Hertz 2013 Annual Report Download - page 55

Table of Contents
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Direct Operating Expenses
U.S. Car Rental Segment
Direct operating expenses for our U.S. car rental segment of $2,677.9 million for 2012 increased $246.4 million, or 10.1%, from $2,431.5
million for 2011 as a result of increases in fleet related expenses, personnel related expenses and other direct operating expenses.
Fleet related expenses for our U.S. car rental segment of $539.1 million for 2012 increased $35.3 million, or 7.0%, from 2011. On a
comparable basis, the increase was primarily related to U.S. rental volume demand which resulted in increases in gasoline costs of
$19.6 million, self insurance expenses of $7.0 million and vehicle maintenance costs of $1.1 million. The increase in gasoline costs
reflect higher gasoline prices. These increases were partly offset by a decrease in vehicle damage costs of $12.1 million. The
remaining 2012 net increase was primarily attributable to the Recent Acquisitions.
Personnel related expenses for our U.S. car rental segment of $922.1 million for 2012 increased $66.0 million, or 7.7%, from 2011.
On a comparable basis, the increase was primarily related to increases in salaries and related expenses associated with improved
volume and compensation for employees at additional off-airport locations in 2012 as well as higher incentives. The remaining 2012
net increase was primarily attributable to the Recent Acquisitions.
Other direct operating expenses for our U.S. car rental segment of $1,216.7 million for 2012 increased $145.1 million, or 13.5%,
from 2011. On a comparable basis, the increase was primarily related to increases in facilities expenses of $51.1 million due to 2011
property sales, commissions of $9.7 million, concession fees of $14.0 million, restructuring charges of $6.5 million, field systems
of $5.6 million and customer service costs of $4.3 million. The increases were primarily a result of improved U.S. car rental volume
and off-airport expansions. The increases in other direct operating expenses were partly offset by a decrease in computer costs of
$6.0 million. The remaining 2012 net increase was primarily attributable to the Recent Acquisitions.
International Car Rental Segment
Direct operating expenses for our international car rental segment of $1,341.4 million for 2012 decreased $66.4 million, or 4.7%, from
$1,407.8 million for 2011 as a result of decreases in fleet related expenses, personnel related expenses and other direct operating expenses.
Fleet related expenses for our international car rental segment of $392.6 million for 2012 decreased $30.1 million, or 7.1%, from
2011. On a comparable basis, the decrease was primarily due to a decrease in vehicle damage costs of $15.9 million, self insurance
expense of $2.4 million and the effects of foreign currency translation of approximately $26.0 million. The decrease was offset by an
increase in international rental volume demand which resulted in increases in gasoline costs of $7.2 million and vehicle
maintenance costs of $7.1 million.
Personnel related expenses for our international car rental segment of $345.9 million for 2012 decreased $11.1 million, or 3.1%,
from 2011. The decrease was primarily due to the effects of foreign currency translation of approximately $18.4 million. On a
comparable basis, the decrease was partly offset by increases in salaries and related expenses associated with improved volume
and compensation for employees at additional off-airport locations in 2012 as well as higher incentives.
Other direct operating expenses for our international car rental segment of $602.9 million for 2012 decreased $25.2 million, or
4.0%, from 2011. On a comparable basis, the decrease in other direct operating expenses was primarily due to the effects of foreign
currency translation of approximately $35.0 million and decreases in concession fees of $4.5 million and charge card fees of
$2.8 million. The decreases in other direct operating expenses were partly offset by increases in commissions of $9.6 million and
customer service costs of $6.4 million. The increases were primarily a result of improved international rental volume demand and
off-airport expansions.
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Source: HERTZ CORP, 10-K, March 31, 2014 Powered by Morningstar® Document Research℠
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