Dollar Thrifty Automotive Group Inc. provided an update Tuesday on corporate adjusted EBITDA and fleet cost expectations for the full year of 2010. As part of the update, the company noted that its previously announced revenue guidance remains unchanged.
Based on solid operating performance in July and August, combined with Dollar Thrifty's revised outlook for fleet costs for the balance of 2010, the company now expects corporate adjusted EBITDA, excluding merger-related expenses, to be within a range of $240 million to $260 million for the full year of 2010, an increase of $40 million from the company's previously announced guidance range.
Dollar Thrifty noted that approximately half of the increase is attributable to changes in expectations for fleet costs, with the remainder resulting from continued strength in operations and ongoing cost control efforts. The company's 2009 corporate adjusted EBITDA was $99.4 million.
Dollar Thrifty also is lowering its estimate for vehicle depreciation per unit per month to a range of $270 to $290 for the third and fourth quarters of 2010, based on continued strength in residual values and favorable trends in vehicle disposition results. In addition, the company is lowering its fleet cost target for the full year of 2010 to a range of $230 to $240 per unit per month.
Update of 2011 Projections
Dollar Thrifty reaffirmed its previously announced fleet cost estimate for 2011 of $300 to $310 per unit per month.
The car rental company expects solid fundamentals in the used-car market in 2011 as demand for used cars is expected to be firm, while supply is expected to be somewhat constrained. The company noted, however, that it does expect the used-car market to be slightly less robust in 2011 than current market conditions, and has based its estimated 2011 fleet cost on this expectation.
Dollar Thrifty also noted that the 2011 projections previously made public in May 2010, which included a preliminary proxy statement of DTG and constituted a preliminary prospectus of Hertz, were based on fleet costs above these levels for 2011. The corporate adjusted EBITDA projection previously set forth in the preliminary prospectus was $173 million.
Adjusting the previously disclosed projections to give effect only to the change in the 2011 fleet cost discussed above, corporate adjusted EBITDA would range from $186 million to $198 million for 2011.