Avis Budget Reports Record Q1 Results

Avis Budget Group Inc. today reported first-quarter revenue of $1.6 billion — a 31% increase compared with the prior-year first quarter. The company reported net income of $14 million, excluding certain items, and a GAAP net loss of $23 million due to debt extinguishment costs and acquisition-related charges. Results were consistent with preliminary estimates that Avis Budget published on May 1, the company reported.

For the quarter, the acquisition of Avis Europe contributed revenue of $327 million and an Adjusted EBITDA loss of $7 million, excluding certain items. Excluding Avis Europe, the company's revenue grew 5% in the first quarter and Adjusted EBITDA increased 52%, excluding certain items.

"We are pleased with our first quarter results, with organic revenue growth ahead of enplanement growth and Adjusted EBITDA reaching record levels, excluding certain items," said Ronald L. Nelson, Avis Budget Group chairman and CEO. "Travel demand across the majority of our markets remains healthy, and residual values of our vehicles in North America have proven to be significantly stronger than our original expectations.”

The first quarter revenue increase is primarily due to a 31% increase in rental days, a 3% decrease in pricing and a 43% increase in ancillary revenues, Avis Budget reported. Excluding Avis Europe, rental volume increased 6% and pricing declined 2%.

Outlook

The company expects its full-year 2012 revenue to be approximately $7.3 billion to $7.6 billion, a 24% to 29% increase compared to 2011, its Adjusted EBITDA to be approximately $825 million to $875 million, excluding certain items, an increase of 35% to 43%, and that its pretax income will be approximately $460 million to $510 million, excluding certain items.

The company now expects that its North American fleet costs will decrease 3% to 8% on a per-unit basis in 2012 compared to the prior year. Consistent with its long-standing policy, the company has prospectively revised the depreciation rates on many of the vehicles in its North American car rental fleet to reflect the significantly stronger residual values it currently foresees.

The company continues to expect to reach a run-rate of more than $35 million of annual synergies from the acquisition of Avis Europe within the first twelve months following the acquisition.

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