Hertz 2009 Annual Report Download - page 32

ITEM 1. BUSINESS (Continued)
as part of an agreement between us and their employer. For the year ended December 31, 2009, all
amounts charged to Hertz charge accounts established in the United States and by our international
subsidiaries, were billed directly to a company or other organization or were guaranteed by a company.
We also issue rental vouchers and certificates that may be used to pay rental charges, mostly for prepaid
and tour-related rentals. In addition, where the law requires us to do so, we rent cars on a cash basis. For
the year ended December 31, 2009, no customer accounted for more than 2.0% of our car rental
revenues.
In the United States for the year ended December 31, 2009, 83% of our car rental revenues came from
customers who paid us with third-party charge, credit or debit cards, while 8% came from customers
using Hertz charge accounts, 8% came from customers using rental vouchers or another method of
payment and 1% came from cash transactions. In our international operations for the year ended
December 31, 2009, 52% of our car rental revenues came from customers who paid us with third-party
charge, credit or debit cards, while 27% came from customers using Hertz charge accounts, 20% came
from customers using rental vouchers or another method of payment and 1% came from cash
transactions. For the year ended December 31, 2009, bad debt expense represented 0.2% of car rental
revenues for our U.S. operations and 0.3% of car rental revenues for our international operations.
Reservations
When customers reserve cars for rental from us and our licensees, they may seek to do so through travel
agents or third-party travel websites. In many of those cases, the travel agent or website will utilize a
third-party operated computerized reservation system, also known as a global distribution system, or
‘‘GDS,’’ to contact us and make the reservation.
In major countries, including the United States and all other countries with company-operated locations,
customers may also reserve cars for rental from us and our licensees worldwide through local, national
or toll-free telephone calls to our reservations center, directly through our rental locations or, in the case
of replacement rentals, through proprietary automated systems serving the insurance industry.
Additionally, we accept reservations for rentals from us and our licensees worldwide through our
websites.
For the year ended December 31, 2009, approximately 31% of the worldwide reservations we accepted
came through travel agents using GDSs, while 23% came through phone calls to our reservations center,
31% through our websites, 10% through third-party websites and 5% through local booking sources.
Fleet
We believe we are one of the largest private sector purchasers of new cars in the world. During the year
ended December 31, 2009, we operated a peak rental fleet in the United States of approximately 288,400
cars and a combined peak rental fleet in our international operations of approximately 155,700 cars, in
each case exclusive of our licensees’ fleet. During the year ended December 31, 2009, our approximate
average holding period for a rental car was fifteen months in the United States and twelve months in our
international operations.
Over the past five years, the percentage of our car rental fleet subject to repurchase or guaranteed
depreciation programs has substantially decreased due primarily to changes in the overall terms offered
by automobile manufacturers under repurchase programs. Accordingly, we bear increased risk relating
to the residual market value and the related depreciation on our car rental fleet and must use different
rotational techniques to accommodate our seasonal peak demand for cars.
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