PARK RIDGE, N.J. -

Despite sluggish economic conditions in Europe, Hertz Global Holdings established records during 2011 for income, revenue and more as the company recently highlighted its financial performance.

Beginning with a look at fourth-quarter numbers, Hertz reported $2.0 billion in worldwide revenues, an increase of 9.7 percent year-over-year or 9.8 percent year-over-year excluding the effects of foreign currency.

The company’s worldwide car rental revenues for the quarter increased 9.5 percent year-over-year or 9.6 percent year-over-over excluding the effects of foreign currency to $1.695 billion.

Hertz added its fourth-quarter revenues from worldwide equipment rental came in at $317.9 million, up 11.1 percent year-over-year and 11.4 percent year-over-year excluding the effects of foreign currency.
    
Those revenue figures helped Hertz generated fourth-quarter adjusted pre-tax income of $165.1 million versus $69.8 million in the same period a year earlier. The company’s pre-tax income on a GAAP basis was $92.8 million versus a loss of $6.0 million in the fourth quarter of last year.

Hertz’s corporate EBITDA for the fourth quarter climbed to $335.2 million, an increase of 25.3 percent from the same period in 2010.
 
Officials also tabulated their fourth-quarter adjusted net income spiked to $104.0 million, up from $41.6 million in the same quarter a year earlier. The rise resulted in adjusted diluted earnings per share for the quarter of 24 cents compared with 10 cents for the fourth quarter of 2010.

The company also mentioned its fourth-quarter net income attributable to Hertz Global Holdings and subsidiaries’ common stockholders on a GAAP basis was $47.1 million or 11 cents per share on a diluted basis. The figure marked a stark turnaround from a loss of $28.1 million 7 cents per share on a diluted basis for the fourth quarter of 2010.

Furthermore, Hertz pointed out that it ended the fourth quarter with total debt of $11.3 billion and net corporate debt of $3.68 billion, compared with total debt of $12.5 billion and net corporate debt of $4.44 billion as of Sept. 30.

“Total debt decreased in the fourth quarter of 2011 primarily due to a decrease in fleet debt and our Senior ABL Facility related to seasonality,” officials explained.

Hertz stated its net cash provided by operating activities was $584.8 million in the fourth quarter compared to $479.1 million in the same period a year earlier, an increase of $105.7 million.

“The increase was primarily due to an increase in net income before depreciation, amortization and other non-cash expenses,” officials noted.

Hertz’s Full-Year Results

Moving over to how the company performed for all of 2011, officials determined their worldwide revenues came in at $8.3 billion, an increase of 9.7 percent over the prior year or a 7.4-percent increase excluding the effects of foreign currency.

Hertz reported that worldwide car rental revenues for the year increased 9.2 percent (a 6.8-percent increase excluding the effects of foreign currency) to $7.1 billion. The company also said revenues from worldwide equipment rental for the year increased 13.0 percent (an 11.4-percent increase excluding the effects of foreign currency) to $1.21 billion.  
 
As a result of those revenue jumps, Hertz computed that its adjusted pre-tax income for the year was $680.5 million, almost double the prior year amount of $347.1 million.

Hertz also highlighted its pre-tax income on a GAAP basis rose to $324.3 million versus a pre-tax loss of $14.6 million in 2010. The company added its corporate EBITDA for the year was $1.39 billion, an increase of 26.3 percent from 2010.  

In other full-year figures, Hertz determined its adjusted net income soared to $429.6 million, a whopping increase of 102.9 percent from 2010, resulting in adjusted diluted earnings per share for the year of 97 cents compared to 52 cents in the prior year.

Officials also pointed out full-year net income on a GAAP basis was $176.2 million or 40 cents per share on a diluted basis compared with a net loss of $48.7 million or 12 cents per share on a diluted basis for 2010.

“Our record results for the fourth quarter and full-year 2011 are attributable to an equal emphasis on efficiency and revenue growth, which were achieved despite deteriorating macro conditions in Europe,” explained Mark Frissora, the company’s chairman and chief executive officer.

“Hertz generated over $450 million of efficiency savings last year, bringing the cumulative five-year total to over $2.1 billion, representing 25 percent of our total cost base,” Frissora highlighted. “The results of our growth initiatives were record worldwide car rental revenues for full year 2011, on record transaction day growth, and the fourth consecutive quarter of double-digit growth in the equipment rental business. These achievements capped a year where Hertz almost doubled 2010 adjusted pre-tax income and beat the previous, pre-recession record in 2007, on $387.2 million lower revenues.

“We also refinanced almost $7 billion of debt on favorable terms last year, further strengthening our balance sheet,” he went on to say. “A continued emphasis on technology-driven efficiencies and customer service initiatives, the advancement of an asset-light business model, and a rich mixture of car and equipment rental growth initiatives, are the recipe for sustained financial improvement in 2012 and beyond.”

Worldwide Car Rental Performance

Beginning a deeper breakdown of its business segments, Hertz highlighted that it achieved record transaction days for the fourth quarter, which increased 7.2 percent above the fourth quarter of 2010.

The company determined U.S. off-airport total revenues for the fourth quarter increased 10.1 percent year-over-year, and transaction days rose 15.0 percent from the prior-year period.

Officials acknowledged worldwide rental rate revenue per transaction day for the quarter decreased 4.2 percent from the prior-year period.

“RPD continues to be impacted by the shift in our mix between airport and off-airport rentals,” Hertz explained.

“When adjusted for mix, fourth quarter U.S. RPD decreased 3.1 percent with the leisure business decreasing 2.7 percent,” the company continued. “Growth in off-airport rentals, and specifically growth in replacement rentals, which have longer rental lengths, has a negative impact on RPD.  However, it is important to note that off-airport’s highly contributory profit is growing significantly.”

Hertz calculated its worldwide car rental adjusted pre-tax income for the fourth quarter climbed to $171.4 million, an increase of $39.3 million from $132.1 million in the prior-year period.

“The result was driven by increased volume, strong residual values, strong cost management performance and gains in the disposition of properties, partially offset by negative RPD,” officials highlighted. “As a result, worldwide car rental achieved an adjusted pre-tax margin of 10.1 percent for the quarter versus 8.5 percent in the prior-year period.”

Furthermore, Hertz tabulated that its worldwide average number of company-operated units — largely as a result of the Donlen acquisition — stood at 599,300, an increase of 40.2 percent above the prior-year period and a 7.9 percent year-over-year jump excluding the Donlen fleet.

Update on Worldwide Equipment Rental Performance
   
Hertz determined its adjusted pre-tax income for worldwide equipment rental for the fourth quarter climbed to $62.1 million, an improvement of $27.1 million from $35.0 million in the prior-year period. Officials attributed the rise to the effects of increased volume and pricing and cost management initiatives.

The company said worldwide equipment rental achieved an adjusted pre-tax margin of 19.5 percent and a corporate EBITDA margin of 44.3 percent for the quarter.

Officials went on to note the average acquisition cost of rental equipment operated during the fourth quarter increased by 3.8 percent year-over-year and net revenue earning equipment as of Dec. 31 was $1.78 billion, compared to $1.77 billion as of Sept. 30.

Hertz’s Future Outlook

For the full year 2012, the company forecasted the following:

—Revenues: $8.850 to $8.95 billion.
—Corporate EBITDA: $1.520 to $1.590 billion.
—Adjusted Pre-Tax Income: $790 to $860 million.
—Adjusted Net Income: $520 to $570 million.
—Adjusted Diluted Earnings Per Share: $1.16 to $1.26.
    
The company explained its revenue forecast is based on the projection of modest economic growth, a strong U.S. dollar and incremental franchising of certain rental operations.

Officials added the adjusted diluted number of shares outstanding is estimated to fluctuate within a range of 418 million to 456 million through the year. The estimate for first quarter is 418 million shares outstanding.

For example, based on 450 million adjusted diluted shares outstanding, the company’s full-year 2012 guidance for adjusted diluted earnings per share is $1.26 at the upper end of the guidance range.
 
Hertz added it will provide an estimate of forecasted adjusted diluted shares outstanding on a quarterly basis.

“Despite the soft conditions in Europe, we are encouraged by the operating environment in the United States,” Frissora declared.

“For the first quarter of this year, we are anticipating double-digit volume growth in the U.S. car rental business based on solid advance reservation build-up, and we are expecting approximately 20 percent rental rate revenue growth in the U.S. equipment rental business,” he concluded.