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, ~~2021~~2022


☐			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 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 ~~69,858,812~~48,287,272 shares as of April ~~30, 2021.~~29, 2022.

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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, ~~202~~12022 and 20202 201 (Unaudited)	4
	Consolidated Condensed Balance Sheets as of March 3 1 ~~, 202~~1 31, 2022 and December 31, 20202 201 (Unaudited)	5
	Consolidated Condensed Statements of Cash Flows for the Three Months Ended March 31 , 202 12 and 20202 201 (Unaudited)	6
	Consolidated Condensed Statements of Stockholders’ Equity for the Three Months Ended ~~March~~ 3 1March 31 , 202 12 and 20202 201 (Unaudited)	8
	Notes to Consolidated Condensed Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2625
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
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,” 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”) ~~outbreak, and~~pandemic, the continued restrictions that have been placed on travel in many countries ~~as a result of~~and the ~~outbreak and the~~resulting adverse impact on the global economy, ~~from~~and the ~~outbreak.~~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 ~~COVID-19 outbreak and resulting economic conditions,~~global economy, which has had, and is expected to continue to have, a significant impact on our operations, including an unprecedented ~~decline~~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 ~~when~~as COVID-19 related restrictions are lifted and travel demand increases;

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

•~~the absence of an improvement~~a deterioration in ~~or further deterioration of,~~ economic conditions, 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 ~~or political instability~~ in the locations in which we ~~operate;~~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 ~~the current and any future impacts~~ as a result of ~~COVID-19;~~COVID-19, 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 our business 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~~those countries;

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•our dependence on third-party distribution channels, third-party suppliers of other services and co-marketing arrangements with third parties;

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•~~our dependence on the performance and retention of our senior management and key employees;~~

•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;

•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, 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, ~~and~~ compliance with privacy and data protection ~~regulation;~~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 ~~licensees, dealers,~~ third-party vendors, ~~and~~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 interest rate increases, recent and potential further 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;

•~~our ability to accurately estimate our future results;~~

•~~failure to achieve our business plans, a further deterioration in 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 or intangible assets, which could result in a significant impairment of our ~~goodwill;~~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 ~~for the~~

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~~accuracy and completeness of~~if future results are materially different from those ~~statements.~~forecast 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 ~~2020~~2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 17, ~~2021~~2022 (the ~~“2020~~“2021 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 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,
2021 2020
Revenues $ 1,372 $ 1,753
Expenses
Operating 832 1,058
Vehicle depreciation and lease charges, net 254 459
Selling, general and administrative 182 251
Vehicle interest, net 75 83
Non-vehicle related depreciation and amortization 68 69
Interest expense related to corporate debt, net:
Interest expense 61 48
Early extinguishment of debt 129 4
Restructuring and other related charges 20 44
Transaction-related costs, net 1 2
Total expenses 1,622 2,018
Loss before income taxes (250) (265)
Benefit from income taxes (80) (107)
Net loss $ (170) $ (158)
Comprehensive loss $ (146) $ (257)
Loss per share
Basic $ (2.43) $ (2.16)
Diluted $ (2.43) $ (2.16)


		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)

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, 2021		December 31, 2020				March 31, 2022		December 31, 2021
Assets	Assets						Assets
Current assets:	Current assets:						Current assets:
		Cash and cash equivalents	$	576	$	692		Cash and cash equivalents	$	550	$	534
		Receivables, net	786		647			Receivables, net	779		775
		Other current assets	506		456			Other current assets	439		538
Total current assets	Total current assets		1,868		1,795		Total current assets		1,768		1,847

Property and equipment, net	Property and equipment, net		611		657		Property and equipment, net		531		537
Operating lease right-of-use assets	Operating lease right-of-use assets		2,510		2,560		Operating lease right-of-use assets		2,417		2,368
Deferred income taxes	Deferred income taxes		1,348		1,198		Deferred income taxes		1,540		1,615
Goodwill	Goodwill		1,121		1,137		Goodwill		1,096		1,108
Other intangibles, net	Other intangibles, net		750		774		Other intangibles, net		706		724
Other non-current assets	Other non-current assets		266		244		Other non-current assets		379		382
Total assets exclusive of assets under vehicle programs	Total assets exclusive of assets under vehicle programs		8,474		8,365		Total assets exclusive of assets under vehicle programs		8,437		8,581

Assets under vehicle programs:	Assets under vehicle programs:						Assets under vehicle programs:
		Program cash	61		72			Program cash	85		89
		Vehicles, net	9,101		8,153			Vehicles, net	13,987		12,866
		Receivables from vehicle manufacturers and other	307		281			Receivables from vehicle manufacturers and other	182		222
		Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party	666		667			Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party	882		842
			10,135		9,173				15,136		14,019
Total assets			$	18,609	$	17,538
Total Assets							Total Assets		$	23,573	$	22,600

Liabilities and stockholders’ equity
Liabilities and Stockholders’ Equity							Liabilities and Stockholders’ Equity
Current liabilities:	Current liabilities:						Current liabilities:
		Accounts payable and other current liabilities	$	2,171	$	2,034		Accounts payable and other current liabilities	$	2,675	$	2,389
		Short-term debt and current portion of long-term debt	19		19			Short-term debt and current portion of long-term debt	27		19
Total current liabilities	Total current liabilities		2,190		2,053		Total current liabilities		2,702		2,408

Long-term debt	Long-term debt		4,264		4,191		Long-term debt		4,678		3,990
Long-term operating lease liabilities	Long-term operating lease liabilities		2,025		2,078		Long-term operating lease liabilities		1,918		1,910
Other non-current liabilities	Other non-current liabilities		681		731		Other non-current liabilities		585		625
Total liabilities exclusive of liabilities under vehicle programs	Total liabilities exclusive of liabilities under vehicle programs		9,160		9,053		Total liabilities exclusive of liabilities under vehicle programs		9,883		8,933

Liabilities under vehicle programs:	Liabilities under vehicle programs:						Liabilities under vehicle programs:
		Debt	1,652		1,777			Debt	2,356		2,542
		Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party	6,149		5,080			Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party	9,743		8,848
		Deferred income taxes	1,470		1,383			Deferred income taxes	2,323		2,242
		Other	494		400			Other	251		244
			9,765		8,640				14,673		13,876
Commitments and contingencies (Note 12)	Commitments and contingencies (Note 12)		0		0		Commitments and contingencies (Note 12)		0		0

Stockholders’ equity:	Stockholders’ equity:						Stockholders’ equity:
		Preferred stock, $0.01 par value—authorized 10 shares; NaN issued and outstanding, respectively	0		0			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			Common stock, $0.01 par value—authorized 250 shares; issued 137 shares, respectively	1		1
		Additional paid-in capital	6,642		6,668			Additional paid-in capital	6,646		6,676
		Accumulated deficit	(1,640)		(1,470)			Retained earnings (accumulated deficit)	344		(185)
		Accumulated other comprehensive loss	(163)		(187)			Accumulated other comprehensive loss	(94)		(133)
		Treasury stock, at cost— 67 shares, respectively	(5,156)		(5,167)			Treasury stock, at cost— 87 and 81 shares, respectively	(7,889)		(6,579)
Stockholders’ equity attributable to Avis Budget Group, Inc.							Stockholders’ equity attributable to Avis Budget Group, Inc.		(992)		(220)
								Non-controlling interests	9		11
Total stockholders’ equity	Total stockholders’ equity		(316)		(155)		Total stockholders’ equity		(983)		(209)
Total liabilities and stockholders’ equity			$	18,609	$	17,538
Total Liabilities and Stockholders’ Equity							Total Liabilities and Stockholders’ Equity		$	23,573	$	22,600

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,
2021 2020
Operating activities
Net loss $ (170) $ (158)
Adjustments to reconcile net loss to net cash provided by operating activities:
Vehicle depreciation 259 414
Amortization of right-of-use assets 236 231
(Gain) loss on sale of vehicles, net (49) (11)
Non-vehicle related depreciation and amortization 68 69
Stock-based compensation 4 (2)
Amortization of debt financing fees 8 8
Early extinguishment of debt costs 129 4
Net change in assets and liabilities:
Receivables 24 163
Income taxes and deferred income taxes (80) (112)
Accounts payable and other current liabilities 181 (96)
Operating lease liabilities (234) (230)
Other, net (40) 90
Net cash provided by operating activities 336 370
Investing activities
Property and equipment additions (12) (43)
Proceeds received on asset sales 2 2
Net assets acquired (net of cash acquired) (4) (51)
Net cash used in investing activities exclusive of vehicle programs (14) (92)
Vehicle programs:
Investment in vehicles (3,032) (3,751)
Proceeds received on disposition of vehicles 1,679 2,497
Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party (24) (175)
Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party 25 39
(1,352) (1,390)
Net cash used in investing activities (1,366) (1,482)


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

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

Investing activities
Property and equipment additions			(37)		(12)
Proceeds received on asset sales			1		2
Net assets acquired (net of cash acquired)			(1)		(4)
Other, net			23		—
Net cash used in investing activities exclusive of vehicle programs			(14)		(14)

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

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Avis Budget Group, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Continued)

(In millions)

(Unaudited)

Three Months Ended
March 31,
2021 2020
Financing activities
Proceeds from long-term borrowings 1,100 184
Payments on long-term borrowings (1,101) (92)
Issuance of common stock 0 15
Repurchases of common stock (19) (118)
Debt financing fees (12) (3)
Net cash used in financing activities exclusive of vehicle programs (32) (14)
Vehicle programs:
Proceeds from borrowings 3,481 5,461
Payments on borrowings (2,535) (4,479)
Debt financing fees 0 (6)
946 976
Net cash provided by financing activities 914 962
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash (10) (29)
Net decrease in cash and cash equivalents, program and restricted cash (126) (179)
Cash and cash equivalents, program and restricted cash, beginning of period 765 900
Cash and cash equivalents, program and restricted cash, end of period $ 639 $ 721


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


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


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

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

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

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

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)


		Common Stock			Additional Paid-in Capital				Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)		Treasury Stock					Total Stockholders’ Equity				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				Shares				Amount									Shares							Amount
Balance at December 31, 2020		137.1	$	1			$	6,668				$	(1,470)	$	(187)	(67.3)					$	(5,167)		$	(155)
Balance at December 31, 2021																						Balance at December 31, 2021	137.1			$	1		$	6,676			$	(185)		$	(133)			(81.2)		$	(6,579)		$	(220)		$	11		$	(209)

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

Comprehensive loss:
Net activity related to restricted stock units																						Net activity related to restricted stock units	—			—		(30)				—			—				0.2		(3)			(33)			—			(33)
Repurchase of common stock																						Repurchase of common stock	—			—		—				—			—				(6.4)		(1,307)			(1,307)			—			(1,307)

Balance at March 31, 2022																						Balance at March 31, 2022	137.1			$	1	$	6,646			$	344		$	(94)			(87.4)		$	(7,889)		$	(992)		$	9		$	(983)

Balance at December 31, 2020																						Balance at December 31, 2020	137.1			$	1	$	6,668			$	(1,470)		$	(187)			(67.3)		$	(5,167)		$	(155)		$	—		$	(155)

Comprehensive income (loss):																						Comprehensive income (loss):
Net loss	Net loss	—	—		—				(170)			—		—		—						Net loss	—			—		—				(170)			—				—		—			(170)			—			(170)
Other comprehensive income	Other comprehensive income								—			24		—		—						Other comprehensive income	—			—		—				—			24				—		—			24			—			24

Total comprehensive loss																			(146)

Total comprehensive income (loss)																						Total comprehensive income (loss)										(170)			24									(146)			—			(146)

Net activity related to restricted stock units	Net activity related to restricted stock units	—	—		(26)				—			—		0.2		21			(5)			Net activity related to restricted stock units	—			—		(26)				—			—				0.2		21			(5)			—			(5)

Repurchases of common stock	Repurchases of common stock	—	—		—				—			—		(0.1)		(10)			(10)			Repurchases of common stock	—			—		—				—			—				(0.1)		(10)			(10)			—			(10)

Balance at March 31, 2021	Balance at March 31, 2021	137.1	$	1	$	6,642			$	(1,640)		$	(163)	(67.2)		$	(5,156)		$	(316)		Balance at March 31, 2021	137.1			$	1	$	6,642			$	(1,640)		$	(163)			(67.2)		$	(5,156)		$	(316)		$	—		$	(316)

Balance at December 31, 2019		137.1	$	1	$	6,741			$	(785)		$	(157)	(63.2)		$	(5,144)		$	656

Cumulative effect of accounting change		—	—		—				(1)			—		—		—			(1)

Comprehensive loss:
Net loss		—	—		—				(158)			—		—		—
Other comprehensive loss		—	—		—				—			(99)		—		—

Total comprehensive loss																			(257)

Net activity related to restricted stock units		—	—		(79)				—			—		0.3		71			(8)
Issuance of common stock		—	—		15				—			—		0.4		—			15

Repurchases of common stock		—	—		—				—			—		(5.0)		(113)			(113)

Balance at March 31, 2020		137.1	$	1	$	6,677			$	(944)		$	(256)	(67.5)		$	(5,186)		$	292

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.

~~The Company operates~~

We operate the following reportable business segments:

•Americas—consisting primarily of (i) vehicle rental operations in North America, South America, Central America and the Caribbean, (ii) car sharing operations in certain of these markets, and (iii) licensees in ~~the~~certain areas in which ~~the Company does~~we do not operate directly.

•International—consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in ~~the~~certain areas in which ~~the Company does~~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 ~~the Company’s 2020~~our 2021 acquisitions of various licensees were not material. We consolidate joint venture activities when we have more than 50% controlling interests 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 ~~the Company’s 2020~~our 2021 Annual Report on Form ~~10-K.~~

~~Liquidity and Management’s Plans~~

The continuing cases of COVID-19 and the developments surrounding the pandemic are having a material impact on certain aspects of the Company’s business. Significant events affecting travel and the overall economy 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 well as general economic conditions. The Company believes the ongoing effects of COVID-19 and resulting economic conditions have had, and will continue to have, an adverse impact on its operations and vehicle rental volumes, and on its financial results and liquidity.

The Company cannot assure its assumptions used to estimate its liquidity requirements will be correct because it has never previously experienced such a change in demand, and as a consequence, its ability to be predictive is uncertain. In addition, the duration of the pandemic is uncertain. Therefore, the Company has taken actions to manage its liquidity, including reducing capital expenditures, operating expenses and the number of vehicles in its fleet. The Company has no meaningful corporate debt maturities until 2023. The Company plans to finance the routine Asset Backed Securities (“ABS”) maturities with program cash on hand, available revolving debt capacity, new term note issuances and fleet sales. As a result, based on current operational assumptions, the Company believes it has adequate liquidity beyond the next twelve months.

~~Table of Contents~~

~~In April 2020, the Company entered into an amendment~~10-K (the ~~“Amendment”~~“2021 Form 10-K”) to its senior credit facilities, consisting of an approximately $1.2 billion term loan maturing in 2027 and a $1.8 billion revolving credit facility maturing in 2023, which remain in place after the Amendment. The Amendment provides for relief from the quarterly-tested leverage covenant contained in the credit agreement governing the senior credit facilities until the end of a specific relief period, including a holiday from such leverage covenant through June 30, 2021, during which time (i) certain negative covenant exceptions are not available to the Company, (ii) pricing on the senior credit facilities is increased, (iii) the Company must comply with a liquidity covenant and additional reporting requirements and (iv) the Company must meet additional conditions to borrow under the revolving credit facility. In February 2021, the Company subsequently amended the credit agreement to permit refinancing of certain existing indebtedness..

Summary of Significant Accounting Policies

~~The Company’s~~Our significant accounting policies are fully described in Note 2, “Summary of Significant Accounting Policies,” in ~~the 2020~~our 2021 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,
2021 2020
Cash and cash equivalents $ 576 $ 679
Program cash 61 39
Restricted cash (a)
2 3
Total cash and cash equivalents, program and restricted cash $ 639 $ 721


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

________

(a)Included within other current assets.

Table of Contents

Vehicle Programs. ~~The Company presents~~We present separately the financial data of ~~its~~our vehicle programs. These programs are distinct from ~~the Company’s~~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 ~~the Company’s~~our vehicle programs. ~~The Company believes~~We believe it is appropriate to segregate the financial data of ~~its~~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 ~~the Company,~~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. ~~The Company records~~We record the gain or loss on ~~foreign-currency~~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, ~~2021~~2022, we recorded a gain of $2 million within restructuring and ~~2020, the Company recorded an immaterial amount and a loss of $5 million, respectively,~~other related ~~to such items.~~charges.

~~Divestitures.~~ In March ~~2021, the Company entered into a stock purchase agreement with Urbiz S.A. to sell the Company’s assets in Argentina. Upon completion of~~2022, we completed the sale ~~Urbiz S.A. will pay approximately $4~~of our operations in the Netherlands for $15 million, ~~plus interest, over two years~~subject to working capital adjustments, for the right to operate the Avis and Budget brand. The Company had assets held for sale of $15 million within current and non-current assets and liabilities held for sale of $6 million within non-current liabilities. The Company assessed the fair value of the net assets and recorded a loss of $13 million within restructuring and other related charges duringbrands. During the three months ended March 31, ~~2021. Argentina’s operations are reported~~2022, we recorded a loss of $7 million, net of impact of foreign currency adjustments, within ~~the Company’s Americas segment.~~

~~Table of Contents~~

restructuring and other related charges.

Investments. As of March 31, ~~2021~~2022 and December 31, ~~2020, the Company~~2021, we had equity method investments with a carrying value ~~of $64~~of $71 million ~~and $63~~and $72 million, respectively, which are recorded within other non-current assets. Earnings from ~~the Company’s~~our equity method investments are reported within operating expenses. For the three months ended March 31, 2022 and 2021, ~~and 2020, the Company~~we recorded an immaterial amount related to ~~its~~our equity method ~~investments.~~

~~Nonmarketable Equity Securities.~~ As of March 31, 2021 and December 31, 2020, the Company had nonmarketable equity securities with a carrying value of $8 million, respectively, which are recorded within other non-current assets. No adjustments were made to the carrying amounts during the three months ended March 31, 2021 and 2020.investments, in each period.

Revenues. R~~evenues~~Revenues are recognized under “Leases (Topic 842),” with the exception of royalty fee revenue derived from ~~the Company’s~~our licensees and revenue related to ~~the Company’s~~our customer loyalty program, which were approximately ~~$40~~$34 million ~~and $32~~and $40 million during the three months ended March 31, 2022 and 2021, ~~and 2020, respectively.~~respectively.

The following table presents ~~the Company’s~~our revenues disaggregated by ~~geography.~~geography:


		Three Months Ended March 31,					Three Months Ended March 31,
		2021		2020			2022		2021
Americas	Americas	$	1,080	$	1,257	Americas	$	2,000	$	1,080
Europe, Middle East and Africa	Europe, Middle East and Africa	203		357		Europe, Middle East and Africa	324		203
Asia and Australasia	Asia and Australasia	89		139		Asia and Australasia	108		89
Total revenues	Total revenues	$	1,372	$	1,753	Total revenues	$	2,432	$	1,372

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The following table presents ~~the Company’s~~our revenues disaggregated by ~~brand.~~brand:


		Three Months Ended March 31,					Three Months Ended March 31,
		2021		2020			2022		2021
Avis	Avis	$	717	$	985	Avis	$	1,281	$	717
Budget	Budget	524		619		Budget	982		524
Other	Other	131		149		Other	169		131
Total revenues	Total revenues	$	1,372	$	1,753	Total revenues	$	2,432	$	1,372

________

Other includes Zipcar and other operating brands.

~~Adoption of New~~Recently Issued Accounting Pronouncements

~~Simplifying the~~ Accounting for ~~Income Taxes~~Contract Assets and Contract Liabilities from Contracts with Customers

OnIn 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 effective for us on January 1, ~~2021, as the result of~~2023. Early adoption is permitted on a new accounting pronouncement, the Company adopted ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions and improving the application of existing guidance.retrospective or prospective basis. The adoption of this accounting pronouncement ~~did~~is not expected to have a material impact on ~~the Company's~~our Consolidated Condensed Financial Statements.

~~Compensation—Retirement Benefits—Defined Benefit Plans~~Reference Rate Reform

OnIn January 1, 2021, as the ~~result of a new accounting pronouncement, the Company adopted~~FASB issued ASU ~~2018-14, “Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans,~~2021-01, “Reference Rate Reform (Topic 848),” which ~~adds, removes,~~amends ASU 2020-04 and clarifies ~~disclosure requirements related~~the scope and guidance of Topic 848 to ~~defined benefit pension~~allow derivatives impacted by the reference rate reform to qualify for certain optional expedients and ~~other postretirement plans. These changes are part~~exceptions for contract modifications and hedge accounting. The guidance is optional and is effective for a limited period of ~~the FASB’s disclosure framework project, which the Board launched in 2014 to improve the effectiveness~~time through December 31, 2022. As of ~~disclosures in notes to financial statements. The adoption of~~March 31, 2022, this ~~accounting pronouncement did not have a material~~guidance had no impact on ~~the Company's~~our Consolidated Condensed Financial

~~Table of Contents~~

~~Statements.~~ Statements and we will continue to evaluate this guidance.

2. Leases

Lessor

The following table presents ~~the Company’s~~our lease revenues disaggregated by ~~geography.~~geography:


		Three Months Ended March 31,					Three Months Ended March 31,
		2021		2020			2022		2021
Americas	Americas	$	1,054	$	1,244	Americas	$	1,985	$	1,054
Europe, Middle East and Africa	Europe, Middle East and Africa	192		342		Europe, Middle East and Africa	309		192
Asia and Australasia	Asia and Australasia	86		135		Asia and Australasia	104		86
Total lease revenues	Total lease revenues	$	1,332	$	1,721	Total lease revenues	$	2,398	$	1,332

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The following table presents ~~the Company’s~~our lease revenues disaggregated by ~~brand.~~brand:


		Three Months Ended March 31,					Three Months Ended March 31,
		2021		2020			2022		2021
Avis	Avis	$	690	$	968	Avis	$	1,261	$	690
Budget	Budget	516		608		Budget	972		516
Other	Other	126		145		Other	165		126
Total lease revenues	Total lease revenues	$	1,332	$	1,721	Total lease revenues	$	2,398	$	1,332

_______

Other includes Zipcar and other operating brands.

Lessee

~~The Company has~~We have operating and finance leases for rental locations, corporate offices, vehicle rental fleet and equipment. Many of ~~the Company’s~~our operating leases for rental locations contain concession agreements with various airport authorities that allow ~~the Company~~us to conduct ~~its~~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. ~~The Company’s~~Our operating leases for rental locations often also require ~~the Company~~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,
		2021		2020			2022		2021
Property leases (a)	Property leases (a)					Property leases (a)
Operating lease expense	Operating lease expense	$	139	$	185	Operating lease expense	$	161	$	139
Variable lease expense	Variable lease expense	54		36		Variable lease expense	102		54
Total property lease expense	Total property lease expense	$	193	$	221	Total property lease expense	$	263	$	193

__________

(a) Primarily ~~included in~~within operating expense and ~~includes~~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 ~~agreement for the three months ended March 31, 2021.~~

agreements.

Supplemental balance sheet information related to leases is as follows:


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

Short-term operating lease liabilities (a)	$	536		$	496
Long-term operating lease liabilities	1,918			1,910
Operating lease liabilities	$	2,454		$	2,406

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

_________

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

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As of
March 31, 2021 As of
December 31, 2020
Property leases
Operating lease ROU assets $ 2,510 $ 2,560
Short-term operating lease liabilities (a)
$ 519 $ 514
Long-term operating lease liabilities 2,025 2,078
Operating lease liabilities $ 2,544 $ 2,592
Weighted average remaining lease term 8.3 years 8.4 years
Weighted average discount rate 3.85 % 3.86 %

~~_________~~

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

Supplemental cash flow information related to leases is as follows:


		Three Months Ended March 31,					Three Months Ended March 31,
		2021		2020			2022		2021
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	$	202	$	170	Property operating leases	$	164	$	202
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	169		296		Property operating leases	$	213	$	169

3. Restructuring and Other Related Charges

Restructuring

During the first quarter of 2021, ~~the Company~~we initiated a global restructuring plan to focus on cost discipline by reviewing headcounts, facilities and contractor agreements. ~~The Company is~~We are transforming ~~its~~our business as ~~it prepares~~we prepare to exit the COVID-19 crisis by controlling fixed costs and matching variable costs to demand (“T21”). During the ~~three months~~quarter ended March 31, ~~2021, as part of this process, the Company~~2022, we formally communicated the termination of employment to approximately 80 45 employees, ~~and~~ as part of ~~March 31, 2021, the Company~~this process, and terminated approximately 60 40of these employees. ~~The Company expects~~We expect no further restructuring expense ~~of approximately $55 million related to this initiative~~ to be incurred in ~~2021.~~2022 under this program.

During first quarter 2020, the Company initiated a global restructuring plan to reduce operating costs, such as headcount and facilities, due to declining reservations and revenue resulting from the COVID-19 outbreak (“2020 Optimization Plan”). The Company expects no further restructuring expense related to this initiative.

~~Table of Contents~~

The following tables summarize the changes to our restructuring-related liabilities and identifies the amounts recorded within ~~the Company’s~~our reporting segments for restructuring charges and corresponding payments and utilizations:

Americas International Total
Balance as of January 1, 2021 $ 3 $ 6 $ 9
Restructuring expense:
T21 1 6 7
Restructuring payment/utilization:
T21 (1) (4) (5)
2020 Optimization Plan (2) (2) (4)
Balance as of March 31, 2021 $ 1 $ 6 $ 7
Personnel Facility
Related
Other (a)
Total
Balance as of January 1, 2021 $ 4 $ 2 $ 3 $ 9
Restructuring expense:
T21 5 2 0 7
Restructuring payment/utilization:
T21 (3) (2) 0 (5)
2020 Optimization Plan (3) 0 (1) (4)
Balance as of March 31, 2021 $ 3 $ 2 $ 2 $ 7


				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.

~~Other Related Charges~~

~~Limited Voluntary Opportunity Plan (“LVOP”)~~

During 2020, the Company offered a voluntary termination program to certain employees in field operations, shared services, and general and administrative functions for a limited time. These employees, if qualified, elected resignation from employment in return for enhanced severance benefits to be settled in cash. During the three months ended March 31, 2020, the Company recorded other related charges of approximately $15 million in connection with the LVOP.

~~Officer Separation Costs~~

In March 2020, the Company announced the departure of Michael K. Tucker as Executive Vice President, General Counsel effective March 27, 2020. In connection with Mr. Tucker’s separation, the Company recorded other related charges of approximately $2 million for the three months ended March 31, 2020.

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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,
			2021		2020				2022		2021
Net loss for basic and diluted EPS			$	(170)	$	(158)
Net income (loss) attributable to Avis Budget Group, Inc. for basic and diluted EPS							Net income (loss) attributable to Avis Budget Group, Inc. for basic and diluted EPS		$	529	$	(170)

Basic weighted average shares outstanding	Basic weighted average shares outstanding		69.9		72.9		Basic weighted average shares outstanding		53.1		69.9
Non-vested stock (a)	Non-vested stock (a)		0		0		Non-vested stock (a)		1.4		—
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding		69.9		72.9		Diluted weighted average shares outstanding		54.5		69.9

Loss per share:
Earnings (loss) per share:							Earnings (loss) per share:
		Basic	$	(2.43)	$	(2.16)		Basic	$	9.96	$	(2.43)
		Diluted	$	(2.43)	$	(2.16)		Diluted	$	9.71	$	(2.43)

__________

(a)~~As the Company incurred a net loss for~~For the three months ended March 31, ~~2021~~2022 and ~~2020, 1.1~~2021, 0.1 million and ~~1.3~~1.1 million non-vested stock awards, respectively, 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, 2021		As of December 31, 2020			As of March 31, 2022		As of December 31, 2021
Prepaid expenses	Prepaid expenses	$	204	$	161	Prepaid expenses	$	246	$	205
Sales and use taxes	Sales and use taxes	139		147		Sales and use taxes	106		238
Other	Other	163		148		Other	87		95
Other current assets	Other current assets	$	506	$	456	Other current assets	$	439	$	538

6. Intangible Assets

Intangible assets consisted of:


		As of March 31, 2021						As of December 31, 2020							As of March 31, 2022						As of December 31, 2021
		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	$	275	$	159	$	116	$	280	$	151	$	129	License agreements	$	295	$	203	$	92	$	298	$	193	$	105
Customer relationships	Customer relationships	261		198		63		268		196		72		Customer relationships	253		204		49		257		204		53
Other	Other	52		33		19		54		33		21		Other	49		36		13		51		36		15
Total	Total	$	588	$	390	$	198	$	602	$	380	$	222	Total	$	597	$	443	$	154	$	606	$	433	$	173

Unamortized Intangible Assets	Unamortized Intangible Assets													Unamortized Intangible Assets
Goodwill	Goodwill	$	1,121					$	1,137					Goodwill	$	1,096					$	1,108
Trademarks	Trademarks	$	552					$	552					Trademarks	$	552					$	551

For the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, amortization expense related to amortizable intangible assets was ~~approximately~~approximately $16 million and $18 ~~million and $13~~ million, respectively. Based on ~~the Company’s~~our amortizable intangible assets at March 31, ~~2021, the Company expects~~2022, we expect amortization expense of approximately ~~$40~~$30 million for the remainder of ~~2021, $34~~2022, $27 million ~~for 2022, $25 million~~ for 2023, ~~$22~~$23 million for 2024, ~~$17~~$16 million for 2025, ~~and $15~~$15 million for 2026 and $12 million for 2027, excluding effects of currency exchange rates.

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7. Vehicle Rental Activities

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


		As of		As of			As of		As of
		March 31,		December 31,			March 31,		December 31,
		2021		2020			2022		2021
Rental vehicles	Rental vehicles	$	10,251	$	9,210	Rental vehicles	$	15,768	$	14,612
Less: Accumulated depreciation	Less: Accumulated depreciation	(1,288)		(1,337)		Less: Accumulated depreciation	(1,955)		(1,911)
		8,963		7,873			13,813		12,701
Vehicles held for sale	Vehicles held for sale	138		280		Vehicles held for sale	174		165
Vehicles, net	Vehicles, net	$	9,101	$	8,153	Vehicles, net	$	13,987	$	12,866

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


		Three Months Ended March 31,				Three Months Ended March 31,
		2021		2020				2022		2021
Depreciation expense	Depreciation expense	$	259	$	414		Depreciation expense	$	381	$	259
Lease charges	Lease charges	44		56			Lease charges	33		44
(Gain) loss on sale of vehicles, net	(Gain) loss on sale of vehicles, net	(49)		(11)			(Gain) loss on sale of vehicles, net	(303)		(49)
Vehicle depreciation and lease charges, net	Vehicle depreciation and lease charges, net	$	254	$	459		Vehicle depreciation and lease charges, net	$	111	$	254

At March 31, 2022 and 2021, ~~and 2020, the Company~~we had payables related to vehicle purchases included in liabilities under vehicle programs - other of ~~$344~~$150 million and ~~$240~~$344 million, respectively, and receivables related to vehicle sales included in assets under vehicle programs - receivables from vehicle manufacturers and ~~other~~other of $64 million and $195 million, ~~and $491 million,~~ respectively.

8. Income Taxes

~~The Company’s~~Our effective tax rate for the three months ended March 31, 2022 and 2021 were provision and ~~2020 were benefits of 32.0% and 40.4%~~(benefit) of 24.2% and (32.0)%, respectively. Such rates 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,
		2021		2020			2022		2021
Short-term operating lease liabilities	Short-term operating lease liabilities	$	519	$	514	Short-term operating lease liabilities	$	536	$	496
Accounts payable	Accounts payable	458		394		Accounts payable	513		407
Deferred lease revenues - current						Deferred lease revenues - current	322		185
Accrued advertising and marketing						Accrued advertising and marketing	248		218
Accrued sales and use taxes	Accrued sales and use taxes	214		215		Accrued sales and use taxes	225		313
Public liability and property damage insurance liabilities – current		166		162
Deferred lease revenues – current		151		70
Accrued payroll and related	Accrued payroll and related	136		117		Accrued payroll and related	175		193
Accrued advertising and marketing		124		122
Public liability and property damage insurance liabilities - current						Public liability and property damage insurance liabilities - current	160		159
Other	Other	403		440		Other	496		418
Accounts payable and other current liabilities	Accounts payable and other current liabilities	$	2,171	$	2,034	Accounts payable and other current liabilities	$	2,675	$	2,389

1615

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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,
			2021			2020							2022			2021
6.375% Senior Notes			April 2024			$	0			$	350
4.125% euro-denominated Senior Notes	4.125% euro-denominated Senior Notes	November 2024		351				366		4.125% euro-denominated Senior Notes		November 2024		$	332		$	341
5.250% Senior Notes		March 2025		235				375
4.500% euro-denominated Senior Notes	4.500% euro-denominated Senior Notes	May 2025		293				305		4.500% euro-denominated Senior Notes		May 2025		277			284
10.500% Senior Secured Notes		May 2025		0				487
4.750% euro-denominated Senior Notes	4.750% euro-denominated Senior Notes	January 2026		410				428		4.750% euro-denominated Senior Notes		January 2026		387			398
5.750% Senior Notes	5.750% Senior Notes	July 2027		725				724		5.750% Senior Notes		July 2027		729			728
4.750% Senior Notes	4.750% Senior Notes	April 2028		500				0		4.750% Senior Notes		April 2028		500			500
5.375% Senior Notes	5.375% Senior Notes	March 2029		600				0		5.375% Senior Notes		March 2029		600			600
Floating Rate Term Loan (a)	Floating Rate Term Loan (a)	August 2027		1,196				1,199		Floating Rate Term Loan (a)		August 2027		1,184			1,187
Floating Rate Term Loan										Floating Rate Term Loan		March 2029		729			—
Other (b)	Other (b)			22				24		Other (b)				20			19
Deferred financing fees	Deferred financing fees			(49)				(48)		Deferred financing fees				(53)			(48)
Total	Total			4,283				4,210		Total				4,705			4,009
Less: Short-term debt and current portion of long-term debt	Less: Short-term debt and current portion of long-term debt			19				19		Less: Short-term debt and current portion of long-term debt				27			19
Long-term debt	Long-term debt			$	4,264			$	4,191	Long-term debt				$	4,678		$	3,990

__________

(a)The floating rate term loan is part of ~~the Company’s~~our senior revolving credit facility, which is secured by pledges of capital stock of certain ~~subsidiaries~~ of ~~the Company,~~our subsidiaries, and liens on substantially all of ~~the Company’s~~our intellectual property and certain other real and personal property. As of March 31, ~~2021,~~2022, the floating rate term loan due 2027 bears interest at one-month LIBOR plus ~~225~~175 basis points, for an aggregate rate of ~~2.36%~~2.21%. ~~The Company has~~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 ~~4.58%~~4.75%.

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

In March ~~2021, the Company issued $600~~2022, we entered into a $750 million ~~of 5.375% Senior Notes~~Floating Rate Term Loan due March 2029, at ~~par,~~a price of 97% of the aggregate principal amount, with interest paid ~~semiannually. Net proceeds, together with cash on hand, were used to redeem all~~monthly, which is part of ~~the outstanding 10.5% Senior Secured Notes due 2025 for $599 million plus accrued interest.~~

~~In March 2021, the Company issued $500 million of 4.75% Senior Notes~~our senior credit facilities. The Floating Rate Term Loan due March ~~2028,~~2029 bears interest at ~~par, with interest paid semiannually. Net proceeds, together with cash on hand, were used to redeem all~~one-month Secured Overnight Financing Rate (“SOFR”) plus 350 basis points for an aggregate rate of ~~the outstanding 6.375% Senior Notes due 2024 for $356 million plus accrued interest and a portion of its outstanding 5.25% Senior Notes due 2025 for $142 million plus accrued interest.~~

~~The 5.375% and 4.75% notes are guaranteed on a senior unsecured basis by the Company and certain of the Company’s subsidiaries.~~4.00%.

Committed Credit Facilities and Available Funding Arrangements

AtAs of March 31, ~~2021,~~2022, the committed corporate credit facilities available to ~~the Company~~us and/or ~~its~~our subsidiaries were as follows:

Total
Capacity Outstanding
Borrowings Letters of Credit Issued Available
Capacity
Senior revolving credit facility maturing 2023 (a)
$ 1,800 $ 0 $ 1,230 $ 570


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

__________

(a)The senior revolving credit facility bears interest at one-month LIBOR plus ~~250~~175 basis points and is part of ~~the Company’s~~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 ~~subsidiaries~~ of ~~the Company,~~our subsidiaries, liens on substantially all of ~~the Company’s~~our intellectual property and certain other real and personal property.

Debt Covenants

The agreements governing ~~the Company’s~~our indebtedness contain restrictive covenants, including restrictions on dividends paid to ~~the Company~~us by certain of ~~its~~our subsidiaries, the incurrence of additional indebtedness by ~~the Company~~us and certain of ~~its~~our subsidiaries, acquisitions, mergers, liquidations, and sale and leaseback

~~Table of Contents~~

transactions. ~~The Company’s~~Our senior credit facility also contains a maximum leverage ratio ~~requirement which has been amended to provide a holiday from such leverage covenant through June 30, 2021 (See Note 1~~ – ~~Basis of Presentation).~~requirement. As of March 31, ~~2021, the Company was~~2022, we were in compliance with the financial covenants governing ~~its~~our indebtedness.

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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,
		2021		2020			2022		2021
Americas - Debt due to Avis Budget Rental Car Funding	Americas - Debt due to Avis Budget Rental Car Funding	$	6,181	$	5,116	Americas - Debt due to Avis Budget Rental Car Funding	$	9,779	$	8,889
Americas - Debt borrowings	Americas - Debt borrowings	499		509		Americas - Debt borrowings	615		612
International - Debt borrowings	International - Debt borrowings	1,020		1,115		International - Debt borrowings	1,573		1,757
International - Finance leases	International - Finance leases	140		162		International - Finance leases	156		177

Other						Other	19		3
Deferred financing fees (a)	Deferred financing fees (a)	(39)		(45)		Deferred financing fees (a)	(43)		(48)
Total	Total	$	7,801	$	6,857	Total	$	12,099	$	11,390

__________

(a)Deferred financing fees related to Debt due to Avis Budget Rental Car Funding as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 were ~~$32~~$36 million and ~~$36~~$41 million, respectively.

Debt Maturities

The following table provides the contractual maturities of ~~the Company’s~~our debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding, at March 31, ~~2021.~~2022:


	Debt under Vehicle Programs (a)
Within 1 year (b)	$	~~1,858~~2,145
Between 1 and 2 years (c)	~~2,171~~1,413
Between 2 and 3 years (d)	~~1,253~~5,545
Between 3 and 4 years	~~1,598~~1,532
Between 4 and 5 years	~~960~~1,507
~~Thereafter~~	0
Total	$	~~7,840~~12,142

__________

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

(b) Includes ~~$0.4~~$0.8 billion of bank and bank-sponsored facilities.

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

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Committed Credit Facilities and Available Funding Arrangements

As of March 31, ~~2021,~~2022, available funding under ~~the Company’s~~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	$	9,011	$	6,181	$	2,830	Americas - Debt due to Avis Budget Rental Car Funding	$	10,103	$	9,779	$	324
Americas - Debt borrowings	Americas - Debt borrowings	746		499		247		Americas - Debt borrowings	985		615		370
International - Debt borrowings	International - Debt borrowings	2,713		1,020		1,693		International - Debt borrowings	2,590		1,573		1,017
International - Finance leases	International - Finance leases	204		140		64		International - Finance leases	192		156		36

Other								Other	19		19		—
Total	Total	$	12,674	$	7,840	$	4,834	Total	$	13,889	$	12,142	$	1,747

__________

(a) Capacity is subject to maintaining sufficient assets to collateralize debt.

(b) The outstanding debt is collateralized by vehicles and related assets of ~~$7.4~~$11.5 billion for Americas - Debt due to Avis Budget Rental Car Funding; ~~$0.7~~$0.9 billion for Americas - Debt borrowings; ~~$1.2~~$2.0 billion for International - Debt borrowings; and $0.2 billion for International - Finance leases.

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Debt Covenants

The agreements under ~~the Company’s~~our vehicle-backed funding programs contain restrictive covenants, including restrictions on dividends paid to ~~the Company~~us by certain of ~~its~~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, ~~2021, the Company is~~2022, we are not aware of any instances of non-compliance with any of the financial covenants contained in the debt agreements under ~~its~~our vehicle-backed funding programs.

12. Commitments and Contingencies

Contingencies

In 2006, ~~the Company~~we completed the spin-offs of ~~its~~our Realogy and Wyndham subsidiaries. ~~The Company does~~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 ~~the Company~~us in relation to ~~its~~our consolidated financial position or liquidity, as Realogy and Wyndham each have agreed to assume responsibility for these liabilities. ~~The Company is~~We are also named in litigation that is primarily related to the businesses of ~~its~~our former subsidiaries, including Realogy and Wyndham. ~~The Company is~~We are entitled to indemnification from such entities for any liability resulting from such litigation.

In ~~February 2017, following state court trials~~November 2011, Jose Mendez v. Avis Budget Group Inc., et al. was filed in ~~Georgia,~~U.S. District Court for the ~~Company was found liable for~~District of New Jersey. The plaintiff seeks to represent a purported nationwide class and 2 sub-classes of certain renters of vehicles from our Avis and Budget subsidiaries from April 2007 through December 2015. The plaintiff seeks damages in connection with claims relating to our electronic toll service, including that administrative fees and toll charges were not properly disclosed to customers and/or were excessive. Plaintiff’s motion for class certification was approved by the Court in November 2017. The parties are currently engaged in settlement discussions. We have been named as a defendant in other purported consumer class action law suits, including a class action filed against us in Florida seeking damages in connection with a breach of contract claim and two ~~cases brought~~purported class action suits filed against us in New Jersey, one related to fines and fees charged to car renters by ~~plaintiffs who were injured in a vehicle accident allegedly caused by an employee~~us for violations incurred during the course of ~~an independent contractor of~~their rental and another related to ancillary charges at our Payless subsidiary. In the Company who was acting outside of the scope of employment. In fourth quarter 2019, the Company appealed both verdicts resulting in a reversal of the judgments rendered. The Georgia Supreme Court granted the plaintiffs’ application to review the appellate court’s reversal of the judgements entered at the trial court. The Georgia Supreme Court heard oral arguments in December 2020 and on May 3, 2021 issued a decision affirming the appellate court’s judgments. Following the issuance of this decision, plaintiffs have the ability to fileFlorida lawsuit, a motion for ~~reconsideration. The Company~~preliminary approval of a proposed settlement has ~~recognized a liability related to these cases, net of recoverable insurance proceeds, of approximately $12 million.~~been filed with the Court.

~~The Company is~~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 ~~its~~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 ~~the Company believes~~we believe that ~~its~~our accruals are adequate and/or that ~~it has~~we have valid defenses in these matters, unfavorable resolutions could occur. ~~The Company estimates~~We estimate that the potential exposure resulting from adverse outcomes of current legal proceedings in which it is reasonably possible that a loss may be incurred could, in the aggregate, be up to approximately ~~$40~~$35 million in excess of amounts accrued as of

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March 31, ~~2021. The Company does~~2022. We do not believe that the impact should result in a material liability to ~~the Company~~us in relation to ~~its~~our consolidated financial condition or results of operations.

Commitments to Purchase Vehicles

~~The Company maintains~~We maintain agreements with vehicle manufacturers under which ~~the Company has~~we have agreed to purchase approximately ~~$6.4~~$5.1 billion of vehicles from manufacturers over the next 12 months, a ~~$2.3~~$0.8 billion decrease compared to December 31, ~~2020,~~ 2021, financed primarily through the issuance of vehicle-backed debt and cash received upon the disposition of vehicles. Certain of these commitments are subject to the vehicle manufacturers satisfying their obligations under their respective repurchase and guaranteed depreciation agreements.

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Concentrations

Concentrations of credit risk atas of March 31, ~~2021~~2022 include (i) risks related to ~~the Company’s~~our repurchase and guaranteed depreciation agreements with domestic and foreign car manufacturers, primarily with respect to receivables for program cars that have been disposed but for which ~~the Company has~~we have not yet received payment from the manufacturers and (ii) risks related to Realogy and Wyndham, including receivables of ~~$25~~$26 million and ~~$15~~$16 million, ~~respectively,~~respectively, related to certain contingent, income tax and other corporate liabilities assumed by Realogy and Wyndham in connection with their disposition.

13. Stockholders’ Equity

Share Repurchases

~~The Company’s~~Our Board of Directors has authorized the repurchase of up ~~to $1.8~~to $5.1 billion of ~~its~~our common stock under a plan originally approved in 2013 and subsequently expanded most recently in ~~August 2019.~~March 2022 (the “Stock Repurchase Program”). During the ~~first quarter of 2021, the Company has~~three months ended March 31, 2022, we repurchased approximately ~~0.1~~6.4 million shares of common stock at a cost of approximately ~~$10 million~~$1.3 billion under the program. As of March 31, ~~2021,~~2022, approximately ~~$66~~$652 million of authorization remains available to repurchase common stock under ~~this plan.~~

~~Share Issuances~~

~~On February 10, 2020,~~ the Company announced it had appointed a new Chairman of the Board of Directors and in connection with this appointment, the new Chairman purchased an aggregate $15 million of unregistered shares of the Company’s common stock at a price per share equal to the closing price of the Company’s common stock on February 7, 2020.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).

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

Three Months Ended
March 31,
2021 2020
Net loss $ (170) $ (158)
Other comprehensive income (loss):
Currency translation adjustments (net of tax of $(12) and $(4), respectively) (14) (83)
Net unrealized gain (loss) on cash flow hedges (net of tax of $3 and $6, respectively) 35 (18)
Minimum pension liability adjustment (net of tax of $0 and $0, respectively) 3 2
24 (99)
Comprehensive loss $ (146) $ (257)

~~Table of Contents~~


		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)

__________

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

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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)					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)
											Other comprehensive income (loss) before reclassifications		7			26			—			33
													Amounts reclassified from accumulated other comprehensive income (loss)	—			4			2			6
Net current-period other comprehensive income (loss)												Net current-period other comprehensive income (loss)		7			30			2			39
Balance, March 31, 2022												Balance, March 31, 2022		$	23		$	11		$	(128)		$	(94)

Balance, January 1, 2021	Balance, January 1, 2021		$	40	$	(51)	$	(176)	$	(187)		Balance, January 1, 2021		$	40		$	(51)		$	(176)		$	(187)
		Other comprehensive income (loss) before reclassifications	(14)		32		1		19				Other comprehensive income (loss) before reclassifications	(14)			32			1			19
		Amounts reclassified from accumulated other comprehensive income (loss)	0		3		2		5				Amounts reclassified from accumulated other comprehensive income (loss)	—			3			2			5
Net current-period other comprehensive income (loss)	Net current-period other comprehensive income (loss)		(14)		35		3		24			Net current-period other comprehensive income (loss)		(14)			35			3			24
Balance, March 31, 2021	Balance, March 31, 2021		$	26	$	(16)	$	(173)	$	(163)		Balance, March 31, 2021		$	26		$	(16)		$	(173)		$	(163)

Balance, January 1, 2020			$	9	$	(20)	$	(146)	$	(157)
		Other comprehensive income (loss) before reclassifications	(83)		(18)		1		(100)
		Amounts reclassified from accumulated other comprehensive income (loss)	0		0		1		1
Net current-period other comprehensive income (loss)			(83)		(18)		2		(99)
Balance, March 31, 2020			$	(74)	$	(38)	$	(144)	$	(256)

__________

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 ~~a $47~~$90 million gain, net of tax, as of March 31, ~~2021~~2022 related to ~~the Company’s~~our hedge of ~~its net~~our investment in euro-denominated foreign ~~operations~~operations (see Note ~~15–~~16–Financial Instruments).

(a)For the three months ended March 31, 2022 and 2021, the ~~amount~~amounts reclassified from accumulated other comprehensive income (loss) into corporate interest expense ~~was~~were $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, ~~2021~~2022 and ~~2020,~~2021, amounts reclassified from accumulated other comprehensive income (loss) into selling, general and administrative expenses were $3 million ($2 million, net of tax) and $2 $3 million ($12 million, net of tax), ~~respectively..~~respectively.

14. Related Party Transactions

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.

15. Stock-Based Compensation

~~The Company~~We recorded stock-based compensation expense of $6 million and $4 million ($4 millionand ~~$(2) million ($3 million and $(1)~~$3 million, net of tax) during the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively.

In ~~June~~ 2020, ~~the Company~~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						0%—%

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

~~Table of Contents~~


				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, 2021		1,070	$	27.47					Outstanding at January 1, 2022		671	$	39.39
			Granted (a)	240	63.12							Granted (a)	67	194.74
			Vested (b)	(375)	30.05							Vested (b)	(260)	34.00
			Forfeited	(7)	25.35							Forfeited	(6)	36.03
		Outstanding and expected to vest at March 31, 2021 (c)		928	$	35.66	1.3	$	67		Outstanding and expected to vest at March 31, 2022 (c)		472	$	64.49	1.1	$	124
Performance-based and market-based RSUs	Performance-based and market-based RSUs									Performance-based and market-based RSUs
		Outstanding at January 1, 2021		988	$	32.41					Outstanding at January 1, 2022		886	$	35.40
			Granted (a)	236	62.27							Granted (a)	96	194.74
			Vested (b)	0	0							Vested (b)	(163)	34.82
			Forfeited	(272)	48.72							Forfeited	(15)	32.42
		Outstanding at March 31, 2021		952	$	35.14	2.0	$	69		Outstanding at March 31, 2022		804	$	54.58	1.5	$	212
		Outstanding and expected to vest at March 31, 2021 (c)		203	$	54.59	2.8	$	15		Outstanding and expected to vest at March 31, 2022 (c)		796	$	53.17	1.5	$	210

__________

(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 ~~and market-based~~ RSUs granted during the three months ended March 31, ~~2020~~2021 was ~~$21.67~~$63.12 and ~~$21.09,~~$62.27, respectively.

(b)The total fair value of RSUs vested during the three months ended March 31, 2022 and 2021 ~~and 2020~~ was ~~$11~~$15 million and ~~$17~~$11 million, respectively.

(c)Aggregate unrecognized compensation expense related to time-based RSUs and performance-based and market-based RSUs amounted to ~~$39~~ $55 million and will be recognized over a weighted average vesting period of ~~1.6~~1.4 years.

~~15.~~16. Financial Instruments

Derivative Instruments and Hedging Activities

Currency Risk. ~~The Company uses~~We use currency exchange contracts to manage ~~its~~our exposure to changes in currency exchange rates associated with certain of ~~its~~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. ~~The Company~~We primarily ~~hedges~~hedge a portion of ~~its~~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. ~~The Company has~~We have designated ~~its~~our euro-denominated notes as a hedge of ~~its~~our investment in euro-denominated foreign operations.

The estimated net amount of existing gains or losses ~~the Company expects~~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. ~~The Company uses~~We use various hedging strategies including interest rate swaps and interest rate caps to create what ~~it deems~~we deem an appropriate mix of fixed and floating rate assets and liabilities. ~~The Company uses~~We use interest rate swaps and interest rate caps to manage the risk related to ~~its~~our floating rate corporate debt and ~~its~~our floating rate vehicle-backed debt. ~~The Company records~~We record the changes in the fair value of ~~its~~our cash flow hedges to other comprehensive income (loss), net of tax, and subsequently ~~reclassifies~~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. ~~The Company records~~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. ~~The Company estimates~~We estimate that approximately ~~$20~~$9 million of losses currently recorded in accumulated other comprehensive income (loss) will be recognized in earnings over the next 12 months.

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Commodity Risk. ~~The Company~~We periodically ~~enters~~enter into derivative commodity contracts to manage ~~its~~our exposure to changes in the price of gasoline. These instruments were designated as freestanding

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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.

~~The Company~~We held derivative instruments with absolute notional values as follows:


	As of March 31, ~~2021~~2022
Foreign exchange contracts	$	~~1,711~~1,914
Interest rate caps (a)	~~8,686~~11,724
Interest rate swaps	~~1,950~~1,450

__________

(a)~~Represents $5.8~~Represents $7.1 billion of interest rate caps sold, partially offset by approximately ~~$2.8~~$4.6 billion of interest rate caps purchased. These amounts exclude $3.0 billion of interest rate caps purchased by ~~the Company’s~~our Avis Budget Rental Car Funding subsidiary as it is not consolidated by ~~the Company.~~us.

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


			As of March 31, 2021				As of December 31, 2020						As of March 31, 2022				As of December 31, 2021
			Fair Value, Derivative Assets		Fair Value, Derivative Liabilities		Fair Value, Derivative Assets		Fair Value, Derivative Liabilities				Fair Value, Derivative Assets		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)	$	6	$	43	$	0	$	69		Interest rate swaps (a)	$	24	$	9	$	2	$	27

Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments										Derivatives not designated as hedging instruments
		Foreign exchange contracts (b)	16		11		3		11			Foreign exchange contracts (b)	5		7		7		10
		Interest rate caps (c)	1		1		0		0			Interest rate caps (c)	30		48		11		15

		Total	$	23	$	55	$	3	$	80		Total	$	59	$	64	$	20	$	52

__________

Amounts in this table exclude derivatives issued by Avis Budget Rental Car Funding, as it is not consolidated by ~~the Company;~~us; however, certain amounts related to the ~~derivatives~~derivatives held by Avis Budget Rental Car Funding are included within accumulated other comprehensive income (loss), as discussed in Note 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 ~~the Company’s~~our Consolidated Condensed Financial Statements were as follows:


			Three Months Ended March 31,						Three Months Ended March 31,
			2021		2020				2022		2021
Derivatives designated as hedging instruments (a)	Derivatives designated as hedging instruments (a)						Derivatives designated as hedging instruments (a)
		Interest rate swaps (b)	$	35	$	(18)		Interest rate swaps (b)	$	30	$	35
		Euro-denominated notes (c)	33		11			Euro-denominated notes (c)	20		33
Derivatives not designated as hedging instruments (d)	Derivatives not designated as hedging instruments (d)						Derivatives not designated as hedging instruments (d)
		Foreign exchange contracts (e)	(8)		27			Foreign exchange contracts (e)	12		(8)
		Interest rate swap (f)	(1)		0			Interest rate caps (f)	2		(1)
		Commodity contracts (g)	0		(7)
		Total	$	59	$	13		Total	$	64	$	59

__________

(a)Recognized, net of tax, as a component of 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’ 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, ~~2021,~~2022, included a $7$12 million ~~loss~~gain in interest ~~expense and a $1 million loss in operating~~expense. For the three months ended

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~~expense. For the three months ended~~ March 31, ~~2020,~~2021, included ~~$28~~a $7 million ~~gain~~loss in interest expense and a $1 million loss in operating expense.

(f)Included primarily in vehicle interest, net.

~~(g)Included in operating expense.~~

Debt Instruments

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

As of March 31, 2021 As of December 31, 2020
Carrying
Amount Estimated
Fair
Value Carrying
Amount Estimated
Fair
Value
Corporate debt
Short-term debt and current portion of long-term debt $ 19 $ 19 $ 19 $ 18
Long-term debt 4,264 4,408 4,191 4,337
Debt under vehicle programs
Vehicle-backed debt due to Avis Budget Rental Car Funding $ 6,149 $ 6,429 $ 5,080 $ 5,317
Vehicle-backed debt 1,649 1,668 1,775 1,796
Interest rate swaps and interest rate caps (a)
3 3 2 2


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

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	2,308		2,313		2,528		2,559
	Interest rate swaps and interest rate caps (a)	48		48		14		14

__________

(a) Derivatives in a liability position.

~~16.~~17. Segment Information

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

Management evaluates the operating results of each of its reportable segments based upon revenues and “Adjusted EBITDA,” which ~~the Company defines~~we define as income (loss) from continuing operations before non-vehicle related depreciation and amortization, any impairment charges, restructuring and other related charges, early extinguishment of debt costs, non-vehicle related interest, transaction-related costs, net, charges for unprecedented personal-injury and other legal matters, net, which includes amounts recorded in excess of $5 million related to class action lawsuits, non-operational charges related to shareholder activist activity, which include third party advisory, legal and other professional service fees, ~~gain on sale of equity method investment in China,~~ COVID-19 charges and income taxes. 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 losses associated with vehicles damaged in overflow parking lots, net of insurance proceeds. ~~The Company’s~~Our presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.

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				Three Months Ended March 31,											Three Months Ended March 31,
				2021				2020							2022					2021
				Revenues		Adjusted EBITDA		Revenues		Adjusted EBITDA					Revenues			Adjusted EBITDA		Revenues			Adjusted EBITDA
Americas	Americas			$	1,080	$	108	$	1,257	$	(30)	Americas			$	2,000		$	810	$	1,080		$	108
International	International			292		(50)		496		(40)		International			432			23		292			(50)
Corporate and Other (a)	Corporate and Other (a)			0		(11)		0		(17)		Corporate and Other (a)			—			(23)		—			(11)
		Total Company		$	1,372	$	47	$	1,753	$	(87)		Total Company		$	2,432		$	810	$	1,372		$	47

Reconciliation of Adjusted EBITDA to income (loss) before income taxes
Reconciliation of Adjusted EBITDA to income (loss) before income taxes:												Reconciliation of Adjusted EBITDA to income (loss) before income taxes:
						2021				2020								2022					2021
Adjusted EBITDA	Adjusted EBITDA					$	47			$	(87)	Adjusted EBITDA						$	810				$	47
Less:	Less:		Non-vehicle related depreciation and amortization			68				69		Less:		Non-vehicle related depreciation and amortization (b)				60					68
			Interest expense related to corporate debt, net:											Interest expense related to corporate debt, net:
			Interest expense			61				48				Interest expense				53					61
			Early extinguishment of debt			129				4				Early extinguishment of debt				—					129
			Restructuring and other related charges			20				44				Restructuring and other related charges				8					20
			COVID-19 charges (b)			18				7				Unprecedented personal-injury and other legal matters, net (c)				1					—
			Transaction-related costs, net			1				2				Transaction-related costs, net				—					1
			Non-operational charges related to shareholder activist activity (c)			0				4

													COVID-19 charges (d)				(7)					18
Loss before income taxes						$	(250)			$	(265)
Income (loss) before income taxes												Income (loss) before income taxes						$	695				$	(250)

__________

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

(b)For three months ended March 31, 2021 consists of $17 million within operating expenses and $1 million within selling, general and administrative expenses, primarily consisting of $19 million of minimum annual guaranteed rent in excess of concession fees, $5 million of other charges and $(6) million associated with vehicles damaged in overflow parking lots, net of insurance proceeds. For the three months ended March 31, ~~2020, consists of $7 million within~~2022, includes operating expenses ~~primarily consisting~~in our Consolidated Condensed Statements of ~~$5 million associated with vehicles damaged in overflow parking lots, net~~Operations related to cloud computing costs of ~~insurance proceeds and~~ $2 ~~million of incremental cleaning supplies to sanitize vehicles and facilities, and over flow parking.~~million.

(c)Reported within ~~selling, general~~operating expenses.

(d)The following table presents the unusual, direct and ~~administrative expenses.~~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, ~~2020,~~2021, there have been no significant changes in segment assets exclusive of assets under vehicle programs. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, Americas’ segment assets under vehicle programs were ~~approximately $8.2~~approximately $12.7 billion and ~~$7.2 billion, respectively, and International segment assets under vehicle programs were approximately $1.9 billion and $2.0~~$11.4 billion, respectively. The changes in assets under vehicle programs is primarily due to the increase in the size of our vehicle rental fleet to meet ~~increase~~increases in rental demand.

18. Subsequent Events

In April 2022, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued $660 million of asset-backed notes to investors with an expected final payment date of August 2027, with a weighted average interest rate of 3.96%.

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.

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 ~~2020~~2021 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” 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 ~~during 2020~~ of ~~nearly 533,000 vehicles.~~over 590,000 vehicles in first quarter 2022. We also license the use of our trademarks to licensees in the areas in which we do not operate directly. We and our licensees operate our brands in approximately 180 countries throughout the world.

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

Business and Trends

~~The positive momentum from~~Over the ~~fourth quarter of 2020 carried into the first quarter 2021, during which~~past year, we generated revenues of $1,372 million, net loss of $170 million and Adjusted EBITDA of $47 million. These results were driven by disciplined cost removal achieved in 2020 and continued fleet management. Our utilization was 67%, a 5.1 point improvement compared to fourth quarter 2020, showing our ability to align our fleet with demand, and per-unit fleet costs per month decreased to $205, or 3% compared to fourth quarter 2020. Revenue per day increased to $55.24, or 2%, compared to fourth quarter 2020.

~~As the world is looking forward to the easing of restrictions put in place due to COVID-19, there are~~have seen a number of encouraging developments, such as ~~widespread distribution of effective vaccines,~~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,~~trends. Our strategy continues to focus on cost optimization, core revenue growth and ~~we have positioned ourselves~~capital investments aimed to allow us to maximize our infrastructure to capitalize on ~~the expected~~what we believe will be a continued surge in travel demand. ~~Although our~~During the quarter ended March 31, 2022, we generated revenues ~~have yet to reach pre-pandemic levels, we have taken actions to put us on a path~~ of ~~profitability. We continue to look~~$2.4 billion, net income of $527 million and Adjusted EBITDA of $810 million. These results were driven by increased demand for ~~ways to capitalize on~~rental vehicles, improved pricing across the ~~changes prompted by the pandemic~~industry, disciplined cost management and ~~to expand our business in a post-COVID-19 environment.~~continued fleet management.

~~Although we have seen substantial improvement, these trends could be delayed if~~The full extent of the ongoing ~~effects~~impact of the COVID-19 pandemic on our long-term operational and financial performance will depend on future developments, including those outside of our control, such as the spread of new variants of the virus ~~were to bring a significant shift in~~and the implementation of new or continued travel restrictions and the overall economic environment. These variants could cause prolonged impacts on the economy, our industry and ~~consumer choices or if travel demand does not return~~on us, with reductions in available staffing and increasing inflation, among other impacts. We will continue to ~~pre-pandemic levels.~~monitor 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 impact on our business, financial condition or forecast financial or operational results with reasonable certainty.

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.

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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 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 usmanagement with the most relevant metrics in order to effectively manage the performance of the business. Our calculation may not be comparable to the calculation of similarly-titled metrics by other companies. We present currency exchange rate effects to provide a method of assessing how our business performed excluding the effects of foreign currency rate fluctuations. Currency exchange rate effects are calculated by translating the current-year results at the prior-period average exchange rate plus any related gains and losses on currency hedges.

We assess performance and allocate resources based upon the separate financial information of our operating segments. In identifying our reportable segments, we also consider the nature of services provided by our operating segments, the geographical areas in which our segments operate and other relevant factors. Management evaluates the operating results of each of our reportable segments based upon revenues and “Adjusted EBITDA,” which we define as income from continuing operations before non-vehicle related depreciation and amortization, any impairment charges, restructuring and other related charges, early extinguishment of debt costs, non-vehicle related interest, transaction-related costs, net, charges for unprecedented personal-injury and other legal matters, net, which includes amounts recorded in excess of $5 million related to class action lawsuits, non-operational charges related to shareholder activist activity, which include third party advisory, legal and other professional ~~service~~ fees, ~~gain on sale of equity method investment in China,~~ COVID-19 charges, 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.~~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 measures used by other companies.

During the three months ended March 31, ~~2021:~~2022:

•Our revenues totaled ~~$1.4~~$2.4 billion, ~~and decreased 22%~~an increase of 77% compared to the similar period in ~~2020,~~2021, primarily due to ~~reduced~~a significant increase in pricing and increased demand for rental ~~volume due~~vehicles. The significant increase in revenues was a direct result of the global effort to ~~impacts directly related~~combat the incidence and spread of the COVID-19 virus, which led to ~~COVID-19.~~

a significant increase in global travel demand, suggesting a steady return to historic travel levels.

•Our net ~~loss~~income was ~~$170~~$527 million, representing an ~~increased loss~~increase of ~~$12~~$697 million year-over-year, primarily due to ~~premiums paid for the early redemption of our corporate debt, partially offset by strategic~~significantly higher revenues, as described above, in addition to disciplined cost ~~reduction initiatives to right size the business.~~

management.

•Our Adjusted EBITDA was ~~$47~~$810 million, representing ana significant increase of ~~$134~~$763 million year-over-year, primarily due to ~~a 20% decrease in per-unit fleet costs, excluding exchange rate effects~~significantly higher revenues and ~~strategic~~disciplined cost ~~reduction initiatives to right size the business, partially offset by impacts directly related to COVID-19.~~

management.

•We repurchased ~~$10 million~~approximately $1.3 billion of our common stock, reducing our shares outstanding by approximately ~~0.1~~6.4 million shares.

•~~We issued $600 million and $500 million~~Table of ~~5.375% Senior Notes~~Contents

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

Our consolidated condensed results of operations comprised 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

___________

n/m - Not Meaningful

Revenues increased $1.1 billion, or 77%, during the three months ended March 31, 2022 compared to the similar period in 2021, primarily due ~~March 2029 and 4.75% Senior Notes due March 2028, respectively, with proceeds used~~ to ~~redeem our 10.5% Senior Secured Notes due May 2025, our 6.375% Senior Notes due~~a 45% increase in ~~April 2024~~volume as the mobility industry recovers from the pandemic and a ~~portion~~24% increase in revenue per day, excluding exchange rate effects, partially offset by a $29 million negative impact from currency exchange rate movements. Total expenses increased 7% during the three months ended March 31, 2022, compared to the similar period in 2021, primarily due to increased demand, partially offset by cost discipline as volume returned. Our effective tax rates were a provision (benefit) of 24.2% and (32.0)% for the three months ended March 31, 2022 and 2021, respectively. As a result of these items, our ~~5.25% Senior Notes~~net income increased by $697 million compared to the similar period in 2021. For the three months ended March 31, 2022 and 2021, we reported earnings (losses) per diluted share of $9.71 and $(2.43), respectively.

Operating expenses decreased to 47.2% of revenue during the three months ended March 31, 2022 compared to 60.6% during the similar period in 2021, primarily due to the increased revenues and cost discipline as volume returned. Vehicle depreciation and lease charges decreased to 4.5% of revenue during the three months ended March 31, 2022 compared to 18.5% during the similar period in 2021, primarily due to increased revenues and a 68% lower per unit fleet cost, excluding exchange rate effects, driven by the continued favorable trend in the used-vehicle market. Selling, general and administrative costs decreased to 11.6% of revenue during the three months ended March ~~2025.~~31, 2022 compared to 13.3% during the similar period in 2021, primarily due to increased revenues and cost discipline as volume returned. Vehicle interest costs decreased to 3.2% of revenue during the three months ended March 31, 2022 compared to 5.5% during the similar period in 2021, primarily due to increased revenues.

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~~Three Months Ended March 31, 2021 vs. Three Months Ended March 31, 2020~~

~~Our consolidated condensed results of operations comprised the following:~~

Three Months Ended
March 31,
2021 2020
$ Change
% Change
Revenues $ 1,372 $ 1,753 $ (381) (22 %)
Expenses
Operating 832 1,058 (226) (21 %)
Vehicle depreciation and lease charges, net 254 459 (205) (45 %)
Selling, general and administrative 182 251 (69) (27 %)
Vehicle interest, net 75 83 (8) (10 %)
Non-vehicle related depreciation and amortization 68 69 (1) (1 %)
Interest expense related to corporate debt, net:
Interest expense 61 48 13 27 %
Early extinguishment of debt 129 4 125 n/m
Restructuring and other related charges 20 44 (24) (55 %)
Transaction-related costs, net 1 2 (1) (50 %)
Total expenses 1,622 2,018 (396) (20 %)
Loss before income taxes (250) (265) 15 6 %
Benefit from income taxes (80) (107) 27 25 %
Net loss $ (170) $ (158) $ (12) (8 %)

~~__________~~

~~n/m Not meaningful.~~

Revenues decreased during the three months ended March 31, 2021 compared to the similar period in 2020, primarily due to a 28% decrease in volume as a result of the impact of COVID-19, partially offset by a 6% increase in revenue per day excluding exchange rate movements and a $30 million positive impact from currency exchange rate movements. Total expenses decreased during the three months ended March 31, 2021, compared to the similar period in 2020, primarily due to strategic cost reduction initiatives and reduced operational activities as a result of the impact of COVID-19. Our effective tax rates were benefits of 32% and 40% for the three months ended March 31, 2021 and 2020, respectively. As a result of these items, our net loss increased by $12 million compared to the similar period in 2020. For the three months ended March 31, 2021 and 2020, the Company reported losses of $2.43 and $2.16 per diluted share, respectively.

Operating expenses increased to 60.6% of revenue during the three months ended March 31, 2021 compared to 60.3% during the similar period in 2020, primarily due to impacts directly related to COVID-19. Vehicle depreciation and lease charges decreased to 18.5% of revenue during the three months ended March 31, 2021 compared to 26.2% during the similar period in 2020, primarily due to 20% lower per-unit fleet costs per month, excluding exchange rate effects. Selling, general and administrative costs decreased to 13.3% of revenue during the three months ended March 31, 2021 compared to 14.3% during the similar period in 2020, primarily due to strategic cost reduction initiatives to right size the business. Vehicle interest costs increased to 5.5% of revenue during the three months ended March 31, 2021 compared to 4.7% during the similar period in 2020, primarily due to impacts directly related to COVID-19.

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

~~Table of Contents~~

Three Months Ended March 31,
2021 2020
Revenues Adjusted EBITDA Revenues Adjusted EBITDA
Americas $ 1,080 $ 108 $ 1,257 $ (30)
International 292 (50) 496 (40)
Corporate and Other (a)
— (11) — (17)
Total Company $ 1,372 $ 47 $ 1,753 $ (87)
Reconciliation to Adjusted EBITDA
2021 2020
Net loss $ (170) $ (158)
Benefit from income taxes (80) (107)
Loss before income taxes (250) (265)
Add: Non-vehicle related depreciation and amortization 68 69
Interest expense related to corporate debt, net:
Interest expense 61 48
Early extinguishment of debt 129 4
Restructuring and other related charges 20 44
COVID-19 charges (b)
18 7
Non-operational charges related to shareholder activist activity (c)
— 4
Transaction-related costs, net 1 2
Adjusted EBITDA $ 47 $ (87)

~~__________~~


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

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

Add:		Non-vehicle related depreciation and amortization (b)					60		68
		Interest expense related to corporate debt, net:
		Interest expense					53		61
		Early extinguishment of debt					—		129
		Restructuring and other related charges					8		20
		Unprecedented personal-injury and other legal matters, net (c)					1		—
		Transaction-related costs, net					—		1
		COVID-19 charges (d)					(7)		18
Adjusted EBITDA							$	810	$	47

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

(b)~~For three months ended March 31, 2021, consists~~Includes cloud computing costs of ~~$17~~$2 million within operating expenses and $1 million within selling, general and administrative expenses in our consolidated condensed results of operations, primarily consisting of $19 million of minimum annual guaranteed rent in excess of concession fees, $5 million of other charges and $(6) million associated with vehicles damaged in overflow parking lots, net of insurance proceeds. For the three months ended March 31, 2020, consists of $7 million within operating expenses, primarily consisting of $5 million associated with vehicles damaged in overflow parking lots, net of insurance proceeds and $2 million of incremental cleaning supplies to sanitize vehicles and facilities, and over flow parking.expenses.

(c)Reported within ~~selling, general and administrative~~operating expenses in our consolidated condensed results of operations.

(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

Americas

Three Months Ended
March 31,
2021 2020 % Change
Revenues $ 1,080 $ 1,257 (14 %)
Adjusted EBITDA 108 (30) n/m

~~__________~~

~~n/m Not meaningful.~~


	Three Months Ended March 31,
	2022		2021		% Change
Revenues	$	2,000	$	1,080	85	%
Adjusted EBITDA	810		108		650	%

Revenues ~~decreased 14%~~increased 85% during the three months ended March 31, ~~2021~~2022 compared to the similar period in ~~2020,~~2021, primarily due to a ~~23% decrease~~52% increase in volume ~~partially offset by~~and a ~~12%~~21% increase in revenue per ~~day as a result of the impacts of COVID-19.~~day.

Operating expenses decreased to ~~57.9%~~44.8% of revenue during the three months ended March 31, ~~2021~~2022 compared to ~~58.7%~~57.9% during the similar period in ~~2020,~~2021, primarily due to ~~strategic~~increased revenues and cost ~~reduction initiatives to right size the business.~~discipline as volume returned. Vehicle depreciation and lease charges decreased to ~~17.0%~~1.3% of revenue during the three months ended March 31, ~~2021~~2022 compared to ~~26.4%~~17.0% during the similar period in ~~2020,~~2021, primarily due to ~~22% lower~~increased revenues and a 90% decrease in per-unit fleet ~~costs.~~costs, driven by the continued favorable trend in the used-vehicle market. Selling, general and administrative costs decreased to ~~10.6%~~9.8% of revenue during the three months ended March 31, ~~2021~~2022 compared to ~~12.3%~~10.6% during the similar period in ~~2020,~~2021, primarily due to ~~strategic~~increased revenues and cost ~~reduction initiatives to right size the business.~~discipline as volume returned. Vehicle interest costs ~~increased~~decreased to ~~5.8%~~3.3% of revenue during the three months ended March 31, ~~2021~~2022 compared to ~~5.6%~~5.8% during the similar period in ~~2020,~~2021, primarily due to ~~impacts directly related to COVID-19.~~

increased revenues.

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Adjusted EBITDA was ~~$138~~$702 million higher during the three months ended March 31, ~~2021~~2022 compared to the similar period in ~~2020,~~2021, primarily due to ~~strategic cost reduction initiatives to right size the business,~~increased revenues, lower per-unit fleet costs and ~~increased revenue per day.~~cost discipline as volume returned.

International

Three Months Ended
March 31,
2021 2020 % Change
Revenues $ 292 $ 496 (41 %)
Adjusted EBITDA (50) (40) 25 %


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

Revenues ~~decreased 41%~~increased 48% during the three months ended March 31, ~~2021,~~2022, compared to the similar period in ~~2020,~~2021, primarily due to a ~~38% decrease~~26% increase in volume and a ~~13% decrease~~25% increase in revenue per day, excluding exchange rate ~~movements as a result of the impacts of COVID-19,~~effects, partially offset by a ~~$28~~$29 million ~~benefit~~negative impact from currency exchange rate movements.

Operating expenses ~~increased~~decreased to ~~71.2%~~56.0% of revenue during the three months ended March 31, ~~2021~~2022 compared to ~~63.9%~~71.2% during the similar period in ~~2020,~~2021, primarily due to ~~impacts directly related to COVID-19.~~increased revenues and cost discipline as volume returned. Vehicle depreciation and lease charges decreased to ~~24.0%~~19.5% of revenue during the three months ended March 31, ~~2021~~2022 compared to ~~25.6%~~24.0% during the similar period in ~~2020,~~2021, primarily due to ~~16% lower~~increased revenues and a 1% decrease in per-unit fleet costs, excluding exchange rate ~~effects.~~effects, driven by the continued favorable trend in the used-vehicle market. Selling, general and administrative costs ~~increased~~decreased to ~~19.0%~~16.8% of revenue during the three months ended March 31, ~~2021~~2022 compared to ~~16.0%~~19.0% during the similar period in ~~2020,~~2021, primarily due to ~~impacts directly related to COVID-19.~~increased revenues and cost discipline as volume returned. Vehicle interest costs ~~increased~~decreased to ~~4.4%~~2.6% of revenue during the three months ended March 31, ~~2021~~2022 compared to ~~2.6%~~4.4% during the similar period in ~~2020,~~2021, primarily due to ~~impacts directly related to COVID-19.~~increased revenues.

Adjusted EBITDA was ~~$10~~$73 million ~~lower~~higher in first quarter ~~2021~~2022 compared to the similar period in ~~2020,~~2021, primarily due to ~~a $9 million negative impact from currency exchange rate movements,~~increased revenues, cost discipline as ~~lower revenues directly related to COVID-19 were offset by strategic cost reduction initiatives to right size the business~~volume returned and ~~lower~~decreased per-unit fleet costs.

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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, 2021		December 31, 2020		Change			March 31, 2022		December 31, 2021		Change
Total assets exclusive of assets under vehicle programs	Total assets exclusive of assets under vehicle programs	$	8,474	$	8,365	$	109	Total assets exclusive of assets under vehicle programs	$	8,437	$	8,581	$	(144)
Total liabilities exclusive of liabilities under vehicle programs	Total liabilities exclusive of liabilities under vehicle programs	9,160		9,053		107		Total liabilities exclusive of liabilities under vehicle programs	9,883		8,933		950
Assets under vehicle programs	Assets under vehicle programs	10,135		9,173		962		Assets under vehicle programs	15,136		14,019		1,117
Liabilities under vehicle programs	Liabilities under vehicle programs	9,765		8,640		1,125		Liabilities under vehicle programs	14,673		13,876		797
Stockholders’ equity	Stockholders’ equity	(316)		(155)		(161)		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.

The increases in assets under vehicle programs and liabilities under vehicle programs are principally related to the increase in the size 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 ~~loss.~~income.

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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 ~~2021,~~2022, we ~~issued $600~~entered into a $750 million ~~of 5.375% Senior Notes~~Floating Rate Term Loan due March 2029, at ~~par. We used~~a price of 97% of the proceeds, together with cash on hand, to redeem all of our outstanding 10.5% Senior Secured Notes due 2025. In March 2021, we issued $500 million of 4.75% Senior Unsecured Notes due March 2028. We used the proceeds, together with cash on hand, to redeem all of our outstanding 6.375% Senior Notes due in 2024 and $140 million in aggregate principal amount, with interest paid monthly, which is part of our ~~5.25% Senior Notes~~senior credit facilities. The Floating Rate Term Loan due ~~in 2025. We have no meaningful corporate debt maturities until 2023.~~March 2029 bears interest at one-month SOFR plus 350 basis points for an aggregate rate of 4.00%.

~~The Company~~’sOur Board of Directors has authorized the repurchase of up to ~~$1.8~~$5.1 billion of ~~its~~our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in ~~August 2019~~March 2022. ~~The Company~~’sOur 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.~~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~~During the three months ended March 31, ~~2021~~,2022, we repurchased approximately ~~0.1~~6.4 million shares of ~~our outstanding~~ common stock ~~for~~at a cost of approximately ~~$10 million.~~$1.3 billion under the program. As of March 31, 2022, approximately $652 million 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,
			2021		2020		Change				2022		2021		Change
Cash provided by (used in):	Cash provided by (used in):								Cash provided by (used in):
		Operating activities	$	336	$	370	$	(34)		Operating activities	$	1,148	$	336	$	812
		Investing activities	(1,366)		(1,482)		116			Investing activities	(1,165)		(1,366)		201
		Financing activities	914		962		(48)			Financing activities	30		914		(884)
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		(10)		(29)		19		Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash		(2)		(10)		8
Net decrease in cash and cash equivalents, program and restricted cash			(126)		(179)		53
Net increase (decrease) in cash and cash equivalents, program and restricted cash									Net increase (decrease) in cash and cash equivalents, program and restricted cash		11		(126)		137
Cash and cash equivalents, program and restricted cash, beginning of period	Cash and cash equivalents, program and restricted cash, beginning of period		765		900		(135)		Cash and cash equivalents, program and restricted cash, beginning of period		626		765		(139)
Cash and cash equivalents, program and restricted cash, end of period	Cash and cash equivalents, program and restricted cash, end of period		$	639	$	721	$	(82)	Cash and cash equivalents, program and restricted cash, end of period		$	637	$	639	$	(2)

The ~~decrease~~increase in cash provided by operating activities during the three months ended March 31, ~~2021~~2022 compared with the same period in ~~2020~~2021 is ~~principally~~primarily due to the increase in our net ~~loss.~~income.

The decrease in cash used in investing activities during the three months ended March 31, ~~2021~~2022 compared with the same period in ~~2020~~2021 is primarily due to ~~reduced licensee acquisition activity and capital spend.~~

a decrease in investment in vehicles.

The decrease in cash provided by financing activities during the three months ended March 31, ~~2021~~2022 compared with the same period in ~~2020~~2021 is primarily due to ~~a decrease~~an increase in ~~net borrowings under vehicle programs.~~repurchases of common stock, offset by proceeds from borrowings.

DEBT AND FINANCING ARRANGEMENTS

At March 31, ~~2021,~~2022, we had approximately ~~$12.1~~$16.8 billion of indebtedness, including corporate indebtedness of approximately ~~$4.3~~$4.7 billion and debt under vehicle programs of approximately ~~$7.8~~$12.1 billion. For information regarding our debt and borrowing arrangements, see Notes 1, 10 and 11 to our Consolidated Condensed Financial Statements.

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LIQUIDITY RISK

Our primary liquidity needs include the procurement of rental vehicles to be used in our operations, servicing of corporate and vehicle-related debt and the payment of operating expenses. The present intention of management is to reinvest the undistributed earnings of our foreign subsidiaries indefinitely into our foreign operations. Our primary sources of funding are operating revenue, cash received upon the sale of vehicles, borrowings under our vehicle-backed borrowing arrangements and our senior revolving credit facility, and other financing activities.

Our liquidity position ~~has been~~was impacted by COVID-19 as a result of significant volume ~~declines~~declines. However, since 2021, travel advisories and ~~we expect~~restrictions were eased, which led to a significant increase 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 ~~COVID-19~~this virus on our long-term operational performance and liquidity will depend on future developments, including those outside of our control, such as the ~~U.S.~~spread of new variants of the virus, which may be resistant to currently approved vaccines and ~~worldwide economies to continue to affect our volumes even after~~ the ~~outbreak is contained.~~ implementation of new or continued travel restrictions.

Our liquidity could be ~~further~~ 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

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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, ~~2021,~~2022, we had ~~access to $0.6 billion~~$550 million of available cash and cash equivalents and access to available borrowings under our revolving credit facility of approximately ~~$0.6 billion,~~$354 million, providing us with ~~access to an approximate $1.2 billion~~approximately $904 million of total liquidity. ~~See Note 1 to our Consolidated Condensed Financial Statements for detailed information on liquidity and management’s plans.~~

Our liquidity position could also be negatively impacted if we are unable to remain in compliance with ~~our liquidity covenant,~~ the consolidated first lien leverage ratio requirement ~~after the end of the waiver period on June 30, 2021~~ and other covenants associated with our senior credit facilities and other borrowings. As of March 31, ~~2021,~~2022, we were in compliance with the financial covenants governing our indebtedness. For additional information regarding our liquidity risks, see Part I, Item 1A, “Risk Factors” of our ~~2020~~2021 Form 10-K, as well as the “Risk Factors” section in this quarterly report.

CONTRACTUAL OBLIGATIONS

Our future contractual obligations have not changed significantly from the amounts reported within our ~~2020~~2021 Form 10-K with the exception of our commitment to purchase vehicles, which decreased by approximately ~~$2.3~~$0.8 billion from December 31, ~~2020,~~2021, to approximately ~~$6.4~~$5.1 billion atas of March 31, ~~2021~~2022 due to ~~the COVID-19 impact on our business.~~seasonality. 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.

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, 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 to matters that are inherently uncertain as they relate to future events. Presented within the section titled “Critical Accounting Policies” of our ~~2020~~2021 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 complex judgments that could potentially affect ~~2021~~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

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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, ~~2020~~2021 was ~~17%~~10% and the amount of goodwill allocated to our reporting unit was $488 million.

~~During the quarter ended March 31, 2021, we continued to observe impacts of COVID-19 on our business.~~ 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.

~~Further deterioration in the general economic conditions in the travel industry may result in an impairment charge to earnings in future quarters.~~ 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 ~~weighted average cost of capital~~discount rate and market multiples. IfIn the future, failure to achieve our ~~expectations~~business plans, a deterioration of the ~~operating results, both~~general economic conditions of the countries in ~~magnitude~~which we operate, or ~~timing, do not materialize, or if~~significant changes in the assumptions and estimates that are used in our ~~weighed average cost of capital increases or if market multiples decline, we may be required to record~~impairment testing for goodwill and indefinite-lived intangible ~~asset~~assets (such as the discount rate) could result in significantly different estimates of fair value that could trigger an impairment ~~charges, which may be material.~~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.

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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, ~~2021~~2022 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, ~~2021.~~2022. For additional information regarding our long-term borrowings and financial instruments, see Notes 10, 11 and 1516 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, ~~2021.~~2022.

(b)Changes in Internal Control Over Financial Reporting. During the fiscal quarter to which this report relates, there has been no change in ~~the Company’s~~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, ~~the Company’s~~our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

~~During the quarter ended March 31, 2021, the Company had no material developments to report with respect to its legal proceedings.~~ For ~~additional~~ information regarding ~~the Company’s~~our legal proceedings, see Note 12 toto our Consolidated Condensed Financial Statements and refer to ~~the Company’s 2020~~our 2021 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 risk ~~factor is~~factors are provided to update the risk factors ~~of the Company~~ previously disclosed in our periodic reports filed with the SEC, including ~~its 2020~~our 2021 Form 10-K.

~~We face risks associated with~~The ongoing military conflict between Russia and Ukraine and the related sanctions are causing uncertainty that may have an adverse impact on our ~~suppliers~~business, financial condition and results of ~~vehicles,~~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 ~~global semiconductor supply shortage.~~

~~We have faced, and may face additional delays~~result of weakness in ~~receiving delivery of new vehicles from vehicle manufacturers for a variety of reasons, including due to closures at manufacturing facilities~~economic conditions, increased inflation or otherwise. In particular, a global semiconductor supply shortage is having wide-ranging effects across multiple industries, particularly the automotive industry, and it has impacted multiple vehicle manufacturers that supply vehicles to us. For example, some automobile plants in North America and elsewhere have halted or reduced vehicle production due to the shortage of semiconductors usedincreases in the ~~production~~cost of ~~their vehicles. As~~gas. In addition, as a result of the ~~semiconductor supply shortage has had,~~conflict, governmental and ~~is expected to continue to~~non-governmental entities have anissued alerts noting the potential for increased cyber-attacks. Such risks and disruptions could adversely impact ~~on new car deliveries, which may make it challenging to meet consumer demand.~~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 2021 — $ — — $ 76
February 2021 — — — 76
March 2021 0.1 66.62 0.1 66
0.1 $ 66.62 0.1 $ 66


	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

~~The Company~~’sOur Board of Directors has authorized the repurchase of up ~~to $1.8~~to $5.1 billion of ~~its~~our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in ~~August 2019~~March 2022. Under our. ~~The Company~~’s stock ~~repurchases may occur through~~repurchase program, we repurchase shares from time to time in open market ~~purchases~~transactions, and may also repurchase shares in accelerated share repurchases, tender offers, privately negotiated transactions or ~~trading plans~~by other means. Repurchases may also be made under a plan pursuant to Rule 10b5-1 ofunder the Securities Exchange Act of ~~1934.~~1934, as amended. The timing and amount ~~and timing~~ of ~~specific repurchases are subject to~~repurchase transactions will be determined by our management based on our evaluation of market conditions, ~~applicable~~our share price, legal requirements, restricted payment capacity under our debt instruments and other factors. The stock repurchase program may be suspended, modified or discontinued at any time without prior notice. ~~The repurchase program has no set expiration or termination date.~~

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 ~~4, 2021~~3, 2022

/s/ Cathleen DeGenova

Cathleen DeGenova

Vice President and

Chief Accounting Officer

Table of Contents

Exhibit Index


Exhibit No.			Description
3.1			Amended and Restated Certificate of Incorporation of Avis Budget Group, Inc. (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated September 5, 2006).
3.2			Amended and Restated Bylaws of Avis Budget Group, Inc., dated 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).
~~4.1~~10.1			~~Indenture,~~Amendment No. 2 to the Sixth Amended and Restated Credit Agreement, dated as of March ~~1, 2021, by and~~24, 2022, among Avis Budget ~~Car Rental,~~Holdings, LLC, and Avis Budget Finance, Inc., as issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated March 1, 2021).
~~4.2~~			Indenture, dated as of March 23, 2021, by and among Avis Budget Car Rental, LLC and Avis Budget Finance, Inc., as issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated March 23, 2021).
~~10.1~~			~~Amendment to the Senior Credit Agreement, dated February 16, 2021, by and among~~ Avis Budget Car Rental, LLC, Avis Budget ~~Holdings, LLC, Avis Budget~~ Group, Inc., ~~certain of Avis Budget Car Rental, LLC’s subsidiaries,~~ the ~~lenders~~subsidiary borrowers from time to time party thereto, the financial institutions from time to time party thereto and JPMorgan Chase Bank, N.A., as ~~administrative agent~~Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated ~~February~~March 25, 2022).
10.2			Amendment No. 1 to the Sixth Amended and Restated Credit Agreement, dated as of March 16, ~~2021)~~2022, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, Avis Budget Group, Inc., the subsidiary borrowers from time to time party thereto, the financial institutions from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated March 25, 2022).
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)


	As of March 31, 2021			As of December 31, 2020
Property leases
Operating lease ROU assets	$	2,510		$	2,560

Short-term operating lease liabilities (a)	$	519		$	514
Long-term operating lease liabilities	2,025			2,078
Operating lease liabilities	$	2,544		$	2,592

Weighted average remaining lease term	8.3 years			8.4 years
Weighted average discount rate	3.85		%	3.86		%