Hertz 2014 Annual Report Download - page 129

Table of Contents
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revised for these adjustments as they would not have made a material impact on the prior period reported operating results and financial condition.
The allocation of the purchase price has been finalized as of November 19, 2013 as reflected within these consolidated financial statements. The
fair values of the assets acquired and liabilities assumed were determined using the income, cost and market approaches. The fair values of
acquired trade names and concession agreements were estimated using the income approach which values the subject asset using the projected
cash flows to be generated by the asset, discounted at a required rate of return that reflects the relative risk of achieving the cash flow and the
time value of money. The cost approach was utilized in combination with the market approach to estimate the fair values of property, plant and
equipment and reflects the estimated reproduction or replacement costs for the assets, less an allowance for loss in value due to depreciation.
The cost approach was utilized in combination with the market approach to estimate the fair values of most working capital accounts.
The following summarizes the fair values of the assets acquired and liabilities assumed in the acquisition based on their estimated fair values as
of the close of the acquisition (in millions):
Cash and cash equivalents $ 535
Restricted cash and cash equivalents 307
Receivables 170
Inventories 8
Prepaid expenses and other assets 41
Revenue earning equipment 1,614
Property and equipment 119
Other intangible assets 1,545
Other assets 35
Goodwill 889
Accounts payable (43)
Accrued liabilities (298)
Deferred taxes on income (846)
Debt (1,484)
Total $ 2,592
The identifiable intangible assets of $1,545 million consist of $1,140 million of trade names with an indefinite life and $405 million of concession
agreements. The concession agreements will be amortized over their expected useful lives of nine years on a straight-line basis.
The excess of the purchase price over the net tangible and intangible assets acquired resulted in goodwill of $889 million which is attributable to
the synergies and economies of scale provided to a market participant. The goodwill recorded in connection with this transaction is not deductible
for income tax purposes. All such goodwill is reported in the U.S. car rental segment.
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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