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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
Form 10-Q
 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021

OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____

Commission File No. 001-10308
 
Avis Budget Group, Inc.
(Exact name of registrant as specified in its charter) 
Delaware06-0918165
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
6 Sylvan Way
Parsippany,NJ07054
(Address of principal executive offices)(Zip Code)
(973)496-4700
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Par Value $0.01CARThe NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated FilerNon-accelerated Filer
Smaller Reporting CompanyEmerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes      No  

The number of shares outstanding of the issuer’s common stock was 56,447,571 shares as of October 29, 2021.


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Table of Contents
 Page
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 6.


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FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q may be considered “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained herein are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by any such forward-looking statements. Forward-looking statements include information concerning our future financial performance, business strategy, projected plans and objectives. These statements may be identified by the fact that they do not relate to historical or current facts and may use words such as “believes,” “expects,” “anticipates,” “will,” “should,” “could,” “may,” “would,” “intends,” “projects,” “estimates,” “plans,” and similar words, expressions or phrases. The following important factors and assumptions could affect our future results and could cause actual results to differ materially from those expressed in such forward-looking statements. Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the Coronavirus (“COVID-19”) pandemic, and the continued restrictions that have been placed on travel in many countries and the resulting adverse impact on the global economy. These factors include, but are not limited to:

COVID-19 and its resulting impact on the global economy, which has had, and is expected to continue to have, a significant impact on our operations, including unprecedented volatility in demand levels, as well as its current, and uncertain future impact, including, but not limited to, its effect on the ability or desire of people to travel, including due to travel restrictions, and other restrictions and orders, which may continue to impact our results, operations, outlooks, plans, goals, growth, cash flows, liquidity, and stock price;

the high level of competition in the mobility industry, including from new companies or technology, and the impact such competition may have on pricing and rental volume;

a change in our fleet costs, including as a result of a change in the cost of new vehicles, manufacturer recalls, disruption in the supply of new vehicles, shortages in semiconductors used in new vehicle production, and/or a change in the price at which we dispose of used vehicles either in the used vehicle market or under repurchase or guaranteed depreciation programs;

the results of operations or financial condition of the manufacturers of our vehicles, which could impact their ability to perform their payment obligations under our agreements with them, including repurchase and/or guaranteed depreciation arrangements, and/or their willingness or ability to make vehicles available to us or the mobility industry as a whole on commercially reasonable terms or at all particularly as COVID-19 related restrictions are lifted and travel demand increases;

the significant volatility in travel demand as a result of COVID-19, including the current and any future disruptions in airline passenger traffic;

the absence of an improvement in, or further deterioration of, economic conditions, particularly during our peak season or in key market segments;

an occurrence or threat of terrorism, the current and any future pandemic diseases, natural disasters, military conflict or civil unrest in the locations in which we operate;

any substantial changes in the cost or supply of fuel, vehicle parts, energy, labor or other resources on which we depend to operate our business, including the current and any future impacts as a result of COVID-19, inflation or otherwise;

our ability to continue to successfully implement our business strategies, achieve and maintain cost savings and adapt our business to changes in mobility;

political, economic or commercial instability in the countries in which we operate, and our ability to conform to multiple and conflicting laws or regulations in those countries;

1

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our dependence on third-party distribution channels, third-party suppliers of other services and co-marketing arrangements with third parties;

risks related to completed or future acquisitions or investments that we may pursue, including the incurrence of incremental indebtedness to help fund such transactions and our ability to promptly and effectively integrate any acquired businesses or capitalize on joint ventures, partnerships and other investments;

our ability to utilize derivative instruments, and the impact of derivative instruments we utilize, which can be affected by fluctuations in interest rates, gasoline prices and exchange rates, changes in government regulations and other factors;

our exposure to uninsured or unpaid claims in excess of historical levels and our ability to obtain insurance at desired levels and the cost of that insurance;

risks associated with litigation, governmental or regulatory inquiries, or any failure or inability to comply with laws, regulations or contractual obligations or any changes in laws, regulations or contractual obligations, including with respect to personally identifiable information and consumer privacy, labor and employment, and tax;

risks related to protecting the integrity of, and preventing unauthorized access to, our information technology systems or those of our third-party vendors, licensees, dealers, independent operators and independent contractors, and protecting the confidential information of our employees and customers against security breaches, including physical or cybersecurity breaches, attacks, or other disruptions, and compliance with privacy and data protection regulation;

any impact on us from the actions of our licensees, dealers, third-party vendors, independent operators and independent contractors and/or disputes that may arise out of our agreements with such parties;

any major disruptions in our communication networks or information systems;

risks related to tax obligations and the effect of future changes in tax laws and accounting standards;

risks related to our indebtedness, including our substantial outstanding debt obligations, potential interest rate increases, recent and potential further downgrades by rating agencies and our ability to incur substantially more debt;

our ability to obtain financing for our global operations, including the funding of our vehicle fleet through the issuance of asset-backed securities and use of the global lending markets;

our ability to meet the financial and other covenants contained in the agreements governing our indebtedness, or to obtain a waiver or amendment of such covenants should we be unable to meet such covenants;

failure to achieve our business plans, deterioration in general economic conditions of the countries in which we operate, or significant changes in the assumptions and estimates that are used in our impairment testing for goodwill or intangible assets, which could result in a significant impairment of our goodwill; and

other business, economic, competitive, governmental, regulatory, political or technological factors affecting our operations, pricing or services.

We operate in a continuously changing business environment and new risk factors emerge from time to time. New risk factors, factors beyond our control, or changes in the impact of identified risk factors may cause actual results to differ materially from those set forth in any forward-looking statements. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. Moreover, we do not assume responsibility for the accuracy and completeness of those statements. Other factors and assumptions not identified above, including those discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in
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Item 2 and “Risk Factors” in Item 1A in this quarterly report and in similarly titled sections set forth in Item 7 and in Item 1A and in other portions of our 2020 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 17, 2021 (the “2020 Form 10-K”), may cause actual results to differ materially from those projected in any forward-looking statements.

Although we believe that our assumptions are reasonable, any or all of our forward-looking statements may prove to be inaccurate and we can make no guarantees about our future performance. Should unknown risks or uncertainties materialize or underlying assumptions prove inaccurate, actual results could differ materially from past results and/or those anticipated, estimated or projected. We undertake no obligation to release any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

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PART I — FINANCIAL INFORMATION
Item 1.    Financial Statements
Avis Budget Group, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(In millions, except per share data)
(Unaudited)

Three Months Ended 
September 30,
Nine Months Ended 
September 30,
2021202020212020
Revenues$3,001 $1,534 $6,744 $4,047 
Expenses
Operating1,225 825 3,089 2,505 
Vehicle depreciation and lease charges, net277 256 869 1,089 
Selling, general and administrative361 166 837 549 
Vehicle interest, net80 77 232 247 
Non-vehicle related depreciation and amortization69 74 199 214 
Interest expense related to corporate debt, net:
Interest expense47 64 167 163 
Early extinguishment of debt7 2 136 9 
Restructuring and other related charges5 17 47 89 
Transaction-related costs, net1  3 3 
Total expenses2,072 1,481 5,579 4,868 
Income (loss) before income taxes929 53 1,165 (821)
Provision for (benefit from) income taxes255 8 263 (227)
Net income (loss)674 45 902 (594)
Less: net loss attributable to non-controlling interests(1) (1) 
Net income (loss) attributable to Avis Budget Group, Inc.$675 $45 $903 $(594)
Comprehensive income (loss) attributable to Avis Budget Group, Inc.$660 $74 $914 $(631)
Earnings (loss) per share
Basic$10.58 $0.64 $13.31 $(8.40)
Diluted$10.45 $0.63 $13.16 $(8.40)

See Notes to Consolidated Condensed Financial Statements (Unaudited).
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Avis Budget Group, Inc.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions, except par value)
(Unaudited)
September 30, 
2021
December 31, 2020
Assets
Current assets:
Cash and cash equivalents$886 $692 
Receivables, net813 647 
Other current assets568 456 
Total current assets2,267 1,795 
Property and equipment, net540 657 
Operating lease right-of-use assets2,309 2,560 
Deferred income taxes1,309 1,198 
Goodwill1,114 1,137 
Other intangibles, net738 774 
Other non-current assets311 244 
Total assets exclusive of assets under vehicle programs8,588 8,365 
Assets under vehicle programs:
Program cash55 72 
Vehicles, net11,925 8,153 
Receivables from vehicle manufacturers and other249 281 
Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party793 667 
13,022 9,173 
Total Assets$21,610 $17,538 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and other current liabilities$2,480 $2,034 
Short-term debt and current portion of long-term debt18 19 
Total current liabilities2,498 2,053 
Long-term debt4,009 4,191 
Long-term operating lease liabilities1,862 2,078 
Other non-current liabilities658 731 
Total liabilities exclusive of liabilities under vehicle programs9,027 9,053 
Liabilities under vehicle programs:
Debt2,632 1,777 
Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party8,117 5,080 
Deferred income taxes1,734 1,383 
Other298 400 
12,781 8,640 
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.01 par value—authorized 10 shares; none issued and outstanding, respectively
  
Common stock, $0.01 par value—authorized 250 shares; issued 137 shares, respectively
1 1 
Additional paid-in capital6,673 6,668 
Accumulated deficit(567)(1,470)
Accumulated other comprehensive loss(176)(187)
Treasury stock, at cost— 79 and 67 shares, respectively
(6,142)(5,167)
Stockholders’ equity attributable to Avis Budget Group, Inc.(211)(155)
Non-controlling interests13  
Total stockholders’ equity(198)(155)
Total Liabilities and Stockholders’ Equity$21,610 $17,538 
See Notes to Consolidated Condensed Financial Statements (Unaudited).
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Avis Budget Group, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited) 

 Nine Months Ended 
September 30,
 20212020
Operating activities
Net income (loss)$902 $(594)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Vehicle depreciation981 1,063 
Amortization of right-of-use assets562 710 
(Gain) loss on sale of vehicles, net(241)(123)
Non-vehicle related depreciation and amortization199 214 
Stock-based compensation25 6 
Amortization of debt financing fees25 24 
Early extinguishment of debt costs136 9 
Net change in assets and liabilities:
Receivables(175)156 
Income taxes and deferred income taxes200 (239)
Accounts payable and other current liabilities435 (59)
Operating lease liabilities(558)(707)
Other, net57 172 
Net cash provided by operating activities2,548 632 
Investing activities
Property and equipment additions(57)(75)
Proceeds received on asset sales3 5 
Net assets acquired (net of cash acquired)(17)(63)
Other, net(3) 
Net cash used in investing activities exclusive of vehicle programs(74)(133)
Vehicle programs:
Investment in vehicles(8,041)(4,749)
Proceeds received on disposition of vehicles3,310 7,386 
Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party(260)(243)
Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party134 222 
(4,857)2,616 
Net cash provided by (used in) investing activities(4,931)2,483 

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Avis Budget Group, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Continued)
(In millions)
(Unaudited)

 Nine Months Ended 
September 30,
 20212020
Financing activities
Proceeds from long-term borrowings1,100 991 
Payments on long-term borrowings(1,350)(303)
Issuance of common stock 15 
Repurchases of common stock(997)(119)
Debt financing fees(21)(24)
Contributions from non-controlling interests38  
Net cash provided by (used in) financing activities exclusive of vehicle programs(1,230)560 
Vehicle programs:
Proceeds from borrowings11,612 12,349 
Payments on borrowings(7,790)(15,280)
Debt financing fees(14)(12)
3,808 (2,943)
Net cash provided by (used in) financing activities2,578 (2,383)
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash(15)28 
Net increase in cash and cash equivalents, program and restricted cash180 760 
Cash and cash equivalents, program and restricted cash, beginning of period765 900 
Cash and cash equivalents, program and restricted cash, end of period$945 $1,660 
See Notes to Consolidated Condensed Financial Statements (Unaudited).
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Avis Budget Group, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions)
(Unaudited) 
Common StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Treasury StockStockholders’ Equity Attributable to Avis Budget Group, Inc.Non-controlling InterestsTotal Stockholders’ Equity
SharesAmountSharesAmount
Balance at June 30, 2021137.1 $1 $6,646 $(1,242)$(161)(67.1)$(5,152)$92 $ $92 
Comprehensive income:
Net income (loss)— — — 675 — — — 675 (1)674 
Other comprehensive loss— — — — (15)— — (15)— (15)
Total comprehensive income (loss)675 (15)660 (1)659 
Contributions from non-controlling interests— — 24 — — — — 24 14 38 
Repurchase of common stock— — — — — (11.6)(994)(994)— (994)
Net activity related to restricted stock units— — 3 — — — 4 7 — 7 
Balance at September 30, 2021137.1 $1 $6,673 $(567)$(176)(78.7)$(6,142)$(211)$13 $(198)
Balance at June 30, 2020137.1 $1 $6,670 $(1,425)$(223)(67.4)$(5,176)$(153)$ $(153)
Comprehensive income:
Net income— — — 45 — — — 45 45 
Other comprehensive income— — — — 29 — — 29 29 
Total comprehensive income45 29 74 — — 74 
Net activity related to restricted stock units— — 2 — — — 1 3 3 
Balance at September 30, 2020137.1 $1 $6,672 $(1,380)$(194)(67.4)$(5,175)$(76)$ $(76)
Common StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Treasury StockStockholders’ Equity Attributable to Avis Budget Group, Inc.Non-controlling InterestsTotal Stockholders’ Equity
SharesAmountSharesAmount
Balance at December 31, 2020137.1 $1 $6,668 $(1,470)$(187)(67.3)$(5,167)$(155)$ $(155)
Comprehensive income:
Net income (loss)— — — 903 — — — 903(1)902 
Other comprehensive income— — — — 11 — — 11— 11
Total comprehensive income (loss)90311914 (1)913 
Contributions from non-controlling interests— — 24 — — — — 241438
Net activity related to restricted stock units— — (19)— — 0.3 29 10 — 10 
Repurchases of common stock— — — — — (11.7)(1,004)(1,004)— (1,004)
Balance at September 30, 2021137.1 $1 $6,673 $(567)$(176)(78.7)$(6,142)$(211)$13 $(198)
Balance at December 31, 2019137.1 $1 $6,741 $(785)$(157)(63.2)$(5,144)$656 $ $656 
Cumulative effect of accounting change— — — (1)— — — (1)(1)
Comprehensive loss:
Net loss— — — (594)— — — (594)(594)
Other comprehensive loss— — — — (37)— — (37)(37)
Total comprehensive loss(594)(37)(631)— (631)
Non-controlling interests— — (2)— — — — (2)— (2)
Net activity related to restricted stock units— — (82)— — 0.4 82 —  
Issuance of common stock— — 15 — — 0.4 — 15 15 
Repurchases of common stock— — — — — (5.0)(113)(113)(113)
Balance at September 30, 2020137.1 $1 $6,672 $(1,380)$(194)(67.4)$(5,175)$(76)$ $(76)
See Notes to Consolidated Condensed Financial Statements (Unaudited).
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Avis Budget Group, Inc.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
(Unless otherwise noted, all dollar amounts in tables 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 unaudited Consolidated Condensed Financial Statements include the accounts and transactions of Avis Budget Group, Inc. and its subsidiaries, as well as entities in which Avis Budget Group, Inc. directly or indirectly has a controlling financial interest (collectively, the “Company”), and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial reporting.

The Company operates the following reportable business segments:

Americas—consisting primarily of (i) vehicle rental operations in North America, South America, Central America and the Caribbean, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which the Company does not operate directly.
International—consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which the Company does not operate directly.

The operating results of acquired businesses are included in the accompanying Consolidated Condensed Financial Statements from the dates of acquisition. Differences between the preliminary allocation of purchase price and the final allocation for the Company’s 2020 acquisitions of various licensees were not material. The Company consolidates joint venture activities within its Consolidated Condensed Financial Statements and records related non-controlling interests within stockholders’ equity and the statement of comprehensive income.

In presenting the Consolidated Condensed Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the Consolidated Condensed Financial Statements contain all adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These financial statements should be read in conjunction with the Company’s 2020 Form 10-K.

Liquidity and Management’s Plans

The COVID-19 pandemic, which rapidly spread across the globe in 2020, resulted in an economic slowdown and significant disruptions in travel that had a negative impact on our business, specifically a significant decline in vehicle rental volumes. During the first nine months of 2021, global travel restrictions were eased, leading to an increase in travel demand and an improvement in general economic conditions. The Company believes the full extent of the ongoing impact of this virus on its long-term operational performance and liquidity will depend on future developments, including those outside of its control, such as the spread of new variants of the virus which may be resistant to currently approved vaccines and the implementation of new or continued travel restrictions.

In April 2020, the Company entered into an amendment (the “Amendment”) to its senior credit facilities, consisting of an approximately $1.2 billion term loan maturing in 2027 and a $1.8 billion revolving credit facility maturing in 2023, which remained in place after the Amendment. The Amendment provided for relief from a quarterly-tested leverage covenant contained in the credit agreement governing the senior credit facilities until June 30, 2021, during which time additional restrictions and requirements were also imposed. The Company subsequently further amended the credit agreement in February 2021 to permit refinancing of certain existing indebtedness and in July 2021 to remove the restrictions imposed in April 2020, increase the revolving credit facility to $1.95 billion and extend the maturity of the facility to 2026. As a result, the
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Company has no meaningful corporate debt maturities until 2024.

The Company cannot assure its assumptions used to estimate its liquidity requirements will be correct because it has never previously experienced such volatility in demand, and as a consequence, its ability to be predictive is uncertain. The Company plans to finance routine Asset Backed Securities (“ABS”) maturities with program cash on hand, available revolving debt capacity, new term note issuances and vehicle sales. As a result, based on current operational assumptions, the Company believes it has adequate liquidity beyond the next twelve months.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are fully described in Note 2, “Summary of Significant Accounting Policies,” in its 2020 Form 10-K.

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

As of September 30,
20212020
Cash and cash equivalents$886 $1,564 
Program cash55 94 
Restricted cash (a)
4 2 
Total cash and cash equivalents, program and restricted cash$945 $1,660 
________
(a)Included within other current assets.

Vehicle Programs. The Company presents separately the financial data of its vehicle programs. These programs are distinct from the Company’s other activities since the assets under vehicle programs are generally funded through the issuance of debt that is collateralized by such assets. The income generated by these assets is used, in part, to repay the principal and interest associated with the debt. Cash inflows and outflows relating to the acquisition of such assets and the principal debt repayment or financing of such assets are classified as activities of the Company’s vehicle programs. The Company believes it is appropriate to segregate the financial data of its vehicle programs because, ultimately, the source of repayment of such debt is the realization of such assets.

Transaction-related costs, net. Transaction-related costs, net are classified separately in the Consolidated Condensed Statements of Comprehensive Income. These costs are comprised of expenses related to acquisition-related activities such as due diligence and other advisory costs, expenses related to the integration of the acquiree’s operations with those of the Company, including the implementation of best practices and process improvements, non-cash gains and losses related to re-acquired rights, expenses related to pre-acquisition contingencies and contingent consideration related to acquisitions.

Currency Transactions. The Company records the gain or loss on foreign-currency transactions on certain intercompany loans and the gain or loss on intercompany loan hedges within interest expense related to corporate debt, net. During the three months ended September 30, 2021 and 2020, the Company recorded an immaterial amount in each period, related to such items. During the nine months ended September 30, 2021 and 2020, the Company recorded an immaterial amount and a loss of $5 million, respectively, related to such items.

Divestitures. In May 2021, the Company completed the sale of its 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 nine months ended September 30, 2021, the Company recorded a loss of $14 million, net of the impact of foreign currency adjustments, within restructuring and other related charges. In addition, the Company paid severance to terminated employees of $1 million.

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Investments. As of September 30, 2021 and December 31, 2020, the Company had equity method investments with a carrying value of $70 million and $63 million, respectively, which are recorded within other non-current assets. Earnings from the Company’s equity method investments are reported within operating expenses. For the three and nine months ended September 30, 2021, the Company recorded $6 million and $8 million, respectively, and for the three and nine months ended September 30, 2020, the Company recorded $3 million and $4 million, respectively, related to its equity method investments.

Nonmarketable Equity Securities. As of December 31, 2020, the Company had nonmarketable equity securities with a carrying value of $8 million, which was recorded within other non-current assets. As of September 30, 2021, the securities are marketable equity securities with a fair value of $8 million, which are recorded within other non-current assets.

Revenues. Revenues are recognized under “Leases (Topic 842),” with the exception of royalty fee revenue derived from the Company’s licensees and revenue related to the Company’s customer loyalty program, which were approximately $34 million and $30 million during the three months ended September 30, 2021 and 2020, respectively and $93 million and $84 million during the nine months ended September 30, 2021 and 2020, respectively.

The following table presents the Company’s revenues disaggregated by geography:
 Three Months Ended 
September 30,
Nine Months Ended 
September 30,
2021202020212020
Americas$2,403 $1,114 $5,457 $2,936 
Europe, Middle East and Africa527 363 1,011 879 
Asia and Australasia71 57 276 232 
Total revenues$3,001 $1,534 $6,744 $4,047 

The following table presents the Company’s revenues disaggregated by brand:
Three Months Ended 
September 30,
Nine Months Ended 
September 30,
2021202020212020
Avis$1,588 $843 $3,509 $2,230 
Budget1,198 539 2,707 1,425 
Other215 152 528 392 
Total revenues$3,001 $1,534 $6,744 $4,047 
________
Other includes Zipcar and other operating brands.

Adoption of New Accounting Pronouncements

Simplifying the Accounting for Income Taxes

On January 1, 2021, as the result of a new accounting pronouncement, the Company adopted ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions and improving the application of existing guidance. The adoption of this accounting pronouncement did not have a material impact on the Company's Consolidated Condensed Financial Statements.

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Compensation—Retirement Benefits—Defined Benefit Plans

On January 1, 2021, as the result of a new accounting pronouncement, the Company adopted ASU 2018-14, “Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans,” which adds, removes, and clarifies disclosure requirements related to defined benefit pension and other postretirement plans. These changes are part of the FASB’s disclosure framework project, which the Board launched in 2014 to improve the effectiveness of disclosures in notes to financial statements. The adoption of this accounting pronouncement did not have a material impact on the Company's Consolidated Condensed Financial Statements.

2.    Leases
Lessor

The following table presents the Company’s lease revenues disaggregated by geography:
Three Months Ended 
September 30,
Nine Months Ended 
September 30,
2021202020212020
Americas$2,391 $1,099 $5,417 $2,896 
Europe, Middle East and Africa508 350 968 843 
Asia and Australasia68 55 266 224 
Total lease revenues$2,967 $1,504 $6,651 $3,963 

The following table presents the Company’s lease revenues disaggregated by brand:
Three Months Ended 
September 30,
Nine Months Ended 
September 30,
2021202020212020
Avis$1,573 $824 $3,464 $2,181 
Budget1,185 532 2,676 1,401 
Other209 148 511 381 
Total lease revenues$2,967 $1,504 $6,651 $3,963 
_______
Other includes Zipcar and other operating brands.

Lessee

The Company has operating and finance leases for rental locations, corporate offices, vehicle rental fleet and equipment. Many of the Company’s operating leases for rental locations contain concession agreements with various airport authorities that allow the Company to conduct its vehicle rental operations on site. In general, concession fees for airport locations are based on a percentage of total commissionable revenue as defined by each airport authority, some of which are subject to minimum annual guaranteed amounts. Concession fees other than minimum annual guaranteed amounts are not included in the measurement of operating lease Right of Use (“ROU”) assets and operating lease liabilities, and are recorded as variable lease expense as incurred. The Company’s operating leases for rental locations often also require the Company to pay or reimburse operating expenses.

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The components of lease expense are as follows:
Three Months Ended 
September 30,
Nine Months Ended 
September 30,
2021202020212020
Property leases (a)
Operating lease expense$146 $130 $419 $443 
Variable lease expense152 51 318 107 
Total property lease expense$298 $181 $737 $550 
__________
(a)    Primarily within operating expense and includes $(4) million and $11 million for the three months ended September 30, 2021 and 2020, respectively, and $12 million and $41 million for the nine months ended September 30, 2021 and 2020, respectively, of minimum annual guaranteed rent in excess of concession fees, net, as defined in our rental concession agreements.

Supplemental balance sheet information related to leases is as follows:
As of 
September 30, 2021
As of 
December 31, 2020
Property leases
Operating lease ROU assets$2,309 $2,560 
Short-term operating lease liabilities (a)
$484 $514 
Long-term operating lease liabilities1,862 2,078 
Operating lease liabilities$2,346 $2,592 
Weighted average remaining lease term8.2 years8.4 years
Weighted average discount rate3.86 %3.86 %
_________
(a)    Included in Accounts payable and other current liabilities.

Supplemental cash flow information related to leases is as follows:
Nine Months Ended 
September 30,
20212020
Cash payments for lease liabilities within operating activities:
Property operating leases$445 $554 
Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:
Property operating leases$226 $588 

3.     Restructuring and Other Related Charges

Restructuring

During the first quarter of 2021, the Company initiated a global restructuring plan to focus on cost discipline by reviewing headcounts, facilities and contractor agreements. The Company is transforming its business as it prepares to exit the COVID-19 crisis by controlling fixed costs and matching variable costs to demand (“T21”). As of September 30, 2021, the Company formally communicated the termination of employment to approximately 260 employees, as part of this process, and terminated approximately 255 of these employees. The Company expects further restructuring expense of approximately $20 million related to this initiative to be incurred in 2021.

During the first quarter of 2020, the Company initiated a global restructuring plan to reduce operating costs, such as headcount and facilities, due to declining reservations and revenue resulting from the COVID-19
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outbreak (“2020 Optimization Plan”). The Company expects no further restructuring expense related to this initiative.

During the first quarter of 2019, the Company initiated a restructuring plan to drive global efficiency by improving processes and consolidating functions, and to create new objectives and strategies for its truck rental operations in the U.S. by reducing headcount, large vehicles and rental locations (“T19”). This initiative is complete.

The following tables summarize the changes to our restructuring-related liabilities and identifies the amounts recorded within the Company’s reporting segments for restructuring charges and corresponding payments and utilizations:
AmericasInternationalTotal
Balance as of January 1, 2021$3 $6 $9 
Restructuring expense:
T213 13 16 
T19(2) (2)
Restructuring payment/utilization:
T21(3)(12)(15)
2020 Optimization Plan(2)(3)(5)
T192  2 
Balance as of September 30, 2021$1 $4