Hertz 2011 Annual Report Download - page 91

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Equipment Rental Segment
Adjusted pre-tax income for our equipment rental segment of $161.6 million increased 107.2% from
$78.0 million for 2010. The increase was primarily due to stronger volumes and pricing, strong cost
management performance and higher residual values on the disposal of used equipment. Adjustments
to our equipment rental segment income before income taxes for 2011 totaled $92.3 million (which
consists of purchase accounting of $44.4 million, restructuring and restructuring related charges of
$42.4 million and non-cash debt charges of $5.5 million). Adjustments to our equipment rental loss
before income taxes for 2010 totaled $92.6 million (which consists of purchase accounting of
$50.1 million, restructuring and restructuring related charges of $35.0 million and non-cash debt
charges of $7.5 million). See footnote (c) to the table under ‘‘Results of Operations’’ for a summary and
description of these adjustments.
PROVISION FOR TAXES ON INCOME, NET INCOME ATTRIBUTABLE TO NONCONTROLLING
INTERESTS AND NET INCOME (LOSS) ATTRIBUTABLE TO HERTZ GLOBAL HOLDINGS, INC.
AND SUBSIDIARIES’ COMMON STOCKHOLDERS
Years Ended
December 31,
2011 2010 $ Change % Change
(in millions of dollars)
Income (loss) before income taxes .................. $324.3 $(14.6) $ 338.9 N/M
Provision for taxes on income ...................... (128.5) (16.7) (111.8) 671.5%
Net income (loss) .............................. 195.8 (31.3) 227.1 N/M
Less: Net income attributable to noncontrolling interests . . (19.6) (17.4) (2.2) 12.5%
Net income (loss) attributable to Hertz Global
Holdings, Inc. and Subsidiaries’ common stockholders . . $ 176.2 $(48.7) $ 224.9 N/M
Provision for Taxes on Income
The effective tax rate for 2011 was 39.6% as compared to (113.8)% in 2010. The provision for taxes on
income increased $111.8 million, primarily due to higher income before income taxes, changes in
geographic earnings mix and changes in valuation allowances for losses in certain non-U.S. jurisdictions
for which tax benefits cannot be realized. See Note 8 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 12.5% due to an increase in our formerly
majority-owned subsidiary Navigation Solutions, L.L.C.’s net income for 2011 as compared to the year
ended December 31, 2010. In December 2011, Hertz purchased the noncontrolling interest of
Navigation Solutions, L.L.C., thereby increasing its ownership interest from 65% to 100%.
Net Income Attributable to Hertz Global Holdings, Inc. and Subsidiaries’ Common
Stockholders
The net income attributable to Hertz Global Holdings, Inc. and Subsidiaries’ common stockholders was
$176.2 million in 2011 compared to a loss in 2010 of $48.7 million primarily due to higher rental volumes
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