Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2013

Investments, All Other Investments [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions

As of March 31, 2013, the Company held derivative instruments with absolute notional values as follows:

	As of
	March 31, 2013
Interest rate caps (a)	$	6,992
Interest rate swaps	913
Foreign exchange forward contracts	252
Foreign exchange swaps	763

__________

^(a)  Represents $4.7 billion of interest rate caps sold, partially offset by approximately $2.3 billion of interest rate caps purchased, which amount excludes $2.4 billion of interest rate caps purchased by the Company’s Avis Budget Rental Car Funding (AESOP) LLC (“Avis Budget Rental Car Funding”) subsidiary.

Schedule Of Carrying Amounts And Estimated Fair Values

The carrying amounts and estimated fair values of debt instruments were as follows:

	As of March 31, 2013				As of December 31, 2012
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Corporate debt
Short-term debt and current portion of long-term debt (a)	$	29	$	29	$	57	$	58
Long-term debt, excluding convertible debt (a)	3,241		3,443		2,720		2,903
Convertible debt (a)	77		133		128		171
Debt under vehicle programs
Vehicle-backed debt due to Avis Budget Rental Car Funding (AESOP) LLC (a)	$	5,873	$	6,074	$	5,203	$	5,391
Vehicle-backed debt (a)	1,586		1,602		1,599		1,613
Interest rate swaps and interest rate contracts (b)	3		3		4		4

 __________

^(a)  The fair value measurements are based on significant observable inputs (Level 2).

^(b)  Derivatives in a liability position.

Fair Value Of Derivative Instruments

Fair values of derivative instruments were as follows:

	As of March 31, 2013				As of December 31, 2012
	Fair Value, Asset Derivatives		Fair Value, Liability Derivatives		Fair Value, Asset Derivatives		Fair Value, Liability Derivatives
Derivatives designated as hedging instruments
Interest rate swaps (a)	$	—	$	—	$	—	$	1
Derivatives not designated as hedging instruments
Currency exchange contracts (b)	8		8		3		8
Interest rate contracts (c)	—		3		—		4
Interest rate swaps (a)	—		9		—		12
Commodity contracts (b)	2		—		—		—
Total	$	10	$	20	$	3	$	25

__________

Amounts in this table exclude derivatives issued by Avis Budget Rental Car Funding, as it is not consolidated by the Company; however, certain amounts related to the derivatives held by Avis Budget Rental Car Funding are included within accumulated other comprehensive income, as discussed in Note 14—Stockholders’ Equity.

^(a)  Included in other non-current liabilities.

^(b)  Included in other current assets and other current liabilities.

^(c)  Included in assets under vehicle programs and liabilities under vehicle programs

Schedule Of Effect Of Derivatives Recognized

The effect of derivatives recognized in the Company’s Consolidated Condensed Financial Statements were as follows:

	Three Months Ended   March 31,
	2013		2012
Derivatives designated as hedging instruments
Interest rate swaps (a)	$	—	$	7
Derivatives not designated as hedging instruments
Currency exchange contracts (b)	1		(4		)
Commodity contracts (c)	2		6
Interest rate contracts (d)	3		(5		)
Total	$	6	$	4

__________

^(a)  Recognized, net of tax, as a component of other comprehensive income within stockholders’ equity.

^(b)  For the three months ended March 31, 2013, included a $2 million gain in operating expenses, and included a $1 million loss in interest expense. For the three months ended March 31, 2012, amounts were included in operating expenses.

^(c)  Included in operating expense.

^(d)  Included in interest expense.