Feb. 22, 2011 (Marketwire) --
PARK RIDGE, NJ -- (Marketwire) -- 02/22/11 -- Hertz Global Holdings, Inc. (NYSE: HTZ)
-- Worldwide car rental revenues for the quarter up 5.8%, year-over-year,
with U.S. car rental revenues up 6.1%.
-- Adjusted pre-tax income(1) for the fourth quarter up 73.5% over the
prior year period, representing a 140 basis point margin improvement;
GAAP pre-tax loss for the fourth quarter of $7.8 million versus a loss
of $67.4 million in the prior year.
-- Adjusted diluted earnings per share(1) for the quarter of $0.10 versus
$0.06 in the prior year; GAAP diluted loss per share for the quarter of
$0.07 versus $0.08 in the prior year.
-- Worldwide revenues for the full year of $7.6 billion, an increase of
6.5% year-over-year.
-- Adjusted pre-tax income for the full year of 2010 of $348.1 million,
up 75.0% over the prior year, representing a 180 basis point margin
improvement; GAAP pre-tax loss for the full year of 2010 of
$13.6 million versus a loss of $171.0 million in 2009.
Hertz Global Holdings, Inc. (NYSE: HTZ) (with its subsidiaries, the
"Company" or "we") reported fourth quarter 2010 worldwide revenues of $1.8
billion, an increase of 5.5% year-over-year (a 6.3% increase excluding the
effects of foreign currency). Worldwide car rental revenues for the
quarter increased 5.8% (a 6.9% increase excluding the effects of foreign
currency) to $1.5 billion. Revenues from worldwide equipment rental for
the fourth quarter were $286.1 million, up 4.4% (a 4.1% increase excluding
the effects of foreign currency) over the prior year period.
Fourth quarter 2010 adjusted pre-tax income was $68.0 million, versus $39.2
million in the same period in 2009, an increase of $28.8 million, or 73.5%,
and loss before income taxes ("pre-tax loss"), on a GAAP basis, was $7.8
million, versus a loss of $67.4 million in the fourth quarter of 2009.
Corporate EBITDA(1) for the fourth quarter of 2010 was $265.7 million, an
increase of 20.2% from the same period in 2009.
Fourth quarter 2010 adjusted net income(1) was $40.4 million, an increase
of 79.6% from $22.5 million in the same period of 2009, resulting in
adjusted diluted earnings per share for the quarter of $0.10, compared with
$0.06 for the fourth quarter of 2009. Fourth quarter 2010 net loss
attributable to Hertz Global Holdings, Inc. and Subsidiaries' common
stockholders, or "net loss," on a GAAP basis, was $29.2 million or $0.07
per share on a diluted basis, compared with a net loss of $30.9 million, or
$0.08 per share on a diluted basis, for the fourth quarter of 2009.
Mark P. Frissora, the Company's Chairman and Chief Executive Officer, said,
" As previously announced on January 24, 2011, we beat our high end
guidance for all adjusted earning metrics for the full year 2010 due to
strong performance by our car rental businesses and consistent sequential
improvement by HERC. We reduced costs by an additional $438 million
during 2010, bringing our four-year total to almost $1.7 billion, and we
generated approximately $380 million in incremental revenues from a variety
of new products, services and geographies. In 2011, Hertz will continue to
focus on incremental cost management and revenue growth, as well as
additional refinancings to optimize our global debt structure, including
improvements to our maturity profile. In 2010, we completed almost $6
billion of global debt refinancings on highly favorable terms which will
materially decrease our interest expense through 2015."
INCOME MEASUREMENTS, FOURTH QUARTER 2010 & 2009
Q4 2010 Q4 2009
------------------------- -------------------------
Diluted Diluted
Earnings Earnings
Pre-tax Net (Loss) Pre-tax Net (Loss)
(in millions, except Income Income Per Income Income Per
per share amounts) (Loss) (Loss) Share (Loss) (Loss) Share
------- ------- ------- ------- ------- -------
Earnings Measures, as
reported (EPS
based on 413.0M and
410.0M diluted
shares,
respectively) $ (7.8) $ (29.2) $ (0.07) $ (67.4) $ (30.9) $ (0.08)
======= ======= ======= =======
Adjustments:
Purchase accounting 22.0 20.8
Non-cash debt
charges 37.8 50.7
Restructuring and
related charges 14.4 34.5
Derivative loss 0.7 0.6
Acquisition related
costs 0.9 -
------- -------
Adjusted pre-tax
income 68.0 68.0 39.2 39.2
Assumed provision for
income taxes at 34% (23.1) (13.4)
Noncontrolling
interest (4.5) (3.3)
------- ------- ------- -------
Earnings Measures, as
adjusted (EPS based
on 410.0M and 407.7M
diluted shares,
respectively) $ 68.0 $ 40.4 $ 0.10 $ 39.2 $ 22.5 $ 0.06
======= ======= ======= ======= ======= =======
The Company took $14.4 million in restructuring and related charges in the
fourth quarter of 2010, primarily attributable to job reductions, the
closure of rental locations and process reengineering.
The Company ended the fourth quarter of 2010 with total debt of $11.3
billion and net corporate debt(1) of $3.36 billion, compared with total debt
of $12.0 billion and net corporate debt of $3.78 billion as of September
30, 2010. Total debt decreased primarily due to a decrease in fleet debt
related to seasonality, partly offset by an increase due to the private
offering of $500 million of 7.375% senior notes issued in December 2010.
Net cash provided by operating activities was $479.1 million in the fourth
quarter of 2010, compared to $498.6 million last year.
WORLDWIDE CAR RENTAL
Worldwide car rental revenues were $1.5 billion for the fourth quarter of
2010, an increase of 5.8% (a 6.9% increase excluding the effects of foreign
currency) from the prior year period. Transaction days for the quarter
increased 6.6% [6.7% U.S.; 6.3% International]. U.S. off-airport total
revenues for the fourth quarter increased 13.8% year-over-year, and
transaction days increased 11.6%. Rental rate revenue per transaction day(1)
("RPD") for the quarter decreased 0.9% [(1.5)% U.S.; 0.1% International]
from the prior year period.
Worldwide car rental adjusted pre-tax income for the fourth quarter of 2010
was $130.3 million, an increase of $33.4 million from $96.9 million in the
prior year period. The result was driven by increased volume and strong
cost management performance. As a result, worldwide car rental achieved an
adjusted pre-tax margin, based on revenues, of 8.4% for the quarter, versus
6.6% in the prior year period.
The worldwide average number of Company-operated cars for the fourth
quarter of 2010 was 427,600, an increase of 3.1% over the prior year
period.
WORLDWIDE EQUIPMENT RENTAL
Worldwide equipment rental revenues were $286.1 million for the fourth
quarter of 2010, a 4.4% increase (a 4.1% increase excluding the effects of
foreign currency) from the prior year period.
Adjusted pre-tax income for worldwide equipment rental for the fourth
quarter of 2010 was $35.0 million, an increase of 35.7% from $25.8 million
in the prior year period, primarily attributable to the effects of
increased volume and cost management initiatives. Worldwide equipment
rental achieved an adjusted pre-tax margin, based on revenues, of 12.2%, a
280 basis point improvement over the prior year period, and a Corporate
EBITDA margin, based on revenues, of 40.1% for the quarter.
The average acquisition cost of rental equipment operated during the fourth
quarter of 2010 decreased by 3.1% year-over-year and net revenue earning
equipment as of December 31, 2010 was $1,703.7 million, a 7.0% decrease
from the amount as of December 31, 2009.
FULL YEAR RESULTS
Worldwide revenues for the full year 2010 were $7.6 billion, an increase of
6.5% over the prior year (the same increase when the effects of foreign
currency are excluded). Worldwide car rental revenues for the year
increased 8.5% (a 8.8% increase excluding the effects of foreign currency)
to $6.5 billion. Revenues from worldwide equipment rental for the year
were $1,070.1 million, down 3.7% (a 5.2% decrease excluding the effects of
foreign currency) over the prior year.
Adjusted pre-tax income for the year was $348.1 million, versus $198.9
million in the prior year, an increase of $149.2 million, or 75.0%, and
pre-tax loss, on a GAAP basis, was $13.6 million, versus a pre-tax loss of
$171.0 million in 2009. Corporate EBITDA for the year was $1,101.3
million, an increase of 12.4% from 2009.
Full year 2010 adjusted net income was $212.4 million, an increase of 82.2%
from 2009, resulting in adjusted diluted earnings per share for the year of
$0.52, compared to $0.29 in the prior year. Full year 2010 net loss, on a
GAAP basis, was $48.0 million or $0.12 per share on a diluted basis,
compared with a net loss of $126.0 million, or $0.34 per share on a diluted
basis, for 2009.
INCOME MEASUREMENTS, FULL YEAR 2010 & 2009
Full Year 2010 Full Year 2009
------------------------- -------------------------
Diluted Diluted
Earnings Earnings
Pre-tax Net (Loss) Pre-tax Net (Loss)
(in millions, except Income Income Per Income Income Per
per share amounts) (Loss) (Loss) Share (Loss) (Loss) Share
------- ------- ------- ------- ------- -------
Earnings Measures, as
reported (EPS
based on 411.9M and
371.5M diluted
shares,
respectively) $ (13.6) $ (48.0) $ (0.12) $(171.0) $(126.0) $ (0.34)
======= ======= ======= =======
Adjustments:
Purchase accounting 90.3 90.3
Non-cash debt
charges 182.6 171.9
Restructuring and
related charges 67.9 153.3
Derivative (gains)
losses 3.2 (2.4)
Acquisition related
costs 17.7 -
Third party
bankruptcy reserve - 4.3
Management
transition costs - 1.0
Gain on debt
buyback - (48.5)
------- -------
Adjusted pre-tax
income 348.1 348.1 198.9 198.9
Assumed provision for
income taxes at 34% (118.3) (67.6)
Noncontrolling
interest (17.4) (14.7)
------- ------- ------- -------
Earnings Measures, as
adjusted (EPS based
on 410.0M and 407.7M
diluted shares,
respectively) $ 348.1 $ 212.4 $ 0.52 $ 198.9 $ 116.6 $ 0.29
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The Company ended 2010 with total debt of $11.3 billion and net corporate
debt of $3.36 billion, compared with total debt of $10.4 billion and net
corporate debt of $3.63 billion as of December 31, 2009. Total debt
increased primarily due to the private offerings of $700 million of 7.50%
senior notes issued in September 2010 and $500 million of 7.375% senior
notes issued in December 2010. Net cash provided by operating activities
was $2,208.7 million for the year, compared to $1,693.3 million in 2009.
OUTLOOK
For the full year 2011, the Company forecasts the following:
Revenues $7.95 to $8.1 billion
Corporate EBITDA(2) $1.265 to $1.305 billion
Adjusted Pre-Tax Income(2) $525 - $565 million
Adjusted Net Income(2) $330 - $355 million
The Company forecasts full year 2011 revenues in the range of $7.95 billion
to $8.1 billion. The range is based on the projection of modest economic
growth, a strong U.S. Dollar and incremental franchising of certain rental
operations. The Company has replaced adjusted diluted earnings per share
guidance with guidance for adjusted net income. The adjusted diluted
number of shares outstanding is estimated to fluctuate within a range of
413 million to 450 million through the year. The estimate for Q1 is 413
million shares outstanding. For example, based on 440 million adjusted
diluted shares outstanding, the Company's full year 2011 guidance for
adjusted diluted earnings per share is $0.81 at the upper end of the
guidance range. The Company will provide an estimate of forecasted adjusted
diluted shares outstanding on a quarterly basis.
RESULTS OF THE HERTZ CORPORATION
The Company's operating subsidiary, The Hertz Corporation ("Hertz"), posted
the same revenues for the fourth quarter and full year 2010 as the Company.
Hertz's fourth quarter 2010 pre-tax income was $4.2 million versus the
Company's pre-tax loss of $7.8 million and Hertz's full year 2010 pre-tax
income was $33.4 million versus the Company's pre-tax loss of $13.6
million. The difference between Hertz's and the Company's results is
primarily due to additional interest expense recognized by the Company on
its 5.25% Convertible Senior Notes issued in May and June 2009.
(1) Adjusted pre-tax income, Corporate EBITDA, adjusted net income,
adjusted diluted earnings per share, net corporate debt and rental
rate revenue per transaction day are non-GAAP measures. See the
accompanying Tables and Exhibit for the reconciliations and definitions
for each of these non-GAAP measures and the reason the Company's
management believes that these measures provide useful information to
investors regarding the Company's financial condition and results of
operations.
(2) Management believes that Corporate EBITDA, adjusted pre-tax income and
adjusted net income are useful in measuring the comparable results of
the Company period-over-period. The GAAP measures most directly
comparable to Corporate EBITDA, adjusted pre-tax income and adjusted
net income are (i) pre-tax income and cash flows from operating
activities, (ii) pre-tax income and (iii) net income, respectively.
Because of the forward-looking nature of the Company's forecasted
Corporate EBITDA, adjusted pre-tax income and adjusted net income,
specific quantifications of the amounts that would be required to
reconcile forecasted cash flows from operating activities, pre-tax
income and net income are not available. The Company believes that
there is a degree of volatility with respect to certain of the
Company's GAAP measures, primarily related to fair value accounting
for its financial assets (which includes the Company's derivative
financial instruments), its income tax reporting and certain
adjustments made to arrive at the relevant non-GAAP measures, which
preclude the Company from providing accurate forecasted GAAP to
non-GAAP reconciliations. Based on the above, the Company believes
that providing estimates of the amounts that would be required to
reconcile the range of the non-GAAP Corporate EBITDA, adjusted pre-tax
income and adjusted net income to forecasted cash flows from operating
activities, pre-tax income and net income would imply a degree of
precision that would be confusing or misleading to investors for the
reasons indentified above.
CONFERENCE CALL INFORMATION
The Company's fourth quarter 2010 earnings conference call will be held on
Wednesday, February 23, 2011, at 10:00 a.m. (EDT). To access the conference
call live, dial 866-233-3843 in the U.S. and 651-224-7472 for international
callers using the passcode: 190758 or listen via webcast at
www.hertz.com/investorrelations. The conference call will be available for
replay one hour following the conclusion of the call until March 9, 2011 by
calling 800-475-6701 in the U.S. or 320-365-3844 for international callers
with the passcode: 190758. The press release and related tables
containing the reconciliations of non-GAAP measures will be available on
our website, www.hertz.com/investorrelations.
ABOUT THE COMPANY
Hertz is the world's largest general use car rental brand, operating from
approximately 8,500 locations in 146 countries worldwide. Hertz is the
number one airport car rental brand in the U.S. and at 83 major airports in
Europe, operating both corporate and licensee locations in cities and
airports in North America, Europe, Latin America, Asia, Australia and New
Zealand. In addition, the Company has licensee locations in cities and
airports in Africa and the Middle East. Product and service initiatives
such as Hertz #1 Club Gold®, NeverLost® customized, onboard navigation
systems, SIRIUS XM Satellite Radio, and unique cars and SUVs offered
through the Company's Prestige, Fun and Green Collections, set Hertz apart
from the competition. In 2008, the Company launched Connect by Hertz,
entering the global car sharing market in London, New York City and Paris.
Hertz also operates one of the world's largest equipment rental businesses,
Hertz Equipment Rental Corporation, offering a diverse line of equipment,
including tools and supplies, as well as new and used equipment for sale,
to customers ranging from major industrial companies to local contractors
and consumers from approximately 320 branches in the United States, Canada,
China, France, Spain and Italy.
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release and in related comments
by our management include "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Examples of
forward-looking statements include information concerning the Company's
outlook, anticipated revenues and results of operations, as well as any
other statement that does not directly relate to any historical or current
fact. These forward-looking statements often include words such as
"believe," "expect," "project," "anticipate," "intend," "plan," "estimate,"
"seek," "will," "may," "would," "should," "could," "forecasts" or similar
expressions. These statements are based on certain assumptions that the
Company has made in light of its experience in the industry as well as its
perceptions of historical trends, current conditions, expected future
developments and other factors that the Company believes are appropriate in
these circumstances. We believe these judgments are reasonable, but you
should understand that these statements are not guarantees of performance
or results, and our actual results could differ materially from those
expressed in the forward-looking statements due to a variety of important
factors, both positive and negative.
Among other items, such factors could include: levels of travel demand,
particularly with respect to airline passenger traffic in the United States
and in global markets; significant changes in the competitive environment,
including as a result of industry consolidation, and the effect of
competition in our markets, including on our pricing policies or use of
incentives; occurrences that disrupt rental activity during our peak
periods; our ability to achieve cost savings and efficiencies and realize
opportunities to increase productivity and profitability; an increase in
our fleet costs as a result of an increase in the cost of new vehicles
and/or a decrease in the price at which we dispose of used vehicles either
in the used vehicle market or under repurchase or guaranteed depreciation
programs; our ability to accurately estimate future levels of rental
activity and adjust the size of our fleet accordingly; our ability to
maintain sufficient liquidity and the availability to us of additional or
continued sources of financing for our revenue earning equipment and to
refinance our existing indebtedness; safety recalls by the manufacturers of
our vehicles and equipment; a major disruption in our communication or
centralized information networks; financial instability of the
manufacturers of our vehicles and equipment; any impact on us from the
actions of our licensees, franchisees, dealers and independent contractors;
our ability to maintain profitability during adverse economic cycles and
unfavorable external events (including war, terrorist acts, natural
disasters and epidemic disease); shortages of fuel and increases or
volatility in fuel costs; our ability to successfully integrate future
acquisitions and complete future dispositions; our ability to maintain
favorable brand recognition; costs and risks associated with litigation;
risks related to our indebtedness, including our substantial amount of debt
and our ability to incur substantially more debt and increases in interest
rates or in our borrowing margins; our ability to meet the financial and
other covenants contained in our senior credit facilities, our outstanding
unsecured senior notes and certain asset-backed and asset-based funding
arrangements; changes in accounting principles, or their application or
interpretation, and our ability to make accurate estimates and the
assumptions underlying the estimates, which could have an effect on
earnings; changes in the existing, or the adoption of new laws,
regulations, policies or other activities of governments, agencies and
similar organizations where such actions may affect our operations, the
cost thereof or applicable tax rates; changes to our senior management
team; the effect of tangible and intangible asset impairment charges; the
impact of our derivative instruments, which can be affected by fluctuations
in interest rates and commodity prices; and our exposure to fluctuations in
foreign exchange rates. Additional information concerning these and other
factors can be found in our filings with the Securities and Exchange
Commission, including our most recent Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K.
The Company therefore cautions you against relying on these forward-looking
statements. All forward-looking statements attributable to the Company or
persons acting on the Company's behalf are expressly qualified in their
entirety by the foregoing cautionary statements. All such statements speak
only as of the date made, and 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.
Tables and Exhibit:
Table 1: Condensed Consolidated Statements of Operations for the Three
Months and Years Ended December 31, 2010 and 2009
Table 2: Condensed Consolidated Statements of Operations As Reported
and As Adjusted for the Three Months and Years Ended December 31,
2010 and 2009
Table 3: Segment and Other Information for the Three Months and Years Ended
December 31, 2010 and 2009
Table 4: Selected Operating and Financial Data as of or for the Three
Months and Year Ended December 31, 2010 compared to December 31,
2009 and Selected Balance Sheet Data as of December 31, 2010 and
December 31, 2009
Table 5: Non-GAAP Reconciliations of Adjusted Pre-Tax Income (Loss) and
Adjusted Net Income (Loss) for the Three Months and Years Ended
December 31, 2010 and 2009
Table 6: Non-GAAP Reconciliations of EBITDA, Corporate EBITDA, Unlevered
Pre-Tax Cash Flow, Levered After-Tax Cash Flow Before Fleet Growth
and Levered After-Tax Cash Flow After Fleet Growth for the Three
Months and Years Ended December 31, 2010 and 2009
Table 7: Non-GAAP Reconciliations of Operating Cash Flows to EBITDA for
Three Months and Years Ended December 31, 2010 and 2009, Net
Corporate Debt, Net Fleet Debt and Total Net Debt as of
December 31, 2010, 2009 and 2008 and September 30, 2010 and 2009,
Car Rental Rate Revenue per Transaction Day and Equipment Rental
and Rental Related Revenue for the Three Months and Years Ended
December 31, 2010 and 2009
Exhibit 1: Non-GAAP Measures: Definitions and Use/Importance
Table 1
HERTZ GLOBAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
Unaudited
Three Months Ended As a Percentage
December 31, of Total Revenues
-------------------- -------------------
2010 2009 2010 2009
--------- --------- -------- --------
Total revenues $ 1,835.8 $ 1,740.7 100.0 % 100.0 %
--------- --------- -------- --------
Expenses:
Direct operating 1,036.8 1,021.7 56.5 % 58.7 %
Depreciation of revenue
earning equipment and lease
charges 451.2 463.1 24.6 % 26.6 %
Selling, general and
administrative 156.1 153.1 8.5 % 8.8 %
Interest expense 201.3 182.0 11.1 % 10.5 %
Interest and other income, net (1.8) (11.8) - % (0.7)%
--------- --------- -------- --------
Total expenses 1,843.6 1,808.1 100.4 % 103.9 %
--------- --------- -------- --------
Loss before income taxes (7.8) (67.4) (0.4)% (3.9)%
Benefit (provision) for taxes
on income (16.9) 39.8 (0.9)% 2.3 %
--------- --------- -------- --------
Net loss (24.7) (27.6) (1.3)% (1.6)%
Less: Net income attributable
to noncontrolling interest (4.5) (3.3) (0.2)% (0.2)%
--------- --------- -------- --------
Net loss attributable to Hertz
Global Holdings, Inc. and
Subsidiaries' common
stockholders $ (29.2) $ (30.9) (1.6)% (1.8)%
========= ========= ======== ========
Weighted average number of
shares outstanding:
Basic 413.0 410.0
Diluted 413.0 410.0
Loss per share attributable to
Hertz Global Holdings, Inc. and
Subsidiaries' common
stockholders:
Basic $ (0.07) $ (0.08)
Diluted $ (0.07) $ (0.08)
Year Ended As a Percentage
December 31, of Total Revenues
-------------------- -------------------
2010 2009 2010 2009
--------- --------- -------- --------
Total revenues $ 7,562.5 $ 7,101.5 100.0 % 100.0 %
--------- --------- -------- --------
Expenses:
Direct operating 4,282.4 4,084.2 56.7 % 57.5 %
Depreciation of revenue
earning equipment and lease
charges 1,868.1 1,931.4 24.7 % 27.2 %
Selling, general and
administrative 664.5 641.1 8.8 % 9.0 %
Interest expense 773.4 680.3 10.2 % 9.6 %
Interest and other income, net (12.3) (64.5) (0.2)% (0.9)%
--------- --------- -------- --------
Total expenses 7,576.1 7,272.5 100.2 % 102.4 %
--------- --------- -------- --------
Loss before income taxes (13.6) (171.0) (0.2)% (2.4)%
Benefit (provision) for taxes
on income (17.0) 59.7 (0.2)% 0.8 %
--------- --------- -------- --------
Net loss (30.6) (111.3) (0.4)% (1.6)%
Less: Net income attributable
to noncontrolling interest (17.4) (14.7) (0.2)% (0.2)%
--------- --------- -------- --------
Net loss attributable to Hertz
Global Holdings, Inc. and
Subsidiaries' common
stockholders $ (48.0) $ (126.0) (0.6)% (1.8)%
========= ========= ======== ========
Weighted average number of
shares outstanding:
Basic 411.9 371.5
Diluted 411.9 371.5
Loss per share attributable to
Hertz Global Holdings, Inc.