Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Taxes [Line Items]

Provision for (Benefit From) Income Taxes

The provision for (benefit from) income taxes consists of the following:

		Year Ended December 31,
		2017			2016			2015
Current
	Federal	$	—		$	(1	)	$	(32	)
	State	5			3			3
	Foreign	37			63			40
	Current income tax provision	42			65			11
Deferred
	Federal	(205		)	51			45
	State	(5		)	5			(1		)
	Foreign	18			(5		)	14
	Deferred income tax provision	(192		)	51			58
Provision for (benefit from) income taxes		$	(150	)	$	116		$	69

Pretax Income (Loss) for Domestic and Foreign Operations

Pretax income for domestic and foreign operations consists of the following:

	Year Ended December 31,
	2017		2016		2015
United States (a)	$	17	$	127	$	258
Foreign	194		152		124
Pretax income	$	211	$	279	$	382

__________

^(a)   For the years ended December 31, 2017, 2016 and 2015, includes corporate debt extinguishment costs of $3 million, $27 million and $23 million, respectively.

Deferred Income Tax Assets and Liabilities

Deferred income tax assets and liabilities are comprised of the following:

		As of December 31,
		2017			2016
Deferred income tax assets:
	Net tax loss carryforwards	$	1,104		$	1,587
	Accrued liabilities and deferred revenue	216			281
	Tax credits	24			62
	Depreciation and amortization	4			2
	Acquisition and integration-related liabilities	2			5
	Provision for doubtful accounts	8			7
	Other	48			52
	Valuation allowance (a)	(331		)	(357		)
Deferred income tax assets		1,075			1,639
Deferred income tax liabilities:
	Depreciation and amortization	121			112
	Prepaid expenses	20			32
	Other	3			2
Deferred income tax liabilities		144			146
Deferred income tax assets, net		$	931		$	1,493

__________

^(a)  The valuation allowance of $331 million at December 31, 2017 relates to tax loss carryforwards and certain deferred tax assets of $302 million and $29 million, respectively. The valuation allowance will be reduced when and if the Company determines it is more likely than not that the related deferred income tax assets will be realized. The valuation allowance of $357 million at December 31, 2016 relates to tax loss carryforwards, foreign tax credits and certain deferred tax assets of $289 million, $39 million and $29 million, respectively.

Reconciliation of U.S Federal Income Tax Statutory Rate and Effective Income Tax Rate

The reconciliation between the U.S. federal income tax statutory rate and the Company’s effective income tax rate is as follows:

		Year Ended December 31,
		2017		2016		2015
U.S. federal statutory rate		35.0	%	35.0	%	35.0	%
Adjustments to reconcile to the effective rate:
	State and local income taxes, net of federal tax benefits	3.8		2.0		2.8
	Changes in valuation allowances	(4.7	)	(0.2	)	(0.6	)
	Taxes on foreign operations at rates different than statutory U.S. federal rates	(3.6	)	3.1		3.7
	Resolution of a prior-year tax matter (a)	—		—		(25.6	)
	Stock-based compensation	(3.4	)	—		—
	Non-deductible transaction-related costs	—		—		0.9
	U.S. Tax Act benefit	(100.8	)	—		—
	Other non-deductible expenses	2.2		1.7		1.8
	Other	0.4		—		0.1
		(71.1	)%	41.6	%	18.1	%

__________

^a)  For the year ended December 31, 2015, the Company recognized a $98 million income tax benefit from the resolution of a prior-year income tax matter.

Changes in Gross Unrecognized Tax Benefits

The following is a tabular reconciliation of the gross amount of unrecognized tax benefits for the year:

		2017			2016			2015
Balance at January 1		$	59		$	56		$	63
	Additions for tax positions related to current year	6			3			6
	Additions for tax positions for prior years	9			3			3
	Reductions for tax positions for prior years	(10		)	(3		)	(14		)
	Settlements	—			—			(1		)
	Statute of limitations	(1		)	—			(1		)
Balance at December 31		$	63		$	59		$	56

Unrecognized Tax Benefits

The following table presents unrecognized tax benefits:

	As of December 31,
	2017		2016
Unrecognized tax benefit in non-current income taxes payable (a)	$	46	$	40
Accrued interest payable on potential tax liabilities (b)	26		29

__________

^(a)  Pursuant to the agreements governing the disposition of certain subsidiaries in 2006, the Company is entitled to indemnification for certain pre-disposition tax contingencies. As of December 31, 2017 and 2016, $13 million and $15 million, respectively, of unrecognized tax benefits are related to tax contingencies for which the Company believes it is entitled to indemnification.

^(b)  The Company recognizes potential interest related to unrecognized tax benefits within interest expense related to corporate debt, net on the accompanying Consolidated Statements of Operations. Penalties incurred during the years ended December 31, 2017, 2016 and 2015, were not significant and were recognized as a component of the provision for income taxes.

Vehicle Programs

Income Taxes [Line Items]

Deferred Income Tax Assets and Liabilities

Deferred income tax assets and liabilities related to vehicle programs are comprised of the following:

	As of December 31,
	2017		2016
Deferred income tax assets:
Depreciation and amortization	$	58	$	52
Deferred income tax liabilities:
Depreciation and amortization	1,652		2,481
Deferred income tax liabilities under vehicle programs, net	$	1,594	$	2,429