UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of Earliest Event Reported): November 15, 2006 (November
9, 2006)
Avis
Budget Group, Inc.
(Exact
Name of Registrant as Specified in its Charter)
|
Delaware
|
1-10308
|
06-0918165
|
|
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
6
Sylvan Way
Parsippany,
NJ
|
07054
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(973)
496-4700
(Registrant's
telephone number, including area code)
N/A
(Former
name or former address if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit
Report or Completed Interim Review.
As
previously disclosed, the Company’s former PHH Corporation subsidiary filed a
Current Report on Form 8-K on October 30, 2006 in which PHH reiterated that
the
resolution of certain accounting matters is expected to result in changes
to
PHH’s previously filed financial statements.
The
Company has completed its review of these and other accounting matters evaluated
by PHH and, on November 9, 2006, concluded that such matters will require
a
restatement of certain of the Company’s previously filed financial statements to
address these matters, which include the allocation of the purchase price
among
current and former business units associated with the Company’s 2001 acquisition
of Avis Group Holdings (then parent of PHH’s fleet management and Wright Express
fuel card businesses) and
a
change to disaggregate two of the businesses acquired for purposes of
testing goodwill impairment.
Such
re-allocation and change in aggregation will result in (i)
a
restatement of the gain recorded upon the initial public offering of Wright
Express in first quarter 2005; (ii) a prior period impairment charge, which
in
turn will result in a restatement of the impairment charge recorded upon
the
spin-off of PHH in first quarter 2005; and (iii) a
restatement of certain of our expenses.
Such
changes will be reflected principally in the discontinued operations of Avis
Budget and,
with
respect to continuing operations, are expected to decrease our aggregate
net
income over the period of 2001-2004 by an immaterial amount.
In
addition, we expect to record additional adjustments to discontinued operations
over the period of 2001-2005 which are expected to increase the Company’s
aggregate net income over that period (with a corresponding offsetting decrease
to net income for periods prior to 2001).
Accordingly,
our previously issued financial statements for the years ended December 31,
2005, 2004 and 2003 as well as for the three and six months ended March 31
and
June 30, 2006, respectively, should no longer be relied upon.
Since
PHH
has neither re-filed its prior financial statements nor, to the Company’s
knowledge, completed its evaluation of all such accounting matters, there
can be
no assurance that the Company will not receive additional information from
PHH
that is inconsistent with the information received to date, which could cause
further or different changes to the Company’s previously filed financial
statements.
We
currently expect to file our Quarterly Report on Form 10-Q for the period
ended
September 30, 2006 on or prior to November 20, 2006 and we expect that the
financial statements to be included in such Quarterly Report will properly
reflect all applicable period adjustments relating to the restatement. Following
the filing of our Form 10-Q, we intend to file restated financial statements
for
the additional periods described above to correct these errors as soon as
practicable.
The
Company’s management and Audit Committee have discussed the matters disclosed in
this filing with our independent registered public accounting firm, Deloitte
& Touche LLP.
Item
7.01 Regulation FD Disclosure.
On
November 15, 2006, we announced that we have
provided to the trustee the financial information for Avis Budget Car
Rental and
its
subsidiaries, the companies that comprise our vehicle rental business, as
required by Avis Budget Car Rental’s indenture and such information is available
on our web site at www.avisbudgetgroup.com.
Our
press
release announcing the posting of such financial information is incorporated
by
reference herein.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
The
following exhibits are filed as part of this report:
|
Exhibit
No.
|
Description
|
|
|
99.1
|
Press
Release dated November 15, 2006.
|
Forward-Looking Statements
Certain
statements in this Current Report on Form 8-K 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 our actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements.
Statements preceded by, followed by or that otherwise include the words
"believes", "expects", "anticipates", "intends", "projects", "estimates",
"plans", "may increase", "may fluctuate" and similar expressions or future
or
conditional verbs such as "will", "should", "would", "may" and "could" are
generally forward-looking in nature and not historical facts. Any statements
that refer to expectations or other characterizations of future events,
circumstances or results are forward-looking statements.
Various
risks that could cause future results to differ from those expressed by the
forward-looking statements included in this Current Report on Form 8-K include,
but are not limited to our ability to complete the calculations required
by the
transactions related to the separation of Cendant Corporation in order meet
our
expected timing for our Form 10-Q for third quarter 2006 and the timely receipt
of additional information from PHH and whether that information is inconsistent
with the information received to date. In light of these risks, uncertainties,
assumptions and factors, the forward-looking events discussed in this Current
Report on Form 8-K may not occur. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date
stated,
or if no date is stated, as of the date of this Current Report on Form 8-K.
Important assumptions and other important factors that could cause actual
results to differ materially from those in the forward-looking statements
are
specified in our Form 10-Q for the quarter ended June 30, 2006, including
under
headings such as "Forward-Looking Statements", "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
Except for our ongoing obligations to disclose material information under
the
federal securities laws, we undertake no obligation to release any revisions
to
any forward-looking statements, to report events or to report the occurrence
of
unanticipated events unless required by law.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
AVIS
BUDGET GROUP, INC.
|
|||
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By:
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/s/
John T. McClain
|
||
|
John
T. McClain
Senior
Vice President and Chief Accounting Officer
|
Date:
November 15, 2006
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
|
99.1
|
Press
Release dated November 15, 2006.
|
Exhibit
99.1
AVIS
BUDGET GROUP ANNOUNCES EXPECTED TIMING FOR
FILING
OF ITS THIRD QUARTER FORM 10-Q
Posts
Avis Budget Car Rental Financial Results on the Company's
Website
Concludes
Review of PHH Accounting Matters
PARSIPPANY,
N.J., November 15, 2006 - Avis
Budget Group, Inc. (NYSE:
CAR)
announced today that it expects to file its Quarterly Report on Form 10-Q
for
third quarter 2006 on or prior to November 20, 2006. The Company has provided
to
the trustee the third-quarter financial information for Avis Budget Car
Rental
and its subsidiaries, the companies that comprise our vehicle rental business,
as required by Avis Budget Car Rental’s indenture and such information is
available on the Company’s web site at www.avisbudgetgroup.com.
The
continued delay in filing our Form 10-Q is principally due to completing
the
additional calculations required by the large volume of transactions that
occurred during the third quarter related to the separation of Cendant
Corporation and finalizing the calculations, adjustments and disclosures
related
to the PHH accounting matters described below.
We
have
completed our review of the accounting matters which are being evaluated
by the
Company’s former PHH subsidiary and are in the process of finalizing the
allocations, adjustments and disclosures that will be required to be reflected
in the Form 10-Q. Such matters will require a re-allocation among current
and
former reporting units of the purchase price associated with our 2001
acquisition of Avis Group Holdings (then parent of PHH’s fleet management and
Wright Express fuel card businesses) and a change to disaggregate two
of the businesses acquired for purposes of testing goodwill impairment.
Such
re-allocation and change in aggregation will result in (i)
a
restatement of the gain recorded upon the initial public offering of Wright
Express in first quarter 2005; (ii) a prior period impairment charge, which
in
turn will result in a restatement of the impairment charge recorded upon
the
spin-off of PHH in first quarter 2005; and (iii) a restatement of certain
of our
expenses. Such changes will be reflected principally in the discontinued
operations of Avis Budget and, with respect to continuing operations, are
expected to decrease our aggregate net income over the period of 2001-2004
by an
immaterial amount. In addition, we expect to record additional adjustments
to
discontinued operations over the period of 2001-2005 which are expected
to
increase our aggregate net income over that period (with a corresponding
offsetting decrease to net income for periods prior to 2001). Since PHH
has
neither re-filed its prior financial statements nor, to our knowledge,
completed
its evaluation of all of the accounting matters, there can be no assurance
that
we will not receive additional information from PHH that is inconsistent
with
the information received to date.
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
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. and has more than 30,000
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. Statements
preceded by, followed by or that otherwise include the words "believes",
"expects", "anticipates", "intends", "projects", "estimates", "plans",
"may
increase", "may fluctuate" and similar expressions or future or conditional
verbs such as "will", "should", "would", "may" and "could" are generally
forward-looking in nature and not historical facts. Any statements that
refer to
expectations or other characterizations of future events, circumstances
or
results are forward-looking statements.
Various
risks that could cause future results to differ from those expressed by
the
forward-looking statements included in this press release include, but
are not
limited to: the Company’s ability to complete the calculations required by the
transactions related to the separation of Cendant Corporation in order
to meet
the Company’s planned timing for the filing of its Form 10-Q and the receipt of
additional information from PHH and whether that information is inconsistent
with the information received to date. In light of these risks, uncertainties,
assumptions and factors, the forward-looking events discussed in this press
release may not occur. You are cautioned not to place undue reliance on
these
forward-looking statements, which speak only as of the date stated, or
if no
date is stated, as of the date of this press release. Important assumptions
and
other important factors that could cause actual results to differ materially
from those in the forward looking statements are specified in Avis Budget's
10-Q
for the three months ended June 30, 2006, including under headings such
as
"Forward-Looking Statements", "Risk Factors" and "Management's Discussion
and
Analysis of Financial Condition and Results of Operations." Except for
the
Company's ongoing obligations to disclose material information under the
federal
securities laws, the Company undertakes no obligation to release any revisions
to any forward-looking statements, to report events or to report the occurrence
of unanticipated events unless required by law.
Media
Contacts
John
Barrows Susan
McGowan
(973)
496-7865 (973)
496-3916
Investor
Contact
David
Crowther
(973)
496-7277