Avis 2014 Annual Report Download - page 4

March 24, 2015
Dear fellow shareholders:
Avis Budget Group had an outstanding year in 2014, with record-setting financial performance driven by aggressive
execution of our global strategic plan. We demonstrated our ability to positively influence key pricing metrics and
maintained our focus on our most profitable sales channels, customer segments and car classes. We continued
to find ways to enhance our customer experience around the world, through innovation and investments in
technology. We expanded our global presence both through organic system growth as well as through acquisitions.
We continued to reap the benefits of our global emphasis on efficiency, process improvement and cost control.
And our efforts to make Avis Budget a great place to work worldwide helped further the engagement levels of our
associates, with improvements in both our internal customer service scores and employee survey results.
Record Financial Performance: We drove global revenue growth of 7% to $8.5 billion, and our Adjusted EBITDA1
grew 14% to $876 million, both Company records. Net income was $327 million, or $2.96 per diluted share,
representing a 35% year-over-year increase, excluding certain items. Each of our reporting segments — North
America, International and Truck Rental — showed year-over-year growth in Adjusted EBITDA. A significant
contributor to these results was our ability to generate increased volume and pricing in North America in all four
quarters, building on our similar performance last year. All told, these results helped us produce more than $450
million in Free Cash Flow1, which we deployed to fund tuck-in acquisitions and to repurchase $300 million in CAR
stock. This in turn drove our Company-record earnings per share and helped propel our share price up by more than
60% for the third consecutive year.
Influencing Pricing: We committed to taking actions to increase our realized pricing in order to generate returns
and margins more commensurate with the underlying value of our assets, and we delivered on that commitment.
In North America, we again achieved price increases across all of our brands, both on- and off-airport, and in both
leisure and commercial rentals. The successful deployment of our Demand-Fleet-Price yield-management tool in
North America helped us become faster, smarter and better at optimizing prices on a local and regional basis in
real time to adjust to market opportunities, competitive activity, fleet availability and fluctuations in demand. In
2015, we will roll this tool out to other regions such as Europe and Australia, which will enhance our performance,
particularly in markets facing uncertain economic operating environments. We will also begin the second phase of
our North America deployment, which will further enable faster and smarter localized fleet management decisions
that can drive revenue growth and profitable fleet utilization.
Enhancing the Customer Experience: Throughout the world, we rolled out new mobile platforms and applications
that make it simpler and more convenient for our customers to manage their reservations and rental requirements.
We have enhanced our brand websites, expanded vehicle choice programs, and introduced new ancillary products,
such as mobile device chargers in North America and mobile Wi-Fi products in Europe. We launched new brand
advertising campaigns in Europe and new social media initiatives in North America. We created new uniforms
for Avis, Budget and dual-branded-location employees to provide a more consistent look and rental experience
globally. We were recognized by several organizations for superior customer service around the world, as well as for
brand loyalty and our technology innovations. Our Zipcar brand piloted an ambitious new one-way service to help
meet members’ unmet transportation needs.
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