ESTERO, Fla., Aug. 8, 2016 /PRNewswire/ -- Hertz Global
Holdings, Inc. (NYSE: HTZ) ("Hertz Global" or the "Company") today
reported a second quarter 2016 net loss from continuing operations
of $28 million, or $0.33 per share, compared with net income from
continuing operations of $13 million,
or $0.14 per share, during the same
period last year. On an adjusted basis, the Company reported net
income for the second quarter of 2016 of $35
million, or $0.41 per share,
compared with net income of $74
million, or $0.80 per share,
in the second quarter of 2015.
Total revenues for the second quarter 2016 were $2.3 billion, a 2% decline versus the second
quarter of 2015. Loss from continuing operations before income
taxes for second quarter 2016 was $35
million versus income from continuing operations before
income taxes of $38 million during
the same period last year.
Adjusted corporate earnings before interest, taxes, depreciation
and amortization (EBITDA) for the second quarter 2016 were
$184 million versus $246 million in the same period last year, a
decline of $62 million. The Company
noted that it recorded $20 million of
unanticipated net charges in International Rental Car (RAC) in the
second quarter 2016, largely resulting from additional
insurance-related expenses due to adverse experience in historical
cases in the United Kingdom. These
unexpected charges had an unfavorable impact to the Company's
overall results for the quarter, including adjusted corporate
EBITDA, and negatively impacted adjusted earnings per share (EPS)
by approximately $0.15.
"Significant work was accomplished this quarter as part of our
three-to-five year margin improvement plan," said John Tague, Hertz Global Holdings President and
Chief Executive Officer. "While still in the first year of the
plan, we completed a number of strategic actions, improved our
balance sheet, and made progress on technology development, all
while reducing our cost base and achieving substantial improvements
in customer satisfaction. These accomplishments are the result of
the dedication and commitment of our employees all across our
operation.
"In the U.S., pricing improved significantly throughout the
quarter, and we see positive pricing momentum continuing into
the third quarter."
OPERATIONAL AND BUSINESS HIGHLIGHTS
The company continues to make progress in the first year of the
margin improvement plan it announced in November 2015. Second
quarter 2016 operational and business highlights include:
- Year-over-year worldwide customer satisfaction improved for the
Hertz, Dollar and Thrifty brands by more than 4 points for the
second quarter 2016 and nearly 5 points for the first half 2016,
continuing a trend from 2015. Customer satisfaction for the Hertz
brand reached a record-level score on a worldwide basis for both
the second quarter and year-to-date.
- The Company achieved cost savings of approximately $100 million during the second quarter 2016 and
is on pace to achieve its previously announced target of
$350 million of full year 2016 cost
savings. In addition to vehicle-related initiatives, consolidated
unit costs for the company, defined as consolidated direct vehicle
and operating and selling, general and administrative expenses per
transaction day, declined $2.23, or
7%, versus the second quarter 2015.
- Total average vehicles for the quarter, including Donlen leased
vehicles, totaled 845,500, a 1% decline versus the second quarter
2015.
- U.S. RAC vehicle utilization rose 700 basis points to 82%,
driven primarily by a 6% increase in transaction days coupled with
a 2% decline in average vehicles due to disciplined capacity and
vehicle management.
- U.S. RAC unit revenues, which is defined as total revenue per
available car day, improved by 10 basis points year-over-year,
driven primarily by the 700 basis point improvement in vehicle
utilization compared to the same period last year.
- The Company achieved a net non-vehicle debt to adjusted
corporate EBITDA leverage ratio of 4.5 times at June 30, 2016. The Company noted that it remains
on track to achieve its previously disclosed 2016 year-end leverage
target of at or below 3.5 times.
- The Company successfully completed the separation of its
equipment rental business resulting in the receipt of approximately
$2.0 billion of cash payments that
were used to pay down a $2.1 billion
term loan that was scheduled to mature in 2018.
- The Company further strengthened its capital structure by
successfully completing approximately $4.4
billion in financings during the quarter. There are no
significant maturities of non-vehicle debt until 2019.
- Non-vehicle cash interest expense is expected to decline by
approximately $90 million on an
annual basis, of which $45 million
will be realized in the second half of 2016, related to the spin
and refinancing activity.
- The Company substantially transitioned its Firefly operations
in the U.S. to its Thrifty brand as part of a U.S. market focus on
its Hertz, Dollar and Thrifty brands.
- During the second quarter, the Company made a strategic
investment in Luxe, an app-based valet parking company.
- At the end of the second quarter, the Company reached and
launched one-year vehicle rental supply agreements with
ride-sharing companies Uber and Lyft.
U.S. RENTAL CAR
("U.S. RAC") SUMMARY
|
|
U.S.
RAC(1)
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2016
|
|
2015
|
|
|
Total
Revenues
|
$
|
1,584
|
|
|
$
|
1,615
|
|
|
(2)
|
%
|
|
Depreciation of
revenue earning vehicles and lease charges, net
|
$
|
417
|
|
|
$
|
380
|
|
|
10
|
%
|
|
Income (loss) from
continuing operations before income taxes
|
$
|
104
|
|
|
$
|
153
|
|
|
(32)
|
%
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income (loss)
|
$
|
143
|
|
|
$
|
195
|
|
|
(27)
|
%
|
|
Adjusted pre-tax
income margin
|
9
|
%
|
|
12
|
%
|
|
(304)
|
|
bps
|
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA
|
$
|
168
|
|
|
$
|
224
|
|
|
(25)
|
%
|
|
Adjusted Corporate
EBITDA margin
|
11
|
%
|
|
14
|
%
|
|
(326)
|
|
bps
|
|
|
|
|
|
|
|
Average
vehicles
|
500,000
|
|
|
511,700
|
|
|
(2)
|
%
|
|
Transaction days (in
thousands)
|
37,190
|
|
|
34,977
|
|
|
6
|
%
|
|
Total RPD (in whole
dollars)
|
$
|
42.11
|
|
|
$
|
45.80
|
|
|
(8)
|
%
|
|
Revenue per available
car day (in whole dollars)
|
$
|
34.42
|
|
|
$
|
34.40
|
|
|
—
|
%
|
|
Net depreciation per
unit per month (in whole dollars)
|
$
|
278
|
|
|
$
|
248
|
|
|
12
|
%
|
|
Total U.S. RAC revenues were $1.6 billion in second
quarter 2016, a decrease of 2%, versus the same period last
year. Transaction days increased by 6% while pricing, or Total
Revenue Per Transaction Day (Total RPD), decreased by 8%. The
Company noted that the impact of transaction days counting
methodology related to the integration of Dollar and Thrifty to the
Hertz counter system and non-rental related declines in areas such
as fuel-related ancillary revenue had an approximately 180 basis
point unfavorable impact on pricing year over year. The Company saw
meaningful sequential improvements in its pricing throughout the
second quarter, building from a low point established in the first
quarter 2016. Second quarter 2016 adjusted corporate EBITDA for
U.S. RAC was $168 million, or a
margin of 11%, which reflects a $56
million decline versus the same period last year.
INTERNATIONAL
RENTAL CAR ("INTERNATIONAL RAC") SUMMARY
|
|
International
RAC(1)
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in millions,
except where noted)
|
2016
|
|
2015
|
|
|
Total
Revenues
|
$
|
540
|
|
|
$
|
556
|
|
|
(3)
|
%
|
|
Depreciation of
revenue earning vehicles and lease charges, net
|
$
|
98
|
|
|
$
|
101
|
|
|
(3)
|
%
|
|
Income (loss) from
continuing operations before income taxes
|
$
|
29
|
|
|
$
|
36
|
|
|
(19)
|
%
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income (loss)
|
$
|
34
|
|
|
$
|
45
|
|
|
(24)
|
%
|
|
Adjusted pre-tax
income margin
|
6
|
%
|
|
8
|
%
|
|
(179)
|
|
bps
|
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA
|
$
|
42
|
|
|
$
|
54
|
|
|
(22)
|
%
|
|
Adjusted Corporate
EBITDA margin
|
8
|
%
|
|
10
|
%
|
|
(193)
|
|
bps
|
|
|
|
|
|
|
|
Average
vehicles
|
178,600
|
|
|
173,700
|
|
|
3
|
%
|
|
Transaction days (in
thousands)
|
12,511
|
|
|
12,523
|
|
|
—
|
%
|
|
Total RPD (in whole
dollars)
|
$
|
42.04
|
|
|
$
|
42.72
|
|
|
(2)
|
%
|
|
Revenue per available
car day (in whole dollars)
|
$
|
32.36
|
|
|
$
|
33.85
|
|
|
(4)
|
%
|
|
Net depreciation per
unit per month (in whole dollars)
|
$
|
179
|
|
|
$
|
186
|
|
|
(4)
|
%
|
|
The Company's International RAC segment continues to perform
well despite lower demand than anticipated during the quarter due
to security concerns based on the recent attacks in France, the Company's largest European market.
Total International RAC revenues were $540
million in second quarter 2016, a decrease of 3% from second
quarter 2015. Excluding a $6 million
unfavorable foreign currency impact, revenues decreased 2% driven
by a 2% decrease in Total RPD, on a constant currency basis, and
flat transaction days.
Second quarter 2016 adjusted corporate EBITDA of $42 million was a $12
million decrease versus the same period last year. The
Company noted that second quarter 2016 results include $20 million in unanticipated charges which were
largely driven by an unfavorable adjustment to the segment's
insurance reserves due to adverse developments on historical cases.
Excluding these charges, the Company's International RAC segment
would have experienced year over year adjusted corporate EBITDA and
margin expansion in the second quarter 2016.
ALL OTHER
OPERATIONS
|
|
All Other
Operations(1)
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($ in
millions)
|
2016
|
|
2015
|
|
|
Total
Revenues
|
$
|
146
|
|
|
$
|
146
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income (loss)
|
$
|
17
|
|
|
$
|
17
|
|
|
—
|
%
|
|
Adjusted pre-tax
income margin
|
12
|
%
|
|
12
|
%
|
|
—
|
|
bps
|
|
|
|
|
|
|
|
Adjusted Corporate
EBITDA
|
$
|
16
|
|
|
$
|
15
|
|
|
7
|
%
|
|
Adjusted Corporate
EBITDA margin
|
11
|
%
|
|
10
|
%
|
|
69
|
|
bps
|
|
|
|
|
|
|
|
Average vehicles -
Donlen
|
166,900
|
|
|
165,600
|
|
|
1
|
%
|
|
All Other Operations, which is primarily comprised of the
Company's Donlen leasing operations, reported flat year-over-year
total revenues for second quarter 2016 despite continued weakness
in oil and gas sector accounts. Adjusted corporate EBITDA for the
All Other Operations segment was $16
million in second quarter 2016, a 7% increase over the
prior-year period and the segment recorded a 69 basis point margin
increase year-over-year to 11%.
SUCCESSFUL SEPARATION OF EQUIPMENT RENTAL BUSINESS
On June 30, 2016, the Company
successfully completed the separation of its equipment rental
business resulting in $2.0 billion of
cash payments to the Company which were used to pay down a portion
of the Company's non-vehicle related debt.
Following the separation, the Company's outstanding share count
is approximately 85 million. The Company trades on the New York
Stock Exchange under the symbol "HTZ". The equipment rental
business operates under the name Herc Holdings Inc. and trades on
the New York Stock Exchange under the symbol "HRI".
The separation was structured as a reverse spin-off under which
the vehicle rental business was contributed to the Company, the
stock of which was then distributed as a dividend to stockholders
of former Hertz Global Holdings, Inc. (for periods on or prior to
June 30, 2016, "Old Hertz Holdings").
While the Company was the legal spinnee in the separation, the
Company is the accounting successor to the pre-spin-off business.
As a result, the equipment rental business and certain former
parent entities of Old Hertz Holdings are presented as discontinued
operations in this earnings release.
Unless noted otherwise, information presented in
this earnings release pertains to Hertz Global's continuing
operations.
HERTZ GLOBAL ESTABLISHES POST-SPIN GUIDANCE
With the separation of the equipment rental business complete,
the Company has established the following full year 2016 guidance
for the "new" Hertz Global:
|
Full Year 2016
Forecast
|
Adjusted Corporate
EBITDA(2)
|
$850M
|
to
|
$950M
|
Non-vehicle capital
expenditures, net
|
$125M
|
to
|
$150M
|
Non-vehicle cash
interest expense
|
$280M
|
to
|
$290M
|
Cash income
taxes
|
$100M
|
to
|
$125M
|
Free cash
flow(2)
|
$500M
|
to
|
$600M
|
U.S. RAC net
depreciation per unit per month(2)
|
$290
|
to
|
$300
|
U.S. RAC fleet
capacity growth
|
(2.0)%
|
to
|
(3.0)%
|
U.S.RAC revenue
growth
|
—%
|
to
|
(1.5)%
|
Adjusted earnings per
share**(2)
|
$2.75
|
to
|
$3.50
|
*Based on a
weighted average of 85 million shares outstanding and a 37%
effective tax rate
|
|
|
|
(1) Adjusted pre-tax income, adjusted pre-tax margin, adjusted
corporate EBITDA, adjusted corporate EBITDA margin, adjusted net
income, adjusted net income margin, adjusted earnings per share,
total revenue per transaction day, revenue per available car day
and net depreciation per unit per month are non-GAAP
measures. See the accompanying Supplemental Schedules and
Definitions for the reconciliations and definitions for each of
these non-GAAP measures and the reason the Company's management
believes that these measures provide useful information to
investors.
(2) Because of the forward-looking nature of the Company's
forecasts of Adjusted Corporate EBITDA, free cash flow, net
depreciation per unit per month and adjusted earnings (loss) per
share, specific quantifications of the amounts that would be
required to reconcile a pre-tax income, operating cash flow and
depreciation forecast are not available. The Company believes
that there is a degree of volatility with respect to certain of the
Company's GAAP measures, primarily related to fair value accounting
for its financial assets (which includes the Company's derivative
financial instruments), its depreciation of revenue earning
vehicles, its income tax reporting, its operating cash flows and
certain adjustments made to arrive at the relevant non-GAAP
measures, which preclude the Company from providing accurate
forecast of 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
Adjusted Corporate EBITDA, free cash flow, net depreciation per
unit per month and adjusted earnings (loss) per share would imply a
degree of precision that would be confusing or misleading to
investors for the reasons identified above.
RESULTS OF THE HERTZ CORPORATION
The GAAP and Non-GAAP profitability metrics for Hertz Global's
operating subsidiary, The Hertz Corporation, are materially the
same as those for Hertz Global.
EARNINGS WEBCAST INFORMATION
Hertz Global's second quarter 2016 live webcast discussion will
be held on August 9, 2016, at
8:30 a.m. Eastern. The earnings
release and related supplemental schedules containing the
reconciliations of non-GAAP measures will be available on our
website, IR.Hertz.com.
SELECTED FINANCIAL AND OPERATING DATA, SUPPLEMENTAL SCHEDULES
AND DEFINITIONS
Following are tables that present selected financial and
operating data of Hertz Global. Also included are Supplemental
Schedules which are provided to present segment results and
reconciliations of non-GAAP measures to their most comparable GAAP
measure. Following the Supplemental Schedules, the Company provides
definitions for terminology used throughout this press release. As
described above, the financial information of the equipment rental
business and certain parent legal entities that were not spun-off
by Old Hertz Holdings are considered discontinued operations.
Unless noted otherwise, information presented in the following
tables and supplemental schedules pertain to Hertz Global's
continuing operations.
ABOUT HERTZ GLOBAL
Hertz Global operates the Hertz, Dollar and Thrifty vehicle
rental brands in approximately 10,000 corporate and franchisee
locations throughout North
America, Europe,
Latin America, Africa, the Middle
East, Asia, Australia, and New
Zealand. Hertz Global is one of the largest worldwide
airport general use vehicle rental companies, and the Hertz brand
is one of the most recognized in the world. Product and service
initiatives such as Hertz Gold Plus Rewards,
Carfirmations, Mobile Wi-Fi and unique vehicles offered
through the Adrenaline, Dream, Green and Prestige Collections set
Hertz Global apart from the competition. Additionally, Hertz
Global owns the vehicle leasing and fleet management leader Donlen
Corporation, operates the Hertz 24/7 hourly vehicle rental business
in international markets and sells vehicles through its Rent2Buy
program. For more information about Hertz Global, visit:
www.hertz.com.
CAUTIONARY NOTE CONCERNING FORWARD LOOKING STATEMENTS
Certain statements contained in this release, and in related
comments by the Company's management, include "forward-looking
statements." Forward-looking statements include information
concerning the Company's liquidity and its possible or assumed
future results of operations, including descriptions of its
business strategies. These statements often include words such as
"believe," "expect," "project," "potential," "anticipate,"
"intend," "plan," "estimate," "seek," "will," "may," "would,"
"should," "could," "forecasts" or similar expressions. These
statements are based on certain assumptions that the Company has
made in light of its experience in the industry as well as its
perceptions of historical trends, current conditions, expected
future developments and other factors it believes are appropriate
in these circumstances. The Company believes these judgments are
reasonable, but you should understand that these statements are not
guarantees of performance or results, and the Company's actual
results could differ materially from those expressed in the
forward-looking statements due to a variety of important factors,
both positive and negative, that may be revised or supplemented in
subsequent reports on Forms 10-K, 10-Q and 8-K filed or furnished
to the Securities and Exchange Commission ("SEC"). Among other
items, such factors could include: any claims, investigations or
proceedings arising as a result of the restatement of our
previously issued financial results; our ability to remediate the
material weaknesses in our internal controls over financial
reporting; levels of travel demand, particularly with respect to
airline passenger traffic in the United
States and in global markets; the effect of our separation
of our vehicle and equipment rental businesses, any failure by Herc
Holdings Inc. to comply with the agreements entered into in
connection with the separation and our ability to obtain the
expected benefits of the separation; significant changes in the
competitive environment, including as a result of industry
consolidation, and the effect of competition in our markets on
rental volume and pricing, including on our pricing policies or use
of incentives; increased vehicle costs due to declines in the value
of our non-program vehicles; occurrences that disrupt rental
activity during our peak periods; our ability to purchase
adequate supplies of competitively priced vehicles and risks
relating to increases in the cost of the vehicles we purchase; our
ability to accurately estimate future levels of rental activity and
adjust the number and mix of vehicles used in our rental operations
accordingly; our ability to maintain sufficient liquidity and the
availability to us of additional or continued sources of financing
for our revenue earning vehicles and to refinance our existing
indebtedness; our ability to adequately respond to changes in
technology and customer demands; our ability to maintain access to
third-party distribution channels, including current or favorable
prices, commission structures and transaction volumes; an increase
in our vehicle costs or disruption to our rental activity,
particularly during our peak periods, due to safety recalls by the
manufacturers of our vehicles; a major disruption in our
communication or centralized information networks; financial
instability of the manufacturers of our vehicles; any impact on us
from the actions of our franchisees, dealers and independent
contractors; our ability to maintain profitability during adverse
economic cycles and unfavorable external events (including war,
terrorist acts, natural disasters and epidemic disease); shortages
of fuel and increases or volatility in fuel costs; our ability to
successfully integrate acquisitions and complete dispositions; our
ability to maintain favorable brand recognition; costs and risks
associated with litigation and investigations; risks related to our
indebtedness, including our substantial amount of debt, our ability
to incur substantially more debt, the fact that substantially all
of our consolidated assets secure certain of our outstanding
indebtedness and increases in interest rates or in our borrowing
margins; our ability to meet the financial and other covenants
contained in our Senior 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; risks associated with operating in many different
countries, including the risk of a violation or alleged violation
of applicable anticorruption or antibribery laws; the Company's
ability to successfully outsource a significant portion of its
information technology services or other activities; changes in the
existing, or the adoption of new laws, regulations, policies or
other activities of governments, agencies and similar organizations
where such actions may affect our operations, the cost thereof or
applicable tax rates; changes to our senior management team and the
dependence of our business operations on our senior management
team; the effect of tangible and intangible asset impairment
charges; our exposure to uninsured claims in excess of historical
levels; fluctuations in interest rates and commodity prices; our
exposure to fluctuations in foreign exchange rates and other risks
described from time to time in periodic and current reports that we
file with the SEC.
Additional information concerning these and other factors can be
found in our filings with the SEC, including Old Hertz Holdings'
and our recent Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K.
You should not place undue reliance on forward-looking
statements. All forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in
their entirety by the foregoing cautionary statements. All such
statements speak only as of the date made, and the Company
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise.
FINANCIAL INFORMATION AND OPERATING
DATA
On June 30, 2016, Old Hertz
Holdings completed the previously announced separation of its
existing vehicle rental and equipment rental businesses into two
independent, publicly traded companies. As a result, Herc
Holdings now operates the equipment rental business as a separate
independent public company, and is presented as discontinued
operations in Hertz Global's financial information.
Unless noted otherwise, information presented in the following
tables and supplemental schedules pertain to Hertz Global's
continuing operations.
SELECTED UNAUDITED
CONSOLIDATED INCOME STATEMENT DATA
|
|
|
Three Months
Ended
June 30,
|
|
As a
Percentage of
Total Revenues
|
|
Six Months
Ended
June 30,
|
|
As a
Percentage of
Total Revenues
|
(In millions, except
per share data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Total
revenues
|
$
|
2,270
|
|
|
$
|
2,317
|
|
|
100
|
%
|
|
100
|
%
|
|
$
|
4,253
|
|
|
$
|
4,415
|
|
|
100
|
%
|
|
100
|
%
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
1,267
|
|
|
1,290
|
|
|
56
|
%
|
|
56
|
%
|
|
2,425
|
|
|
2,492
|
|
|
57
|
%
|
|
56
|
%
|
Depreciation of
revenue earning vehicles and
lease charges, net
|
629
|
|
|
597
|
|
|
28
|
%
|
|
26
|
%
|
|
1,245
|
|
|
1,228
|
|
|
29
|
%
|
|
28
|
%
|
Selling, general and
administrative
|
234
|
|
|
251
|
|
|
10
|
%
|
|
11
|
%
|
|
459
|
|
|
471
|
|
|
11
|
%
|
|
11
|
%
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
72
|
|
|
62
|
|
|
3
|
%
|
|
3
|
%
|
|
140
|
|
|
123
|
|
|
3
|
%
|
|
3
|
%
|
Non-vehicle
|
102
|
|
|
87
|
|
|
4
|
%
|
|
4
|
%
|
|
185
|
|
|
173
|
|
|
4
|
%
|
|
4
|
%
|
Total interest
expense, net
|
174
|
|
|
149
|
|
|
8
|
%
|
|
6
|
%
|
|
325
|
|
|
296
|
|
|
8
|
%
|
|
7
|
%
|
Other (income)
expense, net
|
1
|
|
|
(8)
|
|
|
—
|
%
|
|
—
|
%
|
|
(89)
|
|
|
(1)
|
|
|
(2)
|
%
|
|
—
|
%
|
Total
expenses
|
2,305
|
|
|
2,279
|
|
|
102
|
%
|
|
98
|
%
|
|
4,365
|
|
|
4,486
|
|
|
103
|
%
|
|
102
|
%
|
Income (loss) from
continuing operations before
income taxes
|
(35)
|
|
|
38
|
|
|
(2)
|
%
|
|
2
|
%
|
|
(112)
|
|
|
(71)
|
|
|
(3)
|
%
|
|
(2)
|
%
|
(Provision) benefit
for taxes on income (loss) of
continuing operations
|
7
|
|
|
(25)
|
|
|
—
|
%
|
|
(1)
|
%
|
|
32
|
|
|
6
|
|
|
1
|
%
|
|
—
|
%
|
Net income (loss)
from continuing operations
|
(28)
|
|
|
13
|
|
|
(1)
|
%
|
|
1
|
%
|
|
(80)
|
|
|
(65)
|
|
|
(2)
|
%
|
|
(1)
|
%
|
Net income (loss)
from discontinued operations
|
(15)
|
|
|
23
|
|
|
(1)
|
%
|
|
1
|
%
|
|
(13)
|
|
|
31
|
|
|
—
|
%
|
|
1
|
%
|
Net Income
(loss)
|
$
|
(43)
|
|
|
$
|
36
|
|
|
(2)
|
%
|
|
2
|
%
|
|
$
|
(93)
|
|
|
$
|
(34)
|
|
|
(2)
|
%
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
85
|
|
|
92
|
|
(b)
|
|
|
|
|
85
|
|
|
92
|
|
(b)
|
|
|
|
Diluted
|
85
|
|
|
92
|
|
(b)
|
|
|
|
|
85
|
|
|
92
|
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share - basic and diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share from
continuing operations
|
$
|
(0.33)
|
|
|
$
|
0.14
|
|
|
|
|
|
|
$
|
(0.94)
|
|
|
$
|
(0.71)
|
|
|
|
|
|
Basic earnings (loss)
per share from
discontinued operations
|
(0.18)
|
|
|
0.25
|
|
|
|
|
|
|
(0.15)
|
|
|
0.34
|
|
|
|
|
|
Basic earnings (loss)
per share
|
$
|
(0.51)
|
|
|
$
|
0.39
|
|
|
|
|
|
|
$
|
(1.09)
|
|
|
$
|
(0.37)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share from
continuing operations
|
$
|
(0.33)
|
|
|
$
|
0.14
|
|
|
|
|
|
|
$
|
(0.94)
|
|
|
$
|
(0.71)
|
|
|
|
|
|
Diluted earnings
(loss) per share from
discontinued operations
|
(0.18)
|
|
|
0.25
|
|
|
|
|
|
|
(0.15)
|
|
|
0.34
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
(0.51)
|
|
|
$
|
0.39
|
|
|
|
|
|
|
$
|
(1.09)
|
|
|
$
|
(0.37)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income (loss) (a)
|
$
|
55
|
|
|
$
|
118
|
|
|
2
|
%
|
|
5
|
%
|
|
$
|
(53)
|
|
|
$
|
77
|
|
|
(1)
|
%
|
|
2
|
%
|
Adjusted net income
(loss) (a)
|
$
|
35
|
|
|
$
|
74
|
|
|
2
|
%
|
|
3
|
%
|
|
$
|
(33)
|
|
|
$
|
49
|
|
|
(1)
|
%
|
|
1
|
%
|
Adjusted earnings
(loss) per share (a)
|
$
|
0.41
|
|
|
$
|
0.80
|
|
|
—
|
%
|
|
—
|
%
|
|
$
|
(0.39)
|
|
|
$
|
0.53
|
|
|
—
|
%
|
|
—
|
%
|
Adjusted Corporate
EBITDA (a)
|
$
|
184
|
|
|
$
|
246
|
|
|
8
|
%
|
|
11
|
%
|
|
$
|
212
|
|
|
$
|
337
|
|
|
5
|
%
|
|
8
|
%
|
(a)
|
Represents a non-GAAP
measure, see the accompanying reconciliations included in
Supplemental Schedules II and III.
|
(b)
|
The weighted average
number of basic and diluted shares for the three and six months
ended June 30, 2015 is presented as adjusted for the one-to-five
distribution ratio as a result of the Spin-Off.
|
SELECTED UNAUDITED
CONSOLIDATED BALANCE SHEET DATA
|
|
(In
millions)
|
June 30,
2016
|
|
December 31,
2015
|
Cash and cash
equivalents
|
$
|
1,285
|
|
|
$
|
474
|
|
Total restricted
cash
|
318
|
|
|
333
|
|
Revenue earning
vehicles:
|
|
|
|
U.S. Rental
Car
|
8,685
|
|
|
7,600
|
|
International Rental Car
|
2,798
|
|
|
1,858
|
|
All Other
Operations
|
1,326
|
|
|
1,288
|
|
Total revenue earning
vehicles, net
|
12,809
|
|
|
10,746
|
|
Total
assets
|
22,020
|
|
|
23,514
|
|
Total debt
|
15,392
|
|
|
15,770
|
|
Net vehicle debt
(a)
|
10,568
|
|
|
9,561
|
|
Net non-vehicle debt
(a)
|
3,346
|
|
|
5,519
|
|
Total
equity
|
1,609
|
|
|
2,019
|
|
(a)
|
Represents a non-GAAP
measure, see the accompanying reconciliations included in
Supplemental Schedule VI.
|
SELECTED UNAUDITED
CONSOLIDATED CASH FLOW DATA
|
|
|
Six Months Ended
June 30,
|
(In
millions)
|
2016
|
|
2015
|
Cash from continuing
operations provided by (used in):
|
|
|
|
Operating
activities
|
$
|
1,014
|
|
|
$
|
1,161
|
|
Investing
activities
|
(1,929)
|
|
|
(2,862)
|
|
Financing
activities
|
1,718
|
|
|
1,771
|
|
Effect of exchange
rate changes
|
8
|
|
|
(16)
|
|
Net change in cash
and cash equivalents
|
$
|
811
|
|
|
$
|
54
|
|
|
|
|
|
Fleet growth
(a)
|
$
|
130
|
|
|
$
|
92
|
|
Free cash flow
(a)
|
(101)
|
|
|
(15)
|
|
(a)
|
Represents a non-GAAP
measure, see the accompanying reconciliations included in
Supplemental Schedules IV and V.
|
SELECTED UNAUDITED
OPERATING DATA BY SEGMENT
|
|
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
|
Six Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
U.S.
RAC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
37,190
|
|
|
34,977
|
|
|
6
|
%
|
|
|
69,932
|
|
|
67,014
|
|
|
4
|
%
|
|
Total
RPD(a)
|
$
|
42.11
|
|
|
$
|
45.80
|
|
|
(8)
|
%
|
|
|
$
|
42.23
|
|
|
$
|
46.41
|
|
|
(9)
|
%
|
|
Revenue per available
car day(a)
|
$
|
34.42
|
|
|
$
|
34.40
|
|
|
—
|
%
|
|
|
$
|
33.80
|
|
|
$
|
34.33
|
|
|
(2)
|
%
|
|
Average
vehicles
|
500,000
|
|
|
511,700
|
|
|
(2)
|
%
|
|
|
480,100
|
|
|
500,500
|
|
|
(4)
|
%
|
|
Vehicle
utilization
|
82
|
%
|
|
75
|
%
|
|
700
|
|
bps
|
|
80
|
%
|
|
74
|
%
|
|
600
|
|
bps
|
Net depreciation per
unit per month(a)
|
$
|
278
|
|
|
$
|
248
|
|
|
12
|
%
|
|
|
$
|
290
|
|
|
$
|
267
|
|
|
9
|
%
|
|
Program vehicles as a
percentage of total average
vehicles at period end
|
12
|
%
|
|
29
|
%
|
|
(1,700)
|
|
bps
|
|
12
|
%
|
|
29
|
%
|
|
(1,700)
|
|
bps
|
Adjusted pre-tax income
(loss)(in millions)(a)
|
$
|
143
|
|
|
$
|
195
|
|
|
(27)
|
%
|
|
|
$
|
138
|
|
|
$
|
265
|
|
|
(48)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
RAC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
12,511
|
|
|
12,523
|
|
|
—
|
%
|
|
|
22,613
|
|
|
22,298
|
|
|
1
|
%
|
|
Total
RPD(a)(b)
|
$
|
42.04
|
|
|
$
|
42.72
|
|
|
(2)
|
%
|
|
|
$
|
42.45
|
|
|
$
|
42.56
|
|
|
—
|
%
|
|
Revenue per available
car day(a)(b)
|
$
|
32.36
|
|
|
$
|
33.85
|
|
|
(4)
|
%
|
|
|
$
|
32.30
|
|
|
$
|
33.02
|
|
|
(2)
|
%
|
|
Average
vehicles
|
178,600
|
|
|
173,700
|
|
|
3
|
%
|
|
|
163,300
|
|
|
158,800
|
|
|
3
|
%
|
|
Vehicle
utilization
|
77
|
%
|
|
79
|
%
|
|
(200)
|
|
bps
|
|
76
|
%
|
|
78
|
%
|
|
(200)
|
|
bps
|
Net depreciation per
unit per month(a)(b)
|
$
|
179
|
|
|
$
|
186
|
|
|
(4)
|
%
|
|
|
$
|
186
|
|
|
$
|
197
|
|
|
(6)
|
%
|
|
Program vehicles as a
percentage of total average
vehicles at period end
|
45
|
%
|
|
46
|
%
|
|
(100)
|
|
bps
|
|
45
|
%
|
|
46
|
%
|
|
(100)
|
|
bps
|
Adjusted pre-tax income
(loss)(in millions)(a)
|
$
|
34
|
|
|
$
|
45
|
|
|
(24)
|
%
|
|
|
$
|
36
|
|
|
$
|
52
|
|
|
(31)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average vehicles —
Donlen
|
166,900
|
|
|
165,600
|
|
|
1
|
%
|
|
|
166,900
|
|
|
167,100
|
|
|
—
|
%
|
|
Adjusted pre-tax income
(loss) (in millions)(a)
|
$
|
17
|
|
|
$
|
17
|
|
|
—
|
%
|
|
|
$
|
35
|
|
|
$
|
31
|
|
|
13
|
%
|
|
(a)
|
Represents a non-GAAP
measure, see the accompanying reconciliations included in
Supplemental Schedules III and VI.
|
(b)
|
Based on
December 31, 2015 foreign exchange rates.
|
Supplemental
Schedule I
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
CONDENSED
STATEMENT OF OPERATIONS BY SEGMENT
|
Unaudited
|
|
|
Three Months Ended
June 30, 2016
|
|
Three Months Ended
June 30, 2015
|
(In
millions)
|
U.S.
Rental
|
|
Int'l
Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
|
U.S.
Rental
Car
|
|
Int'l
Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
Total
revenues:
|
$
|
1,584
|
|
|
$
|
540
|
|
|
$
|
146
|
|
|
$
|
—
|
|
|
$
|
2,270
|
|
|
$
|
1,615
|
|
|
$
|
556
|
|
|
$
|
146
|
|
|
$
|
—
|
|
|
$
|
2,317
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
916
|
|
|
341
|
|
|
6
|
|
|
4
|
|
|
1,267
|
|
|
942
|
|
|
332
|
|
|
6
|
|
|
10
|
|
|
1,290
|
|
Depreciation of
revenue earning vehicles and lease
charges, net
|
417
|
|
|
98
|
|
|
114
|
|
|
—
|
|
|
629
|
|
|
380
|
|
|
101
|
|
|
116
|
|
|
—
|
|
|
597
|
|
Selling, general and
administrative
|
103
|
|
|
57
|
|
|
8
|
|
|
66
|
|
|
234
|
|
|
100
|
|
|
69
|
|
|
8
|
|
|
74
|
|
|
251
|
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
53
|
|
|
14
|
|
|
5
|
|
|
—
|
|
|
72
|
|
|
43
|
|
|
16
|
|
|
3
|
|
|
—
|
|
|
62
|
|
Non-vehicle
|
(8)
|
|
|
1
|
|
|
(1)
|
|
|
110
|
|
|
102
|
|
|
(2)
|
|
|
2
|
|
|
(1)
|
|
|
88
|
|
|
87
|
|
Total interest
expense, net
|
45
|
|
|
15
|
|
|
4
|
|
|
110
|
|
|
174
|
|
|
41
|
|
|
18
|
|
|
2
|
|
|
88
|
|
|
149
|
|
Other (income)
expense, net
|
(1)
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
(7)
|
|
|
(8)
|
|
Total
expenses
|
1,480
|
|
|
511
|
|
|
132
|
|
|
182
|
|
|
2,305
|
|
|
1,462
|
|
|
520
|
|
|
132
|
|
|
165
|
|
|
2,279
|
|
Income (loss) from
continuing operations before income
taxes
|
$
|
104
|
|
|
$
|
29
|
|
|
$
|
14
|
|
|
$
|
(182)
|
|
|
(35)
|
|
|
$
|
153
|
|
|
$
|
36
|
|
|
$
|
14
|
|
|
$
|
(165)
|
|
|
38
|
|
(Provision) benefit
for taxes on income (loss) from
continuing operations
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
(25)
|
|
Net income (loss)
from continuing operations
|
|
|
|
|
|
|
|
|
(28)
|
|
|
|
|
|
|
|
|
|
|
13
|
|
Net income (loss)
from discontinued operations
|
|
|
|
|
|
|
|
|
(15)
|
|
|
|
|
|
|
|
|
|
|
23
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
$
|
(43)
|
|
|
|
|
|
|
|
|
|
|
$
|
36
|
|
Supplemental
Schedule I (continued)
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
CONDENSED
STATEMENT OF OPERATIONS BY SEGMENT
|
Unaudited
|
|
|
Six Months Ended
June 30, 2016
|
|
Six Months Ended
June 30, 2015
|
(In
millions)
|
U.S.
Rental
|
|
Int'l
Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
|
U.S.
Rental Car
|
|
Int'l
Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global
|
Total
revenues:
|
$
|
2,990
|
|
|
$
|
973
|
|
|
$
|
290
|
|
|
$
|
—
|
|
|
$
|
4,253
|
|
|
$
|
3,135
|
|
|
$
|
992
|
|
|
$
|
288
|
|
|
$
|
—
|
|
|
$
|
4,415
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
1,786
|
|
|
620
|
|
|
11
|
|
|
8
|
|
|
2,425
|
|
|
1,868
|
|
|
599
|
|
|
11
|
|
|
14
|
|
|
2,492
|
|
Depreciation of
revenue earning vehicles and lease
charges, net
|
836
|
|
|
184
|
|
|
225
|
|
|
—
|
|
|
1,245
|
|
|
801
|
|
|
196
|
|
|
231
|
|
|
—
|
|
|
1,228
|
|
Selling, general and
administrative
|
208
|
|
|
112
|
|
|
17
|
|
|
122
|
|
|
459
|
|
|
197
|
|
|
125
|
|
|
16
|
|
|
133
|
|
|
471
|
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
104
|
|
|
27
|
|
|
9
|
|
|
—
|
|
|
140
|
|
|
86
|
|
|
31
|
|
|
6
|
|
|
—
|
|
|
123
|
|
Non-vehicle
|
(15)
|
|
|
3
|
|
|
(2)
|
|
|
199
|
|
|
185
|
|
|
(4)
|
|
|
3
|
|
|
(1)
|
|
|
175
|
|
|
173
|
|
Interest expense,
net
|
89
|
|
|
30
|
|
|
7
|
|
|
199
|
|
|
325
|
|
|
82
|
|
|
34
|
|
|
5
|
|
|
175
|
|
|
296
|
|
Other (income)
expense, net
|
(11)
|
|
|
—
|
|
|
—
|
|
|
(78)
|
|
|
(89)
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
Total
expenses
|
2,908
|
|
|
946
|
|
|
260
|
|
|
251
|
|
|
4,365
|
|
|
2,947
|
|
|
954
|
|
|
263
|
|
|
322
|
|
|
4,486
|
|
Income (loss) from
continuing operations before income
taxes
|
$
|
82
|
|
|
$
|
27
|
|
|
$
|
30
|
|
|
$
|
(251)
|
|
|
(112)
|
|
|
$
|
188
|
|
|
$
|
38
|
|
|
$
|
25
|
|
|
$
|
(322)
|
|
|
(71)
|
|
(Provision) benefit
for taxes on income (loss) from
continuing operations
|
|
|
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
6
|
|
Net income (loss)
from continuing operations
|
|
|
|
|
|
|
|
|
(80)
|
|
|
|
|
|
|
|
|
|
|
(65)
|
|
Net income (loss)
from discontinued operations
|
|
|
|
|
|
|
|
|
(13)
|
|
|
|
|
|
|
|
|
|
|
31
|
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
$
|
(93)
|
|
|
|
|
|
|
|
|
|
|
$
|
(34)
|
|
Supplemental
Schedule II
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
TO ADJUSTED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
Unaudited
|
|
|
Three Months Ended
June 30, 2016
|
|
Three Months Ended
June 30, 2015
|
|
(In millions, except
per share data)
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-
GAAP)
|
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-
GAAP)
|
|
Total
revenues
|
$
|
2,270
|
|
|
$
|
—
|
|
|
$
|
2,270
|
|
|
$
|
2,317
|
|
|
$
|
—
|
|
|
$
|
2,317
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
1,267
|
|
|
(25)
|
|
(a)
|
1,242
|
|
|
1,290
|
|
|
(39)
|
|
(a)
|
1,251
|
|
|
Depreciation of
revenue earning
vehicles and lease charges, net
|
629
|
|
|
—
|
|
|
629
|
|
|
597
|
|
|
—
|
|
|
597
|
|
|
Selling, general and
administrative
|
234
|
|
|
(32)
|
|
(b)
|
202
|
|
|
251
|
|
|
(29)
|
|
(b)
|
222
|
|
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
72
|
|
|
(9)
|
|
(c)
|
63
|
|
|
62
|
|
|
(11)
|
|
(c)
|
51
|
|
|
Non-vehicle
|
102
|
|
|
(23)
|
|
(c)
|
79
|
|
|
87
|
|
|
(4)
|
|
(c)
|
83
|
|
|
Total interest
expense, net
|
174
|
|
|
(32)
|
|
(c)
|
142
|
|
|
149
|
|
|
(15)
|
|
(c)
|
134
|
|
|
Other (income)
expense, net
|
1
|
|
|
(1)
|
|
(d)
|
—
|
|
|
(8)
|
|
|
3
|
|
(d)
|
(5)
|
|
|
Total
expenses
|
2,305
|
|
|
(90)
|
|
|
2,215
|
|
|
2,279
|
|
|
(80)
|
|
|
2,199
|
|
|
Income (loss) from
continuing
operations before income taxes
|
(35)
|
|
|
90
|
|
|
55
|
|
|
38
|
|
|
80
|
|
|
118
|
|
|
(Provision) benefit
for taxes on income
(loss) of continuing operations
|
7
|
|
|
(27)
|
|
(e)
|
(20)
|
|
(e)
|
(25)
|
|
|
(19)
|
|
(e)
|
(44)
|
|
(e)
|
Net income (loss)
from continuing
operations
|
(28)
|
|
|
63
|
|
|
35
|
|
|
13
|
|
|
61
|
|
|
74
|
|
|
Net income (loss)
from discontinued
operations
|
(15)
|
|
|
39
|
|
|
24
|
|
|
23
|
|
|
13
|
|
|
36
|
|
|
Net income
(loss)
|
$
|
(43)
|
|
|
$
|
102
|
|
|
$
|
59
|
|
|
$
|
36
|
|
|
$
|
74
|
|
|
$
|
110
|
|
|
Weighted average
number of diluted
shares outstanding(f)
|
85
|
|
|
85
|
|
|
85
|
|
|
92
|
|
|
92
|
|
|
92
|
|
|
Diluted earnings
(loss) per share from
continuing operations
|
$
|
(0.33)
|
|
|
$
|
0.74
|
|
|
$
|
0.41
|
|
|
$
|
0.14
|
|
|
$
|
0.66
|
|
|
$
|
0.80
|
|
|
Diluted earnings
(loss) per share from
discontinued operations
|
(0.18)
|
|
|
0.46
|
|
|
0.28
|
|
|
0.25
|
|
|
0.14
|
|
|
0.39
|
|
|
Diluted earnings
(loss) per share
|
$
|
(0.51)
|
|
|
$
|
1.20
|
|
|
$
|
0.69
|
|
|
$
|
0.39
|
|
|
$
|
0.80
|
|
|
$
|
1.19
|
|
|
Supplemental
Schedule II (continued)
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
TO ADJUSTED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
Unaudited
|
|
|
|
Six Months Ended
June 30, 2016
|
|
Six Months Ended
June 30, 2015
|
|
(In millions, except
per share data)
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-GAAP)
|
|
GAAP
|
|
Adjustments
|
|
Adjusted
(Non-GAAP)
|
|
Total
revenues
|
$
|
4,253
|
|
|
$
|
—
|
|
|
$
|
4,253
|
|
|
$
|
4,415
|
|
|
$
|
—
|
|
|
$
|
4,415
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct vehicle and
operating
|
2,425
|
|
|
(38)
|
|
(a)
|
2,387
|
|
|
2,492
|
|
|
(63)
|
|
(a)
|
2,429
|
|
|
Depreciation of
revenue earning
vehicles and lease charges, net
|
1,245
|
|
|
—
|
|
|
1,245
|
|
|
1,228
|
|
|
—
|
|
|
1,228
|
|
|
Selling, general and
administrative
|
459
|
|
|
(59)
|
|
(b)
|
400
|
|
|
471
|
|
|
(56)
|
|
(b)
|
415
|
|
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
140
|
|
|
(19)
|
|
(c)
|
121
|
|
|
123
|
|
|
(21)
|
|
(c)
|
102
|
|
|
Non-vehicle
|
185
|
|
|
(26)
|
|
(c)
|
159
|
|
|
173
|
|
|
(8)
|
|
(c)
|
165
|
|
|
Total interest
expense, net
|
325
|
|
|
(45)
|
|
(c)
|
280
|
|
|
296
|
|
|
(29)
|
|
(c)
|
267
|
|
|
Other (income)
expense, net
|
(89)
|
|
|
83
|
|
(d)
|
(6)
|
|
|
(1)
|
|
|
—
|
|
(d)
|
(1)
|
|
|
Total
expenses
|
4,365
|
|
|
(59)
|
|
|
4,306
|
|
|
4,486
|
|
|
(148)
|
|
|
4,338
|
|
|
Income (loss) from
continuing
operations before income taxes
|
(112)
|
|
|
59
|
|
|
(53)
|
|
|
(71)
|
|
|
148
|
|
|
77
|
|
|
(Provision) benefit
for taxes on income
(loss) of continuing operations
|
32
|
|
|
(12)
|
|
(e)
|
20
|
|
(e)
|
6
|
|
|
(34)
|
|
(e)
|
(28)
|
|
(e)
|
Net income (loss)
from continuing
operations
|
(80)
|
|
|
47
|
|
|
(33)
|
|
|
(65)
|
|
|
114
|
|
|
49
|
|
|
Net income (loss)
from discontinued
operations, net of tax
|
(13)
|
|
|
52
|
|
|
39
|
|
|
31
|
|
|
32
|
|
|
63
|
|
|
Net income
(loss)
|
$
|
(93)
|
|
|
$
|
99
|
|
|
$
|
6
|
|
|
$
|
(34)
|
|
|
$
|
146
|
|
|
$
|
112
|
|
|
Weighted average
number of diluted
shares outstanding
|
85
|
|
|
85
|
|
|
85
|
|
|
92
|
|
|
92
|
|
|
92
|
|
|
Diluted earnings
(loss) per share from
continuing operations
|
$
|
(0.94)
|
|
|
$
|
0.55
|
|
|
$
|
(0.39)
|
|
|
$
|
(0.71)
|
|
|
$
|
1.24
|
|
|
$
|
0.53
|
|
|
Diluted earnings
(loss) per share from
discontinued operations
|
(0.15)
|
|
|
0.62
|
|
|
0.46
|
|
|
0.34
|
|
|
0.35
|
|
|
0.69
|
|
|
Diluted earnings
(loss) per share
|
$
|
(1.09)
|
|
|
$
|
1.17
|
|
|
$
|
0.07
|
|
|
$
|
(0.37)
|
|
|
$
|
1.59
|
|
|
$
|
1.22
|
|
|
(a)
|
Represents the
increase in amortization of other intangible assets, depreciation
of property and equipment and accretion of certain revalued
liabilities relating to purchase accounting. Also includes
restructuring and restructuring related charges, impairments and
asset write-downs, when applicable.
|
(b)
|
Primarily comprised
of restructuring and restructuring related charges, impairments and
asset write-downs, Corporate expenses associated with the
Spin-Off transaction, consulting costs and legal fees related to
the accounting review and investigation, expenses associated with
acquisitions, integration charges, external costs associated with
the Company's finance and information technology transformation
programs and relocation expenses associated with the Company's
relocation of its headquarters to Estero, Florida, when
applicable.
|
(c)
|
Represents
debt-related charges relating to the amortization of deferred debt
financing costs and debt discounts and premiums and the loss on
extinguishment of debt .
|
(d)
|
Includes
miscellaneous and non-recurring items including but not limited to
acquisition charges, integration charges, and other non-cash items.
For the six months ended June 30, 2016, also includes the gain
on the sale of common stock of CAR Inc. and a settlement gain
related to one of our U.S. airport locations. In the 2015 periods,
includes charges incurred in connection with relocating the
Company's corporate headquarters to Estero, Florida.
|
(e)
|
Represents a
(provision) benefit for income taxes derived utilizing a combined
statutory rate of 37% for all periods shown. The combined statutory
rate is applied to the adjusted income (loss) before income taxes
to arrive at the adjusted (provision) benefit for taxes. The
(provision) benefit for taxes related to the adjustments is
calculated as the difference between the adjusted (provision)
benefit for taxes and the GAAP (provision) benefit for
taxes.
|
(f)
|
Diluted earnings
(loss) per share for the three and six months ended June 30, 2015
is calculated using the weighted average number of dilutive common
shares outstanding during the periods, as adjusted for the
one-to-five distribution ratio of the Spin-Off.
|
Supplemental
Schedule III
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES
|
TO GROSS EBITDA,
CORPORATE EBITDA, ADJUSTED CORPORATE EBITDA AND ADJUSTED PRE-TAX
INCOME (LOSS) BY SEGMENT
|
Unaudited
|
|
|
Three Months Ended
June 30, 2016
|
|
Three Months Ended
June 30, 2015
|
(In
millions)
|
U.S.
Rental
|
|
Int'l
Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global(a)
|
|
U.S.
Rental
|
|
Int'l
Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global(a)
|
Income (loss) from
continuing operations before income taxes
|
$
|
104
|
|
|
$
|
29
|
|
|
$
|
14
|
|
|
$
|
(182)
|
|
|
$
|
(35)
|
|
|
$
|
153
|
|
|
$
|
36
|
|
|
$
|
14
|
|
|
$
|
(165)
|
|
|
$
|
38
|
|
Depreciation and
amortization
|
462
|
|
|
106
|
|
|
116
|
|
|
7
|
|
|
691
|
|
|
429
|
|
|
110
|
|
|
117
|
|
|
5
|
|
|
661
|
|
Interest, net of
interest income
|
45
|
|
|
15
|
|
|
4
|
|
|
110
|
|
|
174
|
|
|
41
|
|
|
18
|
|
|
2
|
|
|
88
|
|
|
149
|
|
Gross
EBITDA
|
$
|
611
|
|
|
$
|
150
|
|
|
$
|
134
|
|
|
$
|
(65)
|
|
|
$
|
830
|
|
|
$
|
623
|
|
|
$
|
164
|
|
|
$
|
133
|
|
|
$
|
(72)
|
|
|
$
|
848
|
|
Revenue earning
vehicle depreciation and lease charges, net
|
(417)
|
|
|
(98)
|
|
|
(114)
|
|
|
—
|
|
|
(629)
|
|
|
(380)
|
|
|
(101)
|
|
|
(116)
|
|
|
—
|
|
|
(597)
|
|
Vehicle debt
interest
|
(53)
|
|
|
(14)
|
|
|
(5)
|
|
|
—
|
|
|
(72)
|
|
|
(43)
|
|
|
(16)
|
|
|
(3)
|
|
|
—
|
|
|
(62)
|
|
Vehicle debt-related
charges (b)
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
8
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
11
|
|
Loss on
extinguishment of vehicle-related debt (c)
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Corporate
EBITDA
|
$
|
148
|
|
|
$
|
39
|
|
|
$
|
16
|
|
|
$
|
(65)
|
|
|
$
|
138
|
|
|
$
|
208
|
|
|
$
|
49
|
|
|
$
|
15
|
|
|
$
|
(72)
|
|
|
$
|
200
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
Restructuring and
restructuring related charges (d)
|
13
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
18
|
|
|
16
|
|
|
5
|
|
|
—
|
|
|
20
|
|
|
41
|
|
Sale of CAR Inc.
common stock (e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Impairment charges
and write-downs (f)
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Finance and
information technology transformation
costs(g)
|
5
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other extraordinary,
unusual or non-recurring items(h)
|
(1)
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
Adjusted Corporate
EBITDA
|
$
|
168
|
|
|
$
|
42
|
|
|
$
|
16
|
|
|
$
|
(42)
|
|
|
$
|
184
|
|
|
$
|
224
|
|
|
$
|
54
|
|
|
$
|
15
|
|
|
$
|
(47)
|
|
|
$
|
246
|
|
Non-vehicle
depreciation and amortization
|
(45)
|
|
|
(8)
|
|
|
(2)
|
|
|
(7)
|
|
|
(62)
|
|
|
(49)
|
|
|
(9)
|
|
|
(1)
|
|
|
(5)
|
|
|
(64)
|
|
Non-vehicle debt
interest, net of interest income
|
8
|
|
|
(1)
|
|
|
1
|
|
|
(110)
|
|
|
(102)
|
|
|
2
|
|
|
(2)
|
|
|
1
|
|
|
(88)
|
|
|
(87)
|
|
Non-vehicle
debt-related charges (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
Loss on
extinguishment of non-vehicle-related-debt
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
(6)
|
|
|
(6)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4)
|
|
|
(4)
|
|
Acquisition
accounting (i)
|
12
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
18
|
|
|
18
|
|
|
2
|
|
|
2
|
|
|
1
|
|
|
23
|
|
Adjusted pre-tax
income (loss)
|
$
|
143
|
|
|
$
|
34
|
|
|
$
|
17
|
|
|
$
|
(139)
|
|
|
$
|
55
|
|
|
$
|
195
|
|
|
$
|
45
|
|
|
$
|
17
|
|
|
$
|
(139)
|
|
|
$
|
118
|
|
Supplemental
Schedule III (continued)
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES
|
TO GROSS EBITDA,
CORPORATE EBITDA, ADJUSTED CORPORATE EBITDA AND ADJUSTED PRE-TAX
INCOME (LOSS) BY SEGMENT
|
|
Unaudited
|
|
|
Six Months Ended
June 30, 2016
|
|
Six Months Ended
June 30, 2015
|
(In
millions)
|
U.S.
Rental
|
|
Int'l
Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global(a)
|
|
U.S.
Rental
|
|
Int'l
Rental
|
|
All Other
Operations
|
|
Corporate
|
|
Hertz
Global(a)
|
Income (loss) from
continuing operations before income taxes
|
$
|
82
|
|
|
$
|
27
|
|
|
$
|
30
|
|
|
$
|
(251)
|
|
|
$
|
(112)
|
|
|
$
|
188
|
|
|
$
|
38
|
|
|
$
|
25
|
|
|
$
|
(322)
|
|
|
$
|
(71)
|
|
Depreciation and
amortization
|
931
|
|
|
201
|
|
|
230
|
|
|
12
|
|
|
1,374
|
|
|
901
|
|
|
214
|
|
|
235
|
|
|
9
|
|
|
1,359
|
|
Interest, net of
interest income
|
89
|
|
|
30
|
|
|
7
|
|
|
199
|
|
|
325
|
|
|
82
|
|
|
34
|
|
|
5
|
|
|
175
|
|
|
296
|
|
Gross
EBITDA
|
$
|
1,102
|
|
|
$
|
258
|
|
|
$
|
267
|
|
|
$
|
(40)
|
|
|
$
|
1,587
|
|
|
$
|
1,171
|
|
|
$
|
286
|
|
|
$
|
265
|
|
|
$
|
(138)
|
|
|
$
|
1,584
|
|
Revenue earning
vehicle depreciation and lease charges, net
|
(836)
|
|
|
(184)
|
|
|
(225)
|
|
|
—
|
|
|
(1,245)
|
|
|
(801)
|
|
|
(196)
|
|
|
(231)
|
|
|
—
|
|
|
(1,228)
|
|
Vehicle debt
interest
|
(104)
|
|
|
(27)
|
|
|
(9)
|
|
|
—
|
|
|
(140)
|
|
|
(86)
|
|
|
(31)
|
|
|
(6)
|
|
|
—
|
|
|
(123)
|
|
Vehicle debt-related
charges (b)
|
8
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
13
|
|
|
15
|
|
|
4
|
|
|
2
|
|
|
—
|
|
|
21
|
|
Loss on
extinguishment of vehicle-related debt (c)
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Corporate
EBITDA
|
$
|
176
|
|
|
$
|
50
|
|
|
$
|
35
|
|
|
$
|
(40)
|
|
|
$
|
221
|
|
|
$
|
299
|
|
|
$
|
63
|
|
|
$
|
30
|
|
|
$
|
(138)
|
|
|
$
|
254
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
Restructuring and
restructuring related charges (d)
|
14
|
|
|
3
|
|
|
—
|
|
|
12
|
|
|
29
|
|
|
18
|
|
|
6
|
|
|
—
|
|
|
35
|
|
|
59
|
|
Sale of CAR Inc.
common stock (e)
|
—
|
|
|
—
|
|
|
—
|
|
|
(75)
|
|
|
(75)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Impairment charges
and write-downs (f)
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
Finance and
information technology transformation costs
(g)
|
9
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other extraordinary,
unusual or non-recurring items (h)
|
(9)
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
(3)
|
|
|
(2)
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
6
|
|
Adjusted Corporate
EBITDA
|
$
|
193
|
|
|
$
|
53
|
|
|
$
|
35
|
|
|
$
|
(69)
|
|
|
$
|
212
|
|
|
$
|
324
|
|
|
$
|
69
|
|
|
$
|
30
|
|
|
$
|
(86)
|
|
|
$
|
337
|
|
Non-vehicle
depreciation and amortization
|
(95)
|
|
|
(17)
|
|
|
(5)
|
|
|
(12)
|
|
|
(129)
|
|
|
(100)
|
|
|
(18)
|
|
|
(4)
|
|
|
(9)
|
|
|
(131)
|
|
Non-vehicle debt
interest, net of interest income
|
15
|
|
|
(3)
|
|
|
2
|
|
|
(199)
|
|
|
(185)
|
|
|
4
|
|
|
(3)
|
|
|
1
|
|
|
(175)
|
|
|
(173)
|
|
Non-vehicle
debt-related charges (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
8
|
|
Loss on
extinguishment of non-vehicle-related debt
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-cash stock-based
employee compensation charges
|
—
|
|
|
—
|
|
|
—
|
|
|
(11)
|
|
|
(11)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
|
(9)
|
|
Acquisition
accounting (i)
|
25
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
34
|
|
|
36
|
|
|
4
|
|
|
4
|
|
|
1
|
|
|
45
|
|
Adjusted pre-tax
income (loss)
|
$
|
138
|
|
|
$
|
36
|
|
|
$
|
35
|
|
|
$
|
(262)
|
|
|
$
|
(53)
|
|
|
$
|
265
|
|
|
$
|
52
|
|
|
$
|
31
|
|
|
$
|
(271)
|
|
|
$
|
77
|
|
(a)
|
Excludes discontinued
operations.
|
(b)
|
Represents
debt-related charges relating to the amortization of deferred debt
financing costs and debt discounts and premiums.
|
(c)
|
Represents the
write-off of deferred debt financing costs in the second quarter of
2016 as a result of paying off the Senior Term Facility and various
vehicle debt refinancings.
|
(d)
|
Represents expenses
incurred under restructuring actions as defined in U.S. GAAP. Also
represents incremental costs incurred directly supporting business
transformation initiatives. Such costs include transition costs
incurred in connection with business process outsourcing
arrangements and incremental costs incurred to facilitate business
process re-engineering initiatives that involve significant
organization redesign and extensive operational process changes.
Also includes consulting costs and legal fees related to the
accounting review and investigation.
|
(e)
|
In 2016, represents
the pre-tax gain on the sale of shares of CAR Inc. common
stock.
|
(f)
|
In 2015, primarily
represents a $6 million impairment on the former Dollar Thrifty
headquarters in Tulsa, Oklahoma.
|
(g)
|
Represents external
costs associated with the Company's finance and information
technology transformations programs, both of which are multi-year
initiatives to upgrade and modernize the Company's systems and
processes. In the three months ended June 30, 2016, $5 million was
incurred by U.S. RAC and $14 million was incurred by Corporate and
in the six months ended June 30, 2016, $9 million was incurred by
U.S. RAC and $17 million was incurred by Corporate.
|
(h)
|
Includes
miscellaneous and non-recurring items including but not limited to
acquisition charges, integration charges, and other non-cash items.
For the six months ended June 30, 2016, also includes a
settlement gain related to one of our U.S. airport locations. In
the 2015 periods, includes charges incurred in connection with
relocating the Company's corporate headquarters to Estero,
Florida.
|
(i)
|
Represents
incremental expense associated with amortization of other
intangible assets, depreciation of property and other equipment and
accretion of revalued liabilities relating to acquisition
accounting.
|
Supplemental
Schedule IV
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURE - FLEET GROWTH
|
Unaudited
|
|
|
Six Months Ended
June 30, 2016
|
|
Six Months Ended
June 30, 2015
|
(In
millions)
|
U.S.
Rental
|
|
Int'l
Rental
|
|
All Other
Operations
|
|
Hertz
Global(a)
|
|
U.S.
Rental
|
|
Int'l
Rental
|
|
All Other
Operations
|
|
Hertz
Global(a)
|
Revenue earning
vehicles expenditures
|
$
|
(4,854)
|
|
|
$
|
(1,691)
|
|
|
$
|
(723)
|
|
|
$
|
(7,268)
|
|
|
$
|
(5,190)
|
|
|
$
|
(1,732)
|
|
|
$
|
(717)
|
|
|
$
|
(7,639)
|
|
Proceeds from
disposal of revenue earning vehicles
|
3,545
|
|
|
1,148
|
|
|
475
|
|
|
5,168
|
|
|
3,279
|
|
|
1,111
|
|
|
426
|
|
|
4,816
|
|
Net revenue earning
vehicles capital expenditures
|
(1,309)
|
|
|
(543)
|
|
|
(248)
|
|
|
(2,100)
|
|
|
(1,911)
|
|
|
(621)
|
|
|
(291)
|
|
|
(2,823)
|
|
Depreciation of
revenue earning vehicles, net
|
837
|
|
|
150
|
|
|
225
|
|
|
1,212
|
|
|
801
|
|
|
159
|
|
|
231
|
|
|
1,191
|
|
Financing activity
related to vehicles:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings
|
4,221
|
|
|
1,267
|
|
|
591
|
|
|
6,079
|
|
|
4,146
|
|
|
831
|
|
|
602
|
|
|
5,579
|
|
Payments
|
(3,614)
|
|
|
(886)
|
|
|
(578)
|
|
|
(5,078)
|
|
|
(2,986)
|
|
|
(444)
|
|
|
(562)
|
|
|
(3,992)
|
|
Restricted cash
changes
|
18
|
|
|
1
|
|
|
(2)
|
|
|
17
|
|
|
150
|
|
|
12
|
|
|
(25)
|
|
|
137
|
|
Net financing activity
related to vehicles
|
625
|
|
|
382
|
|
|
11
|
|
|
1,018
|
|
|
1,310
|
|
|
399
|
|
|
15
|
|
|
1,724
|
|
Fleet
growth
|
$
|
153
|
|
|
$
|
(11)
|
|
|
$
|
(12)
|
|
|
$
|
130
|
|
|
$
|
200
|
|
|
$
|
(63)
|
|
|
$
|
(45)
|
|
|
$
|
92
|
|
|
(a) Excludes
discontinued operations.
|
Supplemental
Schedule V
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP MEASURE - FREE CASH FLOW
|
Unaudited
|
|
Reconciliation of
Income (Loss) From Continuing Operations Before Income
Taxes to Free Cash Flow
|
Six Months Ended
June 30,
|
(In
millions)
|
2016
|
|
2015
|
Income (loss) from
continuing operations before income taxes
|
$
|
(112)
|
|
|
$
|
(71)
|
|
Depreciation and
amortization, non-vehicle, net
|
128
|
|
|
131
|
|
Amortization of debt
discount and related charges
|
25
|
|
|
27
|
|
Loss on
extinguishment of debt
|
20
|
|
|
—
|
|
Cash paid for income
taxes, net of refunds
|
(25)
|
|
|
(12)
|
|
Changes in assets and
liabilities, net of effects of acquisitions, and other
|
(234)
|
|
|
(105)
|
|
Net cash provided by
operating activities excluding depreciation of revenue earning
vehicles, net
|
(198)
|
|
|
(30)
|
|
Investment
activity:
|
|
|
|
U.S. Rental Car fleet
growth
|
153
|
|
|
200
|
|
International
Rental Car fleet growth
|
(11)
|
|
|
(63)
|
|
All Other Operations
fleet growth
|
(12)
|
|
|
(45)
|
|
Property and
equipment expenditures, net of disposals
|
(33)
|
|
|
(77)
|
|
Net investment
activity
|
97
|
|
|
15
|
|
Free cash
flow
|
$
|
(101)
|
|
|
$
|
(15)
|
|
Reconciliation of
Cash Flows From Operating Activities to Free Cash
Flow
|
Six Months Ended
June 30,
|
(In
millions)
|
2016
|
|
2015
|
Net cash provided by
operating activities
|
$
|
1,014
|
|
|
$
|
1,161
|
|
Depreciation of
revenue earning vehicles, net
|
(1,212)
|
|
|
(1,191)
|
|
Investment
activity:
|
|
|
|
U.S. Rental Car fleet
growth
|
153
|
|
|
200
|
|
International Rental Car fleet
growth
|
(11)
|
|
|
(63)
|
|
All Other Operations
fleet growth
|
(12)
|
|
|
(45)
|
|
Property and
equipment expenditures, net of disposals
|
(33)
|
|
|
(77)
|
|
Net investment
activity
|
97
|
|
|
15
|
|
Free cash
flow
|
$
|
(101)
|
|
|
$
|
(15)
|
|
Supplemental
Schedule VI
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATIONS OF
GAAP TO NON-GAAP MEASURES - DEBT, REVENUE,
|
DEPRECIATION AND
KEY METRICS
|
Unaudited
|
|
NET VEHICLE DEBT,
NET NON-VEHICLE DEBT AND TOTAL NET DEBT
|
|
|
As of June 30,
2016
|
|
As of December 31,
2015
|
(In
millions)
|
Vehicle
|
|
Non-
Vehicle
|
|
Total
|
|
Vehicle
|
|
Non-
Vehicle
|
|
Total
|
Debt as reported in
the balance sheet
|
$
|
10,801
|
|
|
$
|
4,591
|
|
|
$
|
15,392
|
|
|
$
|
9,823
|
|
|
$
|
5,947
|
|
|
$
|
15,770
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Debt issue costs deducted
from debt obligations(a)
|
39
|
|
|
40
|
|
|
79
|
|
|
27
|
|
|
46
|
|
|
73
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
—
|
|
|
1,285
|
|
|
1,285
|
|
|
—
|
|
|
474
|
|
|
474
|
|
Restricted
cash
|
272
|
|
|
—
|
|
|
272
|
|
|
289
|
|
|
—
|
|
|
289
|
|
Net debt
|
$
|
10,568
|
|
|
$
|
3,346
|
|
|
$
|
13,914
|
|
|
$
|
9,561
|
|
|
$
|
5,519
|
|
|
$
|
15,080
|
|
(a)
|
Under recent
accounting guidance issued by the Financial Accounting Standards
Board, effective January 1, 2016 and applied retrospectively,
certain debt issue costs are required to be reported as a deduction
from the carrying amount of the related debt obligation.
Previously these costs were reported as an asset. Management
believes that eliminating the effects that these costs have on debt
will more accurately reflect our net debt position.
|
Supplemental
Schedule VI (continued)
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATIONS OF
GAAP TO NON-GAAP MEASURES - DEBT, REVENUE,
|
DEPRECIATION AND
KEY METRICS
|
Unaudited
|
|
TOTAL RPD, VEHICLE
UTILIZATION, REVENUE PER AVAILABLE CAR DAY AND NET DEPRECIATION PER
UNIT PER MONTH
|
|
|
U.S. Rental
Car
|
|
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
|
Six Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
($In millions, except
as noted)
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,584
|
|
|
$
|
1,615
|
|
|
|
|
|
$
|
2,990
|
|
|
$
|
3,135
|
|
|
|
|
Ancillary retail
vehicle sales revenue
|
(18)
|
|
|
(13)
|
|
|
|
|
|
$
|
(37)
|
|
|
$
|
(25)
|
|
|
|
|
Total rental
revenue
|
$
|
1,566
|
|
|
$
|
1,602
|
|
|
|
|
|
$
|
2,953
|
|
|
$
|
3,110
|
|
|
|
|
Transaction days (in
thousands)
|
37,190
|
|
|
34,977
|
|
|
|
|
|
69,932
|
|
|
67,014
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
42.11
|
|
|
$
|
45.80
|
|
|
(8)%
|
|
|
|
$
|
42.23
|
|
|
$
|
46.41
|
|
|
(9)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
37,190
|
|
|
34,977
|
|
|
|
|
|
69,932
|
|
|
67,014
|
|
|
|
|
Average vehicles
|
500,000
|
|
|
511,700
|
|
|
|
|
|
480,100
|
|
|
500,500
|
|
|
|
|
Number of days in
period
|
91
|
|
|
91
|
|
|
|
|
|
182
|
|
|
181
|
|
|
|
|
Available vehicle
days (in thousands)
|
45,500
|
|
|
46,565
|
|
|
|
|
|
87,378
|
|
|
90,591
|
|
|
|
|
Vehicle
utilization(a)
|
82
|
%
|
|
75
|
%
|
|
700
|
|
bps
|
|
80
|
%
|
|
74
|
%
|
|
600
|
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Per
Available Car Day
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total rental
revenue
|
$
|
1,566
|
|
|
$
|
1,602
|
|
|
|
|
|
$
|
2,953
|
|
|
$
|
3,110
|
|
|
|
|
Available car days
(in thousands)
|
45,500
|
|
|
46,565
|
|
|
|
|
|
87,378
|
|
|
90,591
|
|
|
|
|
Revenue per available
car day (in whole
dollars)
|
$
|
34.42
|
|
|
$
|
34.40
|
|
|
—
|
%
|
|
|
$
|
33.80
|
|
|
$
|
34.33
|
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Depreciation
Per Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and
lease charges, net
|
$
|
417
|
|
|
$
|
380
|
|
|
|
|
|
$
|
836
|
|
|
$
|
801
|
|
|
|
|
Average
vehicles
|
500,000
|
|
|
511,700
|
|
|
|
|
|
480,100
|
|
|
500,500
|
|
|
|
|
Depreciation of
revenue earning vehicles and
lease charges, net divided by average
vehicles (in whole dollars)
|
$
|
834
|
|
|
$
|
743
|
|
|
|
|
|
$
|
1,741
|
|
|
$
|
1,600
|
|
|
|
|
Number of months in
period
|
3
|
|
|
3
|
|
|
|
|
|
6
|
|
|
6
|
|
|
|
|
Net depreciation per
unit per month (in whole
dollars)
|
$
|
278
|
|
|
$
|
248
|
|
|
12
|
%
|
|
|
$
|
290
|
|
|
$
|
267
|
|
|
9
|
%
|
|
(a)
|
Calculated as
transaction days divided by available car days.
|
Supplemental
Schedule VI (continued)
|
|
HERTZ GLOBAL
HOLDINGS, INC.
|
RECONCILIATIONS OF
GAAP TO NON-GAAP MEASURES - DEBT, REVENUE,
|
DEPRECIATION AND
KEY METRICS
|
Unaudited
|
|
TOTAL RPD, VEHICLE
UTILIZATION, REVENUE PER AVAILABLE CAR DAY AND NET DEPRECIATION PER
UNIT PER MONTH (continued)
|
|
International
Rental Car
|
|
|
Three Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
|
Six Months
Ended
June 30,
|
|
Percent
Inc/(Dec)
|
|
(in millions, except
as noted)
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
540
|
|
|
$
|
556
|
|
|
|
|
|
$
|
973
|
|
|
$
|
992
|
|
|
|
|
Foreign currency
adjustment(a)
|
(14)
|
|
|
(21)
|
|
|
|
|
|
(13)
|
|
|
(43)
|
|
|
|
|
Total rental
revenue
|
$
|
526
|
|
|
$
|
535
|
|
|
|
|
|
$
|
960
|
|
|
$
|
949
|
|
|
|
|
Transaction days (in
thousands)
|
12,511
|
|
|
12,523
|
|
|
|
|
|
22,613
|
|
|
22,298
|
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
42.04
|
|
|
$
|
42.72
|
|
|
(2)%
|
|
|
|
$
|
42.45
|
|
|
$
|
42.56
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
12,511
|
|
|
12,523
|
|
|
|
|
|
22,613
|
|
|
22,298
|
|
|
|
|
Average vehicles
|
178,600
|
|
|
173,700
|
|
|
|
|
|
163,300
|
|
|
158,800
|
|
|
|
|
Number of days in
period
|
91
|
|
|
91
|
|
|
|
|
|
182
|
|
|
181
|
|
|
|
|
Available car days
(in thousands)
|
16,253
|
|
|
15,807
|
|
|
|
|
|
29,721
|
|
|
28,743
|
|
|
|
|
Vehicle
utilization(b)
|
77
|
%
|
|
79
|
%
|
|
(200)
|
|
bps
|
|
76
|
%
|
|
78
|
%
|
|
(200)
|
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Per
Available Car Day
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total rental
revenue
|
$
|
526
|
|
|
$
|
535
|
|
|
|
|
|
$
|
960
|
|
|
$
|
949
|
|
|
|
|
Available car days
(in thousands)
|
16,253
|
|
|
15,807
|
|
|
|
|
|
29,721
|
|
|
28,743
|
|
|
|
|
Revenue per available
car day (in whole dollars)
|
$
|
32.36
|
|
|
$
|
33.85
|
|
|
(4)%
|
|
|
|
$
|
32.30
|
|
|
$
|
33.02
|
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Depreciation
Per Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and
lease charges, net
|
$
|
98
|
|
|
$
|
101
|
|
|
|
|
|
$
|
184
|
|
|
$
|
196
|
|
|
|
|
Foreign currency
adjustment (a)
|
(2)
|
|
|
(4)
|
|
|
|
|
|
(2)
|
|
|
(8)
|
|
|
|
|
Adjusted depreciation
of revenue earning
vehicles and lease charges, net
|
$
|
96
|
|
|
$
|
97
|
|
|
|
|
|
$
|
182
|
|
|
$
|
188
|
|
|
|
|
Average
vehicles
|
178,600
|
|
|
173,700
|
|
|
|
|
|
163,300
|
|
|
158,800
|
|
|
|
|
Adjusted depreciation
of revenue earning
vehicles and lease charges, net divided by
average vehicles (in whole dollars)
|
$
|
538
|
|
|
$
|
558
|
|
|
|
|
|
$
|
1,115
|
|
|
$
|
1,184
|
|
|
|
|
Number of months in
period
|
3
|
|
|
3
|
|
|
|
|
|
6
|
|
|
$
|
6
|
|
|
|
|
Net depreciation per
unit per month (in whole
dollars)
|
$
|
179
|
|
|
$
|
186
|
|
|
(4)%
|
|
|
|
$
|
186
|
|
|
$
|
197
|
|
|
(6)%
|
|
|
(a)
|
Based on
December 31, 2015 foreign exchange rates.
|
(b)
|
Calculated as
transaction days divided by available car days.
|
Supplemental
Schedule VI (continued)
HERTZ GLOBAL
HOLDINGS, INC.
RECONCILIATIONS OF
GAAP TO NON-GAAP MEASURES - DEBT, REVENUE,
DEPRECIATION AND
KEY METRICS
Unaudited
|
|
TOTAL RPD, VEHICLE
UTILIZATION, REVENUE PER AVAILABLE CAR DAY AND NET DEPRECIATION PER
UNIT PER MONTH (continued)
|
|
Worldwide Rental
Car
|
|
|
Three Months
Ended
June 30,
|
|
Percent
|
|
Six Months
Ended
June 30,
|
|
Percent
|
(in millions, except
as noted)
|
2016
|
|
2015
|
|
Inc/(Dec)
|
|
2016
|
|
2015
|
|
Inc/(Dec)
|
Total
RPD
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
2,124
|
|
|
$
|
2,171
|
|
|
|
|
$
|
3,963
|
|
|
$
|
4,127
|
|
|
|
Ancillary retail
vehicle sales revenue
|
(18)
|
|
|
(13)
|
|
|
|
|
(37)
|
|
|
(25)
|
|
|
|
Foreign currency
adjustment (a)
|
(14)
|
|
|
(21)
|
|
|
|
|
(13)
|
|
|
(43)
|
|
|
|
Total rental
revenue
|
$
|
2,092
|
|
|
$
|
2,137
|
|
|
|
|
$
|
3,913
|
|
|
$
|
4,059
|
|
|
|
Transaction days (in
thousands)
|
49,701
|
|
|
47,500
|
|
|
|
|
92,545
|
|
|
89,312
|
|
|
|
Total RPD (in whole
dollars)
|
$
|
42.09
|
|
|
$
|
44.99
|
|
|
(6)
|
%
|
|
$
|
42.28
|
|
|
$
|
45.45
|
|
|
(7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Utilization
|
|
|
|
|
|
|
|
|
|
|
|
Transaction days (in
thousands)
|
49,701
|
|
|
47,500
|
|
|
|
|
92,545
|
|
|
89,312
|
|
|
|
Average vehicles
|
678,600
|
|
|
685,400
|
|
|
|
|
643,400
|
|
|
659,300
|
|
|
|
Number of days in
period
|
91
|
|
|
91
|
|
|
|
|
182
|
|
|
181
|
|
|
|
Available car days
(in thousands)
|
61,753
|
|
|
62,371
|
|
|
|
|
117,099
|
|
|
119,333
|
|
|
|
Vehicle
utilization(b)
|
80
|
%
|
|
76
|
%
|
|
400 bps
|
|
79
|
%
|
|
75
|
%
|
|
400 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Per
Available Car Day
|
|
|
|
|
|
|
|
|
|
|
|
Total rental
revenue
|
$
|
2,092
|
|
|
$
|
2,137
|
|
|
|
|
$
|
3,913
|
|
|
$
|
4,059
|
|
|
|
Available car days
(in thousands)
|
61,753
|
|
|
62,371
|
|
|
|
|
117,099
|
|
|
119,333
|
|
|
|
Revenue per available
car day (in whole dollars)
|
$
|
33.88
|
|
|
$
|
34.26
|
|
|
(1)
|
%
|
|
$
|
33.42
|
|
|
$
|
34.01
|
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Depreciation
Per Unit Per Month
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
revenue earning vehicles and
lease charges, net
|
$
|
515
|
|
|
$
|
481
|
|
|
|
|
$
|
1,020
|
|
|
$
|
997
|
|
|
|
Foreign currency
adjustment (a)
|
(2)
|
|
|
(4)
|
|
|
|
|
(2)
|
|
|
(8)
|
|
|
|
Adjusted depreciation
of revenue earning
vehicles and lease charges, net
|
$
|
513
|
|
|
$
|
477
|
|
|
|
|
$
|
1,018
|
|
|
$
|
989
|
|
|
|
Average
vehicles
|
678,600
|
|
|
685,400
|
|
|
|
|
643,400
|
|
|
659,300
|
|
|
|
Adjusted depreciation
of revenue earning
vehicles and lease charges, net divided by
average vehicles (in whole dollars)
|
$
|
756
|
|
|
$
|
696
|
|
|
|
|
$
|
1,582
|
|
|
$
|
1,500
|
|
|
|
Number of months in
period
|
3
|
|
|
3
|
|
|
|
|
6
|
|
|
$
|
6
|
|
|
|
Net depreciation per
unit per month (in whole
dollars)
|
$
|
252
|
|
|
$
|
232
|
|
|
9
|
%
|
|
$
|
264
|
|
|
$
|
250
|
|
|
6
|
%
|
|
Note:
Worldwide Rental Car represents U.S. Rental Car and
International Rental Car segment information on a
combined basis and excludes our All Other Operations segment, which
is primarily comprised of our Donlen leasing operations, and
Corporate.
|
|
(a)
Based on December 31, 2015 foreign exchange rates.
(b)
Calculated as transaction days divided by available car
days.
|
NON-GAAP MEASURES AND KEY METRICS - DEFINITIONS AND
USE
Hertz Global is the top-level holding company and The Hertz
Corporation is Hertz Global's 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 the
Company believes that the presentation of the non-GAAP financial
measures included in the Earnings Release provide useful
information regarding the Company's financial condition and results
of operations and additional purposes, if any, for which management
of the Company utilizes the non-GAAP measures.
Adjusted Pre-Tax Income (Loss) and Adjusted Pre-tax
Margin
Adjusted pre-tax income (loss) is calculated as income (loss)
from continuing operations 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 (loss) is important to management
because it allows management to assess operational performance of
our business, exclusive of the items mentioned above. It also
allows management to assess the performance of the entire business
on the same basis as the segment measure of profitability.
Management believes 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. When evaluating the Company's
operating performance, investors should not consider adjusted
pre-tax income (loss) in isolation of, or as a substitute for,
measures of the Company's financial performance, such as net income
(loss) from continuing operations or income (loss) from continuing
operations before income taxes. Adjusted pre-tax margin is adjusted
pre-tax income (loss) divided by total revenues.
Adjusted Net Income (Loss) and Adjusted Net Income (Loss)
Margin
Adjusted net income (loss) is calculated as adjusted pre-tax
income (loss) less a provision for income taxes derived utilizing a
combined statutory rate of 37%. The combined statutory rate is
management's estimate of our long-term tax rate. Adjusted net
income (loss) is important to management and investors because it
represents our operational performance exclusive of the effects of
purchase accounting, debt-related charges, one-time charges and
items that are not operational in nature or comparable to those of
our competitors. Adjusted net income (loss) margin is adjusted net
income divided by total revenues.
Adjusted Earnings (Loss) Per Share ("Adjusted
EPS")
Adjusted earnings (loss) per share is calculated as adjusted net
income divided by the weighted average number of diluted shares
outstanding for the period. Adjusted earnings (loss) per share is
important to management and investors because it represents a
measure of our operational performance exclusive of the effects of
purchase accounting adjustments, debt-related charges, one-time
charges and items that are not operational in nature or comparable
to those of our competitors.
Available Car Days
Available Car Days is calculated as average vehicles multiplied
by the number of days in a period.
Average Vehicles
Average Vehicles is determined using a simple average of the
number of vehicles owned by the Company at the beginning and end of
a given period. Among other things, average vehicles is used to
calculate Vehicle Utilization which represents the portion of our
vehicles that are being utilized to generate revenue.
Earnings Before Interest, Taxes, Depreciation and
Amortization ("Gross EBITDA"), Corporate EBITDA, Adjusted Corporate
EBITDA and Adjusted Corporate EBITDA Margin
Gross EBITDA is defined as net income from continuing operations
before net interest expense, income taxes and depreciation (which
includes lease charges on revenue earning vehicles) and
amortization. Corporate EBITDA, as presented herein, represents
Gross EBITDA as adjusted for vehicle debt interest, vehicle
depreciation and vehicle debt-related charges. Adjusted
Corporate EBITDA, as presented herein, represents Corporate EBITDA
as adjusted for certain other items, as described in more detail in
the accompanying schedules.
Management uses Gross EBITDA, Corporate EBITDA and Adjusted
Corporate EBITDA as operating performance 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, Gross EBITDA enables
management and investors to isolate the effects on profitability of
operating metrics such as revenue, direct vehicle and 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 Adjusted Corporate EBITDA as a supplemental measure because
such information is utilized in the determination of certain
executive compensation.
Gross EBITDA, Corporate EBITDA, Adjusted Corporate EBITDA and
Adjusted Corporate EBITDA Margin are not recognized measurements
under U.S. GAAP. When evaluating our operating performance,
investors should not consider Gross EBITDA, Corporate EBITDA and
Adjusted Corporate EBITDA in isolation of, or as a substitute for,
measures of our financial performance as determined in accordance
with GAAP, such as net income (loss) from continuing
operations or income (loss) from continuing operations before
income taxes.
Adjusted Corporate EBITDA Margin is calculated as the ratio of
Adjusted Corporate EBITDA to total revenues and is used by the
Compensation Committee to determine certain executive compensation,
primarily in the form of PSUs.
Fleet Growth
U.S. and International Rental Car segments fleet growth is
defined as revenue earning vehicles expenditures, net of proceeds
from disposals, plus vehicle depreciation and net vehicle financing
which includes borrowings, repayments and the change in restricted
cash associated with vehicles.
Free Cash Flow
Free cash flow is calculated as net cash provided by operating
activities from continuing operations, excluding depreciation of
revenue earning vehicles, net of revenue earning vehicle and
property and equipment expenditures, net. Free cash flow is
important to management and investors as it provides useful
information about the amount of cash available for acquisitions and
the reduction of non-vehicle debt. When evaluating our liquidity,
investors should not consider Free Cash Flow in isolation of,
or as a substitute for, a measure of our liquidity as determined in
accordance with GAAP, such as net cash provided by operating
activities.
Net Non-Vehicle Debt
Net non-vehicle debt is calculated as non-vehicle debt as
reported on our balance sheet, excluding the impact of unamortized
debt issue costs associated with non-vehicle debt, less cash and
equivalents. Non-vehicle debt consists of the Company's Senior Term
Loan, Senior RCF, Senior Notes, Promissory Notes and certain other
non-vehicle indebtedness of its domestic and foreign
subsidiaries.
Net non-vehicle debt is important to management and investors as
it helps measure the Company's leverage. Net non-vehicle debt also
assists in the evaluation of the Company's ability to service its
non-vehicle debt without reference to the expense associated with
the vehicle debt, which is collateralized by assets not available
to lenders under the non-vehicle debt facilities.
Net Vehicle Debt
Net vehicle debt is calculated as vehicle debt as reported on
our balance sheet, excluding the impact of unamortized debt issue
costs associated with vehicle debt, less cash and equivalents and
restricted cash associated with vehicles. This measure is important
to management, investors and ratings agencies as it helps measure
our leverage with respect to our vehicle debt.
Net Depreciation Per Unit Per Month
Net depreciation per unit per month is calculated by dividing
depreciation of revenue earning vehicles and lease charges, net by
the average vehicles 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.
Management believes eliminating the effect of fluctuations in
foreign currency is useful in analyzing underlying trends. Net
depreciation per unit per month represents the amount of average
depreciation expense and lease charges, net per vehicle per
month.
Restricted Cash Associated with Vehicle Debt (used in the
calculation of Net Vehicle Debt)
Restricted cash associated with vehicle debt is restricted for
the purchase of revenue earning vehicles and other specified uses
under the Company's vehicle debt facilities and its vehicle rental
like-kind exchange program.
Revenue Per Available Car Day ("RACD")
Revenue per available car day is calculated as total revenues
less ancillary revenue associated with retail vehicle sales,
divided by available car days, with all periods adjusted to
eliminate the effect of fluctuations in foreign currency. Our
management believes eliminating the effect of fluctuations in
foreign currency is appropriate so as not to affect the
comparability of underlying trends. This metric is important to our
management and investors as it represents a measurement of the
changes in underlying pricing in the vehicle rental business and
provides a measure of revenue production relative to overall
capacity.
Total Net Debt
Total net debt is calculated as total debt less total cash and
cash equivalents and restricted cash associated with vehicle debt.
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 ancillary revenue
associated with retail vehicle 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 metric is important to our management and investors as
it represents a measurement of the changes in underlying pricing in
the vehicle rental business and encompasses the elements in vehicle
rental pricing that management has the ability to control.
Transaction Days
Transaction days, also known as volume, represent the total
number of 24-hour periods, with any partial period counted as one
transaction day, that vehicles were on rent (the period between
when a rental contract is opened and closed) in a given period.
Thus, it is possible for a vehicle to attain more than one
transaction day in a 24-hour period. Late in the third quarter of
2015, the Company fully integrated the Dollar Thrifty and Hertz
counter systems and as a result aligned the transaction day
calculation in the Hertz system. As a result of this alignment,
Hertz determined that there was an impact to the calculation. Hertz
expects that transaction days for the U.S. Rental Car segment
will increase by approximately 1% prospectively relative to the
historic calculations through the third quarter of 2016.
Vehicle Utilization
Vehicle utilization is calculated by dividing total transaction
days by the available car days.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/hertz-global-holdings-reports-second-quarter-2016-financial-results-300310728.html
SOURCE Hertz Global Holdings, Inc.