Hertz 2012 Annual Report Download - page 32

ITEM 1. BUSINESS (Continued)
Operations
Locations
Airport Locations
As of December 31, 2012, we had approximately 3,210 staffed rental locations in the United States, of
which approximately one-fifth were airport locations and four-fifths were off-airport locations, and we
regularly rent cars from approximately 1,360 other locations that are not staffed. As of December 31,
2012, we had approximately 1,215 staffed rental locations internationally, of which approximately
one-fourth were airport locations and three-fourths were off-airport locations, and we regularly rent cars
from approximately 150 other locations that are not staffed. Our international car rental operations have
company-operated locations in France, Australia, Italy, the United Kingdom, Germany, Spain, Canada,
Brazil, the Netherlands, New Zealand, Belgium, Puerto Rico, the Czech Republic, China, Luxembourg,
Slovakia and the U.S. Virgin Islands. We believe that our extensive U.S. and international network of
company-operated locations contributes to the consistency of our service, cost control, fleet utilization,
yield management, competitive pricing and our ability to offer one-way rentals.
In order to operate airport rental locations, we have obtained concessions or similar leasing, licensing or
permitting agreements or arrangements, or ‘‘concessions,’’ granting us the right to conduct a car rental
business at all major, and many other airports in each country where we have company-operated rental
locations, except for airports where our licensees operate rental locations. Our concessions were
obtained from the airports’ operators, which are typically governmental bodies or authorities, following
either negotiation or bidding for the right to operate a car rental business there. The terms of an airport
concession typically require us to pay the airport’s operator concession fees based upon a specified
percentage of the revenues we generate at the airport, subject to a minimum annual guarantee. Under
most concessions, we must also pay fixed rent for terminal counters or other leased properties and
facilities. Most concessions are for a fixed length of time, while others create operating rights and
payment obligations that are terminable at any time.
The terms of our concessions typically do not forbid us from seeking, and in a few instances actually
require us to seek, reimbursement from customers of concession fees we pay; however, in certain
jurisdictions the law limits or forbids our doing so. Where we are required or permitted to seek such
reimbursement, it is our general practice to do so. The number of car rental concessions available at
airports varies considerably, but, except at small, regional airports, it is rarely less than four. Certain of
our concession agreements require the consent of the airport’s operator in connection with material
changes in our ownership. A growing number of larger airports are building consolidated airport rental
car facilities to alleviate congestion at the airport. These consolidated rental facilities may eliminate
certain competitive advantages among the brands as competitors operate out of one centralized facility
for both customer rental and return operations, share consolidated bussing operations and maintain
image standards mandated by the airports. See ‘‘Item 1A—Risk Factors’’ in this Annual Report.
Off-Airport Locations
In addition to our airport locations, we operate off-airport locations offering car rental services to a variety
of customers. Our off-airport rental customers include people wishing to rent cars closer to home for
business or leisure purposes, as well as those needing to travel to or from airports. Our off-airport
customers also include people who have been referred by, or whose rental costs are being wholly or
partially reimbursed by, insurance companies following accidents in which their cars were damaged,
those expecting to lease cars that are not yet available from their leasing companies and those needing
cars while their vehicle is being repaired or is temporarily unavailable for other reasons; we call these
customers ‘‘replacement renters.’’ At many of our off-airport locations we will provide pick-up and
delivery services in connection with rentals.
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