Hertz 2009 Annual Report Download - page 92

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Ratio of Adjusted Pre-Tax Income to Revenues
Adjusted pre-tax income for our car rental segment as a percent of its revenues increased from 4.2% in
2008 to 7.8% in 2009. Adjusted pre-tax income for our equipment rental segment as a percent of its
revenues decreased from 16.4% in 2008 to 6.9% in 2009.
The ratio of adjusted pre-tax income to revenues for our two reportable segments has historically
reflected the different environments in which they operate, although the difference has been eliminated
for the year ended December 31, 2009 because of the more rapid decline in revenues in our equipment
rental segment. Our infrastructure costs are higher within our car rental segment due to the number and
type of locations in which it operates and the corresponding headcount. In addition, our revenue earning
equipment in our equipment rental segment generates lower depreciation expense due to its longer
estimated useful life.
Benefit for Taxes on Income, Net Income Attributable to Noncontrolling Interests and Net Loss
Attributable to Hertz Holdings, Inc. and Subsidiaries’ Common Stockholders
Years Ended
December 31,
2009 2008 $ Change % Change
(in millions of dollars)
Loss before income taxes ...................... $(171.0) $(1,382.8) $1,211.8 (87.6)%
Benefit for taxes on income ..................... 59.7 196.9 (137.2) (69.7)%
Net loss ................................... (111.3) (1,185.9) 1,074.6 (90.6)%
Less: Net income attributable to noncontrolling interests (14.7) (20.8) 6.1 (29.4)%
Net loss attributable to Hertz Holdings, Inc. and
Subsidiaries’ common stockholders ............. $(126.0) $(1,206.7) $1,080.7 (89.6)%
Benefit for Taxes on Income
The effective tax rate for the year ended December 31, 2009 was 34.9% as compared to 14.2% in the
year ended December 31, 2008. The benefit for taxes on income decreased 69.7%, primarily due to
non-recurring 2008 impairment charges. See Note 7 to the Notes to our consolidated financial
statements included in this Annual Report under the caption ‘‘Item 8—Financial Statements and
Supplementary Data.’’
Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests decreased 29.4% due to a decrease in our majority-
owned subsidiary Navigation Solutions, L.L.C.’s net income for the year ended December 31, 2009 as
compared to the year ended December 31, 2008.
Net Loss Attributable to Hertz Holdings, Inc. and Subsidiaries’ Common Stockholders
The net loss attributable to Hertz Holdings, Inc. and Subsidiaries’ common stockholders decreased
89.6% primarily due to the impairment of our goodwill, other intangible assets and property and
equipment in 2008 and strong cost management performance, partly offset by lower rental volume and
pricing in our worldwide car and equipment rental operations, as well as the net effect of other
contributing factors noted above. The impact of changes in exchange rates on net loss was mitigated by
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