Hertz 2008 Annual Report Download - page 5

Innovation…Driving Global Growth 3
Lean/Six Sigma. We are eliminating wasted time and re-
sources from car and equipment rental operations and
administrative functions, and cascading “best practices”
throughout our global organization. This is particularly im-
portant as we have reduced total headcount by 32% between
August 2006, and February 2009, mostly in non-customer
facing positions. As a result, we reduced costs by over $300
million in 2008, bringing cumulative, two-year total savings
to almost $500 million, with plans to eliminate an additional
$350 million in 2009.
A key objective of our efficiency and innovation program is
to improve customer service. In 2008, we delivered improved
service worldwide as measured by our version of Net Pro-
moter Score (NPS), with NPS scores improving 3% in the
U.S. and 26% in Europe, year-over-year. NPS provides almost
instantaneous customer feedback on completed rentals,
providing reliable service metrics and the means to drill-down
to address specific service issues, locally and across the
rental network.
Hertz is the only global car rental company, and the
only equipment rental company operating in North America,
Europe and China. Hertz’s global focus enables us to quickly
develop business opportunities where they arise.
In 2008, we established equipment rental operations
in China. Our first store opened in Shanghai last August,
and in November and December we generated profits on an
adjusted pre-tax income* and Corporate EBITDA* basis, a
tremendous result for a start-up operation. By mid-year 2009,
we will have car rental operations in Beijing and Shanghai.
We launched Connect by Hertz, our car sharing program
in London, New York City and Paris, with plans to rapidly ex-
pand to other large urban markets, universities and corporate
accounts in 2009. We expanded Simply Wheelz, our car rental
program for price-oriented leisure travelers, to six U.S. markets.
We are also expanding into key global markets through
licensee acquisitions and last year we incorporated European
and U.S. licensees which generated over $40 million in
annual revenues into our corporate network. In the U.S.
we continued to expand the off-airport rental market, where
we have almost 1,650 locations and service agreements with
185 of the top 209 auto insurers, an increase of 31 accounts
year-over-year.
We are committed to improving Employee Satisfaction.
We have introduced a performance management system and
improved skills and management training to accelerate the
development of our employees worldwide. We also introduced
an employee stock purchase plan last year.
Cash management is a top priority, especially in such a
difficult operating environment. Contributing to solid cash
flow, debt reduction and liquidity results are new company-
wide disciplines to further improve management of payables
and receivables. We are also managing rental fleets carefully,
aging the car and equipment fleets to optimize depreciation
and working capital expenditures.
Full year 2008 revenues of $8.5 billion, down 1.8%,
Corporate EBITDA* of $1.1 billion, down 28.6% and adjusted
pre-tax income* of $237.2 million, down 64.1%, fell short of
our targets due to the global economic crisis. Our company,
even with tough headwinds in the first half, was pretty much
on target for the first half of the year. Throughout the fourth
quarter of last year and into 2009, we have taken aggressive
actions to re-size the business to current conditions. We will
continue to adjust as events unfold in 2009, focusing equally
on revenue growth and cost management.
The senior management team is committed to stabilizing
profitability regardless of the macro-economic environment,
and positioning Hertz for accelerated profit retention and
debt reduction. Improving shareholder value is and will con-
tinue to be our primary focus and top priority in 2009.
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.