Hertz 2009 Annual Report Download - page 107

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 $90.8 million, $139.8 million and
$128.7 million for the years ended December 31, 2009, 2008 and 2007, respectively. Property and
equipment expenditures in our equipment rental operations were $9.4 million, $44.4 million and
$58.5 million for the years ended December 31, 2009, 2008 and 2007, respectively. Property and
equipment expenditures for all other activities were $0.5 million, $9.6 million and $2.7 million for the
years ended December 31, 2009, 2008 and 2007, respectively.
Property and equipment expenditures in our car rental operations, equipment rental operations and for
all other activities for the year ended December 31, 2009 decreased by 35.1%, 78.8% and 94.8%,
respectively, compared to the year ended December 31, 2008. These decreases are a result of
managing our capital expenditures during the recent economic downturn. Property and equipment
expenditures in our car rental operations, equipment rental operations and for all other activities for the
year ended December 31, 2008 increased by 8.6%, decreased by 24.1% and increased by 255.6%,
respectively, compared to the year ended December 31, 2007.
Off-Balance Sheet Commitments
As of December 31, 2009 and December 31, 2008, 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
Hertz has entered into customary indemnification agreements with Hertz Holdings, 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. 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
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