UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2022~~2023


☐			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
incorporation or organization)

(I.R.S. Employer
Identification Number)

6 Sylvan Way

Parsippany,

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:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.01	CAR	The ~~NASDAQ~~Nasdaq Global Select Market

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 ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the issuer’s common stock was ~~48,287,272~~39,762,342 shares as of April ~~29, 2022.~~28, 2023.

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		Page
PART I	Financial Information
Item 1.	Financial Statements
	Consolidated Condensed Statements of Comprehensive Income for the Three Months Ended March ~~31,~~ 3 1 , 202 3 and 2022 ~~and 202~~1 (Unaudited)	4
	Consolidated Condensed Balance Sheets as of March 31 ~~2022~~, 202 3 and December 31, 202 12 (Unaudited)	5
	Consolidated Condensed Statements of Cash Flows for the Three Months Ended March 31 3 1 , 202 23 and 202 12 (Unaudited)	6
	Consolidated Condensed Statements of Stockholders’ Equity for the Three Months Ended March 31 , 202 23 and ~~202~~12022 (Unaudited)	8
	Notes to Consolidated Condensed Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2526
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3332
Item 4.	Controls and Procedures	33
PART II	Other Information
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 6.	Exhibits	34
	Signatures	35

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FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q 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. Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the Coronavirus (“COVID-19”) pandemic, the continued restrictions that have been placed on travel in many countries and the resulting adverse impact on the global economy, and the potential effects on the global economy and markets as a result of the ongoing military conflict between Russia and Ukraine. These factors include, but are not limited to:

•COVID-19 and its resulting impact on the global economy, which has had, and is expected to continue to have, a significant impact on our operations, including unprecedented volatility in demand levels, as well as its current, and uncertain future impact including, but not limited to, its effect 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;

•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;~~all;

•~~the significant~~levels of and volatility in travel demand, ~~as a result of COVID-19,~~ including ~~the current and any~~ future ~~disruptions~~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;

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•

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~~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 effectively integrate any acquired businesses or capitalize on joint ventures, partnerships and other investments;

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•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, ~~potential~~recent and future interest rate increases, ~~recent and potential further~~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; 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 ~~forecast~~forecasted or anticipated. Other factors and assumptions not identified above, including those discussed in “Management’s Discussion and Analysis of Financial Condition and Results

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of Operations,” in Item 2 and “Risk Factors” in Item 1A in this quarterly report and in similarly titled sections set forth in Item 7 and in Item 1A and in other portions of our ~~2021~~2022 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February ~~17, 2022~~16, 2023 (the ~~“2021~~“2022 Form 10-K”), may 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

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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 — FINANCIAL INFORMATION

Item 1. Financial Statements

Avis Budget Group, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(In millions, except per share data)

(Unaudited)

Three Months Ended
March 31,
2022 2021
Revenues $ 2,432 $ 1,372
Expenses
Operating 1,147 832
Vehicle depreciation and lease charges, net 111 254
Selling, general and administrative 283 182
Vehicle interest, net 77 75
Non-vehicle related depreciation and amortization 58 68
Interest expense related to corporate debt, net:
Interest expense 53 61
Early extinguishment of debt — 129
Restructuring and other related charges 8 20
Transaction-related costs, net — 1
Total expenses 1,737 1,622
Income (loss) before income taxes 695 (250)
Provision for (benefit from) income taxes 168 (80)
Net income (loss) 527 (170)
Less: net loss attributable to non-controlling interests (2) —
Net income (loss) attributable to Avis Budget Group, Inc. $ 529 $ (170)
Comprehensive income (loss) attributable to Avis Budget Group, Inc. $ 568 $ (146)
Earnings (loss) per share
Basic $ 9.96 $ (2.43)
Diluted $ 9.71 $ (2.43)


		Three Months Ended March 31,
		2023		2022
Revenues		$	2,557	$	2,432

Expenses
	Operating	1,307		1,147
	Vehicle depreciation and lease charges, net	265		111
	Selling, general and administrative	324		283
	Vehicle interest, net	133		77
	Non-vehicle related depreciation and amortization	56		58
	Interest expense related to corporate debt, net:
	Interest expense	73		53

	Restructuring and other related charges	4		8

	Other (income) expense, net	(2)		—
Total expenses		2,160		1,737

Income before income taxes		397		695
Provision for income taxes		85		168
Net income		312		527
	Less: net income (loss) attributable to non-controlling interests	—		(2)
Net income attributable to Avis Budget Group, Inc.		$	312	$	529

Comprehensive income attributable to Avis Budget Group, Inc.		$	302	$	568

Earnings per share
	Basic	$	7.88	$	9.96
	Diluted	$	7.72	$	9.71

See Notes to Consolidated Condensed Financial Statements (Unaudited).

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Avis Budget Group, Inc.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In millions, except par value)

(Unaudited)

March 31,
2022 December 31, 2021
Assets
Current assets:
Cash and cash equivalents $ 550 $ 534
Receivables, net 779 775
Other current assets 439 538
Total current assets 1,768 1,847
Property and equipment, net 531 537
Operating lease right-of-use assets 2,417 2,368
Deferred income taxes 1,540 1,615
Goodwill 1,096 1,108
Other intangibles, net 706 724
Other non-current assets 379 382
Total assets exclusive of assets under vehicle programs 8,437 8,581
Assets under vehicle programs:
Program cash 85 89
Vehicles, net 13,987 12,866
Receivables from vehicle manufacturers and other 182 222
Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party 882 842
15,136 14,019
Total Assets $ 23,573 $ 22,600
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and other current liabilities $ 2,675 $ 2,389
Short-term debt and current portion of long-term debt 27 19
Total current liabilities 2,702 2,408
Long-term debt 4,678 3,990
Long-term operating lease liabilities 1,918 1,910
Other non-current liabilities 585 625
Total liabilities exclusive of liabilities under vehicle programs 9,883 8,933
Liabilities under vehicle programs:
Debt 2,356 2,542
Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party 9,743 8,848
Deferred income taxes 2,323 2,242
Other 251 244
14,673 13,876
Commitments and contingencies (Note 12) 0 0
Stockholders’ equity:
Preferred stock, $0.01 par value—authorized 10 shares; NaNne issued and outstanding, respectively — —
Common stock, $0.01 par value—authorized 250 shares; issued 137 shares, respectively 1 1
Additional paid-in capital 6,646 6,676
Retained earnings (accumulated deficit) 344 (185)
Accumulated other comprehensive loss (94) (133)
Treasury stock, at cost— 87 and 81 shares, respectively (7,889) (6,579)
Stockholders’ equity attributable to Avis Budget Group, Inc. (992) (220)
Non-controlling interests 9 11
Total stockholders’ equity (983) (209)
Total Liabilities and Stockholders’ Equity $ 23,573 $ 22,600


		March 31, 2023		December 31, 2022
Assets
Current assets:
	Cash and cash equivalents	$	548	$	570
	Receivables, net	801		810
	Other current assets	634		506
Total current assets		1,983		1,886

Property and equipment, net		604		594
Operating lease right-of-use assets		2,350		2,405
Deferred income taxes		1,399		1,379
Goodwill		1,076		1,070
Other intangibles, net		659		666
Other non-current assets		440		499
Total assets exclusive of assets under vehicle programs		8,511		8,499

Assets under vehicle programs:
	Program cash	80		70
	Vehicles, net	17,434		15,961
	Receivables from vehicle manufacturers and other	353		421
	Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party	1,010		976
		18,877		17,428
Total Assets		$	27,388	$	25,927

Liabilities and Stockholders’ Equity
Current liabilities:
	Accounts payable and other current liabilities	$	2,715	$	2,547
	Short-term debt and current portion of long-term debt	34		27
Total current liabilities		2,749		2,574

Long-term debt		4,662		4,644
Long-term operating lease liabilities		1,852		1,884
Other non-current liabilities		497		554
Total liabilities exclusive of liabilities under vehicle programs		9,760		9,656

Liabilities under vehicle programs:
	Debt	2,571		2,534
	Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party	12,206		11,275
	Deferred income taxes	2,820		2,754
	Other	472		408
		18,069		16,971
Commitments and contingencies (Note 12)

Stockholders’ equity:
	Preferred stock, $0.01 par value—authorized 10 shares; none issued and outstanding, respectively	—		—
	Common stock, $0.01 par value—authorized 250 shares; issued 137 shares, respectively	1		1
	Additional paid-in capital	6,620		6,666
	Retained earnings	2,891		2,579
	Accumulated other comprehensive loss	(111)		(101)
	Treasury stock, at cost— 97 and 98 shares, respectively	(9,845)		(9,848)
Stockholders’ equity attributable to Avis Budget Group, Inc.		(444)		(703)
	Non-controlling interests	3		3
Total stockholders’ equity		(441)		(700)
Total Liabilities and Stockholders’ Equity		$	27,388	$	25,927

See Notes to Consolidated Condensed Financial Statements (Unaudited).

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Avis Budget Group, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


				Three Months Ended March 31,							Three Months Ended March 31,
				2022		2021					2023		2022
Operating activities	Operating activities							Operating activities
Net income (loss)				$	527	$	(170)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net income								Net income			$	312	$	527
Adjustments to reconcile net income to net cash provided by operating activities:								Adjustments to reconcile net income to net cash provided by operating activities:
		Vehicle depreciation		381		259			Vehicle depreciation		477		381
		Amortization of right-of-use assets		194		236			Amortization of right-of-use assets		251		194
		(Gain) loss on sale of vehicles, net		(303)		(49)			(Gain) loss on sale of vehicles, net		(250)		(303)
		Non-vehicle related depreciation and amortization		58		68			Non-vehicle related depreciation and amortization		56		58

		Stock-based compensation		6		4			Stock-based compensation		8		6
		Amortization of debt financing fees		8		8			Amortization of debt financing fees		9		8
		Early extinguishment of debt costs		—		129
		Net change in assets and liabilities:							Net change in assets and liabilities:
			Receivables	9		24				Receivables	34		9
			Income taxes and deferred income taxes	158		(80)				Income taxes and deferred income taxes	66		158
			Accounts payable and other current liabilities	303		181				Accounts payable and other current liabilities	82		303
		Operating lease liabilities		(195)		(234)			Operating lease liabilities		(250)		(195)
		Other, net		2		(40)			Other, net		24		2
Net cash provided by operating activities	Net cash provided by operating activities			1,148		336		Net cash provided by operating activities			819		1,148

Investing activities	Investing activities							Investing activities
Property and equipment additions	Property and equipment additions			(37)		(12)		Property and equipment additions			(44)		(37)
Proceeds received on asset sales	Proceeds received on asset sales			1		2		Proceeds received on asset sales			—		1
Net assets acquired (net of cash acquired)	Net assets acquired (net of cash acquired)			(1)		(4)		Net assets acquired (net of cash acquired)			(3)		(1)

Other, net	Other, net			23		—		Other, net			—		23
Net cash used in investing activities exclusive of vehicle programs	Net cash used in investing activities exclusive of vehicle programs			(14)		(14)		Net cash used in investing activities exclusive of vehicle programs			(47)		(14)

Vehicle programs:	Vehicle programs:							Vehicle programs:
		Investment in vehicles		(2,727)		(3,032)			Investment in vehicles		(3,880)		(2,727)
		Proceeds received on disposition of vehicles		1,616		1,679			Proceeds received on disposition of vehicles		2,283		1,616
		Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party		(84)		(24)			Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party		(105)		(84)
		Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party		44		25			Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party		71		44
				(1,151)		(1,352)					(1,631)		(1,151)
Net cash used in investing activities	Net cash used in investing activities			(1,165)		(1,366)		Net cash used in investing activities			(1,678)		(1,165)

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Avis Budget Group, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Continued)

(In millions)

(Unaudited)


			Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Financing activities	Financing activities						Financing activities
Proceeds from long-term borrowings	Proceeds from long-term borrowings		729		1,100		Proceeds from long-term borrowings		$	—	$	729
Payments on long-term borrowings	Payments on long-term borrowings		(5)		(1,101)		Payments on long-term borrowings		(7)		(5)

Net change in short-term borrowings							Net change in short-term borrowings		2		—

Repurchases of common stock	Repurchases of common stock		(1,299)		(19)		Repurchases of common stock		(51)		(1,299)
Debt financing fees	Debt financing fees		(6)		(12)		Debt financing fees		(2)		(6)

Net cash used in financing activities exclusive of vehicle programs	Net cash used in financing activities exclusive of vehicle programs		(581)		(32)		Net cash used in financing activities exclusive of vehicle programs		(58)		(581)

Vehicle programs:	Vehicle programs:						Vehicle programs:
		Proceeds from borrowings	4,016		3,481			Proceeds from borrowings	5,270		4,016
		Payments on borrowings	(3,403)		(2,535)			Payments on borrowings	(4,359)		(3,403)
		Debt financing fees	(2)		—			Debt financing fees	(12)		(2)
			611		946				899		611
Net cash provided by financing activities	Net cash provided by financing activities		30		914		Net cash provided by financing activities		841		30

Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash	Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash		(2)		(10)		Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash		5		(2)

Net increase (decrease) in cash and cash equivalents, program and restricted cash			11		(126)
Net (decrease) increase in cash and cash equivalents, program and restricted cash							Net (decrease) increase in cash and cash equivalents, program and restricted cash		(13)		11
Cash and cash equivalents, program and restricted cash, beginning of period	Cash and cash equivalents, program and restricted cash, beginning of period		626		765		Cash and cash equivalents, program and restricted cash, beginning of period		642		626
Cash and cash equivalents, program and restricted cash, end of period	Cash and cash equivalents, program and restricted cash, end of period		$	637	$	639	Cash and cash equivalents, program and restricted cash, end of period		$	629	$	637

See Notes to Consolidated Condensed Financial Statements (Unaudited).

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Avis Budget Group, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions)

(Unaudited)

~~(Unaudited)~~

Common Stock Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Treasury Stock Stockholders’ Equity Attributable to Avis Budget Group, Inc. Non-controlling Interests Total Stockholders’ Equity
Shares Amount Shares Amount
Balance at December 31, 2021 137.1 $ 1 $ 6,676 $ (185) $ (133) (81.2) $ (6,579) $ (220) $ 11 $ (209)
Comprehensive income (loss):
Net income (loss) — — — 529 — — — 529 (2) 527
Other comprehensive income — — — — 39 — — 39 — 39
Total comprehensive income (loss) 529 39 568 (2) 566
Net activity related to restricted stock units — — (30) — — 0.2 (3) (33) — (33)
Repurchase of common stock — — — — — (6.4) (1,307) (1,307) — (1,307)
Balance at March 31, 2022 137.1 $ 1 $ 6,646 $ 344 $ (94) (87.4) $ (7,889) $ (992) $ 9 $ (983)
Balance at December 31, 2020 137.1 $ 1 $ 6,668 $ (1,470) $ (187) (67.3) $ (5,167) $ (155) $ — $ (155)
Comprehensive income (loss):
Net loss — — — (170) — — — (170) — (170)
Other comprehensive income — — — — 24 — — 24 — 24
Total comprehensive income (loss) (170) 24 (146) — (146)
Net activity related to restricted stock units — — (26) — — 0.2 21 (5) — (5)
Repurchases of common stock — — — — — (0.1) (10) (10) — (10)
Balance at March 31, 2021 137.1 $ 1 $ 6,642 $ (1,640) $ (163) (67.2) $ (5,156) $ (316) $ — $ (316)


	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock				Stockholders’ Equity Attributable to Avis Budget Group, Inc.		Non-controlling Interests		Total Stockholders’ Equity
	Shares	Amount								Shares		Amount
Balance at December 31, 2022	137.1	$	1	$	6,666	$	2,579	$	(101)	(97.6)		$	(9,848)	$	(703)	$	3	$	(700)


Comprehensive income:
Net income	—	—		—		312		—		—		—		312		—		312
Other comprehensive loss	—	—		—		—		(10)		—		—		(10)		—		(10)
Total comprehensive income (loss)						312		(10)						302		—		302


Net activity related to restricted stock units	—	—		(46)		—		—		0.3		3		(43)		—		(43)

Balance at March 31, 2023	137.1	$	1	$	6,620	$	2,891	$	(111)	$	(97.3)	$	(9,845)	$	(444)	$	3	$	(441)

Balance at December 31, 2021	137.1	$	1	$	6,676	$	(185)	$	(133)	(81.2)		$	(6,579)	$	(220)	$	11	$	(209)

Comprehensive income:
Net income	—	—		—		529		—		—		—		529		(2)		527
Other comprehensive income	—	—		—		—		39		—		—		39		—		39
Total comprehensive income						529		39						568		(2)		566


Net activity related to restricted stock units	—	—		(30)		—		—		0.2		(3)		(33)		—		(33)
Repurchases of common stock	—	—		—		—		—		(6.4)		(1,307)		(1,307)		—		(1,307)
Balance at March 31, 2022	137.1	$	1	$	6,646	$	344	$	(94)	(87.4)		$	(7,889)	$	(992)	$	9	$	(983)

See Notes to Consolidated Condensed Financial Statements (Unaudited).

~~Table of Contents~~

Avis Budget Group, Inc.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)

(Unless otherwise noted, all dollar amounts in tables 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 unaudited Consolidated Condensed 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”), and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial reporting.

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 ~~certain~~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 ~~certain~~the areas in which we do not operate directly.

The operating results of acquired businesses are included in the accompanying Consolidated Condensed Financial Statements from the dates of acquisition. Differences between the preliminary allocation of purchase price and the final allocation for our ~~2021~~2022 acquisitions of various licensees were not material. We consolidate joint venture activities when we have ~~more than 50%~~a controlling ~~interests~~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.

In presenting the Consolidated Condensed Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the Consolidated Condensed Financial Statements contain all adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These financial statements should be read in conjunction with our ~~2021~~2022 Annual Report on Form 10-K (the ~~“2021~~“2022 Form 10-K”).

Summary of Significant Accounting Policies

Our significant accounting policies are fully described in Note 2 ~~“Summary~~– Summary of Significant Accounting Policies” in our ~~2021~~2022 Form 10-K.

Cash and cash equivalents, Program cash and Restricted cash. The following table provides a detail of cash and cash equivalents, program and restricted cash reported within the Consolidated Condensed Balance Sheets to the amounts shown in the Consolidated Condensed Statements of Cash Flows.


		As of March 31,					As of March 31,
		2022		2021			2023		2022
Cash and cash equivalents	Cash and cash equivalents	$	550	$	576	Cash and cash equivalents	$	548	$	550
Program cash	Program cash	85		61		Program cash	80		85
Restricted cash (a)	Restricted cash (a)	2		2		Restricted cash (a)	1		2
Total cash and cash equivalents, program and restricted cash	Total cash and cash equivalents, program and restricted cash	$	637	$	639	Total cash and cash equivalents, program and restricted cash	$	629	$	637

________

(a)Included within other current assets.

~~Table of Contents~~

Vehicle Programs. 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.

Transaction-related costs, net. Transaction-related costs, net are classified separately in the Consolidated Condensed Statements of Comprehensive Income. 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 those of our operations, 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.

Currency Transactions. We record the gain or loss on foreign currency transactions on certain intercompany loans and the gain or loss on intercompany loan hedges within interest expense related to corporate debt, net.

Divestitures. 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 three months ended March 31, 2022, we recorded a gain of $2 million within restructuring and other related charges.

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 three months ended March 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 were reported within our International reporting segment.

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 14 – Related Party Transactions for our VIE investment in our former subsidiary.

Investments. As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, we had equity method investments with a carrying value of ~~$71~~ $80 million a~~nd $72~~and $77 million, respectively, which are ~~recorded within~~included in other non-current assets. Earnings from our equity method investments are ~~reported~~included within operating expenses. For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, we recorded an immaterial amount related to our equity method investments, in each period. See Note 14 – Related Party Transactions for our equity method investment in our former subsidiary.

Revenues. 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 ~~$34~~$44 million a~~nd $40~~and $34 million during the three months ended March 31, 2023 and 2022, ~~and 2021, respectively~~.respectively.

The following table presents our revenues disaggregated by geography:

Three Months Ended
March 31,
2022 2021
Americas $ 2,000 $ 1,080
Europe, Middle East and Africa 324 203
Asia and Australasia 108 89
Total revenues $ 2,432 $ 1,372

~~Table of Contents~~


	Three Months Ended March 31,
	2023		2022
Americas	$	2,016	$	2,000
Europe, Middle East and Africa	367		324
Asia and Australasia	174		108
Total revenues	$	2,557	$	2,432

The following table presents our revenues disaggregated by brand:


		Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021			2023		2022
Avis	Avis	$	1,281	$	717	Avis	$	1,415	$	1,281
Budget	Budget	982		524		Budget	977		982
Other	Other	169		131		Other	165		169
Total revenues	Total revenues	$	2,432	$	1,372	Total revenues	$	2,557	$	2,432

________

Other includes Zipcar and other operating brands.

Recently Issued Accounting Pronouncements

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“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~~became effective for us on January 1, 2023. ~~Early adoption is permitted on a retrospective or prospective basis.~~ The adoption of this accounting pronouncement isdid not ~~expected to~~ have a material impact on our Consolidated Condensed 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 March 31, 2022, this guidance had no impact on our Consolidated Condensed Financial Statements and we will continue to evaluate this guidance.

2. Leases

Lessor

The following table presents our lease revenues disaggregated by geography:


		Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021			2023		2022
Americas	Americas	$	1,985	$	1,054	Americas	$	1,995	$	1,985
Europe, Middle East and Africa	Europe, Middle East and Africa	309		192		Europe, Middle East and Africa	349		309
Asia and Australasia	Asia and Australasia	104		86		Asia and Australasia	169		104
Total lease revenues	Total lease revenues	$	2,398	$	1,332	Total lease revenues	$	2,513	$	2,398

~~Table of Contents~~

The following table presents our lease revenues disaggregated by brand:


		Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021			2023		2022
Avis	Avis	$	1,261	$	690	Avis	$	1,388	$	1,261
Budget	Budget	972		516		Budget	964		972
Other	Other	165		126		Other	161		165
Total lease revenues	Total lease revenues	$	2,398	$	1,332	Total lease revenues	$	2,513	$	2,398

_______

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 Right of Use (“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.

The components of lease expense are as follows:


		Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021			2023		2022
Property leases (a)	Property leases (a)					Property leases (a)
Operating lease expense	Operating lease expense	$	161	$	139	Operating lease expense	$	205	$	161
Variable lease expense	Variable lease expense	102		54		Variable lease expense	83		102
Total property lease expense	Total property lease expense	$	263	$	193	Total property lease expense	$	288	$	263

__________

(a) Primarily within operating ~~expense and includes~~ ~~$(7) million~~ ~~and $19 million for the three months ended March 31, 2022 and 2021, respectively, of minimum annual guaranteed rent in excess of concession fees, net, as defined in our rental concession agreements.~~expenses.

Supplemental balance sheet information related to leases is as follows:


		As of March 31, 2022			As of December 31, 2021				As of March 31, 2023			As of December 31, 2022
Property leases	Property leases							Property leases
Operating lease ROU assets	Operating lease ROU assets	$	2,417		$	2,368		Operating lease ROU assets	$	2,350		$	2,405

Short-term operating lease liabilities (a)	Short-term operating lease liabilities (a)	$	536		$	496		Short-term operating lease liabilities (a)	$	533		$	555
Long-term operating lease liabilities	Long-term operating lease liabilities	1,918			1,910			Long-term operating lease liabilities	1,852			1,884
Operating lease liabilities	Operating lease liabilities	$	2,454		$	2,406		Operating lease liabilities	$	2,385		$	2,439

Weighted average remaining lease term	Weighted average remaining lease term	8.6 years			8.8 years			Weighted average remaining lease term	8.2 years			8.2 years
Weighted average discount rate	Weighted average discount rate	3.81		%	3.84		%	Weighted average discount rate	4.39		%	4.30		%

_________

(a) Included in a~~Accounts~~ccounts payable and other current liabilities.

~~Table of Contents~~

Supplemental cash flow information related to leases is as follows:


		Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021			2023		2022
Cash payments for lease liabilities within operating activities:	Cash payments for lease liabilities within operating activities:					Cash payments for lease liabilities within operating activities:
Property operating leases	Property operating leases	$	164	$	202	Property operating leases	$	210	$	164
Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:	Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:					Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:
Property operating leases	Property operating leases	$	213	$	169	Property operating leases	$	154	$	213

3. Restructuring and Other Related Charges

~~Restructuring~~

During ~~the first~~second quarter ~~of 2021,~~2022, we initiated a ~~global~~ restructuring plan to focus on ~~cost discipline~~consolidating our global operations by ~~reviewing headcounts, facilities~~designing new processes and ~~contractor agreements. We are transforming our business as we prepare to exit the COVID-19 crisis by controlling fixed costs and matching variable costs to demand~~implementing new systems (“~~T21”~~Cost Optimization”). ~~During the quarter ended~~As of March 31, ~~2022,~~2023, we formally communicated the termination of employment to approximately 45 265 employees as part of this process, and terminated approximately 40225 of these employees. We expect no further restructuring expense of approximately $2 million related to this initiative to be incurred ~~in 2022 under~~ this ~~program.~~year.

The following ~~tables summarize the changes~~table presents our restructuring liabilities and related activities by reportable segment as it relates to our ~~restructuring-related liabilities and identifies the amounts recorded within our reporting segments for restructuring charges and corresponding payments and utilizations:~~Cost Optimization plan, which are all personnel related in nature:

Americas International Total
Balance as of January 1, 2022 $ 2 $ 8 $ 10
Restructuring expense:
T21 1 2 3
Restructuring payment/utilization:
T21 (1) (6) (7)
Balance as of March 31, 2022 $ 2 $ 4 $ 6
Personnel Facility
Related
Other (a)
Total
Balance as of January 1, 2022 $ 7 $ 2 $ 1 $ 10
Restructuring expense:
T21 3 — — 3
Restructuring payment/utilization:
T21 (6) (1) — (7)
Balance as of March 31, 2022 $ 4 $ 1 $ 1 $ 6

~~_________~~

~~(a)Includes expenses primarily related to the disposition of vehicles.~~


		Americas		International		Total
Balance as of January 1, 2023		$	1	$	3	$	4
	Restructuring expense	3		1		4
	Restructuring payments and utilization	(2)		(2)		(4)
Balance as of March 31, 2023		$	2	$	2	$	4

~~Table of Contents~~

4. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (“EPS”) (shares in millions):


			Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Net income (loss) attributable to Avis Budget Group, Inc. for basic and diluted EPS			$	529	$	(170)
Net income attributable to Avis Budget Group, Inc. for basic and diluted EPS							Net income attributable to Avis Budget Group, Inc. for basic and diluted EPS		$	312	$	529

Basic weighted average shares outstanding	Basic weighted average shares outstanding		53.1		69.9		Basic weighted average shares outstanding		39.6		53.1
Non-vested stock (a)	Non-vested stock (a)		1.4		—		Non-vested stock (a)		0.8		1.4
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding		54.5		69.9		Diluted weighted average shares outstanding		40.4		54.5

Earnings (loss) per share:
Earnings per share:							Earnings per share:
		Basic	$	9.96	$	(2.43)		Basic	$	7.88	$	9.96
		Diluted	$	9.71	$	(2.43)		Diluted	$	7.72	$	9.71

~~__________~~________

(a)For the three months ended March 31, 2023 and 2022, ~~and 2021~~, 0.1 ~~million and 1.1~~ million non-vested stock awards, ~~respectively,~~in each period, have an anti-dilutive effect and therefore are excluded from the computation of diluted weighted average shares outstanding.

5. Other Current Assets

Other current assets consisted of:


		As of March 31, 2022		As of December 31, 2021			As of March 31, 2023		As of December 31, 2022
Prepaid expenses	Prepaid expenses	$	246	$	205	Prepaid expenses	$	274	$	252
Sales and use taxes	Sales and use taxes	106		238		Sales and use taxes	199		142
Other	Other	87		95		Other	161		112
Other current assets	Other current assets	$	439	$	538	Other current assets	$	634	$	506

6. Intangible Assets

Intangible assets consisted of:


		As of March 31, 2022						As of December 31, 2021							As of March 31, 2023						As of December 31, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized Intangible Assets	Amortized Intangible Assets													Amortized Intangible Assets
License agreements	License agreements	$	295	$	203	$	92	$	298	$	193	$	105	License agreements	$	291	$	222	$	69	$	290	$	217	$	73
Customer relationships	Customer relationships	253		204		49		257		204		53		Customer relationships	249		211		38		247		207		40
Other	Other	49		36		13		51		36		15		Other	48		41		7		48		39		9
Total	Total	$	597	$	443	$	154	$	606	$	433	$	173	Total	$	588	$	474	$	114	$	585	$	463	$	122
Unamortized Intangible Assets	Unamortized Intangible Assets													Unamortized Intangible Assets
Goodwill	Goodwill	$	1,096					$	1,108					Goodwill	$	1,076					$	1,070
Trademarks	Trademarks	$	552					$	551					Trademarks	$	545					$	544

For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, amortization expense related to amortizable intangible assets was approximat~~ely~~ely $8 million and $16 ~~million and $18~~ million, respectively. Based on our amortizable intangible assets at March 31, ~~2022,~~2023, we expect amortization expense of approximately ~~$30~~$19 million for the remainder of ~~2022,~~ ~~$27~~2023, $22 million ~~for 2023,~~ ~~$23 million~~ for 2024, ~~$16~~$16 million for 2025, ~~$15~~$15 million for 2026, ~~and~~ ~~$12~~$11 million for 2027 and $9 million for 2028, excluding effects of currency exchange rates.

~~Table of Contents~~

7. Vehicle Rental Activities

The components of vehicles, net within assets under vehicle programs ~~were~~are as follows:


		As of		As of			As of		As of
		March 31,		December 31,			March 31,		December 31,
		2022		2021			2023		2022
Rental vehicles	Rental vehicles	$	15,768	$	14,612	Rental vehicles	$	19,365	$	17,819
Less: Accumulated depreciation	Less: Accumulated depreciation	(1,955)		(1,911)		Less: Accumulated depreciation	(2,244)		(2,211)
		13,813		12,701			17,121		15,608
Vehicles held for sale	Vehicles held for sale	174		165		Vehicles held for sale	277		317
Vehicles, net investment in lease (a)						Vehicles, net investment in lease (a)	36		36
Vehicles, net	Vehicles, net	$	13,987	$	12,866	Vehicles, net	$	17,434	$	15,961

________

(a) See Note 14 – Related Party Transactions.

The components of vehicle depreciation and lease charges, net are summarized below:


		Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021			2023		2022
Depreciation expense	Depreciation expense	$	381	$	259	Depreciation expense	$	477	$	381
Lease charges	Lease charges	33		44		Lease charges	38		33
(Gain) loss on sale of vehicles, net	(Gain) loss on sale of vehicles, net	(303)		(49)		(Gain) loss on sale of vehicles, net	(250)		(303)
Vehicle depreciation and lease charges, net	Vehicle depreciation and lease charges, net	$	111	$	254	Vehicle depreciation and lease charges, net	$	265	$	111

At March 31, ~~2022~~2023 and ~~2021,~~2022, we had payables related to vehicle purchases included in liabilities under vehicle programs - other of ~~$150~~$314 million and ~~$344~~$150 million, respectively, and receivables related to vehicle sales included in assets under vehicle programs - receivables from vehicle manufacturers and ~~oth~~erother of $137 million and $64 million, a~~nd $195 million,~~ respectively.

8. Income Taxes

Our effective tax rate for the three months ended March 31, ~~2022 and 2021 were~~2023 was a provision ~~and (benefit)~~ o~~f 24.2%~~ an~~d (32.0)%, respectively.~~of 21.4%. Such ~~rates~~rate differed from the Federal Statutory rate of 21.0% primarily due to foreign taxes on our International operations and state taxes, partially offset by the effect of certain tax credits and the favorable adjustments related to stock-based compensation.

Our effective tax rate for the three months ended March 31, 2022 was a provision of 24.2%. Such rate differed from the Federal Statutory rate of 21.0% primarily due to foreign taxes on our International operations and state taxes.

9. Accounts Payable and Other Current Liabilities

Accounts payable and other current liabilities consisted of:


		As of		As of			As of		As of
		March 31,		December 31,			March 31,		December 31,
		2022		2021			2023		2022
Accounts payable						Accounts payable	$	510	$	466
Short-term operating lease liabilities	Short-term operating lease liabilities	$	536	$	496	Short-term operating lease liabilities	533		555
Accounts payable		513		407
Deferred lease revenues - current	Deferred lease revenues - current	322		185		Deferred lease revenues - current	302		188
Accrued advertising and marketing	Accrued advertising and marketing	248		218		Accrued advertising and marketing	289		268
Accrued sales and use taxes	Accrued sales and use taxes	225		313		Accrued sales and use taxes	267		246
Accrued payroll and related	Accrued payroll and related	175		193		Accrued payroll and related	187		205
Public liability and property damage insurance liabilities - current		160		159
Public liability and property damage insurance liabilities – current						Public liability and property damage insurance liabilities – current	171		174
Other	Other	496		418		Other	456		445
Accounts payable and other current liabilities	Accounts payable and other current liabilities	$	2,675	$	2,389	Accounts payable and other current liabilities	$	2,715	$	2,547

~~Table of Contents~~

10.Long-term Corporate Debt and Borrowing Arrangements

Long-term corporate debt and borrowing arrangements consisted of:


				As of				As of							As of				As of
		Maturity Date		March 31,				December 31,				Maturity Date			March 31,				December 31,
			2022			2021								2023			2022
4.125% euro-denominated Senior Notes	4.125% euro-denominated Senior Notes		November 2024			$	332			$	341		4.125% euro-denominated Senior Notes	November 2024			$	325			$	321
4.500% euro-denominated Senior Notes	4.500% euro-denominated Senior Notes	May 2025		277				284		4.500% euro-denominated Senior Notes		May 2025			271				268
4.750% euro-denominated Senior Notes	4.750% euro-denominated Senior Notes	January 2026		387				398		4.750% euro-denominated Senior Notes		January 2026			379				375
5.750% Senior Notes	5.750% Senior Notes	July 2027		729				728		5.750% Senior Notes		July 2027			733				732
4.750% Senior Notes	4.750% Senior Notes	April 2028		500				500		4.750% Senior Notes		April 2028			500				500
5.375% Senior Notes	5.375% Senior Notes	March 2029		600				600		5.375% Senior Notes		March 2029			600				600
Floating Rate Term Loan (a)	Floating Rate Term Loan (a)	August 2027		1,184				1,187		Floating Rate Term Loan (a)		August 2027			1,173				1,176
Floating Rate Term Loan(b)	Floating Rate Term Loan(b)	March 2029		729				—		Floating Rate Term Loan(b)		March 2029			724				725
Other ~~(b)~~(c)	Other ~~(b)~~(c)			20				19		Other ~~(b)~~(c)					34				18
Deferred financing fees	Deferred financing fees			(53)				(48)		Deferred financing fees					(43)				(44)
Total	Total			4,705				4,009		Total					4,696				4,671
Less: Short-term debt and current portion of long-term debt	Less: Short-term debt and current portion of long-term debt			27				19		Less: Short-term debt and current portion of long-term debt					34				27
Long-term debt	Long-term debt			$	4,678			$	3,990	Long-term debt					$	4,662			$	4,644

__________

(a)The floating rate term loan is part of our senior revolving credit facility, which is 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. As of March 31, ~~2022,~~2023, the floating rate term loan due 2027 bears interest at one-month LIBOR plus 175 basis points, for an aggregate rate of ~~2.21%~~6.60%. We have entered into a swap to hedge $700 million of its interest rate exposure related to the floating rate term loan at an aggregate rate of 4.75%.

(b)~~Primarily includes finance leases which are secured by liens on the related assets.~~

~~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~~The floating rate term loan is part of our senior revolving credit ~~facilities. The Floating Rate Term Loan~~facility, which is 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. As of March 31, 2023, the floating rate term loan due ~~March~~ 2029 bears interest at one-month Secured Overnight Financing Rate (“SOFR”) plus 350 basis points for an aggregate rate of ~~4.00%~~8.41%.

(c)Primarily includes finance leases, which are secured by liens on the related assets.

Committed Credit Facilities and Available Funding Arrangements

As of March 31, ~~2022,~~2023, the committed corporate credit facilities available to us and/or our subsidiaries were as follows:

Total
Capacity Outstanding
Borrowings Letters of Credit Issued Available
Capacity
Senior revolving credit facility maturing 2026 (a)
$ 1,950 $ — $ 1,596 $ 354


	Total Capacity		Outstanding Borrowings		Letters of Credit Issued		Available Capacity
Senior revolving credit facility maturing 2026 (a)	$	2,000	$	—	$	1,123	$	877

__________

(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, 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 March 31, ~~2022,~~2023, we were in compliance with the financial covenants governing our indebtedness.

~~Table of Contents~~

11. 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		As of			As of		As of
		March 31,		December 31,			March 31,		December 31,
		2022		2021			2023		2022
Americas - Debt due to Avis Budget Rental Car Funding	Americas - Debt due to Avis Budget Rental Car Funding	$	9,779	$	8,889	Americas - Debt due to Avis Budget Rental Car Funding	$	12,259	$	11,322
Americas - Debt borrowings	Americas - Debt borrowings	615		612		Americas - Debt borrowings	739		598
International - Debt borrowings	International - Debt borrowings	1,573		1,757		International - Debt borrowings	1,608		1,700
International - Finance leases	International - Finance leases	156		177		International - Finance leases	175		176
Other	Other	19		3		Other	53		65
Deferred financing fees (a)	Deferred financing fees (a)	(43)		(48)		Deferred financing fees (a)	(57)		(52)
Total	Total	$	12,099	$	11,390	Total	$	14,777	$	13,809

__________

(a)Deferred financing fees related to Debt due to Avis Budget Rental Car Funding as of March 31, ~~2022~~2023 and December 31, ~~2021~~2022 were ~~$36~~$53 million and ~~$41~~$47 million, respectively.

In January 2023, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued $500 million and $350 million of asset-backed notes to investors with an expected final payment date of April 2028 and October 2026, respectively, and a weighted average interest rate of 5.36% and 5.31%, respectively.

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 March 31, ~~2022:~~2023:


	Debt under Vehicle Programs (a)
Within 1 year (b)	$	~~2,145~~2,489
Between 1 and 2 years (c)	~~1,413~~5,803
Between 2 and 3 years (d)	~~5,545~~2,596
Between 3 and 4 years	~~1,532~~2,071
Between 4 and 5 years	~~1,507~~1,414
Thereafter	461
Total	$	~~12,142~~14,834

__________

(a) Vehicle-backed debt primarily represents asset-backed securities.

(b) Includes ~~$0.8~~$1.2 billion of bank and bank-sponsored facilities.

(d) Includes ~~$3.8~~$0.1 billion of bank and bank-sponsored ~~facilities.~~facilities.

Committed Credit Facilities and Available Funding Arrangements

As of March 31, ~~2022,~~2023, available funding under our debt arrangements related to our vehicle programs, including related party debt due to Avis Budget Rental Car Funding, consisted of:


		Total Capacity (a)		Outstanding Borrowings (b)		Available Capacity			Total Capacity (a)		Outstanding Borrowings (b)		Available Capacity
Americas - Debt due to Avis Budget Rental Car Funding	Americas - Debt due to Avis Budget Rental Car Funding	$	10,103	$	9,779	$	324	Americas - Debt due to Avis Budget Rental Car Funding	$	13,243	$	12,259	$	984
Americas - Debt borrowings	Americas - Debt borrowings	985		615		370		Americas - Debt borrowings	962		739		223
International - Debt borrowings	International - Debt borrowings	2,590		1,573		1,017		International - Debt borrowings	2,649		1,608		1,041
International - Finance leases	International - Finance leases	192		156		36		International - Finance leases	211		175		36
Other	Other	19		19		—		Other	54		53		1
Total	Total	$	13,889	$	12,142	$	1,747	Total	$	17,119	$	14,834	$	2,285

__________

(a) Capacity is subject to maintaining sufficient assets to collateralize debt. The total capacity for Americas - Debt due to Avis Budget Rental Car Funding includes increases from an amendment and renewal of our asset-backed variable-funding financing facilities during March 2023.

(b) The outstanding debt is collateralized by vehicles and related assets of ~~$11.5~~$14.3 billion for Americas - Debt due to Avis Budget Rental Car Funding; ~~$0.9~~$1.1 billion for Americas - Debt borrowings; ~~$2.0~~$2.5 billion for International - Debt borrowings; and $0.2 billion for International - Finance leases.

~~Table of Contents~~

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 March 31, ~~2022,~~2023, 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.

12. Commitments and Contingencies

Contingencies

In 2006, we completed the spin-offs of our Realogy and Wyndham ~~subsidiaries.~~subsidiaries (now known as Anywhere Real Estate, Inc., and Wyndham Hotels and Resorts, Inc. and Travel + Leisure Co., respectively). 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~~Anywhere Real Estate, Inc., Wyndham Hotels and ~~Wyndham each~~Resorts, Inc. and Travel + Leisure Co. have agreed to assume responsibility for these liabilities.

In March 2023, the California Office of Tax Appeals (“OTA”) issued an opinion in a case involving notices of proposed assessment of California corporation franchise tax for tax year 1999 issued to us. The case involves whether (i) the notices of proposed assessment were barred by the statute of limitations; and (ii) a transaction undertaken by us in tax year 1999 constituted a tax-free reorganization under the Internal Revenue Code (“IRC”). The OTA concluded that the notices of proposed assessment were not barred by the statute of limitations and that the 1999 transaction was not a tax-free reorganization under the IRC. Anywhere Real Estate, Inc. has assumed 62.5%, and Wyndham Hotels and Resorts, Inc. and Travel + Leisure Co. have assumed 37.5% of the potential tax liability in this matter, respectively. We have filed a petition for rehearing and intend to vigorously pursue this matter.

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~~sought to represent a purported nationwide class and 2two sub-classes of certain renters of vehicles from our Avis and Budget subsidiaries from April 2007 through December 2015. The plaintiff ~~seeks~~sought 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 ~~are currently engaged in~~have entered into a settlement ~~discussions.~~agreement and the Court has entered a final order approving the settlement. We have also been named as a defendant in other purported consumer class action ~~law suits,~~lawsuits, 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 a ~~motion for preliminary approval of~~final order approving a ~~proposed settlement has been filed with the Court.~~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 $35 million in excess of amounts accrued as of March 31, ~~2022.~~2023. 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 $5.1~~approximately $9.3 billion of vehicles from manufacturers over the next 12 months, a ~~$0.8~~$2.6 billion ~~decrease~~increase compared to December 31, ~~2021,~~ 2022, 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.

~~Table of Contents~~

Concentrations

Concentrations of credit risk as of March 31, ~~2022~~2023 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 payment from the manufacturers and (ii) risks related to Realogy and Wyndham, including receivables of ~~$26~~$36 million and ~~$16~~$21 million, ~~resp~~respectively, related to certain contingent, income tax and other corporate liabilities assumed by Realogy and Wyndham in connection with their disposition.

13. ~~Stockholders’~~Stockholders' Equity

Share Repurchases

Our Board of Directors has authorized the repurchase of up to ~~$5.1~~$8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded most recently in ~~March 2022~~February 2023 (the “Stock Repurchase Program”). During the three months ended March 31, ~~2022, we repurchased approximately~~2023, ~~6.4 million~~ ~~shares of~~no common stock ~~at a cost of approximately~~ ~~$1.3 billion~~repurchases were made under the ~~program.~~program. As of March 31, ~~2022,~~2023, approximately $~~652 million~~1.7 billion of authorization remains available to repurchase common stock under the program.

Total Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income ~~(loss)~~ and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net ~~income (loss).~~income.

The components of other comprehensive income (loss) were as follows:

Three Months Ended
March 31,
2022 2021
Net income (loss) $ 527 $ (170)
Less: net loss attributable to non-controlling interests (2) —
Net income (loss) attributable to Avis Budget Group, Inc. 529 (170)
Other comprehensive income (loss):
Currency translation adjustments (net of tax of $(3) and $(12), respectively) 7 (14)
Net unrealized gain (loss) on cash flow hedges (net of tax of $(11) and $3, respectively) 30 35
Minimum pension liability adjustment (net of tax of $0 and $0, respectively) 2 3
39 24
Comprehensive income (loss) attributable to Avis Budget Group, Inc. $ 568 $ (146)


		Three Months Ended March 31,
		2023		2022
Net income		$	312	$	527
	Less: net income (loss) attributable to non-controlling interests	—		(2)
Net income attributable to Avis Budget Group, Inc.		312		529
Other comprehensive income (loss):
	Currency translation adjustments (net of tax of $3 and $(3), respectively)	(4)		7
	Net unrealized gain (loss) on cash flow hedges (net of tax of $2 and $(11), respectively)	(7)		30
	Minimum pension liability adjustment (net of tax of $0, in each period)	1		2
		(10)		39
Comprehensive income attributable to Avis Budget Group, Inc.		$	302	$	568

__________

Currency translation adjustments exclude income taxes related to indefinite investments in foreign subsidiaries.

~~Table of Contents~~

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) were as follows:


													Currency Translation Adjustments		Net Unrealized Gains (Losses) on Cash Flow Hedges(a)		Minimum Pension Liability Adjustment(b)		Accumulated Other Comprehensive Income (Loss)
Balance, January 1, 2023											Balance, January 1, 2023		$	(30)	$	45	$	(116)	$	(101)
												Other comprehensive income (loss) before reclassifications	(4)		(5)		—		(9)
												Amounts reclassified from accumulated other comprehensive income	—		(2)		1		(1)
Net current-period other comprehensive income (loss)											Net current-period other comprehensive income (loss)		(4)		(7)		1		(10)
Balance, March 31, 2023											Balance, March 31, 2023		$	(34)	$	38	$	(115)	$	(111)
			Currency Translation Adjustments		Net Unrealized Gains (Losses) on Cash Flow Hedges(a)		Minimum Pension Liability Adjustment(b)		Accumulated Other Comprehensive Income (Loss)
Balance, January 1, 2022	Balance, January 1, 2022		$	16	$	(19)	$	(130)	$	(133)	Balance, January 1, 2022		$	16	$	(19)	$	(130)	$	(133)
		Other comprehensive income (loss) before reclassifications	7		26		—		33			Other comprehensive income (loss) before reclassifications	7		26		—		33
		Amounts reclassified from accumulated other comprehensive income (loss)	—		4		2		6			Amounts reclassified from accumulated other comprehensive income	—		4		2		6
Net current-period other comprehensive income (loss)	Net current-period other comprehensive income (loss)		7		30		2		39		Net current-period other comprehensive income (loss)		7		30		2		39
Balance, March 31, 2022	Balance, March 31, 2022		$	23	$	11	$	(128)	$	(94)	Balance, March 31, 2022		$	23	$	11	$	(128)	$	(94)

Balance, January 1, 2021			$	40	$	(51)	$	(176)	$	(187)
		Other comprehensive income (loss) before reclassifications	(14)		32		1		19
		Amounts reclassified from accumulated other comprehensive income (loss)	—		3		2		5
Net current-period other comprehensive income (loss)			(14)		35		3		24
Balance, March 31, 2021			$	26	$	(16)	$	(173)	$	(163)

__________

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 and include ~~$90~~$105 million gain, net of tax, as of March 31, ~~2022~~2023 related to our hedge of our investment in euro-denominated foreign ~~operatio~~nsoperations (see Note ~~16–~~16 – Financial Instruments).

(a)For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, the amounts reclassified from accumulated other comprehensive income (loss) into corporate interest expense were $3 million ($2 million, net of tax) and $5 million ($4 million, net ~~of tax) and~~ ~~$1 million ($0 million, net~~ of tax), respectively. ~~For the three months ended March 31, 2021, the amount reclassified from accumulated other comprehensive income (loss) into vehicle interest expense was $4 million ($3 million, net of tax).~~

(b)For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, amounts reclassified from accumulated other comprehensive income (loss) into selling, general and administrative expenses were $3$1 million ($21 million,, net of tax) and $3 million ($2 million, net of tax), respectively.

14. 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 began reporting our proportional share of the former subsidiary’s income or loss within other (income) expense, net in our Consolidated Condensed Statements of Comprehensive Income as we no longer 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.

We continue to provide vehicles, related fleet services and certain administrative services to AMV to support their operations. For the three months ended March 31, 2023, we recorded $8 million of related income within other (income) expense, net. As of March 31, 2023 and December 31, 2022, receivables from AMV related to these services were $4 million and $6 million, respectively, and our net investment in vehicle finance lease with AMV, which is included in vehicles, net, was $36 million, in each period. The carrying value of our equity investment in AMV as of March 31, 2023 and December 31, 2022 was approximately $43 million and $49 million, respectively, which is included in other non-current assets. For the three months ended March 31, 2023, we recorded losses of $6 million within other (income) expense, net related to our equity investment.

15. Stock-Based Compensation

We recorded stock-based compensation expense of $8 million and $6 million ($6 million and ~~$4 million ($~~$4 million ~~and $3 million,~~, net of tax) during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

In 2020, we granted market-based restricted stock units (“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 as follows:


Expected volatility of stock price						91%
Risk-free interest rate						0.18%
Valuation period						3 years
Dividend yield						—%

2021

~~Table of Contents~~

The activity related to RSUs consisted of (in thousands of shares):


				Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)					Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)
Time-based RSUs	Time-based RSUs									Time-based RSUs
		Outstanding at January 1, 2022		671	$	39.39					Outstanding at January 1, 2023		451	$	92.06
			Granted (a)	67	194.74							Granted (a)	71	208.84
			Vested (b)	(260)	34.00							Vested (b)	(191)	49.13
			Forfeited	(6)	36.03							Forfeited	—	—
		Outstanding and expected to vest at March 31, 2022 (c)		472	$	64.49	1.1	$	124		Outstanding and expected to vest at March 31, 2023 (c)		331	$	141.90	1.7	$	64
Performance-based and market-based RSUs	Performance-based and market-based RSUs									Performance-based and market-based RSUs
		Outstanding at January 1, 2022		886	$	35.40					Outstanding at January 1, 2023		691	$	57.56
			Granted (a)	96	194.74							Granted (a)	88	208.84
			Vested (b)	(163)	34.82							Vested (b)	(344)	21.09
			Forfeited	(15)	32.42							Forfeited	—	—
		Outstanding at March 31, 2022		804	$	54.58	1.5	$	212		Outstanding at March 31, 2023		435	$	116.95	1.4	$	85
		Outstanding and expected to vest at March 31, 2022 (c)		796	$	53.17	1.5	$	210		Outstanding and expected to vest at March 31, 2023 (c)		404	$	110.22	1.4	$	79

__________

(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. The weighted-average fair value of time-based RSUs and performance-based RSUs granted during the three months ended March 31, ~~2021 was $63.12 and $62.27, respectively.~~2022 was $194.74.

(b)The total fair value of RSUs vested during the three months ended March 31, 2023 and 2022 was $17 million and ~~2021 was $15~~$15 million ~~and $11 million,~~, respectively.

(c)Aggregate unrecognized compensation expense related to time-based RSUs and performance-based and market-based RSUs ~~amounted~~amounted to ~~$55~~ $69 million and will be recognized over a weighted average vesting period of ~~1.4 years.~~1.5 years.

16. Financial Instruments

Derivative Instruments and Hedging Activities

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 $9$18 million of gain curr ~~of losses currently~~ently recorded in accumulated other comprehensive income (loss) will be recognized in earnings over the next 12 months.

2122

~~Table of Contents~~

Commodity Risk. We periodically enter into derivative commodity contracts to manage our exposure to ~~changes~~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.

We held derivative instruments with absolute notional values as follows:


	As of March 31, ~~2022~~2023
Foreign exchange contracts	$	~~1,914~~1,224
Interest rate caps (a)	~~11,724~~14,520
Interest rate swaps	1,450

__________

(a)Represents ~~$7.1~~$10.0 billion of interest rate caps sold, partially offset by approximately $4.6 billion of interest rate caps purchased. These amounts exclude ~~$3.0~~$6.2 billion of interest rate caps purchased by our Avis Budget Rental Car Funding subsidiary as it is not consolidated by us.

Estimated fair values (Level 2) of derivative instruments ~~were~~are as follows:


			As of March 31, 2022				As of December 31, 2021						As of March 31, 2023				As of December 31, 2022
			Fair Value, Derivative Assets		Fair Value, Derivative Liabilities		Fair Value, Derivative Assets		Fair Value, Derivative Liabilities				Fair Value, Asset Derivatives		Fair Value, Derivative Liabilities		Fair Value, Derivative Assets		Fair Value, Derivative Liabilities
Derivatives designated as hedging instruments	Derivatives designated as hedging instruments										Derivatives designated as hedging instruments
		Interest rate swaps (a)	$	24	$	9	$	2	$	27		Interest rate swaps (a)	$	52	$	—	$	61	$	—

Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments										Derivatives not designated as hedging instruments
		Foreign exchange contracts (b)	5		7		7		10			Foreign exchange contracts (b)	3		1		4		6
		Interest rate caps (c)	30		48		11		15			Interest rate caps (c)	45		98		46		111

		Total	$	59	$	64	$	20	$	52		Total	$	100	$	99	$	111	$	117

__________

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 ~~13–Stockholders’~~13 – 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.

The effects of derivatives recognized in our Consolidated Condensed Financial Statements ~~were~~are as follows:

Three Months Ended
March 31,
2022 2021
Derivatives designated as hedging instruments (a)
Interest rate swaps (b)
$ 30 $ 35
Euro-denominated notes (c)
20 33
Derivatives not designated as hedging instruments (d)
Foreign exchange contracts (e)
12 (8)
Interest rate caps (f)
2 (1)
Total $ 64 $ 59


		Three Months Ended March 31,
		2023		2022
Derivatives designated as hedging instruments (a)
	Interest rate swaps (b)	$	(7)	$	30
	Euro-denominated notes (c)	(9)		20
Derivatives not designated as hedging instruments (d)
	Foreign exchange contracts (e)	(7)		12
	Interest rate caps (f)	—		2

	Total	$	(23)	$	64

__________

(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 ~~13–Stockholders’~~13 – Stockholders' Equity for amounts reclassified from accumulated other comprehensive income 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 three months ended March 31, 2022, included a $12 million gain~~Included in interest expense. ~~For the three months ended~~

~~Table of Contents~~

~~March 31, 2021, included a $7 million loss in interest expense and a $1 million loss in operating expense.~~

(f)~~Included primarily~~Primarily included in vehicle interest, net.

Debt Instruments

The carrying amounts and estimated fair values (Level 2) of debt instruments ~~were~~are as follows:


			As of March 31, 2022				As of December 31, 2021						As of March 31, 2023				As of December 31, 2022
			Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value				Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Corporate debt	Corporate debt										Corporate debt
		Short-term debt and current portion of long-term debt	$	27	$	26	$	19	$	18		Short-term debt and current portion of long-term debt	$	34	$	34	$	27	$	26
		Long-term debt	4,678		4,701		3,990		4,153			Long-term debt	4,662		4,604		4,644		4,411

Debt under vehicle programs	Debt under vehicle programs										Debt under vehicle programs
		Vehicle-backed debt due to Avis Budget Rental Car Funding	$	9,743	$	9,610	$	8,848	$	9,009		Vehicle-backed debt due to Avis Budget Rental Car Funding	$	12,206	$	11,847	$	11,275	$	10,848
		Vehicle-backed debt	2,308		2,313		2,528		2,559			Vehicle-backed debt	2,473		2,471		2,423		2,422
		Interest rate swaps and interest rate caps (a)	48		48		14		14			Interest rate swaps and interest rate caps (a)	98		98		111		111

__________

(a) Derivatives in a liability position.

17. Segment Information

Our chief operating decision-maker assesses performance and allocates resources based upon the separate financial information ~~from each~~ of our operating segments. In identifying our reportable segments, we ~~considered~~also consider the nature of services provided by our operating segments, the geographical areas in which the segments ~~operated~~operate and other relevant factors. We aggregate certain of our operating segments into our reportable segments.

Management evaluates the operating results of each of ~~its~~our reportable segments based upon revenues and “Adjusted EBITDA,” which we define as income (loss) from continuing operations before non-vehicle related depreciation and ~~amortization,~~amortization; any impairment ~~charges,~~charges; restructuring and other related ~~charges,~~charges; early extinguishment of debt ~~costs,~~costs; non-vehicle related ~~interest,~~interest; transaction-related costs, ~~net,~~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,~~lawsuits; non-operational charges related to shareholder activist activity, which include third party advisory, legal and other professional ~~service fees,~~fees; COVID-19 charges, net; cloud computing costs; other (income) expense, net; and income taxes. ~~COVID-19 charges include unusual, direct~~

We believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our operating businesses and ~~incremental costs due~~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 COVID-19 pandemic such as minimum annual guaranteed rent in excess of concession fees for the period, overflow parking for idle vehicles and related shuttling costs, incremental cleaning supplies to sanitize vehicles and facilities, and losses associated with vehicles damaged in overflow parking lots, net of insurance proceeds.same basis that management uses internally. Our presentation of Adjusted EBITDA may not be comparable to ~~similarly-titled~~similarly titled measures used by other companies.

2324

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				Three Months Ended March 31,											Three Months Ended March 31,
				2022				2021							2023				2022
				Revenues		Adjusted EBITDA		Revenues		Adjusted EBITDA					Revenues		Adjusted EBITDA		Revenues		Adjusted EBITDA
Americas	Americas			$	2,000	$	810	$	1,080	$	108	Americas			$	2,016	$	516	$	2,000	$	810
International	International			432		23		292		(50)		International			541		50		432		23
Corporate and Other (a)	Corporate and Other (a)			—		(23)		—		(11)		Corporate and Other (a)			—		(31)		—		(23)
		Total Company		$	2,432	$	810	$	1,372	$	47		Total Company		$	2,557	$	535	$	2,432	$	810

Reconciliation of Adjusted EBITDA to income (loss) before income taxes:
Reconciliation of Adjusted EBITDA to income before income taxes:												Reconciliation of Adjusted EBITDA to income before income taxes:
						2022				2021							2023				2022
Adjusted EBITDA	Adjusted EBITDA					$	810			$	47	Adjusted EBITDA					$	535			$	810
Less:	Less:		Non-vehicle related depreciation and amortization (b)			60				68		Less:		Non-vehicle related depreciation and amortization			56				58
			Interest expense related to corporate debt, net:											Interest expense related to corporate debt, net			73				53
			Interest expense			53				61
			Early extinguishment of debt			—				129
			Restructuring and other related charges			8				20				Restructuring and other related charges			4				8
			Unprecedented personal-injury and other legal matters, net (c)			1				—				Other (income) expense, net (b)			(2)				—
			Transaction-related costs, net			—				1				Reported within operating expenses:
														Cloud computing costs			7				2
														COVID-19 charges			—				(7)
			COVID-19 charges (d)			(7)				18				Unprecedented personal-injury and other legal matters, net			—				1
Income (loss) before income taxes						$	695			$	(250)

Income before income taxes												Income before income taxes					$	397			$	695

__________

(a)Includes unallocated corporate overhead which is not attributable to a particular segment.

(b)~~For the three months ended March 31, 2022, includes operating expenses in our Consolidated Condensed Statements~~Primarily consists of ~~Operations~~fleet related services as well as certain administrative services provided to ~~cloud computing costs of $2 million.~~

~~(c)~~a former subsidiary~~Reported within operating expenses.~~.

~~(d)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 $ (7) $ 19
Vehicles damaged in overflow parking lots, net of insurance proceeds — (6)
Other charges — 5
Operating expenses $ (7) $ 17
Selling, general and administrative expenses $ — $ 1
COVID-19 charges, net $ (7) $ 18

Since December 31, ~~2021,~~2022, there have been no significant changes in segment assets exclusive of assets under vehicle programs. As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, Americas’ segment assets under vehicle programs were approximately ~~$12.7~~ $15.7 billion ~~and $11.4~~and $14.3 billion, respectively. ~~The changes~~ This increase in assets under vehicle programs is ~~primarily due~~directly correlated to the increase in the size and cost of our vehicle rental fleet to meet ~~increases in rental~~ demand.

18. Subsequent ~~Events~~Event

In April ~~2022,~~2023, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued ~~$660~~$450 million and $550 million of asset-backed notes to investors with an expected final payment date of ~~August~~February 2027 ~~with~~and June 2028, respectively, and a weighted average interest rate of ~~3.96%.~~5.67% and 5.76%, respectively.

In April ~~2022, we repurchased approximately 1.5 million shares of common stock at a cost of approximately $393 million under the Stock Repurchase Program.~~2023, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary amended its asset-backed variable-funding financing facilities to increase its capacity by $750 million.

~~In May 2022, our Board of Directors approved a $2 billion increase in repurchase authorization to our Stock Repurchase Program.~~

* * * *

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our Consolidated Condensed Financial Statements and accompanying Notes included in this Quarterly Report on Form 10-Q, and with our ~~2021~~2022 Form 10-K. Our actual results of operations may differ materially from those discussed in forward-looking statements as a result of various factors, including those discussed in “Forward-Looking Statements”. See “Forward-Looking Statements” and “Risk Factors” for additional information. 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 ~~over 590,000~~approximately 621,000 vehicles in first quarter ~~2022.~~2023. 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.

Our Segments

We categorize our operations into two reportable business segments: Americas, consisting primarily of our vehicle rental operations in North America, South America, Central America and the Caribbean, car sharing operations in certain of these markets, and licensees in certain areas in which we do not operate directly; and International, consisting primarily of our vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, car sharing operations in certain of these markets, and licensees in certain areas in which we do not operate directly.

Business and Trends

Over the past year, we have seen a number of encouraging developments, such as a significant increase in global travel demand, which generated an increase in demand for rental vehicles and improved pricing across the industry, suggesting a steady return to historic travel trends. Our strategy continues to primarily focus on ~~cost optimization, core revenue growth~~costs and ~~capital investments aimed~~customer experience to ~~allow us to maximize~~strengthen our ~~infrastructure to capitalize on what we believe will be a continued surge in travel demand.~~company, enable resilience, and deliver stakeholder value. During the ~~quarter~~three months ended March 31, ~~2022,~~2023, we generated revenues of ~~$2.4~~$2.6 billion, net income of ~~$527~~$312 million and Adjusted EBITDA of ~~$810~~$535 million. These results were driven by increased ~~demand for rental vehicles, improved pricing across the industry, disciplined cost management~~volume and ~~continued~~utilization, offset by increased fleet ~~management.~~costs and sustained inflationary pressures on costs.

We continue to be 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 ~~full extent~~factors and trends that we currently believe are or will be most impactful to our results of ~~the ongoing impact of the COVID-19 pandemic on our long-term operational~~operations and financial ~~performance will depend~~condition include the following: interest rates, inflationary impact on ~~future developments, including those outside of our control,~~items such as ~~the spread of new variants of the virus~~commodity prices and ~~the implementation of new or continued~~wages, used car values, and an economic downturn that may impact travel restrictions and the overall economic environment. These variants could cause prolonged impacts on the economy, our industry and on us, with reductions in available staffing and increasing inflation, among other impacts.demand. We ~~will~~ continue to monitor the potential favorable or unfavorable impacts of these and other impacts and take action in connection with it, by leveraging our technology and reviewing cost mitigating actions, among other actions. Significant events affecting travel have historically had an impact on vehicle rental volumes, with the full extent of the impact generally determined by the length of time the event influences travel decisions. As a consequence, we cannot estimate the impactfactors on our business, operations, financial condition, ~~or forecast financial or operational~~and future results ~~with reasonable certainty.~~of operations.

The global semiconductor shortage is impacting fleet supply, resulting in tighter fleets throughout the industry and causing us to hold cars longer compared to periods prior to the COVID-19 pandemic. We have historically navigated through significant vehicle recalls and worked with our vehicle manufacturers, and believe we have the logistics in place to effectively manage our fleet during this disruption in supply. We continue to purchase new vehicles and believe we can increase our fleet utilization efficiency to capture increased demand.

~~Table of Contents~~

RESULTS OF OPERATIONS

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~~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~~current period results at the ~~prior-period~~prior period average exchange rate plus any related gains and losses on currency hedges.

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 (loss) from continuing operations before non-vehicle related depreciation and ~~amortization,~~amortization; any impairment ~~charges,~~charges; restructuring and other related ~~charges,~~charges; early extinguishment of debt ~~costs,~~costs; non-vehicle related ~~interest,~~interest; transaction-related costs, ~~net,~~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,~~lawsuits; non-operational charges related to shareholder activist activity, which include third party advisory, legal and other professional ~~fees,~~fees; COVID-19 charges, net; cloud computing costs; other (income) expense, net, and income taxes. Net charges for unprecedented personal-injury and other legal matters are recorded within operating expenses in our consolidated results of operations. Non-operational charges related to shareholder activist activity include third party advisory, legal and other professional service fees and are recorded within selling, general and administrative expenses in our consolidated results of operations. COVID-19 charges include unusual, direct and incremental costs due to the COVID-19 pandemic, such as minimum annual guaranteed rent in excess of concession fees for the period, overflow parking for idle vehicles and related shuttling costs, incremental cleaning supplies to sanitize vehicles and facilities and other charges, and losses associated with vehicles damaged in overflow parking lots, net of insurance proceeds, and are primarily recorded within operating expenses in our consolidated results of operations.

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~~similarly titled measures used by other companies.

During the three months ended March 31, ~~2022:~~2023:

•Our revenues totaled ~~$2.4~~$2.6 billion, an increase of ~~77%~~5% compared to the similar period in ~~2021,~~2022, primarily due to ~~a significant increase in pricing and~~ increased ~~demand for~~ rental vehicles. The significant increase in revenues was a direct result of the global effort to combat the incidence and spread of the COVID-19 virus, which led to a significant increase in global travel demand, suggesting a steady return to historic travel levels.volumes.

•Our net income was ~~$527~~$312 million, representing ~~an increase~~a decrease of ~~$697~~$215 million year-over-year, primarily due to ~~significantly higher revenues, as described above, in addition to disciplined cost management.~~increased fleet costs and sustained inflationary pressures on costs.

•Our Adjusted EBITDA was ~~$810~~$535 million, representing a ~~significant increase~~decrease of ~~$763~~$275 million ~~year-over-year, primarily due to significantly higher revenues and disciplined cost management.~~

•~~We repurchased approximately $1.3 billion of our common stock, reducing our shares outstanding by approximately 6.4 million shares.~~year-over-year.

~~Table of Contents~~

Three Months Ended March 31, ~~2022~~2023 vs. Three Months Ended March 31, ~~2021~~2022

Our consolidated condensed results of operations comprised of the following:

Three Months Ended March 31,
2022 2021 $ Change % Change
Revenues $ 2,432 $ 1,372 $ 1,060 77 %
Expenses
Operating 1,147 832 315 38 %
Vehicle depreciation and lease charges, net 111 254 (143) (56 %)
Selling, general and administrative 283 182 101 55 %
Vehicle interest, net 77 75 2 3 %
Non-vehicle related depreciation and amortization 58 68 (10) (15 %)
Interest expense related to corporate debt, net:
Interest expense 53 61 (8) (13 %)
Early extinguishment of debt — 129 (129) n/m
Restructuring and other related charges 8 20 (12) (60 %)
Transaction-related costs, net — 1 (1) n/m
Total expenses 1,737 1,622 115 7 %
Income (loss) before income taxes 695 (250) 945 n/m
Provision for (benefit from) income taxes 168 (80) 248 n/m
Net income (loss) 527 (170) 697 n/m
Less: net loss attributable to non-controlling interests (2) — (2) n/m
Net income (loss) attributable to Avis Budget Group, Inc. $ 529 $ (170) $ 699 n/m


		Three Months Ended March 31,
		2023		2022		$ Change		% Change
Revenues		$	2,557	$	2,432	$	125	5	%

Expenses
	Operating	1,307		1,147		160		14	%
	Vehicle depreciation and lease charges, net	265		111		154		n/m
	Selling, general and administrative	324		283		41		14	%
	Vehicle interest, net	133		77		56		73	%
	Non-vehicle related depreciation and amortization	56		58		(2)		(3	%)
	Interest expense related to corporate debt, net:
	Interest expense	73		53		20		38	%

	Restructuring and other related charges	4		8		(4)		(50	%)

	Other (income) expense, net	(2)		—		(2)		n/m
Total expenses		2,160		1,737		423		24	%

Income before income taxes		397		695		(298)		(43	%)
Provision for income taxes		85		168		(83)		(49	%)
Net income		312		527		(215)		(41	%)
Less: net income (loss) attributable to non-controlling interests		—		(2)		2		n/m
Net income attributable to Avis Budget Group, Inc.		$	312	$	529	$	(217)	(41	%)

___________

n/m - Not Meaningful

Revenues increased ~~$1.1 billion,~~$125 million, or ~~77%~~5%, during the three months ended March 31, ~~2022~~2023 compared to the similar period in ~~2021,~~2022, primarily due to a ~~45%~~6% increase in volume ~~as the mobility industry recovers from the pandemic~~ and a ~~24%~~1% increase in revenue per day, excluding exchange rate effects, partially offset by a ~~$29~~$37 million negative impact from currency exchange rate movements.

Total expenses increased 7%24% during the three months ended March 31, ~~2022,~~2023, compared to the similar period in ~~2021,~~2022, primarily due to increased ~~demand, partially offset by cost discipline as volume returned.~~fleet costs and the impact of inflation. Our effective tax rates were a provision ~~(benefit)~~ of ~~24.2%~~21.4% and ~~(32.0)%~~24.2% for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. As a result of these items, our net income ~~increased~~decreased by ~~$697~~$215 million compared to the similar period in ~~2021.~~2022. For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, we reported earnings ~~(losses)~~ per diluted share of ~~$9.71~~$7.72 and ~~$(2.43),~~$9.71, respectively.

Operating expenses ~~decreased~~increased to ~~47.2%~~51.1% of revenue during the three months ended March 31, ~~2022~~2023 compared to ~~60.6%~~47.2% during the similar period in ~~2021,~~ 2022, primarily due to ~~the~~ increased ~~revenues~~volume and ~~cost discipline as volume returned.~~inflation. Vehicle depreciation and lease charges ~~decreased~~increased to ~~4.5%~~10.3% of revenue during the three months ended March 31, ~~2022~~2023 compared to ~~18.5%~~4.5% during the similar period in ~~2021,~~2022, primarily due to increased ~~revenues and a 68% lower~~ per unit fleet ~~cost,~~costs, excluding exchange rate effects, driven by ~~the continued favorable trend in the used-vehicle market.~~increased fleet levels and depreciation rates. Selling, general and administrative costs ~~decreased~~increased to ~~11.6%~~12.7% of revenue during the three months ended March 31, ~~2022~~2023 compared to ~~13.3%~~11.6% during the similar period in ~~2021,~~2022, primarily due to ~~increased revenues and cost discipline as volume returned.~~inflation. Vehicle interest costs ~~decreased~~increased to ~~3.2%~~5.2% of revenue during the three months ended March 31, ~~2022~~2023, compared to ~~5.5%~~3.2% during the similar period in ~~2021,~~2022, primarily due to ~~increased revenues.~~

~~Table of Contents~~rising interest rates and additional funding for vehicles.

Following is a more detailed discussion of the results of each of our reportable segments and reconciliation of net income ~~(loss)~~ to Adjusted EBITDA:


				Three Months Ended March 31,											Three Months Ended March 31,
				2022				2021							2023				2022
				Revenues		Adjusted EBITDA		Revenues		Adjusted EBITDA					Revenues		Adjusted EBITDA		Revenues		Adjusted EBITDA
Americas	Americas			$	2,000	$	810	$	1,080	$	108	Americas			$	2,016	$	516	$	2,000	$	810
International	International			432		23		292		(50)		International			541		50		432		23
Corporate and Other (a)	Corporate and Other (a)			—		(23)		—		(11)		Corporate and Other (a)			—		(31)		—		(23)
		Total Company		$	2,432	$	810	$	1,372	$	47		Total Company		$	2,557	$	535	$	2,432	$	810

				Reconciliation to Adjusted EBITDA											Reconciliation to Adjusted EBITDA
								2022		2021									2023		2022
Net income (loss)								$	527	$	(170)
Provision for (benefit from) income taxes								168		(80)
Income (loss) before income taxes								695		(250)
Net income												Net income							$	312	$	527
Provision for income taxes												Provision for income taxes							85		168
Income before income taxes												Income before income taxes							397		695

Add:	Add:		Non-vehicle related depreciation and amortization (b)					60		68		Add:		Non-vehicle related depreciation and amortization					56		58
			Interest expense related to corporate debt, net:											Interest expense related to corporate debt, net					73		53
			Interest expense					53		61				Restructuring and other related charges					4		8
			Early extinguishment of debt					—		129
			Restructuring and other related charges					8		20				Other (income) expense, net (b)					(2)		—
			Unprecedented personal-injury and other legal matters, net (c)					1		—				Reported within operating expenses:
			Transaction-related costs, net					—		1				Cloud computing costs					7		2
			COVID-19 charges (d)					(7)		18				COVID-19 charges, net					—		(7)
														Unprecedented personal-injury and other legal matters, net					—		1
Adjusted EBITDA	Adjusted EBITDA							$	810	$	47	Adjusted EBITDA							$	535	$	810

(a)Includes unallocated corporate overhead which is not attributable to a particular segment.

(b)~~Includes cloud computing costs~~Primarily consists of ~~$2 million within expenses.~~

~~(c)Reported within operating expenses in our consolidated condensed results of operations.~~

~~(d)The following table presents the unusual, direct and incremental costs due~~fleet related services as well as certain administrative services provided to ~~the COVID-19 pandemic:~~a former subsidiary.

2022 2021
Minimum annual guaranteed rent in excess of concession fees, net $ (7) $ 19
Vehicles damaged in overflow parking lots, net of insurance proceeds — (6)
Other charges — 5
Operating expenses (7) 17
Selling, general and administrative expenses — 1
COVID-19 charges, net $ (7) $ 18

Americas


		Three Months Ended March 31,							Three Months Ended March 31,
		2022		2021		% Change			2023		2022		% Change
Revenues	Revenues	$	2,000	$	1,080	85	%	Revenues	$	2,016	$	2,000	1	%
Adjusted EBITDA	Adjusted EBITDA	810		108		650	%	Adjusted EBITDA	516		810		(36	%)

Revenues increased ~~85%~~1% during the three months ended March 31, ~~2022~~2023 compared to the similar period in ~~2021,~~2022, primarily due to a ~~52%~~3% increase in volume, ~~and~~partially offset by a ~~21% increase~~2% decrease in revenue per day.

Operating expenses ~~decreased~~increased to ~~44.8%~~50.5% of revenue during the three months ended March 31, ~~2022~~2023 compared to ~~57.9%~~44.8% during the similar period in ~~2021,~~2022, primarily due to increased ~~revenues~~volume and ~~cost discipline as volume returned.~~inflation. Vehicle depreciation and lease charges ~~decreased~~increased to ~~1.3%~~8.6% of revenue during the three months ended March 31, ~~2022~~2023 compared to ~~17.0%~~1.3% during the similar period in ~~2021,~~2022, primarily due to increased ~~revenues and a 90% decrease in~~ per-unit fleet costs, driven by ~~the continued favorable trend in the used-vehicle market.~~increased fleet levels and depreciation rates. Selling, general and administrative costs ~~decreased~~were 9.8% of revenue, consistent with the similar period in 2022. Vehicle interest costs increased to ~~9.8%~~5.6% of revenue during the three months ended March 31, ~~2022~~2023 compared to ~~10.6%~~3.3% during the similar period in ~~2021,~~2022, primarily due to ~~increased revenues~~rising interest rates and ~~cost discipline as volume returned. Vehicle interest costs~~additional funding for vehicles.

Adjusted EBITDA decreased ~~to 3.3% of revenue~~36% during the three months ended March 31, ~~2022~~2023 compared to ~~5.8% during~~ the similar period in ~~2021,~~2022, primarily due to ~~increased revenues.~~

~~Table of Contents~~

higher per-unit fleet costs and inflationary pressures.

~~Adjusted EBITDA was $702 million higher~~International


	Three Months Ended March 31,
	2023		2022		% Change
Revenues	$	541	$	432	25	%
Adjusted EBITDA	50		23		117	%

Revenues increased 25% during the three months ended March 31, ~~2022~~2023, compared to the similar period in ~~2021,~~2022, primarily due to ~~increased revenues, lower per-unit fleet costs and cost discipline as volume returned.~~

~~International~~

Three Months Ended March 31,
2022 2021 % Change
Revenues $ 432 $ 292 48 %
Adjusted EBITDA 23 (50) 146 %

~~Revenues increased 48% during the three months ended March 31, 2022, compared to the similar period in 2021, primarily due to a 26% increase in volume and a 25%~~14% increase in revenue per day, excluding exchange rate effects, and a 16% increase in volume, partially offset by a ~~$29~~$32 million negative impact from currency exchange rate movements.

Operating expenses decreased to ~~56.0%~~52.6% of revenue during the three months ended March 31, ~~2022~~2023 compared to ~~71.2%~~56.0% during the similar period in ~~2021,~~2022, primarily due to increased revenues ~~and cost discipline~~ as volume ~~returned.~~returned. Vehicle depreciation and lease charges decreased to ~~19.5%~~16.7% of revenue during the three months ended March 31, ~~2022~~2023 compared to ~~24.0%~~19.5% during the similar period in ~~2021,~~2022, primarily due to increased revenues and improved utilization, partially offset by a ~~1% decrease~~2% increase in per-unit fleet costs, excluding exchange rate ~~effects, driven by the continued favorable trend in the used-vehicle market.~~effects. Selling, general and administrative costs ~~decreased~~increased to ~~16.8%~~17.8% of revenue during the three months ended March 31, ~~2022~~2023 compared to ~~19.0%~~16.8% during the similar period in ~~2021,~~2022, primarily due to ~~increased revenues and cost discipline as volume returned.~~the expiration of COVID-19 related relief. Vehicle interest costs ~~decreased~~increased to ~~2.6%~~3.8% of revenue during the three months ended March 31, ~~2022~~2023 compared to ~~4.4%~~2.6% during the similar period in ~~2021,~~2022, primarily due to ~~increased revenues.~~rising interest rates and additional funding for vehicles.

Adjusted EBITDA was ~~$73~~$27 million higher ~~in first quarter 2022~~during the three months ended March 31, 2023 compared to the similar period in ~~2021,~~2022, primarily due to increased revenues ~~cost discipline~~ as volume returned, ~~and decreased per-unit fleet costs.~~partially offset by a $7 million negative impact from currency exchange rate movements.

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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

March 31,
2022 December 31, 2021 Change
Total assets exclusive of assets under vehicle programs $ 8,437 $ 8,581 $ (144)
Total liabilities exclusive of liabilities under vehicle programs 9,883 8,933 950
Assets under vehicle programs 15,136 14,019 1,117
Liabilities under vehicle programs 14,673 13,876 797
Stockholders’ equity (983) (209) (774)

The increase in liabilities exclusive of liabilities under vehicle programs is principally related to the increase in long-term debt from the issuance of Floating Rate Term Loan due March 2029. See “—Liquidity and Capital Resources” and Notes 10 to our Consolidated Condensed Financial Statements.


	March 31, 2023		December 31, 2022		Change
Total assets exclusive of assets under vehicle programs	$	8,511	$	8,499	$	12
Total liabilities exclusive of liabilities under vehicle programs	9,760		9,656		104
Assets under vehicle programs	18,877		17,428		1,449
Liabilities under vehicle programs	18,069		16,971		1,098
Total stockholders’ equity	(441)		(700)		259

The increases in assets ~~under vehicle programs~~ and liabilities under vehicle programs are principally related to the increase in the size and cost of our vehicle rental ~~fleet to meet increased rental demand.~~

~~The decrease in stockholders’ equity is primarily due to our share repurchases, partially offset by comprehensive income.~~fleet.

LIQUIDITY AND CAPITAL RESOURCES

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~~January 2023, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued $500 million and $350 million of asset-backed notes to investors with an expected final payment date of April 2028 and October 2026, respectively, with a ~~$750 million Floating Rate Term Loan due March 2029, at a price of 97% of the aggregate principal amount, with~~weighted average interest ~~paid monthly, which is part of our senior credit facilities. The Floating Rate Term Loan due March 2029 bears interest at one-month SOFR plus 350 basis points for an aggregate~~ rate of ~~4.00%.~~5.36% and 5.31%, respectively. The proceeds from these borrowings were used to repay maturing vehicle-backed debt and the acquisition of rental cars in the United States.

In April 2023, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued $450 million and $550 million of asset-backed notes to investors with an expected final payment date of February 2027 and June 2028, respectively, and a weighted average interest rate of 5.67% and 5.76% respectively, and also amended its asset-backed variable-funding financing facilities to increase its capacity by $750 million. The proceeds from these borrowings will be used to repay 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 ~~$5.1~~$8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in ~~March 2022~~February 2023. Our stock repurchases may occur through open market purchases, privately negotiated transactions or trading plans pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. 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. During the three months ended March 31, ~~2022, we repurchased approximately 6.4 million shares of~~2023, no common stock ~~at a cost of approximately $1.3 billion~~repurchases were made under the ~~program.~~program. As of March 31, ~~2022,~~2023, approximately ~~$652 million~~$1.7 billion of authorization remained available to repurchase common stock under the program.

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CASH FLOWS

The following table summarizes our cash flows:


			Three Months Ended March 31,								Three Months Ended March 31,
			2022		2021		Change				2023		2022		Change
Cash provided by (used in):	Cash provided by (used in):								Cash provided by (used in):
		Operating activities	$	1,148	$	336	$	812		Operating activities	$	819	$	1,148	$	(329)
		Investing activities	(1,165)		(1,366)		201			Investing activities	(1,678)		(1,165)		(513)
		Financing activities	30		914		(884)			Financing activities	841		30		811
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash	Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash		(2)		(10)		8		Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash		5		(2)		7
Net increase (decrease) in cash and cash equivalents, program and restricted cash			11		(126)		137
Net (decrease) increase in cash and cash equivalents, program and restricted cash									Net (decrease) increase in cash and cash equivalents, program and restricted cash		(13)		11		(24)
Cash and cash equivalents, program and restricted cash, beginning of period	Cash and cash equivalents, program and restricted cash, beginning of period		626		765		(139)		Cash and cash equivalents, program and restricted cash, beginning of period		642		626		16
Cash and cash equivalents, program and restricted cash, end of period	Cash and cash equivalents, program and restricted cash, end of period		$	637	$	639	$	(2)	Cash and cash equivalents, program and restricted cash, end of period		$	629	$	637	$	(8)

The ~~increase~~decrease in cash provided by operating activities during the three months ended March 31, ~~2022~~2023 compared with the ~~same~~similar period in ~~2021~~2022 is primarily due to the ~~increase~~decrease in our net income.

The ~~decrease~~increase in cash used in investing activities during the three months ended March 31, ~~2022~~2023 compared with the ~~same~~similar period in ~~2021~~2022 is primarily due to ~~a decrease~~the increase in our net investment in vehicles.

The ~~decrease~~increase in cash provided by financing activities during the three months ended March 31, ~~2022~~2023 compared with the ~~same~~similar period in ~~2021~~2022 is primarily due to anthe increase in our net borrowings under vehicle programs and decrease in our repurchases of common stock, offset by ~~proceeds from~~the decrease in our corporate borrowings.

DEBT AND FINANCING ARRANGEMENTS

At March 31, ~~2022,~~2023, we had approximately ~~$16.8~~$19.5 billion of indebtedness, including corporate indebtedness of approximately $4.7 billion and debt under vehicle programs of approximately ~~$12.1~~$14.8 billion. For information regarding our debt and borrowing arrangements, see Notes 1, 10 and 11 to our Consolidated Condensed Financial Statements.

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 ~~position was impacted by COVID-19 as a result of significant volume declines. However, since 2021, travel advisories~~has in the past been, and ~~restrictions were eased, which led to a significant increase~~could in ~~global travel demand, resulting in increased demand for rental vehicles and improved pricing across~~ the ~~industry. However, the full extent of the ongoing impact of this virus on our long-term operational performance and liquidity will depend on~~ future developments, including those outside of our control, such as the spread of new variants of the virus, which may be resistant to currently approved vaccines and the implementation of new or continued travel restrictions.

~~Our liquidity could~~ 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

~~Table of Contents~~

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.

As of March 31, ~~2022,~~2023, we had ~~$550~~$548 million of available cash and cash equivalents and access to available borrowings under our revolving credit facility of approximately ~~$354~~$877 million, providing us with ~~approximately $904 million~~access to an approximate $1.4 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 March 31, ~~2022,~~2023, 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” of our ~~2021~~2022 Form ~~10-K, as well as the “Risk Factors” section in this quarterly report.~~10-K.

CONTRACTUAL OBLIGATIONS

Our future contractual obligations have not changed significantly from the amounts reported within our ~~2021~~2022 Form 10-K with the exception of our commitment to purchase vehicles, which ~~decreased~~increased by approximately ~~$0.8~~$2.6 billion from December 31, ~~2021,~~2022, to approximately ~~$5.1~~$9.3 billion as of March 31, ~~2022~~2023 due primarily to ~~seasonality.~~new model year vehicle purchases. Changes to our obligations related to corporate indebtedness and debt under vehicle programs are presented above within the section titled “Liquidity and Capital Resources—Debt and Financing Arrangements” and also within Notes 10 and 11 to our Consolidated Condensed Financial Statements.

CRITICAL ACCOUNTING ESTIMATES

~~ACCOUNTING POLICIES~~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 principles (GAAP), we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions ~~that~~ we are required to make ~~pertain~~relate to matters that are inherently uncertain as they relate to future ~~events.~~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 within the section titled “Critical Accounting ~~Policies”~~Estimates” of our ~~2021~~2022 Form 10-K are the accounting policies (related to goodwill and other indefinite-lived intangible assets, vehicles, income taxes and public liability, property damage and other insurance liabilities) that we believe require subjective ~~and/or~~and complex judgments that could potentially affect ~~2022~~ reported results. There have been no significant changes to those accounting policies or our assessment of which accounting policies we would consider to be critical accounting policies.

~~Goodwill and Other Indefinite-lived Intangible Assets~~. We perform our annual goodwill and other indefinite-lived intangible assets impairment assessment in the fourth quarter of each year at the reporting unit level, or more frequently if events or circumstances indicate that the carrying amount of goodwill and other indefinite-lived intangible assets may be impaired. For our Europe, Middle East and Africa (“EMEA”) reporting unit, the percentage by which the estimated fair value exceeded the carrying value as of October 1, 2021 was 10% and the amount of goodwill allocated to our reporting unit was $488 million.

We evaluated qualitative factors and determined that an interim impairment test was not required this quarter as we believe it is more likely than not that the fair value of our goodwill and other indefinite-lived intangible assets exceeds the carrying value. We will continue to closely monitor actual results versus our expectations as well as any significant changes in events or conditions, including the impact of COVID-19 on our business and the travel industry, and the resulting impact to our assumptions about future estimated cash flows, the discount rate and market multiples. In the future, failure to achieve our business plans, a deterioration of the general economic conditions of the countries in which we operate, or significant changes in the assumptions and estimates that are used in our impairment testing for goodwill and indefinite-lived intangible assets (such as the discount rate) could result in significantly different estimates of fair value that could trigger an impairment of the goodwill of our reporting units or intangible assets.

New Accounting Standards

For detailed information regarding new accounting standards and their impact on our business, see Note 1 to our Consolidated Condensed Financial Statements.

~~Table of Contents~~

Item 3. 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 assess our market risks based on changes in interest and currency exchange rates utilizing a sensitivity analysis that measures the potential impact on earnings, fair values and cash flows based on a hypothetical 10% change (increase and decrease) in interest and foreign currency exchange rates. We used March 31, ~~2022~~2023 market rates to perform a sensitivity analysis separately for each of these market risk exposures. We have determined, through such analyses, that the impact of a 10% change in interest or currency exchange rates on our results of operations, balance sheet and cash flows would not be material. Additionally, we have commodity price exposure related to fluctuations in the price of unleaded gasoline. We anticipate that such commodity risk will remain a market risk exposure for the foreseeable future. We determined that a 10% change in the price of unleaded gasoline would not have a material impact on our earnings for the period ended March 31, ~~2022.~~2023. For additional information regarding our long-term borrowings and financial instruments, see Notes 10, 11 and 16 to our Consolidated Condensed Financial Statements.

Item 4. 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 March 31, ~~2022.~~2023.

(b)Changes in Internal Control Over Financial Reporting. During the ~~fiscal~~first quarter ~~to which this report relates,~~of 2023, there ~~has been~~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.

~~Table of Contents~~

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding our legal proceedings, see Note 12 – Commitments and Contingencies to our Consolidated Condensed Financial Statements and refer to our ~~2021~~2022 Form 10-K.

SEC regulations require us to disclose certain information about proceedings arising under federal, state or local environmental provisions if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. In accordance with these regulations, we use a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required pursuant to this item.

Item 1A. Risk Factors

~~The following~~During the three months ended March 31, 2023, we had no material developments to report with respect to our risk factors. For additional information regarding our risk factors, ~~are provided~~please refer to ~~update the risk factors previously disclosed in~~ our ~~periodic reports filed with the SEC, including our 2021~~2022 Form 10-K.

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 could lead to significant increases 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 impact fleet availability; and impact demand for travel as a result of weakness in economic conditions, increased inflation 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.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Total Number of Shares Purchased (in millions) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (in millions) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs ($ in millions)
January 2022 1.6 $186.44 1.6 $654
February 2022 2.3 $170.63 2.3 $265
March 2022 2.5 $250.17 2.5 $652
6.4 $205.31 6.4 $652

~~Our~~The Company’s Board of Directors has authorized the repurchase of up to ~~$5.1~~$8.1 billionof our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in ~~March 2022.~~February 2023. Under our stock repurchase program, wethe Company may repurchase 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 timing and amount of repurchase transactions will be determined by ~~our~~the Company’s management based on ~~our~~its evaluation of market conditions, ~~our~~the Company’s share price, legal requirements, restricted payment capacity under ~~our~~its debt instruments and other factors. The stock repurchase program may be suspended, modified or discontinued ~~at any time~~ without prior notice. During the first quarter of 2023, no common stock repurchases were made under the program. As of March 31, 2023, approximately $1.7 billion of authorization remained available to repurchase common stock under this program.

Item 6. Exhibits

See Exhibit Index.

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SIGNATURES

Pursuant to the requirements 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.

Date:

May ~~3, 2022~~2, 2023

/s/ Cathleen DeGenova

Cathleen DeGenova

Vice President and

Chief Accounting Officer

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Exhibit Index


Exhibit No.			Description
3.1			Amended and Restated Certificate of Incorporation of Avis Budget Group, Inc. ~~(Incorporated~~(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 as of August 10, 2020 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated August 13, 2020).
10.1			~~Amendment No. 2~~Avis Budget Group, Inc. Supplemental Savings Plan, amended and restated as of January 1, 2023 (incorporated by reference to Exhibit 10.18 to the ~~Sixth Amended and Restated Credit Agreement,~~Company’s Annual Report on Form 10-K for the year ended December 31, 2022, dated February 16, 2023). †
10.2			Series 2023-1 Supplement, dated as of ~~March 24, 2022, among~~January 17, 2023, between Avis Budget ~~Holdings,~~Rental Car Funding (AESOP) 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~~The Bank of New York Mellon Trust Company, N.A., as ~~Administrative~~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 ~~March 25, 2022)~~January 20, 2023).
~~10.2~~10.3			~~Amendment No. 1 to the Sixth Amended and Restated Credit Agreement,~~Series 2023-2 Supplement, dated as of ~~March 16, 2022, among~~January 17, 2023, between Avis Budget ~~Holdings,~~Rental Car Funding (AESOP) 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~~The Bank of New York Mellon Trust Company, N.A., as ~~Administrative~~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).
10.4			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 (incorporated by reference to Exhibit 10.76 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, dated February 16, 2023).
10.5			First Amendment to the Fifth Amended and Restated Series 2010-6 Supplement, dated as of March ~~25, 2022)~~30, 2023, 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 10.1 to the Company’s Current Report on Form 8-K dated April 4, 2023).
10.6			First Amendment to the Third Amended and Restated Series 2015-3 Supplement, dated as of March 30, 2023, 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 10.2 to the Company’s Current Report on Form 8-K dated April 4, 2023).
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			Certification 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			Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101)

†			Denotes management contract or compensatory plan.


		March 31, 2022		December 31, 2021
Assets
Current assets:
	Cash and cash equivalents	$	550	$	534
	Receivables, net	779		775
	Other current assets	439		538
Total current assets		1,768		1,847

Property and equipment, net		531		537
Operating lease right-of-use assets		2,417		2,368
Deferred income taxes		1,540		1,615
Goodwill		1,096		1,108
Other intangibles, net		706		724
Other non-current assets		379		382
Total assets exclusive of assets under vehicle programs		8,437		8,581

Assets under vehicle programs:
	Program cash	85		89
	Vehicles, net	13,987		12,866
	Receivables from vehicle manufacturers and other	182		222
	Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party	882		842
		15,136		14,019
Total Assets		$	23,573	$	22,600

Liabilities and Stockholders’ Equity
Current liabilities:
	Accounts payable and other current liabilities	$	2,675	$	2,389
	Short-term debt and current portion of long-term debt	27		19
Total current liabilities		2,702		2,408

Long-term debt		4,678		3,990
Long-term operating lease liabilities		1,918		1,910
Other non-current liabilities		585		625
Total liabilities exclusive of liabilities under vehicle programs		9,883		8,933

Liabilities under vehicle programs:
	Debt	2,356		2,542
	Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party	9,743		8,848
	Deferred income taxes	2,323		2,242
	Other	251		244
		14,673		13,876
Commitments and contingencies (Note 12)		0		0

Stockholders’ equity:
	Preferred stock, $0.01 par value—authorized 10 shares; NaNne issued and outstanding, respectively	—		—
	Common stock, $0.01 par value—authorized 250 shares; issued 137 shares, respectively	1		1
	Additional paid-in capital	6,646		6,676
	Retained earnings (accumulated deficit)	344		(185)
	Accumulated other comprehensive loss	(94)		(133)
	Treasury stock, at cost— 87 and 81 shares, respectively	(7,889)		(6,579)
Stockholders’ equity attributable to Avis Budget Group, Inc.		(992)		(220)
	Non-controlling interests	9		11
Total stockholders’ equity		(983)		(209)
Total Liabilities and Stockholders’ Equity		$	23,573	$	22,600


	2022		2021
Minimum annual guaranteed rent in excess of concession fees, net	$	(7)	$	19
Vehicles damaged in overflow parking lots, net of insurance proceeds	—		(6)

Other charges	—		5
Operating expenses	$	(7)	$	17

Selling, general and administrative expenses	$	—	$	1
COVID-19 charges, net	$	(7)	$	18


	Total Number of Shares Purchased (in millions)	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (in millions)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs ($ in millions)
January 2022	1.6	$186.44	1.6	$654
February 2022	2.3	$170.63	2.3	$265
March 2022	2.5	$250.17	2.5	$652
	6.4	$205.31	6.4	$652