Hertz 2010 Annual Report Download - page 154

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Debt
For borrowings with an initial maturity of 93 days or less, fair value approximates carrying value because
of the short-term nature of these instruments. For all other debt, fair value is estimated based on quoted
market rates as well as borrowing rates currently available to us for loans with similar terms and average
maturities (Level 2 inputs). The aggregate fair value of all debt at December 31, 2010 was
$12,063.5 million, compared to its aggregate carrying value of $11,429.6 million. The aggregate fair
value of all debt at December 31, 2009 was $10,795.7 million, compared to its aggregate carrying value
of $10,530.4 million.
Derivative Instruments and Hedging Activities
The following table summarizes our financial assets and liabilities measured at fair value on a recurring
basis as of December 31, 2010 and 2009 (in millions of dollars):
Fair Value of Derivative Instruments(1)
Asset Derivatives(2) Liability Derivatives(2)
December 31, December 31, December 31, December 31,
2010 2009 2010 2009
Derivatives designated as hedging
instruments under ASC 815:
HVF interest rate swaps ........... $ — $ — $ — $12.8
Derivatives not designated as hedging
instruments under ASC 815:
Gasoline swaps ................. 3.1 2.2 — —
Interest rate caps ................ 7.2 8.2 7.2 5.6
Foreign exchange forward contracts . . 2.6 7.6 11.1 5.7
Foreign exchange options ......... 0.1 — — —
Total derivatives not designated as
hedging instruments under ASC
815 ...................... 13.0 18.0 18.3 11.3
Total derivatives .................. $13.0 $18.0 $18.3 $24.1
(1) All fair value measurements were primarily based upon significant observable (Level 2) inputs.
(2) All asset derivatives are recorded in ‘‘Prepaid expenses and other assets’’ and all liability derivatives are recorded in ‘‘Other
accrued liabilities’’ on our consolidated balance sheets.
Amount of Gain or
Amount of Gain or (Loss) Reclassified
(Loss) Recognized in from Accumulated Amount of Gain or
Other Comprehensive Other Comprehensive (Loss) Recognized in
Income on Derivative Income into Income Income on Derivative
(Effective Portion) (Effective Portion) (Ineffective Portion)
Years ended December 31,
2010 2009 2010 2009 2010 2009
Derivatives in ASC 815 Cash
Flow Hedging Relationship:
HVF interest rate swaps ..... $12.8 $(12.8) $(85.1) $(74.6)(1) $— $—
Note:The location of both the effective portion reclassified from ‘‘Accumulated other comprehensive income (loss)’’ into income
and the ineffective portion recognized in income is in ‘‘Interest expense’’ on our consolidated statement of operations.
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