Hertz 2014 Annual Report Download - page 51

Table of Contents
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market conditions. Our business requires significant expenditures for cars and equipment, and consequently we require substantial liquidity to
finance such expenditures. See "Liquidity and Capital Resources" below.
Our strategy includes optimization of our on airport operations, selected openings of new off airport locations, the disciplined evaluation of existing
locations and the pursuit of same-store sales growth.
Our total revenues primarily are derived from rental and related charges and consist of:
• Car rental revenues - revenues from all company-operated car rental operations, including charges to customers for the reimbursement of
costs incurred relating to airport concession fees and vehicle license fees, the fueling of vehicles and revenues associated with ancillary
products associated with car rentals, including the sale of loss or collision damage waivers, liability insurance coverage, parking and other
products and fees, ancillary products associated with the retail car sales channel and certain royalty fees from our franchisees;
• Equipment rental revenues - revenues from all company-operated equipment rental operations, including amounts charged to customers
for the fueling and delivery of equipment and sale of loss damage waivers, as well as revenues from the sale of new equipment and
consumables; and
• All other operations revenues - revenues from fleet leasing and management services (Donlen) and other business activities.
Our expenses primarily consist of:
• Direct operating expenses (primarily wages and related benefits; commissions and concession fees paid to airport authorities, travel
agents and others; facility, self-insurance and reservation costs; the cost of new equipment and consumables purchased for resale; and
other costs relating to the operation and rental of revenue earning equipment, such as damage, maintenance and fuel costs);
• Depreciation expense and lease charges, net relating to revenue earning equipment (including net gains or losses on the disposal of such
equipment). Revenue earning equipment includes cars and rental equipment;
• Selling, general and administrative expenses; and
• Interest expense, net.
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We have identified four reportable segments, which are organized based on the products and services provided by our operating segments and the
geographic areas in which our operating segments conduct business, as follows:
• U.S. Car Rental - Rental of cars, crossovers and light trucks, as well as sales of ancillary products and services, in the U.S.;
• International Car Rental - Rental of cars, crossovers and light trucks, as well as sales of ancillary products and services, internationally;
• Worldwide Equipment Rental - Rental of industrial, construction, material handling and other equipment; and
• All Other Operations - Comprised of our Donlen business, which provides fleet leasing and management services, and other business
activities, such as our claim management services (HCM).
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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