Item
4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit
Report or Completed Interim Review.
As
previously disclosed, the Company’s former PHH Corporation subsidiary filed a
Current Report on Form 8-K on October 30, 2006 in which PHH reiterated that
the
resolution of certain accounting matters is expected to result in changes
to
PHH’s previously filed financial statements.
The
Company has completed its review of these and other accounting matters evaluated
by PHH and, on November 9, 2006, concluded that such matters will require
a
restatement of certain of the Company’s previously filed financial statements to
address these matters, which include the allocation of the purchase price
among
current and former business units associated with the Company’s 2001 acquisition
of Avis Group Holdings (then parent of PHH’s fleet management and Wright Express
fuel card businesses) and
a
change to disaggregate two of the businesses acquired for purposes of
testing goodwill impairment.
Such
re-allocation and change in aggregation will result in (i)
a
restatement of the gain recorded upon the initial public offering of Wright
Express in first quarter 2005; (ii) a prior period impairment charge, which
in
turn will result in a restatement of the impairment charge recorded upon
the
spin-off of PHH in first quarter 2005; and (iii) a
restatement of certain of our expenses.
Such
changes will be reflected principally in the discontinued operations of Avis
Budget and,
with
respect to continuing operations, are expected to decrease our aggregate
net
income over the period of 2001-2004 by an immaterial amount.
In
addition, we expect to record additional adjustments to discontinued operations
over the period of 2001-2005 which are expected to increase the Company’s
aggregate net income over that period (with a corresponding offsetting decrease
to net income for periods prior to 2001).
Accordingly,
our previously issued financial statements for the years ended December 31,
2005, 2004 and 2003 as well as for the three and six months ended March 31
and
June 30, 2006, respectively, should no longer be relied upon.
Since
PHH
has neither re-filed its prior financial statements nor, to the Company’s
knowledge, completed its evaluation of all such accounting matters, there
can be
no assurance that the Company will not receive additional information from
PHH
that is inconsistent with the information received to date, which could cause
further or different changes to the Company’s previously filed financial
statements.
We
currently expect to file our Quarterly Report on Form 10-Q for the period
ended
September 30, 2006 on or prior to November 20, 2006 and we expect that the
financial statements to be included in such Quarterly Report will properly
reflect all applicable period adjustments relating to the restatement. Following
the filing of our Form 10-Q, we intend to file restated financial statements
for
the additional periods described above to correct these errors as soon as
practicable.
The
Company’s management and Audit Committee have discussed the matters disclosed in
this filing with our independent registered public accounting firm, Deloitte
& Touche LLP.
Item
7.01 Regulation FD Disclosure.
On
November 15, 2006, we announced that we have
provided to the trustee the financial information for Avis Budget Car
Rental and
its
subsidiaries, the companies that comprise our vehicle rental business, as
required by Avis Budget Car Rental’s indenture and such information is available
on our web site at www.avisbudgetgroup.com.
Our
press
release announcing the posting of such financial information is incorporated
by
reference herein.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
The
following exhibits are filed as part of this report:
|
Exhibit
No.
|
|
Description
|
|
99.1
|
|
Press
Release dated November 15, 2006.
|
Forward-Looking
Statements
Certain
statements in this Current Report on Form 8-K constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act
of 1995. Such forward-looking statements involve 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.
Statements preceded by, followed by or that otherwise include the words
"believes", "expects", "anticipates", "intends", "projects", "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. Any statements
that refer to expectations or other characterizations of future events,
circumstances or results are forward-looking statements.
Various
risks that could cause future results to differ from those expressed by the
forward-looking statements included in this Current Report on Form 8-K include,
but are not limited to our ability to complete the calculations required
by the
transactions related to the separation of Cendant Corporation in order meet
our
expected timing for our Form 10-Q for third quarter 2006 and the timely receipt
of additional information from PHH and whether that information is inconsistent
with the information received to date. In light of these risks, uncertainties,
assumptions and factors, the forward-looking events discussed in this Current
Report on Form 8-K may not occur. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date
stated,
or if no date is stated, as of the date of this Current Report on Form 8-K.
Important assumptions and other important factors that could cause actual
results to differ materially from those in the forward-looking statements
are
specified in our Form 10-Q for the quarter ended June 30, 2006, including
under
headings such as "Forward-Looking Statements", "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
Except for our ongoing obligations to disclose material information under
the
federal securities laws, we undertake no obligation to release any revisions
to
any forward-looking statements, to report events or to report the occurrence
of
unanticipated events unless required by law.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| |
|
AVIS
BUDGET GROUP, INC.
|
|
| |
By:
|
/s/
John T. McClain
|
|
| |
|
John
T. McClain
Senior
Vice President and Chief Accounting Officer
|
|
Date:
November 15, 2006
EXHIBIT
INDEX
|
Exhibit
No.
|
|
Description
|
|
99.1
|
|
Press
Release dated November 15, 2006.
|