CAR - Earnings call transcript Q4 2018 | Avis Budget Group, Inc.

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Operator

Good morning and welcome to the Avis Budget Group Fourth Quarter Earnings Conference Call. Today’s conference call is being recorded. At this time, for opening remarks and introductions, I would like to turn the meeting to Mr. Neal Goldner, Vice President of Investor Relations. Go ahead, sir.

Neal Goldner

Joanna. you, Thank and everyone for us. joining Good thank morning, you

are Shon, Smith, our On Interim the Executive De me with Martyn call Chief Larry Officer Financial Officer. Chief our and

I information that as risks, forward-looking risks, that begin, Before actual to filings well remind could in the company’s assumptions release information. with and site the assumptions, involves periodic the like materially results statements. be undertakes forward-looking will Such SEC revise to uncertainties everyone the differ other website. we identified factors forward-looking discussing of as the and earnings Relations would that update company cause and Investor uncertainties Company to other its such company’s from no or obligation

call results. is All With the financial to that Our comments We available in reconciled Shon. measures now our today believe presentation, Larry better financial the measures. is using will release performance these non-GAAP non-GAAP De financial call the Chief numbers turn in from I press that, are Budget Executive adjusted our GAAP over to focus Officer, earnings demonstrated our and Group’s which Avis website. would our on like on

Larry De Shon

morning. company a EBITDA year XXXX and year for and successful expanding our X% by Neal you, revenue growth Thank reporting good consecutive ninth adjusted our was of increasing margins.

by which across growing Our in revenue highlighting results this new were revenue higher United and rolling profitable we margin XX% year EBITDA benefits XXX particularly finished out Americas expanding points. management the adjusted the our underlying strong achieved QX. driving States in growth, with of basis We system, the this pricing, including

performance pricing a best fleet year quarter, our a higher Americas pursued the since our X% results year. for over strong day, a quarter by and pricing segment Our cost increase delivering on revenue note We profit year-over-year per in fourth utilization ended record X.X% in benefited reduction volume in yielding as the higher from per-unit the XXXX. very also

the to new making make the we enhancing that for modify, view available products in The without tracking lock solved ancillary app app want before airport renting to guidance earnings make, by Our us convenient, and selection and and as to will Martyn customers mobile number share device. but highlighting even on on pricing for vehicles and our Avis rate. plan lights personalized, right our exchange and utilization our customers per or XXXX ourselves some doing wanted easier. including vehicle, before flash award including few increase a reviewing review by we profitable and real-time I per-unit problems this lower with drop-off costs winning to provide a experience of volume spend buses, improve available and the can our achievements our a substantially more performance pursuing pricing rental we I overall and and mobile any made of opportunities fleet ago, choose renting their improve use year. doors, getting XXXX, XX% and of major our and app exact the shuttle unlock a locate cancel the let to a years purchase cars to upgrades reservation, offer assistance over everyday their enabled making enter Today, seamless. our embarked service, we the continue the return for strategy the XXXX, car growth, journey strong the adjusted on upgrade, so, curbside we to a Starting of revenue minutes quarter overall to it car grow car to they more to lot, transparent,

years app overwhelming improvements in ago since X told substantial their We transactions majority into users surpassed us translating scores indicating they our a of the our promoter exceeding customers’ we with very few on expectations. and experience, are launched the satisfied just net have million for are we that have users, it app

should experience this customers’ we with In they expect the further to continue July, app car improving enhance to an rental Avis, us gift reward an their to an Budget. You price. Amazon Budget well. to card a which year rent of our customers as when money signed through book valued receive or save on we at who Amazon and later Customers extended rental Avis XX% vehicles the agreement

Amazon optimizing made well, this we momentum we and global forward keep steps with to with progressing relationship is network. Our towards our further them Also, going. look to working

sub-licensees we First, during of XXXX. North America and Germany successfully in acquired a number

us We also its commercial vehicle XXXX, brands. in Italy, substantial to and business grow rental Avis rental Turiscar, areas vehicles short Maggiore of in in France of the a Morini acquired Turiscar in follow in of enabling our of last and Morini, footprint Portugal. in car well-established The our vehicle commercial European existing Van amount time Cars leveraging year and UK Budget light XXXX, commercial and light and a of additions XXXX, acquisitions specializing company a in in with the ACL strength Hire

we growing exited Secondly, Taiwan, XXXX have Avis customers feel lastly, we license new enabling we markets. where aren’t serve through making brands acceptable these markets us And have in we Japan our and into our return. to both expanded Budget to an premium reintroduced in agreements brand

disposed and process now For of last year example, both business we Brazil. and China Australia in the we in the non-core are franchising fully small

should continue to you footprint. us to forward, expect opportunities optimize further for look to global Looking our

includes reached dynamic real-time a in also cars will level their a notification. and management, drive fleet We also margins us digitizing with fleet more mobile more and fleet by I.D. time entire our maintenance will level, only our signed the fully better our sophisticated allow automated they global connected customer condition and an by already data, XXXX, efficient us on manage ambitious critical XXX,XXX connecting inventory more our starting XXXX. not Peugeot, Toyota, count, enable workforce, tracking of vehicles including efficiencies substantial vehicles idle resulting connected XXXX. This take and cars a the streamline allow planning. entire fuel collect customers mileage, Systems mileage we in Connected Ford, basis better real to having agreements Connected year app, maintained us operating Continental operations reduce and and to Having on had last even costs. of experience. to a the We enable improve connected vehicle vehicles, to of have with closer of experience through goal to and to vehicle employing business embarked rental a process fleet

products scalable last platform connected capabilities services connected leverages us announced vehicle analytics the data data both our that new data Down also Amazon’s to year access our introduce advanced enabling platform. We to connected car inform connected web our organizations management services private travelers and solution, now and that leverage road, with for cloud public analytic to based car planning. smart and able for be partner will and us city

as collaborate to already the partnered forward with Kansas with with move other city City soon Avis are access globe very their positioned around to own And initiatives. have helpful data well to information. we customers We and smart easy we they other municipalities believe the through providing able and will app parking be stream

and investments lower our the In past few us over years also position to meaningful addition, costs the we have for future. made

we and core rent our mobile modernized reserve that now including have a first and car, we and our example, working the are app can industry revenue For digital our modernizing system, efficiency. accounting rental apps systems website system, drive the and on our reservation management to in actually through

capability reports API our up their running of building which travel partnership connected, their to focused and We fleet. and visualizations, And quickly connected first in demand. the for new that to developed managers to API. our we – online got fast, launched to personal already across dashboard, market moved are first complete on with detailed we have are a also we platform And with year while future. performance. third-parties, the profitability data summary of with provide integrated next our mileage partners corporate and and this our the is are rich how the the have We into with world on our integrate mobility and current portal rental new all Lyft so launched completely improving generation be We the envision innovation enhance investing will operationalize insights car our management with we program’s customer

cities. to goal and to believe technology clock. self-driving fleet how provide provider cases riders consumers, as global and build business competencies leading fleet to fully Our on other and and long-term the with be on today. of we our Arizona. solutions and businesses ready to good companies services platforms is far driving partnership service capabilities can for and to can will are for few available of than scale. new Waymo are on we use extend to extremely the be models Thus accelerate will there their vehicles the ours allows to leverage capabilities is as innovation our our therefore building for offer these assets great that they more a the mobility advantage example allows capabilities offered drive sustainable of the ensuring example management program our also Phoenix, fleets experience believe when self operate such services leverage and This in intelligence the and become hands-on properties, company. of offering We data, the as in as future our around owners. global support core XX on position us our leverage models. we positioned we the mobility mobility cars road are is of cars agreement global fleet us very service our a physical experience more this new vehicles for mid-XXXX its capabilities and uniquely This of growth management their than that workforce maintenance knowledge to Yes, partnership we fleet a to in to are marketplace we for mobility fleet more leverage signed years and of valuable car and any in and take Waymo companies XXX,XXX With on The

pooling We they ViaVan, in of on-demand the a to fleet partnership to provide also expand into entered services management leading a van as services UK. provider

with of Lyft can of add example year is Another models how to last to we evolved Drive Express thousands program. agreement signed as the vehicles the thrive Lyft different multi-year we mobility

to And to additional enabling Fort have Brightline available their stations Avis this signed America and We train and in look and Chicago Miami, in to West launched and North Beach. Palm across vehicles with year. an agreement We at expanding already Lauderdale Zipcar in Atlanta them cities available forward make the our customers into a Budget entered stage and rental investment we with from for the made smart marketplace an products their Fetch, rent right partnership through their process company make on-demand control device. truck rental to early mobile entire self-service to

our companies a you service. expect Looking on-demand, with consumers completely evolve the other as by to and forward, presented to us as innovative business integrated, a future opportunities delivered meet businesses where to mobility should connected, and partner both shared is we

delivered Americas pricing strong improvement delivered segment point is Americas on management technology receive system growth to So, I and that the continues are all and the hope our evidenced it to decisions, the many our customers, our our XXXX. by apparent we Avis driving XXX accolades informing app basis contributing from quality revenue focused success with in of our of that very margin new

grown sizable commercial business. addition, we have In European a local vehicle

as investments Fetch fleet And position offer making improve in lower increasing experience cost. we secure the innovating mobility the market. new mobility also in we to customers connected such to of our solutions our are and leadership global cars and We our are

North the His retail stepping needed CFO. Lithia mobility on as John alternative we of automotive John earlier the revenue hired recently to this extensive in March him strong we as effective most XX. background in strategies week having to his XX channels personally would our when for our our announced our Motors, the years the all serve background growing for we execute improving to auto At industry years Lastly, the will time, spent fleet have well CFO dispositions. long offerings, be us has at for our I we Martyn and our thank expanding company. same service profitability of and company’s like

XXXX endeavors. his miss the results I With over call great will success and all our our in guidance. him that, to of discuss fourth to Martyn like to future him We turn quarter and would wish

Martyn Smith

Thanks, the Larry comments. appreciate and I

great flow, I Budget quarter done per future you has best. numbers have results ahead along our discuss since enjoyed focus believe comments We I reconciled and today Avis X.X excluding at GAAP fourth all And With I company now and I to cost exchange a time call cash the am great working the fleet full our outlook our team day refer and that, years again. which I going more joined presentation. things the effects. i.e., adjusted changes our wish both earnings have My will ago. of and with earnings than and rate also you in and my with changes very pricing all for really year to discussing XXXX. in from release liquidity our per-unit constant results on in revenue are I will currency, it

X% a of pricing company, X% the currency Firstly, with of the XX%. earnings and starting for adjusted million constant in per overview $X growth, companywide fleet quarter, enabled share an exchange, up per-unit after us foreign from being a overall EBITDA total adjusted combination X% increasing our lower grow with by quarter by to Americas impact strong fourth adverse X% volume cost in

share For adjusted margin revenue EBITDA cost billion with primarily X% per through American higher income, for X% increase to was year. million a XX and Overall enabling fleet rate share adjusted XX% by interest foreign average benefit to the movement, to $XX year, reduced a us $XX expanding up $X.X was in per-unit earnings X% tax XX% expense of deliver from offset adjusted a by largely the companywide interest volume by we account. due million points what an and effective exchange basis higher lower increase X% a driven North fleet reducing pre-tax in was by rate growth increased overall achieved

States. to revenue volume to now over our the including as X% was as chose rentals for consciously increased value was our the the from the of driving whole the as of pricing beginning new day revenue up fourth in benefiting Americas, revenue the in well United review per by increase benefit quarter live pricing Moving results higher management segmental underlying fourth quarter quarter, across over a tool and growth driven with improvement. which pursue we higher X% X.X% the solid year revenue from is now year Full volume prior a

on In levels have pricing to for a fact we now ability per consecutive industry fleet higher are basis year-over-year drive normalized. when increased our illustrating underlying rates quarters six day

day well evidenced including particularly leisure holiday underlying leisure new segment the Our increases agreements X% We this since X% delivering in which launched. increases good delivering with achieved quarter business marketing Commercial with small very higher contracted and strong consecutive higher was both in particularly quarter, yielding volume our is segments, volume quarter approach of pricing. growth delivered our periods. over was positive the year-over-year in X% going the we our in underlying up rate per growth channels association Amazon second seen also while commercial the

strategy our drive transactions. part We rental profitable as also of increased to more

another stronger per to unit quarter and market costs, fleet. of result segment, delivered both We the Moving used in Americas substantially ability our with car of it. fleet to the capitalize quarter on the costs for starting lower

improve to technology strength sophistication both analytics on how marketplace in by more cars. last fourth we continued buy our Leveraging we data and quarter. selling advantage We the the cars of sell year’s to compared this took around the

channel also We alternative record performance. delivered another

lower X% ago. quarter costs actions in As of our the strong unit compared were fourth fleet per year a a market result to

U.S. XX% or by as expense Our well the utilization both million sell interest and than segment per interest lower though versus of costs was Americas our growing EBITDA decision planned. fleet recalls facility. conduit Vehicle our quarter rising quarter the deliver record fourth Summarizing, quarter last to impact as largely originally enabled our pricing $X and cars rates effects XX%. variable in more impacted in the manufacturer record the margin year unit strong rates with due to on to increased of improving vehicle adjusted

in unit X% adjusted by leading fleet full pricing interest of a increase XX% lower delivered XXX vehicle margin. and expense EBITDA offset growth a good and per in points $XX to basis the For year volume underlying growth, improvement high million costs partially we

International from conditions and the year. from Italy, typically acquisitions last the including Portugal the difficult rental where the strong last quarter fourth with in we grew tuck-in of Spain Now benefits to when days coming reported. We we market segment continued closed growth

While in pricing is we volume seen have Europe competitive environment day good the with revenue per persisted XX%. down

quarter utilization offset the high Our controls by basis day. this control. unit focused XX% fleet we unchanged also lower in the our we quarter cost per was faced being drove strong were with for costs we in utilization. pressure and growth, International In volume To quarter the summary, business XX improvement on rate in and points tight adjusted good the cost lower a offset EBITDA pricing

For $XX per International lower rate the being volume year adjusted X% offset million stable currency X% to day, by but and EBITDA the growth by reduced year-over-year.

continued year $XXX non-fleet flow our free and with expectation from CapEx, timing to our flow $XX in reversed our Moving which benefiting the position, from emphasis including already to accounting XXXX. invested up management system. being platform our million cash focus investments in cash of than capital million of early free Across now next generation relating adjusted system, $XXX before year million on was programs million $XXX of million of CapEx. in connected year funding year and an higher the the cars, last vehicle $XXX our around This cash has we net to new non-fleet revenue we allocation flow

back cost outstanding of quarter bought Morini fourth Greece. the including million at purchases as interest acquisitions in $XXX million. X% of shares a investments in XX% $XX the of our Turiscar well in tuck-in invested in also the as We on licensee We and our the and year

million the average ended shares and down cost repurchased a of with X%. million nearly the full $XXX year count X.X year For diluted share at we have weighted

Regarding below our fleet business. lower oversubscribed rate issued just debt, earlier than X-year $XXX illustrating investors at ABS of expectations. have million X.X%, our was last offering in six their we Xx months of the notes confidence This

ending This remains our billion of capacity plus $X.X our with position million of liquidity. under vehicle strong $X.X $XXX of comprised the credit approximately availability facility, revolving million unused programs. financial available in $XXX Our having with of billion cash, quarter

Xx. range of net our than X.Xx turn and three-tenths leverage the at Xx of corporate to of of end targeted last is lower Our year a within is

is We at have our swapped no or fixed. corporate debt corporate debt of rate is fixed to maturities and either XX% XXXX approximately until

So, rates our corporate exposure debt to rising our is interest limited. on

XXXX our be outlook, to and $X.X $X.X billion Now our we between revenue to expect overall this billion year.

expect We Revenue volume to grow between annualization point XXXX. Americas benefits to the including in volume Americas X% X.X up X.X%. per international X% unchanged is up between expected be between acquisitions and and X%, closed day to be in and the and of percentage

lower be revenue in We international of partly X% and the to increases constant expect acquisitions and of annualization per between X% by rental. day further due currency length to in

our expect of range between to to X% and be higher expected in X% be to the per-unit per-unit We X% and unchanged Americas in costs are fleet currency. in constant international fleet the costs up

We expect to North million rates. interest benchmark $XX due to by year this vehicle increase interest $XX higher million expense American to

to million a net due the We be to headwind currency to U.S. year of of dollar. expect the $XX $XX the strength translation this million

EBITDA the between the of pronounced $XXX We expect impact to we can million XXXX. our $XXX be to As in most the in be today’s first and the million presentation, year. see in half expect adjusted you therefore

regions. first results. late revenue of federal which only pricing disrupted shifting government for QX and reminder, quarter well as also Just but this quarter effect our impact into not customers the have two as Easter which employees, utilization earnings year, our well will The government will and the quarter a of our shutdown portion as as contract is both impacting a first

interest $XXX year-over-year. As expected to amortization, and a excluding million. Non-vehicle lead million non-vehicle down acquisition-related likely result, is these to $XXX first expense our will be around to is be EBITDA quarter being expected around D&A,

adjusted pre-tax is XXXX. in be million result, a million As $XXX between to income $XXX expected and

adjusted to be $X.XX in XX% between share. rate We range be effective expect of diluted to per the earnings XX% share and tax per $X.XX and our to

effect additional expect I Finally, on earlier, million XXXX after between May total averaging combined timing be a for reflect accounting billion. The the to because cash XXXX, effect bring operating in locations XXXX to the standard we leases. cash to our planning which of we with incremental million our per million point, free January would flow beginning quarter results, around only $X free rented mentioned and $XXX $XX our $XXX $XXX X, value be generation were on property long-term and adopted year. approximately million and the to we balance our in new sheet first One report leases to

expanded better earnings in by this XXX the increased fleet Americas flow. Americas or lower of through by margins the by We from expect quarter adjusted in fourth cost. XX% pricing volume cash quarter free overall and We we no per-unit the material effect combination the X.X%. in the our basis EBITDA to pricing, grew in In X% grew points EBITDA a and summary,

For number overall by year, Greece. by acquisitions fleet basis financially XX% were as the our in EBITDA lower, points. increasing margin increased well in of XX tuck-in We expanded acquiring of attractive future CapEx X%, X% grew by revenue our invested licensee the as adjusted our costs and X% per-unit

corporate questions. strong have and Finally, I funding so, would answer With our happy we XXXX. debt be maturities remains that until and position your Larry no to

Operator

from Thank Instructions] from Healy John Northcoast Our [Operator comes question Research. first you.

may You your ask question.

John Healy

that’s aggressive wanted guys we I to job the about you. get the and investing allocation. the wanted about big I to potential, a you think to of a nice balancing, is picture you expect few a going count forward, continue I kind capital share to should and still view your thoughts may there to about consumer making even investments the in the context, and it or you’re – type side the of and looking more things, a with you defining sense about I it Fetch from excluding And mobility the lot I of business, lot businesses guys, returning shrink or be on rental if itself? you here, investment are allocation you everything on Thank going business at auctions, capital on define capital of going percentage know future. there thinking like But have as Larry, that remarketing, was thinking are of make guys to of outside curious some changes just a in of those if the ask with or businesses. there of shareholders larger on to a mobility done know

Larry De Shon

I opportunities and Yes, for think every makes our for single point of to how definition John, keeping this at broad we’re fairly we day. with mobility time us align and of do sense both do open well that what looking know that

So, from I perspective, literally allocation in don’t limiting think ourselves we’re way. any a capital

time At the we on allocation how for always should our the options keeping open. to we’re of approach this year, capital We’re planning year.

it and we as little in our As the quarter year. how second really the in – this to in very see more the all back really the acquisition buy pipeline quarter. back first you of year. really know, matures We first go buy the We have don’t we to in much throughout stock tend half

we mobility opportunities make to sure are but there, out understand We that. we are in yes, And types we we that think we of at Fetch. investments like looking have other want some made that that

in cash long-term. we investments short-term, look how evolve makes open. we for for And mobility well at as up us us that think investors to free an the our always success setting want over of flow keep sense I options returning as to eye to course, profitability improving our will make as as the on What well. the are do do we the the right So, all is –

act what will open going and and between we’re us wide. drive fairly leaving So, it’s balancing our forward, opportunities the all for a opportunities fairly options are really EBITDA meaningful where but

John Healy

Thank Great. guys. you,

Operator

comes David question from next Goldman Sachs. Tamberrino Our from

may your You question. ask

David Tamberrino

Great. Larry. and one, bit Car a for one have term near Good you, piece. next I on little the morning, the Connected questions two

from seeing the in shutdown that prepared in You government weakness you’re January. mentioned remarks the some

gauge going quarter trying seasonally January. an cars how it with the Just bit generally saying year-over-year a shift and be having about rental XX% sounds trade did impact first publications business. rental little on softer, know, that’s it’s see to I dropped one much more that your on Easter in like really of is of maybe the softer bookings but I to

So, should you be much that’s larger I to – what see a we for or thinking actually business your if that’s want than saw? if about little how

Larry De Shon

Yes, to the good very we morning, say trended in segment back that year we and business, Yes, the see it how a David. you large change see would we drop. the not report trend did is, of in at January it look I on kind then if government where that government What all was drop along, came did in in in February.

how government but change effects the to article. is year of January we’ve it’s right, that – nothing you’re there the growing segment in definitely long, were So, but in trending, been is how not was we’ve what a anyway, been month huge that a all

David Tamberrino

know. Okay, good to

of improving a as Car for operations, from still fuel result the recoup piece, utilization on Connected from accurately just it XXXX your guidance your current – XXXX connected you’re more able gauging to fleet XXXX increasing your your or expecting any, Second, in an plus benefits if those how to or being much, beyond? from of improving are is improvement

Larry De Shon

to it learning Yes, relates we’re a as Car. lot Connected actually

do out more in with our far opportunities we really are [ph] overdue. more penetration broaden and we allows get connectivity, particularly that perspective. our to benefits operations we where assets us the back get the yet, learning not And we faster, to collecting our from as the that even fleet, We of attention opportunities it more higher. it there scope want gas, Mobility want as the as that and do where locations. we see as we a exactly more our see so focus As it’s get City Lab, cars manage kind Kansas of in-fleeted and are those that’s

you there work then of maximize really can works the using that point that and of technology to that and sure lot goes into it. So, everything opportunity a the it making the operationalize is

technology, and that Cars, well, back go lot So, from to each lot more have back more that we back and to then and a we forth as go there’s back Connected refine delivering and is then we’re that getting and there’s we that with goes we it then in a there starts put OEM as learnings this of take on place, learnings learning well. process a our OEMs that and of

of time. evolution So, an over this to be is a long period going

we a As improves like in a things without we And out is, the the and what year improve our managing network connectivity. number we’re across building could this utilization, efficient of able way. use around collection, generate asset the platform, thing turn next-generation control, we’d then gas much in data more we’re what action do right be for as the operationalize and one for just data. It’s Without fleet of it because we without analytics than our which and doing other way into a able be miles, improve it our it, automated cars that, to lot of the to to thing there’s be the it’s it to on to data. able really another data example, do

the out that building really data the enables year us. actually do So dedicating this that a to what is of us take we’re advantage technology can for to

but benefits that advantage it we take which some say would would longer of more yes, short-term term, are I really more XXXX. in the there XXXX, I of, XXXX, really are So, in think will the benefits

David Tamberrino

helpful. That’s you, very Larry. Thank Understood.

Operator

from Woronka Deutsche Bank. comes next from Our question Chris

You may ask question. your

Chris Woronka

Did help guys XXXX? the a Had partnerships. that then the the fourth another do unfolding that corner Hey, short-term one you ancillary, how and the think then another quarter? of in good question morning, guys. But all, kind turned terms on see RPD you at that in of and quick do throughout

Larry De Shon

Yes, I’m with has hunted you with pretty our know, the what a long. fronts, of all They’ve pleased as from team number this done it’s just ancillary tackled year revenue. us

and around they’ve that I packages a different to several to new ship sense, not them turn sell them kinds might technology us offerings product the in to of turn automation, that now from We but some some bundles make different and only that allows it’s have of a of do, to have started online, initiatives don’t. to consumer big to of ship running tests put number say,

from. running we’ve keep So, We learn that different learned like to that. opportunities from

incentive pay, we’re the proving quite with incentive New Promoter that rental test successful. for running along sales our that markets agents is be Scores the to Net and programs tie-in

of opportunity we think collectively to I really all a in starting a So, number better together have initiatives XXXX. of for come us present pace hit to that and their are now, kind

these as we that through ship in and XXXX finally that start the is benefits continue say I’d play the of hoping we to turn the single So, out grow of kind see right go kind that starting opportunities. that of month to we’ll to direction we’re now every as

I place, now sit this program. think right the where in really with about right we’re we So, feel I good

Chris Woronka

interactions? the just guys with Great. initiatives nature of That’s municipalities helpful. big going then them on the such. opportunities those do from pull working business from a of the or those see outside And a you’re on how you you the push of that – is core some what’s forward? of some do Is from working – those of kind terms the of How how landscape in and and a pull or

Larry De Shon

number of discussions in a with been municipalities. We’ve

have We municipalities the Zipcar brand, through time. our good who work with really all relationships

remember conversation started. are the so So, hard it’s where with of idea we kind to them, of in constant kind

going know, for in they’re municipalities to are of for gridlock. more plan come way come and than opportunities some from or havoc think a some creates looking that it I but in at them cities mobility it lot us, big do really planful the a from most excitement as future how there’s and you

have were us their a looking they that at there city to. there’s we’ve to but is we wanted Kansas of them, initiatives, we play. out work do advanced, can most very Smart are but probably role only with a because not that have we City as obviously with the also number Lab discussions really in engaged cities that as So, Mobility talking we’re there been our there, City

push City find that So, cars information us with which city or around we’re about or testing things to restaurants the allows some are city. the renting that that things are to to there they just information consumers Kansas entertainment helpful in now, work like might

go be about to technology things we other how forward. this. going talk municipalities municipalities But of going offer enable further develop can we’re forward. the help is get kinds this XXXX this will course, this think to that we these and I more to forward calls we we can root going all of stems XXXX developing as the and Car, pipeline in And, us So, in XXXX, of about from Connected of number are see wanting a of where do in from this

Chris Woronka

Thanks, Great. Larry.

Operator

next Our comes Research from Millman Millman Michael question Associates. from

question. your ask may You

Michael Millman

Thank you.

and for outside at is matter more and whole? then become Have it’s have And from it securitization say say Just Is Cars. asset-backed to some you difficult for second, is me we of suppose I look regarding price? financing. and seen to that with as Connected way Thank utilization working, there to easy do just it’s to your simple-minded company a look up statistics that has broad at a or more following the another or unrelated us and the you.

Larry De Shon

take first question. then number question Connected Martyn second across I’ll different a metrics. to let is of So, play going the take and itself out Car the

the metric. utilization, will So, say play it’s we’ve impacted everything the around be can metrics you where okay, play collection, in out de-fleeting just it going It play gas and every out to out. that going out there’s to can in damage, and in point to from process one play our not touched it’s really connectivity. by to around salvage will in-fleeting – assets, car that’s And

services and it’s to find play way efficient going for on offer the useful as they to they’re to out relevant we and able across going connectivity being find out revenue and it’s helpful to for and play their also them that renting. why products side motivation a in and consumers products they the So, operations start and use to for services

the time of as will stages we as and really able it operation. in a of year it start through, everyone time, much kind those City the we each third-party see a big the in really other be ramp be building rolling work cadence the we still but out see over higher So, of as the number higher way that’s but into very that’s over connected we to to as all to up I with from Michael, different OEMs, think to them across we’ll and we’ll across we’re the learnings markets, and point Kansas very we start initiatives, take get the of percentage fleet suppliers. beginning in want when start it fleet, the get these work improvements And with it roll as different that we the

Martyn Smith

question. on asset-backed And your Michael, just

X market found say we credit. recently in about the very year, last quality of – we’re kind then So, me actually is for ago demand you’ve find we and QX in earlier just and of heard the really weeks strong

So, the to we’re to do the with of higher costs do kind booking curve, with the fed it’s is spread. credit not

of are kind by of high open read, as bond we’re you the markets in really I kind think of unimpacted we a it’s of story. finding mature continue not ABS yield And The well. credit for wide successfully of Notes say So, did ABS, one year kind strong but October what last but issue would demand, also quality. a I we kind to very credit

Michael Millman

Okay. Thank you.

Operator

comes [Operator Macquarie. Instructions] from Mazari question from next Hamzah Our

Your line is open.

question. ask may You your

Mario Cortellacci

guys, this that like is leisure sorry, sustainable on the But turnover? I’m is these commercial or least pricing as does that and big talk a moving side And – talk we the Mario commercial could realized for more little leisure. tied more small when little side, contracted direction of at book in business to large you how the the spud on same to filling actually you Hi in Cortellacci levels are? Hamzah. of about Could business

Larry De Shon

– as leisure industry. revenue in think to opportunities as aligned I really looks side, yield So is, on and far a it we’ve we’ve are done that the what rate when built finds system – management fleets the the

what we’ve quarter this why And kind and to very time. there out of we particularly, and system holiday a throughout period, in Christmas us now of And the number Columbus get the on Day, high a use to periods it, per rate leisure it that’s side, the kind over quarter of we’ve that drive the of Thanksgiving, were rate we markets the in so remaining allowed the that with opportunities country. built yielding past those the saw drove fourth quarter smarter is day we that in rolled how

be in the towards into of year we’ll kind on year. of we’ll So, EMEA Canada States next the and rolling out the United in entire now is system. full this and year this start And end

able quality of and you yielding better why yield in the and better to fleet advance it, that’s out – system the will, so and we use we find And those needs built get times, how those in we’ve it to find most to we our farther opportunities if we then be yielding opportunity. put to but yield into

rates. of and to look yield So, continue to opportunities the the our we’ll as industry, tied reasonable as in to fleet industry those for stay and long find stay kind

commercial quarter to kind book up to commercial a that, multi-year fourth underlying of has see the rate have been – in the really the that commercial as also on as tide turn far rate to business, As we and in of look up started in I was decline pleased which well. volume

forward. go wouldn’t very we’ve So, to we as sign month that it’ forward, that of think as through going every the that’s bit say I I a forth, going little we’re I still and of good but see we gotten back go perfectly worst single it forward. think kind

pressure, growth. large a business weighted renewed higher rates, you under renewed per accounts accounts we of still I XX% are renewing at say a If would look we large them day a over average take at is the positive that still of the lot rate but and the so of at quarter, the the big in not

but the and closer, totality, have still to it as still negative we we It closer that. are grow continues So, rates. business gets retail in to into linked tackle is small but

for across start rate usually are just And the got some at that’s the so keep across those really you then those point mid-market with years, the find grow and segments forward the day. all sign and commercial move X-year that a around so we’ve commercial contracts. these we got positive them with line in here we way. getting many to you’ve kind also large in pushing on opportunities can of improve very accounts, to decline been of per And happening and pursuing line they on these When accounts segments

Mario Cortellacci

it. Got

new Okay. And maybe or your of a we new could where on give given cars. potential pick see levels what pricing if up are incentives sense the on you car us inventory impact could used car thoughts on

of do kind those could assumptions? you where I’m be do how overall, where into potentially and going Just wrong you on could you about think they potentially. residuals sorry, think XXXX,

Larry De Shon

is We thought to our be used for pricing going year. put our where guidance car next we into

be to to within us segments ability able to the channels, cost – a our decline. for got move still as direct well. unit to we’ve going alternative fleet not So, right alternative matured in our year, the per in residual is going next Don’t our values forget, direction are of consumer. lot we’ve to going But fully need we and to direction drive but through in channels sell expecting to be things our we more

Within have our you channel to we’ll this really again to last we still direct go. selling at year past a we still to and as our lots our quarter, previous are the year improving to have consumer, well retail direct have get been fourth – long we moved the that, alternative year. to we’re XX% XX% lots opened year. a we if momentum look open to plan But ways dealer, from and still although penetration starting heavier have to lots new this we their So,

direct continue to also to driving want we us. which will consumer, benefit So,

area, data dispositions. second is our the are we that and acquisitions and to I analytics behind we’re our putting just the advantage play out have where science data and continuing an we our think the

buy where what colors we of levels buy, We’re just trim it in, in, what what about lot we we exit time buy where getting it a it, we us we past that’s we in-fleet the exit smarter more what the is also we helping done way in the ever than market. down science mileage derivative. exit we’ve to the analytics what And outperform and it year it, that it,

advantage take way. combination I us the of in a think all the those things right continue help of So, will market to

in a this saw did in we You previous fourth the same We cars than us sell thing the third the quarter past quarter the quarter. more fourth did lot quarter.

of sell the advantage when the in sense to and trying makes taking cars at markets it We’re right place the we’re right time.

really coming help think values some all and from might offset performance impacts our go can residual together, this I the forward see So, that we declining. of

Mario Cortellacci

Great. Thank much. you so

Operator

from comes question Derek Our Glynn final Consumer from Edge Research.

may You ask your question.

Derek Glynn

the willing and pricing for volume positive generate versus to you view those questions. And see morning between Good you and How thanks taking are pursuing trade-off to do balance how two? my do pricing growth? share you

Larry De Shon

looked to word we are share right It as that’s saw the industry, the the the drive last pricing we in year. in balance, we is our Balance and few what use. a when last fleets and can is we quarters and aligned maintain think that

be be those that’s to to opportunities find right. smarter system, the when we’ve continually FE to that’s and going – the built be goal, just opportunities find the the are going fleets built to to why get is yielding that’s why that’s those we’ve forecasted our So

revenue any it days people rentals, it’s more matters, big more those group way than without car And markets so in can ever it week we it. more the of find more and more makes a more management and the of classes and lengths do could of complicated and of difference,

for but they reconsider able a where something wax If out while. up. to a our to and that to we will we being bookings, in up confidence industry gives out completely tighten of we lot fleet forecast us hold markets to at happens because and industry closer able be would fleets further in lot believe now the position make the in to are that’s the able which a position, got price and for So, when have more the fleets being in more the to quite changes yield not look market that

we look see and of been aligned industry have fleets year all the last seeing that. as you We past in are to continuing

to revolving continue why and why that’s built of forward and of feel strategy system gone of going strategy of think to I we we that’s this we pursue all we going about the development have are price this. and through years So good the the several

Derek Glynn

a appreciate send that with is ride have and secondly just the Thank the the longer but to an customer length companies for you drivers to a And that offering opportunity hailing may given their within you. color. traditional want to I you rentals of relationship rental? given leisure platform, size directly who there app full for a not for your service their driver, integrate

Larry De Shon

for not for…? said the you sorry but driver, am I

Derek Glynn

to the rental, if integrating traditional Right. may app wondering have within the their want because network you tap a place, given a way already there longer platforms just customer who But for directly through and is a in the into length size theirs? leisure you your relationships for of

Larry De Shon

Yes. referring China, book they was Didi so could case right a to. solution rental We use that in for their on were actually then we that car of we for for a solution app are with are what did something customers are you where on the they looking app different their that a hailing is – where wasn’t kind

are and conversations opportunities. we those to absolutely open So those

them. to We car we relationship great continue have with companies work a hailing with and

in integrated having we is we driver are full as we integration rolling be live to we have our on we on as drivers we the after mentioned to APIs. the for out book We directly app their as going were that providing cities their have out drivers and Lyft of number a that for well it the as go and as drivers Atlanta roll vehicle forward Chicago already

are like do the we together. to talked other that have So opportunities into could absolutely types I we frequently companies said about And up we those of hailing opportunities. car

Derek Glynn

appreciate it. I Great. you. Thank

Operator

the For Shon. Mr. ahead Larry go Please closing sir. turned De call remarks to back is being

Larry De Shon

Thanks.

to and in and to expand good growth, pricing strong margins summarize enabled fleet costs us earnings a grow lower volume XXXX. the our So Americas in combination of unit per

on We discussed company, have some a today. lot which of only our exciting in things going of we

solutions our provider to against should leading Looking I continue goal to expect want balancing while mobility position to by that, in you your thank innovation, leveraging this improve future profitability. With you as our our for of global our the consistently invest to build forward us interest on also to company. in our

Operator

This concludes conference. today’s

time. You at may this disconnect

Avis Budget (CAR) 21 Feb 192018 Q4 Earnings call transcript