Hertz 2015 Annual Report Download - page 143

Table of Contents
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Company's consolidated financial condition, results of operations or cash flows in any particular reporting period.
The Company intends to assert that it has meritorious defenses in the foregoing matters and the Company intends to defend itself vigorously.
Governmental Investigations - In June 2014, the Company was advised by the staff of the New York Regional Office of the SEC that it is
investigating the events disclosed in certain of the Company’s filings with the SEC. In addition, in December 2014 a state securities
regulator requested information regarding the same events. The investigations generally involve the restatements included in the
Company's 2014 Form 10-K and related accounting for prior periods. The Company has and intends to continue to cooperate with both the
SEC and state requests. Due to the stage at which the proceedings are, Hertz is currently unable to predict the likely outcome of the
proceedings or estimate the range of reasonably possible losses, which may be material. Among other matters, the restatements included
in the Company’s 2014 Form 10-K addressed a variety of accounting matters involving the Company’s Brazil rental car operations. The
Company has identified certain activities in Brazil that may raise issues under the Foreign Corrupt Practices Act and local laws, which the
Company has self-reported to appropriate government entities. At this time, the Company is unable to predict the outcome of this issue or
estimate the range of reasonably possible losses, which could be material.
French Antitrust - In February 2015, the French Competition Authority issued a Statement of Objections claiming that several car rental
companies, including Hertz and certain of its subsidiaries, violated French competition law by receiving historic market information from
twelve French airports relating to the car rental companies operating at those airports and by engaging in a concerted practice relating to
train station surcharges. Hertz believes that it has valid defenses and intends to vigorously defend against the allegations, but, due to the
early stage at which the proceedings are, Hertz is currently unable to predict the likely outcome of the proceedings or range of reasonably
possible losses, which may be material.
French Road Tax - The French Tax Authority has challenged the historic practice of several rental car companies, including Hertz France,
of registering vehicles in jurisdictions where it is established and where the road tax payable with respect to those vehicles is lower than
the road tax payable in the jurisdictions where the vehicles will primarily be used. In respect of a period in 2005, the Company has
unsuccessfully appealed the French Tax assessment to the highest Administrative court in France. In respect of a period from 2003 to
2005, following an adverse judgment, the Company appealed the French Tax Authority’s assessment to the Civil Court of Appeal. This
appeal is currently awaiting judgment. In the third quarter of 2015, following an adverse decision against another industry participant
involved in a similar action, the Company has recorded charges with respect to this matter of approximately $23 million during 2015.
The Company has established reserves for matters where the Company believes that losses are probable and can be reasonably estimated. Other
than the aggregate reserve established for claims for public liability and property damage, none of those reserves are material. For matters,
including certain of those described above, where the Company has not established a reserve, the ultimate outcome or resolution cannot be
predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated. Litigation is subject to many uncertainties and the
outcome of the individual litigated matters is not predictable with assurance. It is possible that certain of the actions, claims, inquiries or
proceedings, including those discussed above, could be decided unfavorably to the Company or any of its subsidiaries involved. Accordingly, it is
possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's
consolidated financial condition, results of operations or cash flows in any particular reporting period.
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In the ordinary course of business, the Company executed contracts involving indemnification obligations customary in the relevant industry and
indemnifications specific to a transaction such as the sale of a business. These indemnification obligations might include claims relating to the
following: environmental matters; intellectual property rights; governmental regulations and employment-related matters; customer, supplier and
other commercial contractual relationships; and financial matters. Specifically, the Company has indemnified various parties for the costs
associated with remediating numerous hazardous substance storage, recycling or disposal sites in many states and, in some
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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.