Avis 2008 Annual Report Download - page 26

Acquisitions of existing Avis or Budget franchisees, or other businesses, could have an adverse impact on our results of operations.
We have acquired or may acquire existing franchisees and have invested in and may invest in other businesses. These acquisitions may involve
numerous risks, including those associated with integrating operations, technology and personnel into our business, potential disruption of our
ongoing business and distraction of management, and exposure to existing as well as unknown liabilities, including litigation involving the
acquired entity. Such acquisitions may not be accretive to our earnings and may negatively impact our financial condition and results of
operations.
We face risks arising from our heavy reliance on communications networks and centralized information systems.
We rely heavily on information systems, including our reservation system, to accept reservations, process rental and sales transactions, manage
our fleet of vehicles, account for our activities and otherwise conduct our business. We have centralized our information systems, and we rely on
communications service providers to link our systems 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, interfere with our ability to
manage our fleet, slow rental and sales processes, and otherwise adversely affect our ability to manage our business effectively. Our systems’
business continuity plans and insurance programs seek to mitigate such a risk, not eliminate it.
In addition, because our systems contain non-public personally identifiable information about millions of individuals and businesses, our failure
to maintain the security of the data we hold, whether as a result of our own error or the actions of others, could harm our reputation, give rise to
legal liabilities leading to lower revenue and increased costs or otherwise adversely impact our reputation, financial condition and results of
operations.
We face risks related to liability and insurance.
Our businesses expose us to claims for personal injury, death and property damage related to the use of our vehicles and for workers’
compensation claims and other employment-related claims by our employees. We may become exposed to uninsured liability at levels in excess
of our historical levels resulting from unusually high losses or otherwise. In addition, liabilities in respect of existing or future claims may
exceed the level of our reserves and/or our insurance, which could adversely impact our financial condition and results of operations.
Furthermore, insurance with unaffiliated carriers may not continue to be available to us on economically reasonable terms or at all.
Environmental regulations could subject us to liability for fines or damages.
We are subject to federal, state, local and foreign environmental laws and regulations in connection with our operations, including, among other
things, with respect to the ownership and operation of tanks for the storage of petroleum products, such as gasoline, diesel fuel and motor and
waste oils. We have established a compliance program for our tank systems that is intended to ensure that the tanks are properly registered with
the state or other jurisdiction in which the tanks are located and have been either replaced or upgraded to meet applicable leak detection and spill,
overfill, corrosion protection and vapor recovery requirements. These tank systems may not at all times remain free from undetected leaks, and
the use of these tanks may result in significant spills, which may expose us to material liabilities.
We have made, and will continue to make, expenditures to comply with environmental laws and regulations, including, among others,
expenditures for the cleanup of contamination at our owned and leased properties, as well as contamination at other locations at which our
wastes have reportedly been identified. Our compliance with existing or future environmental laws and regulations may, however, require
material expenditures by us or otherwise have an adverse impact on our financial position, results of operations and cash flows.
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