Hertz Ups Revenue, Profits in Second Quarter 2013

Hertz Global Holdings Inc. reported second quarter 2013 worldwide revenues of $2.7 billion, an increase of 22% year-over-year. Worldwide car rental revenues for the quarter increased 23.3% year-over-year to $2.33 billion.

Corporate EBITDA for the second quarter of 2013 was $540.4 million, an increase of 32.5% from the same period in 2012, while second quarter 2013 adjusted net income was $204.4 million, versus $154.4 million in the same period of 2012.

Mark P. Frissora, the company's chairman and chief executive officer, said, "Our eighth consecutive quarter of record adjusted pre-tax income, which increased 34.5% year-over-year in the second quarter, was driven in part by double-digit revenue growth in four businesses: U.S. off-airport car rental, leisure car rental, HERC and Donlen. Hertz also achieved several other financial records this past quarter, the result of solid execution of balanced revenue, cost initiatives, and Dollar Thrifty synergies which are running ahead of plan."

The company achieved record transaction days for the quarter, which increased 22% over the second quarter of 2012 with most of the gains coming in the U.S. and largely due to the acquisition of Dollar Thrifty, partially offset by the Advantage divestiture.

U.S. off-airport total revenues for the second quarter increased 11.6% year-over-year, and transaction days increased 10.2% from the prior year period.

Higher income results were driven by stronger volumes and pricing, including the impact of the Dollar Thrifty acquisition, lower net depreciation per vehicle and lower interest expense as a percentage of revenues, Hertz reported.

Hertz noted that the second quarter was an unusually tough comparison for U.S. car rental due to second quarter 2012 residual values, which were at peak levels compared with the second quarter 2013. Therefore, the year-over-year margin improvement in the recently completed second quarter was impressive given the $45.8 million residual value hurdle, the company reported.

The worldwide average number of company-operated cars for the second quarter of 2013 was 830,300, an increase of 26.5% over the prior year period, largely as a result of the Dollar Thrifty acquisition.

The company reaffirms its full year 2013 guidance. In 2013, the company expects to generate worldwide revenues of $10.850 billion — $10.950 billion and adjusted net income of $830 million — $875 million.

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