Hertz 2008 Annual Report Download - page 194

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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
each of the Sponsors and certain other claims and liabilities, including liabilities arising out of financing
arrangements or securities offerings. We also entered into indemnification agreements with each of our
directors in connection with the initial public offering of our common stock in November 2006. We do not
believe that these indemnifications are reasonably likely to have a material impact on us.
Environmental
We have indemnified various parties for the costs associated with remediating numerous hazardous
substance storage, recycling or disposal sites in many states and, in some instances, for natural
resource damages. The amount of any such expenses or related natural resource damages for which we
may be held responsible could be substantial. The probable expenses that we expect to incur for such
matters have been accrued, and those expenses are reflected in our consolidated financial statements.
As of December 31, 2008 and 2007, the aggregate amounts accrued for environmental liabilities
including liability for environmental indemnities, reflected in our consolidated balance sheet in ‘‘Other
accrued liabilities’’ were $2.2 million and $2.7 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 on-going
maintenance, as required. Cost estimates are developed by site. Initial cost estimates are based on
historical experience at similar sites and are refined over time on the basis of in-depth studies of the sites.
For many sites, the remediation costs and other damages for which we ultimately may be responsible
cannot be reasonably estimated because of uncertainties with respect to factors such as our connection
to the site, the materials there, the involvement of other potentially responsible parties, the application of
laws and other standards or regulations, site conditions, and the nature and scope of investigations,
studies, and remediation to be undertaken (including the technologies to be required and the extent,
duration, and success of remediation).
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