Hertz 2010 Annual Report Download - page 195

Non-GAAP Reconciliations (Continued)
(In millions, except per share amounts)
Adjusted Pre-Tax Income (Loss), Adjusted Net Income (Loss) and Adjusted Earnings Per Share
(Continued)
Year Ended December 31, 2006
Other
Car Equipment Reconciling
Rental Rental Items Total
Income (loss) before income taxes . . . $ 373.5 $ 269.5 $(442.4) $ 200.6
Adjustments:
Purchase accounting(a) ......... 23.8 64.7 1.9 90.4
Non-cash debt charges(b) ........ 75.0 11.3 13.2 99.5
Derivative gains(c) ............. — — (1.0) (1.0)
Management transition costs(e) ..... — — 9.8 9.8
Stock purchase compensation
charge(e) ................. — — 13.3 13.3
Sponsor termination fee(e) ........ — — 15.0 15.0
Unrealized transaction loss on
Euro-denominated debt(e)(h) ..... — — 19.2 19.2
Interest on HGH debt .......... — — 39.9 39.9
Adjusted pre-tax income (loss) ...... 472.3 345.5 (331.1) 486.7
Assumed (provision) benefit for income
taxes of 35% ............... (165.3) (120.9) 115.9 (170.3)
Noncontrolling interest ........... — — (16.7) (16.7)
Adjusted net income (loss) ........ $307.0 $ 224.6 $(231.9) $ 299.7
Adjusted number of shares outstanding 324.8
Adjusted earnings per share ....... $ 0.92
(a) Represents the purchase accounting effects of the acquisition of all of Hertz’s common stock on December 21, 2005 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.
(b) Represents non-cash debt charges relating to the amortization and write-off of deferred debt financing costs and debt discounts.
For the years ended December 31, 2010 and 2009, also includes $68.9 million and $74.6 million, respectively, associated with the
amortization of amounts pertaining to the de-designation of our interest rate swaps as effective hedging instruments. For the years
ended December 31, 2008 and 2007, also includes $11.8 million and $20.4 million, respectively, associated with the ineffectiveness
of our interest rate swaps. For the year ended December 31, 2006, also includes interest on the $1.0 billion HGH loan facility of
$39.9 million and $1.0 million associated with the reversal of the ineffectiveness of our interest rate swaps.
(c) Amounts are included within direct operating and selling, general and administrative expense in our statement of operations.
(d) Represents costs incurred in connection with the Dollar Thrifty Automotive Group, Inc. transaction which has now been terminated.
These costs are included within selling, general and administrative expense in our statement of operations.
(e) Amounts are included within selling, general and administrative expense in our statement of operations.
(f) Amount is included within interest and other income, net in our statement of operations.
(g) Represents non-cash impairment charges related to our goodwill, other intangible assets and property and equipment.
(h) Represents an unrealized loss on currency translation of Euro-denominated debt. On October 1, 2006, we designated this
Euro-denominated debt as an effective net investment hedge of our Euro-denominated net investment in our foreign operations, as
such we no longer incur unrealized exchange transaction gains or losses in our statement of operations.