Hertz 2007 Annual Report Download - page 45

Collision damage costs and the costs of stolen or unaccounted-for vehicles and equipment, along with
other damage to our property, are charged to expense as incurred.
Other Risks
To manage other risks associated with our businesses, or to comply with applicable law, we purchase
other types of insurance carried by business organizations, such as worker’s compensation and
employer’s liability (for which we, through contracts with insurers domestically, bear the risk of the first
$5 million of loss from any occurrence), commercial crime and fidelity, performance bonds and
directors’ and officers’ liability insurance from unaffiliated insurance companies in amounts deemed by
us to be adequate in light of the respective hazards, where such coverage is obtainable on commercially
reasonable terms.
Governmental Regulation and Environmental Matters
Throughout the world, we are subject to numerous types of governmental controls, including those
relating to prices and advertising, privacy and data protection, currency controls, labor matters, charge
card operations, insurance, environmental protection, used car sales and licensing.
Environmental
The environmental requirements applicable to our operations generally pertain to (i) the operation and
maintenance of cars, trucks and other vehicles, such as heavy equipment, buses and vans; (ii) the
ownership and operation of tanks for the storage of petroleum products, including gasoline, diesel fuel
and oil; and (iii) the generation, storage, transportation and disposal of waste materials, including oil,
vehicle wash sludge and waste water. We have made, and will continue to make, expenditures to comply
with applicable environmental laws and regulations.
The use of cars and other vehicles is subject to various governmental requirements designed to limit
environmental damage, including those caused by emissions and noise. Generally, these requirements
are met by the manufacturer, except in the case of occasional equipment failure requiring repair by us.
Measures are taken at certain locations in states that require the installation of Stage II Vapor Recovery
equipment to reduce the loss of vapor during the fueling process.
We utilize tanks worldwide, approximately 605 of which are underground and approximately 1,975 of
which are aboveground, to store petroleum products, and we believe our tanks are maintained in
material compliance with environmental regulations, including federal and state financial responsibility
requirements for corrective action and third-party claims due to releases. Our compliance program for
our tanks is intended to ensure that (i) the tanks are properly registered with the state or other jurisdiction
in which the tanks are located and (ii) the tanks have been either replaced or upgraded to meet
applicable leak detection and spill, overfill and corrosion protection requirements.
We are also incurring and providing for expenses for the investigation and cleanup of contamination
from the discharge of petroleum substances at, or emanating from, currently and formerly owned and
leased properties, as well as contamination at other locations at which our wastes have reportedly been
identified. 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 consolidated financial statements. As of
December 31, 2007 and December 31, 2006, the aggregate amounts accrued for environmental
liabilities reflected in our consolidated balance sheet in ‘‘Other accrued liabilities’’ were $2.7 million and
$3.7 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 ongoing maintenance, as required. Cost estimates are
developed by site. Initial cost estimates are based on historical experience at similar sites and are refined
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