Avis 2010 Annual Report Download - page 26

Table of Contents
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.
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.
We face risks related to our locations.
We lease or have vehicle rental concessions for both the Avis and Budget brands at locations throughout the world, including at airports both in
the United States and internationally where vehicle rental companies are frequently required to bid periodically for the available locations. If we
were to lose any lease or vehicle rental concession, particularly at an airport in a major metropolitan area, there can be no assurance that we
would be able to find a suitable replacement on reasonable terms or at all and our business could be adversely affected.
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.
Changes in the U.S. and foreign legal and regulatory environment that affect our operations, including laws and regulations relating to the
environment, insurance products we sell, consumer privacy, data security, employment matters, taxes, automobile-related liability and
insurance rates, could disrupt our business, increase our expenses or otherwise have an adverse impact on our results of operations.
We are subject to a wide variety of laws and regulations in the United States and the other countries and 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, financial position and
results of operations. Depending on the jurisdiction, those changes may come about through 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.
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