Segment Information

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Information

Segment Information

The reportable segments presented below represent the Company’s operating segments for which separate financial information is available and is utilized on a regular basis by its chief operating decision maker, the Company’s chief executive officer, to assess performance and to allocate resources. In identifying its reportable segments, the Company also considers the nature of services provided by its operating segments, the geographical areas in which the segments operate and other relevant factors. The Company aggregates certain operating segments into its reportable segments. Management evaluates the operating results of each of its reportable segments based upon revenue and “Adjusted EBITDA”, which is defined as income from continuing operations before non-vehicle related depreciation and amortization, any impairment charge, transaction-related costs, non-vehicle related interest and income taxes. The Company’s presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.

				Three Months Ended September 30,
				2013					2012
				Revenues		Adjusted EBITDA			Revenues		Adjusted EBITDA
North America				$	1,513	$	223		$	1,358	$	232
International				773		144			703		129
Truck Rental				109		13			109		14
Corporate and Other (a)				—		(11		)	—		(5		)
	Total Company (b)			$	2,395	369			$	2,170	370
Less:		Non-vehicle related depreciation and amortization				39					30
		Interest expense related to corporate debt, net:
			Interest expense			57					67
			Early extinguishment of debt			—					2
		Transaction-related costs (c)				10					11
		Impairment (d)				33					—
Income before income taxes						$	230				$	260

__________

^(a) Includes unallocated corporate overhead and the elimination of transactions between segments.

^(b) Adjusted EBITDA for the three months ended September 30, 2013 and 2012, includes $14 million and $7 million, respectively, of restructuring expense.

^(c) During the three months ended September 30, 2013, the Company incurred $10 million in transaction-related costs related to the integration of the operations of Avis Europe and the acquisition of Payless. During the three months ended September 30, 2012, the Company incurred $11 million in transaction-related costs related to the integration of the operations of Avis Europe.

^(d)  During the three months ended September 30, 2013, the Company recorded a charge of $33 million for the impairment of the Company’s equity-method investment in its Brazilian licensee.

				Nine Months Ended September 30,
				2013					2012
				Revenues		Adjusted EBITDA			Revenues		Adjusted EBITDA
North America				$	3,905	$	427		$	3,580	$	509
International				1,895		211			1,791		210
Truck Rental				287		12			287		32
Corporate and Other (a)				—		(35		)	1		(15		)
	Total Company (b)			$	6,087	615			$	5,659	736
Less:		Non-vehicle related depreciation and amortization				109					92
		Interest expense related to corporate debt, net:
			Interest expense			170					208
			Early extinguishment of debt			131					52
		Transaction-related costs (c)				37					21
		Impairment (d)				33					—
Income before income taxes						$	135				$	363

__________

^(a)  Includes unallocated corporate overhead and the elimination of transactions between segments.

^(b)  Adjusted EBITDA for the nine months ended September 30, 2013 and 2012, includes $39 million and $26 million, respectively, of restructuring expense.

^(c)  During the nine months ended September 30, 2013, the Company incurred $37 million in transaction-related costs related to the integration of the operations of Avis Europe and costs related to the acquisition and integration of Zipcar and Payless. During the nine months ended September 30, 2012, the Company incurred $21 million in transaction-related costs related to the integration of the operations of Avis Europe.

^(d)  During the nine months ended September 30, 2013, the Company recorded a charge of $33 million for the impairment of the Company’s equity-method investment in its Brazilian licensee.

Since December 31, 2012, there have been no significant changes in segment assets other than in the Company’s North America segment. As of September 30, 2013 and December 31, 2012, North America segment assets under vehicle programs were approximately $8.7 billion and $7.4 billion, respectively, and assets exclusive of assets under vehicle programs were approximately $3.7 billion and $3.1 billion, respectively.