Hertz 2012 Annual Report Download - page 171

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
pre-acquisition interest and commitment fee expenses for interim financing associated with the Dollar Thrifty
acquisition and a gain on the investment in Dollar Thrifty stock.
(7) Represents a gain for the U.K. pension plan relating to unamortized prior service cost from a 2010 amendment that
eliminated discretionary pension increases related to pre-1997 service primarily pertaining to inactive employees.
(8) Represents premiums paid to redeem our 10.5% Senior Subordinated Notes and a portion of our 8.875% Senior
Notes.
(9) Primarily represents expenses related to the withdrawal from a multiemployer pension plan, litigation accrual and
expenses associated with the impact of Hurricane Sandy.
Note 12—Contingencies and Off-Balance Sheet Commitments
Legal Proceedings
From time to time we are a party to various legal proceedings. Other than with respect to the aggregate
claims for public liability and property damage pending against us, management does not believe that
any of the matters resolved, or pending against us, during 2012 are material to us and our subsidiaries
taken as a whole. While we have accrued a liability with respect to claims for public liability and property
damage of $332.2 million at December 31, 2012, management, based on the advice of legal counsel,
does not believe any of the other pending matters described below are material. We have summarized
below, for purposes of providing background, various legal proceedings to which we were and/or are a
party during 2012 or the period after December 31, 2012 but before the filing of this Annual Report. In
addition to the following, various other legal actions, claims and governmental inquiries and
proceedings are pending or may be instituted or asserted in the future against us and our subsidiaries.
As previously disclosed, on June 15, 2011 we received a subpoena from the staff of the Securities and
Exchange Commission, or ‘‘SEC,’’ seeking production of documents related to our proposed business
combination with Dollar Thrifty. On February 14, 2013, we were informed by the staff that the
investigation has been completed and that no action was taken by the staff or the SEC.
1. Hertz Equipment Rental Corporation, or ‘‘HERC,’’ Loss Damage Waiver
On August 15, 2006, Davis Landscape, Ltd., individually and on behalf of all others similarly
situated, filed a complaint against HERC in the United States District Court for the District of
New Jersey. In November 2006, the complaint was amended to add another plaintiff, Miguel V.
Pro, and more claims. The Davis Landscape matter purports to be a nationwide class action on
behalf of all persons and business entities who rented equipment from HERC and who paid a
Loss Damage Waiver, or ‘‘LDW,’’ or an Environmental Recovery Fee, or ‘‘ERF.’’ The plaintiffs
seek a declaratory judgment and injunction prohibiting HERC from engaging in acts with
respect to the LDW and ERF charges that violate the New Jersey Consumer Fraud Act and
claim that the charges violate the Uniform Commercial Code. The plaintiffs also seek an
unspecified amount of compensatory damages with the return of all LDW and ERF charges
paid, attorneys’ fees and costs as well as other damages. The court has granted class
certification, denied our motion for summary judgment and the case is in the discovery stages.
In February 2012, we filed separate motions for partial summary judgment on the LDW and ERF
claims and we filed a motion to decertify the class. In June 2012, the judge denied our motion
for partial summary judgment on the LDW claim and, in July 2012, the judge granted our
motion for partial summary judgment on the ERF claim. The court also entered an order
referring the case to mediation by private consent of the parties. We have continued to work
through the mediator and in direct discussions with plaintiffs’ counsel on an acceptable
settlement of this litigation and have accrued our best estimate of the ultimate cost which is not
material to our financial condition.
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