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Financial Instruments
 12 Months Ended
Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments Financial Instruments
Risk Management
Currency Risk. We use currency exchange contracts to manage our exposure to changes in currency exchange rates associated with our non-U.S.-dollar denominated receivables and forecasted royalties, forecasted earnings of non-U.S. subsidiaries and forecasted non-U.S.-dollar denominated acquisitions. We primarily hedge a portion of our current-year currency exposure to the Australian, Canadian and New Zealand dollars, the euro and the British pound sterling. The majority of forward contracts do not qualify for hedge accounting treatment. The fluctuations in the value of these forward contracts do, however, largely offset the impact of changes in the value of the underlying risk they economically hedge. Forward contracts used to hedge forecasted third-party receipts and disbursements up to 12 months are designated and do qualify as cash flow hedges. We have designated our euro-denominated notes as a hedge of our investment in euro-denominated foreign operations.
The estimated net amount of existing gains or losses we expect to reclassify from accumulated other comprehensive income (loss) to earnings for cash flow and net investment hedges over the next 12 months is not material.
Interest Rate Risk. We use various hedging strategies including interest rate swaps and interest rate caps to create an appropriate mix of fixed and floating rate assets and liabilities. We estimate that $18 million of losses currently recorded in accumulated other comprehensive income (loss) will be recognized in earnings over the next 12 months.
Commodity Risk. We periodically enter into derivative commodity contracts to manage our exposure to changes in the price of gasoline. These instruments were designated as freestanding derivatives and the changes in fair value are recorded in our consolidated results of operations.
Credit Risk and Exposure. We are exposed to counterparty credit risks in the event of nonperformance by counterparties to various agreements and sales transactions. We manage such risk by evaluating the financial position and creditworthiness of such counterparties and by requiring collateral in certain instances in which financing is provided. We mitigate counterparty credit risk associated with our derivative contracts by monitoring the amount for which we are at risk with each counterparty, periodically evaluating counterparty creditworthiness and financial position, and where possible, dispersing our risk among multiple counterparties.
There were no significant concentrations of credit risk with any individual counterparty or groups of counterparties at December 31, 2021 or 2020, other than (i) risks related to our repurchase and guaranteed depreciation agreements with domestic and foreign car manufacturers, and primarily with respect to receivables for program cars that were disposed but for which we have not yet received payment from the manufacturers (see Note 2-Summary of Significant Accounting Policies), (ii) receivables from Realogy and Wyndham related to certain contingent, income tax and other corporate liabilities assumed by Realogy and Wyndham in connection with their disposition and (iii) risks related to leases which have been assumed by Realogy but of which we are a guarantor. Concentrations of credit risk associated with trade receivables are considered minimal due to our diverse customer base. We do not normally require collateral or other security to support credit sales.
Fair Value
Derivative instruments and hedging activities
As described above, derivative assets and liabilities consist principally of currency exchange contracts, interest rate swaps, interest rate caps and commodity contracts. We held derivative instruments with absolute notional values as follows:
As of December 31,
20212020
Foreign exchange contracts$1,655 $1,386 
Interest rate caps (a)
11,900 8,871 
Interest rate swaps1,450 1,950 
__________
(a)Represents $7.2 billion of interest rate caps sold, partially offset by approximately $4.7 billion of interest rate caps purchased at December 31, 2021 and $6.0 billion of interest rate caps sold, partially offset by approximately $2.9 billion of interest rate caps purchased at December 31, 2020. These amounts exclude $3.0 billion and $3.1 billion of interest rate caps purchased by our Avis Budget Rental Car Funding subsidiary at December 31, 2021 and 2020, respectively.
Fair values (Level 2) of derivative instruments are as follows:
As of December 31, 2021As of December 31, 2020
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)
$2 $27 $— $69 
Derivatives not designated as hedging instruments
Foreign exchange contracts (c)
7 10 3 11 
Interest rate caps (b)
11 15 — — 
Total$20 $52 $3 $80 
__________
Amounts in this table exclude derivatives issued by Avis Budget Rental Car Funding, as it is not consolidated by us; 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 16-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.

The effects of derivatives recognized in our Consolidated Financial Statements are as follows:
Year Ended December 31,
202120202019
Financial instruments designated as hedging instruments (a)
Interest rate swaps (b)
$32 $(31)$(23)
Euro-denominated notes (c)
56 (67)17 
Financial instruments not designated as hedging instruments (d)
Foreign exchange contracts (e)
(3)(5)(7)
Interest rate caps (f)
(1)— (1)
Commodity contracts (g)
— (6)3 
Total$84 $(109)$(11)
__________ 
(a)Recognized, net of tax, as a component of accumulated 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 16-Stockholders’ Equity for amounts reclassified from accumulated other comprehensive income (loss) 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 year ended December 31, 2021, included a $2 million loss in interest expense and a $1 million loss included in operating expenses. For the year ended December 31, 2020, included an $3 million loss included in interest expense and a $2 million loss included in operating expenses. For the year ended December 31, 2019, included a $11 million loss in interest expense and a $4 million gain included in operating expenses.
(f)Primarily included in vehicle interest, net.
(g)Included in operating expenses.
Debt Instruments

The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows:
As of December 31, 2021As of December 31, 2020
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Corporate debt
Short-term debt and current portion of long-term debt
$19 $18 $19 $18 
Long-term debt3,990 4,153 4,191 4,337 
Debt under vehicle programs
Vehicle-backed debt due to Avis Budget Rental Car Funding
$8,848 $9,009 $5,080 $5,317 
Vehicle-backed debt2,528 2,559 1,775 1,796 
Interest rate swaps and interest rate caps (a)
14 14 2 2 
___________
(a)Derivatives in liability position.