Avis 2009 Annual Report Download - page 32

Table of Contents
rates or an increase in our own cost of borrowing, our debt service obligations for our variable rate indebtedness would increase even though the
amount of borrowings remained the same, and our results of operations could be adversely affected. As of December 31, 2009, our total
outstanding debt of approximately $6.5 billion included interest rate sensitive debt of approximately $800 million (either by its original terms or
through the use of interest rate derivatives), which had a weighted average interest rate of approximately 4% per annum. During our seasonal
borrowing peak in 2009, outstanding interest rate sensitive debt totaled approximately $2 billion, with a weighted average interest rate of
approximately 4% per annum.
Restrictive covenants in agreements and instruments governing our debt may adversely affect our ability to operate our business.
The terms of certain of our indebtedness, including the indenture governing our senior unsecured notes and the agreement governing our senior
credit facilities contain, and our future debt instruments may contain, various provisions that limit our ability to, among other things:
Risks related to the Cendant Separation
We are relying on Realogy, Wyndham Worldwide and Travelport to fulfill their obligations under the Separation Agreement and other
agreements.
Pursuant to the Separation Agreement and related agreements (including a tax sharing agreement, the “Tax Sharing Agreement”), Realogy and
Wyndham Worldwide are responsible for 62.5% and 37.5%, respectively, of certain contingent and other of our corporate liabilities including
those relating to unresolved tax and legal matters as well as 100% of certain liabilities that relate to their respective businesses (the “Assumed
Obligations”). More specifically, Realogy and Wyndham Worldwide have generally assumed and are responsible for the payment of their
specified percentage of (i) all taxes imposed on us and certain of our subsidiaries and (ii) certain of our contingent and other corporate liabilities
and/or those of our subsidiaries to the extent incurred prior to August 23, 2006. These contingent and other corporate liabilities include liabilities
relating to (i) Cendant’s terminated or divested businesses, including among others, the former PHH and Marketing Services (Affinion)
businesses, (ii) liabilities relating to the sale of Travelport, (iii) Cendant’s litigation that did not pertain to the operations of Realogy, Wyndham
Worldwide, Travelport or our vehicle rental operations,
27
•
incur additional debt;
•
provide guarantees in respect of obligations of other persons;
•
issue redeemable stock and preferred stock;
•
pay dividends or distributions or redeem or repurchase capital stock;
•
prepay, redeem or repurchase debt;
•
make loans, investments and capital expenditures;
•
incur liens;
•
make distributions from our subsidiaries;
•
sell assets and capital stock of our subsidiaries;
•
make acquisitions; and
•
consolidate or merge with or into, or sell substantially all of our assets to, another person.