Avis Budget Group Reports Record Third Quarter Results
Nov 1, 2012 (Menafn - GlobeNewswire via COMTEX) --
--Revenue grew to 2.2 billion, a 34% increase from third quarter 2011.
--Adjusted EBITDA increased 39% to 377 million, excluding certain items,
the Company's highest-ever quarterly earnings.
--Pretax income increased 36% to 284 million, excluding certain items,
and was 260 million on a GAAP basis.
--Diluted earnings per share grew 43% to 1.46 per share, excluding
certain items, and GAAP diluted earnings per share were 2.38.
--Company revises its 2012 Adjusted EBITDA estimate to 825 to 840
million, excluding certain items, a year-over-year increase of 35% to
38%.
PARSIPPANY, N.J., Nov. 1, 2012 (GLOBE NEWSWIRE) -- Avis Budget Group, Inc. CAR today reported results for its third quarter ended September 30, 2012. For the quarter, the Company reported revenue of 2.2 billion, a 34% increase compared with the prior-year third quarter. Excluding certain items, Adjusted EBITDA increased 39% to 377 million. The Company reported net income of 171 million and diluted earnings per share of 1.46, excluding certain items. GAAP net income of 280 million was impacted by a 128 million non-cash income tax benefit, debt extinguishment costs and acquisition-related charges.
As previously announced, the Company completed its acquisition of Avis Europe plc on October 3, 2011. For the quarter ended September 30, 2012, the acquisition of Avis Europe contributed revenue of 526 million and Adjusted EBITDA of 102 million, excluding certain items. Excluding Avis Europe, the Company's revenue grew 1% in the third quarter and Adjusted EBITDA increased 1%, excluding certain items.
"Our third quarter results reflect strong summer volume growth and a significant contribution from the Avis Europe acquisition," said Ronald L. Nelson, Avis Budget Group Chairman and Chief Executive Officer. "While our revised earnings estimates acknowledge the softness in European travel demand, the strategic initiatives we laid out more than a year ago continue to pay dividends, and we are well on our way toward reporting record revenue and earnings for 2012."
Executive Summary
Revenue increased 34% in third quarter 2012 compared to third quarter 2011 primarily due to the acquisition of Avis Europe. Excluding Avis Europe, volume increased 4% and pricing declined 3%. Third quarter Adjusted EBITDA increased 39% to 377 million, excluding certain items, driven by increased revenues.
Business Segment Discussion
The following discussion of third quarter operating results focuses on revenue and Adjusted EBITDA for each of our operating segments. Prior-period results have been revised to reflect the movement of Canadian results from the International segment to the North America segment. Revenue and Adjusted EBITDA are expressed in millions.
North America
(Consisting of the Company's U.S. car rental and Canadian vehicle rental operations)
%
20122011change
----------------------
Revenue 1,358 1,3362%
------------------------------------------
Adjusted EBITDA 232 2167%
------------------------------------------
Revenue increased 2% primarily due to a 4% increase in volume and a 7% increase in ancillary revenues, partially offset by a 3% year-over-year decline in pricing. Adjusted EBITDA increased 7%, primarily due to lower operating and vehicle interest costs, partially offset by a 3% increase in per-unit fleet costs.
International
(Consisting of the Company's international vehicle rental operations)
%
20122011change
------------------
Revenue 703 175302%
--------------------------------------
Adjusted EBITDA 129 37249%
--------------------------------------
Revenue increased 302% principally due to the acquisition of Avis Europe. Excluding the acquisition, revenue increased 1% as a result of a 2% increase in volume and increased licensee royalty revenue, partially offset by a 3% decline in reported pricing due primarily to currency effects. Adjusted EBITDA increased 92 million due to a 94 million contribution from our European operations, including 7 million of restructuring costs. Excluding the acquisition, Adjusted EBITDA declined 3 million, entirely as a result of an unfavorable currency impact.
Truck Rental
(Consisting of the Company's U.S. truck rental operations)
%
20122011change
------------------
Revenue 109 112(3%)
--------------------------------------
Adjusted EBITDA 14 22(36%)
--------------------------------------
Truck rental revenue declined 3% as a 2% increase in pricing was offset by a 5% decline in volume, largely reflecting the wind-down of a relatively low-priced commercial contract. Adjusted EBITDA decreased 8 million primarily due to lower revenue and higher vehicle maintenance expense incurred to increase the average number of trucks available for rent.
Other Items
--Corporate Debt Repayment - In September, the Company utilized available
cash to repay 50 million of 7.75% senior notes due 2016.
--Term Loan Borrowings - In October, the Company closed an offering of
200 million of term loan borrowings due 2019.Proceeds from the
offering and approximately 40 million of available cash were used to
repay approximately 240 million of outstanding term loan borrowings.
The interest rate on the new term loan borrowings is nearly two points
lower than the interest rate on the debt that was repaid.
--Avis Budget EMEA Statistics - Revenue in the Company's Europe, Middle
East and Africa operations increased 5% on a constant-currency basis in
third quarter 2012 compared to third quarter 2011, and declined 6% on a
reported basis. The change in revenue reflects a 9% increase in rental
days and a 16% decline in average daily rate. Pricing decreased 6%
excluding currency effects and including the impact of the strong growth
our Budget brand achieved.
--Apex - As previously announced, the Company acquired New Zealand-based
Apex Car Rentals in October. The acquisition further expands Avis Budget
Group's presence in Australia and New Zealand and positions the Company
to participate in the fast-growing deep-value segment of the car rental
market there.
--Income Tax Benefit - In the third quarter, the Company realized a 128
million non-cash income tax benefit related to the resolution of prior
years' tax positions and has excluded this item in calculating net
income, excluding certain items, and earnings per share, excluding
certain items.
--Repositioning of Truck Rental Business - To better position our Truck
Rental segment for future success, we are planning to restructure the
business over the next several quarters by closing certain rental
locations and reducing our rental fleet, which we believe will improve
our utilization, lower our cost base and drive better pricing.We
currently anticipate that we will incur restructuring and other costs of
approximately 20 million in conjunction with this initiative.
Outlook
--Financial Outlook - The Company expects its full-year 2012 revenue to be
approximately 7.3 billion, a 24% increase compared to 2011. The Company
expects its 2012 Adjusted EBITDA to be approximately 825 million to
840 million, excluding certain items, an increase of 35% to 38%
compared to the prior year.The narrowing of the Company's estimated
EBITDA range reflects recent trends, including difficult economic
conditions in Europe, which are impacting travel demand.
North America fleet costs are expected to decline 6% to 8% on a per-unit basis compared to 2011. The Company continues to expect interest expense related to corporate debt to be approximately 265 million. The Company also expects that its 2012 non-vehicle depreciation and amortization expense (excluding the amortization of intangible assets related to the acquisition of Avis Europe) will be approximately 110 million, and that its pretax income will be approximately 450 million to 465 million, excluding certain items.
The Company expects that its effective tax rate in 2012 will be approximately 36% to 38%, excluding certain items, and that its diluted share count will be approximately 121 million. Based on these expectations, the Company estimates that its 2012 diluted earnings per share, excluding certain items, will be approximately 2.35 to 2.45.
--Acquisition Synergies - The Company expects to reach a run-rate of 40
million of annual synergies from the acquisition of Avis Europe by the
end of the year.
--Performance Excellence Savings - The Company is continuing its efforts
to reduce costs and enhance productivity and expects that such
initiatives will provide incremental benefits of more than 50 million
in 2012.
Investor Conference Call
Avis Budget Group will host a conference call to discuss third quarter results on November 2, 2012, at 8:30 a.m. (ET). Investors may access the call live at ir.avisbudgetgroup.com or by dialing (415) 228-4734 and providing the access code "Avis Budget." Investors are encouraged to dial in approximately 10 minutes prior to the call. A web replay will be available at ir.avisbudgetgroup.com following the call. A telephone replay will be available from 12:00 noon (ET) on November 2 until 8:00 p.m. (ET) on November 16 at (203) 369-3102, access code: "Avis Budget."
About Avis Budget Group, Inc.
Avis Budget Group, Inc. is a leading global provider of vehicle rental services through its Avis and Budget brands, with 10,000 rental locations in approximately 175 countries around the world. Avis Budget Group operates most of its car rental offices in North America, Europe and Australia directly, and operates primarily through licensees in other parts of the world. Avis Budget Group has approximately 29,000 employees and is headquartered in Parsippany, N.J. For more information, visit www.avisbudgetgroup.com.
The Avis Budget Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8891
Forward-Looking Statements
Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", "may increase", "forecast" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are based upon then current assumptions and expectations and are generally forward-looking in nature and not historical facts. Any statements that refer to outlook, expectations or other characterizations of future events, circumstances or results, including all statements related to future results, future fleet costs, acquisition synergies and cost-saving initiatives are also forward-looking statements.
Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this press release include, but are not limited to, the Company's ability to promptly and effectively integrate the businesses of Avis Europe and Avis Budget, any change in economic conditions generally, particularly during our peak season or in key market segments, the high level of competition in the vehicle rental industry, a change in our fleet costs as a result of a change in the cost for new vehicles and/or the value of used vehicles, disruption in the supply of new vehicles, disposition of vehicles not covered by manufacturer repurchase programs, the financial condition of the manufacturers that supply our rental vehicles which could impact their ability to perform their obligations under our repurchase and/or guaranteed depreciation arrangements, any reduction in travel demand, including any reduction in airline passenger traffic, any occurrence or threat of terrorism, a significant increase in interest rates or borrowing costs, our ability to obtain financing for our operations, including the funding of our vehicle fleet via the asset-backed securities market, any changes to the cost or supply of fuel, any fluctuations related to the mark-to-market of derivatives which hedge our exposure to exchange rates, interest rates and fuel costs, the Company's ability to meet the financial and other covenants contained in the agreements governing our indebtedness, risks associated with litigation, regulation or governmental or regulatory inquiries or investigations involving the Company, and the Company's ability to accurately estimate its future results and implement its strategy for cost savings and growth. Other unknown or unpredictable factors could also have material adverse effects on Avis Budget Group's performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements are specified in Avis Budget Group's Annual Report on Form 10-K for the year ended December 31, 2011, included under headings such as "Forward-Looking Statements", "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations", its most recently filed Form 10-Q, and in other filings and furnishings made by the Company with the SEC from time to time. Except for the Company's ongoing obligations to disclose material information under the federal securities laws, the Company undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless required by law.
This release includes certain financial measures such as Adjusted EBITDA, pretax income and diluted earnings per share, which exclude certain items under each measure and are not considered generally accepted accounting principles ("GAAP") measures as defined under SEC rules. Important information regarding such measures is contained on Table 1 and Table 5 to this release. The Company believes that these non-GAAP measures are useful in measuring the comparable results of the Company period-over-period. The GAAP measures most directly comparable to Adjusted EBITDA, pretax income and diluted earnings per share, excluding certain items under each measure, are net income, pretax income and diluted earnings per share. Because of the forward-looking nature of the Company's forecasted non-GAAP Adjusted EBITDA, pretax income and diluted earnings per share, excluding certain items, specific quantifications of the amounts that would be required to reconcile forecasted net income, pretax income and diluted earnings per share are not available. The Company believes that there is a degree of volatility with respect to certain of the Company's GAAP measures which preclude the Company from providing accurate forecasted GAAP to non-GAAP reconciliations. Based on the above, the Company believes that providing estimates of the amounts that would be required to reconcile the range of the non-GAAP Adjusted EBITDA, pretax income and diluted earnings per share, excluding certain items, to forecasted net income, pretax income, and diluted earnings per share would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above.
Table 1
Avis Budget Group, Inc.
SUMMARY DATA SHEET
(In millions, except per share data)
Three Months Ended SeptemberNine Months Ended September
30,30,
---------------------------------------------------------
%%
20122011Change20122011Change
-------------------------------------------------
Income Statement Items
Net revenues 2,170 1,62334% 5,659 4,26933%
Adjusted EBITDA
(non-GAAP)37027236%73654635%
Income before income
taxes26013691%36323654%
Net income28082241%336141138%
Earnings per share -
Diluted2.380.65266%2.771.14143%
Excluding Certain Items
(non-GAAP) (A)
Net revenues 2,170 1,62334% 5,659 4,26933%
Adjusted EBITDA37727239%76254739%
Income before income
taxes28420936%47436131%
Net income17112933%29822035%
Earnings per share -
Diluted1.461.0243%2.461.7541%
As of
--------------------
SeptemberDecember
30,31,
20122011
------------------
Balance Sheet Items
Cash and cash
equivalents 554 534
Vehicles, net10,3438,356
Debt under vehicle
programs7,8755,564
Corporate debt2,9673,205
Stockholders' equity791412
Segment Results
Three Months Ended SeptemberNine Months Ended September
30,30,
---------------------------------------------------------
%%
20122011Change20122011Change
-------------------------------------------------
Net Revenues
North America 1,358 1,3362% 3,580 3,4843%
International703175302%1,791495262%
Truck Rental109112(3%)287290(1%)
Corporate and Other--1-
------------------*------------------*
Total Company 2,170 1,623 5,659 4,269
==================34%==================33%
Adjusted EBITDA (B)
North America 232 2167% 509 42619%
International12937249%21090133%
Truck Rental1422(36%)3240(20%)
Corporate and Other(5)(3)(15)(10)
------------------*------------------*
Total Company 370 272 736 546
==================36%==================35%
Reconciliation of Adjusted EBITDA to Pretax
Income
Total Company Adjusted
EBITDA 370 272 736 546
Less: Non-vehicle
related depreciation
and amortization30229265
Interest expense related to
corporate debt, net:
Interest expense6748208143
Early extinguishment
of debt2-52-
Transaction-related
costs116621102
------------------------------------
Income before income
taxes 260 136 363 236
==================91%==================54%
_________
* Not meaningful.
(A) During the three and nine months ended September 30, 2012, we recorded certain
items in our operating results before income taxes of 24 million and 111 million
(19 million and 90 million, net of tax), respectively, and a 128 million non-cash
income tax benefit for pre-Separation taxes. During the three months ended September
30, 2012, these items consisted of 11 million (10 million, net of tax) of
transaction-related costs primarily related to the integration of Avis Europe, 7
million (5 million, net of tax) in restructuring expense, 4 million (3 million,
net of tax) for amortization expense related to intangible assets recognized in the
Avis Europe acquisition and 2 million (1 million, net of tax) for the early
extinguishment of corporate debt. During the nine months ended September 30, 2012,
certain items consisted of 52 million (45 million, net of tax) for the early
extinguishment of corporate debt, 26 million (18 million, net of tax) in
restructuring expense, 21 million (18 million, net of tax) in transaction-related
costs primarily related to the integration of Avis Europe and 12 million (9
million, net of tax) for amortization expense related to intangible assets
recognized in the Avis Europe acquisition.
During the three and nine months ended September 30, 2011, we recorded certain items
of 73 million and 125 million (47 million and 79 million, net of tax),
respectively, primarily related to the acquisition of Avis Europe and our previous
efforts to acquire Dollar Thrifty. For the three months ended September 30, 2011,
these items consisted of 26 million (16 million, net of tax) of losses on
foreign-currency transactions related to the Avis Europe purchase price and 47
million (31 million, net of tax) related to due diligence, financing and other
expenses. For the nine months ended September 30, 2011, certain items consisted of
49 million (30 million, net of tax) of losses on foreign-currency transactions
related to the Avis Europe purchase price, 75 million (49 million, net of tax)
related to due diligence, financing and other expenses, and 1 million of
restructuring expense.
(B) See Table 5 for a description of Adjusted EBITDA. Adjusted EBITDA includes
stock-based compensation expense and deferred financing fee amortization of 10
million and 9 million in the three months ended September 30, 2012 and 2011,
respectively, and 31 million and 30 million in the nine months ended September 30,
2012 and 2011, respectively.
Table 2
Avis Budget Group, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Three Months EndedNine Months Ended
September 30,September 30,
--------------------------------------
2012201120122011
----------------------------------
Revenues
Vehicle rental 1,582 1,211 4,084 3,163
Other5884121,5751,106
----------------------------------
Net revenues2,1701,6235,6594,269
----------------------------------
Expenses
Operating1,0367832,8822,166
Vehicle depreciation and
lease charges, net4363041,088840
Selling, general and
administrative244190696511
Vehicle interest, net7774231205
Non-vehicle related
depreciation and
amortization30229265
Interest expense related
to corporate debt, net:
Interest expense6748208143
Early extinguishment
of debt2-52-
Transaction-related
costs116621102
Restructuring expense7-261
----------------------------------
Total expenses1,9101,4875,2964,033
----------------------------------
Income before income taxes260136363236
Provision for (benefit
from) income taxes(20)542795
----------------------------------
Net income 280 82 336 141
==================================
Earnings per share
Basic 2.62 0.78 3.16 1.34
Diluted 2.38 0.65 2.77 1.14
Weighted average shares
outstanding
Basic106.8105.4106.5105.1
Diluted118.0128.9122.7128.9
Table 3
Avis Budget Group, Inc.
SEGMENT REVENUE DRIVER ANALYSIS
Three Months EndedNine Months Ended September
September 30,30,
--------------------------------------------------------
%
20122011Change20122011% Change
------------------------------------------------
CAR RENTAL
North America (A)
Rental Days (000's)24,19823,2024%66,20862,7935%
Time and Mileage
Revenue per Day 42.15 43.48(3%) 40.29 41.55(3%)
Average Rental Fleet359,647342,2985%337,782317,7516%
International (B)
Rental Days (000's)11,0702,024447%27,4025,944361%
Time and Mileage
Revenue per Day 42.74 55.04(22%) 43.22 53.79(20%)
Average Rental Fleet165,94132,357413%141,58932,492336%
Total Car Rental
Rental Days (000's)35,26825,22640%93,61068,73736%
Time and Mileage
Revenue per Day 42.34 44.41(5%) 41.15 42.61(3%)
Average Rental Fleet525,588374,65540%479,371350,24337%
TRUCK RENTAL SEGMENT
Rental Days (000's)1,1331,188(5%)3,1113,221(3%)
Time and Mileage
Revenue per Day 78.16 76.772% 74.42 72.822%
Average Rental Fleet27,81626,1157%26,62326,0252%
_________
Rental days and time and mileage revenue per day are calculated based on the actual
rental of the vehicle during a 24-hour period. Our calculation of rental days and
time and mileage revenue per day may not be comparable to the calculation of
similarly-titled statistics by other companies.
(A) Results for North America now include the results of our operations in Canada for
all periods presented. Canada was previously included in our International segment.
Excluding our operations in Canada, the results for the North America segment would
have been as follows:
Three Months EndedNine Months Ended September
September 30,30,
--------------------------------------------------------
North America%
(excluding Canada)20122011Change20122011% Change
------------------------------------------------
Rental Days (000's)22,12421,1125%61,60158,2756%
Time and Mileage
Revenue per Day 41.50 42.84(3%) 39.84 40.99(3%)
Average Rental Fleet330,323314,2595%315,142295,8797%
(B) For the three and nine months ended September 30, 2012, results for International
include the results of the recently acquired operations of Avis Europe. The results
of such recently acquired operations are as follows:
Three Months EndedNine Months Ended September
September 30,30,
--------------------------------------------------------
%
Avis Europe20122011Change20122011% Change
------------------------------------------------
Rental Days (000's)8,9918,2229%21,20520,5473%
Time and Mileage
Revenue per Day 40.28 48.00(16%) 40.17 45.72(12%)
Average Rental Fleet132,379123,8997%108,064105,7802%
Of the change in time and mileage revenue per day in our European operations, 10
percentage points and 9 percentage points are due to changes in foreign-exchange
rates in the three and nine months ended September 30, 2012, respectively, with
time and mileage revenue per day decreasing 6 percentage points and 3 percentage
points, respectively, excluding foreign-exchange effects.
Table 4
Avis Budget Group, Inc.
CONSOLIDATED SCHEDULES OF CASH FLOWS AND FREE CASH
FLOWS
(In millions)
CONSOLIDATED SCHEDULE OF CASH FLOWS
Nine
Months
Ended
September
30, 2012
---------
Operating Activities
Net cash provided by operating
activities1,524
---------
Investing Activities
Net cash used in investing activities
exclusive of vehicle programs(96)
Net cash used in investing activities of
vehicle programs(2,916)
---------
Net cash used in investing activities(3,012)
---------
Financing Activities
Net cash used in financing activities
exclusive of vehicle programs(250)
Net cash provided by financing
activities of vehicle programs1,753
---------
Net cash provided by financing
activities1,503
---------
Effect of changes in exchange rates on
cash and cash equivalents5
---------
Net decrease in cash and cash equivalents20
Cash and cash equivalents, beginning of
period534
---------
Cash and cash equivalents, end of period 554
=========
CONSOLIDATED SCHEDULE OF FREE CASH FLOWS (A)
Nine
Months
Ended
September
30, 2012
---------
Pretax income 363
Add-back of non-vehicle related
depreciation and amortization92
Add-back of debt extinguishment costs52
Transaction-related costs21
Working capital and other102
Capital expenditures(82)
Tax payments, net of refunds(39)
Vehicle programs (B)(170)
---------
Free Cash Flow339
Borrowings, net of debt repayments(291)
Transaction-related payments(27)
Financing costs, foreign exchange effects
and other(1)
---------
Net decrease in cash and cash equivalents
(per above) 20
=========
_____________________________
(A) See Table 5 for a description of Free Cash Flow.
(B) Primarily reflects vehicle-backed borrowings
(repayments) that are incremental to vehicle-backed
borrowings (repayments) required to fund incremental
(reduced) vehicle and vehicle-related assets.
RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED
BY OPERATING ACTIVITIES
Nine
Months
Ended
September
30, 2012
---------
Free Cash Flow (per above) 339
Cash (inflows) outflows included in Free Cash Flow
but not reflected in
Net Cash Provided by Operating
Activities (per above)
Investing activities of vehicle
programs2,916
Financing activities of vehicle
programs(1,753)
Capital expenditures82
Early extinguishment of debt(39)
Proceeds received on asset sales(16)
Transaction-related payments(27)
Change in restricted cash19
Purchases of GPS navigational units3
---------
Net Cash Provided by Operating
Activities (per above) 1,524
=========
Table 5
Avis Budget Group, Inc.
DEFINITIONS AND RECONCILIATIONS OF NON-GAAP MEASURES
(In millions, except per share data)
The accompanying press release includes certain non-GAAP (generally
accepted accounting principles) financial measures as defined
under SEC rules. To the extent not provided in the press release
or accompanying tables, we have provided below the reasons we
present these non-GAAP financial measures, a description of what
they represent and a reconciliation to the most comparable
financial measure calculated and presented in accordance with
GAAP.
DEFINITIONS
Adjusted EBITDA
The accompanying press release presents Adjusted EBITDA, which
represents income (loss) before non-vehicle related depreciation
and amortization, any impairment charge, transaction-related
costs, non-vehicle related interest and income taxes. The
presentation of Adjusted EBITDA reflects this change for all
periods presented. We believe that Adjusted EBITDA is useful as a
supplemental measure in evaluating the aggregate performance of
our operating businesses. Adjusted EBITDA is the measure that is
used by our management, including our chief operating decision
maker, to perform such evaluation. It is also a component of our
financial covenant calculations under our credit facilities,
subject to certain adjustments. Adjusted EBITDA should not be
considered in isolation or as a substitute for net income (loss)
or other income statement data prepared in accordance with GAAP
and our presentation of Adjusted EBITDA may not be comparable to
similarly-titled measures used by other companies.
A reconciliation of Adjusted EBITDA to income (loss) before income
taxes can be found on Table 1 and a reconciliation of income
(loss) before income taxes to net income (loss) can be found on
Table 2.
Certain items
The accompanying press release and tables present Adjusted EBITDA,
income before income taxes, provision for income taxes, net income
and diluted earnings per share for the three and nine months ended
September 30, 2012, excluding certain items. For the three months
ended September 30, 2012, certain items consisted of 11 million
(10 million, net of tax) of transaction-related costs primarily
related to the integration of the operations of Avis Europe, 7
million (5 million, net of tax) in restructuring expense, 4
million (3 million, net of tax) for amortization expense related
to intangible assets recognized in the Avis Europe acquisition, 2
million (1 million, net of tax) of expense for the early
extinguishment of corporate debt and a 128 million non-cash
income tax benefit for pre-Separation taxes.
For the nine months ended September 30, 2012, certain items
consisted of 52 million (45 million, net of tax) of expense for
the early extinguishment of corporate debt, 26 million (18
million, net of tax) in restructuring expense, 21 million (18
million, net of tax) of transaction-related costs primarily
related to the integration of the operations of Avis Europe, 12
million (9 million, net of tax) for amortization expense related
to intangible assets recognized in the Avis Europe acquisition and
a 128 million non-cash income tax benefit for pre-Separation
taxes.
We believe that the measures referred to above are useful as
supplemental measures in evaluating the aggregate performance of
the Company. We exclude restructuring-related expenses, costs
related to early extinguishment of debt and other certain items as
such items are not representative of the results of operations of
our business for the three and nine months ended September 30,
2012.
Reconciliation of Avis Budget Group, Inc. Adjusted EBITDA and
income before income taxes, excluding certain items to net
income:
ThreeNine
MonthsMonths
EndedEnded
SeptemberSeptember
30, 201230, 2012
------------------
Adjusted EBITDA, excluding certain items 377 762
Less: Non-vehicle related depreciation and
amortization (excluding acquisition-related
amortization expense)2680
Interest expense related to corporate
debt, net (excluding early extinguishment
of debt)67208
------------------
Income before income taxes, excluding
certain items284474
Less certain items:
Early-extinguishment of debt252
Restructuring expense726
Transaction-related costs1121
Acquisition-related amortization expense412
------------------
Income before income taxes260363
Provision for income taxes, excluding
certain items114176
Benefit from income taxes on certain items(134)(149)
------------------
Provision for (benefit from) income taxes(20)27
------------------
Net income 280 336
==================
Reconciliation of net income excluding
certain items to net income:
Net income, excluding certain items 171 298
Less certain items, net of tax:
Early-extinguishment of debt145
Restructuring expense518
Transaction-related costs1018
Acquisition-related amortization expense39
Non-cash income tax benefit for
pre-Separation taxes(128)(128)
------------------
Net income 280 336
==================
Earnings per share, excluding certain items
(diluted) 1.46 2.46
------------------
Earnings per share (diluted) 2.38 2.77
------------------
Shares used to calculate Earnings per
share, excluding certain items (diluted)118.0122.7
------------------
The accompanying press release presents income before income taxes
for the three and nine months ended September 30, 2011, excluding
certain items. Table 1 presents income before income taxes, net
income and earnings per share, excluding certain items. For the
three months ended September 30, 2011, certain items consisted of
73 million (47 million, net of tax) related to the acquisition
of Avis Europe and our previous efforts to acquire Dollar Thrifty,
including 26 million of losses on foreign-currency hedges related
to the Avis Europe purchase price and 47 million (31 million,
net of tax) related to due diligence, financing and other
expenses.
For the nine months ended September 30, 2011, certain items
consisted of 124 million (79 million, net of tax) of expenses
related to the acquisition of Avis Europe and our previous efforts
to acquire Dollar Thrifty, including 49 million of losses on
foreign-currency hedges related to the Avis Europe purchase price
and 75 million (49 million, net of tax) related to due
diligence, financing and other expenses; and 1 million in
restructuring expense. Reconciliations of Adjusted EBITDA and net
income, excluding certain items to net income are presented below.
We believe that the measures referred to above are useful as
supplemental measures in evaluating the aggregate performance of
the Company. We exclude transaction-related expenses,
acquisition-related interest and restructuring expense as such
items are not representative of the results of operations of our
business for the three and nine months ended September 30, 2011.
Reconciliation of Adjusted EBITDA and income
before income taxes, excluding certain
items to net income:
ThreeNine
MonthsMonths
EndedEnded
SeptemberSeptember
30, 201130, 2011
------------------
Adjusted EBITDA, excluding certain items 272 547
Less: Non-vehicle related depreciation and
amortization2265
Interest expense related to corporate
debt, net (excluding interest expense
related to the acquisition of Avis Europe
or our previous efforts to acquire Dollar
Thrifty)41121
------------------
Income before income taxes, excluding
certain items209361
Less certain items:
Transaction-related expenses66102
Acquisition-related interest722
Restructuring expense-1
------------------
Income before income taxes136236
Provision for income taxes5495
------------------
Net income 82 141
==================
Reconciliation of net income, excluding
certain items to net income:
Net income, excluding certain items 129 220
Less certain items, net of tax:
Transaction-related expenses4366
Acquisition-related interest413
Restructuring expense--
------------------
Net income 82 141
==================
Earnings per share, excluding certain items
(diluted) 1.02 1.75
------------------
Earnings per share (diluted) 0.65 1.14
------------------
Shares used to calculate Earnings per
share, excluding certain items (diluted)128.9128.9
------------------
Free Cash Flow
Represents Net Cash Provided by Operating Activities adjusted to
reflect the cash inflows and outflows relating to capital
expenditures and GPS navigational units, the investing and
financing activities of our vehicle programs, asset sales, if any,
and to exclude debt extinguishment costs. We believe that Free
Cash Flow is useful to management and investors in measuring the
cash generated that is available to be used to repurchase stock,
repay debt obligations, pay dividends and invest in future growth
through new business development activities or acquisitions. Free
Cash Flow should not be construed as a substitute in measuring
operating results or liquidity, and our presentation of Free Cash
Flow may not be comparable to similarly-titled measures used by
other companies. A reconciliation of Free Cash Flow to the
appropriate measure recognized under GAAP is provided on Table 4.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Avis Budget Group, Inc.
(Logo:http://media.primezone.com/cache/14887/int/9708.jpg)
CONTACT: Media Contact:
John Barrows
(973) 496-7865
PR@avisbudget.com
Investor Contact:
Neal Goldner
(973) 496-5086
IR@avisbudget.com
(C) Copyright 2010 GlobeNewswire, Inc. All rights reserved.
