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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JANUARY 25, 1995
THE HERTZ CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 1-7541 13-1938568
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
225 BRAE BOULEVARD, PARK RIDGE, NEW JERSEY 07656-0713
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 307-2000
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
PAGE 1 OF 10 PAGES.
THE EXHIBIT INDEX IS ON PAGE 3.
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ITEM 5. OTHER EVENTS.
Exhibits are filed herewith in connection with the Registration Statement
on Form S-3 (File No. 33-54183) filed by The Hertz Corporation ("Hertz"), with
the Securities and Exchange Commission covering Senior Debt Securities issuable
under an Indenture dated as of December 1, 1994, between Hertz and First
Fidelity Bank, National Association, as Trustee (the "Indenture"). On January
25, 1995, Hertz offered for sale $150,000,000 principal amount of 8.30% Senior
Notes due February 2, 1998, to be issued under the Indenture. The exhibits
consist of the form of such Senior Notes, the Computation of Ratio of Earnings
to Fixed Charges for the year ended December 31, 1994, and Selected Financial
Data of Hertz for the years ended December 31, 1994, 1993, 1992, 1991 and 1990.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
(4) Form of 8.30% Senior Notes due February 2, 1998, to be issued by
Hertz under the Indenture.
(12) Computation of Consolidated Ratio of Earnings to Fixed Charges for
the year ended December 31, 1994.
(99) Selected Financial Data of The Hertz Corporation for the years
ended December 31, 1994, 1993, 1992, 1991 and 1990.
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 hereunto duly authorized.
THE HERTZ CORPORATION
(Registrant)
By: /s/ LEO A. MASSAD, JR.
--------------------------------------
Leo A. Massad, Jr.
Staff Vice President
and Controller
(Principal Accounting Officer)
Dated: February 1, 1995
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- -------------------------------------------------------------------------- -----
<C> <S> <C>
4 Form of 8.30% Senior Notes due February 2, 1998, to be issued by Hertz
under the Senior Indenture.............................................. 4-7
12 Computation of Consolidated Ratio of Earnings to Fixed Charges for the
year ended December 31, 1994............................................ 8
99 Selected Financial Data of The Hertz Corporation for the years ended
December 31, 1994, 1993, 1992, 1991 and 1990............................ 9-10
</TABLE>
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EXHIBIT 4
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY (THE "SECURITIES DEPOSITORY") TO A NOMINEE OF THE SECURITIES DEPOSITORY
OR BY THE SECURITIES DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE SECURITIES DEPOSITORY, TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE SECURITIES DEPOSITORY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE SECURITIES DEPOSITORY), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. 00001
CUSIP 428040 BC 2 $150,000,000
THE HERTZ CORPORATION
8.30% Senior Note due February 2, 1998
Original Issue Date: February 2, 1995
Interest Payment Dates: February 2 and August 2
Maturity Date: February 2, 1998
Interest Rate: 8.30%
THE HERTZ CORPORATION, a Delaware corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, the principal sum of ONE HUNDRED FIFTY MILLION
DOLLARS (the "Principal Amount") on the Maturity Date shown above, except as
provided below, and to pay interest thereon at the rate per annum shown above.
The Company will pay interest semiannually on the Interest Payment Dates,
commencing with August 2, 1995. Interest on this Note will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the Original Issue Date shown above. The Interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the January 15 or the
July 15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the registered Holder on such Regular
Record Date, and may be paid to the Person in whose name this Note (or one or
more Predecessor Securities) is registered on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Company, notice whereof
shall be given to holders of Notes not less than 15 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange upon which the
Notes may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in such Indenture.
In the event this Global Note is surrendered in exchange for Notes in
definitive form, principal and interest payable with respect to Notes in
definitive form will be payable at the office or agency of the Company
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maintained for that purpose in New York, New York (the Place of Payment), in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
payment of interest payable with respect to such Notes in definitive form, may
be made at the option of the Company by check mailed to the address of the
Person entitled thereto as such address shall appear on the Security Register.
This Note is one of a duly authorized issue of securities of the Company
(herein referred to as the "Securities") evidencing its unsecured indebtedness,
of the series hereinafter specified, all issued under and pursuant to an
indenture, dated as of December 1, 1994, (herein referred to as the
"Indenture"), duly executed and delivered by the Company and First Fidelity
Bank, National Association, as Trustee (hereinafter called the "Trustee"), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and Holders of the Securities.
The Securities may be issued in one or more series, which different series may
be issued in various aggregate principal amounts, may mature at different times,
may bear interest, if any, at different rates, may be subject to different
redemption provisions, if any, may be subject to different sinking, purchase or
analogous funds, if any, may be subject to different covenants and Events of
Default and may otherwise vary as in the Indenture provided. This Note is one of
a series designated as the 8.30% Senior Notes due February 2, 1998 of the
Company (herein referred to as the "Notes"), limited except as provided in the
Indenture to the aggregate principal amount of One Hundred Fifty Million Dollars
($150,000,000).
The Notes are not redeemable prior to maturity and are not entitled to any
sinking fund.
In case an Event of Default, as defined in the Indenture, with respect to
the Notes shall have occurred and be continuing, the principal hereof may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture provides that in certain events such declaration and its
consequences may be waived by the Holders of a majority in aggregate principal
amount of the Notes then Outstanding. Any such waiver by the Holder of this Note
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future Holders and owners of this Note and of any
Note issued upon the transfer hereof or in exchange or substitution herefor,
irrespective of whether or not any notation of such waiver is made upon this
Note or such other Notes.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of all Outstanding Securities or, in certain cases, of the
Outstanding Securities of each series to be affected, evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
Holders of the Securities of each such series; provided, however, that no such
supplemental indenture shall (i) change the Stated Maturity of the principal of,
or any installment of principal or interest on, any Security, or reduce the
principal amount thereof or the rate of interest, if any, thereon, or any
premium payable upon the redemption thereof, or reduce the amount of the
principal of a Discounted Security that would be due and payable upon a
declaration of the Maturity thereof, or change the coin or currency in which any
Security or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity
thereof) or, in the case of redemption, on or after the Redemption Date) or (ii)
reduce the percentage in principal amount of the Outstanding Securities or the
Outstanding Securities of any particular series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose Holders is
required for any waiver of compliance with certain provisions of the Indenture
or certain defaults thereunder or their consequences provided for in the
Indenture. It is also provided in the Indenture that prior to the acceleration
of maturity of the Securities of any particular series upon the occurrence of an
Event of Default with respect to such series as permitted by the Indenture, the
Holders of a majority in aggregate principal amount of the Securities of such
series at the time Outstanding may on behalf of the Holders of all of the
Securities of such series waive any past default under the Indenture with
respect to Securities of such series and its consequences, except a default in
the payment of the principal of or premium, if any, or interest, if any, on any
of the Securities of such series. Any such consent or waiver by the Holder of
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this Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this Note and
of any Note issued upon transfer hereof or in exchange or substitution herefor,
irrespective of whether or not any notation of such consent or waiver is made
upon this Note or such other Notes.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the time, place and rate, and in the coin or currency, herein and in the
Indenture prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable by the Holder hereof on the
Security Register of the Company, upon due presentment of this Note for
registration of transfer at the office of the Security Registrar, or at the
office of any Security Co-Registrar duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to, the Company and the
Security Registrar or any such Security Co-Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees.
The Notes are issuable only as registered Notes without coupons in
denominations of $1000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for new Notes of any authorized denominations of the same aggregate
principal amount as requested by the Holder surrendering the same. If (x) the
Securities Depository is at any time unwilling or unable to continue as
securities depository and a successor depository is not appointed by the Company
within 60 days, (y) the Company executes and delivers to the Trustee a Company
Order to the effect that this Note shall be exchangeable or (z) an Event of
Default has occurred and is continuing with respect to the Notes, this Note
shall be exchangeable for Notes in definitive form of like tenor and of an equal
aggregate principal amount, in denominations of $1,000 and integral multiples
thereof. Such definitive Notes shall be registered in such name or names as the
Securities Depository shall instruct the Trustee. If definitive Notes are so
delivered, the Company may make such changes to the form of this Note as are
necessary or appropriate to allow for the issuance of such definitive Notes.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer, the Company, the
Trustee, the Security Registrar, any Security Co-Registrar and any agent of the
Company or the Trustee may treat the Person in whose name this Note is
registered as the absolute owner hereof for all purposes, whether or not this
Note be overdue, and neither the Company, the Trustee, the Security Registrar,
any Security Co-Registrar nor any such agent shall be affected by notice to the
contrary.
The Holder of this Note shall not have recourse for the payment of
principal of or interest on this Note or for any claim based on this Note or the
Indenture against any director, officer or stockholder, past, present or future,
of the Company. By acceptance of this Note, the Holder waives any such claim
against any such Person.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used but not defined in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by the
Trustee under such Indenture, this Note shall not be entitled to any benefit
under such Indenture or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon.
Dated: February 2, 1995
THE HERTZ CORPORATION
By:
--------------------------------------
Chairman of the Board
[SEAL] Attest:
--------------------------------------
Secretary
Dated: February 2, 1995
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the
series designated herein, issued under
the Indenture described herein.
FIRST FIDELITY BANK, NATIONAL ASSOCIATION, as Trustee
By:
- --------------------------------------
Authorized Officer
7
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EXHIBIT 12
THE HERTZ CORPORATION AND SUBSIDIARIES
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS OF DOLLARS EXCEPT RATIO)
(UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1994
------------
<S> <C>
Income before income taxes.................................................... $162,831
Interest expense.............................................................. 284,438
Portion of rent estimated to represent the interest factor.................... 88,219
------------
Earnings before income taxes and fixed charges................................ $535,488
------------
Interest expense (including capitalized interest)............................. $284,855
Portion of rent estimated to represent the interest factor.................... 88,219
------------
Fixed charges................................................................. $373,074
------------
Ratio of earnings to fixed charges............................................ 1.4
------------
</TABLE>
8
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EXHIBIT 99
SELECTED FINANCIAL DATA OF THE HERTZ CORPORATION
(IN MILLIONS OF DOLLARS)
The following table presents selected consolidated financial information of
The Hertz Corporation ("Corporation"), which is unaudited for the year ended
December 31, 1994 and which has been extracted from the audited financial
statements for the years ended December 31, 1993, 1992, 1991 and 1990. The
information in the table and the notes thereto should be read in conjunction
with the financial statements and the related notes thereto contained in the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1993,
its Current Report on Form 8-K/A No. 1 dated July 14, 1994, and its Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1994, June 30, 1994 and
September 30, 1994.
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------------------
1994 1993 1992 1991 1990
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
REVENUES.............................................. $3,294 $2,855 $2,816 $2,626 $2,667
------ ------ ------ ------ ------
EXPENSES:
Direct operating.................................... 1,766 1,647 1,627 1,486 1,470
Depreciation of revenue earning equipment........... 703(a) 524(a) 497(b) 493 526
Selling, general and administrative................. 385 336 353 339 348
Interest, net of interest income of $7, $11, $4, $10
and $25........................................... 277 246 307 304 300
------ ------ ------ ------ ------
3,131 2,753 2,784 2,622 2,644
------ ------ ------ ------ ------
INCOME BEFORE INCOME TAXES............................ 163 102 32 4(b) 23
PROVISION (BENEFIT) FOR TAXES ON INCOME............... 72(a) 49(a) 22(b) (1)(b) (11)(c)
------ ------ ------ ------ ------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES............................... 91 53 10 5 34
CUMULATIVE EFFECT ON PRIOR YEARS OF CHANGES IN METHOD
OF ACCOUNTING FOR --
Postretirement Benefits (d)......................... -- -- (4) -- --
Vehicle Warranties (e).............................. -- -- -- (4) --
------ ------ ------ ------ ------
NET INCOME............................................ $ 91 $ 53 $ 6 $ 1 $ 34
====== ====== ====== ====== ======
Ratio of Earnings to Fixed Charges (f)................ 1.4 1.3 1.1 1.0 1.1
Balance Sheet Data at End of Period:
Total Assets........................................ $6,521 $4,688 $4,222 $4,294 $4,334
Total Debt.......................................... 4,414 2,940 2,550 2,702 2,798
Shareholders' Equity................................ 736 617 580 599 600
Ratio of Total Debt to Shareholders' Equity......... 6.0 4.8 4.4 4.5 4.7
</TABLE>
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(a) Effective July 1, 1994, certain lives being used to compute the provision
for depreciation of revenue earning equipment were increased to reflect
changes in the estimated residual values to be realized when the equipment
is sold. As a result of this change, depreciation of revenue earning
equipment for year 1994 was decreased by $9.6 million. Depreciation of
revenue earning equipment for the year 1993 includes net credits of $28.1
million as compared to net credits of $16.9 million in 1992, primarily
attributable to higher proceeds received in 1993 on disposal of the
equipment. The tax provision for the year 1994 includes a $1.5 million
credit resulting from adjustments made to tax accruals in connection with
tax audit evaluations and the effects of prior years' tax sharing
arrangements between the Corporation and its former parent company, RCA. The
tax provision for the year 1993 includes a $1.1 million charge relating to
the increase in net deferred tax liabilities as of January 1, 1993 due to
changes in the tax laws enacted in August 1993 and a $2.0 million credit
resulting from adjustments made to tax accruals in connection with tax audit
evaluations and the effects of prior years' tax sharing arrangements between
the Corporation and its former parent companies, UAL and RCA.
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Effective January 1, 1993, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, which did not have a material effect on the Corporation's
consolidated financial position, results of operations or cash flows.
(b) Depreciation of revenue earning equipment for the year 1992 includes net
credits of $16.9 million as compared to net charges of $5.4 million in 1991,
primarily attributable to higher proceeds received in 1992 on disposal of
the equipment and the elimination of losses incurred in 1991 due to the
increase in 1992 of "non-risk" vehicles acquired which are returned to the
vehicle manufacturers at pre-established prices.
The tax provision includes credits of $9.8 million, $16.7 million, and
$38.8 million for the years 1992, 1991 and 1990, respectively, resulting
from adjustments made to tax accruals in connection with tax audit
evaluations and the effects of prior years' tax sharing arrangements
between the Corporation and its former parent companies, UAL and RCA, and
the reversal of tax accruals no longer required and benefits realized
relating to certain foreign operations. The tax provision for the year 1991
also includes benefits of $5.5 million related to the close down and sale
of certain unprofitable foreign operations.
The decrease in income before income taxes for the year ended December 31,
1991, as compared to the prior year, was due to provisions made in 1991 of
approximately $20 million primarily incurred to close down certain
unprofitable foreign operations and depreciation adjustments made to
residual values of certain vehicles, $15 million of lower interest income
in 1991 primarily relating to refunds of prior years' income taxes, and the
adverse effects of the decrease in travel due to the war in the Persian
Gulf and a slowdown in the economy. The decrease was partly offset by net
credits of $8.9 million relating to the sale and disposition of certain
properties.
(c) The tax provision for the year 1990 includes credit adjustments of $38.8
million, resulting from adjustments made to tax accruals in connection with
tax audit evaluations and the effects of prior years' tax sharing
arrangements between the Corporation and its former parent companies, UAL
and RCA.
(d) Effective January 1, 1992, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 106, Employers' Accounting
for Postretirement Benefits Other than Pensions ("FAS No. 106"), which
requires that postretirement health care and other non-pension benefits be
accrued during the years the employee renders the necessary service. Prior
to 1992, the Corporation accrued for such benefits on a pay-as-you-go basis.
As of January 1, 1992, the Corporation recorded a cumulative decrease in net
income of $4.3 million (net of $2.7 million tax benefit) as a result of
implementing FAS No. 106.
(e) Effective January 1, 1991, the Corporation adopted the provisions of FASB
Technical Bulletin No. 90-1, Accounting for Separately Priced Extended
Warranty and Product Maintenance Contracts ("FAS No. 90-1"), which requires
that proceeds received from warranty contracts should be deferred and
recognized in income on a straight line basis over the contract period, and
costs of services performed under the contract should be charged to expense
as incurred. Prior to 1991, when vehicles were sold under an extended
warranty contract, the proceeds received by the Corporation under such
contract, net of estimated costs to be incurred in fulfilling obligations
under those contracts, were recorded in income when the sale occurred. As of
January 1, 1991, the Corporation recorded a cumulative decrease in net
income of $3.5 million (net of $2.2 million tax benefit) as a result of
implementing FAS No. 90-1.
(f) Earnings have been calculated by adding interest expense and the portion of
rentals estimated to represent the interest factor to income before income
taxes. Fixed charges include interest charges (including capitalized
interest) and the portion of rentals estimated to represent the interest
factor.
10
