Slide 1: Fourth Quarter and Full-Year 2016 Earnings Call
Fourth Quarter and Full-Year 2016 Earnings Call February 16, 2017 Webcast: ir.avisbudgetgroup.com Dial-in: (630) 395-0021 Replay: (203) 369-1520 Passcode: 2995545
Slide 2: Forward-Looking Statements
FORWARD- LOOKING Statements about future results made in this presentation constitute forward-looking STATEMENTS 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 expectati
Slide 3: Larry De Shon, Chief Executive Officer
Larry De Shon Chief Executive Officer
Slide 4: Fourth Quarter and Full-Year 2016 Highlights
FOURTH QUARTER AND Successful 2016 FULL-YEAR 2016 despite Fourth Quarter Challenges HIGHLIGHTS Continued progress on initiatives to drive higher long-term margins National election, December calendar shift and industry fleet levels all affected fourth quarter revenue Reported full-year Adjuste
Slide 5: Americas – Revenue Trends
AMERICAS – REVENUE Fourth Quarter Revenue Trends TRENDS Soft commercial demand entering the quarter Industry over-supply impacted volumes and pricing Our leisure pricing increased 1% despite a highly competitive pricing environment Volume Pricing 1% Commercial Leisure Total Commercial Total Le
Slide 6: International Achievements
INTERNATIONAL ACHIEVEMENTS Delivered Increased Volumes, Adjusted EBITDA and Margins Growth in both leisure and commercial volumes Completed acquisition of France Cars in December Signed strategic partnership with DiDi Chuxing Pricing remained competitive across Europe Adjusted EBITDA ($ in mil
Slide 7: Long-Term Margin Growth
LONG-TERM MARGIN Significant Opportunity GROWTH for Margin Improvement Profitable revenue growth ‒ Expansion of Demand-Fleet-Pricing yield- management system Operational efficiencies ‒ Manpower planning and shuttling initiatives delivering benefits Fleet optimization ‒ Improved buying and disp
Slide 8: Highlights
HIGHLIGHTS Optimistic about Our Future We made progress on several initiatives, delivered substantial free cash flow and bought back a significant amount of our stock We have a strong team in place focused on: Driving profitable revenue growth Optimizing fleet costs Realizing operational e
Slide 9: David Wyshner, President and Chief Financial Officer
David Wyshner President and Chief Financial Officer
Slide 10: Fourth Quarter 2016 Results
FOURTH QUARTER 2016 Results Negatively Impacted by Currency RESULTS Effects and Challenging Pricing Environment ($ in millions) Revenue Adjusted EBITDA $1,902 (1%) $1,879 Currency movements reduced Adjusted EBITDA by $7 million versus our prior projection $128 $121 (5%) 6.7% 6.4% margin margin Fourt
Slide 11: Americas Fourth Quarter Results
AMERICAS Fourth Quarter Results Pricing declined 70 basis points year-over-year ‒ Leisure pricing increased 1% Rental day volume declined 1% ‒ Calendar shifts and U.S. elections negatively impacted demand Adjusted EBITDA declined 8% to $101 million (a) Americas Revenue Drivers Average Total Re
Slide 12: International Fourth Quarter Results
INTERNATIONAL Fourth Quarter Results Revenue declined $4 million in the fourth quarter, but was up 1% in constant currency Highly competitive pricing environment across Europe Adjusted EBITDA increased 13% and margins expanded (a) International Revenue Drivers Ancillary Total Average 3% Total
Slide 13: Fleet Costs
FLEET COSTS Americas Per-Unit Fleet Costs Expected to Increase Slightly in 2017 (a) Monthly Per-Unit Fleet Costs (Americas) $308 $311 Americas fleet was 67% $295 +4% $297 +5% risk in 2016 and expected to be in the low- to mid-70s in 2017 Fourth Quarter Fourth Quarter Full Year Full Year 2015 2016 20
Slide 14: Balance Sheet
BALANCE SHEET Strong Liquidity Position More than $5 billion of available liquidity worldwide (a) Net corporate leverage of 3.6x We ended the quarter No borrowings under our corporate revolver with nearly $500 million of cash ‒ More than $1 billion of availability S&P upgraded our Unused cap
Slide 15: Capital Allocation
CAPITAL ALLOCATION Consistent Use of Free Cash Flow Our priorities for deploying free cash flow continue to be share repurchases and tuck-in acquisitions Repurchased 12.3 million shares at a cost of Since 2013, we’ve $390 million in 2016 returned more than a billion dollars to Expect to genera
Slide 16: 2017 Outlook
2017 OUTLOOK Our 2017 Plan Reflects Our Expectation that Strategic Initiatives Will Have Positive Impact Revenue projected to increase 2% to 3% ‒ Growth primarily from increased rental volumes Adjusted EBITDA expected to be $840 to $920 million Americas pricing expected to be ‒ Expect quarterly
Slide 17: 2017 Outlook: Estimates
2017 OUTLOOK 2017 Estimates (a) (b) Diluted share count of ($ in millions, except EPS) Projection Growth vs. 2016 approximately 84 to 86 million, a reduction of Revenue $8,800 – 8,950 2% roughly 10% year-over- year Adjusted EBITDA 840 – 920 5% (c) Expect capital Non-vehicle D&A 205 expenditures of I
Slide 18: Free Cash Flow
FREE CASH FLOW Free Cash Flow ($ in millions) 2017E 2016 (a) Adjusted pretax income $430 – $510 $441 (b) Plus: Non-vehicle D&A 205 194 Less: Capital expenditures (210) (192) Less: Cash taxes (55) – (75) (60) Plus: Vehicle programs 20 95 (c) Plus: Working capital and other 60 – 50 (6) Free Cash Flow
Slide 19: Currency Effects
CURRENCY EFFECTS Exchange-Rate Impacts (a) Year-over-Year Effect of Currency Movements (in millions) First Second Third Fourth Full Quarter Quarter Quarter Quarter Year Revenue ($17) ($48) ($51) ($14) ($130) (b) Adjusted EBITDA $22 ($2) ($12) $2 $10 Expect a $10 million positive year-over-year impac
Slide 20: Summary: Strategic Objectives
SUMMARY Strategic Objectives Serving our customers’ needs Building and using world-class brands to drive profitable growth Increasing our margins Succeeding in mobility Investing in technology and process improvement Delivering free cash flow and deploying it to enhance shareholder value
Slide 21: avis budget group
avis budget group
Slide 22: Glossary
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
Slide 23: Glossary
GLOSSARY Reconciliation of Net Corporate Debt (in millions): December 31, 2016 Corporate debt $ 3,523 Less: Cash and cash equivalents 490 Net corporate debt $ 3,033 Reconciliation of Adjusted EBITDA to net income (in millions): Year Ended December 31, 2016 2015 Adjusted EBITDA $ 838 $ 903 Less: Non-
Slide 24: Glossary
GLOSSARY Reconciliation of adjusted net income to net income (in millions, except per-share amounts): Three Months Ended Year Ended December 31, December 31, 2016 2015 2016 2015 Adjusted net income $ 13 $ 18 $ 273 $ 333 Less certain items, net of tax: Acquisition-related amortization expense 10 9 40