Debt Under Vehicle Programs and Borrowing Arrangements

9 Months Ended

Sep. 30, 2012

Debt Under Vehicle Programs and Borrowing Arrangements

12. Debt Under Vehicle Programs and Borrowing Arrangements

Debt under vehicle programs (including related party debt due to Avis Budget Rental Car Funding) consisted of:

	As of September 30, 2012		As of December 31, 2011
Debt due to Avis Budget Rental Car Funding (a)	$	5,813	$	4,574
Budget Truck financing (b)		280		188
Capital leases (c)		500		348
Other (c)		1,282		454
	$	7,875	$	5,564

^(a)  The increase principally reflects increased borrowing to fund an increase in the size of the Company’s U.S. car rental fleet.

^(b)  The increase principally reflects increased borrowing to fund vehicle purchases for the Company’s U.S. truck rental fleet.

^(c)  The increase principally reflects increased borrowing to fund an increase in the size of the Company’s international vehicle rental fleet.

In 2010, the Company established a variable funding note program with a maximum capacity of $400 million of notes to be issued by Avis Budget Rental Car Funding to the Company to finance the purchase of vehicles. During the nine months ended September 30, 2012, no funding occurred under the program.

The following table provides the contractual maturities of the Company’s debt under vehicle programs (including related party debt due to Avis Budget Rental Car Funding) at September 30, 2012:

	Vehicle- Backed Debt
Within 1 year (a)	$	1,122
Between 1 and 2 years		2,955
Between 2 and 3 years		1,258
Between 3 and 4 years		742
Between 4 and 5 years		1,033
Thereafter		765
	$	7,875

^(a)  Vehicle-backed debt maturing within one year includes term asset-backed securities of approximately $657 million and bank and bank-sponsored borrowings of $465 million.

As of September 30, 2012, available funding under the Company’s vehicle programs (including related party debt due to Avis Budget Rental Car Funding) consisted of:

	Total Capacity  (a)		Outstanding Borrowings		Available Capacity
Debt due to Avis Budget Rental Car Funding (b)	$	7,318	$	5,813	$	1,505
Budget Truck financing (c)		295		280		15
Capital leases		529		500		29
Other (d)		1,545		1,282		263
	$	9,687	$	7,875	$	1,812

^(a)  Capacity is subject to maintaining sufficient assets to collateralize debt.

^(b)  The outstanding debt is collateralized by approximately $7.5 billion of underlying vehicles and related assets.

^(c)  The outstanding debt is collateralized by $448 million of underlying vehicles and related assets.

^(d)  The outstanding debt is collateralized by approximately $2.3 billion of underlying vehicles and related assets.

Debt agreements under the Company’s vehicle-backed funding programs contain restrictive covenants, including restrictions on dividends paid to the Company by certain of its subsidiaries and restrictions on indebtedness, mergers, liens, liquidations and sale and leaseback transactions and in some cases also require compliance with certain financial requirements. As of September 30, 2012, the Company is not aware of any instances of non-compliance with any of the financial or restrictive covenants contained in the debt agreements under its vehicle-backed funding programs.