ESTERO, Fla., Nov. 4, 2019 /PRNewswire/ -- Hertz Global
Holdings, Inc. (NYSE: HTZ) ("Hertz Global" or the "Company") today
reported results for its third quarter 2019.
Third Quarter 2019 Compared to Third Quarter
2018:
- Global revenue grew 3%, up 4% on a constant currency basis
- Record third quarter U.S. RAC revenues of $2.0 billion, up 6%
- U.S. RAC Transaction Days up 5%, Total RPD up 1%
- U.S. RAC Depreciation Per Unit Per Month decreased 5%
- Net income attributable to Hertz Global improved 20%
- Adjusted Corporate EBITDA improved 12%
"Our strong third quarter results continue to reflect the
successful execution of our strategies, operational efficiencies,
and early returns on foundational and growth investments," said
Kathryn Marinello, Hertz's Chief
Executive Officer. "By leveraging core strengths and looking at our
business with an entrepreneurial mindset, we're not only improving
the customer experience, we're finding new ways to capture
incremental growth in adjacent markets and create incremental value
through innovation."
For the third quarter 2019, total revenues were $2.8 billion, a 3% increase versus the third
quarter 2018. Net income attributable to Hertz Global was
$169 million, or $1.26 earnings per diluted share on 134 million
weighted-average shares outstanding, compared to $141 million, or $1.47 per diluted share on 96 million
weighted-average shares outstanding in the third quarter 2018.
Adjusted Net Income for the third quarter 2019 was $214 million, or $1.60 Adjusted Diluted Earnings Per Share,
compared to $180 million, or
$1.88 per share for the same
period last year. Adjusted Corporate EBITDA was $392 million, compared to $351 million for the third quarter 2018.
U.S. RENTAL CAR ("U.S. RAC") SUMMARY
|
U.S.
RAC
|
Three Months
Ended
September 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2019
|
|
2018
|
|
|
Total
revenues
|
$
|
1,962
|
|
|
$
|
1,852
|
|
|
6
|
%
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
269
|
|
|
$
|
208
|
|
|
29
|
%
|
|
Adjusted EBITDA
Margin
|
14
|
%
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
566,229
|
|
|
527,900
|
|
|
7
|
%
|
|
Vehicle
Utilization
|
79
|
%
|
|
81
|
%
|
|
|
|
Transaction Days (in
thousands)
|
41,399
|
|
|
39,478
|
|
|
5
|
%
|
|
Total RPD (in whole
dollars)
|
$
|
46.67
|
|
|
$
|
46.23
|
|
|
1
|
%
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
1,137
|
|
|
$
|
1,152
|
|
|
(1)
|
%
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
247
|
|
|
$
|
261
|
|
|
(5)
|
%
|
NM - Not meaningful
Total U.S. RAC revenues grew to a third quarter record of
$2.0 billion in 2019, a 6%
increase versus the third quarter 2018. Transaction days grew
5% driven by higher demand from summer leisure renters and
ride-hailing drivers ("TNC"). Total RPD increased 1% in the
quarter, largely driven by favorable airport and off-airport
pricing.
Average vehicles were up 7%, and up 5% excluding TNC.
Utilization was impacted by the in-fleeting of cargo vans and
trucks in anticipation of the holiday delivery season demand.
Depreciation Per Unit Per Month decreased 5% driven by the
Company's vehicle acquisition strategy, a 9% increase in the number
of vehicle dispositions through its highest-return retail car sales
channel, and continued strength in residual values.
Adjusted EBITDA improved $61
million in the third quarter and Adjusted EBITDA Margin
expanded 250 basis points, driven by higher revenue, significantly
improved productivity and lower per unit depreciation.
INTERNATIONAL RENTAL CAR ("INTERNATIONAL RAC")
SUMMARY
|
International
RAC
|
Three Months
Ended
September 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2019
|
|
2018
|
|
|
Total
revenues
|
$
|
702
|
|
|
$
|
732
|
|
|
(4)
|
%
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
115
|
|
|
$
|
140
|
|
|
(18)
|
%
|
|
Adjusted EBITDA
Margin
|
16
|
%
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
213,294
|
|
|
214,900
|
|
|
(1)
|
%
|
|
Vehicle
Utilization
|
80
|
%
|
|
80
|
%
|
|
|
|
Transaction Days (in
thousands)
|
15,631
|
|
|
15,876
|
|
|
(2)
|
%
|
|
Total RPD (in whole
dollars)
|
$
|
45.67
|
|
|
$
|
45.06
|
|
|
1
|
%
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
1,116
|
|
|
$
|
1,110
|
|
|
1
|
%
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
200
|
|
|
$
|
194
|
|
|
3
|
%
|
Total International RAC revenues decreased 4% year-over-year and
were flat on a constant currency basis. Total RPD was up 1% driven
by improved pricing in Asia
Pacific and Europe, offset
by a volume decline of 2% due to softness in Europe.
Adjusted EBITDA was lower year-over-year driven by flat revenue
and higher vehicle-related costs.
ALL OTHER OPERATIONS SUMMARY
|
All Other
Operations
|
Three Months
Ended
September 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2019
|
|
2018
|
|
|
Total
revenues
|
$
|
172
|
|
|
$
|
174
|
|
|
(1)
|
%
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
24
|
|
|
$
|
19
|
|
|
29
|
%
|
|
Adjusted EBITDA
Margin
|
14
|
%
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
Average Vehicles (in
whole units) - Donlen
|
216,925
|
|
|
185,300
|
|
|
17
|
%
|
All Other Operations primarily is comprised of the Company's
Donlen leasing operations. Strong revenue growth was more than
offset by the impact of a 2019 change in presentation for certain
leased vehicles resulting in lower revenue and vehicle depreciation
during the quarter versus third quarter 2018. Revenue grew 11%,
excluding the change in presentation. New accounts and growth in
both the leasing and management portfolios drove a 17% increase in
Average Vehicles.
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 and nine month periods ended September 30, 2018 have been adjusted to reflect
the impact of the Rights Offering, and the Company will continue to
adjust prior periods for the impact, where necessary.
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.
EARNINGS WEBCAST INFORMATION
Hertz Global's live webcast and conference call to discuss its
third quarter 2019 results will be held on
November 5, 2019, at 8:30 a.m. Eastern
Time, and can be accessed through a link on the Investor
Relations section of the Hertz website, IR.Hertz.com, or by
dialing (800) 230-1074 and providing passcode
472693. 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 (800) 475-6701 with pass code 472693.
The earnings release and related supplemental schedules
containing the reconciliations of non-GAAP measures will be
available on the Hertz website, IR.Hertz.com.
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
in approximately 10,200 company-owned, licensee and franchisee
locations 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 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 airline passenger traffic in
the United States and in global
markets; the effect of the Company's separation of its vehicle and
equipment rental businesses, any failure by Herc Holdings Inc. to
comply with the agreements entered into in connection with the
separation and the Company's ability to obtain the expected
benefits of the separation; 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 its rental operations
accordingly; increased vehicle costs due to declines in the 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 its revenue
earning vehicles and to refinance its existing indebtedness; 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 ability to adequately respond
to changes in technology and customer demands; the Company's
ability to retain customer loyalty and market share; the Company's
recognition of previously deferred tax gains on the disposition of
revenue earning vehicles; an increase in the Company's vehicle
costs or disruption to its rental activity, particularly during its
peak periods, due to safety recalls by the manufacturers of its
vehicles; the Company's access to third-party distribution
channels and related prices, commission structures and transaction
volumes; the Company's ability to execute a business continuity
plan; a major disruption in the Company's communication or
centralized information networks; a failure to maintain, upgrade
and consolidate the Company's information technology networks;
financial instability of the manufacturers of the Company's
vehicles; any impact on the Company from the actions of its
franchisees, dealers and independent contractors; the Company's
ability to sustain operations during adverse economic cycles and
unfavorable external events (including war, terrorist acts, natural
disasters and epidemic disease); shortages of fuel and increases or
volatility in fuel costs; 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; costs and risks
associated with litigation and investigations; 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 its 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 facility, its outstanding unsecured senior notes,
its outstanding senior second priority secured notes and certain
asset-backed and asset-based arrangements; 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; risks associated with operating in many different
countries, including the risk of a violation or alleged violation
of applicable anticorruption or antibribery laws and the Company's
ability to repatriate cash from non-U.S. affiliates without adverse
tax consequences; 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; 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;
fluctuations in interest rates and commodity prices; the Company's
exposure to fluctuations in foreign currency exchange rates 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
September 30,
|
|
As a
Percentage
of Total Revenues
|
|
Nine Months
Ended
September 30,
|
|
As a
Percentage
of Total Revenues
|
|
(In millions, except
per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Total
revenues
|
$
|
2,836
|
|
|
$
|
2,758
|
|
|
100
|
%
|
|
100
|
%
|
|
$
|
7,454
|
|
|
$
|
7,209
|
|
|
100
|
%
|
|
100
|
%
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
1,492
|
|
|
1,459
|
|
|
53
|
%
|
|
53
|
%
|
|
4,147
|
|
|
4,043
|
|
|
56
|
%
|
|
56
|
%
|
|
Depreciation of
revenue earning
vehicles and lease charges
|
667
|
|
|
672
|
|
|
24
|
%
|
|
24
|
%
|
|
1,892
|
|
|
2,020
|
|
|
25
|
%
|
|
28
|
%
|
|
Selling, general and
administrative
|
232
|
|
|
265
|
|
|
8
|
%
|
|
10
|
%
|
|
723
|
|
|
765
|
|
|
10
|
%
|
|
11
|
%
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
134
|
|
|
115
|
|
|
5
|
%
|
|
4
|
%
|
|
372
|
|
|
336
|
|
|
5
|
%
|
|
5
|
%
|
|
Non-vehicle
|
70
|
|
|
73
|
|
|
2
|
%
|
|
3
|
%
|
|
214
|
|
|
218
|
|
|
3
|
%
|
|
3
|
%
|
|
Total interest
expense, net
|
204
|
|
|
188
|
|
|
7
|
%
|
|
7
|
%
|
|
586
|
|
|
554
|
|
|
8
|
%
|
|
8
|
%
|
|
Other (income)
expense, net
|
(6)
|
|
|
(7)
|
|
|
—
|
%
|
|
—
|
%
|
|
(37)
|
|
|
(36)
|
|
|
—
|
%
|
|
—
|
%
|
|
Total
expenses
|
2,589
|
|
|
2,577
|
|
|
91
|
%
|
|
93
|
%
|
|
7,311
|
|
|
7,346
|
|
|
98
|
%
|
|
102
|
%
|
|
Income (loss) before
income taxes
|
247
|
|
|
181
|
|
|
9
|
%
|
|
7
|
%
|
|
143
|
|
|
(137)
|
|
|
2
|
%
|
|
(2)
|
%
|
|
Income tax
(provision) benefit
|
(74)
|
|
|
(41)
|
|
|
(3)
|
%
|
|
(1)
|
%
|
|
(78)
|
|
|
12
|
|
|
(1)
|
%
|
|
—
|
%
|
|
Net income
(loss)
|
173
|
|
|
140
|
|
|
6
|
%
|
|
5
|
%
|
|
65
|
|
|
(125)
|
|
|
1
|
%
|
|
(2)
|
%
|
|
Net (income) loss
attributable to
noncontrolling interests
|
(4)
|
|
|
1
|
|
|
—
|
%
|
|
—
|
%
|
|
(4)
|
|
|
1
|
|
|
—
|
%
|
|
—
|
%
|
|
Net income (loss)
attributable to
Hertz Global
|
$
|
169
|
|
|
$
|
141
|
|
|
6
|
%
|
|
5
|
%
|
|
$
|
61
|
|
|
$
|
(124)
|
|
|
1
|
%
|
|
(2)
|
%
|
|
Weighted-average
number of shares
outstanding(a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
133
|
|
|
96
|
|
|
|
|
|
|
109
|
|
|
95
|
|
|
|
|
|
|
Diluted
|
134
|
|
|
96
|
|
|
|
|
|
|
109
|
|
|
95
|
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.26
|
|
|
$
|
1.47
|
|
|
|
|
|
|
$
|
0.56
|
|
|
$
|
(1.30)
|
|
|
|
|
|
|
Diluted
|
$
|
1.26
|
|
|
$
|
1.47
|
|
|
|
|
|
|
$
|
0.56
|
|
|
$
|
(1.30)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss)(b)
|
$
|
214
|
|
|
$
|
180
|
|
|
|
|
|
|
$
|
202
|
|
|
$
|
33
|
|
|
|
|
|
|
Adjusted Diluted
Earnings (Loss) Per
Share(b)
|
$
|
1.60
|
|
|
$
|
1.88
|
|
|
|
|
|
|
$
|
1.85
|
|
|
$
|
0.34
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA(b)
|
$
|
392
|
|
|
$
|
351
|
|
|
|
|
|
|
$
|
595
|
|
|
$
|
384
|
|
|
|
|
|
|
|
|
(a)
|
Basic
weighted-average shares and weighted-average shares used to
calculate diluted earnings (loss) per share for the three and nine
months ended September 30, 2018 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 September
30, 2019
|
|
As of December 31,
2018
|
|
Cash and cash
equivalents
|
$
|
465
|
|
|
$
|
1,127
|
|
|
Total restricted cash
and cash equivalents
|
230
|
|
|
283
|
|
|
Revenue earning
vehicles, net:
|
|
|
|
|
U.S. Rental
Car
|
10,686
|
|
|
8,793
|
|
|
International Rental
Car
|
2,930
|
|
|
2,146
|
|
|
All Other
Operations
|
1,670
|
|
|
1,480
|
|
|
Total revenue earning
vehicles, net
|
15,286
|
|
|
12,419
|
|
|
Total
assets(a)
|
25,541
|
|
|
21,382
|
|
|
Total debt
|
18,041
|
|
|
16,324
|
|
|
Net Vehicle
Debt(b)
|
14,162
|
|
|
11,688
|
|
|
Net Non-vehicle
Debt(b)
|
3,293
|
|
|
3,328
|
|
|
Total stockholders'
equity
|
1,989
|
|
|
1,120
|
|
|
|
|
(a)
|
On January 1, 2019,
the Company adopted new lease guidance under U.S. GAAP and recorded
a net cumulative-effect adjustment of $1.5 billion to recognize
assets associated with the Company's leases as of that
date.
|
|
(b)
|
Represents a non-GAAP
measure, see the accompanying reconciliations included in
Supplemental Schedule V.
|
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
|
Nine Months Ended
September 30,
|
|
(In
millions)
|
2019
|
|
2018
|
|
Cash flows provided
by (used in):
|
|
|
|
|
Operating
activities
|
$
|
2,233
|
|
|
$
|
2,017
|
|
|
Investing
activities
|
(5,492)
|
|
|
(4,799)
|
|
|
Financing
activities
|
2,551
|
|
|
2,308
|
|
|
Effect of exchange
rate changes
|
(7)
|
|
|
(4)
|
|
|
Net change in cash,
cash equivalents, restricted cash and restricted cash
equivalents
|
$
|
(715)
|
|
|
$
|
(478)
|
|
|
|
|
|
|
Fleet
Growth(a)
|
$
|
(725)
|
|
|
$
|
(252)
|
|
|
Adjusted Free Cash
Flow(a)
|
$
|
(645)
|
|
|
$
|
(237)
|
|
|
|
|
(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
September 30, 2019
|
|
Three Months Ended
September 30, 2018
|
|
(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:
|
$
|
1,962
|
|
|
$
|
702
|
|
|
$
|
172
|
|
|
$
|
—
|
|
|
$
|
2,836
|
|
|
$
|
1,852
|
|
|
$
|
732
|
|
|
$
|
174
|
|
|
$
|
—
|
|
|
$
|
2,758
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
1,099
|
|
|
386
|
|
|
7
|
|
|
—
|
|
|
1,492
|
|
|
1,068
|
|
|
384
|
|
|
8
|
|
|
(1)
|
|
|
1,459
|
|
|
Depreciation of
revenue earning vehicles and lease
charges
|
420
|
|
|
126
|
|
|
121
|
|
|
—
|
|
|
667
|
|
|
414
|
|
|
128
|
|
|
130
|
|
|
—
|
|
|
672
|
|
|
Selling, general and
administrative
|
125
|
|
|
60
|
|
|
8
|
|
|
39
|
|
|
232
|
|
|
128
|
|
|
65
|
|
|
10
|
|
|
62
|
|
|
265
|
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
93
|
|
|
27
|
|
|
14
|
|
|
—
|
|
|
134
|
|
|
79
|
|
|
25
|
|
|
11
|
|
|
—
|
|
|
115
|
|
|
Non-vehicle
|
(49)
|
|
|
(1)
|
|
|
(6)
|
|
|
126
|
|
|
70
|
|
|
(40)
|
|
|
—
|
|
|
(4)
|
|
|
117
|
|
|
73
|
|
|
Total interest
expense, net
|
44
|
|
|
26
|
|
|
8
|
|
|
126
|
|
|
204
|
|
|
39
|
|
|
25
|
|
|
7
|
|
|
117
|
|
|
188
|
|
|
Other (income)
expense, net
|
(3)
|
|
|
1
|
|
|
—
|
|
|
(4)
|
|
|
(6)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(6)
|
|
|
(7)
|
|
|
Total
expenses
|
1,685
|
|
|
599
|
|
|
144
|
|
|
161
|
|
|
2,589
|
|
|
1,649
|
|
|
601
|
|
|
155
|
|
|
172
|
|
|
2,577
|
|
|
Income (loss) before
income taxes
|
$
|
277
|
|
|
$
|
103
|
|
|
$
|
28
|
|
|
$
|
(161)
|
|
|
$
|
247
|
|
|
$
|
203
|
|
|
$
|
131
|
|
|
$
|
19
|
|
|
$
|
(172)
|
|
|
$
|
181
|
|
|
Income tax
(provision) benefit
|
|
|
|
|
|
|
|
|
(74)
|
|
|
|
|
|
|
|
|
|
|
(41)
|
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
$
|
173
|
|
|
|
|
|
|
|
|
|
|
$
|
140
|
|
|
Net (income) loss
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
Net income (loss)
attributable to Hertz Global
|
|
|
|
|
|
|
|
|
$
|
169
|
|
|
|
|
|
|
|
|
|
|
$
|
141
|
|
|
Supplemental
Schedule I (continued)
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
|
CONDENSED
STATEMENT OF OPERATIONS BY SEGMENT
|
|
Unaudited
|
|
|
Nine Months Ended
September 30, 2019
|
|
Nine Months Ended
September 30, 2018
|
|
(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:
|
$
|
5,266
|
|
|
$
|
1,695
|
|
|
$
|
493
|
|
|
$
|
—
|
|
|
$
|
7,454
|
|
|
$
|
4,905
|
|
|
$
|
1,789
|
|
|
$
|
515
|
|
|
$
|
—
|
|
|
$
|
7,209
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
3,127
|
|
|
1,001
|
|
|
20
|
|
|
(1)
|
|
|
4,147
|
|
|
3,016
|
|
|
1,006
|
|
|
25
|
|
|
(4)
|
|
|
4,043
|
|
|
Depreciation of
revenue earning vehicles and lease
charges
|
1,217
|
|
|
329
|
|
|
346
|
|
|
—
|
|
|
1,892
|
|
|
1,295
|
|
|
342
|
|
|
383
|
|
|
—
|
|
|
2,020
|
|
|
Selling, general and
administrative
|
365
|
|
|
169
|
|
|
23
|
|
|
166
|
|
|
723
|
|
|
345
|
|
|
186
|
|
|
28
|
|
|
206
|
|
|
765
|
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
260
|
|
|
73
|
|
|
39
|
|
|
—
|
|
|
372
|
|
|
216
|
|
|
88
|
|
|
32
|
|
|
—
|
|
|
336
|
|
|
Non-vehicle
|
(141)
|
|
|
(3)
|
|
|
(15)
|
|
|
373
|
|
|
214
|
|
|
(105)
|
|
|
—
|
|
|
(12)
|
|
|
335
|
|
|
218
|
|
|
Total interest
expense, net
|
119
|
|
|
70
|
|
|
24
|
|
|
373
|
|
|
586
|
|
|
111
|
|
|
88
|
|
|
20
|
|
|
335
|
|
|
554
|
|
|
Other (income)
expense, net
|
(16)
|
|
|
1
|
|
|
—
|
|
|
(22)
|
|
|
(37)
|
|
|
(7)
|
|
|
(2)
|
|
|
—
|
|
|
(27)
|
|
|
(36)
|
|
|
Total
expenses
|
4,812
|
|
|
1,570
|
|
|
413
|
|
|
516
|
|
|
7,311
|
|
|
4,760
|
|
|
1,620
|
|
|
456
|
|
|
510
|
|
|
7,346
|
|
|
Income (loss) before
income taxes
|
$
|
454
|
|
|
$
|
125
|
|
|
$
|
80
|
|
|
$
|
(516)
|
|
|
$
|
143
|
|
|
$
|
145
|
|
|
$
|
169
|
|
|
$
|
59
|
|
|
$
|
(510)
|
|
|
$
|
(137)
|
|
|
Income tax
(provision) benefit
|
|
|
|
|
|
|
|
|
(78)
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
|
$
|
(125)
|
|
|
Net (income) loss
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
Net income (loss)
attributable to Hertz Global
|
|
|
|
|
|
|
|
|
$
|
61
|
|
|
|
|
|
|
|
|
|
|
$
|
(124)
|
|
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
(In millions, except
per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Adjusted Net
Income (Loss) and Adjusted Diluted Earnings (Loss) Per
Share:
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Hertz Global
|
$
|
169
|
|
|
$
|
141
|
|
|
$
|
61
|
|
|
$
|
(124)
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
74
|
|
|
41
|
|
|
78
|
|
|
(12)
|
|
|
Vehicle and
non-vehicle debt-related charges(a)
|
13
|
|
|
11
|
|
|
40
|
|
|
36
|
|
|
Loss on
extinguishment of debt(b)
|
4
|
|
|
—
|
|
|
4
|
|
|
22
|
|
|
Restructuring and
restructuring related charges(c)
|
1
|
|
|
12
|
|
|
11
|
|
|
26
|
|
|
Information
technology and finance transformation
costs(d)
|
17
|
|
|
24
|
|
|
77
|
|
|
75
|
|
|
Acquisition
accounting-related depreciation and
amortization(e)
|
14
|
|
|
15
|
|
|
41
|
|
|
46
|
|
|
Other
items(f)
|
(7)
|
|
|
(4)
|
|
|
(43)
|
|
|
(25)
|
|
|
Adjusted pre-tax
income (loss)(g)
|
285
|
|
|
240
|
|
|
269
|
|
|
44
|
|
|
Income tax
(provision) benefit on adjusted pre-tax income
(loss)(h)
|
(71)
|
|
|
(60)
|
|
|
(67)
|
|
|
(11)
|
|
|
Adjusted Net Income
(Loss)
|
$
|
214
|
|
|
$
|
180
|
|
|
$
|
202
|
|
|
$
|
33
|
|
|
Weighted-average
number of diluted shares outstanding
|
134
|
|
|
96
|
|
|
109
|
|
|
95
|
|
|
Adjusted Diluted
Earnings (Loss) Per Share(i)
|
$
|
1.60
|
|
|
$
|
1.88
|
|
|
$
|
1.85
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA:
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Hertz Global
|
169
|
|
|
141
|
|
|
61
|
|
|
(124)
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
74
|
|
|
41
|
|
|
78
|
|
|
(12)
|
|
|
Non-vehicle
depreciation and amortization(j)
|
51
|
|
|
52
|
|
|
151
|
|
|
166
|
|
|
Non-vehicle debt
interest, net of interest income
|
70
|
|
|
73
|
|
|
214
|
|
|
218
|
|
|
Vehicle debt-related
charges(a),(k)
|
10
|
|
|
7
|
|
|
29
|
|
|
25
|
|
|
Loss on
extinguishment of vehicle debt(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
Restructuring and
restructuring related charges(c)
|
1
|
|
|
12
|
|
|
11
|
|
|
26
|
|
|
Information
technology and finance transformation
costs(d)
|
17
|
|
|
24
|
|
|
77
|
|
|
75
|
|
|
Other
items(f),(l)
|
—
|
|
|
1
|
|
|
(26)
|
|
|
(12)
|
|
|
Adjusted Corporate
EBITDA
|
$
|
392
|
|
|
$
|
351
|
|
|
$
|
595
|
|
|
$
|
384
|
|
|
Supplemental
Schedule II (continued)
|
|
|
|
(a)
|
Represents
debt-related charges relating to the amortization of deferred
financing costs and debt discounts and premiums.
|
|
(b)
|
In 2019, represents a
$4 million write-off of deferred financing costs associated with
the full redemption of the 5.875% Senior Notes due October 2020 and
7.375% Senior Notes due January 2021. In 2018, primarily
represents $20 million of early redemption premium and write-off of
deferred financing costs associated with the full redemption of the
4.375% European Vehicle Senior Notes due January 2019 in April
2018.
|
|
(c)
|
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. In 2018,
also includes consulting costs, legal fees, and other expenses
related to the previously disclosed accounting review and
investigation.
|
|
(d)
|
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").
|
|
(e)
|
Represents
incremental expense associated with the amortization of other
intangible assets and depreciation of property and equipment
relating to acquisition accounting.
|
|
(f)
|
Represents
miscellaneous items. In 2019, includes a $26 million gain on
marketable securities in Corporate, of which $6 million was
recorded during the third quarter of 2019, and a $15 million gain
on the sale of non-vehicle capital assets in U.S. RAC, of which $3
million was recorded in the third quarter of 2019. In 2018,
includes a $21 million gain on marketable securities, of which $4
million was recorded in the third quarter of 2018, and a $6 million
legal settlement received in the second quarter related to an oil
spill in the Gulf of Mexico in 2010, all of which relate to
Corporate.
|
|
(g)
|
Adjustments by
caption on a pre-tax basis are as follows:
|
|
Increase
(decrease) to expenses
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
(In
millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Direct vehicle and
operating
|
$
|
(13)
|
|
|
$
|
(15)
|
|
|
$
|
(40)
|
|
|
$
|
(48)
|
|
|
Selling, general and
administrative
|
(17)
|
|
|
(36)
|
|
|
(83)
|
|
|
(99)
|
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
Vehicle
|
(10)
|
|
|
(7)
|
|
|
(29)
|
|
|
(47)
|
|
|
Non-vehicle
|
(7)
|
|
|
(4)
|
|
|
(15)
|
|
|
(11)
|
|
|
Total interest
expense, net
|
(17)
|
|
|
(11)
|
|
|
(44)
|
|
|
(58)
|
|
|
Other income
(expense), net
|
5
|
|
|
4
|
|
|
37
|
|
|
25
|
|
|
Noncontrolling
interests
|
4
|
|
|
(1)
|
|
|
4
|
|
|
(1)
|
|
|
Total
adjustments
|
$
|
(38)
|
|
|
$
|
(59)
|
|
|
$
|
(126)
|
|
|
$
|
(181)
|
|
|
(h)
|
Derived utilizing a
combined statutory rate of 25% for the periods ending
September 30, 2019 and 2018 applied to the respective Adjusted
Pre-tax Income (Loss).
|
|
(i)
|
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.
|
|
(j)
|
Non-vehicle
depreciation and amortization expense for U.S. RAC, International
RAC, All Other Operations and Corporate for the three months ended
September 30, 2019 are $38 million, $6 million, $3 million and $4
million, respectively, and for the three months ended September 30,
2018 are $38 million, $8 million, $2 million and $4 million
respectively. Non-vehicle depreciation and amortization expense for
U.S. RAC, International RAC, All Other Operations and Corporate for
the nine months ended September 30, 2019 are $116 million, $18
million, $8 million and $9 million, respectively, and for the nine
months ended September 30, 2018 are $121 million, $25 million, $7
million and $13 million, respectively.
|
|
(k)
|
Vehicle debt related
charges for U.S. RAC, International RAC and All Other Operations
for the three months ended September 30, 2019 are $6 million, $3
million and $1 million, respectively, and for the three months
ended September 30, 2018 are $5 million, $1 million, and $1
million, respectively. Vehicle debt related charges for U.S. RAC,
International RAC and All Other Operations for the nine months
ended September 30, 2019 are $16 million, $10 million and $3
million, respectively, and for the nine months ended September 30,
2018 are $17 million, $5 million and $3 million,
respectively.
|
|
(l)
|
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
|
|
|
Nine Months Ended
September 30, 2019
|
|
Nine Months Ended
September 30, 2018
|
|
(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
|
$
|
(7,740)
|
|
|
$
|
(3,021)
|
|
|
$
|
(775)
|
|
|
$
|
(11,536)
|
|
|
$
|
(6,644)
|
|
|
$
|
(2,876)
|
|
|
$
|
(556)
|
|
|
$
|
(10,076)
|
|
|
Proceeds from
disposal of revenue earning vehicles
|
4,267
|
|
|
1,730
|
|
|
196
|
|
|
6,193
|
|
|
3,568
|
|
|
1,675
|
|
|
135
|
|
|
5,378
|
|
|
Net revenue earning
vehicles capital expenditures
|
(3,473)
|
|
|
(1,291)
|
|
|
(579)
|
|
|
(5,343)
|
|
|
(3,076)
|
|
|
(1,201)
|
|
|
(421)
|
|
|
(4,698)
|
|
|
Depreciation and
reserves for revenue earning vehicles
|
1,418
|
|
|
292
|
|
|
346
|
|
|
2,056
|
|
|
1,295
|
|
|
275
|
|
|
382
|
|
|
1,952
|
|
|
Financing activity
related to vehicles:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
7,935
|
|
|
2,078
|
|
|
1,026
|
|
|
11,039
|
|
|
8,503
|
|
|
2,554
|
|
|
814
|
|
|
11,871
|
|
|
Payments
|
(6,411)
|
|
|
(1,313)
|
|
|
(814)
|
|
|
(8,538)
|
|
|
(6,993)
|
|
|
(1,794)
|
|
|
(738)
|
|
|
(9,525)
|
|
|
Restricted cash
changes
|
85
|
|
|
(19)
|
|
|
(5)
|
|
|
61
|
|
|
138
|
|
|
24
|
|
|
(14)
|
|
|
148
|
|
|
Net financing activity
related to vehicles
|
1,609
|
|
|
746
|
|
|
207
|
|
|
2,562
|
|
|
1,648
|
|
|
784
|
|
|
62
|
|
|
2,494
|
|
|
Fleet
Growth
|
$
|
(446)
|
|
|
$
|
(253)
|
|
|
$
|
(26)
|
|
|
$
|
(725)
|
|
|
$
|
(133)
|
|
|
$
|
(142)
|
|
|
$
|
23
|
|
|
$
|
(252)
|
|
|
Supplemental
Schedule IV
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURE - ADJUSTED FREE CASH FLOW
|
|
Unaudited
|
|
|
Nine Months
Ended
September 30,
|
|
(In
millions)
|
2019
|
|
2018
|
|
Net cash provided by
operating activities
|
$
|
2,233
|
|
|
$
|
2,017
|
|
|
Net change in
restricted cash and cash equivalents,
vehicle(a)
|
61
|
|
|
148
|
|
|
Revenue earning
vehicles expenditures
|
(11,536)
|
|
|
(10,076)
|
|
|
Proceeds from
disposal of revenue earning vehicles
|
6,193
|
|
|
5,378
|
|
|
Capital asset
expenditures, non-vehicle
|
(170)
|
|
|
(119)
|
|
|
Proceeds from
property and other equipment disposed of or to be disposed
of
|
21
|
|
|
47
|
|
|
Proceeds from
issuance of vehicle debt
|
11,039
|
|
|
11,871
|
|
|
Repayments of vehicle
debt
|
(8,538)
|
|
|
(9,525)
|
|
|
Noncontrolling
interests
|
52
|
|
|
22
|
|
|
Adjusted Free Cash
Flow(b)
|
$
|
(645)
|
|
|
$
|
(237)
|
|
|
|
|
(a)
|
Amount presented for
the nine months ended September 30, 2018 excludes a $2 million
non-cash impact of foreign currency exchange rates.
|
|
|
|
(b)
|
During the third
quarter 2019, the Company changed its definition of Adjusted Free
Cash Flow and revised its reconciliation for the nine months ended
September 30, 2018 accordingly.
|
|
Supplemental
Schedule V
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURE - NET DEBT
|
|
Unaudited
|
|
|
As of September
30, 2019
|
|
As of December 31,
2018
|
|
(In
millions)
|
Vehicle
|
|
Non-
Vehicle
|
|
Total
|
|
Vehicle
|
|
Non-
Vehicle
|
|
Total
|
|
Debt as reported in
the balance sheet
|
$
|
14,314
|
|
|
$
|
3,727
|
|
|
$
|
18,041
|
|
|
$
|
11,902
|
|
|
$
|
4,422
|
|
|
$
|
16,324
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt issue costs, discounts
and premiums
|
44
|
|
|
31
|
|
|
75
|
|
|
43
|
|
|
33
|
|
|
76
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
—
|
|
|
465
|
|
|
465
|
|
|
—
|
|
|
1,127
|
|
|
1,127
|
|
|
Restricted
cash
|
196
|
|
|
—
|
|
|
196
|
|
|
257
|
|
|
—
|
|
|
257
|
|
|
Net Debt
|
$
|
14,162
|
|
|
$
|
3,293
|
|
|
$
|
17,455
|
|
|
$
|
11,688
|
|
|
$
|
3,328
|
|
|
$
|
15,016
|
|
|
Supplemental
Schedule VI
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
|
RECONCILIATIONS OF
KEY METRICS
|
|
REVENUE,
UTILIZATION AND DEPRECIATION
|
|
Unaudited
|
|
|
U.S. Rental
Car
|
|
|
Three Months
Ended
September 30,
|
|
Percent
Inc/(Dec)
|
|
Nine Months
Ended
September 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,962
|
|
|
$
|
1,852
|
|
|
|
|
$
|
5,266
|
|
|
$
|
4,905
|
|
|
|
|
Ancillary retail
vehicle sales revenue
|
(30)
|
|
|
(27)
|
|
|
|
|
(92)
|
|
|
(78)
|
|
|
|
|
Total Rental
Revenues
|
$
|
1,932
|
|
|
$
|
1,825
|
|
|
|
|
$
|
5,174
|
|
|
$
|
4,827
|
|
|
|
|
Transaction Days (in
thousands)
|
41,399
|
|
|
39,478
|
|
|
|
|
118,153
|
|
|
112,427
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
46.67
|
|
|
$
|
46.23
|
|
|
1
|
%
|
|
$
|
43.79
|
|
|
$
|
42.93
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
1,932
|
|
|
$
|
1,825
|
|
|
|
|
$
|
5,174
|
|
|
$
|
4,827
|
|
|
|
|
Average Vehicles (in
whole units)
|
566,229
|
|
|
527,900
|
|
|
|
|
540,930
|
|
|
509,800
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
3,412
|
|
|
$
|
3,457
|
|
|
|
|
$
|
9,565
|
|
|
$
|
9,468
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
9
|
|
|
9
|
|
|
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
1,137
|
|
|
$
|
1,152
|
|
|
(1)
|
%
|
|
$
|
1,063
|
|
|
$
|
1,052
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction Days (in
thousands)
|
41,399
|
|
|
39,478
|
|
|
|
|
118,153
|
|
|
112,427
|
|
|
|
|
Average Vehicles (in
whole units)
|
566,229
|
|
|
527,900
|
|
|
|
|
540,930
|
|
|
509,800
|
|
|
|
|
Number of days in
period (in whole units)
|
92
|
|
|
92
|
|
|
|
|
273
|
|
|
273
|
|
|
|
|
Available Car Days
(in thousands)
|
52,093
|
|
|
48,567
|
|
|
|
|
147,674
|
|
|
139,175
|
|
|
|
|
Vehicle
Utilization(a)
|
79
|
%
|
|
81
|
%
|
|
|
|
80
|
%
|
|
81
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and
lease charges
|
$
|
420
|
|
|
$
|
414
|
|
|
|
|
$
|
1,217
|
|
|
$
|
1,295
|
|
|
|
|
Average Vehicles (in
whole units)
|
566,229
|
|
|
527,900
|
|
|
|
|
540,930
|
|
|
509,800
|
|
|
|
|
Depreciation of
revenue earning vehicles and
lease charges divided by Average Vehicles (in
whole dollars)
|
$
|
742
|
|
|
$
|
784
|
|
|
|
|
$
|
2,250
|
|
|
$
|
2,540
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
9
|
|
|
9
|
|
|
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
247
|
|
|
$
|
261
|
|
|
(5)
|
%
|
|
$
|
250
|
|
|
$
|
282
|
|
|
(11)
|
%
|
|
|
|
(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
September 30,
|
|
Percent
Inc/(Dec)
|
|
Nine Months
Ended
September 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
702
|
|
|
$
|
732
|
|
|
|
|
$
|
1,695
|
|
|
$
|
1,789
|
|
|
|
|
Foreign currency
adjustment(a)
|
12
|
|
|
(17)
|
|
|
|
|
14
|
|
|
(79)
|
|
|
|
|
Total Rental
Revenues
|
$
|
714
|
|
|
$
|
715
|
|
|
|
|
$
|
1,709
|
|
|
$
|
1,710
|
|
|
|
|
Transaction Days (in
thousands)
|
15,631
|
|
|
15,876
|
|
|
|
|
38,884
|
|
|
39,075
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
45.67
|
|
|
$
|
45.06
|
|
|
1
|
%
|
|
$
|
43.95
|
|
|
$
|
43.76
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
714
|
|
|
$
|
715
|
|
|
|
|
$
|
1,709
|
|
|
$
|
1,710
|
|
|
|
|
Average Vehicles (in
whole units)
|
213,294
|
|
|
214,900
|
|
|
|
|
184,307
|
|
|
183,600
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
3,347
|
|
|
$
|
3,327
|
|
|
|
|
$
|
9,273
|
|
|
$
|
9,314
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
9
|
|
|
9
|
|
|
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
1,116
|
|
|
$
|
1,110
|
|
|
1
|
%
|
|
$
|
1,030
|
|
|
$
|
1,035
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction Days (in
thousands)
|
15,631
|
|
|
15,876
|
|
|
|
|
38,884
|
|
|
39,075
|
|
|
|
|
Average Vehicles (in
whole units)
|
213,294
|
|
|
214,900
|
|
|
|
|
184,307
|
|
|
183,600
|
|
|
|
|
Number of days in
period (in whole units)
|
92
|
|
|
92
|
|
|
|
|
273
|
|
|
273
|
|
|
|
|
Available Car Days
(in thousands)
|
19,623
|
|
|
19,771
|
|
|
|
|
50,316
|
|
|
50,123
|
|
|
|
|
Vehicle
Utilization(b)
|
80
|
%
|
|
80
|
%
|
|
|
|
77
|
%
|
|
78
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and
lease charges
|
$
|
126
|
|
|
$
|
128
|
|
|
|
|
$
|
329
|
|
|
$
|
342
|
|
|
|
|
Foreign currency
adjustment(a)
|
2
|
|
|
(3)
|
|
|
|
|
3
|
|
|
(16)
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles
and lease charges
|
$
|
128
|
|
|
$
|
125
|
|
|
|
|
$
|
332
|
|
|
$
|
326
|
|
|
|
|
Average Vehicles (in
whole units)
|
213,294
|
|
|
214,900
|
|
|
|
|
184,307
|
|
|
183,600
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles
and lease charges divided by Average Vehicles
(in whole dollars)
|
$
|
600
|
|
|
$
|
582
|
|
|
|
|
$
|
1,801
|
|
|
$
|
1,776
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
9
|
|
|
9
|
|
|
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
200
|
|
|
$
|
194
|
|
|
3
|
%
|
|
$
|
200
|
|
|
$
|
197
|
|
|
2
|
%
|
|
|
|
(a)
|
Based on
December 31, 2018 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
September 30,
|
|
Percent
Inc/(Dec)
|
|
Nine Months
Ended
September 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
2,664
|
|
|
$
|
2,584
|
|
|
|
|
$
|
6,961
|
|
|
$
|
6,694
|
|
|
|
|
Ancillary retail
vehicle sales revenue
|
(30)
|
|
|
(27)
|
|
|
|
|
(92)
|
|
|
(78)
|
|
|
|
|
Foreign currency
adjustment(a)
|
12
|
|
|
(17)
|
|
|
|
|
14
|
|
|
(79)
|
|
|
|
|
Total Rental
Revenues
|
$
|
2,646
|
|
|
$
|
2,540
|
|
|
|
|
$
|
6,883
|
|
|
$
|
6,537
|
|
|
|
|
Transaction Days (in
thousands)
|
57,030
|
|
|
55,354
|
|
|
|
|
157,037
|
|
|
151,502
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
46.40
|
|
|
$
|
45.88
|
|
|
1
|
%
|
|
$
|
43.83
|
|
|
$
|
43.15
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
2,646
|
|
|
$
|
2,540
|
|
|
|
|
$
|
6,883
|
|
|
$
|
6,537
|
|
|
|
|
Average Vehicles (in
whole units)
|
779,523
|
|
|
742,800
|
|
|
|
|
725,237
|
|
|
693,400
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
3,394
|
|
|
$
|
3,419
|
|
|
|
|
$
|
9,491
|
|
|
$
|
9,427
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
9
|
|
|
9
|
|
|
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
1,132
|
|
|
$
|
1,140
|
|
|
(1)
|
%
|
|
$
|
1,055
|
|
|
$
|
1,047
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction Days (in
thousands)
|
57,030
|
|
|
55,354
|
|
|
|
|
157,037
|
|
|
151,502
|
|
|
|
|
Average Vehicles (in
whole units)
|
779,523
|
|
|
742,800
|
|
|
|
|
725,237
|
|
|
693,400
|
|
|
|
|
Number of days in
period (in whole units)
|
92
|
|
|
92
|
|
|
|
|
273
|
|
|
273
|
|
|
|
|
Available Car Days
(in thousands)
|
71,716
|
|
|
68,338
|
|
|
|
|
197,990
|
|
|
189,298
|
|
|
|
|
Vehicle
Utilization(b)
|
80
|
%
|
|
81
|
%
|
|
|
|
79
|
%
|
|
80
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and
lease charges
|
$
|
546
|
|
|
$
|
542
|
|
|
|
|
$
|
1,546
|
|
|
$
|
1,637
|
|
|
|
|
Foreign currency
adjustment(a)
|
2
|
|
|
(3)
|
|
|
|
|
3
|
|
|
(16)
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles
and lease charges
|
$
|
548
|
|
|
$
|
539
|
|
|
|
|
$
|
1,549
|
|
|
$
|
1,621
|
|
|
|
|
Average Vehicles (in
whole units)
|
779,523
|
|
|
742,800
|
|
|
|
|
725,237
|
|
|
693,400
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles
and lease charges divided by Average Vehicles
(in whole dollars)
|
$
|
703
|
|
|
$
|
726
|
|
|
|
|
$
|
2,136
|
|
|
$
|
2,338
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
9
|
|
|
9
|
|
|
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
234
|
|
|
$
|
242
|
|
|
(3)
|
%
|
|
$
|
237
|
|
|
$
|
260
|
|
|
(9)
|
%
|
|
|
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,
2018 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. Adjusted Corporate EBITDA is also utilized
in the determination of certain executive compensation. Its most
comparable GAAP measure is net income (loss) attributable to the
Company.
Adjusted 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 represent 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.
Time and Mileage Revenue Per Transaction Day ("Time and
Mileage pricing" or "T&M Rate")
Time and Mileage ("T&M") pricing represents the ratio of
Total Rental Revenues, less ancillary revenue from value-added
services, such as charges to the customer for the fueling of
vehicles, loss damage waivers, insurance products, supplemental
equipment and other consumables, to Transaction Days. This metric
is important to management and investors as it represents a
measurement of the changes in base rental fees, which comprise the
majority of the Company's Total RPD.
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.
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SOURCE Hertz Global Holdings, Inc.