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Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2012
Fair Value of Derivative Instruments

Fair values of derivative instruments are as follows:

 

     As of
December 31, 2012		      As of
December 31, 2011		  
     Fair Value,
Asset
  Derivatives  		      Fair Value,
Liability
  Derivatives  		      Fair Value,
Asset
  Derivatives  		      Fair Value,
Liability
  Derivatives  		  

Derivatives designated as hedging instruments (a)

            

Interest rate swaps (b)

    $ -        $ 1        $ -        $ 3    

Derivatives not designated as hedging instruments (a)

            

Currency exchange forward contracts (c)

      3          8          26          1    

Interest rate swaps (b)

      -          12          -          -    

Interest rate contracts (d)

      -          4          2          4    

Commodity contracts (e)

      -          -          -          1    
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 3        $ 25        $ 28        $ 9    
  

 

 

     

 

 

     

 

 

     

 

 

  

 

 

  (a) 

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 17—Stockholders’ Equity.
  (b) 

Included in other non-current liabilities.
  (c) 

Included in other current assets and other current liabilities.
  (d) 

Included in assets under vehicle programs and liabilities under vehicle programs.
  (e) 

Included in 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,  
             2012                      2011                      2010          

Derivatives designated as hedging instruments

         

Interest rate swaps (a)

    $ 13         $ 33         $ 36     

Derivatives not designated as hedging instruments

         

Currency exchange forward contracts (b)

      (31)          (19)          12     

Interest rate contracts (c)

      (15)          (3)          (4)    

Commodity contracts (d)

      3           -           1     
  

 

 

     

 

 

     

 

 

  

Total

    $ (30)        $ 11         $ 45     
  

 

 

     

 

 

     

 

 

  

 

 

  (a) 

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

For the year ended December 31, 2012, included a $32 million loss included in interest expense, and included a $1 million gain included in operating expenses. For the year ended December 31, 2011, included a $46 million loss in transaction-related costs and a $27 million gain in operating expenses. For the year ended December 31, 2010, amounts were included in operating expenses.
  (c) 

For the year ended December 31, 2011, $2 million of expense is included in vehicle interest, net and $1 million of expense is included in interest expense. For the years ended December 31, 2012 and 2010 amounts are included in vehicle interest, net.
  (d) 

Included in operating expenses.
Schedule of Carrying Amounts and Estimated Fair Values

The carrying amounts and estimated fair values of financial instruments at December 31 are as follows:

 

     2012      2011  
     Carrying
 Amount 		      Estimated
 Fair Value 		      Carrying
 Amount 		      Estimated
 Fair Value 		  

Corporate debt

            

Short-term debt and current portion of long-term debt

    $ 57        $ 58        $ 37        $ 37    

Long-term debt, excluding convertible debt (a)

      2,720          2,903          2,823          2,842    

Convertible debt (a)

      128          171          345          354    

Debt under vehicle programs

            

Vehicle-backed debt due to Avis Budget Rental Car Funding (a)

    $ 5,203        $ 5,391        $ 4,574        $ 4,643    

Vehicle-backed debt (a)

      1,599          1,613          986          1,001    

Interest rate swaps and interest rate contracts (b)

      4          4          4          4    

 

 

  (a) 

The fair value measurements are based on significant observable inputs (Level 2).
  (b) 

Derivatives in liability position.