Hertz 2009 Annual Report Download - page 119

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,’’ acquired all of Hertz’s common stock from Ford Holdings LLC, or ‘‘Ford
Holdings,’’ 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 by the Sponsors as the ‘‘Acquisition.’’ Following our initial public offering in
November 2006 and subsequent offerings in June 2007, May 2009 and June 2009, the Sponsors
currently own approximately 51% of the common stock of Hertz Holdings.
2009 Hertz Holdings Offerings
In January 2009, Bank of America Corporation, or ‘‘Bank of America,’’ acquired Merrill Lynch & Co., Inc.,
the parent company of MLGPE. Accordingly, Bank of America is now an indirect beneficial owner of our
common stock held by MLGPE and certain of its affiliates.
In May and June 2009, we completed a follow-on public offering of 52,900,000 shares of our common
stock at a price of $6.50 per share with proceeds before underwriting discounts and offering expenses of
approximately $343.9 million, or the ‘‘Common Stock Public Offering.’’
In addition, in May 2009 we entered into subscription agreements with investment funds affiliated with
CD&R and Carlyle to purchase an additional 32,101,182 shares of our common stock at a price of $6.23
per share (the same price per share paid to us by the underwriters in the Common Stock Public Offering)
with proceeds to us of approximately $200.0 million, or the ‘‘Private Offering.’’ The Private Offering
closed on July 7, 2009 and the 32,101,182 shares of our common stock were issued to the CD&R and
Carlyle affiliated investment funds on the same date. Giving effect to the Common Stock Public Offering
and the Private Offering, the Sponsors’ ownership percentage in us is approximately 51%.
In May and June 2009, we also completed a public offering of an aggregate principal amount of
$474,755,000 of 5.25% convertible senior notes due 2014, or the ‘‘Convertible Debt Public Offering.’’
We used the net proceeds from the Common Stock Public Offering, the Private Offering and the
Convertible Debt Public Offering, collectively the ‘‘2009 Hertz Holdings Offerings,’’ to increase our
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