Dollar Rent A Car 2009 Annual Report Download - page 41

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levels are typically the lowest in the first and fourth quarters when rental demand is at a seasonal low.
During 2009, the Company reduced its overall fleet to match its fleet levels with expected demand levels
and to reduce its financing requirements. Restricted cash at December 31, 2009 increased $26.0 million
from the previous year, including $22.8 million available for vehicle purchases or debt payoffs coupled
with $3.2 million of interest income earned on restricted cash and investments. The Company expects to
continue to fund its revenue-earning vehicles with cash provided from operations and from disposal of
used vehicles. The Company also used net cash for non-vehicle capital expenditures of $15.5 million.
These expenditures consist primarily of airport facility improvements for the Company’s rental locations
and investments in IT equipment and systems. The Company estimates non-vehicle capital expenditures
to be approximately $25 million in 2010 related to airport facility projects and IT equipment and systems.
Cash used in investing activities was $198.4 million for 2008. The principal use of cash in investing
activities was the purchase of revenue-earning vehicles, which totaled $2.2 billion. This use of cash
offset $2.5 billion in proceeds from the sale of used revenue-earning vehicles. The Company’s need for
cash to finance vehicles is seasonal and typically peaks in the second and third quarters of the year when
fleet levels build to meet seasonal rental demand. Fleet levels are typically the lowest in the first and
fourth quarters when rental demand is at a seasonal low. Restricted cash at December 31, 2008
increased $463.6 million from the previous year, including $454.7 million available for vehicle purchases
or debt payoffs coupled with $8.9 million of interest income earned on restricted cash and investments.
The Company expects to continue to fund its revenue-earning vehicles with cash provided from
operations and from disposal of used vehicles. The Company also used net cash for non-vehicle capital
expenditures of $28.9 million. These expenditures consist primarily of airport facility improvements for the
Company’s rental locations and investments in IT equipment and systems. In addition, the Company
used cash for franchise acquisitions of $2.1 million in 2008.
Cash used in investing activities was $465.3 million for 2007. The principal use of cash in investing
activities was the purchase of revenue-earning vehicles, which totaled $4.0 billion. This use of cash was
primarily offset by $3.4 billion in proceeds from the sale of used revenue-earning vehicles. The
Company’s need for cash to finance vehicles is seasonal and typically peaks in the second and third
quarters of the year when fleet levels build to meet seasonal rental demand. Fleet levels are the lowest in
the first and fourth quarters when rental demand is at a seasonal low. Restricted cash at December 31,
2007 decreased $256.8 million from the previous year, including $270.8 million used for vehicle financing
partially offset by interest income earned on restricted cash and investments of $14.0 million. The
Company used cash for non-vehicle capital expenditures of $40.6 million. These expenditures consist
primarily of airport facility improvements for the Company’s rental locations and investments in IT
equipment and systems. In addition, the Company used cash for franchise acquisitions of $30.3 million in
2007.
Financing Activities
Cash used in financing activities was $644.1 million for 2009 primarily due to the repayment of amounts
outstanding under the Liquidity Facility and the Conduit Facility in the amount of $274.9 million and
$215.0 million, respectively. Additionally, due to non-renewal of its vehicle manufacturer and bank lines
of credit, the Company repaid $233.7 million of debt outstanding under these arrangements. The
Company also prepaid $20 million of its Term Loan and paid $6.6 million in deferred financing cost
associated with the amendments to the Senior Secured Credit Facilities. The Company also paid $6.6
million in fees related to the issuance of an additional 6.6 million shares of common stock in November
2009. These uses of cash were partially offset by $129.6 million of proceeds from issuance of common
shares.
Cash used in financing activities was $180.2 million for 2008 primarily due to the maturity of the 2004
Series asset backed medium term notes totaling $500 million, a pay down of $70.6 million in the Term
Loan and a decrease of $49.0 million in the limited partner interest in the Canadian funding limited
partnership (Canadian fleet financing), partially offset by a net increase in the issuance of commercial
paper, including the Liquidity Facility (hereinafter defined) of $249.1 million and an increase of $203.0
million under the Conduit Facility.
Cash used in financing activities was $182.0 million for 2007 primarily due to a decrease of $413.0 million
under the Conduit Facility, the maturity of asset backed medium term notes totaling $312.5 million, a net
decrease in the issuance of commercial paper totaling $153.1 million and share repurchases totaling
$71.5 million. Cash used in financing activities was partially offset by the issuance of $500 million in
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