SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
(Mark one):
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996.)
For the fiscal year ended December 31, 1998
OR
[ ] TRANSMITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REUQUIRED)
For the transition period from to
Commission file number
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below
Avis Voluntary Investment Savings Plan for Bargaining Hourly Employees
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office
Avis Rent A Car Inc., 900 Old Country Road, Garden City, NY 11530
<PAGE>
Avis Voluntary Investment Savings Plan For Bargaining Hourly Employees
Table of Contents of the Financial Statements and Supplemental Schedules
Page
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits
as of December 31, 1998 and 1997. 2
Statement of Changes in Net Assets Available for Plan Benefits
for the year ended December 31, 1998. 3
Notes to the Financial Statements for the year ended
December 31, 1998 and as of December 31, 1997. 4-11
Supplemental Schedules as of and for the year ended
December 31, 1998: *
Schedule I - Item 27a - Schedule of Net Assets held for Investment
Purposes 12
Schedule II - Item 27d - Schedule of Reportable Transactions 13
*Other schedules required by Section 2520.103 - 2520.104 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 ("ERISA") have been
omitted because they are not applicable.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Participants and Administrator of
The Avis Voluntary Investment Savings Plan For Bargaining Hourly Employees
We have audited the accompanying statements of net assets available for benefits
of the Avis Voluntary Investment Savings Plan for Bargaining Hourly Employees
(the "Plan") as of December 31, 1998 and 1997, and the related statement of
changes in net assets available for benefits for the year ended December 31,
1998. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1998 and 1997, and the changes in net assets available for benefits for the year
ended December 31, 1998 in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's management. Such
schedules have been subjected to the auditing procedures applied in our audit of
the basic 1998 financial statements and, in our opinion, are fairly stated in
all material respects when considered in relation to the basic financial
statements taken as a whole.
June 22, 1999
<PAGE>
AVIS VOLUNTARY INVESTMENT SAVINGS PLAN
FOR BARGAINING HOURLY EMPLOYEES
STATEMENTS OF NET ASSETS
AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
December 31, December 31,
Fixed Income Fund: 1998 1997
----------------- -----------------
<S> <C> <C>
Investment at contract value:
Guaranteed income contracts $ 8,605,727 $ 8,776,981
Investments at fair value:
BT Pyramid Government Securities Cash Fund 547,693 -
SEI Stable Asset Fund #354 1,617,603 2,571,286
NationsBank Treasury Reserves Capital Class - 1,058,831
---------------- -----------------
Total Fixed Income Fund 10,771,023 12,407,098
Investments at fair value:
Fidelity Equity Income Fund 1,159,719 627,200
Fidelity Magellan Fund 1,576,409 605,219
Bond Fund of America 335,638 177,741
Putnam Growth & Income Fund 977,448 574,453
Putnam New Opportunities Fund 843,399 454,341
American Europacific Growth Fund 317,870 247,133
Heartland Value Fund 331,582 357,080
Avis Stock Fund 43,452 -
Portfolio A 54,805 37,932
Portfolio B 46,504 1,092
Portfolio C 141,362 132,445
Portfolio D 45,390 49,154
Portfolio E 143,805 44,166
Investments at estimated fair value:
Loans to participants 2,015,091 1,383,265
---------------- -----------------
Total net assets available for plan benefits $ 18,803,497 $ 17,098,319
================ =================
</TABLE>
See accompanying notes to the financial statements.
<PAGE>
Avis Voluntary Investment Savings Plan For Bargaining Hourly Employees
Statement of Changes in Net Assets Available for Plan Benefits
For the year ended December 31, 1998.
<TABLE>
<CAPTION>
Fixed Fidelity Fidelity Bond Fund
Income Equity Income Magellan of
Fund Fund Fund America
--------------- ------------- --------------- --------------
<S> <C> <C> <C> <C>
Net appreciation (depreciation) in fair
value of investments $ 83,033 $ 306,423 $ (10,163)
Interest $ 978,823
Dividends 98,041 72,796 26,181
--------------- ------------- --------------- --------------
978,823 181,074 379,219 16,018
--------------- ------------- --------------- --------------
Contributions:
Employee 194,991 117,679 109,477 40,838
Rollover 25,567 4,000 13,201
--------------- ------------- --------------- --------------
220,558 121,679 122,678 40,838
--------------- ------------- --------------- --------------
Total Additions 1,199,381 302,753 501,897 56,856
Deductions from assets attributed to:
Benefits Paid to Participants (854,060) (143,441) (191,572) (10,718)
--------------- ------------- --------------- --------------
(854,060) (143,441) (191,572) (10,718)
--------------- ------------- --------------- --------------
Net increase (decrease) prior to
interfund transfers 345,321 159,312 310,325 46,138
Interfund transfers (1,981,396) 373,207 660,865 111,759
--------------- ------------- --------------- --------------
Net (decrease) increase in net assets
available for Plan benefits (1,636,075) 532,519 971,190 157,897
Net assets available for Plan benefits:
Beginning of year 12,407,098 627,200 605,219 177,741
=============== ============= =============== ==============
End of year $ 10,771,023 $ 1,159,719 $ 1,576,409 $ 335,638
=============== ============= =============== ==============
Putnam Putnam
Growth New American Heartland
& Income Opportunities Europacific Value
Fund Fund Growth Fund Fund
--------------- ------------- --------------- --------------
<S> <C> <C> <C> <C>
Net appreciation (depreciation) in fair
value of investments $ 30,066 $ 102,568 $ 16,778 $ (85,352)
Interest
Dividends 90,976 26,664 13,589 11,293
--------------- ------------- --------------- --------------
121,042 129,232 30,367 (74,059)
--------------- ------------- --------------- --------------
Contributions:
Employee 109,413 88,383 34,933 52,578
Rollover 9,401 10,858 4,300
--------------- ------------- --------------- --------------
118,814 99,241 39,233 52,578
--------------- ------------- --------------- --------------
Total Additions 239,856 228,473 69,600 (21,481)
Deductions from assets attributed to:
Benefits Paid to Participants (173,345) (87,337) (19,216) (28,433)
--------------- ------------- --------------- --------------
(173,345) (87,337) (19,216) (28,433)
--------------- ------------- --------------- --------------
Net increase (decrease) prior to
interfund transfers 66,511 141,136 50,384 (49,914)
Interfund transfers 336,484 247,922 20,353 24,416
--------------- ------------- --------------- --------------
Net (decrease) increase in net assets
available for Plan benefits 402,995 389,058 70,737 (25,498)
Net assets available for Plan benefits:
Beginning of year 574,453 454,341 247,133 357,080
=============== ============= =============== ==============
End of year $ 977,448 $ 843,399 $ 317,870 $ 331,582
=============== ============= =============== ==============
<PAGE>
Avis
Stock
Fund Portfolio A Portfolio B Portfolio C
--------------- ------------- --------------- --------------
<S> <C> <C> <C> <C>
Net appreciation (depreciation) in fair
value of investments $ 9,338 $ (294) $ (18) $ 1,567
Interest 3,784 1,009 1,041
Dividends 4,429 1,584 4,126
--------------- ------------- --------------- --------------
9,338 7,919 2,575 6,734
--------------- ------------- --------------- --------------
Contributions:
Employee 9,446 14,450 7,190 16,353
Rollover
--------------- ------------- --------------- --------------
9,446 14,450 7,190 16,353
--------------- ------------- --------------- --------------
Total Additions 18,784 22,369 9,765 23,087
Deductions from assets attributed to
Benefits Paid to Participants (69) (29,542) (29,284) (25,976)
--------------- ------------- --------------- --------------
(69) (29,542) (29,284) (25,976)
--------------- ------------- --------------- --------------
Net increase (decrease) prior to
interfund transfers 18,715 (7,173) (19,519) (2,889)
Interfund transfers 24,737 24,046 64,931 11,806
--------------- ------------- --------------- --------------
Net (decrease) increase in net assets
available for Plan benefits 43,452 16,873 45,412 8,917
Net assets available for Plan benefits:
Beginning of year
0 37,932 1,092 132,445
=============== ============= =============== ==============
End of year $ 43,452 $ 54,805 $ 46,504 $ 141,362
=============== ============= =============== ==============
Loans
to
Portfolio D Portfolio E Participants Total
--------------- ------------- --------------- --------------
<S> <C> <C> <C> <C>
Net appreciation (depreciation) in fair
value of investments $ 2,002 $ 1,103 $ 457,051
Interest 346 262 985,265
Dividends 2,970 4,339 356,988
--------------- ------------- --------------- --------------
5,318 5,704 1,799,304
--------------- ------------- --------------- --------------
Contributions:
Employee 22,712 30,016 848,459
Rollover 67,327
--------------- ------------- --------------- --------------
22,712 30,016 915,786
--------------- ------------- --------------- --------------
Total Additions 28,030 35,720 2,715,090
Deductions from assets attributed to:
Benefits Paid to Participants (17,636) (31,109) 631,826 (1,009,912)
--------------- ------------- --------------- --------------
(17,636) (31,109) 631,826 (1,009,912)
--------------- ------------- --------------- --------------
Net increase (decrease) prior to
interfund transfers 10,394 4,611 631,826 1,705,178
Interfund transfers (14,158) 95,028
--------------- ------------- --------------- --------------
Net (decrease) increase in net assets
available for Plan benefits (3,764) 99,639 631,826 1,705,178
Net assets available for Plan benefits:
Beginning of year 49,154 44,166 1,383,265 17,098,319
=============== ============= =============== ==============
End of year $ 45,390 $ 143,805 $ 2,015,091 $ 18,803,497
=============== ============= =============== ==============
</TABLE>
<PAGE>
AVIS VOLUNTARY INVESTMENT SAVINGS PLAN
FOR BARGAINING HOURLY EMPLOYEES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
AS OF DECEMBER 31, 1997
Note 1 - Description of the Plan
- --------------------------------
The following description of the Avis Voluntary Investment Savings Plan for
Bargaining Hourly Employees (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
General
The Plan is a defined contribution pension plan sponsored by Avis Rent A Car
System, Inc. (the "Company"). The Company is a wholly-owned subsidiary of Avis
Rent A Car, Inc. (see Note 8). The Plan was adopted by the Company on October 1,
1997, ("Date of Inception") for the benefit of all hourly paid employees of the
Company who are members of the collective bargaining units covered by collective
bargaining agreements between these units and the Company. The Plan
administrator is the Administrative Committee of the Avis Voluntary Investment
Savings Plan for Bargaining Hourly Employees. Prior to January 1, 1998, the Plan
trustee was the NationsBank of Georgia, N.A. On January 1, 1998, the Plan
trustee was changed to the Bankers Trust Company. NationsBank of Georgia, N.A.
and Bankers Trust Company are collectively referred to as the "Trustee". The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").
Eligibility
Employees who have attained the age of 21 and completed one year of service
(a year of service means the completion of at least 1,000 hours of service
during a twelve consecutive month period)are eligible to participate in
the Plan.
Contributions
Participants may elect to defer on a pre-tax basis from 1% to 16% of specified
compensation under a "qualified cash or deferred arrangement" under Section
401(k) of the Internal Revenue Code, subject to certain limitations in 1%
increments. In addition, employees participating in the Plan may make additional
contributions from 1% to 10% of specified compensation on a current, after-tax
basis, subject to certain limitations imposed by law.
Participants who have received all of their benefits under another tax-qualified
plan within one taxable year may roll their distributions received into the
Plan.
Investments
Participants in the Plan have the option of investing their account in a Fixed
Income Fund (includes guaranteed income contracts and investments backed by the
U.S. Government, as well as other high-quality fixed income securities),
Fidelity Equity Income Fund, Fidelity Magellan Fund, Bond Fund of America,
Putnam Growth & Income Fund, Putnam New Opportunities Fund, American Europacific
Growth Fund, Heartland Value Fund, Avis Stock Fund or five individual portfolios
of various combinations of investments in the foregoing investments.
Fund Reallocations
Participants can reallocate investments among the various funds or change future
contributions on a daily basis. The fund reallocation must be in 1% increments.
Only one reallocation is allowed each day.
Vesting
Participants are fully vested at all times with respect to their contributions
to the Plan.
Participant Accounts
Each participant's account is credited with the participant's contribution, and
the Plan earnings. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's account.
Distributions to Participants
Distribution of the participant's account may be made in a lump sum payment upon
retirement, death or disability, or upon termination of employment, subject to
the vesting requirements of the Plan.
Loans are permitted under the Plan, with certain limitations.
Plan Termination
Although the Company has not expressed any intention to terminate the Plan, it
has the right to do so at any time, subject to the provisions of ERISA. In such
event, assets will be distributed in accordance with the Plan agreement and the
regulations set forth under ERISA.
<PAGE>
Note 2 - Summary of Significant Accounting Policies
- ---------------------------------------------------
Method of Accounting
The Plan's financial statements are prepared on the accrual basis of accounting.
Investment Valuation
Investments in guaranteed income contracts are stated at contract value
representing amounts contributed plus interest at contract value, less funds
withdrawn, because such contracts are fully benefit responsive, as defined in
the AICPA Statement of Position 94-4, "Reporting of Investment Contracts Held by
Health and Welfare Benefit Plans and Defined Contribution Pension Plans." For
the year ended December 31, 1998, the average yield on the aggregate guaranteed
income contracts was 7.42%. The crediting interest rate as of December 31, 1998
and 1997 on the guaranteed income contracts ranged from 5.73% to 7.80 %, and to
5.73% to 7.80%, respectively.
Investments in mutual funds are carried at fair value. The fair value of the
Plan's interest in the Avis Rent A Car, Inc. Voluntary Savings Plan Combined
Fund (the "Combined Fund") is based on the Plan's interest at the beginning of
the year plus actual contributions and allocated investment income less actual
distributions (see Note 3). Investment transactions are accounted for on the
date the investments are purchased or sold (trade date). Dividend income is
recorded on the ex-dividend date.
Payment of Benefits
Benefit payments to participants are recorded upon distribution.
Administrative Expenses
Investment advisory, trustee and other fees and expenses relating to the
administration of the Plan are paid by the Company and are not included in the
Plan's financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires Plan management to make estimates and assumptions
that affect the amount of assets available for plan benefits at the date of the
financial statements and the reported amounts of changes in assets available for
plan benefits during the period. In the opinion of the Plan's management,
actual results are not expected to vary materially from the estimates and
assumptions used in preparing these financial statements.
Note 3 - Interest in the Avis Rent A Car, Inc. Voluntary Savings Plan
(the "Combined Fund")
- ---------------------------------------------------------------------
The Plan has an agreement with the Trustee, whereby substantially all of the
assets of the Plan are held in the Combined Fund on behalf of the Avis Voluntary
Investment Savings Plan and the Avis Voluntary Investment Savings Plan for
Bargaining Hourly Employees. The assets are maintained in a commingled account
by the Trustee and are not separately identified as to ownership. The Plan's
beneficial interest in the combined investments of the Combined Fund is
determined on the basis of the initial asset contribution to the Combined Fund,
adjusted for subsequent contributions, distributions, allocated income, realized
and unrealized gains and losses. Allocations of investment income and net
appreciation (depreciation) in the fair value of investments (both realized and
unrealized) are determined on the basis of proportionate share in the Combined
Fund assets stated at contract value and market value. At December 31, 1998, the
Plan's interest in the net assets of the Combined Fund was approximately 10%.
The following table presents the cost and fair value/contract value of
investments held by the Combined Fund at December 31, 1998 (after allocation of
the individual portfolios to the respective investments):
<TABLE>
<CAPTION>
Cost Fair/Contract Value
<S> <C> <C>
Guaranteed Income Contracts $ 63,882,895 $ 63,882,895
BT Pyramid Government Securities Cash Fund 4,040,432 4,040,432
SEI Stable Asset Fund #354 12,007,952 12,007,952
Fidelity Equity Income Fund 20,950,695 23,217,196
Fidelity Magellan Fund 25,643,145 32,978,098
Bond Fund of America 3,605,817 3,734,287
Putnam Growth & Income Fund 10,650,270 11,954,744
Putnam New Opportunities Fund 7,452,139 8,789,255
American Europacific Growth Fund 4,562,035 5,076,668
Heartland Value Fund 5,426,140 4,853,744
Avis Stock Fund 654,616 903,732
Loans to participants 9,152,515 9,152,515
------------- -------------
Total Combined Fund amounts $ 168,028,651 $ 180,591,518
============= =============
</TABLE>
<PAGE>
The following table presents the cost and fair value/contract value of
investments held by the Combined Fund at December 31, 1997 (after allocation of
the individual portfolios to the respective investments):
<TABLE>
<CAPTION>
Cost Fair/Contract Value
<S> <C> <C>
Guaranteed Income Contracts $ 63,057,745 $ 63,057,745
NationsBank Treasury Reserve Capital Class 7,607,116 7,607,116
SEI Stable Asset Fund #354 18,473,264 18,473,264
Fidelity Equity Income Fund 14,857,305 18,572,252
Fidelity Magellan Fund 17,812,720 21,583,216
Bond Fund of America 2,680,485 2,698,529
Putnam Growth & Income Fund 9,689,036 9,381,328
Putnam New Opportunities Fund 4,424,925 4,802,105
American Europacific Growth Fund 4,856,617 4,536,283
Heartland Value Fund 7,303,213 6,750,923
Loans to participants 7,851,889 7,851,889
--------------- --------------
Total Combined Fund amounts $ 158,614,315 $ 165,314,650
============= =============
</TABLE>
Investment income for the Combined Fund for the year ended December 31, 1998 is
as follows:
Investment Income:
Net appreciation in fair value of investments $ 8,371,717
Interest and dividend income 10,166,032
-------------
Total $ 18,537,749
=============
Note 4 - Investment in the Fixed Income Fund
- --------------------------------------------
At December 31, 1998 and 1997, the Plan's investment in the Fixed Income Fund
was $10,771,023 and $12,407,098, respectively. The allocation between the
guaranteed income contracts, BT Pyramid Government Securities Cash Fund and the
SEI Stable Asset Fund #354 is based on the Plan's proportionate share of the
Fixed Income Fund investment in the Combined Fund at December 31, 1998 and 1997,
respectively. The Plan's interest in the Fixed Income Fund of the Combined Fund
at December 31, 1998 and 1997, was approximately 13% and 14%, respectively.
The following presents the cost and fair value/contract value held by the
Combined Fund at December 31, 1998:
Cost Fair/Contract Value
Guaranteed Income Contracts (contract value) $63,882,895 $63,882,895
BT Pyramid Government Securities Cash Fund 4,040,432 4,040,432
SEI Stable Asset Fund #354 (fair value) 12,007,952 12,007,952
---------- ----------
Total Fixed Income Fund Amounts $79,931,279 $79,931,279
=========== ===========
The following presents the cost and fair value/contract value held by the
Combined Fund at December 31, 1997:
Cost Fair/Contract Value
Guaranteed Income Contracts (contract v $63,057,745 $63,057,745
NationsBank Treasury Reserve Capital Class
(fair value) 7,607,116 7,607,116
SEI Stable Asset Fund #354 (fair value) 18,473,264 18,473,264
---------- ----------
Total Fixed Income Fund Amounts $89,138,125 $89,138,125
=========== ===========
<PAGE>
Note 5 - Investments
This information, as of December 31, 1998 and 1997, and for the periods then
ended, was obtained from the Combined Funds (see Note 3).
The following is a summary of reclasses made in the preparation of the
statement of assets available for Plan Benefits as of December 31, 1998:
<TABLE>
<CAPTION>
Fidelity Putnam Putnam
Fixed Equity Fidelity Bond Fund Growth & New American
Income Income Magellan of Income Opportunities Europacific
Fund Fund Fund America Fund Fund Growth Fund
----------- ----------- ---------- --------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Guaranteed Income Contracts $ 8,500,594
BT Pyramid Government
Securities Cash Fund 541,002
SEI Stable Asset Fund #354 1,597,841
Fidelity Equity Income Fund $1,159,719
Fidelity Magellan Fund $1,576,409
Bond Fund of America $ 335,638
Putnam Growth & Income Fund $ 977,448
Putnam New Opportunities Fund $ 843,399
American Europacific Growth Fund $ 317,870
Heartland Value Fund
Avis Stock Fund
Portfolio A 54,810 31,790 17,534 5,481
Portfolio B 31,004 18,602 12,400 4,651 7,751
Portfolio C 33,160 33,160 36,647 20,943 36,650
Portfolio D 5,043 4,539 13,112 8,574 13,113
Portfolio E 7,569 7,567 39,358 34,816 39,358
Loans to Participants
Cash and Cash Equivalents
----------- ---------- ------------ --------- ---------- ---------- -------------
Total $10,771,023 $1,159,719 $1,576,409 $ 431,296 $1,096,499 $ 912,383 $ 420,223
=========== ========== ==========-- ========= ========== ========== =============
Amount per
Statement of
Net Assets
Heartland Avis Loans to Available for
Value Fund Stock Fund Participants Total Reclasses Plan Benefits
----------- ---------- ------------ ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Guaranteed Income Contracts $ 8,500,594 $ 105,133 $ 8,605,727
BT Pyramid Government
Securities Cash Fund 541,002 6,691 547,693
SEI Stable Asset Fund #354 1,597,841 19,762 1,617,603
Fidelity Equity Income Fund 1,159,719 1,159,719
Fidelity Magellan Fund 1,576,409 1,576,409
Bond Fund of America 335,638 335,638
Putnam Growth & Income Fund 977,448 977,448
Putnam New Opportunities Fund 843,399 843,399
American Europacific Growth Fund 317,870 317,870
Heartland Value Fund $ 331,582 331,582 331,582
Avis Stock Fund $ 43,452 43,452 43,452
Portfolio A 109,615 (54,810) 54,805
Portfolio B 3,100 77,508 (31,004) 46,504
Portfolio C 13,962 174,522 (33,160) 141,362
Portfolio D 6,052 50,433 (5,043) 45,390
Portfolio E 22,706 151,374 (7,569) 143,805
Loans to Participants $ 2,015,091 2,015,091 2,015,091
Cash and Cash Equivalents
----------- ---------- ------------ ----------- ---------- -------------
Total $ 377,402 $43,452 $ 2,015,091 $18,803,497 $ 0 $18,803,497
=========== ========== ============ =========== ========== =============
</TABLE>
<PAGE>
The following is a summary of reclasses made in the preparation of the
Statement of Assets Available for Plan Benefits as of December 31, 1997:
<TABLE>
<CAPTION>
Fidelity Putnam Putnam
Fixed Equity Fidelity Bond Fund Growth & New American
Income Income Magellan of Income Opportunitites Europacific
Fund Fund Fund America Fund Fund Growth Fund
----------- ---------- ------------ ---------- --------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Guaranteed Income Contracts $ 8,720,495
NationsBank Treasury Reserves
Capital Class 1,052,069
SEI Stable Asset Fund #354 2,554,977
Fidelity Equity Income Fund $ 627,200
Fidelity Magellan Fund $ 605,219
Bond Fund of America $ 177,741
Putnam Growth & Income Fund $ 574,453
Putnam New Opportunities Fund $ 454,341
American Europacific Growth Fund $ 247,133
Heartland Value Fund
Portfolio A 37,932 22,759 11,380 3,793
Portfolio B 727 455 273 91 182
Portfolio C 33,111 33,111 33,111 16,556 33,111
Portfolio D 5,462 5,462 13,654 8,192 13,654
Portfolio E 2,325 2,325 11,622 9,298 11,623
Loans to Participants
Cash and Cash Equivalents
----------- ---------- ------------ ---------- --------- -------------- -------------
Total $12,407,098 $ 627,200 $ 605,219 $ 241,853 $ 644,493 $ 488,478 $ 309,496
=========== ========== ============ ========== ========= ============== =============
Amount per
Cash Statement of
Heartland and Loans Net Assets
Value Cash to Available for
Fund Equivalents Participants Total Reclasses Plan Benefits
------------ ----------- ------------ ------------ --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Guaranteed Income Contracts $ 8,720,495 $ 56,486 $8,776,981
NationsBank Treasury Reserves
Capital Class 1,052,069 6,762 1,058,831
SEI Stable Asset Fund #354 2,554,977 16,309 2,571,286
Fidelity Equity Income Fund 627,200 627,200
Fidelity Magellan Fund 605,219 605,219
Bond Fund of America 177,741 177,741
Putnam Growth & Income Fund 574,453 574,453
Putnam New Opportunities Fund 454,341 454,341
American Europacific Growth Fund 247,133 247,133
Heartland Value Fund $ 357,080 357,080 357,080
Portfolio A 75,864 (37,932) 37,932
Portfolio B 91 1,819 (727) 1,092
Portfolio C 16,556 165,556 (33,111) 132,445
Portfolio D 8,192 54,616 (5,462) 49,154
Portfolio E 9,298 46,491 (2,325) 44,166
Loans to Participants $ 1,383,265 1,383,265 1,383,265
Cash and Cash Equivalents
----------- ----------- ------------ ------------ ---------- -------------
Total $ 391,217 $ 0 $ 1,383,265 $ 17,098,319 $ 0 $17,098,319
=========== =========== ============ ============ ========== =============
</TABLE>
Note 6 - Tax Status of the Plan
- -------------------------------
The Plan is intended to be qualified under ss.401(a) of the Internal Revenue
Code of 1986 (the "Code") and is intended to be exempt from taxation under
ss.501(a) of the Code. The Plan received a favorable determination letter dated
January 26, 1999. The Plan administrator believes that the Plan is currently
designed and being operated in compliance with the applicable requirements of
the Code and the related trust was tax-exempt as of the financial statement
date. Therefore, no provision of income taxes has been included in the Plan's
financial statements.
<PAGE>
Note 7 - Investments
- --------------------
The following table presents the current value of the Plan's investments which
represent 5% or more of the Plan's net assets at December 31, 1998 and 1997,
respectively.
<TABLE>
<CAPTION>
December 31,
1998 1997
------------- --------------
<S> <C> <C>
Investment in guaranteed income contracts
at contract value:
Guaranteed Income Contracts $ 8,605,727 $ 8,776,981
Investments at fair value:
SEI Stable Asset Fund #354 1,617,603 2,571,286
NationsBank Treasury Reserves Capital Class 1,058,831
Fidelity Equity Income Fund 1,159,719
Fidelity Magellan Fund 1,576,409
Putnam Growth & Income Fund 977,448
Loans to participants 2,015,091 1,383,625
------------- --------------
Total investments exceeding 5% of the
Plan's assets $15,951,997 $ 13,790,723
============= ==============
</TABLE>
During 1998 the Plan's investments (including realized gains and losses on
investments sold) had net appreciation/(depreciation) of $457,051 as follows:
1998
Fidelity Equity Income Fund $ 83,033
Fidelity Magellan Fund 306,423
Bond Fund of America (10,163)
Putnam Growth & Income Fund 30,066
Putnam New Opportunities Fund 102,568
American Europacific Growth Fund 16,778
Heartland Value Fund (85,352)
Avis Stock Fund 9,338
Portfolio A (294)
Portfolio B (18)
Portfolio C 1,567
Portfolio D 2,002
Portfolio E 1,103
----------------
$ 457,051
================
<PAGE>
The investment options available to participants as of December 31, 1998 consist
of the following:
a) Fixed Income Fund - The fund invests in a diversified portfolio of
high-quality, fixed income investments offering price stability and
liquidity.
b) Fidelity Equity Income Fund - The fund normally invests at least 65% of its
assets in income-producing equity securities that have demonstrated a yield
higher than the composite yield on the stock in the S&P 500 index. It may
also invest in debt obligations.
c) Fidelity Magellan Fund - The fund invests primarily in the common stocks
and convertible securities of domestic corporations operating primarily in
the United States, domestic corporations that have significant activities
and interests outside the United States and foreign companies, with up to
20% of its assets invested in debt securities of all types and qualities.
d) Bond Fund of America - The fund invests primarily in a diversified
portfolio consisting primarily of marketable fixed-income debt securities,
government obligations and money market instruments.
e) Putnam Growth & Income Fund - The fund invests primarily in common stocks
issued by well-established companies with a steady history of profits and
attractive price/earnings ratios. It may invest up to 20% of assets in
foreign securities.
f) Putnam New Opportunities Fund - The fund invests primarily in common stock
of companies in sectors of the economy believed to possess above-average
long-term growth potential including personal communications, environmental
services, media/entertainment, medical technology/medical cost containment,
applied advanced technology, personal financial services, restaurants and
retail. Up to 20% of its assets may be invested in foreign issues.
g) American EuroPacific Growth Fund - The fund normally invests at least 65% of
its assets in equity securities of insurers domiciled in Europe or the
Pacific Basin.
h) Heartland Value Fund - The fund normally invests at least 65% of its assets
in equities of companies with market capitalization's of less than
$300 million.
i) Avis Stock Fund - This fund invests in the sponsor's (Avis Rent A Car,
Inc.) common stock which is an equity security publicly traded on the New
York Stock Exchange under the symbol "AVI".
j) Portfolio A - The portfolio will generally invest 50% of its assets in
fixed income, 30% in bonds, 15% in stock of large domestic companies and 5%
in stock of foreign companies.
k) Portfolio B - This portfolio will generally invest 40% of its assets in
fixed income, 25% in bonds, 15% in stock of large domestic companies, 10%
in stock of foreign companies and 10% in stock of aggressive growth and
small domestic companies
l) Portfolio C - This portfolio will generally invest 20% of its assets in
fixed income, 20% in bonds, 20% in stock of large domestic companies, 20%
in stock of foreign companies and 20% in stock of aggressive growth and
small domestic companies.
m) Portfolio D - This portfolio will generally invest 30% of its assets in
aggressive growth and small domestic companies, 25% in stock of large
domestic companies, 25% in stock of foreign companies, 10% in bonds and 10%
in fixed income.
n) Portfolio E - This portfolio will generally invest 40% of its assets in
stock of aggressive growth and small domestic companies, 25% in stock of
large domestic companies, 25% in stock of foreign companies, 5% in bonds
and 5% in fixed income.
Note 8 - Significant Transaction
- --------------------------------
On July 23, 1998, the Company's parent company, Avis Rent A Car, Inc., filed an
S-8 with the Securities and Exchange Commission, to register 200,000 shares of
Avis Rent A Car, Inc. Stock held by the Plan. The effect of the registration of
these shares was to provide an additional investment fund option, the Avis Stock
Fund, which invests in shares of Avis Rent A Car, Inc.
<PAGE>
Note 9 - Subsequent Events
- --------------------------
On March 19, 1999, the Company purchased the common stock and franchise rights
of Rent A Car Company, Incorporated, of Richmond, Virginia for $10.2 million.
Cost in excess of the fair value of net assets acquired at March 19, 1999, is
approximately $7.6 million. The Company financed this transaction through
internally generated funds.
From January 1, 1999 through March 10, 1999, the Company under its Common Stock
Repurchase Program, purchased 2,013,100 shares of common stock at an aggregate
cost of $48.0 million including 1.3 million shares which were repurchased from
Cendant at a cost of $31.5 million. As of March 10, 1999, under the Company's
Stock Repurchase Program, the Company has cumulatively repurchased 4,685,800
common shares at an average cost of approximately $21 per share.
On May 13, 1999, Avis agreed to acquire Motorent, Inc. ("Motorent"). Motorent is
a 47-year Avis franchisee operating at the airports in Knoxville, Memphis,
Nashville and Chattanooga, Tennessee, and is the largest Avis System franchisee
in North America, (excluding the Company). The Motorent acquisition is scheduled
to close on or about June 30, 1999.
On May 24, 1999, the Company entered into an agreement with Cendant to purchase
the vehicle management and fuel card businesses of Cendant for approximately
$1.8 billion plus expenses of approximately $100 million and refinancing of
approximately $3.6 billion of indebtedness. The Company expects to finance the
acquisition through the issuance of $362 million of Preferred Stock, $550
million of Senior Subordinated Notes and the remainder through secured and
unsecured borrowings.
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan Committee has duly caused this annual report to be signed on its behalf
by the undersigned hereunto duly authorized.
Avis Rent A Car, Inc.
Voluntary Investment Savings Plan
for Bargaining Hourly Employees
By: /s/ Kevin M. Sheehan
--------------------------------
Executive Vice President and
Chief Financial Officer
Date
June 22, 1999
<PAGE>
SCHEDULE I
AVIS VOLUNTARY INVESTMENT SAVINGS PLAN
FOR BARGAINING HOURLY EMPLOYEES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
Principal
amount/ Market/
units/shares* Cost contract value **
<S> <C> <C> <C>
Guaranteed Income Contracts 8,605,727 $8,605,727 $8,605,727
BT Pyramid Government Securities
Cash Fund 547,693 547,693 547,693
SEI Stable Asset Fund #354 1,617,603 1,617,603 1,617,603
Fidelity Equity Income Fund 20,877 1,046,580 1,159,719
Fidelity Magellan Fund 13,048 1,225,794 1,576,409
Bond Fund of America 31,689 416,457 431,296
Putnam Growth & Income Fund 53,514 976,864 1,096,499
Putnam New Opportunities Fund 15,614 773,579 912,383
American Europacific Growth Fund 14,797 377,623 420,223
Heartland Value Fund 12,885 421,910 377,402
Avis Stock Fund 1,797 31,473 43,452
Loans to participants 2,015,091 2,015,091
-------------- --------------
$ 18,056,394 $ 18,803,497
============== ==============
</TABLE>
* The principal amount/units/shares and cost was calculated on a pro-rata
basis, based on the Combined Fund.
** After allocation of the individual portfolios
to the respective investments.
<PAGE>
SCHEDULE II
AVIS VOLUNTARY INVESTMENT SAVINGS PLAN
FOR BARGAINING HOURLY EMPLOYEES
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Transactions in excess of five percent of fair value of plan assets at December 31, 1997
Aggregate Aggregate Aggregate Net
No. of No. of value of cost value (loss)
Description of asset purchase of sale purchase of sales of sales or gain
<S> <C> <C> <C> <C> <C> <C>
BT Pyramid Government
Securities Cash Fund 314 338 $82,369,624 $77,413,170 $77,413,170
SEI Stable Asset Fund #354 18 16 17,231,525 23,700,000 23,700,00
Fidelity Equity Income Fund 128 127 8,268,608 4,699,789 5,511,062 $811,273
Fidelity Magellan Fund 147 106 10,661,482 5,276,601 6,279,784 1,003,183
Guaranteed Income Contracts 51 118 9,807,665 8,803,998 8,803,998
</TABLE>
The reportable transactions as disclosed above, are based on
the movement in the Combined Fund.
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the previously filed
Registration Statement No. 333-59695 of Avis Rent A Car, Inc. on Form S-8 of our
report dated June 22, 1999, appearing in this Annual Report on Form 11-K of Avis
Voluntary Investment Savings Plan for Bargaining Hourly Employees for the year
ended December 31, 1998.
Deloitte & Touche LLP
New York, New York
June 28, 1999
