Use these links to rapidly review the document
TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Table of Contents

As filed with the Securities and Exchange Commission on January 30, 2013

Registration No. 333-              

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



The Hertz Corporation
(Exact name of registrant as specified in its charter)

(See table of additional registrants below.)

Delaware
(State or other jurisdiction of
incorporation or organization)
  7510
(Primary Standard Industrial
Classification Code Number)
  13-1938568
(I.R.S. Employer
Identification Number)

225 Brae Boulevard
Park Ridge, New Jersey 07656-0713
(201) 307-2000

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)



J. Jeffrey Zimmerman, Esq.
Senior Vice President, General Counsel and Secretary
The Hertz Corporation
225 Brae Boulevard
Park Ridge, New Jersey 07656-0713
(201) 307-2000

(Name, address, including zip code, and telephone number, including area code, of agent for service)



With copies to:

Thomas A. Monson, Esq.
Jeffrey R. Shuman, Esq.
Jenner & Block LLP
353 N. Clark Street
Chicago, IL 60654-3456



           Approximate date of commencement of proposed sale of the securities to the public:  As soon as practicable after this Registration Statement becomes effective.

          If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated file, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o   Accelerated filer  o   Non-accelerated filer  ý
(Do not check if a
smaller reporting company)
  Smaller reporting company  o

          If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

          Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  o

          Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  o



CALCULATION OF REGISTRATION FEE

               
 
Title of securities to be registered
  Amount to be
registered

  Proposed maximum
offering price per
unit(1)

  Proposed maximum
aggregate offering
price(1)

  Amount of
registration fee

 

6.75% Senior Notes due 2019

  $250,000,000   100%   $250,000,000   $34,100
 

5.875% Senior Notes due 2020

  $700,000,000   100%   $700,000,000   $95,480
 

6.250% Senior Notes due 2022

  $500,000,000   100%   $500,000,000   $68,200
 

Guarantees of 6.75% Senior Notes due 2019(2)

  $250,000,000       None(3)
 

Guarantees of 5.875% Senior Notes due 2020(2)

  $700,000,000       None(3)
 

Guarantees of 6.250% Senior Notes due 2022(2)

  $500,000,000       None(3)
 

Total

          $1,450,000,000   $197,780

 

(1)
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(f) under the Securities Act of 1933.
(2)
See the following page for a table of guarantor registrants.
(3)
Pursuant to Rule 457(n) under the Securities Act of 1933, no separate filing fee is required for the guarantees.



           The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

   



TABLE OF GUARANTOR REGISTRANTS

Exact Name of Additional Registrant as Specified in its Charter*
  State or Other
Jurisdiction of
Incorporation
or Organization
  Primary
Standard
Industrial
Classification
Code Number
  I.R.S. Employer
Identification
Number

Cinelease Holdings, Inc. 

  Delaware   7510   20-8709690

HCM Marketing Corporation

  Delaware   7510   22-3129937

Hertz Car Sales LLC

  Delaware   7510   80-0033698

Hertz Claim Management Corporation

  Delaware   7510   13-3005373

Hertz Entertainment Services Corporation

  Delaware   7510   20-3782137

Hertz Equipment Rental Corporation

  Delaware   7510   13-6174127

Hertz Global Services Corporation

  Delaware   7510   22-3741182

Hertz Local Edition Corp. 

  Delaware   7510   13-3053797

Hertz Local Edition Transporting, Inc. 

  Delaware   7510   22-3376683

Hertz System, Inc. 

  Delaware   7510   36-2025222

Hertz Technologies, Inc. 

  Delaware   7510   22-3108869

Hertz Transporting, Inc. 

  Delaware   7510   13-3215204

Smartz Vehicle Rental Corporation

  Delaware   7510   None

Donlen Corporation

  Illinois   7510   36-2552662

Cinelease, LLC

  Louisiana   7510   95-3167269

Cinelease, Inc. 

  Nevada   7510   95-3167269

*
The address for each of the guarantor registrants is: c/o The Hertz Corporation, 225 Brae Boulevard, Park Ridge, New Jersey 07656-0713, telephone: (201) 307-2000. The name and address, including zip code, of the agent for service for each guarantor registrant is: J. Jeffrey Zimmerman, Esq., Senior Vice President, General Counsel and Secretary of The Hertz Corporation, 225 Brae Boulevard, Park Ridge, New Jersey 07656-0713, telephone: (201) 307-2000.

The information in this prospectus is not complete and may be changed. We may not launch the exchange offers or issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JANUARY 30, 2013

PRELIMINARY PROSPECTUS

THE HERTZ CORPORATION

GRAPHIC



Offers to Exchange the Notes of The Hertz Corporation set forth below (such transactions, collectively, the "exchange offers"):

$250,000,000 aggregate principal amount of 6.75% Senior Notes due 2019 (the "Exchange 2019 Notes") for any and all outstanding 6.75% Senior Notes due 2019 issued on March 13, 2012 (the "2019 Notes");

$700,000,000 aggregate principal amount of 5.875% Senior Notes due 2020 (the "Exchange 2020 Notes") for any and all outstanding 5.875% Senior Notes due 2020 issued on October 16, 2012 (the "2020 Notes"); and

$500,000,000 aggregate principal amount of 6.250% Senior Notes due 2022 (the "Exchange 2022 Notes" and, together with the Exchange 2019 Notes and the Exchange 2020 Notes, the "Exchange Notes") for any and all outstanding 6.250% Senior Notes due 2022 issued on October 16, 2012 (the "2022 Notes" and, together with the 2019 Notes and the 2020 Notes, the "Notes").

Terms of the Exchange Notes:

The Exchange Offers:

The Guarantees:

         Each broker-dealer that receives Exchange Notes for its own account pursuant to any of the exchange offers must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. By so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. A broker-dealer who acquired Notes as a result of market making or other trading activities may use this prospectus, as supplemented or amended from time to time, in connection with any resales of the Exchange Notes. We have agreed that we will make this prospectus available to any broker-dealer for use in connection with such resale of any class of Exchange Notes for a period of up to 90 days after the completion of the exchange offers. See "Plan of Distribution."

         Neither the Securities and Exchange Commission (the "SEC" or the "Commission") nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                        , 2013.


Table of Contents


TABLE OF CONTENTS

SUMMARY

  1

RISK FACTORS

  21

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

  39

THE EXCHANGE OFFERS

  41

USE OF PROCEEDS

  53

CAPITALIZATION

  54

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA FOR HERTZ

  57

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

  59

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  72

BUSINESS

  116

DESCRIPTION OF CERTAIN INDEBTEDNESS

  143

DESCRIPTION OF THE EXCHANGE 2019 NOTES

  155

DESCRIPTION OF THE EXCHANGE 2020 NOTES AND THE EXCHANGE 2022 NOTES

  216

FORM, DENOMINATION, TRANSFER, EXCHANGE AND BOOK-ENTRY PROCEDURES FOR THE EXCHANGE NOTES

  282

MATERIAL U.S. FEDERAL TAX CONSIDERATIONS

  285

CERTAIN ERISA CONSIDERATIONS

  290

PLAN OF DISTRIBUTION

  292

LEGAL MATTERS

  292

EXPERTS

  293

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

  F-1



         You should rely only on the information contained in this prospectus. We have not authorized anyone to give you any information or to make any representations about the transaction we discuss in this prospectus other than as contained in this prospectus. If you are given any information or representation that is not discussed in this prospectus, you must not rely on that information. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations, and prospects may have changed since that date. The delivery of this prospectus shall not under any circumstances create any implication that the information contained herein is correct as of any time subsequent to the date hereof.

         In making an investment decision, investors must rely on their own examination of the Issuer and the terms of the exchange offers, including the merits and risks involved. These securities have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary is a criminal offense.

         The Notes and the Exchange Notes have not been and will not be qualified under the securities laws of any province or territory of Canada. Neither the Notes nor the Exchange Notes are being offered or sold, directly or indirectly, in Canada or to or for the account of any resident of Canada in contravention of the securities laws of any province or territory thereof.



         THIS PROSPECTUS CONSTITUTES NEITHER AN OFFER TO EXCHANGE OR PURCHASE NOTES NOR A SOLICITATION OF CONSENTS IN ANY JURISDICTION IN WHICH, OR TO OR FROM ANY PERSON TO OR FROM WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION UNDER APPLICABLE SECURITIES OR BLUE SKY LAWS.

i


Table of Contents


WHERE YOU CAN FIND ADDITIONAL INFORMATION

        In connection with the exchange offers, we have filed with the SEC a registration statement on Form S-4 under the Securities Act relating to the Exchange Notes to be issued in the exchange offers. As permitted by SEC rules, this prospectus omits information included in the registration statement. For a more complete understanding of the exchange offers, you should refer to the registration statement, including its exhibits. With respect to statements in this prospectus about the contents of any contract, agreement or other document, we refer you to the copy of such contract, agreement or other document filed or incorporated by reference as an exhibit to the registration statement, and each such statement is qualified in all respects by reference to the document to which it refers.

        We file and, prior to and contemporaneously with the Dollar Thrifty Acquisition (defined below), Dollar Thrifty separately filed, annual, quarterly and current reports and other information with the SEC. You may read and copy any documents that we and Dollar Thrifty have filed at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 to obtain further information about the public reference room. In addition, the SEC maintains an Internet website (www.sec.gov) that contains reports, proxy and information statements and other information about issuers that file electronically with the SEC, including Hertz, Hertz Holdings and, prior to and contemporaneously with the Dollar Thrifty Acquisition, Dollar Thrifty. The SEC's website address is included in this prospectus as an inactive textual reference only. You may also access, free of charge, our reports filed with the SEC (for example, our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K and any amendments to those forms) indirectly through our Internet website (www.hertz.com). Our website address is included in this prospectus as an inactive textual reference only. The information found on our website is not part of this prospectus. Reports filed with or furnished to the SEC will be available as soon as reasonably practicable after they are filed with or furnished to the SEC.

        You may also obtain a copy of the registration statement for the exchange offers and the other information that we file with the SEC at no cost by calling us or writing to us at the following address:

The Hertz Corporation
225 Brae Boulevard
Park Ridge, New Jersey 07656
Attn: Investor Relations
(201) 307-2000

         In order to obtain timely delivery of such materials, you must request documents from us no later than five business days before you make your investment decision or at the latest by                    , 2013.


MARKET AND INDUSTRY DATA

        Information in this prospectus about the car and equipment rental industries, including our general expectations concerning the industries and our market position and market share, are based on estimates prepared using data from various sources and on assumptions made by us. We believe data regarding the car and equipment rental industries and our market position and market share within these industries are inherently imprecise, but generally indicate our size, position and market share within these industries. Although we believe that the information from third parties (including industry and general publications and surveys) included or reflected in this prospectus is generally reliable, we have not independently verified any such third party information and cannot assure you of its accuracy or completeness. While we are not aware of any misstatements regarding any industry data presented in this prospectus, our estimates, particularly those relating to our general expectations concerning the car and equipment rental industries, involve risks and uncertainties and are subject to change based on various factors, including those discussed under "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements."

ii


Table of Contents


GENERAL INFORMATION

        Unless otherwise indicated or the context otherwise requires, in this prospectus, (i) references to the "Issuer," the "Company" and "Hertz" mean The Hertz Corporation; (ii) references to "we," "us" and "our" mean Hertz and its consolidated subsidiaries, (iii) references to "Hertz Holdings" mean Hertz Global Holdings, Inc., our top-level holding company, (iv) "HERC" means Hertz Equipment Rental Corporation, our wholly owned subsidiary, together with our various other wholly owned international subsidiaries that conduct our industrial, construction, material handling and other equipment rental business, unless otherwise specified, (v) "cars" means cars, crossovers and light trucks (including sport utility vehicles and, outside North America, light commercial vehicles), (vi) "program cars" means cars purchased by car rental companies under repurchase or guaranteed depreciation programs with car manufacturers, (vii) "non-program cars" mean cars not purchased under repurchase or guaranteed depreciation programs for which the car rental company is exposed to residual risk and (viii) "equipment" means industrial, construction and material handling equipment.

        While Hertz Holdings is the ultimate parent of Hertz, the Exchange Notes and the Notes are the obligations of Hertz, as issuer, and not of Hertz Holdings. In addition, Hertz Holdings is not a guarantor of the Exchange Notes or the Notes.

        We are a successor to corporations that have been engaged in the car and truck rental and leasing business since 1918 and the equipment rental business since 1965. Hertz was incorporated in Delaware in 1967. Ford Motor Company ("Ford") acquired an ownership interest in Hertz in 1987. Prior to this, Hertz was a subsidiary of United Continental Holdings, Inc. (formerly Allegis Corporation), which acquired our outstanding capital stock from RCA Corporation in 1985. On December 21, 2005, investment funds associated with or designated by Clayton, Dubilier & Rice, Inc., which was succeeded by Clayton, Dubilier & Rice, LLC ("CD&R"), The Carlyle Group ("Carlyle") and Merrill Lynch & Co., Inc. ("Merrill Lynch"), or collectively the "Sponsors," acquired all of our common stock from Ford Holdings LLC ("Ford Holdings"). We refer to the acquisition of all of our common stock by the Sponsors as the "Sponsor Acquisition."

        On November 19, 2012, Hertz Holdings completed the acquisition of Dollar Thrifty (the "Dollar Thrifty Acquisition") pursuant to the terms of the Agreement and Plan of Merger, dated as of August 26, 2012 (the "Merger Agreement"), among Hertz Holdings, Dollar Thrifty and HDTMS, Inc., a wholly owned subsidiary of Hertz ("Merger Sub"). Pursuant to the Merger Agreement, Merger Sub merged with and into Dollar Thrifty, with Dollar Thrifty continuing as the surviving corporation and a wholly owned subsidiary of Hertz.

iii


Table of Contents


SUMMARY

         This summary highlights selected information regarding us, the exchange offers and the Exchange Notes and should be read as an introduction to the more detailed information included elsewhere in this prospectus. This summary does not contain all the information you should consider before participating in the exchange offers and investing in the Exchange Notes. You should read the following summary carefully together with the more detailed information, including but not limited to the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and accompanying notes, included elsewhere in this prospectus before making any investment decision.


Our Company

        Hertz operates its car rental business through the Hertz, Dollar and Thrifty brands from approximately 10,400 corporate, licensee and franchisee locations in North America, Europe, Latin America, Asia, Australia, Africa, the Middle East and New Zealand. Hertz is the largest worldwide airport general use car rental brand, operating from approximately 8,800 corporate and licensee locations in approximately 150 countries. Our Dollar and Thrifty brands have approximately 1,590 corporate and franchisee locations in approximately 82 countries. Our Hertz brand name is one of the most recognized in the world, signifying leadership in quality rental services and products. We are one of the only car rental companies that has an extensive network of company-operated rental locations both in the United States and in all major European markets. We believe that we maintain the leading airport car rental brand market share, by overall reported revenues, in the United States and at 111 major airports in Europe where we have company-operated locations and where data regarding car rental concessionaire activity is available. We believe that we also maintain the second largest market share, by revenues, in the off-airport car rental market in the United States. In our equipment rental business segment, we rent equipment through approximately 340 branches in the United States, Canada, France, Spain, China and Saudi Arabia, as well as through our international licensees. We and our predecessors have been in the car rental business since 1918 and in the equipment rental business since 1965. We also own Donlen Corporation, based in Northbrook, Illinois, which is a leader in providing fleet leasing and management services. We have a diversified revenue base and a highly variable cost structure and are able to dynamically manage fleet capacity, the most significant determinant of our costs. Our revenues have grown at a compound annual growth rate of 5.2% over the last 20 years, with year-over-year growth in 17 of those 20 years. For the year ended December 31, 2011 and the nine months ended September 30, 2012, we had total revenues of approximately $8.3 billion and $6.7 billion, respectively. We completed the Dollar Thrifty Acquisition on November 19, 2012. For the year ended December 31, 2011 and the nine months ended September 30, 2012, Dollar Thrifty had total revenues of approximately $1.5 billion and $1.2 billion, respectively.


Our Business Segments

        Our business consists of two reportable segments: rental and leasing of cars, crossovers and light trucks, or "car rental," and rental of industrial, construction, material handling and other equipment, or "equipment rental." General corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities, such as fees and certain cost reimbursements from our licensees and third party claim management services are included as "other reconciling items."

        Car Rental: Our "company-operated" rental locations are those through which we, or an agent of ours, rent cars that we own or lease. We maintain a substantial network of company-operated car rental locations both in the United States and internationally, and what we believe to be the largest number of company-operated airport car rental locations in the world, enabling us to provide consistent quality and service worldwide. Our licensees and associates also operate rental locations in over 140 countries and jurisdictions, including most of the countries in which we have company-operated rental locations.

 

1


Table of Contents

        Equipment Rental: We believe, based on an article in Rental Equipment Register published in May 2012, that HERC (as defined above in "General Information") is one of the largest equipment rental companies in the United States and Canada combined. HERC rents a broad range of earthmoving equipment, material handling equipment, aerial and electrical equipment, air compressors, generators, pumps, small tools, compaction equipment and construction-related trucks. HERC also derives revenues from the sale of new equipment and consumables, as well as through its Hertz Entertainment Services division.


Our Markets

        We are engaged principally in the global car rental industry and in the equipment rental industry.

Worldwide Car Rental

        We believe that the global car rental industry exceeds $37 billion in annual revenues. According to Auto Rental News, car rental industry revenues in the United States are estimated to be approximately $24 billion for 2012 and grew in 2012 by 3.9%. We believe car rental revenues in Europe account for approximately $13 billion in annual revenues, with the airport portion of the industry comprising approximately 37% of the total. Within Europe, the largest markets are Germany, France, Spain, Italy and the United Kingdom. We believe total rental revenues for the car rental industry in Europe in 2012 were approximately $10.6 billion in 10 countries—France, Italy, the United Kingdom, Germany, Spain, the Netherlands, Belgium, the Czech Republic, Slovakia and Luxembourg—where we have company-operated rental locations and approximately $2.6 billion in 11 other countries—Ireland, Portugal, Sweden, Greece, Austria, Denmark, Poland, Finland, Hungary, Malta and Romania—where our Hertz brand is present through our licensees.

        We estimate that rentals by airline travelers at or near airports, or "airport rentals," accounted for approximately one-half of the total market in the United States in 2012. This portion of the market is significantly influenced by developments in the travel industry and particularly in airline passenger traffic, or "enplanements," as well as the Gross Domestic Product, or "GDP." We believe domestic enplanements in 2012 approximated 2011 levels, however, we expect them to increase by 1.8% in 2013. Current data suggests that U.S. GDP increased in the third quarter of 2012 at an annual rate of approximately 2.7%. The International Air Transport Association, or "IATA," projected in September 2012 that annual global enplanements would increase by 4.5% in 2013.

        The off-airport portion of the industry has rental volume primarily driven by local business use, leisure travel and the replacement of cars being repaired. Because Europe has generally demonstrated a lower historical reliance on air travel, the European off-airport car rental market is significantly more developed than it is in the United States. However, we believe that in recent years, industry revenues from off-airport car rentals in the United States have grown faster than revenues from airport rentals.

        We provide commercial fleet leasing and management services to national corporate customers throughout the United States and Canada through Donlen Corporation, or "Donlen," a wholly owned subsidiary of Hertz. Donlen is a fully integrated fleet management services provider with a comprehensive suite of product offerings ranging from leasing and managing vehicle fleets to providing other fleet management services to reduce fleet operating costs.

Worldwide Equipment Rental

        We estimate the size of the U.S. equipment rental industry, which is highly fragmented with few national competitors and many regional and local operators, increased from approximately $28 billion in annual revenues for 2011 to approximately $31 billion in annual revenues for 2012, but the part of the rental industry dealing with equipment of the type HERC rents is somewhat smaller than that. We believe that the industry is expected to grow at a 12.8% compound annual growth rate between 2013

 

2


Table of Contents

and 2016. Other market data indicate that, as of September 30, 2012, the equipment rental industries in France, Spain, China and Saudi Arabia are expected to generate approximately $4.5 billion, $2.5 billion, $5.1 billion and $0.5 billion in annual revenues for 2012, respectively, although the portions of those markets in which HERC competes are smaller.

        The equipment rental industry serves a broad range of customers from small local contractors to large industrial national accounts and encompasses a wide range of rental equipment from small tools to heavy earthmoving equipment. We believe U.S. non-residential construction spending declined at an annual rate of approximately 10% in 2012 but is projected to increase at an annual rate of 5% in 2013. We also believe that rental equipment accounted for approximately 50% of all equipment sold into the U.S. construction industry in 2012, up from approximately 5% in 1993. In addition, we believe that the trend toward rental instead of ownership of equipment in the U.S. construction industry will continue and that as much as 50% of the equipment used in the industry could be rental equipment by 2015.

****

        Hertz is incorporated under the laws of the state of Delaware. Our corporate headquarters are located at 225 Brae Boulevard, Park Ridge, New Jersey 07656. Our telephone number is (201) 307-2000. We maintain an Internet website at www.hertz.com. Please note that the information found on, or linked to on, our website is not a part of this prospectus and this web address is not an active hyperlink.

 

3


Table of Contents


Summary of the Terms of the Exchange Offer

        On March 13, 2012, Hertz completed an offering of $250,000,000 aggregate principal amount of 6.75% Senior Notes due 2019 (referred to herein as the "2019 Notes"). The 2019 Notes were issued as additional notes under the indenture, dated as of February 8, 2011 (as amended, modified or supplemented from time to time, the "2019 Indenture"), among Hertz, as issuer, the subsidiary guarantors from time to time parties thereto and Wells Fargo Bank, National Association, as trustee. Prior to the issuance of the 2019 Notes, Hertz issued $1,000,000,000 aggregate principal amount of 6.75% Senior Notes due 2019 under the 2019 Indenture, which prior notes have been registered under the Securities Act (the "Existing Exchange 2019 Notes"). On March 30, 2012, we executed a supplemental indenture pursuant to which we added Cinelease Holdings, Inc., Cinelease, Inc. and Cinelease, LLC (collectively, the "Cinelease Guarantors"), which we acquired in January 2012, as additional subsidiary guarantors under the 2019 Indenture.

        On October 16, 2012, HDTFS, Inc., a wholly owned subsidiary of Hertz (the "Escrow Issuer") completed an offering of $700 million aggregate principal amount of 5.875% Senior Notes due 2020 (referred to herein as the "2020 Notes") and $500 million aggregate principal amount of 6.250% Senior Notes due 2022 (referred to herein as the "2022 Notes"). The 2020 Notes and 2022 Notes were issued under the indenture, dated as of October 16, 2012 (as amended, modified or supplemented from time to time, the "2020 and 2022 Indenture" and, together with the 2019 Indenture, the "Indentures"), between the Escrow Issuer, as issuer, and Wells Fargo Bank, National Association, as trustee. The proceeds from this issuance were placed in escrow pending consummation of the Dollar Thrifty Acquisition. Contemporaneously with the consummation of the Dollar Thrifty Acquisition, the proceeds from the issuance were released from escrow, the Escrow Issuer merged with and into Hertz, with Hertz continuing as the surviving entity, Hertz assumed the Escrow Issuer's obligations under the 2020 Notes, the 2022 Notes and the 2020 and 2022 Indenture and the Subsidiary Guarantors (as defined below) became subsidiary guarantors under the 2020 and 2022 Indenture.

        The offerings of the Notes were made only to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S, and accordingly were exempt from registration under the Securities Act.

Registration Rights Agreements   In connection with the offering of the 2019 Notes, Hertz and the Subsidiary Guarantors (other than the Cinelease Guarantors) entered into an exchange and registration rights agreement, dated as of March 13, 2012 (as the same may be amended, modified or supplemented from time to time, the "2019 registration rights agreement"), with the initial purchaser of the 2019 Notes as stated therein. In connection with the release of the proceeds from the offering of the 2020 Notes and 2022 Notes from escrow, Hertz and the Subsidiary Guarantors entered into an exchange and registration rights agreement, dated as of November 19, 2012 (as the same may be amended, modified or supplemented from time to time, the "2020 and 2022 registration rights agreement" and, together with the 2019 registration rights agreement, the "registration rights agreements").


 

 

 

4


Table of Contents

    Pursuant to the registration rights agreements, we agreed to use our commercially reasonable efforts to cause the registration statement of which this prospectus is a part to become effective within 365 days after the date of the respective registration rights agreement, which, (i) with respect to the 2019 registration rights agreement, is the date of issuance of the 2019 Notes, March 13, 2012, and (ii) with respect to the 2020 and 2022 registration rights agreement, is the date we completed the Dollar Thrifty Acquisition, November 19, 2012. We further agreed to use our commercially reasonable efforts to commence the exchange offers promptly after the registration statement becomes effective and to hold the exchange offers open for the period required by applicable law. See "The Exchange Offers." The terms of the Exchange Notes offered in the exchange offers are identical in all material respects to those of the Notes, except that the Exchange Notes:

 

will be registered under the Securities Act and therefore will not be subject to restrictions on transfer;

 

will not be subject to provisions relating to additional interest;

 

will bear a different CUSIP or ISIN number from the Notes;

 

will not entitle their holders to registration rights; and

 

will be subject to terms relating to book-entry procedures and administrative terms relating to transfers that differ from those of the Notes.


The Exchange Offers

 

Hertz is offering to exchange:

 

up to $250,000,000 aggregate principal amount of its 6.75% Senior Notes due 2019, which have been registered under the Securities Act, for any and all of the 2019 Notes;

 

up to $700,000,000 aggregate principal amount of its 5.875% Senior Notes due 2020, which have been registered under the Securities Act, for any and all of the 2020 Notes; and

 

up to $500,000,000 aggregate principal amount of its 6.250% Senior Notes due 2022, which have been registered under the Securities Act, for any and all of the 2022 Notes.


 

 

You may only exchange Notes in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

 

Subject to the satisfaction or waiver of specified conditions, we will exchange the Exchange Notes for all Notes that are validly tendered and not validly withdrawn prior to the expiration of the respective exchange offer. We will cause the exchanges to be effected promptly after the expiration of the respective exchange offer.


 

 

 

5


Table of Contents

Resale of the Exchange Notes   Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, we believe that the Exchange Notes issued pursuant to the exchange offers in exchange for the Notes may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:

 

you are not our "affiliate" (as defined in Rule 405 under the Securities Act);

 

you are acquiring the Exchange Notes in the ordinary course of your business;

 

you do not have an arrangement or understanding with any person to participate in the distribution of the Exchange Notes (within the meaning of the Securities Act);

 

you are not engaged in, and do not intend to engage in, the distribution of the Exchange Notes; and

 

you are not acting on behalf of any person who could not truthfully make a representation to all of the foregoing.


 

 

If you are a broker-dealer and receive Exchange Notes for your own account in exchange for Notes that you acquired as a result of market-making activities or other trading activities, you must represent that you will deliver a prospectus in connection with any resale of the Exchange Notes. See "Plan of Distribution." A broker-dealer may use this prospectus for an offer to resell, a resale or other retransfer of the Exchange Notes issued in the exchange offers for a period of up to 90 days after the consummation of the respective exchange offer.

 

 

Any holder of Notes who:

 

is our "affiliate" (as defined in Rule 405 under the Securities Act);

 

does not acquire the Exchange Notes in the ordinary course of its business; or

 

tenders its Notes in the exchange offers with the intention to participate, or for the purpose of participating, in a distribution of Exchange Notes;


 

 

cannot rely on the position of the staff of the SEC enunciated in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in Shearman & Sterling (available July 2, 1993), or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the Exchange Notes.


 

 

 

6


Table of Contents

    You should read the discussion under the heading "The Exchange Offers" for further information regarding the exchange offers and resale of the Exchange Notes.

Consequences of Failure to Exchange the Notes

 

You will continue to hold the Notes subject to their existing transfer restrictions if:

 

you do not tender your Notes; or

 

you tender your Notes and they are not accepted for exchange.


 

 

With some limited exceptions, we will have no obligation to register any Notes after we consummate the exchange offers. See "The Exchange Offers—Terms of the Exchange Offers" and "—Consequences of Failure to Exchange."

Effect on Holders of the Notes

 

Upon completion of the exchange offers, there may be no market for the Notes that remain outstanding and you may have difficulty selling them.

 

 

As a result of the making of, and upon acceptance for exchange of all validly tendered outstanding Notes pursuant to the terms of the exchange offers, Hertz will have fulfilled a covenant under each of the registration rights agreements and, accordingly, Hertz will not be obligated to pay additional interest as described in the registration rights agreements.

Expiration Date

 

The exchange offers will expire at 12:00 midnight, New York City time, on                        , 2013, or the "expiration date," unless we extend an exchange offer, in which case expiration date means the latest date and time to which the respective exchange offer has been extended.

Conditions to the Exchange Offers

 

The exchange offers are subject to several customary conditions. We will not be required to accept for exchange, or to issue Exchange Notes in exchange for, any Notes and may terminate or amend the exchange offers if we determine in our reasonable judgment that the exchange offers violate applicable law, any applicable interpretation of the SEC or its staff or any order of any governmental agency or court of competent jurisdiction. The foregoing conditions are for our sole benefit and may be waived by us. In addition, we will not accept for exchange any Notes tendered, and no Exchange Notes will be issued in exchange for any such Notes if, among other things:

 

at any time any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part; or

 

at any time any stop order is threatened or in effect with respect to the qualification of the Indentures governing the Notes under the Trust Indenture Act of 1939, as amended.



 

 

 

7


Table of Contents

    See "The Exchange Offers—Conditions." We reserve the right to terminate or amend the exchange offers at any time prior to the expiration date upon the occurrence of any of the foregoing events.

Procedures for Tendering Notes

 

If you wish to participate in the exchange offers, you must submit required documentation and effect a tender of Notes pursuant to the procedures for book-entry transfer or other applicable procedures, all in accordance with the instructions described in this prospectus and in the letter of transmittal or electronic acceptance instruction. See "The Exchange Offers—Procedures for Tendering Notes," "—Book-Entry Transfer" and "—Guaranteed Delivery Procedures."

 

 

If you hold Notes through The Depository Trust Company ("DTC") and wish to participate in the exchange offers, you must comply with the Automated Tender Offer Program procedures of DTC by which you will agree to be bound by the letter of transmittal.

 

 

By signing, or agreeing to be bound by, the letter of transmittal, you will represent to us that, among other things:

 

you are not our "affiliate" (as defined in Rule 405 of the Securities Act);

 

you are acquiring the Exchange Notes in the ordinary course of your business;

 

you do not have an arrangement or understanding with any person to participate in the distribution of the Exchange Notes or the Notes (within the meaning of the Securities Act);

 

if you are not a broker-dealer, that you are not engaged in, and do not intend to engage in, the distribution of the Exchange Notes;

 

if you are a broker-dealer, that you will receive the Exchange Notes for your own account in exchange for Notes that were acquired as a result of market-making activities or other trading activities, and that you will deliver a prospectus in connection with any resale of such Exchange Notes; and

 

you are not acting on behalf of any person who could not truthfully make the foregoing representations.



 

 

 

8


Table of Contents

Special Procedures for Beneficial Owners   If you are a beneficial owner of Notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender those Notes in the exchange offers, you should contact the registered holder promptly and instruct the registered holder to tender those Notes on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your Notes, either make appropriate arrangements to register ownership of the Notes in your name (subject to any restrictions in the respective Indenture) or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.

Guaranteed Delivery Procedures

 

If you wish to tender your Notes, but cannot properly do so prior to 12:00 midnight, New York City time, on the expiration date, you may tender your Notes according to the guaranteed delivery procedures set forth in "The Exchange Offers—Guaranteed Delivery Procedures."

Withdrawal Rights

 

Tenders of Notes may be withdrawn at any time prior to 12:00 midnight, New York City time, on the expiration date. To withdraw a tender of Notes, a written or facsimile transmission notice of withdrawal must be received by the Exchange Agent (as defined below) at its address set forth in "The Exchange Offers—Exchange Agent" prior to 12:00 midnight, New York City time, on the expiration date.

Acceptance of Notes and Delivery of Exchange Notes

 

Except in some circumstances, Notes that are validly tendered in the exchange offers prior to 12:00 midnight, New York City time, on the expiration date will be accepted for exchange. The Exchange Notes issued pursuant to the exchange offers will be delivered promptly following the expiration date. We may reject any and all Notes that we determine have not been properly tendered or any Notes the acceptance of which would, in the opinion of our counsel, be unlawful. We may waive any irregularities in the tender of the Notes. See "The Exchange Offers—Procedures for Tendering Notes," "—Book-Entry Transfer," and "—Guaranteed Delivery Procedures." Subject to some limited exceptions, we will have no obligation to register any Notes after we consummate the exchange offers. See "The Exchange Offers—Purpose and Effect of the Exchange Offers."

Material U.S. Federal Income Tax Considerations

 

We believe that the exchange of the Notes for the Exchange Notes will not constitute a taxable exchange for U.S. federal income tax purposes. See "Material U.S. Federal Tax Considerations."


 

 

 

9


Table of Contents

Use of Proceeds   We will not receive any cash proceeds from the issuance of the Exchange Notes in the exchange offers. See "Use of Proceeds."

Dissenters' Rights

 

Holders of the Notes do not have any appraisal or dissenters' rights in connection with the exchange offers.

Exchange Agent

 

Wells Fargo Bank, National Association, is serving as the exchange agent for the Notes (the "Exchange Agent").

 

10


Table of Contents


Summary of the Terms of the Exchange Notes

         The summary below describes the principal terms of the Exchange Notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. We urge you to read this summary together with the sections of this prospectus entitled "Description of the Exchange 2019 Notes" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes," which contain more detailed descriptions of the terms and conditions of the Notes and Exchange Notes.

        The terms of the Exchange Notes offered in the exchange offers are identical in all material respects to the terms of the Notes, except that the Exchange Notes:

    will be registered under the Securities Act and therefore will not be subject to restrictions on transfer;

    will not be subject to provisions relating to additional interest;

    will bear a different CUSIP or ISIN number from the Notes;

    will not entitle their holders to registration rights; and

    will be subject to terms relating to book-entry procedures and administrative terms relating to transfers that differ from those of the Notes.



Issuer   The Hertz Corporation.

Exchange Notes Offered

 

$250,000,000 aggregate principal amount of 6.75% Senior Notes due 2019, which have been registered under the Securities Act.

 

 

$700,000,000 aggregate principal amount of 5.875% Senior Notes due 2020, which have been registered under the Securities Act.

 

 

$500,000,000 aggregate principal amount of 6.250% Senior Notes due 2022, which have been registered under the Securities Act.

Form and Denomination

 

The Notes can only be exchanged for Exchange Notes in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

Maturity Date

 

The Exchange 2019 Notes will mature on April 15, 2019.

 

 

The Exchange 2020 Notes will mature on October 15, 2020.

 

 

The Exchange 2022 Notes will mature on October 15, 2022.

Interest Rate

 

The Exchange 2019 Notes will accrue interest at the rate of 6.75% per annum.

 

 

The Exchange 2020 Notes will accrue interest at the rate of 5.875% per annum.

 

 

The Exchange 2022 Notes will accrue interest at the rate of 6.250% per annum.


 

 

 

11


Table of Contents

Interest Payment Dates   Interest on the Exchange Notes will be paid semi-annually and in arrears on April 15 and October 15, commencing on April 15, 2013.

Interest on the Exchange Notes

 

The Exchange Notes will accrue interest from the last interest payment date on which interest was paid on the corresponding Notes surrendered in exchange for Exchange Notes, or from the original issue date of the applicable Notes if no interest has been paid on the corresponding Notes surrendered in exchange for Exchange Notes, to the day before the consummation of the respective exchange offer and thereafter, at the applicable rate of interest per annum for the Exchange Notes. However, if the Notes are surrendered for exchange on or after a record date (which is the close of business on the April 1 or October 1 immediately preceding the interest payment date, on April 15 and October 15 of each year) for an interest payment date that will occur on or after the date of such exchange and as to which interest will be paid, interest on the applicable Exchange Notes received in exchange for such Notes will accrue from the date of such interest payment date.

Ranking of the Notes

 

The Exchange Notes will be Hertz's general obligations and will be: (i) equal in right of payment to all of Hertz's existing and future unsecured indebtedness and other obligations that are not, by their terms, expressly subordinated in right of payment to the Exchange Notes; (ii) senior in right of payment to any of Hertz's existing or future indebtedness and other obligations that are, by their terms, expressly subordinated in right of payment to the Exchange Notes; and (iii) effectively subordinated to all of Hertz's secured indebtedness and other secured obligations to the extent of the value of the assets securing such secured indebtedness or other secured obligations, and to all indebtedness and other obligations of Hertz's subsidiaries (other than subsidiaries that are, or which become, subsidiary guarantors).


 

 

 

12


Table of Contents

    As of September 30, 2012, we had consolidated indebtedness of $12.3 billion. In addition, as of September 30, 2012, Dollar Thrifty's indebtedness was approximately $1.48 billion and we incurred $1.95 billion in additional indebtedness in connection with the consummation of the Dollar Thrifty Acquisition. See "—Recent Developments—Issuance of the 2020 Notes and the 2022 Notes" and "—Recent Developments—Incremental Term Loans." In addition, in January 2013 we completed the issuance of $950.0 million in aggregate principal amount of Series 2013-1 Rental Car Asset Backed Notes. See "—Recent Developments—2013 ABS Offering." Substantially all of our consolidated assets, including our car and equipment rental fleets, are subject to security interests or are otherwise encumbered for the lenders under our asset-backed and asset-based financing arrangements. See "Risk Factors—Risks Related to Our Substantial Indebtedness—Substantially all of our consolidated assets secure certain of our outstanding indebtedness, which could materially adversely affect our debt and equity holders and our business." The Subsidiary Guarantors will guarantee Hertz's obligations under the Exchange Notes (and any Notes not tendered in the exchange offers) and currently guarantee Hertz's obligations under the Senior Credit Facilities (as defined below in "Description of Certain Indebtedness") and the indentures governing Hertz's other Senior Notes (as defined below in "Description of Certain Indebtedness"). See "Description of Certain Indebtedness" and, for financial information regarding our guarantor and non-guarantor subsidiaries, see Notes 16 and 18 to both our audited annual consolidated financial statements and unaudited interim condensed financial statements included elsewhere in this prospectus and the audited annual consolidated financial statements of Donlen and its subsidiaries included elsewhere in this prospectus.

Subsidiary Guarantees

 

The Exchange Notes will be guaranteed on a senior unsecured basis by the following subsidiaries of The Hertz Corporation (the "Guarantees"): (i) Cinelease Holdings, Inc.; (ii) Cinelease,  Inc.; (iii) Cinelease, LLC; (iv) Donlen Corporation; (v) HCM Marketing Corporation; (vi) HERC; (vii) Hertz Car Sales LLC; (viii) Hertz Claim Management Corporation; (ix) Hertz Entertainment Services Corporation; (x) Hertz Global Services Corporation; (xi) Hertz Local Edition Corp.; (xii) Hertz Local Edition Transporting, Inc.; (xiii) Hertz System, Inc.; (xiv) Hertz Technologies, Inc.; (xv) Hertz Transporting, Inc.; and (xvi) Smartz Vehicle Rental Corporation (collectively, the "Subsidiary Guarantors").


 

 

 

13


Table of Contents

    These are the same subsidiaries that guarantee Hertz's Senior Credit Facilities in the United States. At the time of issuance of the Senior Notes (including the 2019 Notes but excluding the 2020 Notes and 2022 Notes), Hertz Car Sales LLC was a corporation named "Brae Holding Corp." This entity was converted to a limited liability company effective April 26, 2012. In connection with the Advantage Divestiture (defined below under "—Recent Developments—Advantage Divestiture"), which included the sale of the equity interests of Simply Wheelz LLC and was consummated in December 2012, the guarantee by Simply Wheelz LLC of our obligations under the Senior Notes and the indentures governing the same was released. See Notes 16 and 18 to both our audited annual consolidated financial statements and unaudited interim condensed financial statements included elsewhere in this prospectus regarding the disposition of Simply Wheelz LLC.

 

 

Dollar Thrifty is expected to become a guarantor of, and, to the extent provided in the Senior Credit Facilities, certain domestic subsidiaries of Dollar Thrifty may become guarantors of, Hertz's obligations under the Senior Credit Facilities and thereby become subsidiary guarantors of Hertz's obligations under the Senior Notes (including the Exchange Notes and any Notes outstanding after the consummation of these exchange offers) upon the terms and subject to the conditions of the indentures governing the Senior Notes.

 

 

The guarantees of all of the Subsidiary Guarantors may be released to the extent such subsidiaries no longer guarantee the Senior Credit Facilities in the United States. See "Risk Factors—Risks Related to the Exchange Notes—The Exchange Notes will be, and the Notes are, unsecured and structurally subordinated to some of Hertz's obligations and only certain of Hertz's subsidiaries guarantee the Notes and will guarantee the Exchange Notes." The assets of HERC may be disposed of by Hertz without being subject to many of the restrictions contained in the section "Description of the Exchange Notes—Certain Covenants." See "Risk Factors—Risks Related to the Exchange Notes—The assets of HERC may be disposed of by Hertz without being subject to many of the restrictions contained in the sections 'Description of the 2019 Exchange Notes—Certain Covenants' and 'Description of the 2020 Exchange Notes and the 2022 Exchange Notes—Certain Covenants'."


 

 

 

14


Table of Contents

Ranking of the Guarantees   The Guarantee of each Subsidiary Guarantor in respect of the Exchange Notes will be: (i) equal in right of payment to all existing and future unsecured indebtedness and other obligations of that Subsidiary Guarantor that are not, by their terms, expressly subordinated in right of payment to the guarantee by such Subsidiary Guarantor; (ii) senior in right of payment to any existing and future indebtedness and other obligations of that Subsidiary Guarantor that are, by their terms, expressly subordinated in right of payment to the guarantee by such Subsidiary Guarantor; and (iii) effectively subordinated to all secured indebtedness and other secured obligations of that Subsidiary Guarantor, including any amounts owed pursuant to our Senior Credit Facilities, to the extent of the value of the assets securing such secured indebtedness or other secured obligations, and to all indebtedness and other obligations of the subsidiaries of such Subsidiary Guarantor (other than subsidiaries that are, or which become, subsidiary guarantors).

Mandatory Sinking Fund

 

None.

Optional Redemption

 

We will be entitled at our option to redeem all or a portion of the Exchange Notes prior to April 15, 2015 with respect to the Exchange 2019 Notes, October 15, 2015 with respect to the Exchange 2020 Notes and October 15, 2017 with respect to the Exchange 2022 Notes, at a redemption price equal to 100% of the principal amount of the Exchange Notes redeemed plus accrued and unpaid interest to the redemption date and the respective applicable "make whole" premium described under "Description of the Exchange 2019 Notes—Optional Redemption" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes—Optional Redemption."

 

 

We will be entitled at our option to redeem all or a portion of the Exchange Notes on or after April 15, 2015 with respect to the Exchange 2019 Notes, October 15, 2015 with respect to the Exchange 2020 Notes and October 15, 2017 with respect to the Exchange 2022 Notes, at the redemption prices set forth under "Description of the Exchange 2019 Notes—Optional Redemption" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes—Optional Redemption" plus, in each case, accrued and unpaid interest to the redemption date.


 

 

 

15


Table of Contents

    On or prior to April 15, 2014 with respect to the Exchange 2019 Notes and October 15, 2015 with respect to the Exchange 2020 Notes and the Exchange 2022 Notes, we will be entitled at our option on one or more occasions to redeem the Exchange Notes in an aggregate principal amount equal to up to 35% of the aggregate principal amount of the Exchange Notes with the net cash proceeds from certain equity offerings at a redemption price equal to 106.75% of the principal amount thereof, with respect to the Exchange 2019 Notes, 105.875% of the principal amount thereof, with respect to the Exchange 2020 Notes, and 106.250% of the principal amount thereof, with respect to the Exchange 2022 Notes, plus, in each case, accrued and unpaid interest to the redemption date.

Change of Control

 

Upon the occurrence of certain events that constitute a Change of Control (as defined below in "Description of the Exchange 2019 Notes—Change of Control" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes—Change of Control"), we must make an offer to purchase the Exchange Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. See "Description of the Exchange 2019 Notes—Change of Control" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes—Change of Control."

Certain Covenants

 

The Indentures governing the Exchange Notes and Guarantees limit, among other things, the ability of Hertz and its restricted subsidiaries to: incur or guarantee additional indebtedness and issue certain preferred stock, pay dividends or make other distributions, make certain other restricted payments and investments, create or incur liens, create encumbrances or restrictions on the ability of Hertz's subsidiaries to pay dividends or make other payments to it, lease, transfer or sell certain assets, merge or consolidate with other entities and engage in transactions with affiliates.

 

 

Each of these covenants is subject to certain exceptions, including the ability to dispose of or otherwise distribute the assets of our equipment rental business. See "Description of the Exchange 2019 Notes—Certain Covenants" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes—Certain Covenants."


 

 

 

16


Table of Contents

Relationship of the Exchange 2019 Notes with the Existing Exchange 2019 Notes   On February 8, 2011 and on March 21, 2011, Hertz issued $1,000,000,000 aggregate principal amount of unregistered 6.75% Senior Notes due 2019, which Hertz subsequently, in September 2011, exchanged for $1,000,000,000 aggregate principal amount of 6.75% Senior Notes due 2019 registered under the Securities Act (referred to herein as the "Existing Exchange 2019 Notes"). The Exchange 2019 Notes issued in exchange for the 2019 Notes are expected to bear the same CUSIP and ISIN number as, constitute a further issuance of, be fungible with and be consolidated and form a single series with the Existing Exchange 2019 Notes.

Trustee

 

Wells Fargo Bank, National Association, is serving as the trustee under the Indentures.

Limited Market

 

The Exchange Notes will not be listed on any securities exchange or automated quotation system. The Exchange 2020 Notes and Exchange 2022 Notes will be new securities for which there is currently no existing market and so we cannot assure you that a market for such notes will develop or be sustained, or as to the liquidity of any such market that might develop. Although a market exists for the Existing Exchange 2019 Notes, we cannot assure you that the market will be sustained or as to the liquidity of such market. See "Risk Factors—Risks Related to the Exchange Offers—Your ability to transfer the Exchange Notes may be limited by the absence of a trading market or the failure to sustain any existing trading markets, and there is no assurance as to the liquidity of any such trading markets."


Risk Factors

        You should refer to "Risk Factors" herein for an explanation of certain risks involved in investing in the exchange offers and the Exchange Notes.


Recent Developments

Dollar Thrifty Acquisition

        On November 19, 2012, Hertz Holdings completed the Dollar Thrifty Acquisition pursuant to the terms of the Merger Agreement entered into among Hertz Holdings, Dollar Thrifty and Merger Sub. In accordance with the terms of the Merger Agreement, Merger Sub completed a tender offer in which it purchased a majority of the shares of Dollar Thrifty common stock then outstanding at a price equal to $87.50 per share in cash. Merger Sub subsequently acquired the remaining shares of Dollar Thrifty common stock by means of a short-form merger in which such shares were converted into the right to receive the same $87.50 per share in cash paid in the tender offer. After taking into account Hertz Holdings' use of approximately $400 million of cash and cash equivalents available from Dollar Thrifty, the purchase price for Dollar Thrifty's common stock was approximately $2.1 billion.

        Dollar Thrifty, through its Dollar Rent A Car ("Dollar") and Thrifty Car Rental ("Thrifty") brands, has been serving value-conscious leisure and business travelers since 1950. Dollar Thrifty maintains a strong presence in domestic leisure travel in many of the top U.S. and Canadian airport

 

17


Table of Contents

markets, and also derives a portion of its revenue from international travelers to the United States under contracts with various international tour operators. As of September 30, 2012, Dollar Thrifty had approximately 290 corporate locations in the United States and Canada, with approximately 5,800 employees located mainly in North America. In addition to its corporate operations, Dollar Thrifty had approximately 1,300 franchise locations in 82 countries. For the year ended December 31, 2011 and the nine months ended September 30, 2012, Dollar Thrifty had total revenues of approximately $1.5 billion and $1.2 billion, respectively.

Advantage Divestiture and Additional Divestiture of Airport Locations

        Pursuant to a consent decree we entered into with the Federal Trade Commission in connection with the Federal Trade Commission's review of the Dollar Thrifty Acquisition, we agreed to (i) divest Simply Wheelz LLC, a wholly owned subsidiary of Hertz that operated our Advantage Rent A Car business (the "Advantage Divestiture"), (ii) secure for the buyer of Advantage, Adreca Holdings Corp., a subsidiary of Macquarie Capital which is expected to be operated by Franchise Services of North America Inc. (the "Advantage Buyer"), on-airport car rental concessions and certain related assets at 13 locations where Dollar Thrifty operated at least one of its brands prior to the consummation of the Dollar Thrifty Acquisition (the "Initial Airport Locations"), and (iii) secure for the Advantage Buyer or, in certain cases, one or more other Federal Trade Commission-approved buyers, on-airport car rental concessions at 13 additional locations where Dollar Thrifty operated prior to the consummation of the Dollar Thrifty Acquisition (the "Secondary Airport Locations"). On December 12, 2012, Hertz completed the Advantage Divestiture pursuant to the terms of the Purchase Agreement, dated as of July 13, 2012, with the Advantage Buyer.

Issuance of the 2020 Notes and the 2022 Notes

        On October 16, 2012, the Escrow Issuer issued $700 million in aggregate principal amount of 5.875% Senior Notes due 2020 (the 2020 Notes that are, in part, the subject of these exchange offers) and $500 million in aggregate principal amount of 6.250% Senior Notes due 2022 (the 2022 Notes that are, in part, the subject of these exchange offers), each in a private offering exempt from the registration requirements of the Securities Act. The proceeds from this issuance were placed in escrow pending consummation of the Dollar Thrifty Acquisition. Contemporaneously with the consummation of the Dollar Thrifty Acquisition, the proceeds from the issuance were released from escrow, the Escrow Issuer merged with and into Hertz, with Hertz continuing as the surviving entity, and Hertz assumed the Escrow Issuer's obligations under the 2020 Notes, the 2022 Notes and the 2020 and 2022 Indenture. The proceeds of this issuance were used to: (i) finance a portion of the consideration in connection with the Dollar Thrifty Acquisition, (ii) pay off existing indebtedness and other obligations of Dollar Thrifty and its subsidiaries in connection with the Dollar Thrifty Acquisition and (iii) pay fees and other transaction expenses in connection with the Acquisition and Financing Transactions (as defined below under "—Incremental Term Loans").

Incremental Term Loans

        On October 9, 2012, Hertz entered into an Incremental Commitment Amendment to its March 2011 credit agreement, which had provided for a $1,400.0 million secured term loan facility (the "Senior Term Facility"). The Incremental Commitment Amendment increased the amount available under the Senior Term Facility by providing for commitments for an additional $750.0 million of incremental terms loans (the "Incremental Term Loans") under the Senior Term Facility. The Incremental Term Loans are secured by the same collateral and guaranteed by the same guarantors as the existing term loans under the Senior Term Facility. The Incremental Term Loans will, like the existing term loans under the Senior Term Facility, mature on March 11, 2018 and the interest rate per annum applicable thereto is the same as such existing term loans. Contemporaneously with the

 

18


Table of Contents

consummation of the Dollar Thrifty Acquisition, the Incremental Term Loans were fully drawn and the proceeds therefrom were used to: (i) finance a portion of the consideration in connection with the Dollar Thrifty Acquisition, (ii) pay off existing indebtedness and other obligations of Dollar Thrifty and its subsidiaries in connection with the Dollar Thrifty Acquisition and (iii) pay fees and other transaction expenses in connection with the Acquisition and Financing Transactions.

        We refer to the Dollar Thrifty Acquisition and related financing transactions, including the issuance of the 2020 Notes and 2022 Notes and the incurrence of the Incremental Term Loans, as the "Acquisition and Financing Transactions."

        For a description of the pro forma impact of (i) the acquisition of Donlen by Hertz in September 2011, (ii) the Dollar Thrifty Acquisition, (iii) the Advantage Divestiture, (iv) the divestitures of the Initial Airport Locations and the Secondary Airport Locations, (v) the issuance of the 2020 Notes and the 2022 Notes and (vi) the incurrence of $750.0 million in Incremental Term Loans, see "Unaudited Pro Forma Condensed Combined Financial Information."

Sale of Common Stock by the Sponsors

        On December 14, 2012, the Sponsors sold 50 million shares of their Hertz Holdings common stock to J.P. Morgan Securities LLC as the sole underwriter in the registered public offering of those shares. As a result of Hertz Holdings' initial public offering in November 2006 and subsequent offerings, including this December 2012 offering, the Sponsors' holdings represent approximately 26% of the outstanding shares of common stock of Hertz Holdings.

2013 ABS Offering

        On January 23, 2013, Hertz Vehicle Financing LLC, or "HVF," a special purpose bankruptcy remote limited liability company of which Hertz is the sole member, completed the issuance of $950.0 million in aggregate principal amount of three year and five year Series 2013-1 Rental Car Asset Backed Notes, Class A and Class B. The $282.75 million of three year Class A notes carry a 1.12% coupon, the $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.

        The net proceeds from the sale of the notes will be, to the extent permitted by the applicable agreements, (i) used to pay the purchase price of vehicles acquired by HVF pursuant to Hertz Holdings' U.S. ABS Program (as defined below under "Description of Certain Indebtedness—Fleet Debt—U.S. ABS Program"), (ii) used to pay the principal amount of other U.S. 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. See "Description of Certain Indebtedness—Fleet Debt" for a further description of the U.S. ABS Program.

 

19


Table of Contents


Ratio of Earnings to Fixed Charges

        Our consolidated ratios of earnings to fixed charges for each of the periods indicated are as follows:

Nine Months
Ended
September 30,
  Years Ended December 31,
2012   2011   2010   2009   2008   2007
2.0   1.5   1.0   (a)   (a)   1.3

(a)
Earnings (loss) before income taxes and fixed charges for the years ended December 31, 2009 and 2008 were inadequate to cover fixed charges for the period by $151.3 million and $1,419.4 million, respectively.

 

20


Table of Contents

RISK FACTORS

         You should carefully consider each of the risks and uncertainties set forth below as well as the other information contained in this prospectus before deciding to tender your outstanding Notes in the exchange offers. Any of the following risks and uncertainties could materially and adversely affect our business, financial condition, operating results or cash flows and we believe that the following information identifies the material risks and uncertainties affecting our company; however, the following risks and uncertainties are not the only risks and uncertainties facing us and it is possible that other risks and uncertainties might significantly impact us. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial also may materially and adversely affect our business, financial condition, results of operations, liquidity and cash flows. In such a case, the trading price of the Exchange Notes could decline or we may not be able to make payments of interest and principal on the Exchange Notes, and you may lose all or part of your original investment.


Risks Related to Our Business

Our car rental business, which provides the majority of our revenues, is particularly sensitive to reductions in the levels of airline passenger travel, and reductions in air travel could materially adversely impact our financial condition, results of operations, liquidity and cash flows.

        The car rental industry is particularly affected by reductions in business and leisure travel, especially with respect to levels of airline passenger traffic. Reductions in levels of air travel, whether caused by general economic conditions, airfare increases (such as due to capacity reductions or increases in fuel costs borne by commercial airlines) or other events (such as work stoppages, military conflicts, terrorist incidents, natural disasters, epidemic diseases, or the response of governments to any of these events) could materially adversely affect us. Further, decreases in levels of airline passenger traffic in key leisure destinations, including Florida, Hawaii, California and Texas, could also materially adversely affect us.

We face intense competition that may lead to downward pricing or an inability to increase prices.

        The markets in which we operate are highly competitive. We believe that price is one of the primary competitive factors in the car and equipment rental markets and that the Internet has enabled cost-conscious customers, including business travelers, to more easily compare rates available from rental companies. If we try to increase our pricing, our competitors, some of whom may have greater resources and better access to capital than us, may seek to compete aggressively on the basis of pricing. In addition, our competitors may reduce prices in order to attempt to gain a competitive advantage or to compensate for declines in rental activity. To the extent we do not match or remain within a reasonable competitive margin of our competitors' pricing, our revenues and results of operations could be materially adversely affected. If competitive pressures lead us to match any of our competitors' downward pricing and we are not able to reduce our operating costs, then our margins, results of operations and cash flows could be materially adversely impacted. Additionally, we could be further affected if we are not able to adjust the size of our car rental fleet in response to changes in demand, whether such changes are due to competition or otherwise. See the section of this prospectus entitled "Business—Worldwide Car Rental—Competition."

Our business is highly seasonal and any occurrence that disrupts rental activity during our peak periods could materially adversely affect our liquidity, cash flows and results of operations.

        Certain significant components of our expenses are fixed in the short-term, including minimum concession fees, real estate taxes, rent, insurance, utilities, maintenance and other facility-related expenses, the costs of operating our information technology systems and minimum staffing costs. Seasonal changes in our revenues do not alter those fixed expenses, typically resulting in higher

21


Table of Contents

profitability in periods when our revenues are higher. The second and third quarters of the year have historically been our strongest quarters due to their increased levels of leisure travel and construction activity. Any occurrence that disrupts rental activity during the second or third quarters could have a disproportionately material adverse effect on our liquidity, cash flows and results of operations. Following the Dollar Thrifty Acquisition, we expect this risk to increase, as the scale of our car rental business and the related fixed costs have increased.

A material downsizing of our rental car fleet could require us to make additional cash payments for tax liabilities, which could be material.

        The Like-Kind Exchange Program, or "LKE Program," allows tax gains on the disposition of vehicles in our car rental fleet to be deferred and has resulted in deferrals of federal and state income taxes for prior years. If a qualified replacement vehicle is not purchased within a specific time period after vehicle disposal, then taxable gain is recognized. A material reduction in the net book value of our car rental fleet, a material and extended reduction in vehicle purchases and/or a material downsizing of our car rental fleet, for any reason, could result in reduced tax deferrals in the future, which in turn could require us to make material cash payments for U.S. federal and state income tax liabilities. In August 2010, we elected to temporarily suspend the U.S. car rental LKE Program. In October 2012, Hertz rescinded its election to suspend the U.S. car rental LKE Program. See the section of this prospectus entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Income Taxes."

        Dollar Thrifty similarly used an LKE Program prior to the Dollar Thrifty Acquisition, which allowed Dollar Thrifty to defer a material amount of federal and state income taxes beginning in 2002. Thus, our Dollar Thrifty subsidiary is subject to the similar risks described above related to material payments for tax liabilities in the event there is a material reduction in the net book value of its car rental fleet, a material and extended reduction in its vehicle purchases and/or a material downsizing of its car rental fleet, for any reason. Our ability to continue to defer the reversal of prior period tax deferrals by Dollar Thrifty will depend on a number of factors, including the net book value of its car rental fleet.

If we are unable to purchase adequate supplies of competitively priced cars or equipment and the cost of the cars or equipment we purchase increases, our financial condition, results of operations, liquidity and cash flows may be materially adversely affected.

        We are not a party to any long-term car supply arrangements with manufacturers. The price and other terms at which we can acquire cars thus varies based on market and other conditions. For example, certain car manufacturers have in the past, and may in the future, utilize strategies to de-emphasize sales to the car rental industry, which can negatively impact our ability to obtain cars on competitive terms and conditions. Consequently, there is no guarantee that we can purchase a sufficient number of vehicles at competitive prices and on competitive terms and conditions. Reduced or limited supplies of equipment together with increased prices are risks that we also face in our equipment rental business. If we are unable to obtain an adequate supply of cars or equipment, or if we obtain less favorable pricing and other terms when we acquire cars or equipment and are unable to pass on any increased costs to our customers, then our financial condition, results of operations, liquidity and cash flows may be materially adversely affected.

Declines in the value of the non-program cars in our fleet and declines in the overall number of program cars in our fleet could materially adversely impact our financial condition, results of operations, liquidity and cash flows.

        Over the last few years the percentage of "program cars" in our car rental fleet (that is, cars that are subject to repurchase by car manufacturers under contractual repurchase or guaranteed

22


Table of Contents

depreciation programs) has decreased. For the nine-month period ended September 30, 2012 and the year ended December 31, 2011, 35% and 48%, respectively, of the vehicles purchased for our combined U.S. and international car rental fleets were program cars. We expect this percentage to continue to decrease 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 Dollar Thrifty Acquisition.

        With respect to program cars, manufacturers agree to repurchase these cars at a specified price or guarantee the depreciation rate on the cars during a specified time period. Therefore, 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 at such time. Any decrease in residual values with respect to our non-program cars and equipment (prior to disposition) could also materially adversely affect our financial condition, results of operations, liquidity and cash flows.

        The use of program cars enables us to determine our depreciation expense in advance and this is useful to us because depreciation is a significant cost factor in our operations. Using program cars is also useful in managing our seasonal peak demand for fleet, because in certain cases we can sell certain program cars shortly after having acquired them at a higher value than what we could for a similar non-program car at that time. With fewer program cars in our fleet, these benefits have diminished. Accordingly, we are now bearing increased risk relating to residual value and the related depreciation on our car rental fleet and our flexibility to reduce the size of our fleet by returning cars sooner than originally expected without the risk of loss in the event of an economic downturn or to respond to changes in rental demand has been reduced.

The failure of a manufacturer of our program cars to fulfill its obligations under a repurchase or guaranteed depreciation program could expose us to loss on those program cars and materially adversely affect certain of our financing arrangements, which could in turn materially adversely affect our liquidity, cash flows, financial condition and results of operations.

        If any manufacturer of our program cars does not fulfill its obligations under its repurchase or guaranteed depreciation agreement with us, whether due to default, reorganization, bankruptcy or otherwise, then we would have to dispose of those program cars without receiving the benefits of the associated programs (we could be left with a substantial unpaid claim against the manufacturer with respect to program cars that were sold and returned to the manufacturer but not paid for, or that were sold for less than their agreed repurchase price or guaranteed value) and we would also be exposed to residual risk with respect to these cars.

        The failure by a manufacturer to pay such amounts could cause a credit enhancement deficiency with respect to our asset-backed and asset-based financing arrangements, requiring us to either reduce the outstanding principal amount of debt or provide more collateral (in the form of cash, vehicles and/or certain other contractual rights) to the creditors under any such affected arrangement.

        If one or more manufacturers were to adversely modify or eliminate repurchase or guaranteed depreciation programs in the future, our access to and the terms of asset-backed and asset-based debt financing could be adversely affected, which could in turn have a material adverse effect on our liquidity, cash flows, financial condition and results of operations.

We may not be successful in implementing our strategy of further reducing operating costs and our cost reduction initiatives may have adverse consequences.

        We are continuing to implement initiatives to reduce our operating expenses. These initiatives may include headcount reductions, business process outsourcing, business process re-engineering, internal reorganization and other expense controls. We cannot assure you that our cost reduction initiatives will achieve any further success. Whether or not successful, our cost reduction initiatives involve significant

23


Table of Contents

expenses and we expect to incur further expenses associated with these initiatives, some of which may be material in the period in which they are incurred.

        Even if we achieve further success with our cost reduction initiatives, we face risks associated with our initiatives, including declines in employee morale or the level of customer service we provide, the efficiency of our operations or the effectiveness of our internal controls. Any of these risks could have a material adverse impact on our results of operations, financial condition, liquidity and cash flows.

An impairment of our goodwill or our indefinite lived intangible assets could have a material non-cash adverse impact on our results of operations.

        We review our goodwill and indefinite lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable and at least annually. If economic deterioration occurs, then we may be required to record charges for goodwill or indefinite lived intangible asset impairments in the future, which could have a material adverse non-cash impact on our results of operations.

Significant increases in fuel prices or reduced supplies of fuel could harm our business.

        Significant increases in fuel prices, reduced fuel supplies or the imposition of mandatory allocations or rationing of fuel could negatively impact our car rental business by discouraging consumers from renting cars, changing the types of cars our customers rent from us or the other services they purchase from us or disrupting air travel, on which a significant portion of our car rental business relies. In addition, significant increases in fuel prices or a reduction in fuel supplies could negatively impact our equipment rental business by increasing the cost of buying new equipment, since fuel is used in the manufacturing process and in delivering equipment to us, and by reducing the mobility of our fleet, due to higher costs of transporting equipment between facilities or regions. Accordingly, significant increases in fuel prices or reduced supplies of fuel could have a material adverse effect on our financial condition and results of operations.

Our foreign operations expose us to risks that may materially adversely affect our results of operations, liquidity and cash flows.

        A significant portion of our annual revenues are generated outside the United States, and we intend to pursue additional international growth opportunities. Operating in many different countries exposes us to varying risks, which include: (i) multiple, and sometimes conflicting, foreign regulatory requirements and laws that are subject to change and are often much different than the domestic laws in the United States, including laws relating to taxes, automobile-related liability, insurance rates, insurance products, consumer privacy, data security, employment matters, cost and fee recovery, and the protection of our trademarks and other intellectual property; (ii) the effect of foreign currency translation risk, as well as limitations on our ability to repatriate income; (iii) varying tax regimes, including consequences from changes in applicable tax laws; (iv) local ownership or investment requirements, as well as difficulties in obtaining financing in foreign countries for local operations; and (v) political and economic instability, natural calamities, war, and terrorism. The effects of these risks may, individually or in the aggregate, materially adversely affect our results of operations, liquidity, cash flows and ability to diversify internationally.

Manufacturer safety recalls could create risks to our business.

        Our cars may be subject to safety recalls by their manufacturers. A recall may cause us to retrieve cars from renters and decline to rent recalled cars until we can arrange for the steps described in the recall to be taken. We could also face liability claims if a recall affects cars that we have sold. If a large number of cars are the subject of a recall or if needed replacement parts are not in adequate supply,

24


Table of Contents

we may not be able to rent recalled cars for a significant period of time. Those types of disruptions could jeopardize our ability to fulfill existing contractual commitments or satisfy demand for our vehicles, and could also result in the loss of business to our competitors. Depending on the severity of any recall, it could materially adversely affect our revenues, create customer service problems, reduce the residual value of the recalled cars and harm our general reputation.

Our business is heavily reliant upon communications networks and centralized information technology systems and the concentration of our systems creates risks for us.

        We rely heavily on communication networks and information technology systems to accept reservations, process rental and sales transactions, manage our fleets of cars and equipment, manage our financing arrangements, account for our activities and otherwise conduct our business. Our reliance on these networks and systems exposes us to various risks that could cause a loss of reservations, interfere with our ability to manage our fleet, slow rental and sales processes, limit our ability to comply with our financing arrangements and otherwise materially adversely affect our ability to manage our business effectively. We have centralized our reservations function for the United States in one facility in Oklahoma City, Oklahoma, and we have concentrated our accounting functions for the United States in two facilities in Oklahoma City. Our reservations and accounting functions for our European operations are similarly centralized in a single facility near Dublin, Ireland. In addition, our major information technology systems are centralized in two facilities in Oklahoma City. Our Dollar and Thrifty brands' centralized information systems are located in Tulsa, Oklahoma and our Dollar and Thrifty brands rely on communication service providers to link their system with the business locations these systems serve. Any disruption, termination or substandard provision of these services, whether as the result of localized conditions (such as a fire or explosion) or as the result of events or circumstances of broader geographic impact (such as an earthquake, storm, flood, epidemic, strike, act of war, civil unrest or terrorist act), could materially adversely affect our business by disrupting normal reservations, customer service, accounting and information technology functions or by eliminating access to financing arrangements.

The misuse or theft of information we possess could harm our brand, reputation or competitive position and give rise to material liabilities.

        Because we regularly possess, store and handle non-public information about millions of individuals and businesses, our failure to maintain the security of that data, whether as the result of our own error or the malfeasance or errors of others, could harm our reputation, result in governmental investigations and give rise to a host of civil or criminal liabilities. Any such failure could lead to lower revenues, increased costs and other material adverse effects on our results of operations.

Maintaining favorable brand recognition is essential to our success, and failure to do so could materially adversely affect our results of operations.

        While our "Hertz," "Dollar" and "Thrifty" brand names have substantial brand recognition in the markets in which they participate, factors affecting brand recognition are often outside our control, and our efforts to maintain or enhance favorable brand recognition, such as marketing and advertising campaigns, may not have their desired effects. In addition, although our licensing partners are subject to contractual requirements to protect our brands, it may be difficult to monitor or enforce such requirements, particularly in foreign jurisdictions. Any decline in perceived favorable recognition of our brands could materially adversely affect our results of operations.

25


Table of Contents

Our business operations could be significantly disrupted if we were to lose the services of members of our senior management team.

        Our senior management team has extensive industry experience, and our success significantly depends upon the continued contributions of that team. If we were to lose the services of any one or more members of our senior management team, whether due to death, disability or termination of employment, our ability to successfully implement our business strategy, financial plans, marketing and other objectives, could be significantly impaired.

We may pursue strategic transactions which could be difficult to implement, disrupt our business or change our business profile significantly.

        Any future strategic acquisition or disposition of assets or a business could involve numerous risks, including: (i) potential disruption of our ongoing business and distraction of management; (ii) difficulty integrating the acquired business or segregating assets to be disposed of; (iii) exposure to unknown, contingent or other liabilities, including litigation arising in connection with the acquisition or disposition or against any business we may acquire; (iv) changing our business profile in ways that could have unintended negative consequences; and (v) the failure to achieve anticipated synergies.

        If we enter into significant strategic transactions, the related accounting charges may affect our financial condition and results of operations, particularly in the case of an acquisition. The financing of any significant acquisition may result in changes in our capital structure, including the incurrence of additional indebtedness. A material disposition could require the amendment or refinancing of our outstanding indebtedness or a portion thereof.

        As a result of the completion of the Dollar Thrifty Acquisition, we are subject to the risks and uncertainties associated with Dollar Thrifty's business, and we have incurred a substantial amount of additional indebtedness.

We face risks related to liabilities and insurance.

        Our businesses expose us to claims for personal injury, death and property damage resulting from the use of the cars and equipment rented or sold by us, and for employment-related claims by our employees. Currently, we generally self-insure up to $10 million per occurrence in the United States and Europe for vehicle and general liability exposures, and we also maintain insurance with unaffiliated carriers in excess of such levels up to $200 million per occurrence for the current policy year, or in the case of international operations outside of Europe, in such lower amounts as we deem adequate given the risks. We cannot assure you that we will not be exposed to uninsured liability at levels in excess of our historical levels resulting from multiple payouts or otherwise, that liabilities in respect of existing or future claims will not exceed the level of our insurance, that we will have sufficient capital available to pay any uninsured claims or that insurance with unaffiliated carriers will continue to be available to us on economically reasonable terms or at all. See the sections of this prospectus entitled "Business—Risk Management" and "Legal Proceedings."

We could face a significant withdrawal liability if we withdraw from participation in one or more multiemployer pension plans in which we participate and at least one multiemployer plan in which we participate is reported to have underfunded liabilities.

        We participate in various "multiemployer" pension plans. In the event that we withdraw from participation in one of these plans, then applicable law could require us to make an additional contribution to the plan, and we would have to reflect that as an expense in our consolidated statements of operations and as a liability on our consolidated balance sheet. The amount that we would be required to pay to the plan is referred to as a withdrawal liability. Our withdrawal liability for any multiemployer plan would depend on the extent of the plan's funding of vested benefit. One

26


Table of Contents

multiemployer plan in which we participated had significant underfunded liabilities and we withdrew from that plan in December 2012. Several of our remaining multiemployer plans have 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. See Note 5 to our audited annual consolidated financial statements and Note 8 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.

Environmental laws and regulations and the costs of complying with them, or any liability or obligation imposed under them, could materially adversely affect our financial position, results of operations or cash flows.

        We are subject to federal, state, local and foreign environmental laws and regulations in connection with our operations, including with respect to the ownership and operation of tanks for the storage of petroleum products, such as gasoline, diesel fuel and motor and waste oils. We cannot assure you that our tanks will at all times remain free from leaks or that the use of these tanks will not result in significant spills or leakage. If leakage or a spill occurs, it is possible that the resulting costs of cleanup, investigation and remediation, as well as any resulting fines, could be significant. We cannot assure you that compliance with existing or future environmental laws and regulations will not require material expenditures by us or otherwise have a material adverse effect on our consolidated financial position, results of operations or cash flows. See the section of this prospectus entitled "Business—Governmental Regulation and Environmental Matters."

        The U.S. Congress and other legislative and regulatory authorities in the United States and internationally have considered, and will likely continue to consider, numerous measures related to climate change and greenhouse gas emissions. Should rules establishing limitations on greenhouse gas emissions or rules imposing fees on entities deemed to be responsible for greenhouse gas emissions become effective, demand for our services could be affected, our fleet and/or other costs could increase, and our business could be adversely affected.

Changes in the U.S. legal and regulatory environment that affect our operations, including laws and regulations relating to taxes, automobile-related liability, insurance rates, insurance products, consumer privacy, data security, employment matters, cost and fee recovery and the banking and financing industry could disrupt our business, increase our expenses or otherwise have a material adverse effect on our results of operations.

        We are subject to a wide variety of U.S. laws and regulations and changes in the level of government regulation of our business have the potential to materially alter our business practices and materially adversely affect our financial position and results of operations, including our profitability. Those changes may come about through new laws and regulations or changes in the interpretation of existing laws and regulations.

        Any new, or change in existing, U.S. law and regulation with respect to optional insurance products or policies could increase our costs of compliance or make it uneconomical to offer such products, which would lead to a reduction in revenue and profitability. For further discussion regarding how changes in the regulation of insurance intermediaries may affect us, see the section of this prospectus entitled "Business—Risk Management." If customers decline to purchase supplemental liability insurance products from us as a result of any changes in these laws or otherwise, our results of operations could be materially adversely affected.

27


Table of Contents

        Changes in the U.S. legal and regulatory environment in the areas of customer privacy, data security and cross-border data flow could have a material adverse effect on our business, primarily through the impairment of our marketing and transaction processing activities, and the resulting costs of complying with such legal and regulatory requirements. It is also possible that we could face significant liability for failing to comply with any such requirements.

        In most places where we operate, we pass through various expenses, including the recovery of vehicle licensing costs and airport concession fees, to our rental customers as separate charges. We believe that our expense pass-throughs, where imposed, are properly disclosed and are lawful. However, we may in the future be subject to potential legislative, regulatory or administrative changes or actions which could limit, restrict or prohibit our ability to separately state, charge and recover vehicle licensing costs and airport concession fees, which could result in a material adverse effect on our results of operations.

        Certain new or proposed laws and regulations with respect to the banking and finance industries, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and amendments to Regulation AB, could restrict our access to certain financing arrangements and increase our financing costs, which could have a material adverse effect on our financial position, results of operations, liquidity and cash flows.

Investment funds associated with or designated by the Sponsors will continue to exercise significant control over Hertz Holdings' and our Board of Directors, management, policies and significant transactions, and may have interests that differ from Hertz Holdings' other stockholders and holders of the Exchange Notes and the Notes.

        Hertz Holdings is a party to an amended and restated stockholders' agreement (the "Stockholders' Agreement") among it and investment funds associated with or designated by the Sponsors. Investment funds associated with or designated by the Sponsors currently beneficially own, in the aggregate, approximately 26% of the outstanding shares of Hertz Holdings' common stock. Pursuant to the Stockholders' Agreement, each of the funds has agreed to vote in favor of the other funds' nominees to Hertz Holdings' and our Board of Directors. The Sponsors currently exercise, and will continue to exercise, significant influence over Hertz Holdings' and our Board of Directors, matters requiring stockholder approval and our management, policies and affairs for so long as the investment funds associated with or designated by the Sponsors continue to hold a significant amount of Hertz Holdings' common stock. There can be no assurance that the interests of the Sponsors will not conflict with those of Hertz Holdings' other stockholders or with those of the holders of the Exchange Notes and the holders of the Notes. The Sponsors currently have the ability to significantly influence the vote on any transaction that requires the approval of stockholders, including many possible change in control transactions, and may discourage or prevent any such transaction regardless of whether or not Hertz Holdings' other stockholders believe that such a transaction is in Hertz Holdings' or their own best interests.

        Additionally, the Sponsors may from time to time acquire and hold interests in businesses that compete directly with us. One or more of the Sponsors may also pursue acquisition opportunities and other corporate opportunities that may be complementary to our business and as a result, those opportunities may not be available to us.


Risks Related to the Dollar Thrifty Acquisition

Combining the businesses of Hertz and Dollar Thrifty may be more difficult, costly or time-consuming than expected, which may adversely affect our results.

        To realize the anticipated benefits and cost savings as contemplated by Hertz as part of the Dollar Thrifty Acquisition, Hertz must successfully combine and integrate the businesses of Hertz and Dollar

28


Table of Contents

Thrifty in an efficient and effective manner. If Hertz is not able to achieve these objectives within the anticipated time frame, or at all, the anticipated benefits and cost savings of the Dollar Thrifty Acquisition may not be realized fully, or at all, or may take longer to realize than expected. It is possible that the overall integration process could result in the loss of key employees, the disruption of each company's ongoing business or inconsistencies in standards, controls, procedures and policies that adversely affect Hertz's ability to maintain relationships with customers, employees, suppliers and franchisees or to achieve the anticipated benefits of the Dollar Thrifty Acquisition.

        Specifically, issues that must be addressed in integrating the operations of Dollar Thrifty into Hertz's operations in order to realize the anticipated benefits of the Dollar Thrifty Acquisition include, among other things:

    integrating and optimizing the utilization of the rental vehicle fleets and related financing of Hertz and Dollar Thrifty;

    integrating and consolidating the marketing, promotion, reservation and information technology systems of Hertz and Dollar Thrifty;

    conforming standards, controls, procedures and policies, business cultures and compensation structures between the companies;

    consolidating the automotive purchasing, maintenance and resale operations;

    consolidating corporate and administrative functions; and

    identifying and eliminating redundant and underperforming operations and assets.

        Integration efforts between the two companies will also divert management attention and resources. An inability to realize the full extent of the anticipated benefits of the Dollar Thrifty Acquisition, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of Hertz after the completion of the Dollar Thrifty Acquisition.

        In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual synergies, if achieved at all, may be lower than what Hertz expects and may take longer to achieve than anticipated. If Hertz is not able to adequately address these challenges, Hertz may be unable to successfully integrate Dollar Thrifty.

Hertz has incurred significant transaction and acquisition-related costs in connection with the Dollar Thrifty Acquisition and expects to incur additional costs in connection with the integration of Dollar Thrifty's operations.

        Hertz has incurred and expects to continue to incur a number of non-recurring costs associated with combining the operations of the two companies. Most of these costs have been and will be comprised of transaction costs related to the Dollar Thrifty Acquisition, facilities, fleet and systems consolidation costs and employment-related costs. Hertz also incurred transaction fees and costs related to formulating integration plans. Although Hertz expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow Hertz to offset the previously-incurred incremental transaction and acquisition-related costs over time, this net benefit may not be achieved in the near term, or at all.

Future results of the combined company may differ materially from the Unaudited Pro Forma Condensed Combined Financial Information of Hertz and Dollar Thrifty presented in this prospectus.

        The future results of Hertz, as the combined company following the Dollar Thrifty Acquisition, may be materially different from those shown in the pro forma financial information presented in this

29


Table of Contents

prospectus under "Unaudited Pro Forma Condensed Combined Financial Information" that reflect such results on a pro forma basis after giving effect only to: (i) the acquisition of Donlen by Hertz in September 2011, (ii) the Dollar Thrifty Acquisition, (iii) the Advantage Divestiture, (iv) the divestitures of the Initial Airport Locations and the Secondary Airport Locations, (v) the issuance of the 2020 Notes and the 2022 Notes and (vi) the incurrence of $750.0 million in Incremental Term Loans; in each case of (i) through (vi) above, as if they had occurred on January 1, 2011 for the pro forma financial information for the year ended December 31, 2011 and for the nine months ended September 30, 2012; and in each case (ii) through (vi) above, as if they had occurred on September 30, 2012 for the pro forma financial information as of September 30, 2012. Additionally, Hertz has estimated that it will record approximately $41 million of aggregate acquisition-related fees and expenses, and that Dollar Thrifty incurred approximately $38 million of aggregate acquisition-related fees and expenses, as described in the notes to the pro forma financial information included in this prospectus.

        The pro forma financial information presented in this prospectus reflects the acquisition method of accounting under accounting principles generally accepted in the United States of America, and is subject to change and interpretation. Acquisition accounting is dependent upon certain valuations and other studies have not yet been completed at the time of the preparation of this prospectus. It is likely that the actual adjustments reflected in the final acquisition accounting, which will consider additional information as it becomes available, will differ from the pro forma adjustments used to prepare the pro forma financial information presented under "Unaudited Pro Forma Condensed Combined Financial Information," and such differences could have a material impact on the pro forma financial information. The pro forma financial information also does not give effect to certain one-time charges that Hertz Holdings and Dollar Thrifty incurred or will incur in connection with the Dollar Thrifty Acquisition. Accordingly, the pro forma financial information presented in this prospectus has been presented for informational purposes only. The pro forma financial information is not necessarily indicative of what the combined company's financial position or results of operations actually would have been had the applicable transactions been completed as of the dates indicated. In addition, the pro forma financial information does not purport to project the future financial position or operating results of the combined company.

Certain existing indebtedness of Dollar Thrifty and its subsidiaries, if not refinanced, amended or repaid, may decrease Hertz's business flexibility, reduce its ability to incur additional indebtedness, affect its existing debt covenants, increase its borrowing costs or result in repayment or collateralization obligations.

        Certain of Dollar Thrifty's existing indebtedness remains outstanding after the closing of the Dollar Thrifty Acquisition, including most of Dollar Thrifty's existing fleet financing. As of September 30, 2012, Dollar Thrifty's indebtedness was approximately $1.48 billion. For a description of Dollar Thrifty's indebtedness and other obligations as of September 30, 2012, see Note 7 to the unaudited interim condensed consolidated financial statements of Dollar Thrifty included elsewhere in this prospectus. See "—Risks Related to Our Substantial Indebtedness—Our substantial level of indebtedness could adversely affect our results of operations, cash flows, liquidity and ability to compete in our industry." To service our indebtedness, we will require a significant amount of cash which we may not be able to raise or generate.


Risks Related to Our Substantial Indebtedness

Our substantial level of indebtedness could materially adversely affect our results of operations, cash flows, liquidity and ability to compete in our industry.

        As of September 30, 2012, we had debt outstanding of $12.3 billion. We incurred an additional $1.95 billion in indebtedness in connection with the Dollar Thrifty Acquisition, through (i) the issuance of the $1.20 billion in aggregate principal amount of the 2020 Notes and 2022 Notes and (ii) the incurrence of $750.0 million of indebtedness under the Incremental Term Loans. In addition, in

30


Table of Contents

January 2013 HVF completed the issuance of $950.0 million in aggregate principal amount of the Series 2013-1 Rental Car Asset Backed Notes. See "Capitalization" for a description of our consolidated indebtedness as of September 30, 2012, as adjusted to reflect the incurrence of this indebtedness. In addition, certain of Dollar Thrifty's existing indebtedness remains outstanding after the closing of the Dollar Thrifty Acquisition, including most of Dollar Thrifty's existing fleet financing. As of September 30, 2012, Dollar Thrifty's indebtedness was approximately $1.48 billion. For a description of Dollar Thrifty's indebtedness and other obligations as of September 30, 2012, see Note 7 to the unaudited interim condensed consolidated financial statements of Dollar Thrifty included elsewhere in this prospectus. See also "Unaudited Pro Forma Condensed Combined Financial Information" for a description of the pro forma impact of, among other events, the Dollar Thrifty Acquisition. Our substantial indebtedness could materially adversely affect us. For example, it could: (i) make it more difficult for us to satisfy our obligations to the holders of our outstanding debt securities and to the lenders under our various credit facilities, resulting in possible defaults on, and acceleration of, such indebtedness; (ii) be difficult to refinance or borrow additional funds in the future; (iii) require us to dedicate a substantial portion of our cash flows from operations and investing activities to make payments on our debt, which would reduce our ability to fund working capital, capital expenditures or other general corporate purposes; (iv) increase our vulnerability to general adverse economic and industry conditions (such as credit-related disruptions); including interest rate fluctuations, because a portion of our borrowings are at floating rates of interest and are not hedged against rising interest rates, and the risk that one or more of the financial institutions providing commitments under our revolving credit facilities fails to fund an extension of credit under any such facility, due to insolvency or otherwise, leaving us with less liquidity than expected; (v) place us at a competitive disadvantage to our competitors that have proportionately less debt or comparable debt at more favorable interest rates or on better terms; and (vi) limit our ability to react to competitive pressures, or make it difficult for us to carry out capital spending that is necessary or important to our growth strategy and our efforts to improve operating margins. While the terms of the agreements and instruments governing our outstanding indebtedness contain certain restrictions upon our ability to incur additional indebtedness, they do not fully prohibit us from incurring substantial additional indebtedness and do not prevent us from incurring obligations that do not constitute indebtedness. If new debt or other obligations are added to our current liability levels without a corresponding refinancing or redemption of our existing indebtedness and obligations, these risks would increase. For a description of the amounts we have available under certain of our debt facilities, see the section of this prospectus entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facilities."

        Our ability to manage these risks depends on financial market conditions as well as our financial and operating performance, which, in turn, is subject to a wide range of risks, including those described under "—Risks Related to Our Business."

        If our capital resources (including borrowings under our revolving credit facilities and access to other refinancing indebtedness) and operating cash flows are not sufficient to pay our obligations as they mature or to fund our liquidity needs, we may be forced to do, among other things, one or more of the following: (i) sell certain of our assets; (ii) reduce the size of our rental fleet; (iii) reduce the percentage of program cars in our rental fleet; (iv) reduce or delay capital expenditures; (v) obtain additional equity capital; (vi) forgo business opportunities, including acquisitions and joint ventures; or (vii) restructure or refinance all or a portion of our debt on or before maturity.

        We cannot assure you that we would be able to accomplish any of these alternatives on a timely basis or on satisfactory terms, if at all. Furthermore, we cannot assure you that we will maintain financing activities and cash flows sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. If we cannot refinance or otherwise pay our obligations as they mature and fund our liquidity needs, our business, financial condition, results of operations, cash flows,

31


Table of Contents

liquidity, ability to obtain financing and ability to compete in our industry could be materially adversely affected.

Our reliance on asset-backed and asset-based financing arrangements to purchase cars subjects us to a number of risks, many of which are beyond our control.

        We rely significantly on asset-backed and asset-based financing to purchase cars. If we are unable to refinance or replace our existing asset-backed and asset-based financing or continue to finance new car acquisitions through asset- backed or asset-based financing on favorable terms, on a timely basis, or at all, then our costs of financing could increase significantly and have a material adverse effect on our liquidity, interest costs, financial condition, cash flows and results of operations.

        Our asset-backed and asset-based financing capacity could be decreased, our financing costs and interest rates could be increased, or our future access to the financial markets could be limited, as a result of risks and contingencies, many of which are beyond our control, including: (i) the acceptance by credit markets of the structures and structural risks associated with our asset-backed and asset-based financing arrangements; (ii) the credit ratings provided by credit rating agencies for our asset-backed indebtedness; (iii) third parties requiring changes in the terms and structure of our asset-backed or asset-based financing arrangements, including increased credit enhancement or required cash collateral and/or other liquid reserves; (iv) the insolvency or deterioration of the financial condition of one or more of our principal car manufacturers; or (v) changes in laws or regulations, including judicial review of issues of first impression, that negatively impact any of our asset- backed or asset-based financing arrangements.

        Any reduction in the value of certain cars in our rental fleet could effectively increase our car fleet costs, adversely impact our profitability and potentially lead to decreased borrowing base availability in our asset-backed and certain asset-based vehicle financing facilities due to the credit enhancement requirements for such facilities, which could increase if market values for vehicles decrease below net book values for those vehicles. In addition, if disposal of vehicles in the used vehicle marketplace were to become severely limited at a time when required collateral levels were rising and as a result we failed to meet the minimum required collateral levels, the principal under our asset-backed and certain asset-based financing arrangements may be required to be repaid sooner than anticipated with vehicle disposition proceeds and lease payments we make to our special purpose financing subsidiaries. If that were to occur, the holders of our asset-backed and certain asset-based debt may have the ability to exercise their right to direct the trustee to foreclose on and sell vehicles to generate proceeds sufficient to repay such debt.

        The occurrence of certain events, including those described in the paragraph above, could result in the occurrence of an amortization event pursuant to which the proceeds of sales of cars that collateralize the affected asset-backed financing arrangement would be required to be applied to the payment of principal and interest on the affected facility or series, rather than being reinvested in our car rental fleet. In the case of our asset-backed financing arrangements, certain other events, including defaults by us and our affiliates in the performance of covenants set forth in the agreements governing certain fleet debt, could result in the occurrence of a liquidation event with the passing of time or immediately pursuant to which the trustee or holders of the affected asset-backed financing arrangement would be permitted to require the sale of the assets collateralizing that series. Any of these consequences could affect our liquidity and our ability to maintain sufficient fleet levels to meet customer demands and could trigger cross-defaults under certain of our other financing arrangements.

        Any reduction in the value of the equipment rental fleet of HERC (which could occur due to a reduction in the size of the fleet or the value of the assets within the fleet) could not only effectively increase our equipment rental fleet costs and adversely impact our profitability, but would result in decreased borrowing base availability under certain of our asset-based financing arrangements, which

32


Table of Contents

would have a material adverse effect on our financial position, liquidity, cash flows and results of operations.

Substantially all of our consolidated assets secure certain of our outstanding indebtedness, which could materially adversely affect our debt and equity holders and our business.

        Substantially all of our consolidated assets, including our car and equipment rental fleets, are subject to security interests or are otherwise encumbered for the lenders under our asset-backed and asset-based financing arrangements. As a result, the lenders under those facilities would have a prior claim on such assets in the event of our bankruptcy, insolvency, liquidation or reorganization, and we may not have sufficient funds to pay in full, or at all, all of our creditors, including the holders of the Exchange Notes, or make any amount available to holders of our equity. The same is true with respect to structurally senior obligations: in general, all liabilities and other obligations of a subsidiary must be satisfied before the assets of such subsidiary can be made available to the creditors (or equity holders) of the parent entity.

        Because substantially all of our assets are encumbered under financing arrangements, our ability to incur additional secured indebtedness or to sell or dispose of assets to raise capital may be impaired, which could have a material adverse effect on our financial flexibility and force us to attempt to incur additional unsecured indebtedness, which may not be available to us.

Restrictive covenants in certain of the agreements and instruments governing our indebtedness may materially adversely affect our financial flexibility or may have other material adverse effects on our business, financial condition, cash flows and results of operations.

        Certain of our credit facilities and other asset-based and asset-backed financing arrangements contain covenants that, among other things, restrict Hertz and its subsidiaries' ability to: (i) dispose of assets; (ii) incur additional indebtedness; (iii) incur guarantee obligations; (iv) prepay other indebtedness or amend other financing arrangements; (v) pay dividends; (vi) create liens on assets; (vii) sell assets; (viii) make investments, loans, advances or capital expenditures; (ix) make acquisitions; (x) engage in mergers or consolidations; (xi) change the business conducted by us; and (xii) engage in certain transactions with affiliates.

        Our Senior ABL Facility (as defined below in "Description of Certain Indebtedness") contains a financial covenant that obligates us to maintain a specified fixed charge coverage ratio if we fail to maintain a specified minimum level of liquidity. Our ability to comply with this covenant will depend on our ongoing financial and operating performance, which in turn are subject to, among other things, the risks identified in "—Risks Related to Our Business."

        The agreements governing our financing arrangements contain numerous covenants. The breach of any of these covenants or restrictions could result in a default under the relevant agreement, which could, in turn, cause cross-defaults under our other financing arrangements. In such event, we may be unable to borrow under the Senior ABL Facility and certain of our other financing arrangements and may not be able to repay the amounts due under such arrangements. Therefore, we would need to raise refinancing indebtedness, which may not be available to us on favorable terms, on a timely basis or at all. This could have serious consequences to our financial condition and results of operations and could cause us to become bankrupt or insolvent. Additionally, such defaults could require us to sell assets, if possible, and otherwise curtail our operations in order to pay our creditors. Such alternative measures could have a material adverse effect on our business, financial condition, cash flows and results of operations.

33


Table of Contents

An increase in interest rates or in our borrowing margin would increase the cost of servicing our debt and could reduce our profitability.

        A significant portion of our outstanding debt bears interest at floating rates. As a result, to the extent we have not hedged against rising interest rates, an increase in the applicable benchmark interest rates would increase our cost of servicing our debt and could materially adversely affect our liquidity and results of operations.

        In addition, we regularly refinance our indebtedness. If interest rates or our borrowing margins increase between the time an existing financing arrangement was consummated and the time such financing arrangement is refinanced, the cost of servicing our debt would increase and our liquidity and results of operations could be materially adversely affected.


Risks Related to the Exchange Offers

Your ability to transfer the Exchange Notes may be limited by the absence of a trading market or the failure to sustain any existing trading markets, and there is no assurance as to the liquidity of any such trading markets.

        We are offering the Exchange Notes to the holders of the Notes. The Notes were issued in private placements in March 2012 and October 2012 to qualified institutional buyers under Rule 144A and other investors under Regulation S. We do not intend to apply for a listing of any class of the Exchange Notes on a securities exchange or on any automated dealer quotation system. The Exchange 2020 Notes and Exchange 2022 Notes will be new securities for which there is currently no existing market. As such, we cannot assure you that a market for such notes will develop or be sustained, or as to the liquidity of any such market that might develop. Although a market exists for the Existing Exchange 2019 Notes, we cannot assure you that the market will be sustained or as to the liquidity of such market. We cannot guarantee your ability to sell any class of the Exchange Notes or the price at which you would be able to sell any class of the Exchange Notes in any trading markets. Even if such markets are developed, sustained or liquid, as the case may be, the Exchange Notes could trade at prices that may be lower than their principal amount or purchase price depending on many factors, including the number of holders of the Exchange Notes, prevailing interest rates, the market for similar securities, general economic conditions, recommendations of securities analysts, and our financial condition, performance, prospects and other factors.

        Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the Exchange Notes. The liquidity of, and trading market for, any class of the Exchange Notes may be adversely affected by a general decline in the market for similar securities and may experience similar disruptions and any such disruptions may adversely affect the prices at which you may sell your Exchange Notes. Any such disruption may have a negative effect on you, as a holder of the Exchange Notes, regardless of our prospects and financial performance. In addition, the Indentures will allow us to issue additional notes under the Indentures in the future, which could adversely impact the value or liquidity of the Exchange Notes.

You must comply with the procedures of the exchange offers in order to receive new, freely tradable Exchange Notes.

        Delivery of Exchange Notes in exchange for the Notes tendered and accepted for exchange pursuant to the exchange offers will be made only after you properly follow the procedures of the exchange offers. We are not required to notify you of defects or irregularities in tenders of Notes for exchange. The Notes that are not tendered or that are tendered but we do not accept for exchange will, following consummation of the exchange offers, continue to be subject to the existing transfer restrictions under the Securities Act and, upon consummation of the exchange offers, certain registration and other rights under the registration rights agreements will terminate.

34


Table of Contents

If you are a broker-dealer or participating in a distribution of the Exchange Notes, you may be required to deliver a prospectus and comply with other requirements.

        If you tender your Notes for the purpose of participating in a distribution of the Exchange Notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the Exchange Notes. If you are a broker-dealer that receives Exchange Notes for your own account in exchange for Notes that you acquired as a result of market-making activities or any other trading activities, you will be required to represent that you will deliver a prospectus in connection with any resale of such Exchange Notes.

You may have difficulty selling any Notes that you do not exchange.

        If you do not exchange your Notes for Exchange Notes in the exchange offers, you will continue to be subject to restrictions on transfer of your Notes as set forth in the offering memorandum distributed in connection with the private placements of the Notes. In general, the Notes may not be offered or sold unless they are registered or exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreements, we do not intend to register resales of the Notes under the Securities Act. See the sections of this prospectus entitled "The Exchange Offers—Purpose and Effect of the Exchange Offers" and "Plan of Distribution." The tender of Notes under the exchange offers will reduce the outstanding amount of the Notes, which may have an adverse effect upon, and increase the volatility of, the market prices of the Notes due to a reduction in liquidity.


Risks Related to the Exchange Notes and the Notes

The Exchange Notes will be, and the Notes are, unsecured and structurally subordinated to some of our obligations, and only certain of our subsidiaries guarantee the Notes and will guarantee the Exchange Notes.

        The Indentures governing the Exchange Notes and the Notes permit us to incur certain secured indebtedness, including indebtedness under the Senior Credit Facilities and other asset-based and asset-backed financing arrangements. Substantially all of our assets, including our car and equipment rental fleets, are subject to security interests or are otherwise encumbered for the lenders under our Senior Credit Facilities and other asset-backed and asset-based financing arrangements. The Exchange Notes and the Notes are unsecured and therefore do not have the benefit of such collateral. Accordingly, if an event of default occurs under the Senior Credit Facilities or other asset-backed or asset-based financing arrangements, the respective secured lenders will have a prior right to the subject assets, to the exclusion of the holders of the Exchange Notes and the holders of the Notes, even if we are in default under the Exchange Notes or the Notes, respectively. In that event, our assets would first be used to repay in full all indebtedness and other obligations secured by them, resulting in all or a portion of our assets being unavailable to satisfy the claims of the holders of the Exchange Notes and the holders of the Notes and other unsecured indebtedness. Further, if secured lenders foreclose and sell the pledged equity interests in any Subsidiary Guarantor under the Exchange Notes and the Notes, then that guarantor will be released from its guarantee of the Exchange Notes and the Notes automatically and immediately upon the sale.

        The Exchange Notes will not be, and the Notes are not, guaranteed by any of our non-U.S. subsidiaries, our non-wholly owned subsidiaries or certain other U.S. subsidiaries, including the U.S. and foreign financing subsidiaries under our asset-backed financing arrangements. Payments on the Exchange Notes and the Notes are only required to be made by Hertz and the Subsidiary Guarantors. Accordingly, claims of holders of the Exchange Notes and of holders of the Notes will be structurally subordinated to the claims of creditors of our non-guarantor subsidiaries, including trade creditors. All obligations of our non-guarantor subsidiaries will have to be satisfied before any of the assets of such subsidiaries would be available for distribution, upon liquidation or otherwise, to Hertz or a Subsidiary

35


Table of Contents

Guarantor. Furthermore, many of the non-guarantor subsidiaries that hold our U.S. and international car rental fleets in connection with asset-backed financing arrangements are intended to be bankruptcy remote and the assets held by them will not be available to our general creditors in a bankruptcy unless and until they are transferred to a non-bankruptcy remote entity. For the nine months ended September 30, 2012 and the year ended December 31, 2011, the majority of our consolidated U.S. revenues were generated by Hertz and the Subsidiary Guarantors. Our non-U.S. subsidiaries, none of which will be guarantors, generated approximately 31% and 35%, respectively, of our total revenues for the same period. The non-guarantor subsidiaries will be permitted to incur additional debt in the future under the Indentures governing the Exchange Notes and the Notes. See "Description of the Exchange 2019 Notes" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes."

        As of September 30, 2012, we had consolidated indebtedness of $12.3 billion. The Subsidiary Guarantors will guarantee Hertz's obligations under the Exchange Notes and currently guarantee Hertz's obligations under the Notes and its other Senior Notes and the Senior Credit Facilities. See "Description of Certain Indebtedness" and Notes 16 and 18 to both our audited annual consolidated financial statements and unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.

The assets of HERC may be disposed of by Hertz without being subject to many of the restrictions contained in the sections "Description of the Exchange 2019 Notes—Certain Covenants" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes—Certain Covenants."

        Under the Indentures, we have the ability to dispose of HERC, and other assets related to the business of renting earthmoving equipment, material handling equipment, aerial and electric equipment, air compressors, generators, pumps, small tools, compaction equipment and construction related trucks and the selling of new equipment and consumables of Hertz and its subsidiaries, without such disposition being governed by many of the restrictive covenants described under the sections "Description of the Exchange 2019 Notes—Certain Covenants" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes—Certain Covenants." Among other things, under the Indentures, HERC will be able to incur unlimited non-recourse debt, the payments of dividends or other distributions of equity interest in, or other securities of, HERC will be permitted, and there will be no restrictions on the application of the net cash proceeds from the sale of HERC, so long as no default or event of default under the Indentures governing the Exchange Notes and the Notes or the indentures governing certain of the Senior Notes has occurred and is continuing. Under the Indentures, the disposition of HERC and the assets used in the HERC Business (as defined below in "Description of the Exchange 2019 Notes" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes") will not be deemed to be a change of control. Upon any such disposition of HERC, following which HERC is no longer a Restricted Subsidiary of Hertz under the Indentures, its guarantee of the Exchange Notes and the Notes would be released. For the nine months ended September 30, 2012 and the year ended December 31, 2011, HERC generated approximately 15% and 15%, respectively, of our consolidated revenues, and held approximately 18% and 17%, respectively, of our consolidated total assets.

We may be unable to finance any change of control repurchase offers required by the Indentures. Our inability to do so would result in an event of default under the Indentures.

        If we experience a "change of control" (as defined in the Indentures), we would be required to make an offer to purchase all of the outstanding Exchange Notes and Notes (unless otherwise redeemed) at a price equal to 101% of the principal amount thereof plus accrued and unpaid interest and additional amounts, if any, to the date of purchase. The occurrence of the specified events that would constitute a change of control would constitute a default under certain of our existing financing arrangements. We cannot assure you that we will have sufficient funds to finance our repurchase

36


Table of Contents

obligations following a change of control. A change of control may cause the acceleration of other indebtedness, which may rank equally with, or superior to, the Exchange Notes and the Notes. Our future indebtedness may also require such indebtedness to be repurchased upon a change of control.

        Currently, we expect that we would require third-party financing to make a change of control offer. If we cannot fund a change of control offer in relation to the Exchange Notes and the Notes, we could attempt to arrange debt or equity financing to fund our repurchase obligations. However, we may not be able to do so on favorable terms, or at all. Any failure by us to repurchase the Exchange Notes and the Notes following a change of control will constitute an event of default with respect to the Exchange Notes and the Notes and may cause the acceleration of the Exchange Notes and the Notes or other debt. See "Description of the Exchange 2019 Notes—Change of Control" and "—Certain Covenants" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes—Change of Control" and "—Certain Covenants."

        The definition of "change of control" contained in the Indentures includes a disposition of all or substantially all of our assets. Although there is a limited body of case law interpreting the phrase "all or substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of "all or substantially all" of our assets. As a result, it may be unclear as to whether a change of control has occurred and whether we are required to make an offer to repurchase the Exchange Notes and the Notes.

Our being subject to certain fraudulent transfer and conveyance statutes may have adverse implications for the holders of the Exchange Notes and the holders of the Notes.

        If, under relevant federal and state fraudulent transfer and conveyance statutes, in a bankruptcy or reorganization case or a lawsuit by or on behalf of unpaid creditors of an issuer, a court were to find that, at the time the issuer or any of the guarantors, as applicable, issued or assumed the Exchange Notes and/or the Notes or incurred the respective guarantee:

    the issuer or guarantor did so with the intent of hindering, delaying or defrauding current or future creditors, or received less than reasonably equivalent value or fair consideration for issuing the Exchange Notes and/or the Notes or incurring the guarantee, as applicable; and

    the issuer or guarantor:

    was insolvent, or was rendered insolvent, by reason of the incurrence of the indebtedness constituting the Exchange Notes and/or the Notes or the guarantee, as applicable,

    was engaged, or about to engage, in a business or transaction for which its assets constituted unreasonably small capital,

    intended to incur, or believed that it would incur, debts beyond its ability to pay as such debts matured, or

    was a defendant in an action for money damages, or had a judgment for money damages docketed against it if, in either case, after final judgment the judgment was unsatisfied,

the court could avoid (cancel) or subordinate the Exchange Notes and/or the Notes or the applicable guarantee to presently existing and future indebtedness of the issuer or the subject guarantor, and take other action detrimental to the holders of the Exchange Notes and the holders of the Notes including, under certain circumstances, invalidating the Exchange Notes and/or the Notes or the applicable guarantee.

        The measure of insolvency for purposes of the foregoing considerations will vary depending upon the law of the jurisdiction that is being applied in the relevant legal proceeding. Generally, however,

37


Table of Contents

the issuer or guarantor would be considered insolvent if, at the time it incurs the indebtedness constituting the Exchange Notes and/or the Notes or its guarantee, as applicable, either:

    the sum of its debts, including contingent liabilities, is greater than its assets, at a fair valuation; or

    the present fair saleable value of its assets is less than the amount required to pay the probable liability on its total existing debts and liabilities, including contingent liabilities, as they become absolute and matured.

        We cannot give you any assurance as to what standards a court would use to determine whether Hertz or a Subsidiary Guarantor was solvent at the relevant time, or whether, whatever standard was used, the Exchange Notes and/or the Notes or the applicable guarantee would not be avoided on another of the grounds described above.

        We believe that at the time the Exchange Notes are, and the Notes were, initially issued or assumed, as the case may be, by Hertz and the guarantees are, in the case of the Exchange Notes, and were, in the case of the Notes, incurred by the Subsidiary Guarantors, Hertz and each Subsidiary Guarantor will: (i) be neither insolvent nor rendered insolvent thereby; (ii) be in possession of sufficient capital to run their respective businesses; (iii) be incurring debts within their respective abilities to pay as the same mature or become due; and (iv) have sufficient assets to satisfy any probable money judgment against them in any pending action. In reaching these conclusions, we have relied upon our analysis of internal cash flow projections, which, among other things, assumes that we will in the future realize certain price and volume increases and favorable changes in business mix, and estimated values of assets and liabilities. We cannot assure you, however, that a court passing on such questions would reach the same conclusions.

38


Table of Contents


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

        Certain statements contained in this prospectus include "forward-looking statements." Forward-looking statements include information concerning our liquidity and our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as "believe," "expect," "project," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts" or similar expressions. These statements are based on certain assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. We believe these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative. Many factors, including, without limitation, those risks and uncertainties discussed in "Risk Factors," could affect our actual financial results and could cause actual results to differ materially from those expressed in the forward-looking statements.

        Some important factors that could affect our actual results include, among others, the following:

    our ability to integrate the car rental operations of Dollar Thrifty and realize operational efficiencies from the Dollar Thrifty Acquisition;

    the operational and profitability impact of the Advantage Divestiture and the divestiture of the Initial Airport Locations and the Secondary Airport Locations that Hertz Holdings agreed to undertake in order to secure regulatory approval for the Dollar Thrifty Acquisition;

    levels of travel demand, particularly with respect to airline passenger traffic in the United States and in global markets;

    the impact of pending and future U.S. governmental action to address budget deficits through reductions in spending and similar austerity measures, which could materially adversely affect unemployment rates and consumer spending levels;

    significant changes in the competitive environment, including as a result of industry consolidation, and the effect of competition in our markets, including on our pricing policies or use of incentives;

    occurrences that disrupt rental activity during our peak periods;

    our ability to achieve cost savings and efficiencies and realize opportunities to increase productivity and profitability;

    an increase in our fleet costs as a result of an increase in the cost of new vehicles and/or a decrease in the price at which we dispose of used vehicles either in the used vehicle market or under repurchase or guaranteed depreciation programs;

    our ability to accurately estimate future levels of rental activity and adjust the size and mix of our fleet accordingly;

    our ability to maintain sufficient liquidity and the availability to us of additional or continued sources of financing for our revenue earning equipment and to refinance our existing indebtedness;

    safety recalls by the manufacturers of our vehicles and equipment;

    a major disruption in our communication or centralized information networks;

    financial instability of the manufacturers of our vehicles and equipment;

39


Table of Contents

    any impact on us from the actions of our licensees, franchisees, dealers and independent contractors;

    our ability to maintain profitability during adverse economic cycles and unfavorable external events (including war, terrorist acts, natural disasters and epidemic disease);

    shortages of fuel and increases or volatility in fuel costs;

    our ability to successfully integrate acquisitions and complete dispositions;

    our ability to maintain favorable brand recognition;

    costs and risks associated with litigation;

    risks related to our indebtedness, including our substantial amount of debt, our ability to incur substantially more debt and increases in interest rates or in our borrowing margins;

    our ability to meet the financial and other covenants contained in our Senior Credit Facilities, our outstanding unsecured Senior Notes and certain asset-backed and asset-based arrangements;

    changes in accounting principles, or their application or interpretation, and our ability to make accurate estimates and the assumptions underlying the estimates, which could have an effect on earnings;

    changes in the existing, or the adoption of new laws, regulations, policies or other activities of governments, agencies and similar organizations where such actions may affect our operations, the cost thereof or applicable tax rates;

    changes to our senior management team;

    the effect of tangible and intangible asset impairment charges;

    the impact of our derivative instruments, which can be affected by fluctuations in interest rates and commodity prices;

    our exposure to fluctuations in foreign exchange rates; and

    other risks and uncertainties described in this prospectus.

        In light of these risks, uncertainties and assumptions, the forward looking statements contained in this prospectus might not prove to be accurate and you should not place undue reliance upon them. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

40


Table of Contents


THE EXCHANGE OFFERS

        The following contains a summary of the exchange offers, material provisions of the registration rights agreements, and other important information. As applicable, this summary is subject to, and is qualified in its entirety by reference to, all the provisions of the registration rights agreements. Reference is made to the provisions of the 2019 registration rights agreement, which has been incorporated by reference as an exhibit to the registration statement, and the 2020 and 2022 registration rights agreement, which has been filed with the registration statement. Copies are available as set forth in the section entitled "Where You Can Find Additional Information." Each class of the Notes and the Exchange Notes will be considered collectively to be a single class for all purposes under the applicable Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.


Purpose and Effect of the Exchange Offers

        Hertz entered into the registration rights agreements with respect to the Notes pursuant to which it agreed, for the benefit of the holders of the Notes, to use its commercially reasonable efforts:

    (1)
    to file with the SEC a registration statement under the Securities Act relating to the exchange offers pursuant to which new notes (the Exchange Notes) substantially identical to the Notes (except that such Exchange Notes will not contain terms with respect to the payment of additional interest described below or transfer restrictions) would be offered in exchange for the then-outstanding Notes tendered at the option of the holders thereof; and

    (2)
    to cause the registration statement to become effective within 365 days after the date of the respective registration rights agreement, which, (i) with respect to the 2019 registration rights agreement, is the date of issuance of the 2019 Notes, March 13, 2012, and (ii) with respect to the 2020 and 2022 registration rights agreement, is the date we completed the Dollar Thrifty Acquisition, November 19, 2012.

        Hertz further agreed to commence the exchange offers promptly after the registration statement becomes effective, to hold the offers open for the period required by applicable law, and to exchange the Exchange Notes for all Notes validly tendered and not withdrawn before the expiration of the offers.

        However, if:

    (1)
    on or before the date of consummation of the exchange offers, the existing SEC interpretations are changed such that the Exchange Notes would not in general be freely transferable in such manner on such date;

    (2)
    the exchange offer for (i) the 2019 Notes has not been completed within 395 days following the issue date of the 2019 Notes or (ii) the 2020 Notes and 2022 Notes has not been completed within 395 days following the date of the 2020 and 2022 registration rights agreement;

    (3)
    under certain circumstances, an initial purchaser of any class of Notes so requests with respect to such Notes not eligible to be exchanged for Exchange Notes in the exchange offers; or

    (4)
    any holder of the Notes (other than an initial purchaser) is not permitted by applicable law to participate in the exchange offers, or if any holder may not resell the Exchange Notes acquired by it in the exchange offers to the public without delivering a prospectus and the prospectus contained in the registration statement is not available for such resales by such holder (other than, in either case, due solely to the status of such holder as an affiliate of the Company or due to such holder's inability to make the representations referred to below),

41


Table of Contents

then Hertz will use its commercially reasonable efforts to file, as promptly as reasonably practicable, one or more registration statements under the Securities Act relating to a shelf registration, or the "Shelf Registration Statement," of the Notes or Exchange Notes, as the case may be, for resale by holders or, in the case of clause (3), of the Notes held by an initial purchaser for resale by such initial purchaser, or the "Resale Registration," and will use its commercially reasonable efforts to cause the Shelf Registration Statement to become effective within 365 days following the date on which the obligation to file the Shelf Registration Statement arises. Although Hertz is filing a registration statement as previously described, we cannot assure you that the registration statement will become effective.

        In the event that:

    (1)
    the registration statement is not declared effective within 365 days following the date of the respective registration rights agreement, which, (i) with respect to the 2019 registration rights agreement, is the date of issuance of the 2019 Notes, March 13, 2012, and (ii) with respect to the 2020 and 2022 registration rights agreement, is the date we completed the Dollar Thrifty Acquisition, November 19, 2012; or

    (2)
    the exchange offer for (i) the 2019 Notes has not been completed within 395 days following the issue date of the 2019 Notes or (ii) the 2020 Notes and 2022 Notes has not been completed within 395 days following the date of the 2020 and 2022 registration rights agreement; or

    (3)
    if a Shelf Registration Statement is required to be filed under a registration rights agreement, the Shelf Registration Statement is not declared effective within 365 days following the date on which the obligation to file the Shelf Registration Statement arises; or

    (4)
    any Shelf Registration Statement required by a registration rights agreement is filed and declared effective, and during the period Hertz is required to use its commercially reasonable efforts to cause the Shelf Registration Statement to remain effective ( i ) Hertz shall have suspended and be continuing to suspend the availability of the Shelf Registration Statement for more than 60 days in the aggregate in any consecutive twelve-month period or ( ii ) such Shelf Registration Statement ceases to be effective and such Shelf Registration Statement is not replaced within 90 days by a Shelf Registration Statement that is filed and declared effective (any such event referred to in clauses (1) through (4) is referred to as a "Registration Default"),

then additional interest will accrue on the respective Transfer Restricted Notes (as defined below) for the period from the occurrence of a Registration Default (but only with respect to one Registration Default at any particular time) until such time as all Registration Defaults have been cured at a rate per annum equal to 0.25% during the first 90-day period following the occurrence of such Registration Default which rate shall increase by an additional 0.25% during each subsequent 90-day period, up to a maximum of 0.50% regardless of the number of Registration Defaults that shall have occurred and be continuing.

        For purposes of the foregoing, "Transfer Restricted Notes" means any class of Notes; provided, however, that a Note shall cease to be a Transfer Restricted Note when (i) a Shelf Registration Statement registering such Note under the Securities Act has been declared or becomes effective and such Note has been sold or otherwise transferred by the holder thereof pursuant to and in a manner contemplated by such effective Shelf Registration Statement; (ii) such Note is sold pursuant to Rule 144 under circumstances in which any legend borne by such Note relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed or deemed removed by the Company or pursuant to the applicable Indenture; (iii) on or following the earliest date that is no less than 545 days after the date of the Indenture for the applicable class of Notes and on which such Note

42


Table of Contents

would be saleable (if it were held by a non-affiliate of Hertz) pursuant to Rule 144 under the Securities Act without restrictions on volume or manner of sale; (iv) such Note has been exchanged for a registered exchange security pursuant to the registration statement filed by the Company; or (v) such Note shall cease to be outstanding.


Terms of the Exchange Offers

General

        Upon the terms and subject to the conditions set forth in this prospectus and the accompanying letter of transmittal, all Notes validly tendered and not withdrawn prior to 12:00 midnight, New York City time, on the expiration date will be accepted for exchange. We will issue Exchange Notes in exchange for an equal principal amount of outstanding Notes accepted in the exchange offers. You may only tender Notes in minimum denominations of $2,000 ("Minimum Denomination") and any integral multiple of $1,000 in excess thereof. This prospectus, together with the letter of transmittal, are being sent to all registered holders as of                        , 2013. The exchange offers are not conditioned upon any minimum principal amount of Notes being tendered for exchange. However, our obligation to accept Notes for exchange pursuant to the exchange offers is subject to certain customary conditions as set forth below under "—Conditions." There will be no fixed record date for determining registered holders of Notes entitled to participate in the exchange offers.

        The exchange offer with respect to the 2019 Notes is made only to holders of the 2019 Notes, which were issued on March 13, 2012 in an aggregate principal amount of $250,000,000, and is not made to holders of Existing Exchange 2019 Notes.

        The Notes shall be deemed to have been accepted as validly tendered when, as and if we have given oral or written notice of such acceptance to the Exchange Agent. The Exchange Agent will act as agent for the tendering holders of the Notes for the purposes of receiving the Exchange Notes from us and delivering Exchange Notes to such holders.

        Based on interpretations by the staff of the SEC as set forth in no-action letters issued to third parties (including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991), K-111 Communications Corporation (available May 14, 1993) and Shearman & Sterling (available July 2, 1993)), we believe that the Exchange Notes issued pursuant to the exchange offers may be offered for resale, resold and otherwise transferred by any holder of such Exchange Notes, other than any such holder that is a broker-dealer, without compliance with the registration and prospectus delivery requirements of the Securities Act, provided that:

    such holder is not our "affiliate" (as defined in Rule 405 of the Securities Act);

    such Exchange Notes are acquired in the ordinary course of business;

    such holder has no arrangement or understanding with any person to participate in a distribution of such Exchange Notes (within the meaning of the Securities Act);

    such holder is not engaged in, and does not intend to engage in, a distribution of such Exchange Notes; and

    such holder is not acting on behalf of any person who could not truthfully make the foregoing representations.

        We have not sought and do not intend to seek a no-action letter from the staff of the SEC, with respect to the effects of the exchange offers, and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Notes as it has in previous no-action letters.

43


Table of Contents

        By tendering the Notes in exchange for Exchange Notes, you will represent to us that:

    any Exchange Notes to be received by you will be acquired in the ordinary course of business;

    you have no arrangements or understandings with any person to participate in the distribution of the Exchange Notes or the Notes (within the meaning of the Securities Act);

    you are not our "affiliate" (as defined in Rule 405 of the Securities Act);

    if you are a broker-dealer, you will receive the Exchange Notes for your own account in exchange for the Notes acquired as a result of market-making activities or other trading activities and that you will deliver a prospectus in connection with any resale of Exchange Notes (see "Plan of Distribution");

    if you are not a broker-dealer, you are not engaged in and do not intend to engage in the distribution of the Exchange Notes; and

    you are not acting on behalf of any person that could not truthfully make any of the foregoing representations.

        If you are unable to make the foregoing representations, you may not rely on the applicable interpretations of the staff of the SEC and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction unless such sale is made pursuant to an exemption from such requirements.

        Each broker-dealer that holds Notes for its own account as a result of market-making activities or other trading activities and receives Exchange Notes pursuant to the exchange offers must represent that it will deliver a prospectus in connection with any resale of such Exchange Notes. By so representing and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Notes, where such Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that we will make this prospectus, as amended and/or supplemented, available to any such broker-dealer for use in connection with such resale of any class of Exchange Notes, for a period of up to 90 days after the completion of the exchange offer with respect to such Exchange Notes. See "Plan of Distribution."

        Upon consummation of the exchange offers, any Notes not tendered will remain outstanding and continue to accrue interest at the rate of 6.75% per annum in the case of the 2019 Notes, 5.875% in the case of the 2020 Notes and 6.250% in the case of the 2022 Notes, but, with limited exceptions, holders of Notes who do not exchange their Notes for the respective class of Exchange Notes pursuant to the exchange offers will no longer be entitled to registration rights and will not be able to offer or sell their Notes unless such Notes are subsequently registered under the Securities Act, except pursuant to an exemption from or in a transaction not subject to, the Securities Act and applicable state securities laws. With limited exceptions, we will have no obligation to effect a subsequent registration of the Notes.

Expiration Date; Extensions; Amendments; Termination

        The expiration date for the exchange offers shall be 12:00 midnight, New York City time, on                        , 2013, unless we, in our sole discretion, extend any of the exchange offers, in which case the expiration date for the respective exchange offer shall be the latest date and time to which the respective exchange offer has been extended.

        To extend an expiration date, we will notify the Exchange Agent of any extension by oral or written notice and will notify the remaining holders of the Notes by means of a press release or other

44


Table of Contents

public announcement prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date for the exchange offers. Such an announcement may state that we are extending any of the exchange offers for a specified period of time.

        In relation to the exchange offers, we reserve the right to

    (1)
    extend any of the exchange offers, delay acceptance of any Notes due to an extension of any of the exchange offers or terminate any of the exchange offers and not permit acceptance of Notes not previously accepted if any of the conditions set forth under "—Conditions" shall have occurred and shall not have been waived by us prior to 12:00 midnight, New York City time, on such expiration date, by giving oral or written notice of such delay, extension or termination to the Exchange Agent, or

    (2)
    amend the terms of any of the exchange offers in any manner deemed by us to be advantageous to the holders of the Notes.

        By way of clarification and without intending to limit any of the foregoing, if we determine to extend any of the exchange offers, we are under no obligation (and may, in our sole discretion, determine not) to extend any of the other exchange offers. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice of such delay, extension or termination or amendment to the Exchange Agent. If the terms of any of the exchange offers are amended in a manner determined by us to constitute a material change, we will promptly disclose such amendment in a manner reasonably calculated to inform you of such amendment, and we will extend any such exchange offer so that at least five business days remain in such exchange offer from the date notice of such material change is given.

        Without limiting the manner in which we may choose to make public an announcement of any delay, extension or termination of any of the exchange offers, we shall have no obligations to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to an appropriate news agency.


Interest on the Exchange Notes

        The Exchange 2019 Notes will accrue interest at the rate of 6.75% per annum, the Exchange 2020 Notes will accrue interest at the rate of 5.875% per annum and the Exchange 2022 Notes will accrue interest at the rate of 6.250% per annum, in each case, accruing interest from the last interest payment date on which interest was paid on the corresponding Notes surrendered in exchange for Exchange Notes, or from the original issue date of the applicable Notes if no interest has been paid on the corresponding Notes surrendered in exchange for Exchange Notes, to the day before the consummation of the respective exchange offer and thereafter, at the rate of interest per annum set forth above for the applicable Exchange Notes. However, if the Notes are surrendered for exchange on or after a record date (as set forth below) for an interest payment date that will occur on or after the date of such exchange and as to which interest will be paid, interest on the applicable Exchange Notes received in exchange for such Notes will accrue from the date of such interest payment date. Interest on the Exchange Notes is payable to holders of record thereof at the close of business on the April 1 or October 1 immediately preceding the interest payment date, on April 15 and October 15 of each year, commencing on April 15, 2013. No additional interest will be paid on the Notes tendered and accepted for exchange.


Procedures for Tendering the Notes

        To tender in the respective exchange offer for the Notes, you must either:

    complete, sign and date the letter of transmittal, or a facsimile of such letter of transmittal, have the signatures on such letter of transmittal guaranteed if required by such letter of transmittal,

45


Table of Contents

      and mail or otherwise deliver such letter of transmittal or such facsimile, together with any other required documents, to the Exchange Agent for the Notes prior to 12:00 midnight, New York City time, on the expiration date; or

    comply with the Automated Tender Offer Program procedures of DTC, as described below.

        In addition, either:

    the Exchange Agent must receive certificates representing the Notes along with the letter of transmittal; or

    prior to the expiration of the respective exchange offer, the Exchange Agent must receive a timely confirmation of book-entry transfer of the Notes into its account at DTC according to the procedure for book-entry transfer described below or a properly transmitted agent's message; or

    you must comply with the guaranteed delivery procedures described below.

        We will only issue Exchange Notes in exchange for Notes that are timely and properly tendered. The method of delivery of Notes, the letter of transmittal and all other required documents is at your election and risk. Rather than mail these items, we recommend that you use an overnight or hand-delivery service. If delivery is by mail, we recommend that you use registered mail, properly insured, with return receipt requested. In all cases, you should allow sufficient time to assure timely delivery and should carefully follow the instructions on how to tender the Notes. You should not send Notes, the letter of transmittal or other required documents to us. Instead, you must deliver all Notes, the letter of transmittal and other required documents to the Exchange Agent at its address set forth below under "—Exchange Agent."

        Your tender of Notes will constitute an agreement between you and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal.

        If you are a beneficial owner of Notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender such Notes in the respective exchange offer, you should contact such registered holder promptly and instruct such registered holder to tender on your behalf. If you wish to tender the Notes yourself, you must, prior to completing and executing the letter of transmittal and delivering your Notes, either make appropriate arrangements to register ownership of the Notes in your name (subject to any restrictions in the respective Indenture), or obtain a properly completed bond power from the registered holder of the Notes. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.

        Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by a member in good standing of a recognized signature medallion program, an eligible guarantor institution identified in Rule l7Ad-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or one of the following firms (as these terms are used in Rule 17Ad-15): (a) a bank; (b) a broker, dealer, municipal securities dealer, municipal securities broker, government securities dealer or government securities broker; (c) a credit union; (d) a national securities exchange, registered securities association or clearing agency; or (e) a savings association; unless the Notes tendered pursuant to such letter of transmittal or notice of withdrawal, as the case may be, are tendered:

    by a registered holder of Notes who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal; or

    for the account of an eligible guarantor institution.

        If a letter of transmittal is signed by a person other than the registered holder of Notes listed on the Notes, then the Notes must be endorsed or accompanied by a properly completed bond power. The

46


Table of Contents

bond power must be signed by the registered holder as the registered holder's name appears on the Notes and an eligible guarantor institution must guarantee the signature on the bond power.

        If a letter of transmittal or any certificates representing Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by us, submit with such letter of transmittal evidence satisfactory to us of their authority to so act.

        DTC has confirmed that any financial institution that is a participant in DTC may use its Automated Tender Offer Program to tender. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the Exchange Agent, electronically transmit an acceptance of the exchange by causing DTC to transfer the Notes to the Exchange Agent for the Notes in accordance with its Automated Tender Offer Program procedures for transfer. DTC will then send an agent's message to the Exchange Agent for the Notes. In connection with tenders of the Notes, the term "agent's message" means a message transmitted by DTC, received by the Exchange Agent and forming part of the book-entry confirmation, that states that:

    DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that such participant is tendering Notes that are the subject of the book-entry confirmation;

    the participant has received and agrees to be bound by the terms of the letter of transmittal, or, in the case of an agent's message relating to guaranteed delivery, such participant has received and agrees to be bound by the notice of guaranteed delivery; and

    we may enforce that agreement against such participant.


Absence of Dissenters' Rights

        Holders of the Notes do not have any appraisal or dissenters' rights in connection with the exchange offers.


Book-Entry Transfer

        Promptly after the date of this prospectus, the Exchange Agent will make a request to establish an account with respect to the Notes at DTC as book-entry transfer facility for tenders of the Notes. Any financial institution that is a participant in DTC may make book-entry delivery of Notes by causing DTC to transfer such Notes into the Exchange Agent's account for such Notes at DTC in accordance with DTC's procedures for transfer. In addition, although delivery of the Notes may be effected through book-entry transfer at DTC, the letter of transmittal or a facsimile thereof, together with any required signature guarantees and any other required documents, or an agent's message, must in any case be transmitted to and received by the Exchange Agent at its address set forth below under "—Exchange Agent" prior to 12:00 midnight, New York City time, on the expiration date, or, the guaranteed delivery procedures described below must be complied with. Delivery of documents to the DTC does not constitute delivery to the Exchange Agent.


Acceptance of the Notes for Exchange; Delivery of the Exchange Notes

        Upon satisfaction or waiver of all of the conditions to the exchange offers, all Notes properly tendered will be accepted and Exchange Notes will be issued promptly after the expiration date. See "—Conditions." For purposes of the exchange offers, the Notes shall be deemed to have been accepted as validly tendered for exchange when, as and if we have given oral or written notice thereof to the Exchange Agent. For Notes accepted for exchange, the holder of such Note will receive an Exchange Note having a principal amount equal to that of the surrendered Note.

47


Table of Contents

        In all cases, issuance of Exchange Notes for Notes that are accepted for exchange pursuant to the exchange offers will be made only after timely receipt by the Exchange Agent of:

    certificates for such Notes or a timely book-entry confirmation of such Notes into the Exchange Agent's account at DTC; and

    a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent's message.

        If any tendered Notes are not accepted for any reason set forth in the terms and conditions of the exchange offers, such unaccepted or such non-exchanged Notes will be returned without expense to the tendering holder of such Notes, if in certificated form, or credited to an account maintained with DTC promptly after the expiration or termination of the exchange offers.

        All questions as to the validity, form, eligibility, time of receipt and withdrawal of the tendered Notes will be determined by us in our sole discretion, such determination being final and binding on all parties. We reserve the absolute right to reject any and all Notes not properly tendered or any Notes which, if accepted, would, in the opinion of counsel for us, be unlawful. We also reserve the absolute right to waive any irregularities or defects with respect to tender as to particular Notes. Our interpretation of the terms and conditions of the exchange offers, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Notes must be cured within such time as we shall determine. Neither we, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Notes, nor shall any of them incur any liability for failure to give such notification. Tenders of Notes will not be deemed to have been made until such irregularities have been cured or waived. Any Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost to such holder by the Exchange Agent, unless otherwise provided in the letter of transmittal, promptly following the expiration date.

        In addition, we reserve the right in our sole discretion, subject to the provisions of the Indentures pursuant to which the Exchange Notes and the Notes are issued:

    to purchase or make offers for Notes that remain outstanding subsequent to the expiration date;

    to redeem the Exchange Notes and Notes as a whole or in part at any time and from time to time, as set forth under "Description of the Exchange 2019 Notes—Optional Redemption" and "Description of the Exchange 2020 Notes and the Exchange 2022 Notes—Optional Redemption;" and

    to the extent permitted under applicable law, to purchase the Exchange Notes and Notes in the open market, in privately negotiated transactions or otherwise.

        The terms of any such purchases or offers could differ from the terms of the exchange offers.


Guaranteed Delivery Procedures

        If the procedures for book-entry transfer for Notes cannot be completed on a timely basis, a tender may be effected if:

    the tender is made through an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Exchange Act;

    prior to 12:00 midnight, New York City time, on the expiration date, the Exchange Agent receives from such eligible guarantor institution either a properly completed and duly executed notice of guaranteed delivery, substantially in the form we provide, by facsimile transmission,

48


Table of Contents

      mail or hand delivery or a properly transmitted agent's message and notice of guaranteed delivery which:

      (1)
      sets forth the name and address of the holder of the Notes and the principal amount of Notes tendered;

      (2)
      states the tender is being made thereby; and

      (3)
      guarantees that within three New York Stock Exchange, or "NYSE," trading days after the expiration date, the letter of transmittal, or facsimile thereof, together with the certificates for all physically tendered Notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and any other documents required by the letter of transmittal will be deposited by the eligible guarantor institution with the Exchange Agent; and

    the properly completed and executed letter of transmittal or facsimile thereof, as well as the certificates for all physically tendered Notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and all other documents required by the letter of transmittal are received by the Exchange Agent within three NYSE trading days after the expiration date.


Withdrawal of Tenders

        Tenders of Notes may be withdrawn at any time prior to 12:00 midnight, New York City time, on the expiration date.

        For a withdrawal to be effective, the Exchange Agent must receive a written notice (which may be by telegram, telex, facsimile or letter) of withdrawal prior to 12:00 midnight, New York City time, on the expiration date at its address set forth below under "—Exchange Agent" or you must comply with the appropriate procedures of DTC's Automated Tender Offer Program system. Any such notice of withdrawal must:

    specify the name of the person having tendered the Notes to be withdrawn;

    identify the Notes to be withdrawn, including the certificate numbers and the principal amount of such Notes;

    in the case of Notes tendered by book-entry transfer, specify the number of the account at DTC from which the Notes were tendered and specify the name and number of the account at DTC to be credited with the withdrawn Notes and otherwise comply with the procedures of DTC;

    contain a statement that such holder is withdrawing its election to have such Notes exchanged;

    be signed by the holder in the same manner as the original signature on the letter of transmittal by which such Notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer to have the trustee with respect to the Notes register the transfer of such Notes in the name of the person withdrawing the tender; and

    specify the name in which such Notes are registered, if different from the person who tendered such Notes.

        If certificates for the Notes have been delivered or otherwise identified to the Exchange Agent, then, prior to the release of such certificates, you must also submit:

    the serial numbers of the particular certificates to be withdrawn; and

    a signed notice of withdrawal with signatures guaranteed by an eligible guarantor institution unless you are an eligible guarantor institution.

49


Table of Contents

        All questions as to the validity, form, eligibility and time of receipt of such notice will be determined by us, in our sole discretion, such determination being final and binding on all parties. Any Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offers. Any Notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the tendering holder of such Notes without cost to such holder, in the case of physically tendered Notes, or credited to an account maintained with the DTC for the Notes promptly after withdrawal, rejection of tender or termination of the exchange offers. Properly withdrawn Notes may be retendered by following one of the procedures described above under "—Procedures for Tendering the Notes" at any time prior to 12:00 midnight, New York City time, on the expiration date.


Conditions

        Notwithstanding any other provision in the exchange offers, we shall not be required to accept for exchange, or to issue Exchange Notes in exchange for, any Notes and may terminate or amend any of the exchange offers if at any time prior to 12:00 midnight, New York City time, on the expiration date, we determine in our reasonable judgment that (i) the exchange offers violate applicable law, any applicable interpretation of the SEC or its staff or (ii) any action or proceeding has been instituted or threatened in any court or by any governmental agency which might materially impair our ability to proceed with the exchange offers, or any material adverse development has occurred in any existing action or proceeding with respect to us.

        In addition, we will not be obligated to accept for exchange the Notes of any holder that has not made to us:

    the representations described under "—Terms of the Exchange Offers—General"; or

    any other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to us an appropriate form for registration of the Exchange Notes under the Securities Act.

        In addition, we will not accept for exchange any Notes tendered, and no Exchange Notes will be issued in exchange for any such Notes, if at any such time any stop order shall be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the Indentures governing the Exchange Notes under the Trust Indenture Act of 1939, as amended. Pursuant to the registration rights agreements, we are required to use our commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the registration statement at the earliest practicable date.

        The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition or may be waived by us in whole or in part at any time and from time to time, prior to 12:00 midnight, New York City time, on the expiration date, in our reasonable discretion. Our failure at any time to exercise any of the foregoing rights prior to 12:00 midnight, New York City time, on the expiration date shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time prior to 12:00 midnight, New York City time, on the expiration date. If we waive any of the foregoing conditions to any of the exchange offers and determine that such waiver constitutes a material change, we will extend any such exchange offer so that at least five business days remain in such offer from the date notice of such material change is given.

50


Table of Contents


Exchange Agent

        Wells Fargo Bank, National Association, has been appointed as Exchange Agent for the exchange offers for the Notes. Wells Fargo Bank, National Association, also acts as trustee under the Indentures governing the Notes, which are the same Indentures that will govern the Exchange Notes. Questions, requests for assistance and requests for additional copies of this prospectus, the letter of transmittal or other available documentation should be directed to the Exchange Agent addressed as follows:

By Regular Mail or
Overnight Courier:
 
By Registered or Certified Mail:
 
In Person by Hand Only:
Wells Fargo Bank, N.A.
Corporate Trust Operations
MAC N9303-121
Sixth & Marquette Avenue
Minneapolis, MN 55479
  Wells Fargo Bank, N.A.
Corporate Trust Operations MAC N9303-121
P.O. Box 1517
Minneapolis, MN 55480
  Wells Fargo Bank, N.A.
12th Floor—Northstar East Building
Corporate Trust Operations
608 Second Avenue South
Minneapolis, MN 55479

By Facsimile:
(612) 667-6282

 

For Information or Confirmation by Telephone:
(800) 344-5128

If you deliver the letter of transmittal to an address other than the one set forth above or transmit instructions via facsimile to a number other than the one set forth above, that delivery or transmission will not be effective.


Fees and Expenses

        The expenses of soliciting tenders pursuant to the exchange offers will be borne by us. We will not make any payments to or extend any commissions or concessions to any broker or dealer. We will, however, pay the Exchange Agent reasonable and customary fees for its services and will reimburse the Exchange Agent for its reasonable out-of-pocket expenses. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of the prospectus and related documents to the beneficial owners of the Notes and in handling or forwarding tenders for exchange.

        The expenses to be incurred by us in connection with the exchange offers will be paid by us, including fees and expenses of the Exchange Agent and trustee and accounting, legal, printing and related fees and expenses.

        We will pay all transfer taxes, if any, applicable to the exchange of the Notes pursuant to the exchange offers. If, however, the Exchange Notes or the Notes for principal amounts not tendered or accepted for exchange are to be registered or issued in the name of any person other than the registered holder of the Notes tendered, or if tendered Notes are registered in the name of any person other than the person signing the letter of transmittal, or if a transfer tax is imposed for any reason other than the exchange of the Notes pursuant to the exchange offers, then the amount of any such transfer taxes imposed on the registered holder or any other persons will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to such tendering holder.


Federal Income Tax Consequences

        We believe that the exchange of the Notes for the Exchange Notes will not constitute a taxable exchange for U.S. federal income tax purposes. See "Material U.S. Federal Tax Considerations."

51


Table of Contents


Accounting Treatment

        The Exchange Notes will be recorded as carrying the same value as the Notes, which is face value, as reflected in our accounting records on the date of the exchange. Accordingly, we will not recognize any gain or loss for accounting purposes as a result of the exchange offer. The expenses of the exchange offer will be deferred and charged to expense over the term of the Exchange Notes.


Consequences of Failure to Exchange

        Holders of Notes who do not exchange their Notes for Exchange Notes pursuant to the exchange offers will continue to be subject to the restrictions on transfer of such Notes as set forth in the legend on such Notes as a consequence of the issuance of the Notes pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws, and as otherwise set forth in the applicable offering memorandum distributed in connection with the private placement of the Notes. In general, the Notes may only be offered or sold in transactions that are exempt from or not subject to the registration requirements of the Securities Act and other applicable state securities laws. To the extent that Notes are tendered and accepted pursuant to the exchange offers, there may be little or no trading market for untendered and tendered but unaccepted Notes. Restrictions on transfer will make the Notes less attractive to potential investors than the Exchange Notes.


Other

        Participating in the exchange offers is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.

        We may in the future seek to acquire untendered Notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. However, we have no present plans to acquire any Notes that are not tendered in the exchange offers or to file a registration statement to permit resales of any untendered Notes.

52


Table of Contents


USE OF PROCEEDS

        The exchange offers are intended to satisfy certain of our obligations under the registration rights agreements. We will not receive any cash proceeds from the issuance of the Exchange Notes pursuant to the exchange offers. In consideration for issuing the Exchange Notes as contemplated in this prospectus, we will receive in exchange a like principal amount of Notes, the terms of which are identical in all material respects to the Exchange Notes, except that the Exchange Notes will be registered under the Securities Act and bear a different CUSIP or ISIN number, and will not contain terms with respect to transfer restrictions, registration rights and additional interest for failure to observe certain obligations in the registration rights agreements. The Notes surrendered in exchange for Exchange Notes will be retired and cancelled and cannot be reissued. Accordingly, the issuance of the Exchange Notes will not result in any change in our capitalization.

53


Table of Contents


CAPITALIZATION

        The following table shows, and the respective footnotes thereto further describe, the cash and cash equivalents and total capitalization of Hertz as of September 30, 2012 on an actual basis and as adjusted to reflect (i) the use of our cash and cash equivalents in connection with the Acquisition and Financing Transactions, (ii) the borrowing of $750.0 million by Hertz pursuant to the Incremental Term Loans and the use of such amount in connection with the Acquisition and Financing Transactions, (iii) the issuance of the 2020 Notes and the 2022 Notes and the use of the entire proceeds therefrom in connection with the Acquisition and Financing Transactions and (iv) the January 2013 issuance of $950.0 million in aggregate principal amount of the Series 2013-1 Rental Car Asset Backed Notes (the "Series 2013-1") and the use of proceeds therefrom as described in the footnotes to the table below. The "As Adjusted" column does not take into account (i) indebtedness of Dollar Thrifty of approximately $1.48 billion, as of September 30, 2012, (ii) cash and cash equivalents of Dollar Thrifty, a portion of which was used in connection with the Acquisition and Financing Transactions or (iii) the pro forma impact of the Dollar Thrifty Acquisition on Hertz's accumulated deficit. For a description of Dollar Thrifty's indebtedness and other obligations as of September 30, 2012, see Note 7 to the unaudited interim condensed consolidated financial statements of Dollar Thrifty included elsewhere in this prospectus. For a description of the pro forma impact of, among other events, the Dollar Thrifty Acquisition, see "Unaudited Pro Forma Condensed Combined Financial Information."

        This information should be read in conjunction with our audited annual consolidated financial statements and unaudited interim condensed consolidated financial statements and the respective related notes included elsewhere in this prospectus.

 
  September 30, 2012  
 
  Actual   As Adjusted  
 
  (Unaudited)
(In millions of dollars)

 

Cash and Cash Equivalents (1)

  $ 453.3   $ 380.1  
           

Corporate Debt

             

Senior Term Facility(2)

  $ 1,379.0   $ 2,129.0  

Senior ABL Facility

    410.0     410.0  

Senior Notes

             

7.50% Senior Notes due 2018

    700.0     700.0  

6.75% Senior Notes due 2019(3)

    1,250.0     1,250.0  

7.375% Senior Notes due 2021

    500.0     500.0  

5.875% Senior Notes due 2020(4)

        700.0  

6.250% Senior Notes due 2022(4)

        500.0  

Promissory Notes

    48.7     48.7  

Other Corporate Debt

    65.7     65.7  

Unamortized Net (Discount) Premium (Corporate)

    3.3     3.3  
           

Total Corporate Debt

    4,356.7     6,306.7  
           

Fleet Debt

             

U.S. ABS Program

             

U.S. Fleet Variable Funding Notes:

             

Series 2009-1(5)

    1,900.0     1,000.0  

Series 2010-2

    200.0     200.0  
           

    2,100.0     1,200.0  
           

54


Table of Contents

 
  September 30, 2012  
 
  Actual   As Adjusted  
 
  (Unaudited)
(In millions of dollars)

 

U.S. Fleet Medium Term Notes:

             

Series 2009-2

  $ 1,384.3   $ 1,384.3  

Series 2010-1

    749.8     749.8  

Series 2011-1

    598.0     598.0  

Series 2013-1(6)

        950.0  
           

    2,732.1     3,682.1  
           

Donlen ABS Program

             

Donlen GNII Variable Funding Notes

    899.3     899.3  
           

Other Fleet Debt

             

U.S. Fleet Financing Facility

    158.9     158.9  

European Revolving Credit Facility

    393.6     393.6  

European Fleet Notes

    514.9     514.9  

European Securitization

    413.6     413.6  

Canadian Securitization

    147.1     147.1  

Australian Securitization

    162.3     162.3  

Brazilian Fleet Financing Facility

    14.0     14.0  

Capitalized Leases

    407.7     407.7  

Unamortized Discount (Fleet)

    (7.0 )   (7.0 )
           

    2,205.1     2,205.1  
           

Total Fleet Debt

    7,936.5     7,986.5  
           

Total Debt

    12,293.2     14,293.2  
           

Equity

             

Common Stock, $0.01 par value, 3,000 shares authorized, 100 shares issued and outstanding

             

Additional paid-in capital

    3,501.0     3,501.0  

Accumulated deficit

    (524.8 )   (524.8 )

Accumulated other comprehensive income (loss)

    (14.8 )   (14.8 )
           

Total Hertz and subsidiaries stockholder's equity

    2,961.4     2,961.4  

Noncontrolling interest

         
           

Total Equity

    2,961.4     2,961.4  
           

Total Capitalization (7)

  $ 15,254.6   $ 17,254.6  
           

(1)
"As Adjusted" amount reflects the use of $123.2 million of our cash and cash equivalents in connection with the Acquisition and Financing Transactions. The "As Adjusted" amount does not reflect the cash and cash equivalents of Dollar Thrifty, $404.0 million of which was used in connection with the Acquisition and Financing Transactions.

"As Adjusted" amount also reflects the expected availability of $50.0 million of cash and cash equivalents from the gross proceeds of the issuance of $950.0 million in aggregate principal amount of the Series 2013-1, after taking into account the anticipated use of $900.0 million of the gross proceeds therefrom to repay a like principal amount outstanding under the Series 2009-1 (as defined below under "Description of Certain Indebtedness—Fleet Debt—U.S. Fleet Variable Funding Notes"), but without taking into account fees and other transaction expenses incurred in connection with the issuance of the Series 2013-1.

55


Table of Contents

(2)
"As Adjusted" amount reflects the incurrence of $750.0 million of indebtedness under the Incremental Term Loans, which was used to: (i) finance a portion of the consideration in connection with the Dollar Thrifty Acquisition, (ii) pay off existing indebtedness and other obligations of Dollar Thrifty and its subsidiaries in connection with the Dollar Thrifty Acquisition and (iii) pay fees and other transaction expenses in connection with the Acquisition and Financing Transactions.

(3)
Includes the $250 million aggregate principal amount of 2019 Notes that are, in part, the subject of these exchange offers and the $1 billion aggregate principal amount of the Existing Exchange 2019 Notes.

(4)
"As Adjusted" amount reflects the issuance of the 2020 Notes and the 2022 Notes that are, in part, the subject of these exchange offers, which issuance occurred on October 16, 2012. The proceeds of the offering of such notes were used to: (i) finance a portion of the consideration in connection with the Dollar Thrifty Acquisition, (ii) pay off existing indebtedness and other obligations of Dollar Thrifty and its subsidiaries in connection with the Dollar Thrifty Acquisition and (iii) pay fees and other transaction expenses in connection with the Acquisition and Financing Transactions.

(5)
"As Adjusted" amount reflects the anticipated use of $900.0 million of the gross proceeds from the issuance of the Series 2013-1 to repay a like principal amount outstanding under the Series 2009-1.

(6)
As Adjusted" amount reflects the issuance of $950.0 million in aggregate principal amount of the Series 2013-1. We currently anticipate that $900.0 million of the gross proceeds from the issuance will be used to repay a like principal amount outstanding under the Series 2009-1.

(7)
Total Capitalization equals the sum of Total Debt and Total Equity (and excludes Cash and Cash Equivalents).

56


Table of Contents


SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA FOR HERTZ

        The following tables present selected consolidated financial information and other data for our business. The selected consolidated statement of operations data for the years ended December 31, 2011, 2010 and 2009, and the selected consolidated balance sheet data as of December 31, 2011 and 2010 presented below were derived from our audited annual consolidated financial statements and the related notes thereto included elsewhere in this prospectus. The selected consolidated statement of operations data for the nine months ended September 30, 2012 and 2011, and the selected consolidated balance sheet data as of September 30, 2012 presented below were derived from our unaudited interim condensed consolidated financial statements and the related notes thereto included elsewhere in this prospectus. The selected consolidated balance sheet data as of September 30, 2011, the selected consolidated statement of operations data for the years ended December 31, 2008 and 2007, and the selected consolidated balance sheet data as of December 31, 2009, 2008 and 2007 were derived from information publicly available but not included herein. The operating results for the nine-month period ended September 30, 2012 are not necessarily indicative of the results of operations for the remainder of the fiscal year or any future period.

        You should read the following information in conjunction with the section of this prospectus entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited annual consolidated financial statements and unaudited interim condensed consolidated financial statements and the respective related notes thereto included elsewhere in this prospectus.

 
  Nine Months Ended
September 30,
  Years ended December 31,  
(In millions of dollars)
  2012   2011   2011   2010(a)   2009(a)   2008(a)   2007(a)  

Statement of Operations Data

                                           

Revenues:

                                           

Car rental

  $ 5,578.5   $ 5,272.6   $ 6,929.6   $ 6,355.2   $ 5,872.9   $ 6,730.4   $ 6,800.7  

Equipment rental

    998.5     891.3     1,208.8     1,069.8     1,110.2     1,657.3     1,755.3  

Other(b)

    125.3     120.7     160.0     137.5     118.4     137.4     129.6  
                               

Total revenues

    6,702.3     6,284.6     8,298.4     7,562.5     7,101.5     8,525.1     8,685.6  
                               

Expenses:

                                           

Direct operating

    3,545.2     3,508.6     4,566.4     4,283.4     4,086.8     4,935.3     4,644.4  

Depreciation of revenue earning equipment and lease charges(c)

    1,594.4     1,379.0     1,905.7     1,868.1     1,933.8     2,196.9     2,007.4  

Selling, general and administrative

    615.3     575.2     745.1     664.5     641.8     768.8     773.5  

Interest expense

    430.5     495.2     650.3     726.5     653.7     870.5     917.0  

Interest income

    (2.3 )   (4.6 )   (5.5 )   (12.3 )   (16.0 )   (24.8 )   (41.2 )

Other (income) expense, net

    (10.5 )   62.7     62.5         (48.5 )        

Impairment charges(d)

                        1,195.0      
                               

Total expenses

    6,172.6     6,016.1     7,924.5     7,530.2     7,251.6     9,941.7     8,301.1  
                               

Income (loss) before income taxes

    529.7     268.5     373.9     32.3     (150.1 )   (1,416.6 )   384.5  

(Provision) benefit for taxes on income(e)

    (225.7 )   (102.3 )   (143.8 )   (33.3 )   50.8     249.1     (106.1 )
                               

Net income (loss)

    304.0     166.2     230.1     (1.0 )   (99.3 )   (1,167.5 )   278.4  

Noncontrolling interest

        (14.5 )   (19.6 )   (17.4 )   (14.7 )   (20.8 )   (19.7 )
                               

Net income (loss) attributable to The Hertz Corporation and Subsidiaries' common stockholder

  $ 304.0   $ 151.7   $ 210.5   $ (18.4 ) $ (114.0 ) $ (1,188.3 ) $ 258.7  
                               

57


Table of Contents


 
  September 30,   December 31,  
(In millions of dollars)
  2012   2011   2011   2010(a)   2009(a)   2008(a)   2007(a)  

Balance Sheet Data

                                           

Cash and cash equivalents

  $ 453.3   $ 385.3   $ 931.2   $ 2,374.0   $ 985.5   $ 594.0   $ 729.7  

Total assets(f)

    19,547.1     19,083.2     17,667.3     17,336.9     16,009.2     16,464.1     19,299.1  

Total debt

    12,293.2     12,102.8     10,907.8     10,919.3     9,997.0     10,972.3     11,960.1  

Total equity

    2,961.3     2,658.8     2,628.9     2,502.4     2,461.9     1,450.7     2,885.3  

(a)
During the third quarter of 2011, we identified certain errors in our previously issued consolidated financial statements. As such, Net income (loss) attributable to The Hertz Corporation and its subsidiaries' common stockholder for the years ended December 31, 2010, 2009, 2008 and 2007 was revised from the previously reported $(17.7) million to $(18.4) million, $(110.5) million to $(114.0) million, $(1,206.5) million to $(1,188.3) million and $266.8 million to $258.7 million, respectively. Total assets as of December 31, 2010, 2009, 2008 and 2007 were revised from the previously reported $17,324.2 million to $17,336.9 million, $15,996.4 million to $16,009.2 million, $16,451.3 million to $16,464.1 million and $19,255.2 million to $19,299.1 million, respectively. Total equity as of December 31, 2010, 2009, 2008 and 2007 were revised from the previously reported $2,515.2 million to $2,502.4 million, $2,474.1 million to $2,461.9 million, $1,459.3 million to $1,450.7 million and $2,912.1 million to $2,885.3 million, respectively. See Note 2 to our audited annual consolidated financial statements included elsewhere in this prospectus.

(b)
Includes fees and certain cost reimbursements from our licensees and revenues from our car leasing operations and third-party claim management services.

(c)
For the nine months ended September 30, 2012 and 2011 and the years ended December 31, 2011, 2010, 2009, 2008 and 2007, depreciation of revenue earning equipment decreased by $96.6 million, $19.9 million and $18.2 million and increased by $22.7 million, $19.3 million, $32.7 million and $0.6 million, respectively, resulting from the net effects of changing depreciation rates to reflect changes in the estimated residual value of revenue earning equipment. For the nine months ended September 30, 2012 and 2011 and the years ended December 31, 2011, 2010, 2009, 2008 and 2007, depreciation of revenue earning equipment and lease charges includes net gains of $93.3 million, $93.3 million and $112.2 million and net losses of $42.9 million, $72.0 million, $74.3 million and $13.3 million, respectively, from the disposal of revenue earning equipment.

(d)
For the year ended December 31, 2008, we recorded non-cash impairment charges related to our goodwill, other intangible assets and property and equipment.

(e)
For the years ended December 31, 2011, 2010, 2009 and 2008, tax valuation allowances decreased by $2.5 million and increased by $27.5 million, $39.7 million and $58.5 million, respectively, (excluding the effects of foreign currency translation) relating to the realization of deferred tax assets attributable to net operating losses, credits and other temporary differences in various jurisdictions. In 2011, we reversed a valuation allowance of $12.0 million relating to realization of deferred tax assets attributable to net operating losses and other temporary differences in Australia and China. Additionally, certain tax reserves were recorded and certain tax reserves were released due to settlement for various uncertain tax positions in Federal, state and foreign jurisdictions. For the year ended December 31, 2007, we reversed a valuation allowance of $9.1 million relating to the realization of deferred tax assets attributable to net operating losses and other temporary differences in certain European countries. Additionally, certain tax reserves were recorded for various uncertain tax positions in Federal, state and foreign jurisdictions.

(f)
Substantially all of our revenue earning equipment, as well as certain related assets, are owned by special purpose entities, or are subject to liens in favor of our lenders under our various credit facilities, other secured financings and asset-backed securities programs. None of such assets are available to satisfy the claims of our general creditors. For a description of those facilities, see the section of this prospectus entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

58


Table of Contents


UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

        The following unaudited pro forma condensed combined statement of operations for the fiscal year ended December 31, 2011 is presented on a pro forma basis to give effect to (i) the acquisition of Donlen Corporation ("Donlen") by The Hertz Corporation, a Delaware corporation ("Hertz"), (ii) the acquisition (the "Dollar Thrifty Acquisition") of Dollar Thrifty Automotive Group, Inc., a Delaware corporation ("Dollar Thrifty"), by Hertz Global Holdings, Inc., a Delaware corporation and the parent of Hertz ("Hertz Holdings"), (iii) the sale of Simply Wheelz LLC (the "Advantage Divestiture"), a wholly owned subsidiary of Hertz that operated its Advantage Rent A Car business ("Advantage"), and of selected Dollar Thrifty airport concessions and certain other assets to Adreca Holdings Corp., a subsidiary of Macquarie Capital which is expected to be operated by Franchise Services of North America Inc. (the "Advantage Buyer"), and (iv) the financing of $1,950.0 million to fund the Dollar Thrifty Acquisition (collectively, the "Pro Forma Transactions"), in each case, as if they had occurred on January 1, 2011. The following unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2012 is presented on a pro forma basis to give effect to (i) the Dollar Thrifty Acquisition, (ii) the Advantage Divestiture and the divestiture of selected Dollar Thrifty airport concessions and certain other assets and (iii) the financing of $1,950.0 million to fund the Dollar Thrifty Acquisition, in each case, as if they had occurred on January 1, 2011. The operating results of Donlen for such period are included in our unaudited consolidated statement of operations for such period included elsewhere in this prospectus, as the acquisition of Donlen was completed on September 1, 2011. The following unaudited pro forma condensed combined balance sheet as of September 30, 2012 is presented on a pro forma basis to give effect to (i) the Dollar Thrifty Acquisition, (ii) the Advantage Divestiture and the divestiture of selected Dollar Thrifty airport concessions and certain other assets and (iii) the financing of $1,950.0 million to fund the Dollar Thrifty Acquisition, in each case, as if they had occurred on September 30, 2012. The effects of the acquisition of Donlen are already reflected in our unaudited condensed consolidated balance sheet as of September 30, 2012 included elsewhere in this prospectus. The historical consolidated financial information has been adjusted in the following unaudited pro forma condensed combined financial statements, or the "pro forma financial statements," to give effect to pro forma events that are (i) directly attributable to the applicable Pro Forma Transactions, (ii) factually supportable and (iii) with respect to the statements of operations, expected to have a continuing impact on the combined results.

        The following pro forma financial statements were derived from and should be read in conjunction with:

    the consolidated financial statements of Hertz as of and for the year ended December 31, 2011 and the related notes included elsewhere in this prospectus;

    the consolidated financial statements of Dollar Thrifty as of and for the year ended December 31, 2011 and the related notes included elsewhere in this prospectus;

    the unaudited consolidated financial statements of Hertz as of and for the nine months ended September 30, 2012 and the related notes included elsewhere in this prospectus;

    the unaudited consolidated financial statements of Dollar Thrifty as of and for the nine months ended September 30, 2012 and the related notes included elsewhere in this prospectus; and

    the consolidated financial statements of Donlen as of and for the year ended August 31, 2011 and the related notes included elsewhere in this prospectus.

        The pro forma financial statements have been presented for informational purposes only. The pro forma financial statements are not necessarily indicative of what the combined company's financial position or results of operations actually would have been had the applicable Pro Forma Transactions been completed as of the dates indicated. In addition, the pro forma financial statements do not

59


Table of Contents

purport to project the future financial position or operating results of the combined company. There were no material transactions between Hertz and Dollar Thrifty or Donlen during the periods presented in the pro forma financial statements that would need to be eliminated.

        The pro forma financial statements have been prepared using the acquisition method of accounting under GAAP, which is subject to change and interpretation. Hertz has been treated as the acquirer in the completed acquisition of Donlen and the Dollar Thrifty Acquisition for accounting purposes. Assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the pro forma financial statements.

        Acquisition accounting is dependent upon certain valuations and other studies that have not yet been completed (primarily, the final income tax assessments, final valuation of acquired intangible assets and lease contracts), and will not be completed at the time of the preparation of this prospectus. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of preparing the pro forma financial statements and are based upon information available at the time of the preparation of this prospectus. Differences between these preliminary estimates and the final acquisition accounting will occur and these differences could have a material impact on the pro forma financial statements and the combined company's future results of operations and financial position.

        The pro forma financial statements do not reflect non-recurring income statement items arising directly as a result of the Dollar Thrifty Acquisition, any cost savings or other synergies that the combined company may achieve as a result of the completed acquisition of Donlen or the Dollar Thrifty Acquisition, the costs to integrate the operations of Hertz and Dollar Thrifty or Donlen or the costs necessary to achieve these cost savings and other synergies, other than as reflected in the historical actual results of Hertz in regards to its completed acquisition of Donlen. The effects of the foregoing items could, individually or in the aggregate, materially impact the pro forma financial statements.

60


Table of Contents


Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2011

(in thousands of dollars)
  Hertz   Donlen   Donlen Pro
Forma
Adjustments
(Note 2)
  Subtotal   Dollar
Thrifty
(Note 2)
  Dollar
Thrifty Pro
Forma
Adjustments
(Note 5)
  Sale of
Advantage
(Note 6(a))
  Advantage
Pro Forma
Adjustments
(Note 6(c))
  Pro Forma
Combined
 

Revenues:

                                                       

Car Rental

  $ 6,929,584   $ 272,611   $ (6,464 ) $ 7,195,731   $ 1,484,324   $ (170,999 )(a) $ (178,782 ) $ 72,646   $ 8,402,920  

Equipment Rental

    1,208,811             1,208,811                     1,208,811  

Other

    159,985             159,985     64,604                 224,589  
                                       

Total revenues

    8,298,380     272,611     (6,464 )   8,564,527     1,548,928     (170,999 )   (178,782 )   72,646     9,836,320  
                                       

Expenses:

                                                       

Direct operating

    4,566,378     16,600         4,582,978     751,468     (31,696 )(a)   (105,621 )       5,197,129  

Depreciation of revenue earning equipment and lease charges

    1,905,739     215,404         2,121,143     270,957     (169,504 )(a)(b)           2,222,596  

Selling, general and administrative

    745,117     17,276     (6,526 )   755,867     187,799     (22,535 )(a)(c)(d)   (9,714 )       911,417  

Interest expense

    650,254     5,012     3,287     658,553     78,929     79,472 (e)           816,954  

Interest and other (income) expense, net

    56,997             56,997     (1,467 )               55,530  
                                       

Total expenses

    7,924,485     254,292     (3,239 )   8,175,538     1,287,686     (144,263 )   (115,335 )       9,203,626  
                                       

Income (loss) before income taxes

    373,895     18,319     (3,225 )   388,989     261,242     (26,736 )   (63,447 )   72,646     632,694  

(Provision) benefit for taxes on income

    (143,846 )   (7,726 )   1,258     (150,314 )   (101,692 )   10,427 (f)   24,744     (28,332 )   (245,167 )
                                       

Net income (loss)

    230,049     10,593     (1,967 )   238,675     159,550     (16,309 )   (38,703 )   44,314     387,527  

Less: Net income attributable to noncontrolling interest

    (19,560 )           (19,560 )                   (19,560 )
                                       

Net income (loss) attributable to Hertz/Dollar Thrifty common stockholders

  $ 210,489   $ 10,593   $ (1,967 ) $ 219,115   $ 159,550   $ (16,309 ) $ (38,703 ) $ 44,314   $ 367,967  
                                       

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements, which are an integral part of these statements.

61


Table of Contents


Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2012

(in thousands of dollars)
  Hertz   Dollar
Thrifty
(Note 2)
  Dollar
Thrifty Pro
Forma
Adjustments
(Note 5)
  Sale of
Advantage
(Note 6(a))
  Advantage
Pro Forma
Adjustments
(Note 6(c))
  Pro Forma
Combined
 

Revenues:

                                     

Car Rental

  $ 5,578,544   $ 1,160,322   $ (132,217) (a) $ (180,956 ) $ 51,162   $ 6,476,855  

Equipment Rental

    998,458                     998,458  

Other

    125,292     51,928                 177,220  
                           

Total revenues

    6,702,294     1,212,250     (132,217 )   (180,956 )   51,162     7,652,533  
                           

Expenses:

                                     

Direct operating

    3,545,162     596,463     (26,278 )(a)   (103,052 )       4,012,295  

Depreciation of revenue earning equipment and lease charges

    1,594,396     188,368     (45,776) (a)           1,736,988  

Selling, general and administrative

    615,279     148,004     (26,854 )(a)(c)(d)   (5,718 )       730,711  

Interest expense

    430,549     45,935     62,595   (e)           539,079  

Interest and other (income) expense, net

    (12,802 )   (1,334 )               (14,136 )
                           

Total expenses

    6,172,584     977,436     (36,313 )   (108,770 )       7,004,937  
                           

Income (loss) before income taxes

    529,710     234,814     (95,904 )   (72,186 )   51,162     647,596  

(Provision) benefit for taxes on income

    (225,682 )   (89,516 )   37,403   (f)   28,153     (19,953 )   (269,595 )
                           

Net income (loss)

    304,028     145,298     (58,501 )   (44,033 )   31,209     378,001  

Less: Net income attributable to noncontrolling interest

                         
                           

Net income (loss) attributable to Hertz/Dollar Thrifty common stockholders

  $ 304,028   $ 145,298   $ (58,501 ) $ (44,033 ) $ 31,209   $ 378,001  
                           

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements, which are an integral part of these statements.

62


Table of Contents


Unaudited Pro Forma Condensed Combined

Balance Sheet

As of September 30, 2012

(in thousands of dollars)
  Hertz   Dollar
Thrifty
(Note 2)
  Dollar
Thrifty
Pro Forma
Adjustments
(Note 5)
  Sale of
Advantage
(Note 6)
  Pro Forma
Combined
 

Assets

                               

Cash and cash equivalents

  $ 453,294   $ 456,869   $ (737,033 )(g) $   $ 173,130  

Restricted cash and cash equivalents

    376,773     250,144             626,917  

Receivables, less allowance for doubtful accounts

    1,731,795     128,217     164,464 (a)   17,913 (b)   2,042,389  

Inventories, at lower of cost or market

    105,982     8,652         (1,465 )(a)   113,169  

Prepaid expenses and other assets

    392,121     63,328     (35,313 )(h)   (448 )(a)   419,688  

Revenue earning equipment, net

                               

Cars

    10,036,380     1,875,607     (251,614 )(a)(b)(v)       11,660,373  

Other equipment

    2,184,829                 2,184,829  
                       

Total revenue earning equipment, net

    12,221,209     1,875,607     (251,614 )       13,845,202  
                       

Property and equipment, net

    1,279,721     97,325     (599 )(i)(a)   (6,221 )(a)   1,370,226  

Income taxes receivable

        4,453     (4,453 )(j)        

Other intangible assets, net

    2,531,522         1,490,000 (k)   (21,522 )(a)   4,000,000  

Goodwill

    454,663         1,014,417 (l)       1,469,080  
                       

Total Assets

  $ 19,547,080   $ 2,884,595   $ 1,639,869   $ (11,743 ) $ 24,059,801  
                       

Liabilities and Equity

                               

Accounts payable

  $ 975,098   $ 47,768   $   $   $ 1,022,866  

Accrued liabilities

    1,012,188     136,567     (9,796 )(m)(n)   15,555 (b)   1,154,514  

Accrued taxes

    242,218         (38,718 )(f)(j)         203,500  

Debt

    12,293,232     1,481,137     1,969,336 (o)       15,743,705  

Public liability and property damage

    279,755     82,358             362,113  

Deferred taxes on income

    1,783,240     392,524     539,638 (p)       2,715,402  
                       

Total Liabilities

    16,585,731     2,140,354     2,460,460     15,555     21,202,100  
                       

Common stock

        364     (364 )(q)        

Preferred stock

                     

Additional paid-in capital

    3,501,007     956,483     (956,483 )(r)       3,501,007  

Accumulated (deficit) earnings

    (524,848 )   142,879     (214,054 )(s)   (27,298 )(b)   (623,321 )

Accumulated other comprehensive income (loss)

    (14,829 )   6,362     (11,537 )(t)       (20,004 )

Treasury stock

        (361,847 )   361,847 (u)        
                       

Total Hertz/Dollar Thrifty Equity

    2,961,330     744,241     (820,591 )   (27,298 )   2,857,682  
                       

Noncontrolling interest

    19           $     19  
                       

Total Equity

    2,961,349     744,241     (820,591 )   (27,298 )   2,857,701  
                       

Total Liabilities and Equity

  $ 19,547,080   $ 2,884,595   $ 1,639,869   $ (11,743 ) $ 24,059,801  
                       

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements, which are an integral part of these statements.

63


Table of Contents


Notes to Unaudited Pro Forma Condensed Combined Financial Statements

1. Description of Pro Forma Transactions

    Acquisition of Donlen

        On September 1, 2011, Hertz, pursuant to the Agreement and Plan of Merger (the "Donlen Merger Agreement"), dated as of July 12, 2011, by and among Hertz, DNL Merger Corp., an Illinois corporation and wholly-owned subsidiary of Hertz ("Sub"), Donlen, Gary Rappeport, as Shareholder Representative and Subsidiary Shareholder, and Nancy Liace, as Subsidiary Shareholder, acquired the entire equity interest in Donlen and certain of its affiliates. The final closing cash payment for Donlen's equity was $250.0 million, including $7.7 million to acquire the controlling interest in a Donlen equity investee (GreenDriver, Inc.) and the non-controlling interest in Donlen's previously partially owned subsidiaries. Additionally, in connection with the acquisition, Donlen's GN II Variable Funding Note Facility (which is a nonrecourse asset backed securitization financing) remained outstanding and lender commitments thereunder were increased to permit aggregate maximum borrowings of $850.0 million (subject to borrowing base availability). At September 1, 2011, borrowings under this facility amounted to $765.0 million with a floating interest rate of approximately 1.17%.

    The Dollar Thrifty Acquisition

        On November 19, 2012, Hertz Holdings completed the Dollar Thrifty Acquisition pursuant to the terms of the Agreement and Plan of Merger, dated as of August 26, 2012 (the "Merger Agreement"), with Dollar Thrifty and HDTMS, Inc. ("Merger Sub"), a wholly-owned subsidiary of Hertz. In accordance with the terms of the Merger Agreement, Merger Sub completed a tender offer (the "Tender Offer") in which it purchased a majority of the shares of Dollar Thrifty common stock then outstanding at a price equal to $87.50 per share in cash. Merger Sub subsequently acquired the remaining shares of Dollar Thrifty common stock by means of a short-form merger (the "Merger") in which such shares were converted into the right to receive the same $87.50 per share in cash paid in the tender offer. After taking into account Hertz Holdings' use of approximately $400.0 million of cash and cash equivalents available from Dollar Thrifty, the purchase price for Dollar Thrifty's common stock was approximately $2.1 billion.

        In order to obtain regulatory approval and clearance for the Dollar Thrifty Acquisition, Hertz Holdings agreed to dispose of Advantage, to secure for the Advantage Buyer 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 (the "Initial Airport Locations") and to secure for the Advantage Buyer or, in certain cases, one or more other Federal Trade Commission-approved buyers, on-airport car rental concessions at 13 additional locations where Dollar Thrifty operated prior to the consummation of the Dollar Thrifty Acquisition (the "Secondary Airport Locations"). The Advantage Buyer agreed to assume all of the Secondary Airport Locations. See Note 5 for a further discussion of the expected impact of the disposition of the Initial Airport Locations and the Secondary Airport Locations.

    The Advantage Divestiture

        On December 12, 2012, Hertz consummated the Advantage Divestiture, pursuant to which it sold Simply Wheelz LLC, its wholly owned subsidiary that operated our Advantage business, to the Advantage Buyer. See Note 6 for a further discussion of the expected impact of the disposition of Advantage.

    Issuance of the 2020 Notes and the 2022 Notes and Incurrence of Incremental Term Loans

        On October 16, 2012, HDTFS, Inc., a wholly owned subsidiary of Hertz (the "Escrow Issuer"), issued $700.0 million in aggregate principal amount of 5.875% Senior Notes due 2020 (the "2020 Notes") and $500.0 million in aggregate principal amount of 6.250% Senior Notes due 2022 (the "2022 Notes"), each in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended. The proceeds from this issuance were placed in escrow pending consummation of

64


Table of Contents

the Dollar Thrifty Acquisition. Contemporaneously with the consummation of the Dollar Thrifty Acquisition, the proceeds from the issuance were released from escrow, the Escrow Issuer merged with and into Hertz, with Hertz continuing as the surviving entity, and Hertz assumed the Escrow Issuer's obligations under the 2020 Notes, the 2022 Notes and the indenture governing the same. The proceeds of this issuance were used to: (i) finance a portion of the consideration in connection with the Dollar Thrifty Acquisition, (ii) pay off existing indebtedness and other obligations of Dollar Thrifty and its subsidiaries in connection with the Dollar Thrifty Acquisition and (iii) pay fees and other transaction expenses in connection with the Dollar Thrifty Acquisition and related financing transactions.

        On October 9, 2012, Hertz entered into an Incremental Commitment Amendment to its March 2011 credit agreement, which had provided for a $1,400.0 million secured term loan facility (the "Senior Term Facility") with an average interest rate of 3.75% at September 30, 2012. The Incremental Commitment Amendment increased the amount available under the Senior Term Facility by providing for commitments for an additional $750.0 million of incremental terms loans (the "Incremental Term Loans") under the Senior Term Facility. Contemporaneously with the consummation of the Dollar Thrifty Acquisition, the Incremental Term Loans were fully drawn and the proceeds therefrom were used to: (i) finance a portion of the consideration in connection with the Dollar Thrifty Acquisition, (ii) pay off existing indebtedness and other obligations of Dollar Thrifty and its subsidiaries in connection with the Dollar Thrifty Acquisition and (iii) pay fees and other transaction expenses in connection with the Dollar Thrifty Acquisition and related financing transactions.

2. Basis of Presentation

        The pro forma financial statements were prepared using the acquisition method of accounting in accordance with Financial Accounting Standards Board's Accounting Standards Codification (ASC) 805, Business Combinations, and uses the fair value concepts defined in ASC 820, Fair Value Measurements and Disclosures. Certain reclassifications have been made to the historical financial statements of Dollar Thrifty to conform with Hertz's presentation, primarily related to the presentation of (i) interest income, which Dollar Thrifty shows net with interest expense, (ii) inventories, which Dollar Thrifty shows as part of "Prepaid expenses and other assets," (iii) capitalized software, which Dollar Thrifty shows as a separate line item, but which Hertz includes in "Property and equipment, net" and (iv) the increase (decrease) in the fair value of derivatives which Dollar Thrifty presents as a separate line item, but which Hertz includes in "Selling, general and administrative."

        On September 1, 2011, Hertz acquired Donlen. For purposes of these pro forma financial statements, we have included the historical results of Donlen from January 1, 2011, adjusted for items such as additional amortization expense on acquired intangible assets, additional interest expense associated with debt used to finance the acquisition, the elimination of the recognition of deferred income for items where, as of the acquisition date, there was no future obligation of Donlen to provide products or services associated with the amount reflected on the balance sheet, to eliminate direct costs attributable to the acquisition that are not expected to have a continuing impact on the combined entity's results and for the income tax effect of the above adjustments. No adjustments for Donlen are necessary for the nine months ended September 30, 2012 statement of operations or the September 30, 2012 balance sheet, as Donlen's results are already fully integrated into Hertz from the acquisition date forward.

        In order to obtain regulatory approval and clearance for the Dollar Thrifty Acquisition, Hertz Holdings agreed to divest its Advantage business. As such, these pro forma financial statements reflect adjustments to eliminate the results of operations of Advantage for the year ended December 31, 2011 and the nine months ended September 30, 2012, as well as the assets and liabilities of the Advantage business that was sold. Additionally, in order to obtain regulatory approval and clearance for the Dollar Thrifty Acquisition, Hertz Holdings agreed to secure for the Advantage Buyer certain on-airport car rental concessions and related assets at the Initial Airport Locations and the Secondary Airport Locations. These pro forma financial statements reflect adjustments to eliminate the results of operations as well as the assets and liabilities of the Initial Airport Locations and the Secondary

65


Table of Contents

Airport Locations. As part of the agreement with the Advantage Buyer, Hertz Holdings will also be providing financial support to the Advantage Buyer. See Notes 5 and 6 for further discussion of the financial support fees.

        ASC 805 requires, among other things, that most assets acquired and liabilities assumed be recognized at their fair values as of the effective time of the Dollar Thrifty Acquisition. ASC 820 defines the term "fair value" and sets forth the valuation requirements for any asset or liability measured at fair value, expands related disclosure requirements and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair value measures. Fair value is defined in ASC 820 as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." This is an exit price concept for the valuation of the asset or liability. In addition, market participants are assumed to be buyers and sellers in the principal (or the most advantageous) market for the asset or liability. Fair value measurements for an asset assume the highest and best use by these market participants. As a result of these standards, Hertz may be required to record assets which are not intended to be used or sold and/or to value assets at fair value measures that do not reflect Hertz's intended use of those assets. Many of these fair value measurements can be highly subjective and it is also possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.

        Under ASC 805 acquisition-related transaction costs (e.g., advisory, legal, valuation, other professional fees) and certain acquisition-related restructuring charges impacting the target company are not included as a component of consideration transferred but are accounted for as expenses in the periods in which the costs are incurred. Total advisory, legal, regulatory and valuation costs directly related to the Dollar Thrifty Acquisition and incurred by Hertz and Dollar Thrifty for the year ended December 31, 2011, were $14.1 million and $4.6 million, respectively, and for the nine months ended September 30, 2012, were $17.5 million and $5.7 million, respectively, and have been removed from the unaudited pro forma condensed combined statements of operations as they reflect non-recurring charges directly related to the Dollar Thrifty Acquisition. An additional $41 million and $38 million of anticipated costs for Hertz and Dollar Thrifty, respectively, are reflected in the unaudited pro forma condensed combined balance sheet as a reduction to cash and retained earnings.

3. Estimate of Total Acquisition Costs

        The following represents total acquisition costs of the Dollar Thrifty Acquisition:

 
  (In millions,
except share and per share amounts)
 

Dollar Thrifty common stock shares outstanding, less shares owned by Hertz at September 30, 2012

    27,585  

Cash per share

  $ 87.50  
       

Cash consideration for outstanding shares

    2,413.7  

Value of Dollar Thrifty stock options to be settled in cash

    104.9 (a)

Value of Dollar Thrifty performance unit share awards and restricted stock units to be settled in cash

    30.9 (b)

Option exchange

    0.5  

Payment for shares to execute top-up option

    0.2  
       

Total cash consideration transferred

    2,550.2  

Dollar Thrifty common stock shares previously owned by Hertz at September 30, 2012

    41.4  
       

Total acquisition costs

  $ 2,591.6  
       

(a)
Represents the cash consideration paid to holders of Dollar Thrifty stock options. At the date the Tender Offer was completed, the holders of each stock option were entitled to

66


Table of Contents

    receive a lump sum cash payment equal to the product of 1) the number of shares of Dollar Thrifty common stock subject to such award and 2) the excess, if any, of $87.50 over the exercise price per share of Dollar Thrifty common stock. In accordance with ASC 805, the fair value of outstanding Dollar Thrifty stock options, which are immediately vested upon consummation of the Tender Offer, has been attributed to precombination service and included in the consideration transferred.

(b)
Represents the cash consideration paid to holders of Dollar Thrifty performance units and restricted stock units for service prior to the consummation of the Tender Offer. At the date the Tender Offer was completed, the holders of each performance unit and each restricted stock unit became fully vested in such award and were entitled to receive a lump sum cash payment equal to the product of (1) the number of shares of Dollar Thrifty common stock subject to such award (in the case of performance units, as if performance was achieved at the target level) and (2) $87.50. ASC 805 requires that cash payments made to settle vested awards attributable to precombination service be included in the consideration transferred. Additionally, approximately $13.2 million in payments associated with performance units and restricted stock units associated with post-combination services have been expensed after consummation of the Tender Offer.

4. Purchase Price Allocation

        The following table summarizes the preliminary allocation of the purchase price (including Dollar Thrifty common stock shares previously owned by Hertz) of $2,591.6 million to the estimated fair value of the assets acquired and liabilities assumed by Hertz in the Dollar Thrifty Acquisition:

 
  (In millions)  

Cash and cash equivalents

  $ 456.9  

Restricted cash

    250.1  

Accounts receivable

    128.2  

Inventories

    8.7  

Prepaid expenses and other assets

    46.1  

Revenue Earning Equipment

    1,788.5  

Property, plant and equipment

    96.7  

Identifiable intangible assets

    1,490.0  

Other assets

    11.2  

Goodwill

    1,014.4  

Accounts payable

    (47.8 )

Debt

    (1,500.5 )

Accrued liabilities

    (218.8 )

Deferred income tax

    (932.1 )
       

Net Assets acquired

  $ 2,591.6  
       

        The identifiable intangible assets of $1,490.0 million consist of $1,140.0 million of trade names with an indefinite life and $350.0 million of concession agreements. The concession agreements will be amortized over their expected useful lives of 9 years. The estimated goodwill reflected on this pro forma balance sheet is calculated as if the transaction had occurred as of the pro forma balance sheet date and therefore, will be different from the final goodwill reflected based on the net assets acquired at closing. The goodwill recorded in connection with this transaction is not deductible for income tax purposes.

        The amounts above are considered preliminary and are subject to change once Hertz receives certain information (primarily the final income tax assessments, final valuation of acquired intangible assets and lease contracts) it believes is necessary to finalize its determination of the fair value of assets acquired and liabilities assumed under the acquisition method. Thus these amounts are subject to

67


Table of Contents

refinement, and additional adjustments to record fair value of all assets acquired and liabilities assumed. Differences between these preliminary estimates and the final acquisition accounting will occur and these differences could have a material impact on the pro forma financial statements and the combined company's future results of operations and financial position.

5. Pro Forma Adjustments

        Adjustments included in the column under the heading "Dollar Thrifty Pro Forma Adjustments" represent the following:

(a)
In order to obtain regulatory approval and clearance for the Dollar Thrifty Acquisition, Hertz Holdings agreed to secure for the Advantage Buyer certain on-airport car rental concessions and related assets at the Initial Airport Locations and at the Secondary Airport Locations. These pro forma financial statements reflect adjustments to eliminate the results of operations of the Initial Airport Locations and the Secondary Airport Locations for the year ended December 31, 2011 and the nine months ended September 30, 2012, as well as the assets and liabilities (if any) of the Initial Airport Locations and the Secondary Airport Locations that are subject to divestiture. Further, these pro forma financial statements also reflect the effects of the vehicles expected to be sold as part of the disposition of the Initial Airport Locations and the Secondary Airport Locations.

(b)
To adjust the fair value of acquired revenue earning equipment and to adjust depreciation expense due to fair value adjustment related to revenue earning equipment.

(c)
To adjust amortization expense for the estimated amortization expense of concessions intangible assets acquired, with an estimated fair value of $350.0 million and an estimated useful life of 9 years.

(d)
To eliminate advisory, legal, regulatory and one time retention costs incurred by Dollar Thrifty totaling $18.7 million and $23.2 million for the year ended December 31, 2011 and the nine months ended September 30, 2012, respectively, that are directly attributable to the Dollar Thrifty Acquisition but that are not expected to have a continuing impact on the combined company's results. See Note 2 for a further explanation.

(e)
To adjust interest expense as follows:

 
  Year Ended
December 31, 2011
  Nine Months
Ended
September 30, 2012
 
 
  (In millions)
 

Amortization of the fair value adjustment to debt

  $ (7.8 ) $ (5.8 )

Elimination of interest expense due to the extinguishment of Dollar Thrifty's existing non-vehicle debt(i)

    (3.3 )   (3.1 )

Elimination of amortization of deferred financing costs

    (13.7 )   (6.7 )

Interest expense associated with the new debt used to finance the Dollar Thrifty Acquisition(ii)

    104.3     78.2  
           

Total

  $ 79.5   $ 62.6  
           

(i)
Reflects elimination of commitment fees related to Dollar Thrifty's revolving credit facility and the elimination of Dollar Thrifty's letter of credit fees relating to Dollar Thrifty's letters of credit outstanding at the end of the relevant periods offset by assumption that the outstanding balance of Dollar Thrifty's letters of credit at the end of

68


Table of Contents

    the relevant periods were issued under the terms of Hertz's Senior ABL Facility in effect as at September 30, 2012 for the entire duration of the relevant periods.

(ii)
Includes amortization of deferred financing costs associated with the new debt used to finance the Dollar Thrifty Acquisition.
(f)
To record the preliminary estimated tax effect of the pro forma adjustments. Hertz has generally assumed a 39% tax rate when estimating the tax impacts of the Dollar Thrifty Acquisition, representing the statutory tax rate for Hertz. The effective tax rate of the combined company could be significantly different (either higher or lower) depending on post-Dollar Thrifty Acquisition activities, cash needs and the geographical location of businesses.

(g)
To adjust cash and cash equivalents, as follows:

 
  (In millions)  

Offer Price(i) (see Note 3)

  $ (2,550.2 )

New debt used to finance the Dollar Thrifty Acquisition

    1,950.0  

Financing costs associated with new debt used to finance the Dollar Thrifty Acquisition

    (30.2 )

Estimate of future acquisition-related transaction costs (primarily investment banking and legal fees)

    (78.8 )

Accrued related transaction costs

    (12.8 )

Additional cash payments for performance units and restricted stock units not included in consideration (see Note 3b)

    (13.3 )

Retention bonus

    (1.7 )
       

Total

  $ (737.0 )
       

(i)
Hertz paid the cash consideration for the Dollar Thrifty Acquisition from available cash balances, borrowings under the Incremental Term Loans for $750.0 million, and the issuance of the 2020 Notes and 2022 Notes for $1,200.0 million (See Note 1—"Description of Pro Forma Transactions").

    For purposes of these pro forma financial statements, Dollar Thrifty has established a retention program with a pool of approximately $6.9 million for Dollar Thrifty employees who are not executive officers and that 25% of the approximately $6.9 million charge was paid upon completion of the Dollar Thrifty Acquisition and 75% will be payable upon completion of a six-month requisite service period following the completion of the Dollar Thrifty Acquisition. Based on those assumptions, Hertz will incur charges following the Dollar Thrifty Acquisition of approximately $3.8 million in relation to this retention program.

(h)
To adjust prepaid expenses and other assets, as follows:

 
  (In millions)  

Eliminate unamortized deferred financing fees

  $ (17.1 )

Eliminate Rabbi trust plan (prefunding) associated with deferred compensation

    (7.0 )

Record deferred financing costs associated with new debt used to finance the Dollar Thrifty Acquisition

    30.2  

Eliminate Dollar Thrifty common shares previously held by Hertz at September 30, 2012

    (41.4 )
       

Total

  $ (35.3 )
       

69


Table of Contents

(i)
To adjust the fair value of acquired real estate property.

(j)
For the pro forma condensed combined balance sheet, Dollar Thrifty's "Income taxes receivable" line item, which is presented as a separate line item, has been reclassified and included in Hertz's "Accrued taxes" in the Dollar Thrifty Pro Forma Adjustments column.

(k)
To record intangible assets acquired at an estimated fair value of $1,490.0 million. (see Note 4).

(l)
To record an estimate of acquisition date goodwill, including the acquisition date fair value of previously held Dollar Thrifty shares (see Note 5(h)).

(m)
To reflect the settlement of retention bonus accrual, deferred compensation expense and reclassification of accrued merger related costs to offset cash and cash equivalents.

(n)
To reflect the estimated support fees that Hertz Holdings is obligated to provide to the owner or buyers of the Secondary Airport Locations. These amounts are not included as a component of consideration transferred but are accounted for as post-combination expenses.

(o)
To adjust debt, as follows:

 
  (In millions)  

Adjustment to record Dollar Thrifty debt to fair value on acquisition date

  $ 19.3  

Amount of new debt assumed to finance the Dollar Thrifty Acquisition

    1,950.0  
       

Total

  $ 1,969.3  
       
(p)
To record the preliminary estimated deferred tax impact of the pro forma adjustments calculated at the assumed rate of 39%, to reverse deferred tax asset of $3.4 million associated with deferred compensation assumed to be paid by Dollar Thrifty prior to closing, and to reverse deferred tax liability of $3.3 million recorded on Hertz related to gains recorded in accumulated other comprehensive income, on Dollar Thrifty common shares previously held.

(q)
To eliminate Dollar Thrifty's common stock, at par.

(r)
To eliminate Dollar Thrifty's additional paid-in-capital.

(s)
To adjust accumulated deficit, as follows:

 
  (In millions)  

Eliminate Dollar Thrifty's retained earnings

  $ (142.9 )

Estimated remaining Dollar Thrifty Acquisition related transaction costs assumed to be non-recurring, net of tax

    (59.7 )

Reflect gains and related deferred taxes associated with Dollar Thrifty shares previously held by Hertz at September 30, 2012

    8.4  

Record the impact of post-combination expenses related to support fees associated with the divestiture of the Secondary Airport Locations

    (11.8 )

Record Impact of post-combination expense related to performance units and restricted stock units, net of tax

    (8.1 )
       

Total

  $ (214.1 )
       
(t)
To eliminate Dollar Thrifty's accumulated other comprehensive income of $6.4 million and Hertz's gains recorded on Dollar Thrifty's common shares previously owned of $5.1 million.

(u)
To eliminate Dollar Thrifty's treasury stock.

(v)
To adjust Dollar Thrifty's revenue earning equipment reserve balance on acquisition date for the purpose of accounting policy conformity with Hertz.

70


Table of Contents

6. Advantage

(a)
In order to obtain regulatory approval and clearance for the Dollar Thrifty Acquisition, Hertz Holdings agreed to divest its Advantage business. As such, these pro forma financial statements reflect adjustments to eliminate the results of operations of Advantage for the year ended December 31, 2011 and the nine months ended September 30, 2012, as well as the assets and liabilities of the Advantage business that was sold.

(b)
Hertz Holdings agreed to sell its Advantage business and selected Dollar Thrifty Initial Airport Locations to the Advantage Buyer for $16.0 million, plus the value of current assets as of the closing date, which is estimated to be $1.9 million at September 30, 2012 for purposes of these pro forma financial statements, and Hertz Holdings will also be providing financial support to the Advantage Buyer in the amount of $17.0 million (with the present value of $15.6 million). As such, these amounts have been reflected as an addition to Receivables, less allowance for doubtful accounts, and Accrued liabilities, respectively, on the pro forma condensed combined balance sheet.

(c)
As part of the agreement to sell Advantage, Hertz Holdings agreed to lease and sublease vehicles to the Advantage Buyer for use in continuing the operations of Advantage, for a period no longer than two years. As such, these pro forma financial statements include an estimated amount of leasing revenue to be earned by Hertz Holdings from leasing these vehicles to the Advantage Buyer and the related income tax impact. The depreciation and other expenses associated with the vehicles being leased to the Advantage Buyer have not been eliminated from the pro forma financial statements, as their costs remain as part of Hertz Holdings' ongoing operations associated with owning such vehicles.

The pro forma financial statements do not reflect Hertz's expected realization of any cost savings or other synergies, other than as reflected in the historical actual results of Hertz in regards to its completed acquisition of Donlen. These savings and synergies are expected in direct operating, depreciation of revenue earning equipment and selling, general and administrative functions. Although Hertz management expects that cost savings and other synergies will result from the Dollar Thrifty Acquisition, there can be no assurance that these cost savings and other synergies will be achieved. The pro forma financial statements also do not reflect estimated restructuring and integration charges associated with the expected cost savings or other synergies, other than as reflected in the historical actual results of Hertz in regards to its completed acquisition of Donlen. Additionally, assumed severance charges for Dollar Thrifty senior management of approximately $30.0 million are not reflected in the pro forma financial statements, and will be expensed as incurred. Hertz realized a loss (before income taxes) of approximately $30.0 million, including support fees to the Advantage Buyer as described in Note 6(b) as a result of the Advantage Divestiture. This loss excludes acquisition related expenses included in the financial statements of Hertz through September 30, 2012. This estimated loss associated with the Advantage Divestiture is preliminary and subject to further adjustment based on a number of factors.

71


Table of Contents


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

        The following discussion and analysis provides information that we believe to be relevant to an understanding of our consolidated financial condition and results of operations.

        You should read the following discussion and analysis together with the section of this prospectus entitled "Cautionary Note Regarding Forward-Looking Statements," with our audited annual consolidated financial statements and unaudited interim condensed consolidated financial statements and the respective related notes thereto contained elsewhere in this prospectus.


Corporate History

        We are a successor to corporations that have been engaged in the car and truck rental and leasing business since 1918 and the equipment rental business since 1965. Hertz was incorporated in Delaware in 1967. On December 21, 2005, investment funds associated with or designated by Clayton, Dubilier & Rice, Inc., which was succeeded by Clayton, Dubilier & Rice, LLC, or "CD&R," The Carlyle Group, or "Carlyle," and Merrill Lynch & Co., Inc., or "Merrill Lynch," or collectively the "Sponsors," acquired all of our common stock from Ford Holdings. As a result of Hertz Holdings' initial public offering in November 2006 and subsequent offerings, the Sponsors' holdings represent approximately 26% of the outstanding shares of common stock of Hertz Holdings.

        In January 2009, Bank of America Corporation, or "Bank of America," acquired Merrill Lynch. Accordingly, Bank of America is now an indirect beneficial owner of Hertz Holdings' common stock held by Merrill Lynch and certain other investment funds and affiliates of Merrill Lynch.


Overview of Our Business

        We are engaged principally in the business of renting and leasing of cars and equipment.

        Our revenues primarily are derived from rental and related charges and consist of:

    Car rental revenues (revenues from all company-operated car rental and fleet leasing operations and management services, including charges to customers for the reimbursement of costs incurred relating to airport concession fees and vehicle license fees, the fueling of vehicles and the sale of loss or collision damage waivers, liability insurance coverage and other products);

    Equipment rental revenues (revenues from all company-operated equipment rental operations, including amounts charged to customers for the fueling and delivery of equipment and sale of loss damage waivers, as well as revenues from the sale of new equipment and consumables); and

    Other revenues (primarily relates to fees and certain cost reimbursements from our licensees and revenues from our third-party claim management services).

        Our expenses primarily consist of:

    Direct operating expenses (primarily wages and related benefits; commissions and concession fees paid to airport authorities, travel agents and others; facility, self-insurance and reservation costs; the cost of new equipment and consumables purchased for resale; and other costs relating to the operation and rental of revenue earning equipment, such as damage, maintenance and fuel costs);

    Depreciation expense and lease charges relating to revenue earning equipment (including net gains or losses on the disposal of such equipment). Revenue earning equipment includes cars and rental equipment;

    Selling, general and administrative expenses (including advertising); and

72


Table of Contents

    Interest expense.

        Our profitability is primarily a function of the volume, mix and pricing of rental transactions and the utilization of cars and equipment. Significant changes in the purchase price or residual values of cars and equipment or interest rates can have a significant effect on our profitability depending on our ability to adjust pricing for these changes. We continue to balance our mix of non-program and program vehicles based on market conditions. Our business requires significant expenditures for cars and equipment, and consequently we require substantial liquidity to finance such expenditures. See "Liquidity and Capital Resources" below.


Car Rental

        In the U.S., as of September 30, 2012, the percentage of non-program cars was 86% as compared to 70% as of September 30, 2011. Internationally, as of September 30, 2012, the percentage of non-program cars was 65%, compared to 61% as of September 30, 2011. In the U.S., 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.

        In recent periods we have decreased the percentage of program cars in our car rental fleet. Non-program cars typically have lower acquisition costs and lower depreciation rates than comparable program cars. 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.

        In the nine months ended September 30, 2012 and the year ended December 31, 2011, 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.

        For the nine months ended September 30, 2012 and the year ended December 31, 2011, we experienced a 8.5% and 8.5% increase, respectively, in transaction days versus the prior period in the United States while rental rate revenue per transaction day, or "RPD," declined by 3.4% and 4.4%, respectively. During the nine months ended September 30, 2012, in our European operations, we experienced a 2.8% decline in transaction days and a 2.7% decline in RPD compared to the nine months ended September 30, 2011. During the year ended December 31, 2011, in our European operations, we experienced a 5.7% improvement in transaction days while RPD declined by 3.0% compared to the year ended December 31, 2010.

        From January 1, 2009 to September 30, 2012, we increased the number of our off-airport rental locations in the United States by approximately 48% to 2,430 locations. Revenues from our U.S. off-airport operations represented $981.3 million, $908.9 million, $1,197.4 million, $1,079.7 million and $953.4 million of our total car rental revenues in the nine months ended September 30, 2012 and 2011 and the years ended December 31, 2011, 2010 and 2009, respectively. 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

73


Table of Contents

by lower vehicle costs and lower transaction costs at a lower 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. For the nine months ended September 30, 2012 and the four months ended December 31, 2011 (the period it was owned by Hertz), Donlen had an average of approximately 146,900 and 137,000 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 administration of preventive maintenance, advisory services, and fuel and accident management along with other complementary services. 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.

        On November 19, 2012, Hertz completed the Dollar Thrifty Acquisition. Dollar Thrifty, through its Dollar Rent A Car ("Dollar") and Thrifty Car Rental ("Thrifty") brands, has been serving value-conscious leisure and business travelers since 1950. Dollar Thrifty maintains a strong presence in domestic leisure travel in many of the top U.S. and Canadian airport markets, and also derives a portion of its revenue from international travelers to the United States under contracts with various international tour operators. As of September 30, 2012, Dollar Thrifty had approximately 290 corporate locations in the United States and Canada, with approximately 5,800 employees located mainly in North America. In addition to its corporate operations, Dollar Thrifty had approximately 1,300 franchise locations in 82 countries. For the year ended December 31, 2011 and the nine months ended September 30, 2012, Dollar Thrifty had total revenues of approximately $1.5 billion and $1.2 billion, respectively.

        As of September 30, 2012, our worldwide car rental operations had a total of approximately 8,800 corporate and licensee locations in approximately 150 countries in North America, Europe, Latin America, Asia, Australia, Africa, the Middle East and New Zealand.


Equipment Rental

        HERC experienced higher rental volumes and pricing for the nine months ended September 30, 2012 compared to the prior year period as the industry continued its recovery in North America. We continued to see growth in our specialty services such as Pump & Power, Industrial Plant Services and Hertz Entertainment Services. Additionally, there continue to be opportunities for the remainder of 2012 as the uncertain economic outlook makes rental solutions attractive to customers.

        On January 19, 2012, HERC acquired Cinelease Holdings, LLC, or "Cinelease," a U.S. market leader in lighting and grip rentals to the television industry.

        As of September 30, 2012, HERC had a total of approximately 340 branches in the U.S., Canada, France, Spain, China and Saudi Arabia.

74


Table of Contents


Seasonality

        Our car rental and equipment rental operations are seasonal businesses, with decreased levels of business in the winter months and heightened activity during the spring and summer. We have the ability to dynamically manage fleet capacity, the most significant portion of our cost structure, to meet market demand. For instance, to accommodate increased demand, we increase our available fleet and staff during the second and third quarters of the year. As business demand declines, fleet and staff are decreased accordingly. A number of our other major operating costs, including airport concession fees, commissions and vehicle liability expenses, are directly related to revenues or transaction volumes. In addition, our management expects to utilize enhanced process improvements, including efficiency initiatives and the use of our information technology systems, to help manage our variable costs. Approximately two-thirds of our typical annual operating costs represent variable costs, while the remaining one-third is fixed or semi-fixed. We also maintain a flexible workforce, with a significant number of part time and seasonal workers. However, certain operating expenses, including rent, insurance, and administrative overhead, remain fixed and cannot be adjusted for seasonal demand. Revenues related to our fleet leasing and management services are generally not seasonal.


Restructuring

        As part of our ongoing effort to implement our strategy of reducing operating costs, we have evaluated our workforce and operations and made adjustments, including headcount reductions and business process reengineering resulting in optimized work flow at rental locations and maintenance facilities as well as streamlined our back-office operations and evaluated potential outsourcing opportunities. When we made adjustments to our workforce and operations, we incurred incremental expenses that delay the benefit of a more efficient workforce and operating structure, but we believe that increased operating efficiency and reduced costs associated with the operation of our business are important to our long-term competitiveness.

        During 2007 through 2011, 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 8,960 employees.

        During the first, second and third quarters of 2012, 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, 280 employees and 240 employees, respectively. For the nine months ended September 30, 2012 and 2011 and the years ended December 31, 2011, 2010 and 2009, our consolidated statements of operations include restructuring charges relating to various initiatives of $27.0 million, $40.4 million, $56.4 million, $54.7 million and $106.8 million, respectively.

        From January 1, 2007 through September 30, 2012, we incurred $557.5 million ($273.5 million for our car rental segment, $229.5 million for our equipment rental segment and $54.5 million of other) of restructuring charges.

        Additional efficiency and cost saving initiatives are being developed; however, we presently do not have firm plans or estimates of any related expenses.

        See Note 12 to both our audited annual consolidated financial statements and our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.

75


Table of Contents


Critical Accounting Policies and Estimates

        Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or "GAAP." The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts in our financial statements and accompanying notes.

        We believe the following critical accounting policies affect the more significant judgments and estimates used in the preparation of our financial statements and changes in these judgments and estimates may impact our future results of operations and financial condition. For additional discussion of our accounting policies, see Note 2 to both our audited annual consolidated financial statements and our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.

Revenue Earning Equipment

        Our principal assets are revenue earning equipment, which represented approximately 63% and 57%, respectively, of our total assets as of September 30, 2012 and December 31, 2011. Revenue earning equipment consists of vehicles utilized in our car rental operations and equipment utilized in our equipment rental operations. For the nine months ended September 30, 2012 and the year ended December 31, 2011, 35% and 48%, respectively, of the vehicles purchased for our combined U.S. and international car rental fleets were subject to repurchase by automobile manufacturers under contractual repurchase and guaranteed depreciation programs, subject to certain manufacturers' car condition and mileage requirements, at a specific price during a specified time period. These programs limit our residual risk with respect to vehicles purchased under these programs. For all other vehicles, as well as equipment acquired by our equipment rental business, we use historical experience and monitor market conditions to set depreciation rates. Generally, when revenue earning equipment is acquired, we estimate the period that we will hold the asset, primarily based on historical measures of the amount of rental activity (e.g., automobile mileage and equipment usage) and the targeted age of equipment at the time of disposal. We also estimate the residual value of the applicable revenue earning equipment at the expected time of disposal. The residual values for rental vehicles are affected by many factors, including make, model and options, age, physical condition, mileage, sale location, time of the year and channel of disposition (e.g., auction, retail, dealer direct). The residual value for rental equipment is affected by factors which include equipment age and amount of usage. Depreciation is recorded on a straight-line basis over the estimated holding period. Depreciation rates are reviewed on a quarterly basis based on management's ongoing assessment of present and estimated future market conditions, their effect on residual values at the time of disposal and the estimated holding periods. Market conditions for used vehicle and equipment sales can also be affected by external factors such as the economy, natural disasters, fuel prices and incentives offered by manufacturers of new cars. These key factors are considered when estimating future residual values and assessing depreciation rates. As a result of this ongoing assessment, we make periodic adjustments to depreciation rates of revenue earning equipment in response to changing market conditions. Upon disposal of revenue earning equipment, depreciation expense is adjusted for the difference between the net proceeds received and the remaining net book value.

        Within our Donlen subsidiary, revenue earning equipment is under longer term lease agreements with our customers. These leases contain provisions whereby we have a contracted residual value guaranteed to us by the lessee, such that we do not experience any gains or losses on the disposal of these vehicles. Therefore depreciation rates on these vehicles are not adjusted at any point in time per the associated lease contract.

76


Table of Contents

        See Note 7 to our audited annual consolidated financial statements and Note 6 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.

Public Liability and Property Damage

        The obligation for public liability and property damage on self-insured U.S. and international vehicles and equipment represents an estimate for both reported accident claims not yet paid, and claims incurred but not yet reported. The related liabilities are recorded on a non-discounted basis. Reserve requirements are based on actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses, premiums and administrative costs. The adequacy of the liability 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. Our actual results as compared to our estimates have historically resulted in relatively minor adjustments to our recorded liability.

Pensions

        Our employee pension costs and obligations are dependent on our assumptions used by actuaries in calculating such amounts. These assumptions include discount rates, salary growth, long-term return on plan assets, retirement rates, mortality rates and other factors. Actual results that differ from our assumptions are accumulated and amortized over future periods and, therefore, generally affect our recognized expense in such future periods. While we believe that the assumptions used are appropriate, significant differences in actual experience or significant changes in assumptions would affect our pension costs and obligations. The various employee-related actuarial assumptions (e.g., retirement rates, mortality rates, salary growth) used in determining pension costs and plan liabilities are reviewed periodically by management, assisted by the enrolled actuary, and updated as warranted. The discount rate used to value the pension liabilities and related expenses and the expected rate of return on plan assets are the two most significant assumptions impacting pension expense. The discount rate used is a market-based spot rate as of the valuation date. For the expected return on assets assumption, we use a forward-looking rate that is based on the expected return for each asset class (including the value added by active investment management), weighted by the target asset allocation. The past annualized long-term performance of the plans' assets has generally been in line with the long-term rate of return assumption. See Note 5 to our audited annual consolidated financial statements and Note 8 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus. For a discussion of the risks associated with our pension plans, see the section of this prospectus entitled "Risk Factors—Risks Related to Our Business—We could face significant withdrawal liability if we withdraw from participation in one or more multiemployer pension plans in which we participate and at least one multiemployer plan in which we participate is reported to have significant underfunded liabilities."

Goodwill and Other Intangible Assets

        We review goodwill for impairment whenever events or changes in circumstances indicate that the carrying amount of the goodwill may not be recoverable, and also review goodwill annually. Goodwill impairment is deemed to exist if the carrying value of goodwill exceeds its fair value. Goodwill must be tested at least annually using a two-step process. The first step is to identify any potential impairment by comparing the carrying value of the reporting unit to its fair value. A reporting unit is an operating segment or a business one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by segment management. However, components are aggregated as a single reporting unit if they have similar economic characteristics. We estimate the fair value of our reporting units using a discounted cash flow methodology. The key

77


Table of Contents

assumptions used in the discounted cash flow valuation model for impairment testing include discount rates, growth rates, cash flow projections and terminal value rates. Discount rates are set by using the Weighted Average Cost of Capital, or "WACC," methodology. The WACC methodology considers market and industry data as well as Company-specific risk factors for each reporting unit in determining the appropriate discount rates to be used. The discount rate utilized for each reporting unit is indicative of the return an investor would expect to receive for investing in such a business. The cash flows represent management's most recent planning assumptions. These assumptions are based on a combination of industry outlooks, views on general economic conditions, our expected pricing plans and expected future savings generated by our past restructuring activities. Terminal value rate determination follows common methodology of capturing the present value of perpetual cash flow estimates beyond the last projected period assuming a constant WACC and low long-term growth rates. If a potential impairment is identified, the second step is to compare the implied fair value of goodwill with its carrying amount to measure the impairment loss. A significant decline in the projected cash flows or a change in the WACC used to determine fair value could result in a future goodwill impairment charge.

        In the fourth quarter 2011, we performed our annual impairment analysis based upon market data as of October 1, 2011 and concluded that there was no impairment related to our goodwill and our other indefinite-lived intangible assets. At October 1, 2011, we had five reporting units, which were the same as our operating segments: U.S. Car Rental, Europe Car Rental, Other International Car Rental, Donlen and Worldwide Equipment Rental.

        We performed the impairment analyses for our reporting units, using our business and long-term strategic plans, revised to reflect the current economic conditions. Our weighted-average cost of capital used in the discounted cash flow model was calculated based upon the fair value of our debt and our stock price with a debt to equity ratio comparable to our industry. The total fair value of our reporting units was then compared to our market capitalization to ensure their reasonableness.

        We re-evaluate the estimated useful lives of our intangible assets annually or as circumstances change. Those intangible assets considered to have indefinite useful lives, including our trade name, are evaluated for impairment on an annual basis, by comparing the fair value of the intangible assets to their carrying value. Intangible assets with finite useful lives are amortized over their respective estimated useful lives. In addition, whenever events or changes in circumstances indicate that the carrying value of intangible assets might not be recoverable, we will perform an impairment review.

        The valuation of our indefinite-lived assets utilized the relief from royalty method, which incorporates cash flows and discount rates comparable to those discussed above. We also considered the excess earnings as a percentage of revenues to ensure their reasonableness. Our analysis supported our conclusion that an impairment did not exist.

        See Note 3 to our audited annual consolidated financial statements and Note 4 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.

Derivatives

        We periodically enter into cash flow and other hedging transactions to specifically hedge exposure to various risks related to interest rates, fuel prices and foreign currency rates. Derivative financial instruments are viewed as risk management tools and have not been used for speculative or trading purposes. All derivatives are recorded on the balance sheet as either assets or liabilities measured at their fair value. The effective portion of changes in fair value of derivatives designated as cash flow hedging instruments is recorded as a component of other comprehensive income. The ineffective portion is recognized currently in earnings within the same line item as the hedged item, based upon the nature of the hedged item. For derivative instruments that are not part of a qualified hedging relationship, the changes in their fair value are recognized currently in earnings. The valuation methods

78


Table of Contents

used to mark these to market are either market quotes (for fuel swaps and foreign exchange instruments) or a discounted cash flow method (for interest rate swaps and interest rate caps). The key inputs for the discounted cash flow method are the current yield curve and the credit default swap spread. These valuations are subject to change based on movements in items such as the London inter-bank offered rate, or "LIBOR," our credit worthiness and unleaded gasoline and diesel fuel prices.

Income Taxes

        Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Subsequent changes to enacted tax rates and changes to the global mix of earnings will result in changes to the tax rates used to calculate deferred taxes and any related valuation allowances. Provisions are not made for income taxes on undistributed earnings of international subsidiaries that are intended to be indefinitely reinvested outside the United States or are expected to be remitted free of taxes. Future distributions, if any, from these international subsidiaries to the United States or changes in U.S. tax rules may require recording a tax on these amounts. We have recorded a deferred tax asset for unutilized net operating loss carryforwards in various tax jurisdictions. Upon utilization, the taxing authorities may examine the positions that led to the generations of those net operating losses. If the utilization of any of those losses are disallowed a deferred tax liability may have to be recorded.

        See Note 8 to our audited annual consolidated financial statements and Note 5 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.

Stock-Based Compensation

        The cost of employee services received in exchange for an award of equity instruments is based on the grant-date fair value of the award. That cost is recognized over the period during which the employee is required to provide service in exchange for the award. We estimated the fair value of options issued at the date of grant using a Black-Scholes option-pricing model, which includes assumptions related to volatility, expected term, dividend yield, risk-free interest rate and forfeiture rate. These factors combined with the stock price on the date of grant result in a fixed expense which is recorded on a straight-line basis over the vesting period. The key factors used in the valuation process, other than the forfeiture rate and volatility, remained unchanged from the date of grant. Because the stock of Hertz Holdings became publicly traded in November 2006 and had a short trading history, it was not practicable for us to estimate the expected volatility of Hertz Holdings' share price, or a peer company share price, because there was not sufficient historical information about past volatility prior to 2012. Therefore, prior to 2012 we used the calculated value method, substituting the historical volatility of an appropriate industry sector index for the expected volatility of Hertz Holdings' common stock price as an assumption in the valuation model. We selected the Dow Jones Specialized Consumer Services sub-sector within the consumer services industry, and we used the U.S. large capitalization component, which includes the top 70% of the index universe (by market value). The calculation of the historical volatility of the index was made using the daily historical closing values of the index for the preceding 6.25 years, because that is the expected term of the options using the simplified approach.

        Beginning in 2012, we have determined that there is now sufficient historical information available to estimate the expected volatility of Hertz Holdings' stock price. Therefore for equity awards made in 2012 the assumed volatility for Hertz Holdings' stock price is based on a weighted average combining

79


Table of Contents

implied volatility and the average of our peer's most recent 5.79-year volatility and mean reversion volatility. The assumed dividend yield is zero. The risk-free interest rate is the implied zero-coupon yield for U.S. Treasury securities having a maturity approximately equal to the expected term of the options, as of the grant dates. The non-cash stock-based compensation expense associated with the Hertz Global Holdings, Inc. Stock Incentive Plan, or the "Stock Incentive Plan," the Hertz Global Holdings, Inc. Director Stock Incentive Plan, or the "Director Plan," and the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan, or the "Omnibus Plan," are pushed down from Hertz Holdings and recorded on the books at the Hertz level. See Note 6 to our audited annual consolidated financial statements and Note 9 to our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.

Management's Report on Internal Control Over Financial Reporting

        Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act, as amended. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2011. The assessment was based on criteria established in the framework Internal Control—Integrated Framework , issued by the Committee of Sponsoring Organizations of the Treadway Commission. We have excluded from our evaluation the internal controls over financial reporting of Donlen Corporation, which was acquired on September 1, 2011. The total assets and total revenues of the excluded business represented 7.7% and 1.7%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2011. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2011. PricewaterhouseCoopers LLP, our independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting, which appears elsewhere in this prospectus.


Recent Accounting Pronouncements

        For a discussion of recent accounting pronouncements, see Note 2 to both our audited annual consolidated financial statements and our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.

80


Table of Contents


Results of Operations

        We have revised our consolidated statements of operations as a result of adjustments relating to additional telecommunication charges (direct operating expenses) and depreciation of revenue earning equipment and lease charges. See Note 2 to both our audited annual consolidated financial statements and our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus.

        In the following discussion, comparisons are made between the nine months ended September 30, 2012 and 2011 and the years ended December 31, 2011, 2010 and 2009. The following tables set forth for each of the periods indicated, the percentage of total revenues represented by the various line items in our consolidated statements of operations (in millions of dollars):

 
   
   
  Percentage of Revenues  
 
  Nine Months Ended
September 30,
  Nine Months Ended
September 30,
 
 
  2012   2011   2012   2011  

Revenues:

                         

Car rental

  $ 5,578.5   $ 5,272.6     83.2 %   83.9 %

Equipment rental

    998.5     891.3     14.9     14.2  

Other

    125.3     120.7     1.9     1.9  
                   

Total revenues

    6,702.3     6,284.6     100.0     100.0  
                   

Expenses:

                         

Direct operating

    3,545.2     3,508.6     52.9     55.8  

Depreciation of revenue earning equipment and lease charges

    1,594.4     1,379.0     23.8     21.9  

Selling, general and administrative

    615.3     575.2     9.2     9.2  

Interest expense

    430.5     495.2     6.4     7.9  

Interest income

    (2.3 )   (4.6 )       (0.1 )

Other (income) expense, net

    (10.5 )   62.7     (0.2 )   1.0  
                   

Total expenses

    6,172.6     6,016.1     92.1     95.7  
                   

Income before income taxes

    529.7     268.5     7.9     4.3  

Provision for taxes on income

    (225.7 )   (102.3 )   (3.4 )   (1.6 )
                   

Net income

    304.0     166.2     4.5     2.7  

Less: Net income attributable to noncontrolling interest

        (14.5 )       (0.3 )
                   

Net income attributable to The Hertz Corporation and Subsidiaries' common stockholder

  $ 304.0   $ 151.7     4.5 %   2.4 %
                   

81


Table of Contents


 
   
   
   
  Percentage of Revenues  
 
  Years Ended December 31,   Years Ended December 31,  
 
  2011   2010   2009   2011   2010   2009  

Revenues:

                                     

Car rental

  $ 6,929.6   $ 6,355.2   $ 5,872.9     83.5 %   84.0 %   82.7 %

Equipment rental

    1,208.8     1,069.8     1,110.2     14.6     14.2     15.6  

Other

    160.0     137.5     118.4     1.9     1.8     1.7  
                           

Total revenues

    8,298.4     7,562.5     7,101.5     100.0     100.0     100.0  
                           

Expenses:

                                     

Direct operating

    4,566.4     4,283.4     4,086.8     55.0     56.7     57.6  

Depreciation of revenue earning equipment and lease charges

    1,905.7     1,868.1     1,933.8     23.0     24.7     27.2  

Selling, general and administrative

    745.1     664.5     641.8     9.0     8.8     9.0  

Interest expense

    650.3     726.5     653.7     7.8     9.6     9.2  

Interest income

    (5.5 )   (12.3 )   (16.0 )   (0.1 )   (0.2 )   (0.2 )

Other (income) expense, net

    62.5         (48.5 )   0.8         (0.7 )
                           

Total expenses

    7,924.5     7,530.2     7,251.6     95.5     99.6     102.1  
                           

Income (loss) before income taxes

    373.9     32.3     (150.1 )   4.5     0.4     (2.1 )

(Provision) benefit for taxes on income

    (143.8 )   (33.3 )   50.8     (1.8 )   (0.4 )   0.7  
                           

Net income (loss)

    230.1     (1.0 )   (99.3 )   2.7         (1.4 )

Noncontrolling interest

    (19.6 )   (17.4 )   (14.7 )   (0.2 )   (0.2 )   (0.2 )
                           

Net income (loss) attributable to The Hertz Corporation and Subsidiaries' common stockholder

  $ 210.5   $ (18.4 ) $ (114.0 )   2.5 %   (0.2 )%   (1.6 )%
                           

82


Table of Contents

        The following table sets forth certain of our selected car rental, equipment rental and other operating data for each of the periods indicated:

 
  Nine Months Ended, or
as of September 30,
  Years Ended, or as of December 31,  
 
  2012   2011   2011   2010   2009  

Selected Car Rental Operating Data:

                               

Worldwide number of transactions (in thousands)

    21,608     20,583     27,095     25,970     24,549  

Domestic (Hertz)

    16,131     15,101     19,903     19,101     17,791  

International (Hertz)

    5,477     5,482     7,192     6,869     6,758  

Worldwide transaction days (in thousands)(a)

    110,538     104,707     137,301     127,159     118,459  

Domestic (Hertz)

    77,214     71,162     93,741     86,422     79,644  

International (Hertz)

    33,324     33,545     43,560     40,737     38,815  

Worldwide rental rate revenue per transaction day(b)

  $ 40.34   $ 41.70   $ 41.62   $ 43.24   $ 43.14  

Domestic (Hertz)

  $ 39.31   $ 40.70   $ 40.30   $ 42.16   $ 42.20  

International (Hertz)

  $ 42.73   $ 43.81   $ 44.47   $ 45.52   $ 45.07  

Worldwide average number of cars during the period

    651,400     613,500     615,600     445,200     413,500  

Domestic (Hertz company-operated)

    347,300     325,500     321,700     297,900     274,000  

International (Hertz company-operated)

    157,200     158,900     156,900     147,300     139,500  

Donlen (under lease and maintenance)

    146,900     129,100     137,000     N/A     N/A  

Adjusted pre-tax income (in millions of dollars)(c)

  $ 797.8   $ 678.8   $ 850.2   $ 641.9   $ 459.2  

Worldwide revenue earning equipment, net (in millions of dollars)

  $ 10,036.4   $ 9,859.4   $ 8,318.7   $ 7,220.1   $ 7,003.6  

Selected Worldwide Equipment Rental Operating Data:

                               

Rental and rental related revenue (in millions of dollars)(d)

  $ 908.5   $ 798.0   $ 1,094.4   $ 975.9   $ 1,020.6  

Same store revenue growth (decline), including growth initiatives(e)

    8.1 %   10.1 %   9.1 %   (5.4 )%   (29.1 )%

Average acquisition cost of rental equipment operated during the period (in millions of dollars)

  $ 3,017.9   $ 2,791.7   $ 2,804.8   $ 2,732.6   $ 2,874.7  

Adjusted pre-tax income (in millions of dollars)(c)

  $ 144.6   $ 99.5   $ 161.6   $ 78.0   $ 76.4  

Revenue earning equipment, net (in millions of dollars)

  $ 2,184.8   $ 1,779.1   $ 1,786.7   $ 1,703.7   $ 1,832.3  

(a)
Transaction days represents 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

83


Table of Contents

    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 our car rental segment revenues to our rental rate revenue and rental rate revenue per transaction day for the three months ended September 30, 2012 and 2011 (based on December 31, 2011 foreign exchange rates) and for the years ended December 31, 2011, 2010 and 2009 (based on December 31, 2010 foreign exchange rates) (in millions of dollars, except as noted):

   
  Nine Months Ended September 30,   Years Ended December 31,  
   
  2012   2011   2011   2010   2009  
 

Car rental segment revenues

  $ 5,700.4   $ 5,388.3   $ 7,083.5   $ 6,486.2   $ 5,979.0  
 

Non-rental rate revenue

    (1,242.0 )   (887.8 )   (1,265.5 )   (1,029.6 )   (903.1 )
 

Foreign currency adjustment

    1.0     (134.5 )   (103.0 )   41.3     (34.3 )
                         
 

Rental rate revenue

  $ 4,459.4   $ 4,366.0   $ 5,715.0   $ 5,497.9   $ 5,110.2  
                         
 

Transaction days (in thousands)

    110,538     104,707     137,301     127,159     118,459  
 

Rental rate revenue per transaction day (in whole dollars)

  $ 40.34   $ 41.70   $ 41.62   $ 43.24   $ 43.14  
(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

84


Table of Contents

    reportable segments to adjusted pre-tax income and reconciliation to consolidated amounts are presented below (in millions of dollars):

   
  Nine Months Ended September 30,   Years Ended December 31,  
   
  2012   2011   2011   2010   2009  
 

Adjusted pre-tax income

                               
 

Car rental

  $ 797.8   $ 678.8   $ 850.2   $ 641.9   $ 459.2  
 

Equipment rental

    144.6     99.5     161.6     78.0     76.4  
                         
 

Total reportable segments

    942.4     778.3     1,011.8     719.9     535.6  
 

Adjustments:

                               
 

Other reconciling items(1)

    (235.6 )   (244.1 )   (306.2 )   (347.9 )   (327.9 )
 

Purchase accounting(2)

    (76.9 )   (62.2 )   (87.6 )   (90.3 )   (90.3 )
 

Non-cash debt charges(3)

    (46.1 )   (89.9 )   (105.9 )   (160.6 )   (159.8 )
 

Restructuring charges

    (27.0 )   (40.4 )   (56.4 )   (54.7 )   (106.8 )
 

Restructuring related charges(4)

    (7.6 )   (6.4 )   (9.8 )   (13.2 )   (46.5 )
 

Management transition costs

        (4.0 )   (4.0 )       (1.0 )
 

Derivative gains (losses)

    0.1     0.1     0.1     (3.2 )   2.4  
 

Gain on debt buyback(5)

                    48.5  
 

Third-party bankruptcy accrual(6)

                    (4.3 )
 

Acquisition related costs

    (19.6 )   (13.6 )   (18.8 )   (17.7 )    
 

Pension adjustment(7)

        13.1     13.1          
 

Premiums paid on debt(8)

        (62.4 )   (62.4 )        
                         
 

Income (loss) before income taxes

  $ 529.7   $ 268.5   $ 373.9   $ 32.3   $ (150.1 )
                         

    (1)
    Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities such as our third-party claim management services.

    (2)
    Represents the purchase accounting effects of the Sponsor 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. For the years ended December 31, 2010 and 2009, also includes $68.9 million and $74.6 million, respectively, associated with the amortization of amounts pertaining to the de-designation of the Hertz Vehicle Financing LLC, or "HVF," interest rate swaps as effective hedging instruments.

    (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 (net of transaction costs) recorded in connection with the buyback of certain portions of our 7.875% Senior Notes due 2014, 8.875% Senior Notes due 2014 and 10.5% Senior Subordinated Notes due 2016.

85


Table of Contents

    (6)
    Represents an allowance for uncollectible program car receivables related to a bankrupt European dealer affiliated with a U.S. car manufacturer.

    (7)
    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.

    (8)
    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 revenue to our equipment rental and rental related revenue for the nine months ended September 30, 2012 and 2011 (based on December 31, 2011 foreign exchange rates) and for the years ended December 31, 2011, 2010 and 2009 (based on December 31, 2010 foreign exchange rates) (in millions of dollars):

   
  Nine Months Ended September 30,   Years Ended December 31,  
   
  2012   2011   2011   2010   2009  
 

Equipment rental segment revenues

  $ 1,000.1   $ 891.6   $ 1,209.5   $ 1,070.1   $ 1,110.9  
 

Equipment sales and other revenue

    (88.3 )   (78.8 )   (106.2 )   (100.1 )   (109.8 )
 

Foreign currency adju