Hertz 2014 Annual Report Download - page 16

Table of Contents
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We operate both airport and off airport locations which utilize common car fleets, are supervised by common country, regional and local area
management, use many common systems and rely on common maintenance and administrative centers. Additionally, our airport and off airport
locations utilize common marketing activities and have many of the same customers. We regard both types of locations as aspects of a single,
unitary, car rental business.
Airport
As of December 31, 2014, we had approximately 1,715 airport rental locations in the U.S. and 1,395 airport rental locations internationally. Our
international car rental operations have company-operated locations in Australia, Belgium, Brazil, Canada, the Czech Republic, France, Germany,
Italy, Luxembourg, the Netherlands, New Zealand, Puerto Rico, Slovakia, Spain, the United Kingdom 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.
For our airport company-operated rental locations, we have obtained concessions or similar leasing, licensing or permitting agreements or
arrangements, collectively “concessions,” granting us the right to conduct a car rental business at the respective airport. 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. 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.
The terms of our concessions typically do not forbid us from seeking, and in a few instances actually require us to seek, reimbursement from
customers of concession fees we pay; however, in certain jurisdictions the law limits or forbids our doing so. Where we are required or permitted to
seek such reimbursement, it is our general practice to do so. Certain of our concession agreements require the consent of the airport's operator in
connection with material changes in our ownership. A growing number of larger airports are building consolidated airport car rental facilities to
alleviate congestion at the airport. These consolidated rental facilities may eliminate certain competitive advantages among the brands as
competitors operate out of one centralized facility for both customer rental and return operations, share consolidated busing operations and
maintain image standards mandated by the airports. See Item1A, "Risk Factors in this Annual Report.
Off Airport
As of December 31, 2014, we had approximately 3,695 off airport locations in the U.S. and 4,075 off airport rental locations internationally. Our off
airport rental customers include people who prefer to rent cars closer to their home or place of work for business or leisure purposes, as well as
those needing to travel to or from airports. Our off airport customers also include people who have been referred by, or whose rental costs are
being wholly or partially reimbursed by, insurance companies following accidents in which their cars were damaged, those expecting to lease cars
that are not yet available from their leasing companies and those needing cars while their vehicle is being repaired or is temporarily unavailable for
other reasons; we call these customers replacement renters.
When compared to our airport rental locations, an off airport rental location typically uses smaller rental facilities with fewer employees, conducts
pick-up and delivery services and serves replacement renters using specialized systems and processes. On average, off airport locations
generate fewer transactions per period than airport locations.
Although we believe our market share for off airport rentals is generally smaller than our market share for airport rentals, our off airport locations
offer us the following benefits:
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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