Le Lézard
Classified in: Tourism and vacations, Transportation, Business
Subjects: ERN, ERP

HERTZ REPORTS FIRST QUARTER 2024 RESULTS


"Fleet and direct operating costs weighed on this quarter's performance," said Gil West, Hertz chief executive officer. "We're tackling both issues - getting to the right supply of vehicles at an acceptable capital cost while at the same time driving productivity up and operating costs down. These, along with creating a superior customer experience, will be our focus as we position ourselves to take advantage of strong travel demand in this transition year. We've put the right strategy in place, and I see a clear path for Hertz to generate sustainable and higher earnings for our shareholders."

ESTERO, Fla., April 25, 2024 /PRNewswire/ -- Hertz Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz", "Hertz Global" or the "Company") today reported results for its first quarter 2024.

OVERVIEW

FIRST QUARTER RESULTS 

First quarter revenue was $2.1 billion, up 2% from the first quarter of 2023 and reflected continued strength in rental demand. Increased demand in leisure and rideshare customer channels drove a 9% increase in transaction days. First quarter RPD of $56.68 reflected a decline of 7% year over year, which moderated to 3% in March.

In the first quarter, the Company upsized its EV disposition plan by 10,000 vehicles, for a total of 30,000 EVs intended for sale in 2024. The Company incurred a $195 million charge to vehicle depreciation to write down the EVs held for sale which were remaining in inventory at quarter-end to fair value and recognize the disposition losses on EVs sold in the period. 

Vehicle depreciation in the first quarter of 2024 increased $588 million, or $339 on a per unit basis, primarily driven by deterioration in estimated forward residual values and disposition losses on ICE vehicles compared to gains in the prior year quarter. Additionally, of the $339 per unit increase, $119 was related to EVs held for sale. 

Direct operating expense on a per transaction day basis in the first quarter of 2024 increased by 3% year over year reflecting inflationary pressure as well as elevated collision and damage expense. Excluding collision and damage, DOE per day was flat. 

Adjusted Corporate EBITDA was negative $567 million in the quarter driven mainly by a $588 million increase in vehicle depreciation compared to the first quarter of 2023, of which $195 million related to EVs held for sale. The Company commenced a broad fleet refresh during the quarter and has revenue and cost initiatives in place to enhance the Company's future profitability.

SUMMARY RESULTS


Three Months Ended

March 31,


Percent
Inc/(Dec)

2024 vs 2023

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

2024


2023


Hertz Global - Consolidated






Total revenues

$          2,080


$          2,047


2 %

Net income (loss)

$            (186)


$             196


NM

Net income (loss) margin

(9) %


10 %



Adjusted net income (loss)(a)

$            (392)


$             126


NM

Adjusted diluted earnings (loss) per share(a)

$           (1.28)


$            0.39


NM

Adjusted Corporate EBITDA(a)

$            (567)


$             237


NM

Adjusted Corporate EBITDA Margin(a)

(27) %


12 %









Average Vehicles (in whole units)

547,492


504,528


9 %

Average Rentable Vehicles (in whole units)

529,232


483,288


10 %

Vehicle Utilization

76 %


77 %



Transaction Days (in thousands)

36,854


33,787


9 %

Total RPD (in dollars)(b)

$          56.68


$          60.85


(7) %

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

$          1,316


$          1,418


(7) %

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

$             592


$             253


NM







Americas RAC Segment






Total revenues

$          1,739


$          1,730


1 %

Adjusted EBITDA

$            (488)


$             261


NM

Adjusted EBITDA Margin

(28) %


15 %









Average Vehicles (in whole units)

450,585


412,983


9 %

Average Rentable Vehicles (in whole units)

433,823


393,512


10 %

Vehicle Utilization

77 %


79 %



Transaction Days (in thousands)

30,560


27,879


10 %

Total RPD (in dollars)(b)

$          56.92


$          62.08


(8) %

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

$          1,337


$          1,466


(9) %

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

$             649


$             282


NM







International RAC Segment






Total revenues

$             341


$             317


8 %

Adjusted EBITDA

$              (27)


$                53


NM

Adjusted EBITDA Margin

(8) %


17 %









Average Vehicles (in whole units)

96,907


91,545


6 %

Average Rentable Vehicles (in whole units)

95,409


89,776


6 %

Vehicle Utilization

72 %


72 %



Transaction Days (in thousands)

6,294


5,908


7 %

Total RPD (in dollars)(b)

$          55.52


$          55.06


1 %

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

$          1,221


$          1,208


1 %

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

$             326


$             120


NM


NM - Not meaningful

(a)

Represents a non-GAAP measure. See the accompanying reconciliations included in Supplemental Schedule II for 2024 and 2023.

(b)

Based on  December 31, 2023 foreign exchange rates.

EARNINGS WEBCAST INFORMATION

Hertz Global's live webcast and conference call to discuss its first quarter 2024 results will be held on April 25, 2024, at 8:30 a.m. Eastern Time. The conference call will be broadcast live in listen-only mode on the Company's investor relations website at IR.Hertz.com. If you would like to access the call by phone and ask a question, please go to https://register.vevent.com/register/BI56fe0b7f1062434abaa5ccf4ea43b795, and you will be provided with dial in details. Investors are encouraged to dial-in approximately 15 minutes prior to the call. A web replay will remain available on the website for approximately one year. The earnings release and related supplemental schedules containing the reconciliations of non-GAAP measures will be available on the Hertz website, IR.Hertz.com.

UNAUDITED FINANCIAL DATA, SUPPLEMENTAL SCHEDULES, NON-GAAP MEASURES AND DEFINITIONS

In this earnings release, we include select unaudited financial data of Hertz Global, Supplemental Schedules, which are provided to present segment results, and reconciliations of non-GAAP measures to their most comparable GAAP measures. Following the Supplemental Schedules, the Company provides definitions for terminology used throughout the earnings release and its rationale on the importance and usefulness of non-GAAP measures for investors and management.

ABOUT HERTZ

The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation owns and operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com.

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:

Additional information concerning these and other factors can be found in the Company's filings with the SEC, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date of this release, and, except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

UNAUDITED FINANCIAL INFORMATION


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS



Three Months Ended

March 31,

(In millions, except per share data)

2024


2023

Revenues

$                 2,080


$                 2,047

Expenses:




Direct vehicle and operating

1,366


1,221

Depreciation of revenue earning vehicles and lease charges, net

969


381

Depreciation and amortization of non-vehicle assets

32


35

Selling, general and administrative

162


221

Interest expense, net:




Vehicle

141


111

Non-vehicle

75


51

Total interest expense, net

216


162

Other (income) expense, net

2


9

(Gain) on sale of non-vehicle capital assets

?


(162)

Change in fair value of Public Warrants

(86)


118

Total expenses

2,661


1,985

Income (loss) before income taxes

(581)


62

Income tax (provision) benefit

395


134

Net income (loss)

$                  (186)


$                    196





Weighted average number of shares outstanding:




Basic

305


321

Diluted

305


323

Earnings (loss) per share:




Basic

$                 (0.61)


$                   0.61

Diluted

$                 (0.61)


$                   0.61

 

UNAUDITED CONSOLIDATED BALANCE SHEETS


(In millions, except par value and share data)

March 31, 2024


December 31, 2023

ASSETS




Cash and cash equivalents

$                  465


$                  764

Restricted cash and cash equivalents:




Vehicle

193


152

Non-vehicle

287


290

Total restricted cash and cash equivalents

480


442

Total cash and cash equivalents and restricted cash and cash equivalents

945


1,206

Receivables:




Vehicle

238


211

Non-vehicle, net of allowance of $49 and $47, respectively

975


980

Total receivables, net

1,213


1,191

Prepaid expenses and other assets

751


726

Revenue earning vehicles:




Vehicles

17,052


16,806

Less: accumulated depreciation

(2,435)


(2,155)

Total revenue earning vehicles, net

14,617


14,651

Property and equipment, net

667


671

Operating lease right-of-use assets

2,211


2,253

Intangible assets, net

2,862


2,863

Goodwill

1,044


1,044

Total assets

$             24,310


$             24,605

LIABILITIES AND STOCKHOLDERS' EQUITY




Accounts payable:




Vehicle

$                  632


$                  191

Non-vehicle

502


510

Total accounts payable

1,134


701

Accrued liabilities

883


860

Accrued taxes, net

177


157

Debt:




Vehicle

11,846


12,242

Non-vehicle

3,898


3,449

Total debt

15,744


15,691

Public Warrants

367


453

Operating lease liabilities

2,100


2,142

Self-insured liabilities

473


471

Deferred income taxes, net

620


1,038

Total liabilities

21,498


21,513

Commitments and contingencies




Stockholders' equity:




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

?


?

Common stock, $0.01 par value, 480,430,082 and 479,990,286 shares issued, respectively, and 305,618,038 and 305,178,242 shares outstanding, respectively

5


5

Treasury stock, at cost, 174,812,044 and 174,812,044 common shares, respectively

(3,430)


(3,430)

Additional paid-in capital

6,351


6,405

Retained earnings (Accumulated deficit)

174


360

Accumulated other comprehensive income (loss)

(288)


(248)

Total stockholders' equity

2,812


3,092

Total liabilities and stockholders' equity

$             24,310


$             24,605

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS



Three Months Ended

March 31,

(In millions)

2024


2023

Cash flows from operating activities:




Net income (loss)

$                  (186)


$                    196

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




Depreciation and reserves for revenue earning vehicles, net

1,070


466

Depreciation and amortization, non-vehicle

32


35

Amortization of deferred financing costs and debt discount (premium)

18


14

Stock-based compensation charges

16


21

Stock-based compensation forfeitures

(68)


?

Provision for receivables allowance

31


20

Deferred income taxes, net

(414)


(135)

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

1


(162)

Change in fair value of Public Warrants

(86)


118

Changes in financial instruments

6


108

Other

(10)


?

Changes in assets and liabilities:




Non-vehicle receivables

(36)


(50)

Prepaid expenses and other assets

(56)


(48)

Operating lease right-of-use assets

100


78

Non-vehicle accounts payable

(4)


(27)

Accrued liabilities

31


29

Accrued taxes, net

21


1

Operating lease liabilities

(100)


(84)

Self-insured liabilities

4


(18)

Net cash provided by (used in) operating activities

370


562

Cash flows from investing activities:




Revenue earning vehicles expenditures

(1,904)


(2,824)

Proceeds from disposal of revenue earning vehicles

1,233


1,206

Non-vehicle capital asset expenditures

(33)


(45)

Proceeds from non-vehicle capital assets disposed of

3


175

Return of (investment in) equity investments

(2)


?

Net cash provided by (used in) investing activities

(703)


(1,488)

Cash flows from financing activities:




Proceeds from issuance of vehicle debt

534


2,061

Repayments of vehicle debt

(892)


(1,190)

Proceeds from issuance of non-vehicle debt

935


425

Repayments of non-vehicle debt

(490)


(430)

Payment of financing costs

?


(8)

Share repurchases

?


(118)

Other

(2)


(1)

Net cash provided by (used in) financing activities

85


739

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

(13)


11

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

(261)


(176)

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

1,206


1,418

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

$                    945


$                 1,242

 

Supplemental Schedule I

HERTZ GLOBAL HOLDINGS, INC.

CONDENSED STATEMENT OF OPERATIONS BY SEGMENT

Unaudited



Three Months Ended March 31, 2024


Three Months Ended March 31, 2023

(In millions)

Americas RAC


International
RAC


Corporate


Hertz Global


Americas RAC


International
RAC


Corporate


Hertz Global

Revenues

$            1,739


$               341


$                 ?


$            2,080


$            1,730


$               317


$                 ?


$            2,047

Expenses:
















Direct vehicle and operating

1,152


216


(2)


1,366


1,039


182


?


1,221

Depreciation of revenue earning vehicles and lease charges, net

876


93


?


969


349


32


?


381

Depreciation and amortization of non-vehicle assets

25


4


3


32


28


2


5


35

Selling, general and administrative

124


57


(19)


162


105


37


79


221

Interest expense, net:
















Vehicle

116


25


?


141


93


18


?


111

Non-vehicle

(2)


(4)


81


75


(18)


(2)


71


51

Total interest expense, net

114


21


81


216


75


16


71


162

Other (income) expense, net

(1)


1


2


2


(1)


6


4


9

(Gain) on sale of non-vehicle capital assets

?


?


?


?


(162)


?


?


(162)

Change in fair value of Public Warrants

?


?


(86)


(86)


?


?


118


118

Total expenses

2,290


392


(21)


2,661


1,433


275


277


1,985

Income (loss) before income taxes

$             (551)


$               (51)


$                 21


(581)


$               297


$                 42


$             (277)


62

Income tax (provision) benefit







395








134

Net income (loss)







$             (186)








$               196

 

Supplemental Schedule II

HERTZ GLOBAL HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURE - ADJUSTED NET INCOME (LOSS), ADJUSTED DILUTED EARNINGS (LOSS) PER SHARE AND ADJUSTED
CORPORATE EBITDA

Unaudited



Three Months Ended

March 31,

(In millions, except per share data)

2024


2023

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




Net income (loss)(a)

$               (186)


$                196

Adjustments:




Income tax provision (benefit)

(395)


(134)

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

18


14

Restructuring and restructuring related charges(c)

32


3

Acquisition accounting-related depreciation and amortization(d)

?


?

Unrealized (gains) losses on financial instruments(e)

6


108

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

?


(162)

Change in fair value of Public Warrants

(86)


118

Other items(g)(k)

8


14

Adjusted pre-tax income (loss)(h)

(603)


157

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

211


(31)

Adjusted Net Income (Loss)

$               (392)


$                126

Weighted-average number of diluted shares outstanding

305


323

Adjusted Diluted Earnings (Loss) Per Share(j)

$              (1.28)


$               0.39

Adjusted Corporate EBITDA:




Net income (loss)

$               (186)


$                196

Adjustments:




Income tax provision (benefit)

(395)


(134)

Non-vehicle depreciation and amortization

32


35

Non-vehicle debt interest, net of interest income 

75


51

Vehicle debt-related charges(b)

12


10

Restructuring and restructuring related charges(c)

32


3

Unrealized (gains) losses on financial instruments(e)

6


108

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

?


(162)

Non-cash stock-based compensation forfeitures(l)

(64)


?

Change in fair value of Public Warrants

(86)


118

Other items(g)

7


12

Adjusted Corporate EBITDA(l)

$               (567)


$                237

Adjusted Corporate EBITDA margin

(27) %


12 %



(a)

Net income (loss) margin for the three months ended March 31, 2024 and 2023 was (9)% and 10%, respectively.

(b)

Represents debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.

(c)

Represents charges incurred under restructuring actions as defined in U.S. GAAP, excluding impairments and asset write-downs. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

(d)

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

(e)

Represents unrealized gains (losses) on derivative financial instruments. In 2023, also includes the realization of $88 million of previously unrealized gains resulting from the unwind of certain interest rate caps.

(f)

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

(g)

Represents miscellaneous items. For the three months ended March 31, 2024, primarily includes certain IT-related charges, partially offset by certain litigation settlements. For the three months ended March 31, 2023, primarily includes certain IT-related charges..

(h)

The table below reconciles expenses as reported in the condensed consolidated unaudited statement of operations to adjusted expenses utilized in calculating Adjusted Pretax Income (Loss) and Adjusted Net Income (Loss), all of which are deemed non-GAAP measures:

 

(in millions)

Three Months Ended

March 31, 2024


Three Months Ended

March 31, 2023

Expenses:

As Reported


Adjustment


As Adjusted


As Reported


Adjustment


As Adjusted

Direct vehicle and operating

1,366


$                  (6)


$             1,360


1,221


$                  ?


$             1,221

Depreciation of revenue earning vehicles and lease charges, net

969


5


974


381


2


383

Depreciation and amortization of non-vehicle assets

32


?


32


35


?


35

Selling, general and administrative

162


(39)


123


221


(14)


207

Interest expense, net:












Vehicle

141


(13)


128


111


(119)


(8)

Non-vehicle

75


(10)


65


51


(8)


43

Total interest expense, net

216


(23)


193


162


(127)


35

Other income (expense), net

2


(1)


1


9


?


9

Gain on sale non-vehicle capital assets

?


?


?


(162)


162


?

Change in fair value of Public Warrants

(86)


86


?


118


(118)


?

Total

$             2,661


$                  22


$             2,683


$             1,985


$                (95)


$             1,890



(i)

Derived utilizing a combined statutory rate of 35% and 20% for the three months ended March 31, 2024 and 2023, respectively, applied to the respective Adjusted Pre-tax Income (Loss). The increase in rate is primarily resulting from reduced EV-related tax credits anticipated to be used to decrease the Company's U.S. federal tax provision throughout 2024 based on the Company's expected purchases of electric vehicles.

(j)

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

(k)

Also includes letter of credit fees.

(l)

Represents former CEO awards forfeited in March 2024.

(m)

The table below reconciles expenses as reported in the condensed consolidated unaudited statement of operations to adjusted expenses utilized in calculating Adjusted Corporate EBITDA, both of which are deemed non-GAAP measures:

 

(in millions)

Three Months Ended

March 31, 2024


Three Months Ended

March 31, 2023

Expenses:

As Reported


Adjustment


As Adjusted


As Reported


Adjustment


As Adjusted

Direct vehicle and operating

1,366


$                  (6)


$             1,360


1,221


$                  ?


$             1,221

Depreciation of revenue earning vehicles and lease charges, net

969


5


974


381


2


383

Depreciation and amortization of non-vehicle assets

32


(32)


?


35


(35)


?

Selling, general and administrative

162


25


187


221


(14)


207

Interest expense, net:












Vehicle

141


(13)


128


111


(119)


(8)

Non-vehicle

75


(75)


?


51


(51)


?

Total interest expense, net

216


(88)


128


162


(170)


(8)

Other income (expense), net

2


(4)


(2)


9


(2)


7

Gain on sale non-vehicle capital assets

?


?


?


(162)


162


?

Change in fair value of Public Warrants

(86)


86


?


118


(118)


?

Total

$             2,661


$                (14)


$             2,647


$             1,985


$              (175)


$             1,810

 

Supplemental Schedule III

HERTZ GLOBAL HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURE - ADJUSTED OPERATING CASH FLOW

AND ADJUSTED FREE CASH FLOW

Unaudited



Three Months Ended

March 31,

(In millions)

2024


2023

ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW:




Net cash provided by (used in) operating activities

$                370


$                562

Depreciation and reserves for revenue earning vehicles, net

(1,070)


(466)

Bankruptcy related payments (post emergence) and other payments

3


8

Adjusted operating cash flow

(697)


104

Non-vehicle capital asset proceeds (expenditures), net

(30)


130

Adjusted operating cash flow before vehicle investment

(727)


234

Net fleet growth after financing

(2)


(317)

Adjusted free cash flow

$              (729)


$                (83)





CALCULATION OF NET FLEET GROWTH AFTER FINANCING:



Revenue earning vehicles expenditures

$           (1,904)


$           (2,824)

Proceeds from disposal of revenue earning vehicles

1,233


1,206

Revenue earning vehicles capital expenditures, net

(671)


(1,618)

Depreciation and reserves for revenue earning vehicles, net

1,070


466

Financing activity related to vehicles:




Borrowings

534


2,061

Payments

(892)


(1,190)

Restricted cash changes, vehicle

(43)


(36)

Net financing activity related to vehicles

(401)


835

Net fleet growth after financing

$                  (2)


$              (317)

 

Supplemental Schedule IV

HERTZ GLOBAL HOLDINGS, INC.

NET DEBT CALCULATION

Unaudited



As of March 31, 2024


As of December 31, 2023

(In millions)

Vehicle


Non-Vehicle


Total


Vehicle


Non-Vehicle


Total

First Lien RCF

$                ?


$             450


$             450


$                ?


$                ?


$                ?

Term loans

?


2,008


2,008


?


2,013


2,013

Senior notes

?


1,500


1,500


?


1,500


1,500

U.S. vehicle financing (HVF III)

10,051


?


10,051


10,203


?


10,203

International vehicle financing (Various)

1,761


?


1,761


2,001


?


2,001

Other debt

98


2


100


110


2


112

Debt issue costs, discounts and premiums

(64)


(62)


(126)


(72)


(66)


(138)

Debt as reported in the balance sheet

11,846


3,898


15,744


12,242


3,449


15,691

Add:












Debt issue costs, discounts and premiums

64


62


126


72


66


138

Less:












Cash and cash equivalents

?


465


465


?


764


764

Restricted cash

193


?


193


152


?


152

Restricted cash and restricted cash equivalents associated with Term C Loan

?


245


245


?


245


245

Net Debt

$        11,717


$          3,250


$        14,967


$        12,162


$          2,506


$        14,668













LTM Adjusted Corporate EBITDA(a)



(243)






561















Net Corporate Leverage



NM






4.5x




NM - Not meaningful

(a)

Reconciliation of LTM Adjusted Corporate EBITDA for the three months ended March 31, 2024 is as follows:

 

LTM Adjusted Corporate EBITDA:

Net income (loss) three months ended:


June 30, 2023

$            139

September 30, 2023

629

December 31, 2023

(348)

March 31, 2024

(186)

LTM net income (loss)

234

Adjustments:


Income tax provision (benefit)

(591)

Non-vehicle depreciation and amortization

146

Non-vehicle debt interest, net of interest income

262

Vehicle debt-related charges

44

Restructuring and restructuring related charge

46

Unrealized (gains) losses on financial instruments

15

Non-cash stock-based compensation forfeitures

(64)

Change in fair value of Public Warrants

(367)

Other items

32

LTM Adjusted Corporate EBITDA

$          (243)

 

Supplemental Schedule V

HERTZ GLOBAL HOLDINGS, INC.

KEY METRICS CALCULATIONS

REVENUE, UTILIZATION AND DEPRECIATION

Unaudited


Global RAC



Three Months Ended
March 31,


Percent
Inc/(Dec)

($ in millions, except where noted)

2024


2023


Total RPD






Revenues

$        2,080


$        2,047



Foreign currency adjustment(a)

9


9



Total Revenues - adjusted for foreign currency

$        2,089


$        2,056



Transaction Days (in thousands)

36,854


33,787



Total RPD (in dollars)

$        56.68


$        60.85


(7) %







Total Revenue Per Unit Per Month






Total Revenues - adjusted for foreign currency

$        2,089


$        2,056



Average Rentable Vehicles (in whole units)

529,232


483,288



Total revenue per unit (in whole dollars)

$        3,947


$        4,254



Number of months in period (in whole units)

3


3



Total RPU Per Month (in whole dollars)

$        1,316


$        1,418


(7) %







Vehicle Utilization






Transaction Days (in thousands)

36,854


33,787



Average Rentable Vehicles (in whole units)

529,232


483,288



Number of days in period (in whole units)

91


90



Available Car Days (in thousands)

48,181


43,609



Vehicle Utilization(b)

76 %


77 %









Depreciation Per Unit Per Month






Depreciation of revenue earning vehicles and lease charges, net

$           969


$           381



Foreign currency adjustment(a) 

3


2



Adjusted depreciation of revenue earning vehicles and lease charges

$           972


$           383



Average Vehicles (in whole units)

547,492


504,528



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

$        1,775


$           759



Number of months in period (in whole units)

3


3



Depreciation Per Unit Per Month (in whole dollars)

$           592


$           253


NM


Note: Global RAC represents Americas RAC and International RAC segment information on a combined basis and excludes Corporate

NM - Not meaningful

(a)

Based on  December 31, 2023 foreign exchange rates.

(b)

Calculated as Transaction Days divided by Available Car Days.

 

Supplemental Schedule V (continued)

HERTZ GLOBAL HOLDINGS, INC.

KEY METRICS CALCULATIONS

REVENUE, UTILIZATION AND DEPRECIATION

Unaudited


Americas RAC



Three Months Ended
March 31,


Percent
Inc/(Dec)

($ in millions, except where noted)

2024


2023


Total RPD






Revenues

$        1,739


$        1,730



Foreign currency adjustment(a)

?


1



Total Revenues - adjusted for foreign currency

$        1,739


$        1,731



Transaction Days (in thousands)

30,560


27,879



Total RPD (in dollars)

$        56.92


$        62.08


(8) %







Total Revenue Per Unit Per Month






Total Revenues - adjusted for foreign currency

$        1,739


$        1,731



Average Rentable Vehicles (in whole units)

433,823


393,512



Total revenue per unit (in whole dollars)

$        4,010


$        4,398



Number of months in period (in whole units)

3


3



Total RPU Per Month (in whole dollars)

$        1,337


$        1,466


(9) %







Vehicle Utilization






Transaction Days (in thousands)

30,560


27,879



Average Rentable Vehicles (in whole units)

433,823


393,512



Number of days in period (in whole units)

91


90



Available Car Days (in thousands)

39,496


35,420



Vehicle Utilization(b)

77 %


79 %









Depreciation Per Unit Per Month






Depreciation of revenue earning vehicles and lease charges, net

$           876


$           349



Foreign currency adjustment(a) 

1


1



Adjusted depreciation of revenue earning vehicles and lease charges

$           877


$           350



Average Vehicles (in whole units)

450,585


412,983



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

$        1,947


$           847



Number of months in period (in whole units)

3


3



Depreciation Per Unit Per Month (in whole dollars)

$           649


$           282


NM


NM - Not meaningful

(a)

Based on December 31, 2023 foreign exchange rates.

(b)

Calculated as Transaction Days divided by Available Car Days.

 

Supplemental Schedule V (continued)

HERTZ GLOBAL HOLDINGS, INC.

KEY METRICS CALCULATIONS

REVENUE, UTILIZATION AND DEPRECIATION

Unaudited


International RAC



Three Months Ended
March 31,


Percent
Inc/(Dec)

($ in millions, except where noted)

2024


2023


Total RPD






Revenues

$           341


$           317



Foreign currency adjustment(a)

8


8



Total Revenues - adjusted for foreign currency

$           349


$           325



Transaction Days (in thousands)

6,294


5,908



Total RPD (in dollars)

$        55.52


$        55.06


1 %







Total Revenue Per Unit Per Month






Total Revenues - adjusted for foreign currency

$           349


$           325



Average Rentable Vehicles (in whole units)

95,409


89,776



Total revenue per unit (in whole dollars)

$        3,663


$        3,623



Number of months in period (in whole units)

3


3



Total RPU Per Month (in whole dollars)

$        1,221


$        1,208


1 %







Vehicle Utilization






Transaction Days (in thousands)

6,294


5,908



Average Rentable Vehicles (in whole units)

95,409


89,776



Number of days in period (in whole units)

91


90



Available Car Days (in thousands)

8,686


8,191



Vehicle Utilization (b)

72 %


72 %









Depreciation Per Unit Per Month






Depreciation of revenue earning vehicles and lease charges, net

$             93


$             32



Foreign currency adjustment(a) 

2


1



Adjusted depreciation of revenue earning vehicles and lease charges

$             95


$             33



Average Vehicles (in whole units)

96,907


91,545



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

$           979


$           359



Number of months in period (in whole units)

3


3



Depreciation Per Unit Per Month (in whole dollars)

$           326


$           120


NM


NM - Not meaningful

(a)

Based on December 31, 2023  foreign exchange rates.

(b)

Calculated as Transaction Days divided by Available Car Days.

NON-GAAP MEASURES AND KEY METRICS

The term "GAAP" refers to accounting principles generally accepted in the United States. Adjusted EBITDA is the Company's segment measure of profitability and complies with GAAP when used in that context.

NON-GAAP MEASURES 

Non-GAAP measures are not recognized measurements under GAAP. When evaluating the Company's operating performance or liquidity, investors should not consider non-GAAP measures in isolation of, superior to, or as a substitute for measures of the Company's financial performance as determined in accordance with GAAP.

Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share ("Adjusted EPS")

Adjusted Net Income (Loss) represents income or loss attributable to the Company as adjusted to eliminate the impact of GAAP income tax; vehicle and non-vehicle debt-related charges; restructuring and restructuring related charges; acquisition accounting-related depreciation and amortization; former CEO stock-based compensation award forfeitures; change in fair value of Public Warrants; unrealized (gains) losses on financial instruments, gain on sale of non-vehicle capital assets and certain other miscellaneous items on a pre-tax basis. Adjusted Net Income (Loss) includes a provision (benefit) for income taxes derived utilizing a combined statutory rate. The combined statutory rate is management's estimate of the Company's long-term tax rate. Its most comparable GAAP measure is net income (loss) attributable to the Company.

Adjusted EPS represents Adjusted Net Income (Loss) on a per diluted share basis using the weighted-average number of diluted shares outstanding for the period. Its most comparable GAAP measure is diluted earnings (loss) per share.

Adjusted Net Income (Loss) and Adjusted EPS are important operating metrics because they allow management and investors to assess operational performance of the Company's business, exclusive of the items mentioned above that are not operational in nature or comparable to those of the Company's competitors.

Adjusted Corporate EBITDA and Adjusted Corporate EBITDA Margin

Adjusted Corporate EBITDA represents income or loss attributable to the Company as adjusted to eliminate the impact of GAAP income tax; non-vehicle depreciation and amortization; non-vehicle debt interest, net; vehicle debt-related charges; restructuring and restructuring related charges; change in fair value of Public Warrants; unrealized (gains) losses on financial instruments; gain on sale of non-vehicle capital assets and certain other miscellaneous items. 

Adjusted Corporate EBITDA Margin is calculated as the ratio of Adjusted Corporate EBITDA to total revenues.

Management uses these measures as operating performance metrics for internal monitoring and planning purposes, including the preparation of the Company's annual operating budget and monthly operating reviews, and analysis of investment decisions, profitability and performance trends. These measures enable management and investors to isolate the effects on profitability of operating metrics most meaningful to the business of renting and leasing vehicles. They also allow management and investors to assess the performance of the entire business on the same basis as its reportable segments. Adjusted Corporate EBITDA is also utilized in the determination of certain executive compensation. Its most comparable GAAP measure is net income (loss) attributable to the Company.

Adjusted operating cash flow and adjusted free cash flow

Adjusted operating cash flow represents net cash provided by operating activities net of the non-cash add back for vehicle depreciation and reserves, and exclusive of bankruptcy related payments made post emergence. Adjusted operating cash flow is important to management and investors as it provides useful information about the amount of cash generated from operations when fully burdened by fleet costs. 

Adjusted free cash flow represents adjusted operating cash flow plus the impact of net non-vehicle capital expenditures and net fleet growth after financing. Adjusted free cash flow is important to management and investors as it provides useful information about the amount of cash available for, but not limited to, the reduction of non-vehicle debt, share repurchase and acquisition.

The most comparable GAAP measure for adjusted operating cash flow and adjusted free cash flow is net cash provided by (used in) operating activities.

Net Fleet Growth After Financing

U.S. and International Rental Car segments Fleet Growth is defined as revenue earning vehicles expenditures, net of proceeds from disposals, plus vehicle depreciation and net vehicle financing, which includes borrowings, repayments and the change in restricted cash associated with vehicles. Fleet Growth is important as it allows the Company to assess the cash flow required to support its investment in revenue earning vehicles.

Net Non-vehicle Debt

Net Non-vehicle Debt is calculated as non-vehicle debt as reported on the Company's balance sheet, excluding the impact of unamortized debt issuance costs associated with non-vehicle debt, less cash and cash equivalents. Non-vehicle debt consists of the Company's Senior Term Loan, Senior RCF, Senior Notes, Senior Second Priority Secured Notes, Promissory Notes and certain other non-vehicle indebtedness of its domestic and foreign subsidiaries. Net Non-vehicle Debt is important to management and investors as it helps measure the Company's corporate leverage. Net Non-vehicle Debt also assists in the evaluation of the Company's ability to service its non-vehicle debt without reference to the expense associated with the vehicle debt, which is collateralized by assets not available to lenders under the non-vehicle debt facilities.

Net Vehicle Debt

Net Vehicle Debt is calculated as vehicle debt as reported on the Company's balance sheet, excluding the impact of unamortized debt issue costs associated with vehicle debt, less restricted cash associated with vehicles. Restricted cash associated with vehicle debt is restricted for the purchase of revenue earning vehicles and other specified uses under the Company's vehicle debt facilities. Net Vehicle Debt is important to management, investors and ratings agencies as it helps measure the Company's leverage with respect to its vehicle assets.

Total Net Debt

Total Net Debt is calculated as total debt, excluding the impact of unamortized debt issuance costs, less total cash and cash equivalents and restricted cash associated with vehicle debt. Unamortized debt issuance costs are required to be reported as a deduction from the carrying amount of the related debt obligation under GAAP. Management believes that eliminating the effects that these costs have on debt will more accurately reflect the Company's net debt position. Total Net Debt is important to management, investors and ratings agencies as it helps measure the Company's gross leverage.

Net Corporate Leverage 

Net Corporate Leverage is calculated as non-vehicle net debt divided by Adjusted Corporate EBITDA for the last twelve months. Net Corporate Leverage is important to management and investors as it measures the Company's corporate leverage net of unrestricted cash. Net Corporate Leverage also assists in the evaluation of the Company's ability to service its non-vehicle debt with reference to the generation of Adjusted Corporate EBITDA.

KEY METRICS

Available Rental Car Days

Available Rental Car Days represents Average Rentable Vehicles multiplied by the number of days in a given period.

Average Vehicles ("Fleet Capacity" or "Capacity")

Average Vehicles is determined using a simple average of the number of vehicles in the fleet whether owned or leased by the Company at the beginning and end of a given period.

Average Rentable Vehicles

Average Rentable Vehicles reflects Average Vehicles excluding vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels.

Depreciation Per Unit Per Month ("Depreciation Per Unit" or "DPU")

Depreciation Per Unit Per Month represents the amount of average depreciation expense and lease charges per vehicle per month, exclusive of the impacts of foreign currency exchange rates so as not to affect the comparability of underlying trends. This metric is important to management and investors as it reflects how effectively the Company is managing the costs of its vehicles and facilitates comparisons with other participants in the vehicle rental industry.

Total Revenue Per Transaction Day ("Total RPD"or "RPD"; also referred to as "pricing")

Total RPD represents revenue generated per transaction day, excluding the impact of foreign currency exchange rates so as not to affect the comparability of underlying trends. This metric is important to management and investors as it represents a measure of changes in the underlying pricing in the vehicle rental business and encompasses the elements in vehicle rental pricing that management has the ability to control.

Total Revenue Per Unit Per Month ("Total RPU", "RPU" or "Total RPU Per Month")

Total RPU Per Month represents the amount of revenue generated per vehicle in the rental fleet each month, excluding the impact of foreign currency exchange rates so as not to affect the comparability of underlying trends. This metric is important to management and investors as it provides a measure of  revenue productivity relative to the number of vehicles in our rental fleet whether owned or leased, or asset efficiency.              

Transaction Days ("Days"; also referred to as "volume")

Transaction Days represents the total number of 24-hour periods, with any partial period counted as one Transaction Day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period. Thus, it is possible for a vehicle to attain more than one Transaction Day in a 24-hour period. This metric is important to management and investors as it represents the number of revenue-generating days.

Vehicle Utilization ("Utilization")

Vehicle Utilization represents the ratio of Transaction Days to Available Rental Car Days. This metric is important to management and investors as it is the measurement of the proportion of vehicles that are being used to generate revenues relative to rentable fleet capacity.

 

SOURCE Hertz Global Holdings, Inc.


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