Avis Budget Group Inc Q2 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Aileen Elizabeth Smith - BofA Securities, Research Division - Analyst : Following up on Rajat's cash flow question, but maybe thinking about it in a different way. If we assume that the production environment is going to remain constrained through year-end, dealer inventory is probably not going to be restocked until next year, then I think a more significant level of fleet deliveries for you guys is also going to be a 2022 event. But that could set up for a pretty significant investment requirement for you guys of not only refreshing your fleet, but also increasing the size substantially, at the same time that you may be divesting older vehicles with more mileage next year just based on the way you had to use them this year. So how do you think about that possible imbalance between cash outflow versus inflow on an operating basis with vehicle programs into next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 04, 2021 / 12:30PM, CAR.OQ - Q2 2021 Avis Budget Group Inc Earnings Call And just as a clarification for folks, is there any corporate cash that you thought -- that you think you might need to allocate towards fleet into next year that you may hold on to this year? Or is your equity in the ABS structures and advanced rates sufficient to really do everything you think you need to do?

Question: Aileen Elizabeth Smith - BofA Securities, Research Division - Analyst : Okay. So when we think about the significant excess cash that is going to be generated this year, if you guys are going to do north of $1.5 billion in EBITDA or somewhere around there, is there -- beyond M&A, is there any thought process internally on how to capitalize on the near-term strength and allocate excess cash to accretive business initiatives? I mean is the only output share repurchases? Or are there some other areas in which you guys could get more aggressive, whether it's you further rolling out touchless store rentals or other things?

Question: Aileen Elizabeth Smith - BofA Securities, Research Division - Analyst : Okay. Great. That's helpful commentary. And 1 follow-up, if I may. Touching base on some of the fleeting activity in the quarter and to follow up on one of Joe's prepared remarks. Last quarter, I think I asked a question on some reports that the rental car companies were stepping up purchases in the used vehicle market in a pretty significant way. When we look at the -- I think at the 80,000 vehicle increase in fleet size in the Americas in the quarter, is it possible for you guys to bracket percentage-wise where those vehicles were coming from, meaning new vehicles from automaker programs versus used vehicles from other channels? And perhaps where you think that normalizes to over the course of the year?