Hertz Global (HTZ) 7 Feb 232022 Q4 Earnings call transcript

Welcome to Hertz Global Holdings Fourth Quarter 2022 Earnings Call. Currently, all lines are in a listen-only mode.

Following managements commentary we will conduct a question and answer session. I would like to remind you that this morning's call is being recorded by the company.

I would now like to turn the call over to our host, Johann Rawlinson, Vice President of Investor Relations. ahead. go Please

conference and that you everyone, associated for us. call want information. accompany joining information. on forward-looking be Good website. contain statements our have thank made our now, I our to slides should also remind and which earnings By can We've accessed you morning, to provided you call, certain press financial this release on

results to may performance, of materially. Forward-looking statements inherent by nature, uncertainties. are a Actual are and subject differ their guarantee not

Any no forward-looking this on reflect call speaks date, and only today's information relayed update to as the obligation information of company that circumstances. undertakes changed to

XXXX Additional these section and information Risk Statements of on Factors are contained in these our with is Forward-Looking available Relations in XX-K SEC. the our Form earnings documents the filed All the the statements press Investor and website. release of Hertz concerning section

which our of our with believe information we'll and financial reconciled measures provide evaluation operations, GAAP use about on performance. available profitability are release additional our in measures, allowing numbers website. these press non-GAAP better non-GAAP certain our that Today, We earnings

our the Financial Chief Executive Cheung, Scherr, this Officer. morning, our On and Kenny we Stephen Officer; call have Chief

to over I'll the now turn call Stephen.

to Johann. earnings you, our morning, Thank and call. Good welcome quarter fourth

On pleased the for company. the at to year quarter close very a of record year my Hertz, report strong I'm first fiscal and on a

shareholders. and efficiency talent initiatives, XXXX commitment our Our Hertz the our reinforcing offering reflect to growth all allocation on increased customers strong deliver in capital for at focusing was in results fleet QX progress the on and to during and prudent made operations, service our about management our year

and business week to in the the February, strong. we experience As closing we with XXXX, continue first open of strength January

and customers a in Our performance creation cost early performance more to of our base. to superior the me this prospect and into sustainability on long-term confident indication value ability deliver in a the of product our leaves of the financial Hertz QX XXXX efficient

strong rideshare on the confidence also and and forward expanding including our growing performance business, EV Dollar lends platform execution Our brands. the to our Thrifty growth initiatives, revitalizing

let per remained With QX. was Revenue than X% revenue for begin Revenue per day year-over-year. $X reflecting with Transaction in with quarter year-over-year and up and performance billion, results both up expected. X% stronger days unit that, up the respectively. strong X%, were seasonally year-over-year, X% me the

adjusted $XXX operating signalled business increasing expenses reflecting core the in QX million down transaction adjusted in operating QX sequentially at flow of Importantly, per on the in versus as date in quarter, $XXX cash margin of free were corporate leverage EBITDA and Hertz produced resulting our million. X% call. QX, with XX%, a

higher for were year-over-year. were and Our points continued the that while of maintaining our the XXXX product results all stability XX fleet, NPS utilization of scores by higher rate in

together, financial KPIs were Taken line these guidance. with in

what suffice Depreciation the our per level QX to length expected of low several depreciation, between end expected key. will be. weeks, believe we of of the depreciation is moving More reflecting but range direction it to unit new used our speak forward P&L to last that for our reflects also the normalized in I the fourth that fleet and cars, of versus price purchasing and only as vehicles, our actual on we should Kenny our the EV an as in output, reverse substantially will the quarter has which not call. strategy decisions to point quite market fundamentally ICE used on declines begun this was closer view out referenced say but broadly, depreciation of versus $XXX or its

depreciation should be vacuum. a such, not As in considered

fleet to a is with highest construct ROA. goal the Our

opportunity used equity to car we know, advantage in fleet. you as our elevated an of purposely in harvest XXXX As took pricing early

Looking adequacy back the cushion the not the half back combined XXXX, in impair equity of these anticipated when did in the of prices with in our decline actions, ABS facility.

facility always welcome In occur. plans residual of commitment the EVs we even benefit otherwise. should conservative keep prices under in OEMs, the Regardless of fact, fleeting within of the of is are in under magnitude in on level Downward the to we sale while purchases the in confines assumptions gain multiyear today, us equity about forward declines in and of demand. comfortable as enjoy cars, the context price vehicle XXXX of even they price the future fleet with forward movement with prices, we will of experienced depriving our

Turning overall. to our performance back

Our team. field than operations one-way results flight as higher our the Hertz disruptions to in in caused as travel example, the typical QX reflected unplanned the to by By disruptions occasioned for quarter cancellations rentals. improved across respond well execution demand country by

to leading of at negative week tools, X of in With markets cancellations. of helping The vehicles move expected our RPD, positive and for levels on times also to rentals Delivering fleet one-way historical costs higher the we in related to effect January ahead number in U.S. vacation management offset of Christmas. the increased lower benefit and the people, to one-way from proved agile us, markets management revenue repositioning February. of demand fleet the northern transportation cars put and better into for customers the with our us rent rentals one-way enabled dedication

This announced day overtime particularly I given the operating Last QX litigation made fourth per to the we noted, higher to relating or X% the when is other expense business, excluding As base under given investments for elevated labor fourth $XX, the an and the quarter, improved remedy particularly higher quarter year-end be labor we elevated sequentially. travel was correspondingly operating costs expenses operating of down tend December, higher $XXX leverage noteworthy and objective seasonally cadence expenses. DOE settlement out-of-service in in in to million expense purposeful better our transaction for quarter, in QX. levels. set direct in

across free XXXX. was adjusted increase company. record a and Focusing cash an billion ever was EBITDA Significant year Adjusted highest on revenue the our enabled by flow billion, business company. launched strategic reduce a $X.X us was full capital cash the $X.X flow initiatives one-third. cash corporate us across for over free base to new $X.X and generation XX% our XXXX, as flow began to billion, our the we That also technology throughout uplift nearly invest the enabled

portion results company's to EBITDA very with for the year XXXX gain XXXX a into attributable with on of in sale. our I'm to pleased and come the ability significant replace confidence

levels, closed improvement and corporate across at U.S., holding Our confidence with demand, contract continued demand in is at pre-pandemic execution With renegotiated business based we sustained continued QX that leisure well toward both the higher back are In levels with the coming at of we higher success of progressing XXX% corporate QX, travel respect on in but near many renewal as recent importantly, pricing. as pricing. to corporate pricing. our

to rate also continued and the of highest inbounds, business, view international our Our return business. traveler upside non-U.S. recover the we providing to as

on Importantly, momentum and into January, especially we this inbound. corporate saw carry

approximately a terms January longer to our the transaction the same of last in demand reflecting up XX% January rideshare length of on opening period, year. corporate over reflecting price was In comparison, same international utilization up business days, was Similarly, and year, higher up inbound XX% in XX% of keep. XX% and was with strong up RPU the January, versus January and

year. respect throughout with strength fleet, me heard and maintaining up is rate in With XX% fleet versus business were European January also to Lastly, that expected you focused XXXX, size curve. inside showing we the on last reiterate demand

lower to matching or the available return well will improve With revenue potential vehicles lower to All of ROA in lines. we as fleet in will our operating that, same and equal be take across fleet continuance and always that fleet of a of strategy to the mix on vehicle things Hertz, XXXX rideshare will the same. as the fleet the potential, cost path Our objective across leisure, being costs for cycle remain and financial for attentive a lower customer opportunities. is life cornerstone cap fleet our depreciating our and of assets managing the a comprised preference. revenue our business With we maintenance corporate results as

In we expenses, noted, operating as have terms have not made progress, of done. I we but are

lower third-party of points, we aided talent firms. are Hertz by pool a at price affordable large replace dynamics current project more to broader including at engineers, employees seeing with where continue badged technology employees We cost at

we in marginally better technology, wage costs better availability. labor Combined improvement experienced QX, and labor efficiencies reduced field Regarding from for here. overall we pressure and with look

of transition from expect and back XXXX data with complete substantially lower in We operations. the look our center as in half to to further reductions we cloud-based XXXX to costs unit move QX

price underutilized the ensure means benefits vendor newly on progress. table. all with more operator our ahead, expense channels an and for procuring parcels and locally to our or parts to contracts, are secure team rethinking renegotiating selling a Looking estate have staffed is real everything efficient Hertz' across that XXXX vendor eye Whether to beyond. footprint we scrutinizing To dedicated a approach

both we our Delta to the key out focus close continued such Europe, are QX where expanding expanded as platform vehicles include long-standing to and into EV initiatives, Hertz now and growth segments; through now we on of with to pricing also XXXX, retail Uber use which our Carvana expansion through the leisure proprietary our relationships and of continue the partnership of and access our move including renewed. premium and bookings progress sold; we continue secure channel, AAA, strategic our across corporate partners, on Airlines to As with in all

of our the additional the and of worthy We our to recently cities two strategic growth to and to investments as approach also across EV the such our technologies business and new with fleet. initiatives revitalization of to facilitate our continued Thrifty There U.S. telematics Dollar the continue that mention. migration are the of are brands cloud. These and progress in expanding announced collaborating are the

customers. brand start globally of two and brands Each long a with me the iconic and performing are Dollar potential. has These considerable their Thrifty. Let history recognition with shy

reach brand leisure customer and However, to define frequently here lack to is programs to adequately of to and of drawn today, a our conscious, change. OTAs, loyalty population including utilize not important to growth mid-market going access operators, are today, the partners. less The that more We the customer consolidators, independent both airlines intention topping price they travels other not now we're business. attributes capturing and Hertz basis that tour brands across to these not brands service-driven is necessarily revitalize to cost is brands. managed more segments more adequately that opportunity select these intend purpose and other consistency That's profitable on and and pursue

Thrifty this the size in brands in do us market, channels, Hertz refining Thrifty growing position We're Dollar increasing in will We and so as the very can initiative. market our an early purpose and we and against to value and the the days Bringing the to we to comparable compete focus and through accretive enable segment identity better market. will of Dollar at of successfully margin. maintain in this us view also proposition the premier brand multiple better to brand of believe

U.S. new BP the we build announced This Hertz locations The our second several weeks markets complement that and Conference which our off-airport initiative infrastructure a the is efforts at initiative our of with ago in a and at to Mayors the is airports fleet partnership operate. in Hertz out standing to charging Pulse we to program electrify corresponding program in Electrifies.

cities, accelerate markets. of fleet major in public with utilization metropolitan our Hertz private partnership key U.S. the a Electrifies will EV As

the leisure, with training serve of employees customers of pipeline In sharing consider help EV municipal programs of to to as telemetry and educational stations wider addition with they corporate cities with and CVs, include data fleets developing to their a create rideshare a skills. projects electrification proliferation own Hertz partnerships and charging supplementing

near to We additional Conference at on with the cities Mayors in and based term. Washington, expect are to in beginning the announced Denver the we reception our announcement have

we have report. considerable Finally, to journey, regarding progress our technology

to XXXX. with migration is reduction the is we Hertz will the book operational we through that continues allow This modern, In will us selection. progressing a elements attributes vehicle including expense well post-rent more experience. more beginning further cloud and to in refine to provide of only functionality initiated reimagined. enhancements the be elements and and app easy-to-use app Our The the to to the the by on efficiently shop to XXXX, as considerable customers quicker operate for our in-rent and move app and consultancy

with work also our And Palantir continues.

tangible large and and cash currently help of U.S. diverse all, tools tower to a benefit are development while rolling launch nearly flow projects pricing the In adjusted record on out company. year measured a free point fleet XXXX control for also a as with manage focused by corporate of the was EBITDA to our adjusted to markets performance We our us in all the fleet

Looking show to us in continues a market opportunity. hold that forward, expect margins we double-digit to

EBITDA to is Our generation, on and of cash rideshare by Dollar delivery. ROA and remains Thrifty expanding generation mindset of foundational on revenue a channels focus and flow unit and focus underpinned and a like the with attention brands cost

growth, pursue fleet remain cost should demand key we As levers management our and soften.

are from not and to fleet materialize. confront do for should and continued are shift, positioned demand But challenge evolving a a not carry is profile we position. us. and the today, from away asset patterns structurally strength a we demand shift historical it are we consumer trends patterns consumption flexible. potential While should positive We travel The are base our fixed defensive hard of around over experience goods, seeing reduction of that positioned

to you and our let capital our results me more detail it provide walk through to liquidity in allocation. that, commentary and turn on With Kenny

and Stephen, you, morning, good Thank everyone.

solid at for rate performance laid XXX better Utilization and the As $X typically X% we our on volume year-over-year. both despite up I'll that volume improved Stephen year-over-year record had severe an travel quarter than was for year. seasonality the year-over-year bps on constant air expectations Both both the segments XXX increase RPU and as in was call, billion, X% and in and fourth and our met basis. disruptions and a a XX:XXdays of segments revenue noted, bps full last Fourth quarter, the totaled yield. reiterate currency out International over RPD, or a increased quarter year-end. Americas U.S. we

across to have recover volumes in levels inbound promise our improvement pre-pandemic hold within leisure have progress for the been industry but made and see we volumes. towards Domestic us. steady considerable business, International slower corporate

from quarter levels to XX% in the Americas, QX. of in about XX% of grew was XXXX the up corporate international at As inbound fourth and about XX%,

corporate to million large utilization saw we growth quarter, XX%, all RPU, $XXX strength and As we in margins. continued strong of international inbound EBITDA continues were and be expect rideshare it fourth in Geographically, corporate markets. performance the accretive leisure. with margin Adjusted covered, to will prove was in across a contributors

currency XX% $X.X record an increase year, was For RPU a Adjusted On revenue Americas basis, XX% segments. increases corporate was days full year-over-year the increased XXXX. the XX%, Americas both revenue billion, International EBITDA year strong in constant RPD, from with and a with at billion, of record levels. our the $X.X for and the International and full a margin both business across

of all dynamic Our XXX,XXX EBITDA on vehicles size focus asset approximately We strategy dynamically composition quarter, fleet continue with Staying manage our Due fleet. fleet a to Fourth to and $XXX of a source to the year cash. the equal to contributed higher call DPU of during we year, on and within return normalize last quarter fourth ending continued our at maintaining fleet month ending the the higher-yielding for tight was on December. to we guided. fourth vehicles and of other improved generated at roughly $XXX the quarter, rotation, business, size the net fleet, fleet on the a a start of a net as an business. quoted we was seasonal during range focus CapEx just while the de-fleeting quarter

elevated of to our in in QX what closed average fleet we the levels expect light year We demand. be higher size than of

more Depreciation about detail earlier. facility to put what in ABS let a spoke the me bit Stephen

and whole. to that business noted, acquisitions output fleet is maximize we make in holding the to on return the the First, decisions, don't in of business various including solve we and as we order for depreciation isolation. periods as Stephen a managed margin ROA, Depreciation

render to cap prices car first lower depreciation. ingredient cost, is declining the which Second, a

And and to of and expect been be downward new benefit have result, buyers price from used We both will cars. a as we trends.

benefited in For declines from avoidance doubt, on we EV of QX price purchases.

a fleet to that longer mechanical depreciate and longer the EVs, of given holding of whole vehicles. more stated dynamic. specific we over across period have Further, decisions We keep are our period and car lengthen time time. than period not model profile over the are and On keep is length the on specifically, with this currently believe EVs of vehicles made under are our history expect we the could Third, as time we year. length previously, of And on belt. but ICE the

our XXXX. may sale on we and entering Fourth, likely no with to with smart to harvest of opportunities given disposals. are prove driver on last been to of in unique fleet in XXXX, And XXXX. we residual gains vehicles a available value, fewer of less prices utility opportunity operational an we make expect far be fleet have I we primary point on model primary XXXX that look in the will for entered the decline purpose But deletions. sellers excess finally, broadly, gain was mistake, which channels And be the Make capturing we to is vehicles for will nondepreciating fleet. physicians to our for

not leverage expense, providing the retail quarter a represents to one of directly depreciation channels, nearly premium here. sales Hertz with grow that and disposition our sales impacting us continue from XXXX, meaningful Carvana we wholesale over While look channels. gross in we to car and car This

on ABS to facility. the points Two make

model that the value is determined reminder, excess and as book a ABS equity This fourth by driven over we of vehicles had fleet inception, the ABS measured is carried smart as market the quarter, and fair based and fair or procurement. opportunistic one equity just First, fleet not entering the value. market entire at and the excess on value make

compared amortized cushion in to be future This harvested acquisition, that risk. with is Second, economic us we ABS required selling cars buffer created at is year. equity high be or deliberately after or either typically built-in value by incremental did vehicles equity gains rates. decline high residual pace accelerated depreciation what This to with are vehicle incremental by last

harvest to us enabled actions Our gains.

cushion offered our than went conservative stress here, the more cushion to In $X From $X.X scenarios billion billion. will those sufficient from QX, expect under that market. equity the continue to by we be

costs. to now operating Turning

day Our exclusive $X outpaced revenue day was $XX, the as growth third our settlement pointed per and under from Stephen litigation transaction per of a the expenses BOE quarter. out, improvement

with reducing telematics and showing are third-party Our and spend respect data utilizing efforts maintenance benefit. to costs

we operating As we in expect fleet technology investment, improvement progress to grow and continue further our a EV on leverage.

back Looking market. proved execution our a beneficial Demand expectation strong activity to business driven earnings was a and quality the our exceeded corporate on seasonal utilization. QX, was solid in by of across strong, leisure mid-week which

rideshare rentals fleet the these year Our compared QX fleet off out continue in we the back the grow half RAC, while harvest peak in to are at as the of significant QX. our following to past. and RPD margin Residuals accretive, in of economics came reduced and equity pointed the of

capital and to Let liquidity. structure me turn now

maximum billion, European under facility, we X.X and extending from maturity Abbie the of continues XXXX. the December, available room revolving XXXX fleet, comprised October At aggregate balance leverage borrowings amended and cash Italian corporate December Our market billion with it sheet so. ABS liquidity our available credit XX, when balance business X.X times was net facility. to million on year our healthy, to the ended in capital November for remain to unrestricted $XXX incremental a modest to prudent conditions of do leverage we the the make EUR increasing suggesting $X.X the In

strong million over free quarter. considering of for rotation, flow capital seasonal allocation mentioned and Turning cash flow of a and which before Adjusted cash million, conversion cash of fourth as source Adjusted XXX%. of was de-fleeting cash quarter a to CapEx, was $XXX $XXX earlier. the to operating due million I our in fleet $XXX the a flow

operating For and free was full cash flow cash adjusted flow year, $X the adjusted was billion

which $X.X unusual billion. for to cash I quarterly both record settlements, due nonrecurring adjusted adjustment the nature. at the of the that million flows were were out exclude the year amounts in the highs. their point should settlement, the full and Despite fourth $XXX impact in paid quarter annual litigation

strategic capital cash of to As our impact our initiatives capital did priorities stated excess our investing previously, in unchanged. and fleet, returning shareholders the allocation funding settlement our not remain

towards quarter. quarter, repurchased the stock share for during capital During nearly shares million investments the we fourth we and of $XXX allocated XX common million. $XXX note million Overall, repurchases

nearly For the repurchased shares the of base company. year, to the equal full of XX% we equity

we based me quarter is in first expect highlights revenue. in let on and Seasonally, below XXXX. with Lastly, give start QX I'll normally some RPD. flat for slightly revenue volumes a what reduction

to transaction revenue However, for with compared QX hold to this days QX year, steady. be we expect flat with

be compensating For those fleet, expect we heightened to average seasonally to higher expect in QX, year and levels, and would for contributing fleet fleet. adjust expect from levels. we QX ended to the we to slightly those quarters. particularly revenue We XXX,XXX increase, higher both QX in On slightly volume elevated QX where to the rates given cars, in recall and levels at demand down

We in On typical growth further summer. higher range and expected meet in spring close. a to expect to QX. $XXX the and there, we $XXX fleet DPU, QX the seasonal the of in From to also settle in year normalize depreciation to demand comes de-fleeting anticipate as net through QX and is

range, changing reflecting expectations whole the some down modest we Regarding net year, and of mix expect patterns sale to the trend QX across it for lower and anticipated fleet. gains towards the balance given DPU of the end on the

to DOE there, we from direct trend equivalent expect to with $XX, the QX. be operating year-end. figure expenses, to per lower we normalized transaction And expect approximately day QX respect it to through From roughly QX for

year be prior free the cash the trajectory and we flow years, of towards off summer the in through de-fleet to weighted Lastly, back heavily peak as we more anticipate year-end. of the half generation

spending, in CapEx capital continue as our with the and among size demand behavior said, balance season. That to we fleets fleet meet free summer will investments capital initiatives. XXXX the busy XXXX, will other flow in half to reflect First expected cash allocation of in repurchase share consistent and

deliver for ability our in And full the have as confidence year pleased are we seen early the assess with we attractive prospects returns. year, to in our closing, we XXXX. momentum financial In we have

for call With that, the open we'll Q&A.

first Our comes Instructions] [Operator Please Chris ahead. go Deutsche from Woronka question with Bank.

the CEO level, the about future this double-digit during for, you've I and the gives mean, some any of share been in key business of guess, I and seat margins? hold sort high Stephen, insights you year you've confidence a the the able now. period can what you learnings and and about of the in comment to the of gained maybe being

would XXXX, fleet year non-fleet but in are base the took both equally, to and third. I growth But company, a by have I that equally the kind of opportunities cash the prove we it there. took would to think brought down to if say will, down of in as terms the on the say 'XX free back one looks its I if of over you mean our will payment, we be will that for beyond. company that a the invest flow lasting I opportunities fidelity, in on CapEx and the operational equity large course forward and benefit that

a I say just where I on If of look on then give I of on the the would me and the make kind back forward. you optimism observations in business, I'll year, -- leaves of would that of sense terms couple a

the the befitting First a quality the we're think improved. of running I that's brand. Hertz has business all, business more of of now performance And of

view is return, we important. more It's I otherwise. is and now the not think we to on how which changed have across whole of and tighter of But we mindset we in of think financial understand the sort true I fleet manage mindset. think I That Second, customer. just efficient to ROA a adherence manage the across to hone and the the the company on based company the whole of business a an the exclusion

we would human better I the brought say to capital game. Third,

with So Hertz of the that production sight group field the made and going responsibility we with better combined of of we of to in for people better. virtue run executives And line tenure customer that this be brought it. better have in on changes to by run field we've that the to is service also efficiency, more organizational a new

then improving. mentioned, whole people Fourth, the to our It our I building company and we're I visible as for to in for technology in to say, field, of better the center and all setting would the not be opposed is up but as thing our in use I be market, certainly of I deep the the the think for recognition will look company, as demand and us last for inside value overall. big is would a for to used market the that broad a customers car discovery me a better very is the technology And tools say think fleet I and the the better cloud data of U.S. particularly we technology may

a different revenue with will respect different of in where whether be me on RAC what I think, company, that to than identified the that carry see of durability Dollar So does classic of you vectors profile the growth forward? lead that's Thrifty a first, the I rideshare, for we've set EVs. And kind business. all think they

same the demonstrating. still the beer, that to of OEM industry is the are to we're importantly, that think fact cars the think I'm but discipline, by industry to that is ourselves discipline showing be continue discipline. I going I production operate Second, And observing with benefited perhaps we showing

industry terms that prices over couple what's and worst behind may from say rate disconnected would the in we went important, precipitous. think this now. not I quarters, that, particularly car I and car And that's used looked decline at typically, are last of rates, prices meaning have as I you in signalled fact, is us happening of if the of fell most used residual on that think that's way

'XX, like the attentive to I and good place initiatives to to all in back is from So view, which a think, place we and we're fleet a going a point focus I good on stock. CapEx non-fleet capital we're while serving 'XX, of buy growth the think in now, in the did allocation and in opportunity

that's so I've am, we're kind And in think seen where Chris, terms I going. I where of of what and

curiosity in both a on particularly cuts I And the how a around Hertz I there's general market follow-up, Tesla. lot of that as headlines price impacts about think EVs, puts some guess recently obviously, just and kind thinking and of resale you side. takes, of guys it? and on way any about the of to there how little a are color that walk Is right, bit through us purchase give

Why particulars. the start, of all, Kenny in declines said, to it price Sure. quarter. sort in electric then as vehicles first give look, don't we benefited I of from Kenny But hand to you more I'll fourth and

so moved that And direction. in we've

of XXXX I we which XX% quarter fleet. think know be that, that expect it's a of will we XX%, it, now, terms call an also to important that in bought by fleet overall of our EV

prices point so cars. buy prepared on want the on these to a down is we the depreciation of because come in said And what ingredient we cost vehicles, cap we'll as as electric price lower remarks, first at XX%

think then early, also these and terms we to price. EVs, rode important higher lower. as in understand of did, down, Obviously, we paid it's low we paid up bought at meaning started then I that but the market them a

as become length that on annual experience the us input, and to time where today. So you an keep these need the have of of that output, in overall I the various The depreciation average but evolve well kind cost to in into would where cars, And being depreciation keep and the last will look this are. play a of will length those cars calls of of we at not it of kind an on we terms cars, basis. the re-kit around longer to the And of thing over EVs give we to of expect longer we still even excess say, an that's of nature those overall cost sit there. said ability interior

little for turn let me a to But bit. Kenny

Kenny. it's Yes. Chris,

me let give your a talk talked the Chris, well, then on And maybe of bit bit Stephen So about to depreciation. color in a I'll terms about as ABS what more question.

right, appreciation to depreciation, So our other of variables. note So on think do it's I mark-to-market that right? vehicles, we is function a a important don't instead,

out, cost costs, is lower, case, depreciation. this The price to coming here For important is their for costs, residual will particularly piece, example, Stephen is to period, reduce is value longer lower whole residual ability pointed on of right? second right? the the is cap the cap this a the Tesla operate In given cap expect EVs, hope changes impact which right? more longer. relevant And With which depreciation, down, over

On year. side, the the in keep in tests across we pricing that average did mind

Tesla So we our purchases for and most blended recent that the cost we by early ones QX. is the so reduced in -- bought

of it, less terms call than size, mean, In the roughly, fleet our Tesla XX% fleet. now right total of is I

is bit So the on depreciation impact minimized. a

day is all cap be And I the Chris, further call On there say we ABS, is our in accretive what haircuts. test call into at is laws cost bring else equal, EVs, on haircut, X% it a economics one, right, let's lower which to do to will thing of would Quickly the had. being that the ABS a, enhance business. proving I to a the be last equity

the in You're money day on one.

Teslas The provides in second than month, ABS the every piece the the death which cushion. subsequently, is economic rate, also faster

as model. cars of And at we now, imagine, look pool right cushion XXXX. call, have as as So sufficient on the not maker mentioned can by a we the entering I whole, you

Oppenheimer. from of with the Zaffino line question comes Ian next Our

per Great into that? target the how giving What how comments tracking maybe color about And on then normalized give you're there? that also, bit figure is Can on depreciation, little you and se color? confidence you rates. thinking does a your more then maybe not EBITDA us

important I eye make all business. number to listen, the depreciation margin is Well, influenced -- toward decisions a the and a with that we not overall it's kind ROA of think of of it's an fixed by or factors element, the understand meaning

so make comments. I'll a couple And of just

run what while the a versus condition, used to all, is low brand-new of a car, that cap car And with we're okay? to what good customers making to of totality of we're being mileage not the going lower as of look terms costs, cars, First between and differentiated cost those decisions. rate is as lower-cost at extent in want, vehicle that the we attentive

cars lower P&C higher a financial be about it's the performance, levers going are depreciation. a EBITDA we think those context in we and to older where, whether we length are number one So in through two Dollar quite in is therefore, the cash sort margin that engage of playing Thrifty, the down of control we're have where I place business going based around but of growth Obviously, and think to repositories element, for of keep on go flow, vehicle and as to kind to it we depreciation what of buy, as

All we looking of and decisions the puzzle cap and make for around those economic again, return an return are maintenance car clear is overall overall factors depreciation. But very itself the is output of depreciation at that profile, cost, an influence itself. but piece some one expense it of

on more to Just give depreciation. color, Ian,

right, look DPU net was QX, as you So I $XXX. if mentioned, at

sale, the, million, If you and the vehicle $XXX you per roughly gross call gains get gains between sale on $X.XX. to was and that's it, on bifurcate was then gross the how $XXX

As QX, rounding outwards, the $XXX on in right? $XX you the appreciation part, had right, the sale, standpoint. to that's growth of of most the call Let's So $XXX talked right? math, $XXX right, it we in $XXX faced look high-low expect for rest similar, now. let's about range gains say for for year, I've we The

So that rest year. And minus how for you of gets to the think about $XXX we $XX the it. $XXX that's

of forecasting. thing say, price the more we a one is of would I to sort the is believe approach over said what indices or we're that will market conservative the our think rather in though, than year. The be taken I decline course conservative we've we the And that Yes. where remarks

into we And so on that adjust. view obviously and plays the will have forward we the

we're So taking down. expense

see the I we course and will of five will decline offset we as a think have to our gain the detriment. last improve we've a not our the on may that sale year benefit, in seen to over therefore, to think And use to prices sort the And on. of continue weeks, extent I correction car that the to forward. used play of approach the But where behind what sort of extent that this no us. of to depreciation is conservative a depreciation be less levers number car worst and prudent be, taking to we're

years Yes, on prices every awake the have of up you week. cars start the the selling way our good gone

then expect can going? negotiating like? we assortment some I looks side. And February? February on of just been the the the progressing what contract inbound. upon corporate corporate Maybe have of international And Where front. you is You that on touch that know How may that side. should also How’s some

Sure.

in let that So take me order. them

First has all, okay, the of for profitable us, quite inbound business, considerably. which up been very is a business

the January, XX% the quarter, momentum year-over-year. at was up seeing In look we're into this just of international if carrying month fact, you inbound first

that And sort strong. continues play to January of as January. comparing So against business very

it fact, fact, even played strong have suggested exchange when, In would through in year-end foreign otherwise.

coming who just suggests to you it of States. the strength demand United non-U.S. are So by the of to travel customers

as on So very we is strong, year. forward of kind are the where on carrying an indicator into January and momentum early the

terms of demand. equally would say I in XX% saw of the that closer you January, corporate back corporate the In continuation coming with demand of January we again, business, over Demand was where now sort told to it. up

tell seeing on the remarks, at is satisfy commitment, quite look EVs renegotiated put to would to XXX% Obviously, comment made ESG corporates corporate near that prepared getting to a strong. their at the renewal as they're I in an and own employees their we're good, business I you but very Importantly, higher alternative our on focused feeling importantly, contract in prices. corporates renewals, are if contract you this

other corporate United which X.X million. they Sunday, the at but totality inbound, is at Sundays, you in million about What's the if travel, X look prior about also about the TSA at about interesting you, figures, I'd which one is is not all Sunday that processed comment to nor make about they consistent travelers this you if across look just X.X last were States. simply of on

to from that to X.X doesn't a listened hotels our a you well. telling been you and week about the pacing business. let own airlines then make and has one what jump seems you it hear alone And what at and Now X.X, trend, but just steady we're travel

longer. course people at days as the beneficial definition, are person last XXXX, The as both extend of is about corporate then car extend you of by One in way days been that's which raise by business that to would X.X a changing increase keep to for a they a more demand, and about overall sort duration us, is you, That that and rental, saw better in I activity. days, manifesting point in of trip, look for of is the an us combination keeping and may and two weekend on terms with if the meaning, for to pattern that quite day of by on we means a leisure the corporate that's corporate, rental. XX% of business the over by that to itself a it the too

Just seeing business. RAC, utilization. 'XX, it corporate be when improved what one softness and very, come we and very out, rates point on are The very to they're than but they VAS versus corporate, our in working. helps VAS are say, inbound, VAS are RPU-accretive they economics. in inbounds, add. program structurally, lower because despite though is -- the the and even So midweek definitely of come digit, our International strong they'll we back is And with even, double renewals now, with pointed seeing on profitable buying But Stephen right on would right? international to I

from line question Healy of next comes Northcoast Our John with the Research.

bit about why you're there. to guardrails year. sounds free just you was you some have about some Stephen, corporate But flow. It you non-fleet could guardrails just don't on just hoping about in but Obviously, cash to to maybe about giving give just facilities. formal I think into maybe to little funding not the that kind touch already maybe it, love cash going like think Anything know a CapEx, this us to ample that equity guidance for think related of in I CapEx. XXXX. would

a prices I repeat in part very of of magnitude elevated obviously, Listen, unlikely I early Sure. at we saw just sale is the context, to you itself. on think give to the gain -- XXXX, that

across better We're sale, us task fundamental volume, from believe see performance just the what to in generate to start activity in rideshare us that's that front around channels. of benefit decline that we'll growth, considerable with to offset is business. in gain to and will all of the get cash margin-accretive the Thrifty to rate year. spoken throughout the is we play hearing flow free back on We're on sort we all continued the free terms and, what going of lost around business we attributable lost And seeing flow, we've be you're in will we so growth EBITDA EBITDA Dollar replace, we of as whether better back what think the that of do I year, of a as out about And see elements half on see to the therefore, or on business the gain. cash to and order magnitude right, of was execute

ending sale, at we to 'XX on taking. as off we over it's levels read the saw say the the 'XX. carries of that in the and last to we thought heard realize direction we you year five therefore, were first, to extrapolate might that Now that the gain first potential as upside the of And preserve But an of weeks, offset residual Kenny call prices perhaps what a it, year. not hard reversal but five were we've certainly weeks seen

to again, that going So to are that's free sort of overall sort cash play of flow dynamics there.

to see into that the I nothing would siphon we ABS cash there's free facility. say flow

were you're nonetheless, purposes, no movement it to XXXX in could whole the But feel not conservative forward assumptions sort from facility were what positioned don't across cars, with for in us modeling about think of it on hearing need very itself. see. the we're we -- necessarily of course, as well fund based that we ABS price but will always which Of change, is which

not siphon. a will be that So

so the into going kind going simply Much going on a the that to all lowest be and look not have capital the it. do that fleet. said, function totally the cash customer in effectively Kenny deplete to I of said context flow fleet, that smart. because we of cost, level of it We're think to in forward that for kind which to in with, we're as which to then demand going of of efficiently back as going the sort we fleet that model it as is attentive of we're will against QX, and very that The we simply come relates first we're free spend need, a you'll be look year, to extent as fleet in to the ROA at see feed and will of want we've hard play fleeting will about down fleeting where meet the the cap be of looking half a depreciation dynamics to which an us build set and the we management. way be free I happen hunch of QX. and boundaries a demand QX market And to And rules cost going inside cash cash in maintenance, ourselves. to is the for investment we very, ROA service, deploying the to before, that's out will is of sort curve is flow

in term times your the to or kind trying remarks, way you've few Is the a maybe that comment. I a maybe I because term? And long to and you to prepared about it's ROA in with ask this come there of that question over view tasked level thought up the acceptable as team had think achieve ROA near an the

of way -- would cash all see uses we measured of judgments, share of what need absolute dollar to the we're return the you the we be think of in So is, terms of and CapEx business in judgments and I competing what deploy They're of to relative we on equally in look a relative the not where the terms all the the invested going see okay? return of valid do. -- say nonfleet business, context sort it profile capital to for listen, to we in make I I against repurchase. uses in to it's want as Well, fleet mean,

on is long-term a that. into return CapEx, of uses, the to handsomely relative return if there. to And going other it Dollar nonfleet look there we're we'll to profile If at pay to the the fleet put is going obviously, value

not. be desire capital I'd a number we relative to great a subject it continue allocation rigor, very And keep is is to like number number. put or to sort a basis, flow all And So It's steady-state down say on free hate be to a the cash through our from and going high that long right, term, to to I'd judgment. EBITDA of and particular pull sort obviously, need the just XX% every pull-through or mean cash doesn't going but thereabout to target cash that in will and happen terms EBITDA of happen think to as subject or through of return. free efficiency it's I year, the flow. in operate to that and you should view of and free outlay the be want relative the every we the allocation of rigors of to That flow quarter it to

cap on a have you cash Yes. steady to And operating also cash right, proved be costs, think state, EBITDA have steady size, would just you fleet somewhat build, year. which cetera, flow, to free the In you a steady. And et in build just to right, state, then you that XX%, one. have if this that's would the correct be John, flow

in So nonfleet that equation. minimal growth will be

historical call EBITDA. conversion CapEx, to you how close not that Is XX% it, the call levels. from then, and of -- it, So to walk

Adam of with line the from comes Jonas question Stanley. next Our Morgan

thanks ago Kenny, year, million pre-COVID. outlook, expense few year-on-year done left expectations, years us fleet really on for so and all and a $XXX and it's well out helps manage the details, $XXX about thing down down interest XX% for Well, the Steve is million one for But model you well help it that. from last does and

as know see on about things be then And the I Now for follow-up. costs a funding roll changed. a XXXX? what your in interest have you we should and costs ABS I from step-up market, thinking have But hedges fleet

Sure.

to but on given and precision Kenny new have numbers, These you what there, I are watching forward. around have in the sort the obviously the before. me give did I'll them. are So hedges to We're we just managing not of some going that Adam, roll

the valuable so sort the in be locking they've interest function cost And in to of expense. to us of very proven

Kenny, maybe speak you to want sort themselves. of to the numbers

Yes.

So of our this So fixed are side. then very And majority for year, on roughly stack, borrowing X% the roughly from costs of to cost is are be of expect XX% -- EPS well. base, on cost think is Adam, our debt the blended that And we if as year, Last number most roughly XX% Entering right? structure about this the majority right? our the costs of our effective side. a was ABS you -- fixed roughly X.X% X.X%, standpoint. around to on

As in mentioned, hedges we have place. Stephen

So speak. we for we the to variable through those. they're caps is the in the contractually ABS currently now, P&L roughly notes right in And example, funding XX% this we as are money have in And of going sell on place QX.

are you that the in on have my saying should place, up that money, the terms than of that ABS that, could before to be but even that be clarify you're interest? to We X.X% that. with thinking Just in follow-up, might better in hedges better X% side, fleet than

to caps. Yes, X% X% X.X% to with gross. X.X% Yes.

using on conservative your And just, and Steve, prudent point assumptions.

know or be further tell made you gain per is that? thinking there of there I gain order specific sale. a Presumably, Manheim it's your I how you declined, of throughout -- color of the know it magnitude recall if a in there point I our should course, that allowing range course. to of index didn't any any on because on what what that times. many but we holding without don't normal for are you're But I unit still $XX think have of on of didn't sale. could was way to that assumptions us year

would Sure. say course, of of Yes, I following. the course.

want a you As facility around the would particularly surprise. I expect, a because basis on we model, very don't ABS conservative

I what the a to variety of scenarios. equity so of having risk ABS put And is us the under sort to understand into to want facility

assumptions couple a the so you depend of publicly hundred of there's okay? required look very then basis we deviation sort that vary, of decline level And they understand segment model to report, that's of indices the no look of movement going Now what risk to look conservative to into fleet an a kind money be standard we're and wide I of which price at those of annual we probably points what's sort and we forward, scenario the believe pricing think put population conservative in sort on as but tolerance those basis. we to on at model our whereby against And I to residual ABS.

we think anything take a set I Now conservative assumptions. can fairly change, of but

assumption say price carry think residual into 'XX. Now we the would decline gain the over that again, I carrying that what side, about ABS conservative on in And we are that be. on analysis will sale from

but fairly was in what about think we I what we look and of the harvest depreciation. over last where that wholesale what channel, utilization the offset to that of ability in look harvesting capture still there's of I'm take at to so enough what's there, own gain of be sale. at top XXXX, proprietary together, out weeks. right, won't quite market, Carvana on five premium and X% our all We optimistic at And to increasing in X% It have it the the we to playing the some get we're terms gross

about market, think So think sort how both use again, that's to the of increasing out over of a in premium decline we expected an for then be, Adam, we again, narrative, and gain the bit through will residual little wholesale of terms sale it relative ABS, what on but primarily sort carrying to channels. of

of with from Ryan line the Brinkman Our comes question JPMorgan. next

I in heard you agile expect allocating repurchases XXXX, in between 'XX remarks to the other spending, capital like prepared in in that initiatives. and capital share be

this? the share in allocate interest is as priorities capital is out spending? What This then factors what would from major remain you trends? agile what that be should CapEx? the plays in you say cause other to differently are thinking Or And spending to are what your are what XXXX acquisition? hierarchy we price, initiatives, would other that like capital initiatives? current for about? it rates, And then just maybe apart First, the Is travel

three, of that a and lot we about amount will fleet We in and terms of look it. we that in business at all think think the to we sort around fundamental return fleet we I maintain we order play of is allocation with in the money relative optimize growth sort invest as share opportunity On sort how all against describe of in we're that elements of you demand, to of at what is We that them on engage the ability level of the can three control about foundational truth looking it, execute capital effectively continue look at the look sort company and to put of okay? Well, a to the non-fleet, would I and in the our out. probably We've initiatives. in so of core we around that fleet, okay? comes to mean categories, them fact okay? sort I talked non-fleet okay? And the repurchase, at look in we listed

it And want sooner were our those. then ability share us It as to human look two sold, about there tools would in we speak the in potentially very -- example, way initiatives, putting to I or the light in repurchase are that buy be sits. to than in look of and are small bolt-on think of be U.S.-based okay, is be crystal the have I clear. to Again, the I the certain other franchises acquisitions, company equally of It the accretive means bankruptcy, own of the category day, which they and during These employees mostly where opportunities. that for means the we to franchise. performance us, but of at They technology, is opportunities otherwise hands a all These one sort overall. for to at They'd are When immaterial. of run accretive small. prove in of are better capital. immaterial business means which

repurchase as when present they itself. at from themselves, do of terms looking but we that in kind and be again, realized of and We in terms and will won't of what look share non-fleet those we're at what fleet

me. implications inflation you're Hertz. to for in Act Reduction And the the is last then terms commercial terms on of just What of EV the what one the very latest of and impact purchases thinking in potential

were Well, I think we're what out because that provisions separate us opposed they legislation. to the still pieces okay, in for a were mind that, individuals, again, towards that guided the provisions separate were of as two

and of position of been view There changes as be to the of we it benefit but sort on credits. EV tax us that sort rulemaking As the that Hertz we classifications in were need of view to forward benefit it still to still the to cars of on individual detail, being the side us that benefit up and sort to about relates purchases. on different forward some that go that no to view tax will relates will [X:XX:XX] play acquisition certain opened the have in inevitably of us, consequential credit as EVs. of in have proper elements a purchase from ourselves of There's where will like. as But the being the

comes next of the Our Stathoulopoulos with SIG. from Christopher question line

in of your know view on around of drivers, elaborate subsequently a you the could in the prepared color follow-up. sharp market used the any spring? the I And you on there, that, declines current comments. your comments more Stephen, but have I thoughts vehicles your touched and then into on reversal price your that

Yes, of course.

context obviously there's okay? say, to -- at of It's computed of look important the has that weeks, residual more the the that we of cars of pool indices, watch the by is other capture And want the we in obviously relevant that. that tick been and Both fleet can overall we five then last of and performance I seen been of have of can in recognize think they value we sort what cars as we each which do a in So there to and we us. terms to movement but think we and beneficial a against general in cars obviously have are. a gain Manheim up as of in four or that where the up, about view, is company how

car of for are a that and cars back that that at it, are terms I of price car. to period price factors a is in the new availability. a out they're cars coming people source purchase are an elevated I coming buying still of trough a need in coming car, a the remain think for in As used the recognition available, otherwise market for think would And who if to point that as elevated premium kind say of I at guiding and new

of And dynamic are sort so I this means to what price they're is holding bit a little forecasting to OEMs a of that them where and back as it's in in think of coming the of of that of opportunities, for terms the the the people fairly used five first as weeks But been car the into the market buy. source year. context or consistent the vehicle a four

I'll two add Yes. things.

bodes I think holding retention. well car Stephen not coming moments spring also April of increases, prices frame, And those for then we're which the strongest well, actually used in break we're time one see only we have as up They're sales. week-over-week indication. which as seasonality, the is we March, -- for future mentioned, also seen

follow-up. my And

it in forward? you it or sort was costs, believe about business contemplated thinking some and going that top of to that and line Is on with pressure I outlook? the And how I this the this know curious, some airport reflected all dynamic your ability ongoing in in dynamic persists. -- their you're to recovery. to airlines, at your spoke the perhaps cycle BOM the having I'm that challenge business, guidance have So momentum likely as relates Is demand what's given the will and harsh capacity continue have the weather obviously, respect to versus to been an airlines with been the handle and December.

at we I just would reference in have saw a the I Christmas, had repositioned couple a the kind a because those them the that we benefit. of from sort think, airline rate. Well, a customer there now, less made I and And more car, on we you where dollars need as meaningful in as think rentals, of thousand cars arrive, pickup And benefit is to are cancellations lost we mentioned. doesn't of them just a cancellations to of that one-way where Yes. you experienced to need obviously telling that's being with transportation we made spending extent come areas of what a avoid that higher then the and they pretty equally,

that we played And positioned happen, to we that, think the are to respond it. out I to so to that not positive wish a to in wash, circumstances Christmas there's benefit be not a able if but

performing Now what in it way to said function respond the better. bit of a business little we to the question a response is the about I of earlier

insight have We a better into pricing.

into better have a We we manage how insight fleet. the

us changing that circumstances travel. All in be and to of of elements are responsive very enable quick sort to that very

there companies rental saw very that out few in what are point also would I respond Hertz. that can to relative we to car Christmas

in when disruption they a that a Hertz about the if way other if their that That's edge which company to travel, going will in position think position to that should deal can. there we're to they you disruptions I anxious in matter think to are And be extent customers to. a I going us in again. they in car one-way no sort And not where in they customers and and are Now to are very rentals that's of there myriad did rental a where players can in put want we big a that competitive to smaller be to Christmas, niche a happen in they're deliver how want to smaller rely in rental players sort to get are the will majors industry. that a serve airline know they them a able are but we Hertz, to to rerouted for be get it's of of to relative the on tough, or we get those

like concludes session. This Executive the Please I'd today's to ahead. go Stephen call back question-and-answer Officer. Chief Scherr, now to hand

certainly look the next for all with I'll back it updates further our operator. participation if before. not call, on We you turn sharing today. to your all thank So you that, forward with And to

Earnings for Quarter This concludes Conference Call. the Thank participation. Hertz XXXX Fourth your Global Holdings you