Hertz Global Holdings, Inc. (NYSE:HTZ) Q3 2018 Earnings Conference Call Transcript

Nov 09, 2018 • 08:30 am ET


Hertz Global Holdings, Inc. (NYSE:HTZ) Q3 2018 Earnings Conference Call Transcript


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Welcome to Hertz Global Holdings Third Quarter 2018 Earnings Conference Call. Currently all lines are in a listen-only mode. Following the presentation we will conduct a question-and-answer session. I would like to remind you that today's call is being recorded by the company.

I would now like to turn the call over to your host, Leslie Hunziker. Please go ahead.

Leslie Hunziker

Good morning, everyone. By now, you should all have our press release and associated financial information. We've also provided slides to accompany our conference call that can be accessed on our website.

(Forward-Looking Cautionary Statements) Today, we'll use certain non-GAAP financial measures, all of which are reconciled with GAAP numbers in our press release and our latest Form 8-K, which are posted on our website. We believe that our profitability and performance is better demonstrated by using these non-GAAP metrics.

Our call today focuses on Hertz Global Holdings, Inc., the publicly traded company. Results for the Hertz Corporation are materially the same as Hertz Global Holdings. On the call this morning, we have Kathy Marinello, our CEO; and Jamere Jackson, Hertz's new Chief Financial Officer.

Now I'll turn the call over to Kathy.

Kathy Marinello

Thank you, Leslie, and good morning, everyone. In the third quarter, our company celebrated its 100 year anniversary. With an unmatched history and tradition of creating customer connections and innovative experiences, Hertz has been setting the standard in rental car from the beginning.

Today, we're presented with more opportunities to raise the bar than ever before. Leveraging those opportunities begins by changing the way we think and act in order to strengthen the fundamentals of our business and reignite growth.

With the US turnaround plan launched in early 2017, we introduced a more structured, long-term approach for how Hertz operates at its foundation. It emphasizes managing fleet mix based on the highest rental and residual returns, planning fleet capacity at the local level using advanced demand forecasting tools, driving operational excellence through training and productivity methodologies, returning excitement to our proposition and brand, and leading through systems innovation.

When we optimally execute on these strategies, we win customers, support discipline in the marketplace, sharpen our processes and disrupt the status quo. Strong execution and discipline are key drivers of our turnaround progress, as evidenced by another quarter of year-over-year revenue and earnings growth.

The 2018 third quarter was highlighted by a 10% increase in revenue in the US rental car business. For the peak season, we closely aligned our fleet with the rising demand in our more profitable customer segments. The higher volume is being driven by the investments we've made in fleet quality, customer service and marketing initiative as well as robust travel trends.

As a result of disciplined fleet growth and a favorable customer mix, we generated a 5% increase in time and mileage rate in the US year-over-year and a 30 basis point improvement in utilization. Revenue per unit, a key measure of how we assess our performance, rose 3% in the latest quarter, continuing