Hertz 2009 Annual Report Download - page 53

ITEM 1A. RISK FACTORS (Continued)
our business. While our reliance on this technology lowers our cost of providing service and expands our
service capabilities, it exposes us to various risks that could cause a loss of reservations, interfere with
our ability to manage our fleet, slow rental and sales processes and otherwise materially adversely affect
our ability to manage our business effectively. While our systems back-up plans, business continuity
plans and insurance programs are designed to mitigate such a risk, they do not eliminate it. In addition,
for any of these key business processes which we outsource, the outsourcing service providers would
likely be subject to similar risks. Any disruption, termination, or substandard provision of these services
could adversely affect our brand, customer relationships, operating results and financial condition.
The concentration of our reservations, accounting and information technology functions at a
limited number of facilities creates risks for us.
We have centralized our reservations function for the United States in one facility in Oklahoma City,
Oklahoma, and we have concentrated our accounting functions for the United States in two facilities in
Oklahoma City. Our reservations and accounting functions for our European operations are similarly
centralized in a single facility near Dublin, Ireland. In addition, our major information technology systems
are centralized in two of our facilities in Oklahoma City. A disruption of normal business at any of our
principal facilities in Oklahoma City or Dublin, whether as the result of localized conditions (such as a fire
or explosion) or as the result of events or circumstances of broader geographic impact (such as an
earthquake, storm, flood, epidemic, strike, act of war, civil unrest or terrorist act), could materially
adversely affect our business by disrupting normal reservations, customer service, accounting and
systems activities. If we outsource key business processes in the future, the outsourcing service
providers may concentrate their activities on our behalf at a small number of locations, entailing similar
or potentially greater risks. There can be no assurance that our systems designs, business continuity
plans and insurance programs will be able to successfully mitigate or eliminate these risks, and this is
particularly true with respect to events of broad geographic impact.
The misuse or theft of information we possess could harm our brand, reputation or competitive
position and give rise to material liabilities.
Because we regularly possess, store and handle non-public information about millions of individuals
and businesses, our failure to maintain the security of the data we hold, whether as the result of our own
error or the malfeasance or errors of others, could harm our reputation and give rise to a host of liabilities.
Any such liabilities could lead to lower revenues, increased costs and other material adverse effects on
our results of operations. 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 etc., any misuse or theft of information could also result in governmental investigations and
material civil or criminal liability. The laws that would be applicable to such a failure are rapidly evolving,
but are generally becoming more burdensome. See ‘‘—Changes in the U.S. and foreign legal and
regulatory environment that affect our operations, including laws and regulations relating to the
insurance products we sell, consumer privacy, data security, employment matters, taxes, automobile-
related liability and insurance rates, could disrupt our business, increase our expenses or otherwise
have an adverse impact on our results of operations.’’
Maintaining favorable brand recognition is essential to our success, and failure to do so could
materially and adversely affect our results of operations.
Favorable brand recognition is important to our future success. While our Hertz brand name is one of the
most recognized in the world, factors affecting brand recognition are often outside our control, and our
efforts to maintain or enhance favorable brand recognition, such as making significant investments in
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