TULSA, Okla., Feb. 24, 2011 /PRNewswire/ -- Dollar Thrifty
Automotive Group, Inc. (NYSE: DTG) today reported results for the
fourth quarter and year ended December 31,
2010. Net income for the 2010 fourth quarter was
$12.5 million, or $0.41 per diluted share, compared to net income
of $11.5 million, or $0.42 per diluted share, in the fourth quarter of
2009. Net income for both the fourth quarter of 2010 and 2009
included a net favorable impact on income of $0.14 per diluted share, related to changes in
fair value of derivatives and impairments of long-lived assets.
(Logo:
http://photos.prnewswire.com/prnh/20020412/DTGLOGO)
Non-GAAP net income for the 2010 fourth quarter was $8.3 million, or $0.27 per diluted share, compared to non-GAAP net
income of $7.7 million, or
$0.28 per diluted share, for the 2009
fourth quarter. Non-GAAP net income excludes the (increase)
decrease in fair value of derivatives and non-cash charges related
to impairments of long-lived assets, net of related tax impact.
The Company noted that both its GAAP and non-GAAP earnings
were negatively impacted by $2.1
million in merger-related expenses incurred during the
fourth quarter of 2010. Additionally, the Company noted that
on a comparative basis, gains on risk vehicle sales declined in the
fourth quarter of 2010 by $16.3
million as compared to same period last year.
The Company reported Corporate Adjusted EBITDA for the fourth
quarter of 2010 of $30.2 million,
compared to $26.2 million in the
fourth quarter of 2009. Corporate Adjusted EBITDA in the
fourth quarter of 2010 was negatively impacted by the $2.1 million of merger-related expenses, and on a
comparative basis, reflected a reduction of $16.3 million in gains on risk vehicle sales as
discussed above.
"This quarter marks our eighth consecutive quarter of
year-over-year double-digit growth in Corporate Adjusted EBITDA.
Additionally, excluding the impact of merger-related
expenses, 2010 full year results represent an approximate
$100 million improvement in Corporate
Adjusted EBITDA compared to the previous best year in the Company's
history," said Scott L. Thompson,
President and Chief Executive Officer. "We are proud of the
Company's financial performance despite the lethargic economic
environment in 2010. We appreciate our employees' contributions to
the Company's success and their ongoing focus on providing
outstanding service to our value-oriented customers."
For the quarter ended December 31,
2010, the Company's total revenue was $349.1 million, as compared to $345.3 million for the comparable 2009 period.
Vehicle rental revenues for the quarter were up 1.6 percent,
driven primarily by a 2.8 percent increase in transaction days that
was partially offset by a 1.2 percent decrease in revenue per day.
The average fleet for the quarter was up 1.6 percent, while
utilization for the quarter increased 90 basis points from last
year's fourth quarter.
"Revenue for the quarter was in line with our expectations, as
overall transaction volumes continued to reflect an improving
travel market. We experienced a minor decline in fourth
quarter revenue per day as we faced a slightly more competitive
market and a very difficult comparison, having achieved a 12
percent increase in revenue per day in the fourth quarter of 2009,"
said Thompson.
Per vehicle depreciation cost of $308 per month in the fourth quarter of 2010 is
in line with our expectations for 2011, although it represented an
increase from the 2009 level of $274
per month. The increase in per vehicle depreciation cost
resulted from a decrease in gains on disposition of risk vehicles
of $16.3 million compared to the
prior year period. This decrease was attributable to approximately
11,000 fewer vehicles disposed of on a year-over-year basis, and
gains on sales of risk vehicles normalizing in the fourth quarter
of 2010 from the record levels in 2009. Vehicle utilization
for the fourth quarter of 2010 was 79.7 percent, up from 78.8
percent during last year's fourth quarter.
In spite of an increase in rental revenues for the fourth
quarter of 2010, direct vehicle and operating expenses and selling,
general and administrative expenses declined on a total dollar
basis. Additionally, these expenses declined to 61.5 percent
of revenues for the fourth quarter of 2010, compared to 65.1
percent of revenues in the fourth quarter of 2009. The
decrease in expenses was primarily a result of lower
vehicle-related insurance costs, in addition to the ongoing
benefits of company-wide cost reduction efforts and productivity
initiatives.
Full Year Results
For the year ended December 31,
2010, net income was $131.2
million, or $4.34 per diluted
share, compared to $45 million or
$1.88 per diluted share for the year
ended December 31, 2009, in spite of
an increase in diluted shares outstanding of approximately 25
percent as a result of the Company's equity offering in
November 2009. Net income in
2010 included a net positive impact of $0.54 per diluted share related to favorable
changes in fair value of derivatives and long-lived asset
impairments, compared to a net positive impact on income of
$0.65 per diluted share in 2009.
The Company noted that net income for the full year of 2010 was
negatively impacted by approximately $13.2
million of after-tax merger-related expenses, or
$0.44 per diluted share, while no
such charges were incurred in 2009. The Company also noted
that rental revenue was flat on a year-over-year basis, driven by a
90 basis point decrease in transaction days that was offset by a 90
basis point increase in revenue per day.
Non-GAAP net income for the year ended December 31, 2010 was $115.0 million, or $3.80 per diluted share, compared to non-GAAP net
income of $29.6 million, or
$1.24 per diluted share for the same
period in 2009. Non-GAAP net income excludes the (increase)
decrease in fair value of derivatives and non-cash charges related
to the impairment of long-lived assets, net of related tax impact.
Excluding the impact of merger-related expenses mentioned
above, non-GAAP net income for the full year of 2010 would have
been $4.24 per diluted share,
compared to $1.24 per diluted share
in the prior year period.
Corporate Adjusted EBITDA for the year ended December 31, 2010, excluding the merger-related
expenses mentioned above, was $258.3
million, an increase of approximately 160 percent, or
$158.9 million, compared to the full
year of 2009.
"For Dollar Thrifty, 2010 was a transition year, a year in which
we moved effectively from a turnaround strategy to one focused on
maximizing profitability. We capitalized on our
long-established value brands, numerous profit enhancement
initiatives and our significantly improved financial strength.
I am pleased to report the Company successfully navigated the
transition, resulting in the most profitable year in the Company's
history by a wide margin. I am even more pleased to report that we
also improved our customer satisfaction scores, evidencing our
balancing of long-term and short-term objectives," said Thompson.
Liquidity and Capital Resources
During 2010, the Company further strengthened its liquidity by
adding $950 million in new fleet
financing capacity, while further reducing outstanding debt levels
by more than $300 million from
year-end 2009 levels and approximately $1.1
billion from year-end 2008 levels.
As of December 31, 2010, the
Company had $563 million in cash and
cash equivalents, and an additional $277
million in restricted cash and investments primarily
available for the purchase of vehicles and/or repayment of vehicle
financing obligations. The Company's tangible net worth at
December 31, 2010 was $515 million.
FTC Update
As previously reported, the Company and Avis Budget Group, Inc.
("Avis Budget") have been cooperating to pursue antitrust
regulatory clearance of a potential acquisition of the Company's
common stock by Avis Budget.
The Company believes substantial progress has been made in the
discussions with the United States Federal Trade Commission (the
"FTC"); nevertheless, the FTC's position with respect to the
competitive issues remains uncertain. The Company submitted
its certification of substantial compliance with the Second Request
on February 23, 2011. In
addition, Avis Budget submitted its certification of substantial
compliance with the Second Request on February 4, 2011. Based on the timing of
these submissions, the Company expects to have greater clarity
around the FTC's official position in the near future.
"The FTC is performing an extensive review as it appropriately
considers the proposed transaction. The process began in May of
2010, and we are eager to bring clarity to this matter for our
shareholders and employees," said Thompson.
2011 Outlook
The Company noted that it expects further recovery in travel
activity as the economy continues to improve. The Company
expects the revenue per day environment to be competitive,
resulting in flat pricing for 2011 compared to 2010. The
Company also disclosed that its guidance is based on a slightly
less robust used vehicle market in 2011 as compared to 2010.
The Company noted that Corporate Adjusted EBITDA in 2010
benefitted from approximately $63
million in gains on disposition of risk vehicles that were
partially a consequence of the rapid recovery in the used vehicle
market from historic lows in 2009, and the Company's guidance
reflects a depreciation and residual value environment more in line
with historical norms.
Based on the above expectations and the additional information
outlined below, the Company is targeting Corporate Adjusted EBITDA
for the full year of 2011 to be within a range of $175 million to $200 million. This estimate
does not reflect the impact of merger-related expenses in 2011.
The Company provided the following additional information with
respect to its full year guidance:
- Vehicle rental revenues are projected to be up 2 – 4 percent
compared to 2010, with such increases occurring primarily in the
second through fourth quarters. This revenue growth is
projected to result primarily from low single-digit increases in
transaction days, driven by a rebound in travel demand as a result
of a slightly improving economy.
- Vehicle depreciation costs for the full year of 2011 are
expected to be within the Company's previously announced range of
$300 to $310 per vehicle per month.
- Interest expense is expected to decline significantly in 2011
compared to 2010, primarily as a result of a reduction in the
overall level of vehicle debt outstanding, combined with lower
overall interest cost on the Company's recently completed fleet
financing facilities as compared to the fixed rates paid on
maturing fleet debt facilities.
"We are excited about the Company's competitive position going
into 2011. We have two long-established value brands, broad
distribution of our products, competitive operating costs,
significant and growing world-wide franchisee base business,
minimal corporate leverage combined with significant tangible net
worth, and, lastly and most importantly, a very talented workforce.
Consistent with 2010, our primary objective will be to
maximize return on assets for our shareholders, and we will
consider all potential options to achieve that objective," said
Thompson.
Web cast and conference call information
The Dollar Thrifty Automotive Group, Inc. fourth quarter and
full year 2010 earnings conference call will be held on
Thursday, February 24th, at
8:00 a.m. (CST). Those interested in
listening to the conference call live may access the call via Web
cast at the corporate Web site, www.dtag.com, or by dialing
888-946-7608 (domestic) or 630-395-0278 (international) using the
pass code "Dollar Thrifty." An audio replay of the conference call
will be available through March 10,
2011, by calling 866-513-1235 (domestic) or 203-369-1977
(international). The replay will also be available via the
corporate Web site for one year.
About Dollar Thrifty Automotive Group, Inc.
Through its Dollar Rent A Car and Thrifty Car Rental brands, the
Company has been serving value-conscious leisure and business
travelers since 1950. The Company maintains a strong presence
in domestic leisure travel in virtually all of the top U.S. and
Canadian airport markets, and also derives a significant portion of
its revenue from international travelers to the U.S. under
contracts with various international tour operators. Dollar
and Thrifty have approximately 300 corporate locations in
the United States and Canada, with approximately 6,000 employees
located mainly in North America.
In addition to its corporate operations, the Company
maintains global service capabilities through an expansive
franchise network of approximately 1,275 franchises in 82
countries. For additional information, visit www.dtag.com or
the brand sites at www.dollar.com and www.thrifty.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements" about
our expectations, plans and performance. These statements use such
words as "may," "will," "expect," "believe," "intend," "should,"
"could," "anticipate," "estimate," "forecast," "project," "plan"
and similar expressions. These statements do not guarantee future
performance and Dollar Thrifty Automotive Group, Inc. assumes no
obligation to update them. Risks and uncertainties relating
to our business that could materially affect our future results
include:
- the impact of persistent pricing and demand pressures on our
results and our low cost structure, particularly in light of the
continuing volatility in the global financial and credit markets,
and concerns about global economic prospects and the timing and
strength of a recovery, and whether consumer confidence and
spending levels will continue to improve;
- whether ongoing governmental and regulatory initiatives in
the United States and elsewhere to
stimulate economic growth will be successful and the impact of
developments outside the United
States, such as the sovereign credit issues in certain
countries in the European Union, which could affect the relative
volatility of global credit markets generally, and the continuing
significant political unrest in the Middle East, which could cause prices for
petroleum products, including gasoline, to rise and adversely
affect both broader economic conditions and consumer discretionary
spending patterns;
- our ability to manage our fleet mix to match demand and meet
our target for vehicle depreciation costs, particularly in light of
the significant increase in the level of risk vehicles (i.e., those
vehicles not acquired through a guaranteed residual value program)
in our fleet and our exposure to the used vehicle market;
- the cost and other terms of acquiring and disposing of
automobiles and the impact of conditions in the used vehicle market
on our vehicle cost, including the impact on our results of
expected increases in our vehicle depreciation costs in 2011 based
on our current expectations with respect to the used vehicle
market, and our ability to reduce our fleet capacity as and when
projected by our plans;
- the impact of pricing and other actions by competitors,
particularly as they increase fleet sizes in anticipation of
seasonal activity;
- the strength of a recovery in the U.S. automotive industry,
particularly in light of our dependence on vehicle supply from U.S.
automotive manufacturers, and whether the recovery is
sustained;
- airline travel patterns, including disruptions or reductions in
air travel resulting from industry consolidation, capacity
reductions, pricing actions, severe weather conditions or other
events, such as airline bankruptcies, particularly given our
dependence on leisure travel;
- access to reservation distribution channels, particularly as
the role of the Internet increases in the marketing and sale of
travel-related services;
- our ability to obtain cost-effective financing as needed
(including replacement of asset-backed notes and other indebtedness
as it comes due) without unduly restricting our operational
flexibility;
- our ability to manage the consequences under our financing
agreements of an event of bankruptcy with respect to any of the
monoline insurers that provide credit support for our asset-backed
financing structures ("Monolines"), including Financial Guaranty
Insurance Company and Ambac Assurance Corporation;
- our ability to comply with financial covenants, including the
new financial covenants included in our amended senior secured
credit facilities, and the impact of those covenants on our
operating and financial flexibility;
- whether our preliminary expectations about our federal income
tax position, after giving effect to the impact of the Tax Relief
Act, are affected by changes in our expected fleet size or
operations or further legislative initiatives relating to taxes in
the United States or elsewhere,
and whether the Company will, as expected, recover previous
overpayments in respect of U.S. federal income taxes in 2011;
- the cost of regulatory compliance, costs and other effects of
potential future initiatives, including those directed at climate
change and its effects, and the costs and outcome of pending
litigation;
- disruptions in the operation or development of information and
communication systems that we rely on, including those relating to
methods of payment;
- local market conditions where we and our franchisees do
business, including whether franchisees will continue to have
access to capital as needed;
- the effectiveness of actions we take to manage costs and
liquidity; and
- the impact of other events that can disrupt consumer travel,
such as natural and man-made catastrophes, pandemics and actual and
perceived threats or acts of terrorism.
We are also subject to risks relating to a potential business
combination transaction, including the following:
- whether Avis Budget Group, Inc. ("Avis Budget") would obtain
regulatory approval to engage in a business combination transaction
with us and, if so, the conditions upon which such approval would
be granted (including potential divestitures of assets or
businesses of either company), whether we and Avis Budget would
reach agreement on the terms of such a transaction, whether our
stockholders would approve the transaction and whether other
conditions to consummation of the transaction would be satisfied or
waived;
- the impact on our results and liquidity if we become obligated
to pay a termination fee to Hertz Global Holdings, Inc. ("Hertz")
upon the Company's entry into a definitive agreement for, or its
completion or recommendation of, a qualifying business combination
transaction within 12 months of the October
1, 2010 termination date of our merger agreement with Hertz,
and whether and the extent to which the relevant third party would
bear all or any portion of that fee;
- the risks to our business and prospects pending any future
business combination transaction, diversion of management's
attention from day-to-day operations, a loss of key personnel,
disruption of our operations, and the impact of pending or future
litigation relating to any business combination transaction;
and
- the risks to our business and growth prospects as a stand-alone
company, in light of our dependence on future growth of the economy
as a whole to achieve meaningful revenue growth in the key airport
and local markets we serve, high barriers to entry in the insurance
replacement market, and capital and other constraints to expanding
company-owned stores internationally.
Forward-looking statements should be considered in light of
information in this press release and other filings we make with
the Securities and Exchange Commission.
|
|
|
|
|
|
|
|
|
Table
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar
Thrifty Automotive Group, Inc.
|
|
Consolidated
Statement of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands, except share and per share data)
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
As %
of
|
|
|
|
|
December
31,
|
|
Total
revenues
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Vehicle rentals
|
|
$
334,994
|
|
$
329,746
|
|
96.0%
|
|
95.5%
|
|
|
Other
|
|
14,065
|
|
15,576
|
|
4.0%
|
|
4.5%
|
|
|
Total
revenues
|
|
349,059
|
|
345,322
|
|
100.0%
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
|
168,105
|
|
178,354
|
|
48.2%
|
|
51.6%
|
|
|
Vehicle depreciation and lease
charges, net
|
|
91,140
|
|
80,886
|
|
26.1%
|
|
23.4%
|
|
|
Selling, general and
administrative
|
|
46,500
|
|
46,638
|
|
13.3%
|
|
13.5%
|
|
|
Interest expense, net
|
|
23,911
|
|
22,930
|
|
6.9%
|
|
6.6%
|
|
|
Long-lived asset
impairment
|
|
115
|
|
1,948
|
|
0.0%
|
|
0.7%
|
|
|
Total costs and
expenses
|
|
329,771
|
|
330,756
|
|
94.5%
|
|
95.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in fair
value of derivatives
|
|
(7,356)
|
|
(8,825)
|
|
(2.1%)
|
|
(2.6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
26,644
|
|
23,391
|
|
7.6%
|
|
6.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
14,148
|
|
11,927
|
|
4.0%
|
|
3.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
12,496
|
|
$
11,464
|
|
3.6%
|
|
3.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.44
|
|
$
0.44
|
|
|
|
|
|
|
Diluted
|
|
$
0.41
|
|
$
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number
|
|
|
|
|
|
|
|
|
|
of shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
28,699,875
|
|
25,920,013
|
|
|
|
|
|
|
Diluted
|
|
30,369,270
|
|
27,490,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
ended
|
|
As %
of
|
|
|
|
|
December
31,
|
|
Total
revenues
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Vehicle rentals
|
|
$
1,473,023
|
|
$
1,472,918
|
|
95.8%
|
|
95.3%
|
|
|
Other
|
|
64,137
|
|
73,331
|
|
4.2%
|
|
4.7%
|
|
|
Total
revenues
|
|
1,537,160
|
|
1,546,249
|
|
100.0%
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
|
745,535
|
|
768,456
|
|
48.5%
|
|
49.7%
|
|
|
Vehicle depreciation and lease
charges, net
|
|
299,200
|
|
426,092
|
|
19.5%
|
|
27.6%
|
|
|
Selling, general and
administrative
|
|
209,341
|
|
200,389
|
|
13.6%
|
|
13.0%
|
|
|
Interest expense, net
|
|
89,303
|
|
96,560
|
|
5.8%
|
|
6.2%
|
|
|
Long-lived asset
impairment
|
|
1,057
|
|
2,592
|
|
0.1%
|
|
0.1%
|
|
|
Total costs and
expenses
|
|
1,344,436
|
|
1,494,089
|
|
87.5%
|
|
96.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in fair
value of derivatives
|
|
(28,694)
|
|
(28,848)
|
|
(1.9%)
|
|
(1.8%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
221,418
|
|
81,008
|
|
14.4%
|
|
5.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
90,202
|
|
35,986
|
|
5.9%
|
|
2.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
131,216
|
|
$
45,022
|
|
8.5%
|
|
2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
(a)
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
4.58
|
|
$
1.98
|
|
|
|
|
|
|
Diluted
|
|
$
4.34
|
|
$
1.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number
|
|
|
|
|
|
|
|
|
|
of shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
28,623,108
|
|
22,687,077
|
|
|
|
|
|
|
Diluted
|
|
30,245,281
|
|
23,966,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The underlying diluted
per share information is calculated from the weighted average
common and common stock equivalents
|
|
outstanding during each quarter,
which may fluctuate based on quarterly income levels and market
prices. Therefore, the sum of the
|
|
quarters' per share information
may not equal the total year amounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
2
|
|
|
|
|
|
|
|
Dollar
Thrifty Automotive Group, Inc.
|
|
Selected
Operating and Financial Data
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
|
December 31,
2010
|
|
December 31,
2010
|
|
|
|
|
|
|
|
OPERATING DATA:
|
|
|
|
|
|
|
|
|
|
|
Vehicle Rental
Data:
|
|
|
|
|
|
|
|
|
|
|
|
Average number of vehicles
operated
|
97,870
|
|
102,291
|
|
|
% change from prior
year
|
1.6%
|
|
(0.6%)
|
|
|
Number of rental days
|
7,178,387
|
|
30,338,815
|
|
|
% change from prior
year
|
2.8%
|
|
(0.9%)
|
|
|
Vehicle utilization
|
79.7%
|
|
81.3%
|
|
|
Percentage points change
from prior year
|
0.9 p.p.
|
|
(0.2) p.p.
|
|
|
Average revenue per
day
|
$46.67
|
|
$48.55
|
|
|
% change from prior
year
|
(1.2%)
|
|
0.9%
|
|
|
Monthly average revenue per
vehicle
|
$1,141
|
|
$1,200
|
|
|
% change from prior
year
|
0.0%
|
|
0.7%
|
|
|
|
|
|
|
|
|
Average depreciable
fleet
|
98,630
|
|
103,207
|
|
|
% change from prior
year
|
0.2%
|
|
(2.0%)
|
|
|
Monthly average depreciation
(net) per vehicle
|
$308
|
|
$242
|
|
|
% change from prior
year
|
12.4%
|
|
(28.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA: (in millions)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Non-vehicle depreciation and
amortization
|
$
7
|
|
$
28
|
|
|
Non-vehicle interest
expense
|
3
|
|
10
|
|
|
Non-vehicle interest
income
|
-
|
|
(1)
|
|
|
Non-vehicle capital
expenditures
|
5
|
|
23
|
|
|
Cash paid for income
taxes
|
9
|
|
75
|
|
|
|
|
|
|
Selected
Balance Sheet Data
|
|
(In
millions)
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
(b)
|
|
$
563
|
|
$
500
|
|
|
Restricted cash and
investments
|
|
277
|
|
623
|
|
|
Revenue-earning vehicles,
net
|
|
1,342
|
|
1,229
|
|
|
|
|
|
|
|
|
|
Vehicle debt
|
|
1,249
|
|
1,570
|
|
|
Non-vehicle debt (corporate
debt)
|
|
148
|
|
158
|
|
|
Stockholders' equity
|
|
539
|
|
394
|
|
|
|
|
|
|
|
Tangible Net
Worth Calculation
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
$
539
|
|
$
394
|
|
Less: Intangible assets,
net
|
|
(24)
|
|
(26)
|
|
Tangible net worth
|
|
$
515
|
|
$
368
|
|
|
|
|
|
|
|
(b) Under the terms of a
February 2009 amendment to the Senior Secured
|
|
Credit Facilities, the Company
is required to maintain a minimum cash balance of
|
|
$100 million at all times; such
minimum balance is included in
|
|
cash and cash equivalents
herein.
|
|
|
|
|
|
|
Table
3
|
|
|
|
Dollar
Thrifty Automotive Group, Inc.
|
|
Non-GAAP
Measures
|
|
|
|
|
|
|
|
Non-GAAP pretax income (loss),
Non-GAAP net income (loss) and Non-GAAP EPS exclude the
impact of the (increase) decrease in fair value of
|
|
derivatives and the impact of
long-lived asset impairments, net of related tax impact (as
applicable), from the reported GAAP measure and is further
|
|
adjusted to exclude
merger-related expenses. Due to volatility resulting from the
mark-to-market treatment of the derivatives and the nature of
the
|
|
non-cash impairments and
merger-related expenses, the Company believes non-GAAP measures
provide an important assessment of year-over-year
|
|
operating results. See
tables below for a reconciliation of non-GAAP to GAAP
results.
|
|
|
|
The following table reconciles
reported GAAP pretax income per the income statement to non-GAAP
pretax income:
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
(in
thousands)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes - as
reported
|
$
26,644
|
|
$
23,391
|
|
$
221,418
|
|
$ 81,008
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in fair
value of derivatives
|
(7,356)
|
|
(8,825)
|
|
(28,694)
|
|
(28,848)
|
|
|
|
|
|
|
|
|
|
|
Long-lived asset
impairment
|
115
|
|
1,948
|
|
1,057
|
|
2,592
|
|
|
|
|
|
|
|
|
|
|
Pretax income -
non-GAAP
|
$
19,403
|
|
$
16,514
|
|
$
193,781
|
|
$ 54,752
|
|
|
|
|
|
|
|
|
|
|
Merger-related
expenses
|
2,146
|
|
-
|
|
22,605
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP pretax income,
excluding merger-related expenses
|
$
21,549
|
|
$
16,514
|
|
$
216,386
|
|
$ 54,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles
reported GAAP net income per the income statement to non-GAAP net
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
(in
thousands)
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Net income - as
reported
|
$
12,496
|
|
$
11,464
|
|
$
131,216
|
|
$ 45,022
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in fair
value of derivatives, net of tax (c)
|
(4,313)
|
|
(4,950)
|
|
(16,826)
|
|
(16,917)
|
|
|
|
|
|
|
|
|
|
|
Long-lived asset impairment, net
of tax (d)
|
70
|
|
1,209
|
|
645
|
|
1,497
|
|
|
|
|
|
|
|
|
|
|
Net income -
non-GAAP
|
$
8,253
|
|
$
7,723
|
|
$
115,035
|
|
$ 29,602
|
|
|
|
|
|
|
|
|
|
|
Merger-related expenses, net of
tax (e)
|
1,251
|
|
-
|
|
13,172
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income, excluding
merger-related expenses
|
$
9,504
|
|
$
7,723
|
|
$
128,207
|
|
$ 29,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles
reported GAAP diluted earnings per share ("EPS") to non-GAAP
diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
EPS, diluted - as
reported
|
$
0.41
|
|
$
0.42
|
|
$
4.34
|
|
$
1.88
|
|
|
|
|
|
|
|
|
|
|
EPS impact of (increase)
decrease in fair value of derivatives, net of tax
|
(0.14)
|
|
(0.18)
|
|
(0.56)
|
|
(0.71)
|
|
|
|
|
|
|
|
|
|
|
EPS impact of long-lived asset
impairment, net of tax
|
-
|
|
0.04
|
|
0.02
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
EPS, diluted - non-GAAP
(f)
|
$
0.27
|
|
$
0.28
|
|
$
3.80
|
|
$
1.24
|
|
|
|
|
|
|
|
|
|
|
EPS impact of merger-related
expenses, net of tax
|
0.04
|
|
-
|
|
0.44
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted EPS, excluding
merger-related expenses (f)
|
$
0.31
|
|
$
0.28
|
|
$
4.24
|
|
$
1.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) The tax effect of the
(increase) decrease in fair value of derivatives is calculated
using the entity-specific, U.S. federal and blended state tax
rate
|
|
applicable
to the derivative instruments which amounts are ($3,043,000) and
($3,875,000) for the three months ended December 31, 2010
and
|
|
2009,
respectively, and ($11,868,000) and ($11,931,000) for the year
ended December 31, 2010 and 2009, respectively.
|
|
|
|
(d) The tax effect of the
long-lived asset impairment is calculated using the tax-deductible
portion of the impairment and applying the
entity-specific,
|
|
U.S.
federal and blended state tax rate which amounts are $45,000 and
$739,000 for the three months ended December 31, 2010 and 2009,
respectively, and
|
|
$412,000
and $1,095,000 for the year ended December 31, 2010 and 2009,
respectively.
|
|
|
|
(e) Merger-related
expenses include legal, litigation, advisory and other fees related
to a potential merger transaction. The tax effect of the
merger-related
|
|
expenses is
calculated using the entity-specific, U.S. federal and blended
state tax rate applicable to the merger-related expenses which
amounts are
|
|
$895,000 and
$9,433,000 for the three months and year ended December 31, 2010,
respectively.
|
|
|
|
(f) Since each category of
earnings per share is computed independently for each period, total
per share amounts may not equal the sum of the
|
|
respective
categories.
|
|
|
|
|
|
|
|
|
|
|
Table
4
|
|
|
|
Dollar
Thrifty Automotive Group, Inc.
|
|
Non-GAAP
Measures
|
|
|
|
|
|
Corporate Adjusted
EBITDA means earnings, excluding the
impact of the (increase) decrease in fair value of derivatives,
before non-vehicle interest
|
|
expense, income taxes,
non-vehicle depreciation, amortization, and certain other items as
recapped below. The Company believes Corporate
Adjusted
|
|
EBITDA is important as it
provides investors with a supplemental measure of the Company's
liquidity by adjusting earnings to exclude certain
non-cash
|
|
items, in addition to its
relevance as a measure of operating performance. The items
excluded from Corporate Adjusted EBITDA but included in
the
|
|
calculation of the Company's
reported net income are significant components of its consolidated
statement of income, and must be considered in
|
|
performing a comprehensive
assessment of overall financial performance. Corporate
Adjusted EBITDA is not defined under GAAP and should not
be
|
|
considered as an alternative
measure of the Company's net income, cash flow or liquidity.
Corporate Adjusted EBITDA amounts presented may not
be
|
|
comparable to similar measures
disclosed by other companies.
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
(in
thousands)
|
|
(in
thousands)
|
|
Reconciliation of Net Income
to
|
|
|
|
|
|
|
|
|
|
Corporate Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income - as
reported
|
|
$
12,496
|
|
$
11,464
|
|
$
131,216
|
|
$
45,022
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in fair
value of derivatives
|
|
(7,356)
|
|
(8,825)
|
|
(28,694)
|
|
(28,848)
|
|
Non-vehicle interest
expense
|
|
2,346
|
|
2,644
|
|
9,647
|
|
12,797
|
|
Income tax expense
|
|
14,148
|
|
11,927
|
|
90,202
|
|
35,986
|
|
Non-vehicle
depreciation
|
|
5,082
|
|
4,142
|
|
20,190
|
|
19,200
|
|
Amortization
|
|
1,818
|
|
1,839
|
|
7,290
|
|
7,994
|
|
Non-cash stock
incentives
|
|
1,531
|
|
1,080
|
|
4,785
|
|
4,698
|
|
Long-lived asset
impairment
|
|
115
|
|
1,948
|
|
1,057
|
|
2,592
|
|
Other
|
|
(3)
|
|
(1)
|
|
(25)
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Adjusted
EBITDA
|
|
$
30,177
|
|
$
26,218
|
|
$
235,668
|
|
$
99,435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Corporate
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
to Cash Flows From Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Adjusted
EBITDA
|
|
$
30,177
|
|
$
26,218
|
|
$
235,668
|
|
$
99,435
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle depreciation, net of
gains/losses from disposal
|
|
91,131
|
|
80,831
|
|
299,149
|
|
425,574
|
|
Non-vehicle interest
expense
|
|
(2,346)
|
|
(2,644)
|
|
(9,647)
|
|
(12,797)
|
|
Change in assets and
liabilities, net of acquisitions, and other
|
|
(24,724)
|
|
6,637
|
|
(63,229)
|
|
23,712
|
|
Net cash provided
by operating activities
|
|
$
94,238
|
|
$
111,042
|
|
$
461,941
|
|
$
535,924
|
|
|
|
|
|
|
|
|
|
|
|
Memo:
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in)
investing activities
|
|
$
88,441
|
|
$
(4,546)
|
|
$
(59,094)
|
|
$
278,955
|
|
Net cash provided by (used in)
financing activities
|
|
$ (138,533)
|
|
$
87,922
|
|
$ (340,098)
|
|
$ (644,111)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full
Year
|
|
|
|
|
|
2011
|
|
2010
|
|
2009
|
|
|
|
|
|
(in
millions)
|
|
|
|
Reconciliation of Pretax Income
to
|
|
(forecasted)
|
|
(actual)
|
|
(actual)
|
|
|
|
Corporate Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax income
|
|
$131 -
$156
|
$
221
|
|
$
81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in fair
value of derivatives (amounts not forecasted for 2011)
|
-
|
|
(29)
|
|
(29)
|
|
|
|
Non-vehicle interest
expense
|
|
10
|
|
10
|
|
13
|
|
|
|
Non-vehicle
depreciation
|
|
19
|
|
20
|
|
19
|
|
|
|
Amortization
|
|
7
|
|
7
|
|
8
|
|
|
|
Non-cash stock
incentives
|
|
4
|
|
5
|
|
5
|
|
|
|
Long-lived asset
impairment
|
|
-
|
|
1
|
|
2
|
|
|
|
Merger-related expenses (g)
(first quarter forecast only)
|
|
4
|
|
23
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Adjusted EBITDA,
excluding merger-related expenses
|
|
$175-$200
|
|
$
258
|
|
$
99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) Merger-related
expenses include legal, litigation, advisory and other fees related
to a potential merger transaction.
|
|
|
|
|
|
|
|
|
|
|
SOURCE Dollar Thrifty Automotive Group, Inc.