Hertz 2012 Annual Report Download - page 166

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of December 31, 2012, total unrecognized tax benefits were $17.2 million, all of which, if recognized,
would favorably impact the effective tax rate in future periods. A reconciliation of the beginning and
ending amount of unrecognized tax benefits is as follows (in millions of dollars):
2012 2011 2010
Balance at January 1 ........................................ $21.6 $27.2 $25.6
Increase (decrease) attributable to tax positions taken during prior periods . (6.8) (9.5) 0.3
Increase attributable to tax positions taken during the current year ....... 2.4 3.9 1.3
Decrease attributable to settlements with taxing authorities .............———
Balance at December 31 ..................................... $17.2 $21.6 $27.2
We conduct business globally and, as a result, file one or more income tax returns in the U.S. and
non-U.S. jurisdictions. In the normal course of business we are subject to examination by taxing
authorities throughout the world. The open tax years for these jurisdictions span from 2003 to 2012. We
are currently under audit by the Internal Revenue Service for tax years 2006 to 2009. Several U.S. state
and non-U.S. jurisdictions are under audit.
In many cases the uncertain tax positions are related to tax years that remain subject to examination by
the relevant taxing authorities. It is reasonable that approximately $6.8 million of unrecognized tax
benefits may reverse within the next twelve months due to settlement with the relevant taxing authorities
and/or the filing of amended income tax returns.
Net, after-tax interest and penalties related to the liabilities for unrecognized tax benefits are classified as
a component of ‘‘Provision for taxes on income’’ in the consolidated statement of operations. During the
years ended December 31, 2012, 2011 and 2010, approximately $0.6 million, $1.9 million and
$0.2 million, respectively, in net, after-tax interest and penalties were recognized. As of December 31,
2012 and 2011, approximately $4.2 million and $3.7 million, respectively, of net, after-tax interest and
penalties was accrued in our consolidated balance sheet within ‘‘Accrued taxes.’’
Note 10—Lease and Concession Agreements
We have various concession agreements, which provide for payment of rents and a percentage of
revenue with a guaranteed minimum, and real estate leases under which the following amounts were
expensed (in millions of dollars):
Years ended December 31,
2012 2011 2010
Rents ................................................ $135.9 $130.6 $133.9
Concession fees:
Minimum fixed obligations .................................. 249.6 248.7 252.0
Additional amounts, based on revenues ........................ 329.4 311.8 278.7
Total ................................................. $714.9 $691.1 $664.6
For the years ended December 31, 2012, 2011 and 2010, sublease income reduced rent expense
included in the above table by $5.0 million, $5.0 million and $4.5 million, respectively.
142