Avis 2009 Annual Report Download - page 43

Table of Contents
tax returns filed during 2007, the after tax losses on the sale of Travelport and the spin-
offs of Realogy and Wyndham in 2006, the after tax gains
on the sale of our Marketing Services division and Wright Express in 2005, and the after tax loss on the spin-off of PHH in 2005.
During 2009, we recorded an approximately $33 million ($20 million, net of tax) non-cash charge primarily for the impairment of our
investment in Carey Holdings, Inc. (“Carey”), to reflect the other-than-temporary decline of the investments’ fair value below its carrying value.
In 2008, we recorded a $1,262 million ($1,053 million, net of tax) non-cash charge to reflect (i) the impairment of goodwill, (ii) the impairment
of the Company’s tradenames assets and (iii) the impairment of our investment in Carey. These charges reflect the decline in their fair value
below their carrying value, primarily as a result of reduced market valuations for vehicle services and other companies, as well as reduced profit
forecasts due to soft economic conditions and increased financing costs. In 2007, we recorded a $1,195 million ($1,073 million, net of tax) non-
cash charge for the impairment of goodwill at each of our reporting units to reflect the decline in their fair value as evidenced by a decline in the
market value of our common stock. See Note 2 to our Consolidated Financial Statements. In 2006, we recorded a non-
cash impairment charge of
approximately $1.3 billion within discontinued operations to reflect the difference between Travelport’s carrying value and its estimated fair
value, less costs to dispose. In 2005, we recorded a non-cash impairment charge of $425 million within discontinued operations as a result of a
decline in future anticipated cash flows of one of Travelport’s businesses.
During 2009 and 2008, we recorded $20 million and $28 million, respectively, of charges related to restructuring initiatives within each of our
segments. In 2006, we recorded $10 million of restructuring charges related to restructuring initiatives within our Truck Rental and Domestic
Car Rental segments. In 2005, we recorded $26 million of restructuring and transaction-related charges as a result of restructuring activities
undertaken following the spin-off of PHH Corporation and the initial public offering of Wright Express Corporation. See Note 5 to our
Consolidated Financial Statements.
During 2009, 2008 and 2007, separation-related costs incurred in connection with the spin-offs of Realogy and Wyndham and the sale of
Travelport were insignificant. In 2006 and 2005, we incurred separation-related costs of $574 million and $15 million, respectively. These costs
consisted primarily of legal, accounting, other professional and consulting fees and various employee costs, and for 2006 included costs
associated with the retirement of corporate debt.
In 2006 and 2005, we incurred $40 million and $35 million, respectively, of litigation and related costs primarily in connection with the 1998
discovery of accounting irregularities in the former business units of CUC International, Inc. In 2009, 2008 and 2007, these costs were
immaterial.
In 2006, we recorded a $103 million ($64 million, net of tax) non-cash charge to reflect the cumulative effect of accounting charges related to
(i) real estate time-share transactions at our former Hospitality Services and Timeshare Resorts segment and (ii) stock-based compensation
awards. In 2005, we recorded a $14 million ($8 million, net of tax) non-
cash charge to reflect the cumulative effect of accounting change relating
to our asset retirement obligation to remove assets at certain leased properties.
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