Hertz 2010 Annual Report Download - page 85

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Interest and Other Income, Net
Interest and other income, net decreased $52.2 million primarily due to a gain of $48.5 million, net of
transaction costs, recorded in connection with the buyback of portions of certain of our Senior Notes and
Senior Subordinated Notes in 2009.
ADJUSTED PRE-TAX INCOME
Car Rental Segment
Adjusted pre-tax income for our car rental segment of $642.9 million increased 38.2% from
$465.3 million for the year ended December 31, 2009. The increase was primarily due to stronger
volumes, increased pricing and disciplined cost management. Adjustments to our car rental segment
income before income taxes on a GAAP basis for the years ended December 31, 2010 and 2009, totaled
$200.1 million and $275.2 million, respectively. See footnote c to the table under ‘‘Results of Operations’’
for a summary and description of these adjustments.
Equipment Rental Segment
Adjusted pre-tax income for our equipment rental segment of $78.0 million increased 2.1% from
$76.4 million for the year ended December 31, 2009. The increase was primarily due to strong cost
management performance and higher residual values on the disposal of used equipment, partly offset
by reductions in volume and pricing. Adjustments to our equipment rental segment loss before income
taxes on a GAAP basis for the years ended December 31, 2010 and 2009, totaled $92.6 million and
$97.1 million, respectively. See footnote c to the table under ‘‘Results of Operations’’ for a summary and
description of these adjustments.
(PROVISION) BENEFIT FOR TAXES ON INCOME, NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS AND NET LOSS ATTRIBUTABLE TO HERTZ GLOBAL
HOLDINGS, INC. AND SUBSIDIARIES’ COMMON STOCKHOLDERS
Years Ended
December 31,
2010 2009 $ Change % Change
(in millions of dollars)
Loss before income taxes ........................ $(13.6) $(171.0) $157.4 (92.1)%
(Provision) benefit for taxes on income ............... (17.0) 59.7 (76.7) (128.6)%
Net loss ..................................... (30.6) (111.3) 80.7 (72.5)%
Less: Net income attributable to noncontrolling interests . . (17.4) (14.7) (2.7) 18.4%
Net loss attributable to Hertz Global Holdings, Inc. and
Subsidiaries’ common stockholders ................ $(48.0) $(126.0) $ 78.0 (61.9)%
(Provision) Benefit for Taxes on Income
The effective tax rate for the year ended December 31, 2010 was (125.6)% as compared to 34.9% in the
year ended December 31, 2009. The negative effective tax rate in 2010 is primarily due to a lower loss
before income taxes in 2010, valuation allowances for losses in certain non-U.S. jurisdictions for which
tax benefits cannot be realized and differences in foreign tax rates versus the U.S. Federal tax rate. See
Note 8 to the Notes to our consolidated financial statements included in this Annual Report under the
caption ‘‘Item 8—Financial Statements and Supplementary Data.’’
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