Hertz 2011 Annual Report Download - page 103

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Borrowing Capacity and Availability
As of December 31, 2011, the following facilities were available for the use of Hertz and its subsidiaries
(in millions of dollars):
Availability Under
Remaining Borrowing Base
Capacity Limitation
Corporate Debt
Senior ABL Facility ...................................... $1,450.6 $1,040.9
Total Corporate Debt ................................... 1,450.6 1,040.9
Fleet Debt
U.S. Fleet Variable Funding Notes ........................... 993.1 95.2
Donlen GN II Variable Funding Notes ......................... 43.9 0.9
U.S. Fleet Financing Facility ................................ 54.0 8.2
European Revolving Credit Facility ........................... — —
European Fleet Notes .................................... — —
European Securitization ................................... 228.5 25.3
Canadian Securitization ................................... 126.9 9.4
Australian Securitization .................................. 83.0 3.9
Brazilian Fleet Financing .................................. 7.2 —
Capitalized Leases ...................................... 139.3 2.3
Total Fleet Debt ....................................... 1,675.9 145.2
Total ................................................ $3,126.5 $1,186.1
Our borrowing capacity and availability primarily comes from our ‘‘revolving credit facilities,’’ which are a
combination of asset-backed securitization facilities and asset-based revolving credit facilities. Creditors
under each of our revolving credit facilities have a claim on a specific pool of assets as collateral. Our
ability to borrow under each revolving credit facility is a function of, among other things, the value of the
assets in the relevant collateral pool. We refer to the amount of debt we can borrow given a certain pool
of assets as the ‘‘borrowing base.’’
We refer to ‘‘Remaining Capacity’’ as the maximum principal amount of debt permitted to be outstanding
under the respective facility (i.e., the amount of debt we could borrow assuming we possessed sufficient
assets as collateral) less the principal amount of debt then-outstanding under such facility.
We refer to ‘‘Availability Under Borrowing Base Limitation’’ and ‘‘borrowing base availability’’ as the
lower of Remaining Capacity or the borrowing base less the principal amount of debt then-outstanding
under such facility (i.e., the amount of debt we could borrow given the collateral we possess at such
time).
As of December 31, 2011, the Senior Term Facility had approximately $1.2 million available under the
letter of credit facility and the Senior ABL Facility had $1,096.7 million available under the letter of credit
facility sublimit, subject to borrowing base restrictions.
Substantially all of our revenue earning equipment and certain related assets are owned by special
purpose entities, or are encumbered in favor of our lenders under our various credit facilities.
Some of these special purpose entities are consolidated variable interest entities, of which Hertz is the
primary beneficiary, whose sole purpose is to provide commitments to lend in various currencies subject
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