ESTERO, Fla., May 11, 2020 /PRNewswire/ --Hertz Global
Holdings, Inc. (NYSE: HTZ) ("Hertz Global" or the "Company") today
reported results for its first quarter 2020.
- Financial results significantly impacted by COVID-19
pandemic
- Consolidated revenue of $1.9
billion, U.S. RAC revenue of $1.4
billion
- Hertz Global net loss of $356
million, Adjusted Corporate EBITDA of negative $243 million
- Approximately $1.0 billion of
unrestricted cash and cash equivalents at March 31, 2020
"We started the year with positive momentum, extending the
strong growth trajectory of the past three years, reflecting
consistent increases in both price and volume, productivity
improvements and best-in-class fleet management," said CEO and
President, Kathryn V. Marinello.
"Yet in just two months, the outbreak of the coronavirus created a
major business disruption as global travel demand dropped to almost
zero and the U.S. used-car market effectively shut down. We
immediately shifted our business priorities to focus on employee
and customer safety, expense mitigation and preserving
liquidity."
The Company began implementing stringent measures in line with
U.S. CDC guidelines to safeguard personnel and customers. In
addition to following social distancing best practices at its
locations, every vehicle now is being sealed and certified 'Hertz
Gold Standard Clean' after undergoing a 15-point cleaning and
sanitization process that follows U.S. CDC guidelines and uses
EPA-approved products.
While ensuring the safety of its people, the Company
aggressively managed costs and liquidity by right-sizing its
staffing and operations to reflect the current market realities,
significantly reducing capital spending, canceling new fleet orders
and disposing of excess fleet through multiple disposition channels
before the shut down of the used-car market. The Company believes
these actions will result in approximately $2.5 billion in annualized cost savings.
"As a responsible management team, we have to be pragmatic about
the timing of an economic recovery, so we are doing absolutely
everything we can to preserve liquidity. At the same time, from an
operating perspective, we are continuing to service customers at
the highest levels, with a safe fleet, in the manner they've come
to trust from our iconic brand."
U.S. RENTAL CAR ("U.S. RAC") SUMMARY
_________________________________________
|
U.S.
RAC
|
Three Months
Ended
March 31,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
Total
revenues
|
$
|
1,381
|
|
|
$
|
1,520
|
|
|
(9)
|
%
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
(199)
|
|
|
$
|
7
|
|
|
NM
|
|
|
Adjusted EBITDA
Margin
|
(14)
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
518,580
|
|
|
501,767
|
|
|
3
|
%
|
|
Vehicle
Utilization
|
67
|
%
|
|
79
|
%
|
|
|
|
Transaction Days (in
thousands)
|
31,564
|
|
|
35,582
|
|
|
(11)
|
%
|
|
Total RPD (in whole
dollars)
|
$
|
42.74
|
|
|
$
|
41.90
|
|
|
2
|
%
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
867
|
|
|
$
|
990
|
|
|
(12)
|
%
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
298
|
|
|
$
|
256
|
|
|
16
|
%
|
NM - Not meaningful
Year-to-date February 2020 revenue
for the segment was up 8% from the same period in 2019 on both
higher price and volume. Travel bans and shelter-in-place orders
throughout the country severely impacted volume in March which
drove an 11% decline in transaction days for the quarter. All three
brands contributed to a 2% increase in Total RPD in the first
quarter, which partially offset the volume impact to revenue.
Depreciation Per Unit Per Month was impacted by residual values
on certain vehicle models and lower year over year retail sales
volume as a result of the COVID-19 shut-down of retail lots.
Adjusted EBITDA was negative $199
million as the timing of the sharp decline in revenue
outpaced the Company's ability to reduce costs during the
quarter.
INTERNATIONAL RENTAL CAR ("INTERNATIONAL RAC") SUMMARY
________________________________________________________________
|
International
RAC
|
Three Months
Ended
March 31,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
Total
revenues
|
$
|
368
|
|
|
$
|
433
|
|
|
(15)
|
%
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
(45)
|
|
|
$
|
(13)
|
|
|
NM
|
|
|
Adjusted EBITDA
Margin
|
(12)
|
%
|
|
(3)
|
%
|
|
|
|
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
147,987
|
|
|
152,747
|
|
|
(3)
|
%
|
|
Vehicle
Utilization
|
66
|
%
|
|
74
|
%
|
|
|
|
Transaction Days (in
thousands)
|
8,863
|
|
|
10,127
|
|
|
(12)
|
%
|
|
Total RPD (in whole
dollars)
|
$
|
42.35
|
|
|
$
|
42.25
|
|
|
—
|
%
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
846
|
|
|
$
|
934
|
|
|
(9)
|
%
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
204
|
|
|
$
|
209
|
|
|
(2)
|
%
|
NM - Not meaningful
Year-to-date February 2020 revenue
for the segment was up 1% on a constant currency basis from the
same period in 2019 on both higher price and volume. Travel bans
and shelter-in-place orders severely impacted March volume. As a
result, first quarter International RAC revenue decreased 12%
year-over-year on a constant currency basis.
The timing of the sharp decline in revenue outpaced the
Company's ability to reduce costs during the quarter resulting in
Adjusted EBITDA of negative $45
million.
ALL OTHER OPERATIONS
SUMMARY
______________________________________
|
All Other
Operations
|
Three Months
Ended
March 31,
|
|
Percent Inc/
(Dec)
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
Total
revenues
|
$
|
174
|
|
|
$
|
154
|
|
|
13
|
%
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
24
|
|
|
$
|
22
|
|
|
14
|
%
|
|
Adjusted EBITDA
Margin
|
14
|
%
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
Average Vehicles (in
whole units) - Donlen
|
201,364
|
|
|
192,799
|
|
|
4
|
%
|
All Other Operations primarily is comprised of the Company's
Donlen leasing operations. Higher leasing volume drove
double-digit growth in revenue and Adjusted EBITDA for the
quarter.
LIQUIDITY CONSIDERATIONS RELATED TO
COVID-19
___________________________________________________
During the quarter the Company drew down $595 million from its Senior Revolving Credit
Facility and ended the quarter with approximately $1.0 billion of liquidity, substantially in the
form of unrestricted cash and cash equivalents. To mitigate the
impact of the COVID-19 shutdowns on its operations, the Company
took measures to adjust fleet levels, reduce staffing levels,
reduce discretionary spending, renegotiate key contracts and
commitments, and slash capital expenditures. At this time,
neither the duration nor magnitude of the market disruption of
COVID-19 can be predicted, therefore, the Company is unable to
reasonably estimate the ultimate impact to the business. As such,
in addition to the above measures to preserve liquidity, in April
the Company did not make certain operating lease payments for its
U.S. rental car fleet. In May, the Company entered into forbearance
and limited waivers with certain of its corporate lenders and
holders of its asset-backed vehicle debt. These provide the Company
with additional time through May 22, 2020 to engage in
discussions with its key stakeholders to develop a financing
strategy and structure that better reflects the economic impact of
the COVID-19 global pandemic and considers the Company's ongoing
operating and financing requirements.
As more fully disclosed in its First Quarter 2020
Quarterly Report on Form 10-Q filed on May
11, 2020, the Company is reviewing all available options to
preserve liquidity, however, there can be no assurance that the
Company will be able to successfully negotiate any relief past
May 22, 2020.
EARNINGS WEBCAST
INFORMATION
_____________________________________
Hertz will host a webcast and conference call on May 12, 2020 at 8:30 a.m.
Eastern Time. Management will present prepared remarks.
There will not be a question and answer session. This webcast and
conference call can be accessed through a link on the Investor
Relations section of the Hertz website, IR.Hertz.com, or by dialing
(877) 692-8955 and providing passcode 4386207. Investors are
encouraged to dial-in approximately 10 minutes prior to the
call. A web replay will remain available for approximately one
year. A telephone replay will be available one hour following
the conclusion of the call for one year at (866) 207-1041 with pass
code 4740780.
An accompanying presentation, the earnings release and related
supplemental schedules containing the reconciliations of non-GAAP
measures will be available on the Hertz website, IR.Hertz.com.
RIGHTS
OFFERING
_________________________________
In June 2019, the Company
distributed transferable subscription rights to its shareholders to
purchase up to an aggregate of 57,915,055 new shares (the "Rights
Offering"). The Rights Offering, which was fully subscribed, was
consummated in July 2019. As a result
of the timing of the subscription period, the rights generated a
dilutive impact to the Company's 2019 basic and diluted earnings
per share. The three month period ended March 31, 2019 has been adjusted to reflect the
impact of the Rights Offering.
RESULTS OF THE HERTZ
CORPORATION
________________________________________________________________
The GAAP and non-GAAP profitability metrics for Hertz Global's
operating subsidiary, The Hertz Corporation ("Hertz"), are
materially the same as those for Hertz Global.
SELECTED FINANCIAL DATA, SUPPLEMENTAL SCHEDULES, NON-GAAP
MEASURES AND
DEFINITIONS
______________________________________________________________________________
Following are tables that present 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 Supplemental Schedules, the Company provides definitions for
terminology used throughout this earnings release and provides the
usefulness of non-GAAP measures to investors and additional
purposes for which management uses such measures.
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. Product and service initiatives such
as Hertz Gold Plus Rewards, Ultimate Choice, Carfirmations, Mobile
Wi-Fi and unique vehicles offered through its specialty collections
set Hertz apart from the competition. Additionally, The Hertz
Corporation owns the vehicle leasing and fleet management leader
Donlen Corporation, operates the Firefly vehicle rental brand and
Hertz 24/7 car sharing business in international markets and sells
vehicles through Hertz Car Sales. For more information about The
Hertz Corporation, visit: www.hertz.com.
CAUTIONARY NOTE 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" or similar expressions.
These statements are based on certain assumptions that the Company
has made in light of its experience in the industry as well as its
perceptions of historical trends, current conditions, expected
future developments and other factors it believes are appropriate
in these circumstances. The Company believes these judgments are
reasonable, but you should understand that these statements are not
guarantees of performance or results, and the Company's actual
results could differ materially from those expressed in the
forward-looking statements due to a variety of important factors,
both positive and negative, that may be revised or supplemented in
subsequent reports on Forms 10-K, 10-Q and 8-K filed or furnished
to the Securities and Exchange Commission ("SEC"). Among other
items, such factors could include: levels of travel demand,
particularly with respect to business and leisure travel in
the United States and in global
markets; the length and severity of the COVID-19 pandemic and the
impact on the Company's vehicle rental business as a result of
travel restrictions and business closures or disruptions; the
impact of the COVID-19 pandemic and actions taken in response to
the pandemic on global and regional economies and economic factors;
general economic uncertainty and the pace of economic recovery,
including in key global markets, when the COVID-19 pandemic
subsides; the Company's ability to successfully restructure the
Company's substantial indebtedness, obtain further waivers or
forbearance or raise additional capital; the recoverability of the
Company's goodwill and indefinite-lived intangible assets when
performing impairment analysis; the Company's ability to dispose of
vehicles in the used-vehicle market, use the proceeds of such sales
to acquire new vehicles and to reduce exposure to residual risk;
actions creditors may take with respect to the vehicles used in the
rental car operations; significant changes in the competitive
environment and the effect of competition in the Company's markets
on rental volume and pricing, including on the Company's pricing
policies or use of incentives; 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 the Company's rental
operations accordingly; increased vehicle costs due to declining
value of the Company's non-program vehicles; the Company's ability
to maintain sufficient liquidity and the availability to it of
additional or continued sources of financing for the Company's
revenue earning vehicles and to refinance its existing
indebtedness; risks related to the Company's indebtedness,
including its substantial amount of debt, its ability to incur
substantially more debt, the fact that substantially all of the
Company's consolidated assets secure certain of its outstanding
indebtedness and increases in interest rates or in its borrowing
margins; the Company's ability to meet the financial and other
covenants contained in its senior credit facilities and letter of
credit facilities, its outstanding unsecured senior notes, its
outstanding senior second priority secured notes and certain
asset-backed and asset-based arrangements; the Company's ability to
access financial markets, including the financing of its vehicle
fleet through the issuance of asset-backed securities; fluctuations
in interest rates, foreign currency exchange rates and commodity
prices; the Company's ability to sustain operations during adverse
economic cycles and unfavorable external events (including war,
terrorist acts, natural disasters and epidemic disease); 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; the Company's ability to adequately respond
to changes in technology, customer demands and market competition;
the Company's ability to purchase adequate supplies of
competitively priced vehicles and risks relating to increases in
the cost of the vehicles it purchases; the Company's recognition of
previously deferred tax gains on the disposition of revenue earning
vehicles; financial instability of the manufacturers of the
Company's vehicles, which could impact their ability to fulfill
obligations under repurchase or guaranteed depreciation programs;
an increase in the Company's vehicle costs or disruption to the
Company's rental activity, particularly during peak periods, due to
safety recalls by the manufacturers of the Company's vehicles; the
Company's ability to execute a business continuity plan; the
Company's access to third-party distribution channels and related
prices, commission structures and transaction volumes; the
Company's ability to retain customer loyalty and market share;
risks associated with operating in many different countries,
including the risk of a violation or alleged violation of
applicable anticorruption or antibribery laws, the Company's
ability to repatriate cash from non-U.S. affiliates without adverse
tax consequences, the Company's exposure to fluctuations in foreign
currency exchange rates and the Company's ability to effectively
manage its international operations after the United Kingdom's withdrawal from the European
Union; a major disruption in the Company's communication or
centralized information networks; a failure to maintain, upgrade
and consolidate the Company's information technology systems; costs
and risks associated with litigation and investigations or any
failure or inability to comply with laws and regulations or any
changes in the legal and regulatory environment, including laws and
regulations relating to environmental matters and consumer privacy
and data security; 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; the
Company's ability to maintain an effective employee retention and
talent management strategy and resulting changes in personnel and
employee relations; changes in the existing, or the adoption of new
laws, regulations, policies or other activities of governments,
agencies and similar organizations, where such actions may affect
the Company's operations, the cost thereof or applicable tax rates;
risks relating to the Company's deferred tax assets, including the
risk of an "ownership change" under the Internal Revenue Code of
1986, as amended; the Company's exposure to uninsured claims in
excess of historical levels; risks relating to the Company's
participation in multiemployer pension plans; shortages of fuel and
increases or volatility in fuel costs; changes in accounting
principles, or their application or interpretation, and the
Company's ability to make accurate estimates and the assumptions
underlying the estimates, which could have an effect on operating
results and other risks and uncertainties described from time to
time in periodic and current reports that the Company files with
the SEC.
Additional information concerning these and other factors can be
found in the Company's filings with the SEC, including its Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
You should not place undue reliance on forward-looking
statements. All forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in
their entirety by the foregoing cautionary statements. All such
statements speak only as of the date made, and the Company
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
______________________
FINANCIAL INFORMATION AND OPERATING
DATA
_________________________________________________
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT
DATA
|
Three Months
Ended
March 31,
|
|
As a Percentage
of
Total Revenues
|
|
(In millions, except
per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Total
revenues
|
$
|
1,923
|
|
|
$
|
2,107
|
|
|
100
|
%
|
|
100
|
%
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
1,241
|
|
|
1,266
|
|
|
65
|
%
|
|
60
|
%
|
|
Depreciation of
revenue earning vehicles and lease charges
|
677
|
|
|
592
|
|
|
35
|
%
|
|
28
|
%
|
|
Selling, general and
administrative
|
208
|
|
|
234
|
|
|
11
|
%
|
|
11
|
%
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
Vehicle
|
118
|
|
|
112
|
|
|
6
|
%
|
|
5
|
%
|
|
Non-vehicle
|
57
|
|
|
71
|
|
|
3
|
%
|
|
3
|
%
|
|
Total interest
expense, net
|
175
|
|
|
183
|
|
|
9
|
%
|
|
9
|
%
|
|
Other (income)
expense, net
|
(17)
|
|
|
(19)
|
|
|
(1)
|
%
|
|
(1)
|
%
|
|
Total
expenses
|
2,284
|
|
|
2,256
|
|
|
119
|
%
|
|
107
|
%
|
|
Income (loss) before
income taxes
|
(361)
|
|
|
(149)
|
|
|
(19)
|
%
|
|
(7)
|
%
|
|
Income tax
(provision) benefit
|
4
|
|
|
1
|
|
|
—
|
%
|
|
—
|
%
|
|
Net income
(loss)
|
(357)
|
|
|
(148)
|
|
|
(19)
|
%
|
|
(7)
|
%
|
|
Net (income) loss
attributable to noncontrolling interests
|
1
|
|
|
1
|
|
|
—
|
%
|
|
—
|
%
|
|
Net income (loss)
attributable to Hertz Global
|
$
|
(356)
|
|
|
$
|
(147)
|
|
|
(19)
|
%
|
|
(7)
|
%
|
|
Weighted-average
number of shares outstanding(a):
|
|
|
|
|
|
|
|
|
Basic
|
142
|
|
|
96
|
|
|
|
|
|
|
Diluted
|
142
|
|
|
96
|
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(2.50)
|
|
|
$
|
(1.54)
|
|
|
|
|
|
|
Diluted
|
$
|
(2.50)
|
|
|
$
|
(1.54)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss)(b)
|
$
|
(253)
|
|
|
$
|
(83)
|
|
|
|
|
|
|
Adjusted Diluted
Earnings (Loss) Per Share(b)
|
$
|
(1.78)
|
|
|
$
|
(0.87)
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA(b)
|
$
|
(243)
|
|
|
$
|
(4)
|
|
|
|
|
|
|
|
|
(a)
|
Basic
weighted-average shares and weighted-average shares used to
calculate diluted earnings (loss) per share for the three months
ended March 31, 2019 have been adjusted to give effect to the
Rights Offering.
|
|
(b)
|
Represents a non-GAAP
measure, see the accompanying reconciliations included in
Supplemental Schedule II.
|
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET
DATA
|
(In
millions)
|
As of March 31,
2020
|
|
As of December 31,
2019
|
|
Cash and cash
equivalents
|
$
|
1,017
|
|
|
$
|
865
|
|
|
Total restricted cash
and cash equivalents
|
392
|
|
|
495
|
|
|
Revenue earning
vehicles, net:
|
|
|
|
|
U.S. Rental
Car
|
10,529
|
|
|
9,820
|
|
|
International Rental
Car
|
2,116
|
|
|
2,319
|
|
|
All Other
Operations
|
1,664
|
|
|
1,650
|
|
|
Total revenue earning
vehicles, net
|
14,309
|
|
|
13,789
|
|
|
Total
assets
|
25,842
|
|
|
24,627
|
|
|
Total debt
|
18,754
|
|
|
17,089
|
|
|
Net Vehicle
Debt(a)
|
14,153
|
|
|
12,949
|
|
|
Net Non-vehicle
Debt(a)
|
3,332
|
|
|
2,890
|
|
|
Total stockholders'
equity
|
1,491
|
|
|
1,888
|
|
|
|
|
(a)
|
Represents a non-GAAP
measure, see the accompanying reconciliations included in
Supplemental Schedule V.
|
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
|
Three Months Ended
March 31,
|
|
(In
millions)
|
2020
|
|
2019
|
|
Cash flows provided
by (used in):
|
|
|
|
|
Operating
activities
|
$
|
449
|
|
|
$
|
514
|
|
|
Investing
activities
|
(2,097)
|
|
|
(1,855)
|
|
|
Financing
activities
|
1,701
|
|
|
939
|
|
|
Effect of exchange
rate changes
|
(4)
|
|
|
(2)
|
|
|
Net change in cash,
cash equivalents, restricted cash and restricted cash
equivalents
|
$
|
49
|
|
|
$
|
(404)
|
|
|
|
|
|
|
Fleet
Growth(a)
|
$
|
(180)
|
|
|
$
|
(413)
|
|
|
Adjusted Free Cash
Flow(a)
|
$
|
(502)
|
|
|
$
|
(553)
|
|
|
|
|
(a)
|
Represents a non-GAAP
measure, see the accompanying reconciliations included in
Supplemental Schedules III and IV.
|
|
Supplemental
Schedule I
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
|
CONDENSED
STATEMENT OF OPERATIONS BY SEGMENT
|
|
Unaudited
|
|
|
Three Months Ended
March 31, 2020
|
|
Three Months Ended
March 31, 2019
|
|
(In
millions)
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
|
Total
revenues:
|
$
|
1,381
|
|
|
$
|
368
|
|
|
$
|
174
|
|
|
$
|
—
|
|
|
$
|
1,923
|
|
|
$
|
1,520
|
|
|
$
|
433
|
|
|
$
|
154
|
|
|
$
|
—
|
|
|
$
|
2,107
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
969
|
|
|
265
|
|
|
7
|
|
|
—
|
|
|
1,241
|
|
|
976
|
|
|
284
|
|
|
6
|
|
|
—
|
|
|
1,266
|
|
|
Depreciation of
revenue earning vehicles and lease
charges
|
463
|
|
|
89
|
|
|
125
|
|
|
—
|
|
|
677
|
|
|
386
|
|
|
97
|
|
|
109
|
|
|
—
|
|
|
592
|
|
|
Selling, general and
administrative
|
115
|
|
|
48
|
|
|
(4)
|
|
|
49
|
|
|
208
|
|
|
121
|
|
|
54
|
|
|
7
|
|
|
52
|
|
|
234
|
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
86
|
|
|
21
|
|
|
11
|
|
|
—
|
|
|
118
|
|
|
77
|
|
|
23
|
|
|
12
|
|
|
—
|
|
|
112
|
|
|
Non-vehicle
|
(47)
|
|
|
(1)
|
|
|
(5)
|
|
|
110
|
|
|
57
|
|
|
(45)
|
|
|
(1)
|
|
|
(4)
|
|
|
121
|
|
|
71
|
|
|
Total interest
expense, net
|
39
|
|
|
20
|
|
|
6
|
|
|
110
|
|
|
175
|
|
|
32
|
|
|
22
|
|
|
8
|
|
|
121
|
|
|
183
|
|
|
Other (income)
expense, net
|
(20)
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
(17)
|
|
|
(9)
|
|
|
—
|
|
|
—
|
|
|
(10)
|
|
|
(19)
|
|
|
Total
expenses
|
1,566
|
|
|
425
|
|
|
134
|
|
|
159
|
|
|
2,284
|
|
|
1,506
|
|
|
457
|
|
|
130
|
|
|
163
|
|
|
2,256
|
|
|
Income (loss) before
income taxes
|
$
|
(185)
|
|
|
$
|
(57)
|
|
|
$
|
40
|
|
|
$
|
(159)
|
|
|
$
|
(361)
|
|
|
$
|
14
|
|
|
$
|
(24)
|
|
|
$
|
24
|
|
|
$
|
(163)
|
|
|
$
|
(149)
|
|
|
Income tax
(provision) benefit
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
$
|
(357)
|
|
|
|
|
|
|
|
|
|
|
$
|
(148)
|
|
|
Net (income) loss
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
Net income (loss)
attributable to Hertz Global
|
|
|
|
|
|
|
|
|
$
|
(356)
|
|
|
|
|
|
|
|
|
|
|
$
|
(147)
|
|
|
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)
|
2020
|
|
2019
|
|
Adjusted Net
Income (Loss) and Adjusted Diluted Earnings (Loss) Per
Share:
|
|
|
|
|
Net income (loss)
attributable to Hertz Global
|
$
|
(356)
|
|
|
$
|
(147)
|
|
|
Adjustments:
|
|
|
|
|
Income tax provision
(benefit)
|
(4)
|
|
|
(1)
|
|
|
Vehicle and
non-vehicle debt-related charges(a)
|
12
|
|
|
14
|
|
|
Restructuring and
restructuring related charges(b)
|
7
|
|
|
7
|
|
|
Information
technology and finance transformation
costs(c)
|
17
|
|
|
23
|
|
|
Acquisition
accounting-related depreciation and
amortization(d)
|
14
|
|
|
14
|
|
|
Other
items(e)
|
(27)
|
|
|
(21)
|
|
|
Adjusted pre-tax
income (loss)(f)
|
(337)
|
|
|
(111)
|
|
|
Income tax
(provision) benefit on adjusted pre-tax income
(loss)(g)
|
84
|
|
|
28
|
|
|
Adjusted Net Income
(Loss)
|
$
|
(253)
|
|
|
$
|
(83)
|
|
|
Weighted-average
number of diluted shares outstanding
|
142
|
|
|
96
|
|
|
Adjusted Diluted
Earnings (Loss) Per Share(h)
|
$
|
(1.78)
|
|
|
$
|
(0.87)
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA:
|
|
|
|
|
Net income (loss)
attributable to Hertz Global
|
(356)
|
|
|
(147)
|
|
|
Adjustments:
|
|
|
|
|
Income tax provision
(benefit)
|
(4)
|
|
|
(1)
|
|
|
Non-vehicle
depreciation and amortization(i)
|
53
|
|
|
49
|
|
|
Non-vehicle debt
interest, net of interest income
|
57
|
|
|
71
|
|
|
Vehicle debt-related
charges(a),(j)
|
9
|
|
|
10
|
|
|
Restructuring and
restructuring related charges(b)
|
7
|
|
|
7
|
|
|
Information
technology and finance transformation
costs(c)
|
17
|
|
|
23
|
|
|
Other
items(e),(k)
|
(26)
|
|
|
(16)
|
|
|
Adjusted Corporate
EBITDA
|
$
|
(243)
|
|
|
$
|
(4)
|
|
|
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,
excluding impairments and asset write-downs. Also includes
restructuring related charges such as incremental costs incurred
directly supporting business transformation initiatives.
|
|
(c)
|
Represents costs
associated with the Company's information technology and finance
transformation programs, both of which are multi-year initiatives
to upgrade and modernize the Company's systems and processes. These
costs relate primarily to the Company's corporate operations
("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
miscellaneous items. In 2020, includes a $20 million gain on the
sale of non-vehicle capital assets in U.S. RAC and $13 million in
unrealized gains on derivative financial instruments in All Other
Operations. In 2019, includes an $11 million gain on marketable
securities and an $8 million gain on the sale of non-vehicle
capital assets.
|
|
(f)
|
Adjustments by
caption on a pre-tax basis are as follows:
|
|
Increase
(decrease) to expenses
|
Three Months
Ended
March 31,
|
|
(In
millions)
|
2020
|
|
2019
|
|
Direct vehicle and
operating
|
$
|
(16)
|
|
|
$
|
(13)
|
|
|
Selling, general and
administrative
|
(8)
|
|
|
(29)
|
|
|
Interest expense,
net:
|
|
|
|
|
Vehicle
|
(9)
|
|
|
(10)
|
|
|
Non-vehicle
|
(3)
|
|
|
(4)
|
|
|
Total interest
expense, net
|
(12)
|
|
|
(14)
|
|
|
Other income
(expense), net
|
13
|
|
|
19
|
|
|
Noncontrolling
interests
|
(1)
|
|
|
(1)
|
|
|
Total
adjustments
|
$
|
(24)
|
|
|
$
|
(38)
|
|
|
(g)
|
Derived utilizing a
combined statutory rate of 25% for the periods ending
March 31, 2020 and 2019 applied to the respective Adjusted
Pre-tax Income (Loss).
|
|
(h)
|
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.
|
|
(i)
|
Non-vehicle
depreciation and amortization expense for U.S. RAC, International
RAC, All Other Operations and Corporate for the three months ended
March 31, 2020 are $41 million, $5 million, $2 million and $5
million, respectively, and for the three months ended March 31,
2019 are $38 million, $6 million, $2 million and $3 million,
respectively.
|
|
(j)
|
Vehicle debt-related
charges for U.S. RAC, International RAC and All Other Operations
for the three months ended March 31, 2020 are $6 million, $2
million and $1 million, respectively, and for the three months
ended March 31, 2019 are $5 million, $3 million, and $2 million,
respectively.
|
|
(k)
|
Also includes an
adjustment for non-cash stock-based compensation charges in
Corporate.
|
|
Supplemental
Schedule III
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURE - FLEET GROWTH
|
|
Unaudited
|
|
|
Three Months Ended
March 31, 2020
|
|
Three Months Ended
March 31, 2019
|
|
(In
millions)
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Hertz
Global
|
|
U.S. Rental
Car
|
|
Int'l Rental
Car
|
|
All Other
Operations
|
|
Hertz
Global
|
|
Revenue earning
vehicles expenditures
|
$
|
(3,667)
|
|
|
$
|
(450)
|
|
|
$
|
(229)
|
|
|
$
|
(4,346)
|
|
|
$
|
(3,078)
|
|
|
$
|
(631)
|
|
|
$
|
(264)
|
|
|
$
|
(3,973)
|
|
|
Proceeds from
disposal of revenue earning vehicles
|
1,616
|
|
|
529
|
|
|
67
|
|
|
2,212
|
|
|
1,382
|
|
|
689
|
|
|
82
|
|
|
2,153
|
|
|
Net revenue earning
vehicles capital expenditures
|
(2,051)
|
|
|
79
|
|
|
(162)
|
|
|
(2,134)
|
|
|
(1,696)
|
|
|
58
|
|
|
(182)
|
|
|
(1,820)
|
|
|
Depreciation and
reserves for revenue earning vehicles
|
524
|
|
|
84
|
|
|
125
|
|
|
733
|
|
|
451
|
|
|
84
|
|
|
109
|
|
|
644
|
|
|
Financing activity
related to vehicles:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
3,086
|
|
|
406
|
|
|
169
|
|
|
3,661
|
|
|
2,925
|
|
|
580
|
|
|
162
|
|
|
3,667
|
|
|
Payments
|
(1,647)
|
|
|
(703)
|
|
|
(188)
|
|
|
(2,538)
|
|
|
(2,061)
|
|
|
(562)
|
|
|
(113)
|
|
|
(2,736)
|
|
|
Restricted cash
changes
|
23
|
|
|
37
|
|
|
38
|
|
|
98
|
|
|
(51)
|
|
|
(123)
|
|
|
6
|
|
|
(168)
|
|
|
Net financing activity
related to vehicles
|
1,462
|
|
|
(260)
|
|
|
19
|
|
|
1,221
|
|
|
813
|
|
|
(105)
|
|
|
55
|
|
|
763
|
|
|
Fleet
Growth
|
$
|
(65)
|
|
|
$
|
(97)
|
|
|
$
|
(18)
|
|
|
$
|
(180)
|
|
|
$
|
(432)
|
|
|
$
|
37
|
|
|
$
|
(18)
|
|
|
$
|
(413)
|
|
|
Supplemental
Schedule IV
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURE - ADJUSTED FREE CASH FLOW
|
|
Unaudited
|
|
|
Three Months
Ended
March 31,
|
|
(In
millions)
|
2020
|
|
2019
|
|
Net cash provided by
operating activities
|
$
|
449
|
|
|
$
|
514
|
|
|
Net change in
restricted cash and cash equivalents, vehicle
|
98
|
|
|
(168)
|
|
|
Revenue earning
vehicles expenditures
|
(4,346)
|
|
|
(3,973)
|
|
|
Proceeds from
disposal of revenue earning vehicles
|
2,212
|
|
|
2,153
|
|
|
Non-vehicle capital
asset expenditures
|
(59)
|
|
|
(54)
|
|
|
Proceeds from
non-vehicle capital assets disposed of or to be disposed
of
|
23
|
|
|
19
|
|
|
Proceeds from
issuance of vehicle debt
|
3,661
|
|
|
3,667
|
|
|
Repayments of vehicle
debt
|
(2,538)
|
|
|
(2,736)
|
|
|
Noncontrolling
interests
|
(2)
|
|
|
25
|
|
|
Adjusted Free Cash
Flow(a)
|
$
|
(502)
|
|
|
$
|
(553)
|
|
|
|
|
(a)
|
During the third
quarter 2019, the Company changed its definition of Adjusted Free
Cash Flow and revised its reconciliation for the three months ended
March 31, 2019 accordingly.
|
|
Supplemental
Schedule V
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURE - NET DEBT
|
|
Unaudited
|
|
|
As of March 31,
2020
|
|
As of December 31,
2019
|
|
(In
millions)
|
Vehicle
|
|
Non-
Vehicle
|
|
Total
|
|
Vehicle
|
|
Non-
Vehicle
|
|
Total
|
|
Debt as reported in
the balance sheet
|
$
|
14,438
|
|
|
$
|
4,316
|
|
|
$
|
18,754
|
|
|
$
|
13,368
|
|
|
$
|
3,721
|
|
|
$
|
17,089
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt issue costs, discounts
and premiums
|
83
|
|
|
33
|
|
|
116
|
|
|
47
|
|
|
34
|
|
|
81
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
—
|
|
|
1,017
|
|
|
1,017
|
|
|
—
|
|
|
865
|
|
|
865
|
|
|
Restricted
cash
|
368
|
|
|
—
|
|
|
368
|
|
|
466
|
|
|
—
|
|
|
466
|
|
|
Net Debt
|
$
|
14,153
|
|
|
$
|
3,332
|
|
|
$
|
17,485
|
|
|
$
|
12,949
|
|
|
$
|
2,890
|
|
|
$
|
15,839
|
|
|
Supplemental
Schedule VI
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
|
RECONCILIATIONS OF
KEY METRICS
|
|
REVENUE,
UTILIZATION AND DEPRECIATION
|
|
Unaudited
|
|
|
U.S. Rental
Car
|
|
|
Three Months
Ended
March 31,
|
|
Percent
Inc/(Dec)
|
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
1,381
|
|
|
$
|
1,520
|
|
|
|
|
|
Ancillary retail
vehicle sales revenue
|
(32)
|
|
|
(29)
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
1,349
|
|
|
$
|
1,491
|
|
|
|
|
|
Transaction Days (in
thousands)
|
31,564
|
|
|
35,582
|
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
42.74
|
|
|
$
|
41.90
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
1,349
|
|
|
$
|
1,491
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
518,580
|
|
|
501,767
|
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
2,601
|
|
|
$
|
2,971
|
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
867
|
|
|
$
|
990
|
|
|
(12)
|
%
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
Transaction Days (in
thousands)
|
31,564
|
|
|
35,582
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
518,580
|
|
|
501,767
|
|
|
|
|
|
Number of days in
period (in whole units)
|
91
|
|
|
90
|
|
|
|
|
|
Available Car Days
(in thousands)
|
47,191
|
|
|
45,159
|
|
|
|
|
|
Vehicle
Utilization(a)
|
67
|
%
|
|
79
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Per
Unit Per Month
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges
|
$
|
463
|
|
|
$
|
386
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
518,580
|
|
|
501,767
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges divided by
Average
Vehicles (in whole
dollars)
|
$
|
893
|
|
|
$
|
769
|
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
298
|
|
|
$
|
256
|
|
|
16
|
%
|
|
|
|
|
(a)
|
Calculated as
Transaction Days divided by Available Car Days.
|
|
Supplemental
Schedule VI (continued)
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
|
RECONCILIATIONS OF
KEY METRICS
|
|
REVENUE,
UTILIZATION AND DEPRECIATION
|
|
Unaudited
|
|
|
International
Rental Car
|
|
|
Three Months
Ended
March 31,
|
|
Percent
Inc/(Dec)
|
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
368
|
|
|
$
|
433
|
|
|
|
|
|
Foreign currency
adjustment(a)
|
7
|
|
|
(5)
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
375
|
|
|
$
|
428
|
|
|
|
|
|
Transaction Days (in
thousands)
|
8,863
|
|
|
10,127
|
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
42.35
|
|
|
$
|
42.25
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
375
|
|
|
$
|
428
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
147,987
|
|
|
152,747
|
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
2,534
|
|
|
$
|
2,802
|
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
846
|
|
|
$
|
934
|
|
|
(9)
|
%
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
Transaction Days (in
thousands)
|
8,863
|
|
|
10,127
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
147,987
|
|
|
152,747
|
|
|
|
|
|
Number of days in
period (in whole units)
|
91
|
|
|
90
|
|
|
|
|
|
Available Car Days
(in thousands)
|
13,467
|
|
|
13,747
|
|
|
|
|
|
Vehicle
Utilization(b)
|
66
|
%
|
|
74
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Per
Unit Per Month
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges
|
$
|
89
|
|
|
$
|
97
|
|
|
|
|
|
Foreign currency
adjustment(a)
|
2
|
|
|
(1)
|
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges
|
$
|
91
|
|
|
$
|
96
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
147,987
|
|
|
152,747
|
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges divided by
Average Vehicles (in whole
dollars)
|
$
|
615
|
|
|
$
|
628
|
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
204
|
|
|
$
|
209
|
|
|
(2)
|
%
|
|
|
|
|
(a)
|
Based on
December 31, 2019 foreign exchange rates.
|
|
(b)
|
Calculated as
Transaction Days divided by Available Car Days.
|
|
Supplemental
Schedule VI (continued)
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
|
RECONCILIATIONS OF
KEY METRICS
|
|
REVENUE,
UTILIZATION AND DEPRECIATION
|
|
Unaudited
|
|
|
Worldwide Rental
Car
|
|
|
Three Months
Ended
March 31,
|
|
Percent
Inc/(Dec)
|
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
1,749
|
|
|
$
|
1,953
|
|
|
|
|
|
Ancillary retail
vehicle sales revenue
|
(32)
|
|
|
(29)
|
|
|
|
|
|
Foreign currency
adjustment(a)
|
7
|
|
|
(5)
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
1,724
|
|
|
$
|
1,919
|
|
|
|
|
|
Transaction Days (in
thousands)
|
40,427
|
|
|
45,709
|
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
42.66
|
|
|
$
|
41.96
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
1,724
|
|
|
$
|
1,919
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
666,567
|
|
|
654,514
|
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
2,586
|
|
|
$
|
2,932
|
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
862
|
|
|
$
|
977
|
|
|
(12)
|
%
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
Transaction Days (in
thousands)
|
40,427
|
|
|
45,709
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
666,567
|
|
|
654,514
|
|
|
|
|
|
Number of days in
period (in whole units)
|
91
|
|
|
90
|
|
|
|
|
|
Available Car Days
(in thousands)
|
60,658
|
|
|
58,906
|
|
|
|
|
|
Vehicle
Utilization(b)
|
67
|
%
|
|
78
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Per
Unit Per Month
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges
|
$
|
552
|
|
|
$
|
483
|
|
|
|
|
|
Foreign currency
adjustment(a)
|
2
|
|
|
(1)
|
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges
|
$
|
554
|
|
|
$
|
482
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
666,567
|
|
|
654,514
|
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges divided by
Average Vehicles (in whole
dollars)
|
$
|
831
|
|
|
$
|
736
|
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
277
|
|
|
$
|
246
|
|
|
13
|
%
|
|
|
|
|
Note: Worldwide
Rental Car represents U.S. Rental Car and International Rental Car
segment information on a combined basis and excludes the All Other
Operations segment, which is primarily comprised of the Company's
Donlen leasing operations, and Corporate.
|
|
|
|
(a)
|
Based on
December 31, 2019 foreign exchange rates.
|
|
(b)
|
Calculated as
Transaction Days divided by Available Car Days.
|
NON-GAAP MEASURES AND KEY
METRICS
_______________________________________________________________
Hertz Global is the top-level holding company that indirectly
wholly owns The Hertz Corporation (together, the "Company"). The
term "GAAP" refers to accounting principles generally accepted in
the United States of America.
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 Diluted EPS")
Adjusted Net Income (Loss) represents income or loss
attributable to the Company as adjusted to eliminate the impact of
GAAP income tax, debt-related charges and losses, restructuring and
restructuring related charges, intangible and tangible asset
impairments and write-downs, information technology and finance
transformation costs, non-cash acquisition accounting charges 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 Diluted 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 Diluted EPS are
important to management because they allow management 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, net
non-vehicle debt interest, vehicle debt-related charges and losses,
restructuring and restructuring related charges, goodwill,
intangible and tangible asset impairments and write-downs,
information technology and finance transformation costs 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 to facilitate 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 to
assess the performance of the entire business on the same basis as
its reportable segments. Its most comparable GAAP measure is net
income (loss) attributable to the Company.
Adjusted Free Cash Flow
Adjusted Free Cash Flow represents net cash provided by
operating activities, including the change in restricted cash and
cash equivalents related to vehicles, net revenue earning vehicle
and capital asset expenditures and the net impact of vehicle
financing activities. During the third quarter 2019, the Company
changed its definition of Adjusted Free Cash Flow to exclude the
impact of noncontrolling interests which primarily eliminates
proceeds from vehicle sales upon consolidation of the Company, but
not the associated repayment of vehicle debt.
Adjusted Free Cash Flow is important to management and investors
as it provides useful information about the amount of cash
available for acquisitions and the reduction of non-vehicle
debt.
Fleet Growth
Fleet Growth represents revenue earning vehicles expenditures,
net of proceeds from disposals, plus vehicle depreciation and net
vehicle financing which includes borrowings, repayments and the
change in restricted cash associated with vehicles. Fleet Growth is
important to management as it allows the Company to assess the cash
flow required to support its investment in revenue earning
vehicles.
Net Non-vehicle Debt, Net Vehicle Debt and Total Net
Debt
Net Non-vehicle Debt represents non-vehicle debt as reported on
the Company's balance sheet, excluding the impact of unamortized
debt issue costs, discounts and premiums associated with
non-vehicle debt, less cash and cash equivalents. This measure is
important to management and investors as it helps measure the
Company's net corporate leverage. It also assists in the
evaluation of the Company's ability to service its non-vehicle debt
without reference to the expense associated with the vehicle debt,
which is collateralized by assets not available to lenders under
the non-vehicle debt facilities.
Net Vehicle Debt represents vehicle debt as reported on the
Company's balance sheet, excluding the impact of unamortized debt
issue costs, discounts and premiums associated with vehicle debt,
less restricted cash associated with vehicles. Restricted cash
associated with vehicle debt is restricted for the purchase of
revenue earning vehicles and other specified uses under the
Company's vehicle debt facilities and its vehicle rental like-kind
exchange program. Net Vehicle Debt is important to management,
investors and ratings agencies as it helps measure the Company's
leverage with respect to its vehicle assets.
Total Net Debt is the sum of Net Non-vehicle Debt and Net
Vehicle debt and is important to management, investors and ratings
agencies as it helps measure the Company's gross leverage.
KEY METRICS
Available Car Days
Available Car Days represents Average Vehicles multiplied by the
number of days in a 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.
Depreciation Per Unit Per Month
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.
Management believes eliminating the effect of fluctuations in
foreign currency exchange rates is appropriate so as not to affect
the comparability of underlying trends. This metric is important to
management and investors as it is reflective of how the Company is
managing the costs of its vehicles and facilitates in comparison
with other participants in the vehicle rental industry.
Total Rental Revenues
Total Rental Revenues represents total revenues less ancillary
retail vehicle sales revenues, with all periods adjusted to
eliminate the effect of fluctuations in foreign currency exchange
rates. Management believes eliminating the effect of fluctuations
in foreign currency exchange rates is appropriate so as not to
affect the comparability of underlying trends. This metric is
important to management and investors as it represents a
measurement that excludes the impact of revenues generated from
non-vehicle rental activity, such as ancillary revenues resulting
from vehicle sales and facilitates in 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 the ratio of Total Rental Revenues to
Transaction Days. This metric is important to management and
investors as it represents a measurement of the changes in
underlying pricing in the vehicle rental business and encompasses
the elements in vehicle rental pricing that management has the
ability to control.
Total Revenue Per Unit Per Month ("Total RPU" or "Total
RPU Per Month")
Total RPU Per Month represents the amount of average Total
Rental Revenues per vehicle per month. This metric is important to
management and investors as it provides a measure of revenue
productivity relative to fleet capacity, or asset efficiency.
Transaction Days ("Days"; also referred to as
"volume")
Transaction Days, also known as volume, represent the total
number of 24-hour periods, with any partial period counted as one
Transaction Day, that vehicles were on rent (the period between
when a rental contract is opened and closed) in a given period.
Thus, it is possible for a vehicle to attain more than one
Transaction Day in a 24-hour period. This metric is important to
management and investors as it represents the number of revenue
generating days.
Vehicle Utilization ("Utilization")
Vehicle Utilization represents the ratio of Transaction Days to
Available Car Days. This metric is important to management and
investors as it is the measurement of the proportion of vehicles
that are being used to generate revenues relative to fleet
capacity.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/hertz-global-holdings-reports-first-quarter-2020-financial-results-301057024.html
SOURCE Hertz Global Holdings, Inc.