What was the Adjusted EBITDA for the International RAC segment of Dollar Rent A Car?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
| | | 64 | | Bankruptcy-related litigation reserve(8) | | | (292) | | Long-Lived Assets impairment(9) | | | (1,048) | | Other items(10) | | | (63) | | Income (loss) before income taxes - Hertz | | | (3,512) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
| (In millions) | Americas RAC | International | Total | |
|---|---|---|---|---|
| RAC | ||||
| Change in fair value of Public Warrants(11) | 275 | |||
| Income (loss) before income taxes - Hertz Global | Year Ended December 31, 2023 | $ (3,237) | ||
| (In millions) | Americas RAC | International RAC | Total | |
| Revenues | $ | 7,722 | $ 1,649 | $ 9,371 |
| Significant segment expenses: | ||||
| Direct vehicle and operating | 4,582 | 880 | 5,462 | |
| Depreciation of revenue earning vehicles and lease charges, net(1) | 1,775 | 264 | 2,039 | |
| Selling, general and administrative | 501 | 227 | 728 | |
| Other segment items(2) | 279 | (24) | 255 | |
| Segment profit (loss): Adjusted EBITDA | $ | 585 | $ 302 | $ 887 |
| Corporate(3) | (326) | |||
| Total Hertz Global and Hertz Adjusted EBITDA | 561 | |||
| Adjustments: | ||||
| Non-vehicle depreciation and amortization | (149) | |||
| Non-vehicle debt interest, net | (238) | |||
| Vehicle debt-related charges(4) | (42) | |||
| Restructuring and restructuring related charges(5) | (17) | |||
| Unrealized gains (losses) on financial instruments(6) | (117) | |||
| Gain on sale of non-vehicle capital assets(12) | 162 | |||
| Other items(10) | (37) | |||
| Income (loss) before income taxes - Hertz | 123 | |||
| Change in |
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, the Adjusted EBITDA for the International RAC (Rental Car) segment was reported for three years. For the year ended December 31, 2022, the Adjusted EBITDA was $350 million. In 2023, the Adjusted EBITDA for the International RAC segment was $302 million. However, for the year ended December 31, 2024, the Adjusted EBITDA significantly decreased to $31 million.
These figures represent the segment profit or loss based on Adjusted EBITDA, which Dollar Rent A Car uses to assess the performance of its International RAC segment. Adjusted EBITDA typically excludes items such as interest, taxes, depreciation, and amortization, providing a clearer view of operational profitability. The document also mentions that the CODM (chief operating decision maker), who is the chief executive officer, uses Adjusted EBITDA to assess performance and allocate resources for the Company's reportable segments based on monitoring of budgeted versus actual results.
The significant decrease in Adjusted EBITDA from $302 million in 2023 to $31 million in 2024 for the International RAC segment could signal potential challenges or changes in the operational efficiency and profitability of this segment. Factors contributing to this decline could include increased operating expenses, changes in revenue, or other market-specific issues affecting the international rental car business. A prospective franchisee should investigate the reasons for this decline and understand the strategies Dollar Rent A Car plans to implement to improve the segment's financial performance.
It is important for potential franchisees to consider these trends when evaluating the financial viability of investing in a Dollar Rent A Car franchise, particularly one that may operate internationally or be affected by the performance of the International RAC segment. Understanding the factors that influence Adjusted EBITDA and the strategies to improve profitability are crucial for making an informed investment decision.