Thrifty Car Rental 2008 Annual Report Download - page 82

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be made in future years. Discounting resulted in reducing the accrual for public liability and property
damage by $1.2 million and $3.4 million at December 31, 2008 and 2007, respectively. SLI amounts
are not discounted. Estimated future payments of Vehicle Insurance Reserves as of December 31,
2008 are as follows (in thousands):
2009 28,128$
2010 17,019
2011 11,555
2012 7,304
2013 4,086
Thereafter 3,974
Aggregate undiscounted public liability and property damage 72,066
Effect of discounting (1,152)
Public liability and property damage, net of discount 70,914
Supplemental liability insurance 39,396
Total vehicle insurance reserves 110,310$
Contingencies
The Company is a defendant in several class action lawsuits in California and one in Nevada. The
lawsuits allege that the Company violated wage and hour laws, including not providing meal and rest
breaks, failure to reimburse uniform maintenance and failure to pay overtime wages and retaliation,
that the pass through of the California trade and tourism commission and airport concession fees
violate antitrust laws and various other rights and laws by compelling out-of-state visitors to
subsidize the passenger car rental tourism assessment program, violation of the California Business
and Professions Code and incorrect calculation of a recovery fee. The Company intends to
vigorously defend these matters. Given the inherent uncertainties of litigation, the Company cannot
predict the ultimate outcome or reasonably estimate the amount of ultimate loss that may arise from
these lawsuits.
Various other claims and legal proceedings have been asserted or instituted against the Company,
including some purporting to be class actions, and some which demand large monetary damages or
other relief which could result in significant expenditures. Litigation is subject to many uncertainties
and the outcome of individual matters is not predictable with assurance. The Company is also
subject to potential liability related to environmental matters. The Company establishes reserves for
litigation and environmental matters when the loss is probable and reasonably estimable. It is
reasonably possible that the final resolution of some of these matters may require the Company to
make expenditures, in excess of established reserves, over an extended period of time and in a
range of amounts that cannot be reasonably estimated. The term “reasonably possible” is used
herein to mean that the chance of a future transaction or event occurring is more than remote but
less than likely. Although the final resolution of any such matters could have a material effect on the
Company’s consolidated operating results for the particular reporting period in which an adjustment
of the estimated liability is recorded, the Company believes that any resulting liability should not
materially affect its consolidated financial position.
Other
The Company is party to a data processing services agreement which requires annual payments
totaling approximately $30.0 million for 2009, and $23.0 million for 2010 and 2011. The Company
also has a telecommunications contract which will require annual payments totaling $2.2 million for
2009 and $1.5 million for 2010. Additionally, the Company has software and hardware maintenance
agreements which require annual payments totaling approximately $1.5 million for 2009.
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