Hertz 2012 Annual Report Download - page 190

HERTZ GLOBAL HOLDINGS, INC.
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
Note 1—Background and Basis of Presentation
Hertz Global Holdings, Inc., or ‘‘Hertz Holdings,’’ is the top-level holding company that conducts
substantially all of its business operations through its indirect subsidiaries. Hertz Holdings was
incorporated in Delaware on August 31, 2005 in anticipation of the December 21, 2005 acquisition by its
subsidiary, Hertz Investors, Inc., of the Hertz Corporation.
There are significant restrictions over the ability of Hertz Holdings to obtain funds from its indirect
subsidiaries through dividends, loans or advances. Accordingly, these condensed financial statements
have been presented on a ‘‘parent-only’’ basis. Under a parent-only presentation, the investments of
Hertz Holdings in its consolidated subsidiaries are presented under the equity method of accounting.
These parent-only financial statements should be read in conjunction with the consolidated financial
statements of Hertz Holdings included in this Annual Report under the caption ‘‘Item 8—Financial
Statements and Supplementary Data.’’ For a discussion of background and basis of presentation, see
Note 1 and Note 2 to the Notes to the consolidated financial statements included in this Annual Report
under the caption ‘‘Item 8—Financial Statements and Supplementary Data.’’
Return of Capital from subsidiary
We had presented in error the return of capital distributions from our subsidiary in the Statement of
operations as ‘‘Other income’’ for 2011 and 2010 resulting in an understatement of Loss before income
taxes of $23.0 million and $23.0 million, respectively and an overstatement of Net income of $23.0 million
and an understatement of Net loss of $23.0 million, respectively. Comprehensive income (loss) were
impacted by the same amount in for 2011 and 2010. In addition, the same amounts were deducted from
Accumulated deficit in the Statement of stockholders’ equity.
The Statement of operations, comprehensive income and stockholders’ equity have been revised by
reducing previously reported Net income for 2011 and increasing Net loss for 2010 by $23.0 million and
$23.0 million, respectively. There was no impact to the amounts reported as Accumulated deficit at
December 31, 2011 and 2010.
We had presented the cash flows from the return of capital from our subsidiary in the Statement of cash
flows for 2011 and 2010 as a component of cash flows from operating activities as it was included in Net
income. The classification of these amounts have been corrected so that they are presented as cash
flows from investing activities. For the year ended December 31, 2011, the impact of this revision was to
reduce Cash flows from operating activities by $23.0 million and increase Cash flows from investing
activities by $23.0 million. For the year ended December 31, 2010, the impact of this revision was to
reduce Cash flows from operating activities by $23.0 million and increase Cash flows from investing
activities by $23.0 million.
Note 2—Debt
Convertible Senior Notes
In May and June 2009, we issued $474.8 million in aggregate principal amount of 5.25% Convertible
Senior ;Notes due June 2014. Our Convertible Senior Notes may be convertible by holders into shares of
our common stock, cash or a combination of cash and shares of our common stock, as elected by us,
initially at a conversion rate of 120.6637 shares per $1,000 principal amount of notes, subject to
adjustment.
We have a policy of settling the conversion of our Convertible Senior Notes using a combination
settlement, which calls for settling the fixed dollar amount per $1,000 in principal amount in cash and
166