Hertz 2012 Annual Report Download - page 94

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Selling, General and Administrative Expenses
Selling, general and administrative expenses of $945.7 million for 2012 increased $221.2 million due to
increases in administrative, sales promotion and advertising expenses, partly offset by the effects of
foreign currency translation of approximately $20.8 million.
Administrative expenses increased $192.8 million, or 42.3%. On a comparable basis, acquisition
fees increased $26.0 million, expenses associated with the withdrawal from a multiemployer
pension plan increased $23.2 million, contractor costs increased $5.5 million, legal expenses
increased $6.4 million, restructuring and restructuring related charges increased by $8.1 million,
which is in addition to litigation settlement expenses of $19.2 million. These increases were partly
offset by the effects of foreign currency translation of approximately $14.2 million. The remaining
2012 net increase was primarily attributable to the Recent Acquisitions.
Sales promotion expenses increased $12.0 million, or 8.4%, primarily related to increases in sales
salaries and commissions due to improved results, partially offset by the effects of foreign currency
translation of approximately $2.4 million.
Advertising expenses increased $16.4 million, or 11.2%, primarily due to increased media and
on-line advertising, higher airline miles expense associated with increased volume, costs related to
our customer loyalty program, partly offset by the effects of foreign currency translation of
approximately $4.2 million. The remaining 2012 net increase was primarily attributable to the Recent
Acquisitions.
Interest Expense
Car Rental Segment
Interest expense for our car rental segment of $316.3 million for 2012 decreased 5.0% from
$333.1 million for 2011. The decrease was primarily due to debt refinancing activity, lower interest rates
in 2012 and the effects of foreign currency translation of $8.5 million, partly offset by the higher levels of
debt required to fund the Recent Acquisitions.
Equipment Rental Segment
Interest expense for our equipment rental segment of $52.0 million for 2012 increased 14.8% from
$45.3 million for 2011. The increase was primarily due to increases in the weighted-average debt
outstanding as a result of an increase in average fleet size.
Other
Other interest expense relating to interest on corporate debt of $281.6 million for 2012 decreased 12.4%
from $321.3 million for 2011. The decrease was primarily due to larger write-offs last year of unamortized
debt costs in connection with refinancing activity, lower rates achieved with the refinancing of our Senior
Notes and Senior Subordinated Notes and a decrease in the weighted-average debt outstanding and
interest rates.
Interest Income
Interest income decreased $0.6 million from the prior year.
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