Hertz 2009 Annual Report Download - page 133

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Restrictive covenants in the Senior ABL Facility (as amended) permit cash dividends to be paid to Hertz
Holdings in an aggregate amount, taken together with certain other investments, acquisitions and
optional prepayments, not to exceed $100 million. Hertz may also pay additional cash dividends under
the Senior ABL Facility, and in any amount, so long as (a) there is at least $250 million of availability under
the facility after giving effect to the proposed dividend, (b) if certain other payments when taken together
with the proposed dividend would exceed $50 million in a 30-day period, Hertz can demonstrate
projected average availability in the following six-month period of $250 million or more, (c) (i) Hertz is in
pro forma compliance with the consolidated leverage ratio and consolidated fixed charge coverage ratio
set forth in the Senior ABL Facility or (ii) the amount of the proposed dividend does not exceed the sum
of (x) 1.0% of consolidated tangible assets plus (y) a specified available amount determined by reference
to, among other things, 50% of consolidated net income from October 1, 2005 to the end of the most
recent fiscal quarter for which consolidated financial statements of Hertz are available (which amount is
net of amounts paid under the foregoing clause (x)) plus (z) a specified amount of certain equity
contributions made by Hertz Holdings to the borrowers under such facility and (d) no default exists or
would result from such dividends.
On June 30, 2006, Hertz entered into amendments to each of its Senior Term Facility and Senior ABL
Facility. The amendments provide, among other things, for additional capacity under the covenants in
these credit facilities to enter into certain sale and leaseback transactions, to pay cash dividends and
make loans to Hertz Holdings that would, among other things, provide Hertz Holdings with cash for the
payment of interest on Hertz Holdings’ indebtedness (including, but not limited to, the Hertz Holdings
Loan Facility) and, in the case of the amendment to the Senior Term Facility, to make investments. The
ability of Hertz to pay cash dividends and make loans to Hertz Holdings remains subject to Hertz’s
meeting specified financial tests, as described above, as well as requirements imposed by applicable
Delaware law. The amendment to the Senior Term Facility also permitted Hertz to use proceeds of the
$293 million Delayed Draw Term Loan to repay borrowings outstanding under the Senior ABL Facility, in
addition to repaying certain other outstanding indebtedness of Hertz.
On February 9, 2007, Hertz entered into an amendment to its Senior Term Facility. The amendment was
entered into for the purpose of (i) lowering the interest rates payable on the Senior Term Facility by up to
50 basis points from the interest rates previously payable thereunder, and revising financial ratio
requirements for specific interest rate levels; (ii) eliminating certain mandatory prepayment
requirements; (iii) increasing the amounts of certain other types of indebtedness that Hertz and its
subsidiaries may incur outside of the Senior Term Facility; (iv) permitting certain additional asset
dispositions and sale and leaseback transactions; and (v) effecting certain technical and administrative
changes to the Senior Term Facility. During the year ended December 31, 2007, Hertz recorded an
expense of $14.0 million, in its consolidated statement of operations, in ‘‘Interest, net of interest income,’’
associated with the write-off of debt costs in connection with the amendment of the Senior Term Facility.
Additionally, in February 2007, Hertz permanently repaid a portion of the Senior Term Facility, bringing
the maximum borrowings thereunder down from $2,000 million to $1,400 million.
On February 15, 2007, Hertz, Hertz Equipment Rental Corporation and certain other subsidiaries entered
into an amendment to its Senior ABL Facility. The amendment was entered into for the purpose of
(i) lowering the interest rates payable on the Senior ABL Facility by up to 25 basis points from the interest
rates previously payable thereunder, and revising financial ratio requirements for specific interest rate
levels; (ii) increasing the availability under the Senior ABL Facility from $1,600 million to $1,800 million;
(iii) extending the term of the commitments under the Senior ABL Facility to February 15, 2012;
(iv) increasing the amounts of certain other types of indebtedness that the borrowers and their
subsidiaries may incur outside of the Senior ABL Facility; (iv) permitting certain additional asset
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