AVIS BUDGET GROUP INC

Previous wording

We operate three of the most globally recognized brands in mobility solutions, Avis, Budget and Zipcar, together with several other brands well recognized in their respective markets. We are a leading vehicle rental operator in North America, Europe, Australasia and certain other regions we serve, with an average rental fleet of approximately 705,000 vehicles in second quarter 2024. We also license the use of our trademarks to licensees in the areas in which we do not operate directly. We and our licensees operate our brands in approximately 180 countries throughout the world.

Current wording

We operate three of the most globally recognized brands in mobility solutions, Avis, Budget and Zipcar, together with several other brands well recognized in their respective markets. We are a leading vehicle rental operator in North America, Europe, Australasia and certain other regions we serve, with an average rental fleet of approximately 736,000 vehicles in third quarter 2024. We also license the use of our trademarks to licensees in the areas in which we do not operate directly. We and our licensees operate our brands in approximately 180 countries throughout the world.

Previous wording

Our strategy continues to primarily focus on customer experience and costs to strengthen our Company, maximize profitability, and deliver stakeholder value. During the three months ended June 30, 2024, we generated revenues of $3.0 billion, net income of $15 million and Adjusted EBITDA of $214 million. These results were driven primarily by increased volume, offset by decreased revenue per day, and increased fleet and interest costs.

Current wording

Our strategy continues to primarily focus on customer experience and costs to strengthen our Company, maximize profitability, and deliver stakeholder value. During the three months ended September 30, 2024, we generated revenues of $3.5 billion, net income of $238 million and Adjusted EBITDA of $503 million. These results were primarily driven by consistent year-over-year volume, decreased revenue per day, and increased fleet and interest costs.

Previous wording

•Our revenues totaled $5.6 billion, a decrease of $81 million year-over-year, primarily due to decreased revenue per day.

Current wording

•Our revenues totaled $9.1 billion, a decrease of $165 million year-over-year, primarily due to decreased revenue per day, partially offset by an increase in volume.

Previous wording

•Our net loss was $100 million, representing a decrease in our net income of $847 million year-over-year, primarily due to increased fleet and interest costs.

Current wording

•Our net income was $137 million, representing a decrease of $1.2 billion year-over-year, primarily due to increased fleet and interest costs.

Previous wording

•Our Adjusted EBITDA was $226 million, representing a decrease of $1.0 billion year-over-year.

Current wording

•Our Adjusted EBITDA was $729 million, representing a decrease of $1.5 billion year-over-year.

Previous wording

Revenues decreased $75 million, or 2%, during the three months ended June 30, 2024 compared to the similar period in 2023, primarily due to a 4% decrease in revenue per day, excluding exchange rate effects, and a $10 million negative impact from currency exchange rate movements, partially offset by a 2% increase in volume. Total expenses increased 20% during the three months ended June 30, 2024 compared to the similar period in 2023, primarily due to increased fleet and interest costs. Our effective tax rates were a provision of 44.4% and 27.1% for the three months ended June 30, 2024 and 2023, respectively. As a result of these items, our net income decreased by $421 million compared to the similar period in 2023. For the three months ended June 30, 2024 and 2023, we reported earnings per diluted share of $0.41 and $11.01, respectively.

Current wording

Revenues decreased $84 million, or 2%, during the three months ended September 30, 2024 compared to the similar period in 2023, primarily due to a 2% decrease in revenue per day, excluding exchange rate effects, partially offset by a $6 million positive impact from currency exchange rate movements. Total expenses increased 12% during the three months ended September 30, 2024 compared to the similar period in 2023, primarily due to increased fleet and interest costs. Our effective tax rates were a provision of 27.7% and 17.2% for the three months ended September 30, 2024 and 2023, respectively. As a result of these items, our net income decreased by $389 million compared to the similar period in 2023. For the three months ended September 30, 2024 and 2023, we reported earnings per diluted share of $6.65 and $16.78, respectively.

Previous wording

Revenues decreased during the three months ended June 30, 2024, compared to the similar period in 2023, primarily due to a 5% decrease in revenue per day, excluding exchange rate effects, and a $8 million negative impact from currency exchange rate movements, offset by a 5% increase in volume.

Current wording

Revenues increased during the three months ended September 30, 2024, compared to the similar period in 2023, primarily due to a 5% increase in volume and a $10 million positive impact from currency exchange rate movements, partially offset by a 5% decrease in revenue per day, excluding exchange rate effects.

Previous wording

Revenues decreased $81 million or 1% during the six months ended June 30, 2024 compared to the similar period in 2023, primarily due to a 4% decrease in revenue per day, excluding exchange rate effects, and a $10 million negative impact from currency exchange rate movements, partially offset by a 3% increase in volume. Total expenses increased 22% during the six months ended June 30, 2024, compared to the similar period in 2023, primarily due to increased fleet and interest costs. Our effective tax rates were a benefit of 14.8% and a provision of 24.8% for the six months ended June 30, 2024 and 2023, respectively. As a result of these items, our net income decreased by $847 million compared to the similar period in 2023. For the six months ended June 30, 2024 and 2023, we reported earnings (loss) per diluted share of $(2.80) and $18.93, respectively.

Current wording

Revenues decreased $165 million or 2% during the nine months ended September 30, 2024 compared to the similar period in 2023, primarily due to a 4% decrease in revenue per day, excluding exchange rate effects, and a $4 million negative impact from currency exchange rate movements, partially offset by a 2% increase in volume. Total expenses increased 18% during the nine months ended September 30, 2024, compared to the similar period in 2023, primarily due to increased fleet and interest costs. Our effective tax rates were a provision of 34.6% and 21.5% for the nine months ended September 30, 2024 and 2023, respectively. As a result of these items, our net income decreased by $1.2 billion compared to the similar period in 2023. For the nine months ended September 30, 2024 and 2023, we reported earnings per diluted share of $3.84 and $34.71, respectively.

Previous wording

Operating expenses increased to 50.3% of revenue during the three months ended June 30, 2024 compared to 47.2% during the similar period in 2023, primarily due to an increase in volume. Vehicle depreciation and lease charges increased to 24.0% of revenue during the three months ended June 30, 2024 compared to 12.0% during the similar period in 2023, primarily due to increased per unit fleet costs, excluding exchange rate effects, driven by increased fleet levels, increased depreciation rates, and a decrease in the gain on sale of vehicles. Selling, general and administrative costs decreased to 11.4% of revenue during the three months ended June 30, 2024 compared to 12.1% during the similar period in 2023, primarily due to decreased marketing costs and other selling, general and administrative costs. Vehicle interest costs increased to 8.0% of revenue during the three months ended June 30, 2024, compared to 5.5% during the similar period in 2023, primarily due to rising interest rates.

Current wording

Operating expenses increased to 49.0% of revenue during the nine months ended September 30, 2024 compared to 46.8% during the similar period in 2023, primarily due to an increase in volume. Vehicle depreciation and lease charges increased to 24.0% of revenue during the nine months ended September 30, 2024 compared to 12.5% during the similar period in 2023, primarily due to increased per unit fleet costs, excluding exchange rate effects, driven by increased fleet levels, increased depreciation rates, and a decrease in the gain on sale of vehicles. Selling, general and administrative costs decreased to 11.5% of revenue during the nine months ended September 30, 2024, compared to 11.9% during the similar period in 2023, primarily due to decreased marketing costs and other selling, general and administrative costs. Vehicle interest costs increased to 8.0% of revenue during the nine months ended September 30, 2024 compared to 5.5% during the similar period in 2023, primarily due to rising interest rates.

Previous wording

Following is a more detailed discussion of the results of each of our reportable segments and reconciliation of Net income (loss) to Adjusted EBITDA:

Current wording

Following is a more detailed discussion of the results of each of our reportable segments and reconciliation of Net income to Adjusted EBITDA:

Previous wording

Revenues decreased during the three months ended June 30, 2024 compared to the similar period in 2023, primarily due to a 3% decrease in revenue per day and a $2 million negative impact from currency exchange rate movements, partially offset by a 1% increase in volume.

Current wording

Revenues decreased during the nine months ended September 30, 2024 compared to the similar period in 2023, primarily due to a 3% decrease in revenue per day and a $6 million negative impact from currency exchange rate movements, partially offset by a 1% increase in volume.

Previous wording

Operating expenses increased to 50.4% of revenue during the three months ended June 30, 2024 compared to 47.6% during the similar period in 2023, primarily due to an increase in volume. Vehicle depreciation and lease charges increased to 23.7% of revenue during the three months ended June 30, 2024 compared to 10.5% during the similar period in 2023, primarily due to increased per-unit fleet costs, driven by increased fleet levels, increased depreciation rates, and a decrease in the gain on sale of vehicles. Selling, general and administrative costs decreased to 9.4% of revenue during the three months ended June 30, 2024 compared to 10.1% during the similar period in 2023, primarily due to decreased marketing costs and other selling, general and administrative costs. Vehicle interest costs increased to 8.8% of revenue during the three months ended June 30, 2024 compared to 6.0% during the similar period in 2023, primarily due to rising interest rates.

Current wording

Operating expenses increased to 49.3% of revenue during the nine months ended September 30, 2024 compared to 47.1% during the similar period in 2023, primarily due to an increase in volume. Vehicle depreciation and lease charges increased to 23.7% of revenue during the nine months ended September 30, 2024 compared to 11.0% during the similar period in 2023, primarily due to increased per-unit fleet costs, driven by increased fleet levels, increased depreciation rates, and a decrease in the gain on sale of vehicles. Selling, general and administrative costs were approximately 9.5% of revenue during the nine months ended September 30, 2024 compared to 9.7% during the similar period in 2023, primarily due to decreased marketing costs and other selling, general and administrative costs. Vehicle interest costs increased to 8.7% of revenue during the nine months ended September 30, 2024 compared to 6.0% during the similar period in 2023, primarily due to rising interest rates.

Previous wording

Revenues increased during thesix months ended June 30, 2024 compared to the similar period in 2023, primarily due to a 5% increase in volume, partially offset by a 3% decrease in revenue per day, excluding exchange rate effects, and a $8 million negative impact from currency exchange rate movements.

Current wording

Revenues increased during the nine months ended September 30, 2024 compared to the similar period in 2023, primarily due to a 5% increase in volume, a $2 million positive impact from currency exchange rate movements, partially offset by a 4% decrease in revenue per day, excluding exchange rate effects.

Previous wording

In May 2024, we issued €200 million of additional 7.250% euro-denominated Senior Notes due July 2030, at 100.25% of their face value, with interest payable semi-annually. Net proceeds from the offering will be used for general corporate purposes.

Current wording

In May 2024, we issued an additional €200 million 7.250% euro-denominated Senior Notes due July 2030, at 100.25% of their face value, with interest payable semi-annually. Net proceeds from the offering were used for general corporate purposes.

Previous wording

Our Board of Directors has authorized the repurchase of up to approximately$8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in February 2023. Our stock repurchases may occur through open market purchases, privately negotiated transactions or trading plans pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements, restricted payment capacity under our debt instruments and other factors. The Stock Repurchase Program may be suspended, modified or discontinued at any time without prior notice. The Stock Repurchase Program has no set expiration or termination date. During the six months ended June 30, 2024, nocommon stock repurchases were made under the Stock Repurchase Program. As of June 30, 2024, approximately $802 million of authorization remained available to repurchase common stock under the Stock Repurchase Program.

Current wording

Our Board of Directors has authorized the repurchase of up to approximately$8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in February 2023. Our stock repurchases may occur through open market purchases, privately negotiated transactions or trading plans pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements, restricted payment capacity under our debt instruments and other factors. The Stock Repurchase Program may be suspended, modified or discontinued at any time without prior notice. The Stock Repurchase Program has no set expiration or termination date. During the nine months ended September 30, 2024, we repurchased approximately 0.1 million shares of common stock at a cost of approximately $8 million (excluding excise taxes due under the Inflation Reduction Act of 2022) under the Stock Repurchase Program. As of September 30, 2024, approximately $794 million of authorization remained available to repurchase common stock under the Stock Repurchase Program.

Previous wording

The decrease in cash provided by operating activities during the six months ended June 30, 2024 compared with the similar period in 2023 is primarily due to the decrease in our net income.

Current wording

The decrease in cash provided by operating activities during the nine months ended September 30, 2024 compared with the similar period in 2023 is primarily due to the decrease in our net income.

Previous wording

The decrease in cash used in investing activities during the six months ended June 30, 2024 compared with the similar period in 2023 is primarily due to the decrease in investment in vehicles, partially offset by proceeds received on disposition of vehicles.

Current wording

The decrease in cash used in investing activities during the nine months ended September 30, 2024 compared with the similar period in 2023 is primarily due to the decrease in our investment in vehicles.

Previous wording

The decrease in cash provided by financing activities during the six months ended June 30, 2024 compared with the similar period in 2023 is primarily due to the decrease in our net borrowings under vehicle programs, offset by the increase in our net corporate borrowings.

Current wording

The decrease in cash provided by financing activities during the nine months ended September 30, 2024 compared with the similar period in 2023 is primarily due to the increase in our payments under vehicle programs, partially offset by the increase in our net corporate borrowings.

Previous wording

At June 30, 2024, we had approximately $24.8 billion of indebtedness, including corporate indebtedness of approximately $5.3 billion and debt under vehicle programs of approximately $19.5 billion. For information regarding our debt and borrowing arrangements, see Notes 1, 10 and 11 to our Consolidated Condensed Financial Statements.

Current wording

At September 30, 2024, we had approximately $23.9 billion of indebtedness, including corporate indebtedness of approximately $6.0 billion and debt under vehicle programs of approximately $17.9 billion. For information regarding our debt and borrowing arrangements, see Notes 1, 10 and 11 to our Consolidated Condensed Financial Statements.

Previous wording

Our liquidity has in the past been, and could in the future be, negatively affected by any financial market disruptions or the absence of a recovery or worsening of the United States and worldwide economies, or by continued increases in interest rates, which may result in unfavorable conditions in the mobility industry, in the asset-backed financing market and in the credit markets generally. We believe these factors have affected and could further affect the debt ratings assigned to us by credit rating agencies and the cost of our borrowings. Additionally, a worsening or prolonged downturn in the worldwide economy or a disruption in the credit markets could further impact our liquidity due to (i) decreased demand and pricing for vehicles in the used-vehicle market, (ii) increased costs associated with, and/or reduced capacity or increased collateral needs under, our financings, (iii) the adverse impact of vehicle manufacturers being unable or unwilling to honor their obligations to repurchase or guarantee the depreciation on the related program vehicles and (iv) disruption in our ability to obtain financing due to negative credit events specific to us or affecting the overall debt market.

Current wording

Our liquidity has in the past been, and could in the future be, negatively affected by any financial market disruptions or a worsening of the United States and worldwide economies, or by increases in interest rates, which may result in unfavorable conditions in the mobility industry, in the asset-backed financing market and in the credit markets generally. We believe these factors have affected and could further affect the debt ratings assigned to us by credit rating agencies and the cost of our borrowings. Additionally, a worsening or prolonged downturn in the worldwide economy or a disruption in the credit markets could further impact our liquidity due to (i) decreased demand and pricing for vehicles in the used-vehicle market, (ii) increased costs associated with, and/or reduced capacity or increased collateral needs under, our financings, (iii) the adverse impact of vehicle manufacturers being unable or unwilling to honor their obligations to repurchase or guarantee the depreciation on the related program vehicles and (iv) disruption in our ability to obtain financing due to negative credit events specific to us or affecting the overall debt market.

Previous wording

As of June 30, 2024, we had $511 million of available cash and cash equivalents and access to available borrowings under our revolving credit facility of approximately $11 million, providing us with access to an approximate $522 million of total liquidity.

Current wording

As of September 30, 2024, we had $602 million of available cash and cash equivalents and access to available borrowings under our revolving credit facility of approximately $536 million, providing us with access to approximately $1.1 billion of total liquidity.

Previous wording

Our future contractual obligations have not changed significantly from the amounts reported within our 2023 Form 10-K with the exception of our commitment to purchase vehicles, which decreased by approximately $5.4 billion from December 31, 2023, to approximately $1.4 billion as of June 30, 2024 due to existing fleet levels. Changes to our obligations related to corporate indebtedness and debt under vehicle programs are presented above within the section titled “Liquidity and Capital Resources—Debt and Financing Arrangements” and also within Notes 10 and 11 to our Consolidated Condensed Financial Statements.

Current wording

Our future contractual obligations have not changed significantly from the amounts reported within our 2023 Form 10-K with the exception of our commitment to purchase vehicles, which decreased by approximately $2.9 billion from December 31, 2023, to approximately $3.9 billion as of September 30, 2024 due to existing fleet levels. Changes to our obligations related to corporate indebtedness and debt under vehicle programs are presented above within the section titled “Liquidity and Capital Resources—Debt and Financing Arrangements” and also within Notes 10 and 11 to our Consolidated Condensed Financial Statements.