Dollar Rent A Car 2011 Annual Report Download - page 25

If a large number of vehicles are subject to simultaneous recalls, or if needed replacement parts are not available, we may not be able to re-rent recalled vehicles
for a significant period of time. These types of disruptions could jeopardize our ability to satisfy demand for our vehicles, or could result in the loss of
business to our competitors. Depending on the severity of any manufacturer recall, it could have a material and adverse effect on our operations and cash
flows.
Liability Insurance Risk
We are exposed to claims for personal injury, death and property damage resulting from accidents involving our rental customers and the use of our
cars. In both 2011 and 2010, we maintained the level of self-insurance of $7.5 million per occurrence for public liability and property damage
claims, including third-party bodily injury and property damage, and maintained the level of self-insurance for general and garage liability of $5.0 million.
We maintain insurance coverage for liability claims above these self-insurance levels. We self-insure for all losses on supplemental liability insurance policies
sold to vehicle rental customers. A significant change in the amount and frequency of uninsured liability claims could negatively impact our results.
Environmental Regulations
We are subject to numerous environmental regulatory requirements related to the ownership, storage or use of petroleum products such as gasoline,
diesel fuel and new and used motor oil; the treatment or discharge of waste waters; and the generation, storage, transportation and off-site treatment or disposal
of waste materials. We have made, and expect to continue to make, expenditures to comply with environmental laws and regulations. These expenditures may
be material to our financial position, results of operations and cash flows. We have designed programs to maintain compliance with applicable technical and
operational requirements, including leak detection testing of underground storage tanks, and to provide financial assurance for remediation of spills or
releases. However, we cannot be certain that our programs will guarantee compliance with all regulations to which we are subject.
Environmental legislation and regulations and related administrative policies have changed rapidly in recent years. There is a risk that governmental
environmental requirements, or enforcement thereof, may become more stringent in the future and that we may be subject to additional legal proceedings
brought by government agencies or private parties for environmental matters. In addition, there may be additional locations of which we are currently unaware
at which wastes generated by us may have been released or disposed. In the future, these locations may become the subject of cleanup for which we may be
liable, in whole or part. Accordingly, there can be no assurance that the Company’s future environmental liabilities will not be material to the Company’s
consolidated financial position, results of operations or cash flows.
Dependence on Outsourcing Arrangements
HP handles the majority of our IT services. If HP fails to meet its obligations in all material respects as and when required under our agreement, we
may suffer a loss of business functionality and productivity, which would adversely affect our results. Additionally, if there is a disruption in our
relationship with HP, we may not be able to secure another IT supplier to adequately meet our IT needs on acceptable terms, which could result in performance
issues and a significant increase in costs.
Dependence on Communication Networks and Centralized Information Systems
We heavily rely on information systems to conduct our business specifically in the areas of reservations, rental transaction processing, fleet
management and accounting. We have centralized information systems in disaster resistant facilities maintained by HP in Tulsa, Oklahoma and we rely on
communication service providers to link our system with the business locations these systems serve. A failure of a major system, or a major disruption of
communications between the system and the locations it serves, could cause a loss of reservations, slow the rental transaction processing, interfere with our
ability to manage our fleet and otherwise materially adversely affect our ability to manage our business effectively.
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