Herc Holdings (HRI) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01ITEM lA. RISK FACTORS (continued)
2. 02Our industry is highly competitive, and competitive pressures or not timely identifying and responding to customer needs, expectations or trends could lead to a decrease in our market share or in the prices that we can charge
3. 03We are dependent on our relationships with key suppliers to obtain equipment for our business
4. 04A widespread outbreak of an illness or any other communicable disease, or any other public health crisis, could adversely affect our business, results of operations and financial condition
5. 05Failure to maintain, upgrade or replace our IT systems could materially adversely affect us
6. 06We may fail to respond adequately to changes in technology and customer demands
7. 07We face intense competition, including from our own suppliers, that may lead to downward pricing or an inability to increase prices
8. 08Our success depends on our ability to attract and retain key management, sales and trades talent, while supporting the onboarding and career development of our team members
9. 09Due to seasonality, especially in the construction industry, any occurrence that disrupts rental activity during our peak periods could materially adversely affect our results of operations, liquidity and cash flows
10. 10Some or all of our deferred tax assets could expire if we experience an “ownership change” as defined in Section 382 of the Internal Revenue Code (the "Code")

Other Operational Risks

1. 11Any decline in our relationships with our key national account customers or the amount of equipment they rent from us could materially adversely affect our business, financial position, results of operations and cash flows
2. 12Our rental fleet is subject to residual value risk upon disposition and may not sell at the prices we expect
3. 13We incur maintenance and repair costs associated with our rental fleet that could have a material adverse effect on our financial condition, results of operations, liquidity and cash flows in the event these costs are greater than anticipated
4. 14We are exposed to a variety of claims and losses arising from our operations, and our insurance may not cover all or any portion of such claims
5. 15Environmental, health, and safety laws and regulations and the costs of complying with them, or any change to them impacting our markets, could materially adversely affect our financial position, results of operations and cash flows
6. 16Climate change and legal or regulatory responses thereto may have a long-term negative impact on our business and results of operations
7. 17Part of our strategy includes pursuing strategic transactions, which could be difficult to identify and implement, and could disrupt our business or change our business profile significantly
8. 18We may face issues with our union employees

Risks Related to the Spin-Off and Our Separation from New Hertz

1. 19We and New Hertz have assumed and will share responsibility for certain liabilities in connection with the Spin-Off, any of which could have a material adverse effect on our business, financial condition and results of operations
2. 20liabilities. If New Hertz fails to satisfy its performance and payment obligations under the separation and distribution agreement, including its indemnification obligations, such failure could have a material adverse effect on our business, financial condition, results of operations and cash flows

Risks Related to Our Significant Indebtedness

1. 21Our significant level of indebtedness exposes or makes us more vulnerable to a number of risks that could materially adversely affect our financial condition, results of operations, cash flows, liquidity and ability to compete
2. 22Substantially all of our consolidated assets secure certain of our indebtedness, which could materially adversely affect our business and holders of our debt and equity
3. 23The amount of borrowings permitted under our revolving credit facility may fluctuate significantly, which may adversely affect our liquidity, results of operations and financial position
4. 24An increase in interest rates or in our borrowing margin would increase the cost of servicing our debt and could reduce our profitability
5. 25Despite our current level of indebtedness, we may still be able to incur substantially more debt. This could further exacerbate the risks described above

Risks Related to the Securities Markets and Ownership of Our Common Stock

1. 26Provisions of our Certificate of Incorporation and our By-Laws could discourage potential acquisition proposals and could deter or prevent a change in control