(704) 869-3300

(Registrant’s Telephone Number, Including Area Code)

1101 Technology Drive,

Ann Arbor, Michigan 48108

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ¨    No  x

(Note: As a voluntary filer not subject to the filing requirements of Section 13 or 15(d) of the Exchange Act, the registrant has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant would have been required to file such reports) as if it were subject to such filing requirements).

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

There were 1,000 shares outstanding of the registrant’s common stock as of November 13, 2014August 10, 2015 (all of which are privately owned and not traded on a public market).

 .

Index

Affinia Group Intermediate Holdings Inc.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information. When used in this report, the words “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” or future or conditional verbs, such as “could,” “may,” “should,” or “will,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management’s examination of historical operating trends and data are based upon ourthe Company’s current expectations and various assumptions. OurThe Company’s expectations, beliefs and projections are expressed in good faith and we believethe Company believes there is a reasonable basis for them. However, there is no assurance that these expectations, beliefs and projections will be achieved. For a more detailed discussion of these risks and uncertainties, see Part I, “Item 1A. Risk Factors” in our Annual Report on form 10-K for the year ended December 31, 2013.2014. With respect to all forward-looking statements, we claimthe Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

There are a number of risks and uncertainties that could cause ourthe Company’s actual results to differ materially from the forward-looking statements contained in this report. Such risks, uncertainties and other important factors include, among others, domestic and global economic conditions and the resulting impact on the availability and cost of credit; financial viability of key customers and key suppliers; ourthe Company’s dependence on ourits largest customers; increased crude oil and gasoline prices and resulting reductions in global demand for the use of automobiles; the shift in demand from premium to economy products; pricing and pressures from imports; increasing costs for manufactured components, raw materials and energy; the expansion of return policies or the extension of payment terms; risks associated with ourthe Company’s non-U.S. operations; risks related to ourthe Company’s receivables factoring arrangements; product liability and warranty and recall claims brought against us;the Company; reduced inventory levels by ourthe Company’s distributors resulting from consolidation and increased efficiency; environmental and automotive safety regulations; the availability of raw materials, manufactured components or equipment from ourthe Company’s suppliers; challenges to ourthe Company’s intellectual property portfolio; ourthe Company’s ability to develop improved products; the introduction of improved products and services that extend replacement cycles or otherwise reduce demand for ourthe Company’s products; ourthe Company’s ability to achieve cost savings from ourits restructuring plans; ourthe Company’s ability to successfully effect dispositions of existing lines of business; ourthe Company’s ability to successfully combine ourits operations with any businesses we haveit has acquired or may acquire; risk of impairment charges to ourthe Company’s long-lived assets; risk of impairment to intangibles and goodwill; the risk of business disruptions related to a variety of events or conditions including natural and man-made disasters; risks associated with foreign exchange rate fluctuations; risks associated with ourthe Company’s expansion into new markets; the impact on ourthe Company’s tax rate resulting from the mix of ourits profits and losses in various jurisdictions; reductions in the value of ourthe Company’s deferred tax assets; difficulties in developing, maintaining or upgrading information technology systems; risks associated with doing business in corrupting environments; and our substantialthe Company’s leverage and limitations on flexibility in operating ourits business contained in ourthe debt agreements. Additionally, there may be other factors that could cause ourthe Company’s actual results to differ materially from the forward-looking statements. OurThe Company’s forward-looking statements apply only as of the date of this report or as of the date they were made. We undertakeThe Company undertakes no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.

PART I

FINANCIAL INFORMATION

Affinia Group Intermediate Holdings Inc.

Condensed Consolidated Statements of Operations (Unaudited)

See accompanying notes to the condensed consolidated financial statements.

Affinia Group Intermediate Holdings Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

See accompanying notes to the condensed consolidated financial statements.

Affinia Group Intermediate Holdings Inc.

Condensed Consolidated Balance Sheets (Unaudited)

See accompanying notes to the condensed consolidated financial statements.

Affinia Group Intermediate Holdings Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

See accompanying notes to the condensed consolidated financial statements.

Affinia Group Intermediate Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

1. DESCRIPTION OF BUSINESS

Affinia Group Intermediate Holdings Inc. (the(“Affinia” or the “Company”), headquartered in Gastonia, North Carolina, is an innovative global leader in the design, manufacture, distribution and marketing of industrial grade filtration products and services and replacement products in South America. The Company’s broad range of filtration and other products are sold in North America, Europe, South America, Asia and Africa. The Company’s brands include WIX^®, Filtron^TM®, Nakata^® and ecoLAST^®. Additionally, the Company provides private label products for certain customers, including NAPA^®.

The Company is wholly-owned by Affinia Group Holdings Inc. (“Holdings”), a company controlled by affiliates of The Cypress Group, L.L.C. (“Cypress”).

As discussed further in Note 5 to the Condensed Consolidated Financial Statements, “Discontinued Operation—Chassis”Operation”, in the fourthsecond quarter of 2013,2015, management committed to a plan to sell its global chassis business (the “Chassis group”the Brazilian operations of the Affinia South America (“ASA”) to F-M Chassis, an affiliate of Federal-Mogul Corporation.segment. Accordingly, the results of the Chassis groupthese businesses have been included as a component of discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented. The sale of the Chassis group was completed on May 1, 2014.

The accompanying Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. In these Notes to the Condensed Consolidated Financial Statements, the termsterm the “Company,” “we,” “our” and “us” referrefers to Affinia Group Intermediate Holdings Inc. and its direct and indirect subsidiaries on a consolidated basis.

2. BASIS OF PRESENTATION

These Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements do not include all information and notes required by GAAP in the U.S. for annual financial statements. Because the interim Condensed Consolidated Financial Statements and Notes do not include all information and notes required by GAAP in the U.S. for annual financial statements, the Condensed Consolidated Financial Statements and other information included in this quarterly report should be read in conjunction with the Consolidated Financial Statements and Notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.2014.

These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that, in the opinion of management, are necessary to fairly present the financial position and results of operations. Amounts reported in the interim Condensed Consolidated Statement of Operations and the interim Condensed Consolidated Statements of Comprehensive Income (Loss) are not necessarily indicative of amounts expected for the respective annual periods.

In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

3. NEW ACCOUNTING PRONOUNCEMENTS

Accounting Pronouncements Issued But Not Yet Adopted

In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03 “Simplifying the Presentation of Debt Issuance Costs.”  ASU 2015-03 changes the presentation of the debt issuance costs in the financial statements by presenting the costs as a direct deduction from the related debt liability rather than as an asset.  Amortization of the costs will be reported as interest expense.  This ASU is effective for reporting periods beginning after December 15, 2015.  Early adoption is permitted.  The impact of the new ASU would be a reclassification from deferred financing costs to long-term debt in the period of adoption, applied retrospectively.  As of June 30, 2015 the deferred financing costs balance was $12 million.  

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This ASU is effective for reporting periods beginning after December 15, 2016.2017. Early adoption is not permitted. The Company is currently assessing the impact that this new ASU will have on its revenue recognition upon adoption.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern.” ASU 2014-15 requires management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. This ASU is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the updated guidance to have a material impact on the consolidated financial position, results of operations or cash flows.

Adopted Accounting Pronouncements

In April 2014, the FASB issued ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU 2014-08 amends the definition of a discontinued operation in Accounting Standards Codification (“ASC”) 205-20 and requires entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued operations criteria. The FASB issued the ASU to provide more decision-useful information and to make it more difficult for a disposal transaction to qualify as a discontinued operation. In addition, the ASU requires entities to reclassify assets and liabilities of a discontinued operation for all comparative periods in the statement of financial position, as well as significant changes to the presentation requirements within the statement of cash flows. This ASU is effective for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014. Early adoption is permitted. The adoptionSee Note 5 to the Consolidated Financial Statements, “Discontinued Operations” for the impact of this ASU could have a significant impact on the financial statement presentation associated with any disposal transactions that could occur once this ASU becomes effective.accounting pronouncement.

Adopted Accounting Pronouncements

In July 2013, the FASB issued ASU 2013-10, “Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes.” ASU 2013-10 allows the Fed Funds Effective Swap Rate to be designated as a U.S. benchmark interest rate for hedge accounting purposes, in addition to interest rates on direct Treasury obligations of the U.S. government and the London Interbank Offered Rate (“LIBOR”). The amendments also remove the restriction on using different benchmark rates for similar hedges. The amendments are effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The Company does not anticipate the requirements of ASU 2013-10 will have a material impact on the consolidated financial statements because the Company currently has not entered into any new or redesignated hedging relationships that meet these requirements.

In July 2013, the FASB issued ASU 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 clarifies guidance and eliminates diversity in practice on the presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. This new guidance is effective for annual reporting periods beginning on or after December 15, 2013 and subsequent interim periods. The adoption of this standard has not had any impact on the presentation of unrecognized tax benefits in the Condensed Consolidated Balance Sheets.

In March 2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matters (Topic 830)—Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” ASU No. 2013-05 resolves the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. ASU 2013-5 is effective prospectively for the first annual period beginning after December 15, 2013. The adoption of this standard did not have any current impact on the results of operations, cash flows or financial position.

4. SEGMENT INFORMATION

The Company has two operating segments, Filtration and Affinia South America (“ASA”), which are considered reportable segments under ASC 280 “Segment Reporting.” Operating segments are determined based on information used by the chief operating decision maker (“CODM”) in deciding how to allocate resources and evaluate the performance of ourthe Company’s businesses. Management evaluates the performance of its operating segments based primarily on revenue growth and operating profit. Although not considered an operating segment, corporate, eliminations and other includes corporate costs, interest expense and other amounts not allocated to the operating segments.

The Filtration segment is  In the first quarter of 2015, the Company’s largest business unit, having contributed approximately 70%management changed the calculation of global revenues duringsegment earnings whereby certain corporate costs that were previously allocated to the threeoperating segments were no longer allocated.  Accordingly, all of these previously allocated costs remained in corporate, eliminations and nine months ended September 30, 2014. Our Filtrationother.  Prior period segment results were recast to conform to current period presentation.    

  Filtration’s products fit medium and heavy duty trucks, light vehicles, equipment in the off-highway market (i.e. residential and non-residential construction, mining, forestry and agricultural) and equipment for industrial and marine applications. The Filtration segment’sFiltration’s products include oil, air, fuel, cabin air, coolant, hydraulic and other filters for many types of vehicles and machinery. The products are sold under well-known brands, such as WIX^® and Filtron^®, and private label brands including NAPA^®.

The ASA segment focuses on distributing and manufacturing brake, suspension, driveshaft and U-joint components, water and fuel pumps, filters, engine products, motorcycle products, accessories and other critical aftermarket components through its operations in Argentina, Brazil, Uruguay and Venezuela. The majorityhistorical operations in Venezuela, which was closed in the second quarter of 2014. During the second quarter of 2015, management committed to a plan to sell the Brazilian operations within ASA, which is comprised of Automotiva and Pellegrino (“ASA Brazil”) and accordingly the results of that disposal group have been included as a component of discontinued operations and excluded from the tables below.  See Note 5 to the Consolidated Financial Statements, “Discontinued Operation” for further information regarding ASA Brazil. Since ASA Brazil meets the criteria of assets held for sale under ASC Topic 205, “Presentation of Financial Statements,” (“ASC 205”), the results of operations have been reflected as discontinued operations for all periods presented.  Currently, the ASA segment consists of continuing operations in Argentina and Uruguay, as well as the results of the ASA segment’s revenue is generatedVenezuela operations prior to shut down in Brazil. In Brazil, ASA’s operations are conducted through Affinia Automotiva, an aftermarket parts manufacturer and master distributor, and Pellegrino, a warehouse distributor. Affinia Automotiva manufactures Nakata^® brand shock absorbers and distributes those and third party products to warehouse distributors, including Pellegrino.the second quarter of 2014.

The following table presents financial information for each of our reportable segments, as well as for corporate, eliminations and other, and on a consolidated basis:

5. DISCONTINUED OPERATION—CHASSISOPERATIONS

As described further below in the second quarter of 2015, management committed to a plan to sell its Brazilian operations within ASA. In accordance with ASC 205 this portion of the ASA segment met the definition of a disposal group at the time management committed to a plan to sell and, accordingly, the results of operations have been classified as a component of discontinued operations for all periods presented as this disposal represents a strategic shift that will have a significant effect on the Company’s operations and financial results.

On June 12, 2015, Affinia Canada ULC and Affinia Southern Holdings LLC (collectively, “Sellers”), wholly-owned indirect subsidiaries of Affinia Group Intermediate Holdings Inc. (the “Company”), entered into two separate purchase and sale agreements (the “Purchase Agreements”) to sell their equity interests in each of Pellegrino Distribuidora de Autopecas Ltda. (“Pellegrino”) and Affinia Automotiva Ltda. (“Automotiva”).  The purchasers under the Pellegrino Purchase Agreement are Distribuidora Automotiva S.A. and Car Central De Autopecas e Rolamentos Ltda. (the “Pellegrino Purchasers”) and the purchasers under the Automotiva Purchase Agreement are Auto Norte Distribuidora de Pecas Ltda., Cobra Rolamentos e Autopecas Ltda., Distribuidora Automotiva S.A., Jorge C. Schertel, Pedro Molina Quaresma and Sedim-Administracao e Participacoes Ltda. (the “Automotiva Purchasers”)  The closing of each sale is contingent on the simultaneous closing of the other sale, unless waived by the Sellers, and the closing of each sale is contingent on customary closing conditions, including antitrust clearance under Brazilian law.

The purchase price to Sellers for the sale of each of Pellegrino and Automotiva will be paid in Brazilian Reals.  The Pellegrino purchase price is 215,000,000 Brazilian Reals and the purchase price for the sale of Automotiva is 146,285,000 Brazilian Reals (in each case, the “Base Purchase Price”), and, in each case, plus or minus an adjustment reflecting (i) an estimate of interim profits or losses, as applicable, of the Sellers related to the Pellegrino or Automotiva business, respectively, each calculated in accordance with a process established in the respective Purchase Agreement, and (ii) minus a percentage of certain claims that may arise after signing and before closing.  After closing, the parties will determine a final purchase price reflecting the actual interim profits and losses and such claims, as well as other adjustments, calculated in accordance with a process established in the respective Purchase Agreement.

This transaction is expected to close in the third quarter of 2015.  The gain on sale of ASA Brazil will be dependent on the exchange rate in effect at the date of closing, as well as the impact of the adjustments at closing described above.  The proceeds from sale are required to be used to pay down the Company’s outstanding debt.  The Consolidated Statements of Cash Flows were not adjusted to reflect this operation as a discontinued operation for any period presented.

The following table shows the net sales, cost of sales, gross profit, selling general and administrative expenses, operating profit, income before tax provision, income tax provision and net income that are included within Income from discontinued operations, net of tax on the Condensed Consolidated Statement of Operations associated with the ASA Brazil disposal group:

The following tables shows the ASA Brazil disposal group’s asset and liabilities that are included in assets of discontinued operations and liabilities of discontinued operations on the Condensed Consolidated Balance Sheets:

The following table shows the depreciation, amortization and capital expenditures that are included within the consolidated statement of cash flow associated with the ASA Brazil disposal group.

In the fourth quarter of 2013, management committed to a plan to sell the Chassis group. Pursuant to ASC Topic 205,“Presentation of Financial Statements,” the Chassis group met the definition of a disposal group at the time management committed to a plan to sell the group and, accordingly, the results of operations of the Chassis group have been classified as a component of discontinued operations. On January 21, 2014, Affinia entered into an Asset Purchase Agreement, as amended, with Federal-Mogul Chassis LLC (formerly known as VCS Quest Acquisition LLC) (“FM Chassis”), an affiliate of Federal-Mogul Corporation, pursuant to which FM Chassis agreed to purchase the Chassis group. This transaction closed on May 1, 2014. The consolidated statementsConsolidated Statements of cash flowsCash Flows were not adjusted to reflect this group as a discontinued operation for any period presented.

Upon the closing of this transaction, in May 2014, Affinia received cash proceeds of $140 million, which represented the agreed upon selling price of $150 million less a holdback of consideration of $10 million until completion of certain post-closing performance obligations. In September 2014, the post-closing performance obligations were completed and the Company received $9 million of cash proceeds with the remaining $1 million allocated to a post-closing purchase price adjustment. There are no additional material obligations of either party associated with this transaction.

The sale of the Chassis group resulted in a pre-tax gain of $32 million, of which $21 million was recorded in the second quarter of 2014 and $11 million was recorded in the third quarter of 2014. These amounts are reflected in the Condensed Consolidated Statements of Operations within Income from discontinued operations, net of tax. The Company released an $18 million capital loss valuation allowance as a result of the sale, the tax benefit of which offset the tax expense incurred by the gain on the sale. This resulted in a tax expense of $6less than $1 million on the sale transaction.

The sale of the Chassis group resulted in a pre-tax gain of $21 million, excluding the $10 million holdback, which is reflected in the Condensed Consolidated Statements of Operations within Income from discontinued operations, net of tax.

In addition to the gain on the sale discussed above, theThe following table shows the Chassis group’s net sales, income before tax provision, income tax provision and net income that are included within Income from discontinued operations, net of tax on the Condensed Consolidated Statements of Operations:Operations associated with the Chassis disposal group:

Affinia and FM Chassis entered into a transition services agreement (“TSA”) effective

In addition to the amounts reflected in the tables above associated with the sale on May 1, 2014. The TSA provides for certain administrativeASA Brazil and other services and support to be provided by Affinia to FM Chassis and to be provided by FM Chassis to Affinia. Most of the transition services will expire during 2014 or 2015. The TSA was established as an arm’s length transaction and is intended for the contracting parties to recover costs of the services provided.

The following table shows the Chassis group’s assets and liabilities that are included in assets of discontinued operations and liabilities ofGroup, (Loss) income from discontinued operations on the Condensed Consolidated Balance Sheets:Statement of Operations includes additional amounts of $19 million for both the three and six months ended June 30, 2014.  These additional amounts include the pre-tax gain on the sale of the Chassis group discussed above.

6. DERIVATIVES AND HEDGING

The Company’s financial derivative assets and liabilities consist of standard currency forward contracts and interest rate swaps. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

All derivative instruments are recognized on our balance sheet at fair value. The fair value measurements of ourCompany uses foreign currency forward contracts and interest rate swaps to manage foreign exchange and interest rate risks, respectively.  The primary use of the foreign currency forward contracts is to hedge the risks associated with changes in foreign exchange rates.  Interest rate swaps are used to manage interest rate risk associated with borrowings.  The Company executes derivative contracts for risk management purposes and does not engage in any speculative or trading activity.    

All derivative instruments are recorded at fair value as assets or liabilities on the Condensed Consolidated Balance Sheets.  Fair value is determined using observable market data provided by recognized independent third-party financial information providers and is based upon Level 2 inputs consistingunder the fair value hierarchy within ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”). There are no cash collateral requirements related to any of observable market data, as reported by a recognized independent third-party financial information provider. Based upon the Company’s periodic assessmentopen derivative instruments.

Changes in the fair value of its own creditworthiness, and of the creditworthiness of the counterparties to its derivative instruments that qualify for and for which the Company has elected hedge accounting in accordance with ASC 815 “Derivatives and Hedging” (“ASC 815”) are reflected as a component of Accumulated Other Comprehensive Income (Loss) (“AOCI”) until the hedged transaction impacts earnings.  Changes in the fair value measurementsof derivative agreements that either do not qualify for hedge accounting, have not been designated as hedges or for which the hedge has been de-designated are not adjusted for nonperformance risk.

Currency Forward Contract Derivatives

OurThe Company operates globally and is exposed to foreign currency exchange rate fluctuations in the normal course of business.  The Company’s foreign currency exposure relates primarily to certain non-functional currency denominated assets and liabilities, primarily accounts receivable, accounts payable and intercompany balances.  To minimize the risk associated with changes in foreign currency exchange rates, the Company has established a program that utilizes foreign currency forward contracts to offset the risk associated with the effects of certain foreign currency exposures.  Gains or losses on the Company’s foreign currency exposure are intended to be mitigated by gains or losses on the foreign currency forward contracts.  These foreign currency forward contracts generally have terms of six months or less and are entered into at the prevailing market exchange rate at the end of each month.    

Prior to the third quarter of 2014, the Company did not formally designate foreign currency forward contracts as hedges for accounting purposes and, accordingly, changes in the fair value of these contracts were recognized in current period earnings.  Beginning in the third quarter of 2014, the Company entered into foreign currency forward contracts for anticipated future transactions and these contracts are designated as cash flow hedges.  In accordance with ASC 815, the effective portion of these cash flow hedges are included as a component of AOCI until the underlying transaction impacts earnings.  At the time the underlying transaction impacts earnings, the Company will de-designate the hedging instrument and reflect the change in fair value in current earnings to offset the remeasurement impact of the gross receivable or payable balance until the underlying transaction is settled.        

The Company’s currency forward contracts are valued using then-current spot and forward market data as provided by external financial institutions. We enterThe Company enters into currency forward contracts with banking institutions of only the highest tiered credit ratings and thus the counterparty credit risk associated with these contracts is not considered significant.

We enter into short-term currency forward contracts which are intendedInterest Rate Risk Management

The Company is exposed to offset the currency exchange gain (loss) related to the re-measurement process and are not designated as hedges of specific monetary asset balances subject to currency risks. Therefore, any changes in interest rates as a result of the fair valueissuance of these short-term currency forward contracts are recognizedvariable-rate and fixed-rate debt.  Interest rate risk is managed by limiting variable-rate exposure and monitoring changes in earnings each accounting period. The aggregate notional amounts of outstanding short-term currency forward contracts were $43 million and $86 million as of September 30, 2014 and December 31, 2013, respectively. During the three months and nine months ended September 30, 2014, we recorded losses of less than $1 million and $1 million, respectively,interest rates.  To manage risks associated with short-term currency forward contracts. Duringchanges in interest rates, the three and nine months ended September 30, 2013, we recorded gains of less than $1 million and losses of less than $1 million, respectively, associated with short-term currency forward contracts.

Additionally, beginning in the third quarter of 2014, we entered into currency forward contracts which are intended to offset against foreign exchange risk for certain forecasted gross receivable and payable balances. These currency forward contracts are considered highly effective based on critical terms matching and the result ofde minimis testing. Therefore, the gains or losses of these hedges are deferred as a component of “Accumulated Other Comprehensive Income (Loss)” (“AOCI”) and reclassified into net income in the same period during which the hedged transaction affects net income. The aggregate notional amounts of outstanding currency forward contracts were $38 million as of September 30, 2014. There were no gains or losses recorded for these currency forward contracts in the three and nine months ended September 30, 2014.

The Company’s outstanding currency forward contracts are recorded in the Condensed Consolidated Balance Sheets as either “Other current assets” or “Other accrued expenses,” depending on whether the contracts are in asset or liability positions at the end of each reporting period. Currency forward contract gains and losses are recognized in “Other income and expense, net” in the Condensed Consolidated Statements of Operations in the reporting period of occurrence.

Interest Rate Derivatives

On April 25, 2013, we enteredCompany enters into interest rate swaps having an aggregate notional value of $300 million to effectively fix the interest rate of interest on a portion of our Term Loan B-2 until April 25, 2020.variable-rate debt.  The Company fundsdesignates its business operations with a combination of fixed and floating-rate debt. Therefore, our reported results from operations may be adversely impacted by rising interest rates. The Company’s interest rate risk policy seeks to minimize the long-term cost of debt, subject to a limitation of the maximum percentage of net floating-rate debt versus total debt outstanding.

While our policy does not require that we maintain a specific ratio of net floating-rate debt as a proportion of total debt outstanding, we use interest rate swaps to manage the ratio of net floating-rate debt to total debt outstanding within our policy target range, thereby reducing the potential impact that interest rate variability may have on our consolidated financial results. Our policy strictly prohibits the use of interest rate derivatives to generate trading profits or to otherwise speculate on interest rate movements.

We have designated our interest rate swaps as cash flow hedges as described in ASC 815, “Derivatives and, Hedging”. At the inception of the hedge, the Company formally documents its hedge relationships and risk management objectives and strategy for undertaking the hedge. In addition, the documentation identifies the interest rate swaps as a hedge of specific interest payments on variable rate debt, with the objective to perfectly offset the variability of interest expense as related to specific floating-rate debt. We also specify that the effectiveness of the interest rate swaps in mitigating interest expense variability shall be assessed using the “Hypothetical Derivative Method” as described in ASC 815.

The interest rate swaps are recorded in the Condensed Consolidated Balance Sheets as “Other current assets” or “Other accrued expenses,” depending on whether the contracts are in asset or liability positions at the end of each reporting period. In compliance with ASC 815, the Company formally assesses the effectiveness of its interest rate swaps at inception and at least every three months thereafter. These assessments have established that swaps have been, and are expected to continue to be, highly effective at offsetting the interest expense variability of the underlying floating rate debt and are therefore eligible for cash flow hedge accounting treatment.

Changesaccordingly, changes in the fair value of derivativesinterest rate swaps designated as cash flow hedges are recorded as a component of other comprehensive income (loss),AOCI to the extent such cash flow hedges are effective.  Amounts are reclassified from other comprehensive income (loss) to earningsAOCI when the underlying hedged items are recognized, during the period that a hedge transaction is terminated, or whenever a portion of the hedge transaction results are deemed ineffective. We

Notional Amounts

The table below shows notional amounts associated with currency forward contracts and interest rate swaps as June 30, 2015 and December 31, 2014:

The following table shows the fair value of interest rate derivatives and the line items in the Condensed Consolidated Balance Sheets where they are reported.  The fair value of foreign currency forward contracts were insignificant at both June 30, 2015 and December 31, 2014.  

The following table shows the gains and losses recognized on de-designated derivatives and the line items on the Condensed Consolidated Statements of Operations where the pretax gains and losses were reported.

The following table shows the gains and losses recognized on cash flow hedges and the line items on the Condensed Consolidated Statements of Operations where such gains and losses are included when reclassified less than $1 millionfrom AOCI.  Amounts for interest rate contracts are reclassified to earnings as interest expense over the term of the related debt.  Amounts for foreign currency forward contracts are reclassified to earnings within other income and $2 million from other comprehensive income (loss) into interest expense, net as the underlying transactions impact earnings.  Amounts associated with foreign currency forward contracts were insignificant during the three and nine months ended SeptemberJune 30, 2014, respectively. There were no amounts reclassified from other comprehensive income (loss) into interest expense during the three or nine months ended September 30, 2013. There have been no gains or losses reclassified from other comprehensive income (loss) into earnings due to hedge ineffectiveness related to any of the Company’s interest rate swap transactions, nor were there gains or losses reclassified to income due to early termination of designated cash-flow hedge transactions during the three2015 and nine months ended September 30, 2014 or 2013.

As of September 30, 2014 and December 31, 2013, the notional amount and fair value of outstanding interest rate swaps outstanding are and were as follows:2014.

7. DEBT

OurAffinia’s debt consists of notes that are publicly traded, an asset-based revolving credit facility (“ABL Revolver”), term loan facilities consisting of Term Loan B-1 and Term Loan B-2 and other short-term borrowings. The fair value framework requires the categorization of ourthe Company’s debt into three levels based upon the assumptions (inputs) used to determine fair value. The fair value of debt and the categorization of the hierarchy level of fair value, net of discount, are and were as follows:

Fair Value of Debt at SeptemberJune 30, 20142015