Avis Budget Group: SEC Filing

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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 June 30, 2024


			☐			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)

Delaware

06-0918165

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

379 Interpace Parkway

Parsippany,

07054

(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 class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.01	CAR	The 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 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 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 Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging 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 35,664,115 shares as of August 2, 2024.

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		Page
PART I	Financial Information
Item 1.	Financial Statements
	Consolidated Condensed Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	4
	Consolidated Condensed Balance Sheets as of June 30, 2024 and December 31, 2023 (Unaudited)	5
	Consolidated Condensed Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited)	6
	Consolidated Condensed Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)	8
	Notes to Consolidated Condensed Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39
Item 4.	Controls and Procedures	39
PART II	Other Information
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 5.	Other Information	40
Item 6.	Exhibits	40
	Signatures	41

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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,” “forecasts,” “guidance,” 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. These factors include, but are not limited to:

•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, including due to labor actions or otherwise, 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;

•levels of and volatility in travel demand, including future volatility in airline passenger traffic;

•a deterioration in economic conditions, resulting in a recession or otherwise, particularly during our peak season or in key market segments;

•an occurrence or threat of terrorism, pandemic diseases such as COVID-19, natural disasters, military conflicts, including the ongoing military conflicts in the Middle East and Eastern Europe, 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 a global pandemic such as COVID-19, inflation, the ongoing military conflicts in the Middle East and Eastern Europe, and any embargoes on oil sales imposed on or by the Russian government;

•our ability to successfully implement or achieve our business plans and 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;

•the performance of the used vehicle market from time to time, including our ability to dispose of vehicles in the used vehicle market on attractive terms;

•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

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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, fuel 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 or 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, recent and future interest rate increases, which increase our financing costs, 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 forecasted or anticipated. Other factors and assumptions not identified above, including those discussed in “Management’s Discussion and Analysis of Financial Condition and Results 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 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 16, 2024 (the “2023 Form 10-K”), may cause actual results to differ materially from those projected in any forward-looking statements.

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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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues	$	3,048	$	3,123	$	5,599	$	5,680

Expenses
Operating	1,532		1,475		2,876		2,782
Vehicle depreciation and lease charges, net	733		375		1,369		640
Selling, general and administrative	348		378		673		702
Vehicle interest, net	244		172		483		305
Non-vehicle related depreciation and amortization	58		52		119		108
Interest expense related to corporate debt, net:
Interest expense	88		68		171		141
Early extinguishment of debt	1		—		1		—
Restructuring and other related charges	14		1		17		5
Transaction-related costs, net	1		—		2		—
Other (income) expense, net	2		4		3		2
Total expenses	3,021		2,525		5,714		4,685

Income (loss) before income taxes	27		598		(115)		995
Provision for (benefit from) income taxes	12		162		(17)		247
Net income (loss)	15		436		(98)		748
Less: net income attributable to non-controlling interests	1		1		2		1
Net income (loss) attributable to Avis Budget Group, Inc.	$	14	$	435	$	(100)	$	747

Comprehensive income (loss) attributable to Avis Budget Group, Inc.	$	19	$	456	$	(139)	$	758

Earnings (loss) per share
Basic	$	0.41	$	11.13	$	(2.80)	$	19.16
Diluted	$	0.41	$	11.01	$	(2.80)	$	18.93

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)


		June 30, 2024		December 31, 2023
Assets
Current assets:
	Cash and cash equivalents	$	511	$	555
	Receivables, net	1,062		900
	Other current assets	887		684
Total current assets		2,460		2,139

Property and equipment, net		704		719
Operating lease right-of-use assets		2,754		2,654
Deferred income taxes		1,715		1,868
Goodwill		1,087		1,099
Other intangibles, net		650		670
Other non-current assets		445		441
Total assets exclusive of assets under vehicle programs		9,815		9,590

Assets under vehicle programs:
	Program cash	68		85
	Vehicles, net	22,474		21,240
	Receivables from vehicle manufacturers and other	326		443
	Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party	1,199		1,211
		24,067		22,979
Total Assets		$	33,882	$	32,569

Liabilities and Stockholders’ Equity
Current liabilities:
	Accounts payable and other current liabilities	$	2,838	$	2,627
	Short-term debt and current portion of long-term debt	28		32
Total current liabilities		2,866		2,659

Long-term debt		5,233		4,791
Long-term operating lease liabilities		2,234		2,117
Other non-current liabilities		505		528
Total liabilities exclusive of liabilities under vehicle programs		10,838		10,095

Liabilities under vehicle programs:
	Debt	3,974		3,496
	Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party	15,560		15,441
	Deferred income taxes	3,231		3,418
	Other	761		462
		23,526		22,817
Commitments and contingencies (Note 12)

Stockholders’ equity:
	Preferred stock, $0.01 par value—authorized 10 shares; none issued and outstanding, in each period	—		—
	Common stock, $0.01 par value—authorized 250 shares; issued 137 shares, in each period	1		1
	Additional paid-in capital	6,616		6,634
	Retained earnings	3,751		3,854
	Accumulated other comprehensive loss	(135)		(96)
	Treasury stock, at cost—101 and 102 shares, respectively	(10,723)		(10,742)
Stockholders’ equity attributable to Avis Budget Group, Inc.		(490)		(349)
	Non-controlling interests	8		6
Total stockholders’ equity		(482)		(343)
Total Liabilities and Stockholders’ Equity		$	33,882	$	32,569

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)


			Six Months Ended June 30,
			2024		2023
Operating activities
Net income (loss)			$	(98)	$	748
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Vehicle depreciation		1,217		1,017
	Amortization of right-of-use assets		533		503
	(Gain) loss on sale of vehicles, net		78		(455)
	Non-vehicle related depreciation and amortization		119		108

	Stock-based compensation		13		16
	Amortization of debt financing fees		24		19
	Early extinguishment of debt costs		1		—
	Net change in assets and liabilities:
		Receivables	(94)		(52)
		Income taxes and deferred income taxes	(40)		150
		Accounts payable and other current liabilities	80		108
	Operating lease liabilities		(525)		(500)
	Other, net		165		120
Net cash provided by operating activities			1,473		1,782

Investing activities
Property and equipment additions			(98)		(105)
Proceeds received on asset sales			1		—
Net assets acquired (net of cash acquired)			(2)		(33)


Net cash used in investing activities exclusive of vehicle programs			(99)		(138)

Vehicle programs:
	Investment in vehicles		(6,895)		(8,881)
	Proceeds received on disposition of vehicles		4,427		3,977
	Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party		(373)		(329)
	Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party		385		157
			(2,456)		(5,076)
Net cash used in investing activities			(2,555)		(5,214)

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Avis Budget Group, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Continued)

(In millions)

(Unaudited)


		Six Months Ended June 30,
		2024		2023
Financing activities
Proceeds from long-term borrowings		$	869	$	—
Payments on long-term borrowings		(390)		(15)
Net change in short-term borrowings		—		3

Repurchases of common stock		(16)		(200)
Debt financing fees		(16)		(2)


Net cash provided by (used in) financing activities exclusive of vehicle programs		447		(214)

Vehicle programs:
	Proceeds from borrowings	12,477		11,866
	Payments on borrowings	(11,848)		(8,158)
	Debt financing fees	(40)		(28)
		589		3,680
Net cash provided by financing activities		1,036		3,466

Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash		(15)		6

Net increase (decrease) in cash and cash equivalents, program and restricted cash		(61)		40
Cash and cash equivalents, program and restricted cash, beginning of period		644		642
Cash and cash equivalents, program and restricted cash, end of period		$	583	$	682

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 Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Stockholders’ Equity Attributable to Avis Budget Group, Inc.		Non-controlling Interests		Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balance at March 31, 2024	137.1	$	1	$	6,610	$	3,738	$	(140)	(101.4)	$	(10,724)	$	(515)	$	7	$	(508)


Comprehensive income:
Net income	—	—		—		14		—		—	—		14		1		15
Other comprehensive income	—	—		—		—		5		—	—		5		—		5
Total comprehensive income						14		5					19		1		20


Net activity related to restricted stock units	—	—		6		(1)		—		—	1		6		—		6

Balance at June 30, 2024	137.1	$	1	$	6,616	$	3,751	$	(135)	(101.4)	$	(10,723)	$	(490)	$	8	$	(482)

Balance at March 31, 2023	137.1	$	1	$	6,620	$	2,891	$	(111)	(97.3)	$	(9,845)	$	(444)	$	3	$	(441)

Comprehensive income:
Net income	—	—		—		435		—		—	—		435		1		436
Other comprehensive income	—	—		—		—		21		—	—		21		—		21
Total comprehensive income						435		21					456		1		457


Net activity related to restricted stock units	—	—		5		—		—		—	—		5		—		5
Repurchases of common stock	—	—		—		—		—		(0.7)	(146)		(146)		—		(146)
Balance at June 30, 2023	137.1	$	1	$	6,625	$	3,326	$	(90)	(98.0)	$	(9,991)	$	(129)	$	4	$	(125)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Stockholders’ Equity Attributable to Avis Budget Group, Inc.		Non-controlling Interests		Total Stockholders’ Equity
	Shares	Amount								Shares	Amount
Balance at December 31, 2023	137.1	$	1	$	6,634	$	3,854	$	(96)	(101.6)	$	(10,742)	$	(349)	$	6	$	(343)


Comprehensive income (loss):
Net income (loss)	—	—		—		(100)		—		—	—		(100)		2		(98)
Other comprehensive loss	—	—		—		—		(39)		—	—		(39)		—		(39)
Total comprehensive income (loss)						(100)		(39)					(139)		2		(137)


Net activity related to restricted stock units	—	—		(18)		(3)		—		0.2	19		(2)		—		(2)

Balance at June 30, 2024	137.1	$	1	$	6,616	$	3,751	$	(135)	(101.4)	$	(10,723)	$	(490)	$	8	$	(482)

Balance at December 31, 2022	137.1	$	1	$	6,666	$	2,579	$	(101)	(97.6)	$	(9,848)	$	(703)	$	3	$	(700)

Comprehensive income:
Net income	—	—		—		747		—		—	—		747		1		748
Other comprehensive income	—	—		—		—		11		—	—		11		—		11
Total comprehensive income						747		11					758		1		759


Net activity related to restricted stock units	—	—		(41)		—		—		0.3	3		(38)		—		(38)
Repurchases of common stock	—	—		—		—		—		(0.7)	(146)		(146)		—		(146)
Balance at June 30, 2023	137.1	$	1	$	6,625	$	3,326	$	(90)	(98.0)	$	(9,991)	$	(129)	$	4	$	(125)

See Notes to Consolidated Condensed Financial Statements (Unaudited).

Avis Budget Group, Inc.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)

(Unless otherwise noted, all dollar amounts are in millions, except per share amounts)

1. Basis of Presentation

Avis Budget Group, Inc. provides mobility solutions to businesses and consumers worldwide. The accompanying 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 the areas in which we do not operate directly.

•International - consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which we do not operate directly.

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 2023 acquisitions of various licensees were not material. We consolidate joint venture activities when we have a controlling interest and record non-controlling interests within stockholders’ equity and the statement of comprehensive income equal to the percentage of ownership interest retained in such entities by the respective non-controlling party.

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 2023 Annual Report on Form 10-K (the “2023 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 2023 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 June 30,
	2024		2023
Cash and cash equivalents	$	511	$	571
Program cash	68		109
Restricted cash (a)	4		2
Total cash and cash equivalents, program and restricted cash	$	583	$	682

________

(a)Included within other current assets.

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.

Variable Interest Entity (“VIE”). We review our investments to determine if they are VIEs. A VIE is an entity in which either (i) the equity investors as a group lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. Entities that are determined to be VIEs are consolidated if we are the primary beneficiary of the entity. The primary beneficiary possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. We will reconsider our original assessment of a VIE upon the occurrence of certain events such as contributions and redemptions, either by us, or third parties, or amendments to an entity’s governing documents. On an ongoing basis, we reconsider whether we are deemed to be a VIE’s primary beneficiary. See Note 14 – Related Party Transactions for our VIE investment in our former subsidiary.

Investments. As of June 30, 2024 and December 31, 2023, we had equity method investments with a carrying value of $98 million and $93 million, respectively, which are included in other non-current assets. Earnings from our equity method investments are included within operating expenses. For the three months ended June 30, 2024 and 2023, we recorded $3 million related to our equity method investments, in each period. For the six months ended June 30, 2024 and 2023 we recorded $6 million and $4 million related to our equity method investments, respectively. See Note 14 – Related Party Transactions for our equity method investment in our former subsidiary.

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 $54 million and $42 million during the three months ended June 30, 2024 and 2023, respectively, and $96 million and $86 million during the six months ended June 30, 2024 and 2023, respectively.

The following table presents our revenues disaggregated by geography:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Americas	$	2,361	$	2,428	$	4,354	$	4,444
Europe, Middle East and Africa	544		543		926		910
Asia and Australasia	143		152		319		326
Total revenues	$	3,048	$	3,123	$	5,599	$	5,680

The following table presents our revenues disaggregated by brand:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Avis	$	1,747	$	1,748	$	3,207	$	3,163
Budget	1,117		1,180		2,038		2,157
Other	184		195		354		360
Total revenues	$	3,048	$	3,123	$	5,599	$	5,680

________

Other includes Zipcar and other operating brands.

Recently Issued Accounting Pronouncements

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures,” which amends Topic 740 primarily through enhanced disclosures about an entity’s tax risks and tax planning. The amendments are effective for public business entities in annual periods beginning after December 15, 2024, with early adoption permitted on a prospective or retrospective basis. ASU 2023-09 will become effective for us on January 1, 2025. We are currently evaluating the impact of the adoption of this accounting pronouncement on our Consolidated Financial Statements.

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures,” which amends Topic 280 primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. ASU 2023-07 became effective for us on January 1, 2024. We are currently evaluating the impact of the adoption of this accounting pronouncement 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. In December 2022, the FASB also issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” to defer the sunset date of ASC 848 from December 31, 2022 to December 31, 2024. As of June 30, 2024, 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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Americas	$	2,330	$	2,410	$	4,304	$	4,405
Europe, Middle East and Africa	524		523		888		872
Asia and Australasia	140		148		311		317
Total lease revenues	$	2,994	$	3,081	$	5,503	$	5,594

The following table presents our lease revenues disaggregated by brand:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Avis	$	1,710	$	1,721	$	3,144	$	3,109
Budget	1,105		1,168		2,014		2,132
Other	179		192		345		353
Total lease revenues	$	2,994	$	3,081	$	5,503	$	5,594

________

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Property leases (a)
Operating lease expense	$	233	$	214	$	462	$	419
Variable lease expense	93		108		162		191
Total property lease expense	$	326	$	322	$	624	$	610

________

(a) Primarily within operating expenses.

Supplemental balance sheet information related to leases is as follows:


	As of June 30, 2024			As of December 31, 2023
Property leases
Operating lease ROU assets	$	2,754		$	2,654

Short-term operating lease liabilities (a)	$	567		$	576
Long-term operating lease liabilities	2,234			2,117
Operating lease liabilities	$	2,801		$	2,693

Weighted average remaining lease term	7.8 years			8.1 years
Weighted average discount rate	4.92		%	4.83		%

________

(a) Included in accounts payable and other current liabilities.

Supplemental cash flow information related to leases is as follows:


	Six Months Ended June 30,
	2024		2023
Cash payments for lease liabilities within operating activities:
Property operating leases	$	452	$	431
Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:
Property operating leases	$	572	$	572

3. Restructuring and Other Related Charges

During the first quarter of 2024, we initiated a global restructuring plan to further right size our operations (“Global Rightsizing”). The costs associated with this initiative are primarily related to the operational scaling of processes, locations, and lines of business. We expect further restructuring expense of approximately $25 million related to this initiative to be incurred this year.

During the second quarter of 2022, we initiated a restructuring plan to focus on consolidating our global operations by designing new processes and implementing new systems (“Cost Optimization”). We expect this initiative to be completed this year.

The following tables summarize the change to our restructuring-related liabilities and identifies the amounts recorded within our reporting segments for restructuring charges and corresponding payments and utilizations:


	Personnel Related		Other (a)		Total
Balance as of January 1, 2024	$	4	$	—	$	4

Restructuring expense:
Global Rightsizing	4		12		16
Cost Optimization	—		1		1



Restructuring payments and utilization:
Global Rightsizing	(4)		(2)		(6)
Cost Optimization	(1)		(1)		(2)



Balance as of June 30, 2024	$	3	$	10	$	13

________

(a) Includes expenses primarily related to the disposition of vehicles


	Americas		International		Total
Balance as of January 1, 2024	$	2	$	2	$	4

Restructuring expense:
Global Rightsizing	14		2		16
Cost Optimization	1		—		1



Restructuring payments and utilization:
Global Rightsizing	(4)		(2)		(6)
Cost Optimization	(1)		(1)		(2)



Balance as of June 30, 2024	$	12	$	1	$	13

4. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings (loss) per share (“EPS”) (shares in millions):


		Three Months Ended June 30,				Six Months Ended June 30,
		2024		2023		2024		2023
Net income (loss) attributable to Avis Budget Group, Inc. for basic and diluted EPS		$	14	$	435	$	(100)	$	747

Basic weighted average shares outstanding		35.6		39.1		35.6		39.0
Non-vested stock (a)		0.1		0.4		—		0.5
Diluted weighted average shares outstanding		35.7		39.5		35.6		39.5

Earnings (loss) per share:
	Basic	$	0.41	$	11.13	$	(2.80)	$	19.16
	Diluted	$	0.41	$	11.01	$	(2.80)	$	18.93

________

(a) For the three months ended June 30, 2024 and 2023, 0.2 million and 0.1 million non-vested stock awards, respectively, have an anti-dilutive effect and therefore are excluded from the computation of diluted weighted average shares outstanding. For the six months ended June 30, 2024 and 2023, 0.4 million and 0.1 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		As of
	June 30,		December 31,
	2024		2023
Sales and use taxes	377		192
Prepaid expenses	$	264	$	239
Other	246		253
Other current assets	$	887	$	684

6. Intangible Assets

Intangible assets consisted of:


	As of June 30, 2024						As of December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Amortized Intangible Assets
License agreements	$	311	$	240	$	71	$	316	$	234	$	82
Customer relationships	249		221		28		253		221		32
Other	54		47		7		56		46		10
Total	$	614	$	508	$	106	$	625	$	501	$	124
Unamortized Intangible Assets
Goodwill	$	1,087					$	1,099
Trademarks	$	544					$	546

For the three months ended June 30, 2024 and 2023, amortization expense related to amortizable intangible assets was approximately $7 million and $6 million, respectively. For the six months ended June 30, 2024 and 2023, amortization expense related to amortizable intangible assets was approximately $15 million and $14 million, respectively.

Based on our amortizable intangible assets at June 30, 2024, we expect amortization expense of approximately $14 million for the remainder of 2024, $22 million for 2025, $21 million for 2026, $16 million for 2027, $9 million for 2028 and $7 million for 2029, excluding effects of currency exchange rates.

7. Vehicle Rental Activities

The components of vehicles, net within assets under vehicle programs are as follows:


	As of		As of
	June 30,		December 31,
	2024		2023
Rental vehicles	$	24,665	$	23,114
Less: Accumulated depreciation	(2,703)		(2,639)
	21,962		20,475
Vehicles held for sale	432		734
Vehicles, net investment in lease (a)	80		31
Vehicles, net	$	22,474	$	21,240

________

(a) See Note 14 – Related Party Transactions.

The components of vehicle depreciation and lease charges, net are summarized below:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Depreciation expense	$	655	$	540	$	1,217	$	1,017
Lease charges	39		40		74		78
(Gain) loss on sale of vehicles, net	39		(205)		78		(455)
Vehicle depreciation and lease charges, net	$	733	$	375	$	1,369	$	640

At June 30, 2024 and 2023, we had payables related to vehicle purchases included in liabilities under vehicle programs - other of $573 million and $443 million, respectively, and receivables related to vehicle sales included in assets under vehicle programs - receivables from vehicle manufacturers and other of $138 million and $140 million, respectively.

8. Income Taxes

Our effective tax rate for the six months ended June 30, 2024 was a benefit of 14.8%. Such rate differed from the Federal Statutory rate of 21.0% primarily due to the effect of certain tax credits, partially offset by foreign taxes on our International operations and state taxes.

Our effective tax rate for the six months ended June 30, 2023 was a provision of 24.8%. Such rate differed from the Federal Statutory rate of 21.0% primarily due to foreign taxes on our International operations and state taxes.

The Organisation for Economic Cooperation and Development (“OECD”) published a proposal for the establishment of a global minimum tax rate of 15% (the “Pillar Two rule”), effective for fiscal 2024. We are closely monitoring developments of the Pillar Two rule as the OECD continues to refine its technical guidance and member states implement tax laws and regulations based on Pillar Two proposals. Based on our preliminary analysis, we do not expect Pillar Two to have a material impact on our financial statements for 2024.

9. Accounts Payable and Other Current Liabilities

Accounts payable and other current liabilities consisted of:


	As of		As of
	June 30,		December 31,
	2024		2023
Short-term operating lease liabilities	$	567	$	576
Accounts payable	555		487
Accrued sales and use taxes	322		251
Deferred lease revenues - current	311		168
Accrued advertising and marketing	282		276
Public liability and property damage insurance liabilities – current	171		181
Accrued payroll and related	140		188
Other	490		500
Accounts payable and other current liabilities	$	2,838	$	2,627

10. Long-term Corporate Debt and Borrowing Arrangements

Long-term corporate debt and borrowing arrangements consisted of:


		As of		As of
	Maturity	June 30,		December 31,
	Date	2024		2023
4.750% euro-denominated Senior Notes	January 2026	$	—	$	386
5.750% Senior Notes	July 2027	738		736
4.750% Senior Notes	April 2028	500		500
7.000% euro-denominated Senior Notes	February 2029	643		—
5.375% Senior Notes	March 2029	600		600
7.250% euro-denominated Senior Notes	July 2030	643		441
8.000% Senior Notes	February 2031	497		497

Floating Rate Term Loan (a)	August 2027	1,159		1,164
Floating Rate Term Loan (b)	March 2029	522		524
Other (c)		21		30
Deferred financing fees		(62)		(55)
Total		5,261		4,823
Less: Short-term debt and current portion of long-term debt		28		32
Long-term debt		$	5,233	$	4,791

________

(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 June 30, 2024, the floating rate term loan due 2027 bears interest at one-month Secured Overnight Financing Rate (“SOFR”) plus 1.75%, for an aggregate rate of 7.21%. We have entered into a swap to hedge $750 million of interest rate exposure related to the floating rate term loan at an aggregate rate of 3.26%.

(b)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 June 30, 2024, the floating rate term loan due 2029 bears interest at one-month SOFR plus 3.00%, for an aggregate rate of 8.44%.

(c)Primarily includes finance leases, which are secured by liens on the related assets.

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 €200 million of additional 7.250% euro-denominated Senior notes due July 2030, at 100.25% of their face value, with interest payable semi-annually.

Committed Credit Facilities and Available Funding Arrangements

As of June 30, 2024, the committed corporate credit facilities available to us and/or our subsidiaries were as follows:


	Total Capacity		Outstanding Borrowings		Letters of Credit Issued		Available Capacity
Senior revolving credit facility maturing 2028 (a)	$	2,000	$	—	$	1,989	$	11

________

(a)The senior revolving credit facility bears interest at one-month SOFR plus 1.75% 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.

As of June 30, 2024, we had various other uncommitted standby letter of credit facilities (“SBLC facilities”) with an additional letter of credit capacity of up to $300 million. As of June 30, 2024, no letters of credit have been issued or drawn on our SBLC facilities.

Debt Covenants

The agreements governing our indebtedness contain restrictive covenants, including restrictions on dividends paid to us by certain of our subsidiaries, the incurrence of additional indebtedness and/or liens by us and certain of our subsidiaries, acquisitions, mergers, liquidations, and sale and leaseback transactions. Our senior credit facility also contains a maximum leverage ratio requirement. As of June 30, 2024, we were in compliance with the financial covenants governing our indebtedness.

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 of		As of
	June 30,		December 31,
	2024		2023
Americas - Debt due to Avis Budget Rental Car Funding (a)	$	15,633	$	15,502
Americas - Debt borrowings	1,237		1,075
International - Debt borrowings (b)	2,533		2,203
International - Finance leases	186		172
Other	37		55
Deferred financing fees (c)	(92)		(70)
Total	$	19,534	$	18,937

________

(a)Includes approximately $848 million and $841 million of Class R notes as of June 30, 2024 and December 31, 2023, respectively, which are held by us.

(b)In February 2024, we amended our European rental fleet securitization program to increase its capacity to approximately €1.9 billion and extend the maturity of the program to September 2026. We also added £200 million to our capacity within the program.

(c)Deferred financing fees related to Debt due to Avis Budget Rental Car Funding as of June 30, 2024 and December 31, 2023 were $73 million and $61 million, respectively.

The following table provides a summary of debt issued by AESOP during the six months ended June 30, 2024:


Issuance Date	Maturity Date	Weighted Average Interest Rate		Amount Issued
January 2024	June 2029	5.51	%	$	1,200
February 2024	April 2026	6.24	%	53
February 2024	October 2026	6.18	%	37
February 2024	April 2028	6.23	%	52
March 2024	October 2027	5.26	%	400
March 2024	December 2029	5.35	%	700
		5.46	%	$	2,442

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 June 30, 2024:


	Debt under Vehicle Programs (a)
Within 1 year (b)	$	2,874
Between 1 and 2 years (c)	5,347
Between 2 and 3 years (d)	5,324
Between 3 and 4 years (e)	2,576
Between 4 and 5 years	2,570
Thereafter	935
Total	$	19,626

________

(a) Vehicle-backed debt primarily represents asset-backed securities.

(b) Includes $1.1 billion of bank and bank-sponsored facilities.

(d) Includes $2.0 billion of bank and bank-sponsored facilities.

(e) Includes $0.1 billion of bank and bank-sponsored facilities.

Committed Credit Facilities and Available Funding Arrangements

As of June 30, 2024, available funding under our debt arrangements related to 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	$	17,773	$	15,633	$	2,140
Americas - Debt borrowings	1,318		1,237		81
International - Debt borrowings	3,146		2,533		613
International - Finance leases	253		186		67
Other	37		37		—
Total	$	22,527	$	19,626	$	2,901

________

(a) Capacity is subject to maintaining sufficient assets to collateralize debt. The total capacity for Americas - Debt due to Avis Budget Rental Car Funding includes increases from amendments and restatements of our asset-backed variable-funding financing facilities, which were most recently amended and restated in April 2024.

(b) The outstanding debt is collateralized by vehicles and related assets of $18.0 billion for Americas - Debt due to Avis Budget Rental Car Funding; $1.7 billion for Americas - Debt borrowings; $3.2 billion for International - Debt borrowings; and $0.2 billion for International - Finance leases.

Debt Covenants

The agreements under our vehicle-backed funding programs contain restrictive covenants, including restrictions on dividends paid to us by certain of our subsidiaries and restrictions on indebtedness, mergers, liens, liquidations, and sale and leaseback transactions and in some cases also require compliance with certain financial requirements. As of June 30, 2024, we are not aware of any instances of non-compliance with any of the financial or restrictive covenants contained in the debt agreements under our vehicle-backed funding programs.

12. Commitments and Contingencies

Contingencies

In 2006, we completed the spin-offs of our Realogy and Wyndham subsidiaries (now known as Anywhere Real Estate, Inc., and Wyndham Hotels and Resorts, Inc. and Travel + Leisure Co., respectively). 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 Anywhere Real Estate, Inc., Wyndham Hotels and Resorts, Inc. and Travel + Leisure Co. have agreed to assume responsibility for these liabilities.

In March 2023, the California Office of Tax Appeals (“OTA”) issued an opinion in a case involving notices of proposed assessment of California corporation franchise tax for tax year 1999 issued to us. The case involves whether (i) the notices of proposed assessment were barred by the statute of limitations; and (ii) a transaction undertaken by us in tax year 1999 constituted a tax-free reorganization under the Internal Revenue Code (“IRC”). The OTA concluded that the notices of proposed assessment were not barred by the statute of limitations and that the 1999 transaction was not a tax-free reorganization under the IRC. Anywhere Real Estate, Inc. has assumed 62.5%, and Wyndham Hotels and Resorts, Inc. and Travel + Leisure Co. have assumed 37.5% of the potential tax liability in this matter, respectively. We filed a petition for rehearing, which was denied in April 2024, and the tax assessment is expected to become payable, even if judicial relief is sought.

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 September 2014, Dawn Valli et al. v. Avis Budget Group Inc., et al. was filed in U.S. District Court for the District of New Jersey. The plaintiffs seek to represent a purported nationwide class of certain renters of vehicles from our Avis and Budget subsidiaries from September 30, 2008 through the present. The plaintiffs seek damages in connection with claims relating to alleged misrepresentations and omissions concerning charging customers for traffic infractions and related administrative fees. On October 10, 2023, plaintiffs’ motion for class certification was denied as to their proposed nationwide class and granted as to a subclass, created at the Court’s discretion, of Avis Preferred and Budget Fastbreak members. We have been named as a defendant in other purported consumer class action lawsuits, including two class actions filed against us in New Jersey, one seeking damages in connection with a breach of contract claim and another related to ancillary charges at our Payless subsidiary. However, the Company intends to vigorously defend them.

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.

We are a defendant in a number of legal proceedings for personal injury arising from the operation of our vehicles. In June 2023, two of our subsidiaries were named as defendants in a lawsuit filed in Dallas, Texas alleging that one of our employees caused the death of an individual with one of our vehicles: Peggy Dawson Edwards, Individually and as Anticipated Representative of the Estate of Michael Edwards, Sr., et. al. v. Avis Budget Car Rental, LLC; PV Holding Corp.; and Kevin Barnes, Cause No. CC-23-03188-E, pending in County Court at Law No. 5 for Dallas County, Texas. The complaint alleges that our subsidiaries are responsible for Mr. Edwards’ death and seeks compensatory and punitive damages in an unspecified

amount exceeding $1 million. The court has set a trial date in November 2024 for this lawsuit. Given the early stages of the legal proceedings, it is not possible to predict the outcome of the claim. However, the Company intends to vigorously defend it.

Litigation is inherently unpredictable and, although we believe that our accruals are adequate and/or that we have valid defenses in these matters, unfavorable resolutions could occur. We estimate that the potential exposure resulting from adverse outcomes of current legal proceedings in which it is reasonably possible that a loss may be incurred could, in the aggregate, be up to approximately $40 million in excess of amounts accrued as of June 30, 2024. 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 $1.4 billion of vehicles from manufacturers over the next 12 months, a $5.4 billion decrease compared to December 31, 2023, 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.

Concentrations

Concentrations of credit risk as of June 30, 2024 include (i) risks related to our repurchase and guaranteed depreciation agreements with domestic and foreign car manufacturers and primarily with respect to receivables for program cars that have been disposed but for which we have not yet received payment from the manufacturers and (ii) risks related to Realogy and Wyndham, including receivables of $39 million and $24 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 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”). During the six months ended June 30, 2024, we did not repurchase any shares of common stock under the Stock Repurchase Program. During the six months ended June 30, 2023, we repurchased approximately 723 thousand shares of common stock at a cost of approximately $146.1 million under the Stock Repurchase Program. As of June 30, 2024, approximately $802 million of authorization remained available to repurchase common stock under the Stock Repurchase Program.

Common stock repurchases under the Stock Repurchase Program do not include shares withheld to satisfy employees’ income tax liabilities attributable to the vesting of restricted stock unit awards.

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income (loss)	$	15	$	436	$	(98)	$	748
Less: net income attributable to non-controlling interests	1		1		2		1
Net income (loss) attributable to Avis Budget Group, Inc.	14		435		(100)		747
Other comprehensive income (loss):
Currency translation adjustments (net of tax of $(3), $2, $(8) and $5, respectively) (a)	7		6		(45)		2
Net unrealized gain (loss) on cash flow hedges (net of tax of $1, $(4), $(1) and $(2), respectively)	(3)		14		4		7
Minimum pension liability adjustment (net of tax of $0 in each period)	1		1		2		2
	5		21		(39)		11
Comprehensive income (loss) attributable to Avis Budget Group, Inc.	$	19	$	456	$	(139)	$	758

________

(a) Currency translation adjustments exclude income taxes related to indefinite investments in foreign subsidiaries.

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) were as follows:


	Currency Translation Adjustments		Net Unrealized Gains (Losses) on Cash Flow Hedges (a)		Minimum Pension Liability Adjustment (b)		Accumulated Other Comprehensive Income (Loss)
Balance, January 1, 2024	$	(3)	$	37	$	(130)	$	(96)
Other comprehensive income (loss) before reclassifications	(45)		15		—		(30)
Amounts reclassified from accumulated other comprehensive income (loss)	—		(11)		2		(9)
Net current-period other comprehensive income (loss)	(45)		4		2		(39)
Balance, June 30, 2024	$	(48)	$	41	$	(128)	$	(135)

Balance, January 1, 2023	$	(30)	$	45	$	(116)	$	(101)
Other comprehensive income (loss) before reclassifications	2		13		—		15
Amounts reclassified from accumulated other comprehensive income (loss)	—		(6)		2		(4)
Net current-period other comprehensive income (loss)	2		7		2		11
Balance, June 30, 2023	$	(28)	$	52	$	(114)	$	(90)

________

All components of accumulated other comprehensive income (loss) are net of tax, except currency translation adjustments, which exclude income taxes related to indefinite investments in foreign subsidiaries and include $116 million gain, net of tax, as of June 30, 2024 related to our hedge of our investment in euro-denominated foreign operations (see Note 16 – Financial Instruments).

(a)For the three months ended June 30, 2024 and 2023, the amounts reclassified from accumulated other comprehensive income (loss) into corporate interest expense were gains of $7 million ($6 million, net of tax) and gains of $5 million ($4 million, net of tax), respectively. For the six months ended June 30, 2024 and 2023, the amounts reclassified from accumulated other comprehensive income (loss) into corporate interest expense were gains of $14 million ($11 million, net of tax) and gains of $8 million ($6 million, net of tax), respectively.

(b)For the three months ended June 30, 2024 and 2023, amounts reclassified from accumulated other comprehensive income (loss) into selling, general and administrative expenses were losses of $2 million ($1 million, net of tax), in each period. For the six months ended June 30, 2024 and 2023, amounts reclassified from accumulated other comprehensive income (loss) into selling, general and administrative expenses were losses of $3 million ($2 million, net of tax), in each period.

14. Related Party Transactions

SRS Mobility Ventures, LLC

In 2021, SRS Mobility Ventures, LLC acquired a 33 1/3% Class A Membership Interest in one of our subsidiaries at fair value of $37.5 million. SRS Mobility Ventures, LLC is an affiliate of our largest shareholder, SRS Investment Management, LLC.

On September 1, 2022, through the issuance of Class B Preferred Voting Membership Interests, SRS Mobility Ventures, LLC increased their ownership in this subsidiary to 51% at a fair value of $62 million. In accordance with ASC Topic 810-10-40, we must deconsolidate a subsidiary as of the date we cease to have a controlling interest in that subsidiary and recognize the gain or loss in net income at that time. The fair value of our retained investment was determined utilizing a discounted cash flow methodology based on various assumptions, including projections of future cash flows, which include forecast of future revenue and EBITDA. As a result, we deconsolidated our former subsidiary, Avis Mobility Ventures LLC (“AMV”), from our financial statements and began to report our proportional share of the former subsidiary’s income or loss within other (income) expense, net in our Consolidated Condensed Statements of Comprehensive Income as we do not have the ability to direct the significant activities of the former subsidiary and are therefore no longer primary beneficiary of the VIE. Upon deconsolidation, our former subsidiary had a net asset carrying amount of $49 million resulting in a gain of $10 million.

In August and October 2023, SRS made capital contributions to AMV, increasing their ownership to approximately 65%.

In June 2024, SRS made a capital contribution of approximately $22.2 million to AMV, and we simultaneously settled approximately $11.7 million in receivables from AMV related to services we have provided. SRS’s ownership percentage remained at approximately 65% following these transactions.

We continue to provide vehicles, related fleet services, and certain administrative services to AMV to support their operations. For the three months ended June 30, 2024 and 2023, we recorded an immaterial amount and $6 million of related income within other (income) expense, net, respectively. For the six months ended June 30, 2024 and 2023, we recorded $2 million and $14 million of related income within other (income) expense, net, respectively. For the three months ended June 30, 2024 and 2023, we recorded losses of $2 million and $10 million within other (income) expense, net, related to our equity investment, respectively. For the six months ended June 30, 2024 and 2023, we recorded losses of $5 million and $16 million within other (income) expense, net, related to our equity investment, respectively.

As of June 30, 2024 and December 31, 2023, receivables from AMV related to these services were $3 million and $2 million, respectively, and our net investment in vehicle finance lease with AMV, which is included in vehicles, net, was $80 million and $31 million, respectively. The carrying value of our equity investment in AMV as of June 30, 2024 and December 31, 2023 was approximately $31 million and $24 million, respectively, which is included in other non-current assets.

15. Stock-Based Compensation

We recorded stock-based compensation expense of $6 million ($5 million, net of tax) and $8 million ($5 million, net of tax) during the three months ended June 30, 2024 and 2023, respectively. We recorded stock-based compensation expense of $13 million ($10 million, net of tax) and $16 million ($11 million, net of tax) during the six months ended June 30, 2024 and 2023, respectively.

As part of our declaration and payment of a special cash dividend in December 2023, we granted additional restricted stock units (“RSUs”) to our award holders with unvested shares as a dividend equivalent, which has been deferred until, and will not be paid unless, the shares of stock underlying the award vest.

The activity related to RSUs consisted of (in thousands of shares):


	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)
Time-based RSUs
Outstanding at January 1, 2024	290	$	161.87
Granted (a)	120	113.10
Vested (b)	(100)	133.88
Forfeited	(4)	167.61
Outstanding and expected to vest at June 30, 2024 (c)	306	$	151.83	1.4	$