Avis 2012 Annual Report Download - page 49

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42
As we discussed above, as of December 31, 2012, we have cash and cash equivalents of $606 million, available borrowing
capacity under our committed facilities of $875 million, and available capacity under our vehicle programs of approximately
$2.5 billion.
Our liquidity position may be negatively affected by financial market disruptions or a downturn in the U.S. and worldwide
economies, which may result in unfavorable conditions in the vehicle rental industry, in the asset-backed financing market,
and in the credit markets generally. We believe these factors have in the past affected and could in the future affect the debt
ratings assigned to us by credit rating agencies and the cost of our borrowings. Additionally, a downturn in the worldwide
economy or a disruption in the credit markets could impact our liquidity due to (i) decreased demand and pricing for vehicles
in the used vehicle market, (ii) increased costs associated with, and/or reduced capacity or increased collateral needs under,
our financings, (iii) the adverse impact of vehicle manufacturers, including General Motors Company, Ford Motor Company,
Chrysler Group LLC, PSA Peugeot Citroën, Volkswagen Group, Toyota Motor Corporation, Kia Motors America, Inc., Fiat
Group Automobiles S.p.A. and Renault, S.A., being unable or unwilling to honor their obligations to repurchase or guarantee
the depreciation on the related program vehicles, (iv) disruption in our ability to obtain financing due to negative credit events
specific to us or affecting the overall debt market and (v) the effect of any of Realogy, Wyndham or Travelport being unable
or unwilling to honor their respective obligations under the agreements governing the Separation (see Item 1A. Risk Factors
for further discussion).
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 facility and other borrowings. The financial covenants of our senior credit facility
include maximum leverage and minimum coverage ratio requirements. As of December 31, 2012, we were in compliance
with the financial covenants in our senior credit facility.
Contractual Obligations
The following table summarizes our principal future contractual obligations as of December 31, 2012:
2013
2014
2015
2016
2017
Thereafter
Total
Corporate debt (a)
$
57
$
395
$
19
$
45
$
309
$
2,080
$
2,905
Debt under vehicle
programs (b)
756
2,203
1,343
1,120
927
457
6,806
Debt interest
400
354
269
235
189
162
1,609
Operating leases (c)
506
343
260
201
140
615
2,065
Commitments to
purchase vehicles (d)
5,077
4
-
-
-
-
5,081
Tax obligations (e)
-
-
-
-
-
39
39
Defined benefit
pension plan
contributions (f)
16
-
-
-
-
-
16
Other purchase
commitments (g)
98
42
16
9
3
-
168
$
6,910
$
3,341
$
1,907
$
1,610
$
1,568
$
3,353
$
18,689
__________
(a) Consists primarily of the Company’s approximately $2.0 billion of fixed and floating rate senior notes, $738 million of floating rate
term loans and $128 million of convertible senior notes.
(b) Represents debt, including related party debt due to Avis Budget Rental Car Funding (see Note 15 to our Consolidated Financial
Statements), and capital leases, which were issued to support the purchase of vehicles.
(c) Operating lease obligations are presented net of sublease rentals to be received (see Note 16 to our Consolidated Financial Statements).
(d) Represents commitments to purchase vehicles, the majority of which are from General Motors Company, Ford Motor Company and
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 16 to our Consolidated Financial Statements).
(e) Primarily represents income tax uncertainties, $15 million of which is subject to indemnification by Realogy and Wyndham. We are
unable to estimate the period in which cash payments related to these income tax uncertainties are expected to be paid.
(f) Represents the expected contributions to our defined benefit pension plans in 2013. The amount of future contributions to our defined
benefit pension plans will depend on the rates of return generated from plan assets and other factors (see Note 19 to our Consolidated
Financial Statements) and are not included above.
(g) Primarily represents commitments under service contracts for information technology and telecommunications and marketing
agreements with travel service companies.