Avis Budget Group Inc. (CAR) filed Quarterly Report for the period ended 2009-06-30.

Avis Budget Group Inc. is a leading provider of vehicle rental services with operations in more than seventy countries. Through its Avis and Budget brands the company is the largest general-use vehicle rental company in each of North America Australia New Zealand and certain other regions. Avis Budget Group is headquartered in Parsippany N.J. Avis is a leading supplier to the premium commercial and leisure segments of the travel industry and Budget is a leading supplier to price-conscious car rental segments. Avis Budget Group maintains the leading share of airport car rental revenue and we operate the second largest consumer truck rental business in the United States. The company generate significant benefits from operating two distinctive car rental brands targeting different market segments but share the same fleet maintenance facilities technology and administrative infrastructure Avis Budget Group Inc. has a market cap of $955.7 million; its shares were traded at around $9.39 with and P/S ratio of 0.2.

Highlight of Business Operations:

Total expenses decreased $238 million (15%) principally due to decreases of (i) $163 million (20%) in operating expenses largely resulting from the 21% decrease in car rental days and reduced staffing levels, (ii) $51 million (10%) in vehicle depreciation, vehicle interest and lease charges resulting from a 21% decline in our average car rental fleet and (iii) $40 million (23%) in selling, general and administrative expenses mainly related to reduced marketing and commission expenditures, most of which are volume-related. The decrease in total expenses includes a positive impact from foreign currency exchange rates of $29 million, including our foreign exchange earnings hedges, and also reflects numerous actions taken in late 2008 and the first half of 2009 to reduce non-volume-related expenses. These year-over-year expense decreases were partially offset by (i) an $8 million restructuring charge recorded in second quarter 2009, primarily for severance costs tied to recent headcount reductions, and (ii) a $5 million increase in interest expense on corporate debt related to the December 2008 amendments to our senior credit facilities.

The revenue decrease of $210 million was comprised of a $160 million (17%) decrease in T&M revenue and a $50 million (17%) decrease in ancillary revenues. The decrease in T&M revenue was principally the result of a 22% decrease in rental days, partially offset by a 7% year-over-year increase in T&M revenue per day. The $50 million decrease in ancillary revenues was also primarily due to the decline in rental days and reflected (i) a $30 million decrease in gasoline sales, which was more than offset in EBITDA by $40 million of decreased gasoline expense, (ii) a $13 million decrease in airport concession and vehicle licensing revenues, $8 million of which was offset in EBITDA by lower airport concessions and vehicle licensing expense remitted to airport and other regulatory authorities, and (iii) a $7 million decrease in GPS rentals, counter sales of insurance and other items (although revenues per transaction increased year-over-year).

We continued to reduce costs during the second quarter in response to the decline in demand. EBITDA reflected a $125 million (19%) decrease in operating expenses including (i) a $64 million decrease in expenses associated with car rental volume and fleet size, primarily related to agency operator commissions, shuttling expenses, credit card fees and other items, (ii) a $34 million decrease in selling, general and administration expenses related to decreases in marketing and commission expenditures, most of which are volume-related, and other items due primarily to management’s actions to reduce expenditures, and (iii) a $25 million decrease in employee costs, rents and other expenses related primarily to reduced domestic staffing levels and the closure of unprofitable locations. EBITDA also reflected $33 million (9%) of decreased fleet depreciation and lease charges resulting from the 22% decrease in the average size of our domestic rental fleet, while per-unit fleet costs increased 17%. The decreases in expenses were slightly offset by $6 million of restructuring charges recorded in second quarter 2009 related to the Company’s previously announced cost reduction initiatives.

The revenue decrease of $47 million was comprised of a $33 million (21%) decrease in car rental T&M revenue and a $14 million (19%) decrease in ancillary revenues. The total decline in revenue includes a $34 million decrease related to foreign currency exchange rates, impacting T&M revenue by $23 million and ancillary revenues by $11 million, and was largely offset in EBITDA by the opposite impact on expenses of $29 million. The decrease in T&M revenue was principally driven by a 12% decrease in T&M revenue per day, all of which is due to movements in foreign currency exchange rates, and a 10% decrease in rental days. The $14 million decrease in ancillary revenues was primarily due to the impact of foreign currency exchange rates, as well as the decline in rental days, and reflected (i) a $7 million decrease in counter sales of insurance, GPS

EBITDA reflected a $23 million (20%) decrease in operating expenses including (i) a $12 million decrease in costs associated with decreased rental volume and fleet size primarily related to agency operator commissions, credit card fees, maintenance and damage, vehicle licensing and other costs, (ii) a $6 million decrease in salaries and wages, rents and other costs related primarily to reduced staffing levels and (iii) a $4 million decrease in selling, general and administrative expenses related primarily to decreased marketing and commission expenditures and other expenses. EBITDA also benefited from $10 million (18%) of decreased fleet depreciation and lease charges, reflecting a 10% decrease in the average size of our international rental fleet and a 9% decrease in per-unit fleet costs. The decreases in expenses were slightly offset by $1 million of restructuring charges recorded in second quarter 2009 related to the Company’s previously announced cost reduction initiatives.

Total expenses decreased $437 million (14%) principally due to decreases of (i) $300 million (19%) in operating expenses largely resulting from the 19% decrease in car rental days and reduced staffing levels, (ii) $77 million (22%) in selling, general and administrative expenses mainly related to reduced marketing and commission expenditures, most of which are volume-related, (iii) $76 million (9%) in vehicle depreciation and lease charges resulting from an 18% decline in our average car rental fleet and (iv) $19 million (12%) in vehicle interest resulting from the decline in our average car rental fleet. The decrease in total expenses includes a positive impact from foreign currency exchange rates of $74 million including our foreign exchange earnings hedges and also reflects numerous actions taken in late 2008 and the first half of 2009 to reduce non-volume-related expenses. These year-over-year decreases were partially offset by (i) a $16 million increase in interest expense on corporate debt related to the December 2008 amendments to our senior credit facilities, (ii) $13 million in restructuring costs, primarily for severance costs tied to recent headcount reductions, and (iii) a $6 million increase in non-vehicle related depreciation and amortization expense. As a result of these items, partially offset by a $20 million increase in our benefit from income taxes, we incurred a net loss of $55 million for the six months ended June 30, 2009 compared to $4 million of net income during the same period in 2008.

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