Avis 2010 Annual Report Download - page 52

Table of Contents
Stockholders’ equity increased $188 million primarily due to net income of $54 million for 2010 and a $129 million increase in accumulated
other comprehensive income primarily resulting from (i) a $71 million increase in currency translation, (ii) $36 million of net unrealized gains
on our cash flow hedges, and (iii) the reclassification of $24 million of unrealized losses on our interest rate swaps to earnings, primarily in
connection with the extinguishment of a portion of our floating rate term loan in 2010.
LIQUIDITY AND CAPITAL RESOURCES
Overview
Our principal sources of liquidity are cash on hand and our ability to generate cash through operations and financing activities, as well as
available funding arrangements and committed credit facilities, each of which is discussed below.
During 2010, we issued approximately $1.1 billion in senior notes, using the proceeds to partially repay and amend the terms of our floating rate
term loan, redeem some of our earlier maturing senior notes and have cash available for use toward our potential acquisition of Dollar Thrifty or
to redeem additional corporate indebtedness.
Cash Flows
Year Ended December 31, 2010 vs. Year Ended December 31, 2009
At December 31, 2010, we had $911 million of cash on hand, an increase of $429 million from $482 million at December 31, 2009. The
following table summarizes such increase:
During 2010, we generated $149 million more cash from operating activities compared with 2009. The change principally resulted from the
reimbursement from Wyndham for the use of certain of our tax attributes in connection with the conclusion of the IRS audit and improved
operating results, partially offset by the termination of interest rate swaps during 2010.
We used approximately $1.8 billion more cash in investing activities during 2010 compared with 2009. This change primarily reflects the
activities of our vehicle programs, which used approximately $1.3 billion more cash to purchase vehicles and received $825 million less in
proceeds from the disposition of vehicles. The use of cash in investing activities in 2010 reflects a more typical pattern for us, whereas the 2009
result reflects the effects of our reducing our fleet size in response to particularly weak economic conditions and demand for travel services. We
anticipate that our non-rental vehicle capital expenditures will approximate $85-95 million in 2011.
We generated approximately $1.8 billion more cash from financing activities during 2010 compared with 2009. This change primarily reflects an
approximately $1.8 billion net increase in cash provided from our vehicle programs’ financing activities due to our use of cash in financing
activities in 2009 for significant debt repayment associated with reducing our fleet size in response to weak economic conditions as discussed
above.
47
Year Ended December 31,
2010
2009
Change
Cash provided by (used in):
Operating activities
$
1,640
$
1,491
$
149
Investing activities
(1,603
)
166
(1,769
)
Financing activities
380
(1,465
)
1,845
Effects of exchange rate changes
12
32
(20
)
Net change in cash and cash equivalents
$
429
$
224
$
205