certain of our European operations. The
International borrowings primarily represent floating rate notes and had a weighted average interest rate of
3.92% and 1.66% as of December 31, 2022 and 2021, respectively.
Finance leases. We obtain a portion of our International vehicles under finance lease arrangements. For the
years ended December 31, 2022 and 2021, the weighted average interest rate on these borrowings was
1.82% and 1.25% respectively. All finance leases are on a fixed repayment basis and interest rates are fixed
at the contract date.
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Debt Maturities
The following table provides the contractual maturities of our debt under vehicle programs, including related
party debt due to Avis Budget Rental Car Funding, at December 31, 2022:
Debt under
Vehicle
Programs (a)
2023 (b) $ 2,235
2024 (c) 5,485
2025 2,351
2026 2,124
2027 1,238
Thereafter 428
$ 13,861
__________
(a)
Vehicle-backed debt primarily represents asset-backed securities.
(b)
Includes $0.4 billion of bank and bank-sponsored facilities.
(c)
Includes $2.4 billion of bank and bank-sponsored facilities.
Committed Credit Facilities And Available Funding Arrangements
The following table presents available funding under our debt arrangements related to our vehicle
programs, including related party debt due to Avis Budget Rental Car Funding, at December 31, 2022:
Total Outstanding Available
Capacity (a) Borrowings (b) Capacity
Americas – Debt due to Avis Budget Rental Car Funding $ 11,921 $ 11,322 $ 599
Americas – Debt borrowings 970 598 372
International – Debt borrowings 2,628 1,700 928
International – Finance leases 208 176 32
Other 65 65 —
Total $ 15,792 $ 13,861 $ 1,931
__________
(a)
Capacity is subject to maintaining sufficient assets to collateralize debt.
(b)
The outstanding debt is collateralized by vehicles and related assets of $13.0 billion for Americas - Debt due to Avis Budget
Rental Car Funding; $1.0 billion for Americas - Debt borrowings; $2.6 billion for International - Debt borrowings; and $0.2 billion for
International - Finance leases.
Debt Covenants
The agreements under our vehicle-backed funding programs contain restrictive covenants, including
restrictions on dividends paid to us by certain of our subsidiaries and restrictions on indebtedness, mergers,
liens, liquidations and sale and leaseback transactions, and in some cases also require compliance with
certain financial requirements. As of December 31, 2022, we are not aware of any instances of non-
compliance with any of the financial or restrictive covenants contained in the debt agreements under our
vehicle-backed funding programs.
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15. Commitments and Contingencies
Contingencies
In 2006, we completed the spin-offs of our Realogy (formally Realogy, now Anywhere Real Estate Inc.) and
Wyndham subsidiaries. We do not believe that the impact of any resolution of pre-existing contingent
liabilities in connection with the spin-offs should result in a material liability to us in relation to our
consolidated financial position or liquidity, as Realogy and Wyndham each have agreed to assume
responsibility for these liabilities. We are also named in litigation that is primarily related to the businesses of
our former subsidiaries, including Realogy and Wyndham. We are entitled to indemnification from such
entities for any liability resulting from such litigation.
In November 2011, Jose Mendez v. Avis Budget Group Inc., et al. was filed in U.S. District Court for the
District of New Jersey. The plaintiff seeks to represent a purported nationwide class and two sub-classes of
certain renters of vehicles from our Avis and Budget subsidiaries from April 2007 through December 2015.
The plaintiff seeks damages in connection with claims relating to our electronic toll service, including that
administrative fees and toll charges were not properly disclosed to customers and/or were excessive.
Plaintiff’s motion for class certification was approved by the Court in November 2017. The parties have
entered into a settlement agreement and the Court has entered an order preliminarily approving the
settlement. We have been named as a defendant in other purported consumer class action law suits,
including a class action filed against us in Florida seeking damages in connection with a breach of contract
claim and two purported class action suits filed against us in New Jersey, one related to fines and fees
charged to car renters by us for violations incurred during the course of their rental and another related to
ancillary charges at our Payless subsidiary. In the Florida lawsuit, the Court has entered an order
preliminarily approving a proposed settlement.
We are currently involved, and in the future may be involved, in claims and/or legal proceedings, including
class actions, and governmental inquiries that are incidental to our vehicle rental and car sharing
operations, including, among others, contract and licensee disputes, competition matters, employment and
wage-and-hour claims, insurance and liability claims, intellectual property claims, business practice disputes
and other regulatory, environmental, commercial and tax matters. Litigation is inherently unpredictable and,
although we believe that our accruals are adequate and/or that we have valid defenses in these matters,
unfavorable resolutions could occur. We estimate that the potential exposure resulting from adverse
outcomes of current legal proceedings in which it is reasonably possible that a loss may be incurred could,
in the aggregate, be up to approximately $40 million in excess of amounts accrued as of December 31,
2022. We do not believe that the impact should result in a material liability to us in relation to our
consolidated financial condition or results of operations.
Commitments to Purchase Vehicles
We maintain agreements with vehicle manufacturers under which we have agreed to purchase
approximately $6.7 billion of vehicles from manufacturers over the next 12 months, a $0.8 billion increase
compared to December 31, 2021, financed primarily through the issuance of vehicle-backed debt and cash
received upon the disposition of vehicles. Certain of these commitments are subject to the vehicle
manufacturers satisfying their obligations under their respective repurchase and guaranteed depreciation
agreements.
Other Purchase Commitments
In the normal course of business, we make various commitments to purchase other goods or services from
specific suppliers, including those related to marketing, advertising, computer services and capital
expenditures. As of December 31, 2022, we had approximately $102 million of purchase obligations, which
extend through 2027.
Concentrations
Concentrations of credit risk at December 31, 2022, include (i) risks related to our repurchase and
guaranteed depreciation agreements with domestic and foreign car manufacturers and primarily with
respect to receivables for program cars that have been disposed, but for which we have not yet received
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payment from the manufacturers and (ii) risks related to Realogy and Wyndham, including receivables of
$27 million and $16 million, respectively, related to certain contingent, income tax and other corporate
liabilities assumed by Realogy and Wyndham in connection with their disposition.
Asset Retirement Obligations
We maintain a liability for asset retirement obligations. An asset retirement obligation is a legal obligation to
perform certain activities in connection with the retirement, disposal or abandonment of assets. Our asset
retirement obligations, which are measured at discounted fair values, are primarily related to the removal of
underground gasoline storage tanks at our rental facilities. The liability accrued for asset retirement
obligations was $26 million and $28 million at December 31, 2022 and 2021, respectively.
Standard Guarantees/Indemnifications
In the ordinary course of business, we enter into numerous agreements that contain standard guarantees
and indemnities whereby we agree to indemnify another party, among other things, for performance under
contracts and any breaches of representations and warranties thereunder. In addition, many of these
parties are also indemnified against any third-party claim resulting from the transaction that is contemplated
in the underlying agreement. Such guarantees or indemnifications are granted under various agreements,
including those governing (i) purchases, sales or outsourcing of assets, businesses or activities, (ii) leases
of real estate, (iii) licensing of trademarks, (iv) access to credit facilities and use of derivatives and
(v) issuances of debt or equity securities. The guarantees or indemnifications issued are for the benefit of
the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts,
(iii) licensees under licensing agreements, (iv) financial institutions in credit facility arrangements and
derivative contracts and (v) underwriters and placement agents in debt or equity security issuances. While
some of these guarantees extend only for the duration of the underlying agreement, many may survive the
expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of
limitations). There are no specific limitations on the maximum potential amount of future payments that we
could be required to make under these guarantees, nor are we able to develop an estimate of the maximum
potential amount of future payments to be made under these guarantees as the triggering events are not
subject to predictability. With respect to certain of the aforementioned guarantees, such as indemnifications
provided to landlords against third-party claims for the use of real estate property leased by us, we
maintains insurance coverage that mitigates our potential exposure.
16. Stockholders' Equity
Cash Dividend Payments
During 2022, 2021 and 2020, we did not declare or pay any cash dividends. Our ability to pay dividends to
holders of our common stock is limited by our senior credit facility, the indentures governing our senior
notes and our vehicle financing programs.
Share Repurchases
As of December 31, 2022, our Board of Directors authorized the repurchase of up to approximately $7.1
billion of our common stock under a plan originally approved in 2013 and subsequently expanded. During
2022, 2021 and 2020, we repurchased approximately 36 million shares of common stock at a cost of
approximately $4.8 billion under the program. As of December 31, 2022, approximately $691 million of
authorization remained available to repurchase common stock under this plan.
Share Issuances
On February 10, 2020, we announced we had appointed a new Chairman of the Board of Directors and in
connection with this appointment, the new Chairman purchased an aggregate $15 million of unregistered
shares of our common stock at a price per share equal to the closing price of our common stock on
February 7, 2020. We issued the common stock from treasury shares.
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Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss) are as follows:
Net Unrealized Accumulated
Currency Gains (Losses) on Minimum Pension Other
Translation Cash Flow Liability Comprehensive
Adjustments (a) Hedges (b) Adjustment (c) Income (Loss)
Balance, January 1, 2020 $ 9 $ (20) $ (146) $ (157)
Other comprehensive income (loss) before reclassifications 33 (39) (36) (42)
Amounts reclassified from accumulated other
comprehensive income (loss) (2) 8 6 12
Net current-period other comprehensive income (loss) 31 (31) (30) (30)
Balance, December 31, 2020 40 (51) (176) (187)
Other comprehensive income (loss) before reclassifications (35) 18 39 22
Amounts reclassified from accumulated other
comprehensive income (loss) 11 14 7 32
Net current-period other comprehensive income (loss) (24) 32 46 54
Balance, December 31, 2021 16 (19) (130) (133)
Other comprehensive income (loss) before reclassifications (46) 57 11 22
Amounts reclassified from accumulated other
comprehensive income (loss) — 7 3 10
Net current-period other comprehensive income (loss) (46) 64 14 32
Balance, December 31, 2022 $ (30) $ 45 $ (116) $ (101)
__________
All components of accumulated other comprehensive income (loss) are net of tax, except currency translation adjustments, which
exclude income taxes related to indefinite investments in foreign subsidiaries (see Note 9 – Income Taxes for impacts of the Tax Act)
and include a $114 million gain, net of tax, related to our hedge of our investment in euro-denominated foreign operations (See
Note 20 – Financial Instruments).
(a)
For the years ended December 31, 2021 and 2020, the amounts were reclassified from accumulated other comprehensive
income (loss) into restructuring and other related charges.
(b)
For the years ended December 31, 2022, 2021 and 2020, the amounts reclassified from accumulated other comprehensive
income (loss) into corporate interest expense were $9 million ($7 million, net of tax), $17 million ($12 million, net of tax) and $9
million ($6 million, net of tax), respectively. For the years ended December 31, 2021 and 2020, the amounts reclassified from
accumulated other comprehensive income (loss) into vehicle interest expense were $2 million ($2 million, net of tax).
(c)
For the years ended December 31, 2022, 2021 and 2020, amounts reclassified from accumulated other comprehensive income
(loss) into selling, general and administrative expenses were $5 million ($3 million, net of tax), $9 million ($7 million, net of tax)
and $9 million ($6 million, net of tax), respectively.
17. Related Party Transactions
SRS Mobility Ventures, LLC
In 2021, SRS Mobility Ventures, LLC acquired a 33 1/3% Class A Membership Interest in one of our
subsidiaries at fair value of $37.5 million. SRS Mobility Ventures, LLC is an affiliate of our largest
shareholder, SRS Investment Management, LLC.
On September 1, 2022, through the issuance of Class B Preferred Voting Membership Interests, SRS
Mobility Ventures, LLC increased their ownership in this subsidiary to 51% at a fair value of $62 million. As a
result, we deconsolidated our former subsidiary, Avis Mobility Ventures LLC (“AMV”), from our financial
statements and now record our proportional share of the former subsidiary’s income or loss within other
(income) expense, net in our Consolidated Statements of Operations as we do not have the ability to direct
the significant activities of the former subsidiary and are therefore no longer primary beneficiary of the VIE.
In accordance with ASC Topic 810-10-40, we must deconsolidate a subsidiary as of the date we cease to
have a controlling interest in that subsidiary and recognize the gain or loss in net income at that time. The
fair value of our retained investment was determined utilizing a discounted cash flow methodology based on
various assumptions, including projections of future cash flows, which include forecast of future revenue
and EBITDA. Upon deconsolidation, our former subsidiary had a net asset carrying amount of $49 million
resulting in a gain of $10 million, which is reported within other (income) expense, net during the year ended
December 31, 2022.
We provide vehicles and related fleet services to AMV, as well as certain administrative services to support
their operations. For the year ended December 31, 2022, we recognized $7 million of income related to
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these services within other (income) expense, net. At December 31, 2022, we had receivables from AMV of
$6 million and a net investment in vehicle finance leases of $36 million. The carrying amount of our equity
investment was approximately $49 million at December 31, 2022 and is recorded within other non-current
assets in our Consolidated Balance Sheet. For the year ended December 31, 2022, we recorded losses of
$10 million within other (income) expense, net related to our equity investment.
SRS Investment Management LLC
On December 23, 2022, we also entered into an amended and restated cooperation agreement with SRS
Investment Management LLC and certain of its affiliates.
18. Stock-Based Compensation
Our Amended and Restated Equity and Incentive Plan provides for the grant of options, stock appreciation
rights, restricted stock, restricted stock units (“RSUs”) and other stock- or cash-based awards to employees,
directors and other individuals who perform services for us and our subsidiaries. The maximum number of
shares reserved for grant of awards under the plan is 22.5 million, with approximately 4.1 million shares
available as of December 31, 2022. We typically settle stock-based awards with treasury shares.
Time-based awards generally vest ratably over a three-year period following the date of grant, and
performance- or market-based awards generally vest three years following the date of grant based on the
attainment of performance- or market-based goals, all of which are subject to a service condition.
Stock Unit Awards
Stock unit awards entitle the holder to receive shares of common stock upon vesting on a one-to-one basis.
Certain performance-based RSUs vest based upon the level of performance attained, but vesting can
increase (typically by up to 20%) if certain relative total shareholder return goals are achieved. Market-
based RSUs generally vest based on the level of total shareholder return or absolute stock price attainment.
In June 2020, we granted market-based RSUs that vest based on absolute stock price attainment. The
grant date fair value of this award is estimated using a Monte Carlo simulation model. The weighted
average assumptions used in the model are outlined in the table below. During the years ended
December 31, 2022 and 2021, we did not issue any stock unit awards containing a market condition.
Expected volatility of stock price 91%
Risk-free interest rate 0.18%
Valuation period 3 years
Dividend yield —%
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Annual activity related to stock units consisted of (in thousands of shares):
Weighted
Weighted Average
Average Remaining Aggregate
Number of Grant Date Contractual Intrinsic Value
Shares Fair Value Term (years) (in millions)
Time-based RSUs
Outstanding at January 1, 2022 671 $ 39.39
(a)
Granted 180 172.34
Vested (b) (360) 37.35
Forfeited (40) 61.80
(c)
Outstanding and expected to vest at December 31, 2022 451 $ 92.06 1.1 $ 74
Performance-based and market-based RSUs
Outstanding at January 1, 2022 886 $ 35.40
Granted (a) 99 193.48
Vested (b) (254) 34.24
Forfeited (40) 49.75
Outstanding at December 31, 2022 691 $ 57.56 0.9 $ 113
(c)
Outstanding and expected to vest at December 31, 2022 683 $ 55.99 0.9 $ 112
__________
(a)
Reflects the maximum number of stock units assuming achievement of all performance-, market- and time-vesting criteria and
does not include those for non-employee directors, which are discussed separately below. The weighted-average fair value of
time-based RSUs, and performance-based and market-based RSUs granted in 2021 was $65.23 and $62.27, respectively, and
the weighted-average fair value of time-based RSUs and performance-based RSUs granted in 2020 was $23.14 and $21.06,
respectively.
(b)
The total fair value of RSUs vested during 2022, 2021 and 2020 was $22 million, $17 million and $19 million, respectively.
(c)
Aggregate unrecognized compensation expense related to time-based RSUs and performance-based and market-based RSUs
amounted to $49 million and will be recognized over a weighted average vesting period of 1.0 year.
Non-employee Directors Deferred Compensation Plan
We grant stock awards on an annual basis to non-employee directors representing between 50% and 100%
of a director’s annual compensation and such awards could be deferred under the Non-employee Directors
Deferred Compensation Plan. During 2022, 2021 and 2020, we granted 2,500, 8,800 and 34,000 awards,
respectively, to non-employee directors.
Stock-Compensation Expense
During 2022, 2021 and 2020, we recorded stock-based compensation expense of $25 million ($17 million,
net of tax), $30 million ($21 million, net of tax) and $9 million ($7 million, net of tax), respectively.
19. Employee Benefit Plans
Defined Contribution Savings Plans
We sponsor several defined contribution savings plans in the United States and certain foreign subsidiaries
that provide certain of our eligible employees an opportunity to accumulate funds for retirement. We match
portions of the contributions of participating employees on the basis specified by the plans. Our
contributions to these plans were $26 million, $22 million and $23 million during 2022, 2021 and 2020,
respectively.
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Defined Benefit Pension Plans
We sponsor defined benefit pension plans in the United States and in certain foreign subsidiaries with some
plans offering participation in the plans at the employees’ option. Under these plans, benefits are based on
an employee’s years of credited service and a percentage of final average compensation. However, the
majority of the plans are closed to new employees and participants are no longer accruing benefits.
The funded status of the defined benefit pension plans is recognized on the Consolidated Balance Sheets
and the gains or losses and prior service costs or credits that arise during the period, but are not recognized
as components of net periodic benefit cost, are recognized as a component of accumulated other
comprehensive loss, net of tax.
The components of net periodic (benefit) cost consisted of the following:
Year Ended December 31,
2022 2021 2020
Service cost (a) $ 5 $ 6 $ 5
Interest cost (b) 16 12 17
Expected return on plan assets (b) (37) (35) (31)
Amortization of unrecognized amounts (b) 5 9 9
Net periodic (benefit) cost $ (11) $ (8) $ —
__________
(a)
For the years ended December 31, 2022, 2021, and 2020, $4 million was included in operating expenses, in each period, and
$1 million, $2 million and $1 million was included in selling, general and administrative expenses, respectively.
(b)
Included in selling, general and administrative expenses.
We use a measurement date of December 31 for our pension plans. The funded status of the pension plans
were as follows:
As of December 31,
Change in Benefit Obligation 2022 2021
Benefit obligation at end of prior year $ 881 $ 926
Service cost 5 6
Interest cost 16 12
Actuarial (gain) loss (247) (17)
Plan amendments (1) (3)
Currency translation adjustment (51) (12)
Net benefits paid (28) (31)
Benefit obligation at end of current year $ 575 $ 881
Change in Plan Assets
Fair value of assets at end of prior year $ 772 $ 722
Actual return on plan assets (196) 71
Employer contributions 12 16
Currency translation adjustment (46) (5)
Net benefits paid (28) (32)
Fair value of assets at end of current year $ 514 $ 772
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Amounts recognized in the statement of financial position consist of the following:
As of December 31,
Funded Status 2022 2021
Classification of net balance sheet assets (liabilities):
Non-current assets $ 36 $ 50
Current liabilities (4) (5)
Non-current liabilities (93) (154)
Net funded status $ (61) $ (109)
The following assumptions were used to determine pension obligations and pension costs for the principal
plans in which our employees participated:
For the Year Ended December 31,
U.S. Pension Benefit Plans 2022 2021 2020
Discount rate:
Net periodic benefit cost 2.67 % 2.25 % 3.10 %
Benefit obligation 5.18 % 2.67 % 2.25 %
Long-term rate of return on plan assets 6.25 % 6.75 % 7.00 %
Non-U.S. Pension Benefit Plans
Discount rate:
Net periodic benefit cost 1.83 % 1.40 % 1.95 %
Benefit obligation 4.79 % 1.83 % 1.40 %
Long-term rate of return on plan assets 4.39 % 3.71 % 3.80 %
To select discount rates for our defined benefit pension plans, we use a modeling process that involves
matching the expected cash outflows of such plans, to yield curves constructed from portfolios of AA-rated
fixed-income debt instruments. We use the average yields of the hypothetical portfolios as a discount rate
benchmark.
Our expected rate of return on plan assets of 6.25% and 4.39% for the U.S. plans and non-U.S. plans,
respectively, used to determine pension obligations and pension costs, are long-term rates based on
historic plan asset returns in individual jurisdictions, over varying long-term periods combined with current
market expectations and broad asset mix considerations.
As of December 31, 2022 and 2021, plans with projected benefit obligations in excess of plan assets had
projected benefit obligations of $332 million and $453 million, respectively, and plan assets of $235 million
and $297 million, respectively. As of December 31, 2022 and 2021, plans with accumulated benefit
obligations in excess of plan assets had accumulated benefit obligations of $329 million and $453 million,
respectively, and plan assets of $235 million and $303 million, respectively. The accumulated benefit
obligation for all plans was $571 million and $872 million as of December 31, 2022 and 2021, respectively.
We expect to contribute approximately $1 million to the plans in 2023.
Our defined benefit pension plans’ assets are invested primarily in mutual funds and may change in value
due to various risks, such as interest rate and credit risk and overall market volatility. Due to the level of risk
associated with investment securities, it is reasonably possible that changes in the values of the pension
plans’ investment securities will occur in the near term and that such changes would materially affect the
amounts reported in our financial statements.
The defined benefit pension plans’ investment goals and objectives are managed by us or Company-
appointed and member-appointed trustees with consultation from independent investment advisors. While
the objectives may vary slightly by country and jurisdiction, collectively we seek to produce returns on
pension plan investments, which are based on levels of liquidity and investment risk that we believe are
prudent and reasonable, given prevailing capital market conditions. The pension plans’ assets are managed
in the long-term interests of the participants and the beneficiaries of the plans. A suitable strategic asset
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allocation benchmark is determined for each plan to maintain a diversified portfolio, taking into account
government requirements, if any, regarding unnecessary investment risk and protection of pension plans’
assets. We believe that diversification of the pension plans’ assets is an important investment strategy to
provide reasonable assurance that no single security or class of securities will have a disproportionate
impact on the pension plans. As such, we allocate assets among traditional equity, fixed income
(government issued securities, corporate bonds and short-term cash investments) and other investment
strategies.
The equity component’s purpose is to provide a total return that will help preserve the purchasing power of
the assets. The pension plans hold various mutual funds that invest in equity securities and are diversified
among funds that invest in large cap, small cap, growth, value and international stocks as well as funds that
are intended to “track” an index, such as the S&P 500. The equity investments in the portfolios will
represent a greater assumption of market volatility and risk as well as provide higher anticipated total return
over the long term. The equity component is expected to approximate 35%-55% of the plans’ assets.
The purpose of the fixed income component is to provide a deflation hedge, to reduce the overall volatility of
the pension plans’ assets in relation to the liability and to produce current income. The pension plans hold
mutual funds that invest in securities issued by governments, government agencies and corporations. The
fixed income component is expected to approximate 35%-55% of the plans’ assets.
The purpose of the alternative investment component is to provide diversification and risk reduction through
less correlated investment strategies with the goal of enhanced returns and downside protection. Alternative
strategies will not be used if they are designed solely to enhance return and/or employ significant leverage.
Diversification of asset categories, investment styles and managers is central to managing investment risk.
The alternative investment component is expected to approximate 5%-15% of the plans’ assets.
The following table presents the defined benefit pension plans’ assets measured at fair value:
As of December 31, 2022
Asset Class Level 1 Level 2 Level 3 Total
Cash equivalents and short-term investments $ 18 $ 6 $ — $ 24
U.S. equities 69 19 — 88
Non-U.S. equities 39 30 — 69
Government bonds — 2 — 2
Corporate bonds 126 48 — 174
Other assets 2 101 54 157
Total assets $ 254 $ 206 $ 54 $ 514
__________
For the year ended December 31, 2022, we purchased and classified $54 million of investments as Level 3.
As of December 31, 2021
Asset Class Level 1 Level 2 Level 3 Total
Cash equivalents and short-term investments $ 14 $ 48 $ — $ 62
U.S. equities 115 45 — 160
Non-U.S. equities 56 89 — 145
Government bonds 6 11 — 17
Corporate bonds 134 51 — 185
Other assets 5 152 46 203
Total assets $ 330 $ 396 $ 46 $ 772
__________
For the year ended December 31, 2021, we purchased and classified $46 million of investments as Level 3.
We estimate that future benefit payments from plan assets will be $30 million, $31 million, $32 million, $33
million, $34 million and $183 million for 2023, 2024, 2025, 2026, 2027 and 2028 to 2032, respectively.
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Multiemployer Plans
We contribute to a number of multiemployer plans under the terms of collective-bargaining agreements that
cover a portion of our employees. The risks of participating in these multiemployer plans are different from
single-employer plans in the following aspects: (i) assets contributed to the multiemployer plan by one
employer may be used to provide benefits to employees of other participating employers; (ii) if a
participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by
the remaining participating employers; (iii) if we elect to stop participating in a multiemployer plan, we may
be required to contribute to such plan an amount based on the under-funded status of the plan; and (iv) we
have no involvement in the management of the multiemployer plans’ investments. For the year ended
December 31, 2022, we contributed $8 million and for the years ended December 31, 2021 and 2020, we
contributed $7 million, in each period, to multiemployer plans.
20. Financial Instruments
Risk Management
Currency Risk. We use currency exchange contracts to manage our exposure to changes in currency
exchange rates associated with certain of our non-U.S.-dollar denominated receivables and forecasted
royalties, forecasted earnings of non-U.S. subsidiaries and forecasted non-U.S.-dollar denominated
acquisitions. We primarily hedge a portion of our current-year currency exposure to the Australian,
Canadian and New Zealand dollars, the euro and the British pound sterling. The majority of forward
contracts do not qualify for hedge accounting treatment. The fluctuations in the value of these forward
contracts do, however, largely offset the impact of changes in the value of the underlying risk they
economically hedge. Forward contracts used to hedge forecasted third-party receipts and disbursements up
to 12 months are designated and do qualify as cash flow hedges. We have designated our euro-
denominated notes as a hedge of our investment in euro-denominated foreign operations.
The estimated net amount of existing gains or losses we expect to reclassify from accumulated other
comprehensive income (loss) to earnings for cash flow and net investment hedges over the next 12 months
is not material.
Interest Rate Risk. We use various hedging strategies including interest rate swaps and interest rate caps to
create what we deem an appropriate mix of fixed and floating rate assets and liabilities. We use interest rate
swaps and interest rate caps to manage the risk related to our floating rate corporate debt and our floating
rate vehicle-backed debt. We record the changes in the fair value of our cash flow hedges to other
comprehensive income (loss), net of tax, and subsequently reclassify these amounts into earnings in the
period during which the hedged transaction affects earnings and is presented in the same income
statement line item as the earnings effect of the hedged item. We record the gains or losses related to
freestanding derivatives, which are not designated as a hedge for accounting purposes, currently in
earnings and are presented in the same line of the income statement expected for the hedged item. We
estimate that approximately $16 million of gain currently recorded in accumulated other comprehensive
income (loss) will be recognized in earnings over the next 12 months.
Commodity Risk. We periodically enter into derivative commodity contracts to manage our exposure to
changes in the price of gasoline. These instruments were designated as freestanding derivatives and the
changes in fair value are recorded in earnings and are presented in the same line of the income statement
expected for the hedged item.
Credit Risk and Exposure. We are exposed to counterparty credit risks in the event of nonperformance by
counterparties to various agreements and sales transactions. We manage such risk by evaluating the
financial position and creditworthiness of such counterparties and by requiring collateral in certain instances
in which financing is provided. We mitigate counterparty credit risk associated with our derivative contracts
by monitoring the amount for which we are at risk with each counterparty, periodically evaluating
counterparty creditworthiness and financial position, and where possible, dispersing our risk among multiple
counterparties.
There were no significant concentrations of credit risk with any individual counterparty or groups of
counterparties at December 31, 2022 or 2021, other than (i) risks related to our repurchase and guaranteed
depreciation agreements with domestic and foreign car manufacturers, and primarily with respect to
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receivables for program cars that were disposed but for which we have not yet received payment from the
manufacturers (see Note 2 – Summary of Significant Accounting Policies), (ii) receivables from Realogy and
Wyndham related to certain contingent, income tax and other corporate liabilities assumed by Realogy and
Wyndham in connection with their disposition and (iii) risks related to leases which have been assumed by
Realogy but of which we are a guarantor. Concentrations of credit risk associated with trade receivables are
considered minimal due to our diverse customer base. We do not normally require collateral or other
security to support credit sales.
Fair Value
Derivative instruments and hedging activities
As described above, derivative assets and liabilities consist principally of currency exchange contracts,
interest rate swaps, interest rate caps and commodity contracts. We held derivative instruments with
absolute notional values as follows:
As of December 31,
2022 2021
Foreign exchange contracts $ 1,160 $ 1,655
Interest rate caps (a) 14,219 11,900
Interest rate swaps 1,450 1,450
__________
(a)
Represents $9.8 billion of interest rate caps sold, partially offset by approximately $4.4 billion of interest rate caps purchased at
December 31, 2022 and $7.2 billion of interest rate caps sold, partially offset by approximately $4.7 billion of interest rate caps
purchased at December 31, 2021. These amounts exclude $6.2 billion and $3.0 billion of interest rate caps purchased by our Avis
Budget Rental Car Funding subsidiary at December 31, 2022 and 2021, respectively.
Fair values (Level 2) of derivative instruments are as follows:
As of December 31, 2022 As of December 31, 2021
Fair Value, Fair Value, Fair Value, Fair Value,
Asset Liability Asset Liability
Derivatives Derivatives Derivatives Derivatives
Derivatives designated as hedging instruments
Interest rate swaps (a) $ 61 $ — $ 2 $ 27
Derivatives not designated as hedging instruments
Foreign exchange contracts (b) 4 6 7 10
(c)
Interest rate caps 46 111 11 15
Total $ 111 $ 117 $ 20 $ 52
__________
Amounts in this table exclude derivatives issued by Avis Budget Rental Car Funding, as it is not consolidated by us; however, certain
amounts related to the derivatives held by Avis Budget Rental Car Funding are included within accumulated other comprehensive
income (loss), as discussed in Note 16 – Stockholders' Equity.
(a)
Included in other non-current assets or other non-current liabilities.
(b)
Included in other current assets or other current liabilities.
(c)
Included in assets under vehicle programs or liabilities under vehicle programs.
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The effects of derivatives recognized in our Consolidated Financial Statements are as follows:
Year Ended December 31,
2022 2021 2020
Financial instruments designated as hedging instruments (a)
Interest rate swaps (b) $ 64 $ 32 $ (31)
(c)
Euro-denominated notes 44 56 (67)
Financial instruments not designated as hedging instruments (d)
Foreign exchange contracts (e) 36 (3) (5)
Interest rate caps (f) (1) (1) —
Commodity contracts (g) — — (6)
Total $ 143 $ 84 $ (109)
__________
(a)
Recognized, net of tax, as a component of accumulated other comprehensive income (loss) within stockholders’ equity.
(b)
Classified as a net unrealized gain (loss) on cash flow hedges in accumulated other comprehensive income (loss). Refer to
Note 16 – Stockholders' Equity for amounts reclassified from accumulated other comprehensive income (loss) into earnings.
(c)
Classified as a net investment hedge within currency translation adjustment in accumulated other comprehensive income (loss).
(d)
Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures
being hedged.
(e)
For the year ended December 31, 2022, included a $39 million gain in interest expense and a $3 million loss in operating
expenses. For the year ended December 31, 2021, included a $2 million loss in interest expense and a $1 million loss in
operating expenses. For the year ended December 31, 2020, included a $3 million loss in interest expense and a $2 million loss
in operating expenses.
(f)
Primarily included in vehicle interest, net.
(g)
Included in operating expenses.
Debt Instruments
The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows:
As of December 31, 2022 As of December 31, 2021
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
Corporate debt
Short-term debt and current portion of long-term debt $ 27 $ 26 $ 19 $ 18
Long-term debt 4,644 4,411 3,990 4,153
Debt under vehicle programs
Vehicle-backed debt due to Avis Budget Rental Car
Funding $ 11,275 $ 10,848 $ 8,848 $ 9,009
Vehicle-backed debt 2,423 2,422 2,528 2,559
Interest rate swaps and interest rate caps (a) 111 111 14 14
___________
(a)
Derivatives in liability position.
21. Segment Information
Our chief operating decision-maker assesses performance and allocates resources based upon the
separate financial information of our operating segments. In identifying our reportable segments, we also
consider the nature of services provided by our operating segments, the geographical areas in which the
segments operate and other relevant factors. We aggregate certain of our operating segments into our
reportable segments.
Management evaluates the operating results of each of our reportable segments based upon revenues and
“Adjusted EBITDA,” which we define as income from continuing operations before non-vehicle related
depreciation and amortization; any impairment charges; restructuring and other related charges; early
extinguishment of debt costs; non-vehicle related interest; transaction-related costs, net; charges for
unprecedented personal-injury and other legal matters, net, which includes amounts recorded in excess of
$5 million related to class action lawsuits; non-operational charges related to shareholder activist activity,
which include third party advisory, legal and other professional fees; COVID-19 charges, net; other (income)
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expense, net; and income taxes.
We revised our definition of Adjusted EBITDA to exclude other (income) expense, net. We did not revise
prior years' Adjusted EBITDA because there were no other charges similar in nature. We believe Adjusted
EBITDA is useful as a supplemental measure in evaluating the performance of our operating businesses
and in comparing our results from period to period. We also believe that Adjusted EBITDA is useful to
investors because it allows them to assess our results of operations and financial condition on the same
basis that management uses internally. Our presentation of Adjusted EBITDA may not be comparable to
similarly-titled measures used by other companies.
Year Ended December 31, 2022
Corporate
Americas International and Other (a) Total
Revenues $ 9,474 $ 2,520 $ — $ 11,994
Vehicle depreciation and lease charges,
net 414 414 — 828
Vehicle interest, net 348 54 — 402
Adjusted EBITDA 3,660 560 (87) 4,133
Non-vehicle depreciation and amortization 141 66 18 225
Assets exclusive of assets under vehicle
programs 5,798 2,402 299 8,499
Assets under vehicle programs 14,269 3,159 — 17,428
Capital expenditures (excluding vehicles) 117 33 96 246
__________
(a) Primarily represents unallocated corporate expenses and receivables from our former subsidiaries.
Year Ended December 31, 2021
Corporate
Americas International and Other (a) Total
Revenues $ 7,557 $ 1,756 $ — $ 9,313
Vehicle depreciation and lease charges,
net 851 346 — 1,197
Vehicle interest, net 258 55 — 313
Adjusted EBITDA 2,364 118 (71) 2,411
Non-vehicle depreciation and amortization 178 84 10 272
Assets exclusive of assets under vehicle
programs 5,746 2,716 119 8,581
Assets under vehicle programs 11,437 2,582 — 14,019
Capital expenditures (excluding vehicles) 74 26 8 108
__________
(a)
Primarily represents unallocated corporate expenses and receivables from our former subsidiaries.
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Year Ended December 31, 2020
Corporate
Americas International and Other (a) Total
Revenues $ 3,965 $ 1,437 $ — $ 5,402
Vehicle depreciation and lease charges,
net 968 400 — 1,368
Vehicle interest, net 274 44 — 318
Adjusted EBITDA 72 (202) (45) (175)
Non-vehicle depreciation and amortization 185 91 10 286
Assets exclusive of assets under vehicle
programs 5,510 2,754 101 8,365
Assets under vehicle programs 7,155 2,018 — 9,173
Capital expenditures (excluding vehicles) 65 29 — 94
__________
(a)
Primarily represents unallocated corporate expenses and receivables from our former subsidiaries.
Provided below is a reconciliation of Adjusted EBITDA to income (loss) before income taxes.
For the Year Ended December 31,
2022 2021 2020
Adjusted EBITDA $ 4,133 $ 2,411 $ (175)
Less:
Non-vehicle related depreciation and amortization (a) 235 279 286
Interest expense related to corporate debt, net
Interest expense 250 218 231
Early extinguishment of debt — 136 9
COVID-19 charges (b) (9) (2) 122
Restructuring and other related charges 19 64 118
Non-operational charges related to shareholder activist
activity (c) — 3 8
Unprecedented personal-injury and other legal matters, 1 — 4
net (d)
Transaction-related costs, net 8 5 3
Other (income) expense, net (7) — —
Income (loss) before income taxes $ 3,636 $ 1,708 $ (956)
__________
(a)
Includes amortization of intangible assets recognized in purchase accounting of $43 million in 2022, $66 million in 2021 and $66
million in 2020. Includes operating expenses in our Consolidated Statements of Operations related to cloud computing costs of
$10 million and $7 million in 2022 and 2021, respectively.
(b)
The following table presents the unusual, direct and incremental costs due to the COVID-19 pandemic:
2022 2021
Minimum annual guaranteed rent in excess of concession fees, net $ (9) $ (2)
Vehicles damaged in overflow parking lots, net of insurance proceeds — (7)
Other charges — 7
Operating expenses $ (9) $ (3)
Selling, general and administrative expenses — 1
COVID-19 charges, net $ (9) $ (2)
(c)
Reported within selling, general and administrative expenses in our Consolidated Statements of Operations.
(d)
Reported within operating expenses on our Consolidated Statements of Operations.
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The geographic segment information provided below is classified based on the geographic location of our
subsidiaries.
All Other
United States Countries Total
2022
Revenues $ 8,975 $ 3,019 $ 11,994
Assets exclusive of assets under vehicle programs 5,622 2,877 8,499
Assets under vehicle programs 13,514 3,914 17,428
Net long-lived assets 1,386 944 2,330
2021
Revenues $ 7,254 $ 2,059 $ 9,313
Assets exclusive of assets under vehicle programs 5,575 3,006 8,581
Assets under vehicle programs 10,915 3,104 14,019
Net long-lived assets 1,328 1,041 2,369
2020
Revenues $ 3,758 $ 1,644 $ 5,402
Assets exclusive of assets under vehicle programs 5,262 3,103 8,365
Assets under vehicle programs 6,797 2,376 9,173
Net long-lived assets 1,421 1,147 2,568
22. Subsequent Event
In January 2023, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued $850 million of
asset-backed notes to investors with a weighted average interest rate of 5.34%.
In February 2023, our Board of Directors approved a $1 billion increase in repurchase authorization to our
Stock Repurchase Program.
*****
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Schedule II – Valuation and Qualifying Accounts
(in millions)
Balance at Balance at
Beginning Expense Other End of
Description of Period (Benefit) Adjustments(a) Deductions Period
Allowance for Doubtful Accounts:
Year Ended December 31,
2022 $ 84 $ 91 $ (3) $ (86) $ 86
2021 60 107 (2) (81) 84
2020 52 73 3 (68) 60
Tax Valuation Allowance:
Year Ended December 31,
2022 $ 169 $ (63) $ (3) $ — $ 103
2021 207 (35) (3) — 169
2020 214 (1) (6) — 207
__________
(a)
Primarily currency translation adjustments.
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EXHIBIT DESCRIPTION
NO.
2.1 Separation and Distribution Agreement by and among Cendant Corporation*, Realogy Corporation, Wyndham
Worldwide Corporation and Travelport Inc., dated as of July 27, 2006 (Incorporated by reference to Exhibit 2.1
to the Company’s Current Report on Form 8-K, dated August 1, 2006).
2.2 Letter Agreement dated August 17, 2006 related to the Separation and Distribution Agreement by and among
Realogy Corporation, Cendant Corporation*, Wyndham Worldwide Corporation and Travelport Inc. dated as of
July 27, 2006 (Incorporated by reference to Exhibit 2.2 to the Company’s Quarterly Report on Form 10-Q for the
period ended June 30, 2007, dated August 8, 2007).
3.1 Amended and Restated Certificate of Incorporation of Avis Budget Group, Inc. (Incorporated by reference to
Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated September 5, 2006).
3.2 Amended and Restated Bylaws of Avis Budget Group, Inc., dated August 10, 2020 (Incorporated by reference
to Exhibit 3.2 to the Company’s Current Report on Form 8-K, dated August 13, 2020).
4.1 Indenture dated as of September 26, 2016 among Avis Budget Finance plc, as Issuer, the Guarantors from time
to time parties hereto and Deutsche Bank Trust Company Americas as Trustee, Deutsche Bank AG, London
Branch as Paying Agent and Deutsche Bank Luxembourg S.A., as Registrar, governing the 4.125% Senior
Notes due 2024 (Incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for
the quarter ended September 30, 2016, dated November 3, 2016).
4.2 Indenture dated as of March 8, 2017 among Avis Budget Finance, plc, as Issuer, the Guarantors from time to
time parties hereto, Deutsche Bank Trust Company Americas, as Trustee, Deutsche Bank AG, London Branch,
as Paying Agent and Deutsche Bank Luxembourg S.A., as Registrar, governing the 4.50% Senior Notes due
2025 (Incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter
ended March 31, 2017, dated May 4, 2017).
4.3 Indenture dated as of October 4, 2018 among Avis Budget Finance, plc, as Issuer, the Guarantors from time to
time parties thereto, Deutsche Bank Trust Company Americas, as Trustee, Deutsche Bank AG, London Branch,
as Paying Agent and Deutsche Bank Luxembourg S.A., as Registrar, governing the 4.75% Senior Notes due
2026 (Incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2018 dated November 6, 2018).
4.4 Indenture dated as of July 3, 2019 among Avis Budget Car Rental, LLC and Avis Budget Finance, Inc., as
Issuers, the Guarantors from time to time parties thereto and Deutsche Bank Trust Company Americas, as
Trustee, governing the 5.75% Senior Notes due 2027 (Incorporated by reference to Exhibit 4.1 to the
Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, dated August 6,
2019).
4.5 First Supplemental Indenture, dated as of August 6, 2020, to the indenture dated as of July 3, 2019 by and
among Avis Budget Car Rental, LLC and Avis Budget Finance, Inc., as issuers, the guarantors party thereto and
Deutsche Bank Trust Company Americas, as trustee (Incorporated by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K, dated August 7, 2020).
4.6 Indenture, dated as of March 1, 2021, by and among Avis Budget Car Rental, LLC and Avis Budget Finance,
Inc., as issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee,
governing the 5.375% Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K, dated March 1, 2021).
4.7 Indenture, dated as of March 23, 2021, by and among Avis Budget Car Rental, LLC and Avis Budget Finance,
Inc., as issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee,
governing the 4.75% Senior Notes due 2028 (Incorporated by reference to Exhibit 4.1 to the Company's Current
Report on Form 8-K, dated March 23, 2021).
4.8 Description of the Company’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of
1934 (Incorporated by reference to Exhibit 4.8 to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2021, dated February 17, 2022).
10.1 Agreement between Avis Budget Group, Inc. and Joseph Ferraro (Incorporated by reference to Exhibit 10.5 to
the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, dated February 24,
2016).†
10.2 Service Agreement between Patrick Rankin and Avis Budget Services Limited, dated February 22, 2019
(Incorporated by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2019, dated February 20, 2020). †
10.3 Agreement between Patrick Rankin and Avis Budget Services Limited, dated August 15, 2019 (Incorporated by
reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2019, dated February 20, 2020). †
10.4 Agreement between Avis Budget Group, Inc. and Edward Linnen, dated April 20, 2015 (Incorporated by
reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2019, dated February 20, 2020). †
10.5 Offer Letter, dated August 12, 2020, between Brian Choi and Avis Budget Group, Inc. (incorporated by
reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, dated August 13, 2020). †
10.6 Offer Letter, dated February 4, 2021, between Veresh Sita and Avis Budget Group, Inc. (incorporated by
reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K, dated February 17, 2022). †
10.7 Separation Agreement, dated April 19, 2022, between Veresh Sita and Avis Budget Group, Inc. (Incorporated by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated April 22, 2022).
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10.8 Avis Budget Group, Inc. Executive Severance Pay Plan for Grade A and B Employees and Summary Plan
Description (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, dated
December 14, 2020). †
10.9 Fourth Amended and Restated Cooperation Agreement, dated as of December 23, 2022, by and among Avis
Budget Group, Inc., SRS Investment Management, LLC and certain of its affiliates (Incorporated by reference to
Exhibit 10.1 to the Company's Current Report on Form 8-K dated December 27, 2022).
10.10 Avis Budget Group, Inc. Amended and Restated Equity and Incentive Plan (Incorporated by reference to Annex
A to the Company's Definitive Proxy Statement on Schedule 14A, dated March 26, 2019).†
10.11 Amendment to the Avis Budget Group, Inc. Amended and Restated Equity and Incentive Plan dated October
26, 2021 (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2021, dated November 2, 2021).†
10.12 Form of Award Agreement - Restricted Stock Units (Incorporated by reference to Exhibit 10.12 to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2018 dated February 21, 2019).†
10.13 Form of Award Agreement - Performance Based Restricted Stock Units (Incorporated by reference to Exhibit
10.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, dated February
21, 2019).†
10.14 Form of Non-Employee Director Award Agreement - Restricted Stock Units (Incorporated by reference to Exhibit
10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, dated February
21, 2019).†
10.15 Form of Avis Budget Group, Inc. Severance Agreement (Incorporated by reference to Exhibit 10.15 to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2018, dated February 21, 2019).†
10.16 Avis Budget Group, Inc. Non-Employee Directors Deferred Compensation Plan, amended and restated as of
January 1, 2019 (Incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K for
the year ended December 31, 2018 dated February 21, 2019).†
10.17 Amendment No. 1 dated as of December 8, 2022 to the Avis Budget Group, Inc. Non-Employee Directors
Deferred Compensation Plan, amended and restated as of January 1, 2019. †
10.18 Avis Budget Group, Inc. Supplemental Savings Plan, amended and restated as of January 1, 2023. †
10.19 Avis Budget Group, Inc. Savings Restoration Plan, amended and restated as of November 1, 2008
(Incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2008, dated February 26, 2009).†
10.20 Avis Rent A Car System, LLC Pension Plan (Incorporated by reference to Exhibit 10.20 to the Company’s
Annual Report on Form 10-K for the year ended December 31, 2018, dated February 21, 2019).†
10.21 Cendant Corporation* Officer Personal Financial Services Policy (Incorporated by reference to Exhibit 10.3 to
the Company’s Current Report on Form 8-K, dated January 26, 2005).
10.22 Tax Sharing Agreement among Cendant Corporation*, Realogy Corporation, Wyndham Worldwide Corporation
and Travelport Inc., dated as of July 28, 2006 (Incorporated by reference to Exhibit 10.2 to the Company’s
Current Report on Form 8-K, dated August 1, 2006).
10.23 Amendment to the Tax Sharing Agreement, dated July 28, 2006, among Avis Budget Group, Inc., Realogy
Corporation, Wyndham Worldwide Corporation and Travelport Inc. (Incorporated by reference to Exhibit 10.4 to
the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008, dated August 7,
2008).
10.24 Second Amended and Restated Base Indenture, dated as of June 3, 2004, among Cendant Rental Car Funding
(AESOP) LLC***, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.7 to
the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, dated August 2,
2004).
10.25 Supplemental Indenture No. 1, dated as of December 23, 2005, among Cendant Rental Car Funding (AESOP)
LLC***, as Issuer, and The Bank of New York, as Trustee, to the Second Amended and Restated Base
Indenture, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report
on Form 8-K, dated January 20, 2006).
10.26 Supplemental Indenture No. 2, dated as of May 9, 2007, among Avis Budget Rental Car Funding (AESOP) LLC,
as Issuer, and The Bank of New York Trust Company, N.A. (as successor in interest to The Bank of New York),
as Trustee, to the Second Amended and Restated Base Indenture, dated as of June 3, 2004 (Incorporated by
reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June
30, 2007, dated August 8, 2007).
10.27 Supplemental Indenture No. 3, dated as of August 16, 2013, among Avis Budget Rental Car Funding (AESOP)
LLC, as Issuer, and The Bank of New York Trust Company, N.A. (as successor in interest to The Bank of New
York), as Trustee, to the Second Amended and Restated Base Indenture, dated as of June 3, 2004
(Incorporated by reference to Exhibit 10.35(c) to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2013, dated February 20, 2014).
10.28 Second Amended and Restated Loan Agreement, dated as of June 3, 2004, among AESOP Leasing L.P., as
Borrower, Quartx Fleet Management, Inc., as a Permitted Nominee, PV Holding Corp., as a Permitted
Nominee, and Cendant Rental Car Funding (AESOP) LLC***, as Lender (Incorporated by reference to Exhibit
10.8 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, dated
August 2, 2004).
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10.29 First Amendment, dated as of December 23, 2005, among AESOP Leasing L.P., as Borrower, Quartx Fleet
Management, Inc., as a Permitted Nominee, PV Holding Corp., as a Permitted Nominee, and Cendant Rental
Car Funding (AESOP) LLC***, as Lender, to the Second Amended and Restated Loan Agreement, dated as of
June 3, 2004 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated
January 20, 2006).
10.30 Second Amendment, dated as of May 9, 2007, among AESOP Leasing L.P., as Borrower, PV Holding Corp., as
a Permitted Nominee, Quartx Fleet Management, Inc., as a Permitted Nominee, and Avis Budget Rental Car
Funding (AESOP) LLC, as Lender, to the Second Amended and Restated Loan Agreement, dated as of June 3,
2004 (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 2007, dated August 8, 2007).
10.31 Third Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Borrower, PV Holding Corp.,
as a Permitted Nominee, Quartx Fleet Management, Inc., as a Permitted Nominee, and Avis Budget Rental Car
Funding (AESOP) LLC, as Lender, to the Second Amended and Restated Loan Agreement, dated as of June 3,
2004 (Incorporated by reference to Exhibit 10.36(c) to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2013, dated February 20, 2014).
10.32 Fourth Amendment, dated as of July 28, 2022, among AESOP Leasing L.P., as Borrower, PV Holding Corp., as
a Permitted Nominee, Quartx Fleet Management, Inc., as a Permitted Nominee, and Avis Budget Rental Car
Funding (AESOP) LLC, as Lender, to the Second Amended and Restated Loan Agreement, dated as of June 3,
2004 (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2022, dated November 1, 2022).
10.33 Amended and Restated Loan Agreement, dated as of June 3, 2004, among AESOP Leasing L.P., as Borrower,
and Cendant Rental Car Funding (AESOP) LLC***, as Lender (Incorporated by reference to Exhibit 10.29(a) to
the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, dated March 1, 2007).
10.34 First Amendment, dated as of December 23, 2005, among AESOP Leasing L.P., as Borrower, and Cendant
Rental Car Funding (AESOP) LLC***, as Lender, to the Amended and Restated Loan Agreement, dated as of
June 3, 2004 (Incorporated by reference to Exhibit 10.29(b) to the Company’s Annual Report on Form 10-K for
the year ended December 31, 2006, dated March 1, 2007).
10.35 Second Amendment, dated as of the May 9, 2007, among AESOP Leasing L.P., as Borrower, and Avis Budget
Rental Car Funding (AESOP) LLC, as Lender, to the Amended and Restated Loan Agreement, dated as of
June 3, 2004 (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2007, dated August 8, 2007).
10.36 Third Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Borrower, and Avis Budget
Rental Car Funding (AESOP) LLC, as Lender, to the Amended and Restated Loan Agreement, dated as of
June 3, 2004 (Incorporated by reference to Exhibit 10.37(c) to the Company’s Annual Report on Form 10-K for
the year ended December 31, 2013, dated February 20, 2014).
10.37 Fourth Amendment, dated as of July 28, 2022, between AESOP Leasing L.P., as Borrower, and Avis Budget
Rental Car Funding (AESOP) LLC, as Lender, to the Amended and Restated Loan Agreement, dated as of
June 3, 2004 (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2022, dated November 1, 2022).
10.38 Second Amended and Restated Master Motor Vehicle Operating Lease Agreement, dated as of June 3, 2004,
among AESOP Leasing L.P., as Lessor, and Cendant Car Rental Group, Inc.**, as Lessee and as Administrator
(Incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2004, dated August 2, 2004).
10.39 First Amendment, dated December 23, 2005, among AESOP Leasing L.P., as Lessor, and Cendant Car Rental
Group, Inc.**, as Lessee and as Administrator, to the Second Amended and Restated Master Motor Vehicle
Operating Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.3 to the
Company’s Current Report on Form 8-K, dated January 20, 2006).
10.40 Third Amendment, dated as of May 9, 2007, among AESOP Leasing L.P., as Lessor and Avis Budget Car
Rental, LLC, as Lessee and as the Administrator, to the Second Amended and Restated Master Motor Vehicle
Operating Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.9 to the
Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, dated August 8,
2007).
10.41 Fourth Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Lessor and Avis Budget Car
Rental, LLC, as Lessee and as the Administrator, to the Second Amended and Restated Master Motor Vehicle
Operating Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.38(c) to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014).
10.42 Fifth Amendment, dated as of July 28, 2022, among AESOP Leasing L.P., as Lessor and Avis Budget Car
Rental, LLC, as Lessee and as the Administrator, to the Second Amended and Restated Master Motor Vehicle
Operating Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.3 to the
Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022, dated
November 1, 2022).
10.43 Amended and Restated Master Motor Vehicle Finance Lease Agreement, dated as of June 3, 2004, among
AESOP Leasing L.P., as Lessor, Cendant Car Rental Group, Inc.**, as Lessee, as Administrator and as Finance
Lease Guarantor, Avis Rent A Car System, Inc.****, as Lessee, and Budget Rent A Car System, Inc., as Lessee
(Incorporated by reference to Exhibit 10.30(a) to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2006, dated March 1, 2007).
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10.44 First Amendment, dated as of December 23, 2005, among AESOP Leasing L.P., as Lessor, Cendant Car Rental
Group, Inc.**, as Lessee, as Administrator and as Finance Lease Guarantor, Avis Rent A Car System, Inc.****,
as Lessee, and Budget Rent A Car System, Inc., as Lessee, to the Amended and Restated Master Motor
Vehicle Finance Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.30(b) to
the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, dated March 1, 2007).
10.45 Third Amendment, dated as of May 9, 2007, among AESOP Leasing L.P., as Lessor, Avis Budget Car Rental,
LLC, as Lessee, as Administrator and as Finance Lease Guarantor, Avis Rent A Car System, LLC, as Lessee,
and Budget Rent A Car System, Inc., as Lessee, to the Amended and Restated Master Motor Vehicle Finance
Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.11 to the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, dated August 8, 2007).
10.46 Fourth Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Lessor, Avis Budget Car
Rental, LLC, as Lessee, as Administrator and as Finance Lease Guarantor, Avis Rent A Car System, LLC, as
Lessee, and Budget Rent A Car System, Inc., as Lessee, to the Amended and Restated Master Motor Vehicle
Finance Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.39(c) to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014).
10.47 Fifth Amendment, dated as of July 28, 2022, among AESOP Leasing L.P., as Lessor, Avis Budget Car Rental,
LLC, as Lessee, as Administrator and as Finance Lease Guarantor, Avis Rent A Car System, LLC, as Lessee,
and Budget Rent A Car System, Inc., as Lessee, to the Amended and Restated Master Motor Vehicle Finance
Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.4 to the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022, dated November 1, 2022).
10.48 AESOP I Operating Sublease Agreement dated as of March 26, 2013 between Zipcar, Inc., as Sublessee and
Avis Budget Car Rental, LLC, as Sublessor (Incorporated by reference to Exhibit 10.1 to the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013, dated May 8, 2013).
10.49 Second Amended and Restated Administration Agreement, dated as of June 3, 2004, among Cendant Rental
Car Funding (AESOP) LLC***, AESOP Leasing L.P., AESOP Leasing Corp. II, Avis Rent A Car System, Inc.****,
Budget Rent A Car System, Inc., Cendant Car Rental Group, Inc.** and The Bank of New York, as Trustee
(Incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2005, dated March 1, 2006).
10.50 First Amendment, dated as of August 16, 2013, among Avis Budget Rental Car Funding (AESOP) LLC, AESOP
Leasing L.P., AESOP Leasing Corp. II, Avis Rent A Car System, LLC, Budget Rent A Car System, Inc. and Avis
Budget Car Rental, LLC, as Administrator, to the Second Amended and Restated Administration Agreement
dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.41(a) to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2013, dated February 20, 2014).
10.51 Fifth Amended and Restated Series 2010-6 Supplement, dated as of April 14, 2022, by and among Avis Budget
Rental Car Funding (AESOP) LLC, as Issuer, Avis Budget Car Rental, LLC, as Administrator, JPMorgan Chase
Bank, N.A., as Administrative Agent, the Non-Conduit Purchasers, the CP Conduit Purchasers, the Committed
Note Purchasers, the APA Banks and the Funding Agents named therein and The Bank of New York Mellon
Trust Company, N.A., as Trustee and as Series 2010-6 Agent (Incorporated by reference to Exhibit 10.2 to the
Company’s Current Report on Form 8-K, dated April 19, 2022).
10.52 Third Amended and Restated Series 2015-3 Supplement, dated as of April 14, 2022, by and among Avis Budget
Rental Car Funding (AESOP) LLC, as Issuer, Avis Budget Car Rental, LLC, as Administrator, JPMorgan Chase
Bank, N.A., as Administrative Agent, the Non-Conduit Purchasers, the CP Conduit Purchasers, the Committed
Note Purchasers, the APA Banks and the Funding Agents named therein and The Bank of New York Mellon
Trust Company, N.A., as Trustee and as Series 2015-3 Agent (Incorporated by reference to Exhibit 10.3 to the
Company’s Current Report on Form 8-K, dated April 19, 2022).
10.53 Series 2017-1 Supplement, dated as of March 15, 2017, between Avis Budget Rental Car Funding (AESOP)
LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2017-1 Agent
(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 21,
2017).
10.54 Amended and Restated Series 2017-2 Supplement, dated as of May 31, 2022, between Avis Budget Rental Car
Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2017-2
Agent (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated June 10,
2022).
10.55 Amended and Restated Series 2018-1 Supplement, dated as of May 31, 2022, between Avis Budget Rental Car
Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2018-1
Agent (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, dated June 10,
2022).
10.56 Amended and Restated Series 2018-2 Supplement, dated as of June 18, 2021, between Avis Budget Rental
Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series
2018-2 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated
June 23, 2021).
10.57 Series 2019-1 Supplement, dated as of February 13, 2019, between Avis Budget Rental Car Funding (AESOP)
LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2019-1 Agent
(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 20,
2019).
10.58 Amended and Restated Series 2019-2 Supplement, dated as of June 18, 2021 between Avis Budget Rental Car
Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series
2019-2 Agent (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated
June 23, 2021).
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10.59 Amended and Restated Series 2019-3 Supplement, dated as of May 26, 2022, between Avis Budget Rental Car
Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2019-3
Agent (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated June 10,
2022).
10.60 Amended and Restated Series 2020-1 Supplement, dated as of June 18, 2021, between Avis Budget Rental
Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series
2020-1 Agent. (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated
June 23, 2021).
10.61 Series 2020-2 Supplement, dated as of August 12, 2020, between Avis Budget Rental Car Funding (AESOP)
LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2020-2 Agent
(Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, dated August 14,
2020).
10.62 Series 2021-1 Supplement dated as of May 18, 2021, between Avis Budget Rental Car Funding (AESOP) LLC
and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2021-1 Agent (Incorporated by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated May 21, 2021).
10.63 Series 2021-2 Supplement, dated as of November 17, 2021, between Avis Budget Rental Car Funding
(AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2021-2 Agent
(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, dated November 19,
2021).
10.64 Series 2022-1 Supplement, dated as of April 14, 2022, between Avis Budget Rental Car Funding (AESOP) LLC
and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2022-1 Agent (Incorporated by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated April 19, 2022).
10.65 Series 2022-2 Supplement, dated as of June 7, 2022, between Avis Budget Rental Car Funding (AESOP) LLC,
Avis Budget Car Rental, LLC, as Administrator, JPMorgan Chase Bank, N.A., as Administrative Agent, the Non-
Conduit Purchasers, the CP Conduit Purchasers, the Committed Note Purchasers, the APA Banks and the
Funding Agents named therein, and The Bank of New York Mellon Trust Company, N.A., as trustee and as
Series 2022-2 Agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
dated June 10, 2022).
10.66 Series 2022-3 Supplement, dated as of July 21, 2022, between Avis Budget Rental Car Funding (AESOP) LLC
and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2022-3 Agent (Incorporated
by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated July 22, 2022).
10.67 Series 2022-4 Supplement, dated as of July 21, 2022, between Avis Budget Rental Car Funding (AESOP) LLC
and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2022-4 Agent (Incorporated by
reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated July 22, 2022).
10.68 Series 2022-5 Supplement, dated as of November 29, 2022, between Avis Budget Rental Car Funding
(AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2022-5 Agent
(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated December 2,
2022).
10.69 Series 2023-1 Supplement, dated as of January 17, 2023, between Avis Budget Rental Car Funding (AESOP)
LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2023-1 Agent
(incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated January 20,
2023).
10.70 Series 2023-2 Supplement, dated as of January 17, 2023, between Avis Budget Rental Car Funding (AESOP)
LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2023-2 Agent
(incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated January 20,
2023).
10.71 Sixth Amended and Restated Credit Agreement, dated as of July 9, 2021, among Avis Budget Holdings, LLC,
Avis Budget Car Rental, LLC, Avis Budget Group, Inc., the subsidiary borrowers from time to time party thereto,
the financial institutions from time to time party thereto JPMorgan Chase Bank, N.A., as Administrative Agent
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated July 13, 2021).
10.72 First Amendment, dated as of March 16, 2022, to the Sixth Amended and Restated Credit Agreement, dated as
of July 9, 2021, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, Avis Budget Group, Inc., the
subsidiary borrowers from time to time party thereto, the financial institutions from time to time party thereto and
JPMorgan Chase Bank, N.A., as Administrative Agent (Incorporated by reference to Exhibit 10.2 to the
Company’s Current Report on Form 8-K, dated March 25, 2022).
10.73 Second Amendment, dated as of March 24, 2022, to the Sixth Amended and Restated Credit Agreement, dated
as of July 9, 2021, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, Avis Budget Group, Inc.,
the subsidiary borrowers from time to time party thereto, the financial institutions from time to time party thereto
and JPMorgan Chase Bank, N.A., as Administrative Agent (Incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K, dated March 25, 2022).
10.74 Third Amendment, dated as of July 28, 2022, to the Sixth Amended and Restated Credit Agreement, dated as
of July 9, 2021, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, as borrower, Avis Budget
Group, Inc., the subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto,
JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto (Incorporated by reference
to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30,
2022, dated November 1, 2022).
10.75 Offer Letter, dated May 17, 2022, between Ravi Simhambhatla and Avis Budget Group, Inc.†
H-5
Table of Contents
10.76 Fourth Amendment, dated as of February 6, 2023, to the Sixth Amended and Restated Credit Agreement, dated
as of July 9, 2021, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, as borrower, Avis Budget
Group, Inc., the subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto
and JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto.
21 Subsidiaries of Registrant.
23.1 Consent of Deloitte & Touche LLP.
31.1 Certification of Chief Executive Officer pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the
Securities Exchange Act of 1934, as amended.
31.2 Certification of Chief Financial Officer pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the
Securities Exchange Act of 1934, as amended.
32 Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document.
101.SCH XBRL Taxonomy Extension Schema.
101.CAL XBRL Taxonomy Extension Calculation Linkbase.
101.DEF XBRL Taxonomy Extension Definition Linkbase.
101.LAB XBRL Taxonomy Extension Label Linkbase.
101.PRE XBRL Taxonomy Extension Presentation Linkbase.
104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022,
formatted as Inline XBRL and contained in Exhibit 101.
____________________
* Cendant Corporation is now known as Avis Budget Group, Inc.
** Cendant Car Rental Group, LLC (formerly known as Cendant Car Rental Group, Inc.) is now known as Avis
Budget Car Rental, LLC.
*** Cendant Rental Car Funding (AESOP) LLC, formerly known as AESOP Funding II L.L.C, is now known as Avis
Budget Rental Car Funding (AESOP) LLC.
**** Avis Rent A Car System, Inc. is now known as Avis Rent A Car System, LLC.
† Denotes management contract or compensatory plan.
†† Confidential treatment has been requested for certain portions of this Exhibit pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended, which portions have been omitted and filed separately with the
Securities and Exchange Commission.
H-6
Exhibit 31.1
SECTION 302 CERTIFICATION
I, Joseph A. Ferraro, certify that:
1. I have reviewed this annual report on Form 10-K of Avis Budget Group, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Date: February 16, 2023
/s/ Joseph A. Ferraro
President and Chief
Executive Officer
Exhibit 31.2
SECTION 302 CERTIFICATION
I, Brian Choi, certify that:
1. I have reviewed this annual report on Form 10-K of Avis Budget Group, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Date: February 16, 2023
/s/ Brian Choi
Executive Vice President and Chief
Financial Officer
Exhibit 32
CERTIFICATION OF CEO AND CFO PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Avis Budget Group, Inc. (the “Company”) on Form 10-K for the period
ended December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), Joseph A. Ferraro, as Chief Executive Officer of the Company, and Brian Choi, as Chief Financial Officer
of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not,
except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.
/s/ JOSEPH A. FERRARO
Joseph A. Ferraro
President and Chief Executive Officer
February 16, 2023
/s/ BRIAN CHOI
Brian Choi
Executive Vice President and Chief
Financial Officer
February 16, 2023
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