Avis 2011 Annual Report Download - page 1

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April 17, 2012
Dear fellow shareholders:
2011 was an outstanding year for Avis Budget Group. We made significant progress on a
number of strategic initiatives, which contributed to our growth and profitability. We re-
united global ownership of each of the Avis and Budget brands through our acquisition of Avis
Europe plc, our long-time licensee, in a financially compelling transaction. We reported
record results. And in the process, we positioned Avis Budget Group for even greater long-
term success. In this letter, I’ d like to cover each of these topics in a bit more detail.
Strategic Progress. We entered 2011 with a focus on executing a new strategic plan designed
to generate profitable organic growth for our brands, improve our customer experience and
gain efficiency throughout our operations. We executed effectively against these initiatives.
We invested in new and enhanced brand marketing for Avis and Budget which resonated with
customers and strengthened our brands. We grew our rental volumes significantly among
international and small-business travelers, two particularly profitable segments that we have
targeted. We increased the profitability of our off-airport, or local-market, operations by
dual-branding another 400 locations. And we achieved more than $100 million of revenue
growth through our portfolio of new and existing travel and affinity partnerships, which we
expect will add to our growth again in 2012.
Our Performance Excellence process-improvement efforts made another strong contribution
to our financial results in 2011, generating more than $70 million in incremental savings from
projects that improved our efficiency and lowered our costs. And through our Company-wide
Customer Led, Service Driven initiative, we enhanced the customer experience we provide,
driving year-over-year improvements in Avis’ and Budget’ s customer satisfaction scores.
Acquisition of Avis Europe. We have long believed that competing with two truly global
brands offers a number of competitive advantages, so we were gratified to be able to
complete the acquisition of Avis Europe in October 2011. We can now provide customers with
global dual-branded solutions that no other company can match and are a leader in fast-
growing travel regions such as India and China.
We see significant opportunities to realize benefits from the combination with Avis Europe.
We expect to be generating more than $35 million in annual synergies by the first anniversary
of the transaction. And, including those synergies, the acquisition of Avis Europe would have
added more than $100 million to our 2011 pretax earnings on a pro forma basis1, which
highlights just how financially attractive this transaction was for us. Just as importantly, we
expect that substantial opportunities to reduce costs and accelerate growth, particularly of
the Budget brand in Europe, will remain available even after the first wave of synergies.
Record Results. Our financial performance was also a highlight. In 2011, we grew revenue
by 14% overall, reported strong organic revenue growth in each of our operating segments
(North America, International and Truck Rental), and reported double-digit growth in
Adjusted EBITDA in each of those operating segments. Most importantly, because we