Hertz 2014 Annual Report Download - page 21

Table of Contents


U.S. franchisees ordinarily are limited as to transferability without our consent and are terminable by us only for cause or after a fixed term.
Franchisees in the U.S. may generally terminate for any reason on 90 days' notice. In Europe and certain other international jurisdictions,
franchisees typically do not have early termination rights. Initial license fees or the price for the sale to a franchisee of a company-owned location
may be payable over a term of several years. We continue to issue new licenses and, from time to time, purchase franchisee businesses.

In the U.S., in addition to local and regional vehicle rental companies, our principal car rental industry competitors are Avis Budget Group, Inc., or
“ABG,” which currently operates the Avis, Budget, ZipCar and Payless brands and Enterprise Holdings, which operates the Enterprise Rent-A-Car
Company, or "Enterprise," National Car Rental and Alamo Rent A Car brands.
In Europe, in addition to us, the principal pan-European participants in the car rental industry are ABG, operating the Avis, Budget and Zipcar
brands, and Europcar. In certain European countries, there are also other companies and brands with substantial market shares, including Sixt AG
(operating the Sixt brand) in Belgium, France, Germany, Luxembourg, the Netherlands, Spain, Switzerland and the United Kingdom; and Enterprise
(operating the Enterprise brand) in France, Germany, Ireland and the United Kingdom.
Competition among car rental industry participants is intense and is primarily based on price, vehicle availability and quality, service, reliability,
rental locations, product innovation, competition from on-line travel agents and car rental brokers. We believe that the prominence and service
reputation of the Hertz brand, our extensive worldwide ownership of car rental operations and our commitment to innovation and service provide us
with a competitive advantage. Additionally, our Dollar, Thrifty and Firefly brands enable us to compete across multiple market segments.

Our car rental operations are a seasonal business, with decreased levels of business in the winter months and heightened activity during spring
and summer for the majority of countries where we generate our revenues. To accommodate increased demand, we increase our available fleet
and staff during the second and third quarters of the year. As business demand declines, fleet and staff are decreased accordingly. Certain
operating expenses, including real estate taxes, rent, insurance, utilities, maintenance and other facility-related expenses, the costs of operating
our information technology systems and minimum staffing costs, remain fixed and cannot be adjusted for seasonal demand.
The following chart sets forth this seasonal effect of our car rental operations by presenting quarterly revenues for each of the years ended
December 31, 2014, 2013 and 2012. Amounts are computed independently each quarter, therefore, the s um of the quarterly amounts may not
equal the total amount for the respective year due to rounding.

10
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.