Hertz 2012 Annual Report Download - page 137

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Divestitures
Potential Divestiture of Selected Dollar Thrifty Airport Locations
In order to obtain regulatory approval and clearance for the Dollar Thrifty acquisition, Hertz agreed to
dispose of Advantage, to secure for the buyer of Advantage certain on-airport car rental concessions
and related assets at 13 locations where Dollar Thrifty operated at least one of its brands prior to the
consummation of the Dollar Thrifty acquisition, or the ‘‘Initial airport locations.’’ Additionally, Hertz
agreed to secure for the buyer of Advantage or, in certain cases, one or more other Federal Trade
Commission-approved buyers, on-airport car rental concessions at 13 additional locations where Dollar
Thrifty operated prior to the consummation of the Dollar Thrifty acquisition, or the ‘‘Secondary airport
locations.’’ The buyer of Advantage agreed to assume all of the Secondary airport locations. As of
December 31, 2012, Hertz recorded a loss, including estimated support payments of $24.1 million.
Advantage Divestiture
On December 12, 2012, Hertz completed the sale of Simply Wheelz LLC, or the ‘‘Advantage divestiture,’’
a wholly owned subsidiary of Hertz that operated our Advantage Rent A Car business, or ‘‘Advantage,’’
for approximately $16.0 million, plus the value of current assets as of the closing date, which was
approximately $3.6 million. As part of the agreement to sell Advantage, Hertz agreed to provide financial
support to the buyer of Advantage in the amount of $17.0 million over a period of three years from the
closing date (with the present value of $15.6 million as of December 31, 2012). As a result of the
Advantage divestiture, Hertz realized a loss (before income taxes) of approximately $31.4 million as of
December 31, 2012.
To assist the buyer of Advantage in securing alternative fleet financing arrangements, Hertz entered into
a senior note credit agreement, pursuant to which Hertz agreed, subject to certain conditions, to loan
Simply Wheelz, on a senior unsecured basis, up to $45.0 million over 5 years (2.5 years weighted
average life) at varied interest rates up to 13% over the life of the loan.
Further, Hertz agreed to sublease vehicles to the buyer of Advantage for use in continuing the operations
of Advantage, for a period no longer than two years from the closing date. As such, Hertz will have
significant continuing involvement in the operations of the disposed Advantage business. Therefore, the
operating results associated with the Advantage business will continue to be classified as part of our
continuing operations in the consolidated statements of operations for all periods presented.
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