Hertz 2008 Annual Report Download - page 62

ITEM 1A. RISK FACTORS (Continued)
If we make acquisitions in the future, acquisition-related accounting charges may affect our financial
condition 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
and antitrust regulators), and we cannot offer assurance that those approvals would be obtained on
terms acceptable to us. If our owners were to proceed to change their ownership of us without obtaining
necessary approvals, or if significant conditions on our operations were imposed in connection with
obtaining such approvals, our ability to conduct our business could be impaired, resulting in a material
adverse effect on our results of operations and financial condition. In September 2008, Bank of America
announced it was acquiring Merrill Lynch & Co., the parent company of Merrill Lynch Global Private
Equity. This transaction closed on January 1, 2009. Accordingly, Bank of America is now an indirect
beneficial owner of our common stock held by Merrill Lynch Global Private Equity and certain of its
affiliates. See ‘‘—The Sponsors currently control us and may have conflicts of interest with us in the
future.’’
We face risks related to liabilities and insurance.
Our businesses expose us to claims for personal injury, death and property damage resulting from the
use of the cars and equipment rented or sold by us and for workers’ compensation claims and other
employment-related claims by our employees. Currently, we generally self-insure up to $10 million per
occurrence in the United States and Europe for vehicle and general liability exposures and maintain
insurance with unaffiliated carriers in excess of such levels up to $200 million per occurrence for the
current policy year, or in the case of equipment rental in Europe and international operations outside of
Europe, in such lower amounts as we deem adequate given the risks. We cannot assure you that we will
not be exposed to uninsured liability at levels in excess of our historical levels resulting from multiple
payouts or otherwise, that liabilities in respect of existing or future claims will not exceed the level of our
insurance, that we will have sufficient capital available to pay any uninsured claims or that insurance with
unaffiliated carriers will continue to be available to us on economically reasonable terms or at all. See
‘‘Item 1—Business—Risk Management’’ and ‘‘Item 3—Legal Proceedings.’’
We could face significant withdrawal liability if we withdraw from participation in one or more
multiemployer pension plans in which we participate.
We participate in various ‘‘multiemployer’’ pension plans administered by labor unions representing
some of our employees. We make periodic contributions to these plans to allow them to meet their
pension benefit obligations to their participants. In the event that we withdraw from participation in one of
these plans, then applicable law could require us to make an additional lump-sum contribution to the
plan, and we would have to reflect that as an expense in our consolidated statement of operations and as
a liability on our consolidated balance sheet. Our withdrawal liability for any multiemployer plan would
depend on the extent of the plan’s funding of vested benefits. In the ordinary course of our renegotiation
of collective bargaining agreements with labor unions that maintain these plans, we may decide to
discontinue participation in a plan, and in that event, we could face a withdrawal liability. Some
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