HERTZ REPORTS THIRD QUARTER 2024 RESULTS

Nov 12, 2024

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"In the third quarter, we continued executing on our efforts to implement our transformation, focusing on our back-to-basics strategy to deliver sustainable, long-term returns for shareholders," said Gil West, Hertz CEO. "Our team's commitment to both our customers and our strategic objectives were evident throughout the summer. This dedication is reflective of our ongoing endeavors to improve operational performance and reposition the Company to achieve against its value proposition. There is still work to be done, but I am confident that the enhancements achieved over the course of this quarter demonstrate that we are on the right track."

ESTERO, Fla., Nov. 12, 2024 /PRNewswire/ -- Hertz Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz", "Hertz Global" or the "Company") today reported results for its third quarter 2024.

OVERVIEW 

  • Revenue of $2.6 billion
  • GAAP net loss of $1.3 billion, a negative 52% margin, or $4.34 loss per diluted share. Results include a non-cash asset impairment charge of $1.0 billion
  • Adjusted net loss of $208 million, or $0.68 loss per diluted share
  • Adjusted Corporate EBITDA of negative $157 million, a negative 6% margin, due mainly to an increase in vehicle depreciation of $436 million
  • GAAP operating cash flow of $894 million; Adjusted operating cash outflow of $132 million and adjusted free cash outflow of $154 million
  • Corporate liquidity of $1.6 billion at September 30, 2024

THIRD QUARTER RESULTS

The Company recorded a $1.0 billion non-cash asset impairment charge during the third quarter of 2024. The size of the impairment charge was largely due to the decline in fleet residual values over the last year or so. The timing of the impairment was driven by the cash flow generation of the business over the remaining hold period, which was primarily impacted by our recent accelerated fleet rotation initiative.  

Third quarter revenue was $2.6 billion in 2024. Revenue per day was relatively flat year over year supported by execution of the Company's commercial strategy aimed at maximizing RPU. This strategy resulted in volume declines in lower yielding channels as the Company remained disciplined on capacity and favored premium RPD business.

Vehicle depreciation of $937 million increased significantly compared to the prior year period. DPU for the third quarter of 2024 was $537. The Company expects to substantially complete the fleet rotation by the end of 2025, at which time it expects that DPU could normalize to under $300.

Direct vehicle and operating expense decreased primarily due to lower volume, partially offset by insurance and vehicle licensing and tax headwinds. DOE on a per transaction day basis in the third quarter of 2024 increased by 2% year over year and decreased 2% quarter over quarter. Structural operational efficiencies that the Company is executing on are expected to continue to drive ongoing improvements in per day unit costs. 

Adjusted Corporate EBITDA was negative $157 million in the quarter compared with positive Adjusted Corporate EBITDA in the prior year quarter. The decrease was due mainly to increased vehicle depreciation.

The Company's operational transformation is ongoing and is expected to be substantially completed by the end of 2025.

SUMMARY RESULTS

Three Months Ended

September 30,

Percent
Inc/(Dec)

2024 vs 2023

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

2024

2023

Hertz Global - Consolidated




Total revenues

$           2,576

$            2,703

(5) %

Net income (loss)

$          (1,332)

$               629

NM

Net income (loss) margin

(52) %

23 %

Adjusted net income (loss)(a)

$             (208)

$               230

NM

Adjusted diluted earnings (loss) per share(a)

$            (0.68)

$              0.70

NM

Adjusted Corporate EBITDA(a)

$             (157)

$               359

NM

Adjusted Corporate EBITDA Margin(a)

(6) %

13 %







Average Vehicles (in whole units)

583,516

590,489

(1) %

Average Rentable Vehicles (in whole units)

550,074

562,267

(2) %

Vehicle Utilization

82 %

83 %

Transaction Days (in thousands)

41,298

43,095

(4) %

Total RPD (in dollars)(b)

$            62.63

$            63.04

(1) %

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

$            1,567

$            1,610

(3) %

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

$               537

$               284

89 %






Americas RAC Segment




Total revenues

$            2,062

$            2,172

(5) %

Adjusted EBITDA

$              (169)

$               302

NM

Adjusted EBITDA Margin

(8) %

14 %







Average Vehicles (in whole units)

463,467

467,916

(1) %

Average Rentable Vehicles (in whole units)

432,608

442,353

(2) %

Vehicle Utilization

82 %

84 %

Transaction Days (in thousands)

32,693

34,278

(5) %

Total RPD (in dollars)(b)

$            63.20

$            63.45

— %

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

$            1,592

$            1,638

(3) %

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

$               592

$               295

100 %






International RAC Segment




Total revenues

$               514

$               531

(3) %

Adjusted EBITDA

$                 63

$               109

(42) %

Adjusted EBITDA Margin

12 %

21 %







Average Vehicles (in whole units)

120,049

122,572

(2) %

Average Rentable Vehicles (in whole units)

117,466

119,914

(2) %

Vehicle Utilization

80 %

80 %

Transaction Days (in thousands)

8,605

8,817

(2) %

Total RPD (in dollars)(b)

$            60.45

$            61.47

(2) %

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

$            1,476

$            1,507

(2) %

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

$               324

$               240

35 %


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 third quarter 2024 results will be held on November 12, 2024, at 9:00 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 Hertz Q3 2024 earnings participant call link, 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.

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 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 timing of the Company's fleet rotation, the performance of its long-lived assets and changes in market conditions, which could result in future impairments of its long-lived assets;
  • 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 an electric vehicle fleet and to play a central role in the modern mobility ecosystem;
  • the Company's ability to achieve cost savings and normalized depreciation levels, as well as revenue enhancements from its profitability initiatives and other operational programs;
  • 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 environmental, social and governance, or 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, which 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

September 30,

Nine Months Ended

September 30,

(In millions, except per share data)

2024

2023

2024

2023

Revenues

$           2,576

$           2,703

$           7,009

$           7,187

Expenses:






Direct vehicle and operating

1,470

1,499

4,276

4,067

Depreciation of revenue earning vehicles and lease charges, net

937

501

2,941

1,211

Depreciation and amortization of non-vehicle assets

34

33

107

100

Selling, general and administrative

189

209

594

715

Interest expense, net:






     Vehicle

157

162

447

405

     Non-vehicle

89

63

252

170

     Total interest expense, net

246

225

699

575

Other (income) expense, net

5

5

2

12

(Gain) on sale of non-vehicle capital assets

—

—

—

(162)

Bankruptcy-related litigation reserve

288

—

288

—

Long-Lived Assets impairment

1,048

—

1,048

—

Change in fair value of Public Warrants

(21)

(328)

(272)

(110)

     Total expenses

4,196

2,144

9,683

6,408

Income (loss) before income taxes

(1,620)

559

(2,674)

779

Income tax (provision) benefit

288

70

291

185

Net income (loss)

$         (1,332)

$              629

$         (2,383)

$              964








Weighted average number of shares outstanding:






     Basic

307

311

306

315

     Diluted

307

327

306

332

Earnings (loss) per share:






     Basic

$           (4.34)

$             2.02

$           (7.79)

$             3.06

     Diluted

$           (4.34)

$             0.92

$           (7.79)

$             2.57

 

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In millions, except par value and share data)

September 30,
2024

December 31,
2023

ASSETS


Cash and cash equivalents

$                      501

$                      764

Restricted cash and cash equivalents:


Vehicle

116

152

Non-vehicle

288

290

Total restricted cash and cash equivalents

404

442

Total cash and cash equivalents and restricted cash and cash equivalents

905

1,206

Receivables:


Vehicle

406

211

Non-vehicle, net of allowance of $54 and $47, respectively

934

980

Total receivables, net

1,340

1,191

Prepaid expenses and other assets

927

726

Revenue earning vehicles:


Vehicles

13,543

16,806

Less: accumulated depreciation

(308)

(2,155)

Total revenue earning vehicles, net

13,235

14,651

Property and equipment, net

639

671

Operating lease right-of-use assets

2,033

2,253

Intangible assets, net

2,856

2,863

Goodwill

1,044

1,044

Total assets

$                 22,979

$                 24,605

LIABILITIES AND STOCKHOLDERS' EQUITY


Accounts payable:


Vehicle

$                      131

$                      191

Non-vehicle

493

510

Total accounts payable

624

701

Accrued liabilities

1,176

860

Accrued taxes, net

222

157

Debt:


Vehicle

12,303

12,242

Non-vehicle

4,653

3,449

Total debt

16,956

15,691

Public Warrants

181

453

Operating lease liabilities

2,021

2,142

Self-insured liabilities

559

471

Deferred income taxes, net

559

1,038

Total liabilities

22,298

21,513

Commitments and contingencies


Stockholders' equity:


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

—

—

  Common stock, $0.01 par value, 481,324,312 and 479,990,286 shares issued, respectively,
     and 306,512,268 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

6,380

6,405

Retained earnings (Accumulated deficit)

(2,023)

360

Accumulated other comprehensive income (loss)

(251)

(248)

Total stockholders' equity

681

3,092

Total liabilities and stockholders' equity

$                 22,979

$                 24,605

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS


Three Months Ended

September 30,

Nine Months Ended

September 30,

(In millions)

2024

2023

2024

2023

Cash flows from operating activities:






Net income (loss)

$         (1,332)

$             629

$         (2,383)

$             964

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






Depreciation and reserves for revenue earning vehicles, net

1,025

606

3,219

1,490

Depreciation and amortization, non-vehicle

34

33

107

100

Amortization of deferred financing costs and debt discount (premium)

21

15

54

44

Stock-based compensation charges

16

22

48

65

Stock-based compensation forfeitures

—

—

(68)

—

Provision for receivables allowance

31

27

94

67

Deferred income taxes, net

(314)

(73)

(379)

(236)

Long-Lived Assets impairment

1,048

—

1,048

—

(Gain) loss on sale of non-vehicle capital assets

1

—

4

(165)

Change in fair value of Public Warrants

(21)

(328)

(272)

(110)

Changes in financial instruments

(16)

1

(8)

107

Other

(1)

4

(5)

9

Changes in assets and liabilities:






Non-vehicle receivables

156

(49)

(45)

(383)

Prepaid expenses and other assets

39

3

(20)

(95)

Operating lease right-of-use assets

91

88

281

253

Non-vehicle accounts payable

(81)

21

(18)

27

Accrued liabilities

239

(65)

310

3

Accrued taxes, net

12

(11)

64

45

Operating lease liabilities

(108)

(97)

(308)

(275)

Self-insured liabilities

54

25

87

—

Net cash provided by (used in) operating activities

894

851

1,810

1,910

Cash flows from investing activities:






Revenue earning vehicles expenditures

(2,231)

(1,769)

(7,858)

(8,312)

Proceeds from disposal of revenue earning vehicles

1,754

1,412

4,656

4,178

Non-vehicle capital asset expenditures

(22)

(28)

(81)

(151)

Proceeds from non-vehicle capital assets disposed of

12

2

19

178

Return of (investment in) equity investments

—

—

(3)

(1)

Net cash provided by (used in) investing activities

(487)

(383)

(3,267)

(4,108)

Cash flows from financing activities:






Proceeds from issuance of vehicle debt

1,576

1,720

3,259

5,741

Repayments of vehicle debt

(2,159)

(1,867)

(3,280)

(3,739)

Proceeds from issuance of non-vehicle debt

585

400

3,470

1,650

Repayments of non-vehicle debt

(499)

(754)

(2,234)

(1,513)

Payment of financing costs

(13)

(14)

(55)

(31)

Share repurchases

—

(50)

—

(272)

Other

(1)

(3)

(4)

(3)

Net cash provided by (used in) financing activities

(511)

(568)

1,156

1,833

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

15

(10)

—

3

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

(89)

(110)

(301)

(362)

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

994

1,166

1,206

1,418

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

$              905

$           1,056

$              905

$           1,056

 

Supplemental Schedule I

HERTZ GLOBAL HOLDINGS, INC.

CONDENSED STATEMENT OF OPERATIONS BY SEGMENT

Unaudited


Three Months Ended September 30, 2024

Three Months Ended September 30, 2023

(In millions)

Americas
RAC

International
RAC

Corporate

Hertz Global

Americas
RAC

International
RAC

Corporate

Hertz Global

Revenues

$           2,062

$              514

$                 —

$           2,576

$           2,172

$              531

$                 —

$           2,703

Expenses:














Direct vehicle and operating

1,202

271

(3)

1,470

1,241

258

—

1,499

Depreciation of revenue earning vehicles and lease
     charges, net

822

115

—

937

414

87

—

501

Depreciation and amortization of non-vehicle assets

28

3

3

34

27

3

3

33

Selling, general and administrative

113

57

19

189

114

40

55

209

Interest expense, net:














Vehicle

124

33

—

157

132

30

—

162

Non-vehicle

(1)

(4)

94

89

(4)

—

67

63

Total interest expense, net

123

29

94

246

128

30

67

225

Other (income) expense, net

2

1

2

5

1

—

4

5

Bankruptcy-related litigation reserve

—

—

288

288

—

—

—

—

Long-Lived Assets impairment

865

183

—

1,048

—

—

—

—

Change in fair value of Public Warrants

—

—

(21)

(21)

—

—

(328)

(328)

Total expenses

3,155

659

382

4,196

1,925

418

(199)

2,144

Income (loss) before income taxes

$          (1,093)

$             (145)

$             (382)

$          (1,620)

$              247

$              113

$              199

559

Income tax (provision) benefit





288






70

Net income (loss)





$          (1,332)






$              629

 

Supplemental Schedule I (continued)

HERTZ GLOBAL HOLDINGS, INC.

CONDENSED STATEMENT OF OPERATIONS BY SEGMENT

Unaudited


Nine Months Ended September 30, 2024

Nine Months Ended September 30, 2023

(In millions)

Americas
RAC

International
RAC

Corporate

Hertz Global

Americas
RAC

International
RAC

Corporate

Hertz Global

Revenues

$           5,729

$           1,280

$                 —

$           7,009

$           5,917

$           1,270

$                 —

$           7,187

Expenses:














Direct vehicle and operating

3,553

731

(8)

4,276

3,419

651

(3)

4,067

Depreciation of revenue earning vehicles and lease
     charges, net

2,603

338

—

2,941

1,035

176

—

1,211

Depreciation and amortization of non-vehicle assets

81

10

16

107

82

8

10

100

Selling, general and administrative

374

160

60

594

367

122

226

715

Interest expense, net:














Vehicle

363

84

—

447

338

67

—

405

Non-vehicle

(3)

(14)

269

252

(26)

(7)

203

170

Total interest expense, net

360

70

269

699

312

60

203

575

Other (income) expense, net

2

2

(2)

2

—

2

10

12

(Gain) on sale of non-vehicle capital assets

—

—

—

—

(162)

—

—

(162)

Bankruptcy-related litigation reserve

—

—

288

288

—

—

—

—

Long-Lived Assets impairment

865

183

—

1,048

—

—

—

—

Change in fair value of Public Warrants

—

—

(272)

(272)

—

—

(110)

(110)

Total expenses

7,838

1,494

351

9,683

5,053

1,019

336

6,408

Income (loss) before income taxes

$          (2,109)

$             (214)

$             (351)

(2,674)

$              864

$              251

$             (336)

779

Income tax (provision) benefit





291






185

Net income (loss)





$          (2,383)






$              964

 

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)

2024

2023

2024

2023

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






Net income (loss)(a)

$            (1,332)

$                 629

$            (2,383)

$                 964

Adjustments:






  Income tax provision (benefit)

(288)

(70)

(291)

(185)

  Vehicle and non-vehicle debt-related charges(b)

26

16

60

45

  Restructuring and restructuring related charges(c)

1

2

45

10

  Acquisition accounting-related depreciation and amortization(d)

—

—

1

1

  Unrealized (gains) losses on financial instruments(e)

(16)

1

(8)

107

  (Gain) on sale of non-vehicle capital assets(f)

—

—

—

(162)

  Bankruptcy-related litigation reserve(g)

288

—

288

—

  Long-Lived Assets impairment(h)

1,048

—

1,048

—

  Change in fair value of Public Warrants

(21)

(328)

(272)

(110)

  Other items(i)(m)

18

20

46

24

Adjusted pre-tax income (loss)(j)

(276)

270

(1,466)

694

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

68

(40)

366

(104)

Adjusted Net Income (Loss)

$               (208)

$                 230

$            (1,100)

$                 590

Weighted-average number of diluted shares outstanding

307

327

306

332

Adjusted Diluted Earnings (Loss) Per Share(l)

$              (0.68)

$                0.70

$              (3.59)

$                1.78

 

Supplemental Schedule II (continued)


Three Months Ended

September 30,

Nine Months Ended

September 30,

(In millions, except per share data)

2024

2023

2024

2023

Adjusted Corporate EBITDA:






Net income (loss)

$            (1,332)

$                 629

$            (2,383)

$                 964

Adjustments:






  Income tax provision (benefit)

(288)

(70)

(291)

(185)

  Non-vehicle depreciation and amortization

34

33

107

100

  Non-vehicle debt interest, net of interest income 

103

63

266

170

  Vehicle debt-related charges(b)

11

11

33

31

  Restructuring and restructuring related charges(c)

1

2

45

10

  Unrealized (gains) losses on financial instruments(e)

(16)

1

(8)

107

  (Gain) on sale of non-vehicle capital assets(f)

—

—

—

(162)

  Non-cash stock-based compensation forfeitures(n)

—

—

(64)

—

  Bankruptcy-related litigation reserve(g)

288

—

288

—

  Long-Lived Assets impairment(h)

1,048

—

1,048

—

  Change in fair value of Public Warrants

(21)

(328)

(272)

(110)

  Other items(i)

15

18

47

18

Adjusted Corporate EBITDA(o)

$               (157)

$                 359

$            (1,184)

$                 943

Adjusted Corporate EBITDA margin

(6) %

13 %

(17) %

13 %


(a)

Net income (loss) margin for the three and nine months ended September 30, 2024 was (52)% and (34)%, respectively. Net income (loss) margin for the three and nine months ended September 30, 2023 was 23% and 13%, respectively.

(b)

Represents debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums, including interest associated with the Exchangeable Notes issued in June 2024.

(c)

Represents charges incurred under restructuring actions as defined in U.S. GAAP. Also includes restructuring related charges such as incremental costs incurred related to personnel reductions and closure of underperforming locations.

(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 in the first quarter of 2023.

(f)

Represents gain on the sale of certain non-vehicle capital assets sold in March 2023.

(g)

Represents an increase to an existing bankruptcy-related litigation reserve recorded in September 2024.

(h)

Represents impairment charges recorded against the Fleet Long-Lived Assets in the third quarter of 2024.

(i)

Represents miscellaneous items. For the three and nine months ended September 30, 2024, primarily includes certain IT-related charges, cloud computing costs and certain storm-related vehicle damages, partially offset by certain litigation settlements and a loss recovery settlement. For the three and nine months ended September 30, 2023, primarily includes certain IT related charges, certain storm-related vehicle damages and certain professional fees and charges related to the settlement of bankruptcy claims, partially offset by a loss recovery settlement.

(j)

The tables below reconcile 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 September 30, 2024

Three Months Ended September 30, 2023

Expenses:

As Reported

Adjustment

As Adjusted

As Reported

Adjustment

As Adjusted

Direct vehicle and operating

$             1,470

$                  (7)

$             1,463

$             1,499

$                (17)

$             1,482

Depreciation of revenue earning vehicles and lease charges, net

937

—

937

501

3

504

Depreciation and amortization of non-vehicle assets

34

—

34

33

—

33

Selling, general and administrative

189

1

190

209

2

211

Interest expense, net:










Vehicle

157

(14)

143

162

(19)

143

Non-vehicle

89

(5)

84

63

(8)

55

Total interest expense, net

246

(19)

227

225

(27)

198

Other income (expense), net

5

(3)

2

5

—

5

Bankruptcy-related litigation reserve

288

(288)

—

—

—

—

Long-Lived Assets impairment

1,048

(1,048)

—

—

—

—

Change in fair value of Public Warrants

(21)

21

—

(328)

328

—

Total

$             4,196

$            (1,343)

$             2,853

$             2,144

$                289

$             2,433

(in millions)

Nine Months Ended September 30, 2024

Nine Months Ended September 30, 2023

Expenses:

As Reported

Adjustment

As Adjusted

As Reported

Adjustment

As Adjusted

Direct vehicle and operating

$             4,276

$                (23)

$             4,253

$             4,067

$                  —

$             4,067

Depreciation of revenue earning vehicles and lease charges, net

2,941

5

2,946

1,211

5

1,216

Depreciation and amortization of non-vehicle assets

107

—

107

100

—

100

Selling, general and administrative

594

(54)

540

715

(25)

690

Interest expense, net:










Vehicle

447

(40)

407

405

(141)

264

Non-vehicle

252

(25)

227

170

(25)

145

Total interest expense, net

699

(65)

634

575

(166)

409

Other income (expense), net

2

(6)

(4)

12

(1)

11

Gain on sale non-vehicle capital assets

—

—

—

(162)

162

—

Bankruptcy-related litigation reserve

288

(288)

—

—

—

—

Long-Lived Assets impairment

1,048

(1,048)

—

—

—

—

Change in fair value of Public Warrants

(272)

272

—

(110)

110

—

Total

$             9,683

$            (1,207)

$             8,476

$             6,408

$                  85

$             6,493


(k)

Derived utilizing a combined statutory rate of 25% and 15% for the three and nine months ended September 30, 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.

(l)

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.

(m)

Also includes letter of credit fees.

(n)

Represents former CEO awards forfeited in March 2024.

 

Supplemental Schedule II (continued)


(o)

The tables below reconcile 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 September 30, 2024

Three Months Ended September 30, 2023

Expenses:

As Reported

Adjustment

As Adjusted

As Reported

Adjustment

As Adjusted

Direct vehicle and operating

$             1,470

$                  (7)

$             1,463

$             1,499

$                (17)

$             1,482

Depreciation of revenue earning vehicles and lease charges, net

937

—

937

501

3

504

Depreciation and amortization of non-vehicle assets

34

(34)

—

33

(33)

—

Selling, general and administrative

189

1

190

209

2

211

Interest expense, net:










Vehicle

157

(14)

143

162

(19)

143

Non-vehicle

89

(89)

—

63

(63)

—

Total interest expense, net

246

(103)

143

225

(82)

143

Other income (expense), net

5

(5)

—

5

(1)

4

Bankruptcy-related litigation reserve

288

(288)

—

—

—

—

Long-Lived Assets impairment

1,048

(1,048)

—

—

—

—

Change in fair value of Public Warrants

(21)

21

—

(328)

328

—

Total expenses

$             4,196

$            (1,463)

$             2,733

$             2,144

$                200

$             2,344

(in millions)

Nine Months Ended September 30, 2024

Nine Months Ended September 30, 2023

Expenses:

As Reported

Adjustment

As Adjusted

As Reported

Adjustment

As Adjusted

Direct vehicle and operating

$             4,276

$                (23)

$             4,253

$             4,067

$                  —

$             4,067

Depreciation of revenue earning vehicles and lease charges, net

2,941

5

2,946

1,211

5

1,216

Depreciation and amortization of non-vehicle assets

107

(107)

—

100

(100)

—

Selling, general and administrative

594

9

603

715

(25)

690

Interest expense, net:










Vehicle

447

(40)

407

405

(141)

264

Non-vehicle

252

(252)

—

170

(170)

—

Total interest expense, net

699

(292)

407

575

(311)

264

Other income (expense), net

2

(18)

(16)

12

(5)

7

Gain on sale non-vehicle capital assets

—

—

—

(162)

162

—

Bankruptcy-related litigation reserve

288

(288)

—

—

—

—

Long-Lived Assets impairment

1,048

(1,048)

—

—

—

—

Change in fair value of Public Warrants

(272)

272

—

(110)

110

—

Total expenses

$             9,683

$            (1,490)

$             8,193

$             6,408

$              (164)

$             6,244

 

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)

2024

2023

2024

2023

ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW:






Net cash provided by (used in) operating activities

$             894

$             851

$          1,810

$          1,910

Depreciation and reserves for revenue earning vehicles, net

(1,025)

(606)

(3,219)

(1,490)

Bankruptcy related payments (post emergence) and other payments

(1)

(30)

4

(10)

Adjusted operating cash flow

(132)

215

(1,405)

410

Non-vehicle capital asset proceeds (expenditures), net

(10)

(26)

(62)

27

Adjusted operating cash flow before vehicle investment

(142)

189

(1,467)

437

Net fleet growth after financing

(12)

124

31

(630)

Adjusted free cash flow

$           (154)

$             313

$         (1,436)

$           (193)








CALCULATION OF NET FLEET GROWTH AFTER FINANCING:






Revenue earning vehicles expenditures

$         (2,231)

$         (1,769)

$         (7,858)

$         (8,312)

Proceeds from disposal of revenue earning vehicles

1,754

1,412

4,656

4,178

Revenue earning vehicles capital expenditures, net

(477)

(357)

(3,202)

(4,134)

Depreciation and reserves for revenue earning vehicles, net

1,025

606

3,219

1,490

Financing activity related to vehicles:






Borrowings

1,576

1,720

3,259

5,741

Payments

(2,159)

(1,867)

(3,280)

(3,739)

Restricted cash changes, vehicle

23

22

35

12

Net financing activity related to vehicles

(560)

(125)

14

2,014

Net fleet growth after financing

$             (12)

$             124

$               31

$           (630)

 

Supplemental Schedule IV

HERTZ GLOBAL HOLDINGS, INC.

NET DEBT CALCULATION

Unaudited


As of September 30, 2024

As of December 31, 2023

(In millions)

Vehicle

Non-Vehicle

Total

Vehicle

Non-Vehicle

Total

First Lien RCF

$                —

$             250

$             250

$                —

$                —

$                —

Term loans

—

1,999

1,999

—

2,013

2,013

First lien senior notes

—

750

750

—

—

—

Exchangeable notes

—

250

250

—

—

—

Senior unsecured notes

—

1,500

1,500

—

1,500

1,500

U.S. vehicle financing (HVF III)

9,871

—

9,871

10,203

—

10,203

International vehicle financing (Various)

2,341

—

2,341

2,001

—

2,001

Other debt

149

2

151

110

2

112

Debt issue costs, discounts and premiums

(58)

(98)

(156)

(72)

(66)

(138)

Debt as reported in the balance sheet

12,303

4,653

16,956

12,242

3,449

15,691

Add:










Debt issue costs, discounts and premiums

58

98

156

72

66

138

Less:










Cash and cash equivalents

—

501

501

—

764

764

Restricted cash

116

—

116

152

—

152

Restricted cash and restricted cash
     equivalents associated with Term C Loan

—

245

245

—

245

245

Net Debt

$        12,245

$          4,005

$        16,250

$        12,162

$          2,506

$        14,668












LTM Adjusted Corporate EBITDA(a)

(1,566)




561













Net Corporate Leverage

-2.6x




4.5x



NM - Not meaningful

(a)

Reconciliation of LTM Adjusted Corporate EBITDA for the nine months ended September 30, 2024 and twelve months ended December 31, 2023 are as follows:


(In millions)

Nine Months Ended
September 30, 2024

Twelve Months Ended
December 31, 2023

Net income (loss) three months ended:


December 31, 2023

$                             (348)

n/a

March 31, 2024

(186)

n/a

June 30, 2024

(865)

n/a

September 30, 2024

(1,332)

n/a

LTM net income (loss)

(2,731)

$                              616

Adjustments:


Income tax provision (benefit)

(436)

(330)

Non-vehicle depreciation and amortization

156

149

Non-vehicle debt interest, net of interest income

334

238

Vehicle debt-related charges

44

42

Restructuring and restructuring related charge

52

17

Unrealized (gains) losses on financial instruments

2

117

(Gain) on sale of non-vehicle capital assets

—

(162)

Non-cash stock-based compensation forfeitures

(64)

—

Bankruptcy-related litigation reserve

288

—

Long-Lived Assets impairment

1,048

—

Change in fair value of Public Warrants

(325)

(163)

Other items

66

37

LTM Adjusted Corporate EBITDA

$                          (1,566)

$                              561

 

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)

2024

2023

2024

2023

Total RPD










Revenues

$        2,576

$        2,703


$        7,009

$        7,187

Foreign currency adjustment(a)

10

13


35

32

Total Revenues - adjusted for foreign currency

$        2,586

$        2,716


$        7,044

$        7,219

Transaction Days (in thousands)

41,298

43,095


117,873

116,588

Total RPD (in dollars)

$        62.63

$        63.04

(1) %

$        59.76

$        61.92

(3) %












Total Revenue Per Unit Per Month










Total Revenues - adjusted for foreign currency

$        2,586

$        2,716


$        7,044

$        7,219

Average Rentable Vehicles (in whole units)

550,074

562,267


541,307

526,456

Total revenue per unit (in whole dollars)

$        4,702

$        4,831


$      13,014

$      13,712

Number of months in period (in whole units)

3

3


9

9

Total RPU Per Month (in whole dollars)

$        1,567

$        1,610

(3) %

$        1,446

$        1,524

(5) %












Vehicle Utilization










Transaction Days (in thousands)

41,298

43,095


117,873

116,588

Average Rentable Vehicles (in whole units)

550,074

562,267


541,307

526,456

Number of days in period (in whole units)

92

92


274

273

Available Car Days (in thousands)

50,628

51,744


148,368

143,823

Vehicle Utilization(b)

82 %

83 %


79 %

81 %













Depreciation Per Unit Per Month










Depreciation of revenue earning vehicles and lease
     charges, net

$           937

$           501


$        2,941

$        1,211

Foreign currency adjustment(a) 

3

2


11

6

Adjusted depreciation of revenue earning vehicles and
     lease charges

$           940

$           503


$        2,952

$        1,217

Average Vehicles (in whole units)

583,516

590,489


569,411

552,098

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

$        1,611

$           852


$        5,184

$        2,204

Number of months in period (in whole units)

3

3


9

9

Depreciation Per Unit Per Month (in whole dollars)

$           537

$           284

89 %

$           576

$           245

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
September 30,

Percent
Inc/(Dec)

Nine Months Ended

September 30,

Percent
Inc/(Dec)

($ in millions, except where noted)

2024

2023

2024

2023

Total RPD










Revenues

$        2,062

$        2,172


$        5,729

$        5,917

Foreign currency adjustment(a)

4

2


8

4

Total Revenues - adjusted for foreign currency

$        2,066

$        2,174


$        5,737

$        5,921

Transaction Days (in thousands)

32,693

34,278


95,469

94,626

Total RPD (in dollars)

$        63.20

$        63.45

— %

$        60.09

$        62.59

(4) %












Total Revenue Per Unit Per Month










Total Revenues - adjusted for foreign currency

$        2,066

$        2,174


$        5,737

$        5,921

Average Rentable Vehicles (in whole units)

432,608

442,353


434,714

422,595

Total revenue per unit (in whole dollars)

$        4,776

$        4,915


$      13,196

$      14,012

Number of months in period (in whole units)

3

3


9

9

Total RPU Per Month (in whole dollars)

$        1,592

$        1,638

(3) %

$        1,466

$        1,557

(6) %












Vehicle Utilization










Transaction Days (in thousands)

32,693

34,278


95,469

94,626

Average Rentable Vehicles (in whole units)

432,608

442,353


434,714

422,595

Number of days in period (in whole units)

92

92


274

273

Available Car Days (in thousands)

39,816

40,709


119,143

115,433

Vehicle Utilization(b)

82 %

84 %


80 %

82 %













Depreciation Per Unit Per Month










Depreciation of revenue earning vehicles and lease
     charges, net

$           822

$           414


$        2,603

$        1,035

Foreign currency adjustment(a) 

1

1


3

2

Adjusted depreciation of revenue earning vehicles and
     lease charges

$           823

$           415


$        2,606

$        1,037

Average Vehicles (in whole units)

463,467

467,916


460,638

446,101

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

$        1,777

$           886


$        5,658

$        2,325

Number of months in period (in whole units)

3

3


9

9

Depreciation Per Unit Per Month (in whole dollars)

$           592

$           295

100 %

$           629

$           258

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
September 30,

Percent
Inc/(Dec)

Nine Months Ended

September 30,

Percent
Inc/(Dec)

($ in millions, except where noted)

2024

2023

2024

2023

Total RPD










Revenues

$           514

$           531


$        1,280

$        1,270

Foreign currency adjustment(a)

6

11


28

27

Total Revenues - adjusted for foreign currency

$           520

$           542


$        1,308

$        1,297

Transaction Days (in thousands)

8,605

8,817


22,404

21,962

Total RPD (in dollars)

$        60.45

$        61.47

(2) %

$        58.37

$        59.07

(1) %












Total Revenue Per Unit Per Month










Total Revenues - adjusted for foreign currency

$           520

$           542


$        1,308

$        1,297

Average Rentable Vehicles (in whole units)

117,466

119,914


106,593

103,861

Total revenue per unit (in whole dollars)

$        4,429

$        4,520


$      12,269

$      12,490

Number of months in period (in whole units)

3

3


9

9

Total RPU Per Month (in whole dollars)

$        1,476

$        1,507

(2) %

$        1,363

$        1,388

(2) %












Vehicle Utilization










Transaction Days (in thousands)

8,605

8,817


22,404

21,962

Average Rentable Vehicles (in whole units)

117,466

119,914


106,593

103,861

Number of days in period (in whole units)

92

92


274

273

Available Car Days (in thousands)

10,813

11,035


29,225

28,389

Vehicle Utilization (b)

80 %

80 %


77 %

77 %













Depreciation Per Unit Per Month










Depreciation of revenue earning vehicles and lease
     charges, net

$           115

$             87


$           338

$           176

Foreign currency adjustment(a) 

2

1


8

4

Adjusted depreciation of revenue earning vehicles and
     lease charges

$           117

$             88


$           346

$           180

Average Vehicles (in whole units)

120,049

122,572


108,772

105,997

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

$           971

$           720


$        3,176

$        1,696

Number of months in period (in whole units)

3

3


9

9

Depreciation Per Unit Per Month (in whole dollars)

$           324

$           240

35 %

$           353

$           188

87 %


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; unrealized (gains) losses on financial instruments; change in fair value of Public Warrants and certain other miscellaneous or non-recurring 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; unrealized (gains) losses on financial instruments; change in fair value of Public Warrants and certain other miscellaneous or non-recurring 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 an important performance measure 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 an important performance measure 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 Loans, Senior RCF, First Lien Senior Notes, Second Lien Exchangeable Notes, Senior Unsecured 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.

Cision View original content:https://www.prnewswire.com/news-releases/hertz-reports-third-quarter-2024-results-302301717.html

SOURCE Hertz Global Holdings, Inc.

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