SOURCE: Avis Budget Group, Inc.

Avis Budget Group, Inc.

August 04, 2009 16:15 ET

Avis Budget Group Reports Results for Second Quarter 2009

-- Second quarter revenue totaled $1.3 billion.

-- Second quarter EBITDA was $67 million and pretax income was $6 million excluding restructuring costs.

-- Second quarter pretax loss was $2 million.

-- Continued to be in full compliance with the financial covenants under its senior credit facility.

-- Achieving targeted cost savings, which are now expected to be at a $400 million annual run-rate by year-end.

PARSIPPANY, N.J.--(Marketwire - August 4, 2009) - Avis Budget Group, Inc. (NYSE: CAR) today announced results for its second quarter, which ended June 30, 2009. The Company had revenue of $1.3 billion, a decrease of 17% versus second quarter 2008, and a pretax loss of $2 million. Excluding restructuring costs, second quarter EBITDA was $67 million and pretax income was $6 million.

"While we continued to face sharply reduced demand for vehicle rentals in the second quarter, rental volumes did stabilize, and the actions we took to keep fleet levels in line with demand allowed us to achieve a stronger-than-expected 7% increase in domestic time and mileage revenue per day," said Ronald L. Nelson, Avis Budget Group Chairman and Chief Executive Officer.

"We also made significant progress in several other areas," added Mr. Nelson. "Our cost saving initiatives continued to deliver substantial benefits, as reflected in the 260-basis-point reduction in direct operating costs and 80-basis-point reduction in SG&A expense as a percentage of revenue for our car rental operations. Our ancillary revenues continued to benefit from our sales training initiative, increasing over 21% on a per day basis, and we continued to retain more than 99% of our commercial accounts. In addition, the used car market, and the performance of our used vehicles at auction, strengthened, and in July we became the first car rental company since 2007 to issue term asset-backed securities to finance our fleet."

Executive Summary

In the second quarter, our car rental revenues decreased 17% year-over-year, driven primarily by a 21% decrease in rental days. Time and mileage revenue per day increased 7% excluding the effects of foreign-exchange movements and increased 4% on a reported basis.

Our car rental fleet costs decreased 10% primarily due to a 21% reduction in our average fleet and an exchange rate benefit of 2% offset by a 16% increase in our per-unit fleet costs. The year-over-year increase in per-unit fleet costs primarily reflects costs associated with our continued efforts to reduce our fleet size due to lower-than-expected demand for vehicle rentals. Also in our car rental operations, other operating expenses decreased 260 basis points to 48.7% of revenue and declined 90 basis points excluding the impact of gas, despite the 17% decline in revenue, reflecting the Company's cost saving initiatives. Selling, general and administrative costs declined 80 basis points to 10.0% of revenue, also reflecting cost saving initiatives.

In Truck Rental, revenue declined but EBITDA increased modestly as an 8% decline in rental days and a slight decrease in price were offset by operating cost reductions and lower fleet costs.

In the second quarter, as expected, we recorded an $8 million restructuring charge primarily related to the elimination of 400 additional employee positions along with various facility closures, in conjunction with our five-point cost-reduction and efficiency improvement plan.

Business Segment Discussion

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

Domestic Car Rental
(Consisting of the Company's U.S. Avis and Budget car rental operations)

            2009      2008   % change
          -------   -------  --------
Revenue   $ 1,031   $ 1,241       (17%)
EBITDA    $    37   $    46       (20%)

Revenue declined primarily due to a 22% decrease in rental days offset by a 7% increase in time and mileage per day rates. EBITDA declined primarily due to lower revenue and increased per-unit fleet costs (which had a $50 million impact) partially offset by cost saving initiatives. EBITDA includes $6 million of restructuring costs and $10 million lower net gasoline expense in second quarter 2009.

International Car Rental
(Consisting of the Company's international Avis and Budget vehicle rental
operations)

            2009      2008   % change
          -------   -------  --------
Revenue   $   183   $   230       (20%)
EBITDA    $    18   $    25       (28%)

Revenue decreased primarily due to a 12% decrease in time and mileage per day rates and a 10% decrease in rental days. Excluding the impact of foreign exchange, time and mileage per day rates increased 4%. EBITDA decreased year-over-year primarily due to exchange rates. The effects of lower rental day volumes and higher fleet costs were largely offset by cost-reduction efforts. EBITDA includes $1 million of restructuring costs in second quarter 2009.

Truck Rental
(Consisting of the Company's Budget Truck rental business)

            2009      2008   % change
          -------   -------  --------
Revenue   $    97   $   105        (8%)
EBITDA    $     9   $     8        13%

Truck rental revenue declined and EBITDA increased as an 8% decline in rental days and a slight decrease in time and mileage rate per day were offset by cost-reduction efforts and lower fleet costs. EBITDA includes $1 million of restructuring costs in second quarter 2009.


Other Items

-- Debt Covenant Compliance - As of June 30, 2009, the Company remained
   in compliance with its financial covenant requirements under its senior
   credit facility. EBITDA for the latest twelve months for covenant
   purposes of approximately $155 million exceeded the requirement of
   $95 million.

-- Vehicle Financing - In May, the Company completed an approximately
   $325 million operating lease financing transaction for cars to be added
   to the fleet during the second and third quarters of 2009. In addition,
   in July, the Company's Avis Budget Rental Car Funding (AESOP) LLC
   subsidiary completed a $450 million three-year asset-backed securities
   offering to fund its domestic car rental fleet.

-- Performance Excellence - The Company's Performance Excellence process
   improvement program continued to provide significant cost savings in
   the second quarter. The initiative is expected to deliver more than
   $100 million of savings in 2009.

-- Cost-Reduction and Efficiency Improvement Plan - During the fourth
   quarter, the Company unveiled a five-point plan to reduce costs and
   increase efficiency in response to the economic conditions impacting
   the industry. The savings from this program are expected to total $220
   to $240 million in 2009 and will be incremental to savings from our
   Performance Excellence initiative. In the second quarter, the Company:
   - Eliminated an additional 400 positions, in addition to the 3,300
     positions eliminated during fourth quarter 2008 and first quarter
     2009;
   - Performed a detailed domestic city-by-city review of operating
     expenses to identify additional cost saving opportunities;
   - Instituted price increases taking effect in June and August;
   - Began to realize benefits from consolidating its procurement
     activities; and
   - Implemented numerous other actions to reduce costs.

   The Company had approximately 24,000 employees at June 30, 2009, a
   26% decrease compared to a year earlier.

-- Debt - The Company borrowed $100 million in second quarter 2009 under
   its revolving credit facility to fund working capital and fleet in its
   domestic operations. The Company's total debt balance (vehicle and
   non-vehicle) has declined by approximately $2.1 billion since
   June 30, 2008.

-- Relationships with Vehicle Manufacturers - Both Chrysler and General
   Motors continued to honor their obligations to the Company during their
   bankruptcies, and both manufacturers have assumed their contracts with
   Avis Budget as they emerged from Chapter 11.

Outlook

Airline capacity and domestic enplanements, which are a principal determinant of on-airport rental volumes, decreased markedly in the first half of 2009 compared to the year-earlier period, but demand for car rental seems to have stabilized in the second quarter. Third quarter demand, especially in the leisure segment, appears to be modestly stronger than recent trends, allowing some upward pressure on pricing to continue as our fleet levels remain in line with demand. Nevertheless, the Company continues to expect the macroeconomic environment, conditions in the credit markets, and demand for vehicle rentals to remain challenging in the second half of 2009. Fleet utilization in 2009 should be consistent with 2008 levels.

The used-car market rebounded significantly over the course of the second quarter. Our domestic fleet costs are expected to increase 7-9% on a per-unit basis in 2009, with year-over-year increases in the second half of 2009 expected to be considerably smaller than in the first half. The Company is continuing its efforts to reduce costs and enhance productivity through its Performance Excellence initiative and continues to expect the benefits of this program to exceed $100 million over the course of 2009. Such benefits are expected to be incremental to the over $250 million of annual savings generated by the Company's five-point cost-reduction and efficiency improvement plan and from cost-reduction actions the Company implemented in third quarter 2008.

The recent improvement in the asset-backed securities ("ABS") market allowed the Company to raise $450 million in July to replace a portion of the approximately $1 billion of its domestic term ABS debt that matures in 2010. The Company will seek to refinance most of the remainder of these 2010 domestic maturities in the second half of 2009, assuming market conditions remain favorable.

Investor Conference Call

Avis Budget Group will host a conference call to discuss second quarter results on August 5, 2009, at 9:00 a.m. (ET). Investors may access the call live at www.avisbudgetgroup.com or by dialing (210) 234-0038 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 www.avisbudgetgroup.com following the call. A telephone replay will be available from 2:00 p.m. (ET) on August 5, 2009 until 8:00 p.m. (ET) on August 12 at (203) 369-3068, access code: "Avis Budget."

About Avis Budget Group, Inc.

Avis Budget Group is a leading provider of vehicle rental services, with operations in more than 70 countries. Through its Avis and Budget brands, the Company is a leading general-use vehicle rental company in each of North America, Australia, New Zealand and certain other regions based on published airport statistics. Avis Budget Group is headquartered in Parsippany, N.J. and has approximately 24,000 employees. For more information about Avis Budget Group, visit www.avisbudgetgroup.com.

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", "may fluctuate", "forecast" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results, including all statements related to third quarter and full year 2009 results, future fleet costs, refinancing plans and cost saving initiatives are 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, a weaker-than-anticipated economic environment, the high level of competition in the vehicle rental industry, greater-than-expected cost increases for new vehicles, disposition of vehicles not covered by manufacturer repurchase programs, the financial condition of the manufacturers of our cars, a greater-than-anticipated downturn in airline passenger traffic, an 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, including our ability to issue debt under the TALF program and the financial condition of financial-guaranty firms that have insured a portion of our outstanding vehicle-backed debt, higher-than-expected fuel costs, 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 or amend financial covenants associated with its borrowings and the Company's ability to accurately estimate its future results and implement its strategy for cost savings and growth, particularly in the current environment. Other unknown or unpredictable factors also could 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, 2008 and Quarterly Report on Form 10-Q for the period ended March 31, 2009 included under headings such as "Forward-Looking Statements", "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" 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 non-GAAP financial measures as defined under SEC rules. As required by SEC rules, important information regarding such measures is contained on Table 5 to this release.

                                                                    Table 1

                          Avis Budget Group, Inc.
                            SUMMARY DATA SHEET
                   (In millions, except per share data)

                    Three Months Ended June 30,  Six Months Ended June 30,
                     -------------------------   ------------------------
                                          %                          %
                       2009     2008    Change     2009     2008   Change
                     -------  -------  -------   -------  -------  ------
Income Statement
 Items
  Net revenues       $ 1,312  $ 1,577      (17%) $ 2,506  $ 3,022     (17%)
  Income (loss)
   before income
   taxes                  (2)      25        *       (72)       7       *
  Net income
   (loss)                 (6)      15        *       (55)       4       *
  Earnings (loss)
   per share - Basic
   and Diluted         (0.06)    0.15        *     (0.54)    0.04       *

  Excluding Unusual
   Items (non-GAAP)
   (A)
  Net revenues       $ 1,312  $ 1,577      (17%) $ 2,506  $ 3,022     (17%)
  Income (loss)
   before income
   taxes                   6       25        *       (58)       7       *
  Net income (loss)       (2)      15        *       (46)       4       *
  Earnings (loss) per
   share - Basic
   and Diluted         (0.02)    0.15        *     (0.45)    0.04       *


                          As of
                     ----------------
                    June 30, December 31,
                       2009     2008
                     -------  -------
Balance Sheet Items
  Cash and cash
   equivalents (B)   $   434  $   258
  Vehicles, net        6,964    7,164
  Debt under vehicle
   programs            5,352    6,034
  Corporate debt       1,887    1,789
  Stockholders'
   equity                123       93


Segment Results
                    Three Months Ended June 30,  Six Months Ended June 30,
                     -------------------------   ------------------------
                                          %                          %
                       2009     2008    Change     2009     2008   Change
                     -------  -------  -------   -------  -------  ------
Net Revenues
Domestic Car Rental  $ 1,031  $ 1,241      (17%) $ 1,991  $ 2,377     (16%)
International Car
 Rental                  183      230      (20%)     347      460     (25%)
Truck Rental              97      105       (8%)     167      183      (9%)
Corporate and Other        1        1        *         1        2       *
                     -------  -------            -------  -------
Total Company        $ 1,312  $ 1,577      (17%) $ 2,506  $ 3,022     (17%)
                     =======  =======            =======  =======

EBITDA (C)
Domestic Car Rental  $    37  $    46      (20%) $    26  $    61     (57%)
International Car
 Rental                   18       25      (28%)      37       55     (33%)
Truck Rental               9        8       13%       (1)      (2)    (50%)
Corporate and Other       (5)      (2)       *       (11)      (7)      *
                     -------  -------            -------  -------
Total Company        $    59  $    77      (23%) $    51  $   107     (52%)
                     =======  =======            =======  =======

Reconciliation of
 EBITDA to Pretax
 Income (loss)
Total Company EBITDA $    59  $    77            $    51  $   107
Less: Non-vehicle
       related
       depreciation
       and
       amortization       24       20                 45       39
      Interest expense
       related to
       corporate
       debt, net          37       32                 77       61
      Impairment (A)       -        -                  1        -
                     -------  -------            -------  -------
Income (loss) before
 income taxes        $    (2) $    25        *   $   (72) $     7         *
                     =======  =======            =======  =======

*  Not meaningful.
(A) For the three and six months ended June 30, 2009, we recorded unusual
    items of $8 million and $14 million, respectively. For the three months
    ended June 30, 2009, these items consist of $8 million ($4 million,
    net of tax) in restructuring charges related to our cost-reduction and
    efficiency improvement plan. For the six months ended June 30, 2009,
    these items consist of (i) $13 million ($8 million, net of tax) in
    restructuring charges related to our cost-reduction and efficiency
    improvement plan and (ii) $1 million ($1 million, net of tax) for
    impairment of an investment.
(B) The balance at June 30, 2009 and December 31, 2008 includes $4 million
    and $10 million, respectively, of cash which will be utilized to pay
    separation costs or will be distributed to Realogy and Wyndham.
(C) See Table 5 for a description of EBITDA.

                                                                    Table 2

                          Avis Budget Group, Inc.
              CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                   (In millions, except per share data)

                                          Three Months      Six Months
                                         Ended June 30,    Ended June 30,
                                        ----------------  ----------------
                                          2009     2008     2009     2008
                                        -------  -------- -------  --------
Revenues
   Vehicle rental                       $   995  $  1,194 $ 1,913  $  2,313
   Other                                    317       383     593       709
                                        -------  -------- -------  --------
Net revenues                              1,312     1,577   2,506     3,022
                                        -------  -------- -------  --------

Expenses
   Operating                                648       811   1,288     1,588
   Vehicle depreciation and lease
    charges, net                            393       441     747       823
   Selling, general and administrative      133       173     267       344
   Vehicle interest, net                     71        74     140       159
   Non-vehicle related depreciation and
    amortization                             24        20      45        39
   Interest expense related to
    corporate debt, net                      37        32      77        61
   Restructuring charges                      8         -      13         -
   Impairment                                 -         -       1         -
   Separation costs, net                      -         1       -         1
                                        -------  -------- -------  --------
Total expenses                            1,314     1,552   2,578     3,015
                                        -------  -------- -------  --------

Income (loss) before income taxes            (2)       25     (72)        7
Provision for (benefit from) income
 taxes                                        4        10     (17)        3
                                        -------  -------- -------  --------
Net income (loss)                       $    (6) $     15 $   (55) $      4
                                        =======  ======== =======  ========

Earnings (loss) per share
   Basic and Diluted                    $ (0.06) $   0.15 $ (0.54) $   0.04

Weighted average shares outstanding
   Basic and Diluted                      102.2     101.4   102.0     102.1




                                                                    Table 3

                          Avis Budget Group, Inc.
                      SEGMENT REVENUE DRIVER ANALYSIS

                             Three Months Ended     Six Months Ended
                                  June 30,               June 30,
                          ----------------------- ------------------------
                                             %                        %
                           2009   2008(B)  Change     2009  2008(B) Change
                          ------- -------  ------   ------- ------- ------
CAR RENTAL

    Domestic Car Rental
     Segment

       Rental Days
        (000's)            19,604  25,225     (22%)  38,063  47,801   (20%)
       Time and Mileage
        Revenue per Day   $ 40.51 $ 37.82       7%  $ 40.60 $ 38.63     5%
       Average Rental
        Fleet             286,991 369,558     (22%) 283,465 350,799   (19%)

    International Car
     Rental Segment

       Rental Days
        (000's)             3,057   3,396     (10%)   6,291   6,907    (9%)
       Time and Mileage
        Revenue per
         Day (A)          $ 40.40 $ 46.12     (12%) $ 37.56 $ 46.39   (19%)
       Average Rental
        Fleet              49,595  55,058     (10%)  50,715  54,703    (7%)

    Total Car Rental

       Rental Days
        (000's)            22,661  28,621     (21%)  44,354  54,708   (19%)
       Time and Mileage
        Revenue per Day   $ 40.50 $ 38.81       4%  $ 40.17 $ 39.61     1%
       Average Rental
        Fleet             336,586 424,616     (21%) 334,180 405,502   (18%)

TRUCK RENTAL SEGMENT

       Rental Days
        (000's)             1,008   1,094      (8%)   1,793   1,956    (8%)
       Time and Mileage
        Revenue per Day   $ 76.35 $ 76.47      (0%) $ 73.50 $ 74.43    (1%)
       Average Rental
        Fleet              29,197  30,110      (3%)  29,357  29,611    (1%)

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) Of the decline in time and mileage per day, 16 percentage points and 20
    percentage points are due to changes in foreign exchange rates in the
    three months and six months ended June 30, 2009, respectively, with
    time and mileage revenue per day increasing by 4 percentage points and
    1 percentage point, respectively, excluding foreign-exchange effects.
(B) Amounts presented for 2008 rental days, time and mileage revenue per
    day and average rental fleet for Domestic Car Rental and Total Car
    Rental were adjusted, by less than 1%, to conform to the current year's
    presentation.




                                                                    Table 4

                          Avis Budget Group, Inc.
         CONSOLIDATED SCHEDULES OF CASH FLOWS AND FREE CASH FLOWS
                              (In millions)

                    CONSOLIDATED SCHEDULE OF CASH FLOWS

                                                          Six Months Ended
                                                            June 30, 2009
                                                            --------------
Operating Activities
 Net cash used in operating activities exclusive of vehicle
  programs                                                  $          (45)
 Net cash provided by operating activities of vehicle
  programs                                                             733
                                                            --------------
 Net cash provided by operating activities                             688
                                                            --------------

Investing Activities
 Net cash used in investing activities exclusive of vehicle
  programs                                                              (6)
 Net cash provided by investing activities of vehicle
  programs                                                              75
                                                            --------------
 Net cash provided by investing activities                              69
                                                            --------------

Financing Activities
 Net cash provided by financing activities exclusive of
  vehicle programs                                                      92
 Net cash used in financing activities of vehicle programs            (692)
                                                            --------------
 Net cash used in financing activities                                (600)
                                                            --------------

Effect of changes in exchange rates on cash and cash
 equivalents                                                            19
                                                            --------------
Net increase in cash and cash equivalents                              176
Cash and cash equivalents, beginning of period                         258
                                                            --------------
Cash and cash equivalents, end of period                    $          434
                                                            ==============


        CONSOLIDATED SCHEDULE OF FREE CASH FLOWS (A)

                                                          Six Months Ended
                                                            June 30, 2009
                                                            --------------
Pretax loss                                                 $          (72)
Addback of non-cash, non-vehicle related depreciation and
 amortization                                                           45
Working capital and other (B)                                           (1)
Capital expenditures                                                   (14)
Tax payments, net of refunds                                            (9)
Vehicle programs and (gain) loss on vehicle sales ©                  115
                                                            --------------
Free Cash Flow                                                          64

Borrowings, net                                                         94
Foreign exchange effects and other                                      18
                                                            --------------
Net increase in cash and cash equivalents (per above)       $          176
                                                            ==============

(A) See Table 5 for a description of Free Cash Flow.
(B) Working capital and other includes net separation-related outflows of
    $8 million.
(C) Primarily reflects vehicle-backed borrowings that are incremental to
    vehicle-backed borrowings required to fund incremental vehicle and
    vehicle backed assets.


       RECONCILIATION OF FREE CASH FLOW TO NET CASH
             PROVIDED BY OPERATING ACTIVITIES

                                                          Six Months Ended
                                                            June 30, 2009
                                                            --------------
Free Cash Flow (per above)                                  $           64
Cash (inflows) outflows included in Free Cash Flow but not
 reflected in Net Cash Provided by Operating Activities
 (per above)
  Investing activities of vehicle programs                             (75)
  Financing activities of vehicle programs                             692
  Capital expenditures                                                  14
  Proceeds received on asset sales                                      (7)
                                                            --------------
Net Cash Provided by Operating Activities (per above)       $          688
                                                            ==============




                                                                    Table 5

                          Avis Budget Group, Inc.
           DEFINITIONS AND RECONCILIATIONS OF NON-GAAP MEASURES
                              (In millions)

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

EBITDA
The accompanying press release presents EBITDA, which represents income
(loss) before non-vehicle related depreciation and amortization, any
impairment charge, non-vehicle related interest and income taxes. We
believe that EBITDA is useful as a supplemental measure in evaluating the
aggregate performance of our operating businesses. 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. 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 EBITDA may not be comparable
to similarly-titled measures used by other companies.

A reconciliation of 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.

Unusual items
The accompanying press release presents EBITDA and loss before income taxes
for the three and six months ended June 30, 2009, excluding unusual items.
Table 1 presents loss before income taxes, net loss and earnings per share,
excluding unusual items. For the three months ended June 30, 2009, unusual
items consisted of $8 million for restructuring-related expenses. For the
six months ended June 30, 2009, unusual items consisted of (i) $13 million
for restructuring-related expenses and (ii) a $1 million impairment charge
related to an investment.

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 and the impairment of an investment as such
items are not representative of the results of operations of our business
for the three and six months ended June 30, 2009.

  Reconciliation of Avis Budget Group, Inc. EBITDA excluding unusual items
   to net loss:

                                                Three Months   Six Months
                                                    Ended         Ended
                                                  June 30,      June 30,
                                                    2009          2009
                                                ------------  ------------
    EBITDA, excluding unusual items             $         67  $         64
    Less:   Non-vehicle related depreciation
             and amortization                             24            45
            Interest expense related to
             Corporate debt, net                          37            77
                                                ------------  ------------
    Income (loss) before income taxes,
     excluding unusual items                               6           (58)

    Less unusual items:
      Restructuring charges                                8            13
      Impairment                                           -             1
                                                ------------  ------------
    Loss before income taxes                              (2)          (72)
    Provision for (benefit from) income taxes              4           (17)
                                                ------------  ------------
    Net loss                                    $         (6) $        (55)
                                                ============  ============

  Reconciliation of net loss, excluding unusual
   items to net loss:

    Net loss, excluding unusual items           $         (2) $        (46)
    Less unusual items, net of tax:
      Restructuring charges                                4             8
      Impairment                                           -             1
                                                ------------  ------------
    Net loss                                    $         (6) $        (55)
                                                ============  ============

    Earnings (loss) per share, excluding
     unusual items (diluted)                    $      (0.02) $      (0.45)
                                                ============  ============

    Earnings (loss) per share (diluted)         $      (0.06) $      (0.54)
                                                ============  ============

    Shares used in non-GAAP per share
     calculations-diluted                              102.2         102.0
                                                ============  ============

Free Cash Flow
Represents Net Cash Provided by Operating Activities adjusted to include
the cash inflows and outflows relating to (i) capital expenditures and GPS
navigational units, (ii) the investing and financing activities of our
vehicle programs and (iii) asset sales, if any. We believe that Free Cash
Flow is useful to management and the 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 (Net Cash Provided by
Operating Activities) is presented in Table 4, which accompanies this press
release.

Contact Information

  • Contacts
    Media Contact:
    John Barrows
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