ESTERO, Fla., Aug. 10, 2015 /PRNewswire/ --
Consolidated(1)
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except per share data)
|
2015
|
|
2014
|
|
|
Total
Revenues
|
$
|
2,692
|
|
|
$
|
2,830
|
|
|
(5)%
|
|
|
Net income
(loss)
|
$
|
23
|
|
|
$
|
72
|
|
|
(68)%
|
|
|
Earnings (loss) per
diluted share
|
$
|
0.05
|
|
|
$
|
0.15
|
|
|
(67)%
|
|
|
Net income
margin
|
1%
|
|
|
3%
|
|
|
(169)
|
|
bps
|
|
|
|
|
|
|
|
Adjusted net income
(loss)
|
$
|
88
|
|
|
$
|
132
|
|
|
(33)%
|
|
|
Adjusted net income
(loss) per diluted share
|
$
|
0.19
|
|
|
$
|
0.28
|
|
|
(32)%
|
|
|
Adjusted net income
margin
|
3%
|
|
|
5%
|
|
|
(140)
|
|
bps
|
|
|
|
|
|
|
|
Corporate
EBITDA
|
$
|
379
|
|
|
$
|
446
|
|
|
(15)%
|
|
|
Corporate EBITDA
margin
|
14%
|
|
|
16%
|
|
|
(168)
|
|
bps
|
|
|
|
|
|
|
|
Worldwide Car Rental
average fleet
|
685,400
|
|
|
674,800
|
|
|
2%
|
|
|
Hertz Global Holdings, Inc. (NYSE: HTZ) ("Hertz Global" or the
"Company") today reported net income of $23
million, or $0.05 per diluted
share, for the second quarter 2015, compared with net income of
$72 million, or $0.15 per diluted share, for the same period last
year. The Company also reported that adjusted net income for the
second quarter 2015 was $88 million,
or $0.19 per diluted share, compared
with $132 million, or $0.28 per diluted share, for the same period last
year. Total revenues for the second quarter 2015 were $2.7 billion versus $2.8
billion for the same period last year. Corporate
EBITDA for the second quarter of 2015 was $379 million versus $446
million in the second quarter of 2014.
"The second quarter demonstrates early progress in our efforts
to drive performance improvement," said John Tague, chief executive officer. "Margins in
our U.S. Rental Car business were stable year-over-year, and Total
Revenue Per Transaction Day, excluding ancillary fuel, returned to
prior-year levels.
"Importantly, our customer satisfaction scores rose
substantially during the quarter, and I want to thank our employees
for the work they continue to do to take excellent care of our
customers. With a substantially improved fleet overall, our
employees are positioned to continue providing exceptional customer
service."
KEY MILESTONES IN THE SECOND QUARTER LAY THE FOUNDATION
FOR SECOND HALF 2015 IMPROVEMENT
During the second quarter of 2015, Hertz Global achieved several
key milestones that position the Company well for the second half
of the year:
- During the quarter, Hertz Global continued to right-size U.S.
Car Rental capacity and ended the period with fleet aligned with
demand as evidenced by early indications of third-quarter,
fleet-efficiency metrics.
- Excluding ancillary fuel sales, U.S. Car Rental Total Revenue
Per Transaction Day (RPD) was flat year-over-year.
- Hertz Global continued implementation of its fleet renewal
strategy across all of its brands. During the quarter, the
Company added approximately 125,000 new vehicles and disposed of
approximately 120,000 risk and repurchase vehicles. As of the end
of the second quarter, the U.S. Car Rental fleet has been
significantly renewed since September 2014.
- While executing on the fleet refresh, U.S. Car Rental net
depreciation per unit per month was flat year-over-year, reflecting
an enhanced focus on fleet management and execution. This was
accomplished while also increasing the mix of program cars by 13
percentage points to 29% of total average fleet.
- Excluding effects of foreign currency rates, International Car
Rental revenues increased 4% during the second quarter of 2015.
Excluding special charges pertaining to a litigation matter and
other related one-time charges, earnings were essentially flat
year-over-year.
- Hertz Equipment Rental (HERC) total revenue was down 2% for the
second quarter. Excluding negative foreign currency impact,
revenues were up 1% versus prior year. Excluding
negative foreign currency impact and the effect of lower sales in
upstream oil and gas markets, HERC revenues were up 6% in the
second quarter.
- Hertz Global continues to make significant progress in reducing
its costs by $300 million annually in
2016, $200 million of which is
expected to be realized in 2015. In the first half of the
year, the Company realized approximately $80
million in cost savings.
U.S. CAR RENTAL TOTAL REVENUE PER TRANSACTION DAY (TOTAL RPD)
FLAT YEAR-OVER-YEAR, EXCLUDING ANCILLARY FUEL
U.S. Car
Rental(1)
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except Total RPD and Net depreciation per unit per
month)
|
2015
|
|
2014
|
|
|
Total
Revenues
|
$
|
1,615
|
|
|
$
|
1,663
|
|
|
(3)%
|
|
|
Adjusted pre-tax
income (loss)
|
$
|
174
|
|
|
$
|
184
|
|
|
(5)%
|
|
|
Adjusted pre-tax
income margin
|
11%
|
|
|
11%
|
|
|
(29)
|
|
bps
|
|
|
|
|
|
|
|
Corporate
EBITDA
|
$
|
203
|
|
|
$
|
221
|
|
|
(8)%
|
|
|
Corporate EBITDA
margin
|
13%
|
|
|
13%
|
|
|
(72)
|
|
bps
|
|
|
|
|
|
|
|
Average
fleet
|
511,700
|
|
|
502,500
|
|
|
2%
|
|
|
Transaction days (in
thousands)
|
34,977
|
|
|
35,850
|
|
|
(2)%
|
|
|
Total RPD
|
$
|
45.80
|
|
|
$
|
46.19
|
|
|
(1)%
|
|
|
Net depreciation per
unit per month
|
$
|
259
|
|
|
$
|
259
|
|
|
—%
|
|
|
Total U.S. Car Rental revenues were $1,615 million in
the second quarter of 2015, down 3% from the second
quarter of 2014 as a result of a 2% overall decline in
transaction days. This decline was attributable to a decrease
in airport rental volume, as well as a decrease in off-airport
rental volume due in part to the closure of approximately 200
stores. Total RPD declined 1% driven predominantly by lower
fuel-related ancillary revenue. Excluding the impact of
ancillary fuel sales, U.S. Car Rental Total RPD was flat for the
quarter compared to the same period last year. The revenue
reduction experienced during the quarter was partially offset by a
5% reduction in direct operating expense versus the same period
last year. Net depreciation expense increased 2% versus last
year, due primarily to a larger fleet, while net depreciation per
unit per month remained flat year-over-year.
U.S. Car Rental adjusted pre-tax income for the second quarter
of 2015 was $174 million, a decrease
of $10 million versus the prior year period. U.S.
Car Rental achieved an adjusted pre-tax margin of 11% for the
quarter, which was 29 basis points lower than the prior-year
period. Corporate EBITDA for the U.S. Car Rental segment for the
second quarter of 2015 was $203
million versus $221 million in
the second quarter of 2014.
INTERNATIONAL CAR RENTAL RESULTS LOWER DUE PRIMARILY TO THE
IMPACT OF FOREIGN CURRENCY
International Car
Rental(1)
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except Total RPD and Net depreciation per unit per
month)
|
2015
|
|
2014
|
|
|
Total
Revenues
|
$
|
556
|
|
|
$
|
641
|
|
|
(13)%
|
|
|
Adjusted pre-tax
income (loss)
|
$
|
45
|
|
|
$
|
57
|
|
|
(21)%
|
|
|
Adjusted pre-tax
income margin
|
8%
|
|
|
9%
|
|
|
(80)
|
|
bps
|
|
|
|
|
|
|
|
Corporate
EBITDA
|
$
|
54
|
|
|
$
|
68
|
|
|
(21)%
|
|
|
Corporate EBITDA
margin
|
10%
|
|
|
11%
|
|
|
(90)
|
|
bps
|
|
|
|
|
|
|
|
Average
fleet
|
173,700
|
|
|
172,300
|
|
|
1%
|
|
|
Transaction days (in
thousands)
|
12,523
|
|
|
12,096
|
|
|
4%
|
|
|
Total RPD
|
$
|
47.59
|
|
|
$
|
47.45
|
|
|
—%
|
|
|
Net depreciation per
unit per month
|
$
|
207
|
|
|
$
|
215
|
|
|
(4)%
|
|
|
Total International Car Rental revenues were $556 million in the second quarter of 2015, down
13% from the second quarter of 2014. This decrease was
primarily due to the unfavorable year-over-year impact of foreign
currency, which reduced revenues by $105
million. Excluding the impact of foreign currency, revenues
increased $20 million, or 4%.
Revenue growth was driven by a 4% increase in transaction days
resulting from improved business mix from U.S.-source rentals,
primarily in our Europe market.
Revenues in the second quarter of 2015 were negatively impacted by
lower fuel revenues as a result of lower market prices and a change
in fuel purchase plans sold in the Europe market that took effect late in the
second quarter of 2014. Total RPD for the segment remained flat
year-over-year, excluding currency effects.
International Car Rental adjusted pre-tax income for the second
quarter of 2015 was $45 million, a
decrease of $12 million versus the prior year period, of
which $11 million was the result of
legal reserve and other related one-time write-offs. Corporate
EBITDA for the International Car Rental segment for the second
quarter of 2015 was $54 million
versus $68 million in the second
quarter of 2014.
WORLDWIDE EQUIPMENT RENTAL IMPACTED BY FOREIGN CURRENCY RATES
AND WEAKNESS IN UPSTREAM OIL AND GAS MARKETS
Worldwide
Equipment Rental(1)
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in
millions)
|
2015
|
|
2014
|
|
|
Total
Revenues
|
$
|
375
|
|
|
$
|
384
|
|
|
(2)%
|
|
|
Adjusted pre-tax
income (loss)
|
$
|
42
|
|
|
$
|
67
|
|
|
(37)%
|
|
|
Adjusted pre-tax
income margin
|
11%
|
|
|
17%
|
|
|
(625)
|
|
bps
|
|
|
|
|
|
|
|
Corporate
EBITDA
|
$
|
147
|
|
|
$
|
166
|
|
|
(11)%
|
|
|
Corporate EBITDA
margin
|
39%
|
|
|
43%
|
|
|
(403)
|
|
bps
|
|
|
|
|
|
|
|
Dollar
utilization
|
34%
|
|
|
35%
|
|
|
N/A
|
|
|
Time
utilization
|
63%
|
|
|
63%
|
|
|
N/A
|
|
|
Same store revenue
growth
|
(1)%
|
|
|
4%
|
|
|
N/A
|
|
|
|
N/A Not
applicable
|
Total Worldwide Equipment Rental revenues were $375 million for the second quarter of 2015, down
2% compared with the prior-year period. Excluding the impact
of foreign currency, revenue increased $3
million, or 1%. Revenue was negatively affected by
accelerating weakness in upstream oil and gas markets during the
quarter. Excluding both foreign currency and the impact of
weakness in upstream oil and gas energy markets, revenue was up
6%.
Worldwide revenues for the second quarter were favorably
impacted by a 2% increase in worldwide equipment rental volumes.
The increase in volume was driven by new account growth, which is
predominantly derived from small local contractors and specialty
segments as we diversify our business. Pricing for the second
quarter was up 1% year-over-year.
Worldwide Equipment Rental adjusted pre-tax income for the
second quarter of 2015 was $42
million, a decrease of $25 million from $67
million in the prior year period. Corporate EBITDA for
the Worldwide Equipment Rental segment for the second quarter of
2015 was $147 million versus
$166 million in the second quarter of
2014.
DONLEN DRIVES CONTINUED STRENGTH IN ALL OTHER
OPERATIONS
All Other
Operations (1)
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in
millions)
|
2015
|
|
2014
|
|
|
Total
Revenues
|
$
|
146
|
|
|
$
|
142
|
|
|
3%
|
|
|
Adjusted pre-tax
income (loss)
|
$
|
17
|
|
|
$
|
15
|
|
|
13%
|
|
|
Adjusted pre-tax
income margin
|
12%
|
|
|
11%
|
|
|
108
|
|
bps
|
|
|
|
|
|
|
|
Corporate
EBITDA
|
$
|
15
|
|
|
$
|
14
|
|
|
7%
|
|
|
Corporate EBITDA
margin
|
10%
|
|
|
10%
|
|
|
41
|
|
bps
|
All Other Operations segment revenues were $146
million for the second quarter of 2015, an increase of 3% from
the prior year period, primarily due to increased volumes in the
Company's Donlen operations. All Other Operations adjusted
pre-tax income for the second quarter of 2015 was $17 million, an increase of $2
million versus the prior year period. Corporate EBITDA
for the All Other Operations segment for the second quarter of 2015
was $15 million versus $14 million in the prior-year period.
HERTZ GLOBAL REAFFIRMS $1
BILLION SHARE REPURCHASE PROGRAM AND HERTZ EQUIPMENT RENTAL
CORPORATION SEPARATION
Hertz Global reaffirmed its commitment to its previously
announced $1 billion share repurchase
program and outlined its intent to execute consistent with
announced year-end 2016 leverage targets, cash flow generation and
other actions such as the contemplated sale of Hertz Equipment
Rental Corporation ("HERC") operations in France and Spain, and the ultimate spin-off of HERC.
As previously communicated, Hertz Global remains committed to
the separation of its equipment rental business. It is anticipated
that the net cash received in connection with the HERC separation
will be used to pay down Hertz Global debt and support additional
share repurchases. The Company has put in place new leadership team
at HERC that is focused on delivering performance improvement in
the core business and enabling profitable growth.
PROGRESS CONTINUES ON COST REDUCTION PROGRAM
Hertz Global recently reaffirmed and increased its
annualized cost savings goal to $300 million, with
approximately $200 million being realized in calendar
year 2015. Through the first six months of 2015, the Company
has realized approximately $80 million of the intended cost
savings. The identified cost savings are expected to come largely
from reductions in corporate and operations overhead, fleet
management efficiency, and disciplined sales and marketing
spending. Hertz Global expects to incur $30 million to
$35 million of costs in 2015 in
connection with these actions, of which $5
million to $10
million will be reflected in adjusted pre-tax income in
2015.
Hertz Global's cost and operations review is ongoing, with the
potential for additional savings as a result of technology-enabled
efficiencies, as well as other opportunities to improve
productivity and effectiveness across the Company.
HERTZ GLOBAL MAINTAINS 2015 GUIDANCE
For the full year 2015, the Company forecasts the following:
|
Full Year 2015
Forecast
|
Corporate EBITDA -
Consolidated HGH(2)
|
$1,450M -
$1,550M
|
Corporate EBITDA -
Worldwide Equipment Rental segment(2)
|
$575M -
$625M
|
U.S. RAC depreciation
per unit per month
|
$295 -
$305
|
U.S. RAC fleet
capacity growth*
|
0.5% -
1.5%
|
Net non-fleet
capex
|
$275M -
$295M
|
* Excludes
Advantage sublease and Hertz 24/7 vehicles
|
RESULTS OF THE HERTZ CORPORATION
Hertz Global's operating subsidiary, The Hertz Corporation,
posted the same revenues and GAAP pre-tax income for the second
quarter of 2015 as the Company.
(1) Adjusted pre-tax income, adjusted pre-tax margin, Corporate
EBITDA, Corporate EBITDA margin, adjusted net income, adjusted
diluted earnings per share, total revenue per transaction day and
net depreciation per unit per month are non-GAAP measures. See
the accompanying Supplemental Schedules and Definitions for the
reconciliations and definitions for each of these non-GAAP measures
and the reason the Company's management believes that these
measures provide useful information to investors.
(2) Because of the forward-looking nature of the Company's
Corporate EBITDA forecast, specific quantifications of the amounts
that would be required to reconcile a pre-tax income forecast are
not available. The Company believes that there is a degree of
volatility with respect to certain of the Company's GAAP measures,
primarily related to fair value accounting for its financial assets
(which includes the Company's derivative financial instruments),
its income tax reporting and certain adjustments made to arrive at
the relevant non-GAAP measures, which preclude the Company from
providing accurate forecast of GAAP to non-GAAP
reconciliations. Based on the above, the Company believes that
providing estimates of the amounts that would be required to
reconcile the range of the non-GAAP Corporate EBITDA would imply a
degree of precision that would be confusing or misleading to
investors for the reasons identified above.
EARNINGS WEBCAST INFORMATION
Hertz Global's second quarter 2015 earnings webcast will be held
on August 11, 2015, at 8:00 a.m. U.S. Eastern. The press 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 GLOBAL
Hertz Global operates the Hertz, Dollar, Thrifty and Firefly car
rental brands in more than 10,300 corporate and licensee locations
throughout approximately 150 countries in North America, Europe, Latin
America, Asia, Australia, Africa, the Middle
East and New Zealand. Hertz
Global is the largest worldwide airport general use car rental
company with more than 1,600 airport locations in the U.S. and more
than 1,300 airport locations internationally. Product and service
initiatives such as Hertz Gold Plus Rewards, NeverLost®,
Carfirmations, Mobile Wi-Fi and unique vehicles offered
through the Adrenaline, Dream, Green and Prestige Collections set
Hertz Global apart from the competition. Additionally, Hertz
Global owns the vehicle leasing and fleet management leader Donlen
Corporation, operates the Hertz 24/7 hourly car rental business and
sells vehicles through its Rent2Buy program. The Company also owns
Hertz Equipment Rental Corporation ("HERC"), one of the largest
equipment rental businesses with more than 350 locations worldwide
offering a diverse line of equipment and tools for rent and sale.
HERC primarily serves the construction, industrial, oil, gas,
entertainment and government sectors. For more information about
Hertz Global, 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. Among other items,
such factors could include: the effect of the restatement of our
previously issued financial results for the years ended
December 31, 2012 and 2013 and any
claims, investigations or proceedings arising as a result; our
ability to remediate the material weaknesses in our 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 our proposed separation of our equipment
rental business and ability to obtain the expected benefits of any
related transaction; significant changes in the competitive
environment, including as a result of industry consolidation, and
the effect of competition in our markets on rental volume and
pricing, including on our pricing policies or use of incentives;
occurrences that disrupt rental activity during our peak periods;
our ability to achieve and maintain cost savings and efficiencies
and realize opportunities to increase productivity and
profitability; an increase in our fleet costs as a result of an
increase in the cost of new vehicles and/or a decrease in the price
at which we dispose of used vehicles either in the used vehicle
market or under repurchase or guaranteed depreciation programs; our
ability to accurately estimate future levels of rental activity and
adjust the size and mix of our fleet accordingly; our ability to
maintain sufficient liquidity and the availability to us of
additional or continued sources of financing for our revenue
earning equipment and to refinance our existing indebtedness; our
ability to integrate the car rental operations of Dollar Thrifty
and realize operational efficiencies from the acquisition; our
ability to maintain access to third-party distribution channels,
including current or favorable prices, commission structures and
transaction volumes; the operational and profitability impact of
the divestitures that we agreed to undertake in order to secure
regulatory approval for the acquisition of Dollar Thrifty; an
increase in our fleet costs or disruption to our rental activity,
particularly during our peak periods, due to safety recalls by the
manufacturers of our vehicles and equipment; a major disruption in
our communication or centralized information networks; financial
instability of the manufacturers of our vehicles and equipment,
which could impact their ability to perform under agreements with
us and/or their willingness or ability to make cars available to us
or the car rental industry on commercially reasonable terms; any
impact on us from the actions of our franchisees, dealers and
independent contractors; our ability to maintain profitability
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; our ability to successfully integrate acquisitions and
complete dispositions; our ability to maintain favorable brand
recognition; costs and risks associated with litigation and
investigations; risks related to our indebtedness, including our
substantial amount of debt, our ability to incur substantially more
debt and increases in interest rates or in our borrowing margins;
our ability to meet the financial and other covenants contained in
our Senior Credit Facilities, our outstanding unsecured Senior
Notes and certain asset-backed and asset-based arrangements;
changes in accounting principles, or their application or
interpretation, and our ability to make accurate estimates and the
assumptions underlying the estimates, which could have an effect on
earnings; 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 our
operations, the cost thereof or applicable tax rates; changes to
our senior management team; the effect of tangible and intangible
asset impairment charges; our exposure to uninsured claims in
excess of historical levels; fluctuations in interest rates and
commodity prices; and our exposure to fluctuations in foreign
exchange rates.
Additional information concerning these and other factors can be
found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report 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,
|
|
Six Months
Ended
June 30,
|
(In millions, except
per share data)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Total
revenues
|
$
|
2,692
|
|
|
$
|
2,830
|
|
|
$
|
5,145
|
|
|
$
|
5,366
|
|
Expenses:
|
|
|
|
|
|
|
|
Direct
operating
|
1,505
|
|
|
1,594
|
|
|
2,913
|
|
|
3,037
|
|
Depreciation of
revenue earning equipment and lease charges, net
|
696
|
|
|
708
|
|
|
1,403
|
|
|
1,434
|
|
Selling, general and
administrative
|
295
|
|
|
264
|
|
|
560
|
|
|
541
|
|
Interest expense,
net
|
156
|
|
|
164
|
|
|
310
|
|
|
320
|
|
Other (income)
expense, net
|
(10)
|
|
|
(21)
|
|
|
(4)
|
|
|
(24)
|
|
Total
expenses
|
2,642
|
|
|
2,709
|
|
|
5,182
|
|
|
5,308
|
|
Income (loss) before
income taxes
|
50
|
|
|
121
|
|
|
(37)
|
|
|
58
|
|
(Provision) benefit
for taxes on income (loss)
|
(27)
|
|
|
(49)
|
|
|
(10)
|
|
|
(56)
|
|
Net income
(loss)
|
$
|
23
|
|
|
$
|
72
|
|
|
$
|
(47)
|
|
|
$
|
2
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
459
|
|
|
452
|
|
|
459
|
|
|
450
|
|
Diluted
|
461
|
|
|
465
|
|
|
459
|
|
|
457
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.05
|
|
|
$
|
0.16
|
|
|
$
|
(0.10)
|
|
|
$
|
—
|
|
Diluted
|
$
|
0.05
|
|
|
$
|
0.15
|
|
|
$
|
(0.10)
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Corporate EBITDA
(a)
|
$
|
379
|
|
|
$
|
446
|
|
|
$
|
605
|
|
|
$
|
699
|
|
Adjusted pre-tax
Income (loss) (a)
|
153
|
|
|
216
|
|
|
156
|
|
|
239
|
|
|
|
(a) Represents a
non-GAAP measure, see the accompanying reconciliations included in
Supplemental Schedule III.
|
|
SELECTED UNAUDITED
CONSOLIDATED BALANCE SHEET DATA
|
|
(In
millions)
|
June 30,
2015
|
|
December 31,
2014
|
Cash and cash
equivalents
|
$
|
537
|
|
|
$
|
490
|
Restricted
cash
|
421
|
|
|
571
|
Revenue earning
equipment:
|
|
|
|
|
U.S. Car
Rental
|
9,322
|
|
|
8,070
|
International Car
Rental
|
2,779
|
|
|
1,904
|
Worldwide Equipment
Rental
|
2,607
|
|
|
2,442
|
All Other
Operations
|
1,288
|
|
|
1,237
|
Total revenue earning
equipment, net
|
15,996
|
|
|
13,653
|
Total
assets
|
25,969
|
|
|
23,985
|
Total debt
|
17,682
|
|
|
15,993
|
Net Fleet debt
(a)
|
10,686
|
|
|
9,047
|
Net Corporate debt
(a) (b)
|
6,038
|
|
|
5,885
|
Total
equity
|
2,387
|
|
|
2,464
|
|
(a) Represents a
non-GAAP measure, see the accompanying reconciliations included
in Supplemental Schedule VI.
|
(b) Fleet related to
Hertz Equipment Rental Corporation is funded via Net Corporate
Debt.
|
SELECTED UNAUDITED
CONSOLIDATED CASH FLOW DATA
|
|
|
Six Months
Ended
June 30,
|
(In
millions)
|
2015
|
|
2014
|
Cash provided by
(used in):
|
|
|
|
Operating
activities
|
$
|
1,451
|
|
|
$
|
1,402
|
|
Investing
activities
|
(3,156)
|
|
|
(2,248)
|
|
Financing
activities
|
1,769
|
|
|
977
|
|
Effect of exchange
rate changes
|
(17)
|
|
|
(2)
|
|
Net change in cash
and cash equivalents
|
$
|
47
|
|
|
$
|
129
|
|
|
|
|
|
Fleet growth
(a)
|
$
|
9
|
|
|
$
|
(592)
|
|
Free cash flow
(a)
|
(30)
|
|
|
(689)
|
|
|
(a) Represents a
non-GAAP measure, see the accompanying reconciliations included in
Supplemental Schedules IV and V.
|
SELECTED UNAUDITED
OPERATING DATA BY SEGMENT
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
U.S. Car
Rental
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
34,977
|
|
|
35,850
|
|
|
67,014
|
|
|
68,210
|
|
Total RPD
(a)
|
$
|
45.80
|
|
|
$
|
46.19
|
|
|
$
|
46.41
|
|
|
$
|
47.00
|
|
Average
fleet
|
511,700
|
|
|
502,500
|
|
|
500,500
|
|
|
497,000
|
|
Fleet
efficiency(a)
|
75%
|
|
|
79%
|
|
|
74%
|
|
|
77%
|
|
Net depreciation per
unit per month(a)
|
$
|
259
|
|
|
$
|
259
|
|
|
$
|
273
|
|
|
$
|
273
|
|
Program cars as a
percentage of total average fleet at period end
|
29%
|
|
|
16%
|
|
|
29%
|
|
|
16%
|
|
Adjusted pre-tax
income (loss)(in millions) (a)
|
$
|
174
|
|
|
$
|
184
|
|
|
$
|
244
|
|
|
$
|
306
|
|
International Car
Rental
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
12,523
|
|
|
12,096
|
|
|
22,298
|
|
|
21,491
|
|
Total RPD
(a)(b)
|
$
|
47.59
|
|
|
$
|
47.45
|
|
|
$
|
47.31
|
|
|
$
|
47.04
|
|
Average
Fleet
|
173,700
|
|
|
172,300
|
|
|
158,800
|
|
|
157,000
|
|
Fleet
efficiency(a)
|
79%
|
|
|
77%
|
|
|
78%
|
|
|
76%
|
|
Net depreciation per
unit per month(a)(b)
|
$
|
207
|
|
|
$
|
215
|
|
|
$
|
218
|
|
|
$
|
227
|
|
Program cars as a
percentage of total average fleet at period end
|
46%
|
|
|
42%
|
|
|
46%
|
|
|
42%
|
|
Adjusted pre-tax
income (loss)(in millions) (a)
|
$
|
45
|
|
|
$
|
57
|
|
|
$
|
52
|
|
|
$
|
16
|
|
Worldwide
Equipment Rental
|
|
|
|
|
|
|
|
Dollar
utilization
|
34%
|
|
|
35%
|
|
|
34%
|
|
|
35%
|
|
Time
utilization
|
63%
|
|
|
63%
|
|
|
62%
|
|
|
62%
|
|
Rental and rental
related revenue (in millions) (a)(b)
|
$
|
352
|
|
|
$
|
348
|
|
|
$
|
689
|
|
|
$
|
675
|
|
Same store revenue
growth, including growth initiatives (b)
|
(1)%
|
|
|
4%
|
|
|
—%
|
|
|
5%
|
|
Adjusted pre-tax
income (loss) (in millions) (a)
|
$
|
42
|
|
|
$
|
67
|
|
|
$
|
76
|
|
|
$
|
121
|
|
All Other
Operations
|
|
|
|
|
|
|
|
Average fleet —
Donlen
|
165,600
|
|
|
177,800
|
|
|
167,100
|
|
|
177,300
|
|
Adjusted pre-tax
income (loss) (in millions) (a)
|
$
|
17
|
|
|
$
|
15
|
|
|
$
|
31
|
|
|
$
|
29
|
|
|
(a) Represents a
non-GAAP measure, see the accompanying reconciliations included in
Supplemental Schedules III and VI.
|
(b) Based on December
31, 2014 foreign exchange rates.
|
Supplemental
Schedule I
|
HERTZ GLOBAL
HOLDINGS, INC.
|
CONDENSED
STATEMENT OF OPERATIONS BY SEGMENT
|
Unaudited
|
|
|
Three Months Ended
June 30, 2015
|
|
Three Months Ended
June 30, 2014
|
(In
millions)
|
U.S. Car
Rental
|
|
Int'l Car
Rental
|
|
Worldwide
Equipment Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Consolidated
HGH
|
|
U.S. Car
Rental
|
|
Int'l Car
Rental
|
|
Worldwide
Equipment Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Consolidated
HGH
|
Total
revenues:
|
$
|
1,615
|
|
|
$
|
556
|
|
|
$
|
375
|
|
|
$
|
146
|
|
|
$
|
—
|
|
|
$
|
2,692
|
|
|
$
|
1,663
|
|
|
$
|
641
|
|
|
$
|
384
|
|
|
$
|
142
|
|
|
$
|
—
|
|
|
$
|
2,830
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
945
|
|
|
332
|
|
|
214
|
|
|
6
|
|
|
8
|
|
|
1,505
|
|
|
990
|
|
|
394
|
|
|
210
|
|
|
6
|
|
|
(6)
|
|
|
1,594
|
|
Depreciation of
revenue earning equipment and lease charges, net
|
398
|
|
|
101
|
|
|
81
|
|
|
116
|
|
|
—
|
|
|
696
|
|
|
391
|
|
|
124
|
|
|
79
|
|
|
114
|
|
|
—
|
|
|
708
|
|
Selling, general and
administrative
|
100
|
|
|
69
|
|
|
47
|
|
|
8
|
|
|
71
|
|
|
295
|
|
|
93
|
|
|
63
|
|
|
35
|
|
|
8
|
|
|
65
|
|
|
264
|
|
Interest expense,
net
|
41
|
|
|
18
|
|
|
15
|
|
|
2
|
|
|
80
|
|
|
156
|
|
|
44
|
|
|
25
|
|
|
12
|
|
|
3
|
|
|
80
|
|
|
164
|
|
Other (income)
expense, net
|
(1)
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(7)
|
|
|
(10)
|
|
|
(22)
|
|
|
3
|
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
(21)
|
|
Total
expenses
|
1,483
|
|
|
520
|
|
|
355
|
|
|
132
|
|
|
152
|
|
|
2,642
|
|
|
1,496
|
|
|
609
|
|
|
335
|
|
|
131
|
|
|
138
|
|
|
2,709
|
|
Income (loss)before
income taxes
|
$
|
132
|
|
|
$
|
36
|
|
|
$
|
20
|
|
|
$
|
14
|
|
|
$
|
(152)
|
|
|
50
|
|
|
$
|
167
|
|
|
$
|
32
|
|
|
$
|
49
|
|
|
$
|
11
|
|
|
$
|
(138)
|
|
|
121
|
|
(Provision) benefit
for taxes on income (loss)
|
|
|
|
|
|
|
|
|
|
|
(27)
|
|
|
|
|
|
|
|
|
|
|
|
|
(49)
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
$
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
72
|
|
Supplemental
Schedule I (continued)
|
HERTZ GLOBAL
HOLDINGS, INC.
|
CONDENSED
STATEMENT OF OPERATIONS BY SEGMENT
|
Unaudited
|
|
|
Six Months Ended
June 30, 2015
|
|
Six Months Ended
June 30, 2014
|
(In
millions)
|
U.S. Car
Rental
|
|
Int'l Car
Rental
|
|
Worldwide
Equipment Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Consolidated
HGH
|
|
U.S. Car
Rental
|
|
Int'l Car
Rental
|
|
Worldwide
Equipment Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Consolidated
HGH
|
Total
revenues:
|
$
|
3,135
|
|
|
$
|
992
|
|
|
$
|
730
|
|
|
$
|
288
|
|
|
$
|
—
|
|
|
$
|
5,145
|
|
|
$
|
3,220
|
|
|
$
|
1,123
|
|
|
$
|
743
|
|
|
$
|
280
|
|
|
$
|
—
|
|
|
$
|
5,366
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
1,871
|
|
|
599
|
|
|
422
|
|
|
11
|
|
|
10
|
|
|
2,913
|
|
|
1,898
|
|
|
723
|
|
|
410
|
|
|
12
|
|
|
(6)
|
|
|
3,037
|
|
Depreciation of
revenue earning equipment and lease charges, net
|
819
|
|
|
196
|
|
|
157
|
|
|
231
|
|
|
—
|
|
|
1,403
|
|
|
815
|
|
|
238
|
|
|
157
|
|
|
224
|
|
|
—
|
|
|
1,434
|
|
Selling, general and
administrative
|
197
|
|
|
125
|
|
|
93
|
|
|
16
|
|
|
129
|
|
|
560
|
|
|
193
|
|
|
126
|
|
|
67
|
|
|
16
|
|
|
139
|
|
|
541
|
|
Interest expense,
net
|
82
|
|
|
34
|
|
|
29
|
|
|
5
|
|
|
160
|
|
|
310
|
|
|
81
|
|
|
46
|
|
|
25
|
|
|
7
|
|
|
161
|
|
|
320
|
|
Other (income)
expense, net
|
(1)
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
|
—
|
|
|
(4)
|
|
|
(29)
|
|
|
3
|
|
|
(2)
|
|
|
—
|
|
|
4
|
|
|
(24)
|
|
Total
expenses
|
2,968
|
|
|
954
|
|
|
698
|
|
|
263
|
|
|
299
|
|
|
5,182
|
|
|
2,958
|
|
|
1,136
|
|
|
657
|
|
|
259
|
|
|
298
|
|
|
5,308
|
|
Income (loss) before
income taxes
|
$
|
167
|
|
|
$
|
38
|
|
|
$
|
32
|
|
|
$
|
25
|
|
|
$
|
(299)
|
|
|
(37)
|
|
|
$
|
262
|
|
|
$
|
(13)
|
|
|
$
|
86
|
|
|
$
|
21
|
|
|
$
|
(298)
|
|
|
58
|
|
(Provision) benefit
for taxes on income (loss)
|
|
|
|
|
|
|
|
|
|
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
(56)
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
$
|
(47)
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2
|
|
Supplemental
Schedule II
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
TO ADJUSTED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
Unaudited
|
|
|
Three Months Ended
June 30, 2015
|
|
Three Months Ended
June 30, 2014
|
(In millions, except
per share data)
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-GAAP)
|
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-GAAP)
|
Total
revenues
|
$
|
2,692
|
|
|
$
|
—
|
|
|
$
|
2,692
|
|
|
$
|
2,830
|
|
|
$
|
—
|
|
|
$
|
2,830
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
1,505
|
|
|
(48)
|
|
(a)
|
1,457
|
|
|
1,594
|
|
|
(59)
|
|
(a)
|
1,535
|
|
Depreciation of
revenue earning equipment and lease charges, net
|
696
|
|
|
—
|
|
(b)
|
696
|
|
|
708
|
|
|
(6)
|
|
(b)
|
702
|
|
Selling, general and
administrative
|
295
|
|
|
(43)
|
|
(c)
|
252
|
|
|
264
|
|
|
(34)
|
|
(c)
|
230
|
|
Interest expense,
net
|
156
|
|
|
(16)
|
|
(d)
|
140
|
|
|
164
|
|
|
(13)
|
|
(d)
|
151
|
|
Other (income)
expense, net
|
(10)
|
|
|
4
|
|
(e)
|
(6)
|
|
|
(21)
|
|
|
17
|
|
(e)
|
(4)
|
|
Total
expenses
|
2,642
|
|
|
(103)
|
|
|
2,539
|
|
|
2,709
|
|
|
(95)
|
|
|
2,614
|
|
Income (loss) before
income taxes
|
50
|
|
|
103
|
|
|
153
|
|
|
121
|
|
|
95
|
|
|
216
|
|
(Provision) benefit
for taxes on income (loss)
|
(27)
|
|
|
(38)
|
|
(f)
|
(65)
|
|
|
(49)
|
|
|
(35)
|
|
(f)
|
(84)
|
|
Net income
(loss)
|
$
|
23
|
|
|
$
|
65
|
|
|
$
|
88
|
|
|
$
|
72
|
|
|
$
|
60
|
|
|
$
|
132
|
|
Weighted average
number of diluted shares outstanding
|
461
|
|
|
461
|
|
|
461
|
|
|
465
|
|
|
465
|
|
|
465
|
|
Diluted earnings
(loss) per share (g)
|
$
|
0.05
|
|
|
$
|
0.14
|
|
|
$
|
0.19
|
|
|
$
|
0.15
|
|
|
$
|
0.13
|
|
|
$
|
0.28
|
|
|
Six Months Ended
June 30, 2015
|
|
Six Months Ended
June 30, 2014
|
(In millions, except
per share data)
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-GAAP)
|
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-GAAP)
|
Total
revenues
|
$
|
5,145
|
|
|
$
|
—
|
|
|
$
|
5,145
|
|
|
$
|
5,366
|
|
|
$
|
—
|
|
|
$
|
5,366
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Direct
operating
|
2,913
|
|
|
(81)
|
|
(a)
|
2,832
|
|
|
3,037
|
|
|
(104)
|
|
(a)
|
2,933
|
|
Depreciation of
revenue earning equipment and lease charges, net
|
1,403
|
|
|
—
|
|
(b)
|
1,403
|
|
|
1,434
|
|
|
(8)
|
|
(b)
|
1,426
|
|
Selling, general and
administrative
|
560
|
|
|
(81)
|
|
(c)
|
479
|
|
|
541
|
|
|
(72)
|
|
(c)
|
469
|
|
Interest expense,
net
|
310
|
|
|
(32)
|
|
(d)
|
278
|
|
|
320
|
|
|
(25)
|
|
(d)
|
295
|
|
Other (income)
expense, net
|
(4)
|
|
|
1
|
|
(e)
|
(3)
|
|
|
(24)
|
|
|
28
|
|
(e)
|
4
|
|
Total
expenses
|
5,182
|
|
|
(193)
|
|
|
4,989
|
|
|
5,308
|
|
|
(181)
|
|
|
5,127
|
|
Income (loss) before
income taxes
|
(37)
|
|
|
193
|
|
|
156
|
|
|
58
|
|
|
181
|
|
|
239
|
|
(Provision) benefit
for taxes on income (loss)
|
(10)
|
|
|
(71)
|
|
(f)
|
(81)
|
|
|
(56)
|
|
|
(67)
|
|
(f)
|
(123)
|
|
Net income
(loss)
|
$
|
(47)
|
|
|
$
|
122
|
|
|
$
|
75
|
|
|
$
|
2
|
|
|
$
|
114
|
|
|
$
|
116
|
|
Weighted average
number of diluted shares outstanding
|
459
|
|
|
459
|
|
|
459
|
|
|
457
|
|
|
457
|
|
|
457
|
|
Diluted earnings
(loss) per share (g)
|
$
|
(0.10)
|
|
|
$
|
0.27
|
|
|
$
|
0.16
|
|
|
$
|
—
|
|
|
$
|
0.25
|
|
|
$
|
0.25
|
|
a. Represents the
increase in amortization of other intangible assets, depreciation
of property and equipment and accretion of certain revalued
liabilities relating to purchase accounting. For the three
months ended June 30, 2015 and 2014, also includes
restructuring and restructuring related charges of $16 million and
$27 million, respectively. For the six months ended
June 30, 2015 and 2014, also includes restructuring and
restructuring related charges of $18 million and $40 million,
respectively.
|
b. In 2014,
represents the increase in depreciation of equipment rental revenue
earning equipment based upon its revaluation relating to purchase
accounting. There were no adjustments for depreciation of
equipment rental revenue earning equipment in 2015.
|
c. For the three
months ended June 30, 2015 and 2014, primarily comprised of
restructuring and restructuring related charges of $30 million and
$15 million, respectively, expenses associated with the anticipated
HERC spin-off transaction announced in March 2014 of $8 million and
$12 million, respectively, consulting costs and legal fees related
to the accounting review and investigation, expenses associated
with acquisitions, integration charges and relocation expenses
associated with the Company's relocation of its headquarters to
Estero, Florida. For the six months ended June 30, 2015 and
2014, primarily comprised of restructuring and restructuring
related charges of $53 million and $41 million, respectively,
expenses associated with the anticipated HERC spin-off transaction
announced in March 2014 of $17 million and $12 million,
respectively, consulting costs and legal fees related to the
accounting review and investigation, expenses associated with
acquisitions, integration charges and relocation expenses
associated with the Company's relocation of its headquarters to
Estero, Florida. The three and six months ended June 30, 2015 also
include costs associated with the separation of certain
executives.
|
d. Represents
debt-related charges relating to the amortization of deferred debt
financing costs and debt discounts.
|
e. In 2014, primarily
represents a $19 million litigation settlement received in relation
to a class action lawsuit filed against an original equipment
manufacturer stemming from recalls of their vehicles in previous
years.
|
f. Represents a
provision for income taxes derived utilizing a normalized income
tax rate (37% for 2015 and 2014).
|
Supplemental
Schedule III
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
INCOME (LOSS) BEFORE INCOME TAXES
|
TO EBITDA,
CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME (LOSS) BY
SEGMENT
|
Unaudited
|
|
|
Three Months Ended
June 30, 2015
|
|
Three Months Ended
June 30, 2014
|
(In
millions)
|
U.S. Car
Rental
|
|
Int'l Car
Rental
|
|
Worldwide
Equipment Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Consolidated
HGH
|
|
U.S. Car
Rental
|
|
Int'l Car
Rental
|
|
Worldwide
Equipment Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Consolidated
HGH
|
Income (loss) before
income taxes
|
$
|
132
|
|
|
$
|
36
|
|
|
$
|
20
|
|
|
$
|
14
|
|
|
$
|
(152)
|
|
|
$
|
50
|
|
|
$
|
167
|
|
|
$
|
32
|
|
|
$
|
49
|
|
|
$
|
11
|
|
|
|
|
$
|
(138)
|
|
|
$
|
121
|
|
Depreciation and
amortization
|
447
|
|
|
110
|
|
|
100
|
|
|
117
|
|
|
5
|
|
|
779
|
|
|
447
|
|
|
135
|
|
|
97
|
|
|
116
|
|
|
4
|
|
|
799
|
|
Interest, net of
interest income
|
41
|
|
|
18
|
|
|
15
|
|
|
2
|
|
|
80
|
|
|
156
|
|
|
44
|
|
|
25
|
|
|
12
|
|
|
3
|
|
|
80
|
|
|
164
|
|
EBITDA
|
$
|
620
|
|
|
$
|
164
|
|
|
$
|
135
|
|
|
$
|
133
|
|
|
$
|
(67)
|
|
|
$
|
985
|
|
|
$
|
658
|
|
|
$
|
192
|
|
|
$
|
158
|
|
|
$
|
130
|
|
|
$
|
(54)
|
|
|
$
|
1,084
|
|
Car rental fleet
depreciation and lease charges, net
|
(398)
|
|
|
(101)
|
|
|
—
|
|
|
(116)
|
|
|
—
|
|
|
(615)
|
|
|
(391)
|
|
|
(124)
|
|
|
—
|
|
|
(114)
|
|
|
—
|
|
|
(629)
|
|
Car rental fleet
interest
|
(43)
|
|
|
(16)
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
|
(62)
|
|
|
(45)
|
|
|
(22)
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
|
(70)
|
|
Car rental fleet debt
related charges (a)
|
8
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
11
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
7
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
Restructuring and
restructuring related charges (b)
|
16
|
|
|
5
|
|
|
6
|
|
|
—
|
|
|
20
|
|
|
47
|
|
|
4
|
|
|
14
|
|
|
2
|
|
|
—
|
|
|
11
|
|
|
31
|
|
Acquisition related
costs and charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
Equipment
rental spin-off costs
(c)
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
1
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
12
|
|
Impairment charges
and write-downs (d)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
Integration expenses
(e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
Relocation costs
(f)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
Other extraordinary,
unusual or non-recurring items(g)
|
—
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(4)
|
|
|
(5)
|
|
|
(16)
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(12)
|
|
Corporate
EBITDA
|
$
|
203
|
|
|
$
|
54
|
|
|
$
|
147
|
|
|
$
|
15
|
|
|
$
|
(40)
|
|
|
$
|
379
|
|
|
$
|
221
|
|
|
$
|
68
|
|
|
$
|
166
|
|
|
$
|
14
|
|
|
$
|
(23)
|
|
|
$
|
446
|
|
Non-fleet
depreciation and amortization (h)
|
(49)
|
|
|
(9)
|
|
|
(100)
|
|
|
(1)
|
|
|
(5)
|
|
|
(164)
|
|
|
(56)
|
|
|
(11)
|
|
|
(97)
|
|
|
(2)
|
|
|
(4)
|
|
|
(170)
|
|
Non-fleet interest,
net of interest income
|
2
|
|
|
(2)
|
|
|
(15)
|
|
|
1
|
|
|
(80)
|
|
|
(94)
|
|
|
1
|
|
|
(3)
|
|
|
(12)
|
|
|
—
|
|
|
(80)
|
|
|
(94)
|
|
Non-fleet debt
related charges
(a)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
5
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
6
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
|
(5)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
|
(5)
|
|
Acquisition
accounting (I)
|
18
|
|
|
2
|
|
|
9
|
|
|
2
|
|
|
1
|
|
|
32
|
|
|
17
|
|
|
3
|
|
|
9
|
|
|
3
|
|
|
1
|
|
|
33
|
|
Adjusted pre-tax
income (loss)
|
$
|
174
|
|
|
$
|
45
|
|
|
$
|
42
|
|
|
$
|
17
|
|
|
$
|
(125)
|
|
|
$
|
153
|
|
|
$
|
184
|
|
|
$
|
57
|
|
|
$
|
67
|
|
|
$
|
15
|
|
|
$
|
(107)
|
|
|
$
|
216
|
|
Supplemental
Schedule III (continued)
|
HERTZ GLOBAL
HOLDINGS, INC. RECONCILIATION OF INCOME (LOSS) BEFORE INCOME
TAXES
|
TO EBITDA,
CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME (LOSS) BY
SEGMENT
|
Unaudited
|
|
|
Six Months Ended
June 30, 2015
|
|
Six Months Ended
June 30, 2014
|
(In
millions)
|
U.S. Car
Rental
|
|
Int'l Car
Rental
|
|
Worldwide
Equipment Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Consolidated
HGH
|
|
U.S. Car
Rental
|
|
Int'l Car
Rental
|
|
Worldwide
Equipment Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Consolidated
HGH
|
Income (loss) before
income taxes
|
$
|
167
|
|
|
$
|
38
|
|
|
$
|
32
|
|
|
$
|
25
|
|
|
$
|
(299)
|
|
|
$
|
(37)
|
|
|
$
|
262
|
|
|
$
|
(13)
|
|
|
$
|
86
|
|
|
$
|
21
|
|
|
$
|
(298)
|
|
|
$
|
58
|
|
Depreciation and
amortization
|
919
|
|
|
214
|
|
|
195
|
|
|
235
|
|
|
9
|
|
|
1,572
|
|
|
926
|
|
|
259
|
|
|
193
|
|
|
230
|
|
|
6
|
|
|
1,614
|
|
Interest, net of
interest income
|
82
|
|
|
34
|
|
|
29
|
|
|
5
|
|
|
160
|
|
|
310
|
|
|
81
|
|
|
46
|
|
|
25
|
|
|
7
|
|
|
161
|
|
|
320
|
|
EBITDA
|
$
|
1,168
|
|
|
$
|
286
|
|
|
$
|
256
|
|
|
$
|
265
|
|
|
$
|
(130)
|
|
|
$
|
1,845
|
|
|
$
|
1,269
|
|
|
$
|
292
|
|
|
$
|
304
|
|
|
$
|
258
|
|
|
$
|
(131)
|
|
|
$
|
1,992
|
|
Car rental fleet
depreciation and lease charges, net
|
(819)
|
|
|
(196)
|
|
|
—
|
|
|
(231)
|
|
|
—
|
|
|
(1,246)
|
|
|
(815)
|
|
|
(238)
|
|
|
—
|
|
|
(224)
|
|
|
—
|
|
|
(1,277)
|
|
Car rental fleet
interest
|
(86)
|
|
|
(31)
|
|
|
—
|
|
|
(6)
|
|
|
—
|
|
|
(123)
|
|
|
(84)
|
|
|
(42)
|
|
|
—
|
|
|
(7)
|
|
|
—
|
|
|
(133)
|
|
Car rental fleet
debt-related charges (a)
|
15
|
|
|
4
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
21
|
|
|
2
|
|
|
8
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
13
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
Restructuring and
restructuring related charges (b)
|
18
|
|
|
6
|
|
|
8
|
|
|
—
|
|
|
35
|
|
|
67
|
|
|
16
|
|
|
19
|
|
|
6
|
|
|
—
|
|
|
31
|
|
|
72
|
|
Acquisition related
costs and charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
Equipment
rental spin-off costs
(c)
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
1
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
12
|
|
Impairment charges
and write-downs (d)
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
Integration expenses
(e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
6
|
|
Relocation costs
(f)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
Other extraordinary,
unusual or non-recurring items (g)
|
(2)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
1
|
|
|
(2)
|
|
|
(21)
|
|
|
(3)
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
(22)
|
|
Corporate
EBITDA
|
$
|
303
|
|
|
$
|
69
|
|
|
$
|
279
|
|
|
$
|
30
|
|
|
$
|
(76)
|
|
|
$
|
605
|
|
|
$
|
378
|
|
|
$
|
36
|
|
|
$
|
317
|
|
|
$
|
30
|
|
|
$
|
(62)
|
|
|
$
|
699
|
|
Non-fleet
depreciation and amortization(h)
|
(100)
|
|
|
(18)
|
|
|
(195)
|
|
|
(4)
|
|
|
(9)
|
|
|
(326)
|
|
|
(111)
|
|
|
(21)
|
|
|
(193)
|
|
|
(6)
|
|
|
(6)
|
|
|
(337)
|
|
Non-fleet interest,
net of interest income
|
4
|
|
|
(3)
|
|
|
(29)
|
|
|
1
|
|
|
(160)
|
|
|
(187)
|
|
|
3
|
|
|
(4)
|
|
|
(25)
|
|
|
—
|
|
|
(161)
|
|
|
(187)
|
|
Non-fleet
debt-related charges (a)
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
7
|
|
|
11
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
8
|
|
|
12
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10)
|
|
|
(10)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13)
|
|
|
(13)
|
|
Acquisition
accounting (i)
|
36
|
|
|
4
|
|
|
18
|
|
|
4
|
|
|
1
|
|
|
63
|
|
|
35
|
|
|
5
|
|
|
19
|
|
|
5
|
|
|
1
|
|
|
65
|
|
Adjusted pre-tax
income (loss)
|
$
|
244
|
|
|
$
|
52
|
|
|
$
|
76
|
|
|
$
|
31
|
|
|
$
|
(247)
|
|
|
$
|
156
|
|
|
$
|
306
|
|
|
$
|
16
|
|
|
$
|
121
|
|
|
$
|
29
|
|
|
$
|
(233)
|
|
|
$
|
239
|
|
(a) Represents
non-cash charges relating to the amortization of deferred debt
financing costs and debt discounts and premiums.
|
(b) Represents
expenses incurred under restructuring actions as defined in U.S.
GAAP. Also represents incremental costs incurred directly
supporting business transformation initiatives, such
as transition costs 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 and consulting costs and legal fees related to the
accounting review and investigation. The three and six months ended
June 30, 2015 also include costs associated with the separation of
certain executives.
|
(c) Represents
expense associated with the HERC spin-off.
|
(d) For six months
ended June 30, 2015, represents impairment of the former
Dollar Thrifty headquarters and the impairment of a corporate asset
recognized in the first quarter 2015. For the three and six months
ended June 30, 2014, represents the write-off of assets
associated with a terminated business relationship.
|
(e) Primarily
represents Dollar Thrifty integration related expenses.
|
(f) Represents
non-recurring costs incurred in connection with the relocation of
the Company's corporate headquarters to Estero, Florida that were
not included in restructuring expenses. Such expenses primarily
include duplicate facility rent, certain moving expenses, and other
costs that are direct and incremental due to the
relocation.
|
(g) Includes
miscellaneous non-recurring or non-cash items. In the three and six
months ended June 30, 2014, primarily represents a $19 million
litigation settlement received in relation to a class action
lawsuit filed against an original equipment manufacturer stemming
from recalls of their vehicles in previous years.
|
(h) Amounts
related to the Worldwide Equipment Rental segment include
depreciation of revenue earning equipment.
|
(i) Represents the
increase in amortization of other intangible assets, depreciation
of property and equipment and accretion of revalued liabilities
relating to purchase accounting.
|
Supplemental
Schedule IV
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURE - FLEET GROWTH
|
Unaudited
|
|
|
Six Months Ended
June 30, 2015
|
|
Six Months Ended
June 30, 2014
|
(In
millions)
|
U.S.
Car
Rental
|
|
Int'l
Car
Rental
|
|
Worldwide
Equipment Rental
|
|
All Other
Operations
|
|
Consolidated
HGH
|
|
U.S.
Car
Rental
|
|
Int'l
Car
Rental
|
|
Worldwide
Equipment Rental
|
|
All Other
Operations
|
|
Consolidated
HGH
|
Revenue earning
equipment expenditures
|
$
|
(5,190)
|
|
|
$
|
(1,732)
|
|
|
$
|
(352)
|
|
|
$
|
(717)
|
|
|
$
|
(7,991)
|
|
|
$
|
(3,260)
|
|
|
$
|
(1,673)
|
|
|
$
|
(296)
|
|
|
$
|
(767)
|
|
|
$
|
(5,996)
|
|
Proceeds from
disposal of revenue earning equipment
|
3,279
|
|
|
1,111
|
|
|
93
|
|
|
426
|
|
|
4,909
|
|
|
2,114
|
|
|
1,059
|
|
|
89
|
|
|
455
|
|
|
3,717
|
|
Net revenue earning
equipment capital expenditures
|
(1,911)
|
|
|
(621)
|
|
|
(259)
|
|
|
(291)
|
|
|
(3,082)
|
|
|
(1,146)
|
|
|
(614)
|
|
|
(207)
|
|
|
(312)
|
|
|
(2,279)
|
|
Depreciation of
revenue earning equipment, net
|
819
|
|
|
159
|
|
|
158
|
|
|
231
|
|
|
1,367
|
|
|
813
|
|
|
199
|
|
|
157
|
|
|
224
|
|
|
1,393
|
|
Financing activity
related to car rental fleet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
4,146
|
|
|
831
|
|
|
—
|
|
|
602
|
|
|
5,579
|
|
|
619
|
|
|
720
|
|
|
—
|
|
|
420
|
|
|
1,759
|
|
Payments
|
(2,986)
|
|
|
(444)
|
|
|
—
|
|
|
(562)
|
|
|
(3,992)
|
|
|
(731)
|
|
|
(491)
|
|
|
—
|
|
|
(350)
|
|
|
(1,572)
|
|
Restricted cash
changes
|
150
|
|
|
12
|
|
|
—
|
|
|
(25)
|
|
|
137
|
|
|
124
|
|
|
(23)
|
|
|
—
|
|
|
6
|
|
|
107
|
|
Net financing activity
related to car rental fleet
|
1,310
|
|
|
399
|
|
|
—
|
|
|
15
|
|
|
1,724
|
|
|
12
|
|
|
206
|
|
|
—
|
|
|
76
|
|
|
294
|
|
Fleet
growth
|
$
|
218
|
|
|
$
|
(63)
|
|
|
$
|
(101)
|
|
|
$
|
(45)
|
|
|
$
|
9
|
|
|
$
|
(321)
|
|
|
$
|
(209)
|
|
|
$
|
(50)
|
|
|
$
|
(12)
|
|
|
$
|
(592)
|
|
Supplemental
Schedule V
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURE - FREE CASH FLOW
|
Unaudited
|
|
|
Six Months Ended
June 30,
|
(In
millions)
|
2015
|
|
2014
|
Income (loss) before
income taxes
|
$
|
(37)
|
|
|
$
|
58
|
|
Depreciation and
amortization, non-fleet, net
|
169
|
|
|
180
|
|
Amortization of debt
discount and related charges
|
29
|
|
|
25
|
|
Cash paid for income
taxes
|
(19)
|
|
|
(33)
|
|
Changes in assets and
liabilities, net of effects of acquisitions, and other
|
(58)
|
|
|
(221)
|
|
Net cash provided by
operating activities excluding depreciation of revenue earning
equipment
|
84
|
|
|
9
|
|
U.S. car rental fleet
growth
|
218
|
|
|
(321)
|
|
International car
rental fleet growth
|
(63)
|
|
|
(209)
|
|
Equipment rental
fleet growth
|
(101)
|
|
|
(50)
|
|
All other operations
rental fleet growth
|
(45)
|
|
|
(12)
|
|
Property and
equipment expenditures, net of disposals
|
(123)
|
|
|
(106)
|
|
Net investment
activity
|
(114)
|
|
|
(698)
|
|
Free cash
flow
|
$
|
(30)
|
|
|
$
|
(689)
|
|
Supplemental
Schedule VI
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATIONS OF
GAAP TO NON-GAAP MEASURES - DEBT, REVENUE,
|
DEPRECIATION AND
KEY METRICS
|
Unaudited
|
|
NET CORPORATE
DEBT, NET FLEET DEBT AND TOTAL NET DEBT
|
|
|
As of June 30,
2015
|
|
As of December 31,
2014
|
(In
millions)
|
Fleet
|
|
Corporate
|
|
Total
|
|
Fleet
|
|
Corporate
|
|
Total
|
Debt
|
$
|
11,064
|
|
|
$
|
6,618
|
|
|
$
|
17,682
|
|
|
$
|
9,562
|
|
|
$
|
6,431
|
|
|
$
|
15,993
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
—
|
|
|
537
|
|
|
537
|
|
|
—
|
|
|
490
|
|
|
490
|
|
Restricted
cash
|
378
|
|
|
43
|
|
|
421
|
|
|
515
|
|
|
56
|
|
|
571
|
|
Net debt
|
$
|
10,686
|
|
|
$
|
6,038
|
|
|
$
|
16,724
|
|
|
$
|
9,047
|
|
|
$
|
5,885
|
|
|
$
|
14,932
|
|
Supplemental
Schedule VI (continued)
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATIONS OF
GAAP TO NON-GAAP MEASURES - DEBT, REVENUE,
|
DEPRECIATION AND
KEY METRICS
|
Unaudited
|
|
TOTAL RPD, FLEET
EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
|
|
U.S. Car Rental
Segment
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
($In millions, except
as noted)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Total
RPD
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,615
|
|
|
$
|
1,663
|
|
|
$
|
3,135
|
|
|
$
|
3,220
|
|
Ancillary retail car
sales revenue
|
$
|
(13)
|
|
|
$
|
(7)
|
|
|
$
|
(25)
|
|
|
$
|
(14)
|
|
Total rental
revenue
|
$
|
1,602
|
|
|
$
|
1,656
|
|
|
$
|
3,110
|
|
|
$
|
3,206
|
|
Transaction days (in
thousands)
|
34,977
|
|
|
35,850
|
|
|
67,014
|
|
|
68,210
|
|
Total RPD (in whole
dollars)
|
$
|
45.80
|
|
|
$
|
46.19
|
|
|
$
|
46.41
|
|
|
$
|
47.00
|
|
|
|
|
|
|
|
|
|
Fleet
Efficiency
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
34,977
|
|
|
35,850
|
|
|
67,014
|
|
|
68,210
|
|
Average
Fleet
|
511,700
|
|
|
502,500
|
|
|
500,500
|
|
|
497,000
|
|
Advantage sublease
vehicles
|
—
|
|
|
(4,400)
|
|
|
—
|
|
|
(7,500)
|
|
Hertz 24/7
vehicles
|
—
|
|
|
(1,000)
|
|
|
—
|
|
|
(1,000)
|
|
Average Fleet used to
calculate fleet efficiency
|
511,700
|
|
|
497,100
|
|
|
500,500
|
|
|
488,500
|
|
Number of days in
period
|
91
|
|
|
91
|
|
|
181
|
|
|
181
|
|
Average fleet
multiplied by number of days in period (in thousands)
|
46,565
|
|
|
45,236
|
|
|
90,591
|
|
|
88,419
|
|
Fleet efficiency
(a)
|
75%
|
|
|
79%
|
|
|
74%
|
|
|
77%
|
|
|
|
|
|
|
|
|
|
Net Depreciation
Per Unit Per Month
|
|
|
|
|
|
|
|
Depreciation of
revenue earning equipment and lease charges, net
|
$
|
398
|
|
|
$
|
391
|
|
|
$
|
819
|
|
|
$
|
815
|
|
Average
fleet
|
511,700
|
|
|
502,500
|
|
|
500,500
|
|
|
497,000
|
|
Depreciation of
revenue earning equipment and lease charges, net divided by average
fleet (whole dollars)
|
$
|
778
|
|
|
$
|
778
|
|
|
$
|
1,636
|
|
|
$
|
1,640
|
|
Number of months in
period
|
3
|
|
|
3
|
|
|
6
|
|
|
6
|
|
Net depreciation per
unit per month (whole dollars)
|
$
|
259
|
|
|
$
|
259
|
|
|
$
|
273
|
|
|
$
|
273
|
|
|
(a) Calculated as
transaction days divided by average fleet multiplied by number of
days in period.
|
Supplemental
Schedule VI (continued)
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATIONS OF
GAAP TO NON-GAAP MEASURES - DEBT, REVENUE,
|
DEPRECIATION AND
KEY METRICS
|
Unaudited
|
|
TOTAL RPD, FLEET
EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
(continued)
|
|
International Car
Rental
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
(in millions, except
as noted)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Total
RPD
|
|
|
|
|
|
|
|
Revenues
|
$
|
556
|
|
|
$
|
641
|
|
|
$
|
992
|
|
|
$
|
1,123
|
|
Foreign currency
adjustment (a)
|
40
|
|
|
(67)
|
|
|
63
|
|
|
(112)
|
|
Total rental
revenue
|
$
|
596
|
|
|
$
|
574
|
|
|
$
|
1,055
|
|
|
$
|
1,011
|
|
Transaction days (in
thousands)
|
12,523
|
|
|
12,096
|
|
|
22,298
|
|
|
21,491
|
|
Total RPD (in whole
dollars)
|
$
|
47.59
|
|
|
$
|
47.45
|
|
|
$
|
47.31
|
|
|
$
|
47.04
|
|
|
|
|
|
|
|
|
|
Fleet
Efficiency
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
12,523
|
|
|
12,096
|
|
|
22,298
|
|
|
21,491
|
|
Average
Fleet
|
173,700
|
|
|
172,300
|
|
|
158,800
|
|
|
157,000
|
|
Number of days in
period
|
91
|
|
|
91
|
|
|
181
|
|
|
181
|
|
Average fleet
multiplied by number of days in period
|
15,807
|
|
|
15,679
|
|
|
28,743
|
|
|
28,417
|
|
Fleet efficiency
(b)
|
79%
|
|
|
77%
|
|
|
78%
|
|
|
76%
|
|
|
|
|
|
|
|
|
|
Net Depreciation
Per Unit Per Month
|
|
|
|
|
|
|
|
Depreciation of
revenue earning equipment and lease charges, net (in
millions)
|
$
|
101
|
|
|
$
|
124
|
|
|
$
|
196
|
|
|
$
|
238
|
|
Foreign currency
adjustment (in millions) (a)
|
7
|
|
|
(13)
|
|
|
12
|
|
|
(24)
|
|
Adjusted depreciation
of revenue earning equipment and lease charges, net (in
millions)
|
$
|
108
|
|
|
$
|
111
|
|
|
$
|
208
|
|
|
$
|
214
|
|
Average
fleet
|
173,700
|
|
|
172,300
|
|
|
158,800
|
|
|
157,000
|
|
Adjusted depreciation
of revenue earning equipment and lease charges, net divided by
average fleet
|
$
|
622
|
|
|
$
|
644
|
|
|
$
|
1,310
|
|
|
$
|
1,363
|
|
Number of months in
period
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
6
|
|
|
$
|
6
|
|
Net depreciation per
unit per month (whole dollars)
|
$
|
207
|
|
|
$
|
215
|
|
|
$
|
218
|
|
|
$
|
227
|
|
|
(a) Based on December
31, 2014 foreign exchange rates.
|
(b) Calculated as
transaction days divided by average fleet multiplied by number of
days in period.
|
WORLDWIDE
EQUIPMENT RENTAL AND RENTAL RELATED REVENUE
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
(in
millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Worldwide equipment
rental segment revenues
|
$
|
375
|
|
|
$
|
384
|
|
|
$
|
730
|
|
|
$
|
743
|
|
Worldwide equipment
sales and other revenue
|
(28)
|
|
|
(29)
|
|
|
(51)
|
|
|
(55)
|
|
Rental and rental
related revenue at actual rates
|
347
|
|
|
355
|
|
|
679
|
|
|
688
|
|
Foreign currency
adjustment (a)
|
5
|
|
|
(7)
|
|
|
10
|
|
|
(13)
|
|
Rental and rental
related revenue
|
$
|
352
|
|
|
$
|
348
|
|
|
$
|
689
|
|
|
$
|
675
|
|
|
(a) Based on December
31, 2014 foreign exchange rates.
|
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 (together,
the 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 Press 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 is calculated as income before income
taxes plus certain non-cash acquisition accounting charges,
debt-related charges relating to the amortization and write-off of
debt financing costs and debt discounts and certain one-time
charges and non-operational items. Adjusted pre-tax income is
important to management because it allows management to assess
operational performance of our 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 that 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. Adjusted
pre-tax margin is adjusted pre-tax income divided by total
revenues.
Adjusted Net Income
Adjusted net income is calculated as adjusted pre-tax income
less a provision for income taxes derived utilizing a normalized
income tax rate of 37%. The normalized income tax rate is
management's estimate of our long-term tax rate. Adjusted net
income is important to management and investors because it
represents our 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
our competitors.
Adjusted Diluted Earnings Per Share
Adjusted diluted earnings per share is calculated as adjusted
net income divided by the weighted average diluted shares
outstanding for the period, Adjusted diluted earnings per
share is important to management and investors because it
represents a measure of our 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 our competitors.
Average Fleet
Average Fleet is determined using a simple average of the number
of vehicles at the beginning and end of a given period.
Corporate Restricted Cash (used in the calculation of Net
Corporate Debt)
Total restricted cash includes cash and cash equivalents that
are not readily available for our normal disbursements. Total
restricted cash and equivalents are restricted for the purchase of
revenue earning vehicles and other specified uses under our Fleet
Debt facilities, our like-kind exchange programs and to satisfy
certain of our self-insurance regulatory reserve requirements.
Corporate restricted cash is calculated as total restricted cash
less restricted cash associated with fleet debt.
Dollar Utilization
Dollar utilization means revenue derived from the rental of
equipment divided by the original cost of the equipment including
additional capitalized refurbishment costs (with the basis of
refurbished assets at the refurbishment date).
Earnings Before Interest, Taxes, Depreciation and
Amortization ("EBITDA"), Corporate EBITDA and Corporate EBITDA
Margin
EBITDA is defined as net income before net interest expense,
income taxes and depreciation (which includes revenue earning
equipment lease charges) and amortization. Corporate EBITDA, as
presented herein, represents EBITDA as adjusted for car rental
fleet interest, car rental fleet depreciation and certain other
items, as described in more detail in the accompanying
schedules.
Management uses EBITDA and Corporate EBITDA as operating
performance and liquidity metrics for internal monitoring and
planning purposes, including the preparation of our annual
operating budget and monthly operating reviews, as well as to
facilitate analysis of investment decisions, profitability and
performance trends. Further, EBITDA enables management and
investors to isolate the effects on profitability of operating
metrics such as revenue, operating expenses and selling, general
and administrative expenses, which enables management and investors
to evaluate our business segments that are financed differently and
have different depreciation characteristics and compare our
performance against companies with different capital structures and
depreciation policies. We also present Corporate EBITDA as a
supplemental measure because such information is utilized in the
calculation of financial covenants under the Company's senior
credit facilities and in the determination of certain executive
compensation.
Corporate EBITDA Margin is calculated as the ratio of Corporate
EBITDA to total revenues and is used by the Compensation Committee
to determine certain executive compensation, primarily in the form
of PSUs.
EBITDA, Corporate EBITDA and Corporate EBITDA Margin are not
recognized measurements under U.S. GAAP. When evaluating our
operating performance or liquidity, investors should not consider
EBITDA and Corporate EBITDA in isolation of, or as a substitute
for, measures of our financial performance and liquidity as
determined in accordance with GAAP, such as net income, operating
income or net cash provided by operating activities.
Equipment Rental and Rental Related Revenue
Equipment rental and rental related revenue consists of all
revenue, net of discounts, associated with the rental of equipment
including charges for delivery, loss damage waivers and fueling,
but excluding revenue arising from the sale of equipment, parts and
supplies and certain other ancillary revenue. Rental and rental
related revenue is adjusted in all periods to eliminate the effect
of fluctuations in foreign currency. Our management believes
eliminating the effect of fluctuations in foreign currency is
appropriate so as not to affect the comparability of underlying
trends. This statistic is important to our management and to
investors as it reflects time and mileage and ancillary charges for
equipment on rent and is comparable with the reporting of other
industry participants.
Fleet Efficiency
Fleet efficiency is calculated by dividing total transaction
days by the average fleet multiplied by the number of days in a
period. Average fleet used to calculate fleet efficiency in our
U.S. Car Rental segment excludes Advantage sublease and Hertz 24/7
vehicles as these vehicles do not have associated transaction
days.
Fleet Growth
U.S. and International car rental fleet growth is defined as car
rental fleet capital expenditures, net of proceeds from disposals,
plus car rental fleet depreciation and net car rental fleet
financing which includes borrowings, repayments and the change in
fleet restricted cash. Worldwide equipment rental fleet
growth is defined as worldwide equipment rental fleet expenditures,
net of proceeds from disposals, plus depreciation.
Free Cash Flow
Free cash flow is calculated as net cash provided by operating
activities, excluding depreciation of revenue earning equipment,
net of car rental and equipment rental fleet growth and property
and equipment net expenditures. Free cash flow is important
to management and investors as it represents the cash available for
acquisitions and the reduction of corporate debt.
Net Corporate Debt
Net corporate debt is calculated as total debt excluding fleet
debt less cash and equivalents and corporate restricted cash.
Corporate debt consists of our Senior Term Facility; Senior ABL
Facility; Senior Notes; Promissory Notes; Convertible Senior Notes;
and certain other indebtedness of our domestic and foreign
subsidiaries.
Net Corporate Debt is important to management and investors as
it helps measure our leverage. Net Corporate Debt also assists in
the evaluation of our ability to service our non-fleet-related debt
without reference to the expense associated with the fleet debt,
which is collateralized by assets not available to lenders under
the non-fleet debt facilities.
Net Depreciation Per Unit Per Month
Net depreciation per unit per month is calculated by dividing
depreciation of revenue earning equipment and lease charges, net by
the average fleet 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. Our
management believes eliminating the effect of fluctuations in
foreign currency is useful in analyzing underlying trends. Average
fleet used to calculate net depreciation per unit per month in our
U.S. Car Rental segment includes Advantage sublease and Hertz 24/7
vehicles as these vehicles have associated lease charges.
Restricted Cash Associated with Fleet Debt (used in the
calculation of Net Fleet Debt and Corporate Restricted
Cash)
Restricted cash associated with fleet debt is restricted for the
purchase of revenue earning, vehicles and other specified uses
under our Fleet Debt facilities and our car rental like-kind
exchange program.
Same Store Revenue Growth/Decline
Same store revenue growth is calculated as the year-over-year
change in revenue for locations that are open at the end of the
period reported and have been operating under our direction for
more than twelve months. The same-store revenue amounts are
adjusted in all periods to eliminate the effect of fluctuations in
foreign currency.
Our management believes eliminating the effect of fluctuations
in foreign currency is appropriate so as not to affect the
comparability of underlying trends.
Time Utilization
Time utilization means the percentage of time an equipment unit
is on-rent during a given period.
Total Net Debt
Total net debt is calculated as total debt less total cash and
cash equivalents and total restricted cash. This measure is
important to management, investors and ratings agencies as it helps
measure our gross leverage.
Total RPD
Total RPD is calculated as total revenue less revenue from fleet
subleases and ancillary revenue associated with retail car sales,
divided by the total number of transaction days, with all periods
adjusted to eliminate the effect of fluctuations in foreign
currency. Our management believes eliminating the effect of
fluctuations in foreign currency is appropriate so as not to affect
the comparability of underlying trends. This statistic is important
to our management and investors as it represents the best
measurement of the changes in underlying pricing in the car rental
business and encompasses the elements in car rental pricing that
management has the ability to control.
Transaction Days
Transaction days 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.
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SOURCE Hertz Global Holdings, Inc.