TULSA, Okla., Feb. 21, 2012 /PRNewswire/ -- Dollar Thrifty
Automotive Group, Inc. (NYSE: DTG) today reported results for the
fourth quarter and year ended December 31,
2011. Net income for the 2011 fourth quarter was
$33.9 million, or $1.08 per diluted share, compared to net income
of $12.5 million, or $0.41 per diluted share, in the fourth quarter of
2010. Net income for the fourth quarter of 2011 was negatively
impacted by $0.01 per diluted share
related to changes in fair value of derivatives, compared to a
favorable impact on net income of $0.14 per diluted share related to changes in
fair value of derivatives in the fourth quarter of 2010.
(Logo:
http://photos.prnewswire.com/prnh/20020412/DTGLOGO)
Non-GAAP net income for the 2011 fourth quarter was $34.1 million, or $1.09 per diluted share, compared to non-GAAP net
income of $8.3 million, or
$0.27 per diluted share, for the 2010
fourth quarter. Non-GAAP net income excludes the (increase)
decrease in fair value of derivatives and non-cash charges related
to impairments of long-lived assets, net of related tax impact.
The Company reported Corporate Adjusted EBITDA for the fourth
quarter of 2011 of $63.5 million, an
increase of 110 percent compared to $30.2
million reported for the fourth quarter of 2010. The
Company noted that Corporate Adjusted EBITDA in the fourth quarter
of 2010 was negatively impacted by $2.1
million of merger-related expenses, while no such expenses
were incurred in the fourth quarter of 2011.
"We are pleased to announce that for the second consecutive
year, the Company is reporting record earnings," said Scott L. Thompson, Chairman, President and Chief
Executive Officer. "During 2011, we benefitted from a robust
used vehicle market, a recovering travel market with increasing
demand for value-oriented product offerings, and our ongoing focus
on expense control and productivity initiatives."
For the quarter ended December 31,
2011, the Company's total revenue was $353.7 million, as compared to $349.1 million for the comparable 2010 period.
Vehicle rental revenues for the quarter were up 1.0 percent,
driven primarily by a 5.2 percent increase in rental days that was
partially offset by a 4.0 percent decrease in revenue per day.
Vehicle utilization for the fourth quarter of 2011 was 81.1
percent, up from 79.7 percent during last year's fourth quarter.
The average fleet for the quarter was up 3.4 percent.
Per vehicle depreciation cost totaled $218 per month in the fourth quarter of 2011
compared to $308 per vehicle per
month in the fourth quarter of 2010. The Company's base
depreciation rates continue to benefit from the overall strength of
the used vehicle market and the resulting favorable impact on
residual values. The Company also noted that gains on sales
of risk vehicles, a component of vehicle depreciation, totaled
$3.8 million in the fourth quarter of
2011, up from a loss of $0.1 million
in the fourth quarter of 2010.
Direct vehicle and operating expenses and selling, general and
administrative expenses declined to 60.2 percent of revenues for
the fourth quarter of 2011, compared to 61.5 percent of revenues in
the fourth quarter of 2010. The decrease in expenses was
primarily the result of favorable vehicle-related insurance costs,
personnel productivity initiatives and a decline in merger-related
expenses compared to the prior year. Interest expense
declined to $18.6 million in the
fourth quarter of 2011, a decline of $5.3
million from prior year levels.
Full Year Results
For the year ended December 31,
2011, net income was $159.6
million, or $5.11 per diluted
share, compared to $131.2 million, or
$4.34 per diluted share, for the year
ended December 31, 2010. Net
income in 2011 and 2010 included net favorable impacts of
$0.06 per diluted share and
$0.54 per diluted share,
respectively, related to favorable changes in fair value of
derivatives and long-lived asset impairments.
The Company noted that net income for the full year of 2011 was
negatively impacted by $2.7 million
of after-tax merger-related expenses, or $0.09 per diluted share, compared to $13.2 million, or $0.44 per diluted share, for the full year of
2010. The Company also noted that rental revenue increased
approximately one percent on a year-over-year basis, driven by a
3.8 percent increase in rental days, partially offset by a 2.9
percent decrease in revenue per day.
Non-GAAP net income for the year ended December 31, 2011 was $157.7 million, or $5.05 per diluted share, compared to non-GAAP net
income of $115.0 million, or
$3.80 per diluted share, for the same
period in 2010. Non-GAAP net income excludes the (increase)
decrease in fair value of derivatives and non-cash charges related
to the impairment of long-lived assets, net of related tax impact.
Excluding the impact of merger-related expenses mentioned
above, non-GAAP net income for the full year of 2011 would have
been $160.4 million, or $5.13 per diluted share, compared to $128.2 million, or $4.24 per diluted share, in the prior year
period.
Corporate Adjusted EBITDA for the year ended December 31, 2011, excluding merger-related
expenses, was $303.2 million, an
increase of approximately $45 million
from the $258.3 million reported for
the full year of 2010.
Liquidity and Capital Resources
During 2011, the Company repaid all of its outstanding corporate
debt totaling $143 million and fully
funded its previously announced $100
million forward stock repurchase agreement. The
Company ended the year with no corporate leverage and unrestricted
cash of $509 million.
Additionally, as of December 31,
2011, the Company had $353
million in restricted cash and investments primarily
available for the purchase of vehicles and/or repayment of vehicle
financing obligations.
The Company further strengthened its liquidity in 2011 by adding
or renewing fleet financing capacity totaling $1.5 billion. As a result of these actions,
the Company noted that it has effectively pre-funded its upcoming
fleet debt maturities for 2012, and has significantly extended its
fleet financing maturity profile into 2013 and beyond.
On February 16, 2012, the Company
successfully completed a new five-year $450
million senior secured credit facility that increased the
Company's available revolving credit capacity by approximately
$220 million, and extended the
maturity date of the senior secured credit facility to 2017 from
2013. In addition to the incremental financing capacity
available for general corporate purposes, the new facility provides
the Company with greatly improved flexibility to manage growth
initiatives and capital structure initiatives. The new
facility contains various financial and other covenants, including,
among others, limitations on liens, investments, restricted
payments (such as share repurchases and dividend payments), and the
incurrence of debt, as well as requirements to maintain a minimum
corporate interest coverage ratio, minimum Corporate Adjusted
EBITDA and a maximum corporate leverage ratio.
The Company's tangible net worth at December 31, 2011 was $586
million, after considering the impact of the $100 million share repurchase agreement executed
and fully funded in the fourth quarter.
Share Repurchase Program
During February 2012, the Company
completed its previously announced $100
million forward stock repurchase agreement, repurchasing
1,451,193 shares of Company stock, or approximately 5 percent of
the Company's outstanding shares, at an average price of
approximately $68.91. After
giving effect to the share repurchase, the Company noted it now has
approximately 28.1 million common shares outstanding.
The Company's previously authorized share repurchase program
provides the Company with the ability to repurchase up to an
additional $300 million of shares in
future periods. The share repurchase program is discretionary
and has no expiration date. The timing and amount of future
share repurchases will be based on market conditions, limitations
in the senior secured credit facility and other factors. The
Company may repurchase shares under forward stock repurchase
agreements, accelerated share repurchase programs, directly in the
open market, in privately negotiated transactions, pursuant to
derivative instruments or plans complying with SEC Rule 10b5-1 or
other types of transactions and arrangements. The Company
currently expects to repurchase shares in 2012; however, the share
repurchase program may be increased, suspended or discontinued at
any time.
2012 Outlook
The Company is providing the following guidance for 2012 with
respect to key drivers of its business model:
- Vehicle rental revenues are projected to be up 3 – 5 percent
compared to 2011.
- Vehicle depreciation costs for the full year of 2012 are
expected to be within a range of $220 to
$240 per vehicle per month.
- The Company is utilizing a Manheim index of 124 for the full
year of 2012 for purposes of estimating residual values and
depreciation rates.
- Gains on sales of risk vehicles in 2012 are expected to
moderate significantly on both an aggregate dollar and per unit
basis compared to vehicle gains recorded in 2011. This
decrease is the result of continued refinements of residual value
assumptions to more closely align with market conditions at the
time of sale.
- Interest expense is expected to decline significantly on a
year-over-year basis, primarily as a result of lower overall
interest rates on the Company's fleet financing facilities as
compared to the fixed rates on matured and maturing financing
facilities, and the repayment of all of the Company's corporate
debt in 2011. These decreases will be partially offset by
higher rates on the newly completed revolver and the expected
re-leveraging of our Canadian fleet.
Based on the above expectations and the additional information
outlined below, for the full year of 2012, the Company is targeting
earnings per share (EPS) to be within a range of $4.60 to $5.20 per diluted share, and Corporate
Adjusted EBITDA to be within a range of $275
million to $300 million.
Based on its expectations for a significant variance in earnings
on a year-over-year basis, the Company is also providing limited
guidance for the first quarter of 2012. The Company noted
that it expects EPS to be within a range of $1.15 to $1.40 per diluted share, and Corporate
Adjusted EBITDA to be within a range of $70
million to $80 million in the first quarter of 2012.
EPS and Corporate Adjusted EBITDA in the first quarter of
2011 were $0.53 per diluted share and
$36.3 million, respectively. The
Company also noted that it expects fleet costs for the first
quarter to be within a range of $150 to
$170 per unit per month, based on anticipated remarketing
activity, and lower overall depreciation rates on its fleet.
"We expect an improving U.S. travel market and a solid used
vehicle market in 2012. Our well established value-oriented
rental car offerings are positioned well for a slow growth
recovery. The Company strives for continuous improvement in
all aspects of its operations on a daily basis, and we will
continue to push for improvements in profitability, productivity
and customer service in 2012. As we have stated before, our
primary objective is to maximize return on assets for our
shareholders, and we will consider all potential options to achieve
that objective," said Thompson.
Web cast and conference call information
The Dollar Thrifty Automotive Group, Inc. fourth quarter and
full year 2011 earnings conference call will be held on Tuesday,
February 21st, at 8:00 a.m. (CST).
Those interested in listening to the conference call live may
access the call via Web cast at the corporate Web site,
www.dtag.com, or by dialing 888-603-9215 (domestic) or 203-827-7046
(international) using the pass code "Dollar Thrifty." An audio
replay of the conference call will be available through
March 6, 2012, by calling
800-677-0973 (domestic) or 203-369-3652 (international). The replay
will also be available via the corporate Web site for one year.
About Dollar Thrifty Automotive Group, Inc.
Through its Dollar Rent A Car and Thrifty Car Rental brands, the
Company has been serving value-conscious leisure and business
travelers since 1950. The Company maintains a strong presence
in domestic leisure travel in virtually all of the top U.S. and
Canadian airport markets, and also derives a significant portion of
its revenue from international travelers to the U.S. under
contracts with various international tour operators. Dollar
and Thrifty have approximately 280 corporate locations in
the United States and Canada, with approximately 5,900 employees
located mainly in North America.
In addition to its corporate operations, the Company
maintains global service capabilities through an expansive
franchise network of approximately 1,300 franchises in 82
countries. For additional information, visit www.dtag.com or
the brand sites at www.dollar.com and www.thrifty.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" about
our expectations, plans and performance. These statements use such
words as "may," "will," "expect," "believe," "intend," "should,"
"could," "anticipate," "estimate," "forecast," "project," "plan"
and similar expressions. These statements do not guarantee future
performance and Dollar Thrifty Automotive Group, Inc. assumes no
obligation to update them. Risks and uncertainties relating
to our business that could materially affect our future results
include:
- constraints on our growth and profitability given the
challenges we face in increasing our market share in the key
airport and local markets we serve, high barriers to entry in the
insurance replacement market, capital and other constraints on
expanding company-owned stores internationally and the challenges
we would face in further reducing our expenses;
- the impact of the continuing volatility in the global financial
and credit markets, particularly in certain countries in the
European Union, and concerns about global economic prospects that
could materially adversely affect consumer discretionary spending,
including for international inbound travel to the United States and for leisure travel more
generally, on which we are substantially dependent;
- the impact of pending and future U.S. governmental action to
address budget deficits through reductions in spending and similar
austerity measures, which could materially adversely affect
unemployment rates and consumer spending levels;
- the continuing significant political unrest and other concerns
involving certain oil-producing countries, which has contributed to
price volatility for petroleum products, and in recent periods
higher average gasoline prices, which could affect both broader
economic conditions and consumer spending levels;
- the impact of pricing and other actions by competitors;
- our ability to manage our fleet mix to match demand and meet
our target for vehicle depreciation costs, particularly in light of
the significant level of risk vehicles (i.e., those vehicles not
acquired through a guaranteed residual value program) in our fleet
and our exposure to the used vehicle market;
- the cost and other terms of acquiring and disposing of
automobiles and the impact of conditions in the used vehicle market
on our vehicle cost, including the impact on vehicle depreciation
costs in 2012 based on pricing volatility in the used vehicle
market;
- our ability to reduce our fleet capacity as and when projected
by our plans;
- the continuing strength of the U.S. automotive industry on
which we depend for vehicle supply;
- airline travel patterns, including disruptions or reductions in
air travel resulting from capacity reductions, pricing actions,
severe weather conditions, industry consolidation or other events,
particularly given our dependence on leisure travel;
- access to reservation distribution channels, particularly as
the role of the Internet and mobile applications increases in the
marketing and sale of travel-related services;
- the effectiveness of actions we take to maintain a low cost
structure and to manage liquidity;
- the impact of repurchases of our common stock pursuant to our
share repurchase program;
- our ability to obtain cost-effective financing as needed
without unduly restricting our operational flexibility;
- our ability to comply with financial covenants, and the impact
of those covenants on our operating and financial flexibility;
- whether our preliminary expectations about our federal income
tax position, after giving effect to the impact of the Tax Relief,
Unemployment Insurance Reauthorization and Job Creation Act of
2010, are affected by changes in our expected fleet size or
operations or further legislative initiatives relating to taxes in
the United States or
elsewhere;
- our ability to continue to defer the reversal of prior period
tax deferrals and the availability of accelerated depreciation
payments in future periods, the lack of either of which could
result in material cash federal income tax payments in future
periods;
- the cost of regulatory compliance, costs and other effects of
potential future initiatives, including those directed at climate
change and its effects, and the costs and outcome of pending
litigation;
- disruptions in the operation or development of information and
communication systems that we rely on, including those relating to
methods of payment;
- local market conditions where we and our franchisees do
business, including whether franchisees will continue to have
access to capital as needed; and
- the impact of other events that can disrupt consumer travel,
such as natural and man-made catastrophes, pandemics, social unrest
and actual and perceived threats or acts of terrorism.
Forward-looking statements should be considered in light of
information in this press release and other filings we make with
the Securities and Exchange Commission.
Table
1
|
|
|
|
|
|
|
|
|
|
|
|
Dollar
Thrifty Automotive Group, Inc.
|
|
Consolidated
Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands, except share and per share data)
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
As %
of
|
|
|
|
December
31,
|
|
Total
revenues
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Vehicle rentals
|
$
338,283
|
|
$
334,994
|
|
95.6%
|
|
96.0%
|
|
|
Other
|
15,447
|
|
14,065
|
|
4.4%
|
|
4.0%
|
|
|
Total
revenues
|
353,730
|
|
349,059
|
|
100.0%
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
167,669
|
|
168,105
|
|
47.4%
|
|
48.2%
|
|
|
Vehicle depreciation and lease
charges, net
|
66,974
|
|
91,140
|
|
18.9%
|
|
26.1%
|
|
|
Selling, general and
administrative
|
45,402
|
|
46,500
|
|
12.8%
|
|
13.3%
|
|
|
Interest expense, net
|
18,563
|
|
23,911
|
|
5.3%
|
|
6.9%
|
|
|
Long-lived asset
impairment
|
-
|
|
115
|
|
0.0%
|
|
0.0%
|
|
|
Total costs and
expenses
|
298,608
|
|
329,771
|
|
84.4%
|
|
94.5%
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in fair
value of derivatives
|
123
|
|
(7,356)
|
|
0.0%
|
|
(2.1%)
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
54,999
|
|
26,644
|
|
15.6%
|
|
7.6%
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
21,098
|
|
14,148
|
|
6.0%
|
|
4.0%
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
33,901
|
|
$
12,496
|
|
9.6%
|
|
3.6%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
1.16
|
|
$
0.44
|
|
|
|
|
|
|
Diluted
|
$
1.08
|
|
$
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number
|
|
|
|
|
|
|
|
|
of shares
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
29,239,530
|
|
28,699,875
|
|
|
|
|
|
|
Diluted
|
31,311,764
|
|
30,369,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended
|
|
As %
of
|
|
|
|
December
31,
|
|
Total
revenues
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Vehicle rentals
|
$ 1,484,324
|
|
$ 1,473,023
|
|
95.8%
|
|
95.8%
|
|
|
Other
|
64,604
|
|
64,137
|
|
4.2%
|
|
4.2%
|
|
|
Total
revenues
|
1,548,928
|
|
1,537,160
|
|
100.0%
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
751,468
|
|
745,535
|
|
48.5%
|
|
48.5%
|
|
|
Vehicle depreciation and lease
charges, net
|
270,957
|
|
299,200
|
|
17.5%
|
|
19.5%
|
|
|
Selling, general and
administrative
|
191,043
|
|
209,341
|
|
12.3%
|
|
13.6%
|
|
|
Interest expense, net
|
77,462
|
|
89,303
|
|
5.0%
|
|
5.8%
|
|
|
Long-lived asset
impairment
|
-
|
|
1,057
|
|
0.0%
|
|
0.1%
|
|
|
Total costs and
expenses
|
1,290,930
|
|
1,344,436
|
|
83.3%
|
|
87.5%
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in fair
value of derivatives
|
(3,244)
|
|
(28,694)
|
|
(0.2%)
|
|
(1.9%)
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
261,242
|
|
221,418
|
|
16.9%
|
|
14.4%
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
101,692
|
|
90,202
|
|
6.6%
|
|
5.9%
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
159,550
|
|
$
131,216
|
|
10.3%
|
|
8.5%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
(a)
|
|
|
|
|
|
|
|
|
|
Basic
|
$
5.51
|
|
$
4.58
|
|
|
|
|
|
|
Diluted
|
$
5.11
|
|
$
4.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number
|
|
|
|
|
|
|
|
|
of shares
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
28,965,187
|
|
28,623,108
|
|
|
|
|
|
|
Diluted
|
31,241,241
|
|
30,245,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The underlying diluted per share
information is calculated from the weighted average common and
common stock equivalents outstanding during each quarter, which may
fluctuate based on quarterly income levels and market prices.
Therefore, the sum of the quarters' per share information may
not equal the total year amounts.
|
|
|
|
|
|
|
|
Table
2
|
|
|
|
|
|
|
|
Dollar
Thrifty Automotive Group, Inc.
|
|
Selected
Operating and Financial Data
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
|
December 31,
2011
|
|
December 31,
2011
|
|
|
|
|
|
|
|
OPERATING DATA:
|
|
|
|
|
Vehicle Rental
Data:
|
|
|
|
|
|
Average number of vehicles
operated
|
101,175
|
|
107,154
|
|
|
% change from prior
year
|
3.4%
|
|
4.8%
|
|
|
Number of rental days
|
7,552,240
|
|
31,482,339
|
|
|
% change from prior
year
|
5.2%
|
|
3.8%
|
|
|
Vehicle utilization
|
81.1%
|
|
80.5%
|
|
|
Percentage points change
from prior year
|
1.4 p.p.
|
|
(0.8) p.p.
|
|
|
Average revenue per
day
|
$44.79
|
|
$47.15
|
|
|
% change from prior
year
|
(4.0%)
|
|
(2.9%)
|
|
|
Monthly average revenue per
vehicle
|
$1,115
|
|
$1,154
|
|
|
% change from prior
year
|
(2.3%)
|
|
(3.8%)
|
|
|
|
|
|
|
|
|
Average depreciable
fleet
|
102,195
|
|
108,127
|
|
|
% change from prior
year
|
3.6%
|
|
4.8%
|
|
|
Monthly average depreciation
(net) per vehicle
|
$218
|
|
$209
|
|
|
% change from prior
year
|
(29.2%)
|
|
(13.6%)
|
|
|
|
|
|
|
|
FINANCIAL DATA: (in millions)
(unaudited)
|
|
|
|
|
|
Non-vehicle depreciation and
amortization
|
$
7
|
|
$
27
|
|
|
Non-vehicle interest
expense
|
2
|
|
11
|
|
|
Non-vehicle interest
income
|
-
|
|
(1)
|
|
|
Non-vehicle capital
expenditures
|
6
|
|
17
|
|
|
Cash paid for/(refund of) income
taxes
|
1
|
|
(32)
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected
Balance Sheet Data
|
|
(In
millions)
|
|
|
|
|
|
December
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
(b)
|
$
509
|
|
$
563
|
|
|
Restricted cash and
investments
|
353
|
|
277
|
|
|
Revenue-earning vehicles,
net
|
1,468
|
|
1,342
|
|
|
|
|
|
|
|
|
Vehicle debt
|
1,400
|
|
1,249
|
|
|
Non-vehicle debt (corporate
debt)
|
-
|
|
148
|
|
|
Stockholders' equity
|
608
|
|
539
|
|
|
|
|
|
|
|
|
Tangible Net
Worth Calculation
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
$
608
|
|
$
539
|
|
|
Less: Software,
net
|
(22)
|
|
(24)
|
|
|
Tangible net worth
|
$
586
|
|
$
515
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Under the terms of certain of
its financing arrangements, the Company was required to maintain a
minimum cash balance of $100 million at all times. For the 2010
reporting period, such minimum balance is included in cash and cash
equivalents herein. In February 2011, the requirement to
maintain such minimum cash balance was eliminated.
|
|
|
|
Table
3
|
|
|
|
Dollar
Thrifty Automotive Group, Inc.
|
|
Non-GAAP
Measures
|
|
|
|
Non-GAAP pretax income, Non-GAAP
net income and Non-GAAP EPS exclude the impact of the
(increase) decrease in fair value of derivatives and the impact of
long-lived asset impairments, net of related tax impact (as
applicable), from the reported GAAP measures and are further
adjusted to exclude merger-related expenses. Due to
volatility resulting from the mark-to-market treatment of the
derivatives and the non-operating nature of the non-cash
impairments and merger-related expenses, the Company believes these
non-GAAP measures provide an important assessment of year-over-year
operating results. See tables below for a reconciliation of
non-GAAP to GAAP results.
|
|
|
The following table reconciles
reported GAAP pretax income per the income statement to non-GAAP
pretax income:
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
(in
thousands)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes - as
reported
|
$ 54,999
|
|
$ 26,644
|
|
$ 261,242
|
|
$ 221,418
|
|
(Increase) decrease in fair
value of derivatives
|
123
|
|
(7,356)
|
|
(3,244)
|
|
(28,694)
|
|
Long-lived asset
impairment
|
-
|
|
115
|
|
-
|
|
1,057
|
|
Pretax income -
non-GAAP
|
$ 55,122
|
|
$ 19,403
|
|
$ 257,998
|
|
$ 193,781
|
|
Merger-related
expenses
|
-
|
|
2,146
|
|
4,600
|
|
22,605
|
|
Non-GAAP pretax income,
excluding merger-related expenses
|
$ 55,122
|
|
$ 21,549
|
|
$ 262,598
|
|
$ 216,386
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles
reported GAAP net income per the income statement to non-GAAP net
income:
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
(in
thousands)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Net income - as
reported
|
$ 33,901
|
|
$ 12,496
|
|
$ 159,550
|
|
$ 131,216
|
|
(Increase) decrease in fair
value of derivatives, net of tax (c)
|
163
|
|
(4,313)
|
|
(1,811)
|
|
(16,826)
|
|
Long-lived asset impairment, net
of tax (d)
|
-
|
|
70
|
|
-
|
|
645
|
|
Net income - non-GAAP
|
$ 34,064
|
|
$ 8,253
|
|
$ 157,739
|
|
$ 115,035
|
|
Merger-related expenses, net of
tax (e)
|
-
|
|
1,251
|
|
2,679
|
|
13,172
|
|
Non-GAAP net income, excluding
merger-related expenses
|
$ 34,064
|
|
$ 9,504
|
|
$ 160,418
|
|
$ 128,207
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles
reported GAAP diluted earnings per share ("EPS") to non-GAAP
diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
EPS, diluted - as
reported
|
$ 1.08
|
|
$ 0.41
|
|
$
5.11
|
|
$
4.34
|
|
EPS impact of (increase)
decrease in fair value of derivatives, net of tax
|
0.01
|
|
(0.14)
|
|
(0.06)
|
|
(0.56)
|
|
EPS impact of long-lived asset
impairment, net of tax
|
-
|
|
-
|
|
-
|
|
0.02
|
|
EPS, diluted - non-GAAP
(f)
|
$ 1.09
|
|
$ 0.27
|
|
$
5.05
|
|
$
3.80
|
|
EPS impact of merger-related
expenses, net of tax
|
-
|
|
0.04
|
|
0.09
|
|
0.44
|
|
Non-GAAP diluted EPS, excluding
merger-related expenses (f)
|
$ 1.09
|
|
$ 0.31
|
|
$
5.13
|
|
$
4.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
The tax effect of the (increase)
decrease in fair value of derivatives is calculated using the
entity-specific, U.S. federal and blended state tax rate applicable
to the derivative instruments which amounts are ($40,000) and
($3,043,000) for the three months ended December 31, 2011 and 2010,
respectively, and ($1,433,000) and ($11,868,000) for the year ended
December 31, 2011 and 2010, respectively. The three months
ended December 31, 2011, includes $91,000 related to a cumulative
tax rate adjustment.
|
|
(d)
|
The tax effect of the long-lived
asset impairment is calculated using the tax-deductible portion of
the impairment and applying the entity-specific, U.S. federal and
blended state tax rate which amounts are $45,000 and $412,000 for
the three months and year ended December 31, 2010,
respectively.
|
|
(e)
|
Merger-related expenses include
legal, litigation, advisory and other fees related to a potential
merger transaction. The tax effect of the merger-related
expenses is calculated using the entity-specific, U.S. federal and
blended state tax rate applicable to the merger-related expenses
which amounts are $895,000 for the three months ended December 31,
2010, and $1,921,000 and $9,433,000 for the year ended December 31,
2011 and 2010, respectively.
|
|
(f)
|
Since each category of EPS is
computed independently for each period, total per share amounts may
not equal the sum of the respective categories.
|
|
|
|
Table
4
|
|
|
|
Dollar
Thrifty Automotive Group, Inc.
|
|
Non-GAAP
Measures
|
|
|
|
Corporate Adjusted
EBITDA means earnings, excluding the
impact of the (increase) decrease in fair value of derivatives,
before non-vehicle interest expense, income taxes, non-vehicle
depreciation, amortization, and certain other items as shown below.
The Company believes Corporate Adjusted EBITDA is important
as it provides a supplemental measure of the Company's liquidity by
adjusting earnings to exclude certain non-cash items, taxes and
corporate-level capital structure decisions (i.e. non-vehicle
interest), thus, allowing the Company's management, including the
chief operating decision maker, as well as investors and analysts,
to evaluate the Company's operating cash flows based on the core
operations of the Company. Additionally, the Company believes
Corporate Adjusted EBITDA is a relevant measure of operating
performance in providing a measure of profitability that focuses on
the core operations of the Company while excluding certain items
that do not directly reflect ongoing operating performance.
The Company's management, including the chief operating
decision maker, uses Corporate Adjusted EBITDA to evaluate the
Company's performance and in preparing monthly operating
performance reviews and annual operating budgets. The items
excluded from Corporate Adjusted EBITDA, but included in the
calculation of the Company's reported net income, are significant
components of its consolidated statements of income, and must be
considered in performing a comprehensive assessment of overall
financial performance. Corporate Adjusted EBITDA
Margin provides a measure of the
Company's operating profitability. Corporate Adjusted EBITDA
is not defined under GAAP and should not be considered as an
alternative measure of the Company's net income, cash flow or
liquidity. Corporate Adjusted EBITDA and Corporate Adjusted
EBITDA Margin amounts presented may not be comparable to similar
measures disclosed by other companies.
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
(in
thousands)
|
|
(in
thousands)
|
|
|
|
Reconciliation of Net Income
to
|
|
|
|
|
|
|
|
|
|
|
Corporate Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income - as
reported
|
$
33,901
|
|
$ 12,496
|
|
$
159,550
|
|
$ 131,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in fair
value of derivatives
|
123
|
|
(7,356)
|
|
(3,244)
|
|
(28,694)
|
|
|
|
Non-vehicle interest
expense
|
1,646
|
|
2,346
|
|
10,699
|
|
9,647
|
|
|
|
Income tax expense
|
21,098
|
|
14,148
|
|
101,692
|
|
90,202
|
|
|
|
Non-vehicle
depreciation
|
4,822
|
|
5,082
|
|
19,381
|
|
20,190
|
|
|
|
Amortization
|
1,802
|
|
1,818
|
|
7,505
|
|
7,290
|
|
|
|
Non-cash stock
incentives
|
110
|
|
1,531
|
|
3,234
|
|
4,785
|
|
|
|
Long-lived asset
impairment
|
-
|
|
115
|
|
-
|
|
1,057
|
|
|
|
Other
|
(6)
|
|
(3)
|
|
(249)
|
|
(25)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Adjusted
EBITDA
|
$
63,496
|
|
$ 30,177
|
|
$
298,568
|
|
$ 235,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Corporate
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
to Cash Flows From Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Adjusted
EBITDA
|
$
63,496
|
|
$ 30,177
|
|
$
298,568
|
|
$ 235,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle depreciation, net of
gains/losses from disposal
|
66,971
|
|
91,131
|
|
270,927
|
|
299,149
|
|
|
|
Non-vehicle interest
expense
|
(1,646)
|
|
(2,346)
|
|
(10,699)
|
|
(9,647)
|
|
|
|
Change in assets and liabilities
and other
|
(20,011)
|
|
(24,724)
|
|
8,498
|
|
(63,229)
|
|
|
|
Net cash provided
by operating activities
|
$
108,810
|
|
$ 94,238
|
|
$
567,294
|
|
$ 461,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Memo:
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by / (used in)
investing activities
|
$
(76,093)
|
|
$ 88,441
|
|
$
(402,501)
|
|
$ (59,094)
|
|
|
|
Net cash used in financing
activities
|
$
(23,542)
|
|
$ (138,533)
|
|
$
(119,298)
|
|
$ (340,098)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
|
Full
Year
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2010
|
|
|
(in
millions)
|
|
(in
millions)
|
|
Reconciliation of Pretax Income
to
|
(forecasted)
|
|
(actual)
|
|
(forecasted)
|
|
(actual)
|
|
(actual)
|
|
Corporate Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax income
|
$60 - $70
|
|
$
29
|
|
$231 - $256
|
|
$
261
|
|
$
221
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in fair
value of derivatives (amounts not forecasted for 2012)
|
-
|
|
(3)
|
|
-
|
|
(3)
|
|
(29)
|
|
Non-vehicle interest
expense
|
2
|
|
2
|
|
10
|
|
11
|
|
10
|
|
Non-vehicle
depreciation
|
4
|
|
5
|
|
19
|
|
19
|
|
20
|
|
Amortization
|
2
|
|
2
|
|
7
|
|
7
|
|
7
|
|
Non-cash stock
incentives
|
2
|
|
1
|
|
8
|
|
3
|
|
5
|
|
Long-lived asset
impairment
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
Merger-related expenses
(g)
|
-
|
|
-
|
|
-
|
|
5
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Adjusted EBITDA,
excluding merger-related expenses
|
$70-$80
|
|
$
36
|
|
$275-$300
|
|
$
303
|
|
$
258
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Adjusted EBITDA
Margin
|
|
(In thousands, except
percent)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Adjusted EBITDA
|
$
63,496
|
|
$ 30,177
|
|
$
298,568
|
|
$ 235,668
|
|
|
|
Total Revenues
|
353,730
|
|
349,059
|
|
1,548,928
|
|
1,537,160
|
|
|
|
Corporate Adjusted EBITDA
Margin
|
18.0%
|
|
8.6%
|
|
19.3%
|
|
15.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g)
|
Merger-related expenses include
legal, litigation, advisory and other fees related to a potential
merger transaction.
|
|
|
|
SOURCE Dollar Thrifty Automotive Group, Inc.