Hertz 2011 Annual Report Download - page 57

ITEM 1A. RISK FACTORS (Continued)
If we enter into significant strategic transactions, the related accounting charges may affect our financial
condition and results of operations, particularly in the case of an acquisition. The financing of any
significant acquisition may result in changes in our capital structure, including the incurrence of
additional indebtedness. A material disposition could require the amendment or refinancing of our
outstanding indebtedness or a portion thereof.
If Hertz Holdings acquires Dollar Thrifty, we will be subject to the risks and uncertainties associated with
Dollar Thrifty’s business and we will incur substantial amounts of additional indebtedness.
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 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 we also 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 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’’ in this Annual Report.
We could face significant withdrawal liability if we withdraw from participation in one or more
multiemployer pension plans in which we participate and at least one multiemployer plan in which
we participate is reported to have significant underfunded liabilities.
We participate in various ‘‘multiemployer’’ pension plans. 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. At least one
multiemployer plan in which we participate is reported to have, and other of our multiemployer plans
could have, significant underfunded liabilities. Such underfunding may increase in the event other
employers become insolvent or withdraw from the applicable plan or upon the inability or failure of
withdrawing employers to pay their withdrawal liability. In addition, such underfunding may increase as a
result of lower than expected returns on pension fund assets or other funding deficiencies. The
occurrence of any of these events could have a material adverse effect on our consolidated financial
position, results of operations or cash flows. See Note 5 to the Notes to the consolidated financial
statements included in this Annual Report under the caption ‘‘Item 8—Financial Statements and
Supplementary Data.’’
Environmental laws and regulations and the costs of complying with them, or any liability or
obligation imposed under them, could materially adversely affect our financial position, results of
operations or cash flows.
We are subject to federal, state, local and foreign environmental laws and regulations in connection with
our operations, including with respect to the ownership and operation of tanks for the storage of
petroleum products, such as gasoline, diesel fuel and motor and waste oils. We cannot assure you that
our tanks will at all times remain free from leaks or that the use of these tanks will not result in significant
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