Hertz 2008 Annual Report Download - page 131

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Property and equipment expenditures in our car rental operations were $128.9 million, $132.8 million
and $166.4 million for the years ended December 31, 2008, 2007 and 2006, respectively. Property and
equipment expenditures in our equipment rental operations were $40.9 million, $60.4 million and
$54.4 million for the years ended December 31, 2008, 2007 and 2006, respectively. Property and
equipment expenditures for all other activities were $8.9 million, $2.8 million and $3.1 million for the
years ended December 31, 2008, 2007 and 2006, respectively.
Property and equipment expenditures in our car rental operations, equipment rental operations and for
all other activities for the year ended December 31, 2008 decreased by 2.9% and 32.3% and increased
by 217.9%, respectively, compared to the year ended December 31, 2007. Property and equipment
expenditures in our car rental operations, equipment rental operations and for all other activities for the
year ended December 31, 2007 decreased by 20.2%, increased by 11.0% and decreased by 9.7%,
respectively, compared to the year ended December 31, 2006.
For the year ended December 31, 2008, net expenditures for revenue earning equipment decreased as
compared to 2007. This decrease was due to a decrease in year-over-year expenditures for revenue
earning equipment, partly offset by a year-over-year decrease in disposal proceeds relating to revenue
earning equipment. For the year ended December 31, 2008, net expenditures for property and
equipment were higher than our net expenditures in 2007 relating to a decrease in disposal proceeds,
partly offset by a decrease in year-over-year expenditures.
For the year ended December 31, 2007, net expenditures for revenue earning equipment and property
and equipment increased slightly as compared to 2006. This increase was due to a year-over-year
decrease in disposal proceeds relating to revenue earning equipment, partly offset by decreases in
year-over-year expenditures for both revenue earning equipment and property and equipment.
Off-Balance Sheet Commitments
As of December 31, 2008 and December 31, 2007, the following guarantees (including indemnification
commitments) were issued and outstanding:
Indemnifications
In the ordinary course of business, we execute contracts involving indemnifications standard in the
relevant industry and indemnifications specific to a transaction such as the sale of a business. These
indemnifications might include claims relating to the following: environmental matters; intellectual
property rights; governmental regulations and employment-related matters; customer, supplier and
other commercial contractual relationships; and financial matters. Performance under these indemnities
would generally be triggered by a breach of terms of the contract or by a third party claim. We regularly
evaluate the probability of having to incur costs associated with these indemnifications and have
accrued for expected losses that are probable and estimable. The types of indemnifications for which
payments are possible include the following:
Sponsors; Directors
On the Closing Date, Hertz entered into customary indemnification agreements with us, the Sponsors
and our stockholders affiliated with the Sponsors, pursuant to which Hertz Holdings and Hertz will
indemnify the Sponsors, our stockholders affiliated with the Sponsors and their respective affiliates,
directors, officers, partners, members, employees, agents, representatives and controlling persons,
against certain liabilities arising out of performance of a consulting agreement with Hertz Holdings and
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