BUDGET GROUP, INC.

BUDGET GROUP, INC.

Previous company name
TEAM RENTAL GROUP INC
Name change date
4/29/1994
Company Overview
This was one of the world’s leading vehicle rental companies with 2000 revenues of $2.4 billion, and subsidiary companies that have some of the largest and most recognized brand names in the world: Budget Rent a Car and Ryder TRS. Through the synergies of car and truck rental, airport and neighborhood locations, and business and leisure travel expertise, the company was able to meet the diverse needs of its customers.
The company was founded in 1958 as a car rental company for the “budget-minded” personal renter. Since then, it has helped define the car rental industry through precedent-setting products and services. In August 2002, the company had entered into a definitive agreement to be purchased by Cendant Corporation. Cendant Corporation, now known as Avis Budget Group, operates two of the most recognized brands in the global vehicle rental industry through Avis and Budget.
Business Summary
Budget Group, Inc. (Budget) is engaged in the car rental and truck rental businesses under the names Budget Rent a Car, Ryder TRS and Budget Truck Rental. Through Budget Rent a Car, the Company operates a car and truck rental system. The Company’s Truck Rental segment is comprised of Ryder TRS, a local and one-way consumer and light commercial truck rental operator, primarily through dealers, and Budget Truck Rental, a local and one-way consumer and light commercial truck rental operator and franchisor. In July 2002, the Company and certain of its domestic subsidiaries filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code. In November 2002, the Company was acquired by Cendant Corporation, a provider of travel and residential real estate services.
Description and history
Budget Group, Inc. (Budget), organized in 1992, is engaged in the car rental and truck rental businesses under the names Budget Rent a Car, Ryder TRS and Budget Truck Rental. In July 2002, the Company and certain of its domestic subsidiaries filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code. In November 2002, the Company was acquired by Cendant Corporation, a provider of travel and residential real estate services.

Car Rental

Through Budget Rent a Car, the Company operates a car and truck rental system. Budget is one of only three vehicle rental systems that offer rental vehicles throughout the world under a single brand name. There are approximately 3,200 Budget car rental locations. Approximately 25% are corporate-owned and operated and 75% are operated by franchisees. Approximately 900 locations primarily serve airport business and approximately 2,300 are local market (downtown and suburban) locations. The Company’s Budget rental locations include the United States, Canada, Latin America and the Caribbean (LAC), Europe, the Middle East and Africa (EMEA) and Asia and Pacific (AP).

The Company rents a wide variety of vehicles, including luxury and specialty vehicles. Its fleet consists primarily of vehicles from the current and immediately preceding model year. Rentals generally are made on a daily, weekly or monthly basis. Rental charges are computed on the basis of the length of the rental or, in some cases, on the length of the rental plus a mileage charge. Rates vary at different locations depending on the type of vehicle rented, the local market and competitive and cost factors. Most rentals are made utilizing rate plans under which the customer is responsible for gasoline used during the rental. The Company also generally offers its customers the convenience of leaving a rented vehicle at a location in a city other than the one in which it was rented, although, consistent with industry practices, a drop-off charge or special intercity rate may be imposed. The Company facilitates one-way car rentals between corporate-owned and franchised locations in the United States that enable it to operate more fully as an integrated network of locations.

Of the approximately 3,200 Budget worldwide car and truck locations at December 31, 2001, approximately 75% were owned and operated by franchisees. Franchised locations range from large operations in major airport markets with fleet sizes in excess of 3,000 vehicles and franchise territories within an entire country to operations in small markets with fleets of fewer than 50 vehicles.

Truck Rental

The Company’s Truck Rental segment is comprised of Ryder TRS, a local and one-way consumer and light commercial truck rental operator, primarily through dealers, and Budget Truck Rental, a local and one-way consumer and light commercial truck rental operator and franchisor.

The Company operates a combined truck rental fleet of approximately 35, 100 Ryder and Budget trucks through a network of approximately 3,250 corporate-owned, dealer and franchised locations. With its fleet of approximately 23,600 yellow trucks, Ryder has strong brand recognition and enjoys a high level of satisfaction among consumers. Budget Truck Rental has traditionally been strong in the light commercial market. The average age of its truck rental fleet was 28 months at December 31, 2001.

Ryder TRS’ truck rental services are offered through a national network of approximately 2,575 dealers and 55 corporate-owned and operated outlets at December 31, 2001. Dealers have access through their point-of-sale systems to information concerning inventory levels at all dealers within their market. Dealerships consist primarily of auto sales and service retailers, rental centers, self-storage centers, car rental locations and other vehicle-related businesses that are owned by independent parties. In addition to operating their principal lines of business, these dealers rent trucks to consumers, and the Company pays the dealers a commission on all truck rentals and other sales and rentals. Dealership agreements generally can be terminated by either party upon 30 to 90 days prior written notice, depending on dealer tenure.

Through Budget Truck Rental, the Company provides trucks and related moving supplies and services to consumers and light commercial users in the United States, with a fleet of approximately 11,500 trucks at December 31, 2001. Rental facilities typically are operated in conjunction with Budget Car Rental locations. At December 31, 2001, the Company rented Budget trucks at approximately 400 corporate-owned locations and 220 franchised locations.

The Company supplements its Truck Rental business with a range of other products and services. The Company rents automobile towing equipment and other moving accessories such as hand trucks and furniture pads and sells moving supplies such as boxes, tape and packing materials. The Company also offers customers a range of liability-limiting products such as physical damage waivers, personal accident and cargo protection and supplemental liability protection. These accessory products enhance its appeal to consumers by offering customers “one-stop” moving services. Ryder TRS offers comprehensive household goods relocation services to corporate employee relocation departments through Ryder Move Management.

The Company’s competitors in the car rental market are Alamo, Avis, Dollar, Enterprise, Hertz and National. In its truck rental business, the Company faces competition primarily from Penske and U-Haul.

Founded as a car rental company for the “budget-minded” personal renter

Business Line
Vehicle rental company
Subsidiary
BUDGET RENT-A-CAR INTERNATIONAL, INC.
Advisor
ARTHUR ANDERSEN LLP
IPO date
9/1994
US SIC Code
7514
Company Address
Suite 210
125, Basin Street
City province or state postal code
32114, DAYTONA, FL
Phone: +1 904 238 7035
Fax: +1 904 238 7461
Country address: UNITED STATES OF AMERICA
Website url: www.budget.com