Hertz 2014 Annual Report Download - page 37

Table of Contents


                 
                  

We are subject to securities class action litigation relating to our previous public disclosures. In addition, the New York Regional Office of the SEC
and a state securities regulator are currently investigating the events disclosed in certain of our filings with the SEC. For additional discussion of
these matters, see Note 14, "Contingencies and Off-Balance Sheet Commitments," to the Notes to our consolidated financial statements included
in this Annual Report under the caption “Item 8-Financial Statements and Supplementary Data.” We could also become subject to private litigation
or investigations, or one or more government enforcement actions, arising out of the misstatements in our previously issued financial statements.
Our management may be required to devote significant time and attention to these matters, and these and any additional matters that arise could
have a material adverse impact on our results of operations, financial condition, liquidity and cash flows. While we cannot estimate our potential
exposure in these matters at this time, we have already expended significant amounts investigating the claims underlying and defending this
litigation and expect to continue to need to expend significant amounts to defend this litigation.
                  

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 and operations 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.
                 

In March 2014, we announced our intention to separate our car and equipment rental businesses into two independent, publicly traded companies.
This separation has been delayed by our thorough review of our historical financial statements and other unanticipated developments could result
in further delays. Completing the separation will require significant time, resources and attention from management, which could distract
management from the operation of our business and the execution of our other initiatives and we cannot assure you that we will be able to
complete the separation. If we are unable to complete the separation, we will have incurred costs without realizing the benefits of such transaction
and if we complete the separation, such transaction may not achieve the intended results. Our employees may also be distracted due to
uncertainty about their future roles pending the completion of the separation. Any such difficulties could have a material adverse effect on our
financial condition, results of operations or cash flows.
                   

We are continuing our efforts to combine and integrate our Hertz and Dollar Thrifty businesses in an efficient and effective manner. Integration
efforts between the two companies have taken longer than expected and we are continuing to integrate the computer systems and fleets of the two
companies. These ongoing efforts may continue to divert management attention and resources. It is possible that the overall integration process
could result in the loss of key employees, the disruption of business or inconsistencies in standards, controls, procedures and policies that
adversely affect our ability to maintain relationships with customers, employees, suppliers, lenders and franchisees or to achieve the anticipated
benefits of the acquisition. Any further delays encountered in the integration process could have an adverse effect upon our revenues, level of
expenses and operating results. In addition, the integration may result in additional and unforeseen expenses, and the anticipated benefits of the
overall integration plan may not be realized. Actual synergies, if achieved at all, may be lower than what we expect and may take longer to achieve
than anticipated.
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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