Hertz 2012 Annual Report Download - page 56

ITEM 1A. RISK FACTORS (Continued)
materially adversely affect our results of operations, liquidity, cash flows and ability to diversify
internationally.
Manufacturer safety recalls could create risks to our business.
Our cars may be subject to safety recalls by their manufacturers. A recall may cause us to retrieve cars
from renters and decline to rent recalled cars until we can arrange for the steps described in the recall to
be taken. We could also face liability claims if a recall affects cars that we have sold. If a large number of
cars are the subject of a recall or if needed replacement parts are not in adequate supply, we may not be
able to rent recalled cars for a significant period of time. Those types of disruptions could jeopardize our
ability to fulfill existing contractual commitments or satisfy demand for our vehicles, and could also result
in the loss of business to our competitors. Depending on the severity of any recall, it could materially
adversely affect our revenues, create customer service problems, reduce the residual value of the
recalled cars and harm our general reputation.
Our business is heavily reliant upon communications networks and centralized information
technology systems and the concentration of our systems creates risks for us.
We rely heavily on communication networks and information technology systems to accept
reservations, process rental and sales transactions, manage our fleets of cars and equipment, manage
our financing arrangements, account for our activities and otherwise conduct our business. Our reliance
on these networks and systems 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, comply with our financing
arrangements and otherwise materially adversely affect our ability to manage our business effectively.
We have centralized our reservations function for the United States in two facilities in Mobile, Alabama
and 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 facilities in Oklahoma City. Our Dollar and Thrifty
brands’ centralized information systems are located in Tulsa, Oklahoma and our Dollar and Thrifty
brands rely on communication service providers to link their system with the business locations these
systems serve. Any disruption, termination or substandard provision of these services, 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 information technology functions or by eliminating access to
financing arrangements.
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 that data, whether as the result of our own error or
the malfeasance or errors of others, could harm our reputation, result in governmental investigations and
give rise to a host of civil or criminal liabilities. Any such failure could lead to lower revenues, increased
remediation, prevention and other costs and other material adverse effects on our results of operations.
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