HERTZ REPORTS SECOND QUARTER 2023 RESULTS: REVENUE OF $2.4 BILLION, NET INCOME OF $139 MILLION AND ADJUSTED CORPORATE EBITDA OF $347 MILLION
"Results for the second quarter were strong, reflecting continued high demand for our services and elevated levels of fleet utilization," said
HIGHLIGHTS
- Total revenues of
$2.4 billion - GAAP net income of
$139 million , a 6% margin, or$0.44 per diluted share - Adjusted Net Income of
$227 million , or$0.72 per adjusted diluted share - Adjusted Corporate EBITDA of
$347 million , a 14% margin - Operating cash flow of
$497 million , adjusted operating cash flow of$91 million - Adjusted free cash outflow of
$423 million - Corporate liquidity of
$1.4 billion atJune 30 , including$682 million in unrestricted cash - Company utilized
$100 million to repurchase 6.3 million common shares during the quarter
SECOND QUARTER RESULTS
Second quarter revenue of
Adjusted Corporate EBITDA was
Adjusted free cash outflow of $423 million in the quarter reflected an investment in fleet to meet spring and summer demand.
The Company's liquidity position was
SUMMARY RESULTS
Three Months Ended |
Percent Inc/(Dec) 2023 vs 2022 |
||||
($ in millions, except earnings per share or where noted) |
2023 |
2022 |
|||
|
|||||
Total revenues |
$ 2,437 |
$ 2,344 |
4 % |
||
Adjusted net income (loss)(a) |
$ 227 |
$ 520 |
(56) % |
||
Adjusted diluted earnings (loss) per share(a) |
$ 0.72 |
$ 1.22 |
(41) % |
||
Adjusted Corporate EBITDA(a) |
$ 347 |
$ 764 |
(55) % |
||
Adjusted Corporate EBITDA Margin(a) |
14 % |
33 % |
|||
Average Vehicles (in whole units) |
561,277 |
513,307 |
9 % |
||
Average Rentable Vehicles (in whole units) |
533,813 |
490,236 |
9 % |
||
Vehicle Utilization |
82 % |
79 % |
|||
Transaction Days (in thousands) |
39,705 |
35,444 |
12 % |
||
Total RPD (in dollars)(b) |
$ 61.14 |
$ 65.79 |
(7) % |
||
Total RPU Per Month (in whole dollars)(b) |
$ 1,516 |
$ 1,586 |
(4) % |
||
Depreciation Per Unit Per Month (in whole dollars)(b) |
$ 195 |
$ 68 |
NM |
||
Americas RAC Segment |
|||||
Total revenues |
$ 2,015 |
$ 1,973 |
2 % |
||
Adjusted EBITDA |
$ 331 |
$ 770 |
(57) % |
||
Adjusted EBITDA Margin |
16 % |
39 % |
|||
Average Vehicles (in whole units) |
457,405 |
422,113 |
8 % |
||
Average Rentable Vehicles (in whole units) |
431,921 |
399,588 |
8 % |
||
Vehicle Utilization |
83 % |
80 % |
|||
Transaction Days (in thousands) |
32,469 |
29,160 |
11 % |
||
Total RPD (in dollars)(b) |
$ 62.03 |
$ 67.52 |
(8) % |
||
Total RPU Per Month (in whole dollars)(b) |
$ 1,554 |
$ 1,643 |
(5) % |
||
Depreciation Per Unit Per Month (in whole dollars)(b) |
$ 198 |
$ 49 |
NM |
||
International RAC Segment |
|||||
Total revenues |
$ 422 |
$ 371 |
14 % |
||
Adjusted EBITDA |
$ 96 |
$ 92 |
4 % |
||
Adjusted EBITDA Margin |
23 % |
25 % |
|||
Average Vehicles (in whole units) |
103,872 |
91,194 |
14 % |
||
Average Rentable Vehicles (in whole units) |
101,892 |
90,648 |
12 % |
||
Vehicle Utilization |
78 % |
76 % |
|||
Transaction Days (in thousands) |
7,237 |
6,284 |
15 % |
||
Total RPD (in dollars)(b) |
$ 57.16 |
$ 57.77 |
(1) % |
||
Total RPU Per Month (in whole dollars)(b) |
$ 1,353 |
$ 1,335 |
1 % |
||
Depreciation Per Unit Per Month (in whole dollars)(b) |
$ 180 |
$ 160 |
13 % |
NM - Not meaningful |
(a) Represents a non-GAAP measure. See the accompanying reconciliations included in Supplemental Schedule II. |
(b) Based on |
EARNINGS WEBCAST INFORMATION
UNAUDITED FINANCIAL DATA, SUPPLEMENTAL SCHEDULES, NON-GAAP MEASURES AND DEFINITIONS
Following is selected financial data of
ABOUT
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this release, and in related comments by the Company's management, include "forward-looking statements." Forward-looking statements include information concerning the Company's liquidity and its possible or assumed future results of operations, including descriptions of its business strategies. These statements often include words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts," "guidance" or similar expressions. These statements are based on certain assumptions that the Company has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate in these circumstances. The Company believes these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and 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 on Form 10-K, 10-Q and 8-K filed or furnished to the
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:
- the Company's ability to purchase adequate supplies of competitively priced vehicles at a reasonable cost in order to efficiently service rental demand, including as a result of disruptions in the global supply chain;
- the Company's ability to attract and retain effective frontline employees, senior management and other key employees;
- levels of travel demand, particularly business and leisure travel in the
U.S. and in global markets; - significant changes in the competitive environment and the effect of competition in the Company's markets on rental volume and pricing;
- occurrences that disrupt rental activity during the Company's peak periods particularly in critical geographies;
- the Company's ability to accurately estimate future levels of rental activity and adjust the number and mix of vehicles used in its rental operations accordingly;
- the Company's ability to implement its business strategy or strategic transactions, including its ability to implement plans to support a large-scale electric vehicle fleet, execute its rideshare strategy 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;
- the mix of vehicles in the Company's fleet, including but not limited to program and non-program vehicles, which can lead to increased exposure to residual risk upon disposition;
- increases in vehicle holding periods, which may result in additional maintenance costs and lower customer satisfaction;
- financial instability of the manufacturers of the Company's vehicles, which could impact their ability to fulfill obligations under repurchase or guaranteed depreciation programs;
- increases in the level of recall activity by the manufacturers of the Company's vehicles, which may increase the Company's costs and can disrupt its rental activity;
- the Company's access to third-party distribution channels and related prices, commission structures and transaction volumes associated with those channels;
- the Company's ability to offer an excellent customer experience, retain and increase customer loyalty and increase 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 effectively manage its union relations and labor agreement negotiations;
- the Company's ability, and that of its key third-party partners, to prevent the misuse or theft of information the Company possesses, including as a result of cyber security breaches and other security threats, as well as to comply with privacy regulations across the globe;
- a major disruption in the Company's communication or centralized information networks or a failure to maintain, upgrade and consolidate its information technology systems;
- 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 offset future tax on fleet dispositions, 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;
- changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, including those related to accounting principles, that affect the Company's operations, its costs or applicable tax rates;
- the recoverability of the Company's goodwill and indefinite-lived intangible assets when performing impairment analysis;
- costs and risks associated with potential litigation and investigations, compliance with and changes in laws and regulations and potential exposures under environmental laws and regulations;
- the Company's ability to comply with ESG regulations, meet increasing ESG expectations of stakeholders, and otherwise achieve ESG goals;
- the availability of additional or continued sources of financing at acceptable rates for the Company's revenue earning vehicles and to refinance its existing indebtedness;
- volatility in the Company's stock price and certain provisions of its charter documents which could negatively affect the market price of the Company's common stock;
- the Company's ability to effectively maintain effective internal controls over financial reporting; and
- the Company's ability to implement an effective business continuity plan to protect the business in exigent circumstances.
Additional information concerning these and other factors can be found in the Company's filings with the
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 |
Six Months Ended |
||||||
(In millions, except per share data) |
2023 |
2022 |
2023 |
2022 |
|||
Revenues |
$ 2,437 |
$ 2,344 |
$ 4,484 |
$ 4,154 |
|||
Expenses: |
|||||||
Direct vehicle and operating |
1,347 |
1,199 |
2,568 |
2,252 |
|||
Depreciation of revenue earning vehicles and lease charges, net |
329 |
106 |
710 |
47 |
|||
Depreciation and amortization of non-vehicle assets |
32 |
36 |
67 |
69 |
|||
Selling, general and administrative |
285 |
257 |
506 |
492 |
|||
Interest expense, net: |
|||||||
Vehicle |
132 |
45 |
243 |
50 |
|||
Non-vehicle |
56 |
41 |
107 |
80 |
|||
Total interest expense, net |
188 |
86 |
350 |
130 |
|||
Other (income) expense, net |
(2) |
2 |
7 |
— |
|||
(Gain) on sale of non-vehicle capital assets |
— |
— |
(162) |
— |
|||
Change in fair value of Public Warrants |
100 |
(461) |
218 |
(511) |
|||
Total expenses |
2,279 |
1,225 |
4,264 |
2,479 |
|||
Income (loss) before income taxes |
158 |
1,119 |
220 |
1,675 |
|||
Income tax (provision) benefit |
(19) |
(179) |
115 |
(309) |
|||
Net income (loss) |
$ 139 |
$ 940 |
335 |
1,366 |
|||
Weighted average number of shares outstanding: |
|||||||
Basic |
314 |
398 |
318 |
415 |
|||
Diluted |
315 |
424 |
319 |
443 |
|||
Earnings (loss) per share: |
|||||||
Basic |
$ 0.44 |
$ 2.36 |
$ 1.06 |
$ 3.29 |
|||
Diluted |
$ 0.44 |
$ 1.13 |
$ 1.05 |
$ 1.93 |
UNAUDITED CONSOLIDATED BALANCE SHEETS
|
|||
(In millions, except par value and share data) |
|
2022 |
|
ASSETS |
|||
Cash and cash equivalents |
$ 682 |
$ 943 |
|
Restricted cash and cash equivalents: |
|||
Vehicle |
190 |
180 |
|
Non-vehicle |
294 |
295 |
|
Total restricted cash and cash equivalents |
484 |
475 |
|
Total cash and cash equivalents and restricted cash and cash equivalents |
1,166 |
1,418 |
|
Receivables: |
|||
Vehicle |
132 |
111 |
|
Non-vehicle, net of allowance of |
1,160 |
863 |
|
Total receivables, net |
1,292 |
974 |
|
Prepaid expenses and other assets |
1,031 |
1,155 |
|
Revenue earning vehicles: |
|||
Vehicles |
17,833 |
14,281 |
|
Less: accumulated depreciation |
(1,988) |
(1,786) |
|
Total revenue earning vehicles, net |
15,845 |
12,495 |
|
Property and equipment, net |
665 |
637 |
|
Operating lease right-of-use assets |
2,169 |
1,887 |
|
Intangible assets, net |
2,883 |
2,887 |
|
|
1,044 |
1,044 |
|
Total assets |
$ 26,095 |
$ 22,497 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
Accounts payable: |
|||
Vehicle |
$ 358 |
$ 79 |
|
Non-vehicle |
577 |
578 |
|
Total accounts payable |
935 |
657 |
|
Accrued liabilities |
971 |
911 |
|
Accrued taxes, net |
229 |
170 |
|
Debt: |
|||
Vehicle |
13,100 |
10,886 |
|
Non-vehicle |
3,470 |
2,977 |
|
Total debt |
16,570 |
13,863 |
|
Public Warrants |
835 |
617 |
|
Operating lease liabilities |
2,072 |
1,802 |
|
Self-insured liabilities |
451 |
472 |
|
Deferred income taxes, net |
1,193 |
1,360 |
|
Total liabilities |
23,256 |
19,852 |
|
Commitments and contingencies |
|||
Stockholders' equity: |
|||
Preferred stock, |
— |
— |
|
Common stock, and 311,692,986 and 323,483,178 shares outstanding, respectively |
5 |
5 |
|
|
(3,338) |
(3,136) |
|
Additional paid-in capital |
6,369 |
6,326 |
|
Retained earnings (Accumulated deficit) |
79 |
(256) |
|
Accumulated other comprehensive income (loss) |
(276) |
(294) |
|
Total stockholders' equity |
2,839 |
2,645 |
|
Total liabilities and stockholders' equity |
$ 26,095 |
$ 22,497 |
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
Three Months Ended |
Six Months Ended |
||||||
(In millions) |
2023 |
2022 |
2023 |
2022 |
|||
Cash flows from operating activities: |
|||||||
Net income (loss) |
$ 139 |
$ 940 |
$ 335 |
$ 1,366 |
|||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|||||||
Depreciation and reserves for revenue earning vehicles, net |
418 |
165 |
884 |
145 |
|||
Depreciation and amortization, non-vehicle |
32 |
36 |
67 |
69 |
|||
Amortization of deferred financing costs and debt discount (premium) |
15 |
14 |
29 |
25 |
|||
Stock-based compensation charges |
22 |
36 |
43 |
64 |
|||
Provision for receivables allowance |
20 |
10 |
40 |
23 |
|||
Deferred income taxes, net |
(28) |
146 |
(163) |
249 |
|||
(Gain) loss on sale of non-vehicle capital assets |
(3) |
(1) |
(165) |
(3) |
|||
Change in fair value of Public Warrants |
100 |
(461) |
218 |
(511) |
|||
Changes in financial instruments |
(2) |
(21) |
106 |
(65) |
|||
Other |
5 |
(1) |
5 |
— |
|||
Changes in assets and liabilities: |
|||||||
Non-vehicle receivables |
(284) |
(157) |
(334) |
(200) |
|||
Prepaid expenses and other assets |
(50) |
(47) |
(98) |
(87) |
|||
Operating lease right-of-use assets |
87 |
7 |
165 |
79 |
|||
Non-vehicle accounts payable |
33 |
(83) |
6 |
(32) |
|||
Accrued liabilities |
39 |
109 |
68 |
233 |
|||
Accrued taxes, net |
55 |
22 |
56 |
52 |
|||
Operating lease liabilities |
(94) |
(13) |
(178) |
(93) |
|||
Self-insured liabilities |
(7) |
7 |
(25) |
15 |
|||
Net cash provided by (used in) operating activities |
497 |
708 |
1,059 |
1,329 |
|||
Cash flows from investing activities: |
|||||||
Revenue earning vehicles expenditures |
(3,719) |
(3,104) |
(6,543) |
(6,089) |
|||
Proceeds from disposal of revenue earning vehicles |
1,560 |
1,416 |
2,766 |
2,887 |
|||
Non-vehicle capital asset expenditures |
(78) |
(29) |
(123) |
(59) |
|||
Proceeds from non-vehicle capital assets disposed of |
1 |
5 |
176 |
6 |
|||
Collateral returned in exchange for letters of credit |
— |
2 |
— |
19 |
|||
Return of (investment in) equity investments |
(1) |
— |
(1) |
(15) |
|||
Net cash provided by (used in) investing activities |
(2,237) |
(1,710) |
(3,725) |
(3,251) |
|||
Cash flows from financing activities: |
|||||||
Proceeds from issuance of vehicle debt |
1,960 |
2,699 |
4,021 |
7,379 |
|||
Repayments of vehicle debt |
(682) |
(1,332) |
(1,872) |
(4,824) |
|||
Proceeds from issuance of non-vehicle debt |
825 |
— |
1,250 |
— |
|||
Repayments of non-vehicle debt |
(329) |
(5) |
(759) |
(10) |
|||
Payment of financing costs |
(9) |
(14) |
(17) |
(38) |
|||
Proceeds from exercises of Public Warrants |
— |
— |
— |
3 |
|||
Share repurchases |
(104) |
(881) |
(222) |
(1,647) |
|||
Other |
1 |
— |
— |
(4) |
|||
Net cash provided by (used in) financing activities |
1,662 |
467 |
2,401 |
859 |
|||
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents |
2 |
(24) |
13 |
(25) |
|||
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during the period |
(76) |
(559) |
(252) |
(1,088) |
|||
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period |
1,242 |
2,122 |
1,418 |
2,651 |
|||
Cash and cash equivalents and restricted cash and cash equivalents at end of period |
$ 1,166 |
$ 1,563 |
$ 1,166 |
$ 1,563 |
Supplemental Schedule I |
|||||||||||||||
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT Unaudited
|
|||||||||||||||
Three Months Ended |
Three Months Ended |
||||||||||||||
(In millions) |
RAC |
International |
Corporate |
Global |
RAC |
International |
Corporate |
Global |
|||||||
Revenues |
$ 2,015 |
$ 422 |
$ — |
$ 2,437 |
$ 1,973 |
$ 371 |
$ — |
$ 2,344 |
|||||||
Expenses: |
|||||||||||||||
Direct vehicle and operating |
1,139 |
211 |
(3) |
1,347 |
1,002 |
197 |
— |
1,199 |
|||||||
Depreciation of revenue earning vehicles and lease charges, net |
272 |
57 |
— |
329 |
61 |
45 |
— |
106 |
|||||||
Depreciation and amortization of non-vehicle assets |
27 |
3 |
2 |
32 |
30 |
4 |
2 |
36 |
|||||||
Selling, general and administrative |
148 |
45 |
92 |
285 |
99 |
47 |
111 |
257 |
|||||||
Interest expense, net: |
|||||||||||||||
Vehicle |
113 |
19 |
— |
132 |
35 |
10 |
— |
45 |
|||||||
Non-vehicle |
(4) |
(5) |
65 |
56 |
(13) |
— |
54 |
41 |
|||||||
Total interest expense, net |
109 |
14 |
65 |
188 |
22 |
10 |
54 |
86 |
|||||||
Other (income) expense, net |
— |
(4) |
2 |
(2) |
(1) |
(4) |
7 |
2 |
|||||||
Change in fair value of Public Warrants |
— |
— |
100 |
100 |
— |
— |
(461) |
(461) |
|||||||
Total expenses |
1,695 |
326 |
258 |
2,279 |
1,213 |
299 |
(287) |
1,225 |
|||||||
Income (loss) before income taxes |
$ 320 |
$ 96 |
$ (258) |
158 |
$ 760 |
$ 72 |
$ 287 |
1,119 |
|||||||
Income tax (provision) benefit |
(19) |
(179) |
|||||||||||||
Net income (loss) |
$ 139 |
$ 940 |
Supplemental Schedule I (continued) |
|||||||||||||||
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT Unaudited
|
|||||||||||||||
Six Months Ended |
Six Months Ended |
||||||||||||||
(In millions) |
RAC |
International |
Corporate |
Global |
RAC |
International |
Corporate |
Global |
|||||||
Revenues |
$ 3,745 |
$ 739 |
$ — |
$ 4,484 |
$ 3,531 |
$ 623 |
$ — |
$ 4,154 |
|||||||
Expenses: |
|||||||||||||||
Direct vehicle and operating |
2,178 |
393 |
(3) |
2,568 |
1,905 |
348 |
(1) |
2,252 |
|||||||
Depreciation of revenue earning vehicles and lease charges, net |
621 |
89 |
— |
710 |
(32) |
79 |
— |
47 |
|||||||
Depreciation and amortization of non-vehicle assets |
55 |
5 |
7 |
67 |
56 |
7 |
6 |
69 |
|||||||
Selling, general and administrative |
253 |
82 |
171 |
506 |
185 |
89 |
218 |
492 |
|||||||
Interest expense, net: |
|||||||||||||||
Vehicle |
206 |
37 |
— |
243 |
37 |
13 |
— |
50 |
|||||||
Non-vehicle |
(22) |
(7) |
136 |
107 |
(21) |
— |
101 |
80 |
|||||||
Total interest expense, net |
184 |
30 |
136 |
350 |
16 |
13 |
101 |
130 |
|||||||
Other (income) expense, net |
(1) |
2 |
6 |
7 |
(2) |
(7) |
9 |
— |
|||||||
(Gain) on sale of non-vehicle capital assets |
(162) |
— |
— |
(162) |
— |
— |
— |
— |
|||||||
Change in fair value of Public Warrants |
— |
— |
218 |
218 |
— |
— |
(511) |
(511) |
|||||||
Total expenses |
3,128 |
601 |
535 |
4,264 |
2,128 |
529 |
(178) |
2,479 |
|||||||
Income (loss) before income taxes |
$ 617 |
$ 138 |
$ (535) |
220 |
$ 1,403 |
$ 94 |
$ 178 |
1,675 |
|||||||
Income tax (provision) benefit |
115 |
(309) |
|||||||||||||
Net income (loss) |
$ 335 |
$ 1,366 |
Supplemental Schedule II |
|||||||
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 |
Six Months Ended |
||||||
(In millions, except per share data) |
2023 |
2022 |
2023 |
2022 |
|||
Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share: |
|||||||
Net income (loss) |
$ 139 |
$ 940 |
$ 335 |
$ 1,366 |
|||
Adjustments: |
|||||||
Income tax provision (benefit) |
19 |
179 |
(115) |
309 |
|||
Vehicle and non-vehicle debt-related charges(a)(k) |
15 |
14 |
29 |
26 |
|||
Restructuring and restructuring related charges(b) |
5 |
15 |
8 |
21 |
|||
Acquisition accounting-related depreciation and amortization(c) |
1 |
— |
1 |
1 |
|||
Unrealized (gains) losses on financial instruments(d) |
(2) |
(21) |
106 |
(65) |
|||
(Gain) on sale of non-vehicle capital assets(e) |
— |
— |
(162) |
— |
|||
Change in fair value of Public Warrants |
100 |
(461) |
218 |
(511) |
|||
Other items(f)(l) |
(10) |
27 |
4 |
83 |
|||
Adjusted pre-tax income (loss)(g) |
267 |
693 |
424 |
1,230 |
|||
Income tax (provision) benefit on adjusted pre-tax income (loss)(h) |
(40) |
(173) |
(64) |
(307) |
|||
Adjusted Net Income (Loss) |
$ 227 |
$ 520 |
$ 360 |
$ 923 |
|||
Weighted-average number of diluted shares outstanding |
315 |
424 |
319 |
443 |
|||
Adjusted Diluted Earnings (Loss) Per Share(i) |
$ 0.72 |
$ 1.22 |
$ 1.13 |
$ 2.08 |
|||
Adjusted Corporate EBITDA: |
|||||||
Net income (loss) |
$ 139 |
$ 940 |
$ 335 |
$ 1,366 |
|||
Adjustments: |
|||||||
Income tax provision (benefit) |
19 |
179 |
(115) |
309 |
|||
Non-vehicle depreciation and amortization(j) |
32 |
36 |
67 |
69 |
|||
Non-vehicle debt interest, net of interest income |
56 |
41 |
107 |
80 |
|||
Vehicle debt-related charges(a)(k) |
10 |
9 |
20 |
16 |
|||
Restructuring and restructuring related charges(b) |
5 |
15 |
8 |
21 |
|||
Unrealized (gains) losses on financial instruments(d) |
(2) |
(21) |
106 |
(65) |
|||
(Gain) on sale of non-vehicle capital assets(e) |
— |
— |
(162) |
— |
|||
Change in fair value of Public Warrants |
100 |
(461) |
218 |
(511) |
|||
Other items(f)(m) |
(12) |
26 |
— |
93 |
|||
Adjusted Corporate EBITDA |
$ 347 |
$ 764 |
$ 584 |
$ 1,378 |
(a) |
Represents debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums. |
(b) |
Represents charges incurred under restructuring actions as defined in |
(c) |
Represents incremental expense associated with the amortization of other intangible assets and depreciation of property and equipment relating to acquisition accounting. |
Supplemental Schedule II (continued) |
|
(d) |
Represents unrealized gains (losses) on derivative financial instruments, primarily associated with Americas RAC. In the six months ended |
(e) |
Represents gain on the sale of certain non-vehicle capital assets sold in |
(f) |
Represents miscellaneous items. For 2023, primarily includes a loss recovery settlement in Americas RAC, partially offset by certain IT related charges primarily in Corporate. For 2022, primarily includes bankruptcy claims, certain professional fees and charges related to the settlement of bankruptcy claims. |
(g) |
Adjustments by caption on a pre-tax basis were as follows: |
Increase (decrease) to expenses |
Three Months Ended |
Six Months Ended |
|||||
(In millions) |
2023 |
2022 |
2023 |
2022 |
|||
Direct vehicle and operating |
$ 17 |
$ (19) |
$ 17 |
$ (21) |
|||
Depreciation of revenue earning vehicles and lease charges, net |
— |
— |
2 |
— |
|||
Selling, general and administrative |
(13) |
(6) |
(27) |
(11) |
|||
Interest expense, net: |
|||||||
Vehicle |
(3) |
(9) |
(122) |
(16) |
|||
Non-vehicle |
(9) |
(8) |
(17) |
(14) |
|||
Total interest expense, net |
(12) |
(17) |
(139) |
(30) |
|||
Other income (expense), net |
(1) |
7 |
(1) |
(4) |
|||
Gain on sale non-vehicle capital assets |
— |
— |
162 |
— |
|||
Change in fair value of Public Warrants |
(100) |
461 |
(218) |
511 |
|||
Total adjustments |
$ (109) |
$ 426 |
$ (204) |
$ 445 |
(h) |
Derived utilizing a combined statutory rate of 15% for the three and six months ended |
(i) |
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. |
(j) |
Non-vehicle depreciation and amortization expense for Americas RAC, International RAC and Corporate for the three months ended |
(k) |
Vehicle debt-related charges for Americas RAC and International RAC for the three months ended |
(l) |
Also includes letter of credit fees recorded primarily in Corporate. |
(m) |
In 2022, also includes an adjustment for certain non-cash stock-based compensation charges recorded in Corporate. |
Supplemental Schedule III |
|||||||
RECONCILIATION OF GAAP TO NON-GAAP MEASURE - ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW Unaudited
|
|||||||
Three Months Ended |
Six Months Ended |
||||||
(In millions) |
2023 |
2022 |
2023 |
2022 |
|||
ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW: |
|||||||
Net cash provided by (used in) operating activities |
$ 497 |
$ 708 |
$ 1,059 |
$ 1,329 |
|||
Depreciation and reserves for revenue earning vehicles, net |
(418) |
(165) |
(884) |
(145) |
|||
Bankruptcy related payments (post emergence) and other payments |
12 |
42 |
20 |
78 |
|||
Adjusted operating cash flow |
91 |
585 |
195 |
1,262 |
|||
Non-vehicle capital asset proceeds (expenditures), net |
(77) |
(24) |
53 |
(53) |
|||
Adjusted operating cash flow before vehicle investment |
14 |
561 |
248 |
1,209 |
|||
Net fleet growth after financing |
(437) |
(77) |
(754) |
(646) |
|||
Adjusted free cash flow |
$ (423) |
$ 484 |
$ (506) |
$ 563 |
|||
CALCULATION OF NET FLEET GROWTH AFTER FINANCING: |
|||||||
Revenue earning vehicles expenditures |
$ (3,719) |
$ (3,104) |
$ (6,543) |
$ (6,089) |
|||
Proceeds from disposal of revenue earning vehicles |
1,560 |
1,416 |
2,766 |
2,887 |
|||
Revenue earning vehicles capital expenditures, net |
(2,159) |
(1,688) |
(3,777) |
(3,202) |
|||
Depreciation and reserves for revenue earning vehicles, net |
418 |
165 |
884 |
145 |
|||
Financing activity related to vehicles: |
|||||||
Borrowings |
1,960 |
2,699 |
4,021 |
7,379 |
|||
Payments |
(682) |
(1,332) |
(1,872) |
(4,824) |
|||
Restricted cash changes, vehicle |
26 |
79 |
(10) |
(144) |
|||
Net financing activity related to vehicles |
1,304 |
1,446 |
2,139 |
2,411 |
|||
Net fleet growth after financing |
$ (437) |
$ (77) |
$ (754) |
$ (646) |
Supplemental Schedule IV |
|||||||||||
NET DEBT CALCULATION Unaudited
|
|||||||||||
As of |
As of |
||||||||||
(In millions) |
Vehicle |
Non-Vehicle |
Total |
Vehicle |
Non-Vehicle |
Total |
|||||
Term loans |
$ — |
$ 1,519 |
$ 1,519 |
$ — |
$ 1,526 |
$ 1,526 |
|||||
First Lien RCF |
— |
500 |
500 |
— |
— |
— |
|||||
Senior notes |
— |
1,500 |
1,500 |
— |
1,500 |
1,500 |
|||||
|
11,095 |
— |
11,095 |
9,406 |
— |
9,406 |
|||||
International vehicle financing (Various) |
1,982 |
— |
1,982 |
1,466 |
— |
1,466 |
|||||
Other debt |
80 |
4 |
84 |
76 |
9 |
85 |
|||||
Debt issue costs, discounts and premiums |
(57) |
(53) |
(110) |
(62) |
(58) |
(120) |
|||||
Debt as reported in the balance sheet |
13,100 |
3,470 |
16,570 |
10,886 |
2,977 |
13,863 |
|||||
Add: |
|||||||||||
Debt issue costs, discounts and premiums |
57 |
53 |
110 |
62 |
58 |
120 |
|||||
Less: |
|||||||||||
Cash and cash equivalents |
— |
682 |
682 |
— |
943 |
943 |
|||||
Restricted cash |
190 |
— |
190 |
180 |
— |
180 |
|||||
Restricted cash and restricted cash equivalents associated with Term C Loan |
— |
245 |
245 |
— |
245 |
245 |
|||||
Net Debt |
$ 12,967 |
$ 2,596 |
$ 15,563 |
$ 10,768 |
$ 1,847 |
$ 12,615 |
|||||
Corporate leverage ratio(a) |
1.7x |
0.8x |
(a) Corporate leverage ratio is calculated as non-vehicle net debt divided by LTM Adjusted Corporate EBITDA. |
Supplemental Schedule V |
|||||||||||
KEY METRICS CALCULATIONS REVENUE, UTILIZATION AND DEPRECIATION Unaudited
Global RAC
|
|||||||||||
Three Months Ended |
Percent Inc/(Dec) |
Six Months Ended |
Percent Inc/(Dec) |
||||||||
($ in millions, except where noted) |
2023 |
2022 |
2023 |
2022 |
|||||||
Total RPD |
|||||||||||
Revenues |
$ 2,437 |
$ 2,344 |
$ 4,484 |
$ 4,154 |
|||||||
Foreign currency adjustment(a) |
(9) |
(12) |
(13) |
(29) |
|||||||
Total Revenues - adjusted for foreign currency |
$ 2,428 |
$ 2,332 |
$ 4,471 |
$ 4,125 |
|||||||
Transaction Days (in thousands) |
39,705 |
35,444 |
73,493 |
66,065 |
|||||||
Total RPD (in dollars) |
$ 61.14 |
$ 65.79 |
(7) % |
$ 60.84 |
$ 62.43 |
(3) % |
|||||
Total Revenue Per Unit Per Month |
|||||||||||
Total Revenues - adjusted for foreign currency |
$ 2,428 |
$ 2,332 |
$ 4,471 |
$ 4,125 |
|||||||
Average Rentable Vehicles (in whole units) |
533,813 |
490,236 |
508,550 |
472,871 |
|||||||
Total revenue per unit (in whole dollars) |
$ 4,548 |
$ 4,757 |
$ 8,792 |
$ 8,722 |
|||||||
Number of months in period (in whole units) |
3 |
3 |
6 |
6 |
|||||||
Total RPU Per Month (in whole dollars) |
$ 1,516 |
$ 1,586 |
(4) % |
$ 1,465 |
$ 1,454 |
1 % |
|||||
Vehicle Utilization |
|||||||||||
Transaction Days (in thousands) |
39,705 |
35,444 |
73,493 |
66,065 |
|||||||
Average Rentable Vehicles (in whole units) |
533,813 |
490,236 |
508,550 |
472,871 |
|||||||
Number of days in period (in whole units) |
91 |
91 |
181 |
181 |
|||||||
Available Car Days (in thousands) |
48,576 |
44,615 |
92,079 |
85,616 |
|||||||
Vehicle Utilization(b) |
82 % |
79 % |
80 % |
77 % |
|||||||
Depreciation Per Unit Per Month |
|||||||||||
Depreciation of revenue earning vehicles and lease charges, net |
$ 329 |
$ 106 |
$ 710 |
$ 47 |
|||||||
Foreign currency adjustment(a) |
(1) |
(1) |
(1) |
(3) |
|||||||
Adjusted depreciation of revenue earning vehicles and lease charges |
$ 328 |
$ 105 |
$ 709 |
$ 44 |
|||||||
Average Vehicles (in whole units) |
561,277 |
513,307 |
532,903 |
497,259 |
|||||||
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars) |
$ 584 |
$ 205 |
$ 1,331 |
$ 89 |
|||||||
Number of months in period (in whole units) |
3 |
3 |
6 |
6 |
|||||||
Depreciation Per Unit Per Month (in whole dollars) |
$ 195 |
$ 68 |
NM |
$ 222 |
$ 15 |
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 |
(b) Calculated as Transaction Days divided by Available Car Days. |
Supplemental Schedule V (continued) |
|||||||||||
KEY METRICS CALCULATIONS REVENUE, UTILIZATION AND DEPRECIATION Unaudited
Americas RAC
|
|||||||||||
Three Months Ended June 30, |
Percent Inc/(Dec) |
Six Months Ended |
Percent Inc/(Dec) |
||||||||
($ in millions, except where noted) |
2023 |
2022 |
2023 |
2022 |
|||||||
Total RPD |
|||||||||||
Revenues |
$ 2,015 |
$ 1,973 |
$ 3,745 |
$ 3,531 |
|||||||
Foreign currency adjustment(a) |
(1) |
(4) |
(2) |
(7) |
|||||||
Total Revenues - adjusted for foreign currency |
$ 2,014 |
$ 1,969 |
$ 3,743 |
$ 3,524 |
|||||||
Transaction Days (in thousands) |
32,469 |
29,160 |
60,348 |
54,739 |
|||||||
Total RPD (in dollars) |
$ 62.03 |
$ 67.52 |