UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) July 17, 2015 (July 16, 2015)
HERTZ GLOBAL HOLDINGS, INC.
THE HERTZ CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
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001-33139 |
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20-3530539 |
(State of Incorporation) |
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(Commission File Number) |
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(I.R.S Employer Identification No.) |
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999 Vanderbilt Beach Road, 3rd Floor |
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Naples, Florida 34108 |
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999 Vanderbilt Beach Road, 3rd Floor |
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Naples, Florida 34108 |
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(Address of principal executive offices, |
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(239) 552-5800 |
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(239) 552-5800 |
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(Registrants telephone number, |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The information set forth in Item 7.01 is incorporated by reference into this Item 2.02.
ITEM 7.01 REGULATION FD DISCLOSURE
On July 16, 2015, Hertz Global Holdings, Inc. (Hertz Holdings or the Company) issued a press release with respect to Hertz Holdings filing of its Annual Report on Form 10-K for the fiscal year ending December 31, 2014, which includes the restated results of 2012 and 2013 as well as selected unaudited restated financial information for 2011. In addition, the press release announced that Hertz Holdings filed its Quarterly Report on Form 10-Q for the period ending March 31, 2015. Hertz Holdings is providing additional financial information with respect to the fiscal year ending December 31, 2014 and the period ending March 31, 2015 in the document attached as Exhibit 99.2 to this current report. This financial information includes certain non-GAAP financial measures that are detailed in Exhibit 99.2.
As described in the press release, Hertz Holdings and its wholly-owned subsidiary The Hertz Corporation hosted a conference call for investors to discuss the filing of the Form 10-K on July 17, 2015. Certain information relating to the press release is included in the set of slides that accompanied the conference call, a copy of which is attached hereto as Exhibit 99.3. The conference call was made available to the public via conference call and audio webcast. Copies of the press release, the financial information and the slides are attached as Exhibit 99.1, 99.2 and 99.3, respectively, to this current report and incorporated by reference herein.
This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the Securities Act), except as shall be expressly set forth by specific reference in such a filing.
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in this report, and in related comments by the Companys management, include forward-looking statements. Forward-looking statements include information concerning the Companys liquidity and its possible or assumed future results of operations, including descriptions of its business strategies. These statements often include words such as believe,becoming, expect, project, potential, preliminary, anticipate, intend, plan, estimate, seek, will, may, would, should, could, forecasts or similar expressions. These statements are based on certain assumptions that the Company has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate in these circumstances. The Company believes these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and the Companys actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent reports on SEC Forms 10-K, 10-Q and 8-K. Some important factors that could affect the Companys actual results include, among others, the ability of the Company to remediate any material weaknesses in its internal control over financial reporting, the final results of the SECs inquiry or any other governmental inquiries or investigations, and those that may be disclosed from time to time in subsequent reports filed with the SEC and those described under Risk Factors set forth in Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2014 of the Company. You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
Exhibit 99.1 Press Release of Hertz Holdings dated July 16, 2015.
Exhibit 99.2 Financial Information and Operating Data of Hertz Holdings.
Exhibit 99.3 Slides relating to the July 17, 2015 conference call.
Exhibit 99.1, 99.2 and 99.3 shall not be deemed filed for purposes of Section 18 of the Exchange Act, nor shall they be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in a filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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HERTZ GLOBAL HOLDINGS, INC. | |
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(Registrant) | |
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By: |
/s/ Thomas C. Kennedy |
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Name: |
Thomas C. Kennedy |
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Title: |
Senior Executive Vice President and Chief Financial Officer |
Date: July 17, 2015
Exhibit 99.1
FOR IMMEDIATE RELEASE
HERTZ COMPLETES FINANCIAL RESTATEMENT; PROVIDES 2015 BUSINESS OUTLOOK
Company Reaffirms its Plan to Repurchase up to $1 Billion of Shares
Expects HERC Separation to be Completed in Second Quarter 2016
Increases Annual Cost Savings Target to $300 Million
Announces Plans for Additional Reductions to
U.S. RAC Capacity Growth and Update on Achievement of Fleet Refresh
Hertz to Host Conference Call and Webcast Friday, July 17 at 8 a.m. ET
ESTERO, Fla., July 16, 2015 Hertz Global Holdings, Inc. (NYSE: HTZ) (Hertz or the Company) today announced that it has filed its Annual Report on Form 10-K for the fiscal year ending December 31, 2014, which includes the restated results for 2012 and 2013 as well as selected unaudited restated financial information for 2011. In addition, the Company has filed its Quarterly Report on Form 10-Q for the period ending March 31, 2015. The Company is now up to date on all of its filings with the Securities and Exchange Commission (the SEC) and with its NYSE listing requirements.
Hertz also announced today progress on its planned separation of its equipment rental business (Hertz Equipment Rental Corporation or HERC) as well as its capital allocation, cost savings, capacity plans and fleet refresh.
John Tague, Hertz president and chief executive officer, said, Todays filings are an important step forward, and our attention is now on realizing Hertzs full potential. While much work remains, I thank the Hertz team for their efforts to bring our filings up to date while continuing to remain focused on our customers and our future.
Going forward, we are committed to developing a differentiated customer experience and premium brand position for Hertz that is number one in the industry, while revitalizing Dollar and Thrifty into leading value brands. We aspire to be the best rental car company in the world, recognized for the quality and convenience of our products and services, as well as the value we will create for shareholders.
2015 is a transition year for Hertz. We are making important investments in our fleet, systems and service, and adding new talent to complement the existing expertise throughout the Company. In addition, we are taking actions to rationalize the Companys cost platform, dramatically improve customer satisfaction and reset our capacity. These actions and early results are indicative of the progress we are making across the organization. Our commitment to the Companys share buyback program is reflective of our confidence in driving operating performance that is sustainable and enables us to return capital to shareholders.
Financial Restatement
As discussed in the Form 10-K filed today, the Company identified accounting misstatements for the years 2011 through 2013. The following information summarizes the impact of misstatements identified.
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Year Ended December 31, |
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(Unaudited) |
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Increase/(Decrease)* |
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(In millions) |
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2011 |
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2012 |
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2013 |
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As originally filed |
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GAAP pre-tax income |
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$ |
324 |
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$ |
451 |
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$ |
663 |
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GAAP net income attributable to Hertz |
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$ |
176 |
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$ |
243 |
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$ |
346 |
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Misstatements previously disclosed and included in the originally filed 10-K/A** |
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GAAP pre-tax income |
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$ |
(19 |
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$ |
(9 |
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N/A |
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GAAP net income attributable to Hertz |
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$ |
(12 |
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$ |
(4 |
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N/A |
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Additional misstatements identified |
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GAAP pre-tax income |
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$ |
(54 |
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$ |
(81 |
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$ |
(72 |
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GAAP net income attributable to Hertz |
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$ |
(19 |
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$ |
(58 |
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$ |
(51 |
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Cumulative misstatements (Misstatements previously revised in 10-K/A plus additional errors identified)*** |
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GAAP pre-tax income |
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$ |
(73 |
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$ |
(90 |
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$ |
(72 |
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GAAP net income attributable to Hertz |
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$ |
(31 |
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$ |
(62 |
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$ |
(51 |
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Cumulative misstatements as a % |
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GAAP pre-tax income |
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(23 |
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(20 |
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(11 |
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GAAP net income attributable to Hertz |
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(18 |
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(26 |
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(15 |
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*Increase/Decrease associated with misstatements and impact to GAAP pre-tax and GAAP net income.
** Amounts recorded as a revision in the 2013 Form 10-K/A.
*** In addition, $114 and $87 in errors reducing GAAP pre-tax income and GAAP net income, respectively, related to periods prior to 2011 were recorded as a cumulative adjustment to opening retained earnings for 2011. Of these amounts, $7 and $5 GAAP pre-tax and GAAP net income, respectively, were recorded in the 2013 Form 10-K/A as a revision.
The Form 10-K filed today contains audited restated financial information for 2012 and 2013, audited financial information for 2014, and unaudited restated selected financial information for 2011. This Form 10-K also contains quarterly information for the quarters in 2013, as restated, and 2014. The Form 10-Q filed today contains quarterly information for the first quarter of 2015.
The Company noted that the filing of its Form 10-K cures the filing deficiency notice from the New York Stock Exchange (the NYSE) as reported on March 24, 2015, and brings Hertz back into compliance with the NYSE listing requirements.
$1 Billion Share Repurchase Program
The Company reaffirmed its commitment to its previously announced $1 billion share repurchase program, and outlined its intent to execute consistent with announced year-end leverage targets, cash flow generation and other actions such as the contemplated sale of HERC operations in France and Spain, and the ultimate spin off of HERC.
Hertz Equipment Rental Corporation Separation
Hertz remains committed to the separation of its equipment rental business. With the Companys financial restatement finalized, Hertz is now focused on completing the audited carve out financial statements for HERC and requisite SEC filing activities for the separation.
Net cash received in connection with the HERC separation will be used to pay down Hertz debt and support additional share repurchases.
At separation, it is expected that HERC will have a leverage ratio of 3.5x to 4.0x net debt / Corporate EBITDA. HERC expects to focus its capital allocation on fleet investment to drive growth, opportunistic acquisitions and debt reduction.
The Company has put in place new leadership at HERC that is focused on delivering performance improvement in the core business and enabling profitable growth.
Capital Structure for Hertz Following HERC Separation
Post HERC separation, Hertz expects to have a year-end target net corporate leverage ratio of between 2.5x to 3.5x net corporate debt / Corporate EBITDA. The Company believes that this target will support its existing credit rating while providing the financial strength and flexibility to execute on planned technology, customer experience and brand investments.
Cost Reduction Program
In late 2014, the Company established an annualized cost savings goal of $100 million by year-end 2015. It subsequently increased that goal to $200 million in February 2015. As a result of the Companys ongoing efforts to optimize costs and increase operating efficiencies, Hertz now expects to achieve $300 million in annualized cost savings by year-end 2015, with approximately $200 million being realized in calendar year 2015.
The identified cost savings are expected to come largely from reductions in corporate and operations overhead, fleet management efficiency, and disciplined sales and marketing spending. Hertz expects to incur $30 million to $35 million of costs in 2015 in connection with these actions, of which $5 million to $10 million will be reflected in adjusted pre-tax income in 2015.
The Companys cost and operations review is ongoing, with the potential for additional savings as a result of technology-enabled efficiencies as well as other opportunities to improve productivity and effectiveness across the Company.
U.S. Car Rental
The Company is continuing to make progress on its work to modernize and align its car rental fleet more closely with customer demand and to improve its revenue execution capabilities:
· Additional reductions in fleet capacity growth: Hertz now expects full-year 2015 U.S. fleet growth of 0.5% to 1.5% over 2014 compared to its previous estimate of 1.5% to 2.5%. This reduction is, in part, enabled by improvements in fleet utilization.
· Fleet refresh target realized: Hertz has largely met its 2015 average fleet mileage targets through an aggressive disposal program as well as new fleet acquisitions. As a result, the Companys net promoter score related to vehicle condition, a key measure of customer satisfaction, is now higher than both 2013 and 2014 levels.
· Systems capability enhancements: Data management and forecasting systems have been enhanced to provide better visibility into fleet, pricing and demand trends.
· New talent complements existing expertise: Hertz has further strengthened its leadership team by adding expertise in the areas of revenue management, sales, customer service, information technology, human resources and fleet and procurement, which will enable the Company to deliver on its performance improvement plan.
Outlook
For the full year 2015, the Company forecasts the following:
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Full Year 2015 Forecast |
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Consolidated Corporate EBITDA |
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$1,450M - $1,550M |
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HERC Corporate EBITDA |
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$575M - $625M |
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U.S. RAC Monthly Depreciation per unit |
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$295 - $305 |
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U.S. RAC fleet capacity growth(1) |
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0.5% - 1.5% |
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Net non-fleet capex |
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$275M - $295M |
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(1) Excludes Advantage sublease and Hertz 24/7 vehicles
We indicated in May that the second quarter performance would be a continuation of the challenges we faced in the first three months of the year, which is consistent with our expectation, said Tague. This is a transition year, and we are not going to be satisfied with the results quarter-by-quarter. Progress on our initiatives to reduce capacity, meet our fleet refresh targets and capture cost savings will be evident in the third quarter, which we believe will be an inflection point for the year. And of course, we expect those benefits to become progressively more visible in 2016.
Conference Call and Webcast at 8 a.m. ET
Hertz will hold a conference call on Friday, July 17, 2015 at 8 a.m. ET to discuss todays news. To access the conference call live, dial 800-230-1074 in the U.S. and 612-234-9960 for international callers using the passcode: 364881 or listen via webcast at IR.Hertz.com.
The conference call will be available for replay one hour following the conclusion of the call until August 17, 2015 by calling 800-475-6701 in the U.S. or 320-365-3844 for international callers with the passcode: 364881.
The press release and slide presentation will be available on the Companys website, IR.Hertz.com.
Upcoming 2015 Events
The Company expects to announce its second quarter 2015 results in August. The date and time for the associated conference call and webcast will be announced shortly.
Hertz also expects to host an investor day in November 2015 to introduce its new leadership and management team and provide additional details on its performance improvement plan. The date, time and location for this meeting will be forthcoming.
About Hertz
Hertz operates the Hertz, Dollar, Thrifty and Firefly car rental brands in more than 10,300 corporate and licensee locations throughout approximately 145 countries in North America, Europe, Latin America, Asia, Australia, Africa, the Middle East and New Zealand. Hertz is the largest worldwide airport general use car rental company with more than 1,600 airport locations in the U.S. and more than 1,300 airport locations internationally. Product and service initiatives such as Hertz Gold Plus Rewards, NeverLost®, Carfirmations, Mobile Wi-Fi and unique vehicles offered through the Adrenaline, Dream, Green and Prestige Collections set Hertz apart from the competition. Additionally, Hertz owns the vehicle leasing and fleet management leader Donlen Corporation, operates the Hertz 24/7 hourly car rental business and sells vehicles through its Rent2Buy program. The Company also owns Hertz Equipment Rental Corporation (HERC), one of the largest equipment rental businesses with more than 350 locations worldwide offering a diverse line of equipment and tools for rent and sale. HERC primarily serves the construction, industrial, oil, gas, entertainment and government sectors. For more information about Hertz, visit: www.hertz.com.
Non-GAAP Financial Measures
EBITDA, Corporate EBITDA, net corporate debt, net debt and monthly depreciation per unit are non-GAAP financial measures. Management believes that EBITDA and Corporate EBITDA are useful in measuring the comparable results of the Company period-over-period. The GAAP measure most directly comparable to EBITDA and Corporate EBITDA is pre-tax income. Net corporate debt is calculated as total debt excluding fleet debt less cash and equivalents and corporate restricted cash. Corporate debt consists of our Senior Term Facility; Senior ABL Facility; Senior Notes; and certain other indebtedness of our domestic and foreign subsidiaries. For HERC, net debt is calculated as total debt less cash and equivalents and corporate restricted cash. Net corporate debt and net debt are important to management, investors and ratings agencies as it helps measure our leverage. Net corporate debt also assists in the evaluation of our ability to service our non-fleet-related debt without reference to the expense associated with the fleet debt, which is fully collateralized by assets not available to lenders under the non-fleet debt facilities. Monthly depreciation per unit is important as depreciation of revenue earning equipment and lease charges is one of our largest expenses for the car rental business and monthly depreciation per unit is reflective of how we are managing the costs of our fleet. The GAAP measure most directly comparable to monthly depreciation per unit is depreciation of revenue earning equipment and lease charges, net.
The Company believes that there is a degree of volatility with respect to certain of the Companys GAAP measures, in the case of EBITDA and Corporate EBITDA, primarily related to fair value accounting for its financial assets (which includes the Companys derivative financial instruments), its income tax reporting and certain adjustments made to arrive at the relevant non-GAAP measures, and in the case of monthly depreciation per unit primarily related to estimated residual values and fleet size and composition, which preclude the Company from providing accurate forecasted GAAP to non-GAAP reconciliations. Based on the above, the Company believes that providing estimates of the amounts that would be required to reconcile the range of the non-GAAP EBITDA or Corporate EBITDA to forecasted pre-tax income or non-GAAP monthly depreciation per unit to depreciation of revenue earning equipment and lease charges, net, would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above.
Cautionary Note Concerning Forward Looking Statements
Certain statements contained in this release, and in related comments by the Companys management, include forward- looking statements. Forward-looking statements include information concerning the Companys liquidity and its possible or assumed future results of operations, including descriptions of its business strategies. These statements often include words such as believe, becoming, expect, project, potential, preliminary, anticipate, intend, plan, estimate, seek, will, may, would, should, could, forecasts or similar expressions. These statements are based on certain assumptions that the Company has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate in these circumstances. The Company believes these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and the Companys actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent reports on SEC Forms 10-K, 10-Q and 8-K.
Among other items, such factors could include: the effect of the restatement of our previously issued financial results and any claims, investigations or proceedings arising as a result; our ability to remediate material weaknesses in our internal controls over financial reporting; levels of travel demand, particularly with respect to airline passenger traffic in the United States and in global markets; the effect of our proposed separation of our equipment rental business and ability to obtain the expected benefits of any related transaction; significant changes in the competitive environment, including as a result of industry consolidation, and the effect of competition in our markets, including on our pricing policies or use of incentives; occurrences that disrupt rental activity during our peak periods; our ability to achieve cost savings and efficiencies and realize opportunities to increase productivity and profitability; 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; 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 integrate the car rental operations of Dollar Thrifty and realize operational efficiencies from the acquisition; our ability to maintain access to third-party distribution channels, including current or favorable prices, commission structures and transaction volumes; the operational and profitability impact of the divestitures that we agreed to undertake in order to secure regulatory approval for the acquisition of Dollar Thrifty; 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; 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 rental car industry on commercially reasonable terms; any impact on us from the actions of our licensees, 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; 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; changes to our senior management team; the effect of tangible and intangible asset impairment charges; our exposure to uninsured claims in excess of historical levels; the impact of our derivative instruments, which can be affected by fluctuations in interest rates and commodity prices; and our exposure to fluctuations in foreign exchange rates.
Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K.
You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACTS:
Investor Relations:
Leslie Hunziker
239-552-5700
investorrelations@hertz.com
Media:
Hertz Media Relations
239-598-6300
mediarelations@hertz.com
Gemma Hart, Brunswick Group
212-333-3810
ghart@brunswickgroup.com
Exhibit 99.2
FINANCIAL INFORMATION AND OPERATING DATA
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
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Three Months Ended |
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Three Months Ended |
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(In millions, except per share data) |
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2015 |
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2014 |
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2013 |
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2013 |
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2013 |
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Total revenues |
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$ |
2,454 |
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$ |
2,536 |
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$ |
2,437 |
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$ |
2,437 |
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$ |
2,436 |
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Expenses: |
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Direct operating |
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1,408 |
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1,443 |
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1,364 |
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1,358 |
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1,351 |
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Depreciation of revenue earning equipment and lease charges |
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707 |
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726 |
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589 |
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580 |
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587 |
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Selling, general and administrative |
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266 |
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276 |
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250 |
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248 |
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252 |
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Interest expense, net |
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154 |
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156 |
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175 |
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175 |
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175 |
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Other income, net |
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5 |
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(3 |
) |
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2 |
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(1 |
) | |||||
Total expenses |
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2,540 |
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2,598 |
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2,378 |
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2,363 |
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2,364 |
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Income (loss) before income taxes |
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(86 |
) |
(62 |
) |
59 |
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74 |
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72 |
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(Provision) benefit for taxes on income (loss) |
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16 |
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(7 |
) |
(53 |
) |
(58 |
) |
(54 |
) | |||||
Net income (loss) |
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$ |
(70 |
) |
$ |
(69 |
) |
$ |
6 |
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$ |
16 |
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$ |
18 |
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Weighted average number of shares outstanding: |
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Basic |
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459 |
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447 |
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416 |
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416 |
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416 |
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Diluted |
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459 |
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447 |
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461 |
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461 |
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461 |
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Earnings per share: |
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Basic |
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$ |
(0.15 |
) |
$ |
(0.15 |
) |
$ |
0.01 |
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$ |
0.04 |
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$ |
0.04 |
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Diluted |
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$ |
(0.15 |
) |
$ |
(0.15 |
) |
$ |
0.02 |
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$ |
0.04 |
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$ |
0.04 |
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Interest expense Fleet |
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$ |
57 |
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$ |
62 |
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$ |
74 |
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NR |
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$ |
74 |
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Interest expense, net Corporate |
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97 |
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94 |
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101 |
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NR |
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101 |
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Corporate EBITDA (a) |
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226 |
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255 |
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359 |
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NR |
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367 |
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Adjusted pre-tax Income (loss) (a) |
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3 |
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24 |
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136 |
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NR |
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145 |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule II.
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET DATA
|
|
As of March 31, |
|
As of December |
| |||||
(In millions) |
|
2015 |
|
2014 |
|
As Revised |
| |||
Cash and cash equivalents |
|
$ |
585 |
|
$ |
498 |
|
$ |
411 |
|
Restricted cash |
|
411 |
|
453 |
|
861 |
| |||
Revenue earning equipment: |
|
|
|
|
|
|
| |||
U.S. Car Rental |
|
8,814 |
|
8,662 |
|
8,629 |
| |||
International Car Rental |
|
2,021 |
|
2,245 |
|
2,047 |
| |||
Worldwide Equipment Rental |
|
2,473 |
|
2,440 |
|
2,416 |
| |||
All Other Operations |
|
1,285 |
|
1,157 |
|
1,099 |
| |||
Total revenue earning equipment, net |
|
14,593 |
|
14,504 |
|
14,191 |
| |||
Total assets |
|
24,602 |
|
24,470 |
|
24,423 |
| |||
Total debt |
|
16,351 |
|
16,125 |
|
16,309 |
| |||
Net Fleet debt (a) |
|
9,548 |
|
9,148 |
|
9,034 |
| |||
Net Corporate debt (a) (b) |
|
5,807 |
|
6,026 |
|
6,003 |
| |||
Total equity |
|
2,349 |
|
2,491 |
|
2,567 |
| |||
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule V.
(b) Fleet related to Hertz Equipment Rental Corporation is funded via Net Corporate Debt.
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
|
|
Three Months Ended |
|
Three Months |
|
Three Months |
| |||||||||
(In millions) |
|
2015 |
|
2014 |
|
2013 |
|
2013 |
|
2013 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash provided by (used in): |
|
|
|
|
|
|
|
|
|
|
| |||||
Operating activities |
|
$ |
782 |
|
$ |
760 |
|
$ |
746 |
|
$ |
747 |
|
$ |
743 |
|
Investing activities |
|
(1,166 |
) |
(372 |
) |
(946 |
) |
(950 |
) |
(932 |
) | |||||
Financing activities |
|
499 |
|
(301 |
) |
317 |
|
318 |
|
318 |
| |||||
Effect of exchange rate changes |
|
(20 |
) |
|
|
(8 |
) |
(8 |
) |
(8 |
) | |||||
Net change in cash and cash equivalents |
|
$ |
95 |
|
$ |
87 |
|
$ |
109 |
|
$ |
107 |
|
$ |
121 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Fleet growth (a) |
|
$ |
171 |
|
$ |
|
|
$ |
(196 |
) |
NR |
|
$ |
(194 |
) | |
Free cash flow (a) |
|
$ |
189 |
|
$ |
3 |
|
$ |
(76 |
) |
$ |
(73 |
) |
$ |
(79 |
) |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedules III and IV.
SELECTED UNAUDITED OPERATING DATA BY SEGMENT
|
|
Three Months Ended March 31, |
|
Three Months |
| ||||||||
|
|
2015 |
|
2014 |
|
2013 |
|
2013 |
| ||||
U.S. Car Rental |
|
|
|
|
|
|
|
|
| ||||
Transaction days (in thousands) |
|
32,036 |
|
32,360 |
|
30,064 |
|
30,064 |
| ||||
Total RPD (a) |
|
$ |
47.07 |
|
$ |
47.90 |
|
$ |
48.63 |
|
$ |
49.35 |
|
Average fleet |
|
489,300 |
|
491,500 |
|
454,000 |
|
457,700 |
| ||||
Fleet efficiency(a) |
|
73 |
% |
75 |
% |
77 |
% |
NR |
| ||||
Net depreciation per unit per month(a) |
|
$ |
287 |
|
$ |
288 |
|
$ |
209 |
|
NR |
| |
Program cars as a percentage of total average fleet at period end |
|
24 |
% |
15 |
% |
4 |
% |
NR |
| ||||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
71 |
|
$ |
119 |
|
$ |
232 |
|
NR |
| |
International Car Rental |
|
|
|
|
|
|
|
|
| ||||
Transaction days (in thousands) |
|
9,775 |
|
9,395 |
|
9,006 |
|
9,006 |
| ||||
Total RPD (a)(b) |
|
$ |
46.96 |
|
$ |
51.41 |
|
$ |
51.63 |
|
$ |
52.76 |
|
Average Fleet |
|
144,000 |
|
141,400 |
|
137,500 |
|
137,500 |
| ||||
Fleet efficiency(a) |
|
75 |
% |
74 |
% |
73 |
% |
NR |
| ||||
Net depreciation per unit per month(a) |
|
$ |
231 |
|
$ |
266 |
|
$ |
301 |
|
NR |
| |
Program cars as a percentage of total average fleet at period end |
|
38 |
% |
34 |
% |
28 |
% |
NR |
| ||||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
8 |
|
$ |
(39 |
) |
$ |
(47 |
) |
NR |
| |
Worldwide Equipment Rental |
|
|
|
|
|
|
|
|
| ||||
Dollar utilization(a) |
|
34 |
% |
34 |
% |
35 |
% |
NR |
| ||||
Time utilization(a) |
|
61 |
% |
61 |
% |
61 |
% |
NR |
| ||||
Rental and rental related revenue (in millions) (a)(b) |
|
$ |
336 |
|
$ |
334 |
|
$ |
320 |
|
$ |
322 |
|
Same store revenue growth, including growth initiatives (b) |
|
1 |
% |
5 |
% |
13 |
% |
13 |
% | ||||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
33 |
|
$ |
51 |
|
$ |
45 |
|
$ |
46 |
|
All Other Operations |
|
|
|
|
|
|
|
|
| ||||
Average fleet Donlen |
|
168,600 |
|
176,800 |
|
165,600 |
|
165,600 |
| ||||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
16 |
|
$ |
16 |
|
$ |
13 |
|
NR |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedules II and V.
(b) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
SUPPLEMENTAL SCHEDULES AND DEFINITIONS
The following Supplemental Schedules and definitions are provided to present segment results and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules we provide definitions for terminology used throughout this press release.
Supplemental Schedule I
HERTZ GLOBAL HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
|
|
Three Months Ended March 31, 2015 |
|
Three Months Ended March 31, 2014 |
| ||||||||||||||||||||||||||||||||
(In millions) |
|
U.S. Car |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
U.S. Car |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
| ||||||||||||
Total revenues: |
|
$ |
1,520 |
|
$ |
436 |
|
$ |
355 |
|
$ |
143 |
|
$ |
|
|
$ |
2,454 |
|
$ |
1,557 |
|
$ |
482 |
|
$ |
358 |
|
$ |
139 |
|
$ |
|
|
$ |
2,536 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Direct operating |
|
926 |
|
267 |
|
208 |
|
6 |
|
1 |
|
1,408 |
|
907 |
|
329 |
|
200 |
|
7 |
|
|
|
1,443 |
| ||||||||||||
Depreciation of revenue earning equipment and lease charges |
|
421 |
|
95 |
|
76 |
|
115 |
|
|
|
707 |
|
424 |
|
113 |
|
78 |
|
111 |
|
|
|
726 |
| ||||||||||||
Selling, general and administrative |
|
98 |
|
57 |
|
46 |
|
8 |
|
57 |
|
266 |
|
101 |
|
65 |
|
32 |
|
6 |
|
72 |
|
276 |
| ||||||||||||
Interest expense, net |
|
40 |
|
15 |
|
15 |
|
2 |
|
82 |
|
154 |
|
38 |
|
20 |
|
13 |
|
4 |
|
81 |
|
156 |
| ||||||||||||
Other (income) expense, net |
|
|
|
|
|
(1 |
) |
|
|
6 |
|
5 |
|
(7 |
) |
|
|
(1 |
) |
|
|
5 |
|
(3 |
) | ||||||||||||
Total expenses |
|
1,485 |
|
434 |
|
344 |
|
131 |
|
146 |
|
2,540 |
|
1,463 |
|
527 |
|
322 |
|
128 |
|
158 |
|
2,598 |
| ||||||||||||
Income (loss) before income taxes |
|
$ |
35 |
|
$ |
2 |
|
$ |
11 |
|
$ |
12 |
|
$ |
(146 |
) |
$ |
(86 |
) |
$ |
94 |
|
$ |
(45 |
) |
$ |
36 |
|
$ |
11 |
|
$ |
(158 |
) |
$ |
(62 |
) |
Provision for taxes on income |
|
|
|
|
|
|
|
|
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
(7 |
) | ||||||||||||
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
$ |
(70 |
) |
|
|
|
|
|
|
|
|
|
|
$ |
(69 |
) |
|
|
Three Months Ended March 31, 2013 |
|
Three Months |
|
Three Months |
| ||||||||||||||||||
(In millions) |
|
U.S. Car |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
Consolidated |
|
Consolidated |
| ||||||||
Total revenues: |
|
$ |
1,484 |
|
$ |
471 |
|
$ |
353 |
|
$ |
129 |
|
$ |
|
|
$ |
2,437 |
|
$ |
2,437 |
|
$ |
2,436 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Direct operating |
|
847 |
|
313 |
|
203 |
|
6 |
|
(5 |
) |
1,364 |
|
1,358 |
|
1,351 |
| ||||||||
Depreciation of revenue earning equipment and lease charges |
|
285 |
|
125 |
|
74 |
|
105 |
|
|
|
589 |
|
580 |
|
587 |
| ||||||||
Selling, general and administrative |
|
101 |
|
65 |
|
33 |
|
7 |
|
44 |
|
250 |
|
248 |
|
252 |
| ||||||||
Interest expense, net |
|
46 |
|
26 |
|
13 |
|
2 |
|
88 |
|
175 |
|
175 |
|
175 |
| ||||||||
Other (income) expense, net |
|
1 |
|
|
|
(1 |
) |
|
|
|
|
|
|
2 |
|
(1 |
) | ||||||||
Total expenses |
|
1,280 |
|
529 |
|
322 |
|
120 |
|
127 |
|
2,378 |
|
2,363 |
|
2,364 |
| ||||||||
Income (loss) before income taxes |
|
$ |
204 |
|
$ |
(58 |
) |
$ |
31 |
|
$ |
9 |
|
$ |
(127 |
) |
$ |
59 |
|
$ |
74 |
|
$ |
72 |
|
Provision for taxes on income |
|
|
|
|
|
|
|
|
|
|
|
(53 |
) |
(58 |
) |
(54 |
) | ||||||||
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
$ |
6 |
|
$ |
16 |
|
$ |
18 |
|
Supplemental Schedule II
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES
TO EBITDA, CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME BY SEGMENT
Unaudited
|
|
Three Months Ended March 31, 2015 |
|
Three Months Ended March 31, 2014 |
| ||||||||||||||||||||||||||||||||
(In millions) |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
| ||||||||||||
Income (loss) before income taxes |
|
$ |
35 |
|
$ |
2 |
|
$ |
11 |
|
$ |
12 |
|
$ |
(146 |
) |
$ |
(86 |
) |
$ |
94 |
|
$ |
(45 |
) |
$ |
36 |
|
$ |
11 |
|
$ |
(158 |
) |
$ |
(62 |
) |
Depreciation and amortization |
|
472 |
|
105 |
|
95 |
|
117 |
|
4 |
|
793 |
|
479 |
|
123 |
|
96 |
|
113 |
|
5 |
|
816 |
| ||||||||||||
Interest, net of interest income |
|
40 |
|
15 |
|
15 |
|
2 |
|
82 |
|
154 |
|
38 |
|
20 |
|
13 |
|
4 |
|
81 |
|
156 |
| ||||||||||||
EBITDA |
|
$ |
547 |
|
$ |
122 |
|
$ |
121 |
|
$ |
131 |
|
$ |
(60 |
) |
$ |
861 |
|
$ |
611 |
|
$ |
98 |
|
$ |
145 |
|
$ |
128 |
|
$ |
(72 |
) |
$ |
910 |
|
Car rental fleet depreciation |
|
(421 |
) |
(95 |
) |
|
|
(115 |
) |
|
|
(631 |
) |
(424 |
) |
(113 |
) |
|
|
(111 |
) |
1 |
|
(647 |
) | ||||||||||||
Car rental fleet interest |
|
(43 |
) |
(15 |
) |
|
|
(3 |
) |
|
|
(61 |
) |
(39 |
) |
(20 |
) |
|
|
(4 |
) |
|
|
(63 |
) | ||||||||||||
Car rental fleet debt - related charges |
|
8 |
|
2 |
|
|
|
1 |
|
|
|
11 |
|
1 |
|
3 |
|
|
|
2 |
|
|
|
6 |
| ||||||||||||
Non-cash stock-based employee compensation charges |
|
|
|
|
|
|
|
|
|
4 |
|
4 |
|
|
|
|
|
|
|
|
|
8 |
|
8 |
| ||||||||||||
Restructuring and restructuring related charges |
|
2 |
|
2 |
|
2 |
|
|
|
14 |
|
20 |
|
11 |
|
5 |
|
3 |
|
|
|
20 |
|
39 |
| ||||||||||||
Acquisition related costs and charges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7 |
|
7 |
| ||||||||||||
Integration expenses |
|
(1 |
) |
|
|
|
|
|
|
1 |
|
|
|
(2 |
) |
|
|
|
|
|
|
2 |
|
|
| ||||||||||||
Equipment Rental spin-off costs |
|
|
|
|
|
9 |
|
|
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Relocation costs |
|
(2 |
) |
|
|
|
|
|
|
2 |
|
|
|
(2 |
) |
|
|
|
|
|
|
2 |
|
|
| ||||||||||||
Premiums paid on debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Loss on extinguishment of debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Impairment charges and asset write-downs |
|
9 |
|
|
|
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Other extraordinary, unusual or non-recurring items |
|
1 |
|
|
|
|
|
|
|
3 |
|
4 |
|
(1 |
) |
(5 |
) |
1 |
|
|
|
|
|
(5 |
) | ||||||||||||
Corporate EBITDA |
|
$ |
100 |
|
$ |
16 |
|
$ |
132 |
|
$ |
14 |
|
$ |
(36 |
) |
$ |
226 |
|
$ |
155 |
|
$ |
(32 |
) |
$ |
149 |
|
$ |
15 |
|
$ |
(32 |
) |
$ |
255 |
|
Non-fleet depreciation and amortization |
|
(51 |
) |
(10 |
) |
(95 |
) |
(2 |
) |
(4 |
) |
(162 |
) |
(55 |
) |
(10 |
) |
(96 |
) |
(2 |
) |
(6 |
) |
(169 |
) | ||||||||||||
Non-fleet interest, net of interest income |
|
3 |
|
|
|
(15 |
) |
1 |
|
(82 |
) |
(93 |
) |
1 |
|
|
|
(13 |
) |
|
|
(81 |
) |
(93 |
) | ||||||||||||
Non-fleet debt - related charges |
|
|
|
|
|
1 |
|
|
|
4 |
|
5 |
|
|
|
|
|
2 |
|
|
|
4 |
|
6 |
| ||||||||||||
Non-cash stock-based employee compensation charges |
|
|
|
|
|
|
|
|
|
(4 |
) |
(4 |
) |
|
|
|
|
|
|
|
|
(8 |
) |
(8 |
) | ||||||||||||
Acquisition accounting |
|
19 |
|
2 |
|
10 |
|
3 |
|
(3 |
) |
31 |
|
18 |
|
3 |
|
10 |
|
3 |
|
(1 |
) |
33 |
| ||||||||||||
Adjusted Pre-Tax Income (Loss) |
|
$ |
71 |
|
$ |
8 |
|
$ |
33 |
|
$ |
16 |
|
$ |
(125 |
) |
$ |
3 |
|
$ |
119 |
|
$ |
(39 |
) |
$ |
52 |
|
$ |
16 |
|
$ |
(124 |
) |
$ |
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
|
Three Months Ended March 31, 2013 |
|
Three Months |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
(In millions) |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Income (loss) before income taxes |
|
$ |
204 |
|
$ |
(58 |
) |
$ |
31 |
|
$ |
9 |
|
$ |
(127 |
) |
$ |
59 |
|
$ |
72 |
|
|
|
|
|
|
|
|
|
|
| |||||
Depreciation and amortization |
|
338 |
|
133 |
|
93 |
|
107 |
|
2 |
|
673 |
|
669 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Interest, net of interest income |
|
46 |
|
26 |
|
13 |
|
2 |
|
88 |
|
175 |
|
175 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
EBITDA |
|
$ |
588 |
|
$ |
101 |
|
$ |
137 |
|
$ |
118 |
|
$ |
(37 |
) |
$ |
907 |
|
$ |
916 |
|
|
|
|
|
|
|
|
|
|
| |||||
Car rental fleet depreciation |
|
(285 |
) |
(125 |
) |
|
|
(105 |
) |
|
|
(515 |
) |
(513 |
) |
|
|
|
|
|
|
|
|
|
| ||||||||||||
Car rental fleet interest |
|
(44 |
) |
(24 |
) |
|
|
(2 |
) |
(1 |
) |
(71 |
) |
(71 |
) |
|
|
|
|
|
|
|
|
|
| ||||||||||||
Car rental fleet debt - related charges |
|
2 |
|
3 |
|
|
|
|
|
|
|
5 |
|
5 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Non-cash stock-based employee compensation charges |
|
|
|
|
|
|
|
|
|
8 |
|
8 |
|
8 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Restructuring and restructuring related charges |
|
1 |
|
5 |
|
|
|
|
|
1 |
|
7 |
|
8 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Acquisition related costs and charges |
|
|
|
|
|
|
|
|
|
3 |
|
3 |
|
3 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Integration expenses |
|
5 |
|
|
|
|
|
|
|
6 |
|
11 |
|
11 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Equipment Rental spin-off costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Relocation costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Premiums paid on debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Loss on extinguishment of debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Impairment charges and asset write-downs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Other extraordinary, unusual or non-recurring items |
|
2 |
|
1 |
|
3 |
|
|
|
(2 |
) |
4 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Corporate EBITDA |
|
$ |
269 |
|
$ |
(39 |
) |
$ |
140 |
|
$ |
11 |
|
$ |
(22 |
) |
$ |
359 |
|
$ |
367 |
|
|
|
|
|
|
|
|
|
|
| |||||
Non-fleet depreciation and amortization |
|
(53 |
) |
(8 |
) |
(93 |
) |
(2 |
) |
(2 |
) |
(158 |
) |
(156 |
) |
|
|
|
|
|
|
|
|
|
| ||||||||||||
Non-fleet interest, net of interest income |
|
(2 |
) |
(2 |
) |
(13 |
) |
|
|
(87 |
) |
(104 |
) |
(104 |
) |
|
|
|
|
|
|
|
|
|
| ||||||||||||
Non-fleet debt - related charges |
|
|
|
|
|
1 |
|
|
|
11 |
|
12 |
|
12 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Non-cash stock-based employee compensation charges |
|
|
|
|
|
|
|
|
|
(8 |
) |
(8 |
) |
(8 |
) |
|
|
|
|
|
|
|
|
|
| ||||||||||||
Acquisition accounting |
|
18 |
|
2 |
|
10 |
|
4 |
|
1 |
|
35 |
|
34 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Adjusted Pre-Tax Income (Loss) |
|
$ |
232 |
|
$ |
(47 |
) |
$ |
45 |
|
$ |
13 |
|
$ |
(107 |
) |
$ |
136 |
|
$ |
145 |
|
|
|
|
|
|
|
|
|
|
|
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
FREE CASH FLOW
Unaudited
|
|
Three Months Ended |
|
Three Months Ended |
| |||||||||||
|
|
March 31, |
|
March 31, |
| |||||||||||
(In millions) |
|
2015 |
|
2014 |
|
2013 |
|
2013 |
|
2013 |
| |||||
Income before income taxes |
|
$ |
(86 |
) |
$ |
(62 |
) |
$ |
59 |
|
$ |
74 |
|
$ |
72 |
|
Depreciation and amortization, non-fleet assets |
|
86 |
|
90 |
|
84 |
|
81 |
|
51 |
| |||||
Amortization of debt discount and related charges |
|
16 |
|
11 |
|
17 |
|
17 |
|
48 |
| |||||
Cash paid for income taxes |
|
(4 |
) |
(14 |
) |
(6 |
) |
(6 |
) |
(6 |
) | |||||
Changes in assets and liabilities, net of effects of acquisitions, and other |
|
81 |
|
28 |
|
20 |
|
16 |
|
6 |
| |||||
Net cash provided by operating activities excluding depreciation of revenue earning equipment |
|
93 |
|
53 |
|
174 |
|
182 |
|
172 |
| |||||
U.S. car rental fleet growth (a) |
|
(12 |
) |
(71 |
) |
(318 |
) |
NR |
|
NR |
| |||||
International car rental fleet growth (a) |
|
203 |
|
88 |
|
168 |
|
NR |
|
NR |
| |||||
Equipment rental fleet growth (a) |
|
18 |
|
(10 |
) |
(41 |
) |
NR |
|
NR |
| |||||
All other operations rental fleet growth (a) |
|
(38 |
) |
(7 |
) |
(5 |
) |
NR |
|
NR |
| |||||
Property and equipment expenditures, net of disposals |
|
(75 |
) |
(50 |
) |
(54 |
) |
(57 |
) |
(57 |
) | |||||
Net investment activity |
|
96 |
|
(50 |
) |
(250 |
) |
(255 |
) |
(251 |
) | |||||
Free cash flow |
|
$ |
189 |
|
$ |
3 |
|
$ |
(76 |
) |
$ |
(73 |
) |
$ |
(79 |
) |
(a) Historically, fleet growth has not been reported on a segment basis.
Supplemental Schedule IV
HERTZ GLOBAL HOLDINGS, INC.
FLEET GROWTH
Unaudited
|
|
Three Months Ended March 31, 2015 |
|
Three Months Ended March 31, 2014 |
|
Three Months Ended March 31, 2013 |
|
Three Months |
| ||||||||||||||||||||||||||||||||||||||||
(In millions) |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide Equipment |
|
All Other |
|
Consolidated |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Consolidated |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Consolidated |
|
Consolidated |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Revenue earning equipment expenditures |
|
$ |
(2,444 |
) |
$ |
(515 |
) |
$ |
(121 |
) |
$ |
(358 |
) |
$ |
(3,438 |
) |
$ |
(1,589 |
) |
$ |
(509 |
) |
$ |
(109 |
) |
$ |
(375 |
) |
$ |
(2,582 |
) |
$ |
(2,385 |
) |
$ |
(485 |
) |
$ |
(154 |
) |
$ |
(230 |
) |
$ |
(3,254 |
) |
$ |
(3,253 |
) |
Proceeds from disposal of revenue earning equipment |
|
1,368 |
|
658 |
|
62 |
|
201 |
|
2,289 |
|
1,018 |
|
610 |
|
21 |
|
211 |
|
1,860 |
|
1,447 |
|
625 |
|
39 |
|
125 |
|
2,236 |
|
2,238 |
| ||||||||||||||||
Net revenue earning equipment capital expenditures |
|
(1,076 |
) |
143 |
|
(59 |
) |
(157 |
) |
(1,149 |
) |
(571 |
) |
101 |
|
(88 |
) |
(164 |
) |
(722 |
) |
(938 |
) |
140 |
|
(115 |
) |
(105 |
) |
(1,018 |
) |
(1,015 |
) | ||||||||||||||||
Depreciation of revenue earning equipment |
|
421 |
|
77 |
|
77 |
|
113 |
|
688 |
|
422 |
|
95 |
|
78 |
|
111 |
|
706 |
|
285 |
|
109 |
|
74 |
|
104 |
|
572 |
|
572 |
| ||||||||||||||||
Financing activity related to car rental fleet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Borrowings |
|
2,516 |
|
245 |
|
|
|
83 |
|
2,844 |
|
310 |
|
270 |
|
|
|
400 |
|
980 |
|
1,543 |
|
245 |
|
|
|
|
|
1,788 |
|
NR |
| ||||||||||||||||
Payments |
|
(2,007 |
) |
(278 |
) |
|
|
(67 |
) |
(2,352 |
) |
(631 |
) |
(354 |
) |
|
|
(350 |
) |
(1,335 |
) |
(1,366 |
) |
(292 |
) |
|
|
(1 |
) |
(1,659 |
) |
NR |
| ||||||||||||||||
Restricted cash changes |
|
134 |
|
16 |
|
|
|
(10 |
) |
140 |
|
399 |
|
(24 |
) |
|
|
(4 |
) |
371 |
|
158 |
|
(34 |
) |
|
|
(3 |
) |
121 |
|
NR |
| ||||||||||||||||
Net financing activity related to car rental fleet |
|
643 |
|
(17 |
) |
|
|
6 |
|
632 |
|
78 |
|
(108 |
) |
|
|
46 |
|
16 |
|
335 |
|
(81 |
) |
|
|
(4 |
) |
250 |
|
250 |
| ||||||||||||||||
Fleet growth |
|
$ |
(12 |
) |
$ |
203 |
|
$ |
18 |
|
$ |
(38 |
) |
$ |
171 |
|
$ |
(71 |
) |
$ |
88 |
|
$ |
(10 |
) |
$ |
(7 |
) |
$ |
|
|
$ |
(318 |
) |
$ |
168 |
|
$ |
(41 |
) |
$ |
(5 |
) |
$ |
(196 |
) |
$ |
(194 |
) |
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS
Unaudited
NET CORPORATE DEBT, NET FLEET DEBT AND TOTAL NET DEBT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2013 |
|
As of December 31, 2013 |
| ||||||||||||||||||||
|
|
As of March 31, 2015 |
|
As of March 31, 2014 |
|
As Restated |
|
As Reported |
| ||||||||||||||||||||||||||||
(In millions) |
|
Fleet |
|
Corporate |
|
Total |
|
Fleet |
|
Corporate |
|
Total |
|
Fleet |
|
Corporate |
|
Total |
|
Fleet |
|
Corporate |
|
Total |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Debt |
|
$ |
9,917 |
|
$ |
6,434 |
|
$ |
16,351 |
|
$ |
9,548 |
|
$ |
6,577 |
|
$ |
16,125 |
|
$ |
9,806 |
|
$ |
6,503 |
|
$ |
16,309 |
|
$ |
9,806 |
|
$ |
6,503 |
|
$ |
16,309 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Cash and cash equivalents |
|
|
|
585 |
|
585 |
|
|
|
498 |
|
498 |
|
|
|
411 |
|
411 |
|
|
|
423 |
|
423 |
| ||||||||||||
Restricted cash |
|
369 |
|
42 |
|
411 |
|
400 |
|
53 |
|
453 |
|
772 |
|
89 |
|
861 |
|
772 |
|
88 |
|
860 |
| ||||||||||||
Net debt |
|
$ |
9,548 |
|
$ |
5,807 |
|
$ |
15,355 |
|
$ |
9,148 |
|
$ |
6,026 |
|
$ |
15,174 |
|
$ |
9,034 |
|
$ |
6,003 |
|
$ |
15,037 |
|
$ |
9,034 |
|
$ |
5,992 |
|
$ |
15,026 |
|
WORLDWIDE EQUIPMENT RENTAL AND RENTAL RELATED REVENUE
|
|
Three Months Ended March 31, |
| ||||||||||
(In millions) |
|
2015 |
|
2014 |
|
2013 |
|
2013 |
| ||||
Equipment rental segment revenues |
|
$ |
355 |
|
$ |
358 |
|
$ |
353 |
|
$ |
351 |
|
Equipment sales and other revenue |
|
(23 |
) |
(26 |
) |
(30 |
) |
(30 |
) | ||||
Rental and rental related revenue at actual rates |
|
332 |
|
332 |
|
323 |
|
321 |
| ||||
Foreign currency adjustment (a) |
|
4 |
|
2 |
|
(3 |
) |
1 |
| ||||
Rental and rental related revenue |
|
$ |
336 |
|
$ |
334 |
|
$ |
320 |
|
$ |
322 |
|
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
U.S. Car Rental Segment
|
|
Three Months Ended March 31, |
| |||||||
(In millions, except as noted) |
|
2015 |
|
2014 |
|
2013 |
| |||
|
|
|
|
|
|
|
| |||
Revenues |
|
$ |
1,520 |
|
$ |
1,557 |
|
$ |
1,484 |
|
Advantage sublease revenue |
|
|
|
|
|
(20 |
) | |||
Ancillary retail car sales revenue |
|
(12 |
) |
(7 |
) |
(2 |
) | |||
Total rental revenue |
|
$ |
1,508 |
|
$ |
1,550 |
|
$ |
1,462 |
|
Transaction days (in thousands) |
|
32,036 |
|
32,360 |
|
30,064 |
| |||
Total RPD (in whole dollars) |
|
$ |
47.07 |
|
$ |
47.90 |
|
$ |
48.63 |
|
|
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
32,036 |
|
32,360 |
|
30,064 |
| |||
Average Fleet |
|
489,300 |
|
491,500 |
|
454,000 |
| |||
Advantage sublease vehicles |
|
|
|
(11,000 |
) |
(21,100 |
) | |||
Hertz 24/7 vehicles |
|
|
|
(1,000 |
) |
(1,000 |
) | |||
Average Fleet used to calculate fleet efficiency |
|
489,300 |
|
479,500 |
|
431,900 |
| |||
Number of days in period |
|
90 |
|
90 |
|
90 |
| |||
Average fleet multiplied by number of dates in period (in thousands) |
|
|
44,037 |
|
|
43,155 |
|
|
38,871 |
|
Fleet efficiency |
|
73 |
% |
75 |
% |
77 |
% | |||
|
|
|
|
|
|
|
| |||
Depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
421 |
|
$ |
424 |
|
$ |
285 |
|
Average fleet |
|
489,300 |
|
491,500 |
|
454,000 |
| |||
Depreciation of revenue earning equipment and lease charges, net divided by average fleet |
|
$ |
860 |
|
$ |
863 |
|
$ |
628 |
|
Number of months in period |
|
3 |
|
3 |
|
3 |
| |||
Net depreciation per unit per month |
|
$ |
287 |
|
$ |
288 |
|
$ |
209 |
|
International Car Rental
|
|
Three Months Ended March 31, |
| |||||||
(in millions, except as noted) |
|
2015 |
|
2014 |
|
2013 |
| |||
Revenues |
|
$ |
436 |
|
$ |
482 |
|
$ |
471 |
|
Foreign currency adjustment (a) |
|
23 |
|
(45 |
) |
(6 |
) | |||
Total rental revenue |
|
$ |
459 |
|
$ |
437 |
|
$ |
465 |
|
Transaction days (in thousands) |
|
9,775 |
|
9,395 |
|
9,006 |
| |||
Total RPD (in whole dollars) |
|
$ |
46.96 |
|
$ |
46.51 |
|
$ |
51.63 |
|
|
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
9,775 |
|
9,395 |
|
9,006 |
| |||
Average Fleet |
|
144,000 |
|
141,400 |
|
137,500 |
| |||
Number of days in period |
|
90 |
|
90 |
|
90 |
| |||
Average fleet multiplied by number of days in period |
|
12,960 |
|
12,726 |
|
12,375 |
| |||
Fleet efficiency |
|
75 |
% |
74 |
% |
73 |
% | |||
|
|
|
|
|
|
|
| |||
Depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
95 |
|
$ |
113 |
|
$ |
125 |
|
Foreign currency adjustment (in millions) (a) |
|
5 |
|
|
|
(1 |
) | |||
Adjusted depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
100 |
|
$ |
113 |
|
$ |
124 |
|
Average fleet |
|
144,000 |
|
141,400 |
|
137,500 |
| |||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet |
|
$ |
694 |
|
$ |
721 |
|
$ |
902 |
|
Number of months in period |
|
3 |
|
3 |
|
3 |
| |||
Net depreciation per unit per month |
|
$ |
231 |
|
$ |
240 |
|
$ |
301 |
|
All Car Rental |
|
|
|
|
|
|
Three Months |
|
|
|
|
| |
(In millions, except as noted) |
|
2013 |
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Revenues |
|
$ |
2,085 |
|
|
|
|
|
Non-rental revenue |
|
(128 |
) |
|
|
|
| |
Foreign currency adjustment |
|
2 |
|
|
|
|
| |
Total rental revenue |
|
$ |
1,959 |
|
|
|
|
|
Transaction days (in thousands) |
|
39,070 |
|
|
|
|
| |
Total RPD (in whole dollars) |
|
$ |
50.14 |
|
|
|
|
|
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
FINANCIAL INFORMATION AND OPERATING DATA
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
|
|
Three Months Ended |
|
Three Months Ended |
| ||||||||
(In millions, except per share data) |
|
2014 |
|
2013 |
|
2013 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total revenues |
|
$ |
2,830 |
|
$ |
2,708 |
|
$ |
2,709 |
|
$ |
2,715 |
|
Expenses: |
|
|
|
|
|
|
|
|
| ||||
Direct operating |
|
1,594 |
|
1,417 |
|
1,414 |
|
1,406 |
| ||||
Depreciation of revenue earning equipment and lease charges |
|
708 |
|
632 |
|
628 |
|
641 |
| ||||
Selling, general and administrative |
|
264 |
|
287 |
|
280 |
|
275 |
| ||||
Interest expense, net |
|
164 |
|
182 |
|
182 |
|
182 |
| ||||
Other income, net |
|
(21 |
) |
(2 |
) |
(1 |
) |
(1 |
) | ||||
Total expenses |
|
2,709 |
|
2,516 |
|
2,503 |
|
2,503 |
| ||||
Income (loss) before income taxes |
|
121 |
|
192 |
|
206 |
|
212 |
| ||||
(Provision) benefit for taxes on income (loss) |
|
(49 |
) |
(81 |
) |
(85 |
) |
(91 |
) | ||||
Net income (loss) |
|
$ |
72 |
|
$ |
111 |
|
$ |
121 |
|
$ |
121 |
|
Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
452 |
|
401 |
|
401 |
|
401 |
| ||||
Diluted |
|
465 |
|
465 |
|
465 |
|
465 |
| ||||
Earnings per share: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
$ |
0.16 |
|
$ |
0.28 |
|
$ |
0.30 |
|
$ |
0.30 |
|
Diluted |
|
$ |
0.15 |
|
$ |
0.25 |
|
$ |
0.27 |
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
| ||||
Interest expense Fleet |
|
$ |
72 |
|
$ |
75 |
|
|
NR |
|
$ |
75 |
|
Interest expense, net Corporate |
|
92 |
|
107 |
|
NR |
|
107 |
| ||||
Corporate EBITDA (a) |
|
446 |
|
524 |
|
NR |
|
541 |
| ||||
Adjusted pre-tax Income (loss) (a) |
|
216 |
|
296 |
|
NR |
|
314 |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule II.
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET DATA
(In millions) |
|
As of June 30, |
|
As of |
|
As of |
|
|
| |||
Cash and cash equivalents |
|
$ |
540 |
|
$ |
411 |
|
$ |
423 |
|
|
|
Restricted cash |
|
717 |
|
861 |
|
860 |
|
|
| |||
Revenue earning equipment: |
|
|
|
|
|
|
|
|
| |||
U.S. Car Rental |
|
8,980 |
|
8,629 |
|
8,629 |
|
|
| |||
International Car Rental |
|
3,135 |
|
2,047 |
|
2,047 |
|
|
| |||
Worldwide Equipment Rental |
|
2,520 |
|
2,416 |
|
2,416 |
|
|
| |||
All Other Operations |
|
1,195 |
|
1,099 |
|
1,101 |
|
|
| |||
Total revenue earning equipment, net |
|
15,829 |
|
14,191 |
|
14,193 |
|
|
| |||
Total assets |
|
26,169 |
|
24,423 |
|
24,588 |
|
|
| |||
Total debt |
|
17,310 |
|
16,309 |
|
16,309 |
|
|
| |||
Net Fleet debt (a) |
|
9,429 |
|
9,034 |
|
9,034 |
|
|
| |||
Net Corporate debt (a) (b) |
|
6,624 |
|
6,003 |
|
5,992 |
|
|
| |||
Total equity |
|
2,666 |
|
2,567 |
|
2,771 |
|
|
| |||
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule V.
(b) Fleet related to Hertz Equipment Rental Corporation is funded via Net Corporate Debt
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
|
|
Six Months Ended June 30, |
|
Six Months Ended June 30, |
| ||||||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cash provided by (used in): |
|
|
|
|
|
|
|
|
| ||||
Operating activities |
|
$ |
1,402 |
|
$ |
1,444 |
|
$ |
1,448 |
|
$ |
1,459 |
|
Investing activities |
|
(2,248 |
) |
(3,273 |
) |
(3,267 |
) |
(3,264 |
) | ||||
Financing activities |
|
977 |
|
1,764 |
|
1,763 |
|
1,763 |
| ||||
Effect of exchange rate changes |
|
(2 |
) |
(9 |
) |
(8 |
) |
(8 |
) | ||||
Net change in cash and cash equivalents |
|
$ |
129 |
|
$ |
(74 |
) |
$ |
(64 |
) |
$ |
(50 |
) |
|
|
|
|
|
|
|
|
|
| ||||
Fleet growth (a) |
|
$ |
(592 |
) |
$ |
(545 |
) |
NR |
|
$ |
(543 |
) | |
Free cash flow (a) |
|
$ |
(689 |
) |
$ |
(408 |
) |
$ |
(397 |
) |
$ |
(404 |
) |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules III and IV.
SELECTED UNAUDITED OPERATING DATA BY SEGMENT
|
|
Three Months Ended June 30, |
|
Three Months |
|
|
| |||||
|
|
2014 |
|
2013 |
|
2013 |
|
|
| |||
U.S. Car Rental |
|
|
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
35,850 |
|
34,178 |
|
34,178 |
|
|
| |||
Total RPD (a) |
|
$ |
46.19 |
|
$ |
46.11 |
|
$ |
46.78 |
|
|
|
Average fleet |
|
502,500 |
|
499,000 |
|
498,800 |
|
|
| |||
Fleet efficiency(a) |
|
79 |
% |
79 |
% |
NR |
|
|
| |||
Net depreciation per unit per month(a) |
|
$ |
259 |
|
$ |
216 |
|
NR |
|
|
| |
Program cars as a percentage of total average fleet |
|
16 |
% |
3 |
% |
NR |
|
|
| |||
Adjusted pre-tax income (in millions) (a) |
|
$ |
184 |
|
$ |
289 |
|
NR |
|
|
| |
International Car Rental |
|
|
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
12,096 |
|
11,261 |
|
11,261 |
|
|
| |||
Total RPD (a)(b) |
|
$ |
52.58 |
|
$ |
53.73 |
|
$ |
54.05 |
|
|
|
Average Fleet |
|
172,300 |
|
163,500 |
|
163,500 |
|
|
| |||
Fleet efficiency(a) |
|
77 |
% |
76 |
% |
NR |
|
|
| |||
Net depreciation per unit per month(a) |
|
$ |
240 |
|
$ |
273 |
|
NR |
|
|
| |
Program cars as a percentage of total average fleet |
|
42 |
% |
38 |
% |
NR |
|
|
| |||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
57 |
|
$ |
35 |
|
NR |
|
|
| |
Worldwide Equipment Rental |
|
|
|
|
|
|
|
|
| |||
Dollar utilization |
|
35 |
% |
37 |
% |
NR |
|
|
| |||
Time utilization |
|
63 |
% |
64 |
% |
NR |
|
|
| |||
Rental and rental related revenue (in millions) (a)(b) |
|
$ |
356 |
|
$ |
343 |
|
$ |
351 |
|
|
|
Same store revenue growth, including growth initiatives (a)(b) |
|
4 |
% |
11 |
% |
11 |
% |
|
| |||
Adjusted pre-tax income (in millions) (a) |
|
$ |
67 |
|
$ |
73 |
|
NR |
|
|
| |
All Other Operations |
|
|
|
|
|
|
|
|
| |||
Average fleet Donlen |
|
177,800 |
|
168,000 |
|
168,000 |
|
|
| |||
Adjusted pre-tax income (in millions) (a) |
|
$ |
15 |
|
$ |
14 |
|
NR |
|
|
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules II and V.
(b) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
SUPPLEMENTAL SCHEDULES AND DEFINITIONS
The following Supplemental Schedules and definitions are provided to present segment results and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules we provide definitions for terminology used throughout these schedules.
|
HERTZ GLOBAL HOLDINGS, INC. |
Supplemental Schedule I |
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
|
|
Three Months Ended June 30, 2014 |
|
Three Months Ended June 30, 2013 |
|
Three Months Ended June 30, |
| ||||||||||||||||||||||||||||||||||||
(In millions) |
|
U.S. Car |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
U.S. Car |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
2013 |
|
2013 |
| ||||||||||||||
Total revenues: |
|
$ |
1,663 |
|
$ |
641 |
|
$ |
384 |
|
$ |
142 |
|
$ |
|
|
$ |
2,830 |
|
$ |
1,602 |
|
$ |
595 |
|
$ |
381 |
|
$ |
130 |
|
$ |
|
|
$ |
2,708 |
|
$ |
2,709 |
|
$ |
2,715 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Direct operating |
|
990 |
|
394 |
|
210 |
|
6 |
|
(6 |
) |
1,594 |
|
865 |
|
347 |
|
204 |
|
6 |
|
(5 |
) |
1,417 |
|
1,414 |
|
1,406 |
| ||||||||||||||
Depreciation of revenue earning equipment and lease charges |
|
391 |
|
125 |
|
79 |
|
113 |
|
|
|
708 |
|
323 |
|
132 |
|
73 |
|
104 |
|
|
|
632 |
|
628 |
|
641 |
| ||||||||||||||
Selling, general and administrative |
|
93 |
|
63 |
|
35 |
|
8 |
|
65 |
|
264 |
|
113 |
|
69 |
|
32 |
|
8 |
|
65 |
|
287 |
|
280 |
|
275 |
| ||||||||||||||
Interest expense, net |
|
44 |
|
25 |
|
12 |
|
3 |
|
80 |
|
164 |
|
45 |
|
28 |
|
12 |
|
2 |
|
95 |
|
182 |
|
182 |
|
182 |
| ||||||||||||||
Other (income) expense, net |
|
(22 |
) |
3 |
|
(1 |
) |
|
|
(1 |
) |
(21 |
) |
(1 |
) |
|
|
(2 |
) |
(1 |
) |
2 |
|
(2 |
) |
(1 |
) |
(1 |
) | ||||||||||||||
Total expenses |
|
1,496 |
|
610 |
|
335 |
|
130 |
|
138 |
|
2,709 |
|
1,345 |
|
576 |
|
319 |
|
119 |
|
157 |
|
2,516 |
|
2,503 |
|
2,503 |
| ||||||||||||||
Income (loss) before income taxes |
|
$ |
167 |
|
$ |
31 |
|
$ |
49 |
|
$ |
11 |
|
$ |
(138 |
) |
121 |
|
$ |
257 |
|
$ |
19 |
|
$ |
62 |
|
$ |
11 |
|
$ |
(157 |
) |
$ |
192 |
|
$ |
206 |
|
$ |
212 |
| |
(Provision) benefit for taxes on income |
|
|
|
|
|
|
|
|
|
|
|
(49 |
) |
|
|
|
|
|
|
|
|
|
|
(81 |
) |
(85 |
) |
(91 |
) | ||||||||||||||
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
$ |
72 |
|
|
|
|
|
|
|
|
|
|
|
$ |
111 |
|
$ |
121 |
|
$ |
121 |
|
Supplemental Schedule II
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES
TO EBITDA, CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME BY SEGMENT
Unaudited
|
|
Three Months Ended June 30, 2014 |
|
Three Months Ended June 30, 2013 |
|
Three Months |
| |||||||||||||||||||||||||||||||||
(In millions) |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
Consolidated |
| |||||||||||||
Income (loss) before income taxes |
|
$ |
167 |
|
$ |
32 |
|
$ |
49 |
|
$ |
11 |
|
$ |
(138 |
) |
$ |
121 |
|
$ |
257 |
|
$ |
19 |
|
$ |
62 |
|
$ |
11 |
|
$ |
(157 |
) |
$ |
192 |
|
$ |
212 |
|
Depreciation and amortization |
|
447 |
|
135 |
|
97 |
|
116 |
|
4 |
|
799 |
|
374 |
|
140 |
|
91 |
|
107 |
|
3 |
|
715 |
|
722 |
| |||||||||||||
Interest, net of interest income |
|
44 |
|
25 |
|
12 |
|
3 |
|
80 |
|
164 |
|
45 |
|
28 |
|
12 |
|
2 |
|
95 |
|
182 |
|
182 |
| |||||||||||||
EBITDA |
|
$ |
658 |
|
$ |
192 |
|
$ |
158 |
|
$ |
130 |
|
$ |
(54 |
) |
$ |
1,084 |
|
$ |
676 |
|
$ |
187 |
|
$ |
165 |
|
$ |
120 |
|
$ |
(59 |
) |
$ |
1,089 |
|
$ |
1,116 |
|
Car rental fleet depreciation |
|
(391 |
) |
(124 |
) |
|
|
(114 |
) |
(1 |
) |
(630 |
) |
(323 |
) |
(132 |
) |
|
|
(104 |
) |
|
|
(559 |
) |
(568 |
) | |||||||||||||
Car rental fleet interest |
|
(45 |
) |
(22 |
) |
|
|
(3 |
) |
|
|
(70 |
) |
(45 |
) |
(26 |
) |
|
|
(2 |
) |
1 |
|
(72 |
) |
(73 |
) | |||||||||||||
Car rental fleet debt - related charges |
|
1 |
|
5 |
|
|
|
1 |
|
1 |
|
8 |
|
1 |
|
4 |
|
|
|
|
|
|
|
5 |
|
5 |
| |||||||||||||
Non-cash stock-based employee compensation charges |
|
|
|
|
|
|
|
|
|
5 |
|
5 |
|
|
|
|
|
|
|
|
|
11 |
|
11 |
|
12 |
| |||||||||||||
Restructuring and restructuring related charges |
|
4 |
|
14 |
|
2 |
|
|
|
11 |
|
31 |
|
12 |
|
10 |
|
1 |
|
|
|
3 |
|
26 |
|
26 |
| |||||||||||||
Acquisition related costs and charges |
|
|
|
|
|
|
|
|
|
2 |
|
2 |
|
|
|
|
|
|
|
|
|
8 |
|
8 |
|
9 |
| |||||||||||||
Integration expenses |
|
|
|
|
|
|
|
|
|
3 |
|
3 |
|
(1 |
) |
|
|
|
|
|
|
10 |
|
9 |
|
9 |
| |||||||||||||
Equipment Rental spin-off costs |
|
|
|
|
|
6 |
|
|
|
6 |
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Relocation costs |
|
|
|
|
|
|
|
|
|
3 |
|
3 |
|
|
|
|
|
|
|
|
|
1 |
|
1 |
|
|
| |||||||||||||
Premiums paid on debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Loss on extinguishment of debt |
|
|
|
|
|
|
|
|
|
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Impairment charges and asset write-downs |
|
10 |
|
|
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Other extraordinary, unusual or non-recurring items |
|
(16 |
) |
3 |
|
|
|
|
|
|
|
(13 |
) |
1 |
|
|
|
(1 |
) |
(1 |
) |
7 |
|
6 |
|
5 |
| |||||||||||||
Corporate EBITDA |
|
$ |
221 |
|
$ |
68 |
|
$ |
166 |
|
$ |
14 |
|
$ |
(23 |
) |
$ |
446 |
|
$ |
321 |
|
$ |
43 |
|
$ |
165 |
|
$ |
13 |
|
$ |
(18 |
) |
$ |
524 |
|
$ |
541 |
|
Non-fleet depreciation and amortization |
|
(56 |
) |
(11 |
) |
(97 |
) |
(2 |
) |
(3 |
) |
(169 |
) |
(51 |
) |
(8 |
) |
(91 |
) |
(3 |
) |
(3 |
) |
(156 |
) |
(154 |
) | |||||||||||||
Non-fleet interest, net of interest income |
|
1 |
|
(3 |
) |
(12 |
) |
|
|
(80 |
) |
(94 |
) |
|
|
(2 |
) |
(12 |
) |
|
|
(96 |
) |
(110 |
) |
(109 |
) | |||||||||||||
Non-fleet debt - related charges |
|
1 |
|
|
|
1 |
|
|
|
3 |
|
5 |
|
1 |
|
|
|
1 |
|
|
|
12 |
|
14 |
|
15 |
| |||||||||||||
Non-cash stock-based employee compensation charges |
|
|
|
|
|
|
|
|
|
(5 |
) |
(5 |
) |
|
|
|
|
|
|
|
|
(11 |
) |
(11 |
) |
(12 |
) | |||||||||||||
Acquisition accounting |
|
17 |
|
3 |
|
9 |
|
3 |
|
1 |
|
33 |
|
18 |
|
2 |
|
10 |
|
4 |
|
1 |
|
35 |
|
33 |
| |||||||||||||
Adjusted Pre-Tax Income (Loss) |
|
$ |
184 |
|
$ |
57 |
|
$ |
67 |
|
$ |
15 |
|
$ |
(107 |
) |
$ |
216 |
|
$ |
289 |
|
$ |
35 |
|
$ |
73 |
|
$ |
14 |
|
$ |
(115 |
) |
$ |
296 |
|
$ |
314 |
|
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
FREE CASH FLOW
Unaudited
|
|
Six Months Ended |
|
Six Months Ended |
| ||||||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
|
2013 |
| ||||
Income before income taxes |
|
$ |
58 |
|
$ |
252 |
|
$ |
280 |
|
$ |
284 |
|
Depreciation and amortization, non-fleet |
|
180 |
|
167 |
|
163 |
|
163 |
| ||||
Amortization of debt discount and related charges |
|
25 |
|
37 |
|
37 |
|
37 |
| ||||
Cash paid for income taxes |
|
(33 |
) |
(43 |
) |
(43 |
) |
(43 |
) | ||||
Changes in assets and liabilities, net of effects of acquisitions, and other |
|
(221 |
) |
(155 |
) |
(163 |
) |
(177 |
) | ||||
Net cash provided by operating activities excluding depreciation of revenue earning equipment |
|
9 |
|
258 |
|
274 |
|
264 |
| ||||
U.S. car rental fleet growth (a) |
|
(321 |
) |
(561 |
) |
NR |
|
NR |
| ||||
International car rental fleet growth (a) |
|
(209 |
) |
150 |
|
NR |
|
NR |
| ||||
Equipment rental fleet growth (a) |
|
(50 |
) |
(136 |
) |
NR |
|
NR |
| ||||
All other operations rental fleet growth (a) |
|
(12 |
) |
2 |
|
NR |
|
NR |
| ||||
Property and equipment expenditures, net of disposals |
|
(106 |
) |
(121 |
) |
(125 |
) |
(125 |
) | ||||
Net investment activity |
|
(698 |
) |
(666 |
) |
(671 |
) |
(668 |
) | ||||
Free cash flow |
|
$ |
(689 |
) |
$ |
(408 |
) |
$ |
(397 |
) |
$ |
(404 |
) |
(a) Historically, fleet growth has not been reported on a segment basis.
|
HERTZ GLOBAL HOLDINGS, INC. |
Supplemental Schedule IV |
FLEET GROWTH
Unaudited
|
|
Six Months Ended June 30, 2014 |
|
Six Months Ended June 30, 2013 |
|
Six Months |
| |||||||||||||||||||||||||||
(In millions) |
|
U.S. Car |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Consolidated |
|
U.S. Car |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Consolidated |
|
Consolidated |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Revenue earning equipment expenditures |
|
$ |
(3,260 |
) |
$ |
(1,673 |
) |
$ |
(296 |
) |
$ |
(767 |
) |
$ |
(5,996 |
) |
$ |
(4,463 |
) |
$ |
(1,472 |
) |
$ |
(365 |
) |
$ |
(513 |
) |
$ |
(6,813 |
) |
$ |
(6,826 |
) |
Proceeds from disposal of revenue earning equipment |
|
2,114 |
|
1,059 |
|
89 |
|
455 |
|
3,717 |
|
2,396 |
|
993 |
|
82 |
|
266 |
|
3,737 |
|
3,743 |
| |||||||||||
Net revenue earning equipment capital expenditures |
|
(1,146 |
) |
(614 |
) |
(207 |
) |
(312 |
) |
(2,279 |
) |
(2,067 |
) |
(479 |
) |
(283 |
) |
(247 |
) |
(3,076 |
) |
(3,083 |
) | |||||||||||
Depreciation of revenue earning equipment |
|
813 |
|
199 |
|
157 |
|
224 |
|
1,393 |
|
607 |
|
223 |
|
147 |
|
209 |
|
1,186 |
|
1,195 |
| |||||||||||
Financing activity related to car rental fleet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Borrowings |
|
619 |
|
720 |
|
|
|
420 |
|
1,759 |
|
2,470 |
|
918 |
|
|
|
47 |
|
3,435 |
|
NR |
| |||||||||||
Payments |
|
(731 |
) |
(491 |
) |
|
|
(350 |
) |
(1,572 |
) |
(1,741 |
) |
(487 |
) |
|
|
(2 |
) |
(2,230 |
) |
NR |
| |||||||||||
Restricted cash changes |
|
124 |
|
(23 |
) |
|
|
6 |
|
107 |
|
170 |
|
(25 |
) |
|
|
(5 |
) |
140 |
|
NR |
| |||||||||||
Net financing activity related to car rental fleet |
|
12 |
|
206 |
|
|
|
76 |
|
294 |
|
899 |
|
406 |
|
|
|
40 |
|
1,345 |
|
1,345 |
| |||||||||||
Fleet growth |
|
$ |
(321 |
) |
$ |
(209 |
) |
$ |
(50 |
) |
$ |
(12 |
) |
$ |
(592 |
) |
$ |
(561 |
) |
$ |
150 |
|
$ |
(136 |
) |
$ |
2 |
|
$ |
(545 |
) |
$ |
(543 |
) |
|
HERTZ GLOBAL HOLDINGS, INC. |
Supplemental Schedule V |
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS
Unaudited
NET CORPORATE DEBT, NET FLEET DEBT AND TOTAL NET DEBT
|
|
|
|
|
|
|
|
As of December 31, 2013 |
|
As of December 31, 2013 |
| |||||||||||||||||
|
|
As of June 30, 2014 |
|
As Restated |
|
As Revised |
| |||||||||||||||||||||
(In millions) |
|
Fleet |
|
Corporate |
|
Total |
|
Fleet |
|
Corporate |
|
Total |
|
Fleet |
|
Corporate |
|
Total |
| |||||||||
Debt |
|
$ |
10,100 |
|
$ |
7,210 |
|
$ |
17,310 |
|
$ |
9,806 |
|
$ |
6,503 |
|
$ |
16,309 |
|
$ |
9,806 |
|
$ |
6,503 |
|
$ |
16,309 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Cash and cash equivalents |
|
|
|
540 |
|
540 |
|
|
|
411 |
|
411 |
|
|
|
423 |
|
423 |
| |||||||||
Restricted cash |
|
671 |
|
46 |
|
717 |
|
772 |
|
89 |
|
861 |
|
772 |
|
88 |
|
860 |
| |||||||||
Net debt |
|
$ |
9,429 |
|
$ |
6,624 |
|
$ |
16,053 |
|
$ |
9,034 |
|
$ |
6,003 |
|
$ |
15,037 |
|
$ |
9,034 |
|
$ |
5,992 |
|
$ |
15,026 |
|
WORLDWIDE EQUIPMENT RENTAL AND RENTAL RELATED REVENUE
|
|
Three Months Ended June 30, |
| |||||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
| |||
|
|
|
|
|
|
|
| |||
Equipment rental segment revenues |
|
$ |
384 |
|
$ |
381 |
|
$ |
384 |
|
Equipment sales and other revenue |
|
(29 |
) |
(36 |
) |
(35 |
) | |||
Rental and rental related revenue at actual rates |
|
355 |
|
345 |
|
349 |
| |||
Foreign currency adjustment (a) |
|
1 |
|
(2 |
) |
2 |
| |||
Rental and rental related revenue |
|
$ |
356 |
|
$ |
343 |
|
$ |
351 |
|
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
|
|
U.S. Car Rental |
| ||||
|
|
Three Months Ended June 30, |
| ||||
(In millions, except as noted) |
|
2014 |
|
2013 |
| ||
Revenues |
|
$ |
1,663 |
|
$ |
1,602 |
|
Advantage sublease revenue |
|
|
|
(22 |
) | ||
Ancillary retail car sales revenue |
|
(7 |
) |
(4 |
) | ||
Total rental revenue |
|
$ |
1,656 |
|
$ |
1,576 |
|
Transaction days (in thousands) |
|
35,850 |
|
34,178 |
| ||
Total RPD (in whole dollars) |
|
$ |
46.19 |
|
$ |
46.11 |
|
|
|
|
|
|
| ||
|
|
|
|
|
| ||
Transaction days (in thousands) |
|
35,850 |
|
34,178 |
| ||
Average Fleet |
|
502,500 |
|
499,000 |
| ||
Advantage sublease vehicles |
|
(4,400 |
) |
(24,000 |
) | ||
Hertz 24/7 vehicles |
|
(1,000 |
) |
(1,000 |
) | ||
|
|
|
|
|
| ||
Average Fleet used to calculate fleet efficiency |
|
497,100 |
|
474,000 |
| ||
Number of days in period |
|
91 |
|
91 |
| ||
|
|
|
|
|
| ||
Average fleet multiplied by number of dates in period (in thousands) |
|
45,236 |
|
43,134 |
| ||
Fleet efficiency |
|
79 |
% |
79 |
% | ||
|
|
|
|
|
| ||
Depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
391 |
|
$ |
323 |
|
Average fleet |
|
502,500 |
|
499,000 |
| ||
Depreciation of revenue earning equipment and lease charges, net divided by average fleet |
|
$ |
778 |
|
$ |
647 |
|
Number of months in period |
|
3 |
|
3 |
| ||
Net depreciation per unit per month |
|
$ |
259 |
|
$ |
216 |
|
|
|
International Car Rental |
| ||||
|
|
Three Months Ended June 30, |
| ||||
(in millions, except as noted) |
|
2014 |
|
2013 |
| ||
|
|
|
|
|
| ||
Revenues |
|
$ |
641 |
|
$ |
595 |
|
Foreign currency adjustment (a) |
|
(5 |
) |
10 |
| ||
Total rental revenue |
|
$ |
636 |
|
$ |
605 |
|
Transaction days (in thousands) |
|
12,096 |
|
11,261 |
| ||
Total RPD (in whole dollars) |
|
$ |
52.58 |
|
$ |
53.73 |
|
|
|
|
|
|
| ||
Transaction days (in thousands) |
|
12,096 |
|
11,261 |
| ||
Average Fleet |
|
172,300 |
|
163,500 |
| ||
Number of days in period |
|
91 |
|
91 |
| ||
Average fleet multiplied by number of days in period |
|
15,679 |
|
14,879 |
| ||
Fleet efficiency |
|
77 |
% |
76 |
% | ||
|
|
|
|
|
| ||
Depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
125 |
|
$ |
132 |
|
Foreign currency adjustment (in millions)(a) |
|
(1 |
) |
2 |
| ||
Adjusted depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
124 |
|
$ |
134 |
|
Average fleet |
|
172,300 |
|
163,500 |
| ||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet |
|
$ |
720 |
|
$ |
820 |
|
Number of months in period |
|
3 |
|
3 |
| ||
Net depreciation per unit per month |
|
$ |
240 |
|
$ |
273 |
|
|
|
All Car Rental |
| |
|
|
Three Months Ended |
| |
(In millions, except as noted) |
|
2013 |
| |
Revenues |
|
$ |
2,330 |
|
Non-rental revenue |
|
(134 |
) | |
Foreign currency adjustment |
|
12 |
| |
Total rental revenue |
|
$ |
2,208 |
|
Transaction days (in thousands) |
|
45,439 |
| |
Total RPD (in whole dollars) |
|
$ |
48.58 |
|
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
FINANCIAL INFORMATION AND OPERATING DATA
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
|
|
Three Months Ended September 30, |
|
Three Months Ended September 30, |
| ||||||||
(In millions, except per share data) |
|
2014 |
|
2013 |
|
2013 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total revenues |
|
$ |
3,121 |
|
$ |
3,075 |
|
$ |
3,070 |
|
$ |
3,070 |
|
Expenses: |
|
|
|
|
|
|
|
|
| ||||
Direct operating |
|
1,702 |
|
1,547 |
|
1,540 |
|
1,525 |
| ||||
Depreciation of revenue earning equipment and lease charges |
|
746 |
|
672 |
|
675 |
|
677 |
| ||||
Selling, general and administrative |
|
303 |
|
282 |
|
272 |
|
278 |
| ||||
Interest expense, net |
|
164 |
|
179 |
|
179 |
|
179 |
| ||||
Other income, net |
|
3 |
|
83 |
|
83 |
|
83 |
| ||||
Total expenses |
|
2,918 |
|
2,763 |
|
2,749 |
|
2,742 |
| ||||
Income (loss) before income taxes |
|
203 |
|
312 |
|
321 |
|
328 |
| ||||
(Provision) benefit for taxes on income (loss) |
|
(54 |
) |
(110 |
) |
(111 |
) |
(113 |
) | ||||
Net income (loss) |
|
$ |
149 |
|
$ |
202 |
|
$ |
210 |
|
$ |
215 |
|
Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
459 |
|
425 |
|
425 |
|
425 |
| ||||
Diluted |
|
464 |
|
465 |
|
465 |
|
465 |
| ||||
Earnings per share: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
$ |
0.32 |
|
$ |
0.48 |
|
$ |
0.49 |
|
$ |
0.51 |
|
Diluted |
|
$ |
0.32 |
|
$ |
0.44 |
|
$ |
0.46 |
|
$ |
0.47 |
|
|
|
|
|
|
|
|
|
|
| ||||
Interest expense Fleet |
|
74 |
|
84 |
|
NR |
|
84 |
| ||||
Interest expense, net Corporate |
|
90 |
|
95 |
|
NR |
|
95 |
| ||||
Corporate EBITDA (a) |
|
553 |
|
731 |
|
NR |
|
741 |
| ||||
Adjusted pre-tax Income (loss) (a) |
|
322 |
|
507 |
|
NR |
|
520 |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule II.
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET DATA
(In millions) |
|
As of September |
|
As of December 31, |
|
As of December 31, |
| |||
Cash and cash equivalents |
|
$ |
629 |
|
$ |
411 |
|
$ |
423 |
|
Restricted cash |
|
748 |
|
861 |
|
860 |
| |||
Revenue earning equipment: |
|
|
|
|
|
|
| |||
U.S. Car Rental |
|
8,312 |
|
8,629 |
|
8,629 |
| |||
International Car Rental |
|
2,806 |
|
2,047 |
|
2,047 |
| |||
Worldwide Equipment Rental |
|
2,534 |
|
2,416 |
|
2,416 |
| |||
All Other Operations |
|
1,200 |
|
1,099 |
|
1,101 |
| |||
Total revenue earning equipment, net |
|
14,852 |
|
14,191 |
|
14,193 |
| |||
Total assets |
|
25,474 |
|
24,423 |
|
24,588 |
| |||
Total debt |
|
16,986 |
|
16,309 |
|
16,309 |
| |||
Net Fleet debt (a) |
|
9,529 |
|
9,034 |
|
9,034 |
| |||
Net Corporate debt (a) (b) |
|
6,080 |
|
6,003 |
|
5,992 |
| |||
Total equity |
|
2,779 |
|
2,567 |
|
2,771 |
| |||
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule V.
(b) Fleet related to Hertz Equipment Rental Corporation is funded via Net Corporate Debt
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
|
|
Nine Months Ended |
|
Nine Months Ended |
| ||||||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
|
2013 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Cash provided by (used in): |
|
|
|
|
|
|
|
|
| ||||
Operating activities |
|
$ |
2,729 |
|
$ |
2,812 |
|
$ |
2,837 |
|
$ |
2,852 |
|
Investing activities |
|
(3,283 |
) |
(4,046 |
) |
(4,034 |
) |
(4,035 |
) | ||||
Financing activities |
|
790 |
|
1,201 |
|
1,201 |
|
1,201 |
| ||||
Effect of exchange rate changes |
|
(18 |
) |
(2 |
) |
(2 |
) |
(2 |
) | ||||
Net change in cash and cash equivalents |
|
$ |
218 |
|
$ |
(35 |
) |
$ |
2 |
|
$ |
16 |
|
|
|
|
|
|
|
|
|
|
| ||||
Fleet growth (a) |
|
$ |
(381 |
) |
$ |
(798 |
) |
NR |
|
$ |
(806 |
) | |
Free cash flow (a) |
|
$ |
64 |
|
$ |
(3 |
) |
$ |
21 |
|
$ |
15 |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules III and IV.
SELECTED UNAUDITED OPERATING DATA BY SEGMENT
|
|
Three Months Ended September 30, |
|
Three Months |
| |||||
|
|
2014 |
|
2013 |
|
2013 |
| |||
U.S. Car Rental |
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
37,901 |
|
36,064 |
|
36,064 |
| |||
Total RPD (a) |
|
$ |
46.41 |
|
$ |
48.36 |
|
$ |
48.33 |
|
Average Fleet(a) |
|
515,300 |
|
516,800 |
|
516,800 |
| |||
Fleet efficiency(a) |
|
80 |
% |
80 |
% |
NR |
| |||
Net depreciation per unit per month(a) |
|
$ |
265 |
|
$ |
217 |
|
NR |
| |
Program cars as a percentage of total average fleet |
|
15 |
% |
7 |
% |
NR |
| |||
Adjusted pre-tax income (in millions) (a) |
|
$ |
209 |
|
$ |
379 |
|
$ |
392 |
|
International Car Rental |
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
14,695 |
|
14,278 |
|
14,278 |
| |||
Total RPD (a)(b) |
|
$ |
54.85 |
|
$ |
55.12 |
|
$ |
55.27 |
|
Average Fleet(a) |
|
196,900 |
|
188,700 |
|
188,700 |
| |||
Fleet efficiency(a) |
|
81 |
% |
82 |
% |
NR |
| |||
Net depreciation per unit per month(a) |
|
$ |
245 |
|
$ |
274 |
|
NR |
| |
Program cars as a percentage of total average fleet |
|
40 |
% |
36 |
% |
NR |
| |||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
136 |
|
$ |
126 |
|
$ |
129 |
|
Worldwide Equipment Rental |
|
|
|
|
|
|
| |||
Dollar utilization(a) |
|
37 |
% |
38 |
% |
NR |
| |||
Time utilization(a) |
|
66 |
% |
67 |
% |
NR |
| |||
Rental and rental related revenue (in millions) (a)(b) |
|
$ |
382 |
|
$ |
369 |
|
$ |
372 |
|
Same store revenue growth, including growth initiatives (a)(b) |
|
6 |
% |
7 |
% |
7 |
% | |||
Adjusted pre-tax income (in millions) (a) |
|
$ |
78 |
|
$ |
89 |
|
$ |
88 |
|
All Other Operations |
|
|
|
|
|
|
| |||
Average fleet Donlen |
|
169,700 |
|
170,800 |
|
170,800 |
| |||
Adjusted pre-tax income (in millions) (a) |
|
$ |
17 |
|
$ |
14 |
|
$ |
14 |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules II and V.
(b) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
SUPPLEMENTAL SCHEDULES AND DEFINITIONS
The following Supplemental Schedules and definitions are provided to present segment results and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules we provide definitions for terminology used throughout these schedules.
|
HERTZ GLOBAL HOLDINGS, INC. |
Supplemental Schedule I |
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
|
|
Three Months Ended September 30, 2014 |
|
Three Months Ended September 30, 2013 |
|
Three Months |
|
Three Months |
| ||||||||||||||||||||||||||||||||||
(In millions) |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
2013 |
|
2013 |
| ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues: |
|
$ |
1,768 |
|
$ |
795 |
|
$ |
413 |
|
$ |
145 |
|
$ |
|
|
$ |
3,121 |
|
$ |
1,770 |
|
$ |
768 |
|
$ |
403 |
|
$ |
134 |
|
$ |
|
|
$ |
3,075 |
|
$ |
3,070 |
|
$ |
3,070 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Direct operating |
|
1,041 |
|
427 |
|
221 |
|
6 |
|
7 |
|
1,702 |
|
933 |
|
411 |
|
206 |
|
6 |
|
(9 |
) |
1,547 |
|
1,540 |
|
1,525 |
| ||||||||||||||
Depreciation of revenue earning equipment and lease charges |
|
409 |
|
143 |
|
78 |
|
116 |
|
|
|
746 |
|
337 |
|
151 |
|
76 |
|
108 |
|
|
|
672 |
|
675 |
|
677 |
| ||||||||||||||
Selling, general and administrative |
|
116 |
|
68 |
|
47 |
|
7 |
|
65 |
|
303 |
|
113 |
|
74 |
|
33 |
|
7 |
|
55 |
|
282 |
|
272 |
|
278 |
| ||||||||||||||
Interest expense, net |
|
44 |
|
27 |
|
12 |
|
3 |
|
78 |
|
164 |
|
47 |
|
31 |
|
13 |
|
6 |
|
82 |
|
179 |
|
179 |
|
179 |
| ||||||||||||||
Other (income) expense, net |
|
(2 |
) |
|
|
(1 |
) |
|
|
6 |
|
3 |
|
43 |
|
|
|
(1 |
) |
|
|
41 |
|
83 |
|
83 |
|
83 |
| ||||||||||||||
Total expenses |
|
1,608 |
|
665 |
|
357 |
|
132 |
|
156 |
|
2,918 |
|
1,473 |
|
667 |
|
327 |
|
127 |
|
169 |
|
2,763 |
|
2,749 |
|
2,742 |
| ||||||||||||||
Income (loss) before income taxes |
|
$ |
160 |
|
$ |
130 |
|
$ |
56 |
|
$ |
13 |
|
$ |
(156 |
) |
$ |
203 |
|
$ |
297 |
|
$ |
101 |
|
$ |
76 |
|
$ |
7 |
|
$ |
(169 |
) |
$ |
312 |
|
$ |
321 |
|
$ |
328 |
|
Provision for taxes on income |
|
|
|
|
|
|
|
|
|
|
|
(54 |
) |
|
|
|
|
|
|
|
|
|
|
(110 |
) |
(111 |
) |
(113 |
) | ||||||||||||||
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
$ |
149 |
|
|
|
|
|
|
|
|
|
|
|
$ |
202 |
|
$ |
210 |
|
$ |
215 |
|
Supplemental Schedule II
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES
TO EBITDA, CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME BY SEGMENT
Unaudited
|
|
Three Months Ended September 30, 2014 |
|
Three Months Ended September 30, 2013 |
|
Three Months Ended |
| |||||||||||||||||||||||||||||||||
(In millions) |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide Equipment Rental |
|
All Other Operations |
|
Corporate |
|
Consolidated HGH |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide Equipment Rental |
|
All Other Operations |
|
Corporate |
|
Consolidated HGH |
|
Consolidated HGH |
| |||||||||||||
Income (loss) before income taxes |
|
$ |
160 |
|
$ |
130 |
|
$ |
56 |
|
$ |
13 |
|
$ |
(156 |
) |
$ |
203 |
|
$ |
297 |
|
$ |
101 |
|
$ |
76 |
|
$ |
7 |
|
$ |
(169 |
) |
$ |
312 |
|
$ |
328 |
|
Depreciation and amortization |
|
465 |
|
152 |
|
97 |
|
118 |
|
5 |
|
837 |
|
387 |
|
159 |
|
94 |
|
110 |
|
4 |
|
754 |
|
755 |
| |||||||||||||
Interest, net of interest income |
|
44 |
|
27 |
|
12 |
|
3 |
|
78 |
|
164 |
|
47 |
|
31 |
|
13 |
|
6 |
|
82 |
|
179 |
|
179 |
| |||||||||||||
EBITDA |
|
$ |
669 |
|
$ |
309 |
|
$ |
165 |
|
$ |
134 |
|
$ |
(73 |
) |
$ |
1,204 |
|
$ |
731 |
|
$ |
291 |
|
$ |
183 |
|
$ |
123 |
|
$ |
(83 |
) |
$ |
1,245 |
|
$ |
1,262 |
|
Car rental fleet depreciation |
|
(409 |
) |
(143 |
) |
|
|
(116 |
) |
|
|
(668 |
) |
(337 |
) |
(151 |
) |
|
|
(108 |
) |
|
|
(596 |
) |
(600 |
) | |||||||||||||
Car rental fleet interest |
|
(45 |
) |
(23 |
) |
1 |
|
(4 |
) |
(1 |
) |
(72 |
) |
(46 |
) |
(27 |
) |
|
|
(7 |
) |
|
|
(80 |
) |
(80 |
) | |||||||||||||
Car rental fleet debt - related charges |
|
3 |
|
4 |
|
|
|
2 |
|
(1 |
) |
8 |
|
2 |
|
3 |
|
|
|
4 |
|
|
|
9 |
|
9 |
| |||||||||||||
Non-cash stock-based employee compensation charges |
|
|
|
|
|
|
|
|
|
7 |
|
7 |
|
|
|
|
|
|
|
|
|
11 |
|
11 |
|
11 |
| |||||||||||||
Restructuring and restructuring related charges |
|
29 |
|
1 |
|
1 |
|
|
|
24 |
|
55 |
|
8 |
|
12 |
|
1 |
|
|
|
18 |
|
39 |
|
39 |
| |||||||||||||
Acquisition related costs and charges |
|
|
|
|
|
|
|
|
|
1 |
|
1 |
|
|
|
|
|
|
|
|
|
3 |
|
3 |
|
3 |
| |||||||||||||
Integration expenses |
|
|
|
|
|
|
|
|
|
1 |
|
1 |
|
6 |
|
|
|
|
|
|
|
2 |
|
8 |
|
9 |
| |||||||||||||
Equipment Rental spin-off costs |
|
|
|
|
|
12 |
|
|
|
2 |
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Relocation costs |
|
|
|
|
|
|
|
|
|
3 |
|
3 |
|
4 |
|
|
|
|
|
|
|
|
|
4 |
|
4 |
| |||||||||||||
Premiums paid on debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Loss on extinguishment of debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28 |
|
28 |
|
|
| |||||||||||||
Impairment charges and asset write-downs |
|
|
|
|
|
|
|
|
|
|
|
|
|
40 |
|
|
|
|
|
|
|
|
|
40 |
|
44 |
| |||||||||||||
Other extraordinary, unusual or non-recurring items |
|
|
|
(1 |
) |
(1 |
) |
|
|
2 |
|
|
|
4 |
|
7 |
|
(1 |
) |
|
|
10 |
|
20 |
|
40 |
| |||||||||||||
Corporate EBITDA |
|
$ |
247 |
|
$ |
147 |
|
$ |
178 |
|
$ |
16 |
|
$ |
(35 |
) |
$ |
553 |
|
$ |
412 |
|
$ |
135 |
|
$ |
183 |
|
$ |
12 |
|
$ |
(11 |
) |
$ |
731 |
|
$ |
741 |
|
Non-fleet depreciation and amortization |
|
(56 |
) |
(9 |
) |
(97 |
) |
(2 |
) |
(5 |
) |
(169 |
) |
(50 |
) |
(8 |
) |
(94 |
) |
(2 |
) |
(4 |
) |
(158 |
) |
(155 |
) | |||||||||||||
Non-fleet interest, net of interest income |
|
1 |
|
(4 |
) |
(13 |
) |
1 |
|
(77 |
) |
(92 |
) |
(1 |
) |
(4 |
) |
(13 |
) |
1 |
|
(82 |
) |
(99 |
) |
(99 |
) | |||||||||||||
Non-fleet debt - related charges |
|
|
|
|
|
1 |
|
|
|
4 |
|
5 |
|
|
|
|
|
1 |
|
(1 |
) |
8 |
|
8 |
|
9 |
| |||||||||||||
Non-cash stock-based employee compensation charges |
|
|
|
|
|
|
|
|
|
(7 |
) |
(7 |
) |
|
|
|
|
|
|
|
|
(11 |
) |
(11 |
) |
(11 |
) | |||||||||||||
Acquisition accounting |
|
17 |
|
2 |
|
9 |
|
2 |
|
2 |
|
32 |
|
18 |
|
3 |
|
10 |
|
4 |
|
|
|
35 |
|
35 |
| |||||||||||||
Other accounting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
1 |
|
|
| |||||||||||||
Adjusted Pre-Tax Income (Loss) |
|
$ |
209 |
|
$ |
136 |
|
$ |
78 |
|
$ |
17 |
|
$ |
(118 |
) |
$ |
322 |
|
$ |
379 |
|
$ |
126 |
|
$ |
88 |
|
$ |
14 |
|
$ |
(100 |
) |
$ |
507 |
|
$ |
520 |
|
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
FREE CASH FLOW
Unaudited
|
|
Nine Months Ended |
|
Nine Months Ended |
| ||||||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
|
2013 |
| ||||
Income before income taxes |
|
$ |
261 |
|
$ |
563 |
|
$ |
601 |
|
$ |
612 |
|
Depreciation and amortization, non-fleet |
|
272 |
|
249 |
|
241 |
|
241 |
| ||||
Amortization of debt discount and related charges |
|
35 |
|
54 |
|
54 |
|
54 |
| ||||
Cash paid for income taxes |
|
(47 |
) |
(56 |
) |
(56 |
) |
(56 |
) | ||||
Changes in assets and liabilities, net of effects of acquisitions, and other |
|
89 |
|
169 |
|
172 |
|
154 |
| ||||
Net cash provided by operating activities excluding depreciation of revenue earning equipment |
|
610 |
|
979 |
|
1,012 |
|
1,005 |
| ||||
U.S. car rental fleet growth (a) |
|
134 |
|
(489 |
) |
NR |
|
NR |
| ||||
International car rental fleet growth (a) |
|
(401 |
) |
(49 |
) |
NR |
|
NR |
| ||||
Equipment rental fleet growth (a) |
|
(105 |
) |
(258 |
) |
NR |
|
NR |
| ||||
All other operations rental fleet growth (a) |
|
(9 |
) |
(2 |
) |
NR |
|
NR |
| ||||
Property and equipment expenditures, net of disposals |
|
(165 |
) |
(184 |
) |
(184 |
) |
(184 |
) | ||||
Net investment activity |
|
(546 |
) |
(982 |
) |
(991 |
) |
(990 |
) | ||||
Free cash flow |
|
$ |
64 |
|
$ |
(3 |
) |
$ |
21 |
|
$ |
15 |
|
(a) Historically, fleet growth has not been reported on a segment basis.
Supplemental Schedule IV
HERTZ GLOBAL HOLDINGS, INC.
FLEET GROWTH
Unaudited
|
|
Nine Months Ended September 30, 2014 |
|
Nine Months Ended September 30, 2013 |
|
Nine Months Ended September 30, 2013 |
| |||||||||||||||||||||||||||
(In millions) |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide Equipment Rental |
|
All Other Operations |
|
Consolidated HGH |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide Equipment Rental |
|
All Other Operations |
|
Consolidated HGH |
|
Consolidated HGH |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Revenue earning equipment expenditures |
|
$ |
(4,128 |
) |
$ |
(2,694 |
) |
$ |
(470 |
) |
$ |
(1,150 |
) |
$ |
(8,442 |
) |
$ |
(5,412 |
) |
$ |
(2,574 |
) |
$ |
(582 |
) |
$ |
(750 |
) |
$ |
(9,318 |
) |
$ |
(9,677 |
) |
Proceeds from disposal of revenue earning equipment |
|
3,019 |
|
1,456 |
|
130 |
|
711 |
|
5,316 |
|
3,506 |
|
1,654 |
|
101 |
|
401 |
|
5,662 |
|
5,669 |
| |||||||||||
Net revenue earning equipment capital expenditures |
|
(1,109 |
) |
(1,238 |
) |
(340 |
) |
(439 |
) |
(3,126 |
) |
(1,906 |
) |
(920 |
) |
(481 |
) |
(349 |
) |
(3,656 |
) |
(4,008 |
) | |||||||||||
Depreciation of revenue earning equipment |
|
1,222 |
|
321 |
|
235 |
|
340 |
|
2,118 |
|
943 |
|
350 |
|
223 |
|
316 |
|
1,832 |
|
1,847 |
| |||||||||||
Financing activity related to car rental fleet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Borrowings |
|
1,021 |
|
1,287 |
|
|
|
438 |
|
2,746 |
|
2,694 |
|
1,234 |
|
|
|
993 |
|
4,921 |
|
NR |
| |||||||||||
Payments |
|
(1,085 |
) |
(745 |
) |
|
|
(350 |
) |
(2,180 |
) |
(2,303 |
) |
(682 |
) |
|
|
(947 |
) |
(3,932 |
) |
NR |
| |||||||||||
Restricted cash changes |
|
85 |
|
(26 |
) |
|
|
2 |
|
61 |
|
83 |
|
(31 |
) |
|
|
(15 |
) |
37 |
|
NR |
| |||||||||||
Net financing activity related to car rental fleet |
|
21 |
|
516 |
|
|
|
90 |
|
627 |
|
474 |
|
521 |
|
|
|
31 |
|
1,026 |
|
1,354 |
| |||||||||||
Fleet growth |
|
$ |
134 |
|
$ |
(401 |
) |
$ |
(105 |
) |
$ |
(9 |
) |
$ |
(381 |
) |
$ |
(489 |
) |
$ |
(49 |
) |
$ |
(258 |
) |
$ |
(2 |
) |
$ |
(798 |
) |
$ |
(806 |
) |
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS
Unaudited
NET CORPORATE DEBT, NET FLEET DEBT AND TOTAL NET DEBT
|
|
|
|
|
|
|
|
As of December 31, 2013 |
|
As of December 31, 2013 |
| |||||||||||||||||
|
|
As of September 30, 2014 |
|
As Restated |
|
As Revised |
| |||||||||||||||||||||
(In millions) |
|
Fleet |
|
Corporate |
|
Total |
|
Fleet |
|
Corporate |
|
Total |
|
Fleet |
|
Corporate |
|
Total |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Debt |
|
$ |
10,237 |
|
$ |
6,749 |
|
$ |
16,986 |
|
$ |
9,806 |
|
$ |
6,503 |
|
$ |
16,309 |
|
$ |
9,806 |
|
$ |
6,503 |
|
$ |
16,309 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Cash and cash equivalents |
|
|
|
629 |
|
629 |
|
|
|
411 |
|
411 |
|
|
|
423 |
|
423 |
| |||||||||
Restricted cash |
|
708 |
|
40 |
|
748 |
|
772 |
|
89 |
|
861 |
|
772 |
|
88 |
|
860 |
| |||||||||
Net debt |
|
$ |
9,529 |
|
$ |
6,080 |
|
$ |
15,609 |
|
$ |
9,034 |
|
$ |
6,003 |
|
$ |
15,037 |
|
$ |
9,034 |
|
$ |
5,992 |
|
$ |
15,026 |
|
WORLDWIDE EQUIPMENT RENTAL AND RENTAL RELATED REVENUE
|
|
Three Months Ended September 30, |
|
Three Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Equipment rental segment revenues |
|
$ |
413 |
|
$ |
403 |
|
$ |
402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment sales and other revenue |
|
(33 |
) |
(33 |
) |
(33 |
) |
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Rental and rental related revenue at actual rates |
|
380 |
|
370 |
|
369 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Foreign currency adjustment (a) |
|
2 |
|
(1 |
) |
3 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Rental and rental related revenue |
|
$ |
382 |
|
$ |
369 |
|
$ |
372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
U.S. Car Rental
|
|
Three Months Ended September 30, |
|
Three Months Ended September 30, |
| |||||
(In millions, except as noted) |
|
2014 |
|
2013 |
|
2013 |
| |||
|
|
|
|
|
|
|
| |||
Car rental segment revenues |
|
$ |
1,768 |
|
$ |
1,770 |
|
$ |
1,766 |
|
Advantage sublease revenue |
|
|
|
(22 |
) |
(23 |
) | |||
Ancillary retail car sales revenue |
|
(9 |
) |
(4 |
) |
|
| |||
Total rental revenue |
|
$ |
1,759 |
|
$ |
1,744 |
|
$ |
1,743 |
|
Transaction days (in thousands) |
|
37,901 |
|
36,064 |
|
36,064 |
| |||
Total RPD (in whole dollars) |
|
$ |
46.41 |
|
$ |
48.36 |
|
$ |
48.33 |
|
|
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
37,901 |
|
36,064 |
|
|
| |||
Average Fleet |
|
515,300 |
|
516,800 |
|
|
| |||
Advantage sublease vehicles |
|
(1,000 |
) |
(23,000 |
) |
|
| |||
Hertz 24/7 vehicles |
|
(1,000 |
) |
(2,000 |
) |
|
| |||
Average Fleet used to calculate fleet efficiency |
|
513,300 |
|
491,800 |
|
|
| |||
Number of days in period |
|
92 |
|
92 |
|
|
| |||
Average fleet multiplied by number of dates in period (in thousands) |
|
$ |
47,224 |
|
$ |
45,246 |
|
|
| |
Fleet efficiency |
|
80 |
% |
80 |
% |
|
| |||
|
|
|
|
|
|
|
| |||
Depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
409 |
|
$ |
337 |
|
|
| |
Average fleet |
|
515,300 |
|
516,800 |
|
|
| |||
Depreciation of revenue earning equipment and lease charges, net divided by average fleet |
|
$ |
794 |
|
$ |
652 |
|
|
| |
Number of months in period |
|
3 |
|
3 |
|
|
| |||
Net depreciation per unit per month |
|
$ |
265 |
|
$ |
217 |
|
|
|
International Car Rental
|
|
Three Months Ended September 30, |
|
Three Months Ended September 30, |
| |||||
(in millions, except as noted) |
|
2014 |
|
2013 |
|
2013 |
| |||
|
|
|
|
|
|
|
| |||
Car rental segment revenues |
|
$ |
795 |
|
$ |
768 |
|
$ |
768 |
|
Foreign currency adjustment (a) |
|
11 |
|
19 |
|
21 |
| |||
Total rental revenue |
|
$ |
806 |
|
$ |
787 |
|
$ |
789 |
|
Transaction days (in thousands) |
|
14,695 |
|
14,278 |
|
14,278 |
| |||
Total RPD (in whole dollars) |
|
$ |
54.85 |
|
$ |
55.12 |
|
$ |
55.27 |
|
|
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
14,695 |
|
14,278 |
|
|
| |||
Average Fleet |
|
196,900 |
|
188,700 |
|
|
| |||
Number of days in period |
|
92 |
|
92 |
|
|
| |||
Average fleet multiplied by number of days in period |
|
18,115 |
|
17,360 |
|
|
| |||
Fleet efficiency |
|
81 |
% |
82 |
% |
|
| |||
|
|
|
|
|
|
|
| |||
Depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
143 |
|
$ |
151 |
|
|
| |
Foreign currency adjustment (in millions) (a) |
|
2 |
|
4 |
|
|
| |||
Adjusted depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
145 |
|
$ |
155 |
|
|
| |
Average fleet |
|
196,900 |
|
188,700 |
|
|
| |||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet |
|
$ |
736 |
|
$ |
821 |
|
|
| |
Number of months in period |
|
3 |
|
3 |
|
|
| |||
Net depreciation per unit per month |
|
$ |
245 |
|
$ |
274 |
|
|
|
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
FINANCIAL INFORMATION AND OPERATING DATA
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
|
|
Three Months Ended |
|
Three Months Ended December 31, |
| ||||||||
(In millions, except per share data) |
|
2014 |
|
2013 |
|
2013 |
|
2013 |
| ||||
Total revenues |
|
$ |
2,559 |
|
$ |
2,555 |
|
$ |
2,556 |
|
$ |
2,556 |
|
Expenses: |
|
|
|
|
|
|
|
|
| ||||
Direct operating |
|
1,575 |
|
1,449 |
|
1,439 |
|
1,439 |
| ||||
Depreciation of revenue earning equipment and lease charges |
|
853 |
|
641 |
|
643 |
|
643 |
| ||||
Selling, general and administrative |
|
245 |
|
234 |
|
222 |
|
222 |
| ||||
Interest expense, net |
|
164 |
|
171 |
|
169 |
|
169 |
| ||||
Other income, net |
|
6 |
|
21 |
|
21 |
|
21 |
| ||||
Total expenses |
|
2,843 |
|
2,516 |
|
2,494 |
|
2,494 |
| ||||
Income (loss) before income taxes |
|
(284 |
) |
39 |
|
62 |
|
62 |
| ||||
(Provision) benefit for taxes on income (loss) |
|
50 |
|
(57 |
) |
(63 |
) |
(63 |
) | ||||
Net income (loss) |
|
$ |
(234 |
) |
$ |
(18 |
) |
$ |
(1 |
) |
$ |
(1 |
) |
Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
459 |
|
447 |
|
447 |
|
447 |
| ||||
Diluted |
|
459 |
|
447 |
|
464 |
|
464 |
| ||||
Earnings per share: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
$ |
(0.51 |
) |
$ |
(0.04 |
) |
$ |
|
|
$ |
|
|
Diluted |
|
$ |
(0.51 |
) |
$ |
(0.04 |
) |
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest expense Fleet |
|
72 |
|
80 |
|
NR |
|
80 |
| ||||
Interest expense, net Corporate |
|
92 |
|
91 |
|
NR |
|
89 |
| ||||
Corporate EBITDA (a) |
|
76 |
|
388 |
|
NR |
|
406 |
| ||||
Adjusted pre-tax Income (loss) (a) |
|
(161 |
) |
157 |
|
NR |
|
186 |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule II.
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET DATA
(In millions) |
|
As of 2014 |
|
As of 2013 |
|
As of 2013 |
| |||
Cash and cash equivalents |
|
$ |
490 |
|
$ |
411 |
|
$ |
423 |
|
Restricted cash |
|
571 |
|
861 |
|
860 |
| |||
Revenue earning equipment: |
|
|
|
|
|
|
| |||
U.S. Car Rental |
|
8,070 |
|
8,629 |
|
8,629 |
| |||
International Car Rental |
|
1,904 |
|
2,047 |
|
2,047 |
| |||
Worldwide Equipment Rental |
|
2,442 |
|
2,416 |
|
2,416 |
| |||
All Other Operations |
|
1,237 |
|
1,099 |
|
1,101 |
| |||
Total revenue earning equipment, net |
|
13,653 |
|
14,191 |
|
14,193 |
| |||
Total assets |
|
23,985 |
|
24,423 |
|
24,588 |
| |||
Total debt |
|
15,993 |
|
16,309 |
|
16,309 |
| |||
Net Fleet debt (a) |
|
9,047 |
|
9,034 |
|
9,034 |
| |||
Net Corporate debt (a) (b) |
|
5,885 |
|
6,003 |
|
5,992 |
| |||
Total equity |
|
2,464 |
|
2,567 |
|
2,771 |
| |||
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule V.
(b) Fleet related to Hertz Equipment Rental Corporation is funded via Net Corporate Debt.
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
|
|
Twelve Months Ended |
|
Twelve Months Ended December 31, |
| |||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
| |||
|
|
|
|
|
|
|
| |||
Cash provided by (used in): |
|
|
|
|
|
|
| |||
Operating activities |
|
$ |
3,452 |
|
$ |
3,593 |
|
$ |
3,590 |
|
Investing activities |
|
(3,183 |
) |
(3,850 |
) |
(3,839 |
) | |||
Financing activities |
|
(159 |
) |
127 |
|
127 |
| |||
Effect of exchange rate changes |
|
(31 |
) |
|
|
|
| |||
Net change in cash and cash equivalents |
|
$ |
79 |
|
$ |
(130 |
) |
$ |
(122 |
) |
|
|
|
|
|
|
|
| |||
Fleet growth (a) |
|
$ |
104 |
|
$ |
(449 |
) |
$ |
(455 |
) |
Free cash flow (a) |
|
$ |
321 |
|
$ |
446 |
|
$ |
449 |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules III and IV.
SELECTED UNAUDITED OPERATING DATA BY SEGMENT
|
|
Three Months Ended December 31, |
|
Three Months Ended December 31, |
| |||||
|
|
2014 |
|
2013 |
|
2013 |
| |||
U.S. Car Rental |
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
33,595 |
|
32,875 |
|
32,875 |
| |||
Total RPD (a) |
|
$ |
43.85 |
|
$ |
44.75 |
|
$ |
44.91 |
|
Average fleet |
|
486,900 |
|
490,200 |
|
490,200 |
| |||
Fleet efficiency(a) |
|
75 |
% |
76 |
% |
NR |
| |||
Net depreciation per unit per month(a) |
|
$ |
365 |
|
$ |
229 |
|
NR |
| |
Program cars as a percentage of total average fleet at period end |
|
21 |
% |
9 |
% |
NR |
| |||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
(126 |
) |
$ |
132 |
|
$ |
170 |
|
International Car Rental |
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
10,734 |
|
10,473 |
|
10,473 |
| |||
Total RPD (a)(b) |
|
$ |
51.70 |
|
$ |
51.85 |
|
$ |
52.49 |
|
Average Fleet |
|
156,700 |
|
155,700 |
|
155,700 |
| |||
Fleet efficiency(a) |
|
74 |
% |
73 |
% |
NR |
| |||
Net depreciation per unit per month(a) |
|
$ |
225 |
|
$ |
225 |
|
NR |
| |
Program cars as a percentage of total average fleet at period end |
|
30 |
% |
24 |
% |
NR |
| |||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
(12 |
) |
$ |
21 |
|
$ |
15 |
|
Worldwide Equipment Rental |
|
|
|
|
|
|
| |||
Dollar utilization(a) |
|
38 |
% |
38 |
% |
NR |
| |||
Time utilization(a) |
|
67 |
% |
66 |
% |
NR |
| |||
Rental and rental related revenue (in millions) (a)(b) |
|
$ |
394 |
|
$ |
366 |
|
$ |
371 |
|
Same store revenue growth, including growth initiatives (a)(b) |
|
5 |
% |
5 |
% |
5 |
% | |||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
60 |
|
$ |
93 |
|
$ |
85 |
|
All Other Operations |
|
|
|
|
|
|
| |||
Average fleet Donlen |
|
166,800 |
|
173,800 |
|
173,800 |
| |||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
15 |
|
$ |
16 |
|
$ |
15 |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules II and V.
(b) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
SUPPLEMENTAL SCHEDULES AND DEFINITIONS
The following Supplemental Schedules and definitions are provided to present segment results and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules we provide definitions for terminology used throughout these schedules.
|
HERTZ GLOBAL HOLDINGS, INC. |
Supplemental Schedule I |
|
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT |
|
|
Unaudited |
|
|
|
Three Months Ended December 31, 2014 |
|
Three Months Ended December 31, 2013 |
|
Three Months Ended December 31, |
| ||||||||||||||||||||||||||||||||||||
(In millions) |
|
U.S. Car |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
U.S. Car |
|
Intl Car Rental |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
As Revised |
|
As Reported |
| ||||||||||||||
Total revenues: |
|
$ |
1,482 |
|
$ |
518 |
|
$ |
416 |
|
$ |
143 |
|
$ |
|
|
$ |
2,559 |
|
$ |
1,475 |
|
$ |
544 |
|
$ |
401 |
|
$ |
135 |
|
$ |
|
|
$ |
2,555 |
|
$ |
2,556 |
|
$ |
2,556 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
Direct operating |
|
982 |
|
342 |
|
232 |
|
6 |
|
13 |
|
1,575 |
|
888 |
|
337 |
|
214 |
|
6 |
|
4 |
|
1,449 |
|
1,439 |
|
1,439 |
| ||||||||||||||
Depreciation of revenue earning equipment and lease charges |
|
533 |
|
112 |
|
94 |
|
114 |
|
|
|
853 |
|
337 |
|
119 |
|
76 |
|
109 |
|
|
|
641 |
|
643 |
|
643 |
| ||||||||||||||
Selling, general and administrative |
|
71 |
|
62 |
|
47 |
|
7 |
|
58 |
|
245 |
|
101 |
|
60 |
|
33 |
|
6 |
|
34 |
|
234 |
|
222 |
|
222 |
| ||||||||||||||
Interest expense, net |
|
47 |
|
22 |
|
15 |
|
3 |
|
77 |
|
164 |
|
49 |
|
28 |
|
9 |
|
3 |
|
82 |
|
171 |
|
169 |
|
169 |
| ||||||||||||||
Other (income) expense, net |
|
13 |
|
2 |
|
(2 |
) |
1 |
|
(8 |
) |
6 |
|
(12 |
) |
29 |
|
(1 |
) |
2 |
|
3 |
|
21 |
|
21 |
|
21 |
| ||||||||||||||
Total expenses |
|
1,646 |
|
540 |
|
386 |
|
131 |
|
140 |
|
2,843 |
|
1,363 |
|
573 |
|
331 |
|
126 |
|
123 |
|
2,516 |
|
2,494 |
|
2,494 |
| ||||||||||||||
Income (loss)before income taxes |
|
$ |
(164 |
) |
$ |
(22 |
) |
$ |
30 |
|
$ |
12 |
|
$ |
(140 |
) |
$ |
(284 |
) |
$ |
112 |
|
$ |
(29 |
) |
$ |
70 |
|
$ |
9 |
|
$ |
(123 |
) |
$ |
39 |
|
$ |
62 |
|
$ |
62 |
|
Provision for taxes on income |
|
|
|
|
|
|
|
|
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
|
(57 |
) |
(63 |
) |
(63 |
) | ||||||||||||||
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
$ |
(234 |
) |
|
|
|
|
|
|
|
|
|
|
$ |
(18 |
) |
$ |
(1 |
) |
$ |
(1 |
) |
|
|
Supplemental Schedule II |
|
HERTZ GLOBAL HOLDINGS, INC. |
|
|
RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES |
|
|
TO EBITDA, CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME BY SEGMENT |
|
|
Unaudited |
|
|
|
Three Months Ended December 31, 2014 |
|
Three Months Ended December 31, 2013 |
|
Three Months |
| |||||||||||||||||||||||||||||||||
(In millions) |
|
U.S. Car |
|
Intl Car |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
U.S. Car |
|
Intl Car |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
Consolidated |
| |||||||||||||
Income (loss) before income taxes |
|
$ |
(164 |
) |
$ |
(22 |
) |
$ |
30 |
|
$ |
12 |
|
$ |
(140 |
) |
$ |
(284 |
) |
$ |
112 |
|
$ |
(29 |
) |
$ |
70 |
|
$ |
9 |
|
$ |
(123 |
) |
$ |
39 |
|
$ |
62 |
|
Depreciation and amortization |
|
588 |
|
122 |
|
113 |
|
117 |
|
7 |
|
947 |
|
392 |
|
131 |
|
94 |
|
111 |
|
3 |
|
731 |
|
729 |
| |||||||||||||
Interest, net of interest income |
|
47 |
|
22 |
|
15 |
|
3 |
|
77 |
|
164 |
|
49 |
|
28 |
|
9 |
|
3 |
|
82 |
|
171 |
|
169 |
| |||||||||||||
EBITDA |
|
$ |
471 |
|
$ |
122 |
|
$ |
158 |
|
$ |
132 |
|
$ |
(56 |
) |
$ |
827 |
|
$ |
553 |
|
$ |
130 |
|
$ |
173 |
|
$ |
123 |
|
$ |
(38 |
) |
$ |
941 |
|
$ |
960 |
|
Car rental fleet depreciation |
|
(533 |
) |
(111 |
) |
|
|
(115 |
) |
|
|
(759 |
) |
(337 |
) |
(119 |
) |
|
|
(109 |
) |
|
|
(565 |
) |
(567 |
) | |||||||||||||
Car rental fleet interest |
|
(49 |
) |
(20 |
) |
|
|
(3 |
) |
|
|
(72 |
) |
(51 |
) |
(25 |
) |
|
|
(3 |
) |
|
|
(79 |
) |
(79 |
) | |||||||||||||
Car rental fleet debt - related charges (a) |
|
5 |
|
3 |
|
|
|
1 |
|
|
|
9 |
|
8 |
|
4 |
|
|
|
1 |
|
|
|
13 |
|
13 |
| |||||||||||||
Non-cash stock-based employee compensation charges (b) |
|
|
|
4 |
|
|
|
|
|
(14 |
) |
(10 |
) |
|
|
4 |
|
|
|
|
|
2 |
|
6 |
|
4 |
| |||||||||||||
Restructuring and restructuring related charges (c) |
|
12 |
|
3 |
|
|
|
|
|
24 |
|
39 |
|
5 |
|
9 |
|
8 |
|
|
|
4 |
|
26 |
|
27 |
| |||||||||||||
Acquisition related costs and charges (d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
|
5 |
|
5 |
| |||||||||||||
Integration expenses (d) |
|
|
|
|
|
|
|
|
|
1 |
|
1 |
|
9 |
|
|
|
|
|
|
|
5 |
|
14 |
|
11 |
| |||||||||||||
Equipment Rental spin-off costs (e) |
|
|
|
|
|
11 |
|
|
|
1 |
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Relocation costs (f) |
|
|
|
|
|
|
|
|
|
2 |
|
2 |
|
(1 |
) |
|
|
|
|
|
|
3 |
|
2 |
|
3 |
| |||||||||||||
Premiums paid on debt (g) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29 |
|
|
|
|
|
|
|
29 |
|
29 |
| |||||||||||||
Loss on extinguishment of debt (h) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7 |
|
7 |
|
|
| |||||||||||||
Impairment charges and asset write-downs (i) |
|
|
|
|
|
10 |
|
|
|
14 |
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Other extraordinary, unusual or non-recurring items |
|
|
|
1 |
|
(1 |
) |
|
|
3 |
|
3 |
|
(13 |
) |
5 |
|
|
|
2 |
|
(5 |
) |
(11 |
) |
|
| |||||||||||||
Corporate EBITDA |
|
$ |
(94 |
) |
$ |
2 |
|
$ |
178 |
|
$ |
15 |
|
$ |
(25 |
) |
$ |
76 |
|
$ |
173 |
|
$ |
37 |
|
$ |
181 |
|
$ |
14 |
|
$ |
(17 |
) |
$ |
388 |
|
$ |
406 |
|
Non-fleet depreciation and amortization |
|
(55 |
) |
(11 |
) |
(113 |
) |
(2 |
) |
(7 |
) |
(188 |
) |
(55 |
) |
(12 |
) |
(94 |
) |
(2 |
) |
(3 |
) |
(166 |
) |
(162 |
) | |||||||||||||
Non-fleet interest, net of interest income |
|
2 |
|
(2 |
) |
(15 |
) |
|
|
(77 |
) |
(92 |
) |
2 |
|
(3 |
) |
(9 |
) |
|
|
(82 |
) |
(92 |
) |
(90 |
) | |||||||||||||
Non-fleet debt - related charges (a) |
|
1 |
|
|
|
1 |
|
|
|
3 |
|
5 |
|
|
|
|
|
2 |
|
1 |
|
(1 |
) |
2 |
|
1 |
| |||||||||||||
Non-cash stock-based employee compensation charges |
|
|
|
(4 |
) |
|
|
|
|
14 |
|
10 |
|
|
|
(4 |
) |
|
|
|
|
(2 |
) |
(6 |
) |
(4 |
) | |||||||||||||
Acquisition accounting (j) |
|
20 |
|
3 |
|
9 |
|
2 |
|
|
|
34 |
|
12 |
|
3 |
|
10 |
|
3 |
|
|
|
28 |
|
33 |
| |||||||||||||
Other |
|
|
|
|
|
|
|
|
|
(6 |
) |
(6 |
) |
|
|
|
|
3 |
|
|
|
|
|
3 |
|
2 |
| |||||||||||||
Adjusted Pre-Tax Income (Loss) |
|
$ |
(126 |
) |
$ |
(12 |
) |
$ |
60 |
|
$ |
15 |
|
$ |
(98 |
) |
$ |
(161 |
) |
$ |
132 |
|
$ |
21 |
|
$ |
93 |
|
$ |
16 |
|
$ |
(105 |
) |
$ |
157 |
|
$ |
186 |
|
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
FREE CASH FLOW
Unaudited
|
|
Twelve Months Ended |
|
Twelve |
| |||||
|
|
December 31, |
|
December 31, |
| |||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
| |||
Income before income taxes |
|
$ |
(23 |
) |
$ |
603 |
|
$ |
663 |
|
Depreciation and amortization, non-fleet assets |
|
366 |
|
339 |
|
206 |
| |||
Amortization of debt discount and related charges |
|
46 |
|
68 |
|
190 |
| |||
Cash paid for income taxes |
|
(64 |
) |
(71 |
) |
(71 |
) | |||
Changes in assets and liabilities, net of effects of acquisitions, and other |
|
173 |
|
202 |
|
157 |
| |||
Net cash provided by operating activities excluding depreciation of revenue earning equipment |
|
498 |
|
1,141 |
|
1,145 |
| |||
U.S. car rental fleet growth (a) |
|
260 |
|
(500 |
) |
(511 |
) | |||
International car rental fleet growth (a) |
|
(61 |
) |
243 |
|
247 |
| |||
Equipment rental fleet growth (a) |
|
(103 |
) |
(235 |
) |
(234 |
) | |||
All other operations rental fleet growth (a) |
|
8 |
|
43 |
|
43 |
| |||
Property and equipment expenditures, net of disposals |
|
(281 |
) |
(246 |
) |
(241 |
) | |||
Net investment activity |
|
(177 |
) |
(695 |
) |
(696 |
) | |||
Free cash flow |
|
$ |
321 |
|
$ |
446 |
|
$ |
449 |
|
(a) Historically, fleet growth has not been reported on a segment basis.
Supplemental Schedule IV
HERTZ GLOBAL HOLDINGS, INC.
FLEET GROWTH
Unaudited
|
|
Twelve Months Ended December 31, 2014 |
|
Twelve Months Ended December 31, 2013 |
|
Twelve Months |
| |||||||||||||||||||||||||||
(In millions) |
|
U.S. Car |
|
Intl Car |
|
Worldwide |
|
All Other |
|
Consolidated |
|
U.S. Car |
|
Intl Car |
|
Worldwide |
|
All Other |
|
Consolidated |
|
Consolidated HGH |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Revenue earning equipment expenditures |
|
$ |
(5,965 |
) |
$ |
(3,103 |
) |
$ |
(615 |
) |
$ |
(1,606 |
) |
$ |
(11,289 |
) |
$ |
(6,015 |
) |
$ |
(2,593 |
) |
$ |
(672 |
) |
$ |
(1,009 |
) |
$ |
(10,289 |
) |
$ |
(10,298 |
) |
Proceeds from disposal of revenue earning equipment |
|
4,507 |
|
2,510 |
|
182 |
|
1,010 |
|
8,209 |
|
4,320 |
|
2,242 |
|
138 |
|
556 |
|
7,256 |
|
7,264 |
| |||||||||||
Net revenue earning equipment capital expenditures |
|
(1,458 |
) |
(593 |
) |
(433 |
) |
(596 |
) |
(3,080 |
) |
(1,695 |
) |
(351 |
) |
(534 |
) |
(453 |
) |
(3,033 |
) |
(3,034 |
) | |||||||||||
Depreciation of revenue earning equipment |
|
1,758 |
|
412 |
|
330 |
|
455 |
|
2,955 |
|
1,279 |
|
447 |
|
299 |
|
425 |
|
2,450 |
|
2,445 |
| |||||||||||
Financing activity related to car rental fleet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Borrowings |
|
2,702 |
|
1,181 |
|
|
|
511 |
|
4,394 |
|
5,600 |
|
2,019 |
|
|
|
1,531 |
|
9,150 |
|
NR |
| |||||||||||
Payments |
|
(3,012 |
) |
(1,051 |
) |
|
|
(350 |
) |
(4,413 |
) |
(5,432 |
) |
(1,884 |
) |
|
|
(1,444 |
) |
(8,760 |
) |
NR |
| |||||||||||
Restricted cash changes |
|
270 |
|
(10 |
) |
|
|
(12 |
) |
248 |
|
(252 |
) |
12 |
|
|
|
(16 |
) |
(256 |
) |
NR |
| |||||||||||
Net financing activity related to car rental fleet |
|
(40 |
) |
120 |
|
|
|
149 |
|
229 |
|
(84 |
) |
147 |
|
|
|
71 |
|
134 |
|
134 |
| |||||||||||
Fleet growth |
|
$ |
260 |
|
$ |
(61 |
) |
$ |
(103 |
) |
$ |
8 |
|
$ |
104 |
|
$ |
(500 |
) |
$ |
243 |
|
$ |
(235 |
) |
$ |
43 |
|
$ |
(449 |
) |
$ |
(455 |
) |
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS
Unaudited
NET CORPORATE DEBT, NET FLEET DEBT AND TOTAL NET DEBT
|
|
|
|
|
|
|
|
As of December 31, 2013 |
|
As of December 31, 2013 |
| |||||||||||||||||
|
|
As of December 31, 2014 |
|
As Restated |
|
As Revised |
| |||||||||||||||||||||
(In millions) |
|
Fleet |
|
Corporate |
|
Total |
|
Fleet |
|
Corporate |
|
Total |
|
Fleet |
|
Corporate |
|
Total |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Debt |
|
$ |
9,562 |
|
$ |
6,431 |
|
$ |
15,993 |
|
$ |
9,806 |
|
$ |
6,503 |
|
$ |
16,309 |
|
$ |
9,806 |
|
$ |
6,503 |
|
$ |
16,309 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Cash and cash equivalents |
|
|
|
490 |
|
490 |
|
|
|
411 |
|
411 |
|
|
|
423 |
|
423 |
| |||||||||
Restricted cash |
|
515 |
|
56 |
|
571 |
|
772 |
|
89 |
|
861 |
|
772 |
|
88 |
|
860 |
| |||||||||
Net debt |
|
$ |
9,047 |
|
$ |
5,885 |
|
$ |
14,932 |
|
$ |
9,034 |
|
$ |
6,003 |
|
$ |
15,037 |
|
$ |
9,034 |
|
$ |
5,992 |
|
$ |
15,026 |
|
WORLDWIDE EQUIPMENT RENTAL AND RENTAL RELATED REVENUE
|
|
Three Months |
|
Three |
| |||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
| |||
|
|
|
|
|
|
|
| |||
Equipment rental segment revenues |
|
$ |
416 |
|
$ |
401 |
|
$ |
401 |
|
Equipment sales and other revenue |
|
(28 |
) |
(34 |
) |
(34 |
) | |||
Rental and rental related revenue at actual rates |
|
388 |
|
367 |
|
367 |
| |||
Foreign currency adjustment (a) |
|
6 |
|
(1 |
) |
3 |
| |||
Rental and rental related revenue |
|
$ |
394 |
|
$ |
366 |
|
$ |
370 |
|
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
U.S. Car Rental Segment
|
|
Three Months |
|
Three Months Ended |
| |||||
(In millions, except as noted) |
|
2014 |
|
2013 |
|
2013 |
| |||
Revenues |
|
$ |
1,482 |
|
$ |
1,475 |
|
$ |
1,476 |
|
Advantage sublease revenue |
|
|
|
|
|
|
| |||
Ancillary retail car sales revenue |
|
(9 |
) |
(4 |
) |
|
| |||
Total rental revenue |
|
$ |
1,473 |
|
$ |
1,471 |
|
$ |
1,476 |
|
Transaction days (in thousands) |
|
33,595 |
|
32,875 |
|
32,875 |
| |||
Total RPD (in whole dollars) |
|
$ |
43.85 |
|
$ |
44.75 |
|
$ |
44.91 |
|
|
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
33,595 |
|
32,875 |
|
|
| |||
Average Fleet |
|
486,900 |
|
490,200 |
|
|
| |||
Advantage sublease vehicles |
|
|
|
(18,000 |
) |
|
| |||
Hertz 24/7 vehicles |
|
|
|
(2,000 |
) |
|
| |||
Average Fleet used to calculate fleet efficiency |
|
486,900 |
|
470,200 |
|
|
| |||
Number of days in period |
|
92 |
|
92 |
|
|
| |||
Average fleet multiplied by number of days in period (in thousands) |
|
$ |
44,795 |
|
$ |
43,258 |
|
|
| |
Fleet efficiency |
|
75 |
% |
76 |
% |
|
| |||
|
|
|
|
|
|
|
| |||
Depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
533 |
|
$ |
337 |
|
|
| |
Average fleet |
|
486,900 |
|
490,200 |
|
|
| |||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet |
|
$ |
1,095 |
|
$ |
687 |
|
|
| |
Number of months in period |
|
3 |
|
3 |
|
|
| |||
Net depreciation per unit per month |
|
$ |
365 |
|
$ |
229 |
|
|
|
International Car Rental
|
|
Three Months Ended |
|
Three Months Ended |
| |||||
(in millions, except as noted) |
|
2014 |
|
2013 |
|
2013 |
| |||
Revenues |
|
$ |
518 |
|
$ |
544 |
|
$ |
544 |
|
Foreign currency adjustment (a) |
|
37 |
|
(1 |
) |
6 |
| |||
Total rental revenue |
|
$ |
555 |
|
$ |
543 |
|
$ |
550 |
|
Transaction days (in thousands) |
|
10,734 |
|
10,473 |
|
10,473 |
| |||
Total RPD (in whole dollars) |
|
$ |
51.70 |
|
$ |
51.85 |
|
$ |
52.49 |
|
|
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
10,734 |
|
10,473 |
|
|
| |||
Average Fleet |
|
156,700 |
|
155,700 |
|
|
| |||
Number of days in period |
|
92 |
|
92 |
|
|
| |||
Average fleet multiplied by number of days in period |
|
14,416 |
|
14,324 |
|
|
| |||
Fleet efficiency |
|
74 |
% |
73 |
% |
|
| |||
|
|
|
|
|
|
|
| |||
Depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
112 |
|
$ |
119 |
|
|
| |
Foreign currency adjustment (in millions) (a) |
|
8 |
|
|
|
|
| |||
Adjusted depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
120 |
|
$ |
119 |
|
|
| |
Average fleet |
|
156,700 |
|
155,700 |
|
|
| |||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet |
|
$ |
766 |
|
$ |
764 |
|
|
| |
Number of months in period |
|
3 |
|
3 |
|
|
| |||
Net depreciation per unit per month |
|
$ |
255 |
|
$ |
255 |
|
|
|
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
FINANCIAL INFORMATION AND OPERATING DATA
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
|
|
Twelve Months Ended |
|
Twelve Months |
| |||||
(In millions, except per share data) |
|
2014 |
|
2013 |
|
2013 |
| |||
Total revenues |
|
$ |
11,046 |
|
$ |
10,775 |
|
$ |
10,772 |
|
Expenses: |
|
|
|
|
|
|
| |||
Direct operating |
|
6,314 |
|
5,777 |
|
5,752 |
| |||
Depreciation of revenue earning equipment and lease charges |
|
3,034 |
|
2,533 |
|
2,526 |
| |||
Selling, general and administrative |
|
1,088 |
|
1,053 |
|
1,022 |
| |||
Interest expense, net |
|
648 |
|
707 |
|
704 |
| |||
Other income, net |
|
(15 |
) |
102 |
|
105 |
| |||
Total expenses |
|
11,069 |
|
10,172 |
|
10,109 |
| |||
Income (loss) before income taxes |
|
(23 |
) |
603 |
|
663 |
| |||
(Provision) benefit for taxes on income (loss) |
|
(59 |
) |
(301 |
) |
(317 |
) | |||
Net income (loss) |
|
$ |
(82 |
) |
$ |
302 |
|
$ |
346 |
|
Weighted average number of shares outstanding: |
|
|
|
|
|
|
| |||
Basic |
|
454 |
|
422 |
|
422 |
| |||
Diluted |
|
454 |
|
464 |
|
464 |
| |||
Earnings per share: |
|
|
|
|
|
|
| |||
Basic |
|
$ |
(0.18 |
) |
$ |
0.72 |
|
$ |
0.82 |
|
Diluted |
|
$ |
(0.18 |
) |
$ |
0.67 |
|
$ |
0.76 |
|
|
|
|
|
|
|
|
| |||
Interest expense Fleet |
|
$ |
279 |
|
$ |
314 |
|
$ |
312 |
|
Interest expense, net Corporate |
|
369 |
|
393 |
|
392 |
| |||
Corporate EBITDA (a) |
|
1,331 |
|
2,001 |
|
2,044 |
| |||
Adjusted pre-tax Income (loss) (a) |
|
403 |
|
1,096 |
|
1,154 |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule II.
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET DATA
(In millions) |
|
As of |
|
As of |
|
As of |
| |||
Cash and cash equivalents |
|
$ |
490 |
|
$ |
411 |
|
$ |
423 |
|
Restricted cash |
|
571 |
|
861 |
|
860 |
| |||
Revenue earning equipment: |
|
|
|
|
|
|
| |||
U.S. Car Rental |
|
8,070 |
|
8,629 |
|
8,629 |
| |||
International Car Rental |
|
1,904 |
|
2,047 |
|
2,047 |
| |||
Worldwide Equipment Rental |
|
2,442 |
|
2,416 |
|
2,416 |
| |||
All Other Operations |
|
1,237 |
|
1,099 |
|
1,101 |
| |||
Total revenue earning equipment, net |
|
13,653 |
|
14,191 |
|
14,193 |
| |||
Total assets |
|
23,985 |
|
24,423 |
|
24,588 |
| |||
Total debt |
|
15,993 |
|
16,309 |
|
16,309 |
| |||
Net Fleet debt (a) |
|
9,047 |
|
9,034 |
|
9,034 |
| |||
Net Corporate debt (a) (b) |
|
5,885 |
|
6,003 |
|
5,992 |
| |||
Total equity |
|
2,464 |
|
2,567 |
|
2,771 |
| |||
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule V.
(b) Fleet related to Hertz Equipment Rental Corporation is funded via Net Corporate Debt.
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
|
|
Twelve Months Ended |
|
Twelve Months |
| |||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
| |||
|
|
|
|
|
|
|
| |||
Cash provided by (used in): |
|
|
|
|
|
|
| |||
Operating activities |
|
$ |
3,452 |
|
$ |
3,593 |
|
$ |
3,590 |
|
Investing activities |
|
(3,183 |
) |
(3,850 |
) |
(3,839 |
) | |||
Financing activities |
|
(159 |
) |
127 |
|
127 |
| |||
Effect of exchange rate changes |
|
(31 |
) |
|
|
|
| |||
Net change in cash and cash equivalents |
|
$ |
79 |
|
$ |
(130 |
) |
$ |
(122 |
) |
|
|
|
|
|
|
|
| |||
Fleet growth (a) |
|
$ |
104 |
|
$ |
(449 |
) |
$ |
(455 |
) |
Free cash flow (a) |
|
$ |
321 |
|
$ |
446 |
|
$ |
449 |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules III and IV.
SELECTED UNAUDITED OPERATING DATA BY SEGMENT
|
|
Twelve Months Ended December 31, |
|
Twelve Months |
| |||||
|
|
2014 |
|
2013 |
|
2013 |
| |||
U.S. Car Rental |
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
139,752 |
|
133,181 |
|
133,181 |
| |||
Total RPD (a) |
|
$ |
46.07 |
|
$ |
46.94 |
|
$ |
47.00 |
|
Average fleet |
|
499,100 |
|
490,000 |
|
490,000 |
| |||
Fleet efficiency(a) |
|
77 |
% |
78 |
% |
NR |
| |||
Net depreciation per unit per month(a) |
|
$ |
294 |
|
$ |
218 |
|
NR |
| |
Program cars as a percentage of total average fleet at period end |
|
21 |
% |
9 |
% |
NR |
| |||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
387 |
|
$ |
1,033 |
|
$ |
1,091 |
|
International Car Rental |
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
46,917 |
|
45,019 |
|
45,019 |
| |||
Total RPD (a)(b) |
|
$ |
52.86 |
|
$ |
53.31 |
|
$ |
53.81 |
|
Average Fleet |
|
166,900 |
|
161,300 |
|
161,300 |
| |||
Fleet efficiency(a) |
|
77 |
% |
76 |
% |
NR |
| |||
Net depreciation per unit per month(a) |
|
$ |
250 |
|
$ |
275 |
|
NR |
| |
Program cars as a percentage of total average fleet at period end |
|
30 |
% |
24 |
% |
NR |
| |||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
144 |
|
$ |
134 |
|
$ |
141 |
|
Worldwide Equipment Rental |
|
|
|
|
|
|
| |||
Dollar utilization(a) |
|
36 |
% |
37 |
% |
NR |
| |||
Time utilization(a) |
|
64 |
% |
65 |
% |
NR |
| |||
Rental and rental related revenue (in millions) (a)(b) |
|
$ |
1,468 |
|
$ |
1,400 |
|
$ |
1,415 |
|
Same store revenue growth, including growth initiatives (b) |
|
5 |
% |
10 |
% |
10 |
% | |||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
258 |
|
$ |
301 |
|
$ |
292 |
|
All Other Operations |
|
|
|
|
|
|
| |||
Average fleet Donlen |
|
172,800 |
|
169,600 |
|
169,600 |
| |||
Adjusted pre-tax income (loss) (in millions) (a) |
|
$ |
62 |
|
$ |
58 |
|
$ |
57 |
|
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules II and V.
(b) Based on December 31, 2013 foreign exchange rates for the periods shown.
SUPPLEMENTAL SCHEDULES AND DEFINITIONS
The following Supplemental Schedules and definitions are provided to present segment results and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules we provide definitions for terminology used throughout these schedules.
|
HERTZ GLOBAL HOLDINGS, INC. |
Supplemental Schedule I |
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
|
|
Twelve Months Ended December 31, 2014 |
|
Twelve Months Ended December 31, 2013 |
|
Twelve Months |
| |||||||||||||||||||||||||||||||||
(In millions) |
|
U.S. Car |
|
Intl Car |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
U.S. Car |
|
Intl Car |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
Consolidated |
| |||||||||||||
Total revenues: |
|
$ |
6,471 |
|
$ |
2,436 |
|
$ |
1,571 |
|
$ |
568 |
|
$ |
|
|
$ |
11,046 |
|
$ |
6,331 |
|
$ |
2,378 |
|
$ |
1,539 |
|
$ |
527 |
|
$ |
|
|
$ |
10,775 |
|
$ |
10,772 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Direct operating |
|
3,921 |
|
1,491 |
|
863 |
|
24 |
|
15 |
|
6,314 |
|
3,531 |
|
1,407 |
|
826 |
|
24 |
|
(11 |
) |
5,777 |
|
5,752 |
| |||||||||||||
Depreciation of revenue earning equipment and lease charges |
|
1,758 |
|
492 |
|
329 |
|
455 |
|
|
|
3,034 |
|
1,281 |
|
528 |
|
299 |
|
425 |
|
|
|
2,533 |
|
2,526 |
| |||||||||||||
Selling, general and administrative |
|
380 |
|
259 |
|
161 |
|
30 |
|
258 |
|
1,088 |
|
429 |
|
267 |
|
131 |
|
27 |
|
199 |
|
1,053 |
|
1,022 |
| |||||||||||||
Interest expense, net |
|
172 |
|
95 |
|
53 |
|
12 |
|
316 |
|
648 |
|
187 |
|
113 |
|
46 |
|
14 |
|
347 |
|
707 |
|
704 |
| |||||||||||||
Other (income) expense, net |
|
(18 |
) |
4 |
|
(5 |
) |
1 |
|
3 |
|
(15 |
) |
31 |
|
29 |
|
(4 |
) |
1 |
|
45 |
|
102 |
|
105 |
| |||||||||||||
Total expenses |
|
6,213 |
|
2,341 |
|
1,401 |
|
522 |
|
592 |
|
11,069 |
|
5,459 |
|
2,344 |
|
1,298 |
|
491 |
|
580 |
|
10,172 |
|
10,109 |
| |||||||||||||
Income (loss)before income taxes |
|
$ |
258 |
|
$ |
95 |
|
$ |
170 |
|
$ |
46 |
|
$ |
(592 |
) |
$ |
(23 |
) |
$ |
872 |
|
$ |
34 |
|
$ |
241 |
|
$ |
36 |
|
$ |
(580 |
) |
$ |
603 |
|
$ |
663 |
|
Provision for taxes on income |
|
|
|
|
|
|
|
|
|
|
|
(59 |
) |
|
|
|
|
|
|
|
|
|
|
(301 |
) |
(317 |
) | |||||||||||||
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
$ |
(82 |
) |
|
|
|
|
|
|
|
|
|
|
$ |
302 |
|
$ |
346 |
|
Supplemental Schedule II
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES
TO EBITDA, CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME BY SEGMENT
Unaudited
|
|
Twelve Months Ended December 31, 2014 |
|
Twelve Months Ended December 31, 2013 |
|
Ended |
| |||||||||||||||||||||||||||||||||
(In millions) |
|
U.S. Car |
|
Intl Car |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
U.S. Car |
|
Intl Car |
|
Worldwide |
|
All Other |
|
Corporate |
|
Consolidated |
|
Consolidated |
| |||||||||||||
Income (loss) before income taxes |
|
$ |
258 |
|
$ |
95 |
|
$ |
170 |
|
$ |
46 |
|
$ |
(592 |
) |
$ |
(23 |
) |
$ |
872 |
|
$ |
34 |
|
$ |
241 |
|
$ |
36 |
|
$ |
(580 |
) |
$ |
603 |
|
$ |
663 |
|
Depreciation and amortization |
|
1,976 |
|
533 |
|
404 |
|
465 |
|
22 |
|
3,400 |
|
1,489 |
|
564 |
|
373 |
|
436 |
|
10 |
|
2,872 |
|
2,853 |
| |||||||||||||
Interest, net of interest income |
|
172 |
|
95 |
|
53 |
|
12 |
|
316 |
|
648 |
|
187 |
|
113 |
|
46 |
|
14 |
|
347 |
|
707 |
|
704 |
| |||||||||||||
EBITDA |
|
$ |
2,406 |
|
$ |
723 |
|
$ |
627 |
|
$ |
523 |
|
$ |
(254 |
) |
$ |
4,025 |
|
$ |
2,548 |
|
$ |
711 |
|
$ |
660 |
|
$ |
486 |
|
$ |
(223 |
) |
$ |
4,182 |
|
$ |
4,220 |
|
Car rental fleet depreciation |
|
(1,758 |
) |
(492 |
) |
|
|
(455 |
) |
|
|
(2,705 |
) |
(1,281 |
) |
(528 |
) |
|
|
(425 |
) |
|
|
(2,234 |
) |
(2,227 |
) | |||||||||||||
Car rental fleet interest |
|
(178 |
) |
(85 |
) |
|
|
(14 |
) |
|
|
(277 |
) |
(186 |
) |
(102 |
) |
|
|
(14 |
) |
|
|
(302 |
) |
(302 |
) | |||||||||||||
Car rental fleet debt - related charges (a) |
|
10 |
|
15 |
|
|
|
6 |
|
|
|
31 |
|
13 |
|
14 |
|
|
|
6 |
|
(1 |
) |
32 |
|
32 |
| |||||||||||||
Non-cash stock-based employee compensation charges (b) |
|
|
|
4 |
|
|
|
|
|
6 |
|
10 |
|
|
|
4 |
|
|
|
|
|
31 |
|
35 |
|
35 |
| |||||||||||||
Restructuring and restructuring related charges (c) |
|
55 |
|
25 |
|
7 |
|
|
|
78 |
|
165 |
|
26 |
|
35 |
|
10 |
|
|
|
28 |
|
99 |
|
99 |
| |||||||||||||
Acquisition related costs and charges (d) |
|
|
|
|
|
|
|
|
|
10 |
|
10 |
|
|
|
|
|
|
|
|
|
19 |
|
19 |
|
19 |
| |||||||||||||
Integration expenses (d) |
|
1 |
|
|
|
|
|
|
|
8 |
|
9 |
|
21 |
|
|
|
|
|
|
|
22 |
|
43 |
|
40 |
| |||||||||||||
Equipment Rental spin-off costs (e) |
|
|
|
|
|
28 |
|
|
|
11 |
|
39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Relocation costs (f) |
|
|
|
|
|
|
|
|
|
9 |
|
9 |
|
|
|
|
|
|
|
|
|
7 |
|
7 |
|
8 |
| |||||||||||||
Premiums paid on debt (g) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29 |
|
|
|
|
|
|
|
29 |
|
29 |
| |||||||||||||
Loss on extinguishment of debt (h) |
|
|
|
|
|
|
|
|
|
1 |
|
1 |
|
|
|
|
|
|
|
|
|
35 |
|
35 |
|
|
| |||||||||||||
Impairment charges and asset write-downs (i) |
|
10 |
|
|
|
10 |
|
|
|
14 |
|
34 |
|
40 |
|
|
|
|
|
|
|
|
|
40 |
|
44 |
| |||||||||||||
Other extraordinary, unusual or non-recurring items (j) |
|
(21 |
) |
(2 |
) |
|
|
|
|
3 |
|
(20 |
) |
(5 |
) |
12 |
|
|
|
1 |
|
8 |
|
16 |
|
47 |
| |||||||||||||
Corporate EBITDA |
|
$ |
525 |
|
$ |
188 |
|
$ |
672 |
|
$ |
60 |
|
$ |
(114 |
) |
$ |
1,331 |
|
$ |
1,176 |
|
$ |
175 |
|
$ |
670 |
|
$ |
54 |
|
$ |
(74 |
) |
$ |
2,001 |
|
$ |
2,044 |
|
Non-fleet depreciation and amortization |
|
(218 |
) |
(41 |
) |
(404 |
) |
(10 |
) |
(22 |
) |
(695 |
) |
(208 |
) |
(36 |
) |
(373 |
) |
(11 |
) |
(10 |
) |
(638 |
) |
(626 |
) | |||||||||||||
Non-fleet interest, net of interest income |
|
6 |
|
(10 |
) |
(53 |
) |
2 |
|
(316 |
) |
(371 |
) |
(1 |
) |
(11 |
) |
(46 |
) |
|
|
(347 |
) |
(405 |
) |
(402 |
) | |||||||||||||
Non-fleet debt - related charges (a) |
|
2 |
|
|
|
5 |
|
|
|
15 |
|
22 |
|
1 |
|
|
|
5 |
|
|
|
30 |
|
36 |
|
36 |
| |||||||||||||
Non-cash stock-based employee compensation charges |
|
|
|
(4 |
) |
|
|
|
|
(6 |
) |
(10 |
) |
|
|
(4 |
) |
|
|
|
|
(31 |
) |
(35 |
) |
(35 |
) | |||||||||||||
Acquisition accounting (k) |
|
72 |
|
11 |
|
38 |
|
10 |
|
1 |
|
132 |
|
65 |
|
10 |
|
40 |
|
15 |
|
2 |
|
132 |
|
132 |
| |||||||||||||
Other (l) |
|
|
|
|
|
|
|
|
|
(6 |
) |
(6 |
) |
|
|
|
|
5 |
|
|
|
|
|
5 |
|
5 |
| |||||||||||||
Adjusted Pre-Tax Income (Loss) |
|
$ |
387 |
|
$ |
144 |
|
$ |
258 |
|
$ |
62 |
|
$ |
(448 |
) |
$ |
403 |
|
$ |
1,033 |
|
$ |
134 |
|
$ |
301 |
|
$ |
58 |
|
$ |
(430 |
) |
$ |
1,096 |
|
$ |
1,154 |
|
(a) Represents non-cash charges relating to the amortization of deferred debt financing costs and debt discounts.
(b) For twelve months ended December 31, 2014, excludes $6 million of stock-based compensation forfeitures included in restructuring and restructuring related charges.
(c) Represents expenses incurred under restructuring actions as defined by U.S. GAAP as well as transition costs incurred in connection with our 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. Amount in 2014 also includes consulting costs and legal fees related to the accounting review and investigation, one-time costs to terminate certain marketing and co-branding arrangements, and costs associated with the separation of certain executives during the year.
(d) Primarily represents Dollar Thrifty integration related expenses.
(e) Represents expense associated with the anticipated HERC spin-off transaction of which $28 million were incurred by HERC and $11 million were incurred by Corporate in 2014.
(f) Represents non-recurring costs incurred in connection with the relocation of our corporate headquarters to Estero, Florida that were not included in restructuring expenses. Such expenses primarily include duplicate facility rent, certain moving expenses, and other costs that are direct and incremental due to the relocation.
(g) In 2013, represents premiums paid to redeem our 8.50% Former European Fleet Notes.
(h) In 2013, represents extinguishment of debt for Senior Convertible Notes.
(i) For 2014, primarily comprised of impairments related to our former corporate headquarters building in New Jersey and HERC revenue earning equipment held for sale. Additionally, 2014 includes write-downs of assets associated with a terminated business relationship. In 2013, primarily related to a change in the carrying value of the vehicles subleased to FSNA and its former subsidiary, Simply Wheelz.
(j) In 2014, primarily comprised of a $19 million litigation settlement received in relation to a class action lawsuit filed against an original equipment manufacturer. In 2013, primarily represents cash premiums of $12 million associated with the conversion of the Senior Convertible Notes.
(k) Represents the increase in amortization of other intangible assets, depreciation of property and equipment and accretion of revalued liabilities relating to acquisition accounting.
(l) In 2014, represents $6 million of stock-based compensation foreitures included in restructuring and restructuring related charges. In 2013, represents $5 million of depreciation expense related to HERC.
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
FREE CASH FLOW
Unaudited
|
|
Twelve Months Ended |
|
Twelve |
| |||||
|
|
December 31, |
|
December 31, |
| |||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
| |||
Income before income taxes |
|
$ |
(23 |
) |
$ |
603 |
|
$ |
663 |
|
Depreciation and amortization, non-fleet assets |
|
366 |
|
339 |
|
205 |
| |||
Amortization of debt discount and related charges |
|
46 |
|
68 |
|
190 |
| |||
Cash paid for income taxes |
|
(64 |
) |
(71 |
) |
(71 |
) | |||
Changes in assets and liabilities, net of effects of acquisitions, and other |
|
173 |
|
202 |
|
157 |
| |||
Net cash provided by operating activities excluding depreciation of revenue earning equipment |
|
498 |
|
1,141 |
|
1,144 |
| |||
U.S. car rental fleet growth (a) |
|
260 |
|
(500 |
) |
(511 |
) | |||
International car rental fleet growth (a) |
|
(61 |
) |
243 |
|
247 |
| |||
Equipment rental fleet growth (a) |
|
(103 |
) |
(235 |
) |
(234 |
) | |||
All other operations rental fleet growth (a) |
|
8 |
|
43 |
|
43 |
| |||
Property and equipment expenditures, net of disposals |
|
(281 |
) |
(246 |
) |
(241 |
) | |||
Net investment activity |
|
(177 |
) |
(695 |
) |
(696 |
) | |||
Free cash flow |
|
$ |
321 |
|
$ |
446 |
|
$ |
449 |
|
(a) Historically, fleet growth has not been reported on a segment basis.
Supplemental Schedule IV
HERTZ GLOBAL HOLDINGS, INC.
FLEET GROWTH
Unaudited
|
|
Twelve Months Ended December 31, 2014 |
|
Twelve Months Ended December 31, 2013 |
|
Twelve Months Ended December 31, 2013 |
| |||||||||||||||||||||||||||
(In millions) |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide Equipment Rental |
|
All Other Operations |
|
Consolidated HGH |
|
U.S. Car Rental |
|
Intl Car Rental |
|
Worldwide Equipment Rental |
|
All Other Operations |
|
Consolidated HGH |
|
Consolidated HGH |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Revenue earning equipment expenditures |
|
$ |
(5,965 |
) |
$ |
(3,103 |
) |
$ |
(615 |
) |
$ |
(1,606 |
) |
$ |
(11,289 |
) |
$ |
(6,015 |
) |
$ |
(2,593 |
) |
$ |
(672 |
) |
$ |
(1,009 |
) |
$ |
(10,289 |
) |
$ |
(10,298 |
) |
Proceeds from disposal of revenue earning equipment |
|
4,507 |
|
2,510 |
|
182 |
|
1,010 |
|
8,209 |
|
4,320 |
|
2,242 |
|
138 |
|
556 |
|
7,256 |
|
7,264 |
| |||||||||||
Net revenue earning equipment capital expenditures |
|
(1,458 |
) |
(593 |
) |
(433 |
) |
(596 |
) |
(3,080 |
) |
(1,695 |
) |
(351 |
) |
(534 |
) |
(453 |
) |
(3,033 |
) |
(3,034 |
) | |||||||||||
Depreciation of revenue earning equipment |
|
1,758 |
|
412 |
|
330 |
|
455 |
|
2,955 |
|
1,279 |
|
447 |
|
299 |
|
425 |
|
2,450 |
|
2,445 |
| |||||||||||
Financing activity related to car rental fleet: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Borrowings |
|
2,702 |
|
1,181 |
|
|
|
511 |
|
4,394 |
|
5,600 |
|
2,019 |
|
|
|
1,531 |
|
9,150 |
|
NR |
| |||||||||||
Payments |
|
(3,012 |
) |
(1,051 |
) |
|
|
(350 |
) |
(4,413 |
) |
(5,432 |
) |
(1,884 |
) |
|
|
(1,444 |
) |
(8,760 |
) |
NR |
| |||||||||||
Restricted cash changes |
|
270 |
|
(10 |
) |
|
|
(12 |
) |
248 |
|
(252 |
) |
12 |
|
|
|
(16 |
) |
(256 |
) |
NR |
| |||||||||||
Net financing activity related to car rental fleet |
|
(40 |
) |
120 |
|
|
|
149 |
|
229 |
|
(84 |
) |
147 |
|
|
|
71 |
|
134 |
|
134 |
| |||||||||||
Fleet growth |
|
$ |
260 |
|
$ |
(61 |
) |
$ |
(103 |
) |
$ |
8 |
|
$ |
104 |
|
$ |
(500 |
) |
$ |
243 |
|
$ |
(235 |
) |
$ |
43 |
|
$ |
(449 |
) |
$ |
(455 |
) |
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS
Unaudited
NET CORPORATE DEBT, NET FLEET DEBT AND TOTAL NET DEBT
|
|
|
|
|
|
|
|
As of December 31, 2013 |
|
As of December 31, 2013 |
| |||||||||||||||||
|
|
As of December 31, 2014 |
|
As Restated |
|
As Reported |
| |||||||||||||||||||||
(In millions) |
|
Fleet |
|
Corporate |
|
Total |
|
Fleet |
|
Corporate |
|
Total |
|
Fleet |
|
Corporate |
|
Total |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Debt |
|
$ |
9,562 |
|
$ |
6,431 |
|
$ |
15,993 |
|
$ |
9,806 |
|
$ |
6,503 |
|
$ |
16,309 |
|
$ |
9,806 |
|
$ |
6,503 |
|
$ |
16,309 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Cash and cash equivalents |
|
|
|
490 |
|
490 |
|
|
|
411 |
|
411 |
|
|
|
423 |
|
423 |
| |||||||||
Restricted cash |
|
515 |
|
56 |
|
571 |
|
772 |
|
89 |
|
861 |
|
772 |
|
88 |
|
860 |
| |||||||||
Net debt |
|
$ |
9,047 |
|
$ |
5,885 |
|
$ |
14,932 |
|
$ |
9,034 |
|
$ |
6,003 |
|
$ |
15,037 |
|
$ |
9,034 |
|
$ |
5,992 |
|
$ |
15,026 |
|
WORLDWIDE EQUIPMENT RENTAL AND RENTAL RELATED REVENUE
|
|
Twelve Months |
|
Twelve Months Ended December 31, |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
(In millions) |
|
2014 |
|
2013 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Equipment rental segment revenues |
|
$ |
1,571 |
|
$ |
1,539 |
|
$ |
1,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment sales and other revenue |
|
(115 |
) |
(132 |
) |
(132 |
) |
|
|
|
|
|
|
|
|
|
|
|
| |||
Rental and rental related revenue at actual rates |
|
1,456 |
|
1,407 |
|
1,406 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Foreign currency adjustment (a) |
|
12 |
|
(7 |
) |
9 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Rental and rental related revenue |
|
$ |
1,468 |
|
$ |
1,400 |
|
$ |
1,415 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
U.S. Car Rental Segment
|
|
Twelve Months |
|
Twelve Months Ended December 31, |
| |||||
(In millions, except as noted) |
|
2014 |
|
2013 |
|
2013 |
| |||
Revenues |
|
$ |
6,471 |
|
$ |
6,331 |
|
$ |
6,324 |
|
Advantage sublease revenue |
|
|
|
(65 |
) |
(65 |
) | |||
Ancillary retail car sales revenue |
|
(32 |
) |
(14 |
) |
|
| |||
Total rental revenue |
|
$ |
6,439 |
|
$ |
6,252 |
|
$ |
6,259 |
|
Transaction days (in thousands) |
|
139,752 |
|
133,181 |
|
133,181 |
| |||
Total RPD (in whole dollars) |
|
$ |
46.07 |
|
$ |
46.94 |
|
$ |
47.00 |
|
|
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
139,752 |
|
133,181 |
|
|
| |||
Average Fleet |
|
499,100 |
|
490,000 |
|
|
| |||
Advantage sublease vehicles |
|
(4,000 |
) |
(21,000 |
) |
|
| |||
Hertz 24/7 vehicles |
|
(1,000 |
) |
(2,000 |
) |
|
| |||
Average Fleet used to calculate fleet efficiency |
|
494,100 |
|
467,000 |
|
|
| |||
Number of days in period |
|
365 |
|
365 |
|
|
| |||
Average fleet multiplied by number of days in period (in thousands) |
|
|
180,347 |
|
|
170,455 |
|
|
| |
Fleet efficiency |
|
77 |
% |
78 |
% |
|
| |||
|
|
|
|
|
|
|
| |||
Depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
1,758 |
|
$ |
1,281 |
|
|
| |
Average fleet |
|
499,100 |
|
490,000 |
|
|
| |||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet |
|
$ |
3,522 |
|
$ |
2,614 |
|
|
| |
Number of months in period |
|
12 |
|
12 |
|
|
| |||
Net depreciation per unit per month |
|
$ |
294 |
|
$ |
218 |
|
|
|
International Car Rental
|
|
Twelve Months Ended |
|
Twelve Months Ended December 31, |
| |||||
(in millions, except as noted) |
|
2014 |
|
2013 |
|
2013 |
| |||
Revenues |
|
$ |
2,436 |
|
$ |
2,378 |
|
$ |
2,383 |
|
Foreign currency adjustment (a) |
|
44 |
|
22 |
|
40 |
| |||
Total rental revenue |
|
$ |
2,480 |
|
$ |
2,400 |
|
$ |
2,423 |
|
Transaction days (in thousands) |
|
46,917 |
|
45,019 |
|
45,019 |
| |||
Total RPD (in whole dollars) |
|
$ |
52.86 |
|
$ |
53.31 |
|
$ |
53.81 |
|
|
|
|
|
|
|
|
| |||
Transaction days (in thousands) |
|
46,917 |
|
45,019 |
|
|
| |||
Average Fleet |
|
166,900 |
|
161,300 |
|
|
| |||
Number of days in period |
|
365 |
|
365 |
|
|
| |||
Average fleet multiplied by number of days in period |
|
60,919 |
|
58,875 |
|
|
| |||
Fleet efficiency |
|
77 |
% |
76 |
% |
|
| |||
|
|
|
|
|
|
|
| |||
Depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
492 |
|
$ |
528 |
|
|
| |
Foreign currency adjustment (in millions) (a) |
|
9 |
|
4 |
|
|
| |||
Adjusted depreciation of revenue earning equipment and lease charges, net (in millions) |
|
$ |
501 |
|
$ |
532 |
|
|
| |
Average fleet |
|
166,900 |
|
161,300 |
|
|
| |||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet |
|
$ |
3,002 |
|
$ |
3,298 |
|
|
| |
Number of months in period |
|
12 |
|
12 |
|
|
| |||
Net depreciation per unit per month |
|
$ |
250 |
|
$ |
275 |
|
|
|
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
NON-GAAP MEASURES - DEFINITIONS AND USE
Hertz Holdings is our top-level holding company. The Hertz Corporation (Hertz) is our primary operating company. The term GAAP refers to accounting principles generally accepted in the United States of America.
Definitions of non-GAAP measures are set forth below. Also set forth below is a summary of the reasons why management of Hertz Holdings and Hertz believes that the presentation of the non-GAAP financial measures included in the Press Release provide useful information regarding Hertz Holdings and Hertzs financial condition and results of operations and additional purposes, if any, for which management of Hertz Holdings and Hertz utilize the non-GAAP measures.
Adjusted Pre-Tax Income
Adjusted pre-tax income is calculated as income before income taxes plus certain 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 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 the operational performance of the Company on the same basis that management uses internally.
Average Fleet
Average Fleet is determined using a simple average of the number of vehicles at the beginning and end of a given period.
Corporate Restricted Cash (used in the calculation of Net Corporate Debt)
Total restricted cash includes cash and cash equivalents that are not readily available for our normal disbursements. Total restricted cash and equivalents are restricted for the purchase of revenue earning vehicles and other specified uses under our Fleet Debt facilities, our like-kind exchange programs and to satisfy certain of our self-insurance regulatory reserve requirements. Corporate restricted cash is calculated as total restricted cash less restricted cash associated with fleet debt.
Dollar Utilization
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 at the refurbishment date).
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Corporate EBITDA
EBITDA is defined as net income before net interest expense, income taxes and depreciation (which includes revenue earning equipment lease charges) and amortization. Corporate EBITDA, as presented herein, represents EBITDA as adjusted for car rental fleet interest, car rental fleet depreciation and certain other items, as described in more detail in the accompanying tables. Each of the measured presented herein reflects the financial results of Hertz Holdings.
Management uses EBITDA and Corporate EBITDA as operating performance and liquidity metrics for internal monitoring and planning purposes, including the preparation of our annual operating budget and monthly operating reviews, as well as to facilitate analysis of investment decisions, profitability and performance trends. Further, EBITDA enables management and investors to isolate the effects on profitability of operating metrics such as revenue, operating expenses and selling, general and administrative expenses, which enables management and investors to evaluate our business segments that are financed differently and have different depreciation characteristics and compare our performance against companies with different capital structures and depreciation policies. We also present Corporate EBITDA as a supplemental measure because such information is utilized in the calculation of financial covenants under Hertzs senior credit facilities and in the determination of certain executive compensation.
EBITDA and Corporate EBITDA are not recognized measurements under GAAP. When evaluating our operating performance or liquidity, investors should not consider EBITDA and Corporate EBITDA in isolation of, or as a substitute for, measures of our financial performance and liquidity as determined in accordance with GAAP, such as net income, operating income or net cash provided by operating activities.
Equipment Rental and Rental Related Revenue
Equipment rental and rental related revenue 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. 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 to investors as it reflects time and mileage and ancillary charges for equipment on rent and is comparable with the reporting of other industry participants.
Fleet Efficiency
Fleet efficiency is calculated by dividing total transaction days by the average fleet multiplied by the number of days in a period. Average fleet used to calculate fleet efficiency in our U.S. Car Rental segment excludes Advantage sublease and Hertz 24/7 vehicles as these vehicles do not have associated transaction days.
Free Cash Flow
Free cash flow is calculated as net cash provided by operating activities, excluding depreciation of revenue earning equipment, net of car rental and equipment rental fleet growth and property and equipment net expenditures. Free cash flow is important to management and investors as it represents the cash available for acquisitions and the reduction of corporate debt.
Net Corporate Debt
Net corporate debt is calculated as total debt excluding fleet debt less cash and equivalents and corporate restricted cash. Corporate debt consists of our Senior Term Facility; Senior ABL Facility; Senior Notes; Promissory Notes; Convertible Senior Notes; and certain other indebtedness of our domestic and foreign subsidiaries.
Net Corporate Debt is important to management and investors as it helps measure our leverage. Net Corporate Debt also assists in the evaluation of our ability to service our non-fleet-related debt without reference to the expense associated with the fleet debt, which is collateralized by assets not available to lenders under the non-fleet debt facilities.
Net Depreciation Per Unit Per Month
Net depreciation per unit per month 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. Average fleet used to calculate net depreciation per unit per month in our U.S. Car Rental segment includes Advantage sublease and Hertz 24/7 vehicles as these vehicles have associated lease charges.
Restricted Cash Associated with Fleet Debt (used in the calculation of Net Fleet Debt and Corporate Restricted Cash)
Restricted cash associated with fleet debt is restricted for the purchase of revenue earning, vehicles and other specified uses under our Fleet Debt facilities and our car rental like-kind exchange program.
Same Store Revenue Growth/Decline
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.
Time Utilization
Time utilization means the percentage of time an equipment unit is on-rent during a given period.
Total Net Debt
Total net debt is calculated as total debt less total cash and cash equivalents and total restricted cash. This measure is important to management, investors and ratings agencies as it helps measure our gross leverage.
Total RPD
Total RPD is calculated as total revenue less revenue from fleet subleases and ancillary revenue associated with retail car sales, 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 appropriate so as not to affect the comparability of underlying trends. This statistic is important to our management and investors as it represents the best 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.
Transaction Days
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.
Exhibit 99.3
Hertz Financial Restatement Conference Call July 17th, 2015 8:00 am ET Dial in: (800) 230-1074 U.S. (612) 234-9960 International Passcode: 364881 Replay available until August 17, 2015: (800) 475-6701 U.S. (320) 365-3844 International Passcode: 364881 |
Safe Harbor Statement Certain statements made within this presentation contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance and by their nature are subject to inherent uncertainties. Actual results may differ materially. Any forward-looking information relayed in this presentation speaks only as of July 17, 2015, and the Company undertakes no obligation to update that information to reflect changed circumstances. Additional information concerning these statements is contained in the Risk Factors and Forward-Looking Statements sections of the Companys 2014 Form 10-K. Copies of these filings are available from the SEC, or the Hertz web site. |
Todays Agenda John Tague President & Chief Executive Officer Tom Kennedy Sr. EVP & Chief Financial Officer Business Overview and Outlook John Tague Restatement Overview and Business Update Tom Kennedy Questions & Answers Session John Tague Tom Kennedy |
Fixing the Foundation; Completing Work in Progress Restatement Complete; Remediation Underway Restatement Reaffirmed Commitment to $1B Share Buyback Program HERC Separation 2Q:16E; Leverage Targets Confirmed Shareholder Initiatives New HERC Leadership in Place to Enhance Performance Fleet Refresh Meets Internal Mileage Goals Fleet Capacity Growth Aligned with Demand Annualized Cost Savings Initiative Raised to $300M New Expertise Complements Experienced Hertz Team Customer Satisfaction Scores at 2-Year High Operational Excellence U.S. RAC Revenue Stabilized and Positioned for Improvement Launched Hertz, Dollar, Thrifty Systems Integration; To Be Completed YE:2015 |
Fixing the Foundation; Delivering on Promises Driving Best-in-Class Performance Pursuing Go-to-Market Improvements Complete financial restatement Refresh, resize U.S. RAC fleet Integrate DTG systems Add best-in-class talent Rationalize off airport Stabilize operating systems Lowest Cost efficiency through process and technology Highest quality enhance, differentiate customer experience and brands Focus on Core assess portfolio of businesses New ancillary services, features Pricing segmentation based on customer choice and purchasing characteristics Opportunities for Creating Value Leveraging the Base Established brands Flexible financial structure Strong customer network |
Financial Restatement Complete Impact of restatement on 2011-2013 GAAP earnings Hertz will continue to reinforce an environment of strong, disciplined financial controls and oversight Vehicle damage receivables and related allowances Capitalization and timing of depreciation for non-fleet assets Brazil operations, including allowances for doubtful accounts receivable Accounts payable and accrued liabilities Primary restatement misstatements: 1Includes $28M in GAAP pre-tax misstatements previously disclosed in the Companys 2013 10-K/A financial statements Restatement Impact GAAP Pre-tax GAAP Net Income 2011 $73 $31 2012 $90 $62 2013 $72 $51 TOTAL $235M1 $144M |
New Accounting Team With Deep Functional Expertise Robin Kramer New SVP & Chief Accounting Officer Allen Cooper New SVP & Chief Audit Executive Randy Walford New VP of SOX/ Compliance Vince Ciccolini New SVP & Corporate Controller Greg Jorgensen New VP of Reporting, Research & Policy Chris Brown New VP of Financial Systems Driving sustainability of financial controls through strong leadership |
Remain Committed to Share Buyback Plan Share repurchase program reflects confidence in Hertzs value proposition Pre-HERC Separation Post-HERC Separation Rental car expects to use free cash flow to purchase additional shares within targeted leverage range Cash received by RAC in connection with separation split between debt pay down and share repurchases to achieve 2.5x-3.5x YE net leverage target Repurchase shares on opportunistic basis Reduce net corporate leverage YoY (15 vs 14) Finance repurchases with free cash flow from improving operations and strategic asset sales, where appropriate HERC Separation |
Re-focusing on HERC Spin Off Initiatives HERC Overview Car Rental Overview Timing Unlocking shareholder value by creating two, strong standalone companies Post HERC separation, target year-end net corporate leverage ratio of 2.5x-3.5x Standalone business allows for increased reporting transparency, more stable cash generation and greater capacity to return cash to shareholder Tax-efficient separation of New Equipment Rental Business (HERC) Hertz and New HERC become separately publicly traded companies Target net leverage ratio of 3.5x-4.0x at separation Audit carve-out financials; File Form 10 SEC review of Form 10 Target spin completion by Q2:16 Subject to customary closing conditions |
Annualized Cost Savings Target Raised to $300M Expects to Realize ~$200 million in 2015 Potential for additional savings from technology-enabled efficiencies as well as other strategic opportunities Estimated one-time costs in 2015 associated with these actions is $30-$35M (includes ~$25M of restructuring) Corporate/ Operations Overhead Freezing defined benefit pension plan, Navigation Solutions redundancies, closing unprofitable off-airport facilities, consolidating third-party IT spend, eliminating non-value added IT projects Fleet Management Reducing out-of-service cycle times through process efficiencies and increased accountability Sales and Marketing Disciplined return on investment practices, including reorganizing rental car sales force Examples of cost savings initiatives: |
U.S. RAC Fleet Capacity Growth Further Reduced; Target for Average Mileage Per Unit Achieved Reduced 2015 U.S. fleet plan by 100 bps since Mays reduction Achieved U.S. fleet refresh target for 2015 FY:15E fleet to grow 0.5%-1.5% Down from earlier plan of +1.5%-2.5% Reflects disciplined growth and utilization improvement 2H:15E fleet down 0.5%-1.5% vs 2H:14 Todays average fleet age 4 mos. lower than when refresh launched in Sept-2014 NPS related to vehicle condition at 2-yr high, +30% since fleet refreshment program began Improvements reflect record fleet rotation car sales and vehicle acquisitions Significant work done managing fleet, simultaneously controlling costs and driving customer satisfaction 0 20 25 Oct 14 Mar 15 Risk deletions, thousands Plan Actual SALES CHANNELS % of Hertz total vehicle sold in 1Q15 Retail & Rent2Buy Dealer Direct Auction ~$300 per unit Net Benefit ~$1,000 per unit Net Benefit 33% 44% 23% |
New Leaders With Proven Expertise New appointments in areas critical to Hertzs success: Revenue Management Information Technology Fleet and Procurement Sales Customer Experience Human Resources Dave Myrick SVP, Americas Sales Eliana Zem EVP and Chief Human Resource Officer Jeff Foland Sr EVP and Chief Revenue Officer Tom Sabatino Sr EVP, CAO and General Counsel Tyler Best EVP and CIO Scot Hornick EVP, Revenue Management Larry Silber President and CEO, HERC Tom Frese SVP, Fleet and Procurement Bruce Dressel COO, HERC Richard Marani CIO, HERC Adding new talent to complement existing experience |
2015 A Transition Year Full Year 2015 Forecast Consolidated Corporate EBITDA $1,450M - $1,550M HERC Corporate EBITDA $575M - $625M U.S. RAC Monthly Depreciation per unit $295 - $305 U.S. RAC fleet capacity growth1 0.5% - 1.5% Net non-fleet capex $275M - $295M 1Excludes Advantage sublease and Hertz 24/7 vehicles Assumes continued pressure on HERC due to weak oil and gas markets; continued improvements in U.S. and International RAC businesses |
Key Takeaways 1 2 3 4 5 6 Financial filings up to date and sustainable Business portfolio under review; HERC separation expected Q2:16 New leadership in place Significant value creation within our control Annualized cost savings target raised to $300M; upside opportunity Reinvesting in our brands Committed to returning value to shareholders |
Committed to an Ongoing Dialogue with Investors August 2015 Q2:15 Earnings Results November 2015 Investor Day Update on pace of progress Assessment of Companys full potential |
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