Avis 2009 Annual Report Download - page 9

Table of Contents
Company History
Avis Budget Group’s operations consist of two of the most recognized brands in the global vehicle rental industry through Avis Budget Car
Rental, LLC, the parent of Avis Rent A Car System, LLC, Budget Rent A Car System, Inc. and Budget Truck Rental, LLC. Founded in 1946,
Avis is believed to be the first company to rent cars from airport locations. Avis expanded its geographic reach throughout the United States in
the 1950s and 1960s. In 1963, Avis introduced its award winning “We try harder” advertising campaign, which is considered one of the top ten
advertising campaigns of the 20th century by Advertising Age magazine. Budget was founded in 1958. The company name was chosen to appeal
to the “budget-minded” or “value-conscious” vehicle rental customer. Avis possesses a long history of using proprietary information technology
systems in its business, and its established, but continually updated, Wizard System remains the backbone of our operations.
We acquired the Avis brand in 1996, Avis’ capital stock in 2001, and the Budget brand and substantially all of the domestic and certain
international assets of Budget’s predecessor in 2002. We were created through a merger with HFS Incorporated in December 1997 with the
resultant corporation being renamed Cendant Corporation. On August 23, 2006, Cendant completed a separation into four separate companies
(the “Cendant Separation”), one for each of its former Real Estate Services businesses (Realogy Corporation), its former Hospitality Services
businesses (Wyndham Worldwide Corporation), its former Travel Distribution Services businesses (Travelport) and its Vehicle Rental
businesses (Cendant, now Avis Budget Group). Following completion of the Cendant Separation, Cendant changed its name to Avis Budget
Group, Inc. and our common stock began to trade on the New York Stock Exchange under the symbol “CAR”.
In addition to our vehicle rental operations, we continue to manage the administration of certain legacy items which remain following the
completion of the Cendant Separation. In connection with the Cendant Separation, we entered into certain agreements, including the Separation
and Distribution Agreement dated as of July 27, 2006 (the “Separation Agreement”), with Realogy, Wyndham and Travelport governing our
relationships following the separation, including the assumption by Realogy and Wyndham of 62.5% and 37.5%, respectively, of certain
contingent and other liabilities of Cendant.
Car rental business
Operations—Avis
We operate or franchise approximately 2,200 of the approximately 5,100 rental locations that comprise the Avis car rental system (the “Avis
System”) throughout the world, which represents one of the largest car rental systems in the world, based on total revenue and number of
locations. The Avis System encompasses locations at most of the largest airports and cities in the United States and internationally. The Avis
System in Europe, Africa, the Middle East and parts of Asia is primarily operated under royalty-free license agreements with Avis Europe
Holdings, Limited (“Avis Europe”), an independent third party, which generally expire in 2036, and is comprised of approximately 2,900
locations (as disclosed by Avis Europe) operated by Avis Europe and its sub-licensees.
We operate approximately 1,300 Avis car rental locations in both the on-airport and local rental segments in North America, Australia, New
Zealand, Latin America and the Caribbean. In 2009, Avis generated total revenue of approximately $3.1 billion, of which approximately 84% (or
$2.6 billion) was derived from U.S. operations, including locations which are operated by our third party agency-operators. In addition, we
franchise the Avis System to independent business owners in approximately 900 locations throughout the United States, Canada, Latin America,
Australia, New Zealand and parts of Asia. In 2009, approximately 95% of the Avis System total domestic revenue was generated by our
locations and the remainder was generated by locations operated by independent franchisees. Independent franchisees generally pay royalty fees
to us based on a percentage of applicable revenue.
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