Hertz 2010 Annual Report Download - page 55

ITEM 1A. RISK FACTORS (Continued)
gas emissions or rules imposing fees on entities deemed to be responsible for greenhouse gas
emissions become effective, demand for our services could be affected, our fleet and/or other costs
could increase, and our business could be adversely affected.
Changes in the U.S. legal and regulatory environment that affect our operations, including laws
and regulations relating to taxes, automobile-related liability, insurance rates, insurance products,
consumer privacy, data security, employment matters and cost and fee recovery, could disrupt our
business, increase our expenses or otherwise have a material adverse effect on our results of
operations.
We are subject to a wide variety of U.S. laws and regulations and changes in the level of government
regulation of our business have the potential to materially alter our business practices and materially
adversely affect our financial position and results of operations, including our profitability. Those
changes may come about through new laws and regulations or changes in the interpretation of existing
laws and regulations.
Any new, or change in existing, U.S. law and regulation with respect to optional insurance products or
policies could increase our costs of compliance or make it uneconomical to offer such products, which
would lead to a reduction in revenue and profitability. See ‘‘Item 1—Business—Risk Management’’ in
this Annual Report for further discussion regarding how changes in the regulation of insurance
intermediaries may affect us. If customers decline to purchase supplemental liability insurance products
from us as a result of any changes in these laws or otherwise, our results of operations could be
materially adversely affected.
Changes in the U.S. legal and regulatory environment in the areas of customer privacy, data security and
cross-border data flow could have a material adverse effect on our business, primarily through the
impairment of our marketing and transaction processing activities, and the resulting costs of complying
with such legal and regulatory requirements. It is also possible that we could face significant liability for
failing to comply with any such requirements.
In most places where we operate, we pass through various expenses, including the recovery of vehicle
licensing costs and airport concession fees, to our rental customers as separate charges. We believe
that our expense pass-throughs, where imposed, are properly disclosed and are lawful. However, we
may in the future be subject to potential legislative, regulatory or administrative changes or actions
which could limit, restrict or prohibit our ability to separately state, charge and recover vehicle licensing
costs and airport concession fees, which could result in a material adverse effect on our results of
operations.
Certain new or proposed laws and regulations with respect to the banking and finance industries,
including the Dodd-Frank Wall Street Reform and Consumer Protection Act and amendments to
Regulation AB, could restrict our access to certain financing arrangements and increase our financing
costs, which could have a material adverse effect on our financial position and results of operations.
Investment funds associated with or designated by the Sponsors will continue to exercise
significant control over our board of directors, management, policies and significant transactions,
and may have interests that differ from our other stockholders.
Investment funds associated with or designated by the Sponsors currently beneficially own, in the
aggregate, a majority of the outstanding shares of our common stock. These funds are party to a
stockholders agreement pursuant to which each of the funds has agreed to vote in favor of the other
funds’ nominees to our board of directors. Therefore, the Sponsors control our board of directors and as
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