Avis Budget Group (CAR) Q4 2013 earnings summary

Executive summary

• FY13 revenue rose 8% to $7.937B on higher rental volumes and Zipcar and Payless acquisitions; defined Adjusted EBITDA fell 12% to $708M, while net income declined to $16M from $290M.

• The shareholder letter separately cited Adjusted EBITDA of $769M, excluding certain items, down 8% YoY; Q4 revenue was $1.849B and net loss was $28M.

• Strategic priorities were profitable growth, broader global reach, customer experience improvements and operating efficiency.

Financial highlights

• Vehicle rental revenue increased 8% to $5.707B; other revenue increased 8% to $2.230B.

• Net income was $16M versus $290M; diluted EPS was $0.15 versus $2.42.

• Net income was burdened by $147M in debt-extinguishment costs, $61M in restructuring expense, $51M in transaction costs and a $33M Brazilian investment impairment.

• Rental days increased 3% excluding acquisitions; North America pricing rose 1% excluding Zipcar and Payless, with leisure pricing up 3%.

Outlook and guidance

• 2014 demand for rental and car-sharing services was expected to grow amid modest economic growth; fleet availability was expected to meet replacement and incremental demand.

• Planned 2014 priorities included further pricing increases, profitable growth, service improvements and continued efficiency gains.

• 2014 non-vehicle capital expenditures were estimated at $190M; substantially all of the $150M remaining share-repurchase authorization was expected to be used during 2014.