Hertz Global Holdings, Inc. (NYSE: HTZ) reported second quarter 2011 worldwide revenues of $2.1 billion, an increase of 10.3% year-over-year (a 5.8% increase excluding the effects of foreign currency). Worldwide car rental revenues for the quarter increased 9.8% year-over-year (a 5.0% increase excluding the effects of foreign currency) to $1.8 billion. Revenues from worldwide equipment rental for the second quarter were $301.7 million, up 13.5% year-over-year (a 10.5% increase excluding the effects of foreign currency).
Second quarter 2011 adjusted pre-tax income was $184.4 million, versus $95.8 million in the same period in 2010, and income before income taxes (“pre-tax
income”), on a GAAP basis, was $94.6 million, versus a loss of $6.2 million in the second quarter of 2010. Corporate EBITDA for the second quarter of 2011 was $362.1 million, an increase of 28.7% from the same period in 2010.
Second quarter 2011 adjusted net income was $116.6 million, versus $58.5 million in the same period of 2010, resulting in adjusted diluted earnings per share for the quarter of $0.26, compared with $0.14 for the second quarter of 2010. Second quarter 2011 net income attributable to Hertz Global Holdings, Inc. and Subsidiaries’ common stockholders, or “net income,” on a GAAP basis, was $55.0 million or $0.12 per share on a diluted basis, compared with a net loss of $25.1 million, or $0.06 loss per share on a diluted basis, for the second quarter of 2010.
Mark P. Frissora, the Company’ Chairman and Chief Executive Officer, said, “it is especially gratifying to see our global team drive Hertz’ profitability to levels we haven’t seen before. Second quarter 2011 adjusted pre-tax income beat our 2007 pre-recession second quarter by over $27 million, on $100 million lower revenues, with pre-tax margins which were 170 bps higher than 2007, and 380 bps above last year. These excellent results were attributable to strong year-over-year profit improvement in U.S. rent-a-car and our equipment rental businesses, despite major investments in our strategic initiatives.”
The Company ended the second quarter of 2011 with total debt of $11.69 billion and net corporate debt of $4.0 billion, compared with total debt of $10.75 billion and net corporate debt of $3.76 billion as of March 31, 2011. Total debt increased in the second quarter of 2011 primarily due to the seasonally higher fleet levels, partly offset by the redemption of $480 million of our 8.875% Senior Notes in April 2011. Net corporate debt increased primarily due to increased borrowings under our Senior ABL Facility and a decrease in cash and cash equivalents. Net cash provided by operating activities was $521.3 million in the second quarter of 2011, compared to $731.6 million in the same period last year, a decrease of $210.3 million. The decrease was primarily due to the timing of our equipment rental customer receivables and VAT receivables as a result of improvements in the operating performance of our business, as well as timing of our vendor and interest payments. The decrease
was partly offset by an increase in net income before non-cash expenses.
Hertz has increased its full year 2011 guidance for revenues, Corporate EBITDA, adjusted pre-tax income, adjusted net income and adjusted diluted earnings per share as follows:
Revised Guidance Prior Guidance
- Revenues $8.15 to $8.25 bn $8.1 to $8.2 bn
- Corporate EBITDA $1.360 to $1.395 bn $1.320 to $1.360 bn
- Adjusted Pre-Tax Income $635 to $670 mil $595 to $625 mil
- Adjusted Net Income $401 to $424 mil $375 to $395 mil
- Adjusted Diluted EPS $0.91 to $0.96 $0.85 to $0.90
The Company, noting that it has now increased full year guidance five times in the last eight quarters, commented that the current revision reflects better than forecasted performance in the recently completed second quarter of 2011, as well as fleet and other cost efficiencies forecasted to positively impact 2011 results. Additionally, the Company has assumed that macro-economic conditions remain unsettled in the U.S. in the second half of 2011.
RESULTS OF THE HERTZ CORPORATION
The Company’ operating subsidiary, The Hertz Corporation (“Hertz”), posted the same revenues for the second quarter of 2011 as the Company. Hertz’ second quarter 2011 pre-tax income was $107.0 million versus the Company’ pre-tax income of $94.6 million. The difference between Hertz’ and the Company’ results is primarily due to additional interest expense recognized by the Company on its 5.25% Convertible Senior Notes issued in May and June 2009.
SOURCE Hertz Corporation