Hertz 2007 Annual Report Download - page 5

Hertz Global Holdings, Inc. 3
Mark P. Frissora
Chairman of the Board
and Chief Executive Officer
Hertz Management Team
Top row, left to right:
Richard Broome
Lauren S. Babus
Don Serup
LeighAnne Baker
Charles Shafer
Elyse Douglas
Gerald A. Plescia
Lois Boyd
Jeffrey Zimmerman
Bottom row, left to right:
John A. Thomas
Joseph F. Eckroth
Joseph R. Nothwang
Mark P. Frissora
Michel Taride
Frank Camacho
Robert J. Stuart
vehicles, with another 2,500 on the way in 2008. We launched Simply Wheelz in Orlando and
Spain – our low cost, high-tech rental brand to serve value-oriented, leisure customers. We are
now the market leader in Germany in van and truck rentals, a rapidly growing business across
our European network.
Equally important is Employee Satisfaction. We spent an additional $7 million on train-
ing and improved the U.S. tuition reimbursement program. Additionally, we are introducing
new performance management and talent development systems to fully align our strategies,
employees and compensation programs.
We made significant progress in 2007 on our Cash Management strategies. Working capital
improved by over $280 million in 2007, as we pushed focus on and responsibility for working
capital to lower levels in the company. We also generated levered cash flows* of over $550
million, and increased Corporate EBITDA* by $162.8 million, or 11.8%, in 2007.
Our 2007 results can also be measured by analyzing key financial indicators, driven by
revenue growth and efficiency initiatives in equal measure. Hertz generated over $660 million
of adjusted pre-tax income* in 2007, up 35.8%, on record worldwide revenues of $8.7 billion,
including over $620 million in new revenues, 7.1% of 2007 worldwide revenues. We opened 360
rental locations worldwide in 2007, introduced new product lines and entered new market sec-
tors in both car and equipment rental. We are poised to establish a long-term presence in the
most exciting, emerging rental markets in the world: China and India.
Our efficiency strategy is equally diversified. We reduced staffing levels in 2007 to eliminate
unnecessary layers of management and bureaucracy, and we will continue to improve produc-
tivity in 2008. We are implementing new outsourcing programs to improve efficiency in several
areas including properties, facilities, procurement and IT.
In 2007, we fully launched the Hertz Improvement Process (HIP), our version of Lean/Six
Sigma, focused on employee-generated work process improvements. We implemented HIP
at 248 locations and trained almost 9,000 employees in 2007. By streamlining their work, our
employees are more efficient and provide better customer service. HIP is a key element of our
goal to create a culture of continuous improvement at Hertz.
Additionally, we are reengineering major business processes, and implementing a global
supply chain strategy. For example, fleet-related costs comprise over 30% of our total expens-
es, and we are thoroughly reengineering fleet management programs from the purchase and
delivery of vehicles, through their rental life and final disposition.
Efficiency savings helped us achieve financial success last year and enabled us to fund $65
million in incremental spending on our brand, operations and people, a vital reinvestment in
our future.
Our equal focus on Customer Satisfaction, Employee Satisfaction and Cash Management is
the platform for the company’s long term success. Macro-economic conditions will affect the
businesses, but will not deter us from achieving sustained excellence, and delivering increased
shareholder value, during our 10th decade of brand and industry leadership.
Mark P. Frissora
Chairman of the Board and Chief Executive Officer
Hertz Global Holdings, Inc. and The Hertz Corporation
* Indicates a Non-GAAP measurement presented and reconciled within the section of the Annual Report to Stockholders entitled
“Definitions and Non-GAAP Reconciliations,” which follows our Annual Report on Form 10-K included in this Annual Report.