Form 11-K
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

Form 11-K

 

 

 

x

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2011

OR

 

¨

TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission File No. 001-10308

 

 

 

A. Full title of the plan and address of the plan, if different from that of the issuer named below:

Avis Budget Group, Inc.

Employee Savings Plan

 

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Avis Budget Group, Inc.

6 Sylvan Way

Parsippany, New Jersey 07054

 

 

 


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AVIS BUDGET GROUP, INC. EMPLOYEE SAVINGS PLAN

TABLE OF CONTENTS

 

 

 

     Page  

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     2   

FINANCIAL STATEMENTS:

  

Statements of Net Assets Available for Benefits as of December 31, 2011 and 2010

     3   

Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2011

     4   

Notes to Financial Statements

     5   

SUPPLEMENTAL SCHEDULE:

  

Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held At End of Year) as of December 31, 2011

     17   

SIGNATURE

     18   

EXHIBIT 23.1 – CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM – J.H. Cohn LLP

     19   

All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

 


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Administrator, Trustee and Participants of the

Avis Budget Group, Inc. Employee Savings Plan

We have audited the accompanying statements of net assets available for benefits of the Avis Budget Group, Inc. Employee Savings Plan (the “Plan”) as of December 31, 2011 and 2010, and the related statement of changes in net assets available for benefits for the year ended December 31, 2011. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Avis Budget Group, Inc. Employee Savings Plan as of December 31, 2011 and 2010, and the changes in net assets available for benefits for the year ended December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2011 is presented for the purpose of additional analysis and is not a required part of the 2011 basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the 2011 basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the 2011 basic financial statements taken as a whole.

/s/ J.H. Cohn LLP

Roseland, New Jersey

June 26, 2012

 

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AVIS BUDGET GROUP, INC. EMPLOYEE SAVINGS PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

AS OF DECEMBER 31, 2011 AND 2010

 

 

 

      2011     2010  

ASSETS:

    

Participant directed investments at fair value:

    

Cash and cash equivalents

   $ 3,671,555      $ 1,473,028   

Mutual funds

     204,613,220        228,218,495   

Common/collective trusts

     124,267,932        135,383,029   

Avis Budget Group, Inc. common stock

     8,582,768        13,172,818   
  

 

 

   

 

 

 

Total investments

     341,135,475        378,247,370   
  

 

 

   

 

 

 

Receivables:

    

Notes receivable from participants

     6,804,366        6,930,539   

Participant contributions

     365,855        357,435   

Employer contributions

     251,514        66,404   

Interest and dividends

     227,056        226,975   
  

 

 

   

 

 

 

Total receivables

     7,648,791        7,581,353   
  

 

 

   

 

 

 

Total Assets

     348,784,266        385,828,723   
  

 

 

   

 

 

 

NET ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE

     348,784,266        385,828,723   

Adjustments from fair value to contract value for fully benefit-responsive investment contracts

     (2,175,132     —     
  

 

 

   

 

 

 

NET ASSETS AVAILABLE FOR BENEFITS

   $ 346,609,134      $ 385,828,723   
  

 

 

   

 

 

 

The accompanying notes are an integral part of these financial statements.

 

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AVIS BUDGET GROUP, INC. EMPLOYEE SAVINGS PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

FOR THE YEAR ENDED DECEMBER 31, 2011

 

 

 

Net investment loss:

  

Dividends

   $ 4,090,235   

Interest

     41,533   

Net depreciation in fair value of investments

     (11,393,802
  

 

 

 

Net investment loss

     (7,262,034

Interest income on notes receivable from participants

     319,706   

Contributions:

  

Participants

     11,309,929   

Employer

     7,235,624   

Rollovers

     343,641   
  

 

 

 

Total contributions

     18,889,194   
  

 

 

 

Total additions

     11,946,866   

Benefits paid to participants

     49,715,276   

Net assets transferred out during the year

     1,282,461   

Administrative expenses

     168,718   
  

 

 

 

Total deductions

     51,166,455   
  

 

 

 

NET DECREASE IN ASSETS

     (39,219,589

NET ASSETS AVAILABLE FOR BENEFITS:

  

BEGINNING OF YEAR

     385,828,723   
  

 

 

 

END OF YEAR

   $ 346,609,134   
  

 

 

 

The accompanying notes are an integral part of these financial statements.

 

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AVIS BUDGET GROUP, INC. EMPLOYEE SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

 

 

 

1. DESCRIPTION OF THE PLAN

The following description of the Avis Budget Group, Inc. Employee Savings Plan (the “Plan”) provides only general information. Participants should refer to the Summary Plan Description or the Plan document, which are available from Avis Budget Group, Inc. (the “Company”), for a more complete description of the Plan’s provisions.

The Plan is a defined contribution plan that provides Internal Revenue Code (“IRC”) Section 401(k) employee salary deferral benefits and additional employer contributions for the Company’s eligible employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). Merrill Lynch Trust Company FSB (the “Trustee”) is the Plan’s trustee.

The following is a summary of certain Plan provisions:

Eligibility – Each regular employee of the Company (as defined in the Plan document) is eligible to participate in the Plan following the later of commencement of employment or the attainment of age eighteen. Each part-time employee of the Company (as defined in the Plan document) is eligible to participate in the Plan following the later of one year of eligible service or the attainment of age eighteen.

Participant Contributions – Participants may elect to make pre-tax contributions up to 50% of pre-tax annual compensation, up to the statutory maximum of $16,500 for 2011. Certain eligible participants (age 50 and over) are permitted to contribute an additional $5,500 as a catch up contribution, resulting in a maximum pre-tax contribution of $22,000 for 2011. Participants may change their contribution investment direction on a daily basis.

Employer Contributions – Following the completion of one year of employment, the Company makes contributions to the plan equal to 100% of each eligible participant’s pre-tax salary deferrals up to 6% of such participant’s eligible compensation.

Rollovers – All employees, upon commencement of employment, are provided the option of making a rollover contribution into the Plan in accordance with Internal Revenue Service (“IRS”) regulations.

Investments – Participants direct the investment of contributions to various investment options and may reallocate investments among the various funds. The fund reallocation must be in 1% increments, include both employee and employer contributions and is limited to one reallocation per day, subject to restrictions imposed by the mutual fund companies to curb short-term trading. Participants should refer to the Plan document regarding investments in Company common stock. Participants should refer to each fund’s prospectus for a more complete description of the risks and restrictions associated with each fund.

 

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Vesting – At any time, participants are 100% vested in their contributions and the Company’s matching contributions plus actual earnings thereon.

Notes Receivable from Participants – Participants actively employed by the Company may borrow, in the form of a loan, from their fund accounts up to the lesser of $50,000 or 50% of their vested balance, provided the vested balance is at least $2,000. The notes are secured by the participant’s vested account balance and bear interest at a rate commensurate to that charged by major financial institutions as determined by the Plan administrator. Note repayments are made through payroll deductions over a term not to exceed five years, unless the proceeds of the note are used to purchase the principal residence of the participant, in which case the term is not to exceed 15 years. Notes receivable from participants, which are secured by the borrowing participant’s vested account balance, are valued at the outstanding principal balance plus any accrued and unpaid interest.

Participant Accounts – A separate account is maintained for each participant. Each participant’s account is credited with the participant’s contributions, the Company’s matching contributions, and allocation of Plan earnings, including interest, dividends and net realized and unrealized appreciation in fair value of investments. Each participant’s account is also charged with an allocation of net realized and unrealized depreciation in fair value of investments and certain administrative expenses. Allocations are based on earnings or participant account balances, as defined in the Plan document. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

Payment of Benefits to Participants – Participants are entitled to withdraw all or any portion of their vested accounts in accordance with the terms of the Plan and applicable law. Participants are permitted to process in-service withdrawals in accordance with Plan provisions upon attaining age 59  1/2 or for hardship in certain circumstances, as defined in the Plan document, before that age. A terminated participant with an account balance of more than $5,000 (excluding any rollover contributions and related earnings thereon) may elect to remain in the Plan and continue to be credited with fund earnings, or receive a lump-sum amount equal to the value of the participant’s vested interest in his or her account. A terminated participant with an account balance of $5,000 or less will automatically receive a lump-sum distribution.

Forfeited Accounts – Forfeited balances of terminated participants’ non-vested accounts are first used to pay Plan expenses, if any, and then to decrease employer contributions. As of December 31, 2011 and 2010, forfeited account balances amounted to $30,829 and $32,623, respectively. During 2011, $57,348 of forfeited non-vested accounts were used to reduce employer match.

Administrative Expenses – Administrative expenses of the Plan may be paid by the Company; otherwise, such expenses are paid by the Plan. Fees for participants’ distributions, withdrawals, loans and similar expenses are paid by the Plan.

 

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Transfers to Affiliated Plans – Net transfers of participant account balances to affiliated plans of the Company totaled $1,282,461 for the year ended December 31, 2011.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting – The accompanying financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and related disclosures. Actual results could differ from those estimates.

Risks and Uncertainties – The Plan invests in various securities including mutual funds, common/collective trusts and Avis Budget Group, Inc. common stock. Investment securities are exposed to various risks, such as interest rate and credit risks and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes would materially affect participant account balances and the amounts reported in the financial statements.

Cash and Cash Equivalents – The Plan considers highly liquid investments with an original maturity of three months or less to be cash equivalents.

Investment Contracts – In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) topic 962, Plan Accounting — Defined Contribution Plans, investment contracts held by a defined-contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. As required by the ASC, the Statements of Net Assets Available for Benefits present investment contracts at fair value as well as an additional line item showing an adjustment of fully benefit- responsive investment contracts from fair value to contract value. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis.

 

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Valuation of Investments and Income Recognition – The Plan’s investments are stated at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the Plan year. Mutual funds are valued at the quoted market price, which represents the net asset value of shares held by the Plan at year-end. Common/collective trusts are valued at the net asset value of the shares held by the Plan at year-end, which is based on the fair value of the underlying assets.

One of the Plan’s current common/collective trust investments is the Wells Fargo Stable Return Fund and in 2010 was the Merrill Lynch Retirement Preservation Trust (“MLPT”). Effective October 6, 2010, the Trustee of the MLPT approved a resolution to terminate the MLPT and commence liquidation of its assets. The MLPT changed from a stable value fund to a short-term bond fund. Prior to its liquidation, the MLPT invested in traditional guaranteed investment contracts (“traditional GICs”) and wrapped portfolios of fixed income investments (“synthetic GICs”). The Wells Fargo Stable Return Fund invests in investment contracts issued by highly rated companies. These include Guaranteed Investment Contracts (“GICs”), synthetic GICs and cash equivalents. Traditional GICs are unsecured, general account obligations of insurance companies or banks and are collaterized by the assets of the insurance company or bank. A security-backed contract consists of a portfolio of securities and a benefit responsive, contract value wrap contract purchased for the portfolio. The wrap contract amortizes gains and losses of the underlying securities over the portfolio duration, and assures that contract value; benefit responsive payments will be made for participant directed withdrawals. Wrap contracts are issued by financially responsible third parties, typically banks, insurance companies, or other financial services institutions and are designed to allow a stable asset fund to maintain a stable contract value and to protect a fund in extreme circumstances. In a typical wrap contract, the wrap issuer agrees to pay a fund the difference between the contract value and the market value of the underlying assets for participant directed redemptions once the market value has been totally exhausted.

Wrap contracts accrue interest using a formula called the “crediting rate.” The crediting rate is primarily based on the current yield-to-maturity of the covered investments, plus or minus amortization of the difference between the market value and contract value of the covered investments over the duration of the covered investments at the time of computation. The crediting rate can be adjusted periodically and is usually adjusted either monthly or quarterly, but in no event is the crediting rate less than zero. The crediting rate on traditional GICs is typically fixed for the life of the investment. The crediting rate on synthetic GICs is typically reset every month or quarter based on the contract value of the contract, the market yield of the underlying assets, the market value of the underlying assets and the average duration of the underlying assets.

 

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Certain events limit the ability of the Plan to transact at contract value with the insurance companies and financial institution issuers of traditional GICs or synthetic GICs. Such events include the following: (i) layoffs, (ii) bankruptcy, (iii) plant closings, (iv) plan termination or mergers, (v) early retirement incentive, (vi) employee communications designed to induce participants to transfer from the fund, or (vii) competing fund transfer or violation of equity wash or equivalent rules in place and changes of qualification status of employer or plan. As of December 31, 2011, the Plan administrator does not believe that the occurrence of an event that would limit the Wells Fargo Stable Return Fund’s ability to transact at contract value with participants is probable.

The fair value of the underlying debt securities is valued at the last available bid price in over the counter markets or on the basis of values obtained by independent valuation groups. Traditional GICs are valued using a discounted cash flow methodology, synthetic GICs are valued on a monthly basis per the terms of the applicable contract using valuations provided by a pricing service approved by the Trustee, and the fair value of the wrap contracts is determined using a market approach discounting methodology. The investment contracts are valued at fair value of the underlying investments and then adjusted by the issuer to contract value.

Participants may direct the withdrawal or transfer of all or a portion of their investment at contract value. Contract value represents contributions made to the fund, plus earnings, less participant withdrawals. The fair value recorded in the Plan’s financial statements for such fund was $85,774,179 and $92,926,948 at December 31, 2011 and 2010, respectively. The average yield earned by the Wells Fargo Stable Return Fund and the MLPT calculated based on the change in the net asset value between the beginning and the end of the year was 1.56% and 1.89% for the years ended December 31, 2011 and 2010, respectively. The average yield earned with an adjustment to reflect the actual interest rate credited to participants was 2.33% and 1.87% for the years ended December 31, 2011 and 2010, respectively.

Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date and interest is recorded when earned. The accompanying Statement of Changes in Net Assets Available for Benefits presents net depreciation in fair value of investments, which includes unrealized gains and losses on investments held at December 31, 2011, realized gains and losses on investments sold during the year then ended and management and operating expenses associated with the Plan’s investments in mutual funds and common/collective trusts.

Management fees and operating expenses charged to the Plan for investments in the mutual funds and common/collective trusts are deducted from income earned on a daily basis and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments.

 

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Benefit Payments – Benefits to participants are recorded upon distribution. Amounts allocated to accounts of participants who have elected to withdraw from the Plan, but have not yet received payments from the Plan, totaled $71,324 and $1,469,245 at December 31, 2011 and 2010, respectively.

Accounting Pronouncements Adopted During 2011

In May 2011, The FSB issued Accounting Standards Update (“ASU”) No. 2011-4, “Fair Value Measurements” (“ASU 2011-4”). ASU 2011-4 clarifies the application of existing fair value measurement requirements and results in common measurements and disclosure requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”). The Plan adopted this guidance, as required, and it did not have a significant impact on its financial statements.

 

3. INVESTMENTS

The following tables present investments at fair value that represent five percent or more of the Plan’s net assets available for benefits as of December 31:

 

      2011  

Wells Fargo Stable Return Fund

   $ 85,774,179   

PIMCO Total Return Fund

     38,367,791   

The Oakmark Equity and Income Fund

     31,427,010   

American Growth Fund of America

     24,705,043   

Merrill Lynch Equity Index Trust

     19,859,315   

Davis NY Venture Fund

     17,957,454   

 

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     2010  

Merrill Lynch Retirement Preservation Trust (a)

   $ 92,926,948   

PIMCO Total Return Fund

     41,727,995   

The Oakmark Equity and Income Fund

     33,082,131   

American Growth Fund of America

     30,829,059   

Davis NY Venture Fund

     23,713,879   

Harbor International Fund

     19,724,313   

 

  (a) 

Permitted party-in-interest.

During 2011, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in fair value, as follows:

 

     2011  

Mutual funds

   $ (6,583,715

Common/collective trusts

     (1,053,915

Common stock (a)

     (3,756,172
  

 

 

 
   $ (11,393,802
  

 

 

 

 

  (a) 

Consists of common stock of Avis Budget Group, Inc.

 

4. FEDERAL INCOME TAX STATUS

The IRS determined and informed the Company by letter dated October 16, 2002 that the Plan and related trust are designed in accordance with applicable sections of the IRC. The Plan has been amended and restated since receiving this determination letter. However, the Plan administrator and the Plan’s tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC and that the Plan and related trust continue to be tax-exempt. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

 

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Accounting principles generally accepted in the United States of America require Plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS or Treasury. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2011, there were no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes the Plan is no longer subject to income tax examinations for years prior to 2008.

 

5. EXEMPT PARTY-IN-INTEREST TRANSACTIONS

A portion of the Plan’s investments represent shares in funds managed by Merrill Lynch Trust Company FSB, the Trustee of the Plan. Therefore, these transactions qualify as exempt party-in-interest transactions.

At December 31, 2011 and 2010, the Plan held 800,631 and 846,582 shares, respectively, of Avis Budget Group, Inc. common stock with a cost basis of $7,519,234 and $7,271,234, respectively. During 2011, the Plan did not receive dividend income from the Company.

 

6. PLAN TERMINATION

Although the Company has not expressed any intention to do so, the Company reserves the right to modify, suspend, amend or terminate the Plan in whole or in part at any time subject to the provisions of ERISA.

 

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7. RECONCILIATION TO FORM 5500

The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500 at December 31:

 

      2011     2010  

Net assets available for benefits per the financial statements

   $ 346,609,134      $ 385,828,723   

Less: Amounts allocated to withdrawing participants

     (71,324     (1,469,245

Add: Adjustment from contract value to fair value for fully
benefit-responsive investment contracts

     2,175,132        —     
  

 

 

   

 

 

 

Net assets available for benefits per Form 5500

   $ 348,712,942      $ 384,359,478   
  

 

 

   

 

 

 

The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 2011 to Form 5500:

 

Benefits paid to participants per the financial statements

   $ 49,715,276   

Less: Amounts allocated to withdrawing participants at December 31, 2010

     (1,469,245

Certain deemed distributions of notes receivable from participants

     (514,473

Add: Amounts allocated to withdrawing participants at December 31, 2011

     71,324   
  

 

 

 

Benefits paid to participants per Form 5500

   $ 47,802,882   
  

 

 

 

Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, 2011, but not yet paid as of that date.

The following is a reconciliation of change in net assets available for benefits per the financial statements for the year ended December 31, 2011 to the net loss per Form 5500:

 

Decrease in net assets available for benefits per the financial statements

   $ (39,219,589

Less: Amounts allocated to withdrawing participants at December 31, 2011

     (71,324

Add: Transfer of assets from the Plan (Reflected in Line L-Transfer of assets- of Form 5500)

     794,593   

Amounts allocated to withdrawing participants at December 31, 2010

     1,469,245   

December 31, 2011 adjustment from contract value to fair value for fully benefit-responsive investment contracts

     2,175,132   
  

 

 

 

Net loss per Form 5500

   $ (34,851,943
  

 

 

 

 

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8. FAIR VALUE MEASUREMENTS

The Plan measures certain financial assets and liabilities at fair value in accordance with FASB ASC topic 820, Fair Value Measurements, which requires the Plan to classify its investments into (i) Level 1, which refers to securities valued using quoted prices from active markets for identical assets, includes the common stock of publicly traded companies, mutual funds with quoted market prices and common/collective trusts with quoted market prices which operate similar to mutual funds, (ii) Level 2, which refers to securities for which significant other observable market inputs are readily available, including common/collective trusts for which quoted market prices are not readily available and (iii) Level 3, which refers to securities valued based on significant unobservable inputs. See Note 2—Summary of Significant Accounting Policies for the Plan’s valuation methodology used to measure fair value.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value. There have been no changes in the methodologies used at December 31, 2011 and 2010.

 

   

Avis Budget Group, Inc. common stock – The fair value of Avis Budget Group common stock is valued at the closing price reported on the active markets on which the security is traded. As such, these assets are classified as Level 1.

   

Mutual funds – Valued at the NAV of shares held by the Plan at year end. NAV is derived by the quoted prices of underlying investments and are also classified at Level 1.

 

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Common/collective trusts – are valued based on the net asset value (“NAV”) of units held by the Plan at year-end. Although the common/collective trusts are not available in an active market, the NAV of the units are approximated based on the quoted prices of the underlying investments that are traded in an active market. The Company has no unfunded commitments related to any of these investments and there are no Plan initiated redemption restrictions on these investments. There are no redemption restrictions on the participant’s holdings in these investments. These assets are classified as Level 2.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following table sets forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of December 31, 2011:

 

Asset Class

   Level 1      Level 2      Total  

Common stock

   $ 8,582,768       $ —         $ 8,582,768   

Mutual funds:

        

Large-cap growth

     35,822,550         —           35,822,550   

Large-cap value

     7,302,805         —           7,302,805   

Large-cap blend

     49,384,464         —           49,384,464   

Mid-cap growth

     7,941,516         —           7,941,516   

Mid-cap value

     12,900,260         —           12,900,260   

Small-cap growth

     8,609,563         —           8,609,563   

Small-cap blend

     16,358,400         —           16,358,400   

Foreign large-cap blend

     16,522,180         —           16,522,180   

Bond funds

     43,023,687         —           43,023,687   

Real estate

     6,747,795         —           6,747,795   

Common/collective trusts:

        

Large-cap blend

     —           19,859,315         19,859,315   

Foreign large-cap blend

     —           9,470,785         9,470,785   

Emerging markets

     —           9,163,653         9,163,653   

Bond Funds

        85,774,179         85,774,179   
  

 

 

    

 

 

    

 

 

 

Total

   $ 213,195,988       $ 124,267,932       $ 337,463,920   
  

 

 

    

 

 

    

 

 

 

 

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The following table sets forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of December 31, 2010:

 

Asset Class

   Level 1      Level 2      Total  

Common stock

   $ 13,172,818       $ —         $ 13,172,818   

Mutual funds:

        

Large-cap growth

     44,205,358         —           44,205,358   

Large-cap value

     8,100,884         —           8,100,884   

Large-cap blend

     56,796,010         —           56,796,010   

Mid-cap growth

     10,329,732         —           10,329,732   

Mid-cap value

     12,589,003         —           12,589,003   

Small-cap growth

     5,516,387         —           5,516,387   

Small-cap blend

     18,942,856         —           18,942,856   

Foreign large-cap blend

     19,724,313         —           19,724,313   

Bond funds

     45,640,218         —           45,640,218   

Real estate

     6,373,734         —           6,373,734   

Common/collective trusts:

        

Large-cap blend

     —           18,996,201         18,996,201   

Foreign large-cap blend

     —           9,452,248         9,452,248   

Emerging markets

     —           14,007,632         14,007,632   

Short term investments

     —           92,926,948         92,926,948   
  

 

 

    

 

 

    

 

 

 

Total

   $ 241,391,313       $ 135,383,029       $ 376,774,342   
  

 

 

    

 

 

    

 

 

 

******

 

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Table of Contents

Plan Number: 002

EIN: 06-0918165

AVIS BUDGET GROUP, INC. EMPLOYEE SAVINGS PLAN

FORM 5500, SCHEDULE H, PART IV, LINE 4i – SCHEDULE OF ASSETS (HELD AT END OF YEAR)

AS OF DECEMBER 31, 2011

 

 

 

Identity of Issue, Borrower,

Lessor or Similar Party

  

Description of Investment

   Number of
Shares, Units
or Par Value
     Cost ***    Current
Value ****
 

* Avis Budget Group, Inc. Common Stock

   Common stock      800,631          $ 8,582,768   

   Wells Fargo Stable Return Fund

   Common/collective trust      1,735,140            85,774,179   

* Merrill Lynch Equity Index Trust

   Common/collective trust      1,213,895            19,859,315   

   Oppenheimer International Growth Trust

   Common/collective trust      676,968            9,470,785   

   Harding Loevner Emerging Market Fund

   Common/collective trust      960,551            9,163,653   

   The Oakmark Equity and Income Fund

   Registered investment company      1,161,812            31,427,010   

   PIMCO Total Return Fund

   Registered investment company      3,529,696            38,367,791   

   Columbia Mid-Cap Value Fund

   Registered investment company      1,007,046            12,900,260   

   American Growth Fund of America

   Registered investment company      861,403            24,705,043   

   PIMCO Real Return INST Fund

   Registered investment company      102,639            1,210,111   

   Harbor Mid-Cap Growth Fund

   Registered investment company      1,014,242            7,941,516   

   Lord Abbett Bond Debenture Fund

   Registered investment company      453,393            3,445,785   

   Vanguard Explorer Admiral Fund

   Registered investment company      129,545            8,609,563   

   DWS RREEF Real Estate Fund

   Registered investment company      335,334            6,747,795   

   Harbor International Fund

   Registered investment company      315,008            16,522,180   

   Harbor Small Cap Value Fund

   Registered investment company      817,920            16,358,400   

   Prudential Jennison Growth Fund

   Registered investment company      590,728            11,117,507   

   MFS Value Fund

   Registered investment company      326,309            7,302,805   

   Davis NY Venture Fund

   Registered investment company      547,150            17,957,454   

* Various Participants**

   Notes receivable from participants            6,804,366   
   Cash and cash equivalents               3,671,555   
           

 

 

 

Total

            $ 347,949,841   
           

 

 

 

 

*     Represents a permitted party-in-interest.
**     Maturity dates range principally from January 2012 to October 2029. Interest rates range from 4.3% to 10.5%.
***     Cost information is not required for participant-directed investments.
****     Form 5500 instructions require reporting of common/collective trusts at fair value on this schedule.

See Report of Independent Registered Public Accounting Firm.

 

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Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Avis Budget Group, Inc. Employee Savings Plan

  By:   /s/    Mark Servodidio        
   

Mark Servodidio

Executive Vice President and

Chief Human Resources Officer

Avis Budget Group, Inc.

Date: June 26, 2012

 

18

Consent of Independent Registered Public Accounting Firm

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements No. 333-42549 and No. 333-98933 on Form S-8 of our report dated June 26, 2012 relating to the Avis Budget Group, Inc. Employee Savings Plan statements of net assets available for benefits as of December 31, 2011 and 2010, and the related statement of changes in net assets available for benefits for the year ended December 31, 2011, which appear in this Annual Report on Form 11-K.

/s/ J.H. Cohn LLP

Roseland, New Jersey

June 26, 2012

 

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