Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2020

Investments, All Other Investments [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions

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

	As of March 31, 2020
Foreign exchange contracts	$	1,685
Interest rate caps (a)	8,192
Interest rate swaps	2,250
Commodity contracts (millions of gallons of unleaded gasoline)	15

__________

^(a) 

Represents $5.6 billion of interest rate caps sold, partially offset by approximately $2.6 billion of interest rate caps purchased. These amounts exclude $3.0 billion of interest rate caps purchased by the Company’s Avis Budget Rental Car Funding subsidiary as it is not consolidated by the Company.

Fair Value Of Derivative Instruments

Estimated fair values (Level 2) of derivative instruments were as follows: 

		As of March 31, 2020				As of December 31, 2019
		Fair Value, Derivative Assets		Fair Value, Derivative Liabilities		Fair Value, Derivative Assets		Fair Value, Derivative Liabilities
Derivatives designated as hedging instruments
	Interest rate swaps (a)	$	—	$	51	$	—	$	27
Derivatives not designated as hedging instruments
	Foreign exchange contracts (b)	22		31		5		10
	Interest rate caps (c)	—		3		—		1
	Commodity contracts (b)	—		7		—		—
	Total	$	22	$	92	$	5	$	38

__________

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 14–Stockholders’ Equity.

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

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

^(c) 

Included in assets under vehicle programs or liabilities under vehicle programs.

Derivative Instruments, Gain (Loss) [Table Text Block]

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

		Three Months Ended  March 31,
		2020			2019
Derivatives designated as hedging instruments (a)
	Interest rate swaps (b)	$	(18	)	$	(8	)
	Euro-denominated notes (c)	11			16
Derivatives not designated as hedging instruments (d)
	Foreign exchange contracts (e)	27			1
	Commodity contracts (f)	(7		)	3
	Total	$	13		$	12

__________

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

^(b)  Classified as a net unrealized gain (loss) on cash flow hedges in accumulated other comprehensive income (loss). Refer to Note 14–Stockholders’ Equity for amounts reclassified from accumulated other comprehensive income into earnings.

^(c)  Classified as a net investment hedge within currency translation adjustment in accumulated other comprehensive income (loss).

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

^(e)  For the three months ended March 31, 2020, included a $28 million gain in interest expense and a $1 million loss in operating expense. For the three months ended March 31, 2019, included $4 million loss in interest expense and a $5 million gain in operating expense.

^(f) 

Included in operating expense.

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

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

		As of March 31, 2020				As of December 31, 2019
		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Corporate debt
	Short-term debt and current portion of long-term debt	$	118	$	105	$	19	$	19
	Long-term debt	3,396		2,695		3,416		3,572
Debt under vehicle programs
	Vehicle-backed debt due to Avis Budget Rental Car Funding	$	9,350	$	8,989	$	7,936	$	8,077
	Vehicle-backed debt	2,641		2,641		3,129		3,142
	Interest rate swaps and interest rate caps (a)	7		7		3		3

__________

^(a) 

Derivatives in a liability position.