Hertz 2012 Annual Report Download - page 162

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Employee Stock Purchase Plan
On February 28, 2008, upon recommendation of the compensation committee of our Board of Directors,
or ‘‘Committee,’’ our Board of Directors adopted the Hertz Global Holdings, Inc. Employee Stock
Purchase Plan, or the ‘‘ESPP,’’ and the plan was approved by our stockholders on May 15, 2008. The
ESPP is intended to be an ‘‘employee stock purchase plan’’ within the meaning of Section 423 of the
Internal Revenue Code.
The maximum number of shares that may be purchased under the ESPP is 3,000,000 shares of our
common stock, subject to adjustment in the case of any change in our shares, including by reason of a
stock dividend, stock split, share combination, recapitalization, reorganization, merger, consolidation or
change in corporate structure. An eligible employee may elect to participate in the ESPP each quarter (or
other period established by the Committee) through a payroll deduction. The maximum and minimum
contributions that an eligible employee may make under all of our qualified employee stock purchase
plans will be determined by the Committee, provided that no employee may be permitted to purchase
stock with an aggregate fair market value greater than $25,000 per year. At the end of the offering period,
the total amount of each employee’s payroll deduction will be used to purchase shares of our common
stock. The purchase price per share will be not less than 85% of the market price of our common stock
on the date of purchase; the exact percentage for each offering period will be set in advance by the
Committee.
For the years ended December 31, 2012, 2011 and 2010, we recognized compensation cost of
approximately $0.8 million, $0.7 million and $0.6 million, respectively, for the amount of the discount on
the stock purchased by our employees under the ESPP. Approximately 1,800 employees participated in
the ESPP as of December 31, 2012.
Note 8—Depreciation of Revenue Earning Equipment and Lease Charges
Depreciation of revenue earning equipment and lease charges includes the following (in millions of
dollars):
Years Ended December 31,
2012 2011 2010
Depreciation of revenue earning equipment ................. $2,165.2 $1,921.8 $1,747.0
Adjustment of depreciation upon disposal of revenue earning
equipment ....................................... (96.8) (112.2) 42.9
Rents paid for vehicles leased ........................... 79.8 96.1 78.2
Total ............................................ $2,148.2 $1,905.7 $1,868.1
The adjustment of depreciation upon disposal of revenue earning equipment for the year ended
December 31, 2012, 2011 and 2010, included net gains of $83.2 million and $98.9 million and net loss of
$32.9 million, respectively, on the disposal of vehicles used in our car rental operations and net gains of
$13.5 million and $13.3 million and net loss of $10.0 million, respectively, on the disposal of industrial
and construction equipment used in our equipment rental operations.
Depreciation rates are reviewed on a quarterly basis based on management’s routine review of present
and estimated future market conditions and their effect on residual values at the time of disposal. During
the year ended December 31, 2012, depreciation rates being used to compute the provision for
depreciation of revenue earning equipment were adjusted on certain vehicles in our car rental
operations to reflect changes in the estimated residual values to be realized when revenue earning
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