Avis 2006 Annual Report Download - page 48

Table of Contents
Corporate indebtedness consisted of:
Maturity
Date
As of December 31,
2006 2005
Change
Corporate debt:
6
7
/ 8 % notes
(a)
-
$
-
$
850
$
(850
)
4.89% notes
(a)
-
-
100
(100
)
6
1
/ 4 % notes
(a)
-
-
798
(798
)
6
1
/ 4 % notes
(a)
-
-
349
(349
)
7
3
/ 8 % notes
(a)
-
-
1,192
(1,192
)
7
1
/ 8 % notes
(a)
-
-
250
(250
)
Revolver borrowings
(b)
-
7
(7
)
Net hedging losses
(c)
-
(47
)
47
-
3,499
(3,499
)
Avis Budget Car Rental corporate debt:
Floating rate term loan
(d)
April 2012
838
-
838
Floating rate notes
(d)
May 2014
250
-
250
7
5
/ 8 % notes
(d)
May 2014
375
-
375
7
3
/ 4 % notes
(d)
May 2016
375
-
375
1,838
-
1,838
Other
4
9
(5
)
$
1,842
$
3,508
$
(1,666
)
(a)
During third quarter 2006, we repaid an aggregate principal amount of $950 million due in August 2006 under the 6
7
/ 8 % and 4.89%
notes. In connection with the execution of our separation plan, during July 2006, we completed a tender offer for $2.6 billion of our
corporate debt by redeeming approximately $2.5 billion aggregate principal amount of our 6
1
/ 4 % notes due in January 2008 and March
2010, 7
3
/ 8 % notes due in January 2013 and 7
1
/ 8 % notes due in March 2015 for cash of approximately $2.9 billion, including accrued
interest. We redeemed the remaining portion of such corporate debt in third quarter 2006. In connection with such debt extinguishment, we
recorded a pretax charge of $313 million during third quarter 2006.
(b)
Outstanding borrowings at December 31, 2005 do not include $350 million of borrowings for which our former Travelport subsidiary was
the primary obligor. This amount is included within liabilities of discontinued operations on our Consolidated Balance Sheet at
December 31, 2005.
(c)
As of December 31, 2005, the balance represents $153 million of net mark-to-market adjustments on current interest rate hedges, partially
offset by $106 million of net gains resulting from the termination of interest rate hedges. As discussed above, we repaid all of the
outstanding debt associated with these derivatives and retired all such derivatives during third quarter 2006.
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(d)
In connection with the execution of our separation plan, Avis Budget Car Rental borrowed $1,875 million in April 2006, which consisted
of (i) $1 billion of unsecured fixed and floating rate notes and (ii) an $875 million secured floating rate term loan under a credit facility.
The floating rate term loan and floating rate notes bear interest at three month LIBOR plus 125 basis points and three month LIBOR plus
250 basis points, respectively. We swapped a substantial portion of this floating rate indebtedness to fixed rate exposure in 2006 through
the use of interest rate derivatives.