Hertz 2012 Annual Report Download - page 42

ITEM 1. BUSINESS (Continued)
also for management of their total equipment needs fits well with HERC’s core competencies.
Arrangements with such companies may include maintenance of the tools and equipment they own,
supplies and rental tools for their labor force and custom management reports. HERC supports this
through its dedicated in-plant operations, tool trailers and plant management systems.
Locations
As of December 31, 2012, 2011 and 2010, HERC had a total of approximately 340, 320 and 320
branches, respectively, in the U.S., Canada, France, Spain, China and Saudi Arabia.
HERC’s rental locations generally are located in industrial or commercial zones. A growing number of
locations have highway or major thoroughfare visibility. The typical location includes a customer service
center, an equipment service area and storage facilities for equipment. The branches are built or
conform to the specifications of the HERC prototype branch, which stresses efficiency, safety and
environmental compliance. Most branches have stand-alone maintenance and fueling facilities and
showrooms.
HERC’s broad equipment line in the United States and Canada also includes, equipment with an
acquisition cost of under $10,000 per unit, ranging from air compressors and generators to small tools
and accessories, in order to supply customers who are local contractors with a greater proportion of
their overall equipment rental needs. As of December 31, 2012, these activities, referred to as ‘‘general
rental activities,’’ were conducted at approximately 28% of HERC’s U.S. and Canadian rental locations.
Before it begins to conduct general rental activities at a location, HERC typically renovates the location to
make it more appealing to walk-in customers and adds staff and equipment in anticipation of
subsequent demand.
Business Initiatives
In early 2010, Hertz launched Hertz Entertainment Services, a division which provides single-source car
and equipment rental solutions to the entertainment and special events industries. Hertz Entertainment
Services provides customized vehicle and equipment rental solutions to movie, film and television
productions, live sports and entertainment events, and all-occasion special events, such as
conventions, and fairs. Hertz Entertainment Services are tailored to fit the needs of large and small
productions alike with competitive pricing and customized, monthly billing. Hertz delivers vehicles and
equipment to production locations and a dedicated staff is available 24/7 to address specific client
needs. Productions can also rent equipment for use at special events such as lighting, generators and
other machinery.
In February 2010, HERC entered into a joint venture with Saudi Arabia based Dayim Holdings
Company, Ltd. to set up equipment rental operations in the Kingdom of Saudi Arabia. The joint venture
entity rents and sells equipment and tools to construction and industrial markets throughout the
Kingdom of Saudi Arabia.
Customers
HERC’s customers consist predominantly of commercial accounts and represent a wide variety of
industries, such as construction, petrochemical, automobile manufacturing, railroad, power generation,
shipbuilding and entertainment and special events. Serving a number of different industries enables
HERC to reduce its dependence on a single or limited number of customers in the same business and
somewhat reduces the seasonality of HERC’s revenues and its dependence on construction cycles.
HERC primarily targets customers in medium to large metropolitan markets. For the year ended
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