Exhibit 99.2
FINANCIAL INFORMATION AND OPERATING DATA
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||||||
(In millions, except per share data) | 2015 | 2014 | 2013 As Restated | 2013 As Revised | 2013 As Reported | |||||||||||||||
Total revenues | $ | 2,454 | $ | 2,536 | $ | 2,437 | $ | 2,437 | $ | 2,436 | ||||||||||
Expenses: | ||||||||||||||||||||
Direct operating | 1,408 | 1,443 | 1,364 | 1,358 | 1,351 | |||||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 707 | 726 | 589 | 580 | 587 | |||||||||||||||
Selling, general and administrative | 266 | 276 | 250 | 248 | 252 | |||||||||||||||
Interest expense, net | 154 | 156 | 175 | 175 | 175 | |||||||||||||||
Other income, net | 5 | (3 | ) | — | 2 | (1 | ) | |||||||||||||
Total expenses | 2,540 | 2,598 | 2,378 | 2,363 | 2,364 | |||||||||||||||
Income (loss) before income taxes | (86 | ) | (62 | ) | 59 | 74 | 72 | |||||||||||||
(Provision) benefit for taxes on income (loss) | 16 | (7 | ) | (53 | ) | (58 | ) | (54 | ) | |||||||||||
Net income (loss) | $ | (70 | ) | $ | (69 | ) | $ | 6 | $ | 16 | $ | 18 | ||||||||
Weighted average number of shares outstanding: | ||||||||||||||||||||
Basic | 459 | 447 | 416 | 416 | 416 | |||||||||||||||
Diluted | 459 | 447 | 461 | 461 | 461 | |||||||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | (0.15 | ) | $ | (0.15 | ) | $ | 0.01 | $ | 0.04 | $ | 0.04 | ||||||||
Diluted | $ | (0.15 | ) | $ | (0.15 | ) | $ | 0.02 | $ | 0.04 | $ | 0.04 | ||||||||
Corporate EBITDA (a) | $ | 226 | $ | 254 | $ | 359 | NR | $ | 367 | |||||||||||
Adjusted pre-tax Income (loss) (a) | 3 | 24 | 136 | NR | 145 |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule III.
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET DATA
As of March 31, | As of December 31, 2013 | |||||||||||
(In millions) | 2015 | 2014 | As Revised | |||||||||
Cash and cash equivalents | $ | 585 | $ | 498 | $ | 411 | ||||||
Restricted cash | 411 | 453 | 861 | |||||||||
Revenue earning equipment: | ||||||||||||
U.S. Car Rental | 8,814 | 8,662 | 8,629 | |||||||||
International Car Rental | 2,021 | 2,245 | 2,047 | |||||||||
Worldwide Equipment Rental | 2,473 | 2,440 | 2,416 | |||||||||
All Other Operations | 1,285 | 1,157 | 1,099 | |||||||||
Total revenue earning equipment, net | 14,593 | 14,504 | 14,191 | |||||||||
Total assets | 24,602 | 24,470 | 24,423 | |||||||||
Total debt | 16,351 | 16,125 | 16,309 | |||||||||
Net Fleet debt (a) | 9,548 | 9,148 | 9,034 | |||||||||
Net Corporate debt (a) (b) | 5,807 | 6,026 | 6,003 | |||||||||
Total equity | 2,349 | 2,491 | 2,567 |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule VI.
(b) Fleet related to Hertz Equipment Rental Corporation is funded via Corporate Debt.
1
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||||||
(In millions) | 2015 | 2014 | 2013 As Restated | 2013 As Revised | 2013 As Reported | |||||||||||||||
Cash provided by (used in): | ||||||||||||||||||||
Operating activities | $ | 782 | $ | 760 | $ | 746 | $ | 747 | $ | 743 | ||||||||||
Investing activities | (1,166 | ) | (372 | ) | (946 | ) | (950 | ) | (932 | ) | ||||||||||
Financing activities | 499 | (301 | ) | 317 | 318 | 318 | ||||||||||||||
Effect of exchange rate changes | (20 | ) | — | (8 | ) | (8 | ) | (8 | ) | |||||||||||
Net change in cash and cash equivalents | $ | 95 | $ | 87 | $ | 109 | $ | 107 | $ | 121 | ||||||||||
Fleet growth (a) | $ | 171 | $ | — | �� | $ | (196 | ) | NR | $ | (194 | ) | ||||||||
Free cash flow (a) | 189 | 3 | (76 | ) | (73 | ) | (79 | ) |
(a) | Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedules IV and V. |
SELECTED UNAUDITED OPERATING DATA BY SEGMENT
Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||
2015 | 2014 | 2013 As Restated | 2013 As Reported | |||||||||||||
U.S. Car Rental | ||||||||||||||||
Transaction days (in thousands) | 32,036 | 32,360 | 30,064 | 30,064 | ||||||||||||
Total RPD(a) | $ | 47.07 | $ | 47.90 | $ | 48.63 | $ | 49.35 | ||||||||
Average fleet | 489,300 | 491,500 | 454,000 | 457,700 | ||||||||||||
Fleet efficiency(a) | 73 | % | 75 | % | 77 | % | NR | |||||||||
Net depreciation per unit per month(a) | $ | 287 | $ | 288 | $ | 209 | NR | |||||||||
Program cars as a percentage of total average fleet at period end | 24 | % | 15 | % | 4 | % | NR | |||||||||
Adjusted pre-tax income (loss) (in millions)(a) | $ | 71 | $ | 119 | $ | 232 | NR | |||||||||
International Car Rental | ||||||||||||||||
Transaction days (in thousands) | 9,775 | 9,395 | 9,006 | 9,006 | ||||||||||||
Total RPD(a)(b) | $ | 46.96 | $ | 51.41 | $ | 51.63 | $ | 52.76 | ||||||||
Average Fleet | 144,000 | 141,400 | 137,500 | 137,500 | ||||||||||||
Fleet efficiency(a) | 75 | % | 74 | % | 73 | % | NR | |||||||||
Net depreciation per unit per month(a) | $ | 231 | $ | 266 | $ | 301 | NR | |||||||||
Program cars as a percentage of total average fleet at period end | 38 | % | 34 | % | 28 | % | NR | |||||||||
Adjusted pre-tax income (loss) (in millions)(a) | $ | 8 | $ | (39 | ) | $ | (47 | ) | NR | |||||||
Worldwide Equipment Rental | ||||||||||||||||
Dollar utilization | 34 | % | 34 | % | 35 | % | NR | |||||||||
Time utilization | 61 | % | 61 | % | 61 | % | NR | |||||||||
Rental and rental related revenue (in millions)(a)(b) | $ | 336 | $ | 334 | $ | 320 | $ | 322 | ||||||||
Same store revenue growth, including growth initiatives(b) | 1 | % | 5 | % | 13 | % | 13 | % | ||||||||
Adjusted pre-tax income (loss) (in millions)(a) | $ | 33 | $ | 52 | $ | 45 | $ | 46 | ||||||||
All Other Operations | ||||||||||||||||
Average fleet — Donlen | 168,600 | 176,800 | 165,600 | 165,600 | ||||||||||||
Adjusted pre-tax income (loss) (in millions)(a) | $ | 16 | $ | 16 | $ | 13 | NR |
(a) | Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedules III and VI. |
(b) | Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates. |
2
SUPPLEMENTAL SCHEDULES AND DEFINITIONS
The following Supplemental Schedules and definitions are provided to present segment results and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules we provide definitions for terminology used throughout these schedules.
Supplemental Schedule I
HERTZ GLOBAL HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
Three Months Ended March 31, 2015 | Three Months Ended March 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | U.S. Car Rental | Int'l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | U.S. Car Rental | Int'l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | |||||||||||||||||||||||||||||||||||
Total revenues: | $ | 1,520 | $ | 436 | $ | 355 | $ | 143 | $ | — | $ | 2,454 | $ | 1,557 | $ | 482 | $ | 358 | $ | 139 | $ | — | $ | 2,536 | |||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
Direct operating | 926 | 267 | 208 | 6 | 1 | 1,408 | 907 | 329 | 200 | 7 | — | 1,443 | |||||||||||||||||||||||||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 421 | 95 | 76 | 115 | — | 707 | 424 | 113 | 78 | 111 | — | 726 | |||||||||||||||||||||||||||||||||||
Selling, general and administrative | 98 | 57 | 46 | 8 | 57 | 266 | 101 | 65 | 32 | 6 | 72 | 276 | |||||||||||||||||||||||||||||||||||
Interest expense, net | 40 | 15 | 15 | 2 | 82 | 154 | 38 | 20 | 13 | 4 | 81 | 156 | |||||||||||||||||||||||||||||||||||
Other (income) expense, net | — | — | (1 | ) | — | 6 | 5 | (7 | ) | — | (1 | ) | — | 5 | (3 | ) | |||||||||||||||||||||||||||||||
Total expenses | 1,485 | 434 | 344 | 131 | 146 | 2,540 | 1,463 | 527 | 322 | 128 | 158 | 2,598 | |||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 35 | $ | 2 | $ | 11 | $ | 12 | $ | (146 | ) | $ | (86 | ) | $ | 94 | $ | (45 | ) | $ | 36 | $ | 11 | $ | (158 | ) | $ | (62 | ) | ||||||||||||||||||
Provision for taxes on income | 16 | (7 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | (70 | ) | $ | (69 | ) |
3
Supplemental Schedule I (continued)
HERTZ GLOBAL HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
Three Months Ended March 31, 2013 As Restated | Three Months Ended March 31, 2013 As Revised | Three Months Ended March 31, 2013 As Reported | |||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int'l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | Consolidated HGH | Consolidated HGH | |||||||||||||||||||||||
Total revenues: | $ | 1,484 | $ | 471 | $ | 353 | $ | 129 | $ | — | $ | 2,437 | $ | 2,437 | $ | 2,436 | |||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||
Direct operating | 847 | 313 | 203 | 6 | (5 | ) | 1,364 | 1,358 | 1,351 | ||||||||||||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 285 | 125 | 74 | 105 | — | 589 | 580 | 587 | |||||||||||||||||||||||
Selling, general and administrative | 101 | 65 | 33 | 7 | 44 | 250 | 248 | 252 | |||||||||||||||||||||||
Interest expense, net | 46 | 26 | 13 | 2 | 88 | 175 | 175 | 175 | |||||||||||||||||||||||
Other (income) expense, net | 1 | — | (1 | ) | — | — | — | 2 | (1 | ) | |||||||||||||||||||||
Total expenses | 1,280 | 529 | 322 | 120 | 127 | 2,378 | 2,363 | 2,364 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 204 | $ | (58 | ) | $ | 31 | $ | 9 | $ | (127 | ) | $ | 59 | $ | 74 | $ | 72 | |||||||||||||
Provision for taxes on income | (53 | ) | (58 | ) | (54 | ) | |||||||||||||||||||||||||
Net income (loss) | $ | 6 | $ | 16 | $ | 18 |
4
Supplemental Schedule II
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TO ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Three Months Ended March 31, 2015 | Three Months Ended March 31, 2014 | Three Months Ended March 31, 2013 as Restated | Three Months Ended March 31, 2013 as Reported | ||||||||||||||||||||||||||||||||||||||||||||
(In millions, except per share data) | GAAP | Adjust-ments | Adjusted (Non-GAAP) | GAAP | Adjust-ments | Adjusted (Non-GAAP) | GAAP | Adjust-ments | Adjusted (Non-GAAP) | GAAP | Adjust-ments | Adjusted (Non-GAAP) | |||||||||||||||||||||||||||||||||||
Total revenues | $ | 2,454 | $ | — | $ | 2,454 | $ | 2,536 | $ | — | $ | 2,536 | $ | 2,437 | $ | — | $ | 2,437 | $ | 2,436 | $ | — | $ | 2,436 | |||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
Direct operating | 1,408 | (33 | ) | 1,375 | 1,443 | (46 | ) | 1,397 | 1,364 | (36 | ) | 1,328 | 1,351 | (36 | ) | 1,315 | |||||||||||||||||||||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 707 | — | 707 | 726 | (2 | ) | 724 | 589 | (4 | ) | 585 | 587 | (4 | ) | 583 | ||||||||||||||||||||||||||||||||
Selling, general and administrative | 266 | (37 | ) | 229 | 276 | (38 | ) | 238 | 250 | (18 | ) | 232 | 252 | (16 | ) | 236 | |||||||||||||||||||||||||||||||
Interest expense, net | 154 | (16 | ) | 138 | 156 | (12 | ) | 144 | 175 | (17 | ) | 158 | 175 | (17 | ) | 158 | |||||||||||||||||||||||||||||||
Other (income) expense, net | 5 | (3 | ) | 2 | (3 | ) | 12 | 9 | — | (2 | ) | (2 | ) | (1 | ) | — | (1 | ) | |||||||||||||||||||||||||||||
Total expenses | 2,540 | (89 | ) | 2,451 | 2,598 | (86 | ) | 2,512 | 2,378 | (77 | ) | 2,301 | 2,364 | (73 | ) | 2,291 | |||||||||||||||||||||||||||||||
Income (loss) before income taxes | (86 | ) | 89 | 3 | (62 | ) | 86 | 24 | 59 | 77 | 136 | 72 | 73 | 145 | |||||||||||||||||||||||||||||||||
(Provision) benefit for taxes on income (loss) | 16 | (33 | ) | (a) | (17 | ) | (7 | ) | (32 | ) | (a) | (39 | ) | (53 | ) | (27 | ) | (a) | (80 | ) | (54 | ) | 3 | (a) | (51 | ) | |||||||||||||||||||||
Net income (loss) | $ | (70 | ) | $ | 56 | $ | (14 | ) | $ | (69 | ) | $ | 54 | $ | (15 | ) | $ | 6 | $ | 50 | $ | 56 | $ | 18 | $ | 76 | $ | 94 | |||||||||||||||||||
Weighted average number of diluted shares outstanding | 459 | 459 | 459 | 447 | 447 | 447 | 461 | 461 | 461 | 461 | 461 | 461 | |||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share (b) | $ | (0.15 | ) | $ | 0.12 | $ | (0.03 | ) | $ | (0.15 | ) | $ | 0.12 | $ | (0.03 | ) | $ | 0.02 | $ | 0.11 | $ | 0.12 | $ | 0.04 | NR | $ | 0.21 |
(a) Represents a provision for income taxes derived utilizing a normalized income tax rate (37% for 2015 and 2014 and 35% for 2013).
(b) Net income (loss) used in diluted earnings per share calculation includes an adjustment to add back to net income the amount of interest expense on convertible senior notes, net of tax of $1 million, for the quarter ended March 31, 2013.
5
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES
TO EBITDA, CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME BY SEGMENT
Unaudited
Three Months Ended March 31, 2015 | Three Months Ended March 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int'l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | U.S. Car Rental | Int'l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | |||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 35 | $ | 2 | $ | 11 | $ | 12 | $ | (146 | ) | $ | (86 | ) | $ | 94 | $ | (45 | ) | $ | 36 | $ | 11 | $ | (158 | ) | $ | (62 | ) | ||||||||||||||||||
Depreciation and amortization | 472 | 105 | 95 | 117 | 4 | 793 | 479 | 123 | 96 | 113 | 5 | 816 | |||||||||||||||||||||||||||||||||||
Interest, net of interest income | 40 | 15 | 15 | 2 | 82 | 154 | 38 | 20 | 13 | 4 | 81 | 156 | |||||||||||||||||||||||||||||||||||
EBITDA | $ | 547 | $ | 122 | $ | 121 | $ | 131 | $ | (60 | ) | $ | 861 | $ | 611 | $ | 98 | $ | 145 | $ | 128 | $ | (72 | ) | $ | 910 | |||||||||||||||||||||
Car rental fleet depreciation | (421 | ) | (95 | ) | — | (115 | ) | — | (631 | ) | (424 | ) | (113 | ) | — | (111 | ) | — | (648 | ) | |||||||||||||||||||||||||||
Car rental fleet interest | (43 | ) | (15 | ) | — | (3 | ) | — | (61 | ) | (39 | ) | (20 | ) | — | (4 | ) | — | (63 | ) | |||||||||||||||||||||||||||
Car rental fleet debt - related charges | 8 | 2 | — | 1 | — | 11 | 1 | 3 | — | 2 | — | 6 | |||||||||||||||||||||||||||||||||||
Non-cash stock-based employee compensation charges | — | — | — | — | 4 | 4 | — | — | — | — | 8 | 8 | |||||||||||||||||||||||||||||||||||
Restructuring and restructuring related charges | 2 | 2 | 2 | — | 14 | 20 | 11 | 5 | 3 | — | 20 | 39 | |||||||||||||||||||||||||||||||||||
Acquisition related costs and charges | — | — | — | — | — | — | — | — | — | — | 7 | 7 | |||||||||||||||||||||||||||||||||||
Integration expenses | (1 | ) | — | — | — | 1 | — | (2 | ) | — | — | — | 2 | — | |||||||||||||||||||||||||||||||||
Equipment Rental spin-off costs | — | — | 9 | — | — | 9 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Relocation costs | (2 | ) | — | — | — | 2 | — | (2 | ) | — | — | — | 2 | — | |||||||||||||||||||||||||||||||||
Premiums paid on debt | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Impairment charges and asset write-downs | 9 | — | — | — | — | 9 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Other extraordinary, unusual or non-recurring items | 1 | — | — | — | 3 | 4 | (1 | ) | (5 | ) | 1 | — | — | (5 | ) | ||||||||||||||||||||||||||||||||
Corporate EBITDA | $ | 100 | $ | 16 | $ | 132 | $ | 14 | $ | (36 | ) | $ | 226 | $ | 155 | $ | (32 | ) | $ | 149 | $ | 15 | $ | (33 | ) | $ | 254 | ||||||||||||||||||||
Non-fleet depreciation and amortization | (51 | ) | (10 | ) | (95 | ) | (2 | ) | (4 | ) | (162 | ) | (55 | ) | (10 | ) | (96 | ) | (2 | ) | (5 | ) | (168 | ) | |||||||||||||||||||||||
Non-fleet interest, net of interest income | 3 | — | (15 | ) | 1 | (82 | ) | (93 | ) | 1 | — | (13 | ) | — | (81 | ) | (93 | ) | |||||||||||||||||||||||||||||
Non-fleet debt - related charges | — | — | 1 | — | 4 | 5 | — | — | 2 | — | 4 | 6 | |||||||||||||||||||||||||||||||||||
Non-cash stock-based employee compensation charges | — | — | — | — | (4 | ) | (4 | ) | — | — | — | — | (8 | ) | (8 | ) | |||||||||||||||||||||||||||||||
Acquisition accounting | 19 | 2 | 10 | 3 | (3 | ) | 31 | 18 | 3 | 10 | 3 | (1 | ) | 33 | |||||||||||||||||||||||||||||||||
Adjusted Pre-Tax Income (Loss) | $ | 71 | $ | 8 | $ | 33 | $ | 16 | $ | (125 | ) | $ | 3 | $ | 119 | $ | (39 | ) | $ | 52 | $ | 16 | $ | (124 | ) | $ | 24 |
6
Supplemental Schedule III (continued)
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES
TO EBITDA, CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME BY SEGMENT
Three Months Ended March 31, 2013 As Restated | Three Months Ended March 31, 2013 As Reported | ||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int'l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | Consolidated HGH | ||||||||||||||||||||
Income (loss) before income taxes | $ | 204 | $ | (58 | ) | $ | 31 | $ | 9 | $ | (127 | ) | $ | 59 | $ | 72 | |||||||||||
Depreciation and amortization | 338 | 133 | 93 | 107 | 2 | 673 | 669 | ||||||||||||||||||||
Interest, net of interest income | 46 | 26 | 13 | 2 | 88 | 175 | 175 | ||||||||||||||||||||
EBITDA | $ | 588 | $ | 101 | $ | 137 | $ | 118 | $ | (37 | ) | $ | 907 | $ | 916 | ||||||||||||
Car rental fleet depreciation | (285 | ) | (125 | ) | — | (105 | ) | — | (515 | ) | (513 | ) | |||||||||||||||
Car rental fleet interest | (45 | ) | (24 | ) | — | (2 | ) | — | (71 | ) | (71 | ) | |||||||||||||||
Car rental fleet debt - related charges | 2 | 3 | — | — | — | 5 | 5 | ||||||||||||||||||||
Non-cash stock-based employee compensation charges | — | — | — | — | 8 | 8 | 8 | ||||||||||||||||||||
Restructuring and restructuring related charges | 1 | 5 | — | — | 1 | 7 | 8 | ||||||||||||||||||||
Acquisition related costs and charges | — | — | — | — | 3 | 3 | 3 | ||||||||||||||||||||
Integration expenses | 5 | — | — | — | 6 | 11 | 11 | ||||||||||||||||||||
Equipment Rental spin-off costs | — | — | — | — | — | — | — | ||||||||||||||||||||
Relocation costs | — | — | — | — | — | — | — | ||||||||||||||||||||
Premiums paid on debt | — | — | — | — | — | — | — | ||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | — | — | ||||||||||||||||||||
Impairment charges and asset write-downs | — | — | — | — | — | — | — | ||||||||||||||||||||
Other extraordinary, unusual or non-recurring items | 2 | 1 | 3 | — | (2 | ) | 4 | — | |||||||||||||||||||
Corporate EBITDA | $ | 268 | $ | (39 | ) | $ | 140 | $ | 11 | $ | (21 | ) | $ | 359 | $ | 367 | |||||||||||
Non-fleet depreciation and amortization | (53 | ) | (8 | ) | (93 | ) | (2 | ) | (2 | ) | (158 | ) | (156 | ) | |||||||||||||
Non-fleet interest, net of interest income | (1 | ) | (2 | ) | (13 | ) | — | (88 | ) | (104 | ) | (104 | ) | ||||||||||||||
Non-fleet debt - related charges | — | — | 1 | — | 11 | 12 | 12 | ||||||||||||||||||||
Non-cash stock-based employee compensation charges | — | — | — | — | (8 | ) | (8 | ) | (8 | ) | |||||||||||||||||
Acquisition accounting | 18 | 2 | 10 | 4 | 1 | 35 | 34 | ||||||||||||||||||||
Adjusted Pre-Tax Income (Loss) | $ | 232 | $ | (47 | ) | $ | 45 | $ | 13 | $ | (107 | ) | $ | 136 | $ | 145 |
7
Supplemental Schedule IV
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURE - FREE CASH FLOW
Unaudited
Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||||||
(In millions) | 2015 | 2014 | 2013 As Restated | 2013 As Revised | 2013 As Reported | |||||||||||||||
Income before income taxes | $ | (86 | ) | $ | (62 | ) | $ | 59 | $ | 74 | $ | 72 | ||||||||
Depreciation and amortization, non-fleet assets | 86 | 90 | 84 | 81 | 51 | |||||||||||||||
Amortization of debt discount and related charges | 16 | 11 | 17 | 17 | 48 | |||||||||||||||
Cash paid for income taxes | (4 | ) | (14 | ) | (6 | ) | (6 | ) | (6 | ) | ||||||||||
Changes in assets and liabilities, net of effects of acquisitions, and other | 81 | 28 | 20 | 16 | 6 | |||||||||||||||
Net cash provided by operating activities excluding depreciation of revenue earning equipment | 93 | 53 | 174 | 182 | 172 | |||||||||||||||
U.S. car rental fleet growth (a) | (12 | ) | (71 | ) | (318 | ) | NR | NR | ||||||||||||
International car rental fleet growth (a) | 203 | 88 | 168 | NR | NR | |||||||||||||||
Equipment rental fleet growth (a) | 18 | (10 | ) | (41 | ) | NR | NR | |||||||||||||
All other operations rental fleet growth (a) | (38 | ) | (7 | ) | (5 | ) | NR | NR | ||||||||||||
Property and equipment expenditures, net of disposals | (75 | ) | (50 | ) | (54 | ) | (57 | ) | (57 | ) | ||||||||||
Net investment activity | 96 | (50 | ) | (250 | ) | (255 | ) | (251 | ) | |||||||||||
Free cash flow | $ | 189 | $ | 3 | $ | (76 | ) | $ | (73 | ) | $ | (79 | ) |
(a) Historically, fleet growth has not been reported on a segment basis.
8
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURE - FLEET GROWTH
Unaudited
Three Months Ended March 31, 2015 | Three Months Ended March 31, 2014 | Three Months Ended March 31, 2013 As Restated | Three Months Ended March 31, 2013 As Reported | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int'l Car Rental | Worldwide Equipment Rental | All Other Operations | Consolidated HGH | U.S. Car Rental | Int'l Car Rental | Worldwide Equipment Rental | All Other Operations | Consolidated HGH | U.S. Car Rental | Int'l Car Rental | Worldwide Equipment Rental | All Other Operations | Consolidated HGH | Consolidated HGH | |||||||||||||||||||||||||||||||||||||||||||||||
Revenue earning equipment expenditures | $ | (2,444 | ) | $ | (515 | ) | $ | (121 | ) | $ | (358 | ) | $ | (3,438 | ) | $ | (1,589 | ) | $ | (509 | ) | $ | (109 | ) | $ | (375 | ) | $ | (2,582 | ) | $ | (2,385 | ) | $ | (485 | ) | $ | (154 | ) | $ | (230 | ) | $ | (3,254 | ) | $ | (3,253 | ) | |||||||||||||||
Proceeds from disposal of revenue earning equipment | 1,368 | 658 | 62 | 201 | 2,289 | 1,018 | 610 | 21 | 211 | 1,860 | 1,447 | 625 | 39 | 125 | 2,236 | 2,238 | |||||||||||||||||||||||||||||||||||||||||||||||
Net revenue earning equipment capital expenditures | (1,076 | ) | 143 | (59 | ) | (157 | ) | (1,149 | ) | (571 | ) | 101 | (88 | ) | (164 | ) | (722 | ) | (938 | ) | 140 | (115 | ) | (105 | ) | (1,018 | ) | (1,015 | ) | ||||||||||||||||||||||||||||||||||
Depreciation of revenue earning equipment | 421 | 77 | 77 | 113 | 688 | 422 | 95 | 78 | 111 | 706 | 285 | 109 | 74 | 104 | 572 | 572 | |||||||||||||||||||||||||||||||||||||||||||||||
Financing activity related to car rental fleet: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | 2,516 | 245 | — | 83 | 2,844 | 310 | 270 | — | 400 | 980 | 1,543 | 245 | — | — | 1,788 | NR | |||||||||||||||||||||||||||||||||||||||||||||||
Payments | (2,007 | ) | (278 | ) | — | (67 | ) | (2,352 | ) | (631 | ) | (354 | ) | — | (350 | ) | (1,335 | ) | (1,366 | ) | (292 | ) | — | (1 | ) | (1,659 | ) | NR | |||||||||||||||||||||||||||||||||||
Restricted cash changes | 134 | 16 | — | (10 | ) | 140 | 399 | (24 | ) | — | (4 | ) | 371 | 158 | (34 | ) | — | (3 | ) | 121 | NR | ||||||||||||||||||||||||||||||||||||||||||
Net financing activity related to car rental fleet | 643 | (17 | ) | — | 6 | 632 | 78 | (108 | ) | — | 46 | 16 | 335 | (81 | ) | — | (4 | ) | 250 | 250 | |||||||||||||||||||||||||||||||||||||||||||
Fleet growth | $ | (12 | ) | $ | 203 | $ | 18 | $ | (38 | ) | $ | 171 | $ | (71 | ) | $ | 88 | $ | (10 | ) | $ | (7 | ) | $ | — | $ | (318 | ) | $ | 168 | $ | (41 | ) | $ | (5 | ) | $ | (196 | ) | $ | (194 | ) |
9
Supplemental Schedule VI
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS
Unaudited
NET CORPORATE DEBT, NET FLEET DEBT AND TOTAL NET DEBT
As of December 31, 2013 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||
As of March 31, 2015 | As of March 31, 2014 | As Restated | As Reported | |||||||||||||||||||||||||||||||||||||||||||||
(In millions) | Fleet | Corporate | Total | Fleet | Corporate | Total | Fleet | Corporate | Total | Fleet | Corporate | Total | ||||||||||||||||||||||||||||||||||||
Debt | $ | 9,917 | $ | 6,434 | $ | 16,351 | $ | 9,548 | $ | 6,577 | $ | 16,125 | $ | 9,806 | $ | 6,503 | $ | 16,309 | $ | 9,806 | $ | 6,503 | $ | 16,309 | ||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | — | 585 | 585 | — | 498 | 498 | — | 411 | 411 | — | 423 | 423 | ||||||||||||||||||||||||||||||||||||
Restricted cash | 369 | 42 | 411 | 400 | 53 | 453 | 772 | 89 | 861 | 772 | 88 | 860 | ||||||||||||||||||||||||||||||||||||
Net debt | $ | 9,548 | $ | 5,807 | $ | 15,355 | $ | 9,148 | $ | 6,026 | $ | 15,174 | $ | 9,034 | $ | 6,003 | $ | 15,037 | $ | 9,034 | $ | 5,992 | $ | 15,026 |
WORLDWIDE EQUIPMENT RENTAL AND RENTAL RELATED REVENUE
Three Months Ended March 31, | ||||||||||||||||
(In millions) | 2015 | 2014 | 2013 As Restated | 2013 As Reported | ||||||||||||
Equipment rental segment revenues | $ | 355 | $ | 358 | $ | 353 | $ | 351 | ||||||||
Equipment sales and other revenue | (23 | ) | (26 | ) | (30 | ) | (30 | ) | ||||||||
Rental and rental related revenue at actual rates | 332 | 332 | 323 | 321 | ||||||||||||
Foreign currency adjustment (a) | 4 | 2 | (3 | ) | 1 | |||||||||||
Rental and rental related revenue | $ | 336 | $ | 334 | $ | 320 | $ | 322 |
(a) | Amounts shown for 2015 are based on December 31, 2014 foreign exchange rates. Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates. |
10
Supplemental Schedule VI (continued)
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
U.S. Car Rental Segment
Three Months Ended March 31, | ||||||||||||
(In millions, except as noted) | 2015 | 2014 | 2013 As Restated | |||||||||
Total RPD | ||||||||||||
Revenues | $ | 1,520 | $ | 1,557 | $ | 1,484 | ||||||
Advantage sublease revenue | — | — | (20 | ) | ||||||||
Ancillary retail car sales revenue | (12 | ) | (7 | ) | (2 | ) | ||||||
Total rental revenue | $ | 1,508 | $ | 1,550 | $ | 1,462 | ||||||
Transaction days (in thousands) | 32,036 | 32,360 | 30,064 | |||||||||
Total RPD (in whole dollars) | $ | 47.07 | $ | 47.90 | $ | 48.63 | ||||||
Fleet Efficiency | ||||||||||||
Transaction days (in thousands) | 32,036 | 32,360 | 30,064 | |||||||||
Average Fleet | 489,300 | 491,500 | 454,000 | |||||||||
Advantage sublease vehicles | — | (11,000 | ) | (21,100 | ) | |||||||
Hertz 24/7 vehicles | — | (1,000 | ) | (1,000 | ) | |||||||
Average Fleet used to calculate fleet efficiency | 489,300 | 479,500 | 431,900 | |||||||||
Number of days in period | 90 | 90 | 90 | |||||||||
Average fleet multiplied by number of dates in period (in thousands) | 44,037 | 43,155 | 38,871 | |||||||||
Fleet efficiency | 73 | % | 75 | % | 77 | % | ||||||
Net Depreciation Per Unit Per Month | ||||||||||||
Depreciation of revenue earning equipment and lease charges, net (in millions) | $ | 421 | $ | 424 | $ | 285 | ||||||
Average fleet | 489,300 | 491,500 | 454,000 | |||||||||
Depreciation of revenue earning equipment and lease charges, net divided by average fleet (in whole dollars) | $ | 860 | $ | 863 | $ | 628 | ||||||
Number of months in period | 3 | 3 | 3 | |||||||||
Net depreciation per unit per month (in whole dollars) | $ | 287 | $ | 288 | $ | 209 |
11
Supplemental Schedule VI (continued)
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH (continued)
International Car Rental
Three Months Ended March 31, | ||||||||||||
(in millions, except as noted) | 2015 | 2014 | 2013 As Restated | |||||||||
Total RPD | ||||||||||||
Revenues | $ | 436 | $ | 482 | $ | 471 | ||||||
Foreign currency adjustment(a) | 23 | 1 | (6 | ) | ||||||||
Total rental revenue | $ | 459 | $ | 483 | $ | 465 | ||||||
Transaction days (in thousands) | 9,775 | 9,395 | 9,006 | |||||||||
Total RPD (in whole dollars) | $ | 46.96 | $ | 51.41 | $ | 51.63 | ||||||
Fleet Efficiency | ||||||||||||
Transaction days (in thousands) | 9,775 | 9,395 | 9,006 | |||||||||
Average Fleet | 144,000 | 141,400 | 137,500 | |||||||||
Number of days in period | 90 | 90 | 90 | |||||||||
Average fleet multiplied by number of days in period | 12,960 | 12,726 | 12,375 | |||||||||
Fleet efficiency | 75 | % | 74 | % | 73 | % | ||||||
Net Depreciation Per Unit Per Month | ||||||||||||
Depreciation of revenue earning equipment and lease charges, net (in millions) | $ | 95 | $ | 113 | $ | 125 | ||||||
Foreign currency adjustment (in millions)(a) | 5 | — | (1 | ) | ||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net (in millions) | $ | 100 | $ | 113 | $ | 124 | ||||||
Average fleet | 144,000 | 141,400 | 137,500 | |||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet (in whole dollars) | $ | 694 | $ | 799 | $ | 902 | ||||||
Number of months in period | 3 | 3 | 3 | |||||||||
Net depreciation per unit per month (in whole dollars) | $ | 231 | $ | 266 | $ | 301 |
All Car Rental |
Three Months Ended March 31, | |||
(In millions, except as noted) | 2013 As Reported | ||
Revenues | $ | 2,085 | |
Non-rental revenue | (128 | ) | |
Foreign currency adjustment | 2 | ||
Total rental revenue | $ | 1,959 | |
Transaction days (in thousands) | 39,070 | ||
Total RPD (in whole dollars) | $ | 50.14 |
(a) | Amounts shown for 2015 are based on December 31, 2014 foreign exchange rates. Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates. |
12
FINANCIAL INFORMATION AND OPERATING DATA
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
Twelve Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
(In millions, except per share data) | 2014 | 2013 As Restated | 2013 As Revised | |||||||||
Total revenues | $ | 11,046 | $ | 10,775 | $ | 10,772 | ||||||
Expenses: | ||||||||||||
Direct operating | 6,314 | 5,777 | 5,752 | |||||||||
Depreciation of revenue earning equipment and lease charges, net | 3,034 | 2,533 | 2,526 | |||||||||
Selling, general and administrative | 1,088 | 1,053 | 1,022 | |||||||||
Interest expense, net | 648 | 707 | 704 | |||||||||
Other income, net | (15 | ) | 102 | 105 | ||||||||
Total expenses | 11,069 | 10,172 | 10,109 | |||||||||
Income (loss) before income taxes | (23 | ) | 603 | 663 | ||||||||
(Provision) benefit for taxes on income (loss) | (59 | ) | (301 | ) | (317 | ) | ||||||
Net income (loss) | $ | (82 | ) | $ | 302 | $ | 346 | |||||
Weighted average number of shares outstanding: | ||||||||||||
Basic | 454 | 422 | 422 | |||||||||
Diluted | 454 | 464 | 464 | |||||||||
Earnings per share: | ||||||||||||
Basic | $ | (0.18 | ) | $ | 0.72 | $ | 0.82 | |||||
Diluted | $ | (0.18 | ) | $ | 0.67 | $ | 0.76 | |||||
Corporate EBITDA (a) | $ | 1,331 | $ | 2,001 | $ | 2,044 | ||||||
Adjusted pre-tax Income (loss) (a) | 403 | 1,096 | 1,154 |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule III.
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET DATA
(In millions) | As of December 31, 2014 | As of December 31, 2013 As Restated | As of December 31, 2013 As Revised | |||||||||
Cash and cash equivalents | $ | 490 | $ | 411 | $ | 423 | ||||||
Restricted cash | 571 | 861 | 860 | |||||||||
Revenue earning equipment: | ||||||||||||
U.S. Car Rental | 8,070 | 8,629 | 8,629 | |||||||||
International Car Rental | 1,904 | 2,047 | 2,047 | |||||||||
Worldwide Equipment Rental | 2,442 | 2,416 | 2,416 | |||||||||
All Other Operations | 1,237 | 1,099 | 1,101 | |||||||||
Total revenue earning equipment, net | 13,653 | 14,191 | 14,193 | |||||||||
Total assets | 23,985 | 24,423 | 24,588 | |||||||||
Total debt | 15,993 | 16,309 | 16,309 | |||||||||
Net Fleet debt (a) | 9,047 | 9,034 | 9,034 | |||||||||
Net Corporate debt (a) (b) | 5,885 | 6,003 | 5,992 | |||||||||
Total equity | 2,464 | 2,567 | 2,771 |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule VI.
(b) Fleet related to Hertz Equipment Rental Corporation is funded via Corporate Debt.
13
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
Twelve Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
(In millions) | 2014 | 2013 As Restated | 2013 As Reported | |||||||||
Cash provided by (used in): | ||||||||||||
Operating activities | $ | 3,452 | $ | 3,593 | $ | 3,590 | ||||||
Investing activities | (3,183 | ) | (3,850 | ) | (3,839 | ) | ||||||
Financing activities | (159 | ) | 127 | 127 | ||||||||
Effect of exchange rate changes | (31 | ) | — | — | ||||||||
Net change in cash and cash equivalents | $ | 79 | $ | (130 | ) | $ | (122 | ) | ||||
Fleet growth (a) | $ | 104 | $ | (449 | ) | $ | (455 | ) | ||||
Free cash flow (a) | 321 | $ | 446 | 449 |
(a) | Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules IV and V. |
SELECTED UNAUDITED OPERATING DATA BY SEGMENT
Twelve Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
2014 | 2013 As Restated | 2013 As Reported | ||||||||||
U.S. Car Rental | ||||||||||||
Transaction days (in thousands) | 139,752 | 133,181 | 133,181 | |||||||||
Total RPD (a) | $ | 46.07 | $ | 46.94 | $ | 47.00 | ||||||
Average fleet | 499,100 | 490,000 | 490,000 | |||||||||
Fleet efficiency(a) | 77 | % | 78 | % | NR | |||||||
Net depreciation per unit per month(a) | $ | 294 | $ | 218 | NR | |||||||
Program cars as a percentage of total average fleet at period end | 21 | % | 9 | % | NR | |||||||
Adjusted pre-tax income (loss) (in millions) (a) | $ | 387 | $ | 1,033 | $ | 1,091 | ||||||
International Car Rental | ||||||||||||
Transaction days (in thousands) | 46,917 | 45,019 | 45,019 | |||||||||
Total RPD (a)(b) | $ | 52.86 | $ | 53.31 | $ | 53.81 | ||||||
Average Fleet | 166,900 | 161,300 | 161,300 | |||||||||
Fleet efficiency(a) | 77 | % | 76 | % | NR | |||||||
Net depreciation per unit per month(a) | $ | 250 | $ | 275 | NR | |||||||
Program cars as a percentage of total average fleet at period end | 30 | % | 24 | % | NR | |||||||
Adjusted pre-tax income (loss) (in millions) (a) | $ | 144 | $ | 134 | $ | 141 | ||||||
Worldwide Equipment Rental | ||||||||||||
Dollar utilization | 36 | % | 37 | % | NR | |||||||
Time utilization | 64 | % | 65 | % | NR | |||||||
Rental and rental related revenue (in millions) (a)(b) | $ | 1,468 | $ | 1,400 | $ | 1,415 | ||||||
Same store revenue growth, including growth initiatives (b) | 5 | % | 10 | % | 10 | % | ||||||
Adjusted pre-tax income (loss) (in millions) (a) | $ | 258 | $ | 301 | $ | 292 | ||||||
All Other Operations | ||||||||||||
Average fleet — Donlen | 172,800 | 169,600 | 169,600 | |||||||||
Adjusted pre-tax income (loss) (in millions) (a) | $ | 62 | $ | 58 | $ | 57 |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules III and VI.
(b) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
14
SUPPLEMENTAL SCHEDULES AND DEFINITIONS
The following Supplemental Schedules and definitions are provided to present segment results and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules we provide definitions for terminology used throughout these schedules.
Supplemental Schedule I
HERTZ GLOBAL HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
Twelve Months Ended December 31, 2014 | Twelve Months Ended December 31, 2013 As Restated | Twelve Months Ended December 31, 2013 As Reported | |||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | Consolidated HGH | ||||||||||||||||||||||||||||||||||||||
Total revenues: | $ | 6,471 | $ | 2,436 | $ | 1,571 | $ | 568 | $ | — | $ | 11,046 | $ | 6,331 | $ | 2,378 | $ | 1,539 | $ | 527 | $ | — | $ | 10,775 | $ | 10,772 | |||||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Direct operating | 3,921 | 1,491 | 863 | 24 | 15 | 6,314 | 3,531 | 1,407 | 826 | 24 | (11 | ) | 5,777 | 5,752 | |||||||||||||||||||||||||||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 1,758 | 492 | 329 | 455 | — | 3,034 | 1,281 | 528 | 299 | 425 | — | 2,533 | 2,526 | ||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 380 | 259 | 161 | 30 | 258 | 1,088 | 429 | 267 | 131 | 27 | 199 | 1,053 | 1,022 | ||||||||||||||||||||||||||||||||||||||
Interest expense, net | 172 | 95 | 53 | 12 | 316 | 648 | 187 | 113 | 46 | 14 | 347 | 707 | 704 | ||||||||||||||||||||||||||||||||||||||
Other (income) expense, net | (18 | ) | 4 | (5 | ) | 1 | 3 | (15 | ) | 31 | 29 | (4 | ) | 1 | 45 | 102 | 105 | ||||||||||||||||||||||||||||||||||
Total expenses | 6,213 | 2,341 | 1,401 | 522 | 592 | 11,069 | 5,459 | 2,344 | 1,298 | 491 | 580 | 10,172 | 10,109 | ||||||||||||||||||||||||||||||||||||||
Income (loss)before income taxes | $ | 258 | $ | 95 | $ | 170 | $ | 46 | $ | (592 | ) | $ | (23 | ) | $ | 872 | $ | 34 | $ | 241 | $ | 36 | $ | (580 | ) | $ | 603 | $ | 663 | ||||||||||||||||||||||
Provision for taxes on income | (59 | ) | (301 | ) | (317 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | (82 | ) | $ | 302 | $ | 346 |
15
Supplemental Schedule II
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TO ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Twelve Months Ended December 31, 2014 | Twelve Months Ended December 31, 2013 As Restated | Twelve Months Ended December 31, 2013 As Reported | ||||||||||||||||||||||||||||||||||
(In millions, except per share data) | GAAP | Adjust-ments | Adjusted (Non-GAAP) | GAAP | Adjust-ments | Adjusted (Non-GAAP) | GAAP | Adjust-ments | Adjusted (Non-GAAP) | |||||||||||||||||||||||||||
Total revenues | $ | 11,046 | $ | — | $ | 11,046 | $ | 10,775 | $ | — | $ | 10,775 | $ | 10,772 | $ | — | $ | 10,772 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||||||
Direct operating | 6,314 | (222 | ) | (a) | 6,092 | 5,777 | (198 | ) | (a) | 5,579 | 5,752 | (199 | ) | (a) | 5,553 | |||||||||||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 3,034 | (8 | ) | (b) | 3,026 | 2,533 | (13 | ) | (b) | 2,520 | 2,526 | (12 | ) | (b) | 2,514 | |||||||||||||||||||||
Selling, general and administrative | 1,088 | (167 | ) | (c) | 921 | 1,053 | (109 | ) | (c) | 944 | 1,022 | (106 | ) | (c) | 916 | |||||||||||||||||||||
Interest expense, net | 648 | (53 | ) | (d) | 595 | 707 | (68 | ) | (d) | 639 | 704 | (68 | ) | (d) | 636 | |||||||||||||||||||||
Other (income) expense, net | (15 | ) | 24 | (e) | 9 | 102 | (105 | ) | (e) | (3 | ) | 105 | (105 | ) | (e) | — | ||||||||||||||||||||
Total expenses | 11,069 | (426 | ) | 10,643 | 10,172 | (493 | ) | 9,679 | 10,109 | (490 | ) | 9,619 | ||||||||||||||||||||||||
Income (loss) before income taxes | (23 | ) | 426 | 403 | 603 | 493 | 1,096 | 663 | 490 | 1,153 | ||||||||||||||||||||||||||
(Provision) benefit for taxes on income (loss) | (59 | ) | (158 | ) | (f) | (217 | ) | (301 | ) | (173 | ) | (f) | (474 | ) | (317 | ) | (87 | ) | (404 | ) | (f) | |||||||||||||||
Net income (loss) | $ | (82 | ) | $ | 268 | $ | 186 | $ | 302 | $ | 320 | $ | 622 | $ | 346 | $ | 403 | $ | 749 | |||||||||||||||||
Weighted average number of diluted shares outstanding | 454 | 454 | 454 | 464 | 464 | 464 | 464 | 464 | 464 | |||||||||||||||||||||||||||
Diluted earnings (loss) per share (g) | $ | (0.18 | ) | $ | 0.59 | $ | 0.41 | $ | 0.67 | $ | 0.69 | $ | 1.36 | $ | 0.76 | $ | 0.87 | $ | 1.63 |
a. | Primarily represents the increase in amortization of other intangible assets, depreciation of property and equipment and accretion of certain revalued liabilities relating to purchase accounting. For the twelve months ended December 31, 2014 and 2013, also includes restructuring and restructuring related charges of $92 million and $46 million, respectively. |
b. | For the twelve months ended December 31, 2014 and 2013, represents the increase in depreciation of equipment rental revenue earning equipment based upon its revaluation relating to purchase accounting. |
c. | For the twelve months ended December 31, 2014 and 2013, primarily comprised of restructuring and restructuring related charges of $100 million and $53 million, respectively, expenses associated with the anticipated HERC spin-off transaction announced in March 2014 of $39 million and zero, respectively, consulting costs and legal fees related to the accounting review and investigation, expenses associated with acquisitions, integration charges and relocation expenses associated with the Company's relocation of its headquarters to Estero, Florida. |
d. | Represents debt-related charges relating to the amortization of deferred debt financing costs and debt discounts. |
e. | Primarily represents amounts related to a $19 million litigation settlement in 2014. For 2013, primarily represents $40 of impairment charges and asset write-downs, $35 million of debt extinguishment loss and inducement costs, and $29 million of premiums paid and write-offs relating to European debt.Represents a provision for income taxes derived utilizing a normalized income tax rate (37% for 2014 and 35% for 2013). |
f. | Represents a provision for income taxes derived using a normalized income tax rate (37% for 2014 and 35% for 2013). |
g. | Net income (loss) used in diluted earnings per share calculation includes an adjustment to add back to net income the amount of interest expense on convertible senior notes, net of tax of $8 million, for the year ended December 31, 2013. |
16
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES
TO EBITDA, CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME BY SEGMENT
Unaudited
Twelve Months Ended December 31, 2014 | Twelve Months Ended December 31, 2013 As Restated | Twelve Months Ended December 31, 2013 As Reported | |||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | Consolidated HGH | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 258 | $ | 95 | $ | 170 | $ | 46 | $ | (592 | ) | $ | (23 | ) | $ | 872 | $ | 34 | $ | 241 | $ | 36 | $ | (580 | ) | $ | 603 | $ | 663 | ||||||||||||||||||||||
Depreciation and amortization | 1,976 | 533 | 404 | 465 | 22 | 3,400 | 1,489 | 564 | 373 | 436 | 10 | 2,872 | 2,853 | ||||||||||||||||||||||||||||||||||||||
Interest, net of interest income | 172 | 95 | 53 | 12 | 316 | 648 | 187 | 113 | 46 | 14 | 347 | 707 | 704 | ||||||||||||||||||||||||||||||||||||||
EBITDA | $ | 2,406 | $ | 723 | $ | 627 | $ | 523 | $ | (254 | ) | $ | 4,025 | $ | 2,548 | $ | 711 | $ | 660 | $ | 486 | $ | (223 | ) | $ | 4,182 | $ | 4,220 | |||||||||||||||||||||||
Car rental fleet depreciation | (1,758 | ) | (492 | ) | — | (455 | ) | — | (2,705 | ) | (1,281 | ) | (528 | ) | — | (425 | ) | — | (2,234 | ) | (2,227 | ) | |||||||||||||||||||||||||||||
Car rental fleet interest | (178 | ) | (85 | ) | — | (14 | ) | — | (277 | ) | (186 | ) | (102 | ) | — | (14 | ) | — | (302 | ) | (302 | ) | |||||||||||||||||||||||||||||
Car rental fleet debt - related charges (a) | 10 | 15 | — | 6 | — | 31 | 13 | 14 | — | 5 | — | 32 | 32 | ||||||||||||||||||||||||||||||||||||||
Non-cash stock-based employee compensation charges (b) | — | 4 | — | — | 6 | 10 | — | 4 | — | — | 31 | 35 | 35 | ||||||||||||||||||||||||||||||||||||||
Restructuring and restructuring related charges (c) | 55 | 25 | 7 | — | 78 | 165 | 26 | 35 | 10 | — | 28 | 99 | 99 | ||||||||||||||||||||||||||||||||||||||
Acquisition related costs and charges (d) | — | — | — | — | 10 | 10 | — | — | — | — | 19 | 19 | 19 | ||||||||||||||||||||||||||||||||||||||
Integration expenses (d) | 1 | — | — | — | 8 | 9 | 21 | — | — | — | 22 | 43 | 40 | ||||||||||||||||||||||||||||||||||||||
Equipment Rental spin-off costs (e) | — | — | 28 | — | 11 | 39 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Relocation costs (f) | — | — | — | — | 9 | 9 | — | — | — | — | 7 | 7 | 8 | ||||||||||||||||||||||||||||||||||||||
Premiums paid on debt (g) | — | — | — | — | — | — | — | 29 | — | — | — | 29 | 29 | ||||||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt (h) | — | — | — | — | 1 | 1 | — | — | — | — | 35 | 35 | — | ||||||||||||||||||||||||||||||||||||||
Impairment charges and asset write-downs (i) | 10 | — | 10 | — | 14 | 34 | 40 | — | — | — | — | 40 | 44 | ||||||||||||||||||||||||||||||||||||||
Other extraordinary, unusual or non-recurring items (j) | (21 | ) | (2 | ) | — | — | 3 | (20 | ) | (5 | ) | 12 | — | 1 | 8 | 16 | 47 | ||||||||||||||||||||||||||||||||||
Corporate EBITDA | $ | 525 | $ | 188 | $ | 672 | $ | 60 | $ | (114 | ) | $ | 1,331 | $ | 1,176 | $ | 175 | $ | 670 | $ | 53 | $ | (73 | ) | $ | 2,001 | $ | 2,044 | |||||||||||||||||||||||
Non-fleet depreciation and amortization | (218 | ) | (41 | ) | (404 | ) | (10 | ) | (22 | ) | (695 | ) | (208 | ) | (36 | ) | (373 | ) | (11 | ) | (10 | ) | (638 | ) | (626 | ) | |||||||||||||||||||||||||
Non-fleet interest, net of interest income | 6 | (10 | ) | (53 | ) | 2 | (316 | ) | (371 | ) | (1 | ) | (11 | ) | (46 | ) | — | (347 | ) | (405 | ) | (402 | ) | ||||||||||||||||||||||||||||
Non-fleet debt - related charges (a) | 2 | — | 5 | — | 15 | 22 | 1 | — | 5 | 1 | 29 | 36 | 36 | ||||||||||||||||||||||||||||||||||||||
Non-cash stock-based employee compensation charges | — | (4 | ) | — | — | (6 | ) | (10 | ) | — | (4 | ) | — | — | (31 | ) | (35 | ) | (35 | ) | |||||||||||||||||||||||||||||||
Acquisition accounting (k) | 72 | 11 | 38 | 10 | 1 | 132 | 65 | 10 | 40 | 15 | 2 | 132 | 132 | ||||||||||||||||||||||||||||||||||||||
Other (l) | — | — | — | — | (6 | ) | (6 | ) | — | — | 5 | — | — | 5 | 5 | ||||||||||||||||||||||||||||||||||||
Adjusted Pre-Tax Income (Loss) | $ | 387 | $ | 144 | $ | 258 | $ | 62 | $ | (448 | ) | $ | 403 | $ | 1,033 | $ | 134 | $ | 301 | $ | 58 | $ | (430 | ) | $ | 1,096 | $ | 1,154 |
17
(a) | Represents non-cash charges relating to the amortization of deferred debt financing costs and debt discounts. |
(b) | For twelve months ended December 31, 2014, excludes $6 million of stock-based compensation forfeitures included in restructuring and restructuring related charges. |
(c) | Represents expenses incurred under restructuring actions as defined by U.S. GAAP as well as transition costs incurred in connection with our business process outsourcing arrangements and incremental costs incurred to facilitate business process re-engineering initiatives that involve significant organization redesign and extensive operational process changes. Amount in 2014 also includes consulting costs and legal fees related to the accounting review and investigation, one-time costs to terminate certain marketing and co-branding arrangements, and costs associated with the separation of certain executives during the year. |
(d) | Primarily represents Dollar Thrifty integration related expenses. |
(e) | Represents expense associated with the anticipated HERC spin-off transaction of which $28 million were incurred by HERC and $11 million were incurred by Corporate in 2014. |
(f) | Represents non-recurring costs incurred in connection with the relocation of our corporate headquarters to Estero, Florida that were not included in restructuring expenses. Such expenses primarily include duplicate facility rent, certain moving expenses, and other costs that are direct and incremental due to the relocation. |
(g) | In 2013, represents premiums paid to redeem our 8.50% Former European Fleet Notes. |
(h) | In 2013, represents extinguishment of debt for Senior Convertible Notes. |
(i) | For 2014, primarily comprised of impairments related to our former corporate headquarters building in New Jersey and HERC revenue earning equipment held for sale. Additionally, 2014 includes write-downs of assets associated with a terminated business relationship. In 2013, primarily related to a change in the carrying value of the vehicles subleased to FSNA and its former subsidiary, Simply Wheelz. |
(j) | In 2014, primarily comprised of a $19 million litigation settlement received in relation to a class action lawsuit filed against an original equipment manufacturer. In 2013, primarily represents cash premiums of $12 million associated with the conversion of the Senior Convertible Notes. |
(k) | Represents the increase in amortization of other intangible assets, depreciation of property and equipment and accretion of revalued liabilities relating to acquisition accounting. |
(l) | In 2014, represents $6 million of stock-based compensation forfeitures included in restructuring and restructuring related charges. In 2013, represents $5 million of depreciation expense related to HERC. |
18
Supplemental Schedule IV
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURE - FREE CASH FLOW
Unaudited
Twelve Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
(In millions) | 2014 | 2013 As Restated | 2013 As Revised | |||||||||
Income before income taxes | $ | (23 | ) | $ | 603 | $ | 663 | |||||
Depreciation and amortization, non-fleet assets | 366 | 339 | 205 | |||||||||
Amortization of debt discount and related charges | 46 | 68 | 190 | |||||||||
Cash paid for income taxes | (64 | ) | (71 | ) | (71 | ) | ||||||
Changes in assets and liabilities, net of effects of acquisitions, and other | 173 | 202 | 157 | |||||||||
Net cash provided by operating activities excluding depreciation of revenue earning equipment | 498 | 1,141 | 1,144 | |||||||||
U.S. car rental fleet growth (a) | 260 | (500 | ) | (511 | ) | |||||||
International car rental fleet growth (a) | (61 | ) | 243 | 247 | ||||||||
Equipment rental fleet growth (a) | (103 | ) | (235 | ) | (234 | ) | ||||||
All other operations rental fleet growth (a) | 8 | 43 | 43 | |||||||||
Property and equipment expenditures, net of disposals | (281 | ) | (246 | ) | (241 | ) | ||||||
Net investment activity | (177 | ) | (695 | ) | (696 | ) | ||||||
Free cash flow | $ | 321 | $ | 446 | $ | 449 |
(a) Historically, fleet growth has not been reported on a segment basis.
19
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURE - FLEET GROWTH
Unaudited
Twelve Months Ended December 31, 2014 | Twelve Months Ended December 31, 2013 As Restated | Twelve Months Ended December 31, 2013 As Reported | |||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Consolidated HGH | Consolidated HGH | ||||||||||||||||||||||||||||||||
Revenue earning equipment expenditures | $ | (5,965 | ) | $ | (3,103 | ) | $ | (615 | ) | $ | (1,606 | ) | $ | (11,289 | ) | $ | (6,015 | ) | $ | (2,593 | ) | $ | (672 | ) | $ | (1,009 | ) | $ | (10,289 | ) | $ | (10,298 | ) | ||||||||||
Proceeds from disposal of revenue earning equipment | 4,507 | 2,510 | 182 | 1,010 | 8,209 | 4,320 | 2,242 | 138 | 556 | 7,256 | 7,264 | ||||||||||||||||||||||||||||||||
Net revenue earning equipment capital expenditures | (1,458 | ) | (593 | ) | (433 | ) | (596 | ) | (3,080 | ) | (1,695 | ) | (351 | ) | (534 | ) | (453 | ) | (3,033 | ) | (3,034 | ) | |||||||||||||||||||||
Depreciation of revenue earning equipment | 1,758 | 412 | 330 | 455 | 2,955 | 1,279 | 447 | 299 | 425 | 2,450 | 2,445 | ||||||||||||||||||||||||||||||||
Financing activity related to car rental fleet: | |||||||||||||||||||||||||||||||||||||||||||
Borrowings | 2,702 | 1,181 | — | 511 | 4,394 | 5,600 | 2,019 | — | 1,531 | 9,150 | NR | ||||||||||||||||||||||||||||||||
Payments | (3,012 | ) | (1,051 | ) | — | (350 | ) | (4,413 | ) | (5,432 | ) | (1,884 | ) | — | (1,444 | ) | (8,760 | ) | NR | ||||||||||||||||||||||||
Restricted cash changes | 270 | (10 | ) | — | (12 | ) | 248 | (252 | ) | 12 | — | (16 | ) | (256 | ) | NR | |||||||||||||||||||||||||||
Net financing activity related to car rental fleet | (40 | ) | 120 | — | 149 | 229 | (84 | ) | 147 | — | 71 | 134 | 134 | ||||||||||||||||||||||||||||||
Fleet growth | $ | 260 | $ | (61 | ) | $ | (103 | ) | $ | 8 | $ | 104 | $ | (500 | ) | $ | 243 | $ | (235 | ) | $ | 43 | $ | (449 | ) | $ | (455 | ) |
20
Supplemental Schedule VI
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS
Unaudited
NET CORPORATE DEBT, NET FLEET DEBT AND TOTAL NET DEBT
As of December 31, 2013 | As of December 31, 2013 | |||||||||||||||||||||||||||||||||||
As of December 31, 2014 | As Restated | As Revised | ||||||||||||||||||||||||||||||||||
(In millions) | Fleet | Corporate | Total | Fleet | Corporate | Total | Fleet | Corporate | Total | |||||||||||||||||||||||||||
Debt | $ | 9,562 | $ | 6,431 | $ | 15,993 | $ | 9,806 | $ | 6,503 | $ | 16,309 | $ | 9,806 | $ | 6,503 | $ | 16,309 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | — | 490 | 490 | — | 411 | 411 | — | 423 | 423 | |||||||||||||||||||||||||||
Restricted cash | 515 | 56 | 571 | 772 | 89 | 861 | 772 | 88 | 860 | |||||||||||||||||||||||||||
Net debt | $ | 9,047 | $ | 5,885 | $ | 14,932 | $ | 9,034 | $ | 6,003 | $ | 15,037 | $ | 9,034 | $ | 5,992 | $ | 15,026 |
WORLDWIDE EQUIPMENT RENTAL AND RENTAL RELATED REVENUE
Twelve Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
(In millions) | 2014 | 2013 As Restated | 2013 As Reported | |||||||||
Equipment rental segment revenues | $ | 1,571 | $ | 1,539 | $ | 1,538 | ||||||
Equipment sales and other revenue | (115 | ) | (132 | ) | (132 | ) | ||||||
Rental and rental related revenue at actual rates | 1,456 | 1,407 | 1,406 | |||||||||
Foreign currency adjustment(a) | 12 | (7 | ) | 9 | ||||||||
Rental and rental related revenue | $ | 1,468 | $ | 1,400 | $ | 1,415 |
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
21
Supplemental Schedule VI
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
U.S. Car Rental Segment
Twelve Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
(In millions, except as noted) | 2014 | 2013 As Restated | 2013 As Reported | |||||||||
Total RPD | ||||||||||||
Revenues | $ | 6,471 | $ | 6,331 | $ | 6,324 | ||||||
Advantage sublease revenue | — | (65 | ) | (65 | ) | |||||||
Ancillary retail car sales revenue | (32 | ) | (14 | ) | — | |||||||
Total rental revenue | $ | 6,439 | $ | 6,252 | $ | 6,259 | ||||||
Transaction days (in thousands) | 139,752 | 133,181 | 133,181 | |||||||||
Total RPD (in whole dollars) | $ | 46.07 | $ | 46.94 | $ | 47.00 | ||||||
Fleet Efficiency | ||||||||||||
Transaction days (in thousands) | 139,752 | 133,181 | ||||||||||
Average Fleet | 499,100 | 490,000 | ||||||||||
Advantage sublease vehicles | (4,000 | ) | (21,000 | ) | ||||||||
Hertz 24/7 vehicles | (1,000 | ) | (2,000 | ) | ||||||||
Average Fleet used to calculate fleet efficiency | 494,100 | 467,000 | ||||||||||
Number of days in period | 365 | 365 | ||||||||||
Average fleet multiplied by number of days in period (in thousands) | 180,347 | 170,455 | ||||||||||
Fleet efficiency | 77 | % | 78 | % | ||||||||
Net Depreciation Per Unit Per Month | ||||||||||||
Depreciation of revenue earning equipment and lease charges, net (in millions) | $ | 1,758 | $ | 1,281 | ||||||||
Average fleet | 499,100 | 490,000 | ||||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet (in whole dollars) | $ | 3,522 | $ | 2,614 | ||||||||
Number of months in period | 12 | 12 | ||||||||||
Net depreciation per unit per month (in whole dollars) | $ | 294 | $ | 218 |
22
International Car Rental
Twelve Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
(in millions, except as noted) | 2014 | 2013 As Restated | 2013 As Reported | |||||||||
Total RPD | ||||||||||||
Revenues | $ | 2,436 | $ | 2,378 | $ | 2,383 | ||||||
Foreign currency adjustment (a) | 44 | 22 | 40 | |||||||||
Total rental revenue | $ | 2,480 | $ | 2,400 | $ | 2,423 | ||||||
Transaction days (in thousands) | 46,917 | 45,019 | 45,019 | |||||||||
Total RPD (in whole dollars) | $ | 52.86 | $ | 53.31 | $ | 53.81 | ||||||
Fleet Efficiency | ||||||||||||
Transaction days (in thousands) | 46,917 | 45,019 | ||||||||||
Average Fleet | 166,900 | 161,300 | ||||||||||
Number of days in period | 365 | 365 | ||||||||||
Average fleet multiplied by number of days in period | 60,919 | 58,875 | ||||||||||
Fleet efficiency | 77 | % | 76 | % | ||||||||
Net Depreciation Per Unit Per Month | ||||||||||||
Depreciation of revenue earning equipment and lease charges, net (in millions) | $ | 492 | $ | 528 | ||||||||
Foreign currency adjustment (in millions) (a) | 9 | 4 | ||||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net (in millions) | $ | 501 | $ | 532 | ||||||||
Average fleet | 166,900 | 161,300 | ||||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet (in whole dollars) | $ | 3,002 | $ | 3,298 | ||||||||
Number of months in period | 12 | 12 | ||||||||||
Net depreciation per unit per month (in whole dollars) | $ | 250 | $ | 275 |
(a) | Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates. |
23
FINANCIAL INFORMATION AND OPERATING DATA
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
Three Months Ended December 31, | Three Months Ended December 31, | |||||||||||||||
(In millions, except per share data) | 2014 | 2013 As Restated | 2013 As Revised | 2013 As Reported | ||||||||||||
Total revenues | $ | 2,559 | $ | 2,555 | $ | 2,556 | $ | 2,556 | ||||||||
Expenses: | ||||||||||||||||
Direct operating | 1,575 | 1,449 | 1,439 | 1,439 | ||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 853 | 641 | 643 | 643 | ||||||||||||
Selling, general and administrative | 245 | 234 | 222 | 222 | ||||||||||||
Interest expense, net | 164 | 171 | 169 | 169 | ||||||||||||
Other income, net | 6 | 21 | 21 | 21 | ||||||||||||
Total expenses | 2,843 | 2,516 | 2,494 | 2,494 | ||||||||||||
Income (loss) before income taxes | (284 | ) | 39 | 62 | 62 | |||||||||||
(Provision) benefit for taxes on income (loss) | 50 | (57 | ) | (63 | ) | (63 | ) | |||||||||
Net income (loss) | $ | (234 | ) | $ | (18 | ) | $ | (1 | ) | $ | (1 | ) | ||||
Weighted average number of shares outstanding: | ||||||||||||||||
Basic | 459 | 447 | 447 | 447 | ||||||||||||
Diluted | 459 | 447 | 464 | 464 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | (0.51 | ) | $ | (0.04 | ) | $ | — | $ | — | ||||||
Diluted | $ | (0.51 | ) | $ | (0.04 | ) | $ | — | $ | — | ||||||
Corporate EBITDA (a) | $ | 76 | $ | 388 | NR | $ | 406 | |||||||||
Adjusted pre-tax Income (loss) (a) | (161 | ) | 157 | NR | 186 |
(a) | Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule III. |
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET DATA
(In millions) | As of December 31, 2014 | As of December 31, 2013 As Restated | As of December 31, 2013 As Revised | |||||||||
Cash and cash equivalents | $ | 490 | $ | 411 | $ | 423 | ||||||
Restricted cash | 571 | 861 | 860 | |||||||||
Revenue earning equipment: | ||||||||||||
U.S. Car Rental | 8,070 | 8,629 | 8,629 | |||||||||
International Car Rental | 1,904 | 2,047 | 2,047 | |||||||||
Worldwide Equipment Rental | 2,442 | 2,416 | 2,416 | |||||||||
All Other Operations | 1,237 | 1,099 | 1,101 | |||||||||
Total revenue earning equipment, net | 13,653 | 14,191 | 14,193 | |||||||||
Total assets | 23,985 | 24,423 | 24,588 | |||||||||
Total debt | 15,993 | 16,309 | 16,309 | |||||||||
Net Fleet debt (a) | 9,047 | 9,034 | 9,034 | |||||||||
Net Corporate debt (a) (b) | 5,885 | 6,003 | 5,992 | |||||||||
Total equity | 2,464 | 2,567 | 2,771 |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule VI.
(b) Fleet related to Hertz Equipment Rental Corporation is funded via Corporate Debt.
24
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
Twelve Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
(In millions) | 2014 | 2013 As Restated | 2013 As Revised | |||||||||
Cash provided by (used in): | ||||||||||||
Operating activities | $ | 3,452 | $ | 3,593 | $ | 3,590 | ||||||
Investing activities | (3,183 | ) | (3,850 | ) | (3,839 | ) | ||||||
Financing activities | (159 | ) | 127 | 127 | ||||||||
Effect of exchange rate changes | (31 | ) | — | — | ||||||||
Net change in cash and cash equivalents | $ | 79 | $ | (130 | ) | $ | (122 | ) | ||||
Fleet growth (a) | $ | 104 | $ | (449 | ) | $ | (455 | ) | ||||
Free cash flow (a) | 321 | 446 | 449 |
(a) | Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules IV and V. |
SELECTED UNAUDITED OPERATING DATA BY SEGMENT
Three Months Ended December 31, | Three Months Ended December 31, | |||||||||||
2014 | 2013 As Restated | 2013 As Reported | ||||||||||
U.S. Car Rental | ||||||||||||
Transaction days (in thousands) | 33,595 | 32,875 | 32,875 | |||||||||
Total RPD (a) | $ | 43.85 | $ | 44.75 | $ | 44.91 | ||||||
Average fleet | 486,900 | 490,200 | 490,200 | |||||||||
Fleet efficiency(a) | 75 | % | 76 | % | NR | |||||||
Net depreciation per unit per month(a) | $ | 365 | $ | 229 | NR | |||||||
Program cars as a percentage of total average fleet at period end | 21 | % | 9 | % | NR | |||||||
Adjusted pre-tax income (loss) (in millions) (a) | $ | (126 | ) | $ | 132 | $ | 170 | |||||
International Car Rental | ||||||||||||
Transaction days (in thousands) | 10,734 | 10,473 | 10,473 | |||||||||
Total RPD (a)(b) | $ | 51.70 | $ | 51.85 | $ | 52.49 | ||||||
Average Fleet | 156,700 | 155,700 | 155,700 | |||||||||
Fleet efficiency(a) | 74 | % | 73 | % | NR | |||||||
Net depreciation per unit per month(a) | $ | 225 | $ | 225 | NR | |||||||
Program cars as a percentage of total average fleet at period end | 30 | % | 24 | % | NR | |||||||
Adjusted pre-tax income (loss) (in millions) (a) | $ | (12 | ) | $ | 21 | $ | 15 | |||||
Worldwide Equipment Rental | ||||||||||||
Dollar utilization | 38 | % | 38 | % | NR | |||||||
Time utilization | 67 | % | 66 | % | NR | |||||||
Rental and rental related revenue (in millions) (a)(b) | $ | 394 | $ | 366 | $ | 370 | ||||||
Same store revenue growth, including growth initiatives (a)(b) | 5 | % | 5 | % | 5 | % | ||||||
Adjusted pre-tax income (loss) (in millions) (a) | $ | 60 | $ | 93 | $ | 85 | ||||||
All Other Operations | ||||||||||||
Average fleet — Donlen | 166,800 | 173,800 | 173,800 | |||||||||
Adjusted pre-tax income (loss) (in millions) (a) | $ | 15 | $ | 16 | $ | 15 |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules III and VI.
(b) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
25
SUPPLEMENTAL SCHEDULES AND DEFINITIONS
The following Supplemental Schedules and definitions are provided to present segment results and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules we provide definitions for terminology used throughout these schedules.
Supplemental Schedule I
HERTZ GLOBAL HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
Three Months Ended December 31, 2014 | Three Months Ended December 31, 2013 As Restated | Three Months Ended December 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | As Revised Consolidated HGH | As Reported Consolidated HGH | |||||||||||||||||||||||||||||||||||||||||
Total revenues: | $ | 1,482 | $ | 518 | $ | 416 | $ | 143 | $ | — | $ | 2,559 | $ | 1,475 | $ | 544 | $ | 401 | $ | 135 | $ | — | $ | 2,555 | $ | 2,556 | $ | 2,556 | |||||||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct operating | 982 | 342 | 232 | 6 | 13 | 1,575 | 888 | 337 | 214 | 6 | 4 | 1,449 | 1,439 | 1,439 | |||||||||||||||||||||||||||||||||||||||||
Depreciation of revenue earning equipment and lease charges,net | 533 | 112 | 94 | 114 | — | 853 | 337 | 119 | 76 | 109 | — | 641 | 643 | 643 | |||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 71 | 62 | 47 | 7 | 58 | 245 | 101 | 60 | 33 | 6 | 34 | 234 | 222 | 222 | |||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 47 | 22 | 15 | 3 | 77 | 164 | 49 | 28 | 9 | 3 | 82 | 171 | 169 | 169 | |||||||||||||||||||||||||||||||||||||||||
Other (income) expense, net | 13 | 2 | (2 | ) | 1 | (8 | ) | 6 | (12 | ) | 29 | (1 | ) | 2 | 3 | 21 | 21 | 21 | |||||||||||||||||||||||||||||||||||||
Total expenses | 1,646 | 540 | 386 | 131 | 140 | 2,843 | 1,363 | 573 | 331 | 126 | 123 | 2,516 | 2,494 | 2,494 | |||||||||||||||||||||||||||||||||||||||||
Income (loss)before income taxes | $ | (164 | ) | $ | (22 | ) | $ | 30 | $ | 12 | $ | (140 | ) | $ | (284 | ) | $ | 112 | $ | (29 | ) | $ | 70 | $ | 9 | $ | (123 | ) | $ | 39 | $ | 62 | $ | 62 | |||||||||||||||||||||
Provision for taxes on income | 50 | (57 | ) | (63 | ) | (63 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | (234 | ) | $ | (18 | ) | $ | (1 | ) | $ | (1 | ) |
26
Supplemental Schedule II
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TO ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Three Months Ended December 31, 2014 | Three Months Ended December 31, 2013 As Restated | Three Months Ended December 31, 2013 As Reported | ||||||||||||||||||||||||||||||||||
(In millions, except per share data) | GAAP | Adjust-ments | Adjusted (Non-GAAP) | GAAP | Adjust-ments | Adjusted (Non-GAAP) | GAAP | Adjust-ments | Adjusted (Non-GAAP) | |||||||||||||||||||||||||||
Total revenues | $ | 2,559 | $ | — | $ | 2,559 | $ | 2,555 | $ | — | $ | 2,555 | $ | 2,556 | $ | — | $ | 2,556 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||||||
Direct operating | 1,575 | (56 | ) | 1,519 | 1,449 | (60 | ) | 1,389 | 1,439 | (62 | ) | 1,377 | ||||||||||||||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 853 | — | 853 | 641 | (4 | ) | 637 | 643 | (4 | ) | 639 | |||||||||||||||||||||||||
Selling, general and administrative | 245 | (52 | ) | 193 | 234 | (20 | ) | 214 | 222 | (21 | ) | 201 | ||||||||||||||||||||||||
Interest expense, net | 164 | (14 | ) | 150 | 171 | (15 | ) | 156 | 169 | (14 | ) | 155 | ||||||||||||||||||||||||
Other (income) expense, net | 6 | (1 | ) | 5 | 21 | (19 | ) | 2 | 21 | (23 | ) | (2 | ) | |||||||||||||||||||||||
Total expenses | 2,843 | (123 | ) | 2,720 | 2,516 | (118 | ) | 2,398 | 2,494 | (124 | ) | 2,370 | ||||||||||||||||||||||||
Income (loss) before income taxes | (284 | ) | 123 | (161 | ) | 39 | 118 | 157 | 62 | 124 | 186 | |||||||||||||||||||||||||
(Provision) benefit for taxes on income (loss) | 50 | (46 | ) | (a) | 4 | (57 | ) | (41 | ) | (a) | (98 | ) | (63 | ) | (2 | ) | (65 | ) | (a) | |||||||||||||||||
Net income (loss) | $ | (234 | ) | $ | 77 | $ | (157 | ) | $ | (18 | ) | $ | 77 | $ | 59 | $ | (1 | ) | $ | 122 | $ | 121 | ||||||||||||||
Weighted average number of diluted shares outstanding | 459 | 459 | 459 | 447 | 447 | 447 | 464 | 464 | 464 | |||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | (0.51 | ) | $ | 0.17 | $ | (0.34 | ) | $ | (0.04 | ) | $ | 0.17 | $ | 0.13 | $ | — | $ | 0.26 | $ | 0.26 |
a. | Represents a provision for income taxes derived utilizing a normalized income tax rate (37% for 2014 and 35% for 2013). |
27
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES
TO EBITDA, CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME BY SEGMENT
Unaudited
Three Months Ended December 31, 2014 | Three Months Ended December 31, 2013 As Restated | Three Months Ended December 31, 2013 As Reported | |||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | Consolidated HGH | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | (164 | ) | $ | (22 | ) | $ | 30 | $ | 12 | $ | (140 | ) | $ | (284 | ) | $ | 112 | $ | (29 | ) | $ | 70 | $ | 9 | $ | (123 | ) | $ | 39 | $ | 62 | |||||||||||||||||||
Depreciation and amortization | 588 | 122 | 113 | 117 | 7 | 947 | 392 | 131 | 94 | 111 | 3 | 731 | 729 | ||||||||||||||||||||||||||||||||||||||
Interest, net of interest income | 47 | 22 | 15 | 3 | 77 | 164 | 49 | 28 | 9 | 3 | 82 | 171 | 169 | ||||||||||||||||||||||||||||||||||||||
EBITDA | $ | 471 | $ | 122 | $ | 158 | $ | 132 | $ | (56 | ) | $ | 827 | $ | 553 | $ | 130 | $ | 173 | $ | 123 | $ | (38 | ) | $ | 941 | $ | 960 | |||||||||||||||||||||||
Car rental fleet depreciation | (533 | ) | (112 | ) | — | (114 | ) | — | (759 | ) | (337 | ) | (119 | ) | — | (109 | ) | — | (565 | ) | (567 | ) | |||||||||||||||||||||||||||||
Car rental fleet interest | (49 | ) | (20 | ) | — | (3 | ) | — | (72 | ) | (51 | ) | (25 | ) | — | (3 | ) | — | (79 | ) | (79 | ) | |||||||||||||||||||||||||||||
Car rental fleet debt - related charges (a) | 5 | 3 | — | 1 | — | 9 | 8 | 4 | — | 1 | — | 13 | 13 | ||||||||||||||||||||||||||||||||||||||
Non-cash stock-based employee compensation charges (b) | — | 4 | — | — | (14 | ) | (10 | ) | — | 4 | — | — | 2 | 6 | 4 | ||||||||||||||||||||||||||||||||||||
Restructuring and restructuring related charges (c) | 12 | 3 | — | — | 24 | 39 | 5 | 9 | 8 | — | 4 | 26 | 27 | ||||||||||||||||||||||||||||||||||||||
Acquisition related costs and charges (d) | — | — | — | — | — | — | — | — | — | — | 5 | 5 | 5 | ||||||||||||||||||||||||||||||||||||||
Integration expenses (d) | — | — | — | — | 1 | 1 | 9 | — | — | — | 5 | 14 | 11 | ||||||||||||||||||||||||||||||||||||||
Equipment Rental spin-off costs (e) | — | — | 11 | — | 1 | 12 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Relocation costs (f) | — | — | — | — | 2 | 2 | (1 | ) | — | — | — | 3 | 2 | 3 | |||||||||||||||||||||||||||||||||||||
Premiums paid on debt (g) | — | — | — | — | — | — | — | 29 | — | — | — | 29 | 29 | ||||||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt (h) | — | — | — | — | — | — | — | — | — | — | 7 | 7 | — | ||||||||||||||||||||||||||||||||||||||
Impairment charges and asset write-downs (i) | — | — | 10 | — | 14 | 24 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Other extraordinary, unusual or non-recurring items | — | 1 | (1 | ) | — | 3 | 3 | (13 | ) | 5 | — | 2 | (5 | ) | (11 | ) | — | ||||||||||||||||||||||||||||||||||
Corporate EBITDA | $ | (94 | ) | $ | 1 | $ | 178 | $ | 16 | $ | (25 | ) | $ | 76 | $ | 173 | $ | 37 | $ | 181 | $ | 14 | $ | (17 | ) | $ | 388 | $ | 406 | ||||||||||||||||||||||
Non-fleet depreciation and amortization | (55 | ) | (10 | ) | (113 | ) | (3 | ) | (7 | ) | (188 | ) | (55 | ) | (12 | ) | (94 | ) | (2 | ) | (3 | ) | (166 | ) | (162 | ) | |||||||||||||||||||||||||
Non-fleet interest, net of interest income | 2 | (2 | ) | (15 | ) | — | (77 | ) | (92 | ) | 2 | (3 | ) | (9 | ) | — | (82 | ) | (92 | ) | (90 | ) | |||||||||||||||||||||||||||||
Non-fleet debt - related charges (a) | 1 | — | 1 | — | 3 | 5 | — | — | 2 | 1 | (1 | ) | 2 | 1 | |||||||||||||||||||||||||||||||||||||
Non-cash stock-based employee compensation charges | — | (4 | ) | — | — | 14 | 10 | — | (4 | ) | — | — | (2 | ) | (6 | ) | (4 | ) | |||||||||||||||||||||||||||||||||
Acquisition accounting (j) | 20 | 3 | 9 | 2 | — | 34 | 12 | 3 | 10 | 3 | — | 28 | 33 | ||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | (6 | ) | (6 | ) | — | — | 3 | — | — | 3 | 2 | ||||||||||||||||||||||||||||||||||||
Adjusted Pre-Tax Income (Loss) | $ | (126 | ) | $ | (12 | ) | $ | 60 | $ | 15 | $ | (98 | ) | $ | (161 | ) | $ | 132 | $ | 21 | $ | 93 | $ | 16 | $ | (105 | ) | $ | 157 | $ | 186 |
28
Supplemental Schedule IV
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURE - FREE CASH FLOW
Unaudited
Twelve Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
(In millions) | 2,014 | 2013 As Restated | 2013 As Revised | |||||||||
Income before income taxes | $ | (23 | ) | $ | 603 | $ | 663 | |||||
Depreciation and amortization, non-fleet assets | 366 | 339 | 206 | |||||||||
Amortization of debt discount and related charges | 46 | 68 | 190 | |||||||||
Cash paid for income taxes | (64 | ) | (71 | ) | (71 | ) | ||||||
Changes in assets and liabilities, net of effects of acquisitions, and other | 173 | 202 | 157 | |||||||||
Net cash provided by operating activities excluding depreciation of revenue earning equipment | 498 | 1,141 | 1,145 | |||||||||
U.S. car rental fleet growth (a) | 260 | (500 | ) | (511 | ) | |||||||
International car rental fleet growth (a) | (61 | ) | 243 | 247 | ||||||||
Equipment rental fleet growth (a) | (103 | ) | (235 | ) | (234 | ) | ||||||
All other operations rental fleet growth (a) | 8 | 43 | 43 | |||||||||
Property and equipment expenditures, net of disposals | (281 | ) | (246 | ) | (241 | ) | ||||||
Net investment activity | (177 | ) | (695 | ) | (696 | ) | ||||||
Free cash flow | $ | 321 | $ | 446 | $ | 449 |
(a) Historically, fleet growth has not been reported on a segment basis.
29
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURE - FLEET GROWTH
Unaudited
Twelve Months Ended December 31, 2014 | Twelve Months Ended December 31, 2013 As Restated | Twelve Months Ended December 31, 2013 As Reported | |||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Consolidated HGH | Consolidated HGH | ||||||||||||||||||||||||||||||||
Revenue earning equipment expenditures | $ | (5,965 | ) | $ | (3,103 | ) | $ | (615 | ) | $ | (1,606 | ) | $ | (11,289 | ) | $ | (6,015 | ) | $ | (2,593 | ) | $ | (672 | ) | $ | (1,009 | ) | $ | (10,289 | ) | $ | (10,298 | ) | ||||||||||
Proceeds from disposal of revenue earning equipment | 4,507 | 2,510 | 182 | 1,010 | 8,209 | 4,320 | 2,242 | 138 | 556 | 7,256 | 7,264 | ||||||||||||||||||||||||||||||||
Net revenue earning equipment capital expenditures | (1,458 | ) | (593 | ) | (433 | ) | (596 | ) | (3,080 | ) | (1,695 | ) | (351 | ) | (534 | ) | (453 | ) | (3,033 | ) | (3,034 | ) | |||||||||||||||||||||
Depreciation of revenue earning equipment | 1,758 | 412 | 330 | 455 | 2,955 | 1,279 | 447 | 299 | 425 | 2,450 | 2,445 | ||||||||||||||||||||||||||||||||
Financing activity related to car rental fleet: | |||||||||||||||||||||||||||||||||||||||||||
Borrowings | 2,702 | 1,181 | — | 511 | 4,394 | 5,600 | 2,019 | — | 1,531 | 9,150 | NR | ||||||||||||||||||||||||||||||||
Payments | (3,012 | ) | (1,051 | ) | — | (350 | ) | (4,413 | ) | (5,432 | ) | (1,884 | ) | — | (1,444 | ) | (8,760 | ) | NR | ||||||||||||||||||||||||
Restricted cash changes | 270 | (10 | ) | — | (12 | ) | 248 | (252 | ) | 12 | — | (16 | ) | (256 | ) | NR | |||||||||||||||||||||||||||
Net financing activity related to car rental fleet | (40 | ) | 120 | — | 149 | 229 | (84 | ) | 147 | — | 71 | 134 | 134 | ||||||||||||||||||||||||||||||
Fleet growth | $ | 260 | $ | (61 | ) | $ | (103 | ) | $ | 8 | $ | 104 | $ | (500 | ) | $ | 243 | $ | (235 | ) | $ | 43 | $ | (449 | ) | $ | (455 | ) |
30
Supplemental Schedule VI
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS
Unaudited
NET CORPORATE DEBT, NET FLEET DEBT AND TOTAL NET DEBT
As of December 31, 2013 | As of December 31, 2013 | ||||||||||||||||||||||||||||||||||
As of December 31, 2014 | As Restated | As Revised | |||||||||||||||||||||||||||||||||
(In millions) | Fleet | Corporate | Total | Fleet | Corporate | Total | Fleet | Corporate | Total | ||||||||||||||||||||||||||
Debt | $ | 9,562 | $ | 6,431 | $ | 15,993 | $ | 9,806 | $ | 6,503 | $ | 16,309 | $ | 9,806 | $ | 6,503 | $ | 16,309 | |||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||||
Cash and cash equivalents | — | 490 | 490 | — | 411 | 411 | — | 423 | 423 | ||||||||||||||||||||||||||
Restricted cash | 515 | 56 | 571 | 772 | 89 | 861 | 772 | 88 | 860 | ||||||||||||||||||||||||||
Net debt | $ | 9,047 | $ | 5,885 | $ | 14,932 | $ | 9,034 | $ | 6,003 | $ | 15,037 | $ | 9,034 | $ | 5,992 | $ | 15,026 |
WORLDWIDE EQUIPMENT RENTAL AND RENTAL RELATED REVENUE
Three Months Ended December 31, | Three Months Ended December 31, | |||||||||||
(In millions) | 2014 | 2013 As Restated | 2013 As Revised | |||||||||
Equipment rental segment revenues | $ | 416 | $ | 401 | $ | 401 | ||||||
Equipment sales and other revenue | (28 | ) | (34 | ) | (34 | ) | ||||||
Rental and rental related revenue at actual rates | 388 | 367 | 367 | |||||||||
Foreign currency adjustment (a) | 6 | (1 | ) | 3 | ||||||||
Rental and rental related revenue | $ | 394 | $ | 366 | $ | 370 |
(a) | Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates. |
31
Supplemental Schedule VI (continued)
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
U.S. Car Rental Segment
Three Months Ended December 31, | Three Months Ended December 31, | |||||||||||
(In millions, except as noted) | 2014 | 2013 As Restated | 2013 As Reported | |||||||||
Total RPD | ||||||||||||
Revenues | $ | 1,482 | $ | 1,475 | $ | 1,476 | ||||||
Advantage sublease revenue | — | — | — | |||||||||
Ancillary retail car sales revenue | (9 | ) | (4 | ) | — | |||||||
Total rental revenue | $ | 1,473 | $ | 1,471 | $ | 1,476 | ||||||
Transaction days (in thousands) | 33,595 | 32,875 | 32,875 | |||||||||
Total RPD (in whole dollars) | $ | 43.85 | $ | 44.75 | $ | 44.91 | ||||||
Fleet Efficiency | ||||||||||||
Transaction days (in thousands) | 33,595 | 32,875 | ||||||||||
Average Fleet | 486,900 | 490,200 | ||||||||||
Advantage sublease vehicles | — | (18,000 | ) | |||||||||
Hertz 24/7 vehicles | — | (2,000 | ) | |||||||||
Average Fleet used to calculate fleet efficiency | 486,900 | 470,200 | ||||||||||
Number of days in period | 92 | 92 | ||||||||||
Average fleet multiplied by number of days in period (in thousands) | $ | 44,795 | $ | 43,258 | ||||||||
Fleet efficiency | 75 | % | 76 | % | ||||||||
Net Depreciation Per Unit Per Month | ||||||||||||
Depreciation of revenue earning equipment and lease charges, net (in millions) | $ | 533 | $ | 337 | ||||||||
Average fleet | 486,900 | 490,200 | ||||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet | $ | 1,095 | $ | 687 | ||||||||
Number of months in period | 3 | 3 | ||||||||||
Net depreciation per unit per month | $ | 365 | $ | 229 |
32
Supplemental Schedule VI (continued)
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH (continued)
International Car Rental
Three Months Ended December 31, | Three Months Ended December 31, | |||||||||||
(in millions, except as noted) | 2014 | 2013 As Restated | 2013 As Reported | |||||||||
Total RPD | ||||||||||||
Revenues | $ | 518 | $ | 544 | $ | 544 | ||||||
Foreign currency adjustment (a) | 37 | (1 | ) | 6 | ||||||||
Total rental revenue | $ | 555 | $ | 543 | $ | 550 | ||||||
Transaction days (in thousands) | 10,734 | 10,473 | 10,473 | |||||||||
Total RPD (in whole dollars) | $ | 51.70 | $ | 51.85 | $ | 52.49 | ||||||
Fleet Efficiency | ||||||||||||
Transaction days (in thousands) | 10,734 | 10,473 | ||||||||||
Average Fleet | 156,700 | 155,700 | ||||||||||
Number of days in period | 92 | 92 | ||||||||||
Average fleet multiplied by number of days in period | 14,416 | 14,324 | ||||||||||
Fleet efficiency | 74 | % | 73 | % | ||||||||
Net Depreciation Per Unit Per Month | ||||||||||||
Depreciation of revenue earning equipment and lease charges, net (in millions) | $ | 112 | $ | 119 | ||||||||
Foreign currency adjustment (in millions) (a) | 8 | — | ||||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net (in millions) | $ | 120 | $ | 119 | ||||||||
Average fleet | 156,700 | 155,700 | ||||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet | $ | 766 | $ | 764 | ||||||||
Number of months in period | 3 | 3 | ||||||||||
Net depreciation per unit per month | $ | 255 | $ | 255 |
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
33
FINANCIAL INFORMATION AND OPERATING DATA
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||
(In millions, except per share data) | 2014 | 2013 As Restated | 2013 As Revised | 2013 As Reported | ||||||||||||
Total revenues | $ | 3,121 | $ | 3,075 | $ | 3,070 | $ | 3,070 | ||||||||
Expenses: | ||||||||||||||||
Direct operating | 1,702 | 1,547 | 1,540 | 1,525 | ||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 746 | 672 | 675 | 677 | ||||||||||||
Selling, general and administrative | 303 | 282 | 272 | 278 | ||||||||||||
Interest expense, net | 164 | 179 | 179 | 179 | ||||||||||||
Other income, net | 3 | 83 | 83 | 83 | ||||||||||||
Total expenses | 2,918 | 2,763 | 2,749 | 2,742 | ||||||||||||
Income (loss) before income taxes | 203 | 312 | 321 | 328 | ||||||||||||
(Provision) benefit for taxes on income (loss) | (54 | ) | (110 | ) | (111 | ) | (113 | ) | ||||||||
Net income (loss) | $ | 149 | $ | 202 | $ | 210 | $ | 215 | ||||||||
Weighted average number of shares outstanding: | ||||||||||||||||
Basic | 459 | 425 | 425 | 425 | ||||||||||||
Diluted | 464 | 465 | 465 | 465 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.32 | $ | 0.48 | $ | 0.49 | $ | 0.51 | ||||||||
Diluted | $ | 0.32 | $ | 0.44 | $ | 0.46 | $ | 0.47 | ||||||||
Corporate EBITDA (a) | $ | 553 | $ | 731 | NR | $ | 741 | |||||||||
Adjusted pre-tax Income (loss) (a) | 322 | 507 | NR | 520 |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule III.
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET DATA
(In millions) | As of September 30, 2014 | As of December 31, 2013 As Restated | As of December 31, 2013 As Revised | |||||||||
Cash and cash equivalents | $ | 629 | $ | 411 | $ | 423 | ||||||
Restricted cash | 748 | 861 | 860 | |||||||||
Revenue earning equipment: | ||||||||||||
U.S. Car Rental | 8,312 | 8,629 | 8,629 | |||||||||
International Car Rental | 2,806 | 2,047 | 2,047 | |||||||||
Worldwide Equipment Rental | 2,534 | 2,416 | 2,416 | |||||||||
All Other Operations | 1,200 | 1,099 | 1,101 | |||||||||
Total revenue earning equipment, net | 14,852 | 14,191 | 14,193 | |||||||||
Total assets | 25,474 | 24,423 | 24,588 | |||||||||
Total debt | 16,986 | 16,309 | 16,309 | |||||||||
Net Fleet debt (a) | 9,529 | 9,034 | 9,034 | |||||||||
Net Corporate debt (a) (b) | 6,080 | 6,003 | 5,992 | |||||||||
Total equity | 2,779 | 2,567 | 2,771 |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule VI.
(b) Fleet related to Hertz Equipment Rental Corporation is funded via Corporate Debt.
34
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(In millions) | 2014 | 2013 As Restated | 2013 As Revised | 2013 As Reported | ||||||||||||
Cash provided by (used in): | ||||||||||||||||
Operating activities | $ | 2,729 | $ | 2,812 | $ | 2,837 | $ | 2,852 | ||||||||
Investing activities | (3,283 | ) | (4,046 | ) | (4,034 | ) | (4,035 | ) | ||||||||
Financing activities | 790 | 1,201 | 1,201 | 1,201 | ||||||||||||
Effect of exchange rate changes | (18 | ) | (2 | ) | (2 | ) | (2 | ) | ||||||||
Net change in cash and cash equivalents | $ | 218 | $ | (35 | ) | $ | 2 | $ | 16 | |||||||
Fleet growth (a) | $ | (381 | ) | $ | (798 | ) | NR | $ | (806 | ) | ||||||
Free cash flow (a) | 64 | (3 | ) | 21 | 15 |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules IV and V.
SELECTED UNAUDITED OPERATING DATA BY SEGMENT
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||
2014 | 2013 As Restated | 2013 As Reported | ||||||||||
U.S. Car Rental | ||||||||||||
Transaction days (in thousands) | 37,901 | 36,064 | 36,064 | |||||||||
Total RPD (a) | $ | 46.41 | $ | 48.36 | $ | 48.33 | ||||||
Average Fleet | 515,300 | 516,800 | 516,800 | |||||||||
Fleet efficiency(a) | 80 | % | 80 | % | NR | |||||||
Net depreciation per unit per month(a) | $ | 265 | $ | 217 | NR | |||||||
Program cars as a percentage of total average fleet at period end | 15 | % | 7 | % | NR | |||||||
Adjusted pre-tax income (in millions) (a) | $ | 209 | $ | 379 | $ | 392 | ||||||
International Car Rental | ||||||||||||
Transaction days (in thousands) | 14,695 | 14,278 | 14,278 | |||||||||
Total RPD(a)(b) | $ | 54.85 | $ | 55.12 | $ | 55.27 | ||||||
Average Fleet | 196,900 | 188,700 | 188,700 | |||||||||
Fleet efficiency(a) | 81 | % | 82 | % | NR | |||||||
Net depreciation per unit per month(a) | $ | 245 | $ | 274 | NR | |||||||
Program cars as a percentage of total average fleet at period end | 40 | % | 36 | % | NR | |||||||
Adjusted pre-tax income (loss) (in millions)(a) | $ | 136 | $ | 126 | $ | 129 | ||||||
Worldwide Equipment Rental | ||||||||||||
Dollar utilization | 37 | % | 38 | % | NR | |||||||
Time utilization | 66 | % | 67 | % | NR | |||||||
Rental and rental related revenue (in millions)(a)(b) | $ | 382 | $ | 369 | $ | 372 | ||||||
Same store revenue growth, including growth initiatives (b) | 6 | % | 7 | % | 7 | % | ||||||
Adjusted pre-tax income (in millions)(a) | $ | 79 | $ | 89 | $ | 88 | ||||||
All Other Operations | ||||||||||||
Average fleet — Donlen | 169,700 | 170,800 | 170,800 | |||||||||
Adjusted pre-tax income (in millions)(a) | $ | 17 | $ | 14 | $ | 14 |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules III and VI.
(b) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
35
SUPPLEMENTAL SCHEDULES AND DEFINITIONS
The following Supplemental Schedules and definitions are provided to present segment results and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules we provide definitions for terminology used throughout these schedules.
Supplemental Schedule I
HERTZ GLOBAL HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
Three Months Ended September 30, 2014 | Three Months Ended September 30, 2013 As Restated | Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | As Revised Consolidated HGH | As Reported Consolidated HGH | |||||||||||||||||||||||||||||||||||||||||
Total revenues: | $ | 1,768 | $ | 795 | $ | 413 | $ | 145 | $ | — | $ | 3,121 | $ | 1,770 | $ | 768 | $ | 403 | $ | 134 | $ | — | $ | 3,075 | $ | 3,070 | $ | 3,070 | |||||||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct operating | 1,041 | 427 | 221 | 6 | 7 | 1,702 | 933 | 411 | 206 | 6 | (9 | ) | 1,547 | 1,540 | 1,525 | ||||||||||||||||||||||||||||||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 409 | 143 | 78 | 116 | — | 746 | 337 | 151 | 76 | 108 | — | 672 | 675 | 677 | |||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 116 | 68 | 47 | 7 | 65 | 303 | 113 | 74 | 33 | 7 | 55 | 282 | 272 | 278 | |||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 44 | 27 | 12 | 3 | 78 | 164 | 47 | 31 | 13 | 6 | 82 | 179 | 179 | 179 | |||||||||||||||||||||||||||||||||||||||||
Other (income) expense, net | (2 | ) | — | (1 | ) | — | 6 | 3 | 43 | — | (1 | ) | — | 41 | 83 | 83 | 83 | ||||||||||||||||||||||||||||||||||||||
Total expenses | 1,608 | 665 | 357 | 132 | 156 | 2,918 | 1,473 | 667 | 327 | 127 | 169 | 2,763 | 2,749 | 2,742 | |||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 160 | $ | 130 | $ | 56 | $ | 13 | $ | (156 | ) | $ | 203 | $ | 297 | $ | 101 | $ | 76 | $ | 7 | $ | (169 | ) | $ | 312 | $ | 321 | $ | 328 | |||||||||||||||||||||||||
Provision for taxes on income | (54 | ) | (110 | ) | (111 | ) | (113 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 149 | $ | 202 | $ | 210 | $ | 215 |
36
Supplemental Schedule II
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TO ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Three Months Ended September 30, 2014 | Three Months Ended September 30, 2013 As Restated | Three Months Ended September 30, 2013 As Reported | ||||||||||||||||||||||||||||||||||
(In millions, except per share data) | GAAP | Adjustments | Adjusted (Non-GAAP) | GAAP | Adjustments | Adjusted (Non-GAAP) | GAAP | Adjustments | Adjusted (Non-GAAP) | |||||||||||||||||||||||||||
Total revenues | $ | 3,121 | $ | — | $ | 3,121 | $ | 3,075 | $ | — | $ | 3,075 | $ | 3,070 | $ | — | $ | 3,070 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||||||
Direct operating | 1,702 | (61 | ) | 1,641 | 1,547 | (56 | ) | 1,491 | 1,525 | (52 | ) | 1,473 | ||||||||||||||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 746 | — | 746 | 672 | (3 | ) | 669 | 677 | (3 | ) | 674 | |||||||||||||||||||||||||
Selling, general and administrative | 303 | (43 | ) | 260 | 282 | (35 | ) | 247 | 278 | (36 | ) | 242 | ||||||||||||||||||||||||
Interest expense, net | 164 | (13 | ) | 151 | 179 | (18 | ) | 161 | 179 | (18 | ) | 161 | ||||||||||||||||||||||||
Other (income) expense, net | 3 | (2 | ) | 1 | 83 | (83 | ) | — | 83 | (83 | ) | — | ||||||||||||||||||||||||
Total expenses | 2,918 | (119 | ) | 2,799 | 2,763 | (195 | ) | 2,568 | 2,742 | (192 | ) | 2,550 | ||||||||||||||||||||||||
Income (loss) before income taxes | 203 | 119 | 322 | 312 | 195 | 507 | 328 | 192 | 520 | |||||||||||||||||||||||||||
(Provision) benefit for taxes on income (loss) | (54 | ) | (44 | ) | (a) | (98 | ) | (110 | ) | (68 | ) | (a) | (178 | ) | (113 | ) | (69 | ) | (182 | ) | (a) | |||||||||||||||
Net income (loss) | $ | 149 | $ | 75 | $ | 224 | $ | 202 | $ | 127 | $ | 329 | $ | 215 | $ | 123 | $ | 338 | ||||||||||||||||||
Weighted average number of diluted shares outstanding | 464 | 464 | 464 | 465 | 465 | 465 | 465 | 465 | 465 | |||||||||||||||||||||||||||
Diluted earnings (loss) per share (b) | $ | 0.32 | $ | 0.16 | $ | 0.48 | $ | 0.44 | $ | 0.27 | $ | 0.71 | $ | 0.47 | $ | 0.26 | $ | 0.73 |
(a) Represents a provision for income taxes derived utilizing a normalized income tax rate (37% for 2014 and 35% for 2013).
(b) Net income (loss) used in diluted earnings per share calculation includes an adjustment to add back to net income the amount of interest expense on convertible senior notes, net of tax of $2 million,for the quarter ended September 30, 2013.
37
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES
TO EBITDA, CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME BY SEGMENT
Unaudited
Three Months Ended September 30, 2014 | Three Months Ended September 30, 2013 As Restated | Three Months Ended September 30, 2013 As Reported | |||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | Consolidated HGH | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 160 | $ | 130 | $ | 56 | $ | 13 | $ | (156 | ) | $ | 203 | $ | 297 | $ | 101 | $ | 76 | $ | 7 | $ | (169 | ) | $ | 312 | $ | 328 | |||||||||||||||||||||||
Depreciation and amortization | 465 | 152 | 97 | 118 | 5 | 837 | 387 | 159 | 94 | 110 | 4 | 754 | 755 | ||||||||||||||||||||||||||||||||||||||
Interest, net of interest income | 44 | 27 | 12 | 3 | 78 | 164 | 47 | 31 | 13 | 6 | 82 | 179 | 179 | ||||||||||||||||||||||||||||||||||||||
EBITDA | $ | 669 | $ | 309 | $ | 165 | $ | 134 | $ | (73 | ) | $ | 1,204 | $ | 731 | $ | 291 | $ | 183 | $ | 123 | $ | (83 | ) | $ | 1,245 | $ | 1,262 | |||||||||||||||||||||||
Car rental fleet depreciation | (409 | ) | (143 | ) | — | (116 | ) | — | (668 | ) | (337 | ) | (151 | ) | — | (108 | ) | — | (596 | ) | (600 | ) | |||||||||||||||||||||||||||||
Car rental fleet interest | (45 | ) | (23 | ) | — | (4 | ) | — | (72 | ) | (46 | ) | (27 | ) | — | (7 | ) | — | (80 | ) | (80 | ) | |||||||||||||||||||||||||||||
Car rental fleet debt - related charges | 3 | 4 | — | 1 | — | 8 | 2 | 3 | — | 4 | — | 9 | 9 | ||||||||||||||||||||||||||||||||||||||
Non-cash stock-based employee compensation charges | — | — | — | — | 7 | 7 | — | — | — | — | 11 | 11 | 11 | ||||||||||||||||||||||||||||||||||||||
Restructuring and restructuring related charges | 29 | 1 | 1 | — | 24 | 55 | 8 | 12 | 1 | — | 18 | 39 | 39 | ||||||||||||||||||||||||||||||||||||||
Acquisition related costs and charges | — | — | — | — | 1 | 1 | — | — | — | — | 3 | 3 | 3 | ||||||||||||||||||||||||||||||||||||||
Integration expenses | — | — | — | — | 1 | 1 | 6 | — | — | — | 2 | 8 | 9 | ||||||||||||||||||||||||||||||||||||||
Equipment Rental spin-off costs | — | — | 12 | — | 2 | 14 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Relocation costs | — | — | — | — | 3 | 3 | 4 | — | — | — | — | 4 | 4 | ||||||||||||||||||||||||||||||||||||||
Premiums paid on debt | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | — | — | — | — | — | 28 | 28 | — | ||||||||||||||||||||||||||||||||||||||
Impairment charges and asset write-downs | — | — | — | — | — | — | 40 | — | — | — | — | 40 | 44 | ||||||||||||||||||||||||||||||||||||||
Other extraordinary, unusual or non-recurring items | — | (1 | ) | — | — | 1 | — | 4 | 7 | — | — | 9 | 20 | 40 | |||||||||||||||||||||||||||||||||||||
Corporate EBITDA | $ | 247 | $ | 147 | $ | 178 | $ | 15 | $ | (34 | ) | $ | 553 | $ | 412 | $ | 135 | $ | 184 | $ | 12 | $ | (12 | ) | $ | 731 | $ | 741 | |||||||||||||||||||||||
Non-fleet depreciation and amortization | (56 | ) | (9 | ) | (97 | ) | (2 | ) | (5 | ) | (169 | ) | (50 | ) | (8 | ) | (94 | ) | (2 | ) | (4 | ) | (158 | ) | (155 | ) | |||||||||||||||||||||||||
Non-fleet interest, net of interest income | 1 | (4 | ) | (12 | ) | 1 | (78 | ) | (92 | ) | (1 | ) | (4 | ) | (13 | ) | 1 | (82 | ) | (99 | ) | (99 | ) | ||||||||||||||||||||||||||||
Non-fleet debt - related charges | — | — | 1 | 1 | 3 | 5 | — | — | 1 | (1 | ) | 8 | 8 | 9 | |||||||||||||||||||||||||||||||||||||
Non-cash stock-based employee compensation charges | — | — | — | — | (7 | ) | (7 | ) | — | — | — | — | (11 | ) | (11 | ) | (11 | ) | |||||||||||||||||||||||||||||||||
Acquisition accounting | 17 | 2 | 9 | 2 | 2 | 32 | 18 | 3 | 10 | 4 | — | 35 | 35 | ||||||||||||||||||||||||||||||||||||||
Other accounting | — | — | — | — | — | — | — | — | 1 | — | — | 1 | — | ||||||||||||||||||||||||||||||||||||||
Adjusted Pre-Tax Income (Loss) | $ | 209 | $ | 136 | $ | 79 | $ | 17 | $ | (119 | ) | $ | 322 | $ | 379 | $ | 126 | $ | 89 | $ | 14 | $ | (101 | ) | $ | 507 | $ | 520 |
38
Supplemental Schedule IV
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURE - FREE CASH FLOW
Unaudited
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(In millions) | 2014 | 2013 As Restated | 2013 As Revised | 2013 As Reported | ||||||||||||
Income before income taxes | $ | 261 | $ | 563 | $ | 601 | $ | 612 | ||||||||
Depreciation and amortization, non-fleet | 272 | 249 | 241 | 241 | ||||||||||||
Amortization of debt discount and related charges | 35 | 54 | 54 | 54 | ||||||||||||
Cash paid for income taxes | (47 | ) | (56 | ) | (56 | ) | (56 | ) | ||||||||
Changes in assets and liabilities, net of effects of acquisitions, and other | 89 | 169 | 172 | 154 | ||||||||||||
Net cash provided by operating activities excluding depreciation of revenue earning equipment | 610 | 979 | 1,012 | 1,005 | ||||||||||||
U.S. car rental fleet growth (a) | 134 | (489 | ) | NR | NR | |||||||||||
International car rental fleet growth (a) | (401 | ) | (49 | ) | NR | NR | ||||||||||
Equipment rental fleet growth (a) | (105 | ) | (258 | ) | NR | NR | ||||||||||
All other operations rental fleet growth (a) | (9 | ) | (2 | ) | NR | NR | ||||||||||
Property and equipment expenditures, net of disposals | (165 | ) | (184 | ) | (184 | ) | (184 | ) | ||||||||
Net investment activity | (546 | ) | (982 | ) | (991 | ) | (990 | ) | ||||||||
Free cash flow | $ | 64 | $ | (3 | ) | $ | 21 | $ | 15 |
(a) Historically, fleet growth has not been reported on a segment basis.
39
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURE - FLEET GROWTH
Unaudited
Nine Months Ended September 30, 2014 | Nine Months Ended September 30, 2013 As Restated | Nine Months Ended September 30, 2013 As Reported | |||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Consolidated HGH | Consolidated HGH | ||||||||||||||||||||||||||||||||
Revenue earning equipment expenditures | $ | (4,128 | ) | $ | (2,694 | ) | $ | (470 | ) | $ | (1,150 | ) | $ | (8,442 | ) | $ | (5,412 | ) | $ | (2,574 | ) | $ | (582 | ) | $ | (750 | ) | $ | (9,318 | ) | $ | (9,677 | ) | ||||||||||
Proceeds from disposal of revenue earning equipment | 3,019 | 1,456 | 130 | 711 | 5,316 | 3,506 | 1,654 | 101 | 401 | 5,662 | 5,669 | ||||||||||||||||||||||||||||||||
Net revenue earning equipment capital expenditures | (1,109 | ) | (1,238 | ) | (340 | ) | (439 | ) | (3,126 | ) | (1,906 | ) | (920 | ) | (481 | ) | (349 | ) | (3,656 | ) | (4,008 | ) | |||||||||||||||||||||
Depreciation of revenue earning equipment | 1,222 | 321 | 235 | 340 | 2,118 | 943 | 350 | 223 | 316 | 1,832 | 1,847 | ||||||||||||||||||||||||||||||||
Financing activity related to car rental fleet: | |||||||||||||||||||||||||||||||||||||||||||
Borrowings | 1,021 | 1,287 | — | 438 | 2,746 | 2,694 | 1,234 | — | 993 | 4,921 | NR | ||||||||||||||||||||||||||||||||
Payments | (1,085 | ) | (745 | ) | — | (350 | ) | (2,180 | ) | (2,303 | ) | (682 | ) | — | (947 | ) | (3,932 | ) | NR | ||||||||||||||||||||||||
Restricted cash changes | 85 | (26 | ) | — | 2 | 61 | 83 | (31 | ) | — | (15 | ) | 37 | NR | |||||||||||||||||||||||||||||
Net financing activity related to car rental fleet | 21 | 516 | — | 90 | 627 | 474 | 521 | — | 31 | 1,026 | 1,354 | ||||||||||||||||||||||||||||||||
Fleet growth | $ | 134 | $ | (401 | ) | $ | (105 | ) | $ | (9 | ) | $ | (381 | ) | $ | (489 | ) | $ | (49 | ) | $ | (258 | ) | $ | (2 | ) | $ | (798 | ) | $ | (806 | ) |
40
Supplemental Schedule VI
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS
Unaudited
NET CORPORATE DEBT, NET FLEET DEBT AND TOTAL NET DEBT
As of December 31, 2013 | As of December 31, 2013 | ||||||||||||||||||||||||||||||||||
As of September 30, 2014 | As Restated | As Revised | |||||||||||||||||||||||||||||||||
(In millions) | Fleet | Corporate | Total | Fleet | Corporate | Total | Fleet | Corporate | Total | ||||||||||||||||||||||||||
Debt | $ | 10,237 | $ | 6,749 | $ | 16,986 | $ | 9,806 | $ | 6,503 | $ | 16,309 | $ | 9,806 | $ | 6,503 | $ | 16,309 | |||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||||
Cash and cash equivalents | — | 629 | 629 | — | 411 | 411 | — | 423 | 423 | ||||||||||||||||||||||||||
Restricted cash | 708 | 40 | 748 | 772 | 89 | 861 | 772 | 88 | 860 | ||||||||||||||||||||||||||
Net debt | $ | 9,529 | $ | 6,080 | $ | 15,609 | $ | 9,034 | $ | 6,003 | $ | 15,037 | $ | 9,034 | $ | 5,992 | $ | 15,026 |
WORLDWIDE EQUIPMENT RENTAL AND RENTAL RELATED REVENUE
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||
(In millions) | 2014 | 2013 As Restated | 2013 As Reported | |||||||||
Equipment rental segment revenues | $ | 413 | $ | 403 | $ | 402 | ||||||
Equipment sales and other revenue | (33 | ) | (33 | ) | (33 | ) | ||||||
Rental and rental related revenue at actual rates | 380 | 370 | 369 | |||||||||
Foreign currency adjustment (a) | 2 | (1 | ) | 3 | ||||||||
Rental and rental related revenue | $ | 382 | $ | 369 | $ | 372 |
(a) | Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates. |
41
Supplemental Schedule VI (continued)
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
U.S. Car Rental
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||
(In millions, except as noted) | 2014 | 2013 As Restated | 2013 As Reported | |||||||||
Total RPD | ||||||||||||
Revenues | $ | 1,768 | $ | 1,770 | $ | 1,766 | ||||||
Advantage sublease revenue | — | (22 | ) | (23 | ) | |||||||
Ancillary retail car sales revenue | (9 | ) | (4 | ) | — | |||||||
Total rental revenue | $ | 1,759 | $ | 1,744 | $ | 1,743 | ||||||
Transaction days (in thousands) | 37,901 | 36,064 | 36,064 | |||||||||
Total RPD (in whole dollars) | $ | 46.41 | $ | 48.36 | $ | 48.33 | ||||||
Fleet Efficiency | ||||||||||||
Transaction days (in thousands) | 37,901 | 36,064 | ||||||||||
Average Fleet | 515,300 | 516,800 | ||||||||||
Advantage sublease vehicles | (1,000 | ) | (23,000 | ) | ||||||||
Hertz 24/7 vehicles | (1,000 | ) | (2,000 | ) | ||||||||
Average Fleet used to calculate fleet efficiency | 513,300 | 491,800 | ||||||||||
Number of days in period | 92 | 92 | ||||||||||
Average fleet multiplied by number of dates in period (in thousands) | $ | 47,224 | $ | 45,246 | ||||||||
Fleet efficiency | 80 | % | 80 | % | ||||||||
Net Depreciation Per Unit Per Month | ||||||||||||
Depreciation of revenue earning equipment and lease charges, net | $ | 409 | $ | 337 | ||||||||
Average fleet | 515,300 | 516,800 | ||||||||||
Depreciation of revenue earning equipment and lease charges, net divided by average fleet (in whole dollars) | $ | 794 | $ | 652 | ||||||||
Number of months in period | 3 | 3 | ||||||||||
Net depreciation per unit per month (in whole dollars) | $ | 265 | $ | 217 |
42
Supplemental Schedule VI (continued)
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
International Car Rental
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||
(in millions, except as noted) | 2014 | 2013 As Restated | 2013 As Reported | |||||||||
Revenues | $ | 795 | $ | 768 | $ | 768 | ||||||
Foreign currency adjustment (a) | 11 | 19 | 21 | |||||||||
Total rental revenue | $ | 806 | $ | 787 | $ | 789 | ||||||
Transaction days (in thousands) | 14,695 | 14,278 | 14,278 | |||||||||
Total RPD (in whole dollars) | $ | 54.85 | $ | 55.12 | $ | 55.27 | ||||||
Transaction days (in thousands) | 14,695 | 14,278 | ||||||||||
Average Fleet | 196,900 | 188,700 | ||||||||||
Number of days in period | 92 | 92 | ||||||||||
Average fleet multiplied by number of days in period | 18,115 | 17,360 | ||||||||||
Fleet efficiency | 81 | % | 82 | % | ||||||||
Depreciation of revenue earning equipment and lease charges, net | $ | 143 | $ | 151 | ||||||||
Foreign currency adjustment (a) | 2 | 4 | ||||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net | $ | 145 | $ | 155 | ||||||||
Average fleet | 196,900 | 188,700 | ||||||||||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet (in whole dollars) | $ | 736 | $ | 821 | ||||||||
Number of months in period | 3 | 3 | ||||||||||
Net depreciation per unit per month (in whole dollars) | $ | 245 | $ | 274 |
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
43
FINANCIAL INFORMATION AND OPERATING DATA
SELECTED UNAUDITED CONSOLIDATED INCOME STATEMENT DATA
Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
(In millions, except per share data) | 2014 | 2013 As Restated | 2013 As Revised | 2013 As Reported | ||||||||||||
Total revenues | $ | 2,830 | $ | 2,708 | $ | 2,709 | $ | 2,715 | ||||||||
Expenses: | ||||||||||||||||
Direct operating | 1,594 | 1,417 | 1,414 | 1,406 | ||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 708 | 632 | 628 | 641 | ||||||||||||
Selling, general and administrative | 264 | 287 | 280 | 275 | ||||||||||||
Interest expense, net | 164 | 182 | 182 | 182 | ||||||||||||
Other income, net | (21 | ) | (2 | ) | (1 | ) | (1 | ) | ||||||||
Total expenses | 2,709 | 2,516 | 2,503 | 2,503 | ||||||||||||
Income (loss) before income taxes | 121 | 192 | 206 | 212 | ||||||||||||
(Provision) benefit for taxes on income (loss) | (49 | ) | (81 | ) | (85 | ) | (91 | ) | ||||||||
Net income (loss) | $ | 72 | $ | 111 | $ | 121 | $ | 121 | ||||||||
Weighted average number of shares outstanding: | ||||||||||||||||
Basic | 452 | 401 | 401 | 401 | ||||||||||||
Diluted | 465 | 465 | 465 | 465 | ||||||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.16 | $ | 0.28 | $ | 0.30 | $ | 0.30 | ||||||||
Diluted | $ | 0.15 | $ | 0.25 | $ | 0.27 | $ | 0.27 | ||||||||
Corporate EBITDA (a) | $ | 446 | $ | 522 | NR | $ | 541 | |||||||||
Adjusted pre-tax Income (loss) (a) | 216 | 296 | NR | 314 |
(a) | Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule III. |
SELECTED UNAUDITED CONSOLIDATED BALANCE SHEET DATA
(In millions) | As of June 30, 2014 | As of December 31, 2013 As Restated | As of December 31, 2013 As Revised | |||||||||
Cash and cash equivalents | $ | 540 | $ | 411 | $ | 423 | ||||||
Restricted cash | 717 | 861 | 860 | |||||||||
Revenue earning equipment: | ||||||||||||
U.S. Car Rental | 8,980 | 8,629 | 8,629 | |||||||||
International Car Rental | 3,135 | 2,047 | 2,047 | |||||||||
Worldwide Equipment Rental | 2,520 | 2,416 | 2,416 | |||||||||
All Other Operations | 1,194 | 1,099 | 1,101 | |||||||||
Total revenue earning equipment, net | 15,829 | 14,191 | 14,193 | |||||||||
Total assets | 26,169 | 24,423 | 24,588 | |||||||||
Total debt | 17,310 | 16,309 | 16,309 | |||||||||
Net Fleet debt (a) | 9,429 | 9,034 | 9,034 | |||||||||
Net Corporate debt (a) (b) | 6,624 | 6,003 | 5,992 | |||||||||
Total equity | 2,666 | 2,567 | 2,771 |
(a) | Represents a non-GAAP measure, see the accompanying reconciliations included in Supplemental Schedule VI. |
(b) | Fleet related to Hertz Equipment Rental Corporation is funded via Corporate Debt |
44
SELECTED UNAUDITED CONSOLIDATED CASH FLOW DATA
Six Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2014 | 2013 As Restated | 2013 As Revised | 2013 As Reported | ||||||||||||
Cash provided by (used in): | ||||||||||||||||
Operating activities | $ | 1,402 | $ | 1,444 | $ | 1,448 | $ | 1,459 | ||||||||
Investing activities | (2,248 | ) | (3,273 | ) | (3,267 | ) | (3,264 | ) | ||||||||
Financing activities | 977 | 1,764 | 1,763 | 1,763 | ||||||||||||
Effect of exchange rate changes | (2 | ) | (9 | ) | (8 | ) | (8 | ) | ||||||||
Net change in cash and cash equivalents | $ | 129 | $ | (74 | ) | $ | (64 | ) | $ | (50 | ) | |||||
Fleet growth (a) | $ | (592 | ) | $ | (545 | ) | NR | $ | (543 | ) | ||||||
Free cash flow (a) | (689 | ) | (408 | ) | (397 | ) | (404 | ) |
(a) Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules IV and V.
SELECTED UNAUDITED OPERATING DATA BY SEGMENT
Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||
2014 | 2013 As Restated | 2013 As Reported | ||||||||||
U.S. Car Rental | ||||||||||||
Transaction days (in thousands) | 35,850 | 34,178 | 34,178 | |||||||||
Total RPD (a) | $ | 46.19 | $ | 46.11 | $ | 46.78 | ||||||
Average fleet | 502,500 | 499,000 | 498,800 | |||||||||
Fleet efficiency(a) | 79 | % | 79 | % | NR | |||||||
Net depreciation per unit per month(a) | $ | 259 | $ | 216 | NR | |||||||
Program cars as a percentage of total average fleet at period end | 16 | % | 3 | % | NR | |||||||
Adjusted pre-tax income (in millions) (a) | $ | 184 | $ | 289 | NR | |||||||
International Car Rental | ||||||||||||
Transaction days (in thousands) | 12,096 | 11,261 | 11,261 | |||||||||
Total RPD (a)(b) | $ | 52.58 | $ | 53.73 | $ | 54.05 | ||||||
Average Fleet | 172,300 | 163,500 | 163,500 | |||||||||
Fleet efficiency(a) | 77 | % | 76 | % | NR | |||||||
Net depreciation per unit per month(a) | $ | 238 | $ | 273 | NR | |||||||
Program cars as a percentage of total average fleet at period end | 42 | % | 38 | % | NR | |||||||
Adjusted pre-tax income (loss) (in millions) (a) | $ | 57 | $ | 35 | NR | |||||||
Worldwide Equipment Rental | ||||||||||||
Dollar utilization | 35 | % | 37 | % | NR | |||||||
Time utilization | 63 | % | 64 | % | NR | |||||||
Rental and rental related revenue (in millions) (a)(b) | $ | 356 | $ | 343 | $ | 351 | ||||||
Same store revenue growth, including growth initiatives (b) | 4 | % | 11 | % | 11 | % | ||||||
Adjusted pre-tax income (in millions) (a) | $ | 67 | $ | 73 | NR | |||||||
All Other Operations | ||||||||||||
Average fleet — Donlen | 177,800 | 168,000 | 168,000 | |||||||||
Adjusted pre-tax income (in millions) (a) | $ | 15 | $ | 14 | NR |
(a) | Represents a non-GAAP measure, see the accompanying reconciliations included in the Supplemental Schedules III and VI |
(b) | Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates. |
45
SUPPLEMENTAL SCHEDULES AND DEFINITIONS
The following Supplemental Schedules and definitions are provided to present segment results and reconciliations of non-GAAP measures to their most comparable GAAP measure. Following the Supplemental Schedules we provide definitions for terminology used throughout these schedules.
Supplemental Schedule I
HERTZ GLOBAL HOLDINGS, INC.
CONDENSED STATEMENT OF OPERATIONS BY SEGMENT
Unaudited
Three Months Ended June 30, 2014 | Three Months Ended June 30, 2013 As Restated | Three Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | As Revised Consolidated HGH | As Reported Consolidated HGH | |||||||||||||||||||||||||||||||||||||||||
Total revenues: | $ | 1,663 | $ | 641 | $ | 384 | $ | 142 | $ | — | $ | 2,830 | $ | 1,602 | $ | 595 | $ | 381 | $ | 130 | $ | — | $ | 2,708 | $ | 2,709 | $ | 2,715 | |||||||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct operating | 990 | 394 | 210 | 6 | (6 | ) | 1,594 | 865 | 347 | 204 | 6 | (5 | ) | 1,417 | 1,414 | 1,406 | |||||||||||||||||||||||||||||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 391 | 124 | 79 | 114 | — | 708 | 323 | 132 | 73 | 104 | — | 632 | 628 | 641 | |||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 93 | 63 | 35 | 8 | 65 | 264 | 113 | 69 | 32 | 8 | 65 | 287 | 280 | 275 | |||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 44 | 25 | 12 | 3 | 80 | 164 | 45 | 28 | 12 | 2 | 95 | 182 | 182 | 182 | |||||||||||||||||||||||||||||||||||||||||
Other (income) expense, net | (22 | ) | 3 | (1 | ) | — | (1 | ) | (21 | ) | (1 | ) | — | (2 | ) | (1 | ) | 2 | (2 | ) | (1 | ) | (1 | ) | |||||||||||||||||||||||||||||||
Total expenses | 1,496 | 609 | 335 | 131 | 138 | 2,709 | 1,345 | 576 | 319 | 119 | 157 | 2,516 | 2,503 | 2,503 | |||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 167 | $ | 32 | $ | 49 | $ | 11 | $ | (138 | ) | 121 | $ | 257 | $ | 19 | $ | 62 | $ | 11 | $ | (157 | ) | $ | 192 | $ | 206 | $ | 212 | ||||||||||||||||||||||||||
(Provision) benefit for taxes on income | (49 | ) | (81 | ) | (85 | ) | (91 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 72 | $ | 111 | $ | 121 | $ | 121 |
46
Supplemental Schedule II
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TO ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Three Months Ended June 30, 2014 | Three Months Ended June 30, 2013 As Restated | Three Months Ended June 30, 2013 As Reported | |||||||||||||||||||||||||||||||||
(In millions, except per share data) | GAAP | Adjustments | Adjusted (Non-GAAP) | GAAP | Adjustments | Adjusted (Non-GAAP) | GAAP | Adjustments | Adjusted (Non-GAAP) | ||||||||||||||||||||||||||
Total revenues | $ | 2,830 | $ | — | $ | 2,830 | $ | 2,708 | $ | — | $ | 2,708 | $ | 2,715 | $ | — | $ | 2,715 | |||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||||||
Direct operating | 1,594 | (59 | ) | 1,535 | 1,417 | (47 | ) | 1,370 | 1,406 | (45 | ) | 1,361 | |||||||||||||||||||||||
Depreciation of revenue earning equipment and lease charges, net | 708 | (6 | ) | 702 | 632 | (2 | ) | 630 | 641 | (2 | ) | 639 | |||||||||||||||||||||||
Selling, general and administrative | 264 | (34 | ) | 230 | 287 | (36 | ) | 251 | 275 | (35 | ) | 240 | |||||||||||||||||||||||
Interest expense, net | 164 | (13 | ) | 151 | 182 | (18 | ) | 164 | 182 | (19 | ) | 163 | |||||||||||||||||||||||
Other (income) expense, net | (21 | ) | 17 | (4 | ) | (2 | ) | (1 | ) | (3 | ) | (1 | ) | (2 | ) | (3 | ) | ||||||||||||||||||
Total expenses | 2,709 | (95 | ) | 2,614 | 2,516 | (104 | ) | 2,412 | 2,503 | (103 | ) | 2,400 | |||||||||||||||||||||||
Income (loss) before income taxes | 121 | 95 | 216 | 192 | 104 | 296 | 212 | 103 | 315 | ||||||||||||||||||||||||||
(Provision) benefit for taxes on income (loss) | (49 | ) | (35 | ) | (a) | (84 | ) | (81 | ) | (36 | ) | (a) | (117 | ) | (91 | ) | (20 | ) | (a) | (111 | ) | ||||||||||||||
Net income (loss) | $ | 72 | $ | 60 | $ | 132 | $ | 111 | $ | 68 | $ | 179 | $ | 121 | $ | 83 | $ | 204 | |||||||||||||||||
Weighted average number of diluted shares outstanding | 465 | 465 | 465 | 465 | 465 | 465 | 465 | 465 | 465 | ||||||||||||||||||||||||||
Diluted earnings (loss) per share (b) | $ | 0.15 | $ | 0.13 | $ | 0.28 | $ | 0.25 | $ | 0.15 | $ | 0.39 | 0.27 | NR | NR |
(a) | Represents a provision for income taxes derived utilizing a normalized income tax rate (37% for 2014 and 35% for 2013). |
(b) | Net income (loss) used in diluted earnings per share calculation includes an adjustment to add back to net income the amount of interest expense on convertible senior notes, net of tax of $4 million, for the quarter ended June 30, 2013. |
47
Supplemental Schedule III
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF INCOME (LOSS) BEFORE INCOME TAXES
TO EBITDA, CORPORATE EBITDA AND ADJUSTED PRE-TAX INCOME BY SEGMENT
Unaudited
Three Months Ended June 30, 2014 | Three Months Ended June 30, 2013 As Restated | Three Months Ended June 30, 2013 As Reported | |||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Corporate | Consolidated HGH | Consolidated HGH | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 167 | $ | 32 | $ | 49 | $ | 11 | $ | (138 | ) | $ | 121 | $ | 257 | $ | 19 | $ | 62 | $ | 11 | $ | (157 | ) | $ | 192 | $ | 212 | |||||||||||||||||||||||
Depreciation and amortization | 447 | 135 | 97 | 116 | 4 | 799 | 374 | 140 | 91 | 107 | 3 | 715 | 722 | ||||||||||||||||||||||||||||||||||||||
Interest, net of interest income | 44 | 25 | 12 | 3 | 80 | 164 | 45 | 28 | 12 | 2 | 95 | 182 | 182 | ||||||||||||||||||||||||||||||||||||||
EBITDA | $ | 658 | $ | 192 | $ | 158 | $ | 130 | $ | (54 | ) | $ | 1,084 | $ | 676 | $ | 187 | $ | 165 | $ | 120 | $ | (59 | ) | $ | 1,089 | $ | 1,116 | |||||||||||||||||||||||
Car rental fleet depreciation | (391 | ) | (124 | ) | — | (114 | ) | — | (629 | ) | (323 | ) | (132 | ) | — | (104 | ) | — | (559 | ) | (568 | ) | |||||||||||||||||||||||||||||
Car rental fleet interest | (45 | ) | (22 | ) | — | (3 | ) | — | (70 | ) | (45 | ) | (26 | ) | — | (3 | ) | — | (74 | ) | (73 | ) | |||||||||||||||||||||||||||||
Car rental fleet debt - related charges | 1 | 5 | — | 1 | — | 7 | 1 | 4 | — | — | — | 5 | 5 | ||||||||||||||||||||||||||||||||||||||
Non-cash stock-based employee compensation charges | — | — | — | — | 5 | 5 | — | — | — | — | 11 | 11 | 12 | ||||||||||||||||||||||||||||||||||||||
Restructuring and restructuring related charges | 4 | 14 | 2 | — | 11 | 31 | 12 | 10 | 1 | — | 3 | 26 | 26 | ||||||||||||||||||||||||||||||||||||||
Acquisition related costs and charges | — | — | — | — | 2 | 2 | — | — | — | — | 8 | 8 | 9 | ||||||||||||||||||||||||||||||||||||||
Integration expenses | — | — | — | — | 3 | 3 | (1 | ) | — | — | — | 10 | 9 | 9 | |||||||||||||||||||||||||||||||||||||
Equipment Rental spin-off costs | — | — | 6 | — | 6 | 12 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Relocation costs | — | — | — | — | 3 | 3 | — | — | — | — | 1 | 1 | — | ||||||||||||||||||||||||||||||||||||||
Impairment charges and asset write-downs | 10 | — | — | — | — | 10 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Other extraordinary, unusual or non-recurring items | (16 | ) | 3 | — | — | 1 | (12 | ) | 1 | — | (1 | ) | (1 | ) | 7 | 6 | 5 | ||||||||||||||||||||||||||||||||||
Corporate EBITDA | $ | 221 | $ | 68 | $ | 166 | $ | 14 | $ | (23 | ) | $ | 446 | $ | 321 | $ | 43 | $ | 165 | $ | 12 | $ | (19 | ) | $ | 522 | $ | 541 | |||||||||||||||||||||||
Non-fleet depreciation and amortization | (56 | ) | (11 | ) | (97 | ) | (2 | ) | (4 | ) | (170 | ) | (51 | ) | (8 | ) | (91 | ) | (3 | ) | (3 | ) | (156 | ) | (154 | ) | |||||||||||||||||||||||||
Non-fleet interest, net of interest income | 1 | (3 | ) | (12 | ) | — | (80 | ) | (94 | ) | — | (2 | ) | (12 | ) | 1 | (95 | ) | (108 | ) | (109 | ) | |||||||||||||||||||||||||||||
Non-fleet debt - related charges | 1 | — | 1 | — | 4 | 6 | 1 | — | 1 | — | 12 | 14 | 15 | ||||||||||||||||||||||||||||||||||||||
Non-cash stock-based employee compensation charges | — | — | — | — | (5 | ) | (5 | ) | — | — | — | — | (11 | ) | (11 | ) | (12 | ) | |||||||||||||||||||||||||||||||||
Acquisition accounting | 17 | 3 | 9 | 3 | 1 | 33 | 18 | 2 | 10 | 4 | 1 | 35 | 33 | ||||||||||||||||||||||||||||||||||||||
Adjusted Pre-Tax Income (Loss) | $ | 184 | $ | 57 | $ | 67 | $ | 15 | $ | (107 | ) | $ | 216 | $ | 289 | $ | 35 | $ | 73 | $ | 14 | $ | (115 | ) | $ | 296 | $ | 314 |
48
Supplemental Schedule IV
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEAURE - FREE CASH FLOW
Unaudited
Six Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | 2014 | 2013 As Restated | 2013 As Revised | 2013 As Reported | ||||||||||||
Income before income taxes | $ | 58 | $ | 252 | $ | 280 | $ | 284 | ||||||||
Depreciation and amortization, non-fleet | 180 | 167 | 163 | 163 | ||||||||||||
Amortization of debt discount and related charges | 25 | 37 | 37 | 37 | ||||||||||||
Cash paid for income taxes | (33 | ) | (43 | ) | (43 | ) | (43 | ) | ||||||||
Changes in assets and liabilities, net of effects of acquisitions, and other | (221 | ) | (155 | ) | (163 | ) | (177 | ) | ||||||||
Net cash provided by operating activities excluding depreciation of revenue earning equipment | 9 | 258 | 274 | 264 | ||||||||||||
U.S. car rental fleet growth (a) | (321 | ) | (561 | ) | NR | NR | ||||||||||
International car rental fleet growth (a) | (209 | ) | 150 | NR | NR | |||||||||||
Equipment rental fleet growth (a) | (50 | ) | (136 | ) | NR | NR | ||||||||||
All other operations rental fleet growth (a) | (12 | ) | 2 | NR | NR | |||||||||||
Property and equipment expenditures, net of disposals | (106 | ) | (121 | ) | (125 | ) | (125 | ) | ||||||||
Net investment activity | (698 | ) | (666 | ) | (671 | ) | (668 | ) | ||||||||
Free cash flow | $ | (689 | ) | $ | (408 | ) | $ | (397 | ) | $ | (404 | ) |
(a) | Historically, fleet growth has not been reported on a segment basis. |
49
Supplemental Schedule V
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEAURE - FLEET GROWTH
Unaudited
Six Months Ended June 30, 2014 | Six Months Ended June 30, 2013 As Restated | Six Months Ended June 30, 2013 As Reported | |||||||||||||||||||||||||||||||||||||||||
(In millions) | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Consolidated HGH | U.S. Car Rental | Int’l Car Rental | Worldwide Equipment Rental | All Other Operations | Consolidated HGH | Consolidated HGH | ||||||||||||||||||||||||||||||||
Revenue earning equipment expenditures | $ | (3,260 | ) | $ | (1,673 | ) | $ | (296 | ) | $ | (767 | ) | $ | (5,996 | ) | $ | (4,463 | ) | $ | (1,472 | ) | $ | (365 | ) | $ | (513 | ) | $ | (6,813 | ) | $ | (6,826 | ) | ||||||||||
Proceeds from disposal of revenue earning equipment | 2,114 | 1,059 | 89 | 455 | 3,717 | 2,396 | 993 | 82 | 266 | 3,737 | 3,743 | ||||||||||||||||||||||||||||||||
Net revenue earning equipment capital expenditures | (1,146 | ) | (614 | ) | (207 | ) | (312 | ) | (2,279 | ) | (2,067 | ) | (479 | ) | (283 | ) | (247 | ) | (3,076 | ) | (3,083 | ) | |||||||||||||||||||||
Depreciation of revenue earning equipment | 813 | 199 | 157 | 224 | 1,393 | 607 | 223 | 147 | 209 | 1,186 | 1,195 | ||||||||||||||||||||||||||||||||
Financing activity related to car rental fleet: | |||||||||||||||||||||||||||||||||||||||||||
Borrowings | 619 | 720 | — | 420 | 1,759 | 2,470 | 918 | — | 47 | 3,435 | NR | ||||||||||||||||||||||||||||||||
Payments | (731 | ) | (491 | ) | — | (350 | ) | (1,572 | ) | (1,741 | ) | (487 | ) | — | (2 | ) | (2,230 | ) | NR | ||||||||||||||||||||||||
Restricted cash changes | 124 | (23 | ) | — | 6 | 107 | 170 | (25 | ) | — | (5 | ) | 140 | NR | |||||||||||||||||||||||||||||
Net financing activity related to car rental fleet | 12 | 206 | — | 76 | 294 | 899 | 406 | — | 40 | 1,345 | 1,345 | ||||||||||||||||||||||||||||||||
Fleet growth | $ | (321 | ) | $ | (209 | ) | $ | (50 | ) | $ | (12 | ) | $ | (592 | ) | $ | (561 | ) | $ | 150 | $ | (136 | ) | $ | 2 | $ | (545 | ) | $ | (543 | ) |
50
Supplemental Schedule VI
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS
Unaudited
NET CORPORATE DEBT, NET FLEET DEBT AND TOTAL NET DEBT
As of December 31, 2013 | As of December 31, 2013 | ||||||||||||||||||||||||||||||||||
As of June 30, 2014 | As Restated | As Revised | |||||||||||||||||||||||||||||||||
(In millions) | Fleet | Corporate | Total | Fleet | Corporate | Total | Fleet | Corporate | Total | ||||||||||||||||||||||||||
Debt | $ | 10,100 | $ | 7,210 | $ | 17,310 | $ | 9,806 | $ | 6,503 | $ | 16,309 | $ | 9,806 | $ | 6,503 | $ | 16,309 | |||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||||
Cash and cash equivalents | — | 540 | 540 | — | 411 | 411 | — | 423 | 423 | ||||||||||||||||||||||||||
Restricted cash | 671 | 46 | 717 | 772 | 89 | 861 | 772 | 88 | 860 | ||||||||||||||||||||||||||
Net debt | $ | 9,429 | $ | 6,624 | $ | 16,053 | $ | 9,034 | $ | 6,003 | $ | 15,037 | $ | 9,034 | $ | 5,992 | $ | 15,026 |
WORLDWIDE EQUIPMENT RENTAL AND RENTAL RELATED REVENUE
Three Months Ended June 30, | ||||||||||||
(In millions) | 2014 | 2013 As Restated | 2013 As Reported | |||||||||
Equipment rental segment revenues | $ | 384 | $ | 381 | $ | 384 | ||||||
Equipment sales and other revenue | (29 | ) | (36 | ) | (35 | ) | ||||||
Rental and rental related revenue at actual rates | 355 | 345 | 349 | |||||||||
Foreign currency adjustment (a) | 1 | (2 | ) | 2 | ||||||||
Rental and rental related revenue | $ | 356 | $ | 343 | $ | 351 |
(a) | Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates. |
51
Supplemental Schedule VI (continued)
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
U.S. Car Rental Segment
Three Months Ended June 30, | ||||||||
(In millions, except as noted) | 2014 | 2013 As Restated | ||||||
Total RPD | ||||||||
Revenues | $ | 1,663 | $ | 1,602 | ||||
Advantage sublease revenue | — | (22 | ) | |||||
Ancillary retail car sales revenue | (7 | ) | (4 | ) | ||||
Total rental revenue | $ | 1,656 | $ | 1,576 | ||||
Transaction days (in thousands) | 35,850 | 34,178 | ||||||
Total RPD (in whole dollars) | $ | 46.19 | $ | 46.11 | ||||
Fleet Efficiency | ||||||||
Transaction days (in thousands) | 35,850 | 34,178 | ||||||
Average Fleet | 502,500 | 499,000 | ||||||
Advantage sublease vehicles | (4,400 | ) | (24,000 | ) | ||||
Hertz 24/7 vehicles | (1,000 | ) | (1,000 | ) | ||||
Average Fleet used to calculate fleet efficiency | 497,100 | 474,000 | ||||||
Number of days in period | 91 | 91 | ||||||
Average fleet multiplied by number of dates in period (in thousands) | 45,236 | 43,134 | ||||||
Fleet efficiency | 79 | % | 79 | % | ||||
Net Depreciation Per Unit Per Month | ||||||||
Depreciation of revenue earning equipment and lease charges, net | $ | 391 | $ | 323 | ||||
Average fleet | 502,500 | 499,000 | ||||||
Depreciation of revenue earning equipment and lease charges, net divided by average fleet (in whole dollars) | $ | 778 | $ | 647 | ||||
Number of months in period | 3 | 3 | ||||||
Net depreciation per unit per month (in whole dollars) | $ | 259 | $ | 216 |
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Supplemental Schedule VI (continued)
HERTZ GLOBAL HOLDINGS, INC.
RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES - DEBT, REVENUE, DEPRECIATION AND KEY METRICS (CONTINUED)
Unaudited
TOTAL RPD, FLEET EFFICIENCY AND NET DEPRECIATION PER UNIT PER MONTH
International Car Rental
Three Months Ended June 30, | ||||||||
(in millions, except as noted) | 2014 | 2013 As Restated | ||||||
Total RPD | ||||||||
Revenues | $ | 641 | $ | 595 | ||||
Foreign currency adjustment (a) | (5 | ) | 10 | |||||
Total rental revenue | $ | 636 | $ | 605 | ||||
Transaction days (in thousands) | 12,096 | 11,261 | ||||||
Total RPD (in whole dollars) | $ | 52.58 | $ | 53.73 | ||||
Fleet Efficiency | ||||||||
Transaction days (in thousands) | 12,096 | 11,261 | ||||||
Average Fleet | 172,300 | 163,500 | ||||||
Number of days in period | 91 | 91 | ||||||
Average fleet multiplied by number of days in period | 15,679 | 14,879 | ||||||
Fleet efficiency | 77 | % | 76 | % | ||||
Net Depreciation Per Unit Per Month | ||||||||
Depreciation of revenue earning equipment and lease charges, net | $ | 124 | $ | 132 | ||||
Foreign currency adjustment (a) | (1 | ) | 2 | |||||
Adjusted depreciation of revenue earning equipment and lease charges, net | $ | 123 | $ | 134 | ||||
Average fleet | 172,300 | 163,500 | ||||||
Adjusted depreciation of revenue earning equipment and lease charges, net divided by average fleet (in whole dollars) | $ | 714 | $ | 820 | ||||
Number of months in period | 3 | 3 | ||||||
Net depreciation per unit per month (in whole dollars) | $ | 238 | $ | 273 |
All Car Rental | |||
Three Months Ended June 30, | |||
(In millions, except as noted) | 2013 As Reported | ||
Revenues | $ | 2,330 | |
Non-rental revenue | (134 | ) | |
Foreign currency adjustment (a) | 12 | ||
Total rental revenue | $ | 2,208 | |
Transaction days (in thousands) | 45,439 | ||
Total RPD (in whole dollars) | $ | 48.58 |
(a) Amounts shown for 2014 and 2013 As Restated are based on December 31, 2013 foreign exchange rates. Amounts shown for 2013 As Reported are based on December 31, 2012 foreign exchange rates.
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NON-GAAP MEASURES AND KEY METRICS - DEFINITIONS AND USE
Hertz Global is the top-level holding company and The Hertz Corporation is Hertz Global's primary operating company (together, the Company). The term “GAAP” refers to accounting principles generally accepted in the United States of America.
Definitions of non-GAAP measures are set forth below. Also set forth below is a summary of the reasons why management of the Company believes that the presentation of the non-GAAP financial measures included in the Press Release provide useful information regarding the Company's financial condition and results of operations and additional purposes, if any, for which management of the Company utilizes the non-GAAP measures.
Adjusted Pre-Tax Income (Loss) and Adjusted Pre-tax Margin
Adjusted pre-tax income is calculated as income before income taxes plus certain non-cash acquisition accounting charges, debt-related charges relating to the amortization and write-off of debt financing costs and debt discounts and certain one-time charges and non-operational items. Adjusted pre-tax income is important to management because it allows management to assess operational performance of our business, exclusive of the items mentioned above. It also allows management to assess the performance of the entire business on the same basis as the segment measure of profitability. Management believes that it is important to investors for the same reasons it is important to management and because it allows them to assess the operational performance of the Company on the same basis that management uses internally. Adjusted pre-tax margin is adjusted pre-tax income divided by total revenues.
Adjusted Net Income
Adjusted net income is calculated as adjusted pre-tax income less a provision for income taxes derived utilizing a normalized income tax rate of 37%. The normalized income tax rate is management's estimate of our long-term tax rate. Adjusted net income is important to management and investors because it represents our operational performance exclusive of the effects of purchase accounting, debt-related charges, one-time charges and items that are not operational in nature or comparable to those of our competitors.
Adjusted Diluted Earnings Per Share
Adjusted diluted earnings per share is calculated as adjusted net income divided by the weighted average diluted shares outstanding for the period, Adjusted diluted earnings per share is important to management and investors because it represents a measure of our operational performance exclusive of the effects of purchase accounting adjustments, debt-related charges, one-time charges and items that are not operational in nature or comparable to those of our competitors.
Average Fleet
Average Fleet is determined using a simple average of the number of vehicles at the beginning and end of a given period.
Corporate Restricted Cash (used in the calculation of Net Corporate Debt)
Total restricted cash includes cash and cash equivalents that are not readily available for our normal disbursements. Total restricted cash and equivalents are restricted for the purchase of revenue earning vehicles and other specified uses under our Fleet Debt facilities, our like-kind exchange programs and to satisfy certain of our self-insurance regulatory reserve requirements. Corporate restricted cash is calculated as total restricted cash less restricted cash associated with fleet debt.
Dollar Utilization
Dollar utilization means revenue derived from the rental of equipment divided by the original cost of the equipment including additional capitalized refurbishment costs (with the basis of refurbished assets at the refurbishment date).
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Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Corporate EBITDA
EBITDA is defined as net income before net interest expense, income taxes and depreciation (which includes revenue earning equipment lease charges) and amortization. Corporate EBITDA, as presented herein, represents EBITDA as adjusted for car rental fleet interest, car rental fleet depreciation and certain other items, as described in more detail in the accompanying schedules.
Management uses EBITDA and Corporate EBITDA as operating performance and liquidity metrics for internal monitoring and planning purposes, including the preparation of our annual operating budget and monthly operating reviews, as well as to facilitate analysis of investment decisions, profitability and performance trends. Further, EBITDA enables management and investors to isolate the effects on profitability of operating metrics such as revenue, operating expenses and selling, general and administrative expenses, which enables management and investors to evaluate our business segments that are financed differently and have different depreciation characteristics and compare our performance against companies with different capital structures and depreciation policies. We also present Corporate EBITDA as a supplemental measure because such information is utilized in the calculation of financial covenants under the Company's senior credit facilities and in the determination of certain executive compensation.
EBITDA and Corporate EBITDA are not recognized measurements under U.S. GAAP. When evaluating our operating performance or liquidity, investors should not consider EBITDA and Corporate EBITDA in isolation of, or as a substitute for, measures of our financial performance and liquidity as determined in accordance with GAAP, such as net income, operating income or net cash provided by operating activities.
Equipment Rental and Rental Related Revenue
Equipment rental and rental related revenue consists of all revenue, net of discounts, associated with the rental of equipment including charges for delivery, loss damage waivers and fueling, but excluding revenue arising from the sale of equipment, parts and supplies and certain other ancillary revenue. Rental and rental related revenue is adjusted in all periods to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends. This statistic is important to our management and to investors as it reflects time and mileage and ancillary charges for equipment on rent and is comparable with the reporting of other industry participants.
Fleet Efficiency
Fleet efficiency is calculated by dividing total transaction days by the average fleet multiplied by the number of days in a period. Average fleet used to calculate fleet efficiency in our U.S. Car Rental segment excludes Advantage sublease and Hertz 24/7 vehicles as these vehicles do not have associated transaction days.
Fleet Growth
U.S. and International car rental fleet growth is defined as car rental fleet capital expenditures, net of proceeds from disposals, plus car rental fleet depreciation and net car rental fleet financing which includes borrowings, repayments and the change in fleet restricted cash. Worldwide equipment rental fleet growth is defined as worldwide equipment rental fleet expenditures, net of proceeds from disposals, plus depreciation.
Free Cash Flow
Free cash flow is calculated as net cash provided by operating activities, excluding depreciation of revenue earning equipment, net of car rental and equipment rental fleet growth and property and equipment net expenditures. Free cash flow is important to management and investors as it represents the cash available for acquisitions and the reduction of corporate debt.
Net Corporate Debt
Net corporate debt is calculated as total debt excluding fleet debt less cash and equivalents and corporate restricted cash. Corporate debt consists of our Senior Term Facility; Senior ABL Facility; Senior Notes; Promissory Notes; Convertible Senior Notes; and certain other indebtedness of our domestic and foreign subsidiaries.
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Net Corporate Debt is important to management and investors as it helps measure our leverage. Net Corporate Debt also assists in the evaluation of our ability to service our non-fleet-related debt without reference to the expense associated with the fleet debt, which is collateralized by assets not available to lenders under the non-fleet debt facilities.
Net Depreciation Per Unit Per Month
Net depreciation per unit per month is calculated by dividing depreciation of revenue earning equipment and lease charges, net by the average fleet in each period and then dividing by the number of months in the period reported with all periods adjusted to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is useful in analyzing underlying trends. Average fleet used to calculate net depreciation per unit per month in our U.S. Car Rental segment includes Advantage sublease and Hertz 24/7 vehicles as these vehicles have associated lease charges.
Restricted Cash Associated with Fleet Debt (used in the calculation of Net Fleet Debt and Corporate Restricted Cash)
Restricted cash associated with fleet debt is restricted for the purchase of revenue earning, vehicles and other specified uses under our Fleet Debt facilities and our car rental like-kind exchange program.
Same Store Revenue Growth/Decline
Same store revenue growth is calculated as the year over year change in revenue for locations that are open at the end of the period reported and have been operating under our direction for more than twelve months. The same-store revenue amounts are adjusted in all periods to eliminate the effect of fluctuations in foreign currency.
Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not t o affect the comparability of underlying trends.
Time Utilization
Time utilization means the percentage of time an equipment unit is on-rent during a given period.
Total Net Debt
Total net debt is calculated as total debt less total cash and cash equivalents and total restricted cash. This measure is important to management, investors and ratings agencies as it helps measure our gross leverage.
Total RPD
Total RPD is calculated as total revenue less revenue from fleet subleases and ancillary revenue associated with retail car sales, divided by the total number of transaction days, with all periods adjusted to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends. This statistic is important to our management and investors as it represents the best measurement of the changes in underlying pricing in the car rental business and encompasses the elements in car rental pricing that management has the ability to control.
Transaction Days
Transaction days represent the total number of 24-hour periods, with any partial period counted as one transaction day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period. Thus, it is possible for a vehicle to attain more than one transaction day in a 24-hour period.
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