Hertz 2012 Annual Report Download - page 177

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
relating to termination benefits over the next twelve months. The remainder of the restructuring accrual
relates to future lease obligations which will be paid over the remaining term of the applicable leases.
Pension
and Post
Termination Retirement Consultant
Benefits Expense Costs Other Total
Balance as of January 1, 2011 ............ $ 6.3 $0.2 $0.1 $10.9 $ 17.5
Charges incurred .................... 14.4 0.4 1.3 40.3 56.4
Cash payments ..................... (15.5) — (0.6) (2.3) (18.4)
Other(1) ........................... 3.9 (0.4) (0.2) (37.2) (33.9)
Balance as of December 31, 2011 ......... $ 9.1 $0.2 $0.6 $11.7 $ 21.6
Charges incurred .................... 26.2 1.0 1.2 9.6 38.0
Cash payments ..................... (22.6) — (0.9) (3.3) (26.8)
Other(2) ........................... (0.3) (1.0) (0.6) (9.9) (11.8)
Balance as of December 31, 2012 ......... $12.4 $ 0.2 $ 0.3 $ 8.1 $ 21.0
(1) Consists of decreases of $23.2 million for asset writedowns, $13.9 million for facility closures, $0.4 million in ASC 715 pension
adjustment and $0.2 million of consultant costs, partly offset by a $3.8 million increase for involuntary benefits.
(2) Primarily consists of decreases of $10.3 million for facility closures and $1.0 million in ASC 715 pension adjustment.
Note 14—Financial Instruments
Gasoline Swap Contracts
We purchase unleaded gasoline and diesel fuel at prevailing market rates and maintain a program to
manage our exposure to changes in fuel prices through the use of derivative commodity instruments.
We currently have in place swaps to cover a portion of our fuel price exposure through March 2014. We
presently hedge a portion of our overall unleaded gasoline and diesel fuel purchases with commodity
swaps and have contracts in place that settle on a monthly basis. Gains and losses resulting from
changes in the fair value of these commodity instruments are included in our results of operations in the
periods incurred.
Interest Rate Cap Contracts
Hertz is exposed to market risks, such as changes in interest rates, and has purchased and sold interest
rate cap agreements to manage that risk. Consequently, we manage the financial exposure as part of our
risk management program by striving to reduce the potentially adverse effects that the volatility of the
financial markets may have on our operating results. Gains and losses resulting from changes in the fair
value of these interest rate caps are included in our results of operations in the periods incurred.
Foreign Currency Forward Contracts
We manage exposure to fluctuations in currency risk on intercompany loans we make to certain of our
subsidiaries by entering into foreign currency forward contracts at the time of the loans which are
intended to offset the impact of foreign currency movements on the underlying intercompany loan
obligations.
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