Delaware | 001-10308 | 06-0918165 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
6 Sylvan Way Parsippany, NJ | 07054 |
(Address of Principal Executive Offices) | (Zip Code) |
Exhibit No. | Description |
99.1 | Press Release dated November 2, 2015. |
AVIS BUDGET GROUP, INC. | ||
By: | /s/ David T. Calabria | |
David T. Calabria Senior Vice President and Chief Accounting Officer |
Exhibit No. | Description |
99.1 | Press Release dated November 2, 2015 |
AVIS BUDGET GROUP REPORTS RECORD THIRD QUARTER 2015 RESULTS |
• | Revenue was $2.6 billion and grew 8% in constant currency. |
• | Adjusted EBITDA increased 3% to $431 million and grew 13% in constant currency. |
• | Adjusted diluted earnings per share increased 4%, to $1.98, and GAAP diluted earnings per share were $1.77. |
• | Company repurchased $161 million of outstanding shares in the quarter. |
• | Company narrows its full-year earnings estimates and continues to expect 2015 to be a record year. |
2015 | 2014 | % change | |||||||
Revenue | $ | 1,776 | $ | 1,742 | 2 | % | |||
Adjusted EBITDA | $ | 279 | $ | 275 | 1 | % |
2015 | 2014 | % change | |||||||
Revenue | $ | 801 | $ | 800 | 0 | % | |||
Adjusted EBITDA | $ | 168 | $ | 158 | 6 | % |
• | Full-year 2015 revenue will increase approximately 1% compared to 2014. In the Company’s Americas segment, rental days are expected to increase approximately 4%, and pricing is expected to be largely unchanged in constant currency. Movements in currency exchange rates are negatively impacting revenue growth by approximately five points. |
• | Adjusted EBITDA will increase 3% to 5%, to approximately $900 million to $925 million, including an approximately $50 million negative impact from movements in currency exchange rates. |
• | Per-unit fleet costs in the Americas segment will be approximately $300 per month in 2015, a decline of 3% compared to 2014. Total Company per-unit fleet costs are expected to be $280 to $285 per month in 2015, compared to $305 in 2014, with the decrease attributable both to movements in currency exchange rates and to lower per-unit fleet costs throughout the Company’s operations. |
• | Interest expense related to corporate debt will be approximately $200 million. |
• | 2015 non-vehicle depreciation and amortization expense (excluding the amortization of intangible assets related to acquisitions) will be approximately $165 million. |
• | Adjusted pretax income will be approximately $535 million to $560 million. |
• | The Company’s effective tax rate applicable to adjusted pretax income in 2015 will be approximately 39%, reflecting the effects of a tax rate change in the United Kingdom. |
• | The Company’s diluted share count will be approximately 105 million, and its share repurchases will meaningfully exceed $300 million this year. |
Contacts | |
Media Contact: | Investor Contact: |
John Barrows | Neal Goldner |
(973) 496-7865 | (973) 496-5086 |
PR@avisbudget.com | IR@avisbudget.com |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||||||||
Income Statement and Other Items | |||||||||||||||||||||||
Net revenues | $ | 2,577 | $ | 2,542 | 1 | % | $ | 6,600 | $ | 6,598 | 0 | % | |||||||||||
Adjusted EBITDA (non-GAAP) | 431 | 417 | 3 | % | 775 | 747 | 4 | % | |||||||||||||||
Income before income taxes | 312 | 306 | 2 | % | 378 | 359 | 5 | % | |||||||||||||||
Net income | 184 | 192 | (4 | %) | 318 | 222 | 43 | % | |||||||||||||||
Earnings per share - Diluted | 1.77 | 1.74 | 2 | % | 3.00 | 2.00 | 50 | % | |||||||||||||||
Adjusted Earnings Metrics (non-GAAP) (A) | |||||||||||||||||||||||
Adjusted pretax income | 341 | 329 | 4 | % | 509 | 477 | 7 | % | |||||||||||||||
Adjusted net income | 206 | 209 | (1 | %) | 315 | 302 | 4 | % | |||||||||||||||
Adjusted earnings per share - Diluted | 1.98 | 1.91 | 4 | % | 2.97 | 2.73 | 9 | % | |||||||||||||||
As of | |||||||||||||||||||||||
September 30, 2015 | December 31, 2014 | ||||||||||||||||||||||
Balance Sheet Items | |||||||||||||||||||||||
Cash and cash equivalents | $ | 585 | $ | 624 | |||||||||||||||||||
Vehicles, net | 11,604 | 10,215 | |||||||||||||||||||||
Debt under vehicle programs | 9,996 | 8,116 | |||||||||||||||||||||
Corporate debt | 3,532 | 3,420 | |||||||||||||||||||||
Stockholders’ equity | 600 | 665 |
Segment Results | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||||||||
Net Revenues | |||||||||||||||||||||||
Americas | $ | 1,776 | $ | 1,742 | 2 | % | $ | 4,707 | $ | 4,614 | 2 | % | |||||||||||
International | 801 | 800 | 0 | % | 1,893 | 1,984 | (5 | %) | |||||||||||||||
Corporate and Other | — | — | * | — | — | * | |||||||||||||||||
Total Company | $ | 2,577 | $ | 2,542 | 1 | % | $ | 6,600 | $ | 6,598 | 0 | % | |||||||||||
Adjusted EBITDA (B) | |||||||||||||||||||||||
Americas | $ | 279 | $ | 275 | 1 | % | $ | 572 | $ | 562 | 2 | % | |||||||||||
International | 168 | 158 | 6 | % | 245 | 227 | 8 | % | |||||||||||||||
Corporate and Other | (16 | ) | (16 | ) | * | (42 | ) | (42 | ) | * | |||||||||||||
Total Company | $ | 431 | $ | 417 | 3 | % | $ | 775 | $ | 747 | 4 | % | |||||||||||
Reconciliation of Adjusted EBITDA to Income before income taxes | |||||||||||||||||||||||
Total Company Adjusted EBITDA | $ | 431 | $ | 417 | $ | 775 | $ | 747 | |||||||||||||||
Less: | Non-vehicle related depreciation and amortization | 56 | 46 | 161 | 132 | ||||||||||||||||||
Interest expense related to corporate debt, net: | |||||||||||||||||||||||
Interest expense | 49 | 50 | 146 | 161 | |||||||||||||||||||
Early extinguishment of debt | — | — | 23 | 56 | |||||||||||||||||||
Transaction-related costs | 8 | 7 | 57 | 23 | |||||||||||||||||||
Restructuring expense | 6 | 8 | 10 | 16 | |||||||||||||||||||
Income before income taxes | $ | 312 | $ | 306 | 2 | % | $ | 378 | $ | 359 | 5 | % |
_______ | ||||
* | Not meaningful. | |||
(A) | In the three and nine months ended September 30, 2015, our adjusted results exclude certain items in our operating results of $29 million and $131 million ($22 million and $95 million, net of tax), respectively, and a $98 million income tax benefit related to the resolution of a prior-year tax matter for the nine months ended September 30, 2015. For the three months ended September 30, 2015, these items consisted of $15 million ($10 million, net of tax) for amortization expense related to intangible assets recognized in connection with acquisitions, $8 million ($7 million, net of tax) for acquisition- and integration-related expenses and $6 million ($5 million, net of tax) in restructuring expense. For the nine months ended September 30, 2015, these items consisted of $57 million ($46 million, net of tax) for transaction-related costs driven by a non-cash charge recognized in connection with the acquisition of the Avis and Budget license rights for Norway, Sweden and Denmark, costs associated with the acquisition of the remaining 50% equity interest in our Brazilian licensee and other acquisition- and integration-related expenses, $41 million ($27 million, net of tax) for amortization expense related to intangible assets recognized in connection with acquisitions, $23 million ($14 million, net of tax) for early extinguishment of corporate debt and $10 million ($8 million, net of tax) in restructuring expense. In the three and nine months ended September 30, 2014, our adjusted results exclude certain items in our operating results of $23 million and $118 million ($17 million and $80 million, net of tax), respectively. For the three months ended September 30, 2014, these items consisted of $8 million ($6 million, net of tax) in restructuring expense, $8 million ($5 million, net of tax) for amortization expense related to intangible assets recognized in connection with acquisitions and $7 million ($6 million, net of tax) for acquisition- and integration-related expenses. For the nine months ended September 30, 2014, these items consisted of $56 million ($34 million, net of tax) for early extinguishment of corporate debt, $23 million ($15 million, net of tax) for amortization expense related to intangible assets recognized in connection with acquisitions, $23 million ($20 million, net of tax) for acquisition- and integration-related expenses and $16 million ($11 million, net of tax) in restructuring expense. | |||
(B) | See Table 5 for a description of Adjusted EBITDA. Adjusted EBITDA includes stock-based compensation expense and deferred financing fee amortization of $13 million and $13 million in third quarter 2015 and 2014, respectively, and $42 million and $37 million in the nine months ended September 30, 2015 and 2014, respectively. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenues | ||||||||||||||||
Vehicle rental | $ | 1,832 | $ | 1,810 | $ | 4,684 | $ | 4,692 | ||||||||
Other | 745 | 732 | 1,916 | 1,906 | ||||||||||||
Net revenues | 2,577 | 2,542 | 6,600 | 6,598 | ||||||||||||
Expenses | ||||||||||||||||
Operating | 1,202 | 1,168 | 3,279 | 3,273 | ||||||||||||
Vehicle depreciation and lease charges, net | 555 | 582 | 1,485 | 1,532 | ||||||||||||
Selling, general and administrative | 314 | 298 | 843 | 833 | ||||||||||||
Vehicle interest, net | 75 | 77 | 218 | 213 | ||||||||||||
Non-vehicle related depreciation and amortization | 56 | 46 | 161 | 132 | ||||||||||||
Interest expense related to corporate debt, net: | ||||||||||||||||
Interest expense | 49 | 50 | 146 | 161 | ||||||||||||
Early extinguishment of debt | — | — | 23 | 56 | ||||||||||||
Transaction-related costs | 8 | 7 | 57 | 23 | ||||||||||||
Restructuring expense | 6 | 8 | 10 | 16 | ||||||||||||
Total expenses | 2,265 | 2,236 | 6,222 | 6,239 | ||||||||||||
Income before income taxes | 312 | 306 | 378 | 359 | ||||||||||||
Provision for income taxes | 128 | 114 | 60 | 137 | ||||||||||||
Net income | $ | 184 | $ | 192 | $ | 318 | $ | 222 | ||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 1.80 | $ | 1.84 | $ | 3.04 | $ | 2.11 | ||||||||
Diluted | $ | 1.77 | $ | 1.74 | $ | 3.00 | $ | 2.00 | ||||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 102.7 | 103.9 | 104.7 | 105.2 | ||||||||||||
Diluted | 104.0 | 109.9 | 106.1 | 111.2 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||||||||
Americas | ||||||||||||||||||||||||
Rental Days (000’s) | 28,238 | 27,214 | 4 | % | 76,502 | 73,667 | 4 | % | ||||||||||||||||
Time and Mileage Revenue per Day (A) | $ | 42.12 | $ | 42.99 | (2 | %) | $ | 41.14 | $ | 41.79 | (2 | %) | ||||||||||||
Average Rental Fleet | 419,245 | 416,029 | 1 | % | 393,352 | 381,411 | 3 | % | ||||||||||||||||
International (B) | ||||||||||||||||||||||||
Rental Days (000’s) | 14,144 | 11,456 | 23 | % | 32,873 | 28,172 | 17 | % | ||||||||||||||||
Time and Mileage Revenue per Day (C) | $ | 34.21 | $ | 42.28 | (19 | %) | $ | 34.14 | $ | 42.43 | (20 | %) | ||||||||||||
Average Rental Fleet | 203,485 | 167,332 | 22 | % | 166,088 | 143,928 | 15 | % | ||||||||||||||||
Total | ||||||||||||||||||||||||
Rental Days (000’s) | 42,382 | 38,670 | 10 | % | 109,375 | 101,839 | 7 | % | ||||||||||||||||
Time and Mileage Revenue per Day | $ | 39.48 | $ | 42.78 | (8 | %) | $ | 39.03 | $ | 41.97 | (7 | %) | ||||||||||||
Average Rental Fleet | 622,730 | 583,361 | 7 | % | 559,440 | 525,339 | 6 | % | ||||||||||||||||
_______ | ||||||||||||||||||||||||
Rental days and time and mileage revenue per day are calculated based on the actual rental of the vehicle during a 24-hour period. Our calculation of rental days and time and mileage revenue per day may not be comparable to the calculation of similarly-titled statistics by other companies. Amounts exclude U.S. truck rental and Zipcar transactions. | ||||||||||||||||||||||||
(A) | Excluding currency exchange effects, time and mileage revenue per day remained unchanged and decreased 1 percentage point in the three and nine months ended September 30, 2015, respectively. | |||||||||||||||||||||||
(B) | Excluding the April 2015 acquisition of Maggiore, the results for International would have been as follows: | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||||||||
International (excluding Maggiore) | ||||||||||||||||||||||||
Rental Days (000’s) | 12,816 | 11,456 | 12 | % | 30,669 | 28,172 | 9 | % | ||||||||||||||||
Time and Mileage Revenue per Day * | $ | 34.88 | $ | 42.28 | (18 | %) | $ | 34.60 | $ | 42.43 | (18 | %) | ||||||||||||
Average Rental Fleet | 184,684 | 167,332 | 10 | % | 154,755 | 143,928 | 8 | % | ||||||||||||||||
*Excluding currency exchange effects, time and mileage revenue per day decreased 1 and 3 percentage points in the three and nine months ended September 30, 2015, respectively. | ||||||||||||||||||||||||
(C) | Excluding currency exchange effects, time and mileage revenue per day decreased 3 and 4 percentage points in the three and nine months ended September 30, 2015, respectively. |
Nine Months Ended September 30, 2015 | |||||
Operating Activities | |||||
Net cash provided by operating activities | $ | 2,038 | |||
Investing Activities | |||||
Net cash used in investing activities exclusive of vehicle programs | (340 | ) | |||
Net cash used in investing activities of vehicle programs | (3,077 | ) | |||
Net cash used in investing activities | (3,417 | ) | |||
Financing Activities | |||||
Net cash used in financing activities exclusive of vehicle programs | (213 | ) | |||
Net cash provided by financing activities of vehicle programs | 1,582 | ||||
Net cash provided by financing activities | 1,369 | ||||
Effect of changes in exchange rates on cash and cash equivalents | (29 | ) | |||
Net change in cash and cash equivalents | (39 | ) | |||
Cash and cash equivalents, beginning of period | 624 | ||||
Cash and cash equivalents, end of period | $ | 585 |
Nine Months Ended September 30, 2015 | |||||
Income before income taxes | $ | 378 | |||
Add-back of non-vehicle related depreciation and amortization | 161 | ||||
Add-back of debt extinguishment costs | 23 | ||||
Add-back of transaction-related costs | 57 | ||||
Working capital and other | (64 | ) | |||
Capital expenditures | (128 | ) | |||
Tax payments, net of refunds | (17 | ) | |||
Vehicle programs and related (B) | 46 | ||||
Free Cash Flow | 456 | ||||
Acquisition and related payments, net of acquired cash (C) | (271 | ) | |||
Borrowings, net of debt repayments | 93 | ||||
Transaction-related payments | (16 | ) | |||
Repurchases of common stock | (270 | ) | |||
Financing costs, foreign exchange effects and other | (31 | ) | |||
Net change in cash and cash equivalents (per above) | $ | (39 | ) |
_______ | |
(A) | See Table 5 for a description of Free Cash Flow. |
(B) | Includes vehicle-backed borrowings (repayments) that are incremental to amounts required to fund incremental (reduced) vehicle and vehicle-related assets. |
(C) | Primarily related to acquisitions of Maggiore Group, our licensee in Scandinavia, and the remaining 50% interest in our licensee in Brazil. |
Nine Months Ended September 30, 2015 | |||||
Free Cash Flow (per above) | $ | 456 | |||
Investing activities of vehicle programs | 3,077 | ||||
Financing activities of vehicle programs | (1,582 | ) | |||
Capital expenditures | 128 | ||||
Proceeds received on asset sales | (8 | ) | |||
Change in restricted cash | — | ||||
Acquisition-related payments | (17 | ) | |||
Transaction-related payments | (16 | ) | |||
Net Cash Provided by Operating Activities (per above) | $ | 2,038 |
Three Months Ended September 30, | |||||||||
Reconciliation of Adjusted EBITDA to income before income taxes: | 2015 | 2014 | |||||||
Adjusted EBITDA | $ | 431 | $ | 417 | |||||
Less: | Non-vehicle related depreciation and amortization (excluding acquisition-related amortization expense) | 41 | 38 | ||||||
Interest expense related to corporate debt, net (excluding early extinguishment of debt) | 49 | 50 | |||||||
Adjusted pretax income | 341 | 329 | |||||||
Less certain items: | |||||||||
Transaction-related costs | 8 | 7 | |||||||
Acquisition-related amortization expense | 15 | 8 | |||||||
Restructuring expense | 6 | 8 | |||||||
Income before income taxes | $ | 312 | $ | 306 | |||||
Reconciliation of adjusted net income to net income: | |||||||||
Adjusted net income | $ | 206 | $ | 209 | |||||
Less certain items, net of tax: | |||||||||
Transaction-related costs | 7 | 6 | |||||||
Acquisition-related amortization expense | 10 | 5 | |||||||
Restructuring expense | 5 | 6 | |||||||
Net income | $ | 184 | $ | 192 | |||||
Adjusted diluted earnings per share | $ | 1.98 | $ | 1.91 | |||||
Earnings per share - Diluted | $ | 1.77 | $ | 1.74 | |||||
Shares used to calculate adjusted diluted earnings per share | 104.0 | 109.9 |
Nine Months Ended September 30, | |||||||||
Reconciliation of Adjusted EBITDA to income before income taxes: | 2015 | 2014 | |||||||
Adjusted EBITDA | $ | 775 | $ | 747 | |||||
Less: | Non-vehicle related depreciation and amortization (excluding acquisition-related amortization expense) | 120 | 109 | ||||||
Interest expense related to corporate debt, net (excluding early extinguishment of debt) | 146 | 161 | |||||||
Adjusted pretax income | 509 | 477 | |||||||
Less certain items: | |||||||||
Early extinguishment of debt | 23 | 56 | |||||||
Transaction-related costs | 57 | 23 | |||||||
Acquisition-related amortization expense | 41 | 23 | |||||||
Restructuring expense | 10 | 16 | |||||||
Income before income taxes | $ | 378 | $ | 359 | |||||
Reconciliation of adjusted net income to net income: | |||||||||
Adjusted net income | $ | 315 | $ | 302 | |||||
Less certain items, net of tax: | |||||||||
Early extinguishment of debt | 14 | 34 | |||||||
Transaction-related costs | 46 | 20 | |||||||
Acquisition-related amortization expense | 27 | 15 | |||||||
Restructuring expense | 8 | 11 | |||||||
Resolution of a prior-year income tax matter | (98 | ) | — | ||||||
Net income | $ | 318 | $ | 222 | |||||
Adjusted diluted earnings per share | $ | 2.97 | $ | 2.73 | |||||
Earnings per share - Diluted | $ | 3.00 | $ | 2.00 | |||||
Shares used to calculate adjusted diluted earnings per share | 106.1 | 111.2 |
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