Hertz 2007 Annual Report Download - page 179

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the year ended December 31, 2007, our consolidated statement of operations includes restructuring
charges relating to the initiatives discussed above of $96.4 million, which is composed of $65.2 million of
involuntary termination benefits, $21.7 million in consulting costs, a net gain of $0.4 million related to
pension and post employment benefits and other charges of $9.9 million. The after-tax effect of the
restructuring charges reduced diluted earnings per share by $0.22 for the year ended December 31,
2007.
We plan to announce, as plans are finalized, other efficiency initiatives during 2008. We currently
anticipate incurring future charges to earnings in connection with those initiatives; however, we have not
yet developed detailed estimates of these expenses.
Restructuring charges in our consolidated statement of operations can be summarized as follows (in
thousands of dollars):
Year ended
December 31, 2007
By Caption:
Direct operating .............................................. $41,185
Selling, general and administrative ................................ 55,292
Total ..................................................... $96,477
Year ended
December 31, 2007
By Segment:
Car rental .................................................. $64,514
Equipment rental ............................................. 5,034
Corporate and other ........................................... 26,929
Total ..................................................... $96,477
Our consolidated balance sheet as of December 31, 2007, included accruals relating to the restructuring
program of $18.2 million. We expect to pay substantially all of the remaining restructuring obligations
during 2008. The following table sets forth the activity affecting the accrual during the year ended
December 31, 2007 (in thousands of dollars):
Pension
Involuntary and Post
Termination Retirement Consulting
Benefits Expense Costs Other Total
Balance as of January 1, 2007 ......... $ — $ — $ — $ — $ —
Charges incurred ................. 65,188 (366) 21,761 9,894 96,477
Cash payments .................. (48,886) (7) (19,772) (8,869) (77,534)
Other(1) ........................ (1,112) 478 116 (237) (755)
Balance as of December 31, 2007 ...... $15,190 $ 105 $ 2,105 $ 788 $ 18,188
(1) Includes $2.0 million of stock-based employee compensation expense relating to the acceleration of vesting for certain stock
options which has been classified as ‘‘Additional paid-in capital’’ on our consolidated balance sheet, a reduction of
$0.4 million in pension and post retirement liabilities which have been included within ‘‘Accrued liabilities’’ on our
consolidated balance sheet and $1.0 million in translation gains, which have been included within ‘‘Accumulated other
comprehensive income’’ on our consolidated balance sheet.
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