Hertz 2012 Annual Report Download - page 57

ITEM 1A. RISK FACTORS (Continued)
Maintaining favorable brand recognition is essential to our success, and failure to do so could
materially adversely affect our results of operations.
While our ‘‘Hertz’’, ‘‘Dollar’’ and ‘‘Thrifty’’ brand names have substantial brand recognition in the markets
in which they participate, factors affecting brand recognition are often outside our control, and our efforts
to maintain or enhance favorable brand recognition, such as marketing and advertising campaigns, may
not have their desired effects. In addition, although our licensing partners are subject to contractual
requirements to protect our brands, it may be difficult to monitor or enforce such requirements,
particularly in foreign jurisdictions. Any decline in perceived favorable recognition of our brands could
materially adversely affect our results of operations.
Our business operations could be significantly disrupted if we were to lose the services of
members of our senior management team.
Our senior management team has extensive industry experience, and our success significantly depends
upon the continued contributions of that team. If we were to lose the services of any one or more
members of our senior management team, whether due to death, disability or termination of
employment, our ability to successfully implement our business strategy, financial plans, marketing and
other objectives, could be significantly impaired.
We may pursue strategic transactions which could be difficult to implement, disrupt our business
or change our business profile significantly.
Any future strategic acquisition or disposition of assets or a business could involve numerous risks,
including: (i) potential disruption of our ongoing business and distraction of management; (ii) difficulty
integrating the acquired business or segregating assets to be disposed of; (iii) exposure to unknown,
contingent or other liabilities, including litigation arising in connection with the acquisition or disposition
or against any business we may acquire; (iv) changing our business profile in ways that could have
unintended negative consequences; and (v) the failure to achieve anticipated synergies.
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.
As a result of Hertz Holdings’ completion of the acquisition of Dollar Thrifty, we are subject to the risks
and uncertainties associated with Dollar Thrifty’s business, and we have incurred a substantial amount
of additional indebtedness. See ‘‘—Risks Related to Acquisition of Dollar Thrifty.’’
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
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