Hertz 2013 Annual Report Download - page 19

Table of Contents
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Our all other operations segment generated $527.0 million in revenues during the year ended December 31, 2013.
Our all other operations segment consists of our Donlen subsidiary, together with other business activities, such as our third party claim
management services. On September 1, 2011, Hertz acquired 100% of the equity of Donlen, a leading provider of fleet leasing and
management services for corporate fleets, based in Northbrook, Illinois.
Our wholly-owned subsidiary, Hertz Claim Management Corporation, or “HCM,” provides claim administration services to us and, to a
lesser extent, to third parties. These services include investigating, evaluating, negotiating and disposing of a wide variety of claims,
including third-party, first-party, bodily injury, property damage, general liability and product liability, but not the underwriting of risks. HCM
conducts business at five regional offices in the United States. Separate subsidiaries of ours conduct similar operations in seven countries in
Europe.
Donlen provides a comprehensive array of fleet leasing, financing, telematics, and management services to commercial fleets in the U.S.
and Canada. Products offered by Donlen include:
•Vehicle financing, acquisition and remarketing;
•License, title, and registration;
•Maintenance consultation;
•Fuel management;
•Accident management;
•Telematics-based location, driver performance and scorecard reporting; and
•Equipment financing
Donlen’s primary product for car and light to medium truck fleets is an open-ended terminal rental adjustment clause, or "TRAC," lease. For
most customers, vehicle must be leased for a minimum of 12 months, after which the lease converts to a month-to-month lease allowing
the vehicle to be surrendered any time thereafter. Our sale of the vehicle following the termination of the lease may result in a TRAC
adjustment, through which the customer is credited or charged with the surplus or loss on the vehicle. Approximately 80% of Donlen’s lease
portfolio consists of floating-rate leases which allow lease charges to be adjusted based on benchmark indices.
Donlen offers financing solutions for heavier-duty trucks and equipment. Lease financing is provided through syndication arrangements with
lending institutions. Donlen originates the leases, acquires the assets, and services the lease throughout the term.
Donlen provides services to leased and non-leased fleets. Services consist of fuel purchasing and management, preventive maintenance,
repair consultation, and accident management. Additionally, Donlen manages license and title, vehicle registration, and regulatory
compliance. Donlen’s telematics products provide enhanced visibility and reporting over driver and vehicle performance.
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Donlen’s leased fleet consists primarily of passenger cars, cargo vans and light-duty trucks. Vehicles are acquired directly from domestic and
foreign manufacturers, as well as dealers. More than half of Donlen’s leased fleet is 2012 model year or newer.
For the years ended December 31, 2013, 2012 and for the four months ended December 31, 2011 (period it was owned by Hertz), Donlen
had an average of approximately 169,600, 150,800 and 137,000 vehicles under lease and management, respectively.
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Donlen’s relationships include some of the world’s most recognized brands among its diverse portfolio of customers. Donlen’s services
customers in a wide variety of industries, with the lease portfolio not concentrated in any single type of industry.
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The commercial fleet market is one of the largest segments of the U.S. automotive industry, primarily consisting of cars, light-duty and
medium-duty trucks utilized in a sales, service, or delivery application. The fleet management industry has experienced significant
consolidation over the years and today our principal fleet management competitors in the U.S. and Canada are GE Capital, Automotive
Resources International, PHH Corporation, Wheels, Inc. and LeasePlan Corporation N.V.
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Source: HERTZ CORP, 10-K, March 31, 2014 Powered by Morningstar® Document Research℠
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