Hertz 2007 Annual Report Download - page 58

cease altogether the use of those products and components. Each of these alternatives could increase
our expenses materially or impact the marketability of our services. Any litigation, regardless of the
outcome, could result in substantial costs and diversion of resources and could have a material adverse
effect on our business. In addition, a third-party intellectual property owner might not allow us to use its
intellectual property at any price, or on terms acceptable to us, which could materially affect our
competitive position and our results of operations. For example, if Enterprise were to pursue and prevail
on claims of infringement similar to those it has previously asserted, it could have a material adverse
effect on our insurance replacement business and, in turn, our off-airport business. We have already
commenced litigation against Enterprise with respect to its patents and claims it has made. See
‘‘Item 3—Legal Proceedings.’’
The misuse or theft of information we possess could harm our reputation or competitive position,
adversely affect the price at which shares of our common stock trade or give rise to material
liabilities.
We possess non-public information with respect to millions of individuals, including our customers and
our current and former employees, and thousands of businesses, as well as non-public information with
respect to our own affairs. The misuse or theft of that information by either our employees or third parties
could result in material damage to our brand, reputation or competitive position or materially affect the
price at which shares of our common stock trade. In addition, depending on the type of information
involved, the nature of our relationship with the person or entity to which the information relates, the
cause and the jurisdiction whose laws are applicable, that misuse or theft of information could result in
governmental investigations or material civil or criminal liability. The laws that would be applicable to
such a failure are rapidly evolving and becoming more burdensome. See ‘‘—Changes in the U.S. and
foreign legal and regulatory environment that impact our operations, including laws and regulations
relating to the insurance products we sell, customer privacy, data security, insurance rates and expenses
we pass through to customers by means of separate charges, could disrupt our business, increase our
expenses or otherwise could have a material adverse effect on our results of operations.’’
If we acquire any businesses in the future, they could prove difficult to integrate, disrupt our
business, or have an adverse effect on our results of operations.
We intend to pursue the growth of our business and from time to time consider opportunistic
acquisitions which may be significant. Any future acquisition would involve numerous risks including,
without limitation:
• potential disruption of our ongoing business and distraction of management;
• difficulty integrating the acquired business; and
• exposure to unknown liabilities, including litigation against the companies we may acquire.
If we make acquisitions in the future, acquisition-related accounting charges may affect our balance
sheet and results of operations. In addition, the financing of any significant acquisition may result in
changes in our capital structure, including the incurrence of additional indebtedness. We may not be
successful in addressing these risks or any other problems encountered in connection with any
acquisitions.
We face risks related to changes in our ownership.
A substantial number of our airport concession agreements, as well as certain of our other agreements
with third parties, require the consent of the airports’ operators or other parties in connection with any
change in ownership of us. Changes in ownership of us could also require the approval of other
governmental authorities (including insurance regulators, regulators of our retail used car sales activities
38