SEC Company Response from HERC HOLDINGS INC (HRI) (CIK 0001364479) (HRI) — Aug 27, 2013
HERC HOLDINGS INC (HRI) (CIK 0001364479)
Date: Aug. 27, 2013 · CIK: 0001364479 · Accession: 0001104659-13-066387
AI Filing Summary & Sentiment
File numbers found in text: 001-33139, 333-189620
Letter
Form 10-K for Fiscal Year Ended December 31, 2012 Form 8-K Furnished February 25, 2013 File No. 001-33139
Re:
Dear Mr. Dobbie:
This letter sets forth the responses of Hertz Global Holdings, Inc. (“Hertz Holdings”) and The Hertz Corporation (“Hertz” and, together with Hertz Holdings, the “Companies”) to the comments contained in your letter, dated July 26, 2013, relating to (i) Hertz’s Registration Statement on Form S-4 (as amended or supplemented, the “Registration Statement”) originally filed with the Securities and Exchange Commission (the “Commission”) on June 26, 2013, (ii) Hertz Holdings’ Form 10-K for the fiscal year ended December 31, 2012 filed with the Commission on March 4, 2013 and (iii) Hertz Holdings’ Form 8-K furnished to the Commission on February 25, 2013. The comments of the Staff of the Commission (the “Staff”) are set forth in bold/italicized text below, and the Companies’ responses are set forth in plain text immediately beneath each such comment.
CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-002
Mr. Justin Dobbie
August 27, 2013
Page 2
Hertz and the applicable co-registrants have also today transmitted for filing under the Securities Act of 1933, as amended, pre-effective Amendment No. 1 to the Registration Statement (the “Amendment”), which amends certain information contained in Part II of the Registration Statement. Where, through the Amendment, Hertz has revised the Registration Statement in response to the Staff’s comments, we have noted the applicable page number in our response.
Because of the commercially sensitive nature of certain information contained herein, certain of the information contained in our response to the Staff’s comment number 6 and Exhibit A to this letter is being confidentially submitted pursuant to Rule 83 of the Commission’s Rules on Information and Requests, 17 C.F.R. § 200.83. Our response is being provided to the Staff in its entirety, with the portions for which we are requesting confidential treatment underlined and italicized. The Companies have submitted a separate letter to the Staff in connection with the confidential treatment request, a copy of which has been provided to the Office of Freedom of Information and Privacy Act Operations. Please note that the version of this letter filed via EDGAR omits confidential information included in the unredacted version delivered to the Staff in hard copy, and the redactions have been noted in the EDGAR version by bracketed asterisks (“[*]”).
Registration Statement on Form S-4
General
1. Please confirm supplementally that the offer will remain open for at least 20 full business days to ensure compliance with Rule 14e-1(a). Further, please confirm that the expiration date will be included in the final prospectus disseminated to security holders and filed pursuant to the applicable provisions of Rule 424.
Response: Hertz confirms to the Staff that the exchange offer will remain open for at least 20 full business days to ensure compliance with Rule 14e-1(a) and that the expiration date will be included in the final prospectus disseminated to security holders and filed pursuant to the applicable provisions of Rule 424. The exchange offer is intended to expire at 12:00 midnight, New York City time, at the end of the 20th business day from the date of commencement.
2. It appears that you are required to submit and post on your website an Interactive Data File for the financial statements contained in this filing in accordance with Item 601(b)(101)(i) of Regulation S-K. Please revise accordingly.
Response: Hertz acknowledges the Staff’s comment, and has included the requested Interactive Data File exhibit with the Amendment and posted such Interactive Data File on its website. See page II-34 of the Registration Statement.
CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-003
Mr. Justin Dobbie
August 27, 2013
Page 3
Exhibit 5.5
3. Please delete the last sentence in the penultimate paragraph on page 3 of the opinion or explain how it is not an inappropriate limitation on reliance.
Response: Hertz acknowledges the Staff’s comment, and has filed an amended opinion of Arkansas counsel as Exhibit 5.5 to the Amendment, dated as of August 26, 2013 and with the referenced sentence deleted. Hertz has also filed an amended opinion of Jenner & Block LLP as Exhibit 5.1 to the Amendment, dated as of the date of the Amendment and referencing the revised opinion of Arkansas counsel and the other previously filed opinions of other local counsel.
Form 10-K for Fiscal Year Ended December 31, 2012
Consolidated Statements of Cash Flow, page 77
4. Please separately present cash flows from proceeds and payments under revolving lines of credit instead of net cash flows. Refer to the guidance in ASC 230-10-45-14 and 15.
Response: Hertz Holdings acknowledges the Staff’s comment and (i) has included the separate presentation of cash flows from proceeds and payments under revolving lines of credit in the consolidated statements of cash flows for the six months ended June 30, 2013 and 2012 included in Hertz Holdings’ Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013 and (ii) will include such separate presentation in consolidated statements of cash flows included in its future filings (including any subsequent amendment to Part I of the Registration Statement).
Notes to Consolidated Financial Statements, page 79
Note 2: Summary of Significant Accounting Policies, page 79
5. Please tell us and revise to disclose your accounting policy regarding Gold Plus Rewards points, which may be redeemed for free rental days. We note on page 8 that Gold members accounted for approximately 37% of your worldwide rental transactions.
Response: Hertz Gold Plus Rewards is a program where customers may enroll to receive points for every qualifying U.S. dollar spent on Hertz rentals. These points may be redeemed by customers for free or discounted prices on future rentals. Hertz Gold Plus Rewards is considered to be a customer loyalty program.
We recognize the estimated incremental costs of fulfilling the points as they are awarded as an expense on Hertz Holdings’ consolidated statements of operations, and record the
CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-004
Mr. Justin Dobbie
August 27, 2013
Page 4
corresponding obligation under “other accrued liabilities” on Hertz Holdings’ consolidated balance sheet. We have concluded that the obligations under the Gold Plus Rewards program are insignificant in relation to the value of the transactions necessary to earn the awarded points. In reaching such conclusion as to the relatively inconsequential nature of the obligations under the Gold Plus Rewards program, we considered (i) the factors set forth in Staff Accounting Bulletin (SAB) Topic 13(A)(3)(c), “Inconsequential or perfunctory performance obligations” (for example, that such obligations are not essential to the functionality of the delivered products or services) and (ii) the fact that the awarded points have no cash value and are redeemable only for free or discounted prices on future rentals. The estimated expense recognized during Hertz Holdings’ latest fiscal year ended December 31, 2012 with respect to the Gold Plus Rewards program was approximately $18.4 million and the estimated liability with respect to the Gold Plus Rewards program as of December 31, 2012 was approximately $8.0 million, each of which is relatively inconsequential when compared to revenues attributable to transactions with our Gold Plus Rewards members. Hertz Holdings has historically not disclosed and proposes not to disclose its accounting policy for the Gold Plus Rewards program because it does not consider this accounting policy to be significant or material.
Note 11: Segment Information, page 117
6. We note your acquisitions of Dollar Thrifty and Donlen. Please tell us, and revise to disclose, the specific factors used to identify your reportable segments, including the basis of organization (for example, whether management has chosen to organize the company around differences in products and services, geographic areas, or a combination of factors and whether operating segments have been aggregated). Please refer to ASC 280-10-50-21. As part of your response, please also tell us how you identified your operating segments based on the criteria provided in ASC 280-10-50-1 through 50-9 and provide us with a list of these operating segments. For your operating segments, please tell us how you considered the aggregation criteria in ASC 280-10-50-11 and the quantitative thresholds in ASC 280-10-50-12 in determining your reportable segments. Please be detailed in your response.
Response:
Overview
ASC 280-10-50-5 identifies the chief operating decision maker (the “CODM”) as a function that allocates resources to and assesses the performance of the segments of a public entity. Our CODM is our Chief Executive Officer (the “CEO”), Mark P. Frissora, who has oversight responsibilities for each of our operating segments. Mr. Frissora reports directly to the Board of Directors for the financial performance and strategic planning of Hertz Holdings. Mr. Frissora is responsible for both determining how resources are allocated among the segments and the performance of each segment.
CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-005
Mr. Justin Dobbie
August 27, 2013
Page 5
ASC 280-10-50-7 states that an operating segment generally has a segment manager, which is a function and not necessarily a manager with a specific title, that is directly accountable to and maintains regular contact with the CODM to discuss operating activities, financial results, forecasts or plans for the segment. Hertz Holdings has executive officers, each of whom are directly accountable to our CEO, responsible for presenting to our CEO the operating activities, financial results, forecasts and plans for the segments (or portions thereof) for which he or she is responsible, as follows:
· Scott Sider, Group President, Rent A Car Americas, oversees our car rental operations in the United States (including the operations of Dollar Thrifty Automotive Group, Inc. (“Dollar Thrifty”) and its subsidiaries, which we recently acquired in November 2012), Canada, Latin America and the Caribbean.
· Michel Taride, Executive Vice President and President, Hertz International, oversees our international car rental operations in Europe, the Middle East, Africa and the Asia-Pacific region.
· Tom Callahan, President, Donlen Corporation, oversees the fleet leasing and management services operations of Donlen Corporation, which Hertz Holdings acquired in 2011.
· Lois Boyd, Group President, Hertz Equipment Rental Corporation, oversees our worldwide equipment rental operations.
As further discussed below, we have considered our operating segments based on the guidance in ASC 280-10-50-1 through ASC 280-10-50-9, and have concluded that we have a total of five operating segments for purposes of determining our reportable segments. Accordingly, we have reviewed the guidance in ASC 280-10-50-11 related to the aggregation of our operating segments and in ASC 280-10-50-12 related to quantitative thresholds for separately reporting operating segments to determine our reportable segments. Based on the foregoing, we have determined that we have two reportable segments — Worldwide Car Rental and Worldwide Equipment Rental.
The four operating segments, as aggregated and included in our Worldwide Car Rental reportable segment, are:
· United States;
· Europe;
· Other International; and
CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-006
Mr. Justin Dobbie
August 27, 2013
Page 6
· Donlen.
With respect to our Other International car rental operating segment, Michel Taride and Scott Sider collectively serve as its segment manager, with Mr. Sider being responsible for the international rental car operations in the Americas and Mr. Taride being responsible for the international rental car operations elsewhere.
We acquired Donlen Corporation in September 2011 and Dollar Thrifty in November 2012. The operations of Donlen Corporation are a part of our car rental business in the United States and constitute our Donlen operating segment, which is aggregated with our other car rental operating segments as discussed in greater detail below. The operations of Dollar Thrifty are in the process of being integrated into our pre-acquisition United States car rental operations and systems and are included within our United States operating segment.
Our Worldwide Equipment Rental operating segment constitutes a reportable segment based on the quantitative thresholds identified in ASC 280-10-50-12.
Operating Segments
To determine our operating segments, we reviewed the definition of an operating segment in ASC 280-10-50-1, which states:
“An operating segment is a component of a public entity that has all of the following characteristics:
a. It engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same public entity).
b. Its operating results are regularly reviewed by the public entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance.
c. Its discrete financial information is available.”
Using the three-part test in this definition, we determined that our operating segments are (1) United States, (2) Europe, (3) Other International, (4) Donlen and (5) Worldwide Equipment Rental, primarily because our CEO regularly reviews each of these segments’ financial information for purposes of evaluating their respective performance and allocating resources among the segments based on such performance.
Mr. Frissora regularly reviews various financial and statistical information in assessing segment performance and deciding how to allocate resources among our operating segments.
CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-007
Mr. Justin Dobbie
August 27, 2013
Page 7
Our CEO receives weekly Flash Reports and monthly Operating Reviews. These reports detail car rental financial and statistical information at the United States, Europe, Other International and Donlen levels. Our CEO assesses performance and decides how to allocate resources as it relates to our car rental business at the United States, Europe, Other International and Donlen levels presented in these reports. Thus, the organization of our car rental business into these four operating segments comports with the “management approach” to segment reporting called for under ASC 280-10-05-3
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CORRESP 1 filename1.htm CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-001 CERTAIN PORTIONS OF THIS LETTER HAVE BEEN OMITTED FROM THE VERSION FILED VIA EDGAR. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED PURSUANT TO RULE 83 OF THE COMMISSION’S RULES ON INFORMATION AND REQUESTS WITH RESPECT TO THE OMITTED PORTIONS. August 27, 2013 VIA HAND DELIVERY AND EDGAR SUBMISSION Justin Dobbie Legal Branch Chief Securities and Exchange Commission Division of Corporation Finance 100 F Street, N.E. Washington, DC 20549-3561 Re: The Hertz Corporation Registration Statement on Form S-4 Filed June 26, 2013 File No. 333-189620 Hertz Global Holdings, lnc. Form 10-K for Fiscal Year Ended December 31, 2012 Form 8-K Furnished February 25, 2013 File No. 001-33139 Dear Mr. Dobbie: This letter sets forth the responses of Hertz Global Holdings, Inc. (“Hertz Holdings”) and The Hertz Corporation (“Hertz” and, together with Hertz Holdings, the “Companies”) to the comments contained in your letter, dated July 26, 2013, relating to (i) Hertz’s Registration Statement on Form S-4 (as amended or supplemented, the “Registration Statement”) originally filed with the Securities and Exchange Commission (the “Commission”) on June 26, 2013, (ii) Hertz Holdings’ Form 10-K for the fiscal year ended December 31, 2012 filed with the Commission on March 4, 2013 and (iii) Hertz Holdings’ Form 8-K furnished to the Commission on February 25, 2013. The comments of the Staff of the Commission (the “Staff”) are set forth in bold/italicized text below, and the Companies’ responses are set forth in plain text immediately beneath each such comment. CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-002 Mr. Justin Dobbie August 27, 2013 Page 2 Hertz and the applicable co-registrants have also today transmitted for filing under the Securities Act of 1933, as amended, pre-effective Amendment No. 1 to the Registration Statement (the “Amendment”), which amends certain information contained in Part II of the Registration Statement. Where, through the Amendment, Hertz has revised the Registration Statement in response to the Staff’s comments, we have noted the applicable page number in our response. Because of the commercially sensitive nature of certain information contained herein, certain of the information contained in our response to the Staff’s comment number 6 and Exhibit A to this letter is being confidentially submitted pursuant to Rule 83 of the Commission’s Rules on Information and Requests, 17 C.F.R. § 200.83. Our response is being provided to the Staff in its entirety, with the portions for which we are requesting confidential treatment underlined and italicized. The Companies have submitted a separate letter to the Staff in connection with the confidential treatment request, a copy of which has been provided to the Office of Freedom of Information and Privacy Act Operations. Please note that the version of this letter filed via EDGAR omits confidential information included in the unredacted version delivered to the Staff in hard copy, and the redactions have been noted in the EDGAR version by bracketed asterisks (“[*]”). Registration Statement on Form S-4 General 1. Please confirm supplementally that the offer will remain open for at least 20 full business days to ensure compliance with Rule 14e-1(a). Further, please confirm that the expiration date will be included in the final prospectus disseminated to security holders and filed pursuant to the applicable provisions of Rule 424. Response: Hertz confirms to the Staff that the exchange offer will remain open for at least 20 full business days to ensure compliance with Rule 14e-1(a) and that the expiration date will be included in the final prospectus disseminated to security holders and filed pursuant to the applicable provisions of Rule 424. The exchange offer is intended to expire at 12:00 midnight, New York City time, at the end of the 20th business day from the date of commencement. 2. It appears that you are required to submit and post on your website an Interactive Data File for the financial statements contained in this filing in accordance with Item 601(b)(101)(i) of Regulation S-K. Please revise accordingly. Response: Hertz acknowledges the Staff’s comment, and has included the requested Interactive Data File exhibit with the Amendment and posted such Interactive Data File on its website. See page II-34 of the Registration Statement. CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-003 Mr. Justin Dobbie August 27, 2013 Page 3 Exhibit 5.5 3. Please delete the last sentence in the penultimate paragraph on page 3 of the opinion or explain how it is not an inappropriate limitation on reliance. Response: Hertz acknowledges the Staff’s comment, and has filed an amended opinion of Arkansas counsel as Exhibit 5.5 to the Amendment, dated as of August 26, 2013 and with the referenced sentence deleted. Hertz has also filed an amended opinion of Jenner & Block LLP as Exhibit 5.1 to the Amendment, dated as of the date of the Amendment and referencing the revised opinion of Arkansas counsel and the other previously filed opinions of other local counsel. Form 10-K for Fiscal Year Ended December 31, 2012 Consolidated Statements of Cash Flow, page 77 4. Please separately present cash flows from proceeds and payments under revolving lines of credit instead of net cash flows. Refer to the guidance in ASC 230-10-45-14 and 15. Response: Hertz Holdings acknowledges the Staff’s comment and (i) has included the separate presentation of cash flows from proceeds and payments under revolving lines of credit in the consolidated statements of cash flows for the six months ended June 30, 2013 and 2012 included in Hertz Holdings’ Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013 and (ii) will include such separate presentation in consolidated statements of cash flows included in its future filings (including any subsequent amendment to Part I of the Registration Statement). Notes to Consolidated Financial Statements, page 79 Note 2: Summary of Significant Accounting Policies, page 79 5. Please tell us and revise to disclose your accounting policy regarding Gold Plus Rewards points, which may be redeemed for free rental days. We note on page 8 that Gold members accounted for approximately 37% of your worldwide rental transactions. Response: Hertz Gold Plus Rewards is a program where customers may enroll to receive points for every qualifying U.S. dollar spent on Hertz rentals. These points may be redeemed by customers for free or discounted prices on future rentals. Hertz Gold Plus Rewards is considered to be a customer loyalty program. We recognize the estimated incremental costs of fulfilling the points as they are awarded as an expense on Hertz Holdings’ consolidated statements of operations, and record the CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-004 Mr. Justin Dobbie August 27, 2013 Page 4 corresponding obligation under “other accrued liabilities” on Hertz Holdings’ consolidated balance sheet. We have concluded that the obligations under the Gold Plus Rewards program are insignificant in relation to the value of the transactions necessary to earn the awarded points. In reaching such conclusion as to the relatively inconsequential nature of the obligations under the Gold Plus Rewards program, we considered (i) the factors set forth in Staff Accounting Bulletin (SAB) Topic 13(A)(3)(c), “Inconsequential or perfunctory performance obligations” (for example, that such obligations are not essential to the functionality of the delivered products or services) and (ii) the fact that the awarded points have no cash value and are redeemable only for free or discounted prices on future rentals. The estimated expense recognized during Hertz Holdings’ latest fiscal year ended December 31, 2012 with respect to the Gold Plus Rewards program was approximately $18.4 million and the estimated liability with respect to the Gold Plus Rewards program as of December 31, 2012 was approximately $8.0 million, each of which is relatively inconsequential when compared to revenues attributable to transactions with our Gold Plus Rewards members. Hertz Holdings has historically not disclosed and proposes not to disclose its accounting policy for the Gold Plus Rewards program because it does not consider this accounting policy to be significant or material. Note 11: Segment Information, page 117 6. We note your acquisitions of Dollar Thrifty and Donlen. Please tell us, and revise to disclose, the specific factors used to identify your reportable segments, including the basis of organization (for example, whether management has chosen to organize the company around differences in products and services, geographic areas, or a combination of factors and whether operating segments have been aggregated). Please refer to ASC 280-10-50-21. As part of your response, please also tell us how you identified your operating segments based on the criteria provided in ASC 280-10-50-1 through 50-9 and provide us with a list of these operating segments. For your operating segments, please tell us how you considered the aggregation criteria in ASC 280-10-50-11 and the quantitative thresholds in ASC 280-10-50-12 in determining your reportable segments. Please be detailed in your response. Response: Overview ASC 280-10-50-5 identifies the chief operating decision maker (the “CODM”) as a function that allocates resources to and assesses the performance of the segments of a public entity. Our CODM is our Chief Executive Officer (the “CEO”), Mark P. Frissora, who has oversight responsibilities for each of our operating segments. Mr. Frissora reports directly to the Board of Directors for the financial performance and strategic planning of Hertz Holdings. Mr. Frissora is responsible for both determining how resources are allocated among the segments and the performance of each segment. CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-005 Mr. Justin Dobbie August 27, 2013 Page 5 ASC 280-10-50-7 states that an operating segment generally has a segment manager, which is a function and not necessarily a manager with a specific title, that is directly accountable to and maintains regular contact with the CODM to discuss operating activities, financial results, forecasts or plans for the segment. Hertz Holdings has executive officers, each of whom are directly accountable to our CEO, responsible for presenting to our CEO the operating activities, financial results, forecasts and plans for the segments (or portions thereof) for which he or she is responsible, as follows: · Scott Sider, Group President, Rent A Car Americas, oversees our car rental operations in the United States (including the operations of Dollar Thrifty Automotive Group, Inc. (“Dollar Thrifty”) and its subsidiaries, which we recently acquired in November 2012), Canada, Latin America and the Caribbean. · Michel Taride, Executive Vice President and President, Hertz International, oversees our international car rental operations in Europe, the Middle East, Africa and the Asia-Pacific region. · Tom Callahan, President, Donlen Corporation, oversees the fleet leasing and management services operations of Donlen Corporation, which Hertz Holdings acquired in 2011. · Lois Boyd, Group President, Hertz Equipment Rental Corporation, oversees our worldwide equipment rental operations. As further discussed below, we have considered our operating segments based on the guidance in ASC 280-10-50-1 through ASC 280-10-50-9, and have concluded that we have a total of five operating segments for purposes of determining our reportable segments. Accordingly, we have reviewed the guidance in ASC 280-10-50-11 related to the aggregation of our operating segments and in ASC 280-10-50-12 related to quantitative thresholds for separately reporting operating segments to determine our reportable segments. Based on the foregoing, we have determined that we have two reportable segments — Worldwide Car Rental and Worldwide Equipment Rental. The four operating segments, as aggregated and included in our Worldwide Car Rental reportable segment, are: · United States; · Europe; · Other International; and CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-006 Mr. Justin Dobbie August 27, 2013 Page 6 · Donlen. With respect to our Other International car rental operating segment, Michel Taride and Scott Sider collectively serve as its segment manager, with Mr. Sider being responsible for the international rental car operations in the Americas and Mr. Taride being responsible for the international rental car operations elsewhere. We acquired Donlen Corporation in September 2011 and Dollar Thrifty in November 2012. The operations of Donlen Corporation are a part of our car rental business in the United States and constitute our Donlen operating segment, which is aggregated with our other car rental operating segments as discussed in greater detail below. The operations of Dollar Thrifty are in the process of being integrated into our pre-acquisition United States car rental operations and systems and are included within our United States operating segment. Our Worldwide Equipment Rental operating segment constitutes a reportable segment based on the quantitative thresholds identified in ASC 280-10-50-12. Operating Segments To determine our operating segments, we reviewed the definition of an operating segment in ASC 280-10-50-1, which states: “An operating segment is a component of a public entity that has all of the following characteristics: a. It engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same public entity). b. Its operating results are regularly reviewed by the public entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. c. Its discrete financial information is available.” Using the three-part test in this definition, we determined that our operating segments are (1) United States, (2) Europe, (3) Other International, (4) Donlen and (5) Worldwide Equipment Rental, primarily because our CEO regularly reviews each of these segments’ financial information for purposes of evaluating their respective performance and allocating resources among the segments based on such performance. Mr. Frissora regularly reviews various financial and statistical information in assessing segment performance and deciding how to allocate resources among our operating segments. CONFIDENTIAL TREATMENT REQUESTED BY HERTZ GLOBAL HOLDINGS, INC. AND THE HERTZ CORPORATION — HTZ-007 Mr. Justin Dobbie August 27, 2013 Page 7 Our CEO receives weekly Flash Reports and monthly Operating Reviews. These reports detail car rental financial and statistical information at the United States, Europe, Other International and Donlen levels. Our CEO assesses performance and decides how to allocate resources as it relates to our car rental business at the United States, Europe, Other International and Donlen levels presented in these reports. Thus, the organization of our car rental business into these four operating segments comports with the “management approach” to segment reporting called for under ASC 280-10-05-3