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FOR IMMEDIATE RELEASE CONTACT: MEDIA - JOE RUSSO
(201) 307-2486
FINANCIAL - LAUREN S. BABUS
(201) 307-2100
HERTZ CEO FRANK A. OLSON ANNOUNCES YEAR-END RETIREMENT;
COO CRAIG R. KOCH TO SUCCEED.
COMPANY REPORTS RECORD THIRD QUARTER EARNINGS
OF $139 MILLION, UP 17%.
PARK RIDGE, NJ, OCTOBER 12, 1999 -- Frank A. Olson, Chairman and Chief Executive
Officer of The Hertz Corporation (NYSE:HRZ), the world's largest car rental
company and a leading industrial and construction equipment rental business,
announced he will retire as Chief Executive, effective December 31, 1999. Olson
has held the position for the past 23 years.
28-YEAR HERTZ VETERAN KOCH WILL SUCCEED OLSON ON JANUARY 1, 2000
Succeeding Olson as Chief Executive will be Craig R. Koch, 52, currently
President and Chief Operating Officer.
Olson will continue with Hertz as non-executive Chairman of the Board. With
Hertz more than 35 years, Olson also held senior positions with two of its
former parent companies while maintaining his role at Hertz. From 1980 to 1985,
he was a Group Executive Vice President with RCA Corporation, and in 1987, he
was Chairman and Chief Executive Officer of Allegis Corporation, and President
and Chief Executive of its United Airlines unit.
Koch, who joined Hertz in the U.S. in 1971, has held a variety of
management positions with the company. In 1977, he became Vice President,
Operations for Hertz Europe, Ltd., based in London. In 1980, he returned to the
U.S. to become Vice President and General Manager of the Rent A Car Division. In
1983, he was elected Executive Vice President and, in 1988, President of the
North American Rent A Car Division. He was elected President and Chief Operating
Officer in 1993.
Koch holds a Bachelor of Science in Finance and a MBA from Lehigh
University in Pennsylvania.
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"Hertz is fortunate to have an executive with Craig's depth of experience
and the management acumen to maintain Hertz' market leadership and guide its
continued profitable growth," said Olson.
Koch remarked, "I am confident the Hertz brand has significant growth
opportunities in the future. Along with the most experienced management team in
our various businesses, I look forward to the challenge of globally developing
those opportunities.
"All of us at Hertz and scores of others in the business and civic
communities express our gratitude for Frank's personal dedication and
contribution to our company and to the industry. We are pleased that Frank has
agreed to continue to contribute."
RECORD RESULTS FOR THE QUARTER
At the same time, Hertz reported record third quarter, 1999, earnings of $139.0
million, up 17.1 percent from the $118.7 million generated for the same period
last year. Earnings per share on a diluted basis for the quarter were $1.28, up
from $1.09 for the third quarter, 1998.
Net income for the first nine months of 1999 was $275.7 million, an
increase of 20.3 percent over the $229.1 million reported for the first nine
months of 1998.
Hertz achieved record revenues for the quarter of $1.345 billion, up 9.8
percent from $1.225 billion for the same period last year.
Revenues for the first nine months were up 11.8 percent from $3.172 billion
in 1998 to $3.545 billion in 1999.
Headquartered in Park Ridge, NJ, Hertz operates from 6,300 locations in the
U.S. and over 140 foreign countries.
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THE HERTZ CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(In Thousands of Dollars)
Unaudited
Three Months As % of
Ended September 30, Total Revenue
------------------------------- ------------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
Revenue $ 1,344,808 $ 1,225,145 100.0% 100.0%
----------- ----------- ----- -----
Expenses:
Direct operating 564,976 520,418 42.0% 42.5%
Depreciation of revenue earning equipment 336,773 304,453 25.0% 24.8%
Selling, general and administrative 116,650 114,062 8.7% 9.3%
Interest - net 93,714 85,894 7.0% 7.0%
----------- ----------- ----- -----
Total expenses 1,112,113 1,024,827 82.7% 83.6%
----------- ----------- ----- -----
Income before income taxes 232,695 200,318 17.3% 16.4%
Income taxes 93,659 81,640 7.0% 6.7%
----------- ----------- ----- -----
Net income $ 139,036 $ 118,678 10.3% 9.7%
=========== =========== ===== =====
Earnings per share
Basic $1.29 $1.10
Diluted $1.28 $1.09
Weighted average number of shares outstanding:
Basic 108,032,375 108,070,628
Diluted 108,551,164 108,557,209
Nine Months As % of
Ended September 30, Total Revenue
------------------------------- ------------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
Revenue $3,545,152 $ 3,172,298 100.0% 100.0%
----------- ----------- ----- -----
Expenses:
Direct operating 1,571,510 1,432,633 44.3% 45.2%
Depreciation of revenue earning equipment 921,634 796,588 26.0% 25.1%
Selling, general and administrative 340,134 326,832 9.6% 10.3%
Interest - net 250,211 227,910 7.1% 7.2%
----------- ----------- ----- -----
Total expenses 3,083,489 2,783,963 87.0% 87.8%
----------- ----------- ----- -----
Income before income taxes 461,663 388,335 13.0% 12.2%
Income taxes 185,963 159,193 5.2% 5.0%
----------- ----------- ----- -----
Net income $ 275,700 $ 229,142 7.8% 7.2%
=========== =========== ===== =====
Earnings per share
Basic $2.55 $2.12
Diluted $2.54 $2.11
Weighted average number of shares outstanding:
Basic 108,005,161 108,119,193
Diluted 108,685,605 108,597,258
BALANCE SHEET DATA
(In Thousands of Dollars)
Unaudited
September 30,
------------------------
1999 1998
---------- ----------
Revenue earning equipment:
Cars $5,344,510 $4,809,553
Other equipment 1,572,890 1,307,052
Total assets 10,159,373 8,950,650
Total debt 6,566,201 5,820,956
Stockholders' equity 1,636,705 1,352,646
Note: Certain prior year amounts have been reclassified to conform to current
year presentation.
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