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Segment Information
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Segment Information
Segment Information

The Company has identified three 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. Rental Car ("U.S. RAC") - rental of vehicles (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 Rental Car ("International RAC") - rental and leasing of vehicles (cars, vans, 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;

•
All Other Operations - includes the Company's Donlen operating segment which provides vehicle 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 non-vehicle debt).

Adjusted pre-tax income (loss) is calculated as income (loss) from continuing operations 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) from continuing operations or income (loss) from continuing operations before income taxes.

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)
2016
 
2015
 
2016
 
2015
U.S. Rental Car
$
1,707

 
$
1,739

 
$
173

 
$
246

International Rental Car
683

 
687

 
142

 
151

All Other Operations
152

 
149

 
19

 
18

Total reportable segments
$
2,542

 
$
2,575

 
334

 
415

Corporate(1)
 
 
 
 
(122
)
 
(126
)
Consolidated adjusted pre-tax income (loss)
 
 
 
 
212

 
289

Adjustments:
 
 
 
 
 
 
 
Acquisition accounting(2)
 
 
 
 
(16
)
 
(23
)
Debt-related charges(3)
 
 
 
 
(11
)
 
(14
)
Loss on extinguishment of debt(4)
 
 
 
 
(20
)
 
—

Restructuring and restructuring related charges(5)
 
 
 
 
(11
)
 
(15
)
Sale of CAR Inc. common stock(6)
 
 
 
 
—

 
56

Impairment charges and asset write-downs(7)
 
 
 
 
(28
)
 
(6
)
Finance and information technology transformation costs(8)
 
 
 
 
(14
)
 
—

Other(9)
 
 
 
 
(4
)
 
(31
)
Income (loss) from continuing operations before income taxes
 
 
 
 
$
108

 
$
256


 
Nine Months Ended September 30,
 
Revenues
 
Adjusted Pre-Tax Income (Loss)
(In millions)
2016
 
2015
 
2016
 
2015
U.S. Rental Car
$
4,697

 
$
4,873

 
$
312

 
$
509

International Rental Car
1,656

 
1,679

 
179

 
203

All Other Operations
441

 
439

 
53

 
52

Total reportable segments
$
6,794

 
$
6,991

 
544

 
764

Corporate(1)
 
 
 
 
(385
)
 
(396
)
Consolidated adjusted pre-tax income (loss)
 
 
 
 
159

 
368

Adjustments:
 
 
 
 
 
 
 
Acquisition accounting(2)
 
 
 
 
(49
)
 
(66
)
Debt-related charges(3)
 
 
 
 
(36
)
 
(44
)
Loss on extinguishment of debt(4)
 
 
 
 
(40
)
 
—

Restructuring and restructuring related charges(5)
 
 
 
 
(41
)
 
(77
)
Sale of CAR Inc. common stock(6)
 
 
 
 
75

 
56

Impairment charges and asset write-downs(7)
 
 
 
 
(31
)
 
(15
)
Finance and information technology transformation costs(8)
 
 
 
 
(40
)
 
—

Other(9)
 
 
 
 
—

 
(37
)
Income (loss) from continuing operations before income taxes
 
 
 
 
$
(3
)
 
$
185


(1)
Represents general corporate expenses, non-vehicle interest expense, as well as other business activities.
(2)
Represents incremental expense associated with amortization of other intangible assets and depreciation of property and other equipment relating to acquisition accounting.
(3)
Represents debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.
(4)
Primarily represents the second quarter 2016 write-off of deferred financing costs as a result of paying off the Senior Term Facility and various vehicle debt refinancings and an early redemption premium of $13 million and the write off of deferred financing costs associated with the redemption of all of the 7.50% Senior Notes during the third quarter 2016.
(5)
Represents expenses incurred under restructuring actions as defined in U.S. GAAP. For further information on restructuring costs, see Note 9, "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. Also includes consulting costs and legal fees related to the accounting review and investigation, primarily in 2015.
(6)
Represents the pre-tax gain on the sale of CAR Inc. common stock.
(7)
In 2016, primarily represents the third quarter impairment of certain assets used in the U.S. Car Rental segment in conjunction with a restructuring program. In 2015, primarily represents an impairment of the former Dollar Thrifty headquarters and a third quarter impairment of a building in the U.S. Car Rental Segment.
(8)
Represents external costs associated with the Company’s finance and information technology transformation programs, both of which are multi-year initiatives to upgrade and modernize the Company’s systems and processes. In the three months ended September 30, 2016, $2 million was incurred by U.S. RAC and $12 million was incurred by Corporate and in the nine months ended September 30, 2016, $11 million was incurred by U.S. RAC and $29 million was incurred by Corporate.
(9)
Includes miscellaneous and non-recurring items including but not limited to acquisition charges, integration charges, and other non-cash items. For the nine months ended September 30, 2016, also includes a settlement gain related to one of our airport locations. In the 2015 periods, also includes a $24 million charge recorded in our International RAC segment related to a French road tax matter.

Depreciation of revenue earning vehicles and lease charges, net
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(In millions)
2016
 
2015
 
2016
 
2015
U.S. Rental Car
$
462

 
$
399

 
$
1,298

 
$
1,200

International Rental Car
116

 
114

 
300

 
310

All Other Operations
117

 
118

 
342

 
349

Total
$
695

 
$
631

 
$
1,940

 
$
1,859


Total assets
(In millions)
September 30, 2016
 
December 31, 2015
U.S. Rental Car
$
13,035

 
$
13,614

International Rental Car
4,493

 
3,002

All Other Operations
1,608

 
1,520

Corporate
1,991

 
1,983

Assets of discontinued operations
—

 
3,390

Total
$
21,127

 
$
23,509



The decrease in total assets for U.S. RAC is primarily due to a decrease in fleet receivables as a result of 2015 program vehicles returned to the original equipment manufacturer. The increase in total assets for International RAC is primarily due to an increase in cash as a result of the proceeds received from the issuance of the 4.125% Senior Notes due October 2021 along with an increase in revenue earning vehicles to meet seasonal demands.