Hertz 2011 Annual Report Download - page 131

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
future indebtedness secured on a basis either equal to or subordinated to the liens securing the
applicable Senior Credit Facility or on an unsecured basis.
We refer to Hertz and its subsidiaries as the Hertz credit group. The Senior Credit Facilities contain a
number of covenants that, among other things, limit or restrict the ability of the Hertz credit group to
dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay certain
indebtedness, make dividends and other restricted payments (including to the parent entities of Hertz
and other persons), create liens, make investments, make acquisitions, engage in mergers, change the
nature of their business, engage in certain transactions with affiliates that are not within the Hertz credit
group, or enter into certain restrictive agreements limiting the ability to pledge assets.
Under the Senior ABL Facility, failure to maintain certain levels of liquidity will subject the Hertz credit
group to a contractually specified fixed charge coverage ratio of not less than 1:1 for the four quarters
most recently ended.
Covenants in the Senior Term Facility restrict payment of cash dividends to any parent of Hertz, including
Hertz Holdings, with certain exceptions, including: (i) in an aggregate amount not to exceed 1.0% of the
greater of a specified minimum amount and the consolidated tangible assets of the Hertz credit group
(which payments are deducted in determining the amount available as described in the next clause (ii)),
(ii) in additional amounts up to a specified available amount determined by reference to, among other
things, 50% of net income from January 1, 2011 to the end of the most recent fiscal quarter for which
financial statements of Hertz are available (less certain investments) and (iii) in additional amounts not to
exceed the amount of certain equity contributions made to Hertz.
Covenants in the Senior ABL Facility restrict payment of cash dividends to any parent of Hertz, including
Hertz Holdings, except in an aggregate amount, taken together with certain investments, acquisitions
and optional prepayments, not to exceed $200 million. Hertz may also pay additional cash dividends
under the Senior ABL Facility so long as, among other things, (a) no specified default then exists or
would arise as a result of making such dividends, (b) there is at least $200 million of liquidity under the
Senior ABL Facility after giving effect to the proposed dividend, and (c) either (i) if such liquidity is less
than $400 million immediately after giving effect to the making of such dividends, Hertz is in compliance
with a specified fixed charge coverage ratio, or (ii) the amount of the proposed dividend does not exceed
the sum of (x) 1.0% of tangible assets plus (y) a specified available amount determined by reference to,
among other things, 50% of net income from January 1, 2011 to the end of the most recent fiscal quarter
for which financial statements of Hertz are available plus (z) a specified amount of certain equity
contributions made to Hertz.
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