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EXHIBIT 99
FOR IMMEDIATE RELEASE CONTACT: Richard Broome
Media Relations: 201-307-2486
Lauren S. Babus
Investor Relations: 201-307-2337
HERTZ REPORTS RECORD THIRD QUARTER REVENUE AND EARNINGS
PARK RIDGE, NJ, OCTOBER 13, 2000 - The Hertz Corporation (NYSE: HRZ) reported
record Third Quarter revenues of $1.438 billion, an increase of 6.9%, or $93
million, over the comparable period last year, and a 9.6% increase before the
effects of foreign exchange translation. Net income for the quarter was a record
$142.8 million or $1.33 per share on a diluted basis. The per share amount
represents a $0.05 increase year-over-year and is $0.03 above the average of
analysts' estimates as published by First Call.
Worldwide vehicle rental and leasing revenue in the Third Quarter was $1.160
billion, an increase of 5.7% over the comparable period last year, or an
increase of 8.7% before the effects of foreign exchange translation. Worldwide
industrial and construction equipment rental revenue was $269 million, a 15.5%
increase over the same period last year, or an increase of 17.0% before the
effects of foreign exchange, and same market revenue increased 4.0% over last
year.
The Company expects diluted net income per share of $3.33 for the full year
2000, which includes a one-time net gain, related to the disposal of real
property, of $0.05 per share diluted reported in the Second Quarter of this
year. The Company continues to expect a weaker First Quarter of 2001 than the
comparable period in 2000, but expects to achieve the average analysts' estimate
of $3.42 net income per share for the full year 2001.
Craig R. Koch, President and Chief Executive Officer, said "we are pleased that
we have achieved record earnings for the eleventh consecutive quarter. While it
is still early in our 2001 planning cycle, and allowing for some economic
moderation and a weaker First Quarter, we remain comfortable with the full year
2001 consensus estimate, which would be the eighth consecutive record year for
Hertz. We are encouraged that the fundamentals, including pricing opportunities,
support full-year profit growth for 2001."
DOMESTIC VEHICLE RENTAL, which includes airport and suburban markets, had
pre-tax earnings for the Third Quarter of $162.5 million, up 3.9% over last
year, generating an 18.8% margin. Revenues in the Third Quarter totaled $866.4
million, an increase of 7.4% over last year. Rental revenue in the Third Quarter
grew by 7.7%, comprised of 9.7% transaction day growth, partially offset by a
revenue per day decline of 1.9% compared with Third Quarter 1999. At airport
locations, revenue per day declined by 0.4% year-over-year. There are now 634
suburban locations, an increase of 149 year-to-date, which generated Third
Quarter revenue of $116 million, or a 32.7% increase year-over-year.
The Company expects that revenue per day will be down 2% to 3% in the Fourth
Quarter 2000 with continued solid growth in transactions days. The outlook for
2001 is for no significant increases in revenue per day early in the year,
compared with strong revenue per day growth in the same period of 2000. Growth
in revenue per day is more likely to occur in the Second Quarter and later in
2001. These assumptions yield the following estimates:
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HERTZ REPORTS RECORD THIRD QUARTER REVENUE AND EARNINGS -- PAGE 2
<TABLE>
<CAPTION>
U.S. CAR RENTAL CONSOLIDATED AIRPORT
------------------------------------------ ---------------
Revenue Per Day Transaction Days Revenue Per Day
--------------- ---------------- ---------------
<S> <C> <C> <C>
Q4-2000 <2%> to<3%> +8.5% to +9.5% <1.5%> to <2.5%>
FY-2001 Flat to +1% +7% to +8% +1% to +2%
</TABLE>
WORLDWIDE INDUSTRIAL AND CONSTRUCTION EQUIPMENT RENTAL generated pre-tax income
of $22.1 million, down from the same period in 1999, but improved from the
Second Quarter of 2000. The Company expects this business will achieve overall
revenue growth in 2000 of 13% to 15%, with the pre-tax margin in the mid-single
digit range. Pricing, down 4% in the first half of 2000, leveled off to a 1%
decrease year-over-year. To improve profitability, the Company has slowed the
growth of its network, implemented a staff restructuring, continued to focus on
revenue management and mix-of-business, adopted a conservative 2001 fleet
purchase program, and increased prices on high utilization equipment where
market conditions warranted.
The Company expects worldwide equipment rental revenue to grow by 9% to 11% in
2001, with an improvement in pre-tax margin as more of its newer locations
mature and cost reductions flow through to earnings. Network expansion will
continue, focusing on specific markets with high revenue and profit opportunity.
The Company noted that significant growth opportunities exist through market
share improvement and the growth of equipment rental as an alternative to
ownership.
INTERNATIONAL VEHICLE RENTAL AND LEASING generated total reported Third Quarter
revenue of $293 million, about the same as the comparable period last year.
However, the revenue increase was $35 million, or 12.4%, before the effect of
foreign exchange. Rental revenue in the Third Quarter increased 13.5%, before
foreign exchange, which is comprised of revenue per day and transaction day
growth of 1.4% and 11.9%, respectively, led by strong transaction day growth in
Europe, Brazil and the Caribbean. International pre-tax profits in the Third
Quarter were $56.6 million, up 10.2% from the comparable period last year,
including the adverse effects of foreign exchange and business disruptions
related to fuel price disputes in several European countries. Also, the Company
announced that on August 31, 2000 it had transferred, at the estimated fair
value of $99.2 million, $16.4 million more than net book value, its car leasing
businesses in Australia, New Zealand and the U.K. to Axus International, a
subsidiary of Ford Motor Credit, that Hertz has managed under contract since
January 2000.
The Company expects revenue per day for international car rental to be flat to
up 1% during the Fourth Quarter and transaction day growth to be up 8% to 9% for
the Quarter. The preliminary outlook for the full year 2001 is for revenue per
day to be up 1% to 2% over the year 2000, with transaction day growth of 9% to
10% over the prior year.
Headquartered in Park Ridge, New Jersey, Hertz operates from approximately 6,500
locations in the U.S. and in over 140 foreign countries.
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HERTZ REPORTS RECORD THIRD QUARTER REVENUE AND EARNINGS -- PAGE 3
This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on current expectations, forecasts and
assumptions and involve risks and uncertainties, some of which are outside of
the Company's control, that could cause actual outcomes and results to differ
materially from current expectations. These risks and uncertainties include,
among other things, price and product competition, changes in general economic
and business conditions, wage inflation, economic and competitive conditions in
markets and countries where the Company's customers reside and where the Company
and its licensees operate, changes in capital availability or cost, costs and
other terms related to the acquisition and disposition of automobiles and
equipment, and certain regulatory and environmental matters. These
forward-looking statements represent the Company's judgments as of the date of
this release. The Company disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new information,
future events or otherwise.
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THE HERTZ CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(In Thousands of Dollars)
Unaudited
<TABLE>
<CAPTION>
Three Months As % of
Ended September 30, Total Revenue
---------------------------------- ------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue $ 1,437,756 $ 1,344,808 100.0% 100.0%
------------ ------------ ------------ ------------
Expenses:
Direct operating 600,000 564,976 41.7% 42.0%
Depreciation of revenue earning equipment 367,393 336,773 25.6% 25.0%
Selling, general and administrative 115,725 116,650 8.0% 8.7%
Interest - net 119,046 93,714 8.3% 7.0%
------------ ------------ ------------ ------------
Total expenses 1,202,164 1,112,113 83.6% 82.7%
------------ ------------ ------------ ------------
Income before income taxes 235,592 232,695 16.4% 17.3%
Income taxes 92,829 93,659 6.5% 7.0%
------------ ------------ ------------ ------------
Net income $ 142,763 $ 139,036 9.9% 10.3%
============ ============ ============ ============
Earnings per share:
Basic $ 1.33 $ 1.29
Diluted $ 1.33 $ 1.28
Weighted average number of shares outstanding:
Basic 107,427,227 108,032,375
Diluted 107,544,367 108,551,164
</TABLE>
<TABLE>
<CAPTION>
Nine Months As % of
Ended September 30, Total Revenue
---------------------------------- ------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue $ 3,862,288 $ 3,545,152 100.0% 100.0%
------------ ------------ ------------ ------------
Expenses:
Direct operating 1,708,496 1,571,510 44.2% 44.3%
Depreciation of revenue earning equipment 1,007,491 921,634 26.1% 26.0%
Selling, general and administrative 341,068 340,134 8.8% 9.6%
Interest - net 307,335 250,211 8.0% 7.1%
------------ ------------ ------------ ------------
Total expenses 3,364,390 3,083,489 87.1% 87.0%
------------ ------------ ------------ ------------
Income before income taxes 497,898 461,663 12.9% 13.0%
Income taxes 195,104 185,963 5.1% 5.2%
------------ ------------ ------------ ------------
Net income $ 302,794 $ 275,700 7.8% 7.8%
============ ============ ============ ============
Earnings per share
Basic $ 2.81 $ 2.55
Diluted $ 2.81 $ 2.54
Weighted average number of shares outstanding:
Basic 107,616,838 108,005,161
Diluted 107,790,428 108,685,605
</TABLE>
BALANCE SHEET DATA
(In Thousands of Dollars)
Unaudited
<TABLE>
<CAPTION>
September 30,
--------------------------------
2000 1999
---- ----
<S> <C> <C>
Revenue earning equipment:
Cars $ 5,790,113 $ 5,344,510
Other equipment 1,777,254 1,572,891
Total assets 11,191,424 10,159,373
Total debt 7,345,085 6,566,201
Stockholders' equity 1,917,024 1,636,705
</TABLE>
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THE HERTZ CORPORATION
SUPPLEMENTARY INFORMATION
(In Millions of Dollars)
Unaudited
<TABLE>
<CAPTION>
Three Months Ended September 30,
----------------------------------------------
2000 1999 % Inc. - Dec.
--------- --------- -------------
<S> <C> <C> <C>
SEGMENT RESULTS
Revenue
Vehicle Rental and Leasing
Domestic $ 866.4 $ 806.9 7.4%
International 293.3 290.5 1.0%
--------- ---------
Worldwide Vehicle Rental and Leasing 1,159.7 1,097.4 5.7%
Industrial and Construction Equipment Rental 269.1 233.1 15.5%
Corporate and Other 9.0 14.3 - 37.1%
--------- ---------
Total $ 1,437.8 $ 1,344.8 6.9%
========= =========
Pretax Income
Vehicle Rental and Leasing
Domestic $ 162.5 $ 156.4 3.9%
International 56.6 51.3 10.2%
--------- ---------
Worldwide Vehicle Rental and Leasing 219.1 207.7 5.5%
Industrial and Construction Equipment Rental 22.1 32.5 - 31.9%
Corporate and Other (5.6) (7.5) 25.4%
--------- ---------
Total $ 235.6 $ 232.7 1.2%
========= =========
VEHICLE RENTAL AND LEASING SEGMENT OPERATING METRICS
Domestic Car Rental Operations (Consolidated)*
Rental Revenue $ 864.8 $ 803.1 7.7%
Transaction Days, in millions 20.98 19.12 9.7%
Revenue Per Day, in whole dollars $ 41.21 $ 42.00 - 1.9%
International Car Rental Operations - Before F/X
Rental Revenue $ 296.0 $ 260.8 13.5%
Transaction Days, in millions 8.52 7.62 11.9%
Revenue Per Day, in whole dollars $ 34.73 $ 34.24 1.4%
Worldwide Car Rental Operations - Before F/X
Rental Revenue $ 1,160.8 $ 1,063.9 9.1%
Transaction Days, in millions 29.51 26.74 10.3%
Revenue Per Day, in whole dollars $ 39.34 $ 39.79 - 1.1%
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*Domestic Car Rental Operations(a)
Suburban Car Rental Revenue $115.8 $ 87.3 32.7%
Airport Car Rental Operations
Rental Revenue $751.8 $ 712.7 5.5%
Transaction Day Growth 5.9%
Revenue Per Day Growth (0.4)%
Commercial Rentals
Transaction Day Growth 2.8%
Revenue Per Day Growth 0.3%
Discretionary Rentals
Transaction Day Growth 9.6%
Revenue Per Day Growth (1.2)%
(a) Based on the Company's statistical tracking system.
---------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL AND CONSTRUCTION EQUIPMENT RENTAL SEGMENT OPERATING METRICS
Worldwide Same Market Revenue Growth - Before F/X + 4.0%
United States Rental Rate Change - 1.1%
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</TABLE>
