Press Release Details

• For the year, revenue grew to $7.4 billion, a 25% increase from 2011.
• Adjusted EBITDA increased 38% to $840 million in 2012, excluding certain items, the highest level in the Company's history.
• Full-year pretax income was $463 million, excluding certain items, and $300 million on a reported basis.
• Diluted earnings per share increased 47%, excluding certain items, to $2.43.
• Company issues estimates of its full-year 2013 results.

PARSIPPANY, N.J., Feb. 13, 2013 (GLOBE NEWSWIRE) -- Avis Budget Group, Inc. (Nasdaq:CAR) today reported results for its fourth quarter and year ended December 31, 2012. The Company reported full-year revenue of $7.4 billion, an increase of 25% compared with 2011. Excluding certain items, Adjusted EBITDA increased 38% to $840 million and pretax income increased to $463 million. The Company's Adjusted EBITDA margin expanded by more than 100 basis points to 11.4% in 2012, excluding certain items. Reported pretax income of $300 million was impacted by acquisition-related expenses and debt extinguishment costs as well as restructuring charges primarily in its International segment.

For the fourth quarter, the Company reported revenue of $1.7 billion, a 4% increase compared with the prior-year fourth quarter. Excluding certain items, Adjusted EBITDA increased 22% to $78 million. The Company reported a pretax loss of $11 million in the traditionally slower fourth quarter, excluding certain items, and a GAAP pretax loss of $63 million primarily due to acquisition-related expenses, debt extinguishment costs and restructuring initiatives.

"We delivered record results in 2012, aided by the robust used car market in the first half of the year. Our results reflected organic revenue growth augmented by the additions of Avis Europe and Apex, continued margin expansion, and record earnings per share, excluding certain items," said Ronald L. Nelson, Avis Budget Group Chairman and Chief Executive Officer. "As we look forward, not only are we looking to deliver solid results in 2013; we have also set our sights on reaching $1 billion of Adjusted EBITDA by 2015 by focusing relentlessly on profitable growth, enhancing our customers' experience and driving efficiencies throughout our organization."

Executive Summary

Revenue increased 4% in fourth quarter 2012 compared to fourth quarter 2011 primarily due to a 6% increase in rental day volume and a 2% decrease in pricing. Ancillary revenues, excluding gas and customer recoveries, increased 8% driven by higher sales of insurance products and emergency roadside protection. Fourth quarter Adjusted EBITDA, excluding certain items, increased 22% to $78 million driven by strong growth in North America.

Full-year revenue increased 25% to $7.4 billion, primarily due to the acquisition of Avis Europe in October 2011. The increase was driven by 26% growth in rental days and a 33% increase in ancillary revenues, partially offset by a 3% decline in pricing.  Excluding the acquisition of Avis Europe, revenues increased 3% during 2012, primarily due to a 5% increase in rental days.

Business Segment Discussion

The following discussion of fourth quarter operating results focuses on revenue and Adjusted EBITDA for each of our operating segments. Revenue and Adjusted EBITDA are expressed in millions.

Revenue increased 5% primarily due to a 5% increase in volume, while pricing declined less than 1%. Pricing improved over the course of the quarter, and was up 1% in December 2012 compared to December 2011. Adjusted EBITDA increased $31 million primarily due to higher revenue, a 4% decline in per-unit fleet costs and lower vehicle interest costs. Adjusted EBITDA includes $2 million of restructuring costs in fourth quarter 2011. 

Revenue increased 3% primarily due to a 6% increase in volume and a 5% decrease in pricing partially due to the strong growth of Budget in Europe and the inclusion of New Zealand-based Apex Car Rentals, which was acquired in October 2012.  Adjusted EBITDA declined $13 million compared to fourth quarter 2011, but increased $2 million excluding restructuring costs and $7 million of unfavorable currency effects. Adjusted EBITDA includes $11 million of restructuring costs in fourth quarter 2012 versus $3 million in fourth quarter 2011.

Truck rental revenue increased 1% primarily due to a 2% increase in volume, a 4% decrease in pricing and a 5% increase in ancillary revenue. Adjusted EBITDA declined $8 million due to higher fleet and fleet maintenance costs. Adjusted EBITDA includes $1 million of restructuring costs in fourth quarter 2012.

Other Items

• Zipcar Acquisition — On January 2, we announced that we have entered into a definitive agreement to acquire Zipcar, Inc., the world's leading car sharing network, for $12.25 per share in cash, or approximately $500 million in aggregate. The transaction is subject to approval by Zipcar shareholders and other customary closing conditions, and is expected to be completed in March or April  2013. We expect to generate $50 to $70 million in annual synergies as a result of the transaction.
   
• Corporate Debt Repayment — In the fourth quarter, the Company utilized available cash and the proceeds of its issuance of $300 million principal amount of 4.875% senior notes due 2017 to retire $16 million of its convertible notes due 2014 and all $325 million of its outstanding 7.75% senior notes due 2016.
   
• Annual Stockholders Meeting — We have scheduled our 2013 Annual Meeting of Stockholders for May 22, 2013 in Wilmington, Del. Stockholders of record as of the close of business on March 25, 2013 will be entitled to vote at the annual meeting.

Outlook

The Company today published estimates of its full-year 2013 results. For comparison purposes, these estimates exclude the effects of our pending acquisition of Zipcar.

The Company expects its full-year 2013 revenue to be approximately $7.6 to $7.8 billion, a 3% to 6% increase compared to 2012. The Company expects its Adjusted EBITDA to be approximately $725 million to $825 million, excluding certain items, a decline of 2% to 14%, reflecting increased revenue and the anticipated normalization of per-unit fleet costs. 

The Company expects per-unit fleet costs in its North America segment to increase approximately 15% to 20%, to roughly $275 to $290 per month in 2013. Total Company fleet costs are also expected to be $275 to $290 per unit per month in 2013, an increase of approximately 11% to 17% compared to 2012. 

The Company expects interest expense related to corporate debt to be approximately $230 to $235 million, a decline of $30 to $35 million compared to 2012. The Company also expects that its 2013 non-vehicle depreciation and amortization expense (excluding the amortization of intangible assets related to the acquisition of Avis Europe) will be approximately $125 to $130 million. As a result, the Company estimates that its pretax income will be approximately $360 million to $470 million, excluding certain items.

The Company expects that its effective tax rate in 2013 will be approximately 37% to 38%, excluding items, and that its diluted share count will be approximately 120 million. Based on these expectations, the Company estimates that its 2013 diluted earnings per share, excluding certain items, will be approximately $1.90 to $2.45.

The Company is continuing its award-winning efforts to reduce costs and enhance productivity through its Performance Excellence process-improvement initiative. The Company estimates that these efforts generated more than $50 million in benefits in 2012 compared to 2011 and expects that such initiatives will provide incremental benefits of more than $50 million in 2013, including roughly $10 million in the Company's European operations.

Investor Conference Call

Avis Budget Group will host a conference call to discuss fourth quarter results on February 14, 2013, at 8:30 a.m. (ET). Investors may access the call live at ir.avisbudgetgroup.com or by dialing (415) 228-4734 and providing the access code "Avis Budget." Investors are encouraged to dial in approximately 10 minutes prior to the call. A web replay will be available at ir.avisbudgetgroup.com following the call. A telephone replay will be available from 11:00 a.m. (ET) on February 14 until 8:00 p.m. (ET) on February 28 at (203) 369-1542, access code: "Avis Budget."

About Avis Budget Group, Inc.

Avis Budget Group, Inc. is a leading global provider of vehicle rental services through its Avis and Budget brands, with more than 10,000 rental locations in approximately 175 countries around the world. Avis Budget Group operates most of its car rental offices in North America, Europe and Australia directly, and operates primarily through licensees in other parts of the world. Avis Budget Group has approximately 28,000 employees and is headquartered in Parsippany, N.J. For more information, visit www.avisbudgetgroup.com.

The Avis Budget Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8891

Forward-Looking Statements

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", "may increase", "forecast" and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are based upon then current assumptions and expectations and are generally forward-looking in nature and not historical facts. Any statements that refer to outlook, expectations or other characterizations of future events, circumstances or results, including all statements related to future results, future fleet costs, acquisition synergies and cost-saving initiatives are also forward-looking statements.

There can be no assurance that the proposed acquisition of Zipcar will occur as currently contemplated, or at all, or that the expected benefits from the transaction will be realized on the timetable currently contemplated, or at all. Additional risks and uncertainties relating to the proposed acquisition of Zipcar include, but are not limited to, uncertainties as to the satisfaction of closing conditions to the acquisition, including timing and receipt of regulatory approvals, receipt of approval by the shareholders of Zipcar, the respective parties' performance of their obligations under the merger agreement relating to the acquisition, the status of capital markets, including availability and cost of capital, and other factors affecting the execution of the transaction.

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, the Company's ability to promptly and effectively integrate the businesses of Zipcar and Avis Budget (if and when the acquisition of Zipcar is completed), any change in economic conditions generally, particularly during our peak season or in key market segments, the high level of competition in the vehicle rental industry, a change in our fleet costs as a result of a change in the cost for new vehicles and/or the value of used vehicles, disruption in the supply of new vehicles, disposition of vehicles not covered by manufacturer repurchase programs, the financial condition of the manufacturers that supply our rental vehicles which could impact their ability to perform their obligations under our repurchase and/or guaranteed depreciation arrangements, any reduction in travel demand, including any reduction in airline passenger traffic, any occurrence or threat of terrorism, a significant increase in interest rates or borrowing costs, our ability to obtain financing for our operations, including the funding of our vehicle fleet via the asset-backed securities market, any changes to the cost or supply of fuel, any fluctuations related to the mark-to-market of derivatives which hedge our exposure to exchange rates, interest rates and fuel costs, the Company's ability to meet the financial and other covenants contained in the agreements governing our indebtedness, risks associated with litigation, regulation or governmental or regulatory inquiries or investigations involving the Company, and the Company's ability to accurately estimate its future results and implement its strategy for cost savings and growth. Other unknown or unpredictable factors could also have material adverse effects on Avis Budget Group's performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. 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, as of the date of this press release. 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, 2011, included under headings such as "Forward-Looking Statements", "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations", its most recently filed Form 10-Q, and in other filings and furnishings made by the Company with the SEC from time to time. Except for the Company's ongoing obligations to disclose material information under the federal securities laws, the Company undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless required by law.

This release includes certain financial measures such as Adjusted EBITDA, pretax income and diluted earnings per share, which exclude certain items under each measure and are not considered generally accepted accounting principles ("GAAP") measures as defined under SEC rules. Important information regarding such measures is contained on Table 1 and Table 5 to this release. The Company believes that these non-GAAP measures are useful in measuring the comparable results of the Company period-over-period. The GAAP measures most directly comparable to Adjusted EBITDA, pretax income and diluted earnings per share, excluding certain items under each measure, are net income, pretax income and diluted earnings per share. Because of the forward-looking nature of the Company's forecasted non-GAAP Adjusted EBITDA, pretax income and diluted earnings per share, excluding certain items, specific quantifications of the amounts that would be required to reconcile forecasted net income, pretax income and diluted earnings per share are not available. The Company believes that there is a degree of volatility with respect to certain of the Company's GAAP measures which preclude the Company from providing accurate forecasted GAAP to non-GAAP reconciliations. Based on the above, the Company believes that providing estimates of the amounts that would be required to reconcile the range of the non-GAAP Adjusted EBITDA, pretax income and diluted earnings per share, excluding certain items, to forecasted net income, pretax income, and diluted earnings per share would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above.

CONTACT: Media Contact:

         John Barrows

         (973) 496-7865

         PR@avisbudget.com

         

         Investor Contact:

         Neal Goldner

         (973) 496-5086

         IR@avisbudget.com