Hertz 2014 Annual Report Download - page 20

Table of Contents


A significant percentage of our car rental fleet is purchased from the following vehicle manufacturers:








General Motors Company 27%

13%

24%
Fiat Chrysler Motor Company 17%

3%

14%
Nissan Motor Company 17%

5%

14%
Toyota Motor Corporation 15%

9%

13%
Ford Motor Company 8%

18%

10%
Purchases of cars are financed through cash from operations and by active and ongoing global borrowing programs. See Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources,” in this Annual Report.
We maintain automobile maintenance centers at or near certain airports and in certain urban and off airport areas, which provide maintenance
facilities for our car rental fleet. Many of these facilities include sophisticated car diagnostic and repair equipment and are accepted by automobile
manufacturers as eligible to perform and receive reimbursement for warranty work. Collision damage and major repairs are generally performed by
independent contractors.
Non-program cars are not purchased under repurchase or guaranteed depreciation programs. Rather, we dispose of non-program cars, as well as
program cars that become ineligible for manufacturer repurchase or guaranteed depreciation programs, through a variety of disposition channels,
including auctions, brokered sales, sales to wholesalers and dealers and, to a lesser extent and primarily in the U.S., sales at retail through a
network of approximately 77 company-operated car sales locations, as of December 31, 2014, dedicated to the sale of used cars from our rental
fleet.
We also offer Rent2Buy in 35 states and several European countries, an innovative program designed to sell used rental cars. Customers have an
opportunity for a three-day test rental of a competitively priced car from our rental fleet. If the customer purchases the car, he or she is credited
with up to three days of rental charges, and the purchase transaction is completed through the internet and by mail in those states where
permitted.
During the year ended December 31, 2014, of the cars sold in our U.S. car rental operations that were not repurchased by manufacturers, we sold
approximately 37% at auction, 37% through dealer direct and 26% through our Rent2Buy program or at retail locations. During the year ended
December 31, 2014, of the cars sold in our international car rental operations that were not repurchased by manufacturers, we sold approximately
3% at auction, 5% through our Rent2Buy program or at retail locations and 92% through dealer direct.

In certain U.S. and international markets, we have found it efficient to utilize independent franchisees, which rent cars that they own, under our
Hertz, Dollar, Thrifty or Firefly brands. In certain markets and under certain circumstances, franchisees are given the opportunity to acquire
franchises for multiple brands.
We believe that our franchisee arrangements are important to our business because they enable us to offer expanded national and international
service and a broader one-way rental program. Licenses are issued principally by our wholly-owned subsidiaries, under franchise arrangements to
independent franchisees and affiliates who are engaged in the car rental business in the U.S. and in many other countries.
Franchisees generally pay fees based on a percentage of their revenues or the number of cars they operate. The operations of all franchisees,
including the purchase and ownership of vehicles, are financed independently by the franchisees, and we do not have any investment interest in
the franchisees or their fleets. Fees from franchisees are used to, among other things, generally support the cost of our brand awareness
programs, reservations system, sales and marketing efforts and certain other services. In return, franchisees are provided the use of the
applicable brand name, certain operational support and training, reservations through our reservations channels, and other services. In addition to
car rental, certain franchisees outside the U.S. engage in car leasing, chauffeur-driven rentals and renting camper vans.
9
Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.