Hertz 2007 Annual Report Download - page 26

• the repayment of approximately $1,935 million under an interim credit facility that would have
matured on February 28, 2006;
• the repayment of commercial paper, notes payable and other bank debt of approximately
$1,212 million; and
• the settlement of all accrued interest and unamortized debt discounts relating to the above
existing indebtedness.
Initial and Secondary Public Offering
In November 2006, we completed our initial public offering of 88,235,000 shares of common stock at a
per share price of $15.00, with proceeds to us before underwriting discounts and offering expenses of
approximately $1.3 billion. The proceeds were used to repay borrowings that were outstanding under a
$1.0 billion loan facility entered into by Hertz Holdings, or the ‘‘Hertz Holdings Loan Facility,’’ and to pay
related transaction fees and expenses. The Hertz Holdings Loan Facility was used primarily to pay a
special cash dividend of $4.32 per share to our common stockholders on June 30, 2006. The proceeds
of the offering were also used to pay special cash dividends of $1.12 per share on November 21, 2006 to
stockholders of record of Hertz Holdings immediately prior to the initial public offering.
In June 2007, the Sponsors completed a secondary public offering of 51,750,000 shares of their Hertz
Holdings common stock at a per share price of $22.25. We did not receive any of the proceeds from this
offering. We paid approximately $2.0 million in expenses relating to the offering, excluding underwriting
discounts and commissions of the selling stockholders, pursuant to a registration rights agreement we
entered into at the time of the Acquisition. Immediately following the secondary public offering, the
Sponsors’ ownership percentage in us decreased to approximately 55%.
Our Markets
We operate in the global car rental industry and in the equipment rental industry, primarily in the United
States.
Worldwide Car Rental
We believe that the global car rental industry exceeds $30 billion in annual revenues. According to a
2007 report appearing in Auto Rental News, car rental revenues in the United States are estimated to be
approximately $22 billion in 2007 and have grown at a 5.1% compound annual growth rate since 1990,
including 5.5% growth in 2007. We believe car rental revenues in Western Europe account for over
$12.5 billion in annual revenues, with the airport portion of the industry comprising approximately 40% of
the total. Within Europe, the largest markets are Germany, France and the United Kingdom. We believe
total rental revenues for the car rental industry in Europe in 2006 were approximately $10 billion in the
nine countries—France, Germany, Italy, the United Kingdom, Spain, the Netherlands, Switzerland,
Belgium and Luxembourg—where we have company-operated rental locations and over $2.5 billion in
eight other countries—Greece, Ireland, Portugal, Sweden, Norway, Denmark, Austria and Finland—
where our brand is present through our licensees.
We estimate that rentals by airline travelers at or near airports, or ‘‘airport rentals,’’ accounted for
approximately one-half of the total market in the United States. This portion of the market is significantly
influenced by developments in the travel industry and particularly in airline passenger traffic, or
‘‘enplanements.’’ The Federal Aviation Administration, or ‘‘FAA,’’ projected in the first half of 2007 that
domestic enplanements will grow at an average annual rate of 3.4% from 2007 to 2020, consistent with
long-term historical trends. We believe car rentals in Western Europe account for over $12.5 billion in
annual revenues, with the airport portion of the industry comprising approximately 40% of the total. The
International Air Transport Association, or ‘‘IATA,’’ projected in December 2007 that annual international
enplanements would grow 3.5% in 2008.
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