ESTERO, Fla., Aug. 8, 2017 /PRNewswire/ -- Hertz Global
Holdings, Inc. (NYSE: HTZ) ("Hertz Global" or the "Company") today
reported a second quarter 2017 net loss from continuing operations
of $158 million, or $1.90 per diluted share, including $54 million of impairment charges, compared with
a net loss from continuing operations of $28
million, or $0.33 per diluted
share, during the second quarter 2016. On an adjusted basis, the
Company reported a net loss for the second quarter 2017 of
$52 million, or $0.63 per diluted share, compared with net income
of $35 million, or $0.41 per diluted share, for the same period last
year.
Total revenues for the second quarter 2017 were $2.2 billion, a 2% decline versus the second
quarter 2016. Loss from continuing operations before income taxes
for second quarter 2017 was $245
million, including $86 million
of impairment charges, versus $35
million in the same period last year. Adjusted Corporate
EBITDA for the second quarter 2017 was $35
million, compared to $184
million in the same period last year.
"We have made significant progress in the first half of the
year, executing on our operating turnaround plan. Of course, the
hard work always comes before the pay off as reflected in our
second quarter results, where increased spending to fix areas of
weakness and invest in areas of opportunity were exacerbated by a
challenging vehicle residual environment in the U.S.," said
Kathryn V. Marinello, president and
chief executive officer of Hertz. "On the upside, we have
now completed our U.S. fleet transformation, redesigned 37
Hertz airport locations for Ultimate Choice, updated our financial
and revenue management systems, and introduced new management tools
and resources to drive service excellence. Admittedly, we still
have a lot of work to do, but these early wins are evidence that we
have the right plan in place to ultimately achieve best-in-class
outcomes."
U.S. RENTAL CAR
("U.S. RAC") SUMMARY
|
|
U.S.
RAC(1)
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2017
|
|
2016
|
|
|
Total
Revenues
|
$
|
1,519
|
|
|
$
|
1,584
|
|
|
(4)%
|
|
Depreciation of
revenue earning vehicles and lease charges, net
|
$
|
524
|
|
|
$
|
417
|
|
|
26%
|
|
Income (loss) from
continuing operations before income taxes
|
$
|
(146)
|
|
|
$
|
104
|
|
|
NM
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income (loss)
|
$
|
(37)
|
|
|
$
|
143
|
|
|
NM
|
|
Adjusted pre-tax
margin
|
(2)%
|
|
|
9%
|
|
|
NM
|
bps
|
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA
|
$
|
(22)
|
|
|
$
|
168
|
|
|
NM
|
|
Adjusted Corporate
EBITDA margin
|
(1)%
|
|
|
11%
|
|
|
NM
|
bps
|
|
|
|
|
|
|
|
Average
vehicles
|
495,000
|
|
|
500,000
|
|
|
(1)%
|
|
Transaction days (in
thousands)
|
36,233
|
|
|
37,190
|
|
|
(3)%
|
|
Total RPD (in whole
dollars)
|
$
|
41.26
|
|
|
$
|
42.11
|
|
|
(2)%
|
|
Total RPU (in whole
dollars)
|
$
|
1,007
|
|
|
$
|
1,044
|
|
|
(4)%
|
|
Net depreciation per
unit per month (in whole dollars)
|
$
|
353
|
|
|
$
|
278
|
|
|
27%
|
|
NM - Not Meaningful
Total U.S. RAC revenues were $1.5 billion in the
second quarter 2017, a decrease of 4%, versus the same period
last year. Transaction days decreased by 3% year-over-year as
compared to a strong second quarter 2016, which was driven by
replacement rentals from unusually high customer vehicle recall
activity. Pricing, as measured by Total RPD, decreased by 2% in the
quarter, driven by a change in customer mix year-over-year and
weaker ancillary revenues.
Second quarter U.S. RAC net vehicle depreciation per month
increased 27% versus the same period last year to $353 per unit primarily driven by declining
residual values, accelerated vehicle disposition timing and fleet
quality and mix investments. Despite the decrease in industry
residual values, the Company stayed on course with its fleet
optimization plan, selling 35% more vehicles year-over-year and
onboarding a richer mix of model year 2017 vehicles. As
planned, the Company reduced its total average fleet by 1% in the
second quarter compared with a year earlier, as the number of core
rental vehicles declined by 3%, partially offset by an increase in
the vehicles dedicated to the ride hailing fleet. While utilization
declined by 130 basis points in the quarter, the Company has made
early progress toward driving customer satisfaction and improving
profitability longer term. Its goal of reducing its mix of
compact cars to 16% of the total U.S. fleet from 21% a year ago was
met at quarter end, better reflecting customer preference.
Also, the Company continued to roll out its Ultimate Choice
program, where customers are able to choose their preferred
vehicle, on site, with no wait.
Second quarter 2017 Adjusted Corporate EBITDA for U.S. RAC was a
negative $22 million, a $190 million decline versus the same period last
year. In addition to revenue pressure and increased fleet costs,
the reduction was impacted by investments related to service-level
improvements, systems enhancements and brand development
initiatives.
INTERNATIONAL
RENTAL CAR ("INTERNATIONAL RAC") SUMMARY
|
|
International
RAC(1)
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2017
|
|
2016
|
|
|
Total
Revenues
|
$
|
543
|
|
|
$
|
540
|
|
|
1
|
%
|
|
Depreciation of
revenue earning vehicles and lease charges, net
|
$
|
100
|
|
|
$
|
98
|
|
|
2
|
%
|
|
Income (loss) from
continuing operations before income taxes
|
$
|
43
|
|
|
$
|
29
|
|
|
48
|
%
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income (loss)
|
$
|
56
|
|
|
$
|
34
|
|
|
65
|
%
|
|
Adjusted pre-tax
margin
|
10
|
%
|
|
6
|
%
|
|
400
|
|
bps
|
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA
|
$
|
63
|
|
|
$
|
42
|
|
|
50
|
%
|
|
Adjusted Corporate
EBITDA margin
|
12
|
%
|
|
8
|
%
|
|
380
|
|
bps
|
|
|
|
|
|
|
|
Average
vehicles
|
186,100
|
|
|
178,600
|
|
|
4
|
%
|
|
Transaction days (in
thousands)
|
13,235
|
|
|
12,511
|
|
|
6
|
%
|
|
Total RPD (in whole
dollars)
|
$
|
39.29
|
|
|
$
|
39.88
|
|
|
(1)
|
%
|
|
Total RPU (in whole
dollars)
|
$
|
931
|
|
|
$
|
931
|
|
|
—
|
%
|
|
Net depreciation per
unit per month (in whole dollars)
|
$
|
172
|
|
|
$
|
168
|
|
|
2
|
%
|
|
The Company's International RAC segment revenues were
$543 million in the second quarter
2017, an increase of 1% from the second quarter 2016. Excluding an
$18 million unfavorable impact of
foreign currency exchange rates, revenues increased 4% driven by a
6% increase in transaction days, partially offset by a 1% decrease
in Total RPD.
Second quarter 2017 Adjusted Corporate EBITDA for International
RAC was $63 million, a 50% increase
from the same period last year. The year-over-year increase
reflects a $20 million charge taken
in the second quarter of 2016 related to adverse public liability
and property damage claims experience and case development that did
not reoccur this year as a result of actions taken by management to
improve claims handling and changes in business practices.
All Other
Operations(1)
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in
millions)
|
2017
|
|
2016
|
|
|
Total
Revenues
|
$
|
162
|
|
|
$
|
146
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income (loss)
|
$
|
19
|
|
|
$
|
17
|
|
|
12
|
%
|
|
Adjusted pre-tax
margin
|
12
|
%
|
|
12
|
%
|
|
10
|
|
bps
|
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA
|
$
|
17
|
|
|
$
|
16
|
|
|
6
|
%
|
|
Adjusted Corporate
EBITDA margin
|
10
|
%
|
|
11
|
%
|
|
(50)
|
|
bps
|
|
|
|
|
|
|
|
Average vehicles -
Donlen
|
206,200
|
|
|
166,900
|
|
|
24
|
%
|
|
All Other Operations, which is primarily comprised of the
Company's Donlen leasing operations, reported an 11% increase in
total revenues for the second quarter 2017. Adjusted Corporate
EBITDA for the All Other Operations segment was $17 million for the second quarter 2017, which is
an increase of 6% versus second quarter last year.
OUTLOOK
In the U.S. rental car segment, the Company is
encouraged by preliminary third quarter 2017 total revenue per
day trends. In July, total revenue per day is expected to have
increased by approximately 3% compared with July 2016. July transaction days are estimated to
have declined by about 4% as the Company targets higher-quality
revenue. With only approximately 55% of reservations booked, August
is less clear, but early indications suggest trends similar to
July. September is expected to be seasonally weaker, but the
Company will continue to focus on fleet capacity discipline and
revenue quality.
In the International rental car segment, the terrorist event in
early June does not seem to have impacted reservation trends for
Europe in the third quarter 2017
peak summer season.
(1) Adjusted pre-tax income (loss), adjusted pre-tax margin,
Adjusted Corporate EBITDA, Adjusted Corporate EBITDA margin,
adjusted net income (loss) and adjusted diluted earnings per share
are non-GAAP measures. Average vehicles, transaction days,
Total RPD, Total RPU and net depreciation per unit per month are
key metrics. See the accompanying Supplemental Schedules and
Definitions for the reconciliations and definitions for each of
these non-GAAP measures and key metrics and the reason the
Company's management believes that this information is useful to
investors.
RESULTS OF THE HERTZ CORPORATION
The GAAP and Non-GAAP profitability metrics for Hertz Global's
operating subsidiary, The Hertz Corporation ("Hertz"), are
materially the same as those for Hertz Global.
EARNINGS WEBCAST INFORMATION
Hertz Global's second quarter 2017 live webcast discussion will
be held on August 8, 2017, at
5:00 p.m. Eastern. The earnings
release and related supplemental schedules containing the
reconciliations of non-GAAP measures will be available on our
website, IR.Hertz.com.
SELECTED FINANCIAL AND OPERATING DATA, SUPPLEMENTAL SCHEDULES
AND DEFINITIONS
Following are tables that present selected financial and
operating data of Hertz Global. Also included are Supplemental
Schedules which are provided to present segment results and
reconciliations of non-GAAP measures to their most comparable GAAP
measure. Following the Supplemental Schedules, the Company provides
definitions for terminology used throughout this press release.
ABOUT HERTZ
The Hertz Corporation, a subsidiary of Hertz Global Holdings,
Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands
in approximately 9,700 corporate and franchisee locations
throughout North America,
Europe, The Caribbean, Latin
America, Africa, the
Middle East, Asia, Australia and New
Zealand. The Hertz Corporation is one of the largest
worldwide airport general use vehicle rental companies, and the
Hertz brand is one of the most recognized in the world. Product and
service initiatives such as Hertz Gold Plus Rewards, Ultimate
Choice, Carfirmations, Mobile Wi-Fi and unique vehicles offered
through the Adrenaline, Dream, Green and Prestige Collections set
Hertz apart from the competition. Additionally, The Hertz
Corporation owns the vehicle leasing and fleet management leader
Donlen Corporation, operates the Firefly vehicle rental brand and
Hertz 24/7 car sharing business in international markets and sells
vehicles through Hertz Car Sales. For more information about The
Hertz Corporation, visit: www.hertz.com.
CAUTIONARY NOTE CONCERNING FORWARD LOOKING STATEMENTS
Certain statements contained in this release, and in related
comments by the Company's management, include "forward-looking
statements." Forward-looking statements include information
concerning the Company's liquidity and its possible or assumed
future results of operations, including descriptions of its
business strategies. These statements often include words such as
"believe," "expect," "project," "potential," "anticipate,"
"intend," "plan," "estimate," "seek," "will," "may," "would,"
"should," "could," "forecasts" or similar expressions. These
statements are based on certain assumptions that the Company has
made in light of its experience in the industry as well as its
perceptions of historical trends, current conditions, expected
future developments and other factors it believes are appropriate
in these circumstances. The Company believes these judgments are
reasonable, but you should understand that these statements are not
guarantees of performance or results, and the Company's actual
results could differ materially from those expressed in the
forward-looking statements due to a variety of important factors,
both positive and negative, that may be revised or supplemented in
subsequent reports on Forms 10-K, 10-Q and 8-K filed or furnished
to the Securities and Exchange Commission ("SEC"). Among other
items, such factors could include: any claims, investigations or
proceedings arising as a result of the restatement in 2015 of the
Company's previously issued financial results; the Company's
ability to remediate the material weaknesses in its internal
controls over financial reporting; levels of travel demand,
particularly with respect to airline passenger traffic in
the United States and in global
markets; the effect of the Company's separation of its vehicle and
equipment rental businesses, any failure by Herc Holdings Inc. to
comply with the agreements entered into in connection with the
separation and the Company's ability to obtain the expected
benefits of the separation; significant changes in the competitive
environment, including as a result of industry consolidation, and
the effect of competition in the Company's markets on rental volume
and pricing, including on the Company's pricing policies or use of
incentives; increased vehicle costs due to declines in the value of
the Company's non-program vehicles; occurrences that disrupt rental
activity during the Company's peak periods; the Company's
ability to purchase adequate supplies of competitively priced
vehicles and risks relating to increases in the cost of the
vehicles it purchases; the Company's ability to accurately estimate
future levels of rental activity and adjust the number and mix of
vehicles used in its rental operations accordingly; the Company's
ability to maintain sufficient liquidity and the availability to it
of additional or continued sources of financing for its revenue
earning vehicles and to refinance its existing indebtedness; the
Company's ability to adequately respond to changes in technology
and customer demands; the Company's ability to maintain access to
third-party distribution channels and related prices, commission
structures and transaction volumes; an increase in the Company's
vehicle costs or disruption to its rental activity, particularly
during its peak periods, due to safety recalls by the manufacturers
of its vehicles; a major disruption in the Company's communication
or centralized information networks; financial instability of the
manufacturers of the Company's vehicles; any impact on the Company
from the actions of its franchisees, dealers and independent
contractors; the Company's ability to sustain operations during
adverse economic cycles and unfavorable external events (including
war, terrorist acts, natural disasters and epidemic disease);
shortages of fuel and increases or volatility in fuel costs; the
Company's ability to successfully integrate acquisitions and
complete dispositions; the Company's ability to maintain favorable
brand recognition; costs and risks associated with litigation and
investigations; risks related to the Company's indebtedness,
including its substantial amount of debt, its ability to incur
substantially more debt, the fact that substantially all of its
consolidated assets secure certain of its outstanding indebtedness
and increases in interest rates or in its borrowing margins; the
Company's ability to meet the financial and other covenants
contained in its Senior Facilities, its outstanding unsecured
Senior Notes, its Senior Second Priority Secured Notes and certain
asset-backed and asset-based arrangements; changes in accounting
principles, or their application or interpretation, and the
Company's ability to make accurate estimates and the assumptions
underlying the estimates, which could have an effect on operating
results; risks associated with operating in many different
countries, including the risk of a violation or alleged violation
of applicable anticorruption or antibribery laws and the Company's
ability to repatriate cash from non-U.S. affiliates without adverse
tax consequences; the Company's ability to successfully outsource a
significant portion of its information technology services or other
activities; the Company's ability to successfully implement its
finance and information technology transformation programs; changes
in the existing, or the adoption of new laws, regulations, policies
or other activities of governments, agencies and similar
organizations where such actions may affect the Company's
operations, the cost thereof or applicable tax rates; changes to
the Company's senior management team and the dependence of its
business operations on its senior management team; the effect of
tangible and intangible asset impairment charges; the Company's
exposure to uninsured claims in excess of historical levels;
fluctuations in interest rates and commodity prices; the Company's
exposure to fluctuations in foreign currency exchange rates and
other risks described from time to time in periodic and current
reports that the Company files with the SEC.
Additional information concerning these and other factors can be
found in the Company's filings with the SEC, including its Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
You should not place undue reliance on forward-looking
statements. All forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in
their entirety by the foregoing cautionary statements. All such
statements speak only as of the date made, and the Company
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
FINANCIAL
INFORMATION AND OPERATING
DATA
|
|
SELECTED UNAUDITED
CONSOLIDATED INCOME STATEMENT DATA
|
|
|
Three Months
Ended
June 30,
|
|
As a
Percentage of
Total
Revenues
|
|
Six Months
Ended
June 30,
|
|
As a
Percentage of
Total
Revenues
|
(In millions, except
per share data)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Total
revenues
|
$
|
2,224
|
|
|
$
|
2,270
|
|
|
100
|
%
|
|
100
|
%
|
|
$
|
4,140
|
|
|
$
|
4,253
|
|
|
100
|
%
|
|
100
|
%
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
1,255
|
|
|
1,267
|
|
|
56
|
%
|
|
56
|
%
|
|
2,387
|
|
|
2,425
|
|
|
58
|
%
|
|
57
|
%
|
Depreciation of
revenue earning vehicles and lease charges, net
|
743
|
|
|
629
|
|
|
33
|
%
|
|
28
|
%
|
|
1,444
|
|
|
1,245
|
|
|
35
|
%
|
|
29
|
%
|
Selling, general and
administrative
|
223
|
|
|
234
|
|
|
10
|
%
|
|
10
|
%
|
|
442
|
|
|
459
|
|
|
11
|
%
|
|
11
|
%
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
82
|
|
|
72
|
|
|
4
|
%
|
|
3
|
%
|
|
153
|
|
|
140
|
|
|
4
|
%
|
|
3
|
%
|
Non-vehicle
|
76
|
|
|
102
|
|
|
3
|
%
|
|
4
|
%
|
|
136
|
|
|
185
|
|
|
3
|
%
|
|
4
|
%
|
Total interest
expense, net
|
158
|
|
|
174
|
|
|
7
|
%
|
|
8
|
%
|
|
289
|
|
|
325
|
|
|
7
|
%
|
|
8
|
%
|
Intangible asset
impairments
|
86
|
|
|
—
|
|
|
4
|
%
|
|
—
|
%
|
|
86
|
|
|
—
|
|
|
2
|
%
|
|
—
|
%
|
Other (income)
expense, net
|
4
|
|
|
1
|
|
|
—
|
%
|
|
—
|
%
|
|
31
|
|
|
(89)
|
|
|
1
|
%
|
|
(2)
|
%
|
Total
expenses
|
2,469
|
|
|
2,305
|
|
|
111
|
%
|
|
102
|
%
|
|
4,679
|
|
|
4,365
|
|
|
113
|
%
|
|
103
|
%
|
Income (loss) from
continuing operations before income taxes
|
(245)
|
|
|
(35)
|
|
|
(11)
|
%
|
|
(2)
|
%
|
|
(539)
|
|
|
(112)
|
|
|
(13)
|
%
|
|
(3)
|
%
|
Income tax
(provision) benefit from continuing operations
|
87
|
|
|
7
|
|
|
4
|
%
|
|
—
|
%
|
|
158
|
|
|
32
|
|
|
4
|
%
|
|
1
|
%
|
Net income (loss)
from continuing operations
|
(158)
|
|
|
(28)
|
|
|
(7)
|
%
|
|
(1)%
|
|
|
(381)
|
|
|
(80)
|
|
|
(9)
|
%
|
|
(2)
|
%
|
Net income (loss)
from discontinued operations
|
—
|
|
|
(15)
|
|
|
—
|
%
|
|
(1)%
|
|
|
—
|
|
|
(13)
|
|
|
—
|
%
|
|
—
|
%
|
Net Income
(loss)
|
$
|
(158)
|
|
|
$
|
(43)
|
|
|
(7)
|
%
|
|
(2)%
|
|
|
$
|
(381)
|
|
|
$
|
(93)
|
|
|
(9)%
|
|
|
(2)%
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
83
|
|
|
85
|
|
|
|
|
|
|
83
|
|
|
85
|
|
|
|
|
|
Diluted
|
83
|
|
|
85
|
|
|
|
|
|
|
83
|
|
|
85
|
|
|
|
|
|
Earnings (loss) per
share - basic and diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share from continuing operations
|
$
|
(1.90)
|
|
|
$
|
(0.33)
|
|
|
|
|
|
|
$
|
(4.59)
|
|
|
$
|
(0.94)
|
|
|
|
|
|
Basic earnings (loss)
per share from discontinued operations
|
—
|
|
|
(0.18)
|
|
|
|
|
|
|
—
|
|
|
(0.15)
|
|
|
|
|
|
Basic earnings (loss)
per share
|
$
|
(1.90)
|
|
|
$
|
(0.51)
|
|
|
|
|
|
|
$
|
(4.59)
|
|
|
$
|
(1.09)
|
|
|
|
|
|
Diluted earnings
(loss) per share from continuing operations
|
$
|
(1.90)
|
|
|
$
|
(0.33)
|
|
|
|
|
|
|
$
|
(4.59)
|
|
|
$
|
(0.94)
|
|
|
|
|
|
Diluted earnings
(loss) per share from discontinued operations
|
—
|
|
|
(0.18)
|
|
|
|
|
|
|
—
|
|
|
(0.15)
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
(1.90)
|
|
|
$
|
(0.51)
|
|
|
|
|
|
|
$
|
(4.59)
|
|
|
$
|
(1.09)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income (loss) (a)
|
$
|
(82)
|
|
|
$
|
55
|
|
|
|
|
|
|
$
|
(295)
|
|
|
$
|
(53)
|
|
|
|
|
|
Adjusted net income
(loss)(a)
|
$
|
(52)
|
|
|
$
|
35
|
|
|
|
|
|
|
$
|
(186)
|
|
|
$
|
(33)
|
|
|
|
|
|
Adjusted earnings
(loss) per share(a)
|
$
|
(0.63)
|
|
|
$
|
0.41
|
|
|
|
|
|
|
$
|
(2.24)
|
|
|
$
|
(0.39)
|
|
|
|
|
|
Adjusted Corporate
EBITDA (a)
|
$
|
35
|
|
|
$
|
184
|
|
|
|
|
|
|
$
|
(75)
|
|
|
$
|
212
|
|
|
|
|
|
|
(a) Represents
a non-GAAP measure, see the accompanying reconciliations included
in Supplemental Schedule II.
|
SELECTED UNAUDITED
CONSOLIDATED BALANCE SHEET DATA
|
|
(In
millions)
|
June 30,
2017
|
|
December 31,
2016
|
Cash and cash
equivalents
|
$
|
1,141
|
|
$
|
816
|
Total restricted
cash
|
1,062
|
|
278
|
Revenue earning
vehicles, net:
|
|
U.S. Rental
Car
|
8,804
|
|
7,716
|
International Rental
Car
|
3,044
|
|
1,755
|
All Other
Operations
|
1,338
|
|
1,347
|
Total revenue earning
vehicles, net
|
13,186
|
|
10,818
|
Total
assets
|
22,433
|
|
19,155
|
Total debt
|
16,809
|
|
13,541
|
Net vehicle debt
(a)
|
11,026
|
|
9,447
|
Net non-vehicle debt
(a)
|
3,702
|
|
3,116
|
Total
equity
|
756
|
|
1,075
|
|
(a) Represents
a non-GAAP measure, see the accompanying reconciliations included
in Supplemental Schedule V.
|
SELECTED UNAUDITED
CONSOLIDATED CASH FLOW DATA
|
|
|
Six Months Ended
June 30,
|
(In
millions)
|
2017
|
|
2016
|
Cash from continuing
operations provided by (used in):
|
|
|
|
Operating
activities
|
$
|
982
|
|
|
$
|
1,014
|
|
Investing
activities
|
(2,904)
|
|
|
(1,929)
|
|
Financing
activities
|
2,235
|
|
|
1,718
|
|
Effect of exchange
rate changes
|
12
|
|
|
8
|
|
Net change in cash
and cash equivalents
|
$
|
325
|
|
|
$
|
811
|
|
|
|
|
|
Fleet growth
(a)
|
$
|
(46)
|
|
|
$
|
130
|
|
Adjusted free cash
flow (a)
|
(566)
|
|
|
(101)
|
|
|
(a) Represents a non-GAAP measure, see the
accompanying reconciliations included in Supplemental Schedules III
and IV.
|
SELECTED UNAUDITED
OPERATING DATA BY SEGMENT
|
|
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
Six Months
Ended
June 30,
|
|
|
Percent
Inc/(Dec)
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
|
U.S.
RAC
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
36,233
|
|
|
37,190
|
|
|
(3)%
|
|
|
68,545
|
|
|
69,932
|
|
|
|
(2)%
|
|
Total
RPD(a)
|
$
|
41.26
|
|
|
$
|
42.11
|
|
|
(2)%
|
|
|
$
|
41.23
|
|
|
$
|
42.23
|
|
|
|
(2)%
|
|
Total
RPU(a)
|
$
|
1,007
|
|
|
$
|
1,044
|
|
|
(4)%
|
|
|
$
|
968
|
|
|
$
|
1,025
|
|
|
|
(6)%
|
|
Average
vehicles
|
495,000
|
|
|
500,000
|
|
|
(1)%
|
|
|
486,500
|
|
|
480,100
|
|
|
|
1%
|
|
Vehicle
utilization(a)
|
80%
|
|
|
82%
|
|
|
(130)
|
bps
|
|
78%
|
|
|
80%
|
|
|
|
(220)
|
bps
|
Net depreciation per
unit per month(a)
|
$
|
353
|
|
|
$
|
278
|
|
|
27%
|
|
|
$
|
351
|
|
|
$
|
290
|
|
|
|
21%
|
|
Percentage of program
vehicles at period end
|
11%
|
|
|
12%
|
|
|
(100)
|
bps
|
|
11%
|
|
|
12%
|
|
|
|
(100)
|
bps
|
Adjusted pre-tax
income (loss)(in millions)(b)
|
$
|
(37)
|
|
|
$
|
143
|
|
|
NM
|
|
|
$
|
(152)
|
|
|
$
|
138
|
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
RAC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
13,235
|
|
|
12,511
|
|
|
6%
|
|
|
23,419
|
|
|
22,613
|
|
|
|
4%
|
|
Total
RPD(a)(c)
|
$
|
39.29
|
|
|
$
|
39.88
|
|
|
(1)%
|
|
|
$
|
39.28
|
|
|
$
|
40.38
|
|
|
|
(3)%
|
|
Total
RPU(a)(c)
|
$
|
931
|
|
|
$
|
931
|
|
|
—%
|
|
|
$
|
911
|
|
|
$
|
932
|
|
|
|
(2)%
|
|
Average
vehicles
|
186,100
|
|
|
178,600
|
|
|
4%
|
|
|
168,300
|
|
|
163,300
|
|
|
|
3%
|
|
Vehicle
utilization(a)
|
78%
|
|
|
77%
|
|
|
120
|
bps
|
|
77%
|
|
|
76%
|
|
|
|
80
|
bps
|
Net depreciation per
unit per month(a)(c)
|
$
|
172
|
|
|
$
|
168
|
|
|
2%
|
|
|
$
|
177
|
|
|
$
|
176
|
|
|
|
1%
|
|
Percentage of program
vehicles at period end
|
46%
|
|
|
45%
|
|
|
100
|
bps
|
|
46%
|
|
|
45%
|
|
|
|
100
|
bps
|
Adjusted pre-tax
income (loss)(in millions)(b)
|
$
|
56
|
|
|
$
|
34
|
|
|
65%
|
|
|
$
|
52
|
|
|
$
|
36
|
|
|
|
44%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average vehicles —
Donlen
|
206,200
|
|
|
166,900
|
|
|
24%
|
|
|
206,900
|
|
|
166,900
|
|
|
|
24%
|
|
Adjusted pre-tax
income (loss) (in millions)(b)
|
$
|
19
|
|
|
$
|
17
|
|
|
12%
|
|
|
$
|
39
|
|
|
$
|
35
|
|
|
|
11%
|
|
|
NM - Not
Meaningful
|
|
(a) Represents
a key metric, see the accompanying reconciliations included in
Supplemental Schedule VI.
|
(b) Represents a non-GAAP measure, see the
accompanying reconciliations included in Supplemental Schedule
II.
|
(c) Based
on December 31, 2016 foreign exchange rates.
|
Supplemental
Schedule I
|
HERTZ GLOBAL
HOLDINGS, INC.
|
CONDENSED
STATEMENT OF OPERATIONS BY SEGMENT
|
Unaudited
|
|
|
Three Months Ended
June 30, 2017
|
|
Three Months Ended
June 30, 2016
|
(In
millions)
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
Total
revenues:
|
$
|
1,519
|
|
|
$
|
543
|
|
|
$
|
162
|
|
|
$
|
—
|
|
|
$
|
2,224
|
|
|
$
|
1,584
|
|
|
$
|
540
|
|
|
$
|
146
|
|
|
$
|
—
|
|
|
$
|
2,270
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
919
|
|
|
322
|
|
|
14
|
|
|
—
|
|
|
1,255
|
|
|
916
|
|
|
341
|
|
|
6
|
|
|
4
|
|
|
1,267
|
|
Depreciation of
revenue earning vehicles and lease charges, net
|
524
|
|
|
100
|
|
|
119
|
|
|
—
|
|
|
743
|
|
|
417
|
|
|
98
|
|
|
114
|
|
|
—
|
|
|
629
|
|
Selling, general and
administrative
|
101
|
|
|
55
|
|
|
8
|
|
|
59
|
|
|
223
|
|
|
103
|
|
|
57
|
|
|
8
|
|
|
66
|
|
|
234
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
57
|
|
|
18
|
|
|
7
|
|
|
—
|
|
|
82
|
|
|
53
|
|
|
14
|
|
|
5
|
|
|
—
|
|
|
72
|
|
Non-vehicle
|
(22)
|
|
|
1
|
|
|
(2)
|
|
|
99
|
|
|
76
|
|
|
(8)
|
|
|
1
|
|
|
(1)
|
|
|
110
|
|
|
102
|
|
Total interest
expense, net
|
35
|
|
|
19
|
|
|
5
|
|
|
99
|
|
|
158
|
|
|
45
|
|
|
15
|
|
|
4
|
|
|
110
|
|
|
174
|
|
Intangible asset
impairments
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other (income)
expense, net
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
Total
expenses
|
1,665
|
|
|
500
|
|
|
146
|
|
|
158
|
|
|
2,469
|
|
|
1,480
|
|
|
511
|
|
|
132
|
|
|
182
|
|
|
2,305
|
|
Income (loss) from
continuing operations before income taxes
|
$
|
(146)
|
|
|
$
|
43
|
|
|
$
|
16
|
|
|
$
|
(158)
|
|
|
(245)
|
|
|
$
|
104
|
|
|
$
|
29
|
|
|
$
|
14
|
|
|
$
|
(182)
|
|
|
(35)
|
|
Income tax
(provision) benefit from continuing operations
|
|
|
|
|
|
|
|
|
87
|
|
|
|
|
|
|
|
|
|
|
7
|
|
Net income (loss)
from continuing operations
|
|
|
|
|
|
|
|
|
(158)
|
|
|
|
|
|
|
|
|
|
|
(28)
|
|
Net income (loss)
from discontinued operations
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
(15)
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
$
|
(158)
|
|
|
|
|
|
|
|
|
|
|
$
|
(43)
|
|
Supplemental
Schedule I (continued)
|
HERTZ GLOBAL
HOLDINGS, INC.
|
CONDENSED
STATEMENT OF OPERATIONS BY SEGMENT
|
Unaudited
|
|
|
Six Months Ended
June 30, 2017
|
|
Six Months Ended
June 30, 2016
|
(In
millions)
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
Total
revenues:
|
$
|
2,872
|
|
|
$
|
955
|
|
|
$
|
313
|
|
|
$
|
—
|
|
|
$
|
4,140
|
|
|
$
|
2,990
|
|
|
$
|
973
|
|
|
$
|
290
|
|
|
$
|
—
|
|
|
$
|
4,253
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
1,780
|
|
|
589
|
|
|
19
|
|
|
(1)
|
|
|
2,387
|
|
|
1,786
|
|
|
620
|
|
|
11
|
|
|
8
|
|
|
2,425
|
|
Depreciation of
revenue earning vehicles and lease charges, net
|
1,023
|
|
|
185
|
|
|
236
|
|
|
—
|
|
|
1,444
|
|
|
836
|
|
|
184
|
|
|
225
|
|
|
—
|
|
|
1,245
|
|
Selling, general and
administrative
|
197
|
|
|
108
|
|
|
15
|
|
|
122
|
|
|
442
|
|
|
208
|
|
|
112
|
|
|
17
|
|
|
122
|
|
|
459
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
105
|
|
|
34
|
|
|
14
|
|
|
—
|
|
|
153
|
|
|
104
|
|
|
27
|
|
|
9
|
|
|
—
|
|
|
140
|
|
Non-vehicle
|
(41)
|
|
|
1
|
|
|
(5)
|
|
|
181
|
|
|
136
|
|
|
(15)
|
|
|
3
|
|
|
(2)
|
|
|
199
|
|
|
185
|
|
Total interest
expense, net
|
64
|
|
|
35
|
|
|
9
|
|
|
181
|
|
|
289
|
|
|
89
|
|
|
30
|
|
|
7
|
|
|
199
|
|
|
325
|
|
Intangible asset
impairments
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other (income)
expense, net
|
—
|
|
|
1
|
|
|
—
|
|
|
30
|
|
|
31
|
|
|
(11)
|
|
|
—
|
|
|
—
|
|
|
(78)
|
|
|
(89)
|
|
Total
expenses
|
3,150
|
|
|
918
|
|
|
279
|
|
|
332
|
|
|
4,679
|
|
|
2,908
|
|
|
946
|
|
|
260
|
|
|
251
|
|
|
4,365
|
|
Income (loss) from
continuing operations before income taxes
|
$
|
(278)
|
|
|
$
|
37
|
|
|
$
|
34
|
|
|
$
|
(332)
|
|
|
(539)
|
|
|
$
|
82
|
|
|
$
|
27
|
|
|
$
|
30
|
|
|
$
|
(251)
|
|
|
(112)
|
|
Income tax
(provision) benefit from continuing operations
|
|
|
|
|
|
|
|
|
158
|
|
|
|
|
|
|
|
|
|
|
32
|
|
Net income (loss)
from continuing operations
|
|
|
|
|
|
|
|
|
(381)
|
|
|
|
|
|
|
|
|
|
|
(80)
|
|
Net income (loss)
from discontinued operations
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
(13)
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
$
|
(381)
|
|
|
|
|
|
|
|
|
|
|
$
|
(93)
|
|
Supplemental
Schedule II
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES
|
TO GROSS EBITDA,
CORPORATE EBITDA, ADJUSTED CORPORATE EBITDA, ADJUSTED PRE-TAX
INCOME (LOSS),
|
ADJUSTED NET
INCOME (LOSS) AND ADJUSTED DILUTED EARNINGS (LOSS) PER
SHARE
|
Unaudited
|
|
|
Three Months Ended
June 30, 2017
|
|
Three Months Ended
June 30, 2016
|
(In
millions)
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
Income (loss) from
continuing operations before income taxes
|
$
|
(146)
|
|
|
$
|
43
|
|
|
$
|
16
|
|
|
$
|
(158)
|
|
|
$
|
(245)
|
|
|
$
|
104
|
|
|
$
|
29
|
|
|
$
|
14
|
|
|
$
|
(182)
|
|
|
$
|
(35)
|
|
Depreciation and
amortization
|
573
|
|
|
108
|
|
|
121
|
|
|
4
|
|
|
806
|
|
|
462
|
|
|
106
|
|
|
116
|
|
|
7
|
|
|
691
|
|
Interest, net of
interest income
|
35
|
|
|
19
|
|
|
5
|
|
|
99
|
|
|
158
|
|
|
45
|
|
|
15
|
|
|
4
|
|
|
110
|
|
|
174
|
|
Gross
EBITDA
|
$
|
462
|
|
|
$
|
170
|
|
|
$
|
142
|
|
|
$
|
(55)
|
|
|
$
|
719
|
|
|
$
|
611
|
|
|
$
|
150
|
|
|
$
|
134
|
|
|
$
|
(65)
|
|
|
$
|
830
|
|
Revenue earning
vehicle depreciation and lease charges, net
|
(524)
|
|
|
(100)
|
|
|
(119)
|
|
|
—
|
|
|
(743)
|
|
|
(417)
|
|
|
(98)
|
|
|
(114)
|
|
|
—
|
|
|
(629)
|
|
Vehicle debt
interest
|
(57)
|
|
|
(18)
|
|
|
(7)
|
|
|
—
|
|
|
(82)
|
|
|
(53)
|
|
|
(14)
|
|
|
(5)
|
|
|
—
|
|
|
(72)
|
|
Vehicle debt-related
charges (a)
|
4
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
7
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
3
|
|
Loss on
extinguishment of vehicle related debt(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
Corporate
EBITDA
|
$
|
(115)
|
|
|
$
|
54
|
|
|
$
|
17
|
|
|
$
|
(55)
|
|
|
$
|
(99)
|
|
|
$
|
148
|
|
|
$
|
39
|
|
|
$
|
16
|
|
|
$
|
(65)
|
|
|
$
|
138
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
Restructuring and
restructuring related charges (c)(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
13
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
18
|
|
Impairment charges
and asset write-downs(e)
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Finance and
information technology transformation
costs(f)
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
19
|
|
Other
items(g)
|
7
|
|
|
9
|
|
|
—
|
|
|
2
|
|
|
18
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Adjusted Corporate
EBITDA
|
$
|
(22)
|
|
|
$
|
63
|
|
|
$
|
17
|
|
|
$
|
(23)
|
|
|
$
|
35
|
|
|
$
|
168
|
|
|
$
|
42
|
|
|
$
|
16
|
|
|
$
|
(42)
|
|
|
$
|
184
|
|
Non-vehicle
depreciation and amortization
|
(49)
|
|
|
(8)
|
|
|
(2)
|
|
|
(4)
|
|
|
(63)
|
|
|
(45)
|
|
|
(8)
|
|
|
(2)
|
|
|
(7)
|
|
|
(62)
|
|
Non-vehicle debt
interest, net of interest income
|
22
|
|
|
(1)
|
|
|
2
|
|
|
(99)
|
|
|
(76)
|
|
|
8
|
|
|
(1)
|
|
|
1
|
|
|
(110)
|
|
|
(102)
|
|
Non-vehicle
debt-related charges (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
Loss on
extinguishment of non-vehicle related debt(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
|
(5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6)
|
|
|
(6)
|
|
Acquisition
accounting (h)
|
12
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
16
|
|
|
12
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
18
|
|
Adjusted pre-tax
income (loss)(i)
|
$
|
(37)
|
|
|
$
|
56
|
|
|
$
|
19
|
|
|
$
|
(120)
|
|
|
$
|
(82)
|
|
|
$
|
143
|
|
|
$
|
34
|
|
|
$
|
17
|
|
|
$
|
(139)
|
|
|
$
|
55
|
|
Income tax
(provision) benefit on adjusted pre-tax income
(loss)(j)
|
|
|
|
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
(20)
|
|
Adjusted net income
(loss)
|
|
|
|
|
|
|
|
|
$
|
(52)
|
|
|
|
|
|
|
|
|
|
|
$
|
35
|
|
Weighted average
number of diluted shares outstanding
|
|
|
|
|
|
|
|
|
83
|
|
|
|
|
|
|
|
|
|
|
85
|
|
Adjusted diluted
earnings (loss) per share
|
|
|
|
|
|
|
|
|
$
|
(0.63)
|
|
|
|
|
|
|
|
|
|
|
$
|
0.41
|
|
Supplemental
Schedule II (continued)
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES
|
TO GROSS EBITDA,
CORPORATE EBITDA, ADJUSTED CORPORATE EBITDA, ADJUSTED PRE-TAX
INCOME (LOSS)
|
AND ADJUSTED NET
INCOME (LOSS)
|
Unaudited
|
|
|
Six Months Ended
June 30, 2017
|
|
Six Months Ended
June 30, 2016
|
(In
millions)
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
Income (loss) from
continuing operations before income taxes
|
$
|
(278)
|
|
|
$
|
37
|
|
|
$
|
34
|
|
|
$
|
(332)
|
|
|
$
|
(539)
|
|
|
$
|
82
|
|
|
$
|
27
|
|
|
$
|
30
|
|
|
$
|
(251)
|
|
|
$
|
(112)
|
|
Depreciation and
amortization
|
1,115
|
|
|
201
|
|
|
242
|
|
|
6
|
|
|
1,564
|
|
|
931
|
|
|
201
|
|
|
230
|
|
|
12
|
|
|
1,374
|
|
Interest, net of
interest income
|
64
|
|
|
35
|
|
|
9
|
|
|
181
|
|
|
289
|
|
|
89
|
|
|
30
|
|
|
7
|
|
|
199
|
|
|
325
|
|
Gross
EBITDA
|
$
|
901
|
|
|
$
|
273
|
|
|
$
|
285
|
|
|
$
|
(145)
|
|
|
$
|
1,314
|
|
|
$
|
1,102
|
|
|
$
|
258
|
|
|
$
|
267
|
|
|
$
|
(40)
|
|
|
$
|
1,587
|
|
Revenue earning
vehicle depreciation and lease charges, net
|
(1,023)
|
|
|
(185)
|
|
|
(236)
|
|
|
—
|
|
|
(1,444)
|
|
|
(836)
|
|
|
(184)
|
|
|
(225)
|
|
|
—
|
|
|
(1,245)
|
|
Vehicle debt
interest
|
(105)
|
|
|
(34)
|
|
|
(14)
|
|
|
—
|
|
|
(153)
|
|
|
(104)
|
|
|
(27)
|
|
|
(9)
|
|
|
—
|
|
|
(140)
|
|
Vehicle debt-related
charges (a)
|
8
|
|
|
4
|
|
|
2
|
|
|
—
|
|
|
14
|
|
|
8
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
13
|
|
Loss on
extinguishment of vehicle related debt(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
Corporate
EBITDA
|
$
|
(219)
|
|
|
$
|
58
|
|
|
$
|
37
|
|
|
$
|
(145)
|
|
|
$
|
(269)
|
|
|
$
|
176
|
|
|
$
|
50
|
|
|
$
|
35
|
|
|
$
|
(40)
|
|
|
$
|
221
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
Restructuring and
restructuring related charges(c)(d)
|
—
|
|
|
1
|
|
|
—
|
|
|
10
|
|
|
11
|
|
|
14
|
|
|
3
|
|
|
—
|
|
|
12
|
|
|
29
|
|
Sale of CAR Inc.
common stock(k)
|
—
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
|
(3)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75)
|
|
|
(75)
|
|
Impairment charges
and asset write-downs(e)
|
86
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
116
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Finance and
information technology transformation
costs(f)
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
39
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
26
|
|
Other
items(g)
|
7
|
|
|
7
|
|
|
—
|
|
|
5
|
|
|
19
|
|
|
(9)
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(3)
|
|
Adjusted Corporate
EBITDA
|
$
|
(126)
|
|
|
$
|
66
|
|
|
$
|
37
|
|
|
$
|
(52)
|
|
|
$
|
(75)
|
|
|
$
|
193
|
|
|
$
|
53
|
|
|
$
|
35
|
|
|
$
|
(69)
|
|
|
$
|
212
|
|
Non-vehicle
depreciation and amortization
|
(92)
|
|
|
(16)
|
|
|
(6)
|
|
|
(6)
|
|
|
(120)
|
|
|
(95)
|
|
|
(17)
|
|
|
(5)
|
|
|
(12)
|
|
|
(129)
|
|
Non-vehicle debt
interest, net of interest income
|
41
|
|
|
(1)
|
|
|
5
|
|
|
(181)
|
|
|
(136)
|
|
|
15
|
|
|
(3)
|
|
|
2
|
|
|
(199)
|
|
|
(185)
|
|
Non-vehicle
debt-related charges(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
Loss on
extinguishment of non-vehicle related debt(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
(12)
|
|
|
(12)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11)
|
|
|
(11)
|
|
Acquisition
accounting (h)
|
25
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
31
|
|
|
25
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
34
|
|
Other(d)
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted pre-tax
income (loss)(i)
|
$
|
(152)
|
|
|
$
|
52
|
|
|
$
|
39
|
|
|
$
|
(234)
|
|
|
$
|
(295)
|
|
|
$
|
138
|
|
|
$
|
36
|
|
|
$
|
35
|
|
|
$
|
(262)
|
|
|
$
|
(53)
|
|
Income tax
(provision) benefit on adjusted pre-tax income
(loss)(j)
|
|
|
|
|
|
|
|
|
109
|
|
|
|
|
|
|
|
|
|
|
20
|
|
Adjusted net income
(loss)
|
|
|
|
|
|
|
|
|
$
|
(186)
|
|
|
|
|
|
|
|
|
|
|
$
|
(33)
|
|
Weighted average
number of diluted shares outstanding
|
|
|
|
|
|
|
|
|
83
|
|
|
|
|
|
|
|
|
|
|
85
|
|
Adjusted diluted
earnings (loss) per share
|
|
|
|
|
|
|
|
|
$
|
(2.24)
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.39)
|
|
(a) Represents
debt-related charges relating to the amortization of deferred
financing costs and debt discounts and premiums.
|
(b) In 2017,
represents $6 million of early redemption premium and write off of
deferred financing costs associated with the redemption of the
outstanding 4.25% Senior Notes due April 2018 and a $2 million
write-off of deferred financing costs associated with the
termination of commitments under the Senior RCF. In 2016,
represents the write-off of deferred financing costs in the second
quarter as a result of paying off the Senior Term Facility and
various vehicle debt refinancings.
|
(c) Represents expenses incurred
under restructuring actions as defined in U.S. GAAP, excluding
impairments and asset write-downs, when applicable. Also represents
certain other charges such as incremental costs incurred directly
supporting business transformation initiatives. Such costs include
transition costs incurred in connection with business process
outsourcing arrangements and incremental costs incurred to
facilitate business process re-engineering initiatives that involve
significant organization redesign and extensive operational process
changes. Also includes consulting costs and legal fees related to
the previously disclosed accounting review and
investigation.
|
(d) For
the six months ended June 30, 2017, excludes $2 million of
stock-based compensation expenditures included in restructuring and
restructuring related charges.
|
(e) In
2017, primarily represents a second quarter impairment of $86
million of the Dollar Thrifty tradename and a first quarter
impairment of $30 million related to an equity method
investment.
|
(f)
Represents external costs associated with the Company's finance and
information technology transformation programs, both of which are
multi-year initiatives that commenced in 2016 to upgrade and
modernize the Company's systems and processes.
|
(g) Represents
miscellaneous, non-recurring and other non-cash items. In 2017,
includes first and second quarter adjustments, as applicable, to
the carrying value of the Company's Brazil operations in connection
with its classification as held for sale and second quarter charges
of $6 million for labor-related matters and $5 million relating to
PLPD as a result of a terrorist event. For the six months ended
June 30, 2016, includes a $9 million settlement gain from an
eminent domain case related to one of the Company's airport
locations.
|
(h) Represents
incremental expense associated with amortization of other
intangible assets and depreciation of property and equipment
relating to acquisition accounting.
|
(i) Adjustments by caption to arrive at
adjusted pre-tax income (loss) are as follows:
|
Increase
(decrease) to expenses
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
(In
millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Direct vehicle and
operating expenses
|
$
|
(21)
|
|
|
$
|
(25)
|
|
|
$
|
(37)
|
|
|
$
|
(38)
|
|
Selling, general and
administrative expenses
|
(33)
|
|
|
(32)
|
|
|
(62)
|
|
|
(59)
|
|
Vehicle interest
expense, net
|
(7)
|
|
|
(9)
|
|
|
(14)
|
|
|
(19)
|
|
Non-vehicle interest
expense, net
|
(11)
|
|
|
(23)
|
|
|
(15)
|
|
|
(26)
|
|
Other income
(expense), net
|
(91)
|
|
|
(1)
|
|
|
(116)
|
|
|
83
|
|
Total
adjustments
|
$
|
(163)
|
|
|
$
|
(90)
|
|
|
$
|
(244)
|
|
|
$
|
(59)
|
|
|
(j) Derived utilizing a combined
statutory rate of 37% applied to the adjusted income (loss) before
income taxes.
|
(k) Represents the pre-tax gain on
the sale of CAR Inc. common stock.
|
Supplemental
Schedule III
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURE - FLEET GROWTH
|
Unaudited
|
|
|
Six Months Ended
June 30, 2017
|
|
Six Months Ended
June 30, 2016
|
(In
millions)
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Hertz
Global
|
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Hertz
Global
|
Revenue earning
vehicles expenditures
|
$
|
(4,520)
|
|
|
$
|
(1,856)
|
|
|
$
|
(333)
|
|
|
$
|
(6,709)
|
|
|
$
|
(4,854)
|
|
|
$
|
(1,669)
|
|
|
$
|
(364)
|
|
|
$
|
(6,887)
|
|
Proceeds from
disposal of revenue earning vehicles
|
2,658
|
|
|
1,069
|
|
|
108
|
|
|
3,835
|
|
|
3,545
|
|
|
1,126
|
|
|
116
|
|
|
4,787
|
|
Net revenue earning
vehicles capital expenditures
|
(1,862)
|
|
|
(787)
|
|
|
(225)
|
|
|
(2,874)
|
|
|
(1,309)
|
|
|
(543)
|
|
|
(248)
|
|
|
(2,100)
|
|
Depreciation of
revenue earning vehicles, net
|
1,023
|
|
|
151
|
|
|
236
|
|
|
1,410
|
|
|
837
|
|
|
150
|
|
|
225
|
|
|
1,212
|
|
Financing activity
related to vehicles:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
3,214
|
|
|
1,060
|
|
|
754
|
|
|
5,028
|
|
|
4,221
|
|
|
1,267
|
|
|
591
|
|
|
6,079
|
|
Payments
|
(2,333)
|
|
|
(607)
|
|
|
(725)
|
|
|
(3,665)
|
|
|
(3,614)
|
|
|
(886)
|
|
|
(578)
|
|
|
(5,078)
|
|
Restricted cash
changes
|
33
|
|
|
56
|
|
|
(34)
|
|
|
55
|
|
|
18
|
|
|
1
|
|
|
(2)
|
|
|
17
|
|
Net financing activity
related to vehicles
|
914
|
|
|
509
|
|
|
(5)
|
|
|
1,418
|
|
|
625
|
|
|
382
|
|
|
11
|
|
|
1,018
|
|
Fleet
growth
|
$
|
75
|
|
|
$
|
(127)
|
|
|
$
|
6
|
|
|
$
|
(46)
|
|
|
$
|
153
|
|
|
$
|
(11)
|
|
|
$
|
(12)
|
|
|
$
|
130
|
|
Supplemental
Schedule IV
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURE - ADJUSTED FREE CASH FLOW
|
Unaudited
|
|
Reconciliation of
Cash Flows From Operating Activities to Adjusted Free Cash
Flow
|
Six Months Ended
June 30,
|
(In
millions)
|
2017
|
|
2016
|
Net cash provided by
operating activities
|
$
|
982
|
|
|
$
|
1,014
|
|
Net change in
restricted cash and cash equivalents, vehicle
|
55
|
|
|
17
|
|
Revenue earning
vehicles expenditures
|
(6,709)
|
|
|
(6,887)
|
|
Proceeds from
disposal of revenue earning vehicles
|
3,835
|
|
|
4,787
|
|
Capital asset
expenditures, non-vehicle
|
(103)
|
|
|
(72)
|
|
Proceeds from
disposal of property and other equipment
|
11
|
|
|
39
|
|
Proceeds from
issuance of vehicle debt
|
5,028
|
|
|
6,079
|
|
Repayments of vehicle
debt
|
(3,665)
|
|
|
(5,078)
|
|
Adjusted free cash
flow
|
$
|
(566)
|
|
|
$
|
(101)
|
|
Supplemental
Schedule V
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATIONS OF
GAAP TO NON-GAAP MEASURES - NET DEBT
|
Unaudited
|
|
|
As of June 30,
2017
|
|
As of December 31,
2016
|
(In
millions)
|
Vehicle
|
|
Non-Vehicle
|
|
Total
|
|
Vehicle
|
|
Non-Vehicle
|
|
Total
|
Debt as reported in
the balance sheet
|
$
|
11,176
|
|
|
$
|
5,633
|
|
|
$
|
16,809
|
|
|
$
|
9,646
|
|
|
$
|
3,895
|
|
|
$
|
13,541
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Debt issue costs deducted
from debt obligations(a)
|
33
|
|
|
44
|
|
|
77
|
|
|
36
|
|
|
37
|
|
|
73
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
—
|
|
|
1,141
|
|
|
1,141
|
|
|
—
|
|
|
816
|
|
|
816
|
|
Restricted
cash
|
183
|
|
|
834
|
|
|
1,017
|
|
|
235
|
|
|
—
|
|
|
235
|
|
Net debt
|
$
|
11,026
|
|
|
$
|
3,702
|
|
|
$
|
14,728
|
|
|
$
|
9,447
|
|
|
$
|
3,116
|
|
|
$
|
12,563
|
|
|
(a) Certain debt issue costs are required
to be reported as a deduction from the carrying amount of the
related debt obligation under GAAP. Management believes that
eliminating the effects that these costs have on debt will more
accurately reflect the Company's net debt position.
|
Supplemental
Schedule VI
|
HERTZ GLOBAL
HOLDINGS, INC.
RECONCILIATIONS OF
KEY METRICS
REVENUE,
UTILIZATION AND DEPRECIATION
Unaudited
U.S. Rental
Car
|
|
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
|
Six Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except as noted)
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,519
|
|
|
$
|
1,584
|
|
|
|
|
|
$
|
2,872
|
|
|
$
|
2,990
|
|
|
|
|
Ancillary retail
vehicle sales revenue
|
(24)
|
|
|
(18)
|
|
|
|
|
|
(46)
|
|
|
(37)
|
|
|
|
|
Total rental
revenue
|
$
|
1,495
|
|
|
$
|
1,566
|
|
|
|
|
|
$
|
2,826
|
|
|
$
|
2,953
|
|
|
|
|
Transaction days (in
thousands)
|
36,233
|
|
|
37,190
|
|
|
|
|
|
68,545
|
|
|
69,932
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
41.26
|
|
|
$
|
42.11
|
|
|
(2)%
|
|
|
|
$
|
41.23
|
|
|
$
|
42.23
|
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total rental
revenue
|
$
|
1,495
|
|
|
$
|
1,566
|
|
|
|
|
|
$
|
2,826
|
|
|
$
|
2,953
|
|
|
|
|
Average
vehicles
|
495,000
|
|
|
500,000
|
|
|
|
|
|
486,500
|
|
|
480,100
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
3,020
|
|
|
$
|
3,132
|
|
|
|
|
|
$
|
5,809
|
|
|
$
|
6,151
|
|
|
|
|
Number of months in
period
|
3
|
|
|
3
|
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Total RPU (in whole
dollars)
|
$
|
1,007
|
|
|
$
|
1,044
|
|
|
(4)%
|
|
|
|
$
|
968
|
|
|
$
|
1,025
|
|
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
36,233
|
|
|
37,190
|
|
|
|
|
|
68,545
|
|
|
69,932
|
|
|
|
|
Average vehicles
|
495,000
|
|
|
500,000
|
|
|
|
|
|
486,500
|
|
|
480,100
|
|
|
|
|
Number of days in
period
|
91
|
|
|
91
|
|
|
|
|
|
181
|
|
|
182
|
|
|
|
|
Available car days
(in thousands)
|
45,045
|
|
|
45,500
|
|
|
|
|
|
88,057
|
|
|
87,378
|
|
|
|
|
Vehicle
utilization(a)
|
80
|
%
|
|
82
|
%
|
|
(130)
|
|
bps
|
|
78
|
%
|
|
80
|
%
|
|
(220)
|
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Depreciation
Per Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges, net
|
$
|
524
|
|
|
$
|
417
|
|
|
|
|
|
$
|
1,023
|
|
|
$
|
836
|
|
|
|
|
Average
vehicles
|
495,000
|
|
|
500,000
|
|
|
|
|
|
486,500
|
|
|
480,100
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges, net divided by average
vehicles (in whole dollars)
|
$
|
1,059
|
|
|
$
|
834
|
|
|
|
|
|
$
|
2,103
|
|
|
$
|
1,741
|
|
|
|
|
Number of months in
period
|
3
|
|
|
3
|
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Net depreciation per
unit per month (in whole dollars)
|
$
|
353
|
|
|
$
|
278
|
|
|
27
|
%
|
|
|
$
|
351
|
|
|
$
|
290
|
|
|
21
|
%
|
|
|
|
(a)
|
Calculated as
transaction days divided by available car days.
|
Supplemental
Schedule VI (continued)
|
HERTZ GLOBAL
HOLDINGS, INC.
RECONCILIATIONS OF
KEY METRICS
REVENUE,
UTILIZATION AND DEPRECIATION
Unaudited
International Rental Car
|
|
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
|
Six Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except as noted)
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
543
|
|
|
$
|
540
|
|
|
|
|
|
$
|
955
|
|
|
$
|
973
|
|
|
|
|
Foreign currency
adjustment(a)
|
(23)
|
|
|
(41)
|
|
|
|
|
|
(35)
|
|
|
(60)
|
|
|
|
|
Total rental
revenue
|
$
|
520
|
|
|
$
|
499
|
|
|
|
|
|
$
|
920
|
|
|
$
|
913
|
|
|
|
|
Transaction days (in
thousands)
|
13,235
|
|
|
12,511
|
|
|
|
|
|
23,419
|
|
|
22,613
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
39.29
|
|
|
$
|
39.88
|
|
|
(1)%
|
|
|
|
$
|
39.28
|
|
|
$
|
40.38
|
|
|
(3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total rental
revenue
|
$
|
520
|
|
|
$
|
499
|
|
|
|
|
|
$
|
920
|
|
|
$
|
913
|
|
|
|
|
Average
vehicles
|
186,100
|
|
|
178,600
|
|
|
|
|
|
168,300
|
|
|
163,300
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
2,794
|
|
|
$
|
2,794
|
|
|
|
|
|
$
|
5,466
|
|
|
$
|
5,591
|
|
|
|
|
Number of months in
period
|
3
|
|
|
3
|
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Total RPU (in whole
dollars)
|
$
|
931
|
|
|
$
|
931
|
|
|
—
|
%
|
|
|
$
|
911
|
|
|
$
|
932
|
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
13,235
|
|
|
12,511
|
|
|
|
|
|
23,419
|
|
|
22,613
|
|
|
|
|
Average vehicles
|
186,100
|
|
|
178,600
|
|
|
|
|
|
168,300
|
|
|
163,300
|
|
|
|
|
Number of days in
period
|
91
|
|
|
91
|
|
|
|
|
|
181
|
|
|
182
|
|
|
|
|
Available car days
(in thousands)
|
16,935
|
|
|
16,253
|
|
|
|
|
|
30,462
|
|
|
29,721
|
|
|
|
|
Vehicle
utilization(b)
|
78
|
%
|
|
77
|
%
|
|
120
|
|
bps
|
|
77
|
%
|
|
76
|
%
|
|
80
|
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Depreciation
Per Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges, net
|
$
|
100
|
|
|
$
|
98
|
|
|
|
|
|
$
|
185
|
|
|
$
|
184
|
|
|
|
|
Foreign currency
adjustment (a)
|
(4)
|
|
|
(8)
|
|
|
|
|
|
(6)
|
|
|
(12)
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges, net
|
$
|
96
|
|
|
$
|
90
|
|
|
|
|
|
$
|
179
|
|
|
$
|
172
|
|
|
|
|
Average
vehicles
|
186,100
|
|
|
178,600
|
|
|
|
|
|
168,300
|
|
|
163,300
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges, net divided by
average vehicles (in whole dollars)
|
$
|
516
|
|
|
$
|
504
|
|
|
|
|
|
$
|
1,064
|
|
|
$
|
1,053
|
|
|
|
|
Number of months in
period
|
3
|
|
|
3
|
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Net depreciation per
unit per month (in whole dollars)
|
$
|
172
|
|
|
$
|
168
|
|
|
2
|
%
|
|
|
$
|
177
|
|
|
$
|
176
|
|
|
1
|
%
|
|
(a)
|
Based on
December 31, 2016 foreign exchange rates.
|
(b)
|
Calculated as
transaction days divided by available car days.
|
Supplemental
Schedule VI (continued)
|
HERTZ GLOBAL
HOLDINGS, INC.
RECONCILIATIONS OF
KEY METRICS
REVENUE,
UTILIZATION AND DEPRECIATION
Unaudited
Worldwide Rental
Car
|
|
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
|
Six Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except as noted)
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
2,062
|
|
|
$
|
2,124
|
|
|
|
|
|
$
|
3,827
|
|
|
$
|
3,963
|
|
|
|
|
Ancillary retail
vehicle sales revenue
|
(24)
|
|
|
(18)
|
|
|
|
|
|
(46)
|
|
|
(37)
|
|
|
|
|
Foreign currency
adjustment(a)
|
(23)
|
|
|
(41)
|
|
|
|
|
|
(35)
|
|
|
(60)
|
|
|
|
|
Total rental
revenue
|
$
|
2,015
|
|
|
$
|
2,065
|
|
|
|
|
|
$
|
3,746
|
|
|
$
|
3,866
|
|
|
|
|
Transaction days (in
thousands)
|
49,468
|
|
|
49,701
|
|
|
|
|
|
91,964
|
|
|
92,545
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
40.73
|
|
|
$
|
41.55
|
|
|
(2)%
|
|
|
|
$
|
40.73
|
|
|
$
|
41.77
|
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total rental
revenue
|
$
|
2,015
|
|
|
$
|
2,065
|
|
|
|
|
|
$
|
3,746
|
|
|
$
|
3,866
|
|
|
|
|
Average
vehicles
|
681,100
|
|
|
678,600
|
|
|
|
|
|
654,800
|
|
|
643,400
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
2,958
|
|
|
$
|
3,043
|
|
|
|
|
|
$
|
5,721
|
|
|
$
|
6,009
|
|
|
|
|
Number of months in
period
|
3
|
|
|
3
|
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Total RPU (in whole
dollars)
|
$
|
986
|
|
|
$
|
1,014
|
|
|
(3)%
|
|
|
|
$
|
954
|
|
|
$
|
1,002
|
|
|
(5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
49,468
|
|
|
49,701
|
|
|
|
|
|
91,964
|
|
|
92,545
|
|
|
|
|
Average vehicles
|
681,100
|
|
|
678,600
|
|
|
|
|
|
654,800
|
|
|
643,400
|
|
|
|
|
Number of days in
period
|
91
|
|
|
91
|
|
|
|
|
|
181
|
|
|
182
|
|
|
|
|
Available car days
(in thousands)
|
61,980
|
|
|
61,753
|
|
|
|
|
|
118,519
|
|
|
117,099
|
|
|
|
|
Vehicle
utilization(b)
|
80
|
%
|
|
80
|
%
|
|
(70)
|
|
bps
|
|
78
|
%
|
|
79
|
%
|
|
(140)
|
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Depreciation
Per Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges, net
|
$
|
624
|
|
|
$
|
515
|
|
|
|
|
|
$
|
1,208
|
|
|
$
|
1,020
|
|
|
|
|
Foreign currency
adjustment (a)
|
(4)
|
|
|
(8)
|
|
|
|
|
|
(6)
|
|
|
(12)
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges, net
|
$
|
620
|
|
|
$
|
507
|
|
|
|
|
|
$
|
1,202
|
|
|
$
|
1,008
|
|
|
|
|
Average
vehicles
|
681,100
|
|
|
678,600
|
|
|
|
|
|
654,800
|
|
|
643,400
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges, net divided by
average vehicles (in whole dollars)
|
$
|
910
|
|
|
$
|
747
|
|
|
|
|
|
$
|
1,836
|
|
|
$
|
1,567
|
|
|
|
|
Number of months in
period
|
3
|
|
|
3
|
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Net depreciation per
unit per month (in whole dollars)
|
$
|
303
|
|
|
$
|
249
|
|
|
22
|
%
|
|
|
$
|
306
|
|
|
$
|
261
|
|
|
17
|
%
|
|
Note: Worldwide
Rental Car represents U.S. Rental Car and International Rental Car
segment information on a combined basis and excludes our All Other
Operations segment, which is primarily comprised of our Donlen
leasing operations, and Corporate.
|
|
|
(a)
|
Based on
December 31, 2016 foreign exchange rates.
|
(b)
|
Calculated as
transaction days divided by available car days.
|
NON-GAAP MEASURES AND KEY METRICS - DEFINITIONS AND
USE
Hertz Global is the top-level holding company and The Hertz
Corporation is Hertz Global's primary operating company. The term
"GAAP" refers to accounting principles generally accepted in
the United States of America.
Definitions of non-GAAP measures are set forth below. Also set
forth below is a summary of the reasons why management of the
Company believes that the presentation of the non-GAAP financial
measures included in the Earnings Release provide useful
information regarding the Company's financial condition and results
of operations and additional purposes, if any, for which management
of the Company utilizes the non-GAAP measures.
Adjusted Pre-Tax Income (Loss) and Adjusted Pre-tax
Margin
Adjusted pre-tax income (loss) is calculated as income (loss)
from continuing operations before income taxes plus non-cash
acquisition accounting charges, debt-related charges relating to
the amortization and write-off of debt financing costs and debt
discounts, goodwill, intangible and tangible asset impairments and
write-downs and certain one-time charges and non-operational items.
Adjusted pre-tax income (loss) is important because it allows
management to assess operational performance of the Company's
business, exclusive of the items mentioned above. It also allows
management to assess the performance of the entire business on the
same basis as the segment measure of profitability. Management
believes it is important to investors for the same reasons it is
important to management and because it allows them to assess the
operational performance of the Company on the same basis that
management uses internally. When evaluating the Company's operating
performance, investors should not consider adjusted pre-tax income
(loss) in isolation of, or as a substitute for, measures of the
Company's financial performance, such as net income (loss) from
continuing operations or income (loss) from continuing operations
before income taxes. Adjusted pre-tax margin is adjusted pre-tax
income (loss) divided by total revenues.
Adjusted Net Income (Loss)
Adjusted net income (loss) is calculated as adjusted pre-tax
income (loss) less a provision for income taxes derived utilizing a
combined statutory rate of 37%. The combined statutory rate is
management's estimate of the Company's long-term tax rate. Adjusted
net income (loss) is important to management and investors because
it represents the Company's operational performance exclusive of
the effects of purchase accounting, debt-related charges, one-time
charges and items that are not operational in nature or comparable
to those of the Company's competitors.
Adjusted Earnings (Loss) Per Diluted Share ("Adjusted
EPS")
Adjusted earnings (loss) per diluted share is calculated as
adjusted net income divided by the weighted average number of
diluted shares outstanding for the period. Adjusted earnings
(loss) per diluted share is important to management and investors
because it represents a measure of the Company's operational
performance exclusive of the effects of purchase accounting
adjustments, debt-related charges, one-time charges and items that
are not operational in nature or comparable to those of the
Company's competitors.
Adjusted Free Cash Flow
Adjusted free cash flow is calculated as net cash provided by
operating activities from continuing operations, including the
change in restricted cash and cash equivalents related to vehicles,
net revenue earning vehicle and capital asset expenditures and the
net impact of vehicle financing activities. Adjusted free cash flow
is important to management and investors as it provides useful
information about the amount of cash available for acquisitions and
the reduction of non-vehicle debt. When evaluating the Company's
liquidity, investors should not consider Adjusted free cash flow in
isolation of, or as a substitute for, a measure of the Company's
liquidity as determined in accordance with GAAP, such as net cash
provided by operating activities.
Available Car Days
Available Car Days is calculated as average vehicles multiplied
by the number of days in a period.
Average Vehicles
Average Vehicles, also known as "fleet capacity", is determined
using a simple average of the number of vehicles in our fleet
whether owned or leased by the Company at the beginning and end of
a given period. Among other things, average vehicles is used to
calculate Vehicle Utilization which represents the portion of the
Company's vehicles that are being utilized to generate revenue.
Earnings Before Interest, Taxes, Depreciation and
Amortization ("Gross EBITDA"), Corporate EBITDA, Adjusted Corporate
EBITDA and Adjusted Corporate EBITDA Margin
Gross EBITDA is defined as net income (loss) from continuing
operations before net interest expense, income taxes and
depreciation (which includes lease charges on revenue earning
vehicles) and amortization. Corporate EBITDA, as presented herein,
represents Gross EBITDA as adjusted for vehicle debt interest,
vehicle depreciation and vehicle debt-related charges.
Adjusted Corporate EBITDA, as presented herein, represents
Corporate EBITDA as adjusted for certain other items, as described
in more detail in the accompanying schedules.
Management uses Gross EBITDA, Corporate EBITDA and Adjusted
Corporate EBITDA as operating performance metrics for internal
monitoring and planning purposes, including the preparation of the
Company's annual operating budget and monthly operating reviews, as
well as to facilitate analysis of investment decisions,
profitability and performance trends. Further, Gross EBITDA enables
management and investors to isolate the effects on profitability of
operating metrics such as revenue, direct vehicle and operating
expenses and selling, general and administrative expenses, which
enables management and investors to evaluate the Company's business
segments that are financed differently and have different
depreciation characteristics and compare the Company's performance
against companies with different capital structures and
depreciation policies. We also present Adjusted Corporate EBITDA as
a supplemental measure because such information is utilized in the
determination of certain executive compensation.
Gross EBITDA, Corporate EBITDA, Adjusted Corporate EBITDA and
Adjusted Corporate EBITDA Margin are not recognized measurements
under U.S. GAAP. When evaluating the Company's operating
performance, investors should not consider Gross EBITDA, Corporate
EBITDA and Adjusted Corporate EBITDA in isolation of, or as a
substitute for, measures of the Company's financial performance as
determined in accordance with GAAP, such as net income (loss)
from continuing operations or income (loss) from continuing
operations before income taxes.
Adjusted Corporate EBITDA Margin is calculated as the ratio of
Adjusted Corporate EBITDA to total revenues and is used by the
Compensation Committee to determine certain executive compensation,
primarily in the form of PSUs.
Fleet Growth
U.S. and International Rental Car segments fleet growth is
defined as revenue earning vehicles expenditures, net of proceeds
from disposals, plus vehicle depreciation and net vehicle financing
which includes borrowings, repayments and the change in restricted
cash associated with vehicles.
Net Non-Vehicle Debt
Net non-vehicle debt is calculated as non-vehicle debt as
reported on the Company's balance sheet, excluding the impact of
unamortized debt issue costs associated with non-vehicle debt, less
cash and equivalents and restricted cash associated with the
issuance of the Senior Second Priority Secured Notes. Non-vehicle
debt consists of the Company's Senior Term Loan, Senior RCF, Senior
Notes, Senior Second Priority Secured Notes, Promissory Notes and
certain other non-vehicle indebtedness of its domestic and foreign
subsidiaries.
Net non-vehicle debt is important to management and investors as
it helps measure the Company's leverage. Net non-vehicle debt also
assists in the evaluation of the Company's ability to service its
non-vehicle debt without reference to the expense associated with
the vehicle debt, which is collateralized by assets not available
to lenders under the non-vehicle debt facilities.
Net Vehicle Debt
Net vehicle debt is calculated as vehicle debt as reported on
the Company's balance sheet, excluding the impact of unamortized
debt issue costs associated with vehicle debt, less cash and
equivalents and restricted cash associated with vehicles. This
measure is important to management, investors and ratings agencies
as it helps measure the Company's leverage with respect to its
vehicle debt.
Net Depreciation Per Unit Per Month
Net depreciation per unit per month is calculated by dividing
depreciation of revenue earning vehicles and lease charges, net by
the average vehicles in each period and then dividing by the number
of months in the period reported with all periods adjusted to
eliminate the effect of fluctuations in foreign currency exchange
rates. Management believes eliminating the effect of fluctuations
in foreign currency exchange rates is appropriate so as not to
affect the comparability of underlying trends. Net depreciation per
unit per month represents the amount of average depreciation
expense and lease charges, net per vehicle per month.
Restricted Cash Associated with Vehicle Debt (used in the
calculation of Net Vehicle Debt)
Restricted cash associated with vehicle debt is restricted for
the purchase of revenue earning vehicles and other specified uses
under the Company's vehicle debt facilities and its vehicle rental
like-kind exchange program.
Total Net Debt
Total net debt is calculated as total debt less total cash and
cash equivalents and restricted cash associated with vehicle debt.
This measure is important to management, investors and ratings
agencies as it helps measure the Company's gross leverage.
Total RPD (also referred to as "pricing")
Total RPD is calculated as total revenue less ancillary revenue
associated with retail vehicle sales, divided by the total number
of transaction days, with all periods adjusted to eliminate the
effect of fluctuations in foreign currency exchange rates. The
Company's management believes eliminating the effect of
fluctuations in foreign currency exchange rates is appropriate so
as not to affect the comparability of underlying trends. This
metric is important to the Company's management and investors as it
represents a measurement of the changes in underlying pricing in
the vehicle rental business and encompasses the elements in vehicle
rental pricing that management has the ability to control.
Total Revenue Per Unit Per Month ("Total RPU")
Total revenue per unit per month is calculated as total revenues
less ancillary revenue associated with retail vehicle sales divided
by the average vehicles in each period and then dividing by the
number of months in the period reported with all periods adjusted
to eliminate the effect of fluctuations in foreign currency
exchange rates. Management believes eliminating the effect of
fluctuations in foreign currency exchange rates is appropriate so
as not to affect the comparability of underlying trends. This
metric is important to the Company's management and investors as it
provides a measure of revenue productivity relative to fleet
capacity.
Transaction Days
Transaction days, also known as volume, represent the total
number of 24-hour periods, with any partial period counted as one
transaction day, that vehicles were on rent (the period between
when a rental contract is opened and closed) in a given period.
Thus, it is possible for a vehicle to attain more than one
transaction day in a 24-hour period.
Vehicle Utilization
Vehicle utilization is calculated by dividing total transaction
days by the available car days.
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SOURCE The Hertz Corporation