1
EXHIBIT 99
SELECTED FINANCIAL DATA OF THE HERTZ CORPORATION
(IN MILLIONS OF DOLLARS)
The following table presents selected consolidated financial information of
The Hertz Corporation ("Corporation"), which is unaudited for the year ended
December 31, 1994 and which has been extracted from the audited financial
statements for the years ended December 31, 1993, 1992, 1991 and 1990. The
information in the table and the notes thereto should be read in conjunction
with the financial statements and the related notes thereto contained in the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1993,
its Current Report on Form 8-K/A No. 1 dated July 14, 1994, and its Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1994, June 30, 1994 and
September 30, 1994.
Years Ended December 31,
--------------------------------------------------
1994 1993 1992 1991 1990
------ ------ ------ ------ ------
REVENUES.............................................. $3,294 $2,855 $2,816 $2,626 $2,667
------ ------ ------ ------ ------
EXPENSES:
Direct operating.................................... 1,766 1,647 1,627 1,486 1,470
Depreciation of revenue earning equipment........... 703(a) 524(a) 497(b) 493 526
Selling, general and administrative................. 385 336 353 339 348
Interest, net of interest income of $7, $11, $4, $10
and $25........................................... 277 246 307 304 300
------ ------ ------ ------ ------
3,131 2,753 2,784 2,622 2,644
------ ------ ------ ------ ------
INCOME BEFORE INCOME TAXES............................ 163 102 32 4(b) 23
PROVISION (BENEFIT) FOR TAXES ON INCOME............... 72(a) 49(a) 22(b) (1)(b) (11)(c)
------ ------ ------ ------ ------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES............................... 91 53 10 5 34
CUMULATIVE EFFECT ON PRIOR YEARS OF CHANGES IN METHOD
OF ACCOUNTING FOR --
Postretirement Benefits (d)......................... -- -- (4) -- --
Vehicle Warranties (e).............................. -- -- -- (4) --
------ ------ ------ ------ ------
NET INCOME............................................ $ 91 $ 53 $ 6 $ 1 $ 34
====== ====== ====== ====== ======
Ratio of Earnings to Fixed Charges (f)................ 1.4 1.3 1.1 1.0 1.1
Balance Sheet Data at End of Period:
Total Assets........................................ $6,521 $4,688 $4,222 $4,294 $4,334
Total Debt.......................................... 4,414 2,940 2,550 2,702 2,798
Shareholders' Equity................................ 736 617 580 599 600
Ratio of Total Debt to Shareholders' Equity......... 6.0 4.8 4.4 4.5 4.7
- ---------------
(a) Effective July 1, 1994, certain lives being used to compute the provision
for depreciation of revenue earning equipment were increased to reflect
changes in the estimated residual values to be realized when the equipment
is sold. As a result of this change, depreciation of revenue earning
equipment for year 1994 was decreased by $9.6 million. Depreciation of
revenue earning equipment for the year 1993 includes net credits of $28.1
million as compared to net credits of $16.9 million in 1992, primarily
attributable to higher proceeds received in 1993 on disposal of the
equipment. The tax provision for the year 1994 includes a $1.5 million
credit resulting from adjustments made to tax accruals in connection with
tax audit evaluations and the effects of prior years' tax sharing
arrangements between the Corporation and its former parent company, RCA. The
tax provision for the year 1993 includes a $1.1 million charge relating to
the increase in net deferred tax liabilities as of January 1, 1993 due to
changes in the tax laws enacted in August 1993 and a $2.0 million credit
resulting from adjustments made to tax accruals in connection with tax audit
evaluations and the effects of prior years' tax sharing arrangements between
the Corporation and its former parent companies, UAL and RCA.
9
2
Effective January 1, 1993, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, which did not have a material effect on the Corporation's
consolidated financial position, results of operations or cash flows.
(b) Depreciation of revenue earning equipment for the year 1992 includes net
credits of $16.9 million as compared to net charges of $5.4 million in 1991,
primarily attributable to higher proceeds received in 1992 on disposal of
the equipment and the elimination of losses incurred in 1991 due to the
increase in 1992 of "non-risk" vehicles acquired which are returned to the
vehicle manufacturers at pre-established prices.
The tax provision includes credits of $9.8 million, $16.7 million, and
$38.8 million for the years 1992, 1991 and 1990, respectively, resulting
from adjustments made to tax accruals in connection with tax audit
evaluations and the effects of prior years' tax sharing arrangements
between the Corporation and its former parent companies, UAL and RCA, and
the reversal of tax accruals no longer required and benefits realized
relating to certain foreign operations. The tax provision for the year 1991
also includes benefits of $5.5 million related to the close down and sale
of certain unprofitable foreign operations.
The decrease in income before income taxes for the year ended December 31,
1991, as compared to the prior year, was due to provisions made in 1991 of
approximately $20 million primarily incurred to close down certain
unprofitable foreign operations and depreciation adjustments made to
residual values of certain vehicles, $15 million of lower interest income
in 1991 primarily relating to refunds of prior years' income taxes, and the
adverse effects of the decrease in travel due to the war in the Persian
Gulf and a slowdown in the economy. The decrease was partly offset by net
credits of $8.9 million relating to the sale and disposition of certain
properties.
(c) The tax provision for the year 1990 includes credit adjustments of $38.8
million, resulting from adjustments made to tax accruals in connection with
tax audit evaluations and the effects of prior years' tax sharing
arrangements between the Corporation and its former parent companies, UAL
and RCA.
(d) Effective January 1, 1992, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 106, Employers' Accounting
for Postretirement Benefits Other than Pensions ("FAS No. 106"), which
requires that postretirement health care and other non-pension benefits be
accrued during the years the employee renders the necessary service. Prior
to 1992, the Corporation accrued for such benefits on a pay-as-you-go basis.
As of January 1, 1992, the Corporation recorded a cumulative decrease in net
income of $4.3 million (net of $2.7 million tax benefit) as a result of
implementing FAS No. 106.
(e) Effective January 1, 1991, the Corporation adopted the provisions of FASB
Technical Bulletin No. 90-1, Accounting for Separately Priced Extended
Warranty and Product Maintenance Contracts ("FAS No. 90-1"), which requires
that proceeds received from warranty contracts should be deferred and
recognized in income on a straight line basis over the contract period, and
costs of services performed under the contract should be charged to expense
as incurred. Prior to 1991, when vehicles were sold under an extended
warranty contract, the proceeds received by the Corporation under such
contract, net of estimated costs to be incurred in fulfilling obligations
under those contracts, were recorded in income when the sale occurred. As of
January 1, 1991, the Corporation recorded a cumulative decrease in net
income of $3.5 million (net of $2.2 million tax benefit) as a result of
implementing FAS No. 90-1.
(f) Earnings have been calculated by adding interest expense and the portion of
rentals estimated to represent the interest factor to income before income
taxes. Fixed charges include interest charges (including capitalized
interest) and the portion of rentals estimated to represent the interest
factor.
10