Avis 2010 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 “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 Separation, Cendant changed its name to Avis Budget Group, Inc. Our common stock
currently trades on the NASDAQ Global Select Market 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 Separation. In connection with the 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 license the Avis car rental system (the “Avis System”), which is comprised of approximately 5,050 locations worldwide and
represents one of the largest car rental systems in the world. The Avis System encompasses locations at most of the largest airports and cities in
the United States and internationally.
We operate approximately 1,250 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 2010, our Avis operations generated total revenue of approximately $3.2 billion, of which
approximately 80% (or $2.6 billion) was derived from U.S. operations. The Avis System in Europe, Africa, the Middle East and parts of Asia is
primarily operated under royalty-free license agreements with a subsidiary of Avis Europe plc (“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. In addition, we license the Avis System to other independent business owners in approximately 900 locations throughout the
United States, Canada, Latin America, the Caribbean, Australia, New Zealand and parts of Asia. In 2010, approximately 95% of the Avis System
total U.S. revenue was generated by our locations and the remainder was generated by locations operated by independent licensees, which
generally pay royalty fees to us based on a percentage of applicable revenue.
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