TULSA, Okla., March 22, 2011 /PRNewswire/ -- Dollar Thrifty
Automotive Group, Inc. (NYSE: DTG) today provided an update on
Corporate Adjusted EBITDA and fleet cost expectations for the full
year of 2011. Additionally, the Company also provided
preliminary guidance on expected results for the first quarter of
2011.
(Logo:
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The Company noted that it now expects Corporate Adjusted EBITDA,
excluding merger-related expenses, to be within a range of
$235 million to $260 million for the
full year of 2011, an increase of $60
million, or approximately 30 percent, from the Company's
previously announced guidance range. The Company noted that
the primary driver of the improvement is lower fleet cost
expectations and confidence in the upcoming summer rental season.
As previously disclosed, the Company's initial 2011 fleet cost
guidance assumed that the used car market would moderate in 2011
from 2010 levels, thus negatively impacting residual values.
The Company noted that conditions in the used vehicle market
have remained very robust during the first three months of 2011,
with tight supplies of late model used vehicles and high demand
driving residual values to new record levels. Based on
information currently available, the Company believes industry
fundamentals will remain favorable, positively impacting residual
value estimates. Accordingly, the Company is lowering its
estimate for vehicle depreciation per unit to a range of
$240 to $250 per month for the full
year of 2011.
"As we disclosed on our year-end earnings conference call, we
expected significant upside in fleet costs in 2011 if the used car
market continued at the strong levels experienced in 2010," said
Scott L. Thompson, President and
Chief Executive Officer. "We are now in the prime selling
season for used vehicles, and are realizing very favorable results
based on the vigor of the used car market combined with our
enhanced pricing strategies. Accordingly, we have revised our
fleet cost targets to reflect continued favorable market
conditions. Furthermore, since our year-end earnings call,
the rental pricing and volume environment have improved following
the winter storms that impacted January and February. The
combination of these factors has given us significantly greater
confidence in our 2011 operating performance," said Thompson.
Guidance for First Quarter
The Company expects rental revenue for the first quarter to be
flat to down one percent compared to the first quarter of 2010.
The unfavorable impact of the winter storms on rental
revenues for the quarter is estimated at $5
to $10 million.
Corporate Adjusted EBITDA, excluding merger-related expenses, is
expected to range from $25 to $30
million for the first quarter of 2011. Corporate
Adjusted EBITDA, excluding merger-related expenses of $1.7 million in the first quarter of 2010 totaled
$51.1 million. The Company
noted that it expects gains from sales of vehicles to be only
$7 million in the first quarter of
2011, compared to $25.7 million of
gains in the first quarter of 2010 as the Company plans to dispose
of approximately 7,300 fewer risk vehicles in the first quarter of
2011 compared to first quarter of 2010.
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 release contains certain forward-looking statements, which
reflect management's expectations regarding future events and
operating performance and speak only as of the date hereof. These
forward-looking statements involve a number of risks and
uncertainties. The factors that could cause actual results to
differ materially from our expectations are detailed in the
Company's filings with the Securities and Exchange Commission, such
as its annual and quarterly reports.
Dollar
Thrifty Automotive Group, Inc.
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Non-GAAP
Measures
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Corporate Adjusted
EBITDA means earnings, excluding the
impact of the (increase) decrease in fair value of derivatives,
before non-vehicle interest
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expense, income taxes,
non-vehicle depreciation, amortization, and certain other items as
shown below. The Company believes Corporate
Adjusted
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EBITDA is important as it
provides investors with a supplemental measure to evaluate the
Company's operating performance by adjusting earnings
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to exclude certain non-cash
items and certain items that impact comparability of operating
results. The items excluded from Corporate Adjusted
EBITDA
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but included in the calculation
of the Company's reported net income are significant components of
its consolidated statement of income, and must be
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considered in performing a
comprehensive assessment of overall financial performance.
Corporate Adjusted EBITDA is also a relevant financial
covenant
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in the Company's Senior Credit
Credit Facilities and other financing agreements. Corporate
Adjusted EBITDA is not defined under GAAP and should
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not be considered as an
alternative measure of the Company's net income, cash flow or
liquidity. Corporate Adjusted EBITDA amounts
presented
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may not be comparable to similar
measures disclosed by other companies.
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Quarter
Ended
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Full Year
Ended
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March
31,
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December
31,
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2011
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2010
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2011
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2010
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(in
millions)
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(in
millions)
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(forecasted)
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(actual)
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(forecasted)
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(actual)
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Reconciliation of Pretax Income
to
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Corporate Adjusted
EBITDA
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Pretax income
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$10-$15
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$
47
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$189-$214
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$ 221
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(Increase) decrease in fair
value of derivatives (a)
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-
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(7)
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-
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(29)
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Non-vehicle interest
expense
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2
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2
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10
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10
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Non-vehicle
depreciation
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5
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4
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19
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20
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Amortization
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2
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2
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7
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7
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Non-cash stock
incentives
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1
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1
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4
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5
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Long-lived asset
impairment
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-
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-
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-
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1
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Merger-related costs
(b)
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5
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2
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6
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23
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Corporate Adjusted EBITDA,
excluding merger-related expenses
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$25-$30
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$
51
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$235-$260
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$ 258
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(a) The (increase)
decrease in fair value of derivatives for 2010 represents impacts
as previously reported. As the Company cannot
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estimate changes in fair value of derivatives for future
periods, no amounts are included in either the pretax income or the
reconciling line item
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for
periods that have not yet been completed. Accordingly, no
amounts have been included for the first quarter or full year of
2011.
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(b) Merger-related costs
include legal, litigation, advisory and other fees related to a
potential merger transaction. For 2011, these costs are
estimated
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through the
second quarter of 2011 only and are added into the Company's
Corporate Adjusted EBITDA reconciliation to make the
periods
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comparable.
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SOURCE Dollar Thrifty Automotive Group, Inc.