CAR - Earnings call transcript Q2 2019 | Avis Budget Group, Inc.

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Operator

Greetings, and welcome to the Avis Budget Group’s Second Quarter 2019 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder this conference is being recorded. It is now my pleasure to introduce your host, David Calabria. Please go ahead, sir.

David Calabria

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

are Shon, North, our the Chief call Executive De me with John On Chief Larry Officer; Officer. Financial our and

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

believe these performance better the also GAAP and Our our comments today new financial will non-GAAP numbers release website. presentation focus reconciled We our demonstrated in is that on from using in which investor results. our are measures, press the on our financial available adjusted

the that, Chief like With I’d De call to Officer, over Larry Executive Budget Shon. Group’s Avis to turn

Larry De Shon

in increase cost higher reduction in million improvement utilization. increase fleet record U.S. and in and point David, a we rental reported X% $X.X $X quarter a in revenue by had revenues per-unit a a an everyone. of and days, year-over-year. Along with fleet ancillary we X% pricing Yesterday, you, revenues, good billion, X% car increase morning, XX rental driven Thank basis second a in

Americas compared improving International basis of Promoter XXX last in year. all constant by for EBITDA achieved our adjusted a currency. improvement prior of in still in points the basis year this points Scores generated We improvement quarter million, Net while quarter the XXX of the XX% to and X% over $XXX or second We

with provide initiatives innovation to continued We of morning, will the results mobility I to innovation have and profitable incremental of update profit some outlook investing strategy while and then give and progress an our opportunities. mobility segments, International on overview in spur remainder the an and of unlock to and XXXX. the summer Americas initiatives grow in revenue, made our we This our discuss the for

and the the points $XX results adjusted last Americas more for and was a prior margin strong vehicle that than robust due proprietary values, system the cost use and in to delivered growing with of management purchase our and reduction fleet development channels the Continuing basis contributor the decisions. per-unit used outperformance million the biggest XX% fleet expanding EBITDA have our disposal we of several alternative to XXX year. effectiveness compared vehicle trend experienced quarters, to growing optimizes The disposition

technology We our mileage vehicle to experience. using initiative Car, vehicle more operationalize fleet Right reduce Right Customer are effectively and rental cost and to optimization manage our deploy beginning connectivity usage,

the management revenue last States, rental pricing. in our implementing grew which XX% all to locations finished with Website compared have reservations. for nearly in overall U.S. X% reservations resulted of a We United X% car across accounting the prepaid system quarter in increase year revenue in

customers Scores. Ancillary nationwide. sales XXXX. ancillary program, approximately both Promoter small the due more the increased quarter at Net locations employees for place XXX agent increased is and see in a This sales program we success is incentive over as our which since our our rental to and Our highest rentals quarterly strategy million improve to $X drove revised rates revenue in business

million $XX than currency, lower our constant year business, organic the rates. to variance EBITDA in portion a significant adjusted million; In due lower $XX prior International was with of

reduction travel a in to due pressure intra-European uncertainty Brexit. rate see around and to continue We

in consistent X% business rental of demand. Morini contributed the TurisCar XXXX Our vehicle a of rental acquisitions light International provide to integration taking teams commercial vehicle the growth of by base commercial respond to operations, which growing our steps and our quarter. and light The growth more in

days rental positive and year-over-year showed X%. up accounts with growth segment business Commercial small both mid-market

pointed we point the improving quarter, Net Scores a in higher the improvement ending experience. for earlier, June focus our Promoter overall As XXX out scores customer basis substantial on exemplifying delivered continued we with even

I made and on we’ve With update like strategic on you the initiatives. to innovation that, progress mobility our

our partners connected connectivity we XXX,XXX Continental pays fuel overdue Systems third tangible plans more started us in-vehicle Regarding relationship vehicles with Further, We We’ve incremental number with while allows rental, nearly XXX,XXX our to connected see the party Car, a systems. our deploy globally collaborating over seen the cars progress than on we’ve reach which vehicles as of using technology, our from with each car on Connected their a Car to I.D. more than in our achieve year-end. of to of Connected by OEM locate results and have expanded technology. a cost faster. fleet, two-day recovery for connected $X recovery connectivity of to improvement including well to the

Avis fleet more the us and payment returns the addition, self-service It’s feature rental monetization than and Avis We first XXXX. car reach remain to optimization to accelerating seeing customer a there app forefront app We and development which being to customer on cases, additional at the proof-of-concept rental. journey to into mileage avis.com. already us In but including explore see in release scale, one and this both facilitates been we towards use allows connectivity we Since the ancillary path initiatives added for in-rental our billing our products enhance the monitoring this during at experience. multi-year app, are are taken feature industry’s management. mid-May, the the more of allows of method and our utilize a recently split

into and Promoter We corporate business We’d for weekend, our the it to own to a to our Scores and long their to X.X who them than customers Net not. their you build is especially extend million allowing useful of higher award-winning rental use those feature the have mobile app their to looking the credit the preferred give who portion now try. This average, portion card. over on our on app do report, personal download and a XX% a app transactions customers travel encourage employer

initial partnership Earlier we rental quarter, with our new operations weekly to our year, expanded discussed to this the four nine In we second business cities. cities Lyft. bringing our

We plan of fleet overall to our continue have Lyft year. our over X,XXX partnership and benefits believe partnership our expansion vehicles several in this this can in are improve We economic performance. there that

risk into asset flatter fleet the be allows lengthen ownership the our rentals, First, us curve, have the depreciation fleet would have created of fleet sold. them a life per reached cascading of ride-hail we of in age lower that of fleet where dedicated typically portion to our they the out cars Extending resulting costs. base of mile our for

thus fleet Next, vehicles to protect our asset optimizing and and allows quality monitor of performance the in utilization vehicle mileage our rental, connected real-time, maintaining is during value. while ensuring the us mileage managed to accumulation

app, We Lyft driver drivers way digitally fully the integrated seamless with have to and rent giving reserve, a vehicles. return

and prove these objectives our XXXX This profitable our part were rentals that hypothesis be can quarter, growth of we to beyond. are able in and

grow drivers. to of to more vehicles market where with move implementation. initial are with ride-hail Uber continue partnership for third details as dedicated be closer end to We of a a before will launches announce we’ll to weekly new connected provide pleased We we Uber we rentals the we and to the fleet providing plan quarter our begin business and

approximately as London nearly well as throughout million XXXX, year, all X,XXX mobility significant this Flex on-demand Zipcar Zipcar many vehicles. to one-way Our from of fleet Airport the market. demand as product with X.X illustrating as completed trips London Flex Heathrow of in of trips has the provides in nearly Flex and a

During navigating The in year. Flex have with Flex existing growth directly London around for both partnership the airport. Zipcar a reduce the we our designated great the at experience with spent complement is Heathrow Airport Zipcar terminal offering, business increasing enhanced the to we time as quarter, the to round-trip parking as well this round-trip offerings product in product to continued X% Zipcar

emission now and taken fleet XXX,XXX microtransit we have EURX London, million more XX,XXX XXX,XXX partnership during the Our new and it the in leading with Also have over globally. than unique more Via, expanded second driven mobility our members. members over Zipcar than Flex Zipcar Volkswagen XXX market miles we Overall, largest a of zero company. e-Golfs by making trips quarter,

Washington; supplying fleet and services vehicles We connected Worth, management Fort Seattle, Massachusetts; Texas; Kingdom. both Newton, in are Keynes, United Milton and

the of partnerships Via return per in our believe to the utilization our we are reduce digitally where rent, their with helps congestion expansion which excited to these and increase about road access rider of vehicles to vehicle drivers mobile through phones, able connected markets. We’re safely securely ride-hailing vehicles

which create connected include companies customers, now will trends. a partners relationship. of from and Last services first our like benefits platform who marketplace week, a insight to Powers include data learnings is this would leading one leverage for from to new forward the data gathered partnership the and We J.D. connected partnerships global a number we customer to to Potential identify look new generate has new and potential Otonomo, from of anonymized this already growing customers with fleet. Otonomo announced growing our information new automotive cars.

Car expectations earnings so with other capabilities technology our will have development in fruitful our remainder of and the to for feel leveraging initiatives, vehicles use that partnerships In summary, cases. of consistent year. are feel success the results earlier management mobility our who far fleet serve to started apps We see and our Connected about our new our real with be mobile we and successfully the good leaders and

pricing dot-com will quarters leisure will be see where We month in increased of straight segment day delivered XXth bookings. strength eight our our leisure the be continue of leisure July July history. and our we and in largest month year-over-year consecutive also growth to rental underlying have

be use to disposition from of a alternative Fleet our strong costs resulting through values continue and channels. benefit residual

pricing year. slightly the up are pricing is from in months, still While prior currently International summer we seeing challenging

we We’re of diversification vehicles and revenue continuing on through are to EBITDA through to commercial offset Based acquisitions. trends, our our light and guidance. these year these full pressures reaffirming some

the year. like end Avis Group at I’d comment Budget this the on my announcement of departure from Finally, to of

the at continued we the and been believe I’d now and all and transformation It’s been our by strategic say inspired Avis dedication and last seamless of delivering solutions team to my lead success During to XX positioned XX,XXX this in possible. the for thank employees the our experience team of customers. a initiatives both we this steadfast looking have four provider have to each success years and as their I’ve an in of forward come. honor well put to are like performance we the made years place I’m to talent, who to further mobility to commitment our years, Budget, our you into for

to to financial the like call John results. turn through the you I’d take over to

John North

revenue from in changes on changes Thanks, good Larry, discussing morning, all will My also cost My effects. results, day, per-unit refer and currency press pricing in to which release the rate adjusted everyone. are or presentation. and reconciled per constant comments numbers today focus both GAAP in our investor comments fleet exchange excluding our and will

the an for I’d overview like the total to of quarter company. second start with

we As revenue, billion had with Larry currency a headwind $X.X million included higher $XX from record quarter. mentioned, which We a and of X% a strong ended volume.

while million increased impact cost resulted increasing million to movements. vehicle Our X%, a adverse million. $XX EBITDA $XXX by by from $XX This after $XX in overall million our were fleet the in quarter exchange expense per-unit adjusted interest foreign our

with volume up Moving per impact. in a year day excluding to Revenue effects. was the and Americas positive the exchange prior increase X% X% an rate overall revenue leading compared to to

$X As Incentive revenue Program. business revised increase, attributable which million had our a Larry Sales small Rental growth was and in mentioned, Agent to ancillary rentals

to volume U.S. eighth car by major revenue of our association grow of straight X% ancillary our the with within and our the We performing pricing marketing quarter. channels partner pricing leisure in with Along growth rental with quarter strong pricing management growth, help partnerships continues increase performance, both year-over-year saw well. With leisure in and pricing system. help

to disposition Per-unit residual fleet advantage of cost decreased channels values. to strong alternative utilize we take by continue XX% as

benefit. operating through sales. growth sell Each disposition of be to direct-to-consumer in We we and continue particularly dispose disposed direct-to-consumer alternative fleet We focused nearly in in additional vehicle of alternative to through initiative. further disposal this benefit quarter on hundred vehicle opportunity and California the dollars channel continue sales and channels. our through channels, saves XX% these will first car than have sold $X,XXX us the each success disposition the including generates We XX,XXX locations XX improve of more of significant to costs from our alternative our of now we vehicles in cost

utilization by and prior X.Xdays year, from reduced sale cost. also improving fleet or is the Average day XX%

to We potential OEMs and SUV strong, will inexpensive pressure. for towards help sport-utility competitive fleets third believe As increasingly shift to new residuals non-core be our will impact. face strategy vehicles, remains inventory to the residuals but quarter sedans minimize market

a total, vehicle to As the the be sized $XX interest by adjusted by to continue the year. and day anticipated, fleet, we quarter continue with EBITDA across fleet million X%, lower in XXX quarter, Americas cost million a with headwind, a In than it more per the up margin to we $XXX significantly throughout headwind resulted points. be in in revenue combined expanding similar increasing increasing expect to basis per-unit

resulted after revenue movements. our acquisition as by the while throughout strong segment, our costs by in volume in utilization by points, saw which increasing lower International we basis by both XX constant This Pricing existing decreasing flat business, operational X% continued evidenced were growing operations per pressures and in control. tight In our from but growth X% currency in day. X% exchange revenue completed foreign for fleet increased reflects our constant X% Per-unit currency, quarter, XXXX.

$XX team through taking is further quarter prior softness cost. steps Second improvements the to of year was of million $XX per EBITDA and than The in revenue in currency. fleet utilization lower day constant per-unit International mitigate million

last Our $XX was June year benefiting vehicle outflow compared million to year inflow XX the $XX last adjusted prior saw about a vehicle in reverse, $XX being free cash we million the timing and programs the flow the programs million as year-over-year. through

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

on issued the times million basis corporate our of In and at to term blended of at range of within at top lower year leverage February ABS of year. last times year April, notes same was five- our it of rate ABS rate blended issuance XXX of X.X was than million notes a three- points a time Our $XXX X.XX%. of we four net targeted This of three $XXX times, X.XX%.

notes the June, million of term In which XXXX. high-yield bond senior July, settlement eight- unsecured issued at in year X.XX%, through to of $XXX rate of our million late we were $XXX proceeds retire X.X% a with used of outstanding

In from structure no maturity a equity with to ensure look an our we intended opportunistically use involving schedule the option entered to equity to our quarter, second award grants. continue We derivative contracts into and strong $XX call extend the offset capital remains our near-term maturities. dilution of million capped

Additionally, we an X% and buyback or of shares. $XXX capacity additional from $XXX to board our of authority, bringing approximately million available outstanding received share increase authorization our million our

possible. an continue and of take opportunity repurchases capital approach to highest We an will allocate share to aggressive whenever take there’s to advantage return the

between EBITDA revenue $XXX As guidance to million. Larry mentioned, to billion, with and adjusted we $X.X remain and expected EBITDA revenue between have reaffirmed million $XXX and be $X.X billion our and XXXX

per have With down Americas replacement, fleet industry frequency claims that narrowed revenue unit X% to residual statistics, per are of this the the insurance for believe, into of flat that put our to X%. we range cost been fleet. utilized strong rental to are our being being year down we personal of car cars a where would now prior insurance up is day improving auto flight than Americas our lower per X.X%, With the softening, market guidance we in offsetting to

published guidance earnings additional we release you refer provided, we to last night. the For our

Underpinning to our to and all competitive, strong had remains and technologies, this, new experience. growth Americas of we happy improve in International in the Larry target and improve to efficiency strategic are the our to questions. quarter the summary, opportunities. and mobility investing ways that, we I’d invest solutions some take results but In continue With market customers’ be

Operator

[Operator coming Woronka Instructions] Deutsche Chris Our first today from is question from Bank.

Your live. now line is

Chris Woronka

talk how opportunities little budget acquisitions using you about delivery opportunity still you have fleet. truck good you’ve bit know Hey, talk be a maybe an I Can I for big morning you? some was the that on you the and fleet about see hoping can overseas. your of done guys. the front

Larry De Shon

it’s Larry. Hi, Chris,

since to actually think significant forward. I going a us pretty we’re it’s going be opportunity for

can a fleet, partnerships to and take new you fleet. our advantage we’re Connected of see, As cases lot of particularly use Car other developing our

pilot with Fetch to a on going a have We allows Truck, Budget in people which trucks seamlessly self-service rent mode.

how particularly developing have this are a pilot out indication different an the use of well. in it’s but We few there, locations mile for last delivery as cases for test,

So, for at that activity business delivery partners and kind we’re of the as of think potential the with side. relates others I it side look the but opportunities, amount car in working well we there’s as do discussing as to the that of as we’re future that some truck both significant on this a

Chris Woronka

Okay. follow-up. And as a just

As buckets you guess, capital repurchase, how the other? share look What one deleveraging, acquisitions you kind of right growth look now? different allocation those initiatives, at you for do at business towards the and the make or would in different or pivot reinvesting possibilities between, potentially I

John North

Hey, morning. it’s Good John.

think philosophy pretty approach. capital allocation our balanced has It’s to I been a consistent.

We then investment a $X.X our between worth. especially billion like we’ve Over our the four then number back of bought years, licensees internationally business. and of acquisitions, the past allocation we’ve picking significant the And a a of CapEx done in almost split or Americas. also amount stock, capital in up number

capitalists we’re So, at heart.

best going times at to direct return and all We’re we’re the where for capital. the that’s looking

that. have in over and prepared in to repurchase out I if think highest we’ll share here. we’re think to I and would the We point at and $XXX stock, shares to continue $XXX started authorization to and first come I acquisition, use just morning, to now buy in really our million mobility increased there’s and would available invest get – So we compelling going also say think repurchase But return continues we the it that flux. tip business, this of and that million. we or these foremost, a be look by that’s we’re are cases, the the iceberg

Operator

Thank you.

Our from Barclays. today next question coming is Johnson from Brian

now line Your is live.

Brian Johnson

Jason on is this Brian. for Hi, Stuhldreher

Just guidance. around a question quick the

lowered reiterated, maybe was outlook volume offset Americas, seeing International and the is revenue, in – you’re you wasn’t wondering, top-line there other any the that just you the range either in maybe implied we vis-à-vis as I the Or offset or little the it we guidance that So in might lower? the metrics in a to midpoint in reiterate assume range? of to should other an allowing cause those revised that just might maybe be RPD

John North

This is morning. Yes. again, John good

comfortable that Maybe, I guess want we’re we’re call the think anything I I else within your range. to out plan, to don’t specifically.

fleet I slight cost just per decrease two year-to-date. far so worth thought were obviously, was and probably in seen based we’ve what areas the on change significant RPD we month pretty adjusting a our then, per-unit in a think

think I own or still we revenue within estimates think fall to work. So – modeling your range we’re we going gave

to anything wanted overall. to you bring But I revenue indicates that expected think, I big a departure be think estimate, see that’s to in we call. from don’t where down If we your have your we’re going

Brian Johnson

revenue very the just partnership. what benefits was I the in be maybe potential Okay, any one be? it if And there of Otonomo think to efforts? thank could or so, around a longer-term thinking frame a revenue the And you. question, investors up benefit any monetization then data follow-up, Should from exciting call three is way material next, incremental years, announcement through two it sort

Larry De Shon

Otonomo stages with early it’s think I our Jason, partnership. yet

stream revenue coming now from We them. in are getting

a using aggregate signed be that Car with of of can opportunities data that have data as other more have that Obviously, this will getting Otonomo suppliers they other customers they even Connected – our data. We provide fleet car data. with into grows, they’re will signed from with that our couple

willing of – say, to go I So this upside the I’m I data. much out partnership and just develop, to for that think need it fairly significant. I time, can let do time, then, it think we do get believe at but But lot cars be demand not the over we kind that How there over should connected of a point, here. the really is and potential be will see

Brian Johnson

Understood, thank you.

Operator

you. Thank

is Edge Glynn coming Derek Our Research. next question Consumer from from today

Your line live. is now

Derek Glynn

the additional out for there Yes, large around differences And expected details Lyft your good Can the XXXX? my program? looking provide that for contribution the questions. partnership Are morning thanks and and from program taking expectations XXXX that any partnership? ride-hailing Uber you in material how fleet with to are

Larry De Shon

Yes. is This Larry.

say with got all, some on that, we’ve cars now we’ve X,XXX experience that First rent. over of Lyft I now and had

week. mileage we’re business has performing. we to this with time we protect ability it the to and sure We that rentals, have pleased we taken forth every of and only a do an value fleet, and mileage fleet damage can so the we seeing, at use do of what so so have weekly opportunity take We’re so that of and we look asset some the how and monitor at monitor the on do the the to have profitability so end We connected been to make review forth fleet. it the

we sure results think put kind in around that the I the right it. make pleased of parameters with are it it we of to So

the it Lyft of we’re of with to we’ll with grow guidelines and the or airports the parameters, now locations results. pretty So I to much continue to want a to pleased be, forward. We as Uber follow we Lyft business continue same planning number continue with – the growing And same a far, them. number STD we’re will with go grow we’ll and think, on

continue to don’t this thousands companies. time, over reason time for see as network out them, I of So roll the wouldn’t any cars tens why the both be both in over of we of between

Derek Glynn

going a behind ratio are John, then thinking also of the to Okay, million the forward? how company notes redemption rationale you leverage can XX-XXs. then recent portion offering just those relates of ideal the you subsequent for $XXX as the it to the And about transactions? Great. those and speak And

John North

Thanks. is This John.

due a XXXX. to a that saw piece what think notes opportunity in we nice the $XXX out I of were take million was

One about of making of job four ago structure really me sure managing of that sitting to had very the exciting the the sort was a historically joined well-thought-out head, there with months done maturities a things a I company gun having company’s we our that for and when that good we’re do most really I to think was capital and not something.

And of a which think on is great paying particularly relative where is $XXX this more X/X getting then rate retired four kind think environment example I us is point we by trade, an to additional that what about opportunistically million today. good duration, pretty I years a of of

I thing the one it other think is of knocked that tower. size it the accomplished really down

XX-XXs. my I So which much and frankly, more so We think, the $XXX more size bit would million, leave manageable bit there is perspective, a a little Calabria from little higher them keep than ability would $XXX and and just out $XXX like. was manageable, to this a we gives for the then like us the million, David put to million

in the So overall, we the day rate at launched take or and about a done get and came we’ve and I the advantage compelling was good close. same think, to And put when of a rates of kind just so a blip that, been in, together environment able waiting execution transaction. to in month little pretty we that finally were

was So easy. pretty all it

kind being your times. three four of our of around terms about talked In a to question we’ve range leverage, lot

and around money we to is this earlier coming best think cash in. one million do allocation, free I of flow that’s goes how beauty of year. the between where the is $XXX we do reminder, regenerate. million question A which think this cash utilization the And capital flow going of is we’re to of and back much this cash $XXX the

annuity work got wonderful And to we we’ve think so best. it we’re it’s where a going to stream, and put

some I to I’m times really it. look at bit, if to opportunity our also we’ll Car partnerships then and things that opportunities say there. Otonomo. the us with good but bring the there stuff, Lyft starting to comfortable a Uber, success to invest But and pretty down we there’s doing to think are the we’re excited mileage we’re potentially that and due about at the Connected think I internally optimization X.X then with the other have see for with And with levered, of we’re

So that. any of we can accelerate

in a think, kind And we some willing of notice just our do reflect of little up CapEx allocation for bumped this to terms that. bit year to we’re of I range capital so. probably you

I So world. we’re how think that’s the thinking about

Operator

Thank you.

question next Sachs. David from Our coming is Tamberrino today from Goldman

is line Your now live.

David Tamberrino

John. within International much Yes, Larry. Americas the improved by be great. vehicles in operations fleet? Utilization the nicely also segment. that Connected then Good Car Good looks and pretty it like turning improved of of year-over-year and How morning, can morning, driven just versus

Larry De Shon

utilization. in Shon, of It’s to of David. the Larry kind De morning. a on a – of It’s drive this Good is going combination a lot initiatives business are that

use a rental that longer that of really we’re there’s in length number go developing type for the of all, transaction. cases of a First business of

that out us those shave it’s we cases faster, fleet Connected back helping versus revenue overdue the the really this idle really play. the at Also advantage a to do past – Also been an first is are days is the that utilization. for our of of opportunities managing of the a to and it the team in has fleet. right think whether an taking couple fleet, And based summer overdue on just sell normally stage. I it’s quarter whether in utilization coming time channels the will off shorten the help getting this use of transaction numbers, they wasn’t time think grow that’s retail us play per cars and off per market aggressive thing to where it’s to Car connected matters. of alternative data the would So, day faster the as – revenue to than continue And analytics in if really into the time our and length helping it’s company sell

will a that make and really, that will the be Connected to work fleet opportunities initiatives harder drive the that to business So, going Car well. to the on that some I find as efficiency continue continue to in of continue to improve us really technology allow number there’s ongoing think we’ll

excited about Connected enabled for Cars far yield what so pretty us I’m So this in area.

David Tamberrino

And your that’s to to being XX-month ride-hailing, it. those months the per unit first side. couple of a XX on on-rent profitability there to view your this to as been one vehicles ride-hail I leisure XX of vehicle on cascaded has year-old guess versus down of vehicle Got get then questions versus, want follow-up, the typical a going

John North

This is John. Yes.

couple and key. you of a things think touched I the on

first this this an length be really we’re flatter would up with really own, is alternative it’s of a being coming of And the is is, curve. that car that vehicle and for depreciation that part point the use it. extending the the The taking about So the right? at de-fleeted going of

where we’re pleased think I So with rates the are.

remarks going I tens prepared everything a think within and questions can look of both seems utilization, mileage think and case profitable, of Larry at saw we’ve damage, where, the a the accrual think, And was as grow business this into this couple that to we we we we know, mentioned be also thousands. and you in mentioned, to tolerances. ago,

and changing I for is us make pivot different company, it’s financial revenue there what think to econometrics which I are that just and ways. going multiple I was fleet new our of the the think use think grow underpinnings so example fleet in go our opportunity of when cases are opportunities I and to sense how the we’re really to And And another use I us. this this those to great a unlock use saw for and cases joined

Operator

from Our Northcoast from Research. Instructions] [Operator John coming question next Healy is

Your live. line now is

John Healy

bit in a about quarter what can more that on ask initiatives? you’d cost not XXXX? cost. is think in the cause bright can number what The to I for there. maybe initiatives fleet you channels. XXXX were been sold How get guys potentially those of wanted spot on about to fleet to And was said I experiencing little you. you through in tailwind these the on the alternative that different Where quarter cars that you’re be a you year tailwinds Thank comfortable and much have XX% do than you while there ultimately think more the this working with?

Larry De Shon

think, of lot I of on John, runways disposition the a we’ve I of lot think a in front channels. still got – us look headway alternative

Still from we quarter that’s which benefit And we amount up that to go per a long of giving significantly, is versus that but direct-to-consumer. last us at auction. ways XX% XX% grown have direct-to-consumer is a we’re direct-to-dealer, year. same significant So sell and about $XXX direct-to-dealer have we car

within XX% even within channels alternative those the So within we the channels, we’re of balance how alternative channels. can penetration, selling that of change

over that more continue more give us the more what continue grow sold direct-to-consumer, versus will than that the the can So last year, where we direct-to-consumers in to sell we we doubled we can the $XXX. for and $X,XXX saw that benefit that, which we quarter to car

not you every we and month to single XX% penetration alternative So, continue that grow like take on of channels. a higher

out in are are benefits mix can channels. significant us. that inside still change front of You the the Those

exactly number a long out think ways percentage, overall market XX% we what in So, sure be. the always at develop for grow have sure those big go roll some of continue each and locations but retail we lots. in the then to we could I mix as retail have opportunity to one to the we’ll and the more I’m a auction be channels not alternative I’m

John Healy

any you dynamics and have of then And might unstable? Great. that seems have, been leisure of rather travel terms the the U.S. Larry, season in stable just just terms just competitive how in or in the more perspective July

Larry De Shon

Yes. all. characterize it I at unstable not would

In our of history in ever the month will the fact, leisure company. largest July volume be

which to a we have July, pleased be Northeast bit volume at. very month seems strong we’re in weak. of very So the

as the we little industry just but month seeing of as we like feel airports sluggish. we’ve the Northeast yielding want that revenue overall are did as notice all to the through opportunities much So many see, July in the nothing would not be something month. a normally watching there’s is but we year, to continues it pretty went that the been it’s to we critical, We

really strong. So, particularly leisure is volume volume strong, is

We and coming particularly that perspective. the volume turnaround. corporate significantly quarter, we volume from business nice that and second to small in a are see volume is month had seeing back to corporate corporate up We continue good a see and it’s

would side leisure, volumes booming. I opportunity much, strong is and So, say very yielding just but overall

John Healy

was day gave when those questions, per on but Americas pinpoint you the of the or hate I you range for opportunity revenue year-over-year? softer say the And inside be yield for would it

John North

This is Yes. John. We the brought down RPDs.

on You saw point low the a half end. about

think, the end, within and we flat to I up So were we rounded then basically in from up the X.X, were X.X a range. the and on upper X.X

Operator

I management our over the floor Thank of or to reached comments. you. closing end turn to further session. We’ve would back any like for the question-and-answer

Larry De Shon

continued fleet have by basis in had Thanks. To with second rentals say pricing Americas, we currency. competitive than our internationally, cost, lower pressures despite to more we’re margins the I’d expand through our per-unit enabled facing summarize, in combined constant in channel strong shift higher leisure a XX the the points dot-com us quarter

initiatives I have quarter We improving With strategic want our our progress made you on your thank second and company. interest significant to profitability. in in the that, key in for remain focused

Operator

you. Thank this question of teleconference. we of end – reached end reached our We

You time, participation may have your you at We day. disconnect lines for this thank your a and today. wonderful

Avis Budget (CAR) 6 Aug 192019 Q2 Earnings call transcript