Hertz 2011 Annual Report Download - page 87

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
of $30.8 million, as well as the effects of foreign currency translation of approximately $157.9 million. The
year ended December 31, 2011 also includes $142.7 million of revenues related to Donlen which was
acquired on September 1, 2011. These increases were partly offset by a decrease in worldwide RPD.
RPD for worldwide car rental for the year ended December 31, 2011 decreased 3.7% from 2010, due to
decreases in U.S. and International RPD of 4.4% and 2.3%, respectively. U.S. off-airport RPD declined by
2.7% and U.S. airport RPD decreased 4.7%. A mix shift to longer life, lower RPD rentals (including
increased growth of off-airport and the Advantage brand); the competitive environment in the first half of
the year, as well as a difficult year-over-year RPD comparison to last year, reduced U.S. RPD.
International RPD decreased primarily due to a decrease in Europe’s airport RPD which was due to the
competitive pricing environment.
Equipment Rental Segment
Revenues from our equipment rental segment increased 13.0%, primarily due to increases of 10.5% and
2.4% in equipment rental volumes and pricing, respectively, as well as the effects of foreign currency
translation of approximately $17.3 million. The increase in volume was primarily due to strong industrial
performance.
Other
Revenues from all other sources decreased 12.5%, primarily due to a decrease in revenues from our
third-party claim management services.
EXPENSES
Years Ended
December 31,
2011 2010 $ Change % Change
(in millions of dollars)
Expenses:
Fleet related expenses ....................... $1,120.6 $1,003.2 $117.4 11.7%
Personnel related expenses ................... 1,478.0 1,411.2 66.8 4.7%
Other direct operating expenses ................ 1,967.8 1,869.0 98.8 5.3%
Direct operating .......................... 4,566.4 4,283.4 283.0 6.6%
Depreciation of revenue earning equipment and
lease charges .......................... 1,905.7 1,868.1 37.6 2.0%
Selling, general and administrative ............ 745.3 664.5 80.8 12.2%
Interest expense .......................... 699.7 773.4 (73.7) (9.5)%
Interest income .......................... (5.5) (12.3) 6.8 (54.9)%
Other (income) expense, net ................. 62.5 — 62.5 N/M
Total expenses ......................... $7,974.1 $7,577.1 $397.0 5.2%
Total expenses increased 5.2%, but total expenses as a percentage of revenues decreased from 100.2%
for the year ended December 31, 2010 to 96.1% for the year ended December 31, 2011.
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