Hertz 2013 Annual Report Download - page 137

Table of Contents


The following table sets forth the activity affecting the restructuring accrual during the year ended December 31, 2013 (in millions of dollars).
We expect to pay the remaining restructuring obligations 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.


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

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



Balance as of January 1, 2012 $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)
—
(1.6)
(12.6)
(36.8)
Other(1) (0.3)
(1.0)
0.1
(0.6)
(1.8)
Balance as of December 31, 2012 $12.4
$0.2
$0.3
$8.1
$21.0
Charges incurred 41.6
0.1
0.5
34.8
77.0
Cash payments (32.6)
(0.3)
(0.6)
(15.1)
(48.6)
Other(2) (1.3)
—
—
0.3
(1.0)
Balance as of December 31, 2013 $20.1
$ —
$0.2
$28.1
$48.4
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(1) Primarily consists of decreases of $0.5 million related to a goodwill write-off on a sale of business and $1.0 million in ASC 715 pension adjustment.
(2) Primarily consists of decreases of $1.6 million of accelerated equity award compensation, offset by the inclusion of prior facility reserves of $0.3 million
and $0.2 million for foreign currency translation.
(3) As of December 31, 2013, primarily consists of charges incurred for relocation of $19.0 million, facility closures of $8.5 million and lease accelerations
of $7.0 million.
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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 December 2014. We presently hedge a portion of our overall unleaded gasoline 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.
Foreign Exchange Options
We manage our foreign currency risk primarily by incurring, to the extent practicable, operating and financing expenses in the local currency
in the countries in which we operate, including making fleet and equipment purchases and borrowing for working capital needs. Also, we
have purchased foreign exchange options to manage exposure to fluctuations in foreign exchange rates for selected marketing programs. The
effect of exchange rate changes on these financial instruments would not materially affect our consolidated financial position, results of
operations or cash flows.
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Source: HERTZ CORP, 10-K, March 31, 2014 Powered by Morningstar® Document Research℠
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