What changed in this filing

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Item 1. Business

2025-02-14 compared with 2024-02-16 · 50 added, 72 removed, 265 unchanged (32% of the section changed)

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On average, our global rental fleet totaled approximately 695,000 vehicles in 2024.

We completed nearly 39 million vehicle rental transactions worldwide and generated total revenues of approximately $12 billion during 2023.

We completed over 38 million vehicle rental transactions worldwide and generated total revenues of approximately $11.8 billion during 2024.

Our brands and mobility solutions have an extended global reach with approximately 10,250 rental locations throughout the world, including approximately 3,800 locations operated by our licensees.

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Additional discussion of our reportable segments is included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 21 – Segment Information to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

For 2024, we expect our strategy to continue to primarily focus on customer experience and costs to strengthen our Company, maximize profitability, and deliver stakeholder value.

To execute our strategy, we expect to continue to leverage marketing and invest in technology and infrastructure to support our vehicle related rentals.

With respect to costs, we aim to achieve operational excellence and invest strategically to lower costs over the long term.

For customer experience, we seek to enhance the end to end customer journey by leveraging technology to, among other things, streamline reservations, and modernize the pick-up, exit, on rent and return experiences.

For 2025, we expect our strategy to focus on transforming key parts of our business through technology, system enhancements and data, particularly with respect to customer experience, revenue generation and costs.

We believe this strategy, together with a change in fourth quarter 2024 in our fleet strategy to accelerate certain fleet rotations (as discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in Part II, Item 7), will continue to strengthen our Company, maximize profitability, and deliver stakeholder value.

With respect to customer experience, our aim will continue to be to deliver a superior customer journey.

For revenue, we will focus on optimizing mix and marketing, and for costs, we plan to implement centers of excellence and develop new tools and capabilities to increase margin.

OUR BRANDS AND OPERATIONS

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We believe that each of our brands is positioned to be embraced by different target customers, and we see benefits and savings from our brands sharing some of the same facilities, systems, and administrative infrastructure.

In addition, we are able to recognize benefits as a result of complementary demand patterns with commercial rentals occurring primarily

on business days and leisure rentals occurring primarily on holidays and weekends.

We also operate the Payless and Apex brands in the value segment of the car rental industry, augmenting our Avis, Budget and Zipcar brands.

In addition, our Maggiore and Morini Rent brands in Italy, FranceCars brand in France and Turiscar brand in Portugal further extend our offerings.

In addition, we are able to recognize benefits as a result of complementary demand patterns with commercial rentals occurring primarily on business days and leisure rentals occurring primarily on holidays and weekends.

We also operate the Payless and Apex brands in the value segment of the car rental industry.

In addition, we further extend our offerings through our AmicoBlu, Maggiore, and Morini Rent brands in Italy;

FranceCars brand in France, ACL Hire and McNicoll Hire brands in the UK;

and Turiscar and Turisprime brands in Portugal.

The following graphs present the approximate composition of our revenues in 2024.

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The Avis brand provides high-quality vehicle rental and other mobility solutions at price points generally above non-branded and value-branded vehicle rental companies and serves the premium commercial and leisure segments of the travel industry.

In 2024, our Company-operated Avis locations generated total revenues of approximately $6.8 billion.

The following graphs present the approximate composition of our Avis revenues in 2024.

We also license the Avis brand to independent commercial owners who operate approximately half of our locations worldwide and generally pay royalty fees to us based on a percentage of applicable revenues.

In 2024, these royalty fees totaled approximately 1% of our Avis revenues.

We operate or license Avis vehicle rental locations at virtually all of the largest commercial airports and cities in the world.

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* Certain locations support multiple brands.

In 2023, our Company-operated Avis locations generated total revenues of approximately $6.8 billion.

The following graphs present the approximate composition of our Avis revenues in 2023.

In 2023, these royalty fees totaled approximately 1% of our Avis revenues.

We offer Avis customers a variety of premium services, including:

• the Avis mobile application, which allows customers a unique and innovative way to control many elements of their rental experience via their mobile devices without the need to visit the rental counter.

The Avis mobile application also allows customers to track Avis shuttle buses to rental locations, find their vehicle, and locate nearby gas stations and parking facilities;

• Avis Preferred , our frequent renter rewards program that offers counter bypass at major airport locations;

• invited or earned customer status levels allowing for upgrades and counter bypass;

• Avis QuickPass , a feature on the Avis mobile application that allows customers to bypass the counter.

In many United States locations, QuickPass also allows customers to choose, exchange or upgrade their car upon arrival and utilize a unique code to exit via our automated Express Exit for a completely contactless rental experience;

In many United States locations, the application also allows customers to choose, exchange or upgrade their vehicles upon arrival and utilize a unique code to exit via our automated Express Exit for a completely contactless rental experience.

The application also allows customers to track Avis shuttle buses to rental locations, find their vehicle, and locate nearby gas stations and parking facilities;

• Avis Preferred , our frequent renter rewards program that offers counter bypass at major airport locations, as well as additional benefits at different customer status levels, such as vehicle upgrades;

• availability of a selection of luxury vehicles through our Avis Signature Series, as well as premium, sport, performance and electrified vehicles;

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The Budget brand is a leading supplier of vehicle rental and other mobility solutions focused primarily on more value-conscious customers.

In 2024, our Company-operated Budget vehicle rental operations generated total revenues of approximately $4.3 billion.

The following graphs present the approximate composition of our Budget revenues in 2024.

We also license the Budget brand to independent commercial owners who generally pay royalty fees to us based on a percentage of applicable revenues.

In 2024, these royalty fees totaled approximately 1% of our Budget revenues.

We operate or license Budget car rental locations at airports and in cities worldwide.

The table below presents the approximate number of Budget locations as of December 31, 2023.

The table below presents the approximate number of Budget car rental locations as of December 31, 2024.

Budget Locations *

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* Certain locations support multiple brands.

We also license the Budget brand to independent commercial owners who generally pay royalty fees to us based on a percentage of applicable revenues.

In 2023, these royalty fees totaled approximately 1% of our Budget revenues.

Budget offers its customers several products and services similar to Avis, such as refueling options, roadside assistance, electronic toll collection, and other supplemental rental products, emailed receipts and special rental rates for frequent renters.

In addition, Budget’s mobile application allows customers to reserve, modify and cancel reservations on their mobile device, and its Fastbreak and QuickPass service expedites rental service for frequent travelers.

Budget offers its customers several products and services similar to Avis, such as refueling options, roadside assistance, electronic toll collection, and other supplemental rental products, e-receipts and special rental rates for frequent renters.

In addition, Budget’s Fastbreak service expedites rental service for frequent travelers and the mobile application allows customers to reserve, modify and cancel reservations on their mobile devices.

Our Budget Truck rental business is one of the largest local and one-way truck and cargo van rental businesses in the United States.

As of December 31, 2023, our Budget Truck fleet is comprised of approximately 21,000 vehicles that are rented through a network of approximately 440 dealer-operated and 415 Company-operated locations throughout the continental United States.

As of December 31, 2024, our Budget Truck fleet is comprised of approximately 22,000 vehicles that are rented through a network of approximately 400 Company-operated and 380 dealer-operated locations throughout the continental United States.

These dealers are independently-owned businesses that generally operate other retail service businesses.

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The consumer sector consists primarily of individuals who rent trucks to move household goods on either a one-way or local basis.

In 2023, our Company-operated Budget vehicle rental operations generated total revenues of approximately $4.5 billion.

The following graphs present the approximate composition of our Budget revenues in 2023.

Zipcar is a leading car sharing network, driven by a mission to enable simple and responsible urban living.

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We continue to offer our Zipcar Flex product in London providing one-way rentals, including to and from Heathrow airport, which can be parked in public on-street parking spots in designated areas of the city.

Our other brands include the following:

• Payless, a leading rental car supplier serving the deep-value segment of the industry, which we license or operate in approximately 270 locations worldwide, including more than 160 locations operated by licensees and approximately 110 Company-operated locations.

◦ Company-operated Payless locations are primarily located in North America, the majority of which are at or near major airports.

Payless is a leading rental car supplier serving the deep-value segment of the industry, which we license or operate in approximately 285 locations worldwide, including more than 175 locations operated by licensees and approximately 110 Company-operated locations primarily located in North America, the majority of which are at or near major airports.

Payless’ rental fees are often lower than those of larger, more established vehicle rental brands.

The Payless business model allows us to extend the life-cycle of a portion of our rental fleet, as we “cascade” certain vehicles that exceed certain Avis and Budget age or mileage thresholds to be used by Payless.

• Maggiore and Morini Rent, leading vehicle rental brands in Italy.

◦ Maggiore has a strong local reputation and benefits from a strong presence at airport, off-airport and railway locations and from the integration of our existing operations and rental fleet management expertise.

We operate or license in approximately 140 rental locations throughout the country.

◦ Morini Rent offers rental of cars, vans, and refrigerated vehicles.

We operate in approximately 45 rental locations throughout the country.

• FranceCars, which operates one of the largest light commercial vehicle rental fleets in France, in approximately 70 rental locations, and leverages our existing operational processes and local customer base.

• Apex, which operates in approximately 25 rental locations at, or near, major airports and in several metropolitan cities in New Zealand and Australia.

• Turiscar, a leading vehicle rental brand in Portugal, which operates primarily in the corporate market, including light commercial vehicles, at approximately 30 rental locations throughout the country.

• ACL Hire and McNicoll Hire, providers of quality vehicle rental and maintenance services in the UK, with a strong focus on light commercial vehicles.

RESERVATIONS, MARKETING AND SALES

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We support our brands through a range of marketing channels and campaigns, including traditional media as well as digital media, including internet and email marketing, social media, streaming services, and mobile device applications.

In 2023, we launched the Plan On Us campaign as the Avis brand platform to highlight the trust our customers have in us.

Our Avis brand campaign Plan On Us highlights the trust our customers have in us.

We also market through sponsorships of major sports entities and charitable organizations.

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We offer Avis Budget Group Business Intelligence , an online portal complete with rental summary dashboards, visualizations and detailed reports that provides our corporate customers with insight into their program’s performance, giving them direct access to more data in a customer-facing portal offering useful data insights, including options to customize and schedule reports.

maintains marketing relationships with other travel partners through which we are able to offer their customers incentives to rent from Avis.

Avis also maintains marketing relationships with other travel partners through which we are able to offer their customers incentives to rent from Avis.

Additionally, we offer Unlimited Rewards , our loyalty incentive program for travel agents, and Avis and Budget programs for small businesses that offer discounted rates, central billing options and rental credits to members.

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We have licensees in approximately 175 countries throughout the world.

Royalty fee revenues derived from our vehicle rental licensees in 2023 totaled $133 million, with approximately $92 million in our International segment and $41 million in our Americas segment.

Royalty fee revenues derived from our vehicle rental licensees in 2024 totaled $143 million, with $104 million in our International segment and $39 million in our Americas segment.

Licensed locations are independently operated by our licensees and range from large operations at major airport locations and territories encompassing entire countries to relatively small operations in suburban or rural locations.

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Fleet Purchases

We maintain a diverse rental fleet, in which no vehicle manufacturer represented more than 23% of our 2023 fleet purchases, and we regularly adjust our fleet levels to be consistent with demand.

We maintain a diverse rental fleet, in which no vehicle brand represented more than 19% of our 2024 fleet purchases, and we regularly adjust our fleet levels to be consistent with anticipated demand.

We participate in a variety of vehicle purchase programs with major vehicle manufacturers.

In 2023, we primarily purchased vehicles from Stellantis N.V., General Motors Company, Renault-Nissan-Mitsubishi Alliance, Toyota Motor Corporation, Hyundai Motor Group, Ford Motor Company and Volkswagen Group.

In 2024, we primarily purchased from the following vehicle brands:

Toyota, Ford, Chevrolet, Kia, Volkswagen, Hyundai, Jeep, Dodge, Subaru, Honda, Volvo and Genesis.

Fleet costs represented approximately 21% of our aggregate expenses in 2024.

Fleet costs can vary from year to year based on the prices at which we are able to purchase and dispose of rental vehicles, the mix of risk and program vehicles, holding periods, and overall fleet mix.

Fleet costs can vary significantly from year to year based on the prices at which we are able to purchase and dispose of rental vehicles, the mix of risk and program vehicles, holding periods, and overall fleet mix.

In 2024, approximately 10% of our average rental fleet was comprised of vehicles subject to agreements requiring automobile manufacturers to repurchase vehicles at a specified price during a specified time period or guarantee our rate of depreciation on the vehicles during a specified period of time;

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Over the past several years, program vehicles have comprised of a decreasing proportion of our fleet.

The approximate percentage of program vehicles in our average rental fleet within each of our reporting segments in 2023 was 40% for International and less than 1% for the Americas.

The approximate percentage of program vehicles in our average rental fleet within each of our reportable segments in 2024 was 46% for International and less than 1% for the Americas.

The future percentages of program and risk vehicles in our fleet will depend on several factors, including our expectations for future used vehicle prices, our seasonal needs and the availability and attractiveness of manufacturers’ repurchase and guaranteed depreciation programs.

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We dispose of our risk vehicles largely through alternative disposition channels, including direct-to-consumer, online auctions, and direct-to-dealer sales, as well as through more traditional automobile auctions.

Alternative disposition channels provide the opportunity to increase vehicle sales prices and reduce relevant fleet costs compared to selling vehicles at auctions.

Alternative disposition channels provide the opportunity to increase speed to sale and vehicle sales prices and also to reduce relevant fleet costs when compared to selling vehicles at auctions.

We sell vehicles direct to consumers through our retail locations and through RubyCar, our online retail sales platform, which offers customers the ability to purchase well-maintained, late-model rental vehicles from our fleet.

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In 2024, our average quarterly vehicle rental fleet size ranged from a low of approximately 667,000 vehicles in the first quarter to a high of approximately 736,000 vehicles in the third quarter.

Average quarterly fleet utilization for 2023, which is based on the number of rental days (or portion thereof) that vehicles are rented compared to the total amount of time that vehicles are available for rent, ranged from approximately 65% to approximately 71%.

Average quarterly fleet utilization for 2024, which is based on the number of rental days (or portion thereof) that vehicles are rented compared to the total amount of time that vehicles are available for rent, ranged from approximately 66% to 72%.

Our average car rental fleet size and utilization are typically highest in the summer months.

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We generally operate our vehicle rental and car sharing services at airports under concession agreements with airport authorities, pursuant to which we typically make airport concession payments and/or lease payments.

In general, concession fees for on-airport locations are based on a percentage of total commissionable revenues (as

defined by each airport authority), often subject to minimum annual guaranteed amounts.

In general, concession fees for on-airport locations are based on a percentage of total commissionable revenues (as defined by each airport authority), often subject to minimum annual guaranteed amounts.

Concessions are typically awarded by airport authorities every three to ten years based upon competitive bids.

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The competitive environment for our industry is generally characterized by intense price and service competition among global, local and regional competitors.

Competition in our vehicle rental operations is based primarily upon price, customer service quality, including usability of booking systems and ease of rental and return, vehicle availability, reliability, rental locations, product innovation and national or international distribution.

Competition in our vehicle rental operations is based primarily upon price;

customer service quality, including usability of booking systems and ease of rental and return;

vehicle availability;

vehicle condition, age and mileage;

rental locations;

product innovation and national or international distribution.

In addition, competition is also influenced strongly by advertising, marketing, loyalty programs and brand reputation.

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Our Zipcar brand also competes with various local and regional mobility companies, including mobility services sponsored by several auto manufacturers, ride-hailing and car sharing companies and other technology players in the mobility industry.

Our Budget Truck operations in the United States competes with several other local, regional

and nationwide truck rental companies including U-Haul International, Inc., Penske Truck Leasing Corporation, Ryder System, Inc., Enterprise Truck Rental, and Hertz Global Holdings, Inc.

Our Budget Truck operations in the United States competes with several other local, regional and nationwide truck rental companies including U-Haul International, Inc., Penske Truck Leasing Corporation, Ryder System, Inc., Enterprise Truck Rental, and Hertz Global Holdings, Inc.

INSURANCE AND RISK MANAGEMENT

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We rely primarily on a combination of trademark, trade secret and copyright laws, as well as contractual provisions with employees and third parties, to establish and protect our intellectual property rights.

The service marks “Avis,” “Budget” and “Zipcar” and related marks or designs incorporating such terms and related logos and marks such as “Plan On Us,” “We Try Harder,” “We Know The Road” and “Own The Trip, Not The Car”, “Preferred” and “Fastbreak” are material to our vehicle rental and car sharing businesses.

The service marks “Avis,” “Budget,” and “Zipcar” and related marks or designs incorporating such terms and related logos and marks such as “Plan On Us,” “We Try Harder” and “Own The Trip, Not The Car,” “Preferred,” and “Fastbreak” are material to our vehicle rental and car sharing businesses.

Our subsidiaries and licensees actively use these marks.

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• Greenhouse Gas Emissions:

As our corporate and leisure customers become increasingly aware and concerned about pollution and congestion caused by vehicles, we aim to provide more sustainable transportation solutions by leveraging connected vehicle technology and introducing more fuel efficient, low emission, and electric vehicles.

As our corporate and leisure customers become increasingly aware and concerned about pollution and congestion caused by vehicles, we aim to provide more sustainable

transportation solutions by leveraging connected vehicle technology and introducing more fuel efficient, low emission, and electric vehicles.

• Sustainable Operations Improvements:

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We are actively anticipating and driving changes in mobility.

Connected and autonomous vehicles are likely to become a common feature worldwide, along with an increased use of electric and shared vehicles, which is why we are building on our core experience, data intelligence and technology to develop entirely new lines of business and extend our offering and capabilities for our customers, businesses and cities.

Connected vehicles are likely to become a common feature worldwide, along with an increased use of electric and shared vehicles, which is why we are building on our core experience, data intelligence and technology to develop entirely new lines of business and extend our offering and capabilities for our customers, businesses and cities.

Our efforts include:

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For our hourly field workforce (non-management employees), we maintain pay equity through our standardized compensation practices in which all employees begin at the same start rate, based on their location and position, and annual pay increases are applied consistently to all employees based on tenure.

Recruitment and Development

Our talent strategy is solidly rooted in attracting and retaining a diverse workforce.

Our Talent Acquisition teams have strong relationships with organizations that help us reach a diverse pool of candidates including those who identify as LGBTQ+ and those with disabilities.

We believe that our employees possess a wealth of knowledge that could and should be shared with others.

We have a wealth of established learning and talent programs that we make available to our employees, including a digital learning platform that has transformed the way we produce, manage and share learning resources.

Diversity, Inclusion and Belonging

We embrace diversity and inclusion.

We value each employee around the world, whose talent, skill and personality has helped establish us as a leading global mobility provider.

We believe that embracing and promoting diversity is a critical component of our success and we have committed to creating a safe, supportive and inclusive environment.

As an equal-opportunity employer, we are proud to provide an inclusive workplace that embraces and celebrates demographic, cultural and lifestyle differences.

We strive to have a diverse and inclusive work environment where employees feel valued for their uniqueness, recognized for their diverse talents, and where they can bring their whole selves to work.

We have created employee resource groups (“ERGs”) to advocate for equality, provide opportunities for advancement, and facilitate discussion around better practices and resources to advance more targeted cultural and racial understanding and diversity.

These ERGs provide a space where employees can foster connections and develop in a supportive environment.

As of the end of 2023, we had the following ERGs:

Power of Women, Power of Veterans, Power of Pride, and Power of Color.

Health and Safety

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Our well-being program focuses on helping our people achieve all aspects of wellness through encouraging habits that promote physical, emotional and financial well-being.

We are subject to a wide variety of laws and regulations in the countries in which we operate, including those relating to, among others, consumer protection, insurance products and rates, franchising, customer privacy and data protection, securities and public disclosure, competition and antitrust, environmental matters, taxes, automobile-related liability, corruption and anti-bribery, labor and employment matters, health and safety, claims management, automotive retail sales, currency-exchange and other various banking and financial industry regulations, cost and fee recovery, the protection of our trademarks and other intellectual property, ESG matters and local ownership or investment requirements.

We are subject to a wide variety of laws and regulations in the countries in which we operate, including those relating to, among others, consumer protection, insurance products and rates, franchising and distribution, customer privacy and data protection, securities and public disclosure, competition and antitrust, environmental matters, taxes, automobile-related liability, corruption and anti-bribery, labor and employment matters, health and safety, claims management, automotive retail sales, currency-exchange and other various banking and financial industry regulations, cost and fee recovery, the protection of our trademarks and other intellectual property, ESG matters and local ownership or investment requirements.

Additional information about the regulations that we are subject to can be found in Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K.

What changed 10-K

Item 1. Business