Hertz 2007 Annual Report Download - page 41

26FEB200821542948 26FEB200821450537
Seasonality
Car rental and equipment rental are seasonal businesses, with decreased levels of business in the winter
months and heightened activity during spring and summer. To accommodate increased demand, we
increase our available fleet and staff during the second and third quarters of the year. As business
demand declines, fleet and staff are decreased accordingly. However, certain operating expenses,
including minimum concession fees, real estate taxes, rent, insurance, utilities, maintenance and other
facility-related expenses, the costs of operating our information systems and minimum staffing costs,
remain fixed and cannot be adjusted for seasonal demand. See ‘‘Item 1A—Risk Factors—Risks Related
to Our Business—Our business is highly seasonal, and a disruption in rental activity during our peak
season could materially adversely affect our results of operations.’’ The following tables set forth this
seasonal effect by providing quarterly revenues and operating income for each of the quarters in the
year ended December 31, 2007.
Revenues Operating Income
(In Millions of Dollars) (In Millions of Dollars)
0
500
1,000
1,500
2,000
2,500
1Q 2007 2Q 2007 3Q 2007 4Q 2007
$1,921
$2,176
$2,450
$2,139
0
100
200
300
400
500
1Q 2007 2Q 2007 3Q 2007 4Q 2007
$139
$333
$495
$295
Employees
As of December 31, 2007, we employed approximately 29,350 persons, consisting of 20,550 persons in
our U.S. operations and 8,800 persons in our international operations. Employee benefits in effect
include group life insurance, hospitalization and surgical insurance, pension plans and a defined
contribution plan. International employees are covered by a wide variety of union contracts and
governmental regulations affecting, among other things, compensation, job retention rights and
pensions. Labor contracts covering the terms of employment of approximately 7,400 employees in the
United States (including those in the U.S. territories) are presently in effect under 144 active contracts
with local unions, affiliated primarily with the International Brotherhood of Teamsters and the
International Association of Machinists. Labor contracts covering approximately 1,960 of these
employees will expire during 2008. We have had no material work stoppage as a result of labor problems
during the last ten years, and we believe our labor relations to be good. Nonetheless, we may be unable
to negotiate new labor contracts on terms advantageous to us, or without labor interruptions.
In addition to the employees referred to above, we employ a substantial number of temporary workers,
and engage outside services, as is customary in the industry, principally for the non-revenue movement
of rental cars and equipment between rental locations and the movement of rental equipment to and
from customers’ job sites.
21