Avis Budget Group Reports Record Third Quarter Results

Rhea-AI Summary

Avis Budget Group reported record third-quarter 2022 revenues of $3.5 billion, marking an 18% increase from Q3 2021, driven by robust demand and revenue growth. Net income reached $1.0 billion, with Adjusted EBITDA hitting $1.5 billion, the best quarterly results in the company's history. The liquidity position stands at approximately $1.7 billion, supplemented by $2.6 billion in fleet funding capacity. The company remains optimistic despite economic slowdown concerns, bolstered by strong summer performance and ongoing investments in electric vehicle infrastructure.

Positive

• Record Q3 2022 revenues of $3.5 billion, up 18% from Q3 2021.
• Net income reached $1.0 billion, the highest in company history.
• Adjusted EBITDA of $1.5 billion, also a record quarterly figure.
• Strong liquidity position of approximately $1.7 billion.
• Successful deployment of QuickPass at major US airports.

Negative

• None.

PARSIPPANY, N.J., Oct. 31, 2022 (GLOBE NEWSWIRE) -- Avis Budget Group, Inc. (NASDAQ: CAR) today announced financial results for third quarter 2022.

We ended the quarter with revenues 18% above third quarter 2021, at $3.5 billion, a new quarterly revenue record, surpassing our second quarter 2022 record, driven by continued strong demand and increased revenue per day.

Net income was $1.0 billion and our Adjusted EBITDA was $1.5 billion, our best quarterly net income and Adjusted EBITDA in our history.

Our liquidity position at the end of the quarter was approximately $1.7 billion, with an additional $2.6 billion of fleet funding capacity. We have well-laddered corporate debt and no meaningful maturities until 2024.

“I want to thank all the employees for their terrific efforts in helping us deliver the best quarterly results in our Company’s history,” said Joe Ferraro, Avis Budget Group Chief Executive Officer. “Despite growing concerns around an economic slowdown, our strong summer performance, driven by increased demand in both the commercial and leisure segments, carried through to September. We remain optimistic this will continue throughout the Fall and into the holiday season.”

Q3 Highlights

• Total Company revenues increased by 18% and 29% compared to third quarter 2021 and 2019, respectively.
• Adjusted EBITDA in the Americas was $1.2 billion for the third quarter 2022 driven by record demand.   It is the best quarterly Adjusted EBITDA in Americas’ history.
• Adjusted EBITDA in International was $291 million for the third quarter 2022 driven by increased pricing and return of demand. It is the best quarterly Adjusted EBITDA in International's history.
• QuickPass was successfully deployed across all major US airports allowing customers to bypass the counter, select their vehicle, and use an automated express exit and completion of their rental, including their receipt, all through their phone. Additionally, we continue to invest in the build-out of our electric vehicle infrastructure.

Investor Conference Call

We will host a conference call to discuss our third quarter results on November 1, 2022, 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 available on our website and at (877) 660-6853 using conference code 13733521.

About Avis Budget Group

Avis Budget Group, Inc. is a leading global provider of mobility solutions, both through our Avis and Budget brands, which have more than 10,000 rental locations in approximately 180 countries around the world, and through our Zipcar brand, which is the world's leading car sharing network. Avis Budget Group operates most of our car rental offices in North America, Europe and Australasia directly, and operates primarily through licensees in other parts of the world. Avis Budget Group 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 demand for our services, and global economic conditions 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, COVID-19, which has had, and is expected to continue to have a significant impact on our operations, and resulting economic conditions and related restrictions, the high level of competition in the mobility industry, changes in our fleet costs, including 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, our ability to achieve and maintain cost savings, the financial condition of the manufacturers that supply our rental vehicles, including as a result of the global semiconductor shortage, which could affect their ability to perform their obligations under our repurchase and/or guaranteed depreciation arrangements, the significant volatility in travel demand as a result of COVID-19, the absence of an improvement in or any further deterioration in economic conditions generally, particularly during our peak season and/or in key market segments, any occurrence or threat of terrorism, the current and any future pandemic diseases or other natural disasters, any changes to the cost or supply of fuel, risks related to acquisitions or integration of acquired businesses, risks associated with litigation, including class action lawsuits, 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 cost savings actions. Other unknown or unpredictable factors could also have material adverse effects on our performance or achievements, such as the potential effects on the world economy and markets, elections and government shutdowns, as a result of the ongoing military conflict between Russia and Ukraine. 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, 2021, Quarterly Report on Form 10-Q for the three and six months ended June 30, 2022 and in other filings and furnishings made by us with the Securities and Exchange Commission (the "SEC") from time to time. We undertake 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, Adjusted net income and Adjusted free cash flow, as well as other financial measures that are not considered generally accepted accounting principles (“GAAP”) measures as defined under SEC rules. Important information regarding such measures is contained in the financial tables to this release and in Appendix I, including the definitions of these measures and reconciliations to the closest comparable GAAP measures. The Company and its management believe that these non-GAAP measures are useful to investors in measuring our comparable period-over-period results. 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) attributable to Avis Budget Group, Inc. and diluted earnings (loss) per share, respectively. Foreign currency translation effects on our 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.

Contacts
Investor Relations Contact:
David Calabria
IR@avisbudget.com
Media Relations Contact:
James Tomlinson
ABGPress@edelman.com

Tables Follow

Table 1

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

		Three Months Ended September 30,											Nine Months Ended September 30,
		2022				2021				% Change			2022			2021			% Change
Income Statement and Other Items
	Revenues	$	3,547			$	3,001			18	%		$	9,223		$	6,744		37	%
	Income before income taxes		1,342				929			44	%			3,120			1,165		168	%
	Net income		1,031				674			53	%			2,332			902		159	%
	Earnings per share - diluted		21.67				10.45			107	%			46.32			13.16		252	%
	Adjusted Earnings Measures (non-GAAP) (A)
	Adjusted EBITDA		1,460				1,057			38	%			3,475			1,728		101	%
	Adjusted pretax income		1,344				954			41	%			3,155			1,402		125	%
	Adjusted net income		1,035				693			49	%			2,369			1,078		120	%
	Adjusted earnings per share - diluted		21.70				10.74			102	%			46.87			15.72		198	%
		As of
		September 30, 2022				December 31, 2021
Balance Sheet Items
	Cash and Cash Equivalents	$	581			$	534
	Vehicles, net		15,391				12,866
	Debt under vehicle programs		13,104				11,390
	Corporate debt		4,590				4,009
	Stockholders' equity attributable to Avis Budget Group, Inc.		(509	)			(220	)

Segment Results
	Three Months Ended September 30,											Nine Months Ended September 30,
	2022				2021				% Change			2022				2021				% Change
Revenues
Americas	$	2,703			$	2,403			12	%		$	7,270			$	5,457			33	%
International		844				598			41	%			1,953				1,287			52	%
Corporate and Other		—				—			n/m				—				—			n/m
Total Company	$	3,547			$	3,001			18	%		$	9,223			$	6,744			37	%
Adjusted EBITDA
Americas	$	1,185			$	952			24	%		$	3,036			$	1,694			79	%
International		291				128			127	%			497				86			478	%
Corporate and Other		(16	)			(23	)		n/m				(58	)			(52	)		n/m
Total Company	$	1,460			$	1,057			38	%		$	3,475			$	1,728			101	%

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

Table 2

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

		Three Months Ended  September 30,								Nine Months Ended  September 30,
		2022				2021				2022				2021
Revenues		$	3,547			$	3,001			$	9,223			$	6,744
Expenses
	Operating		1,464				1,225				3,960				3,089
	Vehicle depreciation and lease charges, net		134				277				479				869
	Selling, general and administrative		384				361				1,026				837
	Vehicle interest, net		107				80				281				232
	Non-vehicle related depreciation and amortization		59				69				168				199
	Interest expense related to corporate debt, net:
	Interest expense		64				47				181				167
	Early extinguishment of debt		—				7				—				136
	Restructuring and other related charges		2				5				16				47
	Transaction-related costs, net		—				1				1				3
	Other (income) expense, net		(9	)			—				(9	)			—
Total expenses			2,205				2,072				6,103				5,579
Income before income taxes			1,342				929				3,120				1,165
Provision for income taxes			311				255				788				263
Net income			1,031				674				2,332				902
	Less: net loss attributable to non-controlling interests		(3	)			(1	)			(9	)			(1	)
Net income attributable to Avis Budget Group, Inc		$	1,034			$	675			$	2,341			$	903
Earnings per share
	Basic	$	22.08			$	10.58			$	47.34			$	13.31
	Diluted	$	21.67			$	10.45			$	46.32			$	13.16
Weighted average shares outstanding
	Basic		46.8				63.7				49.5				67.8
	Diluted		47.7				64.6				50.6				68.6

Table 3

Avis Budget Group, Inc.
KEY METRICS SUMMARY

			Three Months Ended  September 30,											Nine Months Ended  September 30,
			2022				2021				% Change			2022				2021				% Change
Americas
	Rental Days (000’s)			33,421				28,836			16	%			92,691				71,768			29	%
	Revenue per Day, excluding exchange rate effects (A)		$	81.06			$	83.33			(3	)%		$	78.55			$	76.04			3	%
	Average Rental Fleet			507,350				434,416			17	%			483,786				369,012			31	%
	Vehicle Utilization			71.6	%			72.2	%		(0.6) pps				70.2	%			71.2	%		(1.0) pps
	Per-Unit Fleet Costs per Month, excluding exchange rate effects (A)		$	10			$	143			(93	)%		$	39			$	190			(79	)%
International
	Rental Days (000’s)			13,041				10,720			22	%			32,420				25,679			26	%
	Revenue per Day, excluding exchange rate effects (A)		$	74.45			$	55.79			33	%		$	67.55			$	50.12			35	%
	Average Rental Fleet			199,638				166,431			20	%			172,845				138,439			25	%
	Vehicle Utilization			71.0	%			70.0	%		1.0 pps				68.7	%			67.9	%		0.8 pps
	Per-Unit Fleet Costs per Month, excluding exchange rate effects (A)		$	231			$	181			28	%		$	224			$	192			17	%
Total
	Rental Days (000’s)			46,462				39,556			17	%			125,111				97,447			28	%
	Revenue per Day, excluding exchange rate effects (A)		$	79.21			$	75.86			4	%		$	75.70			$	69.21			9	%
	Average Rental Fleet			706,988				600,847			18	%			656,631				507,451			29	%
	Vehicle Utilization			71.4	%			71.6	%		(0.2) pps				69.8	%			70.3	%		(0.5) pps
	Per-Unit Fleet Costs per Month, excluding exchange rate effects (A)		$	72			$	154			(53	)%		$	88			$	190			(54	)%
_______
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  September 30,											Nine Months Ended  September 30,
			2022				2021				% Change			2022				2021				% Change
Americas
	Revenue per Day		$	80.89			$	83.33			(3	)%		$	78.43			$	76.04			3	%
	Per-Unit Fleet Costs per Month		$	9			$	143			(94	)%		$	39			$	190			(79	)%
International
	Revenue per Day		$	64.62			$	55.79			16	%		$	60.22			$	50.12			20	%
	Per-Unit Fleet Costs per Month		$	200			$	181			10	%		$	200			$	192			4	%
Total
	Revenue per Day		$	76.32			$	75.86			1	%		$	73.72			$	69.21			7	%
	Per-Unit Fleet Costs per Month		$	63			$	154			(59	)%		$	81			$	190			(57	)%

Table 4 (page 1 of 2)

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

CONSOLIDATED CONDENSED SCHEDULE OF CASH FLOWS

	Nine Months Ended September 30, 2022
Operating Activities
Net cash provided by operating activities	$	3,862
Investing Activities
Net cash used in investing activities exclusive of vehicle programs	$	(152	)
Net cash used in investing activities of vehicle programs		(3,424	)
Net cash used in investing activities	$	(3,576	)
Financing Activities
Net cash used in financing activities exclusive of vehicle programs	$	(1,830	)
Net cash provided by financing activities of vehicle programs		1,692
Net cash used in financing activities	$	(138	)
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash	$	(53	)
Net change in cash and cash equivalents, program and restricted cash		95
Cash and cash equivalents, program and restricted cash, beginning of period (A)		626
Cash and cash equivalents, program and restricted cash, end of period (B)	$	721

CONSOLIDATED SCHEDULE OF ADJUSTED FREE CASH FLOWS ^(C)

	Nine Months Ended September 30, 2022
Income before income taxes	$	3,120
Add-back of non-vehicle related depreciation and amortization (D)		174
Add-back of restructuring and other related costs		16
Add-back of transaction-related costs, net		1
Add-back of COVID-19 charges, net		(9	)
Add-back of unprecedented personal-injury and other legal matters, net		1
Add-back of other (income) expense, net		(9	)
Working capital and other		246
Capital expenditures (E)		(164	)
Tax payments, net of refunds		(148	)
Vehicle programs and related (F)		(1,239	)
Adjusted free cash flow	$	1,989
Acquisition and related payments, net of acquired cash	$	(1	)
Cash disposed upon deconsolidation of subsidiary		(55	)
Borrowings, net of debt repayments		711
Restructuring and other related payments		(14	)
Transaction-related payments		(2	)
Repurchases of common stock		(2,574	)
Change in program cash		60
Change in restricted cash		(1	)
Foreign exchange effects, financing costs and other		(18	)
Net change in cash and cash equivalents, program and restricted cash (per above)	$	95

Table 4 (page 2 of 2)

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

	Nine Months Ended September 30, 2022
Net cash provided by operating activities (per above)	$	3,862
Investing activities of vehicle programs		(3,424	)
Financing activities of vehicle programs		1,692
Capital expenditures		(120	)
Proceeds received on sale of assets and nonmarketable equity securities		2
Change in program cash		(60	)
Change in restricted cash		1
Acquisition and disposition-related payments		20
Restructuring and other related payments		14
Transaction-related payments		2
Adjusted free cash flow (per above)	$	1,989

	_______
(A)	Consists of cash and cash equivalents of $534 million, program cash of $89 million and restricted cash of $3 million.
(B)	Consists of cash and cash equivalents of $581 million, program cash of $139 million and restricted cash of $1 million.
(C)	See Appendix I for the definition of Adjusted free cash flow.
(D)	Includes $6 million of cloud computing costs.
(E)	Includes $44 million of cloud computing implementation costs.
(F)	Includes vehicle-backed borrowings (repayments) that are incremental to amounts required to fund incremental (reduced) vehicle and vehicle-related assets. Also includes $17 million of vehicles sold in the divestiture of our operations in the United States Virgin Islands and the Netherlands.

Table 5

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 (loss), income (loss) before income taxes and diluted earnings (loss) per share to Adjusted EBITDA and our Adjusted earnings measures.

			Three Months Ended September 30,								Nine Months Ended  September 30,
Reconciliation of Net income to Adjusted EBITDA:			2022				2021				2022				2021
	Net income		$	1,031			$	674			$	2,332			$	902
		Add: Provision for income taxes		311				255				788				263
	Income before income taxes			1,342				929				3,120				1,165
	Add certain items:
	Acquisition-related amortization expense			9				13				35				45
	Restructuring and other related charges			2				5				16				47
	Unprecedented personal-injury and other legal matters, net (A)			—				5				1				(6	)
	Transaction-related costs, net			—				1				1				3
	Early extinguishment of debt			—				7				—				136
	COVID-19 charges, net (B)			—				(6	)			(9	)			12
	Other (income) expense, net (C)			(9	)			—				(9	)			—
	Adjusted pretax income			1,344				954				3,155				1,402
	Add:	Non-vehicle related depreciation and amortization (excluding acquisition-related amortization expense) (D)		52				56				139				159
		Interest expense related to corporate debt, net (excluding early extinguishment of debt)		64				47				181				167
	Adjusted EBITDA		$	1,460			$	1,057			$	3,475			$	1,728
Reconciliation of Net income attributable to Avis Budget Group, Inc. to adjusted net income:
	Net income attributable to Avis Budget Group, Inc.		$	1,034			$	675			$	2,341			$	903
	Add certain items, net of tax:
		Acquisition-related amortization expense		6				9				25				33
		Restructuring and other related charges		2				4				14				35
		Unprecedented personal-injury and other legal matters, net		—				4				1				(4	)
		Transaction-related costs, net		—				1				1				2
		Early extinguishment of debt		—				5				—				101
		COVID-19 charges, net		—				(5	)			(6	)			8
		Other (income) expense, net		(7	)			—				(7	)			—
	Adjusted net income		$	1,035			$	693			$	2,369			$	1,078
	Earnings per share - Diluted		$	21.67			$	10.45			$	46.32			$	13.16
	Adjusted diluted earnings per share		$	21.70			$	10.74			$	46.87			$	15.72
	Shares used to calculate Adjusted diluted earnings per share			47.7				64.6				50.6				68.6

_______
(A)	Reported within operating expenses in our Consolidated Statements of Operations.
(B)	The following table presents the unusual, direct and incremental costs due to the COVID-19 pandemic.
		Three Months Ended September 30,							Nine Months Ended September 30,
		2022			2021				2022				2021
	Minimum annual guaranteed rent in excess of concession fees, net	$	—		$	(4	)		$	(9	)		$	12
	Vehicles damaged in overflow parking lots, net of insurance proceeds		—			(3	)			—				(7	)
	Other charges		—			1				—				7
	Operating expenses	$	—		$	(6	)		$	(9	)		$	11
	Selling, general and administrative expenses	$	—		$	—			$	—			$	1
	COVID-19 charges, net	$	—		$	(6	)		$	(9	)		$	12
(C)	Primarily relates to a gain upon deconsolidation of a former subsidiary.
(D)	For the three and nine months ended September 30, 2022 consists of $2 million and $6 million, respectively, within operating expenses in our Consolidated Statements of Operations related to cloud computing costs. For the nine months ended September 30, 2021 consists of $5 million within operating expenses in our Consolidated Statements of Operations related to cloud computing costs.

Table 6

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

		Three Months Ended September 30, 2022												Three Months Ended September 30, 2021
		Americas				International				Total				Americas				International				Total
Revenue per Day (RPD)
	Revenue	$	2,703			$	844			$	3,547			$	2,403			$	598			$	3,001
	Currency exchange rate effects		6				127				133				—				—				—
	Revenue excluding exchange rate effects	$	2,709			$	971			$	3,680			$	2,403			$	598			$	3,001
	Rental days (000's)		33,421				13,041				46,462				28,836				10,720				39,556
	RPD excluding exchange rate effects (in $'s)	$	81.06			$	74.45			$	79.21			$	83.33			$	55.79			$	75.86
Vehicle Utilization
	Rental days (000's)		33,421				13,041				46,462				28,836				10,720				39,556
	Average rental fleet		507,350				199,638				706,988				434,416				166,431				600,847
	Number of days in period		92				92				92				92				92				92
	Available rental days (000's)		46,676				18,367				65,043				39,966				15,312				55,278
	Vehicle utilization		71.6	%			71.0	%			71.4	%			72.2	%			70.0	%			71.6	%
Per-Unit Fleet Costs
	Vehicle depreciation and lease charges, net	$	14			$	120			$	134			$	187			$	90			$	277
	Currency exchange rate effects		1				18				19				—				—				—
		$	15			$	138			$	153			$	187			$	90			$	277
	Average rental fleet		507,350				199,638				706,988				434,416				166,431				600,847
	Per-unit fleet costs (in $'s)	$	29			$	693			$	217			$	430			$	543			$	461
	Number of months in period		3				3				3				3				3				3
	Per-unit fleet costs per month excluding exchange rate effects (in $'s)	$	10			$	231			$	72			$	143			$	181			$	154

		Nine Months Ended September 30, 2022												Nine Months Ended September 30, 2021
		Americas				International				Total				Americas				International				Total
Revenue per Day (RPD)
	Revenue	$	7,270			$	1,953			$	9,223			$	5,457			$	1,287			$	6,744
	Currency exchange rate effects		11				237				248				—				—				—
	Revenue excluding exchange rate effects	$	7,281			$	2,190			$	9,471			$	5,457			$	1,287			$	6,744
	Rental days (000's)		92,691				32,420				125,111				71,768				25,679				97,447
	RPD excluding exchange rate effects (in $'s)	$	78.55			$	67.55			$	75.70			$	76.04			$	50.12			$	69.21
Vehicle Utilization
	Rental days (000's)		92,691				32,420				125,111				71,768				25,679				97,447
	Average rental fleet		483,786				172,845				656,631				369,012				138,439				507,451
	Number of days in period		273				273				273				273				273				273
	Available rental days (000's)		132,074				47,186				179,260				100,740				37,794				138,534
	Vehicle utilization		70.2	%			68.7	%			69.8	%			71.2	%			67.9	%			70.3	%
Per-Unit Fleet Costs
	Vehicle depreciation and lease charges, net	$	168			$	311			$	479			$	630			$	239			$	869
	Currency exchange rate effects		2				37				39				—				—				—
		$	170			$	348			$	518			$	630			$	239			$	869
	Average rental fleet		483,786				172,845				656,631				369,012				138,439				507,451
	Per-unit fleet costs (in $'s)	$	351			$	2,013			$	789			$	1,706			$	1,728			$	1,712
	Number of months in period		9				9				9				9				9				9
	Per-unit fleet costs per month excluding exchange rate effects (in $'s)	$	39			$	224			$	88			$	190			$	192			$	190

_______
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 and other legal matters, net, which includes amounts recorded in excess of $5 million related to class action lawsuits, non-operational charges related to shareholder activist activity, which include third party advisory, legal and other professional service fees, COVID-19 charges, other (income) expense, net and income taxes. COVID-19 charges include unusual, direct and incremental costs due to the COVID-19 pandemic such as minimum annual guaranteed rent in excess of concession fees for the period, overflow parking for idle vehicles and related shuttling costs, incremental cleaning supplies to sanitize vehicles and facilities, and losses associated with vehicles damaged in overflow parking lots, net of insurance proceeds. Adjusted EBITDA includes stock-based compensation expense and deferred financing fee amortization totaling $13 million and $16 million in third quarter 2022 and 2021, respectively, and totaling $36 million and $41 million in the nine months ended September 30, 2022 and 2021, respectively.

We revised our definition of Adjusted EBITDA to exclude other (income) expense, net. We did not revise prior years’ Adjusted EBITDA because there were no other charges similar in nature. 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 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 our aggregate performance. We exclude restructuring and other related charges, transaction-related costs, costs related to early extinguishment of debt and certain other 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, charges for unprecedented personal-injury and other legal matters, COVID-19 charges, other (income) expense, and non-operational charges related to shareholder activist activity. 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.

Adjusted EBITDA Margin
Represents Adjusted EBITDA as a percentage of revenues.

Available Rental Days
Defined as Average Rental Fleet times the numbers 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 vehicles 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. 

FAQ

What were Avis Budget Group's revenues for Q3 2022?

Avis Budget Group reported revenues of $3.5 billion for Q3 2022.

How much was Avis Budget Group's net income in Q3 2022?

The net income for Avis Budget Group in Q3 2022 was $1.0 billion.

What is the Adjusted EBITDA for Avis Budget Group in Q3 2022?

Adjusted EBITDA for Q3 2022 was $1.5 billion, the highest in company history.

What is the liquidity position of Avis Budget Group?

Avis Budget Group's liquidity position at the end of Q3 2022 was approximately $1.7 billion.

When will Avis Budget Group discuss their Q3 2022 results with investors?

Avis Budget Group will host a conference call on November 1, 2022, at 8:30 a.m. (ET) to discuss their Q3 2022 results.