Avis 2015 Annual Report Download - page 108

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F-39
Fair values (Level 2) of derivative instruments are as follows:
As of December 31, 2015 As of December 31, 2014
Fair Value,
Asset
Derivatives
Fair Value,
Liability
Derivatives
Fair Value,
Asset
Derivatives
Fair Value,
Liability
Derivatives
Derivatives designated as hedging instruments
Interest rate swaps (a) $ 1 $ 5 $ 1 $ 3
Derivatives not designated as hedging instruments
Interest rate caps (b) 1 5 — 10
Foreign exchange contracts (c) 16 2 5 2
Commodity contracts (c) — 1 — 1
Total $ 18 $ 13 $ 6 $ 16
__________
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 (loss), as discussed in Note 15-Stockholders’ Equity.
(a) Included in other non-current assets or other non-current liabilities.
(b) Included in assets under vehicle programs or liabilities under vehicle programs.
(c) Included in other current assets or other current liabilities.
The effects of derivatives recognized in the Company’s Consolidated Financial Statements are as follows:
Year Ended December 31,
2015 2014 2013
Financial instruments designated as hedging instruments (a)
Interest rate swaps $ (1) $ (2) $ 1
Euro-denominated notes 34 46 (11)
Financial instruments not designated as hedging instruments (b)
Foreign exchange contracts (c) 48 8 27
Interest rate caps (d) (2) (3) 4
Commodity contracts (e) — (3) 1
Total $ 79 $ 46 $ 22
__________
(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, 2015, included a $32 million gain included in interest expense and a $16 million gain included
in operating expenses. For the year ended December 31, 2014, included a $10 million gain 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.
(d) For the years ended December 31, 2015 and 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.
(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, 2015 As of December 31, 2014
Carrying
Amount Estimated
Fair Value Carrying
Amount Estimated
Fair Value
Corporate debt
Short-term debt and current portion of long-term debt $ 26 $ 26 $ 28 $ 28
Long-term debt 3,435 3,478 3,325 3,439
Debt under vehicle programs
Vehicle-backed debt due to Avis Budget Rental Car
Funding $ 6,796 $ 6,836 $ 6,296 $ 6,407
Vehicle-backed debt 2,060 2,071 1,750 1,771
Interest rate swaps and interest rate caps (a) 4 4 10 10