AVIS BUDGET GROUP, INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES (a) Disclosure Controls and Procedures . Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report. (b) Management’s Annual Report on Internal Control Over Financial Reporting . Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013) . Based on this assessment, our management believes that, as of December 31, 2020, our internal control over financial reporting was effective. The effectiveness of the Company’s internal control over financial reporting as of December 31, 2020 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm. Their attestation report is included below. (c) Changes in Internal Control Over Financial Reporting . During the 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. 47 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Avis Budget Group, Inc. Parsippany, New Jersey Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Avis Budget Group, Inc. and subsidiaries (the "Company") as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2020 of the Company and our report dated February 17, 2021 expressed an unqualified opinion on those consolidated financial statements and financial statement schedule. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ DELOITTE & TOUCHE LLP New York, New York February 17, 2021 48 Table of Contents ITEM 9B. OTHER INFORMATION None. 49 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this Item is incorporated by reference from our definitive proxy statement for the 2021 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after December 31, 2020. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is incorporated by reference from our definitive proxy statement for the 2021 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after December 31, 2020. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item is incorporated by reference from our definitive proxy statement for the 2021 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after December 31, 2020. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item is incorporated by reference from our definitive proxy statement for the 2021 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after December 31, 2020. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this Item is incorporated by reference from our definitive proxy statement for the 2021 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after December 31, 2020. 50 Table of Contents PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES ITEM 15(A)(1). FINANCIAL STATEMENTS See Consolidated Financial Statements and Consolidated Financial Statements Index commencing on page F-1 hereof. ITEM 15(A)(2). FINANCIAL STATEMENT SCHEDULES See Schedule II – Valuation and Qualifying Accounts for the years ended December 31, 2020, 2019 and 2018 commencing on page G-1 hereof. ITEM 15(A)(3). EXHIBITS See Exhibit Index commencing on page H-1 hereof. 51 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AVIS BUDGET GROUP, INC. By: /s/ CATHLEEN DEGENOVA Cathleen DeGenova Vice President and Chief Accounting Officer Date: February 17, 2021 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ JOSEPH A. FERRARO President and Chief Executive Officer February 17, 2021 (Joseph A. Ferraro) /s/ BRIAN CHOI Executive Vice President and Chief Financial Officer February 17, 2021 (Brian Choi) /s/ CATHLEEN DEGENOVA Vice President and Chief Accounting Officer February 17, 2021 (Cathleen DeGenova) /s/ BERNARDO HEES Executive Chairman of the Board of Directors February 17, 2021 (Bernardo Hees) /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 Director February 17, 2021 (Glenn Lurie) /s/ KARTHIK SARMA Director February 17, 2021 (Karthik Sarma) /s/ CARL SPARKS Director February 17, 2021 (Carl Sparks) 52 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm 2 Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018 6 Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018 7 Consolidated Balance Sheets as of December 31, 2020 and 2019 8 Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 9 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2020, 2019 and 2018 11 Notes to Consolidated Financial Statements 12 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Avis Budget Group, Inc. Parsippany, New Jersey Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Avis Budget Group, Inc. and subsidiaries (the "Company") as of December 31, 2020 and 2019, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 17, 2021, expressed an unqualified opinion on the Company's internal control over financial reporting. Change in Accounting Principle As discussed in Note 3 to the financial statements, effective January 1, 2019, the Company adopted FASB ASC Topic 842, Leases , using the transition method allowing entities to only apply the new lease standard in the year of adoption. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. F-2 Table of Contents Vehicles - Depreciation Expense - United States Risk Vehicles - Refer to Notes 2 and 8 to the financial statements Critical Audit Matter Description The Company records rental vehicles at cost, net of accumulated depreciation. The initial cost of the vehicles is recorded net of incentives and allowances from manufacturers. Rental vehicles acquired by the Company outside of manufacturer repurchase and guaranteed depreciation programs are referred to as risk vehicles and the carrying values of these risk vehicles are depreciated based upon the vehicles’ estimated residual values at their expected dates of disposition. The estimation of residual values for risk vehicles requires the Company to make assumptions regarding factors which include, but are not limited to, the anticipated age of the vehicles and market conditions for used vehicles at the time of disposal. The Company regularly evaluates estimated residual values and adjusts vehicle depreciation rates as appropriate. Any adjustments to depreciation are made prospectively. Given the volume of risk vehicles in the United States and the significant estimation uncertainty and judgments made by management to calculate the estimated residual values of these risk vehicles, auditing the estimated residual values of United States risk vehicles and related vehicle depreciation expense required extensive audit effort to develop an independent expectation of residual values and depreciation expense, and a high degree of auditor judgment was required when performing audit procedures and evaluating the results of those procedures. The significant estimation uncertainty was primarily due to management’s assumptions regarding the impact of future consumer demand and general economic conditions on expected pricing of used vehicles. Additionally, auditing the calculation of the estimated residual values for United States risk vehicles was challenging due to the volume of data inputs utilized in management’s calculation, including historical sales data and data specific to the Company’s current fleet. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures to assess the reasonableness of the estimated residual values and vehicle depreciation expense related to United States risk vehicles included the following, among others: • We evaluated the appropriateness and consistency of the Company’s methods, significant assumptions and judgments to calculate the estimated residual values of risk vehicles and the expected dates of disposition. • We tested the effectiveness of controls over vehicle depreciation expense related to risk vehicles and management’s review of the significant assumptions and judgments to calculate the estimated residual values of risk vehicles, including those over the Company’s monitoring of residual values and used vehicle market conditions. • We assessed the reasonableness of the estimated residual values of risk vehicles by performing the following procedures on a selection of risk vehicles: – We tested the underlying historical data that served as the basis for the Company’s calculation of the estimated residual values to evaluate 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. – We searched for contradictory evidence associated with the significant assumptions and judgments made by management based on our knowledge of the industry and review of third-party industry data. F-3 Table of Contents • 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. Self-Insurance Reserves - Public Liability and Property Damage Claims - United States - Refer to Note 2 to the financial statements Critical Audit Matter Description The Company is self-insured for public liability and property damage claims. These self-insurance reserves represent an estimate for both reported claims not yet paid and claims incurred but not yet reported. The estimated reserve requirements for such claims are calculated on an undiscounted basis using actuarial methods and various assumptions which include, but are not limited to, historical loss experience and projected loss development factors. The required liability is subject to adjustment in the future based upon changes in claims experience, including changes in the number of incidents for which the Company is ultimately liable and changes in the cost per incident. Given the volume of public liability and property damage claims in the United States and the subjectivity of estimating the related self-insurance reserves for reported claims not yet paid and claims incurred but not yet reported due to uncertain exposure and projected loss development, performing audit procedures to evaluate whether these self-insurance reserves were appropriately recorded as of December 31, 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 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. • With the assistance of our actuarial specialists, we developed an independent estimate of the self-insurance reserves, including assessment of loss data and claim development factors, and compared our estimate to management’s estimate. In addition, we performed the following: – Evaluated the reasonableness of the methodologies used in management’s estimate based on actuarial methods followed in the insurance industry associated with such liabilities. – Evaluated the reasonableness of the assumptions used in management’s estimate by comparing prior-year assumptions of expected development and ultimate loss to actuals incurred during the current year to identify potential bias in the determination of these liabilities. 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 F-4 Table of Contents 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 New York, New York February 17, 2021 We have served as the Company’s auditor since 1997. F-5 Table of Contents Avis Budget Group, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) Year Ended December 31, 2020 2019 2018 Revenues $ 5,402 $ 9,172 $ 9,124 Expenses Operating 3,322 4,698 4,639 Vehicle depreciation and lease charges, net 1,368 2,063 2,179 Selling, general and administrative 703 1,237 1,220 Vehicle interest, net 318 344 314 Non-vehicle related depreciation and amortization 286 263 256 Interest expense related to corporate debt, net: Interest expense 231 178 188 Early extinguishment of debt 9 12 19 Restructuring and other related charges 118 80 22 Transaction-related costs, net 3 10 20 Total expenses 6,358 8,885 8,857 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. F-6 Table of Contents Avis Budget Group, Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) 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 ) Reclassification of currency translation adjustments to earnings ( 2 ) — — Cash flow hedges: Net unrealized holding gains (losses), net of tax of $14, $7, and $0, respectively ( 39 ) ( 20 ) ( 2 ) Reclassification of cash flow hedges to earnings, net of tax of $(3), $1, and $1, respectively 8 ( 3 ) ( 2 ) Minimum pension liability adjustment: Pension and post-retirement benefits, net of tax of $12, $6, and $6, respectively ( 36 ) ( 20 ) ( 23 ) Reclassification of pension and post-retirement benefits to earnings, net of tax of $(3), $(2), and $(2), respectively 6 6 5 ( 30 ) ( 25 ) ( 103 ) Total comprehensive income (loss) $ ( 714 ) $ 277 $ 62 See Notes to Consolidated Financial Statements. F-7 Table of Contents Avis Budget Group, Inc. CONSOLIDATED BALANCE SHEETS (In millions, except par value) December 31, 2020 2019 Assets Current assets: Cash and cash equivalents $ 692 $ 686 Receivables (net of allowance for doubtful accounts of $60 and $52, respectively) 647 911 Other current assets 456 548 Total current assets 1,795 2,145 Property and equipment, net 657 792 Operating lease right-of-use assets 2,560 2,596 Deferred income taxes 1,198 1,662 Goodwill 1,137 1,101 Other intangibles, net 774 798 Other non-current assets 244 217 Total assets exclusive of assets under vehicle programs 8,365 9,311 Assets under vehicle programs: Program cash 72 211 Vehicles, net 8,153 12,177 Receivables from vehicle manufacturers and other 281 778 Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party 667 649 9,173 13,815 Total assets $ 17,538 $ 23,126 Liabilities and stockholders’ equity Current liabilities: Accounts payable and other current liabilities $ 2,034 $ 2,206 Short-term debt and current portion of long-term debt 19 19 Total current liabilities 2,053 2,225 Long-term debt 4,191 3,416 Long-term operating lease liabilities 2,078 2,140 Other non-current liabilities 731 757 Total liabilities exclusive of liabilities under vehicle programs 9,053 8,538 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 8,640 13,932 Commitments and contingencies (Note 15) Stockholders’ equity: Preferred stock, $.01 par value—authorized 10 shares; none issued and outstanding — — Common stock, $.01 par value—authorized 250 shares; issued 137 shares, respectively 1 1 Additional paid-in capital 6,668 6,741 Accumulated deficit ( 1,470 ) ( 785 ) Accumulated other comprehensive loss ( 187 ) ( 157 ) Treasury stock, at cost—67 and 63 shares, respectively ( 5,167 ) ( 5,144 ) Total stockholders’ equity ( 155 ) 656 Total liabilities and stockholders’ equity $ 17,538 $ 23,126 See Notes to Consolidated Financial Statements. F-8 Table of Contents Avis Budget Group, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31, 2020 2019 2018 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 Amortization of right-of-use assets 945 989 — (Gain) loss on sale of vehicles, net ( 157 ) ( 82 ) ( 48 ) Non-vehicle related depreciation and amortization 286 263 256 Deferred income taxes ( 317 ) ( 103 ) 14 Stock-based compensation 9 22 24 Amortization of debt financing fees 33 31 28 Early extinguishment of debt costs 9 12 19 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 Investing activities Property and equipment additions ( 94 ) ( 250 ) ( 231 ) Proceeds received on asset sales 6 11 17 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 ) Vehicle programs: Investment in vehicles ( 5,401 ) ( 12,887 ) ( 12,589 ) Proceeds received on disposition of vehicles 8,753 10,460 9,648 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 268 161 52 3,334 ( 2,517 ) ( 3,077 ) Net cash provided by (used in) investing activities 3,177 ( 2,752 ) ( 3,426 ) Financing activities Proceeds from long-term borrowings 991 402 485 Payments on long-term borrowings ( 308 ) ( 509 ) ( 515 ) Net change in short-term borrowings — ( 1 ) ( 4 ) Debt financing fees ( 26 ) ( 7 ) ( 15 ) Proceeds from issuance of common stock 15 — — Repurchases of common stock ( 119 ) ( 67 ) ( 216 ) Other, net — — 3 Net cash provided by (used in) financing activities exclusive of vehicle programs 553 ( 182 ) ( 262 ) F-9 Table of Contents Avis Budget Group, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (In millions) Year Ended December 31, 2020 2019 2018 Vehicle programs: Proceeds from borrowings 13,558 19,869 17,339 Payments on borrowings ( 18,138 ) ( 19,346 ) ( 16,385 ) Debt financing fees ( 18 ) ( 23 ) ( 25 ) ( 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 42 13 ( 16 ) 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 Cash and cash equivalents, program and restricted cash, end of period $ 765 $ 900 $ 735 Supplemental disclosure Interest payments $ 503 $ 509 $ 497 Income tax payments, net $ 44 $ 93 $ 53 See Notes to Consolidated Financial Statements. F-10 Table of Contents Avis Budget Group, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In millions) 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: Net income — — — 165 — — — Other comprehensive loss — — — — ( 103 ) — — Total comprehensive income 62 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 ) Balance at December 31, 2018 137.1 $ 1 $ 6,771 $ ( 1,091 ) $ ( 133 ) ( 61.5 ) $ ( 5,134 ) $ 414 Cumulative effect of accounting change — — — 4 1 — — 5 Comprehensive income: Net income — — — 302 — — — Other comprehensive loss — — — — ( 25 ) — — Total comprehensive income 277 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 loss ( 714 ) Non-controlling interest — — ( 2 ) — — — — ( 2 ) Net activity related to restricted stock units — — ( 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 ) See Notes to Consolidated Financial Statements. F-11 Table of Contents Avis Budget Group, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unless otherwise noted, all dollar amounts are in millions, except per share amounts) 1. Basis of Presentation Avis Budget Group, Inc. provides mobility solutions to businesses and consumers worldwide. The accompanying Consolidated Financial Statements include the accounts and transactions of Avis Budget Group, Inc. and its subsidiaries, as well as entities in which Avis Budget Group, Inc. directly or indirectly has a controlling financial interest (collectively, the “Company”). The Company operates the following reportable business segments: • Americas —consisting primarily of (i) vehicle rental operations in North America, South America, Central America and the Caribbean, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which the Company does not operate directly. • International —consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which the Company does not operate directly. The Company has completed the business acquisitions discussed in Note 6 to these Consolidated Financial Statements. The operating results of the acquired businesses are included in the accompanying Consolidated Financial Statements from the dates of acquisition. The Company presents separately the financial data of its vehicle programs. These programs are distinct from the Company’s other activities since the assets under vehicle programs are generally funded through the issuance of debt that is collateralized by such assets. The income generated by these assets is used, in part, to repay the principal and interest associated with the debt. Cash inflows and outflows relating to the acquisition of such assets and the principal debt repayment or financing of such assets are classified as activities of the Company’s vehicle programs. 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 F-12 Table of Contents 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. 2. Summary of Significant Accounting Policies Principles of Consolidation The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and all entities in which it has a direct or indirect controlling financial interest and variable interest entities for which the Company has determined it is the primary beneficiary. Intercompany transactions have been eliminated in consolidation. Use of Estimates and Assumptions The use of estimates and assumptions as determined by management is required in the preparation of the Consolidated Financial Statements in conformity with GAAP. These estimates are based on management’s evaluation of historical trends and other information available when the Consolidated Financial Statements are prepared and may affect the amounts reported and related disclosures. Actual results could differ from those estimates. Revenue Recognition The Company derives revenues primarily by providing vehicle rentals and other related products and mobility services to commercial and leisure customers, as well as through licensing of its rental brands. Other related products and mobility services include sales of collision and loss damage waivers under which a customer is relieved from financial responsibility arising from vehicle damage incurred during the rental; products and services for driving convenience such as fuel service options, roadside safety net, electronic toll collection, 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. The Company also receives payment from customers for certain operating expenses that it incurs, including airport concession fees that are paid by the Company in exchange for the right to operate at airports and other locations, as well as vehicle licensing fees. In addition, the Company collects membership fees in connection with its car sharing business. Beginning January 1, 2018, the Company recognized revenue when obligations under the terms of a contract with the customer were satisfied; generally this occurred evenly over the contract (over time); when control of the promised products or services was transferred to the customer. Revenue was measured as the amount of consideration the Company expected to be entitled to receive in exchange for transferring products or services. Certain customers may have received cash-based rebates, which were accounted for as variable consideration. The Company estimated these rebates based on the expected amount to be provided to customers and reduced revenue recognized. Vehicle rental and rental-related revenues were recognized evenly over the period of rental. 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). Licensing revenues principally consist of royalties paid by the Company’s licensees and are recorded as the licensees’ revenues are earned (over the rental period). The Company renews license agreements in the normal course of business and occasionally terminates, purchases or sells license agreements. In connection with ongoing fees that the Company receives from its licensees pursuant to license agreements, the Company is required to provide certain services, such as training, marketing and the operation of reservation systems. F-13 Table of Contents The Company excludes from the measurement of its transaction price any tax assessed by a governmental authority that is both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer. As a result, revenue is recorded net of such taxes collected. Revenues and expenses associated with gasoline, airport concessions and vehicle licensing are recorded on a gross basis within revenues and operating expenses. Membership fees related to the Company’s car sharing business are generally nonrefundable, are deferred and recognized ratably over the period of membership. 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, 2020 2019 Americas $ 3,965 $ 6,352 Europe, Middle East and Africa 1,127 2,222 Asia and Australasia 310 598 Total revenues $ 5,402 $ 9,172 The following table presents the Company’s revenues disaggregated by brand. Year Ended December 31, 2020 2019 Avis $ 2,961 $ 5,250 Budget 1,908 3,179 Other 533 743 Total revenues $ 5,402 $ 9,172 ________ Other includes Zipcar and other operating brands. Deferred Revenue The Company records deferred revenues when cash payments are received in advance of satisfying its performance obligations, including amounts that are refundable. In addition, certain customers earn loyalty points on rentals, for which the Company defers a portion of its rental revenues generally equivalent to the estimated retail value of points expected to be redeemed. The Company estimates points that will never be redeemed based upon actual redemption and expiration patterns. Currently loyalty points expire after 12 months of member inactivity. Future changes to expiration assumptions or expiration policy, or to program rules, may result in changes to deferred revenue as well as recognized revenues from the program. The following table presents changes in deferred revenue associated with the Company’s customer loyalty program. Year Ended December 31, 2020 2019 Balance, January 1 $ 59 $ 64 Revenue deferred 26 17 Revenue recognized ( 51 ) ( 22 ) Balance, December 31 $ 34 $ 59 _______ At December 31, 2020 and 2019, $ 17 million and $ 22 million was included in accounts payable and other current liabilities, respectively, and $ 17 million and $ 37 million, respectively, in other non-current liabilities. Non-current amounts are expected to be recognized as revenue within two to three years. F-14 Table of Contents Currency Translation Assets and liabilities of foreign operations are translated at the rate of exchange in effect on the balance sheet date; income and expenses are translated at the prevailing monthly average rate of exchange. The related translation adjustments are reflected in accumulated other comprehensive income (loss) in the stockholders’ equity section of the Consolidated Balance Sheets and in the Consolidated Statements of Comprehensive Income. 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 . Cash and Cash Equivalents, Program Cash and Restricted Cash The Company considers highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Program cash primarily represents amounts specifically designated to purchase assets under vehicle programs and/or to repay the related debt, as such the Company considers it a restricted cash equivalent. The following table provides a detail of cash and cash equivalents, program and restricted cash reported within the Consolidated Balance Sheets to the amounts shown in the Consolidated Statements of Cash Flows: As of December 31, 2020 2019 Cash and cash equivalents $ 692 $ 686 Program cash 72 211 Restricted cash (a) 1 3 Total cash and cash equivalents, program and restricted cash $ 765 $ 900 _________ (a) Included within other current assets . Property and Equipment Property and equipment (including leasehold improvements) are stated at cost, net of accumulated depreciation and amortization. Depreciation (non-vehicle related) is computed utilizing the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the shorter of the term of the lease or the estimated useful lives of the improvements. Useful lives are as follows: 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. The software developed or obtained for internal use is amortized on a straight-line basis commencing when such software is ready for its intended use. The net carrying value of software developed or obtained for internal use was $ 265 million and $ 261 million as of December 31, 2020 and 2019, respectively . F-15 Table of Contents Goodwill and Other Intangible Assets Goodwill represents the excess, if any, of the fair value of the consideration transferred by the acquirer and the fair value of any non-controlling interest remaining in the acquiree, if any, over the fair values of the identifiable net assets acquired. The Company does not amortize goodwill, but assesses it for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amounts of their respective reporting units exceed their fair values. The Company performs its annual impairment assessment in the fourth quarter of each year at the reporting unit level. The Company assesses goodwill for such impairment by comparing the carrying value of each reporting unit to its fair value using the present value of expected future cash flows. When appropriate, comparative market multiples and other factors are used to corroborate the discounted cash flow results. Other intangible assets, primarily trademarks, with indefinite lives are not amortized but are evaluated annually for impairment and whenever events or changes in circumstances indicate that the carrying amount of this asset may exceed its fair value. If the carrying value of an other intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Other intangible assets with finite lives are amortized over their estimated useful lives and are evaluated each reporting period to determine if circumstances warrant a revision to these lives. Impairment of Long-Lived Assets The Company is required to assess long-lived assets for impairment whenever circumstances indicate impairment may have occurred. This analysis is performed by comparing the respective carrying values of the assets to the undiscounted expected future cash flows to be generated from such assets. Property and equipment is evaluated separately at the lowest level of identifiable cash flows. If such analysis indicates that the carrying value of these assets is not recoverable, the carrying value of such assets is reduced to fair value. Vehicles Vehicles are stated at cost, net of accumulated depreciation. The initial cost of the vehicles is recorded net of incentives and allowances from manufacturers. The Company acquires a portion of its rental vehicles pursuant to repurchase and guaranteed depreciation programs established by automobile manufacturers. Under these programs, the manufacturers agree to repurchase vehicles at a specified price and date, or guarantee the depreciation rate for a specified period of time, subject to certain eligibility criteria (such as car condition and mileage requirements). The Company depreciates vehicles such that the net book value on the date of return to the manufacturers is intended to equal the contractual guaranteed residual values, thereby minimizing any gain or loss. Rental vehicles acquired outside of manufacturer repurchase and guaranteed depreciation programs are depreciated based upon their estimated residual values at their expected dates of disposition, after giving effect to anticipated conditions in the used car market. Any adjustments to depreciation are made prospectively. The estimation of residual values requires the Company to make assumptions regarding the age and mileage of the car at the time of disposal, as well as expected used vehicle auction market conditions. The Company regularly evaluates estimated residual values and adjusts depreciation rates as appropriate. Differences between actual residual values and those estimated result in a gain or loss on disposal and are recorded as part of vehicle depreciation at the time of sale. Vehicle-related interest expense amounts are net of vehicle-related interest income of $ 12 million , $ 15 million and $ 15 million for 2020, 2019 and 2018, respectively. Advertising Expenses Advertising costs are generally expensed in the period incurred and are recorded within selling, general and administrative expense in the Company’s Consolidated Statements of Operations. During 2020, 2019 and 2018, advertising costs were approximately $ 54 million , $ 121 million and $ 116 million, respectively. Taxes F-16 Table of Contents The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. For information regarding the accounting for the effects of the Tax Cuts and Jobs Act (the “Tax Act”), see Note 9-Income Taxes. As a result of the provisions of the Tax Act, the Company accounts for Global Intangible Low-Taxed Income (“GILTI”) as a component of current period income tax expense in the year incurred. The Company records net deferred tax assets to the extent it believes that it is more likely than not that these assets will be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent results of operations. In the event the Company were to determine that it would be able to realize the deferred income tax assets in the future in excess of their net recorded amount, the Company would adjust the valuation allowance, which would reduce the provision for income taxes. Fair Value Measurements The Company measures the fair value of assets and liabilities and discloses the source for such fair value measurements. Financial assets and liabilities are classified as follows: Level 1, which refers to assets and liabilities valued using quoted prices from active markets for identical assets or liabilities; Level 2, which refers to assets and liabilities for which significant other observable market inputs are readily available; and Level 3, which are valued based on significant unobservable inputs. The fair value of the Company’s financial instruments is generally determined by reference to market values resulting from trading on a national securities exchange or in an over-the-counter market (Level 1 inputs). In some cases where quoted market prices are not available, prices are derived by considering the yield of the benchmark security that was issued to initially price the instruments and adjusting this rate by the credit spread that market participants would demand for the instruments as of the measurement date (Level 2 inputs). In situations where long-term borrowings are part of a conduit facility backed by short-term floating rate debt, the Company has determined that its carrying value approximates the fair value of this debt (Level 2 inputs). The carrying amounts of cash and cash equivalents, available-for-sale securities, accounts receivable, program cash and accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The Company’s derivative assets and liabilities consist principally of currency exchange contracts, interest rate swaps, interest rate caps and commodity contracts, and are carried at fair value based on significant observable inputs (Level 2 inputs). Derivatives entered into by the Company are typically executed over-the-counter and are valued using internal valuation techniques, as no quoted market prices exist for such instruments. The valuation technique and inputs depend on the type of derivative and the nature of the underlying exposure. The Company principally uses discounted cash flows to value these instruments. These models take into account a variety of factors including, where applicable, maturity, currency exchange rates, interest rate yield curves of the Company and counterparties, credit curves, counterparty creditworthiness and commodity prices. These factors are applied on a consistent basis and are based upon observable inputs where available. Derivative Instruments Derivative instruments are used as part of the Company’s overall strategy to manage exposure to market risks associated with fluctuations in currency exchange rates, interest rates and gasoline costs. As a matter of policy, derivatives are not used for trading or speculative purposes. All derivatives are recorded at fair value either as assets or liabilities. Changes in fair value of derivatives not designated as hedging instruments are recognized currently in earnings within the same line item as the hedged item. The changes in fair value of a derivative that is designated as either a cash flow or net investment hedge is recorded as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects F-17 Table of Contents earnings and is presented in the same income statement line item as the earnings effect of the hedged item. Amounts related to our derivative instruments are recognized in the Consolidated Statements of Cash Flows consistent with the nature of the hedged item (principally operating activities). Currency Transactions Currency gains and losses resulting from foreign currency transactions are generally included in operating expenses within the Consolidated Statements of Operations; however, the net gain or loss of currency transactions on intercompany loans and the unrealized gain or loss on intercompany loan hedges are included within interest expense related to corporate debt, net. Self-Insurance Reserves The Consolidated Balance Sheets include $ 396 million and $ 441 million of liabilities associated with retained risks of liability to third parties as of December 31, 2020 and 2019, respectively. Such liabilities relate primarily to public liability and third-party property damage claims, as well as claims arising from the sale of ancillary insurance products including, but not limited to, supplemental liability, personal effects protection and personal accident insurance. These obligations represent an estimate for both reported claims not yet paid and claims incurred but not yet reported. The estimated reserve requirements for such claims are recorded on an undiscounted basis utilizing actuarial methodologies and various assumptions which include, but are not limited to, 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. These amounts are included within accounts payable and other current liabilities and other non-current liabilities. The Consolidated Balance Sheets also include liabilities of approximately $ 53 million and $ 56 million as of December 31, 2020 and 2019, respectively, related to workers’ compensation, health and welfare and other employee benefit programs. The liabilities represent an estimate for both reported claims not yet paid and claims incurred but not yet reported, utilizing actuarial methodologies similar to those described above. These amounts are included within accounts payable and other current liabilities and other non-current liabilities. Stock-Based Compensation Stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense on a straight-line basis over the vesting period. The Company’s policy is to record compensation expense for stock options, and restricted stock units that are time- and performance-based, for the portion of the award that vests. Compensation expense related to market-based restricted stock units is recognized provided that the requisite service is rendered, regardless of when, if ever, the market condition is satisfied. We estimate the fair value of restricted stock units using the market price of the Company’s common stock on the date of grant. We estimate the fair value of stock-based and cash unit awards containing a market condition using a Monte Carlo simulation model. Key inputs and assumptions used in the Monte Carlo simulation model include the stock price of the award on the grant date, the expected term, the risk-free interest rate over the expected term, the expected annual dividend yield and the expected stock price volatility. The expected volatility is based on a combination of the historical and implied volatility of the Company’s publicly traded, near-the-money stock options, and the valuation period is based on the vesting period of the awards. The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant and, since the Company does not currently pay or plan to pay a dividend on its common stock, the expected dividend yield was zero. Business Combinations The Company uses the acquisition method of accounting for business combinations, which requires that the assets acquired and liabilities assumed be recorded at their respective fair values at the date of acquisition. Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized if fair value can be reasonably estimated at the acquisition date. The excess, if any, of (i) the fair value of the consideration transferred by the acquirer and the fair value of any non-controlling interest remaining in the acquiree, over (ii) the fair values of the identifiable net assets acquired is recorded as goodwill. Gains and losses on the re-acquisition of license agreements are recorded in the Consolidated F-18 Table of Contents 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. The Company records contingent consideration resulting from a business combination at its fair value on the acquisition date. The fair value of the contingent consideration is generally estimated by utilizing a Monte Carlo simulation technique, based on a range of possible future results (Level 3). Any changes in contingent consideration are recorded in transaction-related costs, net. Transaction-related Costs, net Transaction-related costs, net are classified separately in the Consolidated Statements of Operations. These costs are comprised of expenses related to acquisition-related activities such as due-diligence and other advisory costs, expenses related to the integration of the acquiree’s operations with those of the Company, including the implementation of best practices and process improvements, non-cash gains and losses related to re-acquired rights, expenses related to pre-acquisition contingencies and contingent consideration related to acquisitions. Investments Joint venture investments are typically accounted for under the equity method of accounting. Under this method, the Company records its proportional share of the joint venture’s net income or loss within operating expenses in the Consolidated Statements of Operations. The Company assesses equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. Any difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge if the loss in value is deemed other than temporary. As of December 31, 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. Aggregate realized gains and losses on equity investments and dividend income are recorded within operating expenses on the Consolidated Statements of Operations. 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. Divestitures 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. The Company initially measures assets and liabilities held for sale at the lower of their carrying value or fair value less costs to sell and assesses their fair value each reporting period until disposed. When the divestiture represents a strategic shift that has, or will have, a major effect on the Company’s operations and financial results, the disposal is presented as a discontinued operation. During 2018, the Company entered into a definitive stock purchase agreement to sell the Company’s 50% equity method investment in Anji Car Rental & Leasing Company Limited (“China”), located in China, to Shanghai Automotive Industry Sales Company, Ltd., a 50% owner of China. Upon receiving clearance from applicable regulatory authorities in China during 2019, the Company completed the sale for $ 64 million, net of cross-border withholding taxes and recorded a $ 44 million gain within operating expenses. China’s operations are reported within the Company’s International segment. During 2018, as a result of the sale of a non-core business, the Company recognized a gain of $ 4 million within operating expenses on the Consolidated Statements of Operations. Nonmarketable Equity Securities The Company classifies investments without readily determinable fair values that are not accounted for under the equity method as nonmarketable equity securities. The accounting guidance requires nonmarketable equity securities to be recorded at cost and adjusted to fair value at each reporting period. 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 F-19 Table of Contents investments of the same issuer. Any changes in value are recorded within operating expenses. 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. There were no material adjustments made to the carrying amounts of nonmarketable equity securities during the years ended December 31, 2020 and 2019. Adoption of New Accounting Pronouncements Intangibles—Goodwill and Other—Internal-Use Software 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 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 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 did not have a material impact on the Company's Consolidated Financial Statements. Measurement of Credit Losses on Financial Instruments On January 1, 2020, as the result of a new accounting pronouncement, the Company adopted ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” and related updates which sets forth a current expected credit loss impairment model for financial assets that replaces the current incurred loss model. This model requires a financial asset (or group of financial assets), including trade receivables, measured at amortized cost to be presented at the net amount expected to be collected with an allowance for credit losses deducted from the amortized cost basis. 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 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 F-20 Table of Contents from the registration requirements of the federal securities laws, and therefore, such disclosure is not required. Topic 842: 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 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 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. The adoption of this accounting pronouncement did not have a material impact on the Company's Consolidated Financial Statements. 3. Leases 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. Lessor The following table presents the Company’s lease revenues disaggregated by geography. Year Ended December 31, 2020 Year Ended December 31, 2019 Americas $ 3,864 $ 6,303 Europe, Middle East and Africa 1,080 2,141 Asia and Australasia 299 584 Total lease revenues $ 5,243 $ 9,028 The following table presents the Company’s lease revenues disaggregated by brand. F-21 Table of Contents Year Ended 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 ________ Other includes Zipcar and other operating brands. Lessee The Company has operating and finance leases for rental locations, corporate offices, vehicle rental fleet and equipment. Many of the Company’s operating leases for rental locations contain concession agreements with various airport authorities that allow the Company to conduct its vehicle rental operations on site. In general, concession fees for airport locations are based on a percentage of total commissionable revenue as defined by each airport authority, some of which are subject to minimum annual guaranteed amounts. Concession fees other than minimum annual guaranteed amounts are not included in the measurement of operating lease ROU assets and operating lease liabilities, and are recorded as variable lease expense as incurred. The Company’s operating leases for rental locations often also require the Company to pay or reimburse operating expenses. The Company leases a portion of its vehicles under operating leases. 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, 2020 Year Ended December 31, 2019 Property leases (a) Operating lease expense $ 575 $ 722 Variable lease expense 152 274 Sublease income ( 6 ) ( 8 ) Total property lease expense $ 721 $ 988 Vehicle leases Finance lease expense: Amortization of ROU assets (b) $ 33 $ 42 Interest on lease liabilities (c) 3 4 Operating lease expense (b) 195 255 Total vehicle lease expense $ 231 $ 301 __________ (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. (c) Included in vehicle interest, net. F-22 Table of Contents Supplemental balance sheet information related to leases is as follows: As of December 31, 2020 As of December 31, 2019 Property leases Operating lease ROU assets $ 2,560 $ 2,596 Short-term operating lease liabilities (a) $ 514 $ 479 Long-term operating lease liabilities 2,078 2,140 Operating lease liabilities $ 2,592 $ 2,619 Weighted average remaining lease term 8.4 years 8.9 years Weighted average discount rate 3.86 % 4.31 % Vehicle leases Finance Finance lease ROU assets, gross $ 304 $ 337 Accumulated amortization ( 42 ) ( 56 ) Finance lease ROU assets, net (b) $ 262 $ 281 Short-term vehicle finance lease liabilities $ 86 $ 95 Long-term vehicle finance lease liabilities 140 157 Vehicle finance lease liabilities (c) $ 226 $ 252 Weighted average remaining lease term 1.8 years 2.0 years Weighted average discount rate 1.99 % 1.67 % Operating Vehicle operating lease ROU assets (d) $ 113 $ 195 Short-term vehicle operating lease liabilities $ 82 $ 124 Long-term vehicle operating lease liabilities 31 71 Vehicle operating lease liabilities (e) $ 113 $ 195 Weighted average remaining lease term 1.5 years 1.8 years Weighted average discount rate 2.90 % 3.08 % _________ (a) Included in Accounts payable and other current liabilities. (b) Included in Vehicles, net within Assets under vehicle programs. (c) Included in Debt within Liabilities under vehicle programs. (d) Included in Receivables from vehicle manufacturers and other within Assets under vehicle programs. (e) Included in Other within Liabilities under vehicle programs. Supplemental cash flow information related to leases is as follows: F-23 Table of Contents Year Ended December 31, 2020 Year Ended December 31, 2019 Cash payments for lease liabilities within operating activities: Property operating leases $ 740 $ 733 Vehicle operating leases 196 248 Vehicle finance leases 3 4 Cash payments for lease liabilities within financing activities: Vehicle finance leases 294 266 Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities: Property operating leases (a) 666 531 Vehicle operating leases (a) 111 262 Vehicle finance leases 257 304 _________ (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 Within 1 year $ 602 $ 86 $ 84 Between 1 and 2 years 475 49 23 Between 2 and 3 years 416 91 8 Between 3 and 4 years 296 — 1 Between 4 and 5 years 223 — — Thereafter 1,081 — — Total lease payments 3,093 226 116 Less: Imputed interest ( 501 ) — ( 3 ) Total $ 2,592 $ 226 $ 113 4. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (“EPS”) (shares in millions): Year Ended December 31, 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 Options and non-vested stock — 0.5 0.8 Diluted weighted average shares outstanding 70.5 75.7 80.1 Earnings per share: Basic $ ( 9.71 ) $ 4.01 $ 2.08 Diluted $ ( 9.71 ) $ 3.98 $ 2.06 F-24 Table of Contents 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) 1.2 0.5 0.2 __________ (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. 5. 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 $ 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”). 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”). The costs associated with this initiative primarily represent severance, outplacement services and other costs associated with employee terminations, the majority of which have been or are expected to be settled in cash. This initiative is complete. During fourth quarter 2017, the Company initiated a strategic restructuring initiative to better position its truck rental operations in the U.S., in which it closed certain rental locations and reduced the size of the older rental fleet, with the intent to increase fleet utilization and reduce vehicle and overhead costs (“Truck initiative”). This initiative is complete. During first quarter 2017, the Company initiated a strategic restructuring initiative to drive operational efficiency throughout the organization by reducing headcount, improving processes and consolidating functions, closing certain rental locations and decreasing the size of its fleet (“T17”). The costs associated with this initiative primarily represent severance, outplacement services and other costs associated with employee terminations, the majority of which have been or are expected to be settled in cash. This initiative is complete. In 2014, the Company committed to various strategic initiatives to identify best practices and drive efficiency throughout its organization, by reducing headcount, improving processes and consolidating functions (“T15”). In first quarter 2016, the Company expanded the T15 restructuring to take advantage of additional efficiency opportunities. The expanded T15 restructuring fits within the initiative’s focus areas to identify best practices and drive efficiency throughout the organization, including the consolidation of rental locations. The costs associated with this initiative primarily represent severance, outplacement services and other costs associated with employee terminations, the majority of which have been settled in cash. This initiative is complete. F-25 Table of Contents 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 Other (a) Total Balance at January 1, 2018 $ 4 $ — $ — $ 4 Restructuring expense: Workforce planning 11 — 2 13 Truck initiative 1 — 4 5 T17 — — 2 2 T15 1 — — 1 Restructuring payment/utilization: Workforce planning ( 11 ) — ( 1 ) ( 12 ) 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 Restructuring expense: 2020 Optimization 73 3 3 79 Brazil 1 1 ( 2 ) — T19 — — 14 14 Restructuring payment/utilization: 2020 Optimization ( 68 ) ( 2 ) ( 1 ) ( 71 ) Brazil — ( 1 ) 2 1 T19 ( 5 ) — ( 15 ) ( 20 ) Balance as of December 31, 2020 $ 4 $ 2 $ 3 $ 9 __________ (a) Includes expenses primarily related to the disposition of vehicles. F-26 Table of Contents Americas International Total Balance at January 1, 2018 $ 1 $ 3 $ 4 Restructuring expense: Workforce planning 4 9 13 Truck initiative 5 — 5 T17 2 — 2 T15 — 1 1 Restructuring payment/utilization: Workforce planning ( 4 ) ( 8 ) ( 12 ) Truck initiative ( 5 ) — ( 5 ) T17 ( 3 ) ( 2 ) ( 5 ) T15 — ( 1 ) ( 1 ) Balance as of December 31, 2018 — 2 2 Restructuring expense: T19 39 16 55 Brazil 7 — 7 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 T19 14 — 14 Restructuring payment/utilization: 2020 Optimization Plan ( 29 ) ( 42 ) ( 71 ) Brazil 1 — 1 T19 ( 16 ) ( 4 ) ( 20 ) Balance as of December 31, 2020 $ 3 $ 6 $ 9 F-27 Table of Contents 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. De Shon as the Company’s President and Chief Executive Officer. Mr. De Shon continued to serve in his role until a successor had been named and was employed by the Company through December 31, 2019. In connection with Mr. 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. Servodidio as the Company’s President, International effective June 14, 2019. In connection with Mr. Servodidio’s departure, the Company recorded other related charges of approximately $ 4 million, inclusive of accelerated stock-based compensation expense. 6. Acquisitions 2020 Avis and Budget Licensees 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. 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. 2019 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 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. F-28 Table of Contents 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. Differences between the preliminary allocation of purchase price and the final allocation were not material for Avis and Budget Licensees. 7. Intangible Assets Intangible assets consisted of: 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 Other (c) 54 33 21 50 25 25 $ 602 $ 380 $ 222 $ 546 $ 298 $ 248 Unamortized Intangible Assets 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. (c) Primarily amortized over a period ranging from 0 to 10 years with a weighted average life of 9 years. Amortization expense relating to all intangible assets was as follows: Year Ended December 31, 2020 2019 2018 License agreements $ 37 $ 28 $ 36 Customer relationships 23 25 24 Other 5 6 5 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. F-29 Table of Contents The carrying amounts of goodwill and related changes are as follows: Americas International Total Company Gross goodwill as of January 1, 2019 $ 2,126 $ 1,084 $ 3,210 Accumulated impairment losses as of January 1, 2019 ( 1,587 ) ( 531 ) ( 2,118 ) Goodwill as of January 1, 2019 539 553 1,092 Acquisitions 21 — 21 Currency translation adjustments and other ( 6 ) ( 6 ) ( 12 ) Goodwill as of December 31, 2019 554 547 1,101 Currency translation adjustments and other ( 1 ) 37 36 Goodwill as of December 31, 2020 $ 553 $ 584 $ 1,137 8. Vehicle Rental Activities The components of vehicles, net within assets under vehicle programs are as follows: As of December 31, 2020 2019 Rental vehicles $ 9,210 $ 13,461 Less: Accumulated depreciation ( 1,337 ) ( 1,621 ) 7,873 11,840 Vehicles held for sale 280 337 Vehicles, net $ 8,153 $ 12,177 The components of vehicle depreciation and lease charges, net are summarized below: Year Ended December 31, 2020 2019 2018 Depreciation expense $ 1,330 $ 1,890 $ 1,974 Lease charges 195 255 253 (Gain) loss on sale of vehicles, net ( 157 ) ( 82 ) ( 48 ) Vehicle depreciation and lease charges, net $ 1,368 $ 2,063 $ 2,179 At December 31, 2020, 2019 and 2018, the Company had payables related to vehicle purchases included in liabilities under vehicle programs - other of $ 232 million, $ 418 million and $ 472 million, respectively, and receivables related to vehicle sales included in assets under vehicle programs - receivables from vehicle manufacturers and other of $ 162 million, $ 576 million and $ 622 million, respectively. 9. Income Taxes On December 22, 2017 the Tax Act made substantial changes to corporate income tax laws. Among the key provisions were a U.S. corporate tax rate reduction from 35% to 21% effective for tax years beginning January 1, 2018 and a one-time transition tax on the deemed repatriation of cumulative earnings from foreign subsidiaries and changes to U.S. taxation of foreign earnings from a worldwide to a territorial tax system effective for tax years beginning January 1, 2018. The Company recognized the effects of the Tax Act in its Consolidated Financial Statements in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of FASB Accounting Standards Codification Topic 740, Income Taxes, in the reporting period that the Tax Act was signed into law. In 2017 the Company recorded a provisional income tax benefit of $ 317 million related to the remeasurement of its net deferred income tax liabilities as a result of the reduced corporate tax rate, and a provisional tax expense of $ 104 million for the one-time transition tax on the deemed repatriation of cumulative foreign subsidiary earnings. F-30 Table of Contents The Company completed the accounting for the effects of the Tax Act during 2018 and recorded an additional income tax expense of $ 30 million for the one-time transition tax on the deemed repatriation of foreign earnings. The provision for (benefit from) income taxes consists of the following: Year Ended December 31, 2020 2019 2018 Current Federal $ ( 5 ) $ ( 3 ) $ ( 7 ) State 21 41 36 Foreign 29 50 59 Current income tax provision 45 88 88 Deferred Federal ( 104 ) 41 63 State ( 90 ) ( 37 ) ( 39 ) Foreign ( 123 ) ( 107 ) ( 10 ) Deferred income tax provision ( 317 ) ( 103 ) 14 Provision for (benefit from) income taxes $ ( 272 ) $ ( 15 ) $ 102 Pretax income for domestic and foreign operations consists of the following: Year Ended December 31, 2020 2019 2018 United States $ ( 590 ) $ 125 $ 114 Foreign ( 366 ) 162 153 Pretax income (loss) $ ( 956 ) $ 287 $ 267 Deferred income tax assets and liabilities are comprised of the following: As of December 31, 2020 2019 Deferred income tax assets: Net tax loss carryforwards $ 1,146 $ 1,645 Long-term operating lease liabilities 657 678 Accrued liabilities and deferred revenue 237 236 Tax credits 17 20 Depreciation and amortization 3 17 Provision for doubtful accounts 8 8 Other 110 75 Valuation allowance (a) ( 204 ) ( 214 ) Deferred income tax assets 1,974 2,465 Deferred income tax liabilities: Operating lease right-of-use assets 649 672 Depreciation and amortization 105 108 Prepaid expenses 8 17 Other 14 6 Deferred income tax liabilities 776 803 Deferred income tax assets, net $ 1,198 $ 1,662 __________ F-31 Table of Contents (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. 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. 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. Deferred income tax assets and liabilities related to vehicle programs are comprised of the following: As of December 31, 2020 2019 Deferred income tax assets: Depreciation and amortization $ 62 $ 54 Other 27 48 Deferred income tax assets 89 102 Deferred income tax liabilities: Depreciation and amortization 1,445 2,243 Other 27 48 Deferred income tax liabilities 1,472 2,291 Deferred income tax liabilities under vehicle programs, net $ 1,383 $ 2,189 At December 31, 2020, the Company had U.S. federal net operating loss carryforwards of approximately $ 3.5 billion. The majority of the net operating loss carryforwards have an indefinite utilization period pursuant to the Tax Act and a significant remaining portion expires by 2031. Such net operating loss carryforwards are primarily related to accelerated depreciation of the Company’s U.S. vehicles. Currently, the Company does not record valuation allowances on the majority of its U.S. federal tax loss carryforwards as there are adequate deferred tax liabilities that could be realized within the carryforward period. 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. The reconciliation between the U.S. federal income tax statutory rate and the Company’s effective income tax rate is as follows: Year Ended December 31, 2020 2019 2018 U.S. federal statutory rate 21.0 % 21.0 % 21.0 % Adjustments to reconcile to the effective rate: State and local income taxes, net of federal tax benefits 4.8 ( 1.7 ) 5.5 Changes in valuation allowances — ( 26.9 ) 6.3 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 ) Tax Act (benefit) expense — — 11.2 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: F-32 Table of Contents 2020 2019 2018 Balance, January 1 $ 54 $ 61 $ 63 Additions for tax positions related to current year 4 6 8 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 The Company does not anticipate that total unrecognized tax benefits will change significantly in 2021. The Company is subject to taxation in the United States and various foreign jurisdictions. As of December 31, 2020, the 2017 through 2019 tax years generally remain subject to examination by the federal tax authorities. The 2014 through 2019 tax years generally remain subject to examination by various state tax authorities. In significant foreign jurisdictions, the 2013 through 2019 tax years generally remain subject to examination by their respective tax authorities. Substantially all of the gross amount of the unrecognized tax benefits at December 31, 2020, 2019 and 2018, if recognized, would affect the Company’s provision for, or benefit from, income taxes. 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: As of December 31, 2020 2019 Unrecognized tax benefit in non-current income taxes payable (a) $ 24 $ 57 Accrued interest payable on potential tax liabilities (b) 29 27 __________ (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. (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. 10 . Other Current Assets Other current assets consisted of: As of December 31, 2020 2019 Prepaid expenses $ 161 $ 234 Sales and use taxes 147 173 Other 148 141 Other current assets $ 456 $ 548 F-33 Table of Contents 11. Property and Equipment, net Property and equipment, net consisted of: As of December 31, 2020 2019 Land $ 49 $ 48 Buildings and leasehold improvements 592 565 Capitalized software 918 789 Furniture, fixtures and equipment 417 400 Projects in process 60 180 Buses and support vehicles 86 88 2,122 2,070 Less: Accumulated depreciation and amortization ( 1,465 ) ( 1,278 ) Property and equipment, net $ 657 $ 792 Depreciation and amortization expense relating to property and equipment during 2020, 2019 and 2018 was $ 218 million, $ 204 million and $ 191 million, respectively (including $ 113 million, $ 109 million and $ 92 million, respectively, of amortization expense relating to capitalized software). 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, 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. 12. Accounts Payable and Other Current Liabilities Accounts payable and other current liabilities consisted of: As of December 31, 2020 2019 Short-term operating lease liabilities 514 $ 479 Accounts payable 394 378 Accrued sales and use taxes 215 223 Public liability and property damage insurance liabilities – current 162 178 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 F-34 Table of Contents 13. Long-term Corporate Debt and Borrowing Arrangements Long-term debt and other borrowing arrangements consisted of: Maturity Date As of December 31, 2020 2019 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) August 2027 1,199 1,112 Other (b) 24 28 Deferred financing fees ( 48 ) ( 39 ) Total 4,210 3,435 Less: Short-term debt and current portion of long-term debt 19 19 Long-term debt $ 4,191 $ 3,416 __________ (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. Term Loan 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 %; however, the Company entered into an interest rate swap to hedge $ 700 million of its interest rate exposure related to the floating rate term loan at an aggregate rate of 4.58 %. Senior Notes 5½% Senior Notes due 2023. In April 2013, the Company completed an offering of $ 500 million of 5½% Senior Notes due April 2023. The notes were issued at par, with interest payable semi-annually. 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 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 . In March 2016, the Company issued $ 350 million of 6⅜% Senior Notes due 2024 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 April 1, 2019 at specified redemption prices plus accrued interest. In May 2016, the Company used the net proceeds from the offering to redeem $ 300 million principal amount of its previous 4⅞% Senior Notes and for general corporate purposes. F-35 Table of Contents 4⅛% euro-denominated Senior Notes due 2024. In September 2016, the Company issued € 300 million of 4⅛% euro-denominated Senior Notes due 2024 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 November 15, 2019 at specified redemption prices plus accrued interest. In October 2016, the Company used the net proceeds from the offering primarily to redeem € 275 million of its outstanding 6% euro-denominated Senior Notes due 2021. 5¼% Senior Notes due 2025. 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. In April 2015, the Company used net proceeds from the offering to redeem the remaining $ 223 million principal amount of its 9¾% Senior Notes and to partially fund the acquisition of Maggiore. 4½% euro-denominated Senior Notes due 2025. In March 2017, the Company issued € 250 million of 4½% euro-denominated 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 on or after May 15, 2020 at specified redemption prices plus accrued interest. In April 2017, the Company used the net proceeds from the offering to redeem its outstanding € 175 million principal amount of 6% euro-denominated Senior Notes due 2021 for € 180 million plus accrued interest. In June 2017, the Company used the remaining proceeds to redeem a portion of its Floating Rate Senior Notes due 2017. 4¾% euro-denominated Senior Notes due 2026. In October 2018, the Company issued € 350 million of 4¾% euro-denominated Senior Notes due 2026, at par, with interest payable semi-annually. The Company has the right to redeem these notes in whole or in part on or after September 30, 2021 at specified redemption prices plus accrued interest. In October 2018, the Company used the net proceeds from the offering to redeem its 5⅛% Senior Notes due June 2022 for $ 410 million plus accrued interest. 5¾% Senior Notes due 2027. 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. The 4⅛% euro-denominated Senior Notes, 4½% euro-denominated Senior Notes and 4¾% euro-denominated Senior Notes are unsecured obligations of the Company’s Avis Budget Finance plc subsidiary, are guaranteed on a senior basis by the Company and certain of its domestic subsidiaries and rank equally with all of the Company’s existing senior unsecured debt. In connection with the debt amendments and repayments for the years ended December 31, 2020, 2019 and 2018, the Company recorded $ 9 million, $ 12 million and $ 19 million in early extinguishment of debt costs, respectively. F-36 Table of Contents Debt Maturities The following table provides contractual maturities of the Company’s corporate debt at December 31, 2020: Year Amount 2021 $ 19 2022 18 2023 18 2024 732 2025 1,182 Thereafter 2,289 $ 4,258 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 Senior revolving credit facility maturing 2023 (a) $ 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 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. F-37 Table of Contents 14. Debt under Vehicle Programs and Borrowing Arrangements Debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding (AESOP) LLC (“Avis Budget Rental Car Funding”), consisted of: As of December 31, 2020 2019 Americas – Debt due to Avis Budget Rental Car Funding (a) $ 5,116 $ 7,975 Americas – Debt borrowings (a) 509 827 International – Debt borrowings (a) 1,115 2,100 International – Finance leases 162 215 Deferred financing fees (b) ( 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. Americas Debt due to Avis Budget Rental Car Funding . Avis Budget Rental Car Funding, an unconsolidated bankruptcy remote qualifying special purpose limited liability company, issues privately placed notes to investors as well as to banks and bank-sponsored conduit entities. Avis Budget Rental Car Funding uses the proceeds from its note issuances to make loans to a wholly-owned subsidiary of the Company, AESOP Leasing LP (“AESOP Leasing”), on a continuing basis. AESOP Leasing is required to use the proceeds of such loans to acquire or finance the acquisition of vehicles used in the Company’s rental car operations. By issuing debt through the Avis Budget Rental Car Funding program, the Company pays a lower rate of interest than if it had issued debt directly to third parties. Avis Budget Rental Car Funding is not consolidated, as the Company is not the “primary beneficiary” of Avis Budget Rental Car Funding. The Company determined that it is not the primary beneficiary because the Company does not have the obligation to absorb the potential losses or receive the benefits of Avis Budget Rental Car Funding’s activities since the Company’s only significant source of variability in the earnings, losses or cash flows of Avis Budget Rental Car Funding is exposure to its own creditworthiness, due to its loan from Avis Budget Rental Car Funding. Because Avis Budget Rental Car Funding is not consolidated, AESOP Leasing’s loan obligations to Avis Budget Rental Car Funding are reflected as related party debt on the Company’s Consolidated Balance Sheets. The Company also has an asset within Assets under vehicle programs on its Consolidated Balance Sheets which represents securities issued to the Company by Avis Budget Rental Car Funding. AESOP Leasing is consolidated, as the Company is the “primary beneficiary” of AESOP Leasing; as a result, the vehicles purchased by AESOP Leasing remain on the Company’s Consolidated Balance Sheets. The Company determined it is the primary beneficiary of AESOP Leasing, as it has the ability to direct its activities, an obligation to absorb a majority of its expected losses and the right to receive the benefits of AESOP Leasing’s activities. AESOP Leasing’s vehicles and related assets, which as of December 31, 2020, approximate $ 6.4 billion and some of which are subject to manufacturer repurchase and guaranteed depreciation agreements, collateralize the debt issued by Avis Budget Rental Car Funding. The assets and liabilities of AESOP Leasing are presented on the Company’s Consolidated Balance Sheets within Assets under vehicle programs and Liabilities under vehicle programs, respectively. The assets of AESOP Leasing, included within assets under vehicle programs (excluding the investment in Avis Budget Rental Car Funding (AESOP) LLC—related party) are restricted. Such assets may be used only to repay the respective AESOP Leasing liabilities, included within Liabilities under vehicle programs, and to purchase new vehicles, although if certain collateral coverage requirements are met, AESOP Leasing may pay dividends from excess cash. The creditors of AESOP Leasing and Avis Budget Rental Car Funding have no recourse to the general credit of the Company. 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 F-38 Table of Contents 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 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. Borrowings under the Avis Budget Rental Car Funding program primarily represent fixed rate notes and had a weighted average interest rate of 3.17 % and 3.16 % as of December 31, 2020 and 2019 respectively. Debt borrowings . The Company finances the acquisition of vehicles used in its Canadian rental operations through a consolidated, bankruptcy remote special-purpose entity, which issues privately placed notes to investors and bank-sponsored conduits. 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 2.98 % 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 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. The International borrowings primarily represent floating rate notes and had a weighted average interest rate of 2.17 % and 1.87 % as of December 31, 2020 and 2019 respectively. Finance leases. The Company obtained a portion of its International vehicles under finance lease arrangements. For the years ended December 31, 2020 and 2019, the weighted average interest rate on these borrowings was 1.16 % and 1.25 % respectively. All finance leases are on a fixed repayment basis and interest rates are fixed at the contract date. Debt Maturities The following table provides the contractual maturities of the Company’s debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding, at December 31, 2020: Debt under Vehicle Programs (a) 2021 (b) $ 1,626 2022 (c) 2,444 2023 (d) 1,224 2024 885 2025 621 Thereafter 102 $ 6,902 __________ (a) Vehicle-backed debt primarily represents asset-backed securities. (b) Includes $0.3 billion of bank and bank-sponsored facilities. (c) Includes $1.1 billion of bank and bank-sponsored facilities. (d) Includes $0.1 billion of bank and bank-sponsored facilities. F-39 Table of Contents Committed Credit Facilities And Available Funding Arrangements The following table presents available funding under the Company’s debt arrangements related to its vehicle programs, including related party debt due to Avis Budget Rental Car Funding, at December 31, 2020: Total Capacity (a) Outstanding Borrowings (b) Available Capacity Americas – Debt due to Avis Budget Rental Car Funding $ 7,921 $ 5,116 $ 2,805 Americas – Debt borrowings 759 509 250 International – Debt borrowings 2,884 1,115 1,769 International – Finance leases 221 162 59 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; $1.4 billion for International - Debt borrowings; and $0.2 billion for International - Finance leases. 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. F-40 Table of Contents 15. Commitments and Contingencies Contingencies In 2006, the Company completed the spin-offs of its Realogy and Wyndham subsidiaries. The Company does not believe that the impact of any resolution of pre-existing contingent liabilities in connection with the spin-offs should result in a material liability to the Company in relation to its consolidated financial position or liquidity, as Realogy and Wyndham each have agreed to assume responsibility for these liabilities. The Company is also named in litigation that is primarily related to the businesses of its former subsidiaries, including Realogy and Wyndham. The Company is entitled to indemnification from such entities for any liability resulting from such litigation. 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 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, 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. The Company estimates that the potential exposure resulting from adverse outcomes of legal proceedings in which it is reasonably possible that a loss may be incurred could, in the aggregate, be up to approximately $ 35 million in excess of amounts accrued as of December 31, 2020; however, the Company does not believe that the impact should result in a material liability to the Company in relation to its consolidated financial condition or results of operations. Commitments to Purchase Vehicles The Company maintains agreements with vehicle manufacturers under which the Company has agreed to purchase approximately $ 8.7 billion of vehicles from manufacturers over the next 12 months financed primarily through the issuance of vehicle-backed debt and cash received upon the disposition of vehicles. Certain of these commitments are subject to the vehicle manufacturers satisfying their obligations under their respective repurchase and guaranteed depreciation agreements. Other Purchase Commitments In the normal course of business, the Company makes various commitments to purchase other goods or services from specific suppliers, including those related to marketing, advertising, computer services and capital expenditures. As of December 31, 2020, the Company had approximately $ 177 million of purchase obligations, which extend through 2026. Concentrations Concentrations of credit risk at December 31, 2020, include (i) risks related to the Company’s repurchase and guaranteed depreciation agreements with domestic and foreign car manufacturers, including Ford, Fiat Chrysler and General Motors, and primarily with respect to receivables for program cars that have been disposed but for which the Company has not yet received payment from the manufacturers and (ii) risks related to Realogy and Wyndham, including receivables of $ 25 million and $ 15 million, respectively, related to certain contingent, income tax and other corporate liabilities assumed by Realogy and Wyndham in connection with their disposition. Asset Retirement Obligations F-41 Table of Contents The Company maintains a liability for asset retirement obligations. An asset retirement obligation is a legal obligation to perform certain activities in connection with the retirement, disposal or abandonment of assets. The Company’s asset retirement obligations, which are measured at discounted fair values, are primarily related to the removal of underground gasoline storage tanks at its rental facilities. The liability accrued for asset retirement obligations was $ 30 million and $ 27 million at December 31, 2020 and 2019, respectively. Standard Guarantees/Indemnifications In the ordinary course of business, the Company enters into numerous agreements that contain standard guarantees and indemnities whereby the Company agrees to indemnify another party, among other things, for performance under contracts and any breaches of representations and warranties thereunder. In addition, many of these parties are also indemnified against any third-party claim resulting from the transaction that is contemplated in the underlying agreement. Such guarantees or indemnifications are granted under various agreements, including those governing (i) purchases, sales or outsourcing of assets, businesses or activities, (ii) leases of real estate, (iii) licensing of trademarks, (iv) access to credit facilities and use of derivatives and (v) issuances of debt or equity securities. The guarantees or indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) licensees under licensing agreements, (iv) financial institutions in credit facility arrangements and derivative contracts and (v) underwriters and placement agents in debt or equity security issuances. While some of these guarantees extend only for the duration of the underlying agreement, many may survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments that the Company could be required to make under these guarantees, nor is the Company able to develop an estimate of the maximum potential amount of future payments to be made under these guarantees as the triggering events are not subject to predictability. With respect to certain of the aforementioned guarantees, such as indemnifications provided to landlords against third-party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates its potential exposure. 16. Stockholders’ Equity Cash Dividend Payments During 2020, 2019 and 2018, the Company did not declare or pay any cash dividends. The Company’s ability to pay dividends to holders of its common stock is limited by the Company’s senior credit facility, the indentures governing its senior notes and its vehicle financing programs. Share Repurchases The Company’s Board of Directors has authorized the repurchase of up to approximately $ 1.8 billion of its common stock under a plan originally approved in 2013 and subsequently expanded, most recently in August 2019. During 2020, 2019 and 2018, the Company repurchased approximately 13 million shares of common stock at a cost of approximately $ 375 million under the program. As of December 31, 2020, approximately $ 76 million of authorization remained available to repurchase common stock under this plan. In June 2019, as part of its share repurchase program, the Company entered into a structured repurchase agreement involving the use of capped call options for the purchase of its common stock. The Company paid a fixed sum upon the execution of the agreement in exchange for the right to receive either a pre-determined amount of cash or stock. The Company paid net premiums of $ 16 million to enter into this agreement, which was recorded as a reduction of additional paid in capital. 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. F-42 Table of Contents Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) are as follows: Currency Translation 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 ) Cumulative effect of accounting change — 1 — — 1 Balance, January 1, 2019 ( 3 ) 3 — ( 132 ) ( 132 ) 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 ) 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). (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 17. Stock-Based Compensation The Company’s Amended and Restated Equity and Incentive Plan provides for the grant of options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and other stock- or cash-based awards to employees, directors and other individuals who perform services for the Company and its subsidiaries. The maximum number of shares reserved for grant of awards under the plan is 22.5 million, with approximately 4.5 million shares available as of December 31, 2020. The Company typically settles stock-based awards with treasury shares. Time-based awards generally vest ratably over a three-year period following the date of grant, and performance- or market-based awards generally vest three years following the date of grant based on the attainment of performance- or market-based goals, all of which are subject to a service condition. F-43 Table of Contents Stock Unit Awards Stock unit awards entitle the holder to receive shares of common stock upon vesting on a one-to-one basis. Certain performance-based RSUs vest based upon the level of performance attained, but vesting can increase (typically by up to 20 %) if certain relative total shareholder return goals are achieved. Market-based RSUs generally vest based on the level of total shareholder return or absolute stock price attainment. In June 2020, 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. 2020 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 Grant Date Fair Value Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in millions) Time-based RSUs Outstanding at January 1, 2020 847 $ 36.99 Granted (a) 798 23.14 Vested (b) ( 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 Granted (a) 552 21.06 Vested (b) ( 73 ) 36.64 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) 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 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 F-44 Table of Contents 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. Stock-Compensation Expense During 2020, 2019 and 2018, the Company recorded stock-based compensation expense of $ 9 million ($ 7 million, net of tax), $ 22 million ($ 17 million, net of tax) and $ 24 million ($ 18 million, net of tax), respectively. 18. Employee Benefit Plans Defined Contribution Savings Plans The Company sponsors several defined contribution savings plans in the United States and certain foreign subsidiaries that provide certain eligible employees of the Company an opportunity to accumulate funds for retirement. The Company matches portions of the contributions of participating employees on the basis specified by the plans. The Company’s contributions to these plans were $ 23 million, $ 32 million and $ 33 million during 2020, 2019 and 2018, respectively. Defined Benefit Pension Plans The Company sponsors defined benefit pension plans in the United States and in certain foreign subsidiaries with some plans offering participation in the plans at the employees’ option. Under these plans, benefits are based on an employee’s years of credited service and a percentage of final average compensation. However, the majority of the plans are closed to new employees and participants are no longer accruing benefits. The funded status of the defined benefit pension plans is recognized on the Consolidated Balance Sheets and the gains or losses and prior service costs or credits that arise during the period, but are not recognized as components of net periodic benefit cost, are recognized as a component of accumulated other comprehensive loss, net of tax. The components of net periodic (benefit) cost consisted of the following: Year Ended December 31, 2020 2019 2018 Service cost (a) $ 5 $ 5 $ 6 Interest cost (b) 17 21 19 Expected return on plan assets (b) ( 31 ) ( 30 ) ( 33 ) Amortization of unrecognized amounts (b) 9 7 7 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. (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. The Company uses a measurement date of December 31 for its pension plans. The funded status of the pension plans were as follows: F-45 Table of Contents As of December 31, Change in Benefit Obligation 2020 2019 Benefit obligation at end of prior year $ 821 $ 722 Service cost 5 5 Interest cost 17 21 Actuarial (gain) loss 84 87 Currency translation adjustment 26 13 Net benefits paid ( 27 ) ( 27 ) Benefit obligation at end of current year $ 926 $ 821 Change in Plan Assets Fair value of assets at end of prior year $ 649 $ 549 Actual return on plan assets 71 91 Employer contributions 14 21 Currency translation adjustment 14 14 Net benefits paid ( 26 ) ( 26 ) Fair value of assets at end of current year $ 722 $ 649 As of December 31, Funded Status 2020 2019 Classification of net balance sheet assets (liabilities): Non-current assets $ 7 $ 20 Current liabilities ( 4 ) ( 4 ) 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: For the Year Ended December 31, U.S. Pension Benefit Plans 2020 2019 2018 Discount rate: Net periodic benefit cost 3.10 % 4.15 % 3.50 % Benefit obligation 2.25 % 3.10 % 4.15 % Long-term rate of return on plan assets 7.00 % 7.00 % 7.00 % Non-U.S. Pension Benefit Plans Discount rate: Net periodic benefit cost 1.95 % 2.75 % 2.55 % Benefit obligation 1.40 % 1.95 % 2.75 % Long-term rate of return on plan assets 3.80 % 4.50 % 4.50 % To select discount rates for its defined benefit pension plans, the Company uses a modeling process that involves matching the expected cash outflows of such plans, to yield curves constructed from portfolios of AA-rated fixed-income debt instruments. The Company uses the average yields of the hypothetical portfolios as a discount rate benchmark. The Company’s expected rate of return on plan assets of 7.00 % and 3.80 % for the U.S. plans and non-U.S. plans, respectively, used to determine pension obligations and pension costs, are long-term rates based on F-46 Table of Contents 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. As of December 31, 2019, plans with benefit obligations in excess of plan assets had accumulated benefit obligations of $ 466 million and plan assets of $ 276 million. The accumulated benefit obligation for all plans was $ 916 million and $ 811 million as of December 31, 2020 and 2019, respectively. The Company expects to contribute approximately $ 4 million to the U.S. plans and $ 5 million to the non-U.S. plans in 2021. The Company’s defined benefit pension plans’ assets are invested primarily in mutual funds and may change in value due to various risks, such as interest rate and credit risk and overall market volatility. Due to the level of risk associated with investment securities, it is reasonably possible that changes in the values of the pension plans’ investment securities will occur in the near term and that such changes would materially affect the amounts reported in the Company’s financial statements. The defined benefit pension plans’ investment goals and objectives are managed by the Company or Company-appointed and member-appointed trustees with consultation from independent investment advisors. While the objectives may vary slightly by country and jurisdiction, collectively the Company seeks to produce returns on pension plan investments, which are based on levels of liquidity and investment risk that the Company believes are prudent and reasonable, given prevailing capital market conditions. The pension plans’ assets are managed in the long-term interests of the participants and the beneficiaries of the plans. A suitable strategic asset allocation benchmark is determined for each plan to maintain a diversified portfolio, taking into account government requirements, if any, regarding unnecessary investment risk and protection of pension plans’ assets. 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. The equity component’s purpose is to provide a total return that will help preserve the purchasing power of the assets. The pension plans hold various mutual funds that invest in equity securities and are diversified among funds that invest in large cap, small cap, growth, value and international stocks as well as funds that are intended to “track” an index, such as the S&P 500. The equity investments in the portfolios will represent a greater assumption of market volatility and risk as well as provide higher anticipated total return over the long term. The equity component is expected to approximate 40 %- 60 % of the plans’ assets. The purpose of the fixed income component is to provide a deflation hedge, to reduce the overall volatility of the pension plans’ assets in relation to the liability and to produce current income. The pension plans hold mutual funds that invest in securities issued by governments, government agencies and corporations. The fixed income component is expected to approximate 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: F-47 Table of Contents 2020 Asset Class Level 1 Level 2 Total Cash equivalents and short-term investments $ 19 $ 50 $ 69 U.S. equities 113 56 169 Non-U.S. equities 64 103 167 Government bonds 5 1 6 Corporate bonds 105 32 137 Other assets 1 173 174 Total assets $ 307 $ 415 $ 722 2019 Asset Class Level 1 Level 2 Total Cash equivalents and short-term investments $ 16 $ 54 $ 70 U.S. equities 100 52 152 Non-U.S. 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. Multiemployer Plans The Company contributes to a number of multiemployer plans under the terms of collective-bargaining agreements that cover a portion of its employees. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects: (i) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers; (ii) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; (iii) if the Company elects to stop participating in a multiemployer plan, it may be required to contribute to such plan an amount based on the under-funded status of the plan; and (iv) the Company has no involvement in the management of the multiemployer plans’ investments. 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. 19. Financial Instruments Risk Management Currency Risk . The Company uses currency exchange contracts to manage its exposure to changes in currency exchange rates associated with its non-U.S.-dollar denominated receivables and forecasted royalties, forecasted earnings of non-U.S. subsidiaries and forecasted non-U.S.-dollar denominated acquisitions. The Company primarily hedges a portion of its current-year currency exposure to the Australian, Canadian and New Zealand dollars, the euro and the British pound sterling. The majority of forward contracts do not qualify for hedge accounting treatment. The fluctuations in the value of these forward contracts do, however, largely offset the impact of changes in the value of the underlying risk they economically hedge. Forward contracts used to hedge forecasted third-party receipts and disbursements up to 12 months are designated and do qualify as cash flow hedges. The Company has 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 F-48 Table of Contents other comprehensive income (loss) to earnings for cash flow and net investment hedges over the next 12 months is not material. Interest Rate Risk . The Company uses various hedging strategies including interest rate swaps and interest rate caps to create an appropriate mix of fixed and floating rate assets and liabilities. The Company estimates that $ 19 million of loss currently recorded in accumulated other comprehensive income (loss) will be recognized in earnings over the next 12 months. Commodity Risk. The Company periodically enters into derivative commodity contracts to manage its exposure to changes in the price of gasoline. These instruments were designated as freestanding derivatives and the changes in fair value are recorded in the Company’s consolidated results of operations. Credit Risk and Exposure . The Company is exposed to counterparty credit risks in the event of nonperformance by counterparties to various agreements and sales transactions. The Company manages such risk by evaluating the financial position and creditworthiness of such counterparties and by requiring collateral in certain instances in which financing is provided. The Company mitigates counterparty credit risk associated with its derivative contracts by monitoring the amount for which it is at risk with each counterparty, periodically evaluating counterparty creditworthiness and financial position, and where possible, dispersing its risk among multiple counterparties. There were no significant concentrations of credit risk with any individual counterparty or groups of counterparties at December 31, 2020 or 2019, other than (i) risks related to the Company’s repurchase and guaranteed depreciation agreements with domestic and foreign car manufacturers, and primarily with respect to receivables for program cars that were disposed but for which the Company has not yet received payment from the manufacturers (see Note 2-Summary of Significant Accounting Policies), (ii) receivables from Realogy and Wyndham related to certain contingent, income tax and other corporate liabilities assumed by Realogy and Wyndham in connection with their disposition and (iii) risks related to leases which have been assumed by Realogy but of which the Company is a guarantor. Concentrations of credit risk associated with trade receivables are considered minimal due to the Company’s diverse customer base. The Company does not normally require collateral or other security to support credit sales. Fair Value Derivative instruments and hedging activities As described above, derivative assets and liabilities consist principally of currency exchange contracts, interest rate swaps, interest rate caps and commodity contracts. The Company held derivative instruments with absolute notional values as follows: As of December 31, 2020 2019 Foreign exchange contracts $ 1,386 $ 1,518 Interest rate caps (a) 8,871 8,625 Interest rate swaps 1,950 1,500 __________ (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: F-49 Table of Contents As of December 31, 2020 As of December 31, 2019 Fair Value, Asset Derivatives Fair Value, Liability Derivatives Fair Value, Asset Derivatives Fair Value, Liability Derivatives Derivatives designated as hedging instruments Interest rate swaps (a) $ — $ 69 $ — $ 27 Derivatives not designated as hedging instruments Foreign exchange contracts (c) 3 11 5 10 Interest rate caps (b) — — — 1 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. (a) Included in other non-current assets or other non-current liabilities. (b) Included in assets under vehicle programs or liabilities under vehicle programs. (c) Included in other current assets or other current liabilities. 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) ( 67 ) 17 24 Financial instruments not designated as hedging instruments (d) Foreign exchange contracts (e) ( 5 ) ( 7 ) 31 Interest rate caps (f) — ( 1 ) ( 3 ) Commodity contracts (g) ( 6 ) 3 — 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. (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 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: F-50 Table of Contents 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 Debt under vehicle programs 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) 2 2 3 3 ___________ (a) Derivatives in liability position. 20. Segment Information The Company’s chief operating decision maker assesses performance and allocates resources based upon the separate financial information from the Company’s operating segments. In identifying its reportable segments, the Company considered the nature of services provided, the geographical areas in which the segments operated and other relevant factors. 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 (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 F-51 Table of Contents Americas International Corporate and Other (a) Total Revenues $ 3,965 $ 1,437 $ — $ 5,402 Vehicle depreciation and lease charges, net 968 400 — 1,368 Vehicle interest, net 274 44 — 318 Adjusted EBITDA 72 ( 202 ) ( 45 ) ( 175 ) Non-vehicle depreciation and amortization 185 91 10 286 Assets exclusive of assets under vehicle programs 5,510 2,754 101 8,365 Assets under vehicle programs 7,155 2,018 — 9,173 Capital expenditures (excluding vehicles) 65 29 — 94 __________ (a) Primarily represents unallocated corporate expenses and receivables from our former subsidiaries . Year Ended December 31, 2019 Americas International Corporate and Other (a) Total Revenues $ 6,352 $ 2,820 $ — $ 9,172 Vehicle depreciation and lease charges, net 1,462 601 — 2,063 Vehicle interest, net 284 60 — 344 Adjusted EBITDA 652 203 ( 67 ) 788 Non-vehicle depreciation and amortization 161 94 8 263 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) 162 62 26 250 __________ (a) Primarily represents unallocated corporate expenses and receivables from our former subsidiaries. Year Ended December 31, 2018 Americas International Corporate and Other (a) Total Revenues $ 6,186 $ 2,938 $ — $ 9,124 Vehicle depreciation and lease charges, net 1,568 611 — 2,179 Vehicle interest, net 252 62 — 314 Adjusted EBITDA 558 287 ( 64 ) 781 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) 134 76 21 231 __________ (a) Primarily represents unallocated corporate expenses and receivables from our former subsidiaries. F-52 Table of Contents 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 Less: Non-vehicle related depreciation and amortization (a) 286 263 256 Interest expense related to corporate debt, net 231 178 188 Early extinguishment of corporate debt 9 12 19 COVID-19 charges (b) 122 — — Restructuring and other related charges 118 80 22 Unprecedented personal-injury and other legal matters, net (c) 8 — — Non-operational charges related to shareholder activist activity (d) 4 2 9 Transaction-related costs, net 3 10 20 Gain on sale of equity method investment in China (c) — ( 44 ) — Income before income taxes $ ( 956 ) $ 287 $ 267 __________ (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. (c) Reported within operating expenses in our Consolidated Statements of Operations . (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 Total 2020 Revenues $ 3,758 $ 1,644 $ 5,402 Assets exclusive of assets under vehicle programs 5,262 3,103 8,365 Assets under vehicle programs 6,797 2,376 9,173 Net long-lived assets 1,421 1,147 2,568 2019 Revenues $ 5,867 $ 3,305 $ 9,172 Assets exclusive of assets under vehicle programs 5,830 3,481 9,311 Assets under vehicle programs 9,824 3,991 13,815 Net long-lived assets 1,536 1,155 2,691 2018 Revenues $ 5,708 $ 3,416 $ 9,124 Assets exclusive of assets under vehicle programs 3,494 2,876 6,370 Assets under vehicle programs 9,021 3,758 12,779 Net long-lived assets 1,476 1,177 2,653 ***** F-53 Table of Contents Schedule II – Valuation and Qualifying Accounts (in millions) 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, 2020 $ 214 $ ( 1 ) $ ( 6 ) $ — $ 207 2019 311 ( 95 ) ( 2 ) — 214 2018 331 ( 3 ) ( 17 ) — 311 __________ (a) Other adjustments relate to currency translation adjustments. G-1 Table of Contents EXHIBIT NO. DESCRIPTION 2.1 Separation and Distribution Agreement by and among Cendant Corporation*, Realogy Corporation, Wyndham Worldwide Corporation and Travelport Inc., dated as of July 27, 2006 (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated August 1, 2006). 2.2 Letter Agreement dated August 23, 2006 related to the Separation and Distribution Agreement by and among Realogy Corporation, Cendant Corporation*, Wyndham Worldwide Corporation and Travelport Inc. dated as of July 27, 2006 (Incorporated by reference to Exhibit 2.2 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2007, dated August 8, 2007). 3.1 Amended and Restated Certificate of Incorporation of Avis Budget Group, Inc. (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated September 5, 2006). 3.2 Amended and Restated Bylaws of Avis Budget Group, Inc., dated August 10, 2020 (Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated August 13, 2020). 4.1 Indenture dated as of 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). 4.2 Form of 5.25% Senior Notes Due 2025 (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated March 17, 2015). 4.3 Indenture dated as of March 29, 2016 for the 6.375% Senior Notes due 2024, among Avis Budget Car Rental LLC and Avis Budget Finance, Inc. as Issuers the Guarantors from time to time parties thereto and Deutsche Bank Trust Company Americas as Trustee (Incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, dated May 4, 2016). 4.4 Indenture dated as of September 26, 2016 among Avis Budget Finance Plc, as Issuer, the Guarantors from time to time parties hereto and Deutsche Bank Trust Company Americas as Trustee, Deutsche Bank AG, London Branch as Paying Agent and Deutsche Bank Luxembourg, S.A. as Registrar (Incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, dated November 3, 2016). 4.5 Form of 4.125% Senior Notes due 2024 (Incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, dated November 3, 2016). 4.6 Indenture dated as of March 8, 2017 among Avis Budget Finance, plc, as Issuer, the Guarantors from time to time parties hereto, Deutsche Bank Trust Company Americas, as Trustee, Deutsche Bank AG, London Branch, as Paying Agent and Deutsche Bank Luxembourg S.A., as Registrar (Incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, dated May 4, 2017). 4.7 Form of 4.50% Senior Notes Due 2025 (Incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, dated May 4, 2017). 4.8 Indenture dated as of October 4, 2018 among Avis Budget Finance, plc, as Issuer, the Guarantors from time to time parties thereto, Deutsche Bank Trust Company Americas, as Trustee, Deutsche Bank AG, London Branch, as Paying Agent and Deutsche Bank Luxembourg S.A., as Registrar (Incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018 dated November 6, 2018). 4.9 Form of 4.75% Senior Notes Due 2026 (Incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, dated November 6, 2018). 4.10 Indenture dated as of July 3, 2019 among Avis Budget Car Rental, LLC and Avis Budget Finance, Inc., as Issuers, the Guarantors from time to time parties thereto and Deutsche Bank Trust Company Americas, as Trustee. (Incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 dated August 6, 2019). 4.11 Form of 5.75% Senior Notes Due 2027. (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). 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. H-1 Table of Contents 10.1 Agreement between Avis Budget Group, Inc. and Joseph Ferraro (Incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, dated February 24, 2016).† 10.2 Agreement between Avis Budget Group, Inc. and Michael Tucker. (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). † 10.3(a) Severance Agreement between John F. North, III and Avis Budget Group, Inc. dated August 15, 2019. (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). † 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 (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). † 10.11 1997 Stock Incentive Plan (Incorporated by reference to Appendix E to the Joint Proxy Statement/ Prospectus included as part of the Company’s Registration Statement on Form S-4, Registration No. 333-34517, dated August 28, 1997).† 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).† 10.13 Form of Award Agreement - Restricted Stock Units. (Incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 dated February 21, 2019).† 10.14 Form of Award Agreement - Performance Based Restricted Stock Units. (Incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 dated February 21, 2019).† 10.15 Form of Non-Employee Director Award Agreement - Restricted Stock Units. (Incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 dated February 21, 2019).† H-2 Table of Contents 10.16 Form of Avis Budget Group, Inc. Severance Agreement. (Incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 dated February 21, 2019).† 10.17 Avis Budget Group, Inc. Non-Employee Directors Deferred Compensation Plan, amended and restated as of January 1, 2019. (Incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 dated February 21, 2019).† 10.18 Avis Budget Group, Inc. Deferred Compensation Plan, amended and restated as of November 1, 2008 (Incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, dated February 26, 2009).† 10.19 Avis Budget Group, Inc. Savings Restoration Plan, amended and restated as of November 1, 2008 (Incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, dated February 26, 2009).† 10.20 Amended Retirement Equalization Benefit Plan (Incorporated by reference to Exhibit 10.59 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, dated February 29, 2008).† 10.21 Avis Rent A Car System, LLC Pension Plan. (Incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 dated February 21, 2019).† 10.22 Cendant Corporation* Officer Personal Financial Services Policy (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated January 26, 2005). 10.23 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). 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). 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). 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). 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. (as successor in interest to The Bank of New York), as Trustee, to the Second Amended and Restated Base Indenture, dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.35(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014). 10.25 Second Amended and Restated Loan Agreement, dated as of June 3, 2004, among AESOP Leasing L.P., as Borrower, Quartx Fleet Management, Inc., as a Permitted Nominee, PV Holding Corp., as a Permitted Nominee, and Cendant Rental Car Funding (AESOP) LLC***, as Lender (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, dated August 2, 2004). 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). H-3 Table of Contents 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). 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). 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. and Avis Budget Car Rental, LLC (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2013 dated May 8, 2013). 10.30 Second Amended and Restated Administration Agreement, dated as of June 3, 2004, among Cendant Rental Car Funding (AESOP) LLC***, AESOP Leasing L.P., AESOP Leasing Corp. II, Avis Rent A Car System, Inc.****, Budget Rent A Car System, Inc., Cendant Car Rental Group, Inc.** and The Bank of New York, as Trustee (Incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, dated March 1, 2006). 10.30(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. and Avis Budget Car Rental, LLC, as Administrator, to the Second Amended and Restated Administration Agreement dated as of June 3, 2004 (Incorporated by reference to Exhibit 10.41(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, dated February 20, 2014). 10.31 Amended and Restated Series 2015-3 Supplement, dated as of August 16, 2018, between 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 2015-3 Agent (Incorporated by reference to Exhibit 10.43 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 dated February 21, 2019). H-4 Table of Contents 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). 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). 10.34 Series 2016-2 Supplement, dated as of June 1, 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 2016-2 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 7, 2016). 10.35 Series 2017-1 Supplement, dated as of March 15, 2017, between Avis Budget Rental Car Funding (AESOP) LLC and the Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2017-1 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 21, 2017). 10.36 Series 2017-2 Supplement, dated as of December 13, 2017, between Avis Budget Rental Car Funding (AESOP) LLC and the Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2017-2 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 19, 2017). 10.37 Series 2018-1 Supplement, dated as of April 30, 2018, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2018-1 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 4, 2018). 10.38 Series 2018-2 Supplement, dated as of October 25, 2018, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2018-2 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 30, 2018). 10.39 Series 2019-1 Supplement, dated as of February 13, 2019, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2019-1 Agent. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 20, 2019). 10.40 Series 2019-2 Supplement, dated as of April 23, 2019, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2019-2 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 29, 2019). 10.41 Series 2019-3 Supplement, dated as of August 27, 2019, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2019-3 Agent. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 29, 2019). 10.42 Series 2020-1 Supplement, dated as of January 29, 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 2020-1 Agent. (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). H-5 Table of Contents 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). 10.47 Fourth Master Amendment and Restatement Deed, by and among CarFin Finance International Limited, 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 listed therein, Structured Finance Management (Ireland) Limited, CarFin Finance Holdings Limited, Intertrust (Netherlands) B.V. And Vistra B.V., Credit Agricole Corporate And Investment Bank, FCT CarFin, Caceis Bank France, Caceis Corporate Trust, Deutsche Bank Luxembourg S.A. and Fiserv Automotive Solutions, Inc., dated December 15, 2014 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 19, 2014).†† 10.48 Seventh Master Amendment and Restatement Deed, by and among CarFin Finance International Limited, 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 January 22, 2016 (Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K dated April 21, 2016).†† 10.49 Ninth Master Amendment and Restatement Deed, by and among CarFin Finance International Limited, 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 May 16, 2017 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 22, 2017).†† 10.50 Tenth 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 herein. 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 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. 23.1 Consent of Deloitte & Touche LLP. 31.1 Certification of Chief Executive Officer pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended. 31.2 Certification of Chief Financial Officer pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended. 32 Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema. 101.CAL XBRL Taxonomy Extension Calculation Linkbase. 101.DEF XBRL Taxonomy Extension Definition Linkbase. 101.LAB XBRL Taxonomy Extension Label Linkbase. 101.PRE XBRL Taxonomy Extension Presentation Linkbase. H-6 Table of Contents ____________________ * Cendant Corporation is now known as Avis Budget Group, Inc. ** Cendant Car Rental Group, LLC (formerly known as Cendant Car Rental Group, Inc.) is now known as Avis Budget Car Rental, LLC. *** Cendant Rental Car Funding (AESOP) LLC, formerly known as AESOP Funding II L.L.C, is now known as Avis Budget Rental Car Funding (AESOP) LLC. **** Avis Rent A Car System, Inc. is now known as Avis Rent A Car System, LLC. † Denotes management contract or compensatory plan. †† Confidential treatment has been requested for certain portions of this Exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, which portions have been omitted and filed separately with the Securities and Exchange Commission. H-7