Hertz 2009 Annual Report Download - page 30

ITEM 1. BUSINESS (Continued)
In the three years ended December 31, 2009, we increased the number of our off-airport rental locations
in the United States by approximately 7% to approximately 1,700 locations. In the future, our strategy will
include selected openings of new off-airport locations, the disciplined evaluation of existing locations
and pursuit of same-store sales growth. We anticipate that same-store sales growth will be driven by our
traditional leisure and business traveler customers and by increasing penetration of the insurance
replacement market, of which we currently have a low market share. In the United States during the year
ended December 31, 2009, approximately one-third of our rental revenues at off-airport locations were
related to replacement rentals. We believe that if we successfully pursue our strategy of profitable
off-airport growth, the proportion of replacement rental revenues will increase. As we move forward, our
determination of whether to continue to expand our U.S. off-airport network will be based upon a
combination of factors, including the concentration of target insurance company policyholders, car
dealerships, auto body shops and other clusters of retail, commercial activity and potential profitability.
We also intend to increase the number of our staffed off-airport rental locations internationally based on
similar criteria.
Our worldwide car rental segment generated $5,979.0 million in revenues and $190.1 million in income
before income taxes and noncontrolling interest during the year ended December 31, 2009.
Customers and Business Mix
We categorize our car rental business based on two primary criteria—the purpose for which customers
rent from us (business or leisure) and the type of location from which they rent (airport or off-airport). The
table below sets forth, for the year ended December 31, 2009, the percentages of rental revenues and
rental transactions in our U.S. and international operations derived from business and leisure rentals and
from airport and off-airport rentals.
Year ended December 31, 2009
U.S. International
Revenues Transactions Revenues Transactions
Type of Car Rental
By Customer:
Business .............................. 43% 48% 50% 52%
Leisure ............................... 57 52 50 48
100% 100% 100% 100%
By Location:
Airport ............................... 73% 75% 54% 57%
Off-airport ............................. 27 25 46 43
100% 100% 100% 100%
Customers who rent from us for ‘‘business’’ purposes include those who require cars in connection with
commercial activities, the activities of governments and other organizations or for temporary vehicle
replacement purposes. Most business customers rent cars from us on terms that we have negotiated
with their employers or other entities with which they are associated, and those terms can differ
substantially from the terms on which we rent cars to the general public. We have negotiated
arrangements relating to car rental with many large businesses, governments and other organizations,
including most Fortune 500 companies.
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