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Guarantor and Non-Guarantor Consolidating Condensed Financial Statements
3 Months Ended
Mar. 31, 2013
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Guarantor and Non-Guarantor Consolidating Condensed Financial Statements
Guarantor and Non-Guarantor Consolidating Condensed Financial Statements

The following consolidating financial information presents Consolidating Condensed Statements of Comprehensive Income for the three months ended March 31, 2013 and 2012, Consolidating Condensed Balance Sheets as of March 31, 2013 and December 31, 2012, and Consolidating Condensed Statements of Cash Flows for the three months ended March 31, 2013 and 2012 for: (i) Avis Budget Group, Inc. (the “Parent”); (ii) Avis Budget Car Rental and Avis Budget Finance, Inc. (the “Subsidiary Issuers”); (iii) the guarantor subsidiaries; (iv) the non-guarantor subsidiaries; (v) elimination entries necessary to consolidate the Parent with the Subsidiary Issuers, and the guarantor and non-guarantor subsidiaries; and (vi) the Company on a consolidated basis. The Subsidiary Issuers and the guarantor and non-guarantor subsidiaries are 100% owned by the Parent, either directly or indirectly. All guarantees are full and unconditional and joint and several. This financial information is being presented in relation to the Company’s guarantee of the payment of principal, premium (if any) and interest on the senior notes issued by Avis Budget Car Rental. These senior notes consist of Avis Budget Car Rental’s Floating rate notes due 2014, 4⅞% notes due 2017, 9⅝% notes due 2018, 8¼% notes due 2019 and 9¾% notes due 2020 (collectively, the “Notes”). See Note 11—Long-term Debt and Borrowing Arrangements for additional information regarding these Notes. The Notes are guaranteed by the Parent and certain subsidiaries.

Investments in subsidiaries are accounted for using the equity method of accounting for purposes of the consolidating presentation. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions. For purposes of the accompanying Consolidating Condensed Statements of Comprehensive Income, certain expenses incurred by the Subsidiary Issuers are allocated to the guarantor and non-guarantor subsidiaries.
Consolidating Condensed Statements of Comprehensive Income

Three Months Ended March 31, 2013 
 
Parent
 
Subsidiary
Issuers
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Total
Revenues
 
 
 
 
 
 
 
 
 
 
 
Vehicle rental
$

 
$

 
$
837

 
$
380

 
$

 
$
1,217

Other

 

 
246

 
526

 
(298
)
 
474

Net revenues

 

 
1,083

 
906

 
(298
)
 
1,691

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
Operating
2

 
1

 
558

 
370

 

 
931

Vehicle depreciation and lease charges, net

 

 
260

 
243

 
(117
)
 
386

Selling, general and administrative
9

 
1

 
131

 
83

 

 
224

Vehicle interest, net

 

 
42

 
58

 
(43
)
 
57

Non-vehicle related depreciation and amortization

 

 
22

 
12

 

 
34

Interest expense related to corporate debt, net:
 
 
 
 
 
 
 
 
 
 
 
Interest expense
1

 
54

 

 
3

 

 
58

Intercompany interest expense (income)
(3
)
 
(11
)
 
3

 
11

 

 

Early extinguishment of debt
39

 
1

 

 

 

 
40

Restructuring expenses

 

 
6

 
4

 

 
10

Transaction-related costs

 
4

 
1

 
3

 

 
8

Total expenses
48

 
50

 
1,023

 
787

 
(160
)
 
1,748

Income (loss) before income taxes and equity in earnings of subsidiaries
(48
)
 
(50
)
 
60

 
119

 
(138
)
 
(57
)
Provision for (benefit from) income taxes
(4
)
 
(20
)
 
14

 
(1
)
 

 
(11
)
Equity in earnings (loss) of subsidiaries
(2
)
 
28

 
(18
)
 

 
(8
)
 

Net income (loss)
$
(46
)
 
$
(2
)
 
$
28

 
$
120

 
$
(146
)
 
$
(46
)
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income (loss)
$
(69
)
 
$
(25
)
 
$
2

 
$
95

 
$
(72
)
 
$
(69
)
Three Months Ended March 31, 2012 
 
Parent
 
Subsidiary
Issuers
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Total
Revenues
 
 
 
 
 
 
 
 
 
 
 
Vehicle rental
$

 
$

 
$
786

 
$
382

 
$

 
$
1,168

Other

 

 
235

 
474

 
(254
)
 
455

Net revenues

 

 
1,021

 
856

 
(254
)
 
1,623

 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
Operating
(1
)
 
6

 
537

 
351

 

 
893

Vehicle depreciation and lease charges, net

 

 
197

 
212

 
(91
)
 
318

Selling, general and administrative
5

 

 
137

 
77

 

 
219

Vehicle interest, net

 

 
61

 
75

 
(62
)
 
74

Non-vehicle related depreciation and amortization

 

 
19

 
13

 

 
32

Interest expense related to corporate debt, net:
 
 
 
 
 
 
 
 
 
 
 
Interest expense
3

 
64

 

 
6

 

 
73

Intercompany interest expense (income)
(7
)
 
(81
)
 
74

 
14

 

 

Early extinguishment of debt
18

 
9

 

 

 

 
27

Restructuring expenses

 

 

 
7

 

 
7

Transaction-related costs
3

 

 

 
3

 

 
6

Total expenses
21

 
(2
)
 
1,025

 
758

 
(153
)
 
1,649

Income (loss) before income taxes and equity in earnings of subsidiaries
(21
)
 
2

 
(4
)
 
98

 
(101
)
 
(26
)
Provision for (benefit from) income taxes
(1
)
 
3

 
(2
)
 
(3
)
 

 
(3
)
Equity in earnings (loss) of subsidiaries
(3
)
 
(2
)
 

 

 
5

 

Net income (loss)
$
(23
)
 
$
(3
)
 
$
(2
)
 
$
101

 
$
(96
)
 
$
(23
)
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income
$
21

 
$
41

 
$
42

 
$
146

 
$
(229
)
 
$
21


Consolidating Condensed Balance Sheets

As of March 31, 2013
 
Parent
 
Subsidiary
Issuers
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
6

 
$
17

 
$
8

 
$
538

 
$

 
$
569

Receivables, net

 

 
184

 
407

 

 
591

Deferred income taxes
3

 

 
141

 
12

 
(3
)
 
153

Other current assets
4

 
88

 
116

 
350

 

 
558

Total current assets
13

 
105

 
449

 
1,307

 
(3
)
 
1,871

 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net

 
93

 
310

 
156

 

 
559

Deferred income taxes
20

 
1,179

 
148

 

 
(1
)
 
1,346

Goodwill

 

 
348

 
298

 

 
646

Other intangibles, net

 
42

 
530

 
338

 

 
910

Other non-current assets
108

 
87

 
21

 
145

 

 
361

Intercompany receivables (payables)
142

 
100

 
282

 
(524
)
 

 

Investment in subsidiaries
603

 
2,546

 
3,230

 

 
(6,379
)
 

Total assets exclusive of assets under vehicle programs
886

 
4,152

 
5,318

 
1,720

 
(6,383
)
 
5,693

 
 
 
 
 
 
 
 
 
 
 
 
Assets under vehicle programs:
 
 
 
 
 
 
 
 
 
 
 
Program cash

 

 

 
53

 

 
53

Vehicles, net

 
7

 
11

 
10,144

 

 
10,162

Receivables from vehicle manufacturers and other

 

 

 
287

 

 
287

Investment in Avis Budget Rental Car Funding (AESOP) LLC-related party

 

 

 
362

 

 
362

 

 
7

 
11

 
10,846

 

 
10,864

Total assets
$
886

 
$
4,159

 
$
5,329

 
$
12,566

 
$
(6,383
)
 
$
16,557

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and stockholders’ equity
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable and other current liabilities
$
13

 
$
214

 
$
557

 
$
765

 
$
(3
)
 
$
1,546

Short-term debt and current portion of long-term debt

 
15

 
3

 
11

 

 
29

Total current liabilities
13

 
229

 
560

 
776

 
(3
)
 
1,575

 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
77

 
3,233

 
8

 

 

 
3,318

Other non-current liabilities
102

 
91

 
276

 
416

 
(1
)
 
884

Total liabilities exclusive of liabilities under vehicle programs
192

 
3,553

 
844

 
1,192

 
(4
)
 
5,777

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities under vehicle programs:
 
 
 
 
 
 
 
 
 
 
 
Debt

 
3

 

 
1,586

 

 
1,589

Due to Avis Budget Rental Car Funding (AESOP) LLC-related party

 

 

 
5,873

 

 
5,873

Deferred income taxes

 

 
1,939

 
187

 

 
2,126

Other

 

 

 
498

 

 
498

 

 
3

 
1,939

 
8,144

 

 
10,086

Total stockholders’ equity
694

 
603

 
2,546

 
3,230

 
(6,379
)
 
694

Total liabilities and stockholders’ equity
$
886

 
$
4,159

 
$
5,329

 
$
12,566

 
$
(6,383
)
 
$
16,557

As of December 31, 2012
 
Parent
 
Subsidiary
Issuers
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
5

 
$
102

 
$

 
$
499

 
$

 
$
606

Receivables, net

 

 
156

 
397

 

 
553

Deferred income taxes
3

 
1

 
138

 
4

 

 
146

Other current assets
5

 
73

 
81

 
246

 

 
405

Total current assets
13

 
176

 
375

 
1,146

 

 
1,710

 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net

 
90

 
276

 
163

 

 
529

Deferred income taxes
23

 
1,216

 
223

 

 
(8
)
 
1,454

Goodwill

 

 
74

 
301

 

 
375

Other intangibles, net

 
43

 
341

 
347

 

 
731

Other non-current assets
109

 
80

 
14

 
117

 

 
320

Intercompany receivables (payables)
142

 
141

 
174

 
(457
)
 

 

Investment in subsidiaries
723

 
2,030

 
3,293

 

 
(6,046
)
 

Total assets exclusive of assets under vehicle programs
1,010

 
3,776

 
4,770

 
1,617

 
(6,054
)
 
5,119

 
 
 
 
 
 
 
 
 
 
 
 
Assets under vehicle programs:
 
 
 
 
 
 
 
 
 
 
 
Program cash

 

 

 
24

 

 
24

Vehicles, net

 
7

 
13

 
9,254

 

 
9,274

Receivables from vehicle manufacturers and other

 

 

 
439

 

 
439

Investment in Avis Budget Rental Car Funding (AESOP) LLC-related party

 

 

 
362

 

 
362

 

 
7

 
13

 
10,079

 

 
10,099

Total assets
$
1,010

 
$
3,783

 
$
4,783

 
$
11,696

 
$
(6,054
)
 
$
15,218

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and stockholders’ equity
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable and other current liabilities
$
22

 
$
250

 
$
490

 
$
659

 
$

 
$
1,421

Short-term debt and current portion of long-term debt

 
13

 
3

 
41

 

 
57

Total current liabilities
22

 
263

 
493

 
700

 

 
1,478

 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
128

 
2,712

 
8

 

 

 
2,848

Other non-current liabilities
103

 
79

 
277

 
420

 
(8
)
 
871

Total liabilities exclusive of liabilities under vehicle programs
253

 
3,054

 
778

 
1,120

 
(8
)
 
5,197

 
 
 
 
 
 
 
 
 
 
 
 
Liabilities under vehicle programs:
 
 
 
 
 
 
 
 
 
 
 
Debt

 
4

 

 
1,599

 

 
1,603

Due to Avis Budget Rental Car Funding (AESOP) LLC-related party

 

 

 
5,203

 

 
5,203

Deferred income taxes

 

 
1,975

 
188

 

 
2,163

Other

 
2

 

 
293

 

 
295

 

 
6

 
1,975

 
7,283

 

 
9,264

Total stockholders’ equity
757

 
723

 
2,030

 
3,293

 
(6,046
)
 
757

Total liabilities and stockholders’ equity
$
1,010

 
$
3,783

 
$
4,783

 
$
11,696

 
$
(6,054
)
 
$
15,218





Consolidating Condensed Statements of Cash Flows

Three Months Ended March 31, 2013 
 
Parent
 
Subsidiary
Issuers
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Total
Net cash provided by (used in) operating activities
$
6

 
$
(12
)
 
$
(25
)
 
$
331

 
$

 
$
300

 
 
 
 
 
 
 
 
 
 
 
 
Investing activities
 
 
 
 
 
 
 
 
 
 
 
Property and equipment additions

 
(5
)
 
(10
)
 
(6
)
 

 
(21
)
Proceeds received on asset sales

 
2

 

 
2

 

 
4

Net assets acquired, net of cash acquired

 
(513
)
 
16

 
21

 

 
(476
)
Other, net

 
(1
)
 
28

 
(1
)
 

 
26

Net cash provided by (used in) investing activities exclusive of vehicle programs

 
(517
)
 
34

 
16

 

 
(467
)
 
 
 
 
 
 
 
 
 
 
 
 
Vehicle programs:
 
 
 
 
 
 
 
 
 
 
 
Increase in program cash

 

 

 
(24
)
 

 
(24
)
Investment in vehicles

 
(1
)
 

 
(3,110
)
 

 
(3,111
)
Proceeds received on disposition of vehicles

 
1

 

 
2,393

 

 
2,394

 

 

 

 
(741
)
 

 
(741
)
Net cash provided by (used in) investing activities

 
(517
)
 
34

 
(725
)
 

 
(1,208
)
 
 
 
 
 
 
 
 
 
 
 
 
Financing activities
 
 
 
 
 
 
 
 
 
 
 
Proceeds from long-term borrowings

 
1,225

 

 

 

 
1,225

Payments on long-term borrowings
(89
)
 
(698
)
 
(1
)
 

 

 
(788
)
Net change in short-term borrowings

 

 

 
(31
)
 

 
(31
)
Purchase of warrants
(28
)
 

 

 

 

 
(28
)
Proceeds from sale of call options
37

 

 

 

 

 
37

Net intercompany transactions
73

 
(73
)
 

 

 

 

Debt financing fees

 
(10
)
 

 

 

 
(10
)
Other, net
2

 

 

 

 

 
2

Net cash provided by (used in) financing activities exclusive of vehicle programs
(5
)
 
444

 
(1
)
 
(31
)
 

 
407

 
 
 
 
 
 
 
 
 
 
 
 
Vehicle programs:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from borrowings

 

 

 
3,762

 

 
3,762

Payments on borrowings

 

 

 
(3,279
)
 

 
(3,279
)
Debt financing fees

 

 

 
(17
)
 

 
(17
)
 

 

 

 
466

 

 
466

Net cash provided by (used in) financing activities
(5
)
 
444

 
(1
)
 
435

 

 
873

Effect of changes in exchange rates on cash and cash equivalents

 

 

 
(2
)
 

 
(2
)
Net increase (decrease) in cash and cash equivalents
1

 
(85
)
 
8

 
39

 

 
(37
)
Cash and cash equivalents, beginning of period
5

 
102

 

 
499

 

 
606

Cash and cash equivalents, end of period
$
6

 
$
17

 
$
8

 
$
538

 
$

 
$
569

Three Months Ended March 31, 2012 
 
Parent
 
Subsidiary
Issuers
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Total
Net cash provided by (used in) operating activities
$
(6
)
 
$
(86
)
 
$
8

 
$
334

 
$
3

 
$
253

 
 
 
 
 
 
 
 
 
 
 
 
Investing activities
 
 
 
 
 
 
 
 
 
 
 
Property and equipment additions

 
(5
)
 
(7
)
 
(8
)
 

 
(20
)
Proceeds received on asset sales

 
2

 

 
1

 

 
3

Other, net
4

 
(1
)
 

 
(4
)
 

 
(1
)
Net cash provided by (used in) investing activities exclusive of vehicle programs
4

 
(4
)
 
(7
)
 
(11
)
 

 
(18
)
 
 
 
 
 
 
 
 
 
 
 
 
Vehicle programs:
 
 
 
 
 
 
 
 
 
 
 
Increase in program cash

 

 

 
(39
)
 

 
(39
)
Investment in vehicles

 
(1
)
 

 
(3,052
)
 

 
(3,053
)
Proceeds received on disposition of vehicles

 
4

 

 
2,139

 

 
2,143

 

 
3

 

 
(952
)
 

 
(949
)
Net cash provided by (used in) investing activities
4

 
(1
)
 
(7
)
 
(963
)
 

 
(967
)
 
 
 
 
 
 
 
 
 
 
 
 
Financing activities
 
 
 
 
 
 
 
 
 
 
 
Proceeds from long-term borrowings

 
624

 

 

 

 
624

Payments on long-term borrowings
(101
)
 
(419
)
 
(1
)
 
1

 

 
(520
)
Net change in short-term borrowings

 

 

 
(12
)
 

 
(12
)
Purchase of warrants
(13
)
 

 

 

 

 
(13
)
Proceeds from sale of call option
19

 

 

 

 

 
19

Net intercompany transactions
100

 
(99
)
 
1

 
1

 
(3
)
 

Debt financing fees

 
(8
)
 

 

 

 
(8
)
Net cash provided by (used in) financing activities exclusive of vehicle programs
5

 
98

 

 
(10
)
 
(3
)
 
90

 
 
 
 
 
 
 
 
 
 
 
 
Vehicle programs:
 
 
 
 
 
 
 
 
 
 
 
Proceeds from borrowings

 

 

 
3,140

 

 
3,140

Payments on borrowings

 

 

 
(2,440
)
 

 
(2,440
)
Debt financing fees

 

 

 
(7
)
 

 
(7
)
 

 

 

 
693

 

 
693

Net cash provided by (used in) financing activities
5

 
98

 

 
683

 
(3
)
 
783

Effect of changes in exchange rates on cash and cash equivalents

 

 

 
3

 

 
3

Net increase in cash and cash equivalents
3

 
11

 
1

 
57

 

 
72

Cash and cash equivalents, beginning of period
2

 
234

 
1

 
297

 

 
534

Cash and cash equivalents, end of period
$
5

 
$
245

 
$
2

 
$
354

 
$

 
$
606