Hertz 2011 Annual Report Download - page 137

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
a security interest primarily in the owned rental car fleet used in our car rental operations in Australia and
certain contractual rights related to such vehicles. In connection with the issuance of the Australian
Securitization, an interest rate cap was purchased by the foreign subsidiaries. Concurrently, Hertz sold
an offsetting interest rate cap, thereby neutralizing the hedge on a consolidated basis and reducing the
net cost of the hedge. See Note 13—Financial Instruments.
Brazilian Fleet Financing
In December 2010, a foreign subsidiary amended its asset-based credit facility, or as amended, the
‘‘Brazilian Fleet Financing,’’ which was the primary fleet financing for our rental car operations in Brazil.
In February 2011, we paid off the maturing amount of the primary Brazilian Fleet Financing and the
collateral thereunder was released and the guaranty thereunder was terminated. As of December 31,
2011, our Brazilian operating subsidiary is party to certain other local financing arrangements, which are
collateralized by certain of its assets.
Capitalized Leases
References to the ‘‘Capitalized Leases’’ include the capitalized lease financings outstanding in the
United Kingdom, or the ‘‘U.K. Leveraged Financing,’’ Australia, The Netherlands and the United States.
The amount available under the U.K. Leveraged Financing, which is the largest portion of the Capitalized
Leases, increased over the term of the facility to £195.0 million (the equivalent of $301.5 million as of
December 31, 2011).
Restricted Net Assets
As a result of the contractual restrictions on Hertz’s or its subsidiaries’ ability to pay dividends to us
(directly or indirectly) under various terms of our debt, as of December 31, 2011, the restricted net assets
of our subsidiaries exceeded 25% of our total consolidated net assets.
Financial Covenant Compliance
Under the new terms of our amended Senior Term Facility and Senior ABL Facility, we are not subject to
ongoing financial maintenance covenants; however, 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. As of December 31, 2011,
we were not subject to such contractually specified fixed charge coverage ratio.
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