Avis 2009 Annual Report Download - page 55

Table of Contents
ability to obtain financing due to negative credit events specific to us or affecting the overall debt market, (v) the impact of an insolvency event
or actual or potential default by any of the financial guaranty firms that have insured a portion of our outstanding vehicle-backed debt and
(vi) the effect of any of Realogy, Wyndham or Travelport being unable or unwilling to honor its obligations under the Separation Agreement and
the Tax Sharing Agreement. Financial guaranty firms Ambac Assurance Corporation, MBIA Insurance Corporation, Assured Guaranty Corp.
and Syncora Guarantee Inc. currently provide financial guaranties for approximately $1.45 billion, $683 million, $250 million and $125 million,
respectively, of our domestic term asset-backed car rental financing. Certain insolvency events by these financial guarantors would result in
principal of the related financings being required to be repaid sooner than anticipated.
Our liquidity position also may be negatively affected if we are unable to remain in compliance with the financial and other covenants associated
with our senior credit facilities and other borrowings. As of December 31, 2009, we were in compliance with the financial covenants in our
senior credit facilities. Commencing with our fiscal quarter ending June 30, 2010, the requirement to maintain trailing twelve month EBITDA
under the financial covenants of our senior credit facilities will be replaced by a maximum leverage ratio.
Contractual Obligations
The following table summarizes our principal future contractual obligations as of December 31, 2009:
50
2010
2011
2012
2013
2014
Thereafter
Total
Long
-
term debt, including current portion
$
12
$
10
$
761
$
1
$
971
$
376
$
2,131
Debt under vehicle programs
1,584
748
1,865
150
-
27
4,374
Debt interest
402
357
257
113
56
87
1,272
Operating leases
378
304
246
179
108
629
1,844
Commitments to purchase vehicles
4,175
-
-
-
-
-
4,175
Tax obligations
383
100
-
-
-
-
483
Other purchase commitments
25
20
11
1
1
-
58
$6,959
$
1,539
$
3,140
$
444
$
1,136
$
1,119
$
14,337
Consists primarily of the Company
’
s $1.0 billion of fixed and floating rate senior notes, $778 million floating rate term loan, and $345
million of convertible senior notes.
Represents debt under vehicle programs (including related party debt due to Avis Budget Rental Car Funding, an unconsolidated bankruptcy
remote qualifying special purpose limited liability company, see Note 18 to our Consolidated Financial Statements), which was issued to
support the purchase of vehicles.
Operating lease obligations are presented net of sublease rentals to be received (see Note 19 to our Consolidated Financial Statements).
Represents commitments to purchase vehicles, the majority of which are from General Motors Company, Ford Motor Company, Hyundai
Motor America or Chrysler Group LLC. These commitments are generally subject to the vehicle manufacturers satisfying their obligations
under the repurchase and guaranteed depreciation agreements. The purchase of such vehicles is generally financed through financings under
vehicle programs in addition to cash received upon the sale of vehicles, many of which were purchased under repurchase and guaranteed
depreciation programs (see Note 19 to our Consolidated Financial Statements).
Primarily represents income tax uncertainties, substantially all of which are subject to indemnification by Realogy and Wyndham and the
timing of which is estimated.
Primarily represents commitments under service contracts for information technology and telecommunications and marketing agreements
with travel service companies.
(a)
(b)
(c)
(d)
(e)
(f)
(a)
(b)
(c)
(d)
(e)
(f)