FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-7541
THE HERTZ CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-1938568
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
225 Brae Boulevard, Park Ridge, New Jersey 07656-0713
(Address of principal executive offices)
(Zip Code)
(201) 307-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report.)
The registrant meets the conditions set forth in General
Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing
this Form with the reduced disclosure format permitted by General
Instruction H(2) of Form 10-Q.
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 X No
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of June 30, 1994: Common
Stock, $1 par value - Class A, 200 shares; Class B, 51 shares;
and Class C, 490 shares.
Page 1 of 18 pages
The Exhibit Index is on page 17
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PART I - FINANCIAL INFORMATION
ITEM l. FINANCIAL STATEMENTS.
INTRODUCTORY STATEMENT
The summary of accounting policies set forth in Note 1 to the
consolidated financial statements contained in the Form 10-K for
the fiscal year ended December 31, 1993, filed by the registrant
with the Securities and Exchange Commission on March 8, 1994, has
been followed in preparing the accompanying condensed
consolidated financial statements, except, effective January 1,
1994, the registrant adopted the provisions of Financial
Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" (see Note 5 to the Notes to
Condensed Consolidated Financial Statements).
The condensed consolidated financial statements for interim
periods included herein have not been audited by independent
public accountants. In the registrant's opinion, all adjustments
(which include only normal recurring adjustments) necessary for a
fair presentation 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.
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THE HERTZ CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In Thousands of Dollars)
A S S E T S
Unaudited
June 30, Dec. 31,
1994 1993
CASH AND EQUIVALENTS $ 113,263 $ 88,557
RECEIVABLES, less allowance for
doubtful accounts: 1994, $7,635;
1993, $6,862 519,177 434,423
DUE FROM AFFILIATES 209,044 328,512
INVENTORIES, at lower of cost or market 31,493 33,643
PREPAID EXPENSES AND OTHER ASSETS (Note 5) 101,832 121,776
REVENUE EARNING VEHICLES AND OTHER
EQUIPMENT, at cost, less accumulated
depreciation: 1994, $488,881; 1993,
$418,692 4,769,735 2,702,552
PROPERTY AND EQUIPMENT, at cost,
less accumulated depreciation:
1994, $394,609; 1993, $358,781 417,411 384,598
FRANCHISES, CONCESSIONS, CONTRACT COSTS
AND LEASEHOLDS, net of amortization 6,999 7,192
COST IN EXCESS OF NET ASSETS OF PURCHASED
BUSINESSES, net of amortization 578,241 587,245
$6,747,195 $4,688,498
LIABILITIES AND SHAREHOLDERS' EQUITY
ACCOUNTS PAYABLE $ 525,937 $ 328,957
ACCRUED LIABILITIES 478,941 422,743
ACCRUED TAXES 80,392 70,849
DEBT (Note 3) 4,654,874 2,940,495
PUBLIC LIABILITY AND PROPERTY DAMAGE 291,306 264,158
DEFERRED TAXES ON INCOME 53,000 44,600
SHAREHOLDERS' EQUITY (Note 4):
Preferred stock -
Series A, 10% cumulative 236,000 340,000
Series B, various rates cumulative 249,900 99,900
Common stock 1 1
Additional capital paid-in 59,056 100,099
Reinvested earnings 130,740 105,445
Translation adjustment (12,699) (28,749)
Unrealized holding losses for
available-for-sale securities (Note 5) (253) -
Total shareholders' equity 662,745 616,696
$6,747,195 $4,688,498
The accompanying notes are an integral part of this statement.
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THE HERTZ CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In Thousands of Dollars)
Unaudited
Three Months
Ended June 30,
1994 1993
REVENUES $825,912 $739,504
EXPENSES:
Direct operating 439,634 428,480
Depreciation of revenue earning
equipment (Note 2) 172,800 131,798
Selling, general and administrative 94,682 89,938
Interest, net of interest income
of $2,831 and $596 (Notes 3 and 4) 72,429 62,362
779,545 712,578
INCOME BEFORE INCOME TAXES 46,367 26,926
PROVISION FOR TAXES ON INCOME
(Notes 1 and 4) 20,006 13,813
NET INCOME $ 26,361 $ 13,113
The accompanying notes are an integral part of this statement.
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THE HERTZ CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In Thousands of Dollars)
Unaudited
Six Months
Ended June 30,
1994 1993
REVENUES $1,520,715 $1,375,745
EXPENSES:
Direct operating 846,343 824,689
Depreciation of revenue earning
equipment (Note 2) 321,623 255,836
Selling, general and administrative 179,317 168,816
Interest, net of interest income
of $3,987 and $9,586 (Notes 3 and 4) 128,951 113,749
1,476,234 1,363,090
INCOME BEFORE INCOME TAXES 44,481 12,655
PROVISION FOR TAXES ON INCOME
(Notes 1 and 4) 19,186 6,415
NET INCOME $ 25,295 $ 6,240
The accompanying notes are an integral part of this statement.
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THE HERTZ CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands of Dollars)
Unaudited
Six Months
Ended June 30,
1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 25,295 $ 6,240
Non-cash expenses:
Depreciation of revenue earning
equipment 321,623 255,836
Depreciation of property and
equipment 31,856 32,764
Amortization of intangibles 9,660 9,697
Provision for public liability
and property damage 86,693 69,974
Provision for losses for doubtful
accounts 2,710 3,160
Deferred income taxes 8,400 (7,100)
Revenue earning equipment
expenditures (3,946,053) (3,156,478)
Proceeds from sales of revenue
earning equipment 1,608,502 1,473,111
Changes in assets and liabilities,
net of effects from purchases
of various operations -
Receivables (71,440) 106,702
Due from affiliates 119,468 (136,876)
Inventories and prepaid expenses
and other assets 29,789 36,221
Accounts payable 186,174 (7,327)
Accrued liabilities 47,875 25,638
Accrued taxes 7,446 152
Payments of public liability and
property damage claims and expenses (58,629) (48,691)
Net cash flows used for
operating activities (1,590,631) (1,336,977)
The accompanying notes are an integral part of this statement.
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<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands of Dollars)
Unaudited
Six Months
Ended June 30,
1994 1993
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures $ (78,527) $ (49,804)
Proceeds from sales of property and
equipment 19,995 20,392
Purchases of available-for-sale
securities (3,671) -
Proceeds from sale of available-for-
sale securities 514 -
Purchases of various operations, net
of cash acquired (see supplemental
disclosures below) - (3,474)
Net cash flows used for investing
activities (61,689) (32,886)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term
debt 429,496 161,130
Repayment of long-term debt (152,986) (349,378)
Short-term borrowings:
Proceeds 370,381 548,238
Repayments (165,247) (81,929)
Other, net 1,338,326 902,991
Payment for the redemption of
common and preferred stock and
related expenses (145,043) -
Net cash flows provided from
financing activities 1,674,927 1,181,052
EFFECT OF FOREIGN EXCHANGE RATE
CHANGES ON CASH 2,099 (2,756)
NET INCREASE (DECREASE) IN CASH
AND EQUIVALENTS DURING THE PERIOD 24,706 (191,567)
CASH AND EQUIVALENTS AT BEGINNING OF
YEAR 88,557 268,019
CASH AND EQUIVALENTS AT END OF PERIOD $ 113,263 $ 76,452
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid (received) during the
period for -
Interest (net of amount capitalized) $ 108,905 $ 122,088
Income taxes 11,045 (7,417)
In connection with acquisitions made during the six months
ended June 30, 1993, liabilities assumed were $2.1 million.
The accompanying notes are an integral part of this statement.
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THE HERTZ CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Taxes on Income
The income tax provision is based upon the expected effective
tax rate applicable to the full year. The effective tax rate is
higher than the U.S. statutory rate of 35% in 1994 and 34% in
1993 due to higher tax rates relating to foreign operations and
adjustment for state taxes net of federal benefit.
Note 2 - Depreciation of Revenue Earning Equipment
Depreciation of revenue earning equipment includes the
following (in thousands of dollars):
Unaudited
1994 1993
Three months Ended June 30
Depreciation of revenue earning equipment $152,195 $122,160
Less adjustment of depreciation upon
disposal of the equipment (12,415) (10,836)
Rents paid for vehicles leased 33,020 20,474
Total $172,800 $131,798
Six months Ended June 30
Depreciation of revenue earning equipment $275,829 $221,215
Less adjustment of depreciation upon
disposal of the equipment (19,475) (18,412)
Rents paid for vehicles leased 65,269 53,033
Total $321,623 $255,836
The adjustment of depreciation upon disposal of revenue earning
equipment for the three months ended June 30, 1994 and 1993
included net gains of $5.0 million and $4.3 million,
respectively, on the sale of equipment in the construction
equipment rental operations in the United States; net gains of
$7.4 million and $5.4 million, respectively, in the car rental
and car leasing operations primarily relating to foreign
operations; and in 1993, credits of $1.1 million resulting from
valuing pre-acquisition assets on a net of tax basis.
The adjustment of depreciation upon disposal of revenue earning
equipment for the six months ended June 30, 1994 and 1993
included net gains of $12.7 million and $9.4 million,
respectively, on the sale of equipment in the construction
equipment rental operations in the United States; net gains of
$6.8 million and $6.1 million, respectively, in the car rental
and car leasing operations primarily relating to foreign
operations; and in 1993, credits of $2.9 million resulting from
valuing pre-acquisition assets on a net of tax basis.
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THE HERTZ CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 - Debt
Debt at June 30, 1994 and December 31, 1993 consists of the
following (in thousands of dollars):
Unaudited
June 30, Dec. 31,
1994 1993
Notes payable, including commercial paper,
average interest rate: 1994, 4.5%;
1993, 3.4% $1,289,912 $ 237,197
Promissory notes, average interest rate:
1994, 7.5%; 1993, 8.3%; (effective
average interest rate: 1994, 7.7%; 1993,
8.6%); net of unamortized discount: 1994,
$3,795; 1993, $2,549; due 1994 to 2005 1,468,865 1,025,111
Swiss Franc bonds, fixed U.S. dollar
obligation 11.1% (effective interest
rate 9.7%); including unamortized
premium: 1994, $231; 1993, $330; due 1995 46,363 46,462
Property and equipment lease obligations,
average interest rate: 1994, 8.9%; 1993,
9.0%; due 1994 to 1998 8,045 9,907
Medium term notes, average interest rate
9.3% (effective average interest rate
9.4%); net of unamortized
discount: 1994, $87; 1993, $139; due
1994 to 1997 195,338 226,411
Senior and other subordinated promissory
notes, average interest rate: 1994, 9.5%;
1993, 7.4% (effective average interest
rate: 1994, 9.6%; 1993, 7.5%); net of
unamortized discount: 1994, $545; 1993,
$621; due 1994 to 1998 (Note 4) 250,807 400,731
Junior subordinated promissory notes,
average interest rate 6.9%; net of
unamortized discount: 1994, $351; 1993,
$372; due 2000 to 2003 399,649 399,628
Subsidiaries' short-term debt in millions
(1994, $845.1; 1993, $463.1) and other
borrowings; average interest rate in
domestic and foreign currencies: 1994,
6.0%; 1993, 7.1%; including unamortized
discount: 1994, $57; 1993, $65 995,895 595,048
Total $4,654,874 $2,940,495
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THE HERTZ CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 - Debt (continued)
The aggregate amounts of maturities of debt for the twelve
month periods following June 30, 1994 are as follows (in
millions): 1995, $2,512.7 (including $2,280.0 of commercial paper
and short-term borrowings); 1996, $193.8; 1997, $215.8; 1998,
$412.6; 1999, $118.7; after 1999, $1,201.3.
Interest expense for the three and six months ended June 30,
1994 and for the six months ended June 30, 1993 was reduced by
$1.6 million and $8.2 million, respectively, of interest income
relating to refunds of prior years state, local and federal
income taxes.
At June 30, 1994, approximately $64 million of the registrant's
consolidated shareholders' equity was free of dividend
limitations pursuant to its existing debt agreements.
On June 8, 1994, the registrant and Ford entered into a
revolving loan agreement under which the registrant may borrow
from Ford from time to time in amounts of up to $250 million
outstanding at any one time. Obligations of the registrant under
the agreement would rank pari passu with the registrant's Senior
Debt Securities. This agreement by its terms expires on June 30,
1999, on which date any amounts then outstanding thereunder are
required to be repaid. In addition, at June 30, 1994, the
registrant had $238.9 million of outstanding loans from Ford.
The registrant and its subsidiaries have entered into
arrangements to manage exposure to fluctuations in interest
rates. These arrangements include primarily interest-rate swap
agreements and forward rate agreements. The differential paid or
received on interest-rate swap agreements is recognized as an
adjustment to interest expense. The effect of these agreements
is to make the registrant less susceptible to changes in interest
rates by effectively converting certain variable rate debt to
fixed rate debt. Because interest rates for fixed rate debt are
generally higher than for variable rate debt, the effect at June
30, 1994 of the swap agreements is to give the registrant an
overall effective weighted-average rate on debt of 6.7%, with 35%
of debt effectively subject to variable interest rates, compared
to a weighted-average interest rate on debt of 6.6%, with 49% of
debt subject to variable interest rates when not considering the
swap agreements. These agreements expressed in notional amounts
aggregated $667 million at June 30, 1994. Notional amounts are
not reflective of the registrant's obligations under these
agreements because the registrant is only obligated to pay the
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<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 - Debt (continued)
net amount of interest rate differential between the fixed and
variable rates specified in the contracts. At June 30, 1994, the
fair value of all contracts (notional principal of $715 million,
which includes $48 million of notional principal scheduled to
start after June 30, 1994) which is representative of the
registrant's obligations under these contracts, assuming the
contracts were terminated at that date, was approximately a net
payable of $3.7 million.
Note 4 - Change in Ownership and Supplemental Disclosure of
Noncash Investing and Financing Activities
In March 1994, Ford Motor Company ("Ford") acquired the
registrant's Common Stock owned by Commerzbank Aktiengesell-
schaft. On April 29, 1994, the registrant redeemed its preferred
and common stock owned by AB Volvo for $145 million, borrowing
the funds from Ford to pay for the redemption, and Ford purchased
all of the common stock of the registrant owned by Park Ridge
Limited Partnership. This resulted in the registrant becoming a
wholly owned subsidiary of Ford. In addition, the $150 million
subordinated promissory note of the registrant held by Ford Motor
Credit Company, was exchanged for $150 million of Series B
Preferred Stock of the registrant. In connection with these
transactions, notes payable were increased by $145 million,
Series A Preferred Stock was reduced by $104 million, and
Additional Capital Paid-in was reduced by $41 million; interest
expense was increased by $8.6 million and provision for taxes was
decreased by $3.0 million; and subordinated promissory notes were
reduced by $150 million and Series B Preferred Stock was
increased by $150 million.
During the six months ended June 30, 1994, the registrant
purchased Ford vehicles at a cost of approximately $2.5 billion,
and sold Ford vehicles to Ford or its affiliates under various
repurchase programs for approximately $966 million.
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<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - Change in Ownership and Supplemental Disclosure of
Noncash Investing and Financing Activities (continued)
In 1992, the registrant entered into a lease agreement with a
third party lessor, Hertz Funding Corp. ("HFC"), providing for
the lease of vehicles purchased by HFC under a repurchase program
offered by Ford. As with similar lease transactions with vehicle
manufacturers in the past, the registrant acts as lessee and
servicer relating to the acquisition and return of leased
vehicles owned by HFC. Although the officers of HFC are
employees of the registrant, HFC is wholly owned by PAZ ABS
Corp., an entity unaffiliated with the registrant or any of its
subsidiaries, and the Board of Directors of HFC is controlled by
directors unaffiliated with the registrant or any of its
subsidiaries. Under the lease, which is accounted for as an
operating lease, the registrant makes payments equal to the
monthly depreciation and all expenses (including interest) of HFC
and is responsible for the remaining net cost on any vehicles
that become ineligible under the repurchase program. At June 30,
1994, the net cost of the vehicles leased under this agreement
was approximately $357 million.
Note 5 - Accounting Change
Effective January 1, 1994, the registrant adopted the
provisions of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities", which
requires a more detailed disclosure of debt and equity securities
held for investment, the methods to be used in determining fair
value, and when to record unrealized holding gains and losses in
earnings or in a separate component of shareholders' equity.
As of June 30, 1994, Prepaid Expenses and Other Assets include
available-for-sale securities at fair value of $5.9 million (cost
$6.1 million). The fair value is calculated using information
provided by outside quotation services. These securities include
various governmental and corporate debt obligations, with
maturity dates ranging from 1994 through 2014. For the six
months ended June 30, 1994, proceeds of $514,400 from the sale of
available-for-sale securities were received, and a gross realized
loss of $26,850 was included in earnings. Actual cost was used
in computing the realized loss on the sale. For the six months
ended June 30, 1994, unrealized holding losses and unrealized
holding gains, net of taxes, included in Shareholders' Equity
were $281,262 and $28,400, respectively.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Second Quarter 1994 vs. Second Quarter 1993
Revenues in the second quarter of 1994 of $826 million
increased by $86 million as compared to the second quarter of
1993. This increase was primarily attributable to increases in
the car rental operations resulting from a greater number of
transactions due to increased travel and an increase in market
share, and improvements in construction equipment rental and
sales in the United States due to increased volume resulting from
improvements in the economy in the United States. These
increases were partly offset by lower revenues in claim
administration and telecommunication services due to decreases in
volume, and from changes in foreign exchange rates.
Total expenses increased $67 million to $780 million in the
second quarter of 1994 as compared to $713 million in the second
quarter of 1993. Direct operating expense increased principally
due to the higher volume of business, but is lower in 1994 as a
percent of revenues due to more efficient fixed cost coverage.
Depreciation of revenue earning equipment increased primarily due
to an increase in vehicles and equipment operated and higher
prices for automobiles; these increases were partly offset by
higher net proceeds received on disposal of revenue earning
equipment in excess of book value primarily related to a decrease
in the number of "risk" vehicles in the car rental operations,
gains on the sale of equipment in the construction equipment
rental operations in the United States principally due to
improvements in the economy in the United States, partly offset
by credits recorded in 1993 resulting from valuing certain pre-
acquisition assets on a net of tax basis. Selling, general and
administrative expense increased primarily due to higher
advertising costs. The increase in interest expense was
primarily due to higher debt levels in 1994 and $8.6 million
included in 1994 relating to interest receivable from Park Ridge
Limited Partnership which will not be collected, partly offset by
higher interest income in 1994.
The tax provision of $20 million in the second quarter of
1994 was higher than the tax provision of $13.8 million in the
second quarter of 1993, primarily due to higher income before
income taxes in 1994 and changes in effective tax rates. See
Note 1 to the Notes to Condensed Consolidated Financial
Statements.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued).
First Half of 1994 vs. First Half of 1993
Revenues in the first half of 1994 of $1,521 million increased
by $145 million as compared to the first half of 1993. This
increase was primarily attributable to increases in the car
rental operations resulting from a greater number of transactions
due to increased travel and an increase in market share, and
improvements in construction equipment rental and sales in the
United States due to increased volume resulting from improvements
in the economy in the United States. These increases were partly
offset by lower revenues in claim administration and
telecommunication services due to decreases in volume, and from
changes in foreign exchange rates.
Total expenses increased $113 million to $1,476 million in the
first half of 1994 as compared to $1,363 million in the first
half of 1993. Direct operating expense increased principally due
to the higher volume of business, but is lower in 1994 as a
percent of revenues due to more efficient fixed cost coverage.
Depreciation of revenue earning equipment increased primarily due
to an increase in vehicles and equipment operated and higher
prices for automobiles; these increases were partly offset by
higher net proceeds received on disposal of revenue earning
equipment in excess of book value primarily related to a decrease
in the number of "risk" vehicles in the car rental operations,
gains on the sale of equipment in the construction equipment
rental operations in the United States principally due to
improvements in the economy in the United States, partly offset
by credits recorded in 1993 resulting from valuing certain pre-
acquisition assets on a net of tax basis. Selling, general and
administrative expense increased primarily due to higher
advertising costs. The increase in interest expense was
primarily due to higher debt levels and lower interest income in
1994 and $8.6 million included in 1994 relating to interest
receivable from Park Ridge Limited Partnership which will not be
collected, partly offset by lower interest rates in 1994 in the
foreign operations.
The tax provision of $19.2 million in the first half of 1994
was higher than the tax provision of $6.4 million in the first
half of 1993, primarily due to higher income before income taxes
in 1994 and changes in effective tax rates. See Note 1 to the
Notes to Condensed Consolidated Financial Statements.
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
(4) Instruments defining the rights of security
holders, including indentures. During the quarter
ended June 30, 1994, the registrant and its
subsidiaries ("Hertz") incurred various
obligations which could be considered as long-term
debt, none of which exceeded 10% of the total
assets of Hertz on a consolidated basis. Hertz
agrees to furnish to the Commission upon request a
copy of any instrument defining the rights of the
holders of such long-term debt.
(12) Computation of Ratio of Earnings to Fixed Charges for the
six months ended June 30, 1994, and 1993.
(b) Reports on Form 8-K:
The registrant filed Forms 8-K dated April 5, 1994 and
June 23, 1994 reporting under Items 4, 5 and 7 thereof
(i) instruments defining the rights of security holders,
including indentures, in connection with the Registration
Statements on Form S-3 (File Nos. 33-39145 and 33-62902)
filed by the registrant with the Securities and Exchange
Commission covering Senior and Senior and Junior
Subordinated Debt Securities issuable under Indentures
dated as of April 1, 1986, as supplemented, June 1, 1989,
and July 1, 1993, and (ii) reporting a change in the
registrant's certifying accountant.
SIGNATURES
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.
THE HERTZ CORPORATION
(Registrant)
Date: August 15, 1994 By: /s/ William Sider
William Sider
Executive Vice President and
Chief Financial Officer
(principal financial officer
and duly authorized officer)
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBIT
filed with
FORM 10-Q
for the quarter ended
June 30, 1994
under
THE SECURITIES EXCHANGE ACT OF 1934
THE HERTZ CORPORATION
Commission file number 1-7541
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<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
12 Computation of Ratio of Earnings to
Fixed Charges for the six months ended
June 30, 1994 and 1993.
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<PAGE>
EXHIBIT 12
THE HERTZ CORPORATION AND SUBSIDIARIES
CONSOLIDATED COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Thousands of Dollars Except Ratios)
Unaudited
Six Months
Ended June 30,
1994 1993
Income before income taxes $ 44,481 $ 12,655
Interest expense 124,352 123,335
Portion of rent estimated to represent
the interest factor 43,590 41,882
Earnings before income taxes and fixed
charges $212,423 $177,872
Interest expense (including capitalized
interest) $124,555 $123,432
Portion of rent estimated to represent
the interest factor 43,590 41,882
Fixed charges $168,145 $165,314
Ratio of earnings to fixed charges 1.3 1.1
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