Avis Budget Group, Inc. (NASDAQ:CAR) today reported results for its
first quarter ended March 31, 2018.
- Revenue grew 7% to a record $2.0 billion in the first
quarter
- Net loss improved by $20 million
- Adjusted EBITDA improved by $29 million
- Company reaffirms its projected full-year 2018
results
"The first quarter has our year starting on a very positive note
with strong demand, higher underlying pricing in the Americas,
improved utilization and lower per-unit fleet costs," said Larry De
Shon, Avis Budget Group President and Chief Executive
Officer. “With both pricing and fleet costs in the Americas
having stabilized, the benefits of our strategic initiatives were
clearly evident this quarter with year-over-year profitability
improving significantly."
|
|
|
|
|
|
|
$
millions * |
2018 |
|
2017 |
|
% change |
|
Revenues |
1,968 |
|
1,839 |
|
7 |
% |
Net loss |
(87 |
) |
(107 |
) |
19 |
% |
Adjusted EBITDA |
2 |
|
(27 |
) |
n/m |
|
Per-unit
fleet costs excluding exchange rate effects (in $'s) |
286 |
|
297 |
|
(4 |
%) |
*
Excluding per-unit fleet costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue growth in the quarter was driven by a 5% increase in
total rental days, strong pricing in the Americas under our
historical T&M per day metric and a 3% benefit from currency
exchange. This strong revenue performance and a 4% reduction in
local currency per-unit fleet costs led to Adjusted EBITDA
improving by $29 million year-over-year. Net loss was $87
million, or $1.08 per diluted share and Adjusted net loss improved
to $60 million, or $0.74 per share.
Business Segment Discussion
Americas
|
|
|
|
|
$
millions * |
2018 |
|
|
2017 |
|
% change |
|
Revenues |
1,348 |
|
|
1,314 |
|
3 |
% |
Adjusted EBITDA |
15 |
|
|
(20 |
) |
n/m |
|
Per-unit
fleet costs excluding exchange rate effects (in $'s) |
322 |
|
|
335 |
|
(4 |
%) |
*
Excluding per-unit fleet costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue growth in the quarter was driven by a 3% increase in
volume. Revenue per day was unchanged and increased 2% under
our historical T&M per day metric. This revenue
performance together with 4% lower per-unit fleet costs and a 120
basis point improvement in utilization resulted in Adjusted EBITDA
increasing significantly to $15 million.
International
|
|
|
|
|
$
millions * |
2018 |
|
|
2017 |
|
% change |
|
Revenues |
620 |
|
|
525 |
|
18 |
% |
Adjusted EBITDA |
3 |
|
|
7 |
|
(57 |
%) |
Per-unit
fleet costs excluding exchange rate effects (in $'s) |
208 |
|
|
209 |
|
0 |
% |
*
Excluding per-unit fleet costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue growth in the quarter was driven by 9% higher volume and
a $61 million (12%) benefit from foreign currency, partially offset
by 2% lower local currency revenue per day (up 1% under our
historical T&M metric). The strong volume growth and a $4
million benefit from currency were offset by lower pricing, higher
marketing investment and increased airport concession fees,
resulting in Adjusted EBITDA of $3 million for the quarter.
Balance Sheet
The Company's corporate debt was approximately $3.6 billion at
the end of the first quarter of 2018 and cash and cash equivalents
totaled $544 million, compared to $3.6 billion of corporate debt
and cash and cash equivalents of $611 million for the year ended
December 31, 2017.
Other Items
Annual Stockholders Meeting -
We have scheduled our 2018 Annual Meeting of Stockholders for May
23, 2018 in New York, NY. Stockholders of record as of the close of
business on March 26, 2018 will be entitled to vote at the annual
meeting.
OutlookOur full-year 2018 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 metrics 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 reconciling items could
be significant to the Company’s future quarterly or annual
results.
The Company today reaffirmed its estimated full-year 2018
results as follows:
|
|
$
millions * |
2018 Estimates |
Revenues |
$9,200
- $9,450 |
Adjusted EBITDA |
$740 -
$820 |
Adjusted pretax
income |
$330 -
$410 |
Adjusted net
income |
$240 -
$310 |
Adjusted diluted
earnings per share |
$2.90
- $3.75 |
Adjusted
free cash flow |
$325 - $375 |
*
Excluding Adjusted diluted earnings per share. |
|
|
|
Additional Guidance Details:
Americas
|
|
%
change |
vs prior year |
Rental days |
1.0% -
3.0% |
Total revenue per
day |
0.0% -
2.0% |
Per-unit
fleet costs |
(1.0%) - 1.0% |
Total
revenue per day and per-unit fleet costs exclude the effect of
changes in currency exchange rates. Total revenue per day
also reflects the effect of the newly adopted revenue
recognition standard pertaining to customer loyalty
programs. |
|
|
International
|
|
%
change |
vs prior year |
Rental days |
5.0% -
7.0% |
Total revenue per
day |
(2.0%)
- 0.0% |
Per-unit
fleet costs |
0.0% - 2.0% |
Total
revenue per day and per-unit fleet costs exclude the effect of
changes in currency exchange rates. |
|
|
Investor Conference Call
Avis Budget Group will host a conference call to discuss first
quarter results and its outlook on May 3, 2018, at 8:30 a.m.
(ET). Investors may access the call and supporting
presentation materials at ir.avisbudgetgroup.com or by dialing
(630) 395-0021 and providing the participant passcode
2995545. Investors are encouraged to dial in approximately 10
minutes prior to the call. A web replay will be available at
ir.avisbudgetgroup.com following the call. A telephone replay
will be available from 11:00 a.m. (ET) on May 3 until 10:00 p.m.
(ET) on May 17 at (203) 369-0194.
About Avis Budget GroupAvis Budget Group, Inc.
is a leading global provider of mobility solutions, both
through its Avis and Budget brands, which have more than 11,000
rental locations in approximately 180 countries around the
world, and through its Zipcar brand, which is the world’s
leading car sharing network, with more than one million members.
Avis Budget Group operates most of its car rental offices in
North America, Europe and Australasia directly, and operates
primarily through licensees in other parts of the world. Avis
Budget Group has approximately 31,000 employees and is
headquartered in Parsippany, N.J. More information is
available at www.avisbudgetgroup.com.
Forward-Looking StatementsCertain statements in
this press release constitute “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Statements preceded by, followed by or that otherwise
include the words “believes,” “expects,” “anticipates,”
“intends,” “projects,” “estimates,” “plans,” “may increase,”
“forecast” and similar expressions or future or conditional
verbs such as “will,” “should,” “would,” “may” and “could”
are based upon then current assumptions and expectations and
are generally forward-looking in nature and not historical
facts. Any statements that refer to outlook, expectations or other
characterizations of future events, circumstances or results,
including all statements related to our outlook, future results,
future fleet costs, acquisition synergies, cost-saving
initiatives and future share repurchases are also 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 Company’s
ability to promptly and effectively integrate acquired
businesses, any change in economic conditions generally,
particularly during our peak season or in key market segments,
the high level of competition in the vehicle rental industry, a
change 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 travel demand, including changes
in airline passenger traffic, any occurrence or threat of
terrorism, 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 the
asset-backed securities market, any changes to the cost
or supply of fuel, 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 financial and other covenants contained in the
agreements governing our indebtedness, risks associated with
litigation, governmental or regulatory inquiries or
investigations involving the Company, changes in tax or other
regulations, changes to our share repurchase plans, risks
related to acquisitions, and our ability to accurately estimate our
future results and implement our strategy for cost savings and
growth. Other unknown or unpredictable factors could also have
material adverse effects on the Company’s performance or
achievements. In light of these risks, uncertainties, assumptions
and factors, the forward-looking events discussed in this
press release may not occur. You are cautioned not to
place undue reliance on these forward-looking statements,
which speak only as of the date stated, or if no date
is stated, as of the date of this press release. 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 included under headings such
as “Forward-Looking Statements,” “Risk Factors” and
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” and in other filings and
furnishings made by the Company with the SEC from time
to time. The Company undertakes no obligation to release
publicly any revisions to any forward-looking statements, to
report events or to report the occurrence of unanticipated
events.
Non-GAAP Financial MeasuresThis release
includes financial measures such as Adjusted EBITDA and Adjusted
free cash flow, as well as metrics 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 plus 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.
|
Table 1 |
Avis Budget Group, Inc. |
SUMMARY DATA SHEET |
(In millions, except per share
data) |
|
|
|
|
Three Months Ended March 31, |
|
|
|
2018 |
|
2017 |
|
% Change |
Income Statement and Other Items |
|
|
|
|
|
|
Revenues |
$ |
1,968 |
|
|
$ |
1,839 |
|
|
7 |
% |
|
Loss before
income taxes |
(129 |
) |
|
(165 |
) |
|
22 |
% |
|
Net
loss |
(87 |
) |
|
(107 |
) |
|
19 |
% |
|
Loss per
share - Diluted |
(1.08 |
) |
|
(1.25 |
) |
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Metrics (non-GAAP) (A) |
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
2 |
|
|
(27 |
) |
|
n/m |
|
|
Adjusted
pretax loss |
(92 |
) |
|
(125 |
) |
|
26 |
% |
|
Adjusted
net loss |
(60 |
) |
|
(81 |
) |
|
26 |
% |
|
Adjusted
loss per share - Diluted |
(0.74 |
) |
|
(0.94 |
) |
|
21 |
% |
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
|
March 31,2018 |
|
December 31,2017 |
|
|
Balance Sheet Items |
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
544 |
|
|
$ |
611 |
|
|
|
|
Vehicles,
net |
12,354 |
|
|
10,626 |
|
|
|
|
Debt under
vehicle programs |
10,382 |
|
|
9,221 |
|
|
|
|
Corporate
debt |
3,607 |
|
|
3,599 |
|
|
|
|
Stockholders’ equity |
455 |
|
|
573 |
|
|
|
|
|
|
|
|
|
Segment Results |
|
|
|
|
|
|
Three Months Ended March 31, |
|
2018 |
|
2017 |
|
% Change |
Revenues |
|
|
|
|
|
Americas |
$ |
1,348 |
|
|
$ |
1,314 |
|
|
3 |
% |
International |
620 |
|
|
525 |
|
|
18 |
% |
Corporate and Other |
- |
|
|
- |
|
|
n/m |
|
Total Company |
$ |
1,968 |
|
|
$ |
1,839 |
|
|
7 |
% |
|
|
|
|
|
|
|
|
Adjusted EBITDA (A) |
|
|
|
|
|
Americas |
$ |
15 |
|
|
$ |
(20 |
) |
|
n/m |
|
International |
3 |
|
|
7 |
|
|
(57 |
%) |
Corporate and Other |
(16 |
) |
|
(14 |
) |
|
n/m |
|
Total Company |
$ |
2 |
|
|
$ |
(27 |
) |
|
n/m |
|
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 March 31, |
|
|
2018 |
|
2017 |
Revenues |
$ |
1,968 |
|
|
$ |
1,839 |
|
|
|
|
|
|
Expenses |
|
|
|
|
Operating |
1,092 |
|
|
1,049 |
|
|
Vehicle depreciation
and lease charges, net |
515 |
|
|
504 |
|
|
Selling, general and
administrative |
296 |
|
|
262 |
|
|
Vehicle interest,
net |
72 |
|
|
64 |
|
|
Non-vehicle related
depreciation and amortization |
61 |
|
|
63 |
|
|
Interest expense
related to corporate debt, net: |
|
|
|
|
Interest expense |
46 |
|
|
49 |
|
|
Early extinguishment of debt |
5 |
|
|
3 |
|
|
Restructuring and other
related charges |
6 |
|
|
7 |
|
|
Transaction-related
costs, net |
4 |
|
|
3 |
|
Total
expenses |
2,097 |
|
|
2,004 |
|
|
|
|
|
|
Loss before income taxes |
(129 |
) |
|
(165 |
) |
Benefit
from income taxes |
(42 |
) |
|
(58 |
) |
Net
loss |
$ |
(87 |
) |
|
$ |
(107 |
) |
|
|
|
|
|
Loss per share |
|
|
|
|
Basic |
$ |
(1.08 |
) |
|
$ |
(1.25 |
) |
|
Diluted |
$ |
(1.08 |
) |
|
$ |
(1.25 |
) |
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
Basic |
81.0 |
|
|
85.7 |
|
|
Diluted |
81.0 |
|
|
85.7 |
|
|
Table 3 |
Avis Budget Group, Inc. |
SEGMENT DRIVER ANALYSIS |
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
2018 |
|
2017 |
|
% Change |
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days
(000’s) |
|
24,942 |
|
|
24,271 |
|
|
3 |
% |
|
|
Revenue per Day
excluding exchange rate effects (A) |
|
$ |
53.96 |
|
|
$ |
54.13 |
|
|
0 |
% |
|
|
Average Rental
Fleet |
|
398,630 |
|
|
394,712 |
|
|
1 |
% |
|
|
Vehicle
Utilization |
|
69.5 |
% |
|
68.3 |
% |
|
120
bps |
|
|
|
Per-Unit Fleet Costs
per Month excluding exchange rate effects (A) |
|
$ |
322 |
|
|
$ |
335 |
|
|
(4 |
%) |
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days
(000’s) |
|
11,514 |
|
|
10,578 |
|
|
9 |
% |
|
|
Revenue per Day
excluding exchange rate effects (A) |
|
$ |
48.59 |
|
|
$ |
49.65 |
|
|
(2 |
%) |
|
|
Average Rental
Fleet |
|
184,806 |
|
|
170,535 |
|
|
8 |
% |
|
|
Vehicle
Utilization |
|
69.2 |
% |
|
68.9 |
% |
|
30
bps |
|
|
|
Per-Unit Fleet Costs
per Month excluding exchange rate effects (A) |
|
$ |
208 |
|
|
$ |
209 |
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days
(000’s) |
|
36,456 |
|
|
34,849 |
|
|
5 |
% |
|
|
Revenue per Day
excluding exchange rate effects (A) |
|
$ |
52.27 |
|
|
$ |
52.77 |
|
|
(1 |
%) |
|
|
Average Rental
Fleet |
|
583,436 |
|
|
565,247 |
|
|
3 |
% |
|
|
Vehicle
Utilization |
|
69.4 |
% |
|
68.5 |
% |
|
90
bps |
|
|
|
Per-Unit Fleet Costs
per Month excluding exchange rate effects (A) |
|
$ |
286 |
|
|
$ |
297 |
|
|
(4 |
%) |
_______ |
Rental days, revenue per day and vehicle utilization are
calculated based on the actual rental of the vehicle during a
24-hour period. Our calculation of rental days and revenue per day
may not be comparable to the calculation of similarly-titled
statistics by other companies. Refer to Table 6 for segment driver
calculations and Appendix I for driver definitions. |
(A) |
The following metrics include changes in currency exchange
rates: |
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
2018 |
|
2017 |
|
% Change |
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
per Day |
|
$ |
54.04 |
|
|
$ |
54.13 |
|
|
0 |
% |
|
|
Per-Unit
Fleet Costs per Month |
|
$ |
323 |
|
|
$ |
335 |
|
|
(4 |
%) |
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
per Day |
|
$ |
53.86 |
|
|
$ |
49.65 |
|
|
8 |
% |
|
|
Per-Unit
Fleet Costs per Month |
|
$ |
233 |
|
|
$ |
209 |
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
per Day |
|
$ |
53.98 |
|
|
$ |
52.77 |
|
|
2 |
% |
|
|
Per-Unit
Fleet Costs per Month |
|
$ |
294 |
|
|
$ |
297 |
|
|
(1 |
%) |
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 |
|
|
|
|
Three Months EndedMarch 31, 2018 |
Operating Activities |
|
Net cash provided by operating activities |
$ |
503 |
|
|
|
|
|
Investing Activities |
|
Net cash used in investing activities exclusive of vehicle
programs |
(82 |
) |
Net cash used in investing activities of vehicle programs |
(1,654 |
) |
Net cash used in investing activities |
(1,736 |
) |
|
|
|
|
Financing Activities |
|
Net cash provided by (used in) financing activities exclusive
of vehicle programs |
(30 |
) |
Net cash provided by (used in) financing activities of vehicle
programs |
1,054 |
|
Net cash provided by (used in) financing activities |
1,024 |
|
|
|
|
|
Effect of
changes in exchange rates on cash and cash equivalents, program and
restricted cash |
9 |
|
Net change
in cash and cash equivalents, program and restricted cash |
(200 |
) |
Cash and cash equivalents, program and restricted cash,
beginning of period |
901 |
|
Cash and cash equivalents, program and restricted cash, end
of period |
$ |
701 |
|
|
CONSOLIDATED SCHEDULE OF ADJUSTED FREE CASH
FLOWS (A) |
|
|
|
Three Months EndedMarch 31, 2018 |
Loss before
income taxes |
$ |
(129 |
) |
Add-back of
non-vehicle related depreciation and amortization |
61 |
|
Add-back of
debt extinguishment costs |
5 |
|
Add-back of
transaction-related costs |
4 |
|
Add-back of
non-operational charges related to shareholder activist
activity |
9 |
|
Working
capital and other |
55 |
|
Capital
expenditures |
(57 |
) |
Tax
payments, net of refunds |
(2 |
) |
Vehicle
programs and related (B) |
41 |
|
Adjusted Free Cash Flow |
(13 |
) |
|
|
|
|
Acquisition
and related payments, net of acquired cash
(C) |
(25 |
) |
Borrowings,
net of debt repayments |
(9 |
) |
Transaction-related payments |
(3 |
) |
Non-operational payments related to shareholder activist
activity |
(1 |
) |
Repurchases
of common stock |
(14 |
) |
Change in
program cash |
(142 |
) |
Change in
restricted cash |
4 |
|
Foreign
exchange effects, financing costs and other |
3 |
|
Net
change in cash and cash equivalents, program and restricted cash
(per above) |
$ |
(200 |
) |
|
_______ |
(A) |
See
Appendix I for a description of Adjusted Free Cash Flow. |
(B) |
Includes
vehicle-backed borrowings (repayments) that are incremental to
amounts required to fund incremental (reduced) vehicle and
vehicle-related assets. |
(C) |
Includes
equity method investment of $19 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 |
|
|
|
|
Three Months EndedMarch 31, 2018 |
Net
cash provided by operating activities (per above) |
$ |
503 |
|
Investing activities of vehicle programs |
(1,654 |
) |
Financing activities of vehicle programs |
1,054 |
|
Capital expenditures |
(57 |
) |
Proceeds received on asset sales |
4 |
|
Change in program cash |
142 |
|
Change in restricted cash |
(4 |
) |
Acquisition-related payments |
(4 |
) |
Transaction-related payments |
3 |
|
Adjusted Free Cash Flow (per above) |
$ |
(13 |
) |
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. A reconciliation to the most comparable
financial measure is calculated and presented below in accordance
with GAAP for each non-GAAP financial measure. |
|
Reconciliations of net loss, loss before income taxes and diluted
loss per share to Adjusted EBITDA and our Adjusted earnings metrics
are as follows: |
|
|
|
|
Three Months Ended March 31, |
Reconciliation of net loss to Adjusted
EBITDA: |
2018 |
|
2017 |
|
|
|
|
|
|
Net
loss |
$ |
(87 |
) |
|
$ |
(107 |
) |
|
Benefit
from income taxes |
(42 |
) |
|
(58 |
) |
|
Loss before income taxes |
(129 |
) |
|
(165 |
) |
|
|
|
|
|
|
|
Add certain
items: |
|
|
|
|
Acquisition-related amortization expense |
13 |
|
|
14 |
|
|
Non-operational charges related to shareholder activist
activity (A) |
9 |
|
|
- |
|
|
Restructuring and other related charges |
6 |
|
|
7 |
|
|
Early extinguishment of debt |
5 |
|
|
3 |
|
|
Transaction-related costs, net |
4 |
|
|
3 |
|
|
Charges for legal matter, net (B) |
- |
|
|
13 |
|
|
Adjusted pretax loss |
(92 |
) |
|
(125 |
) |
|
|
|
|
|
|
Add: |
Non-vehicle related
depreciation and amortization (excluding acquisition-related
amortization expense) |
48 |
|
|
49 |
|
|
|
Interest expense
related to corporate debt, net (excluding early extinguishment of
debt) |
46 |
|
|
49 |
|
|
Adjusted EBITDA |
$ |
2 |
|
|
$ |
(27 |
) |
|
|
|
|
|
|
Reconciliation of net loss to adjusted net
loss: |
|
|
|
|
|
|
|
|
Net
loss |
$ |
(87 |
) |
|
$ |
(107 |
) |
|
Add certain
items, net of tax: |
|
|
|
|
|
Acquisition-related
amortization expense |
9 |
|
|
9 |
|
|
|
Non-operational charges
related to shareholder activist activity |
7 |
|
|
- |
|
|
|
Restructuring and other
related charges |
4 |
|
|
5 |
|
|
|
Early extinguishment of
debt |
4 |
|
|
2 |
|
|
|
Transaction-related
costs, net |
3 |
|
|
2 |
|
|
|
Charges for legal
matter, net |
- |
|
|
8 |
|
|
Adjusted net loss |
$ |
(60 |
) |
|
$ |
(81 |
) |
|
|
|
|
|
|
|
Loss per share - Diluted |
$ |
(1.08 |
) |
|
$ |
(1.25 |
) |
|
|
|
|
|
|
|
Adjusted diluted loss per share |
$ |
(0.74 |
) |
|
$ |
(0.94 |
) |
|
|
|
|
|
|
|
Shares used to calculate Adjusted diluted loss per
share |
81.0 |
|
|
85.7 |
|
|
|
|
|
|
|
|
(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. |
Table 6 |
Avis Budget Group, Inc. |
SEGMENT DRIVER CALCULATIONS |
($ in millions, except as noted) |
|
|
|
|
Three Months Ended March 31,
2018 |
|
Three Months Ended March 31,
2017 |
|
|
|
Americas |
|
International |
|
TotalCompany |
|
Americas |
|
International |
|
TotalCompany |
Revenue per Day (RPD) |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
1,348 |
|
|
$ |
620 |
|
|
$ |
1,968 |
|
|
$ |
1,314 |
|
|
$ |
525 |
|
|
$ |
1,839 |
|
|
Currency
exchange rate effects |
(2 |
) |
|
(61 |
) |
|
(63 |
) |
|
- |
|
|
- |
|
|
- |
|
|
Revenue
excluding exchange rate effects |
$ |
1,346 |
|
|
$ |
559 |
|
|
$ |
1,905 |
|
|
$ |
1,314 |
|
|
$ |
525 |
|
|
$ |
1,839 |
|
|
Rental days
(000's) |
24,942 |
|
|
11,514 |
|
|
36,456 |
|
|
24,271 |
|
|
10,578 |
|
|
34,849 |
|
|
RPD
excluding exchange rate effects (in $'s) |
$ |
53.96 |
|
|
$ |
48.59 |
|
|
$ |
52.27 |
|
|
$ |
54.13 |
|
|
$ |
49.65 |
|
|
$ |
52.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle Utilization |
|
|
|
|
|
|
|
|
|
|
|
|
Rental days
(000's) |
24,942 |
|
|
11,514 |
|
|
36,456 |
|
|
24,271 |
|
|
10,578 |
|
|
34,849 |
|
|
Average
rental fleet |
398,630 |
|
|
184,806 |
|
|
583,436 |
|
|
394,712 |
|
|
170,535 |
|
|
565,247 |
|
|
Number of
days in period |
90 |
|
|
90 |
|
|
90 |
|
|
90 |
|
|
90 |
|
|
90 |
|
|
Available
rental days (000's) |
35,877 |
|
|
16,632 |
|
|
52,509 |
|
|
35,524 |
|
|
15,348 |
|
|
50,872 |
|
|
Vehicle
utilization (A) |
69.5 |
% |
|
69.2 |
% |
|
69.4 |
% |
|
68.3 |
% |
|
68.9 |
% |
|
68.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per-Unit Fleet Costs |
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
depreciation and lease charges, net |
$ |
386 |
|
|
$ |
129 |
|
|
$ |
515 |
|
|
$ |
396 |
|
|
$ |
108 |
|
|
$ |
504 |
|
|
Currency
exchange rate effects |
(1 |
) |
|
(13 |
) |
|
(14 |
) |
|
- |
|
|
- |
|
|
- |
|
|
|
$ |
385 |
|
|
$ |
116 |
|
|
$ |
501 |
|
|
$ |
396 |
|
|
$ |
108 |
|
|
$ |
504 |
|
|
Average
rental fleet |
398,630 |
|
|
184,806 |
|
|
583,436 |
|
|
394,712 |
|
|
170,535 |
|
|
565,247 |
|
|
Per-unit
fleet costs (in $'s) |
$ |
966 |
|
|
$ |
625 |
|
|
$ |
858 |
|
|
$ |
1,005 |
|
|
$ |
628 |
|
|
$ |
891 |
|
|
Number of
months in period |
3 |
|
|
3 |
|
|
3 |
|
|
3 |
|
|
3 |
|
|
3 |
|
|
Per-unit
fleet costs per month excluding exchange rate effects (in $'s) |
$ |
322 |
|
|
$ |
208 |
|
|
$ |
286 |
|
|
$ |
335 |
|
|
$ |
209 |
|
|
$ |
297 |
|
_______ |
Currency exchange rate effects are calculated by translating
the current-year results at the prior-period average exchange
rate. |
(A) Calculated as rental days divided by
available rental days. |
Appendix I
Avis Budget Group,
Inc.DEFINITIONS OF NON-GAAP MEASURES AND
DRIVERS
Adjusted EBITDAThe 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 $12
million and $7 million in first quarter 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 loss
recognized under GAAP is provided on Table 5.
Adjusted Earnings MetricsThe 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 Metrics from
the appropriate measures recognized under GAAP is provided on Table
5.
Adjusted Free Cash FlowRepresents 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 repurchase stock, repay
debt obligations, 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 DaysDefined as Average Rental
Fleet times the numbers of days in a given period.
Average Rental FleetRepresents the average
number of vehicles in our fleet during a given period of time.
Currency Exchange Rate EffectsRepresents the
difference between current-period results as reported and
current-period results translated at the prior-period average
exchange rate.
Per-Unit Fleet CostsRepresents vehicle
depreciation, lease charges and gain or loss on vehicles sales,
divided by Average Rental Fleet.
Rental DaysRepresents the total number of days
(or portion thereof) a vehicle was rented during a 24-hour
period.
Revenue per DayRepresents revenues divided by
Rental Days.
Vehicle UtilizationRepresents Rental Days
divided by Available Rental Days.
Contacts
Media Contact:
Alice Pereira
(973) 496-3916
PR@avisbudget.com
Investor Contact:
Neal Goldner
(973) 496-5086
IR@avisbudget.com
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