What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-02-17 compared with 2020-02-20 · 578 added, 727 removed, 1278 unchanged (51% of the section changed)

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures .

(a) Disclosure Controls and Procedures .

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Management’s Annual Report on Internal Control Over Financial Reporting .

(b) Management’s Annual Report on Internal Control Over Financial Reporting .

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

4 unchanged sentences

Their attestation report is included below.

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 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 internal control over financial reporting.

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ JOSEPH A.

Interim President and Chief Executive Officer

February 20, 2020

Executive Vice President and Chief Financial Officer

February 20, 2020

/s/ CATHLEEN DEGENOVA

Vice President and Chief Accounting Officer

February 20, 2020

FERRARO President and Chief Executive Officer February 17, 2021

/s/ BRIAN CHOI Executive Vice President and Chief Financial Officer February 17, 2021

/s/ CATHLEEN DEGENOVA Vice President and Chief Accounting Officer February 17, 2021

(Cathleen DeGenova)

/s/ BRIAN CHOI

February 20, 2020

/s/ LEONARD S.

February 20, 2020

Coleman, Jr.)

/s/ JEFFREY H.

February 20, 2020

/s/ BERNARDO HEES

Chairman of the Board of Directors

February 20, 2020

/s/ BERNARDO HEES Executive Chairman of the Board of Directors February 17, 2021

(Bernardo Hees)

/s/ LYNN KROMINGA

February 20, 2020

/s/ JAGDEEP PAHWA Vice Chairman of the Board of Directors February 17, 2021

(Jagdeep Pahwa)

/s/ LYNN KROMINGA Director February 17, 2021

(Lynn Krominga)

/s/ GLENN LURIE

February 20, 2020

/s/ GLENN LURIE Director February 17, 2021

(Glenn Lurie)

/s/ JAGDEEP PAHWA

February 20, 2020

(Jagdeep Pahwa)

ROBERT SALERNO

February 20, 2020

Robert Salerno)

/s/ FRANCIS J.

February 20, 2020

/s/ CARL SPARKS

February 20, 2020

/s/ KARTHIK SARMA Director February 17, 2021

(Karthik Sarma)

/s/ CARL SPARKS Director February 17, 2021

(Carl Sparks)

/s/ SANOKE VISWANATHAN

February 20, 2020

(Sanoke Viswanathan)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Vehicle Depreciation Expense - United States Risk Vehicles - Refer to Notes 2 and 8 to the financial statements

Vehicles - Depreciation Expense - United States Risk Vehicles - Refer to Notes 2 and 8 to the financial statements

Critical Audit Matter Description

The Company records rental vehicles at cost, net of incentives and allowances from manufacturers.

Rental vehicles acquired by the Company outside of manufacturer repurchase or guaranteed depreciation programs are referred to as risk vehicles and the carrying value of these risk vehicles are depreciated to the vehicles’ estimated residual market value at their expected dates of disposition.

Significant assumptions and judgments made by management in the Company’s calculation of the estimated residual market value of risk vehicles include, but are not limited to, the anticipated age of the vehicles and market conditions for used vehicles at the time of disposal.

The Company regularly evaluates the reasonableness of these significant assumptions and judgments and adjusts vehicle depreciation expense rates on a prospective basis to reflect changes in the estimated residual market value of risk vehicles through their expected date of disposition.

Given the subjectivity in the significant assumptions and judgments made by management to calculate the estimated residual market value of risk vehicles, auditing the estimated residual market value of risk vehicles and vehicle depreciation expense related to risk vehicles required extensive audit effort to develop an independent expectation of residual market values and depreciation expense, and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.

The Company records rental vehicles at cost, net of accumulated depreciation.

The initial cost of the vehicles is recorded net of incentives and allowances from manufacturers.

Rental vehicles acquired by the Company outside of manufacturer repurchase and guaranteed depreciation programs are referred to as risk vehicles and the carrying values of these risk vehicles are depreciated based upon the vehicles’ estimated residual values at their expected dates of disposition.

The estimation of residual values for risk vehicles requires the Company to make assumptions regarding factors which include, but are not limited to, the anticipated age of the vehicles and market conditions for used vehicles at the time of disposal.

The Company regularly evaluates estimated residual values and adjusts vehicle depreciation rates as appropriate.

Any adjustments to depreciation are made prospectively.

Given the volume of risk vehicles in the United States and the significant estimation uncertainty and judgments made by management to calculate the estimated residual values of these risk vehicles, auditing the estimated residual values of United States risk vehicles and related vehicle depreciation expense required extensive audit effort to develop an independent expectation of residual values and depreciation expense, and a high degree of auditor judgment was required when performing audit procedures and evaluating the results of those procedures.

The significant estimation uncertainty was primarily due to management’s assumptions regarding the impact of future consumer demand and general economic conditions on expected pricing of used vehicles.

Additionally, auditing the calculation of the estimated residual values for United States risk vehicles was challenging due to the volume of data inputs utilized in management’s calculation, including historical sales data and data specific to the Company’s current fleet.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures to assess the reasonableness of the estimated residual market value and vehicle depreciation expense related to risk vehicles included the following, among others:

We evaluated the appropriateness and consistency of the Company’s methods, significant assumptions and judgments to calculate the estimated residual market value of risk vehicles and the expected dates of disposition.

We tested the effectiveness of controls over vehicle depreciation expense related to risk vehicles and management’s review of the significant assumptions and judgments to calculate the estimated residual market value of risk vehicles, including those over the Company’s monitoring of residual market values and used vehicle market conditions.

We assessed the reasonableness of the estimated residual market value of risk vehicles by performing the following procedures on a selection of risk vehicles:

We tested the underlying historical data that served as the basis for the Company’s calculation of the estimated residual market value to evaluate that the inputs were reasonable.

We tested the mathematical accuracy of the Company’s calculation of the estimated residual market value and vehicle depreciation expense rates.

We tested significant assumptions and judgments used in the Company’s calculation by developing an independent expectation of residual market values and compared them to the estimated residual market values calculated by the Company.

Our audit procedures to assess the reasonableness of the estimated residual values and vehicle depreciation expense related to United States risk vehicles included the following, among others:

• We evaluated the appropriateness and consistency of the Company’s methods, significant assumptions and judgments to calculate the estimated residual values of risk vehicles and the expected dates of disposition.

• We tested the effectiveness of controls over vehicle depreciation expense related to risk vehicles and management’s review of the significant assumptions and judgments to calculate the estimated residual values of risk vehicles, including those over the Company’s monitoring of residual values and used vehicle market conditions.

• We assessed the reasonableness of the estimated residual values of risk vehicles by performing the following procedures on a selection of risk vehicles:

– We tested the underlying historical data that served as the basis for the Company’s calculation of the estimated residual values to evaluate that the inputs were reasonable.

– We tested the mathematical accuracy of the Company’s calculation of the estimated residual values and vehicle depreciation expense rates.

– We tested significant assumptions and judgments used in the Company’s calculation by developing an independent expectation of residual values and compared them to the estimated residual values calculated by the Company.

Our independent expectation was calculated using our professional judgment by reference to third-party data, information produced by the Company, subsequent vehicle sales, and inquiries of management.

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• We developed an independent expectation of depreciation expense based on, but not limited to, the vehicles’ age and results of our residual value testing and compared it to the amount recorded by the Company as depreciation expense.

Public Liability and Property Damage Self-Insurance Reserves - United States - Refer to Note 2 to the financial statements

Self-Insurance Reserves - Public Liability and Property Damage Claims - United States - Refer to Note 2 to the financial statements

Critical Audit Matter Description

The Company is self-insured for public liability and property damage claims.

These self-insurance reserves represent an estimate of the reported claims not yet paid and unreported claims and are calculated on an undiscounted basis using actuarial methods followed in the insurance industry.

Significant assumptions and key inputs included in the calculation of these reserves include, but are not limited to, historical loss experience and projected loss development factors.

The Company periodically evaluates the reasonableness of these significant assumptions and key inputs and adjusts the self-insurance reserves to reflect changes in claims experience, such as changes in volume or cost of historical claims.

Given the subjectivity of estimating the self-insurance reserves for reported claims not yet paid and unreported claims, performing audit procedures to evaluate whether self-insurance reserves were appropriately recorded as of December 31, 2019 required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists.

These self-insurance reserves represent an estimate for both reported claims not yet paid and claims incurred but not yet reported.

The estimated reserve requirements for such claims are calculated on an undiscounted basis using actuarial methods and various assumptions which include, but are not limited to, historical loss experience and projected loss development factors.

The required liability is subject to adjustment in the future based upon changes in claims experience, including changes in the number of incidents for which the Company is ultimately liable and changes in the cost per incident.

Given the volume of public liability and property damage claims in the United States and the subjectivity of estimating the related self-insurance reserves for reported claims not yet paid and claims incurred but not yet reported due to uncertain exposure and projected loss development, performing audit procedures to evaluate whether these self-insurance reserves were appropriately recorded as of December 31, 2020 required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to public liability and property damage self-insurance reserves included the following, among others:

We tested the effectiveness of controls over management’s review of significant assumptions, key inputs and methods used to calculate the estimate of the reported claims not yet paid and unreported claims.

Our audit procedures related to United States public liability and property damage self-insurance reserves included the following, among others:

• We tested the effectiveness of controls over management’s review of significant assumptions, key inputs and methods used to calculate the estimate of the reported claims not yet paid and claims incurred but not yet reported.

• We tested the underlying data that served as the basis for the Company’s actuarial analysis, including historical claims, to test that the inputs to the actuarial estimate were reasonable.

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– Evaluated the reasonableness of the methodologies used in management’s estimate based on actuarial methods followed in the insurance industry associated with such liabilities.

Evaluated the reasonableness of the assumptions used in management’s estimate by comparing prior-year assumptions of expected development and ultimate loss to actuals incurred during the current year to identify potential bias in the determination of the liability.

– Evaluated the reasonableness of the assumptions used in management’s estimate by comparing prior-year assumptions of expected development and ultimate loss to actuals incurred during the current year to identify potential bias in the determination of these liabilities.

Goodwill - Europe, Middle East and Africa (“EMEA”) Reporting Unit - Refer to Notes 2 and 7 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the carrying value of each reporting unit to its fair value using the present value of expected future cash flows.

When appropriate, comparative market multiples and other factors are used to corroborate the discounted cash flow results.

When determining fair value, the Company utilizes various assumptions, including, but not limited to, management’s projections of future cash flows, which include forecasts of future revenue and adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”).

A change in these underlying assumptions will cause a

change in the results of the impairment test and, as such, could cause the fair value to be less than the respective carrying amount.

For the Company’s Europe, Middle East and Africa (“EMEA”) reporting unit, the percentage by which the estimated fair value exceeded the carrying value as of the annual impairment testing date was 17% and the amount of goodwill allocated to this reporting unit was $488 million.

Significant changes in events or conditions, including further impacts of the COVID-19 pandemic on the Company’s business and the travel industry, may impact the Company’s assumptions about future estimated cash flows, the discount rate and market multiples.

Given the significant judgments and assumptions made by management to estimate the fair value of the EMEA reporting unit combined with the estimation uncertainty related to the timing and magnitude of economic recovery, auditing the fair value of the EMEA reporting unit required extensive audit effort and judgment, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of future cash flows, specifically related to revenue and Adjusted EBITDA, and the selection of the discount rate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to forecasts of future revenue and Adjusted EBITDA and the selection of the discount rate used by management to estimate the fair value of the EMEA reporting unit included the following, among others:

• We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the fair value calculation, forecasts of future revenue and Adjusted EBITDA, and the selection of the discount rate.

• With the assistance of fair value specialists, we evaluated the reasonableness of the valuation methodology and discount rate, including testing the source information underlying the determination of the discount rate, testing the mathematical accuracy of the calculation, and developing a range of independent estimates and comparing those to the discount rate selected by management.

• We evaluated the reasonableness of management’s revenue and Adjusted EBITDA forecasts by comparing the forecasts to:

– Historical revenue and Adjusted EBITDA.

– Internal communications to management and the Board of Directors.

– Forecasted information included in Company press releases as well as in analyst and industry reports for the Company and certain of its peer companies.

• We evaluated the reasonableness of management’s assumptions related to the severity of business disruption associated with the COVID-19 pandemic on the EMEA reporting unit and timing of economic recovery by:

– Comparing management’s analysis of the expected business disruption from the COVID-19 pandemic on the EMEA reporting unit to the business impacts observed during 2020.

– Comparing management’s analysis of the timing of economic recovery to external economic recovery and industry forecasts to evaluate contradictory evidence related to management’s assumptions regarding the expected impact of the COVID-19 business disruption and timing of recovery.

/s/ DELOITTE & TOUCHE LLP

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Year Ended December 31,

2020 2019 2018

Revenues $ 5,402 $ 9,172 $ 9,124

Operating 3,322 4,698 4,639

Vehicle depreciation and lease charges, net 1,368 2,063 2,179

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Total expenses 6,358 8,885 8,857

Income before income taxes

Income (Loss) before income taxes ( 956 ) 287 267

Provision for (benefit from) income taxes ( 272 ) ( 15 ) 102

Net income (loss) $ ( 684 ) $ 302 $ 165

Earnings per share

Basic $ ( 9.71 ) $ 4.01 $ 2.08

Diluted $ ( 9.71 ) $ 3.98 $ 2.06

See Notes to Consolidated Financial Statements.

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Year Ended December 31,

2020 2019 2018

Net income (loss) $ ( 684 ) $ 302 $ 165

Other comprehensive income (loss), net of tax

Currency translation adjustments:

Currency translation adjustments, net of tax of $23, $(6) and $(8), respectively $ 33 $ 12 $ ( 81 )

Available-for-sale securities:

Net unrealized gains (losses) on available-for-sale securities, net of tax of $0, $0, and $(1), respectively

Reclassification of currency translation adjustments to earnings ( 2 ) — —

Cash flow hedges:

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Reclassification of pension and post-retirement benefits to earnings, net of tax of $(3), $(2), and $(2), respectively 6 6 5

Total comprehensive income

( 30 ) ( 25 ) ( 103 )

Total comprehensive income (loss) $ ( 714 ) $ 277 $ 62

See Notes to Consolidated Financial Statements.

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Deferred income taxes 1,198 1,662

Goodwill 1,137 1,101

Other intangibles, net 774 798

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Assets under vehicle programs:

Program cash 72 211

Vehicles, net 8,153 12,177

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Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party 667 649

Total assets $ 17,538 $ 23,126

Liabilities and stockholders’ equity

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Liabilities under vehicle programs:

Debt 1,777 3,132

Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party 5,080 7,936

Deferred income taxes 1,383 2,189

Other 400 675

Commitments and contingencies (Note 15)

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Year Ended December 31,

2020 2019 2018

Operating activities

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss) $ ( 684 ) $ 302 $ 165

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Vehicle depreciation 1,330 1,890 1,974

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Net change in assets and liabilities:

Receivables 115 10 ( 44 )

Income taxes 1 ( 5 ) 35

Accounts payable and other current liabilities ( 181 ) 84 48

Operating lease liabilities ( 936 ) ( 981 ) —

Other, net 238 154 138

Net cash provided by operating activities 691 2,586 2,609

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Net assets acquired (net of cash acquired) ( 69 ) ( 77 ) ( 91 )

Other, net — 81 ( 44 )

Net cash used in investing activities exclusive of vehicle programs ( 157 ) ( 235 ) ( 349 )

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Investment in debt securities of Avis Budget Rental Car Funding (AESOP)—related party

( 286 ) ( 251 ) ( 188 )

Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP)—related party

Net cash used in investing activities

3,334 ( 2,517 ) ( 3,077 )

Net cash provided by (used in) investing activities 3,177 ( 2,752 ) ( 3,426 )

Financing activities

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Debt financing fees ( 26 ) ( 7 ) ( 15 )

Proceeds from issuance of common stock 15 — —

Repurchases of common stock ( 119 ) ( 67 ) ( 216 )

Net cash used in financing activities exclusive of vehicle programs

Other, net — — 3

Net cash provided by (used in) financing activities exclusive of vehicle programs 553 ( 182 ) ( 262 )

Avis Budget Group, Inc.

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Year Ended December 31,

2020 2019 2018

Vehicle programs:

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Debt financing fees ( 18 ) ( 23 ) ( 25 )

Net cash provided by (used in) financing activities

( 4,598 ) 500 929

Net cash (used in) provided by financing activities ( 4,045 ) 318 667

Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash

Net increase (decrease) in cash and cash equivalents, program and restricted cash

Net (decrease) increase in cash and cash equivalents, program and restricted cash ( 135 ) 165 ( 166 )

Cash and cash equivalents, program and restricted cash, beginning of period 900 735 901

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(In millions)

Additional Paid-in Capital

Accumulated Deficit

Accumulated Other Comprehensive Income (Loss)

Treasury Stock

Total Stockholders’ Equity

Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Stockholders’ Equity

Shares Amount Shares Amount

Balance at January 1, 2018 137.1 $ 1 $ 6,820 $ ( 1,222 ) $ ( 24 ) ( 56.3 ) $ ( 5,002 ) $ 573

Cumulative effect of accounting change

— — — ( 34 ) ( 6 ) — — ( 40 )

Comprehensive income:

Other comprehensive income

Net income — — — 165 — — —

Other comprehensive loss — — — — ( 103 ) — —

Total comprehensive income 62

Non-controlling interest

Net activity related to restricted stock units

— — ( 31 ) — — 0.5 48 17

Exercise of stock options — — ( 17 ) — — 0.2 19 2

Activity related to employee stock purchase plan

— — ( 1 ) — — — 1 —

Repurchase of common stock — — — — — ( 5.9 ) ( 200 ) ( 200 )

1 unchanged sentence

Cumulative effect of accounting change

— — — 4 1 — — 5

Comprehensive income:

Net income — — — 302 — — —

Other comprehensive loss — — — — ( 25 ) — —

1 unchanged sentence

Net activity related to restricted stock units

— — ( 24 ) — — 0.4 46 22

Exercise of stock options — — ( 5 ) — — 0.1 5 —

Activity related to employee stock purchase plan

— — ( 1 ) — — — 1 —

Repurchase of common stock

— — — — — ( 2.2 ) ( 62 ) ( 62 )

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 income:

Net loss — — — ( 684 ) — — —

Other comprehensive loss — — — — ( 30 ) — —

Total comprehensive income

Total comprehensive loss ( 714 )

Non-controlling interest — — ( 2 ) — — — — ( 2 )

Net activity related to restricted stock units

Exercise of stock options

— — ( 50 ) — — 0.5 54 4

Activity related to employee stock purchase plan

— — ( 1 ) — — — 1 —

Issuance of common stock — — ( 20 ) — — 0.4 35 15

Repurchase of common stock

— — — — — ( 5.0 ) ( 113 ) ( 113 )

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

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The Company believes it is appropriate to segregate the financial data of its vehicle programs because, ultimately, the source of repayment of such debt is the realization of such assets.

Liquidity and Management’s Plans

The continuing cases of COVID-19 and the developments surrounding the pandemic have had a material negative impact on all 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 COVID-19 outbreak and resulting economic conditions have had, and the Company believes will continue to have, a significant adverse impact on its operations and vehicle rental volumes, and on its financial results and liquidity, and such negative impact may continue well beyond the containment of the outbreak.

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, and plans to take further 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 and fleet sales.

As a result, based on current operational assumptions, the Company believes it has adequate liquidity beyond the next twelve months.

In April 2020, the Company entered into an amendment (the “Amendment”) 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.

Summary of Significant Accounting Policies

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Other related products and mobility services include sales of collision and loss damage waivers under which a customer is relieved from financial responsibility arising from vehicle damage incurred during the rental;

products and services for driving convenience such as fuel service options, chauffeur drive services, roadside safety net, electronic toll collection, tablet rentals, access to satellite radio, portable navigation

units and child safety seat rentals;

products and services for driving convenience such as fuel service options, roadside safety net, electronic toll collection, tablet rentals, access to satellite radio, portable navigation units and child safety seat rentals;

and rentals of other supplemental items including automobile towing equipment and other moving accessories and supplies.

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In addition, the Company collects membership fees in connection with its car sharing business.

Prior to January 1, 2018, the Company recognized revenue when persuasive evidence of an arrangement existed, the services had been rendered to the customer, the pricing was fixed and determinable and collection was reasonably assured.

Vehicle and rental-related revenue was recognized over the period the vehicle was rented.

Beginning January 1, 2018, the Company recognized revenue when obligations under the terms of a contract with the customer were satisfied;

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Vehicle rental and rental-related revenues were recognized evenly over the period of rental.

Beginning January 1, 2019, the Company combines all lease and nonlease components of its vehicle rental contracts for which the timing and pattern of transfer are the same and the lease component meets the classification of an operating lease.

Vehicle rentals and other related products and mobility services are recognized evenly over the period of rental, which is on average four days.

Beginning January 1, 2019, the Company combined all lease and non-lease components of its vehicle rental contracts for which the timing and pattern of transfer are the same and the lease component meets the classification of an operating lease.

For the years ended December 31, 2020 and 2019, vehicle rentals and other related products and mobility services are recognized evenly over the period of rental, which is on average five and four days, respectively.

(See Note 3–Leases).

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Membership fees related to the Company’s car sharing business are generally nonrefundable, are deferred and recognized ratably over the period of membership.

For year ended December 31, 2018, the Company’s revenues were recognized in accordance with ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” Effective January 1, 2019, revenues are recognized under ASU 2016-02, “Leases (Topic 842),” with the exception of royalty fee revenue derived from the Company licensees and revenue related to the Company’s customer loyalty program, which were approximately $ 144 million for the year ended December 31, 2019.

Effective January 1, 2019, revenues are recognized under ASU 2016-02, “Leases (Topic 842),” with the exception of royalty fee revenue derived from the Company licensees and revenue related to the Company’s customer loyalty program, which were approximately $ 159 million and $ 144 million for the years ended December 31, 2020 and 2019, respectively.

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

Year Ended December 31,

Americas $ 3,965 $ 6,352

Europe, Middle East and Africa 1,127 2,222

3 unchanged sentences

Year Ended December 31,

Avis $ 2,961 $ 5,250

Budget 1,908 3,179

Other 533 743

Total revenues $ 5,402 $ 9,172

14 unchanged sentences

Non-current amounts are expected to be recognized as revenue within two to three years.

At January 1, 2018, the Company’s prepaid rentals and membership fees related to its car sharing business were $ 125 million .

During the year ended December 31, 2018, additional revenues of $ 1,968 million were deferred and revenues of $ 1,970 million were recognized.

At December 31, 2018, the ending prepaid rentals and car sharing membership fees were $ 123 million , of which $ 122 million was included in accounts payable and other current liabilities and $ 1 million was included in other non-current liabilities.

Currency Translation

2 unchanged sentences

The related translation adjustments are reflected in accumulated other comprehensive income (loss) in the stockholders’ equity section of the Consolidated Balance Sheets and in the Consolidated Statements of Comprehensive Income.

The accumulated currency translation adjustment as of December 31, 2019 and 2018 was a gain of $ 9 million and a loss of $ 3 million , respectively.

The accumulated currency translation adjustment as of December 31, 2020 and 2019 were gains of $ 40 million and $ 9 million, respectively.

The Company has designated its euro-denominated Notes as a hedge of its investment in euro-denominated foreign operations and, accordingly, records the effective portion of gains or losses on this net investment hedge in accumulated other comprehensive income (loss) as part of currency translation adjustments .

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Cash and cash equivalents $ 692 $ 686

Program cash 72 211

Restricted cash (a)

Total cash and cash equivalents, program and restricted cash $ 765 $ 900

Included within other current assets .

(a) Included within other current assets .

Property and Equipment

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Useful lives are as follows:

Furniture, fixtures & equipment

3 to 10 years

Capitalized software

Buses and support vehicles

4 to 15 years

Buildings 30 years

Furniture, fixtures & equipment 3 to 10 years

Capitalized software 3 to 7 years

Buses and support vehicles 4 to 15 years

The Company capitalizes the costs of software developed for internal use when the preliminary project stage is completed and management (i) commits to funding the project and (ii) believes it is probable that the project will be completed and the software will be used to perform the function intended.

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Changes in fair value of derivatives not designated as hedging instruments are recognized currently in earnings within the same line item as the hedged item.

The changes in fair value of a derivative that is designated as either a cash flow or net investment hedge is recorded as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.

earnings and is presented in the same income statement line item as the earnings effect of the hedged item.

Amounts related to our derivative instruments are recognized in the Consolidated Statements of Cash Flows consistent with the nature of the hedged item (principally operating activities).

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These obligations represent an estimate for both reported claims not yet paid and claims incurred but not yet reported.

The estimated reserve requirements for such claims are recorded on an undiscounted basis utilizing actuarial methodologies and various assumptions

which include, but are not limited to, the Company’s historical loss experience and projected loss development factors.

The estimated reserve requirements for such claims are recorded on an undiscounted basis utilizing actuarial methodologies and various assumptions which include, but are not limited to, the Company’s historical loss experience and projected loss development factors.

The required liability is also subject to adjustment in the future based upon changes in claims experience, including changes in the number of incidents for which the Company is ultimately liable and changes in the cost per incident.

17 unchanged sentences

The excess, if any, of (i) the fair value of the consideration transferred by the acquirer and the fair value of any non-controlling interest remaining in the acquiree, over (ii) the fair values of the identifiable net assets acquired is recorded as goodwill.

Gains and losses on the re-acquisition of license agreements are recorded in the Consolidated Statements of Operations within transaction-related costs, net, upon completion of the respective acquisition.

Gains and losses on the re-acquisition of license agreements are recorded in the Consolidated

Statements of Operations within transaction-related costs, net, upon completion of the respective acquisition.

Costs incurred to effect a business combination are expensed as incurred, except for the cost to issue debt related to the acquisition.

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As of December 31, 2020 and 2019, the Company had investments in joint ventures with a carrying value of $ 63 million and $ 56 million, respectively, recorded within other non-current assets on the Consolidated Balance Sheets.

In March 2018, the Company made an initial equity investment of €16 million ( $ 20 million ) in its licensee in Greece (“Greece”), for a 20 % ownership stake.

In June 2018, the Company purchased an additional 20 % equity investment for €17 million ( $ 19 million ), including an acceleration premium, and as of June 30, 2018, had a 40 % ownership stake in Greece.

Aggregate realized gains and losses on equity investments and dividend income are recorded within operating expenses on the Consolidated Statements of Operations.

During 2019 and 2018, the amounts realized from the sale of equity investments and dividend income was $ 10 million and $ 5 million , respectively, and during 2017, the amounts were not material.

During 2020, 2019 and 2018, the amounts realized from the sale of equity investments and dividend income was $5 million, $ 10 million and $ 5 million, respectively.

The Company classifies long-lived assets and liabilities to be disposed of as held for sale in the period in which they are available for immediate sale in their present condition and the sale is probable and expected to be completed within one year.

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The accounting guidance requires nonmarketable equity securities to be recorded at cost and adjusted to fair value at each reporting period.

The Company applies the measurement alternative, which allows these investments to be recorded at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer.

investments of the same issuer.

Any changes in value are recorded within operating expenses.

As of December 31, 2019 and 2018, the Company had investments in nonmarketable equity securities recorded within other non-current assets with a carrying value of $ 8 million in each period.

As of December 31, 2020 and 2019, the Company had investments in nonmarketable equity securities recorded within other non-current assets with a carrying value of $ 8 million, respectively.

The Company realized a $ 12 million gain from the sale of a nonmarketable equity security during the year ended December 31, 2019.

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Adoption of New Accounting Pronouncements

Nonemployee Share-Based Payment Accounting

On January 1, 2019, as a result of a new accounting pronouncement, the Company adopted Accounting

Standards Update (“ASU”) 2018-07, “Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting,” which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees.

The adoption of this accounting pronouncement did not have an impact on the Company's Consolidated Financial Statements.

Accounting for Hedging Activities

On January 1, 2019, as the result of a new accounting pronouncement, the Company adopted ASU 2017-12, “Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities,” which amends the existing guidance to allow companies to more accurately present the economic results of an entity’s risk management activities in the financial statements.

The adoption of this standard did not have a material impact on the Company’s Consolidated Financial Statements.

On January 1, 2019, as the result of a new accounting pronouncement, the Company adopted Topic 842 along with related updates, which require a lessee to recognize all long-term leases on its balance sheet as a liability for its lease obligation, measured at the present value of lease payments not yet paid, and a corresponding asset representing its right to use the underlying asset over the lease term and expands disclosure of key information about leasing arrangements.

Topic 842 does not significantly change a lessee’s recognition, measurement and presentation of expenses.

Additionally, Topic 842 aligns key aspects of lessor accounting with the revenue recognition guidance in Topic 606.

The Company elected available practical expedients for existing or expired contracts of lessees and lessors wherein the Company is not required to reassess whether such contracts contain leases, the lease classification or the initial direct costs.

The Company is not utilizing the practical expedient which allows the use of hindsight by lessees and lessors in determining the lease term and in assessing impairment of its right-of-use (“ROU”) assets.

Additionally, the Company elected as accounting policies to not recognize ROU assets or lease liabilities for short-term property leases (i.e., those with a term of 12 months or less at lease commencement) and, by class of underlying asset, to combine lease and nonlease components in the contract.

The Company utilized the transition method allowing entities to only apply the new lease standard in the year of adoption.

The Company has determined that revenues derived by providing vehicle rentals and other related products and mobility services to customers are within the scope of the accounting guidance contained in Topic 842 with the exception of royalty fee revenue derived from the Company’s licensees and revenue related to the Company’s customer loyalty program.

The Company’s rental related revenues have been accounted for under the revenue accounting standard Topic 606, until the adoption of Topic 842.

The Company excludes from the measurement of its lease revenues any tax assessed by a governmental authority that is both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer.

As a result, lease revenues exclude such taxes collected.

Fees collected from customers for which the Company is the primary obligor such as airport concessions and vehicle licensing are recorded within revenues and corresponding remittances of these fees by the Company are recorded within operating expenses.

The Company determines if an arrangement is a lease at inception.

Operating leases, other than those associated with the Company’s vehicle rental programs, are included in operating lease ROU assets, accounts payable and other current liabilities, and long-term operating lease liabilities in the Company’s Consolidated Balance Sheets.

Finance leases, other than those associated with the Company’s vehicle rental programs, are included in property and equipment, net, short-term debt and current portion of long-term debt, and long-term debt in the Company’s Consolidated Balance Sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

and liabilities are recognized at commencement date based on the present value of lease payments over the expected lease term.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date in determining the present value of lease payments.

The operating lease ROU assets are reduced by any lease incentives.

The Company’s lease terms may include options to extend or terminate the lease, which are included in the calculation of ROU assets when it is reasonably certain that the Company will exercise those options.

Lease expense for lease payments is usually recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and nonlease components, which are generally not accounted for separately.

Additionally, for certain leases, the Company applies a portfolio approach to account for the operating lease ROU assets and liabilities as the leases are similar in nature and have nearly identical contract provisions.

Adoption of this standard resulted in most of the Company’s operating lease commitments being recognized as operating lease liabilities and right-of-use assets, which increased total assets and total liabilities by approximately $ 2,811 million related to property operating leases and $ 183 million related to vehicle operating leases.

The Company recorded a beginning accumulated deficit adjustment of $ 5 million , net of tax, related to the adoption of this standard.

Recently Issued Accounting Pronouncements

Intangibles—Goodwill and Other—Internal-Use Software

On January 1, 2020, as the result of a new accounting pronouncement, the Company adopted ASU 2018-15 “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement That Is a Service Contract,” which provides guidance for determining when the arrangement includes a software license.

On January 1, 2020, as the result of a new accounting pronouncement, the Company adopted Accounting Standard Update (“ASU”) 2018-15 “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement That Is a Service Contract,” which provides guidance for determining when the arrangement includes a software license.

The amendments align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license).

The amendments in this Update also require the entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, to present the expense in the same line in its statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in its statement of cash flows in the same manner as payments made for fees associated with the hosting element.

The amendments in this Update also require the entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, to present the expense in the same line in its statement of operations as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalized implementation costs in its statement of cash flows in the same manner as payments made for fees associated with the hosting element.

The entity is also required to present the capitalized implementation costs in its balance sheet in the same line that a prepayment for the fees of the associated hosting arrangement would be presented.

The adoption of this accounting pronouncement will not have a material impact on the Company's Consolidated Financial Statements.

The adoption of this accounting pronouncement did not have a material impact on the Company's Consolidated Financial Statements.

Fair Value Measurement

On January 1, 2020, as the result of a new accounting pronouncement, the Company adopted ASU 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement,” which adds, removes, and modifies disclosure requirements related to fair value measurements.

The adoption of this accounting pronouncement will not have a material impact on the Company's Consolidated Financial Statements.

The adoption of this accounting pronouncement did not have a material impact on the Company's Consolidated Financial Statements.

Measurement of Credit Losses on Financial Instruments

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The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset.

The adoption of this accounting pronouncement will not have a material impact on the Company's Consolidated Financial Statements.

The adoption of this accounting pronouncement did not have a material impact on the Company's Consolidated Financial Statements.

Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities

During first quarter 2020, the Company early adopted the Securities and Exchange Commission’s (the “SEC”), “Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities” rules, which simplify the disclosure requirements related to the Company’s registered securities under Rule 3-10 of Regulation S-X.

The final rule also allows for the simplified disclosure to be included within Management’s Discussion and Analysis of Financial Condition and Results of Operations.

During third quarter 2020, the Company redeemed its remaining $100 million of publicly registered debt securities (see Note 11—Long-term corporate debt and borrowing arrangements for details).

The Company’s remaining outstanding debt securities were issued in private placements exempt

from the registration requirements of the federal securities laws, and therefore, such disclosure is not required.

Accounting for Lease Concessions during COVID-19 Pandemic

In April 2020, the Financial Accounting Standards Board (“FASB”) issued a question-and-answer document to address questions on the application of the lease accounting guidance for lease concessions related to the effects of the COVID-19 pandemic.

The FASB provided for companies to make an election to account for this rent relief in the current period and not trigger a lease modification under Topic 842 - Leases.

The Company made this election.

Financial Disclosures, Selected Financial Data and Supplementary Financial Information

In February 2021, the Company early adopted the SEC’s, Selected Financial Data and Supplementary Financial Information rule amendments for Regulation S-K Items 301 and 302(a), which eliminates the requirement for five years of selected financial data and replaces the requirement for two years of tabular selected quarterly financial information with a principles-based requirement to only disclose if material retrospective changes occur.

Recently Issued Accounting Pronouncements

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued 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.

ASU 2019-12 becomes effective for the Company on January 1, 2021.

Early adoption is permitted.

The Company is currently evaluating the impact of this accounting pronouncement on its Consolidated Financial Statements.

On January 1, 2021, as the result of 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.

The adoption of this accounting pronouncement did not have a material impact on the Company's Consolidated Financial Statements.

Compensation—Retirement Benefits—Defined Benefit Plans

In August 2018, the FASB issued ASU 2018-14, “Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans,” which adds, removes, and clarifies disclosure requirements related to defined benefit pension and other postretirement plans.

On January 1, 2021, as the result of a new accounting pronouncement, the Company adopted ASU 2018-14, “Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans,” which adds, removes, and clarifies disclosure requirements related to defined benefit pension and other postretirement plans.

These changes are part of the FASB’s disclosure framework project, which the Board launched in 2014 to improve the effectiveness of disclosures in notes to financial statements.

ASU 2018-14 becomes effective for the Company on January 1, 2021.

Early adoption is permitted.

The adoption of this accounting pronouncement is not expected to have a material impact on the Company's Consolidated Financial Statements.

The adoption of this accounting pronouncement did not have a material impact on the Company's Consolidated Financial Statements.

On January 1, 2019, as the result of a new accounting pronouncement, the Company adopted Topic 842 along with related updates.

The Company utilized the transition method allowing entities to only apply the new lease standard in the year of adoption.

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

Year Ended December 31, 2019

December 31, 2020 Year Ended

December 31, 2019

Americas $ 3,864 $ 6,303

Europe, Middle East and Africa 1,080 2,141

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

Year Ended December 31, 2019

December 31, 2020 Year Ended

December 31, 2019

Avis $ 2,851 $ 5,163

Budget 1,878 3,129

Other 514 736

Total lease revenues $ 5,243 $ 9,028

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The Company leases a portion of its vehicles under operating leases.

As of December 31, 2019 , the Company has guaranteed up to $ 314 million of residual values for these vehicles at the end of their respective lease terms.

The Company believes that, based on current market conditions, the net proceeds

from the sale of these vehicles at the end of their lease terms will equal or exceed their net book values and therefore has not recorded a liability related to guaranteed residual values.

As of December 31, 2020 and 2019, the Company has guaranteed up to $ 202 million and $ 314 million, respectively, of residual values for these vehicles at the end of their respective lease terms.

The Company believes that, based on current market conditions, the net proceeds from the sale of these vehicles at the end of their lease terms will equal or exceed their net book values and therefore has not recorded a liability related to guaranteed residual values.

The components of lease expense are as follows:

Year Ended December 31, 2019

December 31, 2020 Year Ended

December 31, 2019

Property leases (a)

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Total vehicle lease expense $ 231 $ 301

Primarily included in operating expenses.

Included in vehicle depreciation and lease charges, net.

Included in vehicle interest, net.

(a) Primarily included in operating expenses and includes $60 million of minimum annual guaranteed rent in excess of concession fees as defined in our rental concession agreement for the year ended December 31, 2020.

(b) Included in vehicle depreciation and lease charges, net.

Supplemental balance sheet information related to leases is as follows:

December 31, 2019

As of December 31, 2020 As of December 31, 2019

Property leases

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Operating lease liabilities $ 2,592 $ 2,619

Weighted average remaining lease term

Weighted average remaining lease term 8.4 years 8.9 years

Weighted average discount rate 3.86 % 4.31 %

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Vehicle finance lease liabilities (c)

Weighted average remaining lease term

Weighted average remaining lease term 1.8 years 2.0 years

Weighted average discount rate 1.99 % 1.67 %

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Vehicle operating lease liabilities (e)

Weighted average remaining lease term

Weighted average remaining lease term 1.5 years 1.8 years

Weighted average discount rate 2.90 % 3.08 %

Included in Accounts payable and other current liabilities.

Included in Vehicles, net within Assets under vehicle programs.

Included in Debt within Liabilities under vehicle programs.

Included in Receivables from vehicle manufacturers and other within Assets under vehicle programs.

Included in Other within Liabilities under vehicle programs.

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

(b) Included in Vehicles, net within Assets under vehicle programs.

(d) Included in Receivables from vehicle manufacturers and other within Assets under vehicle programs.

(e) Included in Other within Liabilities under vehicle programs.

Supplemental cash flow information related to leases is as follows:

Year Ended December 31, 2019

Year Ended December 31, 2020 Year Ended December 31, 2019

Cash payments for lease liabilities within operating activities:

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Vehicle finance leases 257 304

ROU assets obtained in exchange for lease liabilities since initial recognition.

(a) For the year ended December 31, 2019, ROU assets obtained in exchange for lease liabilities since initial recognition.

Maturities of lease liabilities as of December 31, 2020 are as follows:

Property Operating Leases

Vehicle Finance Leases

Vehicle Operating Leases

Property Operating Leases Vehicle Finance Leases Vehicle Operating Leases

Within 1 year $ 602 $ 86 $ 84

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Between 4 and 5 years 223 — —

Thereafter 1,081 — —

Total lease payments 3,093 226 116

Imputed interest ( 501 ) — ( 3 )

Total $ 2,592 $ 226 $ 113

Earnings Per Share

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Year Ended December 31,

Net income for basic and diluted EPS

2020 2019 2018

Net income (loss) for basic and diluted EPS $ ( 684 ) $ 302 $ 165

Basic weighted average shares outstanding 70.5 75.2 79.3

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Earnings per share:

Basic $ ( 9.71 ) $ 4.01 $ 2.08

Diluted $ ( 9.71 ) $ 3.98 $ 2.06

The following table summarizes the Company’s outstanding common stock equivalents that were anti-dilutive and therefore excluded from the computation of diluted EPS (shares in millions):

As of December 31,

2020 2019 2018

Non-vested stock (a)

The weighted average grant date fair value for anti-dilutive non-vested stock for 2019, 2018 and 2017 was $ 39.48 , $ 48.66 and $ 38.40 , respectively.

(a) The weighted average grant date fair value for anti-dilutive non-vested stock for 2020, 2019 and 2018 was $ 26.20 , $ 39.48 and $ 48.66 , respectively.

Restructuring and Other Related Charges

Restructuring

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”).

During the year ended December 31, 2020, as part of this process, the Company formally communicated to and terminated approximately 4,300 employees.

The Company expects no further restructuring expense related to this initiative.

During third quarter 2019, the Company initiated a restructuring plan to exit its operations in Brazil by closing rental facilities, disposing of assets and terminating personnel (“Brazil”).

As of December 31, 2020, the Company terminated the employment of approximately 22 employees.

The Company expects further restructuring expense of approximately $ 8 million related to this initiative.

The Company expects further restructuring expense of approximately $ 2 million, excluding effects of currency exchange rates, related to this initiative.

During first quarter 2019, the Company initiated a restructuring plan to drive global efficiency by improving processes and consolidating functions, and to create new objectives and strategies for its truck rental operations in the U.S.

by reducing headcount, large vehicles and rental locations (“T19”).

During the year ended December 31, 2019 , as part of this process, the Company formally communicated the termination of employment to approximately 540 employees, and as of December 31, 2019 , the Company had terminated approximately 440 of these employees.

The Company expects no further restructuring expense related to this initiative.

This initiative is substantially complete.

This initiative is complete.

During first quarter 2018, the Company initiated a strategic restructuring plan to improve processes and reduce headcount in response to its new workforce planning technology that allows more effective management of staff levels (“Workforce planning”).

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

Personnel Related

Facility Related

Balance as of January 1, 2017

Restructuring expense:

Truck initiative

Restructuring payment/utilization:

Truck initiative

Acquisition integration

Balance as of December 31, 2017

Personnel Related Facility Related Other (a)

Balance at January 1, 2018 $ 4 $ — $ — $ 4

Restructuring expense:

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Truck initiative ( 1 ) — ( 4 ) ( 5 )

T17 ( 3 ) — ( 2 ) ( 5 )

T15 ( 1 ) — — ( 1 )

Balance as of December 31, 2018 1 — 1 2

Restructuring expense:

T19 24 — 31 55

Brazil 1 1 5 7

Restructuring payment/utilization:

T19 ( 21 ) — ( 30 ) ( 51 )

Brazil ( 1 ) — ( 5 ) ( 6 )

Workforce planning ( 1 ) — — ( 1 )

Balance as of December 31, 2019 3 1 2 6

Includes expenses primarily related to the disposition of vehicles.

International

Balance as of January 1, 2017

Restructuring expense:

Truck initiative

2020 Optimization 73 3 3 79

Brazil 1 1 ( 2 ) —

T19 — — 14 14

Restructuring payment/utilization:

Truck initiative

Acquisition integration

2020 Optimization ( 68 ) ( 2 ) ( 1 ) ( 71 )

Brazil — ( 1 ) 2 1

T19 ( 5 ) — ( 15 ) ( 20 )

Balance as of December 31, 2020 $ 4 $ 2 $ 3 $ 9

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

Americas International Total

Balance at January 1, 2018 $ 1 $ 3 $ 4

Restructuring expense:

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Truck initiative ( 5 ) — ( 5 )

T17 ( 3 ) ( 2 ) ( 5 )

T15 — ( 1 ) ( 1 )

Balance as of December 31, 2018 — 2 2

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Restructuring payment/utilization:

T19 ( 38 ) ( 13 ) ( 51 )

Brazil ( 6 ) — ( 6 )

Workforce planning — ( 1 ) ( 1 )

Balance as of December 31, 2019 2 4 6

Restructuring expense:

2020 Optimization 31 48 79

Restructuring payment/utilization:

2020 Optimization Plan ( 29 ) ( 42 ) ( 71 )

T19 ( 16 ) ( 4 ) ( 20 )

Balance as of December 31, 2020 $ 3 $ 6 $ 9

Other Related Charges

Limited Voluntary Opportunity Plans (“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 year ended December 31, 2020, the Company recorded other related charges of approximately $ 18 million in connection with the LVOP.

As of December 31, 2020, approximately 400 qualified employees elected to participate in the plan and the employment of all participants had been terminated.

Officer Separation Costs

In August 2020, the Company announced the resignation of John F.

North, III as the Company’s Chief Financial Officer.

Following his post-resignation transition to an advisory position, Mr.

North continued to serve as a consultant through January 1, 2021.

In connection with Mr.

North’s departure, the Company recorded other related charges of approximately $ 5 million, inclusive of accelerated stock-based compensation expense for the year ended December 31, 2020.

In March 2020, 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 year ended December 31, 2020.

In May 2019, the Company announced the resignation of Larry D.

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In connection with Mr.

De Shon’s departure, the Company recorded other related charges of approximately $ 14 million , inclusive of accelerated stock-based compensation expense and executive search firm fees.

De Shon’s departure, the Company recorded other related charges of approximately $ 1 million for consulting fees and $ 14 million, inclusive of accelerated stock-based compensation expense, for the years ended December 31, 2020 and 2019, respectively.

In March 2019, the Company announced the resignation of Mark J.

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Servodidio’s departure, the Company recorded other related charges of approximately $ 4 million, inclusive of accelerated stock-based compensation expense.

On May 12, 2017, the Company announced the resignation of David B.

Wyshner as the Company’s President and Chief Financial Officer.

In connection with Mr.

Wyshner’s departure, the Company recorded other related charges of $ 7 million during the year ended December 31, 2017, inclusive of accelerated stock-based compensation expense of $ 2 million .

Limited Voluntary Opportunity Plans (“LVOP”)

During 2017, the Company offered voluntary termination programs to certain employees in the Americas’ field operations, shared services, and general and administrative functions for a limited time.

These employees, if qualified, elected resignation from employment in return for enhanced severance benefits to be settled in cash.

During the year ended December 31, 2017, the Company recorded other related charges of $ 16 million in connection with LVOP.

Avis and Budget Licensees

In 2019, the Company completed the acquisitions of various licensees primarily in North America, for approximately $ 55 million , plus $ 27 million for acquired fleet, of which $ 74 million was paid.

The remaining $ 8 million of the purchase price will be paid primarily in 2020.

During 2020, the Company completed the acquisitions of various licensees in North America and Europe, for approximately $28 million, plus $22 million for acquired fleet.

These investments were in-line with the Company’s strategy to re-acquire licensees when advantageous to expand its footprint of Company-operated locations.

The acquired fleet was financed under the Company’s existing financing arrangements.

The excess of the purchase price over preliminary fair value of net assets acquired was allocated to goodwill, which was assigned to the Company’s Americas reportable segment.

In connection with these acquisitions, approximately $ 21 million was recorded in goodwill, other intangibles of $ 24 million related to license agreements and $ 7 million related to customer relationships.

The license agreements and customer relationships are being amortized over a weighted average useful life of approximately three years .

The goodwill is expected to be deductible for tax purposes.

In connection with these acquisitions, approximately $28 million was recorded in other intangibles related to license agreements.

The license agreements are being amortized over a weighted average useful life of approximately two years.

The fair value of the assets acquired and liabilities assumed has not yet been finalized and is therefore subject to change.

Turiscar Group

In October 2018, the Company completed the acquisition of Turiscar Group, a provider of vehicle rental services in Portugal, for €22 million (approximately $ 25 million ), net of acquired cash, of which €23 million (approximately $ 26 million ) was paid.

The remaining € 4 million of the purchase price will be paid during the three months ended December 31, 2020.

The investment enabled the Company to strengthen and expand its commitment in the Portuguese market.

The excess of the purchase price over preliminary fair value of net assets acquired was allocated to goodwill, which was assigned to the Company’s International reportable segment.

In connection with this acquisition, approximately $ 12 million was recorded in goodwill, and other intangibles of $ 10 million related to customer relationships and $ 2 million related to trademarks were recorded.

The customer relationships and trademarks are being amortized over a weighted average useful life of approximately 11 years .

The goodwill is not deductible for tax purposes.

Differences between the preliminary allocation of purchase price and the final allocation were not material.

Morini S.p.A.

In July 2018, the Company completed the acquisition of Morini S.p.A.

(”Morini”) for €35 million (approximately $ 40 million ), net of acquired cash, plus potential earn-out payments of €5 million (approximately $ 6 million ) based on Morini’s performance over the next two years.

During the year ended December 31, 2018, the Company paid €28 million (approximately $ 32 million ).

The remaining € 7 million of the purchase price will be paid during the three months ended March 31, 2020.

The investment enabled the Company to expand its footprint of vehicle rental services in Northern Italy.

The excess of the purchase price over preliminary fair value of net assets acquired was allocated to goodwill, which was assigned to the Company’s International reportable segment.

In connection with this acquisition, approximately $ 42 million was recorded in goodwill, and other intangibles of $ 6 million related to customer relationships, $ 3 million related to trademarks and $ 2 million related to license agreements were recorded.

The customer relationships, trademarks and license agreements are being amortized over a weighted average useful life of approximately six years .

The goodwill is not deductible for tax purposes.

Differences between the preliminary allocation of purchase price and the final allocation were not material.

Avis and Budget Licensees

In 2018, the Company completed the acquisitions of various licensees in Europe and North America, for

approximately $ 38 million , net of acquired cash.

In 2019, the Company completed the acquisitions of various licensees, primarily in North America, for approximately $ 55 million, plus $ 27 million for acquired fleet, of which $ 74 million was paid in 2019 and the remaining purchase price was primarily paid in 2020.

These investments were in-line with the Company’s strategy to re-acquire licensees when advantageous to expand its footprint of Company-operated locations.

The acquired fleet was financed under the Company’s existing financing arrangements.

In connection with

these acquisitions, other intangibles of approximately $ 42 million related to license agreements was recorded.

The license agreements are being amortized over a weighted average useful life of approximately two years .

Differences between the preliminary allocation of purchase price and the final allocation were not material.

The excess of the purchase price over preliminary fair value of net assets acquired was allocated to goodwill, which was assigned to the Company’s Americas reportable segment.

The license agreements and customer relationships are being amortized over a weighted average useful life of approximately three years .

The goodwill is expected to be deductible for tax purposes.

Differences between the preliminary allocation of purchase price and the final allocation were not material for Avis and Budget Licensees.

Intangible Assets

Intangible assets consisted of:

As of December 31, 2019

As of December 31, 2018

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

As of December 31, 2020 As of December 31, 2019

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Amortized Intangible Assets

License agreements (a)

$ 280 $ 151 $ 129 $ 241 $ 108 $ 133

Customer relationships (b)

268 196 72 255 165 90

54 33 21 50 25 25

$ 602 $ 380 $ 222 $ 546 $ 298 $ 248

Unamortized Intangible Assets

Primarily amortized over a period ranging from 3 to 40 years with a weighted average life of 19 years .

Primarily amortized over a period ranging from 3 to 20 years with a weighted average life of 11 years .

Primarily amortized over a period ranging from 0 to 10 years with a weighted average life of 9 years .

During 2017, the Company recorded an impairment related to the unamortized Zipcar trademark of $ 2 million based on a combination of observable and unobservable fair value inputs (Level 3), specifically the Income approach-relief from royalty method, which considers market inputs.

Goodwill $ 1,137 $ 1,101

Trademarks $ 552 $ 550

(a) Primarily amortized over a period ranging from 1 to 40 years with a weighted average life of 18 years.

(b) Primarily amortized over a period ranging from 3 to 20 years with a weighted average life of 12 years.

Amortization expense relating to all intangible assets was as follows:

Year Ended December 31,

2020 2019 2018

License agreements $ 37 $ 28 $ 36

Customer relationships 23 25 24

Total $ 65 $ 59 $ 65

Based on the Company’s amortizable intangible assets at December 31, 2020, the Company expects related amortization expense of approximately $ 59 million for 2021, $ 35 million for 2022, $ 26 million for 2023, $ 23 million for 2024 and $ 18 million for 2025 excluding effects of currency exchange rates.

The carrying amounts of goodwill and related changes are as follows:

International

Total Company

Americas International Total Company

Gross goodwill as of January 1, 2019 $ 2,126 $ 1,084 $ 3,210

1 unchanged sentence

Goodwill as of January 1, 2019 539 553 1,092

Acquisitions 21 — 21

Currency translation adjustments and other ( 6 ) ( 6 ) ( 12 )

11 unchanged sentences

Year Ended December 31,

2020 2019 2018

Depreciation expense $ 1,330 $ 1,890 $ 1,974

13 unchanged sentences

Year Ended December 31,

2020 2019 2018

Federal $ ( 5 ) $ ( 3 ) $ ( 7 )

State 21 41 36

Foreign 29 50 59

Current income tax provision 45 88 88

Federal ( 104 ) 41 63

State ( 90 ) ( 37 ) ( 39 )

Foreign ( 123 ) ( 107 ) ( 10 )

Deferred income tax provision ( 317 ) ( 103 ) 14

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

United States $ ( 590 ) $ 125 $ 114

Pretax income

Foreign ( 366 ) 162 153

Pretax income (loss) $ ( 956 ) $ 287 $ 267

Deferred income tax assets and liabilities are comprised of the following:

4 unchanged sentences

Accrued liabilities and deferred revenue 237 236

Tax credits 17 20

Depreciation and amortization 3 17

1 unchanged sentence

Valuation allowance (a)

( 204 ) ( 214 )

Deferred income tax assets 1,974 2,465

5 unchanged sentences

Deferred income tax assets, net $ 1,198 $ 1,662

The valuation allowance of $ 214 million at December 31, 2019 relates to tax loss carryforwards and certain deferred tax assets of $ 192 million and $ 22 million , respectively.

(a) The valuation allowance of $ 204 million at December 31, 2020 relates to tax loss carryforwards and certain deferred tax assets of $ 195 million and $ 9 million, respectively.

The valuation allowance will be reduced when and if the Company determines it is more likely than not that the related deferred income tax assets will be realized.

12 unchanged sentences

federal net operating loss carryforwards of approximately $ 3.5 billion.

The majority of the net operating loss carryforwards expire by 2031 and a significant remaining portion has an indefinite utilization period pursuant to the Tax Act.

The majority of the net operating loss carryforwards have an indefinite utilization period pursuant to the Tax Act and a significant remaining portion expires by 2031.

Such net operating loss carryforwards are primarily related to accelerated depreciation of the Company’s U.S.

1 unchanged sentence

federal tax loss carryforwards as there are adequate deferred tax liabilities that could be realized within the carryforward period.

At December 31, 2019 , the Company had foreign net operating loss carryforwards of approximately $ 981 million with an indefinite utilization period.

At December 31, 2019, we have undistributed earnings of certain foreign subsidiaries of approximately $ 811 million that we have indefinitely reinvested, and on which we have not recognized deferred taxes.

At December 31, 2020, the Company had foreign net operating loss carryforwards of approximately $ 1.2 billion with an indefinite utilization period.

At December 31, 2020, the Company had undistributed earnings of certain foreign subsidiaries of approximately $ 0.9 billion that it has indefinitely reinvested, and on which it has not recognized deferred taxes.

Estimating the amount of potential tax is not practicable because of the complexity and variety of assumptions necessary to compute the tax.

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

federal statutory rate 21.0 % 21.0 % 21.0 %

2 unchanged sentences

Changes in valuation allowances — ( 26.9 ) 6.3

Taxes on foreign operations at rates different than statutory U.S.

federal rates

Taxes on foreign operations at rates different than U.S.

federal statutory rates 3.1 3.4 ( 5.2 )

Stock-based compensation ( 0.1 ) — ( 0.8 )

1 unchanged sentence

Other non-deductible (non-taxable) items ( 0.4 ) ( 1.4 ) 1.1

Other — 0.4 ( 0.9 )

28.4 % ( 5.2 ) % 38.2 %

The following is a tabular reconciliation of the gross amount of unrecognized tax benefits for the year:

2020 2019 2018

Balance, January 1 $ 54 $ 61 $ 63

Additions for tax positions related to current year 4 6 8

Additions for tax positions for prior years

Reductions for tax positions for prior years ( 1 ) ( 8 ) ( 6 )

Settlements ( 3 ) ( 4 ) ( 3 )

Statute of limitations — ( 1 ) ( 1 )

Foreign currency translation 3 — —

Balance, December 31 $ 57 $ 54 $ 61

5 unchanged sentences

Substantially all of the gross amount of the unrecognized tax benefits at December 31, 2020, 2019 and 2018, if recognized, would affect the Company’s provision for, or benefit from, income taxes.

As of December 31, 2019 , the Company’s unrecognized tax benefits were offset by an immaterial tax loss carryforward.

As of December 31, 2020, the Company’s unrecognized tax benefits were offset by tax loss carryforwards and other deferred tax assets in the amount of $38 million.

The following table presents unrecognized tax benefits:

2 unchanged sentences

Accrued interest payable on potential tax liabilities (b)

Pursuant to the agreements governing the disposition of certain subsidiaries in 2006, the Company is entitled to indemnification for certain pre-disposition tax contingencies.

(a) Pursuant to the agreements governing the disposition of certain subsidiaries in 2006, the Company is entitled to indemnification for certain pre-disposition tax contingencies.

As of December 31, 2020 and 2019, $ 13 million, respectively, of unrecognized tax benefits are related to tax contingencies for which the Company believes it is entitled to indemnification.

The Company recognizes potential interest related to unrecognized tax benefits within interest expense related to corporate debt, net on the accompanying Consolidated Statements of Operations.

(b) The Company recognizes potential interest related to unrecognized tax benefits within interest expense related to corporate debt, net on the accompanying Consolidated Statements of Operations.

Penalties incurred during the years ended December 31, 2020, 2019 and 2018, were not significant and were recognized as a component of the provision for income taxes.

4 unchanged sentences

Sales and use taxes 147 173

Other 148 141

Other current assets $ 456 $ 548

2 unchanged sentences

As of December 31,

Land $ 49 $ 48

Buildings and leasehold improvements 592 565

7 unchanged sentences

At December 31, 2020, the Company had payables related to property and equipment included in accounts payable and other current liabilities and in other non-current liabilities of $ 10 million and $ 3 million, respectively.

At December 31, 2018 and 2017, the Company had payables related to property and equipment included in accounts payable and other current liabilities of $ 15 million and $ 16 million , respectively.

At December 31, 2019, the Company had payables related to property and equipment included in accounts payable and other current liabilities and in other non-current liabilities of $16 million and $12 million, respectively.

At December 31, 2018, the Company had payables related to property and equipment included in accounts payable and other current liabilities of $ 15 million.

Accounts Payable and Other Current Liabilities

4 unchanged sentences

Accrued sales and use taxes 215 223

Accrued payroll and related

Accrued advertising and marketing

Public liability and property damage insurance liabilities – current 162 178

Deferred lease revenues – current

Accrued advertising and marketing 122 191

Accrued payroll and related 117 195

Other 510 562

Accounts payable and other current liabilities $ 2,034 $ 2,206

1 unchanged sentence

Long-term debt and other borrowing arrangements consisted of:

As of December 31,

5½% Senior Notes

6⅜% Senior Notes

4⅛% euro-denominated Senior Notes

November 2024

Date As of December 31,

5½% Senior Notes April 2023 — 200

6⅜% Senior Notes April 2024 350 350

4⅛% euro-denominated Senior Notes November 2024 366 336

5¼% Senior Notes March 2025 375 375

4½% euro-denominated Senior Notes May 2025 305 280

10½% Senior Secured Notes May 2025 487 —

4¾% euro-denominated Senior Notes January 2026 428 393

5¾% Senior Notes July 2027 724 400

Floating Rate Term Loan (a)

February 2025

5¼% Senior Notes

4½% euro-denominated Senior Notes

4¾% euro-denominated Senior Notes

5¾% Senior Notes

August 2027 1,199 1,112

Deferred financing fees ( 48 ) ( 39 )

Total 4,210 3,435

Short-term debt and current portion of long-term debt 19 19

Long-term debt $ 4,191 $ 3,416

The floating rate term loan is part of the Company’s senior revolving credit facility, which is secured by pledges of capital stock of certain subsidiaries of the Company, and liens on substantially all of the Company’s intellectual property and certain other real and personal property.

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

(a) The floating rate term loan is part of the Company’s senior revolving credit facility, which is secured by pledges of capital stock of certain subsidiaries of the Company, and liens on substantially all of the Company’s intellectual property and certain other real and personal property.

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

Floating Rate Term Loan due 2027.

In February 2020, the Company amended its Floating Rate Term Loan and extended its maturity term to 2027.

The Company increased the outstanding borrowing principal amount of the Floating Rate Term Loan to $ 1.2 billion and on April 1, 2020 used the additional loan amount to redeem $100 million of its outstanding 5½% Senior Notes due 2023.

As of December 31, 2020, the loan bears interest at one-month LIBOR plus 2.25 %, for an aggregate rate of 2.40 %;

3 unchanged sentences

The notes were issued at par, with interest payable semi-annually.

The Company has the right to redeem these notes in whole or in part on or after April 1, 2018 at specified redemption prices plus accrued interest.

In November 2014, the Company issued $ 175 million of additional 5½% Senior Notes due 2023 at 99.625 % of their face value, with interest payable semi-annually.

The Company has the right to redeem these notes in whole or in part on or after April 1, 2018 at specified redemption prices plus accrued interest.

The Company used the proceeds from the issuance to partially fund the acquisition of its Budget licensee for

Southern California and Las Vegas.

In July 2019, the Company redeemed $ 400 million principal amount for $ 407 million plus accrued interest.

In October 2019, the Company redeemed $ 75 million principal amount for $ 76 million plus accrued interest.

The Company had the right to redeem these notes in whole or in part on or after April 1, 2018 at specified redemption prices plus accrued interest.

The Company used the proceeds from the issuance to partially fund the acquisition of its Budget licensee for Southern California and Las Vegas.

During 2020 and 2019, the Company redeemed $ 200 million principal amount of these notes for $ 202 million and $ 475 million principal amount of these notes for $ 483 million, respectively, plus accrued interest.

6⅜% Senior Notes due 2024 .

7 unchanged sentences

5¼% Senior Notes due 2025.

In Mar ch 2015, the Company issued $ 375 million of 5¼% Senior Notes due 2025 at par, with interest payable semi-annually.

In March 2015, the Company issued $ 375 million of 5¼% Senior Notes due 2025 at par, with interest payable semi-annually.

The Company has the right to redeem these notes in whole or in part at any time on or after March 15, 2020 at specified redemption prices plus accrued interest.

10 unchanged sentences

5¾% Senior Notes due 2027.

In July 2019, the Company issued $ 400 million of 5¾% Senior Notes due July 2027, at par.

In July 2019, the Company issued $ 400 million of 5¾% Senior Notes due July 2027, at par, with interest payable semi-annually.

The Company used the net proceeds from the offering to redeem $ 400 million principal amount of its 5½% Senior Notes due April 2023.

In August 2020, the Company issued $ 350 million of additional 5¾% Senior Notes due July 2027, at 92% of face value, under the indenture governing its existing 5¾% Senior Notes.

The Company used the proceeds from this offering to redeem the outstanding $ 100 million in aggregate principal amount of its 5½% Senior Notes due 2023, with the remainder being used for general corporate purposes.

10½% Senior Secured Notes due 2025.

In May 2020, the Company issued $ 500 million of 10½% Senior Secured Notes due May 2025, at 97% of face value, with interest payable semi-annually.

The Company has the right to redeem these notes in whole or in part prior to May 15, 2022 at a redemption price equal to 100% of principal amount plus accrued interest and a make-whole premium.

The Company has the right to redeem these notes in whole or in part on or after May 15, 2022 at specified redemption prices plus accrued interest.

The notes are guaranteed on a senior unsecured basis by the Company and on a senior secured basis by certain of the Company’s subsidiaries.

The Company used the proceeds from this offering for general corporate purposes.

The 5½% Senior Notes, 6⅜% Senior Notes, the 5¼% Senior Notes and the 5¾% Senior Notes are senior unsecured obligations of the Company’s Avis Budget Car Rental, LLC (“ABCR”) subsidiary, are guaranteed by the Company and certain of its domestic subsidiaries and rank equally in right of payment with all of the Company’s existing and future senior unsecured indebtedness.

3 unchanged sentences

The following table provides contractual maturities of the Company’s corporate debt at December 31, 2020:

Thereafter 2,289

Committed Credit Facilities And Available Funding Arrangements

At December 31, 2020, the committed corporate credit facilities available to the Company and/or its subsidiaries were as follows:

Total Capacity

Outstanding Borrowings

Letters of Credit Issued

Available Capacity

Total Capacity Outstanding Borrowings Letters of Credit Issued Available Capacity

Senior revolving credit facility maturing 2023 (a)

The senior revolving credit facility bears interest at one-month LIBOR plus 200 basis points and is part of the Company’s senior credit facility, which is secured by pledges of capital stock of certain subsidiaries of the Company, and liens on substantially all of the Company’s intellectual property and certain other real and personal property.

In February 2018, the Company amended the terms of its Senior revolving credit facility maturing 2021 and extended its maturity to 2023.

At December 31, 2018 , the Company had various uncommitted credit facilities available, which bear interest at rates of 0.74 % to 6.60 % , under which it had drawn approximately $ 1 million .

$ 1,800 $ — $ 1,171 $ 629

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

Debt Covenants

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

The Company’s senior credit facility also contains a maximum leverage ratio requirement.

The agreements governing the Company’s indebtedness contain restrictive covenants, including restrictions on dividends paid to the Company by certain of its subsidiaries, the incurrence of additional indebtedness and/or liens by the Company and certain of its subsidiaries, acquisitions, mergers, liquidations, and sale and leaseback transactions.

The Company’s 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).

As of December 31, 2020, the Company was in compliance with the financial covenants governing its indebtedness.

3 unchanged sentences

Americas – Debt due to Avis Budget Rental Car Funding (a)

$ 5,116 $ 7,975

Americas – Debt borrowings (a)

2 unchanged sentences

Deferred financing fees (b)

The increase reflects additional borrowings principally to fund increases in the Company's car rental fleet.

Deferred financing fees related to Debt due to Avis Budget Rental Car Funding as of December 31, 2019 and 2018 were $40 million and $35 million, respectively.

( 45 ) ( 49 )

Total $ 6,857 $ 11,068

(a) Decreases reflect reduced borrowings resulting from reductions in the Company's global rental fleet.

(b) Deferred financing fees related to Debt due to Avis Budget Rental Car Funding as of December 31, 2020 and 2019 were $36 million and $40 million, respectively.

Debt due to Avis Budget Rental Car Funding .

16 unchanged sentences

The Company periodically provides Avis Budget Rental Car Funding with non-contractually required support, in the form of equity and loans, to serve as additional collateral for the debt issued by Avis Budget Rental Car Funding.

The business activities of Avis Budget Rental Car Funding are limited primarily to issuing indebtedness and using the proceeds thereof to make loans to AESOP Leasing for the purpose of acquiring or financing the acquisition of vehicles to be leased to the Company’s rental car subsidiaries and pledging its assets to secure the indebtedness.

secure the indebtedness.

Because Avis Budget Rental Car Funding is not consolidated by the Company, its results of operations and cash flows are not reflected within the Company’s financial statements.

During April 2018 and October 2018, Avis Budget Rental Car Funding issued approximately $ 400 million in asset-backed notes with an expected final payment date of September 2023 and approximately $ 550 million in asset-backed notes with an expected final payment date of March 2024, respectively.

During February 2019, April 2019 and August 2019, Avis Budget Rental Car Funding issued approximately $ 600 million, $ 650 million and $ 650 million, respectively, in asset-backed notes with an expected final payment date of March 2022, September 2024 and March 2025, respectively.

During January 2020 and August 2020, Avis Budget Rental Car Funding issued approximately $ 700 million in asset-backed notes with an expected final payment date of August 2025 and issued approximately $ 650 million in asset-backed notes with an expected final payment date of February 2026, respectively.

The Company used the proceeds from these borrowings to fund the repayment of maturing vehicle-backed debt and the acquisition of rental cars in the United States.

3 unchanged sentences

The Company finances the acquisition of fleet for its truck rental operations in the United States through a combination of debt facilities and leases.

These debt borrowings represent a mix of fixed and floating rate debt and had a weighted average interest rate of 2.87 % and 3.33 %

as of December 31, 2019 and 2018 respectively.

These debt borrowings represent a mix of fixed and floating rate debt and had a weighted average interest rate of 2.98 % and 2.87 % as of December 31, 2020 and 2019 respectively.

International

Debt borrowings .

In 2013, the Company entered into a three-year, € 500 million (approximately $687 million) European rental fleet securitization program, which is used to finance fleet purchases for certain of the Company’s European operations.

Since 2013, the Company increased its capacity by € 1.3 billion (approximately $1.5 billion), and extended the securitization maturity to 2021.

In 2013, the Company entered into a three-year, € 500 million European rental fleet securitization program, which is used to finance fleet purchases for certain of the Company’s European operations.

Since 2013, the Company increased its capacity to € 1.7 billion, and extended the securitization maturity to 2022.

The Company finances the acquisition of vehicles used in its International rental car operations through this and other consolidated, bankruptcy remote special-purpose entities, which issue privately placed notes to banks and bank-sponsored conduits.

7 unchanged sentences

Debt under Vehicle Programs (a)

Vehicle-backed debt primarily represents asset-backed securities.

Includes $1.9 billion of bank and bank-sponsored facilities.

Includes $1.7 billion of bank and bank-sponsored facilities.

Thereafter 102

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

(b) Includes $0.3 billion of bank and bank-sponsored facilities.

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

Committed Credit Facilities And Available Funding Arrangements

4 unchanged sentences

Americas – Debt due to Avis Budget Rental Car Funding

$ 7,921 $ 5,116 $ 2,805

Americas – Debt borrowings

International – Debt borrowings

2,884 1,115 1,769

International – Finance leases 221 162 59

Capacity is subject to maintaining sufficient assets to collateralize debt.

The outstanding debt is collateralized by vehicles and related assets of $9.3 billion for Americas - Debt due to Avis Budget Rental Car Funding;

Total $ 11,785 $ 6,902 $ 4,883

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

(b) The outstanding debt is collateralized by vehicles and related assets of $6.3 billion for Americas - Debt due to Avis Budget Rental Car Funding;

$0.7 billion for Americas - Debt borrowings;

2 unchanged sentences

Debt Covenants

The agreements under the Company’s vehicle-backed funding programs contain restrictive covenants, including restrictions on dividends paid to the Company by certain of its subsidiaries and restrictions on indebtedness, mergers, liens, liquidations and sale and leaseback transactions, and in some cases also

require compliance with certain financial requirements.

As of December 31, 2020, the Company is not aware of any instances of non-compliance with any of the financial or restrictive covenants contained in the debt agreements under its vehicle-backed funding programs.

5 unchanged sentences

The Company is entitled to indemnification from such entities for any liability resulting from such litigation.

In first quarter 2017, following a state court trial in Georgia, a jury found the Company liable for damages in cases brought by plaintiffs who were injured in a vehicle accident allegedly caused by an employee of an independent contractor of the Company who was acting outside of the scope of employment.

In February 2017, following a state court trial in Georgia, a jury found the Company liable for damages in cases brought by plaintiffs who were injured in a vehicle accident allegedly caused by an employee of an independent contractor of 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 opinions rendered.

The plaintiffs filed a petition to have the Georgia Supreme Court review the state appellate court’s reversal of opinion.

The Georgia Supreme Court granted the plaintiffs’ application to review the state appellate court’s reversal of the judgement entered at the trial court.

The Georgia Supreme Court heard oral arguments in December 2020.

The Company has recognized a liability related to these cases, net of recoverable insurance proceeds, of approximately $ 12 million.

The Company is involved in claims, legal proceedings and governmental inquiries that are incidental to its 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.

The Company is involved in claims, legal proceedings, including class actions, and governmental inquiries that are incidental to its 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 that its accruals are adequate and/or that it has valid defenses in these matters, unfavorable resolutions could occur.

34 unchanged sentences

In September 2019, the capped call options expired and all outstanding options settled for 0.6 million shares.

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.

The Company issued the common stock from treasury shares.

Accumulated Other Comprehensive Income (Loss)

1 unchanged sentence

Currency Translation

Net Unrealized Gains (Losses) on Cash Flow Hedges (a)

Net Unrealized Gains (Losses) on Available-For-Sale Securities

Minimum Pension Liability

Adjustment (b)

Adjustments (a)

Net Unrealized Gains (Losses) on Cash Flow Hedges (b)

Net Unrealized Gains (Losses) on Available-For-Sale Securities Minimum Pension Liability

Adjustment (c)

Accumulated Other Comprehensive Income (Loss)

Balance, December 31, 2017 71 5 2 ( 102 ) ( 24 )

Cumulative effect of accounting change 7 1 ( 2 ) ( 12 ) ( 6 )

Balance, January 1, 2018 78 6 — ( 114 ) ( 30 )

Other comprehensive income (loss) before reclassifications

( 81 ) ( 2 ) — ( 23 ) ( 106 )

Amounts reclassified from accumulated other comprehensive income (loss)

— ( 2 ) — 5 3

Net current-period other comprehensive income (loss)

( 81 ) ( 4 ) — ( 18 ) ( 103 )

Balance, December 31, 2018 ( 3 ) 2 — ( 132 ) ( 133 )

2 unchanged sentences

Other comprehensive income (loss) before reclassifications

12 ( 20 ) — ( 20 ) ( 28 )

Amounts reclassified from accumulated other comprehensive income (loss)

— ( 3 ) — 6 3

Net current-period other comprehensive income (loss)

12 ( 23 ) — ( 14 ) ( 25 )

Balance, December 31, 2019 9 ( 20 ) — ( 146 ) ( 157 )

Cumulative effect of accounting change (c)

Balance, January 1, 2019

Other comprehensive income (loss) before reclassifications

33 ( 39 ) — ( 36 ) ( 42 )

Amounts reclassified from accumulated other comprehensive income (loss)

( 2 ) 8 — 6 12

Net current-period other comprehensive income (loss)

31 ( 31 ) — ( 30 ) ( 30 )

Balance, December 31, 2020 $ 40 $ ( 51 ) $ — $ ( 176 ) $ ( 187 )

All components of accumulated other comprehensive income (loss) are net of tax, except currency translation adjustments, which exclude income taxes related to indefinite investments in foreign subsidiaries (see Note 9-Income Taxes for impacts of the Tax Act) and include a $ 14 million gain, net of tax, related to the Company’s hedge of its investment in euro-denominated foreign operations (See Note 19-Financial Instruments).

For the years ended December 31, 2019 , 2018 and 2017 , the amounts reclassified from accumulated other comprehensive income (loss) into corporate interest expense were $ 4 million ( $ 3 million , net of tax), $ 3 million ( $ 2 million , net of tax) and $ 4 million ( $ 2 million , net of tax), respectively.

For the years ended December 31, 2019 , 2018 and 2017 , amounts reclassified from accumulated other comprehensive income (loss) into selling, general and administrative expenses were $ 8 million ( $ 6 million , net of tax), $ 7 million ( $ 5 million , net of tax) and $ 8 million ( $ 5 million , net of tax), respectively.

See Note 2-Summary of Significant Accounting Policies for the impact of adoption of ASU 2017-12.

(a) For the year ended December 31, 2020, the amount reclassified from accumulated other comprehensive income (loss) into restructuring and other related charges.

(b) For the years ended December 31, 2020 , 2019 and 2018, the amounts reclassified from accumulated other comprehensive income (loss) into corporate interest expense were $ 9 million ($ 6 million, net of tax), $ 4 million ($ 3 million, net of tax) and $ 3 million ($ 2 million, net of tax), respectively.

For the year ended December 31, 2020, the amounts reclassified from accumulated other comprehensive income (loss) into vehicle interest expense was $2 million ($2 million, net of tax).

(c) For the years ended December 31, 2020, 2019 and 2018, amounts reclassified from accumulated other comprehensive income (loss) into selling, general and administrative expenses were $ 9 million ($ 6 million, net of tax), $ 8 million ($ 6 million, net of tax) and $ 7 million ($ 5 million, net of tax), respectively

Stock-Based Compensation

7 unchanged sentences

Market-based RSUs generally vest based on the level of total shareholder return or absolute stock price attainment.

In June 2020, the Company granted market-based RSUs that vest based on absolute stock price attainment.

The grant date fair value of this award is estimated using a Monte Carlo simulation model.

The weighted average assumptions used in the model are outlined in the table below.

During the years ended December 31, 2019 and 2018 the Company did not issue any stock unit awards containing a market condition.

Expected volatility of stock price 91 %

Risk-free interest rate 0.18 %

Valuation period 3 years

Dividend yield — %

Annual activity related to stock units consisted of (in thousands of shares):

Number of Shares

Weighted Average Remaining Contractual Term (years)

Aggregate Intrinsic Value (in millions)

Number of Shares Weighted

Fair Value Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in millions)

Time-based RSUs

Outstanding at January 1, 2020 847 $ 36.99

( 435 ) 37.13

Forfeited ( 140 ) 30.36

Outstanding and expected to vest at December 31, 2020 (c)

1,070 $ 27.47 0.9 $ 40

Performance-based and market-based RSUs

Outstanding at January 1, 2020 1,061 $ 38.89

Forfeited ( 552 ) 32.97

Outstanding at December 31, 2020 988 $ 32.41 1.4 $ 37

Outstanding and expected to vest at December 31, 2020 (c)

Reflects the maximum number of stock units assuming achievement of all performance-, market- and time-vesting criteria and does not include those for non-employee directors, which are discussed separately below.

The weighted-average fair value of time-based RSUs and performance-based RSUs granted in 2018 was $ 48.41 and $ 48.52 , respectively, and the weighted-average fair value of time-based RSUs and performance-based and market-based RSUs granted in 2017 was $ 35.32 and $ 35.21 , respectively.

The total fair value of RSUs vested during 2019 , 2018 and 2017 was $ 18 million , $ 20 million and $ 23 million , respectively.

Aggregate unrecognized compensation expense related to time-based RSUs and performance-based and market-based RSUs amounted to $ 25 million and will be recognized over a weighted average vesting period of 1.2 years.

38 $ 20.70 2.5 $ 1

(a) Reflects the maximum number of stock units assuming achievement of all performance-, market- and time-vesting criteria and does not include those for non-employee directors, which are discussed separately below.

The weighted-average fair value of time-based RSUs and performance-based RSUs granted in 2019 was $ 34.14 and $ 34.56 , respectively, and the weighted-average fair value of time-based RSUs and performance-based RSUs granted in 2018 was $ 48.41 and $ 48.52 , respectively.

(b) The total fair value of RSUs vested during 2020, 2019 and 2018 was $ 19 million, $ 18 million and $ 20 million, respectively.

(c) Aggregate unrecognized compensation expense related to time-based RSUs and performance-based and market-based RSUs amounted to $ 17 million and will be recognized over a weighted average vesting period of 1.0 years.

Stock Options

Stock options exercised during 2019 , 2018 and 2017 had intrinsic values of $ 1 million , $ 8 million and $ 21 million , respectively.

There were no stock options outstanding as of December 31, 2020.

Stock options exercised during 2019 and 2018 had intrinsic values of $ 1 million and $ 8 million, respectively.

Non-employee Directors Deferred Compensation Plan

Prior to 2019, the Company granted stock awards on a quarterly basis to non-employee directors representing between 50 % and 100 % of a director’s annual compensation and such awards could be deferred under the Non-employee Directors Deferred Compensation Plan.

Beginning in 2019, the Company grants stock awards on an annual basis to non-employee directors representing between 50% and 100% of a director’s annual compensation and such awards can be deferred under the Non-employee Directors Deferred Compensation Plan.

Beginning in 2019, the Company

grants stock awards on an annual basis to non-employee directors representing between 50% and 100% of a director’s annual compensation and such awards can be deferred under the Non-employee Directors Deferred Compensation Plan.

During 2020, 2019 and 2018, the Company granted 34,000 , 40,000 and 34,000 awards, respectively, to non-employee directors.

13 unchanged sentences

Year Ended December 31,

2020 2019 2018

Service cost (a)

1 unchanged sentence

Expected return on plan assets (b)

( 31 ) ( 30 ) ( 33 )

Amortization of unrecognized amounts (b)

Net periodic (benefit) cost $ — $ 3 $ ( 1 )

(a) For the year ended December 31, 2020, $ 4 million and $ 1 million were included in operating expenses and selling, general and administrative expenses, respectively.

For the year ended December 31, 2019, $ 4 million and $ 1 million were included in operating expenses and selling, general and administrative expenses, respectively.

For the year ended December 31, 2018, $4 million and $2 million were included in operating expenses and selling, general and administrative expenses, respectively.

Included in selling, general and administrative expenses.

(b) Included in selling, general and administrative expenses.

The estimated amount that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2021 is $ 9 million, which consists primarily of net actuarial losses.

4 unchanged sentences

Benefit obligation at end of prior year $ 821 $ 722

Service cost 5 5

Interest cost 17 21

16 unchanged sentences

Non-current liabilities

( 207 ) ( 188 )

Net funded status

$ ( 204 ) $ ( 172 )

The following assumptions were used to determine pension obligations and pension costs for the principal plans in which the Company’s employees participated:

14 unchanged sentences

plans and non-U.S.

plans, respectively, used to determine pension obligations and pension costs, are long-term rates based on historic plan asset returns in individual jurisdictions, over varying long-term periods combined with current market expectations and broad asset mix considerations.

plans, respectively, used to determine pension obligations and pension costs, are long-term rates based on

historic plan asset returns in individual jurisdictions, over varying long-term periods combined with current market expectations and broad asset mix considerations.

As of December 31, 2020, plans with benefit obligations in excess of plan assets had accumulated benefit obligations of $ 518 million and plan assets of $ 307 million.

11 unchanged sentences

The Company believes that diversification of the pension plans’ assets is an important investment strategy to provide reasonable assurance that no single security or class of securities will have a disproportionate impact on the pension plans.

As such, the Company allocates assets

among traditional equity, fixed income (government issued securities, corporate bonds and short-term cash investments) and other investment strategies.

As such, the Company allocates assets among traditional equity, fixed income (government issued securities, corporate bonds and short-term cash investments) and other investment strategies.

The equity component’s purpose is to provide a total return that will help preserve the purchasing power of the assets.

5 unchanged sentences

The fixed income component is expected to approximate 33 %- 43 % of the plans’ assets.

The purpose of the alternative investment component is to provide diversification and risk reduction through less correlated investment strategies with the goal of enhanced returns and downside protection.

Alternative strategies will not be used if they are designed solely to enhance return and/or employ significant leverage.

Diversification of asset categories, investment styles and managers is central to managing investment risk.

The alternative investment component is expected to approximate 7%-17% of the plans’ assets.

The following table presents the defined benefit pension plans’ assets measured at fair value, as of December 31:

Asset Class Level 1 Level 2 Total

Cash equivalents and short-term investments $ 19 $ 50 $ 69

equities 113 56 169

equities 64 103 167

Government bonds 5 1 6

Corporate bonds 105 32 137

Other assets 1 173 174

Total assets $ 307 $ 415 $ 722

Asset Class Level 1 Level 2 Total

Cash equivalents and short-term investments $ 16 $ 54 $ 70

equities 100 52 152

equities 59 99 158

Government bonds 4 3 7

Corporate bonds 96 20 116

Other assets 2 144 146

Total assets $ 277 $ 372 $ 649

The Company estimates that future benefit payments from plan assets will be $ 30 million, $ 31 million, $ 31 million, $ 32 million, $ 33 million and $ 184 million for 2021, 2022, 2023, 2024, 2025 and 2026 to 2030, respectively.

6 unchanged sentences

and (iv) the Company has no involvement in the management of the multiemployer plans’ investments.

For the years ended December 31, 2019 , 2018 and 2017 , the Company contributed a total of $ 9 million in each of the periods to multiemployer plans.

For the year ended December 31, 2020, the Company contributed a total of $ 7 million and during the years ended December 31, 2019 and 2018, the Company contributed a total of $ 9 million in each of the periods to multiemployer plans.

Financial Instruments

8 unchanged sentences

The Company has designated its euro-denominated notes as a hedge of its investment in euro-denominated foreign operations.

The estimated net amount of existing gains or losses the Company expects 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.

The estimated net amount of existing gains or losses the Company expects 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 .

18 unchanged sentences

Interest rate swaps 1,950 1,500

Represents $ 5.9 billion of interest rate caps sold, partially offset by approximately $ 2.7 billion of interest rate caps purchased at December 31, 2019 and $ 5.7 billion of interest rate caps sold, partially offset by approximately $ 2.7 billion of interest rate caps purchased at December 31, 2018 .

(a) Represents $ 6.0 billion of interest rate caps sold, partially offset by approximately $ 2.9 billion of interest rate caps purchased at December 31, 2020 and $ 5.9 billion of interest rate caps sold, partially offset by approximately $ 2.7 billion of interest rate caps purchased at December 31, 2019.

These amounts exclude $ 3.1 billion and $ 3.2 billion of interest rate caps purchased by the Company’s Avis Budget Rental Car Funding subsidiary at December 31, 2020 and 2019, respectively.

Fair values (Level 2) of derivative instruments are as follows:

As of December 31, 2019

As of December 31, 2018

Fair Value, Asset

Fair Value, Liability

As of December 31, 2020 As of December 31, 2019

Fair Value, Asset

Fair Value, Liability

Derivatives Fair Value, Liability

Derivatives Fair Value, Asset

Derivatives Fair Value, Liability

Derivatives designated as hedging instruments

Interest rate swaps (a)

$ — $ 69 $ — $ 27

Derivatives not designated as hedging instruments

Interest rate caps (b)

Foreign exchange contracts (c)

Commodity contracts (c)

Interest rate caps (b)

Total $ 3 $ 80 $ 5 $ 38

Amounts in this table exclude derivatives issued by Avis Budget Rental Car Funding, as it is not consolidated by the Company;

however, certain amounts related to the derivatives held by Avis Budget Rental Car Funding are included within accumulated other comprehensive income (loss), as discussed in Note 16-Stockholders’ Equity.

Included in other non-current assets or other non-current liabilities.

Included in assets under vehicle programs or liabilities under vehicle programs.

Included in other current assets or other current liabilities.

(a) Included in other non-current assets or other non-current liabilities.

(b) Included in assets under vehicle programs or liabilities under vehicle programs.

The effects of derivatives recognized in the Company’s Consolidated Financial Statements are as follows:

Year Ended December 31,

2020 2019 2018

Financial instruments designated as hedging instruments (a)

Interest rate swaps (b)

$ ( 31 ) $ ( 23 ) $ ( 4 )

Euro-denominated notes (c)

1 unchanged sentence

Foreign exchange contracts (e)

( 5 ) ( 7 ) 31

Interest rate caps (f)

— ( 1 ) ( 3 )

Commodity contracts (g)

Recognized, net of tax, as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

Classified as a net unrealized gain (loss) on cash flow hedges in accumulated other comprehensive income (loss).

Total $ ( 109 ) $ ( 11 ) $ 48

(a) Recognized, net of tax, as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

(b) Classified as a net unrealized gain (loss) on cash flow hedges in accumulated other comprehensive income (loss).

Refer to Note 16-Stockholders’ Equity for amounts reclassified from accumulated other comprehensive income (loss) into earnings.

Classified as a net investment hedge within currency translation adjustment in accumulated other comprehensive income (loss).

Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures being hedged.

(c) Classified as a net investment hedge within currency translation adjustment in accumulated other comprehensive income (loss).

(d) Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures being hedged.

(e) For the year ended December 31, 2020, included a $ 3 million loss in interest expense and a $ 2 million loss included in operating expenses.

For the year ended December 31, 2019, included an $ 11 million loss included in interest expense and a $ 4 million gain included in operating expenses.

For the year ended December 31, 2018 , included a $ 19 million gain included in interest expense and a $ 12 million gain included in operating expenses.

For the year ended December 31, 2017 , included a $ 23 million loss in interest expense and a $ 19 million loss included in operating expenses.

Primarily included in vehicle interest, net.

Included in operating expenses.

For the year ended December 31, 2018, included a $ 19 million gain in interest expense and a $ 12 million gain included in operating expenses.

(f) Primarily included in vehicle interest, net.

(g) Included in operating expenses.

Debt Instruments

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

As of December 31, 2019

As of December 31, 2018

Carrying Amount

Estimated Fair Value

Carrying Amount

Estimated Fair Value

As of December 31, 2020 As of December 31, 2019

Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value

Corporate debt

Short-term debt and current portion of long-term debt

$ 19 $ 18 $ 19 $ 19

Long-term debt 4,191 4,337 3,416 3,572

1 unchanged sentence

Vehicle-backed debt due to Avis Budget Rental Car Funding

$ 5,080 $ 5,317 $ 7,936 $ 8,077

Vehicle-backed debt 1,775 1,796 3,129 3,142

Interest rate swaps and interest rate caps (a)

Derivatives in liability position.

(a) Derivatives in liability position.

Segment Information

2 unchanged sentences

The Company aggregates certain of its operating segments into its reportable segments.

Management evaluates the operating results of each of its reportable segments based upon revenues and “Adjusted EBITDA,” which the Company defines 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 legal matters, non-operational charges related to shareholder activist activity, gain on sale of equity method investment in China and income taxes.

Net charges for unprecedented personal-injury legal matters and gain on sale of equity method investment in China are recorded within operating expenses in the Company’s Consolidated Statements 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 the Company’s Consolidated Statements of Operations.

The Company has revised its definition of Adjusted EBITDA to exclude the gain on sale of equity method investment in China.

The Company did not revise prior years’ Adjusted EBITDA amounts because there were no gains similar in nature to this gain.

Management evaluates the operating results of each of its reportable segments based upon revenues and “Adjusted EBITDA,” which the Company defines 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, non-operational charges related to shareholder activist activity, gain on sale of equity method investment in China, COVID-19 charges and income taxes.

Net charges for unprecedented personal-injury and other legal matters and gain on sale of equity method investment in China are recorded within operating expenses in the Company’s Consolidated Statement of Comprehensive Income.

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 the Company’s Consolidated Statement of Comprehensive Income.

COVID-19 charges include unusual, direct and incremental costs due to the COVID-19 pandemic, such as minimum annual guaranteed rent in excess of concession fees for the period, overflow parking for idle vehicles and related shuttling costs, incremental cleaning supplies to sanitize vehicles and facilities and other charges, and losses associated with vehicles damaged in overflow parking lots, net of insurance proceeds, and are primarily recorded within operating expenses in the Company’s Consolidated Statement of Comprehensive Income.

The Company has revised its definition of Adjusted EBITDA to exclude COVID-19 charges.

The Company has not revised prior years' Adjusted EBITDA amounts because there were no other charges similar in nature to these.

The Company’s presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.

Year Ended December 31, 2020

International

Americas International Corporate

and Other (a)

Revenues $ 3,965 $ 1,437 $ — $ 5,402

Vehicle depreciation and lease charges, net

968 400 — 1,368

Vehicle interest, net 274 44 — 318

1 unchanged sentence

Non-vehicle depreciation and amortization

185 91 10 286

Assets exclusive of assets under vehicle programs

5,510 2,754 101 8,365

Assets under vehicle programs 7,155 2,018 — 9,173

Capital expenditures (excluding vehicles)

Primarily represents unallocated corporate expenses and receivables from our former subsidiaries .

(a) Primarily represents unallocated corporate expenses and receivables from our former subsidiaries .

Year Ended December 31, 2019

International

Americas International Corporate

and Other (a)

Revenues $ 6,352 $ 2,820 $ — $ 9,172

Vehicle depreciation and lease charges, net

1,462 601 — 2,063

Vehicle interest, net 284 60 — 344

2 unchanged sentences

Assets exclusive of assets under vehicle programs

6,226 2,995 90 9,311

Assets under vehicle programs 10,508 3,307 — 13,815

Capital expenditures (excluding vehicles)

Primarily represents unallocated corporate expenses and receivables from our former subsidiaries.

162 62 26 250

(a) Primarily represents unallocated corporate expenses and receivables from our former subsidiaries.

Year Ended December 31, 2018

International

Americas International Corporate

and Other (a)

Revenues $ 6,186 $ 2,938 $ — $ 9,124

Vehicle depreciation and lease charges, net

1,568 611 — 2,179

Vehicle interest, net 252 62 — 314

1 unchanged sentence

Non-vehicle depreciation and amortization

152 104 — 256

Assets exclusive of assets under vehicle programs

3,782 2,495 93 6,370

Assets under vehicle programs 9,670 3,109 — 12,779

Capital expenditures (excluding vehicles)

Primarily represents unallocated corporate expenses and receivables from our former subsidiaries.

134 76 21 231

(a) Primarily represents unallocated corporate expenses and receivables from our former subsidiaries.

Provided below is a reconciliation of Adjusted EBITDA to income before income taxes.

For the Year Ended December 31,

2020 2019 2018

Adjusted EBITDA $ ( 175 ) $ 788 $ 781

2 unchanged sentences

Early extinguishment of corporate debt 9 12 19

COVID-19 charges (b)

Restructuring and other related charges 118 80 22

Unprecedented personal-injury and other legal matters, net (c)

Non-operational charges related to shareholder activist activity (d)

Transaction-related costs, net 3 10 20

Non-operational charges related to shareholder activist activity (b)

Charges for legal matter, net (c)

Gain on sale of equity method investment in China (c)

Income before income taxes $ ( 956 ) $ 287 $ 267

Inc ludes amortization of intangible assets recognized in purchase accounting of $ 56 million in 2019 , $ 61 million in 2018 and $ 58 million in 2017 .

Reported within selling, general and administrative expenses in our Consolidated Statements of Operations .

Reported within operating expenses in our Consolidated Statements of Operations .

(a) Inc ludes amortization of intangible assets recognized in purchase accounting of $ 66 million in 2020, $ 56 million in 2019 and $ 61 million in 2018.

(b) Includes $116 million within operating expenses, $5 million within selling, general and administrative expenses and $1 million within vehicle depreciation and lease charges, net in our Consolidated Statements of Operations.

Primarily consisting of $60 million of minimum annual guaranteed rent in excess of concession fees, $48 million of incremental cleaning supplies to sanitize vehicles and facilities, overflow parking for idle vehicles and related shuttling costs and other charges, and $14 million of losses associated with vehicles damaged in overflow parking lots, net of insurance proceeds.

(d) Reported within selling, general and administrative expenses in our Consolidated Statements of Operations .

The geographic segment information provided below is classified based on the geographic location of the Company’s subsidiaries.

United States

All Other Countries

United States All Other Countries Total

Revenues $ 3,758 $ 1,644 $ 5,402

Assets exclusive of assets under vehicle programs 5,262 3,103 8,365

1 unchanged sentence

Net long-lived assets 1,421 1,147 2,568

Revenues $ 5,867 $ 3,305 $ 9,172

Assets exclusive of assets under vehicle programs 5,830 3,481 9,311

1 unchanged sentence

Net long-lived assets 1,536 1,155 2,691

Revenues $ 5,708 $ 3,416 $ 9,124

Assets exclusive of assets under vehicle programs 3,494 2,876 6,370

1 unchanged sentence

Net long-lived assets 1,476 1,177 2,653

Guarantor and Non-Guarantor Consolidating Financial Statements

The following consolidating financial information presents Consolidating Condensed Statements of Operations for the years ended December 31, 2019 , 2018 and 2017 , Consolidating Condensed Balance Sheets as of December 31, 2019 and December 31, 2018 and Consolidating Condensed Statements of Cash Flows for the years ended December 31, 2019 , 2018 and 2017 for:

(i) Avis Budget Group, Inc.

(the “Parent”);

(ii) ABCR and Avis Budget Finance, Inc.

(the “Subsidiary Issuers”);

(iii) the guarantor subsidiaries;

(iv) the non-guarantor subsidiaries;

(v) elimination entries necessary to consolidate the Parent with the Subsidiary Issuers, the guarantor and non-guarantor subsidiaries;

and (vi) the Company on a consolidated basis.

The Subsidiary Issuers and the guarantor and non-guarantor subsidiaries are 100% owned by the Parent, either directly or indirectly.

All guarantees are full and unconditional and joint and several.

This financial information is being presented in relation to the Company’s guarantee of the payment of principal, premium (if any) and interest on the notes issued by the Subsidiary Issuers.

See Note 13-Long-term Corporate Debt and Borrowing Arrangements for additional description of these guaranteed notes.

The Senior Notes have separate investors than the equity investors of the Company and are guaranteed by the Parent and certain subsidiaries.

Investments in subsidiaries are accounted for using the equity method of accounting for purposes of the consolidating presentation.

The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions.

For purposes of the accompanying Consolidating Condensed Statements of Operations, certain expenses incurred by the Subsidiary Issuers are allocated to the guarantor and non-guarantor subsidiaries.

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

As of December 31,

Non-Guarantor

Cash and cash equivalents

Restricted cash (a)

Total cash and cash equivalents, program and restricted cash

Included within other current assets.

Consolidating Condensed Statements of Operations

For the Year Ended December 31, 2019

Subsidiary Issuers

Vehicle depreciation and lease charges, net

Selling, general and administrative

Vehicle interest, net

Non-vehicle related depreciation and amortization

Interest expense related to corporate debt, net:

Interest expense

Intercompany interest expense (income)

Early extinguishment of debt

Restructuring and other related charges

Transaction-related costs, net

Total expenses

Income (loss) before income taxes and equity in earnings of subsidiaries

Provision for (benefit from) income taxes

Equity in earnings of subsidiaries

Comprehensive income

For the Year Ended December 31, 2018

Subsidiary Issuers

Guarantor Subsidiaries

Non-Guarantor Subsidiaries

Vehicle depreciation and lease charges, net

Selling, general and administrative

Vehicle interest, net

Non-vehicle related depreciation and amortization

Interest expense related to corporate debt, net:

Interest expense

Intercompany interest expense (income)

Early extinguishment of debt

Restructuring and other related charges

Transaction-related costs, net

Total expenses

Income (loss) before income taxes and equity in earnings of subsidiaries

Provision for (benefit from) income taxes

Equity in earnings of subsidiaries

Comprehensive income

For the Year Ended December 31, 2017

Non-Guarantor Subsidiaries

Vehicle depreciation and lease charges, net

Selling, general and administrative

Vehicle interest, net

Non-vehicle related depreciation and amortization

Interest expense related to corporate debt, net:

Interest expense

Intercompany interest expense (income)

Early extinguishment of debt

Restructuring and other related charges

Transaction-related costs, net

Total expenses

Income (loss) before income taxes and equity in earnings of subsidiaries

Provision for (benefit from) income taxes

Equity in earnings of subsidiaries

Comprehensive income

Consolidating Condensed Balance Sheets

As of December 31, 2019

Subsidiary Issuers

Guarantor Subsidiaries

Non-Guarantor Subsidiaries

Current assets:

Cash and cash equivalents

Receivables, net

Other current assets

Total current assets

Property and equipment, net

Operating lease right-of-use assets

Deferred income taxes

Other intangibles, net

Other non-current assets

Intercompany receivables

Investment in subsidiaries

Total assets exclusive of assets under vehicle programs

Assets under vehicle programs:

Vehicles, net

Receivables from vehicle manufacturers and other

Investment in Avis Budget Rental Car Funding (AESOP) LLC-related party

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable and other current liabilities

Short-term debt and current portion of long-term debt

Total current liabilities

Long-term debt

Long-term operating lease liabilities

Other non-current liabilities

Intercompany payables

Total liabilities exclusive of liabilities under vehicle programs

Liabilities under vehicle programs:

Due to Avis Budget Rental Car Funding (AESOP) LLC-related party

Deferred income taxes

Total stockholders’ equity

Total liabilities and stockholders’ equity

As of December 31, 2018

Subsidiary Issuers

Guarantor Subsidiaries

Non-Guarantor Subsidiaries

Current assets:

Cash and cash equivalents

Receivables, net

Other current assets

Total current assets

Property and equipment, net

Deferred income taxes

Other intangibles, net

Other non-current assets

Intercompany receivables

Investment in subsidiaries

Total assets exclusive of assets under vehicle programs

Assets under vehicle programs:

Vehicles, net

Receivables from vehicle manufacturers and other

Investment in Avis Budget Rental Car Funding (AESOP) LLC-related party

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable and other current liabilities

Short-term debt and current portion of long-term debt

Total current liabilities

Long-term debt

Other non-current liabilities

Intercompany payables

Total liabilities exclusive of liabilities under vehicle programs

Liabilities under vehicle programs:

Due to Avis Budget Rental Car Funding (AESOP) LLC-related party

Deferred income taxes

Total stockholders’ equity

Total liabilities and stockholders’ equity

Consolidating Condensed Statements of Cash Flows

For the Year Ended December 31, 2019

Subsidiary Issuers

Guarantor Subsidiaries

Non-Guarantor Subsidiaries

Net cash provided by (used in) operating activities

Investing activities

Property and equipment additions

Proceeds received on asset sales

Net assets acquired (net of cash acquired)

Net cash provided by (used in) investing activities exclusive of vehicle programs

Vehicle programs:

Investment in vehicles

Proceeds received on disposition of vehicles

Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC — related party

Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP) LLC — related party

Net cash provided by (used in) investing activities

Financing activities

Proceeds from long-term borrowings

Payments on long-term borrowings

Net change in short-term borrowings

Debt financing fees

Repurchases of common stock

Net cash provided by (used in) financing activities exclusive of vehicle programs

Vehicle programs:

Proceeds from borrowings

Payments on borrowings

Debt financing fees

Net cash provided by (used in) financing activities

Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash

Net increase (decrease) in cash and cash equivalents, program and restricted cash

Cash and cash equivalents, program and restricted cash, beginning of period

Cash and cash equivalents, program and restricted cash, end of period

For the Year Ended December 31, 2018

Subsidiary Issuers

Guarantor Subsidiaries

Non-Guarantor Subsidiaries

Net cash provided by (used in) operating activities

Investing activities

Property and equipment additions

Proceeds received on asset sales

Net assets acquired (net of cash acquired)

Intercompany loan receipts (advances)

Net cash provided by (used in) investing activities exclusive of vehicle programs

Vehicle programs:

Investment in vehicles

Proceeds received on disposition of vehicles

Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC- related party

Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP) LLC- related party

Net cash provided by (used in) investing activities

Financing activities

Proceeds from long-term borrowings

Payments on long-term borrowings

Net change in short-term borrowings

Debt financing fees

Repurchases of common stock

Intercompany loan borrowings (payments)

Net cash provided by (used in) financing activities exclusive of vehicle programs

Vehicle programs:

Proceeds from borrowings

Payments on borrowings

Debt financing fees

Net cash provided by (used in) financing activities

Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash

Net increase (decrease) in cash and cash equivalents, program and restricted cash

Cash and cash equivalents, program and restricted cash, beginning of period

Cash and cash equivalents, program and restricted cash, end of period

For the Year Ended December 31, 2017

Subsidiary Issuers

Guarantor Subsidiaries

Non-Guarantor Subsidiaries

Net cash provided by (used in) operating activities

Investing activities

Property and equipment additions

Proceeds received on asset sales

Net assets acquired (net of cash acquired)

Intercompany loan receipts (advances)

Net cash provided by (used in) investing activities exclusive of vehicle programs

Vehicle programs:

Investment in vehicles

Proceeds received on disposition of vehicles

Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC- related party

Net cash provided by (used in) investing activities

Financing activities

Proceeds from long-term borrowings

Payments on long-term borrowings

Net change in short-term borrowings

Debt financing fees

Repurchases of common stock

Intercompany loan borrowings (payments)

Net cash provided by (used in) financing activities exclusive of vehicle programs

Vehicle programs:

Proceeds from borrowings

Payments on borrowings

Debt financing fees

Net cash provided by (used in) financing activities

Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash

Net increase (decrease) in cash and cash equivalents, program and restricted cash

Cash and cash equivalents, program and restricted cash, beginning of period

Cash and cash equivalents, program and restricted cash, end of period

Selected Quarterly Financial Data—(unaudited)

Provided below are selected unaudited quarterly financial data for 2019 and 2018 .

The earnings per share information is calculated independently for each quarter based on the weighted average number of common stock and common stock equivalents outstanding, which may fluctuate, based on quarterly income levels and market prices.

Therefore and due to the seasonality of the Company’s earnings, the sum of the quarters’ per share information may not equal the annual amount presented on the Consolidated Statements of Operations.

Net income (loss)

Per share information:

Net income (loss)

Weighted average shares

Net income (loss)

Weighted average shares

Net income (loss)

Per share information:

Net income (loss)

Weighted average shares

Net income (loss)

Weighted average shares

Net income for the third quarter 2018 included additional tax expense of $ 30 million resulting from the completion of the accounting for the effects of the Tax Act for the one-time transition tax on the deemed repatriation of cumulative foreign subsidiary earnings.

Subsequent Events

In January 2020, the Company’s Avis Budget Rental Car Funding subsidiary issued approximately $ 700 million in asset-backed notes with an expected final payment date of August 2025 incurring interest at a weighted average rate of 2.42 % .

On January 27, 2020, a short-term stockholder rights plan was adopted, which expires on January 26, 2021.

Pursuant to the rights plan, the Company declared a dividend of one common share purchase right for each outstanding share of common stock, payable to holders of record as of the close of business on February 7, 2020.

Each right, which is exercisable only in the event any person or group acquires a voting or economic position of 20% or more of the Company’s outstanding common stock (with certain limited exceptions), would entitle any holder other than the person or group whose ownership position has exceeded the ownership limit to purchase common stock having a value equal to twice the $ 110 exercise price of the right, or, at the election of the Board of Directors, to exchange each right for one share of common stock (subject to adjustment).

In February 2020, the Company amended its Floating Rate Term Loan due 2025 to extend its maturity term to 2027 and to reduce its interest to one-month LIBOR plus 1.75%.

The Company increased its outstanding borrowing to $ 1.2 billion and will use the additional proceeds from the offering to redeem $ 100 million of its outstanding 5½% Senior Notes due 2023.

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.

Schedule II – Valuation and Qualifying Accounts

(in millions)

Balance at Beginning of Period

Expense (Benefit)

Other Adjustments (a)

Balance at End of Period

Description Balance at Beginning of Period Expense (Benefit) Other Adjustments (a)

Deductions Balance at End of Period

Allowance for Doubtful Accounts:

Year Ended December 31,

2020 $ 52 $ 73 $ 3 $ ( 68 ) $ 60

2019 39 41 — ( 28 ) 52

2018 36 34 ( 2 ) ( 29 ) 39

Tax Valuation Allowance:

Year Ended December 31,

Other adjustments relate to currency translation adjustments.

2020 $ 214 $ ( 1 ) $ ( 6 ) $ — $ 207

2019 311 ( 95 ) ( 2 ) — 214

2018 331 ( 3 ) ( 17 ) — 311

(a) Other adjustments relate to currency translation adjustments.

2.1 Separation and Distribution Agreement by and among Cendant Corporation*, Realogy Corporation, Wyndham Worldwide Corporation and Travelport Inc., dated as of July 27, 2006 (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated August 1, 2006).

3 unchanged sentences

(Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated September 5, 2006).

Amended and Restated By-Laws of Avis Budget Group, Inc.

as of May 23, 2018 (Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated May 24, 2018).

Indenture, dated as of April 3, 2013, among Avis Budget Car Rental, LLC and Avis Budget Finance, Inc., as Issuers, the Guarantors from time to time parties thereto and The Bank of Nova Scotia Trust Company of New York as Trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated April 8, 2013).

Supplemental Indenture, dated as of June 21, 2013, to the Indenture, dated as of April 3, 2013, by and among Avis Budget Finance plc, as Issuer, the Guarantors from time to time parties thereto and The Bank of Nova Scotia Trust Company of New York as Trustee (Incorporated by reference to Exhibit 4.12(b) to Avis Budget Car Rental, LLC and Avis Budget Finance, Inc.’s Registration Statement on Form S-4, Registration No.

333-189524, dated June 21, 2013).

Form of 5.50% Senior Notes due 2023 (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated April 8, 2013).

3.2 Amended and Restated Bylaws of Avis Budget Group, Inc., dated August 10, 2020 (Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated August 13, 2020).

4.1 Indenture dated as of March 11, 2015 among Avis Budget Car Rental, LLC and Avis Budget Finance, Inc., as Issuers, the Guarantors from time to time parties thereto and The Bank of Nova Scotia Trust Company of New York as Trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated March 17, 2015).

13 unchanged sentences

(Incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 dated August 6, 2019).

Rights Agreement, dated as of January 27, 2020, between Avis Budget Group, Inc.

and Computershare Inc., as Rights Agent.

(Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated January 28, 2020).

Description of the Company’s Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.

Employment Agreement between Avis Budget Group, Inc.

De Shon dated as of September 15, 2015 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 18, 2015).†

Separation Agreement between Mr.

De Shon and Avis Budget Group, Inc.

dated May 26, 2019 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 31, 2019).

Separation Agreement dated March 18, 2019, between Mark Servodidio and Avis Budget Group, Inc.

(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 18, 2019).

4.12 Indenture, dated as of May 12, 2020, 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 and notes collateral agent (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated May 12, 2020).

4.13 First Supplemental Indenture, dated as of August 6, 2020, to the Indenture dated as of July 3, 2019, by and among Avis Budget Car Rental, LLC and Avis Budget Finance, Inc., as issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K dated August 7, 2020).

4.14 Form of 10.500% Senior Secured Note due 2025 (Incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated May 12, 2020).

4.15 Description of the Company’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.

10.1 Agreement between Avis Budget Group, Inc.

and Joseph Ferraro (Incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, dated February 24, 2016).†

Amended and Restated Letter Agreement, dated February 15, 2019, between Martyn Smith and Avis Budget Group, Inc.

(Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated February 19, 2019).

Amendment to Amended and Restated Letter Agreement between Martyn Smith and Avis Budget Group, Inc., dated September 11, 2019.

(Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019 dated November 1, 2019).

10.2 Agreement between Avis Budget Group, Inc.

1 unchanged sentence

(Incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 dated February 21, 2019).†

10.2(a) Separation Agreement, dated March 20, 2020, between Michael K.

Tucker and Avis Budget Group, Inc.

10.3 Offer Letter, dated February 15, 2019, between John North and Avis Budget Group, Inc.

(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 19, 2019).

Severance Agreement between John F.

10.3(a) Severance Agreement between John F.

North, III and Avis Budget Group, Inc.

1 unchanged sentence

(Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019 dated November 1, 2019).

Service Agreement between Patrick Rankin and Avis Budget Services Limited, dated February 22, 2019.

Agreement between Patrick Rankin and Avis Budget Services Limited, dated August 15, 2019.

10.3(b) Separation Agreement, dated August 12, 2020, between John North and Avis Budget Group, Inc.

(Incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K dated August 13, 2020).

10.3(c) Amendment, dated September 28, 2020, to Separation Agreement, dated August 12, 2020, between John North and Avis Budget Group, Inc.

(Incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2020, dated October 30, 2020).

10.4 Service Agreement between Patrick Rankin and Avis Budget Services Limited, dated February 22, 2019 (Incorporated by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, dated February 20, 2020).

10.5 Agreement between Patrick Rankin and Avis Budget Services Limited, dated August 15, 2019 (Incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, dated February 20, 2020).

10.6 Agreement between Avis Budget Group, Inc.

and Edward Linnen, dated April 20, 2015.

Second Amended and Restated Cooperation Agreement, dated April 16, 2018, by and among Avis Budget Group, Inc.

and SRS (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 16, 2018).

and Edward Linnen, dated April 20, 2015 (Incorporated by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, dated February 20, 2020).

10.7 Offer Letter, dated August 12, 2020, between Brian Choi and Avis Budget Group, Inc.

(incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated August 13, 2020).

10.8 Avis Budget Group, Inc.

Executive Severance Pay Plan for Grade A and B Employees and Summary Plan Description (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated December 14, 2020).

10.9 Third Amended and Restated Cooperation Agreement, dated as of February 23, 2020, by and among Avis Budget Group, Inc., SRS Investment Management, LLC and certain of its affiliates (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated February 23, 2020).

10.9(a) Amendment, dated August 12, 2020, to Third Amended and Restated Cooperation Agreement, dated as of February 23, 2020, by and among Avis Budget Group, Inc., SRS Investment Management, LLC and certain of its affiliates (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated August 13, 2020).

10.10 Avis Budget Group, Inc.

Amended and Restated Equity and Incentive Plan (Incorporated by reference to Annex A to the Company’s Definitive Proxy Statement on Schedule 14A dated March 26, 2019).

1 unchanged sentence

333-34517, dated August 28, 1997).†

Amendment to 1997 Stock Incentive Plan dated March 27, 2000 (Incorporated by reference to Exhibit 10.12(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).†

Amendment to 1997 Stock Incentive Plan dated March 28, 2000 (Incorporated by reference to Exhibit 10.12(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).†

Amendment to 1997 Stock Incentive Plan dated January 3, 2001 (Incorporated by reference to Exhibit 10.12(d) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).†

10.11(a) Amendment to 1997 Stock Incentive Plan dated March 27, 2000 (Incorporated by reference to Exhibit 10.12(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).†

10.11(b) Amendment to 1997 Stock Incentive Plan dated March 28, 2000 (Incorporated by reference to Exhibit 10.12(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).†

10.11(c) Amendment to 1997 Stock Incentive Plan dated January 3, 2001 (Incorporated by reference to Exhibit 10.12(d) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 dated March 29, 2001).†

10.12 Amendment to Various Equity-Based Plans (Incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 dated March 1, 2006).†

Avis Budget Group, Inc.

Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 18, 2009).†

Amendment No.

1 to the Avis Budget Group, Inc.

Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.17(b) to Avis Budget Car Rental, LLC and Avis Budget Finance, Inc.’s Registration Statement on Form S-4, Registration No.

333-17490, dated October 25, 2011).†

10.13 Form of Award Agreement - Restricted Stock Units.

19 unchanged sentences

10.23 Tax Sharing Agreement among Cendant Corporation*, Realogy Corporation, Wyndham Worldwide Corporation and Travelport Inc., dated as of July 28, 2006 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated August 1, 2006).

Amendment to the Tax Sharing Agreement, dated July 28, 2006, among Avis Budget Group, Inc., Realogy Corporation, Wyndham Worldwide Corporation and Travelport Inc.

10.23(a) Amendment to the Tax Sharing Agreement, dated July 28, 2006, among Avis Budget Group, Inc., Realogy Corporation, Wyndham Worldwide Corporation and Travelport Inc.

(Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008 dated August 7, 2008).

10.24 Second Amended and Restated Base Indenture, dated as of June 3, 2004, among Cendant Rental Car Funding (AESOP) LLC***, as Issuer, and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, dated August 2, 2004).

Supplemental Indenture No.

10.24(a) Supplemental Indenture No.

1, dated as of December 23, 2005, among Cendant Rental Car Funding (AESOP) LLC***, as Issuer, and The Bank of New York, as Trustee, to the Second Amended and Restated Base Indenture, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 20, 2006).

Supplemental Indenture No.

10.24(b) Supplemental Indenture No.

2, dated as of May 9, 2007, among Avis Budget Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York Trust Company, N.A.

(as successor in interest to The Bank of New York), as Trustee, to the Second Amended and Restated Base Indenture, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, dated August 8, 2007).

Supplemental Indenture No.

10.24(c) Supplemental Indenture No.

3, dated as of August 16, 2013, among Avis Budget Rental Car Funding (AESOP) LLC, as Issuer, and The Bank of New York Trust Company, N.A.

2 unchanged sentences

10.8 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, dated August 2, 2004).

First Amendment, dated as of December 23, 2005, among AESOP Leasing L.P., as Borrower, Quartx Fleet Management, Inc., as a Permitted Nominee, PV Holding Corp., as a Permitted Nominee, and Cendant Rental Car Funding (AESOP) LLC***, as Lender, to the Second Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 20, 2006).

Second Amendment, dated as of May 9, 2007, among AESOP Leasing L.P., as Borrower, PV Holding Corp., as a Permitted Nominee, Quartx Fleet Management, Inc., as a Permitted Nominee, and Avis Budget Rental Car Funding (AESOP) LLC, as Lender, to the Second Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, dated August 8, 2007).

Third Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Borrower, PV Holding Corp., as a Permitted Nominee, Quartx Fleet Management, Inc., as a Permitted Nominee, and Avis Budget Rental Car Funding (AESOP) LLC, as Lender, to the Second Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.36(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014).

10.25(a) First Amendment, dated as of December 23, 2005, among AESOP Leasing L.P., as Borrower, Quartx Fleet Management, Inc., as a Permitted Nominee, PV Holding Corp., as a Permitted Nominee, and Cendant Rental Car Funding (AESOP) LLC***, as Lender, to the Second Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 20, 2006).

10.25(b) Second Amendment, dated as of May 9, 2007, among AESOP Leasing L.P., as Borrower, PV Holding Corp., as a Permitted Nominee, Quartx Fleet Management, Inc., as a Permitted Nominee, and Avis Budget Rental Car Funding (AESOP) LLC, as Lender, to the Second Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, dated August 8, 2007).

10.25(c) Third Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Borrower, PV Holding Corp., as a Permitted Nominee, Quartx Fleet Management, Inc., as a Permitted Nominee, and Avis Budget Rental Car Funding (AESOP) LLC, as Lender, to the Second Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.36(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014).

10.26 Amended and Restated Loan Agreement, dated as of June 3, 2004, among AESOP Leasing L.P., as Borrower, and Cendant Rental Car Funding (AESOP) LLC***, as Lender (Incorporated by reference to Exhibit 10.29(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, dated March 1, 2007).

First Amendment, dated as of December 23, 2005, among AESOP Leasing L.P., as Borrower, and Cendant Rental Car Funding (AESOP) LLC***, as Lender, to the Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.29(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, dated March 1, 2007).

Second Amendment, dated as of the May 9, 2007, among AESOP Leasing L.P., as Borrower, and Avis Budget Rental Car Funding (AESOP) LLC, as Lender, to the Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, dated August 8, 2007).

Third Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Borrower, and Avis Budget Rental Car Funding (AESOP) LLC, as Lender, to the Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.37(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014).

10.26(a) First Amendment, dated as of December 23, 2005, among AESOP Leasing L.P., as Borrower, and Cendant Rental Car Funding (AESOP) LLC***, as Lender, to the Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.29(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, dated March 1, 2007).

10.26(b) Second Amendment, dated as of the May 9, 2007, among AESOP Leasing L.P., as Borrower, and Avis Budget Rental Car Funding (AESOP) LLC, as Lender, to the Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, dated August 8, 2007).

10.26(c) Third Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Borrower, and Avis Budget Rental Car Funding (AESOP) LLC, as Lender, to the Amended and Restated Loan Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.37(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014).

10.27 Second Amended and Restated Master Motor Vehicle Operating Lease Agreement, dated as of June 3, 2004, among AESOP Leasing L.P., as Lessor, and Cendant Car Rental Group, Inc.**, as Lessee and as Administrator (Incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, dated August 2, 2004).

First Amendment, dated December 23, 2005, among AESOP Leasing L.P., as Lessor, and Cendant Car Rental Group, Inc.**, as Lessee and as Administrator, to the Second Amended and Restated Master Motor Vehicle Operating Lease Agreement, dated as of December 23, 2005 (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated January 20, 2006).

Third Amendment, dated as of May 9, 2007, among AESOP Leasing L.P., as Lessor and Avis Budget Car Rental, LLC, as Lessee and as the Administrator, to the Second Amended and Restated Master Motor Vehicle Operating Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, dated August 8, 2007).

Fourth Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Lessor and Avis Budget Car Rental, LLC, as Lessee and as the Administrator, to the Second Amended and Restated Master Motor Vehicle Operating Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.38(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014).

10.27(a) First Amendment, dated December 23, 2005, among AESOP Leasing L.P., as Lessor, and Cendant Car Rental Group, Inc.**, as Lessee and as Administrator, to the Second Amended and Restated Master Motor Vehicle Operating Lease Agreement, dated as of December 23, 2005 (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated January 20, 2006).

10.27(b) Third Amendment, dated as of May 9, 2007, among AESOP Leasing L.P., as Lessor and Avis Budget Car Rental, LLC, as Lessee and as the Administrator, to the Second Amended and Restated Master Motor Vehicle Operating Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, dated August 8, 2007).

10.27(c) Fourth Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Lessor and Avis Budget Car Rental, LLC, as Lessee and as the Administrator, to the Second Amended and Restated Master Motor Vehicle Operating Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.38(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014).

10.28 Amended and Restated Master Motor Vehicle Finance Lease Agreement, dated as of June 3, 2004, among AESOP Leasing L.P., as Lessor, Cendant Car Rental Group, Inc.**, as Lessee, as Administrator and as Finance Lease Guarantor, Avis Rent A Car System, Inc.****, as Lessee, and Budget Rent A Car System, Inc., as Lessee (Incorporated by reference to Exhibit 10.30(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, dated March 1, 2007).

First Amendment, dated as of December 23, 2005, among AESOP Leasing L.P., as Lessor, Cendant Car Rental Group, Inc.**, as Lessee, as Administrator and as Finance Lease Guarantor, Avis Rent A Car System, Inc.****, as Lessee, and Budget Rent A Car System, Inc., as Lessee, to the Amended and Restated Master Motor Vehicle Finance Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.30(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, dated March 1, 2007).

Third Amendment, dated as of May 9, 2007, among AESOP Leasing L.P., as Lessor, Avis Budget Car Rental, LLC, as Lessee, as Administrator and as Finance Lease Guarantor, Avis Rent A Car System, LLC, as Lessee, and Budget Rent A Car System, Inc., as Lessee, to the Amended and Restated Master Motor Vehicle Finance Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, dated August 8, 2007).

Fourth Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Lessor, Avis Budget Car Rental, LLC, as Lessee, as Administrator and as Finance Lease Guarantor, Avis Rent A Car System, LLC, as Lessee, and Budget Rent A Car System, Inc., as Lessee, to the Amended and Restated Master Motor Vehicle Finance Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.39(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014).

10.28(a) First Amendment, dated as of December 23, 2005, among AESOP Leasing L.P., as Lessor, Cendant Car Rental Group, Inc.**, as Lessee, as Administrator and as Finance Lease Guarantor, Avis Rent A Car System, Inc.****, as Lessee, and Budget Rent A Car System, Inc., as Lessee, to the Amended and Restated Master Motor Vehicle Finance Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.30(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, dated March 1, 2007).

10.28(b) Third Amendment, dated as of May 9, 2007, among AESOP Leasing L.P., as Lessor, Avis Budget Car Rental, LLC, as Lessee, as Administrator and as Finance Lease Guarantor, Avis Rent A Car System, LLC, as Lessee, and Budget Rent A Car System, Inc., as Lessee, to the Amended and Restated Master Motor Vehicle Finance Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, dated August 8, 2007).

10.28(c) Fourth Amendment, dated as of August 16, 2013, among AESOP Leasing L.P., as Lessor, Avis Budget Car Rental, LLC, as Lessee, as Administrator and as Finance Lease Guarantor, Avis Rent A Car System, LLC, as Lessee, and Budget Rent A Car System, Inc., as Lessee, to the Amended and Restated Master Motor Vehicle Finance Lease Agreement, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.39(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014).

10.29 AESOP I Operating Sublease Agreement dated as of March 26, 2013 between Zipcar, Inc.

2 unchanged sentences

II, Avis Rent A Car System, Inc.****, Budget Rent A Car System, Inc., Cendant Car Rental Group, Inc.** and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, dated March 1, 2006).

First Amendment, dated as of August 16, 2013, among Avis Budget Rental Car Funding (AESOP) LLC, AESOP Leasing L.P., AESOP Leasing Corp.

10.30(a) First Amendment, dated as of August 16, 2013, among Avis Budget Rental Car Funding (AESOP) LLC, AESOP Leasing L.P., AESOP Leasing Corp.

II, Avis Rent A Car System, LLC, Budget Rent A Car System, Inc.

2 unchanged sentences

10.32 Third Amended and Restated Series 2010-6 Supplement, dated as of August 16, 2018, by and among Avis Budget Rental Car Funding (AESOP) LLC, as Issuer, Avis Budget Car Rental, LLC, as Administrator, JPMorgan Chase Bank, N.A., as Administrative Agent, the Non-Conduit Purchasers, the CP Conduit Purchasers, the Committed Note Purchasers, the Funding Agents and APA Banks named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee and as Series 2010-6 Agent (Incorporated by reference to Exhibit 10.42 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 dated February 21, 2019).

Series 2014-2 Supplement, dated as of July 24, 2014, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2014-2 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 24, 2014).

Series 2015-1 Supplement, dated as of January 29, 2015, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2015-1 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 30, 2015).

Series 2015-2 Supplement, dated as of May 27, 2015, between Avis Budget Rental Car Funding (AESOP) LLC and the Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2015-2 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 29, 2015).

10.33 Series 2016-1 Supplement, dated as of March 30, 2016, between Avis Budget Rental Car Funding (AESOP) LLC and the Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2016-1 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 5, 2016).

11 unchanged sentences

(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 20, 2020).

10.43 Series 2020-2 Supplement, dated as of August 12, 2020, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2020-2 Agent (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated August 14, 2020).

10.44 Fifth Amended and Restated Credit Agreement dated as of February 13, 2018, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, Avis Budget Group, Inc., the Subsidiary Borrowers from time to time parties thereto, the several banks and other financial institutions or entities from time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Deutsche Bank Securities Inc., as Syndication Agent, Citibank, N.A., Bank of America, N.A., Barclays Bank plc and Credit Agricole Corporate and Investment Bank, as Co-Documentation Agents (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 16, 2018).

10.44(a) First Amendment to the Fifth Amended and Restated Credit Agreement dated as of February 13, 2018, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, Avis Budget Group, Inc., the Subsidiary Borrowers from time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other lenders party thereto (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated February 6, 2020).

10.44(b) Second Amendment, dated as of April 27, 2020, to the Fifth Amended and Restated Credit Agreement, dated as of February 13, 2018, among Avis Budget Car Rental, LLC, Avis Budget Holdings, LLC, Avis Budget Group, Inc., the Subsidiary Borrowers from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other lenders party thereto (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated April 27, 2020).

10.45 Amended and Restated Guarantee & Collateral Agreement, dated as of May 3, 2011, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC and certain of its Subsidiaries in favor of 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 May 6, 2011).

Amendment dated as of March 4, 2013, to the Amended and Restated Credit Agreement and the Amended and Restated Guarantee & Collateral Agreement, each dated as of May 3, 2011, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC and certain of its Subsidiaries, JPMorgan Chase Bank, N.A., as Administrative Agent and certain other signatories thereto (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated March 5, 2013).

Second Amendment to the Amended and Restated Guarantee & Collateral Agreement, dated as of October 3, 2014, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC and certain of its Subsidiaries, in favor of 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 October 6, 2014).

10.45(a) Amendment dated as of March 4, 2013, to the Amended and Restated Credit Agreement and the Amended and Restated Guarantee & Collateral Agreement, each dated as of May 3, 2011, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC and certain of its Subsidiaries, JPMorgan Chase Bank, N.A., as Administrative Agent and certain other signatories thereto (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated March 5, 2013).

10.45(b) Second Amendment to the Amended and Restated Guarantee & Collateral Agreement, dated as of October 3, 2014, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC and certain of its Subsidiaries, in favor of 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 October 6, 2014).

10.46 Agreement of Resignation, Appointment And Acceptance, dated as of September 5, 2013, by and among Avis Budget Car Rental, LLC, Avis Budget Finance, Inc., The Bank of Nova Scotia Trust Company of New York, as the retiring trustee, and Deutsche Bank Trust Company Americas, as the successor trustee under the indentures described therein (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2013, dated November 1, 2013).

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London Branch, the Senior Noteholders and certain other entities named therein, dated May 30, 2018 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 5, 2018).††

10.51 Eleventh Master Amendment and Restatement Deed, by and among CarFin Finance International DAC, Credit Agricole Corporate And Investment Bank, Deutsche Trustee Company Limited, Credit Agricole Corporate And Investment Bank, the Opcos, Servicers, Lessees and FleetCos listed therein, Avis Budget Car Rental, LLC, Avis Finance Company Limited, Avis Budget EMEA Limited, the Account Banks listed therein, Deutsche Bank Ag, London Branch, the Senior Noteholders and certain other entities named therein, dated November 3, 2020 (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated November 9, 2020).††

21 Subsidiaries of Registrant.

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Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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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.

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is now known as Avis Rent A Car System, LLC.

Avis Group Holdings, Inc.

is now known as Avis Group Holdings, LLC.

† Denotes management contract or compensatory plan.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures