Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Investor Presentation (November 2007)
22 slides from Avis Budget's investor presentation, November 2007
Slide 1: Presentation to Investors November 2007
Presentation to Investors November 2007
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements about future results made in this presentation constitute forward- looking g statements within the meaning g of the Private Securities Litigation g Reform Act of 1995. Such forward-looking statements include projections. These statements are based on current exp
Slide 3: Business Overview
Business Overview We are the leading general-use vehicle rental company in the United States, Canada, Australia, New Zealand and certain other regions. We are the second largest truck rental company in the United States. More Than … 6,700 Rental Locations 400,000 Vehicles INVESTORS 30,000 Employees
Slide 4: Two-Brand Strategy
Two-Brand Strategy Two Brands, One Cost Structure Customer Touchpoints Customer Touchpoints • Airport counters and busing • Airport counters and busing • Loyalty programs • Loyalty programs • Reservations and marketing • Reservations and marketing INVESTORS Non-Customer Touchpoints • Management / ba
Slide 5: Rental Car Industry Overview
Rental Car Industry Overview Airport Segment Local Segment Oth Other Avis Budget Thrifty 2% Dollar 4% All Others 8% Hertz 7% 18% 9% Alamo Avis 5% 21% Avis Budget Enterprise 32% 7% Budget 11% National INVESTORS 15% Hertz Enterprise 29% 65% TO Total Revenue: ~ $10 Billion Total Revenue: ~ $10 Billion
Slide 6: Strategic Overview
Strategic Overview Create sustainable improvements in margins and earnings Optimize Two- Expand Revenue Maximize Brand Strategy Sources Profits • Avis, as a premium • Off-airport growth • Yield management and brand with premium pricing optimization • Optional insurance pricing products and counter •
Slide 7: Key Revenue Drivers
Key Revenue Drivers Car Rental Time and Mileage Car Rental Days per Car Rental Day Combo: Line with column Combo: Line with column (in millions) $44 120 $42 107 103 ~$40 $40 101 $39 96 $39.96 100 $40 $39.56 $38.74 88 85 $37.96 $38 80 $36 INVESTORS 60 $34 40 $32 (a) (a) 2003 2004 2005 2006 2007E 2003
Slide 8: Revenue and EBITDA Growth
Revenue and EBITDA Growth Revenue EBITDA Combo: Line with column Combo: Line with column (in millions) (in millions) $6,500 $550 $6,000 $5,628 $ , $5,316 $467 $5,500 $439 $4,709 $410 $4,599 $405 $4,500 $400 INVESTORS $328 $3,500 $2,500 $250 (b) (a) (b) 2003 2004 2005 2006 2007E 2003 2004 2005 2006 2
Slide 9: Margin Opportunities
Margin Opportunities Pro Forma Car Rental EBITDA Margin 14% Pro forma for $100 million of cost 12.3% savings from integration of Budget 12% 10.8% 10.6% 10% 9% 8.4% 8.3% Average 8% 7.1% 6.8% INVESTORS 6% 4% 2% TO PRESENTATION 0% 2002 2003 2004 2005 2006 2007E Note: Results give effect to the pro form
Slide 10: Strategic Overview
Strategic Overview Optimization Price/Yield Fleet Process Management Management Improvement • Commercial vs. Leisure • Program vs. Risk • Productivity / Elimination of • Hold periods waste • Length of rental • Manufacturers, brands and • Replication of Best Practices • Peak vs. Off-peak models • Enh
Slide 11: Expand Revenue Sources
Expand Revenue Sources De eloping Ancillary Developing An ill Revenue Re en e Opportunities Oppo t nitie • Where2 GPS • El t Electronic i toll t ll collection ll ti (E (E-ZPass) ZP ) • LDW/insurance • Fuel service options • Portable Wi-Fi Wi Fi • Chauffeur drive Typical Ancillary Revenue Economics (
Slide 12: Expand Revenue Sources: Carey International Investment
Expand Revenue Sources C e International Carey Inte n tion l Investment In e tment • Acquired 45% minority ownership for $60 million • Carey International is the premium brand in the market segment • Customer-driven investment g • See significant cross-selling g opportunities pp • Potential for doub
Slide 13: Fleet Management
Fleet Management Fleet Compo ition Composition Fleet is becoming more diversified 100% 9% 7% 11% 17% 3% 8% 23% 10% 21% 75% 15% 24% 16% 24% 25% 50% 22% INVESTORS 67% 61% 55% 25% 43% 39% 0% TO 2004 2005 2006 2007E 2008E PRESENTATION GM Ford Chrysler Other Risk Cars ~1% ~1% ~8% ~28% ~50% 13
Slide 14: Sensitivities
Sensitivities EBITDA Impact of a 1% Change in Driver ($ in millions) $41 $40 $30 $19 INVESTORS $20 $14 $10 TO $0 PRESENTATION T&M Revenue Car Rental Days Utilization pe per Rental e ta Day ay 14
Slide 15: Avis Budget Car Rental Capital Structure
Avis Budget Car Rental Capital Structure ($ in million millions)) Capitalization as of Sept. 30, 2007 Vehicle Debt Maturities $3,000 $2,631 Amount % $2,500 Seasonal portion Vehicle Debt: $2,000 Domestic $5,765 52% $1,500 $1,269 $1,150 Truck 475 4% $1 000 $1,000 $812 $843 International 696 6% $500 $2
Slide 16: Liquidity
Liquidity ($ in million millions)) More than $3.0 billion available liquidity Available Capacity (as of Sept 30) Vehicle-backed debt(a) $1,981 INVESTORS $1.5 billion revolving credit facility 1,095 Total Available Capacity $3,076 TO PRESENTATION (a) Capacity is subject to maintaining sufficient asse
Slide 17: 2007 Outlook
2007 Outlook We continue to expect the travel environment to be benign in 2007 g % Change 2007E(a) 2006PF(b) Assumptions: Domestic Enplanements + 2 – 3% Per-unit Fleet Costs + 6 – 7% Revenue Drivers: Time & Mileage Revenue per Day(c) Up slightly Rental Days(c) +4% INVESTORS Income Statement: Revenue
Slide 18: Key Investment Considerations
Key Investment Considerations • Well-known and differentiated brands • Leading position in the on on-airport airport segment • Significant free cash flow • Established and loyal customer base • Strong and experienced management team • Significant opportunities for margin expansion • Multiple avenues
Slide 19: avis budget group
avis budget group
Slide 20: Glossary
Glossary Pro forma Adjustments The following table presents our pro forma financial data for the period ended December 31, 2006. We provide this supplemental information in order to present Avis Budget C ar Rental, LLC 's EBITDA and income before income taxes on a more comparable basis to correspond
Slide 21: Glossary
Glossary Reconciliation of Avis Budget Car Rental EBITDA to Avis Budget Car Rental Pro Forma EBITDA (in millions) 2006 Avis Budget C ar Rental EBITDA $ 370 Adjustments: Remove general corporate overhead (C) 51 Remove vehicle and intercompany interest, interest net (D) 8 Remove separation costs 33 Ad
Slide 22: Glossary
Glossary Free Cash Flow Definition Represents Net Cash Provided by Operating Activities adjusted to include the cash inflows and outflows relating to (i) capital expenditures, (ii) the investing and financing activities of our vehicle programs, (iii) asset sales and (iv) the change in restricted cas
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