UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-K

|ý                                           | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|------------------------------------------- | ----------------------------------------------------------------------------------------
|For the fiscal year ended December 31, 2003
|OR                                         
|o                                           | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period from
 to         

COMMISSION FILE NO. 1-13315

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AVIS GROUP HOLDINGS, INC.(Exact Name Of Registrant As Specified In Its Charter)

DELAWARE(State or other jurisdiction of
incorporation or organization)

11-3347585(I.R.S. Employer
Identification Number)6 SYLVAN WAY
PARSIPPANY, NJ(Address of Principal Executive Office)

07054(Zip Code)(973) 496-3500(Registrant's telephone number, including area code)SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:NoneSECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:None


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Indicate
by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
/x/ No / /

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's
knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
/x/

Indicate
by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes / / No /x/

The
aggregate market value of the Common Stock issued and outstanding and held by non-affiliates of the Registrant on June 30, 2003. All of our Common Stock is owned by Cendant
Corporation, accordingly there is no public trading market for our Common Stock.

The
number of shares outstanding of the Registrant's classes of Common Stock was 5,537 as of December 31, 2003.

Avis
Group Holdings, Inc. meets the conditions set forth in General Instructions I(1)(a) and (b) to Form 10-K and is therefore filing this form with the reduced
disclosure format.



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TABLE OF CONTENTS

|Item |  | Description                                                                          |  | Page
|---- |  | ------------------------------------------------------------------------------------ |  | ----
|     |  | PART I                                                                               |  |     
|1    |  | Business                                                                             |  | 3   
|2    |  | Properties                                                                           |  | 6   
|3    |  | Legal Proceedings                                                                    |  | 7   
|4    |  | Submission of Matters to a Vote of Security Holders                                  |  | 7   
|     |  | PART II                                                                              |  |     
|5    |  | Market for the Registrant's Common Equity and Related Stockholder Matters            |  | 7   
|6    |  | Selected Financial Data                                                              |  | 7   
|7    |  | Management's Narrative Analysis of the Results of Operations                         |  | 8   
|7A   |  | Quantitative and Qualitative Disclosures about Market Risk                           |  | 11  
|8    |  | Financial Statements and Supplementary Data                                          |  | 11  
|9    |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |  | 11  
|9A   |  | Controls and Procedures                                                              |  | 11  
|     |  | PART III                                                                             |  |     
|10   |  | Directors and Executive Officers of the Registrant                                   |  | 12  
|11   |  | Executive Compensation                                                               |  | 12  
|12   |  | Security Ownership of Certain Beneficial Owners and Management                       |  | 12  
|13   |  | Certain Relationships and Related Transactions                                       |  | 12  
|14   |  | Principal Accounting Fees and Services                                               |  | 12  
|     |  | PART IV                                                                              |  |     
|15   |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                      |  | 13  
|     |  | Signatures                                                                           |  | 14  

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FORWARD-LOOKING STATEMENTS

Forward-looking
statements in our public filings or other public statements are subject to 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. These forward-looking statements were based on
various factors and were derived utilizing numerous important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements.
Forward-looking statements include the information concerning our future financial performance, business strategy, projected plans and objectives. Statements preceded by, followed by or that otherwise
include the words "believes", "expects", "anticipates", "intends", "project", "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. You should understand that the following important factors and assumptions could affect
our future results and could cause actual results to differ materially from those expressed in such forward-looking statements:



Other
factors and assumptions not identified above were also involved in the derivation of these forward looking statements, and the failure of such other assumptions to be realized as well as other
factors may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond our control.

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You
should consider the areas of risk described above in connection with any forward-looking statements that may be made by us and our businesses generally. Except for our ongoing obligations to
disclose material information under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the
occurrence of unanticipated events unless required by law. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.

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PART I

ITEM 1.    BUSINESS

Except as expressly indicated or unless the context otherwise requires, the "Company", "we", "our" or "us" means Avis Group Holdings, Inc., a
Delaware corporation, and its subsidiaries.

On
March 1, 2001, all of our common stock not then owned by Cendant Corporation ("Cendant") was acquired by PHH Corporation, ("PHH"), a wholly-owned subsidiary of Cendant for approximately
$994 million. Simultaneous with the acquisition, we were distributed to a Cendant subsidiary not within the PHH ownership structure and the Company's former fleet and fuel card businesses were
retained by PHH. Accordingly, we are now a wholly-owned subsidiary of Cendant.

We
operate and/or franchise portions of the Avis car rental system (the "Avis System"), which represents one of the largest car rental systems in the world, based on total revenue and number of
locations. We and our affiliates operate and/or franchise approximately 1,800 of the approximately 4,800 rental locations that comprise the Avis System, including locations at most of the largest
airports and cities in the United States and internationally. The Avis System in Europe, Africa, part of Asia and the Middle East is operated under a franchise arrangement with Avis
Europe Ltd., an independent third party and is comprised of approximately 3,000 locations.

We
own and operate approximately 982 Avis car rental locations in both airport and non-airport (downtown and suburban) locations in the United States, Canada, Puerto Rico, the U.S. Virgin
Islands, Argentina, Australia and New Zealand. For 2003, our Avis car rental operations had an average fleet of approximately 209,500 vehicles and generated total vehicle rental revenue of
approximately $2.97 billion, of which 89% (or $2.64 billion) was derived from U.S. operations. In addition, we or our affiliates franchise the Avis System to independent business owners
in approximately 820 locations including locations in the United States, Canada, Latin America and the Asia Pacific region. Approximately 95% of our Avis System rental revenue in the United States is
generated by locations owned by us or operated for us under agency arrangements, and the remainder is generated by locations operated by independent franchisees. Independent franchisees pay fees based
either on total time and mileage charges or total revenue.

In
addition to fees from car rentals and franchisee royalties, we generate revenue through optional products and services such as supplemental equipment (child seats and ski racks), loss damage
waivers, additional liability insurance, personal accident insurance, personal effects protection and fuel option and service charges.

We
provide our corporate locations and franchisees access to the benefits of a variety of services, including: (i) a standardized system identity for rental location presentation and uniforms;
(ii) a training program, business policies, quality of service standards and data designed to monitor service commitment levels; (iii) marketing/advertising/public relations support,
which includes a national advertising campaign to generate awareness of the Avis System through our familiar "We Try Harder" tagline; (iv) one of the leading rental car web sites, avis.com;
(v) "Avis Cares," a program which includes providing customers with area-specific driver safety information, the latest
child safety seats (available for rent) and driving maps; (vi) a counter bypass program, Avis Preferred Service, which is available at top airport locations; and (vii) Avis Access, a
full range of special products and services for physically-challenged drivers and passengers. Avis System locations have access to the Wizard System, an online computer system which provides
(i) global reservations processing, (ii) rental agreement generation and administration and (iii) fleet accounting and control. Franchisees pay a fee for the use of the Wizard
System. We also offer Avis InterActive, which provides corporate customers real-time access to aggregated information on car rental expenses to better manage their car rental expenditures.

Growth.For 2003, we generated 83.9% of our revenue from our owned airport locations. We intend to increase business at existing
off-airport locations through a combination of advertising, promotions, local sales calls and targeted marketing to members of various associations and corporations. We also intend to

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open
new off-airport locations through relationships with major retailers. We formalized a partnership with Sears Roebuck and Co. in October 2002 and since then have established 54
Avis locations at Sears stores.

Fleet Management.With respect to the car rental operations owned and operated by us, we participate in a variety of vehicle purchase
programs with major domestic and foreign manufacturers. Our feature suppliers are General Motors Corporation ("GM") and the Ford Motor Company ("Ford"). Under the terms of our agreements with GM and
Ford, which expire in 2006 and 2007, respectively, we are required to purchase a certain number of vehicles from these manufacturers. Our current operating strategy is to maintain an average fleet age
of approximately five months. For model year 2003, approximately 99% of our domestic fleet vehicles were subject to repurchase programs. Under these programs, subject to certain conditions, such as
mileage and vehicle condition, a manufacturer is required to repurchase those vehicles at a pre-negotiated price thereby reducing our risk on the resale of the vehicles. In 2003,
approximately 1.7% of repurchase program vehicles did not meet the conditions for repurchase.

Airport Rental Concession Fees.In general, concession fees for airport locations are based on a percentage of total concenssionable
revenues (as determined by each airport authority), subject to minimum annual guaranteed amounts. Concessions are typically awarded by airport authorities every three to five years based upon
competitive bids. Our concession agreements with the various airport authorities generally impose certain minimum operating requirements, provide for relocation in the event of future construction and
provide for abatement of the minimum annual guarantee in the event of extended low passenger volume.

Marketing.In 2003, approximately 73% of vehicle rental transactions generated from our owned and agency operated car rental locations were
generated in the United States by travelers who rented with Avis under contracts between Avis and the travelers' employers or through membership in an organization with whom Avis has an affiliation
(such as AARP and USAAA). Our franchisees also have the option to participate in these contracts. Unaffiliated business and leisure travelers are solicited by direct mail, promotions and advertising
campaigns.

Customers
can make Avis reservations through the Avis toll-free reservation center at 1-888-777-AVIS, via our Avis web site at www.avis.com,through online portals or by contacting their travel agent. Travel
agents can access Avis through all major global distribution systems
and can obtain information with respect to our rental locations, vehicle availability and applicable rate structures through these systems. An automated link between these systems and the Wizard
System gives them the ability to reserve and confirm rentals directly. We
also maintain strong links to the travel industry. Avis offers customers the ability to earn frequent traveler points with virtually all the major airlines including Delta Air Lines, Inc.,
American Airlines, Inc. Continental Airlines, Inc. and United Airlines, Inc. We are also affiliated with TripRewards, Cendant's recently launched loyalty marketing program and
with the frequent traveler programs of various hotels including the Hilton Hotels Corporation, Hyatt Corporation, and Starwood Hotels and Resorts Worldwide, Inc. These arrangements provide
various incentives to all program participants and cooperative marketing opportunities for Avis and the partner. We also have an arrangement with Cendant's lodging brands whereby lodging customers who
are making reservations by telephone may be transferred to Avis if they desire to rent a vehicle. In addition, through partnerships with American Express, MBNA Corporation and Sears, we are able to
provide their customers with incentives to rent from Avis.

Internationally,
we utilize a multi-faceted approach to sales and marketing throughout our global network by employing or contracting with teams of trained and qualified account executives to
negotiate contracts with major corporate accounts and leisure and travel industry partners. In addition, we utilize a wide range of marketing and direct mail initiatives to continuously broaden our
customer base. Sales efforts are designed to secure customer commitment and support customer requirements for both domestic and international car rental needs. Our international operations maintain
close relationships with the travel industry including participation in several airline frequent flyer programs, such as those operated by Air

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Canada
and Qantas Airways as well as participation in Avis Europe programs with British Airways, Lufthansa and other carriers.

Avis.com.We have a strong brand presence on the Internet through our Avis web site, www.avis.com. A steadily increasing number of Avis
vehicle rental customers obtain rate, location and fleet information and then reserve their Avis
rentals directly through this web site. In addition, we have agreements to promote our car rental services with major Internet portals, and have a strong advertising presence on Yahoo!. During 2003,
reservations through Internet sources increased to 18.3% of total reservations from 14.7% in the prior year.

Competition.The car rental industry is characterized by intense price and service competition. In any given location, we may encounter
competition from national, regional and local companies. Nationally, our principal competitor is The Hertz Corporation; however, we also compete with National Car Rental System, Inc., Alamo
Rent-A-Car, Inc., Dollar Rent A Car, Inc. and Thrifty Rent-A-Car System, Inc. and Enterprise Rent-A-Car
Company. In addition, we compete with a large number of regional and local vehicle rental companies throughout the country.

Competition
in the U.S. car rental business is based primarily upon price, reliability, national distribution, usability of booking system, ease of rental and return and other elements of customer
service. In addition, competition is influenced strongly by advertising and marketing.

Trademarks and Intellectual Property.The service mark "Avis," related marks incorporating the word "Avis", and related logos are material
to us. We actively use these marks. All of the material marks used in our business are registered (or have applications pending for registration) with the United States Patent and Trademark Office as
well as major countries worldwide where we operate. Cendant owns the marks we use. We pay Cendant a royalty fee of 4.5% of revenue for the use of the Avis trade name. The royalty of 4.5% consists of a
base royalty of 3.0% of gross revenue and a supplemental royalty of 1.5% of the gross revenue payable quarterly in arrears.

Seasonality.The third quarter of the year, which covers the summer vacation period, represents the peak season for vehicle rentals. Any
occurrence that disrupts travel patterns during the summer period could have a greater adverse effect on our annual performance than in other periods. The fourth quarter is generally our weakest
financial quarter. In 2003, our average monthly rental fleet, excluding sub-franchisees, ranged from a low of approximately 195,000 vehicles in December to a high of approximately 234,000
vehicles in July. Rental utilization, which is based on the number of hours vehicles are rented compared to the total number of hours vehicles are available for rental, ranged from a low of 65.8% in
December to a high 82.0% in August and averaged 73.4% for all of 2003.

Insurance.We generally assume the risk of liability to third parties arising from vehicle rental services in the United States, Canada,
Puerto Rico and the U.S. Virgin Islands, for up to $1.0 million per occurrence, through a combination of certificates of self-insurance, insurance coverage provided by our domestic
subsidiary and insurance coverage secured from an unaffiliated domestic insurance carrier. We maintain additional insurance in excess of such level up to $9 million per occurrence through an
unaffiliated fronting carrier, and up to an additional $300 million per occurrence through a combination of unaffiliated excess carriers.

We
insure the risk of liability to third parties in Argentina, Australia and New Zealand through a combination of unaffiliated carriers and our wholly-owned subsidiary. These carriers provide coverage
supplemental to minimum local requirements.

A
traditional revenue source for the vehicle rental industry has been the sale of loss damage waivers, by which rental companies agree to relieve a customer from financial responsibility arising from
vehicle damage incurred during the rental period. Approximately 2.8% and 3.2% of our vehicle operations revenue during 2003 and 2002, respectively, was generated by the sale of loss damage waivers.
Approximately 40 states have considered legislation affecting the sale of loss damage waivers. To date, 24 states

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have
enacted legislation which requires disclosure to each customer at the time of rental that damage to the rented vehicle may be covered by the customer's personal automobile insurance and that loss
damage waivers may not be necessary. Pursuant to new legislation effective February 24, 2003, New York permits the sale of loss damage waivers at a capped rate of $9 per day for vehicles with
Manufacturers Suggested Retail Price ("MSRP") of less than $30,000 and $12 per day for vehicles with a MSRP of over $30,000. Moreover, Nevada has capped rates for loss damage waivers at $15.
California has capped these rates at either $9 per day for cars with an MSRP of $19,000 or less, or $15 per day for cars with an MSRP of $19,000 to $34,999, but there is no cap for cars with an MSRP
of $35,000 or more.

Regulation.We are subject to federal, state and local laws and regulations including those relating to taxing and licensing of vehicles,
franchising, consumer credit, environmental protection and labor matters. The principal environmental regulatory requirements applicable to our vehicle rental operations relate to the ownership or use
of tanks for the storage of petroleum products, such as gasoline, diesel fuel and motor oil; the treatment or discharge of waste waters; and the generation, storage, transportation and
off-site treatment or disposal of solid or liquid wastes. We operate 289 locations at which petroleum products are stored in underground or aboveground tanks. We have instituted an
environmental compliance program designed to ensure that these tanks are in compliance with applicable technical and operational requirements, including the replacement and upgrade of underground
tanks to comply with the December 1998 EPA upgrade mandate, and periodic testing and leak monitoring at underground storage tanks. We believe that the locations where we currently operate are
in compliance, in all material respects, with such regulatory requirements.

We
may also be subject to requirements related to the remediation of, or the liability for remediation of, substances that have been released to the environment at properties owned or operated by us
or at properties to which we send substances for treatment or disposal. Such requirements may be imposed without regard to fault and liability for environmental remediation and may be substantial.

We
may be eligible for reimbursement or payment of remediation costs associated with future releases from our regulated underground storage tanks and have established funds to assist in the payment of
investigation and remediation costs for releases from certain registered underground tanks. Subject to certain deductibles, the availability of funds, compliance status of the tanks and the nature of
the release, these tank funds may be available to us for use in remediating future releases from our tank systems.

We
are also subject to regulation under the insurance statutes, including insurance holding company statutes, of the jurisdictions in which our insurance company subsidiaries are domiciled. These
regulations vary from state to state, but generally require insurance holding companies and insurers that are subsidiaries of insurance holding companies to register and file certain reports including
information concerning their capital structure, ownership, financial condition and general business operations with the state regulatory authority, and require prior regulatory agency approval of
changes in control of an insurer and intercorporate transfers of assets within the holding company structure. Such insurance statutes also require that we obtain limited licenses to sell optional
insurance coverage to our customers at the time of rental.

The
payment of dividends to us by our insurance company subsidiaries is restricted by government regulations in Colorado, Bermuda and Barbados affecting insurance companies domiciled in those
jurisdictions.

Employees.As of December 31, 2003, we employed approximately 14,700 people. Management considers our employee relations to be
satisfactory.

ITEM 2.    PROPERTIES

Our principal executive offices are located in a facility leased by Cendant at 6 Sylvan Way, Parsippany, New Jersey 07054.

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We
lease a portion of a 158,000 square foot facility in Virginia Beach, Virginia, owned by Cendant which serves as a satellite administrative office for our rental car operations. We also sublease
space from Cendant in Tulsa, Oklahoma for certain marketing activities. In addition, there are approximately 19 leased office locations in the United States.

We
lease or have vehicle rental concessions relating to space at 738 locations in the United States and 244 locations outside the United States utilized in connection with our vehicle rental
operation. Of those locations, 233 in the United States and 78 outside the United States are airports. Typically, an airport receives a percentage of vehicle rental revenues, with a guaranteed
minimum. Because there is a limit to the number of vehicle rental locations in an airport, vehicle rental companies frequently bid for the available locations, usually on the basis of the size of the
guaranteed minimums. We and other vehicle rental companies also lease parking space at or near airports and at other vehicle rental locations.

ITEM 3.    LEGAL PROCEEDINGS

After the April 15, 1998 announcement of the discovery of accounting irregularities in the former CUC business units, and prior to the date of this Annual Report on
Form 10-K, approximately 70 lawsuits claiming to be class actions and other proceedings were commenced against Cendant and other defendants. Cendant has settled the principal
securities class action pending against it and such settlement was fully funded by Cendant on May 24, 2002.

Cendant
is involved in litigation asserting claims associated with the accounting irregularities discovered in former CUC business units outside of the principal common stockholder class action
litigation. Cendant cannot give any assurance as to the final outcome or resolution of these proceedings. However, Cendant does not believe that the impact of such proceedings should result in a
material liability to us in relation to our consolidated financial position or liquidity.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Omitted pursuant to General Instruction I(2) of Form 10-K.

PART II

ITEM 5.    MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS

Not Applicable

ITEM 6.    SELECTED FINANCIAL DATA

Omitted pursuant to General Instruction I(2) of Form 10-K.

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ITEM 7.    MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our Business Section and our Consolidated Financial Statements and accompanying Notes
thereto included elsewhere herein. Unless otherwise noted, all dollar amounts are in thousands and presented before taxes (as appropriate).

We
are the second largest general use car rental brand in the world and a wholly-owned subsidiary of Cendant Corporation.

RESULTS OF OPERATIONS2003 vs. 2002

Our comparative results of continuing operations, for the years ended December 31, 2003 and 2002 comprised the following:

|                                  |  | 2003 |           | 2002 |   | Change   
|--------------------------------- |  | ---- | --------- | ---- | - | ---------
|Revenues                          |  | $    | 2,972,655 |      | $ | 2,608,277
|Total expenses                    |  |      | 2,858,874 |      |   | 2,524,363
|                                  |  |      |           |      |   |          
|Income before income taxes        |  |      | 113,781   |      |   | 83,914   
|Provision for income taxes        |  |      | 39,050    |      |   | 31,468   
|                                  |  |      |           |      |   |          
|Income from continuing operations |  | $    | 74,731    |      | $ | 52,446   
|                                  |  |      |           |      |   |          

Total
revenues and expenses increased 14.0% and 13.2%, respectively, primarily due to our subleasing arrangement with Budget Rent A Car System, Inc. ("Budget"), a wholly-owned subsidiary of
Cendant not within our ownership structure. We sublease a portion of our fleet to Budget for a monthly fee comprised of depreciation, interest and an administrative fee. As a result of this
relationship, we generated incremental revenues and expenses of $397.9 million and $391.1 million (consisting of vehicle depreciation expense of $309.9 million and vehicle
interest expense of $81.2 million), respectively. Excluding such amounts, our domestic car rental revenues declined $94.4 million (4%) in full year 2003 compared with full year 2002. The
net reduction in domestic car rental revenues was primarily due to a 7% period-over-period reduction in the total number of car rental days. This was partially offset by a 2%
increase in time and mileage revenue per rental day, reflecting an increase in pricing which has minimal associated incremental costs. In addition, period-over-period expenses
include favorable program-related interest costs of $33 million on the financing of vehicles due to lower interest rates, and $35 million of lower program-related depreciation expense on
vehicles due to different mix of vehicles in our fleet bearing a lower cost in 2003 compared with 2002. This favorable impact on expenses was substantially offset by incremental vehicle-related net
expenses and other operating costs. The increase in net expenses includes incremental maintenance costs, damages on vehicles, and higher vehicle license and registration costs. Revenues from our
international operations, excluding Budget sublease revenues, increased $60.9 million, due to increased transaction volume and the favorable impact to revenues of exchange rates in Canada,
Australia and New Zealand, which was principally offset by the unfavorable impact on expenses.

Our
effective tax rate for was 34.3% and 37.5% for the years ending December 31, 2003 and 2002, respectively. The effective rate for 2003 was lower primarily due to an increase in benefits
received from our foreign operations, as well as a reduction in state taxes.

RESULTS OF OPERATIONS2002 vs. 2001

The periods prior to March 1, 2001 (the date we were acquired by Cendant) have been designated "Predecessor Companies" and the periods subsequent to March 1, 2001
have been designated "Successor Company". The results of the Predecessor Companies and the Successor Company have been combined for the year ended December 31, 2001 since we believe that
separate discussions for the two months ended

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February 28,
2001 and the ten months ended December 31, 2001 are not meaningful in terms of describing trends in our operating results or comparisons to the prior year.

|                                         |  | 2002 |           | 2001 |   | Change    |  
|---------------------------------------- |  | ---- | --------- | ---- | - | --------- | -
|Revenues                                 |  | $    | 2,608,277 |      | $ | 2,484,651 |  
|Total expenses                           |  |      | 2,524,363 |      |   | 2,596,738 |  
|                                         |  |      |           |      |   |           |  
|Income (loss) before income taxes        |  |      | 83,914    |      |   | (112,087  | )
|Provision (benefit) for income taxes     |  |      | 31,468    |      |   | (29,868   | )
|                                         |  |      |           |      |   |           |  
|Income (loss) from continuing operations |  | $    | 52,446    |      | $ | (82,219   | )
|                                         |  |      |           |      |   |           |  

Our
2002 revenue increased 5.0% over 2001 primarily due to a 4.0% increase in vehicle rental revenue per day, which primarily resulted from an increase in pricing.

Total
expenses decreased 2.8% during 2002 primarily due to the elimination of unusual charges and also due to a decrease of 18.5% in net non-vehicle interest expense principally due to the
termination of our revolving credit facility in 2001, which was replaced by intercompany funding from Cendant at lower variable interest rates. See Note 3Unusual Charges to our
Consolidated Financial Statements for a discussion of the 2001 unusual charges.

Our
effective tax rate for 2002 was 37.5%, compared with 26.6% for 2001. The increase in the effective tax rate is primarily due to the impact of the goodwill amortization that reduced our effective
tax rate in 2001.

ACCOUNTING POLICIES

Critical Accounting Policies

In
presenting our financial statements in conformity with accounting principles generally accepted in the United States of America, 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 pertain to future events. However, events that are
outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions,
it will likely result in a material adverse impact to our consolidated results of operations, financial position and in liquidity. We believe that the estimates and assumptions we used when preparing
our financial statements were the most appropriate at that time. Presented below are those accounting policies that we believe require subjective and complex judgments that could potentially affect
reported results.

Financial Instruments.We estimate fair values of each of our financial instruments, including derivative instruments. These financial
instruments are not publicly traded on an organized exchange. In the absence of quoted market prices, we must develop an estimate of fair value using present value cash flow models, which may involve
significant judgments and assumptions, including estimates of future interest rate levels based on interest rate yield curves and estimation of the timing of future cash flows. The use of different
assumptions may have a material effect on the estimated fair value amounts recorded in the financial statements, which are disclosed in Note 13Financial Instruments to our
Consolidated Financial Statements. In addition, hedge accounting requires that at the beginning of each hedge period, we justify an expectation that the relationship between the changes in fair value
of derivatives designated as hedges compared to changes in the fair value of the underlying hedged items be highly effective. This effectiveness assessment involves an estimation of changes in fair
value resulting from changes in interest rates, as well as the probability of the occurrence of transactions for cash flow hedges. The use of different assumptions and changing market conditions may
impact the results of the effectiveness assessment and ultimately the timing of when changes in derivative fair values and the underlying hedged items are recorded in earnings. See Item 7A.
"Quantitative and Qualitative Disclosures above Market Risk" for a discussion of the effect of hypothetical changes to these assumptions.

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Goodwill.We have reviewed the carrying values of our goodwill as required by SFAS No. 142, "Goodwill and Other Intangible Assets,"
by comparing the carrying values of our reporting units to their fair values and determined that the carrying amounts of our reporting units did not exceed their respective fair values. When
determining fair value, we utilized various assumptions, including projections of future cash flows. A change in these underlying assumptions will cause a change in the results of the tests and, as
such, could cause fair value to be less than the respective carrying amounts. In such event, we would then be required to record a charge, which would impact earnings. We will continue to review the
carrying values of goodwill for impairment annually, or more frequently if circumstances indicate impairment may have occurred.

The
aggregate carrying value of our goodwill was approximately $1,306.0 million at December 31, 2003. Refer to Note 8Intangible Assets to our Consolidated Financial
Statements for more information on goodwill.

Public Liability, Property Damage and Other Insurance Liabilities, Net.Insurance liabilities on our Consolidated Balance Sheets include
additional liability insurance, personal effects protection insurance, public liability, property damage and personal accident insurance claims for which we are self-insured. We estimate
the required liability of such claims on an undiscounted basis utilizing an actuarial method that is based upon various assumptions which include, but are not limited to, our historical loss
experience and projected loss development factors. The required liability is also subject to adjustment in the future based upon the changes in claims experience, including changes in the number of
incidents (frequency) and change in the ultimate cost per incident (severity).

Changes in Accounting Policies During 2003

On
January 1, 2003, Cendant adopted the fair value method of accounting for stock-based compensation provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" and all the
provisions of SFAS No. 148, "Accounting for Stock-Based CompensationTransition and Disclosure." As a result, we changed our accounting policy for stock-based compensation.

In
addition, on January 1, 2003, we adopted the following standards as a result of the issuance of new accounting pronouncements by the Financial Accounting Standards Board ("FASB") in 2002:



On
January 17, 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities." On December 24, 2003, the FASB issued a complete replacement of FIN
46, entitled FIN 46 Revised ("FIN 46R"), which clarifies certain complexities of FIN 46. As of September 30, 2003, we had applied the provisions of FIN 46 for all transactions initiated
subsequent to January 31, 2003. We adopted FIN 46R in its entirety as of December 31, 2003 (even though adoption for non-SPEs was not required until March 31, 2004).

During
2003, the FASB also issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities", which we have adopted as of July 1, 2003.

For
more detailed information regarding any of these pronouncements and the impact thereof on our business, see Note 2Summary of Significant Accounting Policies to our Consolidated
Financial Statements.

10

---

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We use various financial instruments, particularly interest rate swaps and also interest rate caps to manage and reduce the interest rate risk related specifically to our
asset-backed securities.

We
are exclusively an end user of these instruments, which are commonly referred to as derivatives. We do not engage in trading, market-making, or other speculative activities in the derivatives
markets. More detailed information about these financial instruments is provided in Note 13Financial Instruments to our Consolidated Financial Statements.

Our
principal market exposures are to interest rate movements both in one country, as well as relative interest rate movements between countries. Our primary interest rate exposures are to interest
rate fluctuations in the United States, specifically LIBOR and commercial paper interest rates due to their impact on variable rate borrowings. We anticipate that such interest rates will remain a
primary market exposure for the foreseeable future.

We
assess our market risk based on changes in interest rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential impact in earnings, fair values and cash flows based on a
hypothetical 10% change (increase and decrease) in interest rates.

We
use a duration-based model in determining the impact of interest rate shifts on our debt portfolio and interest rate derivatives portfolios. The primary assumption used in this model is that a 10%
increase or decrease in the benchmark interest rate produces a parallel shift in the yield curve across all maturities.

Our
total market risk is influenced by a wide variety of factors including the volatility present within the markets and the liquidity of the markets. There are certain limitations inherent in the
sensitivity analyses presented. While probably the most meaningful analysis, these "shock tests" are constrained by several factors, including the necessity to conduct the analysis based on a single
point in time and the
inability to include the complex market reactions that normally would arise from the market shifts modeled.

We
used December 31, 2003, 2002 and 2001 market rates on our instruments to perform the sensitivity analyses separately for our market risk exposures. The estimates are based on the market risk
sensitive portfolios and assume instantaneous, parallel shifts in interest rate yield curves.

We
have determined that the impact of a 10% change in interest rates and prices on our earnings, fair values and cash flows would not be material.

While
these results may be used as benchmarks, they should not be viewed as forecasts.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Financial Statements and Financial Statement Index commencing on page F-1 hereof.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.    CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures.    The Company's management, with the participation of the Company's President and Senior
Vice President and Controller, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company's President
and Senior Vice President and Controller have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.

11

---

(b)Internal Control Over Financial Reporting.    There have not been any changes in the Company's internal control over
financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company's fiscal fourth quarter that have materially
affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Omitted pursuant to General Instruction I(2) of Form 10-K.

ITEM 11.    EXECUTIVE COMPENSATION

Omitted pursuant to General Instruction I(2) of Form 10-K.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Omitted pursuant to General Instruction I(2) of Form 10-K.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Omitted pursuant to General Instruction I(2) of Form 10-K.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

As a wholly-owned subsidiary of Cendant Corporation, the audit committee of Cendant also serves the audit committee function for our company.

Principal Accounting Firm Fees.Cendant pays fees billed by our auditors as set forth in Cendant Corporation's Annual Proxy Statement under
the section title "Ratification of Appointment of Auditors." Set forth below is the portion of such fees that we paid directly for the years ended December 31, 2003 and 2002:



Pre-approval Policies and Procedures.The information required by Item 14 of this Form 10-K, including the
audit committee's pre-approval policies and the procedures regarding the engagement of the auditors, is incorporated herein by reference from Cendant Corporation's Annual Proxy Statement
under the section title "Ratification of Appointment of Auditors."

12

---

PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

ITEM 15(A)(1)    FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

None.

ITEM 15(A)(3)    EXHIBITS

See Exhibit Index commencing on page G-1 hereof.

ITEM 15(B)    REPORTS ON FORM 8-K

None.

13

---



SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

| |  | AVIS GROUP HOLDINGS, INC.
| |  | -------------------------
| |  | By:                      

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.

|Signature                               |  | Title                                |  | Date          
|--------------------------------------- |  | ------------------------------------ |  | --------------
|                                        |  |                                      |  |               
|/s/KEVIN M. SHEEHAN(Kevin M. Sheehan)   |  | President and Director               |  | March 23, 2004
|/s/KURT FREUDENBERG(Kurt Freudenberg)   |  | Senior Vice President and Controller |  | March 23, 2004
|/s/F. ROBERT SALERNO(F. Robert Salerno) |  | Director                             |  | March 23, 2004

14

---



INDEX TO FINANCIAL STATEMENTS

|                                                                                                                                                                                                                |  | Page
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|Independent Auditors' Report                                                                                                                                                                                    |  | F-2 
|Consolidated Statements of Operations for the years ended December 31, 2003 and 2002, the period March 1, 2001 (Date of Acquisition) to December 31, 2001, and the two months ended February 28, 2001           |  | F-3 
|Consolidated Balance Sheets as of December 31, 2003 and 2002                                                                                                                                                    |  | F-4 
|Consolidated Statements of Cash Flows for the years ended December 31, 2003, December 31, 2002, the period March 1, 2001 (Date of Acquisition) to December 31, 2001, and the two months ended February 28, 2001 |  | F-5 
|Consolidated Statements of Stockholder's Equity for the years ended December 31, 2003 and 2002, the period March 1, 2001 (Date of Acquisition) to December 31, 2001, and the two months ended February 28, 2001 |  | F-7 
|Notes to the Consolidated Financial Statements                                                                                                                                                                  |  | F-8 

F-1

---



INDEPENDENT AUDITORS' REPORT

Independent
Auditors' Report
To the Board of Directors and Stockholder of
Avis Group Holdings, Inc.
Parsippany, New Jersey

We
have audited the accompanying consolidated balance sheets of Avis Group Holdings, Inc. and subsidiaries (successor to Avis Rent A Car System, Inc. and subsidiaries, Avis Fleet Leasing
and Management Corp., and subsidiaries and Reserve Claims Management Co., collectively the "Predecessor Companies") (collectively referred to as the "Company") as of December 31, 2003 and 2002,
and the related consolidated statements of operations, stockholders' equity, and cash flows for the years ended December 31, 2003 and 2002 and for the period March 1, 2001 (Date of
Acquisition) to December 31, 2001 and as to the Predecessor Companies, the consolidated statements of operations, stockholder's equity and cash flows for the period January 1, 2001 to
February 28, 2001. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial
statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the 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, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2003 and 2002, and the results of its
operations and its cash flows for the years ended December 31, 2003 and 2002, and for the period March 1, 2001 (Date of Acquisition) to December 31, 2001, and with respect to the
Predecessor Companies, the results of its
operations and its cash flows for the period January 1, 2001 to February 28, 2001, in conformity with accounting principles generally accepted in the United States of America.

As
discussed in Note 2 to the consolidated financial statements, on January 1, 2003, the Company adopted the fair value method of accounting for stock-based compensation, and during
2003, the Company adopted the consolidation provisions for variable interest entities. Also, as discussed in Note 2, on January 1, 2002, the Company adopted the
non-amortization provisions for goodwill and other indefinite lived intangible assets. Also, as discussed in Note 2, on January 1, 2001, the Company modified the accounting
for derivative instruments and hedging activities.

/s/
Deloitte & Touche LLP
New York, New York
March 17, 2004

F-2

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousands)

|                                                            |                                             |   |           |           |   |           |           | Predecessor
Companies |          
|----------------------------------------------------------- | ------------------------------------------- | - | --------- | --------- | - | --------- | --------- | --------------------- | ---------
|
|Revenues                                                    |                                             | $ | 2,972,655 |           | $ | 2,608,277 |           | $                     | 2,082,786
|Expenses                                                    |                                             |   |           |           |   |           |           |                       |          
|                                                            | Operating, net                              |   |           | 1,138,137 |   |           | 1,115,776 |                       |          
|                                                            | Vehicle depreciation and lease charges, net |   |           | 938,017   |   |           | 663,793   |                       |          
|                                                            | Selling, general and administrative         |   |           | 452,629   |   |           | 460,474   |                       |          
|                                                            | Vehicle interest, net                       |   |           | 248,770   |   |           | 205,521   |                       |          
|                                                            | Non-vehicle interest                        |   |           | 39,279    |   |           | 41,502    |                       |          
|                                                            | Non-vehicle depreciation and amortization   |   |           | 42,042    |   |           | 37,297    |                       |          
|                                                            | Unusual charges                             |   |           |          |   |           |          |                       |          
|                                                            |                                             |   |           |           |   |           |           |                       |          
|Total expenses                                              |                                             |   | 2,858,874 |           |   | 2,524,363 |           |                       | 2,152,636
|                                                            |                                             |   |           |           |   |           |           |                       |          
|Income (loss) before income taxes                           |                                             |   | 113,781   |           |   | 83,914    |           |                       | (69,850  
|Provision (benefit) for income taxes                        |                                             |   | 39,050    |           |   | 31,468    |           |                       | (14,085  
|                                                            |                                             |   |           |           |   |           |           |                       |          
|Income (loss) from continuing operations                    |                                             |   | 74,731    |           |   | 52,446    |           |                       | (55,765  
|Income from discontinued operations, net of tax             |                                             |   |          |           |   |          |           |                       |         
|                                                            |                                             |   |           |           |   |           |           |                       |          
|Income (loss) before cumulative effect of accounting change |                                             |   | 74,731    |           |   | 52,446    |           |                       | (55,765  
|Cumulative effect of accounting change, net of tax          |                                             |   |          |           |   |          |           |                       |         
|                                                            |                                             |   |           |           |   |           |           |                       |          
|Net income (loss)                                           |                                             | $ | 74,731    |           | $ | 52,446    |           | $                     | (55,765  
|                                                            |                                             |   |           |           |   |           |           |                       |          

See Notes to Consolidated Financial Statements.

F-3

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATED BALANCE SHEETS  (In thousands, except share data)

|                                                                     |                                                                            | December 31, |          
|-------------------------------------------------------------------- | -------------------------------------------------------------------------- | ------------ | ---------
|
|ASSETS                                                               |                                                                            |              |          
|                                                                     | Cash and cash equivalents                                                  |              | $        
|                                                                     | Restricted cash                                                            |              |          
|                                                                     | Receivables (net of allowance for doubtful accounts of $5,671 and $3,625)  |              |          
|                                                                     | Prepaid expenses                                                           |              |          
|                                                                     | Deferred income taxes                                                      |              |          
|                                                                     | Property and equipment, net                                                |              |          
|                                                                     | Goodwill                                                                   |              |          
|                                                                     | Other assets                                                               |              |          
|                                                                     |                                                                            |              |          
|Total assets exclusive of assets under management programs           |                                                                            |              | 2,315,928
|                                                                     |                                                                            |              |          
|Assets under management programs:                                    |                                                                            |              |          
|                                                                     | Program cash                                                               |              |          
|                                                                     | Vehicles, net                                                              |              |          
|                                                                     | Due from vehicle manufacturers, net                                        |              |          
|                                                                     | Investment in AESOP Funding II, LLCrelated party                          |              |          
|                                                                     |                                                                            |              |          
|                                                                     |                                                                            |              | 6,199,586
|                                                                     |                                                                            |              |          
|Total assets                                                         |                                                                            | $            | 8,515,514
|                                                                     |                                                                            |              |          
|LIABILITIES AND STOCKHOLDER'S EQUITY                                 |                                                                            |              |          
|Liabilities:                                                         |                                                                            |              |          
|                                                                     | Accounts payable                                                           |              | $        
|                                                                     | Accrued liabilities                                                        |              |          
|                                                                     | Due to Cendant Corporation and affiliates, net                             |              |          
|                                                                     | Non-vehicle debt                                                           |              |          
|                                                                     | Public liability, property damage and other insurance liabilities          |              |          
|                                                                     |                                                                            |              |          
|Total liabilities exclusive of liabilities under management programs |                                                                            |              | 2,106,422
|                                                                     |                                                                            |              |          
|Liabilities under management programs:                               |                                                                            |              |          
|                                                                     | Vehicle debt                                                               |              |          
|                                                                     | Debt due to AESOP Funding II, LLCrelated party                            |              |          
|Deferred income taxes                                                |                                                                            |              | 26,713   
|                                                                     |                                                                            |              |          
|                                                                     |                                                                            |              | 5,891,897
|                                                                     |                                                                            |              |          
|Commitments and contingencies (Note 17)                              |                                                                            |              |          
|Stockholder's equity:                                                |                                                                            |              |          
|                                                                     | Common stock, $.01 par valueauthorized 10,000 shares; issued 5,537 shares |              |          
|                                                                     | Additional paid-in-capital                                                 |              |          
|                                                                     | Retained earnings                                                          |              |          
|                                                                     | Accumulated other comprehensive income (loss)                              |              |          
|                                                                     |                                                                            |              |          
|Total stockholder's equity                                           |                                                                            |              | 517,195  
|                                                                     |                                                                            |              |          
|Total liabilities and stockholder's equity                           |                                                                            | $            | 8,515,514
|                                                                     |                                                                            |              |          

See Notes to Consolidated Financial Statements.

F-4

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATED STATEMENTS OF CASH FLOWS        (In thousands)

|                                                                                                                                                           |                                                                                                        |                                                       |                     |         |            |            |         | Predecessor
Companies |         
|---------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | ----------------------------------------------------- | ------------------- | ------- | ---------- | ---------- | ------- | --------------------- | --------
|
|Operating Activities                                                                                                                                       |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|Net income (loss)                                                                                                                                          |                                                                                                        | $                                                     | 74,731              |         | $          | 52,446     |         | $                     | (55,765 
|Adjustments to arrive at income (loss) from continuing operations                                                                                          |                                                                                                        |                                                       |                    |         |            |           |         |                       |        
|                                                                                                                                                           |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|Income (loss) from continuing operations                                                                                                                   |                                                                                                        |                                                       | 74,731              |         |            | 52,446     |         |                       | (55,765 
|Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in) operating activities exclusive of management programs: |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|                                                                                                                                                           | Non-vehicle depreciation and amortization                                                              |                                                       |                     | 42,042  |            |            | 37,297  |                       |         
|                                                                                                                                                           | Net change in operating assets and liabilities, excluding the impact of acquisitions and dispositions: |                                                       |                     |         |            |            |         |                       |         
|                                                                                                                                                           |                                                                                                        |                                                       | Receivables         |         |            | 15,165     |         |                       | 8,927   
|                                                                                                                                                           |                                                                                                        |                                                       | Accounts payable    |         |            | (1,019     | )       |                       | 35,870  
|                                                                                                                                                           |                                                                                                        |                                                       | Accrued liabilities |         |            | (39,806    | )       |                       | (36,808 
|                                                                                                                                                           |                                                                                                        |                                                       | Other, net          |         |            | (9,176     | )       |                       | (10,210 
|                                                                                                                                                           |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|Net cash provided by (used in) operating activities exclusive of management programs                                                                       |                                                                                                        |                                                       | 81,937              |         |            | 87,522     |         |                       | (126,200
|                                                                                                                                                           |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|Management programs:                                                                                                                                       |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|                                                                                                                                                           | Vehicle depreciation                                                                                   |                                                       |                     | 884,242 |            |            | 633,223 |                       |         
|                                                                                                                                                           |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|Net cash provided by operating activities                                                                                                                  |                                                                                                        |                                                       | 966,179             |         |            | 720,745    |         |                       | 397,942 
|                                                                                                                                                           |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|Investing Activities                                                                                                                                       |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|Property and equipment additions                                                                                                                           |                                                                                                        |                                                       | (66,258             | )       |            | (77,137    | )       |                       | (50,146 
|Property and equipment disposals                                                                                                                           |                                                                                                        |                                                       | 20,235              |         |            | 7,484      |         |                       | 18,853  
|Payment for purchase of rental car franchise licensees                                                                                                     |                                                                                                        |                                                       | (208                | )       |            | (16,629    | )       |                       | (28,614 
|                                                                                                                                                           |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|Net cash used in investing activities exclusive of management programs                                                                                     |                                                                                                        |                                                       | (46,231             | )       |            | (86,282    | )       |                       | (59,907 
|                                                                                                                                                           |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|Management programs:                                                                                                                                       |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|                                                                                                                                                           |                                                                                                        | Decrease (increase) in restricted cash                |                     |         | (96,798    | )          |         | 578,725               |         
|                                                                                                                                                           |                                                                                                        | Decrease (increase) in due from vehicle manufacturers |                     |         | (122,818   | )          |         | (165,439              | )       
|                                                                                                                                                           |                                                                                                        | Investment in vehicles                                |                     |         | (9,516,025 | )          |         | (6,026,285            | )       
|                                                                                                                                                           |                                                                                                        | Payments received on investment in vehicles           |                     |         | 7,452,149  |            |         | 4,527,767             |         
|                                                                                                                                                           |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|                                                                                                                                                           |                                                                                                        |                                                       | (2,283,492          | )       |            | (1,085,232 | )       |                       | (406,234
|                                                                                                                                                           |                                                                                                        |                                                       |                     |         |            |            |         |                       |         
|Net cash used in investing activities                                                                                                                      |                                                                                                        |                                                       | (2,329,723          | )       |            | (1,171,514 | )       |                       | (466,141
|                                                                                                                                                           |                                                                                                        |                                                       |                     |         |            |            |         |                       |         

F-5

---



|                                                                                     |                                  |   |           |            |   |         |            | Predecessor
Companies |         
|------------------------------------------------------------------------------------ | -------------------------------- | - | --------- | ---------- | - | ------- | ---------- | --------------------- | --------
|
|Financing Activities                                                                 |                                  |   |           |            |   |         |            |                       |         
|Proceeds from borrowings                                                             |                                  |   |          |            |   |        |            |                       | 140,000 
|Principal payments on borrowings                                                     |                                  |   | (181,346  | )          |   | (28,774 | )          |                       | (458,186
|Increase (decrease) in due to Cendant Corporation and affiliates, net                |                                  |   | 182,321   |            |   | 35,103  |            |                       | 503,086 
|Issuance of common stock                                                             |                                  |   |          |            |   |        |            |                       |        
|                                                                                     |                                  |   |           |            |   |         |            |                       |         
|Net cash provided by (used in) financing activities exclusive of management programs |                                  |   | 975       |            |   | 6,329   |            |                       | 184,900 
|                                                                                     |                                  |   |           |            |   |         |            |                       |         
|Management programs:                                                                 |                                  |   |           |            |   |         |            |                       |         
|                                                                                     | Proceeds from borrowings         |   |           | 4,421,918  |   |         | 2,258,737  |                       |         
|                                                                                     | Principal payments on borrowings |   |           | (2,953,338 | ) |         | (1,796,243 | )                     |         
|                                                                                     | Payments for debt issuance costs |   |           | (16,043    | ) |         | (6,566     | )                     |         
|                                                                                     |                                  |   |           |            |   |         |            |                       |         
|                                                                                     |                                  |   | 1,452,537 |            |   | 455,928 |            |                       | (168,651
|                                                                                     |                                  |   |           |            |   |         |            |                       |         
|Net cash provided by financing activities                                            |                                  |   | 1,453,512 |            |   | 462,257 |            |                       | 16,249  
|                                                                                     |                                  |   |           |            |   |         |            |                       |         
|Effect of changes in net assets of discontinued operations                           |                                  |   |          |            |   |        |            |                       |        
|Effect of changes in exchange rates on cash and cash equivalents                     |                                  |   | 659       |            |   | 453     |            |                       | (844    
|                                                                                     |                                  |   |           |            |   |         |            |                       |         
|Net increase (decrease) in cash and cash equivalents                                 |                                  |   | 90,627    |            |   | 11,941  |            |                       | (52,794 
|Cash and cash equivalents, beginning of period                                       |                                  |   | 25,252    |            |   | 13,311  |            |                       | 66,105  
|                                                                                     |                                  |   |           |            |   |         |            |                       |         
|Cash and cash equivalents, end of period                                             |                                  | $ | 115,879   |            | $ | 25,252  |            | $                     | 13,311  
|                                                                                     |                                  |   |           |            |   |         |            |                       |         
|Supplemental disclosure of Cash Flow Information                                     |                                  |   |           |            |   |         |            |                       |         
|Interest payments                                                                    |                                  | $ | 270,898   |            | $ | 262,103 |            | $                     | 248,125 
|Income tax payments, net                                                             |                                  | $ | 11,739    |            | $ | 10,256  |            | $                     | 13,482  

See Notes to Consolidated Financial Statements.

F-6

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY        (In thousands)

|                                                                                                  |  | Common
Stock |      | Additional
Paid-in
Capital |   | Retained
Earnings |   | Accumulated
Other
Comprehensive
Income (Loss) |         | Treasury
Stock |   | Total   |  
|------------------------------------------------------------------------------------------------- |  | ------------ | ---- | -------------------------- | - | ----------------- | - | --------------------------------------------- | ------- | -------------- | - | ------- | -
|PREDECESSOR COMPANIES                                                                             |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|Balance, January 1, 2001                                                                          |  | $            | 359  |                            | $ | 593,829           |   | $                                             | 277,460 |                | $ | (19,996 | )
|Comprehensive loss:                                                                               |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|Net loss for the two months ended February 28, 2001                                               |  |              |     |                            |   |                  |   |                                               | (29,119 | )              |   |        |  
|Currency translation adjustment, net of tax of ($1,124)                                           |  |              |     |                            |   |                  |   |                                               |        |                |   | (1,758  | )
|Cumulative effect from change in accounting policy for derivative instruments, net of tax of $936 |  |              |     |                            |   |                  |   |                                               |        |                |   | 1,464   |  
|Unrealized gains on cash flow hedges, net of tax of $252                                          |  |              |     |                            |   |                  |   |                                               |        |                |   | 561     |  
|Total comprehensive loss                                                                          |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|Preferred stock dividends                                                                         |  |              |     |                            |   |                  |   |                                               | (3,270  | )              |   |        |  
|Exercise of stock options                                                                         |  |              |     |                            |   | 30                |   |                                               |        |                |   |        |  
|                                                                                                  |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|Balance, February 28, 2001                                                                        |  |              | 359  |                            |   | 593,859           |   |                                               | 245,071 |                |   | (19,729 | )
|SUCCESSOR COMPANY                                                                                 |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|Recapitalization of equity due to acquisition of Company by Cendant Corporation                   |  |              | (359 | )                          |   | (550,027          | ) |                                               |        |                |   | 19,729  |  
|Forgiveness of intercompany debt by Cendant Corporation                                           |  |              |     |                            |   | 125,000           |   |                                               |        |                |   |        |  
|Comprehensive loss:                                                                               |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|Net loss for the period March 1, 2001 (Date of Acquisition) to December 31, 2001                  |  |              |     |                            |   |                  |   |                                               | (55,765 | )              |   |        |  
|Currency translation adjustment, net of tax of ($1,587)                                           |  |              |     |                            |   |                  |   |                                               |        |                |   | (2,469  | )
|Unrealized losses on cash flow hedges, net of tax of ($22,110)                                    |  |              |     |                            |   |                  |   |                                               |        |                |   | (34,583 | )
|Total comprehensive loss                                                                          |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|                                                                                                  |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|Balance, December 31, 2001                                                                        |  |              |     |                            |   | 168,832           |   |                                               | 189,306 |                |   | (37,052 | )
|Comprehensive income:                                                                             |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|Net income                                                                                        |  |              |     |                            |   |                  |   |                                               | 52,446  |                |   |        |  
|Currency translation adjustment, net of tax of $2,561                                             |  |              |     |                            |   |                  |   |                                               |        |                |   | 4,006   |  
|Unrealized losses on cash flow hedges, net of tax of ($9,062)                                     |  |              |     |                            |   |                  |   |                                               |        |                |   | (14,380 | )
|Additional minimum pension liability, net of tax of ($11,367)                                     |  |              |     |                            |   |                  |   |                                               |        |                |   | (17,785 | )
|Total comprehensive income                                                                        |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|                                                                                                  |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|Balance, December 31, 2002                                                                        |  |              |     |                            |   | 168,832           |   |                                               | 241,752 |                |   | (65,211 | )
|Comprehensive income:                                                                             |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|Net income                                                                                        |  |              |     |                            |   |                  |   |                                               | 74,731  |                |   |        |  
|Currency translation adjustment, net of tax of $9                                                 |  |              |     |                            |   |                  |   |                                               |        |                |   | 38,647  |  
|Unrealized gain on cash flow hedges, net of tax of $28,103                                        |  |              |     |                            |   |                  |   |                                               |        |                |   | 44,141  |  
|Additional minimum pension liability, net of tax of $9,149                                        |  |              |     |                            |   |                  |   |                                               |        |                |   | 14,303  |  
|Total comprehensive income                                                                        |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|                                                                                                  |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  
|Balance, December 31, 2003                                                                        |  | $            |     |                            | $ | 168,832           |   | $                                             | 316,483 |                | $ | 31,880  |  
|                                                                                                  |  |              |      |                            |   |                   |   |                                               |         |                |   |         |  

See Notes to Consolidated Financial Statements.

F-7

---



Avis Group Holdings, Inc. and Subsidiaries  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Unless otherwise noted, all dollar amounts are in thousands, except per share amounts)

1.     Basis of Presentation



2.     Summary of Siginficant Accounting Policies



F-8

---



F-9

---



Predecessor
CompaniesYear Ended
December 31,
2003

Year Ended
December 31,
2002

March 1, 2001
(Date of Acquisition)
to
December 31, 2001

Two Months
Ended
February 28,
2001Reported net income (loss)

$
74,731

$
52,446

$
(55,765
)
$
(29,119
)Add back: Stock-based employee compensation expense included in net income, net of tax (a)


735








Less: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax (b)


(3,397
)

(18,018
)

(5,400
)

(1,719
)Pro forma net income (loss)

$
72,069

$
34,428

$
(61,165
)
$
(30,838
)






F-10

---



F-11

---



F-12

---



F-13

---



3.     Unusual Charges



4.     Acquisitions and Dispositions



F-14

---

5.     Income Taxes



Predecessor
CompaniesYear Ended
December 31,
2003

Year Ended
December 31,
2002

March 1, 2001
(Date of Acquisition)
to
December 31, 2001

Two Months
Ended
February 28,
2001CurrentFederal

$
87,313

$
(3,289
)
$


$
State


4,643


5,007





200Foreign


10,719


11,435


12,380


1,564102,675


13,153


12,380


1,764DeferredFederal


(60,394
)

21,000


(23,247
)

(14,602
)State


(2,446
)

(2,685
)

(1,243
)

(2,828
)Foreign


(785
)




(1,975
)

(117
)(63,625
)

18,315


(26,465
)

(17,547
)Provision (benefit) for income taxes

$
39,050

$
31,468

$
(14,085
)
$
(15,783
)




Predecessor
CompaniesYear Ended
December 31,
2003

Year Ended
December 31,
2002

March 1, 2001
(Date of Acquisition)
to
December 31, 2001

Two Months
Ended
February 28,
2001Domestic

$
77,916


48,225

$
(94,664
)
$
(45,983
)Foreign


35,865


35,689


24,814


3,746Pre-tax income (loss)

$
113,781

$
83,914

$
(69,850
)
$
(42,237
)


F-15

---

Deferred income tax assets and liabilities are comprised of the following:

December 31,
2003

December 31,
2002Deferred income tax assetsAccrued liabilities

$
159,814

$
241,678Public liability, property damage and other insurance liabilities


57,494


59,015Net operating loss carryforwards


11,769


199,852Alternative minimum income tax credit carryforwards


7,781


7,781Investment tax credit carryforward





2,265Valuation allowance(a)


(9,830
)

(18,265
)227,028


492,326Deferred income tax liabilityDepreciation


14,976


4,393Prepaid expense and other


7,658


6,59822,634


10,991Net deferred income tax assets

$
204,394

$
481,335Management program deferred income tax liabilityVehicle depreciation and other

$
26,713

$
288,005




F-16

---





Predecessor
CompaniesYear Ended
December 31,
2003

Year Ended
December 31,
2002

March 1, 2001
(Date of Acquisition)
to
December 31, 2001

Two Months
Ended
February 28,
2001Federal statutory rate

35.0
%
35.0
%
35.0
%
35.0
%Taxes on foreign operations at rates different than U.S. federal statutory rates

(2.3
)
(1.3
)
(1.8
)
(0.3
)Amortization of non-deductible goodwill





(12.9
)
(1.3
)State income taxes, net of federal tax

1.3

3.3

1.2

4.0Other

0.3

0.5

(1.3
)
34.3
%
37.5
%
20.2
%
37.4
%


6.     Property and Equipment, net



December 31,
2003

December 31,
2002Land

$
23,128

$
23,755Buildings and leasehold improvements


176,863


147,292Buses and support vehicles


77,557


79,648Furniture, fixtures and equipment


110,546


84,095Construction-in-progress


20,455


21,120408,549


355,910Less: accumulated depreciation and amortization


(115,247
)

(77,080
)$
293,302

$
278,830


F-17

---

7.     Vehicles, net



December 31,
2003

December 31,
2002Rental vehicles

$
5,805,287

$
4,415,761Vehicles held for sale


57,981


144,2835,863,268


4,560,044Less: accumulated depreciation


(433,543
)

(386,197
)$
5,429,725

$
4,173,847




Predecesor
CompaniesYear Ended
December 31,
2003

Year Ended
December 31,
2002

March 1, 2001
(Date of Acquisition)
to
December 31, 2001

Two Months
Ended
February 28,
2001Depreciation expense (a)

$
884,242

$
633,223

$
524,142

$
104,336Lease charges


26,208


25,525


27,292


3,821Losses on sales of vehicles, net (b)


27,567


5,045


27,216


1,960$
938,017

$
663,793

$
578,650

$
110,117






F-18

---



8.     Intangible Assets



December 31, 2003

December 31, 2002Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
AmortizationAmortized Intangible AssetsCustomer lists

$
18,952

$
2,720

$
18,952

$
1,760Unamortized Intangible AssetsGoodwill

$
1,305,962




$
1,254,401




Balance as of January 1, 2003

$
1,254,401Goodwill acquired during 2003


158Adjustments to goodwill acquired in 2001


50,510Foreign currency translation


893Balance as of December 31, 2003

$
1,305,962




Predecessor
CompaniesMarch 1, 2001
(Date of Acquisition)
to
December 31, 2001

Two Months
Ended
February 28,
2001Reported net loss

$
(55,765
)
$
(29,119
)Add back: Goodwill amortization, net of tax


22,987


1,307Pro forma net loss

$
(32,778
)
$
(27,812
)


F-19

---

9.     Accrued Liabilities



December 31,
2003

December 31,
2002Payroll and related costs

$
100,641

$
120,260Taxes, other than income taxes


24,330


34,709Facility related


37,770


36,295Interest


12,837


15,748Sales and marketing


40,317


32,178Other


136,620


175,819$
352,515

$
415,009




Personnel
Related

Asset Fair
Value
Adjustments

Facility
Related

TotalCosts

$
35,925

$
19,480

$
7,692

$
63,097Cash payments


(19,444
)




(136
)

(19,580
)Other reductions





(18,674
)




(18,674
)Balance at December 31, 2001


16,481


806


7,556


24,843Cash payments


(20,284
)

(886
)

(2,349
)

(23,519
)Other additions


8,325


80





8,405Balance at December 31, 2002


4,522





5,207


9,729Cash payments


(2,909
)




(2,477
)

(5,386
)Balance at December 31, 2003

$
1,613

$


$
2,730

$
4,343




F-20

---

10.   Due to Cendant Corporation and Affiliates, net



December 31,
2003

December 31,
2002Due to Cendant-working capital and trading, net (a)

$
253,647

$
253,032Due from Cendant-demand-long-term (b)





(155,246
)Due to Cendant-long-term (c)


588,277


408,108Due to other Cendant affiliates, net (d)


49,310


55,467Due from Budget (e)


(65,826
)

(9,552
)Total due to Cendant Corporation and affiliates, net

$
825,408

$
551,809




Predecessor
CompaniesYear Ended
December 31,
2003

Year Ended
December 31,
2002

March 1, 2001
(Date of Acquisition)
to
December 31, 2001

Two Months
Ended
February 28,
2001Royalties (a)

$
110,023

$
109,072

$
85,002

$
16,205Reservations (a)


48,056


56,230


45,763


8,496Data processing (b)


33,411


36,044


50,723


11,395Rent, corporate overhead allocations and other (b)


63,921


57,317


34,662


1,456Interest on amounts due to Cendant Corporation and affiliates, net (c)


14,602


13,171


15,103


Total

$
270,013

$
271,834

$
231,253

$
37,552






F-21

---

11.   Non-Vehicle Debt



December 31,
2003

December 31,
200211% senior subordinated notes

$
332,892

$
530,146Other


4,494


4,085$
337,386

$
534,231






As of
December 31,
2003

As of
December 31,
2002AESOP Funding Program:Variable funding rental car asset-backed notes

$


$
494,000Auction rate rental car asset-backed notes





185,000Medium term rental car asset-backed notes





3,349,795Debt due to AESOP Fundingrelated party


5,541,870


Other


323,314


216,908$
5,865,184

$
4,245,703




F-22

---



Year

Amount2004

$
903,7452005


1,499,8482006


1,458,7752007


813,4462008


874,772Thereafter


314,598$
5,865,184


13.   Financial Instruments



F-23

---



December 31, 2003

December 31, 2002Carrying
Amount

Estimated
Fair
Value

Carrying
Amount

Estimated
Fair
ValueAssetsCash and cash equivalents

$
115,879

$
115,879

$
25,252

$
25,252Restricted cash


83,634


83,643


59,012


59,012Non-vehicle debt


337,386


340,329


534,231


524,770Derivatives assetsInterest rate caps


1,480


1,480


17,473


17,473Assets under management programsProgram cash


23,311


23,311


2,462


2,462Liabilities under management programsVehicle debt, excluding interest rates swaps and caps


270,835


272,192


4,148,159


4,203,094Interest rate swaps and caps


52,479


52,479


97,544


97,544Due to AESOP Fundingrelated party


5,541,870


5,541,870








F-24

---

14.   Accumulated Other Comprehensive Income (Loss)



Currency
Translation
Adjustments

Unrealized
Gains/(Losses)
on Cash Flow
Hedges

Minimum
Pension
Liability
Adjustments

Accumulated
Other
Comprehensive
Income (Loss)Balance, January 1, 2001

$
(18,571
)
$


$
(1,425
)
$
(19,996
)Current period change


(1,758
)

2,025





267Balance February 28, 2001


(20,329
)

2,025


(1,425
)

(19,729
)Recapitalization of equity


20,329


(2,025
)

1,425


19,729Current period change


(2,469
)

(34,583
)




(37,052
)Balance, December 31, 2001


(2,469
)

(34,583
)




(37,052
)Current period change


4,006


(14,380
)

(17,785
)

(28,159
)Balance, December 31, 2002


1,537


(48,963
)

(17,785
)

(65,211
)Current period change


38,647


44,141


14,303


97,091Balance, December 31, 2003

$
40,184

$
(4,822
)
$
(3,482
)
$
31,880


15.   Stock-Based Compensation



Options

Weighted Average
Exercise PriceBalance at January 1, 2001

7,547,876

$
21.73Exercised

(6,480
)

32.76Forfeited

(6,830
)

32.76Exchanged for cash in connection with the acquisition of the Company by Cendant

(6,741,559
)

21.63Converted at March 1, 2001

793,007

$
21.63




F-25

---



Options

Weighted Average
Exercise PriceBalance at March 1, 2001

2,530,813

$
28.44Converted at March 1, 2001

1,958,729


8.76Granted at fair market value

3,134,050


13.90Exercised

(134,388
)

10.30Forfeited

(67,766
)

15.06Balance at December 31, 2001

7,421,438


17.55Granted at fair market value

1,970,552


19.03Exercised

(167,184
)

11.68Forfeited

(1,124,284
)

15.99Balance at December 31, 2002

8,100,522


18.36Granted at fair market value

15,728


16.50Exercised

(1,175,006
)

12.24Forfeited

(350,709
)

26.75Net transfers

1,010,502


17.40Balance at December 31, 2003

7,601,037

$
18.51




Outstanding Options

Exercisable OptionsRange of
Exercise
Prices

Number of
Options

Weighted Average
Remaining
Contractual Life

Weighted Average
Exercise Price

Number of
Options

Weighted Average
Exercise
Price$
0.01 to $10.00

402,190

4.6

$
8.81

233,324

$
8.38$
10.01 to $20.00

5,522,420

6.0


16.22

4,815,530


16.59$
20.01 to $30.00

654,102

4.4


22.82

654,102


22.82$
30.01 to $40.00

1,022,325

3.8


31.94

1,022,325


31.947,601,037

5.2

$
18.51

6,725,281

$
19.25




F-26

---





Year Ended
December 31, 2003

Year Ended
December 31, 2002

Period March 1, 2001
(Date of Acquisition) to
December 31, 2001Dividend yield





Expected volatility

49.0
%
50.0
%
50.0
%Risk-free interest rate

2.4
%
4.2
%
4.4
%Expected holding period (years)

3.6

4.5

4.5






F-27

---



17.   Commitments and Contingencies



Year

Amount2004


192,0232005


148,0932006


117,5702007


102,1852008


64,927Thereafter


218,177$
842,975




F-28

---



18.   Segment Information



United
States

Australia/
New
Zealand

Canada

All Other
Countries

TotalYear Ended December 31, 2003Revenues

$
2,636,816

$
166,203

$
134,647

$
34,989

$
2,972,655Total assets


7,883,681


138,003


443,320


50,510


8,515,514Net property and equipment


274,990


8,342


9,010


960


293,302Year Ended December 31, 2002Revenues

$
2,339,821

$
124,522

$
114,634

$
29,300

$
2,608,277Total assets


6,254,413


103,419


241,343


198,468


6,797,643Net property and equipment


264,092


6,712


6,727


1,299


278,830Period March 1, 2001 (Date of Acquisition) to December 31, 2001Revenues

$
1,873,548

$
86,930

$
96,440

$
25,868

$
2,082,786PREDECESSOR COMPANIESTwo Months Ended February 28, 2001Revenues

$
359,253

$
22,237

$
13,716

$
6,659

$
401,865


F-29

---

19.   Guarantor and Non-Guarantor Condensed Consolidating Financial Statements



F-30

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS  For the Year Ended December 31, 2003

|                                                        |                                             | Parent |         | Guarantor
Subsidiaries |   | Non-
Guarantor
Subsidiaries |         | Eliminations |         | Avis Group
Holdings, Inc.
Consolidated
|------------------------------------------------------- | ------------------------------------------- | ------ | ------- | ---------------------- | - | --------------------------- | ------- | ------------ | ------- | --------------------------------------
|Revenues                                                |                                             | $      |        |                        | $ | 2,640,656                   |         | $            | 331,999 |                                       
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       
|Expenses                                                |                                             |        |         |                        |   |                             |         |              |         |                                       
|                                                        | Operating, net                              |        |         |                       |   |                             | 979,145 |              |         | 158,992                               
|                                                        | Vehicle depreciation and lease charges, net |        |         |                       |   |                             | 861,237 |              |         | 76,780                                
|                                                        | Selling, general and administrative         |        |         |                       |   |                             | 411,192 |              |         | 41,437                                
|                                                        | Vehicle interest, net                       |        |         | 13,836                 |   |                             | 231,111 |              |         | 3,823                                 
|                                                        | Non-vehicle interest                        |        |         | 25,311                 |   |                             | 13,968  |              |         |                                      
|                                                        | Non-vehicle depreciation and amortization   |        |         | 960                    |   |                             | 37,962  |              |         | 3,120                                 
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       
|Total expenses                                          |                                             |        | 40,107  |                        |   | 2,534,615                   |         |              | 284,152 |                                       
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       
|Income (loss) before equity in earnings of subsidiaries |                                             |        | (40,107 | )                      |   | 106,041                     |         |              | 47,847  |                                       
|Equity in earnings of subsidiaries                      |                                             |        | 90,288  |                        |   | 31,426                      |         |              |        |                                       
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       
|Income before income taxes                              |                                             |        | 50,181  |                        |   | 137,467                     |         |              | 47,847  |                                       
|Provision (benefit) for income taxes                    |                                             |        | (24,550 | )                      |   | 47,179                      |         |              | 16,421  |                                       
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       
|Net income                                              |                                             | $      | 74,731  |                        | $ | 90,288                      |         | $            | 31,426  |                                       
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       

Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS  For the Year Ended December 31, 2002

|                                                        |                                             | Parent |         | Guarantor
Subsidiaries |   | Non-
Guarantor
Subsidiaries |         | Eliminations |         | Avis Group
Holdings, Inc.
Consolidated
|------------------------------------------------------- | ------------------------------------------- | ------ | ------- | ---------------------- | - | --------------------------- | ------- | ------------ | ------- | --------------------------------------
|Revenues                                                |                                             | $      |        |                        | $ | 2,339,819                   |         | $            | 268,458 |                                       
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       
|Expenses                                                |                                             |        |         |                        |   |                             |         |              |         |                                       
|                                                        | Operating, net                              |        |         |                       |   |                             | 992,310 |              |         | 123,466                               
|                                                        | Vehicle depreciation and lease charges, net |        |         |                       |   |                             | 602,369 |              |         | 61,424                                
|                                                        | Selling, general and administrative         |        |         |                       |   |                             | 427,177 |              |         | 33,297                                
|                                                        | Vehicle interest, net                       |        |         | 13,836                 |   |                             | 189,774 |              |         | 1,911                                 
|                                                        | Non-vehicle interest                        |        |         | 28,878                 |   |                             | 12,624  |              |         |                                      
|                                                        | Non-vehicle depreciation and amortization   |        |         | 960                    |   |                             | 33,405  |              |         | 2,932                                 
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       
|Total expenses                                          |                                             |        | 43,674  |                        |   | 2,257,659                   |         |              | 223,030 |                                       
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       
|Income (loss) before equity in earnings of subsidiaries |                                             |        | (43,674 | )                      |   | 82,160                      |         |              | 45,428  |                                       
|Equity in earnings of subsidiaries                      |                                             |        | 69,095  |                        |   | 28,392                      |         |              |        |                                       
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       
|Income before income taxes                              |                                             |        | 25,421  |                        |   | 110,552                     |         |              | 45,428  |                                       
|Provision (benefit) for income taxes                    |                                             |        | (27,025 | )                      |   | 41,457                      |         |              | 17,036  |                                       
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       
|Net income                                              |                                             | $      | 52,446  |                        | $ | 69,095                      |         | $            | 28,392  |                                       
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                       

F-31

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS  For the period March 1, 2001 (Date of Acquisition) to December 31, 2001

|                                                        |                                             | Parent |         | Guarantor
Subsidiaries |   | Non-
Guarantor
Subsidiaries |         | Eliminations |         | Avis Group
Holdings, Inc.
Consolidated |  
|------------------------------------------------------- | ------------------------------------------- | ------ | ------- | ---------------------- | - | --------------------------- | ------- | ------------ | ------- | -------------------------------------- | -
|Revenues                                                |                                             | $      |        |                        | $ | 1,873,547                   |         | $            | 209,239 |                                        | $
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                        |  
|Expenses                                                |                                             |        |         |                        |   |                             |         |              |         |                                        |  
|                                                        | Operating, net                              |        |         |                       |   |                             | 754,392 |              |         | 96,204                                 |  
|                                                        | Vehicle depreciation and lease charges, net |        |         |                       |   |                             | 528,309 |              |         | 50,341                                 |  
|                                                        | Selling, general and administrative         |        |         |                       |   |                             | 364,810 |              |         | 24,893                                 |  
|                                                        | Vehicle interest, net                       |        |         | 11,530                 |   |                             | 173,859 |              |         | 2,941                                  |  
|                                                        | Non-vehicle interest                        |        |         | 26,949                 |   |                             | 16,396  |              |         |                                       |  
|                                                        | Non-vehicle depreciation and amortization   |        |         | 17,329                 |   |                             | 33,345  |              |         | 2,779                                  |  
|                                                        | Unusual charges                             |        |         | 2,132                  |   |                             | 45,182  |              |         | 1,245                                  |  
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                        |  
|Total expenses                                          |                                             |        | 57,940  |                        |   | 1,916,293                   |         |              | 178,403 |                                        |  
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                        |  
|Income (loss) before equity in earnings of subsidiaries |                                             |        | (57,940 | )                      |   | (42,746                     | )       |              | 30,836  |                                        |  
|Equity in earnings (losses) of subsidiaries             |                                             |        | (14,475 | )                      |   | 24,607                      |         |              |        |                                        |  
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                        |  
|Income (loss) before income taxes                       |                                             |        | (72,415 | )                      |   | (18,139                     | )       |              | 30,836  |                                        |  
|Provision (benefit) for income taxes                    |                                             |        | (16,650 | )                      |   | (3,664                      | )       |              | 6,229   |                                        |  
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                        |  
|Net income (loss)                                       |                                             | $      | (55,765 | )                      | $ | (14,475                     | )       | $            | 24,607  |                                        | $
|                                                        |                                             |        |         |                        |   |                             |         |              |         |                                        |  

Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS  (Predecessor Companies)  For the Two Months Ended February 28, 2001

|                                                            |                                             | Parent |         | Guarantor
Subsidiaries |   | Non-
Guarantor
Subsidiaries |         | Eliminations |        | Avis Group
Holdings, Inc.
Consolidated |  
|----------------------------------------------------------- | ------------------------------------------- | ------ | ------- | ---------------------- | - | --------------------------- | ------- | ------------ | ------ | -------------------------------------- | -
|Revenues                                                    |                                             | $      |        |                        | $ | 359,253                     |         | $            | 42,612 |                                        | $
|                                                            |                                             |        |         |                        |   |                             |         |              |        |                                        |  
|Expenses                                                    |                                             |        |         |                        |   |                             |         |              |        |                                        |  
|                                                            | Operating, net                              |        |         |                       |   |                             | 169,504 |              |        | 20,627                                 |  
|                                                            | Vehicle depreciation and lease charges, net |        |         |                       |   |                             | 100,718 |              |        | 9,399                                  |  
|                                                            | Selling, general and administrative         |        |         |                       |   |                             | 77,866  |              |        | 5,363                                  |  
|                                                            | Vehicle interest, net                       |        |         | 2,306                  |   |                             | 40,375  |              |        | 944                                    |  
|                                                            | Non-vehicle interest                        |        |         | 9,167                  |   |                             |        |              |        |                                       |  
|                                                            | Non-vehicle depreciation and amortization   |        |         |                       |   |                             | 7,282   |              |        | 551                                    |  
|                                                            |                                             |        |         |                        |   |                             |         |              |        |                                        |  
|Total expenses                                              |                                             |        | 11,473  |                        |   | 395,745                     |         |              | 36,884 |                                        |  
|                                                            |                                             |        |         |                        |   |                             |         |              |        |                                        |  
|Income (loss) before equity in earnings of subsidiaries     |                                             |        | (11,473 | )                      |   | (36,492                     | )       |              | 5,728  |                                        |  
|Equity in earnings (losses) of subsidiaries                 |                                             |        | (25,645 | )                      |   | 9,950                       |         |              |       |                                        |  
|                                                            |                                             |        |         |                        |   |                             |         |              |        |                                        |  
|Income (loss) before income taxes                           |                                             |        | (37,118 | )                      |   | (26,542                     | )       |              | 5,728  |                                        |  
|Provision (benefit) for income taxes                        |                                             |        | (7,999  | )                      |   | (9,926                      | )       |              | 2,142  |                                        |  
|                                                            |                                             |        |         |                        |   |                             |         |              |        |                                        |  
|Income (loss) from continuing operations                    |                                             |        | (29,119 | )                      |   | (16,616                     | )       |              | 3,586  |                                        |  
|Income (loss) from discontinued operations, net of tax      |                                             |        |        |                        |   | (6,358                      | )       |              | 11,305 |                                        |  
|                                                            |                                             |        |         |                        |   |                             |         |              |        |                                        |  
|Income (loss) before cumulative effect of accounting change |                                             |        | (29,119 | )                      |   | (22,974                     | )       |              | 14,891 |                                        |  
|Cumulative effect of accounting change, net of tax          |                                             |        |        |                        |   | (2,671                      | )       |              | (4,941 | )                                      |  
|                                                            |                                             |        |         |                        |   |                             |         |              |        |                                        |  
|Net income (loss)                                           |                                             | $      | (29,119 | )                      | $ | (25,645                     | )       | $            | 9,950  |                                        | $
|                                                            |                                             |        |         |                        |   |                             |         |              |        |                                        |  

F-32

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATING CONDENSED BALANCE SHEET  December 31, 2003

|                                           |                                                                      | Parent                                            |           | Guarantor
Subsidiaries |   | Non-
Guarantor
Subsidiaries |           | Eliminations |           | Avis Group
Holdings, Inc.
Consolidated
|------------------------------------------ | -------------------------------------------------------------------- | ------------------------------------------------- | --------- | ---------------------- | - | --------------------------- | --------- | ------------ | --------- | --------------------------------------
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|ASSETS                                     |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|                                           | Cash and cash equivalents                                            |                                                   | $         |                       |   | $                           | 8,203     |              | $         | 107,676                               
|                                           | Restricted cash                                                      |                                                   |           |                       |   |                             | 171       |              |           | 83,463                                
|                                           | Receivables                                                          |                                                   |           |                       |   |                             | 152,069   |              |           | 33,853                                
|                                           | Prepaid expenses                                                     |                                                   |           |                       |   |                             | 36,966    |              |           | 10,610                                
|                                           | Deferred income taxes                                                |                                                   |           | (111,010               | ) |                             | 315,273   |              |           | 131                                   
|                                           | Property and equipment, net                                          |                                                   |           |                       |   |                             | 274,987   |              |           | 18,315                                
|                                           | Investment in consolidated subsidiaries                              |                                                   |           | 952,544                |   |                             | 615,100   |              |           |                                      
|                                           | Goodwill                                                             |                                                   |           | 835,236                |   |                             | 466,277   |              |           | 4,449                                 
|                                           | Other assets                                                         |                                                   |           | 14,101                 |   |                             | 51,772    |              |           | 13,386                                
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|                                           | Total assets exclusive of assets under management programs           |                                                   |           | 1,690,871              |   |                             | 1,920,818 |              |           | 271,883                               
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|                                           | Assets under management programs:                                    |                                                   |           |                        |   |                             |           |              |           |                                       
|                                           |                                                                      | Program cash                                      |           |                        |  |                             |           | 210          |           |                                       
|                                           |                                                                      | Vehicles, net                                     |           |                        |  |                             |           | (112,357     | )         |                                       
|                                           |                                                                      | Due from vehicle manufacturers                    |           |                        |  |                             |           | 4,131        |           |                                       
|                                           |                                                                      | Investment in AESOP Funding II, LLC-related party |           |                        |  |                             |           |             |           |                                       
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|                                           |                                                                      |                                                   |          |                        |   | (108,016                    | )         |              | 6,307,602 |                                       
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|Total assets                               |                                                                      | $                                                 | 1,690,871 |                        | $ | 1,812,802                   |           | $            | 6,579,485 |                                       
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|LIABILITIES AND STOCKHOLDER'S EQUITY       |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|Liabilities:                               |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|                                           | Accounts payable                                                     |                                                   | $         | (272,734               | ) | $                           | 440,016   |              | $         | 194,374                               
|                                           | Accrued liabilities                                                  |                                                   |           | 5,700                  |   |                             | 314,381   |              |           | 32,434                                
|                                           | Due to (from) Cendant Corporation and affiliates, net                |                                                   |           | 1,107,818              |   |                             | (80,757   | )            |           | (201,653                              
|                                           | Non-vehicle debt                                                     |                                                   |           | 332,892                |   |                             | 4,494     |              |           |                                      
|                                           | Public liability, property damage and other insurance liabilities    |                                                   |           |                       |   |                             | 133,943   |              |           | 95,514                                
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|                                           | Total liabilities exclusive of liabilities under management programs |                                                   |           | 1,173,676              |   |                             | 812,077   |              |           | 120,669                               
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|Liabilities under management programs:     |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|                                           | Vehicle debt                                                         |                                                   |           |                       |   |                             | 52,479    |              |           | 270,835                               
|                                           | Debt due to AESOP Funding II, LLC-related party                      |                                                   |           |                       |   |                             |          |              |           | 5,541,870                             
|                                           | Deferred income taxes                                                |                                                   |           |                       |   |                             | (4,298    | )            |           | 31,011                                
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|                                           |                                                                      |                                                   |          |                        |   | 48,181                      |           |              | 5,843,716 |                                       
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|Stockholder's equity                       |                                                                      |                                                   | 517,195   |                        |   | 952,544                     |           |              | 615,100   |                                       
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       
|Total liabilities and stockholder's equity |                                                                      | $                                                 | 1,690,871 |                        | $ | 1,812,802                   |           | $            | 6,579,485 |                                       
|                                           |                                                                      |                                                   |           |                        |   |                             |           |              |           |                                       

F-33

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATING CONDENSED BALANCE SHEET  December 31, 2002

|                                           |                                                                      | Parent                         |           | Guarantor
Subsidiaries |   | Non-
Guarantor
Subsidiaries |           | Eliminations |           | Avis Group
Holdings, Inc.
Consolidated
|------------------------------------------ | -------------------------------------------------------------------- | ------------------------------ | --------- | ---------------------- | - | --------------------------- | --------- | ------------ | --------- | --------------------------------------
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|ASSETS                                     |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|                                           | Cash and cash equivalents                                            |                                | $         | 69                     |   | $                           | 10,886    |              | $         | 14,297                                
|                                           | Restricted cash                                                      |                                |           |                       |   |                             |          |              |           | 59,012                                
|                                           | Receivables                                                          |                                |           |                       |   |                             | 122,436   |              |           | 36,294                                
|                                           | Prepaid expenses                                                     |                                |           |                       |   |                             | 40,113    |              |           | 9,685                                 
|                                           | Deferred income tax                                                  |                                |           | 157,713                |   |                             | 315,856   |              |           | 7,766                                 
|                                           | Property and equipment, net                                          |                                |           |                       |   |                             | 264,091   |              |           | 14,739                                
|                                           | Investment in consolidated subsidiaries                              |                                |           | 746,729                |   |                             | 664,644   |              |           |                                      
|                                           | Goodwill                                                             |                                |           | 801,243                |   |                             | 449,760   |              |           | 3,398                                 
|                                           | Other assets                                                         |                                |           | 15,059                 |   |                             | 15,903    |              |           | 24,555                                
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|                                           | Total assets exclusive of assets under management programs           |                                |           | 1,720,813              |   |                             | 1,883,689 |              |           | 169,746                               
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|                                           | Assets under management programs:                                    |                                |           |                        |   |                             |           |              |           |                                       
|                                           |                                                                      | Program cash                   |           |                        |  |                             |           | 83           |           |                                       
|                                           |                                                                      | Vehicles, net                  |           |                        |  |                             |           | (102,326     | )         |                                       
|                                           |                                                                      | Due from vehicle manufacturers |           |                        |  |                             |           | 20,758       |           |                                       
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|                                           |                                                                      |                                |          |                        |   | (81,485                     | )         |              | 4,516,253 |                                       
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|Total assets                               |                                                                      | $                              | 1,720,813 |                        | $ | 1,802,204                   |           | $            | 4,685,999 |                                       
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|LIABILITIES AND STOCKHOLDER'S EQUITY       |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|Liabilities:                               |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|                                           | Accounts payable                                                     |                                | $         | (78,584                | ) | $                           | 418,917   |              | $         | (134,606                              
|                                           | Accrued liabilities                                                  |                                |           | 8,683                  |   |                             | 379,090   |              |           | 27,236                                
|                                           | Due to (from) Cendant Corporation and affiliates, net                |                                |           | 908,508                |   |                             | 11,997    |              |           | (368,696                              
|                                           | Non-vehicle debt                                                     |                                |           | 530,146                |   |                             | 4,085     |              |           |                                      
|                                           | Public liability, property damage and other insurance liabilities    |                                |           |                       |   |                             | 142,423   |              |           | 69,363                                
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|                                           | Total liabilities exclusive of liabilities under management programs |                                |           | 1,368,753              |   |                             | 956,512   |              |           | (406,703                              
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|Liabilities under management programs:     |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|                                           | Vehicle debt                                                         |                                |           |                       |   |                             | 97,544    |              |           | 4,148,159                             
|                                           | Deferred income taxes                                                |                                |           | 6,687                  |   |                             | 1,419     |              |           | 279,899                               
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|                                           |                                                                      |                                | 6,687     |                        |   | 98,963                      |           |              | 4,428,058 |                                       
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|Stockholder's equity                       |                                                                      |                                | 345,373   |                        |   | 746,729                     |           |              | 664,644   |                                       
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       
|Total liabilities and stockholder's equity |                                                                      | $                              | 1,720,813 |                        | $ | 1,802,204                   |           | $            | 4,685,999 |                                       
|                                           |                                                                      |                                |           |                        |   |                             |           |              |           |                                       

F-34

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS  For the Year Ended December 31, 2003

|                                                                                     |                                                                                                                             | Parent |          | Guarantor
Subsidiaries |   | Non-
Guarantor
Subsidiaries |          | Eliminations |            | Avis Group
Holdings, Inc.
Consolidated |  
|------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------- | ------ | -------- | ---------------------- | - | --------------------------- | -------- | ------------ | ---------- | -------------------------------------- | -
|Operating Activities                                                                 |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Net income                                                                           |                                                                                                                             | $      | 74,731   |                        | $ | 90,288                      |          | $            | 31,426     |                                        | $
|                                                                                     | Adjustments to reconcile net income to net cash provided by (used in) operating activities exclusive of management programs |        |          | (2,842                 | ) |                             | 85,701   |              |            | (75,653                                | )
|Investment in subsidiaries                                                           |                                                                                                                             |        | (90,288  | )                      |   | (31,426                     | )        |              |           |                                        |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Net cash provided by (used in) operating activities exclusive of management programs |                                                                                                                             |        | (18,399  | )                      |   | 144,563                     |          |              | (44,227    | )                                      |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Management programs:                                                                 |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|                                                                                     | Vehicle depreciation                                                                                                        |        |          |                       |   |                             | 823,779  |              |            | 60,463                                 |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Net cash provided by (used in) operating activities                                  |                                                                                                                             |        | (18,399  | )                      |   | 968,342                     |          |              | 16,236     |                                        |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Investing Activities                                                                 |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Property and equipment additions                                                     |                                                                                                                             |        |         |                        |   | (54,756                     | )        |              | (11,502    | )                                      |  
|Property and equipment disposals                                                     |                                                                                                                             |        |         |                        |   | 6,797                       |          |              | 13,438     |                                        |  
|Payments for purchase of rental car franchise licensees                              |                                                                                                                             |        |         |                        |   |                            |          |              | (208       | )                                      |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Net cash provided by (used in) investing activities exclusive of management programs |                                                                                                                             |        |         |                        |   | (47,959                     | )        |              | 1,728      |                                        |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Management programs:                                                                 |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|                                                                                     | Increase in program cash                                                                                                    |        |          |                       |   |                             | (127     | )            |            | (96,671                                | )
|                                                                                     | Decrease (increase) in due from vehicle manufacturers                                                                       |        |          |                       |   |                             | 16,627   |              |            | (139,445                               | )
|                                                                                     | Investment in vehicles                                                                                                      |        |          |                       |   |                             | 142,506  |              |            | (9,658,531                             | )
|                                                                                     | Payments received (made) on investment in vehicles                                                                          |        |          |                       |   |                             | (972,910 | )            |            | 8,425,059                              |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|                                                                                     |                                                                                                                             |        |         |                        |   | (813,904                    | )        |              | (1,469,588 | )                                      |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Net cash used in investing activities                                                |                                                                                                                             |        |         |                        |   | (861,863                    | )        |              | (1,467,860 | )                                      |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Financing Activities                                                                 |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Net decrease in non-vehicle debt                                                     |                                                                                                                             |        | (180,981 | )                      |   | (365                        | )        |              |           |                                        |  
|Increase (decrease) in due to Cendant Corporation and affiliates, net                |                                                                                                                             |        | 199,311  |                        |   | (92,754                     | )        |              | 75,764     |                                        |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Net cash provided by (used in) financing activities exclusive of management programs |                                                                                                                             |        | 18,330   |                        |   | (93,119                     | )        |              | 75,764     |                                        |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Management programs:                                                                 |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|                                                                                     | Net increase in vehicle debt                                                                                                |        |          |                       |   |                             |         |              |            | 1,468,580                              |  
|                                                                                     | Payments for debt issuance costs                                                                                            |        |          |                       |   |                             | (16,043  | )            |            |                                       |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|                                                                                     |                                                                                                                             |        |         |                        |   | (16,043                     | )        |              | 1,468,580  |                                        |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Net cash provided by (used in) financing activities                                  |                                                                                                                             |        | 18,330   |                        |   | (109,162                    | )        |              | 1,544,344  |                                        |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Effect of changes in exchange rates on cash a cash equivalents                       |                                                                                                                             |        |         |                        |   |                            |          |              | 659        |                                        |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Net increase (decrease) in cash and cash equivalents                                 |                                                                                                                             |        | (69      | )                      |   | (2,683                      | )        |              | 93,379     |                                        |  
|Cash and cash equivalents, beginning of year                                         |                                                                                                                             |        | 69       |                        |   | 10,886                      |          |              | 14,297     |                                        |  
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  
|Cash and cash equivalents, end of year                                               |                                                                                                                             | $      |         |                        | $ | 8,203                       |          | $            | 107,676    |                                        | $
|                                                                                     |                                                                                                                             |        |          |                        |   |                             |          |              |            |                                        |  

F-35

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS  For the Year Ended December 31, 2002

|                                                                                                                            |                                                    | Parent |          | Guarantor
Subsidiaries |   | Non-
Guarantor
Subsidiaries |          | Eliminations |          | Avis Group
Holdings, Inc.
Consolidated |  
|--------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | ------ | -------- | ---------------------- | - | --------------------------- | -------- | ------------ | -------- | -------------------------------------- | -
|Operating Activities                                                                                                        |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Net income                                                                                                                  |                                                    | $      | 52,446   |                        | $ | 69,095                      |          | $            | 28,392   |                                        | $
|Adjustments to reconcile net income to net cash provided by (used in) operating activities exclusive of management programs |                                                    |        | (154,860 | )                      |   | (86,950                     | )        |              | 276,886  |                                        |  
|Investment in subsidiaries                                                                                                  |                                                    |        | (69,095  | )                      |   | (28,392                     | )        |              |         |                                        |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash provided by (used in) operating activities exclusive of management programs                                        |                                                    |        | (171,509 | )                      |   | (46,247                     | )        |              | 305,278  |                                        |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Management programs:                                                                                                        |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|                                                                                                                            | Vehicle depreciation                               |        |          |                       |   |                             | 587,616  |              |          | 45,607                                 |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash provided by (used in) operating activities                                                                         |                                                    |        | (171,509 | )                      |   | 541,369                     |          |              | 350,885  |                                        |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Investing Activities                                                                                                        |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Property and equipment additions                                                                                            |                                                    |        |         |                        |   | (73,457                     | )        |              | (3,680   | )                                      |  
|Property and equipment disposals                                                                                            |                                                    |        |         |                        |   | 6,121                       |          |              | 1,363    |                                        |  
|Payments for purchase of rental car franchise licensees                                                                     |                                                    |        |         |                        |   | (16,281                     | )        |              | (348     | )                                      |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash used in investing activities exclusive of management programs                                                      |                                                    |        |         |                        |   | (83,617                     | )        |              | (2,665   | )                                      |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Management programs:                                                                                                        |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|                                                                                                                            | Decrease in program cash                           |        |          |                       |   |                             | 9,374    |              |          | 569,351                                |  
|                                                                                                                            | Increase in due from vehicle manufacturers         |        |          |                       |   |                             | (12,903  | )            |          | (152,536                               | )
|                                                                                                                            | Investment in vehicles                             |        |          |                       |   |                             | (90,236  | )            |          | (5,936,049                             | )
|                                                                                                                            | Payments received (made) on investment in vehicles |        |          |                       |   |                             | (508,151 | )            |          | 5,035,918                              |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|                                                                                                                            |                                                    |        |         |                        |   | (601,916                    | )        |              | (483,316 | )                                      |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash used in investing activities                                                                                       |                                                    |        |         |                        |   | (685,533                    | )        |              | (485,981 | )                                      |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Financing Activities                                                                                                        |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Net decrease in non-vehicle debt                                                                                            |                                                    |        | (28,141  | )                      |   | (633                        | )        |              |         |                                        |  
|Increase (decrease) in due to Cendant Corporation and affiliates, net                                                       |                                                    |        | 199,701  |                        |   | 157,039                     |          |              | (321,637 | )                                      |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash provided by (used in) financing activities exclusive of management programs                                        |                                                    |        | 171,560  |                        |   | 156,406                     |          |              | (321,637 | )                                      |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Management programs:                                                                                                        |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|                                                                                                                            | Net increase in vehicle debt                       |        |          |                       |   |                             |         |              |          | 462,494                                |  
|                                                                                                                            | Payments for debt issuance costs                   |        |          |                       |   |                             | (6,566   | )            |          |                                       |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|                                                                                                                            |                                                    |        |         |                        |   | (6,566                      | )        |              | 462,494  |                                        |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash provided by financing activities                                                                                   |                                                    |        | 171,560  |                        |   | 149,840                     |          |              | 140,857  |                                        |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Effect of changes in exchange rates on cash a cash equivalents                                                              |                                                    |        |         |                        |   |                            |          |              | 453      |                                        |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Net increase in cash and cash equivalents                                                                                   |                                                    |        | 51       |                        |   | 5,676                       |          |              | 6,214    |                                        |  
|Cash and cash equivalents, beginning of year                                                                                |                                                    |        | 18       |                        |   | 5,210                       |          |              | 8,083    |                                        |  
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  
|Cash and cash equivalents, end of year                                                                                      |                                                    | $      | 69       |                        | $ | 10,886                      |          | $            | 14,297   |                                        | $
|                                                                                                                            |                                                    |        |          |                        |   |                             |          |              |          |                                        |  

F-36

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS  Period March 1, 2001 (Date of Acquisition) to December 31, 2001

|                                                                                                                                   |                                                       | Parent |          | Guarantor
Subsidiaries |   | Non-
Guarantor
Subsidiaries |          | Eliminations |          | Avis Group
Holdings, Inc.
Consolidated |  
|---------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | ------ | -------- | ---------------------- | - | --------------------------- | -------- | ------------ | -------- | -------------------------------------- | -
|Operating Activities                                                                                                               |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Net income (loss)                                                                                                                  |                                                       | $      | (55,765  | )                      | $ | (14,475                     | )        | $            | 24,607   |                                        | $
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities exclusive of management programs |                                                       |        | (152,228 | )                      |   | 120,251                     |          |              | (38,458  | )                                      |  
|Investment in subsidiaries                                                                                                         |                                                       |        | 14,475   |                        |   | (24,607                     | )        |              |         |                                        |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash provided by (used in) operating activities exclusive of management programs                                               |                                                       |        | (193,518 | )                      |   | 81,169                      |          |              | (13,851  | )                                      |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Management programs:                                                                                                               |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|                                                                                                                                   | Vehicle depreciation                                  |        |          |                       |   |                             | 486,722  |              |          | 37,420                                 |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash provided by (used in) operating activities                                                                                |                                                       |        | (193,518 | )                      |   | 567,891                     |          |              | 23,569   |                                        |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Investing Activities                                                                                                               |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Property and equipment additions                                                                                                   |                                                       |        |         |                        |   | (47,550                     | )        |              | (2,596   | )                                      |  
|Property and equipment disposals                                                                                                   |                                                       |        |         |                        |   | 15,285                      |          |              | 3,568    |                                        |  
|Payment for purchase of rental car franchise licensees                                                                             |                                                       |        |         |                        |   | (27,936                     | )        |              | (678     | )                                      |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash provided by (used in) investing activities exclusive of management programs                                               |                                                       |        |         |                        |   | (60,201                     | )        |              | 294      |                                        |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Management programs:                                                                                                               |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|                                                                                                                                   | Increase in program cash                              |        |          |                       |   |                             | (9,457   | )            |          | (457,539                               | )
|                                                                                                                                   | (Increase) decrease in due from vehicle manufacturers |        |          |                       |   |                             | (2,064   | )            |          | 215,567                                |  
|                                                                                                                                   | Investment in vehicles                                |        |          |                       |   |                             | 39,005   |              |          | (4,202,139                             | )
|                                                                                                                                   | Payments received (made) on investment in vehicles    |        |          |                       |   |                             | (550,191 | )            |          | 4,560,584                              |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|                                                                                                                                   |                                                       |        |         |                        |   | (522,707                    | )        |              | 116,473  |                                        |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash provided by (used in) investing activities                                                                                |                                                       |        |         |                        |   | (582,908                    | )        |              | 116,767  |                                        |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Financing Activities                                                                                                               |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Net decrease in non-vehicle debt                                                                                                   |                                                       |        | (318,186 | )                      |   |                            |          |              |         |                                        |  
|Increase (decrease) in due to Cendant Corporation and affiliates, net                                                              |                                                       |        | 511,045  |                        |   | (2,196                      | )        |              | (5,763   | )                                      |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash provided by (used in) financing activities exclusive of management programs                                               |                                                       |        | 192,859  |                        |   | (2,196                      | )        |              | (5,763   | )                                      |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Management programs:                                                                                                               |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|                                                                                                                                   | Net increase (decrease) in vehicle debt               |        |          | 536                    |   |                             | (9,279   | )            |          | (154,865                               | )
|                                                                                                                                   | Payments for debt issuance costs                      |        |          |                       |   |                             | (5,043   | )            |          |                                       |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|                                                                                                                                   |                                                       |        | 536      |                        |   | (14,322                     | )        |              | (154,865 | )                                      |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Net cash provided by (used in) financing activities                                                                                |                                                       |        | 193,395  |                        |   | (16,518                     | )        |              | (160,628 | )                                      |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Effect of changes in exchange rates on cash and cash equivalents                                                                   |                                                       |        |         |                        |   |                            |          |              | (844     | )                                      |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Net decrease in cash and cash equivalents                                                                                          |                                                       |        | (123     | )                      |   | (31,535                     | )        |              | (21,136  | )                                      |  
|Cash and cash equivalents, beginning of period                                                                                     |                                                       |        | 141      |                        |   | 36,745                      |          |              | 29,219   |                                        |  
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  
|Cash and cash equivalents, end of period                                                                                           |                                                       | $      | 18       |                        | $ | 5,210                       |          | $            | 8,083    |                                        | $
|                                                                                                                                   |                                                       |        |          |                        |   |                             |          |              |          |                                        |  

F-37

---



Avis Group Holdings, Inc. and Subsidiaries  CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS  (Predecessor Companies)  For the Two Months Ended February 28, 2001

|                                                                                                                                                          |                                                    | Parent |         | Guarantor
Subsidiaries |   | Non-
Guarantor
Subsidiaries |         | Eliminations |          | Avis Group
Holdings, Inc.
Consolidated |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | ------ | ------- | ---------------------- | - | --------------------------- | ------- | ------------ | -------- | -------------------------------------- | -
|Operating Activities                                                                                                                                      |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Net income (loss)                                                                                                                                         |                                                    | $      | (29,119 | )                      | $ | (25,645                     | )       | $            | 9,950    |                                        | $
|Adjustments to arrive at income (loss) from continuing operations                                                                                         |                                                    |        |        |                        |   | 9,029                       |         |              | (6,364   | )                                      |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Income (loss) from continuing operations                                                                                                                  |                                                    |        | (29,119 | )                      |   | (16,616                     | )       |              | 3,586    |                                        |  
|Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in) operating activities exclusive of management programs |                                                    |        | 425     |                        |   | 77,124                      |         |              | (119,563 | )                                      |  
|Investment in subsidiaries                                                                                                                                |                                                    |        | 25,645  |                        |   | (9,950                      | )       |              |         |                                        |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Net cash provided by (used in) operating activities exclusive of management programs                                                                      |                                                    |        | (3,049  | )                      |   | 50,558                      |         |              | (115,977 | )                                      |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Management programs:                                                                                                                                      |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|                                                                                                                                                          | Vehicle depreciation                               |        |         |                       |   |                             | 96,394  |              |          | 7,942                                  |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Net cash provided by (used in) operating activities                                                                                                       |                                                    |        | (3,049  | )                      |   | 146,952                     |         |              | (108,035 | )                                      |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Investing Activities                                                                                                                                      |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Property and equipment additions                                                                                                                          |                                                    |        |        |                        |   | (5,169                      | )       |              | (652     | )                                      |  
|Property and equipment disposals                                                                                                                          |                                                    |        |        |                        |   | 165                         |         |              | 268      |                                        |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Net cash used in investing activities exclusive of management programs                                                                                    |                                                    |        |        |                        |   | (5,004                      | )       |              | (384     | )                                      |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Management programs:                                                                                                                                      |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|                                                                                                                                                          | Decrease in program cash                           |        |         |                       |   |                             |        |              |          | 10,978                                 |  
|                                                                                                                                                          | Decrease in due from vehicle manufacturers         |        |         |                       |   |                             |        |              |          | 16,368                                 |  
|                                                                                                                                                          | Investment in vehicles                             |        |         |                       |   |                             | 378     |              |          | (940,937                               | )
|                                                                                                                                                          | Payments received (made) on investment in vehicles |        |         |                       |   |                             | (82,703 | )            |          | 895,350                                |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|                                                                                                                                                          |                                                    |        |        |                        |   | (82,325                     | )       |              | (18,241  | )                                      |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Net cash used in investing activities                                                                                                                     |                                                    |        |        |                        |   | (87,329                     | )       |              | (18,625  | )                                      |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Financing Activities                                                                                                                                      |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Net decrease in non-vehicle debt                                                                                                                          |                                                    |        |        |                        |   | (77                         | )       |              |         |                                        |  
|Increase (decrease) in due to Cendant Corporation and affiliates, net                                                                                     |                                                    |        | (89,023 | )                      |   | 43,123                      |         |              | 82       |                                        |  
|Repurchase of common stock                                                                                                                                |                                                    |        | 140     |                        |   |                            |         |              |         |                                        |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Net cash provided by (used in) financing activities exclusive of management programs                                                                      |                                                    |        | (88,883 | )                      |   | 43,046                      |         |              | 82       |                                        |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Management programs:                                                                                                                                      |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|                                                                                                                                                          | Net (decrease) increase in vehicle debt            |        |         | 92,000                 |   |                             | (2      | )            |          | 9,209                                  |  
|                                                                                                                                                          | Payments for debt issuance costs                   |        |         |                       |   |                             | (12     | )            |          |                                       |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|                                                                                                                                                          |                                                    |        | 92,000  |                        |   | (14                         | )       |              | 9,209    |                                        |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Net cash provided by financing activities                                                                                                                 |                                                    |        | 3,117   |                        |   | 43,032                      |         |              | 9,291    |                                        |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Effect of changes in net assets of discontinued operations                                                                                                |                                                    |        |        |                        |   | (131,512                    | )       |              | 131,906  |                                        |  
|Effect of changes in exchange rates on cash a cash equivalents                                                                                            |                                                    |        |        |                        |   |                            |         |              | (11      | )                                      |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Net increase (decrease) in cash and cash equivalents                                                                                                      |                                                    |        | 68      |                        |   | (28,857                     | )       |              | 14,526   |                                        |  
|Cash and cash equivalents, beginning of period                                                                                                            |                                                    |        | 73      |                        |   | 65,602                      |         |              | 14,693   |                                        |  
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  
|Cash and cash equivalents, end of period                                                                                                                  |                                                    | $      | 141     |                        | $ | 36,745                      |         | $            | 29,219   |                                        | $
|                                                                                                                                                          |                                                    |        |         |                        |   |                             |         |              |          |                                        |  

*    *    *    *

F-38

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EXHIBIT INDEX

|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         |  | Certificate of Incorporation of Avis Rent A Car, Inc. (Incorporated by reference to the Company's Registration Statement on Form S-1, Registration No. 333-46737, dated February 23, 1998).                                                                                                                                                                                                                                
|3.2         |  | By-Laws of Avis Group Holdings, Inc. (Incorporated by reference to the Company's Registration Statement on Form S-1, Registration No. 333-46737, dated February 23, 1998).                                                                                                                                                                                                                                                 
|4.1         |  | Series 1997-2 Supplement, dated as of July 30, 1997 between AESOP Funding II L.L.C. and The Bank of New York, as Trustee, to the Amended and Restated Base Indenture, dated as of July 30, 1997, between AESOP
Funding II and The Bank of New York (Incorporated by reference to the Company's Registration Statement on Form S-1, Registration No. 333-28609, dated June 6, 1997).                                        
|4.2         |  | Amendment No. 1, dated as of November 19, 1999, to the Series 1997-2 Supplement, between AESOP Funding II L.L.C. and The Bank of New York, as Trustee, to the Amended and Restated Base Indenture, dated as of
July 30, 1997, between AESOP Funding II and the Bank of New York as trustee (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001).            
|4.3         |  | Amendment No. 2, dated as of June 21, 2001, to the Series 1997-2 Supplement, between AESOP Funding II L.L.C. and the Bank of New York, as Trustee, to the Amended and Restated Base Indenture, dated as of
July 30, 1997, between AESOP Funding II and the Bank of New York, as trustee (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001).               
|4.4         |  | Loan Agreement, dated as of July 30, 1997, between AESOP Leasing L.P., as borrower, and AESOP Funding II L.L.C., as lender (Incorporated by reference to the Company's Registration Statement on Form S-1,
Registration No. 333-28609, dated June 6, 1997).                                                                                                                                                                
|4.5         |  | Loan Agreement, dated as of July 30, 1997, between AESOP Leasing Corp II, as borrower, AESOP Leasing Corp., as permitted nominee of the borrower, and AESOP Funding II L.L.C., as lender (Incorporated by reference to
the Company's Registration Statement on Form S-1, Registration No. 333-28609, dated June 6, 1997).                                                                                                  
|4.6         |  | Master Motor Vehicle Finance Lease Agreement, dated as of July 30, 1997, by and among AESOP Leasing L.P., as lessor, Avis Rent A Car System, Inc., as lessee, individually and as the administrator and Avis Rent A Car,
Inc., as guarantor (Incorporated by reference to the Company's Registration Statement on Form S-1, Registration No. 333-28609, dated June 6, 1997).                                               
|4.7         |  | Master Motor Vehicle Operating Lease Agreement, dated as of July 30, 1997, by and among AESOP Leasing Corp. II, as lessor, Avis Rent A Car System, Inc., individually and as the administrator, certain Eligible Rental
Car Companies, as lessees, and Avis Rent A Car, Inc., as guarantor (Incorporated by reference to the Company's Registration Statement on Form S-1, Registration No. 333-28609, dated June 6, 1997).
|4.8         |  | Supplemental Indenture No. 1, dated as of July 31, 1998, to the Amended and Restated Base Indenture, dated as of July 30, 1997, between AESOP Funding II L.L.C., as issuer, and The Bank of New York, as
trustee (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998).                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                            

G-1

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|4.9  |  | Amendment No. 1, dated as of July 31, 1998, to Loan Agreement, dated as of July 30, 1997, between AESOP Leasing L.P., as borrower, and AESOP Funding II L.L.C., as lender. (Incorporated by reference to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998).                                                                                                                                                                                                
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.10 |  | Amendment No. 1, dated as of July 31, 1998, to Master Motor Vehicle Finance Lease Agreement, dated as of July 30, 1997, among AESOP Leasing L.P., as lessor, Avis Rent A Car Systems, Inc., as lessee
individually and as administrator, and Avis Rent A Car, Inc., as guarantor (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998).                                                                                          
|4.11 |  | Master Exchange Agreement, dated as of September 15, 1998, between AESOP Leasing L.P. and Bank One Texas, National Association (Incorporated by reference to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001).                                                                                                                                                                                                                                            
|4.12 |  | Intercreditor Agreement, dated as of September 15, 1998, by and among AESOP Funding II L.L.C., AESOP Leasing L.P., and Avis Rent A Car System, Inc., as administrator, The Bank of New York, as Trustee, Bank One, Texas,
 National Association, as intermediary and Credit Lyonnais New York Branch, as lender agent (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001).                                                     
|4.13 |  | Amended and Restated Administration Agreement, dated as of September 15, 1998, among AESOP Funding II L.L.C., AESOP Leasing L.P., AESOP Leasing Corp. II, Avis Rent A Car System, Inc., as administrator and The Bank of
New York, as Trustee (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001).                                                                                                                             
|4.14 |  | Receivables Financing Agreement, dated as of September 15, 1998, among Bank One, Texas, National Association, as intermediary, Atlantic Asset Securitization Corp., Lyon Short Term Funding Corp., Credit Lyonnais New
York Branch, as lender, as agent for the lenders, Atlantic and Lyon and the lenders' party to the Receivables Financing Agreement from time to time (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001).
|4.15 |  | Amended and Restated Loan Agreement, dated as of September 15, 1998, among AESOP Leasing L.P., as borrower, PV Holding Corp., as a permitted nominee of the borrower, Quartz Fleet Management, Inc., as a permitted
nominee of the borrower, and AESOP Funding II L.L.C., as issuer (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998).                                                                                       
|4.16 |  | Amended and Restated Master Motor Vehicle Operating Lease Agreement, dated as of September 15, 1998, among AESOP Leasing L.P., as lessor, Avis Rent Car System, Inc., individually and as administrator, certain
Eligible Rental Car Companies, as lessees, and Avis Rent A Car, Inc., as guarantor (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998).                                                                       
|4.17 |  | Supplemental Indenture No. 2, dated as of September 15, 1998, to Amended and Restated Base Indenture, dated as of July 30, 1997, between AESOP Funding II L.L.C., as issuer and The Bank of New York, as
Trustee (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998).                                                                                                                                                          
|4.18 |  | Indenture, dated as of June 30, 1999, among the Company, the subsidiary guarantors and The Bank of New York, as Trustee (Incorporated by reference to the Company's Registration Statement on Form S-4,
Registration No. 333-86269, dated August 31, 1999).                                                                                                                                                                                                                                    
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

G-2

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|4.19 |  | Exchange and Registration Rights Agreement, dated as of June 30, 1999, among the Company, the subsidiary guarantors, the initial purchasers and The Bank of New York, as Trustee (Incorporated by reference to the
Company's Registration Statement on Form S-4, Registration No. 333-86269, dated August 31, 1999).                                                                                                                                                                   
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.20 |  | Supplemental Indenture dated as of April 2, 2001 by and among Avis Group Holdings, Inc., the subsidiary guarantors and The Bank of New York, as Trustee (Incorporated by reference to the Company's Current Report on
Form 8-K, dated April 2, 2001).                                                                                                                                                                                                                                  
|4.21 |  | The Amended and Restated Series 1997-1 Supplement, dated as of June 29, 2001, between AESOP Funding II L.L.C. as issuer and The Bank of New York, as trustee, to the Amended and Restated Base Indenture, dated as
of July 30, 1997, between AESOP Funding II and The Bank of New York, as Trustee (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001).                                                                
|4.22 |  | The Amended and Restated Series 1998-1 Supplement, dated as of June, 2001, between AESOP Funding II L.L.C., as issuer, and The Bank of New York, as trustee and Series 1998-1 agent, to the Amended and Restated
Base Indenture, dated as of July 30, 1997, between AESOP Funding II L.L.C., as issuer, and The Bank of New York, as trustee (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2001).                      
|4.23 |  | The Amended and Restated Series 2000-1 Supplement, dated as of June, 2001, between AESOP Funding II L.L.C., as issuer, and The Bank of New York, as trustee and Series 2000-1 agent, to the Amended and Restated
Base Indenture, dated as of July 30, 1997, between AESOP Funding II L.L.C. as issuer, and The Bank of New York as trustee and Series 2000-1 agent (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2001).
|4.24 |  | The Amended and Restated Series 2000-2 Supplement, dated as of June, 2001, between AESOP Funding II L.L.C., as issuer and The Bank of New York, as trustee and Series 2000-2 agent, to the Amended and Restated
Base Indenture, dated as of July 30, 1997, between AESOP Funding II L.L.C. as issuer, and The Bank of New York as trustee and Series 2000-1 agent (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2001). 
|4.25 |  | The Amended and Restated Series 2000-3 Supplement, dated as of June 2001, between AESOP Funding II L.L.C. as issuer, and The Bank of New York, as trustee and Series 2000-3 agent, to the Amended and Restated Base
Indenture, dated as of July 30, 1997, between AESOP Funding II L.L.C. as issuer and The Bank of New York as trustee and Series 2000-1 agent (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2001).   
|4.26 |  | The Amended and Restated Series 2000-4 Supplement, dated as of June 2001, between AESOP Funding II L.L.C. as issuer and The Bank of New York, as trustee and Series 2000-4 agent, to the Amended and Restated Base
Indenture, dated as of July 30, 1997, between AESOP Funding II L.L.C., as issuer, and The Bank of New York as trustee and Series 2000-1 agent (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2001).  
|4.27 |  | The Amended and Restated Series 2001-1 Supplement dated as of June 2001, between AESOP Funding II L.L.C. as issuer, and The Bank of New York, as trustee and Series 2001-1 agent, to the Amended and Restated Base
Indenture, dated as of July 30, 1997, between ASOP Funding II L.L.C. as issuer, and The Bank of New York as trustee and Series 2000-1 agent (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2001).    
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

G-3

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|4.28 |  | The Amended and Restated Series 2001-2 Supplement, dated as of June, 2001, between AESOP Funding II L.L.C. as issuer, and The Bank of New York, as trustee and Series 2001-2 agent, to the Amended and Restated
Base Indenture, dated as of July 30, 1997, between AESOP Funding II L.L.C., as issuer, and The Bank of New York as trustee and Series 2000-1 agent (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2001).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Master License Agreement, dated as of July 30, 1997, among Cendant Car Rental, Inc., Avis Rent A Car System Inc. and Wizard Co., Inc, (Incorporated by reference to the Company's Registration Statement on
Form S-1, Registration No. 333-46737, dated February 23, 1998).                                                                                                                                                                                                            
|10.2 |  | Agreement and Plan of Merger dated November 11, 2000 by and among Cendant Corporation, PHH Corporation, Avis Acquisition Corp., and Avis Group Holdings, Inc. (Incorporated by reference to the Company's Current Report
on Form 8-K dated November 14, 2000).                                                                                                                                                                                                                         
|10.3 |  | Establishment of Arval/PHH Holdings, a joint venture company in the United Kingdom, by Avis Group Holdings, Inc. and BNP Paribas (Incorporated by reference to the Company's Current Report on Form 8-K dated
August 24, 2000).                                                                                                                                                                                                                                                        
|10.4 |  | Series 2002-1 Supplement dated as of July 25, 2002 to the Amended and Restated Based Indenture dated as of July 30, 1997 among AESOP Funding II L.L.C., as issuer, and The Bank of New York, as trustee
(Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002).                                                                                                                                                           
|10.5 |  | Series 2002-3 Supplement dated as of September 12, 2002 to the Amended and Restated Based Indenture dated as of July 30, 1997 among AESOP Funding II L.L.C., Avis Rent A Car System, Inc., Park Avenue
Receivables Corporation, JPMorgan Chase Bank and The Bank of New York, as trustee (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002).                                                                          
|10.6 |  | Amended and Restated Series 2002-2 Supplement dated as of November 22, 2002 to the Amended and Restated Base Indenture dated as of July 30, 1997 among AESOP Funding II L.L.C., Avis Rent A Car System, Inc.,
JPMorgan Chase Bank, Certain CP Conduit Purchasers, certain Funding Agents, certain APA banks, and The Bank of New York, as trustee (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
 2002).                
|10.7 |  | Series 2002-4 Supplement dated as of November 22, 2002 to the Amended and Restated Based, Indenture dated as of July 30, 1997 among AESOP Funding II L.L.C., Avis Rent A Car System, Inc., JPMorgan Chase Bank,
 Certain CP Conduit Purchasers, Certain Funding Agents, Certain APA Banks and The Bank of New York, as trustee (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002).                                    
|10.8 |  | Amendment No. 1, dated as November 22, 2002, to the Series 2002-3 Supplement, dated as of September 12, 2002, between AESOP Funding II L.L.C., Avis Rent A Car System, Inc., Park Avenue Receivables
Corporation, JPMorgan Chase Bank and The Bank of New York, as trustee, to the Amended and Restated Base Indenture, dated as of July 30, 1997 (Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2002).                 
|10.9 |  | Supplemental Indenture No. 4, dated as of November 22, 2002, to the Amended and Restated Base Indenture, dated as of July 30, 1997, between AESOP Funding II L.L.C. and The Bank of New York, as trustee
(Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002).                                                                                                                                                          
|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

G-4

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|10.10 |  | Master Motor Vehicle Operating Sublease Agreement, dated as of November 22, 2002, between Avis Rent A Car System, Inc. and Budget Rent A Car System, Inc., formerly known as Cherokee Acquisition Corporation
(Incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002).                                                                                                        
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.11 |  | Series 2003-2 Supplement dated as of March 6, 2003 to the Amended and Restated Base Indenture dated as of July 30, 1997, between AESOP Funding II L.L.C., as Issuer and The Bank of New York, as Trustee and
Series 2003-2 Agent (Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003).                                                                                  
|10.12 |  | Series 2003-1 Supplement dated as of January 28, 2003 to the Amended and Restated Base Indenture dated as of July 30, 1997 between AESOP Funding II LLC, as Issuer, Avis Rent A Car System, Inc., as
Administrator, Cendant Corporation, as Purchaser and The Bank of New York, as Trustee and Series 2003-1 Agent (Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2003).
|10.13 |  | Series 2003-1 Supplement, dated as of August 5, 2003, to the Amended and Restated Trust Indenture, dated as of June 30, 1997, between BNY Trust Company of Canada in its capacity as Trustee of Stars Trust
and Computershare Trust Company of Canada (Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2003).                                                         
|10.14 |  | Series 2003-3 Supplement, dated as of May 6, 2003, to the Amended and Restated Base Indenture, dated as of July 30, 1997, between The Bank of New York, as Trustee and Series 2003-3 Agent (Filed
herewith).                                                                                                                                                                                                                              
|10.15 |  | Series 2003-4 Supplement, dated as of June 19, 2003, to the Amended and Restated Base Indenture, dated as of July 30, 1997, between The Bank of New York, as Trustee and Series 2003-4 Agent (Filed
herewith).                                                                                                                                                                                                                            
|10.16 |  | Series 2003-5 Supplement, dated as of October 9, 2003, to the Amended and Restated Base Identure, dated as of July 30, 1997, between The Bank of New York, as Trustee and Series 2003-5 Agent (Filed
herewithin).                                                                                                                                                                                                                         
|12    |  | Statement Re: Computation of Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                                                           
|31.1  |  | Certification of President Pursuant to Rules 13(a)-14(a) and 15(d)-14(a) Promulgated Under the Securities Exchange Act of 1934, as amended.                                                                                                                                                                                                                                                                                               
|31.2  |  | Certification of Senior Vice President and Controller Pursuant to Rules 13(a)-14(a) and 15(d)-14(a) Promulgated Under the Securities Exchange Act of 1934, as amended.                                                                                                                                                                                                                                                                    
|32    |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                   

G-5

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