Avis 2010 Annual Report Download - page 50

Table of Contents
The $165 million decrease in ancillary revenues was also primarily due to the decline in rental days and reflected (i) an $80 million decrease in
gasoline sales, which was more than offset in Adjusted EBITDA by $137 million of decreased gasoline expense, (ii) a $44 million decrease in
airport concession and vehicle licensing revenues, which was partially offset by $32 million lower airport concession and vehicle licensing fees
remitted to airport and other regulatory authorities, and (iii) a $41 million decrease in counter sales of insurance, GPS rentals and other items
(although revenues per transaction increased year-over-year).
We aggressively reduced costs during 2009 in response to the sharp decline in demand. Adjusted EBITDA reflected a $425 million
(16%) decrease in operating expenses, including (i) a $218 million decrease in maintenance and damage, agency operator commissions,
shuttling, credit card fees, and other costs amid lower rental volumes, (ii) a $90 million decrease in selling, general and administrative expenses
related to decreases in marketing and commission expenditures, most of which are volume-related, and other items due primarily to
management’s actions to reduce expenditures, (iii) an $80 million decrease in employee costs, rents and other expenses related primarily to
reduced staffing levels and the closure of unprofitable locations, (iv) a $15 million decrease in insurance related costs, primarily due to the 21%
decrease in rental days, (v) a $12 million decrease in vehicle interest related to lower fleet levels, and (vi) a $7 million decrease in restructuring
costs. Adjusted EBITDA also benefited from $231 million (16%) of decreased fleet depreciation and lease charges reflecting a 20% decrease in
the average size of our domestic rental fleet and a 5% increase in per-unit fleet costs.
International Car Rental
Revenues and Adjusted EBITDA decreased $96 million (11%) and $15 million (11%), respectively, in 2009 compared with 2008, primarily due
to the impact of foreign currency exchange rate movements and lower demand for car rentals.
The revenue decrease of $96 million was comprised of a $72 million (12%) decrease in T&M revenue and a $24 million (9%) decrease in
ancillary revenues. The total decline in revenue includes a $58 million decrease related to foreign currency exchange rates, impacting T&M
revenue by $41 million and ancillary revenues by $17 million, and was largely offset in Adjusted EBITDA by the opposite impact of foreign
exchange on expenses of $42 million. The decrease in T&M revenue was principally driven by (i) a 2% decrease in T&M revenue per rental day,
all of which was due to the 7% negative impact of movements in foreign currency exchange rates, and (ii) a 9% decrease in rental days. The $25
million decrease in ancillary revenues was primarily due to the decline in rental days and reflected (i) a $15 million decrease in counter sales of
insurance, GPS rentals and other items, and (ii) a $9 million decrease in gasoline sales, which was completely offset in Adjusted EBITDA by
lower gasoline costs.
Adjusted EBITDA reflects a $42 million (10%) decrease in operating expenses, including (i) a $29 million decrease in agency operator
commissions, maintenance and damage, vehicle licensing, credit card fees and other costs amid lower rental volumes, (ii) a $7 million decrease
in vehicle interest related to lower fleet levels, (iii) a $6 million decrease in selling, general and administrative expenses related primarily to
decreased marketing and commission expenditures, and (iv) a $1 million decrease in restructuring costs year-over-year. Adjusted EBITDA also
benefited from a $27 million decrease in fleet depreciation and lease charges, reflecting a 10% reduction in the average size of our international
rental fleet and a 3% decrease in per-unit fleet costs.
Truck Rental
Revenues decreased $28 million (7%) while Adjusted EBITDA increased $17 million in 2009 compared with 2008.
The revenue decrease was primarily due to a decline of $23 million (8%) in T&M revenue and a $5 million (6%) decrease in ancillary revenues.
The decrease in T&M revenue was principally driven by a 7% decrease in rental days and a 1% decrease in T&M revenue per rental day in 2009
compared with 2008. The unfavorable effect of decreased revenue on Adjusted EBITDA was offset by (i) a decrease of $24 million (8%) in
operating
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