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HERTZ GLOBAL HOLDINGS REPORTS FOURTH QUARTER AND FULL YEAR 2021 RESULTS

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Cision

- Quarterly revenues of $1.9 billion

- Quarterly Company GAAP net loss of $260 million, or $1.52 loss per share; Adjusted net income of $426 million, primarily excluding a $643 million non-cash remeasurement expense associated with the Company's public warrants

- Record fourth quarter Adjusted Corporate EBITDA of $628 million and Adjusted Corporate EBITDA Margin of 32%

- Quarterly operating cash flow of $598 million and Adjusted operating cash flow of $573 million

- Full year GAAP loss per share of $0.27; Adjusted earnings per share of $4.39

- Full year Company GAAP net income of $366 million

- Record full year Adjusted Corporate EBITDA of $2.1 billion

- Corporate liquidity of $3.2 billion at December 31st, including $2.3 billion in unrestricted cash

- Company repurchased 48 million common shares since Nasdaq listing through February 17, 2022

- Stephen Scherr named permanent CEO effective February 28, 2022

ESTERO, Fla., Feb. 23, 2022 /PRNewswire/ — Hertz Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz", "Hertz Global" or the "Company") today reported results for its fourth quarter and full year 2021.

For the fourth quarter 2021, the Company generated total revenues of $1.9 billion, which were 78% higher than the fourth quarter of 2020, and 9% below the fourth quarter of 2019, excluding Donlen. RPU rose 31% from the fourth quarter of 2019, due to disciplined fleet management and a continued recovery in travel demand. These trends, along with strong cost performance, drove $0.91 of Adjusted earnings per share and $628 million of Adjusted Corporate EBITDA in the quarter, both of which were fourth quarter records for the Company.

For the full year 2021, the Company generated total revenues of $7.3 billion and Adjusted earnings per share of $4.39. Adjusted Corporate EBITDA was a record $2.1 billion, a margin of 29%. Liquidity at the end of 2021 was $3.2 billion after giving effect to the redemption of the Company's preferred shares and the repurchase of 27.5 million shares of its common stock, both of which occurred during the fourth quarter.

"2021 was a transformative year for Hertz," said Mark Fields, Hertz Interim Chief Executive Officer. "Sustained structural improvements and disciplined fleet management contributed to a strong performance across our top and bottom line, despite the challenges presented by COVID, supply chain constraints and labor shortages. We have demonstrated our resilience and ability to innovate and to make progress on playing a central role in the modern mobility ecosystem."

SUMMARY RESULTS


Three Months Ended

December 31,


Percent Inc/
(Dec)

2021 vs 2020


Percent Inc/
(Dec)

2021 vs 2019

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

2021


2020


2019



Hertz Global - Consolidated










Total revenues

$ 1,949


$ 1,235


$ 2,326


58%


(16)%

Adjusted net income (loss)(a)

$ 426


$ (187)


$ (34)


NM


NM

Adjusted diluted earnings (loss) per share(a)

$ 0.91


$ (1.20)


$ (0.24)


NM


NM

Adjusted Corporate EBITDA(a)

$ 628


$ (140)


$ 54


NM


NM

Adjusted Corporate EBITDA Margin(a)

32%


(11)%


2%















Average Vehicles (in whole units)

470,900


381,927


686,697


23%


(31)%

Vehicle Utilization

75%


73%


77%





Transaction Days (in thousands)

32,551


25,486


48,961


28%


(34)%

Total RPD (in dollars)(b)

$ 60.29


$ 43.12


$ 44.73


40%


35%

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

$ 1,389


$ 959


$ 1,063


45%


31%

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

$ 57


$ 276


$ 272


(79)%


(79)%











Americas RAC Segment










Total revenues

$ 1,691


$ 899


$ 1,726


88%


(2)%

Adjusted EBITDA

$ 653


$ (108)


$ 43


NM


NM

Adjusted EBITDA Margin

39%


(12)%


2%















Average Vehicles (in whole units)

384,492


308,107


536,065


25%


(28)%

Vehicle Utilization

77%


73%


79%





Transaction Days (in thousands)

27,215


20,754


38,851


31%


(30)%

Total RPD (in dollars)(b)

$ 62.10


$ 43.35


$ 44.45


43%


40%

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

$ 1,465


$ 973


$ 1,074


51%


36%

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

$ 26


$ 294


$ 282


(91)%


(91)%











International RAC Segment










Total revenues

$ 258


$ 194


$ 421


33%


(39)%

Adjusted EBITDA

$ 21


$ (46)


$ (5)


NM


NM

Adjusted EBITDA Margin

8%


(24)%


(1)%















Average Vehicles (in whole units)

86,408


73,820


150,632


17%


(43)%

Vehicle Utilization

67%


70%


73%





Transaction Days (in thousands)

5,335


4,732


10,111


13%


(47)%

Total RPD (in dollars)(b)

$ 51.06


$ 42.11


$ 45.79


21%


12%

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

$ 1,051


$ 900


$ 1,024


17%


3%

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

$ 197


$ 200


$ 234


(2)%


(16)%


NM - Not meaningful


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


(a)

Represents a non-GAAP measure. See the accompanying reconciliations included in Supplemental Schedule II for 2021 and 2020 periods. For 2019, see Supplemental Schedule II as reported in the Company's fourth quarter and full year 2020 press released dated February 26, 2021 which is available on Hertz' website at ir.hertz.com. Adjusted Corporate EBITDA Margin is calculated by dividing Adjusted Corporate EBITDA by Total revenues.





(b)

Based on December 31, 2020 foreign exchange rates.

LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity position totaled $3.2 billion at December 31, 2021, comprised of $2.3 billion in unrestricted cash and $925 million of availability under the First Lien RCF (as defined below).

During the fourth quarter 2021, the Company repurchased 27.5 million shares of its common stock for an aggregate price of $708 million. Between January 1, 2022 and February 17, 2022, the Company repurchased 20,589,620 shares of Hertz Global's common stock for an aggregate purchase price of $431 million. As of February 17, 2022 $1.2 billion remains available for share repurchases under the Board-approved plan.

Also during the fourth quarter, the Company repurchased all 1,500,000 outstanding shares of its Series A Preferred Stock for aggregate cash payments of $1.9 billion. The Company funded the preferred share repurchases with available cash, including proceeds from the offering of the Senior Notes Due 2026 and Senior Notes Due 2029.

The Company completed its restructuring in June 2021 with significantly lower non-vehicle debt levels relative to its pre-restructuring balance sheet. At December 31, 2021 the Company had $3.0 billion in outstanding non-vehicle debt, comprised of a $1.3 billion Term B Loan, a $245 million Term C Loan that will support the issuance of letters of credit and $1.5 billion unsecured Senior Notes Due 2026 and Senior Notes Due 2029 that were issued to fund the repurchase of Hertz Global's Series A Preferred Stock. In addition, the Company has a $1.3 billion first lien revolving credit facility ("First Lien RCF"). At December 31, 2021, the Company had $330 million of letters of credit outstanding and no borrowings outstanding under the First Lien RCF. The Company has no material non-vehicle debt maturities until 2026.

EARNINGS WEBCAST INFORMATION

Hertz Global's live webcast and conference call to discuss its fourth quarter and full year 2021 results will be held on February 23, 2022, at 5:00 p.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 ask a question, the dial in number for the conference call is (800) 924-0350; access code 4089409. Investors are encouraged to dial-in approximately 10 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

The unaudited financial data of Hertz is set forth on pages 6-9 of this release. Also included are Supplemental Schedules, which are provided to present segment results, reconciliations of non-GAAP measures to their most comparable GAAP measures and other calculations.

In the second quarter of 2021, the Company revised its reportable segments to combine its Canada, Latin America and Caribbean operations with the U.S. and renamed its U.S. Rental Car segment Americas Rental Car ("Americas RAC"). As a result, those operations are no longer be reported in the International RAC segment. Additionally, in the second quarter of 2021, the Company added a financial statement line item for non-vehicle depreciation and amortization to better align with current industry practice. In the third quarter of 2021, the Company revised its calculation of Total RPD and Total RPU to include ancillary retail vehicle sales revenues to better align with current industry practice. For the revisions noted above, prior periods have been restated to conform with the revised presentation. Refer also to Supplemental Schedule VI.

Following the Supplemental Schedules, the Company provides definitions for terminology used throughout this earnings release and provides the usefulness of non-GAAP measures to investors and additional purposes for which management uses such measures.

Financial data included in this release is derived from our audited consolidated financial statements as of and for the year ended December 31, 2021, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC and on the Hertz website, IR.Hertz.com. The Company's historical results are not necessarily indicative of the results to be expected for any future period. Financial data included in this release is qualified by reference to and should be read in conjunction with the Company's audited consolidated financial statements and related notes thereto which are included in its Annual Report on Form 10-K for the year ended December 31, 2021.

ABOUT HERTZ

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained or incorporated by reference in this release, and in related comments by the Company's management, include "forward-looking statements." Forward-looking statements include information concerning the Company's liquidity and its possible or assumed future results of operations, including descriptions of its business strategies. These statements often include words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts," "guidance" or similar expressions. These statements are based on certain assumptions that the Company has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate in these circumstances. The Company believes these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and that the Company's actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent reports on Form 10-K, 10-Q and 8-K filed or furnished to the SEC.

Important factors that could affect the Company's actual results and cause them to differ materially from those expressed in forward-looking statements include, among other things:

  • the length and severity of COVID-19 and the impact on the Company's vehicle rental business as a result of travel restrictions and business closures or disruptions, as well as the impact on its employee retention and talent management strategies;

  • the Company's ability to purchase adequate supplies of competitively priced vehicles at a reasonable cost as a result of the continuing global semiconductor microchip manufacturing shortage (the "Chip Shortage") and other raw material supply constraints;

  • the impact on the value of the Company's non-program vehicles upon disposition when the Chip Shortage and other raw material supply constraints are alleviated;

  • the Company's ability to attract and retain key employees;

  • levels of travel demand, particularly business and leisure travel in the U.S. and in global markets;

  • significant changes in the competitive environment and the effect of competition in the Company's markets on rental volume and pricing;

  • occurrences that disrupt rental activity during the Company's peak periods;

  • the Company's ability to accurately estimate future levels of rental activity and adjust the number and mix of vehicles used in its rental operations accordingly;

  • the Company's ability to implement its business strategy, including its ability to implement plans to support a large scale electric vehicle fleet and to play a central role in the modern mobility ecosystem;

  • the Company's ability to adequately respond to changes in technology, customer demands and market competition;

  • the mix of program and non-program vehicles in the Company's fleet can lead to increased exposure to residual risk;

  • the Company's ability to dispose of vehicles in the used-vehicle market and use the proceeds of such sales to acquire new vehicles;

  • financial instability of the manufacturers of the Company's vehicles, which could impact its ability to fulfill obligations under repurchase or guaranteed depreciation programs;

  • an increase in the Company's vehicle costs or disruption to its rental activity due to safety recalls by the manufacturers of its vehicles;

  • the Company's access to third-party distribution channels and related prices, commission structures and transaction volumes;

  • the Company's ability to offer an excellent customer experience, retain and increase customer loyalty and market share;

  • the Company's ability to maintain its network of leases and vehicle rental concessions at airports in the U.S. and internationally;

  • the Company's ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;

  • a major disruption in the Company's communication or centralized information networks or a failure to maintain, upgrade and consolidate its information technology systems;

  • the Company's ability to prevent the misuse or theft of information it possess, including as a result of cyber security breaches and other security threats, as well as its ability to comply with privacy regulations;

  • risks associated with operating in many different countries, including the risk of a violation or alleged violation of applicable anti-corruption or anti-bribery laws and our ability to repatriate cash from non-U.S. affiliates without adverse tax consequences;

  • the Company's ability to utilize its net operating loss carryforwards;

  • risks relating to tax laws, including those that affect the Company's ability to deduct certain business interest expenses and offset previously-deferred tax gains, as well as any adverse determinations or rulings by tax authorities;

  • changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, including those related to accounting principles, that affect our operations, the Company's costs or applicable tax rates;

  • the recoverability of the Company's goodwill and indefinite-lived intangible assets when performing impairment analysis;

  • costs and risks associated with potential litigation and investigations, compliance with and changes in laws and regulations and potential exposures under environmental laws and regulations; and

  • the availability of additional or continued sources of financing for the Company's revenue earning vehicles and to refinance its existing indebtedness.

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

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

UNAUDITED FINANCIAL INFORMATION


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS



Three Months Ended
December 31,


Twelve Months Ended
December 31,

(In millions, except per share data)

2021


2020


2021


2020

Revenues

$ 1,949


$ 1,235


$ 7,336


$ 5,258

Expenses:








Direct vehicle and operating

1,065


799


3,920


3,423

Depreciation of revenue earning vehicles and lease charges

78


397


497


2,030

Depreciation and amortization of non-vehicle assets

43


57


196


225

Selling, general and administrative

188


139


688


645

Interest expense, net:








Vehicle

41


96


284


455

Non-vehicle

28


34


185


153

Total interest expense, net

69


130


469


608

Technology-related intangible and other asset impairments


20



213

Other (income) expense, net

(1)


6


(21)


(9)

Reorganization items, net


74


677


175

(Gain) from the sale of a business



(400)


Change in fair value of Public Warrants

643



627


Total expenses

2,085


1,622


6,653


7,310

Income (loss) before income taxes

(136)


(387)


683


(2,052)

Income tax (provision) benefit

(125)


97


(318)


329

Net income (loss)

(261)


(290)


365


(1,723)

Net (income) loss attributable to noncontrolling interests

1


1


1


9

Net income (loss) attributable to Hertz Global

(260)


(289)


366


(1,714)

Series A Preferred Stock deemed dividends

(450)



(450)


Net income (loss) available to Hertz Global common stockholders

$ (710)


$ (289)


$ (84)


$ (1,714)

Weighted average number of shares outstanding:








Basic

468


156


315


150

Diluted

468


156


315


150

Earnings (loss) per share:








Basic

$ (1.52)


$ (1.85)


$ (0.27)


$ (11.44)

Diluted

$ (1.52)


$ (1.85)


$ (0.27)


$ (11.44)

 

UNAUDITED CONSOLIDATED BALANCE SHEETS


(In millions, except par value and share data)

December 31,
2021


December 31,
2020

ASSETS




Cash and cash equivalents

$ 2,258


$ 1,096

Restricted cash and cash equivalents:




Vehicle

77


50

Non-vehicle

316


361

Total restricted cash and cash equivalents

393


411

Total cash, cash equivalents, restricted cash and restricted cash equivalents

2,651


1,507

Receivables:




Vehicle

62


164

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

696


613

Total receivables, net

758


777

Prepaid expenses and other assets

1,017


373

Revenue earning vehicles:




Vehicles

10,836


7,540

Less: accumulated depreciation

(1,610)


(1,478)

Total revenue earning vehicles, net

9,226


6,062

Property and equipment, net

608


666

Operating lease right-of-use assets

1,566


1,675

Intangible assets, net

2,912


2,992

Goodwill

1,045


1,045

Assets held for sale


1,811

Total assets

$ 19,783


$ 16,908

LIABILITIES AND STOCKHOLDERS' EQUITY




Accounts payable:




Vehicle

$ 56


$ 29

Non-vehicle

516


389

Total accounts payable

572


418

Accrued liabilities

863


759

Accrued taxes, net

157


121

Debt:




Vehicle

7,921


6,024

Non-vehicle

2,986


243

Total debt

10,907


6,267

Public Warrants

1,324


Operating lease liabilities

1,510


1,636

Self-insured liabilities

463


488

Deferred income taxes, net

1,010


730

Total liabilities not subject to compromise

16,806


10,419

Liabilities subject to compromise


4,965

Liabilities held for sale


1,431

Total liabilities

16,806


16,815

Commitments and contingencies




Stockholders' equity:




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


Common stock, $0.01 par value, 477,233,278 and 158,235,410 shares issued, respectively, and 449,782,424 and 156,206,478 shares outstanding, respectively

5


2

Treasury stock, at cost, 27,450,854 and 2,028,932 common shares, respectively

(708)


(100)

Additional paid-in capital

6,209


3,047

Retained earnings (Accumulated deficit)

(2,315)


(2,681)

Accumulated other comprehensive income (loss)

(214)


(212)

Stockholders' equity attributable to Hertz Global

2,977


56

Noncontrolling interests


37

Total stockholders' equity

2,977


93

Total liabilities and stockholders' equity

$ 19,783


$ 16,908

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS



Three Months Ended
December 31,


Twelve Months Ended
December 31,

(In millions)

2021


2020


2021


2020

Cash flows from operating activities:








Net income (loss)

$ (261)


$ (290)


$ 365


$ (1,723)

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








Depreciation and reserves for revenue earning vehicles

94


450


600


2,259

Depreciation and amortization, non-vehicle

43


57


196


225

Amortization of deferred financing costs and debt discount (premium)

13


22


122


59

Loss on extinguishment of debt



8


5

Stock-based compensation charges

7


1


10


(2)

Provision for receivables allowance

30


28


125


94

Deferred income taxes, net

145


(110)


270


(353)

Technology-related intangible and other asset impairments


20



213

Reorganization items, net


7


314


8

(Gain) loss from the sale of a business



(400)


(Gain) loss on marketable securities




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



(8)


(24)

Change in fair value of Public Warrants

643



627


Other

3


5


(5)


5

Changes in assets and liabilities:








Non-vehicle receivables

13


(36)


(210)


195

Prepaid expenses and other assets

33


59


(20)


92

Operating lease right-of-use assets

71


89


274


366

Non-vehicle accounts payable

(25)


(126)


(70)


98

Accrued liabilities

(65)


(14)


(108)


(61)

Accrued taxes, net

(65)


(48)


24


(52)

Operating lease liabilities

(77)


(88)


(291)


(375)

Self-insured liabilities

(4)


(1)


(17)


(76)

Net cash provided by (used in) operating activities

598


25


1,806


953

Cash flows from investing activities:








Revenue earning vehicles expenditures

(1,958)


(354)


(7,154)


(5,542)

Proceeds from disposal of revenue earning vehicles

873


1,328


2,818


10,098

Non-vehicle capital asset expenditures

(30)


(9)


(71)


(98)

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

(1)


4


16


60

Sales of marketable securities




74

Collateral payments



(303)


Collateral returned in exchange for letters of credit

12



280


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



871


Other



(1)


(1)

Net cash provided by (used in) investing activities

(1,104)


969


(3,544)


4,591

Cash flows from financing activities:








Proceeds from issuance of vehicle debt

3,861


320


14,323

4,546

Repayments of vehicle debt

(3,144)

(1,820)

(12,607)

(10,751)

Proceeds from issuance of non-vehicle debt

1,505

259

4,644

1,812

Repayments of non-vehicle debt

(6)

(1)

(6,352)

(855)

Payment of financing costs

(31)

(64)

(185)

(75)

Proceeds from Plan Sponsors

2,781

Early redemption premium payment

(85)

Proceeds from issuance of stock, net

28

Proceeds from exercises of Public Warrants

77