PARSIPPANY, N.J., Feb. 21, 2018 (GLOBE NEWSWIRE) — Avis Budget Group, Inc. (NASDAQ:CAR) today reported results for its fourth quarter and year ended December 31, 2017.
Revenue increased 7% in the fourth quarter to $2.0 billion and was $8.8 billion for the full year
Net income of $220 million, including a one-time benefit of $213 million related to U.S. tax reform, and diluted earnings per share of $2.65 in the quarter
Full-year net income of $361 million and diluted earnings per share of $4.25, including the one-time benefit related to U.S. tax reform
Adjusted EBITDA increased 16% to $140 million and Adjusted diluted earnings per share increased to $0.45 in the quarter
Full year Adjusted EBITDA of $735 million and Adjusted diluted earnings per share of $2.85
Company provides 2018 revenues, Adjusted earnings and Adjusted free cash flow projections
“Our fourth quarter results reflect the achievement of strong global volume growth, positive pricing in the Americas and the benefits from our relentless focus on costs,” said Larry De Shon, Avis Budget Group President and Chief Executive Officer. “Looking forward, I believe we have substantial opportunities to leverage technology to both improve our customers’ experience and drive efficiencies throughout our organization, and will continue to position ourselves to benefit from the evolving mobility landscape.”
Revenue growth of 7% in the fourth quarter led to a $140 million improvement compared to the prior year. This growth was driven by a 7% increase in overall rental days and higher year-over-year local currency time and mileage revenue per day. Net income improved to $220 million, or $2.65 per diluted share, Adjusted EBITDA increased 16% to $140 million in the quarter and Adjusted net income increased to $38 million, or $0.45 per diluted share.
Revenue growth of 2% for the full year to $8.8 billion was driven by a 5% increase in rental days partially offset by a 2% reduction in local currency time and mileage revenue per day and lower ancillary revenue per day. Americas per-unit fleet costs increased 6% year-over-year in 2017, but were largely unchanged in the fourth quarter as used car values normalized. Net income was $361 million, or $4.25 per diluted share. Full-year Adjusted EBITDA was $735 million and Adjusted net income was $242 million, or $2.85 per diluted share.
Business Segment Discussion
Americas
$ millions * 2017 2016 % change
Revenues 1,382 1,343 3%
Adjusted EBITDA 107 101 6%
Per-unit fleet costs 309 308 0%
- Excluding per-unit fleet costs
Revenue growth in the quarter resulted from a 3% increase in volume and a more than 2% increase in local currency time and mileage revenue per day, partially offset by 2% lower ancillary revenue per day. This revenue growth, as well as strong cost management resulted in a 6% increase in Adjusted EBITDA to $107 million in the quarter.
International
$ millions * 2017 2016 % change
Revenues 637 536 19%
Adjusted EBITDA 45 36 25%
Per-unit fleet costs 239 236 1%
- Excluding per-unit fleet costs
Revenue grew 19% in the quarter, or 12% in local currency, driven by a 15% increase in rental days, including an 8% benefit from the acquisition of FranceCars. This strong revenue growth, together with our cost-cutting initiatives and a $4 million benefit from currency resulted in a 25% increase in Adjusted EBITDA to $45 million.
Balance Sheet
The Company’s corporate debt was approximately $3.6 billion at the end of 2017 and cash and cash equivalents totaled $611 million, compared to $3.5 billion of corporate debt at year end 2016 and cash and cash equivalents of $490 million.
Other Items
U.S. Tax Reform – The Company reported a net tax benefit of $213 million in the fourth quarter of 2017 to reflect the impact of tax reform in the U.S. This estimated net benefit is the result of a $317 million revaluation of net deferred tax liabilities from the reduction in the U.S. federal corporate tax rate, partially offset by a $104 million one-time tax charge on cumulative foreign earnings. The Company has accounted for the estimate of these items based on the best available information to date and expects to finalize its accounting within a subsequent measurement period during 2018. The Company expects the reduction of the U.S. federal corporate tax rate to result in an effective tax rate of 25% to 27% in 2018.
Revolving Credit Facility and Term Loan – During February 2018, the Company extended the term of its $1.8 billion senior revolving credit facility for an additional two years to 2023 and extended the maturity of its $1.1 billion term loan for an additional three years to 2025, with no change to the rate of interest charged. The financial covenant contained in the Company’s overall senior credit facility was changed to a consolidated first lien leverage ratio not to exceed 2.5 times consolidated Adjusted EBITDA, as defined in the agreement
Share Repurchases – The Company repurchased approximately 1.9 million shares of its common shares in the fourth quarter, or 2% of its shares outstanding, at a cost of $73 million, bringing the full-year share repurchases to 6.1 million shares at a cost of $200 million. Weighted average diluted shares outstanding (as used to calculate Adjusted diluted earnings per share) were 82.7 million in the fourth quarter compared to 88.9 million the prior year, a 7% year-over-year reduction.
Outlook
Our full-year 2018 outlook includes non-GAAP financial measures and excludes the impact from future changes in currency exchange rates. The Company believes that it is impracticable to provide a reconciliation to the most comparable GAAP measures due to the forward-looking nature of these forecasted Adjusted earnings metrics and the degree of uncertainty associated with forecasting the reconciling items and amounts. The Company further believes that providing estimates of the amounts that would be required to reconcile the forecasted adjusted measures to forecasted GAAP measures would imply a degree of precision that would be confusing or misleading to investors. The after-tax effect of reconciling items could be significant to the Company’s future quarterly or annual results.
The Company today provides its estimated full-year 2018 results as follows: