17.

Guarantor and Non-Guarantor Consolidating Condensed Financial Statements

The following consolidating financial information presents Consolidating Condensed Statements of Comprehensive Income for the three and nine months ended September 30, 2012 and 2011, Consolidating Condensed Balance Sheets as of September 30, 2012 and December 31, 2011, and Consolidating Condensed Statements of Cash Flows for the nine months ended September 30, 2012 and 2011 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, 7³/₄% notes due 2016, 9⁵/₈% notes due 2018, 8¹/₄% notes due 2019 and 9³/₄% 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 September 30, 2012


	Parent			Subsidiary Issuers			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
Revenues
Vehicle rental	$	—		$	—		$	1,007	$	575	$	—		$	1,582
Other		—			—			294		616		(322	)		588

Net revenues		—			—			1,301		1,191		(322	)		2,170


Expenses
Operating		—			—			612		424		—			1,036
Vehicle depreciation and lease charges, net		—			—			267		312		(143	)		436
Selling, general and administrative		5			—			153		86		—			244
Vehicle interest, net		—			—			60		77		(60	)		77
Non-vehicle related depreciation and amortization		—			—			18		12		—			30
Interest expense related to corporate debt, net:
Interest expense		2			62			—		3		—			67
Intercompany interest expense (income)		(3	)		(75	)		64		14		—			—
Early extinguishment of debt		—			2			—		—		—			2
Transaction-related costs		(3	)		—			—		14		—			11
Restructuring charges		—			—			—		7		—			7

Total expenses		1			(11	)		1,174		949		(203	)		1,910

Income (loss) before income taxes and equity in earnings of subsidiaries		(1	)		11			127		242		(119	)		260
Provision for (benefit from) income taxes		—			(124	)		61		43		—			(20	)
Equity in earnings (loss) of subsidiaries		281			146			80		—		(507	)		—

Net income (loss)	$	280		$	281		$	146	$	199	$	(626	)	$	280


Comprehensive income	$	308		$	307		$	172	$	225	$	(704	)	$	308

Nine Months Ended September 30, 2012


	Parent			Subsidiary Issuers			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Total
Revenues
Vehicle rental	$	—		$	—		$	2,684	$	1,400	$	—		$	4,084
Other		1			—			806		1,593		(825	)		1,575

Net revenues		1			—			3,490		2,993		(825	)		5,659


Expenses
Operating		—			3			1,739		1,140		—			2,882
Vehicle depreciation and lease charges, net		—			—			650		736		(298	)		1,088
Selling, general and administrative		16			—			433		247		—			696
Vehicle interest, net		—			—			185		232		(186	)		231
Non-vehicle related depreciation and amortization		—			1			56		35		—			92
Interest expense related to corporate debt, net:
Interest expense		7			192			—		9		—			208
Intercompany interest expense (income)		(15	)		(231	)		205		41		—			—
Early extinguishment of debt		39			13			—		—		—			52
Transaction-related costs		—			—			1		20		—			21
Restructuring charges		—			—			1		25		—			26

Total expenses		47			(22	)		3,270		2,485		(484	)		5,296

Income (loss) before income taxes and equity in earnings of subsidiaries		(46	)		22			220		508		(341	)		363
Provision for (benefit from) income taxes		(4	)		(118	)		96		53		—			27
Equity in earnings (loss) of subsidiaries		378			238			114		—		(730	)		—

Net income (loss)	$	336		$	378		$	238	$	455	$	(1,071	)	$	336


Comprehensive income	$	361		$	403		$	262	$	483	$	(1,148	)	$	361

Three Months Ended September 30, 2011


	Parent			Subsidiary Issuers			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Revenues
Vehicle rental	$	—		$	—		$	995	$	216		$	—		$	1,211
Other		—			—			282		512			(382	)		412

Net revenues		—			—			1,277		728			(382	)		1,623


Expenses
Operating		—			1			615		167			—			783
Vehicle depreciation and lease charges, net		—			—			246		318			(260	)		304
Selling, general and administrative		3			—			159		28			—			190
Vehicle interest, net		—			—			59		53			(38	)		74
Non-vehicle related depreciation and amortization		—			—			20		2			—			22
Interest expense related to corporate debt, net:
Interest expense (income)		3			46			—		(1	)		—			48
Intercompany interest expense (income)		—			(46	)		46		—			—			—
Transaction-related costs		66			—			—		—			—			66

Total expenses		72			1			1,145		567			(298	)		1,487

Income (loss) before income taxes and equity in earnings of subsidiaries		(72	)		(1	)		132		161			(84	)		136
Provision for (benefit from) income taxes		(27	)		—			58		23			—			54
Equity in earnings (loss) of subsidiaries		127			128			54		—			(309	)		—

Net income (loss)	$	82		$	127		$	128	$	138		$	(393	)	$	82


Comprehensive income	$	15		$	60		$	61	$	93		$	(214	)	$	15

Nine Months Ended September 30, 2011


	Parent			Subsidiary Issuers			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Revenues
Vehicle rental	$	—		$	—		$	2,623	$	540		$	—		$	3,163
Other		—			—			772		1,399			(1,065	)		1,106

Net revenues		—			—			3,395		1,939			(1,065	)		4,269


Expenses
Operating		2			5			1,709		450			—			2,166
Vehicle depreciation and lease charges, net		—			—			686		865			(711	)		840
Selling, general and administrative		8			—			427		76			—			511
Vehicle interest, net		—			(1	)		166		148			(108	)		205
Non-vehicle related depreciation and amortization		—			—			59		6			—			65
Interest expense related to corporate debt, net:
Interest expense (income)		7			138			—		(2	)		—			143
Intercompany interest expense (income)		(8	)		(138	)		146		—			—			—
Transaction-related costs		102			—			—		—			—			102
Restructuring charges		—			—			1		—			—			1

Total expenses		111			4			3,194		1,543			(819	)		4,033

Income (loss) before income taxes and equity in earnings of subsidiaries		(111	)		(4	)		201		396			(246	)		236
Provision for (benefit from) income taxes		(39	)		(1	)		90		45			—			95
Equity in earnings (loss) of subsidiaries		213			216			105		—			(534	)		—

Net income (loss)	$	141		$	213		$	216	$	351		$	(780	)	$	141


Comprehensive income	$	130		$	200		$	203	$	359		$	(762	)	$	130

Consolidating Condensed Balance Sheets

As of September 30, 2012


	Parent		Subsidiary Issuers		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	4	$	52	$	—		$	498		$	—		$	554
Receivables, net		—		—		183			457			—			640
Deferred income taxes		8		65		129			3			—			205
Other current assets		6		110		65			346			—			527

Total current assets		18		227		377			1,304			—			1,926


Property and equipment, net		—		81		273			145			—			499
Deferred income taxes		22		1,024		223			—			(4	)		1,265
Goodwill		—		—		74			274			—			348
Other intangibles, net		—		43		341			324			—			708
Other non-current assets		112		65		7			65			—			249
Intercompany receivables (payables)		246		957		(468	)		(735	)		—			—
Investment in subsidiaries		661		1,925		3,284			—			(5,870	)		—

Total assets exclusive of assets under vehicle programs		1,059		4,322		4,111			1,377			(5,874	)		4,995


Assets under vehicle programs:
Program cash		—		—		—			101			—			101
Vehicles, net		—		5		14			10,324			—			10,343
Receivables from vehicle manufacturers and other		—		—		—			575			—			575
Investment in Avis Budget Rental Car Funding (AESOP) LLC-related party		—		—		—			362			—			362

		—		5		14			11,362			—			11,381

Total assets	$	1,059	$	4,327	$	4,125		$	12,739		$	(5,874	)	$	16,376


Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and other current liabilities	$	18	$	789	$	43		$	726		$	—		$	1,576
Short-term debt and current portion of long-term debt		—		46		3			32			—			81

Total current liabilities		18		835		46			758			—			1,657

Long-term debt		144		2,733		8			1			—			2,886
Other non-current liabilities		106		97		268			376			(4	)		843

Total liabilities exclusive of liabilities under vehicle programs		268		3,665		322			1,135			(4	)		5,386


Liabilities under vehicle programs:
Debt		—		—		—			2,062			—			2,062
Due to Avis Budget Rental Car Funding (AESOP) LLC-related party		—		—		—			5,813			—			5,813
Deferred income taxes		—		—		1,878			139			—			2,017
Other		—		1		—			306			—			307

		—		1		1,878			8,320			—			10,199

Total stockholders’ equity		791		661		1,925			3,284			(5,870	)		791

Total liabilities and stockholders’ equity	$	1,059	$	4,327	$	4,125		$	12,739		$	(5,874	)	$	16,376

As of December 31, 2011


	Parent		Subsidiary Issuers		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	2	$	234	$	1		$	297		$	—		$	534
Receivables, net		—		61		140			306			—			507
Deferred income taxes		8		—		129			3			(20	)		120
Other current assets		7		63		76			251			(17	)		380

Total current assets		17		358		346			857			(37	)		1,541


Property and equipment, net		—		70		295			128			—			493
Deferred income taxes		36		177		229			2			—			444
Goodwill		—		—		74			279			—			353
Other intangibles, net		—		44		342			327			—			713
Other non-current assets		124		92		5			83			—			304
Intercompany receivables (payables)		348		1,158		(1,071	)		(435	)		—			—
Investment in subsidiaries		376		1,769		3,192			—			(5,337	)		—

Total assets exclusive of assets under vehicle programs		901		3,668		3,412			1,241			(5,374	)		3,848


Assets under vehicle programs:
Program cash		—		—		—			11			—			11
Vehicles, net		—		6		4			8,346			—			8,356
Receivables from vehicle manufacturers and other		—		—		—			380			—			380
Investment in Avis Budget Rental Car Funding (AESOP) LLC-related party		—		—		—			343			—			343

		—		6		4			9,080			—			9,090

Total assets	$	901	$	3,674	$	3,416		$	10,321		$	(5,374	)	$	12,938


Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and other current liabilities	$	32	$	284	$	531		$	620		$	(34	)	$	1,433
Short-term debt and current portion of long-term debt		—		8		2			27			—			37

Total current liabilities		32		292		533			647			(34	)		1,470

Long-term debt		345		2,814		9			—			—			3,168
Other non-current liabilities		112		211		262			375			—			960

Total liabilities exclusive of liabilities under vehicle programs		489		3,317		804			1,022			(34	)		5,598


Liabilities under vehicle programs:
Debt		—		3		—			987			—			990
Due to Avis Budget Rental Car Funding (AESOP) LLC-related party		—		—		—			4,574			—			4,574
Deferred income taxes		—		—		843			139			—			982
Other		—		—		—			382			—			382

		—		3		843			6,082			—			6,928

Total stockholders’ equity		412		354		1,769			3,217			(5,340	)		412

Total liabilities and stockholders’ equity	$	901	$	3,674	$	3,416		$	10,321		$	(5,374	)	$	12,938

Consolidating Condensed Statements of Cash Flows

Nine Months Ended September 30, 2012


	Parent			Subsidiary Issuers			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Total
Net cash provided by (used in) operating activities	$	(48	)	$	128		$	42		$	1,402		$	—	$	1,524


Investing activities
Property and equipment additions		—			(19	)		(26	)		(37	)		—		(82	)
Proceeds received on asset sales		—			5			3			8			—		16
Other, net		4			(3	)		(1	)		(30	)		—		(30	)

Net cash provided by (used in) investing activities exclusive of vehicle programs		4			(17	)		(24	)		(59	)		—		(96	)


Vehicle programs:
Increase in program cash		—			—			—			(90	)		—		(90	)
Investment in vehicles		—			(2	)		(19	)		(8,941	)		—		(8,962	)
Proceeds received on disposition of vehicles		—			4			2			6,130			—		6,136

		—			2			(17	)		(2,901	)		—		(2,916	)

Net cash provided by (used in) investing activities		4			(15	)		(41	)		(2,960	)		—		(3,012	)


Financing activities
Proceeds from long-term borrowings		—			654			—			—			—		654
Principal payments on long-term borrowings		(201	)		(704	)		(2	)		—			—		(907	)
Net change in short-term borrowings		—			—			—			1			—		1
Purchase of warrants		(26	)		—			—			—			—		(26	)
Proceeds from sale of call options		38			—			—			—			—		38
Net intercompany transactions		234			(234	)		—			—			—		—
Debt financing fees		—			(11	)		—			—			—		(11	)
Other, net		1			—			—			—			—		1

Net cash provided by (used in) financing activities exclusive of vehicle programs		46			(295	)		(2	)		1			—		(250	)


Vehicle programs:
Proceeds from borrowings		—			—			—			9,238			—		9,238
Principal payments on borrowings		—			—			—			(7,467	)		—		(7,467	)
Debt financing fees		—			—			—			(18	)		—		(18	)

		—			—			—			1,753			—		1,753

Net cash provided by (used in) financing activities		46			(295	)		(2	)		1,754			—		1,503

Effect of changes in exchange rates on cash and cash equivalents		—			—			—			5			—		5

Net increase (decrease) in cash and cash equivalents		2			(182	)		(1	)		201			—		20
Cash and cash equivalents, beginning of period		2			234			1			297			—		534

Cash and cash equivalents, end of period	$	4		$	52		$	—		$	498		$	—	$	554

Nine Months Ended September 30, 2011


	Parent			Subsidiary Issuers			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net cash provided by (used in) operating activities	$	(11	)	$	183		$	(256	)	$	874		$	482		$	1,272


Investing activities
Property and equipment additions		—			(9	)		(16	)		(5	)		—			(30	)
Proceeds received on asset sales		—			6			2			1			—			9
Acquisition-related restricted cash		(401	)		—			—			—			—			(401	)
Other, net		(7	)		(3	)		—			(1	)		—			(11	)

Net cash used in investing activities exclusive of vehicle programs		(408	)		(6	)		(14	)		(5	)		—			(433	)


Vehicle programs:
Decrease (increase) in program cash		—			—			—			(19	)		—			(19	)
Investment in vehicles		—			(12	)		(3	)		(6,686	)		—			(6,701	)
Proceeds received on disposition of vehicles		—			9			8			4,362			—			4,379
Investment in debt securities of AESOP-related party		(400	)		—			—			—			—			(400	)
Proceeds from debt securities of AESOP-related party		400			—			—			—			—			400

		—			(3	)		5			(2,343	)		—			(2,341	)

Net cash used in investing activities		(408	)		(9	)		(9	)		(2,348	)		—			(2,774	)


Financing activities
Principal payments on borrowings		—			(3	)		(3	)		—			—			(6	)
Net intercompany transactions		177			38			268			(1	)		(482	)		—
Debt financing fees		(14	)		(19	)		—			—			—			(33	)
Other, net		1			—			—			—			—			1

Net cash provided by (used in) financing activities exclusive of vehicle programs		164			16			265			(1	)		(482	)		(38	)


Vehicle programs:
Proceeds from borrowings		—			—			—			8,235			—			8,235
Principal payments on borrowings		—			—			—			(6,568	)		—			(6,568	)
Debt financing fees		—			(15	)		(1	)		(4	)		—			(20	)

		—			(15	)		(1	)		1,663			—			1,647

Net cash provided by (used in) financing activities		164			1			264			1,662			(482	)		1,609

Effect of changes in exchange rates on cash and cash equivalents		—			—			—			(16	)		—			(16	)

Net increase (decrease) in cash and cash equivalents		(255	)		175			(1	)		172			—			91
Cash and cash equivalents, beginning of period		257			513			3			138			—			911

Cash and cash equivalents, end of period	$	2		$	688		$	2		$	310		$	—		$	1,002