Dollar Rent A Car 2011 Annual Report Download - page 66

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The aggregate amount of payments recognized from manufacturers for guaranteed residual value program payments, buyback or repurchase payments,
promotional payments, interest reimbursement and other incentives, other than recovery costs, totaled $180.5 million, $175.6 million and $524.4
million in 2011, 2010 and 2009, respectively, of which a substantial portion of the payments relate to the guaranteed residual value or manufacturer
buyback programs. The outstanding balances at year-end are included in Vehicle Manufacturer Receivables within Receivables, net on the consolidated
balance sheet.
5. VEHICLE DEPRECIATION AND LEASE CHARGES, NET
Vehicle depreciation and lease charges include the following:
Year Ended December 31,
2011 2010 2009
(In Thousands)
Depreciation of revenue-earning vehicles and other $ 317,844 $ 362,284 $ 461,178
Net gains from disposal of revenue-earning vehicles (46,887) (63,084) (35,086)
$ 270,957 $ 299,200 $ 426,092
Average gain on Non-Program Vehicles:
Year Ended December 31,
2011 2010 2009
Number of Non-Program Vehicles sold 39,398 57,100 50,099
Average gain on vehicles sold (per vehicle) $ 1,190 $ 1,105 $ 700
Components of vehicle depreciation per vehicle per month:
Year Ended December 31,
2011 2010 2009
Average depreciable fleet (units) 108,127 103,207 105,301
Average depreciation rate $ 245 $ 293 $ 365
Average gain on vehicles sold (36) (51) (28)
Average vehicle depreciation and lease charges, net $ 209 $ 242 $ 337
Depreciation expense for Non-Program Vehicles, which constitute substantially all of the Company’s fleet, is recorded on a straight-line basis over the
life of the vehicle, based on the original acquisition cost, the projected residual value at the time of sale, and the estimated length of time the vehicle will
be held in service. The Company’s vehicle depreciation rates will be periodically adjusted on a prospective basis when residual value assumptions
change due to changes in used vehicle market conditions.
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