Hertz 2008 Annual Report Download - page 147

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1—Summary of Significant Accounting Policies
Background
Hertz Global Holdings, Inc., or ‘‘Hertz Holdings,’’ is our top-level holding company. The Hertz
Corporation, or ‘‘Hertz,’’ is our primary operating company and a direct wholly-owned subsidiary of
Hertz Investors, Inc., which is wholly-owned by Hertz Holdings. ‘‘We,’’ ‘‘us’’ and ‘‘our’’ mean Hertz
Holdings and its consolidated subsidiaries, including Hertz.
We are a successor to corporations that have been engaged in the car and truck rental and leasing
business since 1918 and the equipment rental business since 1965. Hertz was incorporated in Delaware
in 1967. Ford Motor Company, or ‘‘Ford,’’ acquired an ownership interest in Hertz in 1987. Prior to this,
Hertz was a subsidiary of UAL Corporation (formerly Allegis Corporation), which acquired Hertz’s
outstanding capital stock from RCA Corporation in 1985. Hertz Holdings was incorporated in Delaware
in 2005 and had no operations prior to the Acquisition (as defined below).
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 CCMG Acquisition Corporation, a
wholly-owned subsidiary of Hertz Holdings (previously known as CCMG Holdings, Inc.) acquired all of
Hertz’s common stock from Ford Holdings LLC 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.
We refer to the acquisition of all of Hertz’s common stock through CCMG Acquisition Corporation as the
‘‘Acquisition.’’ We refer to the Acquisition, together with related transactions entered into to finance the
cash consideration for the Acquisition, to refinance certain of our existing indebtedness and to pay
related transaction fees and expenses, as the ‘‘Transactions.’’
In November 2006, we completed our initial public offering of 88,235,000 shares of our 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 the
sale of these shares. We paid all of the expenses of 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. These expenses aggregated to approximately $2.0 million. Immediately
following the secondary public offering, the Sponsors’ ownership percentage in us decreased to
approximately 55%.
In September 2008, Bank of America announced it was acquiring Merrill Lynch & Co., the parent
company of Merrill Lynch Global Private Equity. This transaction closed on January 1, 2009. Accordingly,
Bank of America is now an indirect beneficial owner of our common stock held by Merrill Lynch Global
Private Equity and certain of its affiliates.
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