Hertz 2014 Annual Report Download - page 131

Table of Contents


that operated its Advantage Rent A Car business, or “Advantage,” for approximately $16 million, plus the value of current assets as of the closing
date, which was approximately $4 million. Pursuant to the terms of a support agreement, or the "Simply Wheelz Support Agreement," Hertz also
agreed to provide financial support to the buyer of Advantage in the amount of $17 million over a period of three years from the closing date (with
the present value of $16 million as of December 31, 2012). As a result of the Advantage divestiture, Hertz realized a loss (before income taxes) of
approximately $31 million as of December 31, 2012.
To assist the buyer of Advantage in securing alternative fleet financing arrangements, Hertz entered into a senior note credit agreement (the
“Simply Wheelz Credit Agreement”), pursuant to which Hertz agreed, subject to certain conditions, to loan Simply Wheelz, on a senior unsecured
basis, up to $45 million over 5 years (2.5 years weighted average life) at varied interest rates up to 13% over the life of the loan. Further, Hertz
agreed to sublease vehicles to the buyer of Advantage for use in continuing the operations of Advantage, for a period no longer than two years
from the closing date. As such, Hertz had significant continuing involvement in the operations of the disposed Advantage business. Therefore, the
operating results associated with the Advantage business are classified as part of the Company's continuing operations in the consolidated
statements of operations for all periods presented.
In October 2013, Simply Wheelz's parent Franchise Services of North America, or "FSNA," requested that Hertz forbear from seeking collection of
all amounts owed to it by Simply Wheelz and agree to renegotiate certain aspects of the commercial arrangements with Hertz, including the
financial terms on which Hertz was subleasing vehicles to Simply Wheelz. On November 2, 2013, Hertz terminated the applicable sublease
contracts, and on November 5, 2013, Simply Wheelz filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code.
Pursuant to Sections 363 and 365 of the Bankruptcy Code, Simply Wheelz agreed to sell substantially all of its assets to The Catalyst Capital
Group Inc., or “Catalyst.” On December 16, 2013, in connection with Simply Wheelz’s bankruptcy proceedings, Hertz entered into a settlement
agreement with Simply Wheelz, FSNA, Catalyst and certain other parties thereto, which provided Simply Wheelz and Catalyst with, among other
things, the right to continue to use the vehicles subject to the Hertz subleases in exchange for certain payments and the orderly return of such
vehicles to Hertz. In addition, the Simply Wheelz Purchase Agreement, the Simply Wheelz Support Agreement and the Simply Wheelz Credit
Agreement, which had no amounts outstanding at the time, were terminated.

The Company's debt consists of the following (in millions):



























Senior Term Facility 3.68%

Floating

3/2018

$ 2,083

$ 2,104
Senior ABL Facility 2.83%

Floating

3/2016 - 3/2017

344

289
Senior Notes(2) 6.58%

Fixed

4/2018–10/2022

3,900

3,900
Promissory Notes 7.00%

Fixed

1/2028

27

49
Convertible Senior Notes N/A

N/A

N/A

—

84
Other Corporate Debt 3.86%

Floating

Various

74

77
Unamortized Net Premium






3

—
Total Corporate Debt






6,431

6,503




















HVF U.S. Fleet Variable Funding Notes:









HVF Series 2009-1(3) N/A

N/A

N/A

—

60







—

60
HVF U.S. Fleet Medium Term Notes









HVF Series 2009-2(3) 5.38%

Fixed

3/2013–3/2015

404

808
119
Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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