Thrifty Car Rental 2010 Annual Report Download - page 90

During the first, second, third and fourth quarters of 2010, the Company incurred $1.7 million,
$6.9 million, $11.9 million and $2.1 million, respectively, in merger-related expenses. See Note
18 for further discussion.
During the fourth quarter of 2010, the Company recorded favorable changes in vehicle insurance
reserve estimates of $13.4 million in conjunction with receiving actuarial updates on its vehicle
insurance programs. See Note 15 for further discussion.
In 2010, the majority relating to the third quarter, the Company wrote off $1.1 million (pretax)
primarily related to software no longer in use and to impairments of assets at its company-owned
stores.
During the second and fourth quarters of 2009, the Company recorded favorable changes in
vehicle insurance reserve estimates of $3.8 million and $5.6 million, respectively, in conjunction
with receiving actuarial updates on its vehicle insurance programs. See Note 15 for further
discussion.
In 2009, the majority relating to the fourth quarter, the Company wrote off $2.6 million (pretax)
related primarily to the impairment of assets at its company-owned stores and for software no
longer in use.
18. MERGER AND RELATED MATTERS
On April 25, 2010, the Company, Hertz and HDTMS, Inc., a wholly owned subsidiary of Hertz
(“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”)
providing for Hertz to acquire the Company.
The transaction was subject to customary closing conditions, including, among others, adoption
of the Merger Agreement by the Company’s stockholders. On September 30, 2010, the
Company held its special meeting of stockholders, wherein the necessary majority of the
outstanding shares of the Company did not vote in favor of adopting the Merger Agreement or in
favor of approving the adjournment of the meeting to solicit additional proxies in favor of
adopting the Merger Agreement. Subsequently, on October 1, 2010, Hertz notified the Company
that it had terminated the Merger Agreement, as amended, by and among Hertz, Merger Sub
and the Company.
Following the termination of the Merger Agreement, the Company agreed to cooperate with
respect to Avis Budget’s efforts to pursue antitrust clearance in conjunction with a potential
acquisition of the Company. Avis Budget may not be able to obtain such approval on reasonable
terms and, even if it does, the Company may not be able to reach agreement with Avis Budget
on the terms of a merger or other business combination transaction. Avis Budget demonstrated
its interest in a potential acquisition of the Company in August of 2010 while the Company was
under the Merger Agreement with Hertz. During the fourth quarter of 2010 and a portion of
2011, the Company and Avis Budget have provided a substantial amount of information to the
Federal Trade Commission (the “FTC”) to respond to inquiries relating to competition in the
rental car industry. Both companies believe significant progress has been made in the
discussions with the FTC; however, the FTC’s position with respect to the competitive issues
remains uncertain. During February 2011, the Company and Avis Budget have both submitted
their respective certifications of substantial compliance with the FTC’s second request. Based
on the timing of these submissions, the Company expects to have greater clarity regarding the
FTC’s official position in the near future. The Company has not entered into any definitive
agreement with Avis Budget. Any such agreement would be subject to the approval of the
Company’s stockholders and could also be subject to other material conditions, such as potential
divestitures of assets or businesses of either or both of the Company and Avis Budget, or the
approval of Avis Budget’s stockholders.
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