Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair value of accounts receivable, accounts payable and accrued expenses, to the extent the underlying liability will be settled in cash, approximates the carrying values because of the short-term nature of these instruments.

Cash Equivalents and Investments

The Company’s cash equivalents primarily consist of money market accounts. The Company determines the fair value of cash equivalents using a market approach based on quoted prices in active markets.

Investments in equity and other securities that are measured at fair value on a recurring basis consist of various mutual funds and available for sale securities. The valuation of these securities is based on Level 1 inputs whereby all significant inputs are observable or can be derived from or corroborated by observable market data.

The following table summarizes the ending balances of the Company's cash equivalents and investments.



	September 30, 2016								December 31, 2015
(In millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Money market funds	$	259	$	640	$	—	$	899	$	181	$	49	$	—	$	230
Equity and other securities	43		—		—		43		—		111		—		111
Total	$	302	$	640	$	—	$	942	$	181	$	160	$	—	$	341

CAR Inc.

As further described in Note 4, "Acquisitions and Divestitures," the Company holds an investment in CAR Inc. that was previously accounted for under the equity method and is now accounted for as an available for sale security. As such, the balance of our investment is included in the table above under equity and other securities (Level 1) as of September 30, 2016.

Financial Instruments

The fair value of the Company's financial instruments as of September 30, 2016 are shown in Note 12, "Financial Instruments." The Company's financial instruments are classified as Level 2 assets and liabilities and are priced using quoted market prices for similar assets or liabilities in active markets.

Debt Obligations

The fair value of debt is estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (Level 2 inputs).



	As of September 30, 2016				As of December 31, 2015
(In millions)	Nominal Unpaid Principal Balance		Aggregate Fair Value		Nominal Unpaid Principal Balance		Aggregate Fair Value
Non-vehicle Debt	$	4,736	$	4,826	$	5,991	$	6,070
Vehicle Debt	10,213		10,278		9,857		9,854
Total	$	14,949	$	15,104	$	15,848	$	15,924

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

At December 31, 2015, the Company had long-lived assets held for sale with a fair value of $25 million. During the first quarter of 2016, the Company reclassified a building in its U.S. Rental Car segment with a fair value of $9 million to held and used. During the second quarter of 2016, the Company sold its previous corporate headquarters building in Park Ridge, New Jersey with a fair value of $13 million. During the third quarter of 2016, the company sold real property in its U.S. Rental Car segment with a fair value of $8 million. At September 31, 2016, there were no material amounts of assets or liabilities measured at fair value on a non-recurring basis.

See Note 10, "Tangible Asset Impairments and Asset Write-downs" for information regarding fair value adjustments.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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