Guarantor and Non-Guarantor Consolidating Financial Statements

12 Months Ended

Dec. 31, 2013

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Guarantor and Non-guarantor Consolidating Financial Statements

Guarantor and Non-Guarantor Consolidating Financial Statements

The following consolidating financial information presents Consolidating Condensed Statements of Operations for the years ended December 31, 2013, 2012 and 2011, Consolidating Condensed Balance Sheets as of December 31, 2013 and December 31, 2012 and Consolidating Condensed Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011 for: (i) Avis Budget Group, Inc. (the “Parent”); (ii) ABCR 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, 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 notes issued by ABCR. See Note 13—Long-term Debt and Borrowing Arrangements for additional description of these guaranteed notes. The Senior Notes have separate investors than the equity investors of the Company and 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 Operations, certain expenses incurred by the Subsidiary Issuers are allocated to the guarantor and non-guarantor subsidiaries. Certain reclassifications have been made to the 2012 and 2011 consolidating condensed financial statements to correct the classification of intercompany transactions to report them on a gross basis and to conform to the current year presentation. The reclassified amounts had no impact on reported net income, stockholders’ equity, or the net change in cash for the periods presented for the Parent, Subsidiary Issuer, Guarantor Subsidiaries, Non-Guarantor Subsidiaries, Eliminations or the Company on a consolidated basis.

For the Year Ended December 31, 2013

			Parent			Subsidiary Issuers			Guarantor Subsidiaries			Non- Guarantor  Subsidiaries		Eliminations			Total
Revenues
	Vehicle rental		$	—		$	—		$	3,786		$	1,921	$	—		$	5,707
	Other		—			—			1,098			3,086		(1,954		)	2,230
Net revenues			—			—			4,884			5,007		(1,954		)	7,937
Expenses
	Operating		7			15			2,425			1,627		—			4,074
	Vehicle depreciation and lease charges, net		—			—			1,776			1,806		(1,771		)	1,811
	Selling, general and administrative		35			6			591			387		—			1,019
	Vehicle interest, net		—			—			182			265		(183		)	264
	Non-vehicle related depreciation and amortization		—			2			97			53		—			152
	Interest expense related to corporate debt, net:
		Interest expense	3			196			—			29		—			228
		Intercompany interest expense (income)	(12		)	(30		)	6			36		—			—
		Early extinguishment of debt	53			94			—			—		—			147
	Restructuring expense		—			—			25			36		—			61
	Transaction-related costs		1			24			3			23		—			51
	Impairment		—			33			—			—		—			33
Total expenses			87			340			5,105			4,262		(1,954		)	7,840
Income (loss) before income taxes and equity in earnings of subsidiaries			(87		)	(340		)	(221		)	745		—			97
Provision for (benefit from) income taxes			(14		)	(124		)	156			63		—			81
Equity in earnings of subsidiaries			89			305			682			—		(1,076		)	—
Net income			$	16		$	89		$	305		$	682	$	(1,076	)	$	16
Comprehensive income			$	23		$	96		$	310		$	657	$	(1,063	)	$	23

For the Year Ended December 31, 2012

			Parent			Subsidiary Issuers			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
Revenues
	Vehicle rental		$	—		$	—		$	3,491	$	1,806	$	—		$	5,297
	Other		1			—			1,052		2,130		(1,123		)	2,060
Net revenues			1			—			4,543		3,936		(1,123		)	7,357
Expenses
	Operating		—			5			2,305		1,514		—			3,824
	Vehicle depreciation and lease charges, net		—			—			902		996		(427		)	1,471
	Selling, general and administrative		21			—			573		331		—			925
	Vehicle interest, net		—			—			234		300		(237		)	297
	Non-vehicle related depreciation and amortization		—			2			75		48		—			125
	Interest expense related to corporate debt, net:
		Interest expense	9			246			—		13		—			268
		Intercompany interest expense (income)	(18		)	(314		)	277		55		—			—
		Early extinguishment of debt	44			31			—		—		—			75
	Restructuring expense		—			—			3		35		—			38
	Transaction-related costs		4			1			1		28		—			34
Total expenses			60			(29		)	4,370		3,320		(664		)	7,057
Income (loss) before income taxes and equity in earnings of subsidiaries			(59		)	29			173		616		(459		)	300
Provision for (benefit from) income taxes			(8		)	(106		)	72		52		—			10
Equity in earnings of subsidiaries			341			206			105		—		(652		)	—
Net income			$	290		$	341		$	206	$	564	$	(1,111	)	$	290
Comprehensive income			$	322		$	373		$	237	$	594	$	(1,204	)	$	322

For the Year Ended December 31, 2011

			Parent			Subsidiary  Issuers			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Total
Revenues
	Vehicle rental		$	—		$	—		$	3,393		$	945	$	—		$	4,338
	Other		2			—			1,006			1,702		(1,148		)	1,562
Net revenues			2			—			4,399			2,647		(1,148		)	5,900
Expenses
	Operating		3			8			2,241			773		—			3,025
	Vehicle depreciation and lease charges, net		—			—			921			868		(566		)	1,223
	Selling, general and administrative		11			—			564			181		—			756
	Vehicle interest, net		—			(1		)	243			296		(252		)	286
	Non-vehicle related depreciation and amortization		—			—			78			17		—			95
	Interest expense related to corporate debt, net:
		Interest expense	10			208			—			1		—			219
		Intercompany interest expense (income)	(14		)	(205		)	215			4		—			—
	Transaction-related costs		71			56			—			128		—			255
	Restructuring expense		—			—			2			3		—			5
Total expenses			81			66			4,264			2,271		(818		)	5,864
Income (loss) before income taxes and equity in earnings of subsidiaries			(79		)	(66		)	135			376		(330		)	36
Provision for (benefit from) income taxes			(27		)	(22		)	66			48		—			65
Equity in earnings (loss) of subsidiaries			23			67			(2		)	—		(88		)	—
Net income (loss)			$	(29	)	$	23		$	67		$	328	$	(418	)	$	(29	)
Comprehensive income (loss)			$	(43	)	$	7		$	50		$	358	$	(415	)	$	(43	)

As of December 31, 2013

		Parent		Subsidiary Issuers		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
Assets
Current assets:
	Cash and cash equivalents	$	14	$	242	$	12	$	425	$	—		$	693
	Receivables, net	—		—		150		469		—			619
	Deferred income taxes	1		—		156		21		(1		)	177
	Other current assets	4		80		82		289		—			455
Total current assets		19		322		400		1,204		(1		)	1,944
Property and equipment, net		—		109		312		193		—			614
Deferred income taxes		20		1,142		141		—		(4		)	1,299
Goodwill		—		—		342		349		—			691
Other intangibles, net		—		41		519		363		—			923
Other non-current assets		104		96		18		143		—			361
Intercompany receivables		145		210		853		331		(1,539		)	—
Investment in subsidiaries		671		2,900		3,347		—		(6,918		)	—
Total assets exclusive of assets under vehicle programs		959		4,820		5,932		2,583		(8,462		)	5,832
Assets under vehicle programs:
	Program cash	—		—		—		116		—			116
	Vehicles, net	—		10		9		9,563		—			9,582
	Receivables from vehicle manufacturers and other	—		—		—		391		—			391
	Investment in Avis Budget Rental Car Funding (AESOP) LLC-related party	—		—		—		363		—			363
		—		10		9		10,433		—			10,452
Total assets		$	959	$	4,830	$	5,941	$	13,016	$	(8,462	)	$	16,284
Liabilities and stockholders’ equity
Current liabilities:
	Accounts payable and other current liabilities	$	25	$	238	$	487	$	730	$	(1	)	$	1,479
	Short-term debt and current portion of long-term debt	65		14		3		7		—			89
Total current liabilities		90		252		490		737		(1		)	1,568
Long-term debt		—		2,955		6		344		—			3,305
Other non-current liabilities		98		96		221		436		(4		)	847
Intercompany payables		—		844		340		355		(1,539		)	—
Total liabilities exclusive of liabilities under vehicle programs		188		4,147		1,057		1,872		(1,544		)	5,720
Liabilities under vehicle programs:
	Debt	—		11		—		1,670		—			1,681
	Due to Avis Budget Rental Car Funding (AESOP) LLC-related party	—		—		—		5,656		—			5,656
	Deferred income taxes	—		—		1,984		193		—			2,177
	Other	—		1		—		278		—			279
		—		12		1,984		7,797		—			9,793
Total stockholders’ equity		771		671		2,900		3,347		(6,918		)	771
Total liabilities and stockholders’ equity		$	959	$	4,830	$	5,941	$	13,016	$	(8,462	)	$	16,284

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		142		972		546		96		(1,756		)	—
Investment in subsidiaries		723		2,030		3,293		—		(6,046		)	—
Total assets exclusive of assets under vehicle programs		1,010		4,607		5,142		2,170		(7,810		)	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	$	4,614	$	5,155	$	12,249	$	(7,810	)	$	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
Intercompany payables		—		831		372		553		(1,756		)	—
Total liabilities exclusive of liabilities under vehicle programs		253		3,885		1,150		1,673		(1,764		)	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	$	4,614	$	5,155	$	12,249	$	(7,810	)	$	15,218

For the Year Ended December 31, 2013

	Parent			Subsidiary Issuers			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net cash provided by (used in) operating activities	$	(3	)	$	562		$	26		$	1,736		$	(68	)	$	2,253
Investing activities
Property and equipment additions	—			(26		)	(69		)	(57		)	—			(152		)
Proceeds received on asset sales	—			7			4			11			—			22
Net assets acquired (net of cash acquired)	—			(564		)	8			19			—			(537		)
Intercompany loan receipts	—			233			60			—			(293		)	—
Other, net	146			(50		)	48			4			(146		)	2
Net cash provided by (used in) investing activities exclusive of vehicle programs	146			(400		)	51			(23		)	(439		)	(665		)
Vehicle programs:
Decrease in program cash	—			—			—			(79		)	—			(79		)
Investment in vehicles	—			(44		)	(2		)	(10,853		)	—			(10,899		)
Proceeds received on disposition of vehicles	—			40			—			9,369			—			9,409
	—			(4		)	(2		)	(1,563		)	—			(1,569		)
Net cash provided by (used in) investing activities	146			(404		)	49			(1,586		)	(439		)	(2,234		)
Financing activities
Proceeds from long-term borrowings	—			2,647			—			325			—			2,972
Payments on long-term borrowings	(115		)	(2,489		)	(3		)	(1		)	—			(2,608		)
Net change in short term borrowings	—			—			—			(36		)	—			(36		)
Debt financing fees	—			(30		)	—			(7		)	—			(37		)
Purchases of warrants	(78		)	—			—			—			—			(78		)
Proceeds from sale of call options	104			—			—			—			—			104
Repurchases of common stock	(48		)	—			—			—			—			(48		)
Intercompany loan payments	—			—			(60		)	(233		)	293			—
Other, net	3			(146		)	—			(68		)	214			3
Net cash provided by (used in) financing activities exclusive of vehicle programs	(134		)	(18		)	(63		)	(20		)	507			272
Vehicle programs:
Proceeds from borrowings	—			—			—			12,953			—			12,953
Payments on borrowings	—			—			—			(13,115		)	—			(13,115		)
Debt financing fees	—			—			—			(34		)	—			(34		)
	—			—			—			(196		)	—			(196		)
Net cash provided by (used in) financing activities	(134		)	(18		)	(63		)	(216		)	507			76
Effect of changes in exchange rates on cash and cash equivalents	—			—			—			(8		)	—			(8		)
Net increase (decrease) in cash and cash equivalents	9			140			12			(74		)	—			87
Cash and cash equivalents, beginning of period	5			102			—			499			—			606
Cash and cash equivalents, end of period	$	14		$	242		$	12		$	425		$	—		$	693

For the Year Ended December 31, 2012

	Parent			Subsidiary Issuers			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net cash provided by (used in) operating activities	$	(43	)	$	272		$	70		$	1,650		$	(60	)	$	1,889
Investing activities
Property and equipment additions	—			(26		)	(43		)	(63		)	—			(132		)
Proceeds received on asset sales	—			8			3			10			—			21
Net assets acquired, (net of cash acquired)	—			—			(1		)	(68		)	—			(69		)
Intercompany loan receipts	224			—			—			—			(224		)	—
Other, net	29			(4		)	(1		)	(8		)	(25		)	(9		)
Net cash provided by (used in) investing activities exclusive of vehicle programs	253			(22		)	(42		)	(129		)	(249		)	(189		)
Vehicle programs:
Increase in program cash	—			—			—			(13		)	—			(13		)
Investment in vehicles	—			(4		)	(20		)	(11,043		)	—			(11,067		)
Proceeds received on disposition of vehicles	—			3			2			9,191			—			9,196
	—			(1		)	(18		)	(1,865		)	—			(1,884		)
Net cash provided by (used in) investing activities	253			(23		)	(60		)	(1,994		)	(249		)	(2,073		)
Financing activities
Proceeds from long-term borrowings	—			1,152			—			—			—			1,152
Payments on long-term borrowings	(222		)	(1,268		)	(11		)	—			—			(1,501		)
Net change in short term borrowings	—			—			—			10			—			10
Debt financing fees	—			(16		)	—			—			—			(16		)
Purchases of warrants	(29		)	—			—			—			—			(29		)
Proceeds from sale of call options	43			—			—			—			—			43
Intercompany loan payments	—			(224		)	—			—			224			—
Other, net	1			(25		)	—			(60		)	85			1
Net cash provided by (used in) financing activities exclusive of vehicle programs	(207		)	(381		)	(11		)	(50		)	309			(340		)
Vehicle programs:
Proceeds from borrowings	—			—			—			12,108			—			12,108
Payments on borrowings	—			—			—			(11,490		)	—			(11,490		)
Debt financing fees	—			—			—			(28		)	—			(28		)
	—			—			—			590			—			590
Net cash provided by (used in) financing activities	(207		)	(381		)	(11		)	540			309			250
Effect of changes in exchange rates on cash and cash equivalents	—			—			—			6			—			6
Net increase (decrease) in cash and cash equivalents	3			(132		)	(1		)	202			—			72
Cash and cash equivalents, beginning of period	2			234			1			297			—			534
Cash and cash equivalents, end of period	$	5		$	102		$	—		$	499		$	—		$	606

For the Year Ended December 31, 2011

	Parent			Subsidiary Issuers			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net cash provided by (used in) operating activities	$	(32	)	$	(1,241	)	$	(236	)	$	2,661		$	426		$	1,578
Investing activities
Property and equipment additions	—			(17		)	(34		)	(14		)	—			(65		)
Proceeds received on asset sales	—			10			2			2			—			14
Net assets acquired (net of cash acquired)	—			—			(1		)	(840		)	—			(841		)
Intercompany loan advances	(486		)	—			—			—			486			—
Intercompany loan receipts	242			—			—			—			(242		)	—
Other, net	(34		)	(1		)	—			(4		)	32			(7		)
Net cash (used in) provided by investing activities exclusive of vehicle programs	(278		)	(8		)	(33		)	(856		)	276			(899		)
Vehicle programs:
Increase in program cash	—			—			—			(11		)	—			(11		)
Investment in vehicles	—			(73		)	(3		)	(8,583		)	—			(8,659		)
Proceeds received on disposition of vehicles	—			11			7			7,178			—			7,196
Investment in debt securities of AESOP – related party	(400		)	—			—			—			—			(400		)
Investment in debt securities of AESOP – related party	400			—			—			—			—			400
	—			(62		)	4			(1,416		)	—			(1,474		)
Net cash provided by (used in) investing activities	(278		)	(70		)	(29		)	(2,272		)	276			(2,373		)
Financing activities
Proceeds from long-term borrowings	—			682			—			—			—			682
Payments on long-term borrowings	—			(4		)	(4		)	(660		)	—			(668		)
Net change in short-term borrowings	—			—			—			(97		)	—			(97		)
Debt financing fees	(38		)	(40		)	—			—			—			(78		)
Intercompany loan borrowings	—			486			—			—			(486		)	—
Intercompany loan payments	—			(242		)	—			—			242			—
Other, net	93			152			268			(54		)	(458		)	1
Net cash provided by (used in) financing activities exclusive of vehicle programs	55			1,034			264			(811		)	(702		)	(160		)
Vehicle programs:
Proceeds from borrowings	—			—			—			10,534			—			10,534
Payments on borrowings	—			—			—			(9,917		)	—			(9,917		)
Debt financing fees	—			(2		)	(1		)	(30		)	—			(33		)
	—			(2		)	(1		)	587			—			584
Net cash provided by (used in) financing activities	55			1,032			263			(224		)	(702		)	424
Effect of changes in exchange rates on cash and cash equivalents	—			—			—			(6		)	—			(6		)
Net increase (decrease) in cash and cash equivalents	(255		)	(279		)	(2		)	159			—			(377		)
Cash and cash equivalents, beginning of period	257			513			3			138			—			911
Cash and cash equivalents, end of period	$	2		$	234		$	1		$	297		$	—		$	534