Form 10-Q |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Avis Budget Group, Inc. |
(Exact name of registrant as specified in its charter) |
Delaware | 06-0918165 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
6 Sylvan Way Parsippany, NJ | 07054 | |
(Address of principal executive offices) | (Zip Code) | |
(973) 496-4700 (Registrant’s telephone number, including area code) |
Large accelerated filer | x | Accelerated filer | o | Non-accelerated filer | o |
Smaller reporting company | o | Emerging growth company | o |
Page | ||
PART I | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
• | the high level of competition in the vehicle rental industry and the impact such competition may have on pricing and rental volume; |
• | a change in travel demand, including changes or disruptions in airline passenger traffic; |
• | a change in our fleet costs as a result of a change in the cost of new vehicles, manufacturer recalls, disruption in the supply of new vehicles, and/or a change in the price at which we dispose of used vehicles either in the used vehicle market or under repurchase or guaranteed depreciation programs; |
• | the results of operations or financial condition of the manufacturers of our cars, which could impact their ability to perform their payment obligations under our agreements with them, including repurchase and/or guaranteed depreciation arrangements, and/or their willingness or ability to make cars available to us or the rental car industry as a whole on commercially reasonable terms or at all; |
• | any change in economic conditions generally, particularly during our peak season or in key market segments; |
• | our ability to continue to successfully implement our business strategies, achieve and maintain cost savings and adapt our business to changes in mobility; |
• | our ability to obtain financing for our global operations, including the funding of our vehicle fleet through the issuance of asset-backed securities and use of the global lending markets; |
• | an occurrence or threat of terrorism, pandemic disease, natural disasters, military conflict, civil unrest or political instability in the locations in which we operate; |
• | our ability to conform to multiple and conflicting laws or regulations in the countries in which we operate; |
• | our dependence on third-party distribution channels, third-party suppliers of other services and co-marketing arrangements with third parties; |
• | our dependence on the performance and retention of our senior management and key employees; |
• | our ability to utilize derivative instruments, and the impact of derivative instruments we utilize, which can be affected by fluctuations in interest rates, gasoline prices and exchange rates, changes in government regulations and other factors; |
• | our ability to accurately estimate our future results; |
• | any major disruptions in our communication networks or information systems; |
• | our exposure to uninsured or unpaid claims in excess of historical levels; |
• | risks associated with litigation, governmental or regulatory inquiries, or any failure or inability to comply with laws, regulations or contractual obligations or any changes in laws, regulations or contractual obligations, including with respect to personal identifiable information and consumer privacy, labor and employment, and tax; |
• | any impact on us from the actions of our licensees, dealers, third party vendors and independent contractors; |
• | any substantial changes in the cost or supply of fuel, vehicle parts, energy, labor or other resources on which we depend to operate our business; |
• | risks related to our indebtedness, including our substantial outstanding debt obligations and our ability to incur substantially more debt; |
• | our ability to meet the financial and other covenants contained in the agreements governing our indebtedness; |
• | risks related to tax obligations and the effect of future changes in tax laws and accounting standards; |
• | risks related to completed or future acquisitions or investments that we may pursue, including the incurrence of incremental indebtedness to help fund such transactions and our ability to promptly and effectively integrate any acquired businesses or capitalize on joint ventures, partnerships and other investments; |
• | risks related to protecting the integrity of, and preventing unauthorized access to, our information technology systems or those of our third party vendors, and protecting the confidential information of our employees and customers against security breaches, including physical or cyber-security breaches, attacks, or other disruptions; and |
• | other business, economic, competitive, governmental, regulatory, political or technological factors affecting our operations, pricing or services. |
Item 1. | Financial Statements |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Revenues | $ | 2,328 | $ | 2,238 | $ | 4,296 | $ | 4,077 | |||||||||
Expenses | |||||||||||||||||
Operating | 1,175 | 1,108 | 2,267 | 2,157 | |||||||||||||
Vehicle depreciation and lease charges, net | 591 | 597 | 1,106 | 1,101 | |||||||||||||
Selling, general and administrative | 321 | 293 | 617 | 555 | |||||||||||||
Vehicle interest, net | 80 | 73 | 152 | 137 | |||||||||||||
Non-vehicle related depreciation and amortization | 67 | 65 | 128 | 128 | |||||||||||||
Interest expense related to corporate debt, net: | |||||||||||||||||
Interest expense | 49 | 48 | 95 | 97 | |||||||||||||
Early extinguishment of debt | — | — | 5 | 3 | |||||||||||||
Restructuring and other related charges | 4 | 38 | 10 | 45 | |||||||||||||
Transaction-related costs, net | 3 | 5 | 7 | 8 | |||||||||||||
Total expenses | 2,290 | 2,227 | 4,387 | 4,231 | |||||||||||||
Income (loss) before income taxes | 38 | 11 | (91 | ) | (154 | ) | |||||||||||
Provision for (benefit from) income taxes | 12 | 8 | (30 | ) | (50 | ) | |||||||||||
Net income (loss) | $ | 26 | $ | 3 | $ | (61 | ) | $ | (104 | ) | |||||||
Comprehensive income (loss) | $ | (24 | ) | $ | 51 | $ | (103 | ) | $ | (28 | ) | ||||||
Earnings (loss) per share | |||||||||||||||||
Basic | $ | 0.33 | $ | 0.04 | $ | (0.75 | ) | $ | (1.22 | ) | |||||||
Diluted | $ | 0.32 | $ | 0.04 | $ | (0.75 | ) | $ | (1.22 | ) |
June 30, 2018 | December 31, 2017 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 489 | $ | 611 | ||||
Receivables, net | 902 | 922 | ||||||
Other current assets | 832 | 533 | ||||||
Total current assets | 2,223 | 2,066 | ||||||
Property and equipment, net | 715 | 704 | ||||||
Deferred income taxes | 1,120 | 931 | ||||||
Goodwill | 1,049 | 1,073 | ||||||
Other intangibles, net | 843 | 850 | ||||||
Other non-current assets | 243 | 196 | ||||||
Total assets exclusive of assets under vehicle programs | 6,193 | 5,820 | ||||||
Assets under vehicle programs: | ||||||||
Program cash | 161 | 283 | ||||||
Vehicles, net | 13,867 | 10,626 | ||||||
Receivables from vehicle manufacturers and other | 253 | 547 | ||||||
Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party | 445 | 423 | ||||||
14,726 | 11,879 | |||||||
Total assets | $ | 20,919 | $ | 17,699 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and other current liabilities | $ | 1,832 | $ | 1,619 | ||||
Short-term debt and current portion of long-term debt | 24 | 26 | ||||||
Total current liabilities | 1,856 | 1,645 | ||||||
Long-term debt | 3,544 | 3,573 | ||||||
Other non-current liabilities | 745 | 717 | ||||||
Total liabilities exclusive of liabilities under vehicle programs | 6,145 | 5,935 | ||||||
Liabilities under vehicle programs: | ||||||||
Debt | 3,511 | 2,741 | ||||||
Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party | 8,265 | 6,480 | ||||||
Deferred income taxes | 1,727 | 1,594 | ||||||
Other | 899 | 376 | ||||||
14,402 | 11,191 | |||||||
Commitments and contingencies (Note 13) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.01 par value—authorized 10 shares; none issued and outstanding, at each date | — | — | ||||||
Common stock, $0.01 par value—authorized 250 shares; issued 137 shares, at each date | 1 | 1 | ||||||
Additional paid-in capital | 6,779 | 6,820 | ||||||
Accumulated deficit | (1,316 | ) | (1,222 | ) | ||||
Accumulated other comprehensive loss | (72 | ) | (24 | ) | ||||
Treasury stock, at cost—57 and 56 shares, respectively | (5,020 | ) | (5,002 | ) | ||||
Total stockholders’ equity | 372 | 573 | ||||||
Total liabilities and stockholders’ equity | $ | 20,919 | $ | 17,699 |
Six Months Ended June 30, | |||||||||
2018 | 2017 | ||||||||
Operating activities | |||||||||
Net loss | $ | (61 | ) | $ | (104 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||
Vehicle depreciation | 996 | 953 | |||||||
(Gain) loss on sale of vehicles, net | (10 | ) | 51 | ||||||
Non-vehicle related depreciation and amortization | 128 | 128 | |||||||
Stock-based compensation | 12 | 7 | |||||||
Amortization of debt financing fees | 13 | 17 | |||||||
Early extinguishment of debt costs | 5 | 3 | |||||||
Net change in assets and liabilities: | |||||||||
Receivables | (68 | ) | (36 | ) | |||||
Income taxes and deferred income taxes | (49 | ) | (91 | ) | |||||
Accounts payable and other current liabilities | 141 | 112 | |||||||
Other, net | 14 | 99 | |||||||
Net cash provided by operating activities | 1,121 | 1,139 | |||||||
Investing activities | |||||||||
Property and equipment additions | (115 | ) | (86 | ) | |||||
Proceeds received on asset sales | 6 | 4 | |||||||
Net assets acquired (net of cash acquired) | (28 | ) | (14 | ) | |||||
Other, net | (37 | ) | — | ||||||
Net cash used in investing activities exclusive of vehicle programs | (174 | ) | (96 | ) | |||||
Vehicle programs: | |||||||||
Investment in vehicles | (8,359 | ) | (8,116 | ) | |||||
Proceeds received on disposition of vehicles | 4,807 | 5,059 | |||||||
Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party | (22 | ) | (33 | ) | |||||
(3,574 | ) | (3,090 | ) | ||||||
Net cash used in investing activities | (3,748 | ) | (3,186 | ) |
Avis Budget Group, Inc. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Continued) (In millions) (Unaudited) | ||||||||
Six Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
Financing activities | ||||||||
Proceeds from long-term borrowings | 81 | 589 | ||||||
Payments on long-term borrowings | (94 | ) | (591 | ) | ||||
Net change in short-term borrowings | (2 | ) | (1 | ) | ||||
Repurchases of common stock | (78 | ) | (109 | ) | ||||
Debt financing fees | (9 | ) | (8 | ) | ||||
Other, net | 2 | — | ||||||
Net cash used in financing activities exclusive of vehicle programs | (100 | ) | (120 | ) | ||||
Vehicle programs: | ||||||||
Proceeds from borrowings | 10,145 | 11,255 | ||||||
Payments on borrowings | (7,643 | ) | (8,988 | ) | ||||
Debt financing fees | (13 | ) | (8 | ) | ||||
2,489 | 2,259 | |||||||
Net cash provided by financing activities | 2,389 | 2,139 | ||||||
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash | (2 | ) | 36 | |||||
Net (decrease) increase in cash and cash equivalents, program and restricted cash | (240 | ) | 128 | |||||
Cash and cash equivalents, program and restricted cash, beginning of period | 901 | 720 | ||||||
Cash and cash equivalents, program and restricted cash, end of period | $ | 661 | $ | 848 |
1. | Basis of Presentation |
• | Americas—consisting primarily of (i) vehicle rental operations in North America, South America, Central America and the Caribbean, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which the Company does not operate directly. |
• | International—consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which the Company does not operate directly. |
Six Months Ended June 30, 2017 | |||||||||||
As Previously Reported | Effect of Change | As Adjusted | |||||||||
Decrease in program cash | $ | 168 | $ | (168 | ) | $ | — | ||||
Other, net | (1 | ) | 1 | — | |||||||
Net cash used in investing activities | (3,019 | ) | (167 | ) | (3,186 | ) | |||||
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash | 27 | 9 | 36 | ||||||||
Net increase in cash and cash equivalents, program and restricted cash | 286 | (158 | ) | 128 | |||||||
Cash and cash equivalents, program and restricted cash, beginning of period | 490 | 230 | 720 | ||||||||
Cash and cash equivalents, program and restricted cash, end of period | $ | 776 | $ | 72 | $ | 848 |
As of June 30, | |||||||
2018 | 2017 | ||||||
Cash and cash equivalents | $ | 489 | $ | 776 | |||
Program cash | 161 | 65 | |||||
Restricted cash (a) | 11 | 7 | |||||
Total cash and cash equivalents, program and restricted cash | $ | 661 | $ | 848 |
(a) | Included within other current assets. |
Currency Translation Adjustments | Net Unrealized Gains (Losses) on Cash Flow Hedges | Net Unrealized Gains (Losses) on Available-for Sale Securities | Minimum Pension Liability Adjustment | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||
$ | 7 | $ | 1 | $ | — | $ | (12 | ) | $ | (4 | ) |
Six Months Ended June 30, 2018 | |||||||||||
As Reported | Balances without Adoption of Topic 606 | Effect of Change | |||||||||
Consolidated Condensed Statement of Comprehensive Income | |||||||||||
Revenues | $ | 4,296 | $ | 4,303 | $ | (7 | ) | ||||
Expenses | |||||||||||
Operating | 2,267 | 2,268 | (1 | ) | |||||||
Total expenses | 4,387 | 4,388 | (1 | ) | |||||||
Loss before income taxes | (91 | ) | (85 | ) | (6 | ) | |||||
Benefit from income taxes | (30 | ) | (28 | ) | (2 | ) | |||||
Net loss | $ | (61 | ) | $ | (57 | ) | $ | (4 | ) | ||
Comprehensive loss | $ | (103 | ) | $ | (99 | ) | $ | (4 | ) | ||
June 30, 2018 | |||||||||||
As Reported | Balances without Adoption of Topic 606 | Effect of Change | |||||||||
Consolidated Condensed Balance Sheet | |||||||||||
Deferred income taxes | $ | 1,120 | $ | 1,108 | $ | 12 | |||||
Total assets exclusive of assets under vehicle programs | 6,193 | 6,181 | 12 | ||||||||
Total assets | 20,919 | 20,907 | 12 | ||||||||
Accounts payable and other current liabilities | 1,832 | 1,826 | 6 | ||||||||
Total current liabilities | 1,856 | 1,850 | 6 | ||||||||
Other non-current liabilities | 745 | 695 | 50 | ||||||||
Total liabilities exclusive of liabilities under vehicle programs | 6,145 | 6,095 | 50 | ||||||||
Accumulated deficit | (1,316 | ) | (1,272 | ) | (44 | ) | |||||
Total stockholders’ equity | $ | 372 | $ | 416 | $ | (44 | ) |
2. | Revenues |
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | |||||||
Americas | $ | 1,590 | $ | 2,938 | ||||
Europe, Middle East and Africa | 600 | 1,047 | ||||||
Asia and Australasia | 138 | 311 | ||||||
Total revenues | $ | 2,328 | $ | 4,296 |
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | |||||||
Avis | $ | 1,351 | $ | 2,496 | ||||
Budget | 777 | 1,419 | ||||||
Other | 200 | 381 | ||||||
Total revenues | $ | 2,328 | $ | 4,296 |
Balance at January 1, 2018 | Revenue deferred | Revenue recognized | Balance at June 30, 2018 | ||||||||||||
Prepaid rentals(a) | $ | 101 | $ | 891 | $ | 782 | $ | 210 | |||||||
Other deferred revenue(b) | 93 | 108 | 108 | 93 | |||||||||||
Total deferred revenue | $ | 194 | $ | 999 | $ | 890 | $ | 303 |
(a) | At June 30, 2018, included in accounts payable and other current liabilities. |
(b) | At June 30, 2018, $37 million included in accounts payable and other current liabilities and $56 million in other non-current liabilities. Non-current amounts are expected to be recognized as revenue within two to three years. |
3. | Restructuring and Other Related Charges |
Americas | International | Total | ||||||||||
Balance as of January 1, 2018 | $ | 1 | $ | 3 | $ | 4 | ||||||
Restructuring expense: | ||||||||||||
Workforce planning | 2 | 5 | 7 | |||||||||
Truck initiative | 2 | — | 2 | |||||||||
Restructuring payment/utilization: | ||||||||||||
Workforce planning | (2 | ) | (4 | ) | (6 | ) | ||||||
Truck initiative | (2 | ) | — | (2 | ) | |||||||
T17 | (1 | ) | (2 | ) | (3 | ) | ||||||
Balance as of June 30, 2018 | $ | — | $ | 2 | $ | 2 | ||||||
Personnel Related | Other (a) | Total | ||||||||||
Balance as of January 1, 2018 | $ | 4 | $ | — | $ | 4 | ||||||
Restructuring expense: | ||||||||||||
Workforce planning | 6 | 1 | 7 | |||||||||
Truck initiative | — | 2 | 2 | |||||||||
Restructuring payment/utilization: | ||||||||||||
Workforce planning | (5 | ) | (1 | ) | (6 | ) | ||||||
Truck initiative | — | (2 | ) | (2 | ) | |||||||
T17 | (3 | ) | — | (3 | ) | |||||||
Balance as of June 30, 2018 | $ | 2 | $ | — | $ | 2 |
(a) | Includes expenses primarily related to the disposition of vehicles. |
4. | Earnings Per Share |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income (loss) for basic and diluted EPS | $ | 26 | $ | 3 | $ | (61 | ) | $ | (104 | ) | ||||||
Basic weighted average shares outstanding | 80.7 | 84.0 | 80.8 | 84.9 | ||||||||||||
Options and non-vested stock (a) | 0.8 | 1.2 | — | — | ||||||||||||
Diluted weighted average shares outstanding | 81.5 | 85.2 | 80.8 | 84.9 | ||||||||||||
Earnings (loss) per share: | ||||||||||||||||
Basic | $ | 0.33 | $ | 0.04 | $ | (0.75 | ) | $ | (1.22 | ) | ||||||
Diluted | $ | 0.32 | $ | 0.04 | $ | (0.75 | ) | $ | (1.22 | ) |
(a) | For the three months ended June 30, 2018 and 2017, 0.2 million and 0.7 million non-vested stock awards, respectively, have an anti-dilutive effect and therefore are excluded from the computation of diluted weighted average shares outstanding. As the Company incurred a net loss for the six months ended June 30, 2018 and 2017, 0.1 million and 0.8 million outstanding options, respectively, and 1.5 million and 1.3 million non-vested stock awards, respectively, have an anti-dilutive effect and therefore are excluded from the computation of diluted weighted average shares outstanding. |
5. | Other Investments |
6. | Other Current Assets |
As of June 30, 2018 | As of December 31, 2017 | ||||||
Sales and use taxes | $ | 402 | $ | 174 | |||
Prepaid expenses | 252 | 196 | |||||
Other | 178 | 163 | |||||
Other current assets | $ | 832 | $ | 533 |
7. | Intangible Assets |
As of June 30, 2018 | As of December 31, 2017 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Amortized Intangible Assets | |||||||||||||||||||||||
License agreements | $ | 310 | $ | 154 | $ | 156 | $ | 281 | $ | 140 | $ | 141 | |||||||||||
Customer relationships | 238 | 130 | 108 | 242 | 119 | 123 | |||||||||||||||||
Other | 49 | 19 | 30 | 51 | 18 | 33 | |||||||||||||||||
Total | $ | 597 | $ | 303 | $ | 294 | $ | 574 | $ | 277 | $ | 297 | |||||||||||
Unamortized Intangible Assets | |||||||||||||||||||||||
Goodwill (a) | $ | 1,049 | $ | 1,073 | |||||||||||||||||||
Trademarks | $ | 549 | $ | 553 |
(a) | The change in the carrying amount since December 31, 2017, primarily reflects currency translation. |
8. | Vehicle Rental Activities |
As of | As of | ||||||
June 30, | December 31, | ||||||
2018 | 2017 | ||||||
Rental vehicles | $ | 15,188 | $ | 11,652 | |||
Less: Accumulated depreciation | (1,629 | ) | (1,652 | ) | |||
13,559 | 10,000 | ||||||
Vehicles held for sale | 308 | 626 | |||||
Vehicles, net | $ | 13,867 | $ | 10,626 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Depreciation expense | $ | 536 | $ | 516 | $ | 996 | $ | 953 | |||||||
Lease charges | 64 | 54 | 120 | 97 | |||||||||||
(Gain) loss on sale of vehicles, net | (9 | ) | 27 | (10 | ) | 51 | |||||||||
Vehicle depreciation and lease charges, net | $ | 591 | $ | 597 | $ | 1,106 | $ | 1,101 |
9. | Income Taxes |
10. | Accounts Payable and Other Current Liabilities |
As of | As of | ||||||
June 30, | December 31, | ||||||
2018 | 2017 | ||||||
Accounts payable | $ | 412 | $ | 359 | |||
Accrued sales and use taxes | 262 | 218 | |||||
Deferred revenue – current | 247 | 135 | |||||
Accrued advertising and marketing | 197 | 190 | |||||
Accrued payroll and related | 176 | 176 | |||||
Public liability and property damage insurance liabilities – current | 144 | 145 | |||||
Accrued insurance | 102 | 103 | |||||
Other | 292 | 293 | |||||
Accounts payable and other current liabilities | $ | 1,832 | $ | 1,619 |
11. | Long-term Corporate Debt and Borrowing Arrangements |
As of | As of | ||||||||
Maturity Dates | June 30, | December 31, | |||||||
2018 | 2017 | ||||||||
Floating Rate Term Loan | March 2022 | $ | — | $ | 1,136 | ||||
5⅛% Senior Notes | June 2022 | 400 | 400 | ||||||
5½% Senior Notes | April 2023 | 675 | 675 | ||||||
6⅜% Senior Notes | April 2024 | 350 | 350 | ||||||
4⅛% euro-denominated Senior Notes | November 2024 | 351 | 360 | ||||||
Floating Rate Term Loan (a) | February 2025 | 1,128 | — | ||||||
5¼% Senior Notes | March 2025 | 375 | 375 | ||||||
4½% euro-denominated Senior Notes | May 2025 | 292 | 300 | ||||||
Other (b) | 43 | 49 | |||||||
Deferred financing fees | (46 | ) | (46 | ) | |||||
Total | 3,568 | 3,599 | |||||||
Less: Short-term debt and current portion of long-term debt | 24 | 26 | |||||||
Long-term debt | $ | 3,544 | $ | 3,573 |
(a) | The floating rate term loan is part of the Company’s senior credit facility, which is secured by pledges of capital stock of certain subsidiaries of the Company, and liens on substantially all of the Company’s intellectual property and certain other real and personal property. As of June 30, 2018, the floating rate term loan due 2025 bears interest at three-month LIBOR plus 200 basis points, for an aggregate rate of 4.34%. The Company has entered into a swap to hedge $700 million of its interest rate exposure related to the floating rate term loan at an aggregate rate of 3.79%. |
(b) | Primarily includes capital leases which are secured by liens on the related assets. |
Total Capacity | Outstanding Borrowings | Letters of Credit Issued | Available Capacity | ||||||||||||
Senior revolving credit facility maturing 2023 (a) | $ | 1,800 | $ | — | $ | 1,324 | $ | 476 | |||||||
Other facilities (b) | 2 | 2 | — | — |
(a) | The senior revolving credit facility bears interest at one-month LIBOR plus 200 basis points and is part of the Company’s senior credit facility, which is secured by pledges of capital stock of certain subsidiaries of the Company, and liens on substantially all of the Company’s intellectual property and certain other real and personal property. |
(b) | These facilities encompass bank overdraft lines of credit, bearing interest of 3.22% as of June 30, 2018. |
12. | Debt Under Vehicle Programs and Borrowing Arrangements |
As of | As of | ||||||
June 30, | December 31, | ||||||
2018 | 2017 | ||||||
Americas - Debt due to Avis Budget Rental Car Funding (a) | $ | 8,298 | $ | 6,516 | |||
Americas - Debt borrowings | 912 | 660 | |||||
International - Debt borrowings | 2,399 | 1,942 | |||||
International - Capital leases | 211 | 146 | |||||
Other | 4 | 1 | |||||
Deferred financing fees (b) | (48 | ) | (44 | ) | |||
Total | $ | 11,776 | $ | 9,221 |
(a) | The increase reflects additional borrowings principally to fund increases in the Company’s car rental fleet. |
(b) | Deferred financing fees related to Debt due to Avis Budget Rental Car Funding as of June 30, 2018 and December 31, 2017 were $33 million and $36 million, respectively. |
Debt under Vehicle Programs | |||
Within 1 year | $ | 1,816 | |
Between 1 and 2 years | 4,703 | ||
Between 2 and 3 years | 2,997 | ||
Between 3 and 4 years | 724 | ||
Between 4 and 5 years | 1,156 | ||
Thereafter | 428 | ||
Total | $ | 11,824 |
Total Capacity (a) | Outstanding Borrowings (b) | Available Capacity | |||||||||
Americas - Debt due to Avis Budget Rental Car Funding | $ | 8,988 | $ | 8,298 | $ | 690 | |||||
Americas - Debt borrowings | 971 | 912 | 59 | ||||||||
International - Debt borrowings | 3,081 | 2,399 | 682 | ||||||||
International - Capital leases | 231 | 211 | 20 | ||||||||
Other | 4 | 4 | — | ||||||||
Total | $ | 13,275 | $ | 11,824 | $ | 1,451 |
(a) | Capacity is subject to maintaining sufficient assets to collateralize debt. |
(b) | The outstanding debt is collateralized by vehicles and related assets of $9.8 billion for Americas - Debt due to Avis Budget Rental Car Funding; $1.3 billion for Americas - Debt borrowings; $2.6 billion for International - Debt borrowings; and $0.2 billion for International - Capital leases. |
13. | Commitments and Contingencies |
14. | Stockholders’ Equity |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income (loss) | $ | 26 | $ | 3 | $ | (61 | ) | $ | (104 | ) | ||||||
Other comprehensive income (loss): | ||||||||||||||||
Currency translation adjustments (net of tax of $(10), $17, $(5) and $20, respectively) | (54 | ) | 48 | (53 | ) | 73 | ||||||||||
Net unrealized gain (loss) on available-for-sale securities (net of tax of $0 in each period) | — | 1 | — | 1 | ||||||||||||
Net unrealized gain (loss) on cash flow hedges (net of tax of $(1), $1, $(3) and $1, respectively) | 2 | (2 | ) | 8 | (1 | ) | ||||||||||
Minimum pension liability adjustment (net of tax of $0, $0, $(1) and $(1), respectively) | 2 | 1 | 3 | 3 | ||||||||||||
(50 | ) | 48 | (42 | ) | 76 | |||||||||||
Comprehensive income (loss) | $ | (24 | ) | $ | 51 | $ | (103 | ) | $ | (28 | ) |
Currency Translation Adjustments | Net Unrealized Gains (Losses) on Cash Flow Hedges(a) | Net Unrealized Gains (Losses) on Available-for Sale Securities | Minimum Pension Liability Adjustment(b) | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
Balance, December 31, 2017 | $ | 71 | $ | 5 | $ | 2 | $ | (102 | ) | $ | (24 | ) | ||||||||
Cumulative effect of accounting change (c) | 7 | 1 | (2 | ) | (12 | ) | (6 | ) | ||||||||||||
Balance, January 1, 2018 | $ | 78 | $ | 6 | $ | — | $ | (114 | ) | $ | (30 | ) | ||||||||
Other comprehensive income (loss) before reclassifications | (53 | ) | 8 | — | 1 | (44 | ) | |||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | — | — | 2 | 2 | |||||||||||||||
Net current-period other comprehensive income (loss) | (53 | ) | 8 | — | 3 | (42 | ) | |||||||||||||
Balance, June 30, 2018 | $ | 25 | $ | 14 | $ | — | $ | (111 | ) | $ | (72 | ) | ||||||||
Balance, January 1, 2017 | $ | (39 | ) | $ | 2 | $ | 1 | $ | (118 | ) | $ | (154 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 73 | (2 | ) | 1 | — | 72 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 1 | — | 3 | 4 | |||||||||||||||
Net current-period other comprehensive income (loss) | 73 | (1 | ) | 1 | 3 | 76 | ||||||||||||||
Balance, June 30, 2017 | $ | 34 | $ | 1 | $ | 2 | $ | (115 | ) | $ | (78 | ) |
(a) | For the three and six months ended June 30, 2017, the amount reclassified from accumulated other comprehensive income (loss) into corporate interest expense were $1 million ($0 million, net of tax) and $2 million ($1 million, net of tax), respectively. |
(b) | For the three and six months ended June 30, 2018, amounts reclassified from accumulated other comprehensive income (loss) into selling, general and administrative expenses were $2 million ($1 million, net of tax) and $4 million ($2 million, net of tax), respectively. For the three and six months ended June 30, 2017, amounts reclassified from accumulated other comprehensive income (loss) into selling, general and administrative expenses were $2 million ($2 million, net of tax) and $4 million ($3 million, net of tax), respectively. |
(c) | See Note 1 - Basis of Presentation for the impact of adoption of ASU 2016-01 and ASU 2018-02. |
15. | Stock-Based Compensation |
Number of Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in millions) | |||||||||||
Time-based RSUs | ||||||||||||||
Outstanding at January 1, 2018 | 1,160 | $ | 34.54 | |||||||||||
Granted (a) | 317 | 48.66 | ||||||||||||
Vested (b) | (359 | ) | 35.14 | |||||||||||
Forfeited | (39 | ) | 34.98 | |||||||||||
Outstanding and expected to vest at June 30, 2018(c) | 1,079 | $ | 38.47 | 1.1 | $ | 35 | ||||||||
Performance-based and market-based RSUs | ||||||||||||||
Outstanding at January 1, 2018 | 994 | $ | 33.06 | |||||||||||
Granted (a) | 349 | 48.72 | ||||||||||||
Vested | — | — | ||||||||||||
Forfeited | (145 | ) | 53.36 | |||||||||||
Outstanding at June 30, 2018 | 1,198 | $ | 35.17 | 1.5 | $ | 39 | ||||||||
Outstanding and expected to vest at June 30, 2018(c) | 266 | $ | 44.49 | 2.3 | $ | 9 |
(a) | Reflects the maximum number of stock units assuming achievement of all performance-, market- and time-vesting criteria and does not include those for non-employee directors. The weighted-average fair value of time-based RSUs and performance-based RSUs granted during the six months ended June 30, 2017 was $34.41. |
(b) | The total fair value of RSUs vested during June 30, 2018 and 2017 was $13 million and $22 million, respectively. |
(c) | Aggregate unrecognized compensation expense related to time-based RSUs and performance-based RSUs amounted to $41 million and will be recognized over a weighted average vesting period of 1.3 years. |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in millions) | ||||||||||
Outstanding at January 1, 2018 | 273 | $ | 7.08 | 1.7 | $ | 10 | |||||||
Granted | — | — | |||||||||||
Exercised | (186 | ) | 9.99 | 7 | |||||||||
Forfeited/expired | — | — | |||||||||||
Outstanding and exercisable at June 30, 2018 | 87 | $ | 0.79 | 0.6 | $ | 3 |
16. | Financial Instruments |
As of June 30, 2018 | |||
Interest rate caps (a) | $ | 8,934 | |
Interest rate swaps | 1,000 | ||
Foreign exchange contracts | 1,276 | ||
Commodity contracts (millions of gallons of unleaded gasoline) | 9 |
(a) | Represents $5.9 billion of interest rate caps sold, partially offset by approximately $3.0 billion of interest rate caps purchased. These amounts exclude $3.0 billion of interest rate caps purchased by the Company’s Avis Budget Rental Car Funding subsidiary as it is not consolidated by the Company. |
As of June 30, 2018 | As of December 31, 2017 | |||||||||||||||
Fair Value, Asset Derivatives | Fair Value, Liability Derivatives | Fair Value, Asset Derivatives | Fair Value, Liability Derivatives | |||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Interest rate swaps (a) | $ | 19 | $ | — | $ | 8 | $ | — | ||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Interest rate caps (b) | 1 | 5 | — | 1 | ||||||||||||
Foreign exchange contracts (c) | 14 | 5 | 3 | 7 | ||||||||||||
Commodity contracts (c) | 1 | — | — | — | ||||||||||||
Total | $ | 35 | $ | 10 | $ | 11 | $ | 8 |
(a) | Included in other non-current assets or other non-current liabilities. |
(b) | Included in assets under vehicle programs or liabilities under vehicle programs. |
(c) | Included in other current assets or other current liabilities. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Derivatives designated as hedging instruments (a) | ||||||||||||||||
Interest rate swaps | $ | 2 | $ | (2 | ) | $ | 8 | $ | (1 | ) | ||||||
Euro-denominated notes | 26 | (26 | ) | 13 | (31 | ) | ||||||||||
Derivatives not designated as hedging instruments (b) | ||||||||||||||||
Interest rate caps (c) | (1 | ) | — | (1 | ) | — | ||||||||||
Foreign exchange contracts (d) | 28 | (21 | ) | 19 | (33 | ) | ||||||||||
Commodity contracts (e) | 1 | (1 | ) | 1 | (2 | ) | ||||||||||
Total | $ | 56 | $ | (50 | ) | $ | 40 | $ | (67 | ) |
(a) | Recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity. |
(b) | Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures being hedged. |
(c) | Included primarily in vehicle interest, net. |
(d) | For the three months ended June 30, 2018, included a $20 million gain in interest expense and a $8 million gain in operating expense and for the six months ended June 30, 2018, included a $7 million gain in interest expense and a $12 million gain in operating expense. For the three months ended June 30, 2017, included a $11 million loss in interest expense and a $10 million loss in operating expense and for the six months ended June 30, 2017, included a $18 million loss in interest expense and a $15 million loss in operating expense. |
(e) | Included in operating expense. |
As of June 30, 2018 | As of December 31, 2017 | |||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||
Corporate debt | ||||||||||||||||
Short-term debt and current portion of long-term debt | $ | 24 | $ | 24 | $ | 26 | $ | 26 | ||||||||
Long-term debt | 3,544 | 3,539 | 3,573 | 3,677 | ||||||||||||
Debt under vehicle programs | ||||||||||||||||
Vehicle-backed debt due to Avis Budget Rental Car Funding | $ | 8,265 | $ | 8,270 | $ | 6,480 | $ | 6,537 | ||||||||
Vehicle-backed debt | 3,506 | 3,520 | 2,740 | 2,745 | ||||||||||||
Interest rate swaps and interest rate caps (a) | 5 | 5 | 1 | 1 |
(a) | Derivatives in a liability position. |
17. | Segment Information |
Three Months Ended June 30, | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Revenues | Adjusted EBITDA | Revenues | Adjusted EBITDA | |||||||||||||||
Americas | $ | 1,590 | $ | 107 | $ | 1,565 | $ | 96 | ||||||||||
International | 738 | 71 | 673 | 59 | ||||||||||||||
Corporate and Other (a) | — | (17 | ) | — | (15 | ) | ||||||||||||
Total Company | $ | 2,328 | $ | 161 | $ | 2,238 | $ | 140 | ||||||||||
Reconciliation of Adjusted EBITDA to income before income taxes | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Adjusted EBITDA | $ | 161 | $ | 140 | ||||||||||||||
Less: | Non-vehicle related depreciation and amortization | 67 | 65 | |||||||||||||||
Interest expense related to corporate debt, net | 49 | 48 | ||||||||||||||||
Restructuring and other related charges | 4 | 38 | ||||||||||||||||
Transaction-related costs, net | 3 | 5 | ||||||||||||||||
Charges for legal matter, net | — | (27 | ) | |||||||||||||||
Income before income taxes | $ | 38 | $ | 11 |
(a) | Includes unallocated corporate overhead which is not attributable to a particular segment. |
Six Months Ended June 30, | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Revenues | Adjusted EBITDA | Revenues | Adjusted EBITDA | |||||||||||||||
Americas | $ | 2,938 | $ | 122 | $ | 2,879 | $ | 76 | ||||||||||
International | 1,358 | 74 | 1,198 | 66 | ||||||||||||||
Corporate and Other (a) | — | (33 | ) | — | (29 | ) | ||||||||||||
Total Company | $ | 4,296 | $ | 163 | $ | 4,077 | $ | 113 | ||||||||||
Reconciliation of Adjusted EBITDA to loss before income taxes | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Adjusted EBITDA | $ | 163 | $ | 113 | ||||||||||||||
Less: | Non-vehicle related depreciation and amortization | 128 | 128 | |||||||||||||||
Interest expense related to corporate debt, net: | ||||||||||||||||||
Interest expense | 95 | 97 | ||||||||||||||||
Early extinguishment of debt | 5 | 3 | ||||||||||||||||
Restructuring and other related charges | 10 | 45 | ||||||||||||||||
Non-operational charges related to shareholder activist activity | 9 | — | ||||||||||||||||
Transaction-related costs, net | 7 | 8 | ||||||||||||||||
Charges for legal matter, net | — | (14 | ) | |||||||||||||||
Loss before income taxes | $ | (91 | ) | $ | (154 | ) |
(a) | Includes unallocated corporate overhead which is not attributable to a particular segment. |
18. | Guarantor and Non-Guarantor Consolidating Condensed Financial Statements |
Six Months Ended June 30, 2017 | |||||||||||||||||||||||
As Previously Reported Non-Guarantor | Effect of Change | As Adjusted Non-Guarantor | As Previously Reported Total | Effect of Change | As Adjusted Total | ||||||||||||||||||
Decrease in program cash | $ | 168 | $ | (168 | ) | $ | — | $ | 168 | $ | (168 | ) | $ | — | |||||||||
Other, net | (1 | ) | 1 | — | (1 | ) | 1 | — | |||||||||||||||
Net cash used in investing activities | (3,303 | ) | (167 | ) | (3,470 | ) | (3,019 | ) | (167 | ) | (3,186 | ) | |||||||||||
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash | 27 | 9 | 36 | 27 | 9 | 36 | |||||||||||||||||
Net increase in cash and cash equivalents, program and restricted cash | 177 | (158 | ) | 19 | 286 | (158 | ) | 128 | |||||||||||||||
Cash and cash equivalents, program and restricted cash, beginning of period | 475 | 230 | 705 | 490 | 230 | 720 | |||||||||||||||||
Cash and cash equivalents, program and restricted cash, end of period | $ | 652 | $ | 72 | $ | 724 | $ | 776 | $ | 72 | $ | 848 |
As of June 30, | |||||||||||||||
2018 | 2017 | ||||||||||||||
Non-Guarantor | Total | Non-Guarantor | Total | ||||||||||||
Cash and cash equivalents | $ | 475 | $ | 489 | $ | 652 | $ | 776 | |||||||
Program cash | 161 | 161 | 65 | 65 | |||||||||||
Restricted cash (a) | 11 | 11 | 7 | 7 | |||||||||||
Total cash and cash equivalents, program and restricted cash | $ | 647 | $ | 661 | $ | 724 | $ | 848 |
(a) | Included within other current assets. |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||
Revenues | $ | — | $ | — | $ | 1,395 | $ | 1,590 | $ | (657 | ) | $ | 2,328 | ||||||||||||
Expenses | |||||||||||||||||||||||||
Operating | 1 | (3 | ) | 677 | 500 | — | 1,175 | ||||||||||||||||||
Vehicle depreciation and lease charges, net | — | — | 605 | 582 | (596 | ) | 591 | ||||||||||||||||||
Selling, general and administrative | 10 | 3 | 176 | 132 | — | 321 | |||||||||||||||||||
Vehicle interest, net | — | — | 61 | 80 | (61 | ) | 80 | ||||||||||||||||||
Non-vehicle related depreciation and amortization | — | 1 | 36 | 30 | — | 67 | |||||||||||||||||||
Interest expense related to corporate debt, net: | |||||||||||||||||||||||||
Interest expense | — | 39 | 1 | 9 | — | 49 | |||||||||||||||||||
Intercompany interest expense (income) | (3 | ) | (31 | ) | 5 | 29 | — | — | |||||||||||||||||
Restructuring and other related charges | — | — | 1 | 3 | — | 4 | |||||||||||||||||||
Transaction-related costs, net | — | 1 | 1 | 1 | — | 3 | |||||||||||||||||||
Total expenses | 8 | 10 | 1,563 | 1,366 | (657 | ) | 2,290 | ||||||||||||||||||
Income (loss) before income taxes and equity in earnings of subsidiaries | (8 | ) | (10 | ) | (168 | ) | 224 | — | 38 | ||||||||||||||||
Provision for (benefit from) income taxes | (5 | ) | (3 | ) | 14 | 6 | — | 12 | |||||||||||||||||
Equity in earnings of subsidiaries | 29 | 36 | 218 | — | (283 | ) | — | ||||||||||||||||||
Net income | $ | 26 | $ | 29 | $ | 36 | $ | 218 | $ | (283 | ) | $ | 26 | ||||||||||||
Comprehensive income (loss) | $ | (24 | ) | $ | (21 | ) | $ | (16 | ) | $ | 165 | $ | (128 | ) | $ | (24 | ) |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||
Revenues | $ | — | $ | — | $ | 2,579 | $ | 2,949 | $ | (1,232 | ) | $ | 4,296 | ||||||||||||
Expenses | |||||||||||||||||||||||||
Operating | 2 | 1 | 1,298 | 966 | — | 2,267 | |||||||||||||||||||
Vehicle depreciation and lease charges, net | — | — | 1,141 | 1,086 | (1,121 | ) | 1,106 | ||||||||||||||||||
Selling, general and administrative | 28 | 6 | 331 | 252 | — | 617 | |||||||||||||||||||
Vehicle interest, net | — | — | 113 | 150 | (111 | ) | 152 | ||||||||||||||||||
Non-vehicle related depreciation and amortization | — | 1 | 72 | 55 | — | 128 | |||||||||||||||||||
Interest expense related to corporate debt, net: | |||||||||||||||||||||||||
Interest expense | — | 78 | 2 | 15 | — | 95 | |||||||||||||||||||
Intercompany interest expense (income) | (6 | ) | (9 | ) | 11 | 4 | — | — | |||||||||||||||||
Early extinguishment of debt | — | 5 | — | — | — | 5 | |||||||||||||||||||
Restructuring and other related charges | — | — | 4 | 6 | — | 10 | |||||||||||||||||||
Transaction-related costs, net | — | 1 | 1 | 5 | — | 7 | |||||||||||||||||||
Total expenses | 24 | 83 | 2,973 | 2,539 | (1,232 | ) | 4,387 | ||||||||||||||||||
Income (loss) before income taxes and equity in earnings of subsidiaries | (24 | ) | (83 | ) | (394 | ) | 410 | — | (91 | ) | |||||||||||||||
Provision for (benefit from) income taxes | (11 | ) | (22 | ) | (5 | ) | 8 | — | (30 | ) | |||||||||||||||
Equity in earnings (loss) of subsidiaries | (48 | ) | 13 | 402 | — | (367 | ) | — | |||||||||||||||||
Net income (loss) | $ | (61 | ) | $ | (48 | ) | $ | 13 | $ | 402 | $ | (367 | ) | $ | (61 | ) | |||||||||
Comprehensive income (loss) | $ | (103 | ) | $ | (90 | ) | $ | (37 | ) | $ | 349 | $ | (222 | ) | $ | (103 | ) |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||
Revenues | $ | — | $ | — | $ | 1,371 | $ | 1,530 | $ | (663 | ) | $ | 2,238 | ||||||||||||
Expenses | |||||||||||||||||||||||||
Operating | 1 | 9 | 644 | 454 | — | 1,108 | |||||||||||||||||||
Vehicle depreciation and lease charges, net | — | — | 614 | 592 | (609 | ) | 597 | ||||||||||||||||||
Selling, general and administrative | 10 | 2 | 158 | 123 | — | 293 | |||||||||||||||||||
Vehicle interest, net | — | — | 52 | 75 | (54 | ) | 73 | ||||||||||||||||||
Non-vehicle related depreciation and amortization | — | 1 | 40 | 24 | — | 65 | |||||||||||||||||||
Interest expense related to corporate debt, net: | |||||||||||||||||||||||||
Interest expense | — | 83 | — | (35 | ) | — | 48 | ||||||||||||||||||
Intercompany interest expense (income) | (3 | ) | 5 | 5 | (7 | ) | — | — | |||||||||||||||||
Early extinguishment of debt | — | 1 | — | (1 | ) | — | — | ||||||||||||||||||
Restructuring and other related charges | — | 2 | 33 | 3 | — | 38 | |||||||||||||||||||
Transaction-related costs, net | — | — | — | 5 | — | 5 | |||||||||||||||||||
Total expenses | 8 | 103 | 1,546 | 1,233 | (663 | ) | 2,227 | ||||||||||||||||||
Income (loss) before income taxes and equity in earnings of subsidiaries | (8 | ) | (103 | ) | (175 | ) | 297 | — | 11 | ||||||||||||||||
Provision for (benefit from) income taxes | (2 | ) | (39 | ) | 11 | 38 | — | 8 | |||||||||||||||||
Equity in earnings of subsidiaries | 9 | 73 | 259 | — | (341 | ) | — | ||||||||||||||||||
Net income | $ | 3 | $ | 9 | $ | 73 | $ | 259 | $ | (341 | ) | $ | 3 | ||||||||||||
Comprehensive income | $ | 51 | $ | 58 | $ | 123 | $ | 309 | $ | (490 | ) | $ | 51 |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||
Revenues | $ | — | $ | — | $ | 2,524 | $ | 2,801 | $ | (1,248 | ) | $ | 4,077 | ||||||||||||
Expenses | |||||||||||||||||||||||||
Operating | 2 | 13 | 1,284 | 858 | — | 2,157 | |||||||||||||||||||
Vehicle depreciation and lease charges, net | — | — | 1,160 | 1,085 | (1,144 | ) | 1,101 | ||||||||||||||||||
Selling, general and administrative | 20 | 4 | 311 | 220 | — | 555 | |||||||||||||||||||
Vehicle interest, net | — | — | 97 | 144 | (104 | ) | 137 | ||||||||||||||||||
Non-vehicle related depreciation and amortization | — | 1 | 80 | 47 | — | 128 | |||||||||||||||||||
Interest expense related to corporate debt, net: | |||||||||||||||||||||||||
Interest expense | — | 129 | 1 | (33 | ) | — | 97 | ||||||||||||||||||
Intercompany interest expense (income) | (6 | ) | 6 | 11 | (11 | ) | — | — | |||||||||||||||||
Early extinguishment of debt | — | 4 | — | (1 | ) | — | 3 | ||||||||||||||||||
Restructuring and other related charges | — | 2 | 39 | 4 | — | 45 | |||||||||||||||||||
Transaction-related costs, net | — | — | — | 8 | — | 8 | |||||||||||||||||||
Total expenses | 16 | 159 | 2,983 | 2,321 | (1,248 | ) | 4,231 | ||||||||||||||||||
Income (loss) before income taxes and equity in earnings of subsidiaries | (16 | ) | (159 | ) | (459 | ) | 480 | — | (154 | ) | |||||||||||||||
Provision for (benefit from) income taxes | (4 | ) | (62 | ) | (28 | ) | 44 | — | (50 | ) | |||||||||||||||
Equity in earnings (loss) of subsidiaries | (92 | ) | 5 | 436 | — | (349 | ) | — | |||||||||||||||||
Net income (loss) | $ | (104 | ) | $ | (92 | ) | $ | 5 | $ | 436 | $ | (349 | ) | $ | (104 | ) | |||||||||
Comprehensive income (loss) | $ | (28 | ) | $ | (16 | ) | $ | 82 | $ | 512 | $ | (578 | ) | $ | (28 | ) |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 3 | $ | 11 | $ | — | $ | 475 | $ | — | $ | 489 | |||||||||||||
Receivables, net | — | — | 248 | 654 | — | 902 | |||||||||||||||||||
Other current assets | 2 | 114 | 119 | 597 | — | 832 | |||||||||||||||||||
Total current assets | 5 | 125 | 367 | 1,726 | — | 2,223 | |||||||||||||||||||
Property and equipment, net | — | 183 | 317 | 215 | — | 715 | |||||||||||||||||||
Deferred income taxes | 13 | 887 | 169 | 51 | — | 1,120 | |||||||||||||||||||
Goodwill | — | — | 471 | 578 | — | 1,049 | |||||||||||||||||||
Other intangibles, net | — | 26 | 477 | 340 | — | 843 | |||||||||||||||||||
Other non-current assets | 46 | 39 | 16 | 142 | — | 243 | |||||||||||||||||||
Intercompany receivables | 191 | 393 | 1,747 | 924 | (3,255 | ) | — | ||||||||||||||||||
Investment in subsidiaries | 169 | 4,595 | 3,900 | — | (8,664 | ) | — | ||||||||||||||||||
Total assets exclusive of assets under vehicle programs | 424 | 6,248 | 7,464 | 3,976 | (11,919 | ) | 6,193 | ||||||||||||||||||
Assets under vehicle programs: | |||||||||||||||||||||||||
Program cash | — | — | — | 161 | — | 161 | |||||||||||||||||||
Vehicles, net | — | 43 | 57 | 13,767 | — | 13,867 | |||||||||||||||||||
Receivables from vehicle manufacturers and other | — | 3 | — | 250 | — | 253 | |||||||||||||||||||
Investment in Avis Budget Rental Car Funding (AESOP) LLC-related party | — | — | — | 445 | — | 445 | |||||||||||||||||||
— | 46 | 57 | 14,623 | — | 14,726 | ||||||||||||||||||||
Total assets | $ | 424 | $ | 6,294 | $ | 7,521 | $ | 18,599 | $ | (11,919 | ) | $ | 20,919 | ||||||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||
Accounts payable and other current liabilities | $ | 13 | $ | 251 | $ | 664 | $ | 904 | $ | — | $ | 1,832 | |||||||||||||
Short-term debt and current portion of long-term debt | — | 17 | 2 | 5 | — | 24 | |||||||||||||||||||
Total current liabilities | 13 | 268 | 666 | 909 | — | 1,856 | |||||||||||||||||||
Long-term debt | — | 2,900 | 3 | 641 | — | 3,544 | |||||||||||||||||||
Other non-current liabilities | 39 | 81 | 259 | 366 | — | 745 | |||||||||||||||||||
Intercompany payables | — | 2,860 | 393 | 2 | (3,255 | ) | — | ||||||||||||||||||
Total liabilities exclusive of liabilities under vehicle programs | 52 | 6,109 | 1,321 | 1,918 | (3,255 | ) | 6,145 | ||||||||||||||||||
Liabilities under vehicle programs: | |||||||||||||||||||||||||
Debt | — | 16 | 52 | 3,443 | — | 3,511 | |||||||||||||||||||
Due to Avis Budget Rental Car Funding (AESOP) LLC-related party | — | — | — | 8,265 | — | 8,265 | |||||||||||||||||||
Deferred income taxes | — | — | 1,553 | 174 | — | 1,727 | |||||||||||||||||||
Other | — | — | — | 899 | — | 899 | |||||||||||||||||||
— | 16 | 1,605 | 12,781 | — | 14,402 | ||||||||||||||||||||
Total stockholders’ equity | 372 | 169 | 4,595 | 3,900 | (8,664 | ) | 372 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 424 | $ | 6,294 | $ | 7,521 | $ | 18,599 | $ | (11,919 | ) | $ | 20,919 |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 4 | $ | 14 | $ | — | $ | 593 | $ | — | $ | 611 | |||||||||||||
Receivables, net | — | — | 255 | 667 | — | 922 | |||||||||||||||||||
Other current assets | 4 | 89 | 101 | 339 | — | 533 | |||||||||||||||||||
Total current assets | 8 | 103 | 356 | 1,599 | — | 2,066 | |||||||||||||||||||
Property and equipment, net | — | 167 | 321 | 216 | — | 704 | |||||||||||||||||||
Deferred income taxes | 14 | 704 | 154 | 59 | — | 931 | |||||||||||||||||||
Goodwill | — | — | 471 | 602 | — | 1,073 | |||||||||||||||||||
Other intangibles, net | — | 27 | 480 | 343 | — | 850 | |||||||||||||||||||
Other non-current assets | 46 | 29 | 16 | 105 | — | 196 | |||||||||||||||||||
Intercompany receivables | 187 | 382 | 1,506 | 824 | (2,899 | ) | — | ||||||||||||||||||
Investment in subsidiaries | 381 | 4,681 | 3,938 | — | (9,000 | ) | — | ||||||||||||||||||
Total assets exclusive of assets under vehicle programs | 636 | 6,093 | 7,242 | 3,748 | (11,899 | ) | 5,820 | ||||||||||||||||||
Assets under vehicle programs: | |||||||||||||||||||||||||
Program cash | — | — | — | 283 | — | 283 | |||||||||||||||||||
Vehicles, net | — | 34 | 61 | 10,531 | — | 10,626 | |||||||||||||||||||
Receivables from vehicle manufacturers and other | — | 1 | — | 546 | — | 547 | |||||||||||||||||||
Investment in Avis Budget Rental Car Funding (AESOP) LLC-related party | — | — | — | 423 | — | 423 | |||||||||||||||||||
— | 35 | 61 | 11,783 | — | 11,879 | ||||||||||||||||||||
Total assets | $ | 636 | $ | 6,128 | $ | 7,303 | $ | 15,531 | $ | (11,899 | ) | $ | 17,699 | ||||||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||
Accounts payable and other current liabilities | $ | 23 | $ | 207 | $ | 552 | $ | 837 | $ | — | $ | 1,619 | |||||||||||||
Short-term debt and current portion of long-term debt | — | 17 | 3 | 6 | — | 26 | |||||||||||||||||||
Total current liabilities | 23 | 224 | 555 | 843 | — | 1,645 | |||||||||||||||||||
Long-term debt | — | 2,910 | 3 | 660 | — | 3,573 | |||||||||||||||||||
Other non-current liabilities | 40 | 83 | 216 | 378 | — | 717 | |||||||||||||||||||
Intercompany payables | — | 2,515 | 382 | 2 | (2,899 | ) | — | ||||||||||||||||||
Total liabilities exclusive of liabilities under vehicle programs | 63 | 5,732 | 1,156 | 1,883 | (2,899 | ) | 5,935 | ||||||||||||||||||
Liabilities under vehicle programs: | |||||||||||||||||||||||||
Debt | — | 15 | 57 | 2,669 | — | 2,741 | |||||||||||||||||||
Due to Avis Budget Rental Car Funding (AESOP) LLC-related party | — | — | — | 6,480 | — | 6,480 | |||||||||||||||||||
Deferred income taxes | — | — | 1,407 | 187 | — | 1,594 | |||||||||||||||||||
Other | — | — | 2 | 374 | — | 376 | |||||||||||||||||||
— | 15 | 1,466 | 9,710 | — | 11,191 | ||||||||||||||||||||
Total stockholders’ equity | 573 | 381 | 4,681 | 3,938 | (9,000 | ) | 573 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 636 | $ | 6,128 | $ | 7,303 | $ | 15,531 | $ | (11,899 | ) | $ | 17,699 |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 75 | $ | 107 | $ | 66 | $ | 968 | $ | (95 | ) | $ | 1,121 | ||||||||||
Investing activities | |||||||||||||||||||||||
Property and equipment additions | — | (33 | ) | (43 | ) | (39 | ) | — | (115 | ) | |||||||||||||
Proceeds received on asset sales | — | 2 | — | 4 | — | 6 | |||||||||||||||||
Net assets acquired (net of cash acquired) | — | (3 | ) | (4 | ) | (21 | ) | — | (28 | ) | |||||||||||||
Other, net | — | — | — | (37 | ) | — | (37 | ) | |||||||||||||||
Net cash provided by (used in) investing activities exclusive of vehicle programs | — | (34 | ) | (47 | ) | (93 | ) | — | (174 | ) | |||||||||||||
Vehicle programs: | |||||||||||||||||||||||
Investment in vehicles | — | (1 | ) | (1 | ) | (8,357 | ) | — | (8,359 | ) | |||||||||||||
Proceeds received on disposition of vehicles | — | 17 | — | 4,790 | — | 4,807 | |||||||||||||||||
Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party | — | — | — | (22 | ) | — | (22 | ) | |||||||||||||||
— | 16 | (1 | ) | (3,589 | ) | — | (3,574 | ) | |||||||||||||||
Net cash provided by (used in) investing activities | — | (18 | ) | (48 | ) | (3,682 | ) | — | (3,748 | ) | |||||||||||||
Financing activities | |||||||||||||||||||||||
Proceeds from long-term borrowings | — | 81 | — | — | — | 81 | |||||||||||||||||
Payments on long-term borrowings | — | (92 | ) | (1 | ) | (1 | ) | — | (94 | ) | |||||||||||||
Net change in short-term borrowings | — | — | — | (2 | ) | — | (2 | ) | |||||||||||||||
Repurchases of common stock | (78 | ) | — | — | — | — | (78 | ) | |||||||||||||||
Debt financing fees | — | (9 | ) | — | — | — | (9 | ) | |||||||||||||||
Other, net | 2 | (71 | ) | (12 | ) | (12 | ) | 95 | 2 | ||||||||||||||
Net cash provided by (used in) financing activities exclusive of vehicle programs | (76 | ) | (91 | ) | (13 | ) | (15 | ) | 95 | (100 | ) | ||||||||||||
Vehicle programs: | |||||||||||||||||||||||
Proceeds from borrowings | — | — | — | 10,145 | — | 10,145 | |||||||||||||||||
Payments on borrowings | — | (1 | ) | (5 | ) | (7,637 | ) | — | (7,643 | ) | |||||||||||||
Debt financing fees | — | — | — | (13 | ) | — | (13 | ) | |||||||||||||||
— | (1 | ) | (5 | ) | 2,495 | — | 2,489 | ||||||||||||||||
Net cash provided by (used in) financing activities | (76 | ) | (92 | ) | (18 | ) | 2,480 | 95 | 2,389 | ||||||||||||||
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash | — | — | — | (2 | ) | — | (2 | ) | |||||||||||||||
Net decrease in cash and cash equivalents, program and restricted cash | (1 | ) | (3 | ) | — | (236 | ) | — | (240 | ) | |||||||||||||
Cash and cash equivalents, program and restricted cash, beginning of period | 4 | 14 | — | 883 | — | 901 | |||||||||||||||||
Cash and cash equivalents, program and restricted cash, end of period | $ | 3 | $ | 11 | $ | — | $ | 647 | $ | — | $ | 661 |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 9 | $ | (41 | ) | $ | 47 | $ | 1,124 | $ | — | $ | 1,139 | ||||||||||
Investing activities | |||||||||||||||||||||||
Property and equipment additions | — | (22 | ) | (34 | ) | (30 | ) | — | (86 | ) | |||||||||||||
Proceeds received on asset sales | — | 1 | — | 3 | — | 4 | |||||||||||||||||
Net assets acquired (net of cash acquired) | — | — | (4 | ) | (10 | ) | — | (14 | ) | ||||||||||||||
Intercompany loan receipts (advances) | — | — | (1 | ) | (313 | ) | 314 | — | |||||||||||||||
Other, net | 100 | — | — | — | (100 | ) | — | ||||||||||||||||
Net cash provided by (used in) investing activities exclusive of vehicle programs | 100 | (21 | ) | (39 | ) | (350 | ) | 214 | (96 | ) | |||||||||||||
Vehicle programs: | |||||||||||||||||||||||
Investment in vehicles | — | 1 | (2 | ) | (8,115 | ) | — | (8,116 | ) | ||||||||||||||
Proceeds received on disposition of vehicles | — | 31 | — | 5,028 | — | 5,059 | |||||||||||||||||
Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party | — | — | — | (33 | ) | — | (33 | ) | |||||||||||||||
— | 32 | (2 | ) | (3,120 | ) | — | (3,090 | ) | |||||||||||||||
Net cash provided by (used in) investing activities | 100 | 11 | (41 | ) | (3,470 | ) | 214 | (3,186 | ) | ||||||||||||||
Financing activities | |||||||||||||||||||||||
Proceeds from long-term borrowings | — | 325 | — | 264 | — | 589 | |||||||||||||||||
Payments on long-term borrowings | — | (396 | ) | (1 | ) | (194 | ) | — | (591 | ) | |||||||||||||
Net change in short-term borrowings | — | — | — | (1 | ) | — | (1 | ) | |||||||||||||||
Intercompany loan borrowings (payments) | — | 313 | — | 1 | (314 | ) | — | ||||||||||||||||
Repurchases of common stock | (109 | ) | — | — | — | — | (109 | ) | |||||||||||||||
Debt financing fees | — | (3 | ) | — | (5 | ) | — | (8 | ) | ||||||||||||||
Other, net | — | (100 | ) | — | — | 100 | — | ||||||||||||||||
Net cash provided by (used in) financing activities exclusive of vehicle programs | (109 | ) | 139 | (1 | ) | 65 | (214 | ) | (120 | ) | |||||||||||||
Vehicle programs: | |||||||||||||||||||||||
Proceeds from borrowings | — | — | — | 11,255 | — | 11,255 | |||||||||||||||||
Payments on borrowings | — | — | (5 | ) | (8,983 | ) | — | (8,988 | ) | ||||||||||||||
Debt financing fees | — | — | — | (8 | ) | — | (8 | ) | |||||||||||||||
— | — | (5 | ) | 2,264 | — | 2,259 | |||||||||||||||||
Net cash provided by (used in) financing activities | (109 | ) | 139 | (6 | ) | 2,329 | (214 | ) | 2,139 | ||||||||||||||
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash | — | — | — | 36 | — | 36 | |||||||||||||||||
Net increase in cash and cash equivalents, program and restricted cash | — | 109 | — | 19 | — | 128 | |||||||||||||||||
Cash and cash equivalents, program and restricted cash, beginning of period | 3 | 12 | — | 705 | — | 720 | |||||||||||||||||
Cash and cash equivalents, program and restricted cash, end of period | $ | 3 | $ | 121 | $ | — | $ | 724 | $ | — | $ | 848 |
19. | Subsequent Events |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
OVERVIEW |
• | time & mileage fees charged to our customers for vehicle rentals; |
• | payments from our customers with respect to certain operating expenses we incur, including gasoline and vehicle licensing fees, as well as concession fees, which we pay in exchange for the right to operate at airports and certain other locations; and |
• | sales of loss damage waivers and insurance and other supplemental items in conjunction with vehicle rentals. |
• | Our revenues totaled $4.3 billion and increased 5% compared to the six months ended June 30, 2017 due to higher rental volumes and a 3% benefit from currency exchange rate movements. |
• | Our net loss was $61 million, representing a $43 million year-over-year improvement in earnings, and our Adjusted EBITDA was $163 million, representing a $50 million year-over-year increase, driven by higher revenues and Americas’ lower per-unit fleet costs and higher utilization. |
• | We repurchased approximately $67 million of our common stock, reducing our shares outstanding by approximately 1.6 million shares, or 2%. |
• | We amended the terms of our Floating Rate Term Loan due 2022 and our Senior revolving credit facility maturing 2021. We extended our Floating Rate Term Loan maturity term to 2025 and our Senior revolving credit facility maturity to 2023. |
Three Months Ended June 30, | |||||||||||||||||
2018 | 2017 | $ Change | % Change | ||||||||||||||
Revenues | $ | 2,328 | $ | 2,238 | $ | 90 | 4 | % | |||||||||
Expenses | |||||||||||||||||
Operating | 1,175 | 1,108 | (67 | ) | (6 | %) | |||||||||||
Vehicle depreciation and lease charges, net | 591 | 597 | 6 | 1 | % | ||||||||||||
Selling, general and administrative | 321 | 293 | (28 | ) | (10 | %) | |||||||||||
Vehicle interest, net | 80 | 73 | (7 | ) | (10 | %) | |||||||||||
Non-vehicle related depreciation and amortization | 67 | 65 | (2 | ) | (3 | %) | |||||||||||
Interest expense related to corporate debt, net | 49 | 48 | (1 | ) | (2 | %) | |||||||||||
Restructuring and other related charges | 4 | 38 | 34 | 89 | % | ||||||||||||
Transaction-related costs, net | 3 | 5 | 2 | 40 | % | ||||||||||||
Total expenses | 2,290 | 2,227 | (63 | ) | (3 | %) | |||||||||||
Income before income taxes | 38 | 11 | 27 | n/m | |||||||||||||
Provision for income taxes | 12 | 8 | (4 | ) | (50 | %) | |||||||||||
Net income | $ | 26 | $ | 3 | $ | 23 | n/m |
n/m | Not meaningful. |
• | Operating expenses increased to 50.5% of revenue compared to 49.5% during the similar period in 2017, |
• | Vehicle depreciation and lease charges were reduced to 25.4% of revenue compared to 26.7% during the similar period in 2017, primarily due to Americas’ lower per-unit fleet costs and higher utilization. |
• | Selling, general and administrative costs increased to 13.8% of revenue compared to 13.1% during the similar period in 2017, due to higher marketing costs and commissions. |
• | Vehicle interest costs increased to 3.5% of revenue compared to 3.3% during the similar period in 2017. |
Three Months Ended June 30, | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Revenues | Adjusted EBITDA | Revenues | Adjusted EBITDA | |||||||||||||||
Americas | $ | 1,590 | $ | 107 | $ | 1,565 | $ | 96 | ||||||||||
International | 738 | 71 | 673 | 59 | ||||||||||||||
Corporate and Other (a) | — | (17 | ) | — | (15 | ) | ||||||||||||
Total Company | $ | 2,328 | $ | 161 | $ | 2,238 | $ | 140 | ||||||||||
Reconciliation to Adjusted EBITDA | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Net income | $ | 26 | $ | 3 | ||||||||||||||
Provision for income taxes | 12 | 8 | ||||||||||||||||
Income before income taxes | 38 | 11 | ||||||||||||||||
Add: | Non-vehicle related depreciation and amortization | 67 | 65 | |||||||||||||||
Interest expense related to corporate debt, net | 49 | 48 | ||||||||||||||||
Restructuring and other related charges | 4 | 38 | ||||||||||||||||
Transaction-related costs, net (b) | 3 | 5 | ||||||||||||||||
Charges for legal matter, net (c) | — | (27 | ) | |||||||||||||||
Adjusted EBITDA | $ | 161 | $ | 140 |
(a) | Includes unallocated corporate overhead which is not attributable to a particular segment. |
(b) | Primarily comprised of acquisition- and integration-related expenses. |
(c) | Reported within operating expenses in our consolidated condensed results of operations. |
Three Months Ended June 30, | |||||||||||
2018 | 2017 | % Change | |||||||||
Revenues | $ | 1,590 | $ | 1,565 | 2 | % | |||||
Adjusted EBITDA | 107 | 96 | 11 | % |
• | Operating expenses increased to 49.2% of revenue compared to 47.6% during the similar period in 2017, due to recoverable insurance proceeds recognized in connection with an unprecedented personal-injury |
• | Vehicle depreciation and lease charges were reduced to 27.5% of revenue compared to 29.5% during the similar period in 2017, due to lower per-unit fleet costs and higher utilization. |
• | Selling, general and administrative costs increased to 12.3% of revenue compared to 11.3% during the similar period in 2017, due to higher marketing costs and commissions. |
• | Vehicle interest costs increased to 4.3% of revenue compared to 3.8% during the similar period in 2017, primarily due to higher interest rates. |
Three Months Ended June 30, | |||||||||||
2018 | 2017 | % Change | |||||||||
Revenues | $ | 738 | $ | 673 | 10 | % | |||||
Adjusted EBITDA | 71 | 59 | 20 | % |
• | Operating expenses decreased to 52.7% of revenue compared to 53.3% during the similar period in 2017, due to currency hedge gains, partially offset by higher maintenance and damage costs. |
• | Vehicle depreciation and lease charges increased to 20.8% of revenue compared to 20.3% during the similar period in 2017, primarily due to lower revenue per day excluding exchange rate movements. |
• | Selling, general and administrative costs were reduced to 15.2% of revenue compared to 15.6% during the similar period in 2017, due to increased revenues. |
• | Vehicle interest costs were 1.7% of revenue compared to 2.1% during the similar period in 2017. |
Six Months Ended June 30, | |||||||||||||||||
2018 | 2017 | $ Change | % Change | ||||||||||||||
Revenues | $ | 4,296 | $ | 4,077 | $ | 219 | 5 | % | |||||||||
Expenses | |||||||||||||||||
Operating | 2,267 | 2,157 | (110 | ) | (5 | %) | |||||||||||
Vehicle depreciation and lease charges, net | 1,106 | 1,101 | (5 | ) | 0 | % | |||||||||||
Selling, general and administrative | 617 | 555 | (62 | ) | (11 | %) | |||||||||||
Vehicle interest, net | 152 | 137 | (15 | ) | (11 | %) | |||||||||||
Non-vehicle related depreciation and amortization | 128 | 128 | — | 0 | % | ||||||||||||
Interest expense related to corporate debt, net: | |||||||||||||||||
Interest expense | 95 | 97 | 2 | 2 | % | ||||||||||||
Early extinguishment of debt | 5 | 3 | (2 | ) | (67 | %) | |||||||||||
Restructuring and other related charges | 10 | 45 | 35 | 78 | % | ||||||||||||
Transaction-related costs, net | 7 | 8 | 1 | 13 | % | ||||||||||||
Total expenses | 4,387 | 4,231 | (156 | ) | (4 | %) | |||||||||||
Loss before income taxes | (91 | ) | (154 | ) | 63 | 41 | % | ||||||||||
Benefit from income taxes | (30 | ) | (50 | ) | (20 | ) | (40 | %) | |||||||||
Net loss | $ | (61 | ) | $ | (104 | ) | $ | 43 | 41 | % |
• | Operating expenses were 52.8% of revenue compared to 52.9% during the similar period in 2017. |
• | Vehicle depreciation and lease charges decreased to 25.8% of revenue compared to 27.0% during the similar period in 2017, primarily due to the Americas’ lower per-unit fleet costs and higher utilization. |
• | Selling, general and administrative costs increased to 14.4% of revenue compared to 13.6% during the similar period in 2017, primarily due to higher marketing costs and commissions. |
• | Vehicle interest costs were 3.5% of revenue compared to 3.4% during the similar period in 2017. |
Six Months Ended June 30, | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Revenues | Adjusted EBITDA | Revenues | Adjusted EBITDA | |||||||||||||||
Americas | $ | 2,938 | $ | 122 | $ | 2,879 | $ | 76 | ||||||||||
International | 1,358 | 74 | 1,198 | 66 | ||||||||||||||
Corporate and Other (a) | — | (33 | ) | — | (29 | ) | ||||||||||||
Total Company | $ | 4,296 | $ | 163 | $ | 4,077 | $ | 113 | ||||||||||
Reconciliation to Adjusted EBITDA | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Net loss | $ | (61 | ) | $ | (104 | ) | ||||||||||||
Benefit from income taxes | (30 | ) | (50 | ) | ||||||||||||||
Loss before income taxes | (91 | ) | (154 | ) | ||||||||||||||
Add: | Non-vehicle related depreciation and amortization | 128 | 128 | |||||||||||||||
Interest expense related to corporate debt, net | ||||||||||||||||||
Interest expense | 95 | 97 | ||||||||||||||||
Early extinguishment of debt | 5 | 3 | ||||||||||||||||
Non-operational charges related to shareholder activist activity (b) | 9 | — | ||||||||||||||||
Restructuring and other related charges | 10 | 45 | ||||||||||||||||
Transaction-related costs, net (c) | 7 | 8 | ||||||||||||||||
Charges for legal matter, net (d) | — | (14 | ) | |||||||||||||||
Adjusted EBITDA | $ | 163 | $ | 113 |
(a) | Includes unallocated corporate overhead which is not attributable to a particular segment. |
(b) | Reported within selling, general and administrative expenses in our consolidated condensed results of operations. |
(c) | Primarily comprised of acquisition- and integration-related expenses. |
(d) | Reported within operating expenses in our consolidated condensed results of operations. |
Six Months Ended June 30, | |||||||||||
2018 | 2017 | % Change | |||||||||
Revenue | $ | 2,938 | $ | 2,879 | 2 | % | |||||
Adjusted EBITDA | 122 | 76 | 61 | % |
• | Operating expenses decreased to 51.1% of revenue compared to 51.3% during the similar period in 2017. |
• | Vehicle depreciation and lease charges decreased to 28.0% of revenue compared to 29.8% during the similar period in 2017, primarily due to lower per-unit fleet costs and higher utilization. |
• | Selling, general and administrative costs increased to 12.5% of revenue compared to 11.9% during the similar period in 2017, due to higher marketing costs and commissions. |
• | Vehicle interest costs increased to 4.2% of revenue compared to 3.9% during the similar period in 2017, primarily due to higher interest rates. |
Six Months Ended June 30, | |||||||||||
2018 | 2017 | % Change | |||||||||
Revenue | $ | 1,358 | $ | 1,198 | 13 | % | |||||
Adjusted EBITDA | 74 | 66 | 12 | % |
• | Operating expenses were reduced to 55.8% of revenue compared to 56.4% during the similar period in 2017, due to currency hedge gains, partially offset by higher maintenance and damage costs. |
• | Vehicle depreciation and lease charges increased to 20.8% of revenue compared to 20.3% during the similar period in 2017, primarily due to lower revenue per day excluding exchange rate movements. |
• | Selling, general and administrative costs increased to 15.9% of revenue compared to 15.6% during the similar period in 2017, due to higher marketing costs and commissions. |
• | Vehicle interest costs were 2.0% of revenue compared to 2.1% during the similar period in 2017. |
June 30, 2018 | December 31, 2017 | Change | ||||||||||
Total assets exclusive of assets under vehicle programs | $ | 6,193 | $ | 5,820 | $ | 373 | ||||||
Total liabilities exclusive of liabilities under vehicle programs | 6,145 | 5,935 | 210 | |||||||||
Assets under vehicle programs | 14,726 | 11,879 | 2,847 | |||||||||
Liabilities under vehicle programs | 14,402 | 11,191 | 3,211 | |||||||||
Stockholders’ equity | 372 | 573 | (201 | ) |
Six Months Ended June 30, | ||||||||||||
2018 | 2017 | Change | ||||||||||
Cash provided by (used in): | ||||||||||||
Operating activities | $ | 1,121 | $ | 1,139 | $ | (18 | ) | |||||
Investing activities | (3,748 | ) | (3,186 | ) | (562 | ) | ||||||
Financing activities | 2,389 | 2,139 | 250 | |||||||||
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash | (2 | ) | 36 | (38 | ) | |||||||
Net (decrease) increase in cash and cash equivalents, program and restricted cash | (240 | ) | 128 | (368 | ) | |||||||
Cash and cash equivalents, program and restricted cash, beginning of period | 901 | 720 | 181 | |||||||||
Cash and cash equivalents, program and restricted cash, end of period | $ | 661 | $ | 848 | $ | (187 | ) |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
(a) | Disclosure Controls and Procedures. Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of June 30, 2018. |
(b) | Changes in Internal Control Over Financial Reporting. During the fiscal quarter to which this report relates, there has been no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Total Number of Shares Purchased(a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||
April 2018 | — | $ | — | — | $ | 100,501,894 | |||||||
May 2018 | 1,148,192 | 43.11 | 1,148,192 | 51,002,509 | |||||||||
June 2018 | 475,609 | 37.64 | 475,609 | 33,099,564 | |||||||||
Total | 1,623,801 | $ | 41.51 | 1,623,801 | $ | 33,099,564 |
(a) | Excludes, for the three months ended June 30, 2018, 395 shares which were withheld by the Company to satisfy employees’ income tax liabilities attributable to the vesting of restricted stock unit awards. |
Item 6. | Exhibits |
AVIS BUDGET GROUP, INC. | ||||
Date: | August 8, 2018 | |||
/s/ Martyn Smith | ||||
Martyn Smith | ||||
Interim Chief Financial Officer | ||||
Date: | August 8, 2018 | |||
/s/ David T. Calabria | ||||
David T. Calabria | ||||
Senior Vice President and | ||||
Chief Accounting Officer |
Exhibit No. | Description |
3.1 | |
3.2 | |
4.1 | |
10.1 | |
10.2 | |
10.3 | |
10.4 | |
12 | |
31.1 | |
31.2 | |
32 | |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema. |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase. |
101.DEF | XBRL Taxonomy Extension Definition Linkbase. |
101.LAB | XBRL Taxonomy Extension Label Linkbase. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase. |
* | Confidential treatment has been requested for certain portions of this Exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, which portions have been omitted and filed separately with the Securities and Exchange Commission. |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Earnings available to cover fixed charges: | |||||||
Loss before income taxes | $ | (91 | ) | $ | (154 | ) | |
Plus: Fixed charges | 319 | 304 | |||||
Earnings available to cover fixed charges | $ | 228 | $ | 150 | |||
Fixed charges (a): | |||||||
Interest, including amortization of deferred financing costs | $ | 257 | $ | 244 | |||
Interest portion of rental payment | 62 | 60 | |||||
Total fixed charges | $ | 319 | $ | 304 | |||
Ratio of earnings to fixed charges (b) | — | — |
(a) Consists of interest expense on all indebtedness (including amortization of deferred financing costs) and the portion of operating lease rental expense that is representative of the interest factor. Interest expense on all indebtedness is detailed as follows: |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Related to debt under vehicle programs | $ | 155 | $ | 143 | |||
All other | 102 | 101 | |||||
$ | 257 | $ | 244 |
(b) Earnings were not sufficient to cover fixed charges for the six months ended June 30, 2018 and 2017 by $91 million and $154 million, respectively. |
1. | I have reviewed this quarterly report on Form 10-Q of Avis Budget Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Larry D. De Shon |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Avis Budget Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Martyn Smith |
Interim Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ LARRY D. DE SHON |
Larry D. De Shon |
President and Chief Executive Officer |
August 8, 2018 |
/s/ MARTYN SMITH |
Martyn Smith |
Interim Chief Financial Officer |
August 8, 2018 |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 31, 2018 |
|
Document Documentand Entity Information [Abstract] | ||
Document Period End Date | Jun. 30, 2018 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | CAR | |
Entity Registrant Name | AVIS BUDGET GROUP, INC. | |
Entity Central Index Key | 0000723612 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 79,194,210 |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Revenues | ||||
Revenues | $ 2,328 | $ 2,238 | $ 4,296 | $ 4,077 |
Expenses | ||||
Operating | 1,175 | 1,108 | 2,267 | 2,157 |
Vehicle depreciation and lease charges, net | 591 | 597 | 1,106 | 1,101 |
Selling, general and administrative | 321 | 293 | 617 | 555 |
Vehicle interest, net | 80 | 73 | 152 | 137 |
Non-vehicle related depreciation and amortization | 67 | 65 | 128 | 128 |
Interest expense | 49 | 48 | 95 | 97 |
Early extinguishment of debt | 0 | 0 | 5 | 3 |
Restructuring and other related charges | 4 | 38 | 10 | 45 |
Transaction-related costs, net | 3 | 5 | 7 | 8 |
Total expenses | 2,290 | 2,227 | 4,387 | 4,231 |
Income (loss) before income taxes | 38 | 11 | (91) | (154) |
Provision for (benefit from) income taxes | 12 | 8 | (30) | (50) |
Net income (loss) | 26 | 3 | (61) | (104) |
Comprehensive income (loss) | $ (24) | $ 51 | $ (103) | $ (28) |
Earnings (loss) per share | ||||
Basic | $ 0.33 | $ 0.04 | $ (0.75) | $ (1.22) |
Diluted | $ 0.32 | $ 0.04 | $ (0.75) | $ (1.22) |
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10 | 10 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250 | 250 |
Common stock, shares issued | 137 | 137 |
Treasury stock, shares | 57 | 56 |
Basis of Presentation and Recently Issued Accounting Pronouncements |
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Basis Of Presentation And Recently Issued Accounting Pronouncements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation Avis Budget Group, Inc. provides vehicle rental and other mobility solutions to businesses and consumers worldwide. The accompanying unaudited Consolidated Condensed Financial Statements include the accounts and transactions of Avis Budget Group, Inc. and its subsidiaries, as well as entities in which Avis Budget Group, Inc. directly or indirectly has a controlling financial interest (collectively, the “Company”), and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial reporting. The Company operates the following reportable business segments:
The operating results of acquired businesses are included in the accompanying Consolidated Condensed Financial Statements from the dates of acquisition. The fair value of the assets acquired and liabilities assumed in connection with the Company’s fourth quarter 2017 acquisitions of ACL Hire Limited and various licensees in Europe and North America have not yet been finalized; however, there have been no significant changes to the preliminary allocation of the purchase price during the six months ended June 30, 2018. In presenting the Consolidated Condensed Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the Consolidated Condensed Financial Statements contain all adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These financial statements should be read in conjunction with the Company’s 2017 Form 10-K. Summary of Significant Accounting Policies The Company’s significant accounting policies are fully described in Note 2, “Summary of Significant Accounting Policies,” in the Company’s Annual Report on Form 10-K for fiscal year 2017. Reclassifications. Certain reclassifications have been made to prior years’ Consolidated Condensed Financial Statements to conform to the current year presentation. These reclassifications have no impact on reported net income (loss) (see “Adoption of New Accounting Pronouncements” below). As of December 31, 2017, the Company elected to adopt the provisions of ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” early on a retrospective basis. ASU 2016-18 clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows. The following table provides the impact of adoption on the Company’s Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2017.
Restricted Cash. Program cash primarily represents amounts specifically designated to purchase assets under vehicle programs and/or to repay the related debt, as such the Company considers it a restricted cash equivalent. The following table provides a reconciliation of cash and cash equivalents, program and restricted cash reported within the Consolidated Condensed Balance Sheets to the amounts shown in the Consolidated Condensed Statements of Cash Flows.
________
Vehicle Programs. The Company presents separately the financial data of its vehicle programs. These programs are distinct from the Company’s other activities since the assets under vehicle programs are generally funded through the issuance of debt that is collateralized by such assets. The income generated by these assets is used, in part, to repay the principal and interest associated with the debt. Cash inflows and outflows relating to the acquisition of such assets and the principal debt repayment or financing of such assets are classified as activities of the Company’s vehicle programs. The Company believes it is appropriate to segregate the financial data of its vehicle programs because, ultimately, the source of repayment of such debt is the realization of such assets. Transaction-related costs, net. Transaction-related costs, net are classified separately in the Consolidated Condensed Statements of Comprehensive Income. These costs are comprised of expenses related to acquisition-related activities such as due diligence and other advisory costs, expenses related to the integration of the acquiree’s operations with those of the Company, including the implementation of best practices and process improvements, non-cash gains and losses related to re-acquired rights, expenses related to pre-acquisition contingencies and contingent consideration related to acquisitions. Currency Transactions. The Company records the gain or loss on foreign-currency transactions on certain intercompany loans and the gain or loss on intercompany loan hedges within interest expense related to corporate debt, net. During the three and six months ended June 30, 2018 and 2017, the Company recorded an immaterial amount in each period. Adoption of New Accounting Pronouncements Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income On January 1, 2018, as a result of a new accounting pronouncement, the Company early adopted ASU 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for the adjustment of deferred taxes due to the reduction of the corporate income tax rate as a result of U.S. tax reform. Accordingly, the Company has reclassified $4 million of net tax benefits from accumulated other comprehensive loss to beginning accumulated deficit related to the following (see Note 14 - Stockholders’ Equity). Prior period amounts have not been retrospectively adjusted.
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Costs and Net Periodic Postretirement Benefit Cost,” which requires an entity to disaggregate the components of net benefit cost recognized in its consolidated statements of operations. The adoption of this accounting pronouncement did not have a material impact on the Company’s Consolidated Condensed Financial Statements. Recognition and Measurement of Financial Assets and Financial Liabilities On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which makes limited amendments to the classification and measurement of financial instruments. The amendments supersede the guidance to classify equity securities with readily determinable fair values into different categories (trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income. Accordingly, the Company has reclassified $2 million of net unrealized gains associated with available for sale equity securities from accumulated other comprehensive loss to beginning accumulated deficit (see Note 14 - Stockholders’ Equity). This ASU has no impact on the Company’s accounting for equity method investments. Intra-Entity Transfers of Assets Other Than Inventory On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which removes the prohibition in Topic 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The adoption of this accounting pronouncement did not have an impact on the Company’s Consolidated Condensed Financial Statements. Revenue from Contracts with Customers On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which outlines a single model for entities to use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance. The new guidance applies to all contracts with customers except for leases, insurance contracts, financial instruments, certain nonmonetary exchanges and certain guarantees. Also, additional disclosures are required about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The Company has adopted the requirements of the new standard on a modified retrospective basis applied to all contracts. Prior periods have not been retrospectively adjusted. As discussed in Leases below, the Company’s rental related revenues will be accounted for under Topic 606 until the adoption of ASU 2016-02, “Leases (Topic 842)” on January 1, 2019. Under Topic 606, each transaction that generates customer loyalty points results in the deferral of revenue generally equivalent to the estimated retail value of points expected to be redeemed. The associated revenue will be recognized at the time the customer redeems the loyalty points. Previously, the Company did not defer revenue and recorded an expense associated with the incremental cost of providing the future rental at the time when the loyalty points were earned. In the Company’s Consolidated Condensed Balance Sheet at January 1, 2018, customer loyalty program liability increased approximately $50 million related to the estimated retail value of customer loyalty points earned, with a corresponding increase to accumulated deficit (approximately $40 million, net of tax) due to the cumulative impact of adopting Topic 606. Certain customers may receive cash-based rebates, which are accounted for as variable consideration under Topic 606. The Company estimates these rebates based on the expected amount to be provided to customers and reduces revenue recognized. The impact of adoption of Topic 606 on the Company’s Consolidated Condensed Statement of Comprehensive Income for the three months ended June 30, 2018 was not material. The impact of adoption of Topic 606 on the Company’s Consolidated Condensed Statement of Comprehensive Income for the six months ended June 30, 2018 and Consolidated Condensed June 30, 2018 Balance Sheet was as follows:
Recently Issued Accounting Pronouncements Nonemployee Share-Based Payment Accounting In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, “Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 becomes effective for the Company on January 1, 2019. Early adoption is permitted. The adoption of this accounting pronouncement is not expected to have an impact on the Company's Consolidated Condensed Financial Statements. Accounting for Hedging Activities In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” which amends the existing guidance to allow companies to more accurately present the economic results of an entity’s risk management activities in the financial statements. ASU 2017-12 becomes effective for the Company on January 1, 2019. Early adoption is permitted. The Company is currently evaluating the effect of this accounting pronouncement on its Consolidated Condensed Financial Statements. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which sets forth a current expected credit loss impairment model for financial assets that replaces the current incurred loss model. This model requires a financial asset (or group of financial assets), including trade receivables, measured at amortized cost to be presented at the net amount expected to be collected with an allowance for credit losses deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. ASU 2016-13 becomes effective for the Company on January 1, 2020. Early adoption is permitted as of January 1, 2019. The adoption of this accounting pronouncement is not expected to have a material impact on the Company's Consolidated Condensed Financial Statements. Leases In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which requires a lessee to recognize all long-term leases on its balance sheet as a liability for its lease obligation, measured at the present value of lease payments not yet paid, and a corresponding asset representing its right to use the underlying asset over the lease term and expands disclosure of key information about leasing arrangements. The ASU does not significantly change a lessee’s recognition, measurement and presentation of expenses and cash flows. Additionally, ASU 2016-02 aligns key aspects of lessor accounting with the new revenue recognition guidance in Topic 606 (see Revenue from Contracts with Customers above). In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach which includes a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which provides an additional transition method allowing entities to only apply the new lease standard in the year of adoption. Additionally, ASU 2018-11 provides a practical expedient for lessors to combine nonlease components with related lease components if certain conditions are met. These ASUs become effective for the Company on January 1, 2019. Early adoption is permitted. The Company is in the process of evaluating and planning for the implementation of these ASUs, including assessing its overall impact, and expects most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption, which will materially increase total assets and total liabilities relative to such amounts prior to adoption. The Company has determined portions of its vehicle rental contracts that convey the right to control the use of identified assets are within the scope of the accounting guidance contained in these ASUs. As discussed in Revenue from Contracts with Customers above, the Company’s rental related revenues are accounted for under the revenue accounting standard Topic 606, until the adoption of this lease accounting standard Topic 842 on January 1, 2019. Income Taxes In January 2018, the FASB issued FASB Staff Question and Answer Topic 740, No. 5: Accounting for Global Intangible Low-Taxed Income (“GILTI”), which provides guidance on accounting for the GILTI provisions of the U.S. enacted tax reform legislation (“the Tax Act”). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance allows accounting for tax on GILTI to be treated as a deferred tax item or as a component of current period income tax expense in the year incurred, subject to an accounting policy election. The Company will complete its analysis in a subsequent period not to exceed one year from the date of the enactment of the Tax Act and will elect an accounting policy at such time. |
Revenues |
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Revenues [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues [Text Block] | Revenues The following table presents the Company’s revenues disaggregated by geography.
The following table presents the Company’s revenues disaggregated by brand.
________ Other includes Zipcar, Payless, Apex, Maggiore and FranceCars. The Company derives revenues primarily by providing vehicle rentals and other related products and mobility services to commercial and leisure customers, as well as through licensing of its rental systems. Other related products and mobility services include sales of collision and loss damage waivers under which a customer is relieved from financial responsibility arising from vehicle damage incurred during the rental; products and services for driving convenience such as fuel service options, chauffeur drive services, roadside safety net, electronic toll collection, tablet rentals, access to satellite radio, portable navigation units and child safety seat rentals; and rentals of other supplemental items including automobile towing equipment and other moving accessories and supplies. The Company also receives payment from customers for certain operating expenses that it incurs, including airport concession fees that are paid by the Company in exchange for the right to operate at airports and other locations, as well as vehicle licensing fees. In addition, the Company collects membership fees in connection with its car sharing business. Revenue is recognized when obligations under the terms of a contract with the customer are satisfied; generally this occurs evenly over the contract (over time); when control of the promised products or services is transferred to the customer. Revenue is measured as the amount of consideration the Company expects to be entitled to receive in exchange for transferring products or services. Certain customers may receive cash-based rebates, which are accounted for as variable consideration. The Company estimates these rebates based on the expected amount to be provided to customers and reduces revenue recognized. Vehicle rental and rental-related revenues are recognized evenly over the period of rental. Licensing revenues principally consist of royalties paid by the Company’s licensees and are recorded as the licensees’ revenues are earned (over the rental period). The Company renews license agreements in the normal course of business and occasionally terminates, purchases or sells license agreements. In connection with ongoing fees that the Company receives from its licensees pursuant to license agreements, the Company is required to provide certain services, such as training, marketing and the operation of reservation systems. Revenues and expenses associated with gasoline, airport concessions and vehicle licensing are recorded on a gross basis within revenues and operating expenses. Membership fees related to the Company’s car sharing business are generally nonrefundable, are deferred and recognized ratably over the period of membership. Contract Liabilities The Company records deferred revenues when cash payments are received in advance of satisfying its performance obligations, including amounts that are refundable. In addition, certain customers earn loyalty points on rentals, for which the Company defers a portion of its rental revenues generally equivalent to the estimated retail value of points expected to be redeemed. The Company estimates points that will never be redeemed based upon actual redemption and expiration patterns. Currently loyalty points expire at the earlier of 12 months of member inactivity or five years from when they were earned. Future changes to expiration assumptions or expiration policy, or to program rules, may result in changes to deferred revenue as well as recognized revenues from the program. The following table presents changes in the Company’s contract liabilities during the six months ended June 30, 2018.
________
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Restructuring |
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Restructuring Activities | Restructuring and Other Related Charges Restructuring During first quarter 2018, the Company initiated a strategic restructuring plan to improve processes and reduce headcount in response to its new workforce planning technology that allows more effective management of staff levels (“Workforce planning”). During the six months ended June 30, 2018, as part of this process, the Company formally communicated the termination of employment to 91 employees, and as of June 30, 2018, the Company had terminated the employment of 87 of these employees. The costs associated with this initiative primarily represent severance, outplacement services and other costs associated with employee terminations, the majority of which have been or are expected to be settled in cash. The Company expects further restructuring expense of approximately $11 million related to this initiative to be incurred in 2018. During fourth quarter 2017, the Company initiated a strategic restructuring initiative to better position its truck rental operations in the U.S., in which it closed certain rental locations and reduced the size of the older rental fleet, with the intent to increase fleet utilization and reduce vehicle and overhead costs (“Truck initiative”). The Company expects further restructuring expense of approximately $1 million related to this initiative to be incurred in 2018. During first quarter 2017, the Company initiated a strategic restructuring initiative to drive operational efficiency throughout the organization by reducing headcount, improving processes and consolidating functions, closing certain rental locations and decreasing the size of its fleet (“T17”). As of June 30, 2018, the Company had terminated the employment of 673 employees related to this initiative. The costs associated with this initiative primarily represent severance, outplacement services and other costs associated with employee terminations, the majority of which have been or are expected to be settled in cash. This initiative is substantially complete. The following tables summarize the changes to our restructuring-related liabilities and identify the amounts recorded within the Company’s reporting segments for restructuring charges and corresponding payments and utilizations:
__________
Other Related Charges Officer Separation Costs On May 12, 2017, the Company announced the resignation of David B. Wyshner as the Company’s President and Chief Financial Officer. In connection with Mr. Wyshner’s departure, the Company recorded other related charges of $7 million during the three and six months ended June 30, 2017, inclusive of accelerated stock-based compensation expense of $2 million. Limited Voluntary Opportunity Plans (“LVOP”) During 2017, the Company offered voluntary termination programs to certain employees in the Americas’ field operations, shared services, and general and administrative functions for a limited time. These employees, if qualified, elected resignation from employment in return for enhanced severance benefits to be settled in cash. During the three and six months ended June 30, 2017, the Company recorded other related charges of $14 million. As of June 30, 2018, 358 qualified employees elected to participate in the plans and the employment of all participants had been terminated. |
Earnings Per Share |
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Earnings Per Share | Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (“EPS”) (shares in millions):
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Other Investments |
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Jun. 30, 2018 | |
Other Investments [Abstract] | |
Other Investments [Text Block] | Other Investments In March 2018, the Company made an initial equity investment of €15 million ($19 million) in its licensee in Greece (“Greece”), for a 20% ownership stake. In connection with this investment, the Company entered into an agreement to purchase an additional 20% equity interest, 10% in March 2019 and 10% in March 2020, for €15 million. In June 2018, the Company completed its purchase of the additional 20% equity investment for €16 million ($18 million), including an acceleration premium, and as of June 30, 2018, had a 40% ownership stake in Greece. The Company’s equity investment is recorded within other non-current assets. The Company’s share of Greece’s results are reported within operating expenses and are not material for the three and six months ended June 30, 2018. |
Other Current Assets |
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Other Current Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Assets [Text Block] | Other Current Assets Other current assets consisted of:
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Intangible Assets |
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Intangible Assets | Intangible Assets Intangible assets consisted of:
_________
For the three months ended June 30, 2018 and 2017, amortization expense related to amortizable intangible assets was approximately $19 million and $16 million, respectively. For the six months ended June 30, 2018 and 2017, amortization expense related to amortizable intangible assets was approximately $33 million and $31 million, respectively. Based on the Company’s amortizable intangible assets at June 30, 2018, the Company expects amortization expense of approximately $37 million for the remainder of 2018, $50 million for 2019, $43 million for 2020, $30 million for 2021, $24 million for 2022 and $21 million for 2023, excluding effects of currency exchange rates. |
Vehicle Rental Activities |
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Vehicle Rental Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vehicle Rental Activities | Vehicle Rental Activities The components of vehicles, net within assets under vehicle programs were as follows:
The components of vehicle depreciation and lease charges, net are summarized below:
At June 30, 2018 and 2017, the Company had payables related to vehicle purchases included in liabilities under vehicle programs - other of $856 million and $658 million, respectively, and receivables related to vehicle sales included in assets under vehicle programs - receivables from vehicle manufacturers and other of $248 million and $235 million, respectively. |
Income Taxes |
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Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes The Company’s effective tax rate for the six months ended June 30, 2018 is a benefit of 33.0%. Such rate differed from the Federal statutory rate of 21.0% primarily due to U.S. and foreign taxes on our international operations and state taxes. Tax benefits associated with stock-based compensation increased the benefit for income taxes recorded in the current period. The Company’s effective tax rate for the six months ended June 30, 2017 was a benefit of 32.5%. Such rate differed from the Federal statutory rate of 35.0% primarily due to foreign taxes as a result of the mix of the Company’s earnings between the U.S. and foreign jurisdictions. The Company has not finalized the accounting for the effects of the Tax Act due to the complex analysis necessary to determine the historical earnings of foreign subsidiaries, the ability to utilize tax attributes such as foreign tax credits, and the impact of the repeal of the like-kind exchange provision for personal property together with the corresponding impact on deferred tax components and valuation allowances. Therefore, during the six months ended June 30, 2018, the Company has not recorded any adjustments to the provisional amounts recorded in 2017. Any adjustments to the provisional amounts recorded in 2017 will be recorded when the Company finalizes its accounting of the tax effects within a subsequent measurement period that will not exceed one year from the date of the enactment of the Tax Act. The Company continues to evaluate whether or not to continue to assert indefinite reinvestment on a part or all of its undistributed foreign earnings. This requires the Company to analyze its global working capital and cash requirements in light of the Tax Act and the potential tax liabilities attributable to a repatriation to the U.S., such as foreign withholding taxes and U.S. tax on currency transaction gains or losses. The Company did not record any deferred taxes attributable to its investments in its foreign subsidiaries. The Company will record the tax effects of any change in its assertion within a subsequent measurement period that will not exceed one year from the date of the enactment of the Tax Act. |
Accounts Payable and Other Current Liabilities |
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Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | Accounts Payable and Other Current Liabilities Accounts payable and other current liabilities consisted of:
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Long-term Debt and Borrowing Arrangements |
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Long-term Debt and Borrowing Arrangements | Long-term Corporate Debt and Borrowing Arrangements Long-term corporate debt and borrowing arrangements consisted of:
__________
In February 2018, the Company amended the terms of its Floating Rate Term Loan due 2022 and extended its maturity term to 2025. Committed Credit Facilities and Available Funding Arrangements At June 30, 2018, the committed corporate credit facilities available to the Company and/or its subsidiaries were as follows:
__________
In February 2018, the Company amended the terms of its Senior revolving credit facility maturing 2021 and extended its maturity to 2023. At June 30, 2018, the Company had various uncommitted credit facilities available, under which it had drawn approximately $1 million, which bear interest at rates between 0.74% and 1.54%. Debt Covenants The agreements governing the Company’s corporate indebtedness contain restrictive covenants, including restrictions on dividends paid to the Company by certain of its subsidiaries, the incurrence of additional indebtedness by the Company and certain of its subsidiaries, acquisitions, mergers, liquidations, and sale and leaseback transactions. As of June 30, 2018, the Company was in compliance with the financial covenants governing its indebtedness. |
Debt Under Vehicle Programs and Borrowing Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Under Vehicle Programs and Borrowing Arrangements | Debt Under Vehicle Programs and Borrowing Arrangements Debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding (AESOP) LLC (“Avis Budget Rental Car Funding”), consisted of:
__________
In April 2018, the Company’s Avis Budget Rental Car Funding subsidiary issued approximately $400 million in asset-backed notes with an expected final payment date of September 2023. The weighted average interest rate was 4%. The Company used the proceeds from these borrowings to fund the repayment of maturing vehicle-backed debt and the acquisition of rental cars in the United States. In June 2018, the Company increased its capacity under the European rental fleet securitization program by €150 million (approximately $175 million) to €1.8 billion (approximately $2.1 billion) and extended its maturity to 2021. The Company used the proceeds to finance fleet purchases for certain of the Company’s European operations. Debt Maturities The following table provides the contractual maturities of the Company’s debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding, at June 30, 2018.
Committed Credit Facilities and Available Funding Arrangements As of June 30, 2018, available funding under the Company’s vehicle programs, including related party debt due to Avis Budget Rental Car Funding, consisted of:
__________
Debt Covenants The agreements under the Company’s vehicle-backed funding programs contain restrictive covenants, including restrictions on dividends paid to the Company by certain of its subsidiaries and restrictions on indebtedness, mergers, liens, liquidations, and sale and leaseback transactions and in some cases also require compliance with certain financial requirements. As of June 30, 2018, the Company is not aware of any instances of non-compliance with any of the financial covenants contained in the debt agreements under its vehicle-backed funding programs. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contingencies In 2006, the Company completed the spin-offs of its Realogy and Wyndham subsidiaries. The Company does not believe that the impact of any resolution of pre-existing contingent liabilities in connection with the spin-offs should result in a material liability to the Company in relation to its consolidated financial position or liquidity, as Realogy and Wyndham each have agreed to assume responsibility for these liabilities. The Company is also named in litigation that is primarily related to the businesses of its former subsidiaries, including Realogy and Wyndham. The Company is entitled to indemnification from such entities for any liability resulting from such litigation. In February 2017, following a state court trial in Georgia, a jury found the Company liable for damages in a case brought by a plaintiff who was injured in a vehicle accident allegedly caused by an employee of an independent contractor of the Company who was acting outside of the scope of employment. In March 2017, the Company was also found liable for damages in a companion case arising from the same incident. The Company considers the attribution of liability to the Company, and the amount of damages awarded, to be unsupported by the facts of these cases and intends to appeal the verdicts. The Company has recognized a liability for the expected loss related to these cases, net of recoverable insurance proceeds, of approximately $12 million. The Company is involved in claims, legal proceedings and governmental inquiries that are incidental to its vehicle rental and car sharing operations, including, among others, contract and licensee disputes, competition matters, employment and wage-and-hour claims, insurance and liability claims, intellectual property claims, business practice disputes and other regulatory, environmental, commercial and tax matters. Litigation is inherently unpredictable and, although the Company believes that its accruals are adequate and/or that it has valid defenses in these matters, unfavorable resolutions could occur. The Company estimates that the potential exposure resulting from adverse outcomes of legal proceedings in which it is reasonably possible that a loss may be incurred could, in the aggregate, be up to approximately $50 million in excess of amounts accrued as of June 30, 2018. The Company does not believe that the impact should result in a material liability to the Company in relation to its consolidated financial condition or results of operations. Commitments to Purchase Vehicles The Company maintains agreements with vehicle manufacturers under which the Company has agreed to purchase approximately $2.8 billion of vehicles from manufacturers over the next 12 months financed primarily through the issuance of vehicle-backed debt and cash received upon the disposition of vehicles. Certain of these commitments are subject to the vehicle manufacturers’ satisfying their obligations under their respective repurchase and guaranteed depreciation agreements. Concentrations Concentrations of credit risk at June 30, 2018 include (i) risks related to the Company’s repurchase and guaranteed depreciation agreements with domestic and foreign car manufacturers, primarily with respect to receivables for program cars that have been disposed but for which the Company has not yet received payment from the manufacturers and (ii) risks related to Realogy and Wyndham, including receivables of $23 million and $14 million, respectively, related to certain contingent, income tax and other corporate liabilities assumed by Realogy and Wyndham in connection with their disposition. |
Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity Stockholder Rights Plan In January 2018, the Company’s Board of Directors authorized the adoption of a short-term stockholder rights plan. Effective April 16, 2018 the Company terminated the rights plan. Pursuant to the rights plan, the Company declared a dividend of one preferred share purchase right for each outstanding share of common stock, payable to holders of record as of the close of business on January 26, 2018. Each right, which was exercisable only in the event any person or group were to acquire beneficial ownership of 15% or more of the Company’s outstanding common stock (with certain limited exceptions), would have entitled any holder other than the person or group whose ownership position had exceeded the ownership limit to purchase common stock having a value equal to twice the $100 exercise price of the right, or, at the election of the Board of Directors, to exchange each right for one share of common stock (subject to adjustment). On April 16, 2018, the Company also entered into a new cooperation agreement with SRS Investment Management LLC and certain of its affiliates. Share Repurchases The Company’s Board of Directors has authorized the repurchase of up to $1.5 billion of its common stock under a plan originally approved in 2013 and subsequently expanded, most recently in 2016. During the six months ended June 30, 2018, the Company repurchased approximately 1.6 million shares of common stock at a cost of approximately $67 million under the program. During the six months ended June 30, 2017, the Company repurchased approximately 3.4 million shares of common stock at a cost of approximately $100 million under the program. As of June 30, 2018, approximately $33 million of authorization remains available to repurchase common stock under this plan. In August 2018, the Company’s Board of Directors increased the Company’s share repurchase program authorization by $250 million. Total Comprehensive Income (Loss) Comprehensive income consists of net income and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net income. The components of other comprehensive income (loss) were as follows:
__________ Currency translation adjustments exclude income taxes related to indefinite investments in foreign subsidiaries (See Note 9 - Income Taxes). Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) were as follows:
__________ All components of accumulated other comprehensive income (loss) are net of tax, except currency translation adjustments, which exclude income taxes related to indefinite investments in foreign subsidiaries and include a $53 million gain, net of tax, as of June 30, 2018 related to the Company’s hedge of its net investment in euro-denominated foreign operations (see Note 16 - Financial Instruments).
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Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company recorded stock-based compensation expense of $7 million and $4 million ($5 million and $3 million, net of tax) during the three months ended June 30, 2018 and 2017, respectively, and $12 million and $5 million ($9 million and $3 million, net of tax) during the six months ended June 30, 2018 and 2017, respectively. The activity related to restricted stock units (“RSUs”) consisted of (in thousands of shares):
__________
The stock option activity consisted of (in thousands of shares):
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Financial Instruments |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments Derivative Instruments and Hedging Activities Currency Risk. The Company uses currency exchange contracts to manage its exposure to changes in currency exchange rates associated with certain of its non-U.S.-dollar denominated receivables and forecasted royalties, forecasted earnings of non-U.S. subsidiaries and forecasted non-U.S.-dollar denominated acquisitions. The Company primarily hedges a portion of its current-year currency exposure to the Australian, Canadian and New Zealand dollars, the euro and the British pound sterling. The majority of forward contracts do not qualify for hedge accounting treatment. The fluctuations in the value of these forward contracts do, however, largely offset the impact of changes in the value of the underlying risk they economically hedge. Forward contracts used to hedge forecasted third-party receipts and disbursements up to 12 months are designated and do qualify as cash flow hedges. The Company has designated its euro-denominated notes as a hedge of its investment in euro-denominated foreign operations. The amount of gains or losses reclassified from other comprehensive income (loss) to earnings resulting from ineffectiveness or from excluding a component of the hedges’ gain or loss from the effectiveness calculation for cash flow and net investment hedges during the three and six months ended June 30, 2018 and 2017 was not material, nor is the amount of gains or losses the Company expects to reclassify from accumulated other comprehensive income (loss) to earnings over the next 12 months. Interest Rate Risk. The Company uses various hedging strategies including interest rate swaps and interest rate caps to create what it deems an appropriate mix of fixed and floating rate assets and liabilities. The Company uses interest rate swaps and interest rate caps to manage the risk related to its floating rate corporate debt and its floating rate vehicle-backed debt. The Company records the effective portion of changes in the fair value of its cash flow hedges to other comprehensive income (loss), net of tax, and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized. The Company records the gains or losses related to freestanding derivatives, which are not designated as a hedge for accounting purposes, in its Consolidated Condensed Statements of Comprehensive Income. The changes in fair values of hedges that are determined to be ineffective are immediately reclassified from accumulated other comprehensive income (loss) into earnings. The amount of gains or losses reclassified from other comprehensive income (loss) to earnings resulting from ineffectiveness related to the Company’s cash flow hedges was not material during the three and six months ended June 30, 2018 and 2017. The Company estimates that $5 million of gains currently recorded in accumulated other comprehensive income (loss) will be recognized in earnings over the next 12 months. The Company enters into derivative commodity contracts to manage its exposure in the U.S. to changes in the price of unleaded gasoline. Changes in the fair value of these derivatives are recorded within operating expenses. The Company held derivative instruments with absolute notional values as follows:
__________
Estimated fair values (Level 2) of derivative instruments were as follows:
__________ Amounts in this table exclude derivatives issued by Avis Budget Rental Car Funding; however, certain amounts related to the derivatives held by Avis Budget Rental Car Funding are included within accumulated other comprehensive income (loss).
The effects of derivatives recognized in the Company’s Consolidated Condensed Financial Statements were as follows:
__________
Debt Instruments The carrying amounts and estimated fair values (Level 2) of debt instruments were as follows:
__________
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Segment Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company’s chief operating decision-maker assesses performance and allocates resources based upon the separate financial information from each of the Company’s operating segments. In identifying its reportable segments, the Company considered the nature of services provided, the geographical areas in which the segments operated and other relevant factors. The Company aggregates certain of its operating segments into its reportable segments. Management evaluates the operating results of each of its reportable segments based upon revenues and “Adjusted EBITDA,” which the Company defines as income 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 legal matters, non-operational charges related to shareholder activist activity and income taxes. Net charges for unprecedented personal-injury legal matters are recorded within operating expenses in the Company’s Consolidated Condensed Statement of Comprehensive Income. The Company has revised its definition of Adjusted EBITDA to exclude non-operational charges related to shareholder activist activity. Non-operational charges related to shareholder activist activity include third party advisory, legal and other professional service fees and are recorded within selling, general and administrative expenses in the Company’s Consolidated Condensed Statement of Comprehensive Income. The Company did not revise prior years’ Adjusted EBITDA amounts because there were no costs similar in nature to these costs. The Company’s presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.
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Since December 31, 2017, there have been no significant changes in segment assets exclusive of assets under vehicle programs. As of June 30, 2018 and December 31, 2017, Americas assets under vehicle programs were approximately $11.0 billion and $9.0 billion, respectively, due to seasonality. As of June 30, 2018 and December 31, 2017, International assets under vehicle programs were approximately $3.7 billion and $2.9 billion, respectively, due to seasonality. |
Guarantor and Non-Guarantor Consolidating Condensed Financial Statements |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Text Block] | Guarantor and Non-Guarantor Consolidating Condensed Financial Statements The following consolidating financial information presents Consolidating Condensed Statements of Comprehensive Income for the three and six months ended June 30, 2018 and 2017, Consolidating Condensed Balance Sheets as of June 30, 2018 and December 31, 2017, and Consolidating Condensed Statements of Cash Flows for the six months ended June 30, 2018 and 2017 for: (i) Avis Budget Group, Inc. (the “Parent”); (ii) ABCR and Avis Budget Finance, Inc. (the “Subsidiary Issuers”); (iii) the guarantor subsidiaries; (iv) the non-guarantor subsidiaries; (v) elimination entries necessary to consolidate the Parent with the Subsidiary Issuers, and the guarantor and non-guarantor subsidiaries; and (vi) the Company on a consolidated basis. The Subsidiary Issuers and the guarantor and non-guarantor subsidiaries are 100% owned by the Parent, either directly or indirectly. All guarantees are full and unconditional and joint and several. This financial information is being presented in relation to the Company’s guarantee of the payment of principal, premium (if any) and interest on the notes issued by the Subsidiary Issuers. See Note 11 - Long-term Corporate Debt and Borrowing Arrangements for additional description of these guaranteed notes. The Senior Notes are guaranteed by the Parent and certain subsidiaries. Investments in subsidiaries are accounted for using the equity method of accounting for purposes of the consolidating presentation. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions. For purposes of the accompanying Consolidating Condensed Statements of Comprehensive Income, certain expenses incurred by the Subsidiary Issuers are allocated to the guarantor and non-guarantor subsidiaries. The following tables provide the impact of adoption of ASU 2016-18 on the Company’s Consolidating Condensed Statements of Cash Flows for the six months ended June 30, 2017.
The following table provides a reconciliation of the cash and cash equivalents, program and restricted cash reported within the Consolidating Condensed Balance Sheets to the amounts shown in the Consolidating Condensed Statements of Cash Flows.
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Consolidating Condensed Statements of Comprehensive Income Three Months Ended June 30, 2018
Six Months Ended June 30, 2018
Three Months Ended June 30, 2017
Six Months Ended June 30, 2017
Consolidating Condensed Balance Sheets As of June 30, 2018
As of December 31, 2017
Consolidating Condensed Statements of Cash Flows Six Months Ended June 30, 2018
Six Months Ended June 30, 2017
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Subsequent Events |
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Subsequent Event [Line Items] | |||||
Subsequent Events [Text Block] |
In July 2018, the Company completed the acquisition of Morini S.p.A., a provider of vehicles primarily in Northern Italy, for approximately €35 million (approximately $41 million) plus potential earn-out payments of €5 million (approximately $6 million) based on Morini S.p.A.’s performance over the next two years. In August 2018, the Company’s Board of Directors increased the Company’s share repurchase program authorization by $250 million. * * * * |
Basis of Presentation and Recently Issued Accounting Pronouncements (Policies) |
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Basis Of Presentation And Recently Issued Accounting Pronouncements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation Avis Budget Group, Inc. provides vehicle rental and other mobility solutions to businesses and consumers worldwide. The accompanying unaudited Consolidated Condensed Financial Statements include the accounts and transactions of Avis Budget Group, Inc. and its subsidiaries, as well as entities in which Avis Budget Group, Inc. directly or indirectly has a controlling financial interest (collectively, the “Company”), and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial reporting. The Company operates the following reportable business segments:
The operating results of acquired businesses are included in the accompanying Consolidated Condensed Financial Statements from the dates of acquisition. The fair value of the assets acquired and liabilities assumed in connection with the Company’s fourth quarter 2017 acquisitions of ACL Hire Limited and various licensees in Europe and North America have not yet been finalized; however, there have been no significant changes to the preliminary allocation of the purchase price during the six months ended June 30, 2018. In presenting the Consolidated Condensed Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the Consolidated Condensed Financial Statements contain all adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These financial statements should be read in conjunction with the Company’s 2017 Form 10-K. |
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Reclassification, Policy [Policy Text Block] | Reclassifications. Certain reclassifications have been made to prior years’ Consolidated Condensed Financial Statements to conform to the current year presentation. These reclassifications have no impact on reported net income (loss) (see “Adoption of New Accounting Pronouncements” below). |
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Cash Flows reconciliation (2016-18) [Table Text Block] | As of December 31, 2017, the Company elected to adopt the provisions of ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” early on a retrospective basis. ASU 2016-18 clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows. The following table provides the impact of adoption on the Company’s Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2017.
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Reconciliation of cash and cash equivalents (2016-18) [Table Text Block] | Restricted Cash. Program cash primarily represents amounts specifically designated to purchase assets under vehicle programs and/or to repay the related debt, as such the Company considers it a restricted cash equivalent. The following table provides a reconciliation of cash and cash equivalents, program and restricted cash reported within the Consolidated Condensed Balance Sheets to the amounts shown in the Consolidated Condensed Statements of Cash Flows.
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Vehicle Programs | Vehicle Programs. The Company presents separately the financial data of its vehicle programs. These programs are distinct from the Company’s other activities since the assets under vehicle programs are generally funded through the issuance of debt that is collateralized by such assets. The income generated by these assets is used, in part, to repay the principal and interest associated with the debt. Cash inflows and outflows relating to the acquisition of such assets and the principal debt repayment or financing of such assets are classified as activities of the Company’s vehicle programs. The Company believes it is appropriate to segregate the financial data of its vehicle programs because, ultimately, the source of repayment of such debt is the realization of such assets. |
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Transaction Related Costs Policy [Policy Text Block] | Transaction-related costs, net. Transaction-related costs, net are classified separately in the Consolidated Condensed Statements of Comprehensive Income. These costs are comprised of expenses related to acquisition-related activities such as due diligence and other advisory costs, expenses related to the integration of the acquiree’s operations with those of the Company, including the implementation of best practices and process improvements, non-cash gains and losses related to re-acquired rights, expenses related to pre-acquisition contingencies and contingent consideration related to acquisitions. |
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Currency Transactions | Currency Transactions. The Company records the gain or loss on foreign-currency transactions on certain intercompany loans and the gain or loss on intercompany loan hedges within interest expense related to corporate debt, net. During the three and six months ended June 30, 2018 and 2017, the Company recorded an immaterial amount in each period. |
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Adoption of New Accounting Standards | Adoption of New Accounting Pronouncements Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income On January 1, 2018, as a result of a new accounting pronouncement, the Company early adopted ASU 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for the adjustment of deferred taxes due to the reduction of the corporate income tax rate as a result of U.S. tax reform. Accordingly, the Company has reclassified $4 million of net tax benefits from accumulated other comprehensive loss to beginning accumulated deficit related to the following (see Note 14 - Stockholders’ Equity). Prior period amounts have not been retrospectively adjusted.
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Costs and Net Periodic Postretirement Benefit Cost,” which requires an entity to disaggregate the components of net benefit cost recognized in its consolidated statements of operations. The adoption of this accounting pronouncement did not have a material impact on the Company’s Consolidated Condensed Financial Statements. Recognition and Measurement of Financial Assets and Financial Liabilities On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which makes limited amendments to the classification and measurement of financial instruments. The amendments supersede the guidance to classify equity securities with readily determinable fair values into different categories (trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income. Accordingly, the Company has reclassified $2 million of net unrealized gains associated with available for sale equity securities from accumulated other comprehensive loss to beginning accumulated deficit (see Note 14 - Stockholders’ Equity). This ASU has no impact on the Company’s accounting for equity method investments. Intra-Entity Transfers of Assets Other Than Inventory On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which removes the prohibition in Topic 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The adoption of this accounting pronouncement did not have an impact on the Company’s Consolidated Condensed Financial Statements. Revenue from Contracts with Customers On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which outlines a single model for entities to use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance. The new guidance applies to all contracts with customers except for leases, insurance contracts, financial instruments, certain nonmonetary exchanges and certain guarantees. Also, additional disclosures are required about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The Company has adopted the requirements of the new standard on a modified retrospective basis applied to all contracts. Prior periods have not been retrospectively adjusted. As discussed in Leases below, the Company’s rental related revenues will be accounted for under Topic 606 until the adoption of ASU 2016-02, “Leases (Topic 842)” on January 1, 2019. Under Topic 606, each transaction that generates customer loyalty points results in the deferral of revenue generally equivalent to the estimated retail value of points expected to be redeemed. The associated revenue will be recognized at the time the customer redeems the loyalty points. Previously, the Company did not defer revenue and recorded an expense associated with the incremental cost of providing the future rental at the time when the loyalty points were earned. In the Company’s Consolidated Condensed Balance Sheet at January 1, 2018, customer loyalty program liability increased approximately $50 million related to the estimated retail value of customer loyalty points earned, with a corresponding increase to accumulated deficit (approximately $40 million, net of tax) due to the cumulative impact of adopting Topic 606. Certain customers may receive cash-based rebates, which are accounted for as variable consideration under Topic 606. The Company estimates these rebates based on the expected amount to be provided to customers and reduces revenue recognized. The impact of adoption of Topic 606 on the Company’s Consolidated Condensed Statement of Comprehensive Income for the three months ended June 30, 2018 was not material. The impact of adoption of Topic 606 on the Company’s Consolidated Condensed Statement of Comprehensive Income for the six months ended June 30, 2018 and Consolidated Condensed June 30, 2018 Balance Sheet was as follows:
Recently Issued Accounting Pronouncements Nonemployee Share-Based Payment Accounting In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, “Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 becomes effective for the Company on January 1, 2019. Early adoption is permitted. The adoption of this accounting pronouncement is not expected to have an impact on the Company's Consolidated Condensed Financial Statements. Accounting for Hedging Activities In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” which amends the existing guidance to allow companies to more accurately present the economic results of an entity’s risk management activities in the financial statements. ASU 2017-12 becomes effective for the Company on January 1, 2019. Early adoption is permitted. The Company is currently evaluating the effect of this accounting pronouncement on its Consolidated Condensed Financial Statements. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which sets forth a current expected credit loss impairment model for financial assets that replaces the current incurred loss model. This model requires a financial asset (or group of financial assets), including trade receivables, measured at amortized cost to be presented at the net amount expected to be collected with an allowance for credit losses deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. ASU 2016-13 becomes effective for the Company on January 1, 2020. Early adoption is permitted as of January 1, 2019. The adoption of this accounting pronouncement is not expected to have a material impact on the Company's Consolidated Condensed Financial Statements. Leases In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which requires a lessee to recognize all long-term leases on its balance sheet as a liability for its lease obligation, measured at the present value of lease payments not yet paid, and a corresponding asset representing its right to use the underlying asset over the lease term and expands disclosure of key information about leasing arrangements. The ASU does not significantly change a lessee’s recognition, measurement and presentation of expenses and cash flows. Additionally, ASU 2016-02 aligns key aspects of lessor accounting with the new revenue recognition guidance in Topic 606 (see Revenue from Contracts with Customers above). In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach which includes a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which provides an additional transition method allowing entities to only apply the new lease standard in the year of adoption. Additionally, ASU 2018-11 provides a practical expedient for lessors to combine nonlease components with related lease components if certain conditions are met. These ASUs become effective for the Company on January 1, 2019. Early adoption is permitted. The Company is in the process of evaluating and planning for the implementation of these ASUs, including assessing its overall impact, and expects most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption, which will materially increase total assets and total liabilities relative to such amounts prior to adoption. The Company has determined portions of its vehicle rental contracts that convey the right to control the use of identified assets are within the scope of the accounting guidance contained in these ASUs. As discussed in Revenue from Contracts with Customers above, the Company’s rental related revenues are accounted for under the revenue accounting standard Topic 606, until the adoption of this lease accounting standard Topic 842 on January 1, 2019. Income Taxes In January 2018, the FASB issued FASB Staff Question and Answer Topic 740, No. 5: Accounting for Global Intangible Low-Taxed Income (“GILTI”), which provides guidance on accounting for the GILTI provisions of the U.S. enacted tax reform legislation (“the Tax Act”). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance allows accounting for tax on GILTI to be treated as a deferred tax item or as a component of current period income tax expense in the year incurred, subject to an accounting policy election. The Company will complete its analysis in a subsequent period not to exceed one year from the date of the enactment of the Tax Act and will elect an accounting policy at such time. |
Restructuring (Tables) |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Changes To Restructuring-Related Liabilities |
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation Of Basic And Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (“EPS”) (shares in millions):
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Other Current Assets (Tables) |
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Other Current Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Assets [Table Text Block] |
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Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Intangible Assets | Intangible assets consisted of:
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Vehicle Rental Activities (Tables) |
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Vehicle Rental Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of The Company's Vehicles | The components of vehicles, net within assets under vehicle programs were as follows:
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Components Of Vehicle Depreciation And Lease Charges | The components of vehicle depreciation and lease charges, net are summarized below:
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Accounts Payable and Other Current Liabilities (Tables) |
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Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | Accounts payable and other current liabilities consisted of:
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Long-term Debt and Borrowing Arrangements (Tables) |
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Schedule Of Long-Term Debt | Long-term corporate debt and borrowing arrangements consisted of:
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In February 2018, the Company amended the terms of its Floating Rate Term Loan due 2022 and extended its maturity term to 2025. |
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Schedule Of Committed Credit Facilities | At June 30, 2018, the committed corporate credit facilities available to the Company and/or its subsidiaries were as follows:
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In February 2018, the Company amended the terms of its Senior revolving credit facility maturing 2021 and extended its maturity to 2023. At June 30, 2018, the Company had various uncommitted credit facilities available, under which it had drawn approximately $1 million, which bear interest at rates between 0.74% and 1.54%. |
Debt Under Vehicle Programs and Borrowing Arrangements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Debt Under Vehicle Programs | Debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding (AESOP) LLC (“Avis Budget Rental Car Funding”), consisted of:
__________
In April 2018, the Company’s Avis Budget Rental Car Funding subsidiary issued approximately $400 million in asset-backed notes with an expected final payment date of September 2023. The weighted average interest rate was 4%. The Company used the proceeds from these borrowings to fund the repayment of maturing vehicle-backed debt and the acquisition of rental cars in the United States. In June 2018, the Company increased its capacity under the European rental fleet securitization program by €150 million (approximately $175 million) to €1.8 billion (approximately $2.1 billion) and extended its maturity to 2021. The Company used the proceeds to finance fleet purchases for certain of the Company’s European operations. |
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Schedule Of Contractual Maturities | The following table provides the contractual maturities of the Company’s debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding, at June 30, 2018.
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Schedule Of Available Funding Under The Vehicle Programs | As of June 30, 2018, available funding under the Company’s vehicle programs, including related party debt due to Avis Budget Rental Car Funding, consisted of:
__________
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Stockholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | The components of accumulated other comprehensive income (loss) were as follows:
__________ All components of accumulated other comprehensive income (loss) are net of tax, except currency translation adjustments, which exclude income taxes related to indefinite investments in foreign subsidiaries and include a $53 million gain, net of tax, as of June 30, 2018 related to the Company’s hedge of its net investment in euro-denominated foreign operations (see Note 16 - Financial Instruments).
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Components Of Other Comprehensive Income | The components of other comprehensive income (loss) were as follows:
__________ |
Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Based Compensation Activity | The Company recorded stock-based compensation expense of $7 million and $4 million ($5 million and $3 million, net of tax) during the three months ended June 30, 2018 and 2017, respectively, and $12 million and $5 million ($9 million and $3 million, net of tax) during the six months ended June 30, 2018 and 2017, respectively. The activity related to restricted stock units (“RSUs”) consisted of (in thousands of shares):
__________
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Summary Of Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range | The stock option activity consisted of (in thousands of shares):
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Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The Company held derivative instruments with absolute notional values as follows:
__________
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Fair Value Of Derivative Instruments | Estimated fair values (Level 2) of derivative instruments were as follows:
__________ Amounts in this table exclude derivatives issued by Avis Budget Rental Car Funding; however, certain amounts related to the derivatives held by Avis Budget Rental Car Funding are included within accumulated other comprehensive income (loss).
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Derivative Instruments, Gain (Loss) [Table Text Block] | The effects of derivatives recognized in the Company’s Consolidated Condensed Financial Statements were as follows:
__________
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] | The carrying amounts and estimated fair values (Level 2) of debt instruments were as follows:
__________
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Segment Information (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Segments Information |
__________
__________
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Guarantor and Non-Guarantor Consolidating Condensed Financial Statements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 |
Jun. 30, 2017 |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Flows reconciliation GNG (2016-18) [Table Text Block] | The following tables provide the impact of adoption of ASU 2016-18 on the Company’s Consolidating Condensed Statements of Cash Flows for the six months ended June 30, 2017.
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Reconciliation of cash and cash equivalents GNG (2016-18) [Table Text Block] | The following table provides a reconciliation of the cash and cash equivalents, program and restricted cash reported within the Consolidating Condensed Balance Sheets to the amounts shown in the Consolidating Condensed Statements of Cash Flows.
_________
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Consolidating Condensed Statements of Comprehensive Income | Three Months Ended June 30, 2018
Six Months Ended June 30, 2018
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Three Months Ended June 30, 2017
Six Months Ended June 30, 2017
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Schedule Of Condensed Consolidating Balance Sheet Table | As of June 30, 2018
As of December 31, 2017
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Consolidating Condensed Statements Of Cash Flows | Six Months Ended June 30, 2018
Six Months Ended June 30, 2017
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Revenues (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Revenues [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Revenue Rollforward [Table Text Block] | The following table presents changes in the Company’s contract liabilities during the six months ended June 30, 2018.
________
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Disaggregation of Revenue by Geography [Table Text Block] | The following table presents the Company’s revenues disaggregated by geography.
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Disaggregation of Revenue by Brand [Table Text Block] | The following table presents the Company’s revenues disaggregated by brand.
________ Other includes Zipcar, Payless, Apex, Maggiore and FranceCars. |
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Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ 2,328 | $ 2,238 | $ 4,296 | $ 4,077 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Budget | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | 777 | 1,419 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Avis | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | 1,351 | 2,496 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | 200 | 381 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Americas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | 1,590 | $ 1,565 | 2,938 | $ 2,879 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | 600 | 1,047 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asia and Australasia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ 138 | $ 311 |
Revenues Deferred Revenue (Details) - USD ($) $ in Millions |
6 Months Ended | |
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Jun. 30, 2018 |
Dec. 31, 2017 |
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Deferred Revenue Rollforward [Line Items] | ||
Document Period End Date | Jun. 30, 2018 | |
Deferred Revenue | $ 303 | $ 194 |
Deferred Revenue, Additions | 999 | |
Deferred Revenue, Revenue Recognized | 890 | |
Prepaid Rentals [Member] | ||
Deferred Revenue Rollforward [Line Items] | ||
Deferred Revenue | 210 | 101 |
Deferred Revenue, Additions | 891 | |
Deferred Revenue, Revenue Recognized | 782 | |
Other Deferred Revenue [Member] | ||
Deferred Revenue Rollforward [Line Items] | ||
Deferred Revenue | 93 | $ 93 |
Deferred Revenue, Additions | 108 | |
Deferred Revenue, Revenue Recognized | 108 | |
Accounts Payable and Accrued Liabilities [Member] | Other Deferred Revenue [Member] | ||
Deferred Revenue Rollforward [Line Items] | ||
Deferred Revenue | 37 | |
Other Noncurrent Liabilities [Member] | Other Deferred Revenue [Member] | ||
Deferred Revenue Rollforward [Line Items] | ||
Deferred Revenue | $ 56 |
Restructuring Other Related Charges (Details) $ in Millions |
6 Months Ended | |
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Jun. 30, 2018
Employee
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Jun. 30, 2017
USD ($)
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Other Related Charges [Abstract] | ||
Other Nonrecurring Expense | $ 7 | |
Charges related to voluntary termination program, Expected Number of Positions Eliminated | Employee | 358 | |
Share-based Compensation Arrangement by Share-based Payment Award Accelerated Compensation Cost | 2 | |
Charges related to voluntary termination program | $ 14 |
Earnings Per Share Earnings Per Share (Details) - $ / shares shares in Millions |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Document Period End Date | Jun. 30, 2018 | |||
Basic weighted average shares outstanding | 80.7 | 84.0 | 80.8 | 84.9 |
Basic | $ 0.33 | $ 0.04 | $ (0.75) | $ (1.22) |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.1 | 0.8 | ||
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.2 | 0.7 | 1.5 | 1.3 |
Other Investments (Details) - Greece [Member] - USD ($) $ in Millions |
3 Months Ended | |
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Jun. 30, 2018 |
Mar. 31, 2018 |
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Schedule of Equity Method Investments [Line Items] | ||
Payments to Acquire Equity Method Investments | $ 18 | $ 19 |
Equity Method Investment, Ownership Percentage | 40.00% | 20.00% |
Equity Method Investment, Commitment to Purchase Ownership Percentage | 20.00% | |
Commitment to Purchase within next 12 months [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investment, Commitment to Purchase Ownership Percentage | 10.00% | |
Commitment to Purchase in year 2 [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity Method Investment, Commitment to Purchase Ownership Percentage | 10.00% |
Other Current Assets (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Other Current Assets Disclosure [Abstract] | ||
Sales and use taxes | $ 402 | $ 174 |
Prepaid expenses | 252 | 196 |
Other | 178 | 163 |
Other current assets | $ 832 | $ 533 |
Intangible Assets (Narrative) (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Finite-Lived Intangible Assets [Line Items] | ||||
Document Period End Date | Jun. 30, 2018 | |||
Amortization expense relating to all intangible assets | $ 19 | $ 16 | $ 33 | $ 31 |
Amortization expense for remainder of the year | 37 | $ 37 | ||
Document Fiscal Year Focus | 2018 | |||
Intangible assets amortization expense, year one | 50 | $ 50 | ||
Intangible assets amortization expense, year two | 43 | 43 | ||
Intangible assets amortization expense, year three | 30 | 30 | ||
Intangible assets amortization expense, year four | 24 | 24 | ||
Intangible assets amortization expense, year five | $ 21 | $ 21 |
Vehicle Rental Activities (Components Of The Company's Vehicles) (Detail) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
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Vehicle Rental Activities [Abstract] | |||
Rental vehicles | $ 15,188 | $ 11,652 | |
Less: Accumulated depreciation | (1,629) | (1,652) | |
Rental Vehicles Net, Total | 13,559 | 10,000 | |
Vehicles held for sale | 308 | 626 | |
Vehicles, net | 13,867 | $ 10,626 | |
Accounts Payable, Other, Current | 856 | $ 658 | |
Other Receivables | $ 248 | $ 235 |
Vehicle Rental Activities (Components Of Vehicle Depreciation And Lease Charges) (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Vehicle Rental Activities [Abstract] | ||||
Depreciation expense | $ 536 | $ 516 | $ 996 | $ 953 |
Lease charges | 64 | 54 | 120 | 97 |
(Gain) loss on sale of vehicles, net | (9) | 27 | (10) | 51 |
Vehicle depreciation and lease charges, net | $ 591 | $ 597 | $ 1,106 | $ 1,101 |
Income Taxes Income Taxes (Narrative) (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
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Income Taxes [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | 33.00% | 32.50% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% |
Accounts Payable and Other Current Liabilities (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Accounts Payable and Other Current Liabilities [Abstract] | ||
Accounts payable | $ 412 | $ 359 |
Accrued sales and use taxes | 262 | 218 |
Accrued marketing and commissions, current | 197 | 190 |
Employee-related Liabilities, Current | 176 | 176 |
Deferred Revenue, Current | 247 | 135 |
Public liability and property damage insurance liabilities, current | 144 | 145 |
Accrued Insurance, Current | 102 | 103 |
Other | 292 | 293 |
Accounts payable and other current liabilities | $ 1,832 | $ 1,619 |
Long-Term Debt And Borrowing Arrangements (Schedule Of Committed Credit Facilities) (Detail) $ in Millions |
Jun. 30, 2018
USD ($)
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Revolving Credit Facility Maturing Two Thousand Sixteen [Member] | |
Line of Credit Facility [Line Items] | |
Total Capacity | $ 1,800 |
Outstanding Borrowings | 0 |
Letters of Credit Issued | 1,324 |
Available Capacity | 476 |
Other Facilities [Member] | |
Line of Credit Facility [Line Items] | |
Total Capacity | 2 |
Outstanding Borrowings | 2 |
Letters of Credit Issued | 0 |
Available Capacity | $ 0 |
Long-Term Debt And Borrowing Arrangements (Schedule Of Committed Credit Facilities) (Detail Section) $ in Millions |
3 Months Ended | 6 Months Ended |
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Jun. 30, 2018
USD ($)
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Jun. 30, 2018
USD ($)
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Line of Credit Facility [Line Items] | ||
Amounts drawn under uncommitted credit facilities | $ 1 | $ 1 |
Bank Overdraft [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Interest Rate During Period | 3.22% | |
Minimum [Member] | Uncommitted Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Interest Rate During Period | 0.74% | |
Maximum [Member] | Uncommitted Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Interest Rate During Period | 1.54% |
Debt Under Vehicle Programs And Borrowing Arrangements (Schedule Of Contractual Maturities) (Detail) $ in Millions |
Jun. 30, 2018
USD ($)
|
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Debt Under Vehicle Programs And Borrowing Arrangements [Line Items] | |
Vehicle Program Debt Amount Outstanding | $ 11,824 |
Vehicle backed debt [Member] | |
Debt Under Vehicle Programs And Borrowing Arrangements [Line Items] | |
Within 1 year | 1,816 |
Between 1 and 2 years | 4,703 |
Between 2 and 3 years | 2,997 |
Between 3 and 4 years | 724 |
Between 4 and 5 years | 1,156 |
Thereafter | 428 |
Vehicle Program Debt Amount Outstanding | $ 11,824 |
Debt Under Vehicle Programs and Borrowing Arrangements Debt Under Vehicle Programs and Borrowing Arrangements (Details) - Debt Due To Avis Budget Rental Car Funding (Member) $ in Millions |
Jun. 30, 2018
USD ($)
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Debt Under Vehicle Programs And Borrowing Arrangements [Line Items] | |
Asset-Backed Securities, at Carrying Value | $ 400 |
Debt, Weighted Average Interest Rate | 4.00% |
Commitments And Contingencies (Narrative) (Detail) - USD ($) $ in Millions |
6 Months Ended | |
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Jun. 30, 2018 |
Jun. 30, 2017 |
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Schedule Of Commitments And Contingencies [Line Items] | ||
Loss Contingency Accrual | $ 12 | |
Loss Contingency, Range of Possible Loss, Portion Not Accrued | $ 50 | |
Document Period End Date | Jun. 30, 2018 | |
Purchase obligation over the next twelve months | $ 2,800 | |
Other Receivables | 248 | $ 235 |
Realogy [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Other Receivables | 23 | |
Wyndham [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Other Receivables | $ 14 |
Stock-Based Compensation (Narrative) (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 7 | $ 4 | $ 12 | $ 5 |
Stock-based compensation expense (net of tax) | $ 5 | $ 3 | $ 9 | $ 3 |
Document Period End Date | Jun. 30, 2018 | |||
Document Fiscal Year Focus | 2018 |
Subsequent Events (Details) € in Millions, $ in Millions |
1 Months Ended | ||
---|---|---|---|
Jul. 31, 2018
EUR (€)
|
Aug. 01, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
|
Subsequent Event [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ | $ 1,500 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Business Combination, Consideration Transferred | € | € 35 | ||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | € | € 5 | ||
Stock Repurchase Program, Authorized Amount | $ | $ 250 |
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