Hertz 2008 Annual Report Download - page 105

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Year Ended December 31, 2008 Compared with Year Ended December 31, 2007
Revenues
Years Ended
December 31,
2008 2007 $ Change % Change
Revenues
Car rental .................................... $6,730.4 $6,800.7 $ (70.3) (1.0)%
Equipment rental ............................... 1,657.3 1,755.3 (98.0) (5.6)%
Other ....................................... 137.4 129.6 7.8 6.0%
Total revenues ............................... $8,525.1 $8,685.6 $(160.5) (1.8)%
Total revenues decreased 1.8% for the year ended December 31, 2008 compared to the year ended
December 31, 2007.
Revenues from our car rental operations decreased 1.0%, primarily as a result of lower RPD described
below, a 1.1% decrease in car rental transaction days worldwide and a decrease in airport concession
recovery fees of $10.4 million, partly offset by the effects of foreign currency translation of approximately
$119.3 million and an increase in refueling fees of $31.9 million.
RPD for worldwide car rental for the year ended December 31, 2008 declined 2.3% from 2007, due to
declines in U.S. and International RPD of 2.0% and 3.5%, respectively. U.S. airport RPD decreased 1.9%
and U.S. off-airport RPD declined by 1.0%. Our strategy includes increasing penetration in the off-airport
market and growing the online leisure market, particularly in the longer length weekly sector, which is
characterized by lower vehicle costs and lower transaction costs at lower RPD. Increasing our
penetration in these sectors is consistent with our long term strategy to generate profitable growth.
Revenues from our equipment rental operations decreased 5.6%, primarily due to a 6.1% decrease in
equipment rental volume and a 1.4% decline in pricing, partly offset by the effects of foreign currency
translation of approximately $19.6 million.
Revenues from all other sources increased 6.0%, primarily due to increases in international car leasing
revenues of $4.6 million and car rental licensee revenues of $4.2 million, including the effects of foreign
currency translation of approximately $2.1 million.
Expenses
Years Ended
December 31,
2008 2007 $ Change % Change
Expenses:
Direct operating ............................... $4,930.0 $4,644.1 $ 285.9 6.2%
Depreciation of revenue earning equipment ........... 2,194.2 2,003.4 190.8 9.5%
Selling, general and administrative .................. 769.6 775.9 (6.3) (0.8)%
Interest, net of interest income ..................... 845.2 875.4 (30.2) (3.5)%
Impairment charges ............................ 1,168.9 — 1,168.9 100.0%
Total expenses .............................. $9,907.9 $8,298.8 $1,609.1 19.4%
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