Hertz 2011 Annual Report Download - page 59

ITEM 1A. RISK FACTORS (Continued)
costs, which could have a material adverse effect on our financial position, results of operations, liquidity
and cash flows.
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.
Hertz Holdings is a party to an amended and restated stockholders’ agreement (the ‘‘Stockholders’
Agreement’’) among it and investment funds associated with or designated by the Sponsors. Investment
funds associated with or designated by the Sponsors currently beneficially own, in the aggregate,
approximately 38% of the outstanding shares of our common stock. Pursuant to the Stockholders’
Agreement, each of the funds has agreed to vote in favor of the other funds’ nominees to our Board of
Directors. The Sponsors currently exercise, and will continue to exercise, significant influence over our
Board of Directors and matters requiring stockholder approval and our management, policies and affairs
for so long as the investment funds associated with or designated by the Sponsors continue to hold a
significant amount of our common stock. There can be no assurance that the interests of the Sponsors
will not conflict with those of our other stockholders. The Sponsors currently have the ability to
significantly influence the vote on any transaction that requires the approval of stockholders, including
many possible change in control transactions, and may discourage or prevent any such transaction
regardless of whether or not our other stockholders believe that such a transaction is in our or their own
best interests.
Additionally, the Sponsors may from time to time acquire and hold interests in businesses that compete
directly with us. One or more of the Sponsors may also pursue acquisition opportunities and other
corporate opportunities that may be complementary to our business and as a result, those opportunities
may not be available to us.
If we consummate a merger with Dollar Thrifty, we may encounter unexpected difficulties or fail to
realize all of the anticipated benefits of the merger.
We continue to believe that a merger with Dollar Thrifty is in the best interests of both companies. There
is no assurance that if a merger is consummated, we would be able to integrate the operations of Dollar
Thrifty without encountering unexpected difficulties and that we would obtain the anticipated benefits of
a merger. Under those circumstances, we may not be able to generate sufficient cash flow to make all of
the principal and interest payments under any indebtedness we incurred to consummate the merger
and our financial condition, liquidity and results of operations could be adversely affected.
Risks Related to Our Substantial Indebtedness
Our substantial level of indebtedness could materially adversely affect our results of operations,
cash flows, liquidity and ability to compete in our industry.
As of December 31, 2011, we had debt outstanding of $11,317.1 million. Our substantial indebtedness
could materially adversely affect us. For example, it could: (i) make it more difficult for us to satisfy our
obligations to the holders of our outstanding debt securities and to the lenders under our various credit
facilities, resulting in possible defaults on, and acceleration of, such indebtedness; (ii) be difficult to
refinance or borrow additional funds in the future; (iii) require us to dedicate a substantial portion of our
cash flows from operations and investing activities to make payments on our debt, which would reduce
our ability to fund working capital, capital expenditures or other general corporate purposes;
(iv) increase our vulnerability to general adverse economic and industry conditions (such as credit-
related disruptions); including interest rate fluctuations, because a portion of our borrowings are at
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