Budget Group Reports Q3 Results

22 October 1997

    DAYTONA BEACH, Fla., Oct. 22 -- Budget Group, Inc.
released its third quarter operating results today, reporting fully diluted
earnings per share of 98 cents for the quarter ended September 30, 1997,
compared to 41 cents a year ago. Net income for the third quarter increased to
$29.0 million from $4.6 million in the prior year.  Revenues increased to
$482.4 million from $101.5 million.  Operating income increased to $90.6
million from $15.2 million.  The magnitude of the increases was due primarily
to the acquisition of Budget Rent a Car Corporation on April 29, 1997.
    The operating results herein represent three full months of combined
operations for Budget Rent a Car Corporation (BRAC), Budget Car Sales and Van
Pool Services, Inc. (VPSI).  Data also includes two months of operating
results from Premier Car Rental, which Budget Group acquired on July 31, 1997.
Premier Car Rental is the third largest insurance replacement car rental
company in the U.S.  Results for 1996 discussed herein relate only to the
operations of the former Team Rental Group (renamed Budget Group last April)
unless otherwise noted.
    "We had a strong summer season at Budget Rent a Car, with U.S. car and
truck rental revenue up 8.8%, reaching $344.7 million in the third quarter
versus pro forma prior year third quarter revenues of $316.8 million," stated
Budget Group Chairman and CEO Sandy Miller. "Not only are we achieving our
planned cost reductions and synergies from merging BRAC and Team operations,
we also are ahead of our plan in improving operational performance in the
Northeast.  In addition, we're continuing to see pricing strengthen in the
industry."  Daily dollar average for the quarter for Budget's U.S. car and
truck rental operations increased by 4.4% on a pro forma basis while rental
days (volume) were up 4.2% on a pro forma basis.  Gross rental margin (revenue
per unit less holding cost per unit) of 62.5% on a pro forma basis represents
an increase of 1.3 percentage points over the prior year quarter as well as
the seasonal high for the year.
    During the third quarter, Budget Rent a Car kicked off a new brand
campaign that highlights the company's fleet diversity and included the launch
of its new VIP Pickup program. Miller added, "Our fleet diversity campaign is
off to a successful start as we continue to see year over year increases in
reservations.  With 5,000 VIP Pickups now in the fleet, we are exceeding our
planned numbers on utilization and profitability on these units."
    Truck rental revenues (which are included in the U.S. car and truck rental
revenue figures above) are growing rapidly, up 19% in the third quarter
compared to prior year (pro forma), while truck rental pre-tax profit rose
52%. During the third quarter, the company signed a four-year preferred
alliance agreement with HFS Incorporated, making Budget the exclusive provider
of truck rental services to customers of Coldwell Banker, ERA and CENTURY 21
real estate brands, as well as relocation customers of HFS Mobility Services,
Inc.
    "Our other vehicle rental operations, Premier Car Rental and VPSI,
achieved favorable results and continue to meet our expectations," said
Miller.
    Revenues from Budget Car Sales operations increased to $71.0 million for
the three-month period ended September 30, 1997, from $38.8 million for third
quarter 1996.  Units sold increased to 4,379 for the quarter from 2,047 for
the comparable period in the prior year.  The increase was due to the addition
of the car sales operations of Budget Rent a Car as well as the opening of new
stores. "With 24 stores at the end of the quarter, we're continuing to build
our Budget Car Sales division and having just opened our 25th store this month
are on track with expansion plans for the year," said Jeff Congdon, president,
Budget Car Sales.
    On October 1, 1997, Budget Group completed the sale of 5,317,500 shares of
Class A Common Stock at $33 per share, of which 4.5 million were sold by Ford
and 450,000 were new primary shares. "This successful offering completes the
disposition by Ford of its ownership interest in our company," said Miller.
    Earlier this week, the company announced its plan to acquire Cruise
America, Inc. (Amex: RVR), which had revenues of $95.6 million and pretax
income of $3.8 million for its fiscal year ended April 30, 1997.  Cruise
America operates a network of 17 company-owned facilities and 74 satellite
rental centers throughout North America, with a combined fleet of more than
4,300 recreational vehicles, including motorhomes, truck campers, motorcycles
and shuttle buses.  With locations strategically situated near national parks
and other scenic destinations across the U.S, Canada and Alaska, Cruise
America caters largely to a clientele of North American and European
vacationers.
    In recent years, Cruise America has significantly lowered its costs by
switching its motorhome fleet from single-bodied units to modular units.  This
proprietary modular approach allows the company to refurbish the camper
portion of these vehicles and remount them on new RV chassis.  The used
chassis are converted at a nominal cost into delivery trucks and then sold at
attractive prices into the large market for pre-owned trucks. "Given the
natural synergies between Cruise America and Budget Group's subsidiaries, we
plan to cross-promote our products, broaden each company's product offerings,
conduct joint marketing programs and cascade trucks from Cruise America to
Budget Truck Rental," said Miller.
    Budget Group, Inc., through subsidiary companies and their franchisees,
operates Budget Car and Truck Rental, the third largest worldwide car and
truck rental system, with over 3,200 airport and local market locations in
more than 110 countries and territories.  In addition, the Company owns
Premier Car Rental, which serves the insurance replacement market through a
network of 101 locations in 13 major U.S. markets.  Budget Car Sales, a
subsidiary of Budget Group, is one of the largest independent retailers of
late model vehicles in the United States, operating 25 retail car sales
facilities.  The company also operates airport parking facilities at certain
locations and through Van Pool Services, Inc. leases vans for van pooling
operations in 28 states.
    Certain items in this press release may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995 and as such may involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of Budget or Cruise America to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements.  Such forward-looking statements speak only as of the date
of this press release.  Budget and Cruise America expressly disclaim any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in Budget's
or Cruise America's expectations with regard thereto or any change in events,
conditions or circumstances on which any statement is based.
    This press release does not constitute "proxy solicitation material"
within the meaning of Regulation 14A and Schedule 14A of the Securities
Exchange Act of 1934, as amended.  In addition, this press release shall not
constitute an offer to sell or the solicitation of any offer to buy Budget
Class A common stock nor shall there be any sale of these securities in any
state in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such state.


                              BUDGET GROUP, INC.
                      CONSOLIDATED STATEMENTS OF INCOME
                          Period Ending September 30
                      (In Thousands, Except Share Data)

        3rd Quarter             Year to Date
                                       1997     1996       1997       1996

    OPERATING REVENUE
      Vehicle Rental             $391,332    $62,689    $685,891     $166,531
     Sales of Vehicles             71,030     38,803     172,623       94,489
     Royalty Fees and Other        20,084         --      32,702           --
       Total operating revenues   482,446    101,492     891,216      261,020

    OPERATING COSTS AND EXPENSES
     Direct vehicle and operating  42,536      9,900      80,938       24,392
     Depreciation - vehicles      102,626     15,960     187,842       43,983
     Depreciation - nonvehicles     6,684        705      12,046        1,915
       Cost of car sales           61,308     30,432     147,376       77,727
     Advertising, promotion
       and selling                 34,014      6,492      69,064       17,101
     Facilities                    35,775      5,507      66,101       14,924
     Personnel                     86,937     14,234     158,340       38,239
     General and administrative    19,946      2,628      36,654        8,013
     Amortization                   2,006        472       4,981        1,468
       Total operating costs and
          expenses                391,832     86,330     763,342      227,762

    OPERATING INCOME               90,614     15,162      33,258       94,616

    OTHER (INCOME) EXPENSE
     Interest - vehicle            35,473      6,579      63,268       18,542
     Interest - other               7,339      1,630      12,629        2,561
      Interest - restricted cash   (2,118)       266      (3,931)        (521)
     Interest - related party           0          0         118          118
       Total other (income)
        expense                    40,694      8,475      71,966       20,700

    INCOME BEFORE INCOME TAXES     49,920      6,687      55,908       12,558
    Provision for income taxes     20,967      2,047      23,454        4,395

    NET INCOME                    $28,953     $4,640     $24,313       $8,163

      Primary shares           25,340,000 11,175,000  19,324,000    8,675,000

    EPS                              1.14       0.42        1.68         0.94

    Fully diluted shares       30,992,000 11,196,000  24,393,000    8,820,000

    EPS                              0.98       0.41        1.48         0.93

SOURCE  Budget Group, Inc.