Business review

The Group is an international vehicle rental services company and a market leader in many of its markets. Under the Avis and Budget brands, we operate more than 3,900 corporate and licensee locations throughout Europe, Africa, the Middle East and Asia, which completed over eight million rental transactions in 2008 across the network. During the year, our corporately-owned locations employed some 5,960 staff (based on average full-time equivalent headcount) and had an average fleet of 117,000 vehicles.

We enjoy close commercial ties with Avis Budget Group, Inc., which owns the global rights to the two brands, as well as the Wizard rental and reservation system. Long-term agreements with Avis Budget Group, Inc. give the Group the rights to use the Avis and Budget names, brands and operating systems through master licensing agreements until 2036, whilst cross-marketing and joint promotional agreements are in place to provide customers with access to a global network.

Our network comprises countries in Western Europe (the corporate countries), which operate their own directly-owned locations and also appoint local agencies and licensees plus a wider network of national licensee operations across the rest of Europe, Africa, the Middle East and Asia. We also have joint ventures in China and France, and minority interests in operations in India and Malaysia.

Corporate locations are directly owned by the Group and employ Avis Europe’s staff, premises and fleet. Agency operations are owned and operated by third parties who rent the Group’s vehicles, but employ their own staff and use their own premises. Agency revenue is accounted for as Group revenue, with the agent receiving a percentage of revenue as commission. Licensed locations are owned and operated by licensees who pay fees in return for the use of the brand and operating system. In the latter case, we only include the licensee fee receivable in revenue.

In 2008, revenues from the Avis branded business represented 96% of overall revenue, and the Avis corporate countries accounted for approximately 93% of overall revenue.

The Budget branded business in Europe, Asia and the Middle East serves customers through over 1,100 rental locations in 66 countries. Corporate countries comprise France, United Kingdom, Austria and Switzerland. In 2008, the Budget branded business represented 4% of our overall revenue.

A description of the performance of the Group for the year ended 31 December 2008, and significant developments which occurred during the year, is set out in the Chairman’s statement, the Chief Executive’s review and in Financial review.