Hertz 2013 Annual Report Download - page 29

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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.
Our business operations are dependent upon the continued service and performance of our key employees.
Our success significantly depends upon the continued contributions of our key employees, including the members of our senior
management team who have extensive industry experience. If we were to lose the services of any one or more key employees, 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. In addition, our key employees may be distracted by activities unrelated to our business,
including the relocation of our corporate headquarters from Park Ridge, New Jersey to Estero, Florida. The loss of the services, or distraction,
of our key employees for any reason could adversely affect our business, operating results and financial condition.
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.’’ In addition, in March 2014 we announced the potential separation of HERC, which could subject us to the risks and
uncertainties described herein.
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 the sections entitled ‘‘Business—Risk
Management’’ and ‘‘Legal Proceedings’’ in this Annual Report.
We could face a 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 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. 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
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Source: HERTZ CORP, 10-K, March 31, 2014 Powered by Morningstar® Document Research℠
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