Avis 2015 Annual Report Download - page 5

March 29, 2016
Dear fellow shareholders:
Last year, we announced that we had adopted a formal statement of purpose, which is to ensure people connect in
the moments that matter, and, in 2015, we helped more than 35 million customers connect with what is important
to them, a record for our Company. Our owned operations in more than 20 countries and our licensees in more
than 150 countries give us a strong global presence to meet these customers’ vehicle-rental needs throughout the
world. We are also deploying people and technology to serve our customers more effectively and more efficiently.
As a result of these efforts, Avis Budget Group reported the highest revenue and Adjusted EBITDA1 totals in our
history. Revenue for 2015 was $8.5 billion and Adjusted EBITDA was $903 million, the first time our Company
has achieved Adjusted EBITDA of more than $900 million. In fact, were it not for the negative impact of currency
exchange rates, revenue would have grown 5% and Adjusted EBITDA 9%. We generated more than $500 million
of free cash flow, which helped fund our repurchase of nearly $400 million of our stock in 2015, representing
8% of our outstanding shares. We have now spent more than $1 billion on a combination of stock buybacks and
convertible note repurchases, reducing our diluted share count by 22% from its peak in 2011.
Currency exchange headwinds represent just one of the many challenges we faced in 2015, and met head-on,
but which may have contributed to the decline in our stock price, despite our year-over-year earnings growth.
Industry fleet levels were elevated for much of the year, commercial volume was weaker than expected, and pricing
remained highly competitive. Yet we were able to grow our revenue and expand our margins. We are both proud
of the way that our people around the world persevered to ensure that we stayed focused on executing our global
strategic plan, while also delivering record financial results.
We drove organic revenue growth by continuing to focus resources on profitable channels and on the customer
experience we offer, including through new mobile technology options that provide travelers with more control over
the rental experience. We also increased revenue by continuing to expand our global footprint, including the 2015
acquisitions of Maggiore, one of Italy’s leading vehicle rental companies, and of licensee operations in Brazil, Poland
and Scandinavia.
We are also making good progress in developing our “self-service” capabilities, which will allow our customers to
complete a rental using only a mobile device or smartphone, from reservation to check-out to vehicle return and
e-receipt. This initiative responds to consumer demand to be able to manage their travel arrangements 100%
percent autonomously.
We benefited from our ongoing expansion of Zipcar, which continues to be the world’s leading car sharing network.
Our Zipcar operations enjoyed a record-setting year, expanding to more cities, more countries and more colleges
and universities. We extended the testing of Zipcar’s ONE>WAY service offering, which promises to offer another
source of revenue growth that further establishes our global leadership in car sharing.
We also continue to make strides in driving efficiency throughout our organization. Our Transformation 2015
initiative provided tens of millions of dollars of benefits last year by standardizing and/or consolidating some of our
non-field functions, and we expect this initiative to generate incremental benefits this year.