Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions

The Company held derivative instruments with absolute notional values as follows:

	As of December 31,
	2016		2015
Interest rate caps (a)	$	9,736	$	10,179
Interest rate swaps	1,950		900
Foreign exchange contracts	692		811

__________

^(a)  Represents $7.4 billion of interest rate caps sold, partially offset by approximately $2.3 billion of interest rate caps purchased at December 31, 2016 and $8.2 billion of interest rate caps sold, partially offset by approximately $2.0 billion of interest rate caps purchased at December 31, 2015. These amounts exclude $5.1 billion and $6.2 billion of interest rate caps purchased by the Company’s Avis Budget Rental Car Funding subsidiary at December 31, 2016 and 2015, respectively.

Fair Value of Derivative Instruments

Fair values (Level 2) of derivative instruments are as follows:

		As of December 31, 2016				As of December 31, 2015
		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)	$	7	$	4	$	1	$	5
Derivatives not designated as hedging instruments
	Interest rate caps (b)	1		7		1		5
	Foreign exchange contracts (c)	7		2		16		2
	Commodity contracts (c)	—		—		—		1
	Total	$	15	$	13	$	18	$	13

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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 (loss), as discussed in Note 15-Stockholders’ Equity.

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

^(b)  Included in assets under vehicle programs or liabilities under vehicle programs.

^(c)  Included in other current assets or other current liabilities.

Schedule of Effect of Derivatives Recognized

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

		Year Ended December 31,
		2016			2015			2014
Financial instruments designated as hedging instruments (a)
	Interest rate swaps	$	4		$	(1	)	$	(2	)
	Euro-denominated notes	14			34			46
Financial instruments not designated as hedging instruments (b)
	Foreign exchange contracts (c)	42			48			8
	Interest rate caps (d)	(2		)	(2		)	(3		)
	Commodity contracts (e)	—			—			(3		)
Total		$	58		$	79		$	46

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^(a)  Recognized, net of tax, as a component of accumulated 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 year ended December 31, 2016, included a $68 million gain included in interest expense and a $26 million loss included in operating expenses. For the year ended December 31, 2015, included a $32 million gain in interest expense and a $16 million gain included in operating expenses. For the year ended December 31, 2014, included a $10 million gain in interest expense and a $2 million loss included in operating expenses.

^(d)  For the years ended December 31, 2016, 2015 and 2014, amounts are included in vehicle interest, net.

^(e)  Included in operating expenses.

Schedule of Carrying Amounts and Estimated Fair Values

The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows:

		As of December 31, 2016				As of December 31, 2015
		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Corporate debt
	Short-term debt and current portion of long-term debt	$	279	$	280	$	26	$	26
	Long-term debt	3,244		3,265		3,435		3,478
Debt under vehicle programs
	Vehicle-backed debt due to Avis Budget Rental Car Funding	$	6,695	$	6,722	$	6,796	$	6,836
	Vehicle-backed debt	2,176		2,187		2,060		2,071
	Interest rate swaps and interest rate caps (a)	7		7		4		4

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^(a)  Derivatives in liability position.