Avis 2009 Annual Report Download - page 33

Table of Contents
including the Credentials Litigation (for a further description of the Credentials Litigation, see “Legal Proceedings”) and (iv) generally any
actions with respect to the Cendant Separation or the distributions brought by any third party. If either Realogy or Wyndham were to default in
its payment, when due, of any such Assumed Obligations, each non-defaulting party, including us, would be required to pay an equal portion of
the defaulted amounts, and any such default may adversely impact our results of operations, financial condition or cash flows.
Realogy was acquired by an affiliate of Apollo Management VI, L.P. following the Cendant Separation and is not listed as an independent public
company, but the acquisition did not affect Realogy’s obligation to satisfy its specified percentage of its Assumed Obligations. However, as a
result of the acquisition, Realogy has greater debt obligations and its ability to satisfy its portion of such Assumed Obligations may be adversely
impacted. In accordance with the terms of the Separation Agreement, Realogy posted a letter of credit for the benefit of the Company to cover its
estimated share of the Assumed Obligations, which is subject to adjustment from time to time, although there can be no assurance that such letter
of credit will be sufficient or effective to cover Realogy’s actual obligations if and when they arise. In addition, the Separation Agreement
effectively provides Realogy with the right to control the process for resolving disputes related to many of the Assumed Obligations.
Moreover, the Separation Agreement provides for cross-indemnities designed to place financial responsibility of certain liabilities and other
obligations with the proper company. For example, Realogy, Wyndham Worldwide and/or Travelport are required to indemnify us in respect of
certain effective guarantees that result from either us or one of our subsidiaries remaining a named lessee on real estate leases pertaining to
properties occupied by Realogy, Wyndham and/or Travelport. Any failure by Realogy, Wyndham Worldwide or Travelport to pay any of their
assumed liabilities when due or to indemnify us when required may adversely impact our results of operations, financial condition or cash flows.
Risks related to our common stock
The market price of our shares may fluctuate widely.
During 2009, the market price for our common stock experienced substantial volatility. We cannot predict the prices at which our common stock
will trade. The market price of our common stock may fluctuate widely, depending upon many factors, some of which may be beyond our
control, including:
Shareholders
’ percentage ownership may be diluted in the future.
Shareholders’ percentage ownership may be diluted in the future because of equity issuances, conversion of our convertible senior notes due
2014, exercise of the warrants we issued in 2009 or equity awards that we granted or
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•
our quarterly or annual earnings, or those of other companies in our industry, including our suppliers;
•
actual or anticipated fluctuations in our operating results;
•
changes in accounting standards, policies, guidance, interpretations or principles;
•
announcements by us or our competitors of acquisitions or dispositions;
•
changes in earnings estimates by securities analysts or our ability to meet those estimates;
•
changes in investors
’
and analysts
’
perceptions of our industry, business or related industries;
•
the operating and stock price performance of other comparable companies;
•
overall market fluctuations; and
•
general economic conditions and conditions in the credit markets.