J.P Morgan Avis Budget Group, Inc. 1Q14 Takeaways; YE14 PT $59; Leisure & Commercial Pricing Is Encouraging This note serves as a follow up to our first look at CAR’s 1Q EPS of $0.16 beating our estimate of $0.06 and the Street's $0.08 (with a range of $0.06 to $0.09). We were surprised to see CAR’s -4.1% move today (versus the SPX -0.1%) on what we'd characterize as a very solid print that was driven by solid rental demand and positive pricing (both including and excluding its Payless brand). Additionally, we found management's commentary on the forward pricing environment to be compelling, with North American RPD up “at least” +1% (including a Payless brand overhang of North America Equity Research 08 May 2014 Overweight CAR, CAR US Price: $51.79 A Price Target: $59.00 Previous: $53.00 Leisure Kevin Milota “° | Bloomberg JPMA MILOTA <GO> J.P. Morgan Securities LLC S0bps) and commercial pricing expected to grow 1% as well. The commercial pricing Pree Perfomance inflection point came as a pleasant surprise to us, and likely not factored into investor 2 models as well. We reiterate our OW rating and are taking our YE14 price-target to 2 $59. While CAR has been a strong performer year-to-date, we continue to see upside 2 in the name on what we think will be a story driven by better pricing, and sustained 6 free cash flow generation which will allow CAR to consistently invest in its business Ce a ae | and return cash to shareholders. We acknowledge the rental car business is a volatile - wen 6) model, with many moving pieces, but we believe that two substantial contributors to YTD tm am 12m pre-tax income—-RPD and Volumes—are on the upswing, and we are not overly Abs [ 448% 05% 42% 73.6% concerned about the used car market and residual values. Fel | 2% 2 TT « Why is CAR's pricing up only +1% in FY14? Management addressed this on the call, and the answer is threefold, 1) the tough winter created incremental insurance replacement demand, which tightened industry fleets more than previously expected in 1Q, and this dynamic is unexpected to unwind through the remainder of the year. 2) Given CAR's shorter booking window it only has a “tiny” portion of its summer reservations booked at this point (during the Q that generates ~65% of FY EPS). 3) CAR’s pricing N.A. RPD guidance of +1% includes Payless, which is expected to be a -50bps pricing headwind. « Leisure pricing commentary remains encouraging. CAR expects pricing for FY 14 to increase “at least” +1% in North America, on rental day growth of +4-6%. CAR's 1% RPD guidance includes the Payless brand, which is expected to be a S0bp overhand on the pricing environment in 2014. Leisure pricing and demand was solid in the Q, as CAR posted solid results in the Q with rental day growth of +5%, and RPD up +2% (excluding Payless), and +11% rental day growth and RPDs of +1% (including Payless). CAR continues to lead price increases for the industry, where it has seen “moderate” success. Vehicle mix continues to benefit CAR, with specialty and premium vehicle revenues growing +13%. Avis Budget Group, Inc. (CAR;CAR US) FYE Dec 2012A 4 =2013A 8 2014E 2014E 2015E 2015E Company Data (Prev) (Curr) (Prev) (Cure) Price ($) 51.79 EPS Reported ($) Date Of Price 08-May-14 Q1 (Mar) 0.12 0.08 0.06 0.164 - - 52-week Range ($) 56.05-26.57 Q2 (Jun) 0.94 0.50 0.59 0.61 - - Market Cap ($ mn) 5,831.55 Q3 (Sep) 1.46 1.48 1.82 1.84 - - Fiscal Year End Dec Q4 (Dec) (0.07) 0.15 0.27 0.25 - - Shares O/S (mn) 113 FY 2.44 2.20 2.74 2.87 3.55 3.71 Price Target ($) 59.00 Bloomberg EPS FY (S$) 2.42 2.17 : 2.71 : 3.46 Price Target End Date 31-Dec-14 Source: Company data, Bloomberg, J.P. Morgan estimates. ‘Bloomberg’ above denotes Bloomberg consensus estimates. See page 16 for analyst certification and important disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.jpmorganmarkets.com EFTA00295400

--=PAGE_BREAK=--

Kevin Milota North America Equity Research J.P. Morgan « Commercial pricing has turned and expected to grow +1% in FY14. From a commercial perspective, CAR posted solid results in the Q with rental day growth of +3%, and RPD up +2% (excluding Payless), and +3% rental day growth and RPDs of +2% (including Payless). CAR expects commercial pricing to post “at least” a +1% increase year-over-year for FY14. 1Q Results benefited from the work that CAR has done to take up rates with its commercial accounts (during contract renewal periods) and to shift its mix of business to more profitable customers/channels. Small business accounts experienced revenue growth of +8%, where the rates are tied—though at a discount—to the prevailing leisure rates (which also experienced growth). In April, 100% of the commercial contracts that CAR renewed were at equal or higher prices (versus the 60% rate on 4Q13 call), which is certainly a positive data point, but likely an unsustainable percentage renewal level. « Fleet depreciation expense was +1.6% higher than our estimate. CAR's net fleet cost/unit/mos came in at $304 versus our estimate of $298. In N.A. net fleet cost/unit/mos grew +7.6% year-over-year to $299, which was lower than our $303, though internationally, net fleet costs were higher than our estimate. « Net fleet costs to grow +2% to +5% worldwide and ~+2% at the mid-point in North America. CAR’s guidance for per-unit fleet costs worldwide are $295 - $305 per month, and $300 - $310 per month in North America. Management continues to expect residual values to decrease by roughly two points in 2014. At YE13, residual values as a percent of net purchase price stood at ~82%, which is consistent with historical norms, versus the outsized levels in 2011 and 2012. CAR believes the used car market will see good demand in 2014 on the heels of a growing U.S. economy and given the availability in consumer financing at rates that still low by historical standards. The supply of off-lease vehicles is expected to increase in 2014, which will have a mild dampening effect on used car prices. The company believes it should be able to mitigate the impact of higher off-lease vehicle supply through fleet utilization increases, shifting cars to Payless brand (and lengthening the holding period of those cars) and divesting cars through its expanded alternative distribution channels (direct to dealer, and direct to consumer via AutoNation). Program cars will comprise ~60-65% of CAR's NA fleet in 2014. « Total rental days beat our estimate. CAR’s total rental days increased +6.1% as they came in at 28,883 versus our estimate of 28,387, or a 1.7% beat versus our estimate. N.A. rental days increased +7.1% coming in at 21,129 versus our 20,512 estimate, or a 3.0% beat. For North America, excluding Payless, rental days increased +4%. International rental days +3.4% coming in at 7,754 versus our 7,875 estimate, or a -1.5% miss. « T&M pricing in the Q was slightly softer than we expected, but ancillary spend made up for the shortfall. CAR's North American T&M RPD was $41.77 +1.0% year- over-year. Excluding Payless, in North America, T&M revenues were 1.9%. Worldwide T&M RPD was flat on a total company basis and excluding Payless. « Rental car utilization was higher than we expected. We are pleased to see total rental car utilization up +141bps year-over-year ending the Q at 70.2%. By region, North America utilization increased +141bps, and International utilization was up +137bps, year-over-year. « CAR bought back $75m of its shares in the Q at an average price of $46.88. Included in its guidance, CAR stated that it expects to repurchase $200-300m worth of shares in 2013, so an additional $125-225m of stock excluding the repurchases made to date. CAR’s priorities for its ~$400m in free cash flow that it expects to generate in EFTA00295401

--=PAGE_BREAK=--

Kevin Milota North America Equity Research 08 May 2014 J.PMorgan 2014 are 1) tuck-in acquisitions (such as Budget & Payless licensees) but likely won't spend more than $100m on those investments and 2) share repurchases. We are modeling $300m in share repurchases in 2014-2016, though believe given CAR’s stated net corporate leverage target of 3-4x that it has substantial capacity to buy in more stock. Using our 2014-2016 estimates as a guide and assuming a 3.5x net corporate leverage target, we believe CAR’s debt capacity is ~$382m, ~$1.064B and ~$1.750B, respectively. e FY14 guidance. Revenues $8.4-8.6B (from $8.3-8.5B), EBITDA $825-900m (unchanged), WW fleet costs of $295-305 (unchanged), diluted EPS of $2.50-2.95 (from $2.45-2.85). CAR reiterated its $1B+ EBITDA target for 2015. « We are tweaking our estimates following earnings, as our FY14 adjusted EPS estimate goes to $2.87 (from $2.74) on rental car volume growth of +5.4% and T&M RPDs of 0.2%. Our FY15 goes to $3.71 (from $3.55), on rental car volume growth of +4.0% and T&M RPDs of +0.9%. « Our year-end 2014 price target goes to $59 (from $53). We are taking our year-end 2014 price target to $59 (from $53), which is derived by using a 16.0x target multiple (from 15.0x) on our 2015 EPS estimate of $3.71 (up from $3.55). We believe a premium multiple to the SPX’s 2015E P/E multiple of 14.3x (Bloomberg consensus), is warranted given CAR’s +25% EPS CAGR (from 2014E-2016E), driven by a more rational pricing environment for the rental car business in general, the inflection point in pricing for the commercial side of its business and the company’s significantly improved European operations. e Read on, for quarterly earnings comparison versus our estimates, valuation, key driver sensitivity analysis and full model. EFTA00295402

--=PAGE_BREAK=--

Kevin Milota North America Equity Research 08 May 2014 J.P. Morgan Investment Thesis, Valuation and Risks Avis Budget Group, Inc. (Overweight; Price Target: $59.00) Investment Thesis We reiterate our OW rating. We continue to believe that CAR is being undervalued given its EBITDA, EPS and FCF growth profile. We acknowledge the rental car business is a volatile model, with many moving pieces, but we believe that two substantial contributors to pre-tax income—RPD and Volumes—are on the upswing. We believe the pricing environment will continue to play out nicely as we move through 2014, and look to a stronger GDP environment to drive incremental rental demand during the year. While used car values, and their impact to residual values, remains a concern, we think CAR has put structures in place to mitigate some of the impacts to EPS and EBITDA, versus years prior. Valuation We are taking our year-end 2014 price target to $59 (from $53), which is derived by using a 16.0x target multiple (from 15.0x) on our 2015 EPS estimate of $3.71 (up from $3.55). We believe a premium multiple to the SPX’s 2015E P/E multiple of 14.3x (Bloomberg consensus), is warranted given CAR’s +25% EPS CAGR (from 2014E-2016E), driven by a more rational pricing environment for the rental car business in general, the inflection point in pricing for the commercial side of its business and the company’s significantly improved European operations. Figure 1: CAR YE14 Price Target Methodology $ in millions Existing Valuation Valuation Multiple Sensitivity Analysis 2014E 2015E 2016E 2015E 2.87 3.71 4.45 18.1x 14.0x 11.6x Current Price 51.79 51.79 $1.79 51.79 51.79 51.79 Appreciation Potential - - - B% 15% 22% EV/EBITDA Multiple Approach 2015E EBITDA 1,018 1,018 Target Multiple 8.3x 91x = Enterprise Value 9,272 Less Net Debt(EOP 2015) = Equity Value Average Diluted Shares = YE14 Price Target ec Source: J.P. Morgan estimates. 2,499 Given the emerging free cash flow story for CAR, we believe that free cash flow yield is a relevant metric for investors to consider. Presently, CAR is trading at a 6.7%, 8.6% and 9.9% free cash flow yield on our free cash flow estimates for 2014E-2016E, which is a inline, +186bps and +314bps premium to the average SPX free cash flow yield. We believe this gap is too high, given the company’s EBITDA growth profile, which is expected to grow 15% in 2014 and 2015, respectively. EFTA00295403

--=PAGE_BREAK=--

Kevin Milota North America Equity Research 08 May 2014 J.P. Morgan Figure 2: CAR FCF per share analysis $ in millions JPMe FCF Estimates 2014E 2015E 2016E Free Cash Flow 401 514 591 Free Cash Flow / Share $3.48 $4.45 $5.12 CurrentFree Cash Flow Yield 6.71% 8.60% 9.88% Discount! Premium to Avg. SPX FCF Yield -0.03% 1.86% 3.14% Estimated Yield at Price Target 8% Sensitivity to FCF Yield Chgs. / Implied YE14 PT seceeneeneeD ™% 6% 5% +100bps of Yields = $69 $81 $99 $ Change to YE14 PT $9 $22 $40 Source: J.P. Morgan estimates, Bloomberg. Valuation remains compelling, in our view, as CAR is presently trading at 18.1x, 14.0x and 11.6x our 2014, 2015 and 2016 EPS estimates, respectively. Historically, CAR has traded at an average discount of 4.0x to the SPX, and currently stands at |.1x. Since January of 2009, CAR has traded at an average forward P/E multiple of 9.3x, with a low of 0.4x (in February 2009—tecent trough multiple) to a high of 14.5x (in September 2009— recent peak multiple). On an EV/EBITDA basis, CAR is presently trading at 9.8x, 8.3x and 7.2x our 2014, 2015 and 2016 estimates, respectively. Since 2006, CAR’s average forward EV/EBITDA multiple has been 7.5x, with a high of 9.8x (in December 2008) and a low of 4.8x (in December 2011). Figure 3: CAR P/E and EV/EBITDA Valuation $ in millions Historical P/E Ratio EPS PIE CAGR Realized EPS Co 2 Year EPS Growth Multiples PEG 2014E-2016E ead ered. | 2016E 4.45 20% 11.6% 06 24.6% LT Average | LT Average | LT Average 2014E 287 30% 18.1x 06 Historical EVIEBITDA Year Mkt Cap Net Debt EV EBITDA EV/EBITDA Since 2009 2016E 1,131 2015E 5,977 2,499 8475 1,018 8.3x 7.x 2014E 5,977 2,713 8.689 884 9.8x Source: J.P. Morgan estimates. Risks to Rating and Price Target Car Rental Earnings Could Be Volatile While our near-to-medium term outlook for the Industry (and CAR earnings) is favorable, it is possible that quarterly earnings may prove volatile. For example, airline enplanements could be affected by terrorist threats; the company’s transaction volumes may fall short of expectations if competitors use opportunistic pricing EFTA00295404

--=PAGE_BREAK=--

Kevin Milota North America Equity Ri h in Milo’ teu quity Researc J.P. Morgan (particularly, in leisure markets) to gain share (perhaps, to address bloated fleet levels). Further, decreases in levels of airline passenger traffic, given that CAR derived ~71% of time and mileage revenues at on-airport locations in 2012, could materially adversely affect the company’s financial and operating performance. In addition, as mentioned earlier, short-term declines in used car prices could also affect results. Economic Risks Could Impact Rental Car and Equipment Rental Demand Given the high correlation between rental car demand and GDP growth, we believe that a sluggish recovery in the U.S. or global economy could impact demand for CAR’s business segments. Should the company not effectively match its fleet levels with demand, that could lead to over-fleeting, which would have downward pressure on pricing and financial results. CAR’s truck rental business can also be impacted by the housing market. If conditions in the housing market were to weaken, CAR may see a decline in truck rental transactions, which could have an adverse impact on its business. Additionally, key risks facing all leisure and travel-related companies include terrorism, geopolitical, and weather-related uncertainties that could severely curtail travel volume and spending levels. Highly Competitive Marketplace Could Lead to Downward Pricing Pressure While the industry is effectively an oligopoly, with three large competitors (HTZ, CAR and privately held Enterprise), CAR's business segments are highly competitive. Price is a significant competitive factor for the car and equipment rental business, and increasing prices could prove challenging. If CAR tries to increase prices, its competitors, some of which have greater resources and better access to capital (i.e. Enterprise) may seek to compete aggressively on price to gain a competitive position in a market, or to offset reduced rental demand. In a downward or overly competitive pricing environment, if CAR does not reduce its operating costs then its margins, financial results and cash flow could be at risk. The risk of competition on the basis of pricing in the truck rental industry can be even more intense than in the car rental industry because it can be more difficult to reduce the size of its truck rental fleet in response to reduced demand. EFTA00295405

--=PAGE_BREAK=--

Kevin Milota North America Equity R h in Milo’ tee ao quity Researc J.P Morgan Figure 4: CAR FY14 Guidance & JPM Estimates $ in millions [JF YNME(asof 4Qt3) | FYE (asof 1014) High-end Low-end Mid-point | High-end Low-end Mid-point | %Chg. | JPMEst. % Highi{Low) Revenue EBITDA WW Fleet Costs NA Fleet Costs IntarastExpense Non-vehicle D&A Pretax Income Diluted EPS NA RAC Segment: Rental Days EFTA00295406

--=PAGE_BREAK=--

Kevin Milota North America Equity Research JP. Morgan 08 May 2014 Figure 5: CAR Financial & Operating Results Summary, 1014 $ in millions CAR Actuals Change 1913 $ 1% Pts. 58 Vehicle Rental Revenue Other Revenue 1,264 (3) 0.2% 500 6.7% Income (loss) before income taxes Provision tr (benef from) income taxes Tax Rate Adjusted Net Income/(Loss) EBITDA Margin CAR Actuals CAR Actuals Income Statement Expense Drivers: 1014 $ He! % Pts. Rental Days {000s) 20,512 617 $41.75 0 Fleet Utlizaton 69.8% 0.9% 1.3% Rental Days (000s) = & Mileage Revenue per Day 7,875 (121) “1.5% = = 2.3% Fea Utlzaton 1.37% i 4% ie 20% Rental Days (000s) 4 p , 6.1% 28,387 . 1.7% tos & Mileage Revenue | : 0.0% $42.35 Fast Utlizaton 141% 8. 1% 1 i 1. 5% Rental Days (000s) 853 (29) “3.4% 810 * 1.7% Tot aage Revenue — 44% $76.00 Fear Utlizaton Source: Company reports and J.P. Morgan estimates. EFTA00295407

--=PAGE_BREAK=--

Kevin Milota North America Equity Ri h in Milo’ tee ao quity Researc J.P. Morgan Sensitivity Analysis to CAR’s Key Drivers Figure 6: CAR EPS Sensitivity Analysis to Change in T&M Revenue per Day (RPD) $ in millions +1% Change in RPD 2014E 2015E 2016E Total U.S. Time & Mileage Revenue ($B) 3,844 4,034 4,196 | Transadion days 93,842 97,596 100,523 =RPD $40.96 $41.33 $41.74 x 1% Change 1% 1% 1% = New RPD $41.37 $41.74 $42.16 Hypothetical Incremental Revenue ($mj $38.44 $40.34 $41.96 Assumed Flow-hru b pre-tax 90% 90% 90% Total Intl. Time & Mileage Revenue ($B) 1,646 1,724 1,793 | Transadion days 39,418 40,995 42,430 =RPD $41.76 $42.05 $42.26 x 1% Change 1% 1% 1% = New RPD $42.18 $42.47 $42.68 Hypothetical incremental Revenue ($mj $16.46 $17.24 $17.93 Assumed Flow-hru b pre-tax 90% 90% 90% Shares 112 107 103 |Annual Per Share Impact post tax (assuming 38% taxrate) $0.27 $0.30 $0.33 Assumed Target Multple 16.0x Note: Assumes 16.0x target multiple. ‘Source: J.P. Morgan estimates. EFTA00295408

--=PAGE_BREAK=--

Kevin Milota North America Equity R h in Milo’ tee quity Researc J.P Morgan Figure 7: CAR EPS Sensitivity Analysis to Change in Rental Days $ in millions +1% Ch in Rental 2014E 2015E 2016E N.A. RPD Assumption 54 55 55 ! Rental di 93,842 97,596 100,523 = N.A. RAC Revenue $5,093.90 $5,349.41 $5,564.99 x_1% Change in Volumes 1% 1% 1% = New Rental Days 94,780 98,572 101,529 Hypothetical Incremental Revenue ($m) $50.94 $53.49 $55.65 Assumed Flow-thru to pre-tax 30% 30% 30% Equals p sensivity to 1% move in RPD ($m $15.28 $16.05 $16.69 Inf. RPD Assumption 69 69 70 ! Rental di 39,418 40,995 42430 = Inf. RAC Revenue $2,705.86 $2,847.26 $2,981.30 x 1% Change in Volumes 1% 1% 1% = New Rental Days 39,812 41,405 42.854 Hypothetical Incremental Revenue ($m) $27.06 $28.47 $29.81 Assumed Flow-thru to pre-tax 30% 30% 30% Equals p sensivity to 1% move in RPD ($m $8.12 $8.54 $8.94 Equals p sensivity to 1% move in RPD ($m $23.40 $24.59 $25.64 Shares 112 107 103 Assumed Target Multiple 16.0x pothetical Change in Equity Value Note: Assumes 16.0x target multiple. Source: J.P. Morgan estimates. Figure 8: CAR EPS Sensitivity Analysis to Change in Residual Values $ in millions 2014E 2015E 2016E Change in Residual Value 1% 1% % x Average Value of Risk Vehicle atDispositon $16,000 $16,000 $16,000 Change in Residual Value $160 $160 $160 ! Average Hold Period (months) 16 16 16 Fleet Cost per Month Impact $10 $10 $10 x Risk Cars in NA Fleet (62.5% in '14, 65% in '15 223,268 239,820 244 652 Monthly Impact of 1% Change in Residual Values (Sm $2.23 $2.40 $2.45 x 12 12 12 Annual Impact of 1% Change in Residual Values ($mj, to NA, pretax $27 $29 $29 Assumed Target Multiple 16.0x Hypothetical Change in Equity Value $2.66 Note: Assumes 16.0x target multiple. ‘Source: J.P. Morgan estimates. EFTA00295409

--=PAGE_BREAK=--

Kevin Milota North America E: Ri h : lala JPMorgan CAR Model with Drivers Figure 9: CAR Income Statement $ in millions [i013 |_20iae zone | ave _| 1,203 1382 rs ro 1.26 146 «1785 ama 1 ou 2, m4 YoY % Ong. DirectOperaing Expenses Dpcarcoss Breer eprenqes Vehicde Depreciation 6 Lesee Changes, rest Tas Rate Ss aan Source: Company flings, JP. Morgan estimates. 11 EFTA00295410

--=PAGE_BREAK=--

Kevin Milota Figure 10: CAR Adjusted EBITDA and Income Statement Expense Drivers $ in millions North America Equity Research 08 May 2014 J.P Morgan inceere fees) tedire incaere tense Pretin borgin Non-veticks related D&A, irasest expense cn Corporate debt YOY% Chp. |As % of Total Net Revense Oparwing Expenses Vehicle Depreciation & Lasse Charges, net 5G 4A Vatvile internet, net Non-vaticie related D&A Intereet eapense on Corporate dey Oner Aworage Fleet Size YOY % Chg. Vehicle Depreciston & Lease Charges, nat Yoo % Chg. Deprecestion per month Vo % Chy. NA Aserage Reis! Fheet NA Vetice Depracietion & Lasse Changes, nat NLA. Floetepraciation per month oS Chy. Riek Deprecesion / Cor YOY % Chg. [Deect Operating Expenses / Rentt ays Fed Direct Cperwing Expermes (~27%) YoY % Chg Variable Orect Operating Expenses (-73%) Feartats Onye Source: Company flings, JP. Morgan estimates. 12 N2% 468% 2% 1% ass 1.5% 2% OON swe 268 281 omN B35 205 a9 ARs 16% 14% 24% aon 574,50 ba 22% m2 15.0% 300.964 ME ms 15.0% 3.823 15.0% 1086 ™ 1.42 am my wb 10.2% 730 36,501 m2 a5 5% ns 5a a0 30.527 23 1s S18 537% MS m2 m mm 14% 0.9% 4 m2 2a Kas 230 m4 “08 a4 AK Le HS 10% Met 11% 1123 2 1,205 475% ms a 09% a2 40246 m2 DH EFTA00295411

--=PAGE_BREAK=--

Kevin Milota North America Equity Research J.P. Morgan 08 May 2014 Figure 11: CAR Income Statement Revenue Drivers $ in millions Pee ais ais ats sats aes tag 2atae sade 4atde [aot] 201se T2018 19723-23018 «S11 NAN 21129-24592) 28S31 21,669 15% 20% See * 5% ‘ 7.1% ee eed MIM | ($25 HAO $3938 | SHOSt | $4177 S3N85 | SeZAD(S30T7 1.9% 19% * 02% * ote 10% um 1.0% 1.0% $815 $904 $1,073 $821 $83 $972 $1,127 59% | 33% 52% 40% 82% 76% 50% 5.0% $269 * $230 Su5 $270 ; $285 $22 $362 138 130 135 13.0 . 135 131 138 14% 32% 20% LDH : 62% 76% = 50% 29% SUK «IH OK “| 29% = 3% aE $4} $76 $82 74 $246 $65 Set $0 1% 49% 4% om * 98.0% *_ 11.0% ia $1098 $1,278 ($1,500 $1,165 126 $1378 $1,580 ¥-0-¥ 54 Chg a an ee 8 126% 7.8% 5.4% Vi2g0e —I5RSES IBGE NT.210 | 3424 | 328200 379581 383.499 327.804 24% 29% 50% 48% ‘; 50% 57% 33% 35% 693% «705% «728% TAN % | 707% 710% 72% 719% 1 % & st $5 s 9 # 7.1% 7.9% 98% 149% 74% 10.0% 10.0% 10.0% 9.312 11,950 BSB . 7754 Ga2e 127278113 57% 79% * 60% : 246° 55% 65% 55% bone] Mant $4286 $41.16 148 M16 2.3% * 1.5% 22% 23% 15% SH LK $389 $503 Ser $332 34 $578 33% 64H OATS 33 10% 39% = 4.0% $2220 ($83 UD $219 $258 S30 ar) 237 268 282 264 252 4% ACK TK “| 184% (1798 1.9% 00% 56M BAZN 858% IK BOT ‘sort $786 599 $551 ‘$664 ‘$B43 13% 11.8% ave 7 66% 69% 7.9% 122250 «(146538 «173,955 138.900 : 123466 «(154508 = 185.262 26% 48% 11% Lm 55% 6.5% 674% 8% 74.7% or s 8% 62.8% 74% 32928 S7.AB1 ATA : , 14596 (99.258 30% «62% OST 1% 61% — 62% 48% $99 42.08 $40.29 : $4206 ” sens ” $4216 03% 06% * -17% 1% 0.0% 0.2% 0.2% " si2as” $1578” $1,188 si2is ” $1376” $1855 et, ee “ 6% 85% = 5.0% $531 628 $02 ; $504 $581 $682 16.4 168 17.0 ; 175 169 174 28% 10.5% 75% 10.4% o4% am 411% BE u 45.5% 42.2% 412% S79 «$1988 «S23 74% 73% 61% 4% «5T% 702% 108% RT a3 0T 1.080 : 824 957 968 2% 4.5% 42% 458 AB 348 50% 5.0% 50% $8190 $85.2 $8.38 $7618 SB7BS $91.29 $73.15 89% 92% 71% 44% Ta 7.0% 7.0% " $2" go "$2 $61 $e $0 73 04% 02% 2m % 09% 17% 17% 1O% $a $n $3 $4 19 $19 $12 194 195 124 68 194 19.5 124 32% 09% 2 4 10.0% 50% 0% 5.0% 2% 225% or 1% Prd Hn 7% Ta 1% 21.3% a cad 2 «St08 ane 3108 1.0% 0% Ef A% “ 04% Average Fleet Sire 26,778 Ta B18 23.611 23,386 24,652 23 23613 22,199 a ma 22898 “ val 21,522 Yor¥ % Chg. 34% 6.0% 6.6% 16.1% AAG 7% AZT 6th 6.0% 6.0% a1% 5K AMS [Fleet Uiization 451% 352% 40% aT 4B 439% WAN CLEx 484% 494% 455% 46.0% 465% Source: Company flings, JP. Morgan estimates. 13 EFTA00295412

--=PAGE_BREAK=--

Kevin Milota North America E: Ri h : ———— JPMorgan Figure 12: CAR Balance Sheet & Key Balance Sheet Statistics/Drivers $ in millions 138 16 116 196 16 vez 12088 952 woe " 12104 " tomo " 974 aT 162 wer a om am wer breeetrert in AESOP LUC - retated party 2 M2 3 ‘BS Bo 6S 3 WOR 1276211. BAS__—10 AS 4 1148712974 11,490___—10+,154 | 16,557 kane —7.aNe 18.284 E sid |_ 4204 | 17.01 19.08) tras tase | s63s8 | 1339 | 19.058 | ‘Accounts payable and other current tates 1680 1473 | see | 1478 1479 1479 1473 Laem | ce | ven | ‘Short-term dat and CP of LTD 2 2 161 8 Ty 9 cd a Ee 416 3205 3505 SF 17 Mor S607 S07 37 [ie ba aT a7 ur ur ba coed 2 542 or] 16,008 1,88 14,058 97a) Py 10,778 12.90 MS 9,583 9583 we we we im | mo ae am fm | a |e Adgested EGETOA TT ord ™ interest eoxperees TM ‘5 an Tots! Comporate Ort 346 Me bet Corporate Debs 2313 2736 Tota Fleet Debt 168 (11058 Nest Fleet Detot 11,608 10.46 Acfusted EBITDA TTM / Ivers! Expense 14 15 Compe ‘BITOA aa 46 40 a8 52 128 160 126 97 m1 135 187 3B ws ma 262 et $5.56 $7.42 be rd $8.43 se 721 62% AT% OE 40% 3% HBTS Source: Company flings, JP. Morgan estimates. Figure 13: CAR Cash Flow Statement $ in millions a OO 1 O12 700 Ry eT To ae ane ara Toe Taos Tie] Source: Company flings, JP. Morgan estimates. 14 EFTA00295413

--=PAGE_BREAK=--

Kevin Milota North America Equity Research 08 May 2014 Avis Budget Group, Inc.: Summary of Financials J.P Morgan Income Statement - Annual FY13A_ FY14E FY15E FY16E Income Statement - Quarterly 1Q14A_ 2Q14E —SQ14E —AQI4E Revenues 7,937 68498 68926 9,327 Revenues 1.8624 2144 2538 1,953 Cost of goods sold (3,854) (4,082) (4,181) (4,304) Cost of goods sold (937)4 (998) (1,123) (976) Gross profit - - - - Gross profit - - - - SG&A (1,020) (1,104) (1,161) (1.227) SG&A (248)4 (297) (294) (265) D&A (1,942) (2,087) (2,183) (2.264) D&A (468) (541) = (589) (48) Operating income 1,121 1276 1402 1,532 Operating income 2094 au 532 224 EBITDA 71 8840—«1018 = 1,131 EBITDA 117A 21 424 141 Net interest income / (expense) (492) (495) (502) (511) Net interest income / (expense) (120A (133), (127) (15) Other income / (expense) - - - - Other income / (expense) - - - - Pretax income 410 516 643 738 Pretax income 264 112 333 45 Income taxes (155) (195) (244)-—((2B1)—Incorne taxes (B)A (43) (127) (17) Net income - GAAP 16 321 398 458 Net income - GAAP 184 69 205 2 Net income - recurring 255 321 398 458 — Net income - recurring 184 69 205 23 Diluted shares outstanding 115 112 107 103 Diluted shares outstanding 116A 115 115 115 EPS - GAAP 220 2.87 am 445 EPS-GAAP 0.164 0.61 1.64 0.25 EPS - recurring 223° 287 371 4.45 _ EPS- recurring 0.164 0.60 1.78 0.24 Balance Sheet and Cash Flow Data FY13A FY14E FY15E FY16E Ratio Analysis FYI3A FY14E = =FY1SE = FY16E Cash and cash equivalents 809 «1,099 1313 1,604 = Sales growth TH 7.1% 5.0% 45% Accounts receivable 1,010 «1,045 1087 1,116 EBITDA growth (8.2%) 14.7% 15.1% 11.1% Inventories - - - - EPS growth (10.0%) 302% 296% 19.9% Other current assets 632 632 632 632 Current assets 2451 2776 3032 3352 Grossman - - - - PPRE 10,196 9.45 11,663 12,088 EBIT margin (14.8%) (14.1%) (13.4%) (12.2%) Total assets 16,284 16,358 18,333 19,058 EBITDA margin 97% 10.4% 11.4% 12.1% Tax rate TTB% TM 3.0% 38.0% Total debt 10,731 11,483 12853 13,148 Net margin 3.2% 3.8% 45% 4% Total liabilities 15,513 15,585 17,462 18,029 ‘Shareholders’ equity 71 773 871 1,029 Net debt/ EBITDA 1288.9% 1174.3% 1133.7% 1021.2% Net debt / capital (book) 928% 93.1% 930% 91.8% Net income (including charges) ™71 8840-1018 1,131 D&A 1,942 2067 2183 0 Return on assets (ROA) 1.6% 2.0% 23% 24% Change in working capital 109 (86) {42} (29) Return on equity (ROE) 33.4% 41.5% 48.5% 48.2% Other - - - - Return on invested capital (ROIC) (11.5%) (11.1%) (10.4%) (5.7%) Cash flow from operations 2,622 2885 3159 1,101 Capex (154) (200) (200) (210) Free cash flow 3201 3229 3524 «61,477 Cash flow from investing activities (133) (112) (173) (212) Cash flow from financing activities (196) (106) (300) (300) Dividands - - - - Source: Company reports and J.P. Morgan estimates. Note: $ in millions (except per-share data) Fiscal year ends Dec 15 EFTA00295414

--=PAGE_BREAK=--

Kevin Milota North America Equity Research Ney one J.P Morgan Analyst Certification: The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily responsible for this report, the research analyst denoted by an “AC” on the cover or within the document individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report. For all Korea-based research analysts listed on the front cover, they also certify, as per KOFIA requirements, that their analysis was made in good faith and that the views reflect their own opinion, without undue influence or intervention. Important Disclosures © Client: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients: Avis Budget Group, Inc... © Client/Investment Banking: J.P. Morgan currently has, or had within the past 12 months, the following company/(ies) as investment banking clients: Avis Budget Group, Inc... © Client/Non-Investment Banking, Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following company/(ies) as clients, and the services provided were non-investment-banking, securities-related: Avis Budget Group, Inc.. © Client/Non-Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients, and the services provided were non-securities-related: Avis Budget Group, Inc.. © Investment Banking (past 12 months): J.P. Morgan received in the past 12 months compensation from investment banking Avis Budget Group, Inc.. © Investment Banking (next 3 months): J.P. Morgan expects to receive, or intends to seek, compensation for investment banking services in the next three months from Avis Budget Group, Inc.. © Non-Investment Banking Compensation: J.P. Morgan has received compensation in the past 12 months for products or services other than investment banking from Avis Budget Group, Inc.. Company-Specific Disclosures: Important disclosures, including price charts, are available for compendium reports and all J.P. Morgan covered companies by visiting https://jpmm.cony research/ disclosures, calling a. or e-mailing with your request. J.P. Morgan's Strategy, Technical, and Quantitative Research teams may screen — not covered = J.P. — For important disclosures for these companies, please call i: e-mail Avis Budget Group, Inc. (CAR, CAR US) Price Chart 100 Ow $53 7 [ow ss [| eee Date Rating Share Price Price Target * [ow ne | [ow sse | (Ss) (s) Price($) | 12-Apr-10 OW 14.74 20.00 «o 28-Jul-10 NR = 11.08 - 08-Oct-13 OW 28.21 36.00 10-Dec-13 OW 36.98 45.00 20 20-Feb-14 OW 43.61 53.00 o Oct Apr Oct Apr Oct Apr oe o8 oo 11 12 14 ‘Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends. Broak in coverage Jul 28, 2010 - Oct 09, 2013. The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire period. J.P. Morgan ratings or designations: OW = Overweight, N= Neutral, UW = Underweight, NR = Not Rated EFTA00295415

--=PAGE_BREAK=--

Kevin Milota North America Equity R h : teeter Racer JPMorgan Explanation of Equity Research Ratings, Designations and Analyst(s) Coverage Universe: J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the average total return of the stocks in the analyst's (or the analyst’s team’s) coverage universe.) Neutral [Over the next six to twelve months, we expect this stock will perform in line with the average total return of the stocks in the analyst's (or the analyst’s team’s) coverage universe. ] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of the stocks in the analyst's (or the analyst's team’s) coverage universe.] Not Rated (NR): J.P. Morgan has removed the rating and, if applicable, the price target, for this stock because of either a lack of a sufficient fundamental basis or for legal, regulatory or policy reasons. The previous rating and, if applicable, the price target, no longer should be relied upon. An NR designation is not a recommendation or a rating. In our Asia (ex-Australia) and U.K. small- and mid-cap equity research, each stock’s expected total return is compared to the expected total return of a benchmark country market index, not to those analysts’ coverage universe. If it does not appear in the Important Disclosures section of this report, the certifying analyst's coverage universe can be found on J.P. Morgan’s research website, www_jpmorganmarkets.com. Coverage Universe: Milota, Kevin: Avis Budget Group, Inc. (CAR), Carnival Corporation (CCL), Harley-Davidson (HOG), Hertz Global Holdings, Inc. (HTZ), Norwegian Cruise Line (NCLH), Royal Caribbean Cruises (RCL), Ryman Hospitality Properties (RHP) J.P. Morgan Equity Research Ratings Distribution, as of March 31, 2014 Overweight Neutral Underweight (buy) {hold) (sell) IP. Morgan Global Equity Research Coverage 44% IB clicnts* 58% JPMS Equity Research Coverage 45% % IB clients* 78% 67% *Percentage of investment banking clicnts in cach rating category. For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold rating category; and our Underweight rating falls into a sell rating category. Please note that stocks with an NR designation are not included in the table above. Equity Valuation and Risks: For valuation methodology and risks associated with covered companies or price targets for covered companies, please see the most recent company-specific research report at htt jpmorg: ets.com, contact the primary analyst or your J.P. Morgan representative, or email Equity Analysts' Compensation: The equity research analysts responsible for the preparation of this report receive compensation based upon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues. Other Disclosures J.P. Morgan ("JPM") is the global brand name for J.P. Morgan Securities LLC ("JPMS") and its affiliates worldwide. J.P. Morgan Cazenove is a marketing name for the U.K- investment banking businesses and EMEA cash equities and equity research businesses of JPMorgan Chase & Co. and its subsidiaries. All research reports made available to clients are simultancously available on our clicnt website, J.P. Morgan Markets. Not all research content is redistributed, e-mailed or made available to third-party aggregators. For all research reports available on a particular stock, please contact your sales representative. Options related research: If the information contained herein regards options related research, such information is available only to persons who have received the proper option risk disclosure documents. For a copy of the Option Clearing Corporation's Characteristics and Risks of Standardized Options, please contact your J.P. Morgan Representative or visit the OCC's website at http2//www.optionsclearing.com/publications/risks/riskstoc. pdf Legal Entities Disclosures U.S.: JPMS is a member of NYSE, FINRA, SIPC and the NFA. JPMorgan Chase Bank, N.A. is a member of FDIC. U.K.: JPMorgan Chase N.A., London Branch, is authorised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority and to limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from J.P. Morgan on request. J.P. Morgan Securities ple (JPMS plc) is a member of the London Stock Exchange and is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England & Wales No. 2711006. Registered Office 25 Bank Street, London, E14 5JP. South Africa: J.P. Morgan Equities South Africa Proprictary Limited is a member of the Johannesburg Securities Exchange and is regulated by the Financial Services Board. Hong Kong: J.P. Morgan Sccurities (Asia Pacific) Limited (CE number AAJ321) is regulated by the Hong Kong Monctary Authority and the Securities and Futures Commission in Hong Kong and/or J.P. Morgan Broking (Hong Kong) Limited (CE number AABO027) is regulated by the Securities and Futures Commission in Hong Kong. Korea: J.P. Morgan Sccuritics (Far East) Ltd, Scoul Branch, is regulated by the Korea Financial Supervisory Service. Australia: J.P. Morgan Australia Limited (JPMAL) (ABN 52 002 888 O11/AFS Licence No: 238188) is regulated by ASIC and J.P. Morgan Securities Australia Limited (JPMSAL) (ABN 61 003 245 234/AFS Licence No: 238066) is regulated by ASIC and is a Market, Clearing and Settlement Participant of ASX Limited and CHI-X. Taiwan: J.P.Morgan Securitics (Taiwan) Limited is a participant of the Taiwan Stock Exchange (company-type) and regulated by the Taiwan Securities and Futures Bureau. India: J.P. Morgan India Private Limited, having its registered office at J.P. Morgan Tower, Off. C.S.T. Road, Kalina, Santacruz East, Mumbai - 400098, is a member of the National Stock Exchange of India Limited (SEBI Registration Number - INB 230675231 /INF 23067523 LINE 230675231) and Bombay Stock Exchange Limited (SEBI 7 EFTA00295416

--=PAGE_BREAK=--

Kevin Milota North America Equity R h : ———— JPMorgan Registration Number - INB 010675237/INF 010675237) and is regulated by Securities and Exchange Board of India. For non local research reports, this material is not distributed in India by J.P. Morgan India Private Limited. Thailand: This material is issued and distributed in Thailand by JPMorgan Securities (Thailand) Ltd., which is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission and its registered address is 3rd Floor, 20 North Sathorn Road, Silom, Bangrak, Bangkok 10500. Indonesia: PT J.P. Morgan Sccurities Indonesia is a member of the Indonesia Stock Exchange and is regulated by the OJK a.k.a. BAPEPAM LK. Philippines: J.P. Morgan Securities Philippines Inc. is a Trading Participant of the Philippine Stock Exchange and a member of the Securities Clearing Corporation of the Philippines and the Sccurities Investor Protection Fund. It is regulated by the Securities and Exchange Commission. Brazil: Banco J.P. Morgan S.A. is regulated by the Comissao de Valores Mobiliarios (CVM) and by the Central Bank of Brazil. Mexico: J.P. Morgan Casa de Bolsa, S.A. de C.V_, J.P. Morgan Grupo Financicro is a member of the Mexican Stock Exchange and authorized to act as a broker dealer by the National Banking and Securities Exchange Commission. Singapore: This material is issued and distributed in Singapore by or through J.P. Morgan Securities Singapore Private Limited (JPMSS) [MCI (P) 199/03/2014 and Co. Reg. No.: 199405335R] which is a member of the Singapore Exchange Securities Trading Limited and is regulated by the Monetary Authority of Singapore (MAS) and/or JPMorgan Chase Bank, N.A., Singapore branch (JPMCB Singapore) which is regulated by the MAS. This material is provided in Singapore only to accredited investors, expert investors and institutional investors, as defined in Section 4A of the Securities and Futures Act, Cap. 289. Recipients of this document are to contact JPMSS or JPMCB Singapore in respect of any matters arising from, or in connection with, the document. Japan: JPMorgan Sccurities Japan Co., Ltd. is regulated by the Financial Services Agency in Japan. Malaysia: This material is issued and distributed in Malaysia by JPMorgan Sccurities (Malaysia) Sdn Bhd (18146-X) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets Services License issued by the Securities Commission in Malaysia. Pakistan: J. P. Morgan Pakistan Broking (Pvt.) Ltd is a member of the Karachi Stock Exchange and regulated by the Securities and Exchange Commission of Pakistan. Saudi Arabia: J.P. Morgan Saudi Arabia Ltd. is authorized by the Capital Market Authority of the Kingdom of Saudi Arabia (CMA) to carry out dealing as an agent, arranging, advising and custody, with respect to securities business under licence number 35-07079 and its registered address is at 8th Floor, Al-Faisaliyah Tower, King Fahad Road, P.O. Box 51907, Riyadh 11553, Kingdom of Saudi Arabia. Dubai: JPMorgan Chase Bank, N.A., Dubai Branch is regulated by the Dubai Financial Services Authority (DFSA) and its registered address is Dubai International Financial Centre - Building 3, Level 7, PO Box 506551, Dubai, UAE. Country and Region Specific Disclosures U.K. and European Economic Area (EEA): Unless specified to the contrary, issued and approved for distribution in the U.K. and the EEA by JPMS ple. Investment research issued by JPMS plc has been prepared in accordance with JPMS plc's policies for managing conflicts of interest arising as a result of publication and distribution of investment research. Many European regulators require a firm to establish, implement and maintain such a policy. This report has been issued in the U.K. only to persons of a kind described in Article 19 (5), 38, 47 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (all such persons being referred to as "relevant persons”). This document must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is only available to relevant persons and will be engaged in only with relevant persons. In other EEA countries, the report has been issued to persons regarded as professional investors (or equivalent) in their home jurisdiction. Australia: This material is issued and distributed by JPMSAL in Australia to "wholesale clients" only. This material docs not take into account the specific investment objectives, financial situation or particular needs of the recipient. The recipient of this material must not distribute it to any third party or outside Australia without the prior written consent of JPMSAL. For the purposes of this paragraph the term "wholesale client” has the meaning given in section 761G of the Corporations Act 2001. Germany: This material is distributed in Germany by J.P. Morgan Securities ple, Frankfurt Branch and J.P.Morgan Chase Bank, N.A., Frankfurt Branch which are regulated by the Bundesanstalt fiir Finanzdienstlcistungsaufsicht. Hong Kong: The 1% ownership disclosure as of the previous month end satisfies the requirements under Paragraph 16-5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission. (For research published within the first ten days of the month, the disclosure may be based on the month end data from two months prior.) J.P. Morgan Broking (Hong Kong) Limited is the liquidity provider/market maker for derivative warrants, callable bull bear contracts and stock options listed on the Stock Exchange of Hong Kong Limited. An updated list can be found on HKEx website: http2//www-.hkex.com_hk. Japan: There is a risk that a loss may occur due to a change in the price of the shares in the case of share trading, and that a loss may occur due to the exchange rate in the case of foreign share trading. In the case of share trading, JPMorgan Securities Japan Co., Ltd., will be receiving a brokerage fee and consumption tax (shouhizei) calculated by multiplying the executed price by the commission rate which was individually agreed between JPMorgan Securities Japan Co., Ltd., and the customer in advance. Financial Instruments Firms: JPMorgan Securities Japan Co., Ltd., Kanto Local Finance Bureau (kinsho) No. &2 Participating Association / Japan Securities Dealers Association, The Financial Futures Association of Japan, Type II Financial Instruments Firms Association and Japan Investment Advisers Association. Korea: This report may have been edited or contributed to from time to time by affiliates of J.P. Morgan Securities (Far East) Ltd, Scoul Branch. Singapore: JPMSS and/or its affiliates may have a holding in any of the securities discussed in this report; for securities where the holding is 1% or greater, the specific holding is disclosed in the Important Disclosures section above. India: For private circulation only, not for sale. Pakistan: For private circulation only, not for sale. New Zealand: This material is issued and distributed by JPMSAL in New Zealand only to persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest money. JPMSAL does not issue or distribute this material to members of "the public” as determined in accordance with section 3 of the Securities Act 1978. The recipient of this material must not distribute it to any third party or outside New Zealand without the prior written consent of JPMSAL. Canada: The information contained herein is not, and under no circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell securities described herein, or solicitation of an offer to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of the securities described herein in Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly registered under applicable securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made. The information contained herein is under no circumstances to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. To the extent that the information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territory of Canada, any trades in such securities must be conducted through a dealer registered in Canada. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed judgment upon these materials, the information contained herein or the merits of the securities described herein, and any representation to the contrary is an offence. Dubai: This rt has been issued to persons regarded as professional clients as defined under the DFSA rules. Brazil: Ombudsman J.P. Morgan: a General: Additional information is available upon request. Information has been obtained from sources believed to be reliable but JPMorgan Chase & Co. or its affiliates and/or subsidiaries (collectively J.P. Morgan) do not warrant its completeness or accuracy except with respect to any disclosures relative to JPMS and/or its affiliates and the analyst's involvement with the issuer that is the subject of the research. All pricing is as of the close of market for the securities discussed, unless otherwise stated. Opinions and estimates constitute our judgment as of the date of this matcrial and are subject to change 18 EFTA00295417

--=PAGE_BREAK=--

Kevin Milota North America Equity R h . te eet Booty Reem JPMorgan without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients. The recipient of this report must make its own independent decisions regarding any securities or financial instruments mentioned herein. JPMS distributes in the U.S. research published by non-U.S. affiliates and accepts responsibility for its contents. Periodic updates may be provided on companies/industrics based on company specific developments or announcements, market conditions or any other publicly available information. Clients should contact analysts and execute transactions through a J.P. Morgan subsidiary or affiliate in their home jurisdiction unless governing law permits otherwise. “Other Disclosures” last revised April 5, 2014. Copyright 2014 JPMorgan Chase & Co. All rights reserved. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. 19 EFTA00295418