Strength Across Three Business Lines Drives Results; Company Reaffirms First Call Consensus Outlook

Avis (NYSE: AVI - news) has reported its results for the quarter ended September 30, 2000.

Avis Group consolidated net income and diluted earnings per share for the three months ended September 30, 2000 were $48.4 million and $1.36, respectively, compared to $39.4 million and $1.10, respectively, for the same period in 1999. Revenue for the quarter was $1.1 billion.

Avis Group consolidated net income and diluted earnings per share for the nine months ended September 30, 2000 were $105.4 million and $2.89, respectively, compared to $81.8 million and $2.40, respectively, for the same period in 1999. Revenue for the nine months was $3.2 billion.

"Our solid third quarter results reflect the diversity and strength of Avis' three business lines," said A. Barry Rand, Avis Group's Chairman and CEO. "The continued strong performance of our Car Rental Group, recent signings at PHH North America and continued strength at Wright Express underscores our successful strategy in transforming ourselves to the leading automotive transportation and vehicle management solutions company. This strategy is designed to generate steady, and consistent earnings growth for our shareholders." "Avis Group continues to be recognized as a technological leader," Rand added. "Moving forward, Avis will build upon its technological strengths across each of the Company's business lines."

"We are comfortable with the analysts' current First Call consensus estimates of 31 cents for the fourth quarter of 2000 and $3.98 for 2001, based on our expanded Avis Group model," said Kevin M. Sheehan, President of Corporate and Business Affairs and Chief Financial Officer. "Our global partnership with BNP Paribas has further strengthened our solid business fundamentals and uniquely positions the Company as a complete vehicle management solution."

Car Rental Group

Worldwide car rental revenue in the third quarter 2000 totaled $733.7 million, up 3.4% over the same period in 1999, reflecting a 4.4% increase in transaction days, partially offset by a 0.8% decrease in time and mileage revenue per day. Worldwide car rental pre-tax income was $79.5 million, up 10.8% over the same period in 1999, generating a 10.8% margin.

The Company expects that the fourth quarter 2000 transaction days for worldwide car rental will be up 5% to 6% while time and mileage revenue per day will be down approximately 2%. The estimated outlook for full year 2001 is for transaction days to increase 3% to 4% with time and mileage revenue per day to increase 2% to 3%.

Vehicle Management Services Group (VMS)

On August 9, 2000, the Company closed its transaction with BNP Paribas creating a joint venture that owns PHH Europe. BNP Paribas acquired an 80 percent interest in the joint venture for $800 million in cash and repayment of PHH Europe's intercompany indebtedness to Avis. The Company repaid over $1 billion of debt with the proceeds from the transaction and retained a 20% interest in the joint venture which subsequent to the transaction, will be accounted for on the equity method.

Total revenue for VMS (excluding PHH Europe) in the third quarter 2000 was $373.6 million, an 8.1% increase over the same period in 1999, with vehicle leasing revenue increasing 6.2% and other fee based revenue increasing 27.7%. Pre-tax income for VMS (excluding PHH Europe) was $27.6 million, up 8.3% over the same period in 1999, generating a 7.4% margin.

The Company expects that for the fourth quarter 2000 vehicle leasing unit growth will be 3% over the same period in 1999, while growth of the other fee based products will be consistent with third quarter results. The estimated outlook for full year 2001 is 3% to 4% vehicle leasing unit growth with 10% to 15% growth in other fee based products.

Avis Group Holdings, Inc. is one of the world's leading service and information providers for comprehensive automotive transportation and vehicle management solutions. The Company operates Avis Rent A Car, the world's second largest general-use car rental business, with locations in the United States, Canada, Australia, New Zealand and the Latin American Caribbean Region; PHH Vehicle Management Services, the second largest fleet management and leasing company in North America; and Wright Express, the world's largest fleet card provider.

AVIS GROUP HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)
(Unaudited)

THREE MONTHS ENDED SEPTEMBER 30,
2000 (4) 1999 (3)
Revenue:
Vehicle rental $ 733,694 $ 709,555
Vehicle management services:
Vehicle leasing 344,636 346,064
Other fee based revenue 51,945 67,199
1,130,275 1,122,818
Costs and expenses:
Direct operating, net 259,573 263,123
Vehicle depreciation and lease charges, net 446,464 442,458
Interest 125,735 109,803
Selling, general and administrative 171,478 177,119
1,003,250 992,503

EBITDA (5) 127,025 130,315

Interest - acquisition debt 21,041 35,545
Amortization of cost in excess
of net assets acquired 10,203 11,977
Non-vehicle depreciation and amortization 10,873 11,019
Income before provision for income taxes 84,908 71,774
Provision for income taxes 36,511 32,399
Net income 48,397 39,375
Preferred stock dividends 4,783 4,555
Earnings applicable
to common stockholders $ 43,614 $ 34,820

Earnings Per Share:
Basic $ 1.40 $ 1.12
Diluted (1) $ 1.36 $ 1.10

Cash earnings per share (2) $ 1.66 $ 1.46

Weighted average shares outstanding:
Basic 31,138,079 31,129,164
Diluted (1) 32,150,494 31,760,213


NINE MONTHS ENDED SEPTEMBER 30,
2000 (4) 1999 (3)
Revenue:
Vehicle rental $ 1,989,167 $ 1,913,929
Vehicle management services:
Vehicle leasing 1,051,794 346,064
Other fee based revenue 198,815 67,199
3,239,776 2,327,192
Costs and expenses:
Direct operating, net 715,581 724,843
Vehicle depreciation and
lease charges, net 1,273,966 760,929
Interest 359,898 209,728
Selling, general and
administrative 537,753 408,301
2,887,198 2,103,801

EBITDA (5) 352,578 223,391

Interest - acquisition debt 92,872 35,545
Amortization of cost
in excess of net assets acquired 33,797 18,328

Non-vehicle depreciation
and amortization 37,332 23,370
Income before provision
for income taxes 188,577 146,148
Provision for income taxes 83,162 64,305
Net income 105,415 81,843
Preferred stock dividends 14,118 4,555
Earnings applicable
to common stockholders $ 91,297 $ 77,288

Earnings Per Share:
Basic $ 2.93 $ 2.46
Diluted (1) $ 2.89 $ 2.40

Cash earnings per share (2) $ 3.92 $ 2.94

Weighted average shares outstanding:
Basic 31,133,834 31,394,335
Diluted (1) 31,609,275 32,172,196

(1) Includes dilutive effect of the assumed exercise of stock options.
(2) Cash earnings per share equals earnings applicable to common
stockholders plus amortization of cost in excess of net assets
acquired (net of income tax benefit) divided by the weighted average
diluted shares outstanding.
(3) Includes the operations of PHH North America, PHH Europe and Wright
Express from July 1, 1999 (Date of Acquisition).
(4) In August 2000, the Company completed its joint venture agreement
with BNP Paribas and began accounting for its remaining
20% investment in PHH Europe on the equity method. In addition, the
Company repaid $1.0 billion of acquisition debt.
(5) Represents earnings before income taxes, non-vehicle deprecation and
amortization, amortization of cost in excess of net assets acquired
and acquisition interest.


BALANCE SHEET DATA
(In Thousands)
(Unaudited)

September 30,
2000 1999

Vehicles, net $ 7,023,419 $ 6,468,486
Total assets $ 10,269,505 $ 11,183,579
Vehicle related debt $ 6,953,463 $ 7,216,437
Acquisition financing $ 500,000 $ 1,500,000
Preferred stock $ 384,953 $ 366,500
Common stockholders' equity $ 743,843 $ 657,384
Acquisition financing and
preferred stock to
common stockholders' equity 1.2X 2.8X


SUPPLEMENTARY OPERATIONS DATA
(Unaudited)

Worldwide Car Rental

Three Months Ended September 30,
2000 1999 % Change

Revenue, in thousands $ 733,694 $ 709,555 3.4
Pre-tax income, in thousands $ 79,473 $ 71,721 10.8
Transaction days, in millions 17.7 17.0 4.4
Time and mileage revenue
per day $ 39.08 $ 39.39 (0.8)


Domestic Car Rental Revenue Drivers

Three Months Ended September 30,
2000 % Change
Transaction days, in millions
Commercial 9.1 7.9
Leisure 6.6 --
15.7 4.5

Time and mileage revenue per day $ 39.79 (0.4)


Vehicle Management Services (in thousands) (a)

Three Months Ended September 30,
2000 1999 % Change
Revenue:
Vehicle leasing $ 334,283 $ 314,869 6.2
Other fee based revenue 39,282 30,750 27.7
$ 373,565 $ 345,619 8.1
Pre-tax income $ 27,552 $ 25,435 8.3


(a) For comparability, results have been restated to exclude the revenue
and pre-tax earnings of PHH Europe which has been included in
Corporate below.


Vehicle Management Services Revenue Drivers

Three Months Ended September 30, 2000
Amounts % Change

Vehicle leasing units 305,000 0.9
Fuel cards 2,968,000 14.7
Accident management units 166,000 12.5
Maintenance cards 309,000 8.1


Corporate and PHH Europe (in thousands)

Three Months Ended September 30,
2000 1999 % Change

Interest-acquisition debt $(21,041) $(35,545) (40.8)
Amortization of cost in excess
of net assets acquired (6,299) (7,064) (10.8)
Pre-tax earnings of
PHH Europe (b) 3,676 17,077 (78.5)
Other 1,547 149 --
$(22,117) $(25,383) (12.9)

(b) Reflects the pre-tax earnings of PHH Europe included in Avis Group's
consolidated results. As a result of closing the BNP Paribas
transaction on August 9, 2000, Avis Group's investment in PHH Europe
was reduced to 20 percent and, consequently, Avis Group records the
operating results of PHH Europe utilizing the equity method.