Core Insights - Avis Budget Group, Inc. (CAR) reported second-quarter 2025 results that were narrower than expected, with adjusted earnings per share of 10 cents, missing the Zacks Consensus Estimate by 95.1% and decreasing 75.6% from the previous year [1][8] - Revenues for the quarter were $3 billion, slightly below consensus estimates and showing a marginal year-over-year decline [1][8] - Following the earnings release on July 29, CAR's stock experienced a 21.9% decline due to disappointing earnings and revenue results [1][8] Financial Performance - Year-to-date, CAR shares have surged 97.5%, contrasting with a 3.3% decline in the industry and a 7.3% growth in the Zacks S&P 500 composite [2] - Revenues from the Americas segment were $2.3 billion, reflecting a 1% decline from the previous year and missing the estimate of $2.4 billion [3] - International revenues totaled $707 million, down 3% year-over-year, also missing the estimate of $698.2 million [3] - Adjusted EBITDA for the company was $277 million, up 29% from the prior year, with the Americas segment contributing $220 million (an 18% increase) and international operations reporting $82 million (a 71% increase) [4] Balance Sheet and Cash Flow - At the end of Q2 2025, Avis Budget had cash and cash equivalents of $541 million, up from $516 million at the end of Q1 2025 [5] - Corporate debt increased to $6.1 billion from $5.9 billion in the previous quarter [5] - The company generated $837 million in net cash from operating activities, with adjusted free cash flow utilized at $17 million and capital expenditure at $53 million [5]

Market Performance - U.S. stocks showed mixed trading results, with the Nasdaq Composite gaining approximately 0.5% [1] - The Dow increased by 0.02% to 44,639.69, while the S&P 500 rose by 0.21% to 6,384.38 [1] - Utilities shares experienced a rise of 0.8%, while energy stocks fell by 1.2% [1] Commodities - Crude oil prices increased by 0.8% to $69.73, while gold rose by 1% to $3,356.50 [5] - Silver prices decreased by 1.3% to $37.775, and copper fell by 0.9% to $5.5750 [5] European Markets - European shares were mostly higher, with the eurozone's STOXX 600 gaining 0.01% and Spain's IBEX 35 Index rising by 0.21% [6] - London's FTSE 100 fell by 0.08%, while Germany's DAX 40 and France's CAC 40 rose by 0.20% and 0.26%, respectively [6] Asian Markets - Asian markets closed mixed, with Japan's Nikkei 225 down by 0.05% and Hong Kong's Hang Seng down by 1.36% [7] - China's Shanghai Composite rose by 0.17%, and India's BSE Sensex gained 0.18% [7] Company Earnings - Wingstop Inc. shares surged by 24% to $360.20 after reporting better-than-expected second-quarter EPS and sales [9] - FTAI Aviation Ltd. shares increased by 20% to $137.34 following strong quarterly EPS and sales [9] - Rocky Brands Inc. shares rose by 26% to $29.00 after announcing better-than-expected quarterly earnings [9] - Vyne Therapeutics Inc. shares plummeted by 74% to $0.3764 after failing to meet trial endpoints [9] - Sos Ltd. shares dropped by 55% to $2.7184 after announcing a $7.5 million registered direct offering [9] - Avis Budget Group, Inc. shares fell by 15% to $172.40 following worse-than-expected quarterly EPS and sales [9] Economic Indicators - The U.S. economy expanded at an annualized rate of 3% in the second quarter, recovering from a 0.5% contraction in the previous quarter [11] - Private businesses added 104,000 jobs in July, surpassing market estimates of a 75,000 increase [11] - Crude oil inventories in the U.S. rose by 7.698 million barrels, contrasting with market expectations of a 2 million barrel decline [11]

Core Viewpoint - Avis Budget Group's stock has experienced a significant decline following disappointing second-quarter earnings, despite previous optimism in the rental car sector [1][3]. Financial Performance - Revenue for the second quarter was flat at $3.04 billion, slightly exceeding the consensus estimate of $3 billion [4]. - Adjusted EBITDA increased by 29%, rising from $214 million to $277 million [4]. - Earnings per share (EPS) on a GAAP basis were reported at $0.10, down from $0.41 a year ago and significantly below estimates of $1.83 [5]. Strategic Developments - Avis announced a multiyear strategic partnership with Waymo to launch fully autonomous ride-hailing services in Dallas, with Avis managing the fleet [5]. - The company introduced Avis First, a premium service offering features like frictionless curbside pick-up and drop-off, dedicated concierge, and current-year vehicles [5]. Future Outlook - For the full year, Avis is targeting adjusted EBITDA between $900 million and $1 billion, with per-unit fleet costs projected at $310 to $320 per month [6]. - The company did not provide guidance for the third quarter, but the summer season is critical for profitability [6]. - Despite the recent stock decline, Avis is positioned well with product innovations, and if the economy remains strong, there is potential for stock recovery [7].

Financial Data and Key Metrics Changes - The company is experiencing challenges with revenue per day (RPD) due to tariffs and recalls affecting fleet management, which has led to a conservative approach in accounting for gross depreciation [60][64]. - The company expects a normalized EBITDA of at least $1 billion going forward, despite current challenges [80][81]. Business Line Data and Key Metrics Changes - The introduction of Avis First aims to redefine the premium car rental experience, with expectations that it will capture a significant share of rental days similar to premium airline seats [106][112]. - The company is focusing on maintaining a fleet of newer, low-mileage vehicles for the Avis First offering, which may involve reallocating resources within the existing fleet [50][51]. Market Data and Key Metrics Changes - The overall car rental market is competitive, with the company aiming to differentiate itself through innovative offerings rather than competing solely on price [95]. - The company is seeing signs of demand recovery in the leisure segment, which is stronger than the commercial segment [58]. Company Strategy and Development Direction - The company is prioritizing value-creating innovation as a core responsibility, with a focus on enhancing customer experience and operational efficiency [9][10]. - The partnership with Waymo is seen as a strategic move to position the company within the autonomous vehicle ecosystem, leveraging its fleet management expertise [30][32]. Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current operational challenges due to tariffs and recalls but remains optimistic about long-term growth opportunities in the mobility ecosystem [65][66]. - The company is committed to maintaining a disciplined approach to investments, ensuring that growth translates into free cash flow while enhancing customer experience [102][103]. Other Important Information - Avis First has been launched in over a dozen locations, with plans to expand to over 50 markets by the end of the year [22][112]. - The company is actively managing its fleet to adapt to market conditions, including being cautious with vehicle purchases in light of tariff uncertainties [85][86]. Q&A Session Summary Question: Confirmation of competitive process for Waymo partnership - Management indicated that discussions with multiple AV parties were ongoing, and both parties were aware of the competitive landscape [37]. Question: Long-term vision for Avis Budget's business model - The company sees its core competency in mega fleet management continuing, with potential expansion into autonomous ride-hailing as a future growth area [40][41]. Question: Bandwidth for future partnerships - Management expressed confidence in their capacity to take on future partnerships while maintaining focus on the core rental car business [47]. Question: Fleet considerations for Avis First - The company plans to include more premium vehicles in the fleet for Avis First, ensuring a high-quality customer experience [50][51]. Question: Guidance on RPD and market conditions - Management noted that RPD has been challenged but is seeing signs of improvement due to tightening industry supply and strong leisure demand [58][92]. Question: Revenue model for AV strategy - The specifics of the revenue model for the Waymo partnership are not disclosed, but management emphasized alignment on profitability variables [70][71]. Question: Measuring success of investments - The company evaluates investments based on growth, free cash flow generation, and customer experience enhancement [102][103].

Financial Data and Key Metrics Changes - The company is experiencing challenges with revenue per day (RPD) due to tariffs and recalls affecting fleet management and vehicle availability [60][64][66] - The guidance for the second half of the year is between $900 million to $1 billion, reflecting the impact of these challenges [66][80] Business Line Data and Key Metrics Changes - The introduction of Avis First is aimed at creating a premium product offering that enhances customer experience and differentiates the brand from competitors [11][12][14] - Avis First is expected to be operational in over 50 markets by the end of the year, with a pricing strategy designed to be margin accretive from day one [23][113] Market Data and Key Metrics Changes - The leisure travel segment is currently stronger than commercial travel, indicating a shift in demand patterns post-pandemic [58] - The overall industry supply is tightening, which is expected to positively influence RPD in the coming months [93] Company Strategy and Development Direction - The company is focusing on structural growth through value-creating innovation, such as the Avis First initiative and partnerships with autonomous vehicle companies like Waymo [10][24][34] - Avis aims to expand its footprint in the mobility ecosystem, leveraging its core competencies in fleet management to capture a larger share of the market [32][78] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the competitive environment but emphasizes the importance of not competing solely on price, instead focusing on enhancing customer value through differentiated offerings [96] - The company is optimistic about the future, with plans to grow its market presence and innovate within the car rental industry [34][113] Other Important Information - The company has faced significant challenges due to recalls affecting 4% of its fleet, particularly impacting higher RPD segments [64][66] - The partnership with Waymo is seen as a strategic move to position Avis as a key player in the autonomous vehicle space, with initial testing already underway [30][71] Q&A Session Summary Question: Can you confirm whether the Waymo agreement was the result of a competitive process? - Management indicated that discussions with multiple AV parties were ongoing, suggesting a competitive landscape for the partnership [38] Question: What is the long-term vision for Avis Budget's business model? - The focus remains on mega fleet management, with plans to expand into autonomous ride-hailing as the market evolves [42] Question: How do you view the bandwidth for future partnerships? - Management expressed confidence in their capacity to take on additional partnerships while maintaining focus on the core rental car business [48] Question: What is the expected impact of Avis First on fleet management? - The initiative will involve a careful selection of premium vehicles, with a focus on enhancing the overall customer experience [52][54] Question: How is the company addressing the challenges posed by tariffs and recalls? - Management is taking a disciplined approach to fleet management and is in ongoing discussions with OEMs to navigate these challenges [85][86] Question: What metrics will be used to measure the success of new investments? - The company will focus on growth, free cash flow generation, and customer experience as key metrics for evaluating success [104][105] Question: What is the expected uptake for Avis First? - While it is early to determine trends, management is optimistic about the potential for Avis First to capture a significant share of rental days [107][113] Question: How do you see the market for the Waymo solution evolving? - Management anticipates that the partnership will expand into additional markets, with a focus on developing a sustainable revenue model [115]

[PART I Financial Information](index=4&type=section&id=PART%20I%20Financial%20Information) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Avis Budget Group, Inc., including statements of comprehensive income, balance sheets, cash flows, and stockholders' equity, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items for the periods ended June 30, 2025 and 2024 [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Three Months Ended June 30, 2025 vs. 2024 | Metric | 2025 (Millions) | 2024 (Millions) | Change ($M) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :---------- | :--------- | | Revenues | $3,039 | $3,048 | $(9) | -0.3% | | Total expenses | $3,024 | $3,021 | $3 | 0.1% | | Income before income taxes | $15 | $27 | $(12) | -44.4% | | Net income attributable to Avis Budget Group, Inc. | $4 | $14 | $(10) | -71.4% | | Basic EPS | $0.10 | $0.41 | $(0.31) | -75.6% | | Diluted EPS | $0.10 | $0.41 | $(0.31) | -75.6% | Six Months Ended June 30, 2025 vs. 2024 | Metric | 2025 (Millions) | 2024 (Millions) | Change ($M) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :---------- | :--------- | | Revenues | $5,469 | $5,599 | $(130) | -2.3% | | Total expenses | $6,131 | $5,714 | $417 | 7.3% | | Loss before income taxes | $(662) | $(115) | $(547) | 475.7% | | Net loss attributable to Avis Budget Group, Inc. | $(501) | $(100) | $(401) | 401.0% | | Basic EPS | $(14.24) | $(2.80) | $(11.44) | 408.6% | | Diluted EPS | $(14.24) | $(2.80) | $(11.44) | 408.6% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025 vs. December 31, 2024 | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change ($M) | Change (%) | | :----------------------------------- | :----------------------- | :---------------------- | :---------- | :--------- | | Total assets exclusive of vehicle programs | $10,157 | $9,668 | $489 | 5.1% | | Total assets under vehicle programs | $22,214 | $19,373 | $2,841 | 14.7% | | **Total assets** | **$32,371** | **$29,041** | **$3,330** | **11.5%** | | Total liabilities exclusive of vehicle programs | $12,393 | $11,047 | $1,346 | 12.2% | | Total liabilities under vehicle programs | $22,711 | $20,311 | $2,400 | 11.8% | | **Total liabilities** | **$35,104** | **$31,358** | **$3,746** | **11.9%** | | Total stockholders' equity | $(2,733) | $(2,317) | $(416) | -17.9% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Six Months Ended June 30, 2025 vs. 2024 | Cash Flow Activity | 2025 (Millions) | 2024 (Millions) | Change ($M) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :---------- | :--------- | | Net cash provided by operating activities | $1,456 | $1,473 | $(17) | -1.2% | | Net cash used in investing activities | $(3,956) | $(2,555) | $(1,401) | 54.8% | | Net cash provided by financing activities | $2,471 | $1,036 | $1,435 | 138.5% | | Effect of changes in exchange rates | $35 | $(15) | $50 | -333.3% | | Net increase (decrease) in cash | $6 | $(61) | $67 | -109.8% | | Cash and cash equivalents, end of period | $603 | $583 | $20 | 3.4% | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' Equity Attributable to Avis Budget Group, Inc. (Millions) | Period | Balance as of March 31, 2025 | Net Income (Loss) | Other Comprehensive Income (Loss) | Net Activity Restricted Stock Units | Balance as of June 30, 2025 | | :----------------------------------- | :--------------------------- | :---------------- | :-------------------------------- | :--------------------------------- | :-------------------------- | | Three Months Ended June 30, 2025 | $(2,822) | $4 | $67 | $6 | $(2,745) | | Three Months Ended June 30, 2024 | $(515) | $14 | $5 | $6 | $(490) | Stockholders' Equity Attributable to Avis Budget Group, Inc. (Millions) | Period | Balance as of Dec 31, 2024 | Net Income (Loss) | Other Comprehensive Income (Loss) | Net Activity Restricted Stock Units | Balance as of June 30, 2025 | | :----------------------------------- | :--------------------------- | :---------------- | :-------------------------------- | :--------------------------------- | :-------------------------- | | Six Months Ended June 30, 2025 | $(2,327) | $(501) | $75 | $8 | $(2,745) | | Six Months Ended June 30, 2024 | $(349) | $(100) | $(39) | $(2) | $(490) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 Basis of Presentation](index=12&type=section&id=Note%201%20Basis%20of%20Presentation) This note outlines the basis for preparing the unaudited condensed consolidated financial statements, including the company's reportable segments (Americas and International), significant accounting policies, and recent accounting pronouncement adoptions and upcoming changes. It also details revenue disaggregation by geography and brand - The company operates two reportable business segments: Americas (North, South, Central America, Caribbean) and International (Europe, Middle East, Africa, Asia, Australasia), both including vehicle rental and car sharing operations[30](index=30&type=chunk) Revenues Disaggregated by Geography (Millions) | Geography | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Americas | $2,332 | $2,361 | $4,239 | $4,354 | | Europe, Middle East and Africa | $564 | $544 | $925 | $926 | | Asia and Australasia | $143 | $143 | $305 | $319 | | **Total revenues** | **$3,039** | **$3,048** | **$5,469** | **$5,599** | Revenues Disaggregated by Brand (Millions) | Brand | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Avis | $1,718 | $1,747 | $3,090 | $3,207 | | Budget | $1,133 | $1,117 | $2,018 | $2,038 | | Other (includes Zipcar) | $188 | $184 | $361 | $354 | | **Total revenues** | **$3,039** | **$3,048** | **$5,469** | **$5,599** | - The company adopted ASU 2023-07, 'Improvements to Reportable Segment Disclosures,' on January 1, 2024, enhancing disclosures about significant segment expenses, and expects to adopt ASU 2023-09, 'Improvements to Income Tax Disclosures,' on January 1, 2025[40](index=40&type=chunk)[41](index=41&type=chunk) [Note 2 Leases](index=16&type=section&id=Note%202%20Leases) This note details the company's lease activities, distinguishing between lessor and lessee roles. It provides disaggregated lease revenues by geography and brand, and outlines lease expenses and related balance sheet and cash flow information for operating leases Total Lease Revenues (Millions) | Period | 2025 | 2024 | Change ($M) | Change (%) | | :------------------------------- | :----- | :----- | :---------- | :--------- | | Three Months Ended June 30 | $2,989 | $2,994 | $(5) | -0.2% | | Six Months Ended June 30 | $5,374 | $5,503 | $(129) | -2.3% | Total Property Lease Expense (Millions) | Period | 2025 | 2024 | Change ($M) | Change (%) | | :------------------------------- | :----- | :----- | :---------- | :--------- | | Three Months Ended June 30 | $326 | $326 | $0 | 0.0% | | Six Months Ended June 30 | $617 | $624 | $(7) | -1.1% | Property Lease Balance Sheet Information (Millions) | Metric | As of June 30, 2025 | As of December 31, 2024 | Change ($M) | Change (%) | | :-------------------------- | :------------------ | :---------------------- | :---------- | :--------- | | Operating lease ROU assets | $3,198 | $3,057 | $141 | 4.6% | | Operating lease liabilities | $3,251 | $3,112 | $139 | 4.5% | | Weighted average remaining lease term | 7.9 years | 8.0 years | -0.1 years | -1.25% | | Weighted average discount rate | 5.32% | 4.98% | 0.34% | 6.8% | [Note 3 Restructuring and Other Related Charges](index=18&type=section&id=Note%203%20Restructuring%20and%20Other%20Related%20Charges) This note details the company's restructuring activities, including the ongoing 'Global Rightsizing' plan initiated in 2024 and the completed 'Cost Optimization' plan from 2022. It also covers officer separation costs related to the CEO's transition - The company initiated a 'Global Rightsizing' plan in 2024 to scale operations, incurring **$73 million** in restructuring expense for the six months ended June 30, 2025, with an additional **$15 million** expected this year[47](index=47&type=chunk)[48](index=48&type=chunk) - In connection with the CEO's transition, the company recorded **$8 million** in officer separation costs for the three and six months ended June 30, 2025, with an additional **$7 million** expected this year[49](index=49&type=chunk) Restructuring-Related Liabilities (Millions) | Category | Balance as of Jan 1, 2025 | Restructuring Expense (Global Rightsizing) | Restructuring Payment/Utilization (Global Rightsizing) | Restructuring Payment/Utilization (Cost Optimization) | Balance as of June 30, 2025 | | :-------------------------- | :------------------------ | :--------------------------------------- | :--------------------------------------------------- | :--------------------------------------------------- | :-------------------------- | | Personnel Related | $10 | $42 | $(20) | $(1) | $31 | | Facility Related | $0 | $4 | $(1) | $0 | $3 | | Other | $7 | $27 | $(18) | $0 | $16 | | **Total** | **$17** | **$73** | **$(39)** | **$(1)** | **$50** | [Note 4 Earnings Per Share](index=19&type=section&id=Note%204%20Earnings%20Per%20Share) This note provides the computation of basic and diluted earnings (loss) per share (EPS) for the three and six months ended June 30, 2025 and 2024, highlighting the impact of net income/loss and weighted average shares outstanding Earnings (Loss) Per Share (Millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to Avis Budget Group, Inc. | $4 | $14 | $(501) | $(100) | | Basic weighted average shares outstanding | 35.2 | 35.6 | 35.2 | 35.6 | | Diluted weighted average shares outstanding | 35.4 | 35.7 | 35.2 | 35.6 | | Basic EPS | $0.10 | $0.41 | $(14.24) | $(2.80) | | Diluted EPS | $0.10 | $0.41 | $(14.24) | $(2.80) | - For the six months ended June 30, 2025 and 2024, diluted weighted average shares outstanding exclude non-vested stock due to their anti-dilutive effect resulting from a net loss[50](index=50&type=chunk) [Note 5 Other Current Assets](index=19&type=section&id=Note%205%20Other%20Current%20Assets) This note details the composition of other current assets, including sales and use taxes, prepaid expenses, and prepaid vehicle license and registration, as of June 30, 2025, and December 31, 2024 Other Current Assets (Millions) | Category | As of June 30, 2025 | As of December 31, 2024 | Change ($M) | Change (%) | | :-------------------------- | :------------------ | :---------------------- | :---------- | :--------- | | Sales and use taxes | $431 | $187 | $244 | 130.5% | | Prepaid expenses | $175 | $162 | $13 | 8.0% | | Prepaid vehicle license and registration | $135 | $77 | $58 | 75.3% | | Other | $203 | $236 | $(33) | -14.0% | | **Total Other current assets** | **$944** | **$662** | **$282** | **42.6%** | [Note 6 Intangible Assets](index=20&type=section&id=Note%206%20Intangible%20Assets) This note provides a breakdown of the company's intangible assets, distinguishing between amortized and unamortized assets, and details the amortization expense for the periods presented and future expected amortization Intangible Assets (Millions) | Category | As of June 30, 2025 (Net Carrying Amount) | As of December 31, 2024 (Net Carrying Amount) | Change ($M) | Change (%) | | :-------------------------- | :---------------------------------------- | :------------------------------------------ | :---------- | :--------- | | Amortized Intangible Assets | $86 | $90 | $(4) | -4.4% | | Goodwill | $1,133 | $1,071 | $62 | 5.8% | | Trademarks | $516 | $511 | $5 | 1.0% | | **Total Intangible Assets** | **$1,735** | **$1,672** | **$63** | **3.8%** | Amortization Expense (Millions) | Period | 2025 | 2024 | Change ($M) | Change (%) | | :------------------------------- | :----- | :----- | :---------- | :--------- | | Three Months Ended June 30 | $5 | $7 | $(2) | -28.6% | | Six Months Ended June 30 | $11 | $15 | $(4) | -26.7% | - Expected amortization expense for amortizable intangible assets is approximately **$11 million** for the remainder of 2025, **$22 million** for 2026, **$17 million** for 2027, **$10 million** for 2028, **$8 million** for 2029, and **$8 million** for 2030[54](index=54&type=chunk) [Note 7 Vehicle Rental Activities](index=20&type=section&id=Note%207%20Vehicle%20Rental%20Activities) This note provides details on the company's vehicle rental activities, including the components of vehicles, net, within assets under vehicle programs, and a summary of vehicle depreciation and lease charges, net Vehicles, Net (Millions) | Category | As of June 30, 2025 | As of December 31, 2024 | Change ($M) | Change (%) | | :-------------------------- | :------------------ | :---------------------- | :---------- | :--------- | | Rental vehicles (net of accumulated depreciation) | $20,117 | $16,951 | $3,166 | 18.7% | | Vehicles held for sale | $301 | $594 | $(293) | -49.3% | | Vehicles, net investment in lease | $92 | $74 | $18 | 24.3% | | **Total Vehicles, net** | **$20,510** | **$17,619** | **$2,891** | **16.4%** | Vehicle Depreciation and Lease Charges, Net (Millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Depreciation expense | $657 | $655 | $1,350 | $1,217 | | Lease charges | $33 | $39 | $61 | $74 | | (Gain) loss on sale of vehicles, net | $(54) | $39 | $280 | $78 | | **Total Vehicle depreciation and lease charges, net** | **$636** | **$733** | **$1,691** | **$1,369** | - For the six months ended June 30, 2025, vehicle depreciation and lease charges include **$390 million** in other fleet charges related to the accelerated disposal of certain fleet in the Americas segment[55](index=55&type=chunk) [Note 8 Income Taxes](index=21&type=section&id=Note%208%20Income%20Taxes) This note discusses the company's effective tax rates for the six months ended June 30, 2025 and 2024, and outlines the potential impact of the OECD's Pillar Two rule and the recently enacted One Big Beautiful Bill Act (OBBBA) in the United States - The effective tax rate for the six months ended June 30, 2025, was a benefit of **24.6%**, primarily due to foreign and state taxes, differing from the Federal Statutory rate of **21.0%**[57](index=57&type=chunk) - The effective tax rate for the six months ended June 30, 2024, was a benefit of **14.8%**, influenced by tax credits, foreign taxes, and state taxes[58](index=58&type=chunk) - The company does not expect the OECD's Pillar Two global minimum tax rate to have a material impact on its financial statements for 2025 and is evaluating the impact of the recently enacted OBBBA[59](index=59&type=chunk)[60](index=60&type=chunk) [Note 9 Accounts Payable and Other Current Liabilities](index=21&type=section&id=Note%209%20Accounts%20Payable%20and%20Other%20Current%20Liabilities) This note provides a detailed breakdown of the company's accounts payable and other current liabilities as of June 30, 2025, and December 31, 2024 Accounts Payable and Other Current Liabilities (Millions) | Category | As of June 30, 2025 | As of December 31, 2024 | Change ($M) | Change (%) | | :----------------------------------- | :------------------ | :---------------------- | :---------- | :--------- | | Short-term operating lease liabilities | $621 | $628 | $(7) | -1.1% | | Accounts payable | $597 | $450 | $147 | 32.7% | | Accrued sales and use taxes | $367 | $305 | $62 | 20.3% | | Accrued advertising and marketing | $291 | $258 | $33 | 12.8% | | Public liability and property damage insurance liabilities – current | $267 | $245 | $22 | 9.0% | | Deferred lease revenues - current | $306 | $149 | $157 | 105.4% | | Accrued payroll and related | $174 | $126 | $48 | 38.1% | | Accrued interest | $153 | $180 | $(27) | -15.0% | | Other | $392 | $359 | $33 | 9.2% | | **Total Accounts payable and other current liabilities** | **$3,168** | **$2,700** | **$468** | **17.3%** | [Note 10 Long-term Corporate Debt and Borrowing Arrangements](index=22&type=section&id=Note%2010%20Long-term%20Corporate%20Debt%20and%20Borrowing%20Arrangements) This note details the company's long-term corporate debt and borrowing arrangements, including senior notes, floating rate term loans, and committed credit facilities. It also highlights recent financing activities such as new debt issuances and repayments, and confirms compliance with debt covenants Long-term Corporate Debt (Millions) | Category | As of June 30, 2025 | As of December 31, 2024 | Change ($M) | Change (%) | | :----------------------------------- | :------------------ | :---------------------- | :---------- | :--------- | | Total long-term debt | $6,038 | $5,373 | $665 | 12.4% | Committed Corporate Credit Facilities (Millions) as of June 30, 2025 | Facility | Total Capacity | Outstanding Borrowings | Letters of Credit Issued | Available Capacity | | :----------------------------------- | :------------- | :--------------------- | :--------------------- | :--------------- | | Senior revolving credit facility maturing 2028 | $2,000 | $0 | $1,597 | $403 | - In May 2025, the company issued **$600 million** of 8.375% Senior Notes due June 2032, using proceeds to repay existing debt and for general corporate purposes[63](index=63&type=chunk) - In July 2025, the floating rate term loan was amended, extending its maturity from August 2027 to July 2032 and increasing the interest rate to SOFR plus **2.50%**[62](index=62&type=chunk) - As of June 30, 2025, the company was in compliance with all financial covenants governing its indebtedness[66](index=66&type=chunk) [Note 11 Debt Under Vehicle Programs and Borrowing Arrangements](index=23&type=section&id=Note%2011%20Debt%20Under%20Vehicle%20Programs%20and%20Borrowing%20Arrangements) This note details the company's debt under vehicle programs, including related party debt and other borrowings, and provides a summary of debt issued by Avis Budget Rental Car Funding. It also outlines debt maturities and available funding arrangements, confirming compliance with debt covenants Debt Under Vehicle Programs (Millions) | Category | As of June 30, 2025 | As of December 31, 2024 | Change ($M) | Change (%) | | :----------------------------------- | :------------------ | :---------------------- | :---------- | :--------- | | Americas - Debt due to Avis Budget Rental Car Funding | $15,585 | $14,143 | $1,442 | 10.2% | | Americas - Debt borrowings | $1,334 | $1,160 | $174 | 15.0% | | International - Debt borrowings | $2,905 | $2,159 | $746 | 34.6% | | International - Finance leases | $164 | $143 | $21 | 14.7% | | **Total Debt under vehicle programs** | **$19,914** | **$17,536** | **$2,378** | **13.6%** | Debt Issued by Avis Budget Rental Car Funding (Six Months Ended June 30, 2025) | Issuance Date | Maturity Date | Weighted Average Interest Rate | Amount Issued (Millions) | | :-------------------------- | :------------ | :----------------------------- | :----------------------- | | January 2025 | Aug 2027 | 7.31% | $41 | | January 2025 | Apr 2028 | 7.59% | $75 | | January 2025 | Jun 2028 | 7.31% | $75 | | January 2025 | Dec 2028 | 7.37% | $72 | | January 2025 | Feb 2029 | 7.52% | $95 | | May 2025 | Aug 2028 | 4.94% | $250 | | May 2025 | Aug 2030 | 5.26% | $400 | | **Total** | | **5.95%** | **$1,008** | Contractual Maturities of Debt under Vehicle Programs as of June 30, 2025 (Millions) | Period | Amount | | :-------------------------- | :----- | | Within 1 year | $3,866 | | Between 1 and 2 years | $8,867 | | Between 2 and 3 years | $2,959 | | Between 3 and 4 years | $2,976 | | Between 4 and 5 years | $1,024 | | Thereafter | $296 | | **Total** | **$19,988** | - As of June 30, 2025, the company had **$1,690 million** in available funding capacity under its vehicle program debt arrangements[69](index=69&type=chunk) [Note 12 Commitments and Contingencies](index=25&type=section&id=Note%2012%20Commitments%20and%20Contingencies) This note outlines the company's various commitments and contingencies, including legal proceedings, indemnification agreements related to former subsidiaries, and commitments to purchase vehicles. It also addresses potential exposures from litigation and concentrations of credit risk - The company is involved in several legal proceedings, including class action lawsuits related to traffic infractions and administrative fees, and shareholder securities class actions concerning fleet strategy[75](index=75&type=chunk)[76](index=76&type=chunk) - The company estimates a potential exposure of up to approximately **$40 million** in excess of accrued amounts from adverse outcomes of current legal proceedings, which is not expected to materially impact its financial condition or results of operations[78](index=78&type=chunk) - Commitments to purchase vehicles decreased by **$4.0 billion** from December 31, 2024, to approximately **$2.3 billion** for the next 12 months, financed primarily through vehicle-backed debt and vehicle dispositions[79](index=79&type=chunk) [Note 13 Stockholders' Equity](index=27&type=section&id=Note%2013%20Stockholders%27%20Equity) This note details changes in stockholders' equity, including information on the stock repurchase program, total comprehensive income (loss), and the components of accumulated other comprehensive income (loss) - The Board of Directors authorized a stock repurchase program of up to **$8.1 billion**, with approximately **$757 million** remaining available as of June 30, 2025. No shares were repurchased under this program during the six months ended June 30, 2025 or 2024[81](index=81&type=chunk) Total Comprehensive Income (Loss) Attributable to Avis Budget Group, Inc. (Millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to Avis Budget Group, Inc. | $4 | $14 | $(501) | $(100) | | Other comprehensive income (loss), net of tax | $67 | $5 | $75 | $(39) | | **Total comprehensive income (loss) attributable to Avis Budget Group, Inc.** | **$71** | **$19** | **$(426)** | **$(139)** | Accumulated Other Comprehensive Income (Loss) (Millions) | Component | Balance as of Jan 1, 2025 | Net Current-Period Other Comprehensive Income (Loss) | Balance as of June 30, 2025 | | :-------------------------- | :------------------------ | :--------------------------------------------------- | :-------------------------- | | Currency Translation Adjustments | $(125) | $84 | $(41) | | Net Unrealized Gains (Losses) on Cash Flow Hedges | $31 | $(11) | $20 | | Minimum Pension Liability Adjustment | $(116) | $2 | $(114) | | **Total Accumulated Other Comprehensive Income (Loss)** | **$(210)** | **$75** | **$(135)** | [Note 14 Related Party Transactions](index=29&type=section&id=Note%2014%20Related%20Party%20Transactions) This note describes transactions with related parties, primarily Avis Mobility Ventures LLC (AMV), a former subsidiary in which the company holds an equity method investment. It details the services provided to AMV and the financial impact on the company's statements - Avis Budget Group, Inc. holds approximately **35%** ownership in Avis Mobility Ventures LLC (AMV) and accounts for it under the equity method, providing vehicles, fleet services, and administrative services to AMV[88](index=88&type=chunk) Other (Income) Expense, Net Related to AMV (Millions) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | (Income) expense for services to AMV, net | $4 | $0 | $8 | $(2) | | (Income) loss on equity method investment in AMV, net | $1 | $2 | $3 | $5 | | **Total Other (income) expense, net** | **$5** | **$2** | **$11** | **$3** | [Note 15 Stock-Based Compensation](index=29&type=section&id=Note%2015%20Stock-Based%20Compensation) This note provides information on stock-based compensation expense and activity related to time-based and performance-based restricted stock units (RSUs), including grants, vesting, and forfeiture Stock-Based Compensation Expense (Millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock-based compensation expense | $6 | $6 | $12 | $13 | | Net of tax | $5 | $5 | $9 | $10 | - As of June 30, 2025, aggregate unrecognized compensation expense related to time- and performance-based RSUs amounted to **$44 million**, to be recognized over a weighted average vesting period of **1.6 years**[94](index=94&type=chunk) [Note 16 Financial Instruments](index=30&type=section&id=Note%2016%20Financial%20Instruments) This note describes the company's use of derivative instruments and hedging activities to manage exposure to currency, interest rate, and commodity risks. It provides details on notional values, fair values, and the effects of these instruments on the financial statements - The company uses currency exchange contracts, interest rate swaps, and interest rate caps to manage currency, interest rate, and commodity risks[95](index=95&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) Absolute Notional Values of Derivative Instruments as of June 30, 2025 (Millions) | Instrument | Notional Value | | :-------------------------- | :------------- | | Foreign exchange contracts | $1,746 | | Interest rate caps | $9,828 | | Interest rate swaps | $750 | Effects of Financial Instruments Recognized in Condensed Consolidated Financial Statements (Millions) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Financial instruments designated as hedging instruments | $(92) | $5 | $(139) | $27 | | Financial instruments not designated as hedging instruments | $29 | $(6) | $26 | $(19) | | **Total** | **$(63)** | **$(1)** | **$(113)** | **$8** | [Note 17 Segment Information](index=32&type=section&id=Note%2017%20Segment%20Information) This note provides detailed financial information for the company's reportable segments (Americas and International), including revenues, significant segment expenses, and Adjusted EBITDA. It also includes a reconciliation of Adjusted EBITDA to income (loss) before income taxes and segment assets - The company's chief executive officer assesses performance and allocates resources based on revenues and Adjusted EBITDA for the Americas and International segments[104](index=104&type=chunk)[105](index=105&type=chunk) Reportable Segment Adjusted EBITDA (Millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Americas | $220 | $186 | $153 | $230 | | International | $82 | $48 | $79 | $33 | | Corporate and other | $(25) | $(20) | $(48) | $(37) | | **Total Company Adjusted EBITDA** | **$277** | **$214** | **$184** | **$226** | Reconciliation of Income (Loss) Before Income Taxes to Adjusted EBITDA (Millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income (loss) before income taxes | $15 | $27 | $(662) | $(115) | | Non-vehicle related depreciation and amortization | $60 | $58 | $116 | $119 | | Interest expense related to corporate debt, net | $114 | $89 | $210 | $172 | | Other fleet charges | $0 | $0 | $390 | $0 | | Restructuring and other related charges | $59 | $14 | $81 | $17 | | Transaction-related costs, net | $0 | $1 | $0 | $2 | | Other (income) expense, net | $5 | $2 | $11 | $3 | | Legal matters, net | $12 | $12 | $13 | $7 | | Cloud computing costs | $13 | $11 | $25 | $21 | | **Adjusted EBITDA** | **$277** | **$214** | **$184** | **$226** | Segment Assets (Millions) | Category | As of June 30, 2025 | As of December 31, 2024 | | :----------------------------------- | :------------------ | :---------------------- | | Assets exclusive of assets under vehicle programs | $10,157 | $9,668 | | Assets under vehicle programs | $22,214 | $19,373 | | Net long-lived assets | $2,446 | $2,369 | [Note 18 Subsequent Event](index=35&type=section&id=Note%2018%20Subsequent%20Event) This note discloses a subsequent event where the company amended its floating rate term loan in July 2025, extending its maturity and increasing the interest rate - In July 2025, the company amended its floating rate term loan, extending its maturity date from August 2027 to July 2032 and increasing the interest rate to SOFR plus **2.50%**[115](index=115&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, discussing key performance metrics, business trends, and the impact of macroeconomic factors. It offers a detailed analysis of revenues, expenses, and Adjusted EBITDA for both the Americas and International segments [OVERVIEW](index=36&type=section&id=OVERVIEW) The overview introduces Avis Budget Group as a leading global mobility solutions provider operating Avis, Budget, and Zipcar brands. It highlights the company's strategic focus on technology-driven transformation, recent fleet strategy changes, and the impact of macroeconomic factors on its operations - Avis Budget Group operates globally recognized brands (Avis, Budget, Zipcar) and is a leading vehicle rental operator with an average rental fleet of approximately **699,000 vehicles** in Q2 2025[119](index=119&type=chunk) - The company's strategy focuses on transforming its business through technology, system enhancements, and data to improve customer experience, revenue generation, and cost efficiency[121](index=121&type=chunk) - In Q4 2024, the company changed its fleet strategy for US and Canadian rental cars to accelerate fleet rotations and decrease fleet age for competitive reasons[121](index=121&type=chunk) Key Financial Highlights (Three Months Ended June 30, 2025) | Metric | Amount (Millions) | | :-------------------------- | :---------------- | | Revenues | $3,039 | | Net income | $5 | | Adjusted EBITDA | $277 | [RESULTS OF OPERATIONS](index=37&type=section&id=RESULTS%20OF%20OPERATIONS) This section details the company's financial performance for the three and six months ended June 30, 2025, compared to the prior year. It analyzes changes in revenues, expenses, net income/loss, and Adjusted EBITDA, providing segment-specific breakdowns for Americas and International operations - For the six months ended June 30, 2025, revenues decreased by **$130 million (2%)** year-over-year, primarily due to a **2%** decrease in revenue per day and a **1%** decrease in volume[127](index=127&type=chunk)[141](index=141&type=chunk) - Net loss attributable to Avis Budget Group, Inc. for the six months ended June 30, 2025, was **$501 million**, an additional loss of **$401 million** year-over-year, mainly due to other fleet charges from accelerated vehicle disposal in the Americas segment[127](index=127&type=chunk)[141](index=141&type=chunk) - Adjusted EBITDA for the six months ended June 30, 2025, decreased by **$42 million** year-over-year to **$184 million**[127](index=127&type=chunk)[143](index=143&type=chunk) Americas Segment Performance (Three Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Revenues | $2,332 | $2,361 | (1%) | | Adjusted EBITDA | $220 | $186 | 18% | International Segment Performance (Three Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Revenues | $707 | $687 | 3% | | Adjusted EBITDA | $82 | $48 | 71% | Americas Segment Performance (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Revenues | $4,239 | $4,354 | (3%) | | Adjusted EBITDA | $153 | $230 | (33%) | International Segment Performance (Six Months Ended June 30) | Metric | 2025 (Millions) | 2024 (Millions) | % Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Revenues | $1,230 | $1,245 | (1%) | | Adjusted EBITDA | $79 | $33 | 139% | [FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES](index=43&type=section&id=FINANCIAL%20CONDITION%2C%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section assesses the company's financial health, liquidity, and capital resources, distinguishing between vehicle programs and other activities. It covers changes in assets, liabilities, and stockholders' equity, as well as cash flow trends, debt levels, and liquidity risks - The increase in total liabilities exclusive of vehicle programs is primarily due to increased corporate indebtedness from the issuance of Senior Notes due June 2032[154](index=154&type=chunk) - Increases in both assets and liabilities under vehicle programs are primarily due to the rising cost of the rental fleet[155](index=155&type=chunk) - Cash used in investing activities increased significantly due to a higher investment in vehicles, while cash provided by financing activities increased due to higher borrowings under vehicle programs[164](index=164&type=chunk) Financial Condition Summary (Millions) | Metric | June 30, 2025 | December 31, 2024 | Change ($M) | Change (%) | | :----------------------------------- | :------------ | :---------------- | :---------- | :--------- | | Total assets exclusive of vehicle programs | $10,157 | $9,668 | $489 | 5.1% | | Total liabilities exclusive of vehicle programs | $12,393 | $11,047 | $1,346 | 12.2% | | Assets under vehicle programs | $22,214 | $19,373 | $2,841 | 14.7% | | Liabilities under vehicle programs | $22,711 | $20,311 | $2,400 | 11.8% | | Total stockholders' equity | $(2,733) | $(2,317) | $(416) | -17.9% | - As of June 30, 2025, the company had approximately **$26.0 billion** of indebtedness, comprising **$6.1 billion** in corporate indebtedness and **$19.9 billion** under vehicle programs[165](index=165&type=chunk) - Total liquidity as of June 30, 2025, was approximately **$944 million**, including **$541 million** in cash and cash equivalents and **$403 million** in available borrowing capacity under its revolving credit facility[168](index=168&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, including changes in currency exchange rates, interest rates, and fuel prices. It uses sensitivity analysis to assess the potential impact of hypothetical changes on earnings, fair values, and cash flows - The company is exposed to market risks from currency exchange rates, interest rates, and fuel prices[173](index=173&type=chunk) - A hypothetical **10%** change in interest or foreign currency exchange rates is not expected to have a material impact on the company's results of operations, balance sheet, or cash flows[173](index=173&type=chunk) - A **10%** change in unleaded fuel prices is also not expected to have a material impact on earnings for the period ended June 30, 2025[173](index=173&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, based on an evaluation by the CEO and CFO. It also states that there were no material changes in internal control over financial reporting during the second quarter of 2025 - The company's disclosure controls and procedures were effective as of June 30, 2025[174](index=174&type=chunk) - No material changes in internal control over financial reporting occurred during the second quarter of 2025[174](index=174&type=chunk) [PART II Other Information](index=45&type=section&id=PART%20II%20Other%20Information) [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 12 for information on legal proceedings and reiterates the company's disclosure threshold for environmental proceedings - Information regarding legal proceedings is detailed in Note 12 – Commitments and Contingencies[175](index=175&type=chunk) - The company uses a **$1 million** threshold for disclosing environmental proceedings that may result in monetary sanctions[176](index=176&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) This section states that there were no material developments to report regarding risk factors during the quarter ended June 30, 2025, and refers to the 2024 Form 10-K for additional information - No material developments regarding risk factors were reported during the quarter ended June 30, 2025[177](index=177&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides an update on the company's Stock Repurchase Program, noting that no common stock repurchases were made during the second quarter of 2025, and details the remaining authorization - The Board of Directors authorized a Stock Repurchase Program of up to approximately **$8.1 billion**[178](index=178&type=chunk) - No common stock repurchases were made under the program during the second quarter of 2025[178](index=178&type=chunk) - As of June 30, 2025, approximately **$757 million** of authorization remained available for common stock repurchases[178](index=178&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information) This section confirms that no director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - No director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the second quarter of 2025[179](index=179&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents, indentures, supplements, amendments, and certifications - The exhibit index includes corporate documents (e.g., Certificate of Incorporation, Bylaws), debt instruments (e.g., Indenture, Series Supplements), and certifications (e.g., CEO/CFO certifications)[186](index=186&type=chunk)[187](index=187&type=chunk)

Financial Performance - Q2 2025 - Revenues decreased slightly to $3,039 million, a marginal decrease from $3,048 million in 2Q 2024[8] - Rental days remained almost flat at 44,945 thousand, compared to 45,034 thousand in 2Q 2024[8] - Revenue per day excluding exchange rate effects decreased by 1% to $6706 from $6769 in 2Q 2024[8] - Adjusted EBITDA increased by 29% to $277 million from $214 million in 2Q 2024[8] Regional Performance - Americas revenues decreased by 1% to $2,332 million from $2,361 million in 2Q 2024, but improved sequentially throughout the quarter[9] - International revenues excluding exchange rate effects decreased by 1% to $682 million from $687 million in 2Q 2024, driven by Global Rightsizing initiatives[10] - International Adjusted EBITDA increased significantly by 71% to $82 million from $48 million in 2Q 2024, driven by segmentation strategy and lower fleet costs[10] Fleet and Utilization - Average rental fleet decreased by 1% to 698,633 vehicles from 705,145 in 2Q 2024[8] - Vehicle utilization improved to 707%, a 05 percentage point increase from 702% in 2Q 2024[8] - Per-unit fleet costs per month excluding exchange rate effects decreased by 13% to $300 from $346 in 2Q 2024[8] Liquidity and Outlook - Adjusted Free Cash Flow was $(475) million, reflecting a decision to invest approximately $500 million of corporate debt into vehicle programs, expected to reverse by year-end[11] - The company anticipates full year 2025 Adjusted EBITDA to be approximately $900 million - $1,000 million and per-unit fleet costs per month to be approximately $310-$320[16]

Core Insights - Avis Budget Group reported revenue of $3.04 billion for the quarter ended June 2025, a decrease of 0.3% year-over-year, and EPS of $0.10, down from $0.41 in the same quarter last year [1] - The reported revenue fell short of the Zacks Consensus Estimate of $3.07 billion, resulting in a surprise of -0.9%, while the EPS surprise was -95.05% against a consensus estimate of $2.02 [1] Financial Performance Metrics - Avis Budget's shares have returned +21.9% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The company currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3] Cost and Revenue Analysis - In the Americas, per-unit fleet costs were reported at $312 per month, lower than the estimated $362.8 [4] - Internationally, per-unit fleet costs were $278, compared to the estimated $296 [4] - Total rental days were reported at 44,945, slightly below the estimated 45,546.19 [4] - Geographic revenue for the Americas was $2.33 billion, down 1.2% year-over-year and below the estimated $2.37 billion [4] - International geographic revenue was $707 million, representing a year-over-year increase of +2.9% and slightly above the estimated $702.26 million [4]

Group 1: Earnings Performance - Avis Budget Group reported quarterly earnings of $0.1 per share, missing the Zacks Consensus Estimate of $2.02 per share, and down from $0.41 per share a year ago, representing an earnings surprise of -95.05% [1] - The company posted revenues of $3.04 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.9%, and compared to year-ago revenues of $3.05 billion [2] - Over the last four quarters, Avis Budget has surpassed consensus EPS estimates only once [2] Group 2: Stock Performance and Outlook - Avis Budget shares have increased approximately 155.6% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.6% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $10.12 on revenues of $3.51 billion, and $2.53 on revenues of $11.72 billion for the current fiscal year [7] Group 3: Industry Context - The Zacks Industry Rank indicates that the Transportation - Services sector is currently in the bottom 17% of over 250 Zacks industries, suggesting potential underperformance compared to higher-ranked industries [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5] - The estimate revisions trend for Avis Budget was unfavorable ahead of the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6]

```markdown [Q2 2025 Earnings Overview](index=1&type=section&id=Q2%202025%20Earnings%20Overview) A comprehensive overview of Avis Budget Group's Q2 2025 financial performance, strategic initiatives, and operational highlights [Consolidated Financial Highlights](index=1&type=section&id=Consolidated%20Financial%20Highlights) Avis Budget Group reported Q2 2025 revenues of **$3.0 billion**, with net income of **$5 million** and Adjusted EBITDA of **$277 million** Q2 2025 Consolidated Financial Results | Metric | Q2 2025 (Millions) | | :----------------- | :----------------- | | Revenues | $3,000 | | Net Income | $5 | | Adjusted EBITDA | $277 | [Strategic Announcements & Operational Highlights](index=1&type=section&id=Strategic%20Announcements%20%26%20Operational%20Highlights) The company launched Avis First, a premium car rental product, and announced a multi-year partnership with Waymo for autonomous ride-hailing operations in Dallas, providing end-to-end fleet management services. Operationally, Americas Adjusted EBITDA increased by **18%** and International Adjusted EBITDA by **71%** year-over-year, driven by lower fleet costs and improved utilization - Launch of Avis First, a premium product offering frictionless curbside pick-up and drop-off with dedicated concierge and premium vehicles[4](index=4&type=chunk) - Strategic partnership with Waymo to launch fully autonomous ride-hailing operations in Dallas, Texas, with Avis providing end-to-end fleet management services[4](index=4&type=chunk) Q2 2025 Segment Adjusted EBITDA (YoY Change) | Segment | Q2 2025 (Millions) | Q2 2024 (Millions) | % Change | | :---------- | :----------------- | :----------------- | :------- | | Americas | $220 | $186 | 18% | | International | $82 | $48 | 71% | [Company Information](index=2&type=section&id=Company%20Information) An overview of Avis Budget Group's global operations, brand portfolio, and market presence [About Avis Budget Group](index=2&type=section&id=ABOUT%20AVIS%20BUDGET%20GROUP) Avis Budget Group is a leading global provider of mobility solutions through its Avis, Budget, and Zipcar brands, operating approximately 10,250 rental locations in about 180 countries, with direct operations primarily in North America, Europe, and Australasia - Avis Budget Group is a global provider of mobility solutions with Avis, Budget, and Zipcar brands, operating approximately **10,250** rental locations in **180** countries[8](index=8&type=chunk) [Financial Performance Details](index=6&type=section&id=Financial%20Performance%20Details) Detailed financial statements, key operational metrics, and cash flow analysis for Q2 and year-to-date 2025 [Summary Data Sheet](index=6&type=section&id=SUMMARY%20DATA%20SHEET) The summary data sheet provides a snapshot of key financial figures for Q2 and YTD 2025 compared to 2024, including revenues, net income, Adjusted EBITDA, and balance sheet items like cash, vehicles, and debt Income Statement and Other Items (Q2 & YTD) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Revenues | $3,048 | $3,039 | — % | $5,469 | $5,599 | (2)% | | Income (loss) before income taxes | $27 | $15 | (44)% | $(662) | $(115) | n/m | | Net income (loss) attributable to Avis Budget Group, Inc. | $14 | $4 | (71)% | $(501) | $(100) | n/m | | Adjusted EBITDA | $214 | $277 | 29 % | $184 | $226 | (19)% | Balance Sheet Items (As of June 30, 2025 vs. December 31, 2024) | Metric | As of June 30, 2025 | As of December 31, 2024 | | :------------------------------------------ | :------------------ | :---------------------- | | Cash and cash equivalents | $541 | $534 | | Program cash and restricted cash | $62 | $63 | | Vehicles, net | $20,510 | $17,619 | | Debt under vehicle programs | $19,914 | $17,536 | | Corporate debt | $6,077 | $5,393 | | Stockholders' equity attributable to Avis Budget Group, Inc. | $(2,745) | $(2,327) | Segment Results (Q2 & YTD) | Segment | Three Months Ended June 30, 2025 Revenues | Three Months Ended June 30, 2024 Revenues | % Change | Six Months Ended June 30, 2025 Revenues | Six Months Ended June 30, 2024 Revenues | % Change | | :---------- | :---------------------------------------- | :---------------------------------------- | :------- | :-------------------------------------- | :-------------------------------------- | :------- | | Americas | $2,332 | $2,361 | (1)% | $4,239 | $4,354 | (3)% | | International | $707 | $687 | 3 % | $1,230 | $1,245 | (1)% | | Total Company | $3,039 | $3,048 | — % | $5,469 | $5,599 | (2)% | | | | | | | | | | Segment | Three Months Ended June 30, 2025 Adjusted EBITDA | Three Months Ended June 30, 2024 Adjusted EBITDA | % Change | Six Months Ended June 30, 2025 Adjusted EBITDA | Six Months Ended June 30, 2024 Adjusted EBITDA | % Change | | :---------- | :----------------------------------------------- | :----------------------------------------------- | :------- | :--------------------------------------------- | :--------------------------------------------- | :------- | | Americas | $220 | $186 | 18 % | $153 | $230 | (33)% | | International | $82 | $48 | 71 % | $79 | $33 | 139 % | | Corporate and other | $(25) | $(20) | (25)% | $(48) | $(37) | (30)% | | Total Company | $277 | $214 | 29 % | $184 | $226 | (19)% | [Condensed Consolidated Statements of Operations](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The condensed consolidated statements of operations detail revenues and various expense categories, leading to net income (loss) and earnings per share for both the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $3,039 | $3,048 | $5,469 | $5,599 | | Operating Expenses | $1,526 | $1,532 | $2,879 | $2,876 | | Vehicle depreciation and lease charges, net | $636 | $733 | $1,691 | $1,369 | | Selling, general and administrative | $396 | $348 | $704 | $673 | | Vehicle interest, net | $229 | $244 | $439 | $483 | | Non-vehicle related depreciation and amortization | $60 | $58 | $116 | $119 | | Interest expense related to corporate debt, net | $110 | $88 | $207 | $171 | | Early extinguishment of debt | $3 | $1 | $3 | $1 | | Restructuring and other related charges | $59 | $14 | $81 | $17 | | Transaction-related costs, net | — | $1 | — | $2 | | Other (income) expense, net | $5 | $2 | $11 | $3 | | Total expenses | $3,024 | $3,021 | $6,131 | $5,714 | | Income (loss) before income taxes | $15 | $27 | $(662) | $(115) | | Provision for (benefit from) income taxes | $10 | $12 | $(163) | $(17) | | Net income (loss) | $5 | $15 | $(499) | $(98) | | Less: Net income attributable to non-controlling interests | $1 | $1 | $2 | $2 | | Net income (loss) attributable to Avis Budget Group, Inc. | $4 | $14 | $(501) | $(100) | | Earnings (loss) per share - Basic | $0.10 | $0.41 | $(14.24) | $(2.80) | | Earnings (loss) per share - Diluted | $0.10 | $0.41 | $(14.24) | $(2.80) | | Weighted average shares outstanding - Basic | 35.2 | 35.6 | 35.2 | 35.6 | | Weighted average shares outstanding - Diluted | 35.4 | 35.7 | 35.2 | 35.6 | [Key Metrics Summary](index=8&type=section&id=KEY%20METRICS%20SUMMARY) This section summarizes key operational metrics for Americas, International, and Total segments, including rental days, revenue per day, vehicle utilization, and per-unit fleet costs, highlighting year-over-year changes for Q2 and YTD Americas Key Metrics (Q2 & YTD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :------------------------------------ | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Rental Days (000's) | 33,292 | 32,940 | 1 % | 62,739 | 62,632 | — % | | Revenue per Day | $70.03 | $71.67 | (2)% | $67.56 | $69.51 | (3)% | | Vehicle Utilization | 70.7 % | 70.2 % | 0.5 pps | 70.2 % | 67.9 % | 2.3 pps | | Per-Unit Fleet Costs per Month | $312 | $361 | (14)% | $343 | $344 | — % | International Key Metrics (Q2 & YTD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :------------------------------------ | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Rental Days (000's) | 11,653 | 12,094 | (4)% | 21,661 | 22,454 | (4)% | | Revenue per Day | $60.74 | $56.85 | 7 % | $56.81 | $55.47 | 2 % | | Vehicle Utilization | 70.6 % | 70.2 % | 0.4 pps | 69.9 % | 68.7 % | 1.2 pps | | Per-Unit Fleet Costs per Month | $278 | $305 | (9)% | $276 | $299 | (8)% | Total Company Key Metrics (Q2 & YTD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :------------------------------------ | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Rental Days (000's) | 44,945 | 45,034 | — % | 84,400 | 85,086 | (1)% | | Revenue per Day | $67.62 | $67.69 | — % | $64.80 | $65.81 | (2)% | | Vehicle Utilization | 70.7 % | 70.2 % | 0.5 pps | 70.1 % | 68.1 % | 2.0 pps | | Per-Unit Fleet Costs per Month | $303 | $346 | (12)% | $326 | $332 | (2)% | [Condensed Consolidated Schedule of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20SCHEDULE%20OF%20CASH%20FLOWS) The cash flow statement for the six months ended June 30, 2025, shows net cash provided by operating activities, net cash used in investing activities (including vehicle programs), and net cash provided by financing activities (including vehicle programs), resulting in a net change in cash and equivalents Condensed Consolidated Schedule of Cash Flows (Six Months Ended June 30, 2025) | Activity | Amount (Millions) | | :---------------------------------------------------------- | :---------------- | | Net cash provided by operating activities | $1,456 | | Net cash used in investing activities exclusive of vehicle programs | $(83) | | Net cash used in investing activities of vehicle programs | $(3,873) | | Net cash used in investing activities | $(3,956) | | Net cash provided by financing activities exclusive of vehicle programs | $475 | | Net cash provided by financing activities of vehicle programs | $1,996 | | Net cash provided by financing activities | $2,471 | | Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash | $35 | | Net change in cash and cash equivalents, program and restricted cash | $6 | | Cash and cash equivalents, program and restricted cash, beginning of period | $597 | | Cash and cash equivalents, program and restricted cash, end of period | $603 | Adjusted Free Cash Flow (Six Months Ended June 30, 2025) | Metric | Amount (Millions) | | :---------------------------------------------------------- | :---------------- | | Adjusted EBITDA | $184 | | Interest expense related to corporate debt, net (excluding early extinguishment of debt) | $(207) | | Working capital and other | $336 | | Capital expenditures | $(90) | | Tax payments, net of refunds | $(57) | | Vehicle programs and related | $(641) | | Adjusted Free Cash Flow | $(475) | [Non-GAAP Measures and Definitions](index=2&type=section&id=Non-GAAP%20Measures%20and%20Definitions) Explanation and reconciliation of non-GAAP financial measures, along with detailed calculations and definitions for key operational metrics [Introduction to Non-GAAP Financial Measures](index=2&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES%20AND%20KEY%20METRICS) This section introduces non-GAAP financial measures like Adjusted EBITDA and Adjusted Free Cash Flow, explaining their use for performance evaluation and comparison, and noting that reconciliations to GAAP measures are provided - The release includes non-GAAP financial measures such as **Adjusted EBITDA** and **Adjusted Free Cash Flow**, which are not considered GAAP measures[9](index=9&type=chunk) - These non-GAAP measures are used to evaluate operating business performance and compare results, with definitions and reconciliations provided in the tables and Appendix I[9](index=9&type=chunk) [Reconciliation of Non-GAAP Measures](index=10&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20MEASURES) Detailed reconciliations are provided for net income (loss) to Adjusted EBITDA and net cash provided by operating activities to Adjusted Free Cash Flow for the three and six months ended June 30, 2025 and 2024 Reconciliation of Net Income (Loss) to Adjusted EBITDA | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $5 | $15 | $(499) | $(98) | | Provision for (benefit from) income taxes | $10 | $12 | $(163) | $(17) | | Income (loss) before income taxes | $15 | $27 | $(662) | $(115) | | Non-vehicle related depreciation and amortization | $60 | $58 | $116 | $119 | | Interest expense related to corporate debt, net | $110 | $88 | $207 | $171 | | Early extinguishment of debt | $3 | $1 | $3 | $1 | | Other fleet charges | — | — | $390 | — | | Restructuring and other related charges | $59 | $14 | $81 | $17 | | Transaction-related costs, net | — | $1 | — | $2 | | Other (income) expense, net | $5 | $2 | $11 | $3 | | Legal matters, net | $12 | $12 | $13 | $7 | | Cloud computing costs | $13 | $11 | $25 | $21 | | Adjusted EBITDA | $277 | $214 | $184 | $226 | Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow (Six Months Ended June 30, 2025) | Metric | Amount (Millions) | | :---------------------------------------------------------- | :---------------- | | Net cash provided by operating activities | $1,456 | | Net cash used in investing activities of vehicle programs | $(3,873) | | Net cash provided by financing activities of vehicle programs | $1,996 | | Capital expenditures | $(85) | | Proceeds received on asset sales | $2 | | Change in program and restricted cash | $10 | | Other receipts (payments), net | $19 | | Adjusted Free Cash Flow | $(475) | [Key Metrics Calculations](index=11&type=section&id=KEY%20METRICS%20CALCULATIONS) This section provides the detailed calculations for key operational metrics such as Revenue per Day, Vehicle Utilization, and Per-Unit Fleet Costs for both Americas and International segments, for the three and six months ended June 30, 2025 and 2024 Revenue per Day (RPD) Calculation (Q2 & YTD) | Metric | Americas Q2 2025 | International Q2 2025 | Total Q2 2025 | Americas Q2 2024 | International Q2 2024 | Total Q2 2024 | | :------------------------------------ | :--------------- | :-------------------- | :------------ | :--------------- | :-------------------- | :------------ | | Revenue | $2,332 | $707 | $3,039 | $2,361 | $687 | $3,048 | | Rental days (000's) | 33,292 | 11,653 | 44,945 | 32,940 | 12,094 | 45,034 | | RPD excluding exchange rate effects ($) | $70.06 | $58.51 | $67.06 | $71.67 | $56.85 | $67.69 | | | | | | | | | | Metric | Americas YTD 2025 | International YTD 2025 | Total YTD 2025 | Americas YTD 2024 | International YTD 2024 | Total YTD 2024 | | :------------------------------------ | :---------------- | :--------------------- | :------------- | :---------------- | :--------------------- | :------------- | | Revenue | $4,239 | $1,230 | $5,469 | $4,354 | $1,245 | $5,599 | | Rental days (000's) | 62,739 | 21,661 | 84,400 | 62,632 | 22,454 | 85,086 | | RPD excluding exchange rate effects ($) | $67.65 | $56.49 | $64.78 | $69.51 | $55.47 | $65.81 | Vehicle Utilization Calculation (Q2 & YTD) | Metric | Americas Q2 2025 | International Q2 2025 | Total Q2 2025 | Americas Q2 2024 | International Q2 2024 | Total Q2 2024 | | :-------------------- | :--------------- | :-------------------- | :------------ | :--------------- | :-------------------- | :------------ | | Rental days (000's) | 33,292 | 11,653 | 44,945 | 32,940 | 12,094 | 45,034 | | Average rental fleet | 517,363 | 181,270 | 698,633 | 515,852 | 189,293 | 705,145 | | Number of days in period | 91 | 91 | 91 | 91 | 91 | 91 | | Available rental days (000's) | 47,080 | 16,496 | 63,576 | 46,943 | 17,226 | 64,169 | | Vehicle utilization | 70.7 % | 70.6 % | 70.7 % | 70.2 % | 70.2 % | 70.2 % | | | | | | | | | | Metric | Americas YTD 2025 | International YTD 2025 | Total YTD 2025 | Americas YTD 2024 | International YTD 2024 | Total YTD 2024 | | :-------------------- | :---------------- | :--------------------- | :------------- | :---------------- | :--------------------- | :------------- | | Rental days (000's) | 62,739 | 21,661 | 84,400 | 62,632 | 22,454 | 85,086 | | Average rental fleet | 493,744 | 171,260 | 665,004 | 506,583 | 179,682 | 686,265 | | Number of days in period | 181 | 181 | 181 | 182 | 182 | 182 | | Available rental days (000's) | 89,368 | 30,998 | 120,366 | 92,198 | 32,702 | 124,900 | | Vehicle utilization | 70.2 % | 69.9 % | 70.1 % | 67.9 % | 68.7 % | 68.1 % | Per-Unit Fleet Costs Calculation (Q2 & YTD) | Metric | Americas Q2 2025 | International Q2 2025 | Total Q2 2025 | Americas Q2 2024 | International Q2 2024 | Total Q2 2024 | | :------------------------------------------------ | :--------------- | :-------------------- | :------------ | :--------------- | :-------------------- | :------------ | | Vehicle depreciation and lease charges, net | $484 | $152 | $636 | $559 | $174 | $733 | | Average rental fleet | 517,363 | 181,270 | 698,633 | 515,852 | 189,293 | 705,145 | | Number of months in period | 3 | 3 | 3 | 3 | 3 | 3 | | Per-unit fleet costs per month excluding exchange rate effects ($) | $312 | $266 | $300 | $361 | $305 | $346 | | | | | | | | | | Metric | Americas YTD 2025 | International YTD 2025 | Total YTD 2025 | Americas YTD 2024 | International YTD 2024 | Total YTD 2024 | | :------------------------------------------------ | :---------------- | :--------------------- | :------------- | :---------------- | :--------------------- | :------------- | | Vehicle depreciation and lease charges, net | $1,017 | $284 | $1,301 | $1,046 | $323 | $1,369 | | Average rental fleet | 493,744 | 171,260 | 665,004 | 506,583 | 179,682 | 686,265 | | Number of months in period | 6 | 6 | 6 | 6 | 6 | 6 | | Per-unit fleet costs per month excluding exchange rate effects ($) | $344 | $274 | $326 | $344 | $299 | $332 | [Definitions of Non-GAAP Measures and Key Metrics](index=13&type=section&id=DEFINITIONS%20OF%20NON-GAAP%20MEASURES%20AND%20KEY%20METRICS) This appendix provides comprehensive definitions for all non-GAAP financial measures and key operational metrics used in the report, including Adjusted EBITDA, Adjusted Free Cash Flow, Rental Days, Revenue per Day, and Vehicle Utilization - **Adjusted EBITDA** is defined as income (loss) from continuing operations before non-vehicle related depreciation and amortization, various charges, non-vehicle related interest, and income taxes[36](index=36&type=chunk) - **Adjusted Free Cash Flow** represents net cash provided by operating activities adjusted for capital expenditures, vehicle program investing and financing activities, asset sales, and certain other charges[38](index=38&type=chunk) - Key metrics defined include **Rental Days**, **Revenue per Day**, **Vehicle Utilization**, **Available Rental Days**, **Average Rental Fleet**, **Per-Unit Fleet Costs**, and **Currency Exchange Rate Effects**[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) [Liquidity and Capital Structure](index=2&type=section&id=Liquidity%20and%20Capital%20Structure) An overview of the company's debt management strategies and current liquidity position [Debt Management and Liquidity Position](index=2&type=section&id=Debt%20Management%20and%20Liquidity%20Position) In May, the company issued **$600 million** in unsecured Senior Notes to repay existing debt. In July, a **$1.1 billion** floating rate term loan maturity was extended to July 2032. The quarter ended with nearly **$950 million** in liquidity and an additional **$1.7 billion** in fleet funding capacity - Issued **$600 million** of unsecured Senior Notes in May, using proceeds to repay outstanding borrowings under a secured floating rate term loan due 2025 and a portion of unsecured Senior Notes due 2027[11](index=11&type=chunk) - Amended **$1.1 billion** floating rate term loan in July, extending its maturity date from August 2027 to July 2032[11](index=11&type=chunk) - Liquidity position at the end of the quarter was nearly **$950 million**, with an additional **$1.7 billion** of fleet funding capacity[11](index=11&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) A disclaimer regarding forward-looking statements and a comprehensive list of potential risks affecting future financial results [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section serves as a disclaimer regarding forward-looking statements, indicating that actual results may differ materially due to various known and unknown risks, uncertainties, and assumptions - Statements in the press release are 'forward-looking statements' subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause actual results to differ materially[12](index=12&type=chunk) [Key Risk Factors](index=3&type=section&id=Key%20Risk%20Factors) The report outlines numerous factors that could affect future results, including high competition, changes in fleet costs, volatility in travel demand, economic conditions, geopolitical events, supply chain disruptions, and risks related to debt, litigation, cybersecurity, and regulatory compliance - Key risk factors include high competition in the mobility industry, changes in fleet costs (new vehicle costs, disposal prices), and the financial condition of vehicle manufacturers[12](index=12&type=chunk) - Other risks involve volatility in travel demand, deteriorating economic conditions, geopolitical events (terrorism, pandemics, conflicts), and changes in the cost or supply of fuel, labor, or other resources[12](index=12&type=chunk) - Risks also encompass indebtedness, ability to obtain financing, compliance with covenants, litigation, governmental inquiries, cybersecurity breaches, and changes in tax laws or accounting standards[14](index=14&type=chunk) [Investor Information](index=2&type=section&id=Investor%20Information) Information for investors, including access to supplemental financials, conference call details, and contact information [Supplemental Financials & Investor Conference Call](index=2&type=section&id=SUPPLEMENTAL%20FINANCIALS) Investors can access supplemental financials on the investor relations website and details for the Q2 results conference call are provided, including access methods and replay information - Second quarter supplemental financials are available on the investor relations website at ir.avisbudgetgroup.com[6](index=6&type=chunk) - A conference call to discuss Q2 results will be held on **July 30, 2025**, at **8:30 a.m. (ET)**, accessible via the investor relations website or by dialing (877) 407-2991[7](index=7&type=chunk) [Investor & Media Contacts](index=5&type=section&id=Investor%20%26%20Media%20Contacts) Contact information for investor relations and media relations teams is provided for inquiries - Investor Relations Contact: David Calabria, IR@avisbudget.com. Media Relations Contact: Media Relations Team, ABGPress@coynepr.com[16](index=16&type=chunk) ```