Avis Budget Group, Inc. earnings

Management highlights

• Brian addressed the recent stock price volatility, explaining that Pentwater Capital's significant ownership increase and high short interest led to a short squeeze, and Avis has not been active in share trading. • Executed on fleet reduction and supply discipline plan, with early results showing progress. • Americas saw growth in revenue driven by RPD performance, international executed well on mixed strategy. • Avis First in 36 locations with strong customer satisfaction, on track for Dallas Waymo launch in Q3. • Daniel walked through details of Americas and international segments, discussing revenue, fleet, depreciation, and leverage.

Guidance

• Exceeded adjusted EBITDA plan by ~$50 million in Q1. • Raising off-year guidance to $850 million to $1 billion in adjusted EBITDA. • Expect to reduce net corporate leverage ratio to below 6 by year end through earnings growth and debt repayment. • Aim to continue EBITDA growth and debt repayment strategy to reach target leverage ratios of 3 to 4 times.

Segment performance

Americas segment: Revenue grew 2.9% year-over-year, first surge in 10 quarters. Rental days essentially flat, RPD increased 2.8%, first positive pricing in Americas since Q4 2022. Ancillary performance grew 1.9% year-over-year, leisure share of revenue increased by 1.1 point. Fleet reduced by 0.6% to align with demand, monthly depreciation in Americas averaged ~$380, expected to decline in Q2. International segment: Rental days down 3.8% year-over-year, RPD increased 3% on a constant currency basis, shifting revenue mix towards higher return segments, facing uneven international demand influenced by geopolitical developments and higher travel costs.

Risks & headwinds

• Geopolitical environment, particularly in the Middle East, impacting energy prices and consumer behavior. • Uneven international demand influenced by geopolitical developments and higher travel costs. • Pentwater Capital's sale of shares violating SEC Section 16 short-swing profit rules, and Avis is pursuing rights on behalf of stockholders.

Analyst Q&A

• Q: Address pricing trends and confidence it can hold for balance of year.

  A: Brian and Daniel discussed pricing being constructive in Q1, improved in Feb and March, expecting stabilization in May and June.

• Q: On balance sheet, leverage ratio and steps to reduce.

  A: Focus on capital allocation shifting to debt repayment, expect to reduce leverage to below 6 by year end, aim for 3-4 times.

• Q: Fleet size, continue fleeting under demand.

  A: Continue fleeting under demand, focus on operational efficiency and utilization.

• Q: EBITDA guidance, normalization.

  A: $850 - $1 billion range for FY, not normalized yet, structural EBITDA should be higher.

• Q: Fleet cost, longer term comfort.

  A: Longer term low 300s possible with better asset management.

• Q: Used car supply impact and fleet disposition.

  A: Monitor used vehicle supply, being nimble, investing in innovative disposition methods.

• Q: Share issuance and pentwater's actions.

  A: No intention of issuing shares, pursuing shareholders' entitlement, Pentwater's sales disclosed after market close.

• Q: Remedy for short swing profit rule and industry discipline.

  A: Pursuing to get shareholders' owed dollars, industry appropriately fleeted, focus on own discipline.

• Q: Underlying demand environment and cost initiatives.

  A: Demand mixed in Q1, strengthening later, cost initiatives on operational efficiencies and technology