Thrifty Car Rental 2010 Annual Report Download - page 88

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Budget Group, Inc. (“Avis Budget”) on September 27, 2010, and they have by consent
adjourned the time to respond. While this case has not been dismissed, there has been no
response to the subpoena to date; and 3) Rice v. Dollar Thrifty Automotive Group, Inc., et al.
(Consolidated Case No. 10-CV-0294-CVE-FHM, U.S. Dist. Ct. for the Northern Dist. of
Oklahoma) – the parties filed a stipulation of dismissal of this action on October 15, 2010, and
the court has dismissed the action with prejudice following the stockholder vote rejecting the
proposed Merger Agreement.
The Company is a defendant in several class action lawsuits in California and one in Colorado.
The California lawsuits allege 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 breach of contract, and the
Colorado lawsuit alleges violation of the Colorado Consumer Protection Act. The lawsuit in
Colorado was dismissed with prejudice in July 2010 and the plaintiffs filed a notice of appeal on
August 19, 2010. 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 legal actions, claims and governmental inquiries and proceedings have been in
the past, or may be in the future, asserted or instituted against the Company, including other
purported class actions or proceedings relating to the Hertz transaction or a potential
transaction with Avis Budget, and some that may 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 probable. 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 $23.1 million for 2011. The Company also has a
telecommunications contract which will require annual payments totaling $2.0 million for 2011
and $1.2 million for 2012. Additionally, the Company has software and hardware maintenance
agreements which require annual payments totaling approximately $1.0 million for 2011.
In addition to the letters of credit described in Note 10, the Company had letters of credit
totaling $5.5 million at December 31, 2010 and 2009, which are primarily used to support
insurance programs and airport concession obligations in Canada. The Company may also
provide guarantees on behalf of franchisees to support compliance with airport concession
bids. Non-performance of the obligation by the franchisee would trigger the obligation of the
Company. At December 31, 2010, there were no such guarantees on behalf of franchisees.
At December 31, 2010, the Company had outstanding vehicle purchase commitments of
approximately $1.0 billion over the next twelve months.
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