Full Description

Avis Budget Group, Inc. (Avis Budget) provides car and truck rentals and ancillary services to businesses and consumers in the United States and internationally. The Company operates two of the brands in the global vehicle rental industry through Avis and Budget. Avis is a rental car supplier to the commercial and leisure segments of the travel industry and Budget is a rental car supplier to the price-conscious segments of the industry. The Company operates in three business segments: Domestic Car Rental, consisting of its Avis and Budget United States car rental operations; International Car Rental, consisting of its international Avis and Budget car rental operations, and truck rental, consisting of its Budget truck rental operations.

Car Rental Business

The Company operates or franchises approximately 2,200 of the approximately 5,100 rental locations that consists of the Avis car rental system (the Avis System), and includes locations at airports and cities in the United States and internationally. The Avis System in Europe, Africa, the Middle East and parts of Asia is primarily operated under agreements with Avis Europe Holdings, Limited (Avis Europe), an independent third party, and comprises approximately 2,900 company operated and sub-licensee locations.

Avis Budget owns and operates approximately 1,300 Avis car rental locations in both the on-airport and local rental segments in North America, Australia, New Zealand, Latin America and the Caribbean. The Company also franchises the Avis System to independent business owners in approximately 900 locations throughout the United States, Canada, Latin America, Australia, New Zealand and parts of Asia. In 2008, approximately 95% of the Avis System total domestic revenue was generated by the Company's locations and the remainder was generated by locations operated by franchisees.

The Avis brand provides car rental services at price points generally above non-branded and value-branded national car rental companies. It offers Avis customers a range of services, including Avis Preferred, a counter bypass program, which is available at airport locations; Avis Where2, a navigation system with traffic alerts, which suggests alternative routes and features Bluetooth hands-free calling, Moving Picture Experts Group layer-3 (MP3) playback capability, as well as directions in multiple languages; Avis Cool Cars, a line of fun-to-drive vehicles, which include the Cadillac CTS, Chevrolet Corvette, Chrysler Crossfire and Hummer H3, as well as eco-friendly Nissan Altima and Toyota Prius hybrid vehicles; Roving Rapid Return program, which permits customers who are returning vehicles to obtain a printed charge record at the vehicle as it is being returned; Avis Access, a range of products and services for drivers and passengers with disabilities, and Avis Interactive, a management tool that allows select corporate clients to view and analyze their rental activity through the Internet allowing these clients to manage their travel budgets and monitor employee compliance with applicable travel policies.

The Budget vehicle rental system (the Budget System) is a car rental system that operates or franchises approximately 1,850 of the approximately 2750 car rental locations in the Budget System, including locations at airports and cities in the United States and certain other regions. The Budget System in Europe, Africa and the Middle East is operated under an agreement with an independent third party, which is an affiliate of Avis Europe and comprises approximately 900 additional company operated and sub-licensee locations.

The Company owns and operates approximately 825 Budget car rental locations in the United States, Canada, Puerto Rico, Australia and New Zealand. The Company also franchises the Budget System to independent business owners who operate approximately 1,025 locations throughout the United States, Canada, Latin America, the Caribbean and parts of the Asia. In 2008, approximately 86% of the Budget System domestic total revenue was generated by the Company's locations with the remainder generated by locations operated by independent franchisees. In 2008, Budget derived 28% and 72% of its domestic time and mileage car rental revenue from commercial and leisure customers, respectively, and 75% and 25% of its domestic car rental revenue from customers renting at airports and locally, respectively.

Avis Budget maintains a single fleet of vehicles for Avis and Budget. It rents a variety of vehicles, including luxury and specialty vehicles. Its fleet consists primarily of vehicles from the current and immediately preceding model year. Rentals are generally made on a daily, weekly or monthly basis. Rental charges are computed on the basis of the length of the rental or, in some cases, on the length of the rental plus a mileage charge. Rates vary at different locations depending on the type of vehicle rented, the local marketplace and competitive and cost factors. Rentals are made utilizing rate plans under which the customer is responsible for gasoline used during the rental. The Company also generally offers its customers the convenience of leaving a rented vehicle at a location in a city other than the one, in which it was rented, although a drop-off charge or special intercity rate may be imposed. Avis Budget facilitates one-way car rentals between corporate-owned and franchised locations in the United States that enable it to operate as an integrated network of locations.

Truck Rental Business

Budget's truck rental business is a local and one-way truck rental business in the United States. The Budget truck rental business has a combined fleet of approximately 29,700 trucks, with an average truck age of three years, which are rented through a network of approximately 2,500 dealers, 300 company- operated and 75 franchisee operated locations throughout the continental United States. The Budget truck rental business serves both the consumer and light commercial sectors. The consumer sector consists primarily of individuals who rent trucks to move household goods on either a one-way or local basis. The light commercial sector consists of a range of businesses that rent light- to medium-duty trucks, which it defines as trucks having a gross vehicle weight of less than 26,000 pounds, for a range of commercial applications.

The Company competes with Hertz Global Holdings, Inc., Dollar Thrifty Automotive Group, Enterprise Rent-A-Car Company, U-Haul International, Inc., Penske Truck Leasing Corporation and Ryder System, Inc.