SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2012

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule I Condensed Financial Information of Registrant

SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

HERTZ GLOBAL HOLDINGS, INC.

PARENT COMPANY BALANCE SHEETS

(In Thousands of Dollars)

	December 31,
	2012			2011
ASSETS
Cash and cash equivalents	$	20		$	571
Accounts receivable from Hertz affiliate	—			412
Taxes receivable	48,704			37,181
Prepaid expenses and other assets	5,367			79
Investments in subsidiaries	2,917,509			2,628,834
Deferred charges	3,250			5,544
Total assets	$	2,974,850		$	2,672,621
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued liabilities	$	2,077		$	2,118
Accounts payable with Hertz affiliate	12,810			—
Debt	434,149			409,241
Deferred taxes on income	18,528			26,606
Total liabilities	467,564			437,965
Stockholders' equity:
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 421,485,862 and 417,022,853 shares issued and outstanding	4,215			4,170
Additional paid-in capital	3,233,948			3,205,964
Accumulated deficit	(703,985		)	(947,064		)
Accumulated other comprehensive loss	(26,892		)	(28,414		)
Total stockholders' equity	2,507,286			2,234,656
Total liabilities and stockholders' equity	$	2,974,850		$	2,672,621

The accompanying notes are an integral part of these financial statements.

SCHEDULE I (Continued)

HERTZ GLOBAL HOLDINGS, INC.

PARENT COMPANY STATEMENTS OF OPERATIONS

(In Thousands of Dollars)

	Years ended December 31,
	2012			2011			2010
Revenues	$	—		$	—		$	—
Expenses:
Selling, general and administrative	204			161			70
Interest expense, net of interest income	52,103			49,464			46,888
Total expenses	52,307			49,625			46,958
Loss before income taxes	(52,307		)	(49,625		)	(46,958		)
Benefit for taxes on income	19,607			15,306			16,660
Equity in earnings (losses) of subsidiaries, net of tax	275,779			210,489			(18,383		)
Net income (loss)	$	243,079		$	176,170		$	(48,681	)

The accompanying notes are an integral part of these financial statements.

SCHEDULE I (Continued)

HERTZ GLOBAL HOLDINGS, INC.

PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In Thousands of Dollars)

	Years Ended December 31,
	2012		2011			2010
Net income (loss)	$	243,079	$	176,170		$	(48,681	)
Other comprehensive income (loss)	1,522		(66,237		)	41,154
Comprehensive income (loss)	$	244,601	$	109,933		$	(7,527	)

The accompanying notes are an integral part of these financial statements.

SCHEDULE I (Continued)

HERTZ GLOBAL HOLDINGS, INC.

PARENT COMPANY STATEMENTS OF STOCKHOLDERS' EQUITY

(In Thousands of Dollars, except share data)

	Preferred Stock		Common Stock			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balance at:			Shares	Amount
December 31, 2009	$	—	410,245,225	$	4,102	$	3,141,695		$	(1,074,553	)	$	(3,331	)	$	2,067,913
Net loss attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders									(48,681		)				(48,681		)
Other comprehensive income												41,154			41,154
Employee stock purchase plan			344,542	4		3,770									3,774
Net settlement on vesting of restricted stock			1,421,705	14		(7,850		)							(7,836		)
Stock-based employee compensation charges, net of tax of $0						36,560									36,560
Exercise of stock options, net of tax of $(258)			1,343,659	14		7,621									7,635
Common shares issued to Directors			107,758	1		1,187									1,188
Phantom shares issued to Directors						238									238
Proceeds from disgorgement of stockholder short-swing profits, net of tax of $3						4									4
December 31, 2010	—		413,462,889	4,135		3,183,225			(1,123,234		)	37,823			2,101,949
Net income attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders									176,170						176,170
Other comprehensive loss												(66,237		)	(66,237		)
Acquisition of remaining portion of non-controlling interest, net of tax of $9,798						(15,287		)							(15,287		)
Employee stock purchase plan, net of tax of $0			323,752	3		4,205									4,208
Net settlement on vesting of restricted stock			1,238,091	11		(11,476		)							(11,465		)
Stock-based employee compensation charges, net of tax of $0						31,093									31,093
Exercise of stock options, net of tax of $474			1,975,730	21		12,563									12,584
Common shares issued to Directors			22,391			1,377									1,377
Phantom shares issued to Directors						216									216
Proceeds from disgorgement of stockholder short-swing profits, net of tax of $29						48									48
December 31, 2011	$	—	417,022,853	4,170		3,205,964			(947,064		)	(28,414		)	2,234,656
Net income attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders									243,079						243,079
Other comprehensive income												1,522			1,522
Employee stock purchase plan			583,636	6		5,024									5,030
Net settlement on vesting of restricted stock			2,016,299	20		(20,115		)							(20,095		)
Stock-based employee compensation charges, net of tax of $399						30,375									30,375
Exercise of stock options, net of tax of $888			1,738,609	18		11,202									11,220
Common shares issued to Directors			124,465	1		1,487									1,488
Proceeds from disgorgement of stockholder short-swing profits, net of tax of $6						11									11
December 31, 2012	$	—	421,485,862	$	4,215	$	3,233,948		$	(703,985	)	$	(26,892	)	$	2,507,286

The accompanying notes are an integral part of these financial statements.

SCHEDULE I (Continued)

HERTZ GLOBAL HOLDINGS, INC.

PARENT COMPANY STATEMENTS OF CASH FLOWS

(In Thousands of Dollars)

	Years ended December 31,
	2012			2011			2010
Cash flows from operating activities:
Net income (loss)	$	243,079		$	176,170		$	(48,681	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization and write-off of deferred financing costs	2,295			2,297			2,294
Amortization of debt discount	24,912			22,172			19,733
Deferred taxes on income	(8,078		)	(5,583		)	(6,652		)
Changes in assets and liabilities:
Taxes receivable	(11,529		)	(9,723		)	(10,007		)
Prepaid expenses and other assets	(5,288		)	(64		)	(16		)
Accounts payable	—			—			(4,315		)
Accrued liabilities	(41		)	39			12
Equity in losses of subsidiaries, net of tax	(275,779		)	(210,489		)	18,383
Net cash flows used in operating activities	(30,429		)	(25,181		)	(29,249		)
Cash flows from investing activities:
Investment in and advances to consolidated subsidiaries	520			—			—
Return of capital from subsidiary	25,000			22,950			23,000
Net cash provided by investing activities	25,520			22,950			23,000
Cash flows from financing activities:
Payment of long-term debt	(4		)	(16		)	—
Proceeds from exercise of stock options	11,220			13,058			7,894
Accounts receivable from Hertz affiliate	13,220			984			6,173
Proceeds from disgorgement of stockholders short swing profits	17			77			7
Net settlement on vesting of restricted stock	(20,095		)	(11,465		)	(7,836		)
Net cash provided by financing activities	4,358			2,638			6,238
Net change in cash and cash equivalents during the period	(551		)	407			(11		)
Cash and cash equivalents at beginning of period	571			164			175
Cash and cash equivalents at end of period	$	20		$	571		$	164
Supplemental disclosures of cash flow information:
Cash paid (received) during the period for:
Interest (net of amounts capitalized)	$	24,897		$	24,897		$	24,861
Income taxes	—			—			—

The accompanying notes are an integral part of these financial statements.

Background and Basis of Presentation

Hertz Global Holdings, Inc., or “Hertz Holdings,” is the top-level holding company that conducts substantially all of its business operations through its indirect subsidiaries. Hertz Holdings was incorporated in Delaware on August 31, 2005 in anticipation of the December 21, 2005 acquisition by its subsidiary, Hertz Investors, Inc., of the Hertz Corporation.

There are significant restrictions over the ability of Hertz Holdings to obtain funds from its indirect subsidiaries through dividends, loans or advances. Accordingly, these condensed financial statements have been presented on a “parent-only” basis. Under a parent-only presentation, the investments of Hertz Holdings in its consolidated subsidiaries are presented under the equity method of accounting. These parent-only financial statements should be read in conjunction with the consolidated financial statements of Hertz Holdings included in this Annual Report under the caption “Item 8—Financial Statements and Supplementary Data.” For a discussion of background and basis of presentation, see Note 1 and Note 2 to the Notes to the consolidated financial statements included in this Annual Report under the caption “Item 8—Financial Statements and Supplementary Data.”

Return of Capital from subsidiary

We had presented in error the return of capital distributions from our subsidiary in the Statement of operations as “Other income” for 2011 and 2010 resulting in an understatement of Loss before income taxes of $23.0 million and $23.0 million, respectively and an overstatement of Net income of $23.0 million and an understatement of Net loss of $23.0 million, respectively. Comprehensive income (loss) were impacted by the same amount in for 2011 and 2010. In addition, the same amounts were deducted from Accumulated deficit in the Statement of stockholders' equity.

The Statement of operations, comprehensive income and stockholders' equity have been revised by reducing previously reported Net income for 2011 and increasing Net loss for 2010 by $23.0 million and $23.0 million, respectively. There was no impact to the amounts reported as Accumulated deficit at December 31, 2011 and 2010.

We had presented the cash flows from the return of capital from our subsidiary in the Statement of cash flows for 2011 and 2010 as a component of cash flows from operating activities as it was included in Net income. The classification of these amounts have been corrected so that they are presented as cash flows from investing activities. For the year ended December 31, 2011, the impact of this revision was to reduce Cash flows from operating activities by $23.0 million and increase Cash flows from investing activities by $23.0 million. For the year ended December 31, 2010, the impact of this revision was to reduce Cash flows from operating activities by $23.0 million and increase Cash flows from investing activities by $23.0 million.

Debt

Convertible Senior Notes

In May and June 2009, we issued $474.8 million in aggregate principal amount of 5.25% Convertible Senior ;Notes due June 2014. Our Convertible Senior Notes may be convertible by holders into shares of our common stock, cash or a combination of cash and shares of our common stock, as elected by us, initially at a conversion rate of 120.6637 shares per $1,000 principal amount of notes, subject to adjustment.

We have a policy of settling the conversion of our Convertible Senior Notes using a combination settlement, which calls for settling the fixed dollar amount per $1,000 in principal amount in cash and settling in shares the excess conversion value, if any. Proceeds from the offering of the Convertible Senior Notes were allocated between “Debt” and “Additional paid-in capital.” The value assigned to the debt component was the estimated fair value, as of the issuance date, of a similar debt instrument without the conversion feature, and the difference between the proceeds for the Convertible Senior Notes and the amount reflected as a debt liability was recorded as “Additional paid-in capital.” As a result, at issuance the debt was recorded at a discount of $117.9 million reflecting that its coupon was below the market yield for a similar security without the conversion feature at issuance. The debt is subsequently accreted to its par value over its expected life, with the market rate of interest at issuance being reflected in the statements of operations. The effective interest rate on the Convertible Senior Notes on the issuance date was 12%.

On January 1, 2013, our Convertible Senior Notes became convertible again and will continue to be convertible until March 31, 2013, and may be convertible thereafter, if one or more of the conversion conditions specified in the indenture is satisfied during future measurement periods. This conversion right was triggered because our closing common stock price per share exceeded $10.77 for at least 20 trading days during the 30 consecutive trading day period ending on December 31, 2012.

On June 1 and December 1, 2012 and 2011, Hertz Holdings made semi-annual interest payments of approximately $12.5 million on the Convertible Senior Notes, respectively. Hertz Holdings made this payment with a combination of cash on hand and proceeds from the repayment of an inter‑company loan from Hertz, and dividends received Hertz Holdings subsidiaries.

In the future, if our cash on hand and proceeds from the repayment of inter‑company loans from Hertz is not sufficient to pay the semi-annual interest payment, we would need to receive a dividend, loan or advance from our subsidiaries. However, none of our subsidiaries are obligated to make funds available to us and certain of Hertz's credit facilities have requirements that must be met prior to it making dividends, loans or advances to us. In addition, Delaware law imposes requirements that may restrict Hertz's ability to make funds available to Hertz Holdings.

For a discussion of the debt obligations of the indirect subsidiaries of Hertz Holdings, see Note 5 to the Notes to the consolidated financial statements included in this Annual Report under the caption “Item 8—Financial Statements and Supplementary Data.”

Commitments and Contingencies

Hertz Holdings has no direct commitments and contingencies, but its indirect subsidiaries do. For a discussion of the commitments and contingencies of the indirect subsidiaries of Hertz Holdings, see Notes 10 and 12 to the Notes to the consolidated financial statements included in this Annual Report under the caption “Item 8—Financial Statements and Supplementary Data.”

Dividends

During 2012 and 2011, Hertz Holdings received approximately $25 million and $23 million, respectively, of cash dividends from its subsidiaries, primarily for interest payments on the Convertible Senior Notes.