Thrifty Car Rental 2008 Annual Report Download - page 25

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Outsourcing Arrangements
We have an agreement with EDS to handle the majority of our IT services. If EDS fails to meet our
required IT needs due to a lack of technical ability or financial condition or otherwise, we may suffer a loss
of business functionality and productivity, which would adversely affect our results. Additionally, if there is
a disruption in our relationship with EDS, we may not be able to secure another IT supplier to adequately
meet our IT needs on acceptable terms, which could result in performance issues and a significant
increase in costs.
We have an agreement with PRC to handle a portion of the calls to reserve a car for rental on a future
date and to answer questions or handle issues while the renter has our car. If PRC fails to meet our
required reservation needs due to lack of qualified personnel or financial condition or otherwise, we may
suffer a loss of business which would adversely affect our results. Additionally, if there is a disruption in
our relationship with PRC, we may not be able to secure another supplier to adequately meet our
reservation needs on acceptable terms, which could result in loss of customers and a decrease in
revenues.
Communication Networks and Centralized Information Systems
We heavily rely on information systems to conduct our business specifically in the areas of reservations,
rental transaction processing, fleet management and accounting. We have centralized information
systems in disaster resistant facilities maintained by EDS in Tulsa, Oklahoma and we rely on
communication service providers to link our system with the business locations these systems serve. A
failure of a major system, or a major disruption of communications between the system and the locations
it serves, could cause a loss of reservations, slow the rental transaction processing, interfere with our
ability to manage our fleet and otherwise materially adversely affect our ability to manage our business
effectively. Our systems back-up plans, continuity plans and insurance programs are designed to
mitigate such a risk, but not to eliminate it.
Our systems contain personal information about our customers, our failure to maintain the security of the
data we hold, whether the result of our own error or that of others, could harm our reputation or give rise
to legal liabilities resulting in a material adverse effect on our results of operations or cash flows.
Potential for Impairment of Long-Lived Assets
A significant decline in operations on both an individual location and overall company basis could indicate
that certain long-lived assets are impaired. We will continue to test our long-lived assets for potential
impairment and may be required to write down a portion or all of the remaining long-lived assets,
comprising property and equipment and software totaling approximately $135 million.
Stock Price Fluctuation
We cannot predict the prices at which our common stock will trade. The market price of our common
stock may fluctuate widely, depending upon numerous factors, many of which are beyond our control.
These factors include but are not limited to: our quarterly or annual earnings or others in the rental car
industry; actual or anticipated fluctuations in our operating results; announcements by us or our
competitors of significant acquisitions or dispositions; changes in earnings estimates by analysts or our
ability to meet those estimates; changes in accounting standards, principles or interpretations; overall
market fluctuations and general economic conditions. Stock markets in general have experienced
volatility. These broad fluctuations may adversely affect the trading price of our common stock.
In December 2008, our market capitalization was less than the minimum $25 million required for
continued listing of our common stock on the NYSE; however, due to recent volatile market conditions,
the NYSE temporarily reduced the minimum market capitalization requirement to $15 million through April
22, 2009 and has recently determined to extend this period, subject to SEC approval. Because of the
significant volatility in our stock price, we cannot predict whether we will be able to maintain the required
minimum market capitalization. If we are unable to do so, or we fail to meet any other listing condition,
particularly those that depend on market prices, the NYSE could commence delisting procedures with
respect to our common stock.
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