Stockholders' Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity

14. Stockholders’ Equity

During the nine months ended September 30, 2012, concurrently with the Company’s repurchase of a portion of its 3 ¹/₂% convertible notes, the Company repurchased warrants for the purchase of the Company’s common stock for $26 million and sold an equal portion of its convertible note hedge for $38 million, reducing the number of shares related to each of the hedge and warrant by approximately 12 million.

Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income were as follows:

	Currency Translation Adjustments		Net Unrealized Gains (Losses) on Cash Flow Hedges			Net Unrealized Gains on Available-for Sale Securities		Minimum Pension Liability Adjustment			Accumulated Other Comprehensive Income
Balance, January 1, 2012	$	159	$	(13	)	$	2	$	(70	)	$	78
Current period change		14		11			—		—			25
Balance, September 30, 2012	$	173	$	(2)		$	2	$	(70	)	$	103

All components of accumulated other comprehensive income are net of tax, except currency translation adjustments, which exclude income taxes related to indefinite investments in foreign subsidiaries.

Total Comprehensive Income

Comprehensive income consists of net income and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net income.

The components of other comprehensive income were as follows:

	Three Months  Ended September 30,					Nine Months  Ended September 30,
	2012		2011			2012		2011
Net income	$	280	$	82		$	336	$	141
Other comprehensive income:
Currency translation adjustment		26		(75	)		14		(37	)
Net unrealized gains (losses) on available-for-sale securities, net of tax		2		—			—		2
Net unrealized gains on cash flow hedges, net of tax		—		8			11		24
		28		(67	)		25		(11	)
Total comprehensive income	$	308	$	15		$	361	$	130

During the nine months ended September 30, 2012 and 2011, the Company’s net unrealized losses on cash flow hedges decreased by $20 million and $40 million ($11 million and $24 million, net of tax), respectively, in 2012 primarily due to the realization of losses in income, and in 2011 primarily due to unrealized gains on derivatives used to manage the interest-rate risk associated with the Company’s vehicle-backed debt and floating rate debt. Such decreases during the nine months ended September 30, 2012 and 2011 included $19 million and $39 million ($12 million and $24 million, net of tax), respectively, related to the Company’s vehicle-backed debt and were offset by a corresponding change in the Company’s investment in Avis Budget Rental Car Funding on the Consolidated Condensed Balance Sheets.