Hertz 2011 Annual Report Download - page 38

ITEM 1. BUSINESS (Continued)
of rental. Our rental agreements permit only licensed individuals renting the car, people signing
additional authorized operator forms and certain defined categories of other individuals (such as fellow
employees, parking attendants and in some cases spouses or domestic partners) to operate the car.
With rare exceptions, individuals renting cars from us are personally obligated to pay all amounts due
under their rental agreements. They typically pay us with a charge, credit or debit card issued by a third
party, although certain customers use a Hertz charge account that we have established for them, usually
as part of an agreement between us and their employer. For the year ended December 31, 2011, 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, 2011, no customer accounted for more than 1.0% of our car rental
revenues.
In the United States for the year ended December 31, 2011, 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 or direct billing, 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, 2011, 51% of our car rental revenues came from customers who paid us with third-
party charge, credit or debit cards, while 29% came from customers using Hertz charge accounts, 19%
came from customers using rental vouchers or another method of payment and 1% came from cash
transactions. For the year ended December 31, 2011, 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, 2011, approximately 33% of the worldwide reservations we accepted
came through travel agents using GDSs, while 30% came through our websites, 20% through phone
calls to our reservations center, 12% 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, 2011, we operated a peak rental fleet in the United States of approximately 355,500
cars and a combined peak rental fleet in our international operations of approximately 174,800 cars, and
in each case exclusive of our licensees’ fleet and Donlen’s leasing fleet. During the year ended
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