Hertz 2010 Annual Report Download - page 94

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
equipment, borrowings under our asset-backed securitizations and our asset-based revolving credit
facilities and access to the credit markets generally.
As of December 31, 2010, we had $11,306.4 million of total indebtedness outstanding. Cash paid for
interest during the year ended December 31, 2010, was $533.0 million, net of amounts capitalized.
Accordingly, we are highly leveraged and a substantial portion of our liquidity needs arise from debt
service on our indebtedness and from the funding of our costs of operations and capital expenditures.
Our liquidity as of December 31, 2010 consisted of cash and cash equivalents, unused commitments
under our Senior ABL Facility and unused commitments under our fleet debt. For a description of these
amounts, see Note 4 to the Notes to our consolidated financial statements included in this Annual Report
under caption ‘‘Item 8—Financial Statements and Supplementary Data.’’
We have a significant amount of debt that will mature over the next several years. The aggregate
amounts of maturities of debt for each of the twelve-month periods ending December 31 (in millions of
dollars) are as follows:
2011 ........ $5,067.5 (including $3,277.1 of other short-term borrowings)
2012 ........ $1,813.0
2013 ........ $ 462.1
2014 ........ $1,436.1
2015 ........ $1,182.8
After 2015 .... $1,468.1
Our short-term borrowings as of December 31, 2010 include, among other items, the amounts
outstanding under the European Securitization, Australian Securitization, U.S. Fleet Financing Facility,
Brazilian Fleet Financing Facility, Canadian Securitization, Capitalized Leases and European Revolving
Credit Facility. These amounts are reflected as short-term borrowings, regardless of the facility maturity
date, as these facilities are revolving in nature and/or the outstanding borrowings have maturities of
three months or less. Short-term borrowings also include the Convertible Senior Notes which became
convertible on January 1, 2011.
In January 2011, Hertz redeemed in full its outstanding ($518.5 million principal amount) 10.5% Senior
Subordinated Notes due 2016 which resulted in premiums paid of $27.2 million and the write-off of
unamortized debt costs of $8.6 million. In January and February 2011, Hertz redeemed $1,105 million
principal amount of its outstanding 8.875% Senior Notes due 2014 which resulted in premiums paid of
$24.5 million and the write-off of unamortized debt costs of $14.4 million. We used the proceeds from the
September 2010 issuance of $700 million aggregate principal amount of 7.50% Senior Notes, the
December 2010 issuance of $500 million aggregate principal amount of 7.375% Senior Notes and the
February 2011 issuance of $500 million aggregate principal amount of 6.75% Senior Notes for these
redemptions. The redeemed 10.5% Senior Subordinated Notes and portion of the 8.875% Senior Notes
have been included in the 2011 maturities in the table above.
The agreements governing our indebtedness require us to comply with certain covenants. Our failure to
comply with the obligations contained in any agreements governing our indebtedness could result in an
event of default under the applicable instrument, which could result in the related debt becoming
immediately due and payable and could further result in a cross default or cross acceleration of our debt
issued under other instruments.
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