Business News

Avis Budget Group Reports Record First Quarter Results

PARSIPPANY, N.J., May 2, 2022 – Avis Budget Group, Inc. (NASDAQ: CAR) today announced  financial results for first quarter 2022.  

We ended the quarter with revenues 77% above the first quarter 2021, at $2.4 billion. Our  revenues were driven by rental days as demand improved throughout the quarter and  increased revenue per day.  

Net income was $527 million and our Adjusted EBITDA was $810 million, our best first quarter  Adjusted EBITDA in our history. Utilization for the quarter was 67.4% and in-line with first  quarter 2021, showing our fleet is well positioned to meet seasonal peak demand. 

Our liquidity position at the end of the quarter was approximately $900 million, with an  additional $1.7 billion of fleet funding capacity. We have well-laddered corporate debt and no  meaningful maturities until 2024. 

“Despite the impact of Omicron on the first half of the quarter, our team was able to quickly  pivot to manage the significantly increasing demand during the back half of the quarter,” said  Joe Ferraro, Avis Budget Group Chief Executive Officer. “We focused on diligent fleet  management and continued cost optimization to generate a new record first quarter Adjusted  EBITDA. I want to thank all the employees for their continued tireless efforts in helping us  achieve this milestone.”

Q1 and April Highlights 
• Total Company revenues increased by 77% and 27% compared to first quarter 2021 and  2019, respectively.  
• Adjusted EBITDA in the Americas was $810 million for the first quarter 2022 driven by  strong pricing and volume as demand increased throughout the quarter. Utilization for  the quarter was 68.9% and in-line with first quarter 2019. 
Adjusted EBITDA in International was $23 million for the first quarter 2022 driven by  pricing and volume along with strong cost optimization, the best first quarter Adjusted  EBITDA in International’s history. 
• Our Board of Directors approved a $1.0 billion and $2.0 billion increase to our existing  share repurchase authorization in March and May, respectively, bringing our available  authorization under the stock repurchase program to $2.3 billion.

Investor Conference Call 
We will host a conference call to discuss our first quarter results on May 3, 2022, at 8:30 a.m.  (ET). Investors may access the call at or by dialing (877) 407-2991 and  a replay will available on our website and at (877) 660-6853 using conference code 13728961. 

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 

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 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 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 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. 

David Calabria

Appendix I 

Avis Budget Group, Inc. 

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 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 $12 million and $9 million in first quarter 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 Measures 
The 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 Flow 
Represents 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 Margin 
Represents Adjusted EBITDA as a percentage of revenues. 

Available Rental Days 
Defined as Average Rental Fleet times the numbers of days in a given period. 

Average Rental Fleet 
Represents the average number of vehicles in our fleet during a given period of time. 

Currency Exchange Rate Effects 
Represents 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 Debt 
Represents corporate debt minus cash and cash equivalents. 

Net Corporate Leverage 
Represents Net Corporate Debt divided by Adjusted EBITDA for the twelve months prior to the date of calculation. 

Per-Unit Fleet Costs 
Represents vehicle depreciation, lease charges and gain or loss on vehicles sales, divided by Average Rental Fleet. 

Rental Days 
Represents the total number of days (or portion thereof) a vehicle was rented during a 24-hour period.  

Revenue per Day 
Represents revenues divided by Rental Days. 

Vehicle Utilization 
Represents Rental Days divided by Available Rental Days.