Hertz 2012 Annual Report Download - page 28

ITEM 1. BUSINESS (Continued)
In December 2011, Hertz purchased the noncontrolling interest of Navigation Solutions, L.L.C., thereby
increasing its ownership interest from 65% to 100%.
On November 19, 2012, Hertz completed the acquisition of Dollar Thrifty Automotive Group, Inc., or
‘‘Dollar Thrifty,’’ a car and truck rental and leasing business. 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.’’
On December 12, 2012, Hertz completed the sale of Simply Wheelz LLC, a wholly owned subsidiary of
Hertz that operated our Advantage Rent A Car business. 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.’’
In December 2012, the Sponsors sold 50,000,000 shares of their Hertz Holdings common stock to
J.P. Morgan as the sole underwriter in the registered public offering of those shares.
As a result of our initial public offering in November 2006 and subsequent offerings in June 2007, May
2009, June 2009, March 2011 and December 2012, the Sponsors reduced their holdings to
approximately 26% of the outstanding shares of common stock of Hertz Holdings.
Our Markets
We are engaged principally in the global car rental industry and in the equipment rental industry.
Worldwide Car Rental
We believe that the global car rental industry exceeds $37 billion in annual revenues. According to Auto
Rental News, car rental industry revenues in the United States were estimated to be approximately
$24 billion for 2012 and grew in 2012 by 3.9%. We believe car rental revenues in Europe account for over
$13 billion in annual revenues, with the airport portion of the industry comprising approximately 37% of
the total. Within Europe, the largest markets are Germany, France, Spain, Italy and the United Kingdom.
We believe total rental revenues for the car rental industry in Europe in 2012 were approximately
$10.8 billion in 10 countries—France, Italy, the United Kingdom, Germany, Spain, the Netherlands,
Belgium, the Czech Republic, Slovakia and Luxembourg—where we have company-operated rental
locations and approximately $2.8 billion in 11 other countries—Ireland, Portugal, Sweden, Greece,
Austria, Denmark, Poland, Finland, Hungary, Malta and Romania—where our Hertz brand is present
through our licensees.
Rentals by airline travelers at or near airports, or ‘‘airport rentals,’’ are significantly influenced by
developments in the travel industry and particularly in airline passenger traffic, or ‘‘enplanements,’’ as
well as the Gross Domestic Product, or ‘‘GDP.’’ We believe domestic enplanements in 2012
approximated 2011 levels, however, we expect it to increase by 1.8% in 2013. Current data suggests that
U.S. GDP decreased in the fourth quarter of 2012 at an annual rate of approximately 0.1%. The
International Air Transport Association, or ‘‘IATA,’’ stated in December 2012 that annual global
enplanements increased by 5.3% in 2012 and is expected to increase by 4.5% in 2013.
The off-airport portion of the industry has rental volume primarily driven by local business use, leisure
travel and the replacement of cars being repaired. Because Europe has generally demonstrated a lower
historical reliance on air travel, the European off-airport car rental market is significantly more developed
than it is in the United States. However, we believe that in recent years, industry revenues from off-airport
car rentals in the United States have grown faster than revenues from airport rentals.
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