XML 48 R17.htm IDEA: XBRL DOCUMENT v2.4.0.6
Segment Information
 9 Months Ended
Sep. 30, 2012
Segment Reporting [Abstract]  
Segment Information
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. Donlen is included in the car rental reportable segment.
Adjusted pre-tax income is calculated as income (loss) before income taxes plus non-cash purchase accounting charges, non-cash debt 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 is important to management because it allows management to assess operational performance of our 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 our operational performance on the same basis that management uses internally. 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 September 30,
 
Revenues
 
Adjusted Pre-Tax Income
(Loss)
 
2012
 
2011
 
2012
 
2011
Car rental
$
2,152.6

 
$
2,109.1

 
$
428.7

 
$
375.3

Equipment rental
363.0

 
321.7

 
76.2

 
55.9

Total reportable segments
2,515.6

 
2,430.8

 
504.9

 
431.2

Other
0.6

 
1.5

 
 

 
 

Total
$
2,516.2

 
$
2,432.3

 
 

 
 

Adjustments:
 
 
 
 
 
 
 
Other reconciling items(1)
 

 
 

 
(73.8
)
 
(77.9
)
Purchase accounting(2)
 

 
 

 
(23.9
)
 
(19.1
)
Non-cash debt charges(3)
 

 
 

 
(13.6
)
 
(14.8
)
Restructuring charges
 

 
 

 
(1.5
)
 
(1.9
)
Restructuring related charges(4)
 

 
 

 
(2.0
)
 
(3.2
)
Derivative gains(5)
 

 
 

 
0.1

 
0.1

Management transition costs
 

 
 

 
—

 
(1.5
)
Acquisition related costs
 

 
 

 
(8.1
)
 
(4.6
)
Income before income taxes
 

 
 

 
$
382.1

 
$
308.3


 
Nine Months Ended September 30,
 
Revenues
 
Adjusted Pre-Tax Income
(Loss)
 
2012
 
2011
 
2012
 
2011
Car rental
$
5,700.4

 
$
5,388.3

 
$
797.8

 
$
678.8

Equipment rental
1,000.1

 
891.6

 
144.6

 
99.5

Total reportable segments
6,700.5

 
6,279.9

 
942.4

 
778.3

Other
1.8

 
4.7

 
 

 
 

Total
$
6,702.3

 
$
6,284.6

 
 

 
 

Adjustments:
 
 
 
 
 
 
 
Other reconciling items(1)
 

 
 

 
(235.6
)
 
(244.1
)
Purchase accounting(2)
 

 
 

 
(76.9
)
 
(62.2
)
Non-cash debt charges(3)
 

 
 

 
(46.1
)
 
(89.9
)
Restructuring charges
 

 
 

 
(27.0
)
 
(40.4
)
Restructuring related charges(4)
 

 
 

 
(7.6
)
 
(6.4
)
Derivative gains(5)
 
 
 
 
0.1

 
0.1

Acquisition related costs
 

 
 

 
(19.6
)
 
(13.6
)
Management transition costs
 

 
 

 
—

 
(4.0
)
Pension adjustment(6)
 

 
 

 
—

 
13.1

Premiums paid on debt(7)
 

 
 

 
—

 
(62.4
)
Income before income taxes
 

 
 

 
$
529.7

 
$
268.5

_______________________________________________________________________________
(1)
Represents general corporate expenses, certain interest expense (including net interest on corporate debt), as well as other business activities.
(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 the mark-to-market adjustment on our interest rate cap.
(6)
Represents a gain for the U.K. pension plan relating to unamortized prior service cost from a 2010 amendment that eliminated discretionary pension increases related to pre-1997 service primarily pertaining to inactive employees.
(7)
Represents premiums paid to redeem our 10.5% Senior Subordinated Notes and a portion of our 8.875% Senior Notes.
Total assets increased $1,879.7 million from December 31, 2011 to September 30, 2012. The increase was primarily related to increases in our car rental and equipment rental segments' revenue earning equipment and receivables, driven by increased volumes, and an increase in restricted cash and cash equivalents related to the timing of purchases and sales of revenue earning vehicles, partly offset by a decreases in our cash and cash equivalents, primarily relating to the redemption of our 8.875% Senior Notes and our 7.875% Senior Notes.