Thrifty Car Rental 2010 Annual Report Download - page 17

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Vehicle Financing
The Company requires a substantial amount of debt to finance the purchase of vehicles used in its
rental fleets. The Company utilizes asset-backed medium-term notes and variable funding note
programs to finance its vehicles. Under asset-backed medium-term notes, the Company is required
to provide collateral at different levels depending on whether vehicle manufacturers maintain
investment grade or non-investment grade credit ratings, and whether inventory is comprised of
Program Vehicles or Non-Program Vehicles. Under variable funding note programs, the Company is
required to provide collateral at a fixed level. See Item 8 - Notes 10 and 19 of Notes to Consolidated
Financial Statements.
Fleet Leasing Programs
DTG Operations has historically made fleet leasing programs available to Dollar and Thrifty U.S.
franchisees for each new model year. In recent years, the Company has made a fleet leasing
program available to U.S. franchisees on a very limited basis and plans to do so again in 2011.
U.S. Fleet Data
2010 2009 2008
Average number of vehicles leased to
franchisees 171 1,666 2,754
Average number of vehicles in
combined fleets of franchisees 13,879 15,382 18,171
Average number of vehicles in combined
fleets of company-owned stores 98,735 99,223 115,129
Total 112,614 114,605 133,300
Year Ended December 31,
DTG Canada has historically made fleet leasing programs available to Canadian franchisees for
each new model year. For 2010, approximately 800 vehicles were leased to Canadian franchisees.
The Company plans to offer a fleet leasing program to Canadian franchisees on a very limited basis
in 2011.
Competition
There is intense competition in the vehicle rental industry on the basis of price, service levels, vehicle
quality, vehicle availability and the convenience and condition of rental locations. Dollar and Thrifty
and their franchisees operate mainly in the U.S. airport market, relying on leisure, tour and small
business customers. In addition to local and regional vehicle rental companies, Dollar and Thrifty
and their franchisees’ principal competitors are Alamo, Avis, Budget, Enterprise, Hertz and National.
The Canadian vehicle rental markets are also intensely competitive. Most of the Canadian market is
operated either directly or through franchisees of the major U.S. vehicle rental companies, including
Alamo, Avis, Budget, Enterprise, Hertz and National, as well as Dollar and Thrifty.
Insurance
The Company is subject to third-party bodily injury liability and property damage claims resulting
from accidents involving its rental vehicles. In 2008, 2009 and 2010, the Company retained the risk
of loss up to $5.0 million, $7.5 million and $7.5 million, respectively, per occurrence for public liability
and property damage claims. The Company maintains insurance coverages at certain amounts in
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