Avis Budget Group (CAR) Q4 2015 earnings summary

Executive summary

• FY15 revenue reached a record $8.502B and Adjusted EBITDA a record $903M; constant-currency growth was 5% and 9%, respectively.

• Served a record 35M+ customers; rental days rose 7% overall, or 5% excluding Maggiore.

• Q4 revenue was $1.902B; net loss was $5M and diluted EPS was -$0.06, versus $1.887B revenue, $23M net income and $0.21 diluted EPS in Q4 2014.

Financial highlights

• FY15 net revenue was $8.502B, up $17M YoY; currency reduced revenue by $444M, while total rental days increased 7% and constant-currency pricing declined 2%.

• Net income rose to $313M from $245M; diluted EPS was $2.98 versus $2.22. FY15 included a $98M tax benefit from resolving a prior-year tax matter.

• Adjusted EBITDA increased 3% to $903M, or 9% in constant currency, supported by higher rental volumes and lower cost per rental day.

• Adjusted EBITDA excludes non-vehicle D&A, impairment, restructuring, debt-extinguishment costs, corporate interest, transaction costs and income taxes; FY15 transaction costs were $68M and restructuring expense was $18M.

Outlook and guidance

• Expected modest and uneven global economic growth in 2016, with worldwide vehicle-rental and car-sharing demand anticipated to increase.

• Planned to pursue pricing increases in 2016 to improve returns on invested capital and profitability; vehicle supply was expected to remain adequate for replacement and growth needs.

• Expected approximately $210M of non-vehicle property and equipment additions in 2016 and approximately $10M of further acquisition-integration restructuring expense.

• Anticipated using most of the then-available share-repurchase capacity in 2016, following a January $300M authorization increase.