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, 2022. 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, 2022, our internal control over financial reporting was effective. The effectiveness of our internal control over financial reporting as of December 31, 2022 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 fourth quarter of 2022, there was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 43 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, 2022, 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, 2022, 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 as of and for the year ended December 31, 2022 of the Company and our report dated February 16, 2023 expressed an unqualified opinion on those consolidated financial statements. 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 16, 2023 44 Table of Contents ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not Applicable. 45 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 2023 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after December 31, 2022. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is incorporated by reference from our definitive proxy statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after December 31, 2022. 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 2023 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after December 31, 2022. 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 2023 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after December 31, 2022. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this Item is incorporated by reference from our definitive proxy statement for the 2023 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A within 120 days after December 31, 2022. 46 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, 2022, 2021 and 2020 commencing on page G-1 hereof. ITEM 15(A)(3). EXHIBITS See Exhibit Index commencing on page H-1 hereof. ITEM 16. FORM 10-K SUMMARY None. 47 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 16, 2023 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 16, 2023 (Joseph A. Ferraro) /s/ BRIAN CHOI Executive Vice President and Chief Financial Officer February 16, 2023 (Brian Choi) /s/ CATHLEEN DEGENOVA Vice President and Chief Accounting Officer February 16, 2023 (Cathleen DeGenova) /s/ BERNARDO HEES Executive Chairman of the Board of Directors February 16, 2023 (Bernardo Hees) /s/ JAGDEEP PAHWA Vice Chairman of the Board of Directors February 16, 2023 (Jagdeep Pahwa) /s/ ANU HARIHARAN Director February 16, 2023 (Anu Hariharan) /s/ LYNN KROMINGA Director February 16, 2023 (Lynn Krominga) /s/ GLENN LURIE Director February 16, 2023 (Glenn Lurie) /s/ KARTHIK SARMA Director February 16, 2023 (Karthik Sarma) 48 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 2 Consolidated Statements of Operations for the years ended December 31, 202 2 , 202 1 and 20 20 5 Consolidated Statements of Comprehensive Income for the years ended December 31, 202 2 , 202 1 and 20 20 6 Consolidated Balance Sheets as of December 31, 202 2 and 202 1 7 Consolidated Statements of Cash Flows for the years ended December 31, 202 2 , 202 1 and 20 20 8 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 202 2 , 202 1 and 20 20 10 Notes to Consolidated Financial Statements 11 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, 2022 and 2021, 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, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, 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, 2022, 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 16, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting. 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 the reasonableness of the inputs. – 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. • 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. F-3 Table of Contents 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, 2022 required a significant 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 the reasonableness of the inputs to the actuarial estimate. • 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. /s/ DELOITTE & TOUCHE LLP New York, New York February 16, 2023 We have served as the Company’s auditor since 1997. F-4 Table of Contents Avis Budget Group, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) Year Ended December 31, 2022 2021 2020 Revenues $ 11,994 $ 9,313 $ 5,402 Expenses Operating 5,285 4,255 3,322 Vehicle depreciation and lease charges, net 828 1,197 1,368 Selling, general and administrative 1,348 1,145 703 Vehicle interest, net 402 313 318 Non-vehicle related depreciation and amortization 225 272 286 Interest expense related to corporate debt, net: Interest expense 250 218 231 Early extinguishment of debt — 136 9 Restructuring and other related charges 19 64 118 Transaction-related costs, net 8 5 3 Other (income) expense, net ( 7 ) — — Total expenses 8,358 7,605 6,358 Income (loss) before income taxes 3,636 1,708 ( 956 ) Provision for (benefit from) income taxes 880 425 ( 272 ) Net income (loss) 2,756 1,283 ( 684 ) Less: net loss attributable to non-controlling interests ( 8 ) ( 2 ) — Net income (loss) attributable to Avis Budget Group, Inc. $ 2,764 $ 1,285 $ ( 684 ) Earnings (loss) per share Basic $ 58.41 $ 19.79 $ ( 9.71 ) Diluted $ 57.16 $ 19.44 $ ( 9.71 ) See Notes to Consolidated Financial Statements. F-5 Table of Contents Avis Budget Group, Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31, 2022 2021 2020 Net income (loss) $ 2,756 $ 1,283 $ ( 684 ) Less: net loss attributable to non-controlling interests ( 8 ) ( 2 ) — Net income (loss) attributable to Avis Budget Group, Inc. 2,764 1,285 ( 684 ) Other comprehensive income (loss), net of tax Currency translation adjustments: Currency translation adjustments, net of tax of $( 11 ), $( 20 ) and $ 23 , respectively ( 46 ) $ ( 35 ) $ 33 Reclassification of currency translation adjustments to earnings — 11 ( 2 ) Cash flow hedges: Net unrealized holding gains (losses), net of tax of $( 20 ), $( 6 ), and $ 14 , respectively 57 18 ( 39 ) Reclassification of cash flow hedges to earnings, net of tax of $( 2 ), $( 5 ), and $( 3 ), respectively 7 14 8 Minimum pension liability adjustment: Pension and post-retirement benefits, net of tax of $( 4 ), $( 13 ), and $ 12 , respectively 11 39 ( 36 ) Reclassification of pension and post-retirement benefits to earnings, net of tax of $( 2 ), $( 2 ), and $( 3 ), respectively 3 7 6 32 54 ( 30 ) Total comprehensive income (loss) attributable to Avis Budget Group, Inc. $ 2,796 $ 1,339 $ ( 714 ) See Notes to Consolidated Financial Statements. F-6 Table of Contents Avis Budget Group, Inc. CONSOLIDATED BALANCE SHEETS (In millions, except par value) As of December 31, 2022 2021 Assets Current assets: Cash and cash equivalents $ 570 $ 534 Receivables (net of allowance for doubtful accounts of $ 86 and $ 84 , respectively) 810 775 Other current assets 506 538 Total current assets 1,886 1,847 Property and equipment, net 594 537 Operating lease right-of-use assets 2,405 2,368 Deferred income taxes 1,379 1,615 Goodwill 1,070 1,108 Other intangibles, net 666 724 Other non-current assets 499 382 Total assets exclusive of assets under vehicle programs 8,499 8,581 Assets under vehicle programs: Program cash 70 89 Vehicles, net 15,961 12,866 Receivables from vehicle manufacturers and other 421 222 Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party 976 842 17,428 14,019 Total assets $ 25,927 $ 22,600 Liabilities and stockholders’ equity Current liabilities: Accounts payable and other current liabilities $ 2,547 $ 2,389 Short-term debt and current portion of long-term debt 27 19 Total current liabilities 2,574 2,408 Long-term debt 4,644 3,990 Long-term operating lease liabilities 1,884 1,910 Other non-current liabilities 554 625 Total liabilities exclusive of liabilities under vehicle programs 9,656 8,933 Liabilities under vehicle programs: Debt 2,534 2,542 Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party 11,275 8,848 Deferred income taxes 2,754 2,242 Other 408 244 16,971 13,876 Commitments and contingencies (Note 15) Stockholders’ equity: Preferred stock, $ .01 par value—authorized 10 shares; no ne issued and outstanding — — Common stock, $ .01 par value—authorized 250 shares; issued 137 shares, respectively 1 1 Additional paid-in capital 6,666 6,676 Retained earnings (accumulated deficit) 2,579 ( 185 ) Accumulated other comprehensive loss ( 101 ) ( 133 ) Treasury stock, at cost 98 and 81 shares, respectively ( 9,848 ) ( 6,579 ) Stockholders’ equity attributable to Avis Budget Group, Inc. ( 703 ) ( 220 ) Non-controlling interests 3 11 Total stockholders’ equity ( 700 ) ( 209 ) Total liabilities and stockholders’ equity $ 25,927 $ 22,600 See Notes to Consolidated Financial Statements. F-7 Table of Contents Avis Budget Group, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31, 2022 2021 2020 Operating activities Net income (loss) $ 2,756 $ 1,283 $ ( 684 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Vehicle depreciation 1,709 1,402 1,330 Amortization of right-of-use assets 877 806 945 (Gain) loss on sale of vehicles, net ( 1,019 ) ( 361 ) ( 157 ) Non-vehicle related depreciation and amortization 225 272 286 Deferred income taxes 682 378 ( 317 ) Stock-based compensation 25 30 9 Amortization of debt financing fees 34 33 33 Early extinguishment of debt costs — 136 9 Net change in assets and liabilities: Receivables ( 97 ) ( 143 ) 115 Income taxes 6 ( 28 ) 1 Accounts payable and other current liabilities 217 414 ( 181 ) Operating lease liabilities ( 879 ) ( 801 ) ( 936 ) Other, net 171 70 238 Net cash provided by operating activities 4,707 3,491 691 Investing activities Property and equipment additions ( 246 ) ( 108 ) ( 94 ) Proceeds received on asset sales 2 3 6 Net assets acquired (net of cash acquired) ( 3 ) ( 46 ) ( 69 ) Other, net ( 33 ) ( 3 ) — Net cash used in investing activities exclusive of vehicle programs ( 280 ) ( 154 ) ( 157 ) Vehicle programs: Investment in vehicles ( 10,491 ) ( 10,054 ) ( 5,401 ) Proceeds received on disposition of vehicles 6,606 4,077 8,753 Investment in debt securities of Avis Budget Rental Car Funding (AESOP)—related party ( 439 ) ( 367 ) ( 286 ) Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP)—related party 305 192 268 ( 4,019 ) ( 6,152 ) 3,334 Net cash provided by (used in) investing activities ( 4,299 ) ( 6,306 ) 3,177 F-8 Table of Contents Avis Budget Group, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (In millions) Year Ended December 31, 2022 2021 2020 Financing activities Proceeds from long-term borrowings $ 729 $ 1,100 $ 991 Payments on long-term borrowings ( 24 ) ( 1,354 ) ( 308 ) Net change in short-term borrowings ( 1 ) 1 — Debt financing fees ( 7 ) ( 24 ) ( 26 ) Proceeds from issuance of common stock — — 15 Repurchases of common stock ( 3,329 ) ( 1,460 ) ( 119 ) Contributions from non-controlling interests 40 38 — Net cash provided by (used in) financing activities exclusive of vehicle programs ( 2,592 ) ( 1,699 ) 553 Vehicle programs: Proceeds from borrowings 17,419 14,467 13,558 Payments on borrowings ( 15,160 ) ( 10,056 ) ( 18,138 ) Debt financing fees ( 27 ) ( 25 ) ( 18 ) 2,232 4,386 ( 4,598 ) Net cash provided by (used in) financing activities ( 360 ) 2,687 ( 4,045 ) Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash ( 32 ) ( 11 ) 42 Net increase (decrease) in cash and cash equivalents, program and restricted cash 16 ( 139 ) ( 135 ) Cash and cash equivalents, program and restricted cash, beginning of period 626 765 900 Cash and cash equivalents, program and restricted cash, end of period $ 642 $ 626 $ 765 Supplemental disclosure Interest payments $ 543 $ 509 $ 503 Income tax payments, net $ 192 $ 75 $ 44 See Notes to Consolidated Financial Statements. F-9 Table of Contents Avis Budget Group, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In millions) Common Stock Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Treasury Stock Stockholders’ Equity Attributable to Avis Budget Group, Inc. Non-controlling Interests Total Stockholders’ Equity Shares Amount Shares Amount Balance at January 1, 2020 137.1 $ 1 $ 6,741 $ ( 785 ) $ ( 157 ) ( 63.2 ) $ ( 5,144 ) $ 656 $ — $ 656 Cumulative effect of accounting change — — ( 1 ) — — ( 1 ) — ( 1 ) Comprehensive loss: Net loss — — — ( 684 ) — — — — — ( 684 ) Other comprehensive loss — — — — ( 30 ) — — — — ( 30 ) Total comprehensive loss ( 684 ) ( 30 ) ( 714 ) — ( 714 ) Non-controlling interests — — ( 2 ) — — — — ( 2 ) — ( 2 ) Net activity related to restricted stock units — — ( 50 ) — — 0.5 54 4 — 4 Activity related to employee stock purchase plan — — ( 1 ) — — — 1 — — — Issuance of common stock — — ( 20 ) — — 0.4 35 15 — 15 Repurchases of common stock — — — — — ( 5.0 ) ( 113 ) ( 113 ) — ( 113 ) Balance at December 31, 2020 137.1 $ 1 $ 6,668 $ ( 1,470 ) $ ( 187 ) ( 67.3 ) $ ( 5,167 ) $ ( 155 ) $ — $ ( 155 ) Comprehensive income: Net income — — — 1,285 — — — — ( 2 ) 1,283 Other comprehensive income — — — — 54 — — — — 54 Total comprehensive income 1,285 54 1,339 ( 2 ) 1,337 Contributions from non-controlling interests — — 25 — — — — 25 13 38 Net activity related to restricted stock units — — ( 17 ) — — 0.4 31 14 — 14 Repurchases of common stock — — — — — ( 14.3 ) ( 1,443 ) ( 1,443 ) — ( 1,443 ) Balance at December 31, 2021 137.1 $ 1 $ 6,676 $ ( 185 ) $ ( 133 ) ( 81.2 ) $ ( 6,579 ) $ ( 220 ) $ 11 $ ( 209 ) Comprehensive income: Net income — — — 2,764 — — — 2,764 ( 8 ) 2,756 Other comprehensive income — — — — 32 — — 32 — 32 Total comprehensive income 2,764 32 2,796 ( 8 ) 2,788 Contributions from non-controlling interests — — 24 — — — — 24 — 24 Net activity related to restricted stock units — — ( 34 ) — — 0.3 ( 2 ) ( 36 ) — ( 36 ) Repurchases of common stock — — — — — ( 16.7 ) ( 3,267 ) ( 3,267 ) — ( 3,267 ) Balance at December 31, 2022 137.1 $ 1 $ 6,666 $ 2,579 $ ( 101 ) ( 97.6 ) $ ( 9,848 ) $ ( 703 ) $ 3 $ ( 700 ) See Notes to Consolidated Financial Statements. F-10 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, “we”, “our”, “us”, or the “Company”). We operate the following reportable business segments: • Americas - consisting primarily of (i) vehicle rental operations in North America, South America, Central America and the Caribbean, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which we do not operate directly. • International - consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which we do not operate directly. We have completed the business acquisitions discussed in Note 6 – Acquisitions 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. We present separately the financial data of our vehicle programs. These programs are distinct from our other activities since the assets under vehicle programs are generally funded through the issuance of debt that is collateralized by such assets. The income generated by these assets is used, in part, to repay the principal and interest associated with the debt. Cash inflows and outflows relating to the acquisition of such assets and the principal debt repayment or financing of such assets are classified as activities of our vehicle programs. We believe it is appropriate to segregate the financial data of our vehicle programs because, ultimately, the source of repayment of such debt is the realization of such assets. 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 our and all entities in which we have a direct or indirect controlling financial interest and variable interest entities for which we have determined we are the primary beneficiary. We consolidate joint venture activities when we have a controlling interest and record non-controlling interests within stockholders’ equity and the statement of comprehensive income equal to the percentage of ownership interest retained in such entities by the respective non-controlling party. 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 We derive revenues primarily by providing vehicle rentals and other related products and mobility services to commercial and leisure customers, as well as through licensing of our 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, F-11 Table of Contents 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. We also receive payment from customers for certain operating expenses that we incur, including airport concession fees that are paid by us in exchange for the right to operate at airports and other locations, as well as vehicle licensing fees. In addition, we collect membership fees in connection with our car sharing business. We combine all lease and non-lease components of our vehicle rental contracts for which the timing and pattern of transfer are the same and the lease component meets the classification of an operating lease. Vehicle rentals and other related products and mobility services are recognized evenly over the period of rental, which is on average approximately five days. (See Note 3 – Leases). Licensing revenues principally consist of royalties paid by our licensees and are recorded as the licensees’ revenues are earned (over the rental period). We renew license agreements in the normal course of business and occasionally terminate, purchase or sell license agreements. In connection with ongoing fees that we receive from our licensees pursuant to license agreements, we are required to provide certain services, such as training, marketing and the operation of reservation systems. We exclude from the measurement of our 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 our car sharing business are generally nonrefundable, are deferred and recognized ratably over the period of membership. Revenues are recognized under Leases (Topic 842) with the exception of royalty fee revenue derived from our licensees and revenue related to our customer loyalty program, which were approximately $ 165 million, $ 127 million and $ 159 million for the years ended December 31, 2022, 2021 and 2020, respectively. The following table presents our revenues disaggregated by geography: Year Ended December 31, 2022 2021 2020 Americas $ 9,474 $ 7,557 $ 3,965 Europe, Middle East and Africa 1,927 1,400 1,127 Asia and Australasia 593 356 310 Total revenues $ 11,994 $ 9,313 $ 5,402 The following table presents our revenues disaggregated by brand: Year Ended December 31, 2022 2021 2020 Avis $ 6,519 $ 4,894 $ 2,961 Budget 4,701 3,715 1,908 Other 774 704 533 Total revenues $ 11,994 $ 9,313 $ 5,402 ________ Other includes Zipcar and other operating brands. F-12 Table of Contents Deferred Revenue We record deferred revenues when cash payments are received in advance of satisfying our performance obligations, including amounts that are refundable. In addition, certain customers earn loyalty points on rentals, for which we defer a portion of our rental revenues generally equivalent to the estimated retail value of points expected to be redeemed. We estimate 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 our customer loyalty program: Year Ended December 31, 2022 2021 Balance, January 1 $ 50 $ 34 Revenue deferred 52 49 Revenue recognized ( 41 ) ( 33 ) Balance, December 31 $ 61 $ 50 _______ At December 31, 2022 and 2021, $ 15 million and $ 33 million was included in accounts payable and other current liabilities, respectively, and $ 46 million and $ 17 million in other non-current liabilities, respectively. Non-current amounts are expected to be recognized as revenue within two to three years . 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 (See Note 16 – Stockholders' Equity). We have designated our euro-denominated Notes as a hedge of our investment in euro-denominated foreign operations and, accordingly, record 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 We consider 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 we consider 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, 2022 2021 Cash and cash equivalents $ 570 $ 534 Program cash 70 89 Restricted cash (a) 2 3 Total cash and cash equivalents, program and restricted cash $ 642 $ 626 _________ (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: F-13 Table of Contents Buildings 30 years Furniture, fixtures & equipment 3 to 10 years Capitalized software 3 to 7 years Buses and support vehicles 4 to 15 years We capitalize 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 w as $ 174 million and $ 188 million as of December 31, 2022 and 2021, respectively. 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. We do not amortize goodwill, but assess 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. We perform our annual impairment assessment in the fourth quarter of each year at the reporting unit level. We assess 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 We are 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. We acquire a portion of our 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). We depreciate 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 us 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. We regularly evaluate estimated residual values and adjust 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 F-14 Table of Contents vehicle depreciation at the time of sale. Vehicle-related interest expense amounts are net of vehicle-related interest income of $ 1 million, $ 1 million and $ 12 million for 2022, 2021 and 2020, respectively. Advertising Expenses Advertising and digital marketing costs are generally expensed in the period incurred and are recorded within selling, general and administrative expenses in our Consolidated Statements of Operations. During 2022, 2021 and 2020, advertising costs were approximately $ 64 million, $ 81 million and $ 54 million, respectively. In addition, during 2022, 2021 and 2020, digital marketing costs were approximately $ 71 million, $ 44 million and $ 37 million, respectively. Taxes We account 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. As a result of the provisions of the Tax Cuts and Jobs Act, we account for Global Intangible Low-Taxed Income (“GILTI”) as a component of current period income tax expense in the year incurred. We record net deferred tax assets to the extent we believe that it is more likely than not that these assets will be realized. In making such determination, we consider 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 we were to determine that we would be able to realize the deferred income tax assets in the future in excess of their net recorded amount, we would adjust the valuation allowance, which would reduce the provision for income taxes. Fair Value Measurements We measure 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 our 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, we have 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. Our 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 us 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. We principally use discounted cash flows to value these instruments. These models take into account a variety of factors including, where applicable, maturity, currency exchange rates, our interest rate yield curves 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. F-15 Table of Contents Derivative Instruments Derivative instruments are used as part of our 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 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 $ 391 million and $ 383 million of liabilities associated with retained risks of liability to third parties as of December 31, 2022 and 2021, 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, our 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 we are 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 $ 48 million as of December 31, 2022 and 2021, 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. Our 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 our 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 our 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 F-16 Table of Contents time of grant and, since we do not currently pay or plan to pay a dividend on our common stock, the expected dividend yield was zero . Business Combinations We use 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 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. We record 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 primarily related to acquisition-related activities such as due-diligence and other advisory costs, expenses related to the integration of the acquiree’s operations with our comparable expenses, 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 We account for investments for which we have the ability to exercise significant influence, but do not have a controlling interest, using the equity method of accounting and record our proportional share of net income or loss within operating expenses in the Consolidated Statements of Operations. We assess 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, 2022 and 2021, we had investments with a carrying value of $ 77 million and $ 72 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 2022, 2021 and 2020, the amounts realized from the sale of equity investments and dividend income was $ 12 million, $ 10 million and $ 5 million, respectively. See Note 17 – Related Party Transactions for our equity method investment in our former subsidiary. Divestitures We classify 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. We initially measure 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 our operations and financial results, the disposal is presented as a discontinued operation. In February 2022, we completed the sale of our operations in the United States Virgin Islands for $ 13 million, for the right to operate the Avis brand. During the year ended December 31, 2022, we recorded a gain of $ 2 million within restructuring and other related charges. F-17 Table of Contents In December 2021, we entered into a stock purchase agreement with Spuigroep B.V. to sell our operations in the Netherlands. In March 2022, we completed the sale of our operations in the Netherlands for $ 15 million, subject to working capital adjustments, for the right to operate the Avis and Budget brands. During the year ended December 31, 2022, we recorded a loss of $ 7 million, net of impact of foreign currency adjustments, within restructuring and other related charges. The Netherlands operations are reported within our International reporting segment. In May 2021, we completed the sale of our operation in Argentina to Urbiz S.A. for $ 4 million. As part of the sale, Urbiz S.A. agreed to pay the purchase price, plus interest, over two years for the right to operate the Avis and Budget brands. During the year ended December 31, 2021, we recorded a loss of $ 14 million , net of the impact of foreign currency adjustments, within restructuring and other related charges. In addition, we paid severance to terminated employees of $ 2 million . Variable Interest Entity (“VIE”) We review our investments to determine if they are VIEs. A VIE is an entity in which either (i) the equity investors as a group lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. Entities that are determined to be VIEs are consolidated if we are the primary beneficiary of the entity. The primary beneficiary possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. We will reconsider our original assessment of a VIE upon the occurrence of certain events such as contributions and redemptions, either by us, or third parties, or amendments to an entity’s governing documents. On an ongoing basis, we reconsider whether we are deemed to be a VIE’s primary beneficiary. See Note 17 – Related Party Transactions for our VIE investment in our former subsidiary. Nonmarketable Equity Securities We classify 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. We apply the measurement alternative, which allows these investments to be recorded at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer. Any changes in value are recorded within operating expenses. As of December 31, 2022 and 2021, our nonmarketable equity securities within non-current assets on our Consolidated Balance sheets were not material and no material adjustments were made to the carrying values of these securities during the years ended December 31, 2022, 2021 or 2020. Recently Issued Accounting Pronouncements Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued ASU 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which amends Topic 805 to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. ASU 2021-08 becomes effective for us on January 1, 2023. Early adoption is permitted on a retrospective or prospective basis. The adoption of this accounting pronouncement is not expected to have a material impact on our Consolidated Financial Statements. Reference Rate Reform In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848),” which amends ASU 2020-04 and clarifies the scope and guidance of Topic 848 to allow derivatives impacted by the reference rate reform to qualify for certain optional expedients and exceptions for contract modifications and hedge accounting. The guidance is optional and is effective for a limited period of time through December 31, 2022. As of December 31, 2022, this guidance had no impact on our Consolidated Financial Statements and we will continue to evaluate this guidance. F-18 Table of Contents 3. Leases Lessor The following table presents our lease revenues disaggregated by geography: Year Ended December 31, 2022 2021 2020 Americas $ 9,401 $ 7,501 $ 3,864 Europe, Middle East and Africa 1,852 1,343 1,080 Asia and Australasia 576 342 299 Total lease revenues $ 11,829 $ 9,186 $ 5,243 The following table presents our lease revenues disaggregated by brand: Year Ended December 31, 2022 2021 2020 Avis $ 6,420 $ 4,828 $ 2,851 Budget 4,650 3,674 1,878 Other 759 684 514 Total lease revenues $ 11,829 $ 9,186 $ 5,243 ________ Other includes Zipcar and other operating brands. Lessee We have operating and finance leases for rental locations, corporate offices, vehicle rental fleet and equipment. Many of our operating leases for rental locations contain concession agreements with various airport authorities that allow us to conduct our vehicle rental operations on site. In general, concession fees for airport locations are based on a percentage of total commissionable revenue as defined by each airport authority, some of which are subject to minimum annual guaranteed amounts. Concession fees other than minimum annual guaranteed amounts are not included in the measurement of operating lease ROU assets and operating lease liabilities, and are recorded as variable lease expense as incurred. Our operating leases for rental locations often also require us to pay or reimburse operating expenses. We lease a portion of our vehicles under operating leases. As of December 31, 2022 and 2021, we have guaranteed up to $ 65 million and $ 102 million, respectively, of residual values for these vehicles at the end of their respective lease terms. We believe 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 have not recorded a liability related to guaranteed residual values. F-19 Table of Contents The components of lease expense are as follows: Year Ended December 31, 2022 2021 2020 Property leases (a) Operating lease expense $ 703 $ 561 $ 575 Variable lease expense 520 433 152 Sublease income ( 5 ) ( 6 ) ( 6 ) Total property lease expense $ 1,218 $ 988 $ 721 Vehicle leases Finance lease expense: Amortization of ROU assets (b) $ 29 $ 37 $ 33 Interest on lease liabilities (c) 3 4 3 Operating lease expense (b) 138 156 195 Total vehicle lease expense $ 170 $ 197 $ 231 __________ (a) Primarily included in operating expenses and includes $( 9 ) million, $( 2 ) million and $ 60 million of minimum annual guaranteed rent in excess of concession fees as defined in our rental concession agreement for the years ended December 31, 2022, 2021 and 2020, respectively. (b) Included in vehicle depreciation and lease charges, net. (c) Included in vehicle interest, net. F-20 Table of Contents Supplemental balance sheet information related to leases is as follows: As of December 31, 2022 2021 Property leases Operating lease ROU assets $ 2,405 $ 2,368 Short-term operating lease liabilities (a) $ 555 $ 496 Long-term operating lease liabilities 1,884 1,910 Operating lease liabilities $ 2,439 $ 2,406 Weighted average remaining lease term 8.2 years 8.8 years Weighted average discount rate 4.30 % 3.84 % Vehicle leases Finance Finance lease ROU assets, gross $ 267 $ 353 Accumulated amortization ( 45 ) ( 72 ) Finance lease ROU assets, net (b) $ 222 $ 281 Short-term vehicle finance lease liabilities $ 44 $ 126 Long-term vehicle finance lease liabilities 132 116 Vehicle finance lease liabilities (c) $ 176 $ 242 Weighted average remaining lease term 2.0 years 2.2 years Weighted average discount rate 1.82 % 1.97 % Operating Vehicle operating lease ROU assets (d) $ 86 $ 63 Short-term vehicle operating lease liabilities $ 64 $ 50 Long-term vehicle operating lease liabilities 22 14 Vehicle operating lease liabilities (e) $ 86 $ 64 Weighted average remaining lease term 1.4 years 1.3 years Weighted average discount rate 4.86 % 2.66 % _________ (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 . F-21 Table of Contents Supplemental cash flow information related to leases is as follows: Year Ended December 31, 2022 2021 2020 Cash payments for lease liabilities within operating activities: Property operating leases $ 743 $ 639 $ 740 Vehicle finance leases 3 4 3 Vehicle operating leases 137 162 196 Cash payments for lease liabilities within financing activities: Vehicle finance leases 181 193 294 Non-cash activities - increase in ROU assets in exchange for lease liabilities: Property operating leases 812 484 666 Vehicle finance leases 153 223 257 Vehicle operating leases 161 115 111 Maturities of lease liabilities as of December 31, 2022 are as follows: Property Operating Leases Vehicle Finance Leases Vehicle Operating Leases Within 1 year $ 646 $ 44 $ 64 Between 1 and 2 years 441 4 18 Between 2 and 3 years 345 128 6 Between 3 and 4 years 286 — 1 Between 4 and 5 years 234 — — Thereafter 967 — — Total lease payments 2,919 176 89 Less: Imputed interest ( 480 ) — ( 3 ) Total $ 2,439 $ 176 $ 86 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, 2022 2021 2020 Net income (loss) attributable to Avis Budget Group, Inc. for basic and diluted EPS $ 2,764 $ 1,285 $ ( 684 ) Basic weighted average shares outstanding 47.3 64.9 70.5 Options and non-vested stock 1.1 1.2 — Diluted weighted average shares outstanding $ 48.4 $ 66.1 $ 70.5 Earnings (loss) per share: Basic $ 58.41 $ 19.79 $ ( 9.71 ) Diluted $ 57.16 $ 19.44 $ ( 9.71 ) F-22 Table of Contents The following table summarizes our outstanding common stock equivalents that were anti-dilutive and therefore excluded from the computation of diluted EPS (shares in millions): As of December 31, 2022 2021 2020 Non-vested stock (a) 0.2 — 1.2 __________ (a) The weighted average grant date fair value for anti-dilutive non-vested stock for 2022 and 2020 was $ 177.70 and $ 26.20 , respectively. 5. Restructuring and Other Related Charges Restructuring During second quarter 2022, we initiated a restructuring plan to focus on consolidating our global operations by designing new processes and implementing new systems (“Cost Optimization”). As of December 31, 2022, we formally communicated and terminated employment of approximately 200 employees as part of this process. We expect no further restructuring expense related to this initiative. During the first quarter of 2021, we initiated a global restructuring plan to focus on cost discipline by reviewing headcounts, facilities and contractor agreements. We transformed our business as we exited the COVID-19 crisis by controlling fixed costs and matching variable costs to demand (“T21”). We expect no further restructuring expense related to this initiative. During first quarter 2020, we 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”). We expect no further restructuring expense related to this initiative. During third quarter 2019, we initiated a restructuring plan to exit our operations in Brazil by closing rental facilities, disposing of assets and terminating personnel (“Brazil”). This initiative is complete. During first quarter 2019, we initiated a restructuring plan to drive global efficiency by improving processes and consolidating functions, and to create new objectives and strategies for our truck rental operations in the U.S. by reducing headcount, large vehicles and rental locations (“T19”). This initiative is complete. F-23 Table of Contents The following tables summarize the change to our restructuring-related liabilities and identifies the amounts recorded within our reporting segments for restructuring charges and corresponding payments and utilizations: Personnel Related Facility Related Other (a) Total Balance at January 1, 2020 $ 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 Restructuring expense: T21 26 4 2 32 T19 — — ( 2 ) ( 2 ) Restructuring payment/utilization: T21 ( 17 ) ( 4 ) ( 4 ) ( 25 ) 2020 Optimization ( 5 ) — — ( 5 ) T19 ( 1 ) — 2 1 Balance as of December 31, 2021 $ 7 $ 2 $ 1 $ 10 Restructuring expense: Cost Optimization 9 — — 9 T21 3 — — 3 Brazil — — 1 1 Restructuring payment/utilization: Cost Optimization ( 6 ) — ( 1 ) ( 7 ) T21 ( 8 ) ( 1 ) — ( 9 ) 2020 Optimization ( 1 ) — — ( 1 ) Brazil — — ( 1 ) ( 1 ) T19 — ( 1 ) — ( 1 ) Balance as of December 31, 2022 $ 4 $ — $ — $ 4 __________ (a) Includes expenses primarily related to the disposition of vehicles. F-24 Table of Contents Americas International Total Balance at January 1, 2020 $ 2 $ 4 $ 6 Restructuring expense: 2020 Optimization 31 48 79 T19 14 — 14 Restructuring payment/utilization: 2020 Optimization ( 29 ) ( 42 ) ( 71 ) Brazil 1 — 1 T19 ( 16 ) ( 4 ) ( 20 ) Balance as of December 31, 2020 3 6 9 Restructuring expense: T21 5 27 32 T19 ( 2 ) — ( 2 ) Restructuring payment/utilization: T21 ( 4 ) ( 21 ) ( 25 ) 2020 Optimization ( 2 ) ( 3 ) ( 5 ) T19 2 ( 1 ) 1 Balance as of December 31, 2021 2 8 10 Restructuring expense: Cost Optimization 2 7 9 T21 1 2 3 Brazil 1 — 1 Restructuring payment/utilization: Cost Optimization ( 2 ) ( 5 ) ( 7 ) T21 ( 2 ) ( 7 ) ( 9 ) 2020 Optimization — ( 1 ) ( 1 ) Brazil ( 1 ) — ( 1 ) T19 — ( 1 ) ( 1 ) Balance as of December 31, 2022 $ 1 $ 3 $ 4 Other Related Charges Limited Voluntary Opportunity Plans (“LVOP”) During the second quarter of 2021, our operations in our International segment offered a voluntary termination program to certain employees in field operations 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, 2021, we recorded other related charges of approximately $ 17 million in connection with the LVOP. As of December 31, 2021, approximately 130 employees elected to participate in the plan and the participants have been terminated. During 2020, we 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, we recorded other related charges of approximately $ 18 million in connection with the LVOP. F-25 Table of Contents Officer Separation Costs In April 2022, we announced the departure of Veresh Sita as Executive Vice President and Chief Digital and Innovation Officer effective May 13, 2022. In connection with Mr. Sita’s separation, we recorded other related charges of approximately $ 1 million, inclusive of accelerated stock-based compensation expense, for the year ended December 31, 2022. In August 2020, we announced the resignation of John F. North, III as our 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, we 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, we announced the departure of Michael K. Tucker as Executive Vice President, General Counsel effective March 27, 2020. In connection with Mr. Tucker’s separation, we recorded other related charges of approximately $ 2 million for the year ended December 31, 2020. 6. Acquisitions 2021 During 2021, we completed the acquisitions of various licensees in Europe and North America, for approximately $ 23 million, plus $ 22 million for acquired fleet. These investments were in-line with our strategy to re-acquire licensees when advantageous to expand our footprint of Company-operated locations. The acquired fleet was financed under our existing financing arrangements. In connection with these acquisitions, approximately $ 28 million was recorded to other intangibles related to franchise agreements. The licens e agreements are being amortized over a weighted average useful life of approximately one year . Differences between the preliminary allocation of purchase price and the final allocation were not material. 2020 During 2020, we 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 our strategy to re-acquire licensees when advantageous to expand our footprint of Company-operated locations. The acquired fleet was financed under our existing 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 . Differences between the preliminary allocation of purchase price and the final allocation were not material for Avis and Budget Licensees. F-26 Table of Contents 7. Intangible Assets Intangible assets consisted of: As of December 31, 2022 As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortized Intangible Assets License agreements (a) $ 290 $ 217 $ 73 $ 298 $ 193 $ 105 Customer relationships (b) 247 207 40 257 204 53 Other (c) 48 39 9 51 36 15 $ 585 $ 463 $ 122 $ 606 $ 433 $ 173 Unamortized Intangible Assets Goodwill $ 1,070 $ 1,108 Trademarks $ 544 $ 551 _________ (a) Primarily amortized over a period ranging from 0 to 40 years with a weighted average life of 16 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 2 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, 2022 2021 2020 License agreements $ 29 $ 47 $ 37 Customer relationships 10 14 23 Other 5 6 5 Total $ 44 $ 67 $ 65 Based on our amortizable intangible assets at December 31, 2022, we expect related amortization expens e of approximately $ 27 million for 2023, $ 22 million for 2024, $ 16 million for 2025, $ 15 million for 2026 and $ 12 million for 2027 excluding effects of currency exchange rates. The carrying amounts of goodwill and related changes are as follows: Americas International Total Company Goodwill as of January 1, 2021 $ 2,140 $ 1,115 $ 3,255 Accumulated impairment losses as of January 1, 2021 ( 1,587 ) ( 531 ) ( 2,118 ) Goodwill as of January 1, 2021 553 584 1,137 Currency translation adjustments and other — ( 29 ) ( 29 ) Goodwill as of December 31, 2021 553 555 1,108 Currency translation adjustments and other ( 3 ) ( 35 ) ( 38 ) Goodwill as of December 31, 2022 $ 550 $ 520 $ 1,070 F-27 Table of Contents 8. Vehicle Rental Activities The components of vehicles, net within assets under vehicle programs are as follows: As of December 31, 2022 2021 Rental vehicles $ 17,819 $ 14,612 Less: Accumulated depreciation ( 2,211 ) ( 1,911 ) 15,608 12,701 Vehicles held for sale 317 165 Vehicles, net investment in lease (a) 36 — Vehicles, net $ 15,961 $ 12,866 _______ (a) See Note 17 – Related Party Transactions The components of vehicle depreciation and lease charges, net are summarized below: Year Ended December 31, 2022 2021 2020 Depreciation expense $ 1,709 $ 1,402 $ 1,330 Lease charges 138 156 195 (Gain) loss on sale of vehicles, net ( 1,019 ) ( 361 ) ( 157 ) Vehicle depreciation and lease charges, net $ 828 $ 1,197 $ 1,368 At December 31, 2022, 2021 and 2020, we had payables related to vehicle purchases included in liabilities under vehicle programs - other o f $ 265 million , $ 142 million and $ 232 million, respectively, and receivables related to vehicle sales included in assets under vehicle programs - receivables from vehicle manufacturers and other of $ 212 million , $ 134 million and $ 162 million, respectively. F-28 Table of Contents 9. Income Taxes The provision for (benefit from) income taxes consists of the following: Year Ended December 31, 2022 2021 2020 Current Federal $ — $ — $ ( 5 ) State 137 35 21 Foreign 61 12 29 Current income tax provision 198 47 45 Deferred Federal 622 309 ( 104 ) State ( 22 ) 78 ( 90 ) Foreign 82 ( 9 ) ( 123 ) Deferred income tax provision (benefit) 682 378 ( 317 ) Provision for (benefit from) income taxes $ 880 $ 425 $ ( 272 ) Income (loss) before income taxes is comprised of the following: Year Ended December 31, 2022 2021 2020 United States $ 3,114 $ 1,529 $ ( 590 ) Foreign 522 179 ( 366 ) Income (loss) before income taxes $ 3,636 $ 1,708 $ ( 956 ) Deferred income tax assets, net is comprised of the following: As of December 31, 2022 2021 Deferred income tax assets: Net tax loss carryforwards $ 1,109 $ 1,480 Long-term operating lease liabilities 666 625 Accrued liabilities and deferred revenue 231 272 Tax credits 38 11 Depreciation and amortization 25 19 Provision for doubtful accounts 19 18 Other 167 100 Valuation allowance (a) ( 101 ) ( 167 ) Deferred income tax assets 2,154 2,358 Deferred income tax liabilities: Operating lease right-of-use assets 657 614 Depreciation and amortization 90 102 Prepaid expenses 24 23 Other 4 4 Deferred income tax liabilities 775 743 Deferred income tax assets, net $ 1,379 $ 1,615 __________ F-29 Table of Contents (a) T he valuation allowance of $ 101 million at December 31, 2022 relates to tax loss carryforwards and certain deferred tax assets of $ 97 million and $ 4 million, respectively. The valuation allowance of $ 167 million at December 31, 2021 relates to tax loss carryforwards and certain deferred tax assets of $ 163 million and $ 4 million, respectively. The valuation allowances will be reduced when and if we determine it is more likely than not that the related deferred income tax assets will be realized. The decrease in valuation allowance as compared to the year ended December 31, 2021 is primarily related to a release of valuation allowance for certain state net operating losses. Deferred income tax assets and liabilities related to vehicle programs are comprised of the following: As of December 31, 2022 2021 Deferred income tax assets: Depreciation and amortization $ 63 $ 80 Other 22 19 Deferred income tax assets 85 99 Deferred income tax liabilities: Depreciation and amortization 2,815 2,321 Other 24 20 Deferred income tax liabilities 2,839 2,341 Deferred income tax liabilities under vehicle programs, net $ 2,754 $ 2,242 At December 31, 2022, we had U.S. federal net operating loss carryforwards of approximately $ 3.6 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 our U.S. vehicles. Currently, we do not record valuation allowances on the majority of our U.S. federal tax loss carryforwards as there are adequate deferred tax liabilities that could be realized within the carryforward period. At December 31, 2022, we had foreign net operating loss carryforwards of approximately $ 1.1 billion, the majority of which has an indefinite utilization period. At December 31, 2022, we had undistributed earnings of certain foreign subsidiaries of approximately $ 1.2 billion that we have indefinitely reinvested, and on which we have 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 our effective income tax rate is as follows: Year Ended December 31, 2022 2021 2020 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 3.9 5.5 4.8 Changes in valuation allowances ( 1.3 ) ( 0.6 ) — Taxes on foreign operations at rates different than U.S. federal statutory rates 1.2 ( 2.0 ) 3.1 Stock-based compensation ( 0.5 ) ( 0.3 ) ( 0.1 ) Other non-deductible (non-taxable) items 0.4 0.6 ( 0.4 ) Other ( 0.5 ) 0.7 — 24.2 % 24.9 % 28.4 % F-30 Table of Contents The following is a tabular reconciliation of the gross amount of unrecognized tax benefits for the year: 2022 2021 2020 Balance, January 1 $ 58 $ 57 $ 54 Additions for tax positions related to current year 4 4 4 Additions for tax positions for prior years 3 3 — Reductions for tax positions for prior years ( 5 ) ( 3 ) ( 1 ) Settlements ( 5 ) — ( 3 ) Foreign currency translation ( 2 ) ( 3 ) 3 Balance, December 31 $ 53 $ 58 $ 57 We do not anticipate that total unrecognized tax benefits will change significantly in 2023. We are subject to taxation in the United States and various foreign jurisdictions. As of December 31, 2022, the 2007 through 2021 tax years generally remain subject to examination by the federal tax authorities. The 2012 through 2021 tax years generally remain subject to examination by various state tax authorities. In significant foreign jurisdictions, the 2012 through 2021 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, 2022, 2021 and 2020, if recognized, would affect our provision for (benefit from) income taxes. As of December 31, 2022, our unrecognized tax benefits were offset by tax loss carryforwards and other deferred tax assets in the amount of $ 24 million. The following table presents unrecognized tax benefits: As of December 31, 2022 2021 Unrecognized tax benefit in non-current income taxes payable (a) $ 33 $ 30 Accrued interest payable on potential tax liabilities (b) 31 29 __________ (a) Pursuant to the agreements governing the disposition of certain subsidiaries in 2006, we are entitled to indemnification for certain predisposition tax contingencies. As of December 31, 2022 and 2021, $ 13 million, in each period, of unrecognized tax benefits are related to tax contingencies for which we believe we are entitled to indemnification. (b) We recognize 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, 2022, 2021 and 2020, were not significant and were recognized as a component of the provision for (benefit from) income taxes . 10. Other Current Assets Other current assets consisted of: As of December 31, 2022 2021 Prepaid expenses $ 252 $ 205 Sales and use taxes 142 238 Other 112 95 Other current assets $ 506 $ 538 F-31 Table of Contents 11. Property and Equipment, net Property and equipment, net consisted of: As of December 31, 2022 2021 Land $ 59 $ 50 Buildings and leasehold improvements 507 525 Capitalized software 906 932 Furniture, fixtures and equipment 382 426 Projects in process 89 84 Buses and support vehicles 90 80 2,033 2,097 Less: Accumulated depreciation and amortization ( 1,439 ) ( 1,560 ) Property and equipment, net $ 594 $ 537 Depreciation and amortization expense relating to property and equipment during 2022, 2021 and 2020 was $ 181 million, $ 205 million and $ 218 million, respectively (including $ 115 million, $ 105 million and $ 113 million, respectively, of amortization expense relating to capitalized software). At December 31, 2022, we had payables related to property and equipment included in accounts payable and other current liabilities and in other non-current liabilities of $ 19 million and $ 1 million, respectively. At December 31, 2021, we had payables related to property and equipment included in accounts payable and other current liabilities and in other non-current liabilities of $ 20 million and $ 2 million, respectively. 12. Accounts Payable and Other Current Liabilities Accounts payable and other current liabilities consisted of: As of December 31, 2022 2021 Short-term operating lease liabilities $ 555 $ 496 Accounts payable 466 407 Accrued advertising and marketing 268 218 Accrued sales and use taxes 246 313 Accrued payroll and related 205 193 Deferred lease revenues – current 188 185 Public liability and property damage insurance liabilities – current 174 159 Other 445 418 Accounts payable and other current liabilities $ 2,547 $ 2,389 F-32 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, 2022 2021 4.125 % euro-denominated Senior Notes November 2024 $ 321 $ 341 4.500 % euro-denominated Senior Notes May 2025 268 284 4.750 % euro-denominated Senior Notes January 2026 375 398 5.750 % Senior Notes July 2027 732 728 4.750 % Senior Notes April 2028 500 500 5.375 % Senior Notes March 2029 600 600 Floating Rate Term Loan (a) August 2027 1,176 1,187 Floating Rate Term Loan (a) March 2029 725 — Other (b) 18 19 Deferred financing fees ( 44 ) ( 48 ) Total 4,671 4,009 Less: Short-term debt and current portion of long-term debt 27 19 Long-term debt $ 4,644 $ 3,990 _________ (a) The floating rate term loan is part of our senior revolving credit facility, which is secured by pledges of capital stock of certain our subsidiaries, and liens on substantially all of our 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 2029. In March 2022, we entered into a $ 750 million Floating Rate Term Loan due March 2029, at a price of 97 % of the aggregate principal amount, with interest paid monthly. The Term Loan bears interest at one-month Secured Overnight Financing Rate (“SOFR”) plus 350 basis points for an aggregate rate of 7.92 %. Floating Rate Term Loan due 2027. In February 2020, we amended our Floating Rate Term Loan and extended its maturity term to 2027. We 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 our outstanding 5.500 % Senior Notes due 2023. As of December 31, 2022, the loan bears interest at one-month LIBOR plus 1.75 %, for an aggregate rate of 6.14 %; however, we entered into an interest rate swap to hedge $ 700 million of our interest rate exposure related to the floating rate term loan at an aggregate rate of 4.75 %. Senior Notes 4.125 % euro-denominated Senior Notes due 2024. In September 2016, we issued € 300 million of 4.125 % euro-denominated Senior Notes due 2024 at par, with interest payable semi-annually. We have 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, we used the net proceeds from the offering primarily to redeem € 275 million of our outstanding 6.000 % euro-denominated Senior Notes due 2021. 4.500 % euro-denominated Senior Notes due 2025. In March 2017, we issued € 250 million of 4.500 % euro-denominated Senior Notes due 2025, at par, with interest payable semi-annually. We have 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, we used the net proceeds from the offering to redeem our outstanding € 175 million principal amount of 6.000 % euro-denominated Senior Notes due 2021 for € 180 million plus accrued interest. In June 2017, we used the remaining proceeds to redeem a portion of our Floating Rate Senior Notes due 2017. 4.750 % euro-denominated Senior Notes due 2026. In October 2018, we issued € 350 million of 4.750 % euro-denominated Senior Notes due 2026, at par, with interest payable semi-annually. We have the right to redeem these notes in whole or in part on or after September 30, 2021 at specified redemption prices plus F-33 Table of Contents accrued interest. In October 2018, we used the net proceeds from the offering to redeem our 5.125 % Senior Notes due June 2022 for $ 410 million plus accrued interest. 5.750 % Senior Notes due 2027. In July 2019, we issued $ 400 million of 5.750 % Senior Notes due July 2027, at par, with interest payable semi-annually. We used the net proceeds from the offering to redeem $ 400 million principal amount of our 5.500 % Senior Notes due April 2023. In August 2020, we issued $ 350 million of additional 5.750 % Senior Notes due July 2027, at 92 % of face value, under the indenture governing our existing 5.750 % Senior Notes. We used the proceeds from this offering to redeem the outstanding $ 100 million in aggregate principal amount of our 5.500 % Senior Notes due 2023, with the remainder being used for general corporate purposes. 4.750 % Senior Notes due 2028. In March 2021, we issued $ 500 million of 4.750 % Senior Notes du e April 2 028, at par, with interest paid semiannually. We have the right to redeem these notes in whole or in part at any time on or after April 1, 2024 at specified redemption prices plus accrued interest. Net proceeds, together with cash on hand, were used to redeem all of the outstanding 6.375 % Senior Notes due 2024 for $ 356 million plus accrued interest and a portion of our outstanding 5.250 % Senior Notes due 2025 for $ 142 million plus accrued interest. 5.375 % Senior Notes due 2029. In March 2021, we issued $ 600 million of 5.375 % Senior Notes due March 2029, at par, with interest paid semiannually. We have the right to redeem these notes in whole or in part at any time on or after March 1, 2024 at specified redemption prices plus accrued interest. Net proceeds, together with cash on hand, were used to redeem all of the outstanding 10.500 % Senior Secured Notes due 2025 for $ 599 million plus accrued interest. In connection with the debt amendments and repayments for the years ended December 31, 2021 and 2020, we record ed $ 136 million and $ 9 million in early extinguishment of debt costs, respectively. The 5.750 % Senior Notes, the 4.750 % Senior Notes and the 5.375 % Senior Notes are senior unsecured obligations of our Avis Budget Car Rental, LLC (“ABCR”) subsidiary, are guaranteed by us and certain of our domestic subsidiaries and rank equally in right of payment with all of our existing and future senior unsecured indebtedness. The 4.125 % euro-denominated Senior Notes, 4.500 % euro-denominated Senior Notes and 4.750 % euro-denominated Senior Notes are unsecured obligations of our Avis Budget Finance plc subsidiary, are guaranteed on a senior basis by us and certain of our domestic subsidiaries and rank equally with all of our existing senior unsecured debt. Debt Maturities The following table provides contractual maturities of our corporate debt at December 31, 2022: Year Amount 2023 $ 27 2024 346 2025 291 2026 396 2027 1,867 Thereafter 1,788 $ 4,715 F-34 Table of Contents Committed Credit Facilities And Available Funding Arrangements At December 31, 2022, the committed corporate credit facilities available to us and/or our subsidiaries were as follows: Total Capacity Outstanding Borrowings Letters of Credit Issued Available Capacity Senior revolving credit facility maturing 2026 (a) $ 2,000 $ — $ 966 $ 1,034 __________ (a) The senior revolving credit facility bears interest at one-month LIBOR plus 175 basis points and is part of our senior credit facilities, which include the floating rate term loan and the senior revolving credit facility, and which are secured by pledges of capital stock of certain of our subsidiaries, and liens on substantially all of our intellectual property and certain other real and personal property. Debt Covenants The agreements governing our indebtedness contain restrictive covenants, including restrictions on dividends paid to us by certain of our subsidiaries, the incurrence of additional indebtedness and/or liens by us and certain of our subsidiaries, acquisitions, mergers, liquidations, and sale and leaseback transactions. Our senior credit facility also contains a maximum leverage ratio requirement. As of December 31, 2022, we were in compliance with the financial covenants governing our indebtedness. 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, 2022 2021 Americas – Debt due to Avis Budget Rental Car Funding (a) $ 11,322 $ 8,889 Americas – Debt borrowings 598 612 International – Debt borrowings 1,700 1,757 International – Finance leases 176 177 Other 65 3 Deferred financing fees (b) ( 52 ) ( 48 ) Total $ 13,809 $ 11,390 __________ (a) Increase reflects additional borrowings principally to fund increases in our rental fleet. (b) Deferred financing fees related to Debt due to Avis Budget Rental Car Funding as of December 31, 2022 and 2021 were $ 47 million and $ 41 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 our wholly-owned subsidiary, 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 our rental car operations. By issuing debt through the Avis Budget Rental Car Funding program, we pay a lower rate of interest than if we had issued debt directly to third parties. Avis Budget Rental Car Funding is not consolidated, as we are not the “primary beneficiary” of Avis Budget Rental Car Funding. We determined that we are not the primary beneficiary because we do not have the obligation to absorb the potential losses or receive the benefits of Avis Budget Rental Car Funding’s activities since our only significant source of variability in the earnings, losses or cash flows of Avis Budget Rental Car Funding is exposure to our own creditworthiness, due to our 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 our Consolidated Balance Sheets. We also have an asset within Assets under vehicle programs on our Consolidated Balance Sheets which represents securities issued to us by Avis Budget Rental Car Funding. AESOP Leasing is F-35 Table of Contents consolidated, as we are the “primary beneficiary” of AESOP Leasing; as a result, the vehicles purchased by AESOP Leasing remain on our Consolidated Balance Sheets. We determined we are the primary beneficiary of AESOP Leasing, as we have 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, 2022, appro xim ate $ 13.2 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 our 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 our general credit. We periodically provide 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 our rental car subsidiaries and pledging its assets to secure the indebtedness. Because Avis Budget Rental Car Funding is not consolidated by us, its results of operations and cash flows are not reflected within our financial statements. In May 2021, AESOP issued $ 800 million of asset-backed notes with an expected final payment date of August 2026. In June 2021, AESOP issued $ 96 million, $ 105 million and $ 103 million of asset-backed notes with expected final payment dates of March 2024, September 2024 and August 2025, respectively. In November 2021, AESOP issued $ 650 million of asset-backed notes with an expected final payment date of February 2027. In April 2022, AESOP issued $ 660 million of asset-backed notes to investors with an expected final payment date of August 2027. In May 2022, AESOP issued $ 87 million, $ 68 million and $ 55 million of asset-backed notes with expected final payment dates of March 2025, March 2023 and September 2023, respectively. In June 2022, AESOP entered into $ 800 million of variable funding asset-backed notes to investors with a final payment date of September 2022. In July 2022, AESOP issued $ 389 million and $ 374 million of asset-backed notes to investors with expected final payment dates of February 2026 and February 2028, respectively. Following this issuance, amounts available under our $ 800 million variable funding asset-backed notes supplement entered into during June 2022 were reduced to zero . In November 2022, AESOP issued $ 500 million of asset-backed notes to investors with an expected final payment date of April 2026. We 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 4.07 % and 2.66 % as of December 31, 2022 and 2021 respectively. Debt borrowings . We finance the acquisition of vehicles used in our Canadian rental operations through a consolidated, bankruptcy remote special-purpose entity, which issues privately placed notes to investors and bank-sponsored conduits. We finance the acquisition of fleet for our 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 4.26 % and 2.64 % as of December 31, 2022 and 2021 respectively. International Debt borrowings . In EMEA we operate a € 1.7 billion European rental fleet securitization program, with maturity in 2024, which is used to finance fleet purchases for certain of our European operations. The International borrowings primarily represent floating rate notes and had a weighted average interest rate of 3.92 % and 1.66 % as of December 31, 2022 and 2021, respectively. Finance leases. We obtain a portion of our International vehicles under finance lease arrangements. For the years ended December 31, 2022 and 2021, the weighted average interest rate on these borrowings was 1.82 % and 1.25 % respectively. All finance leases are on a fixed repayment basis and interest rates are fixed at the contract date. F-36 Table of Contents Debt Maturities The following table provides the contractual maturities of our debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding, at December 31, 2022: Debt under Vehicle Programs (a) 2023 (b) $ 2,235 2024 (c) 5,485 2025 2,351 2026 2,124 2027 1,238 Thereafter 428 $ 13,861 __________ (a) Vehicle-backed debt primarily represents asset-backed securities. (b) Includes $ 0.4 billion of bank and bank-sponsored facilities. (c) Includes $ 2.4 billion of bank and bank-sponsored facilities. Committed Credit Facilities And Available Funding Arrangements The following table presents available funding under our debt arrangements related to our vehicle programs, including related party debt due to Avis Budget Rental Car Funding, at December 31, 2022: Total Capacity (a) Outstanding Borrowings (b) Available Capacity Americas – Debt due to Avis Budget Rental Car Funding $ 11,921 $ 11,322 $ 599 Americas – Debt borrowings 970 598 372 International – Debt borrowings 2,628 1,700 928 International – Finance leases 208 176 32 Other 65 65 — Total $ 15,792 $ 13,861 $ 1,931 __________ (a) Capacity is subject to maintaining sufficient assets to collateralize debt. (b) The outstanding debt is collateralized by vehicles and related assets of $ 13.0 billion for Americas - Debt due to Avis Budget Rental Car Funding; $ 1.0 billion for Americas - Debt borrowings; $ 2.6 billion for International - Debt borrowings; and $ 0.2 billion for International - Finance leases. Debt Covenants The agreements under our vehicle-backed funding programs contain restrictive covenants, including restrictions on dividends paid to us by certain of our subsidiaries and restrictions on indebtedness, mergers, liens, liquidations and sale and leaseback transactions, and in some cases also require compliance with certain financial requirements. As of December 31, 2022, we are not aware of any instances of non-compliance with any of the financial or restrictive covenants contained in the debt agreements under our vehicle-backed funding programs. F-37 Table of Contents 15. Commitments and Contingencies Contingencies In 2006, we completed the spin-offs of our Realogy (formally Realogy, now Anywhere Real Estate Inc.) and Wyndham subsidiaries. We do not believe that the impact of any resolution of pre-existing contingent liabilities in connection with the spin-offs should result in a material liability to us in relation to our consolidated financial position or liquidity, as Realogy and Wyndham each have agreed to assume responsibility for these liabilities. We are also named in litigation that is primarily related to the businesses of our former subsidiaries, including Realogy and Wyndham. We are entitled to indemnification from such entities for any liability resulting from such litigation. In November 2011, Jose Mendez v. Avis Budget Group Inc., et al. was filed in U.S. District Court for the District of New Jersey. The plaintiff seeks to represent a purported nationwide class and two sub-classes of certain renters of vehicles from our Avis and Budget subsidiaries from April 2007 through December 2015. The plaintiff seeks damages in connection with claims relating to our electronic toll service, including that administrative fees and toll charges were not properly disclosed to customers and/or were excessive. Plaintiff’s motion for class certification was approved by the Court in November 2017. The parties have entered into a settlement agreement and the Court has entered an order preliminarily approving the settlement. We have been named as a defendant in other purported consumer class action law suits, including a class action filed against us in Florida seeking damages in connection with a breach of contract claim and two purported class action suits filed against us in New Jersey, one related to fines and fees charged to car renters by us for violations incurred during the course of their rental and another related to ancillary charges at our Payless subsidiary. In the Florida lawsuit, the Court has entered an order preliminarily approving a proposed settlement. We are currently involved, and in the future may be involved, in claims and/or legal proceedings, including class actions, and governmental inquiries that are incidental to our vehicle rental and car sharing operations, including, among others, contract and licensee disputes, competition matters, employment and wage-and-hour claims, insurance and liability claims, intellectual property claims, business practice disputes and other regulatory, environmental, commercial and tax matters. Litigation is inherently unpredictable and, although we believe that our accruals are adequate and/or that we have valid defenses in these matters, unfavorable resolutions could occur. We estimate that the potential exposure resulting from adverse outcomes of current legal proceedings in which it is reasonably possible that a loss may be incurred could, in the aggregate, be up to approximately $ 40 million in excess of amounts accrued as of December 31, 2022. We do not believe that the impact should result in a material liability to us in relation to our consolidated financial condition or results of operations. Commitments to Purchase Vehicles We maintain agreements with vehicle manufacturers under which we have agreed to purchase approximately $ 6.7 billion of vehicles from manufacturers over the next 12 months, a $ 0.8 billion increase compared to December 31, 2021, financed primarily through the issuance of vehicle-backed debt and cash received upon the disposition of vehicles. Certain of these commitments are subject to the vehicle manufacturers satisfying their obligations under their respective repurchase and guaranteed depreciation agreements. Other Purchase Commitments In the normal course of business, we make 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, 2022, we had approximately $ 102 million of purchase obligations, which extend through 2027. Concentrations Concentrations of credit risk at December 31, 2022, include (i) risks related to our repurchase and guaranteed depreciation agreements with domestic and foreign car manufacturers and primarily with respect to receivables for program cars that have been disposed, but for which we have not yet received F-38 Table of Contents payment from the manufacturers and (ii) risks related to Realogy and Wyndham, including receivables of $ 27 million and $ 16 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 We maintain 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. Our asset retirement obligations, which are measured at discounted fair values, are primarily related to the removal of underground gasoline storage tanks at our rental facilities. The liability accrued for asset retirement obligations was $ 26 million and $ 28 million at December 31, 2022 and 2021, respectively. Standard Guarantees/Indemnifications In the ordinary course of business, we enter into numerous agreements that contain standard guarantees and indemnities whereby we agree 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 we could be required to make under these guarantees, nor are we 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 us, we maintains insurance coverage that mitigates our potential exposure. 16. Stockholders' Equity Cash Dividend Payments During 2022, 2021 and 2020, we did not declare or pay any cash dividends. Our ability to pay dividends to holders of our common stock is limited by our senior credit facility, the indentures governing our senior notes and our vehicle financing programs. Share Repurchases As of December 31, 2022, our Board of Directors authorized the repurchase of up to approximately $ 7.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded. During 2022, 2021 and 2020, we repurchased approximately 36 million shares of common stock at a cost of approximately $ 4.8 billion under the program. As of December 31, 2022, approximately $ 691 million of authorization remained available to repurchase common stock under this plan. Share Issuances On February 10, 2020, we announced we 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 our common stock at a price per share equal to the closing price of our common stock on February 7, 2020. We issued the common stock from treasury shares. F-39 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) Minimum Pension Liability Adjustment (c) Accumulated Other Comprehensive Income (Loss) Balance, January 1, 2020 $ 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 ) Other comprehensive income (loss) before reclassifications ( 35 ) 18 39 22 Amounts reclassified from accumulated other comprehensive income (loss) 11 14 7 32 Net current-period other comprehensive income (loss) ( 24 ) 32 46 54 Balance, December 31, 2021 16 ( 19 ) ( 130 ) ( 133 ) Other comprehensive income (loss) before reclassifications ( 46 ) 57 11 22 Amounts reclassified from accumulated other comprehensive income (loss) — 7 3 10 Net current-period other comprehensive income (loss) ( 46 ) 64 14 32 Balance, December 31, 2022 $ ( 30 ) $ 45 $ ( 116 ) $ ( 101 ) __________ 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 $ 114 million gain, net of tax, related to our hedge of our investment in euro-denominated foreign operations (See Note 20 – Financial Instruments). (a) For the years ended December 31, 2021 and 2020, the amounts were reclassified from accumulated other comprehensive income (loss) into restructuring and other related charges. (b) For the years ended December 31, 2022, 2021 and 2020, the amounts reclassified from accumulated other comprehensive income (loss) into corporate interest expense were $ 9 million ($ 7 million, net of tax), $ 17 million ($ 12 million, net of tax) and $ 9 million ($ 6 million, net of tax), respectively. For the years ended December 31, 2021 and 2020, the amounts reclassified from accumulated other comprehensive income (loss) into vehicle interest expense were $ 2 million ($ 2 million, net of tax). (c) For the years ended December 31, 2022, 2021 and 2020, amounts reclassified from accumulated other comprehensive income (loss) into selling, general and administrative expenses were $ 5 million ($ 3 million, net of tax), $ 9 million ($ 7 million, net of tax) and $ 9 million ($ 6 million, net of tax), respectively. 17. Related Party Transactions SRS Mobility Ventures, LLC In 2021, SRS Mobility Ventures, LLC acquired a 33 1/3% Class A Membership Interest in one of our subsidiaries at fair value of $ 37.5 million. SRS Mobility Ventures, LLC is an affiliate of our largest shareholder, SRS Investment Management, LLC. On September 1, 2022, through the issuance of Class B Preferred Voting Membership Interests, SRS Mobility Ventures, LLC increased their ownership in this subsidiary to 51 % at a fair value of $ 62 million. As a result, we deconsolidated our former subsidiary, Avis Mobility Ventures LLC (“AMV”), from our financial statements and now record our proportional share of the former subsidiary’s income or loss within other (income) expense, net in our Consolidated Statements of Operations as we do not have the ability to direct the significant activities of the former subsidiary and are therefore no longer primary beneficiary of the VIE. In accordance with ASC Topic 810-10-40, we must deconsolidate a subsidiary as of the date we cease to have a controlling interest in that subsidiary and recognize the gain or loss in net income at that time. The fair value of our retained investment was determined utilizing a discounted cash flow methodology based on various assumptions, including projections of future cash flows, which include forecast of future revenue and EBITDA. Upon deconsolidation, our former subsidiary had a net asset carrying amount of $ 49 million resulting in a gain of $ 10 million, which is reported within other (income) expense, net during the year ended December 31, 2022. We provide vehicles and related fleet services to AMV, as well as certain administrative services to support their operations. For the year ended December 31, 2022, we recognized $ 7 million of income related to F-40 Table of Contents these services within other (income) expense, net. At December 31, 2022, we had receivables from AMV of $ 6 million and a net investment in vehicle finance leases of $ 36 million. The carrying amount of our equity investment was approximately $ 49 million at December 31, 2022 and is recorded within other non-current assets in our Consolidated Balance Sheet. For the year ended December 31, 2022, we recorded losses of $ 10 million within other (income) expense, net related to our equity investment. SRS Investment Management LLC On December 23, 2022, we also entered into an amended and restated cooperation agreement with SRS Investment Management LLC and certain of its affiliates. 18. Stock-Based Compensation Our 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 us and our subsidiaries. The maximum number of shares reserved for grant of awards under the plan is 22.5 million , with approximately 4.1 million shares available as of December 31, 2022. We typically settle 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. 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, we 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, 2022 and 2021, we did not issue any stock unit awards containing a market condition. Expected volatility of stock price 91 % Risk-free interest rate 0.18 % Valuation period 3 years Dividend yield — % F-41 Table of Contents 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, 2022 671 $ 39.39 Granted (a) 180 172.34 Vested (b) ( 360 ) 37.35 Forfeited ( 40 ) 61.80 Outstanding and expected to vest at December 31, 2022 (c) 451 $ 92.06 1.1 $ 74 Performance-based and market-based RSUs Outstanding at January 1, 2022 886 $ 35.40 Granted (a) 99 193.48 Vested (b) ( 254 ) 34.24 Forfeited ( 40 ) 49.75 Outstanding at December 31, 2022 691 $ 57.56 0.9 $ 113 Outstanding and expected to vest at December 31, 2022 (c) 683 $ 55.99 0.9 $ 112 __________ (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 and market-based RSUs granted in 2021 was $ 65.23 and $ 62.27 , respectively, and the weighted-average fair value of time-based RSUs and performance-based RSUs granted in 2020 was $ 23.14 and $ 21.06 , respectively. (b) The total fair value of RSUs vested during 2022, 2021 and 2020 was $ 22 million, $ 17 million and $ 19 million, respectively. (c) Aggregate unrecognized compensation expense related to time-based RSUs and performance-based and market-based RSUs amounted to $ 49 million and will be recognized over a weighted average vesting period of 1.0 year. Non-employee Directors Deferred Compensation Plan We grant stock awards on an annual 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. During 2022, 2021 and 2020, we granted 2,500 , 8,800 and 34,000 awards, respectively, to non-employee directors. Stock-Compensation Expense During 2022, 2021 and 2020, we recorded stock-based compensation expense of $ 25 million ($ 17 million, net of tax), $ 30 million ($ 21 million, net of tax) and $ 9 million ($ 7 million, net of tax), respectively. 19. Employee Benefit Plans Defined Contribution Savings Plans We sponsor several defined contribution savings plans in the United States and certain foreign subsidiaries that provide certain of our eligible employees an opportunity to accumulate funds for retirement. We match portions of the contributions of participating employees on the basis specified by the plans. Our contributions to these plans were $ 26 million, $ 22 million and $ 23 million during 2022, 2021 and 2020, respectively. F-42 Table of Contents Defined Benefit Pension Plans We sponsor 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, 2022 2021 2020 Service cost (a) $ 5 $ 6 $ 5 Interest cost (b) 16 12 17 Expected return on plan assets (b) ( 37 ) ( 35 ) ( 31 ) Amortization of unrecognized amounts (b) 5 9 9 Net periodic (benefit) cost $ ( 11 ) $ ( 8 ) $ — __________ (a) For the years ended December 31, 2022, 2021, and 2020, $ 4 million was included in operating expenses, in each period, and $ 1 million, $ 2 million and $ 1 million was included in selling, general and administrative expenses, respectively. (b) Included in selling, general and administrative expenses. We use a measurement date of December 31 for our pension plans. The funded status of the pension plans were as follows: As of December 31, Change in Benefit Obligation 2022 2021 Benefit obligation at end of prior year $ 881 $ 926 Service cost 5 6 Interest cost 16 12 Actuarial (gain) loss ( 247 ) ( 17 ) Plan amendments ( 1 ) ( 3 ) Currency translation adjustment ( 51 ) ( 12 ) Net benefits paid ( 28 ) ( 31 ) Benefit obligation at end of current year $ 575 $ 881 Change in Plan Assets Fair value of assets at end of prior year $ 772 $ 722 Actual return on plan assets ( 196 ) 71 Employer contributions 12 16 Currency translation adjustment ( 46 ) ( 5 ) Net benefits paid ( 28 ) ( 32 ) Fair value of assets at end of current year $ 514 $ 772 F-43 Table of Contents Amounts recognized in the statement of financial position consist of the following: As of December 31, Funded Status 2022 2021 Classification of net balance sheet assets (liabilities): Non-current assets $ 36 $ 50 Current liabilities ( 4 ) ( 5 ) Non-current liabilities ( 93 ) ( 154 ) Net funded status $ ( 61 ) $ ( 109 ) The following assumptions were used to determine pension obligations and pension costs for the principal plans in which our employees participated: For the Year Ended December 31, U.S. Pension Benefit Plans 2022 2021 2020 Discount rate: Net periodic benefit cost 2.67 % 2.25 % 3.10 % Benefit obligation 5.18 % 2.67 % 2.25 % Long-term rate of return on plan assets 6.25 % 6.75 % 7.00 % Non-U.S. Pension Benefit Plans Discount rate: Net periodic benefit cost 1.83 % 1.40 % 1.95 % Benefit obligation 4.79 % 1.83 % 1.40 % Long-term rate of return on plan assets 4.39 % 3.71 % 3.80 % To select discount rates for our defined benefit pension plans, we use 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. We use the average yields of the hypothetical portfolios as a discount rate benchmark. Our expected rate of return on plan assets of 6.25 % and 4.39 % 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 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, 2022 and 2021, plans with projected benefit obligations in excess of plan assets had projected benefit obligations of $ 332 million and $ 453 million, respectively, and plan assets of $ 235 million and $ 297 million, respectively. As of December 31, 2022 and 2021, plans with accumulated benefit obligations in excess of plan assets had accumulated benefit obligations of $ 329 million and $ 453 million, respectively, and plan assets of $ 235 million and $ 303 million, respectively. The accumulated benefit obligation for all plans was $ 571 million and $ 872 million as of December 31, 2022 and 2021, respectively. We expect to contribute approximately $ 1 million to the plans in 2023. Our 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 our financial statements. The defined benefit pension plans’ investment goals and objectives are managed by us or Company-appointed and member-appointed trustees with consultation from independent investment advisors. While the objectives may vary slightly by country and jurisdiction, collectively we seek to produce returns on pension plan investments, which are based on levels of liquidity and investment risk that we believe 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 F-44 Table of Contents 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. We believe 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, we allocate 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 35 %- 55 % 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 35 %- 55 % 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 5 %- 15 % of the pl ans’ assets. The following table presents the defined benefit pension plans’ assets measured at fair v alue: As of December 31, 2022 Asset Class Level 1 Level 2 Level 3 Total Cash equivalents and short-term investments $ 18 $ 6 $ — $ 24 U.S. equities 69 19 — 88 Non-U.S. equities 39 30 — 69 Government bonds — 2 — 2 Corporate bonds 126 48 — 174 Other assets 2 101 54 157 Total assets $ 254 $ 206 $ 54 $ 514 __________ For the year ended December 31, 2022, we purchased and classified $ 54 million of investments as Level 3. As of December 31, 2021 Asset Class Level 1 Level 2 Level 3 Total Cash equivalents and short-term investments $ 14 $ 48 $ — $ 62 U.S. equities 115 45 — 160 Non-U.S. equities 56 89 — 145 Government bonds 6 11 — 17 Corporate bonds 134 51 — 185 Other assets 5 152 46 203 Total assets $ 330 $ 396 $ 46 $ 772 __________ For the year ended December 31, 2021, we purchased and classified $ 46 million of investments as Level 3. We estimate that future benefit payments from plan assets will be $ 30 million , $ 31 million, $ 32 million, $ 33 million, $ 34 million and $ 183 million for 2023, 2024, 2025, 2026, 2027 and 2028 to 2032, respectively. F-45 Table of Contents Multiemployer Plans We contribute to a number of multiemployer plans under the terms of collective-bargaining agreements that cover a portion of our 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 we elect to stop participating in a multiemployer plan, we may be required to contribute to such plan an amount based on the under-funded status of the plan; and (iv) we have no involvement in the management of the multiemployer plans’ investments. For the year ended December 31, 2022, we contributed $ 8 million and for the years ended December 31, 2021 and 2020, we contributed $ 7 million, in each period, to multiemployer plans. 20. Financial Instruments Risk Management Currency Risk . We use currency exchange contracts to manage our exposure to changes in currency exchange rates associated with certain of our non-U.S.-dollar denominated receivables and forecasted royalties, forecasted earnings of non-U.S. subsidiaries and forecasted non-U.S.-dollar denominated acquisitions. We primarily hedge a portion of our current-year currency exposure to the Australian, Canadian and New Zealand dollars, the euro and the British pound sterling. The majority of forward contracts do not qualify for hedge accounting treatment. The fluctuations in the value of these forward contracts do, however, largely offset the impact of changes in the value of the underlying risk they economically hedge. Forward contracts used to hedge forecasted third-party receipts and disbursements up to 12 months are designated and do qualify as cash flow hedges. We have designated our euro-denominated notes as a hedge of our investment in euro-denominated foreign operations. The estimated net amount of existing gains or losses we expect to reclassify from accumulated other comprehensive income (loss) to earnings for cash flow and net investment hedges over the next 12 months is not material. Interest Rate Risk . We use various hedging strategies including interest rate swaps and interest rate caps to create what we deem an appropriate mix of fixed and floating rate assets and liabilities. We use interest rate swaps and interest rate caps to manage the risk related to our floating rate corporate debt and our floating rate vehicle-backed debt. We record the changes in the fair value of our cash flow hedges to other comprehensive income (loss), net of tax, and subsequently reclassify these amounts into earnings in the period during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item. We record the gains or losses related to freestanding derivatives, which are not designated as a hedge for accounting purposes, currently in earnings and are presented in the same line of the income statement expected for the hedged item. We estimate that approximately $ 16 million of gain currently recorded in accumulated other comprehensive income (loss) will be recognized in earnings over the next 12 months. Commodity Risk. We periodically enter into derivative commodity contracts to manage our exposure to changes in the price of gasoline. These instruments were designated as freestanding derivatives and the changes in fair value are recorded in earnings and are presented in the same line of the income statement expected for the hedged item. Credit Risk and Exposure . We are exposed to counterparty credit risks in the event of nonperformance by counterparties to various agreements and sales transactions. We manage such risk by evaluating the financial position and creditworthiness of such counterparties and by requiring collateral in certain instances in which financing is provided. We mitigate counterparty credit risk associated with our derivative contracts by monitoring the amount for which we are at risk with each counterparty, periodically evaluating counterparty creditworthiness and financial position, and where possible, dispersing our risk among multiple counterparties. There were no significant concentrations of credit risk with any individual counterparty or groups of counterparties at December 31, 2022 or 2021, other than (i) risks related to our repurchase and guaranteed depreciation agreements with domestic and foreign car manufacturers, and primarily with respect to F-46 Table of Contents receivables for program cars that were disposed but for which we have 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 we are a guarantor. Concentrations of credit risk associated with trade receivables are considered minimal due to our diverse customer base. We do 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. We held derivative instruments with absolute notional values as follows: As of December 31, 2022 2021 Foreign exchange contracts $ 1,160 $ 1,655 Interest rate caps (a) 14,219 11,900 Interest rate swaps 1,450 1,450 __________ (a) Represents $ 9.8 billion of interest rate caps sold, partially offset by approximately $ 4.4 billion of interest rate caps purchased at December 31, 2022 and $ 7.2 billion of interest rate caps sold, partially offset by approximately $ 4.7 billion of interest rate caps purchased at December 31, 2021. These amounts exclude $ 6.2 billion and $ 3.0 billion of interest rate caps purchased by our Avis Budget Rental Car Funding subsidiary at December 31, 2022 and 2021, respectively. Fair values (Level 2) of derivative instruments are as follows: As of December 31, 2022 As of December 31, 2021 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) $ 61 $ — $ 2 $ 27 Derivatives not designated as hedging instruments Foreign exchange contracts (b) 4 6 7 10 Interest rate caps (c) 46 111 11 15 Total $ 111 $ 117 $ 20 $ 52 __________ Amounts in this table exclude derivatives issued by Avis Budget Rental Car Funding, as it is not consolidated by us; however, certain amounts related to the derivatives held by Avis Budget Rental Car Funding are included within accumulated other comprehensive income (loss), as discussed in Note 16 – Stockholders' Equity. (a) Included in other non-current assets or other non-current liabilities. (b) Included in other current assets or other current liabilities. (c) Included in assets under vehicle programs or liabilities under vehicle programs. F-47 Table of Contents The effects of derivatives recognized in our Consolidated Financial Statements are as follows: Year Ended December 31, 2022 2021 2020 Financial instruments designated as hedging instruments (a) Interest rate swaps (b) $ 64 $ 32 $ ( 31 ) Euro-denominated notes (c) 44 56 ( 67 ) Financial instruments not designated as hedging instruments (d) Foreign exchange contracts (e) 36 ( 3 ) ( 5 ) Interest rate caps (f) ( 1 ) ( 1 ) — Commodity contracts (g) — — ( 6 ) Total $ 143 $ 84 $ ( 109 ) __________ (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, 2022, included a $ 39 million gain in interest expense and a $ 3 million loss in operating expenses. For the year ended December 31, 2021, included a $ 2 million loss in interest expense and a $ 1 million loss in operating expenses. For the year ended December 31, 2020, included a $ 3 million loss in interest expense and a $ 2 million loss in operating expenses. (f) Primarily included in vehicle interest, net. (g) Included in operating expenses. Debt Instruments The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows: As of December 31, 2022 As of December 31, 2021 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Corporate debt Short-term debt and current portion of long-term debt $ 27 $ 26 $ 19 $ 18 Long-term debt 4,644 4,411 3,990 4,153 Debt under vehicle programs Vehicle-backed debt due to Avis Budget Rental Car Funding $ 11,275 $ 10,848 $ 8,848 $ 9,009 Vehicle-backed debt 2,423 2,422 2,528 2,559 Interest rate swaps and interest rate caps (a) 111 111 14 14 ___________ (a) Derivatives in liability position. 21. Segment Information Our chief operating decision-maker assesses performance and allocates resources based upon the separate financial information of our operating segments. In identifying our reportable segments, we also consider the nature of services provided by our operating segments, the geographical areas in which the segments operate and other relevant factors. We aggregate certain of our operating segments into our reportable segments. Management evaluates the operating results of each of our reportable segments based upon revenues and “Adjusted EBITDA,” which we define as income from continuing operations before non-vehicle related depreciation and amortization; any impairment charges; restructuring and other related charges; early extinguishment of debt costs; non-vehicle related interest; transaction-related costs, net; charges for unprecedented personal-injury and other legal matters, net, which includes amounts recorded in excess of $ 5 million related to class action lawsuits; non-operational charges related to shareholder activist activity, which include third party advisory, legal and other professional fees; COVID-19 charges, net; other (income) F-48 Table of Contents expense, net; and income taxes. We revised our definition of Adjusted EBITDA to exclude other (income) expense, net. We did not revise prior years' Adjusted EBITDA because there were no other charges similar in nature. We believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our operating businesses and in comparing our results from period to period. We also believe that Adjusted EBITDA is useful to investors because it allows them to assess our results of operations and financial condition on the same basis that management uses internally. Our presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies. Year Ended December 31, 2022 Americas International Corporate and Other (a) Total Revenues $ 9,474 $ 2,520 $ — $ 11,994 Vehicle depreciation and lease charges, net 414 414 — 828 Vehicle interest, net 348 54 — 402 Adjusted EBITDA 3,660 560 ( 87 ) 4,133 Non-vehicle depreciation and amortization 141 66 18 225 Assets exclusive of assets under vehicle programs 5,798 2,402 299 8,499 Assets under vehicle programs 14,269 3,159 — 17,428 Capital expenditures (excluding vehicles) 117 33 96 246 __________ (a) Primarily represents unallocated corporate expenses and receivables from our former subsidiaries . Year Ended December 31, 2021 Americas International Corporate and Other (a) Total Revenues $ 7,557 $ 1,756 $ — $ 9,313 Vehicle depreciation and lease charges, net 851 346 — 1,197 Vehicle interest, net 258 55 — 313 Adjusted EBITDA 2,364 118 ( 71 ) 2,411 Non-vehicle depreciation and amortization 178 84 10 272 Assets exclusive of assets under vehicle programs 5,746 2,716 119 8,581 Assets under vehicle programs 11,437 2,582 — 14,019 Capital expenditures (excluding vehicles) 74 26 8 108 __________ (a) Primarily represents unallocated corporate expenses and receivables from our former subsidiaries. F-49 Table of Contents Year Ended December 31, 2020 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. Provided below is a reconciliation of Adjusted EBITDA to income (loss) before income taxes. For the Year Ended December 31, 2022 2021 2020 Adjusted EBITDA $ 4,133 $ 2,411 $ ( 175 ) Less: Non-vehicle related depreciation and amortization (a) 235 279 286 Interest expense related to corporate debt, net Interest expense 250 218 231 Early extinguishment of debt — 136 9 COVID-19 charges (b) ( 9 ) ( 2 ) 122 Restructuring and other related charges 19 64 118 Non-operational charges related to shareholder activist activity (c) — 3 8 Unprecedented personal-injury and other legal matters, net (d) 1 — 4 Transaction-related costs, net 8 5 3 Other (income) expense, net ( 7 ) — — Income (loss) before income taxes $ 3,636 $ 1,708 $ ( 956 ) __________ (a) Inc ludes amortization of intangible assets recognized in purchase accounting of $ 43 million in 2022, $ 66 million in 2021 and $ 66 million in 2020. Includes operating expenses in our Consolidated Statements of Operations related to cloud computing costs of $ 10 million and $ 7 million in 2022 and 2021, respectively. (b) The following table presents the unusual, direct and incremental costs due to the COVID-19 pandemic: 2022 2021 Minimum annual guaranteed rent in excess of concession fees, net $ ( 9 ) $ ( 2 ) Vehicles damaged in overflow parking lots, net of insurance proceeds — ( 7 ) Other charges — 7 Operating expenses $ ( 9 ) $ ( 3 ) Selling, general and administrative expenses — 1 COVID-19 charges, net $ ( 9 ) $ ( 2 ) (c) Reported within selling, general and administrative expenses in our Consolidated Statements of Operations . (d) Reported within operating expenses on our Consolidated Statements of Operations. F-50 Table of Contents The geographic segment information provided below is classified based on the geographic location of our subsidiaries. United States All Other Countries Total 2022 Revenues $ 8,975 $ 3,019 $ 11,994 Assets exclusive of assets under vehicle programs 5,622 2,877 8,499 Assets under vehicle programs 13,514 3,914 17,428 Net long-lived assets 1,386 944 2,330 2021 Revenues $ 7,254 $ 2,059 $ 9,313 Assets exclusive of assets under vehicle programs 5,575 3,006 8,581 Assets under vehicle programs 10,915 3,104 14,019 Net long-lived assets 1,328 1,041 2,369 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 22. Subsequent Event In January 2023, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued $ 850 million of asset-backed notes to investors with a weighted average interest rate of 5.34 %. In February 2023, our Board of Directors approved a $ 1 billion increase in repurchase authorization to our Stock Repurchase Program. ***** F-51 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, 2022 $ 84 $ 91 $ ( 3 ) $ ( 86 ) $ 86 2021 60 107 ( 2 ) ( 81 ) 84 2020 52 73 3 ( 68 ) 60 Tax Valuation Allowance: Year Ended December 31, 2022 $ 169 $ ( 63 ) $ ( 3 ) $ — $ 103 2021 207 ( 35 ) ( 3 ) — 169 2020 214 ( 1 ) ( 6 ) — 207 __________ (a) Primarily 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 17, 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 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, governing the 4.125% Senior Notes due 2024 (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). 4.2 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, governing the 4.50% Senior Notes due 2025 (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). 4.3 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, governing the 4.75% Senior Notes due 2026 (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). 4.4 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, governing the 5.75% Senior Notes due 2027 (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). 4.5 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). 4.6 Indenture, dated as of March 1, 2021, by and among Avis Budget Car Rental, LLC and Avis Budget Finance, Inc., as issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, governing the 5.375% Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K , dated March 1, 2021). 4.7 Indenture, dated as of March 23, 2021, by and among Avis Budget Car Rental, LLC and Avis Budget Finance, Inc., as issuers, the guarantors party thereto and Deutsche Bank Trust Company Americas, as trustee, governing the 4.75% Senior Notes due 2028 (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K , dated March 23, 2021). 4.8 Description of the Company’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (Incorporated by reference to Exhibit 4.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, dated February 17, 2022). 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 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). † 10.3 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). † 10.4 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). † 10.5 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). † 10.6 Offer Letter, dated February 4, 2021, between Veresh Sita and Avis Budget Group, Inc. (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K, dated February 17, 2022). † 10.7 Separation Agreement, dated April 19, 2022, between Veresh Sita and Avis Budget Group, Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated April 22, 2022). H-1 Table of Contents 10.8 Avis Budget Group, Inc. Executive Severance Pay Plan for Grade A and B Employees and Summary Plan Description ( I ncorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K , dated December 14, 2020). † 10.9 Fourth Amended and Restated Cooperation Agreement, dated as of December 23, 2022, 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 December 27, 2022). 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 Amendment to the Avis Budget Group, Inc. Amended and Restated Equity and Incentive Plan dated October 26, 2021 (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, dated November 2, 2021).† 10.12 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).† 10.13 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).† 10.14 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).† 10.15 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).† 10.16 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).† 10.17 Amendment No. 1 dated as of December 8, 2022 to the Avis Budget Group, Inc. Non-Employee Directors Deferred Compensation Plan, amended and restated as of January 1, 2019. † 10.18 Avis Budget Group, Inc. Supplemental Savings Plan, amended and restated as of January 1, 2023. † 10.19 Avis Budget Group, Inc. Savings Restoration Plan, amended and restated as of November 1, 2008 (Incorporated by reference to Exhibit 10. 1 8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, dated February 26, 2009).† 10.20 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).† 10.21 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). 10.22 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 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). 10.25 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). 10.26 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). 10.27 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). 10.28 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). H-2 Table of Contents 10.29 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). 10.30 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). 10.31 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). 10.32 Fourth Amendment, dated as of July 28, 2022, 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 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022, dated November 1, 2022) . 10.33 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). 10.34 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). 10.35 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). 10.36 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). 10.37 Fourth Amendment, dated as of July 28, 2022, between 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 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022, dated November 1, 2022). 10.38 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). 10.39 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 June 3, 2004 (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K , dated January 20, 2006). 10.40 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). 10.41 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). 10.42 Fifth Amendment, dated as of July 28, 2022, 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 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022, dated November 1, 2022). 10.43 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). H-3 Table of Contents 10.44 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). 10.45 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). 10.46 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). 10.47 Fifth Amendment, dated as of July 28, 2022, 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 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022, dated November 1, 2022). 10.48 AESOP I Operating Sublease Agreement dated as of March 26, 2013 between Zipcar, Inc., as Sublessee and Avis Budget Car Rental, LLC, as Sublessor (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). 10.49 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). 10.50 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). 10.51 Fifth Amended and Restated Series 2010-6 Supplement, dated as of April 14, 2022, by and among Avis Budget Rental Car Funding (AESOP) LLC, as Issuer, Avis Budget Car Rental, LLC, as Administrator, JPMorgan Chase Bank, N.A., as Administrative Agent, the Non-Conduit Purchasers, the CP Conduit Purchasers, the Committed Note Purchasers, the APA Banks and the Funding Agents named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee and as Series 2010-6 Agent (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated April 19, 2022). 10.52 Third Amended and Restated Series 2015-3 Supplement, dated as of April 14, 2022, by and among Avis Budget Rental Car Funding (AESOP) LLC, as Issuer, Avis Budget Car Rental, LLC, as Administrator, JPMorgan Chase Bank, N.A., as Administrative Agent, the Non-Conduit Purchasers, the CP Conduit Purchasers, the Committed Note Purchasers, the APA Banks and the Funding Agents named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee and as Series 2015-3 Agent (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated April 19, 2022). 10.53 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). 10.54 Amended and Restated Series 2017-2 Supplement, dated as of May 31, 2022, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2017-2 Agent (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, dated June 10, 2022). 10.55 Amended and Restated Series 2018-1 Supplement, dated as of May 31, 2022, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2018-1 Agent (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, dated June 10, 2022). 10.56 Amended and Restated Series 2018-2 Supplement, dated as of June 18, 2021, 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 June 23, 2021). 10.57 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). 10.58 Amended and Restated Series 2019-2 Supplement, dated as of June 18, 2021 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 10.2 to the Company’s Current Report on Form 8-K dated June 23, 2021). H-4 Table of Contents 10.59 Amended and Restated Series 2019-3 Supplement, dated as of May 26, 2022, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2019-3 Agent (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated June 10, 2022). 10.60 Amended and Restated Series 2020-1 Supplement, dated as of June 18, 2021, 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 10.3 to the Company’s Current Report on Form 8-K , dated June 23, 2021). 10.61 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). 10.62 Series 2021-1 Supplement dated as of May 18, 2021, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2021-1 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K , dated May 21, 2021). 10.63 Series 2021-2 Supplement, dated as of November 17, 2021, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2021-2 Agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K , dated November 19, 2021). 10.64 Series 2022-1 Supplement, dated as of April 14, 2022, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2022-1 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated April 19, 2022). 10.65 Series 2022-2 Supplement, dated as of June 7, 2022, between Avis Budget Rental Car Funding (AESOP) LLC, Avis Budget Car Rental, LLC, as Administrator, JPMorgan Chase Bank, N.A., as Administrative Agent, the Non-Conduit Purchasers, the CP Conduit Purchasers, the Committed Note Purchasers, the APA Banks and the Funding Agents named therein, and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2022-2 Agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 10, 2022). 10.66 Series 2022-3 Supplement, dated as of July 21, 2022, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2022-3 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated July 22, 2022). 10.67 Series 2022-4 Supplement, dated as of July 21, 2022, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2022-4 Agent (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated July 22, 2022). 10.68 Series 2022-5 Supplement, dated as of November 29, 2022, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2022-5 Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated December 2 , 2022). 10.69 Series 2023-1 Supplement, dated as of January 17, 2023, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2023-1 Agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated January 20, 2023). 10.70 Series 2023-2 Supplement, dated as of January 17, 2023, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2023-2 Agent (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated January 20, 2023). 10.71 Sixth Amended and Restated Credit Agreement, dated as of July 9, 2021, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, Avis Budget Group, Inc., the subsidiary borrowers from time to time party thereto, the financial institutions from time to time party thereto JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K , dated July 13, 2021). 10.72 First Amendment, dated as of March 16, 2022, to the Sixth Amended and Restated Credit Agreement, dated as of July 9, 2021, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, Avis Budget Group, Inc., the subsidiary borrowers from time to time party thereto, the financial institutions from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated March 25, 2022). 10.73 Second Amendment, dated as of March 24, 2022, to the Sixth Amended and Restated Credit Agreement, dated as of July 9, 2021, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, Avis Budget Group, Inc., the subsidiary borrowers from time to time party thereto, the financial institutions from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated March 25, 2022). 10.74 Third Amendment, dated as of July 28, 2022, to the Sixth Amended and Restated Credit Agreement, dated as of July 9, 2021, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, as borrower, Avis Budget Group, Inc., the subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022, dated November 1, 2022). 10.75 Offer Letter, dated May 17, 2022, between Ravi Simhambhatla and Avis Budget Group, Inc.† H-5 Table of Contents 10.76 Fourth Amendment, dated as of February 6, 2023 , to the Sixth Amended and Restated Credit Agreement, dated as of July 9, 2021, among Avis Budget Holdings, LLC, Avis Budget Car Rental, LLC, as borrower, Avis Budget Group, Inc., the subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto . 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. 104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, formatted as Inline XBRL and contained in Exhibit 101. ____________________ * 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. 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