Avis 2014 Annual Report Download - page 108

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F-41
The effects of derivatives recognized in the Company’s Consolidated Financial Statements are as follows:
Year Ended December 31,
2014 2013 2012
Derivatives designated as hedging instruments
Interest rate swaps (a) $(2)$ 1$13
Derivatives not designated as hedging instruments (b)
Foreign exchange contracts (c) 827(31)
Interest rate caps (d) (3) 4 (15)
Commodity contracts (e) (3) 1 3
Total $ — $ 33 $ (30)
__________
(a) Recognized, net of tax, as a component of accumulated other comprehensive income within stockholders’ equity.
(b) Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures
being hedged.
(c) For the year ended December 31, 2014, included a $10 million gain included in interest expense and a $2 million loss included in
operating expenses. For the year ended December 31, 2013, included a $20 million gain in interest expense and a $7 million gain
included in operating expenses. For the year ended December 31, 2012, included a $32 million loss in interest expense and a $1
million gain in operating expenses.
(d) For the year ended December 31, 2014, amounts are included in vehicle interest, net. For the year ended December 31, 2013, $1
million of expense is included in vehicle interest, net and a $5 million gain is included in interest expense. For the year ended
December 31, 2012, amounts are included in vehicle interest, net.
(e) Included in operating expenses.
Debt Instruments
The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows:
As of December 31, 2014 As of December 31, 2013
Carrying
Amount
Estimated
Fair Value
Carrying
Amount
Estimated
Fair Value
Corporate debt
Short-term debt and current portion of long-term
debt, excluding convertible debt $28$28$23$23
Long-term debt, excluding convertible debt 3,392 3,439 3,305 3,416
Convertible debt — — 66 159
Debt under vehicle programs
Vehicle-backed debt due to Avis Budget Rental Car
Funding $ 6,340 $ 6,407 $ 5,656 $ 5,732
Vehicle-backed debt 1,766 1,771 1,668 1,675
Interest rate swaps and interest rate caps (a) 10 10 13 13
___________
(a) Derivatives in liability position.
19. 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 certain of its operating segments
into its reportable segments.
Management evaluates the operating results of each of its reportable segments based upon revenue and
“Adjusted EBITDA,” which the Company defines as income from continuing operations before non-vehicle
related depreciation and amortization, any impairment charge, restructuring expense, early extinguishment
of debt costs, non-vehicle related interest, transaction-related costs and income taxes. The Company’s
presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other
companies.