Avis 2012 Annual Report Download - page 98

Download and view the complete annual report

Please find page 98 of the 2012 Avis annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 129

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129

F-42
Debt Instruments
The fair value of the Company’s financial instruments is generally determined by reference to market values resulting
from trading on a national securities exchange or in an over-the-counter market. In some cases where quoted market
prices are not available, prices are derived by considering the yield of the benchmark security that was issued to initially
price the instruments and adjusting this rate by the credit spread that market participants would demand for the
instruments as of the measurement date. In situations where long-term borrowings are part of a conduit facility backed
by short-term floating rate debt, the Company has determined that its carrying value approximates the fair value of this
debt. The carrying amounts of cash and cash equivalents, available-for-sale securities, accounts receivable, program cash
and accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these assets and
liabilities.
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.
21. Segment Information
The Company’s chief operating decision maker assesses performance and allocates resources based upon the separate
financial information from the Company’s operating segments. In identifying its reportable segments, the Company
considered the nature of services provided, the geographical areas in which the segments operated and other relevant
factors. The Company aggregates two of its operating segments into its International reportable segment.
Management evaluates the operating results of each of its reportable segments based upon revenue and “Adjusted
EBITDA”, which is defined as income from continuing operations before non-vehicle related depreciation and
amortization, any impairment charge, transaction-related costs, non-vehicle related interest and income taxes. The
Company’s presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other
companies.
Year Ended December 31, 2012
North
America
International
Truck
Rental
Corporate
and Other (a)
Total
Net revenues
$
4,640
$
2,342
$
374
$
1
$
7,357
Vehicle depreciation and lease charges, net
943
483
45
-
1,471
Vehicle interest, net
246
38
13
-
297
Adjusted EBITDA
556
234
33
(21)
802
Non-vehicle depreciation and amortization
78
46
1
-
125
Segment assets exclusive of assets under vehicle
programs
3,065
1,740
90
224
5,119
Assets under vehicle programs
7,394
2,300
405
-
10,099
Capital expenditures (excluding vehicles)
72
60
-
-
132
__________
(a) Includes the results of operations of the Company’s investments, unallocated corporate overhead and the elimination of
transactions between segments.