Hertz 2011 Annual Report Download - page 100

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Financing
Our primary liquidity needs include servicing of corporate and fleet related debt, the payment of
operating expenses and purchases of rental vehicles and equipment to be used in our operations. Our
primary sources of funding are operating cash flows, cash received on the disposal of vehicles and
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, 2011, we had $11,317.1 million of total indebtedness outstanding. Cash paid for
interest during the year ended December 31, 2011, was $640.6 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, 2011 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:
2012 ........ $4,363.5 (including $3,691.0 of other short-term borrowings*)
2013 ........ $ 487.7
2014 ........ $1,148.0
2015 ........ $1,369.5
2016 ........ $ 254.1
After 2016 .... $3,777.5
* Our short-term borrowings as of December 31, 2011 include, among other items, the amounts outstanding under
the European Securitization, Australian Securitization, U.S. Fleet Financing Facility, U.S. Variable Funding Notes,
Brazilian Fleet Financing, Canadian Securitization, Capitalized Leases, European Revolving Credit Facility and the
Donlen GN II Variable Funding Notes. 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, 2012.
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. We believe that
cash generated from operations and cash received on the disposal of vehicles and equipment, together
with amounts available under various liquidity facilities will be adequate to permit us to meet our debt
maturities over the next twelve months.
In January 2011, Hertz redeemed in full its outstanding ($518.5 million principal amount) 10.50% 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. Hertz 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 (see below)
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