Thrifty Car Rental 2009 Annual Report Download - page 63

Download and view the complete annual report

Please find page 63 of the 2009 Thrifty Car Rental annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 111

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111

Trade accounts receivable include primarily amounts due from rental customers, franchisees and
tour operators arising from billings under standard credit terms for services provided in the normal
course of business.
Other vehicle manufacturer receivables include primarily amounts due under guaranteed
residual, buyback and Non-Program Vehicle incentive programs, which are paid according to
contract terms and are generally received within 60 days. This receivable does not include
expected payments on Program Vehicles remaining in inventory as those residual value guarantee
obligations are not triggered until the vehicles are sold.
Car sales receivable include primarily amounts due from car sale auctions for the sale of both
Program and Non-Program Vehicles.
Due from Chrysler is comprised primarily of amounts due under various guaranteed residual,
buyback, incentive and promotion programs, which are paid according to contract terms and are
generally received within 60 days. The Due from Chrysler balance varies based on fleet activity and
timing of incentive and guaranteed depreciation payments. This receivable does not include
expected payments on Program Vehicles remaining in inventory as those residual value guarantee
obligations are not triggered until the vehicles are sold. As of December 31, 2009, there were
approximately 400 vehicles at auction awaiting sale.
Allowance for doubtful accounts represents potentially uncollectible amounts owed to the
Company from franchisees, tour operators, corporate account customers and others. In 2009, the
Company wrote off approximately $5.5 million due to one of the Company’s largest U.K. tour
operator’s bankruptcy.
5. REVENUE–EARNING VEHICLES
Revenue-earning vehicles consist of the following:
2009 2008
Revenue-earning vehicles 1,608,855$ 2,358,573$
Less accumulated depreciation (380,218) (412,494)
1,228,637$ 1,946,079$
December 31,
(In Thousands)
On August 4, 2009, DTG and Chrysler executed a new vehicle supply agreement (the “New VSA”)
covering vehicle purchases beginning with the 2010 model year through the 2012 model year.
Historically, Dollar and Thrifty had maintained U.S. vehicle supply agreements (the “VSA”) with
Chrysler, which included a 75% minimum purchase requirement. The New VSA replaces and
supersedes the existing VSA, eliminating the 75% minimum purchase requirement and replacing it
with a minimum fixed volume requirement per model year. Purchases of revenue-earning vehicles
from Chrysler were $0.3 billion, $1.7 billion and $3.4 billion during 2009, 2008 and 2007,
respectively.
Prior to 2009, vehicle acquisition terms provided for guaranteed residual values in the U.S. or
buybacks in Canada on the majority of vehicles, under specified conditions. Guaranteed residual
and buyback payments provide the Company sufficient proceeds on disposition of revenue-earning
vehicles to realize the carrying value of these vehicles. Additionally, the Company receives
promotional payments under the VSA, incentives primarily related to the disposal of revenue-earning
vehicles and interest reimbursement for Program Vehicles while at auction and for certain delivery
related interest costs. The aggregate amount of payments recognized from Chrysler for guaranteed
residual value program payments, promotional payments, interest reimbursement and other
incentives, other than recovery costs, totaled $181.6 million, $670.4 million and $771.5 million in
2009, 2008 and 2007, respectively, of which a substantial portion of the payments relate to the
Company’s guaranteed residual value program and outstanding balances at year-end are included
62