Professional Documents
Culture Documents
November 2012
Forward-Looking Statements
Statements about future results made in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include projections. These statements are based on current expectations and the current economic environment. Forward-looking statements and projections are inherently subject to significant economic, competitive and other uncertainties and contingencies, many of which are beyond the control of management. The Company cautions that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements and projections are specified in the Company's most recently filed Form 10-K, most recently filed Form 10-Q and other SEC filings. 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, the date of our last earnings conference call. This presentation includes certain non-GAAP financial measures as defined under SEC rules. Important information regarding such measures is contained within this presentation, including in the Glossary section.
10,000 locations
#1 #2
#2 #2 #1 #1 #1
Share position Owned and joint-venture territories Licensed territories
(a) Source: Airport authorities, Euromonitor
#1
70%
30%
50%
50%
70%
30%
60%
40%
$5.5
$5.0
$4.5
2008
2009
2010
2011
$123
$125
$132
North America
Other International(b)
Europe
2009
2010
2011
(a) Pro forma to include Avis Europe; converted to US$ at average 2011 exchange rates (b) Includes Asia-Pacific, Latin America, Middle East and Africa
$1,181 $922
$342 $83
Cash Flow From Operations(a)
Capital Expenditures
Note: Data is cumulative for years 2007-2011 (a) Excluding vehicle depreciation (b) Including vehicle depreciation
10
+41%
Volume
Revenue(a)
(a) Excluding the acquisition of Avis Europe, volume increased 4%, revenue increased 3% and Adjusted EBITDA increased 13% (b) Excluding certain items
12
Key Messages
Initiative
` Grow international inbound ` Grow small-business rentals ` Grow ancillary revenues ` Co-brand local market locations
(b)
Expands Margins
2012 Results
+7% volume +8% volume +7% revenue
(a)
; ; ; ;
+121 locations
(a) North America; year-to-date as of September 30, 2012 (b) 590 locations in total, representing over half of our local market footprint
14
15
Phase III
(>2015)
Phase II
(2012-15)
$55-$75
` Cost savings
Phase I
(2012)
16
Profit Improvement
Define ` Processes ` Input variables ` Constraints
Implement and Refine ` Pricing module ` Fleet optimization ` Review, analyze and adjust
2012
2013
2014/15
17
18
19
$7,300 $5,900
EMEA
$5,541
2011
2012E
20
$200 2005 Risk % 1% 2006 8% 2007 26% 2008 55% 2009 65% 2010 53% 2011 52% 2012E 60%
21
2010
2011
2012E
Expect to generate more than $25 million of annual interest savings year-over-year due to lower rates
(a) U.S. only
22
2012 Estimate $7,300 825 840 110 265 450 465 167 172 $283 $293
(a)
(b)
Revenue Adjusted EBITDA Non-vehicle D&A Interest expense Pretax income Income taxes Net income Diluted EPS
41%
40% 45%
$2.35 $2.45
23
2013 Outlook
` Expect demand trends in North America will be similar to 2012 ` Rapid Budget growth targeted in Europe Anticipate macroeconomic challenges in Europe ` Full-year benefit from synergies implemented in 2012 will add $15 to $20 million to Adjusted EBITDA ` Asia-Pacific will benefit from the Apex acquisition ` Expect North America fleet costs to increase by at least $100 million ` Corporate and vehicle interest costs should decline
24
` Not satisfied with our current pricing ` The used car market appears to have peaked ` Pricing has historically risen during periods of cost-push
$10 Average Average Daily Rate Daily Rate Per-unit Per-unit Fleet Costs Fleet Costs
North America 25
Long-Term Earnings Growth Opportunity Growth in developed markets Incremental growth from developing markets Ancillary revenues Fleet and yield optimization Productivity growth Other strategic initiatives Inflationary cost increases Deployment of free cash flow 2% - 4% 1% - 3% 1% - 2% 1% - 3% 2% - 4% 1% - 3% (2%) - (4%) 5% - 2% 11% - 17%
26
Key Messages
$45
$15
$19
$30 $6 $13
$17
$5 $12
$14
$4 $10
Utilization Utilization
International
Rate
Fleet Costs
A-1 29
$1,425
$725
$380
$130 $250
$450 $300
$700
$250
$50
2015 2016 2017 2018 2019 2020
2012
2013
Senior notes
Convertible notes
Note: As of November 8, 2012; pro forma for the planned fourth quarter redemption of 7.75% notes due 2016
A-2 30
$960
$950
$920
$530 $300
$510 $350
2012
2013
2014
2015
2016
2017
2018
Refinancing completed
A-3 31
Note: Excluding the acquisition of Avis Europe (a) Excluding certain items
A-4 32
Glossary
This presentation includes certain non-GAAP (generally accepted accounting principles) financial measures as defined under SEC rules. We have provided below 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. Adjusted EBITDA Adjusted EBITDA represents income (loss) before non-vehicle related depreciation and amortization, any impairment charge, transaction-related costs, non-vehicle related interest and income taxes. Adjusted EBITDA excluding certain items represents Adjusted EBTIDA excluding restructuring-related expenses, 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. We believe that Adjusted EBITDA and Adjusted EBITDA excluding certain items are useful as supplemental measures in evaluating the aggregate performance of our operating businesses. Adjusted 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. Adjusted 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 Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies. We believe that the measures referred to above are useful as supplemental measures in evaluating the aggregate performance of the Company. Reconciliation of Adjusted EBITDA to income (loss) before income taxes (in millions): Year Ended December 31, 2008 2009 $ 5,984 $ 5,131 $ 169 88 129 $ (48) $ $ 243 96 153 (6) 20 18 33 (77) $ Three Months Ended Sept. 30, 2012 $ 2,170 $ 377 26 67 $ 284 11 7 4 2 260 $ Nine Months Ended Sept. 30, 2012 $ 5,659 $ 762 80 208 474 21 26 12 52 363
Total Revenue Adjusted EBITDA excluding certain items Less: Non-vehicle related depreciation and amortization Interest expense related to corporate debt, net (excluding pre-closing interest related to acquisition financing) Income (loss) before income taxes, excluding certain items Less certain items: Transaction-related costs Restructuring expense Acquisition-relation amortization expense Early-extinguishment of debt Acquisition-related interest Litigation costs Impairment Separation-related costs, net Vehicle and intercompany interest, net Public company costs Non-vehicle depreciation and amortization Interest expense related to corporate debt Corporate and other EBITDA Avis Budget Group, Inc. income (loss) before income taxes
(a) Pro forma
$ $
$ $
324 255 5 4 24 36
28 5 1,262 $ (1,343)
A-5 33