Hertz 2009 Annual Report Download - page 157

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
ESPP is intended to be an ‘‘employee stock purchase plan’’ within the meaning of Section 423 of the
Internal Revenue Code.
The maximum number of shares that may be purchased under the ESPP is 3,000,000 shares of our
common stock, subject to adjustment in the case of any change in our shares, including by reason of a
stock dividend, stock split, share combination, recapitalization, reorganization, merger, consolidation or
change in corporate structure. An eligible employee may elect to participate in the ESPP each quarter (or
other period established by the Committee) through a payroll deduction. The maximum and minimum
contributions that an eligible employee may make under all of our qualified employee stock purchase
plans will be determined by the Committee, provided that no employee may be permitted to purchase
stock with an aggregate fair market value greater than $25,000 per year. At the end of the offering period,
the total amount of each employee’s payroll deduction will be used to purchase shares of our common
stock. The purchase price per share will be not less than 85% of the market price of our common stock
on the date of purchase; the exact percentage for each offering period will be set in advance by the
Committee.
For the year ended December 31, 2009, we recognized compensation cost of approximately $0.5 million
($0.3 million, net of tax) for the amount of the discount on the stock purchased by our employees.
Approximately 1,800 employees participated in the ESPP as of December 31, 2009.
Note 6—Depreciation of Revenue Earning Equipment
Depreciation of revenue earning equipment includes the following (in millions of dollars):
Years ended December 31,
2009 2008 2007
Depreciation of revenue earning equipment ................. $1,786.9 $2,020.3 $1,905.9
Adjustment of depreciation upon disposal of the equipment ..... 76.5 83.1 21.2
Rents paid for vehicles leased ........................... 68.0 90.8 76.3
Total ............................................ $1,931.4 $2,194.2 $2,003.4
The adjustment of depreciation upon disposal of revenue earning equipment for the years ended
December 31, 2009, 2008 and 2007 included (in millions of dollars) net losses of $41.3 and $32.1 and a
net gain of $0.6, respectively, on the disposal of industrial and construction equipment used in our
equipment rental operations, and net losses of $35.2, $51.0 and $21.8, respectively, on the disposal of
vehicles used in our car rental operations.
Depreciation rates are reviewed on an ongoing basis based on management’s routine review of present
and estimated future market conditions and their effect on residual values at the time of disposal. During
2009, 2008 and 2007, depreciation rates being used to compute the provision for depreciation of
revenue earning equipment were adjusted on certain vehicles in our car rental operations to reflect
changes in the estimated residual values to be realized when revenue earning equipment is sold. These
depreciation rate changes resulted in net increases of $13.2 million, $36.6 million and $13.7 million in
depreciation expense for the years ended December 31, 2009, 2008 and 2007, respectively. During
2009, 2008 and 2007, depreciation rate changes in certain of our equipment rental operations resulted in
an increase of $6.1 million and net decreases of $3.9 million and $13.1 million in depreciation expense
for the years ended December 31, 2009, 2008 and 2007, respectively.
137