Hertz 2014 Annual Report Download - page 40

Table of Contents
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Certain new or proposed laws and regulations with respect to the banking and finance industries, including the Dodd-Frank Wall Street Reform and
Consumer Protection Act and amendments to Regulation AB, could restrict our access to certain financing arrangements and increase our
financing costs, which could have a material adverse effect on our financial position, results of operations, liquidity and cash flows.

                  
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As of December 31, 2014, we had debt outstanding of $15,993 million Our substantial indebtedness could materially adversely affect us. For
example, it could: (i) make it more difficult for us to satisfy our obligations to the holders of our outstanding debt securities and to the lenders
under our various credit facilities, resulting in possible defaults on, and acceleration or early amortization of, such indebtedness; (ii) be difficult to
refinance or borrow additional funds in the future; (iii) require us to dedicate a substantial portion of our cash flows from operations and investing
activities to make payments on our debt, which would reduce our ability to fund working capital, capital expenditures or other general corporate
purposes; (iv) increase our vulnerability to general adverse economic and industry conditions (such as credit-related disruptions), including interest
rate fluctuations, because a portion of our borrowings are at floating rates of interest and are not hedged against rising interest rates, and the risk
that one or more of the financial institutions providing commitments under our revolving credit facilities fails to fund an extension of credit under
any such facility, due to insolvency or otherwise, leaving us with less liquidity than expected; (v) place us at a competitive disadvantage to our
competitors that have proportionately less debt or comparable debt at more favorable interest rates or on better terms; and (vi) limit our ability to
react to competitive pressures, or make it difficult for us to carry out capital spending that is necessary or important to our growth strategy and our
efforts to improve operating margins. While the terms of the agreements and instruments governing our outstanding indebtedness contain certain
restrictions upon our ability to incur additional indebtedness, they do not fully prohibit us from incurring substantial additional indebtedness and do
not prevent us from incurring obligations that do not constitute indebtedness. If new debt or other obligations are added to our current liability levels
without a corresponding refinancing or redemption of our existing indebtedness and obligations, these risks would increase. For a description of the
amounts we have available under certain of our debt facilities, see Item 7, "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Liquidity and Capital Resources—Borrowing Capacity and Availability” included in this Annual Report and Note 6, "Debt," to
the Notes to our consolidated financial statements included in this Annual Report under the caption Item 8, "Financial Statements and
Supplementary Data.
Our ability to manage these risks depends on financial market conditions as well as our financial and operating performance, which, in turn, is
subject to a wide range of risks, including those described under “Risks Related to Our Business” included in this Annual Report.
If our capital resources (including borrowings under our revolving credit facilities and access to other refinancing indebtedness) and operating cash
flows are not sufficient to pay our obligations as they mature or to fund our liquidity needs, we may be forced to do, among other things, one or
more of the following: (i) sell certain of our assets; (ii) reduce the size of our rental fleet; (iii) reduce or delay capital expenditures; (iv) obtain
additional equity capital; (v) forgo business opportunities, including acquisitions and joint ventures; or (vi) restructure or refinance all or a portion of
our debt on or before maturity.
We cannot assure you that we would be able to accomplish any of these alternatives on a timely basis or on satisfactory terms, if at all.
Furthermore, we cannot assure you that we will maintain financing activities and cash flows sufficient to permit us to pay the principal, premium, if
any, and interest on our indebtedness. If we cannot refinance or otherwise pay our obligations as they mature and fund our liquidity needs, our
business, financial condition, results of operations, cash flows, liquidity, ability to obtain financing and ability to compete in our industry could be
materially adversely affected.


We rely significantly on asset-backed and asset-based financing to purchase cars. If we are unable to refinance or replace our existing asset-
backed and asset-based financing or continue to finance new car acquisitions through asset-
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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