SOURCE: The Hertz Corporation

April 26, 2007 07:00 ET

Hertz Reports Strong First Quarter Operating Results

PARK RIDGE, NJ -- (MARKET WIRE) -- April 26, 2007 --

--  Record first quarter revenues of $1.92 billion, up 7.6% compared with
    the first quarter of 2006
--  Adjusted pre-tax income increased significantly to $16.1 million,
    compared with a loss of $11.6 million in the first quarter of 2006
--  Corporate EBITDA for the quarter improved by 19.8% year-over-year, to
    $238.0 million
--  Net corporate debt decreased by $122.9 million during the first
    quarter with a year-over-year improvement of 9.5%, or $462.2 million
--  The Company re-affirms its full year 2007 revenues and earnings
    guidance
    
Hertz Global Holdings, Inc. (NYSE: HTZ) (with its subsidiaries, the "Company" or "we") reported record first quarter 2007 revenues of $1.92 billion, an increase of 7.6% over the same period in 2006. Worldwide car rental revenues for the quarter were $1.53 billion, an increase of 7.6%, while revenues from worldwide equipment rental were $389.9 million, up 7.4% over the prior year period.

Corporate EBITDA(1) for the first quarter of 2007 was $238.0 million, an increase of 19.8% over the first quarter of 2006, while adjusted pre-tax income(2), a measurement the Company believes better reflects financial results from ongoing operations, was $16.1 million, compared with a loss of $11.6 million in the prior year period.

The Company incurred a loss before taxes and minority interest of $90.6 million during the quarter, a result that includes more than $50 million of non-recurring charges, compared with a $63.3 million loss in the first quarter of 2006. The first quarter is typically the weakest for car and equipment rental companies due to the seasonality of the businesses. The Company's loss for the first quarter of 2007 is attributable, in part, to a $32.6 million restructuring charge and an additional non-cash interest charge of $19.2 million, primarily related to debt restructuring. The Company anticipates annualized savings of approximately $140 million from previously announced job reductions, and $8.5 million in annualized savings attributable to debt restructuring. There will be additional restructuring actions during 2007 which will be announced when plans are finalized.

Adjusted net income(3) was $6.3 million, resulting in adjusted earnings per share for the quarter of $0.02, based on the pro-forma post-IPO diluted number of shares outstanding (324.8 million), compared with a loss of $10.8 million, or $(0.03) per share, in the prior year period. The Company incurred a net loss of $62.6 million for the first quarter of 2007, or $(0.19) per share on a fully diluted basis, compared with a loss of $49.2 million, or $(0.21) per share on a fully diluted basis in the same period last year.

INCOME MEASUREMENTS, FIRST QUARTER 2007 & 2006

                            Q1 2007                      Q1 2006
                  ---------------------------  ---------------------------
                                      Fully                        Fully
                                     Diluted                      Diluted
(in millions,     Pre-tax    Net    Earnings   Pre-tax    Net    Earnings
 except per share Income   Income     (Loss)   Income   Income     (Loss)
 amounts)         (Loss)   (Loss)   Per Share  (Loss)   (Loss)   Per Share
                  -------  -------  ---------  -------  -------  ---------
Earnings Measures
 (EPS based on
 326.6M
 and 229.5M
 shares)          $ (90.6) $ (62.6) $   (0.19) $ (63.3) $ (49.2) $   (0.21)
                           =======  =========           =======  =========

Adjustments:
  Purchase
   accounting        23.1                         22.0
  Non-cash
   interest          48.4                         29.2
  Restructuring
   charges           32.6                            -
  Other               2.6                          0.5
                  -------                      -------

Adjusted Pre-Tax
 Income (Loss)       16.1     16.1               (11.6)   (11.6)

Assumed
 (provision)
 benefit for
 income taxes at
 35%                          (5.7)                         4.0
Minority interest             (4.1)                        (3.2)
                  -------  -------             -------  -------

Earnings
 Measures, as
 adjusted (EPS
 based on pro
 forma fully
 diluted post-
 IPO shares
 of 324.8M)       $  16.1  $   6.3  $    0.02  $ (11.6) $ (10.8) $   (0.03)
                  =======  =======  =========  =======  =======  =========




(in millions)                             Q1 2007    Q1 2006
                                         ---------  ---------
EBITDA(4)                                $   663.8  $   616.1
Adjustments:
 Car rental fleet interest                  (102.8)     (98.0)
 Car rental fleet depreciation              (395.9)    (345.6)
 Non-cash expenses and charges                37.7       31.4
 Extraordinary, unusual or non-recurring
  gains and losses                            35.2       (6.0)
 Sponsors' fees                                  -        0.8
                                         ---------  ---------
Corporate EBITDA                         $   238.0  $   198.7
                                         =========  =========

The Company generated strong cash flows during the first quarter of 2007, with net corporate debt(4) decreasing from $4.5 billion as of December 31, 2006 to $4.4 billion as of March 31, 2007, and compared with $4.9 billion as of March 31, 2006. Levered after-tax cash flows after fleet growth(4) were $122.9 million for the quarter, compared with $(47.1) million in the first quarter of 2006. The stronger cash flows were generated from lower capital expenditures, improved working capital and higher Corporate EBITDA.

Mark P. Frissora, the Company's Chairman and Chief Executive Officer, said, "Hertz achieved strong first quarter operating results due to revenue growth and additional progress on our cost management initiatives, as we reduced direct operating expenses by 2.4 percentage points of revenues compared with the first quarter of 2006. Our revenue growth is the result of geographic, market and product diversification. Our global platforms, complementary rental businesses and cost management discipline set Hertz apart from the competition and are driving our financial performance."

WORLDWIDE CAR RENTAL

Worldwide car rental revenues were $1.53 billion for the first quarter of 2007, an increase of 7.6% over the prior year period. Rental rate revenue per transaction day(4) was flat for the quarter [(0.1%) U.S., 0.4% International]. Pricing in the U.S. is influenced by the Company's double-digit revenue growth in the insurance replacement market. Rentals in this sector typically generate lower rental rate revenue per transaction day offset by significantly longer rental length and lower car costs. Transaction days improved by 4.2% (3.2% U.S., 6.6% International). Transaction day improvement reflects the Company's growth in the off-airport business and its improving airport market share during the quarter, offset partially by difficult year-over-year comparisons in the Gulf Coast regions which experienced heavy hurricane-related rental demand in the first quarter of 2006. This will continue to impact the year-over-year comparisons for the second quarter, although at a lower level, before it subsides.

Corporate EBITDA was $74.0 million, a 14.7% increase over the first quarter of 2006.

Adjusted pre-tax income was $36.9 million, more than double the $17.5 million adjusted pre-tax income earned during the first quarter of 2006. The result was driven by transaction day improvement and a 1.2 percentage points of revenues improvement in overall expenses, year-over-year.

The worldwide average number of Company-operated cars for the first quarter of 2007 was 423,400, an increase of 5.1% over the prior year period, reflecting current year volume increases to meet rental demand.

WORLDWIDE EQUIPMENT RENTAL

Worldwide equipment rental revenues were a record $389.9 million, a 7.4% increase over the prior year period. Revenue growth reflects the strength of our equipment rental segment's business in its markets in the United States, Canada, France and Spain, and the diversification of our product and market mix. Pricing increased by 1.7% despite the effects of the slower non-residential construction business in the United States, as well as the unfavorable year-over-year comparisons in the Gulf Coast regions which experienced heavy hurricane-related rental demand in the first quarter of 2006. This will continue to impact the year-over-year comparisons for the second quarter, although at a lower level, before it subsides.

Corporate EBITDA improved to $173.9 million for the quarter, an 18.7% increase over first quarter 2006.

Adjusted pre-tax income was $65.6 million, a 23.1% improvement year-over-year. The results are attributable to revenue growth, a decrease in overall expenses of 2.1 percentage points of revenues year-over-year, and stronger year-over-year fleet deletions and lower new fleet purchases.

The average acquisition cost of rental equipment operated during the first quarter of 2007 increased 12.1% to $3.09 billion, and net revenue earning equipment as of March 31, 2007 was $2.42 billion, a 10.4% increase over the amount as of March 31, 2006.

OUTLOOK

The Company re-affirms the full year 2007 revenues, Corporate EBITDA, adjusted net income and adjusted net income per share guidance provided in its earnings announcement dated March 12, 2007, and is now providing full year 2007 guidance for adjusted pre-tax income. The Company forecasts revenues of $8.5 billion to $8.6 billion, an increase of 5% to 7% for both car and equipment rental, Corporate EBITDA in the range of $1.54 billion to $1.57 billion, an increase of between 12% to 14%, adjusted pre-tax income in the range of $600 million to $630 million, an increase of between 23% and 29%, and adjusted net income of $372 million to $395 million, an increase of between 24% to 32%, or $1.15 to $1.22 per share, based on the pro forma post-IPO diluted number of shares outstanding (324.8 million)(5).

RESULTS OF THE HERTZ CORPORATION

The Company's operating subsidiary, The Hertz Corporation ("Hertz"), posted the same revenues, Corporate EBITDA, loss before income taxes and minority interest, adjusted pre-tax income, net loss and adjusted net income for the first quarter of 2007 as did the Company.

(1) Corporate EBITDA, a non-GAAP measure of profitability, consists of earnings before net interest expense (other than interest expense relating to certain car rental fleet financing), income taxes, depreciation (other than depreciation related to the car rental fleet), amortization and certain other items specified in the credit agreements governing the Company's credit facilities. See the accompanying reconciliations.

(2) Adjusted pre-tax income, a non-GAAP measure of profitability, represents income before income taxes and minority interest plus non-cash purchase accounting charges, non-cash debt charges relating to the amortization of debt financing costs and debt discounts and certain other one-time or non-operational items. See the accompanying reconciliations. Beginning in 2007, the Company has adopted adjusted pre-tax income (loss) as its segment profit metric, replacing income (loss) before income taxes and minority interest. This measure will be part of the Company's filings with the United States Securities and Exchange Commission, beginning with its Form 10-Q filing for the first quarter of 2007.

(3) Adjusted net income, a non-GAAP measure of profitability, represents the adjusted pre-tax amount less a provision for income taxes derived utilizing a normalized income tax rate (35%) and minority interest. See the accompanying reconciliations.

(4) EBITDA, net corporate debt, levered after-tax cash flows after fleet growth and rental rate revenue per transaction day are non-GAAP measures. See the accompanying reconciliations.

(5) Management believes that Corporate EBITDA, adjusted pre-tax income and adjusted net income are useful in measuring the comparable results of the company period-over-period. The GAAP measures most directly comparable to each of Corporate EBITDA, adjusted pre-tax income and adjusted net income are income before income taxes and minority interest ("pre-tax income") and net income. Because of the forward-looking nature of the Company's forecasted Corporate EBITDA, adjusted pre-tax income and adjusted net income, specific quantifications of the amounts that would be required to reconcile forecasted pre-tax and net income to forecasted Corporate EBITDA, adjusted pre-tax income and adjusted net income are not available. The Company believes that providing estimates of the amounts that would be required to reconcile the range of these forecasted non-GAAP measures to forecasted pre-tax income and net income would imply a degree of precision that could be confusing or misleading to investors.

CONFERENCE CALL INFORMATION

The Hertz Global Holdings, Inc. first quarter 2007 earnings conference call will be held on Thursday, April 26, 2007, at 10:00 a.m. (EDT). To access the conference call live, dial 888-428-4470 (U.S.) or 612-332-1020 (International) using the pass code 870431 or listen via webcast at www.hertz.com/investorrelations. The conference call will be available through May 3, 2007 by calling 800-475-6701 (U.S.) or 320-365-3844 (International) using the pass code 870431. The press release and related tables containing the reconciliations of non-GAAP measures will be available on our website, www.hertz.com/investorrelations.

ABOUT THE COMPANY

Hertz, the world's largest general use car rental brand, operates from approximately 7,600 locations in 145 countries worldwide. Hertz is the number one airport car rental brand in the United States and at 69 major airports in Europe as well as the only car rental company with corporate and licensee locations in Africa, Asia, Australia, Latin America and North America. Product and service initiatives such as Hertz #1 Club Gold, NeverLost customized, onboard navigation systems, SIRIUS Satellite Radio, and unique cars and SUVs offered through Hertz's Prestige, Fun and Green collections, set Hertz apart from the competition. Hertz also operates one of the largest equipment rental companies in the United States and Canada combined, with corporate locations in France and Spain. Hertz Global Holdings, Inc. is the corporate parent of Hertz.

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements contained in this press release include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these statements. Forward-looking statements include information concerning the Company's outlook, anticipated revenues, results of operations and implementation of productivity and efficiency initiatives, including targeted job reductions, and the anticipated savings and restructuring charges expected to be realized or incurred in connection therewith. These statements often include words such as "believe," "expect," "project," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "should," "forecast" or similar expressions. These statements are based on certain assumptions that the Company has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors that the Company believes are appropriate in these circumstances. As you read this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. Many factors could affect the Company's actual results and its ability to implement its cost savings and efficiency initiatives successfully, and could cause the Company's actual results to differ materially from those expressed in the forward-looking statements. Some important factors include: the Company's operations; economic performance; financial condition; management forecasts; efficiencies, cost savings and opportunities to increase productivity and profitability; income and margins; liquidity; anticipated growth; economies of scale; the economy; future economic performance; the Company's ability to maintain profitability during adverse economic cycles and unfavorable external events (including war, terrorist acts, natural disasters and epidemic disease); future acquisitions and dispositions; litigation; potential and contingent liabilities; management's plans; taxes; and refinancing of existing debt. In light of these risks, uncertainties and assumptions, the forward-looking statements contained in this press release might not prove to be accurate and you should not place undue reliance upon them. All forward-looking statements attributable to the Company or persons acting on the Company's behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

The Company cautions you therefore that you should not rely unduly on these forward-looking statements. You should understand the risks and uncertainties discussed in "Risk Factors" and elsewhere in the Company's 2006 Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as filed with the United States Securities and Exchange Commission, or the "SEC," on March 30, 2007, could affect the Company's future results and the outcome of its implementation of its cost savings and efficiency initiatives, and could cause those results or other outcomes to differ materially from those expressed or implied in the Company's forward-looking statements.

Attachments:
Table 1: Condensed Consolidated Statements of Operations for the Three
         Months Ended March 31, 2007 and 2006
Table 2: Condensed Consolidated Statements of Operations As Reported and
         As Adjusted for the Three Months Ended March 31, 2007 and 2006
Table 3: Segment Information for the Three Months Ended March 31, 2007 and
         2006
Table 4: Selected Operating and Financial Data as of or for the Three
         Months Ended March 31, 2007 and 2006
Table 5: Non-GAAP Reconciliations of Adjusted Pre-Tax Income (Loss),
         Adjusted Net Income (Loss), EBITDA, Corporate EBITDA, Unlevered
         Pre-tax Cash Flow, Levered After-Tax Cash Flow Before Fleet Growth
         and Levered After-Tax Cash Flow After Fleet Growth for the Three
         Months Ended March 31, 2007 and 2006
Table 6: Non-GAAP Reconciliations of Operating Cash Flows to EBITDA, Net
         Corporate Debt, Net Fleet Debt, Car Rental Rate Revenue Per
         Transaction Day and Equipment Rental and Rental Related Revenue
         for the Three Months Ended March 31, 2007 and 2006



                                                                   Table 1
                        HERTZ GLOBAL HOLDINGS, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In millions, except per share amounts)
                                Unaudited


                                 Three Months Ended       As a Percent
                                      March 31,         of Total Revenues
                                --------------------  -------------------
                                  2007       2006       2007       2006  

                                ---------  ---------  --------   --------
Total revenues                  $ 1,921.5  $ 1,786.6     100.0%     100.0%
                                ---------  ---------  --------   --------

Expenses:
Direct operating                  1,114.3    1,070.1      58.0%      59.9%
Depreciation of revenue earning
 equipment                          467.8      407.3      24.3%      22.8%

Selling, general and
 administrative                     200.4      162.2      10.4%       9.0%
Interest, net of interest
 income                             229.6      210.3      12.0%      11.8%
                                ---------  ---------  --------   --------
Total expenses                    2,012.1    1,849.9     104.7%     103.5%
                                ---------  ---------  --------   --------

Loss before income taxes and
 minority interest                  (90.6)     (63.3)     (4.7)%     (3.5)%
Benefit  for taxes on income         32.1       17.3       1.6 %      0.9 %
Minority interest                    (4.1)      (3.2)     (0.2)%     (0.2)%
                                ---------  ---------  --------   --------
Net loss                        $   (62.6) $   (49.2)     (3.3)%     (2.8)%
                                ---------  ---------  --------   --------


Loss per share:
     Basic                      $   (0.20) $   (0.21)
     Diluted                    $   (0.19) $   (0.21)

Weighted average number of
 shares outstanding:
     Basic                          320.6      229.5
     Diluted                        326.6      229.5



                                                                   Table 2
                        HERTZ GLOBAL HOLDINGS, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                              (In millions)
                                Unaudited


                                     Three Months Ended March 31, 2007
                                 -----------------------------------------
                                     As                            As
                                   Reported   Adjustments        Adjusted
                                 -----------  -----------      -----------
Total revenues                   $   1,921.5  $         -      $   1,921.5
                                 -----------  -----------      -----------

Expenses:
Direct operating                     1,114.3        (31.5) (a)     1,082.8
Depreciation of revenue earning
 equipment                             467.8         (4.3) (b)       463.5
Selling, general and
 administrative                        200.4        (22.5) (c)       177.9
Interest, net of interest income       229.6        (48.4) (d)       181.2
                                 -----------  -----------      -----------
Total expenses                       2,012.1       (106.7)         1,905.4
                                 -----------  -----------      -----------

(Loss) income before income
 taxes and
 minority interest                     (90.6)       106.7             16.1

Benefit (provision) for taxes on
 income                                 32.1        (37.8) (e)        (5.7)
Minority interest                       (4.1)           -             (4.1)
                                 -----------  -----------      -----------
Net (loss) income                $     (62.6) $      68.9      $       6.3
                                 -----------  -----------      -----------



                                     Three Months Ended March 31, 2006
                                 -----------------------------------------
                                     As                            As
                                   Reported   Adjustments        Adjusted
                                 -----------  -----------      -----------
Total revenues                   $   1,786.6  $         -      $   1,786.6
                                 -----------  -----------      -----------

Expenses:
Direct operating                     1,070.1        (19.9) (a)     1,050.2
Depreciation of revenue earning
 equipment                             407.3         (1.9) (b)       405.4
Selling, general and
 administrative                        162.2         (0.7) (c)       161.5
Interest, net of interest income       210.3        (29.2) (d)       181.1
                                 -----------  -----------      -----------
Total expenses                       1,849.9        (51.7)         1,798.2
                                 -----------  -----------      -----------

(Loss) income before income
 taxes and
 minority interest                     (63.3)        51.7            (11.6)

Benefit (provision) for taxes on
 income                                 17.3        (13.3) (e)         4.0
Minority interest                       (3.2)           -             (3.2)
                                 -----------  -----------      -----------
Net (loss) income                $     (49.2) $      38.4      $     (10.8)
                                 -----------  -----------      -----------


(a) Represents the increase in amortization of other intangible assets,
    depreciation of property and equipment and accretion of certain
    revalued liabilities relating to purchase accounting.  In 2007, also
    includes $12.9 million of restructuring charges.
(b) Represents the increase in depreciation of revenue earning equipment
    based upon their revaluation  relating to purchase accounting.
(c) Represents the increase in depreciation of property and equipment
    relating to purchase accounting and CEO transition payments.  In 2007,
    also includes $19.7 million of restructuring charges.  In 2006, also
    includes a gain on the sale of swap derivative, net of a loss on the
    mark to market of the Euro denominated debt.
(d) Represents non-cash debt charges relating to the amortization of debt
    financing costs and debt discount.  In 2007, also includes $16.1
    million of debt restructuring and $12.8 million associated with the
    ineffectiveness of our interest rate swaps.
(e) Represents a provision for income taxes derived utilizing a normalized
    income tax rate (35%).



                                                                   Table 3
                        HERTZ GLOBAL HOLDINGS, INC.
                            SEGMENT INFORMATION
                  (In millions, except per share amounts)
                                Unaudited



                                                      Three Months Ended
                                                           March 31,
                                                     --------------------
                                                       2007       2006
                                                     ---------  ---------
Revenues:
  Car Rental                                         $ 1,529.7  $ 1,421.6
  Equipment Rental                                       389.9      363.1
  Corporate and Other                                      1.9        1.9
                                                     ---------  ---------
                                                     $ 1,921.5  $ 1,786.6
                                                     ---------  ---------

Income (loss) before income taxes and
 minority interest:
  Car Rental                                         $   (16.8) $   (11.1)
  Equipment Rental                                        46.0       34.5
  Corporate and Other                                   (119.8)     (86.7)
                                                     ---------  ---------
                                                     $   (90.6) $   (63.3)
                                                     ---------  ---------

Corporate EBITDA:
  Car Rental                                         $    74.0  $    64.5
  Equipment Rental                                       173.9      146.5
  Corporate and Other                                     (9.9)     (12.3)
                                                     ---------  ---------
                                                     $   238.0  $   198.7
                                                     ---------  ---------

Adjusted Pre-Tax Income (Loss):
  Car Rental                                         $    36.9  $    17.5
  Equipment Rental                                        65.6       53.3
  Corporate and Other                                    (86.4)     (82.4)
                                                     ---------  ---------
                                                     $    16.1  $   (11.6)
                                                     ---------  ---------

Adjusted Net Income (Loss):
  Car Rental                                         $    24.0  $    11.4
  Equipment Rental                                        42.6       34.6
  Corporate and Other                                    (60.3)     (56.8)
                                                     ---------  ---------
                                                     $     6.3  $   (10.8)
                                                     ---------  ---------

Adjusted Diluted Earnings (Loss) Per Share           $    0.02  $   (0.03)

Pro forma post-IPO diluted number of shares
  outstanding                                            324.8      324.8



                                                                   Table 4
                        HERTZ GLOBAL HOLDINGS, INC.
                  SELECTED OPERATING AND FINANCIAL DATA


                                                 Three Months   Percent
                                                 Ended, or as  Change from
                                                 of March 31,  prior year
                                                      2007       period
                                                  -----------  ----------
Selected Car Rental Operating Data

Worldwide transaction days (in thousands)              28,936         4.2 %
  Domestic                                             20,846         3.2 %
  International                                         8,090         6.6 %

Worldwide rental rate revenue per
 transaction day (a)                              $     44.72         0.0 %
  Domestic                                        $     44.39        (0.1)%
  International (b)                               $     45.56         0.4 %

Worldwide average  number of company-
 operated cars during period                          423,400         5.1 %
  Domestic                                            302,500         4.9 %
  International                                       120,900         5.7 %

Worldwide revenue earning equipment,
 net (in millions of dollars)                     $   8,036.6        (1.7)%

Selected Worldwide Equipment Rental Operating
 Data
Rental and rental related revenue (in
 millions of dollars) (a) (b)                     $     348.0         8.2 %
Same store revenue growth (a)                             4.8%      (82.7)%
Average acquisition cost of rental equipment
 operated during period (in millions of dollars)  $   3,092.1        12.1 %
Revenue earning equipment, net (in
  millions of dollars)                            $   2,422.4        10.4 %

Other Financial Data (in millions of dollars)
Cash flows provided by operating activities       $   1,124.8        (6.7)%
Levered after-tax cash flow before fleet
 growth (a)                                             441.1        21.5 %
Levered after-tax cash after fleet growth (a)           122.9         N/M
EBITDA (a)                                              663.8         7.7 %
Corporate EBITDA (a)                                    238.0        19.8 %

Selected Balance Sheet Data (in millions of
 dollars)
                                                   March 31,
                                                     2007
                                                  -----------
Cash and equivalents                              $     476.9
Total revenue earning equipment, net                 10,459.0
Total assets                                         18,526.8
Total debt                                           11,756.9
Net corporate debt (a)                                4,414.4
Net fleet debt (a)                                    6,673.8
Stockholders' equity                                  2,482.8

(a) Represents a non-GAAP measure, see the accompanying reconciliations and
    definitions.
(b) Based on 12/31/06 foreign exchange rates.



                                                                    Table 5
                        HERTZ GLOBAL HOLDINGS, INC.
           RECONCILIATION OF GAAP TO NON-GAAP EARNINGS MEASURES
                  (In millions, except per share amounts)

ADJUSTED PRE-TAX INCOME (LOSS) AND  ADJUSTED NET INCOME (LOSS)

                                    Three Months Ended March 31, 2007
                                ------------------------------------------
                                   Car     Equipment  Corporate
                                  Rental     Rental   and Other    Total
                                ---------  ---------  ---------  ---------

(Loss) income before income
 taxes and minority interest    $   (16.8) $    46.0  $  (119.8) $   (90.6)
Adjustments:
  Purchase accounting (a)             7.7       15.0        0.4       23.1
  Non-cash debt charges (b)          26.3        2.8       19.3       48.4
  Restructuring charges              19.7        1.8       11.1       32.6
  CEO transition payments               -          -        2.6        2.6
                                ---------  ---------  ---------  ---------
Adjusted pre-tax income (loss)       36.9       65.6      (86.4)      16.1
Assumed (provision) benefit for
 income taxes of 35%                (12.9)     (23.0)      30.2       (5.7)
Minority interest                       -          -       (4.1)      (4.1)
                                ---------  ---------  ---------  ---------
Adjusted net income (loss)      $    24.0  $    42.6  $   (60.3) $     6.3
                                =========  =========  =========  =========

Adjusted Diluted Earnings Per
 Share                                                           $    0.02

Pro forma post-IPO diluted
 number of shares outstanding                                        324.8

                                     Three Months Ended March 31, 2006
                                ------------------------------------------
                                   Car     Equipment  Corporate
                                  Rental     Rental   and Other    Total
                                ---------  ---------  ---------  ---------

(Loss) income before income
 taxes and minority interest    $   (11.1) $    34.5  $   (86.7) $   (63.3)
Adjustments:
  Purchase accounting (a)             6.5       14.9        0.6       22.0
  Non-cash debt charges (b)          22.1        3.9        3.2       29.2
  Mark-to-market Euro
   denominated debt (c)                 -          -        6.5        6.5
  Gain on sale of swap
   derivative                           -          -       (6.6)      (6.6)
  CEO transition payments               -          -        0.6        0.6
                                ---------  ---------  ---------  ---------
Adjusted pre-tax income (loss)       17.5       53.3      (82.4)     (11.6)
Assumed (provision) benefit for
 income taxes of 35%                 (6.1)     (18.7)      28.8        4.0
Minority interest                       -          -       (3.2)      (3.2)
                                ---------  ---------  ---------  ---------
Adjusted net income (loss)      $    11.4  $    34.6  $   (56.8) $   (10.8)
                                =========  =========  =========  =========

Adjusted Diluted Loss Per Share                                  $   (0.03)

Pro forma post-IPO diluted
 number of shares outstanding                                        324.8



EBITDA, CORPORATE EBITDA, UNLEVERED PRE-TAX CASH FLOW,
LEVERED AFTER-TAX CASH FLOW BEFORE  FLEET GROWTH AND AFTER FLEET GROWTH

                                     Three Months Ended March 31, 2007
                                ------------------------------------------
                                   Car    Equipment   Corporate
                                 Rental     Rental    and Other   Total
                                ---------  ---------  ---------  ---------

(Loss) income before income
 taxes and minority interest    $   (16.8) $    46.0  $  (119.8) $   (90.6)
  Depreciation and amortization     437.4       89.9        1.6      528.9
  Interest, net of interest
   income                           105.4       35.0       89.2      229.6
  Minority interest                     -          -       (4.1)      (4.1)
                                ---------  ---------  ---------  ---------
EBITDA                              526.0      170.9      (33.1)     663.8
Adjustments:
  Car rental fleet interest        (102.8)         -          -     (102.8)
  Car rental fleet depreciation    (395.9)         -          -     (395.9)
  Non-cash expenses and charges
   (d)                               27.0        1.2        9.5       37.7
  Extraordinary, unusual or non-
   recurring gains and losses(e)     19.7        1.8       13.7       35.2
                                ---------  ---------  ---------  ---------
Corporate EBITDA                $    74.0  $   173.9  $    (9.9)     238.0
                                =========  =========  =========
  Equipment rental maintenance
   capital expenditures, net                                         (62.6)
  Non-fleet capital
   expenditures, net                                                 (32.1)
  Changes in working capital                                         447.4
  Changes in other assets and
   liabilities                                                       (43.5)
                                                                 ---------
Unlevered pre-tax cash flow (f)                                      547.2
  Corporate net cash interest                                       (102.9)
  Corporate cash taxes                                                (3.2)
Levered after-tax cash flow                                      ---------
 before fleet growth (f)                                             441.1
  Equipment rental fleet growth
   capital expenditures                                                6.5
  Car rental net fleet equity
   requirement                                                      (324.7)
Levered after-tax cash flow                                      ---------
 after fleet growth (f)                                          $   122.9
                                                                 =========



                                     Three Months Ended March 31, 2006
                                ------------------------------------------
                                   Car    Equipment   Corporate
                                 Rental     Rental    and Other   Total
                                ---------  ---------  ---------  ---------

(Loss) income before income
 taxes and minority interest    $   (11.1) $    34.5  $   (86.7) $   (63.3)
  Depreciation and amortization     391.5       79.4        1.4      472.3
  Interest, net of interest
   income                           104.0       31.4       74.9      210.3
  Minority interest                     -          -       (3.2)      (3.2)
                                ---------  ---------  ---------  ---------
EBITDA                              484.4      145.3      (13.6)     616.1
Adjustments:
  Car rental fleet interest         (98.0)         -          -      (98.0)
  Car rental fleet depreciation    (345.6)         -          -     (345.6)

  Non-cash expenses and charges
   (d)                               23.7        1.2        6.5       31.4
  Extraordinary, unusual or non-
   recurring gains and losses(e)        -          -       (6.0)      (6.0)
  Sponsors' fees                        -          -        0.8        0.8
                                ---------  ---------  ---------  ---------
Corporate EBITDA                $    64.5  $   146.5  $   (12.3)     198.7
                                =========  =========  =========
  Equipment rental maintenance
   capital expenditures, net                                         (52.8)
  Non-fleet capital
   expenditures, net                                                 (48.9)
  Changes in working capital                                         371.2
  Changes in other assets and
   liabilities                                                         1.9
                                                                 ---------
Unlevered pre-tax cash flow (f)                                      470.1
  Corporate net cash interest                                       (104.0)
  Corporate cash taxes                                                (3.2)
Levered after-tax cash flow                                      ---------
 before fleet growth (f)                                             362.9
  Equipment rental fleet growth
   capital expenditures                                             (124.6)
  Car rental net fleet equity
   requirement                                                      (285.4)
Levered after-tax cash flow                                      ---------
 after fleet growth (f)                                          $   (47.1)
                                                                 =========


(a) Includes the purchase accounting effects of the acquisition of all of
    Hertz's common stock on December 21, 2005, 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 damages liabilities.
(b) Non-cash debt charges represents the amortization of deferred financing
    costs and debt discount. In 2007, also includes $16.1 million
    associated with the debt restructuring and $12.8 million associated
    with the ineffectiveness of our interest rate swaps.
(c) Represents unrealized losses on currency translation of Euro
    denominated debt.
(d) As defined in the credit agreements for the senior credit facilities,
    Corporate EBITDA excludes the impact of certain non-cash expenses and
    charges.  The adjustments reflect the following:



                                   Three Months Ended March 31, 2007
                                ------------------------------------------
                                   Car     Equipment  Corporate
Non-Cash Expenses and Charges    Rental     Rental    and Other    Total
                                ---------  ---------  ---------  ---------

Non-cash amortization of debt
 costs included in car rental
 fleet interest                 $    25.7  $       -  $       -  $    25.7
Non-cash charges for workers'
 compensation                         1.3        1.2          -        2.5
Corporate non-cash stock-based
 employee compensation charges          -          -        6.1        6.1
Corporate non-cash charges for
 pension                                -          -        1.3        1.3
Corporate non-cash charges for
 public liability and property
 damage                                 -          -        1.8        1.8
Corporate unrealized loss on
 derivatives                            -          -        0.3        0.3
                                ---------  ---------  ---------  ---------
Total non-cash expenses and
 charges                        $    27.0  $     1.2  $     9.5  $    37.7
                                =========  =========  =========  =========

                                   Three Months Ended March 31, 2006
                                ------------------------------------------
                                    Car    Equipment  Corporate
                                  Rental     Rental   and Other    Total
                                ---------  ---------  ---------  ---------

Non-cash amortization of debt
 costs included in car rental
 fleet interest                 $    21.5  $       -  $       -  $    21.5
Non-cash charges for workers'
 compensation                         2.2        1.2          -        3.4
Corporate unrealized losses on
 currency translation of Euro
 denominated debt                       -          -        6.5        6.5
                                ---------  ---------  ---------  ---------
Total non-cash expenses and
 charges                        $    23.7  $     1.2  $     6.5  $    31.4
                                =========  =========  =========  =========


(e) As defined in the credit agreements for the senior credit facilities,
    Corporate EBITDA excludes the impact of extraordinary, unusual or
    non-recurring gains or losses or charges or credits.
    The adjustments reflect the following:

                                     Three Months Ended March 31, 2007
                                ------------------------------------------
Extraordinary, Unusual              Car    Equipment  Corporate
or Non-Recurring Items            Rental     Rental   and Other    Total
                                ---------  ---------  ---------  ---------

Restructuring charges           $    19.7  $     1.8  $    11.1  $    32.6
CEO transition payments                 -          -        2.6        2.6
                                ---------  ---------  ---------  ---------
Total extraordinary, unusual or
 non-recurring items            $    19.7  $     1.8  $    13.7  $    35.2
                                =========  =========  =========  =========

                                     Three Months Ended March 31, 2006
                                ------------------------------------------
                                    Car    Equipment  Corporate
                                  Rental     Rental   and Other    Total
                                ---------  ---------  ---------  ---------

Gain on sale of swap derivative $       -  $       -  $    (6.6) $    (6.6)
CEO transition payments                 -          -        0.6        0.6
                                ---------  ---------  ---------  ---------
Total extraordinary, unusual or
 non-recurring items            $       -  $       -  $    (6.0) $    (6.0)
                                =========  =========  =========  =========

(f) Amounts include the effect of fluctuations in foreign currency.



                                                                   Table 6
                        HERTZ GLOBAL HOLDINGS, INC.
           RECONCILIATION OF GAAP TO NON-GAAP EARNINGS MEASURES
                (In millions of dollars, except as noted)


                                                    Three Months Ended
Reconciliation from Operating Cash Flows                March 31,
to EBITDA:                                      --------------------------
                                                    2007          2006
                                                ------------  ------------

Net cash provided by operating activities       $    1,124.8  $    1,205.0
   Amortization of debt costs                          (35.6)        (29.2)
   Stock-based employee compensation                    (6.1)            -
   Provision for public liability and
    property damage                                    (47.0)        (45.8)
   Loss on revaluation of foreign denominated
    debt                                                   -          (6.5)
   Provision for losses on doubtful accounts            (2.9)         (4.6)
   Minority interest                                    (4.1)         (3.2)
   Deferred income taxes                                24.2          (0.6)
   Payments of public liability and property
    damage claims and expenses                          45.2          44.0
   Provision (benefit) for taxes on income             (32.1)        (17.3)
   Interest, net of interest income                    229.6         210.3
   Net changes in assets and liabilities              (632.2)       (736.0)
                                                ------------  ------------
EBITDA                                          $      663.8  $      616.1
                                                ============  ============


                                                  March 31,   December 31,
Net Corporate Debt & Net Fleet Debt                 2007          2006
                                                ------------  ------------

Corporate Debt
Debt, less:                                     $   11,756.9  $   12,276.2
 U.S. Fleet Debt and Pre-Acquisition Notes           4,860.0       4,845.2
 Fleet Financing Facility                              197.6         165.9
 International Fleet Debt                            1,692.7       1,987.8
                                                ------------  ------------
  Fleet Debt                                    $    6,750.3  $    6,998.9
                                                ============  ============
  Corporate Debt                                $    5,006.6  $    5,277.3
                                                ============  ============

Corporate Restricted Cash
Restricted Cash, less:                          $      191.8  $      552.5
 Restricted Cash Associated with Fleet Debt            (76.5)       (487.0)
                                                ------------  ------------
  Corporate Restricted Cash                     $      115.3  $       65.5
                                                ============  ============

Net Corporate Debt
Corporate Debt, less:                           $    5,006.6  $    5,277.3
 Cash and Equivalents                                 (476.9)       (674.5)
 Corporate Restricted Cash                            (115.3)        (65.5)
                                                ------------  ------------
  Net Corporate Debt                            $    4,414.4  $    4,537.3
                                                ============  ============

Net Fleet Debt
Fleet Debt, less:                               $    6,750.3  $    6,998.9
 Restricted Cash Associated with Fleet Debt            (76.5)       (487.0)
                                                ------------  ------------
  Net Fleet Debt                                $    6,673.8  $    6,511.9
                                                ============  ============

                                                   Three Months Ended
                                                        March 31,
                                                --------------------------
Car rental rate revenue per transaction day (a)     2007          2006
                                                ------------  ------------

Car rental revenue per statement of operations  $    1,505.1  $    1,399.6
Non-rental rate revenue                               (211.4)       (189.1)
Foreign currency adjustment                              0.4          31.4
                                                ------------  ------------
Rental rate revenue                             $    1,294.1  $    1,241.9
                                                ============  ============
Transactions days (in thousands)                      28,936        27,783
Rental rate revenue per transaction
 day (in whole dollars)                         $      44.72  $      44.70

                                                     Three Months Ended
                                                          March 31,
                                                --------------------------
Equipment rental and rental related revenue (a)     2007          2006
                                                ------------  ------------

Equipment rental revenue per statement
 of operations                                  $      389.8  $      363.0
Equipment sales and other revenue                      (41.7)        (44.1)
Foreign currency adjustment                             (0.1)          2.7
                                                ------------  ------------
Rental and rental related revenue               $      348.0  $      321.6
                                                ============  ============

(a) Based on 12/31/06 foreign exchange rates.

Non-GAAP Measures: Definitions and Use/Importance

On December 21, 2005 ("Closing Date") an indirect, wholly owned subsidiary of Hertz Global Holdings, Inc. ("Hertz Holdings") acquired all of The Hertz Corporation's ("Hertz") common stock from Ford Holdings LLC ("Ford Holdings") pursuant to a Stock Purchase Agreement, dated as of September 12, 2005, among Ford Motor Company ("Ford"), Ford Holdings and Hertz Holdings (previously known as CCMG Holdings, Inc.). As a result of this transaction, investment funds associated with or designated by Clayton, Dubilier & Rice, Inc., The Carlyle Group and Merrill Lynch Global Private Equity (collectively, the "Sponsors"), owned over 99% of the common stock of Hertz Holdings. As a result of an initial public offering of the common stock of Hertz Holdings in November 2006, the Sponsors now own approximately 72% of the common stock of Hertz Holdings. We refer to the acquisition of all of Hertz's common stock as the "Acquisition." We refer to the Acquisition, together with related transactions entered into to finance the cash consideration for the Acquisition, to refinance certain of our existing indebtedness and to pay related transaction fees and expenses, as the "Transactions." The term "GAAP" refers to accounting principles generally accepted in the United States of America.

Definitions of non-GAAP financial and other measures utilized in Hertz Holdings' April 26, 2007 Press Release are set forth below. Also set forth below is a summary of the reasons why management of Hertz Holdings and Hertz believe that presentation of the non-GAAP financial measures included in the Press Release provide useful information regarding Hertz Holdings' and Hertz's financial condition and results of operations and additional purposes, if any, for which management of Hertz Holdings and Hertz utilize the non-GAAP financial measures.

1. Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") and Corporate EBITDA

We present EBITDA and Corporate EBITDA to provide investors with supplemental measures of our operating performance and liquidity and, in the case of Corporate EBITDA, information utilized in the calculation of the financial covenants under Hertz's senior credit facilities. EBITDA is defined as consolidated net income before net interest expense, consolidated income taxes and consolidated depreciation and amortization. Corporate EBITDA differs from the term "EBITDA" as it is commonly used. Corporate EBITDA means "EBITDA" as that term is defined under Hertz's senior credit facilities, which is generally consolidated net income before net interest expense (other than interest expense relating to certain car rental fleet financing), consolidated income taxes, consolidated depreciation (other than depreciation related to the car rental fleet) and amortization and before certain other items, in each case as more fully defined in the agreements governing Hertz's senior credit facilities. The other items excluded in this calculation include, but are not limited to: non-cash expenses and charges; extraordinary, unusual or non-recurring gains or losses; gains or losses associated with the sale or write-down of assets not in the ordinary course of business; certain management fees paid to the Sponsors; and earnings to the extent of cash dividends or distributions paid from non-controlled affiliates. Further, the covenants in Hertz's senior credit facilities are calculated using Corporate EBITDA for the most recent four fiscal quarters as a whole. As a result, the measure can be disproportionately affected by a particularly strong or weak quarter. Further, it may not be comparable to the measure for any subsequent four-quarter period or for any complete fiscal year.

Management uses EBITDA and Corporate EBITDA as performance and cash flow metrics for internal monitoring and planning purposes, including the preparation of our annual operating budget and monthly operating reviews, as well as to facilitate analysis of investment decisions. In addition, both metrics are important to allow us to evaluate profitability and make performance trend comparisons between us and our competitors. Further, we believe EBITDA and Corporate EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industries.

EBITDA is also used by management and investors to evaluate our operating performance exclusive of financing costs and depreciation policies. Further, because we have two business segments that are financed differently and have different underlying depreciation characteristics, EBITDA enables investors to isolate the effects on profitability of operating metrics such as revenue, operating expenses and selling, general and administrative expenses. In addition to its use to monitor performance trends, EBITDA provides a comparative metric to management and investors that is consistent across companies with different capital structures and depreciation policies. This enables management and investors to compare our performance on a consolidated basis and on a segment basis to that of our peers. In addition, our management uses consolidated EBITDA as a proxy for cash flow available to finance fleet expenditures and the costs of our capital structure on a day-to-day basis so that we can more easily monitor our cash flows when a full statement of cash flows is not available.

Corporate EBITDA also serves as an important measure of our performance. Corporate EBITDA for our car rental segment enables us to assess our operating performance inclusive of fleet management performance, depreciation assumptions and the cost of financing our fleet. In addition, Corporate EBITDA for our car rental segment allows us to compare our performance, inclusive of fleet mix and financing decisions, to the performance of our competitors. Since most of our competitors utilize asset-backed fleet debt to finance fleet acquisitions, this measure is relevant for evaluating our operating efficiency inclusive of our fleet acquisition and utilization. For our equipment rental segment, Corporate EBITDA provides an appropriate measure of performance because the investment in our equipment fleet is longer-term in nature than for our car rental segment and therefore Corporate EBITDA allows management to assess operating performance exclusive of interim changes in depreciation assumptions. Further, unlike our car rental segment, our equipment rental fleet is not financed through separate securitization-based fleet financing facilities, but rather through our corporate debt. Corporate EBITDA for our equipment rental segment is a key measure used to make investment decisions because it enables us to evaluate return on investments. For both segments, Corporate EBITDA provides a relevant profitability metric for use in comparison of our performance against our public peers, many of whom publicly disclose a comparable metric. In addition, we believe that investors, analysts and rating agencies consider EBITDA and Corporate EBITDA useful in measuring our ability to meet our debt service obligations and make capital expenditures. Several of Hertz's material debt covenants are based on financial ratios utilizing Corporate EBITDA and non-compliance with those covenants could result in the requirement to immediately repay all amounts outstanding under those agreements, which could have a material adverse effect on our results of operations, financial position and cash flows.

EBITDA and Corporate EBITDA are not recognized measurements under GAAP. When evaluating our operating performance or liquidity, investors should not consider EBITDA and Corporate EBITDA in isolation of, or as a substitute for, measures of our financial performance and liquidity as determined in accordance with GAAP, such as net income, operating income or net cash provided by operating activities. EBITDA and Corporate EBITDA may have material limitations as performance measures because they exclude items that are necessary elements of our costs and operations. Because other companies may calculate EBITDA and Corporate EBITDA differently than we do, EBITDA may not be, and Corporate EBITDA as presented is not, comparable to similarly titled measures reported by other companies.

Borrowings under Hertz's senior credit facilities are a key source of our liquidity. Hertz's ability to borrow under these senior credit facilities depends upon, among other things, the maintenance of a sufficient borrowing base and compliance with the financial ratio covenants based on Corporate EBITDA set forth in the credit agreements for Hertz's senior credit facilities. Hertz's senior term loan facility requires it to maintain a specified consolidated leverage ratio and a consolidated interest expense coverage ratio based on Corporate EBITDA, while its senior asset-based loan facility requires that a specified consolidated leverage ratio and consolidated fixed charge coverage ratio be maintained for periods during which there is less than $200 million of available borrowing capacity under the senior asset-based loan facility. These financial covenants became applicable to Hertz on September 30, 2006, reflecting the four quarter period ending thereon. Failure to comply with these financial ratio covenants would result in a default under the credit agreements for Hertz's senior credit facilities and, absent a waiver or an amendment from the lenders, permit the acceleration of all outstanding borrowings under the senior credit facilities. As of March 31, 2007, we performed the calculations associated with the above noted financial covenants and determined that Hertz is in compliance with such covenants.

2. Adjusted Pre-Tax Income

Adjusted pre-tax income is calculated as income before income taxes and minority interest plus non-cash purchase accounting charges, non-cash debt charges relating to the amortization of debt financing costs and debt discounts, unrealized transaction gain (loss) on Euro denominated debt and certain one-time charges and non-operational items. Adjusted pre-tax income is important to management and investors because it represents a measure of our operational performance exclusive of the effects of purchase accounting, one-time charges and items that are not operational in nature or comparable to those of our competitors.

3. Adjusted Net Income

Adjusted net income is calculated as adjusted pre-tax income less a provision for income taxes derived utilizing a normalized income tax rate and minority interest. Adjusted net income is important to management and investors because it represents a measure of our operational performance exclusive of the effects of purchase accounting adjustments, one-time charges and items that are not operational in nature or comparable to those of our competitors.

4. Adjusted Diluted Earnings Per Share

Adjusted diluted earnings per share is calculated as adjusted net income divided by the post-IPO pro forma number of shares outstanding. Adjusted diluted earnings per share is important to management and investors because it represents a measure of our operational performance exclusive of the effects of purchase accounting adjustments, one-time charges and items that are not operational in nature or comparable to those of our competitors. Utilizing the post-IPO pro forma number of shares outstanding is important to management and investors because it represents a measure of our earnings per share as if the effects of the initial public offering were applicable to all periods.

5. Transaction Days

Transaction days represent the total number of days that vehicles were on rent in a given period.

6. Car Rental Rate Revenue and Rental Rate Revenue Per Transaction Day

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 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 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.

7. Equipment Rental and Rental Related Revenue

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 to 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.

8. Same Store Revenue Growth

Same store revenue growth represents the change in the current period total same store revenue over the prior period total same store revenue as a percentage of the prior period. 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.

9. Unlevered Pre-Tax Cash Flow

Unlevered pre-tax cash flow is calculated as Corporate EBITDA less equipment rental fleet depreciation including gain (loss) on sale, non-fleet capital expenditures, net of non-fleet disposals, plus changes in working capital (accounts receivable, inventories, prepaid expenses, accounts payable and accrued liabilities), and changes in other assets and liabilities (including public liability and property damage, U.S. pension liability, other assets and liabilities, equity and minority interest). Unlevered pre-tax cash flow is important to management and investors as it represents funds available to pay corporate interest and taxes and to grow our fleet or reduce debt.

10. Levered After-Tax Cash Flow Before Fleet Growth

Levered after-tax cash flow before fleet growth is calculated as Unlevered Pre-Tax Cash Flow less corporate net cash interest and corporate cash taxes. Levered after-tax cash flow before fleet growth is important to management and investors as it represents the funds available to grow our fleet or reduce our debt.

11. Levered After-Tax Cash Flow After Fleet Growth

Levered after-tax cash flow after fleet growth is calculated as Levered After-Tax Cash Flow Before Fleet Growth less equipment rental fleet growth capital expenditures and less gross car rental fleet growth capital expenditures plus car rental fleet financing. Levered after-tax cash flow after fleet growth is important to management and investors as it represents the funds available for the reduction of corporate debt.

12. Corporate Net Cash Interest (used in the calculation of Levered After-Tax Cash Flow Before Fleet Growth)

Corporate net cash interest represents total interest expense, net of total interest income less car rental fleet interest expense, net of car rental interest income and non-cash corporate interest charges. Non-cash corporate interest charges represent the amortization of corporate debt financing costs and corporate debt discounts. Corporate net cash interest helps management and investors measure the ongoing costs of financing the business exclusive of the costs associated with the fleet financing.

13. Corporate Cash Taxes (used in the calculation of Levered After-Tax Cash Flow Before Fleet Growth)

Corporate cash taxes represents cash paid by the Company during the period for income taxes.

14. Net Corporate Debt

Net corporate debt is calculated as total debt excluding fleet debt less cash and equivalents and short-term investments, if any, and "corporate restricted cash." Corporate debt consists of senior notes and Euro medium term notes issued prior to the Acquisition; borrowings under our Senior Term Facility; borrowings under our Senior ABL Facility; our Senior Notes; our Senior Subordinated Notes; and certain other indebtedness of our domestic and foreign subsidiaries. Net Corporate Debt is important to management, investors and ratings agencies as it helps measure our leverage. Net Corporate Debt also assists in the evaluation of our ability to service our non-fleet-related debt without reference to the expense associated with the fleet debt, which is fully collateralized by assets not available to lenders under the non-fleet debt facilities.

15. Net Fleet Debt

Net fleet debt is calculated as total fleet debt less "restricted cash associated with fleet debt." Fleet debt consists of our U.S. ABS Fleet Debt, the Fleet Financing Facility, obligations incurred under our International Fleet Debt Facilities, capital lease financings relating to revenue earning equipment that are outside the International Fleet Debt Facilities and the pre-Acquisition ABS Notes. This measure is important to management, investors and ratings agencies as it helps measure our leverage.

16. Corporate Restricted Cash (used in the calculation of Net Corporate Debt)

Total restricted cash includes cash and investments that are not readily available for our normal disbursements. Total restricted cash and investments are restricted for the acquisition of vehicles and other specified uses under our U.S. ABS Fleet Debt and to satisfy certain or our self insurance reserve requirements. Corporate restricted cash is calculated as total restricted cash less "restricted cash associated with fleet debt."

17. Restricted Cash Associated with Fleet Debt (used in the calculation of Net Fleet Debt and Corporate Restricted Cash)

Total restricted cash includes cash and investments that are not readily available for our normal disbursements. Restricted cash associated with fleet debt is restricted for the acquisition of vehicles and other specified uses under our U.S. ABS Fleet Debt.

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