The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes included in this Quarterly Report on Form 10-Q and with our 2025 Form 10-K. Our actual results of operations may differ materially from those discussed in forward-looking statements as a result of various factors, including those discussed in “Forward-Looking Statements.” See “Forward-Looking Statements” and “Risk Factors” for additional information. Unless otherwise noted, all dollar amounts in tables are in millions.
OVERVIEW
Our Company
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 665,000 vehicles in second quarter 2026. 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.
Our Segments
We categorize our operations into two reportable business segments: Americas, consisting primarily of (i) vehicle rental operations in North America, South America, Central America and the Caribbean, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which we do not operate directly; and International, consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which we do not operate directly.
Business and Trends
Our strategy remains centered on driving sustainable growth through operational efficiency, analytics, customer experience and innovation. Additionally, during the fourth quarter of the fiscal year ended December 31, 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. We believe our strategies will continue to reinforce our competitive position, support long-term profitability, and deliver value to our stakeholders. During the three months ended June 30, 2026, we generated revenues of $3.0 billion, net income of $63 million and Adjusted EBITDA of $286 million. These results were primarily driven by lower per-unit fleet costs and increased revenue per day, partially offset by decreased volume.
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 and cash flows.
34
Table of Contents
RESULTS OF OPERATIONS
We measure performance principally using the following key metrics: (i) rental days, which represent the total number of days (or portion thereof) a vehicle was rented, (ii) revenue per day, which represents revenues divided by rental days, (iii) vehicle utilization, which represents rental days divided by available rental days, with available rental days being defined as average rental fleet times the number of days in the period, and (iv) per-unit fleet costs, which represent vehicle depreciation, lease charges and gain or loss on vehicle sales, divided by average rental fleet. Our rental days, revenue per day and vehicle utilization metrics are all calculated based on the actual rental of the vehicle during a 24-hour period. We believe that this methodology provides management with the most relevant metrics in order to effectively manage the performance of the business. Our calculation may not be comparable to the calculation of similarly-titled metrics by other companies. We present currency exchange rate effects to provide a method of assessing how our business performed excluding the effects of foreign currency rate fluctuations. Currency exchange rate effects are calculated by translating the current period results at the prior period average exchange rate plus any related gains and losses on currency hedges.
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.
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.
During the six months ended June 30, 2026:
•Our revenues totaled $5.5 billion, an increase of $59 million year-over-year, primarily due to increased revenue per day, partially offset by decreased volume.
•Our net loss attributable to Avis Budget Group, Inc. was $248 million, representing a decreased loss of $253 million year-over-year, primarily due to increased revenue per day and decreased fleet charges.
•Our Adjusted EBITDA was $173 million, representing a decrease of $11 million year-over-year.
35
Table of Contents
Three Months Ended June 30, 2026 vs. Three Months Ended June 30, 2025
Our condensed consolidated results of operations comprised of the following:
Three Months Ended June 30,
2026 2025 $ Change % Change
Revenues $ 2,998 $ 3,039 $ (41) (1 %)
Expenses
Operating 1,526 1,526 — — %
Vehicle depreciation and lease charges, net 583 636 (53) (8 %)
Selling, general and administrative 385 396 (11) (3 %)
Vehicle interest, net 232 229 3 1 %
Non-vehicle related depreciation and amortization 60 60 — — %
Interest expense related to corporate debt, net:
Interest expense 108 110 (2) (2 %)
Early extinguishment of debt 3 3 — — %
Restructuring and other related charges 18 59 (41) (69 %)
Transaction-related costs, net 9 — 9 n/m
Other (income) expense, net 1 5 (4) (80 %)
Total expenses 2,925 3,024 (99) (3 %)
Income before income taxes 73 15 58 n/m
Provision for income taxes 10 10 — — %
Net income 63 5 58 n/m
Less: Net income attributable to non-controlling interests 28 1 27 n/m
Net income attributable to Avis Budget Group, Inc. $ 35 $ 4 31 n/m
___________
n/m - Not Meaningful
Revenues decreased $41 million during the three months ended June 30, 2026 compared to the similar period in 2025, primarily due to a 2% decrease in volume, partially offset by a $20 million positive impact from currency exchange rate movements. Total expenses decreased 3% during the three months ended June 30, 2026 compared to the similar period in 2025, primarily due to lower fleet costs. Our effective tax rates were a provision of 13.7% and 66.7% for the three months ended June 30, 2026 and 2025, respectively. As a result of these items, our net income attributable to Avis Budget Group, Inc. increased by $31 million compared to the similar period in 2025. For the three months ended June 30, 2026 and 2025, we reported diluted earnings per share of $0.98 and $0.10, respectively.
Operating expenses increased to 50.9% of revenue during the three months ended June 30, 2026 compared to 50.2% during the similar period in 2025, primarily due to increased facilities costs and decreased revenue, partially offset by decreased fleet operating costs. Vehicle depreciation and lease charges decreased to 19.4% of revenue during the three months ended June 30, 2026 compared to 20.9% during the similar period in 2025, primarily due to decreased per-unit fleet costs, excluding exchange rate effects, driven by an increase in the gain on sale of vehicles. Selling, general and administrative costs were 12.9% of revenue during the three months ended June 30, 2026 compared to 13.0% during the similar period in 2025. Vehicle interest costs were 7.7% of revenue during the three months ended June 30, 2026 compared to 7.6% during the similar period in 2025.
36
Table of Contents
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 income to Adjusted EBITDA:
Three Months Ended June 30,
2026 2025
Revenues Adjusted EBITDA Revenues Adjusted EBITDA
Americas $ 2,288 $ 237 $ 2,332 $ 220
International 710 73 707 82
Corporate and other (a) — (24) — (25)
Total Company $ 2,998 $ 286 $ 3,039 $ 277
Reconciliation of net income to Adjusted EBITDA:
2026 2025
Net income $ 63 $ 5
Provision for income taxes 10 10
Income before income taxes 73 15
Non-vehicle related depreciation and amortization 60 60
Interest expense related to corporate debt, net:
Interest expense 108 110
Early extinguishment of debt 3 3
Restructuring and other related charges 18 59
Transaction-related costs, net 9 —
Other (income) expense, net (b) 1 5
Legal matters, net (c) 3 12
Cloud computing costs (d) 11 13
Adjusted EBITDA $ 286 $ 277
__________
(a)Includes unallocated corporate expenses which are not attributable to a particular segment.
(b)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.
(c)Consists of $2 million and $1 million reported within selling, general, and administrative expenses for the three months ended June 30, 2026 and 2025, respectively and $1 million and $11 million reported within operating expenses for the three months ended June 30, 2026 and 2025, respectively.
(d)Reported within operating expenses.
Americas
Three Months Ended June 30,
2026 2025 % Change
Revenues $ 2,288 $ 2,332 (2 %)
Adjusted EBITDA 237 220 8 %
Revenues decreased during the three months ended June 30, 2026 compared to the similar period in 2025, primarily due to a 2% decrease in volume and a $1 million negative impact from currency exchange rate movements.
Operating expenses increased to 51.2% of revenue during the three months ended June 30, 2026 compared to 50.6% during the similar period in 2025, primarily due to increased facilities costs and decreased revenue, partially offset by decreased fleet operating costs. Vehicle depreciation and lease charges decreased to 19.3% of revenue during the three months ended June 30, 2026 compared to 20.8% during the similar period in 2025, primarily due to decreased per-unit fleet costs, excluding exchange rate effects, driven by an increase in the gain on sale of vehicles. Selling, general and administrative costs decreased to 10.5% of revenue during the three
37
Table of Contents
months ended June 30, 2026 compared to 11.3% during the similar period in 2025, primarily due to decreased commissions and marketing costs. Vehicle interest costs were 8.6% of revenue during the three months ended June 30, 2026 compared to 8.4% during the similar period in 2025.
Adjusted EBITDA increased during the three months ended June 30, 2026 compared to the similar period in 2025, primarily due to decreased vehicle depreciation and lease charges and selling, general and administrative costs, partially offset by decreased volume and a $1 million negative impact from currency exchange rate movements.
International
Three Months Ended June 30,
2026 2025 % Change
Revenues $ 710 $ 707 — %
Adjusted EBITDA 73 82 (11 %)
Revenues increased during the three months ended June 30, 2026 compared to the similar period in 2025, primarily due to a $21 million positive impact from currency exchange rate movements, offset by a 3% decrease in volume.
Operating expenses increased to 48.1% of revenue during the three months ended June 30, 2026 compared to 46.7% during the similar period in 2025, primarily due to increased facilities costs. Vehicle depreciation and lease charges decreased to 19.7% of revenue during the three months ended June 30, 2026 compared to 21.4% during the similar period in 2025, primarily due to decreased per-unit fleet costs, excluding exchange rate effects, driven by decreased fleet levels. Selling, general and administrative costs increased to 17.0% of revenue during the three months ended June 30, 2026 compared to 15.5% during the similar period in 2025, primarily due to increased commissions and marketing costs. Vehicle interest costs were 4.9% of revenue during the three months ended June 30, 2026 compared to 4.9% during the similar period in 2025.
Adjusted EBITDA decreased during the three months ended June 30, 2026 compared to the similar period in 2025, primarily due to increased operating expenses and selling, general and administrative costs.
38
Table of Contents
Six Months Ended June 30, 2026 vs. Six Months Ended June 30, 2025
Our condensed consolidated results of operations comprised of the following:
Six Months Ended June 30,
2026 2025 $ Change % Change
Revenues $ 5,528 $ 5,469 $ 59 1 %
Expenses
Operating 2,948 2,879 69 2 %
Vehicle depreciation and lease charges, net 1,247 1,691 (444) (26 %)
Selling, general and administrative 726 704 22 3 %
Vehicle interest, net 461 439 22 5 %
Non-vehicle related depreciation and amortization 118 116 2 2 %
Interest expense related to corporate debt, net:
Interest expense 217 207 10 5 %
Early extinguishment of debt 3 3 — — %
Restructuring and other related charges 53 81 (28) (35 %)
Transaction-related costs, net 15 — 15 n/m
Other (income) expense, net 7 11 (4) (36 %)
Total expenses 5,795 6,131 (336) (5 %)
Loss before income taxes (267) (662) 395 60 %
Benefit from income taxes (96) (163) 67 41 %
Net loss (171) (499) 328 66 %
Less: Net income attributable to non-controlling interests 77 2 75 n/m
Net loss attributable to Avis Budget Group, Inc. $ (248) $ (501) $ 253 50 %
__________
n/m - Not Meaningful
Revenues increased $59 million during the six months ended June 30, 2026 compared to the similar period in 2025, primarily due to a 1% increase in revenue per day, excluding exchange rate effects, and a $71 million positive impact from currency exchange rate movements, partially offset by a 2% decrease in volume. Total expenses decreased 5% during the six months ended June 30, 2026 compared to the similar period in 2025, primarily due to other fleet charges related to the disposal of certain fleet in our Americas reportable segment recorded in 2025. Our effective tax rates were a benefit of 36.0% and 24.6% for the six months ended June 30, 2026 and 2025, respectively. As a result of these items, our net loss attributable to Avis Budget Group, Inc. resulted in a decrease of $253 million compared to the similar period in 2025. For the six months ended June 30, 2026 and 2025, we reported diluted loss per share of $7.01 and $14.24, respectively.
Operating expenses increased to 53.3% of revenue during the six months ended June 30, 2026 compared to 52.6% during the similar period in 2025, primarily due to increased facilities costs. Vehicle depreciation and lease charges decreased to 22.5% of revenue during the six months ended June 30, 2026 compared to 30.9% during the similar period in 2025, primarily due to other fleet charges related to the accelerated disposal of certain fleet in our Americas reportable segment recorded in 2025. Selling, general and administrative costs were 13.1% of revenue during the six months ended June 30, 2026 compared to 12.9% during the similar period in 2025. Vehicle interest costs increased to 8.3% of revenue during the six months ended June 30, 2026 compared to 8.0% during the similar period in 2025, primarily due to increased interest rates, partially offset by decreased fleet levels.
39
Table of Contents
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:
Six Months Ended June 30,
2026 2025
Revenues Adjusted EBITDA Revenues Adjusted EBITDA
Americas $ 4,250 $ 157 $ 4,239 $ 153
International 1,278 60 1,230 79
Corporate and other (a) — (44) — (48)
Total Company $ 5,528 $ 173 $ 5,469 $ 184
Reconciliation of net loss to Adjusted EBITDA:
2026 2025
Net loss $ (171) $ (499)
Benefit from income taxes (96) (163)
Loss before income taxes (267) (662)
Non-vehicle related depreciation and amortization 118 116
Interest expense related to corporate debt, net:
Interest expense 217 207
Early extinguishment of debt 3 3
Other fleet charges (b) — 390
Restructuring and other related charges 53 81
Transaction-related costs, net 15 —
Other (income) expense, net (c) 7 11
Legal matters, net (d) 4 13
Cloud computing costs (e) 23 25
Adjusted EBITDA $ 173 $ 184
__________
(a)Includes unallocated corporate expenses which are not attributable to a particular segment.
(b)Costs reported within vehicle depreciation and lease charges, net related to the disposal of certain fleet in our Americas reportable segment.
(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.
(d)Consists of $3 million and $2 million reported within selling, general and administrative expenses for the six months ended June 30, 2026 and 2025, respectively and $1 million and $11 million reported within operating expenses for the six months ended June 30, 2026 and 2025, respectively.
(e)Reported within operating expenses.
Americas
Six Months Ended June 30,
2026 2025 % Change
Revenues $ 4,250 $ 4,239 — %
Adjusted EBITDA 157 153 3 %
Revenues increased during the six months ended June 30, 2026 compared to the similar period in 2025, primarily due to a 1% increase in revenue per day, excluding exchange rate effects and a $2 million positive impact from currency exchange rate movements, partially offset by a 1% decrease in volume.
Operating expenses increased to 53.2% of revenue during the six months ended June 30, 2026 compared to 52.9% during the similar period in 2025, primarily due to increased facilities costs. Vehicle depreciation and lease charges decreased to 22.9% of revenue during the six months ended June 30, 2026 compared to 33.2% during the similar period in 2025, primarily due to other fleet charges related to the accelerated disposal of certain fleet recorded in 2025. Selling, general and administrative costs were 10.9% of revenue during the six months ended
40
Table of Contents
June 30, 2026 compared to 10.9% during the similar period in 2025. Vehicle interest costs increased to 9.3% of revenue during the six months ended June 30, 2026 compared to 8.8% during the similar period in 2025, primarily due to increased interest rates, partially offset by decreased fleet levels.
Adjusted EBITDA increased during the six months ended June 30, 2026 compared to the similar period in 2025, primarily due to increased revenue per day, excluding exchange rate effects and decreased vehicle depreciation and lease charges, partially offset by increased operating expenses and vehicle interest costs, and a $1 million negative impact from currency exchange rate movements.
International
Six Months Ended June 30,
2026 2025 % Change
Revenues $ 1,278 $ 1,230 4 %
Adjusted EBITDA 60 79 (24 %)
Revenues increased during the six months ended June 30, 2026 compared to the similar period in 2025, primarily due to a $69 million positive impact from currency exchange rate movements and a 2% increase in revenue per day, excluding exchange rate effects, partially offset by a 3% decrease in volume.
Operating expenses increased to 51.4% of revenue during the six months ended June 30, 2026 compared to 49.2% during the similar period in 2025, primarily due to increased fleet operating and facilities costs. Vehicle depreciation and lease charges decreased to 21.2% of revenue during the six months ended June 30, 2026 compared to 23.0% during the similar period in 2025, primarily due to decreased per-unit fleet costs, excluding exchange rate effects, driven by decreased fleet levels, partially offset by increased revenue. Selling, general and administrative costs increased to 17.4% of revenue during the six months ended June 30, 2026 compared to 16.0% during the similar period in 2025, primarily due to increased commissions, marketing and other general and administrative costs. Vehicle interest costs decreased to 5.2% of revenue during the six months ended June 30, 2026 compared to 5.5% during the similar period in 2025, primarily due to decreased fleet levels and sustained interest rates.
Adjusted EBITDA decreased during the six months ended June 30, 2026 compared to the similar period in 2025, primarily due to increased operating expenses and selling, general and administrative costs and a $5 million negative impact from currency exchange rate movements, partially offset by increased revenue per day, excluding exchange rate effects.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
We present separately the financial data of our vehicle programs. These programs are distinct from our other activities as the assets under vehicle programs are generally funded through the issuance of debt that is collateralized by such assets. The income generated by these assets is used, in part, to repay the principal and interest associated with the debt. Cash inflows and outflows relating to the generation or acquisition of such assets and the principal debt repayment or financing of such assets are classified as activities of our vehicle programs. We believe it is appropriate to segregate the financial data of our vehicle programs because, ultimately, the source of repayment of such debt is the realization of such assets.
FINANCIAL CONDITION
June 30, 2026 December 31, 2025 $ Change
Total assets exclusive of assets under vehicle programs $ 10,863 $ 10,306 $ 557
Total liabilities exclusive of liabilities under vehicle programs 12,200 12,047 153
Assets under vehicle programs 21,465 20,951 514
Liabilities under vehicle programs 23,355 22,252 1,103
Redeemable non-controlling interests 147 74 73
Total stockholders’ equity (3,374) (3,116) (258)
41
Table of Contents
The increase in total assets exclusive of assets under vehicle programs is primarily due to our deferred income taxes as well as sales and use taxes in other current assets. See Note 5 – Other Current Assets and Note 9 – Income Taxes.
The increases in assets under vehicle programs and liabilities under vehicle programs are primarily due to the increase in the cost of our rental fleet and related debt.
The increase in redeemable non-controlling interests is due to net income allocated to the interest holders of the Interpace Ventures transaction. See Note 14 – Stockholders' Equity for the components of redeemable non-controlling interests. The decrease in total stockholders’ equity is primarily due to our net loss.
LIQUIDITY AND CAPITAL RESOURCES
Overview
Our principal sources of liquidity are cash on hand and our ability to generate cash through operations and financing activities, as well as available funding arrangements and committed credit facilities, each of which is discussed below.
During 2026, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued approximately $1,572 million of asset-backed notes with expected final payment dates ranging from August 2027 to December 2031 and a weighted average interest rate of 5.35%. Avis Budget Rental Car Funding (AESOP) LLC has also amended and extended its asset-backed variable funding financing facilities, most recently in April 2026. 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.
In February 2026, we amended our European rental fleet securitization program to increase its capacity to approximately €2.1 billion and £250 million and extended the maturity of the program to February 2029.
In March 2026, we entered into an Equity Distribution Agreement with certain sales agents, in which we may sell, from time to time through or to the sales agents, as our agents or as principals, up to 5 million shares of our common stock (the “ATM Program”). The sales, if any, of the shares of our common stock made under the Equity Distribution Agreement may be made in sales deemed to be “at-the-market offerings.” As of June 30, 2026, we have not sold any shares of our common stock under the ATM Program.
In May 2026, we issued an additional $300 million of 8.000% Senior Notes due February 2031. Net proceeds were used to redeem a portion of our 5.750% Senior Notes due July 2027.
In June 2026, we redeemed $300 million of our outstanding 5.750% Senior Notes due July 2027.
In June 2026, we refinanced our existing $2 billion senior revolving credit facility with a new $2 billion senior revolving credit facility with a maturity in June 2031 and also established a new $200 million senior revolving credit facility with a maturity in June 2028.
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. During the six months ended June 30, 2026, we did not repurchase shares of common stock under the Stock Repurchase Program. As of June 30, 2026, approximately $757 million of authorization remained available to repurchase common stock under the Stock Repurchase Program.
42
Table of Contents
CASH FLOWS
The following table summarizes our cash flows:
Six Months Ended June 30,
2026 2025 $ Change
Cash provided by (used in):
Operating activities $ 1,066 $ 1,456 $ (390)
Investing activities (1,611) (3,956) 2,345
Financing activities 623 2,471 (1,848)
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash (9) 35 (44)
Net change in cash and cash equivalents, program and restricted cash 69 6 63
Cash and cash equivalents, program and restricted cash, beginning of period 618 597 21
Cash and cash equivalents, program and restricted cash, end of period $ 687 $ 603 $ 84
Cash provided by operating activities during the six months ended June 30, 2026 decreased when compared with the similar period in 2025, primarily due to changes in the components of working capital.
Cash used in investing activities during the six months ended June 30, 2026 decreased when compared with the similar period in 2025, primarily due to the increase in our proceeds received on vehicle sales and the decrease in our investment in vehicles.
Cash provided by financing activities during the six months ended June 30, 2026 decreased when compared with the similar period in 2025, primarily due to the decrease in both our corporate borrowings and borrowings under vehicle programs.
DEBT AND FINANCING ARRANGEMENTS
As of June 30, 2026, we had approximately $25.9 billion of indebtedness, including corporate indebtedness of approximately $6.0 billion and debt under vehicle programs of approximately $19.9 billion. For information regarding our debt and borrowing arrangements, see Note 1 – Basis of Presentation, Note 11 – Long-term Corporate Debt and Borrowing Arrangements and Note 12 – Debt Under Vehicle Programs and Borrowing Arrangements to our Condensed Consolidated Financial Statements.
LIQUIDITY RISK
Our primary liquidity needs include the procurement of rental vehicles to be used in our operations, servicing of corporate and vehicle-related debt and the payment of operating expenses. The present intention of management is to reinvest the undistributed earnings of our foreign subsidiaries indefinitely into our foreign operations. Our primary sources of funding are operating revenue, cash received upon the sale of vehicles, borrowings under our vehicle-backed borrowing arrangements and our senior revolving credit facilities, and other financing activities.
Our liquidity has in the past been, and could in the future be, negatively affected by any financial market disruptions, a worsening of the United States and worldwide economies or by increases in interest rates, which may result in unfavorable conditions in the mobility industry, in the asset-backed financing market and in the credit markets generally. We believe these factors have affected and could further affect the debt ratings assigned to us by credit rating agencies and the cost of our borrowings. Additionally, a worsening or prolonged downturn in the worldwide economy or a disruption in the credit markets could further impact our liquidity due to (i) decreased demand and pricing for vehicles in the used vehicle market, (ii) increased costs associated with, and/or reduced capacity or increased collateral needs, including due to a decrease in the fair value of our fleet, under, our financings, (iii) the adverse impact of vehicle manufacturers being unable or unwilling to honor their obligations to repurchase or guarantee the depreciation on the related program vehicles and (iv) disruption in our ability to obtain financing due to negative credit events specific to us or affecting the overall debt market.
43
Table of Contents
As of June 30, 2026, we had $558 million of available cash and cash equivalents and access to $471 million of available borrowing capacity under our revolving credit facilities providing us with access to approximately $1,029 million of total liquidity.
Our liquidity position could also be negatively impacted if we are unable to remain in compliance with the consolidated first lien leverage ratio requirement and other covenants associated with our senior credit facilities and other borrowings. As of June 30, 2026, we were in compliance with the financial covenants governing our indebtedness. For additional information regarding our liquidity risks, see Part I, Item 1A, “Risk Factors” of our 2025 Form 10-K.
CONTRACTUAL OBLIGATIONS
Our future contractual obligations have not changed significantly from the amounts reported within our 2025 Form 10-K with the exception of our commitment to purchase vehicles, which decreased by approximately $4.2 billion from December 31, 2025, to approximately $2.6 billion as of June 30, 2026 due to existing fleet levels. Changes to our obligations related to corporate indebtedness and debt under vehicle programs are presented above within the section titled “Liquidity and Capital Resources—Debt and Financing Arrangements” and also within Note 11 – Long-term Corporate Debt and Borrowing Arrangements and Note 12 – Debt Under Vehicle Programs and Borrowing Arrangements to our Condensed Consolidated Financial Statements.
CRITICAL ACCOUNTING ESTIMATES
Accounting Policies
The results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex. However, in presenting our financial statements in conformity with generally accepted accounting principles (GAAP), we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they relate to future events and/or events that are outside of our control. If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to our consolidated results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time. Presented within the section titled “Critical Accounting Estimates” of our 2025 Form 10-K are the accounting policies (related to goodwill and other indefinite-lived intangible assets, vehicles, income taxes and public liability, property damage and other insurance liabilities) that we believe require subjective and complex judgments that could potentially affect reported results. There have been no significant changes to those accounting policies or our assessment of which accounting policies we would consider to be critical accounting policies.
New Accounting Standards
For detailed information regarding new accounting standards and their impact on our business, see Note 1 – Basis of Presentation to our Condensed Consolidated Financial Statements.
44
Table of Contents