ESTERO, Fla., Aug. 2, 2021 /PRNewswire/ — Hertz Global Holdings, Inc. (OTCPK: HTZZ) ("Hertz" or the "Company") announced today that Jennifer Feikin has joined its Board of Directors, effective July 29, 2021. She is an experienced business leader who brings deep expertise in digital technology, innovation and consumer product development.
Ms. Feikin is an independent board member of several American Funds and Capital Group Companies mutual funds. She also serves on the Board of Trustees of The Nature Conservancy of California.
Greg O’Hara, Chairman of the Board said, "We are delighted to welcome Jennifer Feikin to our Board of Directors as we embark on a new and exciting chapter for Hertz. She is an accomplished executive and director with significant experience as a leader in strategic product development and digital innovation for large global companies. We look forward to benefitting from the valuable perspective that she will provide as we remain focused on enhancing value for our customers and shareholders."
Ms. Feikin conceived of the idea for Google Video and both helped drive its product development strategy and led its content team. She also negotiated many of the company’s first and largest search and advertising deals. Prior to that, Ms. Feikin held roles in AOL Time Warner’s strategic development group and in business affairs at Twentieth Century Fox, Fox Searchlight, and Morgan Creek Productions, negotiating major motion picture deals. She began her career as a management consultant focused on financial institutions, telecom and technology at McKinsey & Company.
Ms. Feikin earned her J.D. from Harvard Law School and a B.A. from Duke University.
ABOUT HERTZ The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release contains "forward-looking statements" within the meaning of federal securities laws. Words such as "expect" and "intend" and similar expressions identify forward-looking statements, which include but are not limited to statements related to our positioning. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those in our risk factors that we identify in our most recent annual report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on February 26, 2021, and any updates thereto in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. We caution you not to place undue reliance on our forward-looking statements, which speak only as of their date, and we undertake no obligation to update this information.
ESTERO, Fla., June 30, 2021 /PRNewswire/ — Hertz Global Holdings, Inc. (OTCPK:HTZGQ) ("Hertz" or the "Company") announced the composition of its new Board of Directors whose term is effective with the Company’s successful completion of its restructuring and emergence from Chapter 11 today. The new Board will initially include eight members with up to three additional directors to be named in the future. The eight members named include Certares founder Michael Gregory O’Hara as Chairperson; Knighthead Capital co-founder Thomas Wagner as Vice Chairperson; Certares Senior Managing Director Colin Farmer; Knighthead Partner Andrew Shannahan; Apollo Partner Christopher Lahoud; TPG Capital Senior Advisor and former CEO of Ford Motor Company Mark Fields; current Hertz Board member Vincent Intrieri; and Hertz President and CEO Paul Stone.
Paul Stone said, "We are excited to welcome our new Board members and benefit from their collective expertise, leadership and oversight at this pivotal time for Hertz and the travel industry. These executives bring extensive financial, operational and market experience that will be invaluable in the next chapter for Hertz. I also want to express our company’s appreciation to our retiring Board members for their service and tireless efforts, particularly throughout the past year and a half of the pandemic and our successful restructuring."
Hertz New Board Member Bios
Michael Gregory (Greg) O’Hara, Chairperson; Founder and Senior Managing Director of Certares, a firm that invests in the travel, tourism and hospitality sectors, and co-founder of GO Acquisition Corp. He is the Head of Certares’ Investment Committee and a member of the Management Committee. Prior to forming Certares, he served as Chief Investment Officer of JPMorgan Chase’s Special Investments Group ("JPM SIG"). Prior to this role at JPM SIG, Greg was a Managing Director of One Equity Partners ("OEP"), the private equity arm of JPMorgan. Before joining OEP in 2005, he served as Executive Vice President of Worldspan and was a member of its Board of Directors. Greg is the Executive Chairman of American Express Global Business Travel and Vice Chairman of Liberty TripAdvisor Holdings and serves on the Boards of Directors of Liberty TripAdvisor Holdings and Tripadvisor, The Innocence Project, World Travel & Tourism Council and Certares Holdings.
Thomas (Tom) Wagner, Vice Chairperson; Co-Founder and Managing Member of Knighthead Capital Management, LLC, an event driven and deep value focused SEC registered investment advisor that specializes in investing in companies that need financial and operational restructuring. His deep financial experience also includes serving as Managing Director at Goldman Sachs in Capital Structure Franchise Trading, as well as roles at Credit Suisse First Boston and Ernst & Young, LLP. Tom is currently Board Chairman of Knighthead Annuity & Life Assurance Company and on the Board of Trustees of Villanova University, the National Advisory Board for Youth Inc., and the National Leadership Council for the Navy SEAL Foundation. He is the Co-Portfolio Manager of all funds and accounts managed by Knighthead Capital Management, LLC.
Colin Farmer, Senior Managing Director and the Head of the Management Committee of Certares. Previously, he was Managing Director of One Equity Partners. Prior to that, he was a Principal at Harvest Partners, a middle market private equity firm, and an Analyst at Robertson Stephens & Company, a middle market investment bank. Colin serves on the Boards of Internova Travel Group, AmaWaterways, Guardian Alarm, Mystic Invest and Certares Holdings, and is a member of Certares’ Investment Committee.
Andrew Shannahan, Head of Research and Partner at Knighthead Capital Management, LLC, an event driven and deep value focused SEC registered investment advisor that specializes in investing in companies that need financial and operational restructuring. Andrew brings oversight to the Knighthead research team through his investment expertise gained during thirteen years at Knighthead, leading complex investment situations. Prior to joining Knighthead in 2008, he spent six years as a senior research analyst for Litespeed Partners, an event-driven hedge fund. Andrew serves as a member of the Investment Committee of certain funds managed by Knighthead Capital Management, LLC.
Christopher Lahoud, Partner in Credit at Apollo Global Management. Prior to joining Apollo, he was the Head of the Distressed Product Group at Deutsche Bank managing a team of 15 professionals. He began his career with Citigroup in 2006 as a credit trader and currently serves on the Board of Directors of Moxe Health.
Mark Fields, Senior Advisor at TPG Capital and former President and CEO of Ford Motor Company. He held senior leadership roles at the company, including Chief Operating Officer, Executive Vice President & President of the Americas, Executive Vice President and Chief Executive Officer of Premier Automotive Group and Ford Europe, Chairman and Chief Executive Officer of the Premier Automotive Group, and President and Chief Executive Officer of Mazda Motor Corporation. He is the Lead Independent Director of Tanium and serves on Qualcomm’s Board of Directors. He has served on the Boards of Ford, IBM and Mazda, as well as four private companies on behalf of TPG Capital.
Vincent Intrieri, CEO and founder of VDA Capital Management LLC and has served as a director of Hertz Global Holdings since June 2016 and Hertz since September 2014. Previously, he was with Icahn-related entities from October 1998 to December 2016 in various investment-related capacities, including as Senior Managing Director of Icahn Capital LP, Senior Managing Director of Icahn Onshore LP, and Icahn Offshore LP. Prior to joining Icahn Capital, Vincent was a partner at Arthur Andersen LLP. He is the co-lead director of Navistar International and a director of Transocean Limited. Previously, he served as a director of Energen Corporation, Conduent Incorporated, Chesapeake Energy, Forest Laboratories Inc, CVR Energy Inc, Federal-Mogul Corporation, and various other public companies.
Paul Stone, President and Chief Executive Officer of Hertz Global Holdings, Inc. Named CEO in May 2020, Paul has led the Company through its successful operational and financial restructuring. He joined Hertz in March 2018 as Executive Vice President and Chief Retail Operations Officer for North America. Previously, he was Chief Retail Officer at Cabela’s Inc. He spent the first 28 years of his career in various leadership roles at Walmart Inc.
ABOUT HERTZ
The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of federal securities laws. Words such as "expect" and "intend" and similar expressions identify forward-looking statements, which include but are not limited to statements related to our positioning. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those in our risk factors that we identify in our most recent annual report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on February 26, 2021, and any updates thereto in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. We caution you not to place undue reliance on our forward-looking statements, which speak only as of their date, and we undertake no obligation to update this information.
ESTERO, Fla., June 30, 2021 /PRNewswire/ — Hertz Global Holdings, Inc. (OTCPK:HTZGQ) ("Hertz" or the "Company") today announced that it has successfully completed its Chapter 11 restructuring process and has emerged as a financially and operationally stronger company that is well-positioned for the future. Hertz’s Plan of Reorganization was confirmed by the Bankruptcy Court on June 10, 2021. In doing so, Judge Mary Walrath described the outcome as a "fantastic result" that "surpasses any result that I’ve seen in any Chapter 11 case that I’ve faced in my 20-plus years."
With over $5.9 billion of new equity capital being provided by Hertz’s new investor group, led by Knighthead Capital Management LLC, Certares Opportunities LLC, and certain funds managed by affiliates of Apollo Capital Management, L.P., Hertz has reduced its corporate debt by nearly 80% and significantly enhanced its liquidity to fund operations and future growth. Specifically, Hertz has eliminated nearly $5.0 billion of debt, including all of Hertz Europe’s corporate debt. In addition, Hertz has emerged with a new $2.8 billion exit credit facility (including an undrawn $1.3 billion revolving credit facility) and a $7.0 billion asset-backed vehicle financing facility, each having terms the Company views as extremely favorable. The aggregate interest rate on the Company’s new ABS financing is less than 2.0%.
Henry Keizer, Chairman of Hertz’s outgoing Board of Directors, said: "Faced with the epic and unprecedented challenges presented by the COVID-19 pandemic, and unfazed by early leadership changes, we stayed focused on stabilizing the business and seizing opportunities to mitigate losses and create value for our stakeholders. When the economy began to show signs of recovery earlier this year, we were perfectly positioned to drive a competitive process that would maximize recoveries. The result – paying our nearly $19 billion of creditors in full and returning substantial value to our shareholders – is remarkable."
In tandem with its financial restructuring, Hertz also executed on a series of operational initiatives to create a more focused and profitable enterprise. Among these actions, Hertz launched a cost reduction program that is generating significant savings, right-sized its fleet across both its U.S. and International businesses, optimized its location footprint, negotiated cost reductions and concessions at certain airport locations, and completed the sale of its Donlen fleet leasing business for $891 million in cash. In addition, Hertz focused on meeting changing demand through its portfolio of neighborhood rental locations as a complement to its airport business. These efforts, combined with a sharp increase in car rentals in the U.S. and the continued strength in used car sales, are putting the Company on track for strong financial results in 2021.
Paul Stone, Hertz’s President and Chief Executive Officer, said: "Today marks a significant milestone in Hertz’s 103-year history. Through the relentless efforts of our Board and team, we are moving forward in an incredibly strong position with an exciting road ahead of us. Now with a solid financial foundation, a leaner, more efficient operating model, and ample liquidity to invest in our business, Hertz has outstanding potential to drive long-term profitable growth. Both in the U.S. and around the world, we are poised to capitalize on our industry leadership, deep operational expertise and iconic global brand."
He continued: "I am tremendously proud of all we have accomplished and confident that this is only the beginning in delivering even greater value to our stakeholders. Thank you to the Hertz team around the world and Board of Directors, to our new investor group, who bring extensive industry experience, and to our customers, franchisees, partners and shareholders for your confidence and support during this process. We look forward to a bright future as a vibrant part of the rebounding travel industry and as a trusted partner for our customers’ mobility needs."
Hertz filed for Chapter 11 for its U.S. operations on May 22, 2020 following the onset of the COVID-19 pandemic, which had a severe and dramatic effect on travel demand. Hertz’s principal international operating regions including Europe, Australia and New Zealand were not included in the U.S. Chapter 11 proceedings.
Following its successful restructuring process, Hertz’s creditors will receive payment in cash in full and existing shareholders will receive more than $1 billion of value. Shares of Hertz common stock will continue to be publicly traded on the over-the-counter (OTC) market, until such time as the Company relists on a national securities exchange. The new ticker symbols effective July 1 will be HTZZ for Hertz common stock and HTZZW for warrants.
For Court documents or filings, please visit https://restructuring.primeclerk.com/hertz or call (877) 428-4661 or (929) 955-3421. White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting is serving as financial advisor.
ABOUT HERTZ The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release contains "forward-looking statements" within the meaning of federal securities laws. Words such as "expect" and "intend" and similar expressions identify forward-looking statements, which include but are not limited to statements related to our liquidity, financing sources and operations and expectations for travel. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those in our risk factors that we identify in our most recent annual report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on February 26, 2021, and any updates thereto in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. We caution you not to place undue reliance on our forward-looking statements, which speak only as of their date, and we undertake no obligation to update this information.
ESTERO, Fla., June 10, 2021 /PRNewswire/ — Hertz Global Holdings, Inc. (OTCPK:HTZGQ) ("Hertz" or the "Company") today announced that the Bankruptcy Court confirmed the Company’s Plan of Reorganization (the "Plan"). The Plan unimpairs all classes of creditors (who are legally deemed to have accepted it) and was approved by more than 97% of voting shareholders. The Court’s approval clears the way for Hertz to emerge from Chapter 11 by the end of June 2021.
As a result of its restructuring efforts, Hertz will emerge from Chapter 11 with a substantially stronger balance sheet and greater financial flexibility than it had prior to the onset of the COVID-19 pandemic, which forced Hertz to file for Chapter 11 relief in May 2020. Hertz’s Plan will eliminate over $5 billion of debt, including all of Hertz Europe’s corporate debt, and will provide more than $2.2 billion of global liquidity to the reorganized Company. Hertz also will emerge with (i) a new $2.8 billion exit credit facility consisting of at least $1.3 billion of term loans and a revolving loan facility, and (ii) an approximately $7 billion of asset-backed vehicle financing facility, each on favorable terms. The Plan provides for the payment in cash in full to all creditors and for existing shareholders to receive more than $1 billion of value.
Paul Stone, Hertz’s President and Chief Executive Officer, said: "With the Court’s approval of our Plan today and a committed new investor group, we are poised to exit Chapter 11 by the end of this month as a well-capitalized and even more competitive company, with the flexibility and resources to pursue exciting new growth opportunities. I want to thank our employees and teams around the world for their hard work, which has enabled us to continue taking great care of our customers. As the demand for rental cars continues to rise, we look forward to helping our customers travel confidently and safely as they get back out on the road, and to successfully building on Hertz’s more than 100-year history of quality service as one of the world’s best known brands."
For Court documents or filings, please visit https://restructuring.primeclerk.com/hertz or call (877) 428-4661 or (929) 955-3421. White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting is serving as financial advisor.
ABOUT HERTZ The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release contains "forward-looking statements" within the meaning of federal securities laws. Words such as "expect" and "intend" and similar expressions identify forward-looking statements, which include but are not limited to statements related to our liquidity and potential financing sources; the bankruptcy process; our ability to obtain approval from the Bankruptcy Court with respect to motions or other requests made to the Bankruptcy Court throughout the course of the Chapter 11 Cases; the effects of Chapter 11 on the interests of various constituents; and the ability to negotiate, develop, confirm and consummate a plan of reorganization. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those in our risk factors that we identify in our most recent annual report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on February 26, 2021, and any updates thereto in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. We caution you not to place undue reliance on our forward-looking statements, which speak only as of their date, and we undertake no obligation to update this information.
ESTERO, Fla., May 24, 2021 /PRNewswire/ — In honor of National Road Trip Day on May 28, Hertz surveyed more than 1,500 Americans to determine how and when they plan to put the pedal to the metal toward their next vacation.
The Great American Road Trip is Back More than 80% of people surveyed say they plan to take a road trip this summer and 86% agree they are more likely or as likely to hit the road compared to previous years.
Hertz Reveals Latest U.S. Summer Travel Insights for National Road Trip Day
Car Culture Overwhelmingly, 65% said that a rental car was the mode of transportation that made them feel the safest. While 45% of participants noted they would be flying somewhere first to start their road trip, nearly 29% of those surveyed said they prefer rental cars over taking their personal vehicle to avoid putting extra miles on their car. Others liked the idea of parking the minivan and renting a shiny convertible for the week.
"Our data shows summer road trips are shaping up to be more popular than ever before in 2021 and just in time for National Road Trip day, which kicks off the summer road trip season," said Laura Smith, Senior Vice President of Sales, Marketing and Customer Experience at Hertz. "People are ready to get out and make new memories, and we’re here to help them travel confidently with a safe, fast and easy rental experience."
Hit the Road Jack (in June!) Fifty-two percent of respondents plan to resume travel as early as June. That being said, respondents made it clear that a city/state’s COVID-19 restrictions remain a factor in the decision to travel there and face masks will be the top must-have item to pack this year.
In Search of Southern Hospitality While international travel will open up for travelers, a recent TripAdvisor study shows 74% of Americans that plan to travel this summer will stay within the U.S. Among the 81% of people surveyed who said they were taking a trip this summer, 42% are planning to travel to the South or Southeast, with the West coming in second at 32% followed by the Northeast at 24%. National parks or local attractions and beaches nearly tied in a following question.
The Evolution of Entertainment Over half of road trippers surveyed played I Spy, counted license plates or got semi-trucks to honk as their top entertainment choice for road trips as a kid. Now, instead of playing games, they are cranking up the tunes with 70% of respondents saying they listen to music via the radio or a streaming app as their top entertainment option.
Family First Seventy-one percent of respondents said road trips would not be complete without their spouse or significant other as their ideal companion. Nearly half of survey participants noted their summer road trip plans would take them to visit family, with an additional 35% saying they cannot wait to reconnect with friends when they’re ready to travel again, and Hertz is making that possible.
Maximize Every Summer Road Hertz is helping make the great American summer road trip possible this year with thousands of airport and convenient neighborhood locations across the country. In order to get the most out of your road trip this summer, the company is sharing its top tips for renting a car, including:
Rent from a Reputable Company: When choosing a rental car company, it’s best to rent from a reputable company you trust. Hertz pioneered the car rental industry more than 100 years ago and is one of the most recognized brands in the world. Hertz also has earned the No. 1 ranking for Customer Satisifaction in the J.D. Power North America Rental Car Customer Satisfaction Study for the past two consecutive years.
Plan Your Trip Ahead of Time: Reserve your rental car when making other travel arrangements like air and hotel. Rates are often more expensive the closer you get to time of renting so book early. Pre-paying for a car rental can also provide a savings of up to 20% at Hertz.
Consider Booking Outside of High-Volume Locations: If you need to book last minute and have flexibility, you may find car rental availability outside of high-volume areas during busy seasonal or holiday travel periods. Hertz has thousands of convenient locations in neighborhoods across the U.S., which offer a free pick-up service.
Join a Car Rental Loyalty Program: Join Hertz Gold Plus Rewards for free and enjoy special benefits that make your rental faster, easier and more rewarding. As a Gold Plus Rewards member, you can skip the counter at more than 50 airports worldwide and earn exclusive benefits, points toward free rentals, vehicle upgrades and more.
Choose the Right Car: Choose a car type based on the purpose of your trip and number of travelers, as well as accompanying luggage. At locations with Hertz Ultimate Choice, you can choose the exact car you want to drive from the car class you reserved or upgrade to a different one.
Familiarize Yourself with the Car: Before leaving the lot, find and operate all controls, know where USB ports are located, connect any cell phones to Bluetooth and turn on the radio for the upcoming drive.
Plan Your Return: Become familiar with the fueling options available at pick-up before leaving the rental lot. Hertz offers several convenient fueling options so you don’t have to worry about refueling the vehicle. Customers can also get on their way faster with Hertz’s Express Return service by simply providing a valid email address when booking or at the time of pickup.
To learn more and start planning a summer road trip, visit Hertz.com.
Hertz received the highest score in the J.D. Power 2019-2020 North America Rental Car Satisfaction Study of customers’ satisfaction with airport rental car experience. Visit jdpower.com/awards for more details
About Hertz Hertz, one of the most recognized brands in the world and currently ranked #1 in Customer Satisfaction by J.D. Power, has a long-standing legacy of providing a fast and easy experience designed to make every journey special. It starts with top-rated vehicles to fit every traveler’s needs, delivered with a caring touch and personalized services including its award-winning Hertz Gold Plus Rewards loyalty program, Ultimate Choice, Mobile Wi-Fi, and more. Wherever and whenever you need to go, at Hertz, we’re here to get you there. To learn more or reserve a vehicle, visit Hertz.com.
Hertz pioneered the car rental industry more than 100 years ago and today is owned by Hertz Global Holdings, Inc. which includes Dollar and Thrifty vehicle rental brands.
ESTERO, Fla., May 12, 2021 /PRNewswire/ — Hertz Global Holdings, Inc. (OTCPK:HTZGQ) ("Hertz" or the "Company") today announced that, following the completion of the auction previously approved by the Court in its Chapter 11 case, Hertz has selected and approved a revised proposal from certain funds and accounts managed by affiliates of each of Knighthead Capital Management LLC ("Knighthead"), Certares Opportunities LLC ("Certares") and Apollo Capital Management, LP ("Apollo" and together with Knighthead and Certares, the "KHCA Group") to provide the equity capital required to fund Hertz’s revised Plan of Reorganization and exit from Chapter 11. The proposed agreements with the KHCA Group, as well as any necessary modifications to the Plan and solicitation procedures, are subject to the approval of the Bankruptcy Court at a hearing scheduled for Friday, May 14, 2021.
Under the revised proposal, Hertz’s Chapter 11 plan will be funded through direct common stock investments from the KHCA Group and certain co-investors aggregating $2.781 billion, the issuance of $1.5 billion of new preferred stock to Apollo, and a fully backstopped rights offering to the Company’s existing shareholders to purchase $1.635 billion of additional common stock. The revised Plan would provide for the payment in cash in full of all administrative, priority, secured, and unsecured claims in the Chapter 11 cases and would deliver significant value to the Company’s existing shareholders including:
$239 million of cash;
common stock representing 3% of the shares of the reorganized Company (subject to dilution from warrants and equity issued under a new management incentive plan); and
30-year warrants for 18% of the common stock of the reorganized Company (subject to dilution by a new management incentive plan) with a strike price based on a total equity value of $6.5 billion, or the opportunity, for eligible shareholders, to subscribe for shares of common stock in the $1.635 billion rights offering at Plan equity value.
As previously announced, two investor groups have been competing to fund Hertz’s Chapter 11 exit. On April 21, the Bankruptcy Court overseeing Hertz’s Chapter 11 cases authorized Hertz to begin soliciting votes on its Chapter 11 plan and approved a group consisting of Centerbridge Partners L.P., Warburg Pincus LLC, Dundon Capital Partners, LLC and an ad hoc group of the Company’s unsecured noteholders (collectively, the "CWD Group") as the sponsors of the Plan. When it became apparent that the competition to sponsor the Company’s Plan would continue, the Company sought and obtained Court approval of bidding procedures and an auction process to ensure that it received the highest and best sponsorship proposal within a timeframe that would permit the Company to continue working toward a planned exit from Chapter 11 by June 30, 2021. A robust competition between the CWD Group and the KHCA Group ensued, concluding with the selection of the revised KHCA Group’s proposal late yesterday following the auction.
As with the CWD Group’s previous proposal, the KHCA Group’s proposal would eliminate approximately $5.0 billion of corporate debt (including the complete elimination of all corporate debt on Hertz’s European business) and provide the Company with over $2.2 billion of global liquidity. The KHCA Group’s proposal would also replace the bridge financing previously provided by the CWD Group to fund the Company’s European fleet needs prior to the Plan’s consummation. The debt funding commitments for Hertz’s Chapter 11 plan, which were approved by the Court earlier this week, will remain in place under the KHCA Proposal.
Paul Stone, Hertz’s President and Chief Executive Officer, commented, "We are very pleased that our Plan process produced such a tremendous result for our creditors and shareholders. We appreciate the strong interest in Hertz from the competing Plan sponsors and thank them for their active engagement, which provided us with excellent options for our exit from Chapter 11. We look forward to working with the KHCA Group to complete the remaining steps in our restructuring and best position Hertz for the future.
"Our proposed Plan provides a robust recovery and excellent value for all of our stakeholders and enables Hertz to emerge as a much stronger, more competitive company," continued Mr. Stone. "During our restructuring, we have made material improvements in our operational efficiency and have built added cost discipline into our business. Now, we look forward to implementing our Chapter 11 plan, which will substantially strengthen our financial structure by eliminating 79% of our corporate debt. We are well-positioned to take advantage of increasing global travel demand and new long-term growth opportunities. We are excited about Hertz’s future and the benefits for all of our stakeholders – including our employees and customers as well as our investors, franchisees and business partners."
The proposed deal with the KHCA Group is reflected in definitive documents executed by the Plan sponsors, including (1) an Equity Purchase and Commitment Agreement, (2) a Plan Support Agreement, (3) a Bridge Financing Commitment for Hertz International Ltd., and (4) an Amended Chapter 11 Plan of Reorganization. These documents, together with an amended Disclosure Statement, will be filed with the Bankruptcy Court later today. If the Bankruptcy Court approves the revised agreements with the KHCA Group at the hearing scheduled for May 14, the Company would terminate its agreements with its existing Plan sponsorship group (which remain in effect) and execute the new agreements with the KHCA Group.
A Court hearing to confirm Hertz’s Plan of Reorganization is scheduled for June 10.
For Court documents or filings, please visit https://restructuring.primeclerk.com/hertz or call (877) 428-4661 (toll-free in the U.S.) or (929) 955-3421 (from outside the U.S.). White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting is serving as financial advisor.
ABOUT HERTZ The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release contains "forward-looking statements" within the meaning of federal securities laws. Words such as "expect" and "intend" and similar expressions identify forward-looking statements, which include but are not limited to statements related to our liquidity and potential financing sources; the bankruptcy process; our ability to obtain approval from the Bankruptcy Court with respect to motions or other requests made to the Bankruptcy Court throughout the course of the Chapter 11 Cases; the effects of Chapter 11 on the interests of various constituents; and the ability to negotiate, develop, confirm and consummate a plan of reorganization. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those in our risk factors that we identify in our most recent annual report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on February 26, 2021, and any updates thereto in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. We caution you not to place undue reliance on our forward-looking statements, which speak only as of their date, and we undertake no obligation to update this information.
ESTERO, Fla., May 7, 2021 /PRNewswire/ — Hertz Global Holdings, Inc. (OTCPK:HTZGQ) ("Hertz Global" or the "Company") today reported results for its first quarter 2021 with revenue of $1.3 billion, net income attributable to the Company of $190 million and Adjusted Corporate EBITDA of $2 million. Liquidity at the end of the first quarter was $1.1 billion.
"This quarter we realized the first effects of the leisure travel rebound and capitalized on strong demand-driven pricing in destination markets that exceeded 2019 levels," said Paul Stone, Hertz Global’s President and Chief Executive Officer. "We’re continuing to see improved demand and are optimistic about a sustained recovery. We’re actively replenishing our fleet, despite the constraints of the global semiconductor shortage and its impact on the automotive supply chain. Most importantly, I’m exceptionally proud of our employees who are working tirelessly to serve our customers as they’re ready to be on the road again."
During the quarter, the Company closed on the sale of substantially all of the assets of its Donlen vehicle leasing and fleet management business to Athene Holding Ltd for $891 million in cash proceeds, subject to certain adjustments.
"Notably, we are also making great progress towards concluding the bankruptcy process," continues Stone. "We are actively engaged with potential plan sponsor groups which we anticipate will deliver a robust recovery for creditors and shareholders. We remain on track to emerge in June and are poised to do so with more efficient operations and a stronger balance sheet for the future."
U.S. RENTAL CAR ("U.S. RAC") SUMMARY
U.S. RAC
Three Months Ended
March 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2021
2020
Total revenues
$
946
$
1,381
(32)
%
Adjusted EBITDA
$
24
$
(199)
NM
Adjusted EBITDA Margin
3
%
(14)
%
Average Vehicles (in whole units)
292,154
518,580
(44)
%
Vehicle Utilization
75
%
67
%
Transaction Days (in thousands)
19,776
31,564
(37)
%
Total RPD (in whole dollars)
$
47.63
$
42.74
11
%
Total RPU Per Month (in whole dollars)
$
1,075
$
867
24
%
Depreciation Per Unit Per Month (in whole dollars)
$
234
$
298
(21)
%
NM – Not meaningful
U.S. RAC revenue declined 32% period over period due to lower volume, partially offset by an 11% increase in Total RPD. Strong pricing during the quarter was driven by tighter fleet levels combined with upward trending leisure travel.
Depreciation Per Unit Per Month decreased 21%, driven by strength in market residual values.
Direct operating and selling, general and administration expenses declined 33% year over year as the Company continued to drive productivity, aligning costs with demand.
Despite revenue headwinds from the pandemic, U.S. RAC Adjusted EBITDA margin was at its highest first quarter level since 2015.
INTERNATIONAL RENTAL CAR ("INTERNATIONAL RAC") SUMMARY
International RAC
Three Months Ended
March 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2021
2020
Total revenues
$
207
$
368
(44)
%
Adjusted EBITDA
$
(6)
$
(45)
(86)
%
Adjusted EBITDA Margin
(3)
%
(12)
%
Average Vehicles (in whole units)
75,446
147,987
(49)
%
Vehicle Utilization
72
%
66
%
Transaction Days (in thousands)
4,872
8,863
(45)
%
Total RPD (in whole dollars)
$
42.49
$
45.57
(7)
%
Total RPU Per Month (in whole dollars)
$
915
$
910
1
%
Depreciation Per Unit Per Month (in whole dollars)
$
168
$
220
(24)
%
Total International RAC revenues were down 49% year over year on a constant currency basis. A mix shift in volume from airport rentals to longer-length, lower-priced off-airport rentals contributed to a 7% decrease in Total RPD versus first quarter 2020.
Depreciation Per Unit Per Month decreased 24%, driven by strong residual values across key markets.
Direct operating and selling, general and administration expenses declined 43% year over year as the Company continued to drive productivity, aligning costs with demand.
Adjusted EBITDA loss of $6 million reflects an impressive 86% improvement year over year.
ALL OTHER OPERATIONS SUMMARY
All Other Operations
Three Months Ended
March 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2021
2020
Total revenues
$
136
$
174
(22)
%
Adjusted EBITDA
$
13
$
24
(46)
%
Adjusted EBITDA Margin
10
%
14
%
Average Vehicles (in whole units) – Donlen
182,362
201,364
(9)
%
All Other Operations primarily is comprised of the Company’s Donlen leasing and fleet management operations. Revenue and Adjusted EBITDA declines were driven by lower leasing volume year over year.
On March 30, 2021, the Company sold substantially all of the assets of its Donlen business to Athene Holding Ltd. and recognized a pre-tax gain in its corporate operations of $392 million .
RESULTS OF THE HERTZ CORPORATION
The GAAP and non-GAAP profitability metrics for Hertz Global’s operating subsidiary, The Hertz Corporation ("Hertz"), are materially the same as those for Hertz Global for the first quarter 2021 and 2020.
FINANCIAL REORGANIZATION
As previously announced, on May 22, 2020, Hertz Global and Hertz (together, the "Companies") and certain of their direct and indirect subsidiaries in the United States and Canada filed voluntary petitions for relief under chapter 11 of the U.S. Bankruptcy Code (the "Reorganization").
The Reorganization provides the time to put in place a new, stronger financial foundation to move successfully through the COVID-19 pandemic and to better position the Companies for the future. Throughout the Reorganization process, all of Hertz’s businesses globally, including its Hertz, Dollar, Thrifty, Firefly, and Hertz Car Sales, are open and serving customers. All reservations, promotional offers, vouchers, and customer and loyalty programs, including rewards points, are expected to continue as usual.
Information related to the Reorganization is included in the Hertz Global and Hertz Form 10-Qs for the quarterly period ended March 31, 2021 filed with the Securities and Exchange Commission ("SEC") and on the Hertz website, IR.Hertz.com. Additional information, including access to documents filed with the Bankruptcy Court, is also available online at https://restructuring.primeclerk.com/hertz, a website administered by Prime Clerk, LLC, a third-party bankruptcy claims and noticing agent.
SELECTED FINANCIAL DATA, SUPPLEMENTAL SCHEDULES, NON-GAAP MEASURES AND DEFINITIONS
Following is selected financial data of Hertz Global. Also included are Supplemental Schedules, which are provided to present segment results, and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules, the Company provides definitions for terminology used throughout this earnings release and provides the usefulness of non-GAAP measures to investors and additional purposes for which management uses such measures.
ABOUT HERTZ
The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.
Certain statements contained or incorporated by reference in this release, and in related comments by the Company’s management, include "forward-looking statements." Forward-looking statements include information concerning the Company’s liquidity and its possible or assumed future results of operations, including descriptions of its business strategies. These statements often include words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts" or similar expressions. These statements are based on certain assumptions that the Company has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate in these circumstances. The Company believes these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and the Company’s actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent reports on Forms 10-K, 10-Q and 8-K filed or furnished to the SEC. Among other items, such factors could include: the Company’s ability to navigate the Chapter 11 process, including obtaining Bankruptcy Court approval for certain actions, complying with and operating under the requirements and constraints of the Bankruptcy Code, developing, funding and executing the Company’s business plan and continuing as a going concern; the actions and decisions of creditors, regulators and other third parties that have an interest in the Chapter 11 cases; our ability to effectuate the Chapter 11 plan of reorganization described in the plan support agreement with certain of our creditors; the impact of the Company’s delisting from the New York Stock Exchange on the Company’s stockholders; the value of the Company’s common stock due to the Chapter 11 process or its treatment under the Fourth Modified Second Amended Joint Chapter 11 Plan of Reorganization of the Debtors filed on April 21, 2021; levels of travel demand, particularly with respect to business and leisure travel in the U.S. and in global markets; the length and severity of COVID-19 and the impact on the Company’s vehicle rental business as a result of travel restrictions and business closures or disruptions; the impact of COVID-19 and actions taken in response to the pandemic on global and regional economies and economic factors; general economic uncertainty and the pace of economic recovery, including in key global markets, when COVID-19 subsides; the Company’s ability to successfully restructure the Company’s substantial indebtedness or raise additional capital; the Company’s post-bankruptcy capital structure; the Company’s ability to remediate the material weaknesses in our internal controls over financial reporting; the Company’s ability to maintain an effective employee retention and talent management strategy and resulting changes in personnel and employee relations; the recoverability of the Company’s goodwill and indefinite-lived intangible assets when performing impairment analysis; the Company’s ability to dispose of vehicles in the used-vehicle market, use the proceeds of such sales to acquire new vehicles and to reduce exposure to residual risk; actions creditors may take with respect to the vehicles used in the rental car operations; significant changes in the competitive environment and the effect of competition in the Company’s markets on rental volume and pricing; occurrences that disrupt rental activity during the Company’s peak periods; the Company’s ability to accurately estimate future levels of rental activity and adjust the number and mix of vehicles used in the Company’s rental operations accordingly; the Company’s ability to retain customer loyalty and market share; increased vehicle costs due to declining value of the Company’s non-program vehicles; the Company’s ability to maintain sufficient liquidity and the availability to it of additional or continued sources of financing for the Company’s revenue earning vehicles and to refinance its existing indebtedness; risks related to the Company’s indebtedness, including its substantial amount of debt, its ability to incur substantially more debt, the fact that substantially all of the Company’s consolidated assets secure certain of its outstanding indebtedness and increases in interest rates or in its borrowing margins; the Company’s ability to meet the financial and other covenants contained in its DIP Credit Agreement and certain asset-backed and asset-based arrangements; the Company’s ability to access financial markets, including the financing of its vehicle fleet through the issuance of asset-backed securities; fluctuations in interest rates, foreign currency exchange rates and commodity prices; the Company’s ability to sustain operations during adverse economic cycles and unfavorable external events (including war, terrorist acts, natural disasters and epidemic disease); the Company’s ability to prevent the misuse or theft of information it possesses, including as a result of cyber security breaches and other security threats; the Company’s ability to adequately respond to changes in technology, customer demands and market competition; the Company’s ability to successfully implement any strategic transactions; the Company’s ability to purchase adequate supplies of competitively priced vehicles and risks relating to the availability and increases in the cost of the vehicles it purchases as a result of the continuing semiconductor microchip manufacturing shortage; the Company’s recognition of previously deferred tax gains on the disposition of revenue earning vehicles; financial instability of the manufacturers of the Company’s vehicles, which could impact their ability to fulfill obligations under repurchase or guaranteed depreciation programs; an increase in the Company’s vehicle costs or disruption to the Company’s rental activity, particularly during peak periods, due to safety recalls by the manufacturers of the Company’s vehicles; the Company’s ability to execute a business continuity plan; the Company’s access to third-party distribution channels and related prices, commission structures and transaction volumes; the Company’s ability to retain customer loyalty and market share; risks associated with operating in many different countries, including the risk of a violation or alleged violation of applicable anti-corruption or anti-bribery laws, the Company’s ability to repatriate cash from non-U.S. affiliates without adverse tax consequences, a major disruption in the Company’s communication or centralized information networks; a failure to maintain, upgrade and consolidate the Company’s information technology systems; costs and risks associated with potential litigation and investigations or any failure or inability to comply with laws and regulations or any changes in the legal and regulatory environment; the Company’s ability to maintain its network of leases and vehicle rental concessions at airports in the U.S. and internationally; the Company’s ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy; changes in the existing, or the adoption of new laws, regulations, policies or other activities of governments, agencies and similar organizations, where such actions may affect the Company’s operations, the cost thereof or applicable tax rates; risks relating to the Company’s deferred tax assets, including the risk of an "ownership change" under the Internal Revenue Code of 1986, as amended; the Company’s exposure to uninsured claims in excess of historical levels; risks relating to the Company’s participation in multiemployer pension plans; shortages of fuel and increases or volatility in fuel costs; the Company’s ability to manage its relationships with unions; changes in accounting principles, or their application or interpretation, and the Company’s ability to make accurate estimates and the assumptions underlying the estimates, which could have an effect on operating results; and other risks and uncertainties described from time to time in periodic and current reports that we file with the SEC.
Additional information concerning these and other factors can be found in the Company’s filings with the SEC, including its Annual Reports on Form 10-K, Quarterly Reports on From 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 of this Quarterly Report on Form 10-Q, and, except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
FINANCIAL INFORMATION AND OPERATING DATA
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
Three Months Ended
March 31,
As a Percentage of Total Revenues
(In millions, except per share data)
2021
2020
2021
2020
Total revenues
$
1,289
$
1,923
100
%
100
%
Expenses:
Direct vehicle and operating
827
1,241
64
%
65
%
Depreciation of revenue earning vehicles and lease charges
243
677
19
%
35
%
Selling, general and administrative
156
208
12
%
11
%
Interest expense, net:
Vehicle
104
118
8
%
6
%
Non-vehicle
44
57
3
%
3
%
Total interest expense, net
148
175
11
%
9
%
Other (income) expense, net
(3)
(17)
—
%
(1)
%
Reorganization items, net
42
—
3
%
—
%
(Gain) from the sale of a business
(392)
—
30
%
—
%
Total expenses
1,021
2,284
79
%
119
%
Income (loss) before income taxes
268
(361)
21
%
(19)
%
Income tax (provision) benefit
(79)
4
(6)
%
—
%
Net income (loss)
189
(357)
15
%
(19)
%
Net (income) loss attributable to noncontrolling interests
1
1
—
%
—
%
Net income (loss) attributable to Hertz Global
$
190
$
(356)
15
%
(19)
%
Weighted-average number of shares outstanding:
Basic
156
142
Diluted
157
142
Earnings (loss) per share:
Basic
$
1.22
$
(2.50)
Diluted
$
1.21
$
(2.50)
Adjusted Net Income (Loss)(a)
$
(52)
$
(253)
Adjusted Diluted Earnings (Loss) Per Share(a)
$
(0.33)
$
(1.78)
Adjusted Corporate EBITDA(a)
$
2
$
(243)
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule II.
Supplemental Schedule I
HERTZ GLOBAL HOLDINGS, INC. CONDENSED STATEMENT OF OPERATIONS BY SEGMENT Unaudited
Three Months Ended March 31, 2021
Three Months Ended March 31, 2020
(In millions)
U.S. Rental Car
Int’l Rental Car
All Other Operations
Corporate
Hertz Global
U.S. Rental Car
Int’l Rental Car
All Other Operations
Corporate
Hertz Global
Total revenues:
$
946
$
207
$
136
$
—
$
1,289
$
1,381
$
368
$
174
$
—
$
1,923
Expenses:
Direct vehicle and operating
670
141
7
9
827
969
265
7
—
1,241
Depreciation of revenue earning vehicles and lease charges
205
38
—
—
243
463
89
125
—
677
Selling, general and administrative
51
36
10
59
156
115
48
(4)
49
208
Interest expense, net:
Vehicle
71
21
12
—
104
86
21
11
—
118
Non-vehicle
(2)
1
1
44
44
(47)
(1)
(5)
110
57
Total interest expense, net
69
22
13
44
148
39
20
6
110
175
(Gain) from the sale of a business
—
—
—
(392)
(392)
—
—
—
—
—
Other (income) expense, net
(1)
—
—
(2)
(3)
(20)
3
—
—
(17)
Reorganization items, net
(14)
—
(1)
57
42
—
—
—
—
—
Total expenses
980
237
29
(225)
1,021
1,566
425
134
159
2,284
Income (loss) before income taxes
$
(34)
$
(30)
$
107
$
225
$
268
$
(185)
$
(57)
$
40
$
(159)
$
(361)
Income tax (provision) benefit
(79)
4
Net income (loss)
$
189
$
(357)
Net (income) loss attributable to noncontrolling interests
1
1
Net income (loss) attributable to Hertz Global
$
190
$
(356)
Supplemental Schedule II
HERTZ GLOBAL HOLDINGS, INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURE – ADJUSTED NET INCOME (LOSS), ADJUSTED DILUTED EARNINGS (LOSS) PER SHARE AND ADJUSTED CORPORATE EBITDA Unaudited
Three Months Ended March 31,
(In millions, except per share data)
2021
2020
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share:
Net income (loss) attributable to Hertz Global
$
190
$
(356)
Adjustments:
Income tax provision (benefit)
79
(4)
Vehicle and non-vehicle debt-related charges(a)
35
12
Restructuring and restructuring related charges(b)
12
7
Information technology and finance transformation costs(c)
6
17
Acquisition accounting-related depreciation and amortization(d)
13
14
Reorganization items, net(e)
42
—
Pre-reorganization and non-debtor financing charges(f)
23
—
Gain from the Donlen Sale(g)
(392)
—
Other items(h)
(87)
(27)
Adjusted pre-tax income (loss)(i)
(79)
(337)
Income tax (provision) benefit on adjusted pre-tax income (loss)(j)
27
84
Adjusted Net Income (Loss)
$
(52)
$
(253)
Weighted-average number of diluted shares outstanding
157
142
Adjusted Diluted Earnings (Loss) Per Share(k)
$
(0.33)
$
(1.78)
Adjusted Corporate EBITDA:
Net income (loss) attributable to Hertz Global
$
190
$
(356)
Adjustments:
Income tax provision (benefit)
79
(4)
Non-vehicle depreciation and amortization(l)
54
53
Non-vehicle debt interest, net of interest income
44
57
Vehicle debt-related charges(a)(m)
28
9
Restructuring and restructuring related charges(b)
12
7
Information technology and finance transformation costs(c)
6
17
Reorganization items, net(e)
42
—
Pre-reorganization and non-debtor financing charges(f)
23
—
(Gain) from the Donlen Sale(g)
(392)
—
Other items(h)(n)
(84)
(26)
Adjusted Corporate EBITDA
$
2
$
(243)
Supplemental Schedule II (continued)
(b)
Represents charges incurred under restructuring actions as defined in U.S. GAAP, excluding impairments and asset write-downs. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.
(c)
Represents costs associated with the Company’s information technology and finance transformation programs, both of which are multi-year initiatives to upgrade and modernize the Company’s systems and processes. These costs relate primarily to the Company’s corporate operations ("Corporate")..
(d)
Represents incremental expense associated with the amortization of other intangible assets and depreciation of property and equipment relating to acquisition accounting.
(e)
Represents charges incurred associated with the Reorganization, including professional fees. The charges relate primarily to Corporate.
(f)
Represents charges incurred prior to the filing of the Chapter 11 Cases comprised of preparation charges for the Reorganization, such as professional fees. Also includes, certain non-debtor financing and professional fee charges. For U.S. RAC, International RAC, All Other Operations and Corporate charges incurred for the three months ended March 31, 2021 are $9 million, $2 million, $2 million and $10 million, respectively.
(g)
Represents the gain from the sale of the Company’s Donlen business on March 30, 2021, primarily associated with the Company’s corporate operations.
(h)
Represents miscellaneous items. In 2021, includes $100 million due to U.S. GAAP accounting treatment associated with the Donlen Sale in All Other Operations, partially offset by charges for a multiemployer pension plan withdrawal liability in the Company’s corporate operations. In 2020, includes a $20 million gain on the sale of non-vehicle capital assets in U.S. RAC and $13 million in unrealized gains on derivative financial instruments in All Other Operations.
(i)
Adjustments by caption on a pre-tax basis are as follows:
Increase (decrease) to expenses
Three Months Ended
March 31,
(In millions)
2021
2020
Direct vehicle and operating
$
87
(16)
Selling, general and administrative
(31)
(8)
Interest expense, net:
Vehicle
(39)
(9)
Non-vehicle
(7)
(3)
Total interest expense, net
(46)
(12)
Other income (expense), net
(12)
13
Reorganization items, net
(42)
—
Gain from the Donlen Sale
392
—
Total adjustments
$
348
(23)
(j)
Derived utilizing a combined statutory rate of 34% and 25% for the three months ended March 31, 2021 and 2020, respectively, applied to the respective Adjusted Pre-tax Income (Loss).
(k)
Adjustments used to reconcile diluted earnings (loss) per share on a GAAP basis to Adjusted Diluted Earnings (Loss) Per Share are comprised of the same adjustments, inclusive of the tax impact, used to reconcile net income (loss) to Adjusted Net Income (Loss) divided by the weighted-average diluted shares outstanding during the period.
(l)
Non-vehicle depreciation and amortization expense for U.S. RAC, International RAC, All Other Operations and Corporate for the three months ended March 31, 2021 are $43 million, $6 million, $2 million and $3 million, respectively, and for the three months ended March 31, 2020 are $41 million, $5 million, $2 million and $5 million, respectively.
(m)
Vehicle debt-related charges for U.S. RAC, International RAC and All Other Operations for the three months ended March 31, 2021 are $21 million, $5 million and $2 million, respectively, and for the three months ended March 31, 2020 are $6 million, $2 million, and $1 million, respectively.
(n)
Also includes an adjustment for non-cash stock-based compensation charges in Corporate.
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC. RECONCILIATIONS OF KEY METRICS REVENUE, UTILIZATION AND DEPRECIATION Unaudited U.S. Rental Car
Three Months Ended
March 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2021
2020
Total RPD
Total revenues
$
946
$
1,381
Ancillary retail vehicle sales revenue
(4)
(32)
Total Rental Revenues
$
942
$
1,349
Transaction Days (in thousands)
19,776
31,564
Total RPD (in whole dollars)
$
47.63
$
42.74
11
%
Total Revenue Per Unit Per Month
Total Rental Revenues
$
942
$
1,349
Average Vehicles (in whole units)
292,154
518,580
Total revenue per unit (in whole dollars)
$
3,224
$
2,601
Number of months in period (in whole units)
3
3
Total RPU Per Month (in whole dollars)
$
1,075
$
867
24
%
Vehicle Utilization
Transaction Days (in thousands)
19,776
31,564
Average Vehicles (in whole units)
292,154
518,580
Number of days in period (in whole units)
90
91
Available Car Days (in thousands)
26,294
47,191
Vehicle Utilization(a)
75
%
67
%
Depreciation Per Unit Per Month
Depreciation of revenue earning vehicles and lease charges
$
205
$
463
Average Vehicles (in whole units)
292,154
518,580
Depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)
$
702
$
893
Number of months in period (in whole units)
3
3
Depreciation Per Unit Per Month (in whole dollars)
$
234
$
298
(21)
%
(a) Calculated as Transaction Days divided by Available Car Days.
Supplemental Schedule III (continued)
HERTZ GLOBAL HOLDINGS, INC. RECONCILIATIONS OF KEY METRICS REVENUE, UTILIZATION AND DEPRECIATION Unaudited International Rental Car
Three Months Ended
March 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2021
2020
Total RPD
Total revenues
$
207
$
368
Foreign currency adjustment(a)
—
36
Total Rental Revenues
$
207
$
404
Transaction Days (in thousands)
4,872
8,863
Total RPD (in whole dollars)
$
42.49
$
45.57
(7)
%
Total Revenue Per Unit Per Month
Total Rental Revenues
$
207
$
404
Average Vehicles (in whole units)
75,446
147,987
Total revenue per unit (in whole dollars)
$
2,744
$
2,730
Number of months in period (in whole units)
3
3
Total RPU Per Month (in whole dollars)
$
915
$
910
1
%
Vehicle Utilization
Transaction Days (in thousands)
4,872
8,863
Average Vehicles (in whole units)
75,446
147,987
Number of days in period (in whole units)
90
91
Available Car Days (in thousands)
6,790
13,467
Vehicle Utilization(b)
72
%
66
%
Depreciation Per Unit Per Month
Depreciation of revenue earning vehicles and lease charges
$
38
$
89
Foreign currency adjustment(a)
—
9
Adjusted depreciation of revenue earning vehicles and lease charges
$
38
$
98
Average Vehicles (in whole units)
75,446
147,987
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)
$
504
$
662
Number of months in period (in whole units)
3
3
Depreciation Per Unit Per Month (in whole dollars)
$
168
$
220
(24)
%
(a) Based on December 31, 2020 foreign exchange rates.
(b) Calculated as Transaction Days divided by Available Car Days.
Supplemental Schedule III (continued)
HERTZ GLOBAL HOLDINGS, INC. RECONCILIATIONS OF KEY METRICS REVENUE, UTILIZATION AND DEPRECIATION Unaudited Worldwide Rental Car
Three Months Ended
March 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2021
2020
Total RPD
Total revenues
$
1,153
$
1,749
Ancillary retail vehicle sales revenue
(4)
(32)
Foreign currency adjustment(a)
—
36
Total Rental Revenues
$
1,149
$
1,753
Transaction Days (in thousands)
24,648
40,427
Total RPD (in whole dollars)
$
46.62
$
43.36
8
%
Total Revenue Per Unit Per Month
Total Rental Revenues
$
1,149
$
1,753
Average Vehicles (in whole units)
367,600
666,567
Total revenue per unit (in whole dollars)
$
3,126
$
2,630
Number of months in period (in whole units)
3
3
Total RPU Per Month (in whole dollars)
$
1,042
$
877
19
%
Vehicle Utilization
Transaction Days (in thousands)
24,648
40,427
Average Vehicles (in whole units)
367,600
666,567
Number of days in period (in whole units)
90
91
Available Car Days (in thousands)
33,084
60,658
Vehicle Utilization(b)
75
%
67
%
Depreciation Per Unit Per Month
Depreciation of revenue earning vehicles and lease charges
$
243
$
552
Foreign currency adjustment(a)
—
9
Adjusted depreciation of revenue earning vehicles and lease charges
$
243
$
561
Average Vehicles (in whole units)
367,600
666,567
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)
$
661
$
842
Number of months in period (in whole units)
3
3
Depreciation Per Unit Per Month (in whole dollars)
$
221
$
280
(21)
%
Note: Worldwide Rental Car represents U.S. Rental Car and International Rental Car segment information on a combined basis and excludes the All Other Operations segment, which is primarily comprised of the Company’s Donlen leasing operations, and Corporate.
(a) Based on December 31, 2020 foreign exchange rates.
(b) Calculated as Transaction Days divided by Available Car Days.
NON-GAAP MEASURES AND KEY METRICS
Hertz Global is the top-level holding company that indirectly wholly owns The Hertz Corporation (together, the "Company"). The term "GAAP" refers to accounting principles generally accepted in the United States of America. Adjusted EBITDA is the Company’s segment measure of profitability and complies with GAAP when used in that context.
NON-GAAP MEASURES
Non-GAAP measures are not recognized measurements under GAAP. When evaluating the Company’s operating performance or liquidity, investors should not consider non-GAAP measures in isolation of, superior to, or as a substitute for measures of the Company’s financial performance as determined in accordance with GAAP.
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share ("Adjusted Diluted EPS")
Adjusted Net Income (Loss) represents income or loss attributable to the Company as adjusted to eliminate the impact of GAAP income tax, debt-related charges and losses, restructuring and restructuring related charges, intangible and tangible asset impairments and write-downs, information technology and finance transformation costs, non-cash acquisition accounting charges, reorganization items, pre-reorganization and non-debtor financing charges, gain from the sale of a business and certain other miscellaneous items on a pre-tax basis. Adjusted Net Income (Loss) includes a provision (benefit) for income taxes derived utilizing a combined statutory rate. The combined statutory rate is management’s estimate of the Company’s long-term tax rate. Its most comparable GAAP measure is net income (loss) attributable to the Company.
Adjusted Diluted EPS represents Adjusted Net Income (Loss) on a per diluted share basis using the weighted-average number of diluted shares outstanding for the period. Its most comparable GAAP measure is diluted earnings (loss) per share.
Adjusted Net Income (Loss) and Adjusted Diluted EPS are important to management because they allow management to assess operational performance of the Company’s business, exclusive of the items mentioned above that are not operational in nature or comparable to those of the Company’s competitors.
Adjusted Corporate EBITDA and Adjusted Corporate EBITDA Margin
Adjusted Corporate EBITDA represents income or loss attributable to the Company as adjusted to eliminate the impact of GAAP income tax, non-vehicle depreciation and amortization, net non-vehicle debt interest, vehicle debt-related charges and losses, restructuring and restructuring related charges, goodwill, intangible and tangible asset impairments and write-downs, information technology and finance transformation costs, reorganization items, pre-reorganization and non-debtor financing charges, gain from the sale of a business and certain other miscellaneous items. Adjusted Corporate EBITDA Margin is calculated as the ratio of Adjusted Corporate EBITDA to total revenues.
Management uses these measures as operating performance metrics for internal monitoring and planning purposes, including the preparation of the Company’s annual operating budget and monthly operating reviews, and to facilitate analysis of investment decisions, profitability and performance trends. These measures enable management and investors to isolate the effects on profitability of operating metrics most meaningful to the business of renting and leasing vehicles. They also allow management to assess the performance of the entire business on the same basis as its reportable segments. Adjusted Corporate EBITDA is also utilized in the determination of certain executive compensation. Its most comparable GAAP measure is net income (loss) attributable to the Company.
KEY METRICS
Available Car Days
Available Car Days represents Average Vehicles multiplied by the number of days in a period.
Average Vehicles ("Fleet Capacity" or "Capacity")
Average Vehicles is determined using a simple average of the number of vehicles in the fleet whether owned or leased by the Company at the beginning and end of a given period.
Depreciation Per Unit Per Month
Depreciation Per Unit Per Month represents the amount of average depreciation expense and lease charges per vehicle per month, exclusive of the impacts of foreign currency exchange rates. Management believes eliminating the effect of fluctuations in foreign currency exchange rates is appropriate so as not to affect the comparability of underlying trends. This metric is important to management and investors as it is reflective of how the Company is managing the costs of its vehicles and facilitates in comparison with other participants in the vehicle rental industry.
Total Rental Revenues
Total Rental Revenues represents total revenues less ancillary retail vehicle sales revenues, with all periods adjusted to eliminate the effect of fluctuations in foreign currency exchange rates. Management believes eliminating the effect of fluctuations in foreign currency exchange rates is appropriate so as not to affect the comparability of underlying trends. This metric is important to management and investors as it represents a measurement that excludes the impact of ancillary revenues resulting from vehicle sales and facilitates in comparisons with other participants in the vehicle rental industry.
Total Revenue Per Transaction Day ("Total RPD"or "RPD"; also referred to as "pricing")
Total RPD represents the ratio of Total Rental Revenues to Transaction Days. This metric is important to management and investors as it represents a measurement of the changes in underlying pricing in the vehicle rental business and encompasses the elements in vehicle rental pricing that management has the ability to control.
Total Revenue Per Unit Per Month ("Total RPU" or "Total RPU Per Month")
Total RPU Per Month represents the amount of average Total Rental Revenues per vehicle per month. This metric is important to management and investors as it provides a measure of revenue productivity relative to fleet capacity, or asset efficiency.
Transaction Days ("Days"; also referred to as "volume")
Transaction Days, also known as volume, represent the total number of 24-hour periods, with any partial period counted as one Transaction Day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period. Thus, it is possible for a vehicle to attain more than one Transaction Day in a 24-hour period. This metric is important to management and investors as it represents the number of revenue generating days.
Vehicle Utilization ("Utilization")
Vehicle Utilization represents the ratio of Transaction Days to Available Car Days. This metric is important to management and investors as it is the measurement of the proportion of vehicles that are being used to generate revenues relative to fleet capacity.
ESTERO, Fla., May 5, 2021 /PRNewswire/ — Hertz Global Holdings, Inc. (OTCPK:HTZGQ) ("Hertz" or the "Company") today announced that it has considered the revised proposal made by affiliates of Knighthead Capital Management LLC, Certares Opportunities LLC and Apollo Capital Management, LP (the "KHC Group") to provide equity capital required to fund Hertz’s exit from Chapter 11. Hertz has determined that the revised proposal constitutes a superior proposal as contemplated by its agreement with its existing plan sponsors, affiliates of Centerbridge Capital Partners, L.P., Warburg Pincus LLC and Dundon Capital Partners, LLC (the "Current Plan Sponsors"), which agreement remains in effect.
Hertz will comply with the procedures established by the Bankruptcy Court’s April 28, 2021 Order (I) Establishing Bidding and Auction Procedures Relating to the Submission of Alternative Plan Proposals, (II) Setting a Hearing for Approval of (A) The Successful Bidder and (B) Authorization of Supplemental Solicitation Materials and (III) Granting Related Relief governing Hertz’s evaluation of the alternatives. If the Current Plan Sponsors inform Hertz by May 7, 2021 that the Current Plan Sponsors intend to make a counteroffer to the proposal by the KHC Group, then the Company will proceed to an auction on May 10, 2021 in accordance with the process established by the Bankruptcy Court.
For Court documents or filings, please visit https://restructuring.primeclerk.com/hertz or call (877) 428-4661 (toll-free in the U.S.) or (929) 955-3421 (from outside the U.S.). White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting is serving as financial advisor.
ABOUT HERTZ
The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.
This press release contains "forward-looking statements" within the meaning of federal securities laws. Words such as "expect" and "intend" and similar expressions identify forward-looking statements, which include but are not limited to statements related to our liquidity and potential financing sources; the bankruptcy process; our ability to obtain approval from the Bankruptcy Court with respect to motions or other requests made to the Bankruptcy Court throughout the course of the Chapter 11 Cases; the effects of Chapter 11 on the interests of various constituents; and the ability to negotiate, develop, confirm and consummate a plan of reorganization. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those in our risk factors that we identify in our most recent annual report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on February 26, 2021, and any updates thereto in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. We caution you not to place undue reliance on our forward-looking statements, which speak only as of their date, and we undertake no obligation to update this information.
ESTERO, Fla., April 3, 2021 /PRNewswire/ — Hertz Global Holdings, Inc. (OTCPK:HTZGQ) ("Hertz" or the "Company") announced today that it has selected an enhanced proposal from Centerbridge Partners, L.P., Warburg Pincus LLC, and Dundon Capital Partners, LLC (collectively, the "Sponsorship Group") to provide the equity capital required to fund Hertz’s exit from Chapter 11, keeping the Company on track to conclude its Chapter 11 case in June 2021. The deal is reflected in definitive executed documents, including, (1) an Equity Purchase and Commitment Agreement, (2) a Plan Support Agreement, (3) a Bridge Financing Commitment for Hertz International Ltd., (4) an Amended Chapter 11 Plan of Reorganization (the "Plan"), and (5) an amended Disclosure Statement (collectively, the "Transaction Documents"), which have been filed with the Delaware Bankruptcy Court presiding over Hertz’s Chapter 11 case.
The proposed transaction, which remains subject to approval by the Bankruptcy Court, is supported by holders of over 85% of the Company’s unsecured notes (the "Supporting Noteholders"), which comprise the vast majority of creditors in the largest class of claims voting on the Plan. As disclosed earlier this week, the two leading proposals under consideration had been advanced to the point where either one would leave the Company in a significantly strengthened financial position. Both would provide bridge financing to fund the Company’s European fleet needs prior to the Plan’s consummation. At exit, under both proposals, the Company would eliminate approximately $5 billion of debt, have over $2 billion of global liquidity, and completely eliminate all corporate debt on its European business. The level of creditor support for the Sponsorship Group’s proposal gave it the clear advantage. The proposal maximizes the Company’s opportunity to capitalize on the current market conditions for the financing of its business going forward and to exit Chapter 11 in a timely and efficient fashion.
Paul Stone, President and Chief Executive, said: "We are pleased to be moving forward with an enhanced proposal supported by our largest creditor constituency and that delivers excellent value to all our stakeholders. This plan accomplishes all the goals we set out to achieve through our financial restructuring. Our new sponsors combined with our strong leadership team will bring significant operational experience across fleet financing and management, which will benefit all of our stakeholders. We look forward to emerging from Chapter 11 in the second quarter financially and operationally stronger, and well-positioned to achieve the opportunities in the rebounding travel market."
As set forth in the Transaction Documents, the Supporting Noteholders have agreed to support the exchange of the unsecured funded debt claims against the Company for approximately 48.2% of the equity in the reorganized company and the right to purchase an additional $1.6 billion of equity to fund the Plan. The Supporting Noteholders have also committed to purchase, or otherwise backstop, the full $1.6 billion of equity being offered to the holders of the Company’s unsecured funded debt. The holders of the Company’s €725 million European vehicle notes will be paid in cash in full under the Plan; their guaranty claims against the U.S. entities will be unimpaired and the balance of their debt will be paid by the issuer, Hertz Holdings Netherlands BV. Holders of general unsecured claims will receive a cash payment estimated to provide a recovery of approximately 75 percent. Administrative, priority, and secured claims will be paid in cash in full. In addition, the Company’s existing equity will be cancelled and receive no distribution.
The Sponsorship Group brings unique operational expertise as strategic partners to the Company. They have extensive experience across the automotive, rental, and travel sectors, including with companies such as Santander Consumer USA (SCUSA), Dana Incorporated, and Car Trade.
The selection of the Sponsorship Group reflects the culmination of a robust competitive process and series of negotiations that began in November 2020. The Company believes that through this competitive process they have maximized value for all stakeholders. The next step will be for the Bankruptcy Court to consider approving the terms of the Sponsorship Group’s proposed investment, the Disclosure Statement with respect to the Plan, and related creditor solicitation materials and procedures. All such matters are currently scheduled to be heard on April 16. Assuming Court approval, the Disclosure Statement and Plan will then be sent to Hertz’s creditors for a vote, and the Court will hold a hearing to consider confirmation of the Plan.
For the Court documents or filings, please visit https://restructuring.primeclerk.com/hertz or call (877) 428-4661 (toll-free in the U.S.) or (929) 955-3421 (from outside the U.S.). White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting is serving as financial advisor.
ABOUT HERTZ
The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.
This press release contains "forward-looking statements" within the meaning of federal securities laws. Words such as "expect" and "intend" and similar expressions identify forward-looking statements, which include but are not limited to statements related to our liquidity and potential financing sources; the bankruptcy process; our ability to obtain approval from the Bankruptcy Court with respect to motions or other requests made to the Bankruptcy Court throughout the course of the Chapter 11 Cases; the effects of Chapter 11 on the interests of various constituents; and the ability to negotiate, develop, confirm and consummate a plan of reorganization. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those in our risk factors that we identify in our most recent annual report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on February 26, 2021, and any updates thereto in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. We caution you not to place undue reliance on our forward-looking statements, which speak only as of their date, and we undertake no obligation to update this information.
ESTERO, Fla., March 30, 2021 /PRNewswire/ — Hertz Global Holdings, Inc. (OTCPK:HTZGQ) ("Hertz" or the "Company") announced today that it has made all of the required court filings in its Chapter 11 case needed to continue the process it initiated at the beginning of March 2021 to exit Chapter 11 in June 2021. The filings also report on the status of ongoing negotiations regarding funding the Company’s proposed Plan of Reorganization (the "Plan").
The Plan, as initially filed on March 1, 2021, contemplated a $4.2 billion equity infusion from affiliates of Certares Opportunities LLC and Knighthead Capital Management, LLC (the "Plan Sponsorship Proposal") to fund the payment in cash in full of all senior claims and a 70-cent payout to the Company’s unsecured creditors. Prior to filing its initial Plan, Hertz had received interest from a number of parties to provide the equity capital needed to fund its Chapter 11 exit, including a proposal from Centerbridge Partners, L.P., Warburg Pincus LLC, and Dundon Capital Partners (collectively, the "Alternate Plan Sponsorship Proposal"). Based on its assessment of the proposals received and all of the information then available, Hertz believed that the Plan Sponsorship Proposal would support a value-maximizing conclusion to its Chapter 11 case, while also providing the best opportunity for an efficient and timely exit from Chapter 11.
Based on events that have occurred since the initial Plan filing, including (1) material modifications and improvements to both sponsorship proposals, (2) the fact that both proposals remain subject to certain contingencies, including final documentation, and (3) input received from holders of over 80% of Hertz’s approximately $2.7 billion of unsecured notes, Hertz has determined to continue the process of negotiating the terms on which its Plan will be sponsored without delaying its goal of exiting Chapter 11 by early to mid-summer. This ongoing iterative and competitive process is reflected in the court filings Hertz made last night. The Company expects to file one or more amendments to the documents filed yesterday to incorporate the terms of a finalized sponsorship proposal once selected.
Under the current terms of both proposals, upon exit from Chapter 11, the Company would:
(1) have at most approximately $1.3 billion of corporate debt,
(2) be provided with over $2 billion of global liquidity,
(3) obtain a new asset-backed securitization facility that would pay in full all existing obligations related to Hertz’s U.S. vehicle fleet and provide the funding needed to meet Hertz’s ongoing fleet requirements, and
(4) satisfy in full all debt obligations associated with the Company’s European business, leaving it debt-free.
Both proposals also currently contemplate that the Company will emerge from Chapter 11 as a publicly-traded company, with up to approximately 80% of its shares owned by the holders of its U.S. unsecured funded debt obligations. The equity capital required to fund the Plan will, in both cases, be funded by (a) direct purchases of equity in the reorganized company by the plan sponsors or their affiliates, and (b) the proceeds of an offering to the holders of the Company’s unsecured funded debt to purchase common shares that will be fully backstopped by either the plan sponsors or certain holders of the unsecured notes. General unsecured creditors will receive a cash distribution of approximately 80 cents on the dollar under the Plan Sponsorship Proposal and approximately 75 cents on the dollar under the Alternate Plan Sponsorship Proposal. Additionally, the holders of the Company’s unsecured funded debt would receive common equity in the reorganized company. The Company’s existing common shares would be cancelled.
Paul Stone, President and Chief Executive, said: "We’re fortunate to be in a position to choose between two proposals that will strengthen the Company by eliminating approximately $5 billion of corporate debt and providing us with the liquidity to execute on our business plan, while also delivering excellent value for our creditors and stakeholders. We are encouraged that our creditors would prefer to invest in the reorganized company, rather than receive a cash payout. Others are seeing what we already know – Hertz is an incredible company with tremendous growth potential. Once the proposals have been finalized and we receive further input from our creditors, we will work with our financial and legal advisors to quickly determine which of these excellent options will fund our plan. We remain committed to completing the reorganization process in the second quarter and emerging from Chapter 11 well positioned for the upcoming summer season."
Hertz anticipates that it will finalize the proposals imminently and that, after consulting with its stakeholders, including the Ad Hoc Group of Unsecured Noteholders and the Official Committee of Unsecured Creditors, it will select a Plan sponsor and amend its court filings accordingly in the coming days. The next step will be for the Bankruptcy Court to consider approving the terms of the selected Plan sponsors’ proposed investment, the Disclosure Statement with respect to the Plan, and related creditor solicitation materials and procedures. All such matters are currently scheduled to be heard on April 16. Assuming Court approval, the Disclosure Statement and Plan will then be sent to Hertz’s creditors for a vote, and the Court will hold a hearing to consider confirmation of the Plan.
For the Court documents or filings, please visit https://restructuring.primeclerk.com/hertz or call (877) 428-4661 (toll-free in the U.S.) or (929) 955-3421 (from outside the U.S.). White & Case LLP is serving as legal advisor, Moelis & Co. is serving as investment banker, and FTI Consulting is serving as financial advisor.
ABOUT HERTZ
The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.
This press release contains "forward-looking statements" within the meaning of federal securities laws. Words such as "expect" and "intend" and similar expressions identify forward-looking statements, which include but are not limited to statements related to our liquidity and potential financing sources; the bankruptcy process; our ability to obtain approval from the Bankruptcy Court with respect to motions or other requests made to the Bankruptcy Court throughout the course of the Chapter 11 Cases; the effects of Chapter 11 on the interests of various constituents; and the ability to negotiate, develop, confirm and consummate a plan of reorganization. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including those in our risk factors that we identify in our most recent annual report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission on February 26, 2021, and any updates thereto in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. We caution you not to place undue reliance on our forward-looking statements, which speak only as of their date, and we undertake no obligation to update this information.
