Avis 2007 Annual Report Download - page 101
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Table of Contents
Lease Commitments
The Company is committed to making rental payments under noncancelable operating leases covering various facilities and equipment.
Many of the Company’s operating leases for facilities contain renewal options. These renewal options vary, but the majority include
clauses for the renewal rental at various length terms and prevailing market rate rents, subject to a market review. Future minimum lease
payments required under noncancelable operating leases as of December 31, 2007 are as follows:
The future minimum lease payments in the above table have been reduced by minimum future sublease rental inflows of $44 million. The
Company maintains concession agreements with various airport authorities that allow the Company to conduct its car rental operations
onsite. In general, concession fees for airport locations are based on a percentage of total commissionable revenue (as determined by each
airport authority), subject to minimum annual guaranteed amounts. These concession fees are included in the Company’
s total rent expense
and for the years ended December 31 amounted to:
Commitments under capital leases, other than those within the Company’s vehicle rental program, for which the future minimum lease
payments have been reflected in Note 17—Debt Under Vehicle Programs and Borrowing Arrangements, are not significant.
Commitments to Purchase Vehicles
The Company maintains agreements with vehicle manufacturers which require the Company to purchase approximately $4.9 billion of
vehicles from these manufacturers over the next year. The majority of these commitments are subject to the vehicle manufacturers’
satisfying their obligations under the repurchase and guaranteed depreciation agreements. The Company’s featured suppliers for the Avis
and Budget brands are General Motors Corporation and Ford Motor Company, respectively. The purchase of such vehicles is financed
through the issuance of debt under vehicle programs in addition to cash received upon the sale of vehicles primarily under repurchase and
guaranteed depreciation programs.
F
-
38
18.
Commitments and Contingencies
Year
Amount
2008
$
398
2009
294
2010
210
2011
160
2012
132
Thereafter
741
$
1,935
2007
2006
2005
Rent
$
56
$
47
$
35
Concession expense:
Minimum fees
409
377
322
Contingent fees
130
142
138
595
566
495
Less: sublease rental income
(8
)
(5
)
(4
)
Total
$
587
$
561
$
491