Guarantor and Non-Guarantor Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2012

Guarantor and Non-Guarantor Condensed Consolidating Financial Statements Disclosure

Schedule of condensed consolidating balance sheets

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2012

(In Thousands of Dollars)

	Parent (The Hertz Corporation)		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			The Hertz Corporation & Subsidiaries
ASSETS
Cash and cash equivalents	$	34,093	$	8,161	$	411,040	$	—		$	453,294
Restricted cash and
cash equivalents	44,016		11,634		321,123					376,773
Receivables, less allowance
for doubtful accounts	403,599		300,725		1,027,471					1,731,795
Due from Hertz affiliate	1,279,380		101,210		1,316,228		(2,684,953		)	11,865
Inventories, at lower cost or market	30,143		34,367		41,472					105,982
Prepaid expenses and other assets	2,372,807		28,717		114,087		(2,135,355		)	380,256
Revenue earning equipment, net	103,636		1,727,717		10,389,856					12,221,209
Property and equipment, net	846,346		194,153		239,222					1,279,721
Investment in subsidiaries, net	4,494,564		493,430		—		(4,987,994		)	—
Other intangible assets, net	79,626		2,383,844		68,052					2,531,522
Goodwill	100,221		138,790		215,652					454,663
Total assets	$	9,788,431	$	5,422,748	$	14,144,203	$	(9,808,302	)	$	19,547,080
LIABILITIES AND EQUITY
Due to Hertz affiliate	$	1,405,733	$	656,427	$	622,794	$	(2,684,954	)	$	—
Accounts payable	154,390		209,685		611,023					975,098
Accrued liabilities	649,782		77,313		285,093					1,012,188
Accrued taxes	65,711		160,686		419,515		(403,694		)	242,218
Debt	4,448,746		27,551		7,816,935					12,293,232
Public liability and property damage	102,739		13,267		163,749					279,755
Deferred taxes on income	—		1,465,091		2,049,809		(1,731,660		)	1,783,240
Total liabilities	6,827,101		2,610,020		11,968,918		(4,820,308		)	16,585,731
Equity:
The Hertz Corporation and
Subsidiaries stockholder's equity	2,961,330		2,812,728		2,175,266		(4,987,994		)	2,961,330
Noncontrolling interest	—		—		19		—			19
Total equity	2,961,330		2,812,728		2,175,285		(4,987,994		)	2,961,349
Total liabilities and equity	$	9,788,431	$	5,422,748	$	14,144,203	$	(9,808,302	)	$	19,547,080

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2011

(In Thousands of Dollars)

	Parent (The Hertz Corporation)		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
ASSETS
Cash and cash equivalents	$	565,002	$	7,410	$	358,796		$	—		$	931,208
Restricted cash and cash equivalents	44,663		28,130		235,246			—			308,039
Receivables, less allowance
for doubtful accounts	297,292		226,143		1,092,947			—			1,616,382
Due from Hertz affiliate	655,411		78,660		1,181,387			(1,915,458		)	—
Inventories, at lower cost or market	22,440		27,505		34,033			—			83,978
Prepaid expenses and other assets	2,088,579		33,432		136,731			(1,842,608		)	416,134
Revenue earning equipment, net	167,304		1,505,867		8,432,238			—			10,105,409
Property and equipment, net	824,381		178,399		249,074			—			1,251,854
Investment in subsidiaries, net	4,413,289		460,201		—			(4,873,490		)	—
Other intangible assets, net	94,682		2,387,017		80,535			—			2,562,234
Goodwill	100,221		74,738		217,135			—			392,094
Total assets	$	9,273,264	$	5,007,502	$	12,018,122		$	(8,631,556	)	$	17,667,332
LIABILITIES AND EQUITY
Due to Hertz affiliate	$	1,251,347	$	268,026	$	396,497		$	(1,915,458	)	$	412
Accounts payable	188,695		164,989		543,805			—			897,489
Accrued liabilities	607,673		212,361		306,304			—			1,126,338
Accrued taxes	54,559		146,682		(26,385		)	(11,872		)	162,984
Debt	4,434,274		4,237		6,469,338			—			10,907,849
Public liability and property damage	107,881		16,618		157,035			—			281,534
Deferred taxes on income	—		1,445,856		2,046,752			(1,830,736		)	1,661,872
Total liabilities	6,644,429		2,258,769		9,893,346			(3,758,066		)	15,038,478
Equity:
The Hertz Corporation and
Subsidiaries stockholder's equity	2,628,835		2,748,733		2,124,757			(4,873,490		)	2,628,835
Noncontrolling interest	—		—		19			—			19
Total equity	2,628,835		2,748,733		2,124,776			(4,873,490		)	2,628,854
Total liabilities and equity	$	9,273,264	$	5,007,502	$	12,018,122		$	(8,631,556	)	$	17,667,332

Schedule of condensed consolidating statement of operations

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended September 30, 2012

(In Thousands of Dollars)

	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Total revenues	$	1,189,646		$	329,602		$	1,710,695		$	(713,721	)	$	2,516,222
Expenses:
Direct operating	614,291			171,900			454,891						1,241,082
Depreciation of revenue earning
equipment and lease charges	690,370			64,666			519,214			(713,721		)	560,529
Selling, general and administrative	95,685			26,614			78,694			—			200,993
Interest expense	52,511			12,254			77,008			—			141,773
Interest income	(1		)	(228		)	(487		)	—			(716		)
Other (income) expense, net	—			(5		)	(9,509		)	—			(9,514		)
Total expenses	1,452,856			275,201			1,119,811			(713,721		)	2,134,147
Income (loss) before income taxes
and equity in earnings (losses) of subsidiaries	(263,210		)	54,401			590,884			—			382,075
(Provision) benefit for taxes
on income	93,652			(20,319		)	(204,105		)	—			(130,772		)
Equity in earnings (losses) of
subsidiaries (net of tax)	420,861			55,785			—			(476,646		)	—
Net income (loss)	$	251,303		$	89,867		$	386,779		$	(476,646	)	$	251,303

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2012

(In Thousands of Dollars)

	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Total revenues	$	3,232,554		$	885,134		$	4,432,368		$	(1,847,762	)	$	6,702,294
Expenses:
Direct operating	1,795,547			515,541			1,234,074			—			3,545,162
Depreciation of revenue earning
equipment and lease charges	1,789,646			180,826			1,471,686			(1,847,762		)	1,594,396
Selling, general and administrative	294,244			85,135			235,900			—			615,279
Interest expense	172,090			35,431			223,028			—			430,549
Interest income	(117		)	(614		)	(1,545		)	—			(2,276		)
Other (income) expense, net	—			(14		)	(10,512		)	—			(10,526		)
Total expenses	4,051,410			816,305			3,152,631			(1,847,762		)	6,172,584
Income (loss) before income taxes
and equity in earnings (losses) of subsidiaries	(818,856		)	68,829			1,279,737			—			529,710
(Provision) benefit for taxes
on income	295,601			(25,718		)	(495,565		)	—			(225,682		)
Equity in earnings (losses) of
subsidiaries (net of tax)	827,283			33,229			—			(860,512		)	—
Net income (loss)	$	304,028		$	76,340		$	784,172		$	(860,512	)	$	304,028

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended September 30, 2011

(In Thousands of Dollars)

	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Total revenues	$	1,169,613		$	271,193		$	1,616,573		$	(625,113	)	$	2,432,266
Expenses:
Direct operating	615,251			146,966			485,400			—			1,247,617
Depreciation of revenue earning
equipment and lease charges	535,840			54,139			558,417			(625,113		)	523,283
Selling, general and administrative	90,172			25,598			81,773			—			197,543
Interest expense	61,401			9,081			86,313			—			156,795
Interest income	(24		)	(37		)	(1,188		)	—			(1,249		)
Other (income) expense, net	—			(5		)	34			—			29
Total expenses	1,302,640			235,742			1,210,749			(625,113		)	2,124,018
Income (loss) before income taxes
noncontrolling interest and equity in earnings (losses) of subsidiaries	(133,027		)	35,451			405,824			—			308,248
(Provision) benefit for taxes
on income (loss)	48,077			(11,319		)	(126,673		)	—			(89,915		)
Equity in earnings (losses)
of subsidiaries (net of tax)	297,512			1,556			—			(299,068		)	—
Net income (loss)	212,562			25,688			279,151			(299,068		)	218,333
Less: Net income attributable
to noncontrolling interest	—			—			(5,771		)	—			(5,771		)
Net income (loss) attributable to
The Hertz Corporation and Subsidiaries' common stockholder	$	212,562		$	25,688		$	273,380		$	(299,068	)	$	212,562

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2011

(In Thousands of Dollars)

	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Total revenues	$	3,122,111		$	727,420		$	4,242,151		$	(1,807,120	)	$	6,284,562
Expenses:
Direct operating	1,748,070			459,842			1,300,676			—			3,508,588
Depreciation of revenue earning
equipment and lease charges	1,512,691			167,491			1,505,979			(1,807,120		)	1,379,041
Selling, general and administrative	269,934			68,538			236,759			—			575,231
Interest expense	236,443			24,594			234,108			—			495,145
Interest income	(434		)	(45		)	(4,172		)				(4,651		)
Other (income) expense, net	62,396			(13		)	323			—			62,706
Total expenses	3,829,100			720,407			3,273,673			(1,807,120		)	6,016,060
Income (loss) before income taxes,
noncontrolling interest and equity in earnings (losses) of subsidiaries	(706,989		)	7,013			968,478			—			268,502
(Provision) benefit for taxes
on income (loss)	230,769			(2,301		)	(330,748		)	—			(102,280		)
Equity in earnings (losses)
of subsidiaries (net of tax)	627,911			(1,748		)	—			(626,163		)	—
Net income (loss)	151,691			2,964			637,730			(626,163		)	166,222
Less: Net income attributable
to noncontrolling interest	—			—			(14,531		)	—			(14,531		)
Net income (loss) attributable to
The Hertz Corporation and Subsidiaries' common stockholder	$	151,691		$	2,964		$	623,199		$	(626,163	)	$	151,691

Schedule of condensed consolidating comprehensive income (loss)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended September 30, 2012

(In Thousands of Dollars)

	Parent (The Hertz Corporation)		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			The Hertz Corporation & Subsidiaries
Net income (loss)	$	251,303	$	89,867	$	386,779	$	(476,646	)	$	251,303
Other comprehensive income (net of tax)	23,229		—		19,762		(19,762		)	23,229
Comprehensive income (loss)	$	274,532	$	89,867	$	406,541	$	(496,408	)	$	274,532

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Nine Months Ended September 30, 2012

(In Thousands of Dollars)

	Parent (The Hertz Corporation)		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			The Hertz Corporation & Subsidiaries
Net income (loss)	$	304,028	$	76,340	$	784,172	$	(860,512	)	$	304,028
Other comprehensive income (net of tax)	13,586		—		3,358		(3,358		)	13,586
Comprehensive income (loss)	$	317,614	$	76,340	$	787,530	$	(863,870	)	$	317,614

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Three Months Ended September 30, 2011

(In Thousands of Dollars)

	Parent (The Hertz Corporation)			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Net income (loss)	$	212,562		$	25,688	$	279,151		$	(299,068	)	$	218,333
Other comprehensive income, net of tax	(74,744		)	—		(80,497		)	80,497			(74,744		)
Comprehensive income (loss)	137,818			25,688		198,654			(218,571		)	143,589
Less: Comprehensive income attributable
to noncontrolling interest	—			—		(5,771		)	—			(5,771		)
Comprehensive income (loss) attributable
to The Hertz Corporation and Subsidiaries' common stockholder	$	137,818		$	25,688	$	192,883		$	(218,571	)	$	137,818

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

For the Nine Months Ended September 30, 2011

(In Thousands of Dollars)

	Parent (The Hertz Corporation)			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Net income (loss)	$	151,691		$	2,964	$	637,730		$	(626,163	)	$	166,222
Other comprehensive income, net of tax	(12,674		)	—		(4,707		)	4,707			(12,674		)
Comprehensive income (loss)	139,017			2,964		633,023			(621,456		)	153,548
Less: Comprehensive income attributable
to noncontrolling interest	—			—		(14,531		)	—			(14,531		)
Comprehensive income (loss) attributable
to The Hertz Corporation and Subsidiaries' common stockholder	$	139,017		$	2,964	$	618,492		$	(621,456	)	$	139,017

Schedule of condensed consolidating statement of cash flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2012

(In Thousands of Dollars)

	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Net cash provided by (used in) operating activities	$	(321,255	)	$	588,556		$	2,467,989		$	(592,864	)	$	2,142,426
Cash flows from investing activities:
Net change in restricted cash and cash equivalents	646			16,496			(86,443		)	—			(69,301		)
Revenue earning equipment expenditures	(66,293		)	(574,426		)	(7,040,299		)	—			(7,681,018		)
Proceeds from disposal of revenue earning
equipment	54,484			193,259			4,567,631			—			4,815,374
Property and equipment expenditures	(116,600		)	(30,029		)	(82,811		)	—			(229,440		)
Proceeds from disposal of property and equipment	53,204			6,095			35,345			—			94,644
Capital contributions to subsidiaries	(2,658,823		)	—			—			2,658,823			—
Return of capital from subsidiaries	2,627,954			—			—			(2,627,954		)	—
Loan to Parent From Non-Guarantor	—			—			49,858			(49,858		)	—
Acquisitions, net of cash acquired	—			(196,220		)	—			—			(196,220		)
Proceeds from disposal of business	—			—			11,691			—			11,691
Other investing activities	—			—			(1,400		)	—			(1,400		)
Net cash used in investing activities	(105,428		)	(584,825		)	(2,546,428		)	(18,989		)	(3,255,670		)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	260,000			—			22,382			—			282,382
Payment of long-term debt	(646,682		)	(13		)	(9,416		)	—			(656,111		)
Short-term borrowings:
Proceeds	—			—			367,988			—			367,988
Payments	(26,775		)	—			(935,915		)	—			(962,690		)
Proceeds (payments) under the revolving lines
of credit, net	425,000			(242		)	1,251,229			—			1,675,987
Capital contributions received from parent	—			—			2,658,823			(2,658,823		)	—
Loan to Parent From Non-Guarantor	(49,858		)	—			—			49,858			—
Payment of dividends and return of capital	—			—			(3,220,818		)	3,220,818			—
Dividends paid to Parent	(12,500		)	—			—			—			(12,500		)
Proceeds from employee stock purchase plan	3,186			—			—			—			3,186
Loan with Hertz Global Holdings, Inc.	(12,277		)	—			—			—			(12,277		)
Purchase of noncontrolling interest	(38,000		)	—			—			—			(38,000		)
Payment of financing costs	(6,320		)	(2,725		)	(4,634		)	—			(13,679		)
Net cash provided by (used in) financing activities	(104,226		)	(2,980		)	129,639			611,853			634,286
Effect of foreign exchange rate changes on cash
and cash equivalents	—			—			1,044			—			1,044
Net change in cash and cash equivalents during
the period	(530,909		)	751			52,244			—			(477,914		)
Cash and cash equivalents at beginning of period	565,002			7,410			358,796			—			931,208
Cash and cash equivalents at end of period	$	34,093		$	8,161		$	411,040		$	—		$	453,294

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2011

(In Thousands of Dollars)

	Parent (The Hertz Corporation)			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			The Hertz Corporation & Subsidiaries
Net cash provided by (used in) operating activities	$	787,422		$	645,186		$	643,231		$	(414,582	)	$	1,661,257
Cash flows from investing activities:
Net change in restricted cash and cash equivalents	(36,916		)	20,843			(107,438		)	—			(123,511		)
Revenue earning equipment expenditures	(72,286		)	(489,314		)	(7,303,009		)	—			(7,864,609		)
Proceeds from disposal of revenue earning
equipment	51,079			89,517			4,791,814			—			4,932,410
Property and equipment expenditures	(139,952		)	(17,447		)	(44,877		)	—			(202,276		)
Proceeds from disposal of property and equipment	27,139			4,256			16,738			—			48,133
Capital contributions to subsidiaries	(2,425,886		)	—			—			2,425,886			—
Return of capital from subsidiaries	1,370,418			—			—			(1,370,418		)	—
Acquisitions, net of cash acquired	(212,011		)	(501		)	(10,476		)	—			(222,988		)
Purchase of short-term investments, net	(32,891		)	—			—			—			(32,891		)
Other investing activities	—			(13,602		)	14,362			—			760
Net cash provided by (used in) investing activities	(1,471,306		)	(406,248		)	(2,642,886		)	1,055,468			(3,464,972		)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	2,454,744			—			603,651			—			3,058,395
Payment of long-term debt	(3,591,349		)	(13		)	(49,919		)	—			(3,641,281		)
Short-term borrowings:
Proceeds	—			—			371,994			—			371,994
Payments	(15,095		)	—			(799,799		)	—			(814,894		)
Proceeds (payments) under the revolving lines
of credit, net	185,872			(229,604		)	978,096			—			934,364
Distributions to noncontrolling interest	—			—			(10,500		)	—			(10,500		)
Capital contributions received from parent	—			—			2,425,886			(2,425,886		)	—
Payment of dividends and return of capital	(12,450		)	—			(1,785,000		)	1,785,000			(12,450		)
Proceeds from employee stock purchase plan	2,690			—			—			—			2,690
Loan from Hertz Global Holdings, Inc.	317			—			—			—			317
Payment of financing costs	(78,309		)	(2,284		)	(7,047		)	—			(87,640		)
Net cash provided by (used in) financing activities	(1,053,580		)	(231,901		)	1,727,362			(640,886		)	(199,005		)
Effect of foreign exchange rate changes on cash
and cash equivalents	—			—			(13,987		)	—			(13,987		)
Net decrease in cash and cash equivalents during
the period	(1,737,464		)	7,037			(258,306		)	—			(1,988,733		)
Cash and cash equivalents at beginning of period	1,754,378			5,180			614,448			—			2,374,006
Cash and cash equivalents at end of period	$	16,914		$	12,217		$	356,142		$	—		$	385,273