Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes

Income Taxes

11. Income Taxes

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years prior to 2006. In addition, with few exceptions, the Company is no longer subject to state and local, or non-U.S. income tax examinations for years prior to 2003.

The Company's effective tax rate was 35.4% and 33.6% for the three months ended September 30, 2011 and 2010, respectively, and 38.1% and 34.4% for the nine months ended September 30, 2011 and 2010, respectively. The effective tax rates increased for both the three and nine month periods compared to the prior year primarily due to the absence of benefits derived from the prior year utilization of cumulative foreign tax credits, which is partially offset by the release of a tax valuation allowance during the third quarter of 2011.

The Company made cash income tax payments, net of refunds, of $89 million and $70 million during the nine months ended September 30, 2011 and 2010, respectively. Such payments exclude income tax related payments made to Cendant Corporation (now Avis Budget Group) ("Cendant" or "former Parent").