ASSETS Cash and cash equivalents Restricted cash and cash equivalents Receivables, less allowance for doubtful accounts of $21,899 and $20,282 Inventories, at lower of cost or market Prepaid expenses and other assets Revenue earning equipment, at cost: Cars Less accumulated depreciation Other equipment Less accumulated depreciation Total revenue earning equipment Property and equipment, at cost: Land, buildings and leasehold improvements Service equipment and other Less accumulated depreciation Total property and equipment Other intangible assets, net Goodwill Total assets LIABILITIES AND EQUITY Accounts payable Accrued liabilities Accrued taxes Debt Public liability and property damage Deferred taxes on income Total liabilities Commitments and contingencies Equity: Hertz Global Holdings, Inc. and Subsidiaries stockholders' equity Preferred Stock, $0.01 par value, 200,000,000 shares authorized, no shares issued and outstanding Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 420,302,667 and 417,022,853 shares issued and outstanding Additional paid-in capital Accumulated deficit Accumulated other comprehensive loss Total Hertz Global Holdings, Inc. and Subsidiaries stockholders' equity Noncontrolling interest Total equity Total liabilities and equity Revenues: Car rental Equipment rental Other Total revenues Expenses: Direct operating Depreciation of revenue earning equipment and lease charges Selling, general and administrative Interest expense Interest income Other (income) expense, net Total expenses Income (loss) before income taxes Provision for taxes on income Net income (loss) Less: Net income attributable to noncontrolling interest Net income (loss) attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders Weighted average shares outstanding (in thousands): Basic Diluted Earnings (loss) per share attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders: Basic DilutedSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-QýxQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2012March 31, 2013
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934ýx No oýx No oLarge accelerated filer ýx Accelerated filer o Non-accelerated filer o Smaller reporting company o Accelerated filer o Non-accelerated filer o
(Do not check if a smaller
reporting company) Smaller reporting company oýxThere were 420,318,854May 1, 2013, 400,286,548 shares of the registrant's common stock, par value $0.01 per share, issued and outstanding aswere outstanding.PagePART I. FINANCIAL INFORMATION Page 112012 5-67-3132-656666
6767Exhibits67SIGNATURE6869June 30, 2012,March 31, 2013, and the related consolidated statements of operations, andof comprehensive income (loss) for the three-monthloss and six-month periods ended June 30, 2012 and June 30, 2011 and the consolidated statements of cash flows for the six-monththree-month periods ended June 30,March 31, 2013 and 2012 and June 30, 2011.the consolidated statement of changes in equity for the three-month period ended March 31, 2013. These interim financial statements are the responsibility of the Company's management.2011,2012, and the related consolidated statements of operations, of comprehensive income (loss), of changes in equity and of cash flows for the year then ended (not presented herein), and in our report dated February 27, 2012,March 4, 2013, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2011,2012, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.August20122013Dollars)Unaudited June 30,
2012 December 31,
2011 March 31,
2013 December 31,
2012 $ 586,201 $ 931,779 $ 653,783 $ 533,255 175,449 308,039 425,161 571,634 1,448,271 1,616,382 Receivables, less allowance for doubtful accounts of $29,018 and $25,113 1,555,520 1,886,596 101,712 83,978 109,953 105,728 419,209 421,758 550,670 470,120 12,027,004 9,678,765 13,694,941 12,591,132 (1,619,009 ) (1,360,012 ) (1,995,261 ) (1,881,030 ) 3,046,549 2,830,176 3,313,112 3,240,095 (1,016,585 ) (1,043,520 ) (1,043,568 ) (1,041,861 ) 12,437,959 10,105,409 13,969,224 12,908,336 1,172,743 1,146,112 1,302,509 1,288,833 1,112,298 1,050,915 1,241,864 1,261,049 2,544,373 2,549,882 2,285,041 2,197,027 (1,020,772 ) (945,173 ) (1,087,176 ) (1,113,496 ) 1,264,269 1,251,854 1,457,197 1,436,386 2,544,011 2,562,234 4,002,046 4,032,111 452,408 392,094 1,352,694 1,341,872 $ 19,429,489 $ 17,673,527 $ 24,076,248 $ 23,286,038 $ 1,487,086 $ 897,489 $ 1,304,849 $ 999,061 1,064,410 1,128,458 1,213,907 1,180,538 165,576 125,803 143,589 118,610 12,467,873 11,317,090 16,316,982 15,448,624 270,640 281,534 321,003 332,232 1,707,966 1,688,478 2,738,756 2,699,668 17,163,551 15,438,852 22,039,086 20,778,733 — — — — 4,203 4,170 Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 422,979,383 and 421,485,862 shares issued and 399,779,383 and 421,485,862 outstanding 4,230 4,215 3,210,281 3,205,964 3,237,348 3,233,948 (910,508 ) (947,064 ) (686,022 ) (703,985 ) (38,057 ) (28,414 ) (51,165 ) (26,892 ) 2,504,391 2,507,286 Treasury Stock, at cost, 23,200,000 shares and 0 shares (467,248 ) — 2,265,919 2,234,656 2,037,143 2,507,286 19 19 19 19 2,265,938 2,234,675 2,037,162 2,507,305 $ 19,429,489 $ 17,673,527 $ 24,076,248 $ 23,286,038 Three Months Ended
June 30, Six Months Ended
June 30, Three Months Ended
March 31, 2012 2011 2012 2011 2013 2012 $ 1,849,327 $ 1,731,200 $ 3,472,558 $ 3,210,138 $ 2,006,779 $ 1,623,231 334,199 301,641 635,525 569,727 350,482 301,326 41,622 39,452 77,990 72,431 79,247 36,368 2,225,148 2,072,293 4,186,073 3,852,296 2,436,508 1,960,925 1,188,933 1,187,306 2,304,080 2,260,971 1,351,190 1,114,158 519,750 419,669 1,033,867 855,758 587,027 515,106 206,569 195,591 414,321 377,812 251,709 207,752 152,184 165,826 314,451 362,715 176,782 162,267 (468 ) (1,546 ) (1,560 ) (3,401 ) (1,834 ) (1,092 ) (554 ) 10,801 (1,011 ) 62,677 Other income, net (598 ) (457 ) 2,066,414 1,977,647 4,064,148 3,916,532 2,364,276 1,997,734 158,734 94,646 121,925 (64,236 ) 72,232 (36,809 ) (65,847 ) (34,561 ) (85,370 ) (4,621 ) (54,269 ) (19,524 ) 92,887 60,085 36,555 (68,857 ) — (5,087 ) — (8,760 ) $ 92,887 $ 54,998 $ 36,555 $ (77,617 ) 17,963 (56,333 ) 420,036 415,947 419,056 415,011 415,847 418,076 447,448 451,818 447,881 415,011 460,897 418,076 Earnings (loss) per share attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders (See Note 17—Earnings (Loss) Per Share): $ 0.22 $ 0.13 $ 0.09 $ (0.19 ) $ 0.04 $ (0.13 ) $ 0.21 $ 0.12 $ 0.08 $ (0.19 ) $ 0.04 $ (0.13 )
LOSS Net income Other comprehensive income (loss), net of tax: Translation adjustment changes, (net of tax of 2012: $1,756 and 2011: $324) Unrealized holding gains on securities, (net of tax of 2012: $9 and 2011: $765) Other, (net of tax of 2012: $0 and 2011: $0) Unrealized loss on Euro-denominated debt, (net of tax of 2012: $0 and 2011: $(2,150)) Defined benefit pension plans Net gains arising during the period, (net of tax of 2012: $1,251 and 2011: $888) Defined benefit pension plans Other comprehensive income (loss) Comprehensive income Less: Comprehensive income attributable to noncontrolling interest Comprehensive income attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders Net income (loss) Other comprehensive income (loss), net of tax: Translation adjustment changes, (net of tax of 2012: $382 and 2011: ($1,650)) Unrealized holding gains on securities, (net of tax of 2012: $1,968 and 2011: $765) Other, (net of tax of 2012: $0 and 2011: $0) Unrealized loss on Euro-denominated debt, (net of tax of 2012: $0 and 2011: $(9,548)) Defined benefit pension plans Net gains arising during the period, (net of tax of 2012: $2,338 and 2011: $1,675) Defined benefit pension plans Other comprehensive income (loss) Comprehensive income (loss) Less: Comprehensive income attributable to noncontrolling interest Comprehensive income (loss) attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholdersINCOME (LOSS) Three Months Ended
June 30, 2012 Three Months Ended
June 30, 2011 $ 92,887 $ 60,085 $ (46,090 ) $ 16,259 11 1,202 196 (18 ) — (3,357 ) 2,196 15,699 2,196 15,699 (43,687 ) 29,785 49,200 89,870 — (5,087 ) $ 49,200 $ 84,783 Three Months Ended
March 31, 2013 Three Months Ended
March 31, 2012Net income (loss) $ 17,963 $ (56,333 ) Other comprehensive income (loss), net of tax: Translation adjustment changes $ (27,405 ) $ 29,570 Unrealized holding gains (losses) on securities, (net of tax of 2013: $0 and 2012: $1,958) (5 ) 3,086 Other, (net of tax of 2013: $0 and 2012: $0) (44 ) (87 ) Defined benefit pension plans: Net gains (losses) arising during the period, (net of tax of 2013: $1,682 and 2012: $0) 3,181 (231 ) Defined benefit pension plans 3,181 (231 ) Other comprehensive income (loss) (24,273 ) 32,338 Comprehensive loss attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders $ (6,310 ) $ (23,995 ) Six Months Ended
June 30, 2012 Six Months Ended
June 30, 2011 $ 36,555 $ (68,857 ) $ (16,520 ) $ 58,730 3,097 1,235 108 (60 ) — (14,915 ) 3,672 17,082 3,672 17,082 (9,643 ) 62,072 26,912 (6,785 ) — (8,760 ) $ 26,912 $ (15,545 )
CHANGES IN EQUITY Cash flows from operating activities: Net income (loss) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation of revenue earning equipment Depreciation of property and equipment Amortization of other intangible assets Amortization and write-off of deferred financing costs Amortization and write-off of debt discount Stock-based compensation charges Gain on derivatives Loss on revaluation of foreign denominated debt Provision for losses on doubtful accounts Asset writedowns Deferred taxes on income Gain on sale of property and equipment Changes in assets and liabilities, net of effects of acquisition: Receivables Inventories, prepaid expenses and other assets Accounts payable Accrued liabilities Accrued taxes Public liability and property damage Net cash provided by operating activities Cash flows from investing activities: Net change in restricted cash and cash equivalents Revenue earning equipment expenditures Proceeds from disposal of revenue earning equipment Property and equipment expenditures Proceeds from disposal of property and equipment Acquisitions, net of cash acquired Purchase of short-term investments, net Other investing activities Net cash used in investing activities Cash flows from financing activities: Proceeds from issuance of long-term debt Payment of long-term debt Short-term borrowings: Proceeds Payments Proceeds (payments) under the revolving lines of credit, net Distributions to noncontrolling interest Purchase of noncontrolling interest Proceeds from employee stock purchase plan Proceeds from exercise of stock options Proceeds from disgorgement of stockholder short-swing profits Net settlement on vesting of restricted stock Payment of financing costs Net cash provided by (used in) financing activities Effect of foreign exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents during the period Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental disclosures of cash flow information: Cash paid during the period for: Interest (net of amounts capitalized) Income taxes Supplemental disclosures of non-cash flow information: Purchases of revenue earning equipment included in accounts payable and accrued liabilities Sales of revenue earning equipment included in receivables Purchases of property and equipment included in accounts payable Sales of property and equipment included in receivables Hertz and Dollar Thrifty Automotive Group, Inc., or "Dollar Thrifty." Holdings. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Actual results could differ materially from those estimates. have a material impact on our consolidated financial statements or financial statement disclosures. Balance as of January 1, 2012 Goodwill Accumulated impairment losses Goodwill acquired during the period Adjustments to previously recorded purchase price allocation Other changes during the period(1) Balance as of June 30, 2012 Goodwill Accumulated impairment losses Balance as of January 1, 2011 Goodwill Accumulated impairment losses Goodwill acquired during the year Adjustments to previously recorded purchase price allocation Other changes during the year(1) Balance as of December 31, 2011 Goodwill Accumulated impairment losses Amortizable intangible assets: Customer-related Other(1) Total Indefinite-lived intangible assets: Trade name Other(2) Total Total other intangible assets, net Amortizable intangible assets: Customer-related Other(1) Total Indefinite-lived intangible assets: Trade name Other(2) Total Total other intangible assets, net Amortization of other intangible assets for the three months ended 2011 supplemental pro forma for the second quarter of 2011 (combined entity) 2011 supplemental pro forma for the first half of 2011 (combined entity) presented. Depreciation of revenue earning equipment Adjustment of depreciation upon disposal of revenue earning equipment Rents paid for vehicles leased Total Depreciation of revenue earning equipment Adjustment of depreciation upon disposal of revenue earning equipment Rents paid for vehicles leased Total The adjustment of depreciation upon disposal of revenue earning equipment for the three months ended Corporate Debt Senior Term Facility Senior ABL Facility Senior Notes(2) Promissory Notes Convertible Senior Notes Other Corporate Debt Unamortized Net Discount (Corporate)(3) Total Corporate Debt Fleet Debt U.S. ABS Program U.S. Fleet Variable Funding Notes: Series 2009-1(4) Series 2010-2(4) Series 2011-2(4) U.S. Fleet Medium Term Notes Series 2009-2(4) Series 2010-1(4) Series 2011-1(4) Donlen ABS Program Donlen GN II Variable Funding Notes Other Fleet Debt U.S. Fleet Financing Facility European Revolving Credit Facility European Fleet Notes European Securitization(4) Canadian Securitization Australian Securitization(4) Brazilian Fleet Financing Facility Capitalized Leases Unamortized Discount (Fleet) Total Fleet Debt Total Debt On January 1, ABS Program indebtedness that is then permitted or required to be paid or (iii) released to HVF to be distributed to Hertz or otherwise used by HVF for general purposes. Corporate Debt Senior ABL Facility Total Corporate Debt Fleet Debt U.S. Fleet Variable Funding Notes Donlen GN II Variable Funding Notes U.S. Fleet Financing Facility European Revolving Credit Facility European Securitization Canadian Securitization Australian Securitization Capitalized Leases Total Fleet Debt Total Our borrowing capacity and availability primarily comes from our "revolving credit facilities," which are a combination of asset-backed securitization facilities and asset-based revolving credit facilities. Creditors under each of our revolving credit facilities have a claim on a specific pool of assets as collateral. Our ability to borrow under each revolving credit Components of Net Periodic Benefit Cost: Service cost Interest cost Expected return on plan assets Net amortizations Settlement loss Curtailment gain Net pension/postretirement expense Components of Net Periodic Benefit Cost: Service cost Interest cost Expected return on plan assets Net amortizations Settlement loss Curtailment gain Net pension/postretirement expense Our policy for funded plans is to contribute annually, at a minimum, amounts required by applicable laws, regulations and union agreements. From time to time we make contributions beyond those legally required. For the three multiemployer plan in which we participate is reported to have, and other of our multiemployer plans could have, significant underfunded liabilities. Such underfunding may increase in the event other employers become insolvent or withdraw from the applicable plan or upon the inability or failure of withdrawing employers to pay their withdrawal liability. In addition, such underfunding may increase as a result of lower than expected returns on pension fund assets or other funding deficiencies. The occurrence of any of these events could have a material adverse effect on our consolidated financial position, results of operations or cash flows. two year cliff vesting period. Compensation expense Income tax benefit Total Car rental Equipment rental Total reportable segments Other Total Adjustments: Other reconciling items(1) Purchase accounting(2) Non-cash debt charges(3) Restructuring charges Restructuring related charges(4) Acquisition related costs Pension adjustment(5) Premiums paid on debt(6) Income before income taxes Car rental Equipment rental Total reportable segments Other Total Adjustments: Other reconciling items(1) Purchase accounting(2) Non-cash debt charges(3) Restructuring charges Restructuring related charges(4) Acquisition related costs Management transition costs Pension adjustment(5) Premiums paid on debt(6) Income (loss) before income taxes Total assets increased December 31, 2011 Net income attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders Other comprehensive loss Employee stock purchase plan Net settlement on vesting of restricted stock Stock-based employee compensation charges, net of tax Exercise of stock options, net of tax Common shares issued to Directors June 30, 2012 December 31, 2010 Net loss attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders Other comprehensive income Net income relating to noncontrolling interest Dividend payment to noncontrolling interest Employee stock purchase plan Net settlement on vesting of restricted stock Stock-based employee compensation charges, net of tax Exercise of stock options, net of tax Common shares issued to Directors June 30, 2011 By Type: Termination benefits Pension and post retirement expense Consultant costs Asset writedowns Facility closure and lease obligation costs Other Total By Caption: Direct operating Selling, general and administrative Total By Segment: Car rental Equipment rental Other reconciling items Total Balance as of January 1, 2012 Charges incurred Cash payments Other(1) Balance as of June 30, 2012 Derivatives not designated as hedging instruments under ASC 815: Gasoline swaps Interest rate caps Foreign exchange forward contracts Interest rate swaps Foreign exchange options Total derivatives not designated as hedging instruments under ASC 815 Derivatives Not Designated as Hedging Instruments under ASC 815: Gasoline swaps Interest rate caps Foreign exchange forward contracts Foreign exchange options Total Derivatives Not Designated as Hedging Instruments under ASC 815: Gasoline swaps Interest rate caps Foreign exchange forward contracts Foreign exchange options Total We purchase unleaded gasoline and diesel fuel at prevailing market rates and maintain a program to manage our exposure to changes in fuel prices through the use of derivative commodity instruments. We currently have in place swaps to cover a portion of our fuel price exposure through In March 2013, the Sponsors sold shares of common stock sold by the Sponsors. outstanding: We have indemnified various parties for the costs associated with remediating numerous hazardous substance storage, recycling or disposal sites in many states and, in some instances, for natural resource damages. The amount of any such expenses or related natural resource damages for which we may be held responsible could be substantial. The probable expenses that we expect to incur for such matters have been accrued, and those expenses are reflected in our condensed consolidated financial statements. As of condition, results of operations or cash flows. Basic and diluted earnings (loss) per share: Numerator: Net income (loss) attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders Denominator: Weighted average shares used in basic computation Add: Stock options, RSUs and PSUs Add: Potential issuance of common stock upon conversion of Convertible Senior Notes Weighted average shares used in diluted computation Earnings (loss) per share attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders, basic Earnings (loss) per share attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders, diluted on the same pro rata basis. 1.75 percent per annum. Pursuant to Amendment No. 2, certain of the existing lenders under the Senior Term Facility converted their existing Tranche B Term Loans into a new tranche of tranche B-2 term loans, or the “Tranche B-2 Term Loans”, in an aggregate principal amount, along with new loans advanced by certain new lenders, of approximately $1,372.0 million. The proceeds of Tranche B-2 Term Loans advanced by the new lenders were used to prepay in full all of the Tranche B Term Loans that were not converted into Tranche B-2 Term Loans. “Acquisition.” March 31, 2013. 2011. depreciation of revenue earning equipment were adjusted on certain vehicles in our car rental operations to reflect changes in the estimated residual values to be realized when revenue earning equipment is sold. These depreciation rate changes resulted in net decreases of March 31, 2013. during the period. March 31, 2012. brings to Hertz an immediate leadership position in the value-priced rental vehicle market generally appealing to leisure customers, including domestic and foreign tourists, and to small businesses, government and independent business travelers. During the first 50 employees. Additional efficiency and cost saving initiatives are being March 31, 2012 Revenues: Car rental Equipment rental Other Total revenues Expenses: Direct operating Depreciation of revenue earning equipment and lease charges Selling, general and administrative Interest expense Interest income Other (income) expense, net Total expenses Income before income taxes Provision for taxes on income Net income Less: Net income attributable to noncontrolling interest Net income attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders Selected Car Rental Operating Data: Worldwide number of transactions (in thousands) Domestic (Hertz) International (Hertz) Worldwide transaction days (in thousands)(a) Domestic (Hertz) International (Hertz) Worldwide rental rate revenue per transaction day(b) Domestic (Hertz) International (Hertz) Worldwide average number of cars during the period Domestic (Hertz company-operated) International (Hertz company-operated) Donlen (under lease and maintenance) Adjusted pre-tax income (in millions of dollars)(c) Worldwide revenue earning equipment, net (in millions of dollars) Selected Worldwide Equipment Rental Operating Data: Rental and rental related revenue (in millions of dollars)(d) Same store revenue growth, including growth initiatives(e) Average acquisition cost of rental equipment operated during the period (in millions of dollars) Adjusted pre-tax income (in millions of dollars)(c) Revenue earning equipment, net (in millions of dollars) Car rental segment revenues Non-rental rate revenue Foreign currency adjustment Rental rate revenue Transaction days (in thousands) Rental rate revenue per transaction day (in whole dollars) Adjusted pre-tax income: Car rental Equipment rental Total reportable segments Adjustments: Other reconciling items(1) Purchase accounting(2) Non-cash debt charges(3) Restructuring charges Restructuring related charges(4) Acquisition related costs Pension adjustment(5) Premiums paid on debt(6) Income before income taxes Equipment rental segment revenues Equipment sales and other revenue Foreign currency adjustment Rental and rental related revenue Revenues by Segment Car rental Equipment rental Other reconciling items Total revenues Car Rental Segment Revenues from all other sources Expenses: Fleet related expenses Personnel related expenses Other direct operating expenses Direct operating Depreciation of revenue earning equipment and lease charges Selling, general and administrative Interest expense Interest income Other (income) expense, net Total expenses 18.4%, primarily due to the acquisition of the divestiture of Advantage. Advantage. $2.7 million driven mainly by the fleet growth. cars. equipment. three months ended March 31, 2013 as compared to the prior year period. expense related to debt used to finance Dollar Thrifty acquisition. primarily due to Dollar Thrifty. prior year period. Income before income taxes Provision for taxes on income Net income Less: Net income attributable to noncontrolling interest Net income attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders Revenues: Car rental Equipment rental Other Total revenues Expenses: Direct operating Depreciation of revenue earning equipment and lease charges Selling, general and administrative Interest expense Interest income Other (income) expense, net Total expenses Income (loss) before income taxes Provision for taxes on income Net income (loss) Less: Net income attributable to noncontrolling interest Net income (loss) attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders Selected Car Rental Operating Data: Worldwide number of transactions (in thousands) Domestic (Hertz) International (Hertz) Worldwide transaction days (in thousands)(a) Domestic (Hertz) International (Hertz) Worldwide rental rate revenue per transaction day(a)(b) Domestic (Hertz) International (Hertz) Worldwide average number of cars during the period Domestic (Hertz company-operated) International (Hertz company-operated) Donlen (under lease and maintenance) Adjusted pre-tax income (in millions of dollars)(a)(c) Worldwide revenue earning equipment, net (in millions of dollars) Selected Worldwide Equipment Rental Operating Data: Rental and rental related revenue (in millions of dollars)(a)(d) Same store revenue growth, including growth initiatives(a) Average acquisition cost of rental equipment operated during the period (in millions of dollars) Adjusted pre-tax income (in millions of dollars)(a)(c) Revenue earning equipment, net (in millions of dollars) Car rental segment revenues Non-rental rate revenue Foreign currency adjustment Rental rate revenue Transaction days (in thousands) Rental rate revenue per transaction day (in whole dollars) Adjusted pre-tax income: Car rental Equipment rental Total reportable segments Adjustments: Other reconciling items(1) Purchase accounting(2) Non-cash debt charges(3) Restructuring charges Restructuring related charges(4) Acquisition related costs Management transition costs Pension adjustment(5) Premiums paid on debt(6) Income before income taxes Equipment rental segment revenues Equipment sales and other revenue Foreign currency adjustment Rental and rental related revenue Revenues by Segment Car rental Equipment rental Other reconciling items Total revenues Expenses: Fleet related expenses Personnel related expenses Other direct operating expenses Direct operating Depreciation of revenue earning equipment and lease charges Selling, general and administrative Interest expense Interest income Other (income) expense, net Total expenses Income (loss) before income taxes Provision for taxes on income Net income (loss) Less: Net income attributable to noncontrolling interest Net income (loss) attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders LIQUIDITY AND CAPITAL RESOURCES Cash provided by (used in): Operating activities Investing activities Financing activities Effect of exchange rate changes Net change in cash and cash equivalents first quarter of 2013. 2012 First Quarter Second Quarter 2011 First Quarter Second Quarter Revenue earning equipment expenditures Car rental Equipment rental Total Property and equipment expenditures Car rental Equipment rental Other Total acquisitions. We believe that cash generated from operations and cash received on the disposal of vehicles and equipment, together with amounts available under various liquidity facilities will be adequate to permit us to meet our debt maturities over the next twelve months. ABS Program indebtedness that is then permitted or required to be paid or (iii) released to HVF to be distributed to Hertz or otherwise used by HVF for general purposes. our common stock in March 2013. Hertz's obligations under the indentures for the Senior Notes are guaranteed by each of its direct and indirect domestic subsidiaries that is a guarantor under the Senior Term Facility. The guarantees of all of the subsidiary guarantors may be released to the extent such subsidiaries no longer guarantee our Senior Credit Facilities in the United States. Corporate Debt Senior ABL Facility Total Corporate Debt Fleet Debt U.S. Fleet Variable Funding Notes Donlen GN II Variable Funding Notes U.S. Fleet Financing Facility European Revolving Credit Facility European Securitization Canadian Securitization Australian Securitization Capitalized Leases Total Fleet Debt Total officers, partners, members, employees, agents, representatives and controlling persons, against certain liabilities arising out of performance of a consulting agreement with Hertz Holdings and each of the Sponsors and certain other claims and liabilities, including liabilities arising out of financing arrangements or securities offerings. We also entered into indemnification agreements with each of our directors. We do not believe that these indemnifications are reasonably likely to have a material impact on us. statements included in this Report and Notes The occurrence of any of these events could have a material adverse effect on our consolidated financial position, results of operations or cash flows. Off-Balance Sheet Commitments."STATEMENTSSTATEMENT OF CASH FLOWS Six Months Ended
June 30, 2012 2011 $ 36,555 $ (68,857 ) 989,300 809,433 83,756 77,140 39,029 33,679 30,560 64,251 14,888 22,677 14,977 16,630 (856 ) (2,203 ) 2,498 — 13,582 14,313 3,181 23,311 31,329 (29,184 ) (716 ) (4,748 ) (226,556 ) (187,818 ) (33,056 ) (57,878 ) 142,051 138,214 7,926 (179,327 ) 16,806 21,667 (6,842 ) (4,393 ) 1,158,412 686,907 130,137 (60,233 ) (5,698,892 ) (5,466,856 ) 3,608,323 3,488,890 (137,168 ) (125,370 ) 56,421 28,388 (161,844 ) (10,976 ) — (32,891 ) (625 ) 1,303 $ (2,203,648 ) $ (2,177,745 ) Preferred Stock Common Stock Treasury Stock Non-Controlling Interest Shares Amount December 31, 2012 $ — 421,486 $ 4,215 $ 3,233,948 $ (703,985 ) $ (26,892 ) $ — $ 19 $ 2,507,305 Net income attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders 17,963 17,963 Other comprehensive loss (24,273 ) (24,273 ) Employee stock purchase plan 149 2 1,412 1,414 Net settlement on vesting of restricted stock 732 7 (10,349 ) (10,342 ) (467,248 ) (467,248 ) Stock-based employee compensation charges, net of tax 7,984 7,984 Exercise of stock options, net of tax 608 6 4,209 4,215 Common shares issued to Directors 4 — 144 144 March 31, 2013 $ — 422,979 $ 4,230 $ 3,237,348 $ (686,022 ) $ (51,165 ) $ (467,248 ) $ 19 $ 2,037,162 (Continued) Six Months Ended
June 30, 2012 2011 $ 270,529 $ 3,028,591 (643,083 ) (3,631,480 ) 246,664 285,803 (656,231 ) (489,217 ) 1,543,770 728,855 — (10,500 ) (38,000 ) — 1,988 1,716 5,742 11,581 17 72 (19,976 ) (11,381 ) (6,949 ) (81,392 ) 704,471 (167,352 ) (4,813 ) 31,602 (345,578 ) (1,626,588 ) 931,779 2,374,170 $ 586,201 $ 747,582 $ 281,864 $ 343,383 37,655 25,338 $ 598,620 $ 628,695 178,409 263,954 42,060 59,633 9,163 14,356 Three Months Ended
March 31, 2013 2012 Cash flows from operating activities: Net income (loss) $ 17,963 $ (56,333 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation of revenue earning equipment 571,751 492,053 Depreciation of property and equipment 51,324 44,049 Amortization of other intangible assets 30,499 19,166 Amortization and write-off of deferred financing costs 11,925 17,135 Amortization and write-off of debt discount 5,352 7,742 Stock-based compensation charges 7,984 7,515 Gain on derivatives (1,456 ) (2,956 ) Loss on revaluation of foreign denominated debt — 2,498 Provision for losses on doubtful accounts 12,657 6,917 Deferred taxes on income 35,992 2,370 Gain on sale of property and equipment (1,017 ) (197 ) Changes in assets and liabilities, net of effects of acquisition: Receivables (33,211 ) (57,554 ) Inventories, prepaid expenses and other assets (42,109 ) (5,471 ) Accounts payable 38,289 53,589 Accrued liabilities 22,760 (38,712 ) Accrued taxes 24,660 5,334 Public liability and property damage (9,809 ) (5,144 ) Net cash provided by operating activities 743,554 492,001 Cash flows from investing activities: Net change in restricted cash and cash equivalents 142,642 97,639 Revenue earning equipment expenditures (3,252,980 ) (2,648,695 ) Proceeds from disposal of revenue earning equipment 2,237,878 2,009,336 Property and equipment expenditures (80,060 ) (74,222 ) Proceeds from disposal of property and equipment 23,456 47,631 Acquisitions, net of cash acquired (2,784 ) (147,314 ) Other investing activities (469 ) (140 ) Net cash used in investing activities $ (932,317 ) $ (715,765 ) Three Months Ended
March 31, 2013 2012 Cash flows from financing activities: Proceeds from issuance of long-term debt $ 1,201,582 $ 264,599 Payment of long-term debt (298,631 ) (453,279 ) Short-term borrowings: Proceeds 128,785 40,650 Payments (195,326 ) (243,276 ) Proceeds (payments) under the revolving lines of credit, net (31,986 ) 325,247 Purchase of noncontrolling interest — (38,000 ) Proceeds from employee stock purchase plan 1,202 985 Proceeds from exercise of stock options 4,215 4,514 Proceeds from disgorgement of stockholder short-swing profits — 4 Purchase of treasury shares (467,248 ) — Net settlement on vesting of restricted stock (10,342 ) (18,494 ) Payment of financing costs (15,402 ) (4,217 ) Net cash provided by (used in) financing activities 316,849 (121,267 ) Effect of foreign exchange rate changes on cash and cash equivalents (7,558 ) 7,953 Net increase (decrease) in cash and cash equivalents during the period 120,528 (337,078 ) Cash and cash equivalents at beginning of period 533,255 931,779 Cash and cash equivalents at end of period $ 653,783 $ 594,701 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest (net of amounts capitalized) $ 119,097 $ 126,945 Income taxes 5,703 22,433 Supplemental disclosures of non-cash flow information: Purchases of revenue earning equipment included in accounts payable and accrued liabilities $ 443,120 $ 518,231 Sales of revenue earning equipment included in receivables 230,715 299,577 Purchases of property and equipment included in accounts payable 58,701 41,917 Sales of property and equipment included in receivables 13,698 9,299 "Hertz“Hertz Holdings,"” is our top-level holding company. The Hertz Corporation, or "Hertz,"“Hertz,” is our primary operating company and a direct wholly-ownedwholly owned subsidiary of Hertz Investors, Inc., which is wholly-ownedwholly owned by Hertz Holdings. "We," "us"“We,” “us” and "our"“our” mean Hertz Holdings and its consolidated subsidiaries, including Hertz. Hertz Holdings was incorporated in Delaware in 2005 and had no operations prior to the Acquisition (as defined below).•"CD“CD&R,"•"Carlyle,"“Carlyle,” and•Global Private Equity,& Co., Inc., or "MLGPE,"Merrill Lynch," In January 2009, Bank of America Corporation, or "Bank of America," acquired Merrill Lynch & Co., Inc., the former parent company of MLGPE. Accordingly, Bank of America is now an indirect beneficial owner of our common stock held by the investment funds associated with MLGPE. We refer to CD&R, Carlyle and MLGPE collectively as the "Sponsors." We refer to the acquisition of all of Hertz's common stock by the Sponsors as the "Acquisition."After giving effect“Acquisition.”Sponsors'Sponsors reduced their holdings representto approximately 38%12.5% of the outstanding shares of common stock of Hertz Holdings as of June 30, 2012.On September 1, 2011, Hertz completed the acquisition of Donlen Corporation, or "Donlen," a leading provider of fleet leasing and management services.On December 31, 2011, Hertz purchased the noncontrolling interest of Navigation Solutions, L.L.C., thereby increasing its ownership interest from 65% to 100%.2011,2012, filed with the United States Securities and Exchange Commission, or "SEC," on February 27, 2012,March 4, 2013, or the "Form 10-K," have been followed in preparing the accompanying condensed consolidated financial statements.20112012 condensed consolidated balance sheet data was derived from our audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America, or "GAAP."HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)UnauditedJune 2011,July 2012, the Financial Accounting Standards Board, or "FASB," issued Accounting Standards Update, or "ASU," No. 2011-05, "Presentation2012-02, "Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment," or "ASU 2012-02" which states that an entity has the option first to assess qualitative factors to determine whether the existence of Comprehensive Income," requiring companiesevents and circumstances indicates that it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to present itemstake further action. However, if an entity concludes otherwise, then it is required to determine the fair value of net incomethe indefinite-lived intangible asset and other comprehensive income either in one continuous statement, referred to asperform the statement of comprehensive income, or in two separate, but consecutive statements of net income and other comprehensive income. The amendments in this update do not changequantitative impairment test by comparing the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. These provisions becamefair value with the carrying amount. This provision is effective for usannual and interim impairment tests performed for fiscal years beginning with the quarterly report for the period endedafter September 15, 2012. This accounting guidance is not expected to have a material impact on our consolidated financial statements or financial statement disclosures.31, 2012. In December 2011,2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matters (Topic 830): Parent's Accounting Standards Update No. 2011-12, "Deferralfor the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity,” or “ASU 2013-05”, which permits an entity to release cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the Effective Dateforeign entity in which the subsidiary or group of assets had resided, or, if a controlling financial interest is no longer held. The revised standard is effective for Amendmentsreporting periods beginning after December 15, 2013. The amendments should be applied prospectively to derecognition events occurring after the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05," which defers the timing of implementing only those changes in Update 2011-05 that relateeffective date. Prior periods should not be adjusted. Early adoption is permitted. This accounting guidance is not expected to the presentation of reclassification adjustments. The contractual maturities of such borrowings may exceed 90 days in certain cases.June 30, 2012March 31, 2013 and December 31, 2011,2012, the portion of total restricted cash and cash equivalents that was associated with our Fleet Debt facilities was $104.0$370.5 million and $213.6$494.0 million, respectively. The decrease in restricted cash and cash equivalents associated with our fleet debt of $109.6$123.5 million from December 31, 20112012 to June 30, 2012March 31, 2013 was primarily related to the timing of purchases and sales of revenue earning vehicles. Car Rental Equipment
Rental Total $ 419.3 $ 693.8 $ 1,113.1 (46.1 ) (674.9 ) (721.0 ) 373.2 18.9 392.1
—
76.8
76.8 (15.1 ) — (15.1 ) (0.9 ) (0.5 ) (1.4 ) (16.0 ) 76.3 60.3 403.3 770.1 1,173.4 (46.1 ) (674.9 ) (721.0 ) $ 357.2 $ 95.2 $ 452.4 Car Rental Equipment
Rental Total $ 367.9 $ 681.7 $ 1,049.6 (46.1 ) (674.9 ) (721.0 ) 321.8 6.8 328.6
53.1
12.3
65.4 (0.9 ) (0.1 ) (1.0 ) (0.8 ) (0.1 ) (0.9 ) 51.4 12.1 63.5 419.3 693.8 1,113.1 (46.1 ) (674.9 ) (721.0 ) $ 373.2 $ 18.9 $ 392.1 (1)Primarily consists of changes resulting from the translation of foreign currencies at different exchange rates from the beginning of the period to the end of the period. Car Rental Total Balance as of January 1, 2013 Goodwill $ 1,287.5 $ 775.4 $ 2,062.9 Accumulated impairment losses (46.1 ) (674.9 ) (721.0 ) 1,241.4 100.5 1,341.9 Goodwill acquired during the period — — — 9.2 4.6 13.8 (2.9 ) (0.1 ) (3.0 ) 6.3 4.5 10.8 Balance as of March 31, 2013 Goodwill 1,293.8 779.9 2,073.7 Accumulated impairment losses (46.1 ) (674.9 ) (721.0 ) $ 1,247.7 $ 105.0 $ 1,352.7 Car Rental Total Balance as of January 1, 2012 Goodwill $ 419.3 $ 693.8 $ 1,113.1 Accumulated impairment losses (46.1 ) (674.9 ) (721.0 ) 373.2 18.9 392.1 Goodwill acquired during the year 884.9 82.0 966.9 (15.3 ) — (15.3 ) (1.4 ) (0.4 ) (1.8 ) 868.2 81.6 949.8 Balance as of December 31, 2012 Goodwill 1,287.5 775.4 2,062.9 Accumulated impairment losses (46.1 ) (674.9 ) (721.0 ) $ 1,241.4 $ 100.5 $ 1,341.9 (a) Consists of adjustments related to purchase accounting and deferred tax during 2013. (b) Primarily consists of changes resulting from the translation of foreign currencies at different exchange rates from the beginning of the period to the end of the period. (c) Consists of deferred tax adjustments recorded during 2012. (d) Primarily consists of changes resulting from disposals and the translation of foreign currencies at different exchange rates from the beginning of the year to the end of the year. June 30, 2012 March 31, 2013 Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Value $ 689.7 $ (399.4 ) $ 290.3 $ 694.6 $ (451.3 ) $ 243.3 78.4 (32.9 ) 45.5 457.4 (46.9 ) 410.5 768.1 (432.3 ) 335.8 1,152.0 (498.2 ) 653.8 2,190.0 — 2,190.0 3,330.0 — 3,330.0 18.2 — 18.2 18.2 — 18.2 2,208.2 — 2,208.2 3,348.2 — 3,348.2 $ 2,976.3 $ (432.3 ) $ 2,544.0 $ 4,500.2 $ (498.2 ) $ 4,002.0 December 31, 2012 Amortizable intangible assets: Customer-related $ 694.7 $ (434.0 ) $ 260.7 459.6 (33.8 ) 425.8 Total 1,154.3 (467.8 ) 686.5 Indefinite-lived intangible assets: Trade name 3,330.0 — 3,330.0 15.6 — 15.6 Total 3,345.6 — 3,345.6 Total other intangible assets, net $ 4,499.9 $ (467.8 ) $ 4,032.1 (1) Other amortizable intangible assets primarily include Dollar Thrifty concession agreements, Donlen trade name, reacquired franchise rights, non-compete agreements and technology-related intangibles. (2) Other indefinite-lived intangible assets primarily consist of reacquired franchise rights. December 31, 2011 Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Value $ 672.6 $ (365.5 ) $ 307.1 74.7 (27.8 ) 46.9 747.3 (393.3 ) 354.0 2,190.0 — 2,190.0 18.2 — 18.2 2,208.2 — 2,208.2 $ 2,955.5 $ (393.3 ) $ 2,562.2 (1)Other amortizable intangible assets primarily consist of our Advantage trade name and concession rights, Donlen trade name, reacquired franchise rights, non-compete agreements and technology-related intangibles.(2)Other indefinite-lived intangible assets primarily consist of reacquired franchise rights.June 30,March 31, 2013 and 2012 and 2011, was approximately $19.8$30.5 million and $16.9$19.2 million respectively, and for the six months ended June 30, 2012 and 2011, was approximately $39.0 million and $33.7 million,, respectively. Based on our amortizable intangible assets as of June 30, 2012,March 31, 2013, we expect amortization expense to be approximately $37.9$90.1 million for the remainder of 2012, $75.32013, $116.3 million in 2013, $71.4 million in 2014, $69.1$113.8 million in 2015, $20.6$64.9 million in 2016 and $8.6$51.8 million in 2017.Unaudited$41.0 millionOn September 1, 2011, Hertz acquired 100%. As a condition of the equity interestMerger Agreement, and pursuant to a divestiture agreement reached with the Federal Trade Commission, or "FTC," Hertz divested its Simply Wheelz subsidiary, which owned and operated the Advantage brand, and secured for the buyer of Advantage certain Dollar Thrifty on-airport car rental concessions. Dollar Thrifty is now a wholly-owned subsidiary of Hertz.Donlen, a leading provider of fleet leasing and management services. Theaggregate principal amount of revenueSenior Notes and earningsTerm Loans, (ii) approximately $404.0 million of acquired cash and cash equivalents from Dollar Thrifty, and (iii) the balance funded by Hertz's existing cash. Revenue Loss 2012 supplemental pro forma from 1/1/12 - 3/31/12 (combined entity) $ 2,257.4 $ (41.1 ) hadnor do they reflect the expected realization of any cost savings associated with the acquisition. The unaudited pro forma consolidated results reflect the historical financial information of Hertz Holdings and Dollar Thrifty, adjusted for increases in amortization expense related to intangible assets acquired, additional interest expense associated with the financing relating to the acquisition, date been January 1, 2010, are as follows (in millions): Revenue Earnings
(Loss) $ 2,171.0 $ 58.2 4,045.0 (72.1 ) 2011 supplemental pro forma revenue forJune 30, 2011 excludes $1.2 million related to deferred revenue which was eliminated as part of acquisition accounting. 2011 supplemental pro forma earnings for the three months ended June 30, 2011 excludes $0.7 million related to deferred income which was eliminated as part of acquisition accounting. 2011 supplemental pro forma revenue for the six months ended June 30, 2011 excludes $2.6 million related to deferred revenue which was eliminated as part of acquisition accounting. 2011 supplemental pro forma earnings for the six months ended June 30, 2011 excludes $1.6 million related to deferred income which was eliminated as part of acquisition accounting.This transaction has been accounted for using the acquisition method of accounting in accordance with GAAP and operating results of Donlen from the date of acquisition are included in our consolidated statements of operations. The allocation of the purchase price to the tangible and intangible net assets acquired is substantially complete, except with regards to deferred taxes on income, which could change based upon the completion of Donlen's pre-acquisition tax return.Other AcquisitionsAdditionally, during the six months ended June 30, 2012,March 31, 2013, we added ninere-acquired equipmentcar rental locations through external acquisitions.from our former licensees. These acquisitions are not material to the consolidated amounts presented within our statement of operations for the three-monththree months ended March 31, 2013.six-monthclearance for the Dollar Thrifty acquisition, Hertz agreed to dispose of Advantage, to secure for the buyer of Advantage certain on-airport car rental concessions and related assets at 13 locations where Dollar Thrifty operated at least one of its brands prior to the consummation of the Dollar Thrifty acquisition, or the “Initial airport locations.” Additionally, Hertz agreed to secure for the buyer of Advantage or, in certain cases, one or more other FTC-approved buyers, on-airport car rental concessions at 13 additional locations where Dollar Thrifty operated prior to the consummation of the Dollar Thrifty acquisition, or the “Secondary airport locations.” The buyer of Advantage agreed to assume all of the Secondary airport locations. As of March 31, 2013, Hertz completed the sale of several locations among the Initial airport locations and the Secondary airport locations, and had a remaining loss reserve, including estimated support payments of $22.6 million.ended June 30, 2012.5—6—Taxes on Incomeand six months ended June 30,March 31, 2013 and 2012 was 41.5%75.1% and 70.0%(53.0)%, respectively. The effective tax rate for the full fiscal year 2013 is expected to be approximately 40%. The provision for taxes on income of $65.8$54.3 million in the three months ended June 30, 2012March 31, 2013 increased from $34.5$19.5 million in the three months ended June 30, 2011,March 31, 2012, primarily due to higher income before income taxes, changes in geographic earnings mix and changes in losses in certain non-U.S. jurisdictions for which tax benefits cannot beare not realized. The provision for taxes on income of $85.3 million in the six months ended June 30, 2012 increased from $4.6 million in the six months ended June 30, 2011, primarily due to higher income before income taxes, changes in geographic earnings mix and changes in losses in certain non-U.S. jurisdictions for which tax benefits cannot be realized.HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)Unaudited6—7—Depreciation of Revenue Earning Equipment and Lease Charges Three Months Ended
June 30, 2012 2011 $ 539.5 $ 453.3 (41.2 ) (56.3 ) 21.5 22.7 $ 519.8 $ 419.7 Three Months Ended
March 31, 2013 2012 Depreciation of revenue earning equipment $ 573.0 $ 531.4 Adjustment of depreciation upon disposal of revenue earning equipment (1.3 ) (39.4 ) Rents paid for vehicles leased 15.3 23.1 Total $ 587.0 $ 515.1 Six Months Ended
June 30, 2012 2011 $ 1,069.9 $ 871.8 (80.6 ) (62.4 ) 44.6 46.3 $ 1,033.9 $ 855.7 June 30,March 31, 2013 and 2012, included net losses of $3.3 millionand 2011, included net gains of $38.3$34.9 million and $53.6 million,, respectively, on the disposal of vehicles used in our car rental operations and net gains of $2.9$4.6 million and $2.7$4.5 million, respectively, on the disposal of industrial and construction equipment used in our equipment rental operations. The adjustment of depreciation upon disposal of revenue earning equipment for the six months ended June 30, 2012 and 2011, included net gains of $73.2 million and $59.7 million, respectively, on the disposal of vehicles used in our car rental operations and net gains of $7.4 million and $2.7 million, respectively, on the disposal of industrial and construction equipment used in our equipment rental operations.sixthree months ended June 30, 2012,March 31, 2013, depreciation rates being used to compute the provision for depreciation of revenue earning equipment were adjusted on certain vehicles in our car rental operations to reflect changes in the estimated residual values to be realized when revenue earning equipment is sold. These depreciation rate changes resulted in net decreases of $37.1$0.7 million and $37.3$0.2 million in depreciation expense for the three and six months ended June 30,March 31, 2013 and March 31, 2012, respectively. DuringFor the three-month and six-month periodsthree months ended June 30, 2012, there was no impact fromMarch 31, 2013, the depreciation rate changes in certain of our equipment rental operations.operations resulted in an increase of $0.1 million in depreciation expense.7—8—Debt Average
Interest
Rate at
June 30,
2012(1) Fixed or
Floating
Interest
Rate Maturity June 30,
2012 December 31,
2011 3.75 % Floating 3/2018 $ 1,382.5 $ 1,389.5 2.50 % Floating 3/2016 410.0 — 7.09 % Fixed 10/2018–1/2021 2,450.0 2,638.6 6.96 % Fixed 6/2012–1/2028 48.7 224.7 5.25 % Fixed 6/2014 474.7 474.7 5.39 % Floating Various 52.0 49.6 (50.0 ) (72.3 ) 4,767.9 4,704.8 1.24 % Floating 3/2013 2,025.0 1,000.0 1.38 % Floating 3/2013 200.0 170.0 N/A Floating 4/2012 — 175.0 2,225.0 1,345.0 4.95 % Fixed 3/2013–3/2015 1,384.3 1,384.3 3.77 % Fixed 2/2014–2/2018 749.8 749.8 2.86 % Fixed 3/2015–3/2017 598.0 598.0 2,732.1 2,732.1 1.17 % Floating 8/2012 879.1 811.2 3.00 % Floating 9/2015 136.0 136.0 3.13 % Floating 6/2015 261.8 200.6 8.50 % Fixed 7/2015 498.7 517.7 2.78 % Floating 7/2013 316.5 256.2 2.13 % Floating 6/2013 131.7 68.3 5.31 % Floating 12/2012 154.2 169.3 14.22 % Floating 2/2013 14.8 23.1 4.40 % Floating Various 358.4 363.7 (8.3 ) (10.9 ) 1,863.8 1,724.0 7,700.0 6,612.3 $ 12,467.9 $ 11,317.1 Facility Maturity March 31,
2013 December 31,
2012Corporate Debt Senior Term Facility 3.75% Floating 3/2018 $ 2,120.1 $ 2,125.5 Senior ABL Facility 2.46% Floating 3/2016 630.0 195.0 6.58% Fixed 10/2018–10/2022 3,900.0 3,650.0 Promissory Notes 6.96% Fixed 6/2012–1/2028 48.7 48.7 Convertible Senior Notes 5.25% Fixed 6/2014 474.7 474.7 Other Corporate Debt 4.30% Floating Various 94.0 88.7 (30.5 ) (37.3 ) Total Corporate Debt 7,237.0 6,545.3 Fleet Debt HVF U.S. ABS Program HVF U.S. Fleet Variable Funding Notes: 1.04% Floating 3/2014 1,950.0 2,350.0 1,950.0 2,350.0 HVF U.S. Fleet Medium Term Notes 5.38% Fixed 3/2013–3/2015 807.5 1,095.9 3.77% Fixed 2/2014–2/2018 749.9 749.8 2.86% Fixed 3/2015–3/2017 598.0 598.0 1.68% Fixed 8/2016–8/2018 950.0 — 3,105.4 2,443.7 RCFC U.S. ABS Program RCFC U.S. Fleet Variable Funding Notes 1.05% Floating 12/2013 519.0 519.0 RCFC U.S. Fleet Medium Term Notes 2.81% Fixed 2/2015 500.0 500.0 3.21% Fixed 5/2015 400.0 400.0 1,419.0 1,419.0 Donlen ABS Program 1.10% Floating 12/2013 898.1 899.3 Other Fleet Debt U.S. Fleet Financing Facility 2.96% Floating 9/2015 166.0 166.0 European Revolving Credit Facility 2.85% Floating 6/2015 127.8 185.3 European Fleet Notes 8.50% Fixed 7/2015 511.2 529.4 2.49% Floating 7/2014 237.4 242.2 2.16% Floating 6/2013 85.6 100.5 Note:For further information on the definitions and terms of our debt, see Note 4 of the Notes to our audited annual consolidated financial statements included in our Form 10-K under the caption "Item 8—Financial Statements and Supplementary Data."(1)As applicable, reference is to the June 30, 2012 weighted average interest rate (weighted by principal balance).Unaudited(2)References to our "Senior Notes" include the series of Hertz's unsecured senior notes set forth in the table below. As of June 30, 2012, the outstanding principal amount for each such series of the Senior Notes is also specified below. Outstanding Principal (in millions) June 30, 2012 December 31, 2011 8.875% Senior Notes due January 2014 $ — $ 162.3 7.875% Senior Notes due January 2014 — 276.3 (€213.5) 7.50% Senior Notes due October 2018 700.0 700.0 7.375% Senior Notes due January 2021 500.0 500.0 6.75% Senior Notes due April 2019 1,250.0 1,000.0 $ 2,450.0 $ 2,638.6 Facility Maturity March 31,
2013 December 31,
20122.13% Floating 8/2014 54.1 55.3 4.34% Floating 12/2014 149.9 148.9 Brazilian Fleet Financing Facility 13.18% Floating 10/2013 14.2 14.0 Capitalized Leases 4.21% Floating Various 350.8 337.6 Unamortized Discount (Fleet) 10.5 12.1 1,707.5 1,791.3 Total Fleet Debt 9,080.0 8,903.3 Total Debt $ 16,317.0 $ 15,448.6 (3)As of June 30, 2012 and December 31, 2011, $53.4 million and $65.5 million, respectively, of the unamortized corporate discount relates to the 5.25% Convertible Senior Notes.(4)Maturity reference is to the "expected final maturity date" as opposed to the subsequent "legal maturity date." The expected final maturity date is the date by which Hertz and investors in the relevant indebtedness expect the relevant indebtedness to be repaid. The legal final maturity date is the date on which the relevant indebtedness is legally due and payable.Note: For further information on the definitions and terms of our debt, see Note 5 of the Notes to our audited annual consolidated financial statements included in our Form 10-K under the caption "Item 8—Financial Statements and Supplementary Data." (1) As applicable, reference is to the March 31, 2013 weighted average interest rate (weighted by principal balance). (2) References to our "Senior Notes" include the series of Hertz's unsecured senior notes set forth in the table below. As of March 31, 2013 and December 31, 2012, the outstanding principal amount for each such series of the Senior Notes is also specified below. Outstanding Principal (in millions) Senior Notes March 31, 2013 December 31, 2012 4.25% Senior Notes due April 2018 $ 250.0 $ — 7.50% Senior Notes due October 2018 700.0 700.0 6.75% Senior Notes due April 2019 1,250.0 1,250.0 5.875% Senior Notes due October 2020 700.0 700.0 7.375% Senior Notes due January 2021 500.0 500.0 6.25% Senior Notes due October 2022 500.0 500.0 $ 3,900.0 $ 3,650.0 (3) (4) Maturity reference is to the "expected final maturity date" as opposed to the subsequent "legal maturity date." The expected final maturity date is the date by which Hertz and investors in the relevant indebtedness expect the relevant indebtedness to be repaid. The legal final maturity date is the date on which the relevant indebtedness is legally due and payable. (5) RCFC U.S. ABS Program and the Dollar Thrifty-Sponsored Canadian Securitization represent fleet debt acquired in connection with the Dollar Thrifty acquisition on November 19, 2012. June 30March 31 (in millions of dollars) are as follows:2014 $ 5,985.9 (including $5,686.7 of other short-term borrowings*) 2015 $ 1,991.1 2016 $ 1,101.8 2017 $ 529.2 2018 $ 248.1 After 2018 $ 6,480.9 2013 $ 5,993.7 (including $5,390.0 of other short-term borrowings*) 2014 $ 280.0 2015 $ 1,211.3 2016 $ 888.4 2017 $ 244.7 After 2017 $ 3,908.1
HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES*Our short-term borrowings as of June 30, 2012 include, among other items, the amounts outstanding under the European Securitization, Australian Securitization, Senior ABL Facility, U.S. Fleet Financing Facility, U.S. Fleet Variable Funding Notes, Brazilian Fleet Financing Facility, Canadian Securitization, Capitalized Leases, European Revolving Credit Facility and the Donlen GN II Variable Funding Notes. These amounts are reflected as short-term borrowings, regardless of the facility maturity date, as these facilities are revolving in nature and/or the outstanding borrowings have maturities of three months or less. Short-term borrowings also include the Convertible Senior Notes which became convertible on January 1, 2012 and remain as such through September 30, 2012. As of June 30, 2012, short-term borrowings had a weighted average interest rate of 2.3%.* Our short-term borrowings as of March 31, 2013 include, among other items, the amounts outstanding under the Senior ABL Facility, HVF U.S. Fleet Variable Funding Notes, RCFC U.S. Fleet Variable Funding Notes, Donlen GN II Variable Funding Notes, U.S. Fleet Financing Facility, European Revolving Credit Facility, European Securitization, Hertz-Sponsored Canadian Securitization, Dollar Thrifty-Sponsored Canadian Securitization, Australian Securitization, Brazilian Fleet Financing Facility and Capitalized Leases. These amounts are reflected as short-term borrowings, regardless of the facility maturity date, as these facilities are revolving in nature and/or the outstanding borrowings have maturities of three months or less. Short-term borrowings also include the Convertible Senior Notes which became convertible on January 1, 2013 and remain as such through June 30, 2013. As of March 31, 2013, short-term borrowings had a weighted average interest rate of 2.1%. June 30, 2012,March 31, 2013, there were outstanding standby letters of credit totaling $608.8 million.$669.6 million. Of this amount, $563.1$617.6 million was issued under the Senior Credit Facilities ($291.0 million of which was issued for the benefit of the U.S. ABS Program and $64.6 million was related to other debt obligations) and the remainder is primarily to support self-insurance programs (including insurance policies with respect toHERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)Unauditedwhich we have agreed to indemnify the policy issuers for any losses) as well as airport concession obligations in the United States, Canada and Europe.Facilities. As of June 30, 2012,March 31, 2013, none of these letters of credit have been drawn upon.2012 Events2012,2013, our Convertible Senior Notes became convertible.convertible again. This conversion right was triggered because our closing common stock price per share exceeded $10.77$10.77 for at least 20 trading days during the 30 consecutive trading day period ending on December 31, 2011. Since this same trigger2012. The Convertible Senior Notes continued to be convertible until March 31, 2013, and on April 1, 2013, our Convertible Senior Notes became convertible again. This conversion right was met intriggered because our closing common stock price per share exceeded $10.77 for at least 20 trading days during the second quarter of 2012, the30 consecutive trading day period ending on March 31, 2013. The Convertible Senior Notes continue to be convertible through SeptemberJune 30, 2012,2013, and may be convertible thereafter, if one or more of the conversion conditions specified in the indenture is satisfied during future measurement periods. OurIn connection with our repurchase of the shares of our common stock in March 2013, we changed our settlement policy has been and continues to be toprovide that we will settle conversions of our Convertible Senior Notes using 100% shares of our common stock. Previously, we had a policy of settling the conversion of our Convertible Senior Notes using a combination of cash and our common stock,settlement, which callscalled for settling the fixed dollar amount per $1,000 in principal amount in cash and settling in shares the excess conversion value, if any.February 2012,January 2013, Hertz calledVehicle Financing LLC, or "HVF," an insolvency remote, direct, wholly-owned, special purpose subsidiary of Hertz, completed the remainderissuance of its outstanding 8.875% Senior Notes due 2014 and 7.875% Senior Notes due January 2014 for redemption. Hertz redeemed these notes in full during March 2012.In March 2012, Hertz issued an additional $2506.75% Senior$42.25 million of three year Class B notes carry a 1.86% coupon, the $543.75 million of five year Class A notes carry a 1.83% coupon, and the $81.25 million of five year Class B notes carry a 2.48% coupon. The three year notes and five year notes have expected final payment dates in August 2016 and August 2018, respectively. The Class B notes are subordinated to the Class A notes.due 2019. The proceeds of this March 2012 offering werewill be, to the extent permitted by the applicable agreements, (i) used to redeem allpay the purchase price of the outstanding 8.875% Senior Notes due 2014 and together with cash on hand, all of the outstanding 7.875% Senior Notes due 2014 which resulted in the write-off of unamortized debt costs of $3.2 million.In March 2012, Hertz amended the Canadian Securitizationvehicles acquired by HVF pursuant to extend the maturity date from March 2012 to May 2012. In the second quarter 2012, the maturity date was extended to June 2013.In April 2012, Hertz paid off the remaining debt outstanding under theHVF's U.S. ABS Program Series 2011-2(as defined herein), (ii) used to pay the principal amount of other HVF U.S. Fleet Variable Funding Notes and terminated the facility.May 2012, the borrowing capacity of the Series 2009-1 under our U.S. Fleet Variable Funding Notes was increased by $250 million.In June 2012,February 2013, Hertz amended the European Revolving Credit Facilitycaused its Brazilian operating subsidiary to extend the maturity date from June 2013 to June 2015.In June 2012, Hertz amendedamend the Brazilian Fleet Financing Facility to extend the maturity date from June 2012February 2013 to FebruaryOctober 2013.June 2012,March 2013, Hertz amended the European Seasonal Revolving Credit Facility under the European Revolving Credit Facilityissued $250 million in aggregate principal amount of 4.25% Senior Notes due 2018. The proceeds of this March 2013 offering were used by Hertz to createreplenish a commitment period running from June 2012portion of its liquidity, after having dividended $467.2 million in available liquidity to November 2012 that provides for aggregate maximum borrowingsus, which we used to repurchase 23,200,000 shares of €85.7 million (the equivalent of $106.9 million as of June 30, 2012), subjectour common stock in March 2013.borrowing base availability.During the first half of 2012, Donlen's GN II Variable Funding Notes remained outstanding and lender commitments thereunder were increased to permit aggregate maximum borrowings of $900.0 million (subject to borrowing base availability).Seeour indebtedness, see Note 17—18—Subsequent Events.agreementsagreement entered into in connection with the issuance of $250$250 million in aggregate principal amount of the 6.75%4.25% Senior Notes due 20192018 in March 2012,2013, Hertz has agreed to file a registration statement under the Securities Act of 1933, as amended, to permit either the exchange of such notes for registered notes or, in the alternative, the registered resale of such notes. Hertz's failure to meet its obligations under theeither exchange and registration rights agreement, including by failing to have the registration statement become effective by March 20132014 or failing to complete the exchange offer by April 2013,2014, will result in Hertz incurring special interest on such notes at a per annum rate of 0.25% for the first 90 days of any period where a defaultany such failure has occurred and is continuing, which rate will be increased by an additional 0.25% during each subsequent 90 day period, up to a maximum of 0.50%. We do not believe the special interest obligation is probable, and as such, we have not recorded any amounts with respect to this registration payment arrangement.June 30, 2012March 31, 2013 has been issued from the terms as disclosed in our Form 10-K.1:1:1 for the four quarters most recently ended. As of June 30, 2012,March 31, 2013, we were not subject to such contractually specified fixed charge coverage ratio.June 30, 2012,March 31, 2013, the following facilities were available for the use of Hertz and its subsidiaries (in millions of dollars): Remaining
Capacity Availability Under
Borrowing Base
Limitation $ 1,027.6 $ 782.4 $ 751.3 $ 751.3 1,027.6 782.4 751.3 751.3 163.1 36.8 HVF U.S. Fleet Variable Funding Notes 488.8 — RCFC U.S. Fleet Variable Funding Notes 81.0 — 26.1 2.1 105.0 — 54.0 16.2 24.0 — 119.3 66.7 153.4 — 157.3 16.8 260.3 — 63.4 20.6 Hertz-Sponsored Canadian Securitization 111.2 — Dollar Thrifty-Sponsored Canadian Securitization 93.5 — 97.8 — 111.2 — 132.2 25.6 45.1 10.3 813.2 184.8 1,473.5 10.3 $ 1,840.8 $ 967.2 $ 2,224.8 $ 761.6 HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)UnauditedJune 30, 2012,March 31, 2013, the Senior Term Facility had approximately $0.3$0.1 million available under the letter of credit facility and the Senior ABL Facility had $1,081.6$1,027.2 million available under the letter of credit facility sublimit, subject to borrowing base restrictions.June 30, 2012March 31, 2013 and December 31, 2011,2012, our International Fleet Financing No. 1 B.V., International Fleet Financing No. 2 B.V. and HA Funding Pty, Ltd. variable interest entities collectively had total assets primarily comprised of loans receivable and revenue earning equipment of $528.1$393.4 million and $456.3$440.8 million, respectively, and collectively had total liabilities primarily comprised of debt of $527.6$392.9 million and $455.8$440.3 million, respectively.8—9—Employee Retirement Benefits Pension Benefits Postretirement
Benefits (U.S.) Pension Benefits U.S. Non-U.S. U.S. Non-U.S. Three Months Ended June 30, Three Months Ended March 31, 2012 2011 2012 2011 2012 2011 2013 2012 2013 2012 2013 2012 Components of Net Periodic Benefit Cost: $ 7.0 $ 6.9 $ 0.3 $ 1.8 $ 0.1 $ — $ 7.3 $ 6.3 $ 0.6 $ 0.3 $ 0.1 $ 0.1 7.4 7.5 2.3 2.8 0.2 0.3 6.7 6.5 2.3 2.3 0.2 0.2 (8.0 ) (8.1 ) (3.0 ) (3.1 ) — — (7.5 ) (7.3 ) (3.1 ) (3.0 ) — — 3.2 2.3 (0.1 ) (0.3 ) — 0.1 4.3 2.8 0.1 — — — — 0.4 — — — — — — — (13.1 ) — — $ 9.6 $ 9.0 $ (0.5 ) $ (11.9 ) $ 0.3 $ 0.4 Net pension / postretirement expense $ 10.8 $ 8.3 $ (0.1 ) $ (0.4 ) $ 0.3 $ 0.3 HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)Unaudited Pension Benefits Postretirement
Benefits (U.S.) U.S. Non-U.S. Six Months Ended June 30, 2012 2011 2012 2011 2012 2011 $ 13.3 $ 13.1 $ 0.6 $ 3.5 $ 0.2 $ 0.1 13.9 14.0 4.6 5.6 0.4 0.5 (15.3 ) (15.2 ) (6.0 ) (6.2 ) — — 6.0 4.3 (0.1 ) (0.6 ) — 0.1 — 0.7 — — — — — — — (13.1 ) — — $ 17.9 $ 16.9 $ (0.9 ) $ (10.8 ) $ 0.6 $ 0.7 and six months ended June 30, 2012,March 31, 2013, we contributed $11.8 and $32.2 million, respectively, to our worldwide pension plans, including discretionary contributions of $0.0$3.0 million and $3.2 million, respectively, to our United Kingdom, or "U.K.," defined benefit pension plan and benefit payments made through unfunded plans. For the three and six months ended June 30, 2011,March 31, 2012, we contributed $12.3$20.3 million and $57.1 million, respectively, to our worldwide pension plans, including discretionary contributions of $0.8$3.2 million and $13.2 million, respectively, to our U.K. defined benefit pension plan and benefit payments made through unfunded plans. The level of future contributions will vary, and is dependent on a number of factors including investment returns, interest rate fluctuations, plan demographics, funding regulations and the results of the final actuarial valuation.On June 30, 2011, we approved an agreement with the trustees of our U.K. defined benefit pension plan to cease all future benefit accruals to existing members and to close the plan to new members. Effective July 1, 2011, we introduced a defined contribution plan with company matching contributions to replace the U.K. defined benefit pension plan. The company matching contributions are generally 100% of the employee contributions, up to 8% of pay, except that former members of the defined benefit pension plan receive an enhanced match for five years. In the year ended December 31, 2011, we recognized a gain of $13.1 million for the U.K. plan that represented unamortized prior service cost from a 2010 amendment that eliminated discretionary pension increases related to pre-1997 service primarily for inactive employees.SeniorExecutive Vice Presidents and above who have a minimum of 20 years of service and who retire at age 58 or above. The assigned car benefit is available for 15 years post-retirement or until the participant reaches the age of 80, whichever occurs last.Table of ContentsHERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)Unaudited9—10—Stock-Based CompensationMarch 2012,February 2013, we granted 527,3605,247 Restricted Stock Units, or "RSUs," and 1,707,458 Performance Stock Units, or "PSUs," to certain executives and employees at fair values ranging from $13.65 to $14.47, 747,423 Performance Stock Units, or "PSUs," at a fair value of $13.65, and 1,083,962 PSUs (referred to as Price Vesting Units, or "PVUs") at fair values ranging from $10.13 to $11.26$19.95, under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan, or the "Omnibus Plan." TheOf the total PSUs awarded 1,136,724 PSUs have a performance condition under which the number of units that will ultimately be awarded will vary from 0% to 150% of the original grant, based on 20122013 and 2013combined 2013-2014 Corporate EBITDA results. "EBITDA" means consolidated net income before net interest expense, consolidated income taxes and consolidated depreciation (which includes revenue earning equipment lease charges) and amortization and "Corporate EBITDA," represents EBITDA as adjusted for car rental fleet interest, car rental fleet depreciation and certain other items, as provided in the applicable award agreements. These PSU awards vest evenly over a three year vesting period. Of the PVUs granted, one halftotal PSUs awarded, 490,632 PSUs have a performance condition under which the number of units that will fully vest after three years if the stock price appreciates 15% over the grant date price, and one halfultimately be awarded will fully vest after four years if the stock price appreciates 25% over the grant date price. Partial attainmenteither be 0% to 100% of the stock appreciation targetsoriginal grant. Award of this grant is contingent upon final 2013 Corporate EBITDA Margin exceeding a minimum level. "Corporate EBITDA Margin" means Corporate EBITDA as a percentage of Consolidated Revenue. These PSU awards vest evenly over a three year vesting period. Of the total PSUs awarded, 83,567 PSUs have a performance condition under which the number of units that will result in partial vesting. The achievementultimately be awarded will either be 0% to 100% of the market condition for the PVUsoriginal grant. Award of this grant is determined based on the average closing stock price for the 20 trading day period ending March 6, 2015 and 2016, respectively. In May 2012, Hertz Holdings granted 146,301contingent upon final 2013 Corporate EBITDA Margin exceeding a minimum level. These PSU awards vest evenly over a two year vesting period. The RSUs atawarded have a fair value of $15.48. Three Months Ended
June 30, Six Months Ended
June 30, Three Months Ended
March 31, 2012 2011 2012 2011 2013 2012 $ 7.5 $ 7.6 $ 15.0 $ 16.6 $ 8.0 $ 7.5 (2.9 ) (3.0 ) (5.8 ) (6.4 ) (3.1 ) (2.9 ) $ 4.6 $ 4.6 $ 9.2 $ 10.2 $ 4.9 $ 4.6 June 30, 2012,March 31, 2013, there was approximately $51.2$64.1 million of total unrecognized compensation cost related to non-vested stock options, RSUs and PSUs granted by Hertz Holdings under the Prior Plans and the Omnibus Plan. The total unrecognized compensation cost is expected to be recognized over the remaining 1.62.3 years, on a weighted average basis, of the requisite service period that began on the grant dates.10—11—Segment Information Three Months Ended June 30, Three Months Ended March 31, Revenues Adjusted Pre-Tax Income
(Loss) Revenues Adjusted Pre-Tax Income (Loss) 2012 2011 2012 2011 2013 2012 2013 2012 $ 1,889.6 $ 1,768.8 $ 277.4 $ 242.2 $ 2,084.8 $ 1,658.2 $ 208.4 $ 91.6 335.0 301.7 42.5 33.4 351.0 302.1 45.8 25.9 2,224.6 2,070.5 319.9 275.6 2,435.8 1,960.3 254.2 117.5 0.5 1.8 0.7 0.6 $ 2,225.1 $ 2,072.3 $ 2,436.5 $ 1,960.9 (86.0 ) (91.2 ) (109.7 ) (88.1 ) (29.0 ) (22.5 ) (33.7 ) (24.1 ) (20.6 ) (27.1 ) (17.3 ) (25.2 ) (16.1 ) (33.7 ) (3.7 ) (6.7 ) (5.0 ) (2.8 ) (4.2 ) (3.3 ) (10.8 ) — (4.5 ) (6.1 ) (2.6 ) (6.9 ) — 13.1 — (10.7 ) $ 158.7 $ 94.6 Income (loss) before income taxes $ 72.2 $ (36.8 ) HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)Unaudited(1) Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities. (2) Represents the purchase accounting effects of the Acquisition on our results of operations relating to increased depreciation and amortization of tangible and intangible assets and accretion of revalued workers' compensation and public liability and property damage liabilities. Also represents the purchase accounting effects of certain subsequent acquisitions on our results of operations relating to increased depreciation and amortization of tangible and intangible assets. (3) Represents non-cash debt charges relating to the amortization and write-off of deferred debt financing costs and debt discounts. (4) Represents incremental costs incurred directly supporting our business transformation initiatives. Such costs include transition costs incurred in connection with our business process outsourcing arrangements and incremental costs incurred to facilitate business process re-engineering initiatives that involve significant organization redesign and extensive operational process changes. (5) Primarily represents Dollar Thrifty related expenses and adjustments. Six Months Ended June 30, Revenues Adjusted Pre-Tax Income
(Loss) 2012 2011 2012 2011 $ 3,547.9 $ 3,279.1 $ 369.0 $ 303.5 637.1 569.9 68.4 43.6 4,185.0 3,849.0 437.4 347.1 1.1 3.3 $ 4,186.1 $ 3,852.3 (174.2 ) (178.7 ) (53.0 ) (43.1 ) (45.8 ) (87.0 ) (25.5 ) (38.4 ) (5.6 ) (3.3 ) (11.4 ) (9.0 ) — (2.5 ) — 13.1 — (62.4 ) $ 121.9 $ (64.2 ) (1)Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities.(2)Represents the purchase accounting effects of the Acquisition on our results of operations relating to increased depreciation and amortization of tangible and intangible assets and accretion of revalued workers' compensation and public liability and property damage liabilities. Also represents the purchase accounting effects of subsequent acquisitions on our results of operations relating to increased depreciation and amortization of tangible and intangible assets.(3)Represents non-cash debt charges relating to the amortization and write-off of deferred debt financing costs and debt discounts.(4)Represents incremental costs incurred directly supporting our business transformation initiatives. Such costs include transition costs incurred in connection with our business process outsourcing arrangements and incremental costs incurred to facilitate business process re-engineering initiatives that involve significant organization redesign and extensive operational process changes.(5)Represents a gain for the U.K. pension plan relating to unamortized prior service cost from a 2010 amendment that eliminated discretionary pension increases related to pre-1997 service primarily pertaining to inactive employees.(6)Represents premiums paid to redeem our 10.5% Senior Subordinated Notes and a portion of our 8.875% Senior Notes. $1,756.0$790.2 million from December 31, 20112012 to June 30, 2012.March 31, 2013. The increase was primarily related to increasesan increase in our car rental and equipment rental segments' revenue earning equipment, driven by increased volumes, partly offset by decreasesa decrease in our cash and cash equivalents, primarily relating to the redemption of our 8.875% Senior Notes and our 7.875% Senior Notes, restricted cash and cash equivalents and fleet receivables duewithin our car rental segment, primarily related to the timing of purchases and sales of revenue earning equipment.11—Total Equity12—Other Comprehensive Income (Loss) Common Stock Accumulated
Other
Comprehensive
Loss Preferred Stock Additional
Paid-In Capital Accumulated
Deficit Non-
Controlling
Interest Total
Equity (In Millions) Shares Amount $ — 417.0 $ 4.2 $ 3,206.0 $ (947.1 ) $ (28.4 ) $ — $ 2,234.7 36.6 36.6 (9.7 ) (9.7 ) 0.2 2.3 2.3 2.1 (20.0 ) (20.0 ) 15.0 15.0 1.0 5.7 5.7 1.3 1.3 $ — 420.3 $ 4.2 $ 3,210.3 $ (910.5 ) $ (38.1 ) $ — $ 2,265.9 Pension and Other Post-Employment Benefits Foreign Currency Items Unrealized Losses on Terminated Net Investment Hedges Other Accumulated Other Comprehensive Loss Balance at January 1, 2013 $ (109.8 ) $ 102.7 $ (19.4 ) $ (0.4 ) $ (26.9 ) Other comprehensive income (loss) before reclassification 0.5 (27.4 ) — (0.1 ) (26.9 ) Amounts reclassified from accumulated other comprehensive loss 2.6 — — — 2.6 Net current period other comprehensive income (loss) 3.2 (27.4 ) — (0.1 ) (24.3 ) Balance at March 31, 2013 $ (106.6 ) $ 75.3 $ (19.4 ) $ (0.5 ) $ (51.2 ) Common Stock Accumulated
Other
Comprehensive
Income (Loss) Preferred
Stock Additional
Paid-In
Capital Accumulated
Deficit Non-
Controlling
Interest Total
Equity (In Millions) Shares Amount $ — 413.5 $ 4.1 $ 3,183.2 $ (1,123.2 ) $ 37.8 $ 16.5 $ 2,118.4 (77.6 ) (77.6 ) 62.1 62.1 8.7 8.7 (10.5 ) (10.5 ) 0.1 2.0 2.0 1.2 (11.4 ) (11.4 ) 16.6 16.6 1.6 0.1 11.6 11.7 1.4 1.4 $ — 416.4 $ 4.2 $ 3,203.4 $ (1,200.8 ) $ 99.9 $ 14.7 $ 2,121.4 Pension and Other Post-Employment Benefits Foreign Currency Items Unrealized Losses on Terminated Net Investment Hedges Unrealized Gains on Available for Sale Securities Other Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2012 $ (99.6 ) $ 91.3 $ (19.4 ) $ 0.3 $ (1.0 ) $ (28.4 ) Other comprehensive income (loss) before reclassification — 29.6 — 3.1 (0.2 ) 32.5 Amounts reclassified from accumulated other comprehensive income (loss) (0.2 ) — — — — (0.2 ) Net current period Other comprehensive income (loss) (0.2 ) 29.6 — 3.1 (0.2 ) 32.3 Balance at March 31, 2012 $ (99.8 ) $ 120.9 $ (19.4 ) $ 3.4 $ (1.2 ) $ 3.9 Accumulatedlossincome (loss) to earnings during the three months ended March 31, 2013 and 2012 were as follows (in millions of June 30, 2012 and December 31, 2011 includes accumulated translation gains of $74.8 million and $91.3 million, respectively, pension benefits of $(96.0) million and $(99.6) million, respectively, unrealized losses on our Euro-denominated debt of $(19.4) million and $(19.4) million, respectively, unrealized holding gains of $3.4 million and $0.3 million, respectively, and other of $(0.9) million and $(1.0) million, respectively.dollars): Three months ended March 31, Statement of Operations Captions 2013 2012 Pension and other postretirement benefit plans Amortization of actuarial losses $ 4.3 $ (0.2 ) Selling, general and administrative Tax provision 1.7 — Net of tax $ 2.6 $ (0.2 ) HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)Unaudited12—13—Restructuring2011,2012, we announced several initiatives to improve our competitiveness and industry leadership through targeted job reductions. These initiatives included, but were not limited to, job reductions at our corporate headquarters and back-office operations in the U.S. and Europe. As part of our re-engineering optimization we outsourced selected functions globally. In addition, we streamlined operations and reduced costs by initiating the closure of targeted car rental locations and equipment rental branches throughout the world. The largest of these closures occurred in 2008 which resulted in closures of approximately 250 off-airport locations and 22 branches in our U.S. equipment rental business. These initiatives impacted approximately 8,9609,610 employees.and second quarter of 2012,2013, we continued to streamline operations and reduce costs with the closure of several car rental and equipment rental locations globally as well as a reduction in our workforce by approximately 65 employees and 280 employees, respectively.50 employees.June 30, 2012,March 31, 2013, we incurred $556.0$572.1 million ($273.3 ($285.8 million for our car rental segment, $228.2$230.8 million for our equipment rental segment and $54.5$55.5 million of other) of restructuring charges.developed,developed; however, we presently do not have firm plans or estimates of any related expenses. Three Months Ended
June 30, Six Months Ended
June 30, Three Months Ended
March 31, 2012 2011 2012 2011 2013 2012 $ 13.5 $ 3.4 $ 16.2 $ 4.4 $ 2.3 $ 2.7 — 0.3 — 0.3 0.4 0.2 0.6 0.3 0.3 0.2 — 22.6 2.7 23.3 2.2 6.9 6.0 10.0 1.1 3.8 — 0.3 — 0.1 $ 16.1 $ 33.7 $ 25.5 $ 38.4 $ 3.7 $ 6.7 HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)Unaudited Three Months Ended
June 30, Six Months Ended
June 30, Three Months Ended
March 31, 2012 2011 2012 2011 2013 2012 $ 7.0 $ 30.4 $ 14.6 $ 34.5 $ 1.4 $ 4.9 9.1 3.3 10.9 3.9 2.3 1.8 $ 16.1 $ 33.7 $ 25.5 $ 38.4 $ 3.7 $ 6.7 Three Months Ended
June 30, Six Months Ended
June 30, Three Months Ended
March 31, 2012 2011 2012 2011 2013 2012 $ 11.8 $ 3.5 $ 17.0 $ 4.5 $ 3.1 $ 3.5 2.5 29.8 6.7 33.6 0.5 3.2 1.8 0.4 1.8 0.3 0.1 — $ 16.1 $ 33.7 $ 25.5 $ 38.4 $ 3.7 $ 6.7 and six months ended June 30,March 31, 2013 and 2012, the after-tax effect of the restructuring charges decreased the incomediluted earnings per share by $0.02 and $0.04, respectively. During the three and six months ended June 30, 2011, the after-tax effect of the restructuring charges decreased the income per share by $0.05$0.01 and increased the diluted loss per share by $0.06,$0.02 respectively.sixthree months ended June 30, 2012March 31, 2013 (in millions of dollars). We expect to pay the remaining restructuring obligations relating to termination benefits over the next twelve months. The remainder of the restructuring accrual relates to future lease obligations which will be paid over the remaining term of the applicable leases. Termination
Benefits Pension
and Post
Retirement
Expense Consultant
Costs Other Total $ 9.1 $ 0.2 $ 0.6 $ 11.7 $ 21.6 16.2 — 0.6 8.7 25.5 (8.4 ) — (0.7 ) (1.8 ) (10.9 ) 0.2 — (0.1 ) (8.8 ) (8.7 ) $ 17.1 $ 0.2 $ 0.4 $ 9.8 $ 27.5 (1)Consists of decreases of $6.2 million for facility closures and $2.7 million for asset writedowns, partly offset by an increase of $0.2 million due to foreign currency translation.Note 13—Financial InstrumentsCash and Cash Equivalents and Restricted Cash and Cash EquivalentsFair value approximates the amount indicated on the balance sheet at June 30, 2012 and December 31, 2011 because of the short-term maturity of these instruments. Money market accounts, whose fair value at June 30, 2012, is measured using Level 1 inputs, totaling $273.2 million and $118.6 million areUnauditedincluded in "Cash and cash equivalents" and "Restricted cash and cash equivalents," respectively. Money market accounts, whose fair value at December 31, 2011, is measured using Level 1 inputs, totaling $566.0 million and $142.9 million are included in "Cash and cash equivalents" and "Restricted cash and cash equivalents," respectively.Marketable SecuritiesMarketable securities held by us consist of equity securities classified as available-for-sale, which are carried at fair value and are included within "Prepaid expenses and other assets." Unrealized gains and losses, net of related income taxes, are included in "Accumulated other comprehensive loss." As of June 30, 2012 and December 31, 2011, the fair value of marketable securities was $38.3 million and $33.2 million, respectively. For the three and six months ended June, 30, 2012, unrealized gains of $0.1 million and $5.1 million, respectively, were recorded in "Accumulated other comprehensive loss." For the three and six months ended June, 30, 2011, unrealized gains of $2.0 million and $2.0 million, respectively, were recorded in "Accumulated other comprehensive loss." Fair values for marketable securities are based on Level 1 inputs consisting of quoted market prices.DebtFor borrowings with an initial maturity of 93 days or less, fair value approximates carrying value because of the short-term nature of these instruments. For all other debt, fair value is estimated based on quoted market rates as well as borrowing rates currently available to us for loans with similar terms and average maturities (Level 2 inputs). The aggregate fair value of all debt at June 30, 2012 was $13,151.6 million, compared to its aggregate unpaid principal balance of $12,526.2 million. The aggregate fair value of all debt at December 31, 2011 was $11,832.5 million, compared to its aggregate unpaid principal balance of $11,400.3 million.Derivative Instruments and Hedging ActivitiesThe following table summarizes our financial assets and liabilities measured at fair value on a recurring basis (in millions of dollars): Fair Value of Derivative Instruments(1) Asset Derivatives(2) Liability Derivatives(2) June 30,
2012 December 31,
2011 June 30,
2012 December 31,
2011 $ — $ — $ 2.7 $ 0.4 — 0.5 — 0.4 6.4 4.4 1.0 1.9 — — 0.1 0.2 0.1 0.1 — — $ 6.5 $ 5.0 $ 3.8 $ 2.9 (1)All fair value measurements were primarily based upon significant observable (Level 2) inputs.Unaudited(2)All asset derivatives are recorded in "Prepaid expenses and other assets" and all liability derivatives are recorded in "Accrued liabilities" on our condensed consolidated balance sheets.HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)Unaudited Location of Gain or (Loss)
Recognized on Derivatives Amount of Gain or
(Loss) Recognized in
Income on Derivatives Three Months Ended
June 30, 2012 2011 Direct operating $ (3.3 ) $ (0.2 ) Selling, general and administrative (0.1 ) — Selling, general and administrative (7.7 ) (7.3 ) Selling, general and administrative 0.1 — $ (11.0 ) $ (7.5 ) Other Total Balance as of January 1, 2013 $ 12.4 $ 0.2 $ 0.3 $ 8.1 $ 21.0 Charges incurred 2.3 — 0.3 1.1 3.7 Cash payments (5.7 ) — (0.4 ) (0.8 ) (6.9 ) (0.3 ) — — (1.3 ) (1.6 ) Balance as of March 31, 2013 $ 8.7 $ 0.2 $ 0.2 $ 7.1 $ 16.2 (1) Location of Gain or (Loss)
Recognized on Derivatives Amount of Gain or
(Loss) Recognized in
Income on Derivatives Six Months Ended
June 30, 2012 2011 Direct operating $ (1.5 ) $ 2.9 Selling, general and administrative (0.1 ) — Selling, general and administrative (5.6 ) (7.9 ) Selling, general and administrative 0.1 — $ (7.1 ) $ (5.0 ) In conjunction with the refinanced Series 2009-1 and the Series 2010-2, HVF purchased an interest rate cap for $6.7 million, with a maximum notional amount equal to the refinanced Series 2009-1 and the Series 2010-2 with a combined maximum principal amount of $2.1 billion, a strike rate of 5% and expected maturity date of March 25, 2013. Additionally, Hertz sold a 5% interest rate cap for $6.2 million, with a matching notional amount and term to the HVF interest rate cap. In March 2012, an additional $250 million of the Series 2009-1 notes was issued, for which HVF and Hertz amended their interest rate cap agreements to increase the maximum notional amounts by $250 million. Also, in December 2010, the Australian Securitization was completed and our Australian operating subsidiary purchased an interest rate cap for $0.5 million, with a maximum notional amount equal to the Australian Securitization maximum principal amount of A$250 million, a strike rate of 7% and expected maturity date of December 2012. Additionally, Hertz sold a 7% interest rate cap for $0.4 million with a matching notional amount and term to the Australian operating subsidiary's interest rate cap. The fair values of all interest rate caps were calculated using a discounted cash flow method and applying observable market data (i.e. the 1-month LIBOR yield curve and credit default swap spreads). Gains and losses resulting from changes in the fair value of these interest rate caps are included in our results of operations in the periods incurred.In connection with our acquisition of Donlen, we acquired interest rate swaps with a total notional amount of $23.2 million at June 30, 2012, associated with floating rate debt. These interest rate swapsHERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)Unauditedare used to effectively convert an amount of floating rate debt into fixed rate debt. The fair values of these interest rate swaps were calculated using a discounted cash flow method and applying observable market data (i.e. the 1-month LIBOR yield curve). Gains and losses resulting from changes in the fair value of these interest rate swaps are included in our results of operations in the periods incurred (in Selling, general and administrative).May 2013.July 2014. We presently hedge a portion of our overall unleaded gasoline and diesel fuel purchases with commodity swaps and have contracts in place that settle on a monthly basis. As of June 30, 2012, our outstanding commodity instruments for unleaded gasoline and diesel fuel totaled approximately 5.1 million gallons and 0.3 million gallons, respectively. The fair value of these commodity instruments was calculated using a discounted cash flow method and applying observable market data (including NYMEX RBOB Gasoline and U.S. Department of Energy surveys). Gains and losses resulting from changes in the fair value of these commodity instruments are included in our results of operations in the periods incurred.locally.for working capital needs. Also, we have purchased foreign exchange options to manage exposure to fluctuations in foreign exchange rates for selected marketing programs. The effect of exchange rate changes on these financial instruments would not materially affect our consolidated financial position, results of operations or cash flows. Our risks with respect to foreign exchange options are limited to the premium paid for the right to exercise the option and the future performance of the option'soption's counterparty. Premiums paid for options outstanding astransactions to financial institutions that have strong credit ratings. As of June 30, 2012 and December 31, 2011, the total notional amount of these foreign exchange options was $7.5 million and $9.1 million, respectively. As of June 30, 2012, these foreign exchange options mature through April 2013. Theestimated fair value of derivatives (in millions of dollars): March 31,
2013 December 31,
2012 March 31,
2013 December 31,
2012Derivatives not designated as hedging instruments under ASC 815: Gasoline swaps $ 1.6 $ — $ — $ 0.1 Interest rate caps 0.8 0.9 0.8 0.9 Foreign exchange forward contracts 2.7 3.4 4.4 4.5 Foreign exchange options 0.1 0.2 — — Total derivatives not designated as hedging instruments under ASC 815 $ 5.2 $ 4.5 $ 5.2 $ 5.5 (1) All fair value measurements were primarily based upon significant observable (Level 2) inputs. (2) All asset derivatives are recorded in "Prepaid expenses and other assets" and all liability derivatives are recorded in "Accrued liabilities" on our condensed consolidated balance sheets. foreign exchange options was calculated using a discounted cash flow methodgains and applying observable market data (i.e. foreign currency exchange rates). Gains and losses resulting from changes in the fair value(losses) of these options are included inderivatives (in millions of dollars): Three Months Ended
March 31, 2013 2012 Derivatives not designated as hedging instruments under ASC 815: Gasoline swaps Direct operating $ 1.7 $ 1.8 Interest rate caps Selling, general and administrative 0.1 — Foreign exchange forward contracts Selling, general and administrative 4.1 (5.4 ) Foreign exchange options Selling, general and administrative (0.1 ) — Total $ 5.8 $ (3.6 ) results of operations in the periods incurred.We also manage exposure to fluctuations in currency risk on intercompany loans we make to certain of our subsidiaries by entering intofuel derivatives, interest rate caps, foreign currency forward contracts and foreign exchange options are subject to enforceable master netting agreements with their counterparties, we do not offset the derivative assets and liabilities in our Condensed Consolidated Balance Sheets. The impact of offsetting derivative instruments is depicted below (in millions of dollars):As of March 31, 2013: Gross assets not offset in Balance Sheet Gross assets Gross assets offset in Balance Sheet Net recognized assets in Balance Sheet Financial Instruments Cash Collateral Net Amount Gasoline swap $ 1.6 $ — $ 1.6 $ — $ — $ 1.6 Interest rate caps 0.8 — 0.8 — — 0.8 Foreign exchange forward contracts 2.7 — 2.7 — — 2.7 Foreign exchange options 0.1 — 0.1 — — 0.1 Total $ 5.2 $ — $ 5.2 $ — $ — $ 5.2 Gross liabilities not offset in Balance Sheet Gross liabilities Gross liabilities offset in Balance Sheet Net recognized liabilities in Balance Sheet Financial Instruments Cash Collateral Net Amount Interest rate caps $ 0.8 $ — $ 0.8 $ — $ — $ 0.8 Foreign exchange forward contracts 4.4 — 4.4 — — 4.4 Total $ 5.2 $ — $ 5.2 $ — $ — $ 5.2 As of December 31, 2012: Gross assets not offset in Balance Sheet Gross assets Gross assets offset in Balance Sheet Net recognized assets in Balance Sheet Financial Instruments Cash Collateral Net Amount Interest rate caps $ 0.9 $ — $ 0.9 $ — $ — $ 0.9 Foreign exchange forward contracts 3.4 — 3.4 — — 3.4 Foreign exchange options 0.2 — 0.2 — — 0.2 Total $ 4.5 $ — $ 4.5 $ — $ — $ 4.5 Gross liabilities not offset in Balance Sheet Gross liabilities Gross liabilities offset in Balance Sheet Net recognized liabilities in Balance Sheet Financial Instruments Cash Collateral Net Amount Gasoline swaps $ 0.1 $ — $ 0.1 $ — $ — $ 0.1 Interest rate caps 0.9 — 0.9 — — 0.9 Foreign exchange forward contracts 4.5 — 4.5 — — 4.5 Total $ 5.5 $ — $ 5.5 $ — $ — $ 5.5 timemeasurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and we consider assumptions that market participants would use when pricing the asset or liability. March 31, 2013 Fair Value Measurements Using Total Quoted Prices in Active Markets
for Identical
Instruments
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)Prepaid Expenses and Other Current Assets: Gasoline swaps $ 1.6 $ — $ 1.6 $ — Interest rate caps 0.8 — 0.8 — Foreign currency forward contracts 2.7 — 2.7 — Foreign exchange options 0.1 — 0.1 — Total $ 5.2 $ — $ 5.2 $ — Other Current Liabilities: Interest rate caps $ 0.8 $ — $ 0.8 $ — Foreign currency forward contracts 4.4 — 4.4 — Total $ 5.2 $ — $ 5.2 $ — December 31, 2012 Fair Value Measurements Using Total Quoted Prices in Active Markets
for Identical
Instruments
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)Prepaid Expenses and Other Current Assets: Interest rate caps $ 0.9 $ — $ 0.9 $ — Foreign currency forward contracts 3.4 — 3.4 — Foreign exchange options 0.2 — 0.2 — Total $ 4.5 $ — $ 4.5 $ — Other Current Liabilities: Gasoline swaps $ 0.1 $ — $ 0.1 $ — Interest rate caps 0.9 — 0.9 — Foreign currency forward contracts 4.5 — 4.5 — Total $ 5.5 $ — $ 5.5 $ — loans which are intended to offset the impact of foreign currency movements on the underlying intercompany loan obligations. As of June 30, 2012, the total notional amountshort-term nature of these forward contracts was $780.8 million, maturing within two months.instruments.these foreign currency forward contractsall debt at March 31, 2013 was calculated based on foreign currency forward exchange rates.$17,700.5 million, compared to its aggregate unpaid principal balance of $16,337.0 million. The aggregate fair value of all debt at December 31, 2012 was $16,493.1 million, compared to its aggregate unpaid principal balance of $15,473.8 million.14—15—Related Party Transactionssixthree months ended June 30, 2012,March 31, 2013, there were no material changes to our relationship with Hertz Investors, Inc. or the Sponsors.Table60,050,777 shares of Contentstheir Hertz Holdings common stock to Citigroup Global Markets Inc. and Barclays Capital Inc. as the underwriters in the registered public offering of those shares. In connection with the offering, Hertz Holdings repurchased from the underwriters HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES23,200,000NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued) of the Unaudited60,050,777Affiliates of MLGPE (which is one of the Sponsors), including Bank of America and certain of its affiliates, have provided various investment and commercial banking and financial advisory services to us for which they have received customary fees and commissions. In addition, these parties have acted as agents, lenders, purchasers and/or underwriters to us under our respective financing arrangements, for which they have received customary fees, commissions, expenses and/or other compensation. More specifically, these parties have acted in the following capacities, or similar capacities, with respect to our financing arrangements: lenders and/or agents under the Senior Credit Facilities, the U.S. Fleet Financing Facility and certain of the U.S. Fleet Variable Funding Notes; purchasers and/or underwriters under the Senior Notes and certain of the U.S. Fleet Medium Term Notes; and structuring advisors and/or agents under the U.S. ABS Program.June 30, 2012March 31, 2013 and December 31, 2011,2012, approximately $174$192.8 million and $174$189.8 million, respectively, of our outstanding debt was with related parties.7—8—Debt.15—16—Contingencies and Off-Balance Sheet CommitmentsJune 30, 2012March 31, 2013 and December 31, 2011,2012, the following guarantees (including indemnification commitments) were issued and outstanding.
EnvironmentalTable of ContentsHERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)UnauditedEnvironmentalJune 30, 2012March 31, 2013 and December 31, 2011,2012, the aggregate amounts accrued for environmental liabilities including liability for environmental indemnities, reflected in our condensed consolidated balance sheets in "Accrued liabilities" were $1.4$2.6 million and $1.5$2.6 million, respectively. The accrual generally represents the estimated cost to study potential environmental issues at sites deemed to require investigation or clean-up activities, and the estimated cost to implement remediation actions, including on-going maintenance, as required. Cost estimates are developed by site. Initial cost estimates are based on historical experience at similar sites and are refined over time on the basis of in-depth studies of the sites. For many sites, the remediation costs and other damages for which we ultimately may be responsible cannot be reasonably estimated because of uncertainties with respect to factors such as our connection to the site, the materials there, the involvement of other potentially responsible parties, the application of laws and other standards or regulations, site conditions, and the nature and scope of investigations, studies, and remediation to be undertaken (including the technologies to be required and the extent, duration, and success of remediation).June 30, 2012March 31, 2013 and December 31, 20112012 our liability recorded for public liability and property damage matters was $270.6$321.0 million and $281.5$332.2 million, respectively. We believe that our analysis is based on the most relevant information available, combined with reasonable assumptions, and that we may prudently rely on this information to determine the estimated liability. We note the liability is subject to significant uncertainties. The adequacy of the liability reserve is regularly monitored based on evolving accident claim history and insurance related state legislation changes. If our estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results.1112 of the Notes to our audited annual consolidated financial statements included in our Form 10-K under the caption "Item 8—Financial Statements and Supplementary Data."June 2012, inDavis Landscape, Ltd. et al. v. Hertz Equipment Rental Corporation, the judge denied our motion for partial summary judgment onparties executed a settlement agreement in March 2013 and thereafter sought preliminary approval from the Loss Damage Waiver claimcourt of the proposed class settlement. The court has now tentatively approved the proposed class settlement, approved the parties' notice plan and in July 2012, the judgehas set June 18,granted our motionpartial summary judgment on the Environmental Recovery Fee claim. The court also entered an order referring the case to mediation by private consent of the parties.In May 2012, all briefing was completed inJanet Sobel and Daniel Dugan, PhD., individually and on behalf of all others similarly situated v. The Hertz Corporation on the two outstanding issues—unjust enrichment and damages. The briefing included expert reports as submitted by both sides.In May 2012, inMichael Shames et al. v. The Hertz Corporation et al., the district court issued an order preliminarily approving the settlement of this action; certifying a settlement class; certifying a class representative and lead counsel; and providing for class notice. The court also scheduled a final approval hearing for October 29, 2012.hearing. We have accrued our best estimate of the ultimate cost, which is not material to our financial condition.In June 2012, a mediation was held inOn October 13, 2006, Fun Services of Kansas City, Inc.,Janet Sobel, Daniel Dugan, PhD. and Lydia Lee, individually and on behalf of all others similarly situated v. The Hertz Corporation and Enterprise Rent-A-Car Company, was filed in the United States District Court for the District of Nevada. Enterprise is now a defendant in a separate action and is no longer a defendant in the Sobel case. The Sobel case purports to be a nationwide class action on behalf of all persons who rented cars from Hertz at airports in Nevada and were separately charged airport concession recovery fees by Hertz as part of their rental charges. In the representativecomplaint, the plaintiffs seek an unspecified amount of compensatory damages, restitution of any charges found to be improper and an injunction prohibiting Hertz from quoting or charging those airport fees that are alleged not to be allowed by Nevada law. The complaint also seeks attorneys' fees and costs. In 2010, the parties engaged in mediation which resulted in a proposed settlement. Although the court tentatively approved the settlement in November 2010, the court denied the plaintiffs' motion for final approval of the proposed settlement in May 2011. Following additional activity in the case, in March 2013, the court granted, in part, the plaintiffs' motion for partial summary judgment with respect to restitution and granted the plaintiffs' motion for class certification, while denying the Company's motion for partial summary judgment. The court further indicated that plaintiffs are entitled to prejudgment interest from the date of the plaintiffs' first amended complaint. A judgment has not yet been entered in the case, and there are expected to be further proceedings before the district court. The amount of a judgment could potentially exceed $40.0 million. The Company intends to appeal or seek other appropriate relief and believes that the court's liability, damages and class certification findings will be reversed. We continue to believe the outcome of similarly-situated persons v. Hertz Equipment Rental Corporation. As a result of the mediation, the parties have reached an agreement in principle to settle this class action. A draft settlement agreement that addresses compensation to class members, class counsel fees and the claims process, and which wouldcase will not be subject to court approval, is being finalized by the parties' counsel. We have accrued our best estimate of the ultimate cost which is not material to our financial condition.condition, results of operations or cash flows.As previously disclosed, on June 15, 2011 we received a subpoena from the staff of the Securities and Exchange Commission, or "SEC," seeking production of documents related to our proposed business combination with Dollar Thrifty Automotive Group, Inc. We are cooperating fully with the SEC's investigation. We do not expect this investigation to have any effect on a proposed business combination with Dollar Thrifty.Securities and Exchange Commission,SEC, various other legal actions, claims and governmental inquiries and proceedings are pending or may be instituted or asserted in the future against us and our subsidiaries. Other than with respect to the aggregate claims for public liability and property damage pending against us, management, based on the advice of legal counsel, does not believe that any of the matters resolved, or pending against us, are material to us and our subsidiaries taken as a whole.Securities and Exchange Commission,SEC, could be decided unfavorably to us or any of our subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to our consolidated financial condition, results of operations or cash flows in any particular reporting period.HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)Unaudited16—17—Earnings (Loss) Per Sharelossearnings (loss) per share (in millions, of dollars, except per share amounts): Three Months Ended
June 30, Six Months Ended
June 30, Three Months Ended
March 31, 2012 2011 2012 2011 2013 2012 $ 92.9 $ 55.0 $ 36.6 $ (77.6 ) Net income (loss) attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders, basic $ 18.0 $ (56.3 ) Interest on Convertible Senior Notes, net of tax 1.0 — Net income (loss) attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders, diluted $ 19.0 $ (56.3 ) 420.0 415.9 419.1 415.0 415.8 418.1 4.4 8.3 5.5 — 6.6 — 23.0 27.6 23.3 — 38.4 — 447.4 451.8 447.9 415.0 460.9 418.1 $ 0.22 $ 0.13 $ 0.09 $ (0.19 ) $ 0.04 $ (0.13 ) $ 0.21 $ 0.12 $ 0.08 $ (0.19 ) $ 0.04 $ (0.13 ) and six months ended June 30,March 31, 2012 excluded the weighted-average impact of the assumed exercise of approximately 4.619.4 million shares of stock options, RSUs and PSUs, because such impact would be antidilutive. Diluted (loss) per share computations forcomputation. The numerator was adjusted to add back the three and six months ended June 30, 2011 excludedafter-tax amount of interest recognized in the weighted-average impact of the assumed exercise of approximately 5.0 million and 21.2 million shares, respectively, of stock options, RSUs and PSUs, because such impact would be antidilutive. Additionally, for the six months ended June 30, 2011, there was no impact to the diluted earnings (loss) per share computationsperiod associated with the outstanding Convertible Senior Notes because such impact would be anti-dilutive.17—18—Subsequent EventsJuly 2012,April 2013, Hertz amendedentered into an Amendment No. 2, or "Amendment No. 2," to the Donlen GN II Variable Funding NotesSenior Term Facility, primarily to permit aggregate maximum borrowingsreduce the interest rate applicable to a portion of $1.0 billion (subjectthe outstanding term loans under the Senior Term Facility. Prior to Amendment No. 2, approximately $1,372.0 million of tranche B term loans, or “Tranche B Term Loans”, under the Senior Term Facility bore interest at a floating rate measured by reference to, at Hertz's option, either (i) an adjusted London inter-bank offered rate not less than 1.00 percent plus a borrowing base availability) and to extend the maturity date from August 2012 to December 2012.In July 2012, Hertz amended the European Securitization to extend the maturity date from July 2013 to July 2014. Operations2011,2012, filed with the SEC, on February 27, 2012,March 4, 2013, or our "Form 10-K" and the following:•obtain regulatory approval for and to consummate an acquisitionintegrate the car rental operations of Dollar Thrifty Automotive Group, Inc., or "Dollar Thrifty";•the risk that expected synergies,Thrifty," and realize operational efficiencies and cost savings from an acquisition of Dollar Thrifty may not be fully realized or realized within the expected time frame;•may be requiredwe agreed to be undertakenundertake in order to secure regulatory approval for anthe acquisition of Dollar Thrifty;ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)•••••••••••••••••••••••ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)•••"CD“CD&R,"•"Carlyle,"“Carlyle,” and•Global Private Equity,& Co., Inc., or "MLGPE,"Merrill Lynch," In January 2009, Bank of America Corporation, or "Bank of America," acquired Merrill Lynch & Co., Inc., the former parent company of MLGPE. Accordingly, Bank of America is now an indirect beneficial owner of our common stock held by the investment funds associated with MLGPE. We refer to CD&R, Carlyle and MLGPE collectively as the "Sponsors." We refer to the acquisition of all of Hertz's common stock by the Sponsors as the "Acquisition."and subsequent offerings and share repurchase, the Sponsors' holdings represent approximately 38%12.5% of the outstanding shares of common stock of Hertz Holdings as of June 30, 2012.•••licensees)licensees and from Adreca Holdings Corp. for the sublease of vehicles).ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)••••June 30,March 31, 2013, the percentage of non-program cars was 96% as compared to 84% as of March 31, 2012. Internationally, as of March 31, 2013, the percentage of non-program cars was 72%, compared to 75% as of March 31, 2012. In the U.S., as of December 31, 2012, the percentage of non-program cars was 83%95% as compared to 68%83% as of June 30,December 31, 2011. Internationally, as of June 30,December 31, 2012, the percentage of non-program cars was 65%79%, compared to 58% as of June 30, 2011. In the U.S.,75% as of December 31, 2011, the percentage of non-program cars was 79% as compared to 72% as of December 31, 2010. Internationally, as of December 31, 2011, the percentage of non-program cars was 75%, compared to 70% as of December 31, 2010.fleet.fleet and we expect this percentage to remain stable in the future, particularly as we integrate the operations of Dollar Thrifty, which operated a lower percentage of program cars than Hertz immediately prior to our completion of the acquisition of Dollar Thrifty. Non-program cars typically have lower acquisition costs and lower depreciation rates than comparable program cars. As a result of decreasing our reliance on program cars, we reduce our risk related to the creditworthiness of the vehicle manufacturers. With fewer program cars in our fleet, we have an increased risk that the market value of a car at the time of its disposition will be less than its estimated residual value. However, non-program cars allow us the opportunity for ancillary revenue, such as warranty and financing, during disposition. Program cars generally provide us with flexibility to reduce the size of our fleet by returning cars sooner than originally expected without risk of loss in the event of an economic downturn or to respond to changes in rental demand. This flexibility is reduced as the percentage of non-program cars in our car rental fleet increases. Furthermore, it is expected that the average age of our fleet will increase since the average holding period for non-program vehicles is longer than program vehicles. However, the longer holding period does not necessarily equate to higher costs due to the stringent turnback requirements imposed by vehicle manufacturers for program cars.sixthree months ended June 30, 2012,March 31, 2013, our monthly per vehicle depreciation costs decreased as compared to the prior year period due to improved residual values in the U.S., a continued move towards a greater proportion of non-program vehicles, mix optimization and improved procurement and remarketing efforts.sixthree months ended June 30, 2012,March 31, 2013, depreciation rates being used to compute the provision forITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)$37.1 and $37.3 million in depreciation expense for the three and six months ended June 30, 2012, respectively.June 30,March 31, 2013 and 2012, and 2011, our worldwide car rental operations sold approximately 41,20075,400 and 42,80043,000 non-program cars, respectively, a 3.8% year over year decrease. The year over year decrease was primarily due to the impact of the events in Japan last year. For the six months ended June 30, 2012 and 2011, our worldwide car rental operations sold approximately 83,600 and 74,900 non-program cars, respectively, an 11.6%75.4% year over year increase. The year over year increase was primarily due to an overall increase in the number of cars in the fleet, an increase in the percentage ofcontinued shift from program to non-program cars, and a robust used car market. We believe the residual values havevehicles. In addition, residuals remained fairly strong primarily due to continued short supply of vehicle inventory and aided by strong new vehicle sales.sixthree months ended June 30, 2012,March 31, 2013, we experienced a 9.9%31.7% and 4.8% increase in transaction days versus the prior period in the United States while rental rateand total revenue per transaction day, or "RPD,"total RPD," declined by 3.7%.respectively, versus the prior year period in the United States. During the sixthree months ended June 30, 2012,March 31, 2013, in our European operations, we experienced a 2.5%1.7% decline in transaction days and a 3.2%3.0% decline in total RPD when compared to the sixthree months ended June 30, 2011.$608.9$320.4 million and $551.2$283.9 million of our total car rental revenues in the sixthree months ended June 30,March 31, 2013 and 2012, and 2011, respectively. As of June 30, 2012,March 31, 2013, we have approximately 2,3502,574 off-airport locations. Our strategy includes selected openings of new off-airport locations, the disciplined evaluation of existing locations and the pursuit of same-store sales growth. Our strategy also includes increasing penetration in the off-airport market and growing the online leisure market, particularly in the longer length weekly sector, which is characterized by lower vehicle costs and lower transaction costs at a lower total RPD. Increasing our penetration in these sectors is consistent with our long-term strategy to generate profitable growth. When we open a new off-airport location, we incur a number of costs, including those relating to site selection, lease negotiation, recruitment of employees, selection and development of managers, initial sales activities and integration of our systems with those of the companies who will reimburse the location's replacement renters for their rentals. A new off-airport location, once opened, takes time to generate its full potential revenues and, as a result, revenues at new locations do not initially cover their start-up costs and often do not, for some time, cover the costs of their ongoing operations.On September 1, 2011, Hertz acquired 100% of the equity interest in Donlen, a leading provider of fleet leasing and management services for corporate fleets. and six months ended June 30,March 31, 2013 and 2012, Donlen had an average of approximately 146,100165,600 vehicles and 143,800141,500 vehicles, respectively, under lease and management. Donlen provides Hertz an immediate leadership position in long-term car, truck and equipment leasing and fleet management. Donlen's fleet management programs provide outsourced solutions to reduce fleet operating costs and improve driver productivity. These programs include Additionally, Donlen brings to Hertz a specialized consulting and technology expertise that will enable us to model, measure and manage fleet performance more effectively and efficiently.June 30, 2012,March 31, 2013, our worldwide car rental operations had a total of approximately 8,76010,460 corporate and licensee locations in approximately 150 countries in North America, Europe, Latin America, Asia, Australia, Africa, the Middle East and New Zealand.TableOn November 19, 2012, Hertz acquired 100% of ContentsITEM 2. Management's Discussion and Analysisthe equity of Financial Condition and Results of Operations (Continued)While Hertz Holdings withdrew its exchange offer for Dollar Thrifty's common stock in October 2011, we continue to believe that a merger with Dollar Thrifty, isa car and truck rental and leasing business. As of March 31, 2013, Dollar Thrifty had approximately 280 corporate locations in the best interests of both companies. We remain engagedUnited States and Canada, with the Federal Trade Commissionapproximately 5,800 employees located mainly in North America. In addition to secure antitrust clearance to potentially acquireits corporate operations, Dollar Thrifty which would require (among other things) the divestiture of our Advantage business, which would be sold at a loss. We can offer no assurance that any transaction withhad approximately 1,220 franchise locations in 85 countries. Dollar Thrifty will be commenced or consummated.sixthe three months ended June 30, 2012March 31, 2013 compared to the prior year period as the industry continued its recovery in North America. The recovery has been led by strong industrial performance, especially oil and gas related, and improvement in the construction sector in part reflecting higher rental penetration. We continued to see growth in our specialty services such as Pump & Power, Industrial Plant Services and Hertz Entertainment Services. Additionally, there continuescontinue to be opportunities for the remainder of 20122013 as the uncertain economic outlook makes rental solutions attractive to customers.June 30, 2012,March 31, 2013, HERC had a total of approximately 330340 branches in the U.S., Canada, France, Spain, China and Saudi Arabia.Restructuringand second quarter of 2012,2013, we continued to streamline operations and reduce costs with the closure of several car rental and equipment rental locations globally as well as a reduction in our workforce by approximately 65 employees and 280 employees, respectively.and six months ended June 30,March 31, 2013 and 2012, our consolidated statement of operations includes restructuring charges of $16.1$3.7 million and $25.5$6.7 million, respectively. For the three and six months ended June 30, 2011, our consolidated statement of operations includes restructuring charges of $33.7 million and $38.4 million, respectively.developed,developed; however, we presently do not have firm plans or estimates of any related expenses. See Note 1213 to the Notes to our condensed consolidated financial statements included in this Report.June 30, 2012March 31, 2013 Compared with Three Months Ended June 30, 2011June 30,March 31, 2013 and 2012 and 2011 (in millions of dollars): Percentage of Revenues Percentage of Revenues Three Months Ended
June 30, Three Months Ended
June 30, Three Months Ended
March 31, Three Months Ended
March 31, 2012 2011 2012 2011 2013 2012 2013 2012 $ 1,849.3 $ 1,731.2 83.1 % 83.5 % $ 2,006.8 $ 1,623.2 82.4 % 82.8 % 334.2 301.6 15.0 14.6 350.5 301.3 14.4 15.4 41.6 39.5 1.9 1.9 79.2 36.4 3.2 1.8 2,225.1 2,072.3 100.0 100.0 2,436.5 1,960.9 100.0 100.0 1,188.9 1,187.3 53.4 57.3 1,351.2 1,114.1 55.5 56.8 519.8 419.7 23.4 20.3 587.0 515.1 24.1 26.3 206.6 195.6 9.3 9.4 251.7 207.8 10.3 10.6 152.2 165.8 6.8 8.0 176.8 162.3 7.2 8.3 (0.5 ) (1.5 ) — (0.1 ) (1.8 ) (1.1 ) (0.1 ) (0.1 ) (0.6 ) 10.8 — 0.5 Other income, net (0.6 ) (0.5 ) — — 2,066.4 1,977.7 92.9 95.4 2,364.3 1,997.7 97.0 101.9 158.7 94.6 7.1 4.6 Income (loss) before income taxes 72.2 (36.8 ) 3.0 (1.9 ) (65.8 ) (34.5 ) (2.9 ) (1.7 ) (54.2 ) (19.5 ) (2.3 ) (1.0 ) 92.9 60.1 4.2 2.9 — (5.1 ) — (0.2 ) $ 92.9 $ 55.0 4.2 % 2.7 % Net income (loss) attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders $ 18.0 $ (56.3 ) 0.7 % (2.9 )% June 30, 2012March 31, 2013 and 2011:2012: Three Months Ended
or as of March 31, 2013 2012 Selected Car Rental Operating Data: Worldwide number of transactions (in thousands) 7,694 6,388 Domestic (Hertz, Dollar and Thrifty) 6,100 4,837 International (Hertz, Dollar and Thrifty) 1,594 1,551 39,070 31,669 Domestic (Hertz, Dollar and Thrifty) 30,064 22,825 International (Hertz, Dollar and Thrifty) 9,006 8,844 $ 50.14 $ 48.85 Domestic (Hertz, Dollar and Thrifty) $ 49.35 $ 47.09 International (Hertz, Dollar and Thrifty) $ 52.76 $ 53.41 Worldwide average number of cars during the period 757,100 594,800 Domestic (Hertz, Dollar and Thrifty company-operated) 432,900 320,500 Domestic and International (Leased) 24,800 — International (Hertz, Dollar and Thrifty company-operated) 133,800 132,800 Donlen (under lease and maintenance) 165,600 141,500 $ 208.4 $ 91.6 Worldwide revenue earning equipment, net (in millions of dollars) $ 11,699.7 $ 9,354.1 Selected Worldwide Equipment Rental Operating Data: $ 322.1 $ 274.3 12.9 % 8.9 % Average acquisition cost of rental equipment operated during the period (in millions of dollars) $ 3,273.5 $ 2,902.0 $ 45.8 $ 25.9 Revenue earning equipment, net (in millions of dollars) $ 2,269.5 $ 1,911.1 Three Months Ended
or as of June 30, 2012 2011 7,517 7,146 5,620 5,255 1,897 1,891 37,256 34,826 26,312 23,889 10,944 10,937 $ 39.50 $ 40.87 $ 38.10 $ 39.32 $ 42.85 $ 44.25 656,200 487,300 353,100 328,200 157,000 159,100 146,100 N/A $ 277.4 $ 242.2 $ 10,408.0 $ 9,522.7 $ 303.0 $ 266.1 7.3 % 10.4 % $ 3,003.6 $ 2,778.8 $ 42.5 $ 33.4 $ 2,030.0 $ 1,702.7 (a) Transaction days represent the total number of days that vehicles were on rent in a given period. (b) Car rental revenue consists of all revenue, net of discounts, associated with the rental of cars including charges for optional insurance products, but excluding non-rental revenues derived from Donlen. Total revenue per transaction day is calculated as total rental revenue, divided by the total number of transaction days, with all periods adjusted to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends. This statistic is important to our management and investors as it represents the best measurement of the changes in underlying pricing in the car rental business and encompasses the elements in car rental pricing that management has the ability to control. The following table reconciles our car rental segment revenues to our rental revenue and rental revenue per transaction day (based on December 31, 2012 foreign exchange rates) for the three months ended March 31, 2013 and 2012 (in millions of dollars, except as noted): Three Months Ended
March 31, 2013 2012 Car rental segment revenues $ 2,084.8 $ 1,658.2 Non-rental revenue (127.8 ) (110.4 ) Foreign currency adjustment 1.9 (0.8 ) Total rental revenue $ 1,958.9 $ 1,547.0 Transaction days (in thousands) 39,070 31,669 Total rental revenue per transaction day (in whole dollars) $ 50.14 $ 48.85 (c) Adjusted pre-tax income is calculated as income (loss) before income taxes plus non-cash purchase accounting charges, non-cash debt charges relating to the amortization and write-off of debt financing costs and debt discounts and certain one-time charges and non-operational items. Adjusted pre-tax income is important to management because it allows management to assess operational performance of our business, exclusive of the items mentioned above. It also allows management to assess the performance of the entire business (a)Transaction days represent the total number of days that vehicles were on rent in a given period.(b)Car rental rate revenue consists of all revenue, net of discounts, associated with the rental of cars including charges for optional insurance products, but excluding revenue derived from fueling and concession and other expense pass-throughs, NeverLost units in the U.S. and certain ancillary revenue. Rental rate revenue per transaction day is calculated as total rental rate revenue, divided by the total number of transaction days, with all periods adjusted to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends. This statistic is important to our management and investors as it represents the best measurement of the changes in underlying pricing in the car rental business and encompasses the elements in car rental pricing that management has the ability to control. The optional insurance products are packaged within certain negotiated corporate, government and membership programs and within certain retail rates being charged. Based upon these existing programs and rate packages, management believes that these optional insurance products should be consistently included in the daily pricing of car rental transactions. On the other hand, non-rental rate revenue items such as refueling and concession pass-through expense items are driven by factors beyond the control of management (i.e. the price of fuel and the concession fees charged by airports). Additionally, NeverLost units are an optional revenue product which management does not consider to be part of their daily pricing of car rental transactions. The following table reconciles ourcar rental segment revenues to our rental rate revenue and rental rate revenue per transaction day (based on December 31, 2011 foreign exchange rates) for the three months ended June 30, 2012 and 2011 (in millions of dollars, except as noted): Three Months Ended
June 30, 2012 2011 $ 1,889.6 $ 1,768.8 (419.4 ) (290.3 ) 1.3 (55.3 ) $ 1,471.5 $ 1,423.2 37,256 34,826 $ 39.50 $ 40.87 (c)Adjusted pre-tax income is calculated as income (loss) before income taxes plus non-cash purchase accounting charges, non-cash debt charges relating to the amortization and write-off of debt financing costs and debt discounts and certain one-time charges and non-operational items. Adjusted pre-tax income is important to management because it allows management to assess operational performance of our business, exclusive of the items mentioned above. It also allows management to assess the performance of the entire business on the same basis as the segment measure of profitability. Management believes that it is important to investors for the same reasons it is important to management and because it allows them to assess our operational performance on the same basis that management uses internally. The contribution of our reportable segments to adjusted pre-tax income and reconciliation to consolidated amounts are presented below (in millions of dollars): Three Months Ended
March 31, 2013 2012 Adjusted pre-tax income: Car rental $ 208.4 $ 91.6 Equipment rental 45.8 25.9 Total reportable segments 254.2 117.5 Adjustments: (109.7 ) (88.1 ) (33.7 ) (24.1 ) (17.3 ) (25.2 ) Restructuring charges (3.7 ) (6.7 ) (4.2 ) (3.3 ) (10.8 ) — Acquisition related costs (2.6 ) (6.9 ) Income (loss) before income taxes $ 72.2 $ (36.8 ) Three Months Ended
June 30, 2012 2011 $ 277.4 $ 242.2 42.5 33.4 319.9 275.6 (86.0 ) (91.2 ) (29.0 ) (22.5 ) (20.6 ) (27.1 ) (16.1 ) (33.7 ) (5.0 ) (2.8 ) (4.5 ) (6.1 ) — 13.1 — (10.7 ) $ 158.7 $ 94.6 (1)Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities.(2)Represents the purchase accounting effects of the Acquisition on our results of operations relating to increased depreciation and amortization of tangible and intangible assets and accretion of revalued workers' compensation and public liability and property damage liabilities. Also represents the purchase accounting effects of subsequent acquisitions on our results of operations relating to increased depreciation and amortization of tangible and intangible assets.(3)Represents non-cash debt charges relating to the amortization and write-off of deferred debt financing costs and debt discounts.(1) Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities. (2) Represents the purchase accounting effects of the Acquisition on our results of operations relating to increased depreciation and amortization of tangible and intangible assets and accretion of revalued workers' compensation and public liability and property damage liabilities. Also represents the purchase accounting effects of certain subsequent acquisitions on our results of operations relating to increased depreciation and amortization of tangible and intangible assets. (3) Represents non-cash debt charges relating to the amortization and write-off of deferred debt financing costs and debt discounts. (4) Represents incremental costs incurred directly supporting our business transformation initiatives. Such costs include transition costs incurred in connection with our business process outsourcing arrangements and incremental costs incurred to facilitate business process re-engineering initiatives that involve significant organization redesign and extensive operational process changes. (5) Primarily represents Dollar Thrifty related expenses and adjustments. (d) Equipment rental and rental related revenue consists of all revenue, net of discounts, associated with the rental of equipment including charges for delivery, loss damage waivers and fueling, but excluding revenue arising from the sale of equipment, parts and supplies and certain other ancillary revenue. Rental and rental related revenue is adjusted in all periods to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends. This statistic is important to our management and investors as it is utilized in the measurement of rental revenue generated per dollar invested in fleet on an annualized basis and is comparable with the reporting of other industry participants. The following table reconciles our equipment rental segment revenues to our equipment rental and rental related revenue (based on December 31, 2012 foreign exchange rates) for the three months ended March 31, 2013 and 2012 (in millions of dollars): Three Months Ended
March 31, 2013 2012 Equipment rental segment revenues $ 351.0 $ 302.1 Equipment sales and other revenue (29.8 ) (26.3 ) Foreign currency adjustment 0.9 (1.5 ) Rental and rental related revenue $ 322.1 $ 274.3 (e) Same store revenue growth is calculated as the year over year change in revenue for locations that are open at the end of the period reported and have been operating under our direction for more than twelve months. The same store revenue amounts are adjusted in all periods to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends.
REVENUES(4)Represents incremental costs incurred directly supporting our business transformation initiatives. Such costs include transition costs incurred in connection with our business process outsourcing arrangements and incremental costs incurred to facilitate business process re-engineering initiatives that involve significant organization redesign and extensive operational process changes.(5)Represents a gain for the U.K. pension plan relating to unamortized prior service cost from a 2010 amendment that eliminated discretionary pension increases related to pre-1997 service primarily pertaining to inactive employees.(6)Represents premiums paid to redeem our 10.5% Senior Subordinated Notes and a portion of our 8.875% Senior Notes.(d)Equipment rental and rental related revenue consists of all revenue, net of discounts, associated with the rental of equipment including charges for delivery, loss damage waivers and fueling, but excluding revenue arising from the sale of equipment, parts and supplies and certain other ancillary revenue. Rental and rental related revenue is adjusted in all periods to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends. This statistic is important to our management and investors as it is utilized in the measurement of rental revenue generated per dollar invested in fleet on an annualized basis and is comparable with the reporting of other industry participants. The following table reconciles our equipment rental segment revenues to our equipment rental and rental related revenue (based on December 31, 2011 foreign exchange rates) for the three months ended June 30, 2012 and 2011 (in millions of dollars): Three Months Ended
June 30, 2012 2011 $ 335.0 $ 301.7 (31.3 ) (29.4 ) (0.7 ) (6.2 ) $ 303.0 $ 266.1 Three Months Ended
March 31, (in millions of dollars) 2013 2012 $ Change % Change Revenues by Segment Car rental $ 2,084.8 $ 1,658.2 $ 426.6 25.7 % Equipment rental 351.0 302.1 48.9 16.2 % Other reconciling items 0.7 0.6 0.1 16.7 % Total revenues $ 2,436.5 $ 1,960.9 $ 475.6 24.3 % (e)Same store revenue growth is calculated as the year over year change in revenue for locations that are open at the end of the period reported and have been operating under our direction for more than twelve months. The same store revenue amounts are adjusted in all periods to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends.REVENUES Three Months Ended
June 30, (in millions of dollars) 2012 2011 $ Change % Change $ 1,889.6 $ 1,768.8 $ 120.8 6.8 % 335.0 301.7 33.3 11.0 % 0.5 1.8 (1.3 ) (68.3 )% $ 2,225.1 $ 2,072.3 $ 152.8 7.4 % 6.8%25.7%, primarily as a result of increases in car rental transaction days worldwide of 7.0%, refueling fees of $5.3 million and airport concession recovery fees of $4.6 million. The three months ended June 30, 2012 also includes $115.4 million of revenues relateddue to Donlen,Dollar Thrifty, which was acquired on September 1, 2011.November 19, 2012, partially offset by the divestiture of Advantage. Excluding the effects of the Dollar Thrifty acquisition and the Advantage divestiture, rental revenues in the U.S. increased $63.8 million. In addition there were revenue increases in the U.S. of $20.4 million from fleet subleases, $16.6 million from Donlen leasing transactions, and $6.8 million obtained from licensee transactions. These increases were partly offset by a decrease in international revenues of $10.7 million, and the effects of foreign currency translation of approximately $2.9 million.$54.7 million and a decrease in worldwide RPD.ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)RPD for worldwide car rental for the three months ended June 30, 2012 decreased 3.4% from 2011, due to decreases in U.S. and International RPD of 3.1% and 3.2%, respectively, and a mix shift to the U.S. due to uncertain economic conditions in Europe. U.S. off-airport RPD declined by 4.0% and U.S. airport RPD decreased 2.2%. U.S. airport RPD was negatively impacted by a mix shift to longer life, lower RPD rentals (including mix shift towards off-airport and the Advantage brand). International RPD decreased primarily due to a decrease in Europe's airport RPD which was due to the competitive pricing environment and uncertain economic conditions.Equipment Rental SegmentRevenues from our equipment rental segment increased 11.0%, primarily due to increases of 12.6% and 3.6% in equipment rental volumes and pricing, respectively, partially offset by the effects of foreign currency translation of approximately $6.3$0.3 million. The increase in volume was primarily due to strong industrial and improving construction performance. Our acquisition of Cinelease in January 2012 also contributed to the revenue increase.Otherdecreased $1.3increased $0.1 million primarily due to a decrease in revenues from our third-party claim management services.EXPENSES Three Months Ended
June 30, (in millions of dollars) 2012 2011 $ Change % Change $ 287.3 $ 287.0 $ 0.3 0.1 % 384.0 373.5 10.5 2.8 % 517.6 526.8 (9.2 ) (1.7 )% 1,188.9 1,187.3 1.6 0.1 % 519.8 419.7 100.1 23.8 % 206.6 195.6 11.0 5.6 % 152.2 165.8 (13.6 ) (8.2 )% (0.5 ) (1.5 ) 1.0 (69.7 )% (0.6 ) 10.8 (11.4 ) (105.1 )% $ 2,066.4 $ 1,977.7 $ 88.7 4.5 % Total expenses increased 4.5%, but total expenses as a percentage of revenues decreased from 95.4% for the three months ended June 30, 2011 to 92.9% for the three months ended June 30, 2012.Direct Operating Expensesprior year period.Car Rental SegmentDirect operating expenses for our car rental segment of $995.8 million for the three months ended June 30, 2012 increased 1.8% from $977.9 million for the three months ended June 30, 2011 as a result Three Months Ended
March 31, (in millions of dollars) 2013 2012 $ Change % Change Expenses: Fleet related expenses $ 314.6 $ 251.1 $ 63.5 25.3 % Personnel related expenses 445.5 381.4 64.1 16.8 % Other direct operating expenses 591.1 481.6 109.5 22.7 % Direct operating 1,351.2 1,114.1 237.1 21.3 % Depreciation of revenue earning equipment and lease charges 587.0 515.1 71.9 14.0 % Selling, general and administrative 251.7 207.8 43.9 21.1 % Interest expense 176.8 162.3 14.5 8.9 % Interest income (1.8 ) (1.1 ) (0.7 ) 63.6 % Other income, net (0.6 ) (0.5 ) (0.1 ) 20.0 % Total expenses $ 2,364.3 $ 1,997.7 $ 366.6 18.4 % increases in other directDollar Thrifty, partially offset by the divestiture of Advantage. Total expenses as a percentage of revenues decreased from 101.9% for the three months ended March 31, 2012 to 97.0% for the three months ended March 31, 2013.personnel related expenses, partlythe growth in U.S. revenue, partially offset by a decrease in fleet related expenses.$449.7$525.8 million for the three months ended June 30, 2012March 31, 2013 increased 3.4%25.9% from the three months ended June 30, 2011.March 31, 2012. The increase was primarily related to the acquisition of Dollar Thrifty, partially offset by the divestiture of Advantage. Excluding the effects of Dollar Thrifty and Advantage there was an increase in concessions of $5.5 million, and customer service costs of $4.2 million due largely to the NeverLost system. In addition there were increases in facilities expense of $8.0 million, commissions of $4.9$3.1 million associated with increased revenue, and field systems expenses of $4.0 million, concession fees of $3.8 million and restructuring and restructuring related charges of $5.5 million, partially offset by the effects of foreign currency translation of approximately $13.1$2.4 million. These increases were primarily a result of improved worldwide rental volume demand and additional locations associated with off-airport expansion.$314.8$369.5 million for the three months ended June 30, 2012March 31, 2013 increased 2.7%18.8% from the three months ended June 30, 2011.March 31, 2012. The increase was primarily related to increases in salaries and related expensesthe acquisition of $16.6 million associated with improved volume and additional off-airport locations in 2012. These increases were partiallyDollar Thrifty, partly offset by the effectsdivestiture of foreign currency translation of approximately $7.4 million.$231.3$257.0 million for the three months ended June 30, 2012 decreased 2.2%March 31, 2013 increased 21.7% from the three months ended June 30, 2011.March 31, 2012. The decreaseincrease was primarily related to the acquisition of Dollar Thrifty, partly offset by a decrease in fleet related expenses associated with the divestiture of Advantage. Excluding the effects of foreign currency translation of approximately $9.8 millionDollar Thrifty and a decrease of $3.6 millionAdvantage there was an increase in vehicle damage costs in the U.S. of $11.2 million due to higher collections from customers on damaged or wrecked vehicles. These decreases were partly offset by increasesincreased winter storms this year versus the prior year along with an increase in the number of vehicles, and an increase in average loss per vehicle. In addition there was an increase in gasoline expense of $4.3 million related to inventory adjustments and higher gas costs, and maintenance expense of $8.9 million.$195.4$200.2 million for the three months ended June 30, 2012 decreased 6.4%March 31, 2013 increased 7.4% from $208.7$186.4 million for the three months ended June 30, 2011March 31, 2012 as a result of decreasesincreases in other direct operating expenses, partly offset by increases in fleetpersonnel related expenses and personnel related expenses.
business growth.Other direct operating expenses for our equipment rental segment of $79.2 million for the three months ended June 30, 2012 decreased $22.2 million, or 21.9% from the three months ended June 30, 2011. The decrease was primarily related to a decrease in restructuring charges of $27.2 million, partly offset by $2.9 million of other direct operating expenses associated with Cinelease, which was acquired in January 2012, and $1.5 million in cost of sales due to higher equipment sales.Fleet related expenses for our equipment rental segment of $55.9 million for the three months ended June 30, 2012 increased $5.5 million, or 11.0% from the three months ended June 30, 2011. The increase was primarily related to increased rental volume resulting in increased freight and delivery costs of $2.4 million, increased insurance, license and tax expenses of $1.5 million, and higher maintenance costs of $0.9 million.Personnel related expenses for our equipment rental segment of $60.2 million for the three months ended June 30, 2012 increased $3.2 million, or 5.7%, from the three months ended June 30, 2011. The increase was related to salaries and related expenses of $4.1 million due to increased volumes and new branch openings, as well as $1.7 million of personnelfleet related expenses associated with Cinelease, which was acquired in January 2012. These increases were partially offset by lower incentives of $1.6 million and the effects of foreign currency translation of approximately $1.2 million.$454.1$513.1 million for the three months ended June 30, 2012March 31, 2013 increased 27.9%13.6% from $355.1$451.7 million for the three months ended June 30, 2011.March 31, 2012. As a percentage of revenue, depreciation of revenue earning equipment and lease charges decreased from 27.2% in the first quarter of 2012 to 24.6% in the first quarter of 2013. The decrease as a percent of revenues was driven primarily by an increase in residual values and corresponding lower depreciation rates in the first quarter of 2013 compared to the first quarter of 2012. The $62.1 million increase in depreciation of revenue earning equipment and lease charges was primarily due to higher depreciation expense related to the acquisition of DonlenDollar Thrifty in November 2012, and its related depreciation expense of $94.5 million, as well as an increase in our averageincreased fleet size of 4.7% (exclusive of vehicles acquired throughin the U.S. and Donlen, acquisition), partlypartially offset by the divestiture of Advantage and lower netper car depreciation per vehicle,rates and a higher mix of non-program cars and the effects of foreign currency translation of approximately $12.8 million.$65.7$74.0 million for the three months ended June 30, 2012March 31, 2013 increased 1.8%16.7% from $64.6$63.4 million for the three months ended June 30, 2011.March 31, 2012. The increase was primarily due to an 8.1%12.8% increase in the average acquisition cost of rental equipment operated during the period, partly offset by higher residual values on the disposal of used equipment, and the effects of foreign currency translation of approximately $1.2 million.$11.0$43.9 million or 5.6%21.1% from the prior year period, due to increases in administrative expenses and sales promotion expenses, partially offset by a decrease in advertising expenses.$14.1$32.2 million or 11.8%24.8%, primarily due to the acquisition of Donlen, which added $6.8Dollar Thrifty as well as increases in shared service expenses of $2.9 million in administrative expenses. Additionally, restructuring and restructuring related charges increased by $6.6 million and benefitsof $1.9 million.by $5.6 million. These increases were$10.4 million or 25.1%, primarily due to the acquisition of Dollar Thrifty, partly offset by lower production and marketing costs in the effects of foreign currency translation of approximately $4.5 million.$1.1$1.3 million or 2.9%3.6%, primarily related to increases in sales salaries and commissions due to improved results.Advertising expenses decreased $4.2 million, or 10.5%, primarily due to higher mediaresults, partly offset by lower sales related general administrative expenses.production costs in 2011 related to the advertising campaign ("GasAnalysis of Financial Condition and Brake"), as well as the effectsResults of foreign currency translation of approximately $1.6 million.$77.2$75.8 million for the three months ended June 30, 2012March 31, 2013 decreased 2.2%5.9% from $79.0$80.5 million for the three months ended June 30, 2011.March 31, 2012. The decrease was primarily due to the effects of foreign currency translation,primarily lower fleet levels andweighted average interest rates in Europe,the U.S and lower interest rates in Brazil,Europe, partly offset by an increase in the weighted average debt outstanding as a result of an increasedincrease in fleet size in the U.S.,US, and by Donlen's additional interest expense.$11.5$13.4 million for the three months ended June 30, 2012 decreased 6.4%March 31, 2013 increased 4.7% from $12.2$12.8 million for the three months ended June 30, 2011.March 31, 2012. The decreaseincrease wasITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) lower interest rates in Europe, partially offset by an increase in weighted average debt outstanding as a result of an increased fleet size.$63.5$87.6 million for the three months ended June 30, 2012 decreased 14.9%March 31, 2013 increased 27.0% from $74.6$69.0 million for the three months ended June 30, 2011.March 31, 2012. The decreaseincrease was primarily due to the prior year's write-offdebt used to finance the acquisition of unamortized debt costs in connection with the redemption of a portion of our 8.875% Senior Notes, as well as a decrease in the average debt outstanding and interest rates in 2012, mainly due to the redemption of the remainder of our 8.875% Senior Notes and 7.875% Senior Notes in the first quarter of 2012.$1.0$0.7 million from the prior year period.(Income) Expense,Income, Net(income) expense, net forincome increased $0.1 million from the three months ended June 30, 2012 and 2011, reflected income of $0.6 million and expense of $10.8 million, respectively. The expense in 2011 was primarily due to $10.7 million in premiums paid in connection with the redemption of a portion of our 8.875% Senior Notes.$277.4$208.4 million increased 14.5%127.5% from $242.2$91.6 million for the three months ended June 30, 2011.March 31, 2012. The increase was primarily due to stronger volumes and pricing including the impact of the Dollar Thrifty acquisition, lower net depreciation per vehicle, interest expense due to favorable refinancing activity and disciplined cost management, partly offset by decreased pricing.management. Adjustments to our car rental segment income before income taxes for the three months ended June 30, 2012March 31, 2013 totaled $42.6$38.8 million (which consists of purchase accounting of $17.2$22.6 million, restructuring and restructuring related charges of $14.9$5.8 million, and non-cash debt charges of $10.6$5.7 million partly offset by a gain on derivativesand integration expenses of $0.1$4.7 million). Adjustments to our car rental segment income before income taxes for the three months ended June 30, 2011March 31, 2012 totaled $10.1$30.1 million (which consists of purchase accounting of $13.1 million, non-cash debt charges of $10.6 million, purchase accounting of $8.5$11.2 million and restructuring and restructuring related charges of $4.0 million, and derivative losses of $0.1 million, partly offset by pension adjustments of $13.1$5.8 million). See footnote (c) to the table under "Results of Operations" for a summary and description of these adjustments.$42.5$45.8 million increased 27.2%76.8% from $33.4$25.9 million for the three months ended June 30, 2011.March 31, 2012. The increase was primarily due to stronger volumes and pricing, strong cost management performance and higher residual values on the disposal of used equipment. Adjustments to our equipment rental segment income before income taxes for the three months ended June 30, 2012March 31, 2013 totaled $14.4$13.7 million (which consists of purchase accounting of $10.8$10.5 million, restructuring chargesaccelerated depreciation of $2.5$1.5 million, and non-cash debt charges of $1.1$1.2 million and restructuring and restructuring related charges of $0.5 million). Adjustments to our equipment rental segment income before income taxes for the three months ended June 30, 2011March 31, 2012 totaled $46.7$15.7 million (which consists of purchase accounting of $10.0 million, restructuring and restructuring related charges of $32.1 million, purchase accounting of $13.1$4.2 million and non-cash debt charges of $1.5 million). SeeNET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST AND NET INCOME (LOSS) ATTRIBUTABLE TO HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES' COMMON STOCKHOLDERS Three Months Ended
June 30, (in millions of dollars) 2012 2011 $ Change % Change $ 158.7 $ 94.6 $ 64.1 67.7 % (65.8 ) (34.5 ) (31.3 ) 90.5 % 92.9 60.1 32.8 54.6 % — (5.1 ) 5.1 (100.0 )% $ 92.9 $ 55.0 $ 37.9 68.9 % Three Months Ended
March 31, (in millions of dollars) 2013 2012 $ Change % Change Income (loss) before income taxes $ 72.2 $ (36.8 ) $ 109.0 NM Provision for taxes on income (54.2 ) (19.5 ) (34.7 ) NM Net income (loss) attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders $ 18.0 $ (56.3 ) $ 74.3 NM June 30, 2012March 31, 2013 was 41.5%75.1% as compared to 36.5%(53.0)% in the three months ended June 30, 2011.March 31, 2012. The effective tax rate for the full fiscal year 2013 is expected to be approximately 40%. The provision for taxes on income increased $31.3$34.7 million, primarily due to higher income before income taxes, changes in geographic earnings mix and changes in losses in certain non-U.S. jurisdictions for which tax benefits cannot beare not realized.Attributable to Noncontrolling InterestNet income attributable to noncontrolling interest decreased $5.1 million due to Hertz's purchase of the noncontrolling interest of Navigation Solutions, L.L.C. on December 31, 2011, thereby increasing its ownership interest from 65% to 100%.Net Income(Loss) Attributable to Hertz Global Holdings, Inc. and Subsidiaries' Common Stockholders68.9%$74.3 million primarily due to the Dollar Thrifty acquisition, higher rental volumes and pricing in our worldwide car and equipment rental operations, disciplined cost management, lower net depreciation per vehicle in our car rental operations increased pricing in our equipment rental operations and improved residual values on the disposal of certain used equipment, partly offset by lower pricing in our worldwide car rental operations.equipment. The impact of changes in exchange rates on net income was mitigated by the fact that not only revenues but also most expenses outside of the United States were incurred in local currencies.ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)Six Months Ended June 30, 2012 Compared with Six Months Ended June 30, 2011SummaryThe following table sets forth the percentage of total revenues represented by the various line items in our consolidated statements of operations for the six months ended June 30, 2012 and 2011 (in millions of dollars): Percentage of Revenues Six Months Ended
June 30, Six Months Ended
June 30, 2012 2011 2012 2011 $ 3,472.6 $ 3,210.1 83.0 % 83.3 % 635.5 569.7 15.2 14.8 78.0 72.5 1.8 1.9 4,186.1 3,852.3 100.0 100.0 2,304.1 2,261.0 55.0 58.7 1,033.9 855.7 24.7 22.2 414.3 377.8 9.9 9.8 314.5 362.7 7.5 9.4 (1.6 ) (3.4 ) — — (1.0 ) 62.7 — 1.6 4,064.2 3,916.5 97.1 101.7 121.9 (64.2 ) 2.9 (1.7 ) (85.3 ) (4.6 ) (2.0 ) (0.1 ) 36.6 (68.8 ) 0.9 (1.8 ) — (8.8 ) — (0.2 ) $ 36.6 $ (77.6 ) 0.9 % (2.0 )% ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)The following table sets forth certain of our selected car rental, equipment rental and other operating data for the six months ended or as of June 30, 2012 and 2011: Six Months Ended
or as of June 30, 2012 2011 13,905 13,174 10,457 9,733 3,448 3,441 68,925 64,476 49,137 44,710 19,788 19,766 $ 39.89 $ 41.38 $ 38.77 $ 40.26 $ 42.69 $ 43.92 625,500 457,300 336,800 311,900 144,900 145,400 143,800 N/A $ 369.0 $ 303.5 $ 10,408.0 $ 9,522.7 $ 577.3 $ 507.5 8.1 % 9.9 % $ 2,951.6 $ 2,769.2 $ 68.4 $ 43.6 $ 2,030.0 $ 1,702.7 (a)For further details relating to car rental transaction days, car rental rate revenue per transaction day, adjusted pre-tax income, equipment rental and rental related revenue and equipment rental same store revenue growth including growth initiatives, see "Three Months Ended June 30, 2012 Compared with Three Months Ended June 30, 2011—Summary."(b)The following table reconciles our car rental segment revenues to our rental rate revenue and rental rate revenue per transaction day (based on December 31, 2011 foreign exchange rates) for the six months ended June 30, 2012 and 2011 (in millions of dollars, except as noted): Six Months Ended
June 30, 2012 2011 $ 3,547.9 $ 3,279.1 (788.7 ) (535.9 ) (9.6 ) (75.0 ) $ 2,749.6 $ 2,668.2 68,925 64,476 $ 39.89 $ 41.38 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)(c)The contribution of our reportable segments to adjusted pre-tax income and reconciliation to consolidated amounts are presented below (in millions of dollars): Six Months Ended
June 30, 2012 2011 $ 369.0 $ 303.5 68.4 43.6 437.4 347.1 (174.2 ) (178.7 ) (53.0 ) (43.1 ) (45.8 ) (87.0 ) (25.5 ) (38.4 ) (5.6 ) (3.3 ) (11.4 ) (9.0 ) — (2.5 ) — 13.1 — (62.4 ) $ 121.9 $ (64.2 ) (1)Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities.(2)Represents the purchase accounting effects of the Acquisition on our results of operations relating to increased depreciation and amortization of tangible and intangible assets and accretion of revalued workers' compensation and public liability and property damage liabilities. Also represents the purchase accounting effects of subsequent acquisitions on our results of operations relating to increased depreciation and amortization of tangible and intangible assets.(3)Represents non-cash debt charges relating to the amortization and write-off of deferred debt financing costs and debt discounts.(4)Represents incremental costs incurred directly supporting our business transformation initiatives. Such costs include transition costs incurred in connection with our business process outsourcing arrangements and incremental costs incurred to facilitate business process re-engineering initiatives that involve significant organization redesign and extensive operational process changes.(5)Represents a gain for the U.K. pension plan relating to unamortized prior service cost from a 2010 amendment that eliminated discretionary pension increases related to pre-1997 service primarily pertaining to inactive employees.(6)Represents premiums paid to redeem our 10.5% Senior Subordinated Notes and a portion of our 8.875% Senior Notes.(d)The following table reconciles our equipment rental segment revenues to our equipment rental and rental related revenue (based on December 31, 2011 foreign exchange rates) for the six months ended June 30, 2012 and 2011 (in millions of dollars): Six Months Ended
June 30, 2012 2011 $ 637.1 $ 569.9 (57.6 ) (52.8 ) (2.2 ) (9.6 ) $ 577.3 $ 507.5 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)REVENUES Six Months Ended
June 30, (in millions of dollars) 2012 2011 $ Change % Change $ 3,547.9 $ 3,279.1 $ 268.8 8.2 % 637.1 569.9 67.2 11.8 % 1.1 3.3 (2.2 ) (65.2 )% $ 4,186.1 $ 3,852.3 $ 333.8 8.7 % Car Rental SegmentRevenues from our car rental segment increased 8.2%, primarily as a result of increases in car rental transaction days worldwide of 6.9%, refueling fees of $13.6 million and airport concession recovery fees of $9.5 million. The six months ended June 30, 2012 also includes $225.8 million of revenues related to Donlen. These increases were partly offset by the effects of foreign currency translation of approximately $62.3 million and a decrease in worldwide RPD.RPD for worldwide car rental for the six months ended June 30, 2012 decreased 3.6% from 2011, due to decreases in U.S. and International RPD of 3.7% and 2.8%, respectively, and a mix shift to the U.S. due to uncertain economic conditions in Europe. U.S. off-airport RPD declined by 3.6% and U.S. airport RPD decreased 3.3%. U.S. airport RPD was negatively impacted by a mix shift to longer life, lower RPD rentals (including mix shift towards off-airport and the Advantage brand). International RPD decreased primarily due to a decrease in Europe's airport RPD which was due to the competitive pricing environment and uncertain economic conditions.Equipment Rental SegmentRevenues from our equipment rental segment increased 11.8%, primarily due to increases of 11.0% and 3.6% in equipment rental volumes and pricing, respectively, partially offset by the effects of foreign currency translation of approximately $8.4 million. The increase in volume was primarily due to strong industrial and improving construction performance. Our acquisition of Cinelease in January 2012 also contributed to the revenue increase.OtherRevenues from all other sources decreased $2.2 million, primarily due to a decrease in revenues from our third-party claim management services.ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)EXPENSES Six Months Ended
June 30, (in millions of dollars) 2012 2011 $ Change % Change $ 538.3 $ 536.9 $ 1.4 0.3 % 765.5 739.5 26.0 3.5 % 1,000.3 984.6 15.7 1.6 % 2,304.1 2,261.0 43.1 1.9 % 1,033.9 855.7 178.2 20.8 % 414.3 377.8 36.5 9.7 % 314.5 362.7 (48.2 ) (13.3 )% (1.6 ) (3.4 ) 1.8 (54.1 )% (1.0 ) 62.7 (63.7 ) (101.6 )% $ 4,064.2 $ 3,916.5 $ 147.7 3.8 % Total expenses increased 3.8%, but total expenses as a percentage of revenues decreased from 101.7% for the six months ended June 30, 2011 to 97.1% for the six months ended June 30, 2012.Direct Operating ExpensesCar Rental SegmentDirect operating expenses for our car rental segment of $1,925.5 million for the six months ended June 30, 2012 increased $43.8 million, or 2.3%, from the six months ended June 30, 2011 as a result of increases in other direct operating expenses and personnel related expenses, partially offset by lower fleet related expenses.Other direct operating expenses for our car rental segment of $867.3 million for the six months ended June 30, 2012 increased $33.8 million, or 4.1% from the six months ended June 30, 2011. The increase was primarily related to increases in facilities expenses of $11.7 million, restructuring and restructuring related charges of $8.5 million, commissions of $8.0 million, concession fees of $7.5 million, computer expenses of $4.9 million and field administrative expenses of $4.5 million, partially offset by the effects of foreign currency translation of approximately $15.4 million. The increases were primarily a result of improved worldwide rental volume demand, additional locations associated with off-airport expansion, and increased litigation expenses.Personnel related expenses for our car rental segment of $625.8 million for the six months ended June 30, 2012 increased $19.1 million, or 3.1%, from the six months ended June 30, 2011. The increase was related to increases in salaries and related expenses associated with improved volume and compensation for employees at additional off-airport locations in 2012.Fleet related expenses for our car rental segment of $432.5 million for the six months ended June 30, 2012 decreased $9.1 million, or 2.1% from the six months ended June 30, 2011. The decrease was primarily related to the effects of foreign currency translation of $11.4 million, lower vehicle damage costs of $9.3 million due to higher collections from customers on damaged or wrecked vehicles, lower self insurance expenses of $3.4 million and lower vehicle license taxes of $1.9 million. These decreases were partially offset by increases in gasoline costs of $17.0 million.ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)Equipment Rental SegmentDirect operating expenses for our equipment rental segment of $382.7 million for the six months ended June 30, 2012 increased 0.9% from $379.5 million for the six months ended June 30, 2011 as a result of increases in fleet related expenses and personnel related expenses, partially offset by lower other direct operating expenses.Fleet related expenses for our equipment rental segment of $105.9 million for the six months ended June 30, 2012 increased $10.5 million, or 11.0% from the six months ended June 30, 2011. The increase was primarily related to increased rental volume resulting in increased freight and delivery costs of $3.6 million, higher maintenance costs of $2.4 million, and increased insurance, license and tax expenses of $1.8 million. Additionally, Cinelease added $1.7 million of fleet related expenses.Personnel related expenses for our equipment rental segment of $121.4 million for the six months ended June 30, 2012 increased $8.4 million, or 7.4% from the six months ended June 30, 2011. The increase was primarily related to increases in salaries and related expenses of $6.2 million, due to increased volumes and new branch openings. Additionally, Cinelease added $3.2 million of personnel related expenses.Other direct operating expenses for our equipment rental segment of $155.5 million for the six months ended June 30, 2012 decreased $15.6 million, or 9.1% from the six months ended June 30, 2011. The decrease was primarily related to a decrease in restructuring charges of $26.6 million, partly offset by $6.0 million of other direct operating expenses associated with Cinelease, which was acquired in January 2012, as well as increased re-rent expenses of $2.7 million and higher cost of sales of $2.1 million due to higher equipment sales.Depreciation of Revenue Earning Equipment and Lease ChargesCar Rental SegmentDepreciation of revenue earning equipment and lease charges for our car rental segment of $905.8 million for the six months ended June 30, 2012 increased 25.1% from $723.9 million for the six months ended June 30, 2011. The increase was primarily due to the acquisition of Donlen and its related depreciation expense of $184.5 million, as well as an increase in our average fleet size of 5.3% (exclusive of vehicles acquired through the Donlen acquisition), partly offset by lower net depreciation per vehicle, higher vehicle residual values, a higher mix of non-program cars and the effects of foreign currency translation of approximately $14.7 million.Equipment Rental SegmentDepreciation of revenue earning equipment and lease charges in our equipment rental segment of $128.1 million for the six months ended June 30, 2012 decreased 2.8% from $131.8 million for the six months ended June 30, 2011. The decrease was primarily due to higher residual values on the disposal of used equipment, partly offset by a 6.6% increase in the average acquisition cost of rental equipment operated during the period.Selling, General and Administrative ExpensesSelling, general and administrative expenses increased by $36.5 million, or 9.7%, due to increases in administrative expenses, advertising expenses, and sales promotion expenses.ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)Administrative expenses increased $31.6 million, or 13.6%, primarily due to the acquisition of Donlen, which added $12.9 million in administrative expenses. Additionally, salaries and related expenses increased $11.4 million, restructuring and restructuring related charges increased by $7.8 million, consulting expenses increased $5.4 million and legal expenses increased $4.9 million. These increases were partly offset by the effects of foreign currency translation of approximately $7.6 million.Advertising expenses increased $4.0 million, or 5.5%, primarily due to increased media advertising, higher airline miles expense associated with increased volume, and costs related to our new customer loyalty program, partially offset by the effects of foreign currency translation of approximately $1.9 million.Sales promotion expenses increased $0.9 million, or 1.3%, primarily related to increases in sales salaries and commissions due to improved results, partially offset by the effects of foreign currency translation.Interest ExpenseCar Rental SegmentInterest expense for our car rental segment of $157.7 million for the six months ended June 30, 2012 increased 2.1% from $154.5 million for the six months ended June 30, 2011. The increase was primarily due to the acquisition of Donlen and an increase in the weighted-average debt outstanding, partially offset by the effects of foreign currency translation.Equipment Rental SegmentInterest expense for our equipment rental segment of $24.3 million for the six months ended June 30, 2012 increased 4.2% from $23.3 million for the six months ended June 30, 2011. The increase was primarily due to increases in the weighted-average debt outstanding as a result of an increase in average fleet size and in the Senior Term Facility and Senior ABL Facility interest rates.OtherOther interest expense relating to interest on corporate debt of $132.5 million for the six months ended June 30, 2012 decreased 28.3% from $184.9 million for the six months ended June 30, 2011. The decrease was primarily due larger write-off's last year of unamortized debt costs in connection with refinancing activity, lower rates achieved with the refinancing of our Senior Notes and Senior Subordinated Notes, and a decrease in the weighted-average debt outstanding and interest rates.Interest IncomeInterest income increased $1.8 million from the prior year period.Other (Income) Expense, NetOther (income) expense, net for the six months ended June 30, 2012 and 2011, reflected income of $1.0 million and expense of $62.7 million, respectively. The expense in 2011 was primarily due to $62.4 million in premiums paid in connection with the redemption of our 10.5% Senior Subordinated Notes and a portion of our 8.875% Senior Notes.ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)ADJUSTED PRE-TAX INCOME (LOSS)Car Rental SegmentAdjusted pre-tax income for our car rental segment of $369.0 million increased $65.5 million from $303.5 million for the six months ended June 30, 2011. The increase was primarily due to stronger volumes, lower net depreciation per vehicle, improved residual values and disciplined cost management, partly offset by decreased pricing. Adjustments to our car rental segment income before income taxes for the six months ended June 30, 2012 totaled $72.6 million (which consists of purchase accounting of $30.2 million, non-cash debt charges of $21.7 million, and restructuring and restructuring related charges of $20.7 million). Adjustments to our car rental segment income before income taxes for the six months ended June 30, 2011 totaled $30.4 million (which consists of non-cash debt charges of $20.8 million, purchase accounting of $16.6 million and restructuring and restructuring related charges of $5.5 million and derivative losses of $0.6 million, partly offset by pension adjustments of $13.1 million). See footnote (c) to the table under "Results of Operations" for a summary and description of these adjustments.Equipment Rental SegmentAdjusted pre-tax income for our equipment rental segment of $68.4 million increased $24.8 million from $43.6 million for the six months ended June 30, 2011. The increase was primarily due to stronger volumes and pricing, strong cost management performance and higher residual values on the disposal of used equipment. Adjustments to our equipment rental segment income before income taxes for the six months ended June 30, 2012 totaled $30.2 million (which consists of purchase accounting of $20.8 million, restructuring and restructuring related charges of $6.7 million, and non-cash debt charges of $2.7 million). Adjustments to our equipment rental loss before income taxes for the six months ended June 30, 2011 totaled $64.6 million (which consists of restructuring and restructuring related charges of $35.9 million, purchase accounting of $24.8 million, and non-cash debt charges of $3.9 million). See footnote (c) to the table under "Results of Operations" for a summary and description of these adjustments.PROVISION FOR TAXES ON INCOME, NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST AND NET INCOME (LOSS) ATTRIBUTABLE TO HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES' COMMON STOCKHOLDERS Six Months Ended
June 30, (in millions of dollars) 2012 2011 $ Change % Change $ 121.9 $ (64.2 ) $ 186.1 N/M (85.3 ) (4.6 ) (80.7 ) N/M 36.6 (68.8 ) 105.4 (153.1 )% — (8.8 ) 8.8 (100.0 )% $ 36.6 $ (77.6 ) $ 114.2 (147.1 )% Provision for Taxes on IncomeThe effective tax rate for the six months ended June 30, 2012 was 70.0% as compared to (7.2)% in the six months ended June 30, 2011. The provision for taxes on income increased $80.7 million, primarily dueITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)to higher income before income taxes, changes in geographic earnings mix and changes in losses in certain non-U.S. jurisdictions for which tax benefits cannot be realized.Net Income Attributable to Noncontrolling InterestNet income attributable to noncontrolling interest decreased $8.8 million due to Hertz's purchase of the noncontrolling interest of Navigation Solutions, L.L.C. on December 31, 2011, thereby increasing its ownership interest from 65% to 100%.Net Income (Loss) Attributable to Hertz Global Holdings, Inc. and Subsidiaries' Common StockholdersThe net income attributable to Hertz Global Holdings, Inc. and Subsidiaries' common stockholders increased $114.2 million primarily due to higher rental volumes in our worldwide car and equipment rental operations, improved residual values on the disposal of certain vehicles and used equipment, lower net depreciation per vehicle in our car rental operations, disciplined cost management and increased pricing in our equipment rental operations, partly offset by lower pricing in our worldwide car rental operations. The impact of changes in exchange rates on net income was mitigated by the fact that not only revenues but also most expenses outside of the United States were incurred in local currencies.June 30, 2012,March 31, 2013, we had cash and cash equivalents of $586.2$653.8 million a decrease, an increase of $345.6$120.5 million from $931.8 million as of December 31, 2011.2012. The following table summarizes such decrease:the change: Six Months Ended
June 30, Three Months Ended
March 31, (in millions of dollars) 2012 2011 $ Change 2013 2012 $ Change $ 1,158.4 $ 686.9 $ 471.5 $ 743.6 $ 492.0 251.6 (2,203.7 ) (2,177.7 ) (26.0 ) (932.3 ) (715.8 ) (216.5 ) 704.5 (167.4 ) 871.9 316.8 (121.3 ) 438.1 (4.8 ) 31.6 (36.4 ) (7.6 ) 8.0 (15.6 ) $ (345.6 ) $ (1,626.6 ) $ 1,281.0 $ 120.5 $ (337.1 ) $ 457.6 sixthree months ended June 30, 2012,March 31, 2013, we generated $471.5$251.6 million more cash from operating activities compared with the same period in 2011.2012. The increase was primarily a result of improvements in the operating performance of our businessdue to higher earnings before interest, depreciation and amortization, improved working capital and refinancing activities which reduced interest expense, as well as due to the timing of our payments.sixthree months ended June 30, 2012,March 31, 2013, we used $26.0$216.5 million more cash for investing2011.2012. The increase in the use of funds was primarily due to increases in revenue earning equipment expenditures and acquisitions during the period, partly offset by a decrease in the year-over-year change in restricted cash and cash equivalents andduring the period, partly offset by an increase in the proceeds from disposal of revenue earning equipment in our car rental operations.operations and a decrease in acquisition activity compared with the same period in 2012. The increase in revenue earning equipment expenditures was primarily due to higher carTableincreased volumes, the acquisition of ContentsITEM 2. Management's DiscussionDollar Thrifty and Analysistiming of Financial Conditionpurchases and Results of Operations (Continued)and equipment rental volumes. The increase in the proceeds from the disposal of revenue earning equipment was primarily related to improved residual values.payments. As of June 30, 2012March 31, 2013 and December 31, 2011,2012, we had $175.4$308.0$571.6 million, respectively, of restricted cash and cash equivalents to be used for the purchase of revenue earning vehicles and other specified uses under our fleet financing facilities, our Like Kind Exchange Program, or "LKE Program," and to satisfy certain of our self-insurance regulatory reserve requirements. The decrease in restricted cash and cash equivalents of $132.6$146.5 million from December 31, 20112012 to June 30, 2012,March 31, 2013, primarily related to the timing of purchases and sales of revenue earning vehicles.sixthree months ended June 30, 2012,March 31, 2013, cash flows from financing activities increased by $871.9$438.1 million compared with the same period in 2011.2012. The increase was primarily due to paymentdebt related activity to finance fleet purchases offset by the repurchase of a greater amount of pre-funded debt associated with our Senior Note redemptionsshares in the prior year.20122013 and 20112012 (in millions of dollars). Revenue Earning Equipment Property and Equipment Capital
Expenditures Disposal
Proceeds Net Capital
Expenditures Capital
Expenditures Disposal
Proceeds Net Capital
Expenditures Revenue Earning Equipment Property and Equipment 2013 First Quarter $ 3,253.0 $ (2,237.9 ) $ 1,015.1 $ 80.1 $ (23.5 ) $ 56.6 $ 2,648.7 $ (2,009.3 ) $ 639.4 $ 74.2 $ (47.6 ) $ 26.6 $ 2,648.7 $ (2,009.3 ) $ 639.4 $ 74.2 $ (47.6 ) $ 26.6 3,050.2 (1,599.0 ) 1,451.2 63.0 (8.8 ) 54.2 $ 5,698.9 $ (3,608.3 ) $ 2,090.6 $ 137.2 $ (56.4 ) $ 80.8 $ 1,963.8 $ (1,690.2 ) $ 273.6 $ 56.8 $ (14.5 ) $ 42.3 3,503.0 (1,798.7 ) 1,704.3 68.6 (13.9 ) 54.7 $ 5,466.8 $ (3,488.9 ) $ 1,977.9 $ 125.4 $ (28.4 ) $ 97.0 Six Months Ended June 30, Three Months Ended
March 31, 2012 2011 $ Change % Change 2013 2012 $ Change % Change $ 5,369.5 $ 5,211.3 $ 158.2 3.0 % $ 3,098.8 $ 2,524.7 $ 574.1 22.7 % 329.4 255.5 73.9 28.9 % 154.2 124.0 30.2 24.4 % $ 5,698.9 $ 5,466.8 $ 232.1 4.2 % $ 3,253.0 $ 2,648.7 $ 604.3 22.8 % higher rentalthe impact from the acquisition of Dollar Thrifty, increased volumes duringand timing of purchases and payments, partly offset by the six months ended June 30, 2012 as compared toimpact of the six months ended June 30, 2011 which required us to increase our fleet levels.divestiture of Advantage. The increase in our equipment rental operations revenue earning equipment expenditures was primarily due to the timing of purchases and payments partly offset by better utilization of our existing equipment during the sixthree months ended June 30, 2012 as comparedMarch 31, 2013. Three Months Ended
March 31, 2013 2012 $ Change % Change Property and equipment expenditures Car rental $ 71.2 $ 59.2 $ 12.0 20.3 % Equipment rental 4.9 8.2 (3.3 ) (40.2 )% Other 4.0 6.8 (2.8 ) (41.2 )% Total $ 80.1 $ 74.2 $ 5.9 8.0 % sixthree months ended June 30, 2011.March 31, 2013. Six Months Ended
June 30, 2012 2011 $ Change % Change $ 109.8 $ 98.5 $ 11.3 11.4 % 15.8 12.7 3.1 23.8 % 11.6 14.2 (2.6 ) (18.5 )% $ 137.2 $ 125.4 $ 11.8 9.3 % The net increase in property and equipment expenditures were primarily due to increased locations in our car rental operations, continued improvement in economic conditions and business performance during the first half of the year.FinancingJune 30, 2012,March 31, 2013, we had $12,467.9$16,317.0 million of total indebtedness outstanding. Cash paid for interest during the sixthree months ended June 30, 2012,March 31, 2013, was $281.9$119.1 million, net of amounts capitalized. Accordingly, we are highly leveraged and a substantial portion of our liquidity needs arise from debt service on our indebtedness and from the funding of our costs of operations, capital expenditures and capital expenditures.June 30, 2012March 31, 2013 consisted of cash and cash equivalents, unused commitments under our Senior ABL Facility and unused commitments under our fleet debt. For a description of these amounts, see Note 78 to the Notes to our condensed consolidated financial statements included in this Report as well as "Borrowing Capacity and Availability," below.June 30March 31 (in millions of dollars) are as follows:2014 $ 5,985.9 (including $5,686.7 of other short-term borrowings*) 2015 $ 1,991.1 2016 $ 1,101.8 2017 $ 529.2 2018 $ 248.1 After 2018 $ 6,480.9 2013 $ 5,993.7 (including $5,390.0 of other short-term borrowings*) 2014 $ 280.0 2015 $ 1,211.3 2016 $ 888.4 2017 $ 244.7 After 2017 $ 3,908.1 *Our short-term borrowings as of June 30, 2012 include, among other items, the amounts outstanding under the European Securitization, Australian Securitization, Senior ABL Facility, U.S. Fleet Financing Facility, U.S. Fleet Variable Funding Notes, Brazilian Fleet Financing Facility, Canadian Securitization, Capitalized Leases, European Revolving Credit Facility and the Donlen GN II Variable Funding Notes. These amounts are reflected as short-term borrowings, regardless of the facility maturity date, as these facilities are revolving in nature and/or the outstanding borrowings have maturities of three months or less. Short-term borrowings also include the Convertible Senior Notes which became convertible on January 1, 2012 and remain as such through September 30, 2012. As of June 30, 2012, short-term borrowings had a weighted average interest rate of 2.3%.* Our short-term borrowings as of March 31, 2013 include, among other items, the amounts outstanding under the Senior ABL Facility, HVF U.S. Fleet Variable Funding Notes, RCFC U.S. Fleet Variable Funding Notes, Donlen GN II Variable Funding Notes, U.S. Fleet Financing Facility, European Revolving Credit Facility, European Securitization, Hertz-Sponsored Canadian Securitization, Dollar Thrifty-Sponsored Canadian Securitization, Australian Securitization, Brazilian Fleet Financing Facility and Capitalized Leases. These amounts are reflected as short-term borrowings, regardless of the facility maturity date, as these facilities are revolving in nature and/or the outstanding borrowings have maturities of three months or less. Short-term borrowings also include the Convertible Senior Notes which became convertible on January 1, 2013 and remain as such through June 30, 2013. As of March 31, 2013, short-term borrowings had a weighted average interest rate of 2.1%. ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)February 2012,January 2013, Hertz calledVehicle Financing LLC, or "HVF," an insolvency remote, direct, wholly-owned, special purpose subsidiary of Hertz, completed the remainderissuance of its outstanding 8.875% Senior Notes due 2014 and 7.875% Senior Notes due January 2014 for redemption. Hertz redeemed these notes in full during March 2012.In March 2012, Hertz issued an additional $2506.75% Senior$42.25 million of three year Class B notes carry a 1.86% coupon, the $543.75 million of five year Class A notes carry a 1.83% coupon, and the $81.25 million of five year Class B notes carry a 2.48% coupon. The three year notes and five year notes have expected final payment dates in August 2016 and August 2018, respectively. The Class B notes are subordinated to the Class A notes.due 2019. The proceeds of this March 2012 offering werewill be, to the extent permitted by the applicable agreements, (i) used to redeem allpay the purchase price of the outstanding 8.875% Senior Notes due 2014 and together with cash on hand, all of the outstanding 7.875% Senior Notes due 2014 which resulted in the write-off of unamortized debt costs of $3.2 million.In March 2012, Hertz amended the Canadian Securitizationvehicles acquired by HVF pursuant to extend the maturity date from March 2012 to May 2012. In the second quarter 2012, the maturity date was extended to June 2013.In April 2012, Hertz paid off the remaining debt outstanding under theHVF's U.S. ABS Program Series 2011-2(as defined herein), (ii) used to pay the principal amount of other HVF U.S. Fleet Variable Funding Notes and terminated the facility.May 2012, the borrowing capacity of the Series 2009-1 under our U.S. Fleet Variable Funding Notes was increased by $250 million.In June 2012,February 2013, Hertz amended the European Revolving Credit Facilitycaused its Brazilian operating subsidiary to extend the maturity date from June 2013 to June 2015.In June 2012, Hertz amendedamend the Brazilian Fleet Financing Facility to extend the maturity date from June 2012February 2013 to FebruaryOctober 2013.June 2012,March 2013, Hertz amended the European Seasonal Revolving Credit Facility under the European Revolving Credit Facilityissued $250 million in aggregate principal amount of 4.25% Senior Notes due 2018. The proceeds of this March 2013 offering were used by Hertz to createreplenish a commitment period running from June 2012portion of its liquidity, after having dividended $467.2 million in available liquidity to November 2012 that provides for aggregate maximum borrowingsus, which we used to repurchase 23.2 million shares of €85.7 million (the equivalent of $106.9 million as of June 30, 2012), subject to borrowing base availability.During the first half of 2012, Donlen's GN II Variable Funding Notes remained outstanding and lender commitments thereunder were increased to permit aggregate maximum borrowings of $900.0 million (subject to borrowing base availability).1718 to the Notes to our condensed consolidated financial statements included in this Report.agreementsagreement entered into in connection with the issuance of $250$250 million in aggregate principal amount of the 6.75%4.250% Senior Notes due 20192018 in March 2012,2013, Hertz has agreed to file a registration statement under the Securities Act of 1933, as amended, to permit either the exchange of such notes for registered notes or, in the alternative, the registered resale of such notes. Hertz's failure to meet its obligations under theeither exchange and registration rights agreement, including by failing to have the registration statement become effective by March 20132014 or failing to complete the exchange offer by April 2013,2014, will result in Hertz incurring special interest on such notes at a per annum rate of 0.25% for the first 90 days of any period where a defaultany such failure has occurred and is continuing, which rate will be increased by an additional 0.25% during each subsequent 90 day period, up to a maximum of 0.50%. We do not believe the special interest obligation is probable, and as such, we have not recorded any amounts with respect to this registration payment arrangement.ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)45 to the Notes to our audited annual consolidated financial statements included in our Form 10-K under the caption "Item 8—Financial Statements and Supplementary Data." For a discussion of the risks associated with our reliance on asset-backedasset-78 to the Notes to our condensed consolidated financial statements included in this Report.
CovenantsITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)CovenantsJune 30, 2012,March 31, 2013, we were not subject to such contractually specified fixed charge coverage ratio.78 to the Notes to our condensed consolidated financial statements included in this Report and Note 45 to the Notes to our audited annual consolidated financial statements included in our Form 10-K under the caption "Item 8—Financial Statements and Supplementary Data." For a discussion of the risks associated with our significant indebtedness, see "Item 1A—Risk Factors" in our Form 10-K.June 30, 2012,March 31, 2013, the following facilities were available for the use of Hertz and its subsidiaries (in millions of dollars): Remaining
Capacity Availability Under
Borrowing Base
Limitation $ 1,027.6 $ 782.4 $ 751.3 $ 751.3 1,027.6 782.4 751.3 751.3 163.1 36.8 HVF U.S. Fleet Variable Funding Notes 488.8 — RCFC U.S. Fleet Variable Funding Notes 81.0 — 26.1 2.1 105.0 — 54.0 16.2 24.0 — 119.3 66.7 153.4 — 157.3 16.8 260.3 — 63.4 20.6 Hertz-Sponsored Canadian Securitization 111.2 — Dollar Thrifty-Sponsored Canadian Securitization 93.5 — 97.8 — 111.2 — 132.2 25.6 45.1 10.3 813.2 184.8 1,473.5 10.3 $ 1,840.8 $ 967.2 $ 2,224.8 $ 761.6 ability to borrow under each revolving credit June 30, 2012,March 31, 2013, the Senior Term Facility had approximately $0.3$0.1 million available under the letter of credit facility and the Senior ABL Facility had $1,081.6$1,027.2 million available under the letter of credit facility sublimit, subject to borrowing base restrictions.June 30, 2012March 31, 2013 and December 31, 2011,2012, our International Fleet Financing No. 1 B.V., International Fleet Financing No. 2 B.V. and HA Funding Pty, Ltd. variable interest entities collectively had total assets primarily comprised of loans receivable and revenue earning equipment of $528.1$393.4 million and $456.3$440.8 million, respectively, and collectively had total liabilities primarily comprised of debt of $527.6$392.9 million and $455.8$440.3 million, respectively.June 30, 2012March 31, 2013 and December 31, 2011,2012, the following guarantees (including indemnification commitments) were issued and outstanding:ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)June 30, 2012March 31, 2013 and December 31, 2011,2012, the aggregate amounts accrued for environmental liabilities including liability for environmental indemnities, reflected in our condensed$1.4$2.6 million and $1.5$2.6 million, respectively. The accrual generally represents the estimated cost to study potential environmental issues at sites deemed to require investigation or clean-up activities, and the estimated cost to implement remediation actions, including on-going maintenance, as required. Cost estimates are developed by site. Initial cost estimates are based on historical experience at similar sites and are refined over time on the basis of in-depth studies of the sites. For many sites, the remediation costs and other damages for which we ultimately may be responsible cannot be reasonably estimated because of uncertainties with respect to factors such as our connection to the site, the materials there, the involvement of other potentially responsible parties, the application of laws and other standards or regulations, site conditions, and the nature and scope of investigations, studies, and remediation to be undertaken (including the technologies to be required and the extent, duration, and success of remediation).1314 to the Notes to our condensed consolidated financial statements included in this Report.78 and 1314 to the Notes to our condensed consolidated financialITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)45 and 1314 to the Notes to our audited annual consolidated financial statements included in our Form 10-K under the caption "Item 8—Financial Statements and Supplementary Data."June 30, 2012,March 31, 2013, our net income would decrease by an estimated $37.9$30.3 million over a twelve-month period.and six months ended June 30,March 31, 2013 and 2012, our consolidated statement of operations contained realized and unrealized losses relating to the effects of foreign currency of $1.0$2.3 million and $5.4$4.4 million, respectively.1314 to the Notes to our condensed consolidated financial statements included in this Report.three-month and six-monththree month periods ended June 30,March 31, 2013 and 2012, we recognized lossesa loss of $3.3$1.7 million and $1.5a gain of $1.8 million, respectively, in "Direct operating" on our consolidated statement of operations relating to our gasoline swaps. See Note 1314 to the Notes to our condensed consolidated financial statements included in this Report.
InflationITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)Inflation2010.2010 and 2012. A LKE Program for HERC has also been in place for several years. The program allows tax deferral if a qualified replacement asset is acquired within a specific time period after asset disposal. Accordingly, if a qualified replacement asset is not purchased within this limited time period, taxable gain is recognized. Over the last few years, for strategic purposes, such as cash management and fleet reduction, we have recognized some taxable gains in the program. In 2009, the bankruptcy filing of an original equipment manufacturer, or "OEM," also resulted in minimal gain recognition. We had sufficient net operating losses to fully offset the taxable gains recognized. We cannot offer assurance that the expected tax deferral will continue or that the relevant law concerning the programs will remain in its current form. An extended reduction in our car rental fleet could result in reduced deferrals in the future, which in turn could require us to make material cash payments for federal and state income tax liabilities. Our inability to obtain replacement financing as our fleet financing facilities mature would likely result in an extended reduction in the fleet. In the event of an extended fleet reduction, we believe the likelihood of making material cash tax payments in the near future is low because of our significant net operating losses. In August 2010, we elected to temporarily suspend the U.S. car rental LKE Program allowing cash proceeds from sales of vehicles to be utilized for various business purposes, including paying down existing debt obligations, future growth initiatives and for general operating purposes. From August 2010 through 2011, recognized tax gains on vehicle dispositions resulting from the LKE suspension were more than offset by 100% tax depreciation on newly acquired vehicles. During 2012 the allowable 50% bonus depreciation is allowed, which will continue to support suspensionhelped offset tax gains during the period of theLKE suspension. The U.S. car rental LKE Program through 2012 without adverse tax implications. The timing of reinstating the LKE Program is under continued analysis.On January 1, 2009, Bank of America acquired Merrill Lynch & Co., Inc., the parent company of MLGPE. Accordingly, Bank of America is now an indirect beneficial ownerwas reinstated on October 15, 2012.held by MLGPE and certain of its affiliates. For U.S. income tax purposes the transaction,significant shareholders, when combined with other unrelated transactions duringdispositions of Hertz Holdings' stock over the previous 36 months, may have resulted in a change in control as that term is defined in Section 382 of the Internal Revenue Code. Consequently, utilization of all pre-2009pre-2013 U.S. net operating losses is subject to an annual limitation. TheThis limitation, if any, is not expected to result in a loss of net operating losses or have a material adverse impact on taxes.56 of the Notes to our audited annual consolidated financial statements included in our Form 10-K under the caption "Item 8—Financial20122013 worldwide pre-tax pension expense is expected to be approximately $34.5$42.5 million, which would represent an increase of $13.2$7.8 million from 2011.2012. The anticipated increase in expense as compared to 20112012 is primarily due to lower expected rates of return in 2012,2013 and lower discount rates at the end of 20112012 compared to 2010 and a curtailment gain in the U.K. recorded in 2011.In June 2011,Financial Accounting Standards Board, or "FASB," issued Accounting Standards Update No. 2011-05, "Presentation of Comprehensive Income," requiring companiesNotes to present items of net income and other comprehensive income either in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutiveour condensed consolidated financial statements of net income and other comprehensive income. The amendmentsincluded in this update do not changeReport under the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. These provisions became effective for us beginning with the quarterly report for the period ended March 31, 2012. In December 2011, the FASB issued Accounting Standards Update No. 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05,caption "Item 8—Financial Statements and Supplementary Data." which defers the timing of implementing only those changes in Update 2011-05 that relate to the presentation of reclassification adjustments.June 30, 2012March 31, 2013 and for the three-month and six-monththree month periods ended June 30,March 31, 2013 and 2012 and 2011 included in this Form 10-Q, PricewaterhouseCoopers LLP reported that they applied limited procedures in accordance with professional standards for reviews of such unaudited interim financial information. However, their separate report dated AugustMay 2, 20122013 included in this Form 10-Q herein states that they did not audit and they do not express an opinion on such unaudited interim financial information. Accordingly, the degree of reliance on their report should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on such unaudited interim financial information because that report is not a "report" or "part" of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Securities Act of 1933.2011.2012. See "Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations—Market Risks," included in this Report.Based uponOn November 19, 2012, the Company completed the acquisition of Dollar Thrifty. The Company is in the process of reviewing Dollar Thrifty's operations and will be conducting control reviews pursuant to the Sarbanes-Oxley Act of 2002. See Note 5, "Business Combinations and Divestitures," to the unaudited interim consolidated financial statements included in this evaluation,Quarterly report on Form 10-Q for a discussion of the acquisition and related financial data. Excluding the Dollar Thrifty acquisition, our Chief Executive Officer and Chief Financial Officer concluded that no changes in our internal control over financial reporting have occurred during the three months ended June 30, 2012March 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.1112 to the Notes to our annual audited consolidated financial statements included in our Form 10-K.The followingare furnished on a supplemental basis:In June 2012, inDavis Landscape, Ltd. et al. v. Hertz Equipment Rental Corporation, the judge denied our motion for partial summary judgment on the Loss Damage Waiver claimplease see "Part I—Item I—Note 16—Contingencies and in July 2012, the judge granted our motion for partial summary judgment on the Environmental Recovery Fee claim. The court also entered an order referring the case to mediation by private consent of the parties.In May 2012, all briefing was completed inJanet Sobel and Daniel Dugan, PhD., individually and on behalf of all others similarly situated v. The Hertz Corporation on the two outstanding issues—unjust enrichment and damages. The briefing included expert reports as submitted by both sides.In May 2012, inMichael Shames et al. v. The Hertz Corporation et al., the district court issued an order preliminarily approving the settlement of this action; certifying a settlement class; certifying a class representative and lead counsel; and providing for class notice. The court also scheduled a final approval hearing for October 29, 2012. We have accrued our best estimate of the ultimate cost which is not material to our financial condition.In June 2012, a mediation was held inFun Services of Kansas City, Inc., individually and as the representative of a class of similarly-situated persons v. Hertz Equipment Rental Corporation. As a result of the mediation, the parties have reached an agreement in principle to settle this class action. A draft settlement agreement that addresses compensation to class members, class counsel fees and the claims process, and which would be subject to court approval, is being finalized by the parties' counsel. We have accrued our best estimate of the ultimate cost which is not material to our financial condition.As previously disclosed, on June 15, 2011 we received a subpoena from the staff of the Securities and Exchange Commission, or "SEC," seeking production of documents related to our proposed business combination with Dollar Thrifty Automotive Group, Inc. We are cooperating fully with the SEC's investigation. We do not expect this investigation to have any effect on a proposed business combination with Dollar Thrifty.2011.2012 with the exception of the following:Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under The Program* January 1, 2013 - January 31, 2013 — $ — — $ — February 1, 2013 - February 28, 2013 — — — — March 1, 2013 - March 31, 2013 23,200,000 20.14 23,200,000 — Total 23,200,000 $ 20.14 23,200,000 $ — * On March 6, 2013, Hertz Holdings announced that, in connection with a secondary offering of 60,050,777 shares of common stock of Hertz Holdings by the Sponsors, Hertz Holdings would repurchase 23,200,000 of the shares from the underwriters at a price of $20.14 per share. Hertz Holdings completed the repurchase of shares on March 12, 2013. (a)Exhibits:(a) Exhibits:
Date: AugustMay 2, 20122013
By:
/s/ ELYSE DOUGLAS
Chief Financial Officer
authorized officer)Description 10.7.84.1.7Sixth Supplemental Indenture, dated as of March 8, 2013, among Dollar Thrifty Automotive Group, Inc., DTG Operations, Inc., Dollar Rent A Car, Inc., Thrifty, Inc., DTG Supply, Inc., Thrifty Car Sales, Inc., Thrifty Rent-A-Car System, Inc., TRAC Asia Pacific, Inc., Thrifty Insurance Agency, Inc., The Hertz Corporation, as Issuer, the Existing Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee, relating to the 7.50% Senior Notes due 2018. 4.2.7 Sixth Supplemental Indenture, dated as of March 8, 2013, among Dollar Thrifty Automotive Group, Inc., DTG Operations, Inc., Dollar Rent A Car, Inc., Thrifty, Inc., DTG Supply, Inc., Thrifty Car Sales, Inc., Thrifty Rent-A-Car System, Inc., TRAC Asia Pacific, Inc., Thrifty Insurance Agency, Inc., The Hertz Corporation, as Issuer, the Existing Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee, relating to the 7.375% Senior Notes due 2021. 4.3.7 Fifth Supplemental Indenture, dated as of March 8, 2013, among Dollar Thrifty Automotive Group, Inc., DTG Operations, Inc., Dollar Rent A Car, Inc., Thrifty, Inc., DTG Supply, Inc., Thrifty Car Sales, Inc., Thrifty Rent-A-Car System, Inc., TRAC Asia Pacific, Inc., Thrifty Insurance Agency, Inc., The Hertz Corporation, as Issuer, the Existing Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee, relating to the 6.75% Senior Notes due 2019. 4.4.6 Fourth Supplemental Indenture, dated as of March 8, 2013, among Dollar Thrifty Automotive Group, Inc., DTG Operations, Inc., Dollar Rent A Car, Inc., Thrifty, Inc., DTG Supply, Inc., Thrifty Car Sales, Inc., Thrifty Rent-A-Car System, Inc., TRAC Asia Pacific, Inc., Thrifty Insurance Agency, Inc., The Hertz Corporation, as Issuer, the Existing Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee, relating to the 5.875% Senior Notes due 2020 and the 6.250% Senior Notes due 2022. 4.4.7 Fifth Supplemental Indenture, dated as of March 28, 2013, among Dollar Thrifty Automotive Group, Inc., DTG Operations, Inc., Dollar Rent A Car, Inc., Thrifty, Inc., DTG Supply, Inc., Thrifty Car Sales, Inc., Thrifty Rent-A-Car System, Inc., TRAC Asia Pacific, Inc., Thrifty Insurance Agency, Inc., The Hertz Corporation, as Issuer, the Existing Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee, relating to the 4.250% Senior Notes due 2018. 4.4.8 Exchange and Registration Rights Agreement, dated as of March 28, 2013, among The Hertz Corporation, the Guarantors named therein, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several Initial Purchasers, relating to the 4.250% Senior Notes due 2018. 10.1.4 Amendment No. 2, dated as of April 8, 2013, to that certain Credit Agreement, dated as of March 11, 2011, among The Hertz Corporation, the several banks and financial institutions parties thereto as Lenders, and Deutsche Bank AG New York Branch, as Administrative Agent (Incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-33139), as filed on April 8, 2013). 10.6.11 Form of Price VestedPerformance Stock Unit Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan.Plan (form used for EBITDA margin awards with 2-year vesting schedule).10.7.910.6.12
Form of Non-Employee Director RestrictedPerformance Stock Unit Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan.Plan (form used for EBITDA margin awards with 3-year vesting schedule).10.7.1010.11.3Form of Director Designee Restricted Stock Unit Agreement underAmendment to the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan.Severance Plan for Senior Executives, effective as of February 11, 2013.
15
Letter from PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, dated AugustMay 2, 2012,2013, relating to Financial Information
31.1–31.2
Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer
32.1–32.2
18 U.S.C. Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer
101.INS
XBRL Instance Document*Document
101.SCH
XBRL Taxonomy Extension Schema Document*Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document*Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document*Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document*Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document*Document*Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.