-- Second quarter revenue totaled $1.3 billion.

-- Second quarter EBITDA was $67 million and pretax income was $6 million excluding restructuring costs.

-- Second quarter pretax loss was $2 million.

-- Continued to be in full compliance with the financial covenants under its senior credit facility.

-- Achieving targeted cost savings, which are now expected to be at a $400 million annual run-rate by year-end.

PARSIPPANY, N.J. -- (Marketwire) -- 08/04/09 -- Avis Budget Group, Inc. (NYSE: CAR) today announced results for its second quarter, which ended June 30, 2009. The Company had revenue of $1.3 billion, a decrease of 17% versus second quarter 2008, and a pretax loss of $2 million. Excluding restructuring costs, second quarter EBITDA was $67 million and pretax income was $6 million.

"While we continued to face sharply reduced demand for vehicle rentals in the second quarter, rental volumes did stabilize, and the actions we took to keep fleet levels in line with demand allowed us to achieve a stronger-than-expected 7% increase in domestic time and mileage revenue per day," said Ronald L. Nelson, Avis Budget Group Chairman and Chief Executive Officer.

"We also made significant progress in several other areas," added Mr. Nelson. "Our cost saving initiatives continued to deliver substantial benefits, as reflected in the 260-basis-point reduction in direct operating costs and 80-basis-point reduction in SG&A expense as a percentage of revenue for our car rental operations. Our ancillary revenues continued to benefit from our sales training initiative, increasing over 21% on a per day basis, and we continued to retain more than 99% of our commercial accounts. In addition, the used car market, and the performance of our used vehicles at auction, strengthened, and in July we became the first car rental company since 2007 to issue term asset-backed securities to finance our fleet."

Executive Summary

In the second quarter, our car rental revenues decreased 17% year-over-year, driven primarily by a 21% decrease in rental days. Time and mileage revenue per day increased 7% excluding the effects of foreign-exchange movements and increased 4% on a reported basis.

Our car rental fleet costs decreased 10% primarily due to a 21% reduction in our average fleet and an exchange rate benefit of 2% offset by a 16% increase in our per-unit fleet costs. The year-over-year increase in per-unit fleet costs primarily reflects costs associated with our continued efforts to reduce our fleet size due to lower-than-expected demand for vehicle rentals. Also in our car rental operations, other operating expenses decreased 260 basis points to 48.7% of revenue and declined 90 basis points excluding the impact of gas, despite the 17% decline in revenue, reflecting the Company's cost saving initiatives. Selling, general and administrative costs declined 80 basis points to 10.0% of revenue, also reflecting cost saving initiatives.

In Truck Rental, revenue declined but EBITDA increased modestly as an 8% decline in rental days and a slight decrease in price were offset by operating cost reductions and lower fleet costs.

In the second quarter, as expected, we recorded an $8 million restructuring charge primarily related to the elimination of 400 additional employee positions along with various facility closures, in conjunction with our five-point cost-reduction and efficiency improvement plan.

Business Segment Discussion

The following discussion of second quarter operating results focuses on revenue and EBITDA for each of our operating segments. Revenue and EBITDA are expressed in millions.

Domestic Car Rental
(Consisting of the Company's U.S. Avis and Budget car rental operations)
            2009      2008   % change
          -------   -------  --------
Revenue   $ 1,031   $ 1,241       (17%)
EBITDA    $    37   $    46       (20%)

Revenue declined primarily due to a 22% decrease in rental days offset by a 7% increase in time and mileage per day rates. EBITDA declined primarily due to lower revenue and increased per-unit fleet costs (which had a $50 million impact) partially offset by cost saving initiatives. EBITDA includes $6 million of restructuring costs and $10 million lower net gasoline expense in second quarter 2009.

International Car Rental
(Consisting of the Company's international Avis and Budget vehicle rental
operations)
            2009      2008   % change
          -------   -------  --------
Revenue   $   183   $   230       (20%)
EBITDA    $    18   $    25       (28%)

Revenue decreased primarily due to a 12% decrease in time and mileage per day rates and a 10% decrease in rental days. Excluding the impact of foreign exchange, time and mileage per day rates increased 4%. EBITDA decreased year-over-year primarily due to exchange rates. The effects of lower rental day volumes and higher fleet costs were largely offset by cost-reduction efforts. EBITDA includes $1 million of restructuring costs in second quarter 2009.

Truck Rental
(Consisting of the Company's Budget Truck rental business)
            2009      2008   % change
          -------   -------  --------
Revenue   $    97   $   105        (8%)
EBITDA    $     9   $     8        13%

Truck rental revenue declined and EBITDA increased as an 8% decline in rental days and a slight decrease in time and mileage rate per day were offset by cost-reduction efforts and lower fleet costs. EBITDA includes $1 million of restructuring costs in second quarter 2009.

Other Items

-- Debt Covenant Compliance - As of June 30, 2009, the Company remained
   in compliance with its financial covenant requirements under its senior
   credit facility. EBITDA for the latest twelve months for covenant
   purposes of approximately $155 million exceeded the requirement of
   $95 million.
-- Vehicle Financing - In May, the Company completed an approximately
   $325 million operating lease financing transaction for cars to be added
   to the fleet during the second and third quarters of 2009. In addition,
   in July, the Company's Avis Budget Rental Car Funding (AESOP) LLC
   subsidiary completed a $450 million three-year asset-backed securities
   offering to fund its domestic car rental fleet.
-- Performance Excellence - The Company's Performance Excellence process
   improvement program continued to provide significant cost savings in
   the second quarter. The initiative is expected to deliver more than
   $100 million of savings in 2009.
-- Cost-Reduction and Efficiency Improvement Plan - During the fourth
   quarter, the Company unveiled a five-point plan to reduce costs and
   increase efficiency in response to the economic conditions impacting
   the industry. The savings from this program are expected to total $220
   to $240 million in 2009 and will be incremental to savings from our
   Performance Excellence initiative. In the second quarter, the Company:
   - Eliminated an additional 400 positions, in addition to the 3,300
     positions eliminated during fourth quarter 2008 and first quarter
     2009;
   - Performed a detailed domestic city-by-city review of operating
     expenses to identify additional cost saving opportunities;
   - Instituted price increases taking effect in June and August;
   - Began to realize benefits from consolidating its procurement
     activities; and
   - Implemented numerous other actions to reduce costs.
   The Company had approximately 24,000 employees at June 30, 2009, a
   26% decrease compared to a year earlier.
-- Debt - The Company borrowed $100 million in second quarter 2009 under
   its revolving credit facility to fund working capital and fleet in its
   domestic operations. The Company's total debt balance (vehicle and
   non-vehicle) has declined by approximately $2.1 billion since
   June 30, 2008.
-- Relationships with Vehicle Manufacturers - Both Chrysler and General
   Motors continued to honor their obligations to the Company during their
   bankruptcies, and both manufacturers have assumed their contracts with
   Avis Budget as they emerged from Chapter 11.

Outlook

Airline capacity and domestic enplanements, which are a principal determinant of on-airport rental volumes, decreased markedly in the first half of 2009 compared to the year-earlier period, but demand for car rental seems to have stabilized in the second quarter. Third quarter demand, especially in the leisure segment, appears to be modestly stronger than recent trends, allowing some upward pressure on pricing to continue as our fleet levels remain in line with demand. Nevertheless, the Company continues to expect the macroeconomic environment, conditions in the credit markets, and demand for vehicle rentals to remain challenging in the second half of 2009. Fleet utilization in 2009 should be consistent with 2008 levels.

The used-car market rebounded significantly over the course of the second quarter. Our domestic fleet costs are expected to increase 7-9% on a per-unit basis in 2009, with year-over-year increases in the second half of 2009 expected to be considerably smaller than in the first half. The Company is continuing its efforts to reduce costs and enhance productivity through its Performance Excellence initiative and continues to expect the benefits of this program to exceed $100 million over the course of 2009. Such benefits are expected to be incremental to the over $250 million of annual savings generated by the Company's five-point cost-reduction and efficiency improvement plan and from cost-reduction actions the Company implemented in third quarter 2008.

The recent improvement in the asset-backed securities ("ABS") market allowed the Company to raise $450 million in July to replace a portion of the approximately $1 billion of its domestic term ABS debt that matures in 2010. The Company will seek to refinance most of the remainder of these 2010 domestic maturities in the second half of 2009, assuming market conditions remain favorable.

Investor Conference Call

Avis Budget Group will host a conference call to discuss second quarter results on August 5, 2009, at 9:00 a.m. (ET). Investors may access the call live at www.avisbudgetgroup.com or by dialing (210) 234-0038 and providing the access code "Avis Budget." Investors are encouraged to dial in approximately 10 minutes prior to the call. A web replay will be available at www.avisbudgetgroup.com following the call. A telephone replay will be available from 2:00 p.m. (ET) on August 5, 2009 until 8:00 p.m. (ET) on August 12 at (203) 369-3068, access code: "Avis Budget."

About Avis Budget Group, Inc.

Avis Budget Group is a leading provider of vehicle rental services, with operations in more than 70 countries. Through its Avis and Budget brands, the Company is a leading general-use vehicle rental company in each of North America, Australia, New Zealand and certain other regions based on published airport statistics. Avis Budget Group is headquartered in Parsippany, N.J. and has approximately 24,000 employees. For more information about Avis Budget Group, visit www.avisbudgetgroup.com.

Forward-Looking Statements

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.