FALSE
0000723612
FALSE
FALSE
0000723612
2024-05-01
2024-05-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________
FORM
8-K
_________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
May 1, 2024
_________________
Avis Budget Group, Inc.
(Exact Name of Registrant as Specified in its Charter)
_________________
Delaware 001-10308 06-0918165
(State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification Number)
379 Interpace Parkway 07054
Parsippany, NJ
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (
973
)
496-4700
N/A
(Former name or former address if changed since last report)
_________________
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, Par Value $0.01 CAR The Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 ((s)240.12b-2 of this
chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
-------------------------------------------------------------------------------
Item 2.02 Results of Operations and Financial Condition.
On
May 1, 2024
, Avis Budget Group, Inc. (the "Company") reported its first quarter 2024
results. The first quarter 2024 results are discussed in detail in the press
release attached hereto as Exhibit 99.1, which is incorporated herein by
reference.
The information in this item, including Exhibit 99.1, is being furnished, not
filed. Accordingly, the information in this item will not be incorporated by
reference into any registration statement filed by the Company under the
Securities Act of 1933, as amended, unless specifically identified therein as
being incorporated therein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Press Release dated May 1, 2024.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
-------------------------------------------------------------------------------
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AVIS BUDGET GROUP, INC.
By: /s/ Cathleen DeGenova
Cathleen DeGenova
Vice President and Chief Accounting Officer
Date:
May 1, 2024
Avis Budget Group Reports First Quarter Results
PARSIPPANY, N.J., May 1, 2024
- Avis Budget Group, Inc. (
NASDAQ: CAR
) announced financial results for first quarter 2024 today.
We ended the quarter with revenues of $2.6 billion, driven by strong travel
demand. Net loss was $113 million and our Adjusted EBITDA
1
was $12 million.
Our liquidity position at the end of the quarter was approximately $0.7
billion, with an additional $3.8 billion of fleet funding capacity. We have
well-laddered corporate debt, and after giving effect to our euro note
repayment in April 2024, will have no meaningful maturities until 2027.
"The strong travel demand from last year continued into the first quarter with
record volume in the Americas as well as improved pricing trends as the
quarter progressed," said Joe Ferraro, Avis Budget Group Chief Executive
Officer. "We took the necessary actions to get our fleet size in-line by
disposing a record number of vehicles in the quarter allowing us to exit March
with utilization in-line with prior year. The steps we have taken in the first
quarter set us up well to take advantage of the peak spring and summer travel
seasons."
Q1 HIGHLIGHTS
.
Revenues were $2.6 billion with rental days up 5% compared to first quarter
2023.
.
Adjusted EBITDA in the Americas was $44 million, driven by strong demand.
.
Adjusted EBITDA loss in International was $15 million.
.
In February 2024, we issued 600 million Senior Notes due February 2029
primarily to redeem our outstanding 350 million Senior Notes due January 2026.
INVESTOR CONFERENCE CALL
We will host a conference call to discuss our first quarter results on May 2,
2024, at 8:30 a.m. (ET). Investors may access the call on our investor
relations website at ir.avisbudgetgroup.com or by dialing (877) 407-2991. A
replay of the call will be available on our website and at (877) 660-6853
using conference code 13743680.
_________________________
1
Adjusted EBITDA and certain other measures in this release are non-GAAP
financial measures. See "Non-GAAP Financial Measures and Key Metrics" and the
tables that accompany this release for the definitions and reconciliations of
these non-GAAP measures to the most comparable GAAP measures.
-------------------------------------------------------------------------------
ABOUT AVIS BUDGET GROUP
We are a leading global provider of mobility solutions, both through our Avis
and Budget brands, which have approximately 10,250 rental locations in
approximately 180 countries around the world, and through our Zipcar brand,
which is the world's leading car sharing network. We operate most of our car
rental locations in North America, Europe and Australasia directly, and
operate primarily through licensees in other parts of the world. We are
headquartered in Parsippany, N.J. More information is available at
avisbudgetgroup.com.
NON-GAAP FINANCIAL MEASURES AND KEY METRICS
This release includes financial measures such as Adjusted EBITDA and Adjusted
Free Cash Flow, as well as other financial measures, that are not considered
generally accepted accounting principle ("GAAP") measures as defined under SEC
rules. Important information regarding such non-GAAP measures is contained in
the tables within this release and in Appendix I, including the definitions of
these measures and reconciliations to the most comparable GAAP measures.
We measure performance principally using the following key metrics: (i) rental
days, (ii) revenue per day, (iii) vehicle utilization, and (iv) per-unit fleet
costs. Our rental days, revenue per day and vehicle utilization metrics are
all calculated based on the actual rental of the vehicle during a 24-hour
period. We believe that this methodology provides management with the most
relevant metrics in order to effectively manage the performance of our
business. Our calculations may not be comparable to the calculations of
similarly-titled metrics by other companies. We present currency exchange rate
effects on our key metrics to provide a method of assessing how our business
performed excluding the effects of foreign currency rate fluctuations.
Currency exchange rate effects are calculated by translating the current-period'
s results at the prior-period average exchange rates plus any related gains
and losses on currency hedges.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute "forward-looking
statements" as that term is defined in the Private Securities Litigation
Reform Act of 1995. The forward-looking statements contained herein are
subject to known and unknown risks, uncertainties, assumptions and other
factors that may cause our actual results, performance or achievements to be
materially different from those expressed or implied by any such forward-looking
statements. Forward-looking statements include information concerning our
future financial performance, business strategy, projected plans and
objectives. These statements may be identified by the fact that they do not
relate to historical or current facts and may use words such as "believes,"
"expects," "anticipates," "will," "should," "could," "may," "would,"
"intends," "projects," "estimates," "plans," "forecasts," "guidance," and
similar words, expressions or phrases. The following important factors and
assumptions could affect our future results and could cause actual results to
differ materially from those expressed in such forward-looking statements.
These factors include, but are not limited to:
.
the high level of competition in the mobility industry, including from new
companies or technology, and the impact such competition may have on pricing
and rental volume;
.
a change in our fleet costs, including as a result of a change in the cost of
new vehicles, resulting from inflation or otherwise, manufacturer recalls,
disruption in the supply of new vehicles, including due to labor actions or
otherwise, shortages in semiconductors used in new vehicle production, 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
vehicles, 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 vehicles available to us or the mobility industry as a whole on
commercially reasonable terms or at all;
.
levels of and volatility in travel demand, including future volatility in
airline passenger traffic;
2
-------------------------------------------------------------------------------
.
a deterioration in economic conditions, resulting in a recession or otherwise,
particularly during our peak season or in key market segments;
.
an occurrence or threat of terrorism, pandemic diseases such as COVID-19,
natural disasters, military conflicts,
including the ongoing military conflicts in the Middle East and Eastern Europe,
or civil unrest in the locations in which we operate, and
the potential effects of sanctions on the world economy and markets and/or
international trade
;
.
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, including
as a result of a global pandemic such as COVID-19, inflation, the ongoing
military conflicts in the Middle East and Eastern Europe, and
any embargoes on oil sales imposed on or by the Russian government
;
.
our ability to successfully implement or achieve our business plans and
strategies, achieve and maintain cost savings and adapt our business to
changes in mobility;
.
political, economic or commercial instability in the countries in which we
operate, and our ability to conform to multiple and conflicting laws or
regulations in tho
se countries;
.
the performance of the used vehicle market from time to time, including our
ability to dispose of vehicles in the used vehicle market on attractive terms;
.
our dependence on third-party distribution channels, third-party suppliers of
other services an
d co-marketing arrangements with third parties;
.
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;
.
our ability to utilize derivative instruments, and the impact of derivative
instruments we utilize, which can be affected by fluctuations in interest
rates, fuel prices and exchange rates, changes in government regulations and
other factors;
.
our exposure to uninsured or unpaid claims in excess of historical levels and
our ability to obtain insurance at desired levels and the cost of that
insurance;
.
risks associated with litigation or 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 personally identifiable information and consumer
privacy, labor and employment, and tax;
.
risks related to protecting the integrity of, and preventing unauthorized
access to, our information technology systems or those of our third-party
vendors, licensees, dealers, independent operators and independent
contractors, and protecting the confidential information of our employees and
customers against security breaches, including physical or cybersecurity
breaches, attacks, or other disruptions, compliance with privacy and data
protection regulation, and the effects of any potential increase in
cyberattacks on the world economy and markets and/or international trade;
.
any impact on us from the actions of our third-party vendors, licensees,
dealers, independent operators and independent contractors and/or disputes
that may arise out of our agreements with such parties;
.
any major disruptions in our communication networks or information systems;
.
risks related to tax obligations and the effect of future changes in tax laws
and accounting standards;
.
risks related to our indebtedness, including our substantial outstanding debt
obligations, recent and future interest rate increases, which increase our
financing costs, downgrades by rating agencies and our ability to incur
substantially more debt;
3
-------------------------------------------------------------------------------
.
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;
.
our ability to meet the financial and other covenants contained in the
agreements governing our indebtedness, or to obtain a waiver or amendment of
such covenants should we be unable to meet such covenants;
.
significant changes in the assumptions and estimates that are used in our
impairment testing for goodwill or intangible assets, which could result in a
significant impairment of our goodwill or intangible assets; and
.
other business, economic, competitive, governmental, regulatory, political or
technological factors affecting our operations, pricing or services.
We operate in a continuously changing business environment and new risk
factors emerge from time to time. New risk factors, factors beyond our
control, or changes in the impact of identified risk factors may cause actual
results to differ materially from those set forth in any forward-looking
statements. Accordingly, forward-looking statements should not be relied upon
as a prediction of actual results. Moreover, we do not assume responsibility
if future results are materially different from those forecasted or
anticipated. Other factors and assumptions not identified above, including
those discussed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," set forth in Part II, Item 7, in "Risk
Factors," set forth in Part I, Item 1A, and in other portions of our 2023
Annual Report on Form 10-K filed with the Securities and Exchange Commission
(the "SEC") on February 16, 2024 (the "2023 Form 10-K"), as well as in
similarly titled sections set forth in Part I, Item 2 and Part II, Item 1A of
our subsequently filed quarterly reports, may cause actual results to differ
materially from those projected in any forward-looking statements.
Although we believe that our assumptions are reasonable, any or all of our
forward-looking statements may prove to be inaccurate and we can make no
guarantees about our future performance. Should unknown risks or uncertainties
materialize or underlying assumptions prove inaccurate, actual results could
differ materially from past results and/or those anticipated, estimated or
projected. We undertake no obligation to release any revisions to any
forward-looking statements, to report events or to report the occurrence of
unanticipated events. For any forward-looking statements contained in any
document, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995.
For additional information concerning forward-looking statements and other
important factors, refer to our 2023 Form 10-K, Quarterly Reports on Form 10-Q
and other filings with the SEC.
Investor Relations Contact: Media Relations Contact:
David Calabria, IR@avisbudget.com James Tomlinson, ABGPress@edelman.com
*** Tables 1 - 6 and Appendix I attached ***
4
-------------------------------------------------------------------------------
Table 1
Avis Budget Group, Inc.
SUMMARY DATA SHEET (Unaudited)
(In millions, except per share data)
Three Months Ended March 31,
2024 2023 % Change
Income Statement
and Other Items
Revenues $ 2,551 $ 2,557 - %
Income (loss) (142) 397 (136) %
before income taxes
Net income (113) 312 (136) %
(loss)
Earnings (loss) per (3.21) 7.72 (142) %
share - diluted
Adjusted 12 535 (98) %
EBITDA
(a)
As of
March 31, December
2024 31, 2023
Balance
Sheet Items
Cash and Cash $ 522 $ 555
Equivalents
Program cash and 77 89
restricted cash
Vehicles, 22,020 21,240
net
Debt under 19,190 18,937
vehicle programs
Corporate 5,437 4,823
debt
Stockholders' equity attributable (515) (349)
to Avis Budget Group, Inc.
Three Months Ended March 31,
2024 2023 % Change
Segment Results
Revenues
Americas $ 1,993 $ 2,016 (1) %
International 558 541 3 %
Corporate and Other - - n/m
Total Company $ 2,551 $ 2,557 - %
Adjusted EBITDA
(a)
Americas $ 44 $ 516 (91) %
International (15) 50 (130) %
Corporate and Other (17) (31) 45 %
Total Company $ 12 $ 535 (98) %
_______
n/m Not meaningful.
(a) Refer to Table 5 for the reconciliation of net income to Adjusted EBITDA and
Appendix I for the related definition of the non-GAAP financial measure.
-------------------------------------------------------------------------------
Table 2
Avis Budget Group, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except per share data)
Three Months Ended
March 31,
2024 2023
Revenues $ 2,551 $ 2,557
Expenses
Operating 1,344 1,307
Vehicle depreciation and lease charges, net 636 265
Selling, general and administrative 325 324
Vehicle interest, net 239 133
Non-vehicle related depreciation and amortization 61 56
Interest expense related to corporate debt, net 83 73
Restructuring and other related charges 3 4
Transaction-related costs, net 1 -
Other (income) expense, net 1 (2)
Total expenses 2,693 2,160
Income (loss) before income taxes (142) 397
Provision for (benefit from) income taxes (29) 85
Net income (loss) (113) 312
Less: net income attributable to non-controlling interests 1 -
Net income (loss) attributable to Avis Budget Group, Inc. $ (114) $ 312
Earnings (loss) per share
Basic $ (3.21) $ 7.88
Diluted $ (3.21) $ 7.72
Weighted average shares outstanding
Basic 35.6 39.6
Diluted 35.6 40.4
-------------------------------------------------------------------------------
Table 3
Avis Budget Group, Inc.
KEY METRICS SUMMARY (Unaudited)
Three Months Ended
March 31,
2024 2023 % Change
Americas
Rental Days (000's) 29,692 28,274 5 %
Revenue per Day $ 67.12 $ 71.30 (6) %
Revenue per Day, excluding exchange rate effects $ 67.11 $ 71.30 (6) %
Average Rental Fleet 497,313 452,535 10 %
Vehicle Utilization 65.6 % 69.4 % (3.8) pps
Per-Unit Fleet Costs per Month $ 326 $ 128 155 %
Per-Unit Fleet Costs per Month, excluding exchange rate effects $ 326 $ 128 155 %
International
Rental Days (000's) 10,360 9,962 4 %
Revenue per Day $ 53.86 $ 54.28 (1) %
Revenue per Day, excluding exchange rate effects $ 53.88 $ 54.28 (1) %
Average Rental Fleet 170,071 168,298 1 %
Vehicle Utilization 66.9 % 65.8 % 1.1 pps
Per-Unit Fleet Costs per Month $ 292 $ 179 63 %
Per-Unit Fleet Costs per Month, excluding exchange rate effects $ 289 $ 179 61 %
Total
Rental Days (000's) 40,052 38,236 5 %
Revenue per Day $ 63.69 $ 66.87 (5) %
Revenue per Day, excluding exchange rate effects $ 63.69 $ 66.87 (5) %
Average Rental Fleet 667,384 620,833 7 %
Vehicle Utilization 65.9 % 68.4 % (2.5) pps
Per-Unit Fleet Costs per Month $ 318 $ 142 124 %
Per-Unit Fleet Costs per Month, excluding exchange rate effects $ 317 $ 142 123 %
_______
Refer to Table 6 for key metrics calculations and Appendix I for key metrics definitions.
-------------------------------------------------------------------------------
Table 4
Avis Budget Group, Inc.
CONSOLIDATED CONDENSED SCHEDULE OF CASH FLOW AND ADJUSTED FREE CASH FLOW
(Unaudited)
(In millions)
CONSOLIDATED CONDENSED SCHEDULE OF CASH FLOW Three Months Ended March 31, 2024
Operating Activities
Net cash provided by operating activities $ 589
Investing Activities
Net cash used in investing activities exclusive of vehicle programs (53)
Net cash used in investing activities of vehicle programs (1,465)
Net cash used in investing activities (1,518)
Financing Activities
Net cash provided by financing activities exclusive of vehicle programs 615
Net cash provided by financing activities of vehicle programs 282
Net cash provided by financing activities 897
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash (13)
Net change in cash and cash equivalents, program and restricted cash (45)
Cash and cash equivalents, program and restricted cash, beginning of period 644
Cash and cash equivalents, program and restricted cash, end of period $ 599
ADJUSTED FREE CASH FLOW
(a)
Adjusted EBITDA $ 12
(b)
Interest expense related to corporate debt, net (excluding early extinguishment of debt) (83)
Working capital and other (3)
Capital expenditures (56)
(c)
Tax payments, net of refunds (5)
Vehicle programs and related (504)
(d)
Adjusted Free Cash Flow $ (639)
(b)
Borrowings, net of debt repayments 641
Repurchases of common stock (15)
Change in program and restricted cash (11)
Other receipts (payments), net 2
Foreign exchange effects, financing costs and other (23)
Net change in cash and cash equivalents, program and restricted cash (per above) $ (45)
_______
Refer to Appendix I for the definitions of non-GAAP financial measures Adjusted EBITDA and Adjusted Free Cash Flow.
(a) This presentation demonstrates the relationship between Adjusted EBITDA and Adjusted
Free Cash Flow. We believe it is useful to understand this relationship because it
demonstrates how cash generated by our operations is used. This presentation is not
intended to be reconciliations of these non-GAAP measures, which are provided on Table 5.
(b) Refer to Table 5 for the reconciliations
of net income (loss) to Adjusted EBITDA
and net cash provided by operating
activities to Adjusted Free Cash Flow.
(c) Includes $3 million of cloud computing implementation costs.
(d) Includes vehicle-backed borrowings
(repayments) that are incremental
to amounts required to fund vehicle and vehicle-related assets.
-------------------------------------------------------------------------------
Table 5
Avis Budget Group, Inc.
RECONCILIATION OF NON-GAAP MEASURES (Unaudited)
(In millions)
Three Months Ended
March 31,
2024 2023
Reconciliation of Net income (loss) to Adjusted EBITDA:
Net income (loss) $ (113) $ 312
Provision for (benefit from) income taxes (29) 85
Income (loss) before income taxes (142) 397
Non-vehicle related depreciation and amortization 61 56
Interest expense related to corporate debt, net 83 73
Restructuring and other related charges 3 4
Transaction-related costs, net 1 -
Other (income) expense, net 1 (2)
Reported within operating expenses:
Cloud computing costs 10 7
Legal matters, net (5) -
Adjusted EBITDA $ 12 $ 535
Reconciliation of Net cash provided by operating activities
to Adjusted Free Cash Flow:
Net cash provided by operating activities $ 589
Net cash used in investing activities of vehicle programs (1,465)
Net cash provided by financing activities of vehicle programs 282
Capital expenditures (53)
Proceeds received on sale of assets and nonmarketable equity securities 1
Acquisition and disposition-related payments (2)
Change in program and restricted cash 11
Other receipts (payments), net (2)
Adjusted Free Cash Flow $ (639)
_______
Refer to Appendix I for the definitions of Adjusted EBITDA and Adjusted Free
Cash Flow, non-GAAP financial measures. For the three months ended March 31,
2024 and 2023, Adjusted EBITDA includes stock-based compensation expense and
vehicle related deferred financing fee amortization in the aggregate totaling
$15 million, in each period.
-------------------------------------------------------------------------------
Table 6
Avis Budget Group, Inc.
KEY METRICS CALCULATIONS (Unaudited)
($ in millions, except as noted)
Three Months Ended March 31, 2024 Three Months Ended March 31, 2023
Americas International Total Americas International Total
Revenue per
Day (RPD)
Revenue $ 1,993 $ 558 $ 2,551 $ 2,016 $ 541 $ 2,557
Currency - - - - - -
exchange
rate
effects
Revenue $ 1,993 $ 558 $ 2,551 $ 2,016 $ 541 $ 2,557
excluding
exchange
rate effects
Rental 29,692 10,360 40,052 28,274 9,962 38,236
days
(000's)
RPD excluding $ 67.11 $ 53.88 $ 63.69 $ 71.30 $ 54.28 $ 66.87
exchange
rate effects
(in $'s)
Vehicle
Utilization
Rental 29,692 10,360 40,052 28,274 9,962 38,236
days
(000's)
Average 497,313 170,071 667,384 452,535 168,298 620,833
rental
fleet
Number 91 91 91 90 90 90
of days
in
period
Available 45,255 15,477 60,732 40,728 15,147 55,875
rental
days
(000's)
Vehicle 65.6 % 66.9 % 65.9 % 69.4 % 65.8 % 68.4 %
utilization
Per-Unit
Fleet Costs
Vehicle $ 487 $ 149 $ 636 $ 174 $ 90 $ 264
depreciation
and lease
charges, net
Currency - (1) (1) - - -
exchange
rate
effects
Vehicle depreciation $ 487 $ 148 $ 635 $ 174 $ 90 $ 264
excluding
exchange
rate effects
Average 497,313 170,071 667,384 452,535 168,298 620,833
rental
fleet
Per-unit $ 979 $ 868 $ 951 $ 385 $ 537 $ 426
fleet
costs (in
$'s)
Number of 3 3 3 3 3 3
months
in
period
Per-unit fleet costs $ 326 $ 289 $ 317 $ 128 $ 179 $ 142
per month excluding
exchange rate
effects (in $'s)
_______
Our calculation of rental days and revenue per day may not be comparable to
the calculation of similarly-titled metrics by other companies. Currency
exchange rate effects are calculated by translating the current-period's
results at the prior-period average exchange rates plus any related gains and
losses on currency hedges.
-------------------------------------------------------------------------------
Appendix I
Avis Budget Group, Inc.
DEFINITIONS OF NON-GAAP MEASURES AND KEY METRICS
Adjusted EBITDA
The accompanying press release presents Adjusted EBITDA, which is a non-GAAP
measure most directly comparable to net income (loss). Adjusted EBITDA is
defined as income (loss) from continuing operations before non-vehicle related
depreciation and amortization; any impairment charges; restructuring and other
related charges; early extinguishment of debt costs; non-vehicle related
interest; transaction-related costs, net; legal matters, which includes
amounts recorded in excess of $5 million related to class action lawsuits and
personal injury matters; non-operational charges related to shareholder
activist activity, which includes third-party advisory, legal and other
professional fees; COVID-19 charges, net; cloud computing costs; other
(income) expense, net; and income taxes.
We believe Adjusted EBITDA is useful to investors as a supplemental measure in
evaluating the performance of our operating businesses and in comparing our
results from period to period. We also believe that Adjusted EBITDA is useful
to investors because it allows them to assess our results of operations and
financial condition on the same basis that management uses internally.
Adjusted EBITDA is a non-GAAP measure and should not be considered in
isolation or as a substitute for net income or other income statement data
prepared in accordance with U.S. GAAP. Our presentation of Adjusted EBITDA may
not be comparable to similarly titled measures used by other companies. A
reconciliation of Adjusted EBITDA from net income (loss) recognized under GAAP
is provided on Table 5.
Adjusted Free Cash Flow
Represents net cash provided by operating activities adjusted to reflect the
cash inflows and outflows relating to capital expenditures, the investing and
financing activities of our vehicle programs, asset sales, if any, and to
exclude debt extinguishment costs, transaction-related costs, restructuring
and other related charges, charges for legal matters, net, which includes
amounts recorded in excess of $5 million related to class action lawsuits and
personal injury matters, COVID-19 charges, other (income) expense, and
non-operational charges related to shareholder activist activity. We believe
that Adjusted Free Cash Flow is useful to management and investors in
measuring the cash generated that is available to be used to repay debt
obligations, repurchase stock, pay dividends and invest in future growth
through new business development activities or acquisitions. Adjusted Free
Cash Flow should not be construed as a substitute in measuring operating
results or liquidity, and our presentation of Adjusted Free Cash Flow may not
be comparable to similarly-titled measures used by other companies. A
reconciliation of Adjusted Free Cash Flow from net cash provided by operating
activities recognized under GAAP is provided on Table 5.
Adjusted EBITDA Margin
Represents Adjusted EBITDA as a percentage of revenues.
Available Rental Days
Defined as Average Rental Fleet times the numbers of days in a given period.
Average Rental Fleet
Represents the average number of vehicles in our fleet during a given period
of time.
Currency Exchange Rate Effects
Represents the difference between current-period results as reported and
current-period results translated at the prior-period average exchange rates
plus any related currency hedges.
Net Corporate Debt
Represents corporate debt minus cash and cash equivalents.
Net Corporate Leverage
Represents Net Corporate Debt divided by Adjusted EBITDA for the twelve months
prior to the date of calculation.
Per-Unit Fleet Costs
Represents vehicle depreciation, lease charges and gain or loss on vehicles
sales, divided by Average Rental Fleet.
Rental Days
Represents the total number of days (or portion thereof) a vehicle was rented
during a 24-hour period.
Revenue per Day
Represents revenues divided by Rental Days.
Vehicle Utilization
Represents Rental Days divided by Available Rental Days.
{graphic omitted}
{graphic omitted}
{graphic omitted}