SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT

12 Months Ended

Dec. 31, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule I Condensed Financial Information of Registrant

SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

THE HERTZ CORPORATION

PARENT COMPANY BALANCE SHEETS

(In millions, except for par value and share data)

	Years Ended December 31,
	2014			2013 (As Restated)
ASSETS
Cash and cash equivalents	$	2		$	62
Restricted cash and cash equivalents	84			56
Receivables, net of allowance	272			350
Due from Hertz affiliates	2,957			2,002
Inventories, at lower of cost or market	20			25
Prepaid expenses and other assets	3,900			3,179
Revenue earning equipment, net	306			227
Property and equipment, net	730			713
Investments in subsidiaries, net	6,897			6,914
Other intangible assets, net	179			214
Goodwill	104			104
Total assets	$	15,451		$	13,846
LIABILITIES AND STOCKHOLDERS' EQUITY
Due to Hertz affiliates	$	5,702		$	3,841
Accounts payable	65			170
Accrued liabilities	599			628
Accrued taxes	62			63
Debt	6,393			6,364
Public liability and property damage	135			100
Deferred taxes on income	—			—
Total Liabilities	12,956			11,166
Stockholder's equity:
Common Stock, $0.01 par value, 3,000 shares authorized, 100 shares issued and outstanding	—			—
Additional paid-in capital	3,566			3,552
Accumulated deficit	(956		)	(878		)
Accumulated other comprehensive loss	(115		)	6
Total stockholder's equity	2,495			2,680
Total liabilities and stockholder's equity	$	15,451		$	13,846

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

SCHEDULE I (Continued)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

THE HERTZ CORPORATION

PARENT COMPANY STATEMENTS OF OPERATIONS

(In millions)

	Years Ended December 31,
	2014			2013 (As Restated)			2012 (As Restated)
Revenues	$	4,703		$	4,552		$	4,255
Expenses:
Direct operating	2,989			2,576			2,430
Depreciation of revenue earning equipment and lease charges, net	2,510			2,723			2,382
Selling, general and administrative	528			510			482
Interest expense, net of interest income	344			337			254
Other (income) expense, net	(22		)	51			(14		)
Total expenses	6,349			6,197			5,534
Income (loss) before income taxes	(1,646		)	(1,645		)	(1,279		)
(Provision) benefit for taxes on income (loss)	612			619			498
Equity in earnings (loss) of subsidiaries, net of tax	956			1,376			998
Net income (loss)	$	(78	)	$	350		$	217

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

SCHEDULE I (Continued)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

THE HERTZ CORPORATION

PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions)

	Years Ended December 31,
	2014			2013 (As Restated)		2012 (As Restated)
Net income (loss)	$	(78	)	$	350	$	217
Other comprehensive income (loss)	(121		)	29		1
Comprehensive income (loss)	$	(199	)	$	379	$	218

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

SCHEDULE I (Continued)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

THE HERTZ CORPORATION

PARENT COMPANY STATEMENTS OF STOCKHOLDER'S EQUITY

(In millions, except share data)

	Common Stock			Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Equity
Balance at:	Shares	Amount
December 31, 2011, as previously reported	100	$	—	$	3,474	$	(833	)	$	(29	)	$	2,612
Cumulative restatement adjustments	—	—		—		(101		)	1			(100		)
Change in accounting principle	—			—		(4		)	4			—
December 31, 2011 (As Restated)	—	—		3,474		(938		)	(24		)	2,512
Net income (As Restated)	—	—		—		217			—			217
Dividends paid to Hertz Global Holdings, Inc.	—	—		—		(25		)	—			(25		)
Other comprehensive income	—	—		—		—			1			1
Proceeds from employee stock purchase plan	—	—		5		—			—			5
Stock-based employee compensation charges	—	—		30		—			—			30
Hertz Holdings common shares issued to Directors	—	—		1		—			—			1
December 31, 2012 (As Restated)	—	—		3,510		(746		)	(23		)	2,741
Net income (As Restated)	—	—		—		350			—			350
Dividends paid to Hertz Global Holdings, Inc.	—	—		—		(482		)	—			(482		)
Other comprehensive income	—	—		—		—			29			29
Proceeds from employee stock purchase plan	—	—		6		—			—			6
Stock-based employee compensation charges	—	—		35		—			—			35
Hertz Holdings common and shares issued to Directors	—	—		1		—			—			1
December 31, 2013 (As Restated)	—	—		3,552		(878		)	6			2,680
Net loss	—	—		—		(78		)	—			(78		)
Other comprehensive loss	—	—		—		—			(121		)	(121		)
Proceeds from employee stock purchase plan	—	—		4		—			—			4
Stock-based employee compensation charges, net of tax	—	—		9		—			—			9
Hertz Holdings common shares issued to Directors	—	—		1		—			—			1
December 31, 2014	—	$	—	$	3,566	$	(956	)	$	(115	)	$	2,495

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

SCHEDULE I (Continued)

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

THE HERTZ CORPORATION

PARENT COMPANY STATEMENTS OF CASH FLOWS

(In millions)

	Years Ended December 31,
	2014			2013 (As Restated)			2012 (As Restated)
Cash flows from operating activities:
Net income (loss)	$	(78	)	$	350		$	217
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities	(309		)	(186		)	(1,093		)
Net cash provided by (used in) operating activities	(387		)	164			(876		)
Cash flows from investing activities:
Net change in restricted cash and cash equivalents	(27		)	(24		)	12
Revenue earning equipment expenditures	(243		)	(138		)	(86		)
Proceeds from disposal of revenue earning equipment	183			126			76
Property and equipment expenditures	(195		)	(198		)	(174		)
Proceeds from disposal of property and equipment	43			50			70
Capital contributions to subsidiaries	(1,614		)	(938		)	(2,990		)
Return of capital from subsidiaries	1,722			1,134			3,106
Acquisitions, net of cash acquired	—			—			(1,708		)
Net cash provided by (used in) investing activities	(134		)	(68		)	(1,707		)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	—			250			2,210
Payment of long-term debt	(42		)	(34		)	(650		)
Short-term borrowings:
Payments	—			—			(27		)
Proceeds under the revolving lines of credit	2,507			2,280			2,820
Payments under the revolving lines of credit	(2,431		)	(2,322		)	(2,599		)
Payment of dividends and return of capital	—			(482		)	(25		)
Loan to parent from Non-Guarantor	437			253			385
Loan with Hertz affiliate				—			—
Purchase of noncontrolling interest	—			—			(38		)
Payment of financing costs	(12		)	(9		)	(35		)
Other	2			5			3
Net cash provided by (used in) financing activities	461			(59		)	2,044
Net change in cash and cash equivalents during the period	(60		)	37			(539		)
Cash and cash equivalents at beginning of period	62			25			564
Cash and cash equivalents at end of period	$	2		$	62		$	25

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

Background and Basis of Presentation

The Hertz Corporation (the "Company" or "Hertz") was incorporated in Delaware in 1967. In 2005, Hertz Investors, Inc. acquired all of the common stock of the Company. Hertz Investors, Inc. is wholly owned by Hertz Global Holdings, Inc. ("Hertz Holdings") which serves as the Company's top-level holding company.

These condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X, as the restricted net assets of Hertz and its subsidiaries exceed 25% of the consolidated net assets of the Company. This information should be read in conjunction with the consolidated financial statements of Hertz included in this Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."

Restatement

As discussed in Note 2, "Restatement," to the Notes to the consolidated financial statements of the Company included in this Annual Report under the caption Item 8, "Financial Statements and Supplementary Data" ("Note 2"), this Note 2 to the consolidated financial statements discloses the nature of the restatement matters and adjustments and shows the impact of the restatement matters on revenues, expenses, income, assets, liabilities, equity, and cash flows from operating activities, investing activities, and financing activities, and the cumulative effects of these adjustments on the consolidated statement of operations, balance sheet, and cash flows for 2012 and 2013. In addition, this Note shows the effects of the adjustment to opening retained earnings as of January 1, 2012, which adjustment reflects the impact of the restatement on periods prior to 2012.The cumulative impact of the out of period misstatements for all previously reported periods through December 31, 2013, including amounts associated with the revision previously reported in the 2013 Form 10-K, was approximately a $349 million reduction in pre-tax income and $231 million reduction in net income. The cumulative annual impact on 2012 and 2013 was a reduction in pre-tax income and net income of $90 million and $62 million for 2012 and $72 million and $51 million for 2013. Excluding the revision included in the 2013 Form 10-K of $26 million on a pre-tax basis and $17 million on an after-tax basis, approximately $160 million on a pre-tax basis and $100 million on an after-tax basis is included as a reduction to opening retained earnings as of January 1, 2012.

In 2014, the Company changed its method of calculating the market-related value of pension assets for purposes of determining the expected return on plan assets and accounting for asset gains and losses. The change in accounting principle was applied retroactively to December 2005. The change in accounting principle increased pre-tax income and net income by $5 million and $3 million in 2012 and by $12 million and $7 million in 2013, respectively.

The restatement adjustments and change in accounting principle were recorded at the parent and the various subsidiaries. The impact of the above to these parent only financial statements was as follows:

• A reduction in the balance of investments in subsidiaries and in equity in 2013 of $61 million and $204 million, respectively;

• A reduction in net income of $55 million and $44 million in 2012 and 2013, respectively; and

• An increase of $1 million and a reduction of $14 million in total cash flows in 2012 and 2013, respectively.

See Note 19, "Guarantor and Non-Guarantor Annual Condensed Consolidating Financial Information" for additional information regarding the impacts of the adjustments on the parent only financial statements.

Contingencies and Debt Obligations

For details regarding the debt obligations of Hertz, refer to the corporate debt disclosures in Note 6, "Debt," to the Notes to the consolidated financial statements of the Company included in this Annual Report under the caption Item 8, "Financial Statements and Supplementary Data." Of the amounts of corporate debt disclosed in Note 6, $74 million and $77 million as of December 31, 2014 and 2013, respectively, are subsidiary obligations.

For details regarding material contingencies refer to Note 14, "Contingencies and Off-Balance Sheet Commitments," and Note 11, "Lease and Concession Agreements" to the Notes to the consolidated financial statements included in this Annual Report under the caption Item 8, "Financial Statements and Supplementary Data."

Distribution of Equity

The following table details distributions of equity received by the Company from its subsidiaries during the three years ended December 31, 2014, 2013 and 2012 (in millions of dollars):

	2014		2013		2012
Distribution of Equity	$	2,759	$	2,233	$	3,982