Segment Information

3 Months Ended

Mar. 31, 2012

Segment Information

Segment Information

Note 10—Segment Information

Our operating segments are aggregated into reportable business segments based primarily upon similar economic characteristics, products, services, customers, and delivery methods. We have identified two reportable segments: rental and leasing of cars, crossovers and light trucks, or "car rental," and rental of industrial, construction, material handling and other equipment, or "equipment rental." Other reconciling items include general corporate assets and expenses, certain interest expense (including net interest on corporate debt), as well as other business activities, such as our third party claim management services. Donlen is included in the car rental reportable segment.

Adjusted pre-tax income (loss) is the measure utilized by management in making decisions about allocating resources to segments and measuring their performance. We believe this measure best reflects the financial results from ongoing operations. Adjusted pre-tax income (loss) is calculated as income (loss) before income taxes plus other reconciling items, non-cash purchase accounting charges, non-cash debt charges and certain one-time charges and non-operational items. The contribution of our reportable segments to revenues and adjusted pre-tax income (loss) and the reconciliation to consolidated amounts are summarized below (in millions of dollars).

	Three Months Ended March 31,
	Revenues				Adjusted Pre-Tax Income (Loss)
	2012		2011		2012			2011
Car rental	$	1,658.2	$	1,510.3	$	91.6		$	61.3
Equipment rental		302.1		268.2		25.9			10.2
Total reportable segments		1,960.3		1,778.5		117.5			71.5
Other		0.6		1.5
Total	$	1,960.9	$	1,780.0
Adjustments:
Other reconciling items(1)						(88.1	)		(87.5	)
Purchase accounting(2)						(24.1	)		(20.6	)
Non-cash debt charges(3)						(25.2	)		(59.9	)
Restructuring charges						(9.4	)		(4.9	)
Restructuring related charges(4)						(0.6	)		(0.5	)
Acquisition related costs						(6.9	)		(2.8	)
Management transition costs						—			(2.5	)
Premiums paid on debt(5)						—			(51.7	)
Loss before income taxes					$	(36.8	)	$	(158.9	)

(1)

Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities such as our third-party claim management services.

(2)

Represents the purchase accounting effects of the Acquisition on our results of operations relating to increased depreciation and amortization of tangible and intangible assets and accretion of revalued workers' compensation and public liability and property damage liabilities. Also represents the purchase accounting effects of subsequent acquisitions on our results of operations relating to increased depreciation and amortization of tangible and intangible assets.

(3)

Represents non-cash debt charges relating to the amortization and write-off of deferred debt financing costs and debt discounts.

(4)

Represents incremental costs incurred directly supporting our business transformation initiatives. Such costs include transition costs incurred in connection with our 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.

(5)

Represents premiums paid to redeem our 10.5% Senior Subordinated Notes and a portion of our 8.875% Senior Notes.

Total assets increased $606.6 million from December 31, 2011 to March 31, 2012. The increase was primarily related to increases in our car rental and equipment rental segments' revenue earning equipment, partly offset by decreases in our cash and cash equivalents, primarily relating to the redemption of our 8.875% Senior Notes and our 7.875% Senior Notes, and fleet receivables, due to the timing of sales of revenue earning equipment.