Hertz 2008 Annual Report Download - page 26

ITEM 1. BUSINESS (Continued)
aggregate principal amount of approximately $803.3 million remained outstanding following the
Transactions;
• the repurchase of approximately e192.4 million (or approximately $230.0 million, calculated as of
December 31, 2005) in aggregate principal amount of existing Euro Medium Term Notes with a
maturity of July 2007, of which additional medium term notes in the aggregate principal amount of
approximately e7.6 million, or the ‘‘Euro Medium Term Notes,’’ remained outstanding following
the Transactions;
• the repayment of a $1,185 million intercompany note issued by Hertz to Ford Holdings on
June 10, 2005 that would have matured in June 2010;
• the repayment of approximately $1,935 million under an interim credit facility that would have
matured on February 28, 2006;
• the repayment of commercial paper, notes payable and other bank debt of approximately
$1,212 million; and
• the settlement of all accrued interest and unamortized debt discounts relating to the above
existing indebtedness.
Initial and Secondary Public Offering
In November 2006, we completed our initial public offering of 88,235,000 shares of common stock at a
per share price of $15.00, with proceeds to us before underwriting discounts and offering expenses of
approximately $1.3 billion. The proceeds were used to repay borrowings that were outstanding under a
$1.0 billion loan facility entered into by Hertz Holdings, or the ‘‘Hertz Holdings Loan Facility,’’ and to pay
related transaction fees and expenses. The Hertz Holdings Loan Facility was used primarily to pay a
special cash dividend of $4.32 per share to our common stockholders on June 30, 2006. The proceeds
of the offering were also used to pay special cash dividends of $1.12 per share on November 21, 2006 to
stockholders of record of Hertz Holdings immediately prior to the initial public offering.
In June 2007, the Sponsors completed a secondary public offering of 51,750,000 shares of their Hertz
Holdings common stock at a per share price of $22.25. We did not receive any of the proceeds from this
offering. We paid approximately $2.0 million in expenses relating to the offering, excluding underwriting
discounts and commissions of the selling stockholders, pursuant to a registration rights agreement we
entered into at the time of the Acquisition. Immediately following the secondary public offering, the
Sponsors’ ownership percentage in us decreased to approximately 55%.
In September 2008, Bank of America announced it was acquiring Merrill Lynch & Co., the parent
company of Merrill Lynch Global Private Equity. This transaction closed on January 1, 2009. Accordingly,
Bank of America is now an indirect beneficial owner of our common stock held by Merrill Lynch Global
Private Equity and certain of its affiliates.
Our Markets
We operate in the global car rental industry and in the equipment rental industry.
Worldwide Car Rental
We believe that the global car rental industry exceeds $35 billion in annual revenues. According to a
2008 report appearing in Auto Rental News, car rental revenues in the United States are estimated to be
approximately $22 billion in 2008 and have grown at a 4.9% compound annual growth rate since 1991,
including 1.8% growth in 2008. We believe car rental revenues in Europe account for approximately
$14 billion in annual revenues, with the airport portion of the industry comprising approximately 40% of
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