UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
_________________
FORM
8-K
_________________
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of Earliest Event Reported): July 2, 2008
(July 2, 2008)
_________________
Avis
Budget Group, Inc.
(Exact
Name of Registrant as Specified in its Charter)
_________________
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Delaware
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1-10308
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06-0918165
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification Number)
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6
Sylvan Way
Parsippany,
NJ
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07054
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||||
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(Address
of Principal Executive Offices)
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(Zip
Code)
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||||
(973)
496-4700
(Registrant's
telephone number, including area code)
N/A
(Former
name or former address if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
2.02. Results of
Operations and Financial Information.
On
July
2, 2008, we commented on the operating environment and expected results for
second quarter and full year 2008 as discussed in further detail in the press
release attached hereto as Exhibit 99.1, which is incorporated herein by
reference.
The
information in this item, including Exhibit 99.1, is being furnished, not
filed. Accordingly, the information in this item will not be
incorporated by reference into any registration statement filed by Avis Budget
Group under the Securities Act of 1933, as amended, unless specifically
identified therein as being incorporated therein by reference.
Item
9.01. Financial
Statements and Exhibits.
(d)
Exhibits
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Exhibit
No.
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Description
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99.1
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Press
Release dated July 2, 2008.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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AVIS
BUDGET GROUP, INC.
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By:
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/s/
David B. Wyshner
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David
B. Wyshner
Executive
Vice President and Chief Financial Officer
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Date: July
2, 2008
EXHIBIT
INDEX
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Exhibit
No.
|
Description
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99.1
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Press
Release dated July 2, 2008.
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EXHIBIT
99.1
Press
Release
AVIS
BUDGET GROUP COMMENTS ON OPERATING ENVIRONMENT AND
EXPECTED
RESULTS FOR SECOND QUARTER AND FULL YEAR 2008
Parsippany,
N.J., July 2, 2008– Avis Budget Group, Inc. (NYSE:
CAR) today commented on events and trends impacting the vehicle
services operating climate and the Company’s financial performance.
“While
our cost-saving efforts related to our Performance Excellence initiative are
accelerating as planned, the second quarter has turned out to be a significantly
more challenging operating environment than expected. As with our
entire industry, we are confronting rising fuel costs, weaker-than-expected
enplanements, lower commercial travel volumes and lower time and mileage rates
per day,” said Ronald L. Nelson, Chairman and Chief Executive Officer, Avis
Budget Group. “As a result, our second quarter results will be below
last year’s.”
“We
believe that vehicle rental demand in the summer months may outpace supply,
as
we and others in the industry have trimmed peak fleet levels. This should result
in favorable pricing comparisons and our advance reservations would support
that
view. But the recently announced capacity reductions by the airline industry
are
expected to contribute to a more difficult fourth quarter operating
environment,” said Mr. Nelson. “Given these dynamics, we expect that
full-year earnings will be below our 2007 results. In particular,
while it is difficult in the current environment to accurately forecast our
future results, we currently estimate that our 2008 EBITDA will be approximately
$350 million and our 2008 pretax income will be approximately $140 million,
excluding any unusual items.”
“We
remain focused on operating the business in the most efficient manner, including
optimizing fleet levels and implementing aggressive cost controls, while
continuing to execute our long-term strategy. Our experience selling
vehicles in the second quarter was favorable, and our Performance Excellence
process improvement initiative continues to help us in our efforts to offset
rising costs,” said Mr. Nelson. “In addition, we continue to expect
to generate significant free cash flow as a percentage of pretax income in
2008,
and we will consider deploying cash to reduce indebtedness or to repurchase
stock, as both alternatives appear remarkably attractive.”
The
Company anticipates releasing second quarter financial results after the market
close on August 6, 2008, and will provide more details at that
time.
About
Avis Budget Group, Inc.
Avis
Budget Group (NYSE: CAR) is a leading provider of vehicle rental services,
with
operations in more than 70 countries. Through its Avis and Budget
brands, the Company is the largest general-use vehicle rental company in each
of
North America, Australia, New Zealand and certain other regions based on
published airport statistics. Avis Budget Group is headquartered in
Parsippany, N.J. and has more than 30,000 employees. For more
information about Avis Budget Group, visit www.avisbudgetgroup.com.
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", "may fluctuate",
“forecast” and similar expressions or future or conditional verbs such as
"will", "should", "would", "may" and "could" are generally forward-looking
in
nature and not historical facts. Any statements that refer to
expectations or other characterizations of future events, circumstances or
results, including all statements related to quarterly or full year 2008
expected results, future costs and cost-saving initiatives 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, the high level of competition in the vehicle rental industry,
greater than expected cost increases for new vehicles, disposition of vehicles
not covered by manufacturer repurchase programs, a downturn in airline passenger
traffic, an occurrence or threat of terrorism, a significant increase in
interest rates or borrowing costs, fluctuations related to the mark-to-market
of
derivatives which hedge our exposure to interest rates and the Company’s ability
to accurately estimate its future results and implement its strategy for
growth. Other unknown or unpredictable factors also could 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,
2007 included under headings such as "Forward-Looking Statements", “Risk
Factors” and "Management’s Discussion and Analysis of Financial Condition and
Results of Operations". 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.
The
Company’s Share Repurchase Program may be suspended, modified or discontinued at
any time without prior notice, accordingly, there can be no assurances that
any
additional repurchases will occur.
This
release includes references to EBITDA and free cash flow, which are non-GAAP
financial measures as defined under SEC rules. EBITDA
represents income (loss) from continuing operations before non-vehicle related
depreciation and amortization, any goodwill impairment charge, non-vehicle
related interest and income taxes. We believe that EBITDA is useful as a
supplemental measure in evaluating the aggregate performance of our operating
businesses. EBITDA is the measure that is used by our management, including
our
chief operating decision maker, to perform such evaluation. It is also a
component of our financial covenant calculations under our credit facilities,
subject to certain adjustments. This release also includes references to EBITDA
and pretax income, excluding any unusual items, which are also non-GAAP
measures. We exclude such items as they are not representative of the
results of operations of our businesses and due to the difficulty of estimating
such items as well as certain tax items, we are not providing a reconciliation
to estimated net income for such measures. Free cash flow represents
net cash provided by operating activities adjusted to include the cash inflows
and outflows relating to (i) capital expenditures and GPS navigational units,
(ii) the investing and financing activities of our vehicle programs, (iii)
asset
sales and (iv) the change in restricted cash. We believe that free cash flow
is
useful to management and the Company’s investors in measuring the cash generated
by the Company that is available to be used to repurchase stock, repay debt
obligations, pay dividends and invest in future growth through new business
development activities or acquisitions.
Contacts
Media
Contact: Investor
Contact:
John
Barrows David
Crowther
973-496-7865
973-496-7277
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