Hertz to revise financial statements, over $87 million in accounting errors
Hertz Global Holdings Inc. announced it will be revising financial statements from 2011 through 2013 and continue a review that has uncovered over $87 million in errors.
According to Hertz, 2012 and 2013 annual and quarterly financial statements have to be restated and should not be relied on. The company is working with PricewaterhouseCoopers LLP (PwC) on resolving the accounting problems.
In September Chairman and CEO Mark Frissora stepped down because of personal reasons. Since, Brian P. MacDonald, president and CEO of Hertz Equipment Rental Corp., has been appointed interim CEO.
The company is under pressure from shareholders to hire a CEO and over the accounting issues that the company has fallen into since it was told that it an investigation had been initiated by the SEC in June.
According to a filing submitted on November 14:
“The most material errors identified to date relate primarily to the capitalization and timing of depreciation for certain non-fleet assets, allowances for doubtful accounts in Brazil, allowances for uncollectible amounts with respect to renter obligations for damaged vehicles, restoration obligations at the end of facility leases and certain other items.”
The car rental company also said that it will lower its costs by about $100 million annually, through reducing general and administrative expenses, trimming its information technology and capital investments and lowering external strategic adviser expenses.
The stock dropped by 5% on Friday, closing at $21.69 per share.