HERTZ REPORTS SECOND QUARTER 2023 RESULTS: REVENUE OF $2.4 BILLION, NET INCOME OF $139 MILLION AND ADJUSTED CORPORATE EBITDA OF $347 MILLION

Jul 27, 2023

"Results for the second quarter were strong, reflecting continued high demand for our services and elevated levels of fleet utilization," said Stephen Scherr, Chair and CEO of Hertz. "Our focus on asset returns continues to yield tangible results, enabling us to advance the growth of our rideshare business and the revitalization of the Dollar brand, in addition to facilitating ongoing investments in technology and electrification. Through the hard work and dedication of Hertz employees, we are positioned well to serve our customers through the busy summer season."

ESTERO, Fla., July 27, 2023 /PRNewswire/ -- Hertz Global Holdings, Inc. (NASDAQ: HTZ) ("Hertz", "Hertz Global" or the "Company") today reported results for its second quarter 2023.

HIGHLIGHTS 

  • Total revenues of $2.4 billion
  • GAAP net income of $139 million, a 6% margin, or $0.44 per diluted share
  • Adjusted Net Income of $227 million, or $0.72 per adjusted diluted share
  • Adjusted Corporate EBITDA of $347 million, a 14% margin
  • Operating cash flow of $497 million, adjusted operating cash flow of $91 million
  • Adjusted free cash outflow of $423 million
  • Corporate liquidity of $1.4 billion at June 30, including $682 million in unrestricted cash
  • Company utilized $100 million to repurchase 6.3 million common shares during the quarter

SECOND QUARTER RESULTS

Second quarter revenue of $2.4 billion was characterized by continued strength in demand. Volume increased 12% year over year while average fleet was up 9%. Monthly revenue per unit in the quarter of $1,516 benefited from utilization of 82%, an increase of 230 bps relative to Q2 2022. Fleet depreciation was $329 million, reflecting a year over year increase of $223 million attributable to a reduction in vehicle disposition gains which were at elevated levels in 2022.

Adjusted Corporate EBITDA was $347 million in the quarter, reflecting a healthy 14% margin.

Adjusted free cash outflow of $423 million in the quarter reflected an investment in fleet to meet spring and summer demand.

The Company's liquidity position was $1.4 billion at June 30, 2023, of which $682 million was unrestricted cash.

SUMMARY RESULTS


Three Months Ended

June 30,


Percent

 Inc/(Dec)

2023 vs 2022

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

2023


2022


Hertz Global - Consolidated






Total revenues

$          2,437


$          2,344


4 %

Adjusted net income (loss)(a)

$             227


$             520


(56) %

Adjusted diluted earnings (loss) per share(a)

$            0.72


$            1.22


(41) %

Adjusted Corporate EBITDA(a)

$             347


$             764


(55) %

Adjusted Corporate EBITDA Margin(a)

14 %


33 %









Average Vehicles (in whole units)

561,277


513,307


9 %

Average Rentable Vehicles (in whole units)

533,813


490,236


9 %

Vehicle Utilization

82 %


79 %



Transaction Days (in thousands)

39,705


35,444


12 %

Total RPD (in dollars)(b)

$          61.14


$          65.79


(7) %

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

$          1,516


$          1,586


(4) %

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

$             195


$               68


NM







Americas RAC Segment






Total revenues

$          2,015


$          1,973


2 %

Adjusted EBITDA

$             331


$             770


(57) %

Adjusted EBITDA Margin

16 %


39 %









Average Vehicles (in whole units)

457,405


422,113


8 %

Average Rentable Vehicles (in whole units)

431,921


399,588


8 %

Vehicle Utilization

83 %


80 %



Transaction Days (in thousands)

32,469


29,160


11 %

Total RPD (in dollars)(b)

$          62.03


$          67.52


(8) %

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

$          1,554


$          1,643


(5) %

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

$             198


$               49


NM







International RAC Segment






Total revenues

$             422


$             371


14 %

Adjusted EBITDA

$               96


$               92


4 %

Adjusted EBITDA Margin

23 %


25 %









Average Vehicles (in whole units)

103,872


91,194


14 %

Average Rentable Vehicles (in whole units)

101,892


90,648


12 %

Vehicle Utilization

78 %


76 %



Transaction Days (in thousands)

7,237


6,284


15 %

Total RPD (in dollars)(b)

$          57.16


$          57.77


(1) %

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

$          1,353


$          1,335


1 %

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

$             180


$             160


13 %


NM - Not meaningful

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

(b)   Based on  December 31, 2022 foreign exchange rates.

 

EARNINGS WEBCAST INFORMATION

Hertz Global's live webcast and conference call to discuss its second quarter 2023 results will be held on July 27, 2023, at 8:30 a.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 access the call by phone and ask a question, please go to https://register.vevent.com/register/BI2102718ea246452781a1fcfa0f708a95, and you will be provided with dial in details. Investors are encouraged to dial-in approximately 15 minutes prior to the call.  A web replay will remain available on the website for approximately one year. The earnings release and related supplemental schedules containing the reconciliations of non-GAAP measures will be available on the Hertz website, IR.Hertz.com.

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

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

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 Company's ability to purchase adequate supplies of competitively priced vehicles at a reasonable cost in order to efficiently service rental demand, including as a result of disruptions in the global supply chain;
  • the Company's ability to attract and retain effective frontline employees, senior management and other 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 particularly in critical geographies;
  • 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 or strategic transactions, including its ability to implement plans to support a large-scale electric vehicle fleet, execute its rideshare strategy and to play a central role in the modern mobility ecosystem;
  • the Company's ability to adequately respond to changes in technology impacting the mobility industry;
  • the mix of vehicles in the Company's fleet, including but not limited to program and non-program vehicles, which can lead to increased exposure to residual risk upon disposition;
  • increases in vehicle holding periods, which may result in additional maintenance costs and lower customer satisfaction;
  • financial instability of the manufacturers of the Company's vehicles, which could impact their ability to fulfill obligations under repurchase or guaranteed depreciation programs;
  • increases in the level of recall activity by the manufacturers of the Company's vehicles, which may increase the Company's costs and can disrupt its rental activity;
  • the Company's access to third-party distribution channels and related prices, commission structures and transaction volumes associated with those channels;
  • the Company's ability to offer an excellent customer experience, retain and increase customer loyalty and increase market share;
  • the Company's ability to maintain its network of leases and vehicle rental concessions at airports and other key locations in the U.S. and internationally;
  • the Company's ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;
  • the Company's ability to effectively manage its union relations and labor agreement negotiations;
  • the Company's ability, and that of its key third-party partners, to prevent the misuse or theft of information the Company possesses, including as a result of cyber security breaches and other security threats, as well as to comply with privacy regulations across the globe;
  • a major disruption in the Company's communication or centralized information networks or a failure to maintain, upgrade and consolidate its information technology systems;
  • risks associated with operating in many different countries, including the risk of a violation or alleged violation of applicable anti-corruption or anti-bribery laws and the Company's ability to repatriate cash from non-U.S. affiliates without adverse tax consequences;
  • risks relating to tax laws, including those that affect the Company's ability to offset future tax on fleet dispositions, as well as any adverse determinations or rulings by tax authorities;
  • the Company's ability to utilize its net operating loss carryforwards;
  • the Company's exposure to uninsured liabilities relating to personal injury, death and property damage, or otherwise;
  • changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, including those related to accounting principles, that affect the Company's operations, its costs or applicable tax rates;
  • the recoverability of the Company's goodwill and indefinite-lived intangible assets when performing impairment analysis;
  • costs and risks associated with potential litigation and investigations, compliance with and changes in laws and regulations and potential exposures under environmental laws and regulations;
  • the Company's ability to comply with ESG regulations, meet increasing ESG expectations of stakeholders, and otherwise achieve ESG goals;
  • the availability of additional or continued sources of financing at acceptable rates for the Company's revenue earning vehicles and to refinance its existing indebtedness;
  • volatility in the Company's stock price and certain provisions of its charter documents which could negatively affect the market price of the Company's common stock;
  • the Company's ability to effectively maintain effective internal controls over financial reporting; and
  • the Company's ability to implement an effective business continuity plan to protect the business in exigent circumstances.

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

June 30,


Six Months Ended

June 30,

(In millions, except per share data)

2023


2022


2023


2022

Revenues

$              2,437


$             2,344


$              4,484


$              4,154

Expenses:








Direct vehicle and operating

1,347


1,199


2,568


2,252

Depreciation of revenue earning vehicles and lease charges, net

329


106


710


47

Depreciation and amortization of non-vehicle assets

32


36


67


69

Selling, general and administrative

285


257


506


492

Interest expense, net:








  Vehicle

132


45


243


50

  Non-vehicle

56


41


107


80

Total interest expense, net

188


86


350


130

Other (income) expense, net

(2)


2


7


(Gain) on sale of non-vehicle capital assets



(162)


Change in fair value of Public Warrants

100


(461)


218


(511)

Total expenses

2,279


1,225


4,264


2,479

Income (loss) before income taxes

158


1,119


220


1,675

Income tax (provision) benefit

(19)


(179)


115


(309)

Net income (loss)

$                 139


$                940


335


1,366









Weighted average number of shares outstanding:








  Basic

314


398


318


415

  Diluted

315


424


319


443

Earnings (loss) per share:








  Basic

$                0.44


$               2.36


$                1.06


$                3.29

  Diluted

$                0.44


$               1.13


$                1.05


$                1.93

 

UNAUDITED CONSOLIDATED BALANCE SHEETS 

 

(In millions, except par value and share data)

June 30, 2023


December 31,

2022

ASSETS




Cash and cash equivalents

$                  682


$                  943

Restricted cash and cash equivalents:




Vehicle

190


180

Non-vehicle

294


295

Total restricted cash and cash equivalents

484


475

Total cash and cash equivalents and restricted cash and cash equivalents

1,166


1,418

Receivables:




Vehicle

132


111

Non-vehicle, net of allowance of $39 and $45, respectively

1,160


863

Total receivables, net

1,292


974

Prepaid expenses and other assets

1,031


1,155

Revenue earning vehicles:




Vehicles

17,833


14,281

Less: accumulated depreciation

(1,988)


(1,786)

Total revenue earning vehicles, net

15,845


12,495

Property and equipment, net

665


637

Operating lease right-of-use assets

2,169


1,887

Intangible assets, net

2,883


2,887

Goodwill

1,044


1,044

Total assets

$             26,095


$             22,497

LIABILITIES AND STOCKHOLDERS' EQUITY




Accounts payable:




Vehicle

$                  358


$                    79

Non-vehicle

577


578

Total accounts payable

935


657

Accrued liabilities

971


911

Accrued taxes, net

229


170

Debt:




Vehicle

13,100


10,886

Non-vehicle

3,470


2,977

Total debt

16,570


13,863

Public Warrants

835


617

Operating lease liabilities

2,072


1,802

Self-insured liabilities

451


472

Deferred income taxes, net

1,193


1,360

Total liabilities

23,256


19,852

Commitments and contingencies




Stockholders' equity:




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


Common stock, $0.01 par value, 479,126,125 and 478,914,062 shares issued, respectively,

and 311,692,986 and 323,483,178 shares outstanding, respectively

5


5

Treasury stock, at cost, 167,433,139 and 155,430,884 common shares, respectively

(3,338)


(3,136)

Additional paid-in capital

6,369


6,326

Retained earnings (Accumulated deficit)

79


(256)

Accumulated other comprehensive income (loss)

(276)


(294)

Total stockholders' equity

2,839


2,645

Total liabilities and stockholders' equity

$             26,095


$             22,497

 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

 


Three Months Ended

June 30,


Six Months Ended

June 30,

(In millions)

2023


2022


2023


2022

Cash flows from operating activities:








Net income (loss)

$             139


$             940


$              335


$          1,366

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








Depreciation and reserves for revenue earning vehicles, net

418


165


884


145

Depreciation and amortization, non-vehicle

32


36


67


69

Amortization of deferred financing costs and debt discount (premium)

15


14


29


25

Stock-based compensation charges

22


36


43


64

Provision for receivables allowance

20


10


40


23

Deferred income taxes, net

(28)


146


(163)


249

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

(3)


(1)


(165)


(3)

Change in fair value of Public Warrants

100


(461)


218


(511)

Changes in financial instruments

(2)


(21)


106


(65)

Other

5


(1)


5


Changes in assets and liabilities:








Non-vehicle receivables

(284)


(157)


(334)


(200)

Prepaid expenses and other assets

(50)


(47)


(98)


(87)

Operating lease right-of-use assets

87


7


165


79

Non-vehicle accounts payable

33


(83)


6


(32)

Accrued liabilities

39


109


68


233

Accrued taxes, net

55


22


56


52

Operating lease liabilities

(94)


(13)


(178)


(93)

Self-insured liabilities

(7)


7


(25)


15

Net cash provided by (used in) operating activities

497


708


1,059


1,329

Cash flows from investing activities:








Revenue earning vehicles expenditures

(3,719)


(3,104)


(6,543)


(6,089)

Proceeds from disposal of revenue earning vehicles

1,560


1,416


2,766


2,887

Non-vehicle capital asset expenditures

(78)


(29)


(123)


(59)

Proceeds from non-vehicle capital assets disposed of

1


5


176


6

Collateral returned in exchange for letters of credit


2



19

Return of (investment in) equity investments

(1)



(1)


(15)

Net cash provided by (used in) investing activities

(2,237)


(1,710)


(3,725)


(3,251)

Cash flows from financing activities:








Proceeds from issuance of vehicle debt

1,960


2,699


4,021


7,379

Repayments of vehicle debt

(682)


(1,332)


(1,872)


(4,824)

Proceeds from issuance of non-vehicle debt

825



1,250


Repayments of non-vehicle debt

(329)


(5)


(759)


(10)

Payment of financing costs

(9)


(14)


(17)


(38)

Proceeds from exercises of Public Warrants




3

Share repurchases

(104)


(881)


(222)


(1,647)

Other

1




(4)

Net cash provided by (used in) financing activities

1,662


467


2,401


859

Effect of foreign currency exchange rate changes on cash and cash

   equivalents and restricted cash and cash equivalents

2


(24)


13


(25)

Net increase (decrease) in cash and cash equivalents and restricted cash and

   cash equivalents during the period

(76)


(559)


(252)


(1,088)

Cash and cash equivalents and restricted cash and cash equivalents at

   beginning of period

1,242


2,122


1,418


2,651

Cash and cash equivalents and restricted cash and cash equivalents at end

   of period

$          1,166


$          1,563


$           1,166


$          1,563

 

Supplemental Schedule I

HERTZ GLOBAL HOLDINGS, INC.

CONDENSED STATEMENT OF OPERATIONS BY SEGMENT

Unaudited

 


Three Months Ended June 30, 2023


Three Months Ended June 30, 2022

(In millions)

Americas

 RAC


International
RAC


Corporate


Hertz

 Global


Americas

 RAC


International
RAC


Corporate


Hertz

 Global

Revenues

$       2,015


$             422


$            —


$       2,437


$       1,973


$             371


$            —


$       2,344

Expenses:
















Direct vehicle and operating

1,139


211


(3)


1,347


1,002


197



1,199

Depreciation of revenue earning vehicles and lease charges, net

272


57



329


61


45



106

Depreciation and amortization of non-vehicle assets

27


3


2


32


30


4


2


36

Selling, general and administrative

148


45


92


285


99


47


111


257

Interest expense, net:
















  Vehicle

113


19



132


35


10



45

  Non-vehicle

(4)


(5)


65


56


(13)



54


41

  Total interest expense, net

109


14


65


188


22


10


54


86

Other (income) expense, net


(4)


2


(2)


(1)


(4)


7


2

Change in fair value of Public Warrants



100


100




(461)


(461)

  Total expenses

1,695


326


258


2,279


1,213


299


(287)


1,225

Income (loss) before income taxes

$          320


$               96


$        (258)


158


$         760


$               72


$         287


1,119

Income tax (provision) benefit







(19)








(179)

Net income (loss)







$          139








$          940

 

Supplemental Schedule I (continued)

HERTZ GLOBAL HOLDINGS, INC.

CONDENSED STATEMENT OF OPERATIONS BY SEGMENT

Unaudited

 


Six Months Ended June 30, 2023


Six Months Ended June 30, 2022

(In millions)

Americas

 RAC


International
RAC


Corporate


Hertz 

Global


Americas

 RAC


International
RAC


Corporate


Hertz

 Global

Revenues

$       3,745


$             739


$            —


$       4,484


$       3,531


$             623


$            —


$       4,154

Expenses:
















Direct vehicle and operating

2,178


393


(3)


2,568


1,905


348


(1)


2,252

Depreciation of revenue earning vehicles and lease charges, net

621


89



710


(32)


79



47

Depreciation and amortization of non-vehicle assets

55


5


7


67


56


7


6


69

Selling, general and administrative

253


82


171


506


185


89


218


492

Interest expense, net:
















  Vehicle

206


37



243


37


13



50

  Non-vehicle

(22)


(7)


136


107


(21)



101


80

  Total interest expense, net

184


30


136


350


16


13


101


130

Other (income) expense, net

(1)


2


6


7


(2)


(7)


9


(Gain) on sale of non-vehicle capital assets

(162)




(162)





Change in fair value of Public Warrants



218


218




(511)


(511)

  Total expenses

3,128


601


535


4,264


2,128


529


(178)


2,479

Income (loss) before income taxes

$          617


$             138


$        (535)


220


$       1,403


$               94


$          178


1,675

Income tax (provision) benefit







115








(309)

Net income (loss)







$          335








$       1,366

 

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

June 30,


Six Months Ended

June 30,

(In millions, except per share data)

2023


2022


2023


2022

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








Net income (loss)

$                139


$                940


$                335


$             1,366

Adjustments:








  Income tax provision (benefit)

19


179


(115)


309

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

15


14


29


26

  Restructuring and restructuring related charges(b)

5


15


8


21

  Acquisition accounting-related depreciation and amortization(c)

1



1


1

  Unrealized (gains) losses on financial instruments(d)

(2)


(21)


106


(65)

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



(162)


  Change in fair value of Public Warrants

100


(461)


218


(511)

  Other items(f)(l)

(10)


27


4


83

Adjusted pre-tax income (loss)(g)

267


693


424


1,230

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

(40)


(173)


(64)


(307)

Adjusted Net Income (Loss)

$                227


$                520


$                360


$                923

Weighted-average number of diluted shares outstanding

315


424


319


443

Adjusted Diluted Earnings (Loss) Per Share(i)

$               0.72


$               1.22


$               1.13


$               2.08

Adjusted Corporate EBITDA:








Net income (loss)

$                139


$                940


$                335


$             1,366

Adjustments:








  Income tax provision (benefit)

19


179


(115)


309

  Non-vehicle depreciation and amortization(j)

32


36


67


69

  Non-vehicle debt interest, net of interest income 

56


41


107


80

  Vehicle debt-related charges(a)(k)

10


9


20


16

  Restructuring and restructuring related charges(b)

5


15


8


21

  Unrealized (gains) losses on financial instruments(d)

(2)


(21)


106


(65)

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



(162)


  Change in fair value of Public Warrants

100


(461)


218


(511)

  Other items(f)(m)

(12)


26



93

Adjusted Corporate EBITDA

$                347


$                764


$                584


$             1,378



(a)

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

(b)

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 2023, charges incurred related primarily to International RAC and Corporate. For 2022, charges incurred related primarily to International RAC.

(c)

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


Supplemental Schedule II (continued)



(d)

Represents unrealized gains (losses) on derivative financial instruments, primarily associated with Americas RAC. In the six months ended June 30, 2023, also includes the realization of $88 million of previously unrealized gains resulting from the unwind of certain interest rate caps in Americas RAC.

(e)

Represents gain on the sale of certain non-vehicle capital assets sold in March 2023 in Americas RAC.

(f) 

Represents miscellaneous items. For 2023, primarily includes a loss recovery settlement in Americas RAC, partially offset by certain IT related charges primarily in Corporate. For 2022, primarily includes bankruptcy claims, certain professional fees and charges related to the settlement of bankruptcy claims.

(g)

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



Increase (decrease) to expenses

Three Months Ended June 30,


Six Months Ended June 30,

(In millions)

2023


2022


2023


2022

Direct vehicle and operating

$                    17


$                   (19)


$                    17


$                   (21)

Depreciation of revenue earning vehicles and lease charges, net



2


Selling, general and administrative

(13)


(6)


(27)


(11)

Interest expense, net:








  Vehicle

(3)


(9)


(122)


(16)

  Non-vehicle

(9)


(8)


(17)


(14)

    Total interest expense, net

(12)


(17)


(139)


(30)

Other income (expense), net

(1)


7


(1)


(4)

Gain on sale non-vehicle capital assets



162


Change in fair value of Public Warrants

(100)


461


(218)


511

  Total adjustments

$                 (109)


$                  426


$                 (204)


$                  445



(h)

Derived utilizing a combined statutory rate of 15% for the three and six months ended June 30, 2023 and 25% for the three and six months ended June 30, 2022 applied to the respective Adjusted Pre-tax Income (Loss). The decrease in rate is primarily resulting from EV-related tax credits anticipated to be used to decrease the Company's U.S. federal tax provision throughout 2023 based on the Company's expected purchases of electric vehicles.

(i) 

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.

(j) 

Non-vehicle depreciation and amortization expense for Americas RAC, International RAC and Corporate for the three months ended June 30, 2023 was $27 million, $3 million and $2 million, respectively. For the three months ended June 30, 2022 was $30 million, $4 million, and $2 million for Americas RAC, International RAC and Corporate, respectively. Non-vehicle depreciation and amortization expense for Americas RAC, International RAC and Corporate for the six months ended June 30, 2023 was $55 million, $5 million and $7 million, respectively. For the six months ended June 30, 2022 was $56 million, $7 million and $6 million for Americas RAC, International RAC and Corporate, respectively

(k)

Vehicle debt-related charges for Americas RAC and International RAC for the three months ended June 30, 2023 were $9 million and $1 million, respectively, and were $3 million and $6 million, respectively, for the three months ended June 30, 2022. Vehicle debt-related charges for Americas RAC and International RAC for the six months ended June 30, 2023 were $17 million and $3 million, respectively, and were $9 million and $7 million, respectively, for the six months ended June 30, 2022.

(l) 

Also includes letter of credit fees recorded primarily in Corporate.

(m)

In 2022, also includes an adjustment for certain non-cash stock-based compensation charges recorded 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

June 30,


Six Months Ended

June 30,

(In millions)

2023


2022


2023


2022

ADJUSTED OPERATING CASH FLOW AND ADJUSTED FREE CASH FLOW:



Net cash provided by (used in) operating activities

$             497


$             708


$         1,059


$          1,329

Depreciation and reserves for revenue earning vehicles, net

(418)


(165)


(884)


(145)

Bankruptcy related payments (post emergence) and other payments

12


42


20


78

Adjusted operating cash flow

91


585


195


1,262

Non-vehicle capital asset proceeds (expenditures), net

(77)


(24)


53


(53)

Adjusted operating cash flow before vehicle investment

14


561


248


1,209

Net fleet growth after financing

(437)


(77)


(754)


(646)

Adjusted free cash flow

$           (423)


$             484


$           (506)


$             563









CALCULATION OF NET FLEET GROWTH AFTER FINANCING:



Revenue earning vehicles expenditures

$         (3,719)


$         (3,104)


$        (6,543)


$         (6,089)

Proceeds from disposal of revenue earning vehicles

1,560


1,416


2,766


2,887

Revenue earning vehicles capital expenditures, net

(2,159)


(1,688)


(3,777)


(3,202)

Depreciation and reserves for revenue earning vehicles, net

418


165


884


145

Financing activity related to vehicles:








Borrowings

1,960


2,699


4,021


7,379

Payments

(682)


(1,332)


(1,872)


(4,824)

Restricted cash changes, vehicle

26


79


(10)


(144)

Net financing activity related to vehicles

1,304


1,446


2,139


2,411

Net fleet growth after financing

$           (437)


$             (77)


$           (754)


$           (646)

 

Supplemental Schedule IV

HERTZ GLOBAL HOLDINGS, INC.

NET DEBT CALCULATION

Unaudited

 


As of June 30, 2023


As of December 31, 2022

(In millions)

Vehicle


Non-Vehicle


Total


Vehicle


Non-Vehicle


Total

Term loans

$                    —


$               1,519


$               1,519


$                    —


$               1,526


$               1,526

First Lien RCF


500


500




Senior notes


1,500


1,500



1,500


1,500

U.S. vehicle financing (HVF III)

11,095



11,095


9,406



9,406

International vehicle financing (Various)

1,982



1,982


1,466



1,466

Other debt

80


4


84


76


9


85

Debt issue costs, discounts and premiums

(57)


(53)


(110)


(62)


(58)


(120)

Debt as reported in the balance sheet

13,100


3,470


16,570


10,886


2,977


13,863

Add:












Debt issue costs, discounts and premiums

57


53


110


62


58


120

Less:












Cash and cash equivalents


682


682



943


943

Restricted cash

190



190


180



180

Restricted cash and restricted cash equivalents associated with Term C Loan


245


245



245


245

Net Debt

$             12,967


$               2,596


$             15,563


$             10,768


$               1,847


$             12,615













Corporate leverage ratio(a)



1.7x






0.8x




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

 

Supplemental Schedule V

HERTZ GLOBAL HOLDINGS, INC.

KEY METRICS CALCULATIONS

REVENUE, UTILIZATION AND DEPRECIATION

Unaudited

 

Global RAC

 


Three Months Ended

June 30,


Percent

Inc/(Dec)


Six Months Ended

June 30,


Percent

Inc/(Dec)

($ in millions, except where noted)

2023


2022



2023


2022


Total RPD












Revenues

$      2,437


$      2,344




$      4,484


$      4,154



Foreign currency adjustment(a)

(9)


(12)




(13)


(29)



Total Revenues - adjusted for foreign currency

$      2,428


$      2,332




$      4,471


$      4,125



Transaction Days (in thousands)

39,705


35,444




73,493


66,065



Total RPD (in dollars)

$      61.14


$      65.79


(7) %


$      60.84


$      62.43


(3) %













Total Revenue Per Unit Per Month












Total Revenues - adjusted for foreign currency

$      2,428


$      2,332




$      4,471


$      4,125



Average Rentable Vehicles (in whole units)

533,813


490,236




508,550


472,871



Total revenue per unit (in whole dollars)

$      4,548


$      4,757




$      8,792


$      8,722



Number of months in period (in whole units)

3


3




6


6



Total RPU Per Month (in whole dollars)

$      1,516


$      1,586


(4) %


$      1,465


$      1,454


1 %













Vehicle Utilization












Transaction Days (in thousands)

39,705


35,444




73,493


66,065



Average Rentable Vehicles (in whole units)

533,813


490,236




508,550


472,871



Number of days in period (in whole units)

91


91




181


181



Available Car Days (in thousands)

48,576


44,615




92,079


85,616



Vehicle Utilization(b)

82 %


79 %




80 %


77 %















Depreciation Per Unit Per Month












Depreciation of revenue earning vehicles and lease charges,

   net

$         329


$         106




$         710


$           47



Foreign currency adjustment(a) 

(1)


(1)




(1)


(3)



   Adjusted depreciation of revenue earning vehicles and lease

   charges

$         328


$         105




$         709


$           44



Average Vehicles (in whole units)

561,277


513,307




532,903


497,259



   Adjusted depreciation of revenue earning vehicles and lease

   charges divided by Average Vehicles (in whole dollars)

$         584


$         205




$      1,331


$           89



Number of months in period (in whole units)

3


3