AVIS BUDGET GROUP, INC.

Previous wording

We operate three of the most globally recognized brands in mobility solutions, Avis, Budget and Zipcar, together with several other brands well recognized in their respective markets. We are a leading vehicle rental operator in North America, Europe, Australasia and certain other regions we serve, with an average rental fleet of approximately 631,000 vehicles in first quarter 2025. We also license the use of our trademarks to licensees in the areas in which we do not operate directly. We and our licensees operate our brands in approximately 180 countries throughout the world.

Current wording

We operate three of the most globally recognized brands in mobility solutions, Avis, Budget and Zipcar, together with several other brands well recognized in their respective markets. We are a leading vehicle rental operator in North America, Europe, Australasia and certain other regions we serve, with an average rental fleet of approximately 699,000 vehicles in second quarter 2025. We also license the use of our trademarks to licensees in the areas in which we do not operate directly. We and our licensees operate our brands in approximately 180 countries throughout the world.

Previous wording

Our strategy continues to focus on transforming key parts of our business through technology, system enhancements and data, particularly with respect to customer experience, revenue generation and costs. Additionally, during the fourth quarter of our fiscal year ended December 31, 2024, we changed our fleet strategy with respect to United States and Canadian rental car vehicles, to accelerate certain fleet rotations in order to decrease the age of our fleet for competitive reasons. We believe our strategies will continue to strengthen our Company, maximize profitability, and deliver stakeholder value. During the three months ended March 31, 2025, we generated revenues of $2.4 billion, net loss of $504 million and Adjusted EBITDA loss of $93 million. These results were primarily driven by decreased volume, decreased revenue per day, and increased fleet costs.

Current wording

Our strategy continues to focus on transforming key parts of our business through technology, system enhancements and data, particularly with respect to customer experience, revenue generation and costs. Additionally, during the fourth quarter of our fiscal year ended December 31, 2024, we changed our fleet strategy with respect to United States and Canadian rental car vehicles, to accelerate certain fleet rotations in order to decrease the age of our fleet for competitive reasons. We believe our strategies will continue to strengthen our Company, maximize profitability, and deliver stakeholder value. During the three months ended June 30, 2025, we generated revenues of $3.0 billion, net income of $5 millionand Adjusted EBITDA of $277 million. These results were primarily driven by sustained volume and decreased fleet costs, offset by decreased revenue per day.

Previous wording

We continue to be susceptible to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations. The factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following: interest rates, inflationary impact on items such as commodity prices and wages, cost of new vehicles, used car values, increases in the number of personal injury claims and cost per incident, and an economic downturn that may impact travel demand, all of which may be exacerbated by ongoing military conflicts, including in Eastern Europe. Additionally, uncertainty remains with respect to tariffs and tax regulations, and this uncertainty has had and may continue to have impacts on our operations. We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition, and future results of operations.

Current wording

We continue to be susceptible to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations. The factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following: interest rates, inflationary impact on items such as commodity prices and wages, cost of new vehicles, used car values, increases in the number of personal injury claims and cost per incident, and an economic downturn that may impact travel demand, all of which may be exacerbated by ongoing military conflicts, including in the Middle East and Eastern Europe. Additionally, uncertainty remains with respect to tariffs and tax regulations, and this uncertainty has had and may continue to have impacts on our operations. We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition, and future results of operations.

Previous wording

We assess performance and allocate resources based upon the separate financial information of our operating segments. We aggregate certain of our operating segments into our reportable segments. In identifying our reportable segments, we also consider the management structure of the organization, the nature of services provided by our operating segments, the geographical areas and economic characteristics in which the segments operate, and other relevant factors. Management evaluates the operating results of each of our reportable segments based upon revenues and Adjusted EBITDA, which we define as income (loss) from continuing operations before non-vehicle related depreciation and amortization; long-lived asset impairment and other related charges; other fleet charges; restructuring and other related charges; early extinguishment of debt costs; non-vehicle related interest; transaction-related costs, net; legal matters, net, which includes amounts recorded in excess of $5 million, related primarily to unprecedented self-insurance reserves for allocated loss adjustment expense, class action lawsuits and personal injury matters; non-operational charges related to shareholder activist activity, which includes third-party advisory, legal and other professional fees; COVID-19 charges, net; cloud computing costs; other (income) expense, net; severe weather-related damages in excess of $5 million, net of insurance proceeds; and income taxes. We have revised our definition of Adjusted EBITDA to exclude other fleet charges. We did not revise prior years' Adjusted EBITDA amounts because there were no other charges similar in nature to these.

Current wording

We assess performance and allocate resources based upon the separate financial information of our operating segments. We aggregate certain of our operating segments into our reportable segments. In identifying our reportable segments, we also consider the management structure of the organization, the nature of services provided by our operating segments, the geographical areas and economic characteristics in which the segments operate, and other relevant factors. Management evaluates the operating results of each of our reportable segments based upon revenues and Adjusted EBITDA, which we define as income (loss) from continuing operations before non-vehicle related depreciation and amortization; long-lived asset impairment and other related charges; other fleet charges; restructuring and other related charges; early extinguishment of debt costs; non-vehicle related interest; transaction-related costs, net; legal matters, net, which primarily includes amounts recorded in excess of$5 million, related to unprecedented self-insurance reserves for allocated loss adjustment expense, class action lawsuits and personal injury matters; non-operational charges related to shareholder activist activity, which includes third-party advisory, legal and other professional fees; COVID-19 charges, net; cloud computing costs; other (income) expense, net; severe weather-related damages in excess of $5 million, net of insurance proceeds; and income taxes. In the first quarter of 2025, we revised our definition of Adjusted EBITDA to exclude other fleet charges. We did not revise prior years' Adjusted EBITDA amounts because there were no other charges similar in nature to these.

Previous wording

•Our revenues totaled $2.4 billion, a decrease of $121 million year-over-year, primarily due to decreased revenue per day and volume.

Current wording

•Our revenues totaled $5.5 billion, a decrease of $130 million year-over-year, primarily due to decreased revenue per day and volume.

Previous wording

•Our Adjusted EBITDA loss was $93 million, representing a decrease of $105 million year-over-year.

Current wording

•Our Adjusted EBITDA was $184 million, representing a decrease of $42 million year-over-year.

Previous wording

(d)Includes $1 million reported within selling, general and administrative expenses for the three months ended March 31, 2025. Includes $(5) million reported within operating expenses for the three months ended March 31, 2024.

Current wording

(c)Consists of $1 million reported within selling, general, and administrative expenses for the three months ended June 30, 2025 and $11 million and $12 million reported within operating expenses for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

Revenues decreased during the three months ended March 31, 2025 compared to the similar period in 2024, primarily due to a 3% decrease in volume, a $19 million negative impact from currency exchange rate movements, partially offset by a 1% increase in revenue per day, excluding exchange rate effects.

Current wording

Revenues decreased during the three months ended June 30, 2025 compared to the similar period in 2024, primarily due to a 2% decrease in revenue per day, excluding exchange rate effects, and a $1 million negative impact from currency exchange rate movements, offset by a 1% increase in volume.

Previous wording

Operating expenses increased to 52.5% of revenue during the three months ended March 31, 2025 compared to 51.9% during the similar period in 2024, primarily due to an increase in revenue per day, excluding exchange rate effects, and sustained costs. Vehicle depreciation and lease charges decreased to 25.3% of revenue during the three months ended March 31, 2025 compared to 26.7% during the similar period in 2024, primarily due to decreased per unit fleet costs, excluding exchange rate effects, driven by decreased fleet levels, partially offset by a decrease in the gain on sale of vehicles. Selling, general and administrative costs were approximately 16.7% of revenue during the three months ended March 31, 2025 compared to 17.7% during the similar period in 2024, primarily due to a decrease in marketing costs and commissions. Vehicle interest costs were 6.3% of revenue during the three months ended March 31, 2025 compared to 6.5% during the similar period in 2024.

Current wording

Operating expenses decreased to 46.7% of revenue during the three months ended June 30, 2025 compared to 48.0% during the similar period in 2024, primarily due to an increase in revenue per day, excluding exchange rate effects, offset by sustained costs. Vehicle depreciation and lease charges decreased to 21.4% of revenue during the three months ended June 30, 2025 compared to 25.2% during the similar period in 2024, primarily due to decreased per-unit fleet costs, excluding exchange rate effects, driven by decreased fleet levels, partially offset by a decrease in the gain on sale of vehicles. Selling, general and administrative costs decreased to 15.5% of revenue during the three months ended June 30, 2025 compared to 15.8% during the similar period in 2024 primarily due to decreased commissions, partially offset by an increase in marketing costs and other selling, general and administrative costs. Vehicle interest costs decreased to 4.9% of revenue during the three months ended June 30, 2025 compared to 5.5% during the similar period in 2024, primarily due to decreased fleet levels and interest rates.

Previous wording

Revenues decreased $121 million or 5% during the three months ended March 31, 2025 compared to the similar period in 2024, primarily due to a 2% decrease in revenue per day, excluding exchange rate effects, a $23 million negative impact from currency exchange rate movements, and a 1% decrease in volume. Total expenses increased 15% during the three months ended March 31, 2025, compared to the similar period in 2024, primarily due to increased fleet costs. Our effective tax rates were a benefit of 25.6% and 20.4% for the three months ended March 31, 2025 and 2024, respectively. As a result of these items, our net loss attributable to Avis Budget Group, Inc. decreased by $391 million compared to the similar period in 2024. For the three months ended March 31, 2025 and 2024, we reported diluted loss per share of $(14.35) and $(3.21), respectively.

Current wording

Revenues decreased $130 million or 2% during the six months ended June 30, 2025 compared to the similar period in 2024, primarily due to a 2% decrease in revenue per day, excluding exchange rate effects and a 1% decrease in volume, partially offset by a $1 million positive impact from currency exchange rate movements. Total expenses increased 7% during the six months ended June 30, 2025, compared to the similar period in 2024, primarily due to fleet costs. Our effective tax rates were a benefit of 24.6% and 14.8% for the six months ended June 30, 2025 and 2024, respectively. As a result of these items, our net loss attributable to Avis Budget Group, Inc. resulted in an additional loss of $401 million compared to the similar period in 2024. For the six months ended June 30, 2025 and 2024, we reported diluted loss per share of $14.24 and $2.80, respectively.

Previous wording

Operating expenses increased to 55.8% of revenue during the three months ended March 31, 2025 compared to 52.5% during the similar period in 2024, primarily due to a decrease in revenue per day, excluding exchange rate effects, and sustained costs. Vehicle depreciation and lease charges increased to 48.4% of revenue during the three months ended March 31, 2025 compared to 24.4% during the similar period in 2024, primarily due to other fleet charges, increased per unit fleet costs, excluding exchange rate effects, driven by decreased fleet levels, increased depreciation rates, and partially offset by an increase in the gain on sale of vehicles. Selling, general and administrative costs were approximately 10.5% of revenue during the three months ended March 31, 2025 compared to 10.4% during the similar period in 2024. Vehicle interest costs decreased to 9.3% of revenue during the three months ended March 31, 2025 compared to 10.2% during the similar period in 2024, primarily due to decreased fleet levels and lower interest rates.

Current wording

Operating expenses increased to 52.6% of revenue during the six months ended June 30, 2025 compared to 51.4% during the similar period in 2024, primarily due to a decrease in revenue per day, excluding exchange rate effects, and sustained costs. Vehicle depreciation and lease charges increased to 30.9% of revenue during the six months ended June 30, 2025 compared to 24.4% during the similar period in 2024, primarily due to other fleet charges related to the accelerated disposal of certain fleet in our Americas reportable segment. Selling, general and administrative costs increased to 12.9% of revenue during the six months ended June 30, 2025, compared to 12.0% during the similar period in 2024, primarily due toincreased commissions and marketing costs. Vehicle interest costs decreased to 8.0% of revenue during the six months ended June 30, 2025 compared to 8.6% during the similar period in 2024, primarily due to decreased fleet levels and interest rates.

Previous wording

Following is a more detailed discussion of the results of each of our reportable segments, corporate and other, and reconciliation of net loss to Adjusted EBITDA:

Current wording

Following is a more detailed discussion of the results of each of our reportable segments and corporate and other, together with a reconciliation of net loss to Adjusted EBITDA:

Previous wording

(b)Costs reported within vehicle depreciation and lease charges, net related to the accelerated disposal of certain fleet in our Americas reportable segment. These costs relate to vehicles that were not included in the long-lived asset impairment and other related charges recorded in the year ended December 31, 2024.

Current wording

(b)Costs reported within vehicle depreciation and lease charges, net related to the accelerated disposal of certain fleet in our Americas reportable segment. These costs relate to vehicles that were not included in the long-lived asset impairment and other related charges recorded in 2024.

Previous wording

Revenues decreased during the three months ended March 31, 2025 compared to the similar period in 2024, primarily due to a 3% decrease in revenue per day, a $4 million negative impact from currency exchange rate movements and a 1% decrease in volume.

Current wording

Revenues decreased during the six months ended June 30, 2025 compared to the similar period in 2024, primarily due to a 3% decrease in revenue per day and a $5 million negative impact from currency exchange rate movements, partially offset by sustained volume.

Previous wording

Operating expenses increased to 55.7% of revenue during the three months ended March 31, 2025 compared to 52.7% during the similar period in 2024, primarily due to a decrease in revenue per day, excluding exchange rate effects, and sustained costs. Vehicle depreciation and lease charges increased to 43.4% of revenue during the three months ended March 31, 2025 compared to 24.9% during the similar period in 2024, primarily due to other fleet charges, increased per unit fleet costs, excluding exchange rate effects, driven by decreased fleet levels, increased depreciation rates, and partially offset by an increase in the gain on sale of vehicles. Selling, general and administrative costs were 12.7% of revenue during the three months ended March 31, 2025, which is consistent with the similar period in 2024. Vehicle interest costs decreased to 8.6% of revenue during the three months ended March 31, 2025 compared to 9.4% during the similar period in 2024, primarily due to decreased fleet levels and lower interest rates.

Current wording

Operating expenses increased to 52.9% of revenue during the six months ended June 30, 2025 compared to 51.4% during the similar period in 2024, primarily due to a decrease in revenue per day, excluding exchange rate effects, and sustained costs. Vehicle depreciation and lease charges increased to 33.2% of revenue during the six months ended June 30, 2025 compared to 24.0% during the similar period in 2024, primarily due to other fleet charges related to the accelerated disposal of certain fleet. Selling, general and administrative costs were approximately 10.9% of revenue during the six months ended June 30, 2025 compared to 9.8% during the similar period in 2024, primarily due to increased commissions and marketing costs. Vehicle interest costs decreased to 8.8% of revenue during the six months ended June 30, 2025 compared to 9.4% during the similar period in 2024, primarily due to decreased fleet levels and interest rates.

Previous wording

Adjusted EBITDA decreased during the three months ended March 31, 2025 compared to the similar period in 2024, primarily due to higher per-unit fleet costs.

Current wording

Adjusted EBITDA decreased during the six months ended June 30, 2025 compared to the similar period in 2024, primarily due to decreased revenue per day and other fleet charges related to the accelerated disposal of certain fleet, partially offset by approximately $1 million positive impact from currency exchange rate movements.

Previous wording

The increase in total liabilities exclusive of liabilities under vehicle programs is primarily due to the increase in corporate indebtedness from the issuance of a floating rate term loan due December 2025. See “Liquidity and Capital Resources,” and Note 10 – Long-term Corporate Debt and Borrowing Arrangements to our Condensed Consolidated Financial Statements. The decrease in liabilities under vehicle programs is primarily due to the repayment of debt. The decrease in total stockholders’ equity is primarily due to the increase in our net loss.

Current wording

The increase in total liabilities exclusive of liabilities under vehicle programs is primarily due to the increase in corporate indebtedness from the issuance of Senior Notes due June 2032. See “Liquidity and Capital Resources,” and Note 10 – Long-term Corporate Debt and Borrowing Arrangements to our Condensed Consolidated Financial Statements. The increases in both assets under vehicle programs and liabilities under vehicle programs is primarily due to the increase in the cost of our rental fleet. The decrease in total stockholders’ equity is primarily due to our net loss.

Previous wording

In February 2025, we borrowed $500 million under a floating rate term loan due December 2025, which is part of our senior revolving credit facilities. The proceeds were primarily used to pay down fleet indebtedness.

Current wording

In February 2025, we borrowed $500 million under a floating rate term loan due December 2025, which is part of our senior revolving credit facilities. The proceeds were primarily used to pay down fleet indebtedness. In June 2025, we fully repaid our outstanding borrowings under the floating rate term loan due 2025.

Previous wording

During 2025, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued approximately $358 million of asset-backed notes with expected final payment dates ranging from August 2027 to February 2029 and a weighted average interest rate of 8.01%. The proceeds from these borrowings were used to fund the repayment of maturing vehicle-backed debt and the acquisition of rental cars in the United States.

Current wording

During 2025, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued approximately $1,008 million of asset-backed notes with expected final payment dates ranging from August 2027 to August 2030 and a weighted average interest rate of 5.95%. The proceeds from these borrowings were used to fund the repayment of maturing vehicle-backed debt and the acquisition of rental cars in the United States.

Previous wording

Our Board of Directors has authorized the repurchase of up to approximately $8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded most recently in February 2023 (the “Stock Repurchase Program”). Our stock repurchases may occur through open market purchases, privately negotiated transactions or trading plans pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements, restricted payment capacity under our debt instruments and other factors. The Stock Repurchase Program may be suspended, modified or discontinued at any time without prior notice. The Stock Repurchase Program has no set expiration or termination date. During the three months ended March 31, 2025, we did not repurchase shares of common stock under the Stock Repurchase Program. As of March 31, 2025, approximately $757 million of authorization remained available to repurchase common stock under the Stock Repurchase Program.

Current wording

Our Board of Directors has authorized the repurchase of up to approximately $8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded most recently in February 2023 (the “Stock Repurchase Program”). Our stock repurchases may occur through open market purchases, privately negotiated transactions or trading plans pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements, restricted payment capacity under our debt instruments and other factors. The Stock Repurchase Program may be suspended, modified or discontinued at any time without prior notice. The Stock Repurchase Program has no set expiration or termination date. During the six months ended June 30, 2025, we did not repurchase shares of common stock under the Stock Repurchase Program. As of June 30, 2025, approximately $757 million of authorization remained available to repurchase common stock under the Stock Repurchase Program.

Previous wording

Cash provided by operating activities during the three months ended March 31, 2025 is consistent with the similar period in 2024.

Current wording

Cash provided by operating activities during the six months ended June 30, 2025 is consistent with the similar period in 2024.

Previous wording

The decrease in cash used in investing activities during the three months ended March 31, 2025 compared with the similar period in 2024 is primarily due to the decrease in our net investment in vehicles.

Current wording

Cash used in investing activities during the six months ended June 30, 2025 increased when compared with the similar period in 2024, primarily due to the increase in our investment in vehicles.

Previous wording

The decrease in cash provided by financing activities during the three months ended March 31, 2025 compared with the similar period in 2024 is primarily due to the increase in our net payments under vehicle programs.

Current wording

Cash provided by financing activities during the six months ended June 30, 2025 increased when compared with the similar period in 2024, primarily due to the increase in our borrowings under vehicle programs.

Previous wording

At March 31, 2025, we had approximately $23.1 billion of indebtedness, including corporate indebtedness of approximately $5.9 billion and debt under vehicle programs of approximately $17.2 billion. For information regarding our debt and borrowing arrangements, see Note 1 – Basis of Presentation, Note 10 – Long-term Corporate Debt and Borrowing Arrangements and Note 11 – Debt Under Vehicle Programs and Borrowing Arrangements to our Condensed Consolidated Financial Statements.

Current wording

As of June 30, 2025, we had approximately $26.0 billion of indebtedness, including corporate indebtedness of approximately $6.1 billion and debt under vehicle programs of approximately $19.9 billion. For information regarding our debt and borrowing arrangements, see Note 1 – Basis of Presentation, Note 10 – Long-term Corporate Debt and Borrowing Arrangements and Note 11 – Debt Under Vehicle Programs and Borrowing Arrangements to our Condensed Consolidated Financial Statements.

Previous wording

As of March 31, 2025, we had $516 million of available cash and cash equivalents and access to $559 million of available borrowing capacity under our revolving credit facility and approximately $57 million under our uncommitted facilities, providing us with access to approximately $1.1 billion of total liquidity.

Current wording

As of June 30, 2025, we had $541 million of available cash and cash equivalents and access to $403 million of available borrowing capacity under our revolving credit facility, providing us with access to approximately $944 million of total liquidity.

Previous wording

Our future contractual obligations have not changed significantly from the amounts reported within our 2024 Form 10-K with the exception of our commitment to purchase vehicles, which increased by approximately $1.2 billion from December 31, 2024, to approximately $7.5 billion as of March 31, 2025 due to new model year vehicle purchases. Changes to our obligations related to corporate indebtedness and debt under vehicle programs are presented above within the section titled “Liquidity and Capital Resources—Debt and Financing Arrangements” and also within Note 10 – Long-term Corporate Debt and Borrowing Arrangements and Note 11 – Debt Under Vehicle Programs and Borrowing Arrangements to our Condensed Consolidated Financial Statements.

Current wording

Our future contractual obligations have not changed significantly from the amounts reported within our 2024 Form 10-K with the exception of our commitment to purchase vehicles, which decreased by approximately $4.0 billion from December 31, 2024, to approximately $2.3 billion as of June 30, 2025 due to existing fleet levels. Changes to our obligations related to corporate indebtedness and debt under vehicle programs are presented above within the section titled “Liquidity and Capital Resources—Debt and Financing Arrangements” and also within Note 10 – Long-term Corporate Debt and Borrowing Arrangements and Note 11 – Debt Under Vehicle Programs and Borrowing Arrangements to our Condensed Consolidated Financial Statements.