Market Overview

Avis Budget Group Delivers Record Fourth Quarter Revenue Driven By Overperformance in the Americas

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PARSIPPANY, N.J., Feb. 19, 2020 (GLOBE NEWSWIRE) -- Avis Budget Group, Inc. (NASDAQ:CAR) today reported a record fourth quarter and results for the full year ended December 31, 2019, driven by the strong performance in the Americas. We are also providing our outlook for 2020.

Fourth Quarter 2019 over Fourth Quarter 2018 Highlights:

  • Revenues increased to a record $2.2 billion, up 6% excluding currency exchange rate movements
  • Net income was $142 million or $1.90 per diluted share and Adjusted net income was $54 million or $0.73 per diluted share
  • Adjusted EBITDA increased to a record $143 million
  • Per-Unit Fleet Costs improved 3% excluding exchange rate effects
  • Utilization improved by 100 basis points

Full Year 2019 over Full Year 2018 Highlights:

  • Revenues increased to a record $9.2 billion, up 2% excluding currency exchange rate movements, for a tenth consecutive year of revenue growth
  • Net income was $302 million or $3.98 per diluted share and Adjusted net income was $279 million or $3.68 per diluted share
  • Adjusted EBITDA increased to $788 million, up 4% excluding currency exchange rate movements
  • Per-Unit Fleet Costs improved 5% excluding exchange rate effects
  • Repurchased approximately 2.2 million shares for a total of $62 million

Total Company

Fourth quarter revenues increased 6% compared to prior year excluding a $19 million impact from currency exchange rate movements, primarily due to a 5% increase in Rental Days and a 1% increase in Revenue per Day, excluding exchange rate effects. Per-Unit Fleet Costs, excluding exchange rate effects, improved by 3% and utilization improved 100 basis points. For the quarter, net income was $142 million, or $1.90 per diluted share. Adjusted EBITDA was $143 million and Adjusted net income was $54 million, or $0.73 per diluted share.

Full year revenues increased 2% compared to prior year excluding a $165 million impact from currency exchange rate movements, primarily due to a 3% increase in Rental Days. Per-Unit Fleet Costs, excluding exchange rate effects, improved by 5% and utilization improved 50 basis points. For the year, net income was $302 million, or $3.98 per diluted share. Adjusted EBITDA was $788 million including a $23 million impact from currency exchange rate movements and Adjusted net income was $279 million, or $3.68 per diluted share.

"We had a record fourth quarter, led by significant overperformance in the Americas and the single best December I have seen in the United States in my career," said Joe Ferraro, Avis Budget Group Interim Chief Executive Officer. "Adjusting our full year results to exclude exchange rate effects, we delivered Adjusted EBITDA of $800 million for 2019, at the high end of the range we provided in October. Additionally, the quarter is off to a strong start as the momentum we experienced in December has continued."

Americas Segment

Izzy Martins, Interim President, Americas commented, "The Americas delivered outstanding results in the fourth quarter, with a record Adjusted EBITDA of $144 million, which was 17% higher than prior year, driven by 8% rental day growth and improved vehicle costs."

International Segment

"We were able to grow International revenue year-over-year, while increasing revenue per day, excluding exchange rate effects, for the second quarter in a row," said Keith Rankin, President, International.

Capital Allocation and Liquidity

We repurchased approximately 2.2 million shares during 2019, for approximately $62 million under our share repurchase program.

As of December 31, 2019, our corporate debt was approximately $3.4 billion and cash and cash equivalents totaled $686 million, bringing net corporate debt to $2.7 billion, and our net corporate leverage ratio to 3.5x.

Weighted average diluted shares outstanding were 74.4 million in the quarter compared to 77.6 million in the prior year, a 4% quarter-over-quarter reduction.

Investor Conference Call

Avis Budget Group will host a conference call to discuss fourth quarter and full year results and its outlook on February 20, 2020, at 8:30 a.m. (ET). Investors may access the call at ir.avisbudgetgroup.com or by dialing (877) 407-2991 and a replay will be available on our website and at (877) 660-6853 using conference code 13698431.

Outlook

Our full-year 2020 outlook includes non-GAAP financial measures and excludes the effect of future changes in currency exchange rates. We believe that it is impracticable to provide a reconciliation to the most comparable GAAP measures due to the forward-looking nature of these forecasted Adjusted earnings measures and the degree of uncertainty associated with forecasting the reconciling items and amounts. We further believe that providing estimates of the amounts that would be required to reconcile the forecasted adjusted measures to forecasted GAAP measures would imply a degree of precision that would be confusing or misleading to investors. The after-tax effect of such reconciling items could be significant to our future quarterly or annual results.

2020 guidance:

$ millions *       2020 Estimates
Revenues       $9,400 - $9,600
Adjusted EBITDA       $750 - $850
Adjusted pretax income       $375 - $475
Adjusted net income       $250 - $350
Adjusted diluted earnings per share       $3.75 - $4.75
Adjusted free cash flow       $275 - $325

* Excluding Adjusted diluted earnings per share.
Non-vehicle related depreciation and amortization excludes acquisition-related amortization expense.
Interest expense related to corporate debt, net excludes early extinguishment of debt.

 Americas

% change       vs prior year
Rental Days       2% - 5%
Revenue per Day       0% - 2%
Per-Unit Fleet Costs per Month       0% - 3%

Revenue per Day and Per-Unit Fleet Costs per Month exclude exchange rate effects.

International

% change       vs prior year
Rental Days       0% - 3%
Revenue per Day       0% - 2%
Per-Unit Fleet Costs per Month       1% - 4%

Revenue per Day and Per-Unit Fleet Costs per Month exclude exchange rate effects.

About Avis Budget Group

Avis Budget Group, Inc. is a leading global provider of mobility solutions, both through its Avis and Budget brands, which have more than 11,000 rental locations in approximately 180 countries around the world, and through its Zipcar brand, which is the world's leading car sharing network with more than one million members. Avis Budget Group operates most of its car rental offices in North America, Europe and Australasia directly, and operates primarily through licensees in other parts of the world. Avis Budget Group has approximately 30,000 employees and is headquartered in Parsippany, N.J. More information is available at avisbudgetgroup.com.

Forward-Looking Statements

Certain statements in this press release constitute "forward-looking statements." Any statements that refer to outlook, expectations or other characterizations of future events, circumstances or results, including all statements related to our future results, future fleet costs, acquisition synergies, cost-saving initiatives, cash flows and future share repurchases 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, the high level of competition in the mobility industry, changes in our fleet costs as a result of a change in the cost of new vehicles, manufacturer recalls and/or the value of used vehicles, disruption in the supply of new vehicles, disposition of vehicles not covered by manufacturer repurchase programs, the financial condition of the manufacturers that supply our rental vehicles which could affect their ability to perform their obligations under our repurchase and/or guaranteed depreciation arrangements, any change in economic conditions generally, particularly during our peak season and/or in key market segments, any change in travel demand, including changes in airline passenger traffic, any occurrence or threat of terrorism, any changes to the cost or supply of fuel, risks related to acquisitions or integration of acquired businesses, risks associated with litigation, governmental or regulatory inquiries or investigations, risks related to the security of our information technology systems, disruptions in our communication networks, changes in tax or other regulations, a significant increase in interest rates or borrowing costs, our ability to obtain financing for our global operations, including the funding of our vehicle fleet via asset-backed securities markets, any fluctuations related to the mark-to-market of derivatives which hedge our exposure to exchange rates, interest rates and fuel costs, our ability to meet the covenants contained in the agreements governing our indebtedness, and our ability to accurately estimate our future results and implement our strategy for growth and cost savings. Other unknown or unpredictable factors could also have material adverse effects on the Company's performance or achievements. 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, 2018 and in other filings and furnishings made by the Company with the Securities and Exchange Commission (the "SEC") from time to time. The Company undertakes no obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

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 exclude certain items that are not considered generally accepted accounting principles ("GAAP") measures as defined under SEC rules. Important information regarding such measures is contained on Table 1, Table 4, Table 5 and Appendix I of this release. The Company and its management believe that these non-GAAP measures are useful to investors in measuring the comparable results of the Company period-over-period. The GAAP measures most directly comparable to Adjusted EBITDA, Adjusted free cash flow, Adjusted pretax income (loss), Adjusted net income (loss) and Adjusted diluted earnings (loss) per share are net income (loss), net cash provided by operating activities, income (loss) before income taxes, net income (loss) and diluted earnings (loss) per share, respectively. Foreign currency translation effects on the Company's results are quantified by translating the current period's non-U.S. dollar-denominated results using the currency exchange rates of the prior period of comparison including any related gains and losses on currency hedges. Per-unit fleet costs, which represent vehicle depreciation, lease charges and gain or loss on vehicle sales, divided by average rental fleet, are calculated on a per-month basis.

Share Repurchase Program

The Company's share repurchases may occur through open market purchases or trading plans pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements and other factors. The repurchase program may be suspended, modified or discontinued at any time without prior notice. The repurchase program has no set expiration or termination date.


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

      Three Months Ended December 31,   Year Ended December 31,
      2019   2018   % Change   2019   2018   % Change
Income Statement and Other Items                      
  Revenues $ 2,162     $ 2,050     5 %   $ 9,172     $ 9,124     1 %
  Income before income taxes 14     3     n/m   287     267     7 %
  Net income 142     13     n/m   302     165     83 %
  Earnings per share - diluted 1.90     0.16     n/m   3.98     2.06     93 %
                           
  Adjusted Earnings Measures (non-GAAP) (A)                      
  Adjusted EBITDA 143     142     1 %   788     781     1 %
  Adjusted pretax income 48     42     14 %   403     398     1 %
  Adjusted net income 54     41     32 %   279     292     (4 %)
  Adjusted earnings per share - diluted 0.73     0.53     38 %   3.68     3.65     1 %
                           
      As of                
      December 31, 2019   December 31, 2018                
Balance Sheet Items                      
  Cash and cash equivalents $ 686     $ 615                  
  Vehicles, net 12,177     11,474                  
  Debt under vehicle programs 11,068     10,232                  
  Corporate debt 3,435     3,551                  
  Stockholders' equity 656     414                  


Segment Results                      
  Three Months Ended December 31,   Year Ended December 31,
  2019   2018   % Change   2019   2018   % Change
Revenues                      
Americas $ 1,530     $ 1,404     9 %   $ 6,352     $ 6,186     3 %
International 632     646     (2 %)   2,820     2,938     (4 %)
Corporate and Other       n/m         n/m
Total Company $ 2,162     $ 2,050     5 %   $ 9,172     $ 9,124     1 %
                           
Adjusted EBITDA                      
Americas $ 144     $ 123     17 %   $ 652     $ 558     17 %
International 16     35     (54 %)   203     287     (29 %)
Corporate and Other (17 )   (16 )   n/m   (67 )   (64 )   n/m
Total Company $ 143     $ 142     1 %   $ 788     $ 781     1 %


n/m Not meaningful.
(A) See Table 5 for reconciliations of non-GAAP measures and Appendix I for definitions.


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

    Three Months Ended December 31,   Year Ended December 31,
    2019   2018   2019   2018
Revenues $ 2,162     $ 2,050     $ 9,172     $ 9,124  
                 
Expenses              
  Operating 1,164     1,078     4,698     4,639  
  Vehicle depreciation and lease charges, net 484     486     2,063     2,179  
  Selling, general and administrative 290     267     1,237     1,220  
  Vehicle interest, net 83     77     344     314  
  Non-vehicle related depreciation and amortization 68     66     263     256  
  Interest expense related to corporate debt, net:              
  Interest expense 39     49     178     188  
  Early extinguishment of debt 2     14     12     19  
  Restructuring and other related charges 14     8     80     22  
  Transaction-related costs, net 4     2     10     20  
Total expenses 2,148     2,047     8,885     8,857  
                 
Income before income taxes 14     3     287     267  
Provision for (benefit from) income taxes (128 )   (10 )   (15 )   102  
Net income $ 142     $ 13     $ 302     $ 165  
                 
Earnings per share - diluted              
  Basic $ 1.92     $ 0.16     $ 4.01     $ 2.08  
  Diluted $ 1.90     $ 0.16     $ 3.98     $ 2.06  
                 
Weighted average shares outstanding              
  Basic 73.9     76.9     75.2     79.3  
  Diluted 74.4     77.6     75.7     80.1  


Avis Budget Group, Inc.
KEY METRICS SUMMARY

        Three Months Ended December 31,   Year Ended December 31,
        2019   2018   % Change   2019   2018   % Change
                             
Americas                        
                             
    Rental Days (000's)   26,509     24,648     8 %   111,758     108,732     3 %
    Revenue per Day, excluding exchange rate effects (A)   $ 57.70     $ 56.93     1 %   $ 56.94     $ 56.89     0 %
    Average Rental Fleet   416,801     395,607     5 %   434,570     425,957     2 %
    Vehicle Utilization   69.1 %   67.7 %   140 bps   70.5 %   69.9 %   60 bps
    Per-Unit Fleet Costs per Month, excluding exchange rate effects (A)   $ 271     $ 288     (6 %)   $ 281     $ 307     (8 %)
                             
International                        
                             
    Rental Days (000's)   13,772     13,692     1 %   59,161     57,797     2 %
    Revenue per Day, excluding exchange rate effects (A)   $ 47.25     $ 47.22     0 %   $ 50.26     $ 50.84     (1 %)
    Average Rental Fleet   213,887     213,719     0 %   225,891     221,823     2 %
    Vehicle Utilization   70.0 %   69.6 %   40 bps   71.8 %   71.4 %   40 bps
    Per-Unit Fleet Costs per Month, excluding exchange rate effects (A)   $ 232     $ 223     4 %   $ 234     $ 229     2 %
                             
Total                        
                             
    Rental Days (000's)   40,281     38,340     5 %   170,919     166,529     3 %
    Revenue per Day, excluding exchange rate effects (A)   $ 54.13     $ 53.46     1 %   $ 54.63     $ 54.79     0 %
    Average Rental Fleet   630,688     609,326     4 %   660,461     647,780     2 %
    Vehicle Utilization   69.4 %   68.4 %   100 bps   70.9 %   70.4 %   50 bps
    Per-Unit Fleet Costs per Month, excluding exchange rate effects (A)   $ 258     $ 265     (3 %)   $ 265     $ 280     (5 %)
_______            
Refer to Table 6 for key metrics calculations and Appendix I for key metrics definitions.
(A) The following metrics include changes in currency exchange rates:
        Three Months Ended December 31,   Year Ended December 31,
        2019   2018   % Change   2019   2018   % Change
                             
Americas                        
                             
    Revenue per Day   $ 57.70     $ 56.93     1 %   $ 56.84     $ 56.89     0 %
    Per-Unit Fleet Costs per Month   $ 271     $ 288     (6 %)   $ 280     $ 307     (9 %)
                             
International                        
                             
    Revenue per Day   $ 45.86     $ 47.22     (3 %)   $ 47.66     $ 50.84     (6 %)
    Per-Unit Fleet Costs per Month   $ 225     $ 223     1 %   $ 222     $ 229     (3 %)
                             
Total                        
                             
    Revenue per Day   $ 53.65     $ 53.46     0 %   $ 53.66     $ 54.79     (2 %)
    Per-Unit Fleet Costs per Month   $ 255     $ 265     (4 %)   $ 260     $ 280     (7 %)


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

CONSOLIDATED CONDENSED SCHEDULE OF CASH FLOWS

      Year Ended December 31, 2019
Operating Activities  
Net cash provided by operating activities $ 2,586  
       
Investing Activities  
Net cash used in investing activities exclusive of vehicle programs (235 )
Net cash used in investing activities of vehicle programs (2,517 )
Net cash used in investing activities (2,752 )
       
Financing Activities  
Net cash provided by (used in) financing activities exclusive of vehicle programs (182 )
Net cash provided by (used in) financing activities of vehicle programs 500  
Net cash provided by (used in) financing activities 318  
       
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 165  
Cash and cash equivalents, program and restricted cash, beginning of period (A) 735  
Cash and cash equivalents, program and restricted cash, end of period (B) $ 900  


  _______
(A) Consists of cash and cash equivalents of $615 million, program cash of $115 million and restricted cash of $5 million.
(B) Consists of cash and cash equivalents of $686 million, program cash of $211 million and restricted cash of $3 million.


CONSOLIDATED SCHEDULE OF ADJUSTED FREE CASH FLOWS (C)

      Year Ended December 31, 2019
Income before income taxes $ 287  
Add-back of non-vehicle related depreciation and amortization 263  
Add-back of restructuring and other related costs 80  
Add-back of debt extinguishment costs 12  
Add-back of transaction-related costs 10  
Add-back of non-operational charges related to shareholder activist activity 2  
Working capital and other 66  
Capital expenditures (250 )
Tax payments, net of refunds (89 )
Vehicle programs and related (D) (104 )
Adjusted free cash flow 277  
       
Acquisition and related payments, net of acquired cash (E) (54 )
Dispositions, net of tax payments (F) 64  
Borrowings, net of debt repayments (108 )
Restructuring and other related payments (35 )
Transaction-related payments (15 )
Repurchases of common stock (67 )
Change in program cash 94  
Change in restricted cash (2 )
Foreign exchange effects, financing costs and other 11  
Net change in cash and cash equivalents, program and restricted cash (per above) $ 165  


  _______
(C) The Company has revised its definition of Adjusted free cash flow to exclude payments for restructuring and other related charges. Our calculation of Adjusted free cash flow may not be comparable to the calculation of similarly-titled measures used by other companies. See Appendix I for the definition of Adjusted free cash flow.
(D) Includes vehicle-backed borrowings (repayments) that are incremental to amounts required to fund incremental (reduced) vehicle and vehicle-related assets.
(E) Excludes $26 million of vehicles purchased as a part of North America licensee acquisitions, which were financed through incremental vehicle-backed borrowings, and includes an equity method investment of $3 million in our licensee in Greece.
(F) Proceeds received on the sale of our equity method investment in China, net of cross-border withholding taxes of $4 million.


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

      Year Ended December 31, 2019
Net cash provided by operating activities (per above) $ 2,586  
Investing activities of vehicle programs (2,517 )
Financing activities of vehicle programs 500  
Capital expenditures (250 )
Proceeds received on sale of assets and nonmarketable equity securities 23  
Change in program cash (94 )
Change in restricted cash 2  
Acquisition and disposition-related payments (23 )
Restructuring and other related payments 35  
Transaction-related payments 15  
Adjusted free cash flow (per above) $ 277  


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

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 the reasons we present these non-GAAP financial measures and a description of what they represent in Appendix I. For each non-GAAP financial measure a reconciliation to the most comparable GAAP financial measure is calculated and presented below with reconciliations of net income, income before income taxes and diluted earnings per share to Adjusted EBITDA and our Adjusted earnings measures.

      December 31, 2019
Reconciliation of net income to Adjusted EBITDA: Three Months Ended   Year Ended
         
  Net income $ 142     $ 302  
  Benefit from income taxes (128 )   (15 )
  Income before income taxes 14     287  
           
  Add certain items:      
  Restructuring and other related charges 14     80  
  Acquisition-related amortization expense 12     56  
  Early extinguishment of debt 2     12  
  Transaction-related costs, net 4     10  
  Non-operational charges related to shareholder activist activity (A) 2     2  
  Gain on sale of equity method investment in China (B)     (44 )
  Adjusted pretax income 48     403  
         
  Add: Non-vehicle related depreciation and amortization (excluding acquisition-related amortization expense) 56     207  
    Interest expense related to corporate debt, net (excluding early extinguishment of debt) 39     178  
  Adjusted EBITDA $ 143     $ 788  
           
Reconciliation of net income to adjusted net income:
           
  Net income $ 142     $ 302  
  Add certain items, net of tax:      
    Restructuring and other related charges 11     62  
    Acquisition-related amortization expense 9     41  
    Early extinguishment of debt 2     9  
    Transaction-related costs, net 2     7  
    Non-operational charges related to shareholder activist activity 1     1  
    Gain on sale of equity method investment in China     (30 )
    One-time tax benefit arising from implementation of tax planning strategies (113 )   (113 )
  Adjusted net income $ 54     $ 279  
           
  Earnings per share - Diluted $ 1.90     $ 3.98  
           
  Adjusted diluted earnings per share $ 0.73     $ 3.68  
           
  Shares used to calculate Adjusted diluted earnings per share 74.4     75.7  


(A) Reported within selling, general and administrative in our Consolidated Statements of Operations.
(B) Reported within operating expenses in our Consolidated Statements of Operations.


      December 31, 2018
Reconciliation of net income to Adjusted EBITDA: Three Months Ended   Year Ended
         
  Net income $ 13     $ 165  
  Provision for (benefit from) income taxes (10 )   102  
  Income before income taxes 3     267  
           
  Add certain items:      
  Acquisition-related amortization expense 15     61  
  Restructuring and other related charges 8     22  
  Transaction-related costs, net 2     20  
  Early extinguishment of debt 14     19  
  Non-operational charges related to shareholder activist activity (A)     9  
  Adjusted pretax income 42     398  
         
  Add: Non-vehicle related depreciation and amortization (excluding acquisition-related amortization expense) 51     195  
    Interest expense related to corporate debt, net (excluding early extinguishment of debt) 49     188  
  Adjusted EBITDA $ 142     $ 781  
           
Reconciliation of net income to adjusted net income:  
           
  Net income $ 13     $ 165  
  Add certain items, net of tax:      
    Acquisition-related amortization expense 10     43  
    Income tax provision from the Tax Act (B)     30  
    Restructuring and other related charges 6     17  
    Transaction-related costs, net 2     16  
    Early extinguishment of debt 10     14  
    Non-operational charges related to shareholder activist activity     7  
  Adjusted net income $ 41     $ 292  
           
  Earnings per share - Diluted $ 0.16     $ 2.06  
           
  Adjusted diluted earnings per share $ 0.53     $ 3.65  
           
  Shares used to calculate Adjusted diluted earnings per share 77.6     80.1  


(A) Reported within selling, general and administrative expenses in our Consolidated Statements of Operations.
(B) In 2018, as a result of the Tax Act, the adjustment of incremental tax expense related to cumulative foreign earnings initially recorded in the fourth quarter of 2017.


Avis Budget Group, Inc.
KEY METRICS CALCULATIONS
($ in millions, except as noted)

      Three Months Ended December 31, 2019   Three Months Ended December 31, 2018
      Americas   International   Total   Americas   International   Total
Revenue per Day (RPD)                      
  Revenue $ 1,530     $ 632     $ 2,162     $ 1,404     $ 646     $ 2,050  
  Currency exchange rate effects     19     19              
  Revenue excluding exchange rate effects $ 1,530     $ 651     $ 2,181     $ 1,404     $ 646     $ 2,050  
  Rental days (000's) 26,509     13,772     40,281     24,648     13,692     38,340  
  RPD excluding exchange rate effects
  (in $'s)
$ 57.70     $ 47.25     $ 54.13     $ 56.93     $ 47.22     $ 53.46  
                         
Vehicle Utilization                      
  Rental days (000's) 26,509     13,772     40,281     24,648     13,692     38,340  
  Average rental fleet 416,801     213,887     630,688     395,607     213,719     609,326  
  Number of days in period 92     92     92     92     92     92  
  Available rental days (000's) 38,346     19,677     58,023     36,396     19,662     56,058  
  Vehicle utilization 69.1 %   70.0 %   69.4 %   67.7 %   69.6 %   68.4 %
                           
Per-Unit Fleet Costs                      
  Vehicle depreciation and lease charges, net $ 339     $ 145     $ 484     $ 342     $ 144     $ 486  
  Currency exchange rate effects     3     3              
    $ 339     $ 148     $ 487     $ 342     $ 144     $ 486  
  Average rental fleet 416,801     213,887     630,688     395,607     213,719     609,326  
  Per-unit fleet costs (in $'s) $ 813     $ 696     $ 773     $ 864     $ 670     $ 796  
  Number of months in period 3     3     3     3     3     3  
  Per-unit fleet costs per month excluding exchange rate effects (in $'s) $ 271     $ 232     $ 258     $ 288     $ 223     $ 265  


      Year Ended December 31, 2019   Year Ended December 31, 2018
      Americas   International   Total   Americas   International   Total
Revenue per Day (RPD)                      
  Revenue $ 6,352     $ 2,820     $ 9,172     $ 6,186     $ 2,938     $ 9,124  
  Currency exchange rate effects 11     154     165              
  Revenue excluding exchange rate effects $ 6,363     $ 2,974     $ 9,337     $ 6,186     $ 2,938     $ 9,124  
  Rental days (000's) 111,758     59,161     170,919     108,732     57,797     166,529  
  RPD excluding exchange rate effects
  (in $'s)
$ 56.94     $ 50.26     $ 54.63     $ 56.89     $ 50.84     $ 54.79  
                         
Vehicle Utilization                      
  Rental days (000's) 111,758     59,161     170,919     108,732     57,797     166,529  
  Average rental fleet 434,570     225,891     660,461     425,957     221,823     647,780  
  Number of days in period 365     365     365     365     365     365  
  Available rental days (000's) 158,618     82,450     241,068     155,474     80,966     236,440  
  Vehicle utilization 70.5 %   71.8 %   70.9 %   69.9 %   71.4 %   70.4 %
                           
Per-Unit Fleet Costs                      
  Vehicle depreciation and lease charges, net $ 1,462     $ 601     $ 2,063     $ 1,568     $ 611     $ 2,179  
  Currency exchange rate effects 2     32     34              
    $ 1,464     $ 633     $ 2,097     $ 1,568     $ 611     $ 2,179  
  Average rental fleet 434,570     225,891     660,461     425,957     221,823     647,780  
  Per-unit fleet costs (in $'s) $ 3,368     $ 2,804     $ 3,175     $ 3,682     $ 2,751     $ 3,363  
  Number of months in period 12     12     12     12     12     12  
  Per-unit fleet costs per month excluding exchange rate effects (in $'s) $ 281     $ 234     $ 265     $ 307     $ 229     $ 280  


_______      
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-year 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 represents 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 charges for unprecedented personal-injury legal matters, non-operational charges related to shareholder activist activity, gain on sale of equity method investment in China and income taxes. Net charges for unprecedented personal-injury legal matters and gain on sale of equity method investment in China are recorded within operating expenses in our consolidated condensed statement of operations. Non-operational charges related to shareholder activist activity include third party advisory, legal and other professional service fees and are recorded within selling, general and administrative expenses in our consolidated results of operations. We have revised our definition of Adjusted EBITDA to exclude the gain on sale of equity method investment in China. We did not revise prior years' Adjusted EBITDA amounts because there were no gains similar in nature to this gain. Adjusted EBITDA includes stock-based compensation expense and deferred financing fee amortization totaling $10 million and $11 million in fourth quarter 2019 and 2018, respectively, and totaling $44 million and $43 million in the year ended December 31, 2019 and 2018, respectively.

We believe that Adjusted EBITDA is useful to investors as a supplemental measure in evaluating the aggregate performance of our operating businesses and in comparing our results from period to period. Adjusted EBITDA is the measure that is used by our management, including our chief operating decision maker, to perform such evaluation. Adjusted EBITDA is also a component in the determination of management's compensation. Adjusted EBITDA should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with GAAP and 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 Earnings Non-GAAP Measures
The accompanying press release and tables present Adjusted pretax income (loss), Adjusted net income (loss) and Adjusted diluted earnings (loss) per share, which exclude certain items. We believe that these measures referred to above are useful to investors as supplemental measures in evaluating the aggregate performance of the Company. We exclude restructuring and other related charges, transaction-related costs, costs related to early extinguishment of debt and other certain items as such items are not representative of the results of operations of our business less a provision for income taxes derived utilizing applicable statutory tax rates for each item. A reconciliation of our Adjusted earnings Non-GAAP measures from the appropriate measures 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 and non-operational charges related to shareholder activist activity. We have revised our definition of Adjusted Free Cash Flow to exclude restructuring and other related charges and have revised prior years' Adjusted Free Cash Flow amounts accordingly. We believe this change is meaningful to investors as it brings the measurement in line with our other non-GAAP measures. 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 to the appropriate measure recognized under GAAP is provided on Table 4.

Available Rental Days
Defined as Average Rental Fleet times the number 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 vehicle 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.

Contacts
Media Contact:
Katie McCall
PR@avisbudget.com

Investor Contact:
David Calabria
IR@avisbudget.com

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