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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 March 31, 2022

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 48,287,272 shares as of April 29, 2022.


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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, the continued restrictions that have been placed on travel in many countries and the resulting adverse impact on the global economy, and the potential effects on the global economy and markets as a result of the ongoing military conflict between Russia and Ukraine. 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, resulting from inflation or otherwise, 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;

a deterioration in 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, including the ongoing military conflict between Russia and Ukraine, or civil unrest in the locations in which we operate, and the potential effects of sanctions on the world economy and markets and/or international trade;

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 as a result of COVID-19, the ongoing military conflict between Russia and Ukraine, and any embargos on oil sales imposed on or by the Russian government;

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, compliance with privacy and data protection regulation, and the effects of any potential increase in cyberattacks on the world economy and markets and/or international trade;

any impact on us from the actions of our third-party vendors, licensees, dealers, 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;

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 or intangible assets; 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 if future results are materially different from those forecast or anticipated. Other factors and assumptions not identified above, including those discussed in “Management’s Discussion and Analysis of Financial Condition and Results
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of Operations,” in 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 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 17, 2022 (the “2021 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 
March 31,
20222021
Revenues$2,432 $1,372 
Expenses
Operating1,147 832 
Vehicle depreciation and lease charges, net111 254 
Selling, general and administrative283 182 
Vehicle interest, net77 75 
Non-vehicle related depreciation and amortization58 68 
Interest expense related to corporate debt, net:
Interest expense53 61 
Early extinguishment of debt 129 
Restructuring and other related charges8 20 
Transaction-related costs, net 1 
Total expenses1,737 1,622 
Income (loss) before income taxes695 (250)
Provision for (benefit from) income taxes168 (80)
Net income (loss)527 (170)
Less: net loss attributable to non-controlling interests(2) 
Net income (loss) attributable to Avis Budget Group, Inc.$529 $(170)
Comprehensive income (loss) attributable to Avis Budget Group, Inc.$568 $(146)
Earnings (loss) per share
Basic$9.96 $(2.43)
Diluted$9.71 $(2.43)

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)
March 31, 
2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents$550 $534 
Receivables, net779 775 
Other current assets439 538 
Total current assets1,768 1,847 
Property and equipment, net531 537 
Operating lease right-of-use assets2,417 2,368 
Deferred income taxes1,540 1,615 
Goodwill1,096 1,108 
Other intangibles, net706 724 
Other non-current assets379 382 
Total assets exclusive of assets under vehicle programs8,437 8,581 
Assets under vehicle programs:
Program cash85 89 
Vehicles, net13,987 12,866 
Receivables from vehicle manufacturers and other182 222 
Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party882 842 
15,136 14,019 
Total Assets$23,573 $22,600 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and other current liabilities$2,675 $2,389 
Short-term debt and current portion of long-term debt27 19 
Total current liabilities2,702 2,408 
Long-term debt4,678 3,990 
Long-term operating lease liabilities1,918 1,910 
Other non-current liabilities585 625 
Total liabilities exclusive of liabilities under vehicle programs9,883 8,933 
Liabilities under vehicle programs:
Debt2,356 2,542 
Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party9,743 8,848 
Deferred income taxes2,323 2,242 
Other251 244 
14,673 13,876 
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock, $0.01 par value—authorized 10 shares; nonene issued and outstanding, respectively
  
Common stock, $0.01 par value—authorized 250 shares; issued 137 shares, respectively
1 1 
Additional paid-in capital6,646 6,676 
Retained earnings (accumulated deficit)344 (185)
Accumulated other comprehensive loss(94)(133)
Treasury stock, at cost— 87 and 81 shares, respectively
(7,889)(6,579)
Stockholders’ equity attributable to Avis Budget Group, Inc.(992)(220)
Non-controlling interests9 11 
Total stockholders’ equity(983)(209)
Total Liabilities and Stockholders’ Equity$23,573 $22,600 

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) 

 Three Months Ended 
March 31,
 20222021
Operating activities
Net income (loss)$527 $(170)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Vehicle depreciation381 259 
Amortization of right-of-use assets194 236 
(Gain) loss on sale of vehicles, net(303)(49)
Non-vehicle related depreciation and amortization58 68 
Stock-based compensation6 4 
Amortization of debt financing fees8 8 
Early extinguishment of debt costs 129 
Net change in assets and liabilities:
Receivables9 24 
Income taxes and deferred income taxes158 (80)
Accounts payable and other current liabilities303 181 
Operating lease liabilities(195)(234)
Other, net2 (40)
Net cash provided by operating activities1,148 336 
Investing activities
Property and equipment additions(37)(12)
Proceeds received on asset sales1 2 
Net assets acquired (net of cash acquired)(1)(4)
Other, net23  
Net cash used in investing activities exclusive of vehicle programs(14)(14)
Vehicle programs:
Investment in vehicles(2,727)(3,032)
Proceeds received on disposition of vehicles1,616 1,679 
Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party(84)(24)
Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party44 25 
(1,151)(1,352)
Net cash used in investing activities(1,165)(1,366)

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

 Three Months Ended 
March 31,
 20222021
Financing activities
Proceeds from long-term borrowings729 1,100 
Payments on long-term borrowings(5)(1,101)
Repurchases of common stock(1,299)(19)
Debt financing fees(6)(12)
Net cash used in financing activities exclusive of vehicle programs(581)(32)
Vehicle programs:
Proceeds from borrowings4,016 3,481 
Payments on borrowings(3,403)(2,535)
Debt financing fees(2) 
611 946 
Net cash provided by financing activities30 914 
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash(2)(10)
Net increase (decrease) in cash and cash equivalents, program and restricted cash11 (126)
Cash and cash equivalents, program and restricted cash, beginning of period626 765 
Cash and cash equivalents, program and restricted cash, end of period$637 $639 
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 CapitalRetained Earnings (Accumulated Deficit)Accumulated Other Comprehensive Income (Loss)Treasury StockStockholders’ Equity Attributable to Avis Budget Group, Inc.Non-controlling InterestsTotal Stockholders’ Equity
SharesAmountSharesAmount
Balance at December 31, 2021137.1 $1 $6,676 $(185)$(133)(81.2)$(6,579)$(220)$11 $(209)
Comprehensive income (loss):
Net income (loss)— — — 529 — — — 529 (2)527 
Other comprehensive income— — — — 39 — — 39 — 39 
Total comprehensive income (loss)529 39 568 (2)566 
Net activity related to restricted stock units— — (30)— — 0.2 (3)(33)— (33)
Repurchase of common stock— — — — — (6.4)(1,307)(1,307)— (1,307)
Balance at March 31, 2022137.1 $1 $6,646 $344 $(94)(87.4)$(7,889)$(992)$9 $(983)
Balance at December 31, 2020137.1 $1 $6,668 $(1,470)$(187)(67.3)$(5,167)$(155)$ $(155)
Comprehensive income (loss):
Net loss— — — (170)— — — (170)— (170)
Other comprehensive income— — — — 24 — — 24 — 24 
Total comprehensive income (loss)(170)24 (146)— (146)
Net activity related to restricted stock units— — (26)— — 0.2 21 (5)— (5)
Repurchases of common stock(0.1)(10)(10)(10)
Balance at March 31, 2021137.1 $1 $6,642 $(1,640)$(163)(67.2)$(5,156)$(316)$ $(316)
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, “we”, “our”, “us”, or the “Company”), and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial reporting.

We operate the following reportable business segments:

Americas—consisting primarily of (i) vehicle rental operations in North America, South America, Central America and the Caribbean, (ii) car sharing operations in certain of these markets, and (iii) licensees in certain areas in which we do not operate directly.
International—consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in certain areas in which we do 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 our 2021 acquisitions of various licensees were not material. We consolidate joint venture activities when we have more than 50% controlling interests and record non-controlling interests within stockholders’ equity and the statement of comprehensive income equal to the percentage of ownership interest retained in such entities by the respective non-controlling party.

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 our 2021 Annual Report on Form 10-K (the “2021 Form 10-K”).

Summary of Significant Accounting Policies

Our significant accounting policies are fully described in Note 2, “Summary of Significant Accounting Policies,” in our 2021 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 March 31,
20222021
Cash and cash equivalents$550 $576 
Program cash85 61 
Restricted cash (a)
2 2 
Total cash and cash equivalents, program and restricted cash$637 $639 
________
(a)Included within other current assets.

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

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 primarily related to acquisition-related activities such as due diligence and other advisory costs, expenses related to the integration of the acquiree’s operations with those of our operations, 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. We record 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.

Divestitures. In February 2022, we completed the sale of our operations in the United States Virgin Islands for $13 million, for the right to operate the Avis brand. During the three months ended March 31, 2022, we recorded a gain of $2 million within restructuring and other related charges.

In March 2022, we completed the sale of our operations in the Netherlands for $15 million, subject to working capital adjustments, for the right to operate the Avis and Budget brands. During the three months ended March 31, 2022, we recorded a loss of $7 million, net of impact of foreign currency adjustments, within restructuring and other related charges.

Investments. As of March 31, 2022 and December 31, 2021, we had equity method investments with a carrying value of $71 million and $72 million, respectively, which are recorded within other non-current assets. Earnings from our equity method investments are reported within operating expenses. For the three months ended March 31, 2022 and 2021, we recorded an immaterial amount related to our equity method investments, in each period.

Revenues. Revenues are recognized under “Leases (Topic 842),” with the exception of royalty fee revenue derived from our licensees and revenue related to our customer loyalty program, which were approximately $34 million and $40 million during the three months ended March 31, 2022 and 2021, respectively.

The following table presents our revenues disaggregated by geography:
 Three Months Ended 
March 31,
20222021
Americas$2,000 $1,080 
Europe, Middle East and Africa324 203 
Asia and Australasia108 89 
Total revenues$2,432 $1,372 
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The following table presents our revenues disaggregated by brand:
Three Months Ended 
March 31,
20222021
Avis$1,281 $717 
Budget982 524 
Other169 131 
Total revenues$2,432 $1,372 
________
Other includes Zipcar and other operating brands.

Recently Issued Accounting Pronouncements

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which amends Topic 805 to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. ASU 2021-08 becomes effective for us on January 1, 2023. Early adoption is permitted on a retrospective or prospective basis. The adoption of this accounting pronouncement is not expected to have a material impact on our Consolidated Condensed Financial Statements.

Reference Rate Reform

In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848),” which amends ASU 2020-04 and clarifies the scope and guidance of Topic 848 to allow derivatives impacted by the reference rate reform to qualify for certain optional expedients and exceptions for contract modifications and hedge accounting. The guidance is optional and is effective for a limited period of time through December 31, 2022. As of March 31, 2022, this guidance had no impact on our Consolidated Condensed Financial Statements and we will continue to evaluate this guidance.

2.    Leases
Lessor

The following table presents our lease revenues disaggregated by geography:
Three Months Ended 
March 31,
20222021
Americas$1,985 $1,054 
Europe, Middle East and Africa309 192 
Asia and Australasia104 86 
Total lease revenues$2,398 $1,332 

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The following table presents our lease revenues disaggregated by brand:
Three Months Ended 
March 31,
20222021
Avis$1,261 $690 
Budget972 516 
Other165 126 
Total lease revenues$2,398 $1,332 
_______
Other includes Zipcar and other operating brands.

Lessee

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

The components of lease expense are as follows:
Three Months Ended 
March 31,
20222021
Property leases (a)
Operating lease expense$161 $139 
Variable lease expense102 54 
Total property lease expense$263 $193 
__________
(a)    Primarily within operating expense and includes $(7) million and $19 million for the three months ended March 31, 2022 and 2021, 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 
March 31, 2022
As of 
December 31, 2021
Property leases
Operating lease ROU assets$2,417 $2,368 
Short-term operating lease liabilities (a)
$536 $496 
Long-term operating lease liabilities1,918 1,910 
Operating lease liabilities$2,454 $2,406 
Weighted average remaining lease term8.6 years8.8 years
Weighted average discount rate3.81 %3.84 %
_________
(a)    Included in Accounts payable and other current liabilities.

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Supplemental cash flow information related to leases is as follows:
Three Months Ended 
March 31,
20222021
Cash payments for lease liabilities within operating activities:
Property operating leases$164 $202 
Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:
Property operating leases$213 $169 

3.     Restructuring and Other Related Charges

Restructuring

During the first quarter of 2021, we initiated a global restructuring plan to focus on cost discipline by reviewing headcounts, facilities and contractor agreements. We are transforming our business as we prepare to exit the COVID-19 crisis by controlling fixed costs and matching variable costs to demand (“T21”). During the quarter ended March 31, 2022, we formally communicated the termination of employment to approximately 45 employees, as part of this process, and terminated approximately 40 of these employees. We expect no further restructuring expense to be incurred in 2022 under this program.

The following tables summarize the changes to our restructuring-related liabilities and identifies the amounts recorded within our reporting segments for restructuring charges and corresponding payments and utilizations:
AmericasInternationalTotal
Balance as of January 1, 2022$2 $8 $10 
Restructuring expense:
T211 2 3 
Restructuring payment/utilization:
T21(1)(6)(7)
Balance as of March 31, 2022$2 $4 $6 
 PersonnelFacility
Related
Other (a)
Total
Balance as of January 1, 2022$7 $2 $1 $10 
Restructuring expense:
T213   3 
Restructuring payment/utilization:
T21(6)(1) (7)
Balance as of March 31, 2022$4 $1 $1 $6 
_________
(a)Includes expenses primarily related to the disposition of vehicles.

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4.    Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (“EPS”) (shares in millions): 
Three Months Ended 
March 31,
20222021
Net income (loss) attributable to Avis Budget Group, Inc. for basic and diluted EPS$529 $(170)
Basic weighted average shares outstanding53.1 69.9 
Non-vested stock (a)
1.4  
Diluted weighted average shares outstanding54.5 69.9 
Earnings (loss) per share:
Basic$9.96 $(2.43)
Diluted$9.71 $(2.43)
__________
(a)For the three months ended March 31, 2022 and 2021, 0.1 million and 1.1 million non-vested stock awards, respectively, have an anti-dilutive effect and therefore are excluded from the computation of diluted weighted average shares outstanding.

5.    Other Current Assets

Other current assets consisted of:
As of March 31, 2022As of December 31, 2021
Prepaid expenses$246 $205 
Sales and use taxes106 238 
Other87 95 
Other current assets$439 $538 

6.    Intangible Assets

Intangible assets consisted of:
 As of March 31, 2022As of December 31, 2021
 Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Amortized Intangible Assets
License agreements$295 $203 $92 $298 $193 $105 
Customer relationships253 204 49 257 204 53 
Other49 36 13 51 36 15 
Total$597 $443 $154 $606 $433 $173 
Unamortized Intangible Assets
Goodwill$1,096 $1,108 
Trademarks$552 $551 

For the three months ended March 31, 2022 and 2021, amortization expense related to amortizable intangible assets was approximately $16 million and $18 million, respectively. Based on our amortizable intangible assets at March 31, 2022, we expect amortization expense of approximately $30 million for the remainder of 2022, $27 million for 2023, $23 million for 2024, $16 million for 2025, $15 million for 2026 and $12 million for 2027, excluding effects of currency exchange rates.
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7.    Vehicle Rental Activities

The components of vehicles, net within assets under vehicle programs were as follows: 
As ofAs of
March 31,December 31,
20222021
Rental vehicles$15,768 $14,612 
Less: Accumulated depreciation(1,955)(1,911)
13,813 12,701 
Vehicles held for sale174 165 
Vehicles, net$13,987 $12,866 

The components of vehicle depreciation and lease charges, net are summarized below: 
 Three Months Ended 
March 31,
20222021
Depreciation expense$381 $259 
Lease charges33 44 
(Gain) loss on sale of vehicles, net (303)(49)
Vehicle depreciation and lease charges, net$111 $254 

At March 31, 2022 and 2021, we had payables related to vehicle purchases included in liabilities under vehicle programs - other of $150 million and $344 million, respectively, and receivables related to vehicle sales included in assets under vehicle programs - receivables from vehicle manufacturers and other of $64 million and $195 million, respectively.

8.    Income Taxes

Our effective tax rate for the three months ended March 31, 2022 and 2021 were provision and (benefit) of 24.2% and (32.0)%, respectively. Such rates differed from the Federal Statutory rate of 21.0% primarily due to foreign taxes on our International operations and state taxes.

9.    Accounts Payable and Other Current Liabilities

Accounts payable and other current liabilities consisted of: 
As ofAs of
March 31,December 31,
20222021
Short-term operating lease liabilities$536 $496 
Accounts payable513 407 
Deferred lease revenues - current322 185 
Accrued advertising and marketing248 218 
Accrued sales and use taxes225 313 
Accrued payroll and related175 193 
Public liability and property damage insurance liabilities - current160 159 
Other496 418 
Accounts payable and other current liabilities$2,675 $2,389 

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10.    Long-term Corporate Debt and Borrowing Arrangements

Long-term corporate debt and borrowing arrangements consisted of:
As ofAs of
Maturity
Date
March 31,December 31,
20222021
4.125% euro-denominated Senior Notes
November 2024$332 $341 
4.500% euro-denominated Senior Notes
May 2025277 284 
4.750% euro-denominated Senior Notes
January 2026387 398 
5.750% Senior Notes
July 2027729 728 
4.750% Senior Notes
April 2028500 500 
5.375% Senior Notes
March 2029600 600 
Floating Rate Term Loan (a)
August 20271,184 1,187 
Floating Rate Term LoanMarch 2029729  
Other (b)
20 19 
Deferred financing fees(53)(48)
Total4,705 4,009 
Less: Short-term debt and current portion of long-term debt27 19 
Long-term debt$4,678 $3,990 
__________
(a)The floating rate term loan is part of our senior revolving credit facility, which is secured by pledges of capital stock of certain of our subsidiaries, and liens on substantially all of our intellectual property and certain other real and personal property. As of March 31, 2022, the floating rate term loan due 2027 bears interest at one-month LIBOR plus 175 basis points, for an aggregate rate of 2.21%. We have entered into a swap to hedge $700 million of its interest rate exposure related to the floating rate term loan at an aggregate rate of 4.75%.
(b)Primarily includes finance leases which are secured by liens on the related assets.

In March 2022, we entered into a $750 million Floating Rate Term Loan due March 2029, at a price of 97% of the aggregate principal amount, with interest paid monthly, which is part of our senior credit facilities. The Floating Rate Term Loan due March 2029 bears interest at one-month Secured Overnight Financing Rate (“SOFR”) plus 350 basis points for an aggregate rate of 4.00%.

Committed Credit Facilities and Available Funding Arrangements

As of March 31, 2022, the committed corporate credit facilities available to us and/or our subsidiaries were as follows: 
Total
Capacity
Outstanding
Borrowings
Letters of Credit IssuedAvailable
Capacity
Senior revolving credit facility maturing 2026 (a)
$1,950 $ $1,596 $354 
__________
(a)The senior revolving credit facility bears interest at one-month LIBOR plus 175 basis points and is part of our senior credit facilities, which include the floating rate term loan and the senior revolving credit facility, and which are secured by pledges of capital stock of certain of our subsidiaries, liens on substantially all of our intellectual property and certain other real and personal property.

Debt Covenants

The agreements governing our indebtedness contain restrictive covenants, including restrictions on dividends paid to us by certain of our subsidiaries, the incurrence of additional indebtedness by us and certain of our subsidiaries, acquisitions, mergers, liquidations, and sale and leaseback transactions. Our senior credit facility also contains a maximum leverage ratio requirement. As of March 31, 2022, we were in compliance with the financial covenants governing our indebtedness.

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11.    Debt Under Vehicle Programs and Borrowing Arrangements

Debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding (AESOP) LLC (“Avis Budget Rental Car Funding”), consisted of:
As ofAs of
March 31,December 31,
20222021
Americas - Debt due to Avis Budget Rental Car Funding$9,779 $8,889 
Americas - Debt borrowings 615 612 
International - Debt borrowings 1,573 1,757 
International - Finance leases 156 177 
Other19 3 
Deferred financing fees (a)
(43)(48)
Total$12,099 $11,390 
__________
(a)Deferred financing fees related to Debt due to Avis Budget Rental Car Funding as of March 31, 2022 and December 31, 2021 were $36 million and $41 million, respectively.

Debt Maturities

The following table provides the contractual maturities of our debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding, at March 31, 2022:
 
Debt under Vehicle Programs (a)
Within 1 year (b)
$2,145 
Between 1 and 2 years (c)
1,413 
Between 2 and 3 years (d)
5,545 
Between 3 and 4 years1,532 
Between 4 and 5 years1,507 
Total$12,142 
__________
(a)    Vehicle-backed debt primarily represents asset-backed securities.
(b)    Includes $0.8 billion of bank and bank-sponsored facilities.
(c)    Includes $0.2 billion of bank and bank-sponsored facilities.
(d)    Includes $3.8 billion of bank and bank-sponsored facilities.

Committed Credit Facilities and Available Funding Arrangements

As of March 31, 2022, available funding under our vehicle programs, including related party debt due to Avis Budget Rental Car Funding, consisted of:
Total
Capacity (a)
Outstanding
Borrowings (b)
Available
Capacity
Americas - Debt due to Avis Budget Rental Car Funding$10,103 $9,779 $324 
Americas - Debt borrowings985 615 370 
International - Debt borrowings2,590 1,573 1,017 
International - Finance leases192 156 36 
Other19 19  
Total$13,889 $12,142 $1,747 
__________
(a)    Capacity is subject to maintaining sufficient assets to collateralize debt.
(b)    The outstanding debt is collateralized by vehicles and related assets of $11.5 billion for Americas - Debt due to Avis Budget Rental Car Funding; $0.9 billion for Americas - Debt borrowings; $2.0 billion for International - Debt borrowings; and $0.2 billion for International - Finance leases.

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Debt Covenants

The agreements under our vehicle-backed funding programs contain restrictive covenants, including restrictions on dividends paid to us by certain of our subsidiaries and restrictions on indebtedness, mergers, liens, liquidations, and sale and leaseback transactions and in some cases also require compliance with certain financial requirements. As of March 31, 2022, we are not aware of any instances of non-compliance with any of the financial covenants contained in the debt agreements under our vehicle-backed funding programs.

12.    Commitments and Contingencies

Contingencies

In 2006, we completed the spin-offs of our Realogy and Wyndham subsidiaries. We do not believe that the impact of any resolution of pre-existing contingent liabilities in connection with the spin-offs should result in a material liability to us in relation to our consolidated financial position or liquidity, as Realogy and Wyndham each have agreed to assume responsibility for these liabilities. We are also named in litigation that is primarily related to the businesses of our former subsidiaries, including Realogy and Wyndham. We are entitled to indemnification from such entities for any liability resulting from such litigation.

In November 2011, Jose Mendez v. Avis Budget Group Inc., et al. was filed in U.S. District Court for the District of New Jersey. The plaintiff seeks to represent a purported nationwide class and two sub-classes of certain renters of vehicles from our Avis and Budget subsidiaries from April 2007 through December 2015. The plaintiff seeks damages in connection with claims relating to our electronic toll service, including that administrative fees and toll charges were not properly disclosed to customers and/or were excessive. Plaintiff’s motion for class certification was approved by the Court in November 2017. The parties are currently engaged in settlement discussions. We have been named as a defendant in other purported consumer class action law suits, including a class action filed against us in Florida seeking damages in connection with a breach of contract claim and two purported class action suits filed against us in New Jersey, one related to fines and fees charged to car renters by us for violations incurred during the course of their rental and another related to ancillary charges at our Payless subsidiary. In the Florida lawsuit, a motion for preliminary approval of a proposed settlement has been filed with the Court.

We are currently involved, and in the future may be involved, in claims and/or legal proceedings, including class actions, and governmental inquiries that are incidental to our vehicle rental and car sharing operations, including, among others, contract and licensee disputes, competition matters, employment and wage-and-hour claims, insurance and liability claims, intellectual property claims, business practice disputes and other regulatory, environmental, commercial and tax matters. Litigation is inherently unpredictable and, although we believe that our accruals are adequate and/or that we have valid defenses in these matters, unfavorable resolutions could occur. We estimate that the potential exposure resulting from adverse outcomes of current legal proceedings in which it is reasonably possible that a loss may be incurred could, in the aggregate, be up to approximately $35 million in excess of amounts accrued as of March 31, 2022. We do not believe that the impact should result in a material liability to us in relation to our consolidated financial condition or results of operations.

Commitments to Purchase Vehicles

We maintain agreements with vehicle manufacturers under which we have agreed to purchase approximately $5.1 billion of vehicles from manufacturers over the next 12 months, a $0.8 billion decrease compared to December 31, 2021, financed primarily through the issuance of vehicle-backed debt and cash received upon the disposition of vehicles. Certain of these commitments are subject to the vehicle manufacturers satisfying their obligations under their respective repurchase and guaranteed depreciation agreements.

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Concentrations

Concentrations of credit risk as of March 31, 2022 include (i) risks related to our repurchase and guaranteed depreciation agreements with domestic and foreign car manufacturers, primarily with respect to receivables for program cars that have been disposed but for which we have not yet received payment from the manufacturers and (ii) risks related to Realogy and Wyndham, including receivables of $26 million and $16 million, respectively, related to certain contingent, income tax and other corporate liabilities assumed by Realogy and Wyndham in connection with their disposition.

13.    Stockholders’ Equity

Share Repurchases

Our Board of Directors has authorized the repurchase of up to $5.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded most recently in March 2022 (the “Stock Repurchase Program”). During the three months ended March 31, 2022, we repurchased approximately 6.4 million shares of common stock at a cost of approximately $1.3 billion under the program. As of March 31, 2022, approximately $652 million of authorization remains available to repurchase common stock under the program.

Total Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net income (loss).

The components of other comprehensive income (loss) were as follows: 
 Three Months Ended 
March 31,
 20222021
Net income (loss)$527 $(170)
Less: net loss attributable to non-controlling interests(2) 
Net income (loss) attributable to Avis Budget Group, Inc.529 (170)
Other comprehensive income (loss):
Currency translation adjustments (net of tax of $(3) and $(12), respectively)
7 (14)
Net unrealized gain (loss) on cash flow hedges (net of tax of $(11) and $3, respectively)
30 35 
Minimum pension liability adjustment (net of tax of $0 and $0, respectively)
2 3 
39 24 
Comprehensive income (loss) attributable to Avis Budget Group, Inc.$568