Avis Budget Group Delivers Ninth Consecutive Year of Revenue Growth

Parsippany, New Jersey, UNITED STATES


PARSIPPANY, N.J., Feb. 20, 2019 (GLOBE NEWSWIRE) -- Avis Budget Group, Inc. (NASDAQ: CAR) today reported results for its fourth quarter and full year ended December 31, 2018.

  • Revenues grew 2% to $2.1 billion in the fourth quarter and 3% for the full year to $9.1 billion
  • Americas per-unit fleet costs were 7% lower for both the quarter and the year excluding exchange rate effects
  • Net income was $13 million ($0.16 diluted earnings per share) in the quarter and $165 million ($2.06 diluted earnings per share) for the year
  • Adjusted EBITDA was $142 million in the fourth quarter and $781 million in the full year
  • Adjusted diluted earnings per share increased 18% to $0.53 in the quarter and 28% to $3.65 for the year
  • Company provides 2019 guidance

“Our Company had a very successful 2018, expanding margin and reporting our ninth consecutive year of revenue growth,” said Larry De Shon, Avis Budget Group President and Chief Executive Officer.  "We ended the year strong, reporting record fourth quarter Adjusted EBITDA and Adjusted earnings per share, driven by a more than 2% increase in Americas pricing and substantially lower overall per-unit fleet costs.”

“Looking forward, we are investing in our future and leveraging innovation to build on our position as a leading global provider of mobility solutions, while also focusing on improving our profitability today,” said De Shon.

Total Company

Three Months Ended December 31,
 
$ millions20182017% change
Revenues2,0502,0192%
Net Income13220n/m
Adjusted EBITDA1421401%
Adjusted Net Income41388%

n/m   not meaningful

  • Revenue grew 2% in the quarter, driven by a 3% increase in volume, partially offset by $32 million (2%) effect from currency exchange movements. A strong increase in Americas pricing was offset by a lower International performance

  • The Company delivered a 6% improvement in overall per-unit fleet costs in the quarter

  • For the quarter, net income was $13 million, the prior year benefiting from the 2017 Tax Act.  Adjusted EBITDA increased 1% to a record $142 million and increased 4% excluding exchange rate effects. Adjusted net income grew 8% to $41 million, or $0.53 per diluted share, an 18% increase

Americas

 Three Months Ended December 31,
 
$ millions20182017% change
Revenues1,4041,3822%
Adjusted EBITDA12310715%
  • Revenues in the quarter improved 2% over the prior year with both higher commercial and leisure pricing
  • Per-Unit Fleet Costs were 7% lower driven by a strong used car market and a fourth quarter record number of cars sold through alternative disposition channels
     
  • Adjusted EBITDA increased 15% to a fourth quarter record $123 million and margin expanded by 100 basis points

"Our pricing for the quarter was the highest year-over-year increase since 2014 as we pursued rate over volume to drive higher value rentals,” said Joe Ferraro, President Americas.

International

Three Months Ended December 31,
 
$ millions20182017% change
Revenues6466371%
Adjusted EBITDA3545(22%)
  • Revenue growth in the quarter was driven by higher volume, partially offset by pressure on pricing and a $28 million (4%) impact from currency exchange
  • Per-Unit Fleet Costs were unchanged in the quarter and utilization improved by 40 basis points
     
  • Adjusted EBITDA was $35 million for the quarter, with increased volume, strong cost controls and the increased utilization offset by lower pricing and $3 million impact from currency exchange movements

“We improved utilization in the quarter and increased commercial volume double-digits, partially offset by the continued difficult pricing environment in Europe,” said Mark Servodidio, President International.

Finance and Liquidity

During 2018, we amended the terms of our Floating Rate Term Loan due 2022 and Senior revolving credit facility maturing 2021 and extended the maturities to 2025 and 2023, respectively. We completed two five-year U.S. asset-backed note offerings totaling $950 million, extended our $2.7 billion asset-backed conduit facilities to November 2020, and increased the capacity of our €1.65 billion European rental fleet securitization to €1.8 billion and extended its maturity to 2021. We also issued €350 million of 4¾% euro-denominated Senior Notes due January 2026, the proceeds of which were used to redeem all $400 million of our outstanding 5⅛% Senior Notes due June 2022.

Our corporate debt was approximately $3,551 million at the end of the fourth quarter and cash and cash equivalents totaled $615 million.  

Note:  Corporate debt maturities exclude capital leases which are secured by liens on the related assets, short-term debt and current
portion of long-term debt and $11 million per annum of Term Loan amortization, net of deferred financing fees.

Capital Allocation

We spent $91 million on tuck-in acquisitions in 2018, including acquiring Turiscar in Portugal, Morini in Italy and licensees in Germany, France and the U.S. We also purchased a 40% stake in our Avis and Budget licensee in Greece.

We repurchased 5.9 million of our common shares in 2018 at a cost of $200 million, including repurchasing 2.5 million shares in the fourth quarter at a cost of $71 million. Weighted average diluted shares outstanding (as used to calculate Adjusted diluted earnings per share) were 80.1 million at year end compared to 84.8 million in the prior year, a 6% year-over-year reduction.

Outlook
The Company's full-year 2019 outlook includes non-GAAP financial measures and excludes the effect of future changes in currency exchange rates.  The Company believes that it is impracticable to provide a reconciliation to the most comparable GAAP measures due to the forward-looking nature of these forecasted Adjusted earnings measures and the degree of uncertainty associated with forecasting the reconciling items and amounts.  The Company further believes that providing estimates of the amounts that would be required to reconcile the forecasted adjusted measures to forecasted GAAP measures would imply a degree of precision that would be confusing or misleading to investors.  The after-tax effect of such reconciling items could be significant to the Company’s future quarterly or annual results.

The Company today provides its 2019 guidance:

$ millions *2019 Estimates
Revenues$9,200 - $9,500
Adjusted EBITDA$750 - $850
Adjusted pretax income$350 - $450
Adjusted net income$260 - $320
Adjusted diluted earnings per share$3.35 - $4.20
Adjusted free cash flow$250 - $300
* Excluding Adjusted diluted earnings per share.

Additional guidance details:

Americas

% changevs prior year
Rental days0.0% - 2.0%
Revenue per Day0.5% - 2.5%
Per-Unit Fleet Costs per Month1.0% - 3.0%
Revenue per Day and Per-Unit Fleet Costs per Month exclude exchange rate effects.

International

% changevs prior year
Rental days3.0% - 6.0%
Revenue per Day(1.0%) - (4.0%)
Per-Unit Fleet Costs per Month0.0% - 2.0%
Revenue per Day and Per-Unit Fleet Costs per Month exclude exchange rate effects.

Investor Conference Call
Avis Budget Group will host a conference call to discuss fourth quarter and full year results and its outlook on February 21, 2019, at 8:30 a.m. (ET).  Investors may access the call at ir.avisbudgetgroup.com or by dialing (630) 395-0021 and providing the participant passcode 2995545.  The supporting presentation will also be available at ir.avisbudgetgroup.com.  Investors are encouraged to dial in approximately 10 minutes prior to the call.  A replay will be available at ir.avisbudgetgroup.com following the call.  A telephone replay will also be available from 11:00 a.m. (ET) on February 21, 2019 until 10:00 p.m. (ET) on March 21, 2019 at (402) 220-6430.

About Avis Budget Group
Avis Budget Group is a leading global provider of mobility solutions through our three most recognized brands, Avis, Budget and Zipcar, together with several other brands well recognized in their respective markets. We and our licensees operate in approximately 180 countries with more than 11,000 car and truck rental locations throughout the world. We generally maintain a leading share of airport car rental revenue in North America, Europe and Australasia, and we operate one of the leading truck rental businesses in the United States. Our Zipcar brand is one of the world’s leading car sharing businesses offering an alternative to traditional vehicle rental and ownership. Avis Budget Group has approximately 30,000 employees and is headquartered in Parsippany, N.J. More information is available at www.avisbudgetgroup.com.

Forward-Looking Statements
Certain statements in this press release constitute “forward-looking statements.” Any statements that refer to outlook, expectations or other characterizations of future events, circumstances or results, including all statements related to our future results, future fleet costs, acquisition synergies, cost-saving initiatives, cash flows and future share repurchases are forward-looking statements. Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this press release include, but are not limited to, the high level of competition in the mobility industry, changes in our fleet costs as a result of a change in the cost of new vehicles, manufacturer recalls and/or the value of used vehicles, disruption in the supply of new vehicles, disposition of vehicles not covered by manufacturer repurchase programs, the financial condition of the manufacturers that supply our rental vehicles which could effect their ability to perform their obligations under our repurchase and/or guaranteed depreciation arrangements, any change in economic conditions generally, particularly during our peak season and/or in key market segments, any change in travel demand, including changes in airline passenger traffic, any occurrence or threat of terrorism, any changes to the cost or supply of fuel, risks related to acquisitions or integration of acquired businesses, risks associated with litigation, governmental or regulatory inquiries or investigations, risks related to the security of our information technology systems, disruptions in our communication networks, changes in tax or other regulations, a significant increase in interest rates or borrowing costs, our ability to obtain financing for our global operations, including the funding of our vehicle fleet via asset-backed securities markets, any fluctuations related to the mark-to-market of derivatives which hedge our exposure to exchange rates, interest rates and fuel costs, our ability to meet the covenants contained in the agreements governing our indebtedness, and our ability to accurately estimate our future results and implement our strategy for growth and cost savings. Other unknown or unpredictable factors could also have material adverse effects on the Company’s performance or achievements. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in Avis Budget Group’s Annual Report on Form 10-K for the year ended December 31, 2017 and in other filings and furnishings made by the Company with the Securities and Exchange Commission (the "SEC") from time to time. The Company undertakes no obligation to publicly update any forward-looking statements to reflect subsequent events of circumstances.

Non-GAAP Financial Measures and Key Metrics
This release includes financial measures such as Adjusted EBITDA and Adjusted free cash flow, as well as other financial measures that exclude certain items that are not considered generally accepted accounting principles (“GAAP”) measures as defined under SEC rules. Important information regarding such measures is contained on Table 1, Table 4, Table 5 and Appendix I of this release. The Company and its management believe that these non-GAAP measures are useful to investors in measuring the comparable results of the Company period-over-period. The GAAP measures most directly comparable to Adjusted EBITDA, Adjusted free cash flow, Adjusted pretax income (loss), Adjusted net income (loss) and Adjusted diluted earnings (loss) per share are net income (loss), net cash provided by operating activities, income(loss) before income taxes, net income (loss) and diluted earnings (loss) per share, respectively. Foreign currency translation effects on the Company’s results are quantified by translating the current period’s non-U.S. dollar-denominated results using the currency exchange rates of the prior period of comparison including any related gains and losses on currency hedges. Per-unit fleet costs, which represent vehicle depreciation, lease charges and gain or loss on vehicle sales, divided by average rental fleet, is calculated on a per-month basis.

Share Repurchase Program
The Company’s share repurchases may occur through open market purchases or trading plans pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements and other factors. The repurchase program may be suspended, modified or discontinued at any time without prior notice. The repurchase program has no set expiration or termination date.

 



Table 1

Avis Budget Group, Inc.
SUMMARY DATA SHEET
(In millions, except per share data)

  Three Months Ended December 31, Year Ended December 31,
  2018 2017 % Change 2018 2017 % Change
Income Statement and Other Items           
 Revenues$2,050  $2,019  2% $9,124  $8,848  3%
 Income before income taxes3  1  n/m 267  211  27%
 Net income13  220  n/m 165  361  n/m
 Earnings per share - diluted0.16  2.65  n/m 2.06  4.25  n/m
             
 Adjusted Earnings Measures (non-GAAP) (A)           
 Adjusted EBITDA142  140  1% 781  735  6%
 Adjusted pretax income42  42  0% 398  346  15%
 Adjusted net income41  38  8% 292  242  21%
 Adjusted earnings per share - diluted0.53  0.45  18% 3.65  2.85  28%
             
  As of        
  December
31, 2018
 December
31, 2017
        
Balance Sheet Items           
 Cash and cash equivalents$615  $611         
 Vehicles, net11,474  10,626         
 Debt under vehicle programs10,232  9,221         
 Corporate debt3,551  3,599         
 Stockholders' equity414  573         


Segment Results           
 Three Months Ended December 31, Year Ended December 31,
 2018 2017 % Change 2018 2017 % Change
Revenues           
Americas$1,404  $1,382  2% $6,186  $6,100  1%
International646  637  1% 2,938  2,748  7%
Corporate and Other    n/m     n/m
Total Company$2,050  $2,019  2% $9,124  $8,848  3%
              
Adjusted EBITDA           
Americas$123  $107  15% $558  $486  15%
International35  45  (22%) 287  305  (6%)
Corporate and Other(16) (12) n/m (64) (56) n/m
Total Company$142  $140  1% $781  $735  6%
 
n/m   Not meaningful.
(A) See Table 5 for reconciliations of non-GAAP measures and Appendix I for definitions.
 
 

Table 2

Avis Budget Group, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)

  Three Months Ended
December 31,
 Year Ended
December 31,
  2018 2017 2018 2017
Revenues$2,050  $2,019  $9,124  $8,848 
         
Expenses       
 Operating1,078  1,059  4,639  4,472 
 Vehicle depreciation and lease charges, net486  504  2,179  2,221 
 Selling, general and administrative267  245  1,220  1,120 
 Vehicle interest, net77  71  314  286 
 Non-vehicle related depreciation and amortization66  65  256  259 
 Interest expense related to corporate debt, net:       
 Interest expense49  46  188  188 
 Early extinguishment of debt14    19  3 
 Restructuring and other related charges8  11  22  63 
 Transaction-related costs, net2  15  20  23 
 Impairment  2    2 
Total expenses2,047  2,018  8,857  8,637 
         
Income before income taxes3  1  267  211 
Provision for (benefit from) income taxes(10) (219) 102  (150)
Net income$13  $220  $165  $361 
         
Earnings per share       
 Basic$0.16  $2.70  $2.08  $4.32 
 Diluted$0.16  $2.65  $2.06  $4.25 
         
Weighted average shares outstanding       
 Basic76.9  81.3  79.3  83.4 
 Diluted77.6  82.7  80.1  84.8 


Table 3

Avis Budget Group, Inc.
KEY METRICS SUMMARY

  Three Months Ended
December 31,
 Year Ended
December 31,
  2018 2017 % Change 2018 2017 % Change
             
Americas            
             
Rental Days (000’s) 24,648  24,774  (1%) 108,732  107,348  1%
Revenue per Day, excluding exchange rate effects (A) $57.15  $55.78  2% $56.99  $56.82  0%
Average Rental Fleet 395,607  393,509  1% 425,957  421,536  1%
Vehicle Utilization 67.7% 68.4% (70) bps 69.9% 69.8% 10 bps
Per-Unit Fleet Costs per Month, excluding exchange rate effects (A) $289  $312  (7%) $307  $330  (7%)
             
International            
             
Rental Days (000’s) 13,692  12,311  11% 57,797  53,524  8%
Revenue per Day, excluding exchange rate effects (A) $49.18  $51.71  (5%) $49.95  $51.35  (3%)
Average Rental Fleet 213,719  193,297  11% 221,823  205,577  8%
Vehicle Utilization 69.6% 69.2% 40 bps 71.4% 71.3% 10 bps
Per-Unit Fleet Costs per Month, excluding exchange rate effects (A) $232  $232  0% $224  $223  0%
             
Total            
             
Rental Days (000’s) 38,340  37,085  3% 166,529  160,872  4%
Revenue per Day, excluding exchange rate effects (A) $54.30  $54.43  0% $54.55  $55.00  (1%)
Average Rental Fleet 609,326  586,806  4% 647,780  627,113  3%
Vehicle Utilization 68.4% 68.7% (30) bps 70.4% 70.3% 10 bps
Per-Unit Fleet Costs per Month, excluding exchange rate effects (A) $269  $286  (6%) $279  $295  (5%)
_______      
Refer to Table 6 for key metrics calculations and Appendix I for key metrics definitions.
(A) The following metrics include changes in currency exchange rates:
  Three Months Ended
December 31,
 Year Ended
December 31,
  2018 2017 % Change 2018 2017 % Change
             
Americas            
             
Revenue per Day $56.93  $55.78  2% $56.89  $56.82  0%
Per-Unit Fleet Costs per Month $288  $312  (8%) $307  $330  (7%)
             
International            
             
Revenue per Day $47.22  $51.71  (9%) $50.84  $51.35  (1%)
Per-Unit Fleet Costs per Month $223  $232  (4%) $229  $223  3%
             
Total            
             
Revenue per Day $53.46  $54.43  (2%) $54.79  $55.00  0%
Per-Unit Fleet Costs per Month $265  $286  (7%) $280  $295  (5%)


Table 4

Avis Budget Group, Inc.
CONSOLIDATED CONDENSED SCHEDULES OF CASH FLOWS AND ADJUSTED FREE CASH FLOWS
(In millions)

CONSOLIDATED CONDENSED SCHEDULE OF CASH FLOWS

 Year Ended
December 31, 2018
Operating Activities 
Net cash provided by operating activities$2,609 
  
Investing Activities 
Net cash used in investing activities exclusive of vehicle programs(349)
Net cash used in investing activities of vehicle programs(3,077)
Net cash used in investing activities(3,426)
  
Financing Activities 
Net cash provided by (used in) financing activities exclusive of vehicle programs(262)
Net cash provided by (used in) financing activities of vehicle programs929 
Net cash provided by (used in) financing activities667 
  
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash(16)
Net change in cash and cash equivalents, program and restricted cash(166)
Cash and cash equivalents, program and restricted cash, beginning of period (A)901 
Cash and cash equivalents, program and restricted cash, end of period (B)$735 


 _______
(A)Consists of cash and cash equivalents of $611 million, program cash of $283 million and restricted cash of $7 million.
(B)Consists of cash and cash equivalents of $615 million, program cash of $115 million and restricted cash of $5 million.
  

CONSOLIDATED SCHEDULE OF ADJUSTED FREE CASH FLOWS (C)

 Year Ended
December 31, 2018
Income before income taxes$267 
Add-back of non-vehicle related depreciation and amortization256 
Add-back of debt extinguishment costs19 
Add-back of transaction-related costs20 
Add-back of non-operational charges related to shareholder activist activity9 
Working capital and other(4)
Capital expenditures(231)
Tax payments, net of refunds(53)
Vehicle programs and related (D)147 
Adjusted Free Cash Flow430 
  
Acquisition and related payments, net of acquired cash (E)(124)
Borrowings, net of debt repayments(34)
Transaction-related payments(13)
Non-operational payments related to shareholder activist activity(9)
Repurchases of common stock(216)
Change in program cash(164)
Change in restricted cash(1)
Foreign exchange effects, financing costs and other(35)
Net change in cash and cash equivalents, program and restricted cash (per above)$(166)


 _______
(C)See Appendix I for a definition of Adjusted Free Cash Flow.
(D)Includes vehicle-backed borrowings (repayments) that are incremental to amounts required to fund incremental (reduced) vehicle and vehicle-related assets.
(E)Includes equity method investment of $37 million in our licensee in Greece, and excludes $4 million of vehicles purchased as part of a domestic licensee, which was financed through incremental vehicle-backed borrowings.
  

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW

 Year Ended
December 31, 2018
Net cash provided by operating activities (per above)$2,609 
Investing activities of vehicle programs(3,077)
Financing activities of vehicle programs929 
Capital expenditures(231)
Proceeds received on asset sales17 
Change in program cash164 
Change in restricted cash1 
Acquisition-related payments(4)
Non-operational payments related to shareholder activist activity9 
Transaction-related payments13 
Adjusted Free Cash Flow (per above)$430 
    
    

Table 5

Avis Budget Group, Inc.
DEFINITIONS AND RECONCILIATIONS OF NON-GAAP MEASURES
(In millions, except per share data)

The accompanying press release includes certain non-GAAP (generally accepted accounting principles) financial measures as defined under SEC rules. To the extent not provided in the press release or accompanying tables, we have provided the reasons we present these non-GAAP financial measures and a description of what they represent in Appendix I. For each non-GAAP financial measure a reconciliation to the most comparable GAAP financial measure is calculated and presented below with reconciliations of net income, income before income taxes and diluted earnings per share to Adjusted EBITDA and our Adjusted earnings measures.

   Three Months Ended December 31,
Reconciliation of net income to Adjusted EBITDA:2018 2017
     
 Net income$13  $220 
 Benefit from income taxes(10) (219)
 Income before income taxes3  1 
      
 Add certain items:   
 Acquisition-related amortization expense15  13 
 Early extinguishment of debt14   
 Restructuring and other related charges8  11 
 Transaction-related costs, net2  15 
 Impairment  2 
 Adjusted pretax income42  42 
     
 Add:Non-vehicle related depreciation and amortization (excluding acquisition-related amortization expense)51  52 
  Interest expense related to corporate debt, net (excluding early extinguishment of debt)49  46 
 Adjusted EBITDA$142  $140 
      
Reconciliation of net income to adjusted net income: 
      
 Net income$13  $220 
 Add certain items, net of tax:   
  Acquisition-related amortization expense10  9 
  Early extinguishment of debt10   
  Restructuring and other related charges6  8 
  Transaction-related costs, net2  13 
  Impairment  1 
  Income tax provision from the Tax Act (A)  (213)
 Adjusted net income$41  $38 
      
 Earnings per share - Diluted$0.16  $2.65 
      
 Adjusted diluted earnings per share$0.53  $0.45 
      
 Shares used to calculate Adjusted diluted earnings per share77.6  82.7 


_______   
(A)In 2017, as a result of the Tax Cuts and Jobs Act (the "Tax Act"), the adjustment of deferred taxes due to the change in corporate tax rates and recognition of incremental tax expense related to cumulative foreign earnings were a benefit of $317 million and a provision of $104 million, respectively, representing the estimated impact.


   Year Ended December 31,
Reconciliation of net income to Adjusted EBITDA:2018 2017
     
 Net income$165  $361 
 Provision for (benefit from) income taxes102  (150)
 Income before income taxes267  211 
      
 Add certain items:   
 Acquisition-related amortization expense61  58 
 Restructuring and other related charges22  63 
 Transaction-related costs, net20  23 
 Early extinguishment of debt19  3 
 Non-operational charges related to shareholder activist activity (A)9   
 Impairment  2 
 Charges for legal matter, net (B)  (14)
 Adjusted pretax income398  346 
     
 Add:Non-vehicle related depreciation and amortization (excluding acquisition-related amortization expense)195  201 
  Interest expense related to corporate debt, net (excluding early extinguishment of debt)188  188 
 Adjusted EBITDA$781  $735 
      
Reconciliation of net income to Adjusted net income: 
      
 Net income$165  $361 
 Add certain items, net of tax:   
  Acquisition-related amortization expense43  39 
  Restructuring and other related charges17  41 
  Transaction-related costs, net16  19 
  Early extinguishment of debt14  2 
  Non-operational charges related to shareholder activist activity7   
  Impairment  1 
  Charges for legal matter, net  (8)
  Income tax provision from the Tax Act (C)30  (213)
 Adjusted net income$292  $242 
      
 Earnings per share - Diluted$2.06  $4.25 
      
 Adjusted diluted earnings per share$3.65  $2.85 
      
 Shares used to calculate Adjusted diluted earnings per share80.1  84.8 


_______   
(A)Reported within selling, general and administrative expenses in our Consolidated Statements of Operations.
(B)Reported within operating expenses in our Consolidated Statements of Operations.
(C)In 2018, as a result of the Tax Act, the adjustment of incremental tax expense related to cumulative foreign earnings initially recorded in the fourth quarter of 2017. In 2017, as a result of the Tax Act, the adjustment of deferred taxes due to the change in corporate tax rates and recognition of incremental tax expense related to cumulative foreign earnings were a benefit of $317 million and a provision of $104 million, respectively, representing the estimated impact.


Table 6

Avis Budget Group, Inc.
KEY METRICS CALCULATIONS
($ in millions, except as noted)

   Three Months Ended December 31, 2018 Three Months Ended December 31, 2017
   Americas International Total Americas International Total
Revenue per Day (RPD)           
 Revenue$1,404  $646  $2,050  $1,382  $637  $2,019 
 Currency exchange rate effects4  28  32       
 Revenue excluding exchange rate effects$1,408  $674  $2,082  $1,382  $637  $2,019 
 Rental days (000's)24,648  13,692  38,340  24,774  12,311  37,085 
 RPD excluding exchange rate effects
  (in $'s)
$57.15  $49.18  $54.30  $55.78  $51.71  $54.43 
             
Vehicle Utilization           
 Rental days (000's)24,648  13,692  38,340  24,774  12,311  37,085 
 Average rental fleet395,607  213,719  609,326  393,509  193,297  586,806 
 Number of days in period92  92  92  92  92  92 
 Available rental days (000's)36,396  19,662  56,058  36,203  17,783  53,986 
 Vehicle utilization67.7% 69.6% 68.4% 68.4% 69.2% 68.7%
              
Per-Unit Fleet Costs           
 Vehicle depreciation and lease charges, net$342  $144  $486  $369  $135  $504 
 Currency exchange rate effects1  5  6       
  $343  $149  $492  $369  $135  $504 
 Average rental fleet395,607  213,719  609,326  393,509  193,297  586,806 
 Per-unit fleet costs (in $'s)$866  $696  $806  $937  $697  $858 
 Number of months in period3  3  3  3  3  3 
 Per-unit fleet costs per month excluding exchange rate effects (in $'s)$289  $232  $269  $312  $232  $286 


   Year Ended December 31, 2018 Year Ended December 31, 2017
   Americas International Total Americas International Total
Revenue per Day (RPD)           
 Revenue$6,186  $2,938  $9,124  $6,100  $2,748  $8,848 
 Currency exchange rate effects10  (51) (41)      
 Revenue excluding exchange rate effects$6,196  $2,887  $9,083  $6,100  $2,748  $8,848 
 Rental days (000's)108,732  57,797  166,529  107,348  53,524  160,872 
 RPD excluding exchange rate effects
  (in $'s)
$56.99  $49.95  $54.55  $56.82  $51.35  $55.00 
             
Vehicle Utilization           
 Rental days (000's)108,732  57,797  166,529  107,348  53,524  160,872 
 Average rental fleet425,957  221,823  647,780  421,536  205,577  627,113 
 Number of days in period365  365  365  365  365  365 
 Available rental days (000's)155,474  80,966  236,440  153,861  75,035  228,896 
 Vehicle utilization69.9% 71.4% 70.4% 69.8% 71.3% 70.3%
              
Per-Unit Fleet Costs           
 Vehicle depreciation and lease charges, net$1,568  $611  $2,179  $1,671  $550  $2,221 
 Currency exchange rate effects1  (13) (12)      
  $1,569  $598  $2,167  $1,671  $550  $2,221 
 Average rental fleet425,957  221,823  647,780  421,536  205,577  627,113 
 Per-unit fleet costs (in $'s)$3,684  $2,693  $3,345  $3,965  $2,672  $3,541 
 Number of months in period12  12  12  12  12  12 
 Per-unit fleet costs per month excluding exchange rate effects (in $'s)$307  $224  $279  $330  $223  $295 


_______   
Our calculation of rental days and revenue per day may not be comparable to the calculation of similarly-titled metrics by other companies. Currency exchange rate effects are calculated by translating the current-year results at the prior-period average exchange rates plus any related gains and losses on currency hedges.
 

Appendix I

Avis Budget Group, Inc.
DEFINITIONS OF NON-GAAP MEASURES AND KEY METRICS

Adjusted EBITDA
The accompanying press release presents Adjusted EBITDA, which represents income (loss) from continuing operations before non-vehicle related depreciation and amortization, any impairment charges, restructuring and other related charges, early extinguishment of debt costs, non-vehicle related interest, transaction-related costs, net charges for unprecedented personal-injury legal matters, non-operational charges related to shareholder activist activity and income taxes. Net charges for unprecedented personal-injury legal matters are recorded within operating expenses in our consolidated statement of operations. We have revised our definition of Adjusted EBITDA to exclude non-operational charges related to shareholder activist activity. Non-operational charges related to shareholder activist activity include third party advisory, legal and other professional service fees and are recorded within selling, general and administrative expenses in our consolidated statement of operations. We did not revise prior years’ Adjusted EBITDA amounts because there were no costs similar in nature to these costs. Adjusted EBITDA includes stock-based compensation expense and deferred financing fee amortization totaling $11 million and $10 million in fourth quarter 2018 and 2017, respectively, and totaling $43 million and $34 million in the year ended December 31, 2018 and 2017, respectively.

We and our management believe that Adjusted EBITDA is useful to investors as a supplemental measure in evaluating the aggregate performance of our operating businesses and in comparing our results from period to period. Adjusted EBITDA is the measure that is used by our management, including our chief operating decision maker, to perform such evaluation. Adjusted EBITDA is also a component in the determination of management's compensation. Adjusted EBITDA should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with GAAP and our presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies. A reconciliation of Adjusted EBITDA from net income (loss) recognized under GAAP is provided on Table 5.

Adjusted Earnings Non-GAAP Measures
The accompanying press release and tables present Adjusted pretax income (loss), Adjusted net income (loss) and Adjusted diluted earnings (loss) per share, which exclude certain items. We and our management believe that these measures referred to above are useful to investors as supplemental measures in evaluating the aggregate performance of the Company. We exclude restructuring and other related charges, transaction-related costs, costs related to early extinguishment of debt and other certain items as such items are not representative of the results of operations of our business less a provision for income taxes derived utilizing applicable statutory tax rates for each item. A reconciliation of our Adjusted earnings Non-GAAP measures from the appropriate measures recognized under GAAP is provided on Table 5.

Adjusted Free Cash Flow
Represents Net Cash Provided by Operating Activities adjusted to reflect the cash inflows and outflows relating to capital expenditures, the investing and financing activities of our vehicle programs, asset sales, if any, and to exclude debt extinguishment costs, transaction-related costs and non-operational charges related to shareholder activist activity. We have revised our definition of Adjusted Free Cash Flow to exclude non-operational charges related to shareholder activist activity. We did not revise prior years’ Adjusted Free Cash Flow amounts because there were no costs similar in nature to these costs. We believe that Adjusted Free Cash Flow is useful to management and investors in measuring the cash generated that is available to be used to repay debt obligations, repurchase stock, pay dividends and invest in future growth through new business development activities or acquisitions. Adjusted Free Cash Flow should not be construed as a substitute in measuring operating results or liquidity, and our presentation of Adjusted Free Cash Flow may not be comparable to similarly-titled measures used by other companies.  A reconciliation of Adjusted Free Cash Flow to the appropriate measure recognized under GAAP is provided on Table 4.

Available Rental Days
Defined as Average Rental Fleet times the numbers of days in a given period.

Average Rental Fleet
Represents the average number of vehicles in our fleet during a given period of time.

Currency Exchange Rate Effects
Represents the difference between current-period results as reported and current-period results translated at the prior-period average exchange rates plus any related currency hedges.

Net Corporate Leverage
Represents corporate debt, minus cash and cash equivalents, divided by Adjusted EBITDA for the twelve months prior to the date of calculation.

Per-Unit Fleet Costs
Represents vehicle depreciation, lease charges and gain or loss on vehicles sales, divided by Average Rental Fleet.

Rental Days
Represents the total number of days (or portion thereof) a vehicle was rented during a 24-hour period.

Revenue per Day
Represents revenues divided by Rental Days.

Vehicle Utilization
Represents Rental Days divided by Available Rental Days.

 

                    

        

Contact Data