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HERTZ REPORTS FIRST QUARTER REVENUE OF $1.8 BILLION, NET INCOME OF $426 MILLION AND ADJUSTED CORPORATE EBITDA OF $614 MILLION

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"Hertz produced a very strong first quarter," said Stephen Scherr, Hertz chief executive officer. "Our team delivered on behalf of customers amidst strong demand, reflecting a sharp rebound in travel. We experienced high volumes and sustained pricing, particularly in the back half of the quarter following Omicron. We also maintained cost discipline and began to see the benefits of several new partnerships. I am equally pleased with our momentum on customer experience – especially as we move into the peak summer travel season and as we play a more central role in mobility over the longer term."

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

The Hertz Corporation. (PRNewsfoto/Hertz)
The Hertz Corporation. (PRNewsfoto/Hertz)

HIGHLIGHTS

  • Total revenues of $1.8 billion

  • GAAP net income of $426 million, or $0.82 per diluted share

  • Adjusted Net Income of $403 million, or $0.87 per adjusted diluted share (reflects adjustments for fair value remeasurements to outstanding public warrants and certain derivative contracts, among other items)

  • Adjusted Corporate EBITDA of $614 million

  • Adjusted Corporate EBITDA Margin of 34%

  • Operating cash flow of $621 million and adjusted operating cash flow of $677 million

  • Corporate liquidity of $2.7 billion at March 31st, including $1.5 billion in unrestricted cash

  • Company repurchased 38 million common shares from January 1, 2022 through April 21, 2022

For the first quarter 2022, the Company generated total revenues of $1.8 billion, which were 57% higher than the first quarter 2021, excluding Donlen. Monthly revenue per unit rose 26%, due to structural improvements and a continued recovery in travel demand. These trends, along with strong cost performance, drove $0.87 of adjusted earnings per share and $614 million of Adjusted Corporate EBITDA.

SUMMARY RESULTS


Three Months Ended

March 31,


Percent
Inc/(Dec)

2022 vs 2021

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

2022


2021


Hertz Global - Consolidated






Total revenues

$ 1,810


$ 1,289


40%

Adjusted net income (loss)(a)

$ 403


$ (52)


NM

Adjusted diluted earnings (loss) per share(a)

$ 0.87


$ (0.33)


NM

Adjusted Corporate EBITDA(a)

$ 614


$ 2


NM

Adjusted Corporate EBITDA Margin(a)

34%


—%









Average Vehicles (in whole units)

481,211


367,600


31%

Average Rentable Vehicles (in whole units)

455,517


361,561


26%

Vehicle Utilization

75%


76%



Transaction Days (in thousands)

30,621


24,648


24%

Total RPD (in dollars)(b)

$ 59.17


$ 46.36


28%

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

$ 1,326


$ 1,053


26%

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

$ (40)


$ 219


NM







Americas RAC Segment






Total revenues

$ 1,558


$ 967


61%

Adjusted EBITDA

$ 641


$ 26


NM

Adjusted EBITDA Margin

41%


3%









Average Vehicles (in whole units)

397,620


300,606


32%

Average Rentable Vehicles (in whole units)

373,153


296,412


26%

Vehicle Utilization

76%


76%



Transaction Days (in thousands)

25,579


20,251


26%

Total RPD (in dollars)(b)

$ 60.90


$ 47.75


28%

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

$ 1,391


$ 1,087


28%

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

$ (78)


$ 233


NM







International RAC Segment






Total revenues

$ 252


$ 186


36%

Adjusted EBITDA

$ 27


$ (8)


NM

Adjusted EBITDA Margin

11%


(4)%









Average Vehicles (in whole units)

83,591


66,995


25%

Average Rentable Vehicles (in whole units)

82,364


65,149


26%

Vehicle Utilization

68 %


75 %



Transaction Days (in thousands)

5,042


4,397


15%

Total RPD (in dollars)(b)

$ 50.43


$ 39.92


26%

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

$ 1,029


$ 898


15%

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

$ 138


$ 156


(11)%


NM - Not meaningful

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

(a)

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

(b)

Based on December 31, 2021 foreign exchange rates.

LIQUIDITY AND CAPITAL RESOURCES

During the first quarter 2022, the Company repurchased 35 million shares of its common stock for an aggregate price of $722 million. Between April 1, 2022 and April 21, 2022, the Company repurchased 3 million shares of Hertz Global's common stock for an aggregate purchase price of $70 million. As of April 21, 2022, $800 million remains available for share repurchases under the Board-approved plan.

During the first quarter 2022, the Company issued multiple series of medium-term fixed rate rental car asset backed notes for $2.5 billion. The net proceeds from the issuances were used to repay amounts outstanding on certain of the Company's variable rate rental car asset backed notes and for the future acquisition or refinancing of vehicles. Also, the Series 2021-A variable funding notes were amended to increase the maximum principal amount to $3.2 billion.

During the first quarter 2022, the Company amended its First Lien RCF to increase commitments from $1.3 billion to $1.5 billion, increase the sublimit for letters of credit from $1.1 billion to $1.4 billion and to revise the interest benchmark from a USD London Inter-Bank Offered Rate to a Secured Overnight Funding Rate.

The Company's liquidity position was $2.7 billion at March 31, 2022, of which $1.5 billion was unrestricted cash.

EARNINGS WEBCAST INFORMATION

Hertz Global's live webcast and conference call to discuss its first quarter 2022 results will be held on April 27, 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 7595076. 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

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

In the first quarter of 2022, the Company began using Average Rentable Vehicles when calculating Available Car Days, Total RPU and Utilization instead of Average Vehicles. Average Rentable Vehicles excludes vehicles for sale on the Company's retail lots or actively in the process of being sold through other disposition channels. Prior periods have been restated to conform with the revisions, as appropriate.

ABOUT HERTZ

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

  • the impact of macroeconomic conditions resulting in inflationary cost pressures resulting in labor and supply chain constraints and increased vehicle acquisition costs, among others;

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

  • the impact of the conflict between Russia and Ukraine on supply chains and raw materials for the automotive industry and uncertainty on overall consumer sentiment and travel demand, especially in Europe;

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

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

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

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

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

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

  • the Company's ability to implement 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;

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

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

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

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

  • risks relating to tax laws, 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 the Company's operations, its costs or applicable tax rates;

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

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

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

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

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

UNAUDITED FINANCIAL INFORMATION


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS



Three Months Ended

March 31,

(In millions, except per share data)

2022


2021

Revenues

$ 1,810


$ 1,289

Expenses:




Direct vehicle and operating

1,053


778

Depreciation of revenue earning vehicles and lease charges, net

(59)


243

Depreciation and amortization of non-vehicle assets

33


54

Selling, general and administrative

235


151

Interest expense, net:




Vehicle

5


104

Non-vehicle

39


44

Total interest expense, net

44


148

Other (income) expense, net

(2)


(3)

Reorganization items, net


42

(Gain) from the sale of a business


(392)

Change in fair value of Public Warrants

(50)


Total expenses

1,254


1,021

Income (loss) before income taxes

556


268

Income tax (provision) benefit

(130)


(79)

Net income (loss)

426


189

Net (income) loss attributable to noncontrolling interests


1

Net income (loss) attributable to Hertz Global

$ 426


$ 190

Weighted average number of shares outstanding:




Basic

432


156

Diluted

461


157

Earnings (loss) per share:




Basic

$ 0.99


$ 1.22

Diluted

$ 0.82


$ 1.21

 

UNAUDITED CONSOLIDATED BALANCE SHEETS


(In millions, except par value and share data)

March 31, 2022


December 31,
2021

ASSETS




Cash and cash equivalents

$ 1,521


$ 2,258

Restricted cash and cash equivalents:




Vehicle

301


77

Non-vehicle

300


316

Total restricted cash and cash equivalents

601


393

Total cash and cash equivalents and restricted cash and cash equivalents

2,122


2,651

Receivables:




Vehicle

93


62

Non-vehicle, net of allowance of $45 and $48, respectively

707


696

Total receivables, net

800


758

Prepaid expenses and other assets

1,331


1,017

Revenue earning vehicles:




Vehicles

12,118


10,836

Less: accumulated depreciation

(1,554)


(1,610)

Total revenue earning vehicles, net

10,564


9,226

Property and equipment, net

611


608

Operating lease right-of-use assets

1,566


1,566

Intangible assets, net

2,903


2,912

Goodwill

1,044


1,045

Total assets

$ 20,941


$ 19,783

LIABILITIES AND STOCKHOLDERS' EQUITY




Accounts payable:




Vehicle

$ 109


$ 56

Non-vehicle

566


516

Total accounts payable

675


572

Accrued liabilities

939


863

Accrued taxes, net

188


157

Debt:




Vehicle

9,098


7,921

Non-vehicle

2,984


2,986

Total debt

12,082


10,907

Public Warrants

1,272


1,324

Operating lease liabilities

1,502


1,510

Self-insured liabilities

468


463

Deferred income taxes, net

1,113


1,010

Total liabilities

18,239


16,806

Commitments and contingencies




Stockholders' equity:




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


Common stock, $0.01 par value, 477,673,065 and 477,233,278 shares issued, respectively, and
415,256,346 and 449,782,424 shares outstanding, respectively

5


5

Treasury stock, at cost, 62,416,719 and 27,450,854 common shares, respectively

(1,430)


(708)

Additional paid-in capital

6,237


6,209

Retained earnings (Accumulated deficit)

(1,889)


(2,315)

Accumulated other comprehensive income (loss)

(221)


(214)

Total stockholders' equity

2,702


2,977

Total liabilities and stockholders' equity

$ 20,941


$ 19,783

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS



Three Months Ended

March 31,

(In millions)

2022


2021

Cash flows from operating activities:




Net income (loss)

$ 426


$ 189

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




Depreciation and reserves for revenue earning vehicles

(20)


275

Depreciation and amortization, non-vehicle

33


54

Amortization of deferred financing costs and debt discount (premium)

11


34

Stock-based compensation charges

28


2

Provision for receivables allowance

13


29

Deferred income taxes, net

103


62

Reorganization items, net