Dollar Thrifty Automotive Group Provides Update On Fleet Diversification and Cost
TULSA, Okla. // PRNewswire-FirstCall // -- Dollar Thrifty Automotive Group, Inc. (NYSE: DTG) today announced that it has substantially completed its inventory ordering cycle for 2010 model year vehicles, and in conjunction with those orders will meet its previously announced strategic objective of fleet diversification during 2010 when those vehicle orders are delivered. The Company noted that its 2010 vehicle orders will provide its customers with a wider range of vehicles, while at the same time allowing the Company to diversify the residual value and production risk across a broader range of suppliers. The Company's 2010 fleet purchases are broken down by manufacturer as follows:
General Motors 20
Hyundai / Kia / Other 10
"One of our primary goals for 2009 was to diversify our fleet in order to mitigate the various risks associated with concentration of inventory from any individual suppliers, while at the same time providing our customers with a broader array of options to meet their individual rental needs. We are pleased to have achieved this objective in a relatively short time frame," said Scott L. Thompson, Chief Executive Officer and President. "We truly appreciate the ongoing support of our manufacturer partners, and look forward to continuing to forge long-term, mutually beneficial relationships with each of them."
The Company also noted that during the third quarter it continued to experience sequential improvement in fleet depreciation costs per vehicle due to improving residual values resulting from conditions in the used vehicle market as well as improved purchase economics on model year 2010 inventory purchases.
The Company had previously stated an objective of achieving an average fleet cost of $350 per unit per month some time during calendar 2010. The Company noted, however, that it now expects fleet costs to be below the $350 level for the third and fourth quarters of 2009, and, based on current facts and circumstances, now expects its 2010 fleet cost to stabilize below $350 per unit per month.
About Dollar Thrifty Automotive Group, Inc.
Dollar Thrifty Automotive Group, Inc. is a Fortune 1000 company headquartered in Tulsa, Oklahoma. Driven by the mission "Value Every Time," the Company's brands, Dollar Rent A Car and Thrifty Car Rental, serve value-conscious travelers in over 70 countries. Dollar and Thrifty have over 600 corporate and franchised locations in the United States and Canada, operating in virtually all of the top U.S. and Canadian airport markets. The Company's approximately 6,400 employees are located mainly in North America, but global service capabilities exist through an expanding international franchise network.
This press release contains "forward-looking statements" about our expectations, plans and performance. These statements use such words as "may," "will," "expect," "believe," "intend," "should," "could," "anticipate," "estimate," "forecast," "project," "plan" and similar expressions. These statements do not guarantee future performance and Dollar Thrifty Automotive Group, Inc. assumes no obligation to update them. Risks and uncertainties that could materially affect future results include:
- the impact of persistent pricing and demand pressures, particularly in light of the continuing volatility in the global financial markets, constrained credit markets and concerns about global economic prospects, which have continued to depress consumer confidence and spending levels and could affect the ability of our customers to meet their payment obligations to us;
- whether efforts to revitalize the U.S. automotive industry are successful;
- the impact of pricing and other actions by competitors;
- airline travel patterns, including disruptions or reductions in air travel resulting from airline bankruptcies, industry consolidation, capacity reductions and pricing actions;
- the cost and other terms of acquiring and disposing of automobiles and the impact of conditions in the used car market on our ability to reduce our fleet capacity as and when projected by our plans;
- the potential for significant cash tax payments in 2010 as a result of the reduction in our fleet size and the resulting impact of our inability to defer gains on the disposition of our vehicles under our like-kind exchange program;
- our ability to manage our fleet mix to match demand and reduce vehicle depreciation costs, particularly in light of the significant increase in the level of Non-Program Vehicles (those without a guaranteed residual value) in our fleet and our exposure to the used car market;
- the impact of our strategy to increase holding periods for vehicles in our fleet, including potential adverse customer perceptions of the quality of our fleet and increased servicing costs;
- volatility in gasoline prices;
- our ability to obtain cost-effective financing as needed without unduly restricting operational flexibility, particularly if global economic conditions deteriorate further;
- our ability to comply with financial covenants or to obtain necessary amendments or waivers, and the impact of the terms of any required amendments or waivers, such as potential reductions in lender commitments;
- our ability to manage the consequences under our financing agreements of an event of bankruptcy with respect to any of the monoline insurers that provide credit support for our asset backed financing structures;
- whether counterparties under our derivative instruments will continue to perform as required;
- whether ongoing governmental and regulatory initiatives in the United States and elsewhere to stimulate economic growth will be successful;
- the effectiveness of other actions we take to manage costs and liquidity and whether further reductions in the scope of our operations will be necessary;
- disruptions in information and communication systems we rely on, including those relating to methods of payment;
- access to reservation distribution channels;
- the cost of regulatory compliance and the outcome of pending litigation;
- local market conditions where we and our franchisees do business, including whether franchisees will continue to have access to capital as needed; and
- the impact of natural catastrophes and terrorism.
Forward-looking statements should be considered in light of information in this press release and other filings we make with the Securities and Exchange Commission.
SOURCE Dollar Thrifty Automotive Group, Inc.