Hertz 2012 Annual Report Download - page 7

through in-house development, a technology platform
to enable 24/7 car rental service beyond Hertz on
Demand’s urban and university car sharing markets. In
2013, we will introduce a capability to stage cars any-
where customers need them, and at any time, because
research shows consumers often need cars outside of
9 AM to 5 PM weekday hours. Our motto: “Traveling at
the Speed of Hertz” will mean that consumers can rent
using a simple “click, swipe and drive” process powered
by customer-friendly mobile and in-car technology at
every point in the process. Hertz is harnessing technol-
ogy to once again reinvent the car rental business.
Commitment to Accelerating Cash Flow Generation
Hertz generated approximately $2.7 billion in net cash
flow from operations in 2012, a $485 million year-
over-year improvement. Having completed the Dollar
Thrifty acquisition last year, and 11 HERC acquisitions
over a 3-year period, as well as investing heavily in our
rental fleets as the U.S. economy recovered, we believe
we will now rapidly accelerate corporate cash flow gen-
eration in 2013 and beyond. The acquisition of Dollar
Thrifty enables us to buy cars more efficiently, to gen-
erate higher utilization, as we share fleet between the
brands, and to scale the benefits of our increasingly
diverse vehicle re-marketing channels.
In 2012 we welcomed two high-quality franchise part-
ners, Penske Automotive (Memphis, TN) and Emil Frey
Group (Switzerland), to the Hertz family. Franchising is
another tool to increase cash flow by reducing capital
and fleet financing expenses in existing territories, while
helping us achieve higher penetration and profitability
in under-served or under-performing markets.
Customer and Employee Satisfaction
While executing financial and strategic objectives, we
haven’t forgotten that our success depends on satisfied
customers and employees. Last year, we again delivered
on both fronts.
Hertz earned a record 50 “Best of” Awards in 2012
(double our prior record in 2011) from leading publica-
tions and organizations which annually survey car rental
customer satisfaction. These awards include a clean
sweep of 15 Zagat categories for U.S. and international
car rental service, and induction into Travel + Leisure’s
inaugural Hall of Fame class, the only car rental company
so honored. We trace these achievements to our Net
Promoter Score (NPS) program, a third-party survey
which provides real-time feedback from tens of thou-
sands of Hertz customers every month. We act quickly
on their suggestions and complaints, and their input
drives our process reengineering programs. That’s
why our U.S. car rental business recorded all-time NPS
highs in 2012, and finished the year well over 60%, a
key benchmark for NPS companies.
We also achieved record employee satisfaction in 2012,
as we continued to increase investments in training,
recognizing and developing our people at all levels. We
made investments equal to nearly 3% of our 2012 payroll
to employee development, exceeding best-in-class levels.
With the addition of our Dollar Thrifty colleagues, Hertz
now has 41,000 full and part time employees worldwide,
and we will continue to improve their ability to work
effectively and to optimize their technical and profes-
sional development.
In my six and a half years with Hertz, I’ve never been
so enthusiastic about our prospects. We’ve never been
in a better position in the $22 billion U.S. car rental
market with the #1 premium preferred brand in Hertz
and two successful value brands in Dollar and Thrifty.
We’re developing leading edge technology to create
ground-breaking market opportunities in the off-airport
business. The equipment rental business is generating
healthy revenue growth and profits, while still in the
early stages of its recession-related recovery.
Hertz achieved several financial records in 2012 and
the Company is poised to perform even better from
2013 through 2015 due to the combination of opera-
tional excellence and strategic differentiation, as well
as a sharp focus on customer and employee satisfaction.
As a result, Hertz investors should be rewarded as we
expect to generate even higher operating margins and
accelerate cash flow growth.
I’m honored to lead a 95-year old global brand poised
for break out success and continued industry leadership
in its second century.
Sincerely,
Mark P. Frissora
Chairman and Chief Executive Officer
Diverse,
Global
Portfolio
Superior
Growth
Strategies
Culture of
Operational
Excellence
Advanced
Technology
Leader
Accelerating
Cash Flow
Generation
TRANSFORMING HERTZ
Equipment
Rental
On Demand
R
ent2Buy
Equipment
Rental
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