HERTZ GLOBAL HOLDINGS REPORTS FOURTH QUARTER AND FULL YEAR 2021 RESULTS

Feb 23, 2022

- Quarterly revenues of $1.9 billion
- Quarterly Company GAAP net loss of $260 million, or $1.52 loss per share; Adjusted net income of $426 million, primarily excluding a $643 million non-cash remeasurement expense associated with the Company's public warrants
- Record fourth quarter Adjusted Corporate EBITDA of $628 million and Adjusted Corporate EBITDA Margin of 32%
- Quarterly operating cash flow of $598 million and Adjusted operating cash flow of $573 million
- Full year GAAP loss per share of $0.27; Adjusted earnings per share of $4.39
- Full year Company GAAP net income of $366 million
- Record full year Adjusted Corporate EBITDA of $2.1 billion
- Corporate liquidity of $3.2 billion at December 31st, including $2.3 billion in unrestricted cash
- Company repurchased 48 million common shares since Nasdaq listing through February 17, 2022
- Stephen Scherr named permanent CEO effective February 28, 2022

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

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

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

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

SUMMARY RESULTS


Three Months Ended

December 31,


Percent Inc/
(Dec)

2021 vs 2020


Percent Inc/
(Dec)

2021 vs 2019

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

2021


2020


2019



Hertz Global - Consolidated










Total revenues

$     1,949


$     1,235


$     2,326


58%


(16)%

Adjusted net income (loss)(a)

$        426


$       (187)


$         (34)


NM


NM

Adjusted diluted earnings (loss) per share(a)

$       0.91


$      (1.20)


$      (0.24)


NM


NM

Adjusted Corporate EBITDA(a)

$        628


$       (140)


$           54


NM


NM

Adjusted Corporate EBITDA Margin(a)

32%


(11)%


2%















Average Vehicles (in whole units)

470,900


381,927


686,697


23%


(31)%

Vehicle Utilization

75%


73%


77%





Transaction Days (in thousands)

32,551


25,486


48,961


28%


(34)%

Total RPD (in dollars)(b)

$     60.29


$     43.12


$     44.73


40%


35%

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

$     1,389


$        959


$     1,063


45%


31%

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

$          57


$        276


$        272


(79)%


(79)%











Americas RAC Segment










Total revenues

$     1,691


$        899


$     1,726


88%


(2)%

Adjusted EBITDA

$        653


$       (108)


$          43


NM


NM

Adjusted EBITDA Margin

39%


(12)%


2%















Average Vehicles (in whole units)

384,492


308,107


536,065


25%


(28)%

Vehicle Utilization

77%


73%


79%





Transaction Days (in thousands)

27,215


20,754


38,851


31%


(30)%

Total RPD (in dollars)(b)

$     62.10


$     43.35


$     44.45


43%


40%

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

$     1,465


$        973


$     1,074


51%


36%

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

$          26


$        294


$        282


(91)%


(91)%











International RAC Segment










Total revenues

$        258


$        194


$        421


33%


(39)%

Adjusted EBITDA

$          21


$         (46)


$           (5)


NM


NM

Adjusted EBITDA Margin

8%


(24)%


(1)%















Average Vehicles (in whole units)

86,408


73,820


150,632


17%


(43)%

Vehicle Utilization

67%


70%


73%





Transaction Days (in thousands)

5,335


4,732


10,111


13%


(47)%

Total RPD (in dollars)(b)

$     51.06


$     42.11


$     45.79


21%


12%

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

$     1,051


$        900


$     1,024


17%


3%

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

$        197


$        200


$        234


(2)%


(16)%


NM - Not meaningful


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


(a)

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





(b)

Based on December 31, 2020 foreign exchange rates.

LIQUIDITY AND CAPITAL RESOURCES

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

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

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

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

EARNINGS WEBCAST INFORMATION

Hertz Global's live webcast and conference call to discuss its fourth quarter and full year 2021 results will be held on February 23, 2022, at 5:00 p.m. Eastern Time. The conference call will be broadcast live in listen-only mode on the company's investor relations website at IR.Hertz.com. If you would like to ask a question, the dial in number for the conference call is (800) 924-0350; access code 4089409. Investors are encouraged to dial-in approximately 10 minutes prior to the call.  A web replay will remain available on the website for approximately one year.  The earnings release and related supplemental schedules containing the reconciliations of non-GAAP measures will be available on the Hertz website, IR.Hertz.com.

UNAUDITED FINANCIAL DATA, SUPPLEMENTAL SCHEDULES, NON-GAAP MEASURES AND DEFINITIONS

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

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

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

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

ABOUT HERTZ

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

  • the length and severity of COVID-19 and the impact on the Company's vehicle rental business as a result of travel restrictions and business closures or disruptions, as well as the impact on its employee retention and talent management strategies;
  • the Company's ability to purchase adequate supplies of competitively priced vehicles at a reasonable cost as a result of the continuing global semiconductor microchip manufacturing shortage (the "Chip Shortage") and other raw material supply constraints;
  • the impact on the value of the Company's non-program vehicles upon disposition when the Chip Shortage and other raw material supply constraints are alleviated;
  • the Company's ability to attract and retain key employees;
  • levels of travel demand, particularly business and leisure travel in the U.S. and in global markets;
  • significant changes in the competitive environment and the effect of competition in the Company's markets on rental volume and pricing;
  • occurrences that disrupt rental activity during the Company's peak periods;
  • the Company's ability to accurately estimate future levels of rental activity and adjust the number and mix of vehicles used in its rental operations accordingly;
  • the Company's ability to implement its business strategy, including its ability to implement plans to support a large scale electric vehicle fleet and to play a central role in the modern mobility ecosystem;
  • the Company's ability to adequately respond to changes in technology, customer demands and market competition;
  • the mix of program and non-program vehicles in the Company's fleet can lead to increased exposure to residual risk;
  • the Company's ability to dispose of vehicles in the used-vehicle market and use the proceeds of such sales to acquire new vehicles;
  • financial instability of the manufacturers of the Company's vehicles, which could impact its ability to fulfill obligations under repurchase or guaranteed depreciation programs;
  • an increase in the Company's vehicle costs or disruption to its rental activity due to safety recalls by the manufacturers of its vehicles;
  • the Company's access to third-party distribution channels and related prices, commission structures and transaction volumes;
  • the Company's ability to offer an excellent customer experience, retain and increase customer loyalty and market share;
  • the Company's ability to maintain its network of leases and vehicle rental concessions at airports in the U.S. and internationally;
  • the Company's ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;
  • a major disruption in the Company's communication or centralized information networks or a failure to maintain, upgrade and consolidate its information technology systems;
  • the Company's ability to prevent the misuse or theft of information it possess, including as a result of cyber security breaches and other security threats, as well as its ability to comply with privacy regulations;
  • risks associated with operating in many different countries, including the risk of a violation or alleged violation of applicable anti-corruption or anti-bribery laws and our ability to repatriate cash from non-U.S. affiliates without adverse tax consequences;
  • the Company's ability to utilize its net operating loss carryforwards;
  • risks relating to tax laws, including those that affect the Company's ability to deduct certain business interest expenses and offset previously-deferred tax gains, as well as any adverse determinations or rulings by tax authorities;
  • changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, including those related to accounting principles, that affect our operations, the Company's costs or applicable tax rates;
  • the recoverability of the Company's goodwill and indefinite-lived intangible assets when performing impairment analysis;
  • costs and risks associated with potential litigation and investigations, compliance with and changes in laws and regulations and potential exposures under environmental laws and regulations; and
  • the availability of additional or continued sources of financing for the Company's revenue earning vehicles and to refinance its existing indebtedness.

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

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

UNAUDITED FINANCIAL INFORMATION


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS



Three Months Ended
December 31,


Twelve Months Ended
December 31,

(In millions, except per share data)

2021


2020


2021


2020

Revenues

$                1,949


$                1,235


$                7,336


$                5,258

Expenses:








Direct vehicle and operating

1,065


799


3,920


3,423

Depreciation of revenue earning vehicles and lease charges

78


397


497


2,030

Depreciation and amortization of non-vehicle assets

43


57


196


225

Selling, general and administrative

188


139


688


645

Interest expense, net:








Vehicle

41


96


284


455

Non-vehicle

28


34


185


153

Total interest expense, net

69


130


469


608

Technology-related intangible and other asset impairments


20



213

Other (income) expense, net

(1)


6


(21)


(9)

Reorganization items, net


74


677


175

(Gain) from the sale of a business



(400)


Change in fair value of Public Warrants

643



627


Total expenses

2,085


1,622


6,653


7,310

Income (loss) before income taxes

(136)


(387)


683


(2,052)

Income tax (provision) benefit

(125)


97


(318)


329

Net income (loss)

(261)


(290)


365


(1,723)

Net (income) loss attributable to noncontrolling interests

1


1


1


9

Net income (loss) attributable to Hertz Global

(260)


(289)


366


(1,714)

Series A Preferred Stock deemed dividends

(450)



(450)


Net income (loss) available to Hertz Global common stockholders

$                  (710)


$                  (289)


$                    (84)


$               (1,714)

Weighted average number of shares outstanding:








Basic

468


156


315


150

Diluted

468


156


315


150

Earnings (loss) per share:








Basic

$                 (1.52)


$                 (1.85)


$                 (0.27)


$               (11.44)

Diluted

$                 (1.52)


$                 (1.85)


$                 (0.27)


$               (11.44)

 

UNAUDITED CONSOLIDATED BALANCE SHEETS


(In millions, except par value and share data)

December 31,
2021


December 31,
2020

ASSETS




Cash and cash equivalents

$                 2,258


$                 1,096

Restricted cash and cash equivalents:




Vehicle

77


50

Non-vehicle

316


361

Total restricted cash and cash equivalents

393


411

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

2,651


1,507

Receivables:




Vehicle

62


164

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

696


613

Total receivables, net

758


777

Prepaid expenses and other assets

1,017


373

Revenue earning vehicles:




Vehicles

10,836


7,540

Less: accumulated depreciation

(1,610)


(1,478)

Total revenue earning vehicles, net

9,226


6,062

Property and equipment, net

608


666

Operating lease right-of-use assets

1,566


1,675

Intangible assets, net

2,912


2,992

Goodwill

1,045


1,045

Assets held for sale


1,811

Total assets

$               19,783


$               16,908

LIABILITIES AND STOCKHOLDERS' EQUITY




Accounts payable:




Vehicle

$                       56


$                       29

Non-vehicle

516


389

Total accounts payable

572


418

Accrued liabilities

863


759

Accrued taxes, net

157


121

Debt:




Vehicle

7,921


6,024

Non-vehicle

2,986


243

Total debt

10,907


6,267

Public Warrants

1,324


Operating lease liabilities

1,510


1,636

Self-insured liabilities

463


488

Deferred income taxes, net

1,010


730

Total liabilities not subject to compromise

16,806


10,419

Liabilities subject to compromise


4,965

Liabilities held for sale


1,431

Total liabilities

16,806


16,815

Commitments and contingencies




Stockholders' equity:




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


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

5


2

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

(708)


(100)

Additional paid-in capital

6,209


3,047

Retained earnings (Accumulated deficit)

(2,315)


(2,681)

Accumulated other comprehensive income (loss)

(214)


(212)

Stockholders' equity attributable to Hertz Global

2,977


56

Noncontrolling interests


37

Total stockholders' equity

2,977


93

Total liabilities and stockholders' equity

$               19,783


$               16,908

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS



Three Months Ended
December 31,


Twelve Months Ended
December 31,

(In millions)

2021


2020


2021


2020

Cash flows from operating activities:








Net income (loss)

$              (261)


$              (290)


$               365


$           (1,723)

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








Depreciation and reserves for revenue earning vehicles

94


450


600


2,259

Depreciation and amortization, non-vehicle

43


57


196


225

Amortization of deferred financing costs and debt discount (premium)

13


22


122


59

Loss on extinguishment of debt



8


5

Stock-based compensation charges

7


1


10


(2)

Provision for receivables allowance

30


28


125


94

Deferred income taxes, net

145


(110)


270


(353)

Technology-related intangible and other asset impairments


20



213

Reorganization items, net


7


314


8

(Gain) loss from the sale of a business



(400)


(Gain) loss on marketable securities




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



(8)


(24)

Change in fair value of Public Warrants

643



627


Other

3


5


(5)


5

Changes in assets and liabilities:








Non-vehicle receivables

13


(36)


(210)


195

Prepaid expenses and other assets

33


59


(20)


92

Operating lease right-of-use assets

71


89


274


366

Non-vehicle accounts payable

(25)


(126)


(70)


98

Accrued liabilities

(65)


(14)


(108)


(61)

Accrued taxes, net

(65)


(48)


24


(52)

Operating lease liabilities

(77)


(88)


(291)


(375)

Self-insured liabilities

(4)


(1)


(17)


(76)

Net cash provided by (used in) operating activities

598


25


1,806


953

Cash flows from investing activities:








Revenue earning vehicles expenditures

(1,958)


(354)


(7,154)


(5,542)

Proceeds from disposal of revenue earning vehicles

873


1,328


2,818


10,098

Non-vehicle capital asset expenditures

(30)


(9)


(71)


(98)

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

(1)


4


16


60

Sales of marketable securities




74

Collateral payments



(303)


Collateral returned in exchange for letters of credit

12



280


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



871


Other



(1)


(1)

Net cash provided by (used in) investing activities

(1,104)


969


(3,544)


4,591

Cash flows from financing activities:








Proceeds from issuance of vehicle debt

3,861


320


14,323


4,546

Repayments of vehicle debt

(3,144)


(1,820)


(12,607)


(10,751)

Proceeds from issuance of non-vehicle debt

1,505


259


4,644


1,812

Repayments of non-vehicle debt

(6)


(1)


(6,352)


(855)

Payment of financing costs

(31)


(64)


(185)


(75)

Proceeds from Plan Sponsors



2,781


Early redemption premium payment



(85)


Proceeds from issuance of stock, net




28

Proceeds from exercises of Public Warrants

77



77


Proceeds from the issuance of preferred stock, net



1,433


Repurchase of preferred stock

(1,883)



(1,883)


Distributions to common stockholders



(239)


Contributions from (distributions to) noncontrolling interests

(13)


(20)


(38)


(75)

Proceeds from rights offerings, net



1,639


Purchase of treasury shares

(654)



(654)


Payments for Nasdaq listing costs

(9)



(9)


Other




(2)

Net cash provided by (used in) financing activities

(297)


(1,326)


2,845


(5,372)

Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents

(12)


28


(34)


46

Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period

(815)


(304)


1,073


218

Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period(a)

3,466


1,882


1,578


1,360

Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period(a)

$            2,651


$            1,578


$            2,651


$            1,578



(a)

Amounts include cash and cash equivalents and restricted cash and cash equivalents of Donlen which were held for sale as of December 31, 2020.

 

 

Supplemental Schedule I  


HERTZ GLOBAL HOLDINGS, INC. 

CONDENSED STATEMENT OF OPERATIONS BY SEGMENT

Unaudited



Three Months Ended December 31, 2021


Three Months Ended December 31, 2020

(In millions)

Americas
RAC


International
RAC


All other
operations


Corporate


Hertz
Global


Americas
RAC


International
RAC


All other
operations


Corporate


Hertz
Global

Revenues

$      1,691


$              258


$               —


$             —


$      1,949


$         899


$              194


$            142


$             —


$      1,235

Expenses:




















Direct vehicle and operating

908


154



3


1,065


649


145


6


(1)


799

Depreciation of revenue earning vehicles and lease charges

30


48




78


272


42


83



397

Depreciation and amortization of non-vehicle assets

36


4



3


43


46


5


2


4


57

Selling, general and administrative

90


39



59


188


53


35


8


43


139

Interest expense, net:




















Vehicle

31


10




41


64


20


12



96

Non-vehicle

(6)




34


28


(1)



1


34


34

Total interest expense, net

25


10



34


69


63


20


13


34


130

Technology-related intangible and other asset impairments







20




20

Other (income) expense, net

(2)


1




(1)


1


3



2


6

Reorganization items, net






8



2


64


74

(Gain) from the sale of a business










Change in fair value of Public Warrants




643


643






Total expenses

1,087


256



742


2,085


1,092


270


114


146


1,622

Income (loss) before income taxes

$         604


$                   2


$               —


$         (742)


(136)


$        (193)


$               (76)


$              28


$         (146)


(387)

Income tax (provision) benefit









(125)










97

Net income (loss)









(261)










(290)

Net (income) loss attributable to noncontrolling interests









1










1

Net income (loss) attributable to Hertz Global









(260)










(289)

Series A Preferred Stock deemed dividends









(450)










Net income (loss) attributable to Hertz Global common stockholders









$        (710)










$        (289)


 



Supplemental Schedule I (continued)




HERTZ GLOBAL HOLDINGS, INC.

CONDENSED STATEMENT OF OPERATIONS BY SEGMENT

Unaudited



Twelve Months Ended December 31, 2021


Twelve Months Ended December 31, 2020

(In millions)

Americas
RAC


International
RAC


All other
operations


Corporate


Hertz
Global


Americas
RAC


International
RAC


All other
operations


Corporate


Hertz
Global

Revenues

$     6,215


$            985


$          136


$          —


$     7,336


$     3,756


$            872


$          630


$          —


$     5,258

Expenses:




















Direct vehicle and operating

3,302


606


5


7


3,920


2,763


647


18


(5)


3,423

Depreciation of revenue earning vehicles and lease
charges

343


154




497


1,352


243


435



2,030

Depreciation and amortization of non-vehicle assets

166


16


2


12


196


182


19


10


14


225

Selling, general and administrative

282


136


10


260


688


283


164


19


179


645

Interest expense, net:




















Vehicle

213


59


12



284


329


80


46



455

Non-vehicle

(15)


3


1


196


185


(70)



(6)


229


153

Total interest expense, net

198


62


13


196


469


259


80


40


229


608

Technology-related intangible and other asset
impairments







20



193


213

Other (income) expense, net

(10)


(1)



(10)


(21)


(21)


7



5


(9)

Reorganization items, net

80


12


(1)


586


677


8



2


165


175

(Gain) from the sale of a business




(400)


(400)






Change in fair value of Public Warrants




627


627






Total expenses

4,361


985


29


1,278


6,653


4,826


1,180


524


780


7,310

Income (loss) before income taxes

$     1,854


$               —


$          107


$    (1,278)


683


$    (1,070)


$           (308)


$          106


$       (780)


(2,052)

Income tax (provision) benefit









(318)










329

Net income (loss)









365










(1,723)

Net (income) loss attributable to noncontrolling interests









1










9

Net income (loss) attributable to Hertz Global









366










(1,714)

Series A Preferred Stock deemed dividends









(450)










Net income (loss) attributable to Hertz Global common
stockholders









$         (84)










$    (1,714)

 




Supplemental Schedule II





HERTZ GLOBAL HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURE - ADJUSTED NET INCOME (LOSS), ADJUSTED DILUTED EARNINGS (LOSS) PER SHARE AND ADJUSTED CORPORATE EBITDA

Unaudited



Three Months Ended
December 31,


Twelve Months Ended
December 31,

(In millions, except per share data)

2021


2020


2021


2020

Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share:








Net income (loss) attributable to Hertz Global

$                 (260)


$                 (289)


$                  366


$              (1,714)

Adjustments:








  Income tax provision (benefit)

125


(97)


318


(329)

  Vehicle and non-vehicle debt-related charges(a)(n)

13


22


129


66

  Technology-related intangible and other asset impairments(b)


20



213

  Restructuring and restructuring related charges(c)

4


10


76


64

  Information technology and finance transformation costs(d)

(1)


8


12


42

  Acquisition accounting-related depreciation and amortization(e)

7


13


43


54

  Reorganization items, net(f)


74


677


175

  Pre-reorganization and non-debtor financing charges(g)


20


42


109

  Gain from the Donlen Sale(h)



(400)


  Change in fair value of Public Warrants

643



627


  Other items(i)(q)

37


3


(45)


1

Adjusted pre-tax income (loss)(j)

568


(216)


1,845


(1,319)

Income tax (provision) benefit on adjusted pre-tax income (loss)(k)

(142)


29


(461)


172

Adjusted Net Income (Loss)

$                  426


$                 (187)


$               1,384


$              (1,147)

Weighted-average number of diluted shares outstanding

468


156


315


150

Adjusted Diluted Earnings (Loss) Per Share(l)

$                 0.91


$                (1.20)


$                 4.39


$                (7.66)

Adjusted Corporate EBITDA:








Net income (loss) attributable to Hertz Global

$                 (260)


$                 (289)


$                  366


$              (1,714)

Adjustments:








  Income tax provision (benefit)

125


(97)


318


(329)

  Non-vehicle depreciation and amortization(m)

43


57


196


225

  Non-vehicle debt interest, net of interest income(n)

28


34


185


153

  Vehicle debt-related charges(a)(o)

10


18


72


55

  Technology-related intangible and other asset impairments(b)


20



213

  Restructuring and restructuring related charges(c)

4


10


76


64

  Information technology and finance transformation costs(d)

(1)


8


12


42

  Reorganization items, net(f)


74


677


175

  Pre-reorganization and non-debtor financing charges(g)


20


42


109

  Gain from the Donlen Sale(h)



(400)


  Change in fair value of Public Warrants

643



627


  Other items(i)(p)

36


5


(41)


12

Adjusted Corporate EBITDA

$                  628


$                 (140)


$               2,130


$                 (995)




Supplemental Schedule II (continued)



(a)

Represents debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.



(b)

In 2020, represents a $193 million impairment of technology-related intangible assets and capitalized cloud computing implementation costs related to the Company's corporate operations ("Corporate") and a $20 million impairment of the Hertz tradename in the Company's International RAC segment.



(c)

Represents charges incurred under restructuring actions as defined in U.S. GAAP. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives. For the year ended December 31, 2021, charges incurred were $36 million, $32 million and $8 million in Corporate, Americas RAC and International RAC, respectively. For the year ended December 31, 2020, charges incurred were $39 million, $24 million and $1 million in Americas RAC, Corporate and International RAC, respectively.



(d)

Represents costs associated with the Company's information technology and finance transformation programs, both of which are multi-year initiatives to upgrade and modernize the Company's systems and processes. These costs relate primarily to Corporate.



(e)

Represents incremental expense associated with the amortization of other intangible assets and depreciation of property and equipment relating to acquisition accounting.



(f)

Represents charges incurred associated with the Reorganization and emergence from Chapter 11, including professional fees. The charges relate primarily to Corporate.




Three Months Ended

December 31,


Twelve Months Ended

December 31,

(In millions)

2021


2020


2021


2020

Professional fees and other bankruptcy related costs

$                        —


$                       74


$                     257


$                     175

Loss on extinguishment of debt



191


Backstop fee



164


Breakup fee



77


Contract settlements



25


Cancellation of share-based compensation grants



(10)


Net gain on settlement of liabilities subject to compromise



(22)


Other, net



(5)


Reorganization items, net

$                        —


$                       74


$                     677


$                     175



(g)

Represents charges incurred prior to the filing of the Chapter 11 Cases comprised of preparation charges for the Reorganization, such as professional fees. Also includes, certain non-debtor financing and professional fee charges. For the year ended December 31, 2021, charges incurred were $17 million, $17 million, $6 million and $2 million in Corporate, Americas RAC, International RAC and all other operations, respectively. For the three months ended December 31, 2020, charges incurred were $11 million, $10 million, $2 million and $(3) million in Americas RAC, Corporate, all other operations and International RAC, respectively, and for the year ended December 31, 2020 charges incurred were $46 million, $44 million, $13 million and $6 million in Corporate, Americas RAC, International RAC and all other operations, respectively.



(h)

Represents the gain from the sale of the Company's Donlen business on March 30, 2021, primarily associated with Corporate.



(i)

Represents miscellaneous items. For 2021, includes $100 million associated with the suspension of depreciation during the first quarter for the Donlen business while classified as held for sale in all other operations, partially offset by $17 million for certain professional fees primarily associated with Corporate, $14 million of charges related to the settlement of bankruptcy claims primarily associated with Corporate, charges for a multiemployer pension plan withdrawal liability recorded in Corporate and letter of credit fees recorded primarily in Corporate. For 2020, includes a $20 million gain on the sale of non-vehicle capital assets in Americas RAC, which was recorded in the first quarter, partially offset by charges of $18 million for losses associated with certain vehicle damages which were recorded in the second quarter in Americas RAC.




Supplemental Schedule II (continued)



(j)

Adjustments by caption on a pre-tax basis were as follows:



Increase (decrease) to expenses

Three Months Ended

December 31,


Twelve Months Ended

December 31,

(In millions)

2021


2020


2021


2020

Direct vehicle and operating

$                      (12)


$                        (4)


$                       33


$                      (87)

Selling, general and administrative

2


(25)


(90)


(129)

Interest expense, net:








Vehicle

(10)


(32)


(91)


(105)

Non-vehicle

(3)


(4)


(57)


(11)

  Total interest expense, net

(13)


(36)


(148)


(116)

Intangible and other asset impairments


(20)



(213)

Other income (expense), net

(37)


(11)


(52)


(4)

Reorganization items, net


(74)


(677)


(175)

Gain from the Donlen Sale



400


Change in fair value of Public Warrants

(643)



(627)


Total adjustments

$                    (703)


$                    (170)


$                (1,161)


$                    (724)



(k)

Derived utilizing a combined statutory rate of 25% and 13% for the periods ended December 31, 2021 and 2020, respectively, applied to the respective Adjusted Pre-tax Income
(Loss).



(l)

Adjustments used to reconcile diluted earnings (loss) per share on a GAAP basis to Adjusted Diluted Earnings (Loss) Per Share are comprised of the same adjustments, inclusive of the tax impact, used to reconcile net income (loss) to Adjusted Net Income (Loss) divided by the weighted-average diluted shares outstanding during the period.



(m)

Non-vehicle depreciation and amortization expense for Americas RAC, International RAC and Corporate for the three months ended December 31, 2021 was $36 million, $4 million and $3 million, respectively. For the three months ended December 31, 2020 was $46 million, $5 million, $2 million and $4 million for Americas RAC, International RAC, All other operations and Corporate, respectively. Non-vehicle depreciation and amortization for Americas RAC, International RAC, All other operations and Corporate for the twelve months ended December 31, 2021 were $166 million, $16 million, $2 million and $12 million, respectively, and for the twelve months ended December 31, 2020 were $182 million, $19 million, $10 million and $14 million, respectively.



(n)

In 2021, includes $8 million of loss on extinguishment of debt associated with the payoff and termination of non-vehicle debt in Corporate in the second quarter of 2021.



(o)

Vehicle debt-related charges for Americas RAC and International RAC for the three months ended December 31, 2021 were $6 million and $4 million, respectively. For the three months ended December 31, 2020 vehicle debt-related charges for Americas RAC, International RAC and All other operations were $12 million, $4 million and $2 million, respectively. Vehicle debt-related charges for Americas RAC, International RAC and All other operations for the twelve months ended December 31, 2021 were $53 million, $16 million and $2 million, respectively, and for the twelve months ended December 31, 2020 were $36 million, $15 million and $4 million, respectively.



(p)

Also includes an adjustment for non-cash stock-based compensation charges in Corporate.



(q)

Also includes letter of credit fees recorded in the second half of 2021 in Corporate.

 


Supplemental Schedule III



HERTZ GLOBAL HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURE - ADJUSTED OPERATING CASH FLOW

AND ADJUSTED FREE CASH FLOW

Unaudited



Three Months Ended
December 31,


Twelve Months Ended
December 31,

(In millions)

2021


2021

ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW:




Net cash provided by (used in) operating activities

$                                 598


$                              1,806

Depreciation and reserves for revenue earning vehicles

(94)


(600)

Bankruptcy related payments - post emergence

69


257

Adjusted operating cash flow

573


1,463

Non-vehicle capital asset expenditures, net

(31)


(55)

Adjusted operating cash flow before vehicle investment

542


1,408

Net fleet growth after financing

(32)


(1,980)

Noncontrolling interests

(1)


(26)

Adjusted free cash flow

$                                 509


$                                (598)





CALCULATION OF NET FLEET GROWTH AFTER FINANCING:




Revenue earning vehicles expenditures

$                             (1,958)


$                             (7,154)

Proceeds from disposal of revenue earning vehicles

873


2,818

Revenue earning vehicles capital expenditures, net

(1,085)


(4,336)

Depreciation and reserves for revenue earning vehicles

94


600

Financing activity related to vehicles:




Borrowings

3,861


14,323

Payments

(3,144)


(12,607)

Restricted cash changes, vehicle(a)

242


40

Net financing activity related to vehicles

959


1,756

Net fleet growth after financing

$                                  (32)


$                             (1,980)


Note: Adjusted free cash flow for the fourth quarter and full year 2020 are not shown in the above table because they are not comparable to the corresponding periods in 2021 due to the Company's restructuring.



(a)

The twelve months ended December 31, 2021 includes a $68 million impact related to restricted cash classified as held for sale as of
December 31, 2020.

 

Supplemental Schedule III (continued)


HERTZ GLOBAL HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURE - ADJUSTED OPERATING CASH FLOW

AND ADJUSTED FREE CASH FLOW

Unaudited



Three Months Ended
December 31,


Twelve Months Ended
December 31,

(In millions)

2019


2019

ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW:




Net cash provided by (used in) operating activities

$                                 667


$                              2,900

Depreciation and reserves for revenue earning vehicles

(735)


(2,791)

Bankruptcy related payments - post emergence


Adjusted operating cash flow

(68)


109

Non-vehicle capital asset expenditures, net

(48)


(197)

Adjusted operating cash flow before vehicle investment

(116)


(88)

Net fleet growth after financing

564


(161)

Noncontrolling interests

(5)


47

Adjusted free cash flow

$                                 443


$                                (202)





CALCULATION OF NET FLEET GROWTH AFTER FINANCING:




Revenue earning vehicles expenditures

$                             (2,178)


$                          (13,714)

Proceeds from disposal of revenue earning vehicles

3,293


9,486

Revenue earning vehicles capital expenditures, net

1,115


(4,228)

Depreciation and reserves for revenue earning vehicles

735


2,791

Financing activity related to vehicles:




Borrowings

1,974


13,013

Payments

(2,992)


(11,530)

Restricted cash changes, vehicle(a)

(268)


(207)

Net financing activity related to vehicles

(1,286)


1,276

Net fleet growth after financing

$                                 564


$                                (161)


 

Supplemental Schedule IV


HERTZ GLOBAL HOLDINGS, INC.

NET DEBT CALCULATION

Unaudited



As of December 31, 2021

(In millions)

Vehicle


Non-Vehicle


Total

Term loans

$                  —


$             1,539


$             1,539

Senior notes


1,500


1,500

U.S. vehicle financing (HVF III)

7,001



7,001

International vehicle financing (Various)

860



860

Other debt

93


16


109

Debt issue costs, discounts and premiums

(33)


(69)


(102)

Debt as reported in the balance sheet

7,921


2,986


10,907

Add:






Debt issue costs, discounts and premiums

33


69


102

Less:






Cash and cash equivalents


2,258


2,258

Restricted cash

77



77

Restricted cash and restricted cash equivalents associated with Term C Loan


245


245

Net Debt

$             7,877


$                552


$             8,429







Corporate leverage ratio(a)



0.3x





Note: Net Debt at December 31, 2020 is not shown in the above table because it is not comparable to Net Debt at December 31, 2021 due to the Company's restructuring.



(a)

Corporate leverage ratio is calculated as non-vehicle net debt divided by Adjusted Corporate EBITDA.

 

Supplemental Schedule V


HERTZ GLOBAL HOLDINGS, INC.

KEY METRICS CALCULATIONS

REVENUE, UTILIZATION AND DEPRECIATION

Unaudited


Global RAC



Three Months Ended

December 31,


Percent
Inc/(Dec)


Twelve Months Ended
December 31,


Percent
Inc/(Dec)

($ in millions, except where noted)

2021


2020



2021


2020


Total RPD












Revenues