Hertz 2012 Annual Report Download - page 27

PART I
ITEM 1. BUSINESS
Our Company
Hertz operates its car rental business through the Hertz, Dollar and Thrifty brands from approximately
10,270 corporate, licensee and franchisee locations in North America, Europe, Latin America, Asia,
Australia, Africa, the Middle East and New Zealand. Hertz is the largest worldwide airport general use car
rental brand, operating from approximately 8,860 corporate and licensee locations in approximately 150
countries. Our Dollar and Thrifty brands have approximately 1,410 corporate and franchisee locations in
83 countries. Our Hertz brand name is one of the most recognized in the world, signifying leadership in
quality rental services and products. We are one of the only car rental companies that has an extensive
network of company-operated rental locations both in the United States and in all major European
markets. We believe that we maintain the leading airport car rental brand market share, by overall
reported revenues, in the United States and at 120 major airports in Europe where we have company-
operated locations and where data regarding car rental concessionaire activity is available. We believe
that we also maintain the second largest market share, by overall reported revenues, in the off-airport car
rental market in the United States. In our equipment rental business segment, we rent equipment
through approximately 340 branches in the United States, Canada, France, Spain, China and Saudi
Arabia, as well as through our international licensees. We and our predecessors have been in the car
rental business since 1918 and in the equipment rental business since 1965. We also own Donlen
Corporation, or ‘‘Donlen,’’ based in Northbrook, Illinois, which is a leader in providing fleet leasing and
management services. We have a diversified revenue base and a highly variable cost structure and are
able to dynamically manage fleet capacity, the most significant determinant of our costs. Our revenues
have grown at a compound annual growth rate of 6.0% over the last 20 years, with year-over-year growth
in 17 of those 20 years.
Corporate History
Hertz Holdings was incorporated in Delaware in 2005 to serve as the top-level holding company for the
consolidated Hertz business. Hertz was incorporated in Delaware in 1967. Hertz is a successor to
corporations that have been engaged in the car and truck rental and leasing business since 1918 and
the equipment rental business since 1965. Ford Motor Company acquired an ownership interest in Hertz
in 1987. Prior to this, Hertz was a subsidiary of United Continental Holdings, Inc. (formerly Allegis
Corporation), which acquired Hertz’s outstanding capital stock from RCA Corporation in 1985.
On December 21, 2005, investment funds associated with or designated by:
• Clayton, Dubilier & Rice, Inc., which was succeeded by Clayton, Dubilier & Rice, LLC, or ‘‘CD&R,’’
• The Carlyle Group, or ‘‘Carlyle,’’ and
• Merrill Lynch & Co., Inc., or ‘‘Merrill Lynch,’’
or collectively the ‘‘Sponsors,’’ acquired all of Hertz’s common stock from Ford Holdings LLC. We refer
to the acquisition of all of Hertz’s common stock by the Sponsors as the ‘‘Acquisition.’’
In January 2009, Bank of America Corporation, or ‘‘Bank of America,’’ acquired Merrill Lynch.
Accordingly, Bank of America is now an indirect beneficial owner of our common stock held by Merrill
Lynch and certain other investment funds and affiliates of Merrill Lynch.
On September 1, 2011, Hertz completed the acquisition of Donlen Corporation, or ‘‘Donlen,’’ a leading
provider of fleet leasing and management services. See Note 4 to the Notes to our consolidated financial
statements included in this Annual Report under the caption ‘‘Item 8—Financial Statements and
Supplementary Data.’’
3