Hertz 2012 Annual Report Download - page 50

ITEM 1. BUSINESS (Continued)
honor reservations, the terms on which we deal with vehicle loss or damage (including the protections
we provide to renters purchasing loss or damage waivers) and the terms and method of sale of the
optional insurance coverage that we offer. Some states (including California, New York, Nevada and
Illinois) regulate the price at which we may sell loss or damage waivers, and many state insurance
regulators have authority over the prices and terms of the optional insurance coverage we offer. See
‘‘—Risk Management’’ above for further discussion regarding the loss or damage waivers and optional
insurance coverages that we offer renters. Internationally, regulatory regimes vary greatly by jurisdiction,
but they do not generally prevent us from dealing with customers in a manner similar to that employed in
the United States.
Both in the United States and internationally, we are subject to increasing regulation relating to customer
privacy and data protection. In general, we are limited in the uses to which we may put data that we
collect about renters, including the circumstances in which we may communicate with them. In addition,
we are generally obligated to take reasonable steps to protect customer data while it is in our
possession. Our failure to do so could subject us to substantial legal liability or seriously damage our
reputation.
Changes in Regulation
Changes in government regulation of our businesses have the potential to materially alter our business
practices, or our profitability. Depending on the jurisdiction, those changes may come about through
new legislation, the issuance of new laws and regulations or changes in the interpretation of existing
laws and regulations by a court, regulatory body or governmental official. Sometimes those changes
may have not just prospective but also retroactive effect; this is particularly true when a change is made
through reinterpretation of laws or regulations that have been in effect for some time. Moreover, changes
in regulation that may seem neutral on their face may have either more or less impact on us than on our
competitors, depending on the circumstances. Several U.S. State Attorneys General have taken the
position that car rental companies either may not pass through to customers, by means of separate
charges, expenses such as vehicle licensing and concession fees or may do so only in certain limited
circumstances. Recent or potential changes in law or regulation that affect us relate to insurance
intermediaries, customer privacy and data security and rate regulation, each as described under
‘‘Item 1A—Risk Factors’’ in this Annual Report.
In addition, our operations, as well as those of our competitors, also could be affected by any limitation in
the fuel supply or by any imposition of mandatory allocation or rationing regulations. We are not aware of
any current proposal to impose such a regime in the United States or internationally. Such a regime
could, however, be quickly imposed if there were a serious disruption in supply for any reason, including
an act of war, terrorist incident or other problem affecting petroleum supply, refining, distribution or
pricing.
Disclosure under Section 13(r) of the Exchange Act
Under Section 13(r) of the Exchange Act as added by the Iran Threat Reduction and Syrian Human
Rights Act of 2012, we are required to include certain disclosures in our periodic reports if we or any of
our ‘‘affiliates’’ (as defined in Rule 12b-2 thereunder) knowingly engage in certain activities specified in
Section 13(r) during the period covered by the report. Hertz Holdings and Hertz do not conduct any
business activities in Iran. But because the SEC defines the term ‘‘affiliate’’ broadly, it includes any entity
that controls us or is under common control with us (‘‘control’’ is also construed broadly by the SEC),
which includes our Sponsors. Our affiliate, CD&R, has informed us that an indirect subsidiary of
SPIE S.A., or ‘‘SPIE,’’ an affiliate of CD&R based in France, maintained bank accounts during 2012 at
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