Hertz 2007 Annual Report Download - page 132

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1—Summary of Significant Accounting Policies
Background and Change in Ownership
Background
Hertz Global Holdings, Inc. is referred to herein as ‘‘Hertz Holdings.’’ The Hertz Corporation is referred to
herein as ‘‘Hertz.’’ The terms ‘‘we,’’ ‘‘us,’’ and ‘‘our’’ refer to (i) prior to December 21, 2005, Hertz and its
consolidated subsidiaries and (ii) on and after December 21, 2005, Hertz Holdings and its consolidated
subsidiaries (including Hertz). 100% of Hertz’s outstanding capital stock is owned by Hertz
Investors, Inc. (previously known as CCMG Corporation), and 100% of Hertz Investors, Inc.’s capital
stock is owned by Hertz Holdings (previously known as CCMG Holdings, Inc.).
Hertz Holdings was incorporated in Delaware on August 31, 2005 by the Sponsors (as defined below) to
serve as the top-level holding company for Hertz, its primary operating company. Hertz Holdings had no
operations prior to the Acquisition (as defined below). Hertz was incorporated in Delaware in 1967 and is
a successor to corporations that have been engaged in the automobile and truck rental and leasing
business since 1918. Ford Motor Company, or ‘‘Ford,’’ first acquired an ownership interest in Hertz in
1987. Previously, Hertz had been a subsidiary of UAL Corporation (formerly Allegis Corporation), which
had acquired Hertz’s outstanding capital stock from RCA Corporation in 1985. Hertz became a wholly-
owned subsidiary of Ford as a result of a series of transactions in 1993 and 1994. Hertz continued as a
wholly-owned subsidiary of Ford until April 1997. In 1997, Hertz completed a public offering of
approximately 50.6% of Hertz’s Class A Common Stock, or the ‘‘Class A Common Stock,’’ which
represented approximately 19.1% of Hertz’s economic interest. In March 2001, Ford, through a
subsidiary, acquired all of Hertz’s outstanding Class A Common Stock that it did not already own for
$35.50 per share, or approximately $735 million. As a result of that acquisition, Hertz’s Class A Common
Stock ceased to be traded on the New York Stock Exchange. However, because certain of Hertz’s debt
securities were sold through public offerings, Hertz continued to file periodic reports under the Securities
Exchange Act of 1934.
The Acquisition and Related Transactions
On December 21, 2005, or the ‘‘Closing Date,’’ investment funds associated with or designated by
Clayton, Dubilier & Rice, Inc., or ‘‘CD&R,’’ The Carlyle Group, or ‘‘Carlyle,’’ and Merrill Lynch Global
Private Equity, or ‘‘MLGPE,’’ or collectively the ‘‘Sponsors,’’ through a wholly-owned subsidiary of Hertz
Holdings, acquired all of Hertz’s common stock from a subsidiary of Ford, or the ‘‘Acquisition,’’ for
aggregate consideration of $4,379 million in cash, debt refinanced or assumed of $10,116 million and
transaction fees and expenses of $447 million. To finance the cash consideration for the Acquisition, to
refinance certain of our existing indebtedness and to pay related transaction fees and expenses, or the
‘‘Transactions,’’ the Sponsors used:
• equity contributions totaling $2,295 million from the investment funds associated with or
designated by the Sponsors;
• net proceeds from a private placement by CCMG Acquisition Corporation, a wholly-owned
subsidiary of Hertz Holdings, of $1,800 million aggregate principal amount of 8.875% Senior
Notes due 2014, or the ‘‘Senior Dollar Notes’’ and $600 million aggregate principal amount of
10.5% Senior Subordinated Notes due 2016, or the ‘‘Senior Subordinated Notes’’ and
e225 million aggregate principal amount of 7.875% Senior Notes due 2014, or the ‘‘Senior Euro
Notes.’’ In connection with the Transactions, CCMG Acquisition Corporation merged with and
into Hertz, with Hertz as the surviving corporation of the merger. CCMG Acquisition Corporation
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