Thrifty Car Rental 2009 Annual Report Download - page 23

disclose the existence of these surcharges to customers together with an estimated total price, inclusive
of these surcharges, in all distribution channels. This standard practice complies with the Federal Trade
Commission Act and has been upheld by several courts. However, there are several legislative proposals
in certain states that, if enacted, would define which surcharges are permissible and establish calculation
formulas that may differ from the manner in which we set our surcharges.
Enactment of any of these proposals could restrict our ability to recover all of the surcharges we
currently charge and may have a material adverse impact on our results of operations.
Laws and Regulations
We are subject to a wide variety of laws and regulations in the U.S. and Canada and other
jurisdictions in which we operate, and changes in the level of government regulation of our business have
the potential to materially alter our business practices and adversely affect our financial position and
results of operations, including our profitability. Depending on the jurisdiction, those changes may come
about through new legislation, the issuance of new laws and regulations or changes in the interpretation
of existing laws and regulations by a court, regulatory body or governmental official.
Optional insurance products, including supplemental liability insurance, personal accident
insurance and personal effects protection, we offer to renters providing various insurance coverages in
our domestic vehicle rental operations are regulated under state laws governing the licensing of such
products. Any changes in U.S. or foreign law that change our operating requirements with respect to
optional insurance products could increase our costs of compliance or make it uneconomical to offer such
products, which would lead to a reduction in revenue. As a result of any changes in these laws or
otherwise, if customers decline to purchase supplemental liability insurance products through us, our
results of operations could be materially adversely affected.
The U.S. Congress and other legislative and regulatory authorities in the U.S. and internationally
have considered, and will likely continue to consider, numerous measures related to climate change and
greenhouse gas emissions. Should rules establishing limitations on greenhouse gas emissions or rules
imposing fees on entities deemed to be responsible for greenhouse gas emissions become effective,
demand for car rental services could be affected, or our vehicle costs and/or other costs could increase
and our business could be adversely affected.
Fuel Costs
Prices for petroleum-based products, including gasoline, have experienced significant volatility in
recent periods and affected automotive travel patterns in material ways. A variety of factors, including the
current economic environment and geopolitical unrest in oil-producing nations, could cause further price
volatility. Limitations in fuel supplies or significant increases in fuel prices could have an adverse effect on
our financial condition, results of operations and cash flows, either by directly discouraging customers
from renting cars, causing a decline in airline passenger traffic, or increasing our operating costs, if these
increased costs cannot be passed through to our customers.
Dependence on Third-Party Internet Sales
The Internet has had a significant impact on the way travel companies get reservations. For 2009
and 2008, we received 78% and 76% of our non-tour reservations from the Internet, respectively, with
46% and 44%, respectively, coming from our own Internet Web sites, dollar.com and thrifty.com. The
remaining portion of non-tour reservations derived from the Internet were provided by third-party sites
with two third-party sites each providing approximately 11% of non-tour reservations and the remainder
coming from various smaller sites. Future changes in the way travel is sold over the Internet or changes
in our relationship with third-party Internet sites could result in reduced reservations from one or more of
these sites and less revenue.
Liability Insurance Risk
We are exposed to claims for personal injury, death and property damage resulting from
accidents involving our rental customers and the use of our cars. In 2008 and 2009, we maintained the
level of self-insurance of $5.0 million and $7.5 million, respectively, per occurrence for public liability and
property damage claims, including third-party bodily injury and property damage, and maintain the level of
self-insurance for general and garage liability of $5.0 million. We maintain insurance coverage for liability
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