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Avis Budget Group Reports Second Quarter 2013 Results



Avis Budget Group Reports Second Quarter 2013 Results

  * Revenue increased 7% to $2.0 billion.
     
  * Pricing in North America increased 1% year-over-year.
      
  * Adjusted EBITDA was $179 million, excluding certain items.
     
  * Diluted earnings per share were $0.50, excluding certain items, on a GAAP
    net loss of $28 million.
     
  * Company updates its full-year earnings outlook.
     
  * Company authorizes $200 million share repurchase program.

PARSIPPANY, N.J., Aug. 6, 2013 (GLOBE NEWSWIRE) -- Avis Budget Group, Inc.
(Nasdaq:CAR) today reported results for its second quarter ended June 30,
2013. For the quarter, the Company reported revenue of $2.0 billion, a 7%
increase compared with the prior-year second quarter. Excluding certain items,
Adjusted EBITDA declined 33% to $179 million. The Company reported net income
of $58 million, excluding certain items, and a GAAP net loss of $28 million
due to debt-extinguishment expenses, transaction-related charges and
restructuring costs.

"Our second quarter results reflected volume growth in all regions and
increased pricing in North America, offset by the significant year-over-year
increase in North American fleet costs occasioned by the significant car-sale
gains and depreciation adjustments recorded in the comparable quarter of last
year," said Ronald L. Nelson, Avis Budget Group Chairman and Chief Executive
Officer. "Going forward, we expect volume and pricing trends in North America
to remain favorable and fleet costs to stabilize. In addition, summer trends
in Europe are also favorable, while the integration of Zipcar continues to
progress as planned, with both cost savings and incremental revenue
opportunities being realized."

Zipcar, acquired by the Company in March 2013, contributed approximately $76
million to revenues and $6 million to Adjusted EBITDA in the second quarter.

The Company also today announced that its Board of Directors has authorized a
new share repurchase program that will enable it to purchase up to $200
million of its common stock. The amount and timing of specific repurchases are
subject to market conditions, Company performance and stock price, applicable
legal requirements and other factors. Repurchases may be conducted in the open
market or in privately negotiated transactions. The Company intends to fund
share repurchases primarily with cash flow from operations and indicated that
the share repurchase authorization does not represent any change in its
targeted leverage ratios.

"Today's share-repurchase announcement reflects the confidence we have in our
business and our prospects," Mr. Nelson said. "We have reduced our diluted
share count by more than 16 million shares as a result of having repurchased
$270 million of our convertible debt in 2012 and 2013, and we remain committed
to delivering value to our shareholders, while also maintaining a prudent
capital structure and flexibility to execute on our strategic objectives."

Executive Summary

Total Company revenue increased 7% in second quarter 2013 compared to second
quarter 2012 primarily due to the acquisition of Zipcar and a 3% increase in
rental days. Second quarter Adjusted EBITDA decreased 33% to $179 million,
excluding certain items, primarily due to higher fleet costs in North America.

Business Segment Discussion

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

North America

(Consisting of the Company's U.S. car rental operations, Canadian vehicle
rental operations and Zipcar business)

                2013    2012     % change
Revenue          $1,292  $ 1,184 9%
Adjusted EBITDA  $ 114   $ 184   (38%)

Revenue increased 9% primarily due to the acquisition of Zipcar, a 2% increase
in volume and a 1% increase in pricing, including a 4% increase in leisure
pricing. Adjusted EBITDA decreased 38% primarily due to a 60%, or $120
million, increase in per-unit fleet costs, partially offset by higher pricing,
lower operating costs and lower vehicle interest expense. Excluding the
acquisition of Zipcar, revenue increased 3% and Adjusted EBITDA decreased 41%.
Adjusted EBITDA includes $1 million of restructuring costs in second quarter
2013.                            

International

(Consisting of the Company's international vehicle rental operations)

                2013   2012   % change
Revenue          $ 608  $ 579 5%
Adjusted EBITDA  $ 53   $ 59  (10%)

Revenue increased 5% primarily due to a 6% increase in rental days, partially
offset by a 2% decline in pricing. The October 2012 acquisition of Apex Car
Rentals contributed $7 million to revenue. Adjusted EBITDA declined $6 million
primarily reflecting inflationary increases in operating costs and increased
marketing commissions in Europe. Adjusted EBITDA includes $6 million of
restructuring costs in second quarter 2013 compared to $12 million in second
quarter 2012.

Truck Rental

(Consisting of the Company's U.S. truck rental operations)

                2013   2012   % change
Revenue          $ 102  $ 103 (1%)
Adjusted EBITDA  $ 8    $ 17  (53%)

Truck Rental revenue decreased 1% due to a 7% decrease in our truck rental
fleet and a corresponding decrease in volume, largely offset by a 9% increase
in pricing. Adjusted EBITDA declined by $9 million primarily due to our
previously announced initiative to reposition the business, which resulted in
$8 million of restructuring costs.

Other Items

  * Acquisition of Payless Car Rental - The Company announced in July that it
    had acquired Payless Car Rental, the sixth largest car rental company in
    North America. The addition of the Payless brand, which generated
    approximately $80 million in annual revenue in 2012, gives Avis Budget
    Group a meaningful position in the deep-value segment of the car rental
    market.
     
  * Debt Refinancing - In June, the Company refinanced its existing $900
    million in term loan borrowings due 2019 with $1 billion in new term loan
    borrowings due 2019, while also reducing the interest rate on such loans
    by 75 basis points. The Company also redeemed all of its $124 million
    outstanding 9.625% senior notes due 2018 and $100 million of its
    floating-rate senior notes due 2014.
     
  * Revolving Credit Facility Extension - In August, the Company amended its
    principal corporate revolving credit facility, extending its maturity from
    2016 to 2018, expanding its size from $1.5 billion to $1.65 billion, and
    reducing the interest rate under the facility by 75 basis points. As of
    June 30, 2013, the Company had no borrowings and $1.1 billion of letters
    of credit outstanding under the facility.

Outlook

The Company today updated its estimates of its full-year 2013 results based on
current economic conditions.

The Company continues to expect its full-year 2013 revenue to be approximately
$7.8 billion to $8.0 billion, a 6% to 9% increase compared to 2012. The
Company now expects its Adjusted EBITDA to be approximately $750 million to
$800 million, excluding certain items. The narrowing of the Company's
projected Adjusted EBITDA range from its initial expectation reflects
better-than-expected pricing trends in North America, offset by lower vehicle
residual values in North America and weak economic conditions in Europe and
Australia.

The Company now expects per-unit fleet costs in its North America segment to
increase approximately 25%, to roughly $300 per month in 2013. Total Company
fleet costs are expected to be $285 to $295 per unit per month in 2013, an
increase of approximately 15% to 20% compared to 2012.

The Company expects interest expense related to corporate debt to be
approximately $230 million, a decline of $30 million compared to 2012. The
Company continues to expect that its 2013 non-vehicle depreciation and
amortization expense (excluding the amortization of intangible assets related
to the acquisitions of Avis Europe and Zipcar) will be approximately $130
million to $135 million. As a result, the Company estimates that its pretax
income will be approximately $385 million to $440 million, excluding certain
items.

The Company continues to expect that its effective tax rate in 2013 will be
approximately 37% to 38%, excluding certain items, and that its diluted share
count will be approximately 117 to 118 million. Based on these expectations,
the Company estimates that its 2013 diluted earnings per share, excluding
certain items, will be approximately $2.05 to $2.35.

Investor Conference Call

Avis Budget Group will host a conference call to discuss second quarter
results on August 7, 2013, at 8:30 a.m. (ET). Investors may access the call
live at ir.avisbudgetgroup.com or by dialing (630) 395-0021 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 August 7 until 8:00 p.m. (ET) on August 21
at (203) 369-1043, access code: "Avis Budget."

About Avis Budget Group, Inc.

Avis Budget Group, Inc. is a leading global provider of vehicle rental
services, both through its Avis and Budget brands, which have more than 10,000
rental locations in approximately 175 countries around the world, and through
its Zipcar brand, which is the world's leading car sharing network, with more
than 810,000 members. 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 30,000 employees and is headquartered in Parsippany, N.J. More
information is available at 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", "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, future rental volume and pricing trends,
effective tax rates, acquisition synergies, cost-saving initiatives and share
repurchases are also 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 Company's ability to promptly and effectively
integrate the businesses of Zipcar, Payless and Avis Budget, 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 change in
travel demand, including any change 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 global 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, 2012 and Quarterly Report on Form
10-Q for the quarter ended March 31, 2013, included under headings such as
"Forward-Looking Statements", "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations", 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.

                                                                       Table 1
Avis Budget Group, Inc.
SUMMARY DATA SHEET
(In millions, except per share data)
                                                                        
                                                                        
                      Three Months Ended June 30,    Six Months Ended June 30,
                      2013        2012       %       2013     2012     %
                                             Change                    Change
Income Statement and                                                    
Other Certain Items
Net revenues           $ 2,002     $ 1,866   7%       $ 3,693  $ 3,489 6%
Adjusted EBITDA        164         254       (35%)    247      366     (33%)
(non-GAAP)
Income (loss) before   (38)       129        *        (95)    102      *
income taxes
Net income (loss)      (28)        79        *        (74)     56      *
Earnings (loss) per    (0.26)      0.66      *        (0.69)   0.47    *
share - Diluted
                                                                        
Excluding Certain                                                       
Items (non-GAAP) (A)
Net revenues           $ 2,002     $ 1,866   7%       $ 3,693  $ 3,489 6%
Adjusted EBITDA        179         266       (33%)    272      385     (29%)
Income before income   93         171        (46%)    98      190      (48%)
taxes
Net income             58         112        (48%)    67      126      (47%)
Earnings per share -   0.50        0.94      (47%)    0.58    1.04     (44%)
Diluted
                                                                        
                      As of                                             
                      June 30,    December
                      2013        31,                                   
                                  2012
Balance Sheet Items                                                     
Cash and cash          $ 503       $ 606                                
equivalents 
Vehicles, net          12,099      9,274                                
Debt under vehicle     9,357       6,806                                
programs
Corporate debt         3,416       2,905                                
Stockholders' equity   646         757                                  
                                                                        
Segment Results                                                         
                      Three Months Ended June 30,    Six Months Ended June 30,
                      2013        2012       %       2013     2012     %
                                             Change                    Change
Net Revenues                                                            
North America          $ 1,292     $ 1,184   9%       $ 2,392  $ 2,222 8%
International          608         579       5%       1,123    1,089   3%
Truck Rental           102         103       (1%)     178      177     1%
Corporate and Other   -           -          *       -         1       *
Total Company          $ 2,002     $ 1,866   7%       $ 3,693  $ 3,489 6%
                                                                        
Adjusted EBITDA (B)                                                     
North America          $ 114       $ 184     (38%)    $ 205    $ 277   (26%)
International          53          59        (10%)    67       81      (17%)
Truck Rental           8           17        (53%)    (2)      18      *
Corporate and Other    (11)        (6)       *        (23)     (10)    *
Total Company          $ 164       $ 254     (35%)    $ 247    $ 366   (33%)
                                                                        
Reconciliation of Adjusted EBITDA                                       
to Pretax Income (Loss)
Total Company          $ 164       $ 254              $ 247    $ 366    
Adjusted EBITDA
Less: Non-vehicle
related depreciation   37          29                 71       62       
and amortization
Interest expense
related to corporate                                                    
debt, net:
Interest expense       55          69                 114      142      
Early extinguishment   91          23                 131      50       
of debt
Transaction-related    19          4                  26       10       
costs
Income (loss) before   $ (38)      $ 129     *        $ (95)   $ 102   *
income taxes
_________                                                               
* Not meaningful.                                                       
(A) During the three and six months ended June 30, 2013, we recorded certain
items of $131 million and $193 million ($86 million and $141 million, net of
tax), respectively. For the three months ended June 30, 2013, these items
consisted of $91 million ($56 million, net of tax) for costs related to the
early extinguishment of corporate debt, $19 million ($16 million, net of tax)
for transaction-related costs primarily related to the integration of Avis
Europe and the acquisition and integration of Zipcar, $15 million ($10
million, net of tax) in restructuring expenses and $6 million ($4 million, net
of tax) for purchase-accounting effects related to the acquisitions of Avis
Europe and Zipcar. For the six months ended June 30, 2013, these items
consisted of $131 million ($95 million, net of tax) for costs related to the
early extinguishment of corporate debt, $26 million ($23 million, net of tax)
for transaction-related costs primarily related to the integration of Avis
Europe and the acquisition of Zipcar, $25 million ($16 million, net of tax) in
restructuring expenses and $11 million ($7 million, net of tax) for
purchase-accounting effects related to the acquisitions of Avis Europe and
Zipcar. 
During the three and six months ended June 30, 2012, we recorded certain items
of $42 million and $88 million ($33 million and $70 million, net of tax),
respectively. During the three months ended June 30, 2012, these items
consisted of $23 million ($21 million, net of tax) for the early
extinguishment of corporate debt, $12 million ($8 million, net of tax) in
restructuring expenses, $4 million ($2 million, net of tax) of
transaction-related costs related to the integration of Avis Europe and $3
million ($2 million, net of tax) for amortization expense related to
intangible assets recognized in the Avis Europe acquisition. During the six
months ended June 30, 2012, certain items consisted of $50 million ($44
million, net of tax) for the early extinguishment of corporate debt, $19
million ($13 million, net of tax) in restructuring expenses, $10 million ($7
million, net of tax) in transaction-related costs related to the integration
of Avis Europe and $9 million ($6 million, net of tax) for amortization
expense related to the intangible assets recognized in the Avis Europe
acquisition.
(B) See Table 5 for a description of Adjusted EBITDA. Adjusted EBITDA includes
stock-based compensation expense and deferred financing fee amortization of
$12 million and $11 million in second quarter 2013 and 2012, respectively, and
$22 million and $21 million in the six months ended June 30, 2013 and 2012,
respectively.

                                                                     
                                                                    Table 2
Avis Budget Group, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
                                                                     
                                                                     
                                Three Months Ended June  Six Months Ended June
                               30,                      30, 
                               2013         2012        2013        2012
Revenues                                                             
Vehicle rental                  $ 1,438      $ 1,334     $ 2,654     $ 2,502
Other                           564          532         1,039       987
Net revenues                    2,002        1,866       3,693       3,489
                                                                     
Expenses                                                             
Operating                       1,007        953         1,937       1,847
Vehicle depreciation and lease  476          334         863         652
charges, net 
Selling, general and            274          233         498         452
administrative
Vehicle interest, net           66           80          123         153
Non-vehicle related             37           29          71          62
depreciation and amortization
Interest expense related to                                          
corporate debt, net:
 Interest expense               55           69          114         142
 Early extinguishment of debt   91           23          131         50
Transaction-related costs       19           4           26          10
Restructuring expense           15           12          25          19
Total expenses                  2,040        1,737       3,788       3,387
                                                                     
Income (loss) before income     (38)         129         (95)        102
taxes
Provision for (benefit from)    (10)         50          (21)        46
income taxes
Net income (loss)               $ (28)       $ 79        $ (74)      $ 56
                                                                     
Earnings (loss) per share                                            
Basic                           $ (0.26)     $ 0.74      $ (0.69)    $ 0.52
Diluted                         $ (0.26)     $ 0.66      $ (0.69)    $ 0.47
                                                                     
Weighted average shares                                              
outstanding
Basic                           108.4        106.7       108.0       106.3
Diluted                         108.4        121.9       108.0       124.8

                                                                       
                                                                       Table 3
Avis Budget Group, Inc.
SEGMENT REVENUE DRIVER ANALYSIS 
 
                                                                       
                   Three Months Ended June 30,    Six Months Ended June 30,
                   2013       2012      % Change  2013      2012      % Change
CAR RENTAL                                                             
North America                                                          
Segment (A)
Rental Days        23,016     22,570    2%        42,739    42,010    2%
(000's)
Time and Mileage    $ 39.26    $ 38.75  1%         $ 40.22   $ 39.23  3%
Revenue per Day 
Average Rental      358,943    348,730  3%         335,773   326,849  3%
Fleet
                                                                       
International                                                          
Segment 
Rental Days        9,312      8,813     6%        16,812    16,152    4%
(000's) 
Time and Mileage
Revenue per Day     $ 41.79    $ 42.76  (2%)       $ 42.73   $ 44.04  (3%)
(B)
Average Rental      146,538    141,448  4%         134,394   129,486  4%
Fleet
                                                                       
Total Car Rental                                                       
(A) 
Rental Days         32,328     31,383   3%         59,551    58,162   2%
(000's) 
Time and Mileage    $ 39.99    $ 39.88  0%         $ 40.93   $ 40.56  1%
Revenue per Day 
Average Rental      505,481    490,178  3%         470,167   456,335  3%
Fleet
                                                                       
TRUCK RENTAL                                                           
SEGMENT
Rental Days        1,007      1,101     (9%)      1,860     1,978     (6%)
(000's) 
Time and Mileage    $ 81.90    $ 75.23  9%         $ 76.91   $ 72.27  6%
Revenue per Day 
Average Rental      25,138     26,925   (7%)       25,885    26,026   (1%)
Fleet
_________                                                              
Rental days and time and mileage revenue per day are calculated based on the
actual rental of the vehicle during a 24-hour period. Our calculation of
rental days and time and mileage revenue per day may not be comparable to the
calculation of similarly-titled statistics by other companies.
(A) Amounts exclude Zipcar.
(B) Excluding currency exchange effects, time and mileage revenue per day
decreased 3 percentage points in the three and six months ended June 30, 2013.

                                                           
                                                          Table 4
Avis Budget Group, Inc.
CONSOLIDATED CONDENSED SCHEDULES OF CASH FLOWS AND FREE CASH FLOWS
(In millions)
                                                           
CONSOLIDATED CONDENSED SCHEDULE OF CASH FLOWS
                                                           
                                                          Six Months Ended
                                                          June 30, 2013
Operating Activities                                       
Net cash provided by operating activities                  $ 874
                                                           
Investing Activities                                       
Net cash used in investing activities exclusive of         (475)
vehicle programs
Net cash used in investing activities of vehicle programs  (2,983)
Net cash used in investing activities                      (3,458)
                                                           
Financing Activities                                       
Net cash provided in financing activities exclusive of     382
vehicle programs
Net cash provided by financing activities of vehicle       2,116
programs
Net cash provided by financing activities                  2,498
                                                           
Effect of changes in exchange rates on cash and cash       (17)
equivalents
Net change in cash and cash equivalents                    (103)
Cash and cash equivalents, beginning of period             606
Cash and cash equivalents, end of period                   $ 503
                                                           
                                                           
CONSOLIDATED SCHEDULE OF FREE CASH FLOWS (A)
                                                          Six Months Ended
                                                          June 30, 2013
Pretax loss                                                $ (95)
Add-back of non-vehicle related depreciation and           71
amortization
Add-back of debt extinguishment costs                      131
Add-back of transaction-related costs                      26
Working capital and other                                  (55)
Capital expenditures                                       (56)
Tax payments, net of refunds                               (23)
Vehicle programs and related (B)                           20
Free Cash Flow                                             19
                                                           
Acquisition and related payments, net of acquired cash     (495)
(C)
Borrowings, net of debt repayments                         397
Transaction-related payments                               (28)
Financing costs, foreign exchange effects and other        4
Net change in cash and cash equivalents (per above)        $ (103)
_____________________________                              
(A) See Table 5 for a description of Free Cash Flow.
(B) Includes vehicle-backed borrowings (repayments) that are incremental to
vehicle-backed borrowings (repayments) required to fund incremental (reduced)
vehicle and vehicle-related assets. 
(C) Includes acquisition-related payments incurred as a result of the
acquisition of Zipcar.
                                                           
RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES
                                                           
                                                          Six Months Ended
                                                          June 30, 2013
Free Cash Flow (per above)                                 $ 19
Investing activities of vehicle programs                   2,983
Financing activities of vehicle programs                   (2,116)
Capital expenditures                                       56
Proceeds received on asset sales                           (7)
Change in restricted cash                                  (14)
Acquisition-related payments                               (19)
Transaction-related payments                               (28)
Net Cash Provided by Operating Activities (per above)      $ 874

                                                            
                                                           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 below the reasons we present these non-GAAP financial measures, a
description of what they represent and a reconciliation to the most comparable
financial measure calculated and presented in accordance with GAAP.
                                                            
DEFINITIONS
Adjusted EBITDA                                             
The accompanying press release presents Adjusted EBITDA, which represents
income before non-vehicle related depreciation and amortization, any
impairment charge, transaction-related costs, non-vehicle related interest,
transaction-related costs and income taxes. We believe that Adjusted EBITDA is
useful as a supplemental measure in evaluating the aggregate performance of
our operating businesses. Adjusted 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. Adjusted EBITDA
should not be considered in isolation or as a substitute for net income (loss)
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 to income (loss) before income taxes can
be found on Table 1 and a reconciliation of income (loss) before income taxes
to net income (loss) can be found on Table 2.
                                                            
Certain items                                               
The accompanying press release and tables present Adjusted EBITDA, loss before
income taxes, net loss and diluted earnings per share for the three months
ended June 30, 2013, excluding certain items. For the three months ended June
30, 2013, these items consisted of $91 million ($56 million, net of tax) for
costs related to the early extinguishment of corporate debt, $19 million ($16
million, net of tax) for transaction-related costs primarily related to the
integration of Avis Europe and the acquisition and integration of Zipcar, $15
million ($10 million, net of tax) in restructuring expenses and $6 million ($4
million, net of tax) for purchase-accounting effects related to the
acquisitions of Avis Europe and Zipcar.
For the six months ended June 30, 2013, these items consisted of $131 million
($95 million, net of tax) for costs related to the early extinguishment of
corporate debt, $26 million ($23 million, net of tax) for transaction-related
costs primarily related to the integration of Avis Europe and the acquisition
and integration of Zipcar, $25 million ($16 million, net of tax) in
restructuring expenses and $11 million ($7 million, net of tax) for
purchase-accounting effects related to the acquisitions of Avis Europe and
Zipcar. 
We believe that the measures referred to above are useful as supplemental
measures in evaluating the aggregate performance of the Company. We exclude
restructuring-related expenses, costs related to early extinguishment of debt
and other certain items as such items are not representative of the results of
operations of our business for the three and six months ended June 30, 2013.
                                                            
Reconciliation of Avis Budget Group, Inc. Adjusted EBITDA, excluding certain
items to net loss:
                                                            
                                     Three Months Ended    Six Months Ended
                                     June 30, 2013         June 30, 2013
Adjusted EBITDA, excluding certain    $ 179                 $ 272
items
                                                            
Less: Non-vehicle related
depreciation and amortization                               
(excluding 
acquisition-related amortization      31                    60
expense)
Interest expense related to corporate debt, net (excluding  
early 
extinguishment of debt)               55                    114
Income before income taxes,           93                    98
excluding certain items
                                                            
Less certain items:                                         
Early extinguishment of debt          91                    131
Transaction-related costs             19                    26
Restructuring expense                 15                    25
Acquisition-related amortization      6                     11
expense
Loss before income taxes              (38)                  (95)
Benefit from income taxes             (10)                  (21)
Net loss                              $ (28)                $ (74)
                                                            
Reconciliation of net income, excluding certain items to net loss:
                                                            
Net income, excluding certain items   $ 58                  $ 67
Less certain items, net of tax:                             
Early extinguishment of debt          56                    95
Transaction-related costs             16                    23
Restructuring expense                 10                    16
Acquisition-related amortization      4                     7
expense
Net loss                              $ (28)                $ (74)
                                                            
Earnings per share, excluding         $ 0.50                $ 0.58
certain items (diluted)
                                                            
Loss per share (diluted)              $ (0.26)              $ (0.69)
                                                            
Shares used to calculate earnings
per share, excluding certain items    116.3                 117.2
(diluted)
                                                            
The accompanying press release and tables present Adjusted EBITDA, income
before income taxes, net income and diluted earnings per share for the three
and six months ended June 30, 2012, excluding certain items. For the three
months ended June 30, 2012, certain items consisted of $23 million ($21
million, net of tax) of expense for the early extinguishment of corporate
debt, $12 million ($8 million, net of tax) in restructuring expenses, $4
million ($2 million, net of tax) of transaction-related costs related to the
integration of the operations of Avis Europe and $3 million ($2 million, net
of tax) for amortization expense related to intangible assets recognized in
the Avis Europe acquisition.
For the six months ended June 30, 2012, certain items consisted of $50 million
($44 million, net of tax) of expense for the early extinguishment of corporate
debt, $19 million ($13 million, net of tax) in restructuring expenses, $10
million ($7 million, net of tax) of transaction-related costs related to the
integration of the operations of Avis Europe and $9 million ($6 million, net
of tax) for amortization expense related to intangible assets recognized in
the Avis Europe acquisition.
We believe that the measures referred to above are useful as supplemental
measures in evaluating the aggregate performance of the Company. We exclude
restructuring-related expenses, costs related to early extinguishment of debt
and other certain items as such items are not representative of the results of
operations of our business for the three and six months ended June 30, 2012.
                                                            
Reconciliation of Avis Budget Group, Inc. Adjusted EBITDA, excluding certain
items to net income:
                                                            
                                     Three Months Ended    Six Months Ended
                                     June 30, 2012         June 30, 2012
Adjusted EBITDA, excluding certain    $ 266                 $ 385
items
                                                            
Less: Non-vehicle related
depreciation and amortization                               
(excluding 
acquisition-related amortization      26                    53
expense)
Interest expense related to corporate debt, net (excluding  
early 
extinguishment of debt)               69                    142
Income before income taxes,           171                   190
excluding certain items
                                                            
Less certain items:                                         
Early extinguishment of debt          23                    50
Restructuring expense                 12                    19
Transaction-related costs             4                     10
Acquisition-related amortization      3                     9
expense
Income before income taxes            129                   102
Provision for income taxes            50                    46
Net income                            $ 79                  $ 56
                                                            
Reconciliation of net income, excluding certain items to net income:
                                                            
Net income, excluding certain items   $ 112                 $ 126
Less certain items, net of tax:                             
Early extinguishment of debt          21                    44
Restructuring expense                 8                     13
Transaction-related costs             2                     7
Acquisition-related amortization      2                     6
expense
Net income                            $ 79                  $ 56
                                                            
Earnings per share, excluding         $ 0.94                $ 1.04
certain items (diluted)
                                                            
Earnings per share (diluted)          $ 0.66                $ 0.47
                                                            
Shares used to calculate earnings
per share, excluding certain items    121.9                 124.8
(diluted)
                                                            
Free Cash Flow                                              
Represents Net Cash Provided by Operating Activities adjusted to reflect the
cash inflows and outflows relating to capital expenditures and GPS
navigational units, the investing and financing activities of our vehicle
programs, asset sales, if any, and to exclude debt extinguishment costs and
transaction-related costs. We believe that Free Cash Flow is useful to
management and investors in measuring the cash generated 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.
Free Cash Flow should not be construed as a substitute in measuring operating
results or liquidity, and our presentation of Free Cash Flow may not be
comparable to similarly-titled measures used by other companies. A
reconciliation of Free Cash Flow to the appropriate measure recognized under
GAAP is provided on Table 4.

CONTACT: Media Contact:
         John Barrows
         (973) 496-7865
         PR@avisbudget.com
        
         Investor Contact:
         Neal Goldner
         (973) 496-5086
         IR@avisbudget.com

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