Avis 2014 Annual Report Download - page 82

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F-15
becomes effective for the Company on January 1, 2017. The Company is currently evaluating the effect of
this accounting pronouncement.
In June 2014, the FASB issued ASU 2014-12, “Accounting for Share-Based Payments When the Terms of
an Award Allow a Performance Target to Be Achieved After the Requisite Service Period,” which requires
that a performance target that could be achieved after the requisite service period be treated as a
performance condition that affects the vesting of the award. ASU 2014-12 becomes effective for the
Company on January 1, 2016. The adoption of this accounting pronouncement is not expected to have an
impact on the Company’s financial statements.
In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to
Continue as a Going Concern,” which requires management to perform interim and annual assessments of
an entity’s ability to continue as a going concern within one year of the date the financial statements are
issued and to provide related footnote disclosures in certain circumstances. ASU 2014-15 becomes
effective for the Company on January 1, 2016. The adoption of this accounting pronouncement is not
expected to have an impact on the Company’s financial statements.
3. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (“EPS”) (shares in
millions):
Year Ended December 31,
2014 2013 2012
Net income for basic EPS $ 245 $ 16 $ 290
Convertible debt interest, net of tax 1 — 4
Net income for diluted EPS $ 246 $ 16 $ 294
Basic weighted average shares outstanding 105.4 107.6 106.6
Options, warrants and non-vested stock 2.1 3.8 2.5
Convertible debt 3.1 — 12.5
Diluted weighted average shares outstanding 110.6 111.4 121.6
Earnings per share:
Basic $ 2.32 $ 0.15 $ 2.72
Diluted $ 2.22 $ 0.15 $ 2.42
The following table summarizes the Company’s outstanding common stock equivalents that were anti-
dilutive and therefore excluded from the computation of diluted EPS (shares in millions):
As of December 31,
2014 2013 2012
Options (a) ——0.2
Warrants (b) ——7.9
Shares underlying convertible debt — 4.0 —
__________
(a) The weighted average exercise price for anti-dilutive options for 2012 was $17.12.
(b) Represents all outstanding warrants for 2012. The exercise price for the warrants was $22.50.
4. Restructuring
During fourth quarter 2014, the Company committed to various strategic initiatives to identify best practices
and drive efficiency throughout its organization, by reducing headcount, improving processes and
consolidating functions (the “T15 restructuring”). As part of this process, the Company formally
communicated the termination of employment to approximately 75 employees and terminated
approximately 65 of the employees during 2014. These expenses primarily represent costs associated with
severance, outplacement services and other costs associated with employee terminations, the majority of
which have been or are expected to be settled in cash. As of December 31, 2014, the Company recorded
restructuring expense of $5 million related to this initiative and expects to incur further restructuring
expense, principally personnel related costs, of approximately $10 million.