Hertz 2010 Annual Report Download - page 150

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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.
Off-Balance Sheet Commitments
At December 31, 2010 and 2009, the following guarantees (including indemnification commitments)
were issued and outstanding.
Indemnification Obligations
In the ordinary course of business, we execute contracts involving indemnification obligations
customary in the relevant industry and indemnifications specific to a transaction such as the sale of a
business. These indemnification obligations 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 indemnification obligations 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 indemnification obligations and have accrued for expected losses that are
probable and estimable. The types of indemnification obligations 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
matters have been accrued, and those expenses are reflected in our consolidated financial statements.
As of December 31, 2010 and 2009, the aggregate amounts accrued for environmental liabilities
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