Hertz 2014 Annual Report Download - page 34

Table of Contents


   

We rely heavily on communication networks and information technology systems to accept reservations, process rental and sales transactions,
manage our pricing, 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, adversely affect our ability to comply with our financing arrangements and
otherwise materially adversely affect our ability to manage our business effectively. Our major information technology systems, reservations and
accounting functions are centralized in a few locations worldwide. Any disruption, termination or substandard provision of these services, whether
as the result of localized conditions (such as a fire, explosion or hacking), failure of our systems to function as designed, 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. Any disruption or poor performance of our systems could lead to lower revenues,
increased costs or other material adverse effects on our results of operations.

We are continuously upgrading and consolidating our systems, including making changes to legacy systems, replacing legacy systems with
successor systems with new functionality and acquiring new systems with new functionality. In particular, we currently have a material weakness
in our internal control due, in part, to the weakness in our accounting system. We are also continuing to integrate Dollar Thrifty’s legacy systems,
which has taken us longer, and cost us more, than initially expected. These types of activities subject us to additional costs and inherent risks
associated with replacing and changing these systems, including impairment of our ability to manage our business, potential disruption of our
internal control structure, substantial capital expenditures, additional administration and operating expenses, retention of sufficiently skilled
personnel to implement and operate the new systems, demands on management time, and other risks and costs of delays or difficulties in
transitioning to new systems or of integrating new systems into our current systems. Our system implementations may not result in productivity
improvements at a level that outweighs the costs of implementation, or at all. In addition, the implementation of new technology systems may
cause disruptions in our business operations and have an adverse effect on our business and operations, if not anticipated and appropriately
mitigated and our competitive position may be adversely affected if we are unable to maintain systems that allow us to manage our business in a
competitive manner.
                     

We regularly possess, store and handle non-public information about millions of individuals and businesses, including both credit and debit card
information and other sensitive and confidential personal information. In addition, our customers regularly transmit confidential information to us via
the internet and through other electronic means. Despite the security measures we currently have in place, our facilities and systems and those of
our third-party service providers may contain defects in design or manufacture or other problems that could unexpectedly compromise information
security. Unauthorized parties may also attempt to gain access to our systems or facilities, or those of third parties with whom we do business,
through fraud, trickery, or other forms of deception of our employees or contractors. Many of the techniques used to obtain unauthorized access,
including viruses, worms and other malicious software programs, are difficult to anticipate until launched against a target and we may be unable to
implement adequate preventative measures. 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, interrupt our operations, 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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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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