Avis 2012 Annual Report Download - page 9

2
In 2012, revenue increased as North American travel demand grew and our results included the results of Avis Europe for a
full year compared to only part of the year in 2011. We focused on efforts to integrate our European operations and grow our
brands globally. We continue to benefit from our cost-reduction efforts, including our Performance Excellence process
improvement initiative, which has helped us generate more than $300 million in annual cost savings and other benefits since
the program was launched in 2007. As part of the expansion of the Company’s global operations, we have expanded the
program into Europe and Asia. We have achieved cost savings in numerous ways, including through:
 implementation of process improvements impacting virtually all areas of our business;
 reductions in operating and selling, general and administrative expenses, including significant reductions in staff,
many of which were trimmed from fixed and semi-fixed overhead;
 a review of location, segment and customer profitability to identify and respond appropriately to unprofitable
aspects of our businesses;
 targeted price increases and changes to our sales, marketing and affinity programs in order to improve revenue per
day and overall profitability;
 reductions in fleet costs and further consolidation of purchasing programs;
 further consolidation of customer-facing and back-office functions and locations across our operations; and
 reduction in costs, primarily general and administrative expenses, as we integrate the operations of Avis Europe.
In 2012, we completed more than 29 million vehicle rental transactions worldwide. We retained approximately 98% of our
existing commercial contracts and maintained, expanded or entered into marketing alliances with key marketing partners. In
2012, Avis was named North America’s Leading Car Hire and Europe’s Leading Business Car Hire by the World Travel
Awards, and received other numerous awards. Avis was also again named the leading car rental company in customer loyalty
by the Brand Keys Customer Loyalty Engagement Index for the 13th consecutive year.
In 2012, we maintained a diverse car rental fleet, in which no vehicle manufacturer represented more than 21% of our 2012
fleet purchases, and we continued to adjust our fleet levels to be consistent with demand. We continue to utilize sophisticated
yield-management technology to optimize our pricing and fleet planning, and we continue to analyze and streamline our
operations to gain efficiencies. In addition, our approximately 28,000 employees worldwide continue to provide reliable,
high-quality vehicle rental services that foster customer satisfaction and customer loyalty.
MARKET CONDITIONS AND OUTLOOK
For 2013, our objective is to focus on growing our business profitably, strengthening our position as a leading global provider
of vehicle rental services, continuing to enhance the quality of vehicle rental services we provide to customers, and
maintaining and enhancing efficiencies achieved through process improvement and other actions. We expect to achieve our
goals by focusing our efforts on the following core strategic initiatives:
 Growing Profitably. We plan to continue and pursue numerous opportunities intended to increase our revenues and
make positive contributions to our earnings. For instance, we plan to continue to focus on promoting car class
upgrades, adjusting our mix of vehicles to match customer demand, growing our rentals to small-business and
international travelers, increasing the number of rentals which are booked through our own websites, increasing the
proportion of transactions in which customers prepay us and expanding our ancillary revenues derived from offering
additional products and services to on- and off-airport customers. We believe these efforts will each not only
generate incremental revenue, but also add to profitability. Opportunities for ancillary revenue growth include
adding sales of insurance coverages, loss damage waivers and other ancillary products and services, such as
electronic toll collection services, roadside safety protection and portable GPS navigation products, to the rental
transactions of an increasing percentage of our renters. We also plan to continue our focus on yield management and
pricing optimization and seek to increase the time and mileage rental fees we earn per rental day. We have
implemented technology, and will be adding additional systems, that strengthen our yield management and that
enable us to tailor our product/price offerings to specific customer segments. We expect to continue to adjust our
pricing to bolster profitability and match changes in demand.