Hertz 2009 Annual Report Download - page 67

ITEM 3. LEGAL PROCEEDINGS (Continued)
projections of ultimate losses, expenses, premiums and administrative costs. At December 31,
2009 and December 31, 2008 our liability recorded for public liability and property damage
matters was $277.8 million and $311.4 million, respectively. The reserve balance decreased as
a result of an 8.0% reduction in transaction day volume and a 4.8% reduction in expected cost
per transaction day for the current accident year or $27.4 million for all probable pending and
future claims. In addition, there was a reduction in the reserve for existing claims of $6.2 million
as a result of lower expenses than previously estimated. We believe that our analysis was
based on the most relevant information available, combined with reasonable assumptions, and
that we may prudently rely on this information to determine the estimated liability. We note the
liability is subject to significant uncertainties. The adequacy of the liability reserve is regularly
monitored based on evolving accident claim history and insurance related state legislation
changes. If our estimates change or if actual results differ from these assumptions, the amount
of the recorded liability is adjusted to reflect these results.
We intend to assert that we have meritorious defenses in the foregoing matters and we intend to defend
ourselves vigorously.
We have established reserves for matters where we believe that the losses are probable and reasonably
estimated, including for various of the matters set forth above. Other than with respect to the reserve
established for claims for public liability and property damage, none of those reserves are material. For
matters, including those described above, where we have not established a reserve, the ultimate
outcome or resolution cannot be predicted at this time, or the amount of ultimate loss, if any, cannot be
reasonably estimated. Litigation is subject to many uncertainties and the outcome of the individual
litigated matters is not predictable with assurance. It is possible that certain of the actions, claims,
inquiries or proceedings, including those discussed above, could be decided unfavorably to us or any of
our subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding
could exceed the amount accrued in an amount that could be material to our consolidated financial
condition, results of operations or cash flows in any particular reporting period.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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