[x] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 73-1356520 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
Page |
PART I - FINANCIAL INFORMATION |
PART II - OTHER INFORMATION |
● | constraints on our growth and profitability given the challenges we face in increasing our market share in the key airport and local markets we serve, high barriers to entry in the insurance replacement market, capital and other constraints on expanding company-owned stores internationally and the challenges we would face in further reducing our expenses; |
● | the impact of the continuing challenging global economic environment, the ongoing Eurozone sovereign debt issues and governmental actions to address budget deficits through austerity and other measures, which are fueling concerns about global economic prospects and could materially adversely affect unemployment rates and consumer discretionary spending, including for international inbound travel to the United States and for leisure travel more generally, on which we are substantially dependent; |
● | the continuing significant political unrest and other concerns involving certain oil-producing countries, which has contributed to price volatility for petroleum products, and in recent periods higher average gasoline prices, which could affect both broader economic conditions and consumer spending levels; |
● | the impact of pricing and other actions by competitors; |
● | our ability to manage our fleet mix to match demand and meet our target for vehicle depreciation costs, particularly in light of the significant level of risk vehicles (i.e., those vehicles not acquired through a guaranteed residual value program) in our fleet and our exposure to wholesale used vehicle prices; |
● | the cost and other terms of acquiring and disposing of automobiles and the impact of conditions in the used vehicle market on our vehicle cost, including the impact on vehicle depreciation costs in 2012 based on pricing volatility in the used vehicle market; |
● | our ability to reduce our fleet capacity as and when projected by our plans; |
● | the continuing strength of the U.S. automotive industry on which we depend for vehicle supply; |
● | airline travel patterns, including disruptions or reductions in air travel resulting from capacity reductions, pricing actions, severe weather conditions, industry consolidation or other events, particularly given our dependence on leisure travel; |
● | access to reservation distribution channels, particularly as the role of the Internet and mobile applications increases in the marketing and sale of travel-related services; |
● | the effectiveness of actions we take to maintain a low cost structure and to manage liquidity; |
● | the impact of repurchases of our common stock pursuant to our share repurchase program; |
● | our ability to obtain cost-effective financing as needed without unduly restricting our operational flexibility; |
● | our ability to comply with financial covenants, and the impact of those covenants on our operating and financial flexibility; |
● | whether our preliminary expectations about our federal income tax position are affected by changes in our expected fleet size or operations or further legislative initiatives relating to taxes in the United States or elsewhere; |
● | our ability to continue to defer the reversal of prior period tax deferrals and the availability of accelerated depreciation payments in future periods, the lack of either of which could result in material cash federal income tax payments in future periods; |
● | the cost of regulatory compliance, costs and other effects of potential future initiatives, including those directed at climate change and its effects, and the costs and outcome of pending litigation; |
● | disruptions in the operation or development of information and communication systems that we rely on, including those relating to methods of payment; |
● | local market conditions where we and our franchisees do business, including whether franchisees will continue to have access to capital as needed; and |
● | the impact of other events that can disrupt consumer travel, such as natural and man-made catastrophes, pandemics, social unrest and actual and perceived threats or acts of terrorism. |
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES | DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES | |||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||||||||||
THREE MONTHS ENDED MARCH 31, 2012 AND 2011 | ||||||||||||||||||||||||
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011 | THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011 | |||||||||||||||||||||||
(In Thousands Except Per Share Data) | (In Thousands Except Per Share Data) | |||||||||||||||||||||||
Three Months | Three Months | Six Months | ||||||||||||||||||||||
Ended March 31, | Ended June 30, | Ended June 30, | ||||||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||
Vehicle rentals | $ | 339,089 | $ | 332,272 | $ | 378,897 | $ | 378,191 | $ | 717,986 | $ | 710,463 | ||||||||||||
Other | 17,185 | 16,075 | 16,489 | 16,938 | 33,674 | 33,013 | ||||||||||||||||||
Total revenues | 356,274 | 348,347 | 395,386 | 395,129 | 751,660 | 743,476 | ||||||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||
Direct vehicle and operating | 184,212 | 178,305 | 196,461 | 190,958 | 380,673 | 369,263 | ||||||||||||||||||
Vehicle depreciation and lease charges, net | 41,731 | 74,174 | 57,506 | 66,510 | 99,237 | 140,684 | ||||||||||||||||||
Selling, general and administrative | 45,548 | 48,947 | 47,477 | 48,843 | 93,025 | 97,790 | ||||||||||||||||||
Interest expense, net of interest income of $493 and $465, respectively | 17,068 | 20,977 | ||||||||||||||||||||||
Interest expense, net of interest income of | ||||||||||||||||||||||||
$471, $282, $964 and $747, respectively | 15,327 | 18,295 | 32,395 | 39,272 | ||||||||||||||||||||
Total costs and expenses | 288,559 | 322,403 | 316,771 | 324,606 | 605,330 | 647,009 | ||||||||||||||||||
(Increase) decrease in fair value of derivatives | 276 | (3,474 | ) | 209 | (416 | ) | 485 | (3,890 | ) | |||||||||||||||
INCOME BEFORE INCOME TAXES | 67,439 | 29,418 | 78,406 | 70,939 | 145,845 | 100,357 | ||||||||||||||||||
INCOME TAX EXPENSE | 27,068 | 12,895 | 28,979 | 28,434 | 56,047 | 41,329 | ||||||||||||||||||
NET INCOME | $ | 40,371 | $ | 16,523 | $ | 49,427 | $ | 42,505 | $ | 89,798 | $ | 59,028 | ||||||||||||
BASIC EARNINGS PER SHARE | $ | 1.40 | $ | 0.57 | $ | 1.77 | $ | 1.47 | $ | 3.16 | $ | 2.05 | ||||||||||||
DILUTED EARNINGS PER SHARE | $ | 1.35 | $ | 0.53 | $ | 1.69 | $ | 1.36 | $ | 3.03 | $ | 1.89 | ||||||||||||
COMPREHENSIVE INCOME | $ | 49,322 | $ | 21,062 | $ | 49,288 | $ | 45,826 | $ | 98,610 | $ | 66,888 | ||||||||||||
See notes to condensed consolidated financial statements. | See notes to condensed consolidated financial statements. |
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES | DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES | |||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||
MARCH 31, 2012 AND DECEMBER 31, 2011 | ||||||||||||||||
JUNE 30, 2012 AND DECEMBER 31, 2011 | JUNE 30, 2012 AND DECEMBER 31, 2011 | |||||||||||||||
(In Thousands Except Share and Per Share Data) | (In Thousands Except Share and Per Share Data) | |||||||||||||||
March 31, | December 31, | June 30, | December 31, | |||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
ASSETS | (Unaudited) | (Unaudited) | ||||||||||||||
Cash and cash equivalents | $ | 491,820 | $ | 508,648 | $ | 285,477 | $ | 508,648 | ||||||||
Restricted cash and investments | 213,521 | 353,265 | 199,002 | 353,265 | ||||||||||||
Receivables, net | 93,248 | 95,360 | 107,298 | 95,360 | ||||||||||||
Prepaid expenses and other assets | 74,927 | 65,959 | 77,020 | 65,959 | ||||||||||||
Revenue-earning vehicles, net | 1,756,009 | 1,467,835 | 2,107,982 | 1,467,835 | ||||||||||||
Property and equipment, net | 80,792 | 84,278 | 79,571 | 84,278 | ||||||||||||
Income taxes receivable | - | 18,786 | 3,998 | 18,786 | ||||||||||||
Software, net | 20,527 | 21,535 | 19,888 | 21,535 | ||||||||||||
Total assets | $ | 2,730,844 | $ | 2,615,666 | $ | 2,880,236 | $ | 2,615,666 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
LIABILITIES: | ||||||||||||||||
Accounts payable | $ | 49,887 | $ | 54,377 | $ | 61,260 | $ | 54,377 | ||||||||
Accrued liabilities | 112,511 | 124,185 | 123,920 | 124,185 | ||||||||||||
Income taxes payable | 3,107 | - | ||||||||||||||
Deferred income tax liability | 354,782 | 342,962 | 369,582 | 342,962 | ||||||||||||
Vehicle insurance reserves | 81,906 | 86,515 | 80,317 | 86,515 | ||||||||||||
Debt and other obligations | 1,473,431 | 1,399,955 | 1,562,142 | 1,399,955 | ||||||||||||
Total liabilities | 2,075,624 | 2,007,994 | 2,197,221 | 2,007,994 | ||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||
STOCKHOLDERS' EQUITY: | ||||||||||||||||
Preferred stock, $.01 par value: | - | - | ||||||||||||||
Authorized 10,000,000 shares; none outstanding | - | - | ||||||||||||||
Common stock, $.01 par value: | ||||||||||||||||
Authorized 50,000,000 shares; | ||||||||||||||||
36,134,902 and 36,048,606 issued, respectively, and | ||||||||||||||||
28,127,790 and 29,556,887 outstanding, respectively | 361 | 361 | ||||||||||||||
Authorized 200,000,000 and 50,000,000 shares, respectively; | ||||||||||||||||
36,194,393 and 36,048,606 issued, respectively, and | ||||||||||||||||
27,889,437 and 29,556,887 outstanding, respectively | 362 | 361 | ||||||||||||||
Additional capital | 952,089 | 848,843 | 954,082 | 848,843 | ||||||||||||
Retained earnings (deficit) | 37,952 | (2,419 | ) | 87,379 | (2,419 | ) | ||||||||||
Accumulated other comprehensive income (loss) | 1,334 | (7,617 | ) | 1,195 | (7,617 | ) | ||||||||||
Treasury stock, at cost (8,007,112 and 6,491,719 shares, respectively) | (336,516 | ) | (231,496 | ) | ||||||||||||
Treasury stock, at cost (8,304,956 and 6,491,719 shares, respectively) | (360,003 | ) | (231,496 | ) | ||||||||||||
Total stockholders' equity | 655,220 | 607,672 | 683,015 | 607,672 | ||||||||||||
Total liabilities and stockholders' equity | $ | 2,730,844 | $ | 2,615,666 | $ | 2,880,236 | $ | 2,615,666 | ||||||||
See notes to condensed consolidated financial statements. |
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES | DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
THREE MONTHS ENDED MARCH 31, 2012 AND 2011 | ||||||||||||||||
SIX MONTHS ENDED JUNE 30, 2012 AND 2011 | SIX MONTHS ENDED JUNE 30, 2012 AND 2011 | |||||||||||||||
(In Thousands) | (In Thousands) | |||||||||||||||
Three Months | Six Months | |||||||||||||||
Ended March 31, | Ended June 30, | |||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income | $ | 40,371 | $ | 16,523 | $ | 89,798 | $ | 59,028 | ||||||||
Adjustments to reconcile net income to | ||||||||||||||||
net cash provided by operating activities: | ||||||||||||||||
Depreciation: | ||||||||||||||||
Vehicle depreciation | 55,991 | 82,093 | 136,068 | 166,427 | ||||||||||||
Non-vehicle depreciation | 4,536 | 4,840 | 8,857 | 9,773 | ||||||||||||
Net gains from disposition of revenue-earning vehicles | (14,260 | ) | (7,928 | ) | (36,831 | ) | (25,761 | ) | ||||||||
Amortization | 1,775 | 1,866 | 3,601 | 3,807 | ||||||||||||
Performance share incentive, stock option and restricted stock plans | 1,625 | 1,209 | 3,416 | 2,137 | ||||||||||||
Interest income earned on restricted cash and investments | (238 | ) | (113 | ) | (398 | ) | (160 | ) | ||||||||
Recovery of losses on receivables | (319 | ) | (655 | ) | ||||||||||||
Deferred income taxes | 13,203 | 10,557 | 26,725 | 15,083 | ||||||||||||
Swap termination reclassification | 4,878 | - | 8,131 | - | ||||||||||||
Change in fair value of derivatives | 276 | (3,474 | ) | 485 | (3,890 | ) | ||||||||||
Change in assets and liabilities: | ||||||||||||||||
Income taxes payable/receivable | 21,893 | 51,372 | 14,788 | 70,810 | ||||||||||||
Receivables | 2,686 | 2,083 | (11,259 | ) | (2,636 | ) | ||||||||||
Prepaid expenses and other assets | (1,427 | ) | (3,814 | ) | (3,027 | ) | (3,984 | ) | ||||||||
Accounts payable | (1,475 | ) | (14,442 | ) | 1,053 | 6,203 | ||||||||||
Accrued liabilities | (10,699 | ) | (10,083 | ) | 710 | (8,540 | ) | |||||||||
Vehicle insurance reserves | (4,609 | ) | 2,969 | (6,198 | ) | (1,859 | ) | |||||||||
Other | 1,223 | 1,287 | (876 | ) | 997 | |||||||||||
Net cash provided by operating activities | 115,430 | 134,290 | 235,043 | 287,435 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Revenue-earning vehicles - Purchases | (583,615 | ) | (561,259 | ) | (1,254,875 | ) | (861,596 | ) | ||||||||
Revenue-earning vehicles - Proceeds from sales | 251,690 | 117,428 | 522,557 | 250,430 | ||||||||||||
Change in cash and cash equivalents - required minimum balance | - | 100,000 | - | 100,000 | ||||||||||||
Net change in restricted cash and investments | 139,982 | 117,575 | 154,661 | 151,207 | ||||||||||||
Property, equipment and software - Purchases | (5,065 | ) | (3,272 | ) | (10,013 | ) | (7,891 | ) | ||||||||
Property, equipment and software - Proceeds from sales | 3,486 | 6 | 3,486 | 21 | ||||||||||||
Net cash used in investing activities | (193,522 | ) | (229,522 | ) | (584,184 | ) | (367,829 | ) | ||||||||
(Continued) | (Continued) | |||||||||||||||
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES | DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES | DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||
THREE MONTHS ENDED MARCH 31, 2012 AND 2011 | ||||||||||||||||||||
SIX MONTHS ENDED JUNE 30, 2012 AND 2011 | SIX MONTHS ENDED JUNE 30, 2012 AND 2011 | |||||||||||||||||||
(In Thousands) | (In Thousands) | (In Thousands) | ||||||||||||||||||
Three Months | Six Months | |||||||||||||||||||
Ended March 31, | Ended June 30, | |||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | CASH FLOWS FROM FINANCING ACTIVITIES: | CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||
Debt and other obligations: | Debt and other obligations: | Debt and other obligations: | ||||||||||||||||||
Proceeds from vehicle debt and other obligations | Proceeds from vehicle debt and other obligations | 240,138 | 456,572 | Proceeds from vehicle debt and other obligations | 578,845 | 637,955 | ||||||||||||||
Payments of vehicle debt and other obligations | Payments of vehicle debt and other obligations | (166,666 | ) | (300,000 | ) | Payments of vehicle debt and other obligations | (416,665 | ) | (557,073 | ) | ||||||||||
Payments of non-vehicle debt | Payments of non-vehicle debt | - | (2,500 | ) | Payments of non-vehicle debt | - | (5,000 | ) | ||||||||||||
Issuance of common shares | Issuance of common shares | 646 | 1,362 | Issuance of common shares | 849 | 2,880 | ||||||||||||||
Net settlement of employee withholding taxes on share-based awards | Net settlement of employee withholding taxes on share-based awards | - | (2,747 | ) | Net settlement of employee withholding taxes on share-based awards | (1,164 | ) | (3,205 | ) | |||||||||||
Purchase of common stock for the treasury | Purchase of common stock for the treasury | (5,020 | ) | - | Purchase of common stock for the treasury | (27,343 | ) | - | ||||||||||||
Financing issue costs | Financing issue costs | (7,834 | ) | (2,060 | ) | Financing issue costs | (8,552 | ) | (2,243 | ) | ||||||||||
Net cash provided by financing activities | Net cash provided by financing activities | 61,264 | 150,627 | Net cash provided by financing activities | 125,970 | 73,314 | ||||||||||||||
CHANGE IN CASH AND CASH EQUIVALENTS | CHANGE IN CASH AND CASH EQUIVALENTS | (16,828 | ) | 55,395 | CHANGE IN CASH AND CASH EQUIVALENTS | (223,171 | ) | (7,080 | ) | |||||||||||
CASH AND CASH EQUIVALENTS: | CASH AND CASH EQUIVALENTS: | CASH AND CASH EQUIVALENTS: | ||||||||||||||||||
Beginning of period | Beginning of period | 508,648 | 463,153 | Beginning of period | 508,648 | 463,153 | ||||||||||||||
End of period | End of period | $ | 491,820 | $ | 518,548 | End of period | $ | 285,477 | $ | 456,073 | ||||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||||||||||||
Cash paid for (refund of): | Cash paid for (refund of): | |||||||||||||||||||
Income taxes from taxing authorities | $ | (8,053 | ) | $ | (49,055 | ) | Income taxes | $ | 14,478 | $ | (44,625 | ) | ||||||||
Interest | $ | 14,517 | $ | 17,870 | Interest | $ | 27,573 | $ | 34,123 | |||||||||||
SUPPLEMENTAL DISCLOSURES OF INVESTING AND FINANCING NONCASH ACTIVITIES: | ||||||||||||||||||||
SUPPLEMENTAL DISCLOSURES OF INVESTING AND FINANCING | SUPPLEMENTAL DISCLOSURES OF INVESTING AND FINANCING | |||||||||||||||||||
NONCASH ACTIVITIES: | ||||||||||||||||||||
Sales and incentives related to revenue-earning vehicles included in receivables | $ | 23,867 | $ | 36,405 | Sales and incentives related to revenue-earning vehicles included in receivables | $ | 24,271 | $ | 25,689 | |||||||||||
Purchases of revenue-earning vehicles included in accounts payable | $ | 4,021 | $ | 2,937 | Purchases of revenue-earning vehicles included in accounts payable | $ | 13,512 | $ | 9,519 | |||||||||||
Purchases of property, equipement and software included in accounts payable | $ | 1,059 | $ | 560 | Purchases of property, equipement and software included in accounts payable | $ | 413 | $ | 177 | |||||||||||
Certain reclassifications have been made to the 2011 financial information to conform to the classification used in 2012. | Certain reclassifications have been made to the 2011 financial information to conform to the classification used in 2012. | Certain reclassifications have been made to the 2011 financial information to conform to the classification used in 2012. | ||||||||||||||||||
See notes to condensed consolidated financial statements. | See notes to condensed consolidated financial statements. | See notes to condensed consolidated financial statements. |
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES | ||||||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||||||||||
(Unaudited) |
1. | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES |
The accompanying condensed consolidated financial statements include the accounts of Dollar Thrifty Automotive Group, Inc. (“DTG”) and its subsidiaries. DTG’s significant wholly owned subsidiaries include DTG Operations, Inc., Thrifty, Inc., Dollar Rent A Car, Inc. and Rental Car Finance Corp. (“RCFC”). Thrifty, Inc. is the parent company of Thrifty Rent-A-Car System, Inc., which is the parent company of Dollar Thrifty Automotive Group Canada Inc. (“DTG Canada”). The term the “Company” is used to refer to DTG |
The accounting policies set forth in Item 8 - Note 1 of notes to the consolidated financial statements contained in DTG’s Annual Report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2012, have been followed in preparing the accompanying condensed consolidated financial statements. |
The condensed consolidated financial statements and notes thereto for interim periods included herein have not been audited by an independent registered public accounting firm. The condensed consolidated financial statements and notes thereto have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by |
2. | CASH AND INVESTMENTS |
3. | SHARE-BASED PAYMENT PLANS |
Weighted- | ||||||||||||||||
Weighted- | Average | Aggregate | ||||||||||||||
Number of | Average | Remaining | Intrinsic | |||||||||||||
Shares | Exercise | Contractual | Value | |||||||||||||
(In Thousands) | Price | Term | (In Thousands) | |||||||||||||
Outstanding at January 1, 2012 | 1,575 | $ | 5.11 | 6.89 | $ | 102,579 | ||||||||||
Granted | - | - | ||||||||||||||
Exercised | (83 | ) | 7.83 | |||||||||||||
Canceled (Forfeited/Expired) | - | - | ||||||||||||||
Outstanding at March 31, 2012 | 1,492 | $ | 4.96 | 6.17 | $ | 113,314 | ||||||||||
Fully vested and exercisable options at: | ||||||||||||||||
March 31, 2012 | 834 | $ | 5.22 | 6.22 | $ | 63,126 | ||||||||||
Options expected to vest in the future at: | ||||||||||||||||
March 31, 2012 | 658 | $ | 4.63 | 6.09 | $ | 50,188 |
Weighted- | ||||||||||||||||
Weighted- | Average | Aggregate | ||||||||||||||
Number of | Average | Remaining | Intrinsic | |||||||||||||
Shares | Exercise | Contractual | Value | |||||||||||||
(In Thousands) | Price | Term | (In Thousands) | |||||||||||||
Outstanding at January 1, 2012 | 1,575 | $ | 5.11 | 6.89 | $ | 102,579 | ||||||||||
Granted | - | - | ||||||||||||||
Exercised | (107 | ) | 7.93 | |||||||||||||
Canceled (Forfeited/Expired) | - | - | ||||||||||||||
Outstanding at June 30, 2012 | 1,468 | $ | 4.91 | 5.92 | $ | 111,608 | ||||||||||
Fully vested and exercisable options at: | ||||||||||||||||
June 30, 2012 | 1,468 | $ | 4.91 | 5.92 | $ | 111,608 |
Weighted-Average | Weighted-Average | |||||||||||||||
Shares | Grant-Date | Shares | Grant-Date | |||||||||||||
Nonvested Shares | (In Thousands) | Fair Value | (In Thousands) | Fair Value | ||||||||||||
Nonvested at January 1, 2012 | 262 | $ | 59.11 | 262 | $ | 59.11 | ||||||||||
Granted | 29 | 76.17 | 29 | 76.17 | ||||||||||||
Vested | - | - | (2 | ) | 52.11 | |||||||||||
Forfeited | - | - | (7 | ) | 59.79 | |||||||||||
Nonvested at March 31, 2012 | 291 | $ | 60.82 | |||||||||||||
Nonvested at June 30, 2012 | 282 | $ | 60.89 | |||||||||||||
Weighted-Average | Weighted-Average | |||||||||||||||
Shares | Grant-Date | Shares | Grant-Date | |||||||||||||
Nonvested Shares | (In Thousands) | Fair Value | (In Thousands) | Fair Value | ||||||||||||
Nonvested at January 1, 2012 | 34 | $ | 5.41 | 34 | $ | 5.41 | ||||||||||
Granted | 7 | 73.42 | 7 | 73.42 | ||||||||||||
Vested | - | - | (34 | ) | 5.41 | |||||||||||
Forfeited | - | - | - | - | ||||||||||||
Nonvested at March 31, 2012 | 41 | $ | 16.94 | |||||||||||||
Nonvested at June 30, 2012 | 7 | $ | 73.42 | |||||||||||||
4. | VEHICLE DEPRECIATION AND LEASE CHARGES, NET |
Three Months | ||||||||
Ended March 31, | ||||||||
2012 | 2011 | |||||||
Depreciation of revenue-earning vehicles and other | $ | 55,991 | $ | 82,102 | ||||
Net gains from disposal of revenue-earning vehicles | (14,260 | ) | (7,928 | ) | ||||
$ | 41,731 | $ | 74,174 |
Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Depreciation of revenue-earning vehicles and other | $ | 80,077 | $ | 84,343 | $ | 136,068 | $ | 166,445 | ||||||||
Net gains from disposal of revenue-earning vehicles | (22,571 | ) | (17,833 | ) | (36,831 | ) | (25,761 | ) | ||||||||
$ | 57,506 | $ | 66,510 | $ | 99,237 | $ | 140,684 |
Three Months | ||||||||
Ended March 31, | ||||||||
2012 | 2011 | |||||||
Number of Non-Program Vehicles sold | 14,356 | 6,918 | ||||||
Average gain on vehicles sold (per vehicle) | $ | 993 | $ | 1,146 |
Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Number of Non-Program Vehicles sold | 18,711 | 8,428 | 33,067 | 15,346 | ||||||||||||
Average gain on vehicles sold (per vehicle) | $ | 1,206 | $ | 2,116 | $ | 1,114 | $ | 1,679 |
Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Average depreciable fleet (units) | 118,485 | 117,876 | 110,536 | 108,299 | ||||||||||||
Average depreciation rate | $ | 225 | $ | 238 | $ | 205 | $ | 256 | ||||||||
Average gain on vehicles sold | (63 | ) | (50 | ) | (55 | ) | (39 | ) | ||||||||
Vehicle depreciation and lease charges, net | $ | 162 | $ | 188 | $ | 150 | $ | 217 |
Three Months | ||||||||
Ended March 31, | ||||||||
2012 | 2011 | |||||||
Average depreciable fleet (units) | 102,587 | 98,616 | ||||||
Average depreciation rate | $ | 182 | $ | 278 | ||||
Average gain on vehicles sold | (46 | ) | (27 | ) | ||||
Average vehicle depreciation and lease charges, net | $ | 136 | $ | 251 |
5. | EARNINGS PER SHARE |
Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net income | $ | 49,427 | $ | 42,505 | $ | 89,798 | $ | 59,028 | ||||||||
Basic EPS: | ||||||||||||||||
Weighted-average common shares | 28,001,134 | 28,896,750 | 28,374,782 | 28,829,062 | ||||||||||||
Basic EPS | $ | 1.77 | $ | 1.47 | $ | 3.16 | $ | 2.05 | ||||||||
Diluted EPS: | ||||||||||||||||
Weighted-average common shares | 28,001,134 | 28,896,750 | 28,374,782 | 28,829,062 | ||||||||||||
Shares contingently issuable: | ||||||||||||||||
Stock options | 866,060 | 2,003,320 | 879,418 | 1,994,468 | ||||||||||||
Performance awards and non-vested shares | 125,825 | 119,675 | 103,438 | 79,005 | ||||||||||||
Employee compensation shares deferred | 24,577 | 49,406 | 32,419 | 49,359 | ||||||||||||
Director compensation shares deferred | 224,535 | 221,452 | 223,661 | 220,105 | ||||||||||||
Shares applicable to diluted | 29,242,131 | 31,290,603 | 29,613,718 | 31,171,999 | ||||||||||||
Diluted EPS | $ | 1.69 | $ | 1.36 | $ | 3.03 | $ | 1.89 |
Three Months | ||||||||
Ended March 31, | ||||||||
2012 | 2011 | |||||||
Net income | $ | 40,371 | $ | 16,523 | ||||
Basic EPS: | ||||||||
Weighted-average common shares | 28,748,434 | 28,760,628 | ||||||
Basic EPS | $ | 1.40 | $ | 0.57 | ||||
Diluted EPS: | ||||||||
Weighted-average common shares | 28,748,434 | 28,760,628 | ||||||
Shares contingently issuable: | ||||||||
Stock options | 892,775 | 1,985,615 | ||||||
Performance awards and nonvested shares | 81,051 | 38,335 | ||||||
Employee compensation shares deferred | 40,261 | 49,310 | ||||||
Director compensation shares deferred | 222,786 | 218,757 | ||||||
Shares applicable to diluted | 29,985,307 | 31,052,645 | ||||||
Diluted EPS | $ | 1.35 | $ | 0.53 |
6. | RECEIVABLES |
March 31, | December 31, | June 30, | December 31, | |||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Trade accounts receivable and other | $ | 71,207 | $ | 74,403 | $ | 83,531 | $ | 74,403 | ||||||||
Vehicle manufacturer receivables | 20,568 | 21,510 | 19,864 | 21,510 | ||||||||||||
Car sales receivable | 3,983 | 2,287 | 5,836 | 2,287 | ||||||||||||
95,758 | 98,200 | 109,231 | 98,200 | |||||||||||||
Less: Allowance for doubtful accounts | (2,510 | ) | (2,840 | ) | (1,933 | ) | (2,840 | ) | ||||||||
$ | 93,248 | $ | 95,360 | $ | 107,298 | $ | 95,360 |
7. | DEBT AND OTHER OBLIGATIONS |
March 31, | December 31, | |||||||
2012 | 2011 | |||||||
Vehicle debt and other obligations | ||||||||
Asset-backed medium-term notes: | ||||||||
Series 2011-2 notes (matures May 2015) | $ | 400,000 | $ | 400,000 | ||||
Series 2011-1 notes (matures February 2015) | 500,000 | 500,000 | ||||||
Series 2007-1 notes (matures July 2012) | 333,333 | 500,000 | ||||||
1,233,333 | 1,400,000 | |||||||
Discounts on asset-backed medium-term notes | (40 | ) | (45 | ) | ||||
Asset-backed medium-term notes, net of discount | 1,233,293 | 1,399,955 | ||||||
Series 2010-3 variable funding note (matures December 2013) | 180,000 | - | ||||||
CAD Series 2012-1 notes (Canadian fleet financing) (matures August 2014) | 60,138 | - | ||||||
Total debt and other obligations | $ | 1,473,431 | $ | 1,399,955 |
June 30, | December 31, | |||||||
2012 | 2011 | |||||||
Vehicle debt and other obligations | ||||||||
Asset-backed medium-term notes: | ||||||||
Series 2011-2 notes (matures May 2015) | $ | 400,000 | $ | 400,000 | ||||
Series 2011-1 notes (matures February 2015) | 500,000 | 500,000 | ||||||
Series 2007-1 notes (matures July 2012) | 83,333 | 500,000 | ||||||
983,333 | 1,400,000 | |||||||
Discounts on asset-backed medium-term notes | (36 | ) | (45 | ) | ||||
Asset-backed medium-term notes, net of discount | 983,297 | 1,399,955 | ||||||
Series 2010-3 variable funding notes (matures December 2013) | 510,000 | - | ||||||
CAD Series 2012-1 notes (Canadian fleet financing) | 68,845 | - | ||||||
(matures August 2014) | ||||||||
Total debt and other obligations | $ | 1,562,142 | $ | 1,399,955 | ||||
8. | DERIVATIVE FINANCIAL INSTRUMENTS |
Fair Value of Derivative Instruments | ||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
March 31, | December 31, | March 31, | December 31, | |||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||
Interest rate contracts | Prepaid expenses and other assets | $ | 272 | Prepaid expenses and other assets | $ | 548 | Accrued Liabilities | $ | - | Accrued Liabilities | $ | - | ||||||||
Total derivatives | $ | 272 | $ | 548 | $ | - | $ | - |
Fair Value of Derivative Instruments | ||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
June 30, | December 31, | June 30, | December 31, | |||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||
Interest rate contracts | Prepaid expenses and other assets | $ | 63 | Prepaid expenses and other assets | $ | 548 | Accrued liabilities | $ | - | Accrued liabilities | $ | - | ||||||||
Amount of (Gain) or Loss Recognized in Income on Derivative | Location of (Gain) or Loss Recognized in Income on Derivative | ||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
Derivatives Not Designated as Hedging Instruments | 2012 | 2011 | |||||||
Net (increase) decrease in fair | |||||||||
Interest rate contracts | $ | 276 | $ | (3,474 | ) | value of derivatives | |||
Total | $ | 276 | $ | (3,474 | ) |
Amount of (Gain) or Loss Recognized in Income on Derivative | Location of (Gain) or Loss Recognized in Income on Derivative | ||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
Net (increase) decrease in | |||||||||||||||||
Interest rate contracts | $ | 209 | $ | (416 | ) | $ | 485 | $ | (3,890 | ) | fair value of derivatives | ||||||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | Location of (Gain) or Loss Reclassified from AOCI in Income (Effective Portion) | |||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | 2012 | 2011 | 2012 | 2011 | |||||||||||||
Interest rate contracts | $ | - | $ | 3,622 | $ | (2,839 | ) | $ | (3,409 | ) | Interest expense, net of interest income | ||||||
Total | $ | - | $ | 3,622 | $ | (2,839 | ) | $ | (3,409 | ) |
Derivatives in Cash Flow Hedging Relationships | Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | Location of (Gain) or Loss Reclassified from AOCI in Income (Effective Portion) | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
Three Months Ended | |||||||||||||||||
June 30, | Interest expense, net of | ||||||||||||||||
Interest rate contracts | $ | - | $ | 3,075 | $ | (1,893 | ) | $ | (3,673 | ) | interest income | ||||||
Six Months Ended | |||||||||||||||||
June 30, | Interest expense, net of | ||||||||||||||||
Interest rate contracts | $ | - | $ | 6,697 | $ | (4,732 | ) | $ | (7,082 | ) | interest income | ||||||
9. | FAIR VALUE MEASUREMENTS |
Fair Value Measurements at Reporting Date Using | Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||||
Total Fair | Quoted Prices in | Significant Other | Significant | Total Fair | Quoted Prices in | Significant Other | Significant | |||||||||||||||||||||||||
(in thousands) | Value Assets | Active Markets for | Observable | Unobservable | Value Assets | Active Markets for | Observable | Unobservable | ||||||||||||||||||||||||
(Liabilities) | Identical Assets | Inputs | Inputs | (Liabilities) | Identical Assets | Inputs | Inputs | |||||||||||||||||||||||||
Description | at 3/31/12 | (Level 1) | (Level 2) | (Level 3) | at 6/30/12 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||||
Derivative Assets | $ | 272 | $ | - | $ | 272 | $ | - | $ | 63 | $ | - | $ | 63 | $ | - | ||||||||||||||||
Deferred Compensation Plan Assets (a) | 6,543 | 6,543 | - | - | 6,701 | 6,701 | - | - | ||||||||||||||||||||||||
Total | $ | 6,815 | $ | 6,543 | $ | 272 | $ | - | $ | 6,764 | $ | 6,701 | $ | 63 | $ | - | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Total Fair | Quoted Prices in | Significant Other | Significant | |||||||||||||
(in thousands) | Value Assets | Active Markets for | Observable | Unobservable | ||||||||||||
(Liabilities) | Identical Assets | Inputs | Inputs | |||||||||||||
Description | at 12/31/11 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Derivative Assets | $ | 548 | $ | - | $ | 548 | $ | - | ||||||||
Deferred Compensation Plan Assets (a) | 5,752 | 5,752 | - | - | ||||||||||||
Total | $ | 6,300 | $ | 5,752 | $ | 548 | $ | - | ||||||||
(a) | Deferred Compensation Plan Assets consist primarily of equity securites. The Company also has an offsetting liability related to the Deferred Compensation Plan, which is not disclosed in the table as it is not independently measured at fair value, but rather is set to equal fair value of the assets held in the related rabbi trust. |
Fair Value Measurements at Reporting Date Using | Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||||||||||||||||||
Carrying Value | Fair Value | Quoted Prices in | Significant Other | Significant | Carrying Value | Fair Value | Quoted Prices in | Significant Other | Significant | |||||||||||||||||||||||||||||||
Assets | Assets | Active Markets for | Observable | Unobservable | Assets | Assets | Active Markets for | Observable | Unobservable | |||||||||||||||||||||||||||||||
(Liabilities) | (Liabilities) | Identical Assets | Inputs | Inputs | (Liabilities) | (Liabilities) | Identical Assets | Inputs | Inputs | |||||||||||||||||||||||||||||||
Description | at 3/31/12 | at 3/31/12 | (Level 1) | (Level 2) | (Level 3) | at 6/30/12 | at 6/30/12 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||
Vehicle debt and obligations- | ||||||||||||||||||||||||||||||||||||||||
floating rates (1) | $ | (513,333 | ) | $ | (512,278 | ) | $ | - | $ | (332,278 | ) | $ | (180,000 | ) | $ | (593,333 | ) | $ | (593,257 | ) | $ | - | $ | (83,257 | ) | $ | (510,000 | ) | ||||||||||||
Vehicle debt and obligations- | ||||||||||||||||||||||||||||||||||||||||
fixed rates | (900,000 | ) | (919,869 | ) | - | (507,429 | ) | (412,440 | ) | (900,000 | ) | (923,426 | ) | - | (511,954 | ) | (411,472 | ) | ||||||||||||||||||||||
Canadian dollar denominated | ||||||||||||||||||||||||||||||||||||||||
vehicle debt and obligations- | ||||||||||||||||||||||||||||||||||||||||
floating rates | (60,138 | ) | (60,138 | ) | - | - | (60,138 | ) | (68,845 | ) | (68,845 | ) | - | - | (68,845 | ) | ||||||||||||||||||||||||
Total | $ | (1,473,471 | ) | $ | (1,492,285 | ) | $ | - | $ | (839,707 | ) | $ | (652,578 | ) | $ | (1,562,178 | ) | $ | (1,585,528 | ) | $ | - | $ | (595,211 | ) | $ | (990,317 | ) | ||||||||||||
(1) | Includes |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||
Carrying Value | Fair Value | Quoted Prices in | Significant Other | Significant | ||||||||||||||||
Assets | Assets | Active Markets for | Observable | Unobservable | ||||||||||||||||
(Liabilities) | (Liabilities) | Identical Assets | Inputs | Inputs | ||||||||||||||||
Description | at 12/31/11 | at 12/31/11 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||
(in thousands) | ||||||||||||||||||||
Vehicle debt and obligations- | ||||||||||||||||||||
floating rates | $ | (500,000 | ) | $ | (495,820 | ) | $ | - | $ | (495,820 | ) | $ | - | |||||||
Vehicle debt and obligations- | ||||||||||||||||||||
fixed rates | (900,000 | ) | (899,292 | ) | - | (499,292 | ) | (400,000 | ) | |||||||||||
Total | $ | (1,400,000 | ) | $ | (1,395,112 | ) | $ | - | $ | (995,112 | ) | $ | (400,000 | ) | ||||||
10. | STOCKHOLDERS’ EQUITY |
Interest Rate Swap | Foreign Currency Translation | Accumulated Other Comprehensive Income (Loss) | Interest Rate Swap | Foreign Currency Translation | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||
(In Thousands) | (In Thousands) | |||||||||||||||||||||||
Balance, January 1, 2012 | $ | (8,488 | ) | $ | 871 | $ | (7,617 | ) | $ | (8,488 | ) | $ | 871 | $ | (7,617 | ) | ||||||||
Interest rate swap and cap adjustment, net of tax | 6,386 | - | 6,386 | 8,281 | - | 8,281 | ||||||||||||||||||
Foreign currency translation adjustment | - | 2,565 | 2,565 | - | 531 | 531 | ||||||||||||||||||
Balance, March 31, 2012 | $ | (2,102 | ) | $ | 3,436 | $ | 1,334 | |||||||||||||||||
Balance, June 30, 2012 | $ | (207 | ) | $ | 1,402 | $ | 1,195 |
11. | INCOME TAXES |
12. | COMMITMENTS AND CONTINGENCIES |
13. | NEW ACCOUNTING STANDARDS |
14. | SUBSEQUENT EVENTS |
Three Months | Six Months | |||||||||||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||||||||||
% | % | |||||||||||||||||||||||
U.S. and Canada | 2012 | 2011 | Change | 2012 | 2011 | Change | ||||||||||||||||||
Vehicle Rental Data: | ||||||||||||||||||||||||
Average number of vehicles operated | 117,222 | 116,738 | 0.4% | 109,319 | 107,391 | 1.8% | ||||||||||||||||||
Number of rental days | 8,563,364 | 8,217,167 | 4.2% | 16,040,134 | 15,239,261 | 5.3% | ||||||||||||||||||
Vehicle utilization | 80.3% | 77.4% | 2.9 p.p. | 80.6% | 78.4% | 2.2 p.p. | ||||||||||||||||||
Average revenue per day | $ | 44.25 | $ | 46.02 | (3.8% | ) | $ | 44.76 | $ | 46.62 | (4.0% | ) | ||||||||||||
Monthly average revenue per vehicle | $ | 1,077 | $ | 1,080 | (0.3% | ) | $ | 1,095 | $ | 1,103 | (0.7% | ) | ||||||||||||
Average depreciable fleet | 118,485 | 117,876 | 0.5% | 110,536 | 108,299 | 2.1% | ||||||||||||||||||
Monthly avg. depreciation (net) per vehicle | $ | 162 | $ | 188 | (13.8% | ) | $ | 150 | $ | 217 | (30.9% | ) | ||||||||||||
Three Months | ||||||||||||
Ended March 31, | ||||||||||||
Percentage | ||||||||||||
U.S. and Canada | 2012 | 2011 | Change | |||||||||
Vehicle Rental Data: | ||||||||||||
Average number of vehicles operated | 101,417 | 97,940 | 3.6% | |||||||||
Number of rental days | 7,476,770 | 7,022,094 | 6.5% | |||||||||
Vehicle utilization | 81.0% | 79.7% | 1.3 p.p. | |||||||||
Average revenue per day | $ | 45.35 | $ | 47.32 | (4.2% | ) | ||||||
Monthly average revenue per vehicle | $ | 1,115 | $ | 1,131 | (1.4% | ) | ||||||
Average depreciable fleet | 102,587 | 98,616 | 4.0% | |||||||||
Monthly avg. depreciation (net) per vehicle | $ | 136 | $ | 251 | (45.8% | ) |
Three Months | Three Months | Six Months | ||||||||||||||||||||||
Ended March 31, | Ended June 30, | Ended June 30, | ||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
(in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||||||
Reconciliation of Net Income to | ||||||||||||||||||||||||
Corporate Adjusted EBITDA | �� | |||||||||||||||||||||||
Net income - as reported | $ | 40,371 | $ | 16,523 | $ | 49,427 | $ | 42,505 | $ | 89,798 | $ | 59,028 | ||||||||||||
(Increase) decrease in fair value of derivatives | 276 | (3,474 | ) | 209 | (416 | ) | 485 | (3,890 | ) | |||||||||||||||
Non-vehicle interest expense | 2,609 | 2,471 | 1,717 | 2,873 | 4,326 | 5,344 | ||||||||||||||||||
Income tax expense | 27,068 | 12,895 | 28,979 | 28,434 | 56,047 | 41,329 | ||||||||||||||||||
Non-vehicle depreciation | 4,536 | 4,840 | 4,321 | 4,933 | 8,857 | 9,773 | ||||||||||||||||||
Amortization | 1,775 | 1,866 | 1,826 | 1,941 | 3,601 | 3,807 | ||||||||||||||||||
Non-cash stock incentives | 1,625 | 1,209 | 1,791 | 928 | 3,416 | 2,137 | ||||||||||||||||||
Other | (1,431 | ) | (4 | ) | - | (8 | ) | (1,431 | ) | (12 | ) | |||||||||||||
Corporate Adjusted EBITDA | $ | 76,829 | $ | 36,326 | $ | 88,270 | $ | 81,190 | $ | 165,099 | $ | 117,516 | ||||||||||||
Reconciliation of Corporate Adjusted EBITDA | ||||||||||||||||||||||||
to Cash Flows From Operating Activities | ||||||||||||||||||||||||
Corporate Adjusted EBITDA | $ | 76,829 | $ | 36,326 | $ | 88,270 | $ | 81,190 | $ | 165,099 | $ | 117,516 | ||||||||||||
Vehicle depreciation, net of gains/losses from disposal | 41,731 | 74,165 | 57,506 | 66,501 | 99,237 | 140,666 | ||||||||||||||||||
Non-vehicle interest expense | (2,609 | ) | (2,471 | ) | (1,717 | ) | (2,873 | ) | (4,326 | ) | (5,344 | ) | ||||||||||||
Change in assets and liabilities and other | (521 | ) | 26,270 | (24,446 | ) | 8,327 | (24,967 | ) | 34,597 | |||||||||||||||
Net cash provided by operating activities (a) | $ | 115,430 | $ | 134,290 | $ | 119,613 | $ | 153,145 | $ | 235,043 | $ | 287,435 | ||||||||||||
Memo: | ||||||||||||||||||||||||
Net cash used in investing activites | $ | (193,522 | ) | $ | (229,522 | ) | $ | (390,662 | ) | $ | (138,307 | ) | $ | (584,184 | ) | $ | (367,829 | ) | ||||||
Net cash provided by financing activities (a) | $ | 61,264 | $ | 150,627 | ||||||||||||||||||||
Net cash provided by / (used in) financing activities (a) | $ | 64,706 | $ | (77,313 | ) | $ | 125,970 | $ | 73,314 | |||||||||||||||
(a) Certain reclassifications have been made to the 2011 financial information to conform to the classifications used in 2012. |
(a) Certain reclassifications have been made to the 2011 financial information to conform to the classifications used in 2012. |
Three Months | ||||||||||||||||
Ended March 31, | $ Increase/ | % Increase/ | ||||||||||||||
2012 | 2011 | (decrease) | (decrease) | |||||||||||||
(in millions) | ||||||||||||||||
Vehicle rentals | $ | 339.1 | $ | 332.3 | $ | 6.8 | 2.1% | |||||||||
Other | 17.2 | 16.1 | 1.1 | 6.9% | ||||||||||||
Total revenues | $ | 356.3 | $ | 348.4 | $ | 7.9 | 2.3% | |||||||||
Vehicle rental metrics: | ||||||||||||||||
Number of rental days | 7,476,770 | 7,022,094 | 454,676 | 6.5% | ||||||||||||
Average revenue per day | $45.35 | $47.32 | ($1.97 | ) | (4.2% | ) |
Three Months | ||||||||||||||||
Ended June 30, | $ Increase/ | % Increase/ | ||||||||||||||
2012 | 2011 | (decrease) | (decrease) | |||||||||||||
(in millions) | ||||||||||||||||
Vehicle rentals | $ | 378.9 | $ | 378.2 | $ | 0.7 | 0.2% | |||||||||
Other | 16.5 | 16.9 | (0.4 | ) | (2.7% | ) | ||||||||||
Total revenues | $ | 395.4 | $ | 395.1 | $ | 0.3 | 0.1% | |||||||||
Vehicle rental metrics: | ||||||||||||||||
Number of rental days | 8,563,364 | 8,217,167 | 346,197 | 4.2% | ||||||||||||
Average revenue per day | $44.25 | $46.02 | ($1.77 | ) | (3.8% | ) | ||||||||||
Three Months | Three Months | |||||||||||||||||||||||||||||||
Ended March 31, | $ Increase/ | % Increase/ | Ended June 30, | $ Increase/ | % Increase/ | |||||||||||||||||||||||||||
2012 | 2011 | (decrease) | (decrease) | 2012 | 2011 | (decrease) | (decrease) | |||||||||||||||||||||||||
(in millions) | (in millions) | |||||||||||||||||||||||||||||||
Direct vehicle and operating | $ | 184.2 | $ | 178.3 | $ | 5.9 | 3.3% | $ | 196.5 | $ | 191.0 | $ | 5.5 | 2.9% | ||||||||||||||||||
Vehicle depreciation and lease charges, net | 41.7 | 74.1 | (32.4 | ) | (43.7% | ) | 57.5 | 66.5 | (9.0 | ) | (13.5% | ) | ||||||||||||||||||||
Selling, general and administrative (a) | 45.6 | 49.0 | (3.4 | ) | (6.9% | ) | 47.5 | 48.8 | (1.3 | ) | (2.8% | ) | ||||||||||||||||||||
Interest expense, net of interest income | 17.1 | 21.0 | (3.9 | ) | (18.6% | ) | 15.3 | 18.3 | (3.0 | ) | (16.2% | ) | ||||||||||||||||||||
Total expenses | $ | 288.6 | $ | 322.4 | $ | (33.8 | ) | (10.5% | ) | $ | 316.8 | $ | 324.6 | $ | (7.8 | ) | (2.4% | ) | ||||||||||||||
(Increase) decrease in fair value of derivatives | $ | 0.3 | $ | (3.5 | ) | $ | 3.8 | (107.9% | ) | $ | 0.2 | $ | (0.4 | ) | $ | 0.6 | (150.2% | ) | ||||||||||||||
(a) Includes merger-related expenses of $3.5 million for the three months ended March 31, 2011. |
Ø | Vehicle insurance expenses increased $5.7 million resulting from less favorable loss experience realized on the Company’s vehicle insurance programs during the second quarter of 2012, compared to the loss experience during the second quarter of 2011, partially offset by lower accrual rates in the second quarter of 2012. |
Ø | Vehicle-related expenses increased |
Ø |
Ø | Vehicle depreciation expense decreased |
Ø | Net vehicle gains on disposal of Non-Program Vehicles, which effectively represent revisions to previous estimates of vehicle depreciation charges by reducing net vehicle depreciation and lease charges, increased |
Ø | Merger-related costs of |
Ø | Outsourcing expenses decreased |
Ø |
Ø | All other selling, general and administrative expenses |
Six Months | ||||||||||||||||
Ended June 30, | $ Increase/ | % Increase/ | ||||||||||||||
2012 | 2011 | (decrease) | (decrease) | |||||||||||||
(in millions) | ||||||||||||||||
Vehicle rentals | $ | 718.0 | $ | 710.5 | $ | 7.5 | 1.1% | |||||||||
Other | 33.7 | 33.0 | 0.7 | 2.0% | ||||||||||||
Total revenues | $ | 751.7 | $ | 743.5 | $ | 8.2 | 1.1% | |||||||||
Vehicle rental metrics: | ||||||||||||||||
Number of rental days | 16,040,134 | 15,239,261 | 800,873 | 5.3% | ||||||||||||
Average revenue per day | $44.76 | $46.62 | ($1.86 | ) | (4.0% | ) | ||||||||||
Six Months | ||||||||||||||||
Ended June 30, | $ Increase/ | % Increase/ | ||||||||||||||
2012 | 2011 | (decrease) | (decrease) | |||||||||||||
(in millions) | ||||||||||||||||
Direct vehicle and operating | $ | 380.7 | $ | 369.3 | $ | 11.4 | 3.1% | |||||||||
Vehicle depreciation and lease charges, net | 99.2 | 140.6 | (41.4 | ) | (29.5% | ) | ||||||||||
Selling, general and administrative (a) | 93.0 | 97.8 | (4.8 | ) | (4.9% | ) | ||||||||||
Interest expense, net of interest income | 32.4 | 39.3 | (6.9 | ) | (17.5% | ) | ||||||||||
Total expenses | $ | 605.3 | $ | 647.0 | $ | (41.7 | ) | (6.4% | ) | |||||||
(Increase) decrease in fair value of derivatives | $ | 0.5 | $ | (3.9 | ) | $ | 4.4 | (112.5% | ) | |||||||
Ø | Vehicle-related expenses increased $7.6 million, primarily due to a $4.0 million increase in net vehicle damage expense, as well as an increase in gasoline expense of $2.8 million and an increase in toll and ticket expense of $1.0 million. Increased sales of pre-paid fuel and toll road products are a focus area for the Company, and the majority of the increase in these expenses is recovered through customer revenue related to these products. Additionally, the Company experienced a $1.9 million increase in vehicle maintenance expense due to the increase in the average rental fleet size and the number of higher mileage vehicles in the fleet compared to the first half of 2011. These increases were partially offset by a $2.3 million decrease in shuttling expense. |
Ø | Vehicle insurance expenses increased $4.0 million resulting from less favorable loss experience realized on the Company’s vehicle insurance programs during the first half of 2012, compared to the loss experience during the first half of 2011, partially offset by lower accrual rates in the first half of 2012. |
Ø | Personnel-related expenses increased $1.4 million. The increase was primarily due to a $1.1 million increase in incentive-related compensation and a $0.3 million increase in group insurance expense primarily due to a large claim processed in the first half of 2012. |
Ø | Rent expenses decreased $2.0 million, primarily due to the settlement of rent disputes resulting in credits to rent expense. |
Ø | Vehicle depreciation expense decreased $30.4 million, primarily resulting from a 19.9% decrease in the average depreciation rate due to continued favorable used vehicle market conditions. The significant decrease in base depreciation rates primarily resulted from the 2010 model year vehicles, which are at the end of their useful lives and contain significant embedded gains due to the favorable volatility in the used vehicle market during the depreciable lives of those vehicles. This decrease was partially offset by a 2.1% increase in the average depreciable fleet. |
Ø | Net vehicle gains on disposal of Non-Program Vehicles, which effectively represent revisions to previous estimates of vehicle depreciation charges by reducing net vehicle depreciation and lease charges, increased $11.0 million from a $25.8 million gain in the first half of 2011 to a $36.8 million gain in the first half of 2012. This increase in gains on sales of Non-Program Vehicles resulted from more units sold in the first half of 2012, partially offset by a lower average gain per unit as compared to the first half of 2011. The lower average gains per unit result from continually refining the depreciation rates to reflect higher estimated residual values of vehicles. |
Ø | Merger-related costs of $4.6 million during the first half of 2011 with no such merger-related costs during the first half of 2012. |
Ø | Outsourcing expenses decreased $1.6 million primarily due to a lower base fee paid to a third-party service provider in the first half of 2012 compared to the first half of 2011. |
Ø | Personnel-related expenses increased $2.1 million, primarily due to the timing of compensation-related accruals which increased by $4.3 million, partially offset by a $1.3 million decrease in salary expense and a $0.9 million decrease in the market value of the Company’s deferred compensation and retirement plans. |
Full Year | Full Year | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
(in millions) | (in millions) | |||||||||||||||
Reconciliation of Pretax Income to | (forecasted) | (actual) | (forecasted) | (actual) | ||||||||||||
Corporate Adjusted EBITDA | ||||||||||||||||
Pretax income | $246 - $271 | $ | 261 | $247 - $272 | $ | 261 | ||||||||||
(Increase) decrease in fair value of derivatives (2012 amount is YTD March 2012) | - | (3 | ) | |||||||||||||
(Increase) decrease in fair value of derivatives (2012 amount is YTD June 2012) | - | (3 | ) | |||||||||||||
Non-vehicle interest expense | 7 | 11 | 7 | 11 | ||||||||||||
Non-vehicle depreciation | 19 | 19 | 18 | 19 | ||||||||||||
Amortization | 7 | 7 | 7 | 7 | ||||||||||||
Non-cash stock incentives | 7 | 3 | 7 | 3 | ||||||||||||
Other | (1 | ) | - | (1 | ) | - | ||||||||||
Corporate Adjusted EBITDA | $285 - $310 | $ | 298 | $285 - $310 | $ | 298 | ||||||||||
a) | Recent Sales of Unregistered Securities |
b) | Use of Proceeds |
c) | Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Total Number of | Approximate | |||||||||||||||
Shares Purchased | Dollar Value of | |||||||||||||||
Total Number | Average | as Part of Publicly | Shares that May Yet | |||||||||||||
of Shares | Price Paid | Announced Plans | Be Purchased under | |||||||||||||
Period | Purchased | Per Share | or Programs | the Plans or Programs | ||||||||||||
April 1, 2012 - | ||||||||||||||||
April 30, 2012 | 92,500 | $ | 79.48 | 92,500 | $ | 287,627,742 | ||||||||||
May 1, 2012 - | ||||||||||||||||
May 31, 2012 | 96,228 | $ | 77.51 | 96,228 | $ | 280,169,206 | ||||||||||
June 1, 2012 - | ||||||||||||||||
June 30, 2012 | 94,522 | $ | 79.47 | 94,522 | $ | 272,657,106 | ||||||||||
Total | 283,250 | 283,250 |
Total Number of | Approximate | |||||||||||||||
Shares Purchased | Dollar Value of | |||||||||||||||
Total Number | Average | as Part of Publicly | Shares that May Yet | |||||||||||||
of Shares | Price Paid | Announced Plans | Be Purchased under | |||||||||||||
Period | Purchased | Per Share | or Programs | the Plans or Programs | ||||||||||||
January 1, 2012 - | ||||||||||||||||
January 31, 2012 | - | $ | - | - | $ | 300,000,000 | ||||||||||
February 1, 2012 - | ||||||||||||||||
February 29, 2012 | 1,451,193 | $ | 68.91 | 1,451,193 | $ | 300,000,000 | (a) | |||||||||
March 1, 2012 - | ||||||||||||||||
March 31, 2012 | 64,200 | $ | 78.19 | 64,200 | $ | 294,979,946 | ||||||||||
Total | 1,515,393 | 1,515,393 | ||||||||||||||
3.2 | Fifth Amended and Restated By-Laws of Dollar Thrifty Automotive Group, Inc., adopted effective as |
4.266 | Amendment No. 1 to Master Motor Vehicle Lease and Servicing Agreement (Group VIII), dated as of May 18, 2012, among Rental Car Finance Corp., as Lessor, DTG Operations, Inc., as Lessee and Servicer, those Permitted Lessees from time to time becoming Lessees and Servicers thereunder and Dollar Thrifty Automotive Group, Inc., as Guarantor and Master Servicer |
4.267 | Amendment No. 2 to Amended and Restated Master Motor Vehicle Lease and Servicing Agreement (Group VII), dated as of June 15, 2012, among Rental |
4.268 | Amendment No. 2 to Master Motor Vehicle Lease and Servicing Agreement (Group VIII), dated as of |
10.260 | Fourth Amendment to Second Amended and Restated Long-Term Incentive Plan and Director Equity Plan (incorporated by reference to Exhibit |
Letter from Ernst & Young LLP regarding interim financial information | |
Consent of HoganTaylor LLP regarding Registration Statement on Form S-8, Registration No. 333-89189 (incorporated by reference to Exhibit 23.47 to Dollar Thrifty Automotive Group, Inc. Retirement Savings Plan’s Form 11-K for the fiscal year ended December 31, 2011, filed June 25, 2012 (Commission File No. 1-13647)) | |
31.83 | Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
Certification by the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
Certification by the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | XBRL Instance Document* |
101.SCH | XBRL Taxonomy Extension Schema Document* |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document* |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document* |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document* |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document* |
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. | |||
August 2, 2012 | By: | /s/ SCOTT L. THOMPSON | |
Scott L. Thompson President, Chief Executive Officer and Principal Executive Officer | |||
August 2, 2012 | By: | /s/ H. CLIFFORD BUSTER III | |
H. Clifford Buster III Senior Executive Vice President, Chief Financial Officer and Principal Financial Officer |
3.1 | Amended and Restated Certificate of Incorporation of Dollar Thrifty Automotive Group, Inc. |
4.265 | Amendment No. 1 to Amended and Restated Master Motor Vehicle Lease and Servicing Agreement (Group VII), dated as of May 18, 2012, among Rental Car Finance Corp., as Lessor, DTG Operations, Inc., as Lessee and Servicer, those Permitted Lessees from time to time becoming Lessees and Servicers thereunder and Dollar Thrifty Automotive Group, Inc., as Guarantor and Master Servicer |
4.266 | Amendment No. 1 to Master Motor Vehicle Lease and Servicing Agreement (Group VIII), dated as of May 18, 2012, among Rental Car Finance Corp., as Lessor, DTG Operations, Inc., as Lessee and Servicer, those Permitted Lessees from time to time becoming Lessees and Servicers thereunder and Dollar Thrifty Automotive Group, Inc., as Guarantor and Master Servicer |
4.267 | Amendment No. 2 to Amended and Restated Master Motor Vehicle Lease and Servicing Agreement (Group VII), dated as of June 15, 2012, among Rental Car Finance Corp., as Lessor, DTG Operations, Inc., as Lessee and Servicer, those Permitted Lessees from time to time becoming Lessees and Servicers thereunder and Dollar Thrifty Automotive Group, Inc., as Guarantor and Master Servicer |
4.268 | Amendment No. 2 to Master Motor Vehicle Lease and Servicing Agreement (Group VIII), dated as of June 15, 2012, among Rental Car Finance Corp., as Lessor, DTG Operations, Inc., as Lessee and Servicer, those Permitted Lessees from time to time becoming Lessees and Servicers thereunder and Dollar Thrifty Automotive Group, Inc., as Guarantor and Master Servicer |
10.261 | Vehicle Supply Agreement dated May 2, 2012 (effective June 22, 2012) between Chrysler Group LLC and Dollar Thrifty Automotive Group, Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment) |
15.44 | Letter from Ernst & Young LLP regarding interim financial information |
31.83 | Certification by the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.84 | Certification by the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.83 | Certification by the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.84 | Certification by the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS | XBRL Instance Document* |
101.SCH | XBRL Taxonomy Extension Schema Document* |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document* |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document* |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document* |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document* |