Avis Budget Group, Inc. (
NASDAQ: CAR) today
announced its third quarter 2021 financial results.
We ended the third quarter with revenues almost
double the prior year and 9% above the third quarter 2019, at $3.0
billion. Our revenues were driven by increased revenue per day and
rental days as demand continued from the second quarter.
Net income was $674 million and our Adjusted
EBITDA was $1,057 million, our best quarterly Adjusted EBITDA in
our Company's history. Utilization for the quarter was 71.6%,
showing sequential quarter improvement and that our fleet was well
positioned to meet demand.
Our liquidity position at the end of the quarter
was approximately $1.3 billion with an additional $2.7 billion of
fleet funding capacity. We have well-laddered corporate debt and no
meaningful maturities until 2024.
“Our third quarter results are a testament to our
team’s on-going focus around cost discipline and ability to execute
operationally,” said Joe Ferraro, Avis Budget Group Chief Executive
Officer. “We are seeing the benefits of initiatives we began during
the early days of the pandemic and look to build on this positive
momentum as the travel environment continues to normalize.”
Q3 Highlights
- Total Company
revenues increased by 96% and 9% compared to third quarter 2020 and
2019, respectively.
- Adjusted EBITDA in
the Americas was $952 million for the third quarter 2021 driven by
strong pricing and sustained cost discipline.
- Adjusted EBITDA in
International was $128 million for the third quarter 2021 driven by
pricing and volume beginning to recover along with strong cost
mitigating actions.
- We repurchased
approximately 11.6 million shares of common stock in the third
quarter at an average cost of $86, bringing our outstanding share
count down by 16% from June 30, 2021.
- We redeemed $235
million of our 5.25% Senior Notes due March 2025 with cash on
hand.
Investor Conference Call
We will host a conference call to discuss the
Company's third quarter results on November 2, 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 13723926.
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, including class action lawsuits,
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 and six months ended
June 30, 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) attributable to Avis Budget Group, Inc.
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.
Contact |
|
David Calabria |
|
IR@avisbudget.com |
|
PR@avisbudget.com |
|
Table 1
Avis Budget Group,
Inc.SUMMARY DATA SHEET(In
millions, except per share data)
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
Income Statement and Other Items |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
3,001 |
|
|
$ |
1,534 |
|
|
96 |
% |
|
$ |
6,744 |
|
|
$ |
4,047 |
|
|
67 |
% |
|
Income (loss) before income taxes |
929 |
|
|
53 |
|
|
n/m |
|
1,165 |
|
|
(821 |
) |
|
242 |
% |
|
Net income
(loss) |
674 |
|
|
45 |
|
|
n/m |
|
902 |
|
|
(594 |
) |
|
252 |
% |
|
Earnings (loss) per share - diluted |
10.45 |
|
|
0.63 |
|
|
n/m |
|
13.16 |
|
|
(8.40 |
) |
|
257 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Measures (non-GAAP)
(A) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
1,057 |
|
|
220 |
|
|
380 |
% |
|
1,728 |
|
|
(249 |
) |
|
794 |
% |
|
Adjusted pretax income (loss) |
954 |
|
|
99 |
|
|
864 |
% |
|
1,402 |
|
|
(580 |
) |
|
342 |
% |
|
Adjusted net income (loss) |
693 |
|
|
79 |
|
|
777 |
% |
|
1,078 |
|
|
(412 |
) |
|
362 |
% |
|
Adjusted earnings (loss) per share - diluted |
10.74 |
|
|
1.13 |
|
|
850 |
% |
|
15.72 |
|
|
(5.83 |
) |
|
370 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020 |
|
|
|
|
|
|
|
|
Balance Sheet Items |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
$ |
886 |
|
|
$ |
692 |
|
|
|
|
|
|
|
|
|
|
Vehicles, net |
11,925 |
|
|
8,153 |
|
|
|
|
|
|
|
|
|
|
Debt under vehicle programs |
10,749 |
|
|
6,857 |
|
|
|
|
|
|
|
|
|
|
Corporate debt |
4,027 |
|
|
4,210 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity |
(198 |
) |
|
(155 |
) |
|
|
|
|
|
|
|
|
Segment Results |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2021 |
|
|
2020 |
|
|
% Change |
|
2021 |
|
|
2020 |
|
|
% Change |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
2,403 |
|
|
$ |
1,114 |
|
|
116 |
% |
|
$ |
5,457 |
|
|
$ |
2,936 |
|
|
86 |
% |
International |
598 |
|
|
420 |
|
|
42 |
% |
|
1,287 |
|
|
1,111 |
|
|
16 |
% |
Corporate and Other |
— |
|
|
— |
|
|
n/m |
|
— |
|
|
— |
|
|
n/m |
Total Company |
$ |
3,001 |
|
|
$ |
1,534 |
|
|
96 |
% |
|
$ |
6,744 |
|
|
$ |
4,047 |
|
|
67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
952 |
|
|
$ |
222 |
|
|
329 |
% |
|
$ |
1,694 |
|
|
$ |
(41 |
) |
|
n/m |
International |
128 |
|
|
6 |
|
|
n/m |
|
86 |
|
|
(174 |
) |
|
149 |
% |
Corporate and Other |
(23 |
) |
|
(8 |
) |
|
n/m |
|
(52 |
) |
|
(34 |
) |
|
n/m |
Total Company |
$ |
1,057 |
|
|
$ |
220 |
|
|
380 |
% |
|
$ |
1,728 |
|
|
$ |
(249 |
) |
|
794 |
% |
_______ |
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 September 30, |
|
Nine Months Ended September 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues |
$ |
3,001 |
|
|
$ |
1,534 |
|
|
$ |
6,744 |
|
|
$ |
4,047 |
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Operating |
1,225 |
|
|
825 |
|
|
3,089 |
|
|
2,505 |
|
|
Vehicle depreciation and lease charges, net |
277 |
|
|
256 |
|
|
869 |
|
|
1,089 |
|
|
Selling, general and administrative |
361 |
|
|
166 |
|
|
837 |
|
|
549 |
|
|
Vehicle interest, net |
80 |
|
|
77 |
|
|
232 |
|
|
247 |
|
|
Non-vehicle related depreciation and amortization |
69 |
|
|
74 |
|
|
199 |
|
|
214 |
|
|
Interest expense related to corporate debt, net: |
|
|
|
|
|
|
|
|
Interest expense |
47 |
|
|
64 |
|
|
167 |
|
|
163 |
|
|
Early extinguishment of debt |
7 |
|
|
2 |
|
|
136 |
|
|
9 |
|
|
Restructuring and other related charges |
5 |
|
|
17 |
|
|
47 |
|
|
89 |
|
|
Transaction-related costs, net |
1 |
|
|
— |
|
|
3 |
|
|
3 |
|
Total expenses |
2,072 |
|
|
1,481 |
|
|
5,579 |
|
|
4,868 |
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
929 |
|
|
53 |
|
|
1,165 |
|
|
(821 |
) |
|
Provision for (benefit from)
income taxes |
255 |
|
|
8 |
|
|
263 |
|
|
(227 |
) |
Net income (loss) |
674 |
|
|
45 |
|
|
902 |
|
|
(594 |
) |
Less: net loss attributable to non-controlling interests |
(1 |
) |
|
— |
|
|
(1 |
) |
|
— |
|
Net income
(loss) attributable to Avis Budget Group, Inc. |
$ |
675 |
|
|
$ |
45 |
|
|
$ |
903 |
|
|
$ |
(594 |
) |
|
|
|
|
|
|
|
|
|
Earnings (loss) per share |
|
|
|
|
|
|
|
|
Basic |
$ |
10.58 |
|
|
$ |
0.64 |
|
|
$ |
13.31 |
|
|
$ |
(8.40 |
) |
|
Diluted |
$ |
10.45 |
|
|
$ |
0.63 |
|
|
$ |
13.16 |
|
|
$ |
(8.40 |
) |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
Basic |
63.7 |
|
|
69.7 |
|
|
67.8 |
|
|
70.8 |
|
|
Diluted |
64.6 |
|
|
70.2 |
|
|
68.6 |
|
|
70.8 |
|
Table 3
Avis Budget Group,
Inc.KEY METRICS SUMMARY
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
|
28,836 |
|
|
19,289 |
|
|
49 |
|
% |
|
71,768 |
|
|
54,715 |
|
|
31 |
|
% |
|
Revenue per Day, excluding exchange rate effects
(A) |
|
$ |
83.15 |
|
|
$ |
57.79 |
|
|
44 |
|
% |
|
$ |
75.88 |
|
|
$ |
53.67 |
|
|
41 |
|
% |
|
Average Rental Fleet |
|
434,416 |
|
|
362,192 |
|
|
20 |
|
% |
|
369,012 |
|
|
392,737 |
|
|
(6 |
) |
% |
|
Vehicle Utilization |
|
72.2 |
% |
|
57.9 |
% |
|
14.3 pps |
|
71.2 |
% |
|
50.8 |
% |
|
20.4 pps |
|
Per-Unit Fleet Costs per Month, excluding exchange rate effects
(A) |
|
$ |
143 |
|
|
$ |
152 |
|
|
(6 |
) |
% |
|
$ |
189 |
|
|
$ |
217 |
|
|
(13 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
|
10,720 |
|
|
9,542 |
|
|
12 |
|
% |
|
25,679 |
|
|
26,633 |
|
|
(4 |
) |
% |
|
Revenue per Day, excluding exchange rate effects
(A) |
|
$ |
54.91 |
|
|
$ |
43.98 |
|
|
25 |
|
% |
|
$ |
47.06 |
|
|
$ |
41.70 |
|
|
13 |
|
% |
|
Average Rental Fleet |
|
166,431 |
|
|
154,781 |
|
|
8 |
|
% |
|
138,439 |
|
|
170,632 |
|
|
(19 |
) |
% |
|
Vehicle Utilization |
|
70.0 |
% |
|
67.0 |
% |
|
3 pps |
|
67.9 |
% |
|
57.0 |
% |
|
10.9 pps |
|
Per-Unit Fleet Costs per Month, excluding exchange rate effects
(A) |
|
$ |
179 |
|
|
$ |
195 |
|
|
(8 |
) |
% |
|
$ |
181 |
|
|
$ |
210 |
|
|
(14 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
|
39,556 |
|
|
28,831 |
|
|
37 |
|
% |
|
97,447 |
|
|
81,348 |
|
|
20 |
|
% |
|
Revenue per Day, excluding exchange rate effects
(A) |
|
$ |
75.50 |
|
|
$ |
53.22 |
|
|
42 |
|
% |
|
$ |
68.28 |
|
|
$ |
49.75 |
|
|
37 |
|
% |
|
Average Rental Fleet |
|
600,847 |
|
|
516,973 |
|
|
16 |
|
% |
|
507,451 |
|
|
563,369 |
|
|
(10 |
) |
% |
|
Vehicle Utilization |
|
71.6 |
% |
|
60.6 |
% |
|
11 pps |
|
70.3 |
% |
|
52.7 |
% |
|
17.6 pps |
|
Per-Unit Fleet Costs per Month, excluding exchange rate effects
(A) |
|
$ |
153 |
|
|
$ |
165 |
|
|
(7 |
) |
% |
|
$ |
187 |
|
|
$ |
215 |
|
|
(13 |
) |
% |
_______ |
|
|
|
|
|
|
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 September 30, |
|
Nine Months Ended September 30, |
|
|
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
|
$ |
83.33 |
|
|
$ |
57.79 |
|
|
44 |
|
% |
|
$ |
76.04 |
|
|
$ |
53.67 |
|
|
42 |
|
% |
|
Per-Unit Fleet Costs per Month |
|
$ |
143 |
|
|
$ |
152 |
|
|
(6 |
) |
% |
|
$ |
190 |
|
|
$ |
217 |
|
|
(12 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
|
$ |
55.79 |
|
|
$ |
43.98 |
|
|
27 |
|
% |
|
$ |
50.12 |
|
|
$ |
41.70 |
|
|
20 |
|
% |
|
Per-Unit Fleet Costs per Month |
|
$ |
181 |
|
|
$ |
195 |
|
|
(7 |
) |
% |
|
$ |
192 |
|
|
$ |
210 |
|
|
(9 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
|
$ |
75.86 |
|
|
$ |
53.22 |
|
|
43 |
|
% |
|
$ |
69.21 |
|
|
$ |
49.75 |
|
|
39 |
|
% |
|
Per-Unit Fleet Costs per Month |
|
$ |
154 |
|
|
$ |
165 |
|
|
(7 |
) |
% |
|
$ |
190 |
|
|
$ |
215 |
|
|
(12 |
) |
% |
Table 4 (page 1 of 2)
Avis Budget Group,
Inc.CONSOLIDATED CONDENSED SCHEDULES OF CASH FLOWS
AND ADJUSTED FREE CASH FLOWS(In
millions)
CONSOLIDATED CONDENSED SCHEDULE OF CASH
FLOWS
|
|
|
Nine Months Ended September 30, 2021 |
Operating Activities |
|
Net cash provided by operating activities |
$ |
2,548 |
|
|
|
|
|
Investing Activities |
|
Net cash used in investing activities exclusive of vehicle
programs |
$ |
(74 |
) |
Net cash used in investing activities of vehicle programs |
(4,857 |
) |
Net cash used in investing activities |
$ |
(4,931 |
) |
|
|
|
|
Financing Activities |
|
Net cash used in financing activities exclusive of vehicle
programs |
$ |
(1,230 |
) |
Net cash provided by financing activities of vehicle programs |
3,808 |
|
Net cash provided by financing activities |
$ |
2,578 |
|
|
|
|
|
Effect of changes in exchange rates on cash and cash equivalents,
program and restricted cash |
$ |
(15 |
) |
Net change in cash and cash equivalents, program and restricted
cash |
180 |
|
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) |
$ |
945 |
|
CONSOLIDATED SCHEDULE OF ADJUSTED FREE
CASH FLOWS (C)
|
|
|
Nine Months Ended September 30, 2021 |
Income before income taxes |
$ |
1,165 |
|
Add-back of non-vehicle related depreciation and amortization
(D) |
204 |
|
Add-back of debt extinguishment costs |
136 |
|
Add-back of restructuring and other related costs |
47 |
|
Add-back of transaction-related costs, net |
3 |
|
Add-back of COVID-19 charges |
12 |
|
Add-back of unprecedented personal-injury and other legal matters,
net |
(6 |
) |
Working capital and other |
384 |
|
Capital expenditures (E) |
(93 |
) |
Tax payments, net of refunds |
(63 |
) |
Vehicle programs and related (F) |
(206 |
) |
Adjusted free cash flow |
$ |
1,583 |
|
|
|
|
|
Acquisition and related payments, net of acquired cash |
$ |
(14 |
) |
Borrowings, net of debt repayments |
(250 |
) |
Restructuring and other related payments |
(28 |
) |
Transaction-related payments |
(4 |
) |
COVID-19 payments, net |
(52 |
) |
Unprecedented personal-injury and other legal matter payments,
net |
(8 |
) |
Repurchases of common stock |
(997 |
) |
Change in program cash |
(13 |
) |
Change in restricted cash |
2 |
|
Foreign exchange effects, financing costs and other |
(39 |
) |
Net change in cash and cash equivalents, program and
restricted cash (per above) |
$ |
180 |
|
Table 4 (page 2 of 2)
RECONCILIATION OF NET CASH PROVIDED BY
OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
|
|
|
Nine Months Ended September 30, 2021 |
Net cash provided by operating activities (per
above) |
$ |
2,548 |
|
Investing activities of vehicle programs |
(4,857 |
) |
Financing activities of vehicle programs |
3,808 |
|
Capital expenditures |
(57 |
) |
Proceeds received on sale of assets and nonmarketable equity
securities |
3 |
|
Change in program cash |
13 |
|
Change in restricted cash |
(2 |
) |
Acquisition and disposition-related payments |
(3 |
) |
Non-controlling interest (distributions) contributions, net |
38 |
|
COVID-19 payments, net |
52 |
|
Restructuring and other related payments |
28 |
|
Unprecedented personal-injury and other legal matter payments,
net |
8 |
|
Transaction-related payments |
4 |
|
Adjusted free cash flow (per above) |
$ |
1,583 |
|
|
_______ |
(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 $886 million, program cash
of $55 million and restricted cash of $4 million. |
(C) |
See Appendix I for the definition of Adjusted free cash flow. |
(D) |
Includes $5 million of cloud computing costs. |
(E) |
Includes $36 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 September 30, |
|
Nine Months Ended September 30, |
Reconciliation of net income to Adjusted
EBITDA: |
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
674 |
|
|
$ |
45 |
|
|
$ |
902 |
|
|
$ |
(594 |
) |
|
Add: |
Provision for (benefit from) income taxes |
255 |
|
|
8 |
|
|
263 |
|
|
(227 |
) |
|
Income (loss) before income taxes |
929 |
|
|
53 |
|
|
1,165 |
|
|
(821 |
) |
|
|
|
|
|
|
|
|
|
|
|
Add certain items: |
|
|
|
|
|
|
|
|
Early extinguishment of debt |
7 |
|
|
2 |
|
|
136 |
|
|
9 |
|
|
Restructuring and other related charges |
5 |
|
|
17 |
|
|
47 |
|
|
89 |
|
|
Acquisition-related amortization expense |
13 |
|
|
17 |
|
|
45 |
|
|
46 |
|
|
COVID-19 charges (A) |
(6 |
) |
|
10 |
|
|
12 |
|
|
90 |
|
|
Transaction-related costs, net |
1 |
|
|
— |
|
|
3 |
|
|
3 |
|
|
Non-operational charges related to shareholder activist activity
(B) |
— |
|
|
— |
|
|
— |
|
|
4 |
|
|
Unprecedented personal-injury and other legal matters, net
(C) |
5 |
|
|
— |
|
|
(6 |
) |
|
— |
|
|
Adjusted pretax income (loss) |
954 |
|
|
99 |
|
|
1,402 |
|
|
(580 |
) |
|
|
|
|
|
|
|
|
|
|
Add: |
Non-vehicle related depreciation and amortization (excluding
acquisition-related amortization expense) (D) |
56 |
|
|
57 |
|
|
159 |
|
|
168 |
|
|
|
Interest expense related to corporate debt, net (excluding early
extinguishment of debt) |
47 |
|
|
64 |
|
|
167 |
|
|
163 |
|
|
Adjusted EBITDA |
$ |
1,057 |
|
|
$ |
220 |
|
|
$ |
1,728 |
|
|
$ |
(249 |
) |
|
|
|
|
|
|
|
|
|
|
Reconciliation of net income attributable to Avis Budget
Group, Inc. to adjusted net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Avis Budget Group, Inc. |
$ |
675 |
|
|
$ |
45 |
|
|
$ |
903 |
|
|
$ |
(594 |
) |
|
Add certain items, net of tax: |
|
|
|
|
|
|
|
|
|
Early extinguishment of debt |
5 |
|
|
1 |
|
|
101 |
|
|
7 |
|
|
|
Restructuring and other related charges |
4 |
|
|
14 |
|
|
35 |
|
|
69 |
|
|
|
Acquisition-related amortization expense |
9 |
|
|
12 |
|
|
33 |
|
|
34 |
|
|
|
COVID-19 charges |
(5 |
) |
|
7 |
|
|
8 |
|
|
67 |
|
|
|
Transaction-related costs, net |
1 |
|
|
— |
|
|
2 |
|
|
2 |
|
|
|
Non-operational charges related to shareholder activist
activity |
— |
|
|
— |
|
|
— |
|
|
3 |
|
|
|
Unprecedented personal-injury and other legal matters, net |
4 |
|
|
— |
|
|
(4 |
) |
|
— |
|
|
Adjusted net income (loss) |
$ |
693 |
|
|
$ |
79 |
|
|
$ |
1,078 |
|
|
$ |
(412 |
) |
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share - Diluted |
$ |
10.45 |
|
|
$ |
0.63 |
|
|
$ |
13.16 |
|
|
$ |
(8.40 |
) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings (loss) per share |
$ |
10.74 |
|
|
$ |
1.13 |
|
|
$ |
15.72 |
|
|
$ |
(5.83 |
) |
|
|
|
|
|
|
|
|
|
|
|
Shares used to calculate Adjusted diluted earnings (loss)
per share |
64.6 |
|
|
70.2 |
|
|
68.6 |
|
|
70.8 |
|
_______ |
|
|
|
|
|
|
|
(A) |
The following table presents the unusual, direct and incremental
costs due to the COVID-19 pandemic. |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
Minimum annual guaranteed rent in excess of concession fees,
net |
$ |
(4 |
) |
|
$ |
11 |
|
|
$ |
12 |
|
|
$ |
41 |
|
|
Vehicles damaged in overflow parking lots, net of insurance
proceeds |
(3 |
) |
|
(19 |
) |
|
(7 |
) |
|
14 |
|
|
Incremental cleaning supplies to sanitize vehicles and facilities,
and over flow parking for idle vehicles |
— |
|
|
18 |
|
|
— |
|
|
35 |
|
|
Other charges |
1 |
|
|
— |
|
|
7 |
|
|
— |
|
|
Operating expenses |
$ |
(6 |
) |
|
$ |
8 |
|
|
$ |
11 |
|
|
$ |
87 |
|
|
Vehicle depreciation and lease charges |
$ |
— |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
1 |
|
|
Selling, general and administrative expenses |
$ |
— |
|
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
2 |
|
(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 nine months ended September 30, 2021 consists of $5 million
within operating expenses in our Consolidated Statements of
Operations related to cloud computing costs. |
Table 6
Avis Budget Group,
Inc.KEY METRICS CALCULATIONS($ in
millions, except as noted)
|
|
|
Three Months Ended September 30, 2021 |
|
Three Months Ended September 30, 2020 |
|
|
|
Americas |
|
International |
|
Total |
|
Americas |
|
International |
|
Total |
Revenue per Day (RPD) |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
2,403 |
|
|
|
$ |
598 |
|
|
|
$ |
3,001 |
|
|
|
$ |
1,114 |
|
|
$ |
420 |
|
|
$ |
1,534 |
|
|
Currency exchange rate effects |
(5 |
) |
|
|
(10 |
) |
|
|
(15 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
Revenue excluding
exchange rate effects |
$ |
2,398 |
|
|
|
$ |
588 |
|
|
|
$ |
2,986 |
|
|
|
$ |
1,114 |
|
|
$ |
420 |
|
|
$ |
1,534 |
|
|
Rental days (000's) |
28,836 |
|
|
|
10,720 |
|
|
|
39,556 |
|
|
|
19,289 |
|
|
9,542 |
|
|
28,831 |
|
|
RPD excluding exchange rate effects (in $'s) |
$ |
83.15 |
|
|
|
$ |
54.91 |
|
|
|
$ |
75.50 |
|
|
|
$ |
57.79 |
|
|
$ |
43.98 |
|
|
$ |
53.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle Utilization |
|
|
|
|
|
|
|
|
|
|
|
|
Rental days (000's) |
28,836 |
|
|
|
10,720 |
|
|
|
39,556 |
|
|
|
19,289 |
|
|
9,542 |
|
|
28,831 |
|
|
Average rental fleet |
434,416 |
|
|
|
166,431 |
|
|
|
600,847 |
|
|
|
362,192 |
|
|
154,781 |
|
|
516,973 |
|
|
Number of days in period |
92 |
|
|
|
92 |
|
|
|
92 |
|
|
|
92 |
|
|
92 |
|
|
92 |
|
|
Available rental days (000's) |
39,966 |
|
|
|
15,312 |
|
|
|
55,278 |
|
|
|
33,322 |
|
|
14,240 |
|
|
47,562 |
|
|
Vehicle utilization |
72.2 |
|
% |
|
70.0 |
|
% |
|
71.6 |
|
% |
|
57.9 |
% |
|
67.0 |
% |
|
60.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per-Unit Fleet Costs |
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle depreciation
and lease charges, net |
$ |
187 |
|
|
|
$ |
90 |
|
|
|
$ |
277 |
|
|
|
$ |
166 |
|
|
$ |
90 |
|
|
$ |
256 |
|
|
Currency exchange rate effects |
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
$ |
186 |
|
|
|
$ |
89 |
|
|
|
$ |
275 |
|
|
|
$ |
166 |
|
|
$ |
90 |
|
|
$ |
256 |
|
|
Average rental fleet |
434,416 |
|
|
|
166,431 |
|
|
|
600,847 |
|
|
|
362,192 |
|
|
154,781 |
|
|
516,973 |
|
|
Per-unit fleet costs (in $'s) |
$ |
428 |
|
|
|
$ |
536 |
|
|
|
$ |
458 |
|
|
|
$ |
456 |
|
|
$ |
584 |
|
|
$ |
494 |
|
|
Number of months in period |
3 |
|
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
3 |
|
|
3 |
|
|
Per-unit fleet costs
per month excluding exchange rate effects (in $'s) |
$ |
143 |
|
|
|
$ |
179 |
|
|
|
$ |
153 |
|
|
|
$ |
152 |
|
|
$ |
195 |
|
|
$ |
165 |
|
|
|
|
Nine Months Ended September 30, 2021 |
|
Nine Months Ended September 30, 2020 |
|
|
|
Americas |
|
International |
|
Total |
|
Americas |
|
International |
|
Total |
Revenue per Day (RPD) |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
5,457 |
|
|
|
$ |
1,287 |
|
|
|
$ |
6,744 |
|
|
|
$ |
2,936 |
|
|
$ |
1,111 |
|
|
$ |
4,047 |
|
|
Currency exchange rate effects |
(11 |
) |
|
|
(79 |
) |
|
|
(90 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
Revenue excluding
exchange rate effects |
$ |
5,446 |
|
|
|
$ |
1,208 |
|
|
|
$ |
6,654 |
|
|
|
$ |
2,936 |
|
|
$ |
1,111 |
|
|
$ |
4,047 |
|
|
Rental days (000's) |
71,768 |
|
|
|
25,679 |
|
|
|
97,447 |
|
|
|
54,715 |
|
|
26,633 |
|
|
81,348 |
|
|
RPD excluding exchange rate effects (in $'s) |
$ |
75.88 |
|
|
|
$ |
47.06 |
|
|
|
$ |
68.28 |
|
|
|
$ |
53.67 |
|
|
$ |
41.70 |
|
|
$ |
49.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle Utilization |
|
|
|
|
|
|
|
|
|
|
|
|
Rental days (000's) |
71,768 |
|
|
|
25,679 |
|
|
|
97,447 |
|
|
|
54,715 |
|
|
26,633 |
|
|
81,348 |
|
|
Average rental fleet |
369,012 |
|
|
|
138,439 |
|
|
|
507,451 |
|
|
|
392,737 |
|
|
170,632 |
|
|
563,369 |
|
|
Number of days in period |
273 |
|
|
|
273 |
|
|
|
273 |
|
|
|
274 |
|
|
274 |
|
|
274 |
|
|
Available rental days (000's) |
100,740 |
|
|
|
37,794 |
|
|
|
138,534 |
|
|
|
107,610 |
|
|
46,753 |
|
|
154,363 |
|
|
Vehicle utilization |
71.2 |
|
% |
|
67.9 |
|
% |
|
70.3 |
|
% |
|
50.8 |
% |
|
57.0 |
% |
|
52.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per-Unit Fleet Costs |
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle depreciation
and lease charges, net |
$ |
630 |
|
|
|
$ |
239 |
|
|
|
$ |
869 |
|
|
|
$ |
767 |
|
|
$ |
322 |
|
|
$ |
1,089 |
|
|
Currency exchange rate effects |
(3 |
) |
|
|
(14 |
) |
|
|
(17 |
) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
$ |
627 |
|
|
|
$ |
225 |
|
|
|
$ |
852 |
|
|
|
$ |
767 |
|
|
$ |
322 |
|
|
$ |
1,089 |
|
|
Average rental fleet |
369,012 |
|
|
|
138,439 |
|
|
|
507,451 |
|
|
|
392,737 |
|
|
170,632 |
|
|
563,369 |
|
|
Per-unit fleet costs (in $'s) |
$ |
1,700 |
|
|
|
$ |
1,625 |
|
|
|
$ |
1,679 |
|
|
|
$ |
1,951 |
|
|
$ |
1,887 |
|
|
$ |
1,932 |
|
|
Number of months in period |
9 |
|
|
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
9 |
|
|
9 |
|
|
Per-unit fleet costs
per month excluding exchange rate effects (in $'s) |
$ |
189 |
|
|
|
$ |
181 |
|
|
|
$ |
187 |
|
|
|
$ |
217 |
|
|
$ |
210 |
|
|
$ |
215 |
|
_______ |
|
|
|
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, which includes amounts recorded in excess of $5
million related to class action lawsuits, 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. We have revised our definition of
Adjusted EBITDA to exclude amounts recorded in excess of $5 million
related to class action lawsuits. We did not revised prior years’
Adjusted EBITDA because there were no costs similar in nature to
these costs. Adjusted EBITDA includes stock-based compensation
expense and deferred financing fee amortization totaling $16
million and $9 million in third quarter 2021 and 2020,
respectively, and totaling $41 million and $22 million in the nine
months ended September 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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