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 695,000 vehicles in 2024. 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 684,000 vehicles in 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

In 2024, we saw sustained volume, decreased revenue per day, and increased fleet and interest costs. This resulted in revenues of approximately $11.8 billion, a net loss of $1.8 billion and Adjusted EBITDA of $628 million for the year ended December 31, 2024. During the fourth quarter of 2024, we changed our fleet strategy to accelerate certain fleet rotations in order to decrease the age of our fleet for competitive reasons, and accordingly, we shortened the useful life associated with such vehicles. Our net loss reflects $2.5 billion in long-lived asset impairment and other related charges, approximately $2.3 billion of which was recorded to reduce the carrying value of our rental fleet to its fair value in connection with this change. See Note 2 – Summary of Significant Accounting Policies – Impairment of Long-lived Assets to our Consolidated Financial Statements.

Current wording

In 2025, we saw sustained volume, decreased revenue per day and lower per-unit fleet costs, excluding other fleet charges related to the disposal of certain fleet in our Americas reportable segment. This resulted in revenues of approximately $11.7 billion, net loss of $995 million and Adjusted EBITDA of $748 million for the year ended December 31, 2025. During the fourth quarter of 2025, in conjunction with the Interpace Ventures transaction, we reviewed our fleet strategy, specific to certain United States EV rental car vehicles, and as a result shortened the useful life associated with such vehicles. Our net loss reflects $518 million in long-lived asset impairment and other related charges, which was recorded to reduce the carrying value of certain United States EV rental car vehicles to its fair value in connection with this change. See Note 2 – Summary of Significant Accounting Policies – Impairment of Long-Lived Assets to our Consolidated Financial Statements.

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 global stock markets and foreign exchange rates. 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. Our strategy continues to primarily focus on customer experience and costs to strengthen our Company, maximize profitability, and deliver stakeholder value.

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, government shutdowns, manufacturer recalls, 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; 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.

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

We have revised our definition of Adjusted EBITDA to exclude severe weather-related damages in excess of $5 million, net of insurance proceeds. We did not revise prior years' Adjusted EBITDA amounts because there were no other charges similar in nature to these. We believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our operating businesses and in comparing our results from period to period. We also believe that Adjusted EBITDA is useful to investors because it allows them to assess our results of operations and financial condition on the same basis that management uses internally. Adjusted EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with U.S. GAAP. Our presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.

Current wording

We believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our operating businesses and in comparing our results from period to period. We also believe that Adjusted EBITDA is useful to investors because it allows them to assess our results of operations and financial condition on the same basis that management uses internally. Adjusted EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with U.S. GAAP. Our presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.

Previous wording

Revenues decreased $219 million or 2% for the year ended December 31, 2024 compared to the similar period in 2023, primarily due to a 3% decrease in revenue per day, excluding exchange rate effects and a $9 million negative impact from currency exchange rate movements, partially offset by a 1% increase in volume. Total expenses increased 43% for the year ended December 31, 2024, compared to the similar period in 2023, primarily due to long-lived asset impairment and other related charges, higher per-unit fleet costs and higher interest costs. See Note 2 – Summary of Significant Accounting Policies – Impairment of Long Lived Assets to our Consolidated Financial Statements. Our effective tax rates for the years ended December 31, 2024 and 2023 were a benefit of 30.8% and a provision of 14.6%, respectively. As a result of these items, our net income decreased by $3.5 billion compared to the similar period in 2023. For the years ended December 31, 2024 and 2023, we reported diluted earnings (loss) per share of $(51.23) and $42.08, respectively.

Current wording

Revenues decreased $137 million or 1% for the year ended December 31, 2025, compared to the similar period in 2024, primarily due to a 1% decrease in revenue per day, excluding exchange rate effects and sustained volume, partially offset by a $71 million positive impact from currency exchange rate movements. Total expenses decreased 13% for the year ended December 31, 2025, compared to the similar period in 2024, primarily due to the long-lived asset impairment and other related charges recorded in 2024. See Note 2 – Summary of Significant Accounting Policies – Impairment of Long-Lived Assets to our Consolidated Financial Statements. Our effective tax rates for the years ended December 31, 2025 and 2024 were a provision of 7.1% and a benefit of 30.8%, respectively. As a result of these items, our net loss attributable to Avis Budget Group, Inc. decreased by$932 million compared to the similar period in 2024. For the years ended December 31, 2025 and 2024, we reported diluted loss per share of $25.25 and $51.23, respectively.

Previous wording

Following is a more detailed discussion of the results of each of our reportable segments, corporate and other, and reconciliation of net income 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)Includes an impairment charge of approximately $2.3 billion related to the acceleration of the rotation of our fleet and a charge of $180 million related to the write-down of the carrying value of certain vehicles held for sale within our Americas reportable segment. See Note 2 – Summary of Significant Accounting Policies – Impairment of Long-Lived Assets to our Consolidated Financial Statements.

Current wording

(b)For the year ended December 31, 2025, includes an impairment charge of approximately $518 million within our Americas reportable segment, related to the acceleration of the rotation of certain United States EV rental car vehicles in conjunction with the Interpace Ventures transaction. For the year ended December 31, 2024, includes an impairment charge of approximately $2.3 billion related to the acceleration of the rotation of our fleet and a charge of $180 million related to the write-down of the carrying value of certain vehicles held for sale within our Americas reportable segment. See Note 2 – Summary of Significant Accounting Policies – Impairment of Long-Lived Assets to our Consolidated Financial Statements.

Previous wording

(c)Primarily consists of gains or losses related to our equity method investment in a former subsidiary, offset by fleet related and certain administrative services provided to the same former subsidiary.

Current wording

(d)Primarily consists of gains or losses related to our equity method investment in a former subsidiary, offset by fleet related and certain administrative services provided to the same former subsidiary.

Previous wording

(d)Includes $4 million reported within selling, general and administrative expenses for the year ended December 31, 2024 and $60 million and $5 million reported within operating expenses in the years ended December 31, 2024 and 2023, respectively. The $60 million recorded within operating expenses for the year ended December 31, 2024 includes $46 million relating to our self-insurance reserves for allocated loss adjustment expense.

Current wording

(e)Consists of $3 million and $4 million reported within selling, general and administrative expenses for the years ended December 31, 2025 and 2024, respectively, and $102 million of income and $60 million reported within operating expenses for the years ended December 31, 2025 and 2024, respectively. The $60 million recorded within operating expenses for the year ended December 31, 2024 includes $46 million relating to our self-insurance reserves for allocated loss adjustment expense.

Previous wording

Revenues decreased for the year ended December 31, 2024 compared to the similar period in 2023, primarily due to a 3% decrease in revenue per day, excluding exchange rate effects and a $8 million negative impact from currency exchange rate movements, partially offset by a 1% increase in volume.

Current wording

Revenues decreased for the year ended December 31, 2025, compared to the similar period in 2024, primarily due to a 3% decrease in revenue per day, excluding exchange rate effects and a $6 million negative impact from currency exchange rate movements, partially offset by a 1% increase in volume.

Previous wording

Revenues increased for the year ended December 31, 2024 compared to the similar period in 2023, primarily due to a 4% increase in volume, partially offset by a 3% decrease in revenue per day, excluding exchange rate effects and a $1 million negative impact from currency exchange rate movements.

Current wording

Revenues increased for the year ended December 31, 2025, compared to the similar period in 2024, primarily due to a 3% increase in revenue per day, excluding exchange rate effects and a $77 million positive impact from currency exchange rate movements, partially offset bya 3% decrease in volume.

Previous wording

Adjusted EBITDA increased for the year ended December 31, 2024 compared to the similar period in 2023, primarily due to decreased selling, general and administrative expenses, which are not attributable to a particular segment.

Current wording

Adjusted EBITDA decreased for the year ended December 31, 2025, compared to the similar period in 2024, primarily due to increased selling, general and administrative expenses, which are not attributable to a particular segment.

Previous wording

The increase in assets exclusive of assets under vehicle programs compared to 2023 is principally related to the increase in operating lease right-of-use assets. See Note 3 – Leases to our Consolidated Financial Statements.

Current wording

The increase in total assets exclusive of assets under vehicle programs compared to 2024 is primarily due to our deferred income taxes which reflect the enactment of the One Big Beautiful Bill Act and the increase in operating lease right-of-use assets. See Note 3 – Leases and Note 9 – Income Taxes to our Consolidated Financial Statements.

Previous wording

The increase in liabilities exclusive of liabilities under vehicle programs compared to 2023 is principally related to the increase in operating lease liabilities and corporate indebtedness from the issuance of senior notes. See “Liquidity and Capital Resources,” Note 3 – Leases and Note 13 – Long-term Corporate Debt and Borrowing Arrangements to our Consolidated Financial Statements.

Current wording

The increase in total liabilities exclusive of liabilities under vehicle programs compared to 2024 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 13 – Long-term Corporate Debt and Borrowing Arrangements to our Consolidated Financial Statements.

Previous wording

The decreases in assets and liabilities under vehicle programs are principally related to the decrease in the size and value of our vehicle rental fleet.

Current wording

The increases in both assets and liabilities under vehicle programs are primarily due to the increase in the cost of our rental fleet.

Previous wording

The decrease in stockholders’ equity compared to 2023 is principally related to our comprehensive loss.

Current wording

The decrease in total stockholders’ equity compared to 2024 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.

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

In September 2024, we issued $700 million of 8.250% Senior Notes due January 2030, at par, with interest payable semi-annually. In October 2024, we used net proceeds from the offering to repay the outstanding borrowings under our floating rate term loan due 2029, with the remainder being used to repay maturing vehicle-backed debt and for general corporate purposes.

Current wording

In May 2025, we issued $600 million of 8.375% Senior Notes due June 2032. Net proceeds were used to repay our floating rate term loan due 2025 and a portion of our 5.750% Senior Notes due July 2027, with the remaining proceeds being used to repay outstanding fleet debt and for general corporate purposes.

Previous wording

During 2024, our Avis Budget Rental Car Funding (AESOP) subsidiary issued approximately $2.8 billion of asset-backed notes with expected final payment dates ranging from February 2026 to December 2029, and a weighted average interest rate of 6.04%. Avis Budget Rental Car Funding (AESOP) has also amended and extended its asset-backed variable-funding financing facilities, most recently in December 2024. 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 approxi mately $1,708 millionof asset-backed notes with expected final payment dates ranging from August 2027 to February 2031 and a weighted average interest rate of 5.33%. Avis Budget Rental Car Funding (AESOP) LLC has also amended and extended its asset-backed variable funding financing facilities, most recently in December 2025. 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. For the year ended December 31, 2024, we repurchased approximately 0.6 million shares of common stock at a cost of approximately $45 million (excluding excise taxes due under the Inflation Reduction Act of 2022) under the Stock Repurchase Program. As of December 31, 2024, 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. For the year ended December 31, 2025, we did not repurchase shares of common stock under the Stock Repurchase Program. As of December 31, 2025, approximately $757 million of authorization remained available to repurchase common stock under the Stock Repurchase Program.

Previous wording

The decrease in cash used in investing activities during 2024 compared with 2023 is primarily due to the decrease in our net investment in vehicles.

Current wording

The increase in cash used in investing activities during 2025 compared with 2024 is primarily due to the increase in our investment in vehicles, partially offset by the increase in proceeds received on vehicle sales.

Previous wording

The decrease in cash provided by operating activities during 2024 compared with 2023 is primarily due to the decrease in our net income.

Current wording

The increase in cash provided by financing activities during 2025 compared with 2024 is primarily due to the increase in our net borrowings under vehicle programs.

Previous wording

We anticipate that our non-vehicle property and equipment additions will be approximately $225 million in 2025.

Current wording

We anticipate that our non-vehicle property and equipment additions will be approximately $250 million in 2026.

Previous wording

At December 31, 2024, we had approximately $22.9 billion of indebtedness (including corporate indebtedness of approximately $5.4 billion and debt under vehicle programs of approximately $17.5 billion). For information regarding our debt and borrowing arrangements, see Note 1 – Basis of Presentation, Note 13 – Long-term Corporate Debt and Borrowing Arrangements, and Note 14 – Debt Under Vehicle Programs and Borrowing Arrangements to our Consolidated Financial Statements.

Current wording

As of December 31, 2025, we had approximately $25.3 billion of indebtedness, including corporate indebtedness of approximately $6.1 billion and debt under vehicle programs of approximately $19.2 billion. For information regarding our debt and borrowing arrangements, see Note 1 – Basis of Presentation, Note 13 – Long-term Corporate Debt and Borrowing Arrangements, and Note 14 – Debt Under Vehicle Programs and Borrowing Arrangements to our Consolidated Financial Statements.

Previous wording

As of December 31, 2024, we had $534 million of available cash and cash equivalents and access to $503 million of available borrowing capacity under our revolving credit facility, providing us with access to approximately $1.0 billion of total liquidity. Including our uncommitted facilities, we had total liquidity of approximately $1.1 billion.

Current wording

As of December 31, 2025, we had $519 million of available cash and cash equivalents and access to $299 million of available borrowing capacity under our revolving credit facility, providing us with access to approximately $818 million of total liquidity.

Previous wording

Our goodwill and other indefinite-lived intangible assets are allocated among our reporting units. During 2024, we recorded $28 million in long-lived asset impairment and other related charges for impairment of one of our unamortized indefinite-lived intangible assets. During 2024, there was no impairment of goodwill. During 2023, there was no impairment of goodwill and other indefinite-lived intangible assets.

Current wording

Our goodwill and other indefinite-lived intangible assets are allocated among our reporting units. During 2025, there was no impairment of goodwill and other indefinite-lived intangible assets. During 2024, we recorded $28 million in long-lived asset impairment and other related charges for impairment of one of our unamortized indefinite-lived intangible assets. During 2024, there was no impairment of goodwill.

Previous wording

Vehicles. We present vehicles at cost, net of accumulated depreciation, on the Consolidated Balance Sheets. We record the initial cost of the vehicle, net of incentives and allowances from manufacturers. We acquire our rental vehicles either through repurchase and guaranteed depreciation programs with certain automobile manufacturers or outside of such programs. For rental vehicles purchased under such programs, we depreciate the vehicles such that the net book value on the date of sale or return to the manufacturers is intended to equal the contractual guaranteed residual values. For risk vehicles acquired outside of manufacturer repurchase and guaranteed depreciation programs, we depreciate based on the vehicles’ estimated residual market values at their expected dates of disposition. The estimation of residual values requires us to make assumptions regarding the age and mileage of the vehicle at the time of disposal, as well as expected used vehicle market conditions. We regularly evaluate estimated residual values and adjusts depreciation rates as appropriate. Differences between actual residual values and those estimated result in a gain or loss on disposal and are recorded as part of vehicle depreciation and lease charges, net, at the time of sale.

Current wording

Vehicles. We present vehicles at cost, net of accumulated depreciation, on the Consolidated Balance Sheets. We record the initial cost of the vehicle, net of incentives and allowances from manufacturers. We acquire our rental vehicles either through repurchase and guaranteed depreciation programs with certain automobile manufacturers or outside of such programs. For rental vehicles purchased under such programs, we depreciate the vehicles such that the net book value on the date of sale or return to the manufacturers is intended to equal the contractual guaranteed residual values. For risk vehicles acquired outside of manufacturer repurchase and guaranteed depreciation programs, we depreciate based on the vehicles’ estimated residual market values at their expected dates of disposition. The estimation of residual values requires us to make assumptions regarding the age and mileage of the vehicle at the time of disposal, as well as expected used vehicle market conditions. We regularly evaluate estimated residual values and adjust depreciation rates as appropriate. Differences between actual residual values and those estimated result in a gain or loss on disposal and are recorded as part of vehicle depreciation and lease charges, net, at the time of sale.

Previous wording

During 2024, we recorded $2.5 billion in long-lived asset impairment and other related charges related to vehicles, including an approximately $2.3 billion impairment charge related to the acceleration of rotation of our fleet and shortened useful life associated with such vehicles. During 2023, there was no long-lived asset impairment and other related charges. See Note 2 – Summary of Significant Accounting Policies and Note 8 – Vehicle Rental Activities to our Consolidated Financial Statements for more information regarding our vehicles. For a discussion of risk factors and assumptions relative to our vehicle valuations, refer to Item 1A, “Risk Factors”, included under Part 1 of this Annual Report on Form 10-K.

Current wording

During 2025, we recorded $518 million in long-lived asset impairment and other related charges related to the acceleration of the rotation of certain United States EV rental car vehicles and shortened useful life associated with such vehicles, in conjunction with the Interpace Ventures transaction. During 2024, we recorded $2.5 billion in long-lived asset impairment and other related charges related to vehicles, including an approximately $2.3 billion impairment charge related to the acceleration of rotation of our fleet and shortened useful life associated with such vehicles. See Note 2 – Summary of Significant Accounting Policies and Note 8 – Vehicle Rental Activities to our Consolidated Financial Statements for more information regarding our vehicles. For a discussion of risk factors and assumptions relative to our vehicle valuations, refer to Item 1A, “Risk Factors”, included under Part 1 of this Annual Report on Form 10-K.

Previous wording

Public Liability, Property Damage and Other Insurance Liabilities. Insurance liabilities on our Consolidated Balance Sheets include supplemental liability insurance, personal effects protection insurance, public liability, property damage and personal accident insurance claims for which we are self-insured. We estimate the required liability of such claims on an undiscounted basis utilizing an actuarial method that is based upon various assumptions which include, but are not limited to, our historical loss experience and projected loss development factors. The required liability is also subject to adjustment in the future based upon changes in claims experience, including changes in the number of incidents for which we are ultimately liable and changes in the cost per incident.

Current wording

Public Liability, Property Damage and Other Insurance Liabilities. Insurance liabilities on our Consolidated Balance Sheets include additional/supplemental liability insurance, personal effects protection insurance, public liability, property damage and personal accident insurance claims for which we are self-insured. We estimate the required liability of such claims on an undiscounted basis utilizing an actuarial method that is based upon various assumptions which include, but are not limited to, our historical loss experience and projected loss development factors. The required liability is also subject to adjustment in the future based upon changes in claims experience, including changes in the number of incidents for which we are ultimately liable and changes in the cost per incident.