Hertz 2010 Annual Report Download - page 93

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Years Ended December 31,
2010 2009 2008
Revenue earning equipment expenditures:
Car rental ....................................... $8,274.1 $7,442.3 $ 9,838.7
Equipment rental .................................. 166.8 85.0 312.3
Total ......................................... $8,440.9 $7,527.3 $10,151.0
Revenue earning equipment expenditures in our car rental and equipment rental operations for the year
ended December 31, 2010 increased by 11.2% and 96.2%, respectively, compared to the year ended
December 31, 2009. The increase in our car rental revenue earning equipment expenditures was
primarily due to higher rental volumes during the year ended December 31, 2010 as compared to the
year ended December 31, 2009, which required us to increase fleet levels. The increase in our
equipment rental operations revenue earning equipment expenditures is primarily due to an
improvement in the economic conditions during the second half of the year ended December 31, 2010.
Revenue earning equipment expenditures in our car rental and equipment rental operations for the year
ended December 31, 2009 decreased by 24.4% and 72.8%, respectively, compared to the year ended
December 31, 2008. The decrease in our car rental revenue earning equipment expenditures was
primarily due to lower rental volumes during the year ended December 31, 2009 as compared to the year
ended December 31, 2008, which required us to maintain lower fleet levels. The decrease in our
equipment rental operations revenue earning equipment expenditures is primarily due to a general
reduction in spending due to lower demand for equipment related to the economic downturn during the
year ended December 31, 2009 as compared to the year ended December 31, 2008.
Years Ended December 31,
2010 2009 2008
Property and equipment expenditures:
Car rental ............................................ $156.0 $ 90.8 $139.8
Equipment rental ....................................... 19.3 9.4 44.4
Other ............................................... 3.9 0.5 9.6
Total .............................................. $179.2 $100.7 $193.8
Property and equipment expenditures in our car rental operations, equipment rental operations and for
all other activities for the year ended December 31, 2010 increased by $65.2 million, $9.9 million and
$3.4 million, respectively, compared to the year ended December 31, 2009. The car rental increase is a
result of increased car rental volumes, an improvement in the economic conditions during the year, as
well as, the opening of new off-airport locations. Property and equipment expenditures in our car rental
operations, equipment rental operations and for all other activities for the year ended December 31,
2009 decreased by $49.0 million, $35.0 million and $9.1 million, respectively, compared to the year
ended December 31, 2008. These decreases are a result of managing our capital expenditures during
the economic downturn.
Financing
Our primary liquidity needs include servicing of corporate and fleet related debt, the payment of
operating expenses and purchases of rental vehicles and equipment to be used in our operations. Our
primary sources of funding are operating revenue, cash received on the disposal of vehicles and
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