What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-19 compared with 2025-02-14 · 93 added, 87 removed, 186 unchanged (49% of the section changed)

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A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to 2023 can be found under Part II, Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 14, 2025, which is available on the SEC’s website at www.sec.gov and our Investor Relations website at ir.avisbudgetgroup.com.

In 2024, we saw sustained volume, decreased revenue per day, and increased fleet and interest costs.

This resulted in revenues of approximately $11.8 billion, a net loss of $1.8 billion and Adjusted EBITDA of $628 million for the year ended December 31, 2024.

During the fourth quarter of 2024, we changed our fleet strategy to accelerate certain fleet rotations in order to decrease the age of our fleet for competitive reasons, and accordingly, we shortened the useful life associated with such vehicles.

Our net loss reflects $2.5 billion in long-lived asset impairment and other related charges, approximately $2.3 billion of which was recorded to reduce the carrying value of our rental fleet to its fair value in connection with this change.

In 2025, we saw sustained volume, decreased revenue per day and lower per-unit fleet costs, excluding other fleet charges related to the disposal of certain fleet in our Americas reportable segment .

This resulted in revenues of approximately $11.7 billion, net loss of $995 million and Adjusted EBITDA of $748 million for the year ended December 31, 2025.

During the fourth quarter of 2025, in conjunction with the Interpace Ventures transaction, we reviewed our fleet strategy, specific to certain United States EV rental car vehicles, and as a result shortened the useful life associated with such vehicles.

Our net loss reflects $518 million in long-lived asset impairment and other related charges, which was recorded to reduce the carrying value of certain United States EV rental car vehicles to its fair value in connection with this change.

See Note 2 – Summary of Significant Accounting Policies – Impairment of Long-Lived Assets to our Consolidated Financial Statements.

Our strategy remains centered on driving sustainable growth through operational efficiency, analytics, customer experience and innovation .

In addition to the change in fleet strategy mentioned above, during the fourth quarter of the fiscal year ended December 31, 2024, we changed our fleet strategy with respect to United States and Canadian rental car vehicles, to accelerate certain fleet rotations in order to decrease the age of our fleet for competitive reasons.

We believe our strategies will continue to reinforce our competitive position, support long-term profitability, and deliver value to our stakeholders.

We continue to be susceptible to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations.

The factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following:

interest rates, inflationary impact on items such as commodity prices and wages, cost of new vehicles, used car values, increases in the number of personal injury claims and cost per incident, and an economic downturn that may impact travel demand, all of which may be exacerbated by ongoing military conflicts, including in Eastern Europe.

Additionally, uncertainty remains with respect to tariffs and tax regulations, and this uncertainty has had and may continue to have impacts on global stock markets and foreign exchange rates.

interest rates, inflationary impact on items such as commodity prices and wages, cost of new vehicles, used car values, increases in the number of personal injury claims and cost per incident, government shutdowns, manufacturer recalls, and an economic downturn that may impact travel demand, all of which may be exacerbated by ongoing military conflicts, including in the Middle East and Eastern Europe.

Additionally, uncertainty remains with respect to tariffs and tax regulations, and this uncertainty has had and may continue to have impacts on our operations.

We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition, and future results of operations.

Our strategy continues to primarily focus on customer experience and costs to strengthen our Company, maximize profitability, and deliver stakeholder value.

We measure performance principally using the following key metrics:

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long-lived asset impairment and other related charges;

other fleet charges;

restructuring and other related charges;

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transaction-related costs, net;

legal matters, net, which includes amounts recorded in excess of $5 million, related primarily to unprecedented self-insurance reserves for allocated loss adjustment expense, class action lawsuits and personal injury matters;

legal matters, net, which primarily includes amounts recorded in excess of $5 million, related to unprecedented self-insurance reserves for allocated loss adjustment expense, class action lawsuits and personal injury matters;

non-operational charges related to shareholder activist activity, which includes third-party advisory, legal and other professional fees;

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and income taxes.

We have revised our definition of Adjusted EBITDA to exclude severe weather-related damages in excess of $5 million, net of insurance proceeds.

In the first quarter of 2025, we revised our definition of Adjusted EBITDA to exclude other fleet charges.

We did not revise prior years' Adjusted EBITDA amounts because there were no other charges similar in nature to these.

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Interest expense 422 358 64 18 %

Early extinguishment of debt 19 5 14 n/m

Long-lived asset impairment and other related charges 2,470 — 2,470 n/m

Early extinguishment of debt 6 19 (13) (68 %)

Long-lived asset impairment and other related charges 518 2,470 (1,952) (79 %)

Restructuring and other related charges 131 37 94 n/m

Transaction-related costs, net 3 5 (2) (40 %)

Transaction-related costs, net 18 3 15 n/m

Other (income) expense, net 18 9 9 n/m

Total expenses $ 12,581 $ 14,416 $ (1,835) (13 %)

Income (loss) before income taxes (2,627) 1,914 (4,541) n/m

Loss before income taxes (929) (2,627) 1,698 65 %

Provision for (benefit from) income taxes 66 (810) 876 n/m

Net income (loss) $ (1,817) $ 1,635 $ (3,452) n/m

Net income attributable to non-controlling interests 4 3 1 n/m

Net income (loss) attributable to Avis Budget Group, Inc.

$ (1,821) $ 1,632 $ (3,453) n/m

Net loss $ (995) $ (1,817) $ 822 45 %

Net income (loss) attributable to non-controlling interests (106) 4 (110) n/m

Net loss attributable to Avis Budget Group, Inc.

$ (889) $ (1,821) $ 932 51 %

n/m Not meaningful.

Revenues decreased $219 million or 2% for the year ended December 31, 2024 compared to the similar period in 2023, primarily due to a 3% decrease in revenue per day, excluding exchange rate effects and a $9 million negative impact from currency exchange rate movements, partially offset by a 1% increase in volume.

Total expenses increased 43% for the year ended December 31, 2024, compared to the similar period in 2023, primarily due to long-lived asset impairment and other related charges, higher per-unit fleet costs and higher interest costs.

Revenues decreased $137 million or 1% for the year ended December 31, 2025, compared to the similar period in 2024, primarily due to a 1% decrease in revenue per day, excluding exchange rate effects and sustained volume, partially offset by a $71 million positive impact from currency exchange rate movements.

Total expenses decreased 13% for the year ended December 31, 2025, compared to the similar period in 2024, primarily due to the long-lived asset impairment and other related charges recorded in 2024.

See Note 2 – Summary of Significant Accounting Policies – Impairment of Long-Lived Assets to our Consolidated Financial Statements.

Our effective tax rates for the years ended December 31, 2024 and 2023 were a benefit of 30.8% and a provision of 14.6%, respectively.

As a result of these items, our net income decreased by $3.5 billion compared to the similar period in 2023.

For the years ended December 31, 2024 and 2023, we reported diluted earnings (loss) per share of $(51.23) and $42.08, respectively.

Operating expenses increased to 51.0% of revenues for the year ended December 31, 2024 compared to 47.3% during the similar period in 2023, primarily due to an increase in volume.

Vehicle depreciation and lease charges increased to 25.2% of revenues for the year ended December 31, 2024 compared to 14.5% during the similar period in 2023, primarily driven by higher per-unit fleet costs;

adjusted depreciation on our rental fleet following a change in our fleet strategy, whereby we have accelerated certain fleet rotations and shortened the useful life associated with such vehicles;

and a decrease in the gain on sale of vehicles.

Selling, general and administrative costs were 11.5% of revenues for the year ended December 31, 2024 compared to 11.7% during the similar period in 2023.

Vehicle interest costs increased to 8.0% of revenues for the year ended December 31, 2024, compared to 6.1% during the similar period in 2023, primarily due to rising interest rates.

Following is a more detailed discussion of the results of each of our reportable segments, corporate and other, and reconciliation of net income to Adjusted EBITDA:

Our effective tax rates for the years ended December 31, 2025 and 2024 were a provision of 7.1% and a benefit of 30.8%, respectively.

As a result of these items, our net loss attributable to Avis Budget Group, Inc.

decreased by $932 million compared to the similar period in 2024.

For the years ended December 31, 2025 and 2024, we reported diluted loss per share of $25.25 and $51.23, respectively.

Operating expenses decreased to 50.3% of revenues for the year ended December 31, 2025, compared to 51.0% during the similar period in 2024, primarily due to a settlement distribution relating to our participation in the In re Automotive Parts Antitrust Litigation and decreased fleet operating costs, partially offset by increased facilities costs.

See Note 15 – Commitments and Contingencies to our Consolidated Financial Statements.

Vehicle depreciation and lease charges increased to 25.9% of revenues for the year ended December 31, 2025, compared to 25.2% during the similar period in 2024, primarily due to other fleet charges related to the disposal of certain fleet in our Americas reportable segment, partially offset by an increase in the gain on sale of vehicles.

Selling, general and administrative costs increased to 12.4% of revenues for the year ended December 31, 2025, compared to 11.5% during the similar period in 2024, primarily due to increased commissions, marketing and

other general and administrative costs.

Vehicle interest costs were 7.9% of revenues for the year ended December 31, 2025, compared to 8.0% during the similar period in 2024.

Following is a more detailed discussion of the results of each of our reportable segments and corporate and other, together with a reconciliation of net loss to Adjusted EBITDA:

Revenues Adjusted EBITDA Revenues Adjusted EBITDA

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Total Company $ 11,652 $ 748 $ 11,789 $ 628

Reconciliation of net income (loss) to Adjusted EBITDA

Net income (loss) $ (1,817) $ 1,635

Reconciliation of net loss to Adjusted EBITDA:

Net loss $ (995) $ (1,817)

Provision for (benefit from) income taxes 66 (810)

Income (loss) before income taxes $ (2,627) $ 1,914

Loss before income taxes $ (929) $ (2,627)

Non-vehicle related depreciation and amortization 231 237

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Long-lived asset impairment and other related charges (b)

Other fleet charges (c)

Restructuring and other related charges 131 37

Transaction-related costs, net 18 3

Other (income) expense, net (c)

Legal matters, net (d)

Cloud computing costs (e)

Severe weather-related damages, net (e)

Other (income) expense, net (d)

Legal matters, net (e)

Cloud computing costs (f)

Severe weather-related damages, net (f)

Adjusted EBITDA $ 748 $ 628

(a) Includes unallocated corporate expenses which are not attributable to a particular segment.

(b) Includes an impairment charge of approximately $2.3 billion related to the acceleration of the rotation of our fleet and a charge of $180 million related to the write-down of the carrying value of certain vehicles held for sale within our Americas reportable segment.

(b) For the year ended December 31, 2025, includes an impairment charge of approximately $518 million within our Americas reportable segment, related to the acceleration of the rotation of certain United States EV rental car vehicles in conjunction with the Interpace Ventures transaction.

For the year ended December 31, 2024 , includes an impairment charge of approximately $2.3 billion related to the acceleration of the rotation of our fleet and a charge of $180 million related to the write-down of the carrying value of certain vehicles held for sale within our Americas reportable segment.

See Note 2 – Summary of Significant Accounting Policies – Impairment of Long-Lived Assets to our Consolidated Financial Statements.

(c) Primarily consists of gains or losses related to our equity method investment in a former subsidiary, offset by fleet related and certain administrative services provided to the same former subsidiary.

(d) Includes $4 million reported within selling, general and administrative expenses for the year ended December 31, 2024 and $60 million and $5 million reported within operating expenses in the years ended December 31, 2024 and 2023, respectively.

(c) Costs reported within vehicle depreciation and lease charges, net related to the disposal of certain fleet in our Americas reportable segment.

(d) Primarily consists of gains or losses related to our equity method investment in a former subsidiary, offset by fleet related and certain administrative services provided to the same former subsidiary.

(e) Consists of $3 million and $4 million reported within selling, general and administrative expenses for the years ended December 31, 2025 and 2024, respectively, and $102 million of income and $60 million reported within operating expenses for the years ended December 31, 2025 and 2024, respectively.

The $60 million recorded within operating expenses for the year ended December 31, 2024 includes $46 million relating to our self-insurance reserves for allocated loss adjustment expense.

(e) Reported within operating expenses.

(f) Reported within operating expenses.

2025 2024 % Change

Revenues $ 8,900 $ 9,111 (2 %)

Adjusted EBITDA 551 2,196 n/m

Adjusted EBITDA 552 551 — %

Revenues decreased for the year ended December 31, 2025, compared to the similar period in 2024, primarily due to a 3% decrease in revenue per day, excluding exchange rate effects and a $6 million negative impact from currency exchange rate movements, partially offset by a 1% increase in volume.

Operating expenses increased to 51.2% of revenues for the year ended December 31, 2024 compared to 47.4% during the similar period in 2023, primarily due to an increase in volume.

Vehicle depreciation and lease charges increased to 25.3% of revenues for the year ended December 31, 2024 compared to 13.0% during the similar period in 2023, primarily driven by higher per-unit fleet costs;

adjusted depreciation on our rental fleet following a change in our fleet strategy, whereby we have accelerated certain fleet rotations and shortened the useful life associated with such vehicles;

and a decrease in the gain on sale of vehicles.

Selling, general and administrative costs were 9.5% of revenues for the year ended December 31, 2024 compared to 9.6% during the similar period in 2023 .

Vehicle interest costs increased to 8.6% of revenues for the year ended December 31, 2024 compared to 6.6% during the similar period in 2023, primarily due to rising interest rates.

Adjusted EBITDA decreased for the year ended December 31, 2024 compared to the similar period in 2023, primarily due to higher per-unit fleet costs, interest costs, and a $2 million negative impact from currency exchange rate movements.

Operating expenses decreased to 50.5% of revenues for the year ended December 31, 2025, compared to 51.2% during the similar period in 2024, primarily due to a settlement distribution relating to our participation in the In re Automotive Parts Antitrust Litigation and decreased fleet operating costs, partially offset by increased facilities costs.

See Note 15 – Commitments and Contingencies to our Consolidated Financial Statements.

Vehicle depreciation and lease charges increased to 27.1% of revenues for the year ended December 31, 2025, compared to 25.3% during the similar period in 2024, primarily due to other fleet charges related to the disposal of certain fleet in our Americas reportable segment, partially offset by an increase in the gain on sale of vehicles.

Selling, general and administrative costs increased to 10.6% of revenues for the year ended December 31, 2025, compared to 9.5% during the similar period in 2024, primarily due to increased commissions, marketing and other general and administrative costs.

Vehicle interest costs were 8.8% of revenues for the year ended December 31, 2025, compared to 8.6% during the similar period in 2024.

Adjusted EBITDA for the year ended December 31, 2025 is comparable to the similar period in 2024.

International

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Revenues $ 2,752 $ 2,678 3 %

Adjusted EBITDA 161 400 n/m

Revenues increased for the year ended December 31, 2024 compared to the similar period in 2023, primarily due to a 4% increase in volume, partially offset by a 3% decrease in revenue per day, excluding exchange rate effects and a $1 million negative impact from currency exchange rate movements.

Operating expenses increased to 48.3% of revenues for the year ended December 31, 2024 compared to 45.6% during the similar period in 2023, primarily due to an increase in volume.

Vehicle depreciation and lease charges increased to 25.2% of revenues for the year ended December 31, 2024 compared to 19.7% during the similar period in 2023, primarily due to increased per-unit fleet costs, increased depreciation rates, and a decrease in the gain on sale of vehicles.

Adjusted EBITDA 290 161 80 %

Revenues increased for the year ended December 31, 2025, compared to the similar period in 2024, primarily due to a 3% increase in revenue per day, excluding exchange rate effects and a $77 million positive impact from currency exchange rate movements, partially offset by a 3% decrease in volume.

Operating expenses decreased to 47.5% of revenues for the year ended December 31, 2025, compared to 48.3% during the similar period in 2024, primarily due to an increase in revenue per day, excluding exchange rate effects and a positive impact from currency exchange rate movements, partially offset by a decrease in volume.

Vehicle depreciation and lease charges decreased to 21.8% of revenues for the year ended December 31, 2025, compared to 25.2% during the similar period in 2024, primarily due to decreased per-unit fleet costs, excluding exchange rate effects, and decreased fleet levels.

Selling, general and administrative costs were 15.4% of revenues for the year ended December 31, 2025, compared to 15.3% during the similar period in 2024.

Vehicle interest costs increased to 5.7% of revenues for the year ended December 31, 2024 compared to 4.4% during the similar period in 2023, primarily due to rising interest rates.

Adjusted EBITDA decreased for the year ended December 31, 2024 compared to the similar period in 2023, primarily due to higher per-unit fleet and interest costs, and a $13 million negative impact from currency exchange rate movements.

Vehicle interest costs decreased to 4.9% of revenues for the year ended December 31, 2025, compared to 5.7% during the similar period in 2024, primarily due to decreased fleet levels and interest rates.

Adjusted EBITDA increased for the year ended December 31, 2025, compared to the similar period in 2024, primarily due to an increase in revenue, lower per-unit fleet costs and an approximately $11 million positive impact from currency exchange rate movements.

Corporate and Other

2025 2024 % Change

Adjusted EBITDA (84) (106) n/m

Adjusted EBITDA increased for the year ended December 31, 2024 compared to the similar period in 2023, primarily due to decreased selling, general and administrative expenses, which are not attributable to a particular segment.

Adjusted EBITDA (94) (84) (12 %)

Adjusted EBITDA decreased for the year ended December 31, 2025, compared to the similar period in 2024, primarily due to increased selling, general and administrative expenses, which are not attributable to a particular segment.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

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Liabilities under vehicle programs 22,252 20,311 1,941

Stockholders’ equity (2,317) (343) (1,974)

The increase in assets exclusive of assets under vehicle programs compared to 2023 is principally related to the increase in operating lease right-of-use assets.

See Note 3 – Leases to our Consolidated Financial Statements.

The increase in liabilities exclusive of liabilities under vehicle programs compared to 2023 is principally related to the increase in operating lease liabilities and corporate indebtedness from the issuance of senior notes.

See “Liquidity and Capital Resources,” Note 3 – Leases and Note 13 – Long-term Corporate Debt and Borrowing Arrangements to our Consolidated Financial Statements.

The decreases in assets and liabilities under vehicle programs are principally related to the decrease in the size and value of our vehicle rental fleet.

The decrease in stockholders’ equity compared to 2023 is principally related to our comprehensive loss.

Redeemable non-controlling interests 74 — 74

Total stockholders’ equity (3,116) (2,317) (799)

The increase in total assets exclusive of assets under vehicle programs compared to 2024 is primarily due to our deferred income taxes which reflect the enactment of the One Big Beautiful Bill Act and the increase in operating lease right-of-use assets.

See Note 3 – Leases and Note 9 – Income Taxes to our Consolidated Financial Statements.

The increase in total liabilities exclusive of liabilities under vehicle programs compared to 2024 is primarily due to the increase in corporate indebtedness from the issuance of Senior Notes due June 2032.

See “Liquidity and Capital Resources,” and Note 13 – Long-term Corporate Debt and Borrowing Arrangements to our Consolidated Financial Statements.

The increases in both assets and liabilities under vehicle programs are primarily due to the increase in the cost of our rental fleet.

The increase in redeemable non-controlling interests relates to the Interpace Ventures transaction.

Refer to Note 2 – Summary of Significant Accounting Policies.

The decrease in total stockholders’ equity compared to 2024 is primarily due to our net loss.

LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of liquidity are cash on hand and our ability to generate cash through operations and financing activities, as well as available funding arrangements and committed credit facilities, each of which is discussed below.

In February 2024, we issued €600 million of 7.000% euro-denominated Senior Notes due February 2029, at par, with interest payable semi-annually.

In April 2024, we used net proceeds from the offering to redeem all of our outstanding 4.750% euro-denominated Senior Notes due January 2026 plus accrued interest, with the remainder being used for general corporate purposes.

In May 2024, we issued an additional €200 million 7.250% euro-denominated Senior Notes due July 2030, at 100.25% of their face value, with interest payable semi-annually.

Net proceeds from the offering were used for general corporate purposes.

In September 2024, we issued $700 million of 8.250% Senior Notes due January 2030, at par, with interest payable semi-annually.

In October 2024, we used net proceeds from the offering to repay the outstanding borrowings under our floating rate term loan due 2029, with the remainder being used to repay maturing vehicle-backed debt and for general corporate purposes.

In February 2025, we borrowed $500 million under a floating rate term loan due December 2025, which is part of our senior revolving credit facilities.

During 2024, our Avis Budget Rental Car Funding (AESOP) subsidiary issued approximately $2.8 billion of asset-backed notes with expected final payment dates ranging from February 2026 to December 2029, and a weighted average interest rate of 6.04%.

Avis Budget Rental Car Funding (AESOP) has also amended and extended its asset-backed variable-funding financing facilities, most recently in December 2024.

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

In January 2025, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued an additional $358 million of asset-backed notes to investors with expected final payment dates ranging from August 2027 to February 2029 and a weighted average interest rate of 8.01%.

These notes were issued under previously outstanding series of debt.

The proceeds were primarily used to pay down fleet indebtedness.

In June 2025, we fully repaid our outstanding borrowings under the floating rate term loan due 2025.

In May 2025, we issued $600 million of 8.375% Senior Notes due June 2032.

Net proceeds were used to repay our floating rate term loan due 2025 and a portion of our 5.750% Senior Notes due July 2027, with the remaining proceeds being used to repay outstanding fleet debt and for general corporate purposes.

In June 2025, we redeemed $100 million of our outstanding 5.750% Senior Notes due July 2027.

In July 2025, we amended our floating rate term loan, extending its maturity date from August 2027 to July 2032 and increasing the interest rate to Secured Overnight Financing Rate (“SOFR”) plus 2.50%.

In December 2025, in conjunction with the Interpace Ventures transaction, Interpace Funding LLC, a wholly-owned subsidiary of Interpace Ventures LLC, issued $965 million of alternative funding asset-backed securities with a targeted two-year term and a maturity date of June 2028.

In connection with the issuance, on December 31, 2025, we repaid an aggregate amount of $965 million of notes issued by our Avis Budget Rental Car Funding (AESOP) LLC subsidiary pursuant to certain asset-backed variable funding financing facilities.

See Note 2 – Summary of Significant Accounting Policies to our Consolidated Financial Statements.

During 2025, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued approxi mately $1,708 million of asset-backed notes with expected final payment dates ranging from August 2027 to February 2031 and a weighted average interest rate of 5.33% .

Avis Budget Rental Car Funding (AESOP) LLC has also amended and extended its asset-backed variable funding financing facilities, most recently in December 2025.

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

In February 2024, we amended our European rental fleet securitization program to increase its capacity from €1.7 billion to €1.9 billion, to add £200 million to our capacity within the program, and to extend the maturity of the program from 2024 to 2026.

The program is used to finance fleet purchases for certain of our European operations.

Our Board of Directors has authorized the repurchase of up to approximately $8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in February 2023 (the “Stock Repurchase Program”).

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The Stock Repurchase Program has no set expiration or termination date.

For the year ended December 31, 2024, we repurchased approximately 0.6 million shares of common stock at a cost of approximately $45 million (excluding excise taxes due under the Inflation Reduction Act of 2022) under the Stock Repurchase Program.

For the year ended December 31, 2025, we did not repurchase shares of common stock under the Stock Repurchase Program.

As of December 31, 2025, approximately $757 million of authorization remained available to repurchase common stock under the Stock Repurchase Program.

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$ 618 $ 597 $ 21

The decrease in cash provided by operating activities during 2024 compared with 2023 is primarily due to the decrease in our net income.

The decrease in cash used in investing activities during 2024 compared with 2023 is primarily due to the decrease in our net investment in vehicles.

The increase in cash used in financing activities during 2024 compared with 2023 is primarily due to the increase in our net payments under vehicle programs, partially offset by the decrease in our common stock repurchases and the increase in our net corporate borrowings.

Cash provided by operating activities during 2025 is consistent with 2024.

The increase in cash used in investing activities during 2025 compared with 2024 is primarily due to the increase in our investment in vehicles, partially offset by the increase in proceeds received on vehicle sales.

The increase in cash provided by financing activities during 2025 compared with 2024 is primarily due to the increase in our net borrowings under vehicle programs.

We anticipate that our non-vehicle property and equipment additions will be approximately $250 million in 2026.

Debt and Financing Arrangements

At December 31, 2024, we had approximatel y $22.9 billion of indebtedness (including corporate indebtedness of approximately $5.4 billion and debt under vehicle programs of approximately $17.5 billion).

As of December 31, 2025, we had approximatel y $25.3 billion of indebtedness, including corporate indebtedness of approximately $6.1 billion and debt under vehicle programs of approximately $19.2 billion.

For information regarding our debt and borrowing arrangements, see Note 1 – Basis of Presentation, Note 13 – Long-term Corporate Debt and Borrowing Arrangements, and Note 14 – Debt Under Vehicle Programs and Borrowing Arrangements to our Consolidated Financial Statements.

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Additionally, a worsening or prolonged downturn in the worldwide economy or a disruption in the credit markets could further impact our liquidity due to (i) decreased demand and pricing for vehicles in the used vehicle market, (ii) increased costs associated with, and/or reduced capacity or increased collateral needs, including due to a decrease in the fair value of our fleet, under, our financings, (iii) the adverse impact of vehicle manufacturers being unable or unwilling to honor their obligations to repurchase or guarantee the depreciation on the related program vehicles and (iv) disruption in our ability to obtain financing due to negative credit events specific to us or affecting the overall debt market (see Part I, Item 1A, “Risk Factors” for further discussion).

As of December 31, 2024, we had $534 million of available cash and cash equivalents and access to $503 million of available borrowing capacity under our revolving credit facility, providing us with access to approximately $1.0 billion of total liquidity.

Including our uncommitted facilities, we had total liquidity of approximately $1.1 billion.

As of December 31, 2025, we had $519 million of available cash and cash equivalents and access to $299 million of available borrowing capacity under our revolving credit facility, providing us with access to approximately $818 million of total liquidity.

Our liquidity position could also be negatively impacted if we are unable to remain in compliance with the consolidated first lien leverage ratio requirement and other covenants associated with our senior credit facilities and other borrowings.

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Our goodwill and other indefinite-lived intangible assets are allocated among our reporting units.

During 2025, there was no impairment of goodwill and other indefinite-lived intangible assets.

During 2024, we recorded $28 million in long-lived asset impairment and other related charges for impairment of one of our unamortized indefinite-lived intangible assets.

During 2024, there was no impairment of goodwill.

During 2023, there was no impairment of goodwill and other indefinite-lived intangible assets.

See Note 2 – Summary of Significant Accounting Policies and Note 7 – Intangible Assets to our Consolidated Financial Statements for more information regarding our goodwill and other indefinite-lived intangible assets.

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The estimation of residual values requires us to make assumptions regarding the age and mileage of the vehicle at the time of disposal, as well as expected used vehicle market conditions.

We regularly evaluate estimated residual values and adjusts depreciation rates as appropriate.

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 vehicle depreciation and lease charges, net, at the time of sale.

During 2025, we recorded $518 million in long-lived asset impairment and other related charges related to the acceleration of the rotation of certain United States EV rental car vehicles and shortened useful life associated with such vehicles, in conjunction with the Interpace Ventures transaction.

During 2024, we recorded $2.5 billion in long-lived asset impairment and other related charges related to vehicles, including an approximately $2.3 billion impairment charge related to the acceleration of rotation of our fleet and shortened useful life associated with such vehicles.

During 2023, there was no long-lived asset impairment and other related charges.

See Note 2 – Summary of Significant Accounting Policies and Note 8 – Vehicle Rental Activities to our Consolidated Financial Statements for more information regarding our vehicles.

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Public Liability, Property Damage and Other Insurance Liabilities.

Insurance liabilities on our Consolidated Balance Sheets include supplemental liability insurance, personal effects protection insurance, public liability, property damage and personal accident insurance claims for which we are self-insured.

Insurance liabilities on our Consolidated Balance Sheets include additional/supplemental liability insurance, personal effects protection insurance, public liability, property damage and personal accident insurance claims for which we are self-insured.

We estimate the required liability of such claims on an undiscounted basis utilizing an actuarial method that is based upon various assumptions which include, but are not limited to, our historical loss experience and projected loss development factors.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis