Common use of Certain Projections Clause in Contracts

Certain Projections. As the controlling stockholder of Hertz, Ford and its representatives on the Hertz Board were routinely given access to nonpublic management projections of possible future performance of Hertz. These projections (the “Hertz Projections”) included management forecasts of sales, EBITDA, EBIT, pre-tax income, net income and diluted earnings per share. Following the receipt by Hertz in September 2000 of Ford’s preliminary, non-binding proposal to acquire all of the outstanding Shares, Ford and Hertz agreed that Ford and its representatives on the Hertz Board would no longer be given routine access to such Hertz Projections. During the course of its negotiations with the Special Committee, Ford was provided by Hertz Management with 5-year Hertz Projections on November 22, 2000, which were prepared on and dated as of November 3, 2000 (the “November 3, 2000 Hertz Projections”), as discussed under “Special Factors — Background to the Offer.” Hertz also provided Ford with Hertz Projections in January 2001. A summary of the Hertz Projections received most recently prior to September 2000, the November 3, 2000 Hertz Projections, and the January 2001 revised 5-year Hertz Projections are set forth below. On October 12, 2000, the Ford Profit Forecasting Group received Hertz Projections and, in the course of negotiations with the Special Committee, Hertz provided Ford with Hertz Projections on November 30, 2000. The October 12, 2000 and November 30, 2000 Hertz Projections are not summarized herein since they did not differ materially from the November 3, 2000 Hertz Projections. In addition to the risks and uncertainties inherent in the Hertz Projections noted above, Ford and the Purchaser believe that the utility of the Pre-September 2000 Hertz Projections is further compromised by intervening economic and market developments since the preparation of such projections. The extent of the economic slowdown in the U.S. and abroad was not yet apparent when the Pre-September 2000 Hertz Projections were prepared, and such projections were based on assumptions as to future economic growth rates that seem unjustified based on current information. It is our understanding that Hertz believes that reduced economic growth rates in the United States and abroad could negatively affect Hertz’s worldwide car rental and equipment rental businesses. Revenues $ 5,549 $ 6,057 $ 6,564 $ 7,198 $ 7,821 Earnings before interest, taxes, depreciation and amortization (“EBITDA”) 2,657 2,892 3,150 3,469 3,783 Earnings before interest and taxes (“EBIT”) 1,026 1,119 1,210 1,321 1,439 Income before income taxes (“Pre-tax income”) 541 595 650 722 803 Net income 333 362 393 430 480 Diluted earnings per share (“EPS”) 3.09 3.36 3.65 3.99 4.46 INCOME STATEMENT DATA Revenues $ 1,149 $ 1,404 $ 1,613 $ 1,383 $ 5,549 Pre-tax income (13 ) 147 274 133 541 Net income (8 ) 90 169 82 333 Diluted EPS (0.08 ) 0.84 1.57 0.76 3.09 SELECTED OPERATING DATA US Rent A Car Average revenue per transaction per day of owned car rental operations during period (whole dollars) $ 39.26 $ 42.32 $ 43.39 $ 42.51 $ 41.98 Number of transactions of owned car rental operations during period (in thousands) 4,850.4 5,613.6 5,694.1 5,228.0 21,386.1 Europe Rent A Car Average revenue per transaction per day of owned car rental operations during period (whole dollars) $ 27.63 $ 30.22 $ 30.29 $ 29.81 $ 29.82 Number of transactions of owned car rental operations during period (in thousands) 1,026.7 1,243.4 1,266.4 1,190.7 4,727.2 INCOME STATEMENT DATA Revenues $ 5,547 $ 6,321 $ 6,994 $ 7,647 $ 8,285 EBITDA 2,694 3,028 3,364 3,691 4,012 EBIT 1,059 1,176 1,296 1,408 1,529 Pre-tax income 600 691 793 889 981 Net income 363 421 480 530 586 Diluted EPS 3.38 3.91 4.46 4.93 5.45 SELECTED OPERATING DATA US Rent A Car Average revenue per transaction per day of owned car rental operations during period (whole dollars) $ 41.89 $ 42.71 $ 43.58 $ 44.47 $ 45.14 Number of transactions of owned car rental operations during period (in thousands) 21,482.4 22,986.1 24,606.7 26,339.7 28,175.0 Europe Rent A Car Average revenue per transaction per day of owned car rental operations during period (whole dollars) $ 34.15 $ 34.67 $ 35.19 $ 35.89 $ 36.62 Number of transactions of owned car rental operations during period (in thousands) 4,714.7 5,091.8 5,499.2 5,884.1 6,296.0 Revenues $ 5,993 $ 6,577 $ 7,133 $ 7,779 $ 8,492 EBITDA 2,915 3,197 3,490 3,838 4,230 EBIT 1,149 1,251 1,355 1,490 1,667 Pre-tax income 670 737 825 949 1,092 Net income 406 449 500 566 653 Diluted EPS 3.77 4.17 4.65 5.27 6.07