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52
CONTRACTUAL OBLIGATIONS
The following table summarizes our principal future contractual obligations as of December 31, 2015:
2016 2017 2018 2019 2020 Thereafter Total
Corporate debt $ 26 $ 564 $ 14 $ 948 $ 2 $ 1,962 $ 3,516
Debt under vehicle
programs 1,501 2,884 1,626 1,389 1,513 — 8,913
Debt interest 404 328 242 171 126 206 1,477
Operating leases (a) 570 426 316 225 149 577 2,263
Commitments to purchase
vehicles (b) 7,208 — — — — — 7,208
Defined benefit pension plan
contributions (c) 10 — — — — — 10
Other purchase
commitments (d) 88 41 24 4 3 — 160
Total (e) $ 9,807 $ 4,243 $ 2,222 $ 2,737 $ 1,793 $ 2,745 $ 23,547
__________
(a) Operating lease obligations are presented net of sublease rentals to be received (see Note 14 to our Consolidated Financial Statements)
and include commitments to enter into operating leases.
(b) Represents commitments to purchase vehicles, the majority of which are from Ford, General Motors and Chrysler. These commitments
are generally subject to the vehicle manufacturers satisfying their obligations under the repurchase and guaranteed depreciation
agreements. The purchase of such vehicles is generally financed through borrowings under vehicle programs in addition to cash received
upon the sale of vehicles, many of which were purchased under repurchase and guaranteed depreciation programs (see Note 14 to our
Consolidated Financial Statements).
(c) Represents the expected contributions to our defined benefit pension plans in 2016. The amount of future contributions to our defined
benefit pension plans will depend on the rates of return generated from plan assets and other factors (see Note 17 to our Consolidated
Financial Statements) and are not included above.
(d) Primarily represents commitments under service contracts for information technology, telecommunications and marketing agreements
with travel service companies.
(e) Excludes income tax uncertainties of $37 million, $15 million of which is subject to indemnification by Realogy and Wyndham. We are
unable to estimate the period in which these income tax uncertainties are expected to be settled.
For more information regarding guarantees and indemnifications, see Note 14 to our Consolidated Financial
Statements.
ACCOUNTING POLICIES
Critical Accounting Policies
In presenting our financial statements in conformity with GAAP, we are required to make estimates and
assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required
to make relate to matters that are inherently uncertain as they pertain to future events and/or events that are
outside of our control. If there is a significant unfavorable change to current conditions, it could result in a material
adverse impact to our consolidated results of operations, financial position and liquidity. We believe that the
estimates and assumptions we used when preparing our financial statements were the most appropriate at that
time. Presented below are those accounting policies that we believe require subjective and complex judgments
that could potentially affect reported results. However, our businesses operate in environments where we are paid
a fee for a service performed, and therefore the results of the majority of our recurring operations are recorded in
our financial statements using accounting policies that are not particularly subjective, nor complex.
Goodwill and Other Indefinite-lived Intangible Assets. We have reviewed the carrying value of our goodwill and
other indefinite-lived intangible assets for impairment. In performing this review, we are required to make an
assessment of fair value for our goodwill and other indefinite-lived intangible assets. When determining fair value,
we utilize various assumptions, including the fair market trading price of our common stock and management’s
projections of future cash flows. A change in these underlying assumptions will cause a change in the results of
the tests and, as such, could cause the fair value to be less than the respective carrying amount. In such event,
we would then be required to record a charge, which would impact earnings. We review the carrying value of
goodwill and other indefinite-lived intangible assets for impairment annually, or more frequently if circumstances
indicate that an impairment may have occurred.