• Avis Budget Group Reports Record Third Quarter Results

    Source: Nasdaq GlobeNewswire / 31 Oct 2022 16:02:01   America/New_York

    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/mNot 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. 


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