Hertz 2011 Annual Report Download - page 49

ITEM 1. BUSINESS (Continued)
state or other jurisdiction in which the tanks are located and (ii) the tanks have been either replaced or
upgraded to meet applicable leak detection and spill, overfill and corrosion protection requirements.
We are also incurring and providing for expenses for the investigation and cleanup of contamination
from the discharge of petroleum substances at, or emanating from, currently and formerly owned and
leased properties, as well as contamination at other locations at which our wastes have reportedly been
identified. The amount of any such expenses or related natural resource damages for which we may be
held responsible could be substantial. The probable losses that we expect to incur for such matters have
been accrued, and those losses are reflected in our consolidated financial statements. As of
December 31, 2011 and 2010, the aggregate amounts accrued for environmental liabilities reflected in
our consolidated balance sheets in ‘‘Other accrued liabilities’’ were $1.5 million and $1.6 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 ongoing 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 site. 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 nature of the contamination,
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).
With respect to cleanup expenditures for the discharge of petroleum substances at, or emanating from,
currently and formerly owned or leased properties, we have received reimbursement, in whole or in part,
from certain U.S. states that maintain underground storage tank petroleum cleanup reimbursement
funds. Such funds have been established to assist tank owners in the payment of cleanup costs
associated with releases from registered tanks. With respect to off-site U.S. locations at which our wastes
have reportedly been identified, we have been and continue to be required to contribute to cleanup
costs due to strict joint and several cleanup liability imposed by the federal Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 and comparable state superfund
statutes.
Environmental legislation and regulations and related administrative policies have changed rapidly in
recent years, both in the United States and in other countries. There is a risk that governmental
environmental requirements, or enforcement thereof, may become more stringent in the future and that
we may be subject to legal proceedings brought by government agencies or private parties with respect
to environmental matters. In addition, with respect to the cleanup of contamination, additional locations
at which waste generated by us or substances used by us may have been released or disposed, and of
which we are currently unaware, may in the future become the subject of cleanup for which we may be
liable, in whole or in part. Further, at airport-leased properties, we may be subject to environmental
requirements imposed by airports that are more restrictive than those obligations imposed by
environmental regulatory agencies. Accordingly, while we believe that we are in substantial compliance
with applicable requirements of environmental laws, we cannot offer assurance that our future
environmental liabilities will not be material to our consolidated financial position, results of operations or
cash flows.
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