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Segment Information
12 Months Ended
Dec. 31, 2015
Segment Reporting [Abstract]  
Segment Information
Segment Information

The Company has identified four reportable segments, which are organized based on the products and services provided by its operating segments and the geographic areas in which its operating segments conduct business, as follows:

U.S. Car Rental - rental of cars, crossovers and light trucks, as well as ancillary products and services, in the United States and consists of the Company's United States operating segment;

International Car Rental - rental and leasing of cars, crossovers and light trucks, as well as ancillary products and services, internationally and consists of the Company's Europe and Other International operating segments, which are aggregated into a reportable segment based primarily upon similar economic characteristics, products and services, customers, delivery methods and general regulatory environments;

Worldwide Equipment Rental - rental of industrial construction, material handling and other equipment and consists of the Company's worldwide equipment rental operating segment; and

All Other Operations - includes the Company's Donlen operating segment which provides fleet leasing and fleet management services and is not considered a separate reportable segment in accordance with applicable accounting standards, together with other business activities.

In addition to the above reportable segments, the Company has corporate operations ("Corporate") which includes general corporate assets and expenses and certain interest expense (including net interest on corporate debt).

Adjusted pre-tax income (loss) is calculated as income (loss) before income taxes plus non-cash acquisition accounting charges, debt-related charges relating to the amortization and write-off of debt financing costs and debt discounts and certain one-time charges and non-operational items. Adjusted pre-tax income (loss) is important because it allows management to assess operational performance of its business, exclusive of the items mentioned above. It also allows management to assess the performance of the entire business on the same basis as the segment measure of profitability. Management believes that it is important to investors for the same reasons it is important to management and because it allows them to assess the Company's operational performance on the same basis that management uses internally. When evaluating the Company's operating performance, investors should not consider adjusted pre-tax income (loss) in isolation of, or as a substitute for, measures of the Company's financial performance, such as net income (loss) or income (loss) before income taxes.

The contribution of the Company's reportable segments to revenues and adjusted pre-tax income (loss) and the reconciliation to consolidated amounts are summarized below.
 
Years Ended December 31,
(In millions)
2015
 
2014
 
2013
Revenues
 
 
 
 
 
U.S. car rental
$
6,286

 
$
6,471

 
$
6,331

International car rental
2,148

 
2,436

 
2,378

Worldwide equipment rental
1,518

 
1,571

 
1,539

All other operations
583

 
568

 
527

Total
$
10,535

 
$
11,046

 
$
10,775

Adjusted pre-tax income(a)
 
 
 
 
 
U.S. car rental
$
551

 
$
387

 
$
1,033

International car rental
215

 
144

 
134

Worldwide equipment rental
189

 
258

 
301

All other operations
68

 
62

 
58

Corporate
(451
)
 
(448
)
 
(430
)
Total
$
572

 
$
403

 
$
1,096

Depreciation of revenue earning equipment and lease charges, net
 
 
 
 
 
U.S. car rental
$
1,572

 
$
1,758

 
$
1,281

International car rental
398

 
492

 
528

Worldwide equipment rental
329

 
329

 
299

All other operations
463

 
455

 
425

Total
$
2,762

 
$
3,034

 
$
2,533

Depreciation and amortization, non-fleet assets
 
 
 
 
 
U.S. car rental
$
209

 
$
222

 
$
207

International car rental
37

 
41

 
37

Worldwide equipment rental
77

 
75

 
74

All other operations
10

 
11

 
10

Corporate
19

 
17

 
11

Total
$
352

 
$
366

 
$
339

Interest expense, net
 
 
 
 
 
U.S. car rental
$
165

 
$
172

 
$
187

International car rental
70

 
95

 
113

Worldwide equipment rental
57

 
53

 
46

All other operations
10

 
12

 
14

Corporate
320

 
316

 
347

Total
$
622

 
$
648

 
$
707

 
Years Ended December 31,
(In millions)
2015
 
2014
 
2013
Revenue earning equipment and capital assets, non-fleet
 
 
 
 
 
U.S. car rental:
 
 
 
 
 
Expenditures
$
(7,930
)
 
$
(6,175
)
 
$
(6,242
)
Proceeds from disposals
6,280

 
4,530

 
4,385

Net expenditures
$
(1,650
)
 
$
(1,645
)
 
$
(1,857
)
International car rental:
 
 
 
 
 
Expenditures
$
(2,887
)
 
$
(3,165
)
 
$
(2,640
)
Proceeds from disposals
2,412

 
2,531

 
2,251

Net expenditures
$
(475
)
 
$
(634
)
 
$
(389
)
Worldwide equipment rental:
 
 
 
 
 
Expenditures
$
(670
)
 
$
(658
)
 
$
(694
)
Proceeds from disposals
156

 
197

 
141

Net expenditures
$
(514
)
 
$
(461
)
 
$
(553
)
All other operations:
 
 
 
 
 
Expenditures
$
(1,397
)
 
$
(1,611
)
 
$
(1,012
)
Proceeds from disposals
841

 
1,010

 
556

Net expenditures
$
(556
)
 
$
(601
)
 
$
(456
)
Corporate:
 
 
 
 
 
Expenditures
$
(101
)
 
$
(54
)
 
$
(28
)
Proceeds from disposals
49

 
34

 
4

Net expenditures
$
(52
)
 
$
(20
)
 
$
(24
)
 
As of December 31,
(In millions)
2015
 
2014
Total assets at end of year
 
 
 
U.S. car rental
$
13,614

 
$
13,712

International car rental
3,007

 
3,358

Worldwide equipment rental
3,809

 
3,836

All other operations
1,522

 
1,458

Corporate
1,406

 
1,621

Total
$
23,358

 
$
23,985

Revenue earning equipment, net, at end of year
 
 
 
U.S. car rental
$
7,600

 
$
8,070

International car rental
1,858

 
1,904

Worldwide equipment rental
2,382

 
2,442

All other operations
1,288

 
1,237

Total
$
13,128

 
$
13,653

Property and equipment, net, at end of year
 
 
 
U.S. car rental
$
730

 
$
789

International car rental
135

 
155

Worldwide equipment rental
247

 
265

All other operations
5

 
6

Corporate
131

 
107

Total
$
1,248

 
$
1,322



The Company operates in the United States and in international countries. International operations are substantially in Europe. The operations within major geographic areas are summarized below:
 
Years Ended December 31,
(In millions)
2015
 
2014
 
2013
Revenues
 
 
 
 
 
United States
$
8,066

 
$
8,158

 
$
7,921

International
2,469

 
2,888

 
2,854

Total
$
10,535

 
$
11,046

 
$
10,775

 
As of December 31,
(In millions)
2015
 
2014
Total assets at end of year
 
 
 
United States
$
18,886

 
$
19,077

International
4,472

 
4,908

Total
$
23,358

 
$
23,985

Revenue earning equipment, net, at end of year
 
 
 
United States
$
10,938

 
$
11,235

International
2,190

 
2,418

Total
$
13,128

 
$
13,653

Property and equipment, net, at end of year
 
 
 
United States
$
1,081

 
$
1,118

International
167

 
204

Total
$
1,248

 
$
1,322


(a)
The following table reconciles adjusted pre-tax income to income before income taxes.
 
Years Ended December 31,
(In millions)
2015
 
2014
 
2013
Adjusted pre-tax income (loss):
 
 
 
 
 
U.S. car rental
$
551

 
$
387

 
$
1,033

International car rental
215

 
144

 
134

Worldwide equipment rental
189

 
258

 
301

All other operations
68

 
62

 
58

Total reportable segments
1,023

 
851

 
1,526

Corporate (1)
(451
)
 
(448
)
 
(430
)
Consolidated adjusted pre-tax income (loss)
572

 
403

 
1,096

Adjustments:
 
 
 
 
 
Acquisition accounting(2)
(124
)
 
(132
)
 
(132
)
Debt-related charges(3)
(63
)
 
(53
)
 
(68
)
Restructuring and restructuring related charges(4)
(96
)
 
(159
)
 
(99
)
Acquisition related costs and charges(5)
(3
)
 
(10
)
 
(19
)
Integration expenses(6)
(5
)
 
(9
)
 
(43
)
Equipment Rental spin-off costs(7)
(35
)
 
(39
)
 

Relocation costs(8)
(5
)
 
(9
)
 
(7
)
Premiums paid on debt(9)

 

 
(29
)
Loss on extinguishment of debt(10)

 
(1
)
 
(35
)
Sale of CAR Inc. common stock(11)
133

 

 

Gain on divestitures(12)
51

 

 

Impairment charges and asset write-downs(13)
(57
)
 
(34
)
 
(40
)
Other(14)
(27
)
 
20

 
(21
)
Income (loss) before income taxes
$
341

 
$
(23
)
 
$
603


(1)
Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities.
(2)
Represents the increase in amortization of other intangible assets, depreciation of property and equipment and accretion of revalued liabilities relating to acquisition accounting.
(3)
Represents debt-related charges relating to the amortization of deferred debt financing costs and debt discounts and premiums.
(4)
Represents expenses incurred under restructuring actions as defined in U.S. GAAP. For further information on restructuring costs, see Note 11 "Restructuring," to the Notes to our consolidated financial statements. Also represents incremental costs incurred directly supporting the Company's business transformation initiatives. Such costs include transition costs incurred in connection with its business process outsourcing arrangements and incremental costs incurred to facilitate business process re-engineering initiatives that involve significant organization redesign and extensive operational process changes. Amounts in 2015 and 2014 also includes consulting costs and legal fees related to the accounting review and investigation, one time costs to terminate certain marketing and co-branding agreements, and costs associated with the separation of certain executives during the year.
(5)
Acquisition related costs and charges during the period.
(6)
Primarily represents Dollar Thrifty integration related expenses.
(7)
Represents expenses associated with the anticipated HERC spin-off transaction announced in March 2014. In 2015, $26 million were incurred by HERC and $9 million by Corporate. In 2014, $28 million were incurred by HERC and $11 million by Corporate.
(8)
Represents non-recurring costs incurred in connection with the relocation of the Company's corporate headquarters to Estero, Florida that were not included in restructuring expenses. Such expenses primarily include duplicate facility rent, certain moving expenses, and other costs that are direct and incremental due to the relocation.
(9)
In 2013, represents premiums paid to redeem the Company's 8.50% Former European Fleet Notes.
(10)
In 2013, represents extinguishment of debt for Senior Convertible Notes.
(11)
In 2015, represents the pre-tax gain on the sale of approximately 138 million shares of CAR Inc. common stock.
(12)
In 2015, represents the pre-tax gain on the sale of our HERC France and Spain businesses.
(13)
In 2015, primarily comprised of a $40 million write down of the HERC trade name. Also includes a $6 million impairment on the former Dollar Thrifty headquarters in Tulsa, Oklahoma, a $5 million impairment on a building in the U.S. Car Rental segment, $3 million impairment on a held for sale corporate asset, and write downs of $3 million associated with U.S. Car Rental service equipment and assets. In 2014, primarily comprised of a $13 million impairment related to our former corporate headquarters building in New Jersey, a $10 million impairment of HERC revenue earning equipment held for sale and a $10 million impairment of assets related to a contract termination. In 2013, primarily related to a $40 million impairment in the carrying value of the vehicles subleased to FSNA and its subsidiary, Simply Wheelz.
(14)
Includes miscellaneous, non-recurring or non-cash items. For 2015, primarily represents a charge of $23 million recorded in relation to a French road tax matter. In 2014, primarily comprised of a $19 million litigation settlement received in relation to a class action lawsuit filed against an original equipment manufacturer. In 2013, primarily represents cash premiums of $12 million associated with the conversion of the Senior Convertible Notes and $5 million of depreciation expense related to HERC.