Avis 2008 Annual Report Download - page 51

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.
FINANCIAL CONDITION
Total assets exclusive of assets under vehicle programs decreased approximately $1.0 billion primarily due to (i) a charge of $1,262 million
recorded in 2008 for the impairment to our goodwill, our tradenames asset within our other intangible assets, net and our equity investment in
Carey, (ii) a $109 million decrease within other current assets for receivables due from Realogy and Wyndham, (iii) a $39 million decrease in
income taxes receivable, (iv) a $36 million decrease in derivatives related to our vehicle debt driven by fluctuations in interest rates, and (v) a
$32 million decrease in accounts receivable. These decreases were offset by (i) a $302 million increase in deferred taxes, (ii) a $77 million
increase in other non-current assets related to an increase to the tax indemnification receivables from Realogy and Wyndham, (iii) a $48 million
increase in other non-current assets and (iv) a $44 million increase in cash and cash equivalents (see “Liquidity and Capital Resources—Cash
Flows” for a detailed discussion).
Total liabilities exclusive of liabilities under vehicle programs decreased $78 million primarily due to decreases of (i) $48 million in accounts
payable, (ii) $39 million in tax liabilities for which we are entitled to indemnification from Realogy and Wyndham, (iii) $37 million in accrued
payroll related liabilities, which related primarily to the payment of the 2007 annual incentives in first quarter 2008, (iv) $33 million in non-
current insurance liabilities, (v) $27 million in advertising and marketing related liabilities and (vi) $15 million in accrued legal settlements.
These decreases were partially offset by a net $86 million increase in other non-current liabilities, primarily related to a $68 million increase in
tax liabilities for which we are entitled to indemnification from Realogy and Wyndham and a $40 million increase in long-term income taxes
payable.
Assets under vehicle programs decreased $155 million primarily due to (i) a $310 million decrease in our net vehicles primarily due to the effect
of foreign currency translations and (ii) a $113 million decrease in our Investment in Avis Budget Rental Car Funding (AESOP) LLC primarily
due to mark-to-market losses on derivatives. These decreases were partially offset by a $257 million increase in receivables for vehicles sold.
Liabilities under vehicle programs increased $294 million, reflecting $438 million in additional borrowings, offset by an $86 million decrease in
invoices from manufacturers for vehicles received. See “Liquidity and Capital Resources—Debt and Financing Arrangements” for a detailed
account of the change in our debt related to vehicle programs.
Stockholders’ equity decreased approximately $1.4 billion primarily due to (i) a net loss of $1,124 million, (ii) a $226 million decrease in
accumulated other comprehensive income primarily as a result of currency translation adjustments, unrealized losses on interest rate hedges and
the decrease in the fair value of our pension plan assets and (iii) the repurchase of approximately $33 million of our common stock.
46
December 31,
2008
December 31,
2007
Change
Total assets exclusive of assets under vehicle programs
$3,492
$4,493
$(1,001
)
Total liabilities exclusive of liabilities under vehicle programs
3,811
3,889
(78
)
Assets under vehicle programs
7,826
7,981
(155
)
Liabilities under vehicle programs
7,414
7,120
294
Stockholders
’
equity
93
1,465
(1,372
)