HERTZ REPORTS THIRD QUARTER 2022 RESULTS: REVENUE OF $2.5 BILLION, NET INCOME OF $577 MILLION, ADJUSTED CORPORATE EBITDA OF $618 MILLION, OPERATING CASH FLOW OF $932 MILLION AND ADJUSTED FREE CASH FLOW OF $505 MILLION

Oct 27, 2022

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"Hertz posted another quarter of solid performance, reflecting overall strength in our business and continued demand for our services across all customer segments," said Stephen Scherr, Hertz chief executive officer. "I am enormously proud of the performance of our team, particularly our colleagues in Southwest Florida, who faced challenges from Hurricane Ian. Across geographies, we focused on operational excellence and fleet optimization to produce financial results that facilitated investment in our strategic priorities, like electrification, while enhancing returns to our shareholders and being in the service of our customers."  

ESTERO, Fla., Oct. 27, 2022 /PRNewswire/ -- Hertz Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz", "Hertz Global" or the "Company") today reported results for its third quarter 2022.

HIGHLIGHTS 

  • Total revenues of $2.5 billion
  • GAAP net income of $577 million, or $1.33 per diluted share
  • Adjusted Net Income of $410 million, or $1.08 per adjusted diluted share (reflects adjustments for fair value remeasurements to outstanding public warrants and certain derivative contracts, among other items)
  • Adjusted Corporate EBITDA of $618 million, a 25% margin
  • Operating cash flow of $932 million, adjusted operating cash flow of $572 million
  • Adjusted free cash flow of $505 million
  • Corporate liquidity of $2.6 billion at September 30, including $1.0 billion in unrestricted cash
  • Company utilized $500 million to repurchase 27.2 million common shares during the quarter

Revenue was $2.5 billion, up 12% year over year, characterized by continued strength in demand and rate across all customer segments, with significantly increased contribution of value-added services revenue. Monthly revenue per unit was a quarterly record of $1,685 on utilization of 80%. Gross depreciation continued to normalize as the Company progressed its fleet rejuvenation, and car sales gains came in lower versus the previous quarter due to steeper than expected residual value declines. As a result, monthly net depreciation per unit was $187.

During the first two months of the quarter, the Company ran with intentionally elevated maintenance cost to address out of service levels. As a result of these efforts, by September, utilization had reached 81.4%, and maintenance cost receded such that the business experienced more typical operating cost leverage. Adjusted Corporate EBITDA was $618 million, representing a healthy margin of 25%. Adjusted free cash flow was $505 million, reflecting free cash flow conversion of 82%, which the Company utilized to repurchase 7% of its common stock, thereby increasing shareholder value.

SUMMARY RESULTS

Three Months Ended

September 30,

Percent
Inc/(Dec)

2022 vs 2021

($ in millions, except earnings per share or where noted)

2022

2021

Hertz Global - Consolidated




Total revenues

$          2,496

$          2,226

12 %

Adjusted net income (loss)(a)

$             410

$             587

(30) %

Adjusted diluted earnings (loss) per share(a)

$            1.08

$            1.20

(10) %

Adjusted Corporate EBITDA(a)

$             618

$             860

(28) %

Adjusted Corporate EBITDA Margin(a)

25 %

39 %







Average Vehicles (in whole units)

532,740

473,492

13 %

Average Rentable Vehicles (in whole units)

503,508

456,566

10 %

Vehicle Utilization

80 %

80 %

Transaction Days (in thousands)

37,123

33,489

11 %

Total RPD (in dollars)(b)

$          68.57

$          66.15

4 %

Total RPU Per Month (in whole dollars)(b)

$          1,685

$          1,617

4 %

Depreciation Per Unit Per Month (in whole dollars)(b)

$             187

$               42

NM






Americas RAC Segment




Total revenues

$          2,042

$          1,914

7 %

Adjusted EBITDA

$             564

$             830

(32) %

Adjusted EBITDA Margin

28 %

43 %







Average Vehicles (in whole units)

425,596

387,368

10 %

Average Rentable Vehicles (in whole units)

397,488

372,326

7 %

Vehicle Utilization

81 %

81 %

Transaction Days (in thousands)

29,653

27,627

7 %

Total RPD (in dollars)(b)

$          68.90

$          69.25

(1) %

Total RPU Per Month (in whole dollars)(b)

$          1,713

$          1,713

— %

Depreciation Per Unit Per Month (in whole dollars)(b)

$             198

$               21

NM






International RAC Segment




Total revenues

$             454

$             312

46 %

Adjusted EBITDA

$             150

$               78

93 %

Adjusted EBITDA Margin

33 %

25 %







Average Vehicles (in whole units)

107,144

86,124

24 %

Average Rentable Vehicles (in whole units)

106,020

84,241

26 %

Vehicle Utilization

77 %

76 %

Transaction Days (in thousands)

7,470

5,862

27 %

Total RPD (in dollars)(b)

$          67.28

$          51.52

31 %

Total RPU Per Month (in whole dollars)(b)

$          1,580

$          1,195

32 %

Depreciation Per Unit Per Month (in whole dollars)(b)

$             146

$             137

6 %

NM - Not meaningful

NOTE: Hertz Global - consolidated key metrics reflect global rental car operations only and exclude Donlen fleet management and leasing

(a)   Represents a non-GAAP measure. See the accompanying reconciliations included in Supplemental Schedule II.

(b)   Based on December 31, 2021 foreign exchange rates.

 

LIQUIDITY AND CAPITAL RESOURCES

During the third quarter 2022, the Company repurchased 27.2 million shares for $500 million. There is $1.4 billion remaining under the authorization as of October 20, 2022.

The Company's liquidity position was $2.6 billion at September 30, 2022, of which $1.0 billion was unrestricted cash.

EARNINGS WEBCAST INFORMATION

Hertz Global's live webcast and conference call to discuss its third quarter 2022 results will be held on October 27, 2022, 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/BI328b89926fc24e6ead04d3c0ec8db8b3, 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

Following is selected financial data of Hertz Global. Also included are Supplemental Schedules, which are provided to present segment results, and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules, the Company provides definitions for terminology used throughout the earnings release and its view of the usefulness of non-GAAP measures to investors and management.

In the first quarter of 2022, the Company began using Average Rentable Vehicles when calculating Available Car Days, Total RPU and Utilization instead of Average Vehicles. Average Rentable Vehicles excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels. Prior periods have been restated to conform with the revisions, as appropriate. The Company has also restated historical quarterly and annual periods beginning with first quarter 2019 to reflect this change and has posted this information to its investor relations website at IR.Hertz.com.

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.

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 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:

  • the length and severity of COVID-19 and the impact on the Company's vehicle rental business as a result of travel restrictions and business closures or disruptions, as well as the impact on its employee retention and talent management strategies;
  • the impact of macroeconomic conditions resulting in inflationary cost pressures, labor and supply chain constraints, increased vehicle acquisition costs, and reductions in travel demand, among others;
  • the Company's ability to purchase adequate supplies of competitively priced vehicles at a reasonable cost as a result of the continuing global semiconductor microchip manufacturing shortage (the "Chip Shortage") and other raw material supply constraints;
  • the impact of the conflict between Russia and Ukraine on supply chains and raw materials for the automotive industry and uncertainty on overall consumer sentiment and travel demand, especially in Europe;
  • the impact on the value of the Company's non-program vehicles upon disposition when the Chip Shortage and other raw material supply constraints are alleviated;
  • the Company's ability to attract and retain 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;
  • 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 our business strategy, including its 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, customer demands and market competition;
  • the mix of program and non-program vehicles in the Company's fleet can lead to increased exposure to residual risk;
  • the Company's ability to dispose of vehicles in the used-vehicle market and use the proceeds of such sales to acquire replacement vehicles;
  • financial instability of the manufacturers of the Company's vehicles, which could impact its ability to fulfill obligations under repurchase or guaranteed depreciation programs;
  • an increase in the Company's vehicle costs or disruption to its rental activity due to safety recalls by the manufacturers of its vehicles;
  • the Company's access to third-party distribution channels and related prices, commission structures and transaction volumes;
  • the Company's ability to offer an excellent customer experience, and retain and increase customer loyalty and market share;
  • the Company's ability to maintain its network of leases and vehicle rental concessions at airports in the U.S. and internationally;
  • the Company's ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;
  • major disruption in the Company's communication or centralized information networks or a failure to maintain, upgrade and consolidate its information technology systems;
  • the Company's ability to prevent the misuse or theft of information it possesses, including as a result of cyber security breaches and other security threats, as well as its ability to comply with privacy regulations;
  • 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;
  • the Company's ability to utilize its net operating loss carryforwards;
  • risks relating to tax laws and regulations, or changes in such laws and regulations, that affect the Company's ability to deduct certain business interest expenses and offset previously-deferred tax gains, as well as any adverse determinations or rulings by tax authorities;
  • 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; and
  • the availability of additional or continued sources of financing for the Company's revenue earning vehicles and to refinance its existing indebtedness.

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

September 30,

Nine Months Ended

September 30,

(In millions, except per share data)

2022

2021

2022

2021

Revenues

$               2,496

$               2,226

$              6,650

$              5,387

Expenses:






Direct vehicle and operating

1,282

1,131

3,534

2,855

Depreciation of revenue earning vehicles and lease charges, net

294

61

341

420

Depreciation and amortization of non-vehicle assets

36

49

105

153

Selling, general and administrative

246

177

738

498

Interest expense, net:






Vehicle

27

41

77

243

Non-vehicle

43

22

123

157

Total interest expense, net

70

63

200

400

Other (income) expense, net

(6)

(7)

(6)

(20)

Reorganization items, net

—

—

—

677

(Gain) from the sale of a business

—

—

—

(400)

Change in fair value of Public Warrants

(73)

(16)

(584)

(16)

Total expenses

1,849

1,458

4,328

4,567

Income (loss) before income taxes

647

768

2,322

820

Income tax (provision) benefit

(70)

(160)

(379)

(193)

Net income (loss)

577

608

1,943

627

Net (income) loss attributable to noncontrolling interests

—

(3)

—

(1)

Net income (loss) attributable to Hertz Global

577

605

1,943

626

Dividends on Series A Preferred Stock

—

(34)

—

(34)

Net income (loss) available to Hertz Global common stockholders

$                  577

$                  571

$              1,943

$                 592








Weighted average number of shares outstanding:






Basic

355

471

395

264

Diluted

379

490

421

270

Earnings (loss) per share:






Basic

$                 1.62

$                 1.21

$                4.92

$                2.25

Diluted

$                 1.33

$                 1.13

$                3.22

$                2.14

 

UNAUDITED CONSOLIDATED BALANCE SHEETS


(In millions, except par value and share data)

September 30,
2022

December 31,
2021

ASSETS


Cash and cash equivalents

$               1,006

$               2,258

Restricted cash and cash equivalents:


Vehicle

203

77

Non-vehicle

299

316

Total restricted cash and cash equivalents

502

393

Total cash and cash equivalents and restricted cash and cash equivalents

1,508

2,651

Receivables:


Vehicle

222

62

Non-vehicle, net of allowance of $46 and $48, respectively

831

696

Total receivables, net

1,053

758

Prepaid expenses and other assets

934

1,017

Revenue earning vehicles:


Vehicles

13,757

10,836

Less: accumulated depreciation

(1,734)

(1,610)

Total revenue earning vehicles, net

12,023

9,226

Property and equipment, net

618

608

Operating lease right-of-use assets

1,632

1,566

Intangible assets, net

2,883

2,912

Goodwill

1,043

1,045

Total assets

$             21,694

$             19,783

LIABILITIES AND STOCKHOLDERS' EQUITY


Accounts payable:


Vehicle

$                  112

$                    56

Non-vehicle

502

516

Total accounts payable

614

572

Accrued liabilities

955

863

Accrued taxes, net

205

157

Debt:


Vehicle

10,097

7,921

Non-vehicle

2,979

2,986

Total debt

13,076

10,907

Public Warrants

737

1,324

Operating lease liabilities

1,556

1,510

Self-insured liabilities

484

463

Deferred income taxes, net

1,306

1,010

Total liabilities

18,933

16,806

Commitments and contingencies


Stockholders' equity:


Preferred stock, $0.01 par value, no shares issued and outstanding

—

—

Common stock, $0.01 par value, 477,792,170 and 477,233,278 shares issued, respectively, and
     341,223,449 and 449,782,424 shares outstanding, respectively

5

5

Treasury stock, at cost, 136,568,721 and 27,450,854 common shares, respectively

(2,821)

(708)

Additional paid-in capital

6,308

6,209

Retained earnings (Accumulated deficit)

(372)

(2,315)

Accumulated other comprehensive income (loss)

(359)

(214)

Total stockholders' equity

2,761

2,977

Total liabilities and stockholders' equity

$             21,694

$             19,783

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS


Three Months Ended

September 30,

Nine Months Ended

September 30,

(In millions)

2022

2021

2022

2021

Cash flows from operating activities:






Net income (loss)

$              577

$              608

$           1,943

$              627

Adjustments to reconcile net income (loss) to net cash provided by (used
     in) operating activities:






Depreciation and reserves for revenue earning vehicles

366

86

511

506

Depreciation and amortization, non-vehicle

36

49

105

153

Amortization of deferred financing costs and debt discount (premium)

13

11

38

109

Loss on extinguishment of debt

—

—

—

8

Stock-based compensation charges

32

—

96

2

Provision for receivables allowance

19

31

42

95

Deferred income taxes, net

52

141

301

125

Reorganization items, net

—

—

—

314

(Gain) loss from the sale of a business

—

—

—

(400)

Change in fair value of Public Warrants

(73)

(16)

(584)

(16)

(Gain) loss on financial instruments

(55)

(3)

(120)

(1)

Other

1

(5)

(2)

(15)

Changes in assets and liabilities:






Non-vehicle receivables

(34)

(9)

(234)

(223)

Prepaid expenses and other assets

7

14

(80)

(53)

Operating lease right-of-use assets

123

49

202

203

Non-vehicle accounts payable

25

(139)

(7)

(45)

Accrued liabilities

(50)

(32)

183

(43)

Accrued taxes, net

—

(2)

52

89

Operating lease liabilities

(130)

(54)

(223)

(214)

Self-insured liabilities

23

14

38

(13)

Net cash provided by (used in) operating activities

932

743

2,261

1,208

Cash flows from investing activities:






Revenue earning vehicles expenditures

(1,764)

(1,060)

(7,853)

(5,196)

Proceeds from disposal of revenue earning vehicles

1,583

746

4,470

1,945

Non-vehicle capital asset expenditures

(45)

(24)

(104)

(41)

Proceeds from non-vehicle capital assets disposed of or to be disposed of

4

7

10

17

Collateral payments

—

—

—

(303)

Collateral returned in exchange for letters of credit

—

154

19

268

Return of (investment in) equity investments

—

—

(15)

—

Proceeds from the sale of a business, net of cash sold

—

53

—

871

Other

—

—

—

(1)

Net cash provided by (used in) investing activities

(222)

(124)

(3,473)

(2,440)

Cash flows from financing activities:






Proceeds from issuance of vehicle debt

903

1,523

8,282

10,462

Repayments of vehicle debt

(1,130)

(1,343)

(5,954)

(9,463)

Proceeds from issuance of non-vehicle debt

—

—

—

3,139

Repayments of non-vehicle debt

(4)

(5)

(14)

(6,346)

Payment of financing costs

(4)

(3)

(42)

(154)

Proceeds from Plan Sponsors

—

—

—

2,781

Proceeds from Rights Offering, net

—

4

—

1,639

Proceeds from the issuance of preferred stock, net

—

—

—

1,433

Distributions to common stockholders

—

—

—

(239)

Proceeds from exercises of Public Warrants

—

—

3

—

Share repurchases

(505)

—

(2,152)

—

Early redemption payments

—

—

—

(85)

Contributions from (distributions to) noncontrolling interests

—

(10)

—

(25)

Other

—

—

(4)

—

Net cash provided by (used in) financing activities

(740)

166

119

3,142

Effect of foreign currency exchange rate changes on cash and cash
     equivalents and restricted cash and cash equivalents

(25)

(14)

(50)

(22)

Net increase (decrease) in cash and cash equivalents and restricted cash
     and cash equivalents during the period

(55)

771

(1,143)

1,888

Cash and cash equivalents and restricted cash and cash equivalents at
     beginning of period(a)

1,563

2,695

2,651

1,578

Cash and cash equivalents and restricted cash and cash equivalents at end
     of period

$           1,508

$          3,466

$           1,508

$          3,466

(a)   Amounts include cash and cash equivalents and restricted cash and cash equivalents of Donlen which were held for sale as of December 31, 2020.

 

 

Supplemental Schedule I 

HERTZ GLOBAL HOLDINGS, INC. 

CONDENSED STATEMENT OF OPERATIONS BY SEGMENT 

Unaudited


Three Months Ended September 30, 2022

Three Months Ended September 30, 2021

(In millions)

Americas
RAC

International
RAC

Corporate

Hertz
Global

Americas
RAC

International
RAC

All other
operations

Corporate

Hertz
Global

Revenues

$       2,042

$            454

$            —

$      2,496

$       1,914

$            312

$             —

$            —

$      2,226

Expenses:
















Direct vehicle and operating

1,077

206

(1)

1,282

960

173

—

(2)

1,131

Depreciation of revenue earning vehicles and lease charges, net

252

42

—

294

24

37

—

—

61

Depreciation and amortization of non-vehicle assets

29

3

4

36

42

3

—

4

49

Selling, general and administrative

85

53

108

246

72

27

—

78

177

Interest expense, net:
















Vehicle

31

(4)

—

27

33

8

—

—

41

Non-vehicle

(23)

1

65

43

(4)

2

—

24

22

Total interest expense, net

8

(3)

65

70

29

10

—

24

63

Other (income) expense, net

(1)

4

(9)

(6)

(2)

(1)

—

(4)

(7)

Reorganization items, net

—

—

—

—

—

—

—

—

—

(Gain) from the sale of a business

—

—

—

—

—

—

—

—

—

Change in fair value of Public Warrants

—

—

(73)

(73)

—

—

—

(16)

(16)

Total expenses

1,450

305

94

1,849

1,125

249

—

84

1,458

Income (loss) before income taxes

$          592

$            149

$          (94)

647

$          789

$              63

$             —

$          (84)

768

Income tax (provision) benefit





(70)








(160)

Net income (loss)





577








608

Net (income) loss attributable to noncontrolling interests





—








(3)

Net income (loss) attributable to Hertz Global





577








605

Series A Preferred Stock deemed dividends





—








(34)

Net income (loss) attributable to Hertz Global common
     stockholders





$         577








$         571

NOTE: Effective in the second quarter of 2021, as a result of the sale of the Company's Donlen fleet management and leasing business on March 30, 2021, the All Other Operations reportable segment, which consisted primarily of the former Donlen business, was no longer deemed a reportable segment.

 

 

Supplemental Schedule I (continued)

HERTZ GLOBAL HOLDINGS, INC.

CONDENSED STATEMENT OF OPERATIONS BY SEGMENT

Unaudited


Nine Months Ended September 30, 2022

Nine Months Ended September 30, 2021

(In millions)

Americas RAC

International
RAC

Corporate

Hertz Global

Americas RAC

International
RAC

All other operations

Corporate

Hertz Global

Revenues

$       5,573

$         1,077

$            —

$      6,650

$       4,524

$            727

$          136

$            —

$      5,387

Expenses:
















Direct vehicle and operating

2,982

554

(2)

3,534

2,394

452

5

4

2,855

Depreciation of revenue earning vehicles and lease charges

220

121

—

341

314

106

—

—

420

Depreciation and amortization of non-vehicle assets

85

10

10

105

130

12

2

9

153

Selling, general and administrative

270

142

326

738

191

97

10

200

498

Interest expense, net:
















Vehicle

68

9

—

77

182

49

12

—

243

Non-vehicle

(44)

1

166

123

(9)

3

1

162

157

Total interest expense, net

24

10

166

200

173

52

13

162

400

Other (income) expense, net

(3)

(3)

—

(6)

(8)

(2)

—

(10)

(20)

Reorganization items, net

—

—

—

—

80

12

(1)

586

677

(Gain) from the sale of a business

—

—

—

—

—

—

—

(400)

(400)

Change in fair value of Public Warrants

—

—

(584)

(584)

—

—

—

(16)

(16)

Total expenses

3,578

834

(84)

4,328

3,274

729

29

535

4,567

Income (loss) before income taxes

$       1,995

$            243

$           84

2,322

$       1,250

$               (2)

$          107

$        (535)

820

Income tax (provision) benefit





(379)








(193)

Net income (loss)





1,943








627

Net (income) loss attributable to noncontrolling interests





—








(1)

Net income (loss) attributable to Hertz Global





1,943








626

Series A Preferred Stock deemed dividends





—








(34)

Net income (loss) attributable to Hertz Global common      stockholders





$      1,943








$         592

NOTE: Effective in the second quarter of 2021, as a result of the sale of the Company's Donlen fleet management and leasing business on March 30, 2021, the All Other Operations reportable segment, which consisted primarily of the former Donlen business, was no longer deemed a reportable segment.

 

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

September 30,

Nine Months Ended

September 30,

(In millions, except per share data)

2022

2021

2022

2021

Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share:






Net income (loss) attributable to Hertz Global

$                  577

$                  605

$               1,943

$                  626

Dividends on Series A Preferred Stock

—

(34)

—

(34)

Net income (loss) attributable and available to Hertz Global common stockholders, basic

577

571

1,943

592

Adjustments:






Income tax provision (benefit)

70

160

379

193

Vehicle and non-vehicle debt-related charges(a)(m)

13

12

39

116

Restructuring and restructuring related charges(b)

8

22

29

72

Acquisition accounting-related depreciation and amortization(c)

1

12

2

37

Reorganization items, net(d)

—

—

—

677

Pre-reorganization and non-debtor financing charges(e)

—

1

—

41

Gain from the Donlen Sale(f)

—

—

—

(400)

Unrealized (gains) losses on financial instruments(g)

(55)

(1)

(120)

(1)

Change in fair value of Public Warrants

(73)

(16)

(584)

(16)

Other items(h)(n)

6

11

89

(67)

Adjusted pre-tax income (loss)(i)

547

772

1,777

1,244

Income tax (provision) benefit on adjusted pre-tax income (loss)(j)

(137)

(185)

(444)

(299)

Adjusted Net Income (Loss)

$                  410

$                  587

$               1,333

$                  945

Weighted-average number of diluted shares outstanding

379

490

421

270

Adjusted Diluted Earnings (Loss) Per Share(k)

$                 1.08

$                 1.20

$                 3.16

$                 3.50

Adjusted Corporate EBITDA:






Net income (loss) attributable to Hertz Global

$                  577

$                  605

$               1,943

$                  626

Adjustments:






Income tax provision (benefit)

70

160

379

193

Non-vehicle depreciation and amortization(l)

36

49

105

153

Non-vehicle debt interest, net

43

22

123

157

Vehicle debt-related charges(a)(m)

9

8

25

62

Restructuring and restructuring related charges(b)

8

22

29

72

Reorganization items, net(d)

—

—

—

677

Pre-reorganization and non-debtor financing charges(e)

—

1

—

41

Gain from the Donlen Sale(f)

—

—

—

(400)

Unrealized (gains) losses on financial instruments(g)

(55)

(1)

(120)

(1)

Change in fair value of Public Warrants

(73)

(16)

(584)

(16)

Other items(h)(o)

3

10

96

(62)

Adjusted Corporate EBITDA

$                  618

$                  860

$               1,996

$               1,502


Supplemental Schedule II (continued)

(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 U.S. GAAP, excluding impairments and asset write-downs. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives. For the three and nine months ended September 30, 2022, charges incurred related primarily to International RAC. For the three months ended September 30, 2021, charges incurred were $15 million and $7 million for Corporate and International RAC, respectively. For the nine months ended September 30, 2021, charges incurred were $41 million, $23 million and $8 million for Corporate, International RAC and Americas RAC, respectively.

(c) 

Represents incremental expense associated with the amortization of other intangible assets and depreciation of property and equipment relating to acquisition accounting.

(d) 

Represents charges incurred associated with the Reorganization and emergence from Chapter 11. The charges relate primarily to Corporate.

(in millions)

Three Months Ended
September 30, 2021

Nine Months Ended
September 30, 2021

Professional fees and other bankruptcy related costs

$                              —

$                          257

Loss on extinguishment of debt

—

191

Backstop fee

—

164

Breakup fee

—

77

Contract settlements

—

25

Cancellation of share-based compensation grants

—

(10)

Net gain on settlement of liabilities subject to compromise

—

(22)

Other, net

—

(5)

Reorganization items, net

$                              —

$                          677


(e)   

Represents charges incurred prior to the filing of the Chapter 11 Cases comprised of preparation charges for the Reorganization, such as professional fees. Also includes, certain non-debtor financing and professional fee charges. The amounts incurred for Corporate were $1 million for the three months ended September 30, 2021, respectively. For Corporate, Americas RAC, International RAC, and All other operations were $17 million, $17 million, $5 million and $2 million for the nine months ended September 30, 2021, respectively.

(f) 

Represents the gain from the sale of the Company's Donlen business on March 30, 2021, primarily associated with Corporate.

(g) 

Represents unrealized gains (losses) on derivative financial instruments, primarily associated with Americas RAC.

(h)   

Represents miscellaneous items. For 2022, primarily includes bankruptcy claims, certain professional fees and charges related to the settlement of bankruptcy claims. For 2021, includes $100 million due to the suspension of depreciation in the first half of the year for the Donlen leasing and fleet management operations while classified as held for sale in all other operations, partially offset by letter of credit fees recorded in the first half of the year in Corporate and charges for a multiemployer pension plan withdrawal liability recorded in the first quarter in Corporate.

Supplemental Schedule II (continued)

(i)     Adjustments by caption on a pre-tax basis were as follows:

Increase (decrease) to expenses

Three Months Ended September
30,

Nine Months Ended September
30,

(In millions)

2022

2021

2022

2021

Direct vehicle and operating

$                      1

$                   (14)

$                   (49)

$                    45

Selling, general and administrative

(13)

(22)

(63)

(91)

Interest expense, net:






Vehicle

42

(8)

93

(81)

Non-vehicle

(5)

(4)

(21)

(54)

Total interest expense, net

37

(12)

72

(135)

Other income (expense), net

2

(9)

1

(17)

Reorganization items, net

—

—

—

(677)

Gain from the Donlen Sale

—

—

—

400

Change in fair value of Public Warrants

73

16

584

16

Total adjustments

$                  100

$                   (41)

$                  545

$                 (459)


(j)     

Derived utilizing a combined statutory rate of 25% and 24% for the three and nine months ended September 30, 2022 and 2021, respectively, applied to the respective Adjusted Pre-tax Income (Loss).

(k)   

Adjustments used to reconcile diluted earnings (loss) per share on a GAAP basis to Adjusted Diluted Earnings (Loss) Per Share are comprised of the same adjustments, inclusive of the tax impact, used to reconcile net income (loss) to Adjusted Net Income (Loss) divided by the weighted-average diluted shares outstanding during the period.

(l)     

Non-vehicle depreciation and amortization expense for Americas RAC, International RAC and Corporate for the three months ended September 30, 2022 was $29 million, $3 million and $4 million, respectively. For the three months ended September 30, 2021 was $42 million, $3 million, and $4 million for Americas RAC, International RAC and Corporate, respectively. Non-vehicle depreciation and amortization for Americas RAC, International RAC and Corporate for the nine months ended September 30, 2022 were $85 million, $10 million and $10 million, respectively.  For the nine months ended September 30, 2021 were $130 million, $12 million, $2 million and $9 million, respectively, for Americas RAC, International RAC, All other operations and Corporate.

(m) 

Vehicle debt-related charges for Americas RAC and International RAC for the three months ended September 30, 2022 were $8 million and $1 million, respectively, and were $6 million and $2 million, respectively, for the three months ended September 30, 2021. Vehicle debt-related charges for Americas RAC and International RAC for the nine months ended September 30, 2022 were $17 million and $8 million, respectively. For the nine months ended September 30, 2021, vehicle debt-related charges for Americas RAC, International RAC and All other operations were $48 million, $12 million and $2 million, respectively.

(n)

In 2022, includes letter of credit fees recorded in Corporate.

(o)   

In 2022, includes an adjustment for certain non-cash stock-based compensation charges recorded in Corporate.

 

 

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

September 30,

Nine Months Ended

September 30,

(In millions)

2022

2021

2022

2021

ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW:

Net cash provided by (used in) operating activities

$               932

$               743

$            2,261

$            1,208

Depreciation and reserves for revenue earning vehicles

(366)

(86)

(511)

(506)

Bankruptcy related payments - post emergence

6

—

84

—

Adjusted operating cash flow

572

657

1,834

702

Non-vehicle capital asset expenditures, net

(41)

(17)

(94)

(24)

Adjusted operating cash flow before vehicle investment

531

640

1,740

678

Net fleet growth after financing

(26)

(121)

(672)

(1,948)

Noncontrolling interests

—

(18)

—

(25)

Adjusted free cash flow

$               505

$               501

$            1,068

$          (1,295)








CALCULATION OF NET FLEET GROWTH AFTER FINANCING:

Revenue earning vehicles expenditures

$          (1,764)

$          (1,060)

$          (7,853)

$          (5,196)

Proceeds from disposal of revenue earning vehicles

1,583

746

4,470

1,945

Revenue earning vehicles capital expenditures, net

(181)

(314)

(3,383)

(3,251)

Depreciation and reserves for revenue earning vehicles

366

86

511

506

Financing activity related to vehicles:






Borrowings

903

1,523

8,282

$          10,462

Payments

(1,130)

(1,343)

(5,954)

$          (9,463)

Restricted cash changes, vehicle(a)

16

(73)

(128)

$             (202)

Net financing activity related to vehicles

(211)

107

2,200

797

Net fleet growth after financing

$               (26)

$             (121)

$             (672)

$          (1,948)


(a)   

Amount presented for the nine months ended September 30, 2021 excludes a $1 million non-cash impact of foreign currency exchange rates.

 

Supplemental Schedule IV

HERTZ GLOBAL HOLDINGS, INC.

NET DEBT CALCULATION

Unaudited


As of September 30, 2022

As of December 31, 2021

(In millions)

Vehicle

Non-Vehicle

Total

Vehicle

Non-Vehicle

Total

Term loans

$                    —

$               1,529

$               1,529

$                    —

$               1,539

$               1,539

Senior notes

—

1,500

1,500

—

1,500

1,500

U.S. vehicle financing (HVF III)

8,865

—

8,865

7,001

—

7,001

International vehicle financing (Various)

1,228

—

1,228

860

—

860

Other debt

72

12

84

93

16

109

Debt issue costs, discounts and premiums

(68)

(62)

(130)

(33)

(69)

(102)

Debt as reported in the balance sheet

10,097

2,979

13,076

7,921

2,986

10,907

Add:










Debt issue costs, discounts and premiums

68

62

130

33

69

102

Less:










Cash and cash equivalents

—

1,006

1,006

—

2,258

2,258

Restricted cash

203

—

203

77

—

77

Restricted cash and restricted cash equivalents associated with Term C Loan

—

245

245

—

245

245

Net Debt

$               9,962

$               1,790

$             11,752

$               7,877

$                  552

$               8,429












Corporate leverage ratio(a)

0.7x




0.3x



(a)   

Corporate leverage ratio is calculated as non-vehicle net debt divided by LTM Adjusted Corporate EBITDA.

 

Supplemental Schedule V 

HERTZ GLOBAL HOLDINGS, INC.

KEY METRICS CALCULATIONS

REVENUE, UTILIZATION AND DEPRECIATION

Unaudited

Global RAC


Three Months Ended

September 30,

Percent
Inc/(Dec)

Nine Months Ended
September 30,

Percent
Inc/(Dec)

($ in millions, except where noted)

2022

2021

2022

2021

Total RPD










Revenues

$       2,496

$       2,226


$       6,650

$       5,251

Foreign currency adjustment(a)

50

(11)


70

(34)

Total Revenues - adjusted for foreign currency

$       2,546

$       2,215


$       6,720

$       5,217

Transaction Days (in thousands)

37,123

33,489


103,188

88,023

Total RPD (in dollars)(b)

$       68.57

$       66.15

4 %

$       65.12

$       59.27

10 %












Total Revenue Per Unit Per Month










Total Revenues - adjusted for foreign currency

$       2,546

$       2,215


$       6,720

$       5,217

Average Rentable Vehicles (in whole units)(c)

503,508

456,566


483,083

410,662

Total revenue per unit (in whole dollars)

$       5,056

$       4,852


$     13,911

$     12,704

Number of months in period (in whole units)

3

3


9

9

Total RPU Per Month (in whole dollars)(b)(c)

$       1,685

$       1,617

4 %

$       1,546

$       1,412

9 %












Vehicle Utilization










Transaction Days (in thousands)

37,123

33,489


103,188

88,023

Average Rentable Vehicles (in whole units)(c)

503,508

456,566


483,083

410,662

Number of days in period (in whole units)

92

92


273

273

Available Car Days (in thousands)

46,339

42,010


131,955

112,226

Vehicle Utilization(c)(d)

80 %

80 %


78 %

78 %













Depreciation Per Unit Per Month










Depreciation of revenue earning vehicles and lease
     charges, net

$          294

$            61


$          341

$          420

Foreign currency adjustment(a) 

5

(1)


7

(4)

Adjusted depreciation of revenue earning vehicles and
     lease charges

$          299

$            60


$          348

$          416

Average Vehicles (in whole units)

532,740

473,492


509,086

420,753

Adjusted depreciation of revenue earning vehicles and
     lease charges divided by Average Vehicles (in whole
     dollars)

$          561

$          126


$          683

$          989

Number of months in period (in whole units)

3

3


9

9

Depreciation Per Unit Per Month (in whole dollars)

$          187

$            42

NM

$            76

$          110

(30) %

Note: Global RAC represents Americas RAC and International RAC segment information on a combined basis and excludes Corporate and the Company's former Donlen leasing operations which were sold on March 30, 2021.

NM - Not meaningful


(a) 

Based on December 31, 2021 foreign exchange rates.

(b) 

Effective in the third quarter of 2021, the Company revised its calculation of Total RPD and Total RPU to include ancillary retail vehicle sales revenues.

(c) 

Effective in the first quarter of 2022, the Company revised its calculation of Total RPU and Vehicle Utilization to use Average Rentable Vehicles in the denominator which excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.

(d) 

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

September 30,

Percent
Inc/(Dec)

Nine Months Ended
September 30,

Percent
Inc/(Dec)

($ in millions, except where noted)

2022

2021

2022

2021

Total RPD










Revenues

$       2,042

$       1,914


$       5,573

$       4,524

Foreign currency adjustment(a)

1

(1)


1

(2)

Total Revenues - adjusted for foreign currency

$       2,043

$       1,913


$       5,574

$       4,522

Transaction Days (in thousands)

29,653

27,627


84,392

72,870

Total RPD (in dollars)(b)

$       68.90

$       69.25

(1) %

$       66.05

$       62.06

6 %












Total Revenue Per Unit Per Month










Total Revenues - adjusted for foreign currency

$       2,043

$       1,913


$       5,574

$       4,522

Average Rentable Vehicles (in whole units)(c)

397,488

372,326


390,071

337,597

Total revenue per unit (in whole dollars)

$       5,140

$       5,138


$     14,289

$     13,395

Number of months in period (in whole units)

3

3


9

9

Total RPU Per Month (in whole dollars)(b)(c)

$       1,713

$       1,713

— %

$       1,588

$       1,488

7 %












Vehicle Utilization










Transaction Days (in thousands)

29,653

27,627


84,392

72,870

Average Rentable Vehicles (in whole units)(c)

397,488

372,326


390,071

337,597

Number of days in period (in whole units)

92

92


273

273

Available Car Days (in thousands)

36,585

34,261


106,538

92,261

Vehicle Utilization(c)(d)

81 %

81 %


79 %

79 %













Depreciation Per Unit Per Month










Depreciation of revenue earning vehicles and lease
     charges, net

$          252

$            24


$          220

$          314

Foreign currency adjustment(a) 

—

—


—

1

Adjusted depreciation of revenue earning vehicles and
     lease charges

$          252

$            24


$          220

$          315

Average Vehicles (in whole units)

425,596

387,368


415,110

346,032

Adjusted depreciation of revenue earning vehicles and
     lease charges divided by Average Vehicles (in whole
     dollars)

$          593

$            62


$          529

$          910

Number of months in period (in whole units)

3

3


9

9

Depreciation Per Unit Per Month (in whole dollars)

$          198

$            21

NM

$            59

$          101

(41) %

NM - Not meaningful

(a) 

Based on December 31, 2021 foreign exchange rates.

(b) 

Effective in the third quarter of 2021, the Company revised its calculation of Total RPD and Total RPU to include ancillary retail vehicle sales revenues.

(c) 

Effective in the first quarter of 2022, the Company revised its calculation of Total RPU and Vehicle Utilization to use Average Rentable Vehicles in the denominator which excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.

(d) 

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
September 30,

Percent
Inc/(Dec)

Nine  Months Ended
September 30,

Percent
Inc/(Dec)

($ in millions, except where noted)

2022

2021

2022

2021

Total RPD










Revenues

$             454

$             312


$     1,077

$        727

Foreign currency adjustment(a)

49

(10)


69

(32)

Total Revenues - adjusted for foreign currency

$             503

$            302


$     1,146

$        695

Transaction Days (in thousands)

7,470

5,862


18,796

15,153

Total RPD (in dollars)(b)

$          67.28

$          51.52

31 %

$     60.98

$     45.87

33 %












Total Revenue Per Unit Per Month










Total Revenues - adjusted for foreign currency

$             503

$             302


$     1,146

$        695

Average Rentable Vehicles (in whole units)(c)

106,020

84,241


93,012

73,066

Total revenue per unit (in whole dollars)

$          4,740

$          3,585


$   12,323

$     9,513

Number of months in period (in whole units)

3

3


9

9

Total RPU Per Month (in whole dollars)(b)(c)

$          1,580

$          1,195

32 %

$     1,369

$     1,057

30 %












Vehicle Utilization










Transaction Days (in thousands)

7,470

5,862


18,796

15,153

Average Rentable Vehicles (in whole units)(c)

106,020

84,241


93,012

73,066

Number of days in period (in whole units)

92

92


273

273

Available Car Days (in thousands)

9,754

7,749


25,417

19,965

Vehicle Utilization(c)(d)

77 %

76 %


74 %

76 %













Depreciation Per Unit Per Month










Depreciation of revenue earning vehicles and lease
     charges, net

$               42

$               37


$        121

$        106

Foreign currency adjustment(a) 

5

(1)


7

(5)

Adjusted depreciation of revenue earning vehicles and
     lease charges

$               47

$              36


$        128

$        101

Average Vehicles (in whole units)

107,144

86,124


93,976

74,721

Adjusted depreciation of revenue earning vehicles and
     lease charges divided by Average Vehicles (in
     whole dollars)

$             437

$             412


$     1,366

$     1,351

Number of months in period (in whole units)

3

3


9

9

Depreciation Per Unit Per Month (in whole dollars)

$             146

$             137

6 %

$        152

$        150

1 %


(a) 

Based on December 31, 2021 foreign exchange rates.

(b) 

Effective in the third quarter of 2021, the Company revised its calculation of Total RPD and Total RPU to include ancillary retail vehicle sales revenues.

(c) 

Effective in the first quarter of 2022, the Company revised its calculation of Total RPU and Vehicle Utilization to use Average Rentable Vehicles in the denominator which excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.

(d) 

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; reorganization items, net; pre-reorganization and non-debtor financing charges; gain from the sale of a business; change in fair value of Public Warrants; unrealized (gains) losses on financial instruments 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; reorganization items, net; pre-reorganization and non-debtor financing charges; gain from the sale of a business; change in fair value of Public Warrants; unrealized (gains) losses on financial instruments 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.

KEY METRICS

Available Car Days

Available 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.

Historically, the Company excluded revenue generated from ancillary retail vehicles sales. Effective in the third quarter 2021, the Company revised its calculation of Total RPD to include ancillary retail vehicle sales revenues to better align with current industry practice. Prior periods shown have been restated to conform with the revised definition.

Total Revenue Per Unit Per Month ("Total 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.

Historically, the Company excluded revenue generated from ancillary retail vehicles sales. Effective in the third quarter 2021, the Company revised its calculation of Total RPU to include ancillary retail vehicle sales revenues to better align with current industry practice. Also, historically, the company used Average Vehicles as the denominator to calculate Total RPU and effective in the first quarter of 2022, the Company revised the calculation to use Average Rentable Vehicles. Prior periods shown have been restated to conform with the revised definition.

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")

Effective in the first quarter of 2022, in connection with the appointment of the new CEO (who serves as our Chief Operating Decision Maker) and arising from significantly increased activity in vehicle dispositions, we began using Average Rentable Vehicles when calculating Available Car Days, Total RPU and Utilization instead of Average Vehicles. Average Rentable Vehicles excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels. We believe this is a better measure of the productivity of our rental fleet as it is unaffected by fluctuations in disposition activity. Prior periods have been restated to conform with the revisions, as appropriate.

 

 

 

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SOURCE Hertz Global Holdings, Inc.

Hertz Investor Relations: investorrelations@hertz.com OR Hertz Media Relations: mediarelations@hertz.com