Avis Budget Group Inc.

With rising debt levels to finance increased capital spending for new vehicles, reduced operating profits due to increased depreciation expense, and increased interest expense, we expect certain of Avis Budget's credit metrics to moderate in the next couple of years after having reached unsustainably strong levels in 2022. We expect adjusted EBIT interest coverage of close to 6x in 2022, compared with 4x in 2021, declining to the mid-3x area in 2023 and even lower thereafter. We also expect funds from operations (FFO) to debt of about 30% in 2022, compared with 21% in 2021, returning to 2021 levels thereafter. Although we expect the company's liquidity sources to be about 2.7x its uses over the next 12 months, we do

...We expect Avis Budget to maintain its position as one of the three major global car renters. Avis Budget is the parent of the Avis and Budget car rental brands. The other two major global car renters are Enterprise Holdings Inc. (the largest in terms of revenue and the parent of the Enterprise, Alamo, and National brands) and Hertz Global Holdings Inc. (the parent of the Hertz, Dollar, and Thrifty brands). Avis Budget operates at over 10,000 locations in about 180 countries globally, located in the Americas, Europe, the Middle East, Africa, Asia, and Australasia. In the nine months ended Sept. 30, 2022, Avis Budget generated 79% (about $7.3 billion) of its revenue in the Americas and the balance outside of this region. In terms of revenue, Enterprise is larger, with Hertz the third largest. While there are other regional car rental companies globally, none have the global presence of these three, a situation we expect to continue. We expect certain of Avis Budget's credit metrics to improve...

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