Hertz 2013 Annual Report Download - page 141
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Table of Contents
Interest rate caps $0.9
$ —
$0.9
$ —
Foreign currency forward contracts 3.4
—
3.4
—
Foreign exchange options 0.2
—
0.2
—
Total $4.5
$ —
$4.5
$ —
Gasoline swaps $0.1
$ —
$0.1
$ —
Interest rate caps 0.9
—
0.9
—
Foreign currency forward contracts 4.5
—
4.5
—
Total $5.5
$ —
$5.5
$ —
Gasoline swaps
Gasoline swaps classified as Level 2 assets and liabilities are priced using quoted market prices for similar assets or liabilities in active
markets.
Interest rate caps
Interest rate caps classified as Level 2 assets and liabilities are priced using quoted market prices for similar assets or liabilities in active
markets.
Foreign currency forward contracts
Foreign currency forward contracts classified as Level 2 assets and liabilities are priced using quoted market prices for similar assets or
liabilities in active markets.
Foreign exchange options
Foreign currency forward contracts classified as Level 2 assets and liabilities are priced using quoted market prices for similar assets or
liabilities in active markets.
Fair Value of Financial Instruments
The fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, to the extent the underlying
liability will be settled in cash, approximate carrying values because of the short-term nature of these instruments.
Marketable securities held by us consist of debt securities classified as available-for-sale, which are carried at fair value and are included
within "Prepaid expenses and other assets." Unrealized gains and losses, net of related income taxes, are included in "Accumulated other
comprehensive loss." As of December 31, 2013 and December 31, 2012, the fair value of debt securities was $151.0 million and $0.0
million, respectively. Unrealized gain of $21.0 million was recognized for the year ended December 31, 2013. Hertz classifies its investment
in the China Auto Rental convertible notes within Level 3 because it is valued using significant unobservable inputs. To estimate the fair
value, Hertz utilized a binomial valuation model. The most significant unobservable inputs we use are our estimates of the underlying equity
value of the investee. The discount rate and volatility used in the measurements of fair value were 6.5% and 40%, respectively, and are
based on the underlying risk associated with our estimate of the underlying equity value of the investee, as well as the terms of the
respective contracts. The credit rating of the investee, general business conditions, liquidity, and underlying equity value could materially
affect the fair value of the convertible notes. Hertz periodically conducts reviews and engages valuation specialists to verify pricing and
assesses liquidity to determine
137
Source: HERTZ CORP, 10-K, March 31, 2014 Powered by Morningstar® Document Research℠
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