Hertz 2009 Annual Report Download - page 97

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
(Provision) Benefit for Taxes on Income, Net Income Attributable to Noncontrolling Interests
and Net Income (Loss) Attributable to Hertz Holdings, Inc. and Subsidiaries’ Common
Stockholders
Years Ended
December 31,
2008 2007 $ Change % Change
(in millions of dollars)
Income (loss) before income taxes ............... $(1,382.8) $ 386.8 $(1,769.6) (457.5)%
(Provision) benefit for taxes on income ............ 196.9 (102.6) 299.5 291.9%
Net income (loss) ........................... (1,185.9) 284.2 (1,470.1) (517.2)%
Less: Net income attributable to noncontrolling
interests ................................ (20.8) (19.7) (1.1) (5.6)%
Net income (loss) attributable to Hertz Holdings, Inc.
and Subsidiaries’ common stockholders ......... $(1,206.7) $ 264.5 $(1,471.2) (556.1)%
(Provision) Benefit for Taxes on Income
The effective tax rate for the year ended December 31, 2008 decreased to 14.2% from 26.5% in the year
ended December 31, 2007. The (provision) benefit for taxes on income decreased 291.9%, primarily due
to tax benefits associated with an increase in the valuation allowance for losses in certain non-U.S.
jurisdictions and the recording of a valuation allowance on certain U.S. deferred tax assets where
management determined the likelihood exists the assets may not be realized as well as goodwill
impairment charges, mentioned above, for which no benefit can be realized. 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 increased 5.6% primarily due to an increase in our
majority-owned subsidiary Navigation Solutions, L.L.C.’s net income in 2008 as compared to 2007.
Net Income (Loss) Attributable to Hertz Holdings, Inc. and Subsidiaries’ Common Stockholders
The net loss attributable to Hertz Holdings, Inc. and Subsidiaries’ common stockholders decreased
556.1% primarily due to the impairment of our goodwill, other intangible assets and property and
equipment, lower rental volume and pricing in our worldwide car and equipment rental operations,
increased restructuring and restructuring related charges and higher fleet related costs, as well as the
net effect of other contributing factors noted above. The impact of changes in exchange rates on net
income (loss) was mitigated by the fact that not only revenues but also most expenses outside of the
United States were incurred in local currencies.
Liquidity and Capital Resources
As of December 31, 2009, we had cash and cash equivalents of $985.6 million, an increase of
$391.4 million from December 31, 2008. As of December 31, 2009, we had $365.2 million of restricted
cash and cash equivalents to be used for the purchase of revenue earning vehicles and other specified
uses under our Fleet Financing facilities (defined below), our LKE Program and to satisfy certain of our
self-insurance regulatory reserve requirements. The decrease in restricted cash and cash equivalents of
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