Hertz 2008 Annual Report Download - page 29

ITEM 1. BUSINESS (Continued)
Worldwide Car Rental
Operations
We rent a wide variety of makes and models of cars, nearly all of which are the current or previous year’s
models. We generally accept reservations only for a class of vehicles, although we accept reservations
for specific makes and models of vehicles in our Prestige Collection national-scale luxury rental
program, our Hertz Fun Collection experiential rental program, our Green Collection environmentally
friendly rental program and a limited number of models in high-volume, leisure-oriented destinations.
We rent cars on an hourly (in select markets), daily, weekend, weekly, monthly or multi-month basis, with
rental charges computed on a limited or unlimited mileage rate, or on a time rate plus a mileage charge.
Our rates vary at different locations depending on local market conditions and other competitive and
cost factors. While cars are usually returned to the locations from which they are rented, we also allow
one-way rentals from and to certain locations. In addition to car rentals and licensee fees, we generate
revenues from reimbursements by customers of airport concession fees and vehicle licensing costs,
fueling charges, and charges for ancillary customer products and services such as supplemental
equipment (child seats and ski racks), loss or collision damage waiver, theft protection, liability and
personal accident/effects insurance coverage, Hertz NeverLost navigation systems and satellite radio
services.
We have company-operated rental locations both in the United States and internationally. The
international car rental operations that generated the highest volumes of business from our company-
operated locations for the year ended December 31, 2008 were, in descending order of revenues, those
conducted in France, Germany, Italy, the United Kingdom, Australia, Spain and Canada. We also have
company-operated rental locations in the Netherlands, Switzerland, Brazil, New Zealand, Puerto Rico,
Belgium, Luxembourg, the Czech Republic and the U.S. Virgin Islands.
As of December 31, 2008, we had approximately 1,960 staffed rental locations in the United States, of
which approximately one-fourth were airport locations and three-fourths were off-airport locations, and
we regularly rent cars from approximately 1,130 other locations that are not staffed. As of December 31,
2008, we had approximately 1,200 staffed rental locations internationally, of which approximately
one-fifth were airport locations and four-fifths were off-airport locations, and we regularly rent cars from
approximately 100 other locations that are not staffed. We believe that our extensive U.S. and
international network of company-operated locations contributes to the consistency of our service, cost
control, fleet utilization, yield management, competitive pricing and ability to offer one-way rentals.
In order to operate airport rental locations, we have obtained concessions or similar leasing, licensing or
permitting agreements or arrangements, or ‘‘concessions,’’ granting us the right to conduct a car rental
business at all major, and many other, airports with regularly scheduled passenger service in each
country where we have company-operated rental locations, except for airports where our licensees
operate rental locations and Orlando International Airport in Orlando, Florida. Our concessions were
obtained from the airports’ operators, which are typically governmental bodies or authorities, following
either negotiation or bidding for the right to operate a car rental business there. The terms of an airport
concession typically require us to pay the airport’s operator concession fees based upon a specified
percentage of the revenues we generate at the airport, subject to a minimum annual guarantee. Under
most concessions, we must also pay fixed rent for terminal counters or other leased properties and
facilities. Most concessions are for a fixed length of time, while others create operating rights and
payment obligations that are terminable at any time.
The terms of our concessions typically do not forbid, and in a few instances actually require, us to seek
reimbursement from customers of concession fees we pay; however, in certain jurisdictions the law
9