Hertz Global Holdings Inc. announced it has filed its annual report on Form 10-K for the fiscal year ending December 31, 2014, which includes the restated results for 2012 and 2013 as well as selected unaudited restated financial information for 2011. In addition, the company has filed its quarterly report on Form 10-Q for the period ending March 31, 2015. The company is now up to date on all of its filings with the Securities and Exchange Commission and with its NYSE listing requirements.
Hertz also announced progress on its planned separation of its equipment rental business (Hertz Equipment Rental Corporation or "HERC") as well as its capital allocation, cost savings, capacity plans and fleet refresh.
John Tague, Hertz president and chief executive officer, said, "Today's filings are an important step forward, and our attention is now on realizing Hertz's full potential. While much work remains, I thank the Hertz team for their efforts to bring our filings up to date while continuing to remain focused on our customers and our future.
"Going forward, we are committed to developing a differentiated customer experience and premium brand position for Hertz that is number one in the industry, while revitalizing Dollar and Thrifty into leading value brands. We aspire to be the best rental car company in the world, recognized for the quality and convenience of our products and services, as well as the value we will create for shareholders.
"2015 is a transition year for Hertz. We are making important investments in our fleet, systems and service, and adding new talent to complement the existing expertise throughout the Company. In addition, we are taking actions to rationalize the Company's cost platform, dramatically improve customer satisfaction and reset our capacity. These actions and early results are indicative of the progress we are making across the organization. Our commitment to the Company's share buyback program is reflective of our confidence in driving operating performance that is sustainable and enables us to return capital to shareholders."
The Form 10-K filed contains audited restated financial information for 2012 and 2013, audited financial information for 2014, and unaudited restated selected financial information for 2011. This Form 10-K also contains quarterly information for the quarters in 2013, as restated, and 2014. The Form 10-Q filed today contains quarterly information for the first quarter of 2015.
The company noted that the filing of its Form 10-K cures the filing deficiency notice from the New York Stock Exchange as reported on March 24, 2015, and brings Hertz back into compliance with the NYSE listing requirements.
$1 Billion Share Repurchase Program
The Company reaffirmed its commitment to its previously announced $1-billion share repurchase program, and outlined its intent to execute consistent with announced year-end leverage targets, cash flow generation and other actions such as the contemplated sale of HERC operations in France and Spain, and the ultimate spin off of HERC.
Hertz Equipment Rental Corporation Separation
Hertz remains committed to the separation of its equipment rental business. With the company's financial restatement finalized, Hertz is now focused on completing the audited carve out financial statements for HERC and requisite SEC filing activities for the separation.
Net cash received in connection with the HERC separation will be used to pay down Hertz debt and support additional share repurchases.
At separation, it is expected that HERC will have a leverage ratio of 3.5x to 4.0x net debt / Corporate EBITDA. HERC expects to focus its capital allocation on fleet investment to drive growth, opportunistic acquisitions and debt reduction.
The company has put in place new leadership at HERC that is focused on delivering performance improvement in the core business and enabling profitable growth.
Capital Structure for Hertz Following HERC Separation
Post HERC separation, Hertz expects to have a year-end target net corporate leverage ratio of between 2.5x to 3.5x net corporate debt / Corporate EBITDA. The Company believes that this target will support its existing credit rating while providing the financial strength and flexibility to execute on planned technology, customer experience and brand investments.