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Basis of Presentation and Recently Issued Accounting Pronouncements (Policies) | 3 Months Ended
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Mar. 31, 2018
Basis Of Presentation And Recently Issued Accounting Pronouncements [Abstract] |
Basis of Presentation | Basis of Presentation Avis Budget Group, Inc. provides vehicle rental and other mobility solutions to businesses and consumers worldwide. The accompanying unaudited Consolidated Condensed Financial Statements include the accounts and transactions of Avis Budget Group, Inc. and its subsidiaries, as well as entities in which Avis Budget Group, Inc. directly or indirectly has a controlling financial interest (collectively, the “Company”), and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial reporting. The Company operates the following reportable business segments:
• | Americas—consisting primarily of (i) vehicle rental operations in North America, South America, Central America and the Caribbean, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which the Company does not operate directly.
• | International—consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which the Company does not operate directly.
The operating results of acquired businesses are included in the accompanying Consolidated Condensed Financial Statements from the dates of acquisition. The fair value of the assets acquired and liabilities assumed in connection with the Company’s fourth quarter 2017 acquisitions of ACL Hire Limited and various licensees in Europe and North America have not yet been finalized; however, there have been no significant changes to the preliminary allocation of the purchase price during the three months ended March 31, 2018. In presenting the Consolidated Condensed Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the Consolidated Condensed Financial Statements contain all adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These financial statements should be read in conjunction with the Company’s 2017 Form 10-K.
Reclassification, Policy [Policy Text Block] | Reclassifications. Certain reclassifications have been made to prior years’ Consolidated Condensed Financial Statements to conform to the current year presentation. These reclassifications have no impact on reported net loss (see “Adoption of New Accounting Pronouncements” below).
Cash Flows reconciliation (2016-18) [Table Text Block] | As of December 31, 2017, the Company elected to adopt the provisions of ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” early on a retrospective basis. ASU 2016-18 clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows. The following table provides the impact of adoption on the Company’s Consolidated Condensed Statements of Cash Flows for the three months ended March 31, 2017.
| Three Months Ended March 31, 2017
| As Previously Reported |  | Effect of Change |  | As Adjusted
Decrease in program cash | $ | 87 |  |  | $ | (87 | ) |  | $ | — |
Net cash used in investing activities | (972 | ) |  | (87 | ) |  | (1,059 | )
Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash | 8 |  |  | 4 |  |  | 12 |
Net increase in cash and cash equivalents, program and restricted cash | 433 |  |  | (83 | ) |  | 350 |
Cash and cash equivalents, program and restricted cash, beginning of period | 490 |  |  | 230 |  |  | 720 |
Cash and cash equivalents, program and restricted cash, end of period | $ | 923 |  |  | $ | 147 |  |  | $ | 1,070 |
Reconciliation of cash and cash equivalents (2016-18) [Table Text Block] | Restricted Cash. Program cash primarily represents amounts specifically designated to purchase assets under vehicle programs and/or to repay the related debt, as such the Company considers it a restricted cash equivalent. The following table provides a reconciliation of cash and cash equivalents, program and restricted cash reported within the Consolidated Condensed Balance Sheets to the amounts shown in the Consolidated Condensed Statements of Cash Flows.
| As of March 31,
| 2018 |  | 2017
Cash and cash equivalents | $ | 544 |  |  | $ | 923 |
Program cash | 147 |  |  | 142 |
Restricted cash (a) | 10 |  |  | 5 |
Total cash and cash equivalents, program and restricted cash | $ | 701 |  |  | $ | 1,070 |
________
(a) | Included within other current assets.
Vehicle Programs | Vehicle Programs. The Company presents separately the financial data of its vehicle programs. These programs are distinct from the Company’s other activities since the assets under vehicle programs are generally funded through the issuance of debt that is collateralized by such assets. The income generated by these assets is used, in part, to repay the principal and interest associated with the debt. Cash inflows and outflows relating to the acquisition of such assets and the principal debt repayment or financing of such assets are classified as activities of the Company’s vehicle programs. The Company believes it is appropriate to segregate the financial data of its vehicle programs because, ultimately, the source of repayment of such debt is the realization of such assets.
Transaction Related Costs Policy [Policy Text Block] | Transaction-related costs, net. Transaction-related costs, net are classified separately in the Consolidated Condensed Statements of Comprehensive Income. These costs are comprised of expenses related to acquisition-related activities such as due diligence and other advisory costs, expenses related to the integration of the acquiree’s operations with those of the Company, including the implementation of best practices and process improvements, non-cash gains and losses related to re-acquired rights, expenses related to pre-acquisition contingencies and contingent consideration related to acquisitions.
Currency Transactions | Currency Transactions. The Company records the gain or loss on foreign-currency transactions on certain intercompany loans and the gain or loss on intercompany loan hedges within interest expense related to corporate debt, net. During the three months ended March 31, 2018 and 2017, the Company recorded a $1 million gain and an immaterial amount, respectively, on such items.
Adoption of New Accounting Standards | Adoption of New Accounting Pronouncements Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income On January 1, 2018, as a result of a new accounting pronouncement, the Company early adopted ASU 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for the adjustment of deferred taxes due to the reduction of the corporate income tax rate as a result of U.S. tax reform. Accordingly, the Company has reclassified $4 million of net tax benefits from accumulated other comprehensive loss to beginning accumulated deficit related to the following (see Note 14 - Stockholders’ Equity). Prior period amounts have not been retrospectively adjusted.
Currency Translation Adjustments |  | Net Unrealized Gains (Losses) on Cash Flow Hedges |  | Net Unrealized Gains (Losses) on Available-for Sale Securities |  | Minimum Pension Liability Adjustment |  | Accumulated Other Comprehensive Income (Loss)
$ | 7 |  |  | $ | 1 |  |  | $ | — |  |  | $ | (12 | ) |  | $ | (4 | )
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Costs and Net Periodic Postretirement Benefit Cost,” which requires an entity to disaggregate the components of net benefit cost recognized in its consolidated statements of operations. The adoption of this accounting pronouncement did not have a material impact on the Company’s Consolidated Condensed Financial Statements. Recognition and Measurement of Financial Assets and Financial Liabilities On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which makes limited amendments to the classification and measurement of financial instruments. The amendments supersede the guidance to classify equity securities with readily determinable fair values into different categories (trading or available-for-sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies) to be measured at fair value with changes in the fair value recognized through net income. Accordingly, the Company has reclassified $2 million of net unrealized gains associated with available for sale equity securities from accumulated other comprehensive loss to beginning accumulated deficit (see Note 14 - Stockholders’ Equity). Intra-Entity Transfers of Assets Other Than Inventory On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which removes the prohibition in Topic 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The adoption of this accounting pronouncement did not have an impact on the Company’s Consolidated Condensed Financial Statements. Revenue from Contracts with Customers On January 1, 2018, as a result of a new accounting pronouncement, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which outlines a single model for entities to use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance. The new guidance applies to all contracts with customers except for leases, insurance contracts, financial instruments, certain nonmonetary exchanges and certain guarantees. Also, additional disclosures are required about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The Company has adopted the requirements of the new standard on a modified retrospective basis applied to all contracts. Prior periods have not been retrospectively adjusted. As discussed in Leases below, the Company’s rental related revenues will be accounted for under Topic 606 until the adoption of ASU 2016-02, “Leases (Topic 842)” on January 1, 2019. Under Topic 606, each transaction that generates customer loyalty points results in the deferral of revenue generally equivalent to the retail value of the redemption of the loyalty points. The associated revenue will be recognized at the time the customer redeems the loyalty points. Previously, the Company did not defer revenue and recorded an expense associated with the incremental cost of providing the future rental at the time when the loyalty points were earned. In the Company’s Consolidated Condensed Balance Sheet at January 1, 2018, customer loyalty program liability increased approximately $50 million related to the retail value of customer loyalty points earned, with a corresponding increase to accumulated deficit (approximately $40 million, net of tax) due to the cumulative impact of adopting Topic 606. Certain customers may receive cash-based rebates, which are accounted for as variable consideration under Topic 606. The Company estimates these rebates based on the expected amount to be provided to customers and reduces revenue recognized. The impact of adoption of Topic 606 on the Company’s Consolidated Condensed Statement of Comprehensive Income and Consolidated Condensed Balance Sheet was as follows:
| Three Months Ended March 31, 2018
| As Reported |  | Balances without Adoption of Topic 606 |  | Effect of Change
Consolidated Condensed Statement of Comprehensive Income |  |  |  |  |
Revenues | $ | 1,968 |  |  | $ | 1,975 |  |  | $ | (7 | )
Expenses |  |  |  |  |
Operating | 1,092 |  |  | 1,093 |  |  | (1 | )
Total expenses | 2,097 |  |  | 2,098 |  |  | (1 | )
Loss before income taxes | (129 | ) |  | (123 | ) |  | (6 | )
Benefit from income taxes | (42 | ) |  | (40 | ) |  | (2 | )
Net loss | $ | (87 | ) |  | $ | (83 | ) |  | $ | (4 | )
Comprehensive loss | $ | (79 | ) |  | $ | (75 | ) |  | $ | (4 | )
| March 31, 2018
| As Reported |  | Balances without Adoption of Topic 606 |  | Effect of Change
Consolidated Condensed Balance Sheet |  |  |  |  |
Deferred income taxes | $ | 967 |  |  | $ | 955 |  |  | $ | 12 |
Total assets exclusive of assets under vehicle programs | 5,966 |  |  | 5,954 |  |  | 12 |
Total assets | 19,222 |  |  | 19,210 |  |  | 12 |
Accounts payable and other current liabilities | 1,777 |  |  | 1,771 |  |  | 6 |
Total current liabilities | 1,803 |  |  | 1,797 |  |  | 6 |
Other non-current liabilities | 763 |  |  | 713 |  |  | 50 |
Total liabilities exclusive of liabilities under vehicle programs | 6,147 |  |  | 6,097 |  |  | 50 |
Accumulated deficit | (1,344 | ) |  | (1,300 | ) |  | (44 | )
Total stockholders’ equity | $ | 455 |  |  | $ | 499 |  |  | $ | (44 | )
Recently Issued Accounting Pronouncements Accounting for Hedging Activities In August 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” which amends the existing guidance to allow companies to more accurately present the economic results of an entity’s risk management activities in the financial statements. ASU 2017-12 becomes effective for the Company on January 1, 2019. Early adoption is permitted. The Company is currently evaluating the effect of this accounting pronouncement on its Consolidated Condensed Financial Statements. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which sets forth a current expected credit loss impairment model for financial assets that replaces the current incurred loss model. This model requires a financial asset (or group of financial assets), including trade receivables, measured at amortized cost to be presented at the net amount expected to be collected with an allowance for credit losses deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. ASU 2016-13 becomes effective for the Company on January 1, 2020. Early adoption is permitted as of January 1, 2019. The adoption of this accounting pronouncement is not expected to have a material impact on the Company's Consolidated Condensed Financial Statements. Leases In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which requires a lessee to recognize all long-term leases on its balance sheet as a liability for its lease obligation, measured at the present value of lease payments not yet paid, and a corresponding asset representing its right to use the underlying asset over the lease term and expands disclosure of key information about leasing arrangements. The ASU does not significantly change a lessee’s recognition, measurement and presentation of expenses and cash flows. Additionally, ASU 2016-02 aligns key aspects of lessor accounting with the new revenue recognition guidance in ASU 2014-09 (see above). ASU 2016-02 becomes effective for the Company on January 1, 2019. Early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach which includes a number of optional practical expedients that entities may elect to apply. The Company is currently evaluating and planning for the implementation of this ASU, including assessing its overall impact, and expects most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption, which will materially increase total assets and total liabilities relative to such amounts prior to adoption. The Company has determined portions of its vehicle rental contracts that convey the right to control the use of identified assets are within the scope of the accounting guidance contained in ASU 2016-02. As discussed in Revenue from Contracts with Customers above, the Company’s rental related revenues are accounted for under the revenue accounting standard Topic 606, until the adoption of this accounting pronouncement on January 1, 2019. The Company is monitoring the recently ratified ASU, “Leases (Topic 842) Targeted Improvements” that when issued will provide a transition method allowing the Company to only apply the new lease standard in the year of adoption. Additionally, it will provide a practical expedient for lessors to combine nonlease components with related lease components if certain conditions are met. This will allow the Company to account for these combined components of its vehicle rental contracts under Topic 842. Income Taxes In January 2018, the FASB issued FASB Staff Question and Answer Topic 740, No. 5: Accounting for Global Intangible Low-Taxed Income (“GILTI”), which provides guidance on accounting for the GILTI provisions of the U.S. enacted tax reform legislation (“the Tax Act”). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance allows accounting for tax on GILTI to be treated as a deferred tax item or as a component of current period income tax expense in the year incurred, subject to an accounting policy election. The Company has not completed its analysis of the GILTI provisions of the Tax Act and therefore has not made an accounting policy election related to such provision. The Company will complete its analysis in a subsequent period not to exceed one year from the date of the enactment of the Tax Act and will elect an accounting policy at such time.

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