Dollar Rent A Car 2008 Annual Report Download - page 59

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adopted on January 1, 2009. The Company anticipates that adopting the provisions of SFAS No.
157 as they relate to nonfinancial assets and nonfinancial liabilities will only impact financial
statement disclosures.
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and
Financial Liabilities – including an amendment of FASB Statement No. 115” (“SFAS No. 159”). This
statement permits entities to make an irrevocable election to measure certain financial instruments
and other assets and liabilities at fair value on an instrument-by-instrument basis. Unrealized gains
and losses on items for which the fair value option has been elected should be recognized in
earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning
after November 15, 2007. The Company adopted the provisions of SFAS No. 159 as required on
January 1, 2008 and elected to not measure certain financial instruments and other assets and
liabilities at fair value on an instrument-by-instrument basis.
In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS No.
141(R)”) and SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an
amendment of ARB No. 51” (“SFAS No. 160”) which are both effective for fiscal years beginning
after December 15, 2008. SFAS No. 141(R) requires the acquirer to recognize assets and liabilities
and any noncontrolling interest in the acquiree at the acquisition date at fair value and requires the
acquirer in a step-acquisition to recognize the identifiable assets and liabilities at the full amounts of
their fair value. SFAS No. 160 amends ARB No. 51 to establish accounting and reporting standards
for the noncontrolling interest in a subsidiary and the deconsolidation of a subsidiary and changes
the layout of the consolidated income statement and classifies noncontrolling interests as equity in
the consolidated balance sheet. The Company adopted the provisions of SFAS No. 141(R) and
SFAS No. 160 as required on January 1, 2009. The Company is currently evaluating the impact
SFAS No. 141(R) and SFAS No. 160 will have on its consolidated financial position and results of
operations.
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and
Hedging Activities” (“SFAS No. 161”), which is effective for fiscal years beginning after December
15, 2008. SFAS No. 161 requires expanded disclosures related to an entity’s derivative instruments
and hedging activities. The Company adopted the provisions of SFAS No. 161 as required on
January 1, 2009. The Company is currently evaluating the impact SFAS No. 161 will have on its
consolidated financial position and results of operations.
In April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of Intangible
Assets” (“FSP FAS 142-3”). The FSP provides guidance on assigning useful lives to intangible
assets and requires expanded disclosures related to an entity’s intangible assets. The Company
adopted the provisions of FSP FAS 142-3 as required on January 1, 2009. The Company is
currently evaluating the impact FSP FAS 142-3 will have on its consolidated financial position and
results of operations.
Reclassifications – Certain reclassifications have been made to the 2007 financial information to
conform to the classifications used in 2008.
2. OPERATIONS AND LIQUIDITY
The Company amended its Senior Secured Credit Facilities (hereinafter defined) as well as certain
vehicle financing facilities on February 25, 2009 and is in full compliance with the terms of these
facilities. Based on the recent amendment of these facilities, its unrestricted cash position and
current operating trends, the Company believes it has sufficient liquidity to meet its business plan
during 2009.
Certain circumstances could arise that would impact the Company’s operating plans and liquidity,
and the Company believes it has taken appropriate steps in light of those risks, which include
primarily a Chrysler restructuring or bankruptcy or the insolvency or bankruptcy of one of the
monoline or bond insurers with respect to the Company’s financing arrangements (“Monolines”).
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