10-Q

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

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2008
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-33139

HERTZ GLOBAL HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	20-3530539 (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)

Not Applicable
(Former name, former address and former fiscal year,
if changed since last report.)

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 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. (Check one):

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(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 Exchange Act). Yes o    No ý

There were 322,677,061 shares of the Registrant's common stock, par value $0.01 per share, issued and outstanding as of May 7, 2008.

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

INDEX

			Page
PART I. FINANCIAL INFORMATION
	ITEM 1.	Condensed Consolidated Financial Statements (Unaudited)
		Report of Independent Registered Public Accounting Firm	1
		Condensed Consolidated Balance Sheets as of March 31, 2008 and December 31, 2007	2
		Consolidated Statements of Operations for the three months ended March 31, 2008 and 2007	3
		Consolidated Statements of Cash Flows for the three months ended March 31, 2008 and 2007	4–5
		Notes to Condensed Consolidated Financial Statements	6–35
	ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	36–61
	ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	62
	ITEM 4.	Controls and Procedures	62
PART II. OTHER INFORMATION
	ITEM 1.	Legal Proceedings	63
	ITEM 1A.	Risk Factors	63
	ITEM 6.	Exhibits	64
SIGNATURE			65
EXHIBIT INDEX			66

PART I—FINANCIAL INFORMATION

ITEM l.    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Hertz Global Holdings, Inc.:

We have reviewed the accompanying condensed consolidated balance sheet of Hertz Global Holdings, Inc. and its subsidiaries as of March 31, 2008 and the related consolidated statements of operations for each of the three-month periods ended March 31, 2008 and March 31, 2007 and the consolidated statements of cash flows for the three-month periods ended March 31, 2008 and March 31, 2007. These interim financial statements are the responsibility of the Company's management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated balance sheet and the related consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2007 and the related consolidated statements of operations, of stockholders' equity and of cash flows for the year then ended (not presented herein), and in our report dated February 29, 2008 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2007 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
May 9, 2008

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands of Dollars)

Unaudited

				March 31, 2008			December 31, 2007
ASSETS
Cash and equivalents				$	728,869		$	730,203
Restricted cash					136,502			661,025
Receivables, less allowance for doubtful accounts of $14,601 and $11,137					1,526,560			1,690,956
Inventories, at lower of cost or market					131,300			118,997
Prepaid expenses and other assets					343,698			317,613
Revenue earning equipment, at cost:
	Cars				9,446,198			8,572,387
		Less accumulated depreciation			(1,039,702	)		(962,054	)
	Other equipment				3,098,513			3,108,799
		Less accumulated depreciation			(458,363	)		(411,272	)
			Total revenue earning equipment		11,046,646			10,307,860
Property and equipment, at cost:
	Land, buildings and leasehold improvements				1,047,321			1,022,438
	Service equipment				721,317			685,579
					1,768,638			1,708,017
		Less accumulated depreciation			(418,588	)		(362,469	)
			Total property and equipment		1,350,050			1,345,548
Other intangible assets, net					3,118,386			3,123,467
Goodwill					980,909			959,993
			Total assets	$	19,362,920		$	19,255,662
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable				$	1,592,954		$	1,064,878
Accrued liabilities					1,040,656			1,028,122
Accrued taxes					144,485			127,992
Debt					11,635,142			11,960,126
Public liability and property damage					335,999			343,028
Deferred taxes on income					1,733,395			1,797,099
			Total liabilities		16,482,631			16,321,245
Commitments and contingencies
Minority interest					25,862			21,028
Stockholders' equity:
	Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 322,519,501 and 321,862,083 shares issued				3,225			3,219
	Preferred Stock, $0.01 par value, 200,000,000 shares authorized, no shares issued				—			—
	Additional paid-in capital				2,480,069			2,469,213
	Retained earnings				212,746			270,450
	Accumulated other comprehensive income				158,387			170,507
			Total stockholders' equity		2,854,427			2,913,389
			Total liabilities and stockholders' equity	$	19,362,920		$	19,255,662

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

2

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands of Dollars, except per share data)

Unaudited

			Three Months Ended March 31,
			2008			2007
Revenues:
	Car rental		$	1,598,057		$	1,505,075
	Equipment rental			410,850			389,843
	Other			30,254			26,614
		Total revenues		2,039,161			1,921,532
Expenses:
	Direct operating			1,171,530			1,114,324
	Depreciation of revenue earning equipment			533,853			467,817
	Selling, general and administrative			193,397			200,377
	Interest, net of interest income of $10,051 and $12,091			196,201			229,587
		Total expenses		2,094,981			2,012,105
Loss before income taxes and minority interest				(55,820	)		(90,573	)
Benefit for taxes on income				2,950			32,117
Minority interest				(4,834	)		(4,110	)
Net loss			$	(57,704	)	$	(62,566	)
Weighted average shares outstanding (in thousands)
	Basic			322,222			320,625
	Diluted			322,222			320,625
Loss per share
	Basic		$	(0.18	)	$	(0.20	)
	Diluted		$	(0.18	)	$	(0.20	)

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

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of Dollars)

Unaudited

				Three Months Ended March 31,
				2008			2007
Cash flows from operating activities:
	Net loss			$	(57,704	)	$	(62,566	)
	Non-cash expenses:
		Depreciation of revenue earning equipment			533,853			467,817
		Depreciation of property and equipment			42,706			45,700
		Amortization of other intangible assets			16,375			15,382
		Amortization of deferred financing costs			8,047			13,248
		Amortization of debt discount			4,160			6,181
		Debt modification costs			—			16,177
		Stock-based employee compensation charges			6,033			6,099
		Unrealized loss on derivatives			5,976			255
		Loss on ineffectiveness of interest rate swaps			2,268			12,786
		Provision for losses on doubtful accounts			6,033			2,871
		Minority interest			4,834			4,110
		Deferred taxes on income			(12,774	)		(24,202	)
		Gain on sale of property and equipment			(5,422	)		(1,365	)
	Changes in assets and liabilities, net of effects of acquisition:
		Receivables			223,005			223,912
		Inventories, prepaid expenses and other assets			(40,074	)		(16,767	)
		Accounts payable			497,487			501,944
		Accrued liabilities			(100,003	)		(89,799	)
		Accrued taxes			9,302			(211	)
		Public liability and property damage			(15,908	)		1,830
			Net cash provided by operating activities	$	1,128,194		$	1,123,402

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

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(In Thousands of Dollars)

Unaudited

			Three Months Ended March 31,
			2008			2007
Cash flows from investing activities:
	Net change in restricted cash		$	526,558		$	360,954
	Revenue earning equipment expenditures			(2,880,336	)		(3,333,193	)
	Proceeds from disposal of revenue earning equipment			1,748,362			2,243,218
	Property and equipment expenditures			(40,798	)		(37,613	)
	Proceeds from disposal of property and equipment			11,723			10,797
	Acquisitions, net of cash acquired			(48,620	)		—
	Other investing activities			(447	)		257
		Net cash used in investing activities		(683,558	)		(755,580	)
Cash flows from financing activities:
	Proceeds from issuance of long-term debt			10,923			2,100
	Repayment of long-term debt			(87,847	)		(720,037	)
	Short-term borrowings:
		Proceeds		126,975			145,000
		Repayments		(224,201	)		—
		Ninety day term or less, net		(278,270	)		13,912
	Exercise of stock options			4,747			—
	Proceeds from disgorgement of stockholder short-swing profits			133			—
	Payment of financing costs			(4,502	)		(6,252	)
		Net cash used in financing activities		(452,042	)		(565,277	)
Effect of foreign exchange rate changes on cash and equivalents				6,072			(211	)
Net decrease in cash and equivalents during the period				(1,334	)		(197,666	)
Cash and equivalents at beginning of period				730,203			674,549
Cash and equivalents at end of period			$	728,869		$	476,883
Supplemental disclosures of cash flow information:
	Cash paid during the period for:
		Interest (net of amounts capitalized)	$	239,900		$	260,036
		Income taxes		8,915			3,204

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

5

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 1—Basis of Presentation

Hertz Global Holdings, Inc., or "Hertz Holdings," is our top-level holding company. The Hertz Corporation, or "Hertz," is our primary operating company and a direct wholly owned subsidiary of Hertz Investors, Inc., which is wholly owned by Hertz Holdings. "We," "us" and "our" mean Hertz Holdings and its consolidated subsidiaries, including Hertz.

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 Hertz's outstanding capital stock from RCA Corporation in 1985. Hertz Holdings was incorporated in Delaware in 2005 and had no operations prior to the Acquisition (as defined below).

On December 21, 2005, or the "Closing Date," investment funds associated with or designated by Clayton, Dubilier & Rice, Inc., or "CD&R," The Carlyle Group, or "Carlyle," and Merrill Lynch Global Private Equity, or "MLGPE," or collectively the "Sponsors," through CCMG Acquisition Corporation, a wholly owned subsidiary of Hertz Holdings (previously known as CCMG Holdings, Inc.) acquired all of Hertz's common stock from Ford Holdings LLC 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 Hertz's common stock through CCMG Acquisition Corporation as the "Acquisition." We refer to the Acquisition, together with related transactions entered into to finance the cash consideration for the Acquisition, to refinance certain of our existing indebtedness and to pay related transaction fees and expenses, as the "Transactions."

In November 2006, we completed our initial public offering of 88,235,000 shares of our common stock at a per share price of $15.00, with proceeds to us before underwriting discounts and offering expenses of approximately $1.3 billion. The proceeds were used to repay borrowings that were outstanding under a $1.0 billion loan facility entered into by Hertz Holdings, or the "Hertz Holdings Loan Facility," and to pay related transaction fees and expenses. The Hertz Holdings Loan Facility was used primarily to pay a special cash dividend of $4.32 per share to our common stockholders on June 30, 2006. The proceeds of the offering were also used to pay special cash dividends of $1.12 per share on November 21, 2006 to stockholders of record of Hertz Holdings immediately prior to the initial public offering.

In June 2007, the Sponsors completed a secondary public offering of 51,750,000 shares of their Hertz Holdings common stock at a per share price of $22.25. We did not receive any of the proceeds from the sale of these shares. We paid all of the expenses of the offering, excluding underwriting discounts and commissions of the selling stockholders, pursuant to a registration rights agreement we entered into at the time of the Acquisition. These expenses aggregated to approximately $2.0 million. Immediately following the secondary public offering, the Sponsors' ownership percentage in us decreased to approximately 55%.

The significant accounting policies summarized in Note 1 to our audited consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, filed with the United States Securities and Exchange Commission, or "SEC," on February 29, 2008, or the "Form 10-K," have been followed in preparing the accompanying condensed consolidated financial statements.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

In our opinion, all adjustments (which include only normal recurring adjustments) necessary for a fair statement of the results of operations for the interim periods have been made. Results for interim periods are not necessarily indicative of results for a full year.

The December 31, 2007 condensed consolidated balance sheet data was derived from our audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America, or "GAAP."

Certain prior period amounts have been reclassified to conform with current reporting.

Note 2—Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board, or "FASB," issued Statement of Financial Accounting Standards, or "SFAS," No. 157, "Fair Value Measurements," or "SFAS No. 157." SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. We adopted the provisions of SFAS No. 157 for financial assets and liabilities on January 1, 2008 and the provisions of SFAS No. 157 will be effective for non-financial assets and liabilities beginning in January 2009. We are currently reviewing SFAS No. 157, as it relates to our non-financial assets and liabilities, to determine its impact, if any, on our financial position or results of operations. See Note 14—Fair Value Measurements.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities," or "SFAS No. 159." SFAS No. 159 permits entities to choose to measure many financial assets and liabilities and certain other items at fair value. The provisions of SFAS No. 159 were effective for us beginning in January 2008. We chose not to change the measurement of the pertinent assets and liabilities as a result of SFAS No. 159; therefore, SFAS No. 159 did not have any impact on our financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business Combinations," or "SFAS No. 141(R)." The new standard requires the acquiring entity that gains control in a business combination to recognize 100% of the fair value of the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; requires that acquisition related costs be expensed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. The provisions of SFAS No. 141(R) will be effective for us beginning in January 2009.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements-an amendment of ARB No. 51," or "SFAS No. 160." SFAS No. 160 will change the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of stockholders' equity. Additionally, the amount of consolidated net income attributable to the parent and to the noncontrolling interests must be clearly identified and presented on the face of the consolidated statement of operations. Finally, changes in a parent's ownership interest while the parent retains its controlling financial interest in its subsidiary will be accounted for consistently as equity transactions. The provisions of SFAS No. 160 will be effective for us beginning in January 2009.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133," or "SFAS No. 161." SFAS No. 161 changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about how and why an entity uses derivative instruments, how derivative

7

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. The provisions of SFAS No. 161 will be effective for us beginning with our first quarterly report for the period ended March 31, 2009.

Note 3—Cash and Equivalents and Restricted Cash

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

Restricted cash includes cash and equivalents that are not readily available for our normal disbursements. Restricted cash and equivalents are restricted for the purchase of revenue earning vehicles and other specified uses under our Fleet Debt facilities, our like-kind exchange programs and to satisfy certain of our self insurance regulatory reserve requirements. As of March 31, 2008 and December 31, 2007, the portion of total restricted cash that was associated with our Fleet Debt facilities was $34.1 million and $573.1 million, respectively. The decrease in restricted cash associated with our Fleet Debt of $539.0 million from December 31, 2007 to March 31, 2008, primarily related to the timing of purchases and sales of revenue earning vehicles.

Note 4—Goodwill and Other Intangible Assets

We account for our goodwill and indefinite-lived intangible assets under SFAS No. 142. Under SFAS No. 142, goodwill and indefinite-lived intangible assets must be tested for impairment at least annually. We conducted the impairment review during the fourth quarter of 2007 and no impairment was determined to exist.

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

		Car Rental			Equipment Rental		Total
Balance as of December 31, 2007		$	318,134		$	641,859	$	959,993
	Other changes(1)		(1,444	)		22,360		20,916
Balance as of March 31, 2008		$	316,690		$	664,219	$	980,909

(1)

Consists of changes resulting from acquisitions performed during the three months ended March 31, 2008, the translation of foreign currencies at different exchange rates from the beginning of the period to the end of the period and pre-Acquisition tax adjustments.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

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

				March 31, 2008							December 31, 2007
				Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
Amortizable intangible assets:
	Customer-related			$	616,950	$	(140,155	)	$	476,795	$	617,012	$	(124,647	)	$	492,365
	Other				17,027		(2,372	)		14,655		5,898		(1,505	)		4,393
		Total			633,977		(142,527	)		491,450		622,910		(126,152	)		496,758
Indefinite-lived intangible assets:
	Trade name				2,624,000		—			2,624,000		2,624,000		—			2,624,000
	Other				2,936		—			2,936		2,709		—			2,709
		Total			2,626,936		—			2,626,936		2,626,709		—			2,626,709
			Total other intangible assets, net	$	3,260,913	$	(142,527	)	$	3,118,386	$	3,249,619	$	(126,152	)	$	3,123,467

Amortization of other intangible assets for the three months ended March 31, 2008 and 2007 was approximately $16.4 million and $15.4 million, respectively. Based on our amortizable intangible assets as of March 31, 2008, we expect amortization expense to be approximately $50.2 million for the remainder of 2008 and range from $62.2 million to $66.9 million for each of the next five fiscal years.

During the three months ended March 31, 2008, we added 28 locations by acquiring former franchisees in our domestic and international car rental operations, as well as three locations related to external acquisitions done within our domestic and international equipment rental operations. Total intangible assets acquired during the three months ended March 31, 2008 was $11.4 million. We recognized $11.2 million in amortizable intangible assets and $0.2 million in indefinite-lived intangible assets during the three months ended March 31, 2008. Each of these transactions has been accounted for using the purchase method of accounting in accordance with SFAS No. 142, and operating results of the acquirees from the dates of acquisition are included in our consolidated statements of operations. The allocation of the purchase price to the tangible and intangible net assets acquired is preliminary and subject to finalization. These acquisitions are not material, individually or collectively, to the consolidated amounts presented within our statement of operations for the three months ended March 31, 2008.

Note 5—Taxes on Income

The effective tax rate for the three months ended March 31, 2008 was 5.3%, which reflected the non-recognition of benefits for certain non-U.S. jurisdictions in cumulative net loss positions and other discrete items, which include $4.3 million, net, of out-of-period adjustments to the tax provision discussed below. The effective tax rate for the three months ended March 31, 2007 was 35.5%, which reflected the tax benefits attributable to the restructuring charges.

We adopted the provisions of FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109," or "FIN 48," on January 1, 2007. As of December 31, 2007, we had total unrecognized tax benefits of $35.5 million, of which $8.2 million, if

9

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

recognized, would favorably impact the effective tax rate in future periods. The $27.3 million remaining balance of our unrecognized tax benefits relates to pre-Acquisition items of $19.0 million and temporary difference items of $8.3 million. To the extent that these items reverse, in the future, the pre-Acquisition items will affect goodwill and the temporary items will affect current and deferred income tax provision but will not have any effective rate impact.

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, including such major jurisdictions as Australia, the Netherlands, Brazil, Canada, France, Germany, Italy, Spain, Ireland, the United Kingdom and the United States. The open tax years for these jurisdictions span from 1997 to 2007. 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.

In many cases, our uncertain tax positions are related to tax years that remain subject to examination by the relevant taxing authorities. We are not currently under audit by the Internal Revenue Service but are under audit in several non-U.S. jurisdictions. It is reasonably possible that approximately $19.0 million of unrecognized tax benefits may reverse within the next twelve months due to their 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 for taxes on income" in our consolidated statement of operations. During the three months ended March 31, 2008, we recognized approximately $0.6 million in net, after-tax interest and penalties. We had approximately $12.6 million of net, after-tax interest and penalties accrued in our condensed consolidated balance sheet at March 31, 2008.

The results of operations for the three months ended March 31, 2008 included $4.3 million, net, of out-of-period adjustments to the tax provision. These adjustments primarily related to the three months ended December 31, 2007 in the amount of $6.5 million. If recorded in 2007, these adjustments would have had a negative impact on our results of operations for both the three months and year ended December 31, 2007, of $0.02 per share on a diluted basis. The effect of these adjustments on the three months ended March 31, 2007 is de minimis. These adjustments had a negative impact on our results of operations for the three months ended March 31, 2008 of $0.01 per share on a diluted basis.

Note 6—Depreciation of Revenue Earning Equipment

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

		Three Months Ended March 31,
		2008		2007
Depreciation of revenue earning equipment		$	475,401	$	449,350
Adjustment of depreciation upon disposal of the equipment			32,519		5,057
Rents paid for vehicles leased			25,933		13,410
	Total	$	533,853	$	467,817

The adjustment of depreciation upon disposal of revenue earning equipment for the three months ended March 31, 2008 and 2007, included a net loss of $30.2 million and $8.5 million, respectively, on the disposal of vehicles used in our car rental operations and a net loss of $2.3 million and a net gain of

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

$3.4 million, respectively, on the disposal of industrial and construction equipment used in our equipment 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 the three months ended March 31, 2008, 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 $7.5 million in depreciation expense for the three months ended March 31, 2008. During the three months ended March 31, 2008, depreciation rates in certain of our equipment rental operations were decreased and resulted in net decreases of $3.3 million in depreciation expense.

For the three months ended March 31, 2008 and 2007, our worldwide car rental operations sold approximately 40,600 and 35,900 non-program cars, respectively, a 13.1% increase.

Note 7—Debt

Our "Senior Term Facility" is a secured term loan facility entered into by Hertz in connection with the Acquisition consisting of (a) a maximum borrowing capacity of $2,000.0 million (which was decreased in February 2007 to $1,400.0 million), which included a delayed draw facility of $293.0 million (which was utilized during 2006) and (b) a prefunded synthetic letter of credit facility in an aggregate principal amount of $250.0 million. This term loan facility and the synthetic letter of credit facility mature in December 2012.

Our "Senior ABL Facility" is a senior asset-based revolving loan facility entered into by Hertz and certain of its U.S. and of its Canadian subsidiaries in connection with the Acquisition with a maximum borrowing capacity of $1,600.0 million (which was increased in February 2007 to $1,800.0 million). Up to $200.0 million of the revolving loan facility is available for the issuance of letters of credit. The Senior ABL Facility matures in February 2012. We refer to the Senior Term Facility and the Senior ABL Facility together as the "Senior Credit Facilities."

Our "Senior Dollar Notes" are the $1,800.0 million aggregate principal amount of 8.875% Senior Notes due January 2014 issued by Hertz in connection with the Acquisition. Our "Senior Euro Notes" are the €225 million aggregate principal amount of 7.875% Senior Notes due January 2014 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 "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.

Our "Promissory Notes" consist of the outstanding untendered senior notes issued under three separate indentures existing prior to the Acquisition. These senior notes have maturities ranging from May 2008 to January 2028.

Our "U.S. Fleet Debt" consists of approximately $4,300.0 million of asset-backed securities issued on the Closing Date by Hertz Vehicle Financing LLC, or "HVF," a special purpose entity wholly owned by us, backed by our U.S. car rental fleet, all of which we issued under our existing asset-backed notes program, or the "ABS Program." An additional $600.0 million of previously issued asset-backed medium term notes, or "Pre-Acquisition ABS Notes," having maturities from May 2007 to May 2009 remained outstanding under the ABS Program following the Closing Date ($375.0 million of which have subsequently matured). We have also issued approximately $1,500 million of variable funding notes on the Closing Date in two series under these facilities, none of which were funded on the Closing Date. The U.S. Fleet Debt have maturities ranging from February 2009 to November 2010.

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Our "International Fleet Debt" consists of the aggregate borrowings of our foreign subsidiaries under asset-based revolving loan facilities entered into by 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 the United States), together with certain bankruptcy-remote special purpose entities, subject to borrowing bases comprised of rental vehicles, rental equipment, and related assets of certain of our foreign subsidiaries (substantially all of which are organized outside of the United States) or one or more special purpose entities, as the case may be, and rental equipment and related assets of certain of our subsidiaries organized outside North America or one or more special purpose entities, as the case may be. The subsidiaries conducting the car rental business in certain European jurisdictions may, at their option, continue to engage in capital lease financings relating to revenue earning equipment outside the International Fleet Debt facilities. In 2007 and 2008, additional borrowers consented to the senior bridge facility agreement under the International Fleet Debt facilities in connection with the expected take-out of the interim facilities entered into at the time of the Acquisition. The International Fleet Debt matures in December 2010.

Our "Fleet Financing Facility" is a credit agreement entered into by Hertz and its subsidiary, Puerto Ricancars, Inc., or "PR Cars," in September 2006, which provides for a commitment of up to $275.0 million 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. The Fleet Financing Facility matures in December 2011, but Hertz and PR Cars may terminate or reduce the commitments of the lenders thereunder at any time.

Our "Brazilian Fleet Financing Facility" refers to the agreement dated April 4, 2007 amending and restating our Brazilian subsidiary's credit facility (which was originally included under the International Fleet Debt facilities) to, among other things, increase the facility to R$130 million (or $74.4 million, calculated using exchange rates in effect on March 31, 2008) consisting of a R$70 million (or $40.1 million) term loan facility and a R$60 million (or $34.3 million) revolving credit facility. This facility matures in December 2010.

Our "Canadian Fleet Financing Facility" refers to a Note Purchase Agreement entered into by our indirect subsidiary, Hertz Canada Limited, and certain of its subsidiaries, on May 30, 2007, 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 car rental fleet. The new facility refinanced the Canadian portion of the International Fleet Debt facilities. The maximum amount which may be borrowed under the new facility is CAN$400 million (or $390.1 million). The Canadian Fleet Facility matures in May 2012.

Our "Belgian Fleet Financing Facility" consists of a secured revolving credit facility entered into by our Belgian subsidiary, Hertz Belgium BVBA on June 21, 2007, with varying facility limits of up to €27.4 million (or $43.3 million) maturing in December 2010. This facility refinanced the Belgian portion of our International Fleet Debt facilities.

Our "U.K. Leveraged Financing" 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 £135.0 million (or $268.3 million). The amount available under this facility increases over the term of the facility. The facility is scheduled to mature in December 2013. This facility refinanced the U.K. portion of the International Fleet Debt facilities.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

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

				March 31, 2008		December 31, 2007
Corporate Debt
Senior Term Facility, average interest rate: 2008, 4.4%; 2007, 6.9% (effective average interest rate: 2008, 4.5%; 2007, 7.0%); net of unamortized discount: 2008, $22,173; 2007, $23,350				$	1,360,414	$	1,362,702
Senior ABL Facility, average interest rate: 2008, 4.6%; 2007, 6.0% (effective average interest rate: 2008, 4.9%; 2007, 6.6%); net of unamortized discount: 2008, $17,620; 2007, $19,086					401,323		191,803
Senior Notes, average interest rate: 2008, 8.7%; 2007, 8.7%					2,155,675		2,131,370
Senior Subordinated Notes, average interest rate: 2008, 10.5%; 2007, 10.5%					600,000		600,000
Promissory Notes, average interest rate: 2008, 7.1%; 2007, 7.1% (effective average interest rate: 2008, 7.2%; 2007, 7.2%); net of unamortized discount: 2008, $4,796; 2007, $5,102					509,748		509,443
Notes payable, average interest rate: 2008, 4.4%; 2007, 5.5%					9,499		1,942
Foreign subsidiaries' debt denominated in foreign currencies:
	Short-term bank borrowings, average interest rate: 2008, 11.3%; 2007, 13.2%				2,881		1,082
	Other borrowings, average interest rate: 2008, 5.1%; 2007, 6.0%				9,141		4,516
			Total Corporate Debt		5,048,681		4,802,858
Fleet Debt
U.S. Fleet Debt and pre-Acquisition ABS Notes, average interest rate: 2008, 4.5%; 2007, 4.5% (effective average interest rate: 2008, 4.5%; 2007, 4.5%); net of unamortized discount: 2008, $2,596; 2007, $3,991					4,522,404		4,603,509
International Fleet Debt, average interest rate: 2008, 6.8%; 2007, 6.1% (effective average interest rate: 2008, 6.8%; 2007, 6.1%); net of unamortized discount: 2008, $261; 2007, $279					1,532,001		1,912,386
Fleet Financing Facility, average interest rate: 2008, 4.0%; 2007, 6.3% (effective average interest rate: 2008, 4.0%; 2007, 6.3%); net of unamortized discount: 2008, $1,531; 2007, $1,641					172,469		170,359
Brazilian Fleet Financing Facility, average interest rate: 2008, 12.7%; 2007, 13.2%					69,436		62,907
Canadian Fleet Financing Facility, average interest rate: 2008, 4.7%; 2007, 5.8%					133,453		155,391
Belgian Fleet Financing Facility, average interest rate: 2008, 5.6%; 2007, 6.2%					34,777		30,044
U.K. Leveraged Financing, average interest rate: 2008, 5.4%; 2007, 4.0%					121,921		222,672
			Total Fleet Debt		6,586,461		7,157,268
		Total Debt		$	11,635,142	$	11,960,126

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

The aggregate amounts of maturities of debt for each of the twelve-month periods ending March 31 (in millions of dollars) are as follows: 2009, $3,668.7 (including $2,447.0 of other short-term borrowings, of which $2,444.1 were under long-term committed credit facilities); 2010, $813.4; 2011, $2,838.3; 2012, $0.1; 2013, $1,558.8; after 2013, $2,804.8.

Our short-term borrowings as of March 31, 2008 include, among other items, the amounts outstanding under our Senior ABL Facility, International Fleet Debt facility, Fleet Financing Facility, Brazilian Fleet Financing Facility, Canadian Fleet Financing Facility, Belgian Fleet Financing Facility and our U.K. Leveraged Financing facility. 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.

As of March 31, 2008, there were outstanding standby letters of credit totaling $469.6 million. Of this amount, $234.0 million has been issued for the benefit of the ABS Program ($200.0 million of which was issued by Ford and $34.0 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 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 March 31, 2008, the full amount of these letters of credit was undrawn.

As of March 31, 2008, the aggregate principal amount of $225.0 million (net of $2.5 million discount) of pre-Acquisition ABS Notes were outstanding and the average interest rate was 3.1%.

As of March 31, 2008, there were $34.1 million of capital lease financings outstanding. These capital lease financings are included in the International Fleet Debt total and mature in August 2010.

Guarantees and Security

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 Hertz Equipment Rental Corporation, or "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, in the case of the Senior ABL Facility, other secured fleet financing). Consequently, these assets will not be available to satisfy the claims of Hertz's general creditors.

The U.S. Fleet Debt issued on the Closing Date has the benefit of financial guaranty insurance policies under which either MBIA Insurance Corporation or Ambac Assurance Corporation will guarantee the timely payment of interest on and ultimate payment of principal of such notes.

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,

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

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 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 U.S. 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.

The Brazilian Fleet Financing Facility is secured by our Brazilian subsidiary's fleet of vehicles and backed by a $63.5 million Hertz guarantee.

The Canadian Fleet Financing Facility is secured by the fleet vehicles used in the Canadian operations.

The Belgian Fleet Financing Facility is guaranteed by HIL and the fleet assets used in the Belgian operations are pledged as collateral.

The U.K. Leveraged Financing facility is guaranteed by HIL.

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 the Senior ABL Facility, the ABS Program, the International Fleet Debt facilities or the fleet financing facility relating to our car rental fleet in Hawaii, Kansas, Puerto Rico and St. Thomas, the U.S. Virgin Islands, Brazil, Canada, Belgium and our U.K. leveraged financing. Substantially all our other assets in the United States are also subject to liens in favor of our lenders under the Senior Credit Facilities, and substantially all of 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 or (in the case of our Canadian HERC business) the Senior ABL Facility. None of such assets will be available to satisfy the claims of our general creditors.

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 March 31, 2008, we were in compliance with all of these financial covenants.

Derivatives

We utilize certain derivative instruments to enhance our ability to manage risk relating to cash flow and interest rate exposure. See Note 14—Fair Value Measurements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

Credit Facilities

As of March 31, 2008, the following credit facilities were available for the use of Hertz and its subsidiaries:

•

The Senior Term Facility had approximately $10.2 million available under the letter of credit facility.



•

The Senior ABL Facility had the foreign currency equivalent of approximately $1,362.6 million of remaining capacity, all of which was available under the borrowing base limitation and $179.3 million of which was available under the letter of credit facility sublimit.



•

The U.S. Fleet Debt had approximately $1,500.0 million of remaining capacity and $36.2 million available under the borrowing base limitation. No additional amounts were available under the letter of credit facility.



•

The International Fleet Debt facilities had the foreign currency equivalent of approximately $1,465.0 million of remaining capacity and $272.3 million available under the borrowing base limitation.



•

The Fleet Financing Facility had approximately $102.5 million of remaining capacity and $6.5 million available under the borrowing base limitation.



•

The Brazilian Fleet Financing Facility had the foreign currency equivalent of approximately $6.0 million of remaining capacity and $1.3 million available under the borrowing base limitation.



•

The Canadian Fleet Financing Facility had the foreign currency equivalent of approximately $256.7 million of remaining capacity and no amounts available under the borrowing base limitation.



•

The Belgian Fleet Financing Facility had the foreign currency equivalent of approximately $0.6 million of remaining capacity and $14.3 million available under the borrowing base limitation.



•

The U.K. Leveraged Financing facility had the foreign currency equivalent of approximately $146.4 million of remaining capacity and no amounts available under the borrowing base limitation.

As of March 31, 2008, substantially all of our assets were pledged under one or more of the facilities noted above. As of March 31, 2008 and December 31, 2007, accrued interest was $84.7 million and $138.3 million, respectively, which is reflected in our condensed consolidated balance sheet in "Accrued liabilities."

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

Note 8—Employee Retirement Benefits

The following table sets forth the net periodic pension and postretirement (including health care, life insurance and auto) expense (in millions of dollars):

		Three Months Ended March 31,
		Pension Benefits
														Postretirement Benefits (U.S.)
		U.S.						Non-U.S.
		2008			2007			2008			2007			2008			2007
Components of Net Periodic Benefit Cost:
	Service cost	$	6.5		$	7.0		$	2.1		$	2.5		$	0.1		$	0.1
	Interest cost		6.9			6.2			2.7			2.3			0.2			0.2
	Expected return on plan assets		(6.1	)		(6.3	)		(3.0	)		(2.7	)		—			—
	Net amortizations		0.2			—			(0.1	)		—			(0.1	)		—
	Settlement loss (gain)		1.3			4.6			—			(0.1	)		—			0.3
	Net pension/postretirement expense	$	8.8		$	11.5		$	1.7		$	2.0		$	0.2		$	0.6

Our policy for funded plans is to contribute annually, at a minimum, amounts required by applicable laws, regulations and union agreements. From time to time, we make contributions beyond those legally required. For the three months ended March 31, 2008 and 2007, we contributed $14.3 million and $12.2 million, respectively, to our worldwide pension plans, including a discretionary contribution of $1.1 million and $1.2 million, respectively, to our U.K. defined benefit pension plan and benefit payments made through unfunded 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. 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 condensed 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.

Note 9—Stock-based Compensation

In February 2008, Hertz Holdings granted options to acquire 2,481,440 million shares of Hertz Holdings' common stock to key executives, employees and non-management directors at exercise prices ranging from $12.74 to $12.97 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." These options are subject to and governed by the terms of the Stock Incentive Plan and the Director Plan. We have accounted for our employee stock-based compensation awards in accordance with SFAS No. 123R, "Share-Based Payment." The options are being accounted for as equity-classified awards.

For the three months ended March 31, 2008, we recognized compensation cost of approximately $6.0 million ($3.7 million, net of tax). As of March 31, 2008, there was approximately $99.4 million of total

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

unrecognized compensation cost related to non-vested stock options granted by Hertz Holdings under the Stock Incentive 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 2.1 years, on a weighted average basis, of the requisite service period that began on the grant dates.

On February 28, 2008, our Board of Directors adopted the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan, or the "Omnibus Plan," subject to the approval of our stockholders at the annual meeting of stockholders to be 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 (shares and units), restricted stock, restricted stock units and deferred stock units to key executives, employees and non-management directors.

The purpose of the Omnibus Plan is to foster and promote the long-term financial success of Hertz Holdings and its subsidiaries and materially increase shareholder value by (a) motivating superior performance by plan participants, (b) providing participants with an ownership interest in Hertz Holdings, and (c) enabling Hertz Holdings and its subsidiaries to attract and retain the services of outstanding employees upon whose judgment, interest and special effort the successful conduct of its operations is largely dependent.

The compensation committee of our Board of Directors has the authority to grant awards under the Omnibus Plan to employees and non-employee directors of Hertz Holdings and its subsidiaries, and determines the type or types of awards to be granted and the terms and conditions of any and all awards.

A maximum of 17.7 million shares of Hertz Holdings' common stock will be reserved for issuance under the Omnibus Plan, which will include shares that remain available under the Stock Incentive Plan and the Director Plan, both of which will terminate upon adoption of the Omnibus Plan by our stockholders. 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, the Stock Incentive Plan, or the Director 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 grant under the Omnibus Plan.

All stock options and stock appreciation rights granted under the Omnibus Plan will have a per-share exercise price no less than 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. No stock options or stock appreciation rights will be exercisable after ten years from the grant date. The compensation committee may 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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

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 (one year in the case of death or disability).

Performance stock, performance stock units 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. 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 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. 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 common stock to the participant for each deferred stock unit the participant then holds.

Upon a change in control of Hertz Holdings, unless outstanding awards are honored, assumed or substituted with alternative awards that provide substantially similar terms, conditions and economic value to the original awards granted under the Omnibus Plan, all awards will immediately become exercisable and any restrictions related to the awards will lapse.

Note 10—Segment Information

We follow SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," which requires companies to disclose segment data based on how management makes decisions about allocating resources to segments and measuring their performance.

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 expenses, certain interest expense (including net interest on corporate debt), as well as other insignificant 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 minority interest plus 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 to

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

revenues and adjusted pre-tax income (loss) and the reconciliation to consolidated amounts for the three months ended March 31, 2008 and 2007 are summarized below (in millions of dollars).

		Three Months Ended March 31,
		Revenues				Adjusted Pre-Tax Income (Loss)
		2008		2007		2008			2007
Car rental		$	1,626.2	$	1,529.7	$	39.3		$	36.9
Equipment rental			411.0		389.9		59.3			65.6
Other reconciling items			2.0		1.9		(81.5	)		(86.4	)
	Total	$	2,039.2	$	1,921.5	$	17.1		$	16.1

The following table reconciles the loss before income taxes and minority interest to adjusted pre-tax income for the three months ended March 31, 2008 and 2007 (in millions of dollars):

		Three Months Ended March 31,
		2008			2007
Loss before income taxes and minority interest		$	(55.8	)	$	(90.6	)
Adjustments:
	Purchase accounting(a)		24.8			23.1
	Non-cash debt charges(b)		14.5			48.4
	Restructuring charges		19.6			32.6
	Restructuring related charges		3.5			—
	Unrealized loss on derivatives(c)		6.0			—
	Vacation accrual adjustment(d)		3.2			—
	Management transition costs		1.3			2.6
Adjusted pre-tax income		$	17.1		$	16.1

(a)

Represents the purchase accounting effects of the Acquisition and any subsequent acquisitions 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.

(b)

Represents non-cash debt charges relating to the amortization of deferred debt financing costs and debt discounts. For the three months ended March 31, 2008, also includes $2.3 million associated with the ineffectiveness of our HVF swaps. For the three months ended March 31, 2007, also includes the write-off of $16.2 million of unamortized debt costs associated with a debt modification and $12.8 million associated with the ineffectiveness of our HVF swaps.

(c)

For the three months ended March 31, 2008, represents an unrealized loss on our interest rate swaptions.

(d)

Represents an increase in the employee vacation accrual during the three months ended March 31, 2008 relating to a change in our U.S. vacation policy in the second quarter of 2007, which now 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.

The increase in total assets from December 31, 2007 to March 31, 2008 in our condensed consolidated balance sheet was primarily due to an increase in revenue earning vehicles in our car rental segment, partly offset by a decrease in restricted cash and receivables.

Note 11—Comprehensive Income (Loss)

Accumulated other comprehensive income as of March 31, 2008 and December 31, 2007 primarily includes accumulated translation gains of $276.5 million and $217.9 million, respectively, changes in unrecognized net periodic pension and postretirement costs of $25.8 million and $26.1 million, respectively, partly offset by unrealized losses on cash flow hedges of $101.3 million and $45.6 million, respectively, and unrealized losses on our Euro-denominated debt of $42.6 million and $27.8 million, respectively.

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Unaudited

Comprehensive loss for the three months ended March 31, 2008 and 2007 were as follows (in thousands of dollars):

			Three Months Ended March 31,
			2008			2007
Net loss			$	(57,704	)	$	(62,566	)
Other comprehensive income (loss), net of tax:
	Foreign currency translation adjustments			58,544			12,466
	Unrealized gain (loss) on available-for-sale securities			13			(7	)
	Unrealized loss on Euro-denominated debt			(14,765	)		(2,130	)
	Change in unrecognized net periodic pension and postretirement cost			(243	)		(34	)
	Change in fair value of cash flow hedges			(55,669	)		(2,923	)
		Total other comprehensive income (loss)		(12,120	)		7,372
Comprehensive loss			$	(69,824	)	$	(55,194	)

Note 12—Earnings (Loss) Per Share

Basic earnings (loss) per share is computed based upon the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed based upon the weighted average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, except when the effect would be anti-dilutive.

The following table sets forth the computation of basic and diluted loss per share (in thousands of dollars, except share and per share amounts):

		Three Months Ended March 31,
		2008			2007
Basic and diluted loss per share:
Numerator:
	Net loss	$	(57,704	)	$	(62,566	)
Denominator:
	Weighted average shares used in basic and diluted computation (in thousands)		322,222			320,625
Loss per share, basic		$	(0.18	)	$	(0.20	)
Loss per share, diluted		$	(0.18	)	$	(0.20	)

Diluted loss per share computations for the three months ended March 31, 2008 and 2007 excluded the weighted-average impact of the assumed exercise of approximately 16.1 million and 15.5 million stock options, respectively, because such impact would be antidilutive.

Note 13—Restructuring

As part of our ongoing effort to implement our strategy of reducing operating costs, we are evaluating our workforce and operations and making adjustments, including headcount reductions and process

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Unaudited

improvements to optimize work flow at rental locations and maintenance facilities as well as streamlining our back-office operations, initiating business process reengineering and evaluating outsourcing opportunities. When we make adjustments to our workforce and operations, we may incur incremental expenses that delay the benefit of a more efficient workforce and operating structure, but we believe that increasing our operating efficiency and reducing the costs associated with the operation of our business are important to our long-term competitiveness.

On January 5, 2007, we announced the first in a series of initiatives to further improve our competitiveness through targeted job reductions affecting approximately 200 employees primarily at our corporate headquarters in Park Ridge, New Jersey and our U.S. service center in Oklahoma City, Oklahoma.

On February 28, 2007, we announced the second initiative to further improve our competitiveness and industry leadership through targeted job reductions affecting approximately 1,350 employees primarily in our U.S. 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, as well as in Canada, Puerto Rico, Brazil, Australia and New Zealand.

On June 1, 2007, we announced the third initiative to further improve our operational efficiency through targeted reductions affecting approximately 480 positions in our U.S. car and equipment rental operations, as well as financial and reservations-related positions in our U.S. service center in Oklahoma City, Oklahoma.

During 2007, we began to implement cost saving initiatives in our European operations, and we are continuing implementation of these measures in 2008. During the fourth quarter of 2007, we finalized or substantially completed contract terms with industry leading service providers to outsource select functions 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. Substantially all of the selected functions in these areas will be transitioned to the third-party service providers which will result in a decrease in headcount by the end of the third quarter of 2008.

In the first quarter of 2008, to continue improving our competitiveness and industry position, we initiated job reductions affecting approximately 950 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.

For the three months ended March 31, 2008, our consolidated statement of operations includes restructuring charges relating to the initiatives discussed above of $19.6 million which is composed of $14.3 million of involuntary termination benefits, $3.4 million in consulting costs and $1.9 million of other restructuring charges. The after-tax effect of the restructuring charges increased diluted loss per share by $0.04.

We plan to announce, as plans are finalized, other efficiency initiatives during the remainder of 2008. We currently anticipate incurring future charges to earnings in connection with those initiatives; however, we have not yet developed detailed estimates of these expenses.

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Unaudited

Restructuring charges in our consolidated statement of operations can be summarized as follows (in thousands of dollars):

			Three Months Ended March 31,
			2008		2007
By Caption:
	Direct operating		$	8,045	$	12,945
	Selling, general and administrative			11,518		19,704
		Total	$	19,563	$	32,649

			Three Months Ended March 31,
			2008		2007
By Segment:
	Car rental		$	15,739	$	19,750
	Equipment rental			1,735		1,784
	Other reconciling items			2,089		11,115
		Total	$	19,563	$	32,649

Our condensed consolidated balance sheet as of March 31, 2008, included accruals relating to the restructuring program of $20.1 million. We expect to pay substantially all of the remaining restructuring obligations during 2008. The following table sets forth the activity affecting the accrual during the three months ended March 31, 2008 (in thousands of dollars):

		Involuntary Termination Benefits			Pension and Post Retirement Expense			Consultant Costs			Other			Total
Balance as of January 1, 2008		$	15,190		$	105		$	2,105		$	788		$	18,188
	Charges incurred		14,335			5			3,365			1,858			19,563
	Cash payments		(12,369	)		(5	)		(3,470	)		(2,109	)		(17,953	)
	Other(1)		229			8			(5	)		39			271
Balance as of March 31, 2008		$	17,385		$	113		$	1,995		$	576		$	20,069

(1)

Consists of $0.3 million in foreign currency translation gains, which have been included within "Accumulated other comprehensive income" on our condensed consolidated balance sheet.

Note 14—Fair Value Measurements

Effective January 1, 2008, we adopted SFAS No. 157 as it relates to our financial assets and liabilities. The provisions of SFAS No. 157 are effective for us for our non-financial assets and liabilities beginning in January 2009. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. SFAS 157 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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Unaudited

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2008 (in thousands of dollars):

			March 31, 2008(1)
Assets:
	HIL swaptions		$	3,186
	Foreign currency options			137
		Total assets	$	3,323
Liabilities:
	HVF swaps(2)		$	144,709
		Total liabilities	$	144,709

(1)

All fair value measurements were primarily based upon significant observable (Level 2) inputs.

(2)

As the HVF swaps are in a liability position, the measurement of fair value reflects the nonperformance risk associated with the liability, as required by SFAS No. 157.

Derivative Instruments and Hedging Activities

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 in accordance with SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." These agreements mature at various terms, in connection with the scheduled maturity of the associated debt obligations, through November 2010. Under these agreements, HVF pays 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. HVF paid $44.8 million to reduce the fixed interest rate on the swaps from the prevailing market rates to 4.5%. Ultimately, this amount will be recognized as additional interest expense over the remaining terms of the swaps, which range from approximately 1 to 3 years. For the three months ended March 31, 2008 and 2007, we recorded an expense of $2.3 million and $12.8 million, respectively, in our consolidated statement of operations, in "Interest, net of interest income," associated with the ineffectiveness of our HVF Swaps. The ineffectiveness resulted from a decline in the value of the swaps due to a decrease in forward interest rates along with a decrease in the time value component as we continue to approach the maturity dates of the swaps. The effective portion of the change in fair value of the swaps is recorded in "Accumulated other comprehensive income." As of March 31, 2008 and December 31, 2007, the balance reflected in "Accumulated other comprehensive income," net of tax, was a loss of $101.3 million and $45.6 million, respectively. As of March 31, 2008 and December 31, 2007, the fair value of our HVF Swaps was a liability of $144.7 million and $50.2 million, respectively, which is reflected in our condensed consolidated balance sheet in "Accrued liabilities." The fair value of the HVF Swaps were calculated using the income approach and applying observable market data.

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

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 indentures governing the U.S. Fleet Debt) 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. In that event we would also be required to apply a proportional amount, or substantially all in the case of insolvency of both insurers, of all rental payments by Hertz under its lease with its bankruptcy-remote special purpose entity and all car disposal proceeds under the applicable facility, or under substantially all U.S. Fleet Debt facilities in the case of insolvency of both insurers, to pay down the amounts owed under the facility or facilities instead of applying those proceeds to purchase additional cars and/or for working capital purposes. An insurer event of bankruptcy could have a material adverse effect on our liquidity if we were unable to negotiate mutually acceptable new terms with our U.S. Fleet Debt lenders or if alternate funding were not available to us.

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 now expire on June 5, 2008. As of March 31, 2008 and December 31, 2007, the fair value of the swaptions was €2.0 million (or $3.2 million) and €6.2 million (or $9.2 million, calculated using exchange rates in effect on December 31, 2007), respectively, which is reflected in our condensed consolidated balance sheet in "Prepaid expenses and other assets." The fair value of the HIL swaptions were calculated using the income approach and applying observable market data. During the three months ended March 31, 2008 and 2007, the fair value adjustment related to these swaptions was a loss of $6.0 million and $0.3 million, respectively, which was recorded in our consolidated statement of operations in "Selling, general and administrative" expenses.

We have purchased foreign currency option contracts 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 currency option contracts 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 March 31, 2008, were approximately $0.2 million, and we limit counterparties to financial institutions that have strong credit ratings. As of March 31, 2008 and December 31, 2007, the fair value of all outstanding foreign currency option contracts was approximately $0.1 million and $0.1 million, respectively, which was recorded in our condensed consolidated balance sheet in "Prepaid expenses and other assets." The fair value of the foreign currency option contracts were calculated using the income approach 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.

Note 15—Related Party Transactions

Relationship with Ford

Prior to the Acquisition, we were an indirect, wholly-owned subsidiary of Ford. We and certain of our subsidiaries had entered into contracts, or other transactions or relationships, with Ford or subsidiaries of Ford, the most significant of which are described below.

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Unaudited

Car purchases/repurchases and advertising arrangements

On July 5, 2005, Hertz, one of its wholly-owned subsidiaries and Ford signed a Master Supply and Advertising Agreement, effective July 5, 2005 and expiring August 31, 2010, that covers the 2005 through 2010 vehicle model years. This agreement replaces and supersedes previously existing joint advertising and vehicle supply agreements that would have expired August 31, 2007.

During the three months ended March 31, 2008, we purchased cars from Ford and its subsidiaries at a cost of approximately $700.5 million and sold cars to Ford and its subsidiaries under various repurchase programs for approximately $257.1 million.

Stock option plan

Certain employees of ours participate in the stock option plan of Ford under Ford's 1998 Long-Term Incentive Plan. As a result of the Acquisition, all outstanding options issued under this plan became vested.

Taxes

Prior to the Acquisition, Hertz and its domestic subsidiaries filed a consolidated federal income tax return with Ford. Pursuant to a tax sharing agreement, or the "Agreement," with Ford, current and deferred taxes were reported, and paid to Ford, as if Hertz had filed its own consolidated tax returns with its domestic subsidiaries. The Agreement provided that Hertz was 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 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 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.

Other relationships and transactions

We and Ford also engage in other transactions in the ordinary course of our respective businesses. These transactions include providing car and equipment rental services to Ford and providing insurance and insurance claim management services to Ford. In addition, Ford subsidiaries are our car rental licensees in Scandinavia and Finland.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

Relationship with Hertz Investors, Inc. and the Sponsors

Stockholders Agreement

In connection with the Acquisition, we 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 our 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"), subject to adjustment in the case that the applicable investment fund sells more than a specified amount of its shareholdings in us. 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 our Board of Directors to fill the resulting director vacancies. The Stockholders Agreement also provides that our 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 and, unless otherwise agreed by this fund, as Chairman of our Board of Directors. On October 12, 2006, our Board elected four independent directors, effective from the date of the completion of the initial public offering of our common stock. In order to comply with New York Stock Exchange rules, we will be required to have a majority of independent directors on our Board of Directors within one year of our ceasing to be a "controlled company."

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 our 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 transfer of our 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 us.

In addition, the Stockholders Agreement limits the rights of the investment funds associated with or designated by the Sponsors that have invested in our common stock and our affiliates, subject to several exceptions, to own, manage, operate or control any of our 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 our consent.

Registration Rights Agreement

On the Closing Date, we 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 us, at our

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Unaudited

own expense, to use our 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 we are eligible to use Form S-3. The secondary offering of our common stock in June 2007 was effected pursuant to this Registration Rights Agreement. In the event we register any of our common stock, these investment funds also have the right to require us to use our best efforts to include shares of our common stock held by them, subject to certain limitations, including as determined by the underwriters. The Registration Rights Agreement also provides for us to indemnify the investment funds party to that agreement and their affiliates in connection with the registration of our securities.

Indemnification Agreements

On the Closing Date, Hertz entered into customary indemnification agreements with us, the Sponsors and our stockholders affiliated with the Sponsors, pursuant to which Hertz Holdings and Hertz will indemnify the Sponsors, our 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.

We have entered into indemnification agreements with each of our directors in connection with our initial public offering in November 2006. The indemnification agreements provide the directors with contractual rights to the indemnification and expense advancement rights provided under our 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 considered to be de minimis.

Director Stock Incentive Plan

On October 12, 2006, our Board of Directors approved the Director Plan. Our stockholders approved the Director Plan on October 20, 2006. The Director Plan provides for the grant of shares of our common stock, options to purchase shares of our common stock and "phantom shares," which are the right to receive shares of our common stock at a specified point in the future. A maximum of 3,500,000 shares are reserved for issuance under the Director Plan.

Options granted under the Director Plan 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.

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 our common stock having a fair market value at such time equal to the amount of such fees. Any such shares will be 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 our common stock will be paid to the director promptly following the date on which he or she ceases to serve as a director (or, if earlier, upon a change in control as defined in the Director Plan).

A director will recognize ordinary income upon exercising options granted under the Director Plan in an amount equal to the fair market value of the shares acquired on the date of exercise, less the exercise

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Unaudited

price, and we will 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 will generally recognize ordinary income equal to the fair market value of such shares on the date such shares are paid to the director and we will have a corresponding tax deduction at that time. For the three months ended March 31, 2008 and 2007, we recognized $0.4 million and $0.4 million, respectively, of expense relating to the Director Plan in our consolidated statement of operations in "Selling, general and administrative" expenses.

The Director Plan will terminate upon the adoption of the Omnibus Plan by our stockholders.

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., or "ML," one of the underwriters in the initial public offering of our common stock and the June 2007 secondary offering by the Sponsors, were lenders under the Hertz Holdings Loan Facility (which was repaid with the proceeds of our 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 and the Senior Subordinated 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.

Guarantees

Hertz's obligations under the Senior Term Facility and Senior ABL Facility are guaranteed by Hertz's immediate parent, Hertz Investors, Inc. (previously known as CCMG Corporation). Hertz Holdings is not a guarantor of these facilities. See Note 7—Debt.

Other Sponsor Relationships

Merrill Lynch, Pierce, Fenner & Smith Incorporated acted as an underwriter with respect to a secondary public offering of our common stock in June 2007, for which they received customary fees and expenses. In addition, Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as the administrator of the Stock Incentive Plan and receives customary fees and expenses for these services.

In connection with our car and equipment rental businesses, we enter into millions of rental transactions every year involving millions of customers. In order to conduct those businesses, we also procure goods and services from thousands of vendors. Some of those customers and vendors may be affiliated with the Sponsors or members of our Board of Directors. We believe that all such rental and procurement transactions have been conducted on an arms-length basis and involved terms no less favorable to us than those that we believe we would have obtained in the absence of such affiliation. It is our management's practice to bring to the attention of our Board of Directors any transaction, even if it arises in the ordinary course of business, in which our management believes that the terms being sought by transaction participants affiliated with the Sponsors or our Board of Directors would be less favorable to us than those to which we would agree absent such affiliation.

In the second quarter of 2007, we were advised by ML, an affiliate of one of our Sponsors, that between November 17, 2006, and April 19, 2007, ML engaged in principal trading activity in our common stock. Some of those purchases and sales of our common stock should have been reported to the SEC on Form 4, but were not so reported. ML and certain of its affiliates have engaged in additional principal trading activity since that time. ML and certain of its affiliates have since filed amended or additional reports on Form 4 disclosing the current number of shares of our common stock held by ML and its

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Unaudited

affiliates. To date, ML has paid to us approximately $4.9 million for its "short-swing" profit liability resulting from its principal trading activity that is subject to recovery by us under Section 16 of the Securities Exchange Act of 1934, as amended. In the event that ML or its affiliates (including private investment funds managed by certain private equity-arm affiliates of ML) sell additional shares of our common stock in the future, this amount may change. In 2008 and 2007, we recorded $0.1 million (net of tax) and $2.9 million (net of tax of $1.9 million), respectively, in our condensed consolidated balance sheet in "Additional paid-in capital." In addition, because ML may be deemed to be an affiliate of Hertz Holdings and there was no registration statement in effect with respect to its sale of shares during this period, certain of these sales may have been made in violation of Section 5 of the Securities Act of 1933, as amended.

Note 16—Commitments and Contingencies

Off-Balance Sheet Commitments

As of March 31, 2008 and December 31, 2007, 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

On the Closing Date, Hertz entered into customary indemnification agreements with us, the Sponsors and our stockholders affiliated with the Sponsors, pursuant to which Hertz Holdings and Hertz will indemnify the Sponsors, our 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 do not believe that these indemnifications are reasonably likely to have a material impact on us. We also entered into indemnification agreements with each of our directors in connection with the initial public offering of our common stock in November 2006.

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 losses that we expect to incur for such matters have been accrued, and those losses are reflected in our condensed consolidated financial statements. As of March 31, 2008 and December 31, 2007, the aggregate amounts accrued for environmental liabilities, including liability for environmental indemnities, reflected in our condensed

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

consolidated balance sheet in "Accrued liabilities" were $3.1 million and $2.7 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).

Legal Proceedings

Fuel-Related Class Actions

We are or have been a defendant in four purported class actions—filed in Texas, Oklahoma, New Mexico and Nevada—in which the plaintiffs have put forth alternate theories to challenge the application of our Fuel and Service Charge, or "FSC," on rentals of cars that are returned with less fuel than when rented. The action in Texas remains pending, but the action in Oklahoma was dismissed in 2008. The actions in New Mexico and Nevada were dismissed in 2007.

1.

Texas

On March 15, 2004, Jose M. Gomez, individually and on behalf of all other similarly situated persons, v. The Hertz Corporation was commenced in the 214th Judicial District Court of Nueces County, Texas. Gomez purports to be a class action filed alternatively on behalf of all persons who were charged a FSC by us or all Texas residents who were charged a FSC by us. The petition alleged that the FSC is an unlawful penalty and that, therefore, it is void and unenforceable. The plaintiff seeks an unspecified amount of compensatory damages, with the return of all FSC paid or the difference between the FSC and our actual costs, disgorgement of unearned profits, attorneys' fees and costs. In response to various motions by us, the plaintiff filed two amended petitions, which scaled back the putative class from a nationwide class to a class of all Texas residents who were charged a FSC by us or by our Corpus Christi licensee. A new cause of action was also added for conversion for which the plaintiff is seeking punitive damages. After some limited discovery, we filed a motion for summary judgment in December 2004. That motion was denied in January 2005. The parties then engaged in more extensive discovery. In April 2006, the plaintiff further amended his petition by adding a cause of action for fraudulent misrepresentation and, at the plaintiff's request, a hearing on the plaintiff's motion for class certification was scheduled for August 2006. In May 2006, the plaintiff filed a fourth amended petition which deleted the cause of action for conversion and the plaintiff also filed a first amended motion for class certification in anticipation of the August 2006 hearing on class certification. After the hearing, the plaintiff filed a fifth amended petition seeking to further refine the putative class as including all Texas residents who were charged a FSC in Texas after February 6, 2000. In October 2006, the judge entered a class certification order which certified a class of all Texas residents who were charged an FSC in Texas after February 6, 2000. We are appealing the order.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

2.

Oklahoma

On November 18, 2004, Keith Kochner, individually and on behalf of all similarly situated persons, v. The Hertz Corporation was commenced in the District Court in and for Tulsa County, State of Oklahoma. As with the Gomez case, Kochner purports to be a class action, this time on behalf of Oklahoma residents who rented from us and incurred our FSC. The petition alleged that the imposition of the FSC is a breach of contract and amounts to an unconscionable penalty or liquidated damages in violation of Article 2A of the Oklahoma Uniform Commercial Code. The plaintiff seeks an unspecified amount of compensatory damages, with the return of all FSC paid or the difference between the FSC and our actual costs, disgorgement of unearned profits, attorneys' fees and costs. In March 2005, the trial court granted our motion to dismiss the action but also granted the plaintiff the right to replead. In April 2005, the plaintiff filed an amended class action petition, newly alleging that our FSC violates the Oklahoma Consumer Protection Act and that we have been unjustly enriched, and again alleging that our FSC is unconscionable under Article 2A of the Oklahoma Uniform Commercial Code. In May 2005, we filed a motion to dismiss the amended class action petition. In October 2005, the court granted our motion to dismiss, but allowed the plaintiff to file a second amended complaint and we then answered the complaint. After the parties engaged in some limited discovery, we filed a motion for summary judgment in August 2007. In February 2008, the court granted our motion to dismiss and entered judgment in our favor on all of the remaining claims.

Other Consumer or Supplier Class Actions

1.

HERC Loss Damage Waiver

On August 15, 2006, Davis Landscape, Ltd., individually and on behalf of all others similarly situated, v. Hertz Equipment Rental Corporation, was filed in the United States District Court for the District of New Jersey. Davis Landscape, Ltd., purports to be a nationwide class action on behalf of all persons and business entities who rented equipment from HERC and who paid a Loss Damage Waiver, or "LDW," charge. The complaint alleges that the LDW is deceptive and unconscionable as a matter of law under pertinent sections of New Jersey law, including the New Jersey Consumer Fraud Act and the New Jersey Uniform Commercial Code. The plaintiff seeks an unspecified amount of statutory damages under the New Jersey Consumer Fraud Act, an unspecified amount of compensatory damages with the return of all LDW charges paid, declaratory relief and an injunction prohibiting HERC from engaging in acts with respect to the LDW charge that violate the New Jersey Consumer Fraud Act. The complaint also asks for attorneys' fees and costs. In October 2006, we filed an answer to the complaint. In November 2006, the plaintiff filed an amended complaint adding an additional plaintiff, Miguel V. Pro, an individual residing in Texas, and new claims relating to HERC's charging of an "Environmental Recovery Fee." Causes of action for breach of contract and breach of implied covenant of good faith and fair dealing were also added. After extensive discovery, the plaintiffs filed a motion to certify the class in May 2008.

2.

Concession Fee Recoveries

On October 13, 2006, Janet Sobel, Daniel Dugan, PhD. and Lydia Lee, individually and on behalf of all others similarly situated v. The Hertz Corporation and Enterprise Rent-A-Car Company was filed in the United States District Court for the District of Nevada. Sobel purports to be a nationwide class action on behalf of all persons who rented cars from Hertz or Enterprise

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

Rent-A-Car Company, or "Enterprise," at airports in Nevada and whom Hertz or Enterprise charged airport concession recovery fees. The complaint alleged that the airport concession recovery fees violate certain provisions of Nevada law, including Nevada's Deceptive Trade Practices Act. The plaintiffs seek an unspecified amount of compensatory damages, restitution of any charges found to be improper and an injunction prohibiting Hertz and Enterprise from quoting or charging any of the fees prohibited by Nevada law. The complaint also asks for attorneys' fees and costs. In November 2006, the plaintiffs and Enterprise stipulated and agreed that claims against Enterprise would be dismissed without prejudice. In January 2007, we filed a motion to dismiss. In September 2007, the court denied our motion to dismiss. We thereafter filed a motion for certification seeking to have the interpretation of Nevada Revised Statutes Section 482.31575 certified to the Nevada Supreme Court or, in the alternative, to the United States Court of Appeals for the Ninth Circuit. In October 2007, we answered the complaint. In February 2008, the United States Court of Appeals for the Ninth Circuit denied our motion for certification. Discovery will commence in 2008.

3.

Telephone Consumer Protection Act

On May 3, 2007, Fun Services of Kansas City, Inc., individually and as the representative of a class of similarly-situated persons, v. Hertz Equipment Rental Corporation was commenced in the District Court of Wyandotte County, Kansas. Fun Services purports to be a class action on behalf of all persons in Kansas and throughout the United States who on or after four years prior to the filing of the action were sent facsimile messages of advertising materials relating to the availability of property, goods or services by HERC and who did not provide express permission for sending such faxes. The plaintiff asserts violations of the Telephone Consumer Protection Act, 47 U.S.C. Section 227, and common law conversion and the plaintiff is seeking damages and costs of suit. In June 2007, we removed this action to the United States District Court for the District of Kansas. In February 2008, the case was remanded to the District Court of Wyandotte County, Kansas. In April 2008, the court granted our motion to transfer venue, so the case will now be transferred to the District Court of Johnson County, Kansas.

4.

California Tourism Assessments

On November 14, 2007, Michael Shames, Gary Gramkow, on behalf of themselves and on behalf of all persons similarly situated v. The Hertz Corporation, Dollar Thrifty Automotive Group, Inc., Avis Budget Group, Inc., Vanguard Car Rental USA, Inc., Enterprise Rent-A-Car Company, Fox Rent A Car, Inc., Coast Leasing Corp., The California Travel and Tourism Commission, and Caroline Betata was commenced in the United States District Court for the Southern District of California. Shames purports to be a class action brought on behalf of all individuals or entities that purchased rental car services from a defendant at a California situs airport after January 1, 2007. The complaint alleges that the defendants agreed to charge consumers a 2.5% assessment and not to compete with respect to this assessment, while misrepresenting that this assessment is owed by consumers, rather than the rental car defendants, to the California Travel and Tourism Commission. The complaint also alleges that defendants agreed to pass through to consumers a fee known as the Airport Concession Fee, which fee had previously been required to be included in the rental car defendants' individual base rates, without reducing their base rates. Based on these allegations, the complaint asserts violations of 15 U.S.C. § 1, California's Unfair Competition Law and California's False Advertising Law, and seeks treble damages, disgorgement, injunctive relief, interest, attorneys'

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

fees, and costs. The complaint also asserts separately against the California Travel and Tourism Commission and Caroline Beteta, the Commission's Executive Director, alleged violations of The California Bagley- Keene Open Meeting Act. In January 2008, we filed a motion to dismiss. In April 2008, the court granted—with leave to amend—the separate motions to dismiss of the rental car defendants, the California Travel and Tourism Commission and Caroline Betata. In May 2008, the plaintiffs filed an amended complaint.

On December 13, 2007, Thomas J. Comiskey, on behalf of himself and all others similarly situated v. Avis Budget Group, Inc., Vanguard Car Rental USA, Inc., Dollar Thrifty Automotive Group, Inc., Advantage Rent-A-Car, Inc., Avalon Global Group, Hertz Corporation, Enterprise Rent-A-Car Company, Fox Rent A Car, Inc., Beverly Hills Rent-A-Car, Inc., Rent4Less, Inc., Autorent Car Rental, Inc., Pacific Rent-A-Car, Inc., ABC Rent-A-Car, Inc., The California Travel and Tourism Commission, and Dale E. Bonner was commenced in the United States District Court for the Central District of California. Comiskey purports to be a class action brought on behalf of all persons and entities that have paid an assessment since the inception of the Passenger Car Rental Industry Tourism Assessment Program in California on January 1, 2007. The complaint alleges that California's Passenger Car Rental Industry Tourism Assessment Program, as included in the California Tourism Marketing Act, violates the United States Constitution's Commerce Clause and First Amendment, both directly and in violation of 42 U.S.C. § 1983, Article I, §§ 2 and 3 of the California Constitution, and Article XIX, § 2 of the California Constitution. The complaint seeks injunctive and declaratory relief, that all unspent assessments collected and to be collected be held in trust, damages, interest, attorneys' fees, and costs. On December 14, 2007, Isabel S. Cohen filed in the United States District Court for the Central District of California a complaint virtually identical to that filed in Comiskey. In February 2008, the court consolidated Comiskey and Cohen, captioned the consolidated action "In re Tourism Assessment Fee Litigation," and ordered the plaintiffs to serve a single consolidated class action complaint. In April 2008, we filed a motion to dismiss the consolidated complaint and we also filed a motion to transfer the case to the United States District Court for the Southern District of California for potential consolidation with the Shames case.

We believe that we have meritorious defenses in the foregoing matters and will defend ourselves vigorously.

In addition, we are currently a defendant in numerous actions and have received numerous claims on which actions have not yet been commenced for public liability and property damage arising from the operation of motor vehicles and equipment rented from us and our licensees. In the aggregate, we can be expected to expend material sums to defend and settle public liability and property damage actions and claims or to pay judgments resulting from them.

On February 19, 2007, The Hertz Corporation and TSD Rental LLC v. Enterprise Rent-A-Car Company and The Crawford Group, Inc. was filed in the United States District Court for the District of Massachusetts. In this action, we and our co-plaintiff seek damages and injunctive relief based upon allegations that Enterprise and its corporate parent, The Crawford Group, Inc., or "Crawford," unlawfully engaged in anticompetitive and unfair and deceptive business practices by claiming to customers of Hertz that once Enterprise obtains a patent that it has applied for relating to its insurance replacement reservation system, Hertz will be prevented from using the co-plaintiff's EDiCAR system, which Hertz currently uses in its insurance replacement business. The complaint alleges, among other things, that Enterprise's

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unaudited

threats are improper because the Enterprise patent, once issued, should be invalid and unenforceable. In April 2007, Enterprise and Crawford filed a motion to dismiss and Hertz and TSD Rental LLC, or "TSD," filed opposition papers in May 2007. After a hearing on Enterprise's motion in September 2007, Hertz and TSD filed an amended complaint in October 2007. In February 2008, Enterprise and Crawford filed a motion to dismiss the amended complaint and Hertz and TSD filed opposition papers in March of 2008.

On September 25, 2007, we filed a second lawsuit, also captioned The Hertz Corporation and TSD Rental LLC v. Enterprise Rent-A-Car Company and The Crawford Group, Inc. in the United States District Court for the District of Massachusetts. In this second lawsuit—the patent action—we seek a declaratory judgment that a newly issued patent to Crawford is not infringed by Hertz and is invalid and unenforceable. In October 2007, we filed a motion to consolidate the antitrust action and the patent action and, in November 2007, the court granted our motion to consolidate the two actions. Enterprise and Crawford filed a motion to dismiss the patent action in December 2007 and Hertz and TSD filed opposition papers in January 2008. See "Item 1A—Risk Factors" included in our Form 10-K.

In addition to the foregoing, various legal actions, claims and governmental inquiries and proceedings are pending or may be instituted or asserted in the future against us and our subsidiaries. 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. Although the amount of liability with respect to these matters cannot be ascertained, potential liability in excess of related accruals is not expected to materially affect our consolidated financial position, results of operations or cash flows, but it could be material in the period in which it is recorded.

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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information that management believes to be relevant to understanding our consolidated financial condition and results of operations. This discussion should be read in conjunction with the financial statements and the related notes thereto contained in our condensed consolidated financial statements included in this Form 10-Q for the three months ended March 31, 2008, or this "Report."

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained or incorporated by reference in this Report including, without limitation, those concerning our liquidity and capital resources, contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 concerning our results of operations; economic performance; financial condition; management forecasts; efficiencies, cost savings and opportunities to increase productivity and profitability; income and margins; liquidity and availability to us of additional or continued sources of financing for our revenue earning equipment and financial instability of insurance companies providing financial guarantees for asset-backed securities; anticipated growth; economies of scale; the economy; future economic performance; our ability to maintain profitability during adverse economic cycles and unfavorable external events; fuel costs; future acquisitions and dispositions; litigation; potential and contingent liabilities; management's plans; taxes; and refinancing of existing debt. Because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These statements often include words such as "believes," "expects," "projects," "anticipates," "intends," "plans," "estimates," "seeks," "will," "may," "should," "forecasts" or similar expressions.

Forward-looking statements are not guarantees of performance or results and by their nature are subject to inherent risks and uncertainties. We caution you therefore that you should not rely on these forward-looking statements. You should understand that the risks and uncertainties discussed in "Item 1A—Risk Factors" included in Hertz Global Holdings, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, filed with the United States Securities and Exchange Commission, or the "SEC," on February 29, 2008, or our "Form 10-K," could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements.

Any forward-looking information contained in this Report speaks only as of the date of this Report. We undertake no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.

Unless the context otherwise requires, in this Report, (i) "we," "us," "our," the "registrant" and the "Company" mean Hertz Global Holdings, Inc. (previously known as CCMG Holdings, Inc.), or "Hertz Holdings," and its consolidated subsidiaries, (ii) "Hertz" means The Hertz Corporation, (iii) "HERC" means Hertz Equipment Rental Corporation, our wholly owned subsidiary, and 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, (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.

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 Hertz's

36

outstanding capital stock from RCA Corporation in 1985. Hertz Holdings was incorporated in Delaware in 2005 and had no operations prior to the Acquisition (as defined below).

On December 21, 2005, or the "Closing Date," investment funds associated with or designated by Clayton, Dubilier & Rice, Inc., or "CD&R," The Carlyle Group, or "Carlyle," and Merrill Lynch Global Private Equity, or "MLGPE," or collectively the "Sponsors," through CCMG Acquisition Corporation, a wholly owned subsidiary of Hertz Holdings, acquired all of Hertz's common stock from Ford Holdings LLC 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 Hertz's common stock through CCMG Acquisition Corporation as the "Acquisition." We refer to the Acquisition, together with related transactions entered into to finance the cash consideration for the Acquisition, to refinance certain of our existing indebtedness and to pay related transaction fees and expenses, as the "Transactions."

In November 2006, we completed our initial public offering of 88,235,000 shares of our common stock at a per share price of $15.00, with proceeds to us before underwriting discounts and offering expenses of approximately $1.3 billion. The proceeds were used to repay borrowings that were outstanding under a $1.0 billion loan facility entered into by Hertz Holdings, or the "Hertz Holdings Loan Facility," and to pay related transaction fees and expenses. The Hertz Holdings Loan Facility was used primarily to pay a special cash dividend of $4.32 per share to our common stockholders on June 30, 2006. The proceeds of the offering were also used to pay special cash dividends of $1.12 per share on November 21, 2006 to stockholders of record of Hertz Holdings immediately prior to the initial public offering.

In June 2007, the Sponsors completed a secondary public offering of 51,750,000 shares of their Hertz Holdings common stock at a per share price of $22.25. We did not receive any of the proceeds from the sale of these shares. We paid all of the expenses of the offering, excluding underwriting discounts and commissions of the selling stockholders, pursuant to a registration rights agreement we entered into at the time of the Acquisition. These expenses aggregated to approximately $2.0 million. Immediately following the secondary public offering, the Sponsors' ownership percentage in us decreased to approximately 55%.

Overview of Our Business

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:

•

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



•

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



•

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

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

Our expenses primarily consist of:

•

Direct operating expenses (primarily wages and related benefits; commissions and concession fees paid to airport authorities, travel agents and others; facility, self-insurance and reservation costs; the cost of new equipment and consumables purchased for resale; and other costs relating

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to the operation and rental of revenue earning equipment, such as damage, maintenance and fuel costs);

•

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



•

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



•

Interest expense, net of interest income.

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. 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 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. In the United States, 2007 model year program vehicle depreciation costs rose approximately 15% and per-car depreciation costs for 2007 model year U.S. non-program cars declined as compared to 2006. As a consequence of those changes in per-car costs, as well as the larger proportion of our U.S. fleet we have purchased as non-program cars and other actions we have taken to mitigate program car cost increases, our net per-car depreciation costs for 2007 model year cars in the United States have increased by less than 3% from our net per-car depreciation costs for 2006 model year U.S. cars. Therefore, we expect 2008 vehicle depreciation costs year over year to increase between 2% to 4% in the United States and by approximately 10% in Europe. 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 systems, to help manage our variable costs. Approximately two-thirds of our typical annual operating costs represent variable costs, while the remaining one-third are 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.

As part of our ongoing effort to implement our strategy of reducing operating costs, we are evaluating our workforce and operations and making adjustments, including headcount reductions and process improvements to optimize work flow at rental locations and maintenance facilities as well as streamlining our back-office operations, initiating business process reengineering and evaluating outsourcing opportunities. When we make adjustments to our workforce and operations, we may incur incremental expenses that delay the benefit of a more efficient workforce and operating structure, but we believe that increasing our operating efficiency and reducing the costs associated with the operation of our business are important to our long-term competitiveness.

On January 5, 2007, we announced the first in a series of initiatives to further improve our competitiveness through targeted job reductions affecting approximately 200 employees primarily at our corporate headquarters in Park Ridge, New Jersey and our U.S. service center in Oklahoma City, Oklahoma. These reductions are expected to result in annualized savings of up to $15.8 million.

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On February 28, 2007, we announced the second initiative to further improve our competitiveness and industry leadership through targeted job reductions affecting approximately 1,350 employees primarily in our U.S. 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, as well as in Canada, Puerto Rico, Brazil, Australia and New Zealand. These reductions are expected to result in annualized savings of up to $125.0 million.

On June 1, 2007, we announced the third initiative to further improve our operational efficiency through targeted reductions affecting approximately 480 positions in our U.S. car and equipment rental operations, as well as financial and reservations-related positions in our U.S. service center in Oklahoma City, Oklahoma. These reductions are expected to result in approximately $24.0 million of annualized savings.

During 2007, we began to implement cost saving initiatives in our European operations, and we are continuing implementation of these measures in 2008. These measures are expected to result in additional annualized savings of approximately $50.0 million, a portion of which has already been realized in 2007. During the fourth quarter of 2007, we finalized or substantially completed contract terms with industry leading service providers to outsource select functions 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. Substantially all of the selected functions in these areas will be transitioned to the third-party service providers which will result in a decrease in headcount by the end of the third quarter of 2008. We expect to incur between $30 million to $40 million of restructuring costs in the first half of 2008 related to these initiatives.

In the first quarter of 2008, to continue improving our competitiveness and industry position, we initiated job reductions affecting approximately 950 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.

For the three months ended March 31, 2008 and 2007, our consolidated statement of operations includes restructuring charges relating to the initiatives discussed above of $19.6 million and $32.6 million, respectively.

We plan to announce, as plans are finalized, other efficiency initiatives during the remainder of 2008. We currently anticipate incurring future charges to earnings in connection with those initiatives; however, we have not yet developed detailed estimates of these expenses. See Note 13 to the Notes to our condensed consolidated financial statements included in this Report.

For the year ended December 31, 2007, based on publicly available information, we believe some U.S. car rental brands experienced transaction day growth and rental rate revenue per transaction day, or "RPD," increases compared to the year ended December 31, 2006. For the year ended December 31, 2007, we experienced low to mid single digit volume growth versus the prior period in the United States, while RPD was down less than one percentage point. During the year ended December 31, 2007, we experienced mid to high single digit volume growth in our European operations and our car rental RPD was above the level of our RPD during the year ended December 31, 2006.

For the three months ended March 31, 2008, based on publicly available information, we believe some U.S. car rental brands experienced transaction day growth and RPD decreases compared to the three months ended March 31, 2007. For the three months ended March 31, 2008, we experienced 2.0% volume growth versus the prior period in the United States, while RPD was down 2.9%. During the three months ended March 31, 2008, we experienced low double digit volume growth in our European operations and our car rental RPD was below the level of our RPD during the three months ended March 31, 2007.

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In the three years ended December 31, 2007, we increased the number of our off-airport rental locations in the United States by approximately 27% to approximately 1,580 locations. Revenues from our U.S. off-airport operations grew during the same period, representing $963.8 million, $890.1 million and $845.8 million of our total car rental revenues in the years ended December 31, 2007, 2006 and 2005, respectively. Our expanding U.S. off-airport operations represented $232.4 million and $218.1 million of our total car rental revenues in the three months ended March 31, 2008 and 2007, respectively. As of March 31, 2008, we had approximately 1,630 off-airport locations. In the balance of 2008 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 year ended December 31, 2007, based on publicly available information, we believe the U.S. equipment rental industry experienced downward pricing, measured by the rental rates charged by equipment rental companies. HERC experienced higher equipment rental pricing and volumes worldwide for the year ended December 31, 2007, with pricing increases attributable to higher price activity in Canada and Europe offset by lower price activity in the U.S. During the year ended December 31, 2007, HERC added six U.S. locations, one Canadian location and seven locations in Europe. For the three months ended March 31, 2008, based on publicly available information, we believe the U.S. equipment rental industry experienced downward pricing. HERC experienced higher equipment rental volumes and lower pricing worldwide for the three months ended March 31, 2008. During the three months ended March 31, 2008, HERC added two U.S. locations, one Canadian location and four locations in Europe. HERC expects to open new locations at about the same pace during the remainder of the year. In connection with its U.S. expansion, we expect HERC will incur non-fleet start-up costs of approximately $0.7 million per location and additional fleet acquisition costs, including costs to transport equipment from one branch to another, over an initial twelve-month period of approximately $2 to $4 million per location. In its European expansion, we expect HERC will incur lower start-up costs per location as compared with the United States.

40

Three Months ended March 31, 2008 Compared with Three Months ended March 31, 2007

Summary

The following table sets forth the percentage of total revenues represented by the various line items set forth in our consolidated statement of operations for the three months ended March 31, 2008 and 2007 (in thousands of dollars):

									Percentage of Revenues
			Three Months Ended March 31,						Three Months Ended March 31,
			2008			2007			2008		2007
Revenues:
	Car rental		$	1,598,057		$	1,505,075		78.4	%	78.3	%
	Equipment rental			410,850			389,843		20.1		20.3
	Other			30,254			26,614		1.5		1.4
		Total revenues		2,039,161			1,921,532		100.0		100.0
Expenses:
	Direct operating			1,171,530			1,114,324		57.4		58.0
	Depreciation of revenue earning equipment			533,853			467,817		26.2		24.3
	Selling, general and administrative			193,397			200,377		9.5		10.4
	Interest, net of interest income			196,201			229,587		9.6		12.0
		Total expenses		2,094,981			2,012,105		102.7		104.7
Loss before income taxes and minority interest				(55,820	)		(90,573	)	(2.7	)	(4.7	)
Benefit for taxes on income				2,950			32,117		0.1		1.6
Minority interest				(4,834	)		(4,110	)	(0.2	)	(0.2	)
Net loss			$	(57,704	)	$	(62,566	)	(2.8	)%	(3.3	)%

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The following table sets forth certain of our selected car rental, equipment rental and other operating data for the three months ended or as of March 31, 2008 and 2007:

			Three Months Ended or as of March 31,
			2008			2007
Selected Car Rental Operating Data:
	Worldwide number of transactions (in thousands)			6,565			6,665
		Domestic		4,900			5,073
		International		1,665			1,592
	Worldwide transaction days (in thousands)(a)			30,239			28,912
		Domestic		21,264			20,846
		International		8,975			8,066
	Worldwide rental rate revenue per transaction day(b)		$	44.94		$	46.16
		Domestic	$	43.10		$	44.39
		International	$	49.31		$	50.74
	Worldwide average number of company-operated cars during the period			437,400			423,400
		Domestic		304,400			302,500
		International		133,000			120,900
	Adjusted pre-tax income (in millions of dollars)(c)		$	39.3		$	36.9
	Worldwide revenue earning equipment, net (in millions of dollars)		$	8,406.5		$	8,036.6
Selected Worldwide Equipment Rental Operating Data:
	Rental and rental related revenue (in millions of dollars)(d)		$	367.5		$	361.1
	Same store revenue growth, including growth initiatives(e)			0.1	%		5.4	%
	Average acquisition cost of rental equipment operated during the period (in millions of dollars)		$	3,480.4		$	3,092.1
	Adjusted pre-tax income (in millions of dollars)(c)		$	59.3		$	65.6
	Revenue earning equipment, net (in millions of dollars)		$	2,640.1		$	2,422.4
Other Operating Data:
	EBITDA (in millions of dollars)(f)		$	728.6		$	663.8
	Corporate EBITDA (in millions of dollars)(f)		$	235.0		$	238.0

(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 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 within the daily pricing of car rental transactions. On the other hand, non-rental rate revenue items such as refueling and concession pass-through expense items are driven by factors beyond the control of management (i.e. the price of fuel and the concession fees charged by airports). Additionally, NeverLost units are an optional revenue product which management does not consider to be part of their daily pricing of car rental transactions. The following table reconciles our car rental revenue to our

42

rental rate revenue and rental rate revenue per transaction day (based on December 31, 2007 foreign exchange rates) for the three months ended March 31, 2008 and 2007 (in millions of dollars, except as noted):

	Three Months Ended March 31,
	2008			2007
Car rental revenue per statement of operations	$	1,598.1		$	1,505.1
Non-rental rate revenue		(228.2	)		(217.5	)
Foreign currency adjustment		(10.9	)		47.1
Rental rate revenue	$	1,359.0		$	1,334.7
Transaction days (in thousands)		30,239			28,912
Rental rate revenue per transaction day (in whole dollars)	$	44.94		$	46.16

(c)

Adjusted pre-tax income (loss) is calculated as income (loss) before income taxes and minority interest plus 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. Adjusted pre-tax income (loss) 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 minority interest by segment to adjusted pre-tax income (loss) by segment for the three months ended March 31, 2008 and 2007 (in millions of dollars):

		Three Months Ended March 31, 2008
		Car Rental			Equipment Rental
Income (loss) before income taxes and minority interest		$	(5.8	)	$	39.4
Adjustments:
	Purchase accounting(1)		10.3			14.0
	Non-cash debt charges(2)		8.6			2.7
	Restructuring charges		15.8			1.7
	Restructuring related charges		2.1			0.7
	Unrealized loss on derivatives(3)		6.0			—
	Vacation accrual adjustment(4)		2.3			0.8
Adjusted pre-tax income		$	39.3		$	59.3

		Three Months Ended March 31, 2007
		Car Rental			Equipment Rental
Income (loss) before income taxes and minority interest		$	(16.8	)	$	46.0
Adjustments:
	Purchase accounting(1)		7.7			15.0
	Non-cash debt charges(2)		26.3			2.8
	Restructuring charges		19.7			1.8
Adjusted pre-tax income		$	36.9		$	65.6

(1)

Represents the purchase accounting effects of the Acquisition and any subsequent acquisitions 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.



(2)

Represents non-cash debt charges relating to the amortization of deferred debt financing costs and debt discounts. For the three months ended March 31, 2008, also includes $2.3 million associated with the ineffectiveness of our HVF swaps. For the three months ended March 31, 2007, also includes the write-off of $16.2 million of unamortized debt costs associated with a debt modification and $12.8 million associated with the ineffectiveness of our HVF swaps.



(3)

For the three months ended March 31, 2008, represents an unrealized loss on our interest rate swaptions.



(4)

Represents an increase in the employee vacation accrual during the three months ended March 31, 2008 relating to a change in our U.S. vacation policy in the second quarter of 2007, which now 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.

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

	Three Months Ended March 31,
	2008			2007
Equipment rental revenue per statement of operations	$	410.8		$	389.8
Equipment sales and other revenue		(41.8	)		(41.7	)
Foreign currency adjustment		(1.5	)		13.0
Rental and rental related revenue	$	367.5		$	361.1

(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.

(f)

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

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

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

Corporate EBITDA also serves as an important measure of our performance. Corporate EBITDA for our car rental segment enables us to assess our operating performance inclusive of fleet management performance, depreciation assumptions and the cost of financing our fleet. In addition, Corporate EBITDA for our car rental segment allows us to compare our performance, inclusive of fleet mix and financing decisions, to the performance of our competitors. Since most of our competitors utilize asset-backed fleet debt to finance fleet acquisitions, this measure is relevant for evaluating our operating efficiency inclusive of our fleet acquisition and utilization. For our equipment rental segment, Corporate EBITDA provides an appropriate measure of performance because the investment in our equipment fleet is longer-term in nature than for our car

44

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


EBITDA and Corporate EBITDA are not recognized measurements under accounting principles generally accepted in the United States of America, or "GAAP." When evaluating our operating performance or liquidity, investors should not consider EBITDA and Corporate EBITDA in isolation of, or as a substitute for, measures of our financial performance and liquidity as determined in accordance with GAAP, such as net income, operating income or net cash provided by operating activities. EBITDA and Corporate EBITDA may have material limitations as performance measures because they exclude items that are necessary elements of our costs and operations.


Because other companies may calculate EBITDA and Corporate EBITDA differently than we do, EBITDA may not be, and Corporate EBITDA as presented in this Report is not, comparable to similarly titled measures reported by other companies.


Borrowings under our senior credit facilities are a key source of our liquidity. Our ability to borrow under these senior credit facilities depends upon, among other things, the maintenance of a sufficient borrowing base and compliance with the financial ratio covenants based on Corporate EBITDA set forth in the credit agreements for our senior credit facilities. Our senior term loan facility requires us to maintain a specified consolidated leverage ratio and consolidated interest expense coverage ratio based on Corporate EBITDA, while our senior asset-based loan facility requires that a specified consolidated leverage ratio and consolidated fixed charge coverage ratio be maintained for periods during which there is less than $200 million of available borrowing capacity under the senior asset-based loan facility. These financial covenants became applicable to us beginning September 30, 2006, reflecting the four quarter period ending thereon. Failure to comply with these financial ratio covenants would result in a default under the credit agreements for our senior credit facilities and, absent a waiver or an amendment from the lenders, permit the acceleration of all outstanding borrowings under the senior credit facilities. As of March 31, 2008, we performed the calculations associated with the above noted financial covenants and determined that we are in compliance with such covenants.

As of March 31, 2008, we had an aggregate principal amount outstanding of $1,382.6 million and $418.9 million pursuant to our senior term loan facility and our senior asset-based loan facility, respectively. For the three months ended March 31, 2008, Hertz is required under the senior term loan facility to have a consolidated leverage ratio of not more than 5.25:1 and a consolidated interest expense coverage ratio of not less than 2.00:1. In addition, under our senior asset-based loan facility, if there is less than $200 million of available borrowing capacity under that facility as of March 31, 2008, Hertz is required to have a consolidated leverage ratio of not more than 5.25:1 and a consolidated fixed charge coverage ratio of not less than 1:1 for the quarter then ended. Under the senior term loan facility, for the three months ended March 31, 2008, we had a consolidated leverage ratio of 3.03:1 and a consolidated interest expense coverage ratio of 3.96:1. Since we have maintained sufficient borrowing capacity under our senior asset-based loan facility as of March 31, 2008, 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 7 to the Notes to our condensed consolidated financial statements included in this Report as well as Note 3 of the Notes to our audited annual consolidated financial statements included in our Form 10-K under the caption "Item 8—Financial Statements and Supplementary Data." We have a significant amount of debt. For a discussion of the risks associated with our significant leverage, see "Item 1A—Risk Factors—Risks Relating to Our Substantial Indebtedness" in our Form 10-K.

45

The following table reconciles net loss to EBITDA and Corporate EBITDA for the three months ended March 31, 2008 and 2007 (in millions of dollars):

		Three Months Ended March 31,
		2008			2007
Net loss(1)		$	(57.7	)	$	(62.6	)
	Depreciation and amortization(2)		593.0			528.9
	Interest, net of interest income(3)		196.2			229.6
	Benefit for taxes on income		(2.9	)		(32.1	)
EBITDA(4)			728.6			663.8
Adjustments:
	Car rental fleet interest		(94.0	)		(102.8	)
	Car rental fleet depreciation		(447.4	)		(395.9	)
	Non-cash expenses and charges(5)		20.2			37.7
	Extraordinary, unusual or non-recurring gains or losses(6)		27.6			35.2
Corporate EBITDA		$	235.0		$	238.0

(1)

For the three months ended March 31, 2008 and 2007, net loss includes corporate minority interest of $4.8 million and $4.1 million, respectively.



(2)

For the three months ended March 31, 2008 and 2007, depreciation and amortization was $486.1 million and $437.4 million, respectively, in our car rental segment and $105.3 million and $89.9 million, respectively, in our equipment rental segment.



(3)

For the three months ended March 31, 2008 and 2007, interest, net of interest income, was $92.5 million and $105.4 million, respectively, in our car rental segment and $33.5 million and $35.0 million, respectively, in our equipment rental segment.



(4)

The following table reconciles net cash provided by operating activities to EBITDA for the three months ended March 31, 2008 and 2007 (in millions of dollars):

		Three Months Ended March 31,
		2008			2007
Net cash provided by operating activities		$	1,128.2		$	1,123.4
	Amortization of debt and debt modification costs		(12.2	)		(35.6	)
	Provision for losses on doubtful accounts		(6.0	)		(2.9	)
	Unrealized loss on derivatives		(6.0	)		(0.3	)
	Gain on sale of property and equipment		5.4			1.4
	Loss on ineffectiveness of interest rate swaps		(2.3	)		(12.8	)
	Stock-based employee compensation charges		(6.0	)		(6.1	)
	Minority interest		(4.8	)		(4.1	)
	Deferred taxes on income		12.8			24.2
	Benefit for taxes on income		(2.9	)		(32.1	)
	Interest expense, net of interest income		196.2			229.6
	Net changes in assets and liabilities		(573.8	)		(620.9	)
EBITDA		$	728.6		$	663.8

(5)

For the three months ended March 31, 2008 and 2007, non-cash expenses and charges were $14.2 million and $27.3 million, respectively, in our car rental segment and $0.0 million and $1.2 million, respectively, in our equipment rental segment.

46

As defined in the credit agreements governing our senior credit facilities, Corporate EBITDA excludes the impact of certain non-cash expenses and charges. The adjustments reflect the following (in millions of dollars):

		Three Months Ended March 31,
		2008		2007
Non-cash amortization of debt costs included in car rental fleet interest		$	8.2	$	25.7
Corporate non-cash stock-based employee compensation charges			6.0		6.1
Non-cash charges for workers' compensation			—		2.5
Corporate non-cash charges for public liability and property damage			—		1.8
Corporate non-cash charges for pension			—		1.3
Unrealized loss on derivatives			6.0		0.3
	Total	$	20.2	$	37.7

(6)

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

		Three Months Ended March 31,
		2008		2007
Restructuring charges		$	19.6	$	32.6
Restructuring related charges			3.5		—
Vacation accrual adjustment			3.2		—
Management transition costs			1.3		2.6
	Total	$	27.6	$	35.2

Revenues

			Three Months Ended March 31,
(in millions of dollars)			2008		2007		$ Change		% Change
Revenues:
	Car rental		$	1,598.1	$	1,505.1	$	93.0	6.2	%
	Equipment rental			410.8		389.8		21.0	5.4	%
	Other			30.3		26.6		3.7	13.7	%
		Total revenues	$	2,039.2	$	1,921.5	$	117.7	6.1	%

Total revenues increased 6.1% (1.9% in constant currency) for the three months ended March 31, 2008 compared to the three months ended March 31, 2007.

Revenues from our car rental operations increased 6.2%, primarily as a result of a 4.6% increase in car rental volume worldwide and the effects of foreign currency translation of approximately $60.6 million, partly offset by lower RPD.

RPD for worldwide car rental declined 2.6% from March 31, 2007, due to declines in U.S. and International RPD of 2.9% and 2.8%, respectively. U.S. airport RPD decreased 2.3% and U.S. off-airport RPD declined by 2.4%. 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.

47

Revenues from our equipment rental operations increased 5.4%, due to the effects of foreign currency translation of $18.4 million and higher rental volume.

Revenues from all other sources increased 13.7%, primarily due to an increase in car rental licensee revenue of $2.4 million.

Expenses

			Three Months Ended March 31,
										% Change
(In millions of dollars)			2008		2007		$ Change
Expenses:
	Direct operating		$	1,171.5	$	1,114.3	$	57.2		5.1	%
	Depreciation of revenue earning equipment			533.9		467.8		66.1		14.1	%
	Selling, general and administrative			193.4		200.4		(7.0	)	(3.5	)%
	Interest, net of interest income			196.2		229.6		(33.4	)	(14.5	)%
		Total expenses	$	2,095.0	$	2,012.1	$	82.9		4.1	%

Total expenses increased 4.1%, and total expenses as a percentage of revenues decreased from 104.7% for the three months ended March 31, 2007 to 102.7% in for the three months ended March 31, 2008.

Direct operating expenses increased 5.1% as a result of increases in fleet related expenses and other direct operating expenses, partly offset by a decrease in personnel related expenses.

Fleet related expenses increased $34.1 million, or 13.8%. The increase was primarily related to an increase in worldwide rental volume and included increases in vehicle damage and maintenance costs of $16.7 million, gasoline costs of $15.1 million and vehicle licenses and taxes of $4.9 million, including the effects of foreign currency translation of approximately $15.5 million, partly offset by a decrease in self-insurance expense of $2.4 million.

Other direct operating expenses increased $24.2 million, or 5.3%. The increase was primarily related to an increase in worldwide rental volume including increases in concession fees in our car rental operations of $8.8 million, facility expenses of $7.1 million, customer service costs of $2.5 million, commission fees of $2.4 million and charge card fees of $1.3 million, including the effects of foreign currency translation of approximately $19.5 million, partly offset by a decrease in restructuring charges of $4.9 million.

Personnel related expenses decreased $1.1 million, or 0.3%. The decrease was primarily related to decreases in U.S. wages of $6.5 million, incentive compensation of $2.7 million and information technology costs of $2.6 million, mostly offset by increased International wages and benefits resulting from the effects of foreign currency translation of $14.4 million.

Depreciation of revenue earning equipment for our car rental operations of $447.4 million for the three months ended March 31, 2008 increased 13.0% from $395.9 million for the three months ended March 31, 2007. The increase was primarily due to the higher cost of vehicles in the United States, an increase in average fleet operated, lower net proceeds received in excess of book value on the disposal of used vehicles, a $7.5 million net increase in depreciation in certain of our car rental operations resulting from changes in depreciation rates to reflect changes in the estimated residual value of vehicles and the effects of foreign currency translation. Depreciation of revenue earning equipment in our equipment rental operations of $86.5 million for the three months ended March 31, 2008 increased 20.3% from $71.9 million for the three months ended March 31, 2007. The increase was primarily due to an increase in the average fleet operated, as well as lower net proceeds received in excess of book value on the disposal of used equipment, partly offset by a $3.3 million net decrease in depreciation in certain of our equipment rental operations resulting from changes in depreciation rates to reflect changes in the estimated residual value of equipment.

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Selling, general and administrative expenses decreased 3.5%, primarily due to decreases in advertising and administrative expenses, partly offset by the effects of foreign currency translation of approximately $9.9 million and an increase in sales promotion expenses. Advertising expenses decreased $6.2 million primarily due to a decrease in media spending. Administrative expenses decreased $3.3 million primarily due to decreases in restructuring charges of $8.2 million, management incentive compensation costs of $2.9 million and legal fees of $1.2 million, partly offset by an increase in the unrealized loss on our interest rate swaptions of $5.7 million and the effects of foreign currency translation of $5.9 million. Sale promotion expenses increased $2.6 million primarily related to the effects of foreign currency translation.

Interest expense, net of interest income, decreased 14.5%, primarily due to the write-off in 2007 of $16.2 million in unamortized debt costs associated with the debt modification, a decrease in the ineffectiveness of our HVF swaps of $10.5 million and a decrease in the weighted average interest rate.

Adjusted Pre-Tax Income

Adjusted pre-tax income for our car rental segment of $39.3 million increased 6.5% from $36.9 million for the three months ended March 31, 2007. The increase was primarily due to transaction day improvement and the effects of foreign currency translation, partly offset by a decrease in RPD. Adjustments to our car rental segment GAAP pre-tax amount for the three months ended March 31, 2008 and 2007, totaled $45.1 million and $53.7 million, respectively. See our "Results of Operations—footnote c" for a summary and description of these adjustments. Adjusted pre-tax income for our car rental segment as a percent of its revenues was stable year over year at 2.4%.

Adjusted pre-tax income for our equipment rental segment of $59.3 million decreased 9.6% from $65.6 million for the three months ended March 31, 2007. The decrease was primarily due to higher fleet related costs. Adjustments to our equipment rental segment GAAP pre-tax amount for the three months ended March 31, 2008 and 2007, totaled $19.9 million and $19.6 million, respectively. See our "Results of Operations—footnote c" for a summary and description of these adjustments. Adjusted pre-tax income for our equipment rental segment as a percent of its revenues decreased from 16.8% to 14.4%.

Adjusted pre-tax income as a percentage of revenues between our two segments reflect 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 required headcount. The revenue earning equipment for our equipment rental segment has higher rental rates and longer rental lengths, with longer estimated useful lives.

Benefit for Taxes on Income, Minority Interest and Net Loss

	Three Months Ended March 31,
										% Change
(In millions of dollars)	2008			2007			$ Change
Loss before income taxes and minority interest	$	(55.8	)	$	(90.6	)	$	34.8		38.4	%
Benefit for taxes on income		2.9			32.1			(29.2	)	(90.8	)%
Minority interest		(4.8	)		(4.1	)		(0.7	)	(17.6	)%
Net loss	$	(57.7	)	$	(62.6	)	$	4.9		7.8	%

The benefit for taxes on income decreased 90.8%, primarily due to a decrease in the loss before income taxes and minority interest, the non-recognition of benefits for certain non-U.S. jurisdictions in cumulative net loss positions and other discrete items, which include $4.3 million, net, of out-of-period adjustments to the tax provision. See Note 5 to the Notes to our condensed consolidated financial statements included in this Report. The effective tax rate for the three months ended March 31, 2008 decreased to 5.3% from 35.5% in the three months ended March 31, 2007, based upon the factors noted above.

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Minority interest increased 17.6% due to an increase in our majority-owned subsidiary Navigation Solutions, L.L.C.'s net income in the three months ended March 31, 2008 as compared to the three months ended March 31, 2007.

The net loss decreased 7.8% primarily due to higher rental volume in our worldwide car and equipment rental operations, partly offset by higher fleet costs, as well as the net effect of other contributing factors noted above. The impact of changes in exchange rates on the net loss was mitigated by the fact that not only foreign revenues but also most foreign expenses were incurred in local currencies.

Effects of the Transactions

The following table summarizes the purchase accounting effects of the Acquisition on our results of operations for the three months ended March 31, 2008 and 2007 (in millions of dollars):

		Three Months Ended March 31,
		2008		2007
Depreciation and amortization of tangible and intangible assets:
	Other intangible assets	$	15.3	$	15.3
	Revenue earning equipment		5.0		4.3
	Property and equipment		2.2		2.1
Accretion of revalued liabilities:
	Discount on debt		1.7		2.3
	Workers' compensation and public liability and property damage		1.3		1.4
		$	25.5	$	25.4

Liquidity and Capital Resources

As of March 31, 2008, we had cash and equivalents of $728.9 million, a decrease of $1.3 million from December 31, 2007. As of March 31, 2008, we had $136.5 million of restricted cash to be used for the purchase of revenue earning vehicles and other specified uses under our Fleet Debt facilities, our like-kind exchange programs and to satisfy certain of our self-insurance regulatory reserve requirements. The decrease in restricted cash of $524.5 million from December 31, 2007 to March 31, 2008, primarily related to the timing of purchases and sales of revenue earning vehicles.

Our domestic and foreign 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 three months ended March 31, 2008 was $1,128.2 million, an increase of $4.8 million from the three months ended March 31, 2007.

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 three months ended March 31, 2008 was $683.6 million, a decrease of $72.0 million from the three months ended March 31, 2007. The decrease is primarily due to a decrease in revenue earning equipment expenditures and an increase in year over year changes in restricted cash, partly offset by decreased proceeds from the disposal of revenue earning equipment and increased expenditures on licensee and third-party acquisitions. For the three months ended March 31, 2008, our expenditures for revenue earning equipment were $2,880.3 million and our proceeds from the disposal of such equipment were $1,748.4 million.

For the three months ended March 31, 2008, our capital expenditures for property and non-revenue earning equipment were $40.8 million and our proceeds from the disposal of such equipment were $11.7 million. For the three months ended March 31, 2008, we experienced a slightly increased level of net expenditures for revenue earning equipment and property and equipment compared to the three months ended March 31, 2007. This increase was primarily due to a year over year decrease in disposal

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proceeds relating to revenue earning equipment, partly offset by a decrease in year over year expenditures for revenue earning equipment. For the full year 2008, we expect the level of net expenditures for revenue earning equipment, property and non-revenue earning equipment to be similar to that of the full year 2007. See "—Capital Expenditures" 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. 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 bank credit facilities and the variable funding notes portion of our U.S. Fleet Debt facilities (defined below). 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.

We are highly leveraged and a substantial portion of our liquidity needs arise from debt service on indebtedness incurred in connection with the Transactions and from the funding of our costs of operations, working capital and capital expenditures.

As of March 31, 2008, we had approximately $11,635.1 million of total indebtedness outstanding. Cash paid for interest during the three months ended March 31, 2008, was $239.9 million, net of amounts capitalized.

We rely significantly on asset-backed financing to purchase cars for our domestic and international car rental fleets. For further information concerning our asset-backed financing programs, see Note 3 to the Notes to our audited annual consolidated financial statements included in our Form 10-K. For a discussion of risks related to our reliance on asset-backed financing to purchase cars, see "Item 1A—Risk Factors" contained in our Form 10-K.

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 the Senior ABL Facility, the U.S. ABS Program, the International Fleet Debt facilities (all as defined below) or the fleet financing facilities relating to our car rental fleet in Hawaii, Kansas, Puerto Rico and St. Thomas, the U.S. Virgin Islands, Brazil, Canada, Belgium and our U.K. leveraged financing facility. Substantially all our other assets in the United States are also subject to liens in favor of our lenders under the Senior Credit Facilities (defined below), and substantially all of 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 or (in the case of our Canadian equipment rental business) the Senior ABL Facility. None of such assets will be available to satisfy the claims of our general creditors.

We believe that cash generated from operations, together with amounts available under the Senior Credit Facilities, asset-backed financing and other available financing arrangements 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 foreseeable future. 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. Recent turmoil in the credit markets and the financial instability of insurance companies providing financial guarantees for asset-backed securities has reduced the availability of debt financing, which may result in increases in the interest rates at which lenders are willing to make debt financing available to us. The impact of such an increase would be more significant than it would be for some other companies because of our substantial debt. For a discussion of risks related to our substantial indebtedness, see "Item 1A—Risk Factors" contained in our Form 10-K.

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Financing

Our "Senior Term Facility" is a secured term loan facility entered into by Hertz in connection with the Acquisition consisting of (a) a maximum borrowing capacity of $2,000.0 million (which was decreased in February 2007 to $1,400.0 million), which included a delayed draw facility of $293.0 million (which was utilized during 2006) and (b) a prefunded synthetic letter of credit facility in an aggregate principal amount of $250.0 million. This term loan facility and the synthetic letter of credit facility mature in December 2012.

Our "Senior ABL Facility" is a senior asset-based revolving loan facility entered into by Hertz and certain of its U.S. and of its Canadian subsidiaries in connection with the Acquisition with a maximum borrowing capacity of $1,600.0 million (which was increased in February 2007 to $1,800.0 million). Up to $200.0 million of the revolving loan facility is available for the issuance of letters of credit. The Senior ABL Facility matures in February 2012. We refer to the Senior Term Facility and the Senior ABL Facility together as the "Senior Credit Facilities."

Our "Senior Dollar Notes" are the $1,800.0 million aggregate principal amount of 8.875% Senior Notes due January 2014 issued by Hertz in connection with the Acquisition. Our "Senior Euro Notes" are the €225 million aggregate principal amount of 7.875% Senior Notes due January 2014 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 "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.

Our "Promissory Notes" consist of the outstanding untendered senior notes issued under three separate indentures existing prior to the Acquisition. These senior notes have maturities ranging from May 2008 to January 2028.

Our "U.S. Fleet Debt" consists of approximately $4,300.0 million of asset-backed securities issued on the Closing Date by Hertz Vehicle Financing LLC, or "HVF," a special purpose entity wholly owned by us, backed by our U.S. car rental fleet, all of which we issued under our existing asset-backed notes program, or the "ABS Program." An additional $600.0 million of previously issued asset-backed medium term notes, or "Pre-Acquisition ABS Notes," having maturities from May 2007 to May 2009 remained outstanding under the ABS Program following the Closing Date ($375.0 million of which have subsequently matured). We have also issued approximately $1,500 million of variable funding notes on the Closing Date in two series under these facilities, none of which were funded on the Closing Date. The U.S. Fleet Debt have maturities ranging from February 2009 to November 2010.

Our "International Fleet Debt" consists of the aggregate borrowings of our foreign subsidiaries under asset-based revolving loan facilities entered into by 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 the United States), together with certain bankruptcy-remote special purpose entities, subject to borrowing bases comprised of rental vehicles, rental equipment, and related assets of certain of our foreign subsidiaries (substantially all of which are organized outside of the United States) or one or more special purpose entities, as the case may be, and rental equipment and related assets of certain of our subsidiaries organized outside North America or one or more special purpose entities, as the case may be. The subsidiaries conducting the car rental business in certain European jurisdictions may, at their option, continue to engage in capital lease financings relating to revenue earning equipment outside the International Fleet Debt facilities. In 2007 and 2008, additional borrowers consented to the senior bridge facility agreement under the International Fleet Debt facilities in connection with the expected take-out of the interim facilities entered into at the time of the Acquisition. The International Fleet Debt matures in December 2010.

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Our "Fleet Financing Facility" is a credit agreement entered into by Hertz and its subsidiary, Puerto Ricancars, Inc., or "PR Cars," in September 2006, which provides for a commitment of up to $275.0 million 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. The Fleet Financing Facility matures in December 2011, but Hertz and PR Cars may terminate or reduce the commitments of the lenders thereunder at any time.

Our "Brazilian Fleet Financing Facility" refers to the agreement dated April 4, 2007 amending and restating our Brazilian subsidiary's credit facility (which was originally included under the International Fleet Debt facilities) to, among other things, increase the facility to R$130 million (or $74.4 million, calculated using exchange rates in effect on March 31, 2008) consisting of a R$70 million (or $40.1 million) term loan facility and a R$60 million (or $34.3 million) revolving credit facility. This facility matures in December 2010.

Our "Canadian Fleet Financing Facility" refers to a Note Purchase Agreement entered into by our indirect subsidiary, Hertz Canada Limited, and certain of its subsidiaries, on May 30, 2007, 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 car rental fleet. The new facility refinanced the Canadian portion of the International Fleet Debt facilities. The maximum amount which may be borrowed under the new facility is CAN$400 million (or $390.1 million). The Canadian Fleet Facility matures in May 2012.

Our "Belgian Fleet Financing Facility" consists of a secured revolving credit facility entered into by our Belgian subsidiary, Hertz Belgium BVBA on June 21, 2007, with varying facility limits of up to €27.4 million (or $43.3 million) maturing in December 2010. This facility refinanced the Belgian portion of our International Fleet Debt facilities.

Our "U.K. Leveraged Financing" 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 £135.0 million (or $268.3 million). The amount available under this facility increases over the term of the facility. The facility is scheduled to mature in December 2013. This facility refinanced the U.K. portion of the International Fleet Debt facilities.

As of March 31, 2008, the aggregate principal amount of $225.0 million (net of $2.5 million discount) of pre-Acquisition ABS Notes were outstanding and the average interest rate was 3.1%.

As of March 31, 2008, there were $34.1 million of capital lease financings outstanding. These capital lease financings are included in the International Fleet Debt total and mature in August 2010.

Guarantees and Security

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, in the case of the Senior ABL Facility, other secured fleet financing). Consequently, these assets will not be available to satisfy the claims of Hertz's general creditors.

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The U.S. Fleet Debt issued on the Closing Date has the benefit of financial guaranty insurance policies under which either MBIA Insurance Corporation or Ambac Assurance Corporation will guarantee the timely payment of interest on and ultimate payment of principal of such notes.

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 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 U.S. 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.

The Brazilian Fleet Financing Facility is secured by our Brazilian subsidiary's fleet of vehicles and backed by a $63.5 million Hertz guarantee.

The Canadian Fleet Financing Facility is secured by the fleet vehicles used in the Canadian operations.

The Belgian Fleet Financing Facility is guaranteed by HIL and the fleet assets used in the Belgian operations are pledged as collateral.

The U.K. Leveraged Financing facility is guaranteed by HIL.

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 the Senior ABL Facility, the ABS Program, the International Fleet Debt facilities or the fleet financing facility relating to our car rental fleet in Hawaii, Kansas, Puerto Rico and St. Thomas, the U.S. Virgin Islands, Brazil, Canada, Belgium and our U.K. leveraged financing. Substantially all our other assets in the United States are also subject to liens in favor of our lenders under the Senior Credit Facilities, and substantially all of 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 or (in the case of our Canadian HERC business) the Senior ABL Facility. None of such assets will be available to satisfy the claims of our general creditors.

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

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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 March 31, 2008, we were in compliance with all of these financial covenants.

Derivatives

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 in accordance with SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." These agreements mature at various terms, in connection with the scheduled maturity of the associated debt obligations, through November 2010. Under these agreements, HVF pays 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. HVF paid $44.8 million to reduce the fixed interest rate on the swaps from the prevailing market rates to 4.5%. Ultimately, this amount will be recognized as additional interest expense over the remaining terms of the swaps, which range from approximately 1 to 3 years. For the three months ended March 31, 2008 and 2007, we recorded an expense of $2.3 million and $12.8 million, respectively, in our consolidated statement of operations, in "Interest, net of interest income," associated with the ineffectiveness of our HVF Swaps. The ineffectiveness resulted from a decline in the value of the swaps due to a decrease in forward interest rates along with a decrease in the time value component as we continue to approach the maturity dates of the swaps. The effective portion of the change in fair value of the swaps is recorded in "Accumulated other comprehensive income." As of March 31, 2008 and December 31, 2007, the balance reflected in "Accumulated other comprehensive income," net of tax, was a loss of $101.3 million and $45.6 million, respectively. As of March 31, 2008 and December 31, 2007, the fair value of our HVF Swaps was a liability of $144.7 million and $50.2 million, respectively, which is reflected in our condensed consolidated balance sheet in "Accrued liabilities." The fair value of the HVF Swaps were calculated using the income approach and applying observable market data.

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 indentures governing the U.S. Fleet Debt) 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. In that event we would also be required to apply a proportional amount, or substantially all in the case of insolvency of both insurers, of all rental payments by Hertz under its lease with its bankruptcy-remote special purpose entity and all car disposal proceeds under the applicable facility, or under substantially all U.S. Fleet Debt facilities in the case of insolvency of both insurers, to pay down the amounts owed under the facility or facilities instead of applying those proceeds to purchase additional cars and/or for working capital purposes. An insurer event of bankruptcy could have a material adverse effect on our liquidity if we were unable to negotiate mutually acceptable new terms with our U.S. Fleet Debt lenders or if alternate funding were not available to us.

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

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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 now expire on June 5, 2008. As of March 31, 2008 and December 31, 2007, the fair value of the swaptions was €2.0 million (or $3.2 million) and €6.2 million (or $9.2 million, calculated using exchange rates in effect on December 31, 2007), respectively, which is reflected in our condensed consolidated balance sheet in "Prepaid expenses and other assets." The fair value of the HIL swaptions were calculated using the income approach and applying observable market data. During the three months ended March 31, 2008 and 2007, the fair value adjustment related to these swaptions was a loss of $6.0 million and $0.3 million, respectively, which was recorded in our consolidated statement of operations in "Selling, general and administrative" expenses. Additionally, as of March 31, 2008, we have incurred $46.4 million of financing costs related to the anticipated take-out international asset-based facilities, which are recorded on our condensed consolidated balance sheet in "Prepaid expenses and other assets." We expect to enter into these take-out international asset-based facilities upon completion of the structuring and amortize the costs over the term of the facility.

Credit Facilities

As of March 31, 2008, the following credit facilities were available for the use of Hertz and its subsidiaries:

•

The Senior Term Facility had approximately $10.2 million available under the letter of credit facility.



•

The Senior ABL Facility had the foreign currency equivalent of approximately $1,362.6 million of remaining capacity, all of which was available under the borrowing base limitation and $179.3 million of which was available under the letter of credit facility sublimit.



•

The U.S. Fleet Debt had approximately $1,500.0 million of remaining capacity and $36.2 million available under the borrowing base limitation. No additional amounts were available under the letter of credit facility.



•

The International Fleet Debt facilities had the foreign currency equivalent of approximately $1,465.0 million of remaining capacity and $272.3 million available under the borrowing base limitation.



•

The Fleet Financing Facility had approximately $102.5 million of remaining capacity and $6.5 million available under the borrowing base limitation.



•

The Brazilian Fleet Financing Facility had the foreign currency equivalent of approximately $6.0 million of remaining capacity and $1.3 million available under the borrowing base limitation.



•

The Canadian Fleet Financing Facility had the foreign currency equivalent of approximately $256.7 million of remaining capacity and no amounts available under the borrowing base limitation.



•

The Belgian Fleet Financing Facility had the foreign currency equivalent of approximately $0.6 million of remaining capacity and $14.3 million available under the borrowing base limitation.



•

The U.K. Leveraged Financing facility had the foreign currency equivalent of approximately $146.4 million of remaining capacity and no amounts available under the borrowing base limitation.

As of March 31, 2008, substantially all of our assets were pledged under one or more of the facilities noted above.

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Capital Expenditures

The following table sets forth the revenue earning equipment and property and equipment capital expenditures and related disposal proceeds received by quarter for 2008 and 2007 (in millions of dollars):

			Revenue Earning Equipment								Property and Equipment
			Capital Expenditures		Disposal Proceeds			Net Capital Expenditures (Disposal Proceeds)			Capital Expenditures		Disposal Proceeds			Net Capital Expenditures
2008
	First Quarter		$	2,880.3	$	(1,748.4	)	$	1,131.9		$	40.8	$	(11.7	)	$	29.1
2007
	First Quarter		$	3,333.2	$	(2,243.2	)	$	1,090.0		$	37.6	$	(10.8	)	$	26.8
	Second Quarter			3,817.6		(2,061.9	)		1,755.7			59.7		(16.6	)		43.1
	Third Quarter			2,418.4		(2,268.9	)		149.5			46.8		(25.8	)		21.0
	Fourth Quarter			1,772.9		(2,640.3	)		(867.4	)		51.9		(45.8	)		6.1
		Total Year	$	11,342.1	$	(9,214.3	)	$	2,127.8		$	196.0	$	(99.0	)	$	97.0

Revenue earning equipment expenditures in our car rental operations were $2,816.0 million and $3,224.1 million for the three months ended March 31, 2008 and 2007, respectively. Revenue earning equipment expenditures in our equipment rental operations were $64.3 million and $109.1 million for the three months ended March 31, 2008 and 2007, respectively.

Revenue earning equipment expenditures in our car rental and equipment rental operations for the three months ended March 31, 2008 decreased by 12.7% and 41.1%, respectively, compared to the three months ended March 31, 2007. The decrease in our car rental operations revenue earning equipment expenditures is due to the change in the mix of purchases made during the three months ended March 31, 2008 as compared to the three months ended March 31, 2007. The decrease in our equipment rental operations revenue earning equipment expenditures is due to slowing non-residential construction growth during the three months ended March 31, 2008 as compared to the three months ended March 31, 2007.

Property and equipment expenditures in our car rental operations were $35.2 million and $29.1 million for the three months ended March 31, 2008 and 2007, respectively. Property and equipment expenditures in our equipment rental operations were $5.2 million and $8.2 million for the three months ended March 31, 2008 and 2007, respectively. Property and equipment expenditures for all other activities were $0.4 million and $0.3 million for the three months ended March 31, 2008 and 2007, respectively.

Property and equipment expenditures in our car rental and equipment rental operations for the three months ended March 31, 2008 increased by 21.0% and decreased by 36.6%, respectively, and increased by 33.3% for all other activities compared to the three months ended March 31, 2007.

For the three months ended March 31, 2008, we experienced a level of net expenditures for revenue earning equipment and property and equipment lower than our net expenditures in the three months ended March 31, 2007. This net increase was primarily due to a year over year decrease in disposal proceeds relating to revenue earning equipment, partly offset by decreases in year over year expenditures in revenue earning equipment, as noted above.

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Off-Balance Sheet Commitments

As of March 31, 2008 and December 31, 2007, 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

On the Closing Date, Hertz entered into customary indemnification agreements with us, the Sponsors and our stockholders affiliated with the Sponsors, pursuant to which Hertz Holdings and Hertz will indemnify the Sponsors, our 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 do not believe that these indemnifications are reasonably likely to have a material impact on us. We also entered into indemnification agreements with each of our directors in connection with the initial public offering of our common stock in November 2006.

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 losses that we expect to incur for such matters have been accrued, and those losses are reflected in our condensed consolidated financial statements. As of March 31, 2008 and December 31, 2007, the aggregate amounts accrued for environmental liabilities, including liability for environmental indemnities, reflected in our condensed consolidated balance sheet in "Accrued liabilities" were $3.1 million and $2.7 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).

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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" in our Form 10-K.

Market Risks

We are exposed to a variety of market risks, including the effects of changes in interest rates 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 historically 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 13 to the Notes to our audited annual consolidated financial statements included in our Form 10-K.

Interest Rate Risk

From time to time, we may enter into interest rate swap agreements to manage interest rate risk. 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 in accordance with SFAS No. 133. These agreements mature at various terms, in connection with the scheduled maturity of the associated debt obligations, through November 2010. Under these agreements, HVF pays 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 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.

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 now expire on June 5, 2008.

See Notes 7 and 14 to the Notes to our condensed consolidated financial statements included in this Report and Notes 3 and 13 to the Notes to our audited annual consolidated financial statements included in our Form 10-K.

We have a significant amount of debt (including under our U.S. and International Fleet Debt, other international fleet debt facilities and Senior ABL Facility) with variable rates of interest based generally on LIBOR, 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

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point in interest rates on our debt portfolio as of March 31, 2008, our net income would decrease by an estimated $12.0 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 and the U.S. and International Fleet Debt 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 currency option contracts 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 currency option contracts 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 March 31, 2008, were approximately $0.2 million, and we limit counterparties to financial institutions that have strong credit ratings. As of March 31, 2008 and December 31, 2007, the fair value of all outstanding foreign currency option contracts was approximately $0.1 million and $0.1 million, respectively, which was recorded in our condensed consolidated balance sheet in "Prepaid expenses and other assets." The fair value of the foreign currency option contracts were calculated using the income approach 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. 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 unhedged Senior Euro Notes. Prior to October 1, 2006, our Senior Euro Notes were not designated as a net investment hedge of our Euro-denominated net investment in our foreign operations. On October 1, 2006, we designated our Senior Euro Notes as an effective net investment hedge of our Euro-denominated net investment in our foreign operations. As a result of this net investment hedge designation, as of March 31, 2008 and December 31, 2007, losses of $42.6 million (net of tax of $27.8 million) and $27.8 million (net of tax of $18.3 million), respectively, attributable to the translation of our Senior Euro Notes into the U.S. dollar are recorded in our condensed consolidated balance sheet in "Accumulated other comprehensive income."

Inflation

The increased acquisition 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. Management does not expect that the effect of inflation on our overall operating costs will be greater for us than for our competitors.

Like-Kind Exchange Program

In January 2006, we implemented a like-kind exchange 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 a material deferral of federal and state income taxes for fiscal 2007 and the three months ended March 31, 2008. A like-kind exchange

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program for HERC has been in place for several years. We cannot, however, offer assurance that the expected tax deferral will be achieved or that the relevant law concerning the programs will remain in its current form. In addition, the benefit of deferral is subject to recapture, if, for example, there were a material downsizing of our fleet.

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 audited annual consolidated financial statements included in our Form 10-K. Based on present assumptions, 2008 worldwide pre-tax pension expense is expected to be approximately $35.0 million, which is a decrease of $7.1 million from 2007. The decrease in expense compared to 2007 is primarily due to lower expense in the United Kingdom of $3.9 million, higher discount rates and foreign exchange rate changes. To the extent that there are layoffs affecting a significant number of employees covered by any pension plan worldwide, 2008 expense could vary significantly because of further charges or credits.

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 condensed 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 in our condensed consolidated financial statements.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 2 to the Notes to our condensed consolidated financial statements included in this Report.

Other Financial Information

The interim financial information included in this Report has not been audited by PricewaterhouseCoopers LLP, or "PwC." In reviewing this interim financial information, PwC has applied limited procedures in accordance with professional standards for reviews of interim financial information. Accordingly, reliance on their reports on this information should be restricted. PwC is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for its reports on the interim financial information because their reports do not constitute "reports" or "parts" of registration statements prepared or certified by PwC within the meaning of Sections 7 and 11 of the Securities Act of 1933.

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There is no material change in the information reported under "Part II, Item 7A.—Quantitative and Qualitative Disclosures About Market Risk," contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. See "Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations—Market Risks," included in this Report.

ITEM 4.    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 and Exchange Act of 1934 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 Securities and Exchange Act of 1934 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 Report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

An evaluation of our internal controls over financial reporting was performed under the supervision of, and with the participation of, management, including our Chief Executive Officer and Chief Financial Officer, to determine whether any changes have occurred during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that no changes in our internal control over financial reporting have occurred during the three months ended March 31, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

For a description of all material pending legal proceedings, see Note 16 to the Notes to our condensed consolidated financial statements included in this Report.

The following recent developments pertaining to legal proceedings described in our Form 10-K for the fiscal year ended December 31, 2007 are furnished on a supplemental basis:

In February 2008, the court in Keith Kochner, individually and on behalf of all similarly situated persons, v. The Hertz Corporation granted our motion to dismiss and entered judgment in our favor on all of the remaining claims.

In February 2008, Enterprise Rent-A-Car Company and The Crawford Group, Inc., in The Hertz Corporation and TSD Rental LLC v. Enterprise Rent-A-Car Company and The Crawford Group, Inc., filed a motion to dismiss the amended complaint and Hertz and TSD Rental LLC filed opposition papers in March of 2008.

In April 2008, the court in Fun Services of Kansas City, Inc., individually and as the representative of a class of similarly-situated persons, v. Hertz Equipment Rental Corporation granted our motion to transfer venue, so the case will now be transferred to the District Court of Johnson County, Kansas.

In April 2008, the court in Michael Shames, Gary Gramkow, on behalf of themselves and on behalf of all persons similarly situated v. The Hertz Corporation, Dollar Thrifty Automotive Group, Inc., Avis Budget Group, Inc., Vanguard Car Rental USA, Inc., Enterprise Rent-A-Car Company, Fox Rent A Car, Inc., Coast Leasing Corp., The California Travel and Tourism Commission, and Caroline Betata granted—with leave to amend—the separate motions to dismiss of the rental car defendants, the California Travel and Tourism Commission and Caroline Betata. In May 2008, the plaintiffs filed an amended complaint.

In April 2008, we filed a motion to dismiss the consolidated complaint in In re Tourism Assessment Fee Litigation and we also filed a motion to transfer the case to the United States District Court for the Southern District of California for potential consolidation with the Shames case.

In May 2008, the plaintiffs in Davis Landscape, Ltd., individually and on behalf of all others similarly situated, v. Hertz Equipment Rental Corporation filed a motion to certify the class.

Aside from the above mentioned, there were no material changes in the legal proceedings described in our Form 10-K and we are not otherwise required to disclose any pending legal proceedings in response to Item 103 of Regulation S-K.

ITEM 1A.    RISK FACTORS

There is no material change in the information reported under "Item 1A—Risk Factors" contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

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ITEM 6.    EXHIBITS

(a)

Exhibits:

Exhibit Number	Description
4.1	Override Agrement between Hertz (U.K.) Limited and Lombard North Central Plc, dated as of March 25, 2008
4.2	Guarantee of Hertz (U.K.) Limited to Lombard North Central Plc, dated as of December 21, 2007
4.3	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
15	Letter from PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, dated May 9, 2008, relating to Financial Information
31.1-31.2	Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer
32.1-32.2	18 U.S.C. Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer

Note:

Certain instruments with respect to various additional obligations, which could be considered as long-term debt have not been filed as exhibits to this Report because the total amount of securities authorized under any such instrument does not exceed 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.

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SIGNATURE

Pursuant to the requirements 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.

Date: May 9, 2008	HERTZ GLOBAL HOLDINGS, INC. (Registrant)
	By:	/s/  ELYSE DOUGLAS
		Elyse Douglas
		Executive Vice President and Chief Financial Officer and Treasurer (principal financial officer and duly authorized officer)

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EXHIBIT INDEX

Exhibit Number	Description
4.1	Override Agrement between Hertz (U.K.) Limited and Lombard North Central Plc, dated as of March 25, 2008
4.2	Guarantee of Hertz (U.K.) Limited to Lombard North Central Plc, dated as of December 21, 2007
4.3	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
15	Letter from PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm, dated May 9, 2008, relating to Financial Information
31.1-31.2	Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer
32.1-32.2	18 U.S.C. Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer

Note:

Certain instruments with respect to various additional obligations, which could be considered as long-term debt have not been filed as exhibits to this Report because the total amount of securities authorized under any such instrument does not exceed 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.

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QuickLinks

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
INDEX
PART I—FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2008 AND DECEMBER 31, 2007

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 4. CONTROLS AND PROCEDURES

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
ITEM 1A. RISK FACTORS
ITEM 6. EXHIBITS

SIGNATURE
EXHIBIT INDEX

EX-4.1

Exhibit 4.1

CONFORMED COPY

Override Agreement

Dated25 MARCH 2008

Hertz UK Limited

Lombard North Central Plc

Denton Wilde Sapte LLP

One Fleet Place

London EC4M 7WS

United Kingdom

T +44 (0)20 7242 1212

F +44 (0)20 7246 7777

Telex 887793

DX 242

info@dentonwildesapte.com

www.dentonwildesapte.com

International Lawyers

Contents

1	Definitions and Interpretation	1
1.1	Definitions	1
1.2	Interpretation	7
1.3	Agreements and Statutes	8
1.4	Headings	8
1.5	Time	8
1.6	Third Party Rights	8
2	Effective Date	8
3	The LoU	8
4	Availability of the Facility	8
4.1	The Facility	8
4.2	Commitment Period	9
4.3	Available Facility	9
4.4	LCV sub-limit	9
4.5	Commercial terms	9
4.6	Potential Events of Default	9
5	Changes in Circumstances and Adverse Tax Change	10
5.1	Application of Clause	10
5.2	Negotiations	10
5.3	Cancellation and Exit Fee	10
6	Representations and Warranties	10
6.1	Reliance	10
6.2	Status	11
6.3	Binding obligations	11
6.4	Non-conflict with other obligations	11
6.5	Power and authority	11
6.6	Validity and admissibility in evidence	11
6.7	Governing law and enforcement	11
6.8	No misleading information	12
6.9	Financial statements	12
6.10	Group Structure	12
6.11	Insolvency	12
6.12	No default	12
6.13	No proceedings pending or threatened	13
6.14	Environmental Laws	13
6.15	Repetition	13
7	Information Undertakings	13
7.1	Annual Statements	13
7.2	Monthly Management Statements	13
7.3	Compliance Certificates	14
7.4	Operating Plan	14
7.5	Information to Shareholders	14
7.6	Group structure	14
7.7	Notification of default	14
7.8	Information on request	15
8	General Undertakings	15
8.1	Negative Pledge	15
8.2	Licensing	15

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8.3	Systems and records	15
8.4	Change of business	15
8.5	Insolvency Regulation	15
8.6	Environmental compliance	16
8.7	Data protection, etc.	16
9	Financial Covenants	16
9.1	Covenants	16
9.2	Change in accounting reference date, policies, etc.	16
10	Default	17
10.1	Events of Default	17
10.2	Separate nature	18
10.3	Cancellation, etc.	18
11	Fees and Costs	19
11.1	Commitment Fee	19
11.2	Arrangement Fee	19
11.3	Costs	19
11.4	Default interest	19
12	Notices	20
12.1	Communications in Writing	20
12.2	Delivery	20
13	Set off and counterclaim	20
13.1	By Hertz	20
13.2	By Lombard	20
14	Waivers; remedies cumulative	20
15	Severance	21
16	Assignment	21
16.1	No Assignment	21
16.2	Benefit	21
17	Counterparts	21
18	Law	21
Schedule 1 — Conditions Precedent		22
Schedule 2 - Financial Covenants		23
Schedule 3 – Data Protection, etc.		26
Schedule 4 – Guarantee Confirmation		28

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Lombard Override Agreement

Dated    25 MARCH 2008

Between

(1)Hertz UK Limited registered in England with number 00597994 and whose registered office is at Hertz House, 11 Vine Street, Uxbridge, Middlesex UB8 1QE (Hertz); and

(2)Lombard North Central Plc registered in England with number 337004 and whose registered office is at 3 Princess Way, Redhill RH1 1NP (Lombard).

Recitals

ALombard provides a short term vehicle leasing facility to Hertz on an uncommitted basis under the terms of the LoU.

BLombard has agreed to provide these leasing facilities on a committed basis; and

CLombard and Hertz have agreed to enter into this Agreement to set out the terms of that commitment, together with certain other matters.

It is agreed:

1Definitions and Interpretation

1.1Definitions

In this Agreement the following definitions shall apply.

Adverse Tax Change means any change (whether such change has occurred or is scheduled to occur) (other than an Anticipated Tax Change) to:

(a)fiscal legislation applicable in the United Kingdom; or

(b)H.M. Revenue & Customs practice

which in Hertz’s reasonable opinion results or will result in the cost to Hertz of the availability or utilisation of the Facility materially increasing (as compared to such cost if the relevant change did not or will not occur).

Anticipated Tax Change means the reduction in the rates of corporation tax and writing down allowances to 28% and 20% respectively in respect of vehicles of a type which could be Financed Vehicles, as announced in the Budget 2007, to take effect from April 2008.

Available Facility means on a given date:

(a)the Facility Amount applicable at that date; less

(b)the amount of Utilisations either existing at that date or which are due to be made on or before that date.

Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in London.

1

Change of Control means:

(a)The Guarantor ceases to control directly or indirectly Hertz; or

(b)the Guarantor ceases to be controlled by Hertz Global Holdings, Inc.

For the purposes of this definition:

(x)control of Hertz means:

(i)the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

(1)cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of Hertz; or

(2)appoint or remove all, or the majority, of the directors or other equivalent officers of Hertz; or

(3)give directions with respect to the operating and financial policies of Hertz with which the directors or other equivalent officers of Hertz are obliged to comply; and/or

(ii)the holding beneficially of more than 50% of the issued share capital of Hertz (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); and

(y)acting in concert means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition of shares in Hertz (or any holding company of Hertz) by any of them, either directly or indirectly, to obtain or consolidate control of Hertz,

and controlled shall be construed accordingly.

Change Notice means a written notice from Lombard to Hertz that Lombard considers (in its discretion exercised in good faith) that there is, or it is reasonably likely that there will be, a material adverse effect on Lombard’s ability to provide, or to continue to provide the Facility, either at all or at the same cost and with a comparable rate of return as a result of a change (whether such change has occurred or is scheduled to occur) to:

(a)fiscal legislation applicable in the United Kingdom;

(b)H.M. Revenue & Customs practice; or

(c)accounting standards or the accounting treatment of the Facility and/or the leases under the Rental Agreements in the books of Lombard,

(d)or the interpretation or application of any of the same.

Compliance Certificate means a certificate substantially in the form set out in Part B of Schedule 2 (Form of Compliance Certificate).

Default means an Event of Default or a Potential Event of Default.

Effective Date means the date on which the written confirmation contemplated by Clause 2 (Conditions Precedent) has been given by Lombard .

2

Environment means ecological systems, living organisms (including human beings) and all or any of the following media (whether alone or in combination): air (including air within buildings or other structures and whether above or below ground); land (including buildings and any other structures or erections in, on or under it or any soil and anything below the surface of the land); land covered with water; and water (including water under or within land or in pipe or sewerage systems and sea, ground and surface water).

Environmental Claim means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law.

Environmental Law means any applicable law or regulation which relates to:

(a)the pollution or protection of the Environment;

(b)harm to or the protection of human health;

(c)the conditions of the workplace; or

(d)any emission or substance capable of causing harm to any living organism or the Environment.

Environmental Permit means any permit and other authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of Hertz conducted on or from the properties owned or used by Hertz.

Event of Default means any event or circumstance specified as such in Clause 10.1 (Events of Default).

Facility means the facility provided pursuant to and on the terms of this Agreement (together with the LoU).

Facility Amount means

(a)for the period from the Effective Date to (and excluding) 1 May 2008, £135,000,000;

(b)for the period from (and including)1 May 2008 to (and excluding) 1 May 2009, £175,000,000;

(c)for the period from (and including) 1 May 2009 to (and excluding) 1 May 2010, £185,000,000;

(d)for the period from (and including) 1 May 2010 to (and excluding) 1 May 2011, £195,000,000;

(e)for the period from (and including) 1 May 2011 to (and excluding) 1 May 2012, £205,000,000; and

(f)for the period from (and including) 1 May 2012 to (and including) the Termination Date, £215,000,000.

Financed Vehicles means any vehicle whose acquisition has been financed by Hertz pursuant to this Agreement and a lease or hire purchase contract under the LoU where such vehicle remains subject to such contract.

Financial Indebtedness means any indebtedness for or in respect of:

(a)moneys borrowed;

(b)any amount raised by acceptance under any acceptance credit facility;

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(c)any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d)any amount raised pursuant to any issue of shares which are expressed to be redeemable;

(e)the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with generally accepted accounting principles in the relevant jurisdiction, be treated as a finance or capital lease;

(f)the amount of any liability in respect of any advance or deferred purchase agreement if one of the primary reasons for entering into such agreement is to raise finance;

(g)receivables sold or discounted (other than on a non-recourse basis);

(h)any agreement or option to re-acquire an asset if one of the primary reasons for entering into such agreement or option is to raise finance;

(i)any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; and

(j)the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above,

save to the extent that such indebtedness directly relates to Financed Vehicles.

Group means the Guarantor and its subsidiaries.

Guarantee means the guarantee dated 21 December 2007 from the Guarantor in favour of Lombard.

Guarantee Confirmation means a confirmation from the Guarantor in respect of the Guarantee in the form set out in Schedule 4.

Guarantor means Hertz International Limited.

IFRS means international accounting standards within the meaning of IAS Regulation 1606/2002.

Increase Date means each date on which the Facility Amount is increased.

Increased Costs means the absolute value of:

(a)any reduction in the rate of return from the Facility or on Lombard’s (or its affiliate’s) overall capital;

(b)any additional or increased cost; or

(c)any reduction of any amount due and payable under any Rental Agreement,

which is incurred or suffered by Lombard or any of its affiliates to the extent that it is (i) attributable to Lombard having entered into its commitment or funding or performing its obligations under any of the Lombard Finance Documents and (ii) not attributable to the wilful breach by Lombard or its affiliates of any law or regulation.

Initial Sale and Leaseback means the sale and leaseback transaction entered into between Lombard and Hertz on 21 December 2007.

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LCVs means light commercial vehicles, being vehicles which do not exceed 3.5 tonnes gross vehicle weight and which are supplied strictly in accordance with the manufacturer’s standard specification.

LoU means the letter of understanding dated 18 August 1997 made between Lombard and Hertz, together with (i) any Rental Agreements issued thereunder and (ii) any other documents entered into after the date of this Agreement between Lombard and Hertz pursuant thereto.

Lombard Finance Documents means the LoU, this Agreement, the Guarantee and the Guarantee Confirmation.

Material Adverse Effect means a material adverse effect (as judged by Lombard acting reasonably) on (a) the ability of Hertz to comply with its obligations under any Lombard Finance Document and (b) the business, financial condition or assets of Hertz.

Obligors means Hertz and the Guarantor.

Original Financial Statements means the audited financial statements (including all additional information and notes to the accounts) together with the relevant directors’ report and auditors’ reports for Hertz’s financial year ended 31 December 2006.

Permitted Security means:

(a)any lien in favour of a tax authority arising in respect of taxes which are being contested by Hertz in good faith;

(b)any Security arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to Hertz in the ordinary course of its day-to-day trading activities and on the supplier’s standard or usual terms and not arising as a result of any default or omission by the Hertz;

(c)any Security which arises under a finance lease to the extent such finance lease is deemed to create Security under the applicable law;

(d)any Security which secures Financial Indebtedness existing in respect of any property or assets of any company (and not the shares thereof) where such company’s assets and property or shares are acquired by Hertz provided that (a) the relevant Security was not created in contemplation of the acquisition, (b) the amount of Financial Indebtedness has not increased in contemplation of or since such acquisition and (c) provided that such Security is released within 90 days from the date of the relevant acquisition;

(e)any carriers’, warehousemans’, mechanics liens or similar Security arising in the ordinary course of day-to-day trading activities and on the supplier’s standard or usual terms and not as a result of any default or omission by Hertz which are not overdue for a period of more than 60 days;

(f)any Security arising under rent deposit deeds relating to leasehold properties of Hertz;

(g)any Security arising by reason of any judgment, decree or order of any court or other governmental authority if proceedings have been duly initiated for the review of such judgment, decree or order and are being diligently pursued and shall not have been finally determined;

(h)any netting, set off or similar arrangement arising under cash pooling arrangements entered into by Hertz in the normal course of its banking arrangements; and

(i)any Security securing Financial Indebtedness either (i) owing to any other finance lessor in respect of vehicle leasing facilities or (ii) arising directly in connection with

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receivables sold or discounted on a recourse basis, PROVIDED THAT the aggregate principal amount of such Financial Indebtedness (when aggregated with the principal amount of any other Financial Indebtedness which has the benefit of Security other than as permitted pursuant to paragraphs (a) to (h)) does not exceed £70,000,000 (or its equivalent in other currencies).

Potential Event of Default means an event or omission which with either:

(a)the giving of any notice;

(b)the lapse of time;

(c)the determination of materiality; or

(d)the satisfaction of any other condition under Clause 10.1 (Events of Default),

would be an Event of Default.

Quarter means a period commencing the day after a Quarter Date and ending on the next Quarter Date.

Quarter Date means each of 31 March, 30 June, 30 September, and 31 December.

Rental Agreement  means any rental agreement entered under the LoU (and a reference to a clause of a Rental Agreement is to the clause of that number in the form of Rental Agreement attached to the LoU (or the equivalent clause in the particular Rental Agreement)).

Residual Value means, in relation to each Financed Vehicle, the value attributed to such vehicle at the end of the minimum fixed period of hire of such Financed Vehicle in accordance with the relevant Rental Agreement.

Sales Proceeds means any proceeds receivable by Hertz in respect of the sale of Financed Vehicles.

Security means any mortgage, charge, security, pledge, lien, right of set-off, right to retention of title or other encumbrance, whether fixed or floating, over any present or future property, assets or undertaking.

Security Period means the period starting on the date of this Agreement and ending on the date on which Lombard is satisfied that all of the liabilities of Hertz under each Lombard Finance Document are irrevocably discharged in full and Lombard has no commitment or liability, whether present or future, actual or contingent, in relation to the Facility.

Termination Date means 28 February 2013.

UK Fleet means vehicles purchased or leased by Hertz for daily rental purposes within the UK.

UK GAAP means the accounting bases, policies, practices and procedures generally accepted and adopted in the UK including (where applicable) IFRS.

US GAAP means the accounting bases, policies, practices and procedures generally accepted and adopted in the US.

Utilisation means a utilisation of the Facility (and the amount of a Utilisation shall be as measured in accordance with Clause 4.3.2).

VAT means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature.

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1.2Interpretation

Any reference in this Agreement to:

an affiliate shall mean, in relation to any person, a subsidiary of that person or a holding company of that person or any other subsidiary of that holding company;

a Clause or a Schedule is to a clause of, or a Schedule to, this Agreement;

a holding company of a company or corporation shall be construed as a reference to any company or corporation of which the first-mentioned company or corporation is a subsidiary;

indebtedness shall be construed so as to include any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

a law shall be construed as any law (including common or customary law), statute, constitution, decree, judgment, treaty, regulation, directive, bye-law, order or any other legislative measure of any government, supranational, local government, statutory or regulatory body or court;

a month is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next succeeding calendar month save that:

(a)if any such numerically corresponding day is not a Business Day, such period shall end on the immediately succeeding Business Day to occur in that next succeeding calendar month or, if none, it shall end on the immediately preceding Business Day; and

(b)if there is no numerically corresponding day in that next succeeding calendar month, that period shall end on the last Business Day in that next succeeding calendar month,

(and references to “months” shall be construed accordingly);

a party means any party to this Agreement;

a person shall be construed as a reference to any person, firm, company, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) of two or more of the foregoing;

repay (or any derivative form thereof) shall, subject to any contrary indication, be construed to include prepay (or, as the case may be, the corresponding derivative form thereof);

a subsidiary means a subsidiary undertaking within the meaning of section 258 of the Companies Act 1985;

a successor shall be construed so as to include an assignee or successor in title of such party and any person who under the laws of its jurisdiction of incorporation or domicile has assumed the rights and obligations of such party under this Agreement or to which, under such laws, such rights and obligations have been transferred;

tax shall be construed so as to include any tax, levy, impost, duty or other charge of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same);

a wholly-owned subsidiary of a company or corporation shall be construed as a reference to any company or corporation which has no other members except that other company or corporation and that other company’s or corporation’s wholly-owned subsidiaries or persons acting on behalf of that other company or corporation or its wholly-owned subsidiaries;

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£ and sterling denote lawful currency of the United Kingdom; and

words importing the singular shall include the plural and vice versa.

1.3Agreements and Statutes

Any reference in this Agreement to:

1.3.1this Agreement or any other agreement or document shall be construed as a reference to this Agreement or, as the case may be, such other agreement or document as the same may have been, or may from time to time be, amended, varied, novated, supplemented or replaced.  ; and

1.3.2a statute or treaty shall be construed as a reference to such statute or treaty as the same may have been, or may from time to time be, amended or, in the case of a statute, re-enacted.

1.4Headings

Clause and Schedule headings are for ease of reference only.

1.5Time

Any reference in this Agreement to a time of day shall, unless a contrary indication appears, be a reference to London time.

1.6Third Party Rights

A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

2Effective Date

Clauses 3 (The LoU)  to 5 (Changes in Circumstances and Change of Control) (inclusive), 7 (Information undertakings) to 10 (Defaults) (inclusive) and 11.1 (Commitment Fee) of this Agreement shall have no effect unless and until Lombard has confirmed in writing to Hertz that it has received all of the items listed in Schedule 1 (Conditions Precedent) and that each is, in form and substance, satisfactory to it.

3The LoU

The terms of this Agreement are supplemental to the LoU.  In particular, the terms of this Agreement shall constitute a duly signed written variation of the terms of each Rental Agreement for the purposes of  clause 14.08 thereof.  In the event of a conflict between the provisions of the LoU and this Agreement, the terms of this Agreement shall prevail.

4Availability of the Facility

4.1The Facility

Subject to the other terms of this Agreement, Lombard shall (upon request by Hertz in accordance with Lombard’s standard procedures) enter into sale and lease-back arrangements with Hertz in respect of vehicles for leasing to Hertz as part of the UK Fleet and/or purchase as principal vehicles to be made available to Hertz as part of the UK Fleet by way of leasing on the terms of this Agreement and the LoU.

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4.2Commitment Period

Subject to the terms of the LoU and the other terms of this Agreement, Lombard shall continue to make available the Facility until (but excluding) the Termination Date.

4.3Available Facility

4.3.1Subject to the terms of the LoU and the other terms of this Agreement, Lombard shall allow Hertz to make a Utilisation of the Facility in accordance with such arrangements as it may agree from time to time with Lombard provided that the proposed Utilisation would not exceed the Available Facility on the proposed date of the Utilisation.

4.3.2The amount of each Utilisation shall be measured in accordance with the systems and methods employed by Lombard from time to time.

4.3.3The Initial Sale and Leaseback shall be deemed to constitute a Utilisation of the Facility and shall reduce the Available Facility accordingly.

4.4LCV sub-limit

Without prejudice to Clause 4.3 (Available Facility), a Utilisation of the Facility in respect of LCVs may only be made if the resulting aggregate Utilisations in respect of LCVs would not exceed £30,000,000.

4.5Commercial terms

4.5.1For the avoidance of doubt, except as expressly set out in this Agreement, Lombard shall be free to determine the commercial terms offered in respect of any proposed Utilisation.  Without limiting the foregoing, Lombard intends to offer Hertz for the term of this Agreement pricing terms which are consistent with the pricing terms set out in the Terms of Offer dated 21 December 2007 between Lombard and Hertz. Hertz acknowledges however that the specific pricing which Lombard may offer to Hertz at any time shall be determined by Lombard by reference to a number of factors, including in particular, but without limitation, the cost of funds to Lombard, market conditions, internal credit requirements and the tax or accounting treatment of the transactions between Lombard and Hertz at the relevant time. Pricing terms may vary from indicative pricing provided before or after the date of this Agreement.

4.5.2The maximum “Fixed Period” (as defined in the Rental Agreements) in respect of LCVs shall be 18 months.  The maximum Fixed Period in respect of vehicles other than LCVs shall be 8 months.

4.5.3Rent shall be payable monthly in advance (together with VAT charged at the standard rate, where applicable).  Rental profiles may, at Hertz’s option, include a final balloon rental payment of up to 5% of the capital cost to Lombard of the relevant Financed Vehicle.

4.5.4The maximum Residual Value (expressed as a percentage) which Lombard might be willing to offer in respect of any vehicle the subject of a proposed Utilisation will be 89% (in the case of vehicles other than LCVs) or 70% (in the case of LCVs) of the original purchase price (net of VAT) of the relevant vehicle.

4.5.5For the purposes of clause 4.01(e) of the LoU, the assumed rate of corporation tax will be nil per cent.  Accordingly, neither party will be required to pay any sum to the other under clause 4.03 of the LoU.

4.6Potential Events of Default

Notwithstanding any other terms of the LoU, no Utilisation may be made without Lombard’s prior written consent for so long as there exists a Default.

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5Changes in Circumstances and Adverse Tax Change

5.1Application of Clause

This Clause 5 shall apply if:

(a)Lombard serves a Change Notice; or

(b)an Adverse Tax Change occurs and Hertz notifies Lombard of this.

5.2Negotiations

If Clause 5 applies, Lombard and Hertz shall, if Hertz requests, promptly commence negotiations in good faith for the purpose of amending (including, without limitation, by way of an increase, or change in structure, of the pricing of the Facility) the terms of the LoU and this Agreement to replace any sale and leaseback arrangements between Lombard and Hertz with a vehicle-specific purchase agency or, as applicable, to mitigate the effects of the Adverse Tax Change.

5.3Cancellation

If:

(i)Hertz notifies Lombard that it does not want to commence or continue negotiations; or

(ii)following the start of negotiations, Lombard and Hertz have not reached a final and legally binding agreement reflecting agreed amendments within 8 weeks (or such longer period as Lombard may at its sole discretion agree)

then:

(a)the Facility shall cease to be committed (without prejudice to any accrued rights and obligations of the parties);

(b)(unless Lombard agrees otherwise) all Rental Agreements then existing shall terminate and termination payments shall become due in accordance with their terms;

(c)Hertz shall within 3 Business Days pay to Lombard an early termination fee in an amount equal to 0.2% of the then Applicable facility Amount plus any VAT payable thereon (being a payment of part of the revenue under the Facility which Lombard will lose in consequence of the termination); and

(d)if Lombard has served a Change Notice, Hertz shall, within three Business Days of a written demand by Lombard (accompanied by a certificate (which shall be conclusive in the absence of manifest error) confirming the amount of Lombard’s Increased Costs then demanded), pay Lombard the amount of any Increased Costs incurred by Lombard or any of its affiliates as a result of the  change which has caused the service of the Change Notice for the period of any negotiations under Clause 5.2.

6Representations and Warranties

6.1Reliance

Lombard has entered into this Agreement in reliance on the representations of Hertz set out in this Clause 6, and Hertz warrants to Lombard on the date of this Agreement as set out below.

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6.2Status

It is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation.

6.3Binding obligations

The obligations expressed to be assumed by it in each Lombard Finance Document to which it is a party are legal, valid, binding and enforceable obligations;

6.4Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, the Lombard Finance Documents do not and will not conflict with:

(a)any law or regulation applicable to it or binding on its assets;

(b)its constitutional documents; or

(c)any agreement or instrument binding upon it or any of its assets where such conflict would have a Material Adverse Effect.

6.5Power and authority

6.5.1It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Lombard Finance Documents and the transactions contemplated by the Lombard Finance Documents.

6.5.2No limit on its powers has been or will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Lombard Finance Documents.

6.6Validity and admissibility in evidence

All authorisations, consents, permissions, approvals, resolutions, licences, exemptions, filings, notarisations and registrations required or desirable:

(a)to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Lombard Finance Documents;

(b)to make the Lombard Finance Documents admissible in evidence in England; and

(c)to enable it and each of its subsidiaries to carry on its business, trade and ordinary activities where the absence of such authorisation, consent, permission, approval, resolution, licence, exemption, filing, notarisation or registration would have a Material Adverse Effect,

have been obtained or effected and are in full force and effect.

6.7Governing law and enforcement

6.7.1The choice of the laws of the State of New York as the governing law of the Guarantee will be recognised and enforced in the jurisdiction of incorporation of the Guarantor.

6.7.2Any judgment obtained in the state of New York will be recognised and enforced in the jurisdiction of incorporation of the Guarantor.

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6.8No misleading information

The management statements and cashflow statement provided by Hertz to Lombard on 26 October 2007 have been prepared by the management of Hertz after reasonable and appropriate enquiries and, in light of such enquiries, are true, complete and accurate in all material respects and the forecasts provided at that time were fair and reasonable in all material respects.

6.9Financial statements

6.9.1Its Original Financial Statements were prepared in accordance with UK GAAP consistently applied.

6.9.2Its Original Financial Statements fairly represent its financial condition and operations as at the end of Hertz’s relevant financial year.

6.9.3Except for the sale of Hertz’s freehold premises at Feltham as disclosed to Lombard before the date of this Agreement, there has been no material adverse change in its business, financial condition, assets or prospects since 31 December 2006.

6.9.4Its most recent financial statements delivered pursuant to Clause 7 (Information undertakings):

(a)have been prepared in accordance with UK GAAP as applied to the Original Financial Statements; and

(b)give a true and fair view of (if audited) or fairly present (if unaudited) its financial condition as at the end of, and results of operations for, the period to which they relate.

6.10Group Structure

The structure of the Group is as set out in the structure chart most recently delivered to Lombard in accordance with Schedule 1 (Conditions precedent) or (as relevant) Clause 7.6 (Group structure) and that chart shows every subsidiary of the Guarantor.

6.11Insolvency

No Obligor has (and none of Hertz’s subsidiaries has) taken any action nor (to the best of its knowledge and belief) have any steps been taken or legal proceedings been started or threatened against it for its winding-up, dissolution or re-organisation, for the enforcement of any Security over its assets or for the appointment of a liquidator, supervisor, receiver, administrator, administrative receiver, compulsory manager, trustee or other similar officer of it or in respect of any of its assets.

6.12No default

6.12.1No Event of Default is continuing or might reasonably be expected to result from the making of any Utilisation.

6.12.2No other event or circumstance is outstanding which constitutes (or would do so with the expiry of a grace period, the giving of notice, the making of any determination, the satisfaction of any other condition or any combination of any of the foregoing) a default or termination event (howsoever described) under any other agreement or instrument which is binding on any Obligor or any of Hertz’s subsidiaries or to which any Obligor’s (or any of Hertz’s subsidiaries’) assets are subject in a manner or to an extent which might have a Material Adverse Effect.

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6.13No proceedings pending or threatened

No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect, have (to the best of its knowledge and belief) been started or threatened against any Obligor or any of Hertz’s subsidiaries, nor is there subsisting any unsatisfied judgment or award given against any of them by any court, arbitrator or other body.

6.14Environmental Laws

6.14.1Hertz and each of its subsidiaries is in compliance with Clause 8.6 (Environmental compliance) and to the best of Hertz’s knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect.

6.14.2No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against it or any of its subsidiaries  where that claim has or is reasonably likely, if unfavourably determined, to have a Material Adverse Effect.

6.14.3No circumstances have arisen which (i) would entitle any regulatory body to revoke, suspend, amend, vary, withdraw, transfer or refuse to amend any Environmental Permit (where such action by a regulatory body might reasonably be expected to have a Material Adverse Effect) or (ii) which might give rise to a claim against Hertz or any subsidiary which might reasonably be expected to have a Material Adverse Effect.

6.15Repetition

The representations set out in this Clause 6 (Representations and warranties) shall survive the execution of this Agreement.  The representations set out in Clauses 6.2 (Status) to 6.6 (Validity and admissibility in evidence), 6.9 (Financial statements), 6.10 (Group structure), 6.12 (No default) and 6.13 (No proceedings threatened or pending) are deemed to be repeated by Hertz  by reference to the facts and circumstances then existing on the date of each request for a Utilisation and each Quarter Date, except that those contained in Clauses 6.9.1 to 6.9.3 (Financial statements) will cease to be so made once subsequent financial statements have been delivered under this Agreement.

7Information Undertakings

7.1Annual Statements

7.1.1Hertz shall, as soon as the same become available, but in any event no later than the latest date for filing permitted under applicable law, deliver to Lombard the audited financial statements and a cashflow statement of Hertz) in the form prescribed by the Companies Act 1985 (or the Companies Act 2006 (as applicable)) for such financial year.  The profit and loss account shall show separately the depreciation and interest cost elements of vehicle financing costs.

7.1.2Hertz shall, as soon as the same become available, but in any event no later than the latest date for filing permitted under applicable law, deliver to Lombard the audited consolidated financial statements of the Guarantor.

7.2Monthly Management Statements

Hertz  shall as soon as the same become available but in any event within 30 days after the end of each month deliver to Lombard the management statements and a cashflow statements of Hertz for such period.  The management accounts shall be in a form approved by Lombard from time to time and shall include a commentary on and reconciliations of significant differences between the reported figures and the budget applicable to that period,

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and shall contain a prior-year comparison.  The income statement shall show separately the depreciation and interest cost elements of vehicle financing costs.  Hertz shall procure that all management statements provided under this Agreement have been prepared in accordance with US GAAP.

7.3Compliance Certificates

7.3.1Hertz shall supply to Lombard:

(a)with each set of financial statements delivered pursuant to Clause 7.1 (Annual Statements); and

(b)with each set of monthly management statements delivered pursuant to Clause 7.2 (Monthly Management Statements) in respect of the months of March, June, September and December in any year,

a Compliance Certificate signed by two authorised signatories of Hertz setting out (in reasonable detail) computations as to compliance with the financial covenants set forth in Schedule 2 (Financial Covenants) as at the date as at which those financial statements were drawn up.

7.4Operating Plan

7.4.1Hertz shall provide to Lombard an Operating Plan in respect of Hertz, not less than 30 days prior to the start of each of its financial years, in a form approved by Lombard and which shall include at least the following:

(a)a projected profit and loss statement;

(b)a projected balance sheet;

(c)a projected cash flow statement; and

(d)projected covenant calculations relating to each financial undertaking contained in Schedule 2 (Financial Covenants),

relative to the financial year next starting and set out on a month-by-month basis together with management’s commentary drawing on the previous period’s performance and forecast market conditions.

7.4.2Hertz shall, as soon as the same become available and in any event within 30 days of the end of the relevant Quarter, provide to Lombard (in a format approved by it) revised estimates, forecasts and projections in respect of the remainder of the then current financial year.

7.5Information to Shareholders

Hertz shall supply to Lombard all documents dispatched by the Company to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched.

7.6Group structure

Hertz shall supply to Lombard a revised group structure chart promptly upon any change occurring in the group structure between Hertz Global Holdings, Inc. and Hertz, together with a note identifying the relevant change.

7.7Notification of default

Hertz shall notify Lombard of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

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7.8Information on request

Promptly following Lombard’s written request from time to time, Hertz shall provide to Lombard such other information, estimates, forecasts or projections in relation to it and its financial condition, business and operations as Lombard may reasonably require.

8General Undertakings

8.1Negative Pledge

Hertz shall not create nor permit to subsist any Security (other than Permitted Security) over any of its assets or undertaking, other than with the prior written consent of the Lombard.

8.2Licensing

Hertz, if a party to a written licensing agreement for the use of the trademark “Hertz” (or any trademark deriving from it), undertakes that it will not without the prior written consent of Lombard (such consent not to be unreasonably withheld):

(a)consent to any change to the terms of such agreement that may have a significant adverse effect upon the ability of Hertz to use such trademarks;

(b)terminate that agreement; and

Hertz undertakes that in the event of any circumstance giving rise to the termination of such licensing agreement it will use its reasonable endeavours to acquire equivalent rights to continue to use such trademarks.

8.3Systems and records

8.3.1Hertz shall at all times maintain systems and records satisfactory to Lombard for tracking the Financed Vehicles.

8.3.2Hertz shall give Lombard access to its books and records and shall give Lombard such assistance as it may require:

(a)every 6 months (commencing in April 2008) for the purposes of Lombard conducting an audit of Hertz’s systems and records;

(b)every 6 months (commencing in April 2008) for the purposes of Lombard conducting an audit of Hertz’s sub-hire arrangements; and

(c)on demand at any time following the occurrence of a Default which is continuing.

8.4Change of business

Hertz shall procure that no substantial change is made to the general nature of the business of Hertz or any of its subsidiaries from that carried on at the date of this Agreement.

8.5Insolvency Regulation

Hertz shall:

(a)maintain its centre of main interests in England and Wales for the purposes of the Insolvency Regulation; and

(b)not open or maintain any establishment (as defined in Article 2(h) of the Insolvency Regulation) in any Member State (within the meaning of the Insolvency Regulation)

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other than the United Kingdom or take any action or permit any action to be taken which may result in a court of any other Member State finding that Hertz has an establishment in that other Member State,

where Insolvency Regulation means the Council Regulation (EC) No.1346/2000 of 29 May 2000 on Insolvency Proceedings.

8.6Environmental compliance

Hertz shall (and shall ensure that each of its subsidiaries will):

(a)comply with all Environmental Law;

(b)obtain, maintain and ensure compliance with all requisite Environmental Permits; and

(c)implement procedures to monitor compliance with and to prevent liability under any Environmental Law,

where, in each case, failure to do so has or is reasonably likely to have a Material Adverse Effect.

8.7Data protection, etc.

8.7.1The terms detailed in Schedule 3 (Data Protection, etc.) are incorporated into the LoU and all Rental Agreements.

8.7.2Hertz agrees that Lombard may use Hertz’s information in the way described in Schedule 3 and in the associated Terms and Conditions of the Rental Agreements.  Hertz confirms that its signatory to this Agreement is duly authorised by its other officers and beneficial owners to consent to the searches and use of information referred to in Schedule 3 in the same way.

8.7.3Hertz shall, on the Effective Date, notify Lombard of its elections under the “Keeping You Informed” section of Schedule 3.

9Financial Covenants

9.1Covenants

Hertz undertakes to ensure that the financial covenants set out in Part A of Schedule 2 (Financial Covenants) are complied with.

9.2Change in accounting reference date, policies, etc.

9.2.1If:

(a)the directors of Hertz determine at any time that the accounting reference date of Hertz has or should be changed or any of the accounting principles applied in the preparation of any of the accounts shall be different from those under UK GAAP (in relation to annual accounts) or US GAAP (in relation to monthly management accounts) as at the date of this Agreement, or if as a result of the introduction or implementation of any Statement of Standard Accounting Practice issued by the Institute of Chartered Accountants in England and Wales, Financial Reporting Standard issued by the Accounting Standards Board, International Accounting Standard or International Financial Reporting Standard or any change in any of them or in any applicable law such accounting principles are required to be changed, Hertz shall promptly give notice to Lombard of that change, determination or requirement;

(b)Lombard believes in its reasonable judgment that the financial undertakings set out in Clause 9.1 (Covenants) and Part A of Schedule 2 (Financial Covenants) need to be

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amended as a result of any such change, determination or requirement, Hertz and Lombard shall negotiate in good faith to amend the existing financial undertakings so as to provide Lombard with substantially the same protections as the financial undertakings set out in Part A of Schedule 2 (Financial Covenants);

(c)Hertz and Lombard cannot agree such amended financial undertakings within 30 days of that notice, Hertz and Lombard shall jointly nominate a firm of chartered accountants to settle the amended financial undertakings, or in default of such nomination Lombard shall request the President for the time being of the Institute of Chartered Accountants in England and Wales to nominate a firm of chartered accountants for that purpose.  Such accountants shall act as experts and not arbitrators and their decision shall be final and binding on the Parties.  The costs of such accountants shall be borne by the parties equally unless the nominated accountants determine that a party has failed to meet its obligations under Clause (b) (in which case, that party shall bear all of the nominated accountants’ costs).

10Default

10.1Events of Default

10.1.1Each of the following events or circumstances is an Event of Default:

(a)breach of Rental Agreement: Hertz:

(i)fails to pay within 5 Business Days of the due date any amount payable by it under a Rental Agreement; or

(ii)can be treated as having repudiated any Rental Agreement in accordance with clause 7.01(b) or (d) thereof;

(b)financial covenants: any requirement of Clause 9.1 (Covenants) is not satisfied on any date it is tested in accordance with Part A of Schedule 2 (Financial covenants);

(c)any other breach: any Obligor does not comply with any provision of the Lombard Finance Documents (other than those referred to in Clauses (a) and (b)) unless the failure to comply is capable of remedy and is remedied within fifteen days of Lombard giving notice to Hertz;

(d)misrepresentation, etc.: any representation, warranty or statement made or given or deemed to be made or given by any Obligor in or under the Lombard Finance Documents or any other document delivered by or on behalf of an Obligor under or in connection with any Lombard Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made unless such default is capable of remedy and is remedied within 15 Business Days of Lombard giving notice to Hertz;

(e)insolvency:

(i)an Obligor is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness;

(ii)the value of the assets of an Obligor is less than its liabilities (taking into account contingent and prospective liabilities);

(iii)a moratorium or other protection from its creditors is declared or imposed in respect of any indebtedness of an Obligor;

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(iv)any corporate action, legal proceedings or other procedure or step is taken (including the making of an application, the presentation of a petition, the filing or service of a notice or the passing of a resolution) in relation to:

(aa)the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of an Obligor;

(bb)a composition, compromise, assignment or arrangement with any creditor of an Obligor;

(cc)the appointment of a liquidator, supervisor, receiver, administrative receiver, administrator, compulsory manager, trustee or other similar officer in respect of an Obligor or any of its assets; or

(dd)enforcement of any Security over any assets of an Obligor for an amount exceeding £50,000,

or any analogous procedure or step is taken in any jurisdiction, except in the case of a winding-up petition which is (i) in Lombard’s opinion an abuse of process or has no real prospect of success and (ii) in any event discharged within 7 days of its presentation and before it is advertised;

(f)cross default: any Financial Indebtedness of Hertz in excess of, in aggregate, £1,000,000 :

(i)is not paid when due;

(ii)is declared to be or otherwise becomes due and payable prior to its specified maturity; or

(iii)any creditor of Hertz becomes entitled to declare any such Financial Indebtedness due and payable prior to its specified maturity;

(g)unlawfulness, etc.: it becomes unlawful for an Obligor to perform or comply with, or an Obligor repudiates, any of its obligations under any Lombard Finance Document;

(h)invalidity: any of the Lombard Finance Documents is, or is claimed by an Obligor to be, not in full force and effect; and

(i)change of control: there occurs a Change of Control.

10.2Separate nature

Each Event of Default set out in Clause 10.1 (Events of Default) constitutes a separate and independent Event of Default which shall not be qualified by reference to any other Event of Default.  The occurrence or otherwise of an Event of Default shall be without prejudice to any other rights or remedies which Lombard might have under the LoU or any of the other Lombard Finance Documents.

10.3Cancellation, etc.

On and at any time after the occurrence of an Event of Default which is continuing (and which, for the avoidance of doubt, remains unremedied and unwaived), Lombard may by notice to Hertz:

(a)cancel the committed nature of the Facility (whereupon Lombard shall be entitled to refuse further Utilisations of the Facility in its absolute discretion); and/or

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(b)terminate any of the Rental Agreements (and under the terms of each terminated Rental Agreement (x) the relevant Event of Default will be deemed to be a breach thereof and (y) the termination of that Rental Agreement will be deemed to have been for a breach thereof) and, for the avoidance of doubt, any Sales Proceeds in respect of a terminated Rental Agreement shall then be immediately due and payable; and/or

(c)require payment in full of any outstanding instalments of the arrangement fee referred to in clause 11.2 (Arrangement Fee).

11Fees and Costs

11.1Commitment Fee

11.1.1Hertz shall pay a commitment fee to Lombard calculated at the rate of 0. 75% per annum of the Headroom (determined as set out below), together with VAT payable thereon (if any). The commitment fee shall be payable in arrear:

(a)on the Business Day immediately following each anniversary of this Agreement; and

(b)on the last Business Day on which the Facility is available on a committed basis.

Each period at the end of which the Commitment Fee is payable is a Fee Period.

11.1.2Headroom shall be determined by reference to the Utilisation for each calendar month in the relevant Fee Period on the last day of that calendar month. If that Utilisation is more than 80% of the Facility Amount for that month, the excess amount shall be recorded as a positive figure. If that Utilisation is less than 80% of the Facility Amount for that month, the difference shall be recorded as a negative figure.

11.1.3At end of each Fee Period, each monthly figure shall be added together. If the resulting total amount is positive, no commitment fee shall be payable by Hertz for that Fee Period but for the avoidance of doubt, no amount shall be payable, nor credit given, by Lombard to Hertz and Hertz shall not be entitled to carry forward any positive amount to any subsequent Fee Period.   If the resulting total amount is negative, that amount shall be divided by the number of months in the relevant Fee Period and the resulting figure shall be the Headroom.

11.2Arrangement Fee

11.2.1Hertz shall pay Lombard an aggregate, non-refundable arrangement fee of £537,500 which (together with VAT payable thereon (if any)) as follows:

(i)as to £337,500, prior to the Effective Date (and the receipt of which Lombard acknowledges);

(ii)as to £100,000 on the first Increase Date; and

(iii)as to the balance, by payment of £25,000 on each subsequent Increase Date.

11.3Costs

Hertz shall forthwith on demand pay or reimburse to Lombard the amount of all costs and expenses (including legal fees and VAT) incurred by Lombard in connection with the enforcement of, or the preservation of any rights under, the Lombard Finance Documents.

11.4Default interest

Clause 14.02 of the form of Rental Agreement shall apply mutatis mutandis to any amount due to Lombard under a Lombard Finance Document which is not paid on the due date for payment.

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12Notices

12.1Communications in Writing

Each communication to be made hereunder shall be made in writing and, unless otherwise stated, shall be made by fax or letter.

12.2Delivery

Any communication or document to be made or delivered by one person to another pursuant to this Agreement shall:

12.2.1if by way of fax (unless that other person has by fifteen days’ notice specified in writing another number) be made to such other person to the fax number identified with its signature below and shall be deemed to have been received when transmission has been completed; and

12.2.2if by way of letter (unless that other person has by fifteen days’ notice specified in writing another address) be delivered to that other person at the address identified with its signature below and shall be deemed to have been delivered when left at that address or, as the case may be, ten days after being deposited in the post postage prepaid in an envelope addressed to it at that address,

provided that any communication or document to be made or delivered to Lombard shall be effective only when received at the address indicated below and then only if the same is expressly marked for the attention of the department or officer (if any) identified with its signature below (or such other department or officer as Lombard shall from time to time specify for this purpose).

13Set off and counterclaim

13.1By Hertz

All payments by Hertz under the Lombard Finance Documents shall be made without set-off or counterclaim.

13.2By Lombard

At any time whilst an Event of Default is continuing, or at any time on or after the Facility is cancelled or terminates, Lombard may set off any matured obligation owed by Hertz under any Lombard Finance Document against any obligation (whether or not matured) owed by Lombard to Hertz.  If the obligations are in different currencies, Lombard may for the purpose of the set-off convert either obligation at the relevant spot rate of exchange quoted by The Royal Bank of Scotland plc.

14Waivers; remedies cumulative

The rights of Lombard under the Lombard Finance Documents:

(a)may be exercised as often as necessary;

(b)are cumulative and not exclusive of its rights under the general law; and

(c)may be waived only in writing and specifically.

Delay in exercising or non-exercise of any such right is not a waiver of that right.

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15Severance

If any provision of this Agreement is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect:

(a)the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement; or

(b)the legality, validity or enforceability in any other jurisdiction of that or any other provision of this Agreement.

16Assignment

16.1No Assignment

None of the Lombard Finance Documents nor any rights or obligations thereunder shall be assignable or transferable by Hertz except with the prior written consent of Lombard.  Lombard may freely assign or transfer any of the Lombard Finance Documents or any of its rights or obligations thereunder.  Lombard agrees that it will (unless it determines in its absolute discretion that it is not practicable or desirable to do so) consult with Hertz as to the identity of any proposed assignee or transferee.

16.2Benefit

This Agreement shall enure for the benefit of the successors to or permitted transferees or assignees of any of the parties.

17Counterparts

This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

18Law

This Agreement will be governed by and construed according to English law and Hertz  submits to the jurisdiction of the English Courts.

Signed by the parties or their duly authorised representatives

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Schedule 1 — Conditions Precedent

In this Schedule, Certified Copy means, in relation to a document, a copy of that document bearing the endorsement “Certified a true, complete and accurate copy of the original, which has not been amended otherwise than by a document and which is in full force and effect as at [date of this Agreement], a Certified Copy of which is attached hereto”, which has been signed and dated by a duly authorised officer of the relevant company and which complies with that endorsement.

The conditions referred to in Clause 2 (Conditions Precedent) are that Lombard shall have received each of the following in form and substance satisfactory to it:

1.this Agreement executed by each party to it;

2.the fees and costs payable in accordance with this Agreement on or before the date hereof;

3.a Certified Copy of Hertz’s constitutional documents, certificate of incorporation and any certificates of incorporation on change of name;

4.a Certified Copy of a resolution of Hertz’s board of directors:

a)approving the terms of, and the transactions contemplated by, the Lombard Finance Documents to which it is a party and which have not been executed before the date of this Agreement, and resolving that it execute such Lombard Finance Documents;

b)authorising a specified person or persons to execute on its behalf the Lombard Finance Documents which have not been executed before the date of this Agreement and to which it is a party; and

c)authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (for example, Compliance Certificates) to be signed and/or despatched by it under or in connection with the Lombard Finance Documents to which it is a party; and

d)a specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above in relation to the Lombard Finance Documents which have not been executed before the date of this Agreement;

5.the Guarantee Confirmation duly executed by the Guarantor; and

6.a group structure chart.

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Schedule 2- Financial Covenants

Part A – Covenants

1.In this Schedule, the following words have the following meaning:

EBIT means, in relation to any period, the unconsolidated operating profit (before extraordinary and exceptional items) of Hertz  for that period (which, for the avoidance of doubt is calculated before taxation and Interest Expense).

EBITDA means, in relation to any period, EBIT for that period but adding back amounts charged in the period in respect of the depreciation or amortisation of non-fleet tangible and intangible fixed assets.

Fleet Capital Employed means the aggregate of Hertz’s net book value of revenue-earning vehicles, plus net manufacturer receivables, less vehicle payables (as such items are set out in the format for monthly management accounts approved by Lombard).

Fleet Utilisation means, at a given time, the total number of days during which vehicles have been on rent (each vehicle contributing separately to this total) as a percentage of the total number of days during which such vehicles were available for rental (excluding, for the avoidance of doubt, days when vehicles were not available for rental because of mechanical problems, maintenance or repairs) in the preceding 12 month period (each vehicle contributing separately to this total).

Interest Expense means, in relation to any period, all interest (including the interest cost element of vehicle financing costs), commissions, periodic fees and other financing charges (excluding the Arrangement Fee) accrued by Hertz during that period.

Tangible Net Worth means, at a given time, the total capital employed by Hertz as disclosed in the Original Financial Statements, plus:

(a)cumulative retained profit earned after that date; and

(b)translation, dividend and all other financial adjustments not included in cumulative retained profit.

Total Fleet Debt means the aggregate of Utilisations as at the relevant date.

2.Hertz undertakes to ensure that during the period referred to in Clause 4.1 (Commitment Period), unless Lombard otherwise agrees:

(a)Tangible Net Worth

(i)Tangible Net Worth, excluding the effect of any change in the actuarial loss in respect of pension schemes compared to that actuarial loss disclosed in the Original Financial Statements, shall not at any time on or before 30 June 2008 be less than £14,000,000 and (thereafter) £15,000,000; and

(ii)Tangible Net Worth shall not at any time be less than £5,000,000;

(b)Interest Cover

the ratio of EBITDA to Interest Expense in respect of the 12 month period ending on each Quarter Date shall not be less than 1.50:1;

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(c)Total Fleet Debt to Fleet Capital Employed

the ratio of Total Fleet Debt to Fleet Capital Employed on each Quarter Date shall not be more than 1:1; and

(d)Fleet Utilisation

the Fleet Utilisation of the UK Fleet on each Quarter Date shall not be less than 65%.

3.The calculation of ratios and other amounts under this Schedule shall be made by reference to the latest financial statements provided to Lombard under Clauses 7.1 (Annual Statements) and 7.2 (Monthly Management Statements) for the period in relation to which the calculation falls to be made.

4.The first covenant test date shall be 30 June 2008.

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Part B – Form of Compliance Certificate

To:Lombard North Central Plc

From:Hertz UK Limited

Dated: **

Dear Sirs

Hertz UK Limited – Override Agreement dated **                   (the Agreement)

1We refer to the Agreement.  This is a Compliance Certificate.  Terms defined in the Agreement have the same meaning in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

2We confirm that:  [Insert details of covenants to be certified]

3[We confirm that no Default is continuing.]

With regard to paragraph 3, if this statement cannot be made, the certificate should identify any Event of Default that is continuing and the steps, if any, being taken to remedy it.

Signed:
	Authorised signatory	Authorised signatory
	Of	of
	Hertz UK Limited	Hertz UK Limited

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Schedule 3– Data Protection, etc.

 KEEPING YOU INFORMED

We would like to keep you informed by letter, phone and electronic means (including e-mail and fax) about products, services and additional benefits that we believe may be of interest to you.  If you don’t want us to keep you informed by any of these methods, please place a cross in the appropriate box below.

Letter  o   Phone  o    E-mail  o     Fax  o

 GIVING YOUR CONSENT

By signing this agreement you are agreeing that we may use your information in the way described in this form (including the ‘Keeping you informed’ section) and in the associated Terms and Conditions.  You are also confirming that you are duly authorised by other officers and beneficial owners to consent to the searches and use of information in the same way.

1 Your information

1.1Who we are

We are a member of The Royal Bank of Scotland Group (the Group).  For information about our Group of companies, please visit www.rbs.com and click on ‘About us’, or for similar enquiries telephone 0131 556 8555 or Textphone 0845 900 5960.

How we use your information and who we share it with

Your information comprises all the details we hold about you and your transactions, and includes information obtained from third parties.

We may use and share your information with other members of the Group to help us and them assess financial and insurance risks; recover debt; prevent and detect crime; understand our customers’ requirements; develop and test products and services.

We do not disclose your information to anyone outside the Group except: where we have your permission; or where we are required or permitted to do so by law; or to credit reference and fraud prevention agencies and other companies that provide a service to us or you; or where we may transfer rights and obligations under this agreement.

We may transfer your information to other countries on the basis that anyone to whom we pass it provides an adequate level of protection.  However, such information may be accessed by law enforcement agencies and other authorities to prevent and detect crime and comply with legal obligations.

From time to time we may change the way we use your information.  Where we believe you may not  reasonably expect such a change we shall write to you.  If you do not object to the change within 60 days, you consent to that change.

If you would like a copy of the information we hold about you, please write to: The Data Protection Manager, Lombard Operations, 3 Princess Way, Redhill RH1 1NP.  A fee may be payable.

2 Credit reference agencies

2.1We may make periodic searches at credit reference agencies and will provide information to the Group to manage and take decisions about your accounts. This may include information about how you manage your account including your account balance, credit limit and any arrears.  We will also provide this information to credit reference agencies who may make this information available to other organisations so that they can take decisions about you, your associates and members of your household.  The information may also be used for tracing purposes.

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3 Fraud prevention agencies

3.1If false or inaccurate information is provided and fraud is identified or suspected, details may be passed to fraud prevention agencies.  Law enforcement agencies may access and use this information.

We and other organisations may also access and use this information to prevent fraud and money laundering, for example when checking applications for, and managing credit or other facilities and recovering debt; checking insurance proposals and claims; checking details of job applicants and employees.

We, and other organisations that may access and use information recorded by fraud prevention agencies, may do so from other countries.

We can provide the names and addresses of credit reference and fraud prevention agencies we use.  If you would like a copy of your information held by them, please telephone 0870 544 8888.  The agencies may charge a fee.

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Schedule 4 – Guarantee Confirmation

AFFIRMATION OF GUARANTOR

The undersigned has guaranteed obligations of Hertz (UK) Limited, a corporation organized under the laws of England (the “Obligor”) to Lombard North Central Plc (the “Bank”) pursuant to the terms of a certain Guarantee dated as of December 21, 2007 (the “Guarantee”).  The undersigned acknowledges that it has received copies of a certain Override Agreement dated as of [**] 2008 and a certain Letter of Understanding dated as of August 18, 1997 (the “Documents”) that would give effect to a certain committed vehicle leasing facility for the Obligor referenced in the Guarantee.  The undersigned agrees and acknowledges that by and subject to the terms and conditions of the Guarantee the undersigned continues to guarantee obligations of the Obligor to the Bank under the Guarantee including without limitation relating to the Documents, subject to the limitations, as applicable, in the Guarantee.  The undersigned hereby confirms that the Guarantee remains in full force and effect, enforceable against the undersigned in accordance with its terms and as set forth herein.

Dated as of                 , 2008.

HERTZ INTERNATIONAL, LTD.

By

Its

And By

Its

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EXECUTION PAGES

Signed by Jim McGill and Christopher Shooter		)
duly authorised for and on behalf of		)	/s/ JIM MCGILL
HERTZ UK LIMITED		)
		)
		)
		)	/s/ CHRISTOPHER SHOOTER
Address:	11 Vine Street
	Uxbridge
	Middlesex
Fax:	+44 (0) 1895 553939
Attention:	Jim McGill

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Signed by Gary Leitch		)
duly authorised for and on behalf of		)	/s/   GARY LEITCH
LOMBARD NORTH CENTRAL PLC		)
Address:	Lombard Corporate Finance
	Lombard North Central plc
	280 Bishopsgate
	London EC2M 4RB
Fax:	+ 44(0) 20 7672 4006
Attention:	Richard Perry

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EX-4.2

Exhibit 4.2

CONFORMED COPY

GUARANTEE

Effective Date:    December 21, 2007

To induce Lombard North Central plc (the Counterparty) (a) to provide a committed vehicle leasing facility to Hertz (UK) Limited, a corporation organized under the laws of England and having its registered office at Hertz House, 11 Vine Street, Uxbridge, Middlesex UK (the Obligor), as described in the Terms of Offer between the Counterparty and the Obligor dated December 20, 2007 (subject to such changes as may be agreed between the Counterparty and the Obligor) and (b) to purchase the Obligor’s current vehicle rental fleet and to lease back said rental fleet to the Obligor on terms consistent with the Terms of Offer (the Initial Transaction) (said Terms of Offer, any definitive agreement pertaining to the Initial Transaction, and any definitive facilities agreement entered into pursuant to the Terms of Offer are hereinafter referred to as an Agreement and collectively as the Agreements), Hertz International, Ltd. (the Guarantor), having its principal office at 225 Brae Boulevard, Park Ridge, New Jersey, USA hereby unconditionally and irrevocably guarantees to the Counterparty as primary obligor and not merely as surety the due and punctual payment of all sums owed by the Obligor to the Counterparty pursuant to the Agreements (and any rental agreements entered into under any of the Agreements) when due and payable, whether on demand, at stated maturity, by acceleration or otherwise, and whether for principal, interest, fees, expenses, indemnification or other amounts due at the time payment is demanded from the Guarantor (collectively, the Obligations).  The term Obligations includes any and all obligations of the Obligor, now or hereafter made, incurred or created, whether absolute or contingent, liquidated or unliquidated, whether due or not due, and however arising under or in connection with the Agreements, this Guarantee and any other documents executed in furtherance of the transactions contemplated by the Agreements.  The Guarantor agrees that, as between the Guarantor and the Counterparty, the Obligations may be declared to be due and payable for the purposes of this Guarantee notwithstanding any stay (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of Title 11 of the United States Code, the Bankruptcy Law), injunction or other prohibition which may prevent, delay or vitiate any declaration as regards the Obligor and that in the event of such declaration or attempted declaration, the Obligations shall immediately become due and payable by the Guarantor for the purposes of this Guarantee.  This Guarantee is a guarantee of payment and not of collection.

The Guarantor guarantees that the Obligations shall be paid strictly in accordance with the terms of the Agreements.  The liability of the Guarantor hereunder is absolute and unconditional irrespective of (i) any lack of capacity of the Obligor, (ii) any lack of validity, regularity or enforceability of any provision of the Agreements, (iii) the absence of any action to enforce the same, (iv) any variation, extension, waiver, compromise or release of any or all of the obligations of the Obligor under the Agreements or of any security from time to time therefor or of the obligations of any other guarantor or surety, (v) the recovery of any judgment against the Obligor, or (vi) any defense, setoff or counterclaim with respect to the Agreement, this Guarantee and the transactions contemplated hereby or any other circumstance which might constitute a defense available to, or discharge of, the Obligor or a guarantor.

The Guarantor hereby represents and warrants that: (a) this Guarantee is a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency and other similar laws affecting creditors’ rights generally; (b) the execution delivery and performance by the Guarantor of this Guarantee have been authorised by all necessary corporate action and do not and will not contravene the Guarantor’s organisational documents or any applicable law or any contractual provision binding on or affecting it and (c) there are no actions, suits or proceedings pending or, to the knowledge of the Guarantor, threatened, against or affecting the Guarantor before any court,

1

governmental agency or arbitrator, which are reasonably likely to be adversely determined and which if adversely determined may, in any one case or in the aggregate, materially adversely affect the financial condition, operations, properties or business of the Guarantor or of the ability of the Guarantor to perform its obligations under the Guarantee.

The Guarantor hereby waives notice of acceptance of this Guarantee; diligence; presentment; protect; notice of protect with respect to any Obligation, acceleration, and dishonour; filing of claims with a court in the event of merger, insolvency or bankruptcy of the Obligor; all demands whatsoever including demand of payment, except as noted herein; and any right to require a proceeding first against the Obligor, any exchange, sale or surrender of, or realisation on, any other guarantee or any collateral.

The Guarantor and the Counterparty hereby confirm that it is the intention of all such parties that the guarantee by the Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law.  To effectuate the foregoing intention, the Counterparty and the Guarantor hereby irrevocably agree that the obligations of the Guarantor hereunder shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of Guarantor, result in the obligations of the Guarantor hereunder not constituting such fraudulent transfer or conveyance.

Notwithstanding any payments which may be made hereunder by the Guarantor, the Guarantor shall not be subrogated to the rights of the Counterparty with respect to the Obligations, and shall not seek reimbursement of such payments from the Obligor, until all the Obligations have been fully paid.

This Guarantee is a continuing guarantee of all Obligations now or hereafter existing and shall remain in full force and effect until all Obligations have been fully and effectively paid and discharged in full.  Notices to the Counterparty may be delivered by first class mail, postage prepaid or by overnight delivery service, to the Counterparty at the following address:

Lombard North Central plc

280 Bishopsgate

London EC2M 4RB

Attention:  Richard Perry

This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the Counterparty on the insolvency, bankruptcy or reorganisation of the Obligor or otherwise, all as though the payment had not been made.

The Guarantor shall reimburse the Counterparty on demand for all reasonable costs, expenses and charges (including without limitation reasonable fees and charges of legal counsel for the Counterparty) incurred by the Counterparty in connection with the enforcement of this Guarantee provided, that the Guarantor shall not be liable for any such expenses of the Counterparty if no payment under this Guarantee is due.  The obligations of the Guarantor under this provision shall survive the termination of this Guarantee.

If any sum due from the Guarantor under this Guarantee (a Sum), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the First Currency) in which that Sum is payable into another currency (the Second Currency) for the purpose of:

(a)           making or filing a claim or proof against the Guarantor; or

(b)obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

the Guarantor shall, as an independent obligation, within three Business Days of demand, indemnify the Counterparty against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (i) the rate of exchange used to convert that Sum from the First

2

Currency into the Second Currency and (ii) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

The Guarantor waives any right it may have in any jurisdiction to pay any amount under this Guarantee in a currency or currency unit other than that in which it is expressed to be payable.

This Guarantee shall be governed by the laws or the State of New York without regard to conflict of laws principles.  The Guarantor consents to the non-exclusive jurisdiction and venue of the state or federal courts located in the City of New York in connection with this Guarantee.  THE GUARANTOR WAIVES ANY RIGHT THE GUARANTOR MAY HAVE TO JURY TRIAL IN CONNECTION WITH THIS GUARANTEE.  Nothing herein shall be deemed in any way to limit the ability of the counterparty to serve any legal process in any other manner permitted by law or to obtain jurisdiction over the Guarantor or to bring actions, suits or proceedings against it in any other jurisdiction.

Hertz International, Ltd	225 Brae Boulevard, Park Ridge
	New Jersey
	USA

By:	/s/ JIM MCGILL
Name:	JIM MCGILL
Title:	Authorised Signatory
By:	/s/ NUNS MOODLIAR
Name:	NUNS MOODLIAR
Title:	Authorised Signatory

3

EX-4.3

Exhibit 4.3

AFFIRMATION OF GUARANTOR

The undersigned has guaranteed obligations of Hertz (UK) Limited, a corporation organized under the laws of England (the “Obligor”) to Lombard North Central Plc (the “Bank”) pursuant to the terms of a certain Guarantee dated as of December 21, 2007 (the “Guarantee”).  The undersigned acknowledges that it has received copies of a certain Override Agreement dated as of March  2008 and a certain Letter of Understanding dated as of August 18, 1997 (the “Documents”) that would give effect to a certain committed vehicle leasing facility for the Obligor referenced in the Guarantee.  The undersigned agrees and acknowledges that by and subject to the terms and conditions of the Guarantee the undersigned continues to guarantee obligations of the Obligor to the Bank under the Guarantee including without limitation relating to the Documents, subject to the limitations, as applicable, in the Guarantee.  The undersigned hereby confirms that the Guarantee remains in full force and effect, enforceable against the undersigned in accordance with its terms and as set forth herein.

Dated as of 25 March, 2008.

HERTZ INTERNATIONAL, LTD.
By	/s/ JIM MCGILL
And By		/s/ NUNS MOODLIAR

1

EX-15

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EXHIBIT 15

May 9, 2008

Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549

Commissioners:

We are aware that our report dated May 9, 2008, on our review of interim financial information of Hertz Global Holdings, Inc. and its subsidiaries (the "Company") for the three-month periods ended March 31, 2008 and March 31, 2007 and included in the Company's quarterly report on Form 10-Q for the three months ended March 31, 2008 is incorporated by reference in its Registration Statement on Form S-8 (File No. 333-138812).

Very truly yours,

/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey

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EXHIBIT 15

EX-31.1

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EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a)/15d-14(a)

I, Mark P. Frissora, certify that:

1.

I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2008 of Hertz Global Holdings, Inc.;



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financing reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:



a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;



c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and



5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):



a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2008

By:
/s/  MARK P. FRISSORA Mark P. Frissora
Chief Executive Officer

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EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a)/15d-14(a)

EX-31.2

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EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a)/15d-14(a)

I, Elyse Douglas, certify that:

1.

I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2008 of Hertz Global Holdings, Inc.;



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financing reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:



a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;



c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and



5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):



a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 9, 2008

By:
/s/  ELYSE DOUGLAS Elyse Douglas
Chief Financial Officer

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EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a)/15d-14(a)

EX-32.1

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EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the quarterly report of Hertz Global Holdings, Inc. (the "Company") on Form 10-Q for the period ending March 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark P. Frissora, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)

the Report, to which this statement is furnished as an Exhibit, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2008

By:
/s/  MARK P. FRISSORA Mark P. Frissora
Chief Executive Officer

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EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350

EX-32.2

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EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the quarterly report of Hertz Global Holdings, Inc. (the "Company") on Form 10-Q for the period ending March 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Elyse Douglas, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)

the Report, to which this statement is furnished as an Exhibit, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2008

By:
/s/  ELYSE DOUGLAS Elyse Douglas
Chief Financial Officer

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EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350