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Avis Budget Group Reports Record Third Quarter 2015 Results

The following excerpt is from the company's SEC filing.

Revenue was $2.6 billion and grew 8% in constant currency.

Adjusted EBITDA increased 3% to $431 million and grew 13% in constant currency.

Adjusted diluted earnings per share increased 4%, to $1.98, and GAAP diluted earnings per share were $1.77.

Company repurchased $161 million of outstanding shares in the quarter.

Company narrows its full-year earnings estimates and continues to expect 2015 to be a record year.

Avis Budget Group, Inc. (


) today reported results for its third quarter ended September 30, 2015. F or the quarter, the Company reported revenue of $2.6 billion and Adjusted EBITDA of $431 million. The Company reported adjusted net income of $206 million, or $1.98 per share, an increase of 4%. The Company's GAAP net income was $184 million, or $1.77 per share.

“Revenues and earnings grew year-over-year despite significant exchange-rate headwinds. Our growth reflected strong summer demand across Europe, lower per-unit fleet costs and benefits from our acquisitions,” said Ronald L. Nelson, Avis Budget Group Chairman and Chief Executive Officer. “We increased our share repurchase activity in the third quarter, buying back more stock than in any single quarter in our history as an independent company. Our share repurchases highlight our confidence in our earnings, cash flow and longer-term growth prospects.”

Executive Summary

Revenue increased 1% in third quarter 2015 and grew 8% in constant currency, primarily due to a 10% increase in rental days (6% excluding the acquisition of Maggiore) offset by an approximately $161 million (6%) negative impact from movements in currency exchange rates. Third quarter Adjusted EBITDA increased 3% to $431 million and grew 13% in constant currency. Results benefited from increased rental volumes, lower per-unit fleet costs, contributions from recent acquisitions and aggressive cost controls.

Thus far in 2015, the Company’s adjusted diluted earnings per share have increased 9% year-over-year, despite unfavorable movements in currency exchange rates.

Business Segment Discussion

The following discussion of third quarter operating results focuses on revenue and Adjusted EBITDA for each of our segments. Revenue and Adjusted EBITDA are expressed in millions.


% change

Revenue increased 2% primarily due to a 4% increase in volume and a 3% increase in ancillary revenue per rental day in constant currency. Pricing was unchanged in constant currency and declined 2% on a reported basis. Adjusted EBITDA increased 1% driven by increased rental volumes and lower per-unit fleet costs, partially offset by higher marketing expense and increased commissions.


Revenue was essentially unchanged despite a $134 million (17%) negative impact from movements in currency exchange rates compared to the prior year. Rental days increased 23%, and total revenue per rental day declined 2% in constant currency (comprised of a 6% increase in ancillary revenue per day and a 3% decline in pricing). Excluding the acquisition of Maggiore in April, rental days increased 12%, and total revenue per rental day increased 1% in constant currency (comprised of a 10% increase in ancillary revenue per day and a 1% decline in pricing). Adjusted EBITDA increased 6% due to increased volumes and lower per-unit fleet costs, partially offset by a $33 million negative impact from currency movements. Adjusted EBITDA increased 27% in constant currency.

Other Items

Share Repurchases

The Company repurchased approximately 3.7 million shares of its common stock at a cost of $161 million in the third quarter. As of September 30, 2015, the Company has repurchased a total of 13.1 million shares at a cost of $627 million since initiating its share repurchase program in August 2013.

CEO Succession

In September, the Company announced that Mr. Nelson will retire as Chief Executive Officer at year-end and will be succeeded by Larry D. De Shon, who had been the Company’s President, International, effective January 1, 2016. Mr. Nelson will continue to serve as the Company’s chairman.


In October, the Company entered into a definitive agreement to acquire its Avis licensee in Poland. The acquisition is expected to close in November, and the purchase price will be approximately $25 million plus the cost of acquired fleet.


The Company today narrowed its full-year 2015 expectations. The Company now expects:

Full-year 2015 revenue will increase approximately 1% compared to 2014. In the Company’s Americas segment, rental days are expected to increase approximately 4%, and pricing is expected to be largely unchanged in constant currency. Movements in currency exchange rates are negatively impacting revenue growth by approximately five points.

Adjusted EBITDA will increase 3% to 5%, to approximately $900 million to $925 million, including an approximately $50 million negative impact from movements in currency exchange rates.

Per-unit fleet costs in the Americas segment will be approximately $300 per month in 2015, a decline of 3% compared to 2014. Total Company per-unit fleet costs are expected to be $280 to $285 per month in 2015, compared to $305 in 2014, with the decrease attributable both to movements in currency exchange rates and to lower per-unit fleet costs throughout the Company’s operations.

Interest expense related to corporate debt will be approximately $200 million.

2015 non-vehicle depreciation and amortization expense (excluding the amortization of intangible assets related to acquisitions) will be approximately $165 million.

Adjusted pretax income will be approximately $535 million to $560 million.

The Company’s effective tax rate applicable to adjusted pretax income in 2015 will be approximately 39%, reflecting the effects of a tax rate change in the United Kingdom.

The Company’s diluted share count will be approximately 105 million, and its share repurchases will meaningfully exceed $300 million this year.

Based on these expectations, the Company estimates that its 2015 adjusted diluted earnings per share will increase 5% to 10% compared to 2014, to $3.10 to $3.25. Such estimate includes a negative impact from currency exchange rates of approximately 20 cents per share.

Investor Conference Call

Avis Budget Group will host a conference call to discuss third quarter results on November 3, 2015, at 8:30 a.m. (ET). Investors may access the call live at or by dialing (630) 395-0021 and providing the participant passcode 2995545. Investors are encouraged to dial in approximately 10 minutes prior to the call. A web replay will be available at following the call. A telephone replay will be available from 11:00 a.m. (ET) on November 3 until 8:00 p.m. (ET) on November 17 at (402) 220-5359.

About Avis Budget Group

Avis Budget Group, Inc. is a leading global provider of vehicle rental services, both through its Avis and Budget brands, which have more than 10,000 rental locations in approximately 175 countries around the world, and through its Zipcar brand, which is the world’s leading car sharing network, with more than 950,000 members. 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 30,000 employees and is headquartered in Parsippany, N.J. More information is available at

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” within the...