ESTERO, Fla., Aug. 10, 2020 /PRNewswire/ -- Hertz Global
Holdings, Inc. (NYSE: HTZ) ("Hertz Global" or the "Company") today
reported results for its second quarter 2020 with revenue of
$832 million, a net loss attributable
to the Company of $847 million and
Adjusted Corporate EBITDA of negative $587
million. Liquidity at the end of the second quarter was
$1.4 billion.
"In the second quarter, like so many companies whose revenues
have sharply declined due to the pandemic's significant impact on
global travel, we had to make difficult but necessary decisions to
strengthen and position the company for growth for many years to
come," said Paul Stone, President
and Chief Executive Officer of Hertz Global. "The toughest
decisions have been those that impact the livelihood of our
dedicated workforce and our voluntarily reorganizing under Chapter
11 in North America. We are moving
through our reorganization process and remain focused on emerging
an even stronger global rental car leader better positioned to
serve our customers around the world."
In the second quarter, global revenue declined 67%. While air
travel around the world experienced a significant slowdown, and the
U.S. car sales market was extremely limited until May, the Company
worked to align labor with rental demand, cancel new-fleet orders,
return program vehicles, cut all non-essential spending and capital
expenses, and consolidate off-airport rental locations for
efficiency. As a result, the Company reduced global direct
operating and SG&A expenses by 47% year-over-year in the second
quarter.
Global revenue in April, May and June, while down versus prior
year, showed sequential monthly improvement as states and countries
began to re-open. During the quarter, Hertz Global capitalized on
positive trends in its new driver and delivery service offering and
saw an increase in cargo trucks and van rentals off airport.
Insurance replacement rentals also experienced a restart as more
cars returned to the highways. Leisure air travel began to pick up
heading into the domestic July 4th
holiday in the U.S. However, a rise in COVID-19 infections in the
south and west since then caused the positive leisure trend to slow
again.
The U.S. used-car market experienced a strong rebound in May and
June. At the end of the second quarter, the number of vehicles in
the global fleet was 29% lower year over year. The Company is
capitalizing on the robust demand and record-high resale pricing by
significantly ramping up its used-car sales efforts in North America.
"We continue to make disciplined adjustments to our cost
structure based on revenue fluctuations and expect to generate
about $2.5 billion in annualized
savings," said Stone. "Our priority is fleet management. The
continued strong used-car market allows us to continue to sell cars
aggressively as we right-size the fleet to align with market
realities. Across the business, our team is laser-focused on
capturing revenue, driving efficiency and advancing critical
technology. In the U.S., we continue to capitalize on rental
opportunities off airport, while ensuring customer service levels
remain best-in-class. Internationally, our fleet is trending toward
demand levels. And our Donlen leasing business remains stable.
Finally, continuing to keep our teams and our customers safe in
this unpredictable environment is of utmost importance to everyone
at Hertz."
In addition to following social distancing best practices and
daily employee health assessments at Hertz, Dollar and Thrifty
locations, the Company raised the bar on its high standards for
safety and cleanliness. Every vehicle is being sealed and certified
'Hertz Gold Standard Clean' after undergoing a 15-point cleaning
and sanitization process that follows global health agency
guidelines and uses EPA-approved products. The Company also has
directed that masks be worn by all employees in its field and
corporate locations across the U.S. Similarly, masks are now
required for U.S. customers to help protect not only the renters,
but also the tens of thousands of Hertz employees working to serve
our customers every day. The Company's Ultimate Choice vehicle
pick-up option and digital app for adding ancillary products and
services allows renters to bypass the counter for a contactless
experience.
U.S. RENTAL CAR ("U.S. RAC")
SUMMARY
__________________________________________________________________
|
U.S.
RAC
|
Three Months
Ended
June
30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
Total
revenues
|
$
|
533
|
|
|
$
|
1,784
|
|
|
(70)
|
%
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
(470)
|
|
|
$
|
156
|
|
|
NM
|
|
|
Adjusted EBITDA
Margin
|
(88)
|
%
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
502,763
|
|
|
554,794
|
|
|
(9)
|
%
|
|
Vehicle
Utilization
|
28
|
%
|
|
82
|
%
|
|
|
|
Transaction Days (in
thousands)
|
12,964
|
|
|
41,173
|
|
|
(69)
|
%
|
|
Total RPD (in whole
dollars)
|
$
|
38.17
|
|
|
$
|
42.54
|
|
|
(10)
|
%
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
328
|
|
|
$
|
1,052
|
|
|
(69)
|
%
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
271
|
|
|
$
|
247
|
|
|
10
|
%
|
NM - Not meaningful
Total U.S. RAC revenues were down 70% year-over-year. Airport
rental car volume declined 82%, roughly in line with airline travel
weakness resulting from COVID-19 restrictions. Off airport volume
declined 47% as the impact on demand for insurance replacement
rentals was less severe than travel-related rentals and demand for
delivery vans increased. The mix shift in volume from airport
rentals to lower-priced, longer-length off-airport rentals
contributed to a 10% decrease in Total RPD. Off airport revenues
comprised 60% of total revenues for the segment versus 32% for the
second quarter 2019.
Depreciation Per Unit Per Month was impacted by residual values
on certain vehicle models.
During the quarter, the Company reduced the size of the U.S.
operating fleet and took measures to align staffing levels and
operating costs with the decline in demand. The aggressive cost
reduction actions and lower volume drove a $547 million decrease in direct operating and
selling, general and administration expenses.
The Company remains focused on sustainable cost-savings and
right-sizing its U.S. RAC fleet.
INTERNATIONAL RENTAL CAR ("INTERNATIONAL RAC")
SUMMARY
_______________________________________________________________________________________________________
|
International
RAC
|
Three Months
Ended
June
30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
Total
revenues
|
$
|
135
|
|
|
$
|
560
|
|
|
(76)
|
%
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
(127)
|
|
|
$
|
56
|
|
|
NM
|
|
|
Adjusted EBITDA
Margin
|
(94)
|
%
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
Average Vehicles (in
whole units)
|
129,615
|
|
|
186,881
|
|
|
(31)
|
%
|
|
Vehicle
Utilization
|
36
|
%
|
|
77
|
%
|
|
|
|
Transaction Days (in
thousands)
|
4,256
|
|
|
13,125
|
|
|
(68)
|
%
|
|
Total RPD (in whole
dollars)
|
$
|
32.56
|
|
|
$
|
42.68
|
|
|
(24)
|
%
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
356
|
|
|
$
|
999
|
|
|
(64)
|
%
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
215
|
|
|
$
|
189
|
|
|
14
|
%
|
NM - Not meaningful
Total International RAC revenues were down
76% year-over-year on a constant currency basis. Airport
rental car volume declined 84%, roughly in line with airline travel
weakness resulting from COVID-19 restrictions. Off airport volume
declined 47% as the impact of the pandemic was less substantial for
local rentals. The mix shift in volume from airport rentals to
lower-priced, longer-length off-airport rentals contributed to a
24% decrease in Total RPD. Off airport revenues comprised 71% of
total revenues for the segment versus 40% for the second quarter
2019.
Depreciation Per Unit Per Month increased primarily due to the
impact of lower residual values on risk vehicles and shortened hold
periods on certain program vehicles.
During the quarter, the Company significantly reduced the size
of the International operating fleet and eliminated non-essential
spend. International RAC direct operating and selling, general and
administration expenses were down $210
million year-over-year in the quarter.
The Company remains focused on sustainable cost-savings and
right-sizing its International fleet.
ALL OTHER OPERATIONS
SUMMARY
___________________________________________________________
|
All Other
Operations
|
Three Months
Ended
June
30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
Total
revenues
|
$
|
164
|
|
|
$
|
167
|
|
|
(1)
|
%
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
23
|
|
|
$
|
24
|
|
|
(3)
|
%
|
|
Adjusted EBITDA
Margin
|
14
|
%
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
Average Vehicles (in
whole units) - Donlen
|
196,018
|
|
|
207,704
|
|
|
(6)
|
%
|
All Other Operations primarily is comprised of the Company's
Donlen leasing and fleet management operations. Revenue and
Adjusted EBITDA for the quarter remained relatively stable.
FINANCIAL
REORGANIZATION
_______________________________________________________
As previously announced, on May 22,
2020, Hertz Global and its operating subsidiary, The Hertz
Corporation ("Hertz") (and together with Hertz Global, the
"Companies") and certain of their direct and indirect subsidiaries
in the United States and
Canada filed voluntary petitions
for relief under chapter 11 of the U.S. Bankruptcy Code (the
"Reorganization").
The Reorganization provides the time to put in place a new,
stronger financial foundation to move successfully through the
COVID-19 pandemic and to better position the Companies for the
future. Throughout the Reorganization process, all of Hertz's
businesses globally, including its Hertz, Dollar, Thrifty, Firefly,
Hertz Car Sales, and Donlen subsidiaries, are open and serving
customers. All reservations, promotional offers, vouchers,
and customer and loyalty programs, including rewards points, are
expected to continue as usual.
Information related to the Reorganization is included in the
Hertz Global and Hertz Form 10-Qs for the quarterly period ended
June 30, 2020 filed with the
Securities and Exchange Commission ("SEC") and on the Hertz
website, IR.Hertz.com. Additional information, including access to
documents filed with the Bankruptcy Court, is also available online
at https://restructuring.primeclerk.com/hertz, a website
administered by Prime Clerk, LLC, a third-party bankruptcy claims
and noticing agent.
RESULTS OF THE HERTZ
CORPORATION
________________________________________________________________
The Company's operating subsidiary, The Hertz Corporation
("Hertz"), posted the same revenues as the Company for the second
quarter of 2020. Hertz's second quarter 2020 pre-tax loss was
$1.2 billion versus the Company's
pre-tax loss of $1.0 billion. The
difference between Hertz's and the Company's GAAP results is
primarily due to Hertz's write off in the second quarter of 2020 of
$133 million due from the Company.
The non-GAAP profitability metrics for Hertz are materially the
same as those for Hertz Global.
SELECTED FINANCIAL DATA, SUPPLEMENTAL SCHEDULES, NON-GAAP
MEASURES AND
DEFINITIONS
________________________________________________________________________________________________________________________________________________
Following is selected financial data of Hertz Global. Also
included are Supplemental Schedules, which are provided to present
segment results, and reconciliations of non-GAAP measures to their
most comparable GAAP measure. Following the 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: the Company's ability to
navigate the Chapter 11 process, including obtaining Bankruptcy
Court approval for certain requirements, complying with and
operating under the requirements and constraints of the Bankruptcy
Code, negotiating and consummating a Chapter 11 plan, developing,
funding and executing the Company's business plan and continuing as
a going concern; the Company's ability to maintain a listing of its
common stock on the New York Stock Exchange; the value of the
Company's common stock due to the Chapter 11 process; 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 or raise additional capital; the
Company's post-bankruptcy capital structure; the Company's ability
to maintain an effective employee retention and talent management
strategy and resulting changes in personnel and employee relations
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;; 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
June
30,
|
|
As a Percentage
of
Total Revenues
|
|
Six Months
Ended
June
30,
|
|
As a Percentage
of
Total Revenues
|
|
(In millions, except
per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Total
revenues
|
$
|
832
|
|
|
$
|
2,511
|
|
|
100
|
%
|
|
100
|
%
|
|
$
|
2,755
|
|
|
$
|
4,618
|
|
|
100
|
%
|
|
100
|
%
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
704
|
|
|
1,388
|
|
|
85
|
%
|
|
55
|
%
|
|
1,945
|
|
|
2,655
|
|
|
71
|
%
|
|
57
|
%
|
|
Depreciation of
revenue earning vehicles and lease charges
|
610
|
|
|
634
|
|
|
73
|
%
|
|
25
|
%
|
|
1,286
|
|
|
1,226
|
|
|
47
|
%
|
|
27
|
%
|
|
Selling, general and
administrative
|
168
|
|
|
258
|
|
|
20
|
%
|
|
10
|
%
|
|
377
|
|
|
490
|
|
|
14
|
%
|
|
11
|
%
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
132
|
|
|
127
|
|
|
16
|
%
|
|
5
|
%
|
|
250
|
|
|
238
|
|
|
9
|
%
|
|
5
|
%
|
|
Non-vehicle
|
44
|
|
|
72
|
|
|
5
|
%
|
|
3
|
%
|
|
101
|
|
|
144
|
|
|
4
|
%
|
|
3
|
%
|
|
Total interest
expense, net
|
176
|
|
|
199
|
|
|
21
|
%
|
|
8
|
%
|
|
351
|
|
|
382
|
|
|
13
|
%
|
|
8
|
%
|
|
Technology-related
intangible and other asset impairments
|
193
|
|
|
—
|
|
|
23
|
%
|
|
—
|
%
|
|
193
|
|
|
—
|
|
|
7
|
%
|
|
—
|
%
|
|
Other (income)
expense, net
|
2
|
|
|
(12)
|
|
|
—
|
%
|
|
—
|
%
|
|
(15)
|
|
|
(31)
|
|
|
(1)
|
%
|
|
(1)
|
%
|
|
Reorganization items,
net
|
23
|
|
|
—
|
|
|
3
|
%
|
|
—
|
%
|
|
23
|
|
|
—
|
|
|
1
|
%
|
|
—
|
%
|
|
Total
expenses
|
1,876
|
|
|
2,467
|
|
|
225
|
%
|
|
98
|
%
|
|
4,160
|
|
|
4,722
|
|
|
151
|
%
|
|
102
|
%
|
|
Income (loss) before
income taxes
|
(1,044)
|
|
|
44
|
|
|
(125)
|
%
|
|
2
|
%
|
|
(1,405)
|
|
|
(104)
|
|
|
(51)
|
%
|
|
(2)
|
%
|
|
Income tax
(provision) benefit
|
192
|
|
|
(4)
|
|
|
23
|
%
|
|
—
|
%
|
|
196
|
|
|
(3)
|
|
|
7
|
%
|
|
—
|
%
|
|
Net income
(loss)
|
(852)
|
|
|
40
|
|
|
(102)
|
%
|
|
2
|
%
|
|
(1,209)
|
|
|
(107)
|
|
|
(44)
|
%
|
|
(2)
|
%
|
|
Net (income) loss
attributable to noncontrolling interests
|
5
|
|
|
(2)
|
|
|
1
|
%
|
|
—
|
%
|
|
6
|
|
|
(1)
|
|
|
—
|
%
|
|
—
|
%
|
|
Net income (loss)
attributable to Hertz Global
|
$
|
(847)
|
|
|
$
|
38
|
|
|
(102)
|
%
|
|
2
|
%
|
|
$
|
(1,203)
|
|
|
$
|
(108)
|
|
|
(44)
|
%
|
|
(2)
|
%
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
144
|
|
|
96
|
|
|
|
|
|
|
143
|
|
|
96
|
|
|
|
|
|
|
Diluted
|
144
|
|
|
97
|
|
|
|
|
|
|
143
|
|
|
96
|
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(5.86)
|
|
|
$
|
0.40
|
|
|
|
|
|
|
$
|
(8.39)
|
|
|
$
|
(1.13)
|
|
|
|
|
|
|
Diluted
|
$
|
(5.86)
|
|
|
$
|
0.40
|
|
|
|
|
|
|
$
|
(8.39)
|
|
|
$
|
(1.13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(Loss)(a)
|
$
|
(508)
|
|
|
$
|
71
|
|
|
|
|
|
|
$
|
(760)
|
|
|
$
|
(12)
|
|
|
|
|
|
|
Adjusted Diluted
Earnings (Loss) Per Share(a)
|
$
|
(3.51)
|
|
|
$
|
0.74
|
|
|
|
|
|
|
$
|
(5.30)
|
|
|
$
|
(0.12)
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA(a)
|
$
|
(587)
|
|
|
$
|
207
|
|
|
|
|
|
|
$
|
(830)
|
|
|
$
|
203
|
|
|
|
|
|
|
(a)
|
Represents a non-GAAP
measure, see the accompanying reconciliations included in
Supplemental Schedule II.
|
|
Supplemental
Schedule I
|
|
HERTZ GLOBAL
HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
|
|
|
Three Months Ended
June 30, 2020
|
|
Three Months Ended
June 30, 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:
|
$
|
533
|
|
|
$
|
135
|
|
|
$
|
164
|
|
|
$
|
—
|
|
|
$
|
832
|
|
|
$
|
1,784
|
|
|
$
|
560
|
|
|
$
|
167
|
|
|
$
|
—
|
|
|
$
|
2,511
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
561
|
|
|
136
|
|
|
6
|
|
|
1
|
|
|
704
|
|
|
1,052
|
|
|
330
|
|
|
7
|
|
|
(1)
|
|
|
1,388
|
|
|
Depreciation of
revenue earning vehicles and lease charges
|
408
|
|
|
81
|
|
|
121
|
|
|
—
|
|
|
610
|
|
|
411
|
|
|
106
|
|
|
117
|
|
|
—
|
|
|
634
|
|
|
Selling, general and
administrative
|
63
|
|
|
39
|
|
|
8
|
|
|
58
|
|
|
168
|
|
|
119
|
|
|
55
|
|
|
7
|
|
|
77
|
|
|
258
|
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
98
|
|
|
23
|
|
|
11
|
|
|
—
|
|
|
132
|
|
|
90
|
|
|
24
|
|
|
13
|
|
|
—
|
|
|
127
|
|
|
Non-vehicle
|
(21)
|
|
|
—
|
|
|
(3)
|
|
|
68
|
|
|
44
|
|
|
(47)
|
|
|
(1)
|
|
|
(5)
|
|
|
125
|
|
|
72
|
|
|
Total interest
expense, net
|
77
|
|
|
23
|
|
|
8
|
|
|
68
|
|
|
176
|
|
|
43
|
|
|
23
|
|
|
8
|
|
|
125
|
|
|
199
|
|
|
Technology-related
intangible and other asset impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
|
193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other (income)
expense, net
|
2
|
|
|
(3)
|
|
|
—
|
|
|
3
|
|
|
2
|
|
|
(5)
|
|
|
—
|
|
|
—
|
|
|
(7)
|
|
|
(12)
|
|
|
Reorganization items,
net
|
(1)
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
expenses
|
1,110
|
|
|
276
|
|
|
143
|
|
|
347
|
|
|
1,876
|
|
|
1,620
|
|
|
514
|
|
|
139
|
|
|
194
|
|
|
2,467
|
|
|
Income (loss) before
income taxes
|
$
|
(577)
|
|
|
$
|
(141)
|
|
|
$
|
21
|
|
|
$
|
(347)
|
|
|
$
|
(1,044)
|
|
|
$
|
164
|
|
|
$
|
46
|
|
|
$
|
28
|
|
|
$
|
(194)
|
|
|
$
|
44
|
|
|
Income tax
(provision) benefit
|
|
|
|
|
|
|
|
|
192
|
|
|
|
|
|
|
|
|
|
|
(4)
|
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
$
|
(852)
|
|
|
|
|
|
|
|
|
|
|
$
|
40
|
|
|
Net (income) loss
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
Net income (loss)
attributable to Hertz Global
|
|
|
|
|
|
|
|
|
$
|
(847)
|
|
|
|
|
|
|
|
|
|
|
$
|
38
|
|
|
Supplemental
Schedule I (continued)
|
|
HERTZ GLOBAL
HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
|
|
|
Six Months Ended
June 30, 2020
|
|
Six Months Ended
June 30, 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:
|
$
|
1,914
|
|
|
$
|
502
|
|
|
$
|
339
|
|
|
$
|
—
|
|
|
$
|
2,755
|
|
|
$
|
3,304
|
|
|
$
|
993
|
|
|
$
|
321
|
|
|
$
|
—
|
|
|
$
|
4,618
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
1,530
|
|
|
401
|
|
|
13
|
|
|
1
|
|
|
1,945
|
|
|
2,028
|
|
|
614
|
|
|
13
|
|
|
—
|
|
|
2,655
|
|
|
Depreciation of
revenue earning vehicles and lease charges
|
871
|
|
|
170
|
|
|
245
|
|
|
—
|
|
|
1,286
|
|
|
797
|
|
|
203
|
|
|
226
|
|
|
—
|
|
|
1,226
|
|
|
Selling, general and
administrative
|
180
|
|
|
85
|
|
|
5
|
|
|
107
|
|
|
377
|
|
|
241
|
|
|
111
|
|
|
14
|
|
|
124
|
|
|
490
|
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
183
|
|
|
44
|
|
|
23
|
|
|
—
|
|
|
250
|
|
|
166
|
|
|
47
|
|
|
25
|
|
|
—
|
|
|
238
|
|
|
Non-vehicle
|
(68)
|
|
|
(1)
|
|
|
(8)
|
|
|
178
|
|
|
101
|
|
|
(92)
|
|
|
(3)
|
|
|
(9)
|
|
|
248
|
|
|
144
|
|
|
Total interest
expense, net
|
115
|
|
|
43
|
|
|
15
|
|
|
178
|
|
|
351
|
|
|
74
|
|
|
44
|
|
|
16
|
|
|
248
|
|
|
382
|
|
|
Technology-related
intangible and other asset impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
|
193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Other (income)
expense, net
|
(19)
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(15)
|
|
|
(13)
|
|
|
—
|
|
|
—
|
|
|
(18)
|
|
|
(31)
|
|
|
Reorganization items,
net
|
(1)
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
expenses
|
2,676
|
|
|
699
|
|
|
278
|
|
|
507
|
|
|
4,160
|
|
|
3,127
|
|
|
972
|
|
|
269
|
|
|
354
|
|
|
4,722
|
|
|
Income (loss) before
income taxes
|
$
|
(762)
|
|
|
$
|
(197)
|
|
|
$
|
61
|
|
|
$
|
(507)
|
|
|
$
|
(1,405)
|
|
|
$
|
177
|
|
|
$
|
21
|
|
|
$
|
52
|
|
|
$
|
(354)
|
|
|
$
|
(104)
|
|
|
Income tax
(provision) benefit
|
|
|
|
|
|
|
|
|
196
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
$
|
(1,209)
|
|
|
|
|
|
|
|
|
|
|
$
|
(107)
|
|
|
Net (income) loss
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Net income (loss)
attributable to Hertz Global
|
|
|
|
|
|
|
|
|
$
|
(1,203)
|
|
|
|
|
|
|
|
|
|
|
$
|
(108)
|
|
|
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
June 30,
|
|
Six Months Ended
June 30,
|
|
(In millions, except
per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Adjusted Net
Income (Loss) and Adjusted Diluted Earnings (Loss) Per
Share:
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Hertz Global
|
$
|
(847)
|
|
|
$
|
38
|
|
|
$
|
(1,203)
|
|
|
$
|
(108)
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
(192)
|
|
|
4
|
|
|
(196)
|
|
|
3
|
|
|
Vehicle and
non-vehicle debt-related charges(a)
|
18
|
|
|
13
|
|
|
30
|
|
|
26
|
|
|
Technology-related
intangible and other asset impairments(b)
|
193
|
|
|
—
|
|
|
193
|
|
|
—
|
|
|
Restructuring and
restructuring related charges(c)
|
41
|
|
|
4
|
|
|
47
|
|
|
10
|
|
|
Information technology
and finance transformation costs(d)
|
8
|
|
|
38
|
|
|
25
|
|
|
60
|
|
|
Acquisition
accounting-related depreciation and
amortization(e)
|
13
|
|
|
14
|
|
|
27
|
|
|
27
|
|
|
Reorganization items,
net(f)
|
23
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
Pre-reorganization and
non-debtor financing charges(g)
|
45
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
Other
items(h)
|
21
|
|
|
(16)
|
|
|
(5)
|
|
|
(34)
|
|
|
Adjusted pre-tax
income (loss)(i)
|
(677)
|
|
|
95
|
|
|
(1,014)
|
|
|
(16)
|
|
|
Income tax (provision)
benefit on adjusted pre-tax income (loss)(j)
|
169
|
|
|
(24)
|
|
|
254
|
|
|
4
|
|
|
Adjusted Net Income
(Loss)
|
$
|
(508)
|
|
|
$
|
71
|
|
|
$
|
(760)
|
|
|
$
|
(12)
|
|
|
Weighted-average
number of diluted shares outstanding
|
144
|
|
|
97
|
|
|
143
|
|
|
96
|
|
|
Adjusted Diluted
Earnings (Loss) Per Share(k)
|
$
|
(3.51)
|
|
|
$
|
0.74
|
|
|
$
|
(5.30)
|
|
|
$
|
(0.12)
|
|
|
|
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA:
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Hertz Global
|
(847)
|
|
|
38
|
|
|
(1,203)
|
|
|
(108)
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
(192)
|
|
|
4
|
|
|
(196)
|
|
|
3
|
|
|
Non-vehicle
depreciation and amortization(l)
|
57
|
|
|
51
|
|
|
110
|
|
|
99
|
|
|
Non-vehicle debt
interest, net of interest income
|
44
|
|
|
72
|
|
|
101
|
|
|
144
|
|
|
Vehicle debt-related
charges(a)(m)
|
15
|
|
|
9
|
|
|
24
|
|
|
19
|
|
|
Technology-related
intangible and other asset impairments(b)
|
193
|
|
|
—
|
|
|
193
|
|
|
—
|
|
|
Restructuring and
restructuring related charges(c)
|
41
|
|
|
4
|
|
|
47
|
|
|
10
|
|
|
Information technology
and finance transformation costs(d)
|
8
|
|
|
38
|
|
|
25
|
|
|
60
|
|
|
Reorganization items,
net(f)
|
23
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
Pre-reorganization and
non-debtor financing charges(g)
|
45
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
Other
items(h)(n)
|
26
|
|
|
(9)
|
|
|
1
|
|
|
(24)
|
|
|
Adjusted Corporate
EBITDA
|
$
|
(587)
|
|
|
$
|
207
|
|
|
$
|
(830)
|
|
|
$
|
203
|
|
|
Supplemental
Schedule II (continued)
|
|
|
(a)
|
Represents
debt-related charges relating to the amortization of deferred
financing costs and debt discounts and premiums.
|
|
(b)
|
Represents the
impairment of technology-related intangible assets and capitalized
cloud computing implementation costs. These costs relate to the
Company's corporate operations ("Corporate").
|
|
(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.
|
|
(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 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 charges
incurred associated with the Reorganization, including professional
fees. The charges relate primarily to Corporate.
|
|
(g)
|
Represents charges
incurred prior to the Reorganization comprised of preparation
charges for the Reorganization, such as professional fees and
certain non-debtor financing charges. For U.S. RAC, International
RAC and Corporate charges incurred for the three and six months
ended June 30, 2020 are $15 million, $2 million and $28 million,
respectively.
|
|
(h)
|
Represents
miscellaneous items. In 2020, includes a $20 million gain on the
sale of non-vehicle capital assets in U.S. RAC, which was recorded
in the first quarter, partially offset by second quarter charges of
$18 million for losses associated with certain vehicle damages of
which $15 million impacts U.S. RAC and $3 million impacts
International RAC. In 2019, includes a $20 million gain on
marketable securities in Corporate, of which $9 million was
recorded in the second quarter, and a $12 million gain on the sale
of non-vehicle capital assets in U.S. RAC, of which $4 million was
recorded in the second quarter.
|
|
(i)
|
Adjustments by
caption on a pre-tax basis are as follows:
|
|
|
Increase
(decrease) to expenses
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
(In
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Direct vehicle and
operating
|
$
|
(54)
|
|
|
$
|
(15)
|
|
|
$
|
(70)
|
|
|
$
|
(27)
|
|
|
Selling, general and
administrative
|
(56)
|
|
|
(38)
|
|
|
(64)
|
|
|
(68)
|
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
Vehicle
|
(30)
|
|
|
(9)
|
|
|
(39)
|
|
|
(19)
|
|
|
Non-vehicle
|
(3)
|
|
|
(4)
|
|
|
(6)
|
|
|
(7)
|
|
|
Total interest
expense, net
|
(33)
|
|
|
(13)
|
|
|
(45)
|
|
|
(26)
|
|
|
Intangible and other
asset impairments
|
(193)
|
|
|
—
|
|
|
(193)
|
|
|
—
|
|
|
Other income
(expense), net
|
(3)
|
|
|
13
|
|
|
10
|
|
|
32
|
|
|
Reorganization items,
net
|
(23)
|
|
|
—
|
|
|
(23)
|
|
|
—
|
|
|
Total
adjustments
|
$
|
(362)
|
|
|
$
|
(53)
|
|
|
$
|
(385)
|
|
|
$
|
(89)
|
|
|
(j)
|
Derived utilizing a
combined statutory rate of 25% for the three and six months ended
June 30, 2020 and 2019 applied to the respective Adjusted
Pre-tax Income (Loss).
|
|
(k)
|
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.
|
|
(l)
|
Non-vehicle
depreciation and amortization expense for U.S. RAC, International
RAC, All Other Operations and Corporate for the three months ended
June 30, 2020 are $46 million, $5 million, $2 million and $4
million, respectively, and for the three months ended June 30, 2019
are $39 million, $6 million, $3 million and $3 million,
respectively. Non-vehicle depreciation and amortization expense for
U.S. RAC, International RAC, All Other Operations and Corporate for
the six months ended June 30, 2020 are $87 million, $11 million, $5
million and $7 million, respectively, and for the six months ended
June 30, 2019 are $76 million, $12 million, $5 million and $6
million, respectively.
|
|
(m)
|
Vehicle debt-related
charges for U.S. RAC, International RAC and All Other Operations
for the three months ended June 30, 2020 are $9 million, $5 million
and $1 million, respectively, and for the three months ended June
30, 2019 are $5 million, $3 million, and $1 million, respectively.
Vehicle debt-related charges for U.S. RAC, International RAC and
All Other Operations for the six months ended June 30, 2020 are $15
million, $8 million and $1 million, respectively, and for the six
months ended June 30, 2019 are $11 million, $6 million and $2
million, respectively.
|
|
(n)
|
Also includes an
adjustment for non-cash stock-based compensation charges in
Corporate.
|
|
Supplemental
Schedule III
|
|
HERTZ GLOBAL
HOLDINGS, INC.
RECONCILIATIONS OF KEY METRICS
REVENUE, UTILIZATION AND DEPRECIATION
Unaudited
|
|
|
U.S. Rental
Car
|
|
|
Three Months
Ended
June
30,
|
|
Percent
Inc/(Dec)
|
|
Six Months
Ended
June
30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
533
|
|
|
$
|
1,784
|
|
|
|
|
$
|
1,914
|
|
|
$
|
3,304
|
|
|
|
|
Ancillary retail
vehicle sales revenue
|
(38)
|
|
|
(33)
|
|
|
|
|
(70)
|
|
|
(62)
|
|
|
|
|
Total Rental
Revenues
|
$
|
495
|
|
|
$
|
1,751
|
|
|
|
|
$
|
1,844
|
|
|
$
|
3,242
|
|
|
|
|
Transaction Days (in
thousands)
|
12,964
|
|
|
41,173
|
|
|
|
|
44,529
|
|
|
76,754
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
38.17
|
|
|
$
|
42.54
|
|
|
(10)
|
%
|
|
$
|
41.41
|
|
|
$
|
42.24
|
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
495
|
|
|
$
|
1,751
|
|
|
|
|
$
|
1,844
|
|
|
$
|
3,242
|
|
|
|
|
Average Vehicles (in
whole units)
|
502,763
|
|
|
554,794
|
|
|
|
|
510,672
|
|
|
528,281
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
985
|
|
|
$
|
3,156
|
|
|
|
|
$
|
3,611
|
|
|
$
|
6,137
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
328
|
|
|
$
|
1,052
|
|
|
(69)
|
%
|
|
$
|
602
|
|
|
$
|
1,023
|
|
|
(41)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction Days (in
thousands)
|
12,964
|
|
|
41,173
|
|
|
|
|
44,529
|
|
|
76,754
|
|
|
|
|
Average Vehicles (in
whole units)
|
502,763
|
|
|
554,794
|
|
|
|
|
510,672
|
|
|
528,281
|
|
|
|
|
Number of days in
period (in whole units)
|
91
|
|
|
91
|
|
|
|
|
182
|
|
|
181
|
|
|
|
|
Available Car Days
(in thousands)
|
45,751
|
|
|
50,486
|
|
|
|
|
92,942
|
|
|
95,619
|
|
|
|
|
Vehicle
Utilization(a)
|
28
|
%
|
|
82
|
%
|
|
|
|
48
|
%
|
|
80
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges
|
$
|
408
|
|
|
$
|
411
|
|
|
|
|
$
|
871
|
|
|
$
|
797
|
|
|
|
|
Average Vehicles (in
whole units)
|
502,763
|
|
|
554,794
|
|
|
|
|
510,672
|
|
|
528,281
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges divided by Average
Vehicles (in whole dollars)
|
$
|
812
|
|
|
$
|
741
|
|
|
|
|
$
|
1,706
|
|
|
$
|
1,509
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
271
|
|
|
$
|
247
|
|
|
10
|
%
|
|
$
|
284
|
|
|
$
|
251
|
|
|
13
|
%
|
|
(a)
|
Calculated as
Transaction Days divided by Available Car Days.
|
|
Supplemental
Schedule III (continued)
|
|
HERTZ GLOBAL
HOLDINGS, INC.
RECONCILIATIONS OF KEY METRICS
REVENUE, UTILIZATION AND DEPRECIATION
Unaudited
|
|
|
International
Rental Car
|
|
|
Three Months
Ended
June
30,
|
|
Percent
Inc/(Dec)
|
|
Six Months
Ended
June
30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
135
|
|
|
$
|
560
|
|
|
|
|
$
|
502
|
|
|
$
|
993
|
|
|
|
|
Foreign currency
adjustment(a)
|
4
|
|
|
—
|
|
|
|
|
12
|
|
|
(4)
|
|
|
|
|
Total Rental
Revenues
|
$
|
139
|
|
|
$
|
560
|
|
|
|
|
$
|
514
|
|
|
$
|
989
|
|
|
|
|
Transaction Days (in
thousands)
|
4,256
|
|
|
13,125
|
|
|
|
|
13,119
|
|
|
23,252
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
32.56
|
|
|
$
|
42.68
|
|
|
(24)
|
%
|
|
$
|
39.18
|
|
|
$
|
42.49
|
|
|
(8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
139
|
|
|
$
|
560
|
|
|
|
|
$
|
514
|
|
|
$
|
989
|
|
|
|
|
Average Vehicles (in
whole units)
|
129,615
|
|
|
186,881
|
|
|
|
|
138,801
|
|
|
169,814
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
1,072
|
|
|
$
|
2,997
|
|
|
|
|
$
|
3,703
|
|
|
$
|
5,824
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
356
|
|
|
$
|
999
|
|
|
(64)
|
%
|
|
$
|
617
|
|
|
$
|
970
|
|
|
(36)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction Days (in
thousands)
|
4,256
|
|
|
13,125
|
|
|
|
|
13,119
|
|
|
23,252
|
|
|
|
|
Average Vehicles (in
whole units)
|
129,615
|
|
|
186,881
|
|
|
|
|
138,801
|
|
|
169,814
|
|
|
|
|
Number of days in
period (in whole units)
|
91
|
|
|
91
|
|
|
|
|
182
|
|
|
181
|
|
|
|
|
Available Car Days
(in thousands)
|
11,795
|
|
|
17,006
|
|
|
|
|
25,262
|
|
|
30,736
|
|
|
|
|
Vehicle
Utilization(b)
|
36
|
%
|
|
77
|
%
|
|
|
|
52
|
%
|
|
76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges
|
$
|
81
|
|
|
$
|
106
|
|
|
|
|
$
|
170
|
|
|
$
|
203
|
|
|
|
|
Foreign currency
adjustment(a)
|
3
|
|
|
—
|
|
|
|
|
4
|
|
|
(1)
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges
|
$
|
84
|
|
|
$
|
106
|
|
|
|
|
$
|
174
|
|
|
$
|
202
|
|
|
|
|
Average Vehicles (in
whole units)
|
129,615
|
|
|
186,881
|
|
|
|
|
138,801
|
|
|
169,814
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges divided by Average
Vehicles (in whole dollars)
|
$
|
648
|
|
|
$
|
567
|
|
|
|
|
$
|
1,254
|
|
|
$
|
1,190
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
215
|
|
|
$
|
189
|
|
|
14
|
%
|
|
$
|
209
|
|
|
$
|
198
|
|
|
6
|
%
|
|
(a)
|
Based on
December 31, 2019 foreign exchange rates.
|
|
(b)
|
Calculated as
Transaction Days divided by Available Car Days.
|
|
Supplemental
Schedule III (continued)
|
|
HERTZ GLOBAL
HOLDINGS, INC.
RECONCILIATIONS OF KEY METRICS
REVENUE, UTILIZATION AND DEPRECIATION
Unaudited
|
|
|
Worldwide Rental
Car
|
|
|
Three Months
Ended
June
30,
|
|
Percent
Inc/(Dec)
|
|
Six Months
Ended
June
30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
668
|
|
|
$
|
2,344
|
|
|
|
|
$
|
2,416
|
|
|
$
|
4,296
|
|
|
|
|
Ancillary retail
vehicle sales revenue
|
(38)
|
|
|
(33)
|
|
|
|
|
(70)
|
|
|
(62)
|
|
|
|
|
Foreign currency
adjustment(a)
|
4
|
|
|
—
|
|
|
|
|
12
|
|
|
(4)
|
|
|
|
|
Total Rental
Revenues
|
$
|
634
|
|
|
$
|
2,311
|
|
|
|
|
$
|
2,358
|
|
|
$
|
4,230
|
|
|
|
|
Transaction Days (in
thousands)
|
17,220
|
|
|
54,298
|
|
|
|
|
57,648
|
|
|
100,006
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
36.78
|
|
|
$
|
42.58
|
|
|
(14)
|
%
|
|
$
|
40.90
|
|
|
$
|
42.30
|
|
|
(3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Rental
Revenues
|
$
|
634
|
|
|
$
|
2,311
|
|
|
|
|
$
|
2,358
|
|
|
$
|
4,230
|
|
|
|
|
Average Vehicles (in
whole units)
|
632,378
|
|
|
741,675
|
|
|
|
|
649,473
|
|
|
698,095
|
|
|
|
|
Total revenue per
unit (in whole dollars)
|
$
|
1,003
|
|
|
$
|
3,116
|
|
|
|
|
$
|
3,631
|
|
|
$
|
6,059
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Total RPU Per Month
(in whole dollars)
|
$
|
334
|
|
|
$
|
1,039
|
|
|
(68)
|
%
|
|
$
|
605
|
|
|
$
|
1,010
|
|
|
(40)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction Days (in
thousands)
|
17,220
|
|
|
54,298
|
|
|
|
|
57,648
|
|
|
100,006
|
|
|
|
|
Average Vehicles (in
whole units)
|
632,378
|
|
|
741,675
|
|
|
|
|
649,473
|
|
|
698,095
|
|
|
|
|
Number of days in
period (in whole units)
|
91
|
|
|
91
|
|
|
|
|
182
|
|
|
181
|
|
|
|
|
Available Car Days
(in thousands)
|
57,546
|
|
|
67,492
|
|
|
|
|
118,204
|
|
|
126,355
|
|
|
|
|
Vehicle
Utilization(b)
|
30
|
%
|
|
80
|
%
|
|
|
|
49
|
%
|
|
79
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation Per
Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and lease charges
|
$
|
489
|
|
|
$
|
517
|
|
|
|
|
$
|
1,041
|
|
|
$
|
1,000
|
|
|
|
|
Foreign currency
adjustment(a)
|
3
|
|
|
—
|
|
|
|
|
4
|
|
|
(1)
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges
|
$
|
492
|
|
|
$
|
517
|
|
|
|
|
$
|
1,045
|
|
|
$
|
999
|
|
|
|
|
Average Vehicles (in
whole units)
|
632,378
|
|
|
741,675
|
|
|
|
|
649,473
|
|
|
698,095
|
|
|
|
|
Adjusted depreciation
of revenue earning vehicles and lease charges divided by Average
Vehicles (in whole dollars)
|
$
|
778
|
|
|
$
|
697
|
|
|
|
|
$
|
1,609
|
|
|
$
|
1,431
|
|
|
|
|
Number of months in
period (in whole units)
|
3
|
|
|
3
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Depreciation Per Unit
Per Month (in whole dollars)
|
$
|
259
|
|
|
$
|
232
|
|
|
12
|
%
|
|
$
|
268
|
|
|
$
|
238
|
|
|
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,
reorganization items, pre-reorganization and non-debtor financing
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,
reorganization items, pre-reorganization and non-debtor financing
charges 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.
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.
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SOURCE Hertz Global Holdings, Inc.