Hertz 2012 Annual Report Download - page 132

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
impairment requires us to compare the fair value of our indefinite-lived intangible assets to the carrying
value of those assets. In situations where the carrying value exceeds the fair value of the intangible asset,
an impairment loss equal to the difference is recognized. We estimate the fair value of our indefinite-lived
intangible assets using an income approach; specifically, based on discounted cash flows.
December 31, 2012, 2011 and 2010
At October 1, 2012, 2011 and 2010, we performed our annual test of recoverability of indefinite-lived
intangible assets. We determined that the respective book values of our indefinite-lived intangible assets
did not exceed their estimated fair values and therefore no impairment existed.
Amortization of other intangible assets for the years ended December 31, 2012, 2011 and 2010 was
approximately $84.1 million, $70.0 million and $64.7 million, respectively. Based on our amortizable
intangible assets as of December 31, 2012, we expect amortization expense to be approximately
$120.5 million in 2013, $116.1 million in 2014, $113.7 million in 2015, $64.8 million in 2016 and
$51.8 million in 2017.
Note 4—Business Combinations and Divestitures
Dollar Thrifty Acquisition
On November 19, 2012, Hertz Holdings completed the Dollar Thrifty acquisition pursuant to the terms of
the Merger Agreement with Dollar Thrifty and Merger Sub, a wholly owned Hertz subsidiary. In
accordance with the terms of the Merger Agreement, Merger Sub completed a tender offer in which it
purchased a majority of the shares of Dollar Thrifty common stock then outstanding at a price equal to
$87.50 per share in cash. Merger Sub subsequently acquired the remaining shares of Dollar Thrifty
common stock by means of a short-form merger in which such shares were converted into the right to
receive the same $87.50 per share in cash paid in the tender offer. The total purchase price was
approximately $2,592.0 million, which comprised of $2,551.0 million of cash, including our use of
approximately $404.0 million of cash and cash equivalents available from Dollar Thrifty, and the fair value
of our previously held equity interest in Dollar Thrifty of $41.0 million. As a result of re-measuring to fair
value our equity interest previously held in Dollar Thrifty immediately before the acquisition date, we
recognized a gain of approximately $8.4 million in our consolidated statements of operations within
‘‘Other (income) expense, net.’’ As a condition of the Merger Agreement, and pursuant to a divestiture
agreement reached with the Federal Trade Commission, Hertz divested its Simply Wheelz subsidiary,
which owned and operated the Advantage brand, and secured for the buyer of Advantage certain Dollar
Thrifty on-airport car rental concessions. Dollar Thrifty is now a wholly-owned subsidiary of Hertz.
The purchase price of Dollar Thrifty was funded with (i) cash proceeds of $1,950.0 million received by
Hertz from its issuance of $1,950.0 million in aggregate principal amount of Senior Notes and Term
Loans, (ii) approximately $404.0 million of acquired cash and cash equivalents from Dollar Thrifty, and
(iii) the balance funded by Hertz’s existing cash.
The Dollar Thrifty acquisition has been accounted for utilizing the acquisition method, which requires an
allocation of the purchase price of the acquired entity to the assets acquired and liabilities assumed
based on their estimated fair values from a market-participant perspective at the date of acquisition. The
allocation of the purchase price as reflected within these consolidated financial statements is based on
the best information available to management at the time these consolidated financial statements were
issued and is preliminary pending the completion of the final valuation analysis of the Dollar Thrifty
assets and liabilities. In particular, the valuation of income taxes, certain property and equipment and
lease and other contracts acquired as of the acquisition date, have not been finalized. During the
108