x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2016 | |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State or other jurisdiction of incorporation or organization) | 20-3530539 (I.R.S. Employer Identification Number) |
Large accelerated filer | x | Accelerated filer | o | Non-accelerated filer | o | Smaller reporting company | o |
(Do not check if a smaller reporting company) |
Class | Shares Outstanding at | May 2, 2016 | |
Common Stock, par value $0.01 per share | 424,418,102 | ||
Page | ||
Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 | ||
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015 | ||
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2016 and 2015 | ||
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015 | ||
March 31, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 857 | $ | 486 | |||
Restricted cash and cash equivalents | 353 | 349 | |||||
Receivables, net of allowance of $70 and $60, respectively | 1,518 | 2,074 | |||||
Inventories, net | 53 | 51 | |||||
Prepaid expenses and other assets | 651 | 773 | |||||
Revenue earning equipment: | |||||||
Vehicles | 14,484 | 13,441 | |||||
Less accumulated depreciation - vehicles | (2,620 | ) | (2,695 | ) | |||
Equipment | 3,543 | 3,526 | |||||
Less accumulated depreciation - equipment | (1,182 | ) | (1,144 | ) | |||
Revenue earning equipment, net | 14,225 | 13,128 | |||||
Property and other equipment: | |||||||
Land, buildings and leasehold improvements | 1,335 | 1,347 | |||||
Service equipment and other | 1,089 | 1,075 | |||||
Less accumulated depreciation | (1,210 | ) | (1,174 | ) | |||
Property and other equipment, net | 1,214 | 1,248 | |||||
Other intangible assets, net | 3,804 | 3,822 | |||||
Goodwill | 1,353 | 1,354 | |||||
Total assets | $ | 24,028 | $ | 23,285 | |||
LIABILITIES AND EQUITY | |||||||
Accounts payable | $ | 1,382 | $ | 875 | |||
Accrued liabilities | 1,090 | 1,106 | |||||
Accrued taxes, net | 166 | 172 | |||||
Debt | 16,072 | 15,834 | |||||
Public liability and property damage | 413 | 402 | |||||
Deferred taxes on income, net | 2,867 | 2,877 | |||||
Total liabilities | 21,990 | 21,266 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Preferred Stock, $0.01 par value, 200 shares authorized, no shares issued and outstanding | — | — | |||||
Common Stock, $0.01 par value, 2,000 shares authorized, 465 and 464 shares issued and 424 and 423 shares outstanding | 4 | 4 | |||||
Additional paid-in capital | 3,359 | 3,343 | |||||
Accumulated deficit | (442 | ) | (391 | ) | |||
Accumulated other comprehensive income (loss) | (191 | ) | (245 | ) | |||
2,730 | 2,711 | ||||||
Treasury Stock, at cost, 41 shares and 41 shares | (692 | ) | (692 | ) | |||
Total equity | 2,038 | 2,019 | |||||
Total liabilities and equity | $ | 24,028 | $ | 23,285 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Revenues: | |||||||
Worldwide car rental | $ | 1,839 | $ | 1,956 | |||
Worldwide equipment rental | 328 | 355 | |||||
All other operations | 144 | 143 | |||||
Total revenues | 2,311 | 2,454 | |||||
Expenses: | |||||||
Direct operating | 1,341 | 1,408 | |||||
Depreciation of revenue earning equipment and lease charges, net | 706 | 707 | |||||
Selling, general and administrative | 267 | 266 | |||||
Interest expense, net | 157 | 154 | |||||
Other (income) expense, net | (91 | ) | 5 | ||||
Total expenses | 2,380 | 2,540 | |||||
Income (loss) before income taxes | (69 | ) | (86 | ) | |||
(Provision) benefit for taxes on income (loss) | 18 | 16 | |||||
Net income (loss) | $ | (51 | ) | $ | (70 | ) | |
Weighted average shares outstanding: | |||||||
Basic | 424 | 459 | |||||
Diluted | 424 | 459 | |||||
Earnings (loss) per share: | |||||||
Basic | $ | (0.12 | ) | $ | (0.15 | ) | |
Diluted | $ | (0.12 | ) | $ | (0.15 | ) |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net income (loss) | $ | (51 | ) | $ | (70 | ) | |
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustments | 36 | (48 | ) | ||||
Unrealized holding gains (losses) on securities | 17 | — | |||||
Reclassification from other comprehensive income (loss) to selling, general and administrative expense for amortization of actuarial (gains) losses on defined benefit pension plans | 2 | 2 | |||||
Total other comprehensive income (loss) before income taxes | 55 | (46 | ) | ||||
Income tax (provision) benefit related to reclassified amounts of net periodic costs on defined benefit pension plans | (1 | ) | — | ||||
Total other comprehensive income (loss) | 54 | (46 | ) | ||||
Total comprehensive income (loss) | $ | 3 | $ | (116 | ) |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (51 | ) | $ | (70 | ) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||
Depreciation of revenue earning equipment, net | 691 | 689 | |||||
Depreciation and amortization, non-fleet | 77 | 86 | |||||
Amortization and write-off of deferred financing costs | 14 | 15 | |||||
Amortization and write-off of debt discount (premium) | 1 | 1 | |||||
Stock-based compensation charges | 6 | 4 | |||||
Provision for receivables allowance | 23 | 6 | |||||
Deferred taxes on income | (11 | ) | (16 | ) | |||
Impairment charges and asset write-downs | — | 20 | |||||
(Gain) loss on sale of shares in equity method investment | (75 | ) | — | ||||
Other | (6 | ) | (4 | ) | |||
Changes in assets and liabilities | |||||||
Receivables | (49 | ) | (13 | ) | |||
Inventories, prepaid expenses and other assets | (17 | ) | (65 | ) | |||
Accounts payable | (7 | ) | 18 | ||||
Accrued liabilities | (19 | ) | 91 | ||||
Accrued taxes | (6 | ) | 20 | ||||
Public liability and property damage | 6 | — | |||||
Net cash provided by (used in) operating activities | 577 | 782 | |||||
Cash flows from investing activities: | |||||||
Net change in restricted cash and cash equivalents | (2 | ) | 154 | ||||
Revenue earning equipment expenditures | (3,627 | ) | (3,438 | ) | |||
Proceeds from disposal of revenue earning equipment | 3,010 | 2,289 | |||||
Capital asset expenditures, non-fleet | (53 | ) | (97 | ) | |||
Proceeds from disposal of property and other equipment | 22 | 22 | |||||
Acquisitions, net of cash acquired | — | (96 | ) | ||||
Sales of shares in equity method investment | 233 | — | |||||
Net cash provided by (used in) investing activities | (417 | ) | (1,166 | ) |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of long-term debt | 1,000 | — | |||||
Repayments of long-term debt | (185 | ) | (1,027 | ) | |||
Short-term borrowings: | |||||||
Proceeds | 151 | 175 | |||||
Payments | (132 | ) | (142 | ) | |||
Proceeds under the revolving lines of credit | 1,663 | 3,326 | |||||
Payments under the revolving lines of credit | (2,296 | ) | (1,828 | ) | |||
Payment of financing costs | (10 | ) | (1 | ) | |||
Other | 8 | (4 | ) | ||||
Net cash provided by (used in) financing activities | 199 | 499 | |||||
Effect of foreign exchange rate changes on cash and cash equivalents | 12 | (20 | ) | ||||
Net increase (decrease) in cash and cash equivalents during the period | 371 | 95 | |||||
Cash and cash equivalents at beginning of period | 486 | 490 | |||||
Cash and cash equivalents at end of period | $ | 857 | $ | 585 | |||
Supplemental disclosures of cash information: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 102 | $ | 98 | |||
Income taxes, net of refunds | 16 | 4 | |||||
Supplemental disclosures of non-cash information: | |||||||
Purchases of revenue earning equipment included in accounts payable and accrued liabilities | $ | 636 | $ | 633 | |||
Sales of revenue earning equipment included in receivables | 471 | 293 | |||||
Purchases of property and other equipment included in accounts payable | 20 | 71 | |||||
Sales of property and other equipment included in receivables | 13 | 24 |
Prepaid expenses and other assets | Total assets | Debt | Total liabilities | Total liabilities and equity | |||||||||||||||
As previously reported | $ | 846 | $ | 23,358 | $ | 15,907 | $ | 21,339 | $ | 23,358 | |||||||||
Reclass from asset to debt liability | (73 | ) | (73 | ) | (73 | ) | (73 | ) | (73 | ) | |||||||||
As adjusted | $ | 773 | $ | 23,285 | $ | 15,834 | $ | 21,266 | $ | 23,285 |
(In millions) | U.S. Car Rental | ||
Revenue earning equipment | $ | 71 | |
Property and equipment | 6 | ||
Other intangible assets | 9 | ||
Goodwill | 1 | ||
Total | $ | 87 |
(In millions) | March 31, 2016 | December 31, 2015 | |||||
Revenue earning equipment | $ | 17,580 | $ | 16,768 | |||
Less: Accumulated depreciation | (3,653 | ) | (3,775 | ) | |||
13,927 | 12,993 | ||||||
Revenue earning equipment held for sale, net | 298 | 135 | |||||
Revenue earning equipment, net | $ | 14,225 | $ | 13,128 |
Three Months Ended March 31, | |||||||
(In millions) | 2016 | 2015 | |||||
Depreciation of revenue earning equipment | $ | 640 | $ | 703 | |||
(Gain) loss on disposal of revenue earning equipment(a) | 51 | (14 | ) | ||||
Rents paid for vehicles leased | 15 | 18 | |||||
Depreciation of revenue earning equipment and lease charges, net | $ | 706 | $ | 707 |
Three Months Ended March 31, | |||||||
(In millions) | 2016 | 2015 | |||||
U.S. Car Rental | $ | 43 | $ | (20 | ) | ||
International Car Rental | — | — | |||||
Worldwide Equipment Rental | 8 | 6 | |||||
Total | $ | 51 | $ | (14 | ) |
Increase (decrease) | Three Months Ended March 31, | ||||||
(In millions) | 2016 | 2015 | |||||
U.S. Car Rental | $ | 27 | $ | 30 | |||
International Car Rental | 1 | — | |||||
Worldwide Equipment Rental | — | — | |||||
Total | $ | 28 | $ | 30 |
Facility | Weighted Average Interest Rate at March 31, 2016 | Fixed or Floating Interest Rate | Maturity | March 31, 2016 | December 31, 2015 | |||||||||
Corporate Debt | ||||||||||||||
Senior Term Facility | 3.26% | Floating | 3/2018 | $ | 2,056 | $ | 2,062 | |||||||
Senior ABL Facility | N/A | Floating | 3/2016–3/2017 | — | — | |||||||||
Senior Notes(1) | 6.58% | Fixed | 4/2018–10/2022 | 3,900 | 3,900 | |||||||||
Promissory Notes | 7.00% | Fixed | 1/2028 | 27 | 27 | |||||||||
Other Corporate Debt | 3.92% | Fixed | Various | 63 | 66 | |||||||||
Unamortized Debt Issuance Costs and Net (Discount) Premium (Corporate) | (40 | ) | (44 | ) | ||||||||||
Total Corporate Debt | 6,006 | 6,011 |
Facility | Weighted Average Interest Rate at March 31, 2016 | Fixed or Floating Interest Rate | Maturity | March 31, 2016 | December 31, 2015 | |||||||||
Fleet Debt | ||||||||||||||
HVF U.S. Fleet Medium Term Notes | ||||||||||||||
HVF Series 2010-1(2) | 4.96% | Fixed | 2/2018 | 115 | 240 | |||||||||
HVF Series 2011-1(2) | 3.51% | Fixed | 3/2017 | 230 | 230 | |||||||||
HVF Series 2013-1(2) | 1.70% | Fixed | 8/2016–8/2018 | 896 | 950 | |||||||||
1,241 | 1,420 | |||||||||||||
HVF II U.S. ABS Program | ||||||||||||||
HVF II U.S. Fleet Variable Funding Notes | ||||||||||||||
HVF II Series 2013-A | 1.51% | Floating | 10/2017 | 1,044 | 980 | |||||||||
HVF II Series 2013-B | 1.55% | Floating | 10/2017 | 1,013 | 1,308 | |||||||||
HVF II Series 2014-A | 2.26% | Floating | 10/2016 | 1,393 | 1,737 | |||||||||
3,450 | 4,025 | |||||||||||||
HVF II U.S. Fleet Medium Term Notes | ||||||||||||||
HVF II Series 2015-1(2) | 2.93% | Fixed | 3/2020 | 780 | 780 | |||||||||
HVF II Series 2015-2(2) | 2.30% | Fixed | 9/2018 | 250 | 250 | |||||||||
HVF II Series 2015-3(2) | 2.96% | Fixed | 9/2020 | 350 | 350 | |||||||||
HVF II Series 2016-1(2) | 2.72% | Fixed | 3/2019 | 439 | — | |||||||||
HVF II Series 2016-2(2) | 3.25% | Fixed | 3/2021 | 561 | — | |||||||||
2,380 | 1,380 | |||||||||||||
Donlen ABS Program | ||||||||||||||
HFLF Variable Funding Notes | ||||||||||||||
HFLF Series 2013-2 Notes(2) | 1.52% | Floating | 9/2017 | 450 | 370 | |||||||||
450 | 370 | |||||||||||||
HFLF Medium Term Notes | ||||||||||||||
HFLF Series 2013-3 Notes(2) | 1.16% | Floating | 9/2016–11/2016 | 217 | 270 | |||||||||
HFLF Series 2014-1 Notes(2) | 1.02% | Floating | 12/2016–3/2017 | 245 | 288 | |||||||||
HFLF Series 2015-1 Notes(2) | 1.11% | Floating | 3/2018–5/2018 | 295 | 295 | |||||||||
757 | 853 |
Facility | Weighted Average Interest Rate at March 31, 2016 | Fixed or Floating Interest Rate | Maturity | March 31, 2016 | December 31, 2015 | |||||||||
Other Fleet Debt | ||||||||||||||
U.S. Fleet Financing Facility | 3.19% | Floating | 3/2017 | 157 | 190 | |||||||||
European Revolving Credit Facility | 2.41% | Floating | 10/2017 | 283 | 273 | |||||||||
European Fleet Notes | 4.38% | Fixed | 1/2019 | 480 | 464 | |||||||||
European Securitization(2) | 1.41% | Floating | 10/2017 | 259 | 267 | |||||||||
Canadian Securitization(2) | 1.80% | Floating | 1/2018 | 168 | 148 | |||||||||
Australian Securitization(2) | 3.75% | Floating | 12/2016 | 97 | 98 | |||||||||
Brazilian Fleet Financing Facility | 17.93% | Floating | 4/2016 | 8 | 7 | |||||||||
Capitalized Leases | 2.67% | Floating | 5/2016–3/2020 | 376 | 362 | |||||||||
1,828 | 1,809 | |||||||||||||
Unamortized Debt Issuance Costs and Net (Discount) Premium (Fleet) | (40 | ) | (34 | ) | ||||||||||
Total Fleet Debt | 10,066 | 9,823 | ||||||||||||
Total Debt | $ | 16,072 | $ | 15,834 |
(1) | References to the "Senior Notes" include the series of Hertz's unsecured senior notes set forth on the table below. Outstanding principal amounts for each such series of the Senior Notes is also specified below: |
(In millions) | Outstanding Principal | ||||||
Senior Notes | March 31, 2016 | December 31, 2015 | |||||
4.25% Senior Notes due April 2018 | $ | 250 | $ | 250 | |||
7.50% Senior Notes due October 2018 | 700 | 700 | |||||
6.75% Senior Notes due April 2019 | 1,250 | 1,250 | |||||
5.875% Senior Notes due October 2020 | 700 | 700 | |||||
7.375% Senior Notes due January 2021 | 500 | 500 | |||||
6.25% Senior Notes due October 2022 | 500 | 500 | |||||
$ | 3,900 | $ | 3,900 |
(2) | Maturity reference is to the "expected final maturity date" as opposed to the subsequent "legal maturity date." The expected final maturity date is the date by which Hertz and investors in the relevant indebtedness expect the relevant indebtedness to be repaid, which in the case of the HFLF Medium Term Notes was based upon various assumptions made at the time of the pricing of such notes. The legal final maturity date is the date on which the relevant indebtedness is legally due and payable. |
(In millions) | Remaining Capacity | Availability Under Borrowing Base Limitation | |||||
Corporate Debt | |||||||
Senior ABL Facility | $ | 1,488 | $ | 1,481 | |||
Total Corporate Debt | 1,488 | 1,481 | |||||
Fleet Debt | |||||||
HVF II U.S. Fleet Variable Funding Notes | 2,125 | — | |||||
HFLF Variable Funding Notes | 50 | — | |||||
European Revolving Credit Facility | — | — | |||||
European Securitization | 192 | 4 | |||||
Canadian Securitization | 99 | — | |||||
Australian Securitization | 94 | — | |||||
Capitalized Leases | 50 | 1 | |||||
Total Fleet Debt | 2,610 | 5 | |||||
Total | $ | 4,098 | $ | 1,486 |
Pension Benefits | |||||||||||||||
U.S. | Non-U.S. | ||||||||||||||
Three Months Ended March 31, | |||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Components of Net Periodic Benefit Cost: | |||||||||||||||
Service cost | $ | 1 | $ | 1 | $ | — | $ | 1 | |||||||
Interest cost | 7 | 7 | 2 | 2 | |||||||||||
Expected return on plan assets | (9 | ) | (10 | ) | (3 | ) | (4 | ) | |||||||
Net amortizations | 2 | 1 | — | — | |||||||||||
Settlement loss | 1 | 1 | — | — | |||||||||||
Net periodic pension expense (benefit) | $ | 2 | $ | — | $ | (1 | ) | $ | (1 | ) |
Three Months Ended March 31, | |||||||
(In millions) | 2016 | 2015 | |||||
Compensation expense | $ | 6 | $ | 4 | |||
Income tax benefit | (2 | ) | (1 | ) | |||
Total | $ | 4 | $ | 3 |
Three Months Ended March 31, | |||||||
(In millions) | 2016 | 2015 | |||||
By Type: | |||||||
Termination benefits | $ | 6 | $ | 6 | |||
Impairments and asset write-downs | — | 1 | |||||
Facility closure and lease obligation costs | 1 | 1 | |||||
Other | — | (1 | ) | ||||
Total | $ | 7 | $ | 7 |
Three Months Ended March 31, | |||||||
(In millions) | 2016 | 2015 | |||||
By Caption: | |||||||
Direct operating | $ | 1 | $ | 2 | |||
Selling, general and administrative | 6 | 5 | |||||
Total | $ | 7 | $ | 7 |
Three Months Ended March 31, | |||||||
(In millions) | 2016 | 2015 | |||||
By Segment: | |||||||
U.S. Car Rental | $ | 6 | $ | 2 | |||
International Car Rental | 1 | 2 | |||||
Worldwide Equipment Rental | — | 1 | |||||
Corporate | — | 2 | |||||
Total | $ | 7 | $ | 7 |
(In millions) | Termination Benefits | Other | Total | ||||||||
Balance as of January 1, 2016 | $ | 10 | $ | 17 | $ | 27 | |||||
Charges incurred | 6 | 1 | 7 | ||||||||
Cash payments | (3 | ) | (3 | ) | (6 | ) | |||||
Other non-cash changes | — | (1 | ) | (1 | ) | ||||||
Balance as of March 31, 2016 | $ | 13 | $ | 14 | $ | 27 |
Fair Value of Financial Instruments | |||||||||||||||
Asset Derivatives(1) | Liability Derivatives(1) | ||||||||||||||
(In millions) | March 31, 2016 | December 31, 2015 | March 31, 2016 | December 31, 2015 | |||||||||||
Interest rate caps | $ | 3 | $ | 9 | $ | 2 | $ | 9 | |||||||
Foreign currency forward contracts | 2 | 3 | 1 | 1 | |||||||||||
Total | $ | 5 | $ | 12 | $ | 3 | $ | 10 |
(1) | All asset derivatives are recorded in "Prepaid expenses and other assets" and all liability derivatives are recorded in "Accrued liabilities" in the condensed consolidated balance sheets. |
Location of Gain or (Loss) Recognized on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives | ||||||||
Three Months Ended March 31, | |||||||||
(In millions) | 2016 | 2015 | |||||||
Foreign currency forward contracts | Selling, general and administrative | $ | 3 | $ | (1 | ) |
March 31, 2016 | December 31, 2015 | |||||||||||||||||||||||||||||||
(In millions) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Money market funds | $ | 218 | $ | 44 | $ | — | $ | 262 | $ | 195 | $ | 49 | $ | — | $ | 244 | ||||||||||||||||
Equity and other securities | 49 | 100 | — | 149 | — | 111 | — | 111 | ||||||||||||||||||||||||
Total | $ | 267 | $ | 144 | $ | — | $ | 411 | $ | 195 | $ | 160 | $ | — | $ | 355 |
As of March 31, 2016 | As of December 31, 2015 | ||||||||||||||
(In millions) | Nominal Unpaid Principal Balance | Aggregate Fair Value | Nominal Unpaid Principal Balance | Aggregate Fair Value | |||||||||||
Corporate Debt | $ | 6,046 | $ | 6,126 | $ | 6,055 | $ | 6,134 | |||||||
Fleet Debt | 10,106 | 10,103 | 9,857 | 9,854 | |||||||||||
Total | $ | 16,152 | $ | 16,229 | $ | 15,912 | $ | 15,988 |
(In millions) | Balance | Level 1 | Level 2 | Level 3 | Total Loss Adjustments | ||||||||||||||
Long-lived assets held for sale | $ | 21 | $ | — | $ | — | $ | 21 | $ | 3 |
• | U.S. Car Rental - rental of cars, crossovers and light trucks, as well as ancillary products and services, in the United States and consists of the Company's United States operating segment; |
• | International Car Rental - rental and leasing of cars, crossovers and light trucks, as well as ancillary products and services, internationally and consists of the Company's Europe and Other International operating segments, which are aggregated into a reportable segment based primarily upon similar economic characteristics, products and services, customers, delivery methods and general regulatory environments; |
• | Worldwide Equipment Rental - rental of industrial construction, material handling and other equipment and consists of the Company's worldwide equipment rental operating segment; and |
• | All Other Operations - includes the Company's Donlen operating segment which provides fleet leasing and fleet management services and is not considered a separate reportable segment in accordance with applicable accounting standards, together with other business activities. |
Three Months Ended March 31, | |||||||||||||||
Revenues | Adjusted Pre-Tax Income (Loss) | ||||||||||||||
(In millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
U.S. Car Rental | $ | 1,406 | $ | 1,520 | $ | (4 | ) | $ | 71 | ||||||
International Car Rental | 433 | 436 | 3 | 8 | |||||||||||
Worldwide Equipment Rental | 328 | 355 | 12 | 33 | |||||||||||
All Other Operations | 144 | 143 | 18 | 16 | |||||||||||
Total reportable segments | $ | 2,311 | $ | 2,454 | 29 | 128 | |||||||||
Corporate(1) | (112 | ) | (125 | ) | |||||||||||
Consolidated adjusted pre-tax income (loss) | (83 | ) | 3 | ||||||||||||
Adjustments: | |||||||||||||||
Acquisition accounting(2) | (18 | ) | (31 | ) | |||||||||||
Debt-related charges(3) | (15 | ) | (16 | ) | |||||||||||
Restructuring and restructuring related charges(4) | (12 | ) | (20 | ) | |||||||||||
Equipment rental spin-off costs(5) | (13 | ) | (9 | ) | |||||||||||
Sale of CAR Inc. common stock(6) | 75 | — | |||||||||||||
Impairment charges and asset write-downs(7) | — | (9 | ) | ||||||||||||
Finance and information technology transformation costs(8) | (8 | ) | — | ||||||||||||
Other(9) | 5 | (4 | ) | ||||||||||||
Income (loss) before income taxes | $ | (69 | ) | $ | (86 | ) |
(1) | Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities. |
(2) | Represents incremental expense associated with amortization of other intangible assets, depreciation of property and other equipment and accretion of revalued liabilities relating to acquisition accounting. |
(3) | Represents debt-related charges relating to the amortization of deferred debt financing costs and debt discounts and premiums. |
(4) | Represents expenses incurred under restructuring actions as defined in U.S. GAAP. For further information on restructuring costs, see Note 8, "Restructuring." Also represents incremental costs incurred directly supporting business transformation initiatives. Such costs include transition costs incurred in connection with business process outsourcing arrangements and incremental costs incurred to facilitate business process re-engineering initiatives that involve significant organization redesign and extensive operational process changes. Also includes consulting costs and legal fees related to the accounting review and investigation. |
(5) | Represents expenses associated with the anticipated HERC spin-off transaction announced in March 2014. In 2016, $9 million were incurred by HERC and $4 million by Corporate. In 2015, $9 million were incurred by HERC. |
(6) | Represents the pre-tax gain on the sale of CAR Inc. common stock. |
(7) | In 2015, primarily represents a $6 million impairment on the former Dollar Thrifty headquarters in Tulsa, Oklahoma. |
(8) | Represents external costs associated with the Company’s finance and information technology transformation programs, both of which are multi-year initiatives to upgrade and modernize the Company’s systems and processes. |
(9) | Includes miscellaneous and non-recurring items including but not limited to acquisition charges, integration charges, and other non-cash items. In 2016, also includes a settlement gain related to one of our U.S. airport locations and, in 2015, also includes charges incurred in connection with relocating the Company's corporate headquarters to Estero, Florida. |
Three Months Ended March 31, | |||||||
(In millions) | 2016 | 2015 | |||||
U.S. Car Rental | $ | 419 | $ | 421 | |||
International Car Rental | 86 | 95 | |||||
Worldwide Equipment Rental | 90 | 76 | |||||
All Other Operations | 111 | 115 | |||||
Total | $ | 706 | $ | 707 |
(In millions) | March 31, 2016 | December 31, 2015 | |||||
U.S. Car Rental | $ | 13,894 | $ | 13,614 | |||
International Car Rental | 3,548 | 3,002 | |||||
Worldwide Equipment Rental | 3,757 | 3,809 | |||||
All Other Operations | 1,522 | 1,520 | |||||
Corporate | 1,307 | 1,340 | |||||
Total | $ | 24,028 | $ | 23,285 |
Three Months Ended March 31, | |||||||
(In millions, except per share data) | 2016 | 2015 | |||||
Basic and diluted earnings (loss) per share: | |||||||
Numerator: | |||||||
Net income (loss), basic | $ | (51 | ) | $ | (70 | ) | |
Denominator: | |||||||
Basic weighted average common shares | 424 | 459 | |||||
Weighted average shares used to calculate diluted earnings per share | 424 | 459 | |||||
Antidilutive stock options, RSUs and PSUs | 10 | 7 | |||||
Earnings (loss) per share: | |||||||
Basic | $ | (0.12 | ) | $ | (0.15 | ) | |
Diluted | $ | (0.12 | ) | $ | (0.15 | ) |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | Adjusted Pre-Tax Income - important to management because it allows management to assess the operational performance of our business, exclusive of certain items and allows management to assess the performance of the entire business on the same basis as the segment measure of profitability. Management believes that it is important to investors for the same reasons it is important to management and because it allows them to assess our operational performance on the same basis that management uses internally. |
• | Total Revenue Per Day ("Total RPD") - important to management and investors as it represents a measurement of the changes in underlying pricing in the car rental business and encompasses the elements in car rental pricing that management has the ability to control. |
• | Revenue Per Available Car Day ("RACD") - important to management and investors as it represents a measurement of the changes in underlying pricing in the car rental business and provides a measure of revenue production relative to overall capacity. |
• | Transaction Days - important to management and investors as it represents the number of revenue generating days. It is used as a component to measure Total RPD and fleet efficiency. Transaction days 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. Late in the third quarter of 2015 we fully integrated the Dollar Thrifty and Hertz counter systems and as a result aligned the transaction day calculation in the Hertz system. As a result of this alignment, we determined that there was an impact to the calculation and we estimate that transaction days for the US RAC segment will increase by approximately 1% prospectively relative to historical calculations through the third quarter of 2016. This will also prospectively impact key metrics calculations that utilize transaction days, although to a lesser extent. |
• | Fleet Efficiency - important to management and investors because it is the measurement of the proportion of our car rental fleet that is being used to generate revenues relative to the total amount of available fleet capacity. Higher fleet efficiency means more of the fleet is being utilized to generate revenue. |
• | Net Depreciation Per Unit Per Month - important to management and investors as depreciation of revenue earning equipment and lease charges, is one of our largest expenses for the car rental business and is driven by the number of vehicles, expected residual values at the time of disposal and expected hold period of the vehicles. Net depreciation per unit per month is reflective of how we are managing the costs of our fleet and facilitates a comparison with other participants in the car rental industry. |
• | Dollar Utilization - important to management and investors because it is the measurement of the proportion of our equipment rental revenue earning equipment, including additional capitalized refurbishment costs (with the basis for refurbished assets reset at the refurbishment date), that is being used to generate revenues relative to the total amount of available equipment fleet capacity. |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
• | Time Utilization - important to management and investors as it measures the extent to which the equipment rental fleet is on rent compared to total operated fleet and is an efficiency measurement utilized by participants in the equipment rental industry. |
• | Car rental revenues - revenues from all company-operated car rental operations, including charges to customers for the reimbursement of costs incurred relating to airport concession fees and vehicle license fees, the fueling of vehicles and revenues associated with ancillary products associated with car rentals, including the sale of loss or collision damage waivers, liability insurance coverage, parking and other products and fees, ancillary products associated with the retail car sales channel and certain royalty fees from our franchisees; |
• | Equipment rental revenues - revenues from all company-operated equipment rental operations, including amounts charged to customers for the fueling and delivery of equipment and sale of loss damage waivers, as well as revenues from the sale of new equipment, used revenue earning equipment, parts and supplies; and |
• | All other operations revenues - revenues from fleet leasing and fleet management services and other business activities. |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
• | Direct operating expenses (primarily wages and related benefits; commissions and concession fees paid to airport authorities, travel agents and others; facility, self-insurance and reservation costs; the cost of new equipment and consumables purchased for resale; and other costs relating to the operation and rental of revenue earning equipment, such as damage, maintenance and fuel costs); |
• | Depreciation expense and lease charges, net relating to revenue earning equipment (including net gains or losses on the disposal of such equipment). Revenue earning equipment includes cars and rental equipment; |
• | Selling, general and administrative expenses; and |
• | Interest expense, net. |
• | U.S. Car Rental - Rental of cars, crossovers and light trucks, as well as sales of ancillary products and services, in the U.S.; |
• | International Car Rental - Rental and leasing of cars, crossovers and light trucks, as well as sales of ancillary products and services, internationally; |
• | Worldwide Equipment Rental - Rental of industrial, construction, material handling and other equipment; and |
• | All Other Operations - Comprised of our Donlen business, which provides fleet leasing and fleet management services, and other business activities. |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
• | Total revenue for the U.S. Car Rental segment for the first quarter of 2016 decreased by 8% as compared to first quarter of 2015 driven by a 10% decline in Total RPD, partially offset by a 2% increase in transaction days; |
• | Net depreciation per unit per month in the U.S. Car Rental segment was up 6% to $303 from $287 for the first quarter of 2016 versus 2015; |
• | Excluding the impact of foreign currency, total revenues for our International Car Rental segment increased $23 million, or 6%, driven by a 2% increase in Total RPD, on a constant currency basis, and a 3% increase in transaction days for the first quarter of 2016 versus 2015; |
• | On a constant currency basis, net depreciation per unit per month in the International Car Rental segment was down 7% to $194 from $208 for the first quarter of 2016 versus 2015; |
• | Excluding the impact of foreign currency, Worldwide Equipment Rental segment revenues decreased 7% for the first quarter of 2016, as compared to 2015, while revenue in non-upstream oil and gas markets increased; |
• | Excluding the impact of foreign currency, depreciation of revenue earning equipment and lease charges, net for our Worldwide Equipment Rental segment increased $15 million, or 20% in first quarter of 2016 when compared with 2015; |
• | Incurred approximately $13 million during the first quarter of 2016 in costs associated with the anticipated separation of the Worldwide Equipment Rental business, versus $9 million during the first quarter of 2015; |
• | Recorded zero net impairments and asset write-downs during the first quarter of 2016 compared to $20 million during the first quarter of 2015; |
• | Recorded $8 million in finance and information technology transformation costs during the first quarter of 2016 with no comparable costs in the first quarter of 2015; |
• | Recorded $12 million in restructuring and restructuring related expenses during the first quarter of 2016 compared to $20 million during the first quarter of 2015. Included in these amounts were $4 million during the first quarter of 2016 in consulting, audit and legal costs associated with the restatement and investigation activities, as compared to $10 million during the first quarter of 2015; and |
• | In the first quarter of 2016, we sold 204 million shares of common stock of CAR Inc., a publicly traded company on the Hong Kong Stock Exchange, for net proceeds of approximately $233 million, recognizing a pre-tax gain of $75 million. |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
Three Months Ended March 31, | Percent Increase/(Decrease) | |||||||||
($ in millions) | 2016 | 2015 | ||||||||
Total revenues | $ | 2,311 | $ | 2,454 | (6 | )% | ||||
Direct operating expenses | 1,341 | 1,408 | (5 | ) | ||||||
Depreciation of revenue earning equipment and lease charges, net | 706 | 707 | — | |||||||
Selling, general and administrative expenses | 267 | 266 | — | |||||||
Interest expense, net | 157 | 154 | 2 | |||||||
Other (income) expense, net | (91 | ) | 5 | NM | ||||||
Income (loss) before income taxes | (69 | ) | (86 | ) | (20 | ) | ||||
(Provision) benefit for taxes on income (loss) | 18 | 16 | 13 | |||||||
Net income (loss) | $ | (51 | ) | $ | (70 | ) | (27 | ) | ||
Adjusted pre-tax income (loss)(a) | $ | (83 | ) | $ | 3 | NM |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
Three Months Ended March 31, | Percent Increase/(Decrease) | |||||||||
($ in millions, except as noted) | 2016 | 2015 | ||||||||
Total revenues | $ | 1,406 | $ | 1,520 | (8 | )% | ||||
Direct operating expenses | $ | 870 | $ | 926 | (6 | ) | ||||
Depreciation of revenue earning equipment and lease charges, net | $ | 419 | $ | 421 | — | |||||
Income (loss) before income taxes | $ | (22 | ) | $ | 35 | NM | ||||
Adjusted pre-tax income (loss)(a) | $ | (4 | ) | $ | 71 | NM | ||||
Transaction days (in thousands)(b) | 32,742 | 32,036 | 2 | |||||||
Total RPD (in whole dollars)(c) | $ | 42.36 | $ | 47.07 | (10 | ) | ||||
Average fleet(d) | 460,200 | 489,300 | (6 | ) | ||||||
Fleet efficiency(d) | 78 | % | 73 | % | N/A | |||||
Revenue per available car day (in whole dollars)(e) | $ | 33.12 | $ | 34.24 | (3 | ) | ||||
Net depreciation per unit per month (in whole dollars)(f) | $ | 303 | $ | 287 | 6 | |||||
Program cars as a percentage of average fleet at period end | 15 | % | 24 | % | N/A |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
• | Fleet related expenses decreased $21 million year over year primarily due to: |
◦ | Decreased collision and short term maintenance expense of $8 million driven primarily by process improvements leading to increased customer collections on damage claims; |
◦ | Decreased maintenance costs of $6 million due primarily to a reduction in the average age and size of the fleet, thus requiring less maintenance as compared to 2015 and improved pricing through parts and supplier sourcing; and |
◦ | Decreased other vehicle operating costs of $4 million due to a lower average fleet and a decrease in theft related expenses. |
• | Personnel related expenses decreased $18 million from the first quarter of 2015 primarily due to centralization of workforce management and improved scheduling tools delivering improved productivity. |
• | Other direct operating expenses decreased $17 million from the first quarter of 2015 primarily due to decreased fuel costs of $8 million due to lower market fuel pricing and decreased transaction variable costs of $13 million resulting from reduced revenues, partially offset by a $5 million increase in non-fleet depreciation expense due to the acceleration of depreciation at one of our airport locations. |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
Three Months Ended March 31, | Percent Increase/(Decrease) | |||||||||
($ in millions, except as noted) | 2016 | 2015 | ||||||||
Total revenues | $ | 433 | $ | 436 | (1 | )% | ||||
Direct operating expenses | $ | 279 | $ | 267 | 4 | |||||
Depreciation of revenue earning equipment and lease charges, net | $ | 86 | $ | 95 | (9 | ) | ||||
Income (loss) before income taxes | $ | (1 | ) | $ | 2 | NM | ||||
Adjusted pre-tax income (loss)(a) | $ | 3 | $ | 8 | (63 | ) | ||||
Transaction days (in thousands)(b) | 10,104 | 9,775 | 3 | |||||||
Total RPD (in whole dollars)(c) | $ | 42.95 | $ | 42.25 | 2 | |||||
Average fleet(d) | 148,100 | 144,000 | 3 | |||||||
Fleet efficiency(d) | 75 | % | 75 | % | N/A | |||||
Revenue per available car day (in whole dollars)(e) | $ | 32.20 | $ | 31.87 | 1 | |||||
Net depreciation per unit per month (in whole dollars)(f) | $ | 194 | $ | 208 | (7 | ) | ||||
Program cars as a percentage of average fleet at period end | 37 | % | 38 | % | N/A |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
Three Months Ended March 31, | Percent Increase/(Decrease) | |||||||||
($ in millions) | 2016 | 2015 | ||||||||
Total revenues | $ | 328 | $ | 355 | (8 | )% | ||||
Direct operating expenses | $ | 184 | $ | 208 | (12 | ) | ||||
Depreciation of revenue earning equipment and lease charges, net | $ | 90 | $ | 76 | 18 | |||||
Income (loss) before income taxes | $ | — | $ | 11 | NM | |||||
Adjusted pre-tax income (loss)(a) | $ | 12 | $ | 33 | (64 | ) | ||||
Dollar utilization(g) | 33 | % | 34 | % | N/A | |||||
Time utilization(h) | 60 | % | 61 | % | N/A | |||||
Rental and rental related revenue(i) | $ | 308 | $ | 325 | (5 | ) | ||||
Same store revenue growth(j) | (1 | )% | 1 | % | N/A |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
Three Months Ended March 31, | Percent Increase/(Decrease) | |||||||||
($ in millions) | 2016 | 2015 | ||||||||
Total revenues | $ | 144 | $ | 143 | 1 | % | ||||
Direct operating expenses | $ | 5 | $ | 6 | (17 | ) | ||||
Depreciation of revenue earning equipment and lease charges, net | $ | 111 | $ | 115 | (3 | ) | ||||
Income (loss) before income taxes | $ | 15 | $ | 12 | 25 | |||||
Adjusted pre-tax income (loss)(a) | $ | 18 | $ | 16 | 13 | |||||
Average Fleet - Donlen | 162,300 | 168,600 | (4 | ) |
(a) | Adjusted pre-tax income (loss) is a Non-GAAP measure that is calculated as income (loss) before income taxes plus certain non-cash purchase accounting charges, debt-related charges relating to the amortization and write-off of debt financing costs and debt discounts and certain one-time charges and nonoperational items. Adjusted pre-tax income (loss) is important to management because it allows management to assess operational performance of our business, exclusive of the items mentioned above. It also allows management to assess the performance of the entire business on the same basis as the segment measure of profitability. Management believes that it is important to investors for the same reasons it is important to management and because it allows them to assess our operational performance on the same basis that management uses internally. When evaluating our operating performance, investors should not consider adjusted pre-tax income (loss) in isolation of, or as a substitute for, measures of our financial performance, such as net income (loss) or income (loss) before income tax. The contribution of our reportable segments to adjusted pre-tax income and reconciliation to the most comparable consolidated GAAP measure are presented below: |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
Three Months Ended March 31, | |||||||
(In millions) | 2016 | 2015 | |||||
Adjusted pre-tax income (loss): | |||||||
U.S. car rental | $ | (4 | ) | $ | 71 | ||
International car rental | 3 | 8 | |||||
Worldwide equipment rental | 12 | 33 | |||||
All other operations | 18 | 16 | |||||
Total reportable segments | 29 | 128 | |||||
Corporate(1) | (112 | ) | (125 | ) | |||
Consolidated adjusted pre-tax income (loss) | (83 | ) | 3 | ||||
Adjustments: | |||||||
Acquisition accounting(2) | (18 | ) | (31 | ) | |||
Debt-related charges(3) | (15 | ) | (16 | ) | |||
Restructuring and restructuring related charges(4) | (12 | ) | (20 | ) | |||
Equipment rental spin-off costs(5) | (13 | ) | (9 | ) | |||
Sale of CAR Inc. common stock(6) | 75 | — | |||||
Impairment charges and asset write-downs(7) | — | (9 | ) | ||||
Finance and information technology transformation costs(8) | (8 | ) | — | ||||
Other(9) | 5 | (4 | ) | ||||
Income (loss) before income taxes | $ | (69 | ) | $ | (86 | ) |
(1) | Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities. |
(2) | Represents incremental expense associated with amortization of other intangible assets, depreciation of property and other equipment and accretion of revalued liabilities relating to acquisition accounting. |
(3) | Represents debt-related charges relating to the amortization of deferred debt financing costs and debt discounts and premiums. |
(4) | Represents expenses incurred under restructuring actions as defined in U.S. GAAP. For further information on restructuring costs, see Note 8, "Restructuring." Also represents incremental costs incurred directly supporting business transformation initiatives. Such costs include transition costs incurred in connection with business process outsourcing arrangements and incremental costs incurred to facilitate business process re-engineering initiatives that involve significant organization redesign and extensive operational process changes. Also includes consulting costs and legal fees related to the accounting review and investigation. |
(5) | Represents expenses associated with the anticipated HERC spin-off transaction announced in March 2014. In 2016, $9 million were incurred by HERC and $4 million by Corporate. In 2015, $9 million were incurred by HERC. |
(6) | Represents the pre-tax gain on the sale of CAR Inc. common stock. |
(7) | In 2015, primarily represents a $6 million impairment on the former Dollar Thrifty headquarters in Tulsa, Oklahoma. |
(8) | Represents external costs associated with the Company’s finance and information technology transformation programs, both of which are multi-year initiatives to upgrade and modernize the Company’s systems and processes. |
(9) | Includes miscellaneous non-recurring items including but not limited to acquisition charges, integration charges, and other non-cash items. In 2016, also includes a settlement gain related to one of our U.S. airport locations and, in 2015, also includes charges incurred in connection with relocating the Company's corporate headquarters to Estero, Florida. |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
(b) | Transaction days 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. Late in the third quarter of 2015 the Company fully integrated the Dollar Thrifty and Hertz counter systems and as a result aligned the transaction day calculation in the Hertz system. As a result of this alignment, Hertz determined that there was an impact to the calculation. Hertz expects that transaction days for the U.S. Car Rental segment will increase by approximately 1% prospectively relative to the historic calculations through the third quarter of 2016. |
(c) | Total RPD is a Non-GAAP measure that is calculated as total revenue less ancillary retail car sales revenue, divided by the total number of transaction days, with all periods adjusted to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is useful in analyzing underlying trends. This statistic is important to our management and investors as it represents a measurement of the changes in underlying pricing in the car rental business and encompasses the elements in car rental pricing that management has the ability to control. |
U.S. car rental segment | International car rental segment | ||||||||||||||
Three Months Ended March 31, | |||||||||||||||
($ in millions, except as noted) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Revenues | $ | 1,406 | $ | 1,520 | $ | 433 | $ | 436 | |||||||
Ancillary retail car sales revenue | (19 | ) | (12 | ) | — | — | |||||||||
Foreign currency adjustment | — | — | 1 | (23 | ) | ||||||||||
Total rental revenue | $ | 1,387 | $ | 1,508 | $ | 434 | $ | 413 | |||||||
Transaction days (in thousands) | 32,742 | 32,036 | 10,104 | 9,775 | |||||||||||
Total RPD (in whole dollars) | $ | 42.36 | $ | 47.07 | $ | 42.95 | $ | 42.25 |
(d) | Average fleet is determined using a simple average of the number of vehicles at the beginning and end of a given period. Among other things, average fleet is used to calculate our fleet efficiency which represents the portion of the Company's fleet that is being utilized to generate revenue. Fleet efficiency is calculated by dividing total transaction days by available car days. |
U.S. car rental segment | International car rental segment | ||||||||||
Three Months Ended March 31, | |||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Transaction days (in thousands) | 32,742 | 32,036 | 10,104 | 9,775 | |||||||
Average fleet | 460,200 | 489,300 | 148,100 | 144,000 | |||||||
Number of days in period | 91 | 90 | 91 | 90 | |||||||
Available car days (in thousands) | 41,878 | 44,037 | 13,477 | 12,960 | |||||||
Fleet efficiency | 78 | % | 73 | % | 75 | % | 75 | % |
(e) | Revenue per available car day is calculated as total revenues less ancillary retail car sales revenue, divided by available car days, with all periods adjusted to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends. This metric is important to our management and investors as it represents a measurement of the changes in underlying pricing in the car rental business and provides a measure of revenue production relative to overall capacity. |
U.S. car rental segment | International car rental segment | ||||||||||||||
Three Months Ended March 31, | |||||||||||||||
($ in millions, except as noted) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Total rental revenue | $ | 1,387 | $ | 1,508 | $ | 434 | $ | 413 | |||||||
Available car days (in thousands) | 41,878 | 44,037 | 13,477 | 12,960 | |||||||||||
Revenue per available car day (in whole dollars) | $ | 33.12 | $ | 34.24 | $ | 32.20 | $ | 31.87 |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
(f) | Net depreciation per unit per month is a non-GAAP measure that is calculated by dividing depreciation of revenue earning equipment and lease charges, net by the average fleet in each period and then dividing by the number of months in the period reported, with all periods adjusted to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is useful in analyzing underlying trends. Net depreciation per unit per month represents the amount of average depreciation expense and lease charges, net per vehicle per month. The tables below reconcile this non-GAAP measure to its most comparable GAAP measure, which is depreciation of revenue earning equipment and lease charges, net, (based on December 31, 2015 foreign exchange rates) for the periods shown: |
U.S. car rental segment | International car rental segment | ||||||||||||||
Three Months Ended March 31, | |||||||||||||||
($ in millions, except as noted) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Depreciation of revenue earning equipment and lease charges | $ | 419 | $ | 421 | $ | 86 | $ | 95 | |||||||
Foreign currency adjustment | — | — | — | (5 | ) | ||||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net | $ | 419 | $ | 421 | $ | 86 | $ | 90 | |||||||
Average Fleet | 460,200 | 489,300 | 148,100 | 144,000 | |||||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet (in whole dollars) | $ | 910 | $ | 860 | $ | 581 | $ | 625 | |||||||
Number of months in period | 3 | 3 | 3 | 3 | |||||||||||
Net depreciation per unit per month (in whole dollars) | $ | 303 | $ | 287 | $ | 194 | $ | 208 |
(g) | Dollar utilization means revenue derived from the rental of equipment divided by the original cost of the equipment including additional capitalized refurbishment costs (with the basis of refurbished assets reset at the refurbishment date). |
(h) | Time Utilization means the percentage of time an equipment unit is on-rent during a given period. |
(i) | Worldwide equipment rental and rental related revenue is a Non-GAAP measure that consists of all revenue, net of discounts, associated with the rental of equipment including charges for delivery, loss damage waivers and fueling, but excluding revenue arising from the sale of equipment, parts and supplies and certain other ancillary revenue. Rental and rental related revenue is adjusted in all periods to eliminate the effect of fluctuations in foreign currency (based on December 31, 2015 foreign exchange rates). Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends. This statistic is important to our management and investors as it reflects time and mileage and ancillary charges for equipment on rent and is comparable with the reporting of other industry participants. The following table reconciles our worldwide equipment rental segment revenues, the most comparable GAAP measure, to our worldwide equipment rental and rental related revenue (based on the elements in car rental pricing that management has the ability to control). |
Three Months Ended March 31, | |||||||
($ in millions) | 2016 | 2015 | |||||
Worldwide Equipment Rental segment revenues | $ | 328 | $ | 355 | |||
Equipment sales and other revenue | (20 | ) | (23 | ) | |||
Rental and rental related revenue at actual rates | 308 | 332 | |||||
Foreign currency adjustment | — | (7 | ) | ||||
Rental and rental related revenue | $ | 308 | $ | 325 |
(j) | Same-store revenue growth is calculated as the year over year change in revenue for locations that are open at the end of the period reported and have been operating under our direction for more than twelve months. The same-store revenue amounts are adjusted in all periods to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends. |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
Three Months Ended March 31, | |||||||||||
(In millions) | 2016 | 2015 | $ Change | ||||||||
Cash provided by (used in): | |||||||||||
Operating activities | $ | 577 | $ | 782 | $ | (205 | ) | ||||
Investing activities | (417 | ) | (1,166 | ) | 749 | ||||||
Financing activities | 199 | 499 | (300 | ) | |||||||
Effect of exchange rate changes | 12 | (20 | ) | 32 | |||||||
Net change in cash and cash equivalents | $ | 371 | $ | 95 | $ | 276 |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
(In millions) | Remaining Capacity | Availability Under Borrowing Base Limitation | |||||
Corporate Debt | |||||||
Senior ABL Facility | $ | 1,488 | $ | 1,481 | |||
Total Corporate Debt | 1,488 | 1,481 | |||||
Fleet Debt | |||||||
HVF II U.S. Fleet Variable Funding Notes | 2,125 | — | |||||
HFLF Variable Funding Notes | 50 | — | |||||
European Revolving Credit Facility | — | — | |||||
European Securitization | 192 | 4 | |||||
Canadian Securitization | 99 | — | |||||
Australian Securitization | 94 | — | |||||
Capitalized Leases | 50 | 1 | |||||
Total Fleet Debt | 2,610 | 5 | |||||
Total | $ | 4,098 | $ | 1,486 |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
Revenue Earning Equipment | Capital Assets, Non-Fleet | |||||||||||||||||||||||
Cash inflow (cash outflow)(In millions) | Capital Expenditures | Disposal Proceeds | Net Capital Expenditures | Capital Expenditures | Disposal Proceeds | Net Capital Expenditures | ||||||||||||||||||
2016 | ||||||||||||||||||||||||
First Quarter | $ | (3,627 | ) | $ | 3,010 | $ | (617 | ) | $ | (53 | ) | $ | 22 | $ | (31 | ) | ||||||||
2015 | ||||||||||||||||||||||||
First Quarter | $ | (3,438 | ) | $ | 2,289 | $ | (1,149 | ) | $ | (97 | ) | $ | 22 | $ | (75 | ) |
Three Months Ended March 31, | ||||||||||||||
(In millions) | 2016 | 2015 | $ Change | % Change | ||||||||||
Revenue earning equipment expenditures, net | ||||||||||||||
U.S. car rental | $ | (583 | ) | $ | (1,075 | ) | $ | 492 | (46 | )% | ||||
International car rental | 75 | 142 | (67 | ) | (47 | ) | ||||||||
Worldwide equipment rental | 6 | (59 | ) | 65 | (110 | ) | ||||||||
All other operations | (115 | ) | (157 | ) | 42 | (27 | ) | |||||||
Total | $ | (617 | ) | $ | (1,149 | ) | $ | 532 | (46 | ) |
Three Months Ended March 31, | ||||||||||||||
(In millions) | 2016 | 2015 | $ Change | % Change | ||||||||||
Capital asset expenditures, non-fleet, net | ||||||||||||||
U.S. car rental | $ | (11 | ) | $ | (2 | ) | $ | (9 | ) | 450 | % | |||
International car rental | (4 | ) | (11 | ) | 7 | (64 | ) | |||||||
Worldwide equipment rental | (4 | ) | (27 | ) | 23 | (85 | ) | |||||||
All other operations | (1 | ) | (1 | ) | — | — | ||||||||
Corporate | (11 | ) | (34 | ) | 23 | (68 | ) | |||||||
Total | $ | (31 | ) | $ | (75 | ) | $ | 44 | (59 | ) |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
• | any claims, investigations or proceedings arising as a result of the restatement of our previously issued financial results; |
• | our ability to remediate the material weaknesses in our internal controls over financial reporting described in Item 9A of our Form 10-K/A filed on March 4, 2016; |
• | the effect of our proposed separation of HERC and ability to obtain the expected benefits of any related transaction; |
• | levels of travel demand, particularly with respect to airline passenger traffic in the United States and in global markets; |
• | significant changes in the competitive environment, including as a result of industry consolidation, and the effect of competition in our markets on rental volume and pricing, including on our pricing policies or use of incentives; |
• | an increase in our fleet costs as a result of an increase in the cost of new vehicles and/or a decrease in the price at which we dispose of used vehicles either in the used vehicle market or under repurchase or guaranteed depreciation programs; |
• | occurrences that disrupt rental activity during our peak periods; |
• | our ability to achieve and maintain cost savings and efficiencies and realize opportunities to increase productivity and profitability; |
• | our ability to accurately estimate future levels of rental activity and adjust the size and mix of our fleet accordingly; |
• | our ability to maintain sufficient liquidity and the availability to us of additional or continued sources of financing for our revenue earning equipment and to refinance our existing indebtedness; |
• | our ability to realize the operational efficiencies of the acquisition of the car rental operations of Dollar Thrifty; |
• | our ability to maintain access to third-party distribution channels, including current or favorable prices, commission structures and transaction volumes; |
• | an increase in our fleet costs or disruption to our rental activity, particularly during our peak periods, due to safety recalls by the manufacturers of our vehicles and equipment; |
• | changes to our senior management team; |
ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) |
• | a major disruption in our communication or centralized information networks; |
• | financial instability of the manufacturers of our vehicles and equipment, which could impact their ability to perform under agreements with us and/or their willingness or ability to make cars available to us or the car rental industry on commercially reasonable terms; |
• | any impact on us from the actions of our franchisees, dealers and independent contractors; |
• | our ability to maintain profitability 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; |
• | our ability to successfully integrate acquisitions and complete dispositions; |
• | our ability to maintain favorable brand recognition; |
• | costs and risks associated with litigation and investigations; |
• | risks related to our indebtedness, including our substantial amount of debt, our ability to incur substantially more debt and increases in interest rates or in our borrowing margins; |
• | our ability to meet the financial and other covenants contained in our Senior Credit Facilities, our outstanding unsecured Senior Notes and certain asset-backed and asset-based arrangements; |
• | changes in accounting principles, or their application or interpretation, and our ability to make accurate estimates and the assumptions underlying the estimates, which could have an effect on earnings; |
• | our ability to successfully outsource a significant portion of our information technology services or other activities; |
• | 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 our operations, the cost thereof or applicable tax rates; |
• | the effect of tangible and intangible asset impairment charges; |
• | our exposure to uninsured claims in excess of historical levels; |
• | fluctuations in interest rates and commodity prices; |
• | our exposure to fluctuations in foreign exchange rates; and |
• | other risks described from time to time in periodic and current reports that we file with the SEC. |
(a) | Exhibits: |
Date: | May 9, 2016 | HERTZ GLOBAL HOLDINGS, INC. (Registrant) | |
By: | /s/ THOMAS C. KENNEDY | ||
Thomas C. Kennedy Senior Executive Vice President and Chief Financial Officer |
Exhibit Number | Description |
4.12.12 | Series 2016-1 Supplement, dated as of February 11, 2016, among Hertz Vehicle Financing II LP, as Issuer, The Hertz Corporation, as Group I Administrator, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to the Amended and Restated Group I Supplement, dated as of October 31, 2014, between Hertz Vehicle Financing II LP, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to the Base Indenture, dated as of October 31, 2014, between Hertz Vehicle Financing II LP, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-33139) and The Hertz Corporation (File No. 001-07541), as filed on February 18, 2016). |
4.12.13 | Series 2016-2 Supplement, dated as of February 11, 2016, among Hertz Vehicle Financing II LP, as Issuer, The Hertz Corporation, as Group I Administrator, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to the Amended and Restated Group I Supplement, dated as of October 31, 2014, between Hertz Vehicle Financing II LP, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to the Base Indenture, dated as of October 31, 2014, between Hertz Vehicle Financing II LP, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-33139) and The Hertz Corporation (File No. 001-07541), as filed on February 18, 2016). |
10.5.18 | Form of Employee Stock Option Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (form used for agreements entered into after January 1, 2016)* |
10.5.19 | Form of Restricted Stock Unit Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (form used for awards in 2016)* |
10.5.20 | Form of Performance Stock Unit Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (form used for Adjusted Corporate EBITDA awards in 2016)* |
10.5.21 | Form of Performance Stock Unit Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (form used for HERC Adjusted Corporate EBITDA awards in 2016)* |
10.5.22 | Form of Performance Stock Unit Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (form used for EBITDA margin awards in 2016)* |
10.5.23 | Form of Performance Stock Unit Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (form used for NPS awards in 2016)* |
31.1–31.2 | Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer* |
32.1–32.2 | 18 U.S.C. Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer* |
101.INS | XBRL Instance Document* |
101.SCH | XBRL Taxonomy Extension Schema Document* |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document* |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document* |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document* |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document* |
One Year Performance Period: | January 1, 2016 through December 31, 2016 | |||
One Year Performance Criteria: | 2016 Corporate EBITDA* | |||
Two Year Performance Period: | January 1, 2016 through December 31, 2017 | |||
Two Year Performance Criteria: | 2016 & 2017 Corporate EBITDA* | |||
Three Year Performance Period: | January 1, 2016 through December 31, 2018 | |||
Three Year Performance Criteria: | 2016, 2017 & 2018 Corporate EBITDA* | |||
One Year Performance Determination. Based on the One Year Performance Period and One Year Performance Criteria, the “One Year Adjustment Percentage” shall equal 25% multiplied by the One Year Multiplier below: | ||||
Description ($MM) | One Year Multiplier | |||
Threshold | $ | 50% | ||
Target | $ | 100% | ||
Two Year Performance Determination. Based on the Two Year Performance Period and Two Year Performance Criteria, the “Two Year Adjustment Percentage” shall equal 50% multiplied by the Two Year Multiplier below (provided, however, that the Two Year Adjustment Percentage shall in no event be lower than the One Year Adjustment Percentage): | ||||
Description ($MM) | Two Year Multiplier | |||
Threshold | $ | 50% | ||
Target | $ | 100% | ||
Three Year Performance Determination. Based on the Three Year Performance Period and Three Year Performance Criteria, the “Final Target Adjustment Percentage” shall equal the Three Year Multiplier below (provided, however, that the Final Target Adjustment Percentage shall in no event be lower than the Two Year Adjustment Percentage; provided, further, that the Committee may, at the time of certification, reduce the Final Target Adjustment Percentage to such percentage as the Committee may determine in its sole discretion): | ||||
Description ($MM) | Three Year Multiplier | |||
Threshold | $ | 50% | ||
Target | $ | 100% | ||
Maximum | $ | 150% |
One Year Performance Period: | January 1, 2016 through December 31, 2016 | |||
One Year Performance Criteria: | 2016 HERC EBITDA* | |||
Two Year Performance Period: | January 1, 2016 through December 31, 2017 | |||
Two Year Performance Criteria: | 2016 & 2017 HERC EBITDA* | |||
Three Year Performance Period: | January 1, 2016 through December 31, 2018 | |||
Three Year Performance Criteria: | 2016, 2017 & 2018 HERC EBITDA* | |||
One Year Performance Determination. Based on the One Year Performance Period and One Year Performance Criteria, the “One Year Adjustment Percentage” shall equal 25% multiplied by the One Year Multiplier below: | ||||
Description ($MM) | One Year Multiplier | |||
Threshold | $ | 50% | ||
Target | $ | 100% | ||
Two Year Performance Determination. Based on the Two Year Performance Period and Two Year Performance Criteria, the “Two Year Adjustment Percentage” shall equal 50% multiplied by the Two Year Multiplier below (provided, however, that the Two Year Adjustment Percentage shall in no event be lower than the One Year Adjustment Percentage): | ||||
Description ($MM) | Two Year Multiplier | |||
Threshold | $ | 50% | ||
Target | $ | 100% | ||
Three Year Performance Determination. Based on the Three Year Performance Period and Three Year Performance Criteria, the “Final Target Adjustment Percentage” shall equal the Three Year Multiplier below (provided, however, that the Final Target Adjustment Percentage shall in no event be lower than the Two Year Adjustment Percentage; provided, further, that the Committee may, at the time of certification, reduce the Final Target Adjustment Percentage to such percentage as the Committee may determine in its sole discretion): | ||||
Description ($MM) | Three Year Multiplier | |||
Threshold | $ | 50% | ||
Target | $ | 100% | ||
Maximum | $ | 150% |
One Year Performance Period: | January 1, 2016 through December 31, 2016 | |||
One Year Performance Criteria: | 2016 Hertz EBITDA Margin* versus 2016 Avis EBITDA Margin** | |||
Two Year Performance Period: | January 1, 2016 through December 31, 2017 | |||
Two Year Performance Criteria: | Average of 2016 & 2017 Hertz EBITDA Margin* versus average of 2016 & 2017 Avis EBITDA Margin** | |||
Three Year Performance Period: | January 1, 2016 through December 31, 2018 | |||
Three Year Performance Criteria: | Average of 2016, 2017 & 2018 Hertz EBITDA Margin* versus average of 2016, 2017 & 2018 Avis EBITDA Margin** | |||
One Year Performance Determination. Based on the One Year Performance Period and One Year Performance Criteria, the “One Year Adjustment Percentage” shall equal 25% multiplied by the One Year Multiplier below: | ||||
Description | One Year Multiplier | |||
Threshold | Less than by basis points | 50% | ||
Target | Exceeds by basis points | 100% | ||
Two Year Performance Determination. Based on the Two Year Performance Period and Two Year Performance Criteria, the “Two Year Adjustment Percentage” shall equal 50% multiplied by the Two Year Multiplier below (provided, however, that the Two Year Adjustment Percentage shall in no event be lower than the One Year Adjustment Percentage): | ||||
Description | Two Year Multiplier | |||
Threshold | Less than by basis points | 50% | ||
Target | Exceeds by basis points | 100% | ||
Three Year Performance Determination. Based on the Three Year Performance Period and Three Year Performance Criteria, the “Final Target Adjustment Percentage” shall equal the Three Year Multiplier below (provided, however, that the Final Target Adjustment Percentage shall in no event be lower than the Two Year Adjustment Percentage; provided, further, that the Committee may, at the time of certification, reduce the Final Target Adjustment Percentage to such percentage as the Committee may determine in its sole discretion): | ||||
Description | Three Year Multiplier | |||
Threshold | Less than by basis points | 50% | ||
Target | Exceeds by basis points | 100% | ||
Maximum | Exceeds by basis points | 150% |
One Year Performance Period: | January 1, 2016 through December 31, 2016 | |||
One Year Performance Criteria: | Hertz EBITDA Margin Improvement* versus Custom Index EBITDA Margin Improvement** | |||
Two Year Performance Period: | January 1, 2016 through December 31, 2017 | |||
Two Year Performance Criteria: | Hertz EBITDA Margin Improvement* versus Custom Index EBITDA Margin Improvement** | |||
Three Year Performance Period: | January 1, 2016 through December 31, 2018 | |||
Three Year Performance Criteria: | Hertz EBITDA Margin Improvement* versus Custom Index EBITDA Margin Improvement** | |||
One Year Performance Determination. Based on the One Year Performance Period and One Year Performance Criteria, the “One Year Adjustment Percentage” shall equal 25% multiplied by the One Year Multiplier below (provided, however, that the One Year Adjustment Percentage shall be determined as provided under Exhibit A if the Material Avis Business Change Event occurs after the One Year Performance Period and does not affect the One Year Performance Determination under Exhibit A): | ||||
Description | One Year Multiplier | |||
Threshold | [Equals] | 50% | ||
Target | Exceeds by basis points | 100% | ||
Two Year Performance Determination. Based on the Two Year Performance Period and Two Year Performance Criteria, the “Two Year Adjustment Percentage” shall equal 50% multiplied by the Two Year Multiplier below (provided, however, that the Two Year Adjustment Percentage shall in no event be lower than the One Year Adjustment Percentage; provided, further, that the Two Year Adjustment Percentage shall be determined as provided under Exhibit A if the Material Avis Business Change Event occurs after the Two Year Performance Period and does not affect the Two Year Performance Determination under Exhibit A): | ||||
Description | Two Year Multiplier | |||
Threshold | [Equals] | 50% | ||
Target | Exceeds by basis points | 100% | ||
Three Year Performance Determination. Based on the Three Year Performance Period and Three Year Performance Criteria, the “Final Target Adjustment Percentage” shall equal the Three Year Multiplier below (provided, however, that the Final Target Adjustment Percentage shall in no event be lower than the Two Year Adjustment Percentage; provided, further, that the Committee may, at the time of certification, reduce the Final Target Adjustment Percentage to such percentage as the Committee may determine in its sole discretion): | ||||
Description | Three Year Multiplier | |||
Threshold | [Equals] | 50% | ||
Target | Exceeds by basis points | 100% | ||
Maximum | Exceeds by basis points | 150% |
• | the Hertz EBITDA Margin Average refers to (x) the sum of the Hertz EBITDA Margins for each year in the Performance Period divided by (y) the number of years in the Performance Period; and |
• | Hertz EBITDA Margin has the same meaning as provided in Exhibit A. |
• | the Custom Index EBITDA Margin Average refers to (x) the sum of the Custom Index Company EBITDA Margins for each year in the Performance Period divided by (y) the number of years in the Performance Period, and further divided by (z) the number of Custom Index Companies; |
• | the Base Custom Index EBITDA Margin Average refers to (x) the sum of the Custom Index Company EBITDA Margins for the period from January 1, 2015 through December 31, 2015 divided by (y) the number of Custom Index Companies; |
• | the Custom Index Company EBITDA Margin generally refers, for each Custom Index Company, the ratio of Adjusted Corporate EBITDA (or such equivalent term used by the Custom Index Company) to total revenues, calculated using the methodology utilized by such Custom Index Company in its most recent public disclosure prior to the date of this Agreement; and |
• | Custom Index Companies includes the following companies: |
◦ | United Continental Holdings, Inc. |
◦ | Delta Air Lines, Inc. |
◦ | American Airlines Group Inc. |
◦ | Southwest Airlines Co. |
◦ | Marriott International, Inc. |
◦ | Hilton Worldwide Holdings Inc. |
One Year EBITDA Performance Period: | January 1, 2016 through December 31, 2016 |
One Year EBITDA Performance Criteria: | 2016 Corporate EBITDA* |
First Year NPS Performance Period: | January 1, 2016 through December 31, 2016 |
First Year NPS Performance Criteria: | 2016 Hertz Elite Customer NPS** versus 2015 Hertz Elite Customer NPS** |
---------------------------------------- | |
Two Year EBITDA Performance Period: | January 1, 2016 through December 31, 2017 |
Two Year EBITDA Performance Criteria: | 2016 & 2017 Corporate EBITDA* |
Second Year NPS Performance Period: | January 1, 2017 through December 31, 2017 |
Second Year NPS Performance Criteria: | 2017 Hertz Elite Customer NPS** versus 2015 Hertz Elite Customer NPS** |
---------------------------------------- | |
Three Year EBITDA Performance Period: | January 1, 2016 through December 31, 2018 |
Three Year EBITDA Performance Criteria: | 2016, 2017 & 2018 Corporate EBITDA* |
Third Year NPS Performance Period: | January 1, 2018 through December 31, 2018 |
Third Year NPS Performance Criteria: | 2018 Hertz Elite Customer NPS** versus 2015 Hertz Elite Customer NPS** |
First Year Adjustment Percentage Determination. | ||
EBITDA Determination. To the extent the One Year EBITDA Performance Criteria equals or exceeds the EBITDA Threshold below for the One Year EBITDA Performance Period, the “First Year Adjustment Percentage” shall be determined as in the following paragraph regarding NPS Determination. To the extent the One Year EBITDA Performance Criteria is less than the EBITDA Threshold below for the One Year EBITDA Performance Period, the “First Year Adjustment Percentage” shall equal 0%, and the following paragraph regarding NPS Determination shall otherwise have no applicability. | ||
Description ($MM) | ||
EBITDA Threshold $ | ||
NPS Determination (if applicable). Based on the First Year NPS Performance Period and First Year NPS Performance Criteria, and subject to the prior paragraph, the “First Year Adjustment Percentage” shall equal 25% multiplied by the First Year Multiplier below: | ||
Description | First Year Multiplier | |
NPS Threshold | Increased by | 50% |
NPS Target | Increased by | 100% |
Second Year Adjustment Percentage Determination. | ||
EBITDA Determination. To the extent the Two Year EBITDA Performance Criteria equals or exceeds the EBITDA Threshold below for the Two Year EBITDA Performance Period, the “Second Year Adjustment Percentage” shall be determined as in the following paragraph regarding NPS Determination. To the extent the Two Year EBITDA Performance Criteria is less than the EBITDA Threshold below for the Two Year EBITDA Performance Period, the “Second Year Adjustment Percentage” shall equal the First Year Adjustment Percentage, and the following paragraph regarding NPS Determination shall otherwise have no applicability. | ||
Description ($MM) | ||
EBITDA Threshold $ | ||
NPS Determination (if applicable). Based on the Second Year NPS Performance Period and Second Year NPS Performance Criteria, and subject to the prior paragraph, the “Second Year Adjustment Percentage” shall equal 50% multiplied by the Second Year Multiplier below (provided, however, that the Second Year Adjustment Percentage shall in no event be lower than the First Year Adjustment Percentage): | ||
Description | Second Year Multiplier | |
Threshold | Increased by | 50% |
Target | Increased by | 100% |
Final Adjustment Percentage Determination. | ||
EBITDA Determination. To the extent the Three Year EBITDA Performance Criteria equals or exceeds the EBITDA Threshold below for the Three Year EBITDA Performance Period, the “Final Target Adjustment Percentage” shall be determined as in the following paragraph regarding NPS Determination. To the extent the Three Year EBITDA Performance Criteria is less than the EBITDA Threshold below for the Three Year EBITDA Performance Period, the “Final Target Adjustment Percentage” shall equal the Second Year Adjustment Percentage (provided, however, that the Committee may, at the time of certification, reduce the Final Target Adjustment Percentage to such percentage as the Committee may determine in its sole discretion), and the following paragraph regarding NPS Determination shall otherwise have no applicability. | ||
Description ($MM) | ||
EBITDA Threshold $ | ||
NPS Determination (if applicable). Based on the Third Year NPS Performance Period and Third Year NPS Performance Criteria, and subject to the prior paragraph, the “Final Target Adjustment Percentage” shall equal the Third Year Multiplier below (provided, however, that the Final Target Adjustment Percentage shall in no event be lower than the Second Year Adjustment Percentage; provided, further, that the Committee may, at the time of certification, reduce the Final Target Adjustment Percentage to such percentage as the Committee may determine in its sole discretion): | ||
Description | Third Year Multiplier | |
Threshold | Increased by | 50% |
Target | Increased by | 100% |
1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2016 of Hertz Global Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 9, 2016 | |||
By: | /s/ JOHN P. TAGUE | |||
John P. Tague Chief Executive Officer and Director |
1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2016 of Hertz Global Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 9, 2016 | |||
By: | /s/ THOMAS C. KENNEDY | |||
Thomas C. Kennedy Senior Executive Vice President and Chief Financial Officer |
(1) | the Report, to which this statement is furnished as an Exhibit, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 9, 2016 | |||
By: | /s/ JOHN P. TAGUE | |||
John P. Tague Chief Executive Officer and Director |
(1) | the Report, to which this statement is furnished as an Exhibit, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 9, 2016 | |||
By: | /s/ THOMAS C. KENNEDY | |||
Thomas C. Kennedy Senior Executive Vice President and Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
May. 02, 2016 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | HERTZ GLOBAL HOLDINGS INC | |
Entity Central Index Key | 0001364479 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 424,418,102 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 70 | $ 60 |
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 200,000,000 | 200,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common Stock, shares issued | 465,000,000 | 464,000,000 |
Common Stock, shares outstanding | 424,000,000 | 423,000,000 |
Treasury Stock, shares repurchased | 41,000,000 | 41,000,000 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Revenues: | ||
Worldwide car rental | $ 1,839 | $ 1,956 |
Worldwide equipment rental | 328 | 355 |
All other operations | 144 | 143 |
Total revenues | 2,311 | 2,454 |
Expenses: | ||
Direct operating | 1,341 | 1,408 |
Depreciation of revenue earning equipment and lease charges, net | 706 | 707 |
Selling, general and administrative | 267 | 266 |
Interest expense, net | 157 | 154 |
Other (income) expense, net | (91) | 5 |
Total expenses | 2,380 | 2,540 |
Income (loss) before income taxes | (69) | (86) |
(Provision) benefit for taxes on income (loss) | 18 | 16 |
Net income (loss) | $ (51) | $ (70) |
Weighted average shares outstanding: | ||
Basic (in shares) | 424 | 459 |
Diluted (in shares) | 424 | 459 |
Earnings (loss) per share: | ||
Basic (in dollars per share) | $ (0.12) | $ (0.15) |
Diluted (in dollars per share) | $ (0.12) | $ (0.15) |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (51) | $ (70) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 36 | (48) |
Unrealized holding gains (losses) on securities | 17 | 0 |
Reclassification from other comprehensive income (loss) to selling, general and administrative expense for amortization of actuarial (gains) losses on defined benefit pension plans | 2 | 2 |
Total other comprehensive income (loss) before income taxes | 55 | (46) |
Income tax (provision) benefit related to reclassified amounts of net periodic costs on defined benefit pension plans | (1) | 0 |
Total other comprehensive income (loss) | 54 | (46) |
Total comprehensive income (loss) | $ 3 | $ (116) |
Background |
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Mar. 31, 2016 | |
Background Disclosure [Abstract] | |
Background | Background Hertz Global Holdings, Inc. ("Hertz Holdings," and together with its subsidiaries, the "Company") was incorporated in Delaware in 2005 to serve as the top-level holding company for Hertz Investors, Inc. which wholly owns The Hertz Corporation ("Hertz"), Hertz Holdings' primary operating company. The Company's common stock trades on the New York Stock Exchange under the symbol "HTZ." In March 2014, the Company announced that its Board of Directors approved plans to separate Hertz Holdings into two independent, publicly traded companies. One of the companies, Hertz Rental Car Holding Company, Inc. ("HRCHC") will continue to operate the Hertz, Dollar, Thrifty and Firefly car rental businesses as well as Donlen; and the other, HERC Holdings, Inc. ("HERC Holdings") will operate the Hertz Equipment Rental Corporation ("HERC"). The Company expects to separate the businesses in a tax-efficient manner. In respect of the separation, in December 2015 HRCHC filed a registration statement on Form 10 with the U.S. Securities and Exchange Commission ("SEC") which was amended in February and April 2016. |
Basis of Presentation and Recently Issued Accounting Pronouncements |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Recently Issued Accounting Pronouncements | Basis of Presentation and Recently Issued Accounting Pronouncements Basis of Presentation The Company prepares its unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Actual results could differ materially from those estimates. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s Form 10-K for the year ended December 31, 2015, as filed with the SEC on February 29, 2016 (the "2015 Form 10-K"), and as amended on March 4, 2016 (the "2015 Form 10-K/A"). As disclosed below in "Recently Issued Accounting Pronouncements," the Company retrospectively adopted the guidance "Simplifying the Presentation of Debt Issuance Costs" on January 1, 2016. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Hertz Holdings and its wholly and majority owned domestic and international subsidiaries. In the event that the Company is a primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity are included in the Company's condensed consolidated financial statements. The Company accounts for its investments in joint ventures using the equity method when it has significant influence but not control and is not the primary beneficiary. All significant intercompany transactions have been eliminated in consolidation. Recently Issued Accounting Pronouncements Adopted Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period In June 2014, the FASB issued guidance that requires that a performance target in a share-based payment award that affects vesting and that can be achieved after the requisite service period is completed is to be accounted for as a performance condition; therefore, compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved, and the amount of compensation cost recognized should be based on the portion of the service period fulfilled. The Company adopted this guidance prospectively on January 1, 2016 in accordance with the effective date. Adoption of this new guidance did not impact the Company’s financial position, results of operations or cash flows. Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items In January 2015, the FASB issued guidance that eliminates the concept of an event or transaction that is unusual in nature and occurs infrequently being treated as an extraordinary item. The Company adopted this guidance prospectively on January 1, 2016 in accordance with the effective date. Adoption of this new guidance did not impact the Company’s financial position, results of operations or cash flows. Amendments to the Consolidation Analysis In February 2015, the FASB issued guidance that changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The Company adopted this guidance retrospectively on January 1, 2016 in accordance with the effective date. Adoption of this new guidance did not impact the Company’s financial position, results of operations or cash flows. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued guidance requiring debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. In August 2015, the FASB issued guidance clarifying that debt issuance costs related to line-of-credit and other revolving debt arrangements may be deferred and presented as an asset. The Company adopted this guidance retrospectively on January 1, 2016 in accordance with the effective date. The impact of adopting this above guidance as of December 31, 2015 was as follows (in millions):
Adoption of this new guidance did not impact the Company’s equity, results of operations or cash flows. Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement In April 2015, the FASB issued guidance for customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The Company adopted this guidance prospectively on January 1, 2016 in accordance with the effective date. Adoption of this new guidance did not impact the Company’s financial position, results of operations or cash flows. Simplifying the Accounting for Measurement Period Adjustments for Business Combinations In September 2015, the FASB issued guidance that requires adjustments to provisional amounts during the measurement period of a business combination to be recognized in the reporting period in which the adjustments are determined, rather than retrospectively. The Company adopted this guidance prospectively on January 1, 2016 in accordance with the effective date. Adoption of this new guidance did not impact the Company’s financial position, results of operations or cash flows. Not Yet Adopted Revenue from Contracts with Customers In May 2014, the FASB issued guidance that will replace most existing revenue recognition guidance in U.S. GAAP. The new guidance applies to all contracts with customers except for leases, insurance contracts, financial instruments, certain nonmonetary exchanges and certain guarantees. The core principle of the guidance is that an entity should recognize revenue from customers for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The new principles-based revenue recognition model requires an entity to perform five steps: 1) identify the contract(s) with a customer, 2) identify the performance obligations in the contract, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue when (or as) the entity satisfies a performance obligation. Under the new guidance, performance obligations in a contract will be separately identified, which may impact the timing of recognition of the revenue allocated to each obligation. The measurement of revenue recognized may also be impacted by identification of new performance obligations and other provisions, such as collectability and variable consideration. The guidance will impact the Company’s accounting for certain contracts and its Hertz #1 Gold Plus Rewards liability. Also, additional disclosures are required about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The new guidance may be adopted on either a full or modified retrospective basis. As issued, the guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those reporting periods. In July 2015, the FASB agreed to defer the effective date of the guidance until annual and interim reporting periods beginning after December 15, 2017. In March 2016, the FASB issued clarifying guidance on assessing whether an entity is a principal or an agent in a revenue transaction, which impacts whether an entity reports revenue on a gross or net basis. The Company is in the process of determining the method and timing of adoption and assessing the overall impacts of adopting this guidance on its financial position, results of operations and cash flows. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued guidance that makes several changes to the manner in which financial assets and liabilities are accounted for, including, among other things, a requirement to measure most equity investments at fair value with changes in fair value recognized in net income (with the exception of investments that are consolidated or accounted for using the equity method or a fair value practicability exception), and amends certain disclosure requirements related to fair value measurements and financial assets and liabilities. This guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods using a modified retrospective transition method for most of the requirements. The Company is in the process of assessing the potential impacts of adopting this guidance on its financial position, results of operations and cash flows. Leases In February 2016, the FASB issued guidance that replaces the existing lease guidance. The new guidance establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than 12 months. The guidance will impact leases of our rental locations, as we own approximately 3% of the locations from which we operate our car rental businesses, in addition to leases of other assets. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance also expands the requirements for lessees to record leases embedded in other arrangements and the required quantitative and qualitative disclosures surrounding leases. Accounting guidance for lessors is largely unchanged. This guidance is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods using a modified retrospective transition approach. The Company is in the process of assessing the potential impacts of adopting this guidance on its financial position, results of operations and cash flows. Simplifying the Transition to the Equity Method of Accounting In March 2016, the FASB issued guidance that eliminates the requirement to apply the equity method of accounting retrospectively when significant influence over a previously held investment is obtained. Rather, the guidance requires the investor to add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method of accounting. This guidance is effective prospectively for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Based on current operations, no material impact to the Company’s financial position, results of operations and cash flows is expected upon adoption of this guidance. However, the Company will reassess the impacts of this guidance upon adoption. Improvements to Employee Share-Based Payment Accounting In March 2016, the FASB issued guidance that simplifies several areas of employee share-based payment accounting, including income taxes, forfeitures, minimum statutory withholding requirements, and classifications within the statement of cash flows. Most significantly, the new guidance eliminates the need to track tax “windfalls” in a separate pool within additional paid-in capital; instead, excess tax benefits and tax deficiencies will be recorded within income tax expense. This will result in the Company reclassifying excess tax benefits from additional paid-in capital to retained earnings on the balance sheet. The new guidance also gives entities the ability to elect whether to estimate forfeitures or account for them as they occur. Different adoption methods are required for the various aspects of the new guidance, including the retrospective, modified retrospective and prospective approaches, effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company is in the process of assessing the impacts of adopting this guidance on its financial position, results of operations and cash flows. |
Acquisitions and Divestitures |
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Business Combinations and Divestitures [Abstract] | |||||||||||||||||||||||||||||||||
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions Hertz Franchises In February 2015, the Company acquired substantially all of the assets of certain Hertz-branded franchises, including existing fleets and contract and concession rights, for $87 million. The franchises acquired include on airport locations in Indianapolis, South Bend and Ft. Wayne, Indiana and in Memphis, Tennessee, as well as several smaller off airport locations. The acquisition was part of a strategic decision to increase the number of Hertz-owned locations and capitalize on certain benefits of ownership not available under a franchise agreement. The acquisition was accounted for utilizing the acquisition method of accounting where the purchase price of the reacquired franchises was allocated based on estimated fair values of the assets acquired and liabilities assumed. The excess of the purchase price over the estimated fair value of the net tangible and intangible assets acquired was recorded as goodwill. The purchase price was allocated as follows:
Divestitures CAR Inc. Investment In March 2016, the Company sold 204 million shares of common stock of CAR Inc., a publicly traded company on the Hong Kong Stock Exchange and extended its commercial agreement with CAR Inc. to 2023, in exchange for $240 million, of which $233 million was allocated to the sale of shares based on the fair value of those shares. The sale of shares resulted in a pre-tax gain of $75 million, which has been recognized and recorded in the Company's corporate operations and is included in other (income) expense, net in the Company's condensed consolidated statements of operations. Additionally, $7 million of the proceeds were allocated to the extension of the commercial agreement which have been deferred and will be recognized over the remaining term of the commercial agreement. The sale of the shares reduced the Company's ownership interest in CAR Inc. to 1.7%. Additionally, the Company is no longer able to exercise significant influence over CAR Inc. and as a result, discontinued the equity method of accounting for this investment. The Company has classified the investment as an available for sale security as of March 31, 2016. This investment is presented within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. See Note 12, "Fair Value Measurements," for the fair value of the Company's available for sale securities at March 31, 2016. |
Revenue Earning Equipment |
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Depreciation of Revenue Earning Equipment and Lease Charges Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Earning Equipment | Revenue Earning Equipment The components of revenue earning equipment, net are as follows:
Depreciation of revenue earning equipment and lease charges, net includes the following:
(a) (Gain) loss on disposal of revenue earning equipment by segment is as follows:
Depreciation rates are reviewed on a quarterly basis based on management's ongoing assessment of present and estimated future market conditions, their effect on residual values at the time of disposal and the estimated holding periods for the fleet and equipment. The cumulative impact of depreciation rate changes is as follows:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The Company's debt consists of the following (in millions):
N/A - Not Applicable
The Company is highly leveraged and a substantial portion of its liquidity needs arise from debt service on its indebtedness and from the funding of its costs of operations, acquisitions and capital expenditures. The Company’s practice is to maintain sufficient liquidity through cash from operations, credit facilities and other financing arrangements, so that its operations are unaffected by adverse financial market conditions. Fleet Debt HVF II U.S. Fleet Medium Term Notes In February 2016, HVF II issued the Series 2016-1 Rental Car Asset Backed Notes, Class A, Class B, Class C and Class D (collectively, the “HVF II Series 2016-1 Notes”) and Series 2016-2 Rental Car Asset Backed Notes, Class A, Class B, Class C and Class D (collectively, the “HVF II Series 2016-2 Notes”) in an aggregate principal amount of approximately $1.06 billion. The expected maturities of the HVF II Series 2016-1 Notes and the HVF II Series 2016-2 Notes are March 2019 and March 2021, respectively. The HVF II Series 2016-1 Notes are comprised of approximately $333 million aggregate principal amount of 2.32% Rental Car Asset Backed Notes, Class A, $81 million aggregate principal amount of 3.72% Rental Car Asset Backed Notes, Class B, $25 million aggregate principal amount of 4.75% Rental Car Asset Backed Notes, Class C, and $27 million aggregate principal amount of 5.73% Rental Car Asset Backed Notes, Class D. The HVF II Series 2016-2 Notes are comprised of approximately $425 million aggregate principal amount of 2.95% Rental Car Asset Backed Notes, Class A, $104 million aggregate principal amount of 3.94% Rental Car Asset Backed Notes, Class B, $32 million aggregate principal amount of 4.99% Rental Car Asset Backed Notes, Class C, and $34 million aggregate principal amount of 5.97% Rental Car Asset Backed Notes, Class D. The Class B Notes of each series are subordinated to the Class A Notes of such series. The Class C Notes of each series are subordinated to the Class A Notes and the Class B Notes of such series. The Class D Notes of each series are subordinated to the Class A Notes, the Class B Notes and the Class C Notes of such series. An affiliate of HVF II purchased the Class D Notes of each such series, therefore, approximately $61 million of the obligation is eliminated in consolidation. HVF II U.S. Fleet Variable Funding Notes The net proceeds from the issuance of the HVF II Series 2016-1 Notes and HVF II Series 2016-2 Notes, together with available cash, were used to repay approximately $741 million of the outstanding principal amount of the HVF II Series 2014-A Notes and approximately $264 million of the outstanding principal amount of the HVF II Series 2013-A Notes. Borrowing Capacity and Availability The following facilities were available to the Company as of March 31, 2016:
As of March 31, 2016, the Senior ABL Facility had $1.03 billion available under the letter of credit facility sublimit, subject to borrowing base restrictions. Letters of Credit As of March 31, 2016, there were outstanding standby letters of credit totaling $628 million. Of this amount, $615 million was issued under the Senior Term Facility and the Senior ABL Facility (together, the “Senior Credit Facilities”). As of March 31, 2016, none of these letters of credit have been drawn upon. Cash Restrictions Certain amounts of cash and cash equivalents are restricted for the purchase of revenue earning vehicles and other specified uses under the Fleet Debt facilities and the Like-Kind Exchange Program ("LKE Program"). As of March 31, 2016 and December 31, 2015, the portion of total restricted cash and cash equivalents that was associated with the Fleet Debt facilities was $298 million and $289 million, respectively. Restricted cash balances fluctuate based on the timing of purchases and sales of revenue earning vehicles and could also be impacted by the occurrence of an amortization event (an event that results in the amortization of indebtedness prior to its expected maturity). Special Purpose Entities Substantially all of the revenue earning equipment and certain related assets are owned by special purpose entities, or are encumbered in favor of the lenders under the various credit facilities, other secured financings and asset-backed securities programs. None of such assets (including the assets owned by Hertz Vehicle Financing II LP, Hertz Vehicle Financing LLC, Rental Car Finance Corp., DNRS II LLC, HFLF, Donlen Trust and various international subsidiaries that facilitate the Company's international securitizations) are available to satisfy the claims of general creditors. Some of these special purpose entities are consolidated variable interest entities, of which the Company is the primary beneficiary, whose sole purpose is to provide commitments to lend in various currencies subject to borrowing bases comprised of rental vehicles and related assets of certain of Hertz International, Ltd.'s subsidiaries. As of March 31, 2016 and December 31, 2015, the Company's International Fleet Financing No. 1 B.V., International Fleet Financing No. 2 B.V. and HA Funding Pty, Ltd. variable interest entities had total assets of $400 million and $418 million, respectively, primarily comprised of loans receivable and revenue earning equipment, and total liabilities of $400 million and $418 million, respectively, primarily comprised of debt. Financial Covenant Compliance Under the terms of the Senior Term Facility and Senior ABL Facility, the Company is not subject to ongoing financial maintenance covenants; however, under the Senior ABL Facility, failure to maintain certain levels of liquidity will subject the Company to a contractually specified fixed charge coverage ratio of not less than 1:1 for the four quarters most recently ended. As of March 31, 2016, the Company was not subject to the fixed charge coverage ratio test. |
Employee Retirement Benefits |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Retirement Benefits | Employee Retirement Benefits Effective December 31, 2014, the Company amended the Hertz Corporation Account Balance Defined Benefit Pension Plan to permanently discontinue future benefit accruals and participation under the plan for non-union employees. The Company anticipates that, while compensation credits will no longer be provided under the plan after 2014 for affected participants, interest credits will continue to be credited on existing participant account balances under the plan until benefits are distributed and service will continue to be recognized for vesting and retirement eligibility requirements. The following table sets forth the net periodic pension expense:
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Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation During the three months ended March 31, 2016, the Company granted 794,149 non-qualified stock options to certain executives and employees at a weighted average grant date fair value of $3.99 as determined using the Black Scholes option model; 1,135,343 restricted stock units ("RSUs") at a weighted average grant date fair value of $9.99 and 2,365,670 performance stock units ("PSUs") at a weighted average grant date fair value of $9.98 under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan with vesting terms of three to five years. A summary of the total compensation expense and associated income tax benefits recognized under all plans, including the cost of stock options, RSUs and PSUs, is as follows:
As of March 31, 2016, there was $79 million of total unrecognized compensation cost related to non-vested stock options, RSUs and PSUs granted by Hertz Holdings under all plans. The total unrecognized compensation cost is expected to be recognized over the remaining 2.34 years, on a weighted average basis, of the requisite service period that began on the grant dates. |
Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring During the first quarter of 2016, the Company evaluated its workforce and operations and initiated approximately $15 million in restructuring programs that include headcount reductions, business process re-engineering and outsourcing certain information technology application and infrastructure functions to a third party service provider. These programs are expected to be completed within the next twelve months. Restructuring charges under these programs for the period shown are as follows:
The following table sets forth the activity affecting the restructuring accrual which is included in accrued liabilities in the Company's condensed consolidated balance sheets during the three months ended March 31, 2016. The remainder of the restructuring accrual primarily relates to future lease obligations which will be paid over the remaining term of the applicable leases.
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Tangible Asset Impairments and Asset Write-downs |
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Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Tangible Asset Impairments and Asset Write-downs | Tangible Asset Impairments and Asset Write-downs In the first quarter of 2015, the Company performed an impairment assessment of the Dollar Thrifty headquarters campus in Tulsa, Oklahoma, which is part of the U.S. Car Rental segment. Based on the impairment assessment, the Company recorded a charge of $6 million which is included in selling, general and administrative expense in the Company's condensed consolidated statements of operations. The building was sold in December 2015. In the first quarter of 2015, the Company recorded $11 million in charges associated with U.S. Car Rental service equipment and assets deemed to have no future use, of which $4 million is included in direct operating expense and $7 million is included in other (income) expense, net in the Company's condensed consolidated statements of operations. |
Taxes on Income (Loss) |
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Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Taxes on Income (Loss) | Taxes on Income (Loss) The effective tax rate for the three months ended March 31, 2016 and 2015 was 26% and 19%, respectively. The effective tax rate for the full fiscal year 2016 is expected to be approximately 42%. The Company recorded a tax benefit of $18 million for the three months ended March 31, 2016 compared to a tax benefit of $16 million for the three months ended March 31, 2015. The change was the result of the composition of earnings by jurisdiction in the first quarter of 2016. |
Financial Instruments |
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Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments The Company has risk exposures that it has historically used financial instruments to manage. None of the instruments have been designated in a hedging relationship as of March 31, 2016. Interest Rate Risk The Company’s objective in managing exposure to interest rate changes is to minimize the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve these objectives, the Company uses interest rate caps and other instruments to manage the mix of floating and fixed-rate debt. Currency Exchange Rate Risk The Company’s objective in managing exposure to currency fluctuations is to limit the exposure of certain cash flows and earnings from changes associated with currency exchange rate changes through the use of various derivative contracts. The Company experiences currency risks in its global operations as a result of various factors including intercompany local currency denominated loans, rental operations in various currencies and purchasing fleet in various currencies. The following table summarizes the estimated fair value of financial instruments:
While the Company's foreign currency forward contracts and certain interest rate caps are subject to enforceable master netting agreements with their counterparties, the Company does not offset the derivative assets and liabilities in its condensed consolidated balance sheets. The following table summarizes the gains or (losses) on financial instruments for the period indicated.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The fair value of accounts receivable, accounts payable and accrued expenses, to the extent the underlying liability will be settled in cash, approximates the carrying values because of the short-term nature of these instruments. Cash Equivalents and Investments The Company’s cash equivalents primarily consist of money market accounts which the Company measures at fair value on a recurring basis. The Company determines the fair value of cash equivalents using a market approach based on quoted prices in active markets. Investments in equity and other securities that are measured at fair value on a recurring basis consist of various mutual funds and available for sale securities. The valuation of these securities is based on pricing models whereby all significant inputs are observable or can be derived from or corroborated by observable market data. The following table summarizes the ending balances of the Company's cash equivalents and investments.
CAR Inc. As further described in Note 3, "Acquisitions and Divestitures," the Company holds an investment in CAR Inc. that was previously accounted for under the equity method and is now accounted for as an available for sale security. As such, the balance of our investment is included in the table above under equity and other securities (Level 1) as of March 31, 2016. Financial Instruments The fair value of the Company's financial instruments as of March 31, 2016 are shown in Note 11, "Financial Instruments." The Company's financial instruments are classified as Level 2 assets and liabilities and are priced using quoted market prices for similar assets or liabilities in active markets. Debt Obligations The fair value of debt is estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (Level 2 inputs).
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis Assets and liabilities measured at fair value during the three months ended March 31, 2016 are as follows:
During the first quarter of 2016, the Company reclassified an asset in its U.S. Car Rental segment with a fair value of $9 million to held and used. The asset was previously classified as held for sale at December 31, 2015. The Company's long-lived assets held for sale are comprised of its previous corporate headquarters building in Park Ridge, New Jersey and a property in its U.S. Car Rental segment. The fair value less cost to sell of the long-lived assets held for sale were assessed at March 31, 2016. The Company uses market and income approaches to value the long-lived assets, including inputs such as expected cash flows and recent comparable transactions. |
Contingencies and Off-Balance Sheet Commitments |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Off-Balance Sheet Commitments | Contingencies and Off-Balance Sheet Commitments Legal Proceedings Public Liability and Property Damage The Company is currently a defendant in numerous actions and has received numerous claims on which actions have not yet been commenced for public liability and property damage arising from the operation of motor vehicles and equipment rented from the Company. The obligation for public liability and property damage on self-insured U.S. and international vehicles and equipment, as stated on the Company's balance sheet, represents an estimate for both reported accident claims not yet paid and claims incurred but not yet reported. The related liabilities are recorded on a non-discounted basis. Reserve requirements are based on rental volume and actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses, premiums and administrative costs. At March 31, 2016 and December 31, 2015, the Company's liability recorded for public liability and property damage matters was $413 million and $402 million, respectively. The Company believes that its analysis is based on the most relevant information available, combined with reasonable assumptions, and that the Company may prudently rely on this information to determine the estimated liability. The liability is subject to significant uncertainties. The adequacy of the liability reserve is regularly monitored based on evolving accident claim history and insurance related state legislation changes. If the Company's estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results. Other Matters From time to time the Company is a party to various legal proceedings. The Company has summarized below the most significant legal proceedings to which the Company was and/or is a party to during the three months ended March 31, 2016 or the period after March 31, 2016 but before the filing of this Report on Form 10-Q. Concession Fee Recoveries - In October 2006, Janet Sobel, Daniel Dugan, PhD. and Lydia Lee, individually and on behalf of all others similarly situated v. The Hertz Corporation and Enterprise Rent-A-Car Company (“Enterprise”) was filed in the U.S. District Court for the District of Nevada (Enterprise became a defendant in a separate action which they have now settled.) The Sobel case is a consumer class action on behalf of all persons who rented cars from Hertz at airports in Nevada and were separately charged airport concession recovery fees by Hertz as part of their rental charges during the class period. In October 2014, the court entered final judgment against the Company and directed Hertz to pay the class approximately $42 million in restitution and $11 million in prejudgment interest, and to pay attorney's fees of $3.1 million with an additional $3.1 million to be paid from the restitution fund. In December 2014, Hertz timely filed an appeal of that final judgment with the U.S. Court of Appeals for the Ninth Circuit and the plaintiffs cross appealed the court's judgment seeking to challenge the lower court's ruling that Hertz did not deceive or mislead the class members. The matter has now been fully briefed by the parties. No oral argument date has been set. The Company continues to believe the outcome of this case will not be material to its financial condition, results of operations or cash flows. In re Hertz Global Holdings, Inc. Securities Litigation - In November 2013, a purported shareholder class action, Pedro Ramirez, Jr. v. Hertz Global Holdings, Inc., et al., was commenced in the U.S. District Court for the District of New Jersey naming Hertz Holdings and certain of its officers as defendants and alleging violations of the federal securities laws. The complaint alleged that Hertz Holdings made material misrepresentations and/or omissions of material fact in its public disclosures during the period from February 25, 2013 through November 4, 2013, in violation of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The complaint sought an unspecified amount of monetary damages on behalf of the purported class and an award of costs and expenses, including counsel fees and expert fees. In June 2014, Hertz Holdings responded to the amended complaint by filing a motion to dismiss. After a hearing in October 2014, the court granted Hertz Holdings' motion to dismiss the complaint. The dismissal was without prejudice and plaintiff was granted leave to file a second amended complaint within 30 days of the order. In November 2014, plaintiff filed a second amended complaint which shortened the putative class period such that it was not alleged to have commenced until May 18, 2013 and made allegations that were not substantively very different than the allegations in the prior complaint. In early 2015, this case was assigned to a new federal judge in the District of New Jersey, and Hertz Holdings responded to the second amended complaint by filing another motion to dismiss. On July 22, 2015, the court granted Hertz Holdings’ motion to dismiss without prejudice and ordered that plaintiff could file a third amended complaint on or before August 22, 2015. On August 21, 2015, plaintiff filed a third amended complaint. The third amended complaint included additional allegations and expanded the putative class period such that it was alleged to span from February 14, 2013 to July 16, 2015. On November 4, 2015, Hertz Holdings filed its motion to dismiss. Thereafter, a motion was made by plaintiff to add a new plaintiff, because of challenges to the standing of the first plaintiff. The court granted plaintiffs leave to file a fourth amended complaint to add the new plaintiff, and the new complaint was filed on March 1, 2016. Hertz Holdings moved to dismiss the fourth amended complaint in its entirety with prejudice on March 24, 2016 and on May 6, 2016, plaintiff filed its opposition to same. Hertz Holdings believes that it has valid and meritorious defenses and it intends to vigorously defend against the complaint, but litigation is subject to many uncertainties and the outcome of this matter is not predictable with assurance. It is possible that this matter could be decided unfavorably to Hertz Holdings. However, Hertz Holdings is currently unable to estimate the range of these possible losses, but they could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period. Ryanair - In July 2015, Ryanair Ltd. ("Ryanair") filed a complaint against Hertz Europe Limited, a subsidiary of the Company, in the High Court of Justice, Queen’s Bench Division, Commercial Court, Royal Courts of Justice of the United Kingdom alleging breach of contract in connection with Hertz Europe Limited’s termination of its car hire agreement with Ryanair following a contractual dispute with respect to Ryanair’s agreement to begin using third party ticket distributors. The complaint seeks damages, interest and costs, together with attorney fees. The Company believes that it has valid and meritorious defenses and it intends to vigorously defend against these allegations, but litigation is subject to many uncertainties and the outcome of this matter is not predictable with assurance. The Company has established a reserve for this matter which is not material. However, it is possible that this matter could be decided unfavorably to the Company, accordingly, it is possible that an adverse outcome could exceed the amount accrued in an amount that could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period. The Company intends to assert that it has meritorious defenses in the foregoing matters and the Company intends to defend itself vigorously. Governmental Investigations - In June 2014, the Company was advised by the staff of the New York Regional Office of the SEC that it is investigating the events disclosed in certain of the Company’s filings with the SEC. In addition, in December 2014 a state securities regulator requested information regarding the same events. The investigations generally involve the restatements included in the Company's 2014 Form 10-K and related accounting for prior periods. The Company has and intends to continue to cooperate with both the SEC and state requests. Due to the stage at which the proceedings are, Hertz is currently unable to predict the likely outcome of the proceedings or estimate the range of reasonably possible losses, which may be material. Among other matters, the restatements included in the Company’s 2014 Form 10-K addressed a variety of accounting matters involving the Company’s Brazil rental car operations. The Company has identified certain activities in Brazil that may raise issues under the Foreign Corrupt Practices Act and local laws, which the Company has self-reported to appropriate government entities. At this time, the Company is unable to predict the outcome of this issue or estimate the range of reasonably possible losses, which could be material. French Antitrust - In February 2015, the French Competition Authority issued a Statement of Objections claiming that several car rental companies, including Hertz and certain of its subsidiaries, violated French competition law by receiving historic market information from twelve French airports relating to the car rental companies operating at those airports and by engaging in a concerted practice relating to train station surcharges. Hertz believes that it has valid defenses and intends to vigorously defend against the allegations, but, due to the early stage at which the proceedings are, Hertz is currently unable to predict the likely outcome of the proceedings or range of reasonably possible losses, which could be material. French Road Tax - The French Tax Authority has challenged the historic practice of several rental car companies, including Hertz France, of registering vehicles in jurisdictions where it is established and where the road tax payable with respect to those vehicles is lower than the road tax payable in the jurisdictions where the vehicles will primarily be used. In respect of a period in 2005, the Company has unsuccessfully appealed the French Tax assessment to the highest Administrative court in France. In respect of a period from 2003 to 2005, following an adverse judgment, the Company appealed the French Tax Authority’s assessment to the Civil Court of Appeal. This appeal is currently awaiting judgment. In the third quarter of 2015, following an adverse decision against another industry participant involved in a similar action, the Company has recorded charges with respect to this matter of approximately $23 million during 2015. In January 2016, the Company made a payment of approximately $9 million. The Company has established reserves for matters where the Company believes that losses are probable and can be reasonably estimated. Other than the aggregate reserve established for claims for public liability and property damage, none of those reserves are material. For matters, including certain of those described above, where the Company has not established a reserve, the ultimate outcome or resolution cannot be predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated. Litigation is subject to many uncertainties and the outcome of the individual litigated matters is not predictable with assurance. It is possible that certain of the actions, claims, inquiries or proceedings, including those discussed above, could be decided unfavorably to the Company or any of its subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period. In March 2016, the Company, as plaintiff, received a $9 million settlement related to a 2013 eminent domain case associated with one of the Company’s airport locations. The settlement gain is included in other (income) expense, net in the Company's condensed consolidated statements of operations. Indemnification Obligations There have been no significant changes to the Company's indemnification obligations as compared to those disclosed in Note 16, "Contingencies and Off-Balance Sheet Commitments" of the Notes to consolidated financial statements included in the 2015 Form 10-K under the caption Item 8, "Financial Statements and Supplementary Data." |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company has identified four reportable segments, which are organized based on the products and services provided by its operating segments and the geographic areas in which its operating segments conduct business, as follows:
In addition to the above reportable segments, the Company has corporate operations ("Corporate") which includes general corporate assets and expenses and certain interest expense (including net interest on corporate debt). Adjusted pre-tax income (loss) is calculated as income (loss) before income taxes plus non-cash acquisition accounting charges, debt-related charges relating to the amortization and write-off of debt financing costs and debt discounts and certain one-time charges and non-operational items. Adjusted pre-tax income (loss) is important because it allows management to assess operational performance of its business, exclusive of the items mentioned above. It also allows management to assess the performance of the entire business on the same basis as the segment measure of profitability. Management believes that it is important to investors for the same reasons it is important to management and because it allows them to assess the Company's operational performance on the same basis that management uses internally. When evaluating the Company's operating performance, investors should not consider adjusted pre-tax income (loss) in isolation of, or as a substitute for, measures of the Company's financial performance, such as net income (loss) or income (loss) before income taxes. Revenues and adjusted pre-tax income (loss) by segment and the reconciliation to consolidated amounts are summarized below.
Depreciation of revenue earning equipment and lease charges, net
Total assets
The increase in total assets for the International Car Rental segment is due to an increase in cash partially due to the proceeds from the sale of CAR Inc. shares, which were not transferred to Corporate, and an increase in additional fleet acquired to meet seasonal leisure demand during the summer period. Refer to "Note 3—Acquisitions and Divestitures" for additional information related to the share sale. The increase in total assets for the U.S Car Rental segment is also the result of additional fleet acquired in order to meet upcoming seasonal demands, partially offset by lower receivables from fleet sales. |
Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share has been computed based upon the weighted average number of common shares outstanding. Diluted earnings (loss) per share has been computed based upon the weighted average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, except when the effect would be anti-dilutive. The following table sets forth the computation of basic and diluted earnings (loss) per share:
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Subsequent Events |
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Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Fleet Debt HFLF Medium Term Notes HFLF Series 2016-1 Notes: In April 2016, HFLF issued the Series 2016-1 Asset-Backed Notes, Class A, Class B, Class C, Class D, and Class E (collectively, the “HFLF Series 2016-1 Notes”) in an aggregate principal amount of $400 million. The expected maturity of the HFLF Series 2016-1 Notes is February 2019 to April 2019, based upon assumptions made at the time of the pricing of the HFLF Series 2016-1 Notes. The HFLF Series 2016-1 Notes (other than the Class A-2 Notes which are fixed rate) are floating rate and carry an interest rate based upon a spread to one-month LIBOR. An affiliate of HFLF purchased the Class E Notes, therefore, approximately $15 million of the obligation will be eliminated in consolidation. The net proceeds from the issuance of the HFLF Series 2016-1 Notes, together with available cash, were used to repay $400 million of amounts then-outstanding under the HFLF Series 2013-2 Notes. Brazilian Fleet Financing Facility In April 2016, the Company entered into an agreement pursuant to which the maturity of the Brazilian Fleet Financing Facility was extended from April 2016 to October 2016. |
Basis of Presentation and Recently Issued Accounting Pronouncements (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Hertz Holdings and its wholly and majority owned domestic and international subsidiaries. In the event that the Company is a primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity are included in the Company's condensed consolidated financial statements. The Company accounts for its investments in joint ventures using the equity method when it has significant influence but not control and is not the primary beneficiary. All significant intercompany transactions have been eliminated in consolidation. |
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period In June 2014, the FASB issued guidance that requires that a performance target in a share-based payment award that affects vesting and that can be achieved after the requisite service period is completed is to be accounted for as a performance condition; therefore, compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved, and the amount of compensation cost recognized should be based on the portion of the service period fulfilled. The Company adopted this guidance prospectively on January 1, 2016 in accordance with the effective date. Adoption of this new guidance did not impact the Company’s financial position, results of operations or cash flows. Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items In January 2015, the FASB issued guidance that eliminates the concept of an event or transaction that is unusual in nature and occurs infrequently being treated as an extraordinary item. The Company adopted this guidance prospectively on January 1, 2016 in accordance with the effective date. Adoption of this new guidance did not impact the Company’s financial position, results of operations or cash flows. Amendments to the Consolidation Analysis In February 2015, the FASB issued guidance that changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The Company adopted this guidance retrospectively on January 1, 2016 in accordance with the effective date. Adoption of this new guidance did not impact the Company’s financial position, results of operations or cash flows. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued guidance requiring debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. In August 2015, the FASB issued guidance clarifying that debt issuance costs related to line-of-credit and other revolving debt arrangements may be deferred and presented as an asset. The Company adopted this guidance retrospectively on January 1, 2016 in accordance with the effective date. The impact of adopting this above guidance as of December 31, 2015 was as follows (in millions):
Adoption of this new guidance did not impact the Company’s equity, results of operations or cash flows. Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement In April 2015, the FASB issued guidance for customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The Company adopted this guidance prospectively on January 1, 2016 in accordance with the effective date. Adoption of this new guidance did not impact the Company’s financial position, results of operations or cash flows. Simplifying the Accounting for Measurement Period Adjustments for Business Combinations In September 2015, the FASB issued guidance that requires adjustments to provisional amounts during the measurement period of a business combination to be recognized in the reporting period in which the adjustments are determined, rather than retrospectively. The Company adopted this guidance prospectively on January 1, 2016 in accordance with the effective date. Adoption of this new guidance did not impact the Company’s financial position, results of operations or cash flows. Not Yet Adopted Revenue from Contracts with Customers In May 2014, the FASB issued guidance that will replace most existing revenue recognition guidance in U.S. GAAP. The new guidance applies to all contracts with customers except for leases, insurance contracts, financial instruments, certain nonmonetary exchanges and certain guarantees. The core principle of the guidance is that an entity should recognize revenue from customers for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The new principles-based revenue recognition model requires an entity to perform five steps: 1) identify the contract(s) with a customer, 2) identify the performance obligations in the contract, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue when (or as) the entity satisfies a performance obligation. Under the new guidance, performance obligations in a contract will be separately identified, which may impact the timing of recognition of the revenue allocated to each obligation. The measurement of revenue recognized may also be impacted by identification of new performance obligations and other provisions, such as collectability and variable consideration. The guidance will impact the Company’s accounting for certain contracts and its Hertz #1 Gold Plus Rewards liability. Also, additional disclosures are required about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The new guidance may be adopted on either a full or modified retrospective basis. As issued, the guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those reporting periods. In July 2015, the FASB agreed to defer the effective date of the guidance until annual and interim reporting periods beginning after December 15, 2017. In March 2016, the FASB issued clarifying guidance on assessing whether an entity is a principal or an agent in a revenue transaction, which impacts whether an entity reports revenue on a gross or net basis. The Company is in the process of determining the method and timing of adoption and assessing the overall impacts of adopting this guidance on its financial position, results of operations and cash flows. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued guidance that makes several changes to the manner in which financial assets and liabilities are accounted for, including, among other things, a requirement to measure most equity investments at fair value with changes in fair value recognized in net income (with the exception of investments that are consolidated or accounted for using the equity method or a fair value practicability exception), and amends certain disclosure requirements related to fair value measurements and financial assets and liabilities. This guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods using a modified retrospective transition method for most of the requirements. The Company is in the process of assessing the potential impacts of adopting this guidance on its financial position, results of operations and cash flows. Leases In February 2016, the FASB issued guidance that replaces the existing lease guidance. The new guidance establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and lease liability on the balance sheet for all leases with terms longer than 12 months. The guidance will impact leases of our rental locations, as we own approximately 3% of the locations from which we operate our car rental businesses, in addition to leases of other assets. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance also expands the requirements for lessees to record leases embedded in other arrangements and the required quantitative and qualitative disclosures surrounding leases. Accounting guidance for lessors is largely unchanged. This guidance is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods using a modified retrospective transition approach. The Company is in the process of assessing the potential impacts of adopting this guidance on its financial position, results of operations and cash flows. Simplifying the Transition to the Equity Method of Accounting In March 2016, the FASB issued guidance that eliminates the requirement to apply the equity method of accounting retrospectively when significant influence over a previously held investment is obtained. Rather, the guidance requires the investor to add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method of accounting. This guidance is effective prospectively for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Based on current operations, no material impact to the Company’s financial position, results of operations and cash flows is expected upon adoption of this guidance. However, the Company will reassess the impacts of this guidance upon adoption. Improvements to Employee Share-Based Payment Accounting In March 2016, the FASB issued guidance that simplifies several areas of employee share-based payment accounting, including income taxes, forfeitures, minimum statutory withholding requirements, and classifications within the statement of cash flows. Most significantly, the new guidance eliminates the need to track tax “windfalls” in a separate pool within additional paid-in capital; instead, excess tax benefits and tax deficiencies will be recorded within income tax expense. This will result in the Company reclassifying excess tax benefits from additional paid-in capital to retained earnings on the balance sheet. The new guidance also gives entities the ability to elect whether to estimate forfeitures or account for them as they occur. Different adoption methods are required for the various aspects of the new guidance, including the retrospective, modified retrospective and prospective approaches, effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company is in the process of assessing the impacts of adopting this guidance on its financial position, results of operations and cash flows. |
Basis of Presentation and Recently Issued Accounting Pronouncements (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | The impact of adopting this above guidance as of December 31, 2015 was as follows (in millions):
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Acquisitions and Divestitures (Tables) |
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Business Combinations and Divestitures [Abstract] | |||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The purchase price was allocated as follows:
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Revenue Earning Equipment (Tables) |
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Depreciation of Revenue Earning Equipment and Lease Charges Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Revenue Earning Equipment | The components of revenue earning equipment, net are as follows:
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Depreciation on Revenue Earning Equipment and Lease Charges | Depreciation of revenue earning equipment and lease charges, net includes the following:
(a) (Gain) loss on disposal of revenue earning equipment by segment is as follows:
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Impact of Depreciation Rate Changes | Depreciation rates are reviewed on a quarterly basis based on management's ongoing assessment of present and estimated future market conditions, their effect on residual values at the time of disposal and the estimated holding periods for the fleet and equipment. The cumulative impact of depreciation rate changes is as follows:
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Debt (Tables) |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of debt | The Company's debt consists of the following (in millions):
N/A - Not Applicable
The fair value of debt is estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (Level 2 inputs).
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Schedule of facilities available for the use of the company and its subsidiaries | The following facilities were available to the Company as of March 31, 2016:
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Employee Retirement Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The following table sets forth the net periodic pension expense:
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Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | A summary of the total compensation expense and associated income tax benefits recognized under all plans, including the cost of stock options, RSUs and PSUs, is as follows:
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Restructuring (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | Restructuring charges under these programs for the period shown are as follows:
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Schedule of Restructuring Reserve by Type of Cost | The following table sets forth the activity affecting the restructuring accrual which is included in accrued liabilities in the Company's condensed consolidated balance sheets during the three months ended March 31, 2016. The remainder of the restructuring accrual primarily relates to future lease obligations which will be paid over the remaining term of the applicable leases.
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Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the estimated fair value of financial instruments:
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Derivative Instruments, Gain (Loss) | The following table summarizes the gains or (losses) on financial instruments for the period indicated.
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Investments | The following table summarizes the ending balances of the Company's cash equivalents and investments.
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Components of debt | The Company's debt consists of the following (in millions):
N/A - Not Applicable
The fair value of debt is estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (Level 2 inputs).
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Disclosure of Long Lived Assets Held-for-sale | Assets and liabilities measured at fair value during the three months ended March 31, 2016 are as follows:
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Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | evenues and adjusted pre-tax income (loss) by segment and the reconciliation to consolidated amounts are summarized below.
Depreciation of revenue earning equipment and lease charges, net
Total assets
|
Earnings (Loss) Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings (loss) per share:
|
Basis of Presentation and Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Prepaid expenses and other assets | $ 651 | $ 773 |
Total assets | 24,028 | 23,285 |
Debt | 16,072 | 15,834 |
Total liabilities | 21,990 | 21,266 |
Total liabilities and equity | $ 24,028 | 23,285 |
As Previously Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Prepaid expenses and other assets | 846 | |
Total assets | 23,358 | |
Debt | 15,907 | |
Total liabilities | 21,339 | |
Total liabilities and equity | 23,358 | |
Adjustment | Accounting Standards Update 2015-03 | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Prepaid expenses and other assets | (73) | |
Total assets | (73) | |
Debt | (73) | |
Total liabilities | (73) | |
Total liabilities and equity | $ (73) |
(Acquisitions) (Details) - USD ($) $ in Millions |
1 Months Ended | ||
---|---|---|---|
Feb. 28, 2015 |
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Business Acquisition [Line Items] | |||
Goodwill | $ 1,353 | $ 1,354 | |
Penske Acquisition | |||
Business Acquisition [Line Items] | |||
Payments to acquire assets of certain Hertz-branded franchises | $ 87 | ||
Revenue earning equipment | 71 | ||
Property and other equipment | 6 | ||
Other intangible assets | 9 | ||
Goodwill | 1 | ||
Total | $ 87 |
Acquisitions and Divestitures (Divestiture) (Details) - CAR, Inc shares in Millions, $ in Millions |
1 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
shares
| |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Ownership percentage | 1.70% |
Common Stock | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Number of shares sold | shares | 204 |
Gross sales proceeds | $ 240 |
Net sales proceeds | 233 |
Deferred gain on sale | 7 |
Common Stock | Other Operating Income (Expense) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Pre-tax gain on sale of stock | $ 75 |
Revenue Earning Equipment (Depreciation Rates) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Revenue earning equipment | ||
Depreciation rate changes | $ 28 | $ 30 |
U.S. Car Rental | ||
Revenue earning equipment | ||
Depreciation rate changes | 27 | 30 |
International Car Rental | ||
Revenue earning equipment | ||
Depreciation rate changes | 1 | 0 |
Worldwide Equipment Rental | ||
Revenue earning equipment | ||
Depreciation rate changes | $ 0 | $ 0 |
Employee Retirement Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
United States Pension Plan of US Entity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1 | $ 1 |
Interest cost | 7 | 7 |
Expected return on plan assets | (9) | (10) |
Net amortizations | 2 | 1 |
Settlement loss | 1 | 1 |
Net periodic pension expense (benefit) | 2 | 0 |
Foreign Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0 | 1 |
Interest cost | 2 | 2 |
Expected return on plan assets | (3) | (4) |
Net amortizations | 0 | 0 |
Settlement loss | 0 | 0 |
Net periodic pension expense (benefit) | $ (1) | $ (1) |
Taxes on Income (Loss) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2016 |
|
Income Tax Contingency [Line Items] | |||
Effective tax rate (as percent) | 26.00% | 19.00% | |
(Provision) benefit for taxes on income (loss) | $ 18 | $ 16 | |
Forecast | |||
Income Tax Contingency [Line Items] | |||
Effective tax rate (as percent) | 42.00% |
Financial Instruments (Details) - Not Designated as Hedging Instrument - Fair Value, Measurements, Recurring - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Foreign Exchange Forward | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Gain (Loss) Recognized in Income on Derivatives | $ 3 | $ (1) | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Asset Derivatives | 5 | $ 12 | |
Liability Derivatives | 3 | 10 | |
Level 2 | Interest Rate Cap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Asset Derivatives | 3 | 9 | |
Liability Derivatives | 2 | 9 | |
Level 2 | Foreign Exchange Forward | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Asset Derivatives | 2 | 3 | |
Liability Derivatives | $ 1 | $ 1 |
Contingencies and Off-Balance Sheet Commitments (Details) - USD ($) $ in Millions |
1 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2016 |
Jan. 31, 2016 |
Oct. 31, 2014 |
Dec. 31, 2015 |
|
Loss Contingencies [Line Items] | ||||
Public liability and property damage | $ 413.0 | $ 402.0 | ||
Other (income) expense, net | ||||
Loss Contingencies [Line Items] | ||||
Litigation settlement amount | $ 9.0 | |||
Concession Fee Recoveries | ||||
Loss Contingencies [Line Items] | ||||
Litigation settlement amount | $ 42.0 | |||
Litigation settlement interest | 11.0 | |||
Litigation settlement expense | 3.1 | |||
Concession Fee Recoveries | Restitution Fund | ||||
Loss Contingencies [Line Items] | ||||
Litigation settlement expense | $ 3.1 | |||
French Road Tax | ||||
Loss Contingencies [Line Items] | ||||
Additional reserve established | $ 23.0 | |||
Ministry of the Economy, Finance and Industry, France | French Road Tax | ||||
Loss Contingencies [Line Items] | ||||
Payments for other taxes | $ 9.0 |
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income (loss), basic | $ (51) | $ (70) |
Basic weighted average common shares | 424 | 459 |
Weighted average shares used to calculate diluted earnings per share | 424 | 459 |
Earnings (loss) per share: | ||
Basic (in dollars per share) | $ (0.12) | $ (0.15) |
Diluted (in dollars per share) | $ (0.12) | $ (0.15) |
Antidilutive stock options, RSUs and PSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive stock options, RSUs and PSUs | 10 | 7 |
Subsequent Events (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Apr. 30, 2016 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Subsequent Event [Line Items] | |||
Proceeds from issuance of long-term debt | $ 1,000 | $ 0 | |
Repayments of Long-term Debt | $ 185 | $ 1,027 | |
HFLF Series 2016-1 | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Proceeds from issuance of long-term debt | $ 400 | ||
HFLF Series 2013-2 Notes | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Repayments of Long-term Debt | 400 | ||
Eliminations | Affiliated Entity | HVF II Series 2015-3 Notes, Class D | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Proceeds from issuance of long-term debt | $ 15 |
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