Avis 2010 Annual Report Download - page 28

Table of Contents
Any failure by us to protect confidential information of our customers against security breaches could damage our reputation and
substantially harm our business and results of operations.
Third parties may have the technology or expertise to breach the security of our customer transaction data and our security measures may not
prevent such breaches, which could result in substantial harm to our business and results of operations and damage to our reputation. We rely on
encryption and/or authentication technology licensed from third parties to effect secure transmission of confidential information, including credit
card numbers. Advances in computer capabilities, new discoveries in the field of cryptography, or other developments may result in a
compromise or breach of the technology we use to protect customer transaction data. In addition, anyone who is able to circumvent our security
measures could misappropriate proprietary information or cause interruptions in our operations. Any such compromise of our security could
damage our reputation and brand and expose us to a risk of loss or litigation and possible liability, which would substantially harm our business
and results of operations.
In addition, the PCI imposes strict customer credit card data security standards to ensure that our customers’ credit card information is protected.
Failure to meet the PCI data security standards could result in substantial increased fees to credit card companies, other liabilities and/or loss of
the right to collect credit card payments, which could adversely impact operations. Failure to protect customer credit card and other information
can also result in governmental investigations or material civil or criminal liability.
We face risks associated with our like-kind exchange program.
We utilize a like-kind exchange program whereby we replace vehicles in a manner that allows tax gains on disposed vehicles to be deferred. The
program has resulted in a material deferral of federal and state income taxes beginning in 2004. The benefit of deferral is dependent on
reinvestment of vehicle disposition proceeds in replacement vehicles within a prescribed period of time (usually six months). An extended
downsizing of our fleet could result in reduced deferrals, utilization of tax attributes and increased payment of federal and state income taxes,
which could require us to make material cash payments. Such a downsizing or reduction in purchases would likely occur if, and to the extent, we
are unable to obtain financing when our asset backed rental car financings mature and could also occur in connection with a significant decrease
in demand for vehicle rentals. Therefore, we cannot offer assurance that the expected tax deferral will continue or that the relevant law
concerning the program will remain in its current form.
Risks related to our potential acquisition of Dollar Thrifty and other potential acquisitions or investments
There are risks associated with our potential acquisition of Dollar Thrifty.
In addition to the risks we face in connection with acquisitions and indebtedness generally as described herein, we face risks associated with the
proposed acquisition of Dollar Thrifty, each of which may have an adverse impact on our business, financial condition, operating results and
prospects. Such risks include: our level of indebtedness and/or our cost of indebtedness following an acquisition of Dollar Thrifty will be higher
than our existing indebtedness and/or cost of indebtedness and may subject us to additional restrictive covenants; any issuance of our shares in
such an acquisition will result in dilution to our existing stockholders; our credit ratings may be adversely affected, which may impact the cost of
future borrowings; the potential need for approval by Dollar Thrifty’s shareholders may delay, prevent or otherwise adversely impact an
acquisition of Dollar Thrifty; the market price of our common stock or other securities may decline as a result of a proposed or actual acquisition
of Dollar Thrifty; costs associated with a proposed or actual acquisition of Dollar Thrifty, including potential liability for termination fees; and a
proposed or actual acquisition of Dollar Thrifty, or our failure to complete such an acquisition, may result in our being subject to unknown
liabilities and litigation, including pending or future litigation involving the sale of Dollar Thrifty.
There can be no assurance as to the timing or outcome of the efforts to secure antitrust clearance for the proposed acquisition of Dollar Thrifty,
that any agreement with respect to a transaction will be reached, or as to the timing or terms thereof.
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