Hertz 2014 Annual Report Download - page 7

Table of Contents
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This Annual Report on Form 10-K for the year ended December 31, 2014 includes consolidated financial statements for the years ended
December 31, 2012, 2013 and 2014. The consolidated financial statements for the years ended December 31, 2012 and 2013 and selected
financial data for the years ended December 31, 2011 (unaudited), 2012, and 2013 are restated.
During the preparation of our Form 10-Q for the first quarter of 2014, misstatements were identified in our previous financial statements relating to
the capitalization and timing of depreciation for certain non-fleet assets, allowances for doubtful accounts in Brazil, as well as other items. These
misstatements, in combination with misstatements previously identified in the revision included in our 2013 Form 10-K/A related to vehicle vendor
allowances for marketing and misstatements related to the Brazil operations, which is further described in Note 2, Restatement, to the Notes to our
consolidated financial statements under the caption Item 8, Financial Statements and Supplementary Data ("Note 2 - Restatement") resulted in the
Audit Committee of our Board of Directors (the “Audit Committee” and the “Board”), in consultation with our management, concluding on June 3,
2014 that our financial statements for 2011 should no longer be relied upon and would require restatement.
In light of the above, in June 2014, the Audit Committee directed that two complementary processes be undertaken. First, the Audit Committee
directed management to conduct a thorough review of our financial records for fiscal years 2011, 2012, and 2013 to determine whether further
adjustments were necessary. This review, which was conducted with the assistance of outside consultants, identified additional misstatements,
including misstatements related to:
capitalization and timing of depreciation for non-fleet capital and information technology expenditures;
• accruals for uninvoiced non-fleet vendor obligations;
• accrual for salvage vehicles;
• the amortization period associated with vehicle registration and license fees;
• reserve estimates associated with allowances for uncollectible amounts receivable for renter obligations related to damaged
vehicles;
• reserve estimates associated with allowances for doubtful accounts, including credit memos;
• reserve estimates associated with probable credit card charge backs;
• accruals for customer rewards programs;
• accrued unbilled revenue;
• reserve estimates associated with allowances for doubtful accounts for the Brazil operations;
• accruals for travel vouchers associated with the Brazil operations;
• Brazil operations litigation reserves;
• other assets and intercompany accounts for the Brazil operations;
• accruals for restoration obligations at the end of facility leases; and
• disclosure of gross equipment and accumulated depreciation balances associated with the capitalization of refurbishment costs.
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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