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Segment Information
 9 Months Ended
Sep. 30, 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 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 management services and is not considered a separate reportable segment in accordance with applicable accounting standards, together with other business activities, such as its claim management services.

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 before income taxes plus non-cash purchase 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. 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.

Revenues and adjusted pre-tax income (loss) by segment and the reconciliation to consolidated amounts are summarized below.
 
Three Months Ended September 30,
 
Revenues
 
Adjusted Pre-Tax Income (Loss)
(In millions)
2015
 
2014
 
2015
 
2014
U.S. Car Rental
$
1,739

 
$
1,768

 
$
246

 
$
209

International Car Rental
687

 
795

 
151

 
136

Worldwide Equipment Rental
401

 
413

 
54

 
79

All Other Operations
149

 
145

 
18

 
17

Total reportable segments
$
2,976

 
$
3,121

 
469

 
441

Corporate (1)
 
 
 
 
(109
)
 
(118
)
Consolidated adjusted pre-tax income (loss)
 
 
 
 
360

 
323

Adjustments:
 
 
 
 
 
 
 
Acquisition accounting(2)
 
 
 
 
(32
)
 
(32
)
Debt-related charges(3)
 
 
 
 
(15
)
 
(13
)
Restructuring and restructuring related charges(4)
 
 
 
 
(18
)
 
(55
)
Acquisition related costs and charges(5)
 
 
 
 
—

 
(1
)
Equipment rental spin-off costs(6)
 
 
 
 
(6
)
 
(14
)
Impairment charges and asset write-downs(7)
 
 
 
 
(6
)
 
—

Integration expenses(8)
 
 
 
 
(1
)
 
(1
)
Relocation costs(9)
 
 
 
 
—

 
(3
)
Other(10)
 
 
 
 
26

 
—

Income (loss) before income taxes
 
 
 
 
$
308

 
$
204


 
Nine Months Ended September 30,
 
Revenues
 
Adjusted Pre-Tax Income (Loss)
(In millions)
2015
 
2014
 
2015
 
2014
U.S. Car Rental
$
4,873

 
$
4,989

 
$
509

 
$
515

International Car Rental
1,679

 
1,918

 
203

 
154

Worldwide Equipment Rental
1,131

 
1,155

 
130

 
197

All Other Operations
439

 
425

 
52

 
47

Total reportable segments
$
8,122

 
$
8,487

 
894

 
913

Corporate (1)
 
 
 
 
(354
)
 
(346
)
Consolidated adjusted pre-tax income (loss)
 
 
 
 
540

 
567

Adjustments:
 
 
 
 
 
 
 
Acquisition accounting(2)
 
 
 
 
(94
)
 
(98
)
Debt-related charges(3)
 
 
 
 
(47
)
 
(36
)
Restructuring and restructuring related charges(4)
 
 
 
 
(87
)
 
(126
)
Acquisition related costs and charges(5)
 
 
 
 
—

 
(10
)
Equipment rental spin-off costs(6)
 
 
 
 
(23
)
 
(27
)
Impairment charges and asset write-downs(7)
 
 
 
 
(15
)
 
(10
)
Integration expenses(8)
 
 
 
 
(5
)
 
(7
)
Relocation costs(9)
 
 
 
 
(4
)
 
(7
)
Other(10)
 
 
 
 
29

 
22

Income (loss) before income taxes
 
 
 
 
$
294

 
$
268


(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 other 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 8, "Restructuring." Also represents incremental costs incurred directly supporting business transformation initiatives. Such costs include transition costs incurred in connection with 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, consulting costs and legal fees related to the accounting review and investigation and costs associated with the separation of certain executives.
(5)
Represents costs related to acquisitions and strategic initiatives.
(6)
Represents expenses associated with the anticipated HERC spin-off transaction announced in March 2014.
(7)
In 2015, primarily represents first quarter impairments of the former Dollar Thrifty headquarters and a corporate asset and a third quarter impairment of a building in the U.S. Car Rental segment. In 2014, primarily represents a second quarter write-down of assets associated with a terminated business relationship.
(8)
Primarily represents Dollar Thrifty integration related expenses.
(9)
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.
(10)
Includes miscellaneous non-recurring or non-cash items. For 2015, primarily represents the gain on the sale of common stock of CAR Inc, offset by a legal reserve in the International Car Rental segment. For 2014, primarily represents a litigation settlement received in relation to a class action lawsuit filed against an original equipment manufacturer stemming from recalls of their vehicles in previous years.

Depreciation of revenue earning equipment and lease charges, net
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(In millions)
2015
 
2014
 
2015
 
2014
U.S. Car Rental
$
399

 
$
409

 
$
1,200

 
$
1,224

International Car Rental
114

 
143

 
310

 
381

Worldwide Equipment Rental
86

 
78

 
243

 
235

All Other Operations
118

 
116

 
$
349

 
340

Total
$
717

 
$
746

 
$
2,102

 
$
2,180


Total assets
(In millions)
September 30, 2015
 
December 31, 2014
U.S. Car Rental
$
13,828

 
$
13,712

International Car Rental
3,853

 
3,358

Worldwide Equipment Rental
4,021

 
3,836

All Other Operations
1,507

 
1,458

Corporate
1,726

 
1,716

Total
$
24,935

 
$
24,080



The increase in total assets for the International Car Rental segment is primarily the result of additional fleet acquired to meet seasonal leisure demand during the summer period. The decrease in total assets for Corporate is primarily the result of a reduction in restricted cash.