"Hertz produced a very strong first quarter," said Stephen Scherr, Hertz chief executive officer. "Our team delivered on behalf of customers amidst strong demand, reflecting a sharp rebound in travel. We experienced high volumes and sustained pricing, particularly in the back half of the quarter following Omicron. We also maintained cost discipline and began to see the benefits of several new partnerships. I am equally pleased with our momentum on customer experience – especially as we move into the peak summer travel season and as we play a more central role in mobility over the longer term."

ESTERO, Fla., April 27, 2022 /PRNewswire/ -- Hertz Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz", "Hertz Global" or the "Company") today reported results for its first quarter 2022.

The Hertz Corporation. (PRNewsfoto/Hertz)

HIGHLIGHTS
  • Total revenues of $1.8 billion
  • GAAP net income of $426 million, or $0.82 per diluted share
  • Adjusted Net Income of $403 million, or $0.87 per adjusted diluted share (reflects adjustments for fair value remeasurements to outstanding public warrants and certain derivative contracts, among other items)
  • Adjusted Corporate EBITDA of $614 million
  • Adjusted Corporate EBITDA Margin of 34%
  • Operating cash flow of $621 million and adjusted operating cash flow of $677 million
  • Corporate liquidity of $2.7 billion at March 31st, including $1.5 billion in unrestricted cash
  • Company repurchased 38 million common shares from January 1, 2022 through April 21, 2022

For the first quarter 2022, the Company generated total revenues of $1.8 billion, which were 57% higher than the first quarter 2021, excluding Donlen. Monthly revenue per unit rose 26%, due to structural improvements and a continued recovery in travel demand. These trends, along with strong cost performance, drove $0.87 of adjusted earnings per share and $614 million of Adjusted Corporate EBITDA.

SUMMARY RESULTS

Three Months Ended

March 31,


Percent
Inc/(Dec)

2022 vs 2021

($ in millions, except earnings per share or where noted)

2022


2021


Hertz Global - Consolidated






Total revenues

$          1,810


$          1,289


40%

Adjusted net income (loss)(a)

$             403


$              (52)


NM

Adjusted diluted earnings (loss) per share(a)

$            0.87


$           (0.33)


NM

Adjusted Corporate EBITDA(a)

$             614


$                 2


NM

Adjusted Corporate EBITDA Margin(a)

34%


—%









Average Vehicles (in whole units)

481,211


367,600


31%

Average Rentable Vehicles (in whole units)

455,517


361,561


26%

Vehicle Utilization

75%


76%



Transaction Days (in thousands)

30,621


24,648


24%

Total RPD (in dollars)(b)

$          59.17


$          46.36


28%

Total RPU Per Month (in whole dollars)(b)

$          1,326


$          1,053


26%

Depreciation Per Unit Per Month (in whole dollars)(b)

$              (40)


$             219


NM







Americas RAC Segment






Total revenues

$          1,558


$             967


61%

Adjusted EBITDA

$             641


$               26


NM

Adjusted EBITDA Margin

41%


3%









Average Vehicles (in whole units)

397,620


300,606


32%

Average Rentable Vehicles (in whole units)

373,153


296,412


26%

Vehicle Utilization

76%


76%



Transaction Days (in thousands)

25,579


20,251


26%

Total RPD (in dollars)(b)

$          60.90


$          47.75


28%

Total RPU Per Month (in whole dollars)(b)

$          1,391


$          1,087


28%

Depreciation Per Unit Per Month (in whole dollars)(b)

$              (78)


$             233


NM







International RAC Segment






Total revenues

$             252


$             186


36%

Adjusted EBITDA

$               27


$                (8)


NM

Adjusted EBITDA Margin

11%


(4)%









Average Vehicles (in whole units)

83,591


66,995


25%

Average Rentable Vehicles (in whole units)

82,364


65,149


26%

Vehicle Utilization

68     %


75     %



Transaction Days (in thousands)

5,042


4,397


15%

Total RPD (in dollars)(b)

$          50.43


$          39.92


26%

Total RPU Per Month (in whole dollars)(b)

$          1,029


$             898


15%

Depreciation Per Unit Per Month (in whole dollars)(b)

$             138


$             156


(11)%


NM - Not meaningful

NOTE: Hertz Global - consolidated key metrics reflect global rental car operations only and exclude Donlen fleet management and leasing

(a)

Represents a non-GAAP measure. See the accompanying reconciliations included in Supplemental Schedule II.

(b)

Based on December 31, 2021 foreign exchange rates.

LIQUIDITY AND CAPITAL RESOURCES

During the first quarter 2022, the Company repurchased 35 million shares of its common stock for an aggregate price of $722 million. Between April 1, 2022 and April 21, 2022, the Company repurchased 3 million shares of Hertz Global's common stock for an aggregate purchase price of $70 million. As of April 21, 2022, $800 million remains available for share repurchases under the Board-approved plan.

During the first quarter 2022, the Company issued multiple series of medium-term fixed rate rental car asset backed notes for $2.5 billion. The net proceeds from the issuances were used to repay amounts outstanding on certain of the Company's variable rate rental car asset backed notes and for the future acquisition or refinancing of vehicles. Also, the Series 2021-A variable funding notes were amended to increase the maximum principal amount to $3.2 billion.

During the first quarter 2022, the Company amended its First Lien RCF to increase commitments from $1.3 billion to $1.5 billion, increase the sublimit for letters of credit from $1.1 billion to $1.4 billion and to revise the interest benchmark from a USD London Inter-Bank Offered Rate to a Secured Overnight Funding Rate.

The Company's liquidity position was $2.7 billion at March 31, 2022, of which $1.5 billion was unrestricted cash.

EARNINGS WEBCAST INFORMATION

Hertz Global's live webcast and conference call to discuss its first quarter 2022 results will be held on April 27, 2022, at 5:00 p.m. Eastern Time. The conference call will be broadcast live in listen-only mode on the company's investor relations website at IR.Hertz.com. If you would like to ask a question, the dial in number for the conference call is (800) 924-0350; access code 7595076. Investors are encouraged to dial-in approximately 10 minutes prior to the call.  A web replay will remain available on the website for approximately one year.  The earnings release and related supplemental schedules containing the reconciliations of non-GAAP measures will be available on the Hertz website, IR.Hertz.com.

UNAUDITED FINANCIAL DATA, SUPPLEMENTAL SCHEDULES, NON-GAAP MEASURES AND DEFINITIONS

Following is selected financial 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 Supplement Schedules, the Company provides definitions for terminology used throughout the earnings release and provides the usefulness of non-GAAP measures to investors and additional purposes for which management uses such measures.

In the first quarter of 2022, the Company began using Average Rentable Vehicles when calculating Available Car Days, Total RPU and Utilization instead of Average Vehicles. Average Rentable Vehicles excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels. Prior periods have been restated to conform with the revisions, as appropriate.

ABOUT HERTZ

The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands 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 vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation owns and 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 REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained or incorporated by reference 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," "guidance" 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 that 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 Form 10-K, 10-Q and 8-K filed or furnished to the SEC.

Important factors that could affect the Company's actual results and cause them to differ materially from those expressed in forward-looking statements include, among other things:

  • the length and severity of COVID-19 and the impact on the Company's vehicle rental business as a result of travel restrictions and business closures or disruptions, as well as the impact on its employee retention and talent management strategies;
  • the impact of macroeconomic conditions resulting in inflationary cost pressures resulting in labor and supply chain constraints and increased vehicle acquisition costs, among others;
  • the Company's ability to purchase adequate supplies of competitively priced vehicles at a reasonable cost as a result of the continuing global semiconductor microchip manufacturing shortage (the "Chip Shortage") and other raw material supply constraints;
  • the impact of the conflict between Russia and Ukraine on supply chains and raw materials for the automotive industry and uncertainty on overall consumer sentiment and travel demand, especially in Europe;
  • the impact on the value of the Company's non-program vehicles upon disposition when the Chip Shortage and other raw material supply constraints are alleviated;
  • the Company's ability to attract and retain key employees;
  • levels of travel demand, particularly business and leisure travel in the U.S. and in global markets;
  • significant changes in the competitive environment and the effect of competition in the Company's markets on rental volume and pricing;
  • occurrences that disrupt rental activity during the Company's peak periods;
  • 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 implement its business strategy, including its ability to implement plans to support a large scale electric vehicle fleet and to play a central role in the modern mobility ecosystem;
  • the Company's ability to adequately respond to changes in technology, customer demands and market competition;
  • the mix of program and non-program vehicles in the Company's fleet can lead to increased exposure to residual risk;
  • the Company's ability to dispose of vehicles in the used-vehicle market and use the proceeds of such sales to acquire new vehicles;
  • financial instability of the manufacturers of the Company's vehicles, which could impact its ability to fulfill obligations under repurchase or guaranteed depreciation programs;
  • an increase in the Company's vehicle costs or disruption to its rental activity due to safety recalls by the manufacturers of its vehicles;
  • the Company's access to third-party distribution channels and related prices, commission structures and transaction volumes;
  • the Company's ability to offer an excellent customer experience, retain and increase customer loyalty and market share;
  • the Company's ability to maintain its network of leases and vehicle rental concessions at airports in the U.S. and internationally;
  • the Company's ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;
  • major disruption in the Company's communication or centralized information networks or a failure to maintain, upgrade and consolidate its information technology systems;
  • the Company's ability to prevent the misuse or theft of information it possesses, including as a result of cyber security breaches and other security threats, as well as its ability to comply with privacy regulations;
  • risks associated with operating in many different countries, including the risk of a violation or alleged violation of applicable anti-corruption or anti-bribery laws and the Company's ability to repatriate cash from non-U.S. affiliates without adverse tax consequences;
  • the Company's ability to utilize its net operating loss carryforwards;
  • risks relating to tax laws, including those that affect the Company's ability to deduct certain business interest expenses and offset previously-deferred tax gains, as well as any adverse determinations or rulings by tax authorities;
  • changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, including those related to accounting principles, that affect the Company's operations, its costs or applicable tax rates;
  • the recoverability of the Company's goodwill and indefinite-lived intangible assets when performing impairment analysis;
  • costs and risks associated with potential litigation and investigations, compliance with and changes in laws and regulations and potential exposures under environmental laws and regulations; and
  • the availability of additional or continued sources of financing for the Company's revenue earning vehicles and to refinance its existing indebtedness.

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 of this release, and, except as required by law, 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.

UNAUDITED FINANCIAL INFORMATION


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS



Three Months Ended

March 31,

(In millions, except per share data)

2022


2021

Revenues

$               1,810


$               1,289

Expenses:




     Direct vehicle and operating

1,053


778

     Depreciation of revenue earning vehicles and lease charges, net

(59)


243

     Depreciation and amortization of non-vehicle assets

33


54

     Selling, general and administrative

235


151

     Interest expense, net:




          Vehicle

5


104

          Non-vehicle

39


44

               Total interest expense, net

44


148

     Other (income) expense, net

(2)


(3)

     Reorganization items, net


42

     (Gain) from the sale of a business


(392)

     Change in fair value of Public Warrants

(50)


               Total expenses

1,254


1,021

Income (loss) before income taxes

556


268

Income tax (provision) benefit

(130)


(79)

Net income (loss)

426


189

Net (income) loss attributable to noncontrolling interests


1

Net income (loss) attributable to Hertz Global

$                  426


$                  190

Weighted average number of shares outstanding:




     Basic

432


156

     Diluted

461


157

Earnings (loss) per share:




     Basic

$                 0.99


$                 1.22

     Diluted

$                 0.82


$                 1.21

 

UNAUDITED CONSOLIDATED BALANCE SHEETS


(In millions, except par value and share data)

March 31, 2022


December 31,
2021

ASSETS




Cash and cash equivalents

$               1,521


$               2,258

Restricted cash and cash equivalents:




Vehicle

301


77

     Non-vehicle

300


316

     Total restricted cash and cash equivalents

601


393

               Total cash and cash equivalents and restricted cash and cash equivalents

2,122


2,651

Receivables:




     Vehicle

93


62

     Non-vehicle, net of allowance of $45 and $48, respectively

707


696

               Total receivables, net

800


758

Prepaid expenses and other assets

1,331


1,017

Revenue earning vehicles:




     Vehicles

12,118


10,836

     Less: accumulated depreciation

(1,554)


(1,610)

               Total revenue earning vehicles, net

10,564


9,226

Property and equipment, net

611


608

Operating lease right-of-use assets

1,566


1,566

Intangible assets, net

2,903


2,912

Goodwill

1,044


1,045

               Total assets

$             20,941


$             19,783

LIABILITIES AND STOCKHOLDERS' EQUITY




Accounts payable:




     Vehicle

$                  109


$                    56

     Non-vehicle

566


516

               Total accounts payable

675


572

Accrued liabilities

939


863

Accrued taxes, net

188


157

Debt:




     Vehicle

9,098


7,921

     Non-vehicle

2,984


2,986

               Total debt

12,082


10,907

Public Warrants

1,272


1,324

Operating lease liabilities

1,502


1,510

Self-insured liabilities

468


463

Deferred income taxes, net

1,113


1,010

               Total liabilities

18,239


16,806

Commitments and contingencies




Stockholders' equity:




     Preferred stock, $0.01 par value, no shares issued and outstanding


     Common stock, $0.01 par value, 477,673,065 and 477,233,278 shares issued, respectively, and
          415,256,346 and 449,782,424 shares outstanding, respectively

5


5

     Treasury stock, at cost, 62,416,719 and 27,450,854 common shares, respectively

(1,430)


(708)

     Additional paid-in capital

6,237


6,209

     Retained earnings (Accumulated deficit)

(1,889)


(2,315)

     Accumulated other comprehensive income (loss)

(221)


(214)

               Total stockholders' equity

2,702


2,977

               Total liabilities and stockholders' equity

$             20,941


$             19,783

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS



Three Months Ended

March 31,

(In millions)

2022


2021

Cash flows from operating activities:




     Net income (loss)

$                  426


$                  189

     Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:




          Depreciation and reserves for revenue earning vehicles

(20)


275

          Depreciation and amortization, non-vehicle

33


54

          Amortization of deferred financing costs and debt discount (premium)

11


34

          Stock-based compensation charges

28


2

          Provision for receivables allowance

13


29

          Deferred income taxes, net

103


62

          Reorganization items, net


(15)

          (Gain) loss from the sale of a business


(392)

          Change in fair value of Public Warrants

(50)


          (Gain) loss on financial instruments

(44)


1

          Other

(1)


(2)

     Changes in assets and liabilities:




          Non-vehicle receivables

(43)


(73)

          Prepaid expenses and other assets

(40)


(87)

          Operating lease right-of-use assets

72


78

          Non-vehicle accounts payable

51


40

          Accrued liabilities

124


62

          Accrued taxes, net

30


36

          Operating lease liabilities

(80)


(78)

          Self-insured liabilities

8


(15)

               Net cash provided by (used in) operating activities

621


200

Cash flows from investing activities:




     Revenue earning vehicles expenditures

(2,985)


(1,517)

     Proceeds from disposal of revenue earning vehicles

1,471


686

     Non-vehicle capital asset expenditures

(30)


(9)

     Proceeds from non-vehicle capital assets disposed of or to be disposed of

1


4

     Collateral returned in exchange for letters of credit

17


     Return of (investment in) equity investments

(15)


     Proceeds from the sale of a business, net of cash sold


818

               Net cash provided by (used in) investing activities

(1,541)


(18)

Cash flows from financing activities:




     Proceeds from issuance of vehicle debt

4,680


1,096

     Repayments of vehicle debt

(3,492)


(946)

     Proceeds from issuance of non-vehicle debt


560

     Repayments of non-vehicle debt

(5)


(1)

     Payment of financing costs

(24)


(7)

     Proceeds from exercises of Public Warrants

3


     Contributions from (distributions to) noncontrolling interests


(10)

     Share repurchases

(766)


     Other

(4)


               Net cash provided by (used in) financing activities

392


692

Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash and
     cash equivalents

(1)


(12)

Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during
     the period

(529)


862

Cash and cash equivalents and restricted cash and cash equivalents at beginning of period(a)

2,651


1,578

Cash and cash equivalents and restricted cash and cash equivalents at end of period

$               2,122


$               2,440



(a)

Amounts include cash and cash equivalents and restricted cash and cash equivalents of Donlen which were held for sale as of December 31, 2020.

 

Supplemental Schedule I

HERTZ GLOBAL HOLDINGS, INC.

CONDENSED STATEMENT OF OPERATIONS BY SEGMENT

Unaudited



Three Months Ended March 31, 2022


Three Months Ended March 31, 2021

(In millions)

Americas RAC


International
RAC


Corporate


Hertz Global


Americas RAC


International
RAC


All other operations


Corporate


Hertz Global

Revenues

$     1,558


$            252


$           —


$     1,810


$        967


$            186


$          136


$           —


$     1,289

     Expenses:


















     Direct vehicle and operating

903


151


(1)


1,053


641


124


5


8


778

     Depreciation of revenue earning vehicles and lease charges, net

(93)


34



(59)


210


33




243

     Depreciation and amortization of non-vehicle assets

26


3


4


33


44


5


2


3


54

     Selling, general and administrative

86


42


107


235


52


32


10


57


151

     Interest expense, net:


















          Vehicle

2


3



5


72


20


12



104

          Non-vehicle

(8)



47


39


(2)


1


1


44


44

               Total interest expense, net

(6)


3


47


44


70


21


13


44


148

     Other (income) expense, net

(1)


(3)


2


(2)


(1)




(2)


(3)

     Reorganization items, net





(14)



(1)


57


42

     (Gain) from the sale of a business








(392)


(392)

     Change in fair value of Public Warrants



(50)


(50)






          Total expenses

915


230


109


1,254


1,002


215


29


(225)


1,021

Income (loss) before income taxes

$        643


$              22


$        (109)


556


$         (35)


$             (29)


$          107


$         225


268

Income tax (provision) benefit







(130)










(79)

Net income (loss)







426










189

Net (income) loss attributable to noncontrolling interests
















1

Net income (loss) attributable to Hertz Global







$        426










$        190


NOTE: Effective in the second quarter of 2021, as a result of the sale of the Company's Donlen fleet management and leasing business on March 30, 2021, the All Other Operations reportable segment, which consisted primarily of the former Donlen business, was no longer deemed a reportable segment.

 

Supplemental Schedule II

HERTZ GLOBAL HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURE - ADJUSTED NET INCOME (LOSS), ADJUSTED DILUTED EARNINGS (LOSS) PER SHARE AND ADJUSTED CORPORATE EBITDA

Unaudited



Three Months Ended

March 31,

(In millions, except per share data)

2022


2021

Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share:




     Net income (loss) attributable to Hertz Global

$                    426


$                    190

     Adjustments:




          Income tax provision (benefit)

130


79

          Vehicle and non-vehicle debt-related charges(a)(n)

12


35

          Restructuring and restructuring related charges(b)

6


12

          Information technology and finance transformation costs(c)

(1)


6

          Acquisition accounting-related depreciation and amortization(d)

1


13

          Reorganization items, net(e)


42

          Pre-reorganization and non-debtor financing charges(f)


23

          Gain from the Donlen Sale(g)


(392)

          Unrealized (gains) losses on financial instruments(h)

(44)


          Change in fair value of Public Warrants

(50)


          Other items(i)(o)

57


(87)

     Adjusted pre-tax income (loss)(j)

537


(79)

     Income tax (provision) benefit on adjusted pre-tax income (loss)(k)

(134)


27

     Adjusted Net Income (Loss)

$                    403


$                     (52)

     Weighted-average number of diluted shares outstanding

461


157

     Adjusted Diluted Earnings (Loss) Per Share(l)

$                   0.87


$                  (0.33)

Adjusted Corporate EBITDA:




     Net income (loss) attributable to Hertz Global

$                    426


$                    190

     Adjustments:




          Income tax provision (benefit)

130


79

          Non-vehicle depreciation and amortization(m)

33


54

          Non-vehicle debt interest, net

39


44

          Vehicle debt-related charges(a)(n)

7


28

          Restructuring and restructuring related charges(b)

6


12

          Information technology and finance transformation costs(c)

(1)


6

          Reorganization items, net(e)


42

          Pre-reorganization and non-debtor financing charges(f)


23

          Gain from the Donlen Sale(g)


(392)

          Unrealized (gains) losses on financial instruments(h)

(44)


          Change in fair value of Public Warrants

(50)


          Other items(i)(p)

68


(84)

     Adjusted Corporate EBITDA

$                    614


$                        2

 

Supplemental Schedule II (continued)

(a)

Represents debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.

(b)

Represents charges incurred under restructuring actions as defined in U.S. GAAP. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives. For the three months ended March 31, 2022, charges incurred related primarily to International RAC. For the three months ended March 31, 2021, charges incurred were $7 million and $5 million International RAC and Corporate, respectively.

(c)

Represents costs associated with the Company's information technology and finance transformation programs, both of which were multi-year initiatives to upgrade and modernize the Company's systems and processes. These costs related primarily to Corporate.

(d)

Represents incremental expense associated with the amortization of other intangible assets and depreciation of property and equipment relating to acquisition accounting.

(e)

Represents charges incurred associated with the Reorganization and emergence from Chapter 11, primarily for professional fees. The charges relate primarily to Corporate.

(f)

Represents charges incurred prior to the filing of the Chapter 11 Cases comprised of preparation charges for the Reorganization, such as professional fees. Also includes, certain non-debtor financing and professional fee charges. For the three months ended March 31, 2021, charges incurred were $10 million, $9 million, $2 million and $2 million in Corporate, Americas RAC, International RAC and All other operations, respectively.

(g)

Represents the gain from the sale of the Company's Donlen business on March 30, 2021, primarily associated with Corporate.

(h)

Represents unrealized gains (losses) on derivative financial instruments, primarily associated with Americas RAC.

(i)

Represents miscellaneous items. For 2022, primarily includes bankruptcy claims, certain professional fees and charges related to the settlement of bankruptcy claims. For 2021, includes $100 million due to the suspension of depreciation for the Donlen leasing and fleet management operations while classified as held for sale in all other operations, partially offset by charges for a multiemployer pension plan withdrawal liability in Corporate.

(j)

Adjustments by caption on a pre-tax basis were as follows:

 

Increase (decrease) to expenses

Three Months Ended

March 31,

(In millions)

2022


2021

Direct vehicle and operating

$                        (2)


$                       87

Selling, general and administrative

(5)


(31)

Interest expense, net:




     Vehicle

36


(39)

     Non-vehicle

(5)


(7)

          Total interest expense, net

31


(46)

Other income (expense), net

(55)


(12)

Reorganization items, net


(42)

Gain from the Donlen Sale


392

Change in fair value of Public Warrants

50


          Total adjustments

$                       19


$                     348

 

(k)

Derived utilizing a combined statutory rate of 25% and 34%  for the periods ended March 31, 2022 and 2021, respectively, applied to the respective Adjusted Pre-tax Income (Loss).

(l)

Adjustments used to reconcile diluted earnings (loss) per share on a GAAP basis to Adjusted Diluted Earnings (Loss) Per Share are comprised of the same adjustments, inclusive of the tax impact, used to reconcile net income (loss) to Adjusted Net Income (Loss) divided by the weighted-average diluted shares outstanding during the period.

(m)

Non-vehicle depreciation and amortization expense for Americas RAC, Corporate and International RAC for the three months ended March 31, 2022 was $26 million, $4 million and $3 million, respectively. For the three months ended March 31, 2021 was $44 million, $5 million, $3 million and $2 million for Americas RAC, International RAC, Corporate and All other operations, respectively.

(n)

Vehicle debt-related charges for Americas RAC and International RAC for the three months ended March 31, 2022 were $6 million and $1 million, respectively. For the three months ended March 31, 2021, vehicle debt-related charges for Americas RAC, International RAC and All other operations were $21 million, $5 million and $2 million, respectively.

(o)

In 2022, includes letter of credit fees recorded in Corporate.

(p)

In 2022, Includes an adjustment for certain non-cash stock-based compensation charges recorded in Corporate.

 

Supplemental Schedule III

HERTZ GLOBAL HOLDINGS, INC.

RECONCILIATION OF1 GAAP TO NON-GAAP MEASURE - ADJUSTED OPERATING CASH FLOW

AND ADJUSTED FREE CASH FLOW

Unaudited



Three Months Ended
March 31,

(In millions)

2022

ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW:


Net cash provided by (used in) operating activities

$                             621

Depreciation and reserves for revenue earning vehicles

20

Bankruptcy related payments - post emergence

36

Adjusted operating cash flow

677

Non-vehicle capital asset expenditures, net

(29)

Adjusted operating cash flow before vehicle investment

648

Net fleet growth after financing

(569)

Adjusted free cash flow

$                               79



CALCULATION OF NET FLEET GROWTH AFTER FINANCING:


Revenue earning vehicles expenditures

$                         (2,985)

Proceeds from disposal of revenue earning vehicles

1,471

     Revenue earning vehicles capital expenditures, net

(1,514)

Depreciation and reserves for revenue earning vehicles

(20)

Financing activity related to vehicles:


     Borrowings

4,680

     Payments

(3,492)

     Restricted cash changes, vehicle

(223)

          Net financing activity related to vehicles

965

Net fleet growth after financing

$                            (569)



Note:  

Adjusted free cash flow for the first quarter 2021 is not shown in the above table because it is not comparable to the corresponding period in 2022 due to the Company's restructuring.

 

Supplemental Schedule IV

HERTZ GLOBAL HOLDINGS, INC.

NET DEBT CALCULATION

Unaudited



As of March 31, 2022


As of December 31, 2021

(In millions)

Vehicle


Non-Vehicle


Total


Vehicle


Non-Vehicle


Total

Term loans

$                    —


$               1,535


$               1,535


$                    —


$               1,539


$               1,539

Senior notes


1,500


1,500



1,500


1,500

U.S. vehicle financing (HVF III)

8,147



8,147


7,001



7,001

International vehicle financing (Various)

909



909


860



860

Other debt

94


15


109


93


16


109

Debt issue costs, discounts and premiums

(52)


(66)


(118)


(33)


(69)


(102)

     Debt as reported in the balance sheet

9,098


2,984


12,082


7,921


2,986


10,907

Add:












     Debt issue costs, discounts and premiums

52


66


118


33


69


102

Less:












     Cash and cash equivalents


1,521


1,521



2,258


2,258

     Restricted cash

301



301


77



77

     Restricted cash and restricted cash equivalents associated with Term C Loan


245


245



245


245

Net Debt

$               8,849


$               1,284


$             10,133


$               7,877


$                  552


$               8,429













Corporate leverage ratio(a)



0.5x






0.3x





(a)

Corporate leverage ratio is calculated as non-vehicle net debt divided by LTM Adjusted Corporate EBITDA.

 

Supplemental Schedule V

HERTZ GLOBAL HOLDINGS, INC.

KEY METRICS CALCULATIONS

REVENUE, UTILIZATION AND DEPRECIATION

Unaudited


Global RAC



Three Months Ended

March 31,


Percent
Inc/(Dec)

($ in millions, except where noted)

2022


2021


Total RPD






Revenues

$          1,810


$          1,153



Foreign currency adjustment(a)

2


(10)



Total Revenues - adjusted for foreign currency

$          1,812


$          1,143



Transaction Days (in thousands)

30,621


24,648



Total RPD (in dollars)(b)

$          59.17


$          46.36


28 %







Total Revenue Per Unit Per Month






Total Revenues - adjusted for foreign currency

$          1,812


$          1,143



Average Rentable Vehicles (in whole units)(c)

455,517


361,561



Total revenue per unit (in whole dollars)

$          3,978


$          3,160



Number of months in period (in whole units)

3


3



Total RPU Per Month (in whole dollars)(b)(c)

$          1,326


$          1,053


26 %







Vehicle Utilization






Transaction Days (in thousands)

30,621


24,648



Average Rentable Vehicles (in whole units)(c)

455,517


361,561



Number of days in period (in whole units)

90


90



Available Car Days (in thousands)

40,999


32,554



Vehicle Utilization(c)(d)

75 %


76 %









Depreciation Per Unit Per Month






Depreciation of revenue earning vehicles and lease charges, net

$             (59)


$             243



Foreign currency adjustment(a) 

1


(2)



Adjusted depreciation of revenue earning vehicles and lease charges

$             (58)


$             241



Average Vehicles (in whole units)

481,211


367,600



Adjusted depreciation of revenue earning vehicles and lease charges divided by Average
     Vehicles (in whole dollars)

$           (121)


$             656



Number of months in period (in whole units)

3


3



Depreciation Per Unit Per Month (in whole dollars)

$             (40)


$             219


NM



Note: Global RAC represents Americas RAC and International RAC segment information on a combined basis and excludes Corporate and the Company's former Donlen leasing operations which were sold on March 30, 2021.

NM - Not meaningful

(a)

Based on December 31, 2021 foreign exchange rates.

(b)

Effective in the third quarter of 2021, the Company revised its calculation of Total RPD and Total RPU to include ancillary retail vehicle sales revenues.

(c)

Effective in the first quarter of 2022, the Company revised its calculation of Total RPU and Vehicle Utilization to use Average Rentable Vehicles in the denominator which excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.

(d)

Calculated as Transaction Days divided by Available Car Days.

 

Supplemental Schedule V (continued)

HERTZ GLOBAL HOLDINGS, INC.

KEY METRICS CALCULATIONS

REVENUE, UTILIZATION AND DEPRECIATION

Unaudited



Americas RAC



Three Months Ended

March 31,


Percent
Inc/(Dec)

($ in millions, except where noted)

2022


2021


Total RPD






Revenues

$          1,558


$             967



Foreign currency adjustment(a)




Total Revenues - adjusted for foreign currency

$          1,558


$             967



Transaction Days (in thousands)

25,579


20,251



Total RPD (in dollars)(b)

$          60.90


$          47.75


28 %







Total Revenue Per Unit Per Month






Total Revenues - adjusted for foreign currency

$          1,558


$             967



Average Rentable Vehicles (in whole units)(c)

373,153


296,412



Total revenue per unit (in whole dollars)

$          4,174


$          3,262



Number of months in period (in whole units)

3


3



Total RPU Per Month (in whole dollars)(b)(c)

$          1,391


$          1,087


28 %







Vehicle Utilization






Transaction Days (in thousands)

25,579


20,251



Average Rentable Vehicles (in whole units)(c)

373,153


296,412



Number of days in period (in whole units)

90


90



Available Car Days (in thousands)

33,584


26,690



Vehicle Utilization(c)(d)

76 %


76 %









Depreciation Per Unit Per Month






Depreciation of revenue earning vehicles and lease charges, net

$             (93)


$             210



Foreign currency adjustment(a) 




Adjusted depreciation of revenue earning vehicles and lease charges

$             (93)


$             210



Average Vehicles (in whole units)

397,620


300,606



Adjusted depreciation of revenue earning vehicles and lease charges divided by Average
     Vehicles (in whole dollars)

$           (234)


$             698



Number of months in period (in whole units)

3


3



Depreciation Per Unit Per Month (in whole dollars)

$             (78)


$             233


NM


NM - Not meaningful

(a)

Based on December 31, 2021 foreign exchange rates.

(b)

Effective in the third quarter of 2021, the Company revised its calculation of Total RPD and Total RPU to include ancillary retail vehicle sales revenues.

(c)

Effective in the first quarter of 2022, the Company revised its calculation of Total RPU and Vehicle Utilization to use Average Rentable Vehicles in the denominator which excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.

(d)

Calculated as Transaction Days divided by Available Car Days.

 

Supplemental Schedule V (continued)

HERTZ GLOBAL HOLDINGS, INC.

KEY METRICS CALCULATIONS

REVENUE, UTILIZATION AND DEPRECIATION

Unaudited


International RAC



Three Months Ended
March 31,


Percent
Inc/(Dec)

($ in millions, except where noted)

2022


2021


Total RPD






Revenues

$             252


$             186



Foreign currency adjustment(a)

2


(10)



Total Revenues - adjusted for foreign currency

$             254


$             176



Transaction Days (in thousands)

5,042


4,397



Total RPD (in dollars)(b)

$          50.43


$          39.92


26 %







Total Revenue Per Unit Per Month






Total Revenues - adjusted for foreign currency

$             254


$             176



Average Rentable Vehicles (in whole units)(c)

82,364


65,149



Total revenue per unit (in whole dollars)

$          3,087


$          2,694



Number of months in period (in whole units)

3


3



Total RPU Per Month (in whole dollars)(b)(c)

$          1,029


$             898


15 %







Vehicle Utilization






Transaction Days (in thousands)

5,042


4,397



Average Rentable Vehicles (in whole units)(c)

82,364


65,149



Number of days in period (in whole units)

90


90



Available Car Days (in thousands)

7,415


5,864



Vehicle Utilization(c)(d)

68 %


75 %









Depreciation Per Unit Per Month






Depreciation of revenue earning vehicles and lease charges, net

$               34


$               33



Foreign currency adjustment(a) 

1


(2)



Adjusted depreciation of revenue earning vehicles and lease charges

$               35


$               31



Average Vehicles (in whole units)

83,591


66,995



Adjusted depreciation of revenue earning vehicles and lease charges divided by Average
     Vehicles (in whole dollars)

$             415


$             468



Number of months in period (in whole units)

3


3



Depreciation Per Unit Per Month (in whole dollars)

$             138


$             156


(11) %



(a)

Based on December 31, 2021 foreign exchange rates.

(b)

Effective in the third quarter of 2021, the Company revised its calculation of Total RPD and Total RPU to include ancillary retail vehicle sales revenues.

(c)

Effective in the first quarter of 2022, the Company revised its calculation of Total RPU and Vehicle Utilization to use Average Rentable Vehicles in the denominator which excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.

(d)

Calculated as Transaction Days divided by Available Car Days.

 

Supplemental Schedule VI

HERTZ GLOBAL HOLDINGS, INC.

RECAST OF HISTORICAL KEY METRICS

Unaudited


Global RAC



Three Months Ended

March 31, 2021

($ in millions, except where noted)

As Reported


Adjustment


As Revised

Total Revenue Per Unit Per Month






Total Revenues - adjusted for foreign currency(a)

$          1,143




$          1,143

Average Rentable Vehicles (in whole units)(c)

367,600


(6,039)


361,561

Total revenue per unit (in whole dollars)

$          3,108


52


$          3,160

Number of months in period (in whole units)

3




3

Total RPU Per Month (in whole dollars)(b)(c)

$          1,036


17


$          1,053







Vehicle Utilization






Transaction Days (in thousands)

24,648




24,648

Average Rentable Vehicles (in whole units)(c)

367,600


(6,039)


361,561

Number of days in period (in whole units)

90




90

Available Car Days (in thousands)

33,084


(530)


32,554

Vehicle Utilization(c)(d)

74 %


2 %


76 %



(a)

Based on December 31, 2021 foreign exchange rates.

(b)

Effective in the third quarter of 2021, the Company revised its calculation of Total RPU to include ancillary retail vehicle sales revenues.

(c)

Effective in the first quarter of 2022, the Company revised its calculation of Total RPU and Vehicle Utilization to use Average Rentable Vehicles in the denominator which excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.

(d)

Calculated as Transaction Days divided by Available Car Days.

 

Supplemental Schedule VI (continued)

HERTZ GLOBAL HOLDINGS, INC.

RECAST OF HISTORICAL KEY METRICS

Unaudited


Americas RAC



Three Months Ended

March 31, 2021

($ in millions, except where noted)

As Reported


Adjustment


As Revised

Total Revenue Per Unit Per Month






Total Revenues - adjusted for foreign currency(a)

$             967




$             967

Average Rentable Vehicles (in whole units)(c)

300,606


(4,194)


296,412

Total revenue per unit (in whole dollars)

$          3,217


45


$          3,262

Number of months in period (in whole units)

3




3

Total RPU Per Month (in whole dollars)(b)(c)

$          1,072


15


$          1,087







Vehicle Utilization






Transaction Days (in thousands)

20,251




20,251

Average Rentable Vehicles (in whole units)(c)

300,606


(4,194)


296,412

Number of days in period (in whole units)

90




90

Available Car Days (in thousands)

27,055


(365)


26,690

Vehicle Utilization(c)(d)

75 %


1 %


76 %



(a)

Based on December 31, 2021 foreign exchange rates.

(b)

Effective in the third quarter of 2021, the Company revised its calculation of Total Total RPU to include ancillary retail vehicle sales revenues.

(c)

Effective in the first quarter of 2022, the Company revised its calculation of Total RPU and Vehicle Utilization to use Average Rentable Vehicles in the denominator which excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.

(d)

Calculated as Transaction Days divided by Available Car Days.

 

Supplemental Schedule VI (continued)

HERTZ GLOBAL HOLDINGS, INC.

RECAST OF HISTORICAL KEY METRICS

Unaudited


International RAC



Three Months Ended

March 31, 2021

($ in millions, except where noted)

As Reported


Adjustment


Revised

Total Revenue Per Unit Per Month






Total Revenues - adjusted for foreign currency(a)

$             176




$             176

Average Rentable Vehicles (in whole units)(c)

66,995


(1,846)


65,149

Total revenue per unit (in whole dollars)

$          2,620


74


$          2,694

Number of months in period (in whole units)

3




3

Total RPU Per Month (in whole dollars)(b)(c)

$             873


25


$             898







Vehicle Utilization






Transaction Days (in thousands)

4,397




4,397

Average Rentable Vehicles (in whole units)(c)

66,995


(1,846)


65,149

Number of days in period (in whole units)

90




90

Available Car Days (in thousands)

6,030


(166)


5,864

Vehicle Utilization(c)(d)

73 %


2 %


75 %



(a)

Based on December 31, 2021 foreign exchange rates.

(b)

Effective in the third quarter of 2021, the Company revised its calculation of Total RPU to include ancillary retail vehicle sales revenues.

(c)

Effective in the first quarter of 2022, the Company revised its calculation of Total RPU and Vehicle Utilization to use Average Rentable Vehicles in the denominator which excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.

(d)

Calculated as Transaction Days divided by Available Car Days.

NON-GAAP MEASURES AND KEY METRICS

The term "GAAP" refers to accounting principles generally accepted in the United States. Adjusted EBITDA is the Company's segment measure of profitability and complies with GAAP when used in that context.

NON-GAAP MEASURES

Non-GAAP measures are not recognized measurements under GAAP. When evaluating the Company's operating performance or liquidity, investors should not consider non-GAAP measures in isolation of, superior to, or as a substitute for measures of the Company's financial performance as determined in accordance with GAAP.

Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share ("Adjusted EPS")

Adjusted Net Income (Loss) represents income or loss attributable to the Company as adjusted to eliminate the impact of GAAP income tax; vehicle and non-vehicle debt-related charges; restructuring and restructuring related charges; information technology and finance transformation costs; acquisition accounting-related depreciation and amortization; reorganization items, net; pre-reorganization and non-debtor financing charges; gain from the sale of a business; change in fair value of Public Warrants; unrealized (gains) losses on financial instruments and certain other miscellaneous items on a pre-tax basis. Adjusted Net Income (Loss) includes a provision (benefit) for income taxes derived utilizing a combined statutory rate. The combined statutory rate is management's estimate of the Company's long-term tax rate. Its most comparable GAAP measure is net income (loss) attributable to the Company.

Adjusted EPS represents Adjusted Net Income (Loss) on a per diluted share basis using the weighted-average number of diluted shares outstanding for the period. Its most comparable GAAP measure is diluted earnings (loss) per share.

Adjusted Net Income (Loss) and Adjusted EPS are important operating metrics because they allow management and investors to assess operational performance of the Company's business, exclusive of the items mentioned above that are not operational in nature or comparable to those of the Company's competitors.

Adjusted Corporate EBITDA and Adjusted Corporate EBITDA Margin

Adjusted Corporate EBITDA represents income or loss attributable to the Company as adjusted to eliminate the impact of GAAP income tax; non-vehicle depreciation and amortization; non-vehicle debt interest, net; vehicle debt-related charges; restructuring and restructuring related charges; information technology and finance transformation costs; reorganization items, net; pre-reorganization and non-debtor financing charges; gain from the sale of a business; change in fair value of Public Warrants; unrealized (gains) losses on financial instruments and certain other miscellaneous items.

Adjusted Corporate EBITDA Margin is calculated as the ratio of Adjusted Corporate EBITDA to total revenues.

Management uses these measures as operating performance metrics for internal monitoring and planning purposes, including the preparation of the Company's annual operating budget and monthly operating reviews, and analysis of investment decisions, profitability and performance trends. These measures enable management and investors to isolate the effects on profitability of operating metrics most meaningful to the business of renting and leasing vehicles. They also allow management and investors to assess the performance of the entire business on the same basis as its reportable segments. Adjusted Corporate EBITDA is also utilized in the determination of certain executive compensation. Its most comparable GAAP measure is net income (loss) attributable to the Company.

Adjusted operating cash flow and adjusted free cash flow

Adjusted operating cash flow represents net cash provided by operating activities net of the non-cash add back for vehicle depreciation and reserves, and exclusive of bankruptcy related payments made post emergence.  Adjusted operating cash flow is important to management and investors as it provides useful information about the amount of cash generated from operations when fully burdened by fleet costs.

Adjusted free cash flow represents adjusted operating cash flow plus the impact of net non-vehicle capital expenditures and net fleet growth after financing. Adjusted Free Cash Flow is important to management and investors as it provides useful information about the amount of cash available for, but not limited to, the reduction of non-vehicle debt, share repurchase and acquisition.

KEY METRICS
Available Car Days

Available Car Days represents Average Rentable Vehicles multiplied by the number of days in a given period.

Average Vehicles ("Fleet Capacity" or "Capacity")

Average Vehicles is determined using a simple average of the number of vehicles in the fleet whether owned or leased by the Company at the beginning and end of a given period.

Average Rentable Vehicles

Average Rentable Vehicles reflects Average Vehicles excluding vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.

Depreciation Per Unit Per Month ("Depreciation Per Unit" or "DPU")

Depreciation Per Unit Per Month represents the amount of average depreciation expense and lease charges per vehicle per month, exclusive of the impacts of foreign currency exchange rates so as not to affect the comparability of underlying trends. This metric is important to management and investors as it reflects how effectively the Company is managing the costs of its vehicles and facilitates comparisons with other participants in the vehicle rental industry.

Total Revenue Per Transaction Day ("Total RPD"or "RPD"; also referred to as "pricing")

Total RPD represents revenue generated per transaction day, excluding the impact of foreign currency exchange rates so as not to affect the comparability of underlying trends. This metric is important to management and investors as it represents a measure of changes in the underlying pricing in the vehicle rental business and encompasses the elements in vehicle rental pricing that management has the ability to control.

Historically, the Company excluded revenue generated from ancillary retail vehicles sales. Effective in the third quarter 2021, the Company revised its calculation of Total RPD to include ancillary retail vehicle sales revenues to better align with current industry practice. Prior periods shown have been restated to conform with the revised definition.

Total Revenue Per Unit Per Month ("Total RPU" or "Total RPU Per Month")

Total RPU Per Month represents the amount of revenue generated per vehicle in the rental fleet each month, excluding the impact of foreign currency exchange rates so as not to affect the comparability of underlying trends. This metric is important to management and investors as it provides a measure of  revenue productivity relative to the number of vehicles in our rental fleet whether owned or leased, or asset efficiency.

Historically, the Company excluded revenue generated from ancillary retail vehicles sales. Effective in the third quarter 2021, the Company revised its calculation of Total RPU to include ancillary retail vehicle sales revenues to better align with current industry practice. Also, historically, the company used Average Vehicles as the denominator to calculate Total RPU and effective in the first quarter of 2022, the Company revised the calculation to use Average Rentable Vehicles. Prior periods shown have been restated to conform with the revised definition.

Transaction Days ("Days"; also referred to as "volume")

Transaction Days represents 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. This metric is important to management and investors as it represents the number of revenue-generating days.

Vehicle Utilization ("Utilization")

Effective in the first quarter of 2022, in connection with the appointment of the new CEO (who serves as our Chief Operating Decision Maker) and arising from significantly increased activity in vehicle dispositions, we began using Average Rentable Vehicles when calculating Available Car Days, Total RPU and Utilization instead of Average Vehicles. Average Rentable Vehicles excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels. We believe this is a better measure of the productivity of our rental fleet as it is unaffected by fluctuations in disposition activity. Prior periods have been restated to conform with the revisions, as appropriate.

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SOURCE Hertz Global Holdings, Inc.

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