Financial Instruments (Tables)

3 Months Ended

9 Months Ended

Sep. 30, 2013

Sep. 30, 2013

Investments, All Other Investments [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions

As of September 30, 2013, the Company held derivative instruments with absolute notional values as follows:

	As of
	September 30, 2013
Interest rate caps (a)	$	6,959
Interest rate swaps	904
Foreign exchange forward contracts	77
Foreign exchange swaps	704

__________

^(a)  Represents $4.7 billion of interest rate caps sold and approximately $2.2 billion of interest rate caps purchased. These amounts exclude $2.5 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 September 30, 2013				As of December 31, 2012
		Carrying Amount		Estimated Fair     Value (a)		Carrying Amount		Estimated Fair     Value (a)
Corporate debt
	Short-term debt and current portion of long-term debt	$	181	$	181	$	57	$	58
	Long-term debt, excluding convertible debt	3,128		3,192		2,720		2,903
	Convertible debt	75		135		128		171
Debt under vehicle programs
	Vehicle-backed debt due to Avis Budget Rental Car Funding (AESOP) LLC	$	6,128	$	6,231	$	5,203	$	5,391
	Vehicle-backed debt	2,502		2,510		1,599		1,613
	Interest rate swaps and interest rate contracts (b)	6		6		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 September 30, 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	$	—	$	1
Derivatives not designated as hedging instruments
	Currency exchange contracts (b)	4		4		3		8
	Interest rate contracts (c)	3		6		—		4
	Interest rate swaps (a)	—		—		—		12
	Commodity contracts (b)	—		2		—		—
	Total	$	7	$	13	$	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 or other current liabilities.

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

Schedule Of Effect Of Derivatives Recognized

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

		Three Months Ended   September 30,						Nine Months Ended   September 30,
		2013			2012			2013		2012
Derivatives designated as hedging instruments
	Interest rate swaps (a)	$	—		$	—		$	1	$	11
Derivatives not designated as hedging instruments (b)
	Currency exchange contracts (c)	(13		)	(2		)	22		—
	Commodity contracts (d)	—			3			—		4
	Interest rate contracts (e)	(2		)	(5		)	5		(13		)
	Total	$	(15	)	$	(4	)	$	28	$	2

__________

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

^(b)  Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures being hedged.

^(c)  For the three months ended September 30, 2013, included a $16 million loss in interest expense and a $3 million gain in operating expenses. For the nine months ended September 30, 2013, included a $13 million gain in interest expense and a $9 million gain in operating expenses. For the three and nine months ended September 30, 2012, amounts were included in operating expenses.

^(d)  Included in operating expense.

^(e)  Included in interest expense.