Comprised of $500 Million of First Lien Senior Secured Notes and $250 Million of Exchangeable Senior Second-Lien Secured PIK Notes Issued by The Hertz Corporation
ESTERO, Fla., June 20, 2024 /PRNewswire/ — Hertz Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz" or the "Company"), a leading global rental car company, today announced that its wholly-owned indirect subsidiary, The Hertz Corporation ("Hertz Corp."), intends to offer, subject to market and other conditions, $500 million in aggregate principal amount of First Lien Senior Secured Notes due 2029 (the "First Lien Notes") and $250 million in aggregate principal amount of Exchangeable Senior Second-Lien Secured PIK Notes due 2029 (the "Exchangeable Notes" and, together with the First Lien Notes, the "Notes"), in private offerings exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act").
Concurrently with the offerings of the Notes, investors affiliated with CK Amarillo LP have committed to Hertz Corp. and an investor has provided a firm commitment to an initial purchaser to purchase up to $250 million aggregate principal amount of Exchangeable Notes. In addition, Hertz Corp. has received a backstop commitment to purchase up to $500 million aggregate principal amount of First Lien Notes.
Hertz Corp. intends to use the net proceeds of the offerings to pay down a portion of its $2.0 billion committed revolving credit facility, improving liquidity. The completion of the offering of the First Lien Notes and the completion of the offering of the Exchangeable Notes are not contingent on each other.
The Exchangeable Notes will bear PIK interest payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024. Hertz Corp. expects that the initial exchange price for the Exchangeable Notes will be at a 100% premium to the volume-weighted average price of the common stock of the Company ("Common Stock") on the date of pricing of the Exchangeable Notes, but in no event greater than $7.00 or less than $6.00 per share of Common Stock. The interest rate and certain other terms of the Exchangeable Notes will be determined by negotiations between Hertz Corp. and the initial purchasers. The Exchangeable Notes will mature on June 15, 2029, unless repurchased, redeemed or exchanged in accordance with their terms prior to maturity. Prior to March 15, 2029, the Exchangeable Notes will be exchangeable only upon satisfaction of certain conditions and during certain periods, and thereafter, the Exchangeable Notes will be exchangeable at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The Exchangeable Notes will be exchangeable on the terms set forth in the indenture into cash, shares of Common Stock, or a combination thereof, at Hertz Corp.’s election.
Holders of the Exchangeable Notes will have the right to require Hertz Corp. to repurchase all or a portion of their Exchangeable Notes at 100% of their initial principal amount of the Exchangeable Notes to be repurchased plus PIK interest on such Exchangeable Notes for each interest payment date occurring on or prior to the repurchase date plus accrued and unpaid PIK interest to, but excluding, the date of such repurchase, upon the occurrence of certain corporate events constituting a "fundamental change" as defined in the indenture governing the Exchangeable Notes. Hertz Corp. may not redeem the Exchangeable Notes prior to June 21, 2027. On or after June 21, 2027 and on or prior to the 31st scheduled trading day immediately preceding the maturity date, if the last reported sale price per share of Common Stock has been at least 250% of the exchange price for the Exchangeable Notes for certain specified periods, Hertz Corp. may redeem all (but not part) of the Exchangeable Notes at a cash redemption price equal to the initial principal amount of the Exchangeable Notes to be redeemed plus PIK interest on such Exchangeable Notes for each interest payment date occurring on or prior to the redemption date plus accrued and unpaid PIK interest on such Exchangeable Notes to, but not including, the redemption date.
The Notes are expected to be guaranteed by the Company, Rental Car Intermediate Holdings, LLC, Hertz Corp.’s direct parent company, and each of Hertz Corp.’s existing domestic subsidiaries and future restricted subsidiaries that guarantees indebtedness under Hertz Corp.’s first lien credit facilities or certain other indebtedness for borrowed money. The First Lien Notes and the related guarantees (other than the guarantee by the Company) are expected to be secured (subject to certain exceptions and permitted liens) on a first-lien basis by the same assets (other than certain excluded property) that secure indebtedness under Hertz Corp.’s first lien credit facilities (the "Collateral") and are therefore expected to be effectively pari passu with indebtedness under Hertz Corp.’s first lien credit facilities. The Exchangeable Notes and the related guarantees (other than the guarantee by the Company) are expected to be secured (subject to certain exceptions and permitted liens) on a second-lien basis by the Collateral and are therefore expected to be effectively junior to the First Lien Notes and indebtedness under Hertz Corp.’s first lien credit facilities.
The Notes and the guarantees of the Notes are being offered only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and, except for the Exchangeable Notes and the related guarantees, to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The Notes, the guarantees of the Notes and any shares of Common Stock issuable upon exchange of the Exchangeable Notes have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and the securities laws of any other jurisdiction.
This press release is not an offer to sell or purchase, or a solicitation of an offer to sell or purchase, the Notes, the guarantees of the Notes or the shares of Common Stock issuable upon exchange of the Exchangeable Notes and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which, or to any person to whom such an offer, solicitation or sale would be unlawful.
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 owns and operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales.
This press release contains "forward-looking statements" within the meaning of the federal securities laws. Words such as "expect," "will" and "intend" and similar expressions identify forward-looking statements, which include but are not limited to statements related to our positioning, strategy, vision, forward looking investments, conditions in the travel industry, our financial and operational condition, our sources of liquidity, the proposed offerings, the anticipated terms of the Notes and Hertz Corp.’s expected use of proceeds from the proposed offerings. 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 risks and uncertainties related to completion of the offerings on the anticipated terms or at all, market conditions (including market interest rates) and the satisfaction of customary closing conditions related to the offerings, unanticipated uses of capital and those in our risk factors that we identify in the offering memorandums for these offerings and our most recent annual report on Form 10-K for the year ended December 31, 2023, as filed with the U.S. Securities and Exchange Commission on February 12, 2024, 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 3, 2024 /PRNewswire/ — Hertz Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz", "Hertz Global" or the "Company"), a leading global rental car company, today announced the appointment of Scott M. Haralson as Chief Financial Officer, joining the company by the end of June. Haralson will succeed Alexandra Brooks, who is leaving the Company to pursue other opportunities but will remain until the end of the month to ensure an orderly transition.
Hertz Announces Appointment of Scott M. Haralson as Chief Financial Officer
"I am thrilled to have Scott join the Hertz team," said Hertz CEO Gil West. "His deep expertise in financial management and leveraging the capital markets to drive business transformation will be invaluable to Hertz as we rotate our fleet, deliver operational excellence, build greater cost discipline and undertake other key initiatives to improve our financial performance. I welcome Scott’s partnership in helping lead Hertz through this transition year and into our next phase of growth as we seek to deliver sustainable long-term shareholder value."
"I’m honored to be joining such a storied brand in the travel industry at this critical moment in Hertz’s journey," said Haralson. "I look forward to working alongside Gil and the entire Hertz team as we continue strengthening the balance sheet and drive enhanced profitability to unlock new opportunities for growth, all with an eye toward delivering excellent service to customers and shaping the future of mobility."
Haralson is a seasoned executive and veteran of the transportation industry with over 25 years of leadership and corporate finance experience, having most recently served as Chief Financial Officer of Spirit Airlines, where he helped the company navigate the pandemic and strengthened its financial position. Prior to Spirit Airlines, Haralson held key financial leadership roles at Dish Network, Frontier Airlines, Swift Aviation Group and US Airways. He has deep experience across all facets of financial management, including capital markets and capital funding, capital budgeting, strategic planning, forecasting, financial planning and analysis and cost management and treasury and cash management.
"I want to thank Alex for her dedicated service to Hertz over the past four years," West added. "Alex has played an important role in shaping Hertz, first as Chief Accounting Officer and then as CFO."
In addition, Hertz and Chief Operating Officer Justin Keppy have agreed that Mr. Keppy would resign from the Company, effective June 3, 2024. "As we welcome Scott onto the team for this next exciting chapter at Hertz, we thank Alex and Justin for their contributions to the company and wish them well in their next endeavors," West said.
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 owns and 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.
"Fleet and direct operating costs weighed on this quarter’s performance," said Gil West, Hertz chief executive officer. "We’re tackling both issues – getting to the right supply of vehicles at an acceptable capital cost while at the same time driving productivity up and operating costs down. These, along with creating a superior customer experience, will be our focus as we position ourselves to take advantage of strong travel demand in this transition year. We’ve put the right strategy in place, and I see a clear path for Hertz to generate sustainable and higher earnings for our shareholders."
ESTERO, Fla., April 25, 2024 /PRNewswire/ — Hertz Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz", "Hertz Global" or the "Company") today reported results for its first quarter 2024.
OVERVIEW
Revenue of $2.1 billion
GAAP net loss of $186 million, a negative 9% margin, or $0.61 loss per diluted share
Adjusted net loss of $392 million, or $1.28 loss per diluted share
Adjusted Corporate EBITDA of negative $567 million, a negative 27% margin, driven by a $588 million increase in vehicle depreciation, of which $195 million related to EVs held for sale
GAAP operating cash flow of $370 million; Adjusted operating cash outflow of $697 million and adjusted free cash outflow of $729 million
Corporate liquidity of $1.3 billion at March 31, 2024
FIRST QUARTER RESULTS
First quarter revenue was $2.1 billion, up 2% from the first quarter of 2023 and reflected continued strength in rental demand. Increased demand in leisure and rideshare customer channels drove a 9% increase in transaction days. First quarter RPD of $56.68 reflected a decline of 7% year over year, which moderated to 3% in March.
In the first quarter, the Company upsized its EV disposition plan by 10,000 vehicles, for a total of 30,000 EVs intended for sale in 2024. The Company incurred a $195 million charge to vehicle depreciation to write down the EVs held for sale which were remaining in inventory at quarter-end to fair value and recognize the disposition losses on EVs sold in the period.
Vehicle depreciation in the first quarter of 2024 increased $588 million, or $339 on a per unit basis, primarily driven by deterioration in estimated forward residual values and disposition losses on ICE vehicles compared to gains in the prior year quarter. Additionally, of the $339 per unit increase, $119 was related to EVs held for sale.
Direct operating expense on a per transaction day basis in the first quarter of 2024 increased by 3% year over year reflecting inflationary pressure as well as elevated collision and damage expense. Excluding collision and damage, DOE per day was flat.
Adjusted Corporate EBITDA was negative $567 million in the quarter driven mainly by a $588 million increase in vehicle depreciation compared to the first quarter of 2023, of which $195 million related to EVs held for sale. The Company commenced a broad fleet refresh during the quarter and has revenue and cost initiatives in place to enhance the Company’s future profitability.
SUMMARY RESULTS
Three Months Ended
March 31,
Percent Inc/(Dec)
2024 vs 2023
($ in millions, except earnings per share or where noted)
2024
2023
Hertz Global – Consolidated
Total revenues
$ 2,080
$ 2,047
2 %
Net income (loss)
$ (186)
$ 196
NM
Net income (loss) margin
(9) %
10 %
Adjusted net income (loss)(a)
$ (392)
$ 126
NM
Adjusted diluted earnings (loss) per share(a)
$ (1.28)
$ 0.39
NM
Adjusted Corporate EBITDA(a)
$ (567)
$ 237
NM
Adjusted Corporate EBITDA Margin(a)
(27) %
12 %
Average Vehicles (in whole units)
547,492
504,528
9 %
Average Rentable Vehicles (in whole units)
529,232
483,288
10 %
Vehicle Utilization
76 %
77 %
Transaction Days (in thousands)
36,854
33,787
9 %
Total RPD (in dollars)(b)
$ 56.68
$ 60.85
(7) %
Total RPU Per Month (in whole dollars)(b)
$ 1,316
$ 1,418
(7) %
Depreciation Per Unit Per Month (in whole dollars)(b)
$ 592
$ 253
NM
Americas RAC Segment
Total revenues
$ 1,739
$ 1,730
1 %
Adjusted EBITDA
$ (488)
$ 261
NM
Adjusted EBITDA Margin
(28) %
15 %
Average Vehicles (in whole units)
450,585
412,983
9 %
Average Rentable Vehicles (in whole units)
433,823
393,512
10 %
Vehicle Utilization
77 %
79 %
Transaction Days (in thousands)
30,560
27,879
10 %
Total RPD (in dollars)(b)
$ 56.92
$ 62.08
(8) %
Total RPU Per Month (in whole dollars)(b)
$ 1,337
$ 1,466
(9) %
Depreciation Per Unit Per Month (in whole dollars)(b)
$ 649
$ 282
NM
International RAC Segment
Total revenues
$ 341
$ 317
8 %
Adjusted EBITDA
$ (27)
$ 53
NM
Adjusted EBITDA Margin
(8) %
17 %
Average Vehicles (in whole units)
96,907
91,545
6 %
Average Rentable Vehicles (in whole units)
95,409
89,776
6 %
Vehicle Utilization
72 %
72 %
Transaction Days (in thousands)
6,294
5,908
7 %
Total RPD (in dollars)(b)
$ 55.52
$ 55.06
1 %
Total RPU Per Month (in whole dollars)(b)
$ 1,221
$ 1,208
1 %
Depreciation Per Unit Per Month (in whole dollars)(b)
$ 326
$ 120
NM
NM – Not meaningful
(a)
Represents a non-GAAP measure. See the accompanying reconciliations included in Supplemental Schedule II for 2024 and 2023.
(b)
Based on December 31, 2023 foreign exchange rates.
EARNINGS WEBCAST INFORMATION
Hertz Global’s live webcast and conference call to discuss its first quarter 2024 results will be held on April 25, 2024, at 8:30 a.m. Eastern Time. The conference call will be broadcast live in listen-only mode on the Company’s investor relations website at IR.Hertz.com. If you would like to access the call by phone and ask a question, please go to https://register.vevent.com/register/BI56fe0b7f1062434abaa5ccf4ea43b795, and you will be provided with dial in details. Investors are encouraged to dial-in approximately 15 minutes prior to the call. A web replay will remain available on the website for approximately one year. The earnings release and related supplemental schedules containing the reconciliations of non-GAAP measures will be available on the Hertz website, IR.Hertz.com.
UNAUDITED FINANCIAL DATA, SUPPLEMENTAL SCHEDULES, NON-GAAP MEASURES AND DEFINITIONS
In this earnings release, we include select unaudited financial data of Hertz Global, Supplemental Schedules, which are provided to present segment results, and reconciliations of non-GAAP measures to their most comparable GAAP measures. Following the Supplemental Schedules, the Company provides definitions for terminology used throughout the earnings release and its rationale on the importance and usefulness of non-GAAP measures for investors and management.
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 owns and 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 are identified by words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts," "guidance" or similar expressions, and include information concerning our liquidity, our results of operations, our business strategies, the business environment and other information. These forward-looking 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. The Company believes these judgments are reasonable, but you should understand that these forward-looking statements are not guarantees of future performance or results, and that 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, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed or furnished to the SEC.
Important factors that could affect the Company’s actual results and cause them to differ materially from those expressed in forward-looking statements include, among other things:
mix of program and non-program vehicles in the Company’s fleet, which can lead to increased exposure to residual value risk upon disposition;
the potential for residual values associated with non-program vehicles in the Company’s fleet to decline, including suddenly or unexpectedly, or fail to follow historical seasonal patterns;
the Company’s ability to purchase adequate supplies of competitively priced vehicles at a reasonable cost in order to efficiently service rental demand, including upon any disruptions in the global supply chain;
the Company’s ability to effectively dispose of vehicles, at the times and through the channels, that maximize the Company’s returns;
the age of the Company’s fleet, and its impact on vehicle carrying costs, customer service scores, as well as on the Company’s ability to sell vehicles at acceptable prices and times;
whether a manufacturer of the Company’s program vehicle fulfills its repurchase obligations;
the frequency or extent of manufacturer safety recalls;
levels of travel demand, particularly business and leisure travel in the U.S. and in global markets;
seasonality and other occurrences that disrupt rental activity during the Company’s peak periods, including in critical geographies;
the Company’s ability to accurately estimate future levels of rental activity and adjust the number, location and mix of vehicles used in the Company’s rental operations accordingly;
the Company’s ability to implement its business strategy or strategic transactions, including the Company’s ability to implement plans to support a large-scale EV fleet and to play a central role in the modern mobility ecosystem;
the Company’s ability to adequately respond to changes in technology impacting the mobility industry;
significant changes in the competitive environment and the effect of competition in the Company’s markets on rental volume and pricing;
the Company’s reliance on third-party distribution channels and related prices, commission structures and transaction volumes;
the Company’s ability to offer services for a favorable customer experience, and to retain and develop customer loyalty and market share;
the Company’s ability to maintain its network of leases and vehicle rental concessions at airports and other key locations in the U.S. and internationally;
the Company’s ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;
the Company’s ability to attract and retain effective frontline employees, senior management and other key employees;
the Company’s ability to effectively manage its union relations and labor agreement negotiations;
the Company’s ability to manage and respond to cybersecurity threats and cyber attacks on the Company’s information technology systems, or those of the Company’s third-party providers;
the Company’s ability, and that of the Company’s key third-party partners, to prevent the misuse or theft of information the Company possesses, including as a result of cyber attacks and other security threats;
the Company’s ability to maintain, upgrade and consolidate its information technology systems;
the Company’s ability to comply with current and future laws and regulations in the U.S. and internationally regarding data protection, data security and privacy risks;
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 and the Company’s ability to repatriate cash from non-U.S. affiliates without adverse tax consequences;
risks relating to tax laws, including those that affect the Company’s ability to recapture accelerated tax depreciation and expensing, as well as any adverse determinations or rulings by tax authorities;
the Company’s ability to utilize its net operating loss carryforwards;
the Company’s exposure to uninsured liabilities relating to personal injury, death and property damage, or otherwise, including material litigation;
the potential for adverse changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, including those related to environmental matters, optional insurance products or policies, franchising and licensing matters, the ability to pass-through rental car related expenses, or taxes, among others, that affect the Company’s operations, the Company’s costs or applicable tax rates;
the Company’s ability to recover its goodwill and indefinite-lived intangible assets when performing impairment analysis;
the potential for changes in management’s best estimates and assessments;
the Company’s ability to maintain an effective compliance program;
the availability of earnings and funds from the Company’s subsidiaries;
the Company’s ability to comply, and the cost and burden of complying, with ESG regulations or expectations of stakeholders, and otherwise achieve the Company’s corporate responsibility goals;
the availability of additional or continued sources of financing at acceptable rates for the Company’s revenue earning vehicles and to refinance the Company’s existing indebtedness, and the Company’s ability to comply with the covenants in the agreements governing its indebtedness;
the extent to which the Company’s consolidated assets secure its outstanding indebtedness;
volatility in the Company’s share price, the Company’s ownership structure and certain provisions of the Company’s charter documents could negatively affect the market price of the Company’s common stock;
the Company’s ability to implement an effective business continuity plan to protect the business in exigent circumstances;
the Company’s ability to effectively maintain effective internal control over financial reporting; and
the Company’s ability to execute strategic transactions.
Additional information concerning these and other factors can be found in the Company’s filings with the SEC, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date of this release, 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.
UNAUDITED FINANCIAL INFORMATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 31,
(In millions, except per share data)
2024
2023
Revenues
$ 2,080
$ 2,047
Expenses:
Direct vehicle and operating
1,366
1,221
Depreciation of revenue earning vehicles and lease charges, net
969
381
Depreciation and amortization of non-vehicle assets
32
35
Selling, general and administrative
162
221
Interest expense, net:
Vehicle
141
111
Non-vehicle
75
51
Total interest expense, net
216
162
Other (income) expense, net
2
9
(Gain) on sale of non-vehicle capital assets
—
(162)
Change in fair value of Public Warrants
(86)
118
Total expenses
2,661
1,985
Income (loss) before income taxes
(581)
62
Income tax (provision) benefit
395
134
Net income (loss)
$ (186)
$ 196
Weighted average number of shares outstanding:
Basic
305
321
Diluted
305
323
Earnings (loss) per share:
Basic
$ (0.61)
$ 0.61
Diluted
$ (0.61)
$ 0.61
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In millions, except par value and share data)
March 31, 2024
December 31, 2023
ASSETS
Cash and cash equivalents
$ 465
$ 764
Restricted cash and cash equivalents:
Vehicle
193
152
Non-vehicle
287
290
Total restricted cash and cash equivalents
480
442
Total cash and cash equivalents and restricted cash and cash equivalents
945
1,206
Receivables:
Vehicle
238
211
Non-vehicle, net of allowance of $49 and $47, respectively
975
980
Total receivables, net
1,213
1,191
Prepaid expenses and other assets
751
726
Revenue earning vehicles:
Vehicles
17,052
16,806
Less: accumulated depreciation
(2,435)
(2,155)
Total revenue earning vehicles, net
14,617
14,651
Property and equipment, net
667
671
Operating lease right-of-use assets
2,211
2,253
Intangible assets, net
2,862
2,863
Goodwill
1,044
1,044
Total assets
$ 24,310
$ 24,605
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable:
Vehicle
$ 632
$ 191
Non-vehicle
502
510
Total accounts payable
1,134
701
Accrued liabilities
883
860
Accrued taxes, net
177
157
Debt:
Vehicle
11,846
12,242
Non-vehicle
3,898
3,449
Total debt
15,744
15,691
Public Warrants
367
453
Operating lease liabilities
2,100
2,142
Self-insured liabilities
473
471
Deferred income taxes, net
620
1,038
Total liabilities
21,498
21,513
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, no shares issued and outstanding
—
—
Common stock, $0.01 par value, 480,430,082 and 479,990,286 shares issued, respectively, and 305,618,038 and 305,178,242 shares outstanding, respectively
5
5
Treasury stock, at cost, 174,812,044 and 174,812,044 common shares, respectively
(3,430)
(3,430)
Additional paid-in capital
6,351
6,405
Retained earnings (Accumulated deficit)
174
360
Accumulated other comprehensive income (loss)
(288)
(248)
Total stockholders’ equity
2,812
3,092
Total liabilities and stockholders’ equity
$ 24,310
$ 24,605
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
(In millions)
2024
2023
Cash flows from operating activities:
Net income (loss)
$ (186)
$ 196
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and reserves for revenue earning vehicles, net
1,070
466
Depreciation and amortization, non-vehicle
32
35
Amortization of deferred financing costs and debt discount (premium)
18
14
Stock-based compensation charges
16
21
Stock-based compensation forfeitures
(68)
—
Provision for receivables allowance
31
20
Deferred income taxes, net
(414)
(135)
(Gain) loss on sale of non-vehicle capital assets
1
(162)
Change in fair value of Public Warrants
(86)
118
Changes in financial instruments
6
108
Other
(10)
—
Changes in assets and liabilities:
Non-vehicle receivables
(36)
(50)
Prepaid expenses and other assets
(56)
(48)
Operating lease right-of-use assets
100
78
Non-vehicle accounts payable
(4)
(27)
Accrued liabilities
31
29
Accrued taxes, net
21
1
Operating lease liabilities
(100)
(84)
Self-insured liabilities
4
(18)
Net cash provided by (used in) operating activities
370
562
Cash flows from investing activities:
Revenue earning vehicles expenditures
(1,904)
(2,824)
Proceeds from disposal of revenue earning vehicles
1,233
1,206
Non-vehicle capital asset expenditures
(33)
(45)
Proceeds from non-vehicle capital assets disposed of
3
175
Return of (investment in) equity investments
(2)
—
Net cash provided by (used in) investing activities
(703)
(1,488)
Cash flows from financing activities:
Proceeds from issuance of vehicle debt
534
2,061
Repayments of vehicle debt
(892)
(1,190)
Proceeds from issuance of non-vehicle debt
935
425
Repayments of non-vehicle debt
(490)
(430)
Payment of financing costs
—
(8)
Share repurchases
—
(118)
Other
(2)
(1)
Net cash provided by (used in) financing activities
85
739
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents
(13)
11
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during the period
(261)
(176)
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period
1,206
1,418
Cash and cash equivalents and restricted cash and cash equivalents at end of period
$ 945
$ 1,242
Supplemental Schedule I
HERTZ GLOBAL HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
Three Months Ended March 31, 2024
Three Months Ended March 31, 2023
(In millions)
Americas RAC
International RAC
Corporate
Hertz Global
Americas RAC
International RAC
Corporate
Hertz Global
Revenues
$ 1,739
$ 341
$ —
$ 2,080
$ 1,730
$ 317
$ —
$ 2,047
Expenses:
Direct vehicle and operating
1,152
216
(2)
1,366
1,039
182
—
1,221
Depreciation of revenue earning vehicles and lease charges, net
876
93
—
969
349
32
—
381
Depreciation and amortization of non-vehicle assets
25
4
3
32
28
2
5
35
Selling, general and administrative
124
57
(19)
162
105
37
79
221
Interest expense, net:
Vehicle
116
25
—
141
93
18
—
111
Non-vehicle
(2)
(4)
81
75
(18)
(2)
71
51
Total interest expense, net
114
21
81
216
75
16
71
162
Other (income) expense, net
(1)
1
2
2
(1)
6
4
9
(Gain) on sale of non-vehicle capital assets
—
—
—
—
(162)
—
—
(162)
Change in fair value of Public Warrants
—
—
(86)
(86)
—
—
118
118
Total expenses
2,290
392
(21)
2,661
1,433
275
277
1,985
Income (loss) before income taxes
$ (551)
$ (51)
$ 21
(581)
$ 297
$ 42
$ (277)
62
Income tax (provision) benefit
395
134
Net income (loss)
$ (186)
$ 196
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)
2024
2023
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share:
Net income (loss)(a)
$ (186)
$ 196
Adjustments:
Income tax provision (benefit)
(395)
(134)
Vehicle and non-vehicle debt-related charges(b)
18
14
Restructuring and restructuring related charges(c)
32
3
Acquisition accounting-related depreciation and amortization(d)
—
—
Unrealized (gains) losses on financial instruments(e)
6
108
(Gain) on sale of non-vehicle capital assets(f)
—
(162)
Change in fair value of Public Warrants
(86)
118
Other items(g)(k)
8
14
Adjusted pre-tax income (loss)(h)
(603)
157
Income tax (provision) benefit on adjusted pre-tax income (loss)(i)
211
(31)
Adjusted Net Income (Loss)
$ (392)
$ 126
Weighted-average number of diluted shares outstanding
305
323
Adjusted Diluted Earnings (Loss) Per Share(j)
$ (1.28)
$ 0.39
Adjusted Corporate EBITDA:
Net income (loss)
$ (186)
$ 196
Adjustments:
Income tax provision (benefit)
(395)
(134)
Non-vehicle depreciation and amortization
32
35
Non-vehicle debt interest, net of interest income
75
51
Vehicle debt-related charges(b)
12
10
Restructuring and restructuring related charges(c)
32
3
Unrealized (gains) losses on financial instruments(e)
6
108
(Gain) on sale of non-vehicle capital assets(f)
—
(162)
Non-cash stock-based compensation forfeitures(l)
(64)
—
Change in fair value of Public Warrants
(86)
118
Other items(g)
7
12
Adjusted Corporate EBITDA(l)
$ (567)
$ 237
Adjusted Corporate EBITDA margin
(27) %
12 %
(a)
Net income (loss) margin for the three months ended March 31, 2024 and 2023 was (9)% and 10%, respectively.
(b)
Represents debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.
(c)
Represents charges incurred under restructuring actions as defined in U.S. GAAP, excluding impairments and asset write-downs. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.
(d)
Represents incremental expense associated with the amortization of other intangible assets and depreciation of property and equipment relating to acquisition accounting.
(e)
Represents unrealized gains (losses) on derivative financial instruments. In 2023, also includes the realization of $88 million of previously unrealized gains resulting from the unwind of certain interest rate caps.
(f)
Represents gain on the sale of certain non-vehicle capital assets sold in March 2023.
(g)
Represents miscellaneous items. For the three months ended March 31, 2024, primarily includes certain IT-related charges, partially offset by certain litigation settlements. For the three months ended March 31, 2023, primarily includes certain IT-related charges..
(h)
The table below reconciles expenses as reported in the condensed consolidated unaudited statement of operations to adjusted expenses utilized in calculating Adjusted Pretax Income (Loss) and Adjusted Net Income (Loss), all of which are deemed non-GAAP measures:
(in millions)
Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2023
Expenses:
As Reported
Adjustment
As Adjusted
As Reported
Adjustment
As Adjusted
Direct vehicle and operating
1,366
$ (6)
$ 1,360
1,221
$ —
$ 1,221
Depreciation of revenue earning vehicles and lease charges, net
969
5
974
381
2
383
Depreciation and amortization of non-vehicle assets
32
—
32
35
—
35
Selling, general and administrative
162
(39)
123
221
(14)
207
Interest expense, net:
Vehicle
141
(13)
128
111
(119)
(8)
Non-vehicle
75
(10)
65
51
(8)
43
Total interest expense, net
216
(23)
193
162
(127)
35
Other income (expense), net
2
(1)
1
9
—
9
Gain on sale non-vehicle capital assets
—
—
—
(162)
162
—
Change in fair value of Public Warrants
(86)
86
—
118
(118)
—
Total
$ 2,661
$ 22
$ 2,683
$ 1,985
$ (95)
$ 1,890
(i)
Derived utilizing a combined statutory rate of 35% and 20% for the three months ended March 31, 2024 and 2023, respectively, applied to the respective Adjusted Pre-tax Income (Loss). The increase in rate is primarily resulting from reduced EV-related tax credits anticipated to be used to decrease the Company’s U.S. federal tax provision throughout 2024 based on the Company’s expected purchases of electric vehicles.
(j)
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.
(k)
Also includes letter of credit fees.
(l)
Represents former CEO awards forfeited in March 2024.
(m)
The table below reconciles expenses as reported in the condensed consolidated unaudited statement of operations to adjusted expenses utilized in calculating Adjusted Corporate EBITDA, both of which are deemed non-GAAP measures:
(in millions)
Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2023
Expenses:
As Reported
Adjustment
As Adjusted
As Reported
Adjustment
As Adjusted
Direct vehicle and operating
1,366
$ (6)
$ 1,360
1,221
$ —
$ 1,221
Depreciation of revenue earning vehicles and lease charges, net
969
5
974
381
2
383
Depreciation and amortization of non-vehicle assets
32
(32)
—
35
(35)
—
Selling, general and administrative
162
25
187
221
(14)
207
Interest expense, net:
Vehicle
141
(13)
128
111
(119)
(8)
Non-vehicle
75
(75)
—
51
(51)
—
Total interest expense, net
216
(88)
128
162
(170)
(8)
Other income (expense), net
2
(4)
(2)
9
(2)
7
Gain on sale non-vehicle capital assets
—
—
—
(162)
162
—
Change in fair value of Public Warrants
(86)
86
—
118
(118)
—
Total
$ 2,661
$ (14)
$ 2,647
$ 1,985
$ (175)
$ 1,810
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURE – ADJUSTED OPERATING CASH FLOW
AND ADJUSTED FREE CASH FLOW
Unaudited
Three Months Ended
March 31,
(In millions)
2024
2023
ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW:
Net cash provided by (used in) operating activities
$ 370
$ 562
Depreciation and reserves for revenue earning vehicles, net
(1,070)
(466)
Bankruptcy related payments (post emergence) and other payments
3
8
Adjusted operating cash flow
(697)
104
Non-vehicle capital asset proceeds (expenditures), net
(30)
130
Adjusted operating cash flow before vehicle investment
(727)
234
Net fleet growth after financing
(2)
(317)
Adjusted free cash flow
$ (729)
$ (83)
CALCULATION OF NET FLEET GROWTH AFTER FINANCING:
Revenue earning vehicles expenditures
$ (1,904)
$ (2,824)
Proceeds from disposal of revenue earning vehicles
1,233
1,206
Revenue earning vehicles capital expenditures, net
(671)
(1,618)
Depreciation and reserves for revenue earning vehicles, net
1,070
466
Financing activity related to vehicles:
Borrowings
534
2,061
Payments
(892)
(1,190)
Restricted cash changes, vehicle
(43)
(36)
Net financing activity related to vehicles
(401)
835
Net fleet growth after financing
$ (2)
$ (317)
Supplemental Schedule IV
HERTZ GLOBAL HOLDINGS, INC.
NET DEBT CALCULATION
Unaudited
As of March 31, 2024
As of December 31, 2023
(In millions)
Vehicle
Non-Vehicle
Total
Vehicle
Non-Vehicle
Total
First Lien RCF
$ —
$ 450
$ 450
$ —
$ —
$ —
Term loans
—
2,008
2,008
—
2,013
2,013
Senior notes
—
1,500
1,500
—
1,500
1,500
U.S. vehicle financing (HVF III)
10,051
—
10,051
10,203
—
10,203
International vehicle financing (Various)
1,761
—
1,761
2,001
—
2,001
Other debt
98
2
100
110
2
112
Debt issue costs, discounts and premiums
(64)
(62)
(126)
(72)
(66)
(138)
Debt as reported in the balance sheet
11,846
3,898
15,744
12,242
3,449
15,691
Add:
Debt issue costs, discounts and premiums
64
62
126
72
66
138
Less:
Cash and cash equivalents
—
465
465
—
764
764
Restricted cash
193
—
193
152
—
152
Restricted cash and restricted cash equivalents associated with Term C Loan
—
245
245
—
245
245
Net Debt
$ 11,717
$ 3,250
$ 14,967
$ 12,162
$ 2,506
$ 14,668
LTM Adjusted Corporate EBITDA(a)
(243)
561
Net Corporate Leverage
NM
4.5x
NM – Not meaningful
(a)
Reconciliation of LTM Adjusted Corporate EBITDA for the three months ended March 31, 2024 is as follows:
LTM Adjusted Corporate EBITDA:
Net income (loss) three months ended:
June 30, 2023
$ 139
September 30, 2023
629
December 31, 2023
(348)
March 31, 2024
(186)
LTM net income (loss)
234
Adjustments:
Income tax provision (benefit)
(591)
Non-vehicle depreciation and amortization
146
Non-vehicle debt interest, net of interest income
262
Vehicle debt-related charges
44
Restructuring and restructuring related charge
46
Unrealized (gains) losses on financial instruments
15
Non-cash stock-based compensation forfeitures
(64)
Change in fair value of Public Warrants
(367)
Other items
32
LTM Adjusted Corporate EBITDA
$ (243)
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
KEY METRICS CALCULATIONS
REVENUE, UTILIZATION AND DEPRECIATION
Unaudited
Global RAC
Three Months Ended March 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2024
2023
Total RPD
Revenues
$ 2,080
$ 2,047
Foreign currency adjustment(a)
9
9
Total Revenues – adjusted for foreign currency
$ 2,089
$ 2,056
Transaction Days (in thousands)
36,854
33,787
Total RPD (in dollars)
$ 56.68
$ 60.85
(7) %
Total Revenue Per Unit Per Month
Total Revenues – adjusted for foreign currency
$ 2,089
$ 2,056
Average Rentable Vehicles (in whole units)
529,232
483,288
Total revenue per unit (in whole dollars)
$ 3,947
$ 4,254
Number of months in period (in whole units)
3
3
Total RPU Per Month (in whole dollars)
$ 1,316
$ 1,418
(7) %
Vehicle Utilization
Transaction Days (in thousands)
36,854
33,787
Average Rentable Vehicles (in whole units)
529,232
483,288
Number of days in period (in whole units)
91
90
Available Car Days (in thousands)
48,181
43,609
Vehicle Utilization(b)
76 %
77 %
Depreciation Per Unit Per Month
Depreciation of revenue earning vehicles and lease charges, net
$ 969
$ 381
Foreign currency adjustment(a)
3
2
Adjusted depreciation of revenue earning vehicles and lease charges
$ 972
$ 383
Average Vehicles (in whole units)
547,492
504,528
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)
$ 1,775
$ 759
Number of months in period (in whole units)
3
3
Depreciation Per Unit Per Month (in whole dollars)
$ 592
$ 253
NM
Note: Global RAC represents Americas RAC and International RAC segment information on a combined basis and excludes Corporate
NM – Not meaningful
(a)
Based on December 31, 2023 foreign exchange rates.
(b)
Calculated as Transaction Days divided by Available Car Days.
Supplemental Schedule V (continued)
HERTZ GLOBAL HOLDINGS, INC.
KEY METRICS CALCULATIONS
REVENUE, UTILIZATION AND DEPRECIATION
Unaudited
Americas RAC
Three Months Ended March 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2024
2023
Total RPD
Revenues
$ 1,739
$ 1,730
Foreign currency adjustment(a)
—
1
Total Revenues – adjusted for foreign currency
$ 1,739
$ 1,731
Transaction Days (in thousands)
30,560
27,879
Total RPD (in dollars)
$ 56.92
$ 62.08
(8) %
Total Revenue Per Unit Per Month
Total Revenues – adjusted for foreign currency
$ 1,739
$ 1,731
Average Rentable Vehicles (in whole units)
433,823
393,512
Total revenue per unit (in whole dollars)
$ 4,010
$ 4,398
Number of months in period (in whole units)
3
3
Total RPU Per Month (in whole dollars)
$ 1,337
$ 1,466
(9) %
Vehicle Utilization
Transaction Days (in thousands)
30,560
27,879
Average Rentable Vehicles (in whole units)
433,823
393,512
Number of days in period (in whole units)
91
90
Available Car Days (in thousands)
39,496
35,420
Vehicle Utilization(b)
77 %
79 %
Depreciation Per Unit Per Month
Depreciation of revenue earning vehicles and lease charges, net
$ 876
$ 349
Foreign currency adjustment(a)
1
1
Adjusted depreciation of revenue earning vehicles and lease charges
$ 877
$ 350
Average Vehicles (in whole units)
450,585
412,983
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)
$ 1,947
$ 847
Number of months in period (in whole units)
3
3
Depreciation Per Unit Per Month (in whole dollars)
$ 649
$ 282
NM
NM – Not meaningful
(a)
Based on December 31, 2023 foreign exchange rates.
(b)
Calculated as Transaction Days divided by Available Car Days.
Supplemental Schedule V (continued)
HERTZ GLOBAL HOLDINGS, INC.
KEY METRICS CALCULATIONS
REVENUE, UTILIZATION AND DEPRECIATION
Unaudited
International RAC
Three Months Ended March 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2024
2023
Total RPD
Revenues
$ 341
$ 317
Foreign currency adjustment(a)
8
8
Total Revenues – adjusted for foreign currency
$ 349
$ 325
Transaction Days (in thousands)
6,294
5,908
Total RPD (in dollars)
$ 55.52
$ 55.06
1 %
Total Revenue Per Unit Per Month
Total Revenues – adjusted for foreign currency
$ 349
$ 325
Average Rentable Vehicles (in whole units)
95,409
89,776
Total revenue per unit (in whole dollars)
$ 3,663
$ 3,623
Number of months in period (in whole units)
3
3
Total RPU Per Month (in whole dollars)
$ 1,221
$ 1,208
1 %
Vehicle Utilization
Transaction Days (in thousands)
6,294
5,908
Average Rentable Vehicles (in whole units)
95,409
89,776
Number of days in period (in whole units)
91
90
Available Car Days (in thousands)
8,686
8,191
Vehicle Utilization (b)
72 %
72 %
Depreciation Per Unit Per Month
Depreciation of revenue earning vehicles and lease charges, net
$ 93
$ 32
Foreign currency adjustment(a)
2
1
Adjusted depreciation of revenue earning vehicles and lease charges
$ 95
$ 33
Average Vehicles (in whole units)
96,907
91,545
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)
$ 979
$ 359
Number of months in period (in whole units)
3
3
Depreciation Per Unit Per Month (in whole dollars)
$ 326
$ 120
NM
NM – Not meaningful
(a)
Based on December 31, 2023 foreign exchange rates.
(b)
Calculated as Transaction Days divided by Available Car Days.
NON-GAAP MEASURES AND KEY METRICS
The term "GAAP" refers to accounting principles generally accepted in the United States. 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 EPS")
Adjusted Net Income (Loss) represents income or loss attributable to the Company as adjusted to eliminate the impact of GAAP income tax; vehicle and non-vehicle debt-related charges; restructuring and restructuring related charges; acquisition accounting-related depreciation and amortization; former CEO stock-based compensation award forfeitures; change in fair value of Public Warrants; unrealized (gains) losses on financial instruments, gain on sale of non-vehicle capital assets 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 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 EPS are important operating metrics because they allow management and investors 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; non-vehicle debt interest, net; vehicle debt-related charges; restructuring and restructuring related charges; change in fair value of Public Warrants; unrealized (gains) losses on financial instruments; gain on sale of non-vehicle capital assets 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 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 and investors 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.
Adjusted operating cash flow and adjusted free cash flow
Adjusted operating cash flow represents net cash provided by operating activities net of the non-cash add back for vehicle depreciation and reserves, and exclusive of bankruptcy related payments made post emergence. Adjusted operating cash flow is important to management and investors as it provides useful information about the amount of cash generated from operations when fully burdened by fleet costs.
Adjusted free cash flow represents adjusted operating cash flow plus the impact of net non-vehicle capital expenditures and net fleet growth after financing. Adjusted free cash flow is important to management and investors as it provides useful information about the amount of cash available for, but not limited to, the reduction of non-vehicle debt, share repurchase and acquisition.
The most comparable GAAP measure for adjusted operating cash flow and adjusted free cash flow is net cash provided by (used in) operating activities.
Net Fleet Growth After Financing
U.S. and International Rental Car segments Fleet Growth is defined as revenue earning vehicles expenditures, net of proceeds from disposals, plus vehicle depreciation and net vehicle financing, which includes borrowings, repayments and the change in restricted cash associated with vehicles. Fleet Growth is important as it allows the Company to assess the cash flow required to support its investment in revenue earning vehicles.
Net Non-vehicle Debt
Net Non-vehicle Debt is calculated as non-vehicle debt as reported on the Company’s balance sheet, excluding the impact of unamortized debt issuance costs associated with non-vehicle debt, less cash and cash equivalents. Non-vehicle debt consists of the Company’s Senior Term Loan, Senior RCF, Senior Notes, Senior Second Priority Secured Notes, Promissory Notes and certain other non-vehicle indebtedness of its domestic and foreign subsidiaries. Net Non-vehicle Debt is important to management and investors as it helps measure the Company’s corporate leverage. Net Non-vehicle Debt also assists in the evaluation of the Company’s ability to service its non-vehicle debt without reference to the expense associated with the vehicle debt, which is collateralized by assets not available to lenders under the non-vehicle debt facilities.
Net Vehicle Debt
Net Vehicle Debt is calculated as vehicle debt as reported on the Company’s balance sheet, excluding the impact of unamortized debt issue costs associated with vehicle debt, less restricted cash associated with vehicles. Restricted cash associated with vehicle debt is restricted for the purchase of revenue earning vehicles and other specified uses under the Company’s vehicle debt facilities. Net Vehicle Debt is important to management, investors and ratings agencies as it helps measure the Company’s leverage with respect to its vehicle assets.
Total Net Debt
Total Net Debt is calculated as total debt, excluding the impact of unamortized debt issuance costs, less total cash and cash equivalents and restricted cash associated with vehicle debt. Unamortized debt issuance costs are required to be reported as a deduction from the carrying amount of the related debt obligation under GAAP. Management believes that eliminating the effects that these costs have on debt will more accurately reflect the Company’s net debt position. Total Net Debt is important to management, investors and ratings agencies as it helps measure the Company’s gross leverage.
Net Corporate Leverage
Net Corporate Leverage is calculated as non-vehicle net debt divided by Adjusted Corporate EBITDA for the last twelve months. Net Corporate Leverage is important to management and investors as it measures the Company’s corporate leverage net of unrestricted cash. Net Corporate Leverage also assists in the evaluation of the Company’s ability to service its non-vehicle debt with reference to the generation of Adjusted Corporate EBITDA.
KEY METRICS
Available Rental Car Days
Available Rental Car Days represents Average Rentable Vehicles multiplied by the number of days in a given 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.
Average Rentable Vehicles
Average Rentable Vehicles reflects Average Vehicles excluding vehicles for sale on the Company’s retail lots or actively in the process of being sold through other disposition channels.
Depreciation Per Unit Per Month ("Depreciation Per Unit" or "DPU")
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 so as not to affect the comparability of underlying trends. This metric is important to management and investors as it reflects how effectively the Company is managing the costs of its vehicles and facilitates 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 revenue generated per transaction day, excluding the impact of foreign currency exchange rates so as not to affect the comparability of underlying trends. This metric is important to management and investors as it represents a measure of changes in the 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", "RPU" or "Total RPU Per Month")
Total RPU Per Month represents the amount of revenue generated per vehicle in the rental fleet each month, excluding the impact of foreign currency exchange rates so as not to affect the comparability of underlying trends. This metric is important to management and investors as it provides a measure of revenue productivity relative to the number of vehicles in our rental fleet whether owned or leased, or asset efficiency.
Transaction Days ("Days"; also referred to as "volume")
Transaction Days represents 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 Rental 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 rentable fleet capacity.
ESTERO, Fla., April 8, 2024 /PRNewswire/ — Hertz Global Holdings, Inc. (NASDAQ: HTZ) (the "Company") announced today that it plans to report its first quarter 2024 financial results at approximately 7:30 a.m. ET on Thursday, April 25, 2024 followed by an earnings call at 8:30 a.m. ET.
A live webcast of the call will be available on the Investor Relations page of the Company’s website at https://ir.hertz.com. To access the call by phone, please register through this link: Hertz Q1 2024 earnings teleco registration and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A web replay will remain available on the website for approximately one year.
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.
Transportation veteran to focus on operationally-driven revenue and EBITDA growth
ESTERO, Fla., March 15, 2024 /PRNewswire/ — Hertz Global Holdings, Inc. (NASDAQ: HTZ), a leading global rental car company, today announced that Gil West, former Chief Operating Officer of Delta Airlines and GM’s Cruise unit, will become Chief Executive Officer effective April 1, 2024, at which time he will join the Board. West will succeed Stephen Scherr, who has decided to step down as Chief Executive Officer and member of the Board of Directors on March 31, 2024. West and Scherr will work together over the next several weeks to ensure a smooth transition.
"We are thrilled to have Gil join Hertz as Chief Executive Officer," said Tom Wagner, Vice Chair of the Hertz Board of Directors. "Gil’s experience as a successful leader in operationally intensive businesses will further strengthen the Company’s world class team of over 27,000 global employees who work tirelessly to deliver outstanding service to customers daily. We are appreciative of Stephen’s contribution over the last two years, including on a number of key strategic initiatives, which Gil will now lead in their continued execution."
"I am excited to join Hertz and build on its extraordinary family of brands and global network," said West. "With a 106-year history, Hertz enjoys incredible brand strength and customer loyalty and I look forward to working with the team to achieve its potential for our customers, team members and shareholders."
"Gil’s success in leading over 70,000 people at Delta and orchestrating highly effective operational turnarounds will position him well to lead Hertz. He will be able to build upon the strategic projects begun during Stephen’s tenure, including improvements to technology, commercial partnerships and the revitalization of our value brands. Gil’s prior experience in transportation, travel and mobility will give him important perspective on how to thoughtfully lead Hertz into the future," said Colin Farmer, Lead Director of the Hertz Board of Directors.
"Over the last two years, the Hertz team has worked diligently to put the company on track for long-term success in a changing automotive landscape," said Scherr. "Hertz is well-positioned for the future, and I look forward to seeing the company execute on its strategy as a leader in mobility."
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 owns and 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 the federal securities laws. Words such as "expect", "will" and "intend" and similar expressions identify forward-looking statements, which include but are not limited to statements related to our positioning, strategy, vision, forward looking investments, conditions in the travel industry and our financial and operational condition. 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, 2023, as filed with the SEC on February 12, 2024, 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.
"Our business benefitted from solid demand and a stable rate environment in the fourth quarter," said Stephen Scherr, Hertz chair and chief executive officer. "Nevertheless, we continued to face headwinds related to our electric vehicle fleet and other costs throughout the quarter. We have taken steps to address those challenges and heading into 2024, we are confident that our planned reduction in EVs and cost base, along with the ongoing execution of our enhanced profitability plan, will enable us to regain our operational cadence and improve our financial performance with increasing effect into 2025."
ESTERO, Fla., Feb. 6, 2024 /PRNewswire/ — Hertz Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz", "Hertz Global" or the "Company") today reported results for its fourth quarter and full year 2023.
OVERVIEW
Q4 2023
Revenue of $2.2 billion
GAAP net loss of $348 million, a negative 16% margin, or $1.14 loss per diluted share
Adjusted net loss of $418 million, or $1.36 loss per diluted share
Adjusted Corporate EBITDA of negative $382 million, a negative 17% margin, including recognition of $245 million of net depreciation expense related to the previously announced sale of electric vehicles ("EV")
GAAP operating cash flow of $564 million
Adjusted operating cash outflow of $366 million and adjusted free cash outflow of $128 million
FY 2023
Revenue of $9.4 billion
GAAP net income of $616 million, a 7% margin, or $1.39 per diluted share
Adjusted net income of $172 million, or $0.53 per diluted share
Adjusted Corporate EBITDA of $561 million, a 6% margin, including recognition of $245 million of net depreciation expense related to the previously announced sale of EVs
GAAP operating cash flow of $2.5 billion
Adjusted operating cash flow of $44 million and adjusted free cash outflow of $321 million
Corporate liquidity of $2.0 billion at December 31st, including $764 million in unrestricted cash
Company repurchased 19.4 million shares of common stock for $291 million
FOURTH QUARTER RESULTS
Fourth quarter 2023 revenue was $2.2 billion, up 7% from the fourth quarter of 2022 driven by increased volume across leisure, corporate and rideshare customer channels. Strong fourth quarter 2023 RPD of $58.09 reflected continued price discipline and a moderating trend relative to prior quarterly comparisons. The Company prioritized rate over utilization, purposely forgoing lower margin business.
Depreciation per unit per month of $498 reflected the impact of the write down of EVs held for sale to their fair value and a decline in residual values, as well as a modestly higher than expected fleet.
Fleet interest expense increased to $91 per unit per month in the fourth quarter, up from $55 per unit per month in Q4 of 2022. The increase year over year was largely a reflection of the rising interest rate environment.
Direct operating expense on a per transaction day basis, exclusive of litigation settlements in the fourth quarter of 2022, increased year over year, largely due to elevated net collision and damage expenses.
Adjusted Corporate EBITDA was negative $382 million in the quarter, a negative 17% margin, which includes $245 million of incremental net depreciation expense related to the EVs held for sale.
SUMMARY RESULTS
Three Months Ended
December 31,
Percent Inc/(Dec)
2023 vs 2022
($ in millions, except earnings per share or where noted)
2023
2022
Hertz Global – Consolidated
Total revenues
$ 2,184
$ 2,035
7 %
Net income (loss)
$ (348)
$ 116
NM
Net income (loss) margin
(16) %
6 %
Adjusted net income (loss)(a)
$ (418)
$ 173
NM
Adjusted diluted earnings (loss) per share(a)
$ (1.36)
$ 0.50
NM
Adjusted Corporate EBITDA(a)
$ (382)
$ 309
NM
Adjusted Corporate EBITDA Margin(a)
(17) %
15 %
Average Vehicles (in whole units)
553,545
496,926
11 %
Average Rentable Vehicles (in whole units)
527,267
465,943
13 %
Vehicle Utilization
78 %
79 %
Transaction Days (in thousands)
37,602
33,673
12 %
Total RPD (in dollars)(b)
$ 58.09
$ 60.82
(4) %
Total RPU Per Month (in whole dollars)(b)
$ 1,381
$ 1,485
(7) %
Depreciation Per Unit Per Month (in whole dollars)(b)
$ 498
$ 242
NM
Americas RAC Segment
Total revenues
$ 1,805
$ 1,707
6 %
Adjusted EBITDA
$ (309)
$ 318
NM
Adjusted EBITDA Margin
(17) %
19 %
Average Vehicles (in whole units)
446,573
398,860
12 %
Average Rentable Vehicles (in whole units)
422,155
370,723
14 %
Vehicle Utilization
79 %
80 %
Transaction Days (in thousands)
30,589
27,367
12 %
Total RPD (in dollars)(b)
$ 59.01
$ 62.38
(5) %
Total RPU Per Month (in whole dollars)(b)
$ 1,425
$ 1,535
(7) %
Depreciation Per Unit Per Month (in whole dollars)(b)
$ 552
$ 278
99 %
International RAC Segment
Total revenues
$ 379
$ 328
15 %
Adjusted EBITDA
$ 44
$ 81
(46) %
Adjusted EBITDA Margin
12 %
25 %
Average Vehicles (in whole units)
106,972
98,065
9 %
Average Rentable Vehicles (in whole units)
105,112
95,221
10 %
Vehicle Utilization
73 %
72 %
Transaction Days (in thousands)
7,013
6,305
11 %
Total RPD (in dollars)(b)
$ 54.06
$ 54.02
— %
Total RPU Per Month (in whole dollars)(b)
$ 1,202
$ 1,280
(6) %
Depreciation Per Unit Per Month (in whole dollars)(b)
$ 271
$ 97
NM
NM – Not meaningful
(a)
Represents a non-GAAP measure. See the accompanying reconciliations included in Supplemental Schedule II for 2023 and 2022.
(b)
Based on December 31, 2022 foreign exchange rates.
EARNINGS WEBCAST INFORMATION
Hertz Global’s live webcast and conference call to discuss its fourth quarter and full year 2023 results will be held on February 6, 2024, at 8:30 a.m. Eastern Time. The conference call will be broadcast live in listen-only mode on the Company’s investor relations website at IR.Hertz.com. If you would like to access the call by phone and ask a question, please go to https://register.vevent.com/register/BI57914e10506d4929890ab9400e6c2d1e, and you will be provided with dial in details. Investors are encouraged to dial-in approximately 15 minutes prior to the call. A web replay will remain available on the website for approximately one year. The earnings release and related supplemental schedules containing the reconciliations of non-GAAP measures will be available on the Hertz website, IR.Hertz.com.
UNAUDITED FINANCIAL DATA, SUPPLEMENTAL SCHEDULES, NON-GAAP MEASURES AND DEFINITIONS
In this earnings release, we include select unaudited financial data of Hertz Global, Supplemental Schedules, which are provided to present segment results, and reconciliations of non-GAAP measures to their most comparable GAAP measures. Following the Supplemental Schedules, the Company provides definitions for terminology used throughout the earnings release and its rationale on the importance and usefulness of non-GAAP measures for investors and management.
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 owns and 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 are identified by words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts," "guidance" or similar expressions, and include information concerning our liquidity, our results of operations, our business strategies, the business environment and other information. These forward-looking 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. The Company believes these judgments are reasonable, but you should understand that these forward-looking statements are not guarantees of future performance or results, and that 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, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed or furnished to the SEC.
Important factors that could affect the Company’s actual results and cause them to differ materially from those expressed in forward-looking statements include, among other things:
mix of program and non-program vehicles in the Company’s fleet, which can lead to increased exposure to residual value risk upon disposition;
the potential for declines, including sudden or unexpected declines, in the residual values associated with non-program vehicles in the Company’s fleet;
the Company’s ability to purchase adequate supplies of competitively priced vehicles at a reasonable cost in order to efficiently service rental demand, including upon any disruptions in the global supply chain;
the age of the Company’s fleet, and its impact on vehicle carrying costs, customer service scores, as well as on the Company’s ability to sell vehicles at acceptable prices and times;
whether a manufacturer of the Company’s program vehicle fulfills its repurchase obligations;
the frequency or extent of manufacturer safety recalls;
levels of travel demand, particularly business and leisure travel in the U.S. and in global markets;
seasonality and other occurrences that disrupt rental activity during the Company’s peak periods, including in critical geographies;
the Company’s ability to accurately estimate future levels of rental activity and adjust the number, location and mix of vehicles used in the Company’s rental operations accordingly;
the Company’s ability to implement the Company’s business strategy or strategic transactions, including the Company’s ability to implement plans to support a large-scale electric vehicle fleet and to play a central role in the modern mobility ecosystem;
the Company’s ability to adequately respond to changes in technology impacting the mobility industry;
significant changes in the competitive environment and the effect of competition in the Company’s markets on rental volume and pricing;
the Company’s reliance on third-party distribution channels and related prices, commission structures and transaction volumes;
the Company’s ability to offer services for a favorable customer experience, and to retain and develop customer loyalty and market share;
the Company’s ability to maintain the Company’s network of leases and vehicle rental concessions at airports and other key locations in the U.S. and internationally;
the Company’s ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;
the Company’s ability to attract and retain effective frontline employees, senior management and other key employees;
the Company’s ability to effectively manage the Company’s union relations and labor agreement negotiations;
the Company’s ability to manage and respond to cybersecurity threats and cyber attacks on the Company’s information technology systems, or those of the Company’s third-party providers;
the Company’s ability, and that of the Company’s key third-party partners, to prevent the misuse or theft of information the Company possess, including as a result of cyber attacks and other security threats;
the Company’s ability to maintain, upgrade and consolidate the Company’s information technology systems;
the Company’s ability to comply with current and future laws and regulations in the U.S. and internationally regarding data protection, data security and privacy risks;
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 and the Company’s ability to repatriate cash from non-U.S. affiliates without adverse tax consequences;
risks relating to tax laws, including those that affect the Company’s ability to recapture accelerated tax depreciation and expensing, as well as any adverse determinations or rulings by tax authorities;
the Company’s ability to utilize our net operating loss carryforwards;
the Company’s exposure to uninsured liabilities relating to personal injury, death and property damage, or otherwise, including material litigation;
the potential for adverse changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, including those related to environmental matters, optional insurance products or policies, franchising and licensing matters, the ability to pass-through rental car related expenses, or taxes, among others, that affect the Company’s operations, the Company’s costs or applicable tax rates;
the Company’s ability to recover the Company’s goodwill and indefinite-lived intangible assets when performing impairment analysis;
the potential for changes in management’s best estimates and assessments;
the Company’s ability to maintain an effective compliance program;
the availability of earnings and funds from the Company’s subsidiaries;
the Company’s ability to comply, and the cost and burden of complying, with ESG regulations or expectations of stakeholders, and otherwise achieve the Company’s ESG goals;
the availability of additional or continued sources of financing at acceptable rates for the Company’s revenue earning vehicles and to refinance the Company’s existing indebtedness;
the extent to which the Company’s consolidated assets secure the Company’s outstanding indebtedness;
volatility in the Company’s share price, the Company’s ownership structure and certain provisions of the Company’s charter documents could negatively affect the market price of our common stock;
the Company’s ability to implement an effective business continuity plan to protect the business in exigent circumstances;
the Company’s ability to effectively maintain effective internal controls over financial reporting; and
the Company’s ability to execute strategic transactions.
Additional information concerning these and other factors can be found in the Company’s filings with the SEC, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date of this release, 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.
UNAUDITED FINANCIAL INFORMATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
December 31,
Twelve Months Ended December 31,
(In millions, except per share data)
2023
2022
2023
2022
Revenues
$ 2,184
$ 2,035
$ 9,371
$ 8,685
Expenses:
Direct vehicle and operating
1,388
1,274
5,455
4,808
Depreciation of revenue earning vehicles and lease charges, net
828
360
2,039
701
Depreciation and amortization of non-vehicle assets
49
37
149
142
Selling, general and administrative
247
221
962
959
Interest expense, net:
Vehicle
150
82
555
159
Non-vehicle
68
46
238
169
Total interest expense, net
218
128
793
328
Other (income) expense, net
—
8
12
2
(Gain) on sale of non-vehicle capital assets
—
—
(162)
—
Change in fair value of Public Warrants
(53)
(120)
(163)
(704)
Total expenses
2,677
1,908
9,085
6,236
Income (loss) before income taxes
(493)
127
286
2,449
Income tax (provision) benefit
145
(11)
330
(390)
Net income (loss)
$ (348)
$ 116
$ 616
$ 2,059
Weighted average number of shares outstanding:
Basic
306
332
313
379
Diluted
306
347
326
403
Earnings (loss) per share:
Basic
$ (1.14)
$ 0.35
$ 1.97
$ 5.43
Diluted
$ (1.14)
$ (0.01)
$ 1.39
$ 3.36
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In millions, except par value and share data)
December 31, 2023
December 31, 2022
ASSETS
Cash and cash equivalents
$ 764
$ 943
Restricted cash and cash equivalents:
Vehicle
152
180
Non-vehicle
290
295
Total restricted cash and cash equivalents
442
475
Total cash and cash equivalents and restricted cash and cash equivalents
1,206
1,418
Receivables:
Vehicle
211
111
Non-vehicle, net of allowance of $47 and $45, respectively
980
863
Total receivables, net
1,191
974
Prepaid expenses and other assets
726
1,155
Revenue earning vehicles:
Vehicles
16,806
14,281
Less: accumulated depreciation
(2,155)
(1,786)
Total revenue earning vehicles, net
14,651
12,495
Property and equipment, net
671
637
Operating lease right-of-use assets
2,253
1,887
Intangible assets, net
2,863
2,887
Goodwill
1,044
1,044
Total assets
$ 24,605
$ 22,497
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable:
Vehicle
$ 191
$ 79
Non-vehicle
510
578
Total accounts payable
701
657
Accrued liabilities
860
911
Accrued taxes, net
157
170
Debt:
Vehicle
12,242
10,886
Non-vehicle
3,449
2,977
Total debt
15,691
13,863
Public Warrants
453
617
Operating lease liabilities
2,142
1,802
Self-insured liabilities
471
472
Deferred income taxes, net
1,038
1,360
Total liabilities
21,513
19,852
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, no shares issued and outstanding
—
—
Common stock, $0.01 par value, 479,990,286 and 478,914,062 shares issued, respectively, and
305,178,242 and 323,483,178 shares outstanding, respectively
5
5
Treasury stock, at cost, 174,812,044 and 155,430,884 common shares, respectively
(3,430)
(3,136)
Additional paid-in capital
6,405
6,326
Retained earnings (Accumulated deficit)
360
(256)
Accumulated other comprehensive income (loss)
(248)
(294)
Total stockholders’ equity
3,092
2,645
Total liabilities and stockholders’ equity
$ 24,605
$ 22,497
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended December 31,
Twelve Months Ended December 31,
(In millions)
2023
2022
2023
2022
Cash flows from operating activities:
Net income (loss)
$ (348)
$ 116
$ 616
$ 2,059
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and reserves for revenue earning vehicles, net
932
298
2,422
809
Depreciation and amortization, non-vehicle
49
37
149
142
Amortization of deferred financing costs and debt discount (premium)
17
15
61
53
Stock-based compensation charges
22
34
87
130
Provision for receivables allowance
26
15
93
57
Deferred income taxes, net
(144)
—
(380)
301
(Gain) loss on sale of non-vehicle capital assets
3
—
(162)
(5)
Change in fair value of Public Warrants
(53)
(120)
(163)
(704)
Changes in financial instruments
10
9
117
(111)
Other
(4)
8
5
11
Changes in assets and liabilities:
Non-vehicle receivables
167
(30)
(216)
(264)
Prepaid expenses and other assets
56
(46)
(39)
(126)
Operating lease right-of-use assets
112
78
365
280
Non-vehicle accounts payable
(75)
50
(48)
43
Accrued liabilities
(42)
(103)
(39)
80
Accrued taxes, net
(42)
21
3
73
Operating lease liabilities
(116)
(86)
(391)
(309)
Self-insured liabilities
(6)
(19)
(6)
19
Net cash provided by (used in) operating activities
564
277
2,474
2,538
Cash flows from investing activities:
Revenue earning vehicles expenditures
(1,202)
(2,743)
(9,514)
(10,596)
Proceeds from disposal of revenue earning vehicles
1,320
2,028
5,498
6,498
Non-vehicle capital asset expenditures
(37)
(46)
(188)
(150)
Proceeds from non-vehicle capital assets disposed of
3
2
181
12
Collateral returned in exchange for letters of credit
—
—
—
19
Return of (investment in) equity investments
—
(1)
(1)
(16)
Net cash provided by (used in) investing activities
84
(760)
(4,024)
(4,233)
Cash flows from financing activities:
Proceeds from issuance of vehicle debt
302
1,390
6,043
9,672
Repayments of vehicle debt
(1,098)
(685)
(4,837)
(6,639)
Proceeds from issuance of non-vehicle debt
840
—
2,490
—
Repayments of non-vehicle debt
(505)
(6)
(2,018)
(20)
Payment of financing costs
(10)
(6)
(41)
(48)
Proceeds from exercises of Public Warrants
—
—
—
3
Share repurchases
(43)
(309)
(315)
(2,461)
Other
(6)
(16)
(9)
(20)
Net cash provided by (used in) financing activities
(520)
368
1,313
487
Effect of foreign currency exchange rate changes on cash and cash
equivalents and restricted cash and cash equivalents
22
25
25
(25)
Net increase (decrease) in cash and cash equivalents and restricted cash
and cash equivalents during the period
150
(90)
(212)
(1,233)
Cash and cash equivalents and restricted cash and cash equivalents at
beginning of period
1,056
1,508
1,418
2,651
Cash and cash equivalents and restricted cash and cash equivalents at
end of period
$ 1,206
$ 1,418
$ 1,206
$ 1,418
Supplemental Schedule I
HERTZ GLOBAL HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
Three Months Ended December 31, 2023
Three Months Ended December 31, 2022
(In millions)
Americas RAC
International RAC
Corporate
Hertz Global
Americas RAC
International RAC
Corporate
Hertz Global
Revenues
$ 1,805
$ 379
$ —
$ 2,184
$ 1,707
$ 328
$ —
$ 2,035
Expenses:
Direct vehicle and operating
1,163
229
(4)
1,388
1,098
174
2
1,274
Depreciation of revenue earning vehicles and lease charges, net
740
88
—
828
333
27
—
360
Depreciation and amortization of non-vehicle assets
43
3
3
49
29
3
5
37
Selling, general and administrative
134
105
8
247
81
38
102
221
Interest expense, net:
Vehicle
118
32
—
150
72
10
—
82
Non-vehicle
4
(3)
67
68
(36)
(1)
83
46
Total interest expense, net
122
29
67
218
36
9
83
128
Other (income) expense, net
2
1
(3)
—
(3)
6
5
8
Change in fair value of Public Warrants
—
—
(53)
(53)
—
—
(120)
(120)
Total expenses
2,204
455
18
2,677
1,574
257
77
1,908
Income (loss) before income taxes
$ (399)
$ (76)
$ (18)
(493)
$ 133
$ 71
$ (77)
127
Income tax (provision) benefit
145
(11)
Net income (loss)
$ (348)
$ 116
Supplemental Schedule I (continued)
HERTZ GLOBAL HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
Twelve Months Ended December 31, 2023
Twelve Months Ended December 31, 2022
(In millions)
Americas RAC
International RAC
Corporate
Hertz Global
Americas RAC
International RAC
Corporate
Hertz Global
Revenues
$ 7,722
$ 1,649
$ —
$ 9,371
$ 7,280
$ 1,405
$ —
$ 8,685
Expenses:
Direct vehicle and operating
4,582
880
(7)
5,455
4,080
728
—
4,808
Depreciation of revenue earning vehicles and lease charges, net
1,775
264
—
2,039
553
148
—
701
Depreciation and amortization of non-vehicle assets
125
11
13
149
114
13
15
142
Selling, general and administrative
501
227
234
962
351
180
428
959
Interest expense, net:
Vehicle
456
99
—
555
140
19
—
159
Non-vehicle
(22)
(10)
270
238
(80)
—
249
169
Total interest expense, net
434
89
270
793
60
19
249
328
Other (income) expense, net
2
3
7
12
(6)
3
5
2
(Gain) on sale of non-vehicle capital assets
(162)
—
—
(162)
—
—
—
—
Change in fair value of Public Warrants
—
—
(163)
(163)
—
—
(704)
(704)
Total expenses
7,257
1,474
354
9,085
5,152
1,091
(7)
6,236
Income (loss) before income taxes
$ 465
$ 175
$ (354)
286
$ 2,128
$ 314
$ 7
2,449
Income tax (provision) benefit
330
(390)
Net income (loss)
$ 616
$ 2,059
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 December 31,
Twelve Months Ended December 31,
(In millions, except per share data)
2023
2022
2023
2022
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share:
Net income (loss)(a)
$ (348)
$ 116
$ 616
$ 2,059
Adjustments:
Income tax provision (benefit)
(145)
11
(330)
390
Vehicle and non-vehicle debt-related charges(b)(l)
17
14
62
53
Restructuring and restructuring related charges(c)
7
16
17
45
Acquisition accounting-related depreciation and amortization(d)
1
1
2
3
Unrealized (gains) losses on financial instruments(e)
10
9
117
(111)
(Gain) on sale of non-vehicle capital assets(f)
—
—
(162)
—
Change in fair value of Public Warrants
(53)
(120)
(163)
(704)
Litigation settlements(o)
—
168
—
168
Other items(g)(m)
19
16
43
105
Adjusted pre-tax income (loss)(h)
(492)
231
202
2,008
Income tax (provision) benefit on adjusted pre-tax income (loss)(i)
74
(58)
(30)
(502)
Adjusted Net Income (Loss)
$ (418)
$ 173
$ 172
$ 1,506
Weighted-average number of diluted shares outstanding
306
347
326
403
Adjusted Diluted Earnings (Loss) Per Share(j)
$ (1.36)
$ 0.50
$ 0.53
$ 3.74
Adjusted Corporate EBITDA:
Net income (loss)
$ (348)
$ 116
$ 616
$ 2,059
Adjustments:
Income tax provision (benefit)
(145)
11
(330)
390
Non-vehicle depreciation and amortization(k)
49
37
149
142
Non-vehicle debt interest, net of interest income
68
46
238
169
Vehicle debt-related charges(b)(l)
11
10
42
35
Restructuring and restructuring related charges(c)
7
16
17
45
Unrealized (gains) losses on financial instruments(e)
10
9
117
(111)
(Gain) on sale of non-vehicle capital assets(f)
—
—
(162)
—
Change in fair value of Public Warrants
(53)
(120)
(163)
(704)
Litigation settlements(o)
—
168
—
168
Other items(g)(n)
19
16
37
112
Adjusted Corporate EBITDA
$ (382)
$ 309
$ 561
$ 2,305
Adjusted Corporate EBITDA margin
(17) %
15 %
6 %
27 %
(a)
Net income (loss) margin for the three months ended December 31, 2023 and 2022 was (16)% and 6%, respectively, and for the twelve months ended December 31, 2023 and 2022 was 7% and 24%, respectively.
(b)
Represents debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.
(c)
Represents charges incurred under restructuring actions as defined in U.S. GAAP. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives. Charges incurred in International RAC, Americas RAC and Corporate for the twelve months ended December 31, 2023 were $9 million, $5 million and $3 million, respectively. For 2022, charges incurred related primarily to International RAC.
(d)
Represents incremental expense associated with the amortization of other intangible assets and depreciation of property and equipment relating to acquisition accounting.
(e)
Represents unrealized gains (losses) on derivative financial instruments, primarily associated with Americas RAC. In the twelve months ended December 31, 2023, also includes the realization of $88 million of previously unrealized gains resulting from the unwind of certain interest rate caps in Americas RAC during the first quarter of 2023.
(f)
Represents gain on the sale of certain non-vehicle capital assets sold in March 2023 in Americas RAC.
(g)
Represents miscellaneous items. For 2023, primarily includes certain IT-related costs primarily in Corporate, charges for certain storm-related vehicle damages in Americas RAC and certain professional fees and charges related to the settlement of bankruptcy claims, partially offset by a loss recovery settlement in Americas RAC. For 2022, primarily includes bankruptcy claims, certain professional fees and charges related to the settlement of bankruptcy claims.
(h)
Adjustments by caption on a pre-tax basis were as follows:
Increase (decrease) to expenses
Three Months Ended
December 31,
Twelve Months Ended
December 31,
(In millions)
2023
2022
2023
2022
Direct vehicle and operating
$ (6)
$ (178)
$ (6)
$ (232)
Depreciation of revenue earning vehicles and lease charges, net
—
—
5
—
Selling, general and administrative
(13)
(17)
(38)
(79)
Interest expense, net:
Vehicle
(24)
(16)
(163)
76
Non-vehicle
(9)
(8)
(34)
(28)
Total interest expense, net
(33)
(24)
(197)
48
Other income (expense), net
(2)
(5)
(5)
—
Gain on sale non-vehicle capital assets
—
—
162
Change in fair value of Public Warrants
53
120
163
704
Total adjustments
$ (1)
$ (104)
$ 84
$ 441
(i)
Derived utilizing a combined statutory rate of 15% and 25% for the periods ended December 31, 2023 and 2022, respectively, applied to the respective Adjusted Pre-tax Income (Loss). The decrease in rate is primarily resulting from EV-related tax credits anticipated to be used to decrease the Company’s U.S. federal tax provision throughout 2023 based on the Company’s purchases of electric vehicles.
(j)
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.
(k)
Non-vehicle depreciation and amortization expense for Americas RAC, International RAC and Corporate for the three months ended December 31, 2023 was $43 million, $3 million and $3 million, respectively. For the three months ended December 31, 2022 was $29 million, $5 million and $3 million for Americas RAC, Corporate and International RAC, respectively. Non-vehicle depreciation and amortization for Americas RAC, International RAC and Corporate for the twelve months ended December 31, 2023 was $125 million, $13 million and $11 million, respectively. For the twelve months ended December 31, 2022 was $114 million, $15 million and $13 million for Americas RAC, Corporate and International RAC, respectively.
(l)
Vehicle debt-related charges for Americas RAC and International RAC for the three months ended December 31, 2023 were $10 million and $2 million, respectively. For the three months ended December 31, 2022 vehicle debt-related charges for Americas RAC and International RAC were $8 million and $2 million, respectively. Vehicle debt-related charges for Americas RAC and International RAC for the twelve months ended December 31, 2023 were $36 million and $7 million, respectively. For the twelve months ended December 31, 2022 vehicle debt-related charges were $25 million and $10 million for Americas RAC and International RAC, respectively.
(m)
Also includes letter of credit fees recorded primarily in Corporate.
(n)
In 2022, also includes an adjustment for certain non-cash stock-based compensation charges recorded in Corporate.
(o)
Represents payments made for the settlement of certain claims related to alleged false arrests in our Americas RAC segment.
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURE – ADJUSTED OPERATING CASH FLOW
AND ADJUSTED FREE CASH FLOW
Unaudited
Three Months Ended
December 31,
Twelve Months Ended
December 31,
(In millions)
2023
2022
2023
2022
ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW:
Net cash provided by (used in) operating activities
$ 564
$ 277
$ 2,474
$ 2,538
Depreciation and reserves for revenue earning vehicles, net
(932)
(298)
(2,422)
(809)
Bankruptcy related payments (post emergence) and other payments(a)
2
177
(8)
261
Adjusted operating cash flow
(366)
156
44
1,990
Non-vehicle capital asset proceeds (expenditures), net
(34)
(44)
(7)
(138)
Adjusted operating cash flow before vehicle investment
(400)
112
37
1,852
Net fleet growth after financing
272
312
(358)
(360)
Adjusted free cash flow
$ (128)
$ 424
$ (321)
$ 1,492
CALCULATION OF NET FLEET GROWTH AFTER FINANCING:
Revenue earning vehicles expenditures
$ (1,202)
$ (2,743)
$ (9,514)
$ (10,596)
Proceeds from disposal of revenue earning vehicles
1,320
2,028
5,498
6,498
Revenue earning vehicles capital expenditures, net
118
(715)
(4,016)
(4,098)
Depreciation and reserves for revenue earning vehicles, net
932
298
2,422
809
Financing activity related to vehicles:
Borrowings
302
1,390
6,043
9,672
Payments
(1,098)
(685)
(4,837)
(6,639)
Restricted cash changes, vehicle
18
24
30
(104)
Net financing activity related to vehicles
(778)
729
1,236
2,929
Net fleet growth after financing
$ 272
$ 312
$ (358)
$ (360)
(a)
In 2022, also includes payments made for the settlement of certain claims related to alleged false arrests in our Americas RAC segment.
Supplemental Schedule IV
HERTZ GLOBAL HOLDINGS, INC.
NET DEBT AND NET CORPORATE LEVERAGE CALCULATIONS
Unaudited
(In millions)
As of December 31, 2023
As of December 31, 2022
Vehicle
Non-Vehicle
Total
Vehicle
Non-Vehicle
Total
Term loans
$ —
$ 2,013
$ 2,013
$ —
$ 1,526
$ 1,526
Senior notes
—
1,500
1,500
—
1,500
1,500
U.S. vehicle financing (HVF III)
10,203
—
10,203
9,406
—
9,406
International vehicle financing (Various)
2,001
—
2,001
1,417
—
1,417
Other debt
110
2
112
125
9
134
Debt issue costs, discounts and premiums
(72)
(66)
(138)
(62)
(58)
(120)
Debt as reported in the balance sheet
12,242
3,449
15,691
10,886
2,977
13,863
Add:
Debt issue costs, discounts and premiums
72
66
138
62
58
120
Less:
Cash and cash equivalents
—
764
764
—
943
943
Restricted cash
152
—
152
180
—
180
Restricted cash and restricted cash equivalents
associated with Term C Loan
—
245
245
—
245
245
Net Debt
$ 12,162
$ 2,506
$ 14,668
$ 10,768
$ 1,847
$ 12,615
LTM Adjusted Corporate EBITDA
561
2,305
Net Corporate Leverage
4.5x
0.8x
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
KEY METRICS CALCULATIONS
REVENUE, UTILIZATION AND DEPRECIATION
Unaudited
Global RAC
Three Months Ended
December 31,
Percent Inc/(Dec)
Twelve Months Ended December 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2023
2022
2023
2022
Total RPD
Revenues
$ 2,184
$ 2,035
$ 9,371
$ 8,685
Foreign currency adjustment(a)
—
13
(24)
(8)
Total Revenues – adjusted for foreign currency
$ 2,184
$ 2,048
$ 9,347
$ 8,677
Transaction Days (in thousands)
37,602
33,673
154,189
136,860
Total RPD (in dollars)
$ 58.09
$ 60.82
(4) %
$ 60.62
$ 63.40
(4) %
Total Revenue Per Unit Per Month
Total Revenues – adjusted for foreign currency
$ 2,184
$ 2,076
$ 9,347
$ 8,677
Average Rentable Vehicles (in whole units)
527,267
465,943
526,659
478,798
Total revenue per unit (in whole dollars)
$ 4,143
$ 4,456
$ 17,748
$ 18,123
Number of months in period (in whole units)
3
3
12
12
Total RPU Per Month (in whole dollars)
$ 1,381
$ 1,485
(7) %
$ 1,479
$ 1,510
(2) %
Vehicle Utilization
Transaction Days (in thousands)
37,602
33,673
154,189
136,860
Average Rentable Vehicles (in whole units)
527,267
465,943
526,659
478,798
Number of days in period (in whole units)
92
92
365
365
Available Car Days (in thousands)
48,511
42,870
192,334
174,826
Vehicle Utilization(b)
78 %
79 %
80 %
78 %
Depreciation Per Unit Per Month
Depreciation of revenue earning vehicles and lease charges, net
$ 828
$ 360
$ 2,039
$ 701
Foreign currency adjustment(a)
(1)
1
(4)
1
Adjusted depreciation of revenue earning vehicles and lease charges
$ 827
$ 361
$ 2,035
$ 702
Average Vehicles (in whole units)
553,545
496,926
552,460
506,046
Adjusted depreciation of revenue earning vehicles and lease charges
divided by Average Vehicles (in whole dollars)
$ 1,494
$ 727
$ 3,684
$ 1,386
Number of months in period (in whole units)
3
3
12
12
Depreciation Per Unit Per Month (in whole dollars)
$ 498
$ 242
NM
$ 307
$ 116
NM
Note: Global RAC represents Americas RAC and International RAC segment information on a combined basis and excludes Corporate
NM – Not meaningful
(a)
Based on December 31, 2022 foreign exchange rates.
(b)
Calculated as Transaction Days divided by Available Car Days.
Supplemental Schedule V (continued)
HERTZ GLOBAL HOLDINGS, INC.
KEY METRICS CALCULATIONS
REVENUE, UTILIZATION AND DEPRECIATION
Unaudited
Americas RAC
Three Months Ended
December 31,
Percent Inc/(Dec)
Twelve Months Ended December 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2023
2022
2023
2022
Total RPD
Revenues
$ 1,805
$ 1,707
$ 7,722
$ 7,280
Foreign currency adjustment(a)
—
—
(3)
(12)
Total Revenues – adjusted for foreign currency
$ 1,805
$ 1,707
$ 7,719
$ 7,268
Transaction Days (in thousands)
30,589
27,367
125,215
111,759
Total RPD (in dollars)
$ 59.01
$ 62.38
(5) %
$ 61.65
$ 65.03
(5) %
Total Revenue Per Unit Per Month
Total Revenues – adjusted for foreign currency
$ 1,805
$ 1,707
$ 7,719
$ 7,268
Average Rentable Vehicles (in whole units)
422,155
370,723
422,485
385,234
Total revenue per unit (in whole dollars)
$ 4,276
$ 4,605
$ 18,271
$ 18,867
Number of months in period (in whole units)
3
3
12
12
Total RPU Per Month (in whole dollars)
$ 1,425
$ 1,535
(7) %
$ 1,523
$ 1,572
(3) %
Vehicle Utilization
Transaction Days (in thousands)
30,589
27,367
125,215
111,759
Average Rentable Vehicles (in whole units)
422,155
370,723
422,485
385,234
Number of days in period (in whole units)
92
92
365
365
Available Car Days (in thousands)
38,839
34,109
154,272
140,647
Vehicle Utilization(b)
79 %
80 %
81 %
79 %
Depreciation Per Unit Per Month
Depreciation of revenue earning vehicles and lease charges, net
$ 740
$ 333
$ 1,775
$ 553
Foreign currency adjustment(a)
—
—
1
1
Adjusted depreciation of revenue earning vehicles and lease charges
$ 740
$ 333
$ 1,776
$ 554
Average Vehicles (in whole units)
446,573
398,860
446,219
411,047
Adjusted depreciation of revenue earning vehicles and lease charges
divided by Average Vehicles (in whole dollars)
$ 1,657
$ 834
$ 3,981
$ 1,347
Number of months in period (in whole units)
3
3
12
12
Depreciation Per Unit Per Month (in whole dollars)
$ 552
$ 278
99 %
$ 332
$ 112
NM
NM – Not meaningful
(a)
Based on December 31, 2022 foreign exchange rates.
(b)
Calculated as Transaction Days divided by Available Car Days.
Supplemental Schedule V (continued)
HERTZ GLOBAL HOLDINGS, INC.
KEY METRICS CALCULATIONS
REVENUE, UTILIZATION AND DEPRECIATION
Unaudited
International RAC
Three Months Ended December 31,
Percent Inc/(Dec)
Twelve Months Ended December 31,
Percent Inc/(Dec)
($ in millions, except where noted)
2023
2022
2023
2022
Total RPD
Revenues
$ 379
$ 328
$ 1,649
$ 1,405
Foreign currency adjustment(a)
—
13
(21)
4
Total Revenues – adjusted for foreign currency
$ 379
$ 341
$ 1,628
$ 1,409
Transaction Days (in thousands)
7,013
6,305
28,974
25,101
Total RPD (in dollars)
$ 54.06
$ 54.02
— %
$ 56.19
$ 56.14
— %
Total Revenue Per Unit Per Month
Total Revenues – adjusted for foreign currency
$ 379
$ 366
$ 1,628
$ 1,409
Average Rentable Vehicles (in whole units)
105,112
95,221
104,173
93,564
Total revenue per unit (in whole dollars)
$ 3,607
$ 3,840
$ 15,627
$ 15,062
Number of months in period (in whole units)
3
3
12
12
Total RPU Per Month (in whole dollars)
$ 1,202
$ 1,280
(6) %
$ 1,302
$ 1,255
4 %
Vehicle Utilization
Transaction Days (in thousands)
7,013
6,305
28,974
25,101
Average Rentable Vehicles (in whole units)
105,112
95,221
104,173
93,564
Number of days in period (in whole units)
92
92
365
365
Available Car Days (in thousands)
9,672
8,777
38,061
34,179
Vehicle Utilization(b)
73 %
72 %
76 %
73 %
Depreciation Per Unit Per Month
Depreciation of revenue earning vehicles and lease charges, net
$ 88
$ 27
$ 264
$ 148
Foreign currency adjustment(a)
(1)
1
(5)
—
Adjusted depreciation of revenue earning vehicles and lease charges
$ 87
$ 28
$ 259
$ 148
Average Vehicles (in whole units)
106,972
98,065
106,240
94,999
Adjusted depreciation of revenue earning vehicles and lease charges
divided by Average Vehicles (in whole dollars)
$ 812
$ 290
$ 2,434
$ 1,556
Number of months in period (in whole units)
3
3
12
12
Depreciation Per Unit Per Month (in whole dollars)
$ 271
$ 97
NM
$ 203
$ 130
56 %
NM – Not meaningful
(a)
Based on December 31, 2022 foreign exchange rates.
(b)
Calculated as Transaction Days divided by Available Car Days.
NON-GAAP MEASURES AND KEY METRICS
The term "GAAP" refers to accounting principles generally accepted in the United States. 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 EPS")
Adjusted Net Income (Loss) represents income or loss attributable to the Company as adjusted to eliminate the impact of GAAP income tax; vehicle and non-vehicle debt-related charges; restructuring and restructuring related charges; acquisition accounting-related depreciation and amortization; change in fair value of Public Warrants; unrealized (gains) losses on financial instruments, gain on sale of non-vehicle capital assets 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 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 EPS are important operating metrics because they allow management and investors 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; non-vehicle debt interest, net; vehicle debt-related charges; restructuring and restructuring related charges; change in fair value of Public Warrants; unrealized (gains) losses on financial instruments; gain on sale of non-vehicle capital assets 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 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 and investors 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.
Adjusted operating cash flow and adjusted free cash flow
Adjusted operating cash flow represents net cash provided by operating activities net of the non-cash add back for vehicle depreciation and reserves, and exclusive of bankruptcy related payments made post emergence. Adjusted operating cash flow is important to management and investors as it provides useful information about the amount of cash generated from operations when fully burdened by fleet costs.
Adjusted free cash flow represents adjusted operating cash flow plus the impact of net non-vehicle capital expenditures and net fleet growth after financing. Adjusted free cash flow is important to management and investors as it provides useful information about the amount of cash available for, but not limited to, the reduction of non-vehicle debt, share repurchase and acquisition.
The most comparable GAAP measure for adjusted operating cash flow and adjusted free cash flow is net cash provided by (used in) operating activities.
Net Fleet Growth After Financing
U.S. and International Rental Car segments Fleet Growth is defined as revenue earning vehicles expenditures, net of proceeds from disposals, plus vehicle depreciation and net vehicle financing, which includes borrowings, repayments and the change in restricted cash associated with vehicles. Fleet Growth is important as it allows the Company to assess the cash flow required to support its investment in revenue earning vehicles.
Net Non-vehicle Debt
Net Non-vehicle Debt is calculated as non-vehicle debt as reported on the Company’s balance sheet, excluding the impact of unamortized debt issuance costs associated with non-vehicle debt, less cash and cash equivalents. Non-vehicle debt consists of the Company’s Senior Term Loan, Senior RCF, Senior Notes, Senior Second Priority Secured Notes, Promissory Notes and certain other non-vehicle indebtedness of its domestic and foreign subsidiaries. Net Non-vehicle Debt is important to management and investors as it helps measure the Company’s corporate leverage. Net Non-vehicle Debt also assists in the evaluation of the Company’s ability to service its non-vehicle debt without reference to the expense associated with the vehicle debt, which is collateralized by assets not available to lenders under the non-vehicle debt facilities.
Net Vehicle Debt
Net Vehicle Debt is calculated as vehicle debt as reported on the Company’s balance sheet, excluding the impact of unamortized debt issue costs associated with vehicle debt, less restricted cash associated with vehicles. Restricted cash associated with vehicle debt is restricted for the purchase of revenue earning vehicles and other specified uses under the Company’s vehicle debt facilities. Net Vehicle Debt is important to management, investors and ratings agencies as it helps measure the Company’s leverage with respect to its vehicle assets.
Total Net Debt
Total Net Debt is calculated as total debt, excluding the impact of unamortized debt issuance costs, less total cash and cash equivalents and restricted cash associated with vehicle debt. Unamortized debt issuance costs are required to be reported as a deduction from the carrying amount of the related debt obligation under GAAP. Management believes that eliminating the effects that these costs have on debt will more accurately reflect the Company’s net debt position. Total Net Debt is important to management, investors and ratings agencies as it helps measure the Company’s gross leverage.
Net Corporate Leverage
Net Corporate Leverage is calculated as non-vehicle net debt divided by Adjusted Corporate EBITDA for the last twelve months. Net Corporate Leverage is important to management and investors as it measures the Company’s corporate leverage net of unrestricted cash. Net Corporate Leverage also assists in the evaluation of the Company’s ability to service its non-vehicle debt with reference to the generation of Adjusted Corporate EBITDA.
KEY METRICS
Available Rental Car Days
Available Rental Car Days represents Average Rentable Vehicles multiplied by the number of days in a given 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.
Average Rentable Vehicles
Average Rentable Vehicles reflects Average Vehicles excluding vehicles for sale on the Company’s retail lots or actively in the process of being sold through other disposition channels.
Depreciation Per Unit Per Month ("Depreciation Per Unit" or "DPU")
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 so as not to affect the comparability of underlying trends. This metric is important to management and investors as it reflects how effectively the Company is managing the costs of its vehicles and facilitates 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 revenue generated per transaction day, excluding the impact of foreign currency exchange rates so as not to affect the comparability of underlying trends. This metric is important to management and investors as it represents a measure of changes in the 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", "RPU" or "Total RPU Per Month")
Total RPU Per Month represents the amount of revenue generated per vehicle in the rental fleet each month, excluding the impact of foreign currency exchange rates so as not to affect the comparability of underlying trends. This metric is important to management and investors as it provides a measure of revenue productivity relative to the number of vehicles in our rental fleet whether owned or leased, or asset efficiency.
Transaction Days ("Days"; also referred to as "volume")
Transaction Days represents 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 Rental 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 rentable fleet capacity.
ESTERO, Fla., Jan. 11, 2024 /PRNewswire/ — Hertz Global Holdings, Inc. (NASDAQ: HTZ) (the "Company") announced today that it plans to report its fourth quarter 2023 financial results at approximately 7:30 a.m. ET on Tuesday February 6, 2024 followed by an earnings call at 8:30 a.m. ET.
A live webcast of the call will be available on the Investor Relations page of the Company’s website at https://ir.hertz.com. To access the call by phone, please register through this link: Hertz Q4 2023 earnings call teleco registration and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A web replay will remain available on the website for approximately one year.
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.
ESTERO, Fla., Oct. 24, 2023 /PRNewswire/ — Hertz Global Holdings, Inc., (NASDAQ: HTZ), a global leader in car rental, today announced that Justin Keppy will join the company as Executive Vice President and Chief Operating Officer, effective November 15, 2023. In this role, Keppy will be responsible for running the day-to-day operations of the company’s global business.
Hertz Announces Justin Keppy as Chief Operating Officer, effective November 15, 2023.
Keppy joins Hertz from Carrier Corporation where he most recently served as President, North America Residential & Light Commercial HVAC. He took the helm of Carrier’s largest business at the onset of the pandemic and led the organization through one of its most complex periods. Under his leadership, the division won share and drove exceptional topline growth while significantly increasing profitability.
“Justin is a seasoned leader with more than 25 years of operational experience in both the private sector and the U.S. military,” said Hertz CEO and Chair, Stephen Scherr. “He is passionate about building high-performing teams and strong customer relationships to help drive revenue and operational efficiencies. I look forward to working closely with him as he leads the day-to-day execution of our business.”
Prior to Carrier, Keppy served in a variety of senior roles within UTC Aerospace Systems, including President, Sensors & Integrated Systems and Vice President, Operations & Supply Chain, as well as Vice President, Manufacturing, for Hamilton Sundstrand. Before that, he held operations leadership positions with Shawmut Corporation, Ford Motor Company and the U.S. Army.
“I’m thrilled to join Hertz at such a transformational time for the company and the broader travel and automotive industries,” said Keppy. “I look forward to working with Stephen and the amazing team at Hertz to execute the company’s strategic plan to drive value for employees, customers and investors.”
Keppy earned an MBA from Harvard Business School and a bachelor’s degree in Systems Engineering from the United States Military Academy, West Point where he was a distinguished graduate and awarded the Colonial Dames: XVII Century Award for Excellence in Systems Engineering.
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.
ESTERO, Fla., Oct. 3, 2023 /PRNewswire/ — Hertz Global Holdings, Inc. (NASDAQ: HTZ) (the "Company") announced today that it plans to report its third quarter 2023 financial results at approximately 7:30 a.m. ET on Thursday, October 26, 2023 followed by an earnings call at 8:30 a.m. ET.
A live webcast of the call will be available on the Investor Relations page of the Company’s website at https://ir.hertz.com. To access the call by phone, please register through this link: Hertz Q3 2023 earnings teleco registration and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A web replay will remain available on the website for approximately one year.
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.
Mayor Adams Partners with Hertz to Add Electric Vehicles, Create Jobs, and Provide Workforce Training
NEW YORK, Sept. 20, 2023 /PRNewswire/ — During New York City Climate Week, Hertz (NASDAQ: HTZ) CEO Stephen Scherr and New York City Mayor Eric Adams launched "Hertz Electrifies New York City," a public-private partnership aimed at increasing electric vehicle (EV) adoption and extending the environmental and economic benefits of electrification across neighborhoods.
Through the initiative, Hertz intends to add up to 1,700 rental EVs to its local fleet, create 100 new jobs to serve its growing New York presence, and partner with four public high schools to create EV education and training opportunities for students. The partnership also includes the donation of five EVs from Hertz’s fleet to help New York City schools provide hands-on training to the next generation of auto technicians.
"Hertz is investing in the largest EV rental fleet in North America," said Stephen Scherr, Hertz Chair and CEO. "New York City has always been on the cutting edge of technology and innovation, making it a natural accelerator for the most significant transformation that’s happened in the auto industry in a century. We are excited to partner with Mayor Adams to launch Hertz Electrifies during Climate Week, helping to make the electric driving experience more accessible in New York City while investing in the city’s workforce."
"New York City is in the driver’s seat as we accelerate towards our clean, green, electric future, and public-private partnerships, like what we’re announcing today with Hertz, will help us get there because to successfully transition New York City to electric vehicles and properly fight climate change, everyone must come along for the ride — from the public to the private sector," said New York City Mayor Eric Adams. "As we celebrate Climate Week, we’re proud to announce an expansion of our partnership with Hertz. This investment will also make more EVs available to New Yorkers, while preparing our youth for the emerging green economy of the future and helping us fight climate change from behind the wheel."
As part of Hertz Electrifies New York City, Hertz is partnering with and donating electric vehicles to A-Tech High School in Brooklyn, Thomas Edison Career and Technical Education High School in Queens, Alfred E. Smith Career and Technical Education High School in the Bronx and Ralph R. McKee Career and Technical Education High School on Staten Island.
"We are excited to announce this dynamic partnership with Hertz Electrifies," said First Deputy Mayor Sheena Wright. "Creating a better and more eco-friendly environment requires more than a singular change. Through this partnership, not only are we building a cleaner city by introducing more electric vehicles to New York City, but we are also preparing for the future by training the next generation of a green economy workforce."
Additionally, Hertz is sharing telematic insights from its fleet of connected cars to assist the city in planning for additional public charging infrastructure across all neighborhoods through its Hertz Charging Opportunity Index.
As the Mayor’s EV initiatives are implemented, Hertz will continue making its EV fleet available to rideshare drivers in New York City. To date, more than 50,000 rideshare drivers across the country have rented EVs from Hertz, logging more than 260 million electric miles.
To support its growing EV presence in New York, Hertz is working with bp to launch bp pulse fast charging hubs in New York City, starting with midtown Manhattan. These sites will feature ultra-fast chargers of 150kW+ designed to serve Hertz customers, taxi and ride-share drivers, and the public.
New York City is committed to cutting transportation emissions in half by 2030 and achieving net-zero transportation emissions by 2050. This requires helping more New Yorkers walk, bike, and take public transit, and, when they need to drive, encouraging them to drive electric — a key component of Mayor Adams’ "PlaNYC: Getting Sustainability Done." The plan commits to ensuring no New Yorker is more than 2.5 miles from an electric vehicle fast-charging hub, requires parking garages and lots to make charging available to their customers, and requires all rideshare vehicles to be either zero-emission or wheelchair accessible by 2030. The city is also supporting the electrification of freight vehicles, working to pilot the East Coast’s first low-emissions zone, and creating shared charging depots for electric trucks. The city is leading by example with its own fleet, having already replaced nearly 4,500 fossil-fuel powered vehicles with electric vehicles and operating its own 1,700-port electric vehicle charging network.
"New York City is always leading the charge in modeling important transformation for our country and the city’s investment in the green economy is no different," said DOE Chancellor David C. Banks. "There’s no better way to ensure that we see the return on that investment than to have our students trained on the importance of electric vehicles. Not only are we setting our children up with bold futures in emerging industries, but we are teaching them to use innovation to create a better tomorrow for everyone."
New York is the fifth and largest city to partner with Hertz through Hertz Electrifies to accelerate consumer adoption of electric vehicles and bring environmental and economic benefits to communities across the country.
About Hertz Electrifies Hertz Electrifies is a public-private partnership aimed at furthering the mainstream adoption of electric vehicles and extending the benefits of electrification to communities throughout the United States. The initiative works to: (1) expand electric vehicle fleets (2) accelerate EV charging infrastructure; (3) build education and training opportunities for jobs of the future; and (4) help broaden economic opportunity through electrification. For more information visit www.hertz.com/electrifies.
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. Hertz has tens of thousands of EVs available at more than 500 Hertz locations across 38 states.
Cautionary Note Concerning Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of the federal securities laws. Words such as "aim," "create," "accelerate," "transition," "will," "build," "future," "transform," "invest," "shift," "launch," "increase," "initiative," "expand," add," and "develop," and similar expressions identify forward-looking statements, which include but are not limited to statements related to the expansion of Hertz’s EV fleet and its partnership with Uber, installation of charging infrastructure including in partnership with bp, and any other statements regarding future expectations, beliefs, plans, objectives, future events or performance. 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 Hertz’s ability to expand its EV fleet, develop and install sufficient EV charging infrastructure, and otherwise execute on its strategic plans, as well as other factors identified in the risk factors of Hertz’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission (the "SEC") on February 23, 2022 and any updates thereto in subsequent filings with the SEC including in Hertz’s Quarterly Reports on Form 10-Q. We caution you not to place undue reliance on our forward-looking statements, which speak only as of their date, and Hertz undertakes no obligation to update this information.
