UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-K

ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission File Number 001-07541

THE HERTZ CORPORATION

(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

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)Securities registered pursuant to Section 12(b) of the Act: None


Securities registered pursuant to Section 12(g) of the Act: None

The Registrant meets the conditions as set forth in General Instructions I(1)(a) and (b) of Form 10-K and is therefore
filing this Form with the reduced disclosure format as permitted.

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o    No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o    No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was
required to submit and post such files). Yes o    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes o    No ý

No voting or non-voting common equity of the registrant was held by non-affiliates of the registrant as of June 30, 2009. As of March 1,
2010, all of the common stock of the registrant is owned by its affiliate, Hertz Investors, Inc. As of March 1, 2010, 100 shares of the registrant's common stock (par value $0.01) were
outstanding.

Documents incorporated by reference: None



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THE HERTZ CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

PageINTRODUCTORY NOTE


1PART IITEM 1.

BUSINESS


3ITEM 1A.

RISK FACTORS


27ITEM 1B.

UNRESOLVED STAFF COMMENTS


41ITEM 2.

PROPERTIES


42ITEM 3.

LEGAL PROCEEDINGS


42ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


45PART IIITEM 5.

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


46ITEM 6.

SELECTED FINANCIAL DATA


46ITEM 7.

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


49ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


85ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


86REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


86CONSOLIDATED BALANCE SHEETS


87CONSOLIDATED STATEMENTS OF OPERATIONS


88CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


89CONSOLIDATED STATEMENTS OF CASH FLOWS


90NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


91ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


168ITEM 9A.

CONTROLS AND PROCEDURES


168ITEM 9B.

OTHER INFORMATION


168PART IIIITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


169ITEM 11.

EXECUTIVE COMPENSATION


169ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


169ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE


169ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES


169PART IVITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES


170SIGNATURES


192EXHIBIT INDEX


194


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INTRODUCTORY NOTE

Unless the context otherwise requires, in this Annual Report on Form 10-K, or "Annual Report,"
(i) "we," "us," "our," "Hertz," or the "Company," mean The Hertz Corporation Hertz Holdings' primary operating company and a direct wholly-owned subsidiary of Hertz Investors, Inc.,
which is wholly-owned by Hertz Holdings, and its consolidated subsidiaries, (ii) "Hertz Holdings" means Hertz Global Holdings, Inc., our top-level holding company,
(iii) "HERC" means Hertz Equipment Rental Corporation, our wholly-owned equipment rental subsidiary, together with our various other wholly-owned international subsidiaries that conduct our
industrial, construction and material handling equipment rental business, (iv) "cars" means cars and light trucks (including sport utility vehicles and, outside North America, light commercial
vehicles), (v) "program cars" means cars purchased by car rental companies under repurchase or guaranteed depreciation programs with car manufacturers, (vi) "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 (vii) "equipment" means industrial,
construction and material handling equipment.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained In this Annual Report and in reports we subsequently file with the SEC on
Form 10-Q and file or furnish on Form 8-K, and in related comments by our management, 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, that may be revised or supplemented in subsequent
reports on SEC Forms 10-K, 10-Q and 8-K. Some important factors that could affect our actual results include among others those that may be disclosed from
time to time in subsequent reports filed with the SEC, those described under "Risk Factors" set forth in Item 1A of this Annual Report, and the following, which were derived in part from the
risks set forth in Item 1A of this Annual Report:



1

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You should not place undue reliance on forward-looking statements. 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.

2

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PART I

ITEM 1.    BUSINESS

Our Company

We own what we believe is the largest worldwide airport general use car rental brand and one of the largest equipment rental businesses in the United
States and Canada combined, both based on revenues. Our Hertz brand name is one of the most recognized in the world, signifying leadership in quality rental services and products. In our car rental
business segment, we and our independent licensees and associates accept reservations for car rentals at approximately 8,100 locations in approximately 145 countries. We are the only car rental
company that has an extensive network of company-operated rental locations both in the United States and in all major European markets. We maintain the leading airport car rental brand market share,
by overall reported revenues, in the United States and at the 78 major airports in Europe where we have company-operated locations and 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 322 branches in the United States, Canada, France, Spain and China, 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 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 16 of those
20 years.

The
car and equipment rental industries are significantly influenced by general economic conditions. The car rental industry is also significantly influenced by developments in the travel industry,
and, particularly, in airline passenger traffic while the equipment rental segment is being impacted by the difficult economic and business environment as investment in commercial construction and the
industrial markets slow. The United States and international markets are currently experiencing a significant decline in economic activities, including a tightening of credit markets, reduced airline
passenger traffic, reduced consumer spending and volatile fuel prices. During 2008 and 2009, this resulted in a rapid decline in the volume of car rental and equipment rental transactions, soft
industry pricing and lower residual values for the non-program cars that we sold. See "Item 7Management's Discussion and Analysis of Financial Condition and Results of
Operations" in this Annual Report.

Corporate History

Hertz Holdings was incorporated in Delaware in 2005 to serve as the top-level holding company for the consolidated Hertz business. Hertz
was incorporated in Delaware in 1967. Hertz is 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. Ford Motor Company, "Ford," acquired an ownership interest in Hertz in 1987. Prior to this,
Hertz was a subsidiary of UAL Corporation (formerly Allegis Corporation), which acquired our outstanding capital stock from RCA Corporation in 1985.

The Acquisition

On December 21, 2005, investment funds associated with or designated by:



3

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ITEM 1.    BUSINESS (Continued)

or
collectively, the "Sponsors," acquired all of our common stock from Ford Holdings LLC, or "Ford Holdings," for aggregate consideration of $4,379 million in cash, debt refinanced or
assumed of $10,116 million and transaction fees and expenses of $447 million.

In
January 2009, Bank of America Corporation, or "Bank of America," acquired Merrill Lynch & Co., Inc., the parent company of Merrill Lynch Global Private Equity, or "MLGPE."
Accordingly, Bank of America is now an indirect beneficial owner of Hertz Holdings' common stock held by MLGPE and certain of its affiliates.

Common Stock Offerings

In November 2006, Hertz Holdings completed the initial public offering of 88,235,000 shares of its common stock. In June 2007, the Sponsors completed
a secondary public offering of 51,750,000 shares of their Hertz Holdings common stock. In January 2009, Bank of America Corporation, or "Bank of America," acquired Merrill
Lynch & Co., Inc., the parent company of MLGPE. Accordingly, Bank of America is now an indirect beneficial owner of Hertz Holdings' common stock held by MLGPE and certain of its
affiliates. In May and June 2009, Hertz Holdings completed a follow-on public offering of 52,900,000 shares of its common stock at a price of $6.50 per share with proceeds before
underwriting discounts and offering expenses of approximately $343.9 million, or the "Common Stock Public Offering."

In
addition, in May 2009 Hertz Holdings entered into subscription agreements with investment funds affiliated with CD&R and Carlyle to purchase an additional 32,101,182 shares of its common stock at a
price of $6.23 per share (the same price per share paid to us by the underwriters in the Common Stock Public Offering) with proceeds to Hertz Holdings of approximately $200.0 million, or the
"Private Offering." The Private Offering closed on July 7, 2009 and the 32,101,182 shares of Hertz Holdings' common stock were issued to the CD&R and Carlyle affiliated investment funds on the
same date. Giving effect to the Common Stock Public Offering and the Private Offering, the Sponsors' ownership percentage in Hertz Holdings is approximately 51%.

In
May and June 2009, Hertz Holdings also completed a public offering of an aggregate principal amount of $474,755,000 of 5.25% convertible senior notes due 2014, or the "Convertible Debt Public
Offering."

Hertz
Holdings used the net proceeds from the Common Stock Public Offering, the Private Offering and the Convertible Debt Public Offering, collectively the "2009 Hertz Holdings Offerings," to provide
us a capital investment which we used to increase our liquidity and for general corporate purposes, including the repayment of principal amounts with respect to debt under the fleet financing
facilities of certain of our consolidated subsidiaries.

Our Markets

We operate in the global car rental industry and in the equipment rental industry.

Worldwide Car Rental

We believe that the global car rental industry exceeds $35 billion in annual revenues. According to Auto Rental News, car rental revenues in
the United States are estimated to be approximately $21 billion and have declined in 2009 by 4.8%. We believe car rental revenues in Europe account for approximately $14 billion in
annual revenues, with the airport portion of the industry comprising approximately 40% of the total. Within Europe, the largest markets are France, Germany, Italy, the United Kingdom and Spain. We
believe total rental revenues for the car rental industry in Europe in 2009 were approximately

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ITEM 1.    BUSINESS (Continued)

$10 billion
in nine countriesFrance, Germany, Italy, the United Kingdom, Spain, the Netherlands, Switzerland, Belgium and Luxembourgwhere we have company-operated
rental locations and approximately $2.4 billion in eight other countriesGreece, Ireland, Portugal, Sweden, Norway, Denmark, Austria and Finlandwhere our 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 2009. This portion
of the market is significantly influenced by developments in the travel industry and particularly in airline passenger traffic, or "enplanements." We believe domestic enplanements decreased in 2009 by
approximately 8.0% and are expected to increase by 2.0% in 2010. The International Air Transport Association, or "IATA," projected in December 2009 that annual global enplanements would increase 5.2%
in 2010.

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.

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, to be approximately $29 billion in annual revenues for 2009, 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 grew at a 7.5% compound annual growth rate between 1991 and 2009. Other market data indicates that the
equipment rental industries in France, Spain and China generate roughly $4 billion, less than $2 billion and approximately $1 billion in annual revenues, 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 decreased at an annual rate of 30% in 2009 and is projected to decrease at an annual rate of 2% in 2010.
We also believe that rental equipment accounted for approximately 40% of all equipment sold into the U.S. construction industry in 2008, up from approximately 5% to 10% in 1991. 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 2012.

Our Business Segments

Our business consists of two reportable segments, car rental and equipment rental. General corporate expenses, certain interest expense (including
net interest on corporate debt), as well as other business activities, such as 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. For the year ended December 31, 2009, we derived approximately 67% of our worldwide car rental revenues from airport locations. 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.

5

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ITEM 1.    BUSINESS (Continued)

Equipment
Rental: We believe, based on an article in Rental Equipment Register published in May 2009, that HERC 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.

Set
forth below are charts showing revenues by reportable segment, and revenues by geographic area, both for the year ended December 31, 2009 and revenue earning equipment at net book value as
of December 31, 2009 (the majority of our international operations are in Europe).

Revenues by Segment for
Year Ended December 31, 2009(1)
$7.1 billionGRAPHICRevenues by Geographic Area for
Year Ended December 31, 2009
$7.1 billion

Revenue Earning Equipment at net book
value as of December 31, 2009
$8.85 billionGRAPHIC

GRAPHIC


(1)Car
rental segment revenue includes fees and certain cost reimbursements from licensees. See Note 9 to the Notes to our consolidated financial
statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."


For further information on our business segments, including financial information for the years ended December 31, 2009, 2008 and 2007, see Note 9
to the Notes to our consolidated financial statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

6

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ITEM 1.    BUSINESS (Continued)

Worldwide Car Rental

Operations

We rent a wide variety of makes and models of cars. We generally accept reservations only for a class of vehicles, although we accept reservations
for specific makes and models of vehicles in our Prestige Collection national-scale luxury rental program, our Hertz Fun Collection experiential rental program, our Green Collection environmentally
friendly rental program and a limited number of models in high-volume, leisure-oriented destinations. We rent cars on an hourly (in select markets), daily, weekend, weekly, monthly or
multi-month basis, with rental charges computed on a limited or unlimited mileage rate, or on a time rate plus a mileage charge. Our rates vary at different locations depending on local market
conditions and other competitive and cost factors. While cars are usually returned to the locations from which they are rented, we also allow one-way rentals from and to certain locations.
In addition to car rentals and licensee fees, we generate revenues from reimbursements by customers of airport concession fees and vehicle licensing costs, fueling charges, and charges for ancillary
customer products and services such as supplemental equipment (child seats and ski racks), loss or collision damage waiver, theft protection, liability and personal accident/effects insurance
coverage, Hertz NeverLost navigation systems and satellite radio services.

The
international car rental operations that generated the highest volumes of business from our company-operated locations for the year ended December 31, 2009 were, in descending order of
revenues, those conducted in France, Germany, Italy, Australia, the United Kingdom, Spain and Canada. We also have company-operated rental locations in the Netherlands, Switzerland, Brazil, New
Zealand, Puerto Rico, Belgium, Luxembourg, the Czech Republic, the Slovak Republic, China and the U.S. Virgin Islands.

As
of December 31, 2009, we had approximately 2,065 staffed rental locations in the United States, of which approximately one-fourth were airport locations and three-fourths were
off-airport locations, and we regularly rent cars from approximately 1,220 other locations that are not staffed. As of December 31, 2009, we had approximately 1,140 staffed rental
locations internationally, of which approximately one-fifth were airport locations and four-fifths were off-airport locations, and we regularly rent cars from
approximately 120 other locations that are not staffed. We believe that our extensive U.S. and international network of company-operated locations contributes to the consistency of our service, cost
control, fleet utilization, yield management, competitive pricing and ability to offer one-way rentals.

In
order to operate airport rental locations, we have obtained concessions or similar leasing, licensing or permitting agreements or arrangements, or "concessions," granting us the right to conduct a
car rental business at all major, and many other, airports with regularly scheduled passenger service in each country where we have company-operated rental locations, except for airports where our
licensees operate rental locations. Our concessions were obtained from the airports' operators, which are typically governmental bodies or authorities, following either negotiation or bidding for the
right to operate a car rental business there. The terms of an airport concession typically require us to pay the airport's operator concession fees based upon a specified percentage of the revenues we
generate at the airport, subject to a minimum annual guarantee. Under most concessions, we must also pay fixed rent for terminal counters or other leased properties and facilities. Most concessions
are for a fixed length of time, while others create operating rights and payment obligations that are terminable at any time.

The
terms of our concessions typically do not forbid, and in a few instances actually require, us to seek reimbursement from customers of concession fees we pay; however, in certain jurisdictions the
law limits or forbids our doing so. Where we are required or permitted to seek such reimbursement, it is our general practice to do so. The number of car rental concessions available at airports
varies considerably,

7

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ITEM 1.    BUSINESS (Continued)

but,
except at small, regional airports, it is rarely less than four. At Orlando International Airport, where we do not have a car rental concession, we operate an airport rental location at a
facility located near the airport's premises and pick up and drop off our customers at the airport under a permit from the airport's operator. Certain of our concession agreements require the consent
of the airport's operator in connection with material changes in our ownership. See "Item 1ARisk FactorsRisks Related to Our BusinessIf Hertz Holdings
experiences a change in ownership of a material percentage of its equity without obtaining certain approvals, our results of operations and financial condition could be materially adversely affected."

The
Hertz brand is one of the most recognized brands in the world. Our customer surveys, in the United States, indicate that Hertz is the car rental brand most associated with the highest quality
service. This is consistent with numerous published best-in class car rental awards that we have won, both in the United States and internationally, over many years. We have sought to
support our reputation for quality and customer service in car rental through a variety of innovative service offerings, such as our customer loyalty program (Hertz #1 Club), our global expedited
rental program (Hertz #1 Club Gold), our one-way rental program (Rent-it-Here/Leave-it-There), our
national-scale luxury rental program (Prestige Collection), our national-scale experiential rental program (Hertz Fun Collection), our environmentally friendly rental program (Green Collection) and
our in-car navigational services (Hertz NeverLost). We intend to maintain our position as a premier company through an intense focus on service, quality and product innovation.

In
late 2008, we introduced Connect by Hertz, a new global car-sharing service utilizing Eileo technology (discussed below), which rents cars by the hour at more than two dozen locations
in the U.S., Canada and Europe. Connect by Hertz allows customers to sign up for the service and start renting cars by the hour. Customers pay an annual or monthly membership fee, pick up cars in
locations scattered around a city, at a university or a corporate campus without checking in at a Hertz rental office, and then pay an hourly car-rental fee.

In
April 2009, we completed the acquisition of certain assets of Advantage Rent A Car, or "Advantage." Advantage is a popular brand for price-oriented customers at key U.S. leisure travel
destinations. The purchase agreement provided us with the rights to purchase certain rights, trademarks and copyrights to use the Advantage brand name, website and phone numbers. In addition, the
agreement provides us with the option to have assigned to us certain leases, fixed assets, airport concession agreements and other agreements associated with approximately 20 locations that Advantage
is or previously was operating. As of December 31, 2009, we had 24 corporate Advantage brand rental locations in the United States.

In
April 2009, we completed the acquisition of Eileo, S.A.S., or "Eileo," a Paris, France-based developer of car sharing technology. As discussed above, Eileo's
end-to-end solutions are utilized by Connect by Hertz.

During
2009, we launched Rent2Buy, a new way to buy a used rental car which operates in select states, including California and Hawaii. Customers have an opportunity for a three-day test
rental of a competitively priced car from our rental fleet. If the customer purchases the car, he or she is credited with up to three days of rental charges, and the purchase transaction is completed
through the internet and by mail in those states where permitted.

In
the United States, the Hertz brand had the highest market share, by revenues, in 2008 and in the first nine months of 2009 at the approximately 190 largest airports where we operate. Out of the
approximately 170 major European airports at which we have company-operated rental locations, data regarding car rental concessionaire activity for the year ended December 31, 2009 was
available at 78 of

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ITEM 1.    BUSINESS (Continued)

these
airports. Based upon this data, we believe that we were the largest airport car rental company, measured by aggregate airport rental revenues during that period, at those 78 airports taken
together. In the United States, we intend to maintain or expand our market share in the
airport rental business. For a further description of our competitors, market share and competitive position see "Competition" below.

At
our major airport rental locations, as well as at some smaller airport and off-airport locations, customers participating in our Hertz #1 Club Gold program are able to rent vehicles in
an expedited manner. In the United States, participants in our Hertz #1 Club Gold program often bypass the rental counter entirely and proceed directly to their vehicles upon arrival at our facility.
For the year ended December 31, 2009, rentals by Hertz #1 Club Gold members accounted for approximately 37% of our worldwide rental transactions. We believe the Hertz #1 Club Gold program
provides a significant competitive advantage to us, particularly among frequent travelers, and we have, through travel industry relationships, targeted such travelers for participation in the program.

In
addition to our airport locations, we operate off-airport locations offering car rental services to a variety of customers. Our off-airport rental customers include people
wishing to rent cars closer to home for business or leisure purposes, as well as those needing to travel to or from airports. Our off-airport customers also include people who have been
referred by, or whose rental costs are being wholly or partially reimbursed by, insurance companies following accidents in which their cars were damaged, those expecting to lease cars that are not yet
available from their leasing companies and those needing cars while their vehicle is being repaired or is temporarily unavailable for other reasons; we call these customers "replacement renters." At
many of our off-airport locations we will provide pick-up and delivery services in connection with rentals.

When
compared to our airport rental locations, an off-airport rental location typically services the same variety of customers, uses smaller rental facilities with fewer employees,
conducts pick-up and delivery services and deals with replacement renters using specialized systems and processes. In addition, on average, off-airport locations generate fewer
transactions per period than airport locations. At the same time, though, our airport and off-airport rental locations employ common car fleets, are supervised by common country, regional
and local area management, use many common systems and rely on common maintenance and administrative centers. Moreover, airport and off-airport locations, excluding replacement rentals,
benefit from many common marketing activities and have many of the same customers. As a consequence, we regard both types of locations as aspects of a single, unitary, car rental business.

We
believe that the off-airport portion of the car rental market offers opportunities for us on several levels. First, presence in the off-airport market can provide customers
a more convenient and geographically extensive network of rental locations, thereby creating revenue opportunities from replacement renters, non-airline travel renters and airline
travelers with local rental needs. Second, it can give us a more balanced revenue mix by reducing our reliance on airport travel and therefore limiting our risk exposure to external events that may
disrupt airline travel trends. Third, it can produce higher fleet utilization as a result of the longer average rental periods associated with off-airport business, compared to those of
airport rentals. Fourth, replacement rental volume is far less seasonal than that of other business and leisure rentals, which permits efficiencies in both fleet and labor planning. Finally,
cross-selling
opportunities exist for us to promote off-airport rentals among frequent airport Hertz #1 Club Gold program renters and, conversely, to promote airport rentals to off-airport
renters. In view of those benefits, along with our belief that our market share for off-airport rentals is generally smaller than our market share for airport rentals, we intend to seek
profitable growth in the off-airport rental market, both in the United States and internationally.

9

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ITEM 1.    BUSINESS (Continued)

In
the three years ended December 31, 2009, we increased the number of our off-airport rental locations in the United States by approximately 7% to approximately 1,700 locations. In
the future, our strategy will include selected openings of new off-airport locations, the disciplined evaluation of existing locations and pursuit of same-store sales growth.
We anticipate that same-store sales growth will be driven by our traditional leisure and business traveler customers and by increasing penetration of the insurance replacement market, of
which we currently have a low market share. In the United States during the year ended December 31, 2009, approximately one-third of our rental revenues at off-airport
locations were related to replacement rentals. We believe that if we successfully pursue our strategy of profitable off-airport growth, the proportion of replacement rental revenues will
increase. As we move forward, our determination of whether to continue to expand our U.S. off-airport network will be based upon a combination of factors, including the concentration of
target insurance company policyholders, car dealerships, auto body shops and other clusters of retail, commercial activity and potential profitability. We also intend to increase the number of our
staffed off-airport rental locations internationally based on similar criteria.

Our
worldwide car rental segment generated $5,979.0 million in revenues and $190.1 million in income before income taxes and noncontrolling interest during the year ended
December 31, 2009.

Customers and Business Mix

We categorize our car rental business based on two primary criteriathe purpose for which customers rent from us (business or leisure)
and the type of location from which they rent (airport or off-airport). The table below sets forth, for the year ended December 31, 2009, the percentages of rental revenues and
rental transactions in our U.S. and international operations derived from business and leisure rentals and from airport and off-airport rentals.

Year ended December 31, 2009U.S.

InternationalRevenues

Transactions

Revenues

TransactionsType of Car RentalBy Customer:Business


43
%

48
%

50
%

52
%Leisure


57


52


50


48100
%

100
%

100
%

100
%By Location:Airport


73
%

75
%

54
%

57
%Off-airport


27


25


46


43100
%

100
%

100
%

100
%


Customers who rent from us for "business" purposes include those who require cars in connection with commercial activities, the activities of governments and
other organizations or for temporary vehicle replacement purposes. Most business customers rent cars from us on terms that we have negotiated with their employers or other entities with which they are
associated, and those terms can differ substantially from the terms on which we rent cars to the general public. We have negotiated arrangements relating to car rental with many large businesses,
governments and other organizations, including most Fortune 500 companies.

10

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ITEM 1.    BUSINESS (Continued)

Customers who rent from us for "leisure" purposes include not only individual travelers booking vacation travel rentals with us but also people renting to meet other personal needs. Leisure rentals,
generally, are longer in duration and generate more revenue per transaction than do business rentals, although some types of business rentals, such as rentals to replace temporarily unavailable cars,
have a long average duration. Business rentals and leisure rentals have different characteristics and place different types of demands on our operations. We believe that maintaining an appropriate
balance between business and leisure rentals is important to the profitability of our business and the consistency of our operations.

Our
business and leisure customers rent from both our airport and off-airport locations. Demand for airport rentals is correlated with airline travel patterns, and transaction volumes
generally follow enplanement trends on a global basis. Customers often make reservations for airport rentals when they book their flight plans, which make our strong relationships with travel agents,
associations and other partners (e.g., airlines) a key competitive advantage in generating consistent and recurring revenue streams.

Off-airport
rentals typically involve people wishing to rent cars closer to home for business or leisure purposes, as well as those needing to travel to or from airports. This category
also includes people who have been referred by, or whose rental costs are being wholly or partially reimbursed by, insurance companies because their cars have been damaged. In order to attract these
renters, we must establish agreements with the referring insurers establishing the relevant rental terms, including the arrangements made for billing and payment. While we estimate our share of the
insurance replacement rental market was approximately 9% of the estimated insurance rental revenue volume for the year ended December 31, 2009, we have identified 209 insurance companies,
ranging from local or regional carriers to large, national companies, as our target insurance replacement market. As of December 31, 2009, we were a preferred or recognized supplier of 193 of
these 209 insurance companies. Although Enterprise Rent-A-Car Company, or "Enterprise," currently has the largest share of the insurance replacement market, we believe that
many of these companies are receptive to our replacement rental offerings and prefer to have at least two national rental car suppliers.

We
conduct active sales and marketing programs to attract and retain customers. Our commercial and travel industry sales force calls on companies and other organizations whose employees and associates
need to rent cars for business purposes, as well as on membership associations, tour operators, travel companies and other groups whose members, participants and customers rent cars for either
business or leisure purposes. A specialized sales force calls on companies with replacement rental needs, including insurance and leasing companies and car dealers. We also advertise our car rental
offerings through a variety of traditional media channels, such as television and newspapers, direct mail and the Internet. In addition to advertising, we also conduct a variety of other forms of
marketing and promotion, including travel industry business partnerships and press and public relations activities.

In
almost all cases, when we rent a car, we rent it directly to an individual who is identified in a written rental agreement that we prepare. Except when we are accommodating someone who cannot
drive, the individual to whom we rent a car is required to have a valid driver's license and meet other rental criteria (including minimum age and creditworthiness requirements) that vary on the basis
of location and type of rental. Our rental agreements permit only the individual renting the car, people signing additional authorized operator forms and certain defined categories of other
individuals (such as fellow employees, parking attendants and in some cases spouses or domestic partners) to operate the car.

With
rare exceptions, individuals renting cars from us are personally obligated to pay all amounts due under their rental agreements. They typically pay us with a charge, credit or debit card issued
by a third party, although certain customers use a Hertz charge account that we have established for them, usually

11

---



ITEM 1.    BUSINESS (Continued)

as
part of an agreement between us and their employer. For the year ended December 31, 2009, all amounts charged to Hertz charge accounts established in the United States and by our
international subsidiaries, were billed directly to a company or other organization or were guaranteed by a company. We also issue rental vouchers and certificates that may be used to pay rental
charges, mostly for prepaid and tour-related rentals. In addition, where the law requires us to do so, we rent cars on a cash basis. For the year ended December 31, 2009, no
customer accounted for more than 2.0% of our car rental revenues.

In
the United States for the year ended December 31, 2009, 83% of our car rental revenues came from customers who paid us with third-party charge, credit or debit cards, while 8% came from
customers using Hertz charge accounts, 8% came from customers using rental vouchers or another method of payment and 1% came from cash transactions. In our international operations for the year ended
December 31, 2009, 52% of our car rental revenues came from customers who paid us with third-party charge, credit or debit cards, while 27% came from customers using Hertz charge accounts, 20%
came from customers using rental vouchers or another method of payment and 1% came from cash transactions. For the year ended December 31, 2009, bad debt expense represented 0.2% of car rental
revenues for our U.S. operations and 0.3% of car rental revenues for our international operations.

Reservations

When customers reserve cars for rental from us and our licensees, they may seek to do so through travel agents or third-party travel websites. In
many of those cases, the travel agent or website will utilize a third-party operated computerized reservation system, also known as a global distribution system, or "GDS," to contact us and make the
reservation.

In
major countries, including the United States and all other countries with company-operated locations, customers may also reserve cars for rental from us and our licensees worldwide through local,
national or toll-free telephone calls to our reservations center, directly through our rental locations or, in the case of replacement rentals, through proprietary automated systems
serving the insurance industry. Additionally, we accept reservations for rentals from us and our licensees worldwide through our websites.

For
the year ended December 31, 2009, approximately 31% of the worldwide reservations we accepted came through travel agents using GDSs, while 23% came through phone calls to our reservations
center, 31% through our websites, 10% through third-party websites and 5% through local booking sources.

Fleet

We believe we are one of the largest private sector purchasers of new cars in the world. During the year ended December 31, 2009, we operated
a peak rental fleet in the United States of approximately 288,400 cars and a combined peak rental fleet in our international operations of approximately 155,700 cars, in each case exclusive of our
licensees' fleet. During the year ended December 31, 2009, our approximate average holding period for a rental car was fifteen months in the United States and twelve months in our international
operations.

Over
the past five years, the percentage of our car rental fleet subject to repurchase or guaranteed depreciation programs has substantially decreased due primarily to changes in the overall terms
offered by automobile manufacturers under repurchase programs. Accordingly, we bear increased risk relating to the residual market value and the related depreciation on our car rental fleet and must
use different rotational techniques to accommodate our seasonal peak demand for cars.

12

---



ITEM 1.    BUSINESS (Continued)

Over
the five years ended December 31, 2009, we have acquired approximately 59% of our cars as program cars. Program cars as a percentage of all cars purchased by our U.S. operations, decreased
from 55% for the year ended December 31, 2008 to 49% for the year ended December 31, 2009. Program cars as a percentage of all cars purchased by our international operations increased
from 59% for the year ended December 31, 2008 to 61% for the year ended December 31, 2009. Taking our U.S. operations and international operations together, program cars as a percentage
of all cars purchased decreased from 57% for the year ended December 31, 2008 to 53% for the year ended December 31, 2009. Under these programs, the manufacturers agree to repurchase
cars at a specified price or guarantee the depreciation rate on the cars during established repurchase or auction periods, subject to, among other things, certain car condition, mileage and holding
period requirements. Repurchase prices under repurchase programs are based on either a predetermined percentage of original car cost and the month in which the car is returned or the original
capitalized cost less a set daily depreciation amount. Guaranteed depreciation programs guarantee on an aggregate basis the residual value of the cars covered by the programs upon sale according to
certain parameters which include the holding period, mileage and condition of the cars. These repurchase and guaranteed depreciation programs limit our residual risk with respect to cars purchased
under the programs and allow us to determine
depreciation expense in advance, however, typically the acquisition cost is higher for these program cars.

Over
the five years ended December 31, 2009, approximately 31% of the cars acquired by us for our U.S. car rental fleet, and approximately 27% of the cars acquired by us for our international
fleet, were manufactured by Ford and its subsidiaries. During the year ended December 31, 2009, approximately 12% of the cars acquired by us domestically were manufactured by Ford and its
subsidiaries and approximately 24% of the cars acquired by us for our international fleet were manufactured by Ford and its subsidiaries. The percentage of the fleet which we purchase from Ford has
declined during the past five years as we try to further diversify our fleet to meet customer demands and minimize overall costs. Historically, we have also purchased a significant percentage of our
car rental fleet from General Motors Corporation and its successor, General Motors Company, together "General Motors." Over the five years ended December 31, 2009, approximately 21% of the cars
acquired by us for our U.S. car rental fleet, and approximately 14% of the cars acquired by us for our international fleet, were manufactured by General Motors. During the year ended
December 31, 2009, approximately 17% of the cars acquired by our U.S. car rental fleet, and approximately 11% of the cars acquired by us for our international fleet, were manufactured by
General Motors. We have also increased the percentage of our car rental fleet purchased from Toyota Motor Corporation, or "Toyota." Over the five years ended December 31, 2009, approximately
16% of the cars acquired by us for our U.S. car rental fleet, and approximately 7% of the cars acquired by us for our international fleet, were manufactured by Toyota. During the year ended
December 31, 2009, approximately 27% of the cars acquired by our U.S. car rental fleet, and approximately 8% of the cars acquired by us for our international fleet, were manufactured by Toyota.
In early 2010, Toyota announced recalls. Approximately 13% of our total U.S. car rental fleet was affected by the largest of the recalls. This situation is now completely resolved. See
"Item 7Management's Discussion and Analysis of Financial Condition and Results of OperationsOverview," included in this Annual Report.

In
the past several years, Ford and General Motors, which are significant suppliers of cars to us on both a program and non-program basis, have experienced deterioration in their operating
results and significant declines in their credit ratings. General Motors has required significant government assistance to continue their operations. See "Item 1ARisk
FactorsRisks Related to Our BusinessIf we are unable to purchase adequate supplies of competitively priced cars or equipment and the cost of

13

---



ITEM 1.    BUSINESS (Continued)

the
cars or equipment we purchase increases, our financial condition and results of operations may be materially adversely affected."

Purchases
of cars are financed through cash from operations and by active and ongoing global borrowing programs. See "Item 7Management's Discussion and Analysis of Financial
Condition and Results of OperationsLiquidity and Capital Resources."

We
maintain automobile maintenance centers at certain airports and in certain urban and off-airport areas, which provide maintenance facilities for our car rental fleet. Many of these
facilities, which include sophisticated car diagnostic and repair equipment, are accepted by automobile manufacturers as eligible to perform and receive reimbursement for warranty work. Collision
damage and major repairs are generally performed by independent contractors.

We
dispose of non-program cars, as well as program cars that become ineligible for manufacturer repurchase or guaranteed depreciation programs, through a variety of disposition channels,
including auctions, brokered sales, sales to wholesalers and dealers and, to a lesser extent and primarily in the United States, sales at retail through a network of ten company-operated car sales
locations dedicated exclusively to the sale of used cars from our rental fleet. During the year ended December 31, 2009, of the cars that were not repurchased by manufacturers, we sold
approximately 88% at auction or on a wholesale basis, while approximately 7% were sold at retail and approximately 5% through other channels.

Licensees

We believe that our extensive worldwide ownership of car rental operations contributes to the consistency of our high-quality service,
cost control, fleet utilization, yield management, competitive pricing and our ability to offer one-way rentals. However, in certain U.S. and international markets, we have found it more
efficient to utilize independent licensees, which rent cars that they own. Our licensees operate locations in over 140 countries, including most of the countries where we have company-operated
locations. See "Item 1ARisk FactorsRisks Related to Our BusinessMaintaining favorable brand recognition is essential to our success, and failure to do so
could materially and adversely affect our results of operations."

We
believe that our licensee arrangements are important to our business because they enable us to offer expanded national and international service and a broader one-way rental program.
Licenses are issued principally by our wholly-owned subsidiaries, Hertz System, Inc., or "System," in the United States, and Hertz International, Ltd., or "HIL," in countries outside of
the United States under franchise arrangements to independent licensees and affiliates who are engaged in the car rental business in the United States and in many other countries.

Licensees
generally pay fees based on a percentage of their revenues or the number of cars they operate. The operations of all licensees, including the purchase and ownership of vehicles, are financed
independently by the licensees, and we do not have any investment interest in the licensees or their fleets. System licensees share in the cost of our U.S. advertising program, reservations system,
sales force and certain other services. Our European and other international licensees also share in the cost of our reservations system, sales force and certain other services. In return, licensees
are provided the use of the Hertz brand name, management and administrative assistance and training, reservations through our reservations channels, the Hertz #1 Club and #1
Club Gold programs, our "Rent-it-Here/Leave-it-There" one-way rental program and other services. In addition to car rental, certain
licensees outside the United States engage in car leasing, chauffeur-driven rentals and renting camper vans under the Hertz name.

14

---



ITEM 1.    BUSINESS (Continued)

System
licensees ordinarily are limited as to transferability without our consent and are terminable by us only for cause or after a fixed term. Licensees in the United States may generally terminate
for any reason on 90 days' notice. In Europe and certain other international jurisdictions, licensees typically do not have early termination rights. Initial license fees or the price for the
sale to a licensee of a company-owned location may be payable over a term of several years. We continue to issue new licenses and, from time to time, purchase licensee businesses.

During
the year ended December 31, 2009, we added 32 locations by acquiring former licensees of our domestic and international car rental operations. These acquisitions give us greater control
over our growth both in the United States and internationally and an expanded array of services across the Hertz network. See Note 2 to the Notes to our consolidated financial statements
included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data." In the future we may increase the number of our locations that are operated by
our licensees.

Competition

In the United States, our principal car rental industry competitors are Avis Budget Group, Inc., or "ABG," which currently operates the Avis
and Budget brands, Enterprise, which operates the National Car Rental, Alamo and Enterprise brands, and Dollar Thrifty Automotive Group, Inc., or "DTG," which operates the Dollar and Thrifty
brands.

The
following table lists our estimated market share, and the estimated market shares of our principal competitors and their licensees, at the approximately 190 largest U.S. airports at which we have
company-operated locations, determined on the basis of revenues reported to the airports' operators on which concession or off-airport permit fees are determined for the indicated periods.
Complete market share data is not available for any date later than for the nine months ended September 30, 2009.

Nine Months
Ended
September 30,
2009

Years ended December 31,2008

2007

2006

2005

2004

2003Brand NameHertz(1)


25.7
%

27.4
%

27.9
%

28.5
%

29.2
%

29.6
%

29.0
%Avis


18.5


19.6


19.8


19.8


20.2


20.2


21.2Budget


10.4


10.4


10.2


10.3


10.5


10.2


10.4ABG Brands


28.9


30.0


30.0


30.1


30.7


30.4


31.6National/Alamo(2)


21.2


20.1


19.8


19.7


19.4


19.8


20.8Enterprise


10.2


9.1


8.5


7.7


7.0


6.0


5.0Enterprise Brands


31.4


29.2


28.3


27.4


26.4


25.8


25.8Dollar


7.1


6.9


7.1


7.1


7.1


7.7


7.4Thrifty


4.9


4.4


4.3


4.4


4.3


4.5


4.4DTG Brands


12.0


11.3


11.4


11.5


11.4


12.2


11.8Other


2.0


2.1


2.4


2.5


2.3


2.0


1.8Total


100.0
%

100.0
%

100.0
%

100.0
%

100.0
%

100.0
%

100.0
%


(1)For
nine months ended September 30, 2009, includes 0.4% for Advantage.(2)National
and Alamo were purchased by Enterprise in August 2007.


15

---



ITEM 1.    BUSINESS (Continued)




The U.S. off-airport rental market has historically been dominated by Enterprise. We now have a more significant presence in the
off-airport market and ABG's brands also are present. We believe that we maintain the second largest market share, by revenues, in the off-airport car rental market in the
United States. In the three years ended December 31, 2009, we increased the number of our off-airport rental locations in the United States by approximately 7% to approximately
1,700 locations. Revenues from our U.S. off-airport operations represented $954.0 million, $975.9 million and $963.8 million of our total car rental revenues in the
years ended December 31, 2009, 2008 and 2007, respectively. Many smaller companies also operate in the airport and off-airport rental markets.

In
Europe, in addition to us, the principal pan-European participants in the car rental industry are Avis Europe plc (which is not an affiliate of ABG but is operating under a
license from ABG), which operates the Avis and Budget brands, and Europcar, which was acquired from Volkswagen AG by Eurazeo in 2006. Europcar also operates the National Car Rental and Alamo brands in
the United Kingdom and Germany, and through franchises in Spain, Italy and France. In certain European countries, there are also other companies and brands with substantial market shares, including
Sixt AG (operating the Sixt brand) and Enterprise (operating the Enterprise brand) in the United Kingdom, Ireland and Germany. In 2006, Europcar acquired the European business of Vanguard Car Rental
Holdings LLC, or "Vanguard," (which previously operated the National and Alamo brands) and entered into an agreement relating to a trans-Atlantic alliance with Vanguard. In every European
country, there are also national, regional or other, smaller companies operating in the airport and off-airport rentals markets. Apart from Enterprise-branded operations, all of which
Enterprise owns, the other major car rental brands are present in European car rental markets through a combination of company-operated and franchisee- or licensee-operated locations.

Competition
among car rental industry participants is intense and is primarily based on price, vehicle availability, service, reliability, distribution locations and product innovation. We believe,
however, that the prominence and service reputation of the Hertz brand and our extensive worldwide ownership of car rental operations provide us with a competitive advantage. For the year ended
December 31, 2009, based on publicly available information, we believe some U.S. car rental companies experienced declines in transaction days and varying rental rate revenue per transaction
day, or "RPD," compared to the year ended December 31, 2008. For the year ended December 31, 2009, in the United States, we experienced a 7.1% decrease in transaction days and a 1.6%
decrease in RPD versus 2008. During the year ended December 31, 2009, in our European operations, we experienced a low double digit decrease in transaction days and a low single digit decrease
in RPD versus 2008.

Worldwide Equipment Rental

Operations

We, through HERC, operate an equipment rental business in the United States, Canada, France, Spain and China. On the basis of total revenues, we
believe HERC is one of the largest equipment rental companies in the United States and Canada combined. HERC has operated in the United States since 1965.

HERC's
principal business is the rental of equipment. HERC offers a broad range of equipment for rental; major categories include earthmoving equipment, material handling equipment, aerial and
electrical equipment, air compressors, pumps, generators, small tools, compaction equipment and construction-related trucks.

Ancillary
to its rental business, HERC is also a dealer of certain brands of new equipment in the United States and Canada, and sells consumables such as gloves and hardhats at many of its rental
locations.

16

---





ITEM 1.    BUSINESS (Continued)

HERC's comprehensive line of equipment enables it to supply equipment to a wide variety of customers from local contractors to large industrial plants. The fact that many larger companies,
particularly those with industrial plant operations, now require single source vendors, not only for equipment rental, but also for management of their total equipment needs fits well with HERC's core
competencies. Arrangements with such companies may include maintenance of the tools and equipment they own, supplies and rental tools for their labor force and custom management reports. HERC supports
this through its dedicated in-plant operations, tool trailers and plant management systems.

As
of December 31, 2007, 2008 and 2009, HERC had branches in the following countries:

Total

U.S.

Canada

France

Spain

ChinaJanuary 1, 2007


362


242


33


79


8


Net increase (decrease)


14


6


1


5


2


Additions relating to acquisitions

















December 31, 2007


376


248


34


84


10


Net increase (decrease)


(34
)

(27
)

2


(4
)

(6
)

1Additions relating to acquisitions


3


1








2


December 31, 2008


345


222


36


80


6


1Net increase (decrease)


(24
)

(8
)

(1
)

(14
)

(3
)

2Additions relating to acquisitions


1











1


December 31, 2009


322


214


35


66


4


3


HERC's rental locations generally are situated in industrial or commercial zones. A growing number of locations have highway or major thoroughfare visibility.
The typical location is approximately three acres in size, though smaller in Europe, and includes a customer service center, an equipment service area and storage facilities for equipment. The
branches are built or conform to the specifications of the HERC prototype branch, which stresses efficiency, safety and environmental compliance. Most branches have stand-alone maintenance and fueling
facilities and showrooms.

During
the year ended December 31, 2009, we added one location related to an external acquisition done within our international equipment rental operations. Acquisitions give us greater control
over our growth both in the United States and internationally and an expanded array of services across the Hertz network. See Note 2 to the Notes to our consolidated financial statements
included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

Starting
in 2004, HERC began to broaden its equipment line in the United States and Canada to include more equipment with an acquisition cost of under $10,000 per unit, ranging from air compressors
and generators to small tools and accessories, in order to supply customers who are local contractors with a greater proportion of their overall equipment rental needs. As of December 31, 2009,
these activities, referred to as "general rental activities," were conducted at approximately one-third of HERC's U.S. and Canadian rental locations. Before it begins to conduct general
rental activities at a location, HERC typically renovates the location to make it more appealing to walk-in customers and adds staff and equipment in anticipation of subsequent demand.

Our
worldwide equipment rental segment generated $1,110.9 million in revenues and $20.7 million in loss before income taxes and noncontrolling interest during the year ended
December 31, 2009.

17

---



ITEM 1.    BUSINESS (Continued)

Customers

HERC's customers consist predominantly of commercial accounts and represent a wide variety of industries, such as construction, petrochemical,
automobile manufacturing, railroad, power generation and shipbuilding. Serving a number of different industries enables HERC to reduce its dependence on a single or limited number of customers in the
same business and somewhat reduces the seasonality of HERC's revenues and its dependence on construction cycles. HERC primarily targets customers in medium to large metropolitan markets. For the year
ended December 31, 2009, no customer of HERC accounted for more than 2.0% of HERC's rental revenues. Of HERC's combined U.S. and Canadian rental revenues for the year ended December 31,
2009, approximately 40% were derived from customers operating in the construction industry (the majority of which were in the non-residential sector), while the remaining revenues were
derived from rentals to industrial, governmental and other types of customers.

Unlike
in our car rental business, where we enter into rental agreements with the end-user who will operate the cars being rented, HERC ordinarily enters into a rental agreement with the
legal entitytypically a company, governmental body or other organizationseeking to rent HERC's equipment. Moreover, unlike in our car rental business, where our cars are
normally picked up and dropped off by customers at our rental locations, HERC delivers much of its rental equipment to its customers' job sites and retrieves the equipment from the job sites when the
rentals conclude. Finally, unlike in our car rental business, HERC extends credit terms to many of its customers to pay for rentals. Thus, for the year ended December 31, 2009, 95% of HERC's
revenues came from customers who were invoiced by HERC for rental charges, while 4% came from customers paying with third-party charge, credit or debit cards and 1% came from customers who paid with
cash or used another method of payment. For the year ended December 31, 2009, bad debt expense represented 1.1% of HERC's revenues.

Fleet

HERC acquires its equipment from a variety of manufacturers. The equipment is typically new at the time of acquisition and is not subject to any
repurchase program. The per-unit acquisition cost of units of rental equipment in HERC's fleet varies from over $200,000 to under $100. As of December 31, 2009, the average
per-unit acquisition cost (excluding small equipment purchased for less than $5,000 per unit) for HERC's fleet in the United States was approximately $36,000. As of December 31,
2009, the average age of HERC's rental fleet in the United States was 46 months. We believe that this fleet is one of the youngest fleets in the industry. As of December 31, 2009, the
average age of HERC's international rental fleet was 44 months in Canada, 41 months in France, 22 months in Spain and 10 months in China, which we believe is roughly
comparable to the average ages of the fleets of HERC's principal competitors in those countries.

HERC
disposes of its used equipment through a variety of channels, including private sales to customers and other third parties, sales to wholesalers, brokered sales and auctions.

Licensees

HERC licenses the Hertz name to equipment rental businesses in seven countries in Europe and Africa. The terms of those licenses are broadly similar
to those we grant to our international car rental licensees.

Competition

HERC's competitors in the equipment rental industry range from other large national companies to small regional and local businesses. In each of the
five countries where HERC operates, the equipment rental

18

---



ITEM 1.    BUSINESS (Continued)

industry
is highly fragmented, with large numbers of companies operating on a regional or local scale. The number of industry participants operating on a national scale is, however, much smaller.
Other than in Spain and China, HERC is one of the principal national-scale industry participants in the countries where it operates. HERC's operations in the United States represented approximately
67% of our worldwide equipment rental revenues during the year ended December 31, 2009. In the United States and Canada, the other top national-scale industry participants are United
Rentals, Inc., or "URI," RSC Equipment Rental, Inc., or "RSC," and Sunbelt Rentals. A number of individual Caterpillar dealers also participate in the equipment rental market in the
United States, Canada, France and Spain. In France, the other principal national-scale industry participants are Loxam, Kiloutou and Laho.

Competition
in the equipment rental industry is intense, and it often takes the form of price competition. HERC's competitors, some of which may have access to substantial capital, may seek to compete
aggressively on the basis of pricing. To the extent that HERC matches downward competitor pricing without reducing our operating costs, it could have an adverse impact on our results of operations.
For the years ended December 31, 2007, 2008 and 2009, based on publicly available information, we believe the U.S. equipment rental industry experienced downward pricing. HERC experienced
higher equipment rental volumes and pricing worldwide for the year ended December 31, 2007, with pricing increases attributable to higher price activity in Canada and Europe offsetting lower
price activity in the U.S. HERC experienced lower equipment rental volumes and
pricing worldwide for the years ended December 31, 2008 and 2009. We believe that HERC's competitive success has been primarily the product of its more than 40 years of experience in the
equipment rental industry, its systems and procedures for monitoring, controlling and developing its branch network, its capacity to maintain a comprehensive rental fleet, the quality of its sales
force and its established national accounts program.

Other Operations

Our wholly-owned subsidiary, Hertz Claim Management Corporation, or "HCM," provides claim administration services to us and, to a lesser extent, to
third parties. These services include investigating, evaluating, negotiating and disposing of a wide variety of claims, including third-party, first-party, bodily injury, property damage, general
liability and product liability, but not the underwriting of risks. HCM conducts business at five regional offices in the United States. Separate subsidiaries of ours conduct similar operations in
seven countries in Europe.

Seasonality

Generally, car rental and equipment rental are seasonal businesses, with decreased levels of business in the winter months and heightened activity
during spring and summer. 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. However, certain operating expenses, 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, remain fixed and cannot be adjusted for seasonal demand. See "Item 1ARisk FactorsRisks
Related to Our BusinessOur business is highly seasonal and any occurrence that disrupts rental activity during our peak periods could constrain our liquidity and adversely affect our
results of operations." The following tables set forth this seasonal effect by providing quarterly revenues and income (loss) before income taxes for each of the quarters in the year ended
December 31, 2009.

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ITEM 1.    BUSINESS (Continued)

GRAPHIC

Employees

As of December 31, 2009, we employed approximately 23,050 persons, consisting of 15,680 persons in our U.S. operations and 7,370 persons in
our international operations. International employees are covered by a wide variety of union contracts and governmental regulations affecting, among other things, compensation, job retention rights
and pensions. Labor contracts covering the terms of employment of approximately 5,900 employees in the United States (including those in the U.S. territories) are presently in effect under 140 active
contracts with local unions, affiliated primarily with the International Brotherhood of Teamsters and the International Association of Machinists. Labor contracts covering approximately 2,170 of these
employees will expire during 2010. We have had no material work stoppage as a result of labor problems during the last ten years, and we believe our labor relations to be good. Nonetheless, we may be
unable to negotiate new labor contracts on terms advantageous to us, or without labor interruptions.

In
addition to the employees referred to above, we employ a substantial number of temporary workers, and engage outside services, as is customary in the industry, principally for the
non-revenue movement of rental cars and equipment between rental locations and the movement of rental equipment to and from customers' job sites.

Risk Management

Three types of generally insurable risks arise in our operations:



20

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ITEM 1.    BUSINESS (Continued)



In
addition, we offer optional liability insurance and other products providing insurance coverage, which create additional risk exposures for us. Our risk of property damage is also increased when we
waive the provisions in our rental contracts that hold a renter responsible for damage or loss under an optional loss or damage waiver that we offer. We bear these and other risks, except to the
extent the risks are transferred through insurance or contractual arrangements.

In
many cases we self-insure our risks or insure risks through wholly-owned insurance subsidiaries. We mitigate our exposure to large liability losses by maintaining excess insurance
coverage, subject to deductibles and caps, through unaffiliated carriers. For our international operations outside of Europe, we maintain some liability insurance coverage with unaffiliated carriers.
We also maintain property insurance through our captive insurer, Probus Insurance Company Europe Limited, or "Probus" (with the risk reinsured with unaffiliated insurance carriers) in Europe, subject
to deductibles.

Third-Party Liability

In our domestic operations, we are required by applicable financial responsibility laws to maintain insurance against legal liability for bodily
injury (including death) or property damage to third parties arising from the operation of our cars and on-road equipment, sometimes called "vehicle liability," in stipulated amounts. In
most places, we satisfy
those requirements by qualifying as a self-insurer, a process that typically involves governmental filings and demonstration of financial responsibility, which sometimes requires the
posting of a bond or other security. In the remaining places, we obtain an insurance policy from an unaffiliated insurance carrier and indemnify the carrier for any amounts paid under the policy. As a
result of such arrangements, we bear economic responsibility for domestic vehicle liability, except to the extent we successfully transfer such liability to others through insurance or contractual
arrangements.

For
our car and equipment rental operations in Europe, we have established two wholly-owned insurance subsidiaries, Probus, a direct writer of insurance domiciled in Ireland, and Hertz International
RE Limited, or "HIRE," a reinsurer organized in Ireland. In European countries with company-operated locations, we have purchased from Probus the vehicle liability insurance required by law, and
Probus reinsured the risks under such insurance with HIRE through December 31, 2006. Effective January 1, 2007, reinsurance is provided by another subsidiary of ours, HIRE Bermuda
Limited. Thus, as with our domestic operations, we bear economic responsibility for vehicle liability in our European car and equipment rental operations, except to the extent that we transfer such
liability to others through insurance or contractual arrangements. For our international operations outside of Europe, we maintain some form of vehicle liability insurance coverage with unaffiliated
carriers. The nature of such coverage, and our economic responsibility for covered losses, varies considerably. In all cases, though, we believe the amounts and nature of the coverage we obtain is
adequate in light of the respective potential hazards.

Both
domestically and in our international operations, from time to time in the course of our business we become legally responsible to members of the public for bodily injury (including death) or
property damage arising from causes other than the operation of our cars and on-road equipment, sometimes known as "general liability." As with vehicle liability, we bear economic
responsibility for general liability losses, except to the extent we transfer such losses to others through insurance or contractual arrangements.

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ITEM 1.    BUSINESS (Continued)

To
mitigate this exposure, we maintain excess insurance coverage with unaffiliated insurance carriers against such losses up to $10 million per occurrence in the United States and Europe and
capped at an aggregate of $200 million for policy period ended December 21, 2009. In the past this cap has ranged from $100 million to $235 million for policy periods
between December 2004 through December 2007. For our international car rental operations outside of Europe, we also maintain liability insurance coverage with unaffiliated carriers in such amounts as
we deem adequate in light of the respective potential hazards, where such insurance is obtainable on commercially reasonable terms.

Our
domestic rental contracts, both for car rental and for equipment rental, typically provide that the renter will indemnify us for liability arising from the operation of the rented vehicle or
equipment (for car rentals in certain places, though, only to the extent such liability exceeds the amount stipulated in the applicable financial responsibility law). In addition, many of HERC's
domestic rental contracts require the renter to maintain liability insurance under which HERC is entitled to coverage. While such provisions are sometimes effective to transfer liability to renters,
their value to us, particularly in cases of large losses, may be limited. The rental contracts used in our international operations sometimes contain provisions relating to insurance or indemnity, but
they are typically more limited than those employed in our domestic operations.

In
our domestic car rental operations, we offer an optional liability insurance product, Liability Insurance Supplement, or "LIS," that provides vehicle liability insurance coverage substantially
higher than state minimum levels to the renter and other authorized operators of a rented vehicle. LIS coverage is provided under excess liability insurance policies issued by an unaffiliated
insurance carrier, the risks under which are reinsured with a subsidiary of ours, HIRE Bermuda Limited. As a consequence of those reinsurance arrangements, rental customers' purchases of LIS do not
reduce our economic exposure to vehicle liability. Instead, our exposure to vehicle liability is potentially increased when LIS is purchased, because insured renters and other operators may have
vehicle liability imposed on them in circumstances and in amounts where the applicable rental agreement or applicable law would not, absent the arrangements just described, impose vehicle liability on
us.

In
both our domestic car rental operations and our company-operated international car rental operations in many countries, we offer optional products providing insurance coverage, or "PAI/PEC"
coverage, to the renter and the renter's immediate family members traveling with the renter for accidental death or accidental medical expenses arising during the rental period or for damage or loss
of their property during the rental period. PAI/PEC coverage is provided under insurance policies issued by unaffiliated carriers or, in some parts of Europe, by Probus, and the risks under such
policies either are reinsured with HIRE or another subsidiary of ours or are the subject of indemnification arrangements between us and the carriers. Rental customers' purchases of PAI/PEC coverage
create additional risk exposures for us, since we would not typically be liable for the risks insured by PAI/PEC coverage if that coverage had not been purchased.

Our
offering of LIS and PAI/PEC coverage in our domestic car rental operations is conducted pursuant to limited licenses or exemptions under state laws governing the licensing of insurance producers.
In our international car rental operations, our offering of PAI/PEC coverage historically has not been regulated; however, in the countries of the European Union, the regulatory environment for
insurance intermediaries is evolving, and we cannot assure you that we will be able to continue offering PAI/PEC coverage without substantial changes in its offering process or in the terms of the
coverage or that such changes, if required, would not render uneconomic our continued offering of the coverage. Due to a change in law in Australia, we have discontinued the sale of insurance products
there.

Provisions
on our books for self-insured vehicle liability losses are made by charges to expense based upon evaluations of estimated ultimate liabilities on reported and unreported claims.
As of December 31,

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ITEM 1.    BUSINESS (Continued)

2009,
this liability was estimated at $277.8 million for our combined domestic and international operations.

Damage to Our Property

We bear the risk of damage to our property, unless such risk is transferred through insurance or contractual arrangements.

To
mitigate our risk of large, single-site property damage losses globally, we maintain property insurance with unaffiliated insurance carriers in such amounts as we deem adequate in light
of the respective hazards, where such insurance is available on commercially reasonable terms.

Our
rental contracts typically provide that the renter is responsible for damage to or loss (including loss through theft) of rented vehicles or equipment. We generally offer an optional rental
product, known in various countries as "loss damage waiver," "collision damage waiver," "theft protection" or "accident excess reduction," under which we waive or limit our right to make a claim for
such damage or loss. This product is not regulated as insurance, but it is subject to specific laws in roughly half of the U.S. jurisdictions where we operate.

Collision
damage costs and the costs of stolen or unaccounted-for vehicles and equipment, along with other damage to our property, are charged to expense as incurred.

Other Risks

To manage other risks associated with our businesses, or to comply with applicable law, we purchase other types of insurance carried by business
organizations, such as worker's compensation and employer's liability, commercial crime and fidelity, performance
bonds and directors' and officers' liability insurance from unaffiliated insurance companies in amounts deemed by us to be adequate in light of the respective hazards, where such coverage is
obtainable on commercially reasonable terms.

Governmental Regulation and Environmental Matters

Throughout the world, we are subject to numerous types of governmental controls, including those relating to prices and advertising, privacy and data
protection, currency controls, labor matters, charge card operations, insurance, environmental protection, used car sales and licensing.

Environmental

The environmental requirements applicable to our operations generally pertain to (i) the operation and maintenance of cars, trucks and other
vehicles, such as heavy equipment, buses and vans; (ii) the ownership and operation of tanks for the storage of petroleum products, including gasoline, diesel fuel and oil; and (iii) the
generation, storage, transportation and disposal of waste materials, including oil, vehicle wash sludge and waste water. We have made, and will continue to make, expenditures to comply with applicable
environmental laws and regulations.

The
use of cars and other vehicles is subject to various governmental requirements designed to limit environmental damage, including those caused by emissions and noise. Generally, these requirements
are met by the manufacturer, except in the case of occasional equipment failure requiring repair by us. Measures are taken at certain locations in states that require the installation of
Stage II Vapor Recovery equipment to reduce the loss of vapor during the fueling process.

We
utilize tanks worldwide, approximately 540 of which, at December 31, 2009, are underground and approximately 1,880 of which are aboveground, to store petroleum products, and we believe our
tanks

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ITEM 1.    BUSINESS (Continued)

are
maintained in material compliance with environmental regulations, including federal and state financial responsibility requirements for corrective action and third-party claims due to releases.
Our compliance program for our tanks is intended to ensure that (i) the tanks are properly registered
with the state or other jurisdiction in which the tanks are located and (ii) the tanks have been either replaced or upgraded to meet applicable leak detection and spill, overfill and corrosion
protection requirements.

We
are also incurring and providing for expenses for the investigation and cleanup of contamination from the discharge of petroleum substances at, or emanating from, currently and formerly owned and
leased properties, as well as contamination at other locations at which our wastes have reportedly been identified. The amount of any such expenses or related natural resource damages for which we may
be held responsible could be substantial. The probable losses that we expect to incur for such matters have been accrued, and those losses are reflected in our consolidated financial statements. As of
December 31, 2009 and 2008, the aggregate amounts accrued for environmental liabilities reflected in our consolidated balance sheet in "Other accrued liabilities" were $2.0 million and
$2.2 million, respectively. The accrual generally represents the estimated cost to study potential environmental issues at sites deemed to require investigation or clean-up
activities, and the estimated cost to implement remediation actions, including ongoing maintenance, as required. Cost estimates are developed by site. Initial cost estimates are based on historical
experience at similar sites and are refined over time on the basis of in-depth studies of the site. For many sites, the remediation costs and other damages for which we ultimately may be
responsible cannot be reasonably estimated because of uncertainties with respect to factors such as our connection to the site, the nature of the contamination, the involvement of other potentially
responsible parties, the application of laws and other standards or regulations, site conditions, and the nature and scope of investigations, studies, and remediation to be undertaken (including the
technologies to be required and the extent, duration, and success of remediation).

With
respect to cleanup expenditures for the discharge of petroleum substances at, or emanating from, currently and formerly owned or leased properties, we have received reimbursement, in whole or in
part, from certain U.S. states that maintain underground storage tank petroleum cleanup reimbursement funds. Such funds have been established to assist tank owners in the payment of cleanup costs
associated with releases from registered tanks. With respect to off-site U.S. locations at which our wastes have reportedly been identified, we have been and continue to be required to
contribute to cleanup costs due to strict joint and several cleanup liability imposed by the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and comparable state
superfund statutes.

Environmental
legislation and regulations and related administrative policies have changed rapidly in recent years, both in the United States and in other countries. There is a risk that governmental
environmental requirements, or enforcement thereof, may become more stringent in the future and that we may be subject to legal proceedings brought by government agencies or private parties with
respect to environmental matters. In addition, with respect to the cleanup of contamination, additional locations at which waste generated by us or substances used by us may have been released or
disposed, and of which we are currently unaware, may in the future become the subject of cleanup for which we may be liable, in whole or in part. Further, at airport-leased properties, we may be
subject to environmental requirements imposed by airports that are more restrictive than those obligations imposed by environmental regulatory agencies. Accordingly, while we believe that we are in
substantial compliance with applicable requirements of environmental laws, we cannot offer assurance that our future environmental liabilities will not be material to our consolidated financial
position, results of operations or cash flows.

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ITEM 1.    BUSINESS (Continued)

Dealings with Renters

In the United States, car and equipment rental transactions are generally subject to Article 2A of the Uniform Commercial Code, which governs
"leases" of tangible personal property. Car rental is also specifically regulated in more than half of the states of the United States. The subjects of state regulation include the methods by which we
advertise, quote and charge prices, the consequences of failing to honor reservations, the terms on which we deal with vehicle loss or damage (including the protections we provide to renters
purchasing loss or damage waivers) and the terms and method of sale of the optional insurance coverage that we offer. Some states (including California, New York, Nevada and Illinois) regulate the
price at which we may sell loss or damage waivers, and many state insurance regulators have authority over the prices and terms of the optional insurance coverage we offer. See "Risk
Management" above for further discussion regarding the loss or damage waivers and optional insurance coverages that we offer renters. Internationally, regulatory regimes vary greatly by jurisdiction,
but they do not generally prevent us from dealing with customers in a manner similar to that employed in the United States.

Both
in the United States and internationally, we are subject to increasing regulation relating to customer privacy and data protection. In general, we are limited in the uses to which we may put data
that we collect about renters, including the circumstances in which we may communicate with them. In addition, we are generally obligated to take reasonable steps to protect customer data while it is
in our possession. Our failure to do so could subject us to substantial legal liability or seriously damage our reputation.

Changes in Regulation

Changes in government regulation of our businesses have the potential to materially alter our business practices, or our profitability. Depending on
the jurisdiction, those changes may come about through new legislation, the issuance of new laws and regulations or changes in the interpretation of existing laws and regulations by a court,
regulatory body or governmental official. Sometimes those changes may have not just prospective but also retroactive effect; this is particularly true when a change is made through reinterpretation of
laws or regulations that have been in effect for some time. Moreover, changes in regulation that may seem neutral on
their face may have either more or less impact on us than on our competitors, depending on the circumstances. Several U.S. State Attorneys General have taken the position that car rental companies
either may not pass through to customers, by means of separate charges, expenses such as vehicle licensing and concession fees or may do so only in certain limited circumstances. Recent or potential
changes in law or regulation that affect us relate to insurance intermediaries, customer privacy and data security and rate regulation, each as described under "Item 1ARisk
FactorsRisks Related to Our BusinessChanges in the U.S. and foreign legal and regulatory environment that affect our operations, including laws and regulations relating to
the insurance products we sell, consumer privacy, data security, employment matters, taxes, automobile-related liability and insurance rates, could disrupt our business, increase our expenses or
otherwise have an adverse impact on our results of operations."

In
addition, our operations, as well as those of our competitors, also could be affected by any limitation in the fuel supply or by any imposition of mandatory allocation or rationing regulations. We
are not aware of any current proposal to impose such a regime in the United States or internationally. Such a regime could, however, be quickly imposed if there were a serious disruption in supply for
any reason, including an act of war, terrorist incident or other problem affecting petroleum supply, refining, distribution or pricing.

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ITEM 1.    BUSINESS (Continued)

Relationship with Ford

Prior to the Acquisition, Ford, through its wholly-owned subsidiary Ford Holdings, was our only stockholder. As a result of the Acquisition, Hertz
Holdings indirectly owned all of our outstanding common stock. Based upon this ownership, we historically had an extensive relationship with Ford, however since the Sponsors acquired Hertz Holdings,
our relationships with Ford have steadily decreased, and we no longer deem any of our current relationships with Ford to be material.

Taxes

Prior to the Acquisition, we and our domestic subsidiaries filed a consolidated federal income tax return with Ford. Pursuant to a tax sharing
agreement, with Ford,
current and deferred taxes were reported, and paid to Ford, as if we had filed our own consolidated tax returns with our domestic subsidiaries. The tax sharing agreement provided that we were
reimbursed for foreign tax credits in accordance with the utilization of those credits by the Ford consolidated tax group.

On
December 21, 2005, in connection with the Acquisition, the tax sharing agreement with Ford was terminated. Upon termination, all tax payables and receivables with Ford were cancelled and
neither Hertz nor Ford has any future rights or obligations under the tax sharing agreement. Hertz may be exposed to tax liabilities attributable to periods it was a consolidated subsidiary of Ford.
While Ford has agreed to indemnify Hertz for certain tax liabilities pursuant to the arrangements relating to our separation from Ford, we cannot offer assurance that payments in respect of the
indemnification agreement will be available.

Available Information

We file annual, quarterly and current reports and other information with the United States Securities and Exchange Commission, or the "SEC." You may
read and copy any documents that we file 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 and Hertz Holdings. 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). 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. The information found on our website is not part of this or any other report filed with or furnished to the SEC.

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ITEM 1A.    RISK FACTORS

In addition to the other information included in this Form 10-K, you should carefully consider each of the following risks and uncertainties. We believe that
the following information identifies the material risks and uncertainties affecting our company, but it is possible that other risks and uncertainties might significantly impact us. Risks that we are
not aware of could arise, and issues that we now view as minor could become more important. Any of those risks and uncertainties may have a material adverse effect on our business, financial
condition, results of operations and cash flows.

Risks Related to Our Business

The car and equipment rental industry is significantly affected by general economic conditions, and any further decreases in general economic activity could materially and
adversely affect our financial condition and results of operations.

Our results of operations are affected by many economic factors, including the level of economic activity in the markets in which we operate. Over
the past 18 months, the United States and international markets have experienced a significant decline in economic activity that has affected the car rental market, including a tightening of
the credit markets, reduced business and leisure travel, reduced consumer spending and volatile fuel prices. In the equipment rental business, the decline in economic activity has resulted in a
decline in activity in construction and other businesses in which our equipment rental customers operate. Accordingly, the car and equipment rental industries have both experienced unprecedented
declines in volume and demand. See "Item 1BusinessWorldwide Car RentalFleet" and "Item 7Management's Discussion and Analysis of
Financial Condition and Results of OperationsOverview" in this Annual Report. If economic conditions in the United States and worldwide worsen or do not improve, our financial condition
and results of operations could be materially and adversely impacted in 2010 and beyond.

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

The car rental industry is particularly affected by reductions in business and leisure travel, especially with respect to levels of airline passenger
traffic. Approximately 84% of our worldwide revenues during 2009 were provided by our car rental segment, and we estimate that approximately 67% of these car rental revenues were generated at our
airport rental locations. Further reductions in levels of air travel, whether caused by general economic conditions, airfare increases (e.g., 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 and 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. See "Item 1BusinessWorldwide Car
RentalCompetition" and "Item 1BusinessWorldwide Equipment RentalCompetition." We believe that price is one of the primary competitive factors
in the car and equipment rental markets and that the Internet has increased pricing transparency among car rental companies by enabling cost-conscious customers, including business
travelers, to more easily obtain the lowest rates available from car rental companies for any given trip. 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 associated with reductions

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ITEM 1A.    RISK FACTORS (Continued)

in
economic activity. To the extent we do not match or remain within a reasonable competitive margin of our competitors' pricing, or if competitive pressures lead us to match any of our competitors'
downward pricing and we are not able to reduce our operating costs, our margins and results of operations could be materially and adversely impacted.

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

Certain significant components of our expenses are fixed in the short-run, 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 profitability in periods when our revenues are higher and lower profitability in periods when our revenues are lower. The second and third
quarters of the year have historically been our strongest quarters in both our car and equipment rental segments 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 and results of operations.

We may not be successful in our business strategy to expand into the off-airport rental market.

We have been increasing our presence in the off-airport car rental market in the United States and intend to continue to pursue
profitable growth opportunities through a combination of selected new location openings, a disciplined evaluation of and strategic changes with respect to existing locations, and the pursuit of
same-store sales growth. In order to increase revenues at our existing, and any new, off-airport locations, we believe that we will need to successfully market to insurance
companies and other companies that provide rental referrals to those needing cars while their vehicles are being repaired or are temporarily unavailable for other reasons, as well as to the renters
themselves. Since some of our competitors have a more established presence in the off-airport car rental market than we do, it may be difficult for us to successfully market our
off-airport rental car services to these individuals and organizations. In addition, revenues at new locations usually do not initially cover their start-up costs and often do
not, for some time, cover the costs of their ongoing operation. As a result, it may take some time before various of our new facilities are profitable. See
"Item 1BusinessWorldwide Car RentalOperations." Our competitors, some of which have greater market share than we do in the off-airport rental
market, may also try to increase their presence in that market, which could make it more difficult for this business strategy to succeed. If we are unable to grow profitably in our
off-airport network and properly react to changes in market conditions, our financial condition and results of operations could be materially adversely affected.

A 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 deferral of federal and state income taxes for fiscal 2007, 2008 and 2009. The LKE Program allows tax deferral if a qualified replacement asset is acquired within a specific time
period after asset disposal. Accordingly, if a qualified replacement asset is not purchased within this limited time period, taxable gain is recognized. For strategic purposes, such as cash management
and fleet reduction, we have in the past triggered some taxable gains in the LKE Program, and the bankruptcy filing of a manufacturer of vehicles in our car rental fleet has also resulted in minimal
taxable gains. An extended reduction in purchases or downsizing of our car rental fleet could result in reduced deferrals in the future, which in turn could require us to make material cash payments

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ITEM 1A.    RISK FACTORS (Continued)

for
federal and state income tax liabilities. Our inability to obtain replacement financing as our debt matures would likely result in an extended reduction in purchases or downsizing of the fleet.
See
"Our reliance on asset-backed financing to purchase cars subjects us to a number of risks, many of which are beyond our control."

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
and results of operations may be materially adversely affected.

Historically we have purchased more of the cars we rent from Ford than from any other automobile manufacturer. However, our master supply and
advertising agreement with Ford expires in 2010. We do not expect to extend the master supply and advertising agreement with Ford beyond its current term and to date, we have not entered into any
long-term car supply arrangements with manufacturers other than Ford.

In
addition, certain car manufacturers, including Ford, have adopted strategies to de-emphasize sales to the car rental industry, which they view as less profitable due to historical sales
incentive and other discount programs that tended to lower the average cost of cars for fleet purchasers such as us. Furthermore, a number of the manufacturers that we purchase cars from have
experienced financial difficulties, such that their ability to continue to supply us with cars on competitive terms and conditions has come into question. By way of an example, New General Motors, or
"General Motors Company," which required significant government assistance during 2009, manufactured approximately 17% of the cars purchased for our U.S. car fleet and 11% of the cars purchased for
our international fleet during 2009. In the event that General Motors Company, or any other manufacturer, were to cease manufacturing and selling automobiles, we would have to increase the number of
vehicles we purchase from other manufacturers, or start purchasing vehicles from one or more manufacturers from which we do not currently purchase vehicles. In addition, it is possible that a
manufacturer experiencing financial difficulties could attempt to increase the cost of the cars they sell to us. There can be no guarantee that, in such a circumstance, we would be able to purchase a
sufficient number of vehicles at purchase prices similar to those for the vehicles we currently purchase, or at all. If we are not able to purchase sufficient quantities of cars on competitive terms
and conditions, or if a manufacturer from whom we purchase a significant number of cars or equipment is unable to continuing supplying us with cars, then the cost of the cars we purchase may increase.
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 pass on any increased costs to our customers,
our financial condition and results of operations may be materially and adversely affected.

Declines in the value of the non-program cars in our fleet due to decreases in residual values could adversely impact our financial condition and results of
operations.

For the year ended December 31, 2009, approximately 53% of the cars purchased in our combined U.S. and international car rental fleet were
subject to repurchase by car
manufacturers under contractual repurchase or guaranteed depreciation programs. We pay more to purchase these "program cars", in exchange for the car manufacturers agreeing to repurchase these cars at
a specified price, or guaranteeing the depreciation rate on the cars during a specified time period. While the repurchase price and/or depreciation rate is typically subject to certain conditions,
including the condition of the car, mileage and holding period requirements, the use of program cars limits our 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.

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ITEM 1A.    RISK FACTORS (Continued)

The
use of program cars enables us to determine our depreciation expense in advance. This predictability is useful to us, since depreciation is a significant cost factor in our operations. Having
program cars in our fleet is also useful in managing our seasonal peak demand for fleet, because in certain cases we can, if we deem it necessary, sell certain of the program cars shortly after having
acquired them. If a program car is damaged and we are unable to recover the cost of the damage from our customer or another third party or the car otherwise becomes ineligible for return or sale under
the relevant program, our loss upon the disposition of the car will be larger than if the car had been a non-program car, because our initial investment in the car was larger. Over the
past five years, the percentage of our car rental fleet subject to repurchase or guaranteed depreciation programs has substantially decreased due primarily to changes in the overall terms offered by
automobile manufacturers under repurchase programs and concerns such as the credit-worthiness of the U.S. vehicle manufacturers. Accordingly, we are now bearing increased risk relating to the residual
value and the related depreciation on our car rental fleet. In addition, our 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 has been reduced as the percentage of program cars in our car rental fleet has decreased materially. Any decrease in residual
values, including in connection with a decline in economic activity, a decline in a manufacturers reputation due to a significant product recall, or the unexpected announcement by a manufacturer of
the eventual or immediate elimination of a model or nameplate, either due to their bankruptcy or otherwise, could have a material adverse effect on residual values realized on the disposition of our
non-program cars and equipment and the value of the non-program cars and equipment we own, which could materially adversely affect our financial condition and results of
operations.

The failure of a manufacturer of cars that we own to fulfill its obligations under a repurchase or guaranteed depreciation program could expose us to loss on those cars and
adversely impact our outstanding asset-backed financing facilities, which could in turn adversely affect our liquidity and results of operations.

If any manufacturer of our cars does not fulfill its obligations under its repurchase or guaranteed depreciation obligations with us, whether due to
a default, future reorganization, bankruptcy or otherwise, we would have to dispose of those program cars without the benefit of the associated programs. Accordingly, our expenses associated with the
disposition of these cars could increase, we would be exposed to residual risk with respect to these cars and we could be left with a substantial unpaid claim against the manufacturer with respect to
program cars that were sold and returned to the car manufacturer but not paid for, or that were sold for less than their agreed repurchase price or guaranteed value. The amount of these outstanding
claims fluctuates throughout the year depending on how many cars we sell back to the car manufacturer. For the year ended December 31, 2009, the highest outstanding month-end
receivable balance for cars sold to a single manufacturer was $95.4 million owed by Hyundai Motor Company in January 2009, which was subsequently paid. There is no guarantee that we will be
paid these amounts by any car manufacturer that files for bankruptcy protection in the future and/or otherwise ceases operations. Any failure by a manufacturer to pay such amounts due could, among
other things, cause a credit enhancement deficiency with respect to our asset-backed financing, in which case the collateral requirements for such facilities could be increased. In addition, because
we obtain a substantial portion of our financing in reliance on repurchase and guaranteed depreciation programs, the failure of our car manufacturers to fulfill their current repurchase obligations,
or modification or elimination of those programs in the future, or significant adverse changes in the financial condition of our car manufacturers, including a bankruptcy filing by a significant
supplier, could reduce our ability to acquire new cars under our outstanding asset-backed financing facilities, and could in the future make vehicle-related debt financing more difficult to obtain on
reasonable terms. See

30

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ITEM 1A.    RISK FACTORS (Continued)

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

Any
reduction in the value of our fleet could effectively increase our fleet costs, adversely impact our profitability and potentially lead to decreased capacity in our asset backed car rental funding
facilities due to the collateral requirements for such facilities which effectively increase as market values for vehicles decrease. As a result, our ability to utilize our asset-backed vehicle
financing programs to acquire new vehicles for our rental fleet may be limited. In addition, if our ability to sell 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 financing facilities may be required to be
repaid sooner than anticipated with vehicle disposition proceeds and lease payments we make to our vehicle program subsidiary. If that were to occur, the holders of our asset-backed 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.

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

As a result of the challenging economic environment, we are implementing initiatives to reduce our operating expenses. These initiatives include
headcount reductions, business process outsourcing, business process re-engineering and internal reorganization, as well as other expense controls. We cannot assure you that we will be
able to implement our cost reduction initiatives successfully, or at all. For the year ended December 31, 2009, we incurred $153.3 million of restructuring and restructuring related
costs associated with our cost reduction initiatives, and we anticipate incurring further expenses throughout the upcoming year, some of which may be material in the period in which they are incurred.

Even
if we are successful in our cost reduction initiatives, we may face other risks associated with our plans, 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 and cash flows. In
addition, investors or securities analysts who cover Hertz Holdings common stock may not agree that these changes will be beneficial, and Hertz Holdings' stock price may decline as a result.

An impairment of our goodwill and/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. We have performed our annual impairment tests for goodwill and indefinite lived intangible assets during the fourth quarter of 2009
and concluded that there was no impairment related to our goodwill and our indefinite-lived intangible assets. We have taken a number of actions as described elsewhere in this filing to mitigate the
impact of these negative factors on our projected future cash flows. However, if further economic deterioration occurs, we may be required to record additional charges for goodwill and/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 costs or reduced supplies of fuel could harm our business.

Fuel prices have been volatile recently, and could fluctuate severely and/or increase overall in 2010. According to the U.S. Energy Information
Administration, from 2008 to 2009, the average retail cost of a gallon of gasoline in the United States decreased 27.9%, however it is projected that over the course of

31

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ITEM 1A.    RISK FACTORS (Continued)

2010
fuel prices will increase 20.8%. Significant increases in fuel prices, fluctuations in fuel supplies or imposition of mandatory allocations or rationing of fuel, could negatively impact our car
rental business by directly discouraging consumers from renting cars or disrupting air travel, on which a significant portion of our car rental business relies. In addition, significant increases in
fuel prices and/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 a severe or protracted disruption in fuel supplies could have a material adverse effect on our financial condition and results of operations.

Our foreign operations expose us to additional risks that may materially adversely affect our results of operations.

A significant portion of our annual revenues are generated outside the United States, and we intend to pursue additional international growth
opportunities. Operating in a large number of different regions and countries exposes us to varying risks, as well as multiple and often conflicting foreign regulatory requirements that are also
subject to change. Some of those risks include:



The
effects of these risks may, individually or in the aggregate, materially and adversely affect our results of operations 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. For example, in early 2010 Toyota announced recalls. Under certain circumstances,
the recalls may cause us to attempt to retrieve cars from renters, and/or to decline to re-rent returned cars until we can arrange for the steps described in the recalls to be taken. We
could also face liability claims if recalls affect cars that we have already sold. If a large number of cars are the subject of simultaneous recalls, or if needed replacement parts are not in adequate
supply, we may not be able to re-rent recalled cars for a significant period of time. Those types of disruptions could jeopardize our ability to fulfill existing contractual commitments
and/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 cars involved and harm our general reputation.

Our business is heavily reliant upon communications networks and centralized information technology systems.

We rely heavily on information technology systems to accept reservations, process rental and sales transactions, manage our fleets of cars and
equipment, account for our activities and otherwise conduct

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ITEM 1A.    RISK FACTORS (Continued)

our
business. While our reliance on this technology lowers our cost of providing service and expands our service capabilities, it 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 and otherwise materially adversely affect our ability to manage our business effectively. While our systems
back-up plans, business continuity plans and insurance programs are designed to mitigate such a risk, they do not eliminate it. In addition, for any of these key business processes which
we outsource, the outsourcing service providers would likely be subject to similar risks. Any disruption, termination, or substandard provision of these services could adversely affect our brand,
customer relationships, operating results and financial condition.

The concentration of our reservations, accounting and information technology functions at a limited number of facilities creates risks for us.

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 of our facilities in Oklahoma City. A disruption of normal business at any of our principal facilities in
Oklahoma City or Dublin, 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 systems
activities. If we outsource key business processes in the future, the outsourcing service providers may concentrate their activities on our behalf at a small number of locations, entailing similar or
potentially greater risks. There can be no assurance that our systems designs, business continuity plans and insurance programs will be able to successfully mitigate or eliminate these risks, and this
is particularly true with respect to events of broad geographic impact.

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 the data we hold, whether as the result of our own error or the malfeasance or errors of others, could harm our reputation and give rise to a host of liabilities. Any such
liabilities could lead to lower revenues, increased costs and other material adverse effects on our results of operations. Depending on the type of information involved, the nature of our relationship
with the person or entity to which the information relates, the cause and the jurisdiction whose laws are applicable etc., any misuse or theft of information could also result in governmental
investigations and material civil or criminal liability. The laws that would be applicable to such a failure are rapidly evolving, but are generally becoming more burdensome. See "Changes
in the U.S. and foreign legal and regulatory environment that affect our operations, including laws and regulations relating to the insurance products we sell, consumer privacy, data security,
employment matters, taxes, automobile-related liability and insurance rates, could disrupt our business, increase our expenses or otherwise have an adverse impact on our results of operations."

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

Favorable brand recognition is important to our future success. While our Hertz brand name is one of the most recognized in the world, factors
affecting brand recognition are often outside our control, and our efforts to maintain or enhance favorable brand recognition, such as making significant investments in

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ITEM 1A.    RISK FACTORS (Continued)

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 and adversely affect our results of
operations.

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 depends to a significant degree 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.

If we acquire any businesses in the future, they could prove difficult to integrate or disrupt our business.

We intend to pursue the growth of our business and from time to time we will consider opportunistic acquisitions, any of which may be significant.
Any future acquisition would involve numerous risks including:



If
we make acquisitions in the future, acquisition-related accounting charges may affect our financial condition and results of operations. In addition, the financing of any significant acquisition
may result in changes in our capital structure, including the incurrence of additional indebtedness. We may not be successful in addressing these risks or any other problems encountered in connection
with any acquisitions.

If Hertz Holdings experiences a change in ownership of a material percentage of its equity without obtaining certain approvals, our results of operations and financial
condition could be materially adversely affected.

A substantial number of our airport concession agreements, as well as certain of our other agreements with third parties, require the consent of the
airports' operators or other parties in connection with a change in the ownership of a material percentage of Hertz Holdings' equity. Certain changes in the ownership of Hertz Holdings' equity could
also require the approval of other governmental authorities (including insurance regulators, regulators of our retail used car sales activities and antitrust regulators), and we cannot offer assurance
that those approvals would be obtained on terms acceptable to us. If Hertz Holdings' owners were to change their ownership of Hertz Holdings without obtaining the necessary approvals, or if
significant conditions on our operations were imposed in connection with obtaining such approvals, our ability to conduct our business could be impaired, resulting in a material adverse effect on our
results of operations and financial condition.

34

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ITEM 1A.    RISK FACTORS (Continued)

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 workers' compensation claims and other 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 "Item 1BusinessRisk Management" and "Item 3Legal Proceedings" in this Annual Report.

We could face significant withdrawal liability if we withdraw from participation in one or more multiemployer pension plans in which we participate.

We participate in various "multiemployer" pension plans administered by labor unions representing some of our employees. We make periodic
contributions to these plans to allow them to meet their pension benefit obligations to their participants. In the event that we withdraw from participation in one of these plans, then applicable law
could require us to make an additional lump-sum contribution to the plan, and we would have to reflect that as an expense in our consolidated statement of operations and as a liability on
our consolidated balance sheet. Our withdrawal liability for any multiemployer plan would depend on the extent of the plan's funding of vested benefits. In the ordinary course of our renegotiation of
collective bargaining agreements with labor unions that maintain these plans, we may decide to discontinue participation in a plan, and in that event, we could face a withdrawal liability. Some
multiemployer plans, including one in which we participate, are reported to have significant underfunded liabilities. Such underfunding could increase the size of our potential withdrawal liability.

Environmental laws and regulations and the costs of complying with them, or any liability or obligation imposed under them, could 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, among other
things, 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 have established a compliance program for
our tanks that is intended to ensure that the tanks are properly registered with the state or other jurisdiction in which the tanks are located and have been either replaced or upgraded to meet
applicable leak detection and spill, overfill and corrosion protection requirements. However, we cannot assure you that these tank systems will at all times remain free from undetected 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 investigation and remediation, as well as any
resulting fines, could be significant.

We
have made, and will continue to make, expenditures to comply with environmental laws and regulations, including expenditures for the cleanup of contamination at or emanating from, currently and
formerly owned and leased properties, as well as contamination at other locations at which our wastes have reportedly been identified. We cannot assure you that compliance with existing or future
environmental legislation 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 "Item 1BusinessGovernmental Regulation and Environmental Matters" in this Annual Report.

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ITEM 1A.    RISK FACTORS (Continued)

Changes in the U.S. and foreign legal and regulatory environment that affect our operations, including laws and regulations relating to the insurance products we sell,
consumer privacy, data security, employment matters, taxes, automobile-related liability and insurance rates, could disrupt our business, increase our expenses or otherwise have an adverse impact on
our results of operations.

We are subject to a wide variety of laws and regulations in the United States and the other countries and jurisdictions in which we operate, and
changes in the level of government regulation of our business have the potential to materially alter our business practices and adversely affect our financial position and results of operations,
including our profitability. Depending on the jurisdiction, those changes may come about through new legislation, the issuance of new laws and regulations or changes in the interpretation of existing
laws and regulations by a court, regulatory body or governmental official.

The
optional liability insurance policies and products providing insurance coverage in our domestic car rental operations are conducted pursuant to limited licenses or exemptions under state laws
governing the licensing of insurance providers. In our international car rental operations, our offering of optional products providing insurance coverage historically has not been regulated. See
"Item 1BusinessRisk Management" for further discussion regarding how changes in the regulation of insurance intermediaries may affect us internationally. Any changes
in U.S. or foreign law that change our operating requirements with respect to optional insurance products could increase our costs of compliance or make it uneconomical to offer such products, which
would lead to a reduction in revenue and profitability. 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.

Laws
in many countries and jurisdictions limit the types of information we may collect about individuals with whom we deal or propose to deal, as well as how we collect, retain and use the information
that we are permitted to collect. In addition, the centralized nature of our information technology systems requires the routine flow of information about customers and potential customers across
national borders, particularly into the United States. The regulations applicable to privacy and data security are rapidly evolving, and additional regulation in those areas, some of it potentially
difficult for us to accommodate, is frequently proposed and occasionally adopted. Thus, changes in the worldwide legal and regulatory environment in the areas of customer privacy, data security and
cross-border data flows 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 requirements. It is also possible that we could face significant liability for failing to comply with any such existing, or new, 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. Generally speaking, expense pass-throughs have, when challenged, been upheld in
court. We may in the future be subject to potential legislative changes or administrative action which could limit, restrict and/or prohibit our ability to separately state, charge and recover such
costs, which would result in an adverse cost reallocation. If such actions were taken, it could have a material adverse impact on our revenues and results of operations.

36

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ITEM 1A.    RISK FACTORS (Continued)

The Sponsors currently control us and the interests of our Sponsors may conflict with our interests and the interests of the other stockholders now, and in the future.

Clayton, Dubilier & Rice Fund VII, L.P. and related funds, Carlyle Partners IV, L.P. and related funds and ML Global Private
Equity Fund, L.P. and related funds (together with certain of their affiliates) currently beneficially own approximately 19.5%, 17.4% and 14.3%, respectively, of the outstanding shares of the
common stock of Hertz Holdings. These funds and Hertz Holdings are parties to a Stockholders Agreement, pursuant to which the funds have agreed to vote in favor of nominees to our and Hertz Holdings'
board of directors nominated by the other funds. As a result, the Sponsors control us, Hertz Holdings, our and Hertz Holdings' board of directors, and will continue to have significant influence over
matters requiring stockholder approval and our policy and affairs for so long as they 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. The Sponsors have the ability to prevent any transaction that requires the approval of stockholders,
including many possible change in control transactions, regardless of whether or not Hertz Holdings' other stockholders believe that such a transaction is in their own best interests. Additionally,
the Sponsors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly 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. So long
as investment funds associated with or designated by the Sponsors continue to control the election of directors and/or directly or indirectly own a significant amount of the outstanding shares of
Hertz Holdings' common stock, even if that amount is less than 50%, the Sponsors will continue to be able to strongly influence and/or effectively control our decisions. See Note 13 to the
Notes to our consolidated financial statements included in this Annual Report under caption "Item 8Financial Statements and Supplemental Data."

Risks Relating to Our Substantial Indebtedness

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

As of December 31, 2009, we had an aggregate principal amount of debt outstanding of $10,055.7 million and a debt to equity ratio,
calculated using the total amount of our outstanding debt net of unamortized discounts, of 4.0 to 1. Our substantial debt could have important consequences to us. For example, it
could:



37

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ITEM 1A.    RISK FACTORS (Continued)



Any
of the foregoing impacts of our substantial indebtedness could have a material adverse effect on our business, financial condition and results of operations, our ability to obtain financing in the
future and our ability to react to changes in our business and future opportunities. Our ability to make scheduled payments on our indebtedness, or to refinance our obligations under our debt
agreements, will depend on the financial and operating performance of us and our subsidiaries, which, in turn, will be affected by prevailing economic and competitive conditions and to the financial
and business risk factors, many of which may be beyond our control, as described above. We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit
us to pay the principal, premium, if any, and interest on our indebtedness.

Despite our current indebtedness levels, we, our subsidiaries and Hertz Holdings may incur substantially more debt.

While the terms of the instruments governing our outstanding indebtedness contain certain restrictions upon our ability to incur additional
indebtedness, they do not fully prohibit us, our subsidiaries or Hertz Holdings from incurring additional indebtedness in the future and the indebtedness that we and our subsidiaries may incur may be
substantial. In May and June of 2009, Hertz Holdings issued an aggregate of $474.8 million in principal amount of convertible notes in a registered public offering, in September 2009 we issued
$2,138.1 million in the
form of the Series 2009-1 Notes and in October 2009 we issued $1,200 million in aggregate principal amount of Series 2009-2 Notes. As of
December 31, 2009, our senior secured credit facilities provided us commitments for additional aggregate borrowings (subject to borrowing base limitations) of approximately
$1,654.4 million, and permitted additional borrowings beyond those commitments under certain circumstances. For a detailed description of the amounts we have available under our debt
facilities, see "Item 7Management's Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Capital ResourcesCredit
Facilities," included in this Annual Report. As of December 31, 2009, the instruments governing our asset-backed fleet debt facilities in the United States and elsewhere provided commitments
for additional aggregate borrowings of up to $3,932.4 million, subject to borrowing base limitations. If new debt is added to our current debt levels, the related risks that we now face would
increase. In addition, the instruments governing our indebtedness do not prevent us or our subsidiaries from incurring obligations that do not constitute indebtedness.

The third-party insurance companies that provide credit enhancements in the form of financial guarantees of the Series 2005-1 and 2005-2
Rental Car Asset Backed Notes, or the "2005 Notes," could face financial instability due to factors beyond our control.

MBIA Insurance Corporation, or "MBIA," and Ambac Corporation, or "Ambac," provide credit enhancements in the form of financial guarantees for our
2005 Notes, with each providing guarantees for approximately half of the $2,871.6 million in principal amount of the 2005 Notes that was outstanding as of December 31, 2009, all of which
matures in 2010. Each of MBIA and Ambac has been downgraded one or more times and is on review for further credit downgrade or under developing outlook by one or more credit ratings agencies.

38

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ITEM 1A.    RISK FACTORS (Continued)

If
certain insolvency related events were to occur with respect to Ambac or MBIA, we would be required to apply a proportional amount of all rental payments by us to Hertz Vehicle Financing LLC
or "HVF" and all car disposition proceeds under the affected series of 2005 Notes, to pay down the amounts owed under the affected series of 2005 Notes instead of applying those proceeds to purchase
additional cars and/or for working capital purposes. If these events continued for 30 days, holders of the affected series of 2005 Notes would have the right to instruct the trustee to
foreclose on our rental car vehicles in order to generate proceeds to repay the principal amount of the affected series of 2005 Notes. If our available cash and other funding sources, including the
amounts then available under the Series 2009-1 Notes and the Series 2009-2 Notes, were not sufficient to repay the affected series of 2005 Notes, we would be
required to renegotiate with our lenders or raise additional funds, and there is no assurance that we would be successful in such renegotiation or the raising of such funds. If any of
the above occurs, it could lead to consequences that have a material adverse effect on our liquidity, business, financial condition and results of operations.

In
addition, if the above events were to occur, it could result in our inability to have access to other facilities or could accelerate outstanding indebtedness under those facilities or other
financing arrangements, any of which would have a material adverse effect on our financial condition and liquidity position.

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

We rely significantly on asset-backed financing to purchase cars for our domestic and international car rental fleets. As of December 31,
2009, Hertz and several of its subsidiaries, including certain special purpose entities, had an aggregate of $5.7 billion of rental car asset backed financing outstanding. We expect, given our
business plan, we will need to refinance approximately $1.2 billion of our international fleet debt that matures in 2010 and we are currently in discussions with banks and lenders to review our
refinancing options. We cannot assure you that we will be able to complete such financings on terms acceptable to us or on a timely basis, if at all; if we are unable to do so, our liquidity and
interest costs may be adversely affected. In addition, we expect that we will need to refinance approximately $3.4 billion in other material asset-backed financing facilities during the next
36 months. If we are unable to refinance or replace our existing asset-backed financing or continue to finance new car acquisitions through asset-backed financing on favorable terms, or at all,
our cost of financing could increase significantly and have a material adverse effect on our liquidity, financial condition and results of operations.

Substantially all of our consolidated assets have been pledged to secure certain of our outstanding indebtedness.

As of December 31, 2009, substantially all of our consolidated assets, including our car and equipment rental fleets, have been pledged for
the benefit of the lenders under our Senior Credit Facilities or are subject to securitization facilities in connection with our U.S. Fleet Debt, International Fleet Debt facilities and International
ABS Fleet Financing Facility and our other fleet debt facilities. As a result, the lenders under these 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 all of our creditors. Moreover, holders of our unsecured indebtedness may receive less, ratably, than the holders of our
senior debt, and may not be fully paid, or may not be paid at all, even when other creditors receive full payment for their claims. In that event, holders of our equity securities would not be
entitled to receive any of our assets or the proceeds therefrom. See "Item 7Management's Discussion and Analysis of Financial Condition and Results of
OperationsLiquidity and Capital ResourcesFinancing." As discussed

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ITEM 1A.    RISK FACTORS (Continued)

below,
the pledge of these assets and other restrictive covenants in our debt agreements may limit our flexibility in raising capital for other purposes. Because substantially all of our assets are
pledged under these 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 an 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 adversely affect our financial flexibility.

Certain of our credit facilities contain covenants that, among other things, restrict our ability to:



In
addition, under our Senior Credit Facilities, we are required to comply with financial covenants. If we fail to maintain a specified minimum level of borrowing capacity under our Senior ABL
Facility, we will then be subject to financial covenants under that facility, including covenants that will obligate us to maintain a specified debt to Corporate EBITDA leverage ratio and a specified
Corporate EBITDA to fixed charges coverage ratio. The financial covenants in our Senior Term Facility include obligations to maintain a specified debt to Corporate EBITDA leverage ratio and a
specified Corporate EBITDA to interest expense coverage ratio for specified periods. "EBITDA" means consolidated net income before net interest expense, consolidated income taxes and consolidated
depreciation and amortization and "Corporate EBITDA" means "EBITDA" as that term is defined under our senior credit facilities, which is generally consolidated net income before net interest expense
(other than interest expense relating to certain car rental fleet financing), consolidated income taxes, consolidated depreciation (other than depreciation related to the car rental fleet) and
amortization and before certain other items, in each case as more fully described in the agreements governing our senior credit facilities. Our ability to comply with these covenants in future periods
will depend on our ongoing financial and operating performance, which in turn will be subject to other risks identified in this Annual Report. The breach of any of these covenants or restrictions
could result in a default under either our Senior Credit Facilities or the indentures. In any such case, we may be unable to make borrowings under the Senior Credit Facilities and may not be able to
repay the amounts due under the Senior Credit Facilities and the Senior Notes and Senior Subordinated Notes. This could have serious consequences to our financial condition and

40

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ITEM 1A.    RISK FACTORS (Continued)

results
of operations and could cause us to become bankrupt or insolvent. As of December 31, 2009, we were in compliance with all of these financial covenants.

We
are also subject to operational limitations under the terms of our ABS Program. For example, there are contractual limitations with respect to the cars that secure our ABS Program. These
limitations are based on the identity or credit ratings of the cars' manufacturers, the existence of satisfactory repurchase or guaranteed depreciation arrangements for the cars or the physical
characteristics of the cars. As a result, we may be required to limit the percentage of cars from any one manufacturer or increase the credit enhancement related to the program and may not be able to
take advantage of certain cost savings that might otherwise be available through manufacturers. If these limitations prevented us from purchasing, or retaining in our fleet, cars on terms that we
would otherwise find advantageous, our results of operations could be adversely affected.

Further,
our International Fleet Debt facilities contain a number of covenants, including a covenant that restricts the ability of our subsidiary HIL to make dividends and other restricted payments
(which may include payments of intercompany indebtedness). These restrictions may limit the availability of funds from HIL and its subsidiaries to help us make payments on our indebtedness.

The instruments governing our debt contain cross default or cross acceleration provisions that may cause all of the debt issued under such instruments to become immediately
due and payable as a result of a default under an unrelated debt instrument.

The indentures governing our Senior Notes and Senior Subordinated Notes and the agreements governing our Senior Credit Facilities and U.S. Fleet Debt
facilities contain numerous covenants, and in certain cases require us to meet certain financial ratios and tests which utilize Corporate EBITDA. In addition, under the agreements governing certain of
our U.S. Fleet Debt we are required to have a financial guarantee from a third-party insurance company. Our failure to comply with the obligations contained in one of these agreements or other
instruments governing our indebtedness could result in an event of default under the applicable instrument, which could result in the related debt becoming immediately due and payable and could
further result in a cross default or cross acceleration of our debt issued under other instruments. In such event, we would need to raise funds from alternative sources, which funds may not be
available to us on favorable terms, on a timely basis or at all. Alternatively, such a default could require us to sell our assets 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 and results of operations.

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

A significant portion of our outstanding debt, including borrowings under the Senior Credit Facilities, the International Fleet Debt facilities, the
International ABS Fleet Financing Facility and certain of our other outstanding debt securities, bear interest at variable rates. As a result, an increase in interest rates, whether because of an
increase in market interest rates or an increase in our own cost of borrowing, would increase the cost of servicing our debt and could adversely affect our liquidity and results of operations. For a
discussion of how we manage our exposure to changes in interest rates through the use of interest rate swap agreements on certain portions of our outstanding debt, see
"Item 7Management's Discussion and Analysis of Financial Condition and Results of OperationsMarket RisksInterest Rate Risk."

ITEM 1B.    UNRESOLVED STAFF COMMENTS

None.

41

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ITEM 2.    PROPERTIES

We operate car rental locations at or near airports and in central business districts and suburban areas of major cities in the United States, including Puerto Rico and the U.S. Virgin Islands,
Canada, France, Germany, Italy, the United Kingdom, Spain, the Netherlands, Switzerland, Belgium, Luxembourg, the Czech Republic, the Slovak Republic, Australia, New Zealand, China and Brazil, as well
as retail used car sales locations in the United States and France. We operate equipment rental locations in the United States, Canada, France, Spain and China. We also operate headquarters, sales
offices and service facilities in the foregoing countries in support of our car rental and equipment rental operations, as well as small car rental sales offices and service facilities in a select
number of other countries in Europe and Asia.

Of
such locations, approximately 7% are owned by us. The remaining locations are leased or operated under concessions from governmental authorities and private entities. Those leases and
concession agreements typically require the payment of minimum rents or minimum concession fees and often also require us to pay or reimburse operating expenses; to pay additional rent, or concession
fees above guaranteed minimums, based on a percentage of revenues or sales arising at the relevant premises; or to do both. See Note 8 to the Notes to our consolidated financial statements
included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

We
own three major facilities in the vicinity of Oklahoma City, Oklahoma at which reservations for our car rental operations are processed, global information technology systems are serviced and major
domestic and international accounting functions are performed. We also have a long-term lease for a reservation and financial center near Dublin, Ireland, at which we have centralized our
European car rental reservation and customer relations and accounting functions. We are in the process of constructing a new European regional office in Geneva, Switzerland, which we expect to occupy
in May 2010. We are also in the process of moving our France headquarters in Paris and expect to complete the process in June 2010. We maintain our executive offices in an owned facility in Park
Ridge, New Jersey and lease a European headquarters office in Uxbridge, England.

ITEM 3.    LEGAL PROCEEDINGS

From time to time we are a party to various legal proceedings. Other than with respect to the aggregate claims for public liability and property damage pending against us, management does not believe
that any of the matters resolved, or pending against us, during 2009 are material to us and our subsidiaries taken as a whole. While we have accrued a liability with respect to claims for public
liability and property damage of $277.8 million at December 31, 2009, management does not believe any of the other pending matters described below are material. We have summarized below,
for purposes of providing background, various legal proceedings to which we were and/or are a party during 2009 or the period after December 31, 2009 but before the filing of this Annual Report
on Form 10-K. In addition to the following, various other legal actions, claims and governmental inquiries and proceedings are pending or may be instituted or asserted in the future
against us and our subsidiaries.



42

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ITEM 3.    LEGAL PROCEEDINGS (Continued)









43

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ITEM 3.    LEGAL PROCEEDINGS (Continued)







44

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ITEM 3.    LEGAL PROCEEDINGS (Continued)



We
intend to assert that we have meritorious defenses in the foregoing matters and we intend to defend ourselves vigorously.

We
have established reserves for matters where we believe that the losses are probable and reasonably estimated, including for various of the matters set forth above. Other than with respect to the
reserve established for claims for public liability and property damage, none of those reserves are material. For matters, including those described above, where we have not established a reserve, the
ultimate outcome or resolution cannot be predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated. Litigation is subject to many uncertainties and the outcome of
the individual litigated matters is not predictable with assurance. It is possible that certain of the actions, claims, inquiries or proceedings, including those discussed above, could be decided
unfavorably to us or any of our subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to
our consolidated financial condition, results of operations or cash flows in any particular reporting period.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Omitted pursuant to General Instruction I to the Form 10-K.

45

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PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
                 MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

There is no established public trading market for the common stock of Hertz. Hertz Investors, Inc., which is wholly owned by Hertz Holdings, owns all of the outstanding common stock of Hertz.

We
paid no cash dividends on our common stock in 2008 or 2009, and we do not expect to pay dividends on our common stock for the foreseeable future. The agreements governing our indebtedness restrict
our ability to pay dividends. See "Item 7Management's Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Capital
ResourcesFinancing."

ITEM 6.    SELECTED FINANCIAL DATA

The following table presents selected consolidated financial information and other data for our business. The selected consolidated statement of operations data for the years ended December 31,
2009, 2008 and 2007, and the selected consolidated balance sheet data as of December 31, 2009 and 2008 presented below were derived from our consolidated financial statements and the related
notes thereto included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data." The "Successor period ended December 31, 2005" refers to
the 11-day period from December 21, 2005 to December 31, 2005 and the "Predecessor period ended December 20, 2005" refers to the period from January 1, 2005 to
December 20, 2005. The term "Successor" refers to us following the Acquisition and the term "Predecessor" refers to us prior to the closing date, December 21, 2005, when an indirect,
wholly-owned subsidiary of Hertz Holdings acquired all of our common stock from Ford Holdings pursuant to a Stock Purchase Agreement, dated as of September 12, 2005, among Ford, Ford Holdings
and Hertz Holdings (previously known as CCMG Holdings, Inc.).

You
should read the following information in conjunction with the section of this Annual Report entitled "Item 7Management's Discussion and Analysis of Financial Condition and
Results of Operations" and

46

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ITEM 6.    SELECTED FINANCIAL DATA (Continued)

our
consolidated financial statements and related notes thereto included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

Successor



PredecessorFor the Periods FromYears ended December 31,

December 21,
2005 to
December 31,
2005



January 1,
2005 to
December 20,
2005(In millions of dollars)

2009

2008

2007

2006Statement of Operations Data(a)Revenues:Car rental

$
5,872.9

$
6,730.4

$
6,800.7

$
6,273.6

$
129.4



$
5,820.5Equipment rental


1,110.2


1,657.3


1,755.3


1,672.1


22.5




1,392.4Other(b)


118.4


137.4


129.6


112.7


2.6




101.8Total revenues


7,101.5


8,525.1


8,685.6


8,058.4


154.5




7,314.7Expenses:Direct operating


4,084.2


4,930.0


4,644.1


4,476.0


103.0




4,086.3Depreciation of revenue earning equipment(c)


1,931.4


2,194.2


2,003.4


1,757.2


43.8




1,555.9Selling, general and administrative


641.0


769.7


773.5


723.8


15.1




623.4Interest expense


653.7


870.5


917.0


903.0


26.9




510.3Interest and other income, net(d)


(64.5
)

(24.8
)

(41.2
)

(42.3
)

(1.1
)



(36.1
)Impairment charges(e)





1,168.9













Total expenses


7,245.8


9,908.5


8,296.8


7,817.7


187.7




6,739.8Income (loss) before income taxes and noncontrolling interest


(144.3
)

(1,383.4
)

388.8


240.7


(33.2
)



574.9(Provision) benefit for taxes on income(f)


48.5


197.7


(102.3
)

(83.7
)

12.2




(191.3
)Net income (loss)


(95.8
)

(1,185.7
)

286.5


157.0


(21.0
)



383.6Less: Net income attributable to noncontrolling interest


(14.7
)

(20.8
)

(19.7
)

(16.7
)

(0.3
)



(12.3
)Net income (loss) attributable to The Hertz Corporation and Subsidiaries' common stockholder

$
(110.5
)
$
(1,206.5
)
$
266.8

$
140.3

$
(21.3
)


$
371.3




December 31,2009

2008

2007

2006

2005Balance Sheet DataCash and cash equivalents

$
985.5

$
594.0

$
729.7

$
671.8

$
843.9Total assets(g)


15,996.4


16,451.3


19,255.2


18,675.7


18,580.9Total debt


9,997.0


10,972.3


11,960.1


12,276.2


12,515.0Total equity(h)(i)


2,474.1


1,459.3


2,912.1


2,533.3


2,275.1


(a)Amounts
within the Statement of Operations Data reflects the retrospective application of Accounting Standards Codification, or "ASC," 810-10,
"Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No. 51," or "ASC 810-10," which primarily changed the presentation of net income from
noncontrolling interest (formerly minority interest) and also changed the description of line items, therefore, historical Net income (loss) is now known as Net income (loss) attributable to The Hertz
Corporation and Subsidiaries' common stockholder.(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 years ended December 31, 2009, 2008, 2007 and 2006, the Successor period ended December 31, 2005 and the Predecessor period ended
December 20, 2005, depreciation of revenue earning equipment was increased by $19.3 million,


47

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ITEM 6.    SELECTED FINANCIAL DATA (Continued)

$32.7 million
and $0.6 million and reduced by $13.1 million, $1.2 million and $33.8 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 years ended December 31, 2009, 2008, 2007 and 2006, the Successor period ended December 31,
2005 and the Predecessor period ended December 20, 2005, depreciation of revenue earning equipment includes net losses of $76.5 million, $83.1 million and $21.2 million and
net gains of $35.9 million, $2.1 million and $68.3 million, respectively, from the disposal of revenue earning equipment. (d)For
the year ended December 31, 2009, reflects interest income of $16.0 million and a gain of $48.5 million, net of transaction costs,
recorded in connection with the buyback of portions of our senior notes and senior subordinated notes. This amount for all other years and periods reflected above consists of interest income.(e)For
the year ended December 31, 2008, we recorded non-cash impairment charges related to our goodwill, other intangible assets and
property and equipment.(f)For
the years ended December 31, 2009 and 2008, we established additional valuation allowances of $44.6 million and $53.3 million,
respectively, relating to the realization of deferred tax assets attributable to net operating losses, credits and other temporary differences in various jurisdictions. 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. For the year ended December 31, 2006, we
established valuation allowances of $9.8 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 certain federal and state uncertain tax positions. The Predecessor period ended December 20, 2005 includes the reversal of a
valuation allowance on foreign tax credit carryforwards of $35.0 million (established in 2004) and favorable foreign tax adjustments of $5.3 million relating to periods prior to 2005,
partly offset by a $31.3 million provision relating to the repatriation of foreign earnings.(g)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 the Senior ABL Facility, our asset-backed securities program, the International Fleet Debt Facilities, the International ABS Fleet Financing Facility, the fleet financing
facilities relating to our car rental fleets in Hawaii, Kansas, Puerto Rico and St. Thomas, the U.S. Virgin Islands; Brazil; Canada; Belgium; and our Capitalized leases. Substantially all our
other assets in the United States are also subject to liens in favor of our lenders under our Senior Credit Facilities, and substantially all our other assets outside the United States are (with
certain limited exceptions) subject to liens in favor of our lenders under the International Fleet Debt Facilities and International ABS Fleet Financing Facility or (in the case of our Canadian HERC
business) our Senior ABL Facility. None of such assets are available to satisfy the claims of our general creditors. For a description of those facilities, see "Item 7Management's
Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Capital Resources."(h)Amounts
reflect the retrospective application of ASC 810-10, which changed the presentation of noncontrolling interest (formerly minority
interest) to be part of Total equity, therefore noncontrolling interest was added to the historical Stockholder's equity.(i)Includes
equity contributions totaling $2,295.0 million to Hertz Holdings from investment funds associated with or designated by the Sponsors on or
prior to December 21, 2005.


48

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND                   RESULTS OF
OPERATIONS

The statements in this discussion and analysis regarding industry outlook, our expectations regarding the performance of our business and the other non-historical
statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in
"Item 1ARisk Factors." 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. Our actual results may differ materially from those contained in or implied by any forward-looking statements. You should read the following discussion and analysis together
with the sections entitled "Cautionary Note Regarding Forward-Looking Statements," "Item 1ARisk Factors," "Item 6Selected Financial Data" and our consolidated
financial statements and related notes included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

Overview

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

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



Our
equipment rental business also derives revenues from the sale of new equipment and consumables.

Our
expenses primarily consist of:



The
car and equipment rental industries are significantly influenced by general economic conditions. In the final three months of 2008 and in 2009, both the car and equipment rental markets
experienced unprecedented declines due to the precipitous slowdown in consumer spending as well as significantly reduced demand for industrial and construction equipment. The car rental industry is
also significantly influenced by developments in the travel industry, and, particularly, in airline passenger traffic, while the equipment rental segment is being impacted by the difficult economic
and business environment as

49

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

investment
in commercial construction and the industrial markets slow. The United States and international markets are currently experiencing a significant decline in economic activities, including a
tightening of the credit markets, reduced airline passenger traffic, reduced consumer spending and volatile fuel prices. During 2008 and 2009, these market conditions resulted in a rapid decline in
the volume of car rental and equipment rental transactions, soft industry pricing and lower residual values for the non-program cars and equipment that we sold. See
"Item 1ARisk Factors" in this Annual Report.

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 also have a significant effect on our profitability depending on our ability to adjust pricing for these changes. We continue to increase the proportion of
non-program cars we have in our worldwide fleet. In the U.S., for the year ended December 31, 2009, the percentage of non-program cars was 51% as compared to 45% for the
year ended December 31, 2008. For the year ended December 31, 2009, the percentage of non-program cars in our international fleet was 39%, compared to 41% for the year ended
December 31, 2008.

In
early 2010, Toyota announced recalls. As such, we temporarily took a portion of our Toyota fleet out of service. Approximately 13% of our total U.S. car rental fleet was affected by the largest of
these recalls. We rapidly made repairs to the recalled vehicles, and this situation is now completely resolved. There was a short-term impact on our business to cover the costs associated
with repairing these vehicles; however, we believe that this recall will not have a long-term material impact on our business. Also, we unfortunately turned away some, but not a
significant number of rentals as a result of the recall. We are also working closely with
Toyota to minimize our financial exposure. See "Item 1ARisk FactorsRisks Related to Our BusinessManufacturer recalls could create risks to our business."

In
the year ended December 31, 2009, our per car vehicle depreciation costs decreased approximately 4% and increased approximately 7% in the United States and Europe, respectively, as compared
to the prior year period. Our per car vehicle depreciation costs in the United States for 2008 increased approximately 6% from our per car vehicle depreciation costs for 2007 and increased
approximately 20% in Europe year-over-year. We expect our per car vehicle depreciation costs for the full year of 2010 in the United States and Europe to be lower than 2009.
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.

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 minimum concession fees, rent, insurance, and administrative overhead, remain fixed and cannot be adjusted for seasonal demand.

50

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

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 re-engineering 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.

In
January 2009, we announced that, as part of a comprehensive plan to further decrease costs and as a result of reduced rental demand, we were reducing our global workforce by more than 4,000
employees beginning in the fourth quarter 2008 and continuing through the first quarter of 2009, more than half of whom are not eligible for severance benefits. We incurred job reductions in the car
and equipment rental businesses, corporate and support areas, and in all geographies, with an emphasis on eliminating non-customer facing jobs. Related to these location closures and
continued cost reduction initiatives, we incurred restructuring charges for employee termination liabilities covering approximately 1,500 employee separations in the fourth quarter of 2008.

During
the first and second quarters of 2009, our equipment rental business incurred charges mainly for losses on disposal of surplus equipment and recognition of facility lease obligations related to
previously announced U.S. branch closures that were completed during the quarters. Our North American and European car rental businesses incurred charges mainly for facility lease obligations related
to previously announced off-airport location closures that were completed during the quarters. In the first quarter of 2009, our European car rental business also eliminated certain
specialty rental equipment as a future cost reduction initiative and incurred related lease termination costs. The first and second quarter 2009 restructuring charges included employee termination
liabilities covering approximately 500 and 600 employees, respectively.

During
the third and fourth quarters of 2009, our equipment rental business incurred charges mainly for costs related to facility lease obligations for previously closed branches and additional losses
on the disposal of remaining surplus equipment related to these locations. Our European car rental business incurred employee termination benefits costs associated with the migration of work to the
European shared service center and the creation of two regions within Europe to manage our European country operations. Additionally, in the third quarter of 2009, our European car rental business
recognized a loss on sale of a building due to reduced office space needs resulting from headcount reductions. The third and fourth quarter 2009 restructuring charges included employee termination
liabilities covering approximately 300 and 250 employees, respectively.

For
further information on actions taken in 2007 and 2008, see Note 11 to the Notes to our consolidated financial statements included in this Annual Report under caption
"Item 8Financial Statements and Supplementary Data."

For
the years ended December 31, 2009, 2008 and 2007, our consolidated statement of operations includes restructuring charges relating to the initiatives discussed above of
$106.8 million, $216.1 million and $96.4 million, respectively.

Additional
efficiency and cost saving initiatives are being developed in 2010. However, we presently do not have firm plans or estimates of any related expenses. See Note 11 to the Notes to our
consolidated financial statements included in this Annual Report under caption "Item 8Financial Statements and Supplementary Data."

51

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

For
the year ended December 31, 2009, based on publicly available information, we believe some U.S. car rental companies experienced declines in transaction days and varying rental rate revenue
per transaction day, or "RPD," compared to the year ended December 31, 2008. For the year ended December 31, 2009, in the United States, we experienced a 7.1% decrease in transaction
days and a 1.6% decrease in RPD versus 2008. During the year ended December 31, 2009, in our European operations, we experienced a low double digit decrease in transaction days and a low single
digit decrease in RPD versus 2008.

In
the three years ended December 31, 2009, we increased the number of our off-airport rental locations in the United States by approximately 7% to approximately 1,700 locations.
Revenues from our U.S. off-airport operations represented $954.0 million, $975.9 million and $963.8 million of our total car rental revenues in the years ended
December 31, 2009, 2008 and 2007, respectively. In 2010 and subsequent years, our strategy will include selected openings of new off-airport locations, the disciplined evaluation of
existing locations and the pursuit of same-store sales growth. Our strategy includes increasing penetration in the off-airport market and growing the online leisure market,
particularly in the longer length weekly sector, which is characterized by lower vehicle costs and lower transaction costs at a lower 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.

For
the years ended December 31, 2007, 2008 and 2009, based on publicly available information, we believe the U.S. equipment rental industry experienced downward pricing. HERC experienced
higher equipment rental volumes and pricing worldwide for the year ended December 31, 2007, with pricing increases in 2007 attributable to higher price activity in Canada and Europe offsetting
lower price activity in the U.S. HERC experienced lower equipment rental volumes and pricing worldwide for the years ended December 31, 2008 and 2009.

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 1 to the Notes to our consolidated financial
statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

Revenue Earning Equipment

Our principal assets are revenue earning equipment, which represented approximately 55% of our total assets as of December 31, 2009. Revenue
earning equipment consists of vehicles utilized in our car

52

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

rental
operations and equipment utilized in our equipment rental operations. For the year ended December 31, 2009, 53% 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. 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.

See
Note 6 to the Notes to our consolidated financial statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

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,

53

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

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 an actual 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 exceeded the long-term rate of return assumption. See Note 4 to the Notes to our consolidated financial statements included in this Annual Report under
the caption "Item 8Financial Statements and Supplementary Data."

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. We estimate the fair value of our
reporting units using a discounted cash flow methodology. 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 ongoing restructuring activities. 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 weighted average cost of
capital used to determine fair value could result in a future goodwill impairment charge.

In
the fourth quarter 2009, we performed our annual impairment analysis based upon market data as of October 1, 2009 and concluded that there was no impairment related to our goodwill and our
other indefinite-lived intangible assets.

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.

As
a result of the Acquisition, we also have recognized significant intangible assets. 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. 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. Intangible assets with finite useful lives are amortized over their respective estimated useful lives and reviewed for impairment.

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. The royalty rates utilized
in this valuation were based on actual licensing agreements. We also considered the excess earnings as a

54

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

percentage
of revenues to ensure their reasonableness. Our analysis supported our conclusion that an impairment did not exist.

See
Note 2 to the Notes to our consolidated financial statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

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 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 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 a change to reflect tax on these amounts. We have recorded a deferred tax asset for unutilized
net operating loss carryforwards in various tax jurisdictions. In the future years when assessing whether a benefit from the utilization of those net operating losses should be allowed, 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 7 to the Notes to our consolidated financial statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

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

55

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

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, remained unchanged from the date of grant.
Because the stock of Hertz Holdings became publicly traded in November 2006 and has a short trading history, it is not practicable for us to estimate the expected volatility of Hertz Holdings' share
price, or a peer company share price, because there is not sufficient historical information about past volatility. Therefore, we use the calculated value method to estimate the expected volatility,
based on the Dow Jones Specialized Consumer Services sub-sector within the consumer services industry, and we use the U.S. large capitalization component, which includes the top 70% of the
index universe (by market value). We use the simplified method for estimating the expected term. We believe it is appropriate to continue to use this simplified method because we do not have
sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time Hertz Holdings' common stock has been publicly traded. 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. We assume that in each year, 1% of the options that are outstanding but not vested will be forfeited, based on our U.S. pension plan withdrawal rate
assumptions. Considering our brief history of issuing stock options and higher than average recent employee turnover, especially among option holders, we will assess next year if a change in this
assumption is warranted. 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 5 to the Notes to our consolidated financial statements included in this Annual Report under the caption
"Item 8Financial Statements and Supplementary Data."

56

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

Results of Operations

In the following discussion, comparisons are made between the years ended December 31, 2009, 2008 and 2007. The following table sets 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 RevenuesYears Ended December 31,

Years Ended December 31,2009

2008

2007

2009

2008

2007Revenues:Car rental

$
5,872.9

$
6,730.4

$
6,800.7


82.7
%

79.0
%

78.3
%Equipment rental


1,110.2


1,657.3


1,755.3


15.6


19.4


20.2Other


118.4


137.4


129.6


1.7


1.6


1.5Total revenues


7,101.5


8,525.1


8,685.6


100.0


100.0


100.0Expenses:Direct operating


4,084.2


4,930.0


4,644.1


57.5


57.8


53.4Depreciation of revenue earning equipment


1,931.4


2,194.2


2,003.4


27.2


25.8


23.1Selling, general and administrative


641.0


769.7


773.5


9.0


9.0


8.9Interest expense


653.7


870.5


917.0


9.2


10.2


10.6Interest and other income, net


(64.5
)

(24.8
)

(41.2
)

(0.9
)

(0.3
)

(0.5
)Impairment charges





1,168.9








13.7


Total expenses


7,245.8


9,908.5


8,296.8


102.0


116.2


95.5Income (loss) before income taxes and noncontrolling interest


(144.3
)

(1,383.4
)

388.8


(2.0
)

(16.2
)

4.5(Provision) benefit for taxes on income


48.5


197.7


(102.3
)

0.6


2.2


(1.2
)Net income (loss)


(95.8
)

(1,185.7
)

286.5


(1.4
)

(14.0
)

3.3Less: Net income attributable to noncontrolling interest


(14.7
)

(20.8
)

(19.7
)

(0.2
)

(0.2
)

(0.2
)Net income (loss) attributable to The Hertz Corporation and Subsidiaries' common stockholder

$
(110.5
)
$
(1,206.5
)
$
266.8


(1.6
)%

(14.2
)%

3.1
%


57

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

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

Years Ended, or as of December 31,2009

2008

2007Selected Car Rental Operating Data:Worldwide number of transactions (in thousands)


24,520


27,373


28,977Domestic


17,791


19,822


21,547International


6,729


7,551


7,430Worldwide transaction days (in thousands)(a)


117,601


127,890


129,355Domestic


79,644


85,702


88,990International


37,957


42,188


40,365Worldwide rental rate revenue per transaction day(b)

$
42.68

$
43.31

$
44.44Domestic

$
42.20

$
42.88

$
43.77International

$
43.71

$
44.19

$
45.92Worldwide average number of company-operated cars during the period


410,900


455,200


461,100Domestic


274,000


302,200


313,300International


136,900


153,000


147,800Adjusted pre-tax income (in millions of dollars)(c)

$
465.3

$
289.1

$
605.0Worldwide revenue earning equipment, net (in millions of dollars)

$
7,019.3

$
6,501.4

$
7,610.4Selected Worldwide Equipment Rental Operating Data:Rental and rental related revenue (in millions of dollars)(d)

$
989.5

$
1,434.7

$
1,539.7Same store revenue growth, including growth initiatives(e)


(29.1
)%

(5.7
)%

2.9
%Average acquisition cost of rental equipment operated during the period (in millions of dollars)

$
2,874.7

$
3,369.2

$
3,305.3Adjusted pre-tax income (in millions of dollars)(c)

$
76.4

$
272.0

$
373.8Revenue earning equipment, net (in millions of dollars)

$
1,832.3

$
2,190.1

$
2,697.5


(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 as it represents the
best measurement of the changes in underlying pricing in the car rental business and encompasses the elements in car rental pricing that management has the ability to control. The optional insurance
products are packaged within certain negotiated corporate, government and membership programs and within certain retail rates being charged. Based upon these existing programs and rate packages,
management believes that these optional insurance products should be consistently included in the daily pricing of car rental transactions. On the other hand, non-rental rate revenue items
such as refueling and concession pass-through expense items are driven by factors beyond the control of management (i.e. the price of fuel and the concession fees charged by
airports). Additionally, NeverLost units are an optional revenue product which management does not consider to be part of their daily pricing of car rental transactions.


58

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

The
following table reconciles our car rental revenue to our rental rate revenue and rental rate revenue per transaction day (based on
December 31, 2008 foreign exchange rates) for the years ended December 31, 2009, 2008 and 2007 (in millions of dollars, except as noted):


Years Ended December 31,2009

2008

2007Car rental revenue per statement of operations

$
5,872.9

$
6,730.4

$
6,800.7Non-rental rate revenue


(802.0
)

(988.0
)

(956.1
)Foreign currency adjustment


(51.2
)

(203.6
)

(96.2
)Rental rate revenue

$
5,019.7

$
5,538.8

$
5,748.4Transaction days (in thousands)


117,601


127,890


129,355Rental rate revenue per transaction day (in whole dollars)

$
42.68

$
43.31

$
44.44


(c)Adjusted
pre-tax income is calculated as income (loss) before income taxes and noncontrolling interest plus non-cash purchase
accounting charges, non-cash debt charges and certain one-time charges and non-operational items. Adjusted pre-tax income is the measure utilized by
management in making decisions about allocating resources to segments and measuring their performance. Management believes this measure best reflects the financial results from ongoing operations. The
following table reconciles income (loss) before income taxes and noncontrolling interest by segment to adjusted pre-tax income by segment for the years ended December 31, 2009, 2008
and 2007 (in millions of dollars):


Year Ended December 31, 2009Car
Rental

Equipment
RentalIncome (loss) before income taxes and noncontrolling interest

$
190.1

$
(20.7
)Adjustments:Purchase accounting(1)


38.2


49.6Non-cash debt charges(2)


131.7


9.0Restructuring charges


58.7


38.2Restructuring related charges(3)


42.3


0.3Third-party bankruptcy reserve(4)


4.3


Adjusted pre-tax income

$
465.3

$
76.4





Year Ended December 31, 2008Car
Rental

Equipment
RentalLoss before income taxes and noncontrolling interest

$
(385.3
)
$
(629.3
)Adjustments:Purchase accounting(1)


40.2


58.8Non-cash debt charges(2)


71.1


10.3Derivative losses(5)


2.2


Restructuring charges


98.4


103.2Restructuring related charges(3)


19.5


3.1Impairment charges(6)


443.0


725.9Adjusted pre-tax income

$
289.1

$
272.0


59

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)




Year Ended December 31, 2007Car
Rental

Equipment
RentalIncome before income taxes and noncontrolling interest

$
468.6

$
308.5Adjustments:Purchase accounting(1)


35.3


58.1Non-cash debt charges(2)


66.5


11.2Derivative gains(5)


(4.1
)

Restructuring charges


64.5


4.9Vacation accrual adjustment(7)


(25.8
)

(8.9
)Adjusted pre-tax income

$
605.0

$
373.8


(1)Represents
the purchase accounting effects of the Acquisition on our results of operations relating to increased depreciation and amortization of tangible
and intangible assets and accretion of revalued workers' compensation and public liability and property damage liabilities. Also represents the purchase accounting effects of subsequent acquisitions
on our results of operations relating to increased amortization of intangible assets.(2)Represents
non-cash debt charges relating to the amortization of deferred debt financing costs and debt discounts. For the year ended
December 31, 2009, also includes $74.6 million 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. During the years ended December 31, 2008 and 2007, also includes $11.8 million and $20.4 million, respectively,
associated with the ineffectiveness of our HVF interest rate swaps. During the year ended December 31, 2008, also includes $30.0 million related to the write-off of deferred
financing costs associated with those countries outside the United States as to which take-out asset-based facilities have not been entered into. During the year ended December 31,
2007, also includes the write-off of $16.2 million of unamortized debt costs associated with a debt modification.(3)Represents
incremental, one-time 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.(4)Represents
an allowance for uncollectible program car receivables related to a bankrupt European dealer affiliated with a U.S. car manufacturer.(5)Represents
unrealized and realized gains and losses on our interest rate swaptions.(6)Represents
non-cash impairment charges related to our goodwill, other intangible assets and property and equipment.(7)Represents
decreases in the employee vacation accrual relating to a change in our U.S. vacation policy in 2007 which provides for vacation entitlement to be
earned ratably throughout the year versus the previous policy which provided for full vesting on January 1 each year.


(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 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


60

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

revenue
to our equipment rental and rental related revenue (based on December 31, 2008 foreign exchange rates) for the years ended December 31, 2009, 2008 and 2007 (in millions of
dollars):


Years ended December 31,2009

2008

2007Equipment rental revenue per statement of operations

$
1,110.2

$
1,657.3

$
1,755.3Equipment sales and other revenue


(109.1
)

(177.1
)

(190.2
)Foreign currency adjustment


(11.6
)

(45.5
)

(25.4
)Rental and rental related revenue

$
989.5

$
1,434.7

$
1,539.7


(e)Same
store revenue growth represents the change in the current period total same store revenue over the prior period total same store revenue as a
percentage of the prior period. The same store revenue amounts are adjusted in all periods to eliminate the effect of fluctuations in foreign currency. Our management believes eliminating the effect
of fluctuations in foreign currency is appropriate so as not to affect the comparability of underlying trends.


Year Ended December 31, 2009 Compared with Year Ended December 31, 2008

REVENUES

Years Ended December 31,(in millions of dollars)

2009

2008

$ Change

% ChangeRevenues by SegmentCar rental

$
5,979.0

$
6,858.2

$
(879.2
)

(12.8
)%Equipment rental


1,110.9


1,658.1


(547.2
)

(33.0
)%Other reconciling items


11.6


8.8


2.8


31.8
%Total revenues

$
7,101.5

$
8,525.1

$
(1,423.6
)

(16.7
)%


Car Rental Segment

Revenues from our car rental segment decreased 12.8%, primarily as a result of lower RPD, an 8.0% decrease in car rental transaction days worldwide
and decreases in refueling fees of $124.3 million and airport concession recovery fees of $54.1 million, including the effects of foreign currency translation of approximately
$156.9 million.

RPD
for worldwide car rental for the year ended December 31, 2009 declined 1.4% from 2008, due to declines in U.S. and International RPD of 1.6% and 1.1%, respectively. U.S. airport RPD
decreased 0.2% and U.S. off-airport RPD declined by 2.4%.

Equipment Rental Segment

Revenues from our equipment rental segment decreased 33.0%, primarily due to a 27.2% decrease in equipment rental volume, a 7.4% decline in pricing,
a decrease in equipment sales of $65.4 million and the effects of foreign currency translation of approximately $26.9 million.

Other

Revenues from all other sources increased 31.8%, due to increases in revenues from our third-party claim management services.

61

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

EXPENSES

Years Ended December 31,(in millions of dollars)

2009

2008

$ Change

% ChangeExpenses:Fleet related expenses

$
880.1

$
1,210.9

$
(330.8
)

(27.3
)%Personnel related expenses


1,321.3


1,560.1


(238.8
)

(15.3
)%Other direct operating expenses


1,882.8


2,159.0


(276.2
)

(12.8
)%Direct operating


4,084.2


4,930.0


(845.8
)

(17.2
)%Depreciation of revenue earning equipment


1,931.4


2,194.2


(262.8
)

(12.0
)%Selling, general and administrative


641.0


769.7


(128.7
)

(16.7
)%Interest expense


653.7


870.5


(216.8
)

(24.9
)%Interest and other income, net


(64.5
)

(24.8
)

(39.7
)

160.1
%Impairment charges





1,168.9


(1,168.9
)

(100.0
)%Total expenses

$
7,245.8

$
9,908.5

$
(2,662.7
)

(26.9
)%


Total expenses decreased 26.9%, and total expenses as a percentage of revenues decreased from 116.2% for the year ended December 31, 2008 to 102.0% for
the year ended December 31, 2009.

Direct Operating Expenses

Direct operating expenses decreased 17.2% as a result of decreases in fleet related expenses, other direct operating expenses and personnel related
expenses.



Depreciation of Revenue Earning Equipment

Car Rental Segment

Depreciation of revenue earning equipment for our car rental segment of $1,614.2 million for the year ended December 31, 2009 decreased
12.5% from $1,843.8 million for the year ended December 31,

62

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

2008.
The decrease was primarily due to a reduction in average fleet operated, higher net proceeds received in excess of book value on the disposal of used vehicles and the effects of foreign currency
translation of approximately $42.8 million, partly offset by a $13.2 million net increase in depreciation in certain of our car rental operations resulting from changes in depreciation
rates to reflect the estimated residual value of vehicles.

Equipment Rental Segment

Depreciation of revenue earning equipment in our equipment rental segment of $317.2 million for the year ended December 31, 2009
decreased 9.5% from $350.4 million for the year ended December 31, 2008. The decrease was primarily due to a 14.7% reduction in average acquisition cost of rental equipment operated
during the period and the effects of foreign currency translation of approximately $6.2 million, partly offset by lower net proceeds received in excess of book value on the disposal of used
equipment and a $6.1 million net increase in depreciation in certain of our equipment rental operations resulting from changes in depreciation rates to reflect the estimated residual value of
equipment.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 16.7%, due to decreases in advertising, administrative expenses and sales promotion expenses,
including the effects of foreign currency translation of approximately $15.8 million.



Interest Expense

Car Rental Segment

Interest expense for our car rental segment of $316.1 million for the year ended December 31, 2009 decreased 30.1% from
$452.4 million for the year ended December 31, 2008. The decrease was primarily due to a decrease in weighted average interest rate on our borrowings and a decrease in the weighted
average debt outstanding due to reduced fleet size.

Equipment Rental Segment

Interest expense for our equipment rental segment of $53.3 million for the year ended December 31, 2009 decreased 51.9% from
$110.8 million for the year ended December 31, 2008. The decrease was primarily due to a decrease in weighted average interest rate on our borrowings and a decrease in the weighted
average debt outstanding due to reduced fleet size.

63

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

Other

Other interest expense relating to interest on corporate debt of $284.3 million for the year ended December 31, 2009 decreased 7.5%
from $307.3 million for the year ended December 31, 2008.

Interest and Other Income, Net

Interest and other income, net increased $39.7 million due to a gain of $48.5 million, net of transaction costs recorded in connection
with the buyback of portions of our Senior Notes and Senior Subordinated Notes, partly offset by a decrease in interest income of $8.8 million. The decrease in interest income related to lower
cash balances and interest rates during the period, partly offset by interest income received in connection with a value added tax reclaim in the United Kingdom.

Impairment Charges

Impairment charges represent non-cash impairment charges incurred during the fourth quarter of 2008 relating to our goodwill, other
intangible assets and property and equipment. See Notes 1 and 2 to the Notes to our consolidated financial statements included in this Annual Report under the caption
"Item 8Financial Statements and Supplementary Data."

Adjusted Pre-Tax Income

Car Rental Segment

Adjusted pre-tax income for our car rental segment of $465.3 million increased 60.9% from $289.1 million for the year ended
December 31, 2008. The increase was primarily due to strong cost management performance, lower overall fleet costs and staffing/wage levels commensurate with rental volumes. Adjustments to our
car rental segment income before income taxes and noncontrolling interest on a GAAP basis for the years ended December 31, 2009 and 2008, totaled $275.2 million and
$674.4 million, respectively. See footnote c to the table under "Results of Operations" for a summary and description of these adjustments.

Equipment Rental Segment

Adjusted pre-tax income for our equipment rental segment of $76.4 million decreased 71.9% from $272.0 million for the year
ended December 31, 2008. The decrease was primarily due to reductions in volume and pricing and lower net proceeds received in excess of book value on the disposal of used equipment, partly
offset by strong cost management performance. Adjustments to our equipment rental segment income before income taxes and noncontrolling interest on a GAAP basis for the years ended December 31,
2009 and 2008, totaled $97.1 million and $901.3 million, respectively. See footnote c to the table under "Results of Operations" for a summary and description of these adjustments.

Ratio of Adjusted Pre-Tax Income to Revenues

Adjusted pre-tax income for our car rental segment as a percent of its revenues increased from 4.2% in 2008 to 7.8% in 2009. Adjusted
pre-tax income for our equipment rental segment as a percent of its revenues decreased from 16.4% in 2008 to 6.9% in 2009.

The
ratio of adjusted pre-tax income to revenues for our two reportable segments has historically reflected the different environments in which they operate, although the difference has
been eliminated for the year ended December 31, 2009 because of the more rapid decline in revenues in our equipment

64

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

rental
segment. Our infrastructure costs are higher within our car rental segment due to the number and type of locations in which it operates and the corresponding headcount. In addition, our revenue
earning equipment in our equipment rental segment generates lower depreciation expense due to its longer estimated useful life.

BENEFIT FOR TAXES ON INCOME, NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS AND NET LOSS ATTRIBUTABLE TO THE HERTZ CORPORATION AND SUBSIDIARIES' COMMON STOCKHOLDER

Years Ended
December 31,(in millions of dollars)

2009

2008

$ Change

% ChangeLoss before income taxes

$
(144.3
)
$
(1,383.4
)
$
1,239.1


(89.6
)%Benefit for taxes on income


48.5


197.7


(149.2
)

(75.5
)%Net loss


(95.8
)

(1,185.7
)

1,089.9


(91.9
)%Less: Net income attributable to noncontrolling interests


(14.7
)

(20.8
)

6.1


(29.4
)%Net loss attributable to The Hertz Corporation and Subsidiaries' common stockholder

$
(110.5
)
$
(1,206.5
)
$
1,096.0


(90.8
)%


Benefit for Taxes on Income

The effective tax rate for the year ended December 31, 2009 was 33.6% as compared to 14.3% in the year ended December 31, 2008. The
benefit for taxes on income decreased 75.5%, primarily due to non-recurring 2008 impairment charges. See Note 7 to the Notes to our consolidated financial statements included in
this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests decreased 29.4% due to a decrease in our majority-owned subsidiary Navigation Solutions, L.L.C.'s
net income for the year ended December 31, 2009 as compared to the year ended December 31, 2008.

Net Loss Attributable to The Hertz Corporation and Subsidiaries' Common Stockholder

The net loss attributable to The Hertz Corporation and Subsidiaries' common stockholder decreased 90.8% primarily due to the impairment of our
goodwill, other intangible assets and property and equipment in 2008 and strong cost management performance, partly offset by lower rental volume and pricing in our worldwide car and equipment rental
operations, as well as the net effect of other contributing factors noted above. The impact of changes in exchange rates on net loss was mitigated by the fact that not only revenues but also most
expenses outside of the United States were incurred in local currencies.

65

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

Year Ended December 31, 2008 Compared with Year Ended December 31, 2007

REVENUES

Years Ended
December 31,(in millions of dollars)

2008

2007

$ Change

% ChangeRevenues by SegmentCar rental

$
6,858.2

$
6,920.6

$
(62.4
)

(0.9
)%Equipment rental


1,658.1


1,755.9


(97.8
)

(5.6
)%Other reconciling items


8.8


9.1


(0.3
)

(3.3
)%Total revenues

$
8,525.1

$
8,685.6

$
(160.5
)

(1.8
)%


Car Rental Segment

Revenues from our car rental segment decreased 0.9%, primarily as a result of lower RPD, a 1.1% decrease in car rental transaction days worldwide and
a decrease in airport concession recovery fees of $10.4 million, partly offset by the effects of foreign currency translation of approximately $121.4 million and an increase in refueling
fees of $31.9 million.

RPD
for worldwide car rental for the year ended December 31, 2008 declined 2.3% from 2007, due to declines in U.S. and International RPD of 2.0% and 3.5%, respectively. U.S. airport RPD
decreased 1.9% and U.S. off-airport RPD declined by 1.0%. Our strategy includes increasing penetration in the off-airport market and growing the online leisure market,
particularly in the longer length weekly sector, which is characterized by lower vehicle costs and lower transaction costs at lower RPD. Increasing our penetration in these sectors is consistent with
our long term strategy to generate profitable growth.

Equipment Rental Segment

Revenues from our equipment rental segment decreased 5.6%, primarily due to a 6.1% decrease in equipment rental volume and a 1.4% decline in pricing,
partly offset by the effects of foreign currency translation of approximately $19.6 million.

Other

Revenues from all other sources decreased 3.3%, primarily due to decreases in our third-party claim management services.

66

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

EXPENSES

Years Ended
December 31,(in millions of dollars)

2008

2007

$ Change

% ChangeExpenses:Fleet related expenses

$
1,210.9

$
1,097.9

$
113.0


10.3
%Personnel related expenses


1,560.1


1,609.4


(49.3
)

(3.1
)%Other direct operating expenses


2,159.0


1,936.8


222.2


11.5
%Direct operating


4,930.0


4,644.1


285.9


6.2
%Depreciation of revenue earning equipment


2,194.2


2,003.4


190.8


9.5
%Selling, general and administrative


769.7


773.5


(3.8
)

(0.5
)%Interest expense


870.5


917.0


(46.5
)

(5.1
)%Interest and other income, net


(24.8
)

(41.2
)

16.4


(39.9
)%Impairment charges


1,168.9





1,168.9


100.0
%Total expenses

$
9,908.5

$
8,296.8

$
1,611.7


19.4
%


Total expenses increased 19.4%, and total expenses as a percentage of revenues increased from 95.5% for the year ended December 31, 2007 to 116.2% for
the year ended December 31, 2008.

Direct Operating Expenses

Direct operating expenses increased 6.2% as a result of increases in other direct operating expenses and fleet related expenses, partly offset by a
decrease in personnel related expenses.



Depreciation of Revenue Earning Equipment

Car Rental Segment

Depreciation of revenue earning equipment for our car rental segment of $1,843.8 million for the year ended December 31, 2008 increased
8.8% from $1,695.4 million for the year ended December 31, 2007. The increase was primarily due to a $36.6 million net increase in depreciation in certain of our car rental

67

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

operations
resulting from changes in depreciation rates to reflect the estimated residual value of vehicles, lower net proceeds received in excess of book value on the disposal of used vehicles and
the effects of foreign currency translation of approximately $21.3 million.

Equipment Rental Segment

Depreciation of revenue earning equipment in our equipment rental segment of $350.4 million for the year ended December 31, 2008
increased 13.8% from $308.0 million for the year ended December 31, 2007. The increase was primarily due to lower net proceeds received in excess of book value on the disposal of used
equipment, a 1.8% increase in the average acquisition cost of rental equipment operated during the period and the effects of foreign currency translation of approximately $4.4 million, partly
offset by a $3.9 million net decrease in depreciation in certain of our equipment rental operations resulting from changes in depreciation rates to reflect the estimated residual value of
equipment.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 0.5%, primarily due to a decrease in advertising and sales promotion expenses, partly offset
by the effects of foreign currency translation of approximately $76.1 million and an increase in administrative expenses.



Interest Expense

Car Rental Segment

Interest expense for our car rental segment of $452.4 million for the year ended December 31, 2008 increased 2.2% from
$442.5 million for the year ended December 31, 2007. The increase was primarily due to the effects of foreign currency translation and increased interest expense relating to the
International ABS Fleet Financing Facility entered into in 2008.

Equipment Rental Segment

Interest expense for our equipment rental segment of $110.8 million for the year ended December 31, 2008 decreased 24.8% from
$147.4 million for the year ended December 31, 2007. The decrease was primarily due to a decrease in weighted average interest rate on our borrowings and a decrease in the weighted
average debt outstanding due to reduced fleet size.

Other

Other interest expense relating to interest on corporate debt of $307.3 million for the year ended December 31, 2008 decreased 6.1%
from $327.1 million for the year ended December 31, 2007 primarily

68

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

due
to a decrease in weighted average interest rate on our borrowings and a decrease in the weighted average debt outstanding.

Interest and Other Income, Net

Consolidated interest and other income, net decreased 39.9% due to a decrease in interest income as a result of lower consolidated cash balances
during the period.

Impairment Charges

Impairment charges represent non-cash impairment charges incurred during the fourth quarter of 2008 relating to our goodwill, other
intangible assets and property and equipment. See Notes 1 and 2 to the Notes to our consolidated financial statements included in this Annual Report under the caption
"Item 8Financial Statements and Supplementary Data."

Adjusted Pre-Tax Income

Car Rental Segment

Adjusted pre-tax income for our car rental segment of $289.1 million decreased 52.2% from $605.0 million for the year ended
December 31, 2007. The decrease was primarily due to lower RPD, the decrease in car rental transaction days worldwide, higher fleet related costs, increases in other operating costs and lower
net proceeds received in excess of book value on the disposal of used vehicles. Adjustments to our car rental segment income before income taxes and noncontrolling interest on a GAAP basis for the
years ended December 31, 2008 and 2007, totaled $674.4 million and $136.4 million, respectively. See footnote c to the table under "Results of Operations" for a summary and
description of these adjustments.

Equipment Rental Segment

Adjusted pre-tax income for our equipment rental segment of $272.0 million decreased 27.2% from $373.8 million for the year
ended December 31, 2007. The decrease was primarily due a decrease in volume and pricing, higher fleet related costs and lower net proceeds received in excess of book value on the disposal of
used equipment. Adjustments to our equipment rental segment income before income taxes and noncontrolling interest on a GAAP basis for the years ended December 31, 2008 and 2007, totaled
$901.3 million and $65.3 million, respectively. See footnote c to the table under "Results of Operations" for a summary and description of these adjustments.

Ratio of Adjusted Pre-Tax Income to Revenues

Adjusted pre-tax income for our car rental segment as a percent of its revenues decreased from 8.7% in 2007 to 4.2% in 2008. Adjusted
pre-tax income for our equipment rental segment as a percent of its revenues decreased from 21.3% in 2007 to 16.4% in 2008.

The
ratio of adjusted pre-tax income to revenues for our two segments reflects the different environments in which they operate. Our infrastructure costs are higher within our car rental
segment due to the number and type of locations in which it operates and the corresponding headcount. Within our equipment rental segment, our revenue earning equipment generates lower depreciation
expense due to its longer estimated useful life.

69

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

(PROVISION) BENEFIT FOR TAXES ON INCOME, NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS AND NET INCOME (LOSS) ATTRIBUTABLE TO THE HERTZ CORPORATION AND SUBSIDIARIES'
COMMON STOCKHOLDER

Years Ended
December 31,(in millions of dollars)

2008

2007

$ Change

% ChangeIncome (loss) before income taxes

$
(1,383.4
)
$
388.8

$
(1,772.2
)

(455.8
)%(Provision) benefit for taxes on income


197.7


(102.3
)

300.0


293.1
%Net income (loss)


(1,185.7
)

286.5


(1,472.2
)

(513.8
)%Less: Net income attributable to noncontrolling interests


(20.8
)

(19.7
)

(1.1
)

(5.6
)%Net income (loss) attributable to The Hertz Corporation and Subsidiaries' common stockholder

$
(1,206.5
)
$
266.8

$
(1,473.3
)

(552.2
)%


(Provision) Benefit for Taxes on Income

The effective tax rate for the year ended December 31, 2008 decreased to 14.3% from 26.3% in the year ended December 31, 2007. The
(provision) benefit for taxes on income decreased 293.1%, primarily due to tax benefits associated with an increase in the valuation allowance for losses in certain non-U.S. jurisdictions
and the recording of a valuation allowance on certain U.S. deferred tax assets where management determined the likelihood exists the assets may not be realized as well as goodwill impairment charges,
mentioned above, for which no benefit can be realized. See Note 7 to the Notes to our consolidated financial statements included in this Annual Report under the caption
"Item 8Financial Statements and Supplementary Data."

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests increased 5.6% primarily due to an increase in our majority-owned subsidiary Navigation
Solutions, L.L.C.'s net income in 2008 as compared to 2007.

Net Income (Loss) Attributable to The Hertz Corporation and Subsidiaries' Common Stockholder

The net loss attributable to The Hertz Corporation and Subsidiaries' common stockholder decreased 552.2% primarily due to the impairment of our
goodwill, other intangible assets and property and equipment, lower rental volume and pricing in our worldwide car and equipment rental operations, increased restructuring and restructuring related
charges and higher fleet related costs, as well as the net effect of other contributing factors noted above. The impact of changes in exchange rates on net income (loss) was mitigated by the fact that
not only revenues but also most expenses outside of the United States were incurred in local currencies.

Liquidity and Capital Resources

As of December 31, 2009, we had cash and cash equivalents of $985.5 million, an increase of $391.5 million from
December 31, 2008. As of December 31, 2009, we had $365.2 million of restricted cash and cash equivalents to be used for the purchase of revenue earning vehicles and other
specified uses under our Fleet Financing facilities (defined below), our LKE Program and to satisfy certain of our

70

---



ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

self-insurance
regulatory reserve requirements. The decrease in restricted cash and cash equivalents of $366.2 million from December 31, 2008 to December 31, 2009,
primarily related to the timing of purchases and sales of revenue earning vehicles.

Our
domestic and international operations are funded by cash provided by operating activities and by extensive financing arrangements maintained by us in the United States, Europe, Puerto Rico,
Australia, New Zealand, Canada and Brazil. Net cash provided by operating activities during the year ended December 31, 2009 was $1,783.5 million, a decrease of $761.5 million
from the year ended December 31, 2008. The decrease was primarily driven by a decrease in net income before depreciation, amortization, non-cash impairment charges and other
non-cash expenses as well as a significant change in accounts payable driven by effective management of vendor terms taken in late 2008 and an increase in cash payments relating to the
buydown of our rate on our interest rate swaps and restructuring. Net cash provided by operating activities during the year ended December 31, 2008 was $2,545.0 million, a decrease of
$263.7 million from the year ended December 31, 2007. The decrease was primarily driven by a decrease in net income before depreciation, amortization, non-cash impairment
charges and other non-cash expenses.

Our
primary use of cash in investing activities is for the acquisition of revenue earning equipment, which consists of cars and equipment. Net cash used in investing activities during the year ended
December 31, 2009 was $1,289.7 million, a decrease of $618.5 million from the year ended December 31, 2008. The decrease is primarily due to a reduction in revenue earning
equipment expenditures and the year-over-year change in restricted cash and cash equivalents, partly offset by a decrease in proceeds from the disposal of revenue earning
equipment. The year-over-year change in restricted cash and cash equivalents was primarily related to the economic conditions which affected the demand of revenue earning
equipment and our LKE Program. Net cash used in investing activities during the year ended December 31, 2008 was $1,908.3 million, a decrease of $150.5 million from the year ended
December 31, 2007. The decrease is primarily due to a reduction in revenue earning equipment expenditures, partly offset by a decrease in proceeds from disposal of revenue earning equipment.

For
the year ended December 31, 2009, our expenditures for revenue earning equipment were $7,527.3 million and our proceeds from the disposal of such equipment were
$6,024.9 million compared to $10,151.0 million and $8,511.2 million, respectively, for the year ended December 31, 2008. For the year ended December 31, 2009, our
capital expenditures for property and non-revenue earning equipment were $100.7 million and our proceeds from the disposal of such equipment were $23.7 million compared to
$193.8 million and $68.5 million, respectively, for the years ended December 31, 2008.

For
the year ended December 31, 2009, net expenditures for revenue earning equipment decreased as compared to 2008. This decrease was due to a decrease in year-over-year
expenditures for revenue earning equipment, partly offset by a year-over-year decrease in disposal proceeds relating to revenue earning equipment. For the year ended
December 31, 2009, net expenditures for property and equipment were lower than our net expenditures in 2008 relating to a decrease in year-over-year expenditures, partly
offset by a year-over-year decrease in disposal proceeds. For the full year 2010, we expect the level of net expenditures for revenue earning equipment, property and
non-revenue earning equipment to be higher than the full year 2009. See "Capital Expenditures" below.

Net
cash used in financing activities during the year ended December 31, 2009 was $137.5 million, a decrease of $558.4 million from the year ended December 31, 2008. The
decrease is primarily due to increases in proceeds from the issuance of long-term debt, sale of common stock and debt offering,

71

---



ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

partly
offset by increases in repayments under revolving lines of credit, net and repayment of long-term debt. Net cash used in financing activities during the year ended
December 31, 2008 was $695.9 million, a decrease of $40.0 million from the year ended December 31, 2007. The decrease is primarily due to decreases repayments of
short-term borrowings and long-term debt, partly offset by a decrease in proceeds from short-term borrowings.

Our
car rental and equipment rental operations are seasonal businesses with decreased levels of business in the winter months and typically heightened activity during the spring and summer. This is
particularly true of our airport car rental operations and our equipment rental operations. To accommodate increased demand, we maintain a larger fleet by holding vehicles and equipment and purchasing
additional fleet which increases our financing requirements in the second and third quarters of the year. These seasonal financing needs are funded by increasing the utilization of our various
corporate and fleet credit facilities and the variable funding notes portion of our U.S. Fleet Debt facilities as defined in Note 3 to the Notes to our consolidated financial statements
included in this Annual Report under caption "Item 8Financial Statements and Supplemental Data." As business demand moderates during the winter, we reduce our fleet accordingly and
dispose of vehicles and equipment. The disposal proceeds are used to reduce debt.

In
April 2009, we made aggregate open market repurchases, at a discount, of approximately $68.0 million and $81.5 million in face value of our Senior Notes and Senior Subordinated Notes,
respectively. In addition, we and our affiliates have repurchased and may in the future repurchase or otherwise retire debt of our subsidiaries and take other steps to reduce such debt or otherwise
improve our balance sheet. These actions include open market purchases, negotiated repurchases and other retirements of outstanding debt. The amount of debt that may be repurchased or otherwise
retired, if any, will depend on market conditions, trading levels of such debt from time to time, our cash position and other considerations.

As
of December 31, 2009, we had approximately $9,997.0 million of total indebtedness outstanding. Cash paid for interest during the year ended December 31, 2009, was
$622.6 million, net of amounts capitalized. Accordingly, we are highly leveraged and a substantial portion of our liquidity needs arise from debt service on indebtedness incurred in connection
with the Acquisition and from the funding of our costs of operations and capital expenditures.

In
2009 we raised new capital intended to fund the 2010 fleet debt maturities as they occur. We began addressing these liquidity needs at the end of the second quarter and the beginning of the third
quarter by completing the 2009 Hertz Holdings Offerings, pursuant to which Hertz Holdings received approximately $990 million of net proceeds, after deducting underwriting discounts and
commissions and before offering expenses payable by Hertz Holdings.

On
September 18, 2009, HVF, a bankruptcy-remote special purpose entity wholly-owned by us, completed the closing of a new variable funding note facility referred to as the
Series 2009-1 Variable Funding Rental Car Asset Backed Notes, or the "Series 2009-1 Notes." The facility has an expected maturity date of January 2012 and a
3 month controlled amortization period beginning in November 2011. The aggregate principal amount of such facility is $2.1 billion and such facility is available to HVF on a revolving
basis until the controlled amortization period begins in November 2011.

Immediately
prior to the issuance of the Series 2009-1 Notes, HVF caused the termination of the series supplements and note purchase agreements relating to its
Series 2005-3 Variable Funding Rental Car Asset Backed Notes, or the "Series 2005-3 Notes," Series 2005-4 Variable Funding Rental Car Asset
Backed Notes, or the "Series 2005-4 Notes," and Series 2008-1 Variable Funding Rental Car Asset

72

---



ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

Backed
Notes, or the "Series 2008-1 Notes," or the "Terminated VFNs," and caused the repayment and cancellation in full of the Terminated VFNs. The Terminated VFNs had expected
final maturity dates ranging from November 2009 to November 2010 and we had an aggregate of approximately $2.0 billion of total capacity (prior to borrowing base or other limitations) under the
Terminated VFNs. In effect we replaced the $2.0 billion of total capacity under the Terminated VFNs
with the $2.1 billion of capacity that we have under the Series 2009-1 Notes while extending the expected final maturity date to January 2012.

In
October 2009 HVF issued $1.2 billion in aggregate principal amount of new medium term notes (3 and 5 year) Series 2009-2 rental car asset backed notes, or the
"Series 2009-2 Notes." The 3 year notes carry a 4.26% coupon (4.30% yield) and the 5 year notes carry a 5.29% coupon (5.35% yield) with expected final maturities in
2013 and 2015, respectively. The advance rate on the notes is approximately 66%. In general, we expect to use the Series 2009-2 Notes to replace the Series 2005-1
and Series 2005-2 rental car asset backed notes, or the "2005 Notes," as they mature in 2010.

Based
on all that we have been able to accomplish in 2009, our current availability under our various credit facilities and our business plan, we believe we have sufficient liquidity to meet our 2010
debt maturities. We still need to refinance approximately $1.2 billion of our international fleet debt that matures in December 2010 and we are currently in discussions with banks and lenders
to review our refinancing options; however there can be no assurance that we will be able to refinance this indebtedness on terms comparable to our recent refinancings, or at all.

A
significant number of cars that we purchase are subject to repurchase by car manufacturers under contractual repurchase or guaranteed depreciation programs. Under these programs, car manufacturers
agree to repurchase cars at a specified price or guarantee the depreciation rate on the cars during a specified time period, typically subject to certain car condition and mileage requirements. We use
this specified price or guaranteed depreciation rate to calculate our asset-backed financing capacity. If any manufacturer of our cars fails to fulfill its repurchase or guaranteed depreciation
obligations, due to bankruptcy or otherwise, our asset-backed financing capacity could be decreased, or we may be required to materially increase the credit enhancement levels relating to the
financing of the fleet vehicles provided by such bankrupt manufacturer under certain of our Fleet Financing Facilities. For a discussion of the risks associated with a manufacturer's bankruptcy or our
reliance on asset-backed financing, see "Item 1ARisk FactorsRisks Related to Our BusinessThe failure of a manufacturer of cars that we own to fulfill its
obligations under a repurchase or guaranteed depreciation program could expose us to loss on those cars and adversely impact our outstanding asset-backed financing facilities, which could in turn
adversely affect our liquidity and results of operations" and "Risks Related to Our Substantial IndebtednessOur reliance on asset-backed financing to purchase cars subjects us to a number
of risks, many of which are beyond our control."

We
rely significantly on asset-backed financing to purchase cars for our domestic and international car rental fleet. For further information concerning our asset-backed financing programs, see
"Financing" below. The amount of financing available to us pursuant to these programs depends on a number of factors, many of which are outside our control. In the past several years, Ford and Old
General Motors (as defined below), which are the significant suppliers of cars to us on both a program and non-program basis, have experienced deterioration in their operating results and
significant declines in their credit ratings.

Immediately
prior to Chrysler LLC's bankruptcy, less than 1% of our fleet was comprised of Chrysler LLC vehicles, so its bankruptcy filing has not had a material impact on our business,
financial condition or results of operations.

73

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

General Motors Corporation filed for bankruptcy in June 2009, which we will refer to as "Old General Motors," however, we do not believe that this will have a material long-term impact on
our business, financial condition or results of operations, because:



In
the event of a bankruptcy of a car manufacturer, our liquidity would be impacted by several factors including reductions in fleet residual values, as discussed above, and the risk that we would be
unable to collect outstanding receivables due to us from such bankrupt manufacturer. In addition, the program cars manufactured by any such company would need to be removed from our fleet or
re-designated as non-program vehicles, which would require us to furnish additional collateral enhancement associated with these program vehicles. For a discussion of the risks
associated with a manufacturer's bankruptcy or our reliance on asset-backed financing, see "Item 1ARisk FactorsRisks Related to Our BusinessThe failure of
a manufacturer of cars that we own to fulfill its obligations under a repurchase or guaranteed depreciation program could expose us to loss on those cars and adversely impact our outstanding
asset-backed financing facilities, which could in turn adversely affect our liquidity and results of operations" and "Risks Related to Our Substantial IndebtednessOur reliance on
asset-backed financing to purchase cars subjects us to a number of risks, many of which are beyond our control."

We
have a significant amount of debt that will mature over the next several years. The aggregate amounts of maturities of debt for each of the twelve-month periods ending December 31 (in
millions of dollars) are as follows: 2010, $4,574.6 (including $1,598.9 of other short-term borrowings); 2011, $122.4; 2012, $1,785.6; 2013, $250.8; 2014, $2,425.9; after 2014, $896.4. For
a discussion of these maturities, see "Contractual Obligations." The $1,598.9 million of short-term borrowings included in the 2010 maturity are revolving in nature and do not
expire in 2010. As a result of our successful refinancing efforts in 2009 and the strategic cost reduction actions taken in 2008 and 2009 as well as those planned for 2010, we believe that we will
remain in compliance with our debt covenants and that cash generated from operations, together with amounts available under various liquidity facilities will be adequate to permit us to meet our
debt service obligations, ongoing costs of operations, working capital needs and capital expenditure requirements for the next twelve months. Our future financial and operating performance, ability to
service or refinance our debt and ability to comply with covenants and restrictions contained in our debt agreements will be subject to future economic conditions and to financial, business and other
factors, many of which are beyond our control.

MBIA
and Ambac provide credit enhancements in the form of financial guaranties for our 2005 Notes, with each providing guaranties for approximately half of the $2,871.6 million in principal
amount of the 2005 Notes that was outstanding as of December 31, 2009, all of which matures in 2010.

An
event of bankruptcy with respect to MBIA or Ambac between now and November 2010 would result in an amortization event under the portion of the 2005 Notes guaranteed by the affected insurer. In
addition, if an amortization event continues for 30 days or longer, the noteholders of the affected series of

74

---



ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

notes
would have the right to require liquidation of a portion of the fleet sufficient to repay such notes, provided that the exercise of the right was exercised by a majority of the affected
noteholders.

Since
MBIA and Ambac are facing financial instability, have been downgraded one or more times and are on review for further credit downgrade or under developing outlook by one or more credit agencies,
we did not have the Series 2009-1 Notes or the Series 2009-2 Notes guaranteed. Accordingly, if a bankruptcy of MBIA or Ambac were to occur prior to the 2005 Notes
maturing, we expect that we would use our corporate liquidity and the borrowings under or proceeds from the Series 2009-1 Notes and the Series 2009-2 Notes to pay
down the amounts owed under the affected series of 2005 Notes.

Financing

We have a significant amount of indebtedness. For information on our indebtedness, see Note 3 to the Notes to our consolidated financial
statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

Covenants

Certain of our debt instruments and credit facilities contain a number of covenants that, among other things, limit or restrict the ability of the
borrowers and the guarantors to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make dividends and other restricted payments, create liens,
make investments, make acquisitions, engage in mergers, change the nature of their business, make capital expenditures, or engage in certain transactions with affiliates. The agreements governing our
corporate indebtedness require us to comply with two key covenants based on a consolidated leverage ratio and a consolidated interest expense coverage ratio. Our failure to comply with the obligations
contained in any agreements governing our indebtedness could result in an event of default under the applicable instrument, which could result in the related debt becoming immediately due and payable
and could further result in a cross default or cross acceleration of our debt issued under other instruments. However, as a result of the above-mentioned actions and planned future actions, we believe
that we will remain in compliance with our corporate debt covenants and that cash generated from operations, together with amounts available under various liquidity facilities will be adequate to
permit us to meet our debt service obligations, ongoing costs of operations, working capital needs and capital expenditure requirements for the next twelve months. Our future financial and operating
performance, ability to service or refinance our debt and ability to comply with covenants and restrictions contained in our corporate debt agreements will be subject to future economic conditions and
to financial, business and other factors, many of which are beyond our control. As of December 31, 2009, we were in compliance with all of these financial covenants.

As
of December 31, 2009, we had an aggregate principal amount outstanding of $1,358.6 million pursuant to our Senior Term Facility and no amounts outstanding in our Senior ABL Facility.
Under our Senior Credit Facilities, we are required to maintain a specified minimum level of borrowing capacity under our Senior ABL Facility, if we fail to meet these requirements, we will then be
subject to financial covenants under that facility, including covenants that will obligate us to maintain a specified debt to Corporate EBITDA leverage ratio and a specified Corporate EBITDA to fixed
charges coverage ratio. The financial covenants in our Senior Term Facility include obligations to maintain a specified debt to Corporate EBITDA leverage ratio and a specified Corporate EBITDA to
interest expense coverage ratio for specified periods. As of December 31, 2009, Hertz was required under the Senior Term Facility to have a consolidated leverage ratio of not more than 5.00:1
and a consolidated interest expense coverage ratio of not less than 2.25:1. In addition, under our Senior ABL Facility, if there was less than $200.0 million of available borrowing capacity
under that facility as of December 31, 2009, Hertz was

75

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

required
to have a consolidated leverage ratio of not more than 5.00:1 and a consolidated fixed charge coverage ratio of not less than 1:1 for the quarter then ended. Under the Senior Term Facility,
as of December 31, 2009, we had a consolidated leverage ratio of 3.85:1 and a consolidated interest expense coverage ratio of 3.16:1. Since we had maintained sufficient borrowing capacity under
our Senior ABL Facility as of December 31, 2009, and expect to maintain such capacity in the future, the consolidated fixed charge coverage ratio was not deemed relevant
for presentation. For further information on the terms of our senior credit facilities, see Note 3 to the Notes to our consolidated financial statements included in this Annual Report under
caption "Item 8Financial Statements and Supplemental Data." In addition to the borrowings under our senior credit facilities, we have a significant amount of additional debt
outstanding. For a discussion of the risks associated with our significant leverage, see "Item 1ARisk FactorsRisks Relating to Our Substantial Indebtedness."

Credit Facilities

As of December 31, 2009, the following credit facilities were available for the use of Hertz and its subsidiaries:

Remaining
Capacity

Availability
Under
Borrowing
Base
LimitationCorporate DebtSenior Term Facility

$


$
Senior ABL Facility


1,654.4


925.0Total Corporate Debt


1,654.4


925.0Fleet DebtU.S. Fleet Debt


2,138.1


88.7International Fleet Debt


851.8


110.0International ABS Fleet Financing Facility


658.7


110.4Fleet Financing Facility


17.0


17.0Brazilian Fleet Financing Facility


6.5


Canadian Fleet Financing Facility


158.8


45.1Belgian Fleet Financing Facility





Capitalized Leases


101.5


Total Fleet Debt


3,932.4


371.2Total

$
5,586.8

$
1,296.2


As of December 31, 2009, the Senior Term Facility had approximately $0.6 million available under the letter of credit facility and the Senior ABL
Facility had $114.6 million available under the letter of credit facility sublimit.

Our
liquidity as of December 31, 2009 was $5.8 billion, which consisted of $1.0 billion of cash and cash equivalents, $0.9 billion of unused commitments under our Senior
ABL Facility and $3.9 billion of unused commitments under our Fleet Financing Facilities. Taking into consideration the borrowing base limitations in our Senior ABL Facility and in our Fleet
Debt, the amount that we had available for immediate use as of December 31, 2009 under our Senior ABL Facility was $0.9 billion and we had $0.4 billion of
over-enhancement that was available under our Fleet Debt. Accordingly, as of

76

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

December 31,
2009 we had $2.3 billion ($1.0 billion in cash and cash equivalents, $0.9 billion available under our Senior ABL Facility and $0.4 billion available
under our various Fleet Debt facilities) in liquidity that was available for our immediate use. Future availability of borrowings under these facilities will depend on borrowing base requirements and
other factors, many of which are outside our control. See "Item 1ARisk FactorsRisks Related to our Substantial
IndebtednessOur reliance on asset-backed financing to purchase cars subjects us to a number of risks, many of which are beyond our control."

Also,
substantially all of our revenue earning equipment and certain related assets are owned by special purpose entities, or are subject to liens in favor of our lenders under our various credit
facilities. Substantially all our other assets in the United States are also subject to liens in favor of our lenders under our various credit facilities. None of such assets will be available to
satisfy the claims of our general creditors.

Contractual Obligations

The following table details the contractual cash obligations for debt and related interest payable, operating leases and concession agreements, ASC
740, "Income Taxes," or "ASC 740," liability and interest and other purchase obligations as of December 31, 2009 (in millions of dollars):

Payments Due by PeriodTotal

2010

2011 to
2012

2013 to
2014

After 2014

All OtherDebt(1)

$
10,055.7

$
4,574.6

$
1,908.0

$
2,676.7

$
896.4

$
Interest on debt(2)


1,916.0


463.3


730.1


585.4


137.2


Operating leases and concession agreements(3)


1,740.8


404.2


587.0


328.2


421.4


ASC 740 liability and interest(4)


27.9














27.9Purchase obligations(5)


4,503.3


4,464.8


37.2


1.3





Total

$
18,243.7

$
9,906.9

$
3,262.3

$
3,591.6

$
1,455.0

$
27.9


(1)Amounts
represent aggregate debt obligations included in "Debt" in our consolidated balance sheet and include $1,598.9 million of other
short-term borrowings. These amounts exclude estimated payments under interest rate swap agreements. See Note 3 to the Notes to our consolidated financial statements included in
this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."
Our
short-term borrowings as of December 31, 2009 include, among other items, the amounts outstanding under our Senior ABL Facility, International Fleet Debt facility, International
ABS Fleet Financing Facility, Fleet Financing Facility, Brazilian Fleet Financing Facility, Canadian Fleet Financing Facility, Belgian Fleet Financing Facility and our Capitalized Leases. These
amounts are considered short-term in nature since they have maturity dates of three months or less; however these facilities are revolving in nature and do not permanently expire at the
time of the short-term debt maturity. In addition, we include certain scheduled payments of principal under our ABS Program as short-term borrowings.(2)Amounts
represent the estimated interest payments based on the principal amounts, minimum non-cancelable maturity dates and applicable interest
rates on the debt at December 31, 2009. The minimum non-cancelable obligations under the U.S. Fleet Debt, International Fleet Debt, Senior ABL Facility, International ABS Fleet
Financing Facility and the Fleet Financing Facility mature between June 2010 and December 2015.(3)Includes
obligations under various concession agreements, which provide for payment of rents and a percentage of revenue with a guaranteed minimum, and
lease agreements for real estate, revenue earning equipment and office and computer equipment. Such obligations are reflected to the extent of their minimum non-cancelable terms. See
Note 8 to the Notes to our consolidated financial statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."


77

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

(4)As
of December 31, 2009, represents our ASC 740 liability and ASC 740 net accrued interest and penalties of $22.1 million and
$5.8 million, respectively. We are unable to reasonably estimate the timing of our ASC 740 liability and interest and penalty payments in individual years beyond twelve months due to
uncertainties in the timing of the effective settlement of tax positions. See Note 7 to the Notes to our consolidated financial statements included in this Annual Report under the caption
"Item 8Financial Statements and Supplementary Data."(5)Purchase
obligations represent agreements to purchase goods or services that are legally binding on us and that specify all significant terms, including
fixed or minimum quantities; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Only the minimum non-cancelable portion of purchase agreements and
related cancellation penalties are included as obligations. In the case of contracts, which state minimum quantities of goods or services, amounts reflect only the stipulated minimums; all other
contracts reflect estimated amounts. Of the total purchase obligations as of December 31, 2009, $4,365.8 million represent fleet purchases where contracts have been signed or are pending
with committed orders under the terms of such arrangements. We do not regard our employment relationships with our employees as "agreements to purchase services" for these purposes.


The table excludes our pension and other postretirement benefit obligations. We contributed $42.6 million to our U.S. pension plan during 2009 and expect
to contribute between $25 million and $95 million to our U.S. pension plan during 2010. The level of 2010 and future contributions will vary, and is dependent on a number of factors
including investment returns, interest rate fluctuations,
plan demographics, funding regulations and the results of the final actuarial valuation. See Note 4 of the Notes to our consolidated financial statements included in this Annual Report under
the caption "Item 8Financial Statements and Supplementary Data."

Capital Expenditures

The table below shows revenue earning equipment and property and equipment capital expenditures and related disposal proceeds received on a cash
basis consistent with our revised consolidated statements of cash flows by quarter for 2009, 2008 and 2007 (in millions of dollars). See Note 1 to the

78

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

Notes
to our consolidated financial statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

Revenue Earning Equipment

Property and EquipmentCapital
Expenditures

Disposal
Proceeds

Net Capital
Expenditures
(Disposal
Proceeds)

Capital
Expenditures

Disposal
Proceeds

Net Capital
Expenditures2009First Quarter

$
1,399.6

$
(2,026.1
)
$
(626.5
)
$
26.7

$
(5.2
)
$
21.5Second Quarter


2,140.9


(1,171.5
)

969.4


21.6


0.2


21.8Third Quarter


1,654.0


(965.1
)

688.9


20.7


(1.1
)

19.6Fourth Quarter


2,332.8


(1,862.2
)

470.6


31.7


(17.6
)

14.1Total Year

$
7,527.3

$
(6,024.9
)
$
1,502.4

$
100.7

$
(23.7
)
$
77.02008First Quarter

$
2,451.0

$
(2,026.4
)
$
424.6

$
48.2

$
(34.5
)
$
13.7Second Quarter


3,626.4


(2,161.9
)

1,464.5


47.8


(13.6
)

34.2Third Quarter


2,811.5


(1,821.9
)

989.6


56.8


(14.2
)

42.6Fourth Quarter


1,262.1


(2,501.0
)

(1,238.9
)

41.0


(6.2
)

34.8Total Year

$
10,151.0

$
(8,511.2
)
$
1,639.8

$
193.8

$
(68.5
)
$
125.32007First Quarter

$
2,941.5

$
(2,508.4
)
$
433.1

$
41.1

$
(21.9
)
$
19.2Second Quarter


3,539.5


(2,238.6
)

1,300.9


59.7


(16.6
)

43.1Third Quarter


2,758.9


(1,657.6
)

1,101.3


7.0


(15.8
)

(8.8
)Fourth Quarter


1,917.9


(2,917.2
)

(999.3
)

82.1


(31.5
)

50.6Total Year

$
11,157.8

$
(9,321.8
)
$
1,836.0

$
189.9

$
(85.8
)
$
104.1


Revenue earning equipment expenditures in our car rental operations were $7,442.3 million, $9,838.7 million and $10,472.4 million for the
years ended December 31, 2009, 2008 and 2007, respectively. Revenue earning equipment expenditures in our equipment rental operations were $85.0 million, $312.3 million and
$685.4 million for the years ended December 31, 2009, 2008 and 2007, respectively.

Revenue
earning equipment expenditures in our car rental and equipment rental operations for the year ended December 31, 2009 decreased by 24.4% and 72.8%, respectively, compared to the year
ended December 31, 2008. The decrease in our car rental revenue earning equipment expenditures was primarily due to lower rental volumes during the year ended December 31, 2009 as
compared to the year ended December 31, 2008, which required us to maintain lower fleet levels. The decrease in our equipment rental operations revenue earning equipment expenditures is
primarily due to a general reduction in spending due to lower demand for equipment related to the economic downturn during the year ended December 31, 2009 as compared to the year ended
December 31, 2008.

Revenue
earning equipment expenditures in our car rental and equipment rental operations for the year ended December 31, 2008 decreased by 60.5% and 54.4%, respectively, compared to the year
ended December 31, 2007. The decrease in our car rental revenue earning equipment expenditures was primarily due to lower rental volumes during the year ended December 31, 2008 as
compared to the year ended December 31, 2007, which required us to maintain lower fleet levels. The decrease in our equipment rental operations revenue earning equipment expenditures is
primarily due to reduced spending on earth moving equipment as a result of slowing non-residential construction growth and the

79

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

aging
of our equipment rental fleet during the year ended December 31, 2008 as compared to the year ended December 31, 2007.

Property
and equipment expenditures in our car rental operations were $90.8 million, $139.8 million and $128.7 million for the years ended December 31, 2009, 2008 and 2007,
respectively. Property and equipment expenditures in our equipment rental operations were $9.4 million, $44.4 million and $58.5 million for the years ended December 31,
2009, 2008 and 2007, respectively. Property and equipment expenditures for all other activities were $0.5 million, $9.6 million and $2.7 million for the years ended
December 31, 2009, 2008 and 2007, respectively.

Property
and equipment expenditures in our car rental operations, equipment rental operations and for all other activities for the year ended December 31, 2009 decreased by 35.1%, 78.8% and
94.8%, respectively, compared to the year ended December 31, 2008. These decreases are a result of managing our capital expenditures during the recent economic downturn. Property and equipment
expenditures in our car rental operations, equipment rental operations and for all other activities for the year ended December 31, 2008 increased by 8.6%, decreased by 24.1% and increased by
255.6%, respectively, compared to the year ended December 31, 2007.

Off-Balance Sheet Commitments

As of December 31, 2009 and December 31, 2008, the following guarantees (including indemnification commitments) were issued and
outstanding:

Indemnifications

In the ordinary course of business, we execute contracts involving indemnifications standard in the relevant industry and indemnifications specific
to a transaction such as the sale of a business. These indemnifications might include claims relating to the following: environmental matters; intellectual property rights; governmental regulations
and employment-related matters; customer, supplier and other commercial contractual relationships; and financial matters. Performance under these indemnities would generally be triggered by a breach
of terms of the contract or by a third party claim. We regularly evaluate the probability of having to incur costs associated with these indemnifications and have accrued for expected losses that are
probable and estimable. The types of indemnifications for which payments are possible include the following:

Sponsors; Directors

We have entered into customary indemnification agreements with Hertz Holdings, the Sponsors and Hertz Holdings' stockholders affiliated with the
Sponsors, pursuant to which Hertz Holdings and Hertz will indemnify the Sponsors, Hertz Holdings' stockholders affiliated with the Sponsors and their respective affiliates, directors, officers,
partners, members, employees, agents, representatives and controlling persons, against certain liabilities arising out of performance of a consulting agreement with Hertz Holdings and each of the
Sponsors and certain other claims and liabilities, including liabilities arising out of financing arrangements or securities offerings. We also entered into indemnification agreements with each of our
directors. We do not believe that these indemnifications are reasonably likely to have a material impact on us.

Environmental

We have indemnified various parties for the costs associated with remediating numerous hazardous substance storage, recycling or disposal sites in
many states and, in some instances, for natural

80

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

resource
damages. The amount of any such expenses or related natural resource damages for which we may be held responsible could be substantial. The probable expenses that we expect to incur for such
matters have been accrued, and those expenses are reflected in our consolidated financial statements. As of December 31, 2009 and 2008, the aggregate amounts accrued for environmental
liabilities, including liability for environmental indemnities, reflected in our consolidated balance sheet in "Other accrued liabilities" were $2.0 million and $2.2 million,
respectively. The accrual generally represents the estimated cost to study potential environmental issues at sites deemed to require investigation or clean-up activities, and the estimated
cost to implement remediation actions, including on-going maintenance, as required. Cost estimates are developed by site. Initial cost estimates are based on historical experience at
similar sites and are refined over time on the basis of in-depth studies of the sites. For many sites, the remediation costs and other damages for which we ultimately may be responsible
cannot be reasonably estimated because of uncertainties with respect to factors such as our connection to the site, the materials there, the involvement of other potentially responsible parties, the
application of laws and other standards or regulations, site conditions, and the nature and scope of investigations, studies, and remediation to be undertaken (including the technologies to be
required and the extent, duration, and success of remediation).

Risk Management

For a discussion of additional risks arising from our operations, including vehicle liability, general liability and property damage insurable risks,
see "Item 1BusinessRisk Management."

Market Risks

We are exposed to a variety of market risks, including the effects of changes in interest rates, foreign currency exchange rates and fluctuations in
gasoline prices. We
manage our exposure to these market risks through our regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Derivative financial
instruments are viewed as risk management tools and have not been used for speculative or trading purposes. In addition, derivative financial instruments are entered into with a diversified group of
major financial institutions in order to manage our exposure to counterparty nonperformance on such instruments. For more information on these exposures, see Note 12 to the Notes to our
consolidated financial statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

Interest Rate Risk

From time to time, we may enter into interest rate swap agreements and/or interest rate cap agreements to manage interest rate risk. See
Notes 3 and 13 to the Notes to our audited annual consolidated financial statements included in this Annual Report under the caption "Item 8Financial Statements and
Supplementary Data."

We
have a significant amount of debt (including under our U.S. and International Fleet Debt facilities, other international fleet debt facilities, International ABS Fleet Financing Facility and Senior
ABL Facility) with variable rates of interest based generally on LIBOR, Euro inter-bank offered rate, or "EURIBOR," or their equivalents for local currencies plus an applicable margin.
Increases in interest rates could therefore significantly increase the associated interest payments that we are required to make on this debt.

We
have assessed our exposure to changes in interest rates by analyzing the sensitivity to our earnings assuming various changes in market interest rates. Assuming a hypothetical increase of one
percentage

81

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

point
in interest rates on our debt portfolio as of December 31, 2009, our net income would decrease by an estimated $17.2 million over a twelve-month period.

Consistent
with the terms of the agreements governing the respective debt obligations, we may hedge a portion of the floating rate interest exposure under the Senior Credit Facilities, the U.S. and
International Fleet Debt and International ABS Fleet Financing Facility to provide protection in respect of such exposure.

Foreign Currency Risk

We manage our foreign currency risk primarily by incurring, to the extent practicable, operating and financing expenses in the local currency in the
countries in which we operate, including making fleet and equipment purchases and borrowing for working capital needs. Also, we have purchased foreign exchange options to manage exposure to
fluctuations in foreign exchange rates for selected marketing programs. The effect of exchange rate changes on these financial instruments would not materially affect our consolidated financial
position, results of operations or cash flows. Our risks with respect to foreign exchange options are limited to the premium paid for the right to exercise the option and the future performance of the
option's counterparty. Premiums paid for options outstanding as of December 31, 2009, were approximately $0.1 million, and we limit counterparties to financial institutions that have
strong credit ratings. As of December 31, 2009 and December 31, 2008, the fair value of all outstanding foreign currency options was approximately $0.0 million and
$0.5 million, respectively, which was recorded in our consolidated balance sheet in "Prepaid expenses and other assets." The fair value of the foreign currency options was calculated using a
discounted cash flow method and applying observable market data. Gains and losses resulting from changes in the fair value of these options are included in our results of operations.

We
also manage exposure to fluctuations in currency risk on intercompany loans we make to certain of our subsidiaries by entering into foreign currency forward contracts at the time of the loans. The
forward rate is reflected in the intercompany loan rate to the subsidiaries, and as a result, the forward contracts have no material impact on our results of operations.

In
connection with the Transactions, we issued €225 million of Senior Euro Notes. On October 1, 2006, we designated our Senior Euro Notes as an effective net investment
hedge of our Euro-denominated net investment in our international operations. As a result of this net investment hedge designation, as of December 31, 2009 and December 31,
2008, losses of $19.2 million (net of tax of $17.8 million) and $15.7 million (net of tax of $12.6 million), respectively, attributable to the translation of our Senior
Euro Notes into the U.S. dollar are recorded in our consolidated balance sheet in "Accumulated other comprehensive loss."

See
Note 12 to the Notes to our consolidated financial statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

Other Risks

We purchase unleaded gasoline and diesel fuel at prevailing market rates. In January 2009, we began a program to manage our exposure to changes in
prices through the use of derivative commodity instruments. See Note 12 to the Notes to our consolidated financial statements included in this Annual Report under the caption
"Item 8Financial Statements and Supplementary Data."

82

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

Inflation

The increased cost of vehicles is the primary inflationary factor affecting us. Many of our other operating expenses are also expected to increase
with inflation, including health care costs and gasoline. Management does not expect that the effect of inflation on our overall operating costs will be greater for us than for our competitors.

Income Taxes

In January 2006, we implemented a LKE Program for our U.S. car rental business. Pursuant to the program, we dispose of vehicles and acquire
replacement vehicles in a form intended to allow such dispositions and replacements to qualify as tax-deferred "like-kind exchanges" pursuant to section 1031 of the
Internal Revenue Code. The program has resulted in deferral of federal and state income taxes for fiscal 2007, 2008 and 2009. A LKE Program for HERC has been in place for several years. The program
allows tax deferral if a qualified replacement asset is acquired within a specific time period after asset disposal. Accordingly, if a qualified replacement asset is not purchased within this limited
time period, taxable gain is recognized. For strategic purposes, such as cash management and fleet reduction, we have triggered some taxable gains in the program. The bankruptcy filing of an OEM also
resulted in minimal gain recognition. We had sufficient net operating losses to fully offset the taxable gains recognized. We cannot offer assurance that the expected tax deferral will continue or
that the relevant law concerning the programs will remain in its current form. An extended reduction in purchases or downsizing of our car rental fleet could result in reduced deferrals in the
future, which in turn could require us to make material cash payments for federal and state income tax liabilities. Our inability to obtain replacement financing as our fleet financing facilities
mature would likely result in an extended reduction in purchases or downsizing of the fleet. However, we believe the likelihood of making material cash payments in the near future is low because of
our significant net operating losses. For a discussion of risks related to our reliance on asset-backed financing to purchase cars, see "Item 1ARisk Factors" in this Annual Report.

On
January 1, 2009, Bank of America acquired Merrill Lynch & Co., Inc., the parent company of MLGPE. Accordingly, Bank of America is now an indirect beneficial owner of
Hertz Holdings' common stock held by MLGPE and certain of its affiliates. For U.S. income tax purposes the transaction, when combined with other unrelated transactions during the previous
36 months, resulted in a change in control as that term is defined in Section 382 of the Internal Revenue Code. Consequently, utilization of all pre-2009 U.S. net operating
losses is subject to an annual limitation. The limitation is not expected to result in a loss of net operating losses or have a material adverse impact on taxes.

Employee Retirement Benefits

Pension

We sponsor defined benefit pension plans worldwide. Pension obligations give rise to significant expenses that are dependent on assumptions discussed
in Note 4 of the Notes to our consolidated financial statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data." Our
2009 worldwide pre-tax pension expense was approximately $35.9 million, which is a decrease of $3.5 million from 2008. The decrease in expense compared to 2008 is primarily
due to lower expense for U.S. plans, largely due to headcount reductions. To the extent that there are layoffs affecting a significant number of employees covered by any pension plan worldwide, 2010
expense could vary significantly because of further charges or credits.

83

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

The
funded status (i.e., the dollar amount by which the projected benefit obligations exceeded the market value of pension plan assets) of our U.S. qualified plan, in which most domestic
employees participate, declined significantly as of December 31, 2009, compared with December 31, 2008 because asset values decreased due to a drop in the securities markets. We
contributed $42.6 million to our U.S. pension plan during 2009 and expect to contribute between $25 million and $95 million to our U.S. pension plan during 2010. These
contributions are necessary primarily because of the significant decline in asset values.

We
review our pension assumptions regularly and from time to time make contributions beyond those legally required. A discretionary contribution of $1.5 million was made to our U.S. qualified
plan in the year ended December 31, 2008. No discretionary contributions were made to our U.S. qualified plan in the year ended December 31, 2007. For the years ended December 31,
2009 and 2008, we contributed $42.6 million and $36.8 million, respectively, to our worldwide pension plans, including a discretionary contribution of $5.2 million and
$8.0 million, respectively, to our U.K. defined benefit pension plan, and benefit payments made through unfunded plans. Based upon the significant decline in asset values in 2008, which were in
line with the overall market declines, it is likely we will have to make cash contributions in 2010 and future years. In addition, under the Pension Protection Act of 2006, there are a number of
choices in valuing assets and liabilities to determine the required level of funding that can produce a wide range of potential contributions. The level of 2010 and future contributions will vary, and
is dependant on a number of factors including investment returns, interest rate fluctuations, plan demographics, funding regulations, and the results of the final actuarial valuation.

We
participate in various "multiemployer" pension plans administered by labor unions representing some of our employees. We make periodic contributions to these plans to allow them to meet their
pension benefit obligations to their participants. In the event that we withdraw from participation in one of these plans, then applicable law could require us to make an additional
lump-sum contribution to the plan, and we would have to reflect that as an expense in our consolidated statement of operations and as a liability on our consolidated balance sheet. Our
withdrawal liability for any multiemployer plan would depend on the extent of the plan's funding of vested benefits. In the ordinary course of our renegotiation of collective bargaining agreements
with labor unions that maintain these plans, we could decide to discontinue participation in a plan, and in that event, we could face a withdrawal liability. Some multiemployer plans, including one in
which we participate, are reported to have significant underfunded liabilities. Such underfunding could increase the size of our potential withdrawal liability

Other Postretirement Benefits

We provide limited postretirement health care and life insurance for employees of our domestic operations with hire dates prior to January 1,
1990. There are no plan assets associated with this plan. We provide for these postretirement costs through monthly accruals. The net periodic postretirement benefit loss for the year ended
December 31, 2009 was $0.6 million and the accumulated benefit obligation as of December 31, 2009 was $13.7 million
compared to a net periodic postretirement benefit gain of $2.1 million for the year ended December 31, 2008 and an accumulated benefit obligation of $12.9 million as of
December 31, 2008.

Stock-Based Compensation

On February 28, 2008, the Board of Directors of Hertz and Hertz Holdings jointly adopted the Omnibus Plan, which was approved by Hertz
Holdings' stockholders at the annual meeting of its stockholders held on May 15, 2008. The Omnibus Plan provides for grants of both equity and cash awards, including non-qualified
stock options, incentive stock options, stock appreciation rights, performance awards

84

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
                 RESULTS OF OPERATIONS (Continued)

(shares
and units), restricted stock, restricted stock units and deferred stock units to key executives, employees and non-management directors.

The
Omnibus Plan provides that no further awards will be granted pursuant to the Stock Incentive Plan and the Director Plan, or the "Prior Plans." However, awards that had been previously granted
pursuant to the Prior Plans will continue to be subject to and governed by the terms of the Prior Plans. As of December 31, 2009, there were 13.0 million shares of Hertz Holdings' common
stock underlying awards outstanding under the Prior Plans. In addition, as of December 31, 2009, there were 8.1 million shares of the common stock of Hertz Holdings' underlying awards
outstanding under the Omnibus Plan.

In
addition to the 21.1 million shares underlying outstanding awards as of December 31, 2009, Hertz Holdings had 8.9 million shares of its common stock available for issuance
under the Omnibus Plan. The shares of common stock to be delivered under the Omnibus Plan may consist, in whole or in part, of common stock held in treasury or authorized but unissued shares of common
stock, not reserved for any other purpose.

In
February 2009, Hertz Holdings granted options to acquire 52,500 shares of its common stock at an exercise price of $3.24 per share under the Omnibus Plan.

In
2009, Hertz Holdings granted 6,465,239 Restricted Stock Units, or "RSUs," to key executives and employees and Performance Stock Units, or "PSUs."

For
the year ended December 31, 2009, we recognized compensation cost of approximately $34.5 million ($21.1 million, net of tax) for options, RSUs and PSUs granted pursuant to our
Prior Plans and the Omnibus Plan.

On
February 28, 2008, upon recommendation of the compensation committee of the Board of Directors of Hertz Holdings, the Board of Directors of Hertz Holdings adopted the Hertz Global
Holdings, Inc. Employee Stock Purchase Plan, or the "ESPP," and the plan was approved by Hertz Holdings' stockholders on May 15, 2008. The ESPP is intended to be an "employee stock
purchase plan" within the meaning of Section 423 of the Internal Revenue Code.

The
maximum number of shares that may be purchased under the ESPP is 3,000,000 shares of Hertz Holdings' common stock, subject to adjustment in the case of any change in Hertz Holdings' shares,
including by reason of a stock dividend, stock split, share combination, recapitalization, reorganization, merger, consolidation or change in corporate structure.

For
the year ended December 31, 2009, we recognized compensation cost of approximately $0.5 million ($0.3 million, net of tax) for the amount of the discount on the stock
purchased by our employees. Approximately 1,800 employees participated in the ESPP as of December 31, 2009.

See
Note 5 of the Notes to our consolidated financial statements included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 1 to the Notes to our consolidated financial statements included in this Annual
Report under the caption "Item 8Financial Statements and Supplementary Data."

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See "Item 7Management's Discussion and Analysis of Financial Condition and Results of OperationsMarket Risks" included elsewhere in this Annual Report.

85

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors and Shareholder
of The Hertz Corporation:

In
our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of The Hertz Corporation
and its subsidiaries at December 31, 2009 and December 31, 2008, and the results of their operations and their cash flows for each of the three years in the period ended
December 31, 2009 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the index
appearing under Item 15(a)(2) present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal ControlIntegrated
Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's
management is responsible for these financial statements and financial statement schedules, for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting under Item 9A. Our responsibility is to express opinions
on these financial statements, on the financial statement schedules, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial
statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A
company's 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. A company's internal control over financial reporting includes those policies and procedures that (i) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

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.

/s/
PricewaterhouseCoopers LLP
Florham Park, New Jersey
March 1, 2010

86

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THE HERTZ CORPORATION AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS        (In Thousands of Dollars)

December 31,2009

2008ASSETSCash and cash equivalents

$
985,467

$
593,997Restricted cash and cash equivalents


365,159


731,373Receivables, less allowance for doubtful accounts of $21,268 and $16,572


1,329,647


1,911,304Inventories, at lower of cost or market


93,415


96,187Prepaid expenses and other assets


289,990


286,710Revenue earning equipment, at cost:Cars


8,205,579


7,635,402Less accumulated depreciation


(1,186,299
)

(1,133,946
)Other equipment


2,582,029


2,708,254Less accumulated depreciation


(749,724
)

(518,172
)Total revenue earning equipment


8,851,585


8,691,538Property and equipment, at cost:Land, buildings and leasehold improvements


1,023,891


1,033,098Service equipment


838,906


751,9251,862,797


1,785,023Less accumulated depreciation


(674,668
)

(530,463
)Total property and equipment


1,188,129


1,254,560Other intangible assets, net


2,597,682


2,621,586Goodwill


295,350


264,061Total assets

$
15,996,424

$
16,451,316LIABILITIES AND EQUITYDue to Hertz affiliate

$
7,569

$
14,755Accounts payable


658,671


931,336Accrued salaries and other compensation


465,281


437,340Other accrued liabilities


557,477


700,506Accrued taxes


125,806


128,352Debt


9,997,014


10,972,297Public liability and property damage


277,828


311,352Deferred taxes on income


1,432,705


1,496,037Total liabilities


13,522,351


14,991,975Commitments and contingencies (Note 10)Equity:The Hertz Corporation and Subsidiaries stockholder's equityCommon Stock, $0.01 par value, 3,000 shares authorized, 100 shares issued and outstanding





Additional paid-in capital


3,410,518


2,381,684Accumulated deficit


(950,407
)

(839,872
)Accumulated other comprehensive loss


(3,331
)

(100,135
)Total The Hertz Corporation and Subsidiaries stockholder's equity


2,456,780


1,441,677Noncontrolling interest


17,293


17,664Total equity


2,474,073


1,459,341Total liabilities and equity

$
15,996,424

$
16,451,316


The
accompanying notes are an integral part of these financial statements.

87

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THE HERTZ CORPORATION AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF OPERATIONS        (In Thousands of Dollars)

Years ended December 31,2009

2008

2007Revenues:Car rental

$
5,872,905

$
6,730,349

$
6,800,657Equipment rental


1,110,243


1,657,277


1,755,330Other


118,359


137,429


129,644Total revenues


7,101,507


8,525,055


8,685,631Expenses:Direct operating


4,084,176


4,930,018


4,644,148Depreciation of revenue earning equipment


1,931,358


2,194,164


2,003,360Selling, general and administrative


641,003


769,639


773,473Interest expense


653,661


870,490


917,007Interest and other income, net


(64,437
)

(24,761
)

(41,213
)Impairment charges





1,168,900


Total expenses


7,245,761


9,908,450


8,296,775Income (loss) before income taxes


(144,254
)

(1,383,395
)

388,856(Provision) benefit for taxes on income


48,398


197,657


(102,341
)Net income (loss)


(95,856
)

(1,185,738
)

286,515Less: Net income attributable to noncontrolling interest


(14,679
)

(20,786
)

(19,690
)Net income (loss) attributable to The Hertz Corporation and Subsidiaries' common stockholders

$
(110,535
)
$
(1,206,524
)
$
266,825


The accompanying notes are an integral part of these financial statements.

88

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THE HERTZ CORPORATION AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY        (In Thousands of Dollars, except share data)

Number
of Shares

Common
Stock

Additional
Paid-In
Capital

Retained
Earnings
(Deficit)

Accumulated
Other
Comprehensive
Income (Loss)

Non-
controlling
Interest

Total
EquityBalance at:December 31, 2006


100

$


$
2,320,452

$
103,471

$
94,528

$
14,813

$
2,533,264Net income attributable to The Hertz Corporation and Subsidiaries' common stockholders











266,825








266,825Change in fair value of derivatives qualifying as cash flow hedges, net of tax of $31,294














(49,142
)




(49,142
)Translation adjustment changes














126,279





126,279Unrealized holding losses on securities, net of tax of $7














(51
)




(51
)Unrealized loss on Euro-denominated debt, net of tax of $13,611














(20,729
)




(20,729
)Defined benefit pension plans:Prior service cost from plan curtailment














20





20Amortization or settlement recognition of net loss














4,048





4,048Net gain arising during the period














21,914





21,914Income tax related to defined pension plans














(6,360
)




(6,360
)Defined benefit pension plans, net














19,622





19,622Total Comprehensive Income




















342,804Dividend payment to noncontrolling interest

















(13,475
)

(13,475
)Net income relating to noncontrolling interest

















19,690


19,690Stock-based employee compensation charges








32,939











32,939Cumulative effect of the adoption of FIN 48











(3,644
)







(3,644
)Hertz Holdings common and phantom shares issued to Directors








520











520December 31, 2007


100





2,353,911


366,652


170,507


21,028


2,912,098Net income (loss) attributable to The Hertz Corporation and Subsidiaries' common stockholders











(1,206,524
)







(1,206,524
)Change in fair value of derivatives qualifying as cash flow hedges, net of tax of $28,429














(44,012
)




(44,012
)Translation adjustment changes














(163,359
)




(163,359
)Unrealized holding gains on securities, net of tax of $6














120





120Unrealized gain on Euro-denominated debt, net of tax of $5,665














12,116





12,116Defined benefit pension plans:Amortization or settlement recognition of net loss














505





505Net loss arising during the period














(114,279
)




(114,279
)Income tax related to defined pension plans














38,267





38,267Defined benefit pension plans, net














(75,507
)




(75,507
)Total Comprehensive Loss




















(1,477,166
)Dividend payment to noncontrolling interest

















(24,150
)

(24,150
)Net income relating to noncontrolling interest

















20,786


20,786Stock-based employee compensation charges, net of tax of $643








27,380











27,380Hertz Holdings common and phantom shares issued to Directors








393











393December 31, 2008


100





2,381,684


(839,872
)

(100,135
)

17,664


1,459,341Net loss attributable to The Hertz Corporation and Subsidiaries' common stockholders











(110,535
)







(110,535
)Change in fair value of derivatives qualifying as cash flow hedges, net of tax of $25,555














39,852





39,852Translation adjustment changes














77,528





77,528Unrealized holding gains on securities, net of tax of $0














(20
)




(20
)Unrealized gain on Euro-denominated debt, net of tax of $5,182














(3,509
)




(3,509
)Defined benefit pension plans:Amortization or settlement recognition of net loss














1,132





1,132Net loss arising during the period














(31,864
)




(31,864
)Income tax related to defined pension plans














13,685





13,685Defined benefit pension plans, net














(17,047
)




(17,047
)Total Comprehensive Loss




















(13,731
)Dividend payment to noncontrolling interest

















(15,050
)

(15,050
)Net income relating to noncontrolling interest

















14,679


14,679Stock-based employee compensation charges, net of tax of $0








35,464











35,464Capital invested by parent








990,117











990,117Proceeds from employee stock purchase plan








2,823











2,823Hertz Holdings common and phantom shares issued to Directors








430











430December 31, 2009


100

$


$
3,410,518

$
(950,407
)
$
(3,331
)
$
17,293

$
2,474,073


The accompanying notes are an integral part of these financial statements.

89

---





THE HERTZ CORPORATION AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CASH FLOWS        (In Thousands of Dollars)

Years ended December 31,2009

2008

2007(Note 1)

(Note 1)Cash flows from operating activities:Net income (loss)

$
(95,856
)
$
(1,185,738
)
$
286,515Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation of revenue earning equipment


1,931,358


2,194,164


2,003,360Depreciation of property and equipment


159,693


172,848


177,113Amortization of other intangible assets


66,059


66,282


62,594Amortization and write-off of deferred financing costs


57,471


70,193


48,409Amortization of debt discount


27,742


17,908


20,747Debt modification costs








16,177Gain on debt buyback


(48,472
)




Stock-based compensation charges


35,464


28,023


32,939(Gain) loss on derivatives


418


12,058


(3,925
)Amortization and ineffectiveness of cash flow hedges


74,597


11,807


20,424Provision for losses on doubtful accounts


27,951


31,068


13,874Asset writedowns


36,063


93,211


Deferred taxes on income


117,374


(235,913
)

59,513Gain on sale of property and equipment


(1,072
)

(9,602
)

(24,807
)Impairment charges





1,168,900


Changes in assets and liabilities, net of effects of acquisition:Receivables


34,539


46,887


(1,072
)Inventories, prepaid expenses and other assets


5,584


17,934


733Accounts payable


(227,479
)

108,530


105,979Accrued liabilities


(181,452
)

(43,343
)

(19,271
)Accrued taxes


(201,902
)

(101
)

10,866Public liability and property damage


(34,536
)

(20,068
)

(1,405
)Net cash provided by operating activities


1,783,544


2,545,048


2,808,763Cash flows from investing activities:Net change in restricted cash and cash equivalents


368,721


(71,836
)

(105,856
)Revenue earning equipment expenditures


(7,527,317
)

(10,150,982
)

(11,157,763
)Proceeds from disposal of revenue earning equipment


6,024,940


8,511,216


9,321,823Property and equipment expenditures


(100,701
)

(193,766
)

(189,954
)Proceeds from disposal of property and equipment


23,697


68,515


85,826Acquisitions, net of cash acquired


(76,419
)

(70,920
)

(12,514
)Purchase of short-term investments, net


(3,492
)




Other investing activities


828


(488
)

(362
)Net cash used in investing activities


(1,289,743
)

(1,908,261
)

(2,058,800
)Cash flows from financing activities:Proceeds from issuance of long-term debt


1,200,896


22,565


9,903Repayment of long-term debt


(1,149,876
)

(860,515
)

(996,203
)Short-term borrowings:Proceeds


364,065


396,679


695,000Repayments


(351,773
)

(374,333
)

(695,000
)Proceeds (repayments) under the revolving lines of credit, net


(1,126,099
)

198,761


295,229Distributions to noncontrolling interest


(15,050
)

(24,150
)

(13,475
)Capital invested by parent


990,117





Proceeds from employee stock purchase plan


2,400





Loan with Hertz affiliate


(7,186
)

6,273


8,482Payment of financing costs


(45,017
)

(61,223
)

(39,895
)Net cash used in financing activities


(137,523
)

(695,943
)

(735,959
)Effect of foreign exchange rate changes on cash and cash equivalents


35,192


(76,540
)

43,858Net change in cash and cash equivalents during the period


391,470


(135,696
)

57,862Cash and cash equivalents at beginning of period


593,997


729,693


671,831Cash and cash equivalents at end of period

$
985,467

$
593,997

$
729,693Supplemental disclosures of cash flow information:Cash paid during the period for:Interest (net of amounts capitalized)

$
622,615

$
764,539

$
814,457Income taxes


31,321


33,408


28,293Supplemental disclosures of non-cash flow information:Purchases of revenue earning equipment included in accounts payable

$
141,039

$
347,581

$
421,886Sales of revenue earning equipment included in receivables


537,862


1,025,832


731,993Purchases of property and equipment included in accounts payable


38,210


19,490


34,582Sales of property and equipment included in receivables


5,229


2,452


30,543


The accompanying notes are an integral part of these financial statements.

90

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THE HERTZ CORPORATION AND SUBSIDIARIES        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1Summary of Significant Accounting Policies

Background

The Hertz Corporation together with its subsidiaries are referred to herein as "we," "our" and "us." The Hertz Corporation is referred to herein as
"Hertz," 100% of Hertz outstanding capital stock is owned by Hertz Investors, Inc. (previously CCMG Corporation), and 100% of Hertz Investors, Inc.'s capital stock is owned by Hertz
Holdings (previously known as CCMG Holdings, Inc.).

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, or "Ford," acquired an ownership interest in Hertz in 1987. Prior to this, Hertz was a subsidiary of UAL Corporation (formerly Allegis Corporation), which acquired our
outstanding capital stock from RCA Corporation in 1985.

On
December 21, 2005, or the "Closing Date," investment funds associated with or designated by:



or
collectively the "Sponsors," acquired all of our common stock from Ford Holdings LLC, or "Ford Holdings," for aggregate consideration of $4,379 million in cash, debt refinanced or
assumed of $10,116 million and transaction fees and expenses of $447 million. We refer to the acquisition of all of our common stock by the Sponsors as the "Acquisition." Following Hertz
Holdings' initial public offering in November 2006 and subsequent offerings in June 2007, May 2009 and June 2009, the Sponsors currently own approximately 51% of the common stock of Hertz Holdings.

2009 Hertz Holdings Offerings

In January 2009, Bank of America Corporation, or "Bank of America," acquired Merrill Lynch & Co., Inc., the parent company of
MLGPE. Accordingly, Bank of America is now an indirect beneficial owner of Hertz Holdings' common stock held by MLGPE and certain of its affiliates.

In
May and June 2009, Hertz Holdings completed a follow-on public offering of 52,900,000 shares of its common stock at a price of $6.50 per share with proceeds before underwriting
discounts and offering expenses of approximately $343.9 million, or the "Common Stock Public Offering."

In
addition, in May 2009 Hertz Holdings entered into subscription agreements with investment funds affiliated with CD&R and Carlyle to purchase an additional 32,101,182 shares of Hertz Holdings'
common stock at a price of $6.23 per share (the same price per share paid to us by the underwriters in the Common Stock Public Offering) with proceeds to Hertz Holdings of approximately
$200.0 million, or the "Private Offering." The Private Offering closed on July 7, 2009 and the 32,101,182 shares of its common stock were issued to the CD&R and Carlyle affiliated
investment funds on the same date. Giving effect to the Common Stock Public Offering and the Private Offering, the Sponsors' ownership percentage in Hertz Holdings is approximately 51%.

In
May and June 2009, Hertz Holdings also completed a public offering of an aggregate principal amount of $474,755,000 of 5.25% convertible senior notes due 2014, or the "Convertible Debt Public
Offering."

Hertz
Holdings used the net proceeds from the Common Stock Public Offering, the Private Offering and the Convertible Debt Public Offering, collectively the "2009 Hertz Holdings Offerings," to provide
us a

91

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

capital
investment which we used to increase our liquidity and for general corporate purposes, including the repayment of principal amounts with respect to debt under the fleet financing facilities of
certain of our consolidated subsidiaries.

Liquidity

The car and equipment rental industries are significantly influenced by general economic conditions. In the final three months of 2008 and throughout
2009, both the car and equipment rental markets experienced unprecedented declines due to the precipitous slowdown in consumer spending as well as significantly reduced demand for industrial and
construction equipment. The car rental industry is also significantly influenced by developments in the travel industry, and, particularly, in airline passenger traffic, while the equipment rental
segment is being impacted by the difficult economic and business environment as investment in commercial construction and the industrial markets slow. The United States and international markets are
currently experiencing a significant decline in economic activities, including a tightening of the credit markets, reduced airline passenger traffic, reduced consumer spending and volatile fuel
prices. These conditions are expected to continue into 2010. During 2008 and 2009, this resulted in a rapid decline in the volume of car rental and equipment rental transactions, soft industry pricing
and lower residual values for the non-program cars and equipment that we sold. "Non-program cars" mean cars not purchased under repurchase or guaranteed depreciation programs
for which the car rental company is exposed to residual risk.

In
response to the economic downturn, in 2008 we implemented aggressive strategic actions to reduce costs and improve liquidity. These actions included reducing wage and benefit costs through
significant headcount reductions, accelerating fleet deletions and delaying additions to right-size the fleet to current demand levels and rationalizing our location footprint by closing a
number of locations. In an effort to mitigate the impact of continued revenue declines on our results of operations, we reduced costs further through the additional headcount reductions.

As
of December 31, 2009, we had $9,997.0 million of total indebtedness outstanding. Accordingly, we are highly leveraged and a substantial portion of our liquidity needs arise from debt
service on indebtedness incurred in connection with the Acquisition and from the funding of our costs of operations and capital expenditures.

In
2009 we raised new capital intended to fund the 2010 fleet debt maturities as they occur. We began addressing these liquidity needs at the end of the second quarter and the beginning of the third
quarter by completing the 2009 Hertz Holdings Offerings, pursuant to which Hertz Holdings received approximately $990 million of net proceeds, after deducting underwriting discounts and
commissions and before offering expenses payable by Hertz Holdings.

On
September 18, 2009, Hertz Vehicle Financing LLC, or "HVF," a bankruptcy-remote special purpose entity wholly-owned by us, completed the closing of a new variable funding note facility
referred to as the Series 2009-1 Variable Funding Rental Car Asset Backed Notes, or the "Series 2009-1 Notes." The facility has an expected maturity date of
January 2012 and a 3 month controlled amortization period beginning in November 2011. The aggregate principal amount of such facility is $2.1 billion and such facility is available to
HVF on a revolving basis until the controlled amortization period begins in November 2011.

Immediately
prior to the issuance of the Series 2009-1 Notes, HVF caused the termination of the series supplements and note purchase agreements relating to its
Series 2005-3 Variable Funding Rental Car Asset Backed Notes, or the "Series 2005-3 Notes," Series 2005-4 Variable Funding Rental Car Asset
Backed Notes, or the "Series 2005-4 Notes," and Series 2008-1 Variable Funding Rental Car Asset

92

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Backed
Notes, or the "Series 2008-1 Notes," or the "Terminated VFNs," and caused the repayment and cancellation in full of the Terminated VFNs. The Terminated VFNs had expected
final maturity dates ranging from November 2009 to November 2010 and we had an aggregate of approximately $2.0 billion of total capacity (prior to borrowing base or other limitations) under the
Terminated VFNs. In effect we replaced the $2.0 billion of total capacity under the Terminated VFNs with the $2.1 billion of capacity that we have under the
Series 2009-1 Notes while extending the expected final maturity date to January 2012.

In
October 2009 HVF issued $1.2 billion in aggregate principal amount of new medium term (3 and 5 year) Series 2009-2 rental car asset backed notes, or the
"Series 2009-2 Notes." The 3 year notes carry a 4.26% coupon (4.30% yield) and the 5 year notes carry a 5.29% coupon (5.35% yield) with expected final maturities in
2013 and 2015, respectively. The advance rate on the notes is approximately 66%. In general, we expect to use the Series 2009-2 Notes to replace the Series 2005-1
and 2005-2 Rental Car Asset Backed Notes, or the "2005 Notes," as they mature in 2010.

Based
on all that we have accomplished in 2009, our current availability under our various credit facilities and our business plan, we believe we have sufficient liquidity to meet our 2010 debt
maturities. We still need to refinance approximately $1.2 billion of our international fleet debt that matures in December 2010 and we are currently in discussions with banks and lenders to
review
our refinancing options; however there can be no assurance that we will be able to refinance this indebtedness on terms comparable to our recent refinancings, or at all.

The
agreements governing our corporate indebtedness require us to comply with two key covenants based on a consolidated leverage ratio and a consolidated interest expense coverage ratio. Our failure
to comply with the obligations contained in any agreements governing our indebtedness could result in an event of default under the applicable instrument, which could result in the related debt
becoming immediately due and payable and could further result in a cross default or cross acceleration of our debt issued under other instruments. However, as a result of the above-mentioned actions
and planned future actions, we believe that we will remain in compliance with our corporate debt covenants and that cash generated from operations, together with amounts available under various
liquidity facilities will be adequate to permit us to meet our debt service obligations, ongoing costs of operations, working capital needs and capital expenditure requirements for the next twelve
months. Our future financial and operating performance, ability to service or refinance our debt and ability to comply with covenants and restrictions contained in our corporate debt agreements will
be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

Basis of Presentation

Principles of Consolidation

The consolidated financial statements include the accounts of The Hertz Corporation and our wholly-owned and majority-owned domestic and
international subsidiaries. All significant intercompany transactions have been eliminated.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or "GAAP,"
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Actual results could differ materially from those estimates.

Significant
estimates inherent in the preparation of the consolidated financial statements include depreciation of revenue earning equipment, reserves for litigation and other contingencies,
accounting

93

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

for
income taxes and related uncertain tax positions, pension costs valuation, useful lives and impairment of long-lived tangible and intangible assets, valuation of stock-based
compensation, public liability and property damage reserves, reserves for restructuring, allowance for doubtful accounts and fair value of derivatives.

Reclassifications

Certain prior period amounts have been reclassified to conform with current reporting, including those relating to noncontrolling interests which
conform with the provisions of ASC 810-10, which became effective for us in January 2009.

For
2008 and 2007 periods presented in this Report we have revised our consolidated statements of cash flows to exclude the impact of non-cash purchases and sales of revenue earning
equipment and property and equipment which were included in "accounts payable" or "receivables" at the end of the period. Cash provided by operating activities for the years ended December 31,
2008 and 2007 was revised to $2,544.2 million and $2,804.7 million from the $2,095.5 million and $3,089.5 million, respectively, previously reported, while cash used for
investing activities was revised to $1,908.3 million and $2,058.8 million from the $1,459.6 million and $2,343.6 million, respectively, previously reported. See
Note 17 in our Form 10-Q for the quarterly period ended June 30, 2009 filed with the SEC on August 10, 2009, or the "Second Quarter
Form 10-Q."

Revenue Recognition

Rental and rental-related revenue (including cost reimbursements from customers where we consider ourselves to be the principal versus an agent) are
recognized over the period the revenue earning equipment is rented based on the terms of the rental or leasing contract. Revenue related to new equipment sales and consumables is recognized at the
time of delivery to, or pick-up by, the customer and when collectability is reasonably assured. Fees from our licensees are recognized over the period the underlying licensees' revenue is
earned (over the period the licensees' revenue earning equipment is rented).

Sales
tax amounts collected from customers have been recorded on a net basis.

Cash and Cash Equivalents and Other

We consider all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.

In
our Consolidated Statements of Cash Flows, we net cash flows from revolving borrowings in the line item "Proceeds (repayments) under the revolving lines of credit, net." The contractual maturities
of such borrowings may exceed 90 days in certain cases.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents includes cash and cash equivalents that are not readily available for our normal disbursements. Restricted cash
and cash equivalents are restricted for the purchase of revenue earning vehicles and other specified uses under our Fleet Debt facilities, for our Like-Kind Exchange Program, or "LKE
Program," and to satisfy certain of our self-insurance regulatory reserve requirements. As of December 31, 2009 and 2008, the portion of total restricted cash and cash equivalents
that was associated with our Fleet Debt facilities was $295.0 million and $557.2 million, respectively. The decrease in restricted cash and cash equivalents associated with our fleet
debt of

94

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

$262.2 million
from December 31, 2008 to December 31, 2009, primarily related to payments to reduce fleet debt and the timing of purchases and sales of revenue earning vehicles.

Receivables

Receivables are stated net of allowances for doubtful accounts, and represents credit extended to manufacturers and customers that satisfy defined
credit criteria. The estimate of the allowance for doubtful accounts is based on our historical experience and our judgment as to the likelihood of ultimate payment. Actual receivables are
written-off against the allowance for doubtful accounts when we determine the balance will not be collected. Bad debt expense is reflected as a component of Selling, general and
administrative in our consolidated statements of operations.

Depreciable Assets

The provisions for depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the respective
assets, as follows:

Revenue Earning Equipment:Cars

4 to 24 monthsOther equipment

24 to 108 monthsBuildings

8 to 50 yearsCapitalized internal use software

1 to 15 yearsService cars and service equipment

1 to 25 yearsOther intangible assets

3 to 15 yearsLeasehold improvements

The shorter of their economic lives or the lease term.


We
follow the practice of charging maintenance and repairs, including the cost of minor replacements, to maintenance expense accounts. Costs of major replacements of units of property are capitalized
to property and equipment accounts and depreciated on the basis indicated above. Gains and losses on dispositions of property and equipment are included in income as realized. 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 changed 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.

95

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Environmental Liabilities

The use of automobiles and other vehicles is subject to various governmental controls designed to limit environmental damage, including that caused
by emissions and noise. Generally, these controls are met by the manufacturer, except in the case of occasional equipment failure requiring repair by us. To comply with environmental regulations,
measures are taken at certain locations to reduce the loss of vapor during the fueling process and to maintain, upgrade and replace underground fuel storage tanks. We also incur and provide for
expenses for the cleanup of petroleum discharges and other alleged violations of environmental laws arising from the disposition of waste products. We do not believe that we will be required to make
any material capital expenditures for environmental control facilities or to make any other material expenditures to meet the requirements of governmental authorities in this area. Liabilities for
these expenditures are recorded at undiscounted amounts when it is probable that obligations have been incurred and the amounts can be reasonably estimated.

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.

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.

Foreign Currency Translation and Transactions

Assets and liabilities of international subsidiaries are translated at the rate of exchange in effect on the balance sheet date; income and expenses
are translated at the average rate of exchange prevailing during the year. The related translation adjustments are reflected in "Accumulated other comprehensive loss" in the equity section of our
consolidated balance sheet. As of December 31, 2009 and 2008, the accumulated foreign currency translation gain was $132.1 million and $54.5 million, respectively. Foreign
currency gains and losses resulting from transactions are included in earnings.

Derivative Instruments

We are exposed to a variety of market risks, including the effects of changes in interest rates, fuel prices and foreign currency exchange rates. We
manage our exposure to these market risks through our regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Derivative financial
instruments are viewed as risk management tools and have not been used for speculative or trading purposes. In addition, derivative financial instruments are entered

96

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

into
with a diversified group of major financial institutions in order to manage our exposure to counterparty nonperformance on such instruments. We account for all derivatives in accordance with
GAAP, which requires that all derivatives be 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. See Note 12Financial Instruments.

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 a change to reflect tax on these amounts.

Prior
to the Acquisition, we and our domestic subsidiaries filed a consolidated federal income tax return with Ford. Pursuant to a tax sharing agreement, with Ford, current and deferred taxes were
reported and paid to Ford, as if we had filed our own consolidated tax returns with our domestic subsidiaries. The tax sharing agreement provided that we were reimbursed for foreign tax credits in
accordance with the utilization of those credits by the Ford consolidated tax group.

On
December 21, 2005, in connection with the Acquisition, the tax sharing agreement with Ford was terminated. Upon termination, all tax payables and receivables with Ford were cancelled and
neither Hertz nor Ford has any future rights or obligations under the tax sharing agreement. Hertz may be exposed to tax liabilities attributable to periods it was a consolidated subsidiary of Ford.
While Ford has agreed to indemnify Hertz for certain tax liabilities pursuant to the arrangements relating to our separation from Ford, we cannot offer assurance that payments in respect of the
indemnification agreement will be available.

See
Note 7Taxes on Income.

Advertising

Advertising and sales promotion costs are expensed as incurred. We incurred net advertising expense for the years ended December 31, 2009,
2008 and 2007 of $116.3 million, $163.2 million and $173.5 million, respectively.

Impairment of Long-Lived Assets and Intangibles

We review goodwill and indefinite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying
amount of the goodwill may not be recoverable, and also review

97

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

goodwill
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. We estimate the
fair value of our reporting units using a discounted cash flow methodology. 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 ongoing restructuring activities. 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. The fair values of the assets are based upon our estimates of the
discounted cash flows. An impairment charge is recognized for the amount, if any, by which the carrying value of an asset exceeds its implied fair value. Long-lived assets, other than
goodwill and indefinite-lived intangible assets, are tested for impairment whenever events or changes in circumstances indicate that the carrying amounts of long-lived assets may not be
recoverable. The fair values recoverability of these assets are based upon our estimates of the undiscounted cash flows that are expected to result from the use and eventual disposition of the assets.
An impairment charge is recognized for the amount, if any, by which the carrying value of an asset exceeds its fair value. 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. 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. We estimate the fair value of our indefinite lived intangible assets using the
relief from royalty method. Intangible assets with finite useful lives are amortized over their respective estimated useful lives and reviewed for impairment in accordance with GAAP. We conducted the
impairment review during the fourth quarter of 2009 and concluded that there was no impairment related to our goodwill and our other intangible assets. See Note 2Goodwill and Other
Intangible Assets.

Stock-Based Compensation

We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of
the award. That cost is to be recognized over the period during which the employee is required to provide service in exchange for the award. We have 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 life, dividend yield, risk-free interest rate and forfeiture rate. See
Note 5Stock-Based Compensation.

We
are using equity accounting for restricted stock unit and performance stock unit awards. For restricted stock units the expense is based on the grant-date fair value of the stock and
the number of shares that vest, recognized over the service period. For performance stock units the expense is based on the grant-date fair value of the stock, recognized over a two year
service period depending upon a performance condition. For performance stock units, we re-assess the probability of vesting at each reporting period and if the target is not attained, we
do not recognize any expense. The performance condition is not considered in determining the grant date fair value.

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board, or "FASB," issued The FASB Accounting Standards Codification. The Codification became the
source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. On July 1, 2009, the Codification superseded all then-existing non-SEC accounting and reporting standards. All other
nongrandfathered non-SEC accounting literature not included in the Codification became nonauthoritative.

98

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In January 2009, the FASB issued guidance which contains amendments to ASC 715,"CompensationRetirement Benefits" that are intended to enhance the transparency
surrounding the types of assets and associated risks in an employer's defined benefit pension or other postretirement plan. These particular amendments became effective for us
beginning with this annual report and did not have a material impact on our financial position or results of operations. See Note 4Employee Retirement Benefits.

In
June 2009, the FASB issued guidance relating to how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be
consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entity's purpose and design and a company's ability to direct the
activities of the entity that most significantly impact the entity's economic performance. These provisions became effective for us on January 1, 2010, and it did not have a material impact on
our financial position or results of operations.

Note 2Goodwill and Other Intangible Assets

The following summarizes the changes in our goodwill, by segment, for the period presented (in thousands of dollars):

Car Rental

Equipment
Rental

TotalBalance as of January 1, 2009Goodwill

$
307.1

$
651.9

$
959.0Accumulated impairment losses


(43.0
)

(651.9
)

(694.9
)264.1





264.1Goodwill acquired during the year


24.0


2.4


26.4Other changes during the year(1)


4.7


0.2


4.9Balance as of December 31, 2009Goodwill


335.8


654.5


990.3Accumulated impairment losses


(43.0
)

(651.9
)

(694.9
)$
292.8

$
2.6

$
295.4




Car Rental

Equipment
Rental

TotalBalance as of January 1, 2008Goodwill

$
318.1

$
641.9

$
960.0Accumulated impairment losses








318.1


641.9


960.0Goodwill acquired during the year


4.8


23.7


28.5Other changes during the year(1)


(15.8
)

(13.7
)

(29.5
)Impairment charges


(43.0
)

(651.9
)

(694.9
)Balance as of December 31, 2008Goodwill


307.1


651.9


959.0Accumulated impairment losses


(43.0
)

(651.9
)

(694.9
)$
264.1

$


$
264.1


(1)In
2009 and 2008, consists of changes resulting from the translation of foreign currencies at different exchange rates from the beginning of the period to
the end of the period. In 2008, also includes pre-Acquisition tax adjustments.


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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other intangible assets, net, consisted of the following major classes (in thousands of dollars):

December 31, 2009Gross
Carrying
Amount

Accumulated
Amortization

Net
Carrying
ValueAmortizable intangible assets:Customer-related

$
600.6

$
(246.5
)
$
354.1Other


50.0


(12.0
)

38.0Total


650.6


(258.5
)

392.1Indefinite-lived intangible assets:Trade name


2,190.0





2,190.0Other


15.6





15.6Total


2,205.6





2,205.6Total other intangible assets, net

$
2,856.2

$
(258.5
)
$
2,597.7




December 31, 2008Gross
Carrying
Amount

Accumulated
Amortization

Impairment
Charge

Net
Carrying
ValueAmortizable intangible assets:Customer-related

$
620.2

$
(187.9
)
$
(17.0
)
$
415.3Other


10.9


(4.5
)




6.4Total


631.1


(192.4
)

(17.0
)

421.7Indefinite-lived intangible assets:Trade name


2,624.0





(434.0
)

2,190.0Other


9.9








9.9Total


2,633.9





(434.0
)

2,199.9Total other intangible assets, net

$
3,265.0

$
(192.4
)
$
(451.0
)
$
2,621.6


In 2008, we recorded non-cash impairment charges of $694.9 million related to our goodwill and $451.0 related to other intangible assets. The
car rental and equipment rental segments recorded non-cash impairment charges related to their goodwill of $43.0 million and $651.9 million, respectively, and to their other
intangible assets of $377.0 million and $74.0 million, respectively. These impairment charges were a result of a decline in the economy and fourth quarter 2008 operating results, and a
significant decline in both the fair value of debt and our stock price.

Amortization
of other intangible assets for the years ended December 31, 2009, 2008 and 2007, was $66.1 million, $66.3 million and $62.6 million, respectively. Based on our
amortizable intangible assets as of December 31, 2009, we expect amortization expense to range from $59.4 million to $65.1 million for each of the next five fiscal years.

During
the year ended December 31, 2009, we added 32 locations by acquiring former franchisees in our domestic and international car rental operations, as well as approximately 20 locations
associated with our acquisition of Advantage Rent A Car and one location related to an external acquisition done within our equipment rental operations. Total cash paid for intangible assets during
the year ended December 31, 2009 was $44.7 million, of this amount, $39.1 million was allocated to amortizable intangible assets, primarily comprised of the tradename and
concession agreements associated with the Advantage Rent A Car acquisition and technology assets associated with the acquisition of Eileo, S.A.S., and $5.6 million was

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

allocated
to indefinite-lived intangible assets associated with reacquired franchise rights during the year ended December 31, 2009. Each of these transactions has been accounted for using the
acquisition method of accounting in accordance with GAAP and operating results of the acquired entities from the dates of acquisition are included in our consolidated statements of operations.

Note 3Debt

Our debt consists of the following (in millions of dollars):

December 31,
2009

December 31,
2008Corporate DebtSenior Term Facility, average interest rate: 2009, 2.0%; 2008, 3.3% (effective average interest rate: 2009, 2.0%; 2008, 3.4%); net of unamortized discount:
2009, $13.9; 2008, $18.6

$
1,344.7

$
1,353.6Senior ABL Facility; net of unamortized discount: 2009, $9.6; 2008, $13.3


(9.6
)

(13.3
)Senior Notes, average interest rate: 2009, 8.7%; 2008, 8.7%


2,054.7


2,113.6Senior Subordinated Notes, average interest rate: 2009, 10.5%; 2008, 10.5%


518.5


600.0Promissory Notes, average interest rate: 2009, 7.3%; 2008, 7.2% (effective average interest rate: 2009, 7.4%; 2008, 7.3%); net of unamortized discount:
2009, $3.3; 2008, $4.0


391.4


461.4Notes payable, average interest rate: 2009, 8.0%; 2008, 5.5%


9.6


9.7Foreign subsidiaries' debt denominated in foreign currencies:Short-term bank borrowings, average interest rate: 2009, 10.8%; 2008, 4.5%


7.3


54.9Other borrowings, average interest rate: 2009, 2.5%; 2008, 5.1%


5.4


5.6Total Corporate Debt


4,322.0


4,585.5Fleet DebtU.S. Fleet Debt, average interest rate: 2009, 4.7%; 2008, 4.3% (effective average interest rate: 2009, 4.7%; 2008, 4.3%); net of unamortized discount: 2009,
 $16.7; 2008, $7.5


4,058.3


4,254.5International Fleet Debt, average interest rate: 2009, 2.1%; 2008, 5.0% (effective average interest rate: 2009, 2.2%; 2008, 5.1%); net of unamortized
discount: 2009, $8.7; 2008, $6.5


705.3


1,027.1International ABS Fleet Financing Facility, average interest rate: 2009, 3.6%; 2008, 7.2%; (effective average interest rate: 2009, 3.6%; 2008, 7.4%); net
of unamortized discount: 2009, $5.7; 2008, $10.3


383.2


565.3Fleet Financing Facility, average interest rate: 2009, 1.5%; 2008, 2.0% (effective average interest rate: 2009, 1.5%; 2008, 2.1%); net of unamortized
discount: 2009, $0.8; 2008, $1.2


147.2


149.3Brazilian Fleet Financing Facility, average interest rate: 2009, 13.3%; 2008, 16.3%


69.3


54.1Canadian Fleet Financing Facility, average interest rate: 2009, 0.5%; 2008, 3.8%


55.6


111.6Belgian Fleet Financing Facility, average interest rate: 2009, 1.8%; 2008, 4.7%


33.7


31.2Capitalized Leases, average interest rate: 2009, 4.8%; 2008, 6.2%


222.4


193.7Total Fleet Debt


5,675.0


6,386.8Total Debt

$
9,997.0

$
10,972.3


---

Note: For further information on the definitions and terms of our debt, see descriptions below.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The
aggregate amounts of maturities of debt for each of the twelve-month periods ending December 31 (in millions of dollars) are as follows: 2010, $4,574.6 (including $1,598.9 of other
short-term borrowings); 2011, $122.4; 2012, $1,785.6; 2013, $250.8; 2014, $2,425.9; after 2014, $896.4.

Our
short-term borrowings as of December 31, 2009 include, among other items, the amounts outstanding under our International Fleet Debt facility, International ABS Fleet Financing
Facility, Fleet Financing Facility, Brazilian Fleet Financing Facility, Canadian Fleet Financing Facility, Belgian Fleet Financing Facility and Capitalized Leases. These amounts are considered
short-term in nature since they have maturity dates of three months or less; however these facilities are revolving in nature and do not expire at the time of the short-term
debt maturity. In addition, we include certain scheduled payments of principal under our ABS Program as short-term borrowings.

As
of December 31, 2009, there were outstanding standby letters of credit totaling $586.3 million. Of this amount, $300.0 million has been issued for the benefit of the ABS
Program ($200.0 million of which was issued by Ford Motor Company, or "Ford," and $100.0 million of which was used under the Senior Credit Facilities) and the remainder is primarily to
support self-insurance programs (including insurance policies with respect to which we have indemnified the policy issuers for any losses) in the United States, Canada and Europe and to
support airport concession obligations in the United States and Canada. As of December 31, 2009, none of these letters of credit have been drawn upon. In November 2010 the "Ford" letter of
credit will expire in conjunction with the maturity of the 2005 Series Notes.

Senior Credit Facilities

Senior Term Facility:In connection with the Acquisition, Hertz entered into a credit agreement, dated December 21, 2005, with respect to its Senior Term
Facility with Deutsche Bank AG, New York Branch as administrative agent and collateral agent, Lehman Commercial Paper Inc. as syndication agent, Merrill Lynch & Co., Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated as documentation agent, and the other financial institutions party thereto from time to time. The facility consisted of a
$1,400.0 million secured term loan facility providing for loans denominated in U.S. dollars. In addition, there is a pre-funded synthetic letter of credit facility in an aggregate
principal amount of $250.0 million. The term loan facility and the synthetic letter of credit facility will mature in December 2012. The term loan amortizes in nominal quarterly installments
(not exceeding one percent of the aggregate principal amount thereof per annum) until the maturity date. At the borrower's election, the interest rates per annum applicable to the loans under the
Senior Term Facility are based on a fluctuating rate of interest measured by reference to either (1) an adjusted London inter-bank offered rate, or "LIBOR," plus a borrowing margin
or (2) an alternate base rate plus a borrowing margin. In addition, the borrower pays letter of credit participation fees on the full amount of the synthetic letter of credit facility plus
fronting fees for the letter of credit issuing banks and other customary fees in respect of the Senior Term Facility. As of December 31, 2009, we had $1,344.7 million in borrowings
outstanding under this facility, which is net of a discount of $13.9 million and had issued $249.4 million in letters of credit.

Senior ABL Facility:Hertz, Hertz Equipment Rental Corporation and certain other subsidiaries of Hertz entered into a credit agreement, dated December 21,
2005, with respect to the Senior ABL Facility with Deutsche Bank AG, New York Branch as administrative agent, Lehman Commercial Paper Inc. as syndication agent, Merrill
Lynch & Co., Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated as documentation agent and the financial institutions party thereto from time to time. This facility
provided (subject to availability under a borrowing base) for aggregate maximum borrowings of $1,800.0 million under a revolving loan facility providing for loans denominated in U.S. dollars,
Canadian dollars, Euros and Pound Sterling. Up to $200.0 million of the revolving loan facility is available for the issuance of

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letters
of credit. Hertz and Hertz Equipment Rental Corporation are the U.S. borrowers under the Senior ABL Facility and Matthews Equipment Limited, or "Matthews," and its subsidiaries Western
Shut-Down (1995) Ltd. and Hertz Canada Equipment Rental Partnership are the Canadian borrowers under the Senior ABL Facility. The Senior ABL Facility will mature in February 2012.
At the borrower's election, the interest rates per annum applicable to the loans under the Senior ABL Facility will be based on a fluctuating rate of interest measured by reference to either
(1) adjusted LIBOR plus a borrowing margin or (2) an alternate base rate plus a borrowing margin. The borrower will pay customary commitment and other fees in respect of the Senior ABL
Facility. At December 31, 2009, net of a discount of $9.6 million, Hertz and Matthews Equipment Limited collectively had no borrowings outstanding under this facility and issued
$85.6 million in letters of credit.

Hertz's
obligations under the Senior Term Facility and the Senior ABL Facility are guaranteed by Hertz Investors, Inc., its immediate parent and most of its direct and indirect domestic
subsidiaries (subject to certain exceptions, including for subsidiaries involved in the U.S. Fleet Debt facility and similar special purpose financings), though HERC does not guarantee Hertz's
obligations under the Senior ABL Facility because it is a borrower under that facility. In addition, the obligations of the Canadian borrowers under the Senior ABL Facility are guaranteed by their
respective subsidiaries, if any, subject to limited exceptions. The lenders under each of the Senior Term Facility and the Senior ABL Facility have received a security interest in substantially all of
the tangible and intangible assets of the borrowers and guarantors under those facilities, including pledges of the stock of certain of their respective subsidiaries, subject in each case to certain
exceptions (including in respect of the U.S. Fleet Debt, the International Fleet Debt and, certain other secured fleet financing). Consequently, these assets will not be available to satisfy the
claims of our general creditors.

We
refer to the Senior Term Facility and the Senior ABL Facility together as the "Senior Credit Facilities." The Senior Credit Facilities contain a number of covenants that, among other things, limit
or restrict the ability of the borrowers and the guarantors to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make dividends and other
restricted payments, create liens, make investments, make acquisitions, engage in mergers, change the nature of their business, make capital expenditures, or engage in certain transactions with
affiliates. Under the Senior Term Facility, the borrowers are subject to financial covenants, including a requirement to maintain a specified leverage ratio and a specified interest coverage ratio for
specified periods. Also, under the Senior ABL Facility, if the borrowers fail to maintain a specified minimum level of borrowing capacity, they will then be subject to financial covenants under such
facility, including a specified leverage ratio and a specified fixed charge coverage ratio of one to one. Failure to comply with the financial covenants under the Senior Credit Facilities would result
in a default under the credit agreements governing the Senior Credit Facilities and, absent a waiver or an amendment from the lenders, permit the acceleration of all outstanding borrowings under the
Senior Credit Facilities. As of December 31, 2009, Hertz was in compliance with such financial covenants. The Senior Credit Facilities are subject to certain mandatory prepayment requirements
and provide for customary events of default.

Restrictive
covenants in the Senior Term Facility (as amended) permit cash dividends to be paid to Hertz Holdings (i) in an aggregate amount not to exceed the greater of a specified minimum
amount and 1.0% of consolidated tangible assets less certain investments, (which payments are deducted in determining the amount available as described in the next clause (ii)) (ii) in
additional amounts up to a specified available amount determined by reference to, among other things, 50% of consolidated net income from October 1, 2005 to the end of the most recent fiscal
quarter for which consolidated financial statements of Hertz are available (less certain investments) and (iii) in additional amounts, up to a specified amount of certain equity contributions
made by Hertz Holdings to Hertz (less certain investments).

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Restrictive
covenants in the Senior ABL Facility (as amended) permit cash dividends to be paid to Hertz Holdings in an aggregate amount, taken together with certain other investments, acquisitions and
optional prepayments, not to exceed $100 million. Hertz may also pay additional cash dividends under the Senior ABL Facility, and in any amount, so long as (a) there is at least
$250 million of availability under the facility after giving effect to the proposed dividend, (b) if certain other payments when taken together with the proposed dividend would exceed
$50 million in a 30-day period, Hertz can demonstrate projected average availability in the following six-month period of $250 million or more, (c) (i)
Hertz is in pro forma compliance with the consolidated leverage ratio and consolidated fixed charge coverage ratio set forth in the Senior ABL Facility or (ii) the amount of the proposed
dividend does not exceed the sum of (x) 1.0% of consolidated tangible assets plus (y) a specified available amount determined by reference to, among other things, 50% of consolidated net
income from October 1, 2005 to the end of the most recent fiscal quarter for which consolidated financial statements of Hertz are available (which amount is net of amounts paid under the
foregoing clause (x)) plus (z) a specified amount of certain equity contributions made by Hertz Holdings to the borrowers under such facility and (d) no default exists or would
result from such dividends.

On
June 30, 2006, Hertz entered into amendments to each of its Senior Term Facility and Senior ABL Facility. The amendments provide, among other things, for additional capacity under the
covenants in these credit facilities to enter into certain sale and leaseback transactions, to pay cash dividends and make loans to Hertz Holdings that would, among other things, provide Hertz
Holdings with cash for the payment of interest on Hertz Holdings' indebtedness (including, but not limited to, the Hertz Holdings Loan Facility) and, in the case of the amendment to the Senior Term
Facility, to make investments. The ability of Hertz to pay cash dividends and make loans to Hertz Holdings remains subject to Hertz's meeting specified financial tests, as described above, as well as
requirements imposed by applicable Delaware law. The amendment to the Senior Term Facility also permitted Hertz to use proceeds of the $293 million Delayed Draw Term Loan to repay borrowings
outstanding under the Senior ABL Facility, in addition to repaying certain other outstanding indebtedness of Hertz.

On
February 9, 2007, Hertz entered into an amendment to its Senior Term Facility. The amendment was entered into for the purpose of (i) lowering the interest rates payable on the Senior
Term Facility by up to 50 basis points from the interest rates previously payable thereunder, and revising financial ratio requirements for specific interest rate levels; (ii) eliminating
certain mandatory prepayment requirements; (iii) increasing the amounts of certain other types of indebtedness that Hertz and its subsidiaries may incur outside of the Senior Term Facility;
(iv) permitting certain additional asset dispositions and sale and leaseback transactions; and (v) effecting certain technical and administrative changes to the Senior Term Facility.
During the year ended December 31, 2007, Hertz recorded an expense of $14.0 million, in its consolidated statement of operations, in "Interest, net of interest income," associated with
the write-off of debt costs in connection with the amendment of the Senior Term Facility. Additionally, in February 2007, Hertz permanently repaid a
portion of the Senior Term Facility, bringing the maximum borrowings thereunder down from $2,000 million to $1,400 million.

On
February 15, 2007, Hertz, Hertz Equipment Rental Corporation and certain other subsidiaries entered into an amendment to its Senior ABL Facility. The amendment was entered into for the
purpose of (i) lowering the interest rates payable on the Senior ABL Facility by up to 25 basis points from the interest rates previously payable thereunder, and revising financial ratio
requirements for specific interest rate levels; (ii) increasing the availability under the Senior ABL Facility from $1,600 million to $1,800 million; (iii) extending the
term of the commitments under the Senior ABL Facility to February 15, 2012; (iv) increasing the amounts of certain other types of indebtedness that the borrowers and their subsidiaries
may incur outside of the Senior ABL Facility; (iv) permitting certain additional asset

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dispositions
and sale and leaseback transactions; and (v) effecting certain technical and administrative changes to the Senior ABL Facility. During the year ended December 31, 2007, we
recorded an expense of $2.2 million in our consolidated statement of operations, in "Interest, net of interest income," associated with the write-off of debt costs in connection
with the amendment of the Senior ABL Facility.

On
May 23, 2007, the Senior ABL Facility and the Senior Term Facility were each amended to permit Hertz and its subsidiaries to guarantee obligations in respect to the deferred purchase price
of vehicles and all other obligations arising under vehicle supply agreements entered into by Fleetco (Espana), S.L., an entity created to own the Spanish rental car fleet in connection with the
pending securitization of the rental car fleets in a number of European countries and Australia. Due to Spanish law considerations, Fleetco (Espana), S.L. is an "orphan" entity which is an indirect
subsidiary of a charitable trust. The Senior Credit Facilities generally permit Hertz and its subsidiaries to guarantee obligations of one another but not of unaffiliated entities, subject to certain
exceptions.

On
September 30, 2007, the Senior ABL Facility was amended to add Hertz Canada Equipment Rental Partnership, an Ontario General Partnership, as an additional Canadian Borrower. Hertz Canada
Equipment Rental Partnership, whose partners are our wholly-owned subsidiary, Matthews and its wholly-owned subsidiary, was formed in connection with a reorganization of Matthews and, as part of that
reorganization, received title to most of the assets of Matthews.

On
March 31, 2009, Hertz entered into an amendment, or the "Term Loan Amendment," to the Senior Term Facility. The Term Loan Amendment provides, in material part, that Hertz may make voluntary
prepayments of the term loans under the credit agreement that governs the Senior Term Facility, or the "Credit Agreement," at a discount to their principal amount on up to four occasions for a period
of one year after the date of the Term Loan Amendment. The aggregate par principal amount of all such term loans so prepaid may not exceed $500.0 million. The discount applicable to any such
prepayments will be determined through modified "Dutch auction" procedures and
subject to the other terms and conditions described in the Term Loan Amendment. Hertz may make any such prepayment only if it's unrestricted cash and cash equivalents plus available commitments under
Hertz's senior asset-based loan facility equal or exceed $1.0 billion after giving effect to such prepayment. The Term Loan Amendment does not obligate Hertz to make any such prepayments. The
Term Loan Amendment also makes certain technical and conforming changes to the terms of the Credit Agreement, including changes to clarify the manner in which Consolidated Vehicle Interest Expense (as
defined in the Credit Agreement) is reflected in the calculation of Excess Cash Flow, which is at times used to determine Hertz's capacity to engage in certain transactions.

Senior Notes and Senior Subordinated Notes

In connection with the Acquisition, CCMG Acquisition Corporation issued the Senior Notes and the Senior Subordinated Notes under separate indentures
between CCMG Acquisition Corporation and Wells Fargo Bank, National Association, as trustee. Hertz and the guarantors entered into supplemental indentures, dated as of the Closing Date, pursuant to
which Hertz assumed the obligations of CCMG Acquisition Corporation under the Senior Notes, the Senior Subordinated Notes and the respective indentures, and the guarantors issued the related
guarantees. CCMG Acquisition Corporation subsequently merged with and into Hertz, with Hertz as the surviving entity.

Our
"Senior Dollar Notes" are the $1,800.0 million aggregate principal amount of 8.875% Senior Notes issued by Hertz in connection with the Acquisition. Our "Senior Euro Notes" are the
€225 million aggregate principal amount of 7.875% Senior Notes issued by Hertz in connection with the Acquisition. We refer to the Senior Dollar Notes and the Senior Euro Notes
together as the "Senior Notes." Our

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

"Senior
Subordinated Notes" refer to the $600.0 million aggregate principal amount of 10.5% Senior Subordinated Notes due January 2016 issued by Hertz in connection with the Acquisition.

As
of December 31, 2009, $2,054.7 million and $518.5 million in borrowings were outstanding under the Senior Notes and Senior Subordinated Notes, respectively. On
October 1, 2006, we designated our Senior Euro Notes as an effective net investment hedge of our Euro-denominated net investment in our international operations. As a result of this
net investment hedge designation, as of December 31, 2009, $19.2 million of losses, which is net of tax of $17.8 million, attributable to the translation of our Senior Euro Notes
into the U.S. dollar, are recorded in our consolidated balance sheet in "Accumulated other comprehensive loss." The Senior Notes will mature in January 2014, and the Senior Subordinated Notes will
mature in January 2016. Hertz's obligations under the indentures are guaranteed by each of its direct and indirect domestic subsidiaries that is a guarantor under the Senior Term Facility.

Both
the indenture for the Senior Notes and the indenture for the Senior Subordinated Notes contain covenants that, among other things, limit the ability of Hertz and its restricted subsidiaries,
described in the respective indentures, to incur more debt, pay dividends, redeem stock or make other distributions, make investments, create liens, transfer or sell assets, merge or consolidate and
enter into certain transactions with Hertz's affiliates. The indenture for the Senior Subordinated Notes also contains subordination provisions and limitations on the types of senior subordinated debt
that may be incurred. The indentures also contain certain mandatory and optional prepayment or redemption provisions and provide for customary events of default.

The
restrictive covenants in the indentures governing the Senior Notes and the Senior Subordinated Notes permit Hertz to make loans, advances, dividends or distributions to Hertz Holdings in an amount
determined by reference to, among other things, consolidated net income for the period from October 1, 2005 to the end of the most recently ended fiscal quarter for which consolidated financial
statements of Hertz are available, so long as Hertz's consolidated coverage ratio remains greater than 2.00:1.00 after giving pro forma effect to such restricted payments. Hertz is also permitted to
make restricted payments to Hertz Holdings in an amount not exceeding the greater of a specified minimum amount and 1% of consolidated tangible assets (which payments are deducted in determining the
amount available as described in the preceding sentence), and in an amount equal to certain equity contributions to Hertz, in each case, less certain investments and other restricted payments.

On
January 12, 2007, Hertz completed exchange offers for its outstanding Senior Notes and Senior Subordinated Notes whereby over 99% of the outstanding notes were exchanged for a like principal
amount of new notes with identical terms that were registered under the Securities Act of 1933 pursuant to a registration statement on Form S-4.

In
April 2009, we made aggregate open market repurchases, at a discount, of approximately $68.0 million and $81.5 million in face value of our Senior Notes and Senior Subordinated Notes,
respectively. As a result of these repurchases, we recorded a gain of $48.5 million, net of transaction costs, in "Interest and other income, net" for the year ended December 31, 2009.

Promissory Notes

As of December 31, 2009, we had approximately $391.4 million (net of a $3.3 million discount), outstanding in
pre-Acquisition promissory notes issued under three separate indentures existing prior to the Acquisition at an average interest rate of 7.3%. These pre-Acquisition promissory
notes currently have maturities ranging from June 2010 to January 2028.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

U.S. Fleet Debt

Our "U.S. Fleet Debt" is comprised of the following facilities:

Series 2005 Notes.Hertz Vehicle Financing LLC, or "HVF," a bankruptcy-remote special purpose entity wholly-owned by Hertz, entered into an amended
and restated base indenture, dated as of December 21, 2005, with BNY Midwest Trust Company as trustee, or the "ABS Indenture," and a number of related supplements to the ABS Indenture, each
dated as of December 21, 2005, with BNY Midwest Trust Company as trustee and securities intermediary, or, collectively, the "ABS Supplement." On the Closing Date, HVF, as issuer, issued
approximately $4,300 million of new medium term asset-backed notes consisting of 11 classes of notes in two series under the ABS Supplement, the net proceeds of which were used to finance the
purchase of vehicles from related entities and the repayment or cancellation of existing debt. HVF also issued approximately $1,500 million of variable funding notes in two series, none of
which were funded at closing. In September 2009, the series supplements and note purchase agreements for the variable funding notes under the Series 2005 notes were terminated. As of
December 31, 2009, $2,871.6 million in borrowings were outstanding under the Series 2005 notes, net of a $3.4 million discount, with an average interest rate of 4.6%.

MBIA
and Ambac provide credit enhancements in the form of financial guarantees for our 2005 Notes, with each providing guarantees for approximately half of the $2,871.6 million in principal
amount of the notes that were outstanding as of December 31, 2009 under our ABS Program. Under these arrangements, either MBIA Insurance Corporation or Ambac Assurance Corporation will
guarantee the timely payment of interest on and ultimate payment of principal of such notes.

In
connection with the Acquisition and the issuance of $3,550.0 million of floating rate U.S. Fleet Debt, HVF entered into certain interest rate swap agreements, or the "HVF Swaps," effective
December 21, 2005, which qualify as cash flow hedging instruments. These agreements mature at various terms, in connection with the scheduled maturity of the associated debt obligations,
through November 2010. Under these agreements, until February 2009, HVF was paying monthly interest at a fixed rate of 4.5% per annum in exchange for monthly amounts at one-month LIBOR,
effectively transforming the floating rate U.S. Fleet Debt to fixed rate obligations. In March 2009, HVF made a cash payment to have the fixed rate on these swaps reset to the then current market
rates of 0.872% and 1.25% for the swaps maturing in February 2010 and November 2010, respectively. Additionally, a new hedging relationship was designated between the HVF Swaps and the remaining
$2,825.0 million of floating rate U.S. Fleet Debt. See Note 12Financial Instruments.

In
connection with the entrance into the HVF Swaps, Hertz entered into seven differential interest rate swap agreements, or the "differential swaps." These differential swaps were required to be put
in place to protect the counterparties to the HVF Swaps in the event of an "amortization event" under the asset-backed notes agreements. In the event of an amortization event, the amount by which the
principal balance on the floating rate portion of the U.S. Fleet Debt is reduced, exclusive of the originally scheduled amortization, becomes the notional amount of the differential swaps, and is
transferred to Hertz. See Note 12Financial Instruments.

On
October 24, 2007, supplements to the ABS Indenture were amended to increase the maximum non-eligible vehicle amount from 65% to 85% of the adjusted aggregate asset amount, thus
effectively increasing the amount of vehicles which are not subject to manufacturer repurchase programs that can be included in the borrowing base under the ABS Program.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In
addition, on September 18, 2009, HVF entered into amendments to the series supplements relating to its 2005 Notes. Among other things, the amendments with respect to each such series
supplement add new concentration limits and change existing concentration limits for vehicles manufactured by certain manufacturers.

HVF
is subject to numerous restrictive covenants under the ABS Indenture and the other agreements governing the U.S. Fleet Debt, including restrictive covenants with respect to liens, indebtedness,
benefit plans, mergers, disposition of assets, acquisition of assets, dividends, officers' compensation, investments, agreements, the types of business it may conduct and other customary covenants for
a bankruptcy-remote special purpose entity. The U.S. Fleet Debt is subject to events of default and amortization events that are customary in nature for U.S. rental car asset-backed securitizations of
this type. The occurrence of an amortization event or event of default could result in the acceleration of principal of the notes and a liquidation of the U.S. car rental fleet.

In
September 2009, HVF entered into amendments and restatements, of many of the agreements relating to its U.S. asset-backed fleet debt, or collectively, the "U.S. Fleet Debt Program Documents,"
including:



Among
other things, these amendments (i) give HVF the ability, subject to certain conditions, to issue series of notes secured by segregated pools of collateral pledged to support only such
series; (ii) modify the conditions precedent to HVF issuing a new series of notes under the ABS Indenture; (iii) modify certain conditions precedent to the amendment of the ABS
Indenture, series supplements and certain of the other U.S. Fleet Debt Program Documents; (iv) provide that if certain events of default with respect to manufacturers of vehicles subject to
repurchase programs (each, a "Manufacturer Event of Default") are cured, the effects of such events of default on the U.S. Fleet Debt Program Documents generally cease; (v) provide that if a
Manufacturer Event of Default occurs, the related manufacturer does not cease to be an eligible manufacturer, thereby allowing HVF to finance a greater proportion of vehicles manufactured by such
manufacturer during a Manufacturer Event of Default and (vi) give HVF the ability, subject to certain conditions, to issue
one or more series of notes that would be subordinated in rights to payment of interest and principal to each other series of notes outstanding.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We
expect to repay these notes as they mature in 2010 with a combination of revolver borrowings under our new Series 2009-1 Notes, corporate liquidity or by issuing a new series of
notes.

Series 2008-1 Notes.On September 12, 2008, HVF completed the closing of a variable funding note facility referred to as the
Series 2008-1 Notes. In September 2009, the series supplement and note purchase agreement for the Series 2008-1 Notes were terminated.

Series 2009-1 Notes.In September 2009, HVF issued the Series 2009-1 Notes. The aggregate principal amount of such facility
is $2.1 billion and this facility is available to HVF on a revolving basis through the expected final maturity date of January 2012 with a January 2013 legal final maturity. The
Series 2009-1 Notes are expected to bear interest at variable rates based upon the weighted average of the commercial paper rates paid by the bank conduits advancing funds to HVF
plus a borrowing spread which varies based on the rating of the Series 2009-1 Notes. The borrowing spread on the Series 2009-1 Notes is subject to increase if
Moody's Investors Service, or "Moody's," downgrades their rating of the Series 2009-1 Notes below "Aa3." The borrowing spread on the Series 2009-1 Notes is also
subject to increase during the continuance of an amortization event with respect to the Series 2009-1 Notes. The Series 2009-1 Notes are currently rated "Aa1" by
Moody's. The Series 2009-1 Notes are subject to events of default and amortization events that are customary in nature for U.S. rental car asset-backed securitizations of this type,
including non-payment of principal or interest, violation of covenants, material inaccuracy of representations or warranties, failure to maintain certain enhancement levels and insolvency
or certain bankruptcy events. The occurrence of an amortization event or event of default could result in the rapid amortization of the Series 2009-1 Notes and in certain instances
the liquidation of vehicles in the U.S. car rental fleet. In connection with the issuance of the Series 2009-1 Notes, HVF purchased a 5% interest rate cap. See
Note 12Financial Instruments.

Immediately
prior to the issuance of the Series 2009-1 Notes, HVF caused the termination of the series supplements and note purchase agreements relating to its
Series 2005-3 Variable Funding Rental Car Asset Backed Notes, or the "Series 2005-3 Notes," Series 2005-4 Variable Funding Rental Car Asset
Backed Notes, or the "Series 2005-4 Notes," and Series 2008-1 Variable Funding Rental Car Asset Backed Notes, or the "Series 2008-1 Notes," or
the "Terminated VFNs," and caused the repayment and cancellation in full of the Terminated VFNs. The Terminated VFNs had expected final maturity dates ranging from November 2009 to November 2010 and
we had an aggregate of approximately $2.0 billion of total capacity (prior to borrowing base or other limitations) under the Terminated VFNs. As of December 31, 2009, no amounts were
outstanding under the Series 2009-1 Notes.

Series 2009-2 Notes.In October 2009 HVF issued $1.2 billion in aggregate principal amount of Series 2009-2 Notes. The
3 year notes carry a 4.26% coupon (4.30% yield) and the 5 year notes carry a 5.29% coupon (5.35% yield) with expected final maturities in 2013 and 2015, respectively. The advance rate on
the notes is approximately 66%. The Series 2009-2 Notes are currently rated "Aaa" by Moody's.

The
Series 2009-2 Notes are subject to events of default and amortization events that are customary in nature for U.S. rental car asset-backed securitizations of this type,
including non-payment of principal or interest, violation of covenants, material inaccuracy of representations or warranties, failure to maintain certain enhancement levels and insolvency
or certain bankruptcy events. The occurrence of an amortization event or event of default could result in the rapid amortization of the Series 2009-2 Notes and in certain instances
the liquidation of vehicles in the U.S. car rental fleet. As of December 31, 2009, $1,186.7 million in borrowings were outstanding under the Series 2009-2 Notes, net
of a $13.3 million discount, with an average interest rate of 4.9%.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

International Fleet Debt

In connection with the Acquisition, Hertz International, Ltd., or "HIL," a Delaware corporation organized as a foreign subsidiary holding
company and a direct subsidiary of Hertz, and certain of its subsidiaries (all of which are organized outside North America), together with certain bankruptcy-remote special purpose entities (whether
organized as HIL's subsidiaries or as non-affiliated "orphan" companies), or "SPEs," entered into revolving bridge loan
facilities providing commitments to lend, in various currencies an aggregate amount equivalent to approximately $1,565.7 million (calculated as of December 31, 2009), subject to
borrowing bases comprised of rental vehicles and related assets of certain of HIL's subsidiaries (all of which are organized outside North America) or one or more SPEs, as the case may
be, and rental equipment and related assets of certain of HIL's subsidiaries organized outside North America or one or more SPEs, as the case may be. As of the closing date of the
Acquisition, the foreign currency equivalent of $1,781 million of indebtedness under the International Fleet Debt facilities was issued and outstanding under these facilities. As of
December 31, 2009, the foreign currency equivalent of $705.3 million in borrowings was outstanding under these facilities, net of an $8.7 million discount. These facilities are
referred to collectively as the "International Fleet Debt" facilities.

The
International Fleet Debt facilities consist of four revolving loan tranches (Tranches A1, A2, B and C), each subject to borrowing bases comprising the revenue earning equipment and related assets
of each applicable borrower or the corresponding fleet owned entity. A portion of the Tranche C loan is available for the issuance of letters of credit.

The
obligations of the borrowers under the International Fleet Debt facilities are guaranteed by HIL, and by the other borrowers and certain related entities under the applicable tranche, in each case
subject to certain legal, tax, cost and other structuring considerations. The obligations and the guarantees of the obligations of the Tranche A borrowers under the Tranche A2 loans are
subordinated to the obligations and the guarantees of the obligations of such borrowers under the Tranche A1 loans. Subject to legal, tax, cost and other structuring considerations and to certain
exceptions, the International Fleet Debt facilities are secured by a material part of the assets of each borrower, certain related entities and each guarantor, including pledges of the capital stock
of each borrower and certain related entities. The obligations of the Tranche A borrowers under the Tranche A2 loans and the guarantees thereof are secured on a junior second priority basis by
any assets securing the obligations of the Tranche A borrowers under the Tranche A1 loans and the guarantees thereof. The assets that collateralize the International Fleet Debt facilities will
not be available to satisfy the claims of Hertz's general creditors.

The
International Fleet Debt matures in December 2010. Subject to certain exceptions, the loans are subject to mandatory prepayment and reduction in commitment amounts equal to the net proceeds of
specified types of take-out financing transactions and asset sales.

The
interest rates per annum applicable to loans under the International Fleet Debt facilities are based on fluctuating rates of interest measured by reference to one-month LIBOR, Euro
inter-bank offered rate, or "EURIBOR," or their equivalents for local currencies as appropriate (in the case of the Tranche A1 and A2 loans); relevant local currency base rates (in the
case of Tranche B loans); or one-month EURIBOR (in the case of the Tranche C loans), in each case plus a borrowing margin. In addition, the borrowers under each of Tranche
A1, Tranche A2, Tranche B and Tranche C of the International Fleet Debt facilities will pay fees on the unused commitments of the lenders under the applicable tranche, and other
customary fees and expenses in respect of such facilities, and the Tranche A1 and A2 borrowing margins are subject to increase if HIL does not repay borrowings thereunder within specified periods of
time and upon the occurrence of other specified events.

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The
International Fleet Debt facilities contain a number of covenants (including, without limitation, covenants customary for transactions similar to the International Fleet Debt facilities) that,
among other things, limit or restrict the ability of our subsidiary, HIL, the borrowers and the other subsidiaries of HIL to dispose of assets, incur additional indebtedness, incur guarantee
obligations, create liens, make investments, make acquisitions, engage in mergers, make negative pledges, change the nature of their business or engage in certain transactions with affiliates. In
addition, HIL is restricted from making dividends and other restricted payments (which may include payments of intercompany indebtedness) in an amount greater than €100 million
plus a specified excess cash flow amount calculated by reference to excess cash flow in earlier periods. Subject to certain exceptions, until such time as 50% of the commitments under the
International Fleet Debt facilities as of the closing date of the Acquisition have been replaced by permanent take-out international asset-based facilities, the specified excess cash flow
amount will be zero. Thereafter, this specified excess cash flow amount will be between 50% and 100% of cumulative excess cash flow based on the percentage of the International Fleet Debt facilities
that have been replaced by permanent take-out international asset-based facilities. As a result of the contractual restrictions on HIL's ability to pay dividends to Hertz as
of December 31, 2009, the restricted net assets of our consolidated subsidiaries exceeded 25% of our total consolidated net assets.

In
May 2006, in connection with the forecasted issuance of the permanent take-out international asset-based facilities, HIL purchased two swaptions for
€3.3 million, to protect itself from interest rate increases. These swaptions gave HIL the right, but not the obligation, to enter into three year interest rate swaps, based on
a total notional amount of €600 million at an interest rate of 4.155%. The swaptions were renewed twice in 2007, prior to their scheduled expiration dates of March 15,
2007 and September 5, 2007, at a total cost of €2.7 million and were due to expire on June 5, 2008. On June 4, 2008, these swaptions were sold for a
realized gain of €9.4 million (or $14.8 million). Additionally, on June 4, 2008, HIL purchased two new swaptions for €8.6 million, to
protect itself from interest rate increases associated with the International ABS Fleet Financing Facility, which closed on July 24, 2008. These swaptions were based on an underlying
transaction with a notional amount of €600 million at an interest rate of 4.25%. On October 10, 2008, the outstanding swaptions were terminated and Hertz received a
€1.9 million payment from counterparties. See Note 12Financial Instruments.

On
July 24, 2008, HIL, certain of its subsidiaries (all of which are organized outside the United States), Hertz Europe Limited, as Coordinator, BNP Paribas and The Royal Bank of
Scotland plc, as Mandated Lead Arrangers, Calyon, as Co-Arranger, BNP Paribas, The Royal Bank of Scotland plc, and Calyon, as Joint Bookrunners, BNP Paribas, as Facility
Agent, BNP Paribas, as Security Agent, BNP Paribas, as Global Coordinator, and the financial institutions named therein, entered into an amendment agreement, or the "Amendment Agreement," amending the
revolving bridge loan facilities agreement, dated December 21, 2005 and amended as of March 21, 2007 and December 21, 2007 (as further amended by the Amendment Agreement, or the
"SBFA"). The
Amendment Agreement, which became effective on July 24, 2008, was entered into primarily for the purpose of (i) amending certain terms affecting the margins on the revolving bridge loan
facilities established by the SBFA, and (ii) effecting certain technical and administrative changes to the terms of the facilities in connection with the launch of the International ABS Fleet
Financing Facility described below.

For
the year ended December 31, 2008, we recorded $30.0 million related to the write-off of deferred financing costs associated with those countries outside the United States
as to which take-out asset-based facilities have not been entered into.

We
are currently in discussions regarding our refinancing options, and based on these discussions and our ability to access the capital markets we expect to refinance these facilities on or prior to
maturity. However, the availability of financing is subject to a variety of factors not in our control including

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

economic
and market conditions and investor demand, so there is no guarantee that such facilities can be refinanced or that the terms of such financings will be acceptable. In the event financing is
not available or is not available on terms we deem acceptable, we would expect to utilize our corporate liquidity to repay these obligations which could reduce our ability to fund operations and
replace our fleet.

International ABS Fleet Financing Facility

On July 24, 2008, HIL and certain of its subsidiaries entered into an agreement to amend the International Fleet Debt facility. This
agreement, effective on July 24, 2008, reduced the borrowing margins on the Tranche A1 and Tranche A2 bridge loans of certain borrowers under the facility participating in the International ABS
Fleet Financing Facility and provided an August 12, 2008 final maturity date for loans to HIL's Swiss subsidiary borrower. In August, we paid off the loan to HIL's
Swiss subsidiary borrower and closed out the loan.

Also
on July 24, 2008, HA Fleet Pty Ltd, RAC Finance SAS and Stuurgroep Fleet (Netherlands) B.V., special-purpose indirect subsidiaries of HIL, each a "FleetCo," closed on the
International ABS Fleet Financing Facility, initially covering Australia, France and the Netherlands, respectively, or the "Relevant Jurisdictions."

The
funds under the new fleet financing were used to (i) initially repay in whole the FleetCos' portion of indebtedness under the International Fleet Debt facility and the FleetCos' existing
inter-company borrowings related to the acquisition of vehicles and (ii) finance the acquisition of vehicles from time to time in the Relevant Jurisdictions.

The
expected maturity date is in December 2010 (when the FleetCos' obligations to the Issuer are scheduled to come due). The maximum commitment under (i) the Euro-denominated
portion is €562.0 million (the equivalent of $809.1 million as of December 31, 2009) and (ii) the Australian dollar-denominated portion is
A$325 million (the equivalent of $291.9 million as of December 31, 2009). As of December 31, 2009, the foreign currency equivalent of $383.2 million in borrowings
were outstanding under this facility.

We
are currently in discussions regarding our refinancing options, and based on these discussions and our ability to access the capital markets we expect to refinance these facilities on or prior to
maturity. However, the availability of financing is subject to a variety of factors not in our control including economic and market conditions and investor demand, so there is no guarantee that such
facilities can be refinanced or that the terms of such financings will be acceptable. In the event financing is not available or is not available on terms we deem acceptable, we would expect to
utilize our corporate liquidity to repay these obligations which could reduce our ability to fund operations and replace our fleet.

Fleet Financing Facility

On September 29, 2006, Hertz and Puerto Ricancars, Inc., a Puerto Rican corporation and wholly-owned indirect subsidiary of Hertz, or
"PR Cars," entered into a credit agreement to finance the acquisition of Hertz's and/or PR Cars' fleet in Hawaii, Kansas, Puerto Rico and St. Thomas, the U.S. Virgin Islands, dated as of
September 29, 2006, or the "Fleet Financing Facility," with the several banks and other financial institutions from time to time party thereto as lenders, Gelco Corporation d.b.a. GE Fleet
Services, or the "Fleet Financing Agent," as administrative agent, as collateral agent for collateral owned by Hertz and as collateral agent for collateral owned by PR Cars. Affiliates of Merrill
Lynch & Co. are lenders under the Fleet Financing Facility.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The
Fleet Financing Facility provides (subject to availability under a borrowing base) a revolving credit facility of up to $275.0 million to Hertz and PR Cars. In September 2009, Hertz reduced
the
commitments under the Fleet Financing Facility to $165.0 million. As of December 31, 2009, Hertz and PR Cars had $129.2 million (net of a $0.8 million discount) and
$18.0 million, respectively, of borrowings outstanding under this facility. The borrowing base formula is subject to downward adjustment upon the occurrence of certain events and (in certain
other instances) at the permitted discretion of the Fleet Financing Agent.

The
Fleet Financing Facility will mature in December 2011 but Hertz and PR Cars may terminate or reduce the commitments of the lenders thereunder at any time. The Fleet Financing Facility is subject
to mandatory prepayment in the amount by which outstanding extensions of credit to Hertz or PR Cars exceed the lesser of the Hertz or PR Cars borrowing base, as applicable, and the commitments then in
effect.

The
obligations of each of the borrowers under the Fleet Financing Facility are guaranteed by each of Hertz's direct and indirect domestic subsidiaries (other than subsidiaries whose only material
assets consist of securities and debt of foreign subsidiaries and related assets, subsidiaries involved in the ABS Program or other similar special purpose financings, subsidiaries with minority
ownership positions, certain subsidiaries of foreign subsidiaries and certain immaterial subsidiaries). In addition, the obligations of PR Cars are guaranteed by Hertz. The obligations of Hertz under
the Fleet Financing Facility and the other loan documents, including, without limitation, its guarantee of PR Cars' obligations under the Fleet Financing Facility, are secured by security interests in
Hertz's rental car fleet in Hawaii and by certain assets related to Hertz's rental car fleet in Hawaii and Kansas, including, without limitation, manufacturer repurchase program agreements. PR Cars'
obligations under the Fleet Financing Facility and the other loan documents are secured by security interests in PR Cars' rental car fleet in Puerto Rico and St. Thomas, the U.S. Virgin Islands
and by certain assets related thereto.

At
the applicable borrower's election, the interest rates per annum applicable to the loans under the Fleet Financing Facility will be based on a fluctuating rate of interest measured by reference to
either (1) LIBOR plus a borrowing margin of 125 basis points or (2) an alternate base rate of the prime rate plus a borrowing margin of 25 basis points.

The
Fleet Financing Facility contains a number of covenants that, among other things, limit or restrict the ability of the borrowers and their subsidiaries to create liens, dispose of assets, engage
in mergers, enter into agreements which restrict liens on the Fleet Financing Facility collateral or Hertz's rental car fleet in Kansas or change the nature of their business.

Brazilian Fleet Financing Facility

On April 4, 2007, our Brazilian subsidiary, Car Rental Systems Do Brasil Locacao De Veiculos Ltda., or "Hertz Brazil," entered into an
agreement amending and restating its
credit facility to, among other things, increase the facility to R$130 million (the equivalent of $74.7 million as of December 31, 2009), consisting of an R$70 million (or
$40.2 million) term loan facility and an R$60 million (or $34.5 million) revolving credit facility. The borrowing margin was reduced from 300 basis points over CDI (Brazil's
interbank deposit rate) to 225 basis points over CDI. The amendment also increased the borrowing base advance rate from 80% to 85% of the value of the fleet. The credit facility is secured by Hertz
Brazil's fleet of vehicles and backed by a $63.5 million Hertz guarantee. That guarantee is secured equally and ratably with borrowings under the Senior Term Facility. This facility will mature
in December 2010. As of December 31, 2009, the foreign currency equivalent of $69.3 million in borrowings were outstanding under this facility.

113

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Canadian Fleet Financing Facility

On May 30, 2007, our indirect subsidiary, Hertz Canada Limited, and certain of its subsidiaries, entered into a Note Purchase Agreement with
CARE Trust, a third-party special purpose commercial paper conduit administered by Bank of Montreal, or "CARE Trust," which acts as conduit for the asset-backed borrowing facility, and certain related
agreements and transactions, in order to establish an asset-backed borrowing facility to provide financing for our Canadian rental car fleet (the "Canadian Fleet Financing Facility"). The new facility
refinanced the Canadian portion of the International Fleet Debt facilities. The maximum amount which may be borrowed under the new facility was CAD$400 million (or $381.3 million). This
facility had an original maturity of May 2012.

In
June 2009, subsidiaries of Hertz entered into a second omnibus amendment to our Canadian Fleet Financing Facility, reducing the facility limit from CAD$400 million (or $381.3 million,
calculated using exchange rates in effect on December 31, 2009) to CAD$225 million (or $214.5 million), changing the maturity date from May 2012 to May 2011 and adding an increase
in the commitment fee. Also, among other things, certain covenants pertaining to fleet composition were eliminated and certain limitations on the number of vehicles supplied by a single manufacturer
which may be included in the borrowing base calculation were added. As of December 31, 2009, the foreign currency equivalent of $55.6 million in borrowings were outstanding under this
facility.

Belgian Fleet Financing Facility

On June 21, 2007, our Belgian subsidiary, Hertz Belgium BVBA, entered into a secured revolving credit facility with varying facility limits of
up to €27.4 million (or $39.4 million) maturing in December 2010. The new facility refinanced the Belgian portion of the International Fleet Debt facilities. This
facility is guaranteed by HIL and the fleet assets used in the Belgian operations are pledged as collateral for this debt. Interest is charged at a spread over the EURIBOR. This facility contains a
number of covenants typical for this type of facility, including restrictions on additional indebtedness, creation of liens, engaging in mergers and change of business. As of December 31, 2009,
the foreign currency equivalent of $33.7 million in borrowings were outstanding under this facility.

Capitalized Leases

Capitalized Leases includes capitalized lease financings outstanding in the United Kingdom (the "U.K. Leveraged Financing"), Australia and
Netherlands. The U.K. Leveraged Financing which is the largest portion of the Capitalized Leases consists of an agreement for a sale and leaseback facility entered into with a financial institution in
the United Kingdom, or the "U.K.," by our subsidiary in the U.K., Hertz (U.K.) Limited on December 21, 2007, under which we may sell and lease back fleet up to the value of
£165.0 million (or $267.5 million). The amount available under this facility increases over the term of the facility. The facility is scheduled to mature in February 2013.
This facility refinanced the U.K. portion of the International Fleet Debt facilities. This facility contains covenants typical for this type of facility including restriction on engaging in mergers
and change of business, and includes requirements to meet, on a quarterly basis, certain ratios measuring utilization, interest coverage and net worth. The Australian and Netherlands subsidiaries
conducting the car rental business may, at their option, continue to engage in capital lease financings relating to revenue earning equipment outside the International Fleet Debt facilities. As of
December 31, 2009, Capitalized Leases have maturities ranging from January 2010 to March 2012. As of December 31, 2009, the foreign currency equivalent of $222.4 million in
capital leases were outstanding.

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Covenants

Certain of our debt instruments and credit facilities contain a number of covenants that, among other things, limit or restrict the ability of the
borrowers and the guarantors to dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay other indebtedness, make dividends and other restricted payments, create liens,
make investments, make acquisitions, engage in mergers, change the nature of their business, make capital expenditures, or engage in certain transactions with affiliates. Some of these agreements also
require the maintenance of certain financial covenants. As of December 31, 2009, we were in compliance with all of these financial covenants.

As
of December 31, 2009, we had an aggregate principal amount outstanding of $1,358.6 million pursuant to our Senior Term Facility and no amounts outstanding in our Senior ABL Facility.
Under our Senior Credit Facilities, we are required to maintain a specified minimum level of borrowing capacity under our Senior ABL Facility, if we fail to meet these requirements, we will then be
subject to financial covenants under that facility, including covenants that will obligate us to maintain a specified debt to Corporate EBITDA (defined below) leverage ratio and a specified Corporate
EBITDA to fixed charges coverage ratio. The financial covenants in our Senior Term Facility include obligations to maintain a specified debt to Corporate EBITDA leverage ratio and a specified
Corporate EBITDA to interest expense coverage ratio for specified periods. As of December 31, 2009, Hertz was required under the Senior Term Facility to have a consolidated leverage ratio of
not more than 5.00:1 and a consolidated interest expense coverage ratio of not less than 2.25:1. In addition, under our Senior ABL Facility, if there was less than $200.0 million of available
borrowing capacity under that facility as of December 31, 2009, Hertz was required to have a consolidated leverage ratio of not more than 5.00:1 and a consolidated fixed charge coverage ratio
of not less than 1:1 for the quarter then ended. Under the Senior Term Facility, as of December 31, 2009, we had a consolidated leverage ratio of 3.85:1 and a consolidated interest expense
coverage ratio of 3.16:1. Since we had maintained sufficient borrowing capacity under our Senior ABL Facility as of December 31, 2009, and expect to maintain such capacity in the future, the
consolidated fixed charge coverage ratio was not deemed relevant for presentation. "EBITDA" means consolidated net income before net interest expense, consolidated income taxes and consolidated
depreciation and amortization and "Corporate EBITDA" means "EBITDA" as that term is defined under Hertz's senior credit facilities, which is generally consolidated net income before net interest
expense (other than interest expense relating to certain car rental fleet financing), consolidated income taxes, consolidated depreciation (other than depreciation related to the car rental fleet) and
amortization and before certain other items, in each case as more fully described in the agreements governing Hertz's senior credit facilities.

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Credit Facilities

As of December 31, 2009, the following credit facilities were available for the use of Hertz and its subsidiaries:

Remaining
Capacity

Availability
Under
Borrowing
Base
LimitationCorporate DebtSenior Term Facility

$


$
Senior ABL Facility


1,654.4


925.0Total Corporate Debt


1,654.4


925.0Fleet DebtU.S. Fleet Debt


2,138.1


88.7International Fleet Debt


851.8


110.0International ABS Fleet Financing Facility


658.7


110.4Fleet Financing Facility


17.0


17.0Brazilian Fleet Financing Facility


6.5


Canadian Fleet Financing Facility


158.8


45.1Belgian Fleet Financing Facility





Capitalized Leases


101.5


Total Fleet Debt


3,932.4


371.2Total

$
5,586.8

$
1,296.2


As of December 31, 2009, the Senior Term Facility had approximately $0.6 million available under the letter of credit facility and the Senior ABL
Facility had $114.6 million available under the letter of credit facility sublimit.

Our
liquidity as of December 31, 2009 was $5.8 billion, which consisted of $1.0 billion of cash, $0.9 billion of unused commitments under our Senior ABL Facility and
$3.9 billion of unused commitments under our Fleet Financing Facilities. Taking into consideration the borrowing base limitations in our Senior ABL Facility and in our Fleet Debt, the amount
that we had available for immediate use as of December 31, 2009 under our Senior ABL Facility was $0.9 billion and we had $0.4 billion of over-enhancement that was
available under our Fleet Debt. Accordingly, as of December 31, 2009 we had $2.3 billion ($1.0 billion in cash, $0.9 billion available under our Senior ABL Facility and
$0.4 billion available under our various Fleet Debt facilities) in liquidity that was available for our immediate use. Future availability of borrowings under these facilities will depend on
borrowing base requirements and other factors, many of which are outside our control.

Also,
substantially all of our revenue earning equipment and certain related assets are owned by special purpose entities, or are subject to liens in favor of our lenders under our various credit
facilities. Substantially all our other assets in the United States are also subject to liens in favor of our lenders under our various credit facilities. None of such assets will be available to
satisfy the claims of our general creditors.

As
of December 31, 2009 and 2008, accrued interest was $118.9 million and $131.4 million, respectively, which is reflected in our consolidated balance sheet in "Other accrued
liabilities."

116

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 4Employee Retirement Benefits

Qualified U.S. employees, after completion of specified periods of service, are eligible to participate in The Hertz Corporation Account Balance
Defined Benefit Pension Plan, or the "Hertz Retirement Plan," a cash balance plan. Under this qualified Hertz Retirement Plan, we pay the entire cost and employees are not required to contribute.

Most
of our international subsidiaries have defined benefit retirement plans or participate in various insured or multiemployer plans. In certain countries, when the subsidiaries make the required
funding payments, they have no further obligations under such plans. We participate in various multiemployer pension plans administered by labor unions representing some of our employees. We make
periodic contributions to these plans to allow them to meet their pension benefit obligations to their participants. Contributions to U.S. multiemployer plans were $6.3 million,
$7.3 million and $7.5 million for years ended December 31, 2009, 2008 and 2007, respectively.

Company
plans are generally funded, except for certain nonqualified U.S. defined benefit plans and in Germany, where unfunded liabilities are recorded.

We
sponsor defined contribution plans for certain eligible U.S. and non-U.S. employees. We match contributions of participating employees on the basis specified in the plans.

We
also sponsor postretirement health care and life insurance benefits for a limited number of employees with hire dates prior to January 1, 1990. The postretirement health care plan is
contributory with participants' contributions adjusted annually. An unfunded liability is recorded. We also have a key officer postretirement car benefit plan that provides the use of a vehicle for
retired Senior Vice Presidents and above who have a minimum of 20 years of service and who retired at age 58 or above.

We
use a December 31 measurement date for all our plans.

117

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables set forth the funded status and the net periodic pension cost of the Hertz Retirement Plan, other postretirement benefit plans (including health care and life insurance plans
covering domestic ("U.S.") employees and the retirement plans for international operations ("Non-U.S."), together with amounts included in our consolidated balance sheet and statement of
operations (in millions of dollars):

Pension BenefitsPostretirement
Benefits (U.S.)U.S.

Non-U.S.2009

2008

2009

2008

2009

2008Change in Benefit ObligationBenefit obligation at January 1

$
438.8

$
451.2

$
163.5

$
199.7

$
12.9

$
13.2Service cost


22.0


23.1


5.6


8.1


0.1


0.1Interest cost


27.9


27.4


9.5


10.2


0.8


0.8Employee contributions








1.1


1.8


0.5


0.3Plan amendments

















Plan curtailments





(9.3
)

(0.3
)

(0.6
)




0.7Plan settlements


(11.0
)

(24.4
)

(1.6
)

(0.7
)




Special termination benefits





2.1











Benefits paid


(36.4
)

(21.8
)

(4.7
)

(3.4
)

(1.3
)

(1.1
)Foreign exchange translation








15.5


(49.0
)




Actuarial loss (gain)


63.4


(9.5
)

2.7


(2.4
)

0.7


(1.1
)Other








(0.3
)

(0.2
)




Benefit obligation at December 31

$
504.7

$
438.8

$
191.0

$
163.5

$
13.7

$
12.9Change in Plan AssetsFair value of plan assets at January 1

$
237.0

$
329.7

$
103.3

$
162.6

$


$
Actual return on plan assets


39.3


(73.7
)

23.1


(27.5
)




Company contributions


55.3


27.2


6.7


8.6


0.7


0.8Employee contributions








1.1


1.8


0.5


0.3Plan settlements


(11.0
)

(24.4
)

(1.6
)

(0.7
)




Benefits paid


(36.4
)

(21.8
)

(4.7
)

(3.4
)

(1.2
)

(1.1
)Foreign exchange translation








11.6


(37.9
)




Other








(0.3
)

(0.2
)




Fair value of plan assets at December 31

$
284.2

$
237.0

$
139.2

$
103.3

$


$
Funded Status of the PlanPlan assets less than benefit obligation

$
(220.5
)
$
(201.8
)
$
(51.8
)
$
(60.2
)
$
(13.7
)
$
(12.9
)


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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



Pension BenefitsPostretirement
Benefits (U.S.)U.S.

Non-U.S.2009

2008

2009

2008

2009

2008Amounts recognized in balance sheet:Liabilities

$
(220.5
)
$
(201.8
)
$
(51.8
)
$
(60.2
)
$
(13.7
)
$
(12.9
)Net obligation recognized in the balance sheet

$
(220.5
)
$
(201.8
)
$
(51.8
)
$
(60.2
)
$
(13.7
)
$
(12.9
)Prior service cost

$
(0.1
)
$
(0.1
)
$


$


$


$
Net gain (loss)


(120.7
)

(75.7
)

4.6


(6.5
)

3.6


4.6Accumulated other comprehensive income (loss)


(120.8
)

(75.8
)

4.6


(6.5
)

3.6


4.6Unfunded accrued pension or postretirement benefit


(99.7
)

(126.0
)

(56.4
)

(53.7
)

(17.3
)

(17.5
)Net obligation recognized in the balance sheet

$
(220.5
)
$
(201.8
)
$
(51.8
)
$
(60.2
)
$
(13.7
)
$
(12.9
)Total recognized in other comprehensive income (loss)

$
(45.0
)
$
(74.4
)
$
11.9

$
(36.0
)
$
1.0

$
2.6Total recognized in net periodic benefit cost and other comprehensive loss (income)

$
74.0

$
107.6

$
(5.0
)
$
41.7

$
1.5

$
0.5Estimated amounts that will be amortized from accumulated other comprehensive (income) loss over the next fiscal year:Net gain (loss)

$
(5.6
)
$
(0.4
)
$
0.4

$
0.3

$
0.3

$
0.4Accumulated Benefit Obligation at December 31

$
449.4

$
382.8

$
183.7

$
151.6


N/A


N/AWeighted-average assumptions as of December 31Discount rate


5.42
%

6.39
%

5.78
%

5.59
%

5.40
%

6.20
%Expected return on assets


8.50
%

8.25
%

7.45
%

6.79
%

N/A


N/AAverage rate of increase in compensation


4.4
%

4.3
%

3.7
%

3.9
%

N/A


N/AInitial health care cost trend rate














8.65
%

9.0
%Ultimate health care cost trend rate














4.5
%

5.0
%Number of years to ultimate trend rate














20


10


The discount rate used to determine the December 31, 2009 benefit obligations for U.S. pension plans is based on the rate from the Citigroup Pension
Discount Curve that is appropriate for the duration of our plan liabilities. For our plans outside the U.S., the discount rate reflects the market rates for high-quality corporate bonds
currently available. The discount rate in a country was determined based on a yield curve constructed from high quality corporate bonds in that country. The rate selected from the yield curve has a
duration that matches our plan.

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The
expected return on plan assets for each funded plan is based on expected future investment returns considering the target investment mix of plan assets.

Pension BenefitsU.S.

Non-U.S.Years ended December 31,

Years ended December 31,2009

2008

2007

2009

2008

2007Components of Net Periodic Benefit Cost:Service cost

$
22.0

$
23.1

$
27.6

$
5.6

$
8.1

$
10.9Interest cost


27.9


27.4


26.4


9.5


10.2


10.3Expected return on plan assets


(22.7
)

(23.5
)

(25.7
)

(7.6
)

(11.4
)

(10.9
)Amortization:Losses and other


0.4


0.4


1.0


(0.4
)

(0.7
)

Curtailment loss








(5.1
)

(0.3
)

(0.7
)

(0.1
)Settlement loss (gain)


1.4


3.7


3.5


0.1


0.1


(0.3
)Special termination cost





2.1


4.5








Net pension expense

$
29.0

$
33.2

$
32.2

$
6.9

$
5.6

$
9.9Weighted-average discount rate for expense (January 1)


6.39
%

6.30
%

5.70
%

5.59
%

5.51
%

4.81
%Weighted-average assumed long-term rate of return on assets (January 1)


8.25
%

8.50
%

8.75
%

6.79
%

7.22
%

7.22
%


The pension mark-to-market adjustment balance included in "Accumulated other comprehensive loss" at December 31, 2009 and 2008
was $66.5 million and $49.4 million, respectively.

Postretirement Benefits
(U.S.)Years ended December 31,2009

2008

2007Components of Net Periodic Benefit Cost:Service cost

$
0.1

$
0.1

$
0.3Interest cost


0.7


0.7


0.8Amortization:Losses and other


(0.3
)

(2.9
)

(0.6
)Special termination benefit cost








0.2Net postretirement expense

$
0.5

$
(2.1
)
$
0.7Weighted-average discount rate for expense


6.2
%

6.3
%

5.7
%Initial health care cost trend rate


9.0
%

9.5
%

9.5
%Ultimate health care cost trend rate


5.0
%

5.0
%

5.0
%Number of years to ultimate trend rate


9


8


7


120

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Changing the assumed health care cost trend rates by one percentage point is estimated to have the following effects (in millions of dollars):

One Percentage PointIncrease

DecreaseEffect on total of service and interest cost components

$
0.0

$
0.0Effect on postretirement benefit obligation

$
0.4

$
(0.4
)


The provisions charged to income for the years ended December 31, 2009, 2008 and 2007 for all other pension plans were approximately (in millions of
dollars) $7.3, $8.0 and $7.8, respectively.

The
provisions charged to income for the years ended December 31, 2009, 2008 and 2007 for the defined contribution plans were approximately (in millions of dollars) $6.9, $16.3 and $15.6,
respectively.

Plan Assets

We have a long-term investment outlook for the assets held in our Company sponsored plans, which is consistent with the
long-term nature of each plan's respective liabilities. We have two major plans which reside in the U.S. and the U.K.

The
U.S. Plan, or the "Plan," currently has a target asset allocation of 70% equity and 30% fixed income. The equity portion of the Plan is invested in one passively managed S&P 500 index fund,
one passively managed U.S. small/midcap fund and one actively managed international portfolio. The fixed income portion of the Plan is actively managed by a professional investment manager and is
benchmarked to the Barclays Long Govt/Credit Index. The Plan assumes an 8.5% rate of return on assets, which represents the expected long-term annual weighted-average return for the Plan
in total.

The
U.K. Plan currently invests in a professionally managed Balanced Consensus Index Fund, which has the investment objective of achieving a total return relatively equal to its benchmark. The
benchmark is based upon the average asset weightings of a broad universe of U.K. pension funds invested in pooled investment vehicles and each of their relevant indices. The asset allocation as of
December 31, 2009, was 83% equity, 8% fixed income and 9% cash. The U.K. Plan currently assumes a rate of return on assets of 7.5%, which represents the expected long-term annual
weighted-average return.

The
FASB establishes a three-level valuation hierarchy based upon observable and non-observable inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobserved inputs (level 3 measurements). Observable inputs reflect market data obtained
from independent sources, while unobservable inputs reflect the Plan's market assumptions. The three levels of the fair value hierarchy are described as follows:



121

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



The
fair value measurements of our U.S. pension plan assets are based upon significant observable (Level 2) inputs as follows (in millions of dollars):

Asset Category

Year ended
December 31, 2009Cash and cash equivalents

$
4.6Equity Securities:U.S. Large Cap


80.2U.S. Mid Cap


23.8U.S. Small Cap


18.4International Large Cap


63.4Fixed Income Securities:U.S. Treasuries


44.6Corporate Bonds


45.4Mortgage-backed Bonds


Municipal Bonds


1.1Real Estate (REITs)


2.7Total fair value of pension plan assets

$
284.2


The fair value measurements of our U.K. pension plan assets are based upon significant observable (Level 2) inputs as follows (in millions of dollars):

Asset Category

Year ended
December 31, 2009Cash and cash equivalents

$
8.4U.K. Equities


48.7Overseas Equities


60.6U.K. Conventional Gilts


5.4Overseas Bonds


4.9Corporate Bonds


3.5Index-Linked Gilts-Stocks


0.8Total fair value of pension plan assets

$
132.3


Contributions

Our policy for funded plans is to contribute annually, at a minimum, amounts required by applicable laws, regulations and union agreements. From time
to time we make contributions beyond those legally required. In 2009, we made discretionary cash contributions to our U.S. qualified pension plan of $42.6 million. In 2008, we made a
discretionary cash contribution to our U.S. qualified pension plan of $1.5 million. Based upon the significant decline in asset values in 2008, which were in line with the overall

122

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

market
declines, it is likely we will have to make cash contributions in 2010 and future years. We expect to contribute between $25 million and $95 million to our U.S. pension plan
during 2010. The level of 2010 and future contributions will vary, and is dependent on a number of factors including investment returns, interest rate fluctuations, plan demographics, funding
regulations and the results of the final actuarial valuation.

Estimated Future Benefit Payments

The following table presents estimated future benefit payments (in millions of dollars):

Pension Benefits

Postretirement
Benefits (U.S.)2010

$
30.7

$
0.92011


29.6


0.92012


34.3


0.92013


37.4


1.02014


36.4


1.02015-2018


230.7


5.4


Note 5Stock-Based Compensation

Plans

On February 28, 2008, the Board of Directors of Hertz and Hertz Holdings jointly adopted the Hertz Global Holdings, Inc. 2008 Omnibus
Incentive Plan, or the "Omnibus Plan", which was approved by the stockholders of Hertz Holdings at the annual meeting of stockholders held on May 15, 2008. A maximum of 17.7 million
shares are reserved for issuance under the Omnibus Plan. The Omnibus Plan provides for grants of both equity and cash awards, including non-qualified stock options, incentive stock
options, stock appreciation rights, performance awards (shares and units), restricted stock, restricted stock units and deferred stock units to key executives, employees and non-management
directors. We also granted awards under the Hertz Global Holdings, Inc. Stock Incentive Plan, or the "Stock Incentive Plan," and the Hertz Global Holdings, Inc. Director Stock Incentive
Plan, or the "Director Plan", or the "Prior Plans."

The
Omnibus Plan provides that no further awards will be granted pursuant to the Prior Plans. However, awards that had been previously granted pursuant to the Prior Plans will continue to be subject
to and governed by the terms of the Prior Plans. As of December 31, 2009, there were 13.0 million shares of Hertz Holdings' common stock underlying awards outstanding under the Prior
Plans. In addition, as of December 31, 2009, there were 8.1 million shares of the common stock of Hertz Holdings underlying awards outstanding under the Omnibus Plan.

In
addition to the 21.1 million shares underlying outstanding awards as of December 31, 2009, we had 8.9 million shares of Hertz Holdings' common stock available for issuance
under the Omnibus Plan. The shares of common stock to be delivered under the Omnibus Plan may consist, in whole or in part, of common stock held in treasury or authorized but unissued shares of common
stock, not reserved for any other purpose.

Shares
subject to any award granted under the Omnibus Plan that for any reason are canceled, terminated, forfeited, settled in cash or otherwise settled without the issuance of common stock after the
effective date of the Omnibus Plan will generally be available for future grants under the Omnibus Plan.

123

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock Options and Stock Appreciation Rights

All stock options and stock appreciation rights granted under the Omnibus Plan will have a per-share exercise price of not less than the
fair market value of one share of Hertz Holdings common stock on the grant date. Stock options and stock appreciation rights will vest based on a minimum period of service or the occurrence of events
(such as a change in control, as defined in the Omnibus Plan) specified by the compensation committee of the Board of Directors of Hertz Holdings. No stock options or stock appreciation rights will be
exercisable after ten years from the grant date. The compensation committee of the Board of Directors of Hertz Holdings may at its discretion accelerate the vesting of an option or stock appreciation
right at any time. In addition, vesting of options and stock appreciation rights will be accelerated if Hertz Holdings experiences a change in control (as defined in the Omnibus Plan) unless options
or stock appreciation rights with substantially equivalent terms and economic value are substituted for existing options and stock appreciation rights in place of accelerated vesting. Vesting of
options and stock appreciation rights will also be accelerated in the event of an employee's death or disability (as defined in the Omnibus Plan). Upon a termination for cause (as defined in the
Omnibus Plan), all options and stock appreciation rights held by the employee are immediately cancelled. Following a termination without cause, vested options and stock appreciation rights will
generally remain exercisable through the earliest of the expiration of their term or 30 days following termination of employment (or one year in the case of death or disability).

In
February 2009, Hertz Holdings granted options to acquire 52,500 shares of its common stock at an exercise price of $3.24 per share under the Omnibus Plan.

We
have accounted for our employee stock-based compensation awards in accordance with ASC 718, "Compensation-Stock Compensation." The non-cash stock-based compensation expense associated
with the Stock Incentive Plan is pushed down from Hertz Holdings and recorded on the books at the Hertz level. The options are being accounted for as equity-classified awards. We will recognize
compensation cost on a straight-line basis over the vesting period. The value of each option award is estimated on the grant date using a Black-Scholes option valuation model that
incorporates the assumptions noted in the following table. Because the stock of Hertz Holdings became publicly traded in November 2006 and has a short trading history, it is not practicable for us to
estimate the expected volatility of Hertz Holdings' share price, or a peer company share price, because there is not sufficient historical information about past volatility. Therefore, we have 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.

124

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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, as of the grant dates. The
assumed dividend yield is zero. We assume that each year 1% of the options that are outstanding but not vested will be forfeited because of employee attrition.

Assumption

2009 Grants

2008 GrantsExpected volatility


34.9
%

30.8
%Weighted-average volatility


34.9
%

30.8
%Expected dividend yield


0.0
%

0.0
%Expected term (years)


6.25


5.0 - 6.25Risk-free interest rate


2.90
%

2.56 - 3.75
%Forfeiture rate (per year)


1.0
%

1.0
%Weighted-average grant date fair value

$
1.29


$4.42


A summary of option activity under the Stock Incentive Plan and the Omnibus Plan as of December 31, 2009 is presented below.

Options

Shares

Weighted-
Average
Exercise
Price

Weighted-
Average
Remaining
Contractual
Term (years)

Aggregate Intrinsic
Value (In thousands
of dollars)Outstanding at January 1, 2009


16,087,407

$
8.97


7.9

$
3,987Granted


52,500

$
3.24Exercised


(1,034,204
)
$
4.65Forfeited or Expired


(995,399
)
$
7.56Outstanding at December 31, 2009


14,110,304

$
9.38


7.0


56,221Exercisable at December 31, 2009


7,430,924

$
9.17


6.8

$
32,166


The aggregate intrinsic value of options exercised during the years ended December 31, 2009 and 2008 was $4.2 million and $6.8 million,
respectively. A total of 1,034,204 options were exercised in the year ended December 31, 2009 and Hertz Holdings received $5.3 million from the issuance of shares related to these
exercises.

A
summary of non-vested options as of December 31, 2009, and changes during the year, is presented below.

Non-vested
Shares

Weighted-
Average
Exercise Price

Weighted-
Average Grant-
Date Fair
ValueNon-vested as of January 1, 2009


11,035,751

$
9.33

$
6.24Granted


52,500

$
3.24

$
1.29Vested


(3,573,517
)
$
9.36

$
6.47Forfeited or Expired


(835,354
)
$
7.56

$
5.86Non-vested as of December 31, 2009


6,679,380

$
9.62

$
6.16


125

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Performance Stock, Performance Stock Units, Restricted Stock and Restricted Stock Units

Performance stock, performance stock units, or "PSUs," and performance units granted under the Omnibus Plan will vest based on the achievement of
pre-determined performance goals over performance periods determined by the compensation committee of the Board of Directors of Hertz Holdings. In the event of an employee's death or
disability, a pro rata portion of the employee's performance stock, performance stock units and performance units will vest to the extent performance goals are achieved at the end of the performance
period. Upon a termination of employment or for any other reason, all outstanding performance stock, performance stock units and performance units held by the employee are immediately canceled.

Restricted
stock and restricted stock units, or "RSUs," granted under the Omnibus Plan will vest based on a minimum period of service or the occurrence of events (such as a change in control, as
defined in the Omnibus Plan) specified by the compensation committee of the Board of Directors of Hertz Holdings. Upon a termination of employment for any reason, any unvested restricted stock or
restricted stock units of the employee will be canceled.

Each
deferred stock unit granted under the Omnibus Plan represents the right to receive one share of Hertz Holdings' common stock on a specified future date. Generally, upon a participant's
termination of employment other than for cause, Hertz Holdings will issue one share of its common stock to the participant for each deferred stock unit the participant then holds.

A
summary of RSU and PSU activity under the Omnibus Plan as of December 31, 2009 is presented below.

Options

Shares

Weighted-
Average
Fair Value

Aggregate Fair Value
(In thousands of
dollars)Outstanding at January 1, 2009


1,285,000

$
4.98

$
6,515Granted


6,465,239

$
3.42Vested/Exercised


(635,000
)
$
4.98Forfeited or Expired


(138,000
)
$
4.83Outstanding at December 31, 2009


6,977,239

$
3.53

$
83,169


The total fair value of RSUs and PSUs that vested during the year is $6.2 million.

In
2009, we granted RSUs to key executives and employees, and PSUs as presented in the table below. RSUs granted in 2009 generally have the terms set forth in the Omnibus Plan, however in the event of
an employee's death or disability (as defined in the Omnibus Plan), a pro rata portion of the RSUs that

126

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

would
have vested on the next anniversary of the grant date will vest and the remainder of the RSUs will be canceled.

Grant
Date

Fair
Value

Number of
Units2/26/09

$
3.24


2,439,3632/26/09

$
3.24


2,095,3763/13/09

$
2.75


1,400,0005/1/09

$
6.45


495,5005/11/09

$
8.38


10,0007/31/09

$
9.44


10,0008/14/09

$
11.02


15,0006,465,239


Compensation expense for RSUs and PSUs is based on the grant date fair value, and is recognized ratably over the vesting period. For grants in 2008, the vesting
period is two years (50% in the first year and 50% in the second year). For grants in 2009, the vesting period is three years (25% in the first year, 25% in the second year and 50% in the third year).
The PSUs have an additional vesting condition. The restriction period applicable to the PSUs will lapse on the first anniversary of the grant date if the consolidated leverage ratio covenants within
our Senior Credit Facilities have not been violated during that twelve month period. Assuming the restriction period has lapsed, the grants will vest pursuant to the vesting schedule. If the
consolidated leverage ratio covenant is violated during the first twelve months, all PSUs will be forfeited.

Impact on Results

A summary of the total compensation expense and associated income tax benefits recognized under our Prior Plans and the Omnibus Plan, including the
cost of stock options, RSUs, and PSUs, is as follows:

Years ended December 31,2009

2008

2007Compensation Expense

$
34.5

$
27.8

$
32.9Income Tax Benefit


(13.4
)

(10.7
)

(12.7
)Total

$
21.1

$
17.1

$
20.2


As of December 31, 2009, there was approximately $51.7 million of total unrecognized compensation cost related to non-vested stock
options, RSUs and PSUs granted by Hertz Holdings under the Prior Plans and the Omnibus Plan, including costs related to modifying the exercise prices of certain option grants in order to preserve the
intrinsic value of the options, consistent with applicable tax law, to reflect special cash dividends of $4.32 per share paid on June 30, 2006 and $1.12 per share paid on November 21,
2006. These remaining costs are expected to be recognized over the remaining 1.3 years, on a weighted average basis, of the requisite service period that began on the grant dates.

Employee Stock Purchase Plan

On February 28, 2008, upon recommendation of the compensation committee, or "Committee," of the Board of Directors of Hertz Holdings adopted
the Hertz Global Holdings, Inc. Employee Stock Purchase

127

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Plan,
or the "ESPP," and the plan was approved by our stockholders on May 15, 2008. The ESPP is intended to be an "employee stock purchase plan" within the meaning of Section 423 of the
Internal Revenue Code.

The
maximum number of shares that may be purchased under the ESPP is 3,000,000 shares of Hertz Holdings' common stock, subject to adjustment in the case of any change in Hertz Holdings' shares,
including by reason of a stock dividend, stock split, share combination, recapitalization, reorganization, merger, consolidation or change in corporate structure. An eligible employee may elect to
participate in the ESPP each quarter (or other period established by the Committee) through a payroll deduction. The maximum and minimum contributions that an eligible employee may make under all of
our qualified employee stock purchase plans will be determined by the Committee, provided that no employee may be permitted to purchase stock with an aggregate fair market value greater than $25,000
per year. At the end of the offering period, the total amount of each employee's payroll deduction will be used to purchase shares of Hertz Holdings' common stock. The purchase price per share will be
not less than 85% of the market price of Hertz Holdings' common stock on the date of purchase; the exact percentage for each offering period will be set in advance by the Committee.

For
the year ended December 31, 2009, we recognized compensation cost of approximately $0.5 million ($0.3 million, net of tax) for the amount of the discount on the stock
purchased by our employees. Approximately 1,800 employees participated in the ESPP as of December 31, 2009.

Note 6Depreciation of Revenue Earning Equipment

Depreciation of revenue earning equipment includes the following (in millions of dollars):

Years ended December 31,2009

2008

2007Depreciation of revenue earning equipment

$
1,786.9

$
2,020.3

$
1,905.9Adjustment of depreciation upon disposal of the equipment


76.5


83.1


21.2Rents paid for vehicles leased


68.0


90.8


76.3Total

$
1,931.4

$
2,194.2

$
2,003.4


The adjustment of depreciation upon disposal of revenue earning equipment for the years ended December 31, 2009, 2008 and 2007 included (in millions of
dollars) net losses of $41.3 and $32.1 and a net gain of $0.6, respectively, on the disposal of industrial and construction equipment used in our equipment rental operations, and net losses of $35.2,
$51.0 and $21.8, respectively, on the disposal of vehicles used in our car rental operations.

Depreciation
rates are reviewed on an ongoing basis based on management's routine review of present and estimated future market conditions and their effect on residual values at the time of
disposal. During 2009, 2008 and 2007, depreciation rates being used to compute the provision for depreciation of revenue earning equipment were adjusted on certain vehicles in our car rental
operations to reflect changes in the estimated residual values to be realized when revenue earning equipment is sold. These depreciation rate changes resulted in net increases of $13.2 million,
$36.6 million and $13.7 million in depreciation expense for the years ended December 31, 2009, 2008 and 2007, respectively. During 2009, 2008 and 2007, depreciation rate changes
in certain of our equipment rental operations resulted in an increase of $6.1 million and net decreases of $3.9 million and $13.1 million in depreciation expense for the years
ended December 31, 2009, 2008 and 2007, respectively.

128

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For
the years ended December 31, 2009, 2008 and 2007, our worldwide car rental operations sold approximately 153,300, 189,300 and 163,700 non-program cars, respectively, a 19.0%
decrease in 2009 versus 2008 primarily due to a lower average fleet size.

Note 7Taxes on Income

The components of income (loss) before income taxes and noncontrolling interest for the periods were as follows (in millions of dollars):

Years ended December 31,2009

2008

2007Domestic

$
(122.6
)
$
(1,167.3
)
$
192.0Foreign


(21.7
)

(216.1
)

196.8Total

$
(144.3
)
$
(1,383.4
)
$
388.8


The total provision (benefit) for taxes on income consists of the following (in millions of dollars):

Years ended December 31,2009

2008

2007Current:Federal

$
3.4

$
(1.5
)
$
10.5Foreign


15.8


36.5


18.3State and local


(1.3
)

3.3


14.0Total current


17.9


38.3


42.8Deferred:Federal


(27.9
)

(193.0
)

67.0Foreign


(15.5
)

(12.7
)

8.4State and local


(23.0
)

(30.3
)

(15.9
)Total deferred


(66.4
)

(236.0
)

59.5Total provision (benefit)

$
(48.5
)
$
(197.7
)
$
102.3


129

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The principal items of the U.S. and foreign net deferred tax liability at December 31, 2009 and 2008 are as follows (in millions of dollars):

2009

2008Deferred Tax Assets:Employee benefit plans

$
88.0

$
101.8Net operating loss carryforwards


1,133.2


451.9Foreign tax credit carryforwards


20.8


20.8Federal, state and foreign tax credit carryforwards


8.2


8.8Accrued and prepaid expenses


246.4


263.5Total Deferred Tax Assets


1,496.6


846.8Less: Valuation Allowance


(167.8
)

(123.2
)Total Net Deferred Tax Assets


1,328.8


723.6Deferred Tax Liabilities:Depreciation on tangible assets


(1,694.5
)

(1,165.8
)Intangible assets


(1,067.0
)

(1,053.8
)Total Deferred Tax Liabilities


(2,761.5
)

(2,219.6
)Net Deferred Tax Liability

$
(1,432.7
)
$
(1,496.0
)


As of December 31, 2009, deferred tax assets of $821.6 million were recorded for unutilized U.S. Federal Net Operating Losses, or "NOL,"
carryforwards of $2,352.8 million. The total Federal NOL carry forwards are $2,363.7 million of which $10.9 million relate to excess tax deductions associated with stock option
plans which have yet to reduce taxes payable. Upon the utilization of these carry forwards, the associated tax benefits of approximately $3.8 million will be recorded to Additional
Paid-in Capital. The Federal NOLs begin to expire in 2025. State NOLs associated with the Federal NOL, exclusive of the effects of the excess tax deductions; have generated a deferred tax
asset of $133.0 million. The state NOLs begin to expire in 2010.

On
January 1, 2009, Bank of America acquired a majority equity interest in Merrill Lynch & Co. For U.S. income tax purposes the transaction, when combined with other unrelated
transactions during the previous 36 months, resulted in a change in control as that term is defined in Section 382 of the Internal Revenue Code. Consequently, utilization of all
pre-2009 U.S. net operating losses is subject to an annual limitation. We have calculated the expected annual base limitation as well as additional limitation resulting from a net
unrealized built in gain as of the acquisition date and other adjustments. Based on the calculations, the limitation is not expected to result in a loss of net operating losses or have a material
adverse impact on taxes.

As
of December 31, 2009, deferred tax assets of $178.0 million were recorded for foreign NOL carryforwards of $754.8 million. A valuation allowance of $123.2 million at
December 31, 2009 was recorded against these deferred tax assets because those assets relate to jurisdictions that have historical losses and the likelihood exists that a portion of the NOL
carryforwards may not be utilized in the future. An additional valuation allowance of $31.1 million at December 31, 2009 was recorded against foreign deferred tax assets related to other
cumulative temporary differences.

The
foreign NOL carryforwards of $754.8 million include $637.2 million which have an indefinite carryforward period and associated deferred tax assets $143.3 million. The
remaining foreign NOLs of

130

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

$117.6 million
are subject to expiration beginning in 2015 and have associated deferred tax assets of $34.7 million.

As
of December 31, 2009, deferred tax assets for U.S. Foreign Tax Credit carryforwards were $20.8 million which relate to credits generated as of December 31, 2007. The
carryforwards will begin to expire in 2015. A valuation allowance of $13.5 million at December 31, 2009 was recorded against a portion of the U.S. foreign tax credit deferred tax assets
in the likelihood that they may not be utilized in the future. A deferred tax asset was also recorded for various state tax credit carryforwards of $3.9 million, which will begin to expire in
2027.

In
determining the valuation allowance, an assessment of positive and negative evidence was performed regarding realization of the net deferred tax assets in accordance with ASC 740-10,
"Accounting for Income Taxes," or "ASC 740-10." This assessment included the evaluation of scheduled reversals of deferred tax liabilities, the availability of carryforwards and estimates
of projected future taxable income. Based on the assessment, as of December 31, 2009, total valuation allowances of $167.8 million were recorded against deferred tax assets. Although
realization is not assured, we have concluded that it is more likely than not the remaining deferred tax assets of $1,328.8 million will be realized and as such no valuation allowance has been
provided on these assets.

The
significant items in the reconciliation of the statutory and effective income tax rates consisted of the following:

Years ended December 31,2009

2008

2007Statutory Federal Tax Rate


35.0
%

35.0
%

35.0
%Foreign tax differential


24.9


(0.5
)

(10.4
)State and local income taxes, net of federal income tax benefit


5.6


0.8


2.0Change in state statutory rates, net of federal income tax benefit


4.2


0.1


(3.6
)Effect of impairment charges





(16.6
)

Federal permanent differences


2.4


0.1


(1.2
)Withholding taxes


(5.7
)

(0.6
)

1.4Uncertain tax positions


(3.2
)

(0.3
)

2.1Increase (decrease) in valuation allowance


(31.0
)

(3.8
)

All other items, net


1.4


0.1


1.0Effective Tax Rate


33.6
%

14.3
%

26.3
%


The increase in the 2009 effective tax rate is primarily due to nonrecurring 2008 impairment losses.

As
of December 31, 2009, our foreign subsidiaries have net undistributed earnings of $228.1 million. Deferred taxes have not been recorded for such earnings because it is management's
current intention to permanently reinvest undistributed earnings and there is no foreseeable need to distribute offshore reserves or earnings as it is not practical to determine such deferred tax
liabilities. If, in the future, undistributed earnings are repatriated to the United States, or it is determined such earnings will be repatriated in the foreseeable future, deferred taxes will be
recorded.

The
provisions of FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxesan Interpretation of FASB Statement No. 109," which was incorporated in ASC
740-10, were adopted on January 1, 2007. Upon adoption, an $18.9 million increase to liabilities for unrecognized tax benefits was recorded. The increase in liabilities was
recorded as of January 1, 2007 as an increase of $3.6 million to "Accumulated Deficit" which is reflected in our consolidated balance sheet and an increase of $15.3 million to
"Goodwill" which is reflected in our consolidated balance sheet.

131

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On the adoption date, total unrecognized tax benefits were $20.3 million. As of December 31, 2009, total unrecognized tax benefits were $25.6 million, all of which, if recognized,
would favorably impact the effective tax rate in future periods.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions of dollars):

2009


2008


2007Balance at January 1

$
21.7

$
35.5

$
20.3Increase (decrease) attributable to tax positions taken during prior periods


1.1


(5.7
)

6.4Increase attributable to tax positions taken during the current year


3.1


5.2


9.5Decrease attributable to settlements with taxing authorities


(0.3
)

(13.3
)

(0.7
)Balance at December 31

$
25.6

$
21.7

$
35.5


We conduct business globally and, as a result, file one or more income tax returns in the U.S. federal jurisdiction and various state and non-U.S.
jurisdictions. In the normal course of business we are subject to examination by taxing authorities throughout the world. The open tax
years for these jurisdictions span from 1998 to 2009. A tax indemnification agreement entered into with Ford on the Closing Date indemnifies Hertz from U.S. federal and unitary state, and certain
combined non-U.S. income tax liabilities for all periods prior to December 21, 2005. We are not currently under audit by the Internal Revenue Service. Several U.S. state and
non-U.S. jurisdictions are under audit.

In
many cases the uncertain tax positions are related to tax years that remain subject to examination by the relevant taxing authorities. It is reasonable that approximately $5.3 million of
unrecognized tax benefits may reverse within the next twelve months due to settlement with the relevant taxing authorities and/or the filing of amended income tax returns.

Net,
after-tax interest and penalties related to the liabilities for unrecognized tax benefits are classified as a component of "(Provision) benefit for taxes on income" in the
consolidated statement of operations. During 2009, approximately $(0.2) million in net, after-tax interest and penalties were recognized. Approximately $5.8 million of net,
after-tax interest and penalties are accrued in the consolidated balance sheet at December 31, 2009. During 2008, approximately $0.6 million was recognized in net,
after-tax interest and penalties. Approximately $6.0 million of net, after-tax interest and penalties was accrued in our consolidated balance sheet at
December 31, 2008. During 2007, approximately $2.2 million was recognized in net, after-tax interest and penalties. Approximately $12.0 million of net,
after-tax interest and penalties was accrued in our consolidated balance sheet at December 31, 2007.

Note 8Lease and Concession Agreements

We have various concession agreements, which provide for payment of rents and a percentage of revenue with a guaranteed minimum, and real estate
leases under which the following amounts were expensed (in millions of dollars):

Years ended December 31,2009

2008

2007Rents

$
133.2

$
144.2

$
130.9Concession fees:Minimum fixed obligations


260.1


251.0


301.5Additional amounts, based on revenues


231.5


268.8


209.6Total

$
624.8

$
664.0

$
642.0


132

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009, minimum obligations under existing agreements referred to above are approximately as follows (in thousands of dollars):

Rents

Concessions2010

$
126.9

$
251.92011


106.7


208.52012


82.1


181.32013


62.2


138.72014


49.4


77.7Years after 2014


179.1


242.3


Many of our concession agreements and real estate leases require us to pay or reimburse operating expenses, such as common area charges and real estate taxes,
to pay concession fees above guaranteed minimums or additional rent based on a percentage of revenues or sales (as defined in those agreements) arising at the relevant premises, or both. Such
obligations are not reflected in the table of minimum future obligations appearing immediately above.

In
addition to the above, we have various leases on revenue earning equipment and office and computer equipment under which the following amounts were expensed (in millions of dollars):

Years ended December 31,2009

2008

2007Revenue earning equipment

$
68.0

$
90.8

$
76.3Office and computer equipment


8.9


10.2


11.3Total

$
76.9

$
101.0

$
87.6


As of December 31, 2009, minimum obligations under existing agreements referred to above that have a maturity of more than one year are as follows (in
millions of dollars): 2010, $25.4; 2011, $6.0; 2012, $2.4; 2013, $0.3; 2014, $0.0; years after 2014, $0.0.

Note 9Segment Information

Our operating segments are aggregated into reportable business segments based primarily upon similar economic characteristics, products, services,
customers, and delivery methods. We have identified two reportable segments: rental of cars and light trucks, or "car rental," and rental of industrial, construction and material handling equipment,
or
"equipment rental." Other reconciling items includes general corporate assets and expenses, certain interest expense (including net interest on corporate debt), as well as other business activities,
such as our third party claim management services.

Adjusted
pre-tax income (loss) is the measure utilized by management in making decisions about allocating resources to segments and measuring their performance. We believe this measure
best reflects the financial results from ongoing operations. Adjusted pre-tax income (loss) is calculated as income (loss) before income taxes and noncontrolling interest plus other
reconciling items, non-cash purchase accounting charges, non-cash debt charges relating to the amortization of deferred debt financing costs and debt discounts and certain
one-time charges and non-operational items. The contribution of our reportable segments for the years ended December 31, 2009, 2008 and 2007 are summarized below (in
millions of dollars).

133

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Years ended December 31,2009

2008

2007RevenuesCar rental

$
5,979.0

$
6,858.2

$
6,920.6Equipment rental


1,110.9


1,658.1


1,755.9Other reconciling items


11.6


8.8


9.1Total

$
7,101.5

$
8,525.1

$
8,685.6Adjusted pre-tax income(a)Car rental

$
465.3

$
289.1

$
605.0Equipment rental

$
76.4

$
272.0

$
373.8Depreciation of revenue earning equipmentCar rental

$
1,614.2

$
1,843.8

$
1,695.4Equipment rental


317.2


350.4


308.0Total

$
1,931.4

$
2,194.2

$
2,003.4Depreciation of property and equipmentCar rental

$
115.9

$
126.0

$
130.8Equipment rental


37.6


40.8


40.4Other reconciling items


6.1


6.0


5.9Total

$
159.6

$
172.8

$
177.1Amortization of other intangible assetsCar rental

$
32.5

$
33.9

$
30.4Equipment rental


32.8


32.4


32.2Other reconciling items


0.7





Total

$
66.0

$
66.3

$
62.6Interest expenseCar rental

$
316.1

$
452.4

$
442.5Equipment rental


53.3


110.8


147.4Other reconciling items


284.3


307.3


327.1Total

$
653.7

$
870.5

$
917.0Revenue earning equipment and property and equipmentCar rentalExpenditures

$
7,533.1

$
9,978.5

$
10,601.1Proceeds from disposals


(5,858.3
)

(8,286.6
)

(9,177.6
)Net expenditures

$
1,674.8

$
1,691.9

$
1,423.5Equipment rentalExpenditures

$
94.4

$
356.7

$
743.9Proceeds from disposals


(190.3
)

(293.1
)

(230.0
)Net expenditures (proceeds)

$
(95.9
)
$
63.6

$
513.9Other reconciling itemsExpenditures

$
0.5

$
9.6

$
2.7Proceeds from disposals








Net expenditures

$
0.5

$
9.6

$
2.7


134

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



December 31,2009

2008Total assets at end of yearCar rental

$
12,356.5

$
12,161.1Equipment rental


2,939.0


3,499.4Other reconciling items


700.9


790.8Total

$
15,996.4

$
16,451.3Revenue earning equipment, net, at end of yearCar rental

$
7,019.3

$
6,501.4Equipment rental


1,832.3


2,190.1Total

$
8,851.6

$
8,691.5Property and equipment, net, at end of yearCar rental

$
877.9

$
902.3Equipment rental


243.6


280.7Other reconciling items


66.6


71.6Total

$
1,188.1

$
1,254.6


We operate in the United States and in international countries. International operations are substantially in Europe. The operations within major geographic
areas are summarized below (in millions of dollars):

Years ended December 31,2009

2008

2007RevenuesUnited States

$
4,675.9

$
5,506.1

$
5,849.9International


2,425.6


3,019.0


2,835.7Total

$
7,101.5

$
8,525.1

$
8,685.6Depreciation of revenue earning equipmentUnited States

$
1,334.0

$
1,509.3

$
1,460.8International


597.4


684.9


542.6Total

$
1,931.4

$
2,194.2

$
2,003.4Depreciation of property and equipmentUnited States

$
122.0

$
125.8

$
130.8International


37.6


47.0


46.3Total

$
159.6

$
172.8

$
177.1Amortization of other intangible assetsUnited States

$
45.8

$
43.3

$
43.1International


20.2


23.0


19.5Total

$
66.0

$
66.3

$
62.6Interest expenseUnited States

$
541.9

$
648.4

$
739.7International


111.8


222.1


177.3Total

$
653.7

$
870.5

$
917.0Revenue earning equipment and property and equipmentUnited StatesExpenditures

$
5,217.8

$
5,904.8

$
7,322.2Proceeds from disposals


(3,885.0
)

(4,815.1
)

(6,086.7
)Net expenditures

$
1,332.8

$
1,089.7

$
1,235.5InternationalExpenditures

$
2,410.2

$
4,440.0

$
4,025.5Proceeds from disposals


(2,163.6
)

(3,764.6
)

(3,320.9
)Net expenditures

$
246.6

$
675.4

$
704.6


135

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



December 31,2009

2008Total assets at end of yearUnited States

$
10,663.7

$
10,921.5International


5,332.7


5,529.8Total

$
15,996.4

$
16,451.3Revenue earning equipment, net, at end of yearUnited States

$
6,432.3

$
6,132.8International


2,419.3


2,558.7Total

$
8,851.6

$
8,691.5Property and equipment, net, at end of yearUnited States

$
953.7

$
1,010.5International


234.4


244.1Total

$
1,188.1

$
1,254.6


---

Years ended December 31,2009

2008

2007Adjusted pre-tax incomeCar rental

$
465.3

$
289.1

$
605.0Equipment rental


76.4


272.0


373.8Total reportable segments


541.7


561.1


978.8Adjustments:Other reconciling items(1)


(328.2
)

(324.5
)

(318.1
)Purchase accounting(2)


(90.3
)

(101.0
)

(95.2
)Non-cash debt charges(3)


(159.8
)

(100.2
)

(105.9
)Restructuring charges


(106.8
)

(216.2
)

(96.4
)Restructuring related charges(4)


(46.5
)

(26.3
)

Impairment charges(5)





(1,168.9
)

Management transition costs


(1.0
)

(5.2
)

(15.0
)Derivative gains (losses)(6)


2.4


(2.2
)

4.1Gain on debt buyback(7)


48.5





Third-party bankruptcy accrual(8)


(4.3
)




Vacation accrual adjustment(9)








36.5Income (loss) before income taxes and noncontrolling interest

$
(144.3
)
$
(1,383.4
)
$
388.8


(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 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 amortization of intangible assets.(3)Represents
non-cash debt charges relating to the amortization of deferred debt financing costs and debt discounts. For the year ended
December 31, 2009, also includes $74.6 million 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. During the years ended December 31, 2008 and 2007, also includes $11.8 million and $20.4 million, respectively,
associated with the ineffectiveness of our HVF interest rate swaps. During the year ended December 31, 2008, also includes $30.0 million related to the write-off of deferred
financing costs associated with those countries outside the United States as to which take-out asset-based facilities have not been entered into. During the year ended December 31,
2007, also includes the write-off of $16.2 million of unamortized debt costs associated with a debt modification.(4)Represents
incremental, one-time 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
non-cash impairment charges related to our goodwill, other intangible assets and property and equipment.(6)In
2009, represents the mark-to-market adjustments on our interest rate cap and gasoline swap. In 2008 and 2007, represents
unrealized losses and a realized gain on our HIL interest rate swaptions which were terminated in October 2008.(7)Represents
a gain (net of transaction costs) recorded in connection with the buyback of portions of our Senior Notes and Senior Subordinated Notes.(8)Represents
an allowance for uncollectible program car receivables related to a bankrupt European dealer affiliated with a U.S. car manufacturer.(9)Represents
a decrease in the employee vacation accrual relating to a change in our U.S. vacation policy in 2007 which provides for vacation entitlement to
be earned ratably throughout the year versus the previous policy which provided for full vesting on January 1 of each year.


136

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)




Note 10Litigation and Guarantees

Legal Proceedings

From time to time we are a party to various legal proceedings. Other than with respect to the aggregate claims for public liability and property
damage pending against us, management does not believe that any of the matters resolved, or pending against us, during 2009 are material to us and our subsidiaries taken as a whole. While we have
accrued a liability with respect to claims for public liability and property damage of $277.8 million at December 31, 2009, management does not believe any of the other pending matters
described below are material. We have summarized below, for purposes of providing background, various legal proceedings to which we were and/or are a party during 2009 or the period after
December 31, 2009 but before the filing of this Annual Report on Form 10-K. In addition to the following, various other legal actions, claims and governmental inquiries and
proceedings are pending or may be instituted or asserted in the future against us and our subsidiaries.







137

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)





138

---



THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)





We
intend to assert that we have meritorious defenses in the foregoing matters and we intend to defend ourselves vigorously.

We
have established reserves for matters where we believe that the losses are probable and reasonably estimated, including for various of the matters set forth above. Other than with respect to the
reserve established for claims for public liability and property damage, none of those reserves are material. For matters, including those described above, where we have not established a reserve, the
ultimate outcome or resolution cannot be predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated. Litigation is subject to many uncertainties and the outcome of
the individual litigated matters is not predictable with assurance. It is possible that certain of the actions, claims, inquiries or proceedings, including those discussed above, could be decided
unfavorably to us or any of our subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that
could be material to our consolidated financial condition, results of operations or cash flows in any particular reporting period.

139

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Guarantees

At December 31, 2009 and 2008, the following guarantees (including indemnification commitments) were issued and outstanding.

Indemnifications

In the ordinary course of business, we execute contracts involving indemnifications standard in the relevant industry and indemnifications specific
to a transaction such as the sale of a business. These indemnifications might include claims relating to the following: environmental matters; intellectual property rights; governmental regulations
and employment-related matters; customer, supplier and other commercial contractual relationships; and financial matters. Performance under these indemnities would generally be triggered by a breach
of terms of the contract or by a third party claim. We regularly evaluate the probability of having to incur costs associated with these indemnifications and have accrued for expected losses that are
probable and estimable. The types of indemnifications for which payments are possible include the following:

Sponsors; Directors

We have entered into customary indemnification agreements with Hertz Holdings, the Sponsors and Hertz Holdings' stockholders affiliated with the
Sponsors, pursuant to which Hertz Holdings and Hertz will indemnify the Sponsors, Hertz Holdings' stockholders affiliated with the Sponsors and their respective affiliates, directors, officers,
partners, members, employees, agents, representatives and controlling persons, against certain liabilities arising out of performance of a consulting agreement with Hertz Holdings and each of the
Sponsors and certain other claims and liabilities, including liabilities arising out of financing arrangements or securities offerings. Hertz Holdings also entered into indemnification agreements with
each of its directors. We do not believe that these indemnifications are reasonably likely to have a material impact on us.

Environmental

We have indemnified various parties for the costs associated with remediating numerous hazardous substance storage, recycling or disposal sites in
many states and, in some instances, for natural resource damages. The amount of any such expenses or related natural resource damages for which we may be held responsible could be substantial. The
probable expenses that we expect to incur for such matters have been accrued, and those expenses are reflected in our consolidated financial statements. As of December 31, 2009 and 2008, the
aggregate amounts accrued for environmental liabilities including liability for environmental indemnities, reflected in our consolidated balance sheet in "Other accrued liabilities" were
$2.0 million and $2.2 million, respectively. The accrual generally represents the estimated cost to study potential environmental issues at sites deemed to require investigation or
clean-up activities, and the estimated cost to implement remediation actions, including on-going maintenance, as required. Cost estimates are developed by site. Initial cost
estimates are based on historical experience at similar sites and are refined over time on the basis of in-depth studies of the sites. For many sites, the remediation costs and other
damages for which we ultimately may be responsible cannot be reasonably estimated because of uncertainties with respect to factors such as our connection to the site, the materials there, the
involvement of other potentially responsible parties, the application of laws and other standards or regulations, site conditions, and the nature and scope of investigations, studies, and remediation
to be undertaken (including the technologies to be required and the extent, duration, and success of remediation).

140

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 11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, we announced several initiatives to improve our competitiveness and industry leadership through targeted job reductions affecting approximately 2,030 employees worldwide, primarily at our
corporate headquarters in Park Ridge, New Jersey, our U.S. service center in Oklahoma City, Oklahoma, and our U.S. car rental operations, with much smaller reductions occurring in our U.S. equipment
rental operations, as well as in Canada, Puerto Rico, Brazil, Australia and New Zealand. Additionally, during the fourth quarter of 2007, we finalized or substantially completed contract terms with
industry leading service providers to outsource select functions globally, relating to real estate facilities management and construction, procurement and information technology. The contracts related
to these outsourced functions were completed during the first quarter of 2008.

During
2008, we announced several additional initiatives to continue improving our competitiveness and industry position by initiating job reductions affecting approximately 2,750 employees in our
U.S. and European car rental operations with much smaller reductions occurring in our U.S. equipment rental operations, the corporate headquarters in Park Ridge, New Jersey, and the U.S. service
center in Oklahoma City, Oklahoma. Our North American and European car rental businesses, in order to further streamline operations and reduce costs, initiated the closure of approximately 248
off-airport locations, and our U.S. equipment rental business initiated the closure of 22 branch locations. Related to these location closures, we incurred charges for asset impairments,
losses on disposal of surplus vehicles and equipment and recognition of future facility lease obligations for those locations vacated by year-end. The locations closed were strategically
selected to enable us to continue to provide our rental services from other locations in the same area to our loyal customer base.

In
January 2009, we announced that, as part of a comprehensive plan to further decrease costs and as a result of reduced rental demand, we were reducing our global workforce by more than 4,000
employees beginning in the fourth quarter 2008 and continuing through the first quarter of 2009, more than half of whom are not eligible for severance benefits. We incurred job reductions in the car
and equipment rental businesses, corporate and support areas, and in all geographies, with an emphasis on eliminating non-customer facing jobs. Related to these location closures and
continued cost reduction initiatives, we incurred restructuring charges for employee
termination liabilities covering approximately 1,500 employee separations in the fourth quarter of 2008.

During
the first and second quarters of 2009, our equipment rental business incurred charges mainly for losses on disposal of surplus equipment and recognition of facility lease obligations related to
previously announced U.S. branch closures that were completed during the quarters. Our North American and European car rental businesses incurred charges mainly for facility lease obligations related
to previously announced off-airport location closures that were completed during the quarters. In the first quarter of 2009, our European car rental business also eliminated certain
specialty rental equipment as a future cost reduction initiative and incurred related lease termination costs. The first and second quarter

141

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2009
restructuring charges included employee termination liabilities covering approximately 500 and 600 employees, respectively.

During
the third and fourth quarters of 2009, our equipment rental business incurred charges mainly for costs related to facility lease obligations for previously closed branches and additional losses
on the disposal of remaining surplus equipment related to these locations. Our European car rental business incurred employee termination benefits costs associated with the migration of work to the
European shared service center and the creation of two regions within Europe to manage our European country operations. Additionally, in the third quarter of 2009, our European car rental business
recognized a loss on sale of a building due to reduced office space needs resulting from headcount reductions. The third and fourth quarter 2009 restructuring charges included employee termination
liabilities covering approximately 300 and 250 employees, respectively.

For
the year ended December 31, 2009, our consolidated statement of operations includes restructuring charges relating to the initiatives discussed above of $106.8 million, which is
composed of $44.1 million of termination benefits, $15.6 million in asset impairment charges, $29.8 million in facility closure and lease obligation costs, $7.6 million in
consulting costs, $4.1 million in relocation costs, $1.7 million in contract termination costs, $0.7 million in pension settlement losses and $3.2 million of other
restructuring charges.

For
the year ended December 31, 2008, our consolidated statement of operations includes restructuring charges relating to the initiatives discussed above of $216.1 million, which is
composed of $83.8 million of termination benefits, $89.1 million in asset impairment charges, $14.1 million in facility closure and lease obligation costs, $4.0 million in
facility fixed asset and inventory impairment costs, $10.0 million in consulting costs, $5.6 million in pension settlement losses and $9.5 million of other restructuring charges.

For
the year ended December 31, 2007, our consolidated statement of operations includes restructuring charges relating to the initiatives discussed above of $96.4 million, which is
composed of $65.2 million of involuntary termination benefits, $21.7 million in consulting costs, a net gain of $0.4 million related to pension and post employment benefits and
other charges of $9.9 million.

Additional
efficiency and cost saving initiatives are being developed in 2010. However, we presently do not have firm plans or estimates of any related expenses.

Restructuring
charges in our consolidated statement of operations can be summarized as follows (in millions of dollars):

Years ended December 31,By Caption:

2009

2008

2007Direct operating

$
65.4

$
171.5

$
41.2Selling, general and administrative


41.4


44.6


55.2Total

$
106.8

$
216.1

$
96.4


142

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



Years ended December 31,By Segment:

2009

2008

2007Car rental

$
58.7

$
98.4

$
64.5Equipment rental


38.2


103.2


4.9Other reconciling items


9.9


14.5


27.0Total

$
106.8

$
216.1

$
96.4


Our consolidated balance sheet as of December 31, 2009 and 2008, included accruals relating to the restructuring program of $29.7 million and
$60.3 million, respectively. We expect to pay substantially all of the remaining restructuring obligations by the end of the second quarter 2010. The following table sets forth the activity
affecting the accrual during the years ended December 31, 2009 and 2008 (in millions of dollars):

Involuntary
Termination
Benefits

Pension
and Post
Retirement
Expense

Consultant
Costs

Other

TotalBalance as of January 1, 2008

$
15.2

$
0.1

$
2.1

$
0.8

$
18.2Charges incurred


83.8


5.6


10.0


116.7


216.1Cash payments


(51.7
)




(12.4
)

(12.3
)

(76.4
)Other(1)


(3.9
)

(5.2
)

0.3


(88.8
)

(97.6
)Balance as of December 31, 2008


43.4


0.5





16.4


60.3Charges incurred


44.1


0.7


7.6


54.4


106.8Cash payments


(67.3
)




(6.9
)

(25.1
)

(99.3
)Other(2)


(0.6
)

(1.2
)

(0.3
)

(36.0
)

(38.1
)Balance as of December 31, 2009

$
19.6

$


$
0.4

$
9.7

$
29.7


(1)Primarily
consists of an increase of $83.7 million for the impairment of revenue earning equipment, $5.4 million for the impairment of lease
obligations, $5.1 million in pension and post retirement liabilities, $4.0 million for the impairment of fixed assets and inventory, and $1.5 million in other benefits, partly
offset by $2.2 million loss in foreign currency translation, which have been included within "Accumulated other comprehensive income" on our consolidated balance sheet.(2)Primarily
consists of a decrease of $20.5 million for facility closures, $15.6 million for the impairment of revenue earning equipment and
other assets, $1.6 million for executive pension liability settlements and $0.8 million for contract termination costs, partly offset by a $0.2 million gain in foreign currency
translation.


Note 12Financial Instruments

Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash equivalents, short-term
investments and trade receivables. We place our cash equivalents and short-term investments with a number of financial institutions and investment funds to limit the amount of credit
exposure to any one financial institution. Concentrations of credit risk with respect to trade receivables are limited due to the large number of customers comprising our customer base, and their
dispersion across different businesses and geographic areas. As of December 31, 2009, we had no significant concentration of credit risk.

GAAP
establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active
markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or
no market data, which require the reporting entity to develop its own assumptions.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

Fair value approximates the amount indicated on the balance sheet at December 31, 2009 because of the short-term maturity of these
instruments. Money market accounts, whose fair values at December 31, 2009, are measured using Level 1 inputs, totaling $106.8 million and $294.4 million are included in
"Cash and cash equivalents" and "Restricted cash and cash equivalents," respectively.

Debt

For borrowings with an initial maturity of 93 days or less, fair value approximates carrying value because of the short-term
nature of these instruments. For all other debt, fair value is estimated based on quoted market rates as well as borrowing rates currently available to us for loans with similar terms and average
maturities. The aggregate fair value of all debt at December 31, 2009 approximated $10,013.5 million, compared to its aggregate carrying value of $10,055.7 million. The aggregate
fair value of all debt at December 31, 2008 approximated $7,968.3 million, compared to its aggregate carrying value of $11,033.9 million.

Derivative Instruments and Hedging Activities

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2009 and
2008 (in millions of dollars):

Fair Value of Derivative Instruments(1)Asset Derivatives(2)



Liability Derivatives(2)December 31,
2009

December 31,
2008



December 31,
2009

December 31,
2008Derivatives designated as hedging instruments under ASC 815:HVF interest rate swaps

$


$




$
12.8

$
134.5Derivatives not designated as hedging instruments under ASC 815:Gasoline swaps


2.2










Interest rate caps


8.2


0.3




5.6


0.3Foreign exchange options





0.6







Total derivatives not designated as hedging instruments under ASC 815


10.4


0.9




5.6


0.3Total derivatives

$
10.4

$
0.9



$
18.4

$
134.8


(1)All
fair value measurements were primarily based upon significant observable (Level 2) inputs.(2)All
asset derivatives are recorded in "Prepaid expenses and other assets" and all liability derivatives are recorded in "Accrued liabilities" on our
consolidated balance sheets.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)




Amount of Gain or
(Loss) Recognized in
Other Comprehensive
Income on Derivative
(Effective Portion)

Amount of Gain or
(Loss) Reclassified
from Accumulated
Other Comprehensive
Income into Income
(Effective Portion)

Amount of Gain or
(Loss) Recognized in
Income on Derivative
(Ineffective Portion)Years ended December 31,2009

2008

2009

2008

2009

2008Derivatives in ASC 815 Cash Flow Hedging Relationship:HVF interest rate swaps

$
(12.8
)
$
(72.4
)
$
(74.6)
(1)
$


$


$
(11.8
)


Note:The
location of both the effective portion reclassified from "Accumulated other comprehensive loss" into income and the ineffective portion recognized in
income is in "Interest expense" on our consolidated statement of operations.(1)Represents
the amortization of amounts in "Accumulated other comprehensive loss" associated with the de-designation of the previous cash flow
hedging relationship as described below.


Location of Gain or (Loss)
Recognized on Derivative

Amount of Gain or (Loss)
Recognized in Income
on DerivativeYears ended December 31,2009

2008Derivatives Not Designated as Hedging Instruments under ASC 815:Gasoline swaps

Direct operating

$
7.4

$
Interest rate caps

Selling, general and administrative


(2.6
)

Foreign exchange options

Selling, general and administrative


0.2


HIL swaptions

Selling, general and administrative





(2.2
)Total



$
5.0

$
(2.2
)


In connection with the Acquisition and the issuance of $3,550.0 million of floating rate U.S. Fleet Debt, our subsidiary HVF entered into certain
interest rate swap agreements, or the "HVF Swaps," effective December 21, 2005, which qualify as cash flow hedging instruments in accordance with GAAP. These agreements mature at various terms,
in connection with the scheduled maturity of the associated debt obligations, through November 2010. Under these agreements, until February 2009, HVF was paying monthly interest at a fixed rate of
4.5% per annum in exchange for monthly interest at one-month LIBOR, effectively transforming the floating rate U.S. Fleet Debt to fixed rate obligations. In March 2009, HVF made a cash
payment to have the fixed rate on these swaps reset to the then current market rates of 0.872% and 1.25% for the swaps maturing in February 2010 and November 2010, respectively. $80.4 million
of this payment was made to an affiliate of MLGPE which is a counterparty to the HVF Swaps. Concurrently with this payment, the hedging relationship was de-designated and the amount
remaining in "Accumulated other comprehensive loss" associated with this cash flow hedging relationship was frozen and will be amortized into "Interest expense" over the respective terms of the
associated debt in accordance with GAAP. We expect to amortize approximately $68.8 million from "Accumulated other comprehensive loss" into "Interest expense" over the next twelve months.
Additionally, a new hedging relationship was designated between the HVF Swaps and the remaining $2,825.0 million of floating rate U.S. Fleet Debt, which also qualifies for cash flow hedge
accounting in accordance with GAAP. Both at the inception of the hedge and on an ongoing basis, we measure ineffectiveness by comparing the fair value of the HVF Swaps and the fair value of
hypothetical swaps, with similar terms, using the Hypothetical Method in accordance with GAAP. The hypothetical swaps represent a perfect hedge of the variability in interest payments associated with
the U.S. Fleet Debt.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Subsequent
to the resetting of the swaps at current market rates, we anticipate that there will be no ineffectiveness in the hedging relationship because the critical terms of the HVF Swaps match the
terms of the hypothetical swaps.

For
the year ended December 31, 2009, we recorded an expense of $74.6 million in our consolidated statement of operations, in "Interest expense," associated with the amortization of the
amount remaining in "Accumulated other comprehensive loss" associated with the de-designation of the cash flow hedging relationship described above. For the year ended December 31,
2008, we recorded an expense of $11.8 million in our consolidated statement of operations, in "Interest expense," associated with the ineffectiveness of the HVF Swaps. The ineffectiveness in
2008 resulted from a decline in the value of the HVF Swaps due to a decrease in forward interest rates along with a decrease in the time value component as we approached the maturity dates of the HVF
Swaps. The effective portion of the change in fair value of the HVF Swaps is recorded in "Accumulated other comprehensive loss." As of December 31, 2009 and 2008, the balance reflected in
"Accumulated other comprehensive loss," net of tax, was a loss of $49.7 million (net of tax of $31.8 million) and a loss of $89.6 million (net of tax of $57.4 million),
respectively. The fair values of the HVF Swaps were calculated using the income approach and applying observable market data (i.e. the 1-month LIBOR yield curve and credit default
swap spreads).

In
connection with the entrance into the HVF Swaps, Hertz entered into seven differential interest rate swap agreements, or the "differential swaps." These differential swaps were required to be put
in place to protect the counterparties to the HVF Swaps in the event of an "amortization event"
under the asset-backed notes agreements. In the event of an "amortization event," the amount by which the principal balance on the floating rate portion of the U.S. Fleet Debt is reduced, exclusive of
the originally scheduled amortization, becomes the notional amount of the differential swaps and is transferred to Hertz. There was no payment associated with these differential swaps and their
notional amounts are and will continue to be zero unless (1) there is an amortization event, which causes the amortization of the loan balance, or (2) the debt is prepaid.

An
"event of bankruptcy" (as defined in the ABS Base Indenture) with respect to MBIA or Ambac would constitute an "amortization event" under the portion of the U.S. Fleet Debt facilities guaranteed by
the affected insurer.

On
September 12, 2008, a supplement was signed to the Indenture, dated as of August 1, 2006, between HVF and the Bank of New York Mellon Trust Company, N.A. This supplement created the
Series 2008-1 Notes for issuance by HVF. In order to satisfy rating agency requirements related to its bankruptcy-remote status, HVF acquired an interest rate cap in an amount equal
to the Series 2008-1 Notes maximum principal amount of $825.0 million with a strike rate of 7% and a term until August 15, 2011. HVF bought the cap on the date the
supplement was signed for $0.4 million and in an associated transaction, Hertz sold an equal and opposite cap for $0.3 million. In connection with the issuance of the
Series 2009-1 Notes, HVF caused the termination of the Series 2008-1 Notes, as well as both of the associated interest rate caps.

On
September 18, 2009, HVF completed the closing of the Series 2009-1 Notes. In order to satisfy rating agency requirements related to its bankruptcy-remote status, HVF
purchased an interest rate cap, for $11.7 million, with a maximum notional amount equal to the Series 2009-1 Notes maximum principal amount of $2.1 billion with a
strike rate of 5% and a term until January 25, 2013. Additionally, Hertz sold a 5% interest rate cap, for $6.5 million, with a notional amount equal to 33.3% of the notional amount of
the HVF cap through January 2012, and then subsequently with a matching notional amount to the HVF cap through its maturity date of January 25, 2013. The fair value of these interest rate caps
was calculated using a discounted cash flow method and applying observable market data. Gains and losses resulting

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

from
changes in the fair value of these interest rate caps are included in our results of operations in the periods incurred.

In
May 2006, in connection with the forecasted issuance of the permanent take-out international asset-based facilities, our subsidiary HIL purchased two swaptions for
€3.3 million, to protect itself from interest rate increases. These swaptions gave HIL the right, but not the obligation, to enter into three year interest rate swaps, based on
a total notional amount of €600 million at an interest rate of 4.155%. The swaptions were renewed twice in 2007, prior to their scheduled expiration dates of March 15,
2007 and September 5, 2007, at a total cost of €2.7 million, and expired on June 5, 2008. The fair values of
the HIL swaptions were calculated using the income approach and applying observable market data. On June 4, 2008, these swaptions were sold for a realized gain of
€9.4 million (or $14.8 million). Additionally, on June 4, 2008, HIL purchased two new swaptions for €8.6 million, to protect itself from
interest rate increases associated with the International ABS Fleet Financing Facility, which closed on July 24, 2008. These swaptions were based on an underlying transaction with a notional
amount of €600 million at an interest rate of 4.25%. During the year ended December 31, 2008, the fair value adjustments related to these swaptions were an unrealized
loss of $12.0 million and a realized gain of $9.8 million, respectively, which were recorded in our consolidated statement of operations in "Selling, general and administrative"
expenses. On October 10, 2008, the outstanding swaptions were terminated and Hertz received a €1.9 million payment from counterparties.

We
purchase unleaded gasoline and diesel fuel at prevailing market rates. In January 2009, we began a program to manage our exposure to changes in prices through the use of derivative commodity
instruments. We currently have in place swaps to cover a portion of our exposure through December 2010. We presently hedge a portion of our overall unleaded gasoline and diesel fuel purchases with
commodity swaps and have contracts in place that settle on a monthly basis. As of December 31, 2009, our outstanding commodity instruments for unleaded gasoline and diesel fuel totaled
approximately 10.5 million gallons and 2.9 million gallons, respectively. The fair value of these commodity instruments was calculated using a discounted cash flow method and applying
observable market data. Gains and losses resulting from changes in the fair value of these commodity instruments are included in our results of operations in the periods incurred.

We
manage our foreign currency risk primarily by incurring, to the extent practicable, operating and financing expenses in the local currency in the countries in which we operate, including making
fleet and equipment purchases and borrowing for working capital needs. Also, we have purchased foreign exchange options to manage exposure to fluctuations in foreign exchange rates for selected
marketing programs. The effect of exchange rate changes on these financial instruments would not materially affect our consolidated financial position, results of operations or cash flows. Our risks
with respect to foreign exchange options are limited to the premium paid for the right to exercise the option and the future performance of the option's counterparty. Premiums paid for options
outstanding as of December 31, 2009, were approximately $0.1 million and we limit counterparties to financial institutions that have strong credit ratings. As of December 31, 2009
and 2008, the total notional amount of these foreign exchange options was $0.3 million and $15.1 million, respectively, maturing through February 2010, and the fair value of all
outstanding foreign exchange options, was approximately $0.0 million and $0.5 million, respectively, which was recorded in our consolidated balance sheet in "Prepaid expenses and other
assets." The fair value of the foreign exchange options was calculated using a discounted cash flow method and applying observable market data. Gains and losses resulting from changes in the fair
value of these options are included in our results of operations in the periods incurred.

We
also manage exposure to fluctuations in currency risk on intercompany loans we make to certain of our subsidiaries by entering into foreign currency forward contracts at the time of the loans which
are

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

intended
to offset the impact of foreign currency movements on the underlying intercompany loan obligations. As a result, the forward contracts have no material impact on our results of operations. As
of December 31, 2009, the total notional amount of these forward contracts was $1,040.7 million, maturing within two months.

On
October 1, 2006, we designated our Senior Euro Notes as an effective net investment hedge of our Euro-denominated net investment in our international operations. As a result of
this net investment hedge designation, as of December 31, 2009 and 2008, losses of $19.2 million (net of tax of $17.8 million) and $15.7 million (net of tax of
$12.6 million), respectively, attributable to the translation of our Senior Euro Notes into the U.S. dollar are recorded in our consolidated balance sheet in "Accumulated other comprehensive
loss."

Note 13Related Party Transactions

Relationship with Hertz Investors, Inc. and the Sponsors

Stockholders Agreement

In connection with the Acquisition, Hertz Holdings entered into a stockholders agreement, or, as amended, the "Stockholders Agreement," with
investment funds associated with or designated by the Sponsors. The Stockholders Agreement contains agreements that entitle investment funds associated with or designated by the Sponsors to nominate
all of Hertz Holdings' directors. The director nominees are to include three nominees of an investment fund associated with CD&R (one of whom shall serve as the chairman or, if the chief executive
officer is
the chairman, the lead director), two nominees of investment funds associated with Carlyle, two nominees of an investment fund associated with MLGPE (collectively, the "Sponsor Designees") and up to
six independent directors (subject to unanimous consent of the Sponsor Designees, for so long as Hertz Holdings remains a "controlled company" within the meaning of the New York Stock Exchange rules),
subject to adjustment in the case that the applicable investment fund sells more than a specified amount of its shareholdings in Hertz Holdings. In addition, upon Hertz Holdings ceasing to be a
"controlled company" within the meaning of the New York Stock Exchange rules, if necessary to comply with the New York Stock Exchange rules, the director nominees of the Sponsors shall be reduced to
two nominees of an investment fund associated with CD&R (one of whom shall serve as the chairman or, if the chief executive officer is the chairman, the lead director), one nominee of investment funds
associated with Carlyle, and one nominee of an investment fund associated with MLGPE, and additional independent directors will be elected by the Board of Directors of Hertz Holdings to fill the
resulting director vacancies. The Stockholders Agreement also provides that Hertz Holdings' chief executive officer shall be designated as a director, unless otherwise approved by a majority of the
Sponsor Designees. In addition, the Stockholders Agreement provides that one of the nominees of an investment fund associated with CD&R shall serve as the chairman of the executive and governance
committee of Hertz Holdings and, unless otherwise agreed by this fund, as Chairman of the Board of Directors of Hertz Holdings. On October 12, 2006, our Board of Directors and the Board of
Directors of Hertz Holdings elected four independent directors, effective from the date of the completion of the initial public offering of the common stock of Hertz Holdings. In order to comply with
New York Stock Exchange rules, Hertz Holdings will be required to have a majority of independent directors on its Board of Directors within one year of its ceasing to be a "controlled company" within
the meaning of the New York Stock Exchange rules.

The
Stockholders Agreement also grants to the investment funds associated with CD&R or to the majority of the Sponsor Designees the right to remove Hertz Holdings' chief executive officer. Any
replacement chief executive officer requires the consent of investment funds associated with CD&R as well as investment funds associated with at least one other Sponsor. It also contains restrictions
on the

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

transfer
of Hertz Holdings' shares, and provides for tag-along and drag-along rights, in certain circumstances. The rights described above apply only for so long as the
investment funds associated with the applicable Sponsor maintain certain specified minimum levels of shareholdings in Hertz Holdings.

In
addition, the Stockholders Agreement limits the rights of the investment funds associated with or designated by the Sponsors that have invested in the common stock of Hertz Holdings and its
affiliates, subject to several exceptions, to own, manage, operate or control any of its "competitors" (as defined in the Stockholders Agreement). The Stockholders Agreement may be amended from time
to time in the future to eliminate or modify these restrictions without Hertz Holdings' consent.

Registration Rights Agreement

On the Closing Date, Hertz Holdings entered into a registration rights agreement, or, as amended, the "Registration Rights Agreement," with
investment funds associated with or designated by the Sponsors. The Registration Rights Agreement grants to certain of these investment funds the right, to cause Hertz Holdings, at its own expense, to
use its best efforts to register such securities held by the investment funds for public resale, subject to certain limitations. The exercise of this right is limited to three requests by the group of
investment funds associated with each Sponsor, except for registrations effected pursuant to Form S-3, which are unlimited, subject to certain limitations, if Hertz Holdings is
eligible to use Form S-3. The secondary offering of the common stock of Hertz Holdings in June 2007 was effected pursuant to this Registration Rights Agreement. In the event Hertz
Holdings registers any of its common stock, these investment funds also have the right to require Hertz Holdings to use its best efforts to include shares of the common stock of Hertz Holdings held by
them, subject to certain limitations, including as determined by the underwriters. The Registration Rights Agreement also provides for Hertz Holdings to indemnify the investment funds party to that
agreement and their affiliates in connection with the registration of Hertz Holdings' securities.

Indemnification Agreements

We have entered into customary indemnification agreements with Hertz Holdings, the Sponsors and Hertz Holdings' stockholders affiliated with the
Sponsors, pursuant to which Hertz Holdings and Hertz will indemnify the Sponsors, Hertz Holdings' stockholders affiliated with the Sponsors and their respective affiliates, directors, officers,
partners, members, employees, agents, representatives and controlling persons, against certain liabilities arising out of the performance of a consulting agreement with Hertz Holdings and each of the
Sponsors and certain other claims and liabilities, including liabilities arising out of financing arrangements or securities offerings.

Hertz
Holdings has entered into indemnification agreements with each of its directors. The indemnification agreements provide the directors with contractual rights to the indemnification and expense
advancement rights provided under Hertz Holdings' by-laws, as well as contractual rights to additional indemnification as provided in the indemnification agreements.

We
have not recorded any liability relating to these indemnification agreements because these liabilities are not considered to be material.

Director Compensation Policy

Our directors who are also members of the Board of Directors of Hertz Holdings receive no additional compensation for serving on our Board of
Directors or any committee of our Board of Directors. Currently all members of our Board of Directors are also members of the Board of Directors of Hertz

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Holdings.
The compensation expense of the Hertz Holdings' directors is pushed down from Hertz Holdings and recorded on the books at the Hertz level.

On
October 12, 2006, the Board of Directors of Hertz Holdings approved the Director Compensation Policy. Pursuant to the policy its directors who are not also employees each receive a $150,000
annual retainer fee, of which 40% (i.e., $60,000) is payable in cash and 60% (i.e., $90,000) is payable in the form of Hertz Holdings' stock options and having a Black-Scholes value
equal to such dollar amount.

The
chairperson of Hertz Holdings' Audit Committee is paid an additional annual cash fee of $25,000 and each other member of its Audit Committee is paid an additional annual cash fee of $10,000. The
chairperson of Hertz Holdings' Compensation Committee is paid an additional annual cash fee of $15,000 and each other member of its Compensation Committee receives an additional annual cash fee of
$10,000.

Hertz
Holdings' also reimburses its directors for reasonable and necessary expenses they incur in performing their duties as directors, and its directors are entitled to free worldwide Hertz car
rentals upon completion of evaluation forms. In the case of a member of our Board or Hertz Holdings' Board who is also one of our employees, no additional compensation is paid for serving as a
director. Each of Hertz Holdings' directors who is employed by or affiliated with one of the Sponsors may assign all or any portion of the compensation the director receives for his services as a
director to that Sponsor or its affiliates.

Stock
options are granted annually in arrears, and cash fees are payable quarterly in arrears, although a director may generally elect to receive all or a portion of fees that would otherwise be
payable in cash in the form of shares of the common stock of Hertz Holdings having a fair market value at such time equal to the amount of such fees. Any such shares are paid to the director when cash
fees would otherwise be payable, although, if a director so chooses, these shares may be payable on a tax-deferred basis in phantom shares if the requirements regarding such deferral are
met in accordance with applicable tax law, in which case the actual shares of the common stock of Hertz Holdings are paid to the director promptly following the date on which he
or she ceases to serve as a director of Hertz Holdings (or, if earlier, upon a change in control as defined in the Director Plan or the Omnibus Plan).

Options
granted under the Director Compensation Policy must be granted at an exercise price no less than fair market value of such shares on the date of grant. Options granted as part of a director's
annual retainer fee will be fully vested at the time of grant and will generally have a 10-year term.

In
May 2009, the Board of Directors approved an amendment to the Director Compensation Policy, whereby the equity portion of the annual retainer fee will now be paid in the form of shares of Hertz
Holdings common stock instead of options. In addition, the Board of Directors also passed a resolution reducing the annual retainer fee by 20% for the period from May 2009 to May 2010 or such earlier
date as Hertz Holdings fully restores the salary reductions of its officers. In the fall of 2009, Hertz Holdings fully restored the salary reductions of its officers and accordingly, the annual
retainer fee for the Board of Directors was also restored.

A
director recognizes ordinary income upon exercising options granted in an amount equal to the fair market value of the shares acquired on the date of exercise, less the exercise price, and we have a
corresponding tax deduction at that time. In the case of shares issued in lieu of cash fees, a director who is an individual generally recognizes ordinary income equal to the fair market value of such
shares on the date such shares are paid to the director and we have a corresponding tax deduction at that time. For the years ended December 31, 2009, 2008 and 2007, we recognized
$1.6 million, $1.8 million and $1.7 million, respectively, of expense relating to the Director Compensation Policy in our consolidated statement of operations in "Selling, general
and administrative" expenses.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

All
equity awards granted to Hertz Holdings' directors prior to May 15, 2008 pursuant to the Director Compensation Policy were granted pursuant the Director Plan, which was approved by Hertz
Holdings' stockholders on October 20, 2006. On February 28, 2008, Hertz Holdings' Board of Directors adopted the Omnibus Plan, which was approved by Hertz Holdings' stockholders at its
annual meeting of stockholders held on May 15, 2008. The Omnibus Plan provides that no further equity awards will be granted pursuant to the Director Plan . However, awards that had been
previously granted pursuant to the Director Plan prior to May 15, 2008 will continue to be subject to and governed by the terms of the Director Plan. Accordingly, all equity awards granted to
the directors of Hertz Holdings' on May 15, 2008 as part of the Director Compensation Policy were (and those that are granted in the future pursuant to the Director Compensation Policy will be)
granted pursuant to the Omnibus Plan.

Financing Arrangements with Related Parties

Affiliates of ML Global Private Equity, L.P. and its related funds (which are stockholders of Hertz Holdings) and of Merrill
Lynch & Co., Inc., or "ML," one of the underwriters in the initial public offering of the common stock of Hertz Holdings and the June 2007 secondary offering by the Sponsors, were
lenders under the Hertz Holdings Loan Facility (which was repaid with the proceeds of Hertz Holdings' initial public offering) are lenders under the original and amended Senior Term Facility, the
original and amended Senior ABL Facility and the Fleet Financing Facility; acted as initial purchasers with respect to the offerings of the Senior Notes, the Senior Subordinated Notes and the
Series 2008-1 Notes; acted as structuring advisors and agents under our ABS Program; and acted as dealer managers and solicitation agents for Hertz's tender offers for its existing
debt securities in connection with the Acquisition.

Banc
of America Securities LLC, an affiliate of MLGPE, acted as one of the joint lead bookrunners in the issuance of the Series 2009-2 Notes, for which they received
customary fees and expenses.

As
of December 31, 2009, approximately $246 million of our outstanding debt was with related parties.

See
Note 3Debt

On
June 29, 2007, we entered into a master loan agreement with Hertz Holdings. The maximum amount which may be borrowed by us under this facility is $100 million. The facility expires on
June 29, 2012, or on an earlier date if mutually agreed by both parties. The interest rate is based on the U.S. Dollar LIBOR rate plus the margin in effect for the Eurocurrency Loans under our
Senior ABL Facility. As of December 31, 2009, $7.6 million in borrowings were outstanding.

Guarantees

Our obligations under the Senior Term Facility and Senior ABL Facility are guaranteed by our immediate parent, Hertz Investors, Inc.
(previously known as CCMG Corporation). Hertz Holdings is not a guarantor of these facilities. See Note 3Debt

Other Sponsor Relationships

In May and June 2009, ML, an affiliate of one of the Sponsors, MLGPE, acted as an underwriter in the Common Stock Public Offering and in the
Convertible Debt Public Offering, for which they received customary fees and expenses.

In
May 2009 Hertz Holdings entered into subscription agreements with investment funds affiliated with CD&R and Carlyle to purchase an additional 32,101,182 shares of Hertz Holdings' common stock at a
price of $6.23 per share (the same price per share paid to Hertz Holdings by the underwriters in the Common Stock Public Offering) with proceeds to Hertz Holdings of approximately
$200.0 million. The

151

---



THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Private
Offering closed on July 7, 2009 and the 32,101,182 shares of Hertz Holdings' common stock were issued to CD&R and Carlyle affiliated investment funds on the same date. Giving effect to
the Common Stock Public Offering and the Private Offering the Sponsors' ownership percentage in us is approximately 51%.

Note 14Quarterly Financial Information (Unaudited)

A summary of the quarterly operating results during 2009 and 2008 were as follows (in millions of dollars, except per share data):

First
Quarter
2009

Second
Quarter
2009

Third
Quarter
2009

Fourth
Quarter
2009Revenues

$
1,564.9

$
1,754.5

$
2,041.4

$
1,740.7Income (loss) before income taxes


(210.1
)(1)(2)(3)

34.9
(1)(2)(3)(5)

87.0
(1)(2)(3)

(56.1
)(1)(2)(3)(6)Net income (loss) attributable to The Hertz Corporation and Subsidiaries' common stockholders


(163.5
)(4)

6.4
(4)

33.1
(4)

13.4
(4)




First
Quarter
2008

Second
Quarter
2008

Third
Quarter
2008

Fourth
Quarter
2008Revenues

$
2,039.2

$
2,275.3

$
2,421.9

$
1,788.7Income (loss) before income taxes


(55.9
)(7)(8)(9)(11)

92.9
(7)(8)(9)(11)(12)

26.1
(8)(9)(11)

(1,446.4
)(7)(8)(9)(12)(13)Net income (loss) attributable to The Hertz Corporation and Subsidiaries' common stockholders


(57.8
)(10)(14)

51.2
(10)

17.5
(10)(14)

(1,217.5
)(10)(13)


(1)The
first quarter of 2009, second quarter of 2009, third quarter of 2009 and fourth quarter of 2009 include increases of $6.6 million,
$7.0 million, $4.7 million and $1.0 million, respectively, in depreciation expense related to the net effects of changing depreciation rates to reflect changes in the estimated
residual value of revenue earning equipment.(2)The
first quarter of 2009, second quarter of 2009, third quarter of 2009 and fourth quarter of 2009 include $29.5 million, $22.0 million,
$35.7 million and $19.6 million, respectively, of restructuring charges. See Note 11Restructuring.(3)The
first quarter of 2009, second quarter of 2009, third quarter of 2009 and fourth quarter of 2009 include $7.5 million, $22.3 million,
$22.4 million and $22.4 million, respectively, associated with the amortization of amounts pertaining to the de-designation of our interest rate swaps as effective hedging
instruments.(4)The
first quarter of 2009, second quarter of 2009, third quarter of 2009 and fourth quarter of 2009 include $8.1 million, $2.7 million,
$7.5 million and $1.7 million, respectively, of tax benefit related to the restructuring charge.(5)The
second quarter of 2009, includes a gain (net of transaction costs) of $48.5 million recorded in connection with the buyback of portions of our
Senior Notes and Senior Subordinated Notes.(6)The
fourth quarter of 2009, includes a VAT reclaim of $18.5 million received in the United Kingdom.(7)The
first quarter of 2008, second quarter of 2008, third quarter of 2008 and fourth quarter of 2008 include increases of $4.2 million,
$2.2 million, $12.1 million and $14.2 million, respectively, in depreciation expense related to the net effects of changing depreciation rates to reflect changes in the estimated
residual value of revenue earning equipment.(8)The
first quarter of 2008, second quarter of 2008, third quarter of 2008 and fourth quarter of 2008 include $19.6 million, $32.7 million,
$74.9 million and $88.9 million, respectively, of restructuring charges. See Note 11Restructuring.(9)The
first quarter of 2008, second quarter of 2008, third quarter of 2008 and fourth quarter of 2008 include $2.3 million, $2.7 million,
$2.8 million and $4.0 million, respectively, of ineffectiveness on our interest rate swaps.(10)The
first quarter of 2008, second quarter of 2008, third quarter of 2008 and fourth quarter of 2008 include $5.8 million, $11.4 million,
$23.0 million and $19.6 million, respectively, of tax benefit related to the restructuring charge.(11)The
first quarter of 2008, second quarter of 2008 and third quarter of 2008 include an increase of $3.2 million, and decreases of
$0.7 million and $2.5 million, respectively, in our employee vacation accrual relating to a change in our U.S. vacation policy in 2007 which provides for vacation entitlement to be
earned ratably throughout the year versus the previous policy which provided for full vesting on January 1 of each year.


152

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(12)The
second quarter of 2008 and fourth quarter 2008 includes the write-off of $7.7 million and $22.3 million, respectively, of
unamortized debt costs of those countries who are not participating in the take-out asset-based facilities.(13)The
fourth quarter of 2008 includes impairment charges on goodwill, other intangible assets and property and equipment of $1,168.9 million
($989.0 million, net of tax). Also includes $3.8 million of pre-tax ($2.4 million post-tax) adjustments related to prior quarters within the year.(14)The
first quarter of 2008 and third quarter of 2008 includes unfavorable tax adjustments of $4.3 million and $1.3 million, respectively,
related to prior year periods, which had a negative impact in the first quarter of 2008 and third quarter of 2008.


Note 15Guarantor and Non-Guarantor Condensed Consolidating Financial Statements

The following condensed consolidating financial information presents the Condensed Consolidating Balance Sheets as of December 31, 2009 and
2008 and the Condensed Consolidating Statements of Operations for the years ended December 31, 2009, 2008 and 2007, and Statements of Cash Flows for the years ended December 31, 2009,
2008 and 2007, of (a) The Hertz Corporation, or "the Parent"; (b) the guarantor subsidiaries; (c) the non-guarantor subsidiaries; (d) elimination entries
necessary to consolidate the Parent with the guarantor and non-guarantor subsidiaries; and (e) the Company on a consolidated basis.

Investments
in subsidiaries are accounted for using the equity method for purposes of the consolidating presentation. The principal elimination entries relate to investments in subsidiaries and
intercompany balances and transactions. Separate financial statements and other disclosures with respect to the guarantor subsidiaries have not been provided as management believes the following
information is sufficient, as the guarantor subsidiaries are 100% owned by the Parent and all guarantees are full and unconditional. Additionally, substantially all of the assets of the guarantor
subsidiaries are pledged under the Senior Credit Facilities, and consequently will not be available to satisfy the claims of our general creditors.

We
have revised the Parent, Guarantor Subsidiaries and Non-Guarantor Subsidiaries Condensed Consolidating Balance Sheet as of December  31, 2008 to report a distribution of equity in the
amount of $1.8 billion from a non-guarantor subsidiary to the Parent in 2008 which was previously unrecorded. In addition, we revised the Condensed Consolidating Statement of Cash Flows for the
years ended December 31, 2008 and 2007 to reflect these distributions of equity from Non-Guarantor Subsidiaries to Parent in the financing section of the cash flow statement. We previously
reported "Net cash provided by operating activities" of $2,319.1 million and $2,304.6 million and "Net cash used in financing activities" of $894.2 million and $149.3 million for
the Non-Guarantor Subsidiaries for the year ended December 31, 2008 and 2007, respectively. Also, we have revised our Condensed Consolidating Statement of Cash Flows for the years ended
December 31, 2008 and 2007 to reflect the return of capital from subsidiaries in the investing section of the Parent which was previously reported in the operating section. We previously
reported "Net cash provided by (used in) operating activities" of $(210.7) million and $551.0 million and "Net cash used in investing activities" of $95.4 million and $64.3 million for
the Parent for the years ended December 31, 2008 and 2007, respectively.

We
have revised our presentation of balances arising from the preparation of this stand alone balance sheet presentation and previously reported as "Due from Hertz affiliate" and "Due to Hertz
affiliate" to report these amounts as "Investment in subsidiaries, net" or "The Hertz Corporation and Subsidiaries stockholder's equity." Also, we have revised certain tax assets and liabilities
between the Parent, Guarantor Subsidiaries and Non-Guarantor Subsidiaries as of December 31, 2008. We previously reported "Total assets" of $10,495.0 million,
$4,638.7 million and $13,669.3 million and "Total equity" of $1,441.7 million, $1,902.8 million and $2,191.2 million of Parent, Guarantor Subsidiaries and
Non-Guarantor Subsidiaries, respectively, as of December 31, 2008. There was no impact to The Hertz Corporation's Consolidated Balance Sheet or Statement of Cash Flows, nor was
there any covenant default under our various debt agreements. Management has concluded that this footnote revision is not material to our previously issued consolidated financial statements.

153

---





THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2009

(In Thousands of Dollars)

Parent
(The Hertz
Corporation)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

The Hertz
Corporation &
SubsidiariesASSETSCash and cash equivalents

$
108,522

$
6,069

$
870,876

$


$
985,467Restricted cash and cash equivalents


36,024


7,955


321,180





365,159Receivables, less allowance for doubtful accounts


206,702


134,996


987,949





1,329,647Due from Hertz affiliate


796,408


40,421


293,653


(1,130,482
)

Inventories, at lower cost or market


17,908


35,717


39,790





93,415Prepaid expenses and other assets


1,518,906


7,166


124,892


(1,360,974
)

289,990Revenue earning equipment, net


89,451


1,355,727


7,406,407





8,851,585Property and equipment, net


730,861


190,993


266,275





1,188,129Investment in subsidiaries, net


4,512,577


41,834





(4,554,411
)

Other intangible assets, net


135,011


2,350,893


111,778





2,597,682Goodwill


71,835


7,510


216,005





295,350Total assets

$
8,224,205

$
4,179,281

$
10,638,805

$
(7,045,867
)
$
15,996,424LIABILITIES AND EQUITYDue to Hertz affiliate

$
341,644

$
345,943

$
450,466

$
(1,130,484
)
$
7,569Accounts payable


236,169


47,427


375,075





658,671Accrued liabilities


590,921


26,595


405,242





1,022,758Accrued taxes


51,457


151,745


147,213


(224,609
)

125,806Debt


4,442,100


180


5,554,734





9,997,014Public liability and property damage


105,134


18,455


154,239





277,828Deferred taxes on income





1,314,802


1,254,268


(1,136,365
)

1,432,705Total liabilities


5,767,425


1,905,147


8,341,237


(2,491,458
)

13,522,351Equity:The Hertz Corporation and Subsidiaries stockholder's equity


2,456,780


2,274,134


2,280,275


(4,554,409
)

2,456,780Noncontrolling interest








17,293





17,293Total equity


2,456,780


2,274,134


2,297,568


(4,554,409
)

2,474,073Total liabilities and equity

$
8,224,205

$
4,179,281

$
10,638,805

$
(7,045,867
)
$
15,996,424


154

---



THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2008

(In Thousands of Dollars)

Parent
(The Hertz
Corporation)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

The Hertz
Corporation &
SubsidiariesASSETSCash and cash equivalents

$
25,844

$
6,741

$
561,412

$


$
593,997Restricted cash and cash equivalents


1,577


35,422


694,374





731,373Receivables, less allowance for doubtful accounts


230,394


190,758


1,490,152





1,911,304Due from Hertz affiliate


930,589


38,927


377,524


(1,347,040
)

Inventories, at lower cost or market


15,528


44,346


36,313





96,187Prepaid expenses and other assets


1,198,329


7,172


122,628


(1,041,419
)

286,710Revenue earning equipment, net


84,185


1,670,217


6,937,136





8,691,538Property and equipment, net


754,419


222,341


277,800





1,254,560Investment in subsidiaries, net


4,160,625


47,691





(4,208,316
)

Other intangible assets, net


149,448


2,351,260


120,878





2,621,586Goodwill


71,298





192,763





264,061Total assets

$
7,622,236

$
4,614,875

$
10,810,980

$
(6,596,775
)
$
16,451,316LIABILITIES AND EQUITYDue to Hertz affiliate

$
431,206

$
740,227

$
190,362

$
(1,347,040
)
$
14,755Accounts payable


324,684


62,315


544,337





931,336Accrued liabilities


584,630


28,176


525,040





1,137,846Accrued taxes


67,557


126,016


417,736


(482,957
)

128,352Debt


4,650,838


254


6,321,205





10,972,297Public liability and property damage


121,644


18,051


171,657





311,352Deferred taxes on income





1,371,634


682,865


(558,462
)

1,496,037Total liabilities


6,180,559


2,346,673


8,853,202


(2,388,459
)

14,991,975Equity:The Hertz Corporation and Subsidiaries stockholder's equity


1,441,677


2,268,202


1,940,114


(4,208,316
)

1,441,677Noncontrolling interest








17,664





17,664Total equity


1,441,677


2,268,202


1,957,778


(4,208,316
)

1,459,341Total liabilities and equity

$
7,622,236

$
4,614,875

$
10,810,980

$
(6,596,775
)
$
16,451,316


155

---





THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Year Ended December 31, 2009

(In Thousands of Dollars)

Parent
(The Hertz
Corporation)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

The Hertz
Corporation &
SubsidiariesTotal revenues

$
3,694,986

$
807,068

$
4,773,473

$
(2,174,020
)
$
7,101,507Expenses:Direct operating


2,081,153


485,233


1,517,790





4,084,176Depreciation of revenue earning equipment


1,896,687


253,518


1,955,173


(2,174,020
)

1,931,358Selling, general and administrative


284,082


80,518


276,403





641,003Interest expense


291,075


31,211


331,375





653,661Interest and other income, net


(48,900
)

167


(15,704
)




(64,437
)Total expenses


4,504,097


850,647


4,065,037


(2,174,020
)

7,245,761Income (loss) before income taxes, noncontrolling interest and equity in earnings (losses) of subsidiaries


(809,111
)

(43,579
)

708,436





(144,254
)Provision (benefit) for taxes on income


326,149


21,656


(299,407
)




48,398Net income (loss)


(482,962
)

(21,923
)

409,029





(95,856
)Noncontrolling interest








(14,679
)




(14,679
)Equity in earnings (losses) of subsidiaries (net of tax)


372,427


(4,161
)




(368,266
)

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

$
(110,535
)
$
(26,084
)
$
394,350

$
(368,266
)
$
(110,535
)


156

---



THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Year Ended December 31, 2008

(In Thousands of Dollars)

Parent
(The Hertz
Corporation)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

The Hertz
Corporation &
SubsidiariesTotal revenues

$
4,153,298

$
1,151,322

$
5,802,465

$
(2,582,030
)
$
8,525,055Expenses:Direct operating


2,427,023


648,375


1,854,620





4,930,018Depreciation of revenue earning equipment


2,252,428


248,157


2,275,609


(2,582,030
)

2,194,164Selling, general and administrative


316,917


112,354


340,368





769,639Interest expense


315,960


66,300


488,230





870,490Interest and other income, net


(2,958
)

(1,052
)

(20,751
)




(24,761
)Impairment charges





956,096


212,804





1,168,900Total expenses


5,309,370


2,030,230


5,150,880


(2,582,030
)

9,908,450Income (loss) before income taxes, noncontrolling interest and equity in earnings (losses) of subsidiaries


(1,156,072
)

(878,908
)

651,585





(1,383,395
)Provision (benefit) for taxes on income


429,196


142,124


(373,663
)




197,657Net income (loss)


(726,876
)

(736,784
)

277,922





(1,185,738
)Noncontrolling interest








(20,786
)




(20,786
)Equity in earnings (losses) of subsidiaries (net of tax)


(479,648
)

(9,775
)




489,423


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

$
(1,206,524
)
$
(746,559
)
$
257,136

$
489,423

$
(1,206,524
)


157

---



THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Year Ended December 31, 2007

(In Thousands of Dollars)

Parent
(The Hertz
Corporation)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

The Hertz
Corporation &
SubsidiariesTotal revenues

$
4,385,027

$
1,283,645

$
5,312,078

$
(2,295,119
)
$
8,685,631Expenses:Direct operating


2,392,525


614,621


1,637,002





4,644,148Depreciation of revenue earning equipment


2,245,753


225,137


1,827,589


(2,295,119
)

2,003,360Selling, general and administrative


330,896


110,602


331,975





773,473Interest expense


334,555


106,426


476,026





917,007Interest and other income, net


(3,847
)

(1,072
)

(36,294
)




(41,213
)Total expenses


5,299,882


1,055,714


4,236,298


(2,295,119
)

8,296,775Income (loss) before income taxes, noncontrolling interest and equity in earnings (losses) of subsidiaries


(914,855
)

227,931


1,075,780





388,856Provision (benefit) for taxes on income


363,386


(81,942
)

(383,785
)




(102,341
)Net income (loss)


(551,469
)

145,989


691,995





286,515Noncontrolling interest








(19,690
)




(19,690
)Equity in earnings (losses) of subsidiaries (net of tax)


818,294


27,757





(846,051
)

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

$
266,825

$
173,746

$
672,305

$
(846,051
)
$
266,825


158

---





THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2009
(In Thousands of Dollars)

Parent
(The Hertz
Corporation)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

The Hertz
Corporation &
SubsidiariesNet cash provided by (used in) operating activities

$
(734,652
)
$
(100,217
)
$
2,972,315

$
(353,902
)
$
1,783,544Cash flows from investing activities:Net change in restricted cash and cash equivalents


(34,447
)

27,468


375,700





368,721Revenue earning equipment expenditures


(85,116
)

(25,499
)

(7,416,702
)




(7,527,317
)Proceeds from disposal of revenue earning equipment


67,727


101,495


5,855,718





6,024,940Property and equipment expenditures


(52,503
)

(9,863
)

(38,335
)




(100,701
)Proceeds from disposal of property and equipment


(3,076
)

8,380


18,393





23,697Acquisitions, net of cash acquired


(40,333
)




(36,086
)




(76,419
)Purchase of short-term investments, net


(3,184
)

(94
)

(214
)




(3,492
)Capital contributions to subsidiaries


(833,411
)







833,411


Return of capital from subsidiaries


1,483,281








(1,483,281
)

Other investing activities








828





828Net cash provided by (used in) investing activities


498,938


101,887


(1,240,698
)

(649,870
)

(1,289,743
)Cash flows from financing activities:Proceeds from issuance of long-term debt


4,703





1,196,193





1,200,896Repayment of long-term debt


(189,810
)

(74
)

(959,992
)




(1,149,876
)Short-term borrowings:Proceeds








364,065





364,065Repayments








(351,773
)




(351,773
)Proceeds (repayments) under the revolving lines of credit, net


(437,976
)

(2,268
)

(685,855
)




(1,126,099
)Capital contributions received from parent








833,411


(833,411
)

Payment of dividends and return of capital








(1,837,183
)

1,837,183


Distributions to noncontrolling interest








(15,050
)




(15,050
)Capital invested by parent


990,117











990,117Proceeds from employee stock purchase plan


2,400











2,400Loan from Hertz affiliate


(7,186
)










(7,186
)Payment of financing costs


(43,856
)




(1,161
)




(45,017
)Net cash provided by (used in) financing activities


318,392


(2,342
)

(1,457,345
)

1,003,772


(137,523
)Effect of foreign exchange rate changes on cash and cash equivalents








35,192





35,192Net increase (decrease) in cash and cash equivalents during the period


82,678


(672
)

309,464





391,470Cash and cash equivalents at beginning of period


25,844


6,741


561,412





593,997Cash and cash equivalents at end of period

$
108,522

$
6,069

$
870,876

$


$
985,467


159

---



THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2008
(In Thousands of Dollars)

Parent
(The Hertz
Corporation)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

The Hertz
Corporation &
SubsidiariesNet cash provided by (used in) operating activities

$
(1,501,317
)
$
(45,658
)
$
4,596,638

$
(504,615
)
$
2,545,048Cash flows from investing activities:Net change in restricted cash and cash equivalents








(71,836
)




(71,836
)Revenue earning equipment expenditures


(99,013
)

(87,719
)

(9,964,250
)




(10,150,982
)Proceeds from disposal of revenue earning equipment


80,716


189,125


8,241,375





8,511,216Property and equipment expenditures


(81,343
)

(28,509
)

(83,914
)




(193,766
)Proceeds from disposal of property and equipment


29,156


2,563


36,796





68,515Acquisitions, net of cash acquired


(14,050
)

(17,616
)

(39,254
)




(70,920
)Return of capital from subsidiaries


1,294,235








(1,294,235
)

Other investing activities








(488
)




(488
)Net cash provided by (used in) investing activities


1,209,701


57,844


(1,881,571
)

(1,294,235
)

(1,908,261
)Cash flows from financing activities:Proceeds from issuance of long-term debt


11,408





11,157





22,565Repayment of long-term debt


(65,246
)

(69
)

(795,200
)




(860,515
)Short-term borrowings:Proceeds








396,679





396,679Repayments








(374,333
)




(374,333
)Proceeds (repayments) under the revolving lines of credit, net


279,300


(23,353
)

(57,186
)




198,761Payment of financing costs


(10,090
)




(51,133
)




(61,223
)Loan with Hertz affiliate


6,273











6,273Payment of dividends and return of capital








(1,798,850
)

1,798,850


Distributions to noncontrolling interest








(24,150
)




(24,150
)Net cash provided by (used in) financing activities


221,645


(23,422
)

(2,693,016
)

1,798,850


(695,943
)Effect of foreign exchange rate changes on cash and cash equivalents








(76,540
)




(76,540
)Net increase (decrease) in cash and cash equivalents during the period


(69,971
)

(11,236
)

(54,489
)




(135,696
)Cash and cash equivalents at beginning of period


95,815


17,977


615,901





729,693Cash and cash equivalents at end of period

$
25,844

$
6,741

$
561,412

$


$
593,997


160

---



THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2007
(In Thousands of Dollars)

Parent
(The Hertz
Corporation)

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

The Hertz
Corporation &
SubsidiariesNet cash provided by (used in) operating activities

$
(185,989
)
$
188,710

$
3,285,727

$
(479,685
)
$
2,808,763Cash flows from investing activities:Net change in restricted cash and cash equivalents








(105,856
)




(105,856
)Revenue earning equipment expenditures


(145,830
)

(402,814
)

(10,609,119
)




(11,157,763
)Proceeds from disposal of revenue earning equipment


127,218


174,515


9,020,090





9,321,823Property and equipment expenditures


(81,395
)

(35,524
)

(73,035
)




(189,954
)Proceeds from disposal of property and equipment


32,484


10,983


42,359





85,826Acquisitions, net of cash acquired


(2,573
)




(9,941
)




(12,514
)Return of capital from subsidiaries


742,840








(742,840
)

Other investing activities








(362
)




(362
)Net cash provided by (used in) investing activities


672,744


(252,840
)

(1,735,864
)

(742,840
)

(2,058,800
)Cash flows from financing activities:Proceeds from issuance of long-term debt


774


341


8,788





9,903Repayment of long-term debt


(729,966
)

(78
)

(266,159
)




(996,203
)Short-term borrowings:Proceeds








695,000





695,000Repayments








(695,000
)




(695,000
)Proceeds (repayments) under the revolving lines of credit, net


130,141


16,761


148,327





295,229Payment of financing costs


(13,080
)




(26,815
)




(39,895
)Loan with Hertz affiliate


8,482











8,482Payment of dividends and return of capital








(1,222,525
)

1,222,525


Distributions to noncontrolling interest








(13,475
)




(13,475
)Net cash provided by (used in) financing activities


(603,649
)

17,024


(1,371,859
)

1,222,525


(735,959
)Effect of foreign exchange rate changes on cash and cash equivalents








43,858





43,858Net increase (decrease) in cash and cash equivalents during the period


(116,894
)

(47,106
)

221,862





57,862Cash and cash equivalents at beginning of period


212,709


65,083


394,039





671,831Cash and cash equivalents at end of period

$
95,815

$
17,977

$
615,901

$


$
729,693


161

---





SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

THE HERTZ CORPORATION

PARENT COMPANY BALANCE SHEETS

(In Thousands of Dollars)

December 31,2009

2008ASSETSCash and cash equivalents

$
108,522

$
25,844Restricted cash and cash equivalents


36,024


1,577Receivables, less allowance for doubtful accounts


206,702


230,394Due from Hertz affiliates


796,408


930,589Inventories, at lower of cost or market


17,908


15,528Prepaid expenses and other assets


1,518,906


1,198,329Revenue earning equipment, net


89,451


84,185Property and equipment, net


730,861


754,419Investments in subsidiaries, net


4,512,577


4,160,625Other intangible assets, net


135,011


149,448Goodwill


71,835


71,298Total assets

$
8,224,205

$
7,622,236LIABILITIES AND STOCKHOLDER'S EQUITYDue to Hertz affiliates

$
341,644

$
431,206Accounts payable


236,169


324,684Accrued liabilities


590,921


584,630Accrued taxes


51,457


67,557Debt


4,442,100


4,650,838Public liability and property damage


105,134


121,644Total Liabilities


5,767,425


6,180,559Stockholder's equity:Common Stock, $0.01 par value, 3,000 shares authorized, 100 shares issued and outstanding





Additional paid-in capital


3,410,518


2,381,684Accumulated deficit


(950,407
)

(839,872
)Accumulated other comprehensive loss


(3,331
)

(100,135
)Total stockholder's equity


2,456,780


1,441,677Total liabilities and stockholder's equity

$
8,224,205

$
7,622,236


The accompanying notes are an integral part of these financial statements.

162

---



SCHEDULE I (Continued)

THE HERTZ CORPORATION

PARENT COMPANY STATEMENTS OF OPERATIONS

(In Thousands of Dollars)

Years ended December 31,2009

2008

2007Total revenues

$
3,694,986

$
4,153,298

$
4,385,027Expenses:Direct operating


2,081,153


2,427,023


2,392,525Depreciation of revenue earning equipment


1,896,687


2,252,428


2,245,753Selling, general and administrative


284,082


316,917


330,896Interest, net of interest income


291,075


315,960


334,555Interest and other income, net


(48,900
)

(2,958
)

(3,847
)Total expenses


4,504,097


5,309,370


5,299,882Loss before income taxes and noncontrolling interest


(809,111
)

(1,156,072
)

(914,855
)Benefit for taxes on income


326,149


429,196


363,386Equity in earnings (losses) of subsidiaries (net of tax)


372,427


(479,648
)

818,294Net income (loss)

$
(110,535
)
$
(1,206,524
)
$
266,825


The accompanying notes are an integral part of these financial statements.

163

---





SCHEDULE I (Continued)

THE HERTZ CORPORATION

PARENT COMPANY STATEMENTS OF STOCKHOLDER'S EQUITY

(In Thousands of Dollars, except share data)

Number
of Shares

Common
Stock

Additional
Paid-In
Capital

Retained
Earnings
(Deficit)

Accumulated
Other
Comprehensive
Income
(Loss)

Total
Stockholder's
EquityBalance at:December 31, 2006


100

$


$
2,320,452

$
103,471

$
94,528

$
2,518,451Net income











266,825





266,825Change in fair value of derivatives qualifying as cash flow hedges, net of tax of $31,294














(49,142
)

(49,142
)Translation adjustment changes














126,279


126,279Unrealized holding losses on securities, net of tax of $7














(51
)

(51
)Unrealized loss on Euro-denominated debt, net of tax of $13,611














(20,729
)

(20,729
)Defined benefit pension plans:Prior service cost from plan curtailment














20


20Amortization or settlement recognition of net loss














4,048


4,048Net gain arising during the period














21,914


21,914Income tax related to defined pension plans














(6,360
)

(6,360
)Defined benefit pension plans, net














19,622


19,622Total Comprehensive Income

















342,804Stock-based employee compensation charges








32,939








32,939Cumulative effect of the adoption of FIN 48











(3,644
)




(3,644
)Hertz Holdings common and phantom shares issued to Directors








520








520December 31, 2007


100





2,353,911


366,652


170,507


2,891,070Net loss











(1,206,524
)




(1,206,524
)Change in fair value of derivatives qualifying as cash flow hedges, net of tax of $28,429














(44,012
)

(44,012
)Translation adjustment changes














(163,359
)

(163,359
)Unrealized holding gains on securities, net of tax of $6














120


120Unrealized gain on Euro-denominated debt, net of tax of $5,665














12,116


12,116Defined benefit pension plans:Amortization or settlement recognition of net loss














505


505Net loss arising during the period














(114,279
)

(114,279
)Income tax related to defined pension plans














38,267


38,267Defined benefit pension plans, net














(75,507
)

(75,507
)Total Comprehensive Loss

















(1,477,166
)Stock-based employee compensation charges, net of tax of $643








27,380








27,380Hertz Holdings common and phantom shares issued to Directors








393








393December 31, 2008


100





2,381,684


(839,872
)

(100,135
)

1,441,677Net loss











(110,535
)




(110,535
)Change in fair value of derivatives qualifying as cash flow hedges, net of tax of $25,555














39,852


39,852Translation adjustment changes














77,528


77,528Unrealized holding gains on securities, net of tax of $0














(20
)

(20
)Unrealized gain on Euro-denominated debt, net of tax of $5,182














(3,509
)

(3,509
)Defined benefit pension plans:Amortization or settlement recognition of net loss














1,132


1,132Net loss arising during the period














(31,864
)

(31,864
)Income tax related to defined pension plans














13,685


13,685Defined benefit pension plans, net














(17,047
)

(17,047
)Total Comprehensive Loss

















(13,731
)Stock-based employee compensation charges, net of tax of $0








35,464








35,464Capital invested by parent








990,117








990,117Proceeds from employee stock purchase plan








2,823








2,823Hertz Holdings common and phantom shares issued to Directors








430








430December 31, 2009


100

$


$
3,410,518

$
(950,407
)
$
(3,331
)
$
2,456,780


The accompanying notes are an integral part of these financial statements.

164

---





SCHEDULE I (Continued)

THE HERTZ CORPORATION

PARENT COMPANY STATEMENTS OF CASH FLOWS

(In Thousands of Dollars)

Years ended December 31,2009

2008

2007Cash flows from operating activities:Net income (loss)

$
(110,535
)
$
(1,206,524
)
$
266,825Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities


(624,117
)

(294,793
)

(452,814
)Net cash provided by (used in) operating activities


(734,652
)

(1,501,317
)

(185,989
)Cash flows from investing activities:Net change in restricted cash and cash equivalents


(34,447
)




Revenue earning equipment expenditures


(85,116
)

(99,013
)

(145,830
)Proceeds from disposal of revenue earning equipment


67,727


80,716


127,218Property and equipment expenditures


(52,503
)

(81,343
)

(81,395
)Proceeds from disposal of property and equipment


(3,076
)

29,156


32,484Acquisitions, net of cash acquired


(40,333
)

(14,050
)

(2,573
)Capital contributions to subsidiaries


(833,411
)




Return of capital from subsidiaries


1,483,281


1,294,235


742,840Purchase of short-term investments, net


(3,184
)




Net cash used in investing activities


498,938


1,209,701


672,744Cash flows from financing activities:Proceeds from issuance of long-term debt


4,703


11,408


774Repayment of long-term debt


(189,810
)

(65,246
)

(729,966
)Short-term borrowings:Proceeds (repayments) under the revolving lines of credit, net


(437,976
)

279,300


130,141Capital invested by parent


990,117





Proceeds from employee stock purchase plan


2,400





Loan with Hertz affiliate


(7,186
)

6,273


8,482Payment of financing costs


(43,856
)

(10,090
)

(13,080
)Net cash provided by (used in) financing activities


318,392


221,645


(603,649
)Net increase (decrease) in cash and cash equivalents during the period


82,678


(69,971
)

(116,894
)Cash and cash equivalents at beginning of period


25,844


95,815


212,709Cash and cash equivalents at end of period

$
108,522

$
25,844

$
95,815


The accompanying notes are an integral part of these financial statements.

165

---



SCHEDULE I (Continued)

THE HERTZ CORPORATION

NOTES TO PARENT COMPANY FINANCIAL STATEMENTS

Note 1Background and Basis of Presentation

The accompanying condensed financial statements include only the accounts of The Hertz Corporation, or the "Company." Investments in the Company's
subsidiaries are accounted for under the equity method. These parent company financial statements have been prepared in accordance with Rule 12-04 of
Regulation S-X, as restricted net assets of the Company's subsidiaries exceed 25% of the Company's consolidated net assets as of December 31, 2009.

Certain
information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been
condensed or omitted since this information is included in the Company's annual consolidated financial statements included in this Annual Report under the caption "Item 8Financial
Statements and Supplementary Data."

Note 2Commitments and Contingencies

The following table details the contractual cash obligations of the Company for debt, related interest payable and ASC 740-10 as of
December 31, 2009 (in thousands of dollars):

Total

2010

2011

2012

2013

2014

ThereafterDebt

$
4,442,100

$
178,297

$
122,281

$
1,521,534

$
766

$
2,075,202

$
544,020Interest


1,581,141


321,595


312,462


301,841


262,121


249,040


134,082ASC 740-10 liability and interest


7,060


7,060














Total

$
6,030,301

$
506,952

$
434,743

$
1,823,375

$
262,887

$
2,324,242

$
678,102


The following table details the contractual cash obligations of the Company for operating leases and purchase obligations as of December 31, 2009 (in
thousands of dollars):

Total

Less than
1 Year

1-3
Years

3-5
Years

More than
5 YearsOperating leases and concession agreements

$
1,172,478

$
251,912

$
391,681

$
216,150

$
312,735Purchase obligations


4,048,900


4,015,000


32,600


1,300


Total

$
5,221,378

$
4,266,912

$
424,281

$
217,450

$
312,735


Note 3Distribution of Equity

The following table details the distribution of equity received by the Company from its subsidiaries during 2009, 2008 and 2007 (in thousands of
dollars):

2009

2008

2007Distribution of equity

$
1,837,183

$
1,798,850

$
1,222,525


166

---





SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

THE HERTZ CORPORATION AND SUBSIDIARIES

(In Thousands of Dollars)

AdditionsBalance at
Beginning of
Period

Charged to
Expense

Translation
Adjustments

Deductions

Balance at
End of PeriodAllowance for doubtful accounts:Year ended December 31, 2009

$
16,572

$
27,951

$
1,823

$
25,078
(a)
$
21,268Year ended December 31, 2008

$
12,147

$
31,068

$
(554
)
$
26,089
(a)
$
16,572Year ended December 31, 2007

$
3,321

$
13,874

$
877

$
5,925
(a)
$
12,147Tax valuation allowances:Year ended December 31, 2009

$
123,210

$
44,602

$


$


$
167,812Year ended December 31, 2008

$
69,879

$
53,331

$


$


$
123,210Year ended December 31, 2007

$
70,102

$
(223
)
$


$


$
69,879


(a)Amounts
written off, net of recoveries.


167

---





ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND                   FINANCIAL
DISCLOSURE

None.

ITEM 9A.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in company
reports filed or submitted under the Securities Exchange Act of 1934, or the "Exchange Act," is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and
forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed under the Exchange
Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

An
evaluation of the effectiveness of our disclosure controls and procedures was performed under the supervision of, and with the participation of, management, including our Chief Executive Officer
and Chief Financial Officer, as of the end of the period covered by this Annual Report. Based upon this evaluation, our management, including our Chief Executive Officer and Chief Financial Officer,
concluded that our disclosure controls and procedures are effective.

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, 2009. The assessment was based on criteria established in the frameworkInternal ControlIntegrated
Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that our internal control over
financial reporting was effective as of December 31, 2009. PricewaterhouseCoopers LLP, our independent registered public accounting firm, has issued an attestation report on our internal
control over financial reporting. Their report is included in this Annual Report under the caption "Item 8Financial Statements and Supplementary Data."

Changes in Internal Control Over Financial Reporting

No changes in our internal control over financial reporting occurred during the fiscal quarter ended December 31, 2009 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.    OTHER INFORMATION

None.

168

---





PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Omitted pursuant to General Instruction I to the Form 10-K.

ITEM 11.    EXECUTIVE COMPENSATION

Omitted pursuant to General Instruction I to the Form 10-K.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                     AND
RELATED STOCKHOLDER MATTERS

Omitted pursuant to General Instruction I to the Form 10-K.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Omitted pursuant to General Instruction I to the Form 10-K.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

Fees

PricewaterhouseCoopers LLP, or "PwC," served as our independent registered public accounting firm, or "independent auditor" for the fiscal
years ended December 31, 2009 and 2008. All fees for services rendered by PwC in 2009 and 2008 were approved by our Audit Committee. PwC's fees for services rendered to us for the past two
fiscal years are set forth in the table below. We have determined that the provision of these services is compatible with maintaining the independence of our independent auditors. The aggregate fees
billed by PwC to Hertz and Hertz Holdings were as follows (in thousands of dollars):

2009

2008Fees:Audit

$
5,989

$
6,912Audit-related


500


518Tax


573


718All other


153


128Total

$
7,215

$
8,276


Audit fees were for services in connection with the audit of the consolidated financial statements included in our Annual Report on
Form 10-K, reviews of the condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q, attestation of the effectiveness of our
internal controls over financial reporting, statutory audits and providing comfort letters in connection with our funding transactions in 2009. Audit-related fees were for services in connection with
due diligence, assurance services and employee benefit plan audits. Tax fees related to tax compliance, preparation of tax returns and tax planning. All other fees primarily related to assistance
provided with maintenance of an operations website.

Our
Audit Committee's charter requires the Audit Committee to pre-approve all audit and permitted non-audit services to be performed by the our independent registered public
accounting firm; however, the Audit Committee is permitted to delegate pre-approval authority to a subcommittee consisting of one or more Audit Committee members who are independent
directors, and who must then provide a report to the full Audit Committee at its next scheduled meeting. All audit and non-audit fees were pre-approved by the Audit Committee
in 2009.

169

---





PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this Annual Report:

Page(a)

1.

Financial Statements:Our financial statements filed herewith are set forth in Part II, Item 8 of this Annual Report as follows:The Hertz Corporation and SubsidiariesReport of Independent Registered Public Accounting Firm

86Consolidated Balance Sheets

87Consolidated Statements of Operations

88Consolidated Statements of Changes in Equity

89Consolidated Statements of Cash Flows

90Notes to Consolidated Financial Statements

912.

Financial Statement Schedules:Our financial statement schedules filed herewith are set forth in Part II, Item 8 of this Annual Report as follows:The Hertz CorporationSchedule ICondensed Financial Information of Registrant

162The Hertz Corporation and SubsidiariesSchedule IIValuation and Qualifying Accounts

1673.

Exhibits:


Exhibit
Number

Description3.1

Amended and Restated Certificate of Incorporation of Hertz Global Holdings, Inc.**3.2

Amended and Restated By-Laws of Hertz Global Holdings, Inc., effective August 12, 2009 (Incorporated by reference to Exhibit 3.1.1 to the Quarterly Report on Form 10-Q of Hertz Global Holdings,
 Inc., as filed on November 6, 2009)4.1.1

Indenture, dated as of December 21, 2005, by and between CCMG Acquisition Corporation, as Issuer, the Subsidiary Guarantors from time to time parties thereto, and Wells Fargo Bank, National Association, as
Trustee, governing the U.S. Dollar 8.875% Senior Notes due 2014 and the Euro 7.875% Senior Notes due 2014*4.1.2

Merger Supplemental Indenture, dated as of December 21, 2005, by and between The Hertz Corporation and Wells Fargo Bank, National Association, as Trustee, relating to the U.S. Dollar 8.875% Senior Notes due 2014
and the Euro 7.875% Senior Notes due 2014*4.1.3

Supplemental Indenture in Respect of Subsidiary Guarantee, dated as of December 21, 2005, by and between The Hertz Corporation, the Subsidiary Guarantors named therein, and Wells Fargo Bank, National Association,
as Trustee, relating to the U.S. Dollar 8.875% Senior Notes due 2014 and the Euro 7.875% Senior Notes due 2014*4.1.4

Third Supplemental Indenture, dated as of July 7, 2006, by and between The Hertz Corporation, the Subsidiary Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee, relating to the U.S.
Dollar 8.875% Senior Notes due 2014 and the Euro 7.875% Senior Notes due 2014 (Incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K of The Hertz Corporation, as filed on July 7, 2006.)


170

---



Exhibit
Number

Description4.1.5

Fourth Supplemental Indenture, dated as of October 15, 2007, among Simply Wheelz LLC, The Hertz Corporation, the Existing Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee,
relating to the U.S. Dollar 8.875% Senior Notes due 2014 and the Euro 7.875% Senior Notes due 2014 (Incorporated by reference to Exhibit 4.1.4 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on
November 14, 2007.)4.2.1

Indenture, dated as of December 21, 2005, by and between CCMG Acquisition Corporation, as Issuer, the Subsidiary Guarantors from time to time parties thereto, and Wells Fargo Bank, National Association, as
Trustee, governing the 10.5% Senior Subordinated Notes due 2016*4.2.2

Merger Supplemental Indenture, dated as of December 21, 2005, by and between The Hertz Corporation and Wells Fargo Bank, National Association, as Trustee, relating to the 10.5% Senior Subordinated Notes due
2016*4.2.3

Supplemental Indenture in Respect of Subsidiary Guarantee, dated as of December 21, 2005, by and between The Hertz Corporation, the Subsidiary Guarantors named therein, and Wells Fargo Bank, National Association,
as Trustee, relating to the 10.5% Senior Subordinated Notes due 2016*4.2.4

Third Supplemental Indenture, dated as of July 7, 2006, by and between The Hertz Corporation, the Subsidiary Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee, relating to the 10.5%
Senior Subordinated Notes due 2016 (Incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K of The Hertz Corporation, as filed on July 7, 2006.)4.2.5

Fourth Supplemental Indenture, dated as of October 15, 2007, among Simply Wheelz LLC, The Hertz Corporation, the Existing Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee,
relating to the 10.5% Senior Subordinated Notes due 2016 (Incorporated by reference to Exhibit 4.1.5 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)4.3.1

Exchange and Registration Rights Agreement, dated as of December 21, 2005, by and between CCMG Acquisition Corporation, Deutsche Bank Securities Inc. and the other financial institutions named therein,
relating to the 8.875% Senior Notes due 2014 and the 7.875% Senior Notes due 2014*4.3.2

Joinder Agreement to the Exchange and Registration Rights Agreement, dated as of December 21, 2005, of The Hertz Corporation relating to the 8.875% Senior Notes due 2014 and the 7.875% Senior Notes due
2014*4.3.3

Joinder Agreement to the Exchange and Registration Rights Agreement, dated as of December 21, 2005, of the Subsidiary Guarantors named therein, relating to the 8.875% Senior Notes due 2014 and the 7.875% Senior
Notes due 2014*4.4.1

Exchange and Registration Rights Agreement, dated as of December 21, 2005, by and between CCMG Acquisition Corporation, Deutsche Bank Securities Inc. and the other financial institutions named therein,
relating to the 10.5% Senior Subordinated Notes due 2016*4.4.2

Joinder Agreement to the Exchange and Registration Rights Agreement, dated as of December 21, 2005, of The Hertz Corporation, relating to the 10.5% Senior Subordinated Notes due 2016*


171

---



Exhibit
Number

Description4.4.3

Joinder Agreement to the Exchange and Registration Rights Agreement, dated as of December 21, 2005, of the Subsidiary Guarantors named therein, relating to the 10.5% Senior Subordinated Notes due 2016*4.5.1

Senior Bridge Facilities Agreement, dated as of December 21, 2005, by and between Hertz International, Ltd., certain of its subsidiaries, Hertz Europe Limited, as Coordinator, BNP Paribas and The Royal Bank
of Scotland plc, as Mandated Lead Arrangers, Calyon, as Co-Arranger, BNP Paribas, The Royal Bank of Scotland plc, and Calyon, as Joint Bookrunners, BNP Paribas, as Facility Agent, BNP Paribas, as Security Agent, BNP Paribas, as Global
Coordinator, and the financial institutions named therein*4.5.1.1

Amendment and Restatement Agreement, dated as of March 21, 2007, in respect of the Senior Bridge Facilities Agreement, dated as of December 21, 2005, by and between Hertz International, Ltd., certain of
its subsidiaries, Hertz Europe Limited, as Coordinator, BNP Paribas and The Royal Bank of Scotland plc, as Mandated Lead Arrangers, Calyon, as Co-Arranger, BNP Paribas, The Royal Bank of Scotland plc, and Calyon, as Joint Bookrunners, BNP
Paribas, as Facility Agent, BNP Paribas, as Security Agent, BNP Paribas, as Global Coordinator, and the financial institutions named therein (Incorporated by reference to Exhibit 4.5.1.1 to the Annual Report on Form 10-K of Hertz Global
Holdings, Inc., as filed on February 29, 2008)4.5.1.2

Amendment Agreement, dated as of December 21, 2007, in respect of the Senior Bridge Facilities Agreement, dated as of December 21, 2005, by and between Hertz International, Ltd., certain of its
subsidiaries, Hertz Europe Limited, as Coordinator, BNP Paribas and The Royal Bank of Scotland plc, as Mandated Lead Arrangers, Calyon, as Co-Arranger, BNP Paribas, The Royal Bank of Scotland plc, and Calyon, as Joint Bookrunners, BNP
Paribas, as Facility Agent, BNP Paribas, as Security Agent, BNP Paribas, as Global Coordinator, and the financial institutions named therein (Incorporated by reference to Exhibit 4.5.1.2 to the Annual Report on Form 10-K of Hertz Global
Holdings, Inc., as filed on February 29, 2008)4.5.1.3

Amendment Agreement, dated as of July 24, 2008, in respect of the Senior Bridge Facilities Agreement, dated as of December 21, 2005, by and between Hertz International, Ltd., certain of its subsidiaries,
 Hertz Europe Limited, as Coordinator, BNP Paribas and The Royal Bank of Scotland plc, as Mandated Lead Arrangers, Calyon, as Co-Arranger, BNP Paribas, The Royal Bank of Scotland plc, and Calyon, as Joint Bookrunners, BNP Paribas, as
Facility Agent, BNP Paribas, as Security Agent, BNP Paribas, as Global Coordinator, and the financial institutions named therein (Incorporated by reference to Exhibit 4.5.1.3 to the Quarterly Report on Form 10-Q of Hertz Global Holdings,
 Inc., as filed on August 8, 2008)4.5.2

Intercreditor Deed, dated as of December 21, 2005, by and between Hertz International, Ltd., as Parent, Hertz Europe Limited, as Coordinator, certain of its subsidiaries, BNP Paribas as A/C Facility Agent
and NZ Facility Agent, BNP Paribas as Security Agent, Banco BNP Paribas Brasil S.A., as Brazilian Facility Agent, BNP Paribas, as Australian Security Trustee, the financial institutions named therein, and The Hertz Corporation*


172

---



Exhibit
Number

Description4.5.2.1

Supplemental Deed, dated as of March 21, 2007, in respect of the Intercreditor Deed, dated as of December 21, 2005, by and between Hertz International, Ltd., as Parent, Hertz Europe Limited, as Coordinator,
certain of its subsidiaries, BNP Paribas as A/C Facility Agent and NZ Facility Agent, BNP Paribas as Security Agent, Banco BNP Paribas Brasil S.A., as Brazilian Facility Agent, BNP Paribas, as Australian Security Trustee, the financial
institutions named therein, and The Hertz Corporation (Incorporated by reference to Exhibit 4.5.2.1 to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as filed on February 29, 2008)4.5.3

Australian Purchaser Charge (Project H)Unlimited, dated as of December 21, 2005, by and between Hertz Australia Pty Limited and HA Funding Pty Limited*4.5.4

Australian Purchaser Charge (Project H)South Australia, dated as of December 21, 2005, by and between Hertz Australia Pty Limited and HA Funding Pty Limited*4.5.5

Australian Purchaser Charge (Project H)Queensland, dated as of December 21, 2005, by and between Hertz Australia Pty Limited and HA Funding Pty Limited*4.5.6

Australian Share Mortgage of Purchaser Shares (Project H), dated as of December 21, 2005, by and between Hertz Investment (Holdings) Pty Limited and HA Funding Pty Limited*4.5.7

Australian Issuer Charge (Project H), dated as of December 21, 2005, by and between Hertz Note Issuer Pty Limited and HA Funding Pty Limited*4.5.8

Australian Borrower Charge (Project H), dated as of December 20, 2005, by and between HA Funding Pty Limited and the BNP Paribas*4.5.9

Australian Security Trust Deed (Project H), dated as of December 21, 2005, between HA Funding Pty Limited and BNP Paribas*4.5.10

Reserved4.5.11

Reserved4.5.12

Share Pledge Agreement, dated as of December 21, 2005, by and between Hertz Holdings Netherlands B.V., as Pledgor, and BNP Paribas, as Pledgee*4.5.13

Reserved4.5.14

Reserved4.5.15

Reserved4.5.16

Reserved4.5.17

Pledge of a Business as a Going Concern (Acte de Nantissement de Fonds de Commerce), dated as of December 21, 2005, by and between Hertz France, as Pledgor, and BNP Paribas, as Security Agent, and the
beneficiaries described therein (English language version)*4.5.18

Bank Account Pledge Agreement (Acte de Nantissement de Solde de Compte Bancaire), dated as of December 21, 2005, by and between Hertz France, as Pledgor, and BNP Paribas, as Security Agent, and the beneficiaries
described therein (English language version)*


173

---



Exhibit
Number

Description4.5.19

Share Account Pledge Agreement (Acte de Nantissement de Compte d'Instruments Financiers), dated as of December 21, 2005, by and between Hertz France, as Pledgor, BNP Paribas, as Security Agent, Hertz Equipement
France, as Account Holder, BNP Paribas, as Bank Account Holder, and the beneficiaries described therein*4.5.20

Pledge of a Business as a Going Concern (Acte de Nantissement de Fonds de Commerce), dated as of December 21, 2005, by and between Hertz Equipement France, as Pledgor, BNP Paribas, as Security Agent, and the
beneficiaries described therein (English language version)*4.5.21

Bank Account Pledge Agreement (Acte de Nantissement de Solde de Compte Bancaire), dated as of December 21, 2005, by and between Hertz Equipement France, as Pledgor, BNP Paribas, as Security Agent, and the
beneficiaries described therein (English language version)*4.5.22

Master Agreement For Assignment of Receivables (Contrat Cadre de Cession de Creances Professionnelles a Titre de Garantie), dated as of December 21, 2005, by and between Hertz Equipement France, as Assignor, BNP
Paribas, as Security Agent, and the assignees described therein**4.5.23

Pledge of a Business as a Going Concern (Acte de Nantissement de Fonds de Commerce), dated as of December 21, 2005, by and between Equipole Finance Services, as Pledgor, BNP Paribas, as Security Agent, and the
beneficiaries described therein (English language version)*4.5.24

Master Agreement for Assignment of Receivables (Contrat Cadre de Cession de Creances Professionnelles a Titre de Garantie), dated as of December 21, 2005, by and between Equipole Finance Services, as Assignor,
BNP Paribas, as Security Agent, and the assignees described therein*4.5.25

Bank Account Pledge Agreement (Acte de Nantissement de Solde de Compte Bancaire), dated as of December 21, 2005, by and between Equipole Finance Services, as Pledgor, BNP Paribas, as Security Agent, and the
beneficiaries described therein (English language version)*4.5.26

Shares Account Pledge Agreement (Acte de Nantissement de Compte d'Instruments Financiers), dated as of December 21, 2005, by and between Equipole, as Pledgor, BNP Paribas, as Security Agent, Equipole Finance
Services, as Account Holder, BNP Paribas, as Bank Account Holder, and the beneficiaries described therein*4.5.27

Share Account Pledge Agreement (Acte de Nantissement de Compte d'Instruments Financiers), dated as of December 21, 2005, by and between Equipole, as Pledgor, BNP Paribas, as Security Agent, Hertz France, as
Account Holder, BNP Paribas, as Bank Account Holder, and the beneficiaries described therein*4.5.28

Shares Account Pledge Agreement (Acte de Nantissement de Compte d'Instruments Financiers), dated as of December 21, 2005, by and between Equipole, as Pledgor, BNP Paribas, as Security Agent, Hertz Equipement
France, as Account Holder, BNP Paribas, as Bank Account Holder, and the beneficiaries described therein*4.5.29

Account Pledge Agreement, dated as of December 21, 2005, among Hertz Autovermietung GmbH, The Royal Bank of Scotland plc, Calyon, BNP Paribas (Canada) and Indosuez Finance (U.K.) Limited as Pledgees and
BNP Paribas S.A. as Security Agent*


174

---



Exhibit
Number

Description4.5.30

Global Assignment Agreement, dated as of December 21, 2005, between Hertz Autoverrmietung GmbH as assignor and BNP Paribas S.A. as Security Agent and lender (English language version)*4.5.31

Security Transfer of Moveable Assets, dated as of December 21, 2005, between Hertz Autovermietung GmbH as assignor and BNP Paribas S.A. as Security Agent and lender*4.5.32

Share Pledge Agreement, dated as of December 21, 2005, among Equipole S.A. (France), The Royal Bank of Scotland plc, Calyon, BNP Paribas (Canada), Indosuez Finance (U.K.) Limited and BNP
Paribas S.A., as Security Agent*4.5.33

Security Assignment of Receivables, dated as of December 21, 2005, between Hertz Italiana S.p.A. as assignor and BNP Paribas S.A. as Security Agent*4.5.34

Pledge Agreement over the Balance of Bank Account, dated as of December 21, 2005, between Hertz Italiana S.p.A. as Pledgor and BNP Paribas S.A. as Pledgee and Security Agent*4.5.35

Pledge Agreement over the Balance of Bank Account, dated as of December 21, 2005, between Hertz Italiana S.p.A., as Pledgor, and BNP Paribas S.A., as Pledgee and Security Agent*4.5.36

Pledge Agreement over Hertz Italiana S.p.A. shares, dated as of December 21, 2005, between Hertz Holding South Europe S.r.l as Pledgor and BNP Paribas S.A. as Pledgee and Security Agent*4.5.37

Deed of Non-Possessory Pledge of Movables, dated as of December 21, 2005, between Stuurgroep Holland B.V., as Pledgor, and BNS Automobile Funding B.V. and BNP Paribas as Security Agent, as
Pledgees*4.5.38

Deed of Disclosed Pledge of Receivables, dated as of December 21, 2005, between Stuurgroep Holland B.V., as Pledgor, and BNS Automobile Funding B.V. and BNP Paribas as Security Agent, as
Pledgees*4.5.39

Deed of Undisclosed Pledge of Receivables between Stuurgroep Holland B.V., as Pledgor, and BNS Automobile Funding B.V. and BNP Paribas as Security Agent, as Pledgees*4.5.40

Deed of Pledge of Registered Shares, dated as of December 21, 2005, between Stuurgroep Holland B.V., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas, as Pledgees, and Hertz Automobielen
Netherlands B.V.*4.5.41

Deed of Pledge on Registered Shares, dated as of December 21, 2005, between Hertz Holdings Netherlands B.V., as Pledgor, BNS Automobile Funding B.V., as Pledgee, and Stuurgroep
Holland B.V.*4.5.42

Deed of Disclosed Pledge of Receivables between BNS Automobile Funding B.V., as Pledgor, and BNP Paribas as Security Agent, as Pledgee*4.5.43

Pledges of Shares Contract, dated as of December 21, 2005, among Hertz de España, S.A, Hertz Alquiler de Maquinaria, S.L., BNS Automobile Funding B.V. and BNP Paribas S.A. as Security Agent
relating to Hertz Alquiler de Maquinaria*4.5.44

Contract on Pledges of Credit Rights, dated as of December 21, 2005, among Hertz de España, S.A., BNS Automobile Funding B.V. and BNP Paribas S.A. as Security Agent*


175

---



Exhibit
Number

Description4.5.45

Pledge of Credit Rights of Insurance Policies Contract, dated as of December 21, 2005, among Hertz de España, S.A., BNS Automobile Funding B.V. and BNP Paribas S.A. as Security
Agent*4.5.46

Pledge of Credit Rights of Bank Accounts, dated as of December 21, 2005 among Hertz de España, S.A., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas S.A., as Security
Agent*4.5.47

Pledges over VAT Credit Rights Contract, dated as of December 21, 2005, among Hertz de España, S.A., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas S.A., as Security
Agent*4.5.48

Contract on Pledges of Credit Rights, dated as of December 21, 2005, among Hertz Alquiler de Maquinaria, S.L., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas S.A., as Security
Agent*4.5.49

Pledge of Credit Rights of Bank Accounts Contract, dated as of December 21, 2005, among Hertz Alquiler de Maquinaria, S.L., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas S.A., as Security
Agent*4.5.50

Pledges of Credit Rights of Insurance Policies Contract, dates as of December 21, 2005, among Hertz Alquiler de Maquinaria, S.L., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas S.A., as
Security Agent*4.5.51

Pledges over VAT Credit Rights Contracts, dated as of December 21, 2005, among Hertz Alquiler de Maquinaria S.L., as Pledgor, BNS Automobile Funding B.V., and BNP Paribas S.A., as Security
Agent*4.5.52

Pledges of Credit Rights Contract, dated as of December 21, 2005, among BNS Automobile Funding B.V., as Pledgor, Hertz de España S.A., Hertz Alquiler de Maquinaria, S.L., and BNP
Paribas S.A., as Security Agent*4.5.53

Pledges of Shares Contract, dated as of December 21, 2005, among Hertz International Ltd., Hertz Equipment Rental International, Limited, Hertz de España, S.A., and BNP Paribas S.A., as
Security Agent*4.5.54

Reserved4.5.55

Reserved4.5.56

Share Pledge Agreement, dated as of December 21, 2005, between Hertz Holdings South Europe S.r.l and BNP Paribas S.A. as Security Agent relating to the pledge of the entire share capital of Hertz
AG*4.5.57

Reserved4.5.58

Reserved4.5.59

Deed of Charge over Shares in Hertz Holdings III UK Limited, dated as of December 21, 2005, between Hertz International, Ltd. and BNP Paribas as Security Agent*4.5.60

Deed of Charge, dated as of December 21, 2005, between BNS Automobile Funding B.V. as Chargor and BNP Paribas as Security Agent*


176

---



Exhibit
Number

Description4.6.1

Credit Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral
Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Joint Lead Arrangers, and BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank
Securities Inc., Lehman Brothers, Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning
Managers*4.6.2

Guarantee and Collateral Agreement, dated as of December 21, 2005, by and between CCMG Corporation, The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as Administrative
Agent and Collateral Agent*4.6.3

Copyright Security Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral
Agent*4.6.4

Trademark Security Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral
Agent*4.6.5

Deed of Trust, Security Agreement, and Assignment of Leases and Rents and Fixture Filing, dated as of December 21, 2005, among the Hertz Corporation and Deutsche Bank AG, New York Branch*4.6.6

Term Loan Mortgage Schedule listing the material differences in mortgages from Exhibit 4.6.5 for each of the mortgaged properties*4.6.7

Amendment, dated as of June 30, 2006, among The Hertz Corporation, Deutsche Bank AG, New York Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by and
between The Hertz Corporation, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith
Incorporated, as Joint Lead Arrangers, and BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers, Inc., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of The Hertz
Corporation, as filed on July 7, 2006.)


177

---



Exhibit
Number

Description4.6.8

Second Amendment, dated as of February 9, 2007, among The Hertz Corporation, Deutsche Bank AG, New York Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by
and between The Hertz Corporation, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith
Incorporated, as Joint Lead Arrangers, and BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers, Inc., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers**4.6.9

Third Amendment, dated as of May 23, 2007, among The Hertz Corporation, Deutsche Bank AG, New York Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by
and between The Hertz Corporation, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith
Incorporated, as Joint Lead Arrangers, and BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers, Inc., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers (Incorporated by reference to Exhibit 4.1.1 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on November 14, 2007.)4.6.10

Fourth Amendment, dated as of March 31, 2009, among The Hertz Corporation, Deutsche Bank AG, New York Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005,
by and between The Hertz Corporation, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith
Incorporated, as Joint Lead Arrangers, and BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers, Inc., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Hertz Global
Holdings, Inc., as filed on April 6, 2009.)


178

---



Exhibit
Number

Description4.7.1

Credit Agreement, dated as of December 21, 2005, by and between Hertz Equipment Rental Corporation, The Hertz Corporation, the Canadian Borrowers parties thereto, the several lenders from time to time parties thereto,
 Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank AG, Canada Branch, as Canadian Agent and Canadian Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith
Incorporated, as Joint Lead Arrangers, BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers Inc., Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers*4.7.2

U.S. Guarantee and Collateral Agreement, dated as of December 21, 2005, by and between CCMG Corporation, The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as
Administrative Agent and Collateral Agent*4.7.3

Canadian Guarantee and Collateral Agreement, dated as of December 21, 2005, by and between Matthews Equipment Limited, Western Shut-Down (1995) Limited, certain of its subsidiaries, and Deutsche Bank AG, Canada
Branch, as Canadian Agent and Canadian Collateral Agent*4.7.4

Copyright Security Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral
Agent*4.7.5

Trademark Security Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral
Agent*4.7.6

Trademark Security Agreement, dated as of December 21, 2005, by and between Matthews Equipment Limited and Deutsche Bank AG, Canada Branch, as Canadian Agent and Canadian Collateral Agent*4.7.7

Deed of Trust, Security Agreement, and Assignment of Leases and Rents and Fixture Filing, dated as of December 21, 2005, among the Hertz Corporation and Deutsche Bank AG, New York Branch*4.7.8

ABL Mortgage Schedule listing the material differences in mortgages from Exhibit 4.7.7 for each of the mortgaged properties*


179

---



Exhibit
Number

Description4.7.9

Amendment, dated as of June 30, 2006, among Hertz Equipment Rental Corporation, The Hertz Corporation, Matthews Equipment Limited, Western Shut-Down (1995) Limited, Deutsche Bank AG, New York Branch, Deutsche Bank AG,
 Canada Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by and between Hertz Equipment Rental Corporation, The Hertz Corporation, the Canadian Borrowers parties thereto, the several
lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank AG, Canada Branch, as Canadian Agent and Canadian Collateral Agent, Lehman Commercial Paper Inc., as
Syndication Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner and Smith Incorporated, as Joint Lead Arrangers, BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers Inc., Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers (Incorporated by reference to Exhibit 4.2 to the Current
Report on Form 8-K of The Hertz Corporation, as filed on July 7, 2006.)4.7.10

Second Amendment, dated as of February 15, 2007, among Hertz Equipment Rental Corporation, The Hertz Corporation, Matthews Equipment Limited, Western Shut-Down (1995) Limited, Deutsche Bank AG, New York Branch,
Deutsche Bank AG, Canada Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by and between Hertz Equipment Rental Corporation, The Hertz Corporation, the Canadian Borrowers parties thereto,
the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank AG, Canada Branch, as Canadian Agent and Canadian Collateral Agent, Lehman Commercial
Paper Inc., as Syndication Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Joint Lead Arrangers, BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman
Brothers Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers**


180

---



Exhibit
Number

Description4.7.11

Third Amendment, dated as of May 23, 2007, among Hertz Equipment Rental Corporation, The Hertz Corporation, Matthews Equipment Limited, Western Shut-Down (1995) Limited, Deutsche Bank AG, New York Branch, Deutsche
Bank AG, Canada Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by and between Hertz Equipment Rental Corporation, The Hertz Corporation, the Canadian Borrowers parties thereto, the
several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank AG, Canada Branch, as Canadian Agent and Canadian Collateral Agent, Lehman Commercial Paper Inc.,
as Syndication Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch,
 Pierce, Fenner and Smith Incorporated, as Joint Lead Arrangers, BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers Inc., Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers (Incorporated by reference to Exhibit 4.1.2 to the Quarterly
Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)4.7.12

Fourth Amendment, dated as of September 30, 2007, among Hertz Equipment Rental Corporation, The Hertz Corporation, Matthews Equipment Limited, Western Shut-Down (1995) Limited, Hertz Canada Equipment Rental
Corporation, Deutsche Bank AG, New York Branch, Deutsche Bank AG, Canada Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by and between Hertz Equipment Rental Corporation, The Hertz
Corporation, the Canadian Borrowers parties thereto, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank AG, Canada Branch, as Canadian Agent and
Canadian Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman
Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Joint Lead Arrangers, BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank
Securities Inc., Lehman Brothers Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers
(Incorporated by reference to Exhibit 4.1.3 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)4.8

Intercreditor Agreement, dated as of December 21, 2005, by and between Deutsche Bank AG, New York Branch, as ABL Agent, Deutsche Bank AG, New York Branch, as Term Agent, as acknowledged by CCMG Corporation, The
Hertz Corporation and certain of its subsidiaries*4.9.1

Third Amended and Restated Base Indenture, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee (Incorporated by
reference to Exhibit 4.9.1 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)


181

---



Exhibit
Number

Description4.9.2

Amended and Restated Series 2005-1 Supplement to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and BNY Midwest Trust Company, as
Trustee and Securities Intermediary**4.9.2.1

Amendment No. 1 dated as of October 24, 2007, to the Amended and Restated Series 2005-1 Supplement dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and The Bank Of
New York Trust Company, N.A., as Trustee and as Securities Intermediary, to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC and The Bank Of New York Trust Company, N.A.
(Incorporated by reference to Exhibit 4.1.7 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)4.9.2.2

Amendment No. 2, dated as of May 19, 2009, to the Amended and Restated Series 2005-1 Supplement dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and The Bank Of New
York Trust Company, N.A., as Trustee and as Securities Intermediary, to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC and The Bank Of New York Trust Company, N.A.
(Incorporated by reference to Exhibit 4.9.2.2 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)4.9.2.3

Amendment No. 3, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to the
Amended and Restated Series 2005-1 Supplement to the Third Amended and Restated Base Indenture, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as
Trustee (Incorporated by reference to Exhibit 4.9.2.3 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.3

Amended and Restated Series 2005-2 Supplement to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and BNY Midwest Trust Company,
 as Trustee and Securities Intermediary**4.9.3.1

Amendment No. 1 dated as of October 24, 2007, to the Amended and Restated Series 2005-2 Supplement dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and The Bank Of
New York Trust Company, N.A., as Trustee and as Securities Intermediary, to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC and The Bank Of New York Trust Company, N.A
(Incorporated by reference to Exhibit 4.1.8 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)


182

---



Exhibit
Number

Description4.9.3.2

Amendment No. 2, dated as of May 19, 2009, to the Amended and Restated Series 2005-2 Supplement dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and The Bank Of New York
Trust Company, N.A., as Trustee and as Securities Intermediary, to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC and The Bank Of New York Trust Company, N.A. (Incorporated by
reference to Exhibit 4.9.3.2 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)4.9.3.3

Amendment No. 3, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to the
Amended and Restated Series 2005-2 Supplement to the Third Amended and Restated Base Indenture, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as
Trustee (Incorporated by reference to Exhibit 4.9.3.3 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.4

Reserved4.9.5

Reserved4.9.6

Second Amended and Restated Series 2004-1 Supplement to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and BNY Midwest Trust
Company, as Trustee and Securities Intermediary**4.9.6.1

Amendment No. 1 dated as of October 24, 2007, to the Amended and Restated Series 2004-1 Supplement dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and The Bank Of
New York Trust Company, N.A., as Trustee and as Securities Intermediary, to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC and The Bank Of New York Trust Company, N.A.
(Incorporated by reference to Exhibit 4.1.6 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)4.9.7

Third Amended and Restated Master Motor Vehicle Operating Lease and Servicing Agreement, dated as of September 18, 2009, between The Hertz Corporation, as Lessee and Servicer, and Hertz Vehicle Financing LLC,
 as Lessor (Incorporated by reference to Exhibit 4.9.7 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.8

Second Amended and Restated Participation, Purchase and Sale Agreement, dated as of September 18, 2009, by and among Hertz General Interest LLC, Hertz Vehicle Financing LLC and The Hertz Corporation, as
Lessee and Servicer (Incorporated by reference to Exhibit 4.9.8 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.9

Purchase and Sale Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, Hertz Vehicle Financing LLC and Hertz Funding Corp.*4.9.10

Contribution Agreement, dated as of December 21, 2005, by and between Hertz Vehicle Financing LLC and The Hertz Corporation*


183

---



Exhibit
Number

Description4.9.11

Third Amended and Restated Collateral Agency Agreement, dated as of September 18, 2009, among Hertz Vehicle Financing LLC, as a Grantor, Hertz General Interest LLC, as a Grantor, The Hertz Corporation, as
Servicer, The Bank of New York Mellon Trust Company, N.A., as Collateral Agent, The Bank of New York Mellon Trust Company, N.A., as Trustee and a Secured Party, and The Hertz Corporation, as a Secured Party (Incorporated by reference to
Exhibit 4.9.11 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.12

Second Amended and Restated Administration Agreement, dated as of September 18, 2009, by and among The Hertz Corporation, Hertz Vehicle Financing LLC, and The Bank of New York Mellon Trust Company, N.A., as
Trustee (Incorporated by reference to Exhibit 4.9.12 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.13

Second Amended and Restated Master Exchange Agreement, dated as of September 18, 2009, among The Hertz Corporation, Hertz Vehicle Financing LLC, Hertz General Interest LLC, Hertz Car Exchange Inc.,
and DB Services Tennessee, Inc. (Incorporated by reference to Exhibit 4.9.13 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.14

Second Amended and Restated Escrow Agreement, dated as of September 18, 2009, among The Hertz Corporation, Hertz Vehicle Financing LLC, Hertz General Interest LLC, Hertz Car Exchange Inc., and J.P.
Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 4.9.14 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.15

Reserved4.9.16

Reserved4.9.17

Reserved4.9.18

Letter of Credit Facility Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, Hertz Vehicle Financing LLC, and Ford Motor Company*4.9.19

Insurance Agreement, dated as of December 21, 2005, by and between MBIA Insurance Corporation, as Insurer, Hertz Vehicle Financing LLC, as Issuer, and BNY Midwest Trust Company, as Trustee*4.9.20

Insurance Agreement, dated as of December 21, 2005, by and between Ambac Assurance Corporation, as Insurer, Hertz Vehicle Financing LLC, as Issuer, and BNY Midwest Trust Company, as Trustee*4.9.21

Note Guaranty Insurance Policy, dated as of December 21, 2005, of MBIA Insurance Corporation, relating to Series 2005-1 Rental Car Asset Backed Notes*4.9.22

Reserved4.9.23

Note Guaranty Insurance Policy, dated as of December 21, 2005, of Ambac Assurance Corporation, relating to Series 2005-2 Rental Car Asset Backed Notes*4.9.24

Reserved4.9.25

Supplement to Second Amended and Restated Collateral Agency Agreement, dated as of January 26, 2007, among The Hertz Corporation, as Grantor, Gelco Corporation d/b/a GE Fleet Services, as Secured Party and BNY
Midwest Trust Company as Collateral Agent**


184

---



Exhibit
Number

Description4.9.26

Reserved4.9.27

Consent and Waiver Agreement, dated as of May 19, 2009, among MBIA Insurance Corporation, Hertz Vehicle Financing LLC, and The Bank of New York Mellon Trust Company, N.A. (Incorporated by reference to
Exhibit 4.9.27 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)4.9.28

MBIA Side Letter, dated as of May 19, 2009, between MBIA Insurance Corporation and The Hertz Corporation (Incorporated by reference to Exhibit 4.9.28 to the Quarterly Report on Form 10-Q of Hertz Global
Holdings, Inc., as filed on August 7, 2009)4.9.29

Consent And Waiver Agreement, dated as of May 19, 2009, among Ambac Assurance Corporation, Hertz Vehicle Financing LLC, and The Bank of New York Mellon Trust Company, N.A. (Incorporated by reference to
Exhibit 4.9.29 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)4.9.30

Ambac Side Letter, dated as of May 19, 2009, between Ambac Assurance Corporation and The Hertz Corporation (Incorporated by reference to Exhibit 4.9.30 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on August 7, 2009)4.9.31

Series 2009-1 Supplement, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to
the Third Amended and Restated Base Indenture, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee (Incorporated by reference to Exhibit 4.9.27
to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.32

Series 2009-1 Note Purchase Agreement (Series 2009-1 Variable Funding Rental Car Asset Backed Notes), dated as of September 18, 2009, among Hertz Vehicle Financing LLC, The Hertz Corporation, as
Administrator, certain conduit investors, each as a Conduit Investor, certain financial institutions, each as a Committed Note Purchaser, certain funding agents and Deutsche Bank AG, New York Branch, as Administrative Agent (Incorporated by reference
to Exhibit 4.9.28 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.33

Series 2009-2 Supplement, dated as of October 23, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to
the Third Amended and Restated Base Indenture, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee (Incorporated by reference to Exhibit 4.9.29
to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.10

Amended and Restated Stockholders Agreement, dated as of November 20, 2006, among Hertz Global Holdings, Inc., Clayton, Dubilier & Rice Fund VII, L.P., CDR CCMG Co-Investor L.P., CD&R
Parallel Fund VII, L.P., Carlyle Partners IV, L.P., CP IV Coinvestment, L.P., CEP II U.S. Investments, L.P., CEP II Participations S.à.r.l SICAR, ML Global Private Equity Fund, L.P., Merrill Lynch Ventures L.P.
2001, ML Hertz Co-Investor, L.P. and CMC-Hertz Partners, L.P.**


185

---



Exhibit
Number

Description4.11

Registration Rights Agreement, dated as of December 21, 2005, among CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), Clayton, Dubilier & Rice Fund VII, L.P., CDR CCMG
Co-Investor L.P., Carlyle Partners IV, L.P., CP IV Coinvestment, L.P., CEP II U.S. Investments, L.P., CEP II Participations S.à.r.l, ML Global Private Equity Fund, L.P., Merrill Lynch Ventures L.P. 2001, ML Hertz
Co-Investor, L.P. and CMC-Hertz Partners, L.P. (Incorporated by reference to Exhibit 4.11 to Amendment No. 3 to the Registration Statement on Form S-1 (file No. 333-135782) as filed on October 23, 2006)4.12

Amendment No. 1, dated as of November 20, 2006, to the Registration Rights Agreement, dated as of December 21, 2005, among CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.),
Clayton, Dubilier & Rice Fund VII, L.P., CDR CCMG Co-Investor L.P., CD&R Parallel Fund VII, L.P., Carlyle Partners IV, L.P., CP IV Coinvestment, L.P., CEP II U.S. Investments, L.P., CEP II Participations
S.à.r.l SICAR, ML Global Private Equity Fund, L.P., Merrill Lynch Ventures L.P. 2001, ML Hertz Co-Investor, L.P. and CMC-Hertz Partners, L.P.**4.13

Credit Agreement, dated as of September 29, 2006, among The Hertz Corporation, Puerto Ricancars, Inc., the several banks and other financial institutions from time to time parties as lenders thereto and
Gelco Corporation d.b.a. GE Fleet Services, as administrative agent and collateral agents for the lenders thereunder (Incorporated by reference to Exhibit 4.13 to Amendment No. 4 to the Registration Statement on Form S-1 (file
No. 333-135782) as filed on October 27, 2006)4.13.1

First Amendment, dated as of October 6, 2006, to the Credit Agreement, dated as of September 29, 2006, among The Hertz Corporation, Puerto Ricancars, Inc., the several banks and other financial
institutions from time to time parties as lenders thereto and Gelco Corporation d.b.a. GE Fleet Services, as administrative agent and collateral agents for the lenders thereunder (Incorporated by reference to Exhibit 4.13.1 to Amendment
No. 4 to the Registration Statement on Form S-1 (file No. 333-135782) as filed on October 27, 2006)4.13.2

Second Amendment, dated as of October 31, 2006, to the Credit Agreement, dated as of September 29, 2006, among The Hertz Corporation, Puerto Ricancars, Inc., the several banks and other financial
institutions from time to time parties as lenders thereto and Gelco Corporation d.b.a. GE Fleet Services, as administrative agent and collateral agents for the lenders thereunder**4.14

Form of Stock Certificate (Incorporated by reference to Exhibit 4.14 to Amendment No. 6 to the Registration Statement on Form S-1 (File No. 333-135782) as filed on November 7, 2006)4.15

Terms of Offer between Hertz (U.K.) Limited and Lombard North Central PLC and The Royal Bank of Scotland, dated as of December 20, 2007, and Letter Agreement dated August 18, 1997 (Incorporated by
reference to Exhibit 4.15 to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as filed on February 29, 2008)4.16

Override Agreement between Hertz (U.K.) Limited and Lombard North Central Plc, dated as of March 25, 2008 (Incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on May 9, 2008)4.17

Guarantee of Hertz (U.K.) Limited to Lombard North Central Plc, dated as of December 21, 2007 (Incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q of Hertz Global Holdings,
 Inc., as filed on May 9, 2008)


186

---



Exhibit
Number

Description4.18

Affirmation of Guarantor Hertz International, Ltd., dated as of March 25, 2008, with respect to guarantee of Hertz (U.K.) Limited to Lombard North Central Plc, dated as of December 21, 2007
(Incorporated by reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on May 9, 2008)4.19

Indenture, dated as of May 27, 2009, between Hertz Global Holdings, Inc. and Wells Fargo Bank, National Association, as trustee, including Form of Note (Incorporated by reference to Exhibit 4.1 to the
Current Report on Form 8-K of Hertz Global Holdings, Inc., as filed on May 27, 2009)4.19.1

First Supplemental Indenture, dated as of August 19, 2009, between Hertz Global Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee, to the Indenture, dated as of May 27, 2009, between
Hertz Global Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee (Incorporated by reference to Exhibit 4.19.1 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6,
2009)10.1

Hertz Global Holdings, Inc. Stock Incentive Plan *10.1.1

First Amendment to the Hertz Global Holdings, Inc. Stock Incentive Plan (Incorporated by reference to Exhibit 10.1.1 to Amendment No. 4 to the Registration Statement on Form S-1 (File
No. 333-135782) as filed on October 27, 2006)10.2

Form of Stock Subscription Agreement under Stock Incentive Plan *10.3

Form of Stock Option Agreement under Stock Incentive Plan *10.4

Form of Management Stock Option Agreement under the Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Hertz Global Holdings, Inc., as filed on
August 16, 2007)10.5

Non-Compete Agreement, dated April 10, 2000, between Hertz Europe Limited and Michel Taride (Incorporated by reference to Exhibit 10.6 to Amendment No. 1 to the Registration Statement on Form S-1
of The Hertz Corporation (File No. 333-125764) as filed on August 30, 2005)10.6

The Hertz Corporation Supplemental Retirement and Savings Plan (Incorporated by reference to Exhibit 10.7 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz Corporation (File
No. 333-125764) as filed on August 30, 2005)10.7

Amendment of The Hertz Corporation Supplemental Retirement and Savings Plan (as amended and restated, effective as of December 31, 2008) (Incorporated by reference to Exhibit 10.7 to the Annual Report on
Form 10-K of Hertz Global Holdings, Inc., as filed on March 3, 2009)10.8

The Hertz Corporation Executive Long Term Incentive Compensation Plan (Incorporated by reference to Exhibit 10.8 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz Corporation
(File No. 333-125764) as filed on August 30, 2005)10.9

The Hertz Corporation Supplemental Executive Retirement Plan (as amended and restated, effective December 31, 2008) (Incorporated by reference to Exhibit 10.9 to the Annual Report on Form 10-K of Hertz
Global Holdings, Inc., as filed on March 3, 2009)10.10

The Hertz Corporation Benefit Equalization Plan (as amended and restated, effective December 31, 2008) (Incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K of Hertz Global
Holdings, Inc., as filed on March 3, 2009)


187

---



Exhibit
Number

Description10.11

The Hertz Corporation Key Officer Postretirement Assigned Car Benefit Plan (Incorporated by reference to Exhibit 10.11 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz Corporation
(File No. 333-125764) as filed on August 30, 2005)10.12

The Hertz Corporation Retirement Plan (Incorporated by reference to Exhibit 10.12 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz Corporation (File No. 333-125764) as
filed on August 30, 2005)10.13

The Hertz Corporation (UK) 1972 Pension Plan (Incorporated by reference to Exhibit 10.13 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz Corporation (File No. 333-125764)
as filed on August 30, 2005)10.14

The Hertz Corporation (UK) Supplementary Unapproved Pension Scheme (Incorporated by reference to Exhibit 10.14 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz Corporation (File
No. 333-125764) as filed on August 30, 2005)10.15

Reserved10.16

The Hertz Corporation 2005 Executive Incentive Compensation Plan *10.17

Reserved10.18

Amended and Restated Indemnification Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, Hertz Vehicles LLC, Hertz Funding Corp., Hertz General Interest LLC, and Hertz
Vehicle Financing LLC*10.19

Reserved10.20

Reserved10.21

Reserved10.22

Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The Hertz Corporation, Clayton, Dubilier & Rice Fund VII,
 L.P., CDR CCMG Co-Investor L.P., and Clayton, Dubilier & Rice, Inc.*10.22.1

Amendment No. 1, dated as of March 3, 2009, to the Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The
Hertz Corporation, Clayton, Dubilier & Rice Fund VII, L.P., CDR CCMG Co-Investor L.P., and Clayton, Dubilier & Rice, Inc. (Incorporated by reference to Exhibit 10.22.1 to the Quarterly Report on Form 10-Q of
Hertz Global Holdings, Inc., as filed on May 8, 2009)10.23

Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The Hertz Corporation, Carlyle Partners IV, L.P., CP IV
Coinvestment L.P., CEP II U.S. Investments, L.P., CEP II Participations S.à.r.l., and TC Group IV, L.L.C.*10.23.1

Amendment No. 1, dated as of March 3, 2009, to the Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The
Hertz Corporation, Carlyle Partners IV, L.P., CP IV Coinvestment L.P., CEP II U.S. Investments, L.P., CEP II Participations S.à.r.l., and TC Group IV, L.L.C. (Incorporated by reference to Exhibit 10.23.1 to the Quarterly
Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on May 8, 2009)


188

---



Exhibit
Number

Description10.24

Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The Hertz Corporation, ML Global Private Equity Fund, L.P.,
Merrill Lynch Ventures L.P. 2001, CMC-Hertz Partners, L.P., ML Hertz Co-Investor, L.P., and Merrill Lynch Global Partners, Inc.*10.24.1

Amendment No. 1 to Form of Sponsor Indemnification Agreement (Incorporated by reference to Exhibit 10.24.1 to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as filed on March 3,
 2009)10.24.2

Amendment No. 1, dated as of March 3, 2009, to the Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The
Hertz Corporation, ML Global Private Equity Fund, L.P., Merrill Lynch Ventures L.P. 2001, CMC-Hertz Partners, L.P., ML Hertz Co-Investor, L.P., and Merrill Lynch Global Partners, Inc. (Incorporated by reference to
Exhibit 10.24.2 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on May 8, 2009)10.25

Tax Sharing Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), CCMG Corporation, The Hertz Corporation, and Hertz International,
 Ltd.*10.26

Tax Sharing Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), CCMG Corporation, and The Hertz Corporation*10.27

Reserved10.28

Amended and Restated Employment Agreement, dated as of December 31, 2008, between Hertz Global Holdings, Inc. and Mark P. Frissora (Incorporated by reference to Exhibit 10.28 to the Annual Report on
Form 10-K of Hertz Global Holdings, Inc., as filed on March 3, 2009)10.29

Form of Director Indemnification Agreement (Incorporated by reference to Exhibit 10.29 to Amendment No. 3 to the Registration Statement on Form S-1 (File No. 333-135782) as filed on October 23,
 2006))10.29.1

Amendment No. 1 to Form of Director Indemnification Agreement (Incorporated by reference to Exhibit 10.29.1 to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as filed on
March 3, 2009)10.30

Reserved10.31

Reserved10.32

Reserved10.33

Hertz Global Holdings, Inc. Director Stock Incentive Plan (Incorporated by reference to Exhibit 10.33 to Amendment No. 6 to the Registration Statement on Form S-1 (File No. 333-135782) as
filed on November 7, 2006)10.34

Reserved10.35

Reserved10.36

Form of Director Stock Option Agreement under Director Stock Incentive Plan (Incorporated by reference to Exhibit 10.36 to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as filed on
February 29, 2008)


189

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Exhibit
Number

Description10.37

Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (incorporated by reference to Annex A of Hertz Global Holdings, Inc.'s Definitive Proxy Statement on Schedule 14A, as filed on April 7,
2008)10.37.1

Amendment No. 1 to the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.37.1 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc.,
 as filed on November 6, 2009)10.37.2

Amendment No. 2 to the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.37.2 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc.,
 as filed on November 6, 2009)10.37.3

Amendment No. 3 to the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan***10.38

Form of Employee Stock Option Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.38 to the Quarterly Report on Form 10-Q of Hertz Global
Holdings, Inc., as filed on November 7, 2008)10.39

Hertz Global Holdings, Inc. Severance Plan for Senior Executives (Incorporated by reference to Exhibit 10.39 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on
November 7, 2008)10.40

Form of Change in Control Severance Agreement among Hertz Global Holdings, Inc. and our executive officers (Incorporated by reference to Exhibit 10.40 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on November 7, 2008)10.41

Letter Agreement, dated as of February 1, 2008, between Hertz Global Holdings, Inc. and Joseph R. Nothwang (Incorporated by reference to Exhibit 10.41 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on November 7, 2008)10.42

Form of Director Stock Option Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan for awards to directors in May 2008 (Incorporated by reference to Exhibit 10.37 to the Quarterly
Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 7, 2008)10.43

Hertz Global Holdings, Inc. Employee Stock Purchase Plan (incorporated by reference to Annex B of Hertz Global Holdings, Inc.'s Definitive Proxy Statement on Schedule 14A, as filed on April 7,
2008)10.44

Letter Agreement, dated as of December 18, 2008, between Hertz Global Holdings, Inc. and Joseph R. Nothwang (Incorporated by reference to Exhibit 10.44 to the Annual Report on Form 10-K of Hertz
Global Holdings, Inc., as filed on March 3, 2009)10.45

Form of Performance Stock Unit Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.45 to the Annual Report on Form 10-K of Hertz Global
Holdings, Inc., as filed on March 3, 2009)10.45.1

Form of Amendment to Performance Stock Unit Agreement between [Participant] and Hertz Global Holdings, Inc. (Incorporated by reference to Exhibit 10.45.1 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on November 6, 2009)10.46

Form of Restricted Stock Unit Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.46 to the Annual Report on Form 10-K of Hertz Global
Holdings, Inc., as filed on March 3, 2009)


190

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Exhibit
Number

Description10.47

Subscription Agreement, dated as of May 19, 2009, between Hertz Global Holdings, Inc. and Clayton, Dubilier & Rice Fund VII, L.P. (Incorporated by reference to Exhibit 10.47 to the Quarterly
Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)10.48

Subscription Agreement, dated as of May 19, 2009, between Hertz Global Holdings, Inc. and CD&R Parallel Fund VII, L.P. (Incorporated by reference to Exhibit 10.48 to the Quarterly Report on
Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)10.49

Subscription Agreement, dated as of May 19, 2009, between Hertz Global Holdings, Inc. and Carlyle Partners IV, L.P. (Incorporated by reference to Exhibit 10.49 to the Quarterly Report on
Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)10.50

Subscription Agreement, dated as of May 19, 2009, between Hertz Global Holdings, Inc. and CP IV Coinvestment, L.P. (Incorporated by reference to Exhibit 10.50 to the Quarterly Report on
Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)12

Computation of Consolidated Ratio of Earnings to Fixed Charges for the years ended December 31, 2009, 2008, 2007, 2006, and the periods ended December 31, 2005 and December 20, 200521.1

List of subsidiaries31.1-31.2

Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer32.1-32.2

Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer


Indicates
management compensation plan.*Incorporated
by reference to the exhibit of the same number to the Current Report on Form 8-K of The Hertz Corporation, as filed on
March 31, 2006.**Incorporated
by reference to the exhibit of the same number to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as
filed on March 30, 2007.***Incorporated
by reference to the exhibit of the same number to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as
filed on February 26, 2010.


As
of December 31, 2009, we had various additional obligations which could be considered long-term debt, none of which exceeded 10% of our total assets on a
consolidated basis. We agree to furnish to the SEC upon request a copy of any such instrument defining the rights of the holders of such long-term debt.

Schedules
and exhibits not included above have been omitted because the information required has been included in the financial statements or notes thereto or are not applicable or not required..

SUPPLEMENTAL INFORMATION

The Registrant is an indirect wholly owned subsidiary of Hertz Global Holdings, Inc. No annual report to security holders covering the
Registrant's last fiscal year or proxy statement, form of proxy or other proxy soliciting material has been sent to security holders.

191

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, in the borough of Park Ridge, and state of New Jersey, on the 1st day of March, 2010.

THE HERTZ CORPORATION
(Registrant)By:

/s/ ELYSE DOUGLASName:

Elyse DouglasTitle:

Executive Vice President and Chief
Financial Officer


Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on
March 1, 2010:

Signature

Title/s/ GEORGE W. TAMKE George W. Tamke

Lead Director/s/ MARK P. FRISSORA Mark P. Frissora

Chief Executive Officer and Chairman of the Board of Directors/s/ ELYSE DOUGLAS Elyse Douglas

Executive Vice President and Chief Financial Officer/s/ JATINDAR S. KAPUR Jatindar S. Kapur

Senior Vice President, Finance and Corporate Controller/s/ BARRY H. BERACHA Barry H. Beracha

Director/s/ BRIAN A. BERNASEK Brian A. Bernasek

Director/s/ CARL T. BERQUIST Carl T. Berquist

Director/s/ MICHAEL J. DURHAM Michael J. Durham

Director/s/ ROBERT F. END Robert F. End

Director


192

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Signature

TitleJ. Travis Hain

Director/s/ GREGORY S. LEDFORD Gregory S. Ledford

Director/s/ NATHAN K. SLEEPER Nathan K. Sleeper

Director/s/ DAVID H. WASSERMAN David H. Wasserman

Director/s/ HENRY C. WOLF Henry C. Wolf

Director


193

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EXHIBIT INDEX

Exhibit
Number

Description3.1

Amended and Restated Certificate of Incorporation of Hertz Global Holdings, Inc.**3.2

Amended and Restated By-Laws of Hertz Global Holdings, Inc., effective August 12, 2009 (Incorporated by reference to Exhibit 3.1.1 to the Quarterly Report on Form 10-Q of Hertz Global Holdings,
 Inc., as filed on November 6, 2009)4.1.1

Indenture, dated as of December 21, 2005, by and between CCMG Acquisition Corporation, as Issuer, the Subsidiary Guarantors from time to time parties thereto, and Wells Fargo Bank, National Association, as
Trustee, governing the U.S. Dollar 8.875% Senior Notes due 2014 and the Euro 7.875% Senior Notes due 2014*4.1.2

Merger Supplemental Indenture, dated as of December 21, 2005, by and between The Hertz Corporation and Wells Fargo Bank, National Association, as Trustee, relating to the U.S. Dollar 8.875% Senior Notes due 2014
and the Euro 7.875% Senior Notes due 2014*4.1.3

Supplemental Indenture in Respect of Subsidiary Guarantee, dated as of December 21, 2005, by and between The Hertz Corporation, the Subsidiary Guarantors named therein, and Wells Fargo Bank, National Association,
as Trustee, relating to the U.S. Dollar 8.875% Senior Notes due 2014 and the Euro 7.875% Senior Notes due 2014*4.1.4

Third Supplemental Indenture, dated as of July 7, 2006, by and between The Hertz Corporation, the Subsidiary Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee, relating to the U.S.
Dollar 8.875% Senior Notes due 2014 and the Euro 7.875% Senior Notes due 2014 (Incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K of The Hertz Corporation, as filed on July 7, 2006.)4.1.5

Fourth Supplemental Indenture, dated as of October 15, 2007, among Simply Wheelz LLC, The Hertz Corporation, the Existing Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee,
relating to the U.S. Dollar 8.875% Senior Notes due 2014 and the Euro 7.875% Senior Notes due 2014 (Incorporated by reference to Exhibit 4.1.4 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on
November 14, 2007.)4.2.1

Indenture, dated as of December 21, 2005, by and between CCMG Acquisition Corporation, as Issuer, the Subsidiary Guarantors from time to time parties thereto, and Wells Fargo Bank, National Association, as
Trustee, governing the 10.5% Senior Subordinated Notes due 2016*4.2.2

Merger Supplemental Indenture, dated as of December 21, 2005, by and between The Hertz Corporation and Wells Fargo Bank, National Association, as Trustee, relating to the 10.5% Senior Subordinated Notes due
2016*4.2.3

Supplemental Indenture in Respect of Subsidiary Guarantee, dated as of December 21, 2005, by and between The Hertz Corporation, the Subsidiary Guarantors named therein, and Wells Fargo Bank, National Association,
as Trustee, relating to the 10.5% Senior Subordinated Notes due 2016*4.2.4

Third Supplemental Indenture, dated as of July 7, 2006, by and between The Hertz Corporation, the Subsidiary Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee, relating to the 10.5%
Senior Subordinated Notes due 2016 (Incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K of The Hertz Corporation, as filed on July 7, 2006.)


194

---



Exhibit
Number

Description4.2.5

Fourth Supplemental Indenture, dated as of October 15, 2007, among Simply Wheelz LLC, The Hertz Corporation, the Existing Guarantors named therein, and Wells Fargo Bank, National Association, as Trustee,
relating to the 10.5% Senior Subordinated Notes due 2016 (Incorporated by reference to Exhibit 4.1.5 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)4.3.1

Exchange and Registration Rights Agreement, dated as of December 21, 2005, by and between CCMG Acquisition Corporation, Deutsche Bank Securities Inc. and the other financial institutions named therein,
relating to the 8.875% Senior Notes due 2014 and the 7.875% Senior Notes due 2014*4.3.2

Joinder Agreement to the Exchange and Registration Rights Agreement, dated as of December 21, 2005, of The Hertz Corporation relating to the 8.875% Senior Notes due 2014 and the 7.875% Senior Notes due
2014*4.3.3

Joinder Agreement to the Exchange and Registration Rights Agreement, dated as of December 21, 2005, of the Subsidiary Guarantors named therein, relating to the 8.875% Senior Notes due 2014 and the 7.875% Senior
Notes due 2014*4.4.1

Exchange and Registration Rights Agreement, dated as of December 21, 2005, by and between CCMG Acquisition Corporation, Deutsche Bank Securities Inc. and the other financial institutions named therein,
relating to the 10.5% Senior Subordinated Notes due 2016*4.4.2

Joinder Agreement to the Exchange and Registration Rights Agreement, dated as of December 21, 2005, of The Hertz Corporation, relating to the 10.5% Senior Subordinated Notes due 2016*4.4.3

Joinder Agreement to the Exchange and Registration Rights Agreement, dated as of December 21, 2005, of the Subsidiary Guarantors named therein, relating to the 10.5% Senior Subordinated Notes due
2016*4.5.1

Senior Bridge Facilities Agreement, dated as of December 21, 2005, by and between Hertz International, Ltd., certain of its subsidiaries, Hertz Europe Limited, as Coordinator, BNP Paribas and The Royal Bank
of Scotland plc, as Mandated Lead Arrangers, Calyon, as Co-Arranger, BNP Paribas, The Royal Bank of Scotland plc, and Calyon, as Joint Bookrunners, BNP Paribas, as Facility Agent, BNP Paribas, as Security Agent, BNP Paribas, as Global
Coordinator, and the financial institutions named therein*4.5.1.1

Amendment and Restatement Agreement, dated as of March 21, 2007, in respect of the Senior Bridge Facilities Agreement, dated as of December 21, 2005, by and between Hertz International, Ltd., certain of
its subsidiaries, Hertz Europe Limited, as Coordinator, BNP Paribas and The Royal Bank of Scotland plc, as Mandated Lead Arrangers, Calyon, as Co-Arranger, BNP Paribas, The Royal Bank of Scotland plc, and Calyon, as Joint Bookrunners, BNP
Paribas, as Facility Agent, BNP Paribas, as Security Agent, BNP Paribas, as Global Coordinator, and the financial institutions named therein (Incorporated by reference to Exhibit 4.5.1.1 to the Annual Report on Form 10-K of Hertz Global
Holdings, Inc., as filed on February 29, 2008)


195

---



Exhibit
Number

Description4.5.1.2

Amendment Agreement, dated as of December 21, 2007, in respect of the Senior Bridge Facilities Agreement, dated as of December 21, 2005, by and between Hertz International, Ltd., certain of its subsidiaries,
 Hertz Europe Limited, as Coordinator, BNP Paribas and The Royal Bank of Scotland plc, as Mandated Lead Arrangers, Calyon, as Co-Arranger, BNP Paribas, The Royal Bank of Scotland plc, and Calyon, as Joint Bookrunners, BNP Paribas, as
Facility Agent, BNP Paribas, as Security Agent, BNP Paribas, as Global Coordinator, and the financial institutions named therein (Incorporated by reference to Exhibit 4.5.1.2 to the Annual Report on Form 10-K of Hertz Global Holdings,
 Inc., as filed on February 29, 2008)4.5.1.3

Amendment Agreement, dated as of July 24, 2008, in respect of the Senior Bridge Facilities Agreement, dated as of December 21, 2005, by and between Hertz International, Ltd., certain of its subsidiaries,
 Hertz Europe Limited, as Coordinator, BNP Paribas and The Royal Bank of Scotland plc, as Mandated Lead Arrangers, Calyon, as Co-Arranger, BNP Paribas, The Royal Bank of Scotland plc, and Calyon, as Joint Bookrunners, BNP Paribas, as
Facility Agent, BNP Paribas, as Security Agent, BNP Paribas, as Global Coordinator, and the financial institutions named therein (Incorporated by reference to Exhibit 4.5.1.3 to the Quarterly Report on Form 10-Q of Hertz Global Holdings,
 Inc., as filed on August 8, 2008)4.5.2

Intercreditor Deed, dated as of December 21, 2005, by and between Hertz International, Ltd., as Parent, Hertz Europe Limited, as Coordinator, certain of its subsidiaries, BNP Paribas as A/C Facility Agent
and NZ Facility Agent, BNP Paribas as Security Agent, Banco BNP Paribas Brasil S.A., as Brazilian Facility Agent, BNP Paribas, as Australian Security Trustee, the financial institutions named therein, and The Hertz Corporation*4.5.2.1

Supplemental Deed, dated as of March 21, 2007, in respect of the Intercreditor Deed, dated as of December 21, 2005, by and between Hertz International, Ltd., as Parent, Hertz Europe Limited, as
Coordinator, certain of its subsidiaries, BNP Paribas as A/C Facility Agent and NZ Facility Agent, BNP Paribas as Security Agent, Banco BNP Paribas Brasil S.A., as Brazilian Facility Agent, BNP Paribas, as Australian Security Trustee, the
financial institutions named therein, and The Hertz Corporation (Incorporated by reference to Exhibit 4.5.2.1 to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as filed on February 29, 2008)4.5.3

Australian Purchaser Charge (Project H)Unlimited, dated as of December 21, 2005, by and between Hertz Australia Pty Limited and HA Funding Pty Limited*4.5.4

Australian Purchaser Charge (Project H)South Australia, dated as of December 21, 2005, by and between Hertz Australia Pty Limited and HA Funding Pty Limited*4.5.5

Australian Purchaser Charge (Project H)Queensland, dated as of December 21, 2005, by and between Hertz Australia Pty Limited and HA Funding Pty Limited*4.5.6

Australian Share Mortgage of Purchaser Shares (Project H), dated as of December 21, 2005, by and between Hertz Investment (Holdings) Pty Limited and HA Funding Pty Limited*4.5.7

Australian Issuer Charge (Project H), dated as of December 21, 2005, by and between Hertz Note Issuer Pty Limited and HA Funding Pty Limited*4.5.8

Australian Borrower Charge (Project H), dated as of December 20, 2005, by and between HA Funding Pty Limited and the BNP Paribas*4.5.9

Australian Security Trust Deed (Project H), dated as of December 21, 2005, between HA Funding Pty Limited and BNP Paribas*


196

---



Exhibit
Number

Description4.5.10

Reserved4.5.11

Reserved4.5.12

Share Pledge Agreement, dated as of December 21, 2005, by and between Hertz Holdings Netherlands B.V., as Pledgor, and BNP Paribas, as Pledgee*4.5.13

Reserved4.5.14

Reserved4.5.15

Reserved4.5.16

Reserved4.5.17

Pledge of a Business as a Going Concern (Acte de Nantissement de Fonds de Commerce), dated as of December 21, 2005, by and between Hertz France, as Pledgor, and BNP Paribas, as Security Agent, and the
beneficiaries described therein (English language version)*4.5.18

Bank Account Pledge Agreement (Acte de Nantissement de Solde de Compte Bancaire), dated as of December 21, 2005, by and between Hertz France, as Pledgor, and BNP Paribas, as Security Agent, and the beneficiaries
described therein (English language version)*4.5.19

Share Account Pledge Agreement (Acte de Nantissement de Compte d'Instruments Financiers), dated as of December 21, 2005, by and between Hertz France, as Pledgor, BNP Paribas, as Security Agent, Hertz Equipement
France, as Account Holder, BNP Paribas, as Bank Account Holder, and the beneficiaries described therein*4.5.20

Pledge of a Business as a Going Concern (Acte de Nantissement de Fonds de Commerce), dated as of December 21, 2005, by and between Hertz Equipement France, as Pledgor, BNP Paribas, as Security Agent, and the
beneficiaries described therein (English language version)*4.5.21

Bank Account Pledge Agreement (Acte de Nantissement de Solde de Compte Bancaire), dated as of December 21, 2005, by and between Hertz Equipement France, as Pledgor, BNP Paribas, as Security Agent, and the
beneficiaries described therein (English language version)*4.5.22

Master Agreement For Assignment of Receivables (Contrat Cadre de Cession de Creances Professionnelles a Titre de Garantie), dated as of December 21, 2005, by and between Hertz Equipement France, as Assignor, BNP
Paribas, as Security Agent, and the assignees described therein**4.5.23

Pledge of a Business as a Going Concern (Acte de Nantissement de Fonds de Commerce), dated as of December 21, 2005, by and between Equipole Finance Services, as Pledgor, BNP Paribas, as Security Agent, and the
beneficiaries described therein (English language version)*4.5.24

Master Agreement for Assignment of Receivables (Contrat Cadre de Cession de Creances Professionnelles a Titre de Garantie), dated as of December 21, 2005, by and between Equipole Finance Services, as Assignor,
BNP Paribas, as Security Agent, and the assignees described therein*


197

---



Exhibit
Number

Description4.5.25

Bank Account Pledge Agreement (Acte de Nantissement de Solde de Compte Bancaire), dated as of December 21, 2005, by and between Equipole Finance Services, as Pledgor, BNP Paribas, as Security Agent, and the
beneficiaries described therein (English language version)*4.5.26

Shares Account Pledge Agreement (Acte de Nantissement de Compte d'Instruments Financiers), dated as of December 21, 2005, by and between Equipole, as Pledgor, BNP Paribas, as Security Agent, Equipole Finance
Services, as Account Holder, BNP Paribas, as Bank Account Holder, and the beneficiaries described therein*4.5.27

Share Account Pledge Agreement (Acte de Nantissement de Compte d'Instruments Financiers), dated as of December 21, 2005, by and between Equipole, as Pledgor, BNP Paribas, as Security Agent, Hertz France, as
Account Holder, BNP Paribas, as Bank Account Holder, and the beneficiaries described therein*4.5.28

Shares Account Pledge Agreement (Acte de Nantissement de Compte d'Instruments Financiers), dated as of December 21, 2005, by and between Equipole, as Pledgor, BNP Paribas, as Security Agent, Hertz Equipement
France, as Account Holder, BNP Paribas, as Bank Account Holder, and the beneficiaries described therein*4.5.29

Account Pledge Agreement, dated as of December 21, 2005, among Hertz Autovermietung GmbH, The Royal Bank of Scotland plc, Calyon, BNP Paribas (Canada) and Indosuez Finance (U.K.) Limited as Pledgees and
BNP Paribas S.A. as Security Agent*4.5.30

Global Assignment Agreement, dated as of December 21, 2005, between Hertz Autoverrmietung GmbH as assignor and BNP Paribas S.A. as Security Agent and lender (English language version)*4.5.31

Security Transfer of Moveable Assets, dated as of December 21, 2005, between Hertz Autovermietung GmbH as assignor and BNP Paribas S.A. as Security Agent and lender*4.5.32

Share Pledge Agreement, dated as of December 21, 2005, among Equipole S.A. (France), The Royal Bank of Scotland plc, Calyon, BNP Paribas (Canada), Indosuez Finance (U.K.) Limited and BNP
Paribas S.A., as Security Agent*4.5.33

Security Assignment of Receivables, dated as of December 21, 2005, between Hertz Italiana S.p.A. as assignor and BNP Paribas S.A. as Security Agent*4.5.34

Pledge Agreement over the Balance of Bank Account, dated as of December 21, 2005, between Hertz Italiana S.p.A. as Pledgor and BNP Paribas S.A. as Pledgee and Security Agent*4.5.35

Pledge Agreement over the Balance of Bank Account, dated as of December 21, 2005, between Hertz Italiana S.p.A., as Pledgor, and BNP Paribas S.A., as Pledgee and Security Agent*4.5.36

Pledge Agreement over Hertz Italiana S.p.A. shares, dated as of December 21, 2005, between Hertz Holding South Europe S.r.l as Pledgor and BNP Paribas S.A. as Pledgee and Security Agent*4.5.37

Deed of Non-Possessory Pledge of Movables, dated as of December 21, 2005, between Stuurgroep Holland B.V., as Pledgor, and BNS Automobile Funding B.V. and BNP Paribas as Security Agent, as
Pledgees*


198

---



Exhibit
Number

Description4.5.38

Deed of Disclosed Pledge of Receivables, dated as of December 21, 2005, between Stuurgroep Holland B.V., as Pledgor, and BNS Automobile Funding B.V. and BNP Paribas as Security Agent, as
Pledgees*4.5.39

Deed of Undisclosed Pledge of Receivables between Stuurgroep Holland B.V., as Pledgor, and BNS Automobile Funding B.V. and BNP Paribas as Security Agent, as Pledgees*4.5.40

Deed of Pledge of Registered Shares, dated as of December 21, 2005, between Stuurgroep Holland B.V., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas, as Pledgees, and Hertz Automobielen
Netherlands B.V.*4.5.41

Deed of Pledge on Registered Shares, dated as of December 21, 2005, between Hertz Holdings Netherlands B.V., as Pledgor, BNS Automobile Funding B.V., as Pledgee, and Stuurgroep
Holland B.V.*4.5.42

Deed of Disclosed Pledge of Receivables between BNS Automobile Funding B.V., as Pledgor, and BNP Paribas as Security Agent, as Pledgee*4.5.43

Pledges of Shares Contract, dated as of December 21, 2005, among Hertz de España, S.A, Hertz Alquiler de Maquinaria, S.L., BNS Automobile Funding B.V. and BNP Paribas S.A. as Security Agent
relating to Hertz Alquiler de Maquinaria*4.5.44

Contract on Pledges of Credit Rights, dated as of December 21, 2005, among Hertz de España, S.A., BNS Automobile Funding B.V. and BNP Paribas S.A. as Security Agent*4.5.45

Pledge of Credit Rights of Insurance Policies Contract, dated as of December 21, 2005, among Hertz de España, S.A., BNS Automobile Funding B.V. and BNP Paribas S.A. as Security
Agent*4.5.46

Pledge of Credit Rights of Bank Accounts, dated as of December 21, 2005 among Hertz de España, S.A., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas S.A., as Security
Agent*4.5.47

Pledges over VAT Credit Rights Contract, dated as of December 21, 2005, among Hertz de España, S.A., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas S.A., as Security
Agent*4.5.48

Contract on Pledges of Credit Rights, dated as of December 21, 2005, among Hertz Alquiler de Maquinaria, S.L., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas S.A., as Security
Agent*4.5.49

Pledge of Credit Rights of Bank Accounts Contract, dated as of December 21, 2005, among Hertz Alquiler de Maquinaria, S.L., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas S.A., as Security
Agent*4.5.50

Pledges of Credit Rights of Insurance Policies Contract, dates as of December 21, 2005, among Hertz Alquiler de Maquinaria, S.L., as Pledgor, BNS Automobile Funding B.V. and BNP Paribas S.A., as
Security Agent*4.5.51

Pledges over VAT Credit Rights Contracts, dated as of December 21, 2005, among Hertz Alquiler de Maquinaria S.L., as Pledgor, BNS Automobile Funding B.V., and BNP Paribas S.A., as Security
Agent*4.5.52

Pledges of Credit Rights Contract, dated as of December 21, 2005, among BNS Automobile Funding B.V., as Pledgor, Hertz de España S.A., Hertz Alquiler de Maquinaria, S.L., and BNP
Paribas S.A., as Security Agent*


199

---



Exhibit
Number

Description4.5.53

Pledges of Shares Contract, dated as of December 21, 2005, among Hertz International Ltd., Hertz Equipment Rental International, Limited, Hertz de España, S.A., and BNP Paribas S.A., as Security
Agent*4.5.54

Reserved4.5.55

Reserved4.5.56

Share Pledge Agreement, dated as of December 21, 2005, between Hertz Holdings South Europe S.r.l and BNP Paribas S.A. as Security Agent relating to the pledge of the entire share capital of Hertz
AG*4.5.57

Reserved4.5.58

Reserved4.5.59

Deed of Charge over Shares in Hertz Holdings III UK Limited, dated as of December 21, 2005, between Hertz International, Ltd. and BNP Paribas as Security Agent*4.5.60

Deed of Charge, dated as of December 21, 2005, between BNS Automobile Funding B.V. as Chargor and BNP Paribas as Security Agent*4.6.1

Credit Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and
Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc.,
and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Joint Lead Arrangers, and BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank
Securities Inc., Lehman Brothers, Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning
Managers*4.6.2

Guarantee and Collateral Agreement, dated as of December 21, 2005, by and between CCMG Corporation, The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as Administrative
Agent and Collateral Agent*4.6.3

Copyright Security Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral
Agent*4.6.4

Trademark Security Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral
Agent*4.6.5

Deed of Trust, Security Agreement, and Assignment of Leases and Rents and Fixture Filing, dated as of December 21, 2005, among the Hertz Corporation and Deutsche Bank AG, New York Branch*4.6.6

Term Loan Mortgage Schedule listing the material differences in mortgages from Exhibit 4.6.5 for each of the mortgaged properties*


200

---



Exhibit
Number

Description4.6.7

Amendment, dated as of June 30, 2006, among The Hertz Corporation, Deutsche Bank AG, New York Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by and
between The Hertz Corporation, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith
Incorporated, as Joint Lead Arrangers, and BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers, Inc., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of The Hertz
Corporation, as filed on July 7, 2006.)4.6.8

Second Amendment, dated as of February 9, 2007, among The Hertz Corporation, Deutsche Bank AG, New York Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005,
 by and between The Hertz Corporation, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith
Incorporated, as Joint Lead Arrangers, and BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers, Inc., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers**4.6.9

Third Amendment, dated as of May 23, 2007, among The Hertz Corporation, Deutsche Bank AG, New York Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by
and between The Hertz Corporation, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith
Incorporated, as Joint Lead Arrangers, and BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers, Inc., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers (Incorporated by reference to Exhibit 4.1.1 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on November 14, 2007.)


201

---



Exhibit
Number

Description4.6.10

Fourth Amendment, dated as of March 31, 2009, among The Hertz Corporation, Deutsche Bank AG, New York Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by
and between The Hertz Corporation, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith
Incorporated, as Joint Lead Arrangers, and BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers, Inc., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Hertz Global
Holdings, Inc., as filed on April 6, 2009.)4.7.1

Credit Agreement, dated as of December 21, 2005, by and between Hertz Equipment Rental Corporation, The Hertz Corporation, the Canadian Borrowers parties thereto, the several lenders from time to time parties
thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank AG, Canada Branch, as Canadian Agent and Canadian Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith
Incorporated, as Joint Lead Arrangers, BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers Inc., Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers*4.7.2

U.S. Guarantee and Collateral Agreement, dated as of December 21, 2005, by and between CCMG Corporation, The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as
Administrative Agent and Collateral Agent*4.7.3

Canadian Guarantee and Collateral Agreement, dated as of December 21, 2005, by and between Matthews Equipment Limited, Western Shut-Down (1995) Limited, certain of its subsidiaries, and Deutsche Bank AG, Canada
Branch, as Canadian Agent and Canadian Collateral Agent*4.7.4

Copyright Security Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral
Agent*4.7.5

Trademark Security Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, certain of its subsidiaries, and Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral
Agent*4.7.6

Trademark Security Agreement, dated as of December 21, 2005, by and between Matthews Equipment Limited and Deutsche Bank AG, Canada Branch, as Canadian Agent and Canadian Collateral Agent*4.7.7

Deed of Trust, Security Agreement, and Assignment of Leases and Rents and Fixture Filing, dated as of December 21, 2005, among the Hertz Corporation and Deutsche Bank AG, New York Branch*


202

---



Exhibit
Number

Description4.7.8

ABL Mortgage Schedule listing the material differences in mortgages from Exhibit 4.7.7 for each of the mortgaged properties*4.7.9

Amendment, dated as of June 30, 2006, among Hertz Equipment Rental Corporation, The Hertz Corporation, Matthews Equipment Limited, Western Shut-Down (1995) Limited, Deutsche Bank AG, New York Branch, Deutsche
Bank AG, Canada Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by and between Hertz Equipment Rental Corporation, The Hertz Corporation, the Canadian Borrowers parties thereto, the
several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank AG, Canada Branch, as Canadian Agent and Canadian Collateral Agent, Lehman Commercial Paper Inc.,
as Syndication Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch,
 Pierce, Fenner and Smith Incorporated, as Joint Lead Arrangers, BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers Inc., Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers (Incorporated by reference to Exhibit 4.2 to the Current
Report on Form 8-K of The Hertz Corporation, as filed on July 7, 2006.)4.7.10

Second Amendment, dated as of February 15, 2007, among Hertz Equipment Rental Corporation, The Hertz Corporation, Matthews Equipment Limited, Western Shut-Down (1995) Limited, Deutsche Bank AG, New York Branch,
Deutsche Bank AG, Canada Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by and between Hertz Equipment Rental Corporation, The Hertz Corporation, the Canadian Borrowers parties thereto,
the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank AG, Canada Branch, as Canadian Agent and Canadian Collateral Agent, Lehman Commercial
Paper Inc., as Syndication Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Joint Lead Arrangers, BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman
Brothers Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers**


203

---



Exhibit
Number

Description4.7.11

Third Amendment, dated as of May 23, 2007, among Hertz Equipment Rental Corporation, The Hertz Corporation, Matthews Equipment Limited, Western Shut-Down (1995) Limited, Deutsche Bank AG, New York Branch, Deutsche
Bank AG, Canada Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by and between Hertz Equipment Rental Corporation, The Hertz Corporation, the Canadian Borrowers parties thereto, the
several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank AG, Canada Branch, as Canadian Agent and Canadian Collateral Agent, Lehman Commercial Paper Inc.,
as Syndication Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman Brothers Inc., and Merrill Lynch & Co., Merrill Lynch,
 Pierce, Fenner and Smith Incorporated, as Joint Lead Arrangers, BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank Securities Inc., Lehman Brothers Inc., Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers (Incorporated by reference to Exhibit 4.1.2 to the Quarterly
Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)4.7.12

Fourth Amendment, dated as of September 30, 2007, among Hertz Equipment Rental Corporation, The Hertz Corporation, Matthews Equipment Limited, Western Shut-Down (1995) Limited, Hertz Canada Equipment Rental
Corporation, Deutsche Bank AG, New York Branch, Deutsche Bank AG, Canada Branch, and the other parties signatory thereto, to the Credit Agreement, dated as of December 21, 2005, by and between Hertz Equipment Rental Corporation, The Hertz
Corporation, the Canadian Borrowers parties thereto, the several lenders from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral Agent, Deutsche Bank AG, Canada Branch, as Canadian Agent and
Canadian Collateral Agent, Lehman Commercial Paper Inc., as Syndication Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Documentation Agent, Deutsche Bank Securities Inc., Lehman
Brothers Inc., and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as Joint Lead Arrangers, BNP Paribas, The Royal Bank of Scotland plc, and Calyon New York Branch, as Co-Arrangers, and Deutsche Bank
Securities Inc., Lehman Brothers Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, Goldman Sachs Credit Partners L.P., and JPMorgan Chase Bank, N.A., as Joint Bookrunning Managers
(Incorporated by reference to Exhibit 4.1.3 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)4.8

Intercreditor Agreement, dated as of December 21, 2005, by and between Deutsche Bank AG, New York Branch, as ABL Agent, Deutsche Bank AG, New York Branch, as Term Agent, as acknowledged by CCMG Corporation, The
Hertz Corporation and certain of its subsidiaries*4.9.1

Third Amended and Restated Base Indenture, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee (Incorporated by
reference to Exhibit 4.9.1 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.2

Amended and Restated Series 2005-1 Supplement to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and BNY Midwest Trust Company,
 as Trustee and Securities Intermediary**


204

---



Exhibit
Number

Description4.9.2.1

Amendment No. 1 dated as of October 24, 2007, to the Amended and Restated Series 2005-1 Supplement dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and The Bank Of New
York Trust Company, N.A., as Trustee and as Securities Intermediary, to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC and The Bank Of New York Trust Company, N.A.
(Incorporated by reference to Exhibit 4.1.7 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)4.9.2.2

Amendment No. 2, dated as of May 19, 2009, to the Amended and Restated Series 2005-1 Supplement dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and The Bank Of New
York Trust Company, N.A., as Trustee and as Securities Intermediary, to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC and The Bank Of New York Trust Company, N.A.
(Incorporated by reference to Exhibit 4.9.2.2 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)4.9.2.3

Amendment No. 3, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to the
Amended and Restated Series 2005-1 Supplement to the Third Amended and Restated Base Indenture, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as
Trustee (Incorporated by reference to Exhibit 4.9.2.3 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.3

Amended and Restated Series 2005-2 Supplement to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and BNY Midwest Trust Company,
 as Trustee and Securities Intermediary**4.9.3.1

Amendment No. 1 dated as of October 24, 2007, to the Amended and Restated Series 2005-2 Supplement dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and The Bank Of
New York Trust Company, N.A., as Trustee and as Securities Intermediary, to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC and The Bank Of New York Trust Company, N.A
(Incorporated by reference to Exhibit 4.1.8 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)4.9.3.2

Amendment No. 2, dated as of May 19, 2009, to the Amended and Restated Series 2005-2 Supplement dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and The Bank Of New
York Trust Company, N.A., as Trustee and as Securities Intermediary, to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC and The Bank Of New York Trust Company, N.A.
(Incorporated by reference to Exhibit 4.9.3.2 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)4.9.3.3

Amendment No. 3, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to the
Amended and Restated Series 2005-2 Supplement to the Third Amended and Restated Base Indenture, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as
Trustee (Incorporated by reference to Exhibit 4.9.3.3 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.4

Reserved


205

---



Exhibit
Number

Description4.9.5

Reserved4.9.6

Second Amended and Restated Series 2004-1 Supplement to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and BNY Midwest Trust
Company, as Trustee and Securities Intermediary**4.9.6.1

Amendment No. 1 dated as of October 24, 2007, to the Amended and Restated Series 2004-1 Supplement dated as of August 1, 2006, between Hertz Vehicle Financing LLC, as Issuer, and The Bank Of
New York Trust Company, N.A., as Trustee and as Securities Intermediary, to the Second Amended and Restated Base Indenture, dated as of August 1, 2006, between Hertz Vehicle Financing LLC and The Bank Of New York Trust Company, N.A.
(Incorporated by reference to Exhibit 4.1.6 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 14, 2007.)4.9.7

Third Amended and Restated Master Motor Vehicle Operating Lease and Servicing Agreement, dated as of September 18, 2009, between The Hertz Corporation, as Lessee and Servicer, and Hertz Vehicle Financing LLC,
 as Lessor (Incorporated by reference to Exhibit 4.9.7 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.8

Second Amended and Restated Participation, Purchase and Sale Agreement, dated as of September 18, 2009, by and among Hertz General Interest LLC, Hertz Vehicle Financing LLC and The Hertz Corporation, as
Lessee and Servicer (Incorporated by reference to Exhibit 4.9.8 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.9

Purchase and Sale Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, Hertz Vehicle Financing LLC and Hertz Funding Corp.*4.9.10

Contribution Agreement, dated as of December 21, 2005, by and between Hertz Vehicle Financing LLC and The Hertz Corporation*4.9.11

Third Amended and Restated Collateral Agency Agreement, dated as of September 18, 2009, among Hertz Vehicle Financing LLC, as a Grantor, Hertz General Interest LLC, as a Grantor, The Hertz Corporation,
as Servicer, The Bank of New York Mellon Trust Company, N.A., as Collateral Agent, The Bank of New York Mellon Trust Company, N.A., as Trustee and a Secured Party, and The Hertz Corporation, as a Secured Party (Incorporated by reference to
Exhibit 4.9.11 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.12

Second Amended and Restated Administration Agreement, dated as of September 18, 2009, by and among The Hertz Corporation, Hertz Vehicle Financing LLC, and The Bank of New York Mellon Trust Company, N.A., as
Trustee (Incorporated by reference to Exhibit 4.9.12 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.13

Second Amended and Restated Master Exchange Agreement, dated as of September 18, 2009, among The Hertz Corporation, Hertz Vehicle Financing LLC, Hertz General Interest LLC, Hertz Car Exchange Inc.,
and DB Services Tennessee, Inc. (Incorporated by reference to Exhibit 4.9.13 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)


206

---



Exhibit
Number

Description4.9.14

Second Amended and Restated Escrow Agreement, dated as of September 18, 2009, among The Hertz Corporation, Hertz Vehicle Financing LLC, Hertz General Interest LLC, Hertz Car Exchange Inc., and J.P.
Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 4.9.14 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.15

Reserved4.9.16

Reserved4.9.17

Reserved4.9.18

Letter of Credit Facility Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, Hertz Vehicle Financing LLC, and Ford Motor Company*4.9.19

Insurance Agreement, dated as of December 21, 2005, by and between MBIA Insurance Corporation, as Insurer, Hertz Vehicle Financing LLC, as Issuer, and BNY Midwest Trust Company, as Trustee*4.9.20

Insurance Agreement, dated as of December 21, 2005, by and between Ambac Assurance Corporation, as Insurer, Hertz Vehicle Financing LLC, as Issuer, and BNY Midwest Trust Company, as Trustee*4.9.21

Note Guaranty Insurance Policy, dated as of December 21, 2005, of MBIA Insurance Corporation, relating to Series 2005-1 Rental Car Asset Backed Notes*4.9.22

Reserved4.9.23

Note Guaranty Insurance Policy, dated as of December 21, 2005, of Ambac Assurance Corporation, relating to Series 2005-2 Rental Car Asset Backed Notes*4.9.24

Reserved4.9.25

Supplement to Second Amended and Restated Collateral Agency Agreement, dated as of January 26, 2007, among The Hertz Corporation, as Grantor, Gelco Corporation d/b/a GE Fleet Services, as Secured Party and BNY
Midwest Trust Company as Collateral Agent**4.9.26

Reserved4.9.27

Consent and Waiver Agreement, dated as of May 19, 2009, among MBIA Insurance Corporation, Hertz Vehicle Financing LLC, and The Bank of New York Mellon Trust Company, N.A. (Incorporated by reference to
Exhibit 4.9.27 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)4.9.28

MBIA Side Letter, dated as of May 19, 2009, between MBIA Insurance Corporation and The Hertz Corporation (Incorporated by reference to Exhibit 4.9.28 to the Quarterly Report on Form 10-Q of Hertz Global
Holdings, Inc., as filed on August 7, 2009)4.9.29

Consent And Waiver Agreement, dated as of May 19, 2009, among Ambac Assurance Corporation, Hertz Vehicle Financing LLC, and The Bank of New York Mellon Trust Company, N.A. (Incorporated by reference to
Exhibit 4.9.29 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)4.9.30

Ambac Side Letter, dated as of May 19, 2009, between Ambac Assurance Corporation and The Hertz Corporation (Incorporated by reference to Exhibit 4.9.30 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on August 7, 2009)


207

---



Exhibit
Number

Description4.9.31

Series 2009-1 Supplement, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to the
Third Amended and Restated Base Indenture, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee (Incorporated by reference to Exhibit 4.9.27 to
the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.32

Series 2009-1 Note Purchase Agreement (Series 2009-1 Variable Funding Rental Car Asset Backed Notes), dated as of September 18, 2009, among Hertz Vehicle Financing LLC, The Hertz Corporation, as
Administrator, certain conduit investors, each as a Conduit Investor, certain financial institutions, each as a Committed Note Purchaser, certain funding agents and Deutsche Bank AG, New York Branch, as Administrative Agent (Incorporated by reference
to Exhibit 4.9.28 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.9.33

Series 2009-2 Supplement, dated as of October 23, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee and Securities Intermediary, to
the Third Amended and Restated Base Indenture, dated as of September 18, 2009, between Hertz Vehicle Financing LLC, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee (Incorporated by reference to Exhibit 4.9.29
to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6, 2009)4.10

Amended and Restated Stockholders Agreement, dated as of November 20, 2006, among Hertz Global Holdings, Inc., Clayton, Dubilier & Rice Fund VII, L.P., CDR CCMG Co-Investor L.P., CD&R
Parallel Fund VII, L.P., Carlyle Partners IV, L.P., CP IV Coinvestment, L.P., CEP II U.S. Investments, L.P., CEP II Participations S.à.r.l SICAR, ML Global Private Equity Fund, L.P., Merrill Lynch Ventures L.P.
2001, ML Hertz Co-Investor, L.P. and CMC-Hertz Partners, L.P.**4.11

Registration Rights Agreement, dated as of December 21, 2005, among CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), Clayton, Dubilier & Rice Fund VII, L.P., CDR CCMG
Co-Investor L.P., Carlyle Partners IV, L.P., CP IV Coinvestment, L.P., CEP II U.S. Investments, L.P., CEP II Participations S.à.r.l, ML Global Private Equity Fund, L.P., Merrill Lynch Ventures L.P. 2001, ML Hertz
Co-Investor, L.P. and CMC-Hertz Partners, L.P. (Incorporated by reference to Exhibit 4.11 to Amendment No. 3 to the Registration Statement on Form S-1 (file No. 333-135782) as filed on October 23, 2006)4.12

Amendment No. 1, dated as of November 20, 2006, to the Registration Rights Agreement, dated as of December 21, 2005, among CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.),
Clayton, Dubilier & Rice Fund VII, L.P., CDR CCMG Co-Investor L.P., CD&R Parallel Fund VII, L.P., Carlyle Partners IV, L.P., CP IV Coinvestment, L.P., CEP II U.S. Investments, L.P., CEP II Participations
S.à.r.l SICAR, ML Global Private Equity Fund, L.P., Merrill Lynch Ventures L.P. 2001, ML Hertz Co-Investor, L.P. and CMC-Hertz Partners, L.P.**4.13

Credit Agreement, dated as of September 29, 2006, among The Hertz Corporation, Puerto Ricancars, Inc., the several banks and other financial institutions from time to time parties as lenders thereto and
Gelco Corporation d.b.a. GE Fleet Services, as administrative agent and collateral agents for the lenders thereunder (Incorporated by reference to Exhibit 4.13 to Amendment No. 4 to the Registration Statement on Form S-1 (file
No. 333-135782) as filed on October 27, 2006)


208

---



Exhibit
Number

Description4.13.1

First Amendment, dated as of October 6, 2006, to the Credit Agreement, dated as of September 29, 2006, among The Hertz Corporation, Puerto Ricancars, Inc., the several banks and other financial institutions
from time to time parties as lenders thereto and Gelco Corporation d.b.a. GE Fleet Services, as administrative agent and collateral agents for the lenders thereunder (Incorporated by reference to Exhibit 4.13.1 to Amendment No. 4 to the
Registration Statement on Form S-1 (file No. 333-135782) as filed on October 27, 2006)4.13.2

Second Amendment, dated as of October 31, 2006, to the Credit Agreement, dated as of September 29, 2006, among The Hertz Corporation, Puerto Ricancars, Inc., the several banks and other financial
institutions from time to time parties as lenders thereto and Gelco Corporation d.b.a. GE Fleet Services, as administrative agent and collateral agents for the lenders thereunder**4.14

Form of Stock Certificate (Incorporated by reference to Exhibit 4.14 to Amendment No. 6 to the Registration Statement on Form S-1 (File No. 333-135782) as filed on November 7, 2006)4.15

Terms of Offer between Hertz (U.K.) Limited and Lombard North Central PLC and The Royal Bank of Scotland, dated as of December 20, 2007, and Letter Agreement dated August 18, 1997 (Incorporated by
reference to Exhibit 4.15 to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as filed on February 29, 2008)4.16

Override Agreement between Hertz (U.K.) Limited and Lombard North Central Plc, dated as of March 25, 2008 (Incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on May 9, 2008)4.17

Guarantee of Hertz (U.K.) Limited to Lombard North Central Plc, dated as of December 21, 2007 (Incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q of Hertz Global Holdings,
 Inc., as filed on May 9, 2008)4.18

Affirmation of Guarantor Hertz International, Ltd., dated as of March 25, 2008, with respect to guarantee of Hertz (U.K.) Limited to Lombard North Central Plc, dated as of December 21, 2007
(Incorporated by reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on May 9, 2008)4.19

Indenture, dated as of May 27, 2009, between Hertz Global Holdings, Inc. and Wells Fargo Bank, National Association, as trustee, including Form of Note (Incorporated by reference to Exhibit 4.1 to the
Current Report on Form 8-K of Hertz Global Holdings, Inc., as filed on May 27, 2009)4.19.1

First Supplemental Indenture, dated as of August 19, 2009, between Hertz Global Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee, to the Indenture, dated as of May 27, 2009, between
Hertz Global Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee (Incorporated by reference to Exhibit 4.19.1 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 6,
2009)10.1

Hertz Global Holdings, Inc. Stock Incentive Plan *10.1.1

First Amendment to the Hertz Global Holdings, Inc. Stock Incentive Plan (Incorporated by reference to Exhibit 10.1.1 to Amendment No. 4 to the Registration Statement on Form S-1 (File
No. 333-135782) as filed on October 27, 2006)10.2

Form of Stock Subscription Agreement under Stock Incentive Plan *10.3

Form of Stock Option Agreement under Stock Incentive Plan *


209

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Exhibit
Number

Description10.4

Form of Management Stock Option Agreement under the Stock Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Hertz Global Holdings, Inc., as filed on
August 16, 2007)10.5

Non-Compete Agreement, dated April 10, 2000, between Hertz Europe Limited and Michel Taride (Incorporated by reference to Exhibit 10.6 to Amendment No. 1 to the Registration Statement on Form S-1
of The Hertz Corporation (File No. 333-125764) as filed on August 30, 2005)10.6

The Hertz Corporation Supplemental Retirement and Savings Plan (Incorporated by reference to Exhibit 10.7 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz Corporation (File
No. 333-125764) as filed on August 30, 2005)10.7

Amendment of The Hertz Corporation Supplemental Retirement and Savings Plan (as amended and restated, effective as of December 31, 2008) (Incorporated by reference to Exhibit 10.7 to the Annual Report on
Form 10-K of Hertz Global Holdings, Inc., as filed on March 3, 2009)10.8

The Hertz Corporation Executive Long Term Incentive Compensation Plan (Incorporated by reference to Exhibit 10.8 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz Corporation
(File No. 333-125764) as filed on August 30, 2005)10.9

The Hertz Corporation Supplemental Executive Retirement Plan (as amended and restated, effective December 31, 2008) (Incorporated by reference to Exhibit 10.9 to the Annual Report on Form 10-K of Hertz
Global Holdings, Inc., as filed on March 3, 2009)10.10

The Hertz Corporation Benefit Equalization Plan (as amended and restated, effective December 31, 2008) (Incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K of Hertz Global
Holdings, Inc., as filed on March 3, 2009)10.11

The Hertz Corporation Key Officer Postretirement Assigned Car Benefit Plan (Incorporated by reference to Exhibit 10.11 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz
Corporation (File No. 333-125764) as filed on August 30, 2005)10.12

The Hertz Corporation Retirement Plan (Incorporated by reference to Exhibit 10.12 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz Corporation (File No. 333-125764) as
filed on August 30, 2005)10.13

The Hertz Corporation (UK) 1972 Pension Plan (Incorporated by reference to Exhibit 10.13 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz Corporation (File No. 333-125764)
as filed on August 30, 2005)10.14

The Hertz Corporation (UK) Supplementary Unapproved Pension Scheme (Incorporated by reference to Exhibit 10.14 to Amendment No. 1 to the Registration Statement on Form S-1 of The Hertz Corporation (File
No. 333-125764) as filed on August 30, 2005)10.15

Reserved10.16

The Hertz Corporation 2005 Executive Incentive Compensation Plan *10.17

Reserved10.18

Amended and Restated Indemnification Agreement, dated as of December 21, 2005, by and between The Hertz Corporation, Hertz Vehicles LLC, Hertz Funding Corp., Hertz General Interest LLC, and Hertz
Vehicle Financing LLC*10.19

Reserved


210

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Exhibit
Number

Description10.20

Reserved10.21

Reserved10.22

Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The Hertz Corporation, Clayton, Dubilier & Rice Fund VII,
 L.P., CDR CCMG Co-Investor L.P., and Clayton, Dubilier & Rice, Inc.*10.22.1

Amendment No. 1, dated as of March 3, 2009, to the Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The
Hertz Corporation, Clayton, Dubilier & Rice Fund VII, L.P., CDR CCMG Co-Investor L.P., and Clayton, Dubilier & Rice, Inc. (Incorporated by reference to Exhibit 10.22.1 to the Quarterly Report on Form 10-Q of
Hertz Global Holdings, Inc., as filed on May 8, 2009)10.23

Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The Hertz Corporation, Carlyle Partners IV, L.P., CP IV
Coinvestment L.P., CEP II U.S. Investments, L.P., CEP II Participations S.à.r.l., and TC Group IV, L.L.C.*10.23.1

Amendment No. 1, dated as of March 3, 2009, to the Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The
Hertz Corporation, Carlyle Partners IV, L.P., CP IV Coinvestment L.P., CEP II U.S. Investments, L.P., CEP II Participations S.à.r.l., and TC Group IV, L.L.C. (Incorporated by reference to Exhibit 10.23.1 to the Quarterly
Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on May 8, 2009)10.24

Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The Hertz Corporation, ML Global Private Equity Fund, L.P.,
Merrill Lynch Ventures L.P. 2001, CMC-Hertz Partners, L.P., ML Hertz Co-Investor, L.P., and Merrill Lynch Global Partners, Inc.*10.24.1

Amendment No. 1 to Form of Sponsor Indemnification Agreement (Incorporated by reference to Exhibit 10.24.1 to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as filed on March 3,
 2009)10.24.2

Amendment No. 1, dated as of March 3, 2009, to the Indemnification Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), The
Hertz Corporation, ML Global Private Equity Fund, L.P., Merrill Lynch Ventures L.P. 2001, CMC-Hertz Partners, L.P., ML Hertz Co-Investor, L.P., and Merrill Lynch Global Partners, Inc. (Incorporated by reference to
Exhibit 10.24.2 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on May 8, 2009)10.25

Tax Sharing Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), CCMG Corporation, The Hertz Corporation, and Hertz International,
 Ltd.*10.26

Tax Sharing Agreement, dated as of December 21, 2005, by and between CCMG Holdings, Inc. (now known as Hertz Global Holdings, Inc.), CCMG Corporation, and The Hertz Corporation*10.27

Reserved


211

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Exhibit
Number

Description10.28

Amended and Restated Employment Agreement, dated as of December 31, 2008, between Hertz Global Holdings, Inc. and Mark P. Frissora (Incorporated by reference to Exhibit 10.28 to the Annual Report on
Form 10-K of Hertz Global Holdings, Inc., as filed on March 3, 2009)10.29

Form of Director Indemnification Agreement (Incorporated by reference to Exhibit 10.29 to Amendment No. 3 to the Registration Statement on Form S-1 (File No. 333-135782) as filed on October 23,
 2006))10.29.1

Amendment No. 1 to Form of Director Indemnification Agreement (Incorporated by reference to Exhibit 10.29.1 to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as filed on
March 3, 2009)10.30

Reserved10.31

Reserved10.32

Reserved10.33

Hertz Global Holdings, Inc. Director Stock Incentive Plan (Incorporated by reference to Exhibit 10.33 to Amendment No. 6 to the Registration Statement on Form S-1 (File No. 333-135782) as
filed on November 7, 2006)10.34

Reserved10.35

Reserved10.36

Form of Director Stock Option Agreement under Director Stock Incentive Plan (Incorporated by reference to Exhibit 10.36 to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as filed on
February 29, 2008)10.37

Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (incorporated by reference to Annex A of Hertz Global Holdings, Inc.'s Definitive Proxy Statement on Schedule 14A, as filed on April 7,
2008)10.37.1

Amendment No. 1 to the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.37.1 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc.,
 as filed on November 6, 2009)10.37.2

Amendment No. 2 to the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.37.2 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc.,
 as filed on November 6, 2009)10.37.3

Amendment No. 3 to the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan***10.38

Form of Employee Stock Option Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.38 to the Quarterly Report on Form 10-Q of Hertz Global
Holdings, Inc., as filed on November 7, 2008)10.39

Hertz Global Holdings, Inc. Severance Plan for Senior Executives (Incorporated by reference to Exhibit 10.39 to the Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on
November 7, 2008)10.40

Form of Change in Control Severance Agreement among Hertz Global Holdings, Inc. and our executive officers (Incorporated by reference to Exhibit 10.40 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on November 7, 2008)


212

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Exhibit
Number

Description10.41

Letter Agreement, dated as of February 1, 2008, between Hertz Global Holdings, Inc. and Joseph R. Nothwang (Incorporated by reference to Exhibit 10.41 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on November 7, 2008)10.42

Form of Director Stock Option Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan for awards to directors in May 2008 (Incorporated by reference to Exhibit 10.37 to the Quarterly
Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on November 7, 2008)10.43

Hertz Global Holdings, Inc. Employee Stock Purchase Plan (incorporated by reference to Annex B of Hertz Global Holdings, Inc.'s Definitive Proxy Statement on Schedule 14A, as filed on April 7,
2008)10.44

Letter Agreement, dated as of December 18, 2008, between Hertz Global Holdings, Inc. and Joseph R. Nothwang (Incorporated by reference to Exhibit 10.44 to the Annual Report on Form 10-K of Hertz
Global Holdings, Inc., as filed on March 3, 2009)10.45

Form of Performance Stock Unit Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.45 to the Annual Report on Form 10-K of Hertz Global
Holdings, Inc., as filed on March 3, 2009)10.45.1

Form of Amendment to Performance Stock Unit Agreement between [Participant] and Hertz Global Holdings, Inc. (Incorporated by reference to Exhibit 10.45.1 to the Quarterly Report on Form 10-Q of Hertz
Global Holdings, Inc., as filed on November 6, 2009)10.46

Form of Restricted Stock Unit Agreement under the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.46 to the Annual Report on Form 10-K of Hertz Global
Holdings, Inc., as filed on March 3, 2009)10.47

Subscription Agreement, dated as of May 19, 2009, between Hertz Global Holdings, Inc. and Clayton, Dubilier & Rice Fund VII, L.P. (Incorporated by reference to Exhibit 10.47 to the
Quarterly Report on Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)10.48

Subscription Agreement, dated as of May 19, 2009, between Hertz Global Holdings, Inc. and CD&R Parallel Fund VII, L.P. (Incorporated by reference to Exhibit 10.48 to the Quarterly Report on
Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)10.49

Subscription Agreement, dated as of May 19, 2009, between Hertz Global Holdings, Inc. and Carlyle Partners IV, L.P. (Incorporated by reference to Exhibit 10.49 to the Quarterly Report on
Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)10.50

Subscription Agreement, dated as of May 19, 2009, between Hertz Global Holdings, Inc. and CP IV Coinvestment, L.P. (Incorporated by reference to Exhibit 10.50 to the Quarterly Report on
Form 10-Q of Hertz Global Holdings, Inc., as filed on August 7, 2009)12

Computation of Consolidated Ratio of Earnings to Fixed Charges for the years ended December 31, 2009, 2008, 2007, 2006, and the periods ended December 31, 2005 and December 20, 200521.1

List of subsidiaries31.1-31.2

Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer32.1-32.2

Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer


Indicates
management compensation plan.


213

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*Incorporated
by reference to the exhibit of the same number to the Current Report on Form 8-K of The Hertz Corporation, as filed on
March 31, 2006.**Incorporated
by reference to the exhibit of the same number to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as
filed on March 30, 2007.***Incorporated
by reference to the exhibit of the same number to the Annual Report on Form 10-K of Hertz Global Holdings, Inc., as
filed on February 26, 2010.


As
of December 31, 2009, we had various additional obligations which could be considered long-term debt, none of which exceeded 10% of our total assets on a consolidated basis. We
agree to furnish to the SEC upon request a copy of any such instrument defining the rights of the holders of such long-term debt.

Schedules
and exhibits not included above have been omitted because the information required has been included in the financial statements or notes thereto or are not applicable or not required.

SUPPLEMENTAL INFORMATION

The Registrant is an indirect wholly owned subsidiary of Hertz Global Holdings, Inc. No annual report to security holders covering the
Registrant's last fiscal year or proxy statement, form of proxy or other proxy soliciting material has been sent to security holders.

214

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