Form 10-Q |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Avis Budget Group, Inc. |
(Exact name of registrant as specified in its charter) |
Delaware | 06-0918165 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
6 Sylvan Way Parsippany, NJ | 07054 | |
(Address of principal executive offices) | (Zip Code) | |
(973) 496-4700 (Registrant’s telephone number, including area code) |
Large accelerated filer | x | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | o |
Page | ||
PART I | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 1. | ||
Item 2. | ||
Item 6. | ||
• | the high level of competition in the vehicle rental industry and the impact such competition may have on pricing and rental volume; |
• | a change in travel demand, including changes in airline passenger traffic; |
• | a change in our fleet costs as a result of a change in the cost of new vehicles, manufacturer recalls, disruption in the supply of new vehicles, and/or a change in the price at which we dispose of used vehicles either in the used vehicle market or under repurchase or guaranteed depreciation programs; |
• | the results of operations or financial condition of the manufacturers of our cars, which could impact their ability to perform their payment obligations under our agreements with them, including repurchase and/or guaranteed depreciation arrangements, and/or their willingness or ability to make cars available to us or the rental car industry as a whole on commercially reasonable terms or at all; |
• | any change in economic conditions generally, particularly during our peak season or in key market segments; |
• | our ability to continue to achieve and maintain cost savings and successfully implement our business strategies; |
• | our ability to obtain financing for our global operations, including the funding of our vehicle fleet through the issuance of asset-backed securities and use of the global lending markets; |
• | an occurrence or threat of terrorism, pandemic disease, natural disasters, military conflict or civil unrest in the locations in which we operate; |
• | our dependence on third-party distribution channels, third-party suppliers of other services and co-marketing arrangements with third parties; |
• | our ability to utilize derivative instruments, and the impact of derivative instruments we utilize, which can be affected by fluctuations in interest rates, gasoline prices and exchange rates, changes in government regulations and other factors; |
• | our ability to accurately estimate our future results; |
• | any major disruptions in our communication networks or information systems; |
• | our exposure to uninsured claims in excess of historical levels; |
• | risks associated with litigation, governmental or regulatory inquiries, or any failure or inability to comply with laws, regulations or contractual obligations or any changes in laws, regulations or contractual obligations, including with respect to personally identifiable information and taxes; |
• | any impact on us from the actions of our licensees, dealers and independent contractors; |
• | any substantial changes in the cost or supply of fuel, vehicle parts, energy, labor or other resources on which we depend to operate our business; |
• | risks related to our indebtedness, including our substantial outstanding debt obligations and our ability to incur substantially more debt; |
• | our ability to meet the financial and other covenants contained in the agreements governing our indebtedness; |
• | risks related to tax obligations and the effect of future changes in accounting standards; |
• | risks related to completed or future acquisitions or investments that we may pursue, including any incurrence of incremental indebtedness to help fund such transactions and our ability to promptly and effectively integrate any acquired businesses; and |
• | other business, economic, competitive, governmental, regulatory, political or technological factors affecting our operations, pricing or services. |
Item 1. | Financial Statements |
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Revenues | |||||||||
Vehicle rental | $ | 1,319 | $ | 1,329 | |||||
Other | 531 | 533 | |||||||
Net revenues | 1,850 | 1,862 | |||||||
Expenses | |||||||||
Operating | 985 | 1,000 | |||||||
Vehicle depreciation and lease charges, net | 432 | 433 | |||||||
Selling, general and administrative | 248 | 248 | |||||||
Vehicle interest, net | 68 | 64 | |||||||
Non-vehicle related depreciation and amortization | 49 | 41 | |||||||
Interest expense related to corporate debt, net | 52 | 56 | |||||||
Transaction-related costs | 31 | 8 | |||||||
Restructuring expense | 1 | 7 | |||||||
Total expenses | 1,866 | 1,857 | |||||||
Income (loss) before income taxes | (16 | ) | 5 | ||||||
Provision for (benefit from) income taxes | (7 | ) | 1 | ||||||
Net income (loss) | $ | (9 | ) | $ | 4 | ||||
Comprehensive income (loss) | $ | (103 | ) | $ | 7 | ||||
Earnings (loss) per share | |||||||||
Basic | $ | (0.09 | ) | $ | 0.03 | ||||
Diluted | $ | (0.09 | ) | $ | 0.03 |
March 31, 2015 | December 31, 2014 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 854 | $ | 624 | ||||
Receivables, net | 564 | 599 | ||||||
Deferred income taxes | 142 | 159 | ||||||
Other current assets | 517 | 456 | ||||||
Total current assets | 2,077 | 1,838 | ||||||
Property and equipment, net | 629 | 638 | ||||||
Deferred income taxes | 1,324 | 1,352 | ||||||
Goodwill | 813 | 842 | ||||||
Other intangibles, net | 856 | 886 | ||||||
Other non-current assets | 342 | 355 | ||||||
Total assets exclusive of assets under vehicle programs | 6,041 | 5,911 | ||||||
Assets under vehicle programs: | ||||||||
Program cash | 61 | 119 | ||||||
Vehicles, net | 10,777 | 10,215 | ||||||
Receivables from vehicle manufacturers and other | 251 | 362 | ||||||
Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party | 362 | 362 | ||||||
11,451 | 11,058 | |||||||
Total assets | $ | 17,492 | $ | 16,969 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and other current liabilities | $ | 1,489 | $ | 1,491 | ||||
Short-term debt and current portion of long-term debt | 244 | 28 | ||||||
Total current liabilities | 1,733 | 1,519 | ||||||
Long-term debt | 3,481 | 3,392 | ||||||
Other non-current liabilities | 732 | 766 | ||||||
Total liabilities exclusive of liabilities under vehicle programs | 5,946 | 5,677 | ||||||
Liabilities under vehicle programs: | ||||||||
Debt | 1,503 | 1,776 | ||||||
Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party | 6,838 | 6,340 | ||||||
Deferred income taxes | 2,236 | 2,267 | ||||||
Other | 448 | 244 | ||||||
11,025 | 10,627 | |||||||
Commitments and contingencies (Note 9) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.01 par value—authorized 10 million shares; none issued and outstanding | — | — | ||||||
Common stock, $0.01 par value—authorized 250 million shares; issued 137,093,424 and 137,093,424 shares | 1 | 1 | ||||||
Additional paid-in capital | 7,028 | 7,212 | ||||||
Accumulated deficit | (2,124 | ) | (2,115 | ) | ||||
Accumulated other comprehensive loss | (116 | ) | (22 | ) | ||||
Treasury stock, at cost—31,063,328 and 31,386,746 shares | (4,268 | ) | (4,411 | ) | ||||
Total stockholders’ equity | 521 | 665 | ||||||
Total liabilities and stockholders’ equity | $ | 17,492 | $ | 16,969 |
Three Months Ended March 31, | |||||||||
2015 | 2014 | ||||||||
Operating activities | |||||||||
Net income (loss) | $ | (9 | ) | $ | 4 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||
Vehicle depreciation | 423 | 407 | |||||||
Gain on sale of vehicles, net | (24 | ) | (11 | ) | |||||
Non-vehicle related depreciation and amortization | 49 | 41 | |||||||
Amortization of debt financing fees | 11 | 9 | |||||||
Net change in assets and liabilities, excluding the impact of acquisitions and dispositions: | |||||||||
Receivables | — | (27 | ) | ||||||
Income taxes and deferred income taxes | (15 | ) | 1 | ||||||
Accounts payable and other current liabilities | (20 | ) | (71 | ) | |||||
Other, net | 88 | 37 | |||||||
Net cash provided by operating activities | 503 | 390 | |||||||
Investing activities | |||||||||
Property and equipment additions | (41 | ) | (36 | ) | |||||
Proceeds received on asset sales | 3 | 3 | |||||||
Net assets acquired (net of cash acquired) | (36 | ) | (124 | ) | |||||
Other, net | — | (7 | ) | ||||||
Net cash used in investing activities exclusive of vehicle programs | (74 | ) | (164 | ) | |||||
Vehicle programs: | |||||||||
Decrease in program cash | 51 | 12 | |||||||
Investment in vehicles | (3,195 | ) | (3,275 | ) | |||||
Proceeds received on disposition of vehicles | 2,444 | 2,470 | |||||||
(700 | ) | (793 | ) | ||||||
Net cash used in investing activities | (774 | ) | (957 | ) |
Avis Budget Group, Inc. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Continued) (In millions) (Unaudited) | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Financing activities | ||||||||
Proceeds from long-term borrowings | 376 | 295 | ||||||
Payments on long-term borrowings | (6 | ) | (5 | ) | ||||
Net change in short-term borrowings | (7 | ) | 11 | |||||
Repurchases of common stock | (33 | ) | (67 | ) | ||||
Debt financing fees | (6 | ) | (5 | ) | ||||
Other, net | — | (1 | ) | |||||
Net cash provided by financing activities exclusive of vehicle programs | 324 | 228 | ||||||
Vehicle programs: | ||||||||
Proceeds from borrowings | 3,667 | 3,775 | ||||||
Payments on borrowings | (3,458 | ) | (3,280 | ) | ||||
Debt financing fees | (6 | ) | (7 | ) | ||||
203 | 488 | |||||||
Net cash provided by financing activities | 527 | 716 | ||||||
Effect of changes in exchange rates on cash and cash equivalents | (26 | ) | (1 | ) | ||||
Net increase in cash and cash equivalents | 230 | 148 | ||||||
Cash and cash equivalents, beginning of period | 624 | 693 | ||||||
Cash and cash equivalents, end of period | $ | 854 | $ | 841 |
1. | Basis of Presentation |
• | Americas—provides and licenses the Company’s brands to third parties for vehicle rentals and ancillary products and services in North America, South America, Central America and the Caribbean, and operates the Company’s car sharing business in certain of these markets. |
• | International—provides and licenses the Company’s brands to third parties for vehicle rentals and ancillary products and services in Europe, the Middle East, Africa, Asia, Australia and New Zealand, and operates the Company’s car sharing business in certain of these markets. |
2. | Restructuring Activities |
Americas | International | Total | |||||||||||
Balance as of January 1, 2015 | $ | 4 | $ | 13 | $ | 17 | |||||||
T15 restructuring expense | 1 | — | 1 | ||||||||||
Avis Europe restructuring payment | (1 | ) | (4 | ) | (5 | ) | |||||||
T15 restructuring payment | (3 | ) | (1 | ) | (4 | ) | |||||||
Balance as of March 31, 2015 | $ | 1 | $ | 8 | $ | 9 | |||||||
Personnel Related | Facility Related | Total | |||||||||||
Balance as of January 1, 2015 | $ | 14 | $ | 3 | $ | 17 | |||||||
T15 restructuring expense | 1 | — | 1 | ||||||||||
Avis Europe restructuring payment | (4 | ) | (1 | ) | (5 | ) | |||||||
T15 restructuring payment | (4 | ) | — | (4 | ) | ||||||||
Balance as of March 31, 2015 | $ | 7 | $ | 2 | $ | 9 |
3. | Earnings Per Share |
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Net income (loss) for basic and diluted EPS | $ | (9 | ) | $ | 4 | |||
Basic weighted average shares outstanding | 106.1 | 106.6 | ||||||
Options and non-vested stock (a) | — | 2.0 | ||||||
Convertible debt (b) | — | — | ||||||
Diluted weighted average shares outstanding | 106.1 | 108.6 | ||||||
Earnings (loss) per share: | ||||||||
Basic | $ | (0.09 | ) | $ | 0.03 | |||
Diluted | $ | (0.09 | ) | $ | 0.03 |
(a) | As the Company incurred a net loss for the three months ended March 31, 2015, 0.8 million outstanding options and 2.1 million non-vested stock awards have an anti-dilutive effect and therefore are excluded from the computation of diluted weighted average shares outstanding. For the three months ended March 31, 2014, the number of anti-dilutive securities which were excluded from the computation of diluted earnings per share was not significant. |
(b) | For the three months ended March 31, 2014, 4.0 million issuable shares underlying the 3½% convertible notes due 2014 have an anti-dilutive effect and therefore are excluded from the computation of diluted weighted average shares outstanding. |
4. | Acquisitions |
5. | Intangible Assets |
As of March 31, 2015 | As of December 31, 2014 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Amortized Intangible Assets | |||||||||||||||||||||||
License agreements | $ | 245 | $ | 57 | $ | 188 | $ | 259 | $ | 59 | $ | 200 | |||||||||||
Customer relationships | 159 | 52 | 107 | 167 | 50 | 117 | |||||||||||||||||
Other | 8 | 4 | 4 | 8 | 3 | 5 | |||||||||||||||||
Total | $ | 412 | $ | 113 | $ | 299 | $ | 434 | $ | 112 | $ | 322 | |||||||||||
Unamortized Intangible Assets | |||||||||||||||||||||||
Goodwill (a) | $ | 813 | $ | 842 | |||||||||||||||||||
Trademarks | $ | 557 | $ | 564 |
(a) | The change in the carrying amount since December 31, 2014 reflects a currency translation loss of $51 million, partially offset by acquisitions. |
6. | Vehicle Rental Activities |
As of | As of | ||||||
March 31, | December 31, | ||||||
2015 | 2014 | ||||||
Rental vehicles | $ | 11,661 | $ | 11,006 | |||
Less: Accumulated depreciation | (1,335 | ) | (1,465 | ) | |||
10,326 | 9,541 | ||||||
Vehicles held for sale | 451 | 674 | |||||
Vehicles, net | $ | 10,777 | $ | 10,215 |
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Depreciation expense | $ | 423 | $ | 407 | |||
Lease charges | 33 | 37 | |||||
Gain on sales of vehicles, net | (24 | ) | (11 | ) | |||
Vehicle depreciation and lease charges, net | $ | 432 | $ | 433 |
7. | Long-term Debt and Borrowing Arrangements |
As of | As of | ||||||||
Maturity Dates | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
4⅞% Senior Notes | November 2017 | $ | 300 | $ | 300 | ||||
Floating Rate Senior Notes (a) | December 2017 | 248 | 248 | ||||||
Floating Rate Term Loan (b) | March 2019 | 977 | 980 | ||||||
9¾% Senior Notes | March 2020 | 223 | 223 | ||||||
6% Euro-denominated Senior Notes (c) | March 2021 | 499 | 561 | ||||||
5⅛% Senior Notes | June 2022 | 400 | 400 | ||||||
5½% Senior Notes | April 2023 | 674 | 674 | ||||||
5¼% Senior Notes | March 2025 | 375 | — | ||||||
Other | 29 | 34 | |||||||
Total | 3,725 | 3,420 | |||||||
Less: Short-term debt and current portion of long-term debt | 244 | 28 | |||||||
Long-term debt | $ | 3,481 | $ | 3,392 |
(a) | The interest rate on these notes is equal to three-month LIBOR plus 275 basis points, for an aggregate rate of 3.01% at March 31, 2015; the Company has entered into an interest rate swap to hedge its interest rate exposure related to these notes at an aggregate rate of 3.58%. |
(b) | The floating rate term loan is part of the Company’s senior credit facility, which is secured by pledges of capital stock of certain subsidiaries of the Company, and liens on substantially all of the Company’s intellectual property and certain other real and personal property. As of March 31, 2015, the floating rate term loan due 2019 bears interest at the greater of three-month LIBOR or 0.75%, plus 225 basis points, for an aggregate rate of 3.00%. The Company has entered into a swap to hedge $600 million of its interest rate exposure related to the floating rate term loan at an aggregate rate of 3.96%. |
(c) | The reduction in the balance principally reflects currency translation adjustments. |
Total Capacity | Outstanding Borrowings | Letters of Credit Issued | Available Capacity | ||||||||||||
Senior revolving credit facility maturing 2018 (a) | $ | 1,800 | $ | — | $ | 741 | $ | 1,059 | |||||||
Other facilities (b) | 11 | 1 | — | 10 |
(a) | The senior revolving credit facility bears interest at one-month LIBOR plus 200 basis points and is part of the Company’s senior credit facility, which is secured by pledges of capital stock of certain subsidiaries of the Company, and liens on substantially all of the Company’s intellectual property and certain other real and personal property. |
(b) | These facilities encompass bank overdraft lines of credit, bearing interest of 2.95% to 5.69% as of March 31, 2015. |
8. | Debt Under Vehicle Programs and Borrowing Arrangements |
As of | As of | ||||||
March 31, | December 31, | ||||||
2015 | 2014 | ||||||
Americas - Debt due to Avis Budget Rental Car Funding (a) | $ | 6,838 | $ | 6,340 | |||
Americas - Debt borrowings (b) | 602 | 746 | |||||
International - Debt borrowings (c) | 591 | 685 | |||||
International - Capital leases (c) | 289 | 314 | |||||
Other | 21 | 31 | |||||
Total | $ | 8,341 | $ | 8,116 |
(a) | The increase reflects additional borrowings principally to fund increases in the Company’s car rental fleet. |
(b) | The decrease results from the timing of borrowings. |
(c) | The decrease principally reflects currency translation adjustments. |
Debt Under Vehicle Programs | |||
Within 1 year (a) | $ | 1,791 | |
Between 1 and 2 years | 1,878 | ||
Between 2 and 3 years | 1,007 | ||
Between 3 and 4 years | 1,701 | ||
Between 4 and 5 years | 1,319 | ||
Thereafter | 645 | ||
Total | $ | 8,341 |
(a) | Vehicle-backed debt maturing within one year primarily represents term asset-backed securities. |
Total Capacity (a) | Outstanding Borrowings | Available Capacity | |||||||||
Americas - Debt due to Avis Budget Rental Car Funding (b) | $ | 9,458 | $ | 6,838 | $ | 2,620 | |||||
Americas - Debt borrowings (c) | 929 | 602 | 327 | ||||||||
International - Debt borrowings (d) | 1,596 | 591 | 1,005 | ||||||||
International - Capital leases (e) | 340 | 289 | 51 | ||||||||
Other | 21 | 21 | — | ||||||||
Total | $ | 12,344 | $ | 8,341 | $ | 4,003 |
(a) | Capacity is subject to maintaining sufficient assets to collateralize debt. |
(b) | The outstanding debt is collateralized by approximately $8.5 billion of underlying vehicles and related assets. |
(c) | The outstanding debt is collateralized by approximately $832 million of underlying vehicles and related assets. |
(d) | The outstanding debt is collateralized by approximately $1.1 billion of underlying vehicles and related assets. |
(e) | The outstanding debt is collateralized by approximately $283 million of underlying vehicles and related assets. |
9. | Commitments and Contingencies |
10. | Stockholders’ Equity |
Currency Translation Adjustments | Net Unrealized Gains (Losses) on Cash Flow Hedges(a) | Net Unrealized Gains (Losses) on Available-for Sale Securities | Minimum Pension Liability Adjustment(b) | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
Balance, January 1, 2015 | $ | 51 | $ | (1 | ) | $ | 2 | $ | (74 | ) | $ | (22 | ) | |||||||
Other comprehensive income (loss) before reclassifications | (92 | ) | (4 | ) | — | 2 | (94 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 1 | — | (1 | ) | — | ||||||||||||||
Net current-period other comprehensive income (loss) | (92 | ) | (3 | ) | — | 1 | (94 | ) | ||||||||||||
Balance, March 31, 2015 | $ | (41 | ) | $ | (4 | ) | $ | 2 | $ | (73 | ) | $ | (116 | ) | ||||||
Balance, January 1, 2014 | $ | 166 | $ | 1 | $ | 2 | $ | (52 | ) | $ | 117 | |||||||||
Other comprehensive income (loss) before reclassifications | 3 | 1 | (1 | ) | — | 3 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | — | — | — | — | |||||||||||||||
Net current-period other comprehensive income (loss) | 3 | 1 | (1 | ) | — | 3 | ||||||||||||||
Balance, March 31, 2014 | $ | 169 | $ | 2 | $ | 1 | $ | (52 | ) | $ | 120 |
(a) | For the three months ended March 31, 2015, amounts reclassified from accumulated other comprehensive income (loss) into interest expense were $2 million ($1 million, net of tax). For the three months ended March 31, 2014, amounts reclassified from accumulated other comprehensive income (loss) were not material. |
(b) | For the three months ended March 31, 2015, amounts reclassified from accumulated other comprehensive income (loss) into selling, general and administrative expenses were $1 million ($1 million, net of tax). For the three months ended March 31, 2014, amounts reclassified from accumulated other comprehensive income (loss) were not material. |
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Net income (loss) | $ | (9 | ) | $ | 4 | |||
Other comprehensive income (loss): | ||||||||
Currency translation adjustments (net of tax of $(24) and $0, respectively) | (92 | ) | 3 | |||||
Net unrealized gain (loss) on available-for-sale securities (net of tax of $0 and $0, respectively) | — | (1 | ) | |||||
Net unrealized gain (loss) on cash flow hedges (net of tax of $2 and $0, respectively) | (3 | ) | 1 | |||||
Minimum pension liability adjustment (net of tax of $0 and $0, respectively) | 1 | — | ||||||
(94 | ) | 3 | ||||||
Total comprehensive income (loss) | $ | (103 | ) | $ | 7 |
11. | Stock-Based Compensation |
Three Months Ended March 31, | |||
2015 | 2014 | ||
Expected volatility of stock price | 37% | 40% | |
Risk-free interest rate | 0.74% | 0.85% | |
Expected term of awards | 3 years | 3 years | |
Dividend yield | 0.0% | 0.0% |
Time-Based RSUs | Performance-Based and Market-Based RSUs | Cash Unit Awards | |||||||||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | Number of Units | Weighted Average Grant Date Fair Value | ||||||||||||||||
Outstanding at January 1, 2015 (a) | 998 | $ | 27.26 | 1,884 | $ | 19.17 | 267 | $ | 14.90 | ||||||||||||
Granted | 250 | 61.17 | 230 | 55.51 | — | — | |||||||||||||||
Vested (b) | (528 | ) | 22.19 | (976 | ) | 12.07 | (156 | ) | 12.65 | ||||||||||||
Forfeited/expired | (9 | ) | 43.57 | (159 | ) | 18.18 | — | — | |||||||||||||
Outstanding at March 31, 2015 (c) | 711 | $ | 42.70 | 979 | $ | 34.92 | 111 | $ | 18.04 |
(a) | Reflects the maximum number of stock units assuming achievement of all time-, performance- and market-vesting criteria and does not include those for non-employee directors. The weighted-average fair value of time-based RSUs and performance-based and market-based RSUs granted during the three months ended March 31, 2014 was $41.15 and $39.37, respectively. |
(b) | The total grant date fair value of RSUs vested during the three months ended March 31, 2015 and 2014 was $23 million and $14 million, respectively. The total grant date fair value of cash units vested during the three months ended March 31, 2015 was $2 million. |
(c) | The Company’s outstanding time-based RSUs, performance-based and market-based RSUs, and cash units had aggregate intrinsic value of $42 million, $58 million and $7 million, respectively. Aggregate unrecognized compensation expense related to time-based RSUs and performance-based and market-based RSUs amounted to $46 million and will be recognized over a weighted average vesting period of 1.4 years. The Company assumes that substantially all outstanding awards will vest over time. |
Number of Options | Weighted Average Exercise Price | Aggregate Intrinsic Value (in millions) | Weighted Average Remaining Contractual Term (years) | ||||||||||
Outstanding at January 1, 2015 | 848 | $ | 2.92 | $ | 54 | 4.3 | |||||||
Granted | — | — | — | ||||||||||
Exercised | (11 | ) | 9.12 | 1 | |||||||||
Forfeited/expired | (1 | ) | 0.79 | — | |||||||||
Outstanding at March 31, 2015 | 836 | 2.85 | 47 | 4.0 | |||||||||
Exercisable at March 31, 2015 | 836 | $ | 2.85 | $ | 47 | 4.0 |
12. | Financial Instruments |
As of March 31, 2015 | |||
Interest rate caps (a) | $ | 8,096 | |
Interest rate swaps | 1,663 | ||
Foreign exchange contracts | 1,062 | ||
Commodity contracts (millions of gallons of unleaded gasoline) | 17 |
(a) | Represents $6.1 billion of interest rate caps sold, partially offset by approximately $2.0 billion of interest rate caps purchased. These amounts exclude $4.1 billion of interest rate caps purchased by the Company’s Avis Budget Rental Car Funding subsidiary as it is not consolidated by the Company. |
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||
Fair Value, Asset Derivatives | Fair Value, Liability Derivatives | Fair Value, Asset Derivatives | Fair Value, Liability Derivatives | |||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||||
Interest rate swaps (a) | $ | — | $ | 8 | $ | 1 | $ | 3 | ||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||
Interest rate caps (b) | — | 5 | — | 10 | ||||||||||||
Interest rate swaps | — | — | — | — | ||||||||||||
Foreign exchange contracts (c) | 17 | 8 | 5 | 2 | ||||||||||||
Commodity contracts (c) | 1 | — | — | 1 | ||||||||||||
Total | $ | 18 | $ | 21 | $ | 6 | $ | 16 |
(a) | Included in other non-current assets or other non-current liabilities. |
(b) | Included in assets under vehicle programs or liabilities under vehicle programs. |
(c) | Included in other current assets or other current liabilities. |
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Derivatives designated as hedging instruments | ||||||||
Interest rate swaps (a) | $ | (3 | ) | $ | 1 | |||
Derivatives not designated as hedging instruments (b) | ||||||||
Interest rate caps (c) | — | — | ||||||
Foreign exchange contracts (d) | 35 | (18 | ) | |||||
Commodity contracts (e) | — | — | ||||||
Total | $ | 32 | $ | (17 | ) |
(a) | Recognized, net of tax, as a component of other comprehensive income within stockholders’ equity. |
(b) | Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures being hedged. |
(c) | Included in interest expense. |
(d) | For the three months ended March 31, 2015, included a $21 million gain in interest expense and a $14 million gain in operating expense. For the three months ended March 31, 2014 included a $14 million loss in interest expense and a $4 million loss in operating expense. |
(e) | Included in operating expense. |
As of March 31, 2015 | As of December 31, 2014 | |||||||||||||||
Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||
Corporate debt | ||||||||||||||||
Short-term debt and current portion of long-term debt | $ | 244 | $ | 264 | $ | 28 | $ | 28 | ||||||||
Long-term debt | 3,481 | 3,541 | 3,392 | 3,439 | ||||||||||||
Debt under vehicle programs | ||||||||||||||||
Vehicle-backed debt due to Avis Budget Rental Car Funding | $ | 6,838 | $ | 6,927 | $ | 6,340 | $ | 6,407 | ||||||||
Vehicle-backed debt | 1,497 | 1,508 | 1,766 | 1,771 | ||||||||||||
Interest rate swaps and interest rate contracts (a) | 6 | 6 | 10 | 10 |
(a) | Derivatives in a liability position. |
13. | Segment Information |
Three Months Ended March 31, | ||||||||||||||||||
2015 | 2014 | |||||||||||||||||
Revenues | Adjusted EBITDA | Revenues (a) | Adjusted EBITDA (b) | |||||||||||||||
Americas | $ | 1,375 | $ | 115 | $ | 1,330 | $ | 115 | ||||||||||
International | 475 | 16 | 532 | 14 | ||||||||||||||
Corporate and Other (c) | — | (14 | ) | — | (12 | ) | ||||||||||||
Total Company | $ | 1,850 | 117 | $ | 1,862 | 117 | ||||||||||||
Less: | Non-vehicle related depreciation and amortization | 49 | 41 | |||||||||||||||
Interest expense related to corporate debt, net | 52 | 56 | ||||||||||||||||
Transaction-related costs | 31 | 8 | ||||||||||||||||
Restructuring expense | 1 | 7 | ||||||||||||||||
Income (loss) before income taxes | $ | (16 | ) | $ | 5 |
(a) | As a result of the change in the Company’s reportable segments, $19 million of revenues previously reported in International are now reported in the Americas in the three months ended March 31, 2014. |
(b) | As a result of the change in the Company’s reportable segments, $3 million of Adjusted EBITDA previously reported in International is now reported in the Americas in the three months ended March 31, 2014. |
(c) | Includes unallocated corporate overhead which is not attributable to a particular segment. |
14. | Guarantor and Non-Guarantor Consolidating Condensed Financial Statements |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
Vehicle rental | $ | — | $ | — | $ | 942 | $ | 377 | $ | — | $ | 1,319 | |||||||||||||
Other | — | — | 267 | 753 | (489 | ) | 531 | ||||||||||||||||||
Net revenues | — | — | 1,209 | 1,130 | (489 | ) | 1,850 | ||||||||||||||||||
Expenses | |||||||||||||||||||||||||
Operating | — | 4 | 608 | 373 | — | 985 | |||||||||||||||||||
Vehicle depreciation and lease charges, net | — | — | 436 | 431 | (435 | ) | 432 | ||||||||||||||||||
Selling, general and administrative | 8 | 3 | 140 | 97 | — | 248 | |||||||||||||||||||
Vehicle interest, net | — | — | 49 | 73 | (54 | ) | 68 | ||||||||||||||||||
Non-vehicle related depreciation and amortization | — | — | 33 | 16 | — | 49 | |||||||||||||||||||
Interest expense related to corporate debt, net: | |||||||||||||||||||||||||
Interest expense | — | 40 | 1 | 11 | — | 52 | |||||||||||||||||||
Intercompany interest expense (income) | (3 | ) | (2 | ) | — | 5 | — | — | |||||||||||||||||
Transaction-related costs | — | 6 | 1 | 24 | — | 31 | |||||||||||||||||||
Restructuring expense | — | — | 1 | — | — | 1 | |||||||||||||||||||
Total expenses | 5 | 51 | 1,269 | 1,030 | (489 | ) | 1,866 | ||||||||||||||||||
Income (loss) before income taxes and equity in earnings of subsidiaries | (5 | ) | (51 | ) | (60 | ) | 100 | — | (16 | ) | |||||||||||||||
Provision for (benefit from) income taxes | (2 | ) | (20 | ) | 8 | 7 | — | (7 | ) | ||||||||||||||||
Equity in earnings (loss) of subsidiaries | (6 | ) | 25 | 93 | — | (112 | ) | — | |||||||||||||||||
Net income (loss) | $ | (9 | ) | $ | (6 | ) | $ | 25 | $ | 93 | $ | (112 | ) | $ | (9 | ) | |||||||||
Comprehensive income (loss) | $ | (103 | ) | $ | (100 | ) | $ | (67 | ) | $ | 1 | $ | 166 | $ | (103 | ) |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||||
Vehicle rental | $ | — | $ | — | $ | 916 | $ | 413 | $ | — | $ | 1,329 | |||||||||||||
Other | — | — | 267 | 755 | (489 | ) | 533 | ||||||||||||||||||
Net revenues | — | — | 1,183 | 1,168 | (489 | ) | 1,862 | ||||||||||||||||||
Expenses | |||||||||||||||||||||||||
Operating | — | 4 | 604 | 392 | — | 1,000 | |||||||||||||||||||
Vehicle depreciation and lease charges, net | — | — | 441 | 432 | (440 | ) | 433 | ||||||||||||||||||
Selling, general and administrative | 7 | 4 | 140 | 97 | — | 248 | |||||||||||||||||||
Vehicle interest, net | — | — | 45 | 68 | (49 | ) | 64 | ||||||||||||||||||
Non-vehicle related depreciation and amortization | — | — | 27 | 14 | — | 41 | |||||||||||||||||||
Interest expense related to corporate debt, net: | |||||||||||||||||||||||||
Interest expense | 1 | 47 | — | 8 | — | 56 | |||||||||||||||||||
Intercompany interest expense (income) | (3 | ) | (3 | ) | 1 | 5 | — | — | |||||||||||||||||
Transaction-related costs | — | 2 | 3 | 3 | — | 8 | |||||||||||||||||||
Restructuring expense | — | — | 2 | 5 | — | 7 | |||||||||||||||||||
Total expenses | 5 | 54 | 1,263 | 1,024 | (489 | ) | 1,857 | ||||||||||||||||||
Income (loss) before income taxes and equity in earnings of subsidiaries | (5 | ) | (54 | ) | (80 | ) | 144 | — | 5 | ||||||||||||||||
Provision for (benefit from) income taxes | (2 | ) | (21 | ) | 18 | 6 | — | 1 | |||||||||||||||||
Equity in earnings of subsidiaries | 7 | 40 | 138 | — | (185 | ) | — | ||||||||||||||||||
Net income | $ | 4 | $ | 7 | $ | 40 | $ | 138 | $ | (185 | ) | $ | 4 | ||||||||||||
Comprehensive income | $ | 7 | $ | 11 | $ | 43 | $ | 141 | $ | (195 | ) | $ | 7 |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 2 | $ | 552 | $ | — | $ | 300 | $ | — | $ | 854 | |||||||||||||
Receivables, net | — | — | 172 | 392 | — | 564 | |||||||||||||||||||
Deferred income taxes | — | 9 | 102 | 31 | — | 142 | |||||||||||||||||||
Other current assets | 2 | 82 | 98 | 335 | — | 517 | |||||||||||||||||||
Total current assets | 4 | 643 | 372 | 1,058 | — | 2,077 | |||||||||||||||||||
Property and equipment, net | — | 118 | 323 | 188 | — | 629 | |||||||||||||||||||
Deferred income taxes | 20 | 1,196 | 139 | — | (31 | ) | 1,324 | ||||||||||||||||||
Goodwill | — | — | 487 | 326 | — | 813 | |||||||||||||||||||
Other intangibles, net | — | 32 | 539 | 285 | — | 856 | |||||||||||||||||||
Other non-current assets | 95 | 79 | 22 | 146 | — | 342 | |||||||||||||||||||
Intercompany receivables | 208 | 350 | 1,016 | 714 | (2,288 | ) | — | ||||||||||||||||||
Investment in subsidiaries | 299 | 3,004 | 3,191 | — | (6,494 | ) | — | ||||||||||||||||||
Total assets exclusive of assets under vehicle programs | 626 | 5,422 | 6,089 | 2,717 | (8,813 | ) | 6,041 | ||||||||||||||||||
Assets under vehicle programs: | |||||||||||||||||||||||||
Program cash | — | — | — | 61 | — | 61 | |||||||||||||||||||
Vehicles, net | — | 17 | 85 | 10,675 | — | 10,777 | |||||||||||||||||||
Receivables from vehicle manufacturers and other | — | 3 | — | 248 | — | 251 | |||||||||||||||||||
Investment in Avis Budget Rental Car Funding (AESOP) LLC-related party | — | — | — | 362 | — | 362 | |||||||||||||||||||
— | 20 | 85 | 11,346 | — | 11,451 | ||||||||||||||||||||
Total assets | $ | 626 | $ | 5,442 | $ | 6,174 | $ | 14,063 | $ | (8,813 | ) | $ | 17,492 | ||||||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||
Accounts payable and other current liabilities | $ | 17 | $ | 211 | $ | 472 | $ | 789 | $ | — | $ | 1,489 | |||||||||||||
Short-term debt and current portion of long-term debt | — | 236 | 5 | 3 | — | 244 | |||||||||||||||||||
Total current liabilities | 17 | 447 | 477 | 792 | — | 1,733 | |||||||||||||||||||
Long-term debt | — | 2,978 | 4 | 499 | — | 3,481 | |||||||||||||||||||
Other non-current liabilities | 88 | 99 | 235 | 341 | (31 | ) | 732 | ||||||||||||||||||
Intercompany payables | — | 1,614 | 318 | 356 | (2,288 | ) | — | ||||||||||||||||||
Total liabilities exclusive of liabilities under vehicle programs | 105 | 5,138 | 1,034 | 1,988 | (2,319 | ) | 5,946 | ||||||||||||||||||
Liabilities under vehicle programs: | |||||||||||||||||||||||||
Debt | — | 5 | 82 | 1,416 | — | 1,503 | |||||||||||||||||||
Due to Avis Budget Rental Car Funding (AESOP) LLC-related party | — | — | — | 6,838 | — | 6,838 | |||||||||||||||||||
Deferred income taxes | — | — | 2,054 | 182 | — | 2,236 | |||||||||||||||||||
Other | — | — | — | 448 | — | 448 | |||||||||||||||||||
— | 5 | 2,136 | 8,884 | — | 11,025 | ||||||||||||||||||||
Total stockholders’ equity | 521 | 299 | 3,004 | 3,191 | (6,494 | ) | 521 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 626 | $ | 5,442 | $ | 6,174 | $ | 14,063 | $ | (8,813 | ) | $ | 17,492 |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||
Cash and cash equivalents | $ | 2 | $ | 210 | $ | — | $ | 412 | $ | — | $ | 624 | |||||||||||||
Receivables, net | — | — | 177 | 422 | — | 599 | |||||||||||||||||||
Deferred income taxes | — | 23 | 102 | 34 | — | 159 | |||||||||||||||||||
Other current assets | 3 | 86 | 78 | 289 | — | 456 | |||||||||||||||||||
Total current assets | 5 | 319 | 357 | 1,157 | — | 1,838 | |||||||||||||||||||
Property and equipment, net | — | 112 | 325 | 201 | — | 638 | |||||||||||||||||||
Deferred income taxes | 19 | 1,199 | 138 | — | (4 | ) | 1,352 | ||||||||||||||||||
Goodwill | — | — | 487 | 355 | — | 842 | |||||||||||||||||||
Other intangibles, net | — | 38 | 545 | 303 | — | 886 | |||||||||||||||||||
Other non-current assets | 104 | 81 | 22 | 148 | — | 355 | |||||||||||||||||||
Intercompany receivables | 205 | 344 | 978 | 672 | (2,199 | ) | — | ||||||||||||||||||
Investment in subsidiaries | 468 | 3,072 | 3,316 | — | (6,856 | ) | — | ||||||||||||||||||
Total assets exclusive of assets under vehicle programs | 801 | 5,165 | 6,168 | 2,836 | (9,059 | ) | 5,911 | ||||||||||||||||||
Assets under vehicle programs: | |||||||||||||||||||||||||
Program cash | — | — | — | 119 | — | 119 | |||||||||||||||||||
Vehicles, net | — | 7 | 87 | 10,121 | — | 10,215 | |||||||||||||||||||
Receivables from vehicle manufacturers and other | — | 1 | — | 361 | — | 362 | |||||||||||||||||||
Investment in Avis Budget Rental Car Funding (AESOP) LLC-related party | — | — | — | 362 | — | 362 | |||||||||||||||||||
— | 8 | 87 | 10,963 | — | 11,058 | ||||||||||||||||||||
Total assets | $ | 801 | $ | 5,173 | $ | 6,255 | $ | 13,799 | $ | (9,059 | ) | $ | 16,969 | ||||||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||
Accounts payable and other current liabilities | $ | 39 | $ | 200 | $ | 462 | $ | 790 | $ | — | $ | 1,491 | |||||||||||||
Short-term debt and current portion of long-term debt | — | 13 | 4 | 11 | — | 28 | |||||||||||||||||||
Total current liabilities | 39 | 213 | 466 | 801 | — | 1,519 | |||||||||||||||||||
Long-term debt | — | 2,825 | 6 | 561 | — | 3,392 | |||||||||||||||||||
Other non-current liabilities | 97 | 100 | 232 | 341 | (4 | ) | 766 | ||||||||||||||||||
Intercompany payables | — | 1,558 | 313 | 328 | (2,199 | ) | — | ||||||||||||||||||
Total liabilities exclusive of liabilities under vehicle programs | 136 | 4,696 | 1,017 | 2,031 | (2,203 | ) | 5,677 | ||||||||||||||||||
Liabilities under vehicle programs: | |||||||||||||||||||||||||
Debt | — | 9 | 84 | 1,683 | — | 1,776 | |||||||||||||||||||
Due to Avis Budget Rental Car Funding (AESOP) LLC-related party | — | — | — | 6,340 | — | 6,340 | |||||||||||||||||||
Deferred income taxes | — | — | 2,082 | 185 | — | 2,267 | |||||||||||||||||||
Other | — | — | — | 244 | — | 244 | |||||||||||||||||||
— | 9 | 2,166 | 8,452 | — | 10,627 | ||||||||||||||||||||
Total stockholders’ equity | 665 | 468 | 3,072 | 3,316 | (6,856 | ) | 665 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 801 | $ | 5,173 | $ | 6,255 | $ | 13,799 | $ | (9,059 | ) | $ | 16,969 |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||
Net cash provided by operating activities | $ | — | $ | 12 | $ | 45 | $ | 446 | $ | — | $ | 503 | |||||||||||
Investing activities | |||||||||||||||||||||||
Property and equipment additions | — | (4 | ) | (19 | ) | (18 | ) | — | (41 | ) | |||||||||||||
Proceeds received on asset sales | — | 1 | — | 2 | — | 3 | |||||||||||||||||
Net assets acquired (net of cash acquired) | — | — | — | (36 | ) | — | (36 | ) | |||||||||||||||
Intercompany loan advances | — | — | (24 | ) | — | 24 | — | ||||||||||||||||
Other, net | 33 | — | 1 | — | (34 | ) | — | ||||||||||||||||
Net cash provided by (used in) investing activities exclusive of vehicle programs | 33 | (3 | ) | (42 | ) | (52 | ) | (10 | ) | (74 | ) | ||||||||||||
Vehicle programs: | |||||||||||||||||||||||
Decrease in program cash | — | — | — | 51 | — | 51 | |||||||||||||||||
Investment in vehicles | — | (3 | ) | — | (3,192 | ) | — | (3,195 | ) | ||||||||||||||
Proceeds received on disposition of vehicles | — | 4 | — | 2,440 | — | 2,444 | |||||||||||||||||
— | 1 | — | (701 | ) | — | (700 | ) | ||||||||||||||||
Net cash provided by (used in) investing activities | 33 | (2 | ) | (42 | ) | (753 | ) | (10 | ) | (774 | ) | ||||||||||||
Financing activities | |||||||||||||||||||||||
Proceeds from long-term borrowings | — | 375 | — | 1 | — | 376 | |||||||||||||||||
Payments on long-term borrowings | — | (4 | ) | (1 | ) | (1 | ) | — | (6 | ) | |||||||||||||
Net change in short-term borrowings | — | — | — | (7 | ) | — | (7 | ) | |||||||||||||||
Intercompany loan borrowings | — | — | — | 24 | (24 | ) | — | ||||||||||||||||
Repurchases of common stock | (33 | ) | — | — | — | — | (33 | ) | |||||||||||||||
Debt financing fees | — | (6 | ) | — | — | — | (6 | ) | |||||||||||||||
Other, net | — | (33 | ) | — | (1 | ) | 34 | — | |||||||||||||||
Net cash provided by (used in) financing activities exclusive of vehicle programs | (33 | ) | 332 | (1 | ) | 16 | 10 | 324 | |||||||||||||||
Vehicle programs: | |||||||||||||||||||||||
Proceeds from borrowings | — | — | — | 3,667 | — | 3,667 | |||||||||||||||||
Payments on borrowings | — | — | (2 | ) | (3,456 | ) | — | (3,458 | ) | ||||||||||||||
Debt financing fees | — | — | — | (6 | ) | — | (6 | ) | |||||||||||||||
— | — | (2 | ) | 205 | — | 203 | |||||||||||||||||
Net cash provided by (used in) financing activities | (33 | ) | 332 | (3 | ) | 221 | 10 | 527 | |||||||||||||||
Effect of changes in exchange rates on cash and cash equivalents | — | — | — | (26 | ) | — | (26 | ) | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | — | 342 | — | (112 | ) | — | 230 | ||||||||||||||||
Cash and cash equivalents, beginning of period | 2 | 210 | — | 412 | — | 624 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 2 | $ | 552 | $ | — | $ | 300 | $ | — | $ | 854 |
Parent | Subsidiary Issuers | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||
Net cash provided by operating activities | $ | 2 | $ | 284 | $ | 14 | $ | 90 | $ | — | $ | 390 | |||||||||||
Investing activities | |||||||||||||||||||||||
Property and equipment additions | — | (3 | ) | (17 | ) | (16 | ) | — | (36 | ) | |||||||||||||
Proceeds received on asset sales | — | 2 | — | 1 | — | 3 | |||||||||||||||||
Net assets acquired (net of cash acquired) | — | — | — | (124 | ) | — | (124 | ) | |||||||||||||||
Other, net | 57 | (7 | ) | — | — | (57 | ) | (7 | ) | ||||||||||||||
Net cash provided by (used in) investing activities exclusive of vehicle programs | 57 | (8 | ) | (17 | ) | (139 | ) | (57 | ) | (164 | ) | ||||||||||||
Vehicle programs: | |||||||||||||||||||||||
Decrease in program cash | — | — | — | 12 | — | 12 | |||||||||||||||||
Investment in vehicles | — | (1 | ) | (8 | ) | (3,266 | ) | — | (3,275 | ) | |||||||||||||
Proceeds received on disposition of vehicles | — | 3 | — | 2,467 | — | 2,470 | |||||||||||||||||
— | 2 | (8 | ) | (787 | ) | — | (793 | ) | |||||||||||||||
Net cash provided by (used in) investing activities | 57 | (6 | ) | (25 | ) | (926 | ) | (57 | ) | (957 | ) | ||||||||||||
Financing activities | |||||||||||||||||||||||
Proceeds from long-term borrowings | — | — | — | 295 | — | 295 | |||||||||||||||||
Payments on long-term borrowings | — | (4 | ) | (1 | ) | — | — | (5 | ) | ||||||||||||||
Net change in short-term borrowings | — | — | — | 11 | — | 11 | |||||||||||||||||
Repurchases of common stock | (67 | ) | — | — | — | — | (67 | ) | |||||||||||||||
Debt financing fees | — | — | — | (5 | ) | — | (5 | ) | |||||||||||||||
Other, net | (1 | ) | (57 | ) | — | — | 57 | (1 | ) | ||||||||||||||
Net cash provided by (used in) financing activities exclusive of vehicle programs | (68 | ) | (61 | ) | (1 | ) | 301 | 57 | 228 | ||||||||||||||
Vehicle programs: | |||||||||||||||||||||||
Proceeds from borrowings | — | — | — | 3,775 | — | 3,775 | |||||||||||||||||
Payments on borrowings | — | — | — | (3,280 | ) | — | (3,280 | ) | |||||||||||||||
Debt financing fees | — | — | — | (7 | ) | — | (7 | ) | |||||||||||||||
— | — | — | 488 | — | 488 | ||||||||||||||||||
Net cash provided by (used in) financing activities | (68 | ) | (61 | ) | (1 | ) | 789 | 57 | 716 | ||||||||||||||
Effect of changes in exchange rates on cash and cash equivalents | — | — | — | (1 | ) | — | (1 | ) | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | (9 | ) | 217 | (12 | ) | (48 | ) | — | 148 | ||||||||||||||
Cash and cash equivalents, beginning of period | 14 | 242 | 12 | 425 | — | 693 | |||||||||||||||||
Cash and cash equivalents, end of period | $ | 5 | $ | 459 | $ | — | $ | 377 | $ | — | $ | 841 |
15. | Subsequent Events |
In April 2015, the Company amended its European fleet securitization program to extend its maturity, lower its cost and increase its capacity to €1.0 billion. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
OVERVIEW |
• | time and mileage (“T&M”) fees charged to our customers for vehicle rentals; |
• | payments from our customers with respect to certain operating expenses we incur, including gasoline and vehicle licensing fees, as well as concession fees, which we pay in exchange for the right to operate at airports and other locations; |
• | sales of loss damage waivers and insurance and rentals of navigation units and other items in conjunction with vehicle rentals; and |
• | royalty revenue from our licensees in conjunction with their vehicle rental transactions. |
• | general travel demand, including worldwide enplanements; |
• | fleet, pricing, marketing and strategic decisions made by us and by our competitors; |
• | changes in fleet costs and in conditions in the used vehicle marketplace, as well as manufacturer recalls; |
• | changes in borrowing costs and in market willingness to purchase corporate and vehicle-related debt; |
• | demand for truck rentals and car sharing services; |
• | changes in the price of gasoline; and |
• | changes in currency exchange rates. |
• | Our net revenues, at $1.9 billion, remained level compared to prior year, despite an approximately $85 million negative impact from currency exchange rate movements. |
• | Adjusted EBITDA totaled $117 million, unchanged from the prior year. |
• | We repurchased $31 million of our common stock, reducing our shares outstanding by approximately 0.5 million shares. |
• | We acquired our Avis and Budget licensees in Norway, Sweden and Denmark, and agreed to acquire Maggiore Group, the fourth-largest vehicle rental company in Italy. |
• | We issued $375 million of 5¼% Senior Notes due 2025, the proceeds of which have been used during April primarily to redeem all $223 million of our outstanding 9¾% Senior Notes due 2020 and to finance a portion of our acquisition of Maggiore Group. |
Three Months Ended March 31, | |||||||||||||||||
2015 | 2014 | Change | % Change | ||||||||||||||
Revenues | |||||||||||||||||
Vehicle rental | $ | 1,319 | $ | 1,329 | $ | (10 | ) | (1 | %) | ||||||||
Other | 531 | 533 | (2 | ) | 0 | % | |||||||||||
Net revenues | 1,850 | 1,862 | (12 | ) | (1 | %) | |||||||||||
Expenses | |||||||||||||||||
Operating | 985 | 1,000 | (15 | ) | (2 | %) | |||||||||||
Vehicle depreciation and lease charges, net | 432 | 433 | (1 | ) | 0 | % | |||||||||||
Selling, general and administrative | 248 | 248 | — | 0 | % | ||||||||||||
Vehicle interest, net | 68 | 64 | 4 | 6 | % | ||||||||||||
Non-vehicle related depreciation and amortization | 49 | 41 | 8 | 20 | % | ||||||||||||
Interest expense related to corporate debt, net | 52 | 56 | (4 | ) | (7 | %) | |||||||||||
Transaction-related costs | 31 | 8 | 23 | * | |||||||||||||
Restructuring expense | 1 | 7 | (6 | ) | (86 | %) | |||||||||||
Total expenses | 1,866 | 1,857 | 9 | 0 | % | ||||||||||||
Income (loss) before income taxes | (16 | ) | 5 | (21 | ) | * | |||||||||||
Provision for (benefit from) income taxes | (7 | ) | 1 | (8 | ) | * | |||||||||||
Net income (loss) | $ | (9 | ) | $ | 4 | $ | (13 | ) | * |
* | Not meaningful. |
• | Operating expenses decreased to 53.2% of revenue from 53.7% compared to the prior-year period, as rental volumes increased. |
• | Vehicle depreciation and lease charges increased to 23.4% of revenue from 23.2% compared to first quarter 2014. |
• | Selling, general and administrative costs increased to 13.4% of revenue from 13.3% in first quarter 2014. |
• | Vehicle interest costs were 3.7% of revenue compared to 3.5% in the prior-year period. |
Revenues | Adjusted EBITDA | |||||||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||||||||
Americas | $ | 1,375 | $ | 1,330 | 3 | % | $ | 115 | $ | 115 | 0 | % | ||||||||||||
International | 475 | 532 | (11 | %) | 16 | 14 | 14 | % | ||||||||||||||||
Corporate and Other (a) | — | — | * | (14 | ) | (12 | ) | * | ||||||||||||||||
Total Company | $ | 1,850 | $ | 1,862 | (1 | %) | 117 | 117 | 0 | % | ||||||||||||||
Less: | Non-vehicle related depreciation and amortization | 49 | 41 | |||||||||||||||||||||
Interest expense related to corporate debt, net | 52 | 56 | ||||||||||||||||||||||
Transaction-related costs (b) | 31 | 8 | ||||||||||||||||||||||
Restructuring expense | 1 | 7 | ||||||||||||||||||||||
Income (loss) before income taxes | $ | (16 | ) | $ | 5 |
* | Not meaningful. |
(a) | Includes unallocated corporate overhead which is not attributable to a particular segment. |
(b) | Primarily comprised of acquisition- and integration-related expenses. |
2015 | 2014 | % Change | |||||||||
Revenue | $ | 1,375 | $ | 1,330 | 3 | % | |||||
Adjusted EBITDA | 115 | 115 | 0 | % |
• | Operating expenses were 51.6% of revenue, compared to 52.1% in the prior-year period, principally due to increased rental volumes. |
• | Vehicle depreciation and lease charges increased to 24.7% of revenue from 24.0% in first quarter 2014, primarily due to lower fleet utilization. |
• | Selling, general and administrative costs, at 11.2% of revenue, remained level compared to the prior-year period. |
• | Vehicle interest costs were 4.1% of revenue compared to 4.0% in first quarter 2014. |
2015 | 2014 | % Change | |||||||||
Revenue | $ | 475 | $ | 532 | (11 | %) | |||||
Adjusted EBITDA | 16 | 14 | 14 | % |
• | Operating expenses were 57.3% of revenue, a decrease from 57.8% in the prior-year period, due to currency hedge gains. |
• | Vehicle depreciation and lease charges decreased to 19.5% of revenue from 21.3% compared to first quarter 2014, driven by 8% lower per-unit fleet costs in constant currency. |
• | Selling, general and administrative costs increased to 17.4% of revenue from 16.3% in the prior-year period, primarily due to an increase in partnership commissions and brand marketing. |
• | Vehicle interest costs increased to 2.5% of revenue compared to 2.1% in first quarter 2014 primarily due to increased vehicle-backed debt borrowings. |
March 31, 2015 | December 31, 2014 | Change | ||||||||||
Total assets exclusive of assets under vehicle programs | $ | 6,041 | $ | 5,911 | $ | 130 | ||||||
Total liabilities exclusive of liabilities under vehicle programs | 5,946 | 5,677 | 269 | |||||||||
Assets under vehicle programs | 11,451 | 11,058 | 393 | |||||||||
Liabilities under vehicle programs | 11,025 | 10,627 | 398 | |||||||||
Stockholders’ equity | 521 | 665 | (144 | ) |
Three Months Ended March 31, | ||||||||||||
2015 | 2014 | Change | ||||||||||
Cash provided by (used in): | ||||||||||||
Operating activities | $ | 503 | $ | 390 | $ | 113 | ||||||
Investing activities | (774 | ) | (957 | ) | 183 | |||||||
Financing activities | 527 | 716 | (189 | ) | ||||||||
Effect of exchange rate changes | (26 | ) | (1 | ) | (25 | ) | ||||||
Net increase in cash and cash equivalents | 230 | 148 | 82 | |||||||||
Cash and cash equivalents, beginning of period | 624 | 693 | (69 | ) | ||||||||
Cash and cash equivalents, end of period | $ | 854 | $ | 841 | $ | 13 |
As of | As of | ||||||||
Maturity Dates | March 31, | December 31, | |||||||
2015 | 2014 | ||||||||
4⅞% Senior Notes | November 2017 | $ | 300 | $ | 300 | ||||
Floating Rate Senior Notes (a) | December 2017 | 248 | 248 | ||||||
Floating Rate Term Loan (b) | March 2019 | 977 | 980 | ||||||
9¾% Senior Notes | March 2020 | 223 | 223 | ||||||
6% Euro-denominated Senior Notes (c) | March 2021 | 499 | 561 | ||||||
5⅛% Senior Notes | June 2022 | 400 | 400 | ||||||
5½% Senior Notes | April 2023 | 674 | 674 | ||||||
5¼% Senior Notes | March 2025 | 375 | — | ||||||
Other | 29 | 34 | |||||||
Total | $ | 3,725 | $ | 3,420 |
(a) | The interest rate on these notes is equal to three-month LIBOR plus 275 basis points, for an aggregate rate of 3.01% at March 31, 2015; the Company has entered into an interest rate swap to hedge its interest rate exposure related to these notes at an aggregate rate of 3.58%. |
(b) | The floating rate term loan is part of the Company’s senior credit facility, which is secured by pledges of capital stock of certain subsidiaries of the Company, and liens on substantially all of the Company’s intellectual property and certain other real and personal property. As of March 31, 2015, the floating rate term loan due 2019 bears interest at the greater of three-month LIBOR or 0.75%, plus 225 basis points, for an aggregate rate of 3.00%. The Company has entered into a swap to hedge $600 million of its interest rate exposure related to the floating rate term loan at an aggregate rate of 3.96%. |
(c) | The reduction in the balance principally reflects currency translation adjustments. |
As of | As of | ||||||
March 31, | December 31, | ||||||
2015 | 2014 | ||||||
Americas - Debt due to Avis Budget Rental Car Funding (a) | $ | 6,838 | $ | 6,340 | |||
Americas - Debt borrowings (b) | 602 | 746 | |||||
International - Debt borrowings (c) | 591 | 685 | |||||
International - Capital leases (c) | 289 | 314 | |||||
Other | 21 | 31 | |||||
Total | $ | 8,341 | $ | 8,116 |
(a) | The increase reflects additional borrowings principally to fund increases in the Company’s car rental fleet. |
(b) | The decrease results from the timing of borrowings. |
(c) | The decrease principally reflects currency translation adjustments. |
Total Capacity | Outstanding Borrowings | Letters of Credit Issued | Available Capacity | ||||||||||||
Senior revolving credit facility maturing 2018 (a) | $ | 1,800 | $ | — | $ | 741 | $ | 1,059 | |||||||
Other facilities (b) | 11 | 1 | — | 10 |
(a) | The senior revolving credit facility bears interest at one-month LIBOR plus 200 basis points and is part of the Company’s senior credit facility, which is secured by pledges of capital stock of certain subsidiaries of the Company, and liens on substantially all of the Company’s intellectual property and certain other real and personal property. |
(b) | These facilities encompass bank overdraft lines of credit, bearing interest of 2.95% to 5.69% as of March 31, 2015. |
Total Capacity (a) | Outstanding Borrowings | Available Capacity | |||||||||
Americas - Debt due to Avis Budget Rental Car Funding (b) | $ | 9,458 | $ | 6,838 | $ | 2,620 | |||||
Americas - Debt borrowings (c) | 929 | 602 | 327 | ||||||||
International - Debt borrowings (d) | 1,596 | 591 | 1,005 | ||||||||
International - Capital leases (e) | 340 | 289 | 51 | ||||||||
Other | 21 | 21 | — | ||||||||
Total | $ | 12,344 | $ | 8,341 | $ | 4,003 |
(a) | Capacity is subject to maintaining sufficient assets to collateralize debt. |
(b) | The outstanding debt is collateralized by approximately $8.5 billion of underlying vehicles and related assets. |
(c) | The outstanding debt is collateralized by approximately $832 million of underlying vehicles and related assets. |
(d) | The outstanding debt is collateralized by approximately $1.1 billion of underlying vehicles and related assets. |
(e) | The outstanding debt is collateralized by approximately $283 million of underlying vehicles and related assets. |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
(a) | Disclosure Controls and Procedures. Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the period ended March 31, 2015. |
(b) | Changes in Internal Control Over Financial Reporting. During the fiscal quarter to which this report relates, there has been no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. |
Item 1. | Legal Proceedings |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Total Number of Shares Purchased(a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||
January 1-31, 2015 | 159,781 | $ | 62.58 | 159,781 | $ | 274,453,525 | |||||||
February 1-28, 2015 | 97,917 | 61.27 | 97,917 | 268,453,927 | |||||||||
March 1-31, 2015 | 251,155 | 58.73 | 251,155 | 253,703,261 | |||||||||
Total | 508,853 | $ | 60.43 | 508,853 | $ | 253,703,261 |
(a) | Excludes, for the three months ended March 31, 2015, 685,647 shares which were withheld by the Company to satisfy employees’ income tax liabilities attributable to the vesting of restricted stock unit awards. |
Item 6. | Exhibits |
AVIS BUDGET GROUP, INC. | ||||
Date: May 5, 2015 | ||||
/s/ David B. Wyshner | ||||
David B. Wyshner | ||||
Senior Executive Vice President and | ||||
Chief Financial Officer | ||||
Date: May 5, 2015 | ||||
/s/ David T. Calabria | ||||
David T. Calabria | ||||
Vice President and | ||||
Chief Accounting Officer |
Exhibit No. | Description |
4.1 | Indenture dated as of March 11, 2015 among Avis Budget Car Rental, LLC and Avis Budget Finance, Inc., as Issuers, the Guarantors from time to time parties thereto and The Bank of Nova Scotia Trust Company of New York as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated March 17, 2015). |
4.2 | Form of 5.25% Senior Notes Due 2025 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated March 17, 2015). |
10.1 | Series 2015-1 Supplement, dated as of January 29, 2015, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2015-1 Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 30, 2015). |
10.2 | Purchase Agreement, dated as of March 4, 2015, by and among Avis Budget Car Rental, LLC and Avis Budget Finance, Inc. as issuers, Avis Budget Group, Inc. and certain of its subsidiaries as guarantors and Merrill Lynch, Pierce, Fenner & Smith Incorporated for itself and on behalf of the several initial purchasers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 10, 2015). |
12 | Statement re: Computation of Ratio of Earnings to Fixed Charges. |
31.1 | Certification of Chief Executive Officer pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended. |
31.2 | Certification of Chief Financial Officer pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended. |
32 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document. |
101.SCH | XBRL Taxonomy Extension Schema. |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase. |
101.DEF | XBRL Taxonomy Extension Definition Linkbase. |
101.LAB | XBRL Taxonomy Extension Label Linkbase. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase. |
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Earnings available to cover fixed charges: | |||||||
Income (loss) from continuing operations before income taxes | $ | (16 | ) | $ | 5 | ||
Plus: Fixed charges | 148 | 147 | |||||
Earnings available to cover fixed charges | $ | 132 | $ | 152 | |||
Fixed charges (a): | |||||||
Interest, including amortization of deferred financing costs | $ | 121 | $ | 122 | |||
Interest portion of rental payment | 27 | 25 | |||||
Total fixed charges | $ | 148 | $ | 147 | |||
Ratio of earnings to fixed charges (b) | — | 1.03 | x |
(a) Consists of interest expense on all indebtedness (including amortization of deferred financing costs) and the portion of operating lease rental expense that is representative of the interest factor. Interest expense on all indebtedness is detailed as follows: |
Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
Related to debt under vehicle programs | $ | 72 | $ | 66 | |||
All other | 49 | 56 | |||||
$ | 121 | $ | 122 |
(b) Earnings were not sufficient to cover fixed charges for the three months ended March 31, 2015 by $16 million. |
1. | I have reviewed this quarterly report on Form 10-Q of Avis Budget Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Ronald L. Nelson |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Avis Budget Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ David B. Wyshner |
Senior Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Ronald L. Nelson |
Ronald L. Nelson |
Chief Executive Officer |
May 5, 2015 |
/s/ David B. Wyshner |
David B. Wyshner |
Senior Executive Vice President and |
Chief Financial Officer |
May 5, 2015 |
Intangible Assets (Narrative) (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2015
|
Mar. 31, 2014
|
|
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense relating to all intangible assets | $ 11 | $ 7 |
Amortization expense for remainder of the year | 37 | |
Intangible assets amortization expense, year one | 45 | |
Intangible assets amortization expense, year two | 39 | |
Intangible assets amortization expense, year three | 29 | |
Intangible assets amortization expense, year four | 28 | |
Intangible assets amortization expense, year five | $ 28 |
Stock-Based Compensation (Narrative) (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2015
|
Mar. 31, 2014
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 5 | $ 8 |
Stock-based compensation expense (net of tax) | 3 | 5 |
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation | 56 | |
Employee service share based compensation incremental tax benefit to be realized from exercise of stock awards | 22 | |
Cash Unit Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 2 |
Debt Under Vehicle Programs And Borrowing Arrangements (Schedule Of Contractual Maturities) (Detail) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2015
|
---|---|
Debt Under Vehicle Programs And Borrowing Arrangements [Line Items] | |
Vehicle Program Debt Amount Outstanding | $ 8,341 |
Vehicle backed debt [Member] | |
Debt Under Vehicle Programs And Borrowing Arrangements [Line Items] | |
Within 1 year (a) | 1,791 |
Between 1 and 2 years | 1,878 |
Between 2 and 3 years | 1,007 |
Between 3 and 4 years | 1,701 |
Between 4 and 5 years | 1,319 |
Thereafter | 645 |
Vehicle Program Debt Amount Outstanding | $ 8,341 |
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