Avis Budget Group, Inc. (
NASDAQ: CAR) today
announced financial results for second quarter 2022.
We ended the quarter with revenues 37% above
second quarter 2021, at $3.2 billion, making it our best quarter
revenue in Company history. Our revenues were driven by continued
strong demand and increased revenue per day.
Net income was $774 million and our Adjusted
EBITDA was $1.2 billion, our best quarterly net income and Adjusted
EBITDA in our history.
Our liquidity position at the end of the quarter
was approximately $850 million, with an additional $1.9 billion of
fleet funding capacity. We have well-laddered corporate debt and no
meaningful maturities until 2024.
“Through enhanced revenue generation, diligent
fleet management and stringent cost control, we generated another
record quarter for the Company, highlighted by the Americas
reporting over one billion of Adjusted EBITDA for the first time in
a quarter and International achieving their highest second quarter
Adjusted EBITDA ever,” said Joe Ferraro, Avis Budget Group Chief
Executive Officer. “Our team continues to excel at managing the
increased demand of our customers while supplying the outstanding
service they have come to expect. I want to thank all the employees
for their continued tireless efforts in helping us achieve this
milestone.”
Q2 Highlights
- Total Company
revenues increased by 37% and 39% compared to second quarter 2021
and 2019, respectively.
- Adjusted EBITDA in
the Americas was $1.0 billion for the second quarter 2022 driven by
the highest quarter demand in history and strong pricing. It is the
best Adjusted EBITDA in Americas' history.
- Adjusted EBITDA in
International was $183 million for the second quarter 2022 driven
by increased pricing and volume, the best second quarter Adjusted
EBITDA in International's history.
Investor Conference Call
We will host a conference call to discuss our
second quarter results on August 2, 2022, 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 13730889.
About Avis Budget Group
Avis Budget Group, Inc. is a leading global
provider of mobility solutions, both through our Avis and Budget
brands, which have more than 10,000 rental locations in
approximately 180 countries around the world, and through our
Zipcar brand, which is the world's leading car sharing network.
Avis Budget Group operates most of our 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, impacts from the COVID-19 outbreak, future
travel levels, cost-saving actions, the global semiconductor
shortage and liquidity 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 volatility 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 our performance or achievements,
such as the potential effects on the world economy and markets,
elections and government shutdowns, as a result of Russia’s recent
invasion of Ukraine. 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, 2021, Quarterly Report on Form 10-Q for the three
months ended March 31, 2022 and in other filings and furnishings
made by us with the Securities and Exchange Commission (the "SEC")
from time to time. We undertake 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 our comparable period-over-period
results. 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
our 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.
Contacts |
Investor Relations Contact: |
David Calabria |
IR@avisbudget.com |
|
Media Relations Contact: |
James Tomlinson |
ABGPress@edelman.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, |
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
Income Statement and Other Items |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
3,244 |
|
|
$ |
2,371 |
|
|
37 |
% |
|
$ |
5,676 |
|
$ |
3,743 |
|
52 |
% |
|
Income before income taxes |
|
1,083 |
|
|
|
486 |
|
|
123 |
% |
|
|
1,778 |
|
|
236 |
|
653 |
% |
|
Net income |
|
774 |
|
|
|
398 |
|
|
94 |
% |
|
|
1,301 |
|
|
228 |
|
471 |
% |
|
Earnings per share - diluted |
|
15.71 |
|
|
|
5.63 |
|
|
179 |
% |
|
|
25.14 |
|
|
3.23 |
|
678 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Measures
(non-GAAP)(A) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
1,205 |
|
|
|
624 |
|
|
93 |
% |
|
|
2,015 |
|
|
671 |
|
200 |
% |
|
Adjusted pretax income |
|
1,098 |
|
|
|
512 |
|
|
114 |
% |
|
|
1,811 |
|
|
448 |
|
304 |
% |
|
Adjusted net income |
|
790 |
|
|
|
417 |
|
|
89 |
% |
|
|
1,334 |
|
|
385 |
|
246 |
% |
|
Adjusted earnings per share - diluted |
|
15.94 |
|
|
|
5.90 |
|
|
170 |
% |
|
|
25.65 |
|
|
5.45 |
|
371 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
|
|
|
|
|
|
June 30,2022 |
|
December31, 2021 |
|
|
|
|
|
|
|
|
Balance Sheet Items |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
$ |
579 |
|
|
$ |
534 |
|
|
|
|
|
|
|
|
|
|
Vehicles, net |
|
16,315 |
|
|
|
12,866 |
|
|
|
|
|
|
|
|
|
|
Debt under vehicle programs |
|
14,098 |
|
|
|
11,390 |
|
|
|
|
|
|
|
|
|
|
Corporate debt |
|
4,651 |
|
|
|
4,009 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity attributable to Avis Budget Group, Inc. |
|
(654 |
) |
|
|
(220 |
) |
|
|
|
|
|
|
|
|
Segment
Results |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
2,567 |
|
|
$ |
1,974 |
|
|
30 |
% |
|
$ |
4,567 |
|
|
$ |
3,054 |
|
|
50 |
% |
International |
|
677 |
|
|
|
397 |
|
|
71 |
% |
|
|
1,109 |
|
|
|
689 |
|
|
61 |
% |
Corporate and Other |
|
— |
|
|
|
— |
|
|
n/m |
|
|
— |
|
|
|
— |
|
|
n/m |
Total Company |
$ |
3,244 |
|
|
$ |
2,371 |
|
|
37 |
% |
|
$ |
5,676 |
|
|
$ |
3,743 |
|
|
52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
1,041 |
|
|
$ |
634 |
|
|
64 |
% |
|
$ |
1,851 |
|
|
$ |
742 |
|
|
149 |
% |
International |
|
183 |
|
|
|
8 |
|
|
n/m |
|
|
206 |
|
|
|
(42 |
) |
|
590 |
% |
Corporate and Other |
|
(19 |
) |
|
|
(18 |
) |
|
n/m |
|
|
(42 |
) |
|
|
(29 |
) |
|
n/m |
Total Company |
$ |
1,205 |
|
|
$ |
624 |
|
|
93 |
% |
|
$ |
2,015 |
|
|
$ |
671 |
|
|
200 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
_______ |
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 EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Revenues |
$ |
3,244 |
|
|
$ |
2,371 |
|
$ |
5,676 |
|
|
$ |
3,743 |
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Operating |
|
1,349 |
|
|
|
1,032 |
|
|
2,496 |
|
|
|
1,864 |
|
Vehicle depreciation and lease charges, net |
|
234 |
|
|
|
338 |
|
|
345 |
|
|
|
592 |
|
Selling, general and administrative |
|
359 |
|
|
|
294 |
|
|
642 |
|
|
|
476 |
|
Vehicle interest, net |
|
97 |
|
|
|
77 |
|
|
174 |
|
|
|
152 |
|
Non-vehicle related depreciation and amortization |
|
51 |
|
|
|
62 |
|
|
109 |
|
|
|
130 |
|
Interest expense related to corporate debt, net: |
|
|
|
|
|
|
|
|
Interest expense |
|
64 |
|
|
|
59 |
|
|
117 |
|
|
|
120 |
|
Early extinguishment of debt |
|
— |
|
|
|
— |
|
|
— |
|
|
|
129 |
|
Restructuring and other related charges |
|
6 |
|
|
|
22 |
|
|
14 |
|
|
|
42 |
|
Transaction-related costs, net |
|
1 |
|
|
|
1 |
|
|
1 |
|
|
|
2 |
Total expenses |
|
2,161 |
|
|
|
1,885 |
|
|
3,898 |
|
|
|
3,507 |
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
1,083 |
|
|
|
486 |
|
|
1,778 |
|
|
|
236 |
Provision for income taxes |
|
309 |
|
|
|
88 |
|
|
477 |
|
|
|
8 |
Net income |
|
774 |
|
|
|
398 |
|
|
1,301 |
|
|
|
228 |
|
Less: net
loss attributable to non-controlling interests |
|
(4 |
) |
|
|
— |
|
|
(6 |
) |
|
|
— |
Net income
attributable to Avis Budget Group, Inc |
$ |
778 |
|
|
$ |
398 |
|
$ |
1,307 |
|
|
$ |
228 |
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
Basic |
$ |
16.05 |
|
|
$ |
5.69 |
|
$ |
25.74 |
|
|
$ |
3.26 |
|
Diluted |
$ |
15.71 |
|
|
$ |
5.63 |
|
$ |
25.14 |
|
|
$ |
3.23 |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
48.5 |
|
|
|
69.9 |
|
|
50.8 |
|
|
|
69.9 |
|
Diluted |
|
49.5 |
|
|
|
70.6 |
|
|
52.0 |
|
|
|
70.6 |
Table 3 |
Avis Budget Group, Inc. |
KEY METRICS SUMMARY |
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
|
|
31,788 |
|
|
|
24,910 |
|
|
28 |
% |
|
|
59,270 |
|
|
|
42,931 |
|
|
38 |
% |
|
Revenue per Day, excluding exchange rate
effects(A) |
|
$ |
80.91 |
|
|
$ |
79.26 |
|
|
2 |
% |
|
$ |
77.13 |
|
|
$ |
71.14 |
|
|
8 |
% |
|
Average Rental Fleet |
|
|
500,653 |
|
|
|
377,987 |
|
|
32 |
% |
|
|
472,004 |
|
|
|
336,310 |
|
|
40 |
% |
|
Vehicle Utilization |
|
|
69.8% |
|
|
|
72.4% |
|
|
(2.6) pps |
|
|
69.4% |
|
|
|
70.5% |
|
|
(1.1) pps |
|
Per-Unit Fleet Costs per Month, excluding exchange rate
effects(A) |
$ |
86 |
|
|
$ |
229 |
|
|
(62) |
% |
|
$ |
55 |
|
|
$ |
219 |
|
|
(75) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
|
|
10,798 |
|
|
|
8,135 |
|
|
33 |
% |
|
|
19,379 |
|
|
|
14,960 |
|
|
30 |
% |
|
Revenue per Day, excluding exchange rate
effects(A) |
|
$ |
70.17 |
|
|
$ |
48.72 |
|
|
44 |
% |
|
$ |
62.91 |
|
|
$ |
46.06 |
|
|
37 |
% |
|
Average Rental Fleet |
|
|
168,108 |
|
|
|
131,416 |
|
|
28 |
% |
|
|
159,448 |
|
|
|
124,443 |
|
|
28 |
% |
|
Vehicle Utilization |
|
|
70.6% |
|
|
|
68.0% |
|
|
2.6 pps |
|
|
67.1% |
|
|
|
66.4% |
|
|
0.7 pps |
|
Per-Unit Fleet Costs per Month, excluding exchange rate
effects(A) |
$ |
238 |
|
|
$ |
200 |
|
|
19 |
% |
|
$ |
219 |
|
|
$ |
199 |
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
|
|
42,586 |
|
|
|
33,045 |
|
|
29 |
% |
|
|
78,649 |
|
|
|
57,891 |
|
|
36 |
% |
|
Revenue per Day, excluding exchange rate
effects(A) |
|
$ |
78.19 |
|
|
$ |
71.74 |
|
|
9 |
% |
|
$ |
73.63 |
|
|
$ |
64.66 |
|
|
14 |
% |
|
Average Rental Fleet |
|
|
668,761 |
|
|
|
509,403 |
|
|
31 |
% |
|
|
631,452 |
|
|
|
460,753 |
|
|
37 |
% |
|
Vehicle Utilization |
|
|
70.0% |
|
|
|
71.3% |
|
|
(1.3) pps |
|
|
68.8% |
|
|
|
69.4% |
|
|
(0.6) pps |
|
Per-Unit Fleet Costs per Month, excluding exchange rate
effects(A) |
$ |
124 |
|
|
$ |
221 |
|
|
(44) |
% |
|
$ |
96 |
|
|
$ |
214 |
|
|
(55) |
% |
_______ |
|
|
|
|
|
|
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 June 30, |
|
Six Months Ended June 30, |
|
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
|
$ |
80.76 |
|
|
$ |
79.26 |
|
|
2 |
% |
|
$ |
77.05 |
|
|
$ |
71.14 |
|
|
8 |
% |
|
Per-Unit Fleet Costs per
Month |
|
$ |
85 |
|
|
$ |
229 |
|
|
(63) |
% |
|
$ |
55 |
|
|
$ |
219 |
|
|
(75) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
|
$ |
62.69 |
|
|
$ |
48.72 |
|
|
29 |
% |
|
$ |
57.26 |
|
|
$ |
46.06 |
|
|
24 |
% |
|
Per-Unit Fleet Costs per
Month |
|
$ |
212 |
|
|
$ |
200 |
|
|
6 |
% |
|
$ |
200 |
|
|
$ |
199 |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
|
$ |
76.18 |
|
|
$ |
71.74 |
|
|
6 |
% |
|
$ |
72.17 |
|
|
$ |
64.66 |
|
|
12 |
% |
|
Per-Unit Fleet Costs per
Month |
|
$ |
117 |
|
|
$ |
221 |
|
|
(47) |
% |
|
$ |
91 |
|
|
$ |
214 |
|
|
(57) |
% |
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 |
|
|
Six Months EndedJune 30, 2022 |
Operating Activities |
|
Net cash provided by operating activities |
$ |
2,371 |
|
|
|
Investing Activities |
|
Net cash used in investing activities exclusive of vehicle
programs |
$ |
(52 |
) |
Net cash used in investing activities of vehicle programs |
|
(3,818 |
) |
Net cash used in investing activities |
$ |
(3,870 |
) |
|
|
Financing Activities |
|
Net cash used in financing activities exclusive of vehicle
programs |
$ |
(1,036 |
) |
Net cash provided by financing activities of vehicle programs |
|
2,618 |
|
Net cash provided by financing activities |
$ |
1,582 |
|
|
|
Effect of changes in exchange rates on cash and cash equivalents,
program and restricted cash |
$ |
(25 |
) |
Net change in cash and cash equivalents, program and restricted
cash |
|
58 |
|
Cash and cash equivalents, program and restricted cash,
beginning of period(A) |
|
626 |
|
Cash and cash equivalents, program and restricted cash, end
of period(B) |
$ |
684 |
|
CONSOLIDATED SCHEDULE OF ADJUSTED FREE CASH FLOWS
(C) |
|
|
Six Months EndedJune 30, 2022 |
Income before income taxes |
$ |
1,778 |
|
Add-back of non-vehicle related depreciation and
amortization(D) |
|
113 |
|
Add-back of restructuring and other related costs |
|
14 |
|
Add-back of transaction-related costs, net |
|
1 |
|
Add-back of COVID-19 charges, net |
|
(9 |
) |
Add-back of unprecedented personal-injury and other legal matters,
net |
|
1 |
|
Working capital and other |
|
315 |
|
Capital expenditures(E) |
|
(102 |
) |
Tax payments, net of refunds |
|
(104 |
) |
Vehicle programs and related(F) |
|
(896 |
) |
Adjusted free cash flow |
$ |
1,111 |
|
|
|
Acquisition and related payments, net of acquired cash |
$ |
(1 |
) |
Borrowings, net of debt repayments |
|
718 |
|
Restructuring and other related payments |
|
(11 |
) |
Transaction-related payments |
|
(1 |
) |
Repurchases of common stock |
|
(1,748 |
) |
Change in program cash |
|
19 |
|
Change in restricted cash |
|
(1 |
) |
Foreign exchange effects, financing costs and other |
|
(28 |
) |
Net change in cash and cash equivalents, program and
restricted cash (per above) |
$ |
58 |
|
Table 4 (page 2 of 2) |
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES
TO ADJUSTED FREE CASH FLOW |
|
|
Six Months EndedJune 30, 2022 |
Net cash provided by operating activities (per
above) |
$ |
2,371 |
|
Investing activities of vehicle programs |
|
(3,818 |
) |
Financing activities of vehicle programs |
|
2,618 |
|
Capital expenditures |
|
(76 |
) |
Proceeds received on sale of assets and nonmarketable equity
securities |
|
2 |
|
Change in program cash |
|
(19 |
) |
Change in restricted cash |
|
1 |
|
Acquisition and disposition-related payments |
|
20 |
|
Restructuring and other related payments |
|
11 |
|
Transaction-related payments |
|
1 |
|
Adjusted free cash flow (per above) |
$ |
1,111 |
|
|
_______ |
(A) |
Consists of cash and cash equivalents of $534 million, program cash
of $89 million and restricted cash of $3 million. |
(B) |
Consists of cash and cash equivalents of $579 million, program cash
of $103 million and restricted cash of $2 million. |
(C) |
See Appendix I for the definition of Adjusted free cash flow. |
(D) |
Includes $4 million of cloud computing costs. |
(E) |
Includes $26 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. Also includes $17 million of
vehicles sold in the divestiture of our operations in the United
States Virgin Islands and the Netherlands. |
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 to Adjusted
EBITDA: |
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
774 |
|
|
$ |
398 |
|
|
$ |
1,301 |
|
|
$ |
228 |
|
|
|
Add: Provision
for income taxes |
|
309 |
|
|
|
88 |
|
|
|
477 |
|
|
|
8 |
|
|
Income before income taxes |
|
1,083 |
|
|
|
486 |
|
|
|
1,778 |
|
|
|
236 |
|
|
Add certain items: |
|
|
|
|
|
|
|
|
|
Acquisition-related
amortization expense |
|
10 |
|
|
|
14 |
|
|
|
26 |
|
|
|
32 |
|
|
|
Restructuring and other
related charges |
|
6 |
|
|
|
22 |
|
|
|
14 |
|
|
|
42 |
|
|
|
Unprecedented personal-injury
and other legal matters, net(A) |
|
— |
|
|
|
(11 |
) |
|
|
1 |
|
|
|
(11 |
) |
|
|
Transaction-related costs,
net |
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
Early extinguishment of
debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
129 |
|
|
|
COVID-19 charges,
net(B) |
|
(2 |
) |
|
|
— |
|
|
|
(9 |
) |
|
|
18 |
|
|
Adjusted pretax income |
|
1,098 |
|
|
|
512 |
|
|
|
1,811 |
|
|
|
448 |
|
|
Add: |
Non-vehicle related depreciation and amortization (excluding
acquisition-related amortization expense)(C) |
|
43 |
|
|
|
53 |
|
|
|
87 |
|
|
|
103 |
|
|
|
Interest expense related to corporate debt, net (excluding early
extinguishment of debt) |
|
64 |
|
|
|
59 |
|
|
|
117 |
|
|
|
120 |
|
|
Adjusted EBITDA |
$ |
1,205 |
|
|
$ |
624 |
|
|
$ |
2,015 |
|
|
$ |
671 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net income attributable to Avis Budget
Group, Inc. to adjusted net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Avis Budget Group, Inc. |
$ |
778 |
|
|
$ |
398 |
|
|
$ |
1,307 |
|
|
$ |
228 |
|
|
Add certain items, net of tax: |
|
|
|
|
|
|
|
|
|
Acquisition-related amortization expense |
|
7 |
|
|
|
11 |
|
|
|
19 |
|
|
|
24 |
|
|
|
Restructuring and other related charges |
|
5 |
|
|
|
16 |
|
|
|
12 |
|
|
|
31 |
|
|
|
Unprecedented personal-injury and other legal matters, net |
|
— |
|
|
|
(8 |
) |
|
|
1 |
|
|
|
(8 |
) |
|
|
Transaction-related costs, net |
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
Early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
96 |
|
|
|
COVID-19 charges, net |
|
(1 |
) |
|
|
— |
|
|
|
(6 |
) |
|
|
13 |
|
|
Adjusted net income |
$ |
790 |
|
|
$ |
417 |
|
|
$ |
1,334 |
|
|
$ |
385 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Diluted |
$ |
15.71 |
|
|
$ |
5.63 |
|
|
$ |
25.14 |
|
|
$ |
3.23 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share |
$ |
15.94 |
|
|
$ |
5.90 |
|
|
$ |
25.65 |
|
|
$ |
5.45 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to calculate Adjusted diluted earnings per
share |
|
49.5 |
|
|
|
70.6 |
|
|
|
52.0 |
|
|
|
70.6 |
|
_______ |
|
|
|
|
|
|
|
(A) |
Reported within operating expenses in our Consolidated Statements
of Operations. |
(B) |
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, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Minimum annual guaranteed rent in excess of concession fees,
net |
$ |
(2 |
) |
|
$ |
(3 |
) |
|
$ |
(9 |
) |
|
$ |
16 |
|
|
Vehicles damaged in overflow parking lots, net of insurance
proceeds |
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
(4 |
) |
|
Other charges |
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
6 |
|
|
Operating expenses |
$ |
(2 |
) |
|
$ |
— |
|
|
$ |
(9 |
) |
|
$ |
17 |
|
|
Selling, general and administrative expenses |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1 |
|
|
COVID-19 charges, net |
$ |
(2 |
) |
|
$ |
— |
|
|
$ |
(9 |
) |
|
$ |
18 |
|
(C) |
For the three and six months ended June 30, 2022 consists of $2
million and $4 million, respectively, within operating expenses in
our Consolidated Statements of Operations related to cloud
computing costs. 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, 2022 |
|
Three Months Ended June 30, 2021 |
|
Americas |
|
International |
|
Total |
|
Americas |
|
International |
|
Total |
Revenue per Day (RPD) |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
2,567 |
|
|
$ |
677 |
|
|
$ |
3,244 |
|
|
$ |
1,974 |
|
|
$ |
397 |
|
|
$ |
2,371 |
|
|
Currency exchange rate effects |
|
5 |
|
|
|
81 |
|
|
|
86 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Revenue excluding
exchange rate effects |
$ |
2,572 |
|
|
$ |
758 |
|
|
$ |
3,330 |
|
|
$ |
1,974 |
|
|
$ |
397 |
|
|
$ |
2,371 |
|
|
Rental days (000's) |
|
31,788 |
|
|
|
10,798 |
|
|
|
42,586 |
|
|
|
24,910 |
|
|
|
8,135 |
|
|
|
33,045 |
|
|
RPD excluding exchange rate effects(in $'s) |
$ |
80.91 |
|
|
$ |
70.17 |
|
|
$ |
78.19 |
|
|
$ |
79.26 |
|
|
$ |
48.72 |
|
|
$ |
71.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle Utilization |
|
|
|
|
|
|
|
|
|
|
|
|
Rental days (000's) |
|
31,788 |
|
|
|
10,798 |
|
|
|
42,586 |
|
|
|
24,910 |
|
|
|
8,135 |
|
|
|
33,045 |
|
|
Average rental fleet |
|
500,653 |
|
|
|
168,108 |
|
|
|
668,761 |
|
|
|
377,987 |
|
|
|
131,416 |
|
|
|
509,403 |
|
|
Number of days in period |
|
91 |
|
|
|
91 |
|
|
|
91 |
|
|
|
91 |
|
|
|
91 |
|
|
|
91 |
|
|
Available rental days (000's) |
|
45,559 |
|
|
|
15,298 |
|
|
|
60,857 |
|
|
|
34,397 |
|
|
|
11,959 |
|
|
|
46,356 |
|
|
Vehicle utilization |
|
69.8 |
% |
|
|
70.6 |
% |
|
|
70.0 |
% |
|
|
72.4 |
% |
|
|
68.0 |
% |
|
|
71.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Per-Unit Fleet Costs |
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle depreciation
and lease charges, net |
$ |
128 |
|
|
$ |
106 |
|
|
$ |
234 |
|
|
$ |
259 |
|
|
$ |
79 |
|
|
$ |
338 |
|
|
Currency exchange rate effects |
|
1 |
|
|
|
14 |
|
|
|
15 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
$ |
129 |
|
|
$ |
120 |
|
|
$ |
249 |
|
|
$ |
259 |
|
|
$ |
79 |
|
|
$ |
338 |
|
|
Average rental fleet |
|
500,653 |
|
|
|
168,108 |
|
|
|
668,761 |
|
|
|
377,987 |
|
|
|
131,416 |
|
|
|
509,403 |
|
|
Per-unit fleet costs (in $'s) |
$ |
257 |
|
|
$ |
713 |
|
|
$ |
372 |
|
|
$ |
686 |
|
|
$ |
599 |
|
|
$ |
664 |
|
|
Number of months in period |
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
Per-unit fleet costs
per month excluding exchange rate effects (in $'s) |
$ |
86 |
|
|
$ |
238 |
|
|
$ |
124 |
|
|
$ |
229 |
|
|
$ |
200 |
|
|
$ |
221 |
|
|
|
Six Months Ended June 30, 2022 |
|
Six Months Ended June 30, 2021 |
|
|
Americas |
|
International |
|
Total |
|
Americas |
|
International |
|
Total |
Revenue per Day (RPD) |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
4,567 |
|
|
$ |
1,109 |
|
|
$ |
5,676 |
|
|
$ |
3,054 |
|
|
$ |
689 |
|
|
$ |
3,743 |
|
|
Currency exchange rate effects |
|
5 |
|
|
|
110 |
|
|
|
115 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Revenue excluding
exchange rate effects |
$ |
4,572 |
|
|
$ |
1,219 |
|
|
$ |
5,791 |
|
|
$ |
3,054 |
|
|
$ |
689 |
|
|
$ |
3,743 |
|
|
Rental days (000's) |
|
59,270 |
|
|
|
19,379 |
|
|
|
78,649 |
|
|
|
42,931 |
|
|
|
14,960 |
|
|
|
57,891 |
|
|
RPD excluding exchange rate effects(in $'s) |
$ |
77.13 |
|
|
$ |
62.91 |
|
|
$ |
73.63 |
|
|
$ |
71.14 |
|
|
$ |
46.06 |
|
|
$ |
64.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle Utilization |
|
|
|
|
|
|
|
|
|
|
|
|
Rental days (000's) |
|
59,270 |
|
|
|
19,379 |
|
|
|
78,649 |
|
|
|
42,931 |
|
|
|
14,960 |
|
|
|
57,891 |
|
|
Average rental fleet |
|
472,004 |
|
|
|
159,448 |
|
|
|
631,452 |
|
|
|
336,310 |
|
|
|
124,443 |
|
|
|
460,753 |
|
|
Number of days in period |
|
181 |
|
|
|
181 |
|
|
|
181 |
|
|
|
181 |
|
|
|
181 |
|
|
|
181 |
|
|
Available rental days (000's) |
|
85,433 |
|
|
|
28,860 |
|
|
|
114,293 |
|
|
|
60,872 |
|
|
|
22,524 |
|
|
|
83,396 |
|
|
Vehicle utilization |
|
69.4 |
% |
|
|
67.1 |
% |
|
|
68.8 |
% |
|
|
70.5 |
% |
|
|
66.4 |
% |
|
|
69.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Per-Unit Fleet Costs |
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle depreciation
and lease charges, net |
$ |
154 |
|
|
$ |
191 |
|
|
$ |
345 |
|
|
$ |
443 |
|
|
$ |
149 |
|
|
$ |
592 |
|
|
Currency exchange rate effects |
|
1 |
|
|
|
19 |
|
|
|
20 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
$ |
155 |
|
|
$ |
210 |
|
|
$ |
365 |
|
|
$ |
443 |
|
|
$ |
149 |
|
|
$ |
592 |
|
|
Average rental fleet |
|
472,004 |
|
|
|
159,448 |
|
|
|
631,452 |
|
|
|
336,310 |
|
|
|
124,443 |
|
|
|
460,753 |
|
|
Per-unit fleet costs (in $'s) |
$ |
329 |
|
|
$ |
1,314 |
|
|
$ |
578 |
|
|
$ |
1,317 |
|
|
$ |
1,196 |
|
|
$ |
1,284 |
|
|
Number of months in period |
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
Per-unit fleet costs
per month excluding exchange rate effects (in $'s) |
$ |
55 |
|
|
$ |
219 |
|
|
$ |
96 |
|
|
$ |
219 |
|
|
$ |
199 |
|
|
$ |
214 |
|
_______ |
|
|
|
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, 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 $11 million and $16 million in second quarter
2022 and 2021, respectively, and totaling $23 million and $25
million in the six months ended June 30, 2022 and 2021,
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 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 our aggregate performance. 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, charges for unprecedented personal-injury
and other legal matters, COVID-19 charges and non-operational
charges related to shareholder activist activity. 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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