Avis Budget Group (CAR) Q4 2018 earnings summary

Executive summary

• Revenue reached a record $9.124B in 2018, up 3% YoY and marking the ninth consecutive year of growth; transactions exceeded 40M.

• Net income was $165M; Adjusted EBITDA was $781M, Adjusted Net Income $292M and Adjusted diluted EPS $3.65.

• Americas delivered stronger earnings and lower per-unit fleet costs, while International Adjusted EBITDA declined amid lower revenue per day and higher maintenance, damage and marketing costs.

Financial highlights

• Revenue was $9.124B vs. $8.848B in 2017; rental volume rose 4%, while revenue per day fell 1% excluding FX.

• Operating expenses were $4.639B; vehicle depreciation and lease charges were $2.179B, selling, general and administrative expenses $1.220B, and vehicle interest $314M.

• Net income fell 54% to $165M from $361M; diluted EPS was $2.06 vs. $4.25, with the comparison affected by Tax Act benefits in 2017 and a 2018 transition-tax adjustment.

• Operating cash flow was $2.609B; Adjusted free cash flow was $430M.

Outlook and guidance

• 2019 worldwide mobility demand was expected to increase, likely amid modest and potentially uneven global economic growth.

• Planned 2019 additions to non-vehicle property and equipment were approximately $235M.

• The target was a fully connected global fleet by 2020; connected vehicles in Europe were expected to expand during 2019.