Hertz 2007 Annual Report Download - page 158

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We have a long-term investment outlook for the assets held in our Company sponsored plans, which is
consistent with the long-term nature of each plan’s respective liabilities. We have two major plans which
reside in the U.S. and the U.K.
The U.S. Plan, or the ‘‘Plan,’’ currently has a target asset allocation of 70% equity and 30% fixed income.
The equity portion of the Plan is invested in one passively managed S&P 500 index fund, one passively
managed U.S. small/midcap fund and one actively managed international portfolio. The fixed income
portion of the Plan is actively managed by a professional investment manager and is benchmarked to
the Lehman Long Govt/Credit Index. The Plan assumes an 8.50% rate of return on assets, which
represents the expected long-term annual weighted-average return for the Plan in total. The annualized
long-term performance of the Plan has generally been in excess of the long-term rate of return
assumptions.
The U.K. Plan currently invests in a professionally managed Balanced Consensus Index Fund, which has
the investment objective of achieving a total return relatively equal to its benchmark. The benchmark is
based upon the average asset weightings of a broad universe of U.K. pension funds invested in pooled
investment vehicles and each of their relevant indices. The asset allocation as of December 31, 2007,
was 85.0% equity and 15.0% fixed income. The U.K. Plan currently assumes a rate of return on assets of
7.5%, which represents the expected long-term annual weighted-average return.
Contributions
Our policy for funded plans is to contribute annually, at a minimum, amounts required by applicable
laws, regulations and union agreements. From time to time we make contributions beyond those legally
required. In 2007 and 2006, we made no discretionary cash contributions to our U.S. pension plan. In
2008, we expect to contribute, at a minimum, approximately $21.2 million to our worldwide pension
plans, including contributions required by funding regulations, discretionary contributions and benefit
payments for unfunded plans.
Estimated Future Benefit Payments
The following table presents estimated future benefit payments (in millions of dollars):
Postretirement
Pension Benefits Benefits (U.S.)
2008 .............................................. $ 33.7 $0.8
2009 .............................................. 24.4 0.9
2010 .............................................. 26.6 1.0
2011 .............................................. 27.1 1.1
2012 .............................................. 28.7 1.1
2013-2016 .......................................... 167.7 6.6
Note 5—Hertz Holdings Stock Incentive Plan
On February 15, 2006, the Boards of Directors of Hertz and Hertz Holdings jointly approved the Hertz
Global Holdings, Inc. Stock Incentive Plan, or the ‘‘Stock Incentive Plan.’’ The Stock Incentive Plan
provides for the sale of Hertz Holdings common stock to our executive officers, other key employees and
directors as well as the grant of stock options to purchase shares of Hertz Holdings common stock to
those individuals. The Board of Directors of Hertz Holdings, or a committee designated by it, selects the
officers, employees and directors eligible to participate in the Stock Incentive Plan and either the Board
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