Hertz 2015 Annual Report Download - page 157

Table of Contents
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Hertz Global Holdings, Inc. (the "Company" or "Hertz Holdings") was incorporated in Delaware in 2005 and wholly owns Hertz Investors, Inc. which
wholly owns The Hertz Corporation ("Hertz"), Hertz Holdings' primary operating company.
These condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X, as the
restricted net assets of Hertz Holdings and its subsidiaries exceed 25% of the consolidated net assets of the Company. This information should
be read in conjunction with the consolidated financial statements of Hertz included in this Annual Report under the caption Item 8, "Financial
Statements and Supplementary Data."
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In re Hertz Global Holdings, Inc. Securities Litigation
In November 2013, a purported shareholder class action, Pedro Ramirez, Jr. v. Hertz Global Holdings, Inc., et al., was commenced in the
U.S. District Court for the District of New Jersey naming Hertz Holdings and certain of its officers as defendants and alleging violations of
the federal securities laws. Since then the complaint has been amended several times. The complaint, as amended, alleges that Hertz
Holdings made material misrepresentations and/or omissions of material fact in its public disclosures during the period from February 14,
2013 through to July 16, 2015, in violation of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated thereunder. Plaintiffs seek an unspecified amount of monetary damages on behalf of the purported class and an award of
costs and expenses, including counsel fees and expert fees. On November 4, 2015 Hertz Holdings filed its motion to dismiss and on
February 2, 2016 the plaintiffs filed their response and a Motion for Leave to File a Proposed Fourth Amended Complaint to address
standing issues associated with the lead plaintiff. Hertz Holdings believes that it has valid and meritorious defenses and it intends to
vigorously defend against the complaint, but litigation is subject to many uncertainties and the outcome of this matter is not predictable
with assurance. It is possible that this matter could be decided unfavorably to Hertz Holdings. However, Hertz Holdings is currently unable
to estimate the range of these possible losses, but they could be material to the Company's consolidated financial condition, results of
operations or cash flows in any particular reporting period.
Governmental Investigations
In June 2014, the Company was advised by the staff of the New York Regional Office of the Securities and Exchange Commission (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.
For a discussion of the commitments and contingencies of the indirect subsidiaries of Hertz Holdings, see Note 10, "Lease and Concession
Agreements," and Note 16, "Contingencies and Off-Balance Sheet Commitments," to the Notes to its consolidated financial statements included in
this Annual Report under the caption “Item 8—Financial Statements and Supplementary Data.”
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