Avis 2006 Annual Report Download - page 18

Table of Contents
Ancillary products and insurance coverage
We supplement our daily truck rental revenue by offering customers a range of ancillary optional products. We rent automobile towing
equipment and other moving accessories such as hand trucks, furniture pads and moving supplies. We also make available to customers a range
of optional liability-limiting products and coverages such as physical damage waivers, automobile towing protection, personal accident and
cargo insurance and supplemental liability insurance. These ancillary products enhance our appeal to consumers by offering customers “one-
stop” moving services.
Insurance coverage
We generally assume the risk of our liability to third parties arising from vehicle rental services in the United States, Canada, Puerto Rico and
the U.S. Virgin Islands, for up to $1 million per occurrence, through a combination of self-insurance, insurance coverage provided by one of
our domestic subsidiaries and insurance coverage secured from one or more unaffiliated domestic insurance carriers. We retain the exposure for
up to $9 million per occurrence, in excess of the previously described $1 million level, through an unaffiliated fronting carrier who is reinsured
by our offshore captive insurance company, Constellation Reinsurance Co., Ltd. We also purchase additional excess insurance coverage from a
combination of unaffiliated excess carriers.
We insure the risk of liability to third parties in Argentina, Australia and New Zealand through a combination of unaffiliated carriers and our
affiliates. These carriers provide coverage supplemental to minimum local requirements.
Trademarks and intellectual property
The service marks “Avis” and “Budget”, related marks incorporating the words “Avis” or “Budget”, and related logos and marks such as “We
try harder”
are material to our vehicle rental business. Our subsidiaries and franchisees actively use these marks. All of the material marks used
by the Avis and Budget Systems are registered (or have applications pending for registration) with the United States Patent and Trademark
Office as well as all countries worldwide where Avis and Budget have operations. Our subsidiaries own the marks, patents and other
intellectual property, including the Wizard System, used in our business.
Discontinued Operations
Following the formal approval by our Board of Directors of a disposition plan for the former Cendant Travel Distribution Services businesses
and completion of the Cendant Separation, we classified the former Real Estate Services, Hospitality Services, Timeshare Resorts and Travel
Distribution Services businesses as discontinued operations. Set forth below is a brief description of the businesses that were classified as
discontinued operations during 2006. The former mortgage business, which was distributed in 2005, was also classified as a discontinued
operation in 2006 following completion of the Cendant Separation as such business could not be classified as a discontinued operation in 2005
when originally distributed due to participation by the former Real Estate Services business in a mortgage origination venture established with
PHH in connection with the distribution of that business.
Real Estate Services Businesses.
Realogy Corporation, which holds the assets and liabilities associated with the former Real Estate Services
businesses, is one of the preeminent providers of real estate and relocation services in the world. Realogy is a franchisor of five of the most
recognized brands in the real estate industry; owns and operates a full-service real estate brokerage business; offers a broad range of employee
relocation services; and offers title and settlement services, assisting with the closing of real estate transactions. In the first quarter of 2006
(prior to the completion of the Cendant Separation), we changed the name of our Real Estate Services segment to Realogy.
Hospitality Services and Timeshare Resorts Businesses.
Wyndham Worldwide Corporation, which holds the assets and liabilities associated
with the former Hospitality Services and Timeshare Resorts businesses, is one of
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