CAR · Avis Budget Group, Inc.

Notes & Operating Detail

Balance Sheet & Liquidity

As of June 30, 2025, Avis Budget Group reported negative shareholders' equity of $2.733 billion, driven by cumulative share repurchases and retained losses. Cash and cash equivalents stood at $541 million. Total debt (corporate and vehicle programs) reached $25.991 billion, an increase of $2.5 billion from December 31, 2024, primarily from vehicle-backed borrowings. The company's liquidity is heavily dependent on vehicle program financing, with $1.69 billion available capacity under committed facilities.

Commitments & Contractual Obligations

Vehicle purchase commitments totaled $2.3 billion over the next 12 months, a sharp decline of $4.0 billion from year-end 2024, reflecting management's response to fleet utilization adjustments and market conditions. No other material purchase commitments were disclosed.

Capital Allocation

Share repurchases were minimal at $3 million in H1 2025, all related to tax withholding on vested equity awards, with no open-market buybacks. The remaining authorization under the Stock Repurchase Program was $757 million. No dividends were declared. Debt capital activity was significant: corporate debt net borrowing of $490 million (proceeds $1.1B, repayments $0.6B), and vehicle program net borrowing of $2.0B (proceeds $14.1B, repayments $12.1B). Capital expenditures (property and equipment) were $85 million, focused on non-vehicle assets.

Segment / Geographic Mix

For Q2 2025, Americas segment revenues declined 1.2% YoY to $2.332 billion, while Adjusted EBITDA grew 18.3% to $220 million, expanding margin from 7.9% to 9.4%. International segment revenues rose 2.9% to $707 million, with Adjusted EBITDA surging 70.8% to $82 million, margin improving from 7.0% to 11.6%. The performance reflects cost controls and fleet management actions. Segment assets (ex-vehicle programs) totaled $6.8B for Americas and $3.0B for International, with vehicle program assets of $17.9B and $4.3B, respectively.

Cash Flow Quality

Cash Flow Quality

• CFO vs Net Income: Net loss of ($499M) contrasted with strong CFO of $1,456M, indicating significant non-cash charges. Key add-backs include vehicle depreciation ($1,350M), amortization of right-of-use assets ($533M), and vehicle related reserves ($175M). The large net loss stems partly from vehicle sale losses ($280M) and income tax adjustments.
• Capex Intensity: Property and equipment additions were modest at $85M (0.6% of CFO). However, vehicle program investing — net investment in vehicles of ($3,769M) after proceeds — drove total investing cash flow to ($3,956M). This is typical for rental car companies.
• FCF Coverage of Capital Returns: Free cash flow (not explicitly stated) is approximated by CFO minus capex = $1,371M, but excluding vehicle program investing which is operational. Share repurchases were minimal ($3M) and no dividends paid.
• Anomalies: Working capital changes included a $56M increase in receivables, $220M in income tax payments (likely catch-up), and a $535M decrease in operating lease liabilities. The large investing outflow is largely funded by vehicle program borrowings ($1,996M net).