Hertz 2012 Annual Report Download - page 37

ITEM 1. BUSINESS (Continued)
was approximately 13% of the estimated insurance rental revenue volume for the year ended
December 31, 2012, we have identified approximately 200 insurance companies, ranging from local or
regional carriers to large, national companies, as our target insurance replacement market. As of
December 31, 2012, we were a preferred or recognized supplier of 181 of these
approximately 200 insurance companies and a co-primary at 39 of these approximately 200 insurance
companies.
We conduct active sales and marketing programs to attract and retain customers. Our commercial and
travel industry sales force calls on companies and other organizations whose employees and associates
need to rent cars for business purposes. In addition, our sales force works with membership
associations, tour operators, travel companies and other groups whose members, participants and
customers rent cars for either business or leisure purposes. A specialized sales force calls on companies
with replacement rental needs, including insurance and leasing companies and car dealers. We also
advertise our car rental offerings through a variety of traditional media channels, such as television and
newspapers, direct mail and the Internet. In addition to advertising, we also conduct a variety of other
forms of marketing and promotion, including travel industry business partnerships and press and public
relations activities.
In almost all cases, when we rent a car, we rent it directly to an individual who is identified in a written
rental agreement that we prepare. Except when we are accommodating someone who cannot drive, the
individual to whom we rent a car is required to have a valid driver’s license and meet other rental criteria
(including minimum age and creditworthiness requirements) that vary on the basis of location and type
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, 2012, 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, 2012, no customer accounted for more than 7.5% of our car rental
revenues.
In the United States for the year ended December 31, 2012, 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, 2012, 48% 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, 22% came from customers using rental vouchers or another
method of payment and 1% came from cash transactions. For the year ended December 31, 2012, bad
debt expense represented 0.3% of car rental revenues for our U.S. operations and 0.3% of car rental
revenues for our international operations.
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