Dollar Rent A Car 2011 Annual Report Download - page 59

DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2011, 2010 AND 2009
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Dollar Thrifty Automotive Group, Inc. (“DTG”) is the successor to Pentastar Transportation Group, Inc. Prior to December 23, 1997, DTG was a
wholly owned subsidiary of Chrysler LLC (such entity or its successor entity, Chrysler Group LLC, as the context may require, and the relevant
entity’s subsidiaries and members of its affiliated group are hereinafter referred to as “Chrysler”). On December 23, 1997, DTG completed an initial
public offering of all its outstanding common stock owned by Chrysler together with additional shares issued by DTG.
The Company operates under a corporate structure that combines the management of operations and administrative functions for both the Dollar and
Thrifty brands. Management makes business and operating decisions on an overall company basis. Financial results are not available by brand.
DTG’s significant wholly owned subsidiaries include DTG Operations, Inc., Dollar Rent A Car, Inc., Thrifty, Inc. and Rental Car Finance Corp.
(“RCFC”). Thrifty, Inc. is the parent company of Thrifty Car Sales, Inc. and Thrifty Rent-A-Car System, Inc., which is the parent company of
Dollar Thrifty Automotive Group Canada Inc. (“DTG Canada”). RCFC is a special purpose financing entity, which was formed in 1995 and is
appropriately consolidated with DTG and subsidiaries. RCFC is a separate legal entity whose assets are not available to satisfy any claims of creditors
of DTG or any of its other subsidiaries. The term the “Company” is used to refer to DTG, individually or collectively with its consolidated
subsidiaries, as the context may require. Dollar Rent A Car, Inc., the Dollar brand and DTG Operations, Inc. operating under the Dollar brand are
individually and collectively referred to hereinafter as “Dollar”. Thrifty, Inc., Thrifty Rent-A-Car System, Inc., Thrifty Car Sales, Inc., the Thrifty
brand and DTG Operations, Inc. operating under the Thrifty brand are individually and collectively referred to hereinafter as “Thrifty”. Intercompany
accounts and transactions have been eliminated in consolidation.
Nature of Business – The Company operates in the U.S. and Canada, and through its Dollar and Thrifty brands is primarily engaged in the
business of the daily rental of vehicles to business and leisure customers through company-owned stores. The Company also sells vehicle rental
franchises worldwide and provides sales and marketing, reservations, data processing systems, insurance and other services to franchisees. RCFC
provides vehicle financing to the Company.
Estimates – The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the
United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the
consolidated financial statements. Actual results could differ materially from those estimates.
Cash and Cash Equivalents – Cash and cash equivalents include cash on hand and on deposit, including highly liquid investments with initial
maturities of three months or less.
Cash and Cash Equivalents – Required Minimum Balance – In 2009, the Company amended its Senior Secured Credit Facilities (hereinafter
defined). Under the terms of that amendment, the Company was required to maintain a minimum of $100 million at all times. In February 2011, the
Company further amended its Senior Secured Credit Facilities, eliminating the requirement to maintain a minimum of $100 million of cash and cash
equivalents and replacing it with certain other covenants.
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