Avis 2006 Annual Report Download - page 38

Table of Contents
financing by Avis Budget Car Rental (ii) the establishment of a $1.5 billion revolving credit facility by Avis Budget Car Rental (iii) the
completion of a tender offer for $2.6 billion of our corporate debt by repurchasing approximately $2.5 billion outstanding aggregate principal
amount of our 6
1
/ 4 % notes due in January 2008 and March 2010, 7
3
/ 8 % notes due in January 2013 and 7
1
/ 8 % notes due in March 2015
and the subsequent redemption of the untendered portion of such debt and (iv) the repayment of aggregate principal of $950 million due in
August 2006 under our 6
7
/ 8 % and 4.89% notes. As a result of the spin-offs of Realogy and Wyndham, we repaid outstanding borrowings of
$560 million (including $265 million which was recorded within discontinued operations) and $600 million under our former $2.0 billion
revolving credit facility and asset-linked facility, respectively, and terminated these facilities during July 2006.
In connection with the separation, we entered into a separation agreement, tax sharing agreement and transition services agreement with
Realogy, Wyndham and Travelport.
On August 29, 2006, our stockholders approved certain amendments to our Certificate of Incorporation, including a change in our name from
Cendant Corporation to Avis Budget Group, Inc. and a 1-for-10 reverse stock split of our common stock, each of which became effective on
the New York Stock Exchange at the opening of the market on September 5, 2006 and, at that time, our ticker symbol changed to ‘‘CAR’’.
RESULTS OF OPERATIONS
Discussed below are our consolidated results of operations and the results of operations for each of our reportable segments. Generally
accepted accounting principles require us to segregate and report as discontinued operations, for all periods presented, the account balances and
activities of Jackson Hewitt, PHH, Wright Express, our former Marketing Services division, Realogy, Wyndham and Travelport. Previously,
we could not classify our former mortgage business as a discontinued operation due to Realogy's participation in a mortgage origination
venture that was established with PHH in connection with our January 2005 spin-off of PHH. However, due to the spin-off of Realogy on
July 31, 2006, this business is classified as a discontinued operation.
We measure performance using the following key operating statistics: (i) rental days, which represents the total number of days (or portion
thereof) a vehicle was rented, and (ii) T&M revenue per rental day, which represents the average daily revenue we earned from rental and
mileage fees charged to our customers. Our car rental operating statistics (rental days and T&M revenue per rental day) are all calculated based
on the actual usage of the vehicle during a 24-hour period. We believe that this methodology, while conservative, provides our management
with the most relevant statistics in order to manage the business. Our calculation may not be comparable to other companies’ calculation of
similarly-titled statistics.
The reportable segments presented below represent our operating segments for which separate financial information is available and is utilized
on a regular basis by our chief operating decision maker to assess performance and to allocate resources. In identifying our reportable
segments, we also consider the nature of services provided by our operating segments. Management evaluates the operating results of each of
our reportable segments based upon revenue and “EBITDA,” which we define as income from continuing operations before non-
vehicle related
depreciation and amortization, non-vehicle related interest and income taxes. Our presentation of EBITDA may not be comparable to similarly-
titled measures used by other companies.
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