Avis Budget Group, Inc. (
NASDAQ: CAR) today
announced second quarter 2021 financial results.
We ended the second quarter with revenues up more
than three times prior year and 1% above second quarter 2019, at
$2.4 billion. Our revenues were driven by increased revenue per day
compared to second quarter 2020, which represented the depths of
the pandemic. Rental days also increased compared to prior year as
demand continues to normalize.
Net income was $398 million and our Adjusted EBITDA
was $624 million, increasing more than three times second quarter
2019, making it our best quarterly Adjusted EBITDA in our Company's
75 year history. Additionally, our utilization in the quarter was
71.3% and showed continuous improvement as the quarter progressed
ensuring our fleet was well positioned to meet increased levels of
demand.
Our liquidity position at the end of the quarter
was approximately $1.8 billion with an additional $3.4 billion of
fleet funding capacity. We have well-laddered corporate debt and
renewed our credit facility in July. We now have no meaningful
maturities until 2024.
“This is the best quarter result in our Company's
history and a validation of all the hard work our team has put in
since the pandemic began.” said Joe Ferraro, Avis Budget Group
Chief Executive Officer. “The momentum we saw in the second quarter
is expected to continue through the summer and our team will be
ready to take advantage of increased demand while maintaining
rigorous cost discipline.”
Q2 Highlights
- Total Company revenues were up 212% compared to second quarter
2020 and up 1% compared to 2019.
- Adjusted EBITDA in the Americas was $634 million for second
quarter 2021 driven by continued sequential revenue growth and
sustained cost discipline.
- Adjusted EBITDA in International was $8 million for second
quarter 2021 driven by strong cost mitigating actions to match
demand as International recovery continues.
- We issued $800 million asset-backed notes incurring our
lowest ever interest at a weighted average rate of 1.73%.
Investor Conference Call
We will host a conference call to discuss second
quarter results on August 4, 2021, at 8:30 a.m. (ET). Investors may
access the call at ir.avisbudgetgroup.com or by dialing (877)
407-2991 and a replay will available on our website and at (877)
660-6853 using conference code 13721250.
About Avis Budget Group
Avis Budget Group, Inc. is a leading global
provider of mobility solutions, both through its Avis and Budget
brands, which have more than 10,000 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 is headquartered in Parsippany,
N.J. More information is available at 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, impact from the COVID-19 outbreak, cost-saving
actions, the global semiconductor shortage and cash flows 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 severity and duration of the COVID-19 outbreak,
which is expected to continue to have a significant impact on our
operations, and resulting economic conditions and related
restrictions, the high level of competition in the mobility
industry, changes in our fleet costs, including 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, our ability to realize our estimated cost savings on a
timely basis, or at all, the financial condition of the
manufacturers that supply our rental vehicles, including as a
result of the global semiconductor shortage, which could affect
their ability to perform their obligations under our repurchase
and/or guaranteed depreciation arrangements, the significant
decline in travel demand as a result of COVID-19, including the
current and any further disruptions in airline passenger traffic,
the absence of an improvement in or any further deterioration in
economic conditions generally, particularly during our peak season
and/or in key market segments, any occurrence or threat of
terrorism, the current and any future pandemic diseases or other
natural disasters, 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 cost
savings actions. 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, 2020,
Quarterly Report on Form 10-Q for the three months ended March 31,
2021 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 or
circumstances.
Non-GAAP Financial Measures and Key
Metrics
This release includes financial measures such as
Adjusted EBITDA, Adjusted net income and Adjusted free cash flow,
as well as other financial measures that are not considered
generally accepted accounting principles (“GAAP”) measures as
defined under SEC rules. Important information regarding such
measures is contained in the financial tables to this release and
in Appendix I, including the definitions of these measures and
reconciliations to the closest comparable GAAP measures. 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, are calculated on a per-month
basis.
ContactDavid
CalabriaIR@avisbudget.comPR@avisbudget.com
Tables Follow
Table 1
Avis Budget Group,
Inc.SUMMARY DATA SHEET(In
millions, except per share data)
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
Income Statement and
Other Items |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
2,371 |
|
$ |
760 |
|
|
212 |
% |
|
$ |
3,743 |
|
$ |
2,513 |
|
|
49 |
% |
Income (loss) before income taxes |
486 |
|
(609 |
) |
|
180 |
% |
|
236 |
|
(874 |
) |
|
127 |
% |
Net income (loss) |
398 |
|
(481 |
) |
|
183 |
% |
|
228 |
|
(639 |
) |
|
136 |
% |
Earnings (loss) per share - diluted |
5.63 |
|
(6.91 |
) |
|
181 |
% |
|
3.23 |
|
(8.96 |
) |
|
136 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
Measures (non-GAAP) (A) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
624 |
|
(382 |
) |
|
263 |
% |
|
671 |
|
(469 |
) |
|
243 |
% |
Adjusted pretax income (loss) |
512 |
|
(488 |
) |
|
205 |
% |
|
448 |
|
(679 |
) |
|
166 |
% |
Adjusted net income (loss) |
417 |
|
(388 |
) |
|
207 |
% |
|
385 |
|
(491 |
) |
|
178 |
% |
Adjusted earnings (loss) per share - diluted |
5.90 |
|
(5.60 |
) |
|
205 |
% |
|
5.45 |
|
(6.90 |
) |
|
179 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
|
|
|
|
|
June 30, 2021 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
Balance Sheet
Items |
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
$ |
1,324 |
|
$ |
692 |
|
|
|
|
|
|
|
|
|
Vehicles, net |
11,728 |
|
8,153 |
|
|
|
|
|
|
|
|
|
Debt under vehicle programs |
10,408 |
|
6,857 |
|
|
|
|
|
|
|
|
|
Corporate debt |
4,298 |
|
4,210 |
|
|
|
|
|
|
|
|
|
Stockholders' equity |
92 |
|
(155 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Results |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
1,974 |
|
|
$ |
565 |
|
|
249 |
% |
|
$ |
3,054 |
|
|
$ |
1,822 |
|
|
68 |
% |
International |
397 |
|
|
195 |
|
|
104 |
% |
|
689 |
|
|
691 |
|
|
— |
% |
Corporate and Other |
— |
|
|
— |
|
|
n/m |
|
— |
|
|
— |
|
|
n/m |
Total Company |
$ |
2,371 |
|
|
$ |
760 |
|
|
212 |
% |
|
$ |
3,743 |
|
|
$ |
2,513 |
|
|
49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
634 |
|
|
$ |
(233 |
) |
|
372 |
% |
|
$ |
742 |
|
|
$ |
(263 |
) |
|
382 |
% |
International |
8 |
|
|
(140 |
) |
|
106 |
% |
|
(42 |
) |
|
(180 |
) |
|
77 |
% |
Corporate and Other |
(18 |
) |
|
(9 |
) |
|
n/m |
|
(29 |
) |
|
(26 |
) |
|
n/m |
Total Company |
$ |
624 |
|
|
$ |
(382 |
) |
|
263 |
% |
|
$ |
671 |
|
|
$ |
(469 |
) |
|
243 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
_______ |
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 June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues |
$ |
2,371 |
|
$ |
760 |
|
|
$ |
3,743 |
|
$ |
2,513 |
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Operating |
1,032 |
|
622 |
|
|
1,864 |
|
1,680 |
|
Vehicle depreciation and lease charges, net |
338 |
|
374 |
|
|
592 |
|
833 |
|
Selling, general and administrative |
294 |
|
132 |
|
|
476 |
|
383 |
|
Vehicle interest, net |
77 |
|
87 |
|
|
152 |
|
170 |
|
Non-vehicle related depreciation and amortization |
62 |
|
71 |
|
|
130 |
|
140 |
|
Interest expense related to corporate debt, net: |
|
|
|
|
|
|
|
Interest expense |
59 |
|
51 |
|
|
120 |
|
99 |
|
Early extinguishment of debt |
— |
|
3 |
|
|
129 |
|
7 |
|
Restructuring and other related charges |
22 |
|
28 |
|
|
42 |
|
72 |
|
Transaction-related costs, net |
1 |
|
1 |
|
|
2 |
|
3 |
|
Total expenses |
1,885 |
|
1,369 |
|
|
3,507 |
|
3,387 |
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes |
486 |
|
(609 |
) |
|
236 |
|
(874 |
) |
Provision for (benefit from)
income taxes |
88 |
|
(128 |
) |
|
8 |
|
(235 |
) |
Net income
(loss) |
$ |
398 |
|
$ |
(481 |
) |
|
$ |
228 |
|
$ |
(639 |
) |
|
|
|
|
|
|
|
|
Earnings (loss) per
share - diluted |
|
|
|
|
|
|
|
Basic |
$ |
5.69 |
|
$ |
(6.91 |
) |
|
$ |
3.26 |
|
$ |
(8.96 |
) |
Diluted |
$ |
5.63 |
|
$ |
(6.91 |
) |
|
$ |
3.23 |
|
$ |
(8.96 |
) |
|
|
|
|
|
|
|
|
Weighted average
shares outstanding |
|
|
|
|
|
|
|
Basic |
69.9 |
|
69.6 |
|
|
69.9 |
|
71.3 |
|
Diluted |
70.6 |
|
69.6 |
|
|
70.6 |
|
71.3 |
|
|
|
|
|
|
|
|
|
Table 3
Avis Budget Group,
Inc.KEY METRICS SUMMARY
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
24,910 |
|
|
11,968 |
|
|
108 |
|
% |
|
42,931 |
|
|
35,425 |
|
|
21 |
|
% |
Revenue per Day, excluding exchange rate effects
(A) |
$ |
79.08 |
|
|
$ |
47.16 |
|
|
68 |
|
% |
|
$ |
70.99 |
|
|
$ |
51.42 |
|
|
38 |
|
% |
Average Rental Fleet |
377,987 |
|
|
399,083 |
|
|
(5 |
) |
% |
|
336,310 |
|
|
408,010 |
|
|
(18 |
) |
% |
Vehicle Utilization |
72.4 |
% |
|
33.0 |
% |
|
39.4 pps |
|
70.5 |
% |
|
47.7 |
% |
|
22.8 pps |
Per-Unit Fleet Costs per Month, excluding exchange rate effects
(A) |
$ |
228 |
|
|
$ |
225 |
|
|
1 |
|
% |
|
$ |
219 |
|
|
$ |
246 |
|
|
(11 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
8,135 |
|
|
6,024 |
|
|
35 |
|
% |
|
14,960 |
|
|
17,092 |
|
|
(12 |
) |
% |
Revenue per Day, excluding exchange rate effects
(A) |
$ |
43.69 |
|
|
$ |
32.46 |
|
|
35 |
|
% |
|
$ |
41.43 |
|
|
$ |
40.43 |
|
|
2 |
|
% |
Average Rental Fleet |
131,416 |
|
|
164,360 |
|
|
(20 |
) |
% |
|
124,443 |
|
|
178,558 |
|
|
(30 |
) |
% |
Vehicle Utilization |
68.0 |
% |
|
40.3 |
% |
|
27.7 pps |
|
66.4 |
% |
|
52.6 |
% |
|
13.8 pps |
Per-Unit Fleet Costs per Month, excluding exchange rate effects
(A) |
$ |
181 |
|
|
$ |
212 |
|
|
(15 |
) |
% |
|
$ |
182 |
|
|
$ |
216 |
|
|
(16 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
33,045 |
|
|
17,992 |
|
|
84 |
|
% |
|
57,891 |
|
|
52,517 |
|
|
10 |
|
% |
Revenue per Day, excluding exchange rate effects
(A) |
$ |
70.37 |
|
|
$ |
42.24 |
|
|
67 |
|
% |
|
$ |
63.35 |
|
|
$ |
47.84 |
|
|
32 |
|
% |
Average Rental Fleet |
509,403 |
|
|
563,443 |
|
|
(10 |
) |
% |
|
460,753 |
|
|
586,568 |
|
|
(21 |
) |
% |
Vehicle Utilization |
71.3 |
% |
|
35.1 |
% |
|
36.2 pps |
|
69.4 |
% |
|
49.2 |
% |
|
20.2 pps |
Per-Unit Fleet Costs per Month, excluding exchange rate effects
(A) |
$ |
216 |
|
|
$ |
221 |
|
|
(2 |
) |
% |
|
$ |
209 |
|
|
$ |
237 |
|
|
(12 |
) |
% |
_______ |
|
|
|
|
|
|
Refer to Table 6
for key metrics calculations and Appendix I for key metrics
definitions. |
|
|
The following
metrics include changes in currency exchange rates: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
$ |
79.26 |
|
|
$ |
47.16 |
|
|
68 |
|
% |
|
$ |
71.14 |
|
|
$ |
51.42 |
|
|
38 |
|
% |
Per-Unit Fleet Costs per Month |
$ |
229 |
|
|
$ |
225 |
|
|
2 |
|
% |
|
$ |
219 |
|
|
$ |
246 |
|
|
(11 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
$ |
48.72 |
|
|
$ |
32.46 |
|
|
50 |
|
% |
|
$ |
46.06 |
|
|
$ |
40.43 |
|
|
14 |
|
% |
Per-Unit Fleet Costs per Month |
$ |
200 |
|
|
$ |
212 |
|
|
(6 |
) |
% |
|
$ |
199 |
|
|
$ |
216 |
|
|
(8 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
$ |
71.74 |
|
|
$ |
42.24 |
|
|
70 |
|
% |
|
$ |
64.66 |
|
|
$ |
47.84 |
|
|
35 |
|
% |
Per-Unit Fleet Costs per Month |
$ |
221 |
|
|
$ |
221 |
|
|
0 |
|
% |
|
$ |
214 |
|
|
$ |
237 |
|
|
(10 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
Six Months Ended June 30, 2021 |
Operating
Activities |
|
Net cash provided by operating activities |
$ |
1,255 |
|
|
|
Investing
Activities |
|
Net cash used in investing activities exclusive of vehicle
programs |
$ |
(38 |
) |
Net cash used in investing activities of vehicle programs |
(3,997 |
) |
Net cash used in investing activities |
$ |
(4,035 |
) |
|
|
Financing
Activities |
|
Net cash used in financing activities exclusive of vehicle
programs |
$ |
(39 |
) |
Net cash provided by financing activities of vehicle programs |
3,469 |
|
Net cash provided by financing activities |
$ |
3,430 |
|
|
|
Effect of changes in exchange
rates on cash and cash equivalents, program and restricted
cash |
(4 |
) |
Net change in cash and cash
equivalents, program and restricted cash |
646 |
|
Cash and cash
equivalents, program and restricted cash, beginning of period
(A) |
765 |
|
Cash and cash
equivalents, program and restricted cash, end of period
(B) |
$ |
1,411 |
|
|
|
|
|
|
|
|
|
CONSOLIDATED SCHEDULE OF ADJUSTED FREE
CASH FLOWS (C)
|
|
|
Six Months Ended June 30, 2021 |
Income before income taxes |
$ |
236 |
|
Add-back of non-vehicle
related depreciation and amortization (D) |
135 |
|
Add-back of debt
extinguishment costs |
129 |
|
Add-back of restructuring and
other related costs |
42 |
|
Add-back of
transaction-related costs, net |
2 |
|
Add-back of COVID-19
charges |
18 |
|
Add-back of unprecedented
personal-injury and other legal matters, net |
(11 |
) |
Working capital and other |
344 |
|
Capital expenditures (E) |
(52 |
) |
Tax payments, net of
refunds |
(50 |
) |
Vehicle programs and related
(F) |
(26 |
) |
Adjusted free cash
flow |
$ |
767 |
|
|
|
Acquisition and related
payments, net of acquired cash |
$ |
(5 |
) |
Borrowings, net of debt
repayments |
(3 |
) |
Restructuring and other
related payments |
(20 |
) |
Transaction-related
payments |
(2 |
) |
COVID-19 payments, net |
(54 |
) |
Unprecedented personal-injury
and other legal matter payments, net |
(8 |
) |
Repurchases of common
stock |
(22 |
) |
Change in program cash |
14 |
|
Change in restricted cash |
2 |
|
Foreign exchange effects,
financing costs and other |
(23 |
) |
Net change in cash and
cash equivalents, program and restricted cash (per
above) |
$ |
646 |
|
RECONCILIATION OF NET CASH PROVIDED BY
OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
|
|
|
Six Months Ended June 30, 2021 |
Net cash provided by operating activities (per
above) |
$ |
1,255 |
|
Investing activities of vehicle programs |
(3,997 |
) |
Financing activities of vehicle programs |
3,469 |
|
Capital expenditures |
(30 |
) |
Proceeds received on sale of assets and nonmarketable equity
securities |
2 |
|
Change in program cash |
(14 |
) |
Change in restricted cash |
(2 |
) |
COVID-19 payments, net |
54 |
|
Restructuring and other related payments |
20 |
|
Unprecedented personal-injury and other legal matter payments,
net |
8 |
|
Transaction-related payments |
2 |
|
Adjusted free cash
flow (per above) |
$ |
767 |
|
|
_______ |
(A) |
Consists of cash and cash
equivalents of $692 million, program cash of $72 million and
restricted cash of $1 million. |
(B) |
Consists of cash and cash
equivalents of $1.3 billion, program cash of $84 million and
restricted cash of $3 million. |
(C) |
See Appendix I for the definition
of Adjusted free cash flow. |
(D) |
Includes $5 million of cloud
computing costs. |
(E) |
Includes $22 million of cloud
computing implementation costs. |
(F) |
Includes vehicle-backed
borrowings (repayments) that are incremental to amounts required to
fund incremental (reduced) vehicle and vehicle-related assets. |
|
|
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 (loss), income (loss) before income
taxes and diluted earnings (loss) per share to Adjusted EBITDA and
our Adjusted earnings measures.
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
Reconciliation of net
income (loss) to Adjusted EBITDA: |
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
398 |
|
|
$ |
(481 |
) |
|
$ |
228 |
|
|
$ |
(639 |
) |
Provision for (benefit from)
income taxes |
88 |
|
|
(128 |
) |
|
8 |
|
|
(235 |
) |
Income (loss) before
income taxes |
486 |
|
|
(609 |
) |
|
236 |
|
|
(874 |
) |
|
|
|
|
|
|
|
|
Add certain items: |
|
|
|
|
|
|
|
Early extinguishment of debt |
— |
|
|
3 |
|
|
129 |
|
|
7 |
|
Restructuring and other related charges |
22 |
|
|
28 |
|
|
42 |
|
|
72 |
|
Acquisition-related amortization expense |
14 |
|
|
16 |
|
|
32 |
|
|
29 |
|
COVID-19 charges (A) |
— |
|
|
73 |
|
|
18 |
|
|
80 |
|
Transaction-related costs, net |
1 |
|
|
1 |
|
|
2 |
|
|
3 |
|
Non-operational charges related to shareholder activist activity
(B) |
— |
|
|
— |
|
|
— |
|
|
4 |
|
Unprecedented personal-injury and other legal matters, net
(C) |
(11 |
) |
|
— |
|
|
(11 |
) |
|
— |
|
Adjusted pretax income
(loss) |
512 |
|
|
(488 |
) |
|
448 |
|
|
(679 |
) |
Add: |
|
|
|
|
|
|
|
Non-vehicle related depreciation and amortization (excluding
acquisition-related amortization expense) (D) |
53 |
|
|
55 |
|
|
103 |
|
|
111 |
|
Interest expense related to corporate debt, net (excluding early
extinguishment of debt) |
59 |
|
|
51 |
|
|
120 |
|
|
99 |
|
Adjusted
EBITDA |
$ |
624 |
|
|
$ |
(382 |
) |
|
$ |
671 |
|
|
$ |
(469 |
) |
|
|
|
|
|
|
|
|
Reconciliation of net
income (loss) to adjusted net income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
398 |
|
|
(481 |
) |
|
228 |
|
|
(639 |
) |
Add certain items, net of
tax: |
|
|
|
|
|
|
|
Early extinguishment of debt |
— |
|
|
3 |
|
|
96 |
|
|
6 |
|
Restructuring and other related charges |
16 |
|
|
22 |
|
|
31 |
|
|
55 |
|
Acquisition-related amortization expense |
11 |
|
|
12 |
|
|
24 |
|
|
22 |
|
COVID-19 charges |
— |
|
|
55 |
|
|
13 |
|
|
60 |
|
Transaction-related costs, net |
— |
|
|
1 |
|
|
1 |
|
|
2 |
|
Non-operational charges related to shareholder activist
activity |
— |
|
|
— |
|
|
— |
|
|
3 |
|
Unprecedented personal-injury and other legal matters, net |
(8 |
) |
|
— |
|
|
(8 |
) |
|
— |
|
Adjusted net income
(loss) |
$ |
417 |
|
|
$ |
(388 |
) |
|
$ |
385 |
|
|
$ |
(491 |
) |
|
|
|
|
|
|
|
|
Earnings (loss) per
share - Diluted |
$ |
5.63 |
|
|
$ |
(6.91 |
) |
|
$ |
3.23 |
|
|
$ |
(8.96 |
) |
|
|
|
|
|
|
|
|
Adjusted diluted
earnings (loss) per share |
$ |
5.90 |
|
|
$ |
(5.60 |
) |
|
$ |
5.45 |
|
|
$ |
(6.90 |
) |
|
|
|
|
|
|
|
|
Shares used to
calculate Adjusted diluted earnings (loss) per share |
70.6 |
|
|
69.6 |
|
|
70.6 |
|
|
71.3 |
|
_______ |
|
|
|
|
|
|
|
(A) |
The following table
presents the unusual, direct and incremental costs due to the
COVID-19 pandemic. |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Minimum Annual guaranteed rent in excess of concession fees,
net |
$ |
(3 |
) |
|
$ |
30 |
|
$ |
16 |
|
|
$ |
30 |
|
Vehicles damaged in overflow parking lots, net of insurance
proceeds |
2 |
|
|
28 |
|
(4 |
) |
|
33 |
|
Incremental cleaning supplies to sanitize vehicles and facilities,
and over flow parking for idle vehicles |
— |
|
|
15 |
|
— |
|
|
17 |
|
Other charges |
1 |
|
|
— |
|
6 |
|
|
— |
|
Operating
expenses |
$ |
— |
|
|
$ |
72 |
|
$ |
17 |
|
|
$ |
79 |
|
Selling, general and
administrative expenses |
$ |
— |
|
|
$ |
1 |
|
$ |
1 |
|
|
$ |
1 |
(B) |
Reported within
selling, general and administrative expenses in our Consolidated
Statements of Operations. |
(C) |
Reported within
operating expenses in our Consolidated Statements of
Operations. |
(D) |
For the three and
six months ended June 30, 2021 consists of $3 million within
operating expenses and $2 million within selling, general and
administrative expenses in our Consolidated Statements of
Operations related to cloud computing costs. |
|
|
Table 6
Avis Budget Group,
Inc.KEY METRICS CALCULATIONS($ in
millions, except as noted)
|
Three Months Ended June 30, 2021 |
|
Three Months Ended June 30, 2020 |
|
Americas |
|
International |
|
Total |
|
Americas |
|
International |
|
Total |
Revenue per Day
(RPD) |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
1,974 |
|
|
|
$ |
397 |
|
|
|
$ |
2,371 |
|
|
|
$ |
565 |
|
|
$ |
195 |
|
|
$ |
760 |
|
Currency exchange rate effects |
(4 |
) |
|
|
(41 |
) |
|
|
(45 |
) |
|
|
— |
|
|
— |
|
|
— |
|
Revenue excluding exchange rate effects |
$ |
1,970 |
|
|
|
$ |
356 |
|
|
|
$ |
2,326 |
|
|
|
$ |
565 |
|
|
$ |
195 |
|
|
$ |
760 |
|
Rental days (000's) |
24,910 |
|
|
|
8,135 |
|
|
|
33,045 |
|
|
|
11,968 |
|
|
6,024 |
|
|
17,992 |
|
RPD excluding exchange rate effects (in $'s) |
$ |
79.08 |
|
|
|
$ |
43.69 |
|
|
|
$ |
70.37 |
|
|
|
$ |
47.16 |
|
|
$ |
32.46 |
|
|
$ |
42.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization |
|
|
|
|
|
|
|
|
|
|
|
Rental days (000's) |
24,910 |
|
|
|
8,135 |
|
|
|
33,045 |
|
|
|
11,968 |
|
|
6,024 |
|
|
17,992 |
|
Average rental fleet |
377,987 |
|
|
|
131,416 |
|
|
|
509,403 |
|
|
|
399,083 |
|
|
164,360 |
|
|
563,443 |
|
Number of days in period |
91 |
|
|
|
91 |
|
|
|
91 |
|
|
|
91 |
|
|
91 |
|
|
91 |
|
Available rental days (000's) |
34,397 |
|
|
|
11,959 |
|
|
|
46,356 |
|
|
|
36,316 |
|
|
14,957 |
|
|
51,273 |
|
Vehicle utilization |
72.4 |
|
% |
|
68.0 |
|
% |
|
71.3 |
|
% |
|
33.0 |
% |
|
40.3 |
% |
|
35.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Per-Unit Fleet
Costs |
|
|
|
|
|
|
|
|
|
|
|
Vehicle depreciation and lease charges, net |
$ |
259 |
|
|
|
$ |
79 |
|
|
|
$ |
338 |
|
|
|
$ |
269 |
|
|
$ |
105 |
|
|
$ |
374 |
|
Currency exchange rate effects |
(1 |
) |
|
|
(8 |
) |
|
|
(9 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
$ |
258 |
|
|
|
$ |
71 |
|
|
|
$ |
329 |
|
|
|
$ |
269 |
|
|
$ |
105 |
|
|
$ |
374 |
|
Average rental fleet |
377,987 |
|
|
|
131,416 |
|
|
|
509,403 |
|
|
|
399,083 |
|
|
164,360 |
|
|
563,443 |
|
Per-unit fleet costs (in $'s) |
$ |
683 |
|
|
|
$ |
542 |
|
|
|
$ |
647 |
|
|
|
$ |
675 |
|
|
$ |
637 |
|
|
$ |
664 |
|
Number of months in period |
3 |
|
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
3 |
|
|
3 |
|
Per-unit fleet costs per month excluding exchange rate effects (in
$'s) |
$ |
228 |
|
|
|
$ |
181 |
|
|
|
$ |
216 |
|
|
|
$ |
225 |
|
|
$ |
212 |
|
|
$ |
221 |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021 |
|
Six Months Ended June 30, 2020 |
|
Americas |
|
International |
|
Total |
|
Americas |
|
International |
|
Total |
Revenue per Day
(RPD) |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
3,054 |
|
|
|
$ |
689 |
|
|
|
$ |
3,743 |
|
|
|
$ |
1,822 |
|
|
$ |
691 |
|
|
$ |
2,513 |
|
Currency exchange rate effects |
(6 |
) |
|
|
(69 |
) |
|
|
(75 |
) |
|
|
— |
|
|
— |
|
|
— |
|
Revenue excluding exchange rate effects |
$ |
3,048 |
|
|
|
$ |
620 |
|
|
|
$ |
3,668 |
|
|
|
$ |
1,822 |
|
|
$ |
691 |
|
|
$ |
2,513 |
|
Rental days (000's) |
42,931 |
|
|
|
14,960 |
|
|
|
57,891 |
|
|
|
35,425 |
|
|
17,092 |
|
|
52,517 |
|
RPD excluding exchange rate effects (in $'s) |
$ |
70.99 |
|
|
|
$ |
41.43 |
|
|
|
$ |
63.35 |
|
|
|
$ |
51.42 |
|
|
$ |
40.43 |
|
|
$ |
47.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization |
|
|
|
|
|
|
|
|
|
|
|
Rental days (000's) |
42,931 |
|
|
|
14,960 |
|
|
|
57,891 |
|
|
|
35,425 |
|
|
17,092 |
|
|
52,517 |
|
Average rental fleet |
336,310 |
|
|
|
124,443 |
|
|
|
460,753 |
|
|
|
408,010 |
|
|
178,558 |
|
|
586,568 |
|
Number of days in period |
181 |
|
|
|
181 |
|
|
|
181 |
|
|
|
182 |
|
|
182 |
|
|
182 |
|
Available rental days (000's) |
60,872 |
|
|
|
22,524 |
|
|
|
83,396 |
|
|
|
74,258 |
|
|
32,497 |
|
|
106,755 |
|
Vehicle utilization |
70.5 |
|
% |
|
66.4 |
|
% |
|
69.4 |
|
% |
|
47.7 |
% |
|
52.6 |
% |
|
49.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Per-Unit Fleet
Costs |
|
|
|
|
|
|
|
|
|
|
|
Vehicle depreciation and lease charges, net |
$ |
443 |
|
|
|
$ |
149 |
|
|
|
$ |
592 |
|
|
|
$ |
601 |
|
|
$ |
232 |
|
|
$ |
833 |
|
Currency exchange rate effects |
(2 |
) |
|
|
(13 |
) |
|
|
(15 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
$ |
441 |
|
|
|
$ |
136 |
|
|
|
$ |
577 |
|
|
|
$ |
601 |
|
|
$ |
232 |
|
|
$ |
833 |
|
Average rental fleet |
336,310 |
|
|
|
124,443 |
|
|
|
460,753 |
|
|
|
408,010 |
|
|
178,558 |
|
|
586,568 |
|
Per-unit fleet costs (in $'s) |
$ |
1,312 |
|
|
|
$ |
1,091 |
|
|
|
$ |
1,252 |
|
|
|
$ |
1,474 |
|
|
$ |
1,297 |
|
|
$ |
1,420 |
|
Number of months in period |
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
6 |
|
|
6 |
|
Per-unit fleet costs per month excluding exchange rate effects (in
$'s) |
$ |
219 |
|
|
|
$ |
182 |
|
|
|
$ |
209 |
|
|
|
$ |
246 |
|
|
$ |
216 |
|
|
$ |
237 |
|
_______ |
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 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 and other
legal matters, net, non-operational charges related to shareholder
activist activity, which include third party advisory, legal and
other professional service fees, gain on sale of equity method
investment in China, COVID-19 charges and income taxes. COVID-19
charges include unusual, direct and incremental costs due to the
COVID-19 pandemic such as minimum annual guaranteed rent in excess
of concession fees for the period, overflow parking for idle
vehicles and related shuttling costs, incremental cleaning supplies
to sanitize vehicles and facilities, and losses associated with
vehicles damaged in overflow parking lots, net of insurance
proceeds. Adjusted EBITDA includes stock-based compensation expense
and deferred financing fee amortization totaling $16 million and $9
million in second quarter 2021 and 2020, respectively, and totaling
$25 million and $13 million in the six months ended ended June 30,
2021 and 2020, respectively.
We 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
MeasuresThe 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 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 certain other 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
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, restructuring and
other related charges, COVID-19 charges and non-operational charges
related to shareholder activist activity. We have revised our
definition of Adjusted Free Cash Flow to exclude COVID-19 charges
and have not revised prior years' Adjusted Free Cash Flow amounts
as there were no other charges similar in nature to these. We
believe this change is meaningful to investors as it brings the
measurement in line with our other non-GAAP measures. 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.
Adjusted EBITDA
MarginRepresents Adjusted EBITDA as a percentage of
revenues.
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 rates plus any related currency
hedges.
Net Corporate DebtRepresents
corporate debt minus cash and cash equivalents.
Net Corporate
LeverageRepresents Net Corporate Debt divided by Adjusted
EBITDA for the twelve months prior to the date of calculation.
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.
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