Hertz 2009 Annual Report Download - page 165

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31,
2009 2008
Total assets at end of year
United States ........................................................ $10,669.7 $10,921.6
International ......................................................... 5,332.7 5,529.8
Total ............................................................ $16,002.4 $16,451.4
Revenue earning equipment, net, at end of year
United States ........................................................ $6,432.3 $ 6,132.8
International ......................................................... 2,419.3 2,558.7
Total ............................................................ $8,851.6 $ 8,691.5
Property and equipment, net, at end of year
United States ........................................................ $ 953.7 $ 1,010.5
International ......................................................... 234.4 244.1
Total ............................................................ $1,188.1 $ 1,254.6
(a) The following table reconciles adjusted pre-tax income to income (loss) before income taxes and noncontrolling interest for the years
ended December 31, 2009, 2008 and 2007 (in millions of dollars):
Years ended December 31,
2009 2008 2007
Adjusted pre-tax income
Car rental ........................................... $465.3 $ 289.1 $ 605.0
Equipment rental ...................................... 76.4 272.0 373.8
Total reportable segments ............................... 541.7 561.1 978.8
Adjustments:
Other reconciling items(1) ................................. (342.8) (323.9) (318.1)
Purchase accounting(2) ................................... (90.3) (101.0) (95.2)
Non-cash debt charges(3) ................................. (171.9) (100.2) (105.9)
Restructuring charges ................................... (106.8) (216.2) (96.4)
Restructuring related charges(4) ............................. (46.5) (26.3) —
Impairment charges(5) ................................... —(1,168.9) —
Management transition costs ............................... (1.0) (5.2) (15.0)
Derivative gains (losses)(6) ................................. 2.4 (2.2) 4.1
Gain on debt buyback(7) .................................. 48.5 ——
Third-party bankruptcy accrual(8) ............................. (4.3) ——
Secondary offering costs ................................. ——(2.0)
Vacation accrual adjustment(9) .............................. ——36.5
Income (loss) before income taxes and noncontrolling interest ............ $(171.0) $(1,382.8) $ 386.8
(1) Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other
business activities such as our third-party claim management services.
(2) Represents the purchase accounting effects of the Acquisition on our results of operations relating to increased
depreciation and amortization of tangible and intangible assets and accretion of revalued workers’ compensation and
public liability and property damage liabilities. Also represents the purchase accounting effects of subsequent acquisitions
on our results of operations relating to increased amortization of intangible assets.
(3) Represents non-cash debt charges relating to the amortization of deferred debt financing costs and debt discounts. For the
year ended December 31, 2009, also includes $74.6 million associated with the amortization of amounts pertaining to the
de-designation of the Hertz Vehicle Financing LLC, or ‘‘HVF,’’ interest rate swaps as effective hedging instruments. During
the years ended December 31, 2008 and 2007, also includes $11.8 million and $20.4 million, respectively, associated with
the ineffectiveness of our HVF interest rate swaps. During the year ended December 31, 2008, also includes $30.0 million
related to the write-off of deferred financing costs associated with those countries outside the United States as to which
take-out asset-based facilities have not been entered into. During the year ended December 31, 2007, also includes the
write-off of $16.2 million of unamortized debt costs associated with a debt modification.
(4) Represents incremental, one-time costs incurred directly supporting our business transformation initiatives. Such costs
include transition costs incurred in connection with our business process outsourcing arrangements and incremental costs
incurred to facilitate business process re-engineering initiatives that involve significant organization redesign and extensive
operational process changes.
(5) Represents non-cash impairment charges related to our goodwill, other intangible assets and property and equipment.
(6) In 2009, represents the mark-to-market adjustments on our interest rate cap and gasoline swap. In 2008 and 2007,
represents unrealized losses and a realized gain on our HIL interest rate swaptions which were terminated in October 2008.
(7) Represents a gain (net of transaction costs) recorded in connection with the buyback of portions of our Senior Notes and
Senior Subordinated Notes.
(8) Represents an allowance for uncollectible program car receivables related to a bankrupt European dealer affiliated with a
U.S. car manufacturer.
(9) Represents a decrease in the employee vacation accrual relating to a change in our U.S. vacation policy in 2007 which
provides for vacation entitlement to be earned ratably throughout the year versus the previous policy which provided for full
vesting on January 1 of each year.
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