Hertz 2013 Annual Report Download - page 10

Table of Contents
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years. We have sought to support our reputation for quality and customer service in car rental through a variety of innovative service
offerings, such as our customer loyalty program and our global expedited rental program (Gold Plus Rewards), our one-way rental program
(Rent-it-Here/Leave-it-There), our national-scale luxury rental program (Prestige Collection), our sports car rental program (Adrenaline
Collection), our environmentally friendly rental program (Green Traveler Collection), our elite sports and luxury rental car program (Dream
Cars) our car sharing service (Hertz 24/7TM) and our in-car navigational services (Hertz NeverLost). We intend to maintain our position as a
premier provider of rental services through an intense focus on service, quality and product innovation.
Dollar and Thrifty are positioned as value car rental brands in the travel industry. The Dollar brand's main focus is serving the airport vehicle
rental market, which is comprised of business and leisure travelers. The majority of its locations are on or near airport facilities. Dollar
operates primarily through company-owned locations in the United States and Canada, and also licenses to independent franchisees which
operate as a part of the Dollar brand system. Thrifty serves both the airport and off-airport markets through company-owned locations in the
United States and Canada and licenses to independent franchisees which operate as part of the Thrifty brand system.
In April 2009, we acquired certain assets of Advantage Rent A Car, or “Advantage” a brand focused on price-oriented customers at key leisure
travel destinations, and began operating the Advantage brand as part of our business. On December 12, 2012, we divested the Simply
Wheelz subsidiary, which owned and operated the Advantage brand, together with selected Dollar Thrifty airport concession to Adreca
Holdings Corp., a subsidiary of Macquarie Capital which was later merged into a subsidiary of Franchise Services of North America Inc.
Immediately prior to the divestiture, Advantage was operating at 62 U.S. locations, including 35 on-airport locations where Advantage held
concessions. For more information about our divestiture of Advantage see “Item 7 —Management's Discussion and Analysis of Financial
Condition and Results of Operations—Liquidity and Capital Resources,” in this Annual Report
In March 2013, we launched our Firefly brand, which is a deep value brand for price conscious leisure travelers, in Europe. In August 2013,
we announced the expansion of our Firefly brand into the U.S. The Company plans to have Firefly locations servicing local area airports in
select U.S. and international leisure markets where other deep value brands have a significant presence. Firefly will enable the company to
re-enter the deep value, leisure car rental market in the U.S. which it temporarily exited after divesting the Advantage brand in December
2012. The addition of Firefly will generate incremental fleet sharing, systems and operational synergies. Adding Firefly is part of a strategic
objective to offer multiple brands to provide customers a full range of rental services at different pricing points. As of December 31, 2013,
there were approximately 20 Firefly locations in the U.S. and 45 Firefly locations internationally. These locations consisted of both corporate
and franchisee locations in the U.S., Mexico, Spain, France, Italy, Switzerland and Portugal.
Operations
Locations
Airport Locations
As of December 31, 2013, we had approximately 3,575 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 1,980 other locations that are not
staffed. As of December 31, 2013, we had approximately 1,285 staffed rental locations internationally, of which approximately one-fifth were
airport locations and four-fifths were off-airport locations, and we regularly rent cars from approximately 160 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, 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 franchisees 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.
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Source: HERTZ CORP, 10-K, March 31, 2014 Powered by Morningstar® Document Research℠
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