Avis Budget Group, Inc. (
NASDAQ: CAR) today
announced financial results for third quarter 2022.
We ended the quarter with revenues 18% above
third quarter 2021, at $3.5 billion, a new quarterly revenue
record, surpassing our second quarter 2022 record, driven by
continued strong demand and increased revenue per day.
Net income was $1.0 billion and our Adjusted
EBITDA was $1.5 billion, our best quarterly net income and Adjusted
EBITDA in our history.
Our liquidity position at the end of the quarter
was approximately $1.7 billion, with an additional $2.6 billion of
fleet funding capacity. We have well-laddered corporate debt and no
meaningful maturities until 2024.
“I want to thank all the employees for their
terrific efforts in helping us deliver the best quarterly results
in our Company’s history,” said Joe Ferraro, Avis Budget Group
Chief Executive Officer. “Despite growing concerns around an
economic slowdown, our strong summer performance, driven by
increased demand in both the commercial and leisure segments,
carried through to September. We remain optimistic this will
continue throughout the Fall and into the holiday season.”
Q3 Highlights
- Total Company
revenues increased by 18% and 29% compared to third quarter 2021
and 2019, respectively.
- Adjusted EBITDA in the Americas was
$1.2 billion for the third quarter 2022 driven by record
demand. It is the best quarterly Adjusted EBITDA in
Americas’ history.
- Adjusted EBITDA in
International was $291 million for the third quarter 2022 driven by
increased pricing and return of demand. It is the best quarterly
Adjusted EBITDA in International's history.
- QuickPass was successfully deployed
across all major US airports allowing customers to bypass the
counter, select their vehicle, and use an automated express exit
and completion of their rental, including their receipt, all
through their phone. Additionally, we continue to invest in the
build-out of our electric vehicle infrastructure.
Investor Conference Call
We will host a conference call to discuss our
third quarter results on November 1, 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 13733521.
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, future demand for our services, and global
economic conditions 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, COVID-19, which has had, and 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 achieve and maintain cost savings, 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, 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 the ongoing military conflict between Russia and
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 and six months ended
June 30, 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 September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
Income
Statement and Other Items |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
3,547 |
|
|
$ |
3,001 |
|
|
18 |
% |
|
$ |
9,223 |
|
$ |
6,744 |
|
37 |
% |
|
Income before income
taxes |
|
1,342 |
|
|
|
929 |
|
|
44 |
% |
|
|
3,120 |
|
|
1,165 |
|
168 |
% |
|
Net income |
|
1,031 |
|
|
|
674 |
|
|
53 |
% |
|
|
2,332 |
|
|
902 |
|
159 |
% |
|
Earnings per share -
diluted |
|
21.67 |
|
|
|
10.45 |
|
|
107 |
% |
|
|
46.32 |
|
|
13.16 |
|
252 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
Measures (non-GAAP) (A) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
1,460 |
|
|
|
1,057 |
|
|
38 |
% |
|
|
3,475 |
|
|
1,728 |
|
101 |
% |
|
Adjusted pretax income |
|
1,344 |
|
|
|
954 |
|
|
41 |
% |
|
|
3,155 |
|
|
1,402 |
|
125 |
% |
|
Adjusted net income |
|
1,035 |
|
|
|
693 |
|
|
49 |
% |
|
|
2,369 |
|
|
1,078 |
|
120 |
% |
|
Adjusted earnings per share -
diluted |
|
21.70 |
|
|
|
10.74 |
|
|
102 |
% |
|
|
46.87 |
|
|
15.72 |
|
198 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
|
|
|
|
|
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
|
|
|
|
|
|
Balance
Sheet Items |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
$ |
581 |
|
|
$ |
534 |
|
|
|
|
|
|
|
|
|
|
Vehicles, net |
|
15,391 |
|
|
|
12,866 |
|
|
|
|
|
|
|
|
|
|
Debt under vehicle
programs |
|
13,104 |
|
|
|
11,390 |
|
|
|
|
|
|
|
|
|
|
Corporate debt |
|
4,590 |
|
|
|
4,009 |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
attributable to Avis Budget Group, Inc. |
|
(509 |
) |
|
|
(220 |
) |
|
|
|
|
|
|
|
|
Segment Results |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
2,703 |
|
|
$ |
2,403 |
|
|
12 |
% |
|
$ |
7,270 |
|
|
$ |
5,457 |
|
|
33 |
% |
International |
|
844 |
|
|
|
598 |
|
|
41 |
% |
|
|
1,953 |
|
|
|
1,287 |
|
|
52 |
% |
Corporate and Other |
|
— |
|
|
|
— |
|
|
n/m |
|
|
|
— |
|
|
|
— |
|
|
n/m |
|
Total Company |
$ |
3,547 |
|
|
$ |
3,001 |
|
|
18 |
% |
|
$ |
9,223 |
|
|
$ |
6,744 |
|
|
37 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
Americas |
$ |
1,185 |
|
|
$ |
952 |
|
|
24 |
% |
|
$ |
3,036 |
|
|
$ |
1,694 |
|
|
79 |
% |
International |
|
291 |
|
|
|
128 |
|
|
127 |
% |
|
|
497 |
|
|
|
86 |
|
|
478 |
% |
Corporate and Other |
|
(16 |
) |
|
|
(23 |
) |
|
n/m |
|
|
|
(58 |
) |
|
|
(52 |
) |
|
n/m |
|
Total Company |
$ |
1,460 |
|
|
$ |
1,057 |
|
|
38 |
% |
|
$ |
3,475 |
|
|
$ |
1,728 |
|
|
101 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
_______ |
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, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Revenues |
$ |
3,547 |
|
|
$ |
3,001 |
|
|
$ |
9,223 |
|
|
$ |
6,744 |
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Operating |
|
1,464 |
|
|
|
1,225 |
|
|
|
3,960 |
|
|
|
3,089 |
|
|
Vehicle depreciation and lease charges, net |
|
134 |
|
|
|
277 |
|
|
|
479 |
|
|
|
869 |
|
|
Selling, general and administrative |
|
384 |
|
|
|
361 |
|
|
|
1,026 |
|
|
|
837 |
|
|
Vehicle interest, net |
|
107 |
|
|
|
80 |
|
|
|
281 |
|
|
|
232 |
|
|
Non-vehicle related depreciation and amortization |
|
59 |
|
|
|
69 |
|
|
|
168 |
|
|
|
199 |
|
|
Interest expense related to corporate debt, net: |
|
|
|
|
|
|
|
|
Interest expense |
|
64 |
|
|
|
47 |
|
|
|
181 |
|
|
|
167 |
|
|
Early extinguishment of debt |
|
— |
|
|
|
7 |
|
|
|
— |
|
|
|
136 |
|
|
Restructuring and other related charges |
|
2 |
|
|
|
5 |
|
|
|
16 |
|
|
|
47 |
|
|
Transaction-related costs, net |
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
Other (income) expense, net |
|
(9 |
) |
|
|
— |
|
|
|
(9 |
) |
|
|
— |
|
Total
expenses |
|
2,205 |
|
|
|
2,072 |
|
|
|
6,103 |
|
|
|
5,579 |
|
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
1,342 |
|
|
|
929 |
|
|
|
3,120 |
|
|
|
1,165 |
|
Provision for income taxes |
|
311 |
|
|
|
255 |
|
|
|
788 |
|
|
|
263 |
|
Net
income |
|
1,031 |
|
|
|
674 |
|
|
|
2,332 |
|
|
|
902 |
|
|
Less: net loss attributable to
non-controlling interests |
|
(3 |
) |
|
|
(1 |
) |
|
|
(9 |
) |
|
|
(1 |
) |
Net income
attributable to Avis Budget Group, Inc |
$ |
1,034 |
|
|
$ |
675 |
|
|
$ |
2,341 |
|
|
$ |
903 |
|
|
|
|
|
|
|
|
|
|
Earnings
per share |
|
|
|
|
|
|
|
|
Basic |
$ |
22.08 |
|
|
$ |
10.58 |
|
|
$ |
47.34 |
|
|
$ |
13.31 |
|
|
Diluted |
$ |
21.67 |
|
|
$ |
10.45 |
|
|
$ |
46.32 |
|
|
$ |
13.16 |
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
46.8 |
|
|
|
63.7 |
|
|
|
49.5 |
|
|
|
67.8 |
|
|
Diluted |
|
47.7 |
|
|
|
64.6 |
|
|
|
50.6 |
|
|
|
68.6 |
|
Table 3
Avis Budget Group,
Inc.KEY METRICS SUMMARY
|
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
|
|
33,421 |
|
|
|
28,836 |
|
|
16 |
% |
|
|
92,691 |
|
|
|
71,768 |
|
|
29 |
% |
|
Revenue per Day, excluding
exchange rate effects (A) |
|
$ |
81.06 |
|
|
$ |
83.33 |
|
|
(3 |
)% |
|
$ |
78.55 |
|
|
$ |
76.04 |
|
|
3 |
% |
|
Average Rental Fleet |
|
|
507,350 |
|
|
|
434,416 |
|
|
17 |
% |
|
|
483,786 |
|
|
|
369,012 |
|
|
31 |
% |
|
Vehicle Utilization |
|
|
71.6 |
% |
|
|
72.2 |
% |
|
(0.6) pps |
|
|
70.2 |
% |
|
|
71.2 |
% |
|
(1.0) pps |
|
Per-Unit Fleet
Costs per Month, excluding exchange rate effects
(A) |
$ |
10 |
|
|
$ |
143 |
|
|
(93 |
)% |
|
$ |
39 |
|
|
$ |
190 |
|
|
(79 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
|
|
13,041 |
|
|
|
10,720 |
|
|
22 |
% |
|
|
32,420 |
|
|
|
25,679 |
|
|
26 |
% |
|
Revenue per Day, excluding
exchange rate effects (A) |
|
$ |
74.45 |
|
|
$ |
55.79 |
|
|
33 |
% |
|
$ |
67.55 |
|
|
$ |
50.12 |
|
|
35 |
% |
|
Average Rental Fleet |
|
|
199,638 |
|
|
|
166,431 |
|
|
20 |
% |
|
|
172,845 |
|
|
|
138,439 |
|
|
25 |
% |
|
Vehicle Utilization |
|
|
71.0 |
% |
|
|
70.0 |
% |
|
1.0 pps |
|
|
68.7 |
% |
|
|
67.9 |
% |
|
0.8 pps |
|
Per-Unit Fleet
Costs per Month, excluding exchange rate effects
(A) |
$ |
231 |
|
|
$ |
181 |
|
|
28 |
% |
|
$ |
224 |
|
|
$ |
192 |
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Days (000’s) |
|
|
46,462 |
|
|
|
39,556 |
|
|
17 |
% |
|
|
125,111 |
|
|
|
97,447 |
|
|
28 |
% |
|
Revenue per Day, excluding
exchange rate effects (A) |
|
$ |
79.21 |
|
|
$ |
75.86 |
|
|
4 |
% |
|
$ |
75.70 |
|
|
$ |
69.21 |
|
|
9 |
% |
|
Average Rental Fleet |
|
|
706,988 |
|
|
|
600,847 |
|
|
18 |
% |
|
|
656,631 |
|
|
|
507,451 |
|
|
29 |
% |
|
Vehicle Utilization |
|
|
71.4 |
% |
|
|
71.6 |
% |
|
(0.2) pps |
|
|
69.8 |
% |
|
|
70.3 |
% |
|
(0.5) pps |
|
Per-Unit Fleet
Costs per Month, excluding exchange rate effects
(A) |
$ |
72 |
|
|
$ |
154 |
|
|
(53 |
)% |
|
$ |
88 |
|
|
$ |
190 |
|
|
(54 |
)% |
_______ |
|
|
|
|
|
|
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, |
|
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
|
$ |
80.89 |
|
|
$ |
83.33 |
|
|
(3 |
)% |
|
$ |
78.43 |
|
|
$ |
76.04 |
|
|
3 |
% |
|
Per-Unit Fleet Costs per
Month |
|
$ |
9 |
|
|
$ |
143 |
|
|
(94 |
)% |
|
$ |
39 |
|
|
$ |
190 |
|
|
(79 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
|
$ |
64.62 |
|
|
$ |
55.79 |
|
|
16 |
% |
|
$ |
60.22 |
|
|
$ |
50.12 |
|
|
20 |
% |
|
Per-Unit Fleet Costs per
Month |
|
$ |
200 |
|
|
$ |
181 |
|
|
10 |
% |
|
$ |
200 |
|
|
$ |
192 |
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per Day |
|
$ |
76.32 |
|
|
$ |
75.86 |
|
|
1 |
% |
|
$ |
73.72 |
|
|
$ |
69.21 |
|
|
7 |
% |
|
Per-Unit Fleet Costs per
Month |
|
$ |
63 |
|
|
$ |
154 |
|
|
(59 |
)% |
|
$ |
81 |
|
|
$ |
190 |
|
|
(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
|
Nine Months Ended September 30, 2022 |
Operating
Activities |
|
Net cash provided by operating activities |
$ |
3,862 |
|
|
|
Investing
Activities |
|
Net cash used in investing activities exclusive of vehicle
programs |
$ |
(152 |
) |
Net cash used in investing activities of vehicle programs |
|
(3,424 |
) |
Net cash used in investing activities |
$ |
(3,576 |
) |
|
|
Financing
Activities |
|
Net cash used in financing activities exclusive of vehicle
programs |
$ |
(1,830 |
) |
Net cash provided by financing activities of vehicle programs |
|
1,692 |
|
Net cash used in financing activities |
$ |
(138 |
) |
|
|
Effect of changes in exchange
rates on cash and cash equivalents, program and restricted
cash |
$ |
(53 |
) |
Net change in cash and cash
equivalents, program and restricted cash |
|
95 |
|
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) |
$ |
721 |
|
CONSOLIDATED SCHEDULE OF ADJUSTED FREE
CASH FLOWS (C)
|
Nine Months Ended September 30, 2022 |
Income before income taxes |
$ |
3,120 |
|
Add-back of non-vehicle
related depreciation and amortization (D) |
|
174 |
|
Add-back of restructuring and
other related costs |
|
16 |
|
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 |
|
Add-back of other (income)
expense, net |
|
(9 |
) |
Working capital and other |
|
246 |
|
Capital expenditures
(E) |
|
(164 |
) |
Tax payments, net of
refunds |
|
(148 |
) |
Vehicle programs and related
(F) |
|
(1,239 |
) |
Adjusted free cash
flow |
$ |
1,989 |
|
|
|
Acquisition and related
payments, net of acquired cash |
$ |
(1 |
) |
Cash disposed upon
deconsolidation of subsidiary |
|
(55 |
) |
Borrowings, net of debt
repayments |
|
711 |
|
Restructuring and other
related payments |
|
(14 |
) |
Transaction-related
payments |
|
(2 |
) |
Repurchases of common
stock |
|
(2,574 |
) |
Change in program cash |
|
60 |
|
Change in restricted cash |
|
(1 |
) |
Foreign exchange effects,
financing costs and other |
|
(18 |
) |
Net change in cash and
cash equivalents, program and restricted cash (per
above) |
$ |
95 |
|
Table 4 (page 2 of 2)
RECONCILIATION OF NET CASH PROVIDED BY
OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
|
Nine Months Ended September 30, 2022 |
Net cash provided by operating activities (per
above) |
$ |
3,862 |
|
Investing activities of vehicle programs |
|
(3,424 |
) |
Financing activities of vehicle programs |
|
1,692 |
|
Capital expenditures |
|
(120 |
) |
Proceeds received on sale of assets and nonmarketable equity
securities |
|
2 |
|
Change in program cash |
|
(60 |
) |
Change in restricted cash |
|
1 |
|
Acquisition and disposition-related payments |
|
20 |
|
Restructuring and other related payments |
|
14 |
|
Transaction-related payments |
|
2 |
|
Adjusted free cash
flow (per above) |
$ |
1,989 |
|
|
_______ |
(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 $581 million, program cash
of $139 million and restricted cash of $1 million. |
(C) |
See Appendix I for the definition of Adjusted free cash flow. |
(D) |
Includes $6 million of cloud computing costs. |
(E) |
Includes $44 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 EndedSeptember 30, |
|
Nine Months Ended September
30, |
Reconciliation of Net income to Adjusted
EBITDA: |
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
1,031 |
|
|
$ |
674 |
|
|
$ |
2,332 |
|
|
$ |
902 |
|
|
|
Add: Provision for income taxes |
|
311 |
|
|
|
255 |
|
|
|
788 |
|
|
|
263 |
|
|
Income
before income taxes |
|
1,342 |
|
|
|
929 |
|
|
|
3,120 |
|
|
|
1,165 |
|
|
|
|
|
|
|
|
|
|
|
|
Add certain
items: |
|
|
|
|
|
|
|
|
Acquisition-related amortization expense |
|
9 |
|
|
|
13 |
|
|
|
35 |
|
|
|
45 |
|
|
Restructuring and other related charges |
|
2 |
|
|
|
5 |
|
|
|
16 |
|
|
|
47 |
|
|
Unprecedented personal-injury and other legal matters, net
(A) |
|
— |
|
|
|
5 |
|
|
|
1 |
|
|
|
(6 |
) |
|
Transaction-related costs, net |
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
Early extinguishment of debt |
|
— |
|
|
|
7 |
|
|
|
— |
|
|
|
136 |
|
|
COVID-19 charges, net (B) |
|
— |
|
|
|
(6 |
) |
|
|
(9 |
) |
|
|
12 |
|
|
Other (income) expense, net (C) |
|
(9 |
) |
|
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
Adjusted
pretax income |
|
1,344 |
|
|
|
954 |
|
|
|
3,155 |
|
|
|
1,402 |
|
|
|
|
|
|
|
|
|
|
|
Add: |
Non-vehicle related depreciation
and amortization (excluding acquisition-related amortization
expense) (D) |
|
52 |
|
|
|
56 |
|
|
|
139 |
|
|
|
159 |
|
|
|
Interest expense related to
corporate debt, net (excluding early extinguishment of debt) |
|
64 |
|
|
|
47 |
|
|
|
181 |
|
|
|
167 |
|
|
Adjusted
EBITDA |
$ |
1,460 |
|
|
$ |
1,057 |
|
|
$ |
3,475 |
|
|
$ |
1,728 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net income attributable to Avis Budget
Group, Inc. to adjusted net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Avis Budget Group, Inc. |
$ |
1,034 |
|
|
$ |
675 |
|
|
$ |
2,341 |
|
|
$ |
903 |
|
|
Add certain items,
net of tax: |
|
|
|
|
|
|
|
|
|
Acquisition-related
amortization expense |
|
6 |
|
|
|
9 |
|
|
|
25 |
|
|
|
33 |
|
|
|
Restructuring and other
related charges |
|
2 |
|
|
|
4 |
|
|
|
14 |
|
|
|
35 |
|
|
|
Unprecedented personal-injury
and other legal matters, net |
|
— |
|
|
|
4 |
|
|
|
1 |
|
|
|
(4 |
) |
|
|
Transaction-related costs,
net |
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
Early extinguishment of
debt |
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
101 |
|
|
|
COVID-19 charges, net |
|
— |
|
|
|
(5 |
) |
|
|
(6 |
) |
|
|
8 |
|
|
|
Other (income) expense,
net |
|
(7 |
) |
|
|
— |
|
|
|
(7 |
) |
|
|
— |
|
|
Adjusted
net income |
$ |
1,035 |
|
|
$ |
693 |
|
|
$ |
2,369 |
|
|
$ |
1,078 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share - Diluted |
$ |
21.67 |
|
|
$ |
10.45 |
|
|
$ |
46.32 |
|
|
$ |
13.16 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
diluted earnings per share |
$ |
21.70 |
|
|
$ |
10.74 |
|
|
$ |
46.87 |
|
|
$ |
15.72 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares
used to calculate Adjusted diluted earnings per share |
|
47.7 |
|
|
|
64.6 |
|
|
|
50.6 |
|
|
|
68.6 |
|
_______ |
|
|
|
|
|
|
|
(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 September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Minimum annual guaranteed rent in excess of concession fees,
net |
$ |
— |
|
$ |
(4 |
) |
|
$ |
(9 |
) |
|
$ |
12 |
|
|
Vehicles damaged in overflow parking lots, net of insurance
proceeds |
|
— |
|
|
(3 |
) |
|
|
— |
|
|
|
(7 |
) |
|
Other charges |
|
— |
|
|
1 |
|
|
|
— |
|
|
|
7 |
|
|
Operating expenses |
$ |
— |
|
$ |
(6 |
) |
|
$ |
(9 |
) |
|
$ |
11 |
|
|
Selling, general and
administrative expenses |
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1 |
|
|
COVID-19 charges, net |
$ |
— |
|
$ |
(6 |
) |
|
$ |
(9 |
) |
|
$ |
12 |
|
(C) |
Primarily relates to
a gain upon deconsolidation of a former subsidiary. |
(D) |
For the three and nine months ended September 30, 2022 consists of
$2 million and $6 million, respectively, within operating expenses
in our Consolidated Statements of Operations related to cloud
computing costs. 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, 2022 |
|
Three Months Ended September 30, 2021 |
|
|
Americas |
|
International |
|
Total |
|
Americas |
|
International |
|
Total |
Revenue
per Day (RPD) |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
2,703 |
|
|
$ |
844 |
|
|
$ |
3,547 |
|
|
$ |
2,403 |
|
|
$ |
598 |
|
|
$ |
3,001 |
|
|
Currency exchange rate
effects |
|
6 |
|
|
|
127 |
|
|
|
133 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Revenue excluding exchange rate
effects |
$ |
2,709 |
|
|
$ |
971 |
|
|
$ |
3,680 |
|
|
$ |
2,403 |
|
|
$ |
598 |
|
|
$ |
3,001 |
|
|
Rental days (000's) |
|
33,421 |
|
|
|
13,041 |
|
|
|
46,462 |
|
|
|
28,836 |
|
|
|
10,720 |
|
|
|
39,556 |
|
|
RPD excluding exchange rate
effects (in $'s) |
$ |
81.06 |
|
|
$ |
74.45 |
|
|
$ |
79.21 |
|
|
$ |
83.33 |
|
|
$ |
55.79 |
|
|
$ |
75.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization |
|
|
|
|
|
|
|
|
|
|
|
|
Rental days (000's) |
|
33,421 |
|
|
|
13,041 |
|
|
|
46,462 |
|
|
|
28,836 |
|
|
|
10,720 |
|
|
|
39,556 |
|
|
Average rental fleet |
|
507,350 |
|
|
|
199,638 |
|
|
|
706,988 |
|
|
|
434,416 |
|
|
|
166,431 |
|
|
|
600,847 |
|
|
Number of days in period |
|
92 |
|
|
|
92 |
|
|
|
92 |
|
|
|
92 |
|
|
|
92 |
|
|
|
92 |
|
|
Available rental days
(000's) |
|
46,676 |
|
|
|
18,367 |
|
|
|
65,043 |
|
|
|
39,966 |
|
|
|
15,312 |
|
|
|
55,278 |
|
|
Vehicle utilization |
|
71.6 |
% |
|
|
71.0 |
% |
|
|
71.4 |
% |
|
|
72.2 |
% |
|
|
70.0 |
% |
|
|
71.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Per-Unit
Fleet Costs |
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle depreciation and lease
charges, net |
$ |
14 |
|
|
$ |
120 |
|
|
$ |
134 |
|
|
$ |
187 |
|
|
$ |
90 |
|
|
$ |
277 |
|
|
Currency exchange rate
effects |
|
1 |
|
|
|
18 |
|
|
|
19 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
$ |
15 |
|
|
$ |
138 |
|
|
$ |
153 |
|
|
$ |
187 |
|
|
$ |
90 |
|
|
$ |
277 |
|
|
Average rental fleet |
|
507,350 |
|
|
|
199,638 |
|
|
|
706,988 |
|
|
|
434,416 |
|
|
|
166,431 |
|
|
|
600,847 |
|
|
Per-unit fleet costs (in
$'s) |
$ |
29 |
|
|
$ |
693 |
|
|
$ |
217 |
|
|
$ |
430 |
|
|
$ |
543 |
|
|
$ |
461 |
|
|
Number of months in
period |
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
Per-unit fleet costs per month
excluding exchange rate effects (in $'s) |
$ |
10 |
|
|
$ |
231 |
|
|
$ |
72 |
|
|
$ |
143 |
|
|
$ |
181 |
|
|
$ |
154 |
|
|
|
Nine Months Ended September 30, 2022 |
|
Nine Months Ended September 30, 2021 |
|
|
Americas |
|
International |
|
Total |
|
Americas |
|
International |
|
Total |
Revenue
per Day (RPD) |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
7,270 |
|
|
$ |
1,953 |
|
|
$ |
9,223 |
|
|
$ |
5,457 |
|
|
$ |
1,287 |
|
|
$ |
6,744 |
|
|
Currency exchange rate
effects |
|
11 |
|
|
|
237 |
|
|
|
248 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Revenue excluding exchange rate
effects |
$ |
7,281 |
|
|
$ |
2,190 |
|
|
$ |
9,471 |
|
|
$ |
5,457 |
|
|
$ |
1,287 |
|
|
$ |
6,744 |
|
|
Rental days (000's) |
|
92,691 |
|
|
|
32,420 |
|
|
|
125,111 |
|
|
|
71,768 |
|
|
|
25,679 |
|
|
|
97,447 |
|
|
RPD excluding exchange rate
effects (in $'s) |
$ |
78.55 |
|
|
$ |
67.55 |
|
|
$ |
75.70 |
|
|
$ |
76.04 |
|
|
$ |
50.12 |
|
|
$ |
69.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization |
|
|
|
|
|
|
|
|
|
|
|
|
Rental days (000's) |
|
92,691 |
|
|
|
32,420 |
|
|
|
125,111 |
|
|
|
71,768 |
|
|
|
25,679 |
|
|
|
97,447 |
|
|
Average rental fleet |
|
483,786 |
|
|
|
172,845 |
|
|
|
656,631 |
|
|
|
369,012 |
|
|
|
138,439 |
|
|
|
507,451 |
|
|
Number of days in period |
|
273 |
|
|
|
273 |
|
|
|
273 |
|
|
|
273 |
|
|
|
273 |
|
|
|
273 |
|
|
Available rental days
(000's) |
|
132,074 |
|
|
|
47,186 |
|
|
|
179,260 |
|
|
|
100,740 |
|
|
|
37,794 |
|
|
|
138,534 |
|
|
Vehicle utilization |
|
70.2 |
% |
|
|
68.7 |
% |
|
|
69.8 |
% |
|
|
71.2 |
% |
|
|
67.9 |
% |
|
|
70.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Per-Unit
Fleet Costs |
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle depreciation and lease
charges, net |
$ |
168 |
|
|
$ |
311 |
|
|
$ |
479 |
|
|
$ |
630 |
|
|
$ |
239 |
|
|
$ |
869 |
|
|
Currency exchange rate
effects |
|
2 |
|
|
|
37 |
|
|
|
39 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
$ |
170 |
|
|
$ |
348 |
|
|
$ |
518 |
|
|
$ |
630 |
|
|
$ |
239 |
|
|
$ |
869 |
|
|
Average rental fleet |
|
483,786 |
|
|
|
172,845 |
|
|
|
656,631 |
|
|
|
369,012 |
|
|
|
138,439 |
|
|
|
507,451 |
|
|
Per-unit fleet costs (in
$'s) |
$ |
351 |
|
|
$ |
2,013 |
|
|
$ |
789 |
|
|
$ |
1,706 |
|
|
$ |
1,728 |
|
|
$ |
1,712 |
|
|
Number of months in
period |
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
Per-unit fleet costs per month
excluding exchange rate effects (in $'s) |
$ |
39 |
|
|
$ |
224 |
|
|
$ |
88 |
|
|
$ |
190 |
|
|
$ |
192 |
|
|
$ |
190 |
|
_______ |
|
|
|
Our calculation of rental days and revenue per day may not be
comparable to the calculation of similarly-titled metrics by other
companies. Currency exchange rate effects are calculated by
translating the current-year results at the prior-period average
exchange rates plus any related gains and losses on currency
hedges. |
Appendix I
Avis Budget Group,
Inc.DEFINITIONS OF NON-GAAP MEASURES AND KEY
METRICS
Adjusted EBITDA
The accompanying press release presents Adjusted
EBITDA, which represents income (loss) from continuing operations
before non-vehicle related depreciation and amortization, any
impairment charges, restructuring and other related charges, early
extinguishment of debt costs, non-vehicle related interest,
transaction-related costs, net, charges for unprecedented
personal-injury 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, other (income)
expense, net 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 $13 million and $16 million in third quarter
2022 and 2021, respectively, and totaling $36 million and $41
million in the nine months ended September 30, 2022 and 2021,
respectively.
We revised our definition of Adjusted EBITDA to
exclude other (income) expense, net. We did not revise prior years’
Adjusted EBITDA because there were no other charges similar in
nature. 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, other (income) expense,
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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