The ratings on Parsippany, N.J.-based Avis Budget Group Inc. reflect an aggressive financial profile and the price-competitive and cyclical nature of on-airport car rentals. The ratings also incorporate the company's position as a major U.S. car rental company and the relatively stable cash flow its businesses generate, even during periods of economic weakness, due to the large noncash depreciation component. We characterize Avis Budget's business risk profile as weak and its financial risk profile as aggressive. On June 14, 2011, Standard&Poor's Ratings Services placed its ratings on Parsippany, N.J.-based auto renter Avis Budget Group Inc. on CreditWatch with negative implications. We based this action on the company's June 14, 2011 announcement that it had reached an agreement to
