Leases (Notes)

12 Months Ended

Dec. 31, 2019

Leases

Lessor

The following table presents the Company’s lease revenues disaggregated by geography.



	Year Ended December 31, 2019
Americas	$	6,303
Europe, Middle East and Africa	2,141
Asia and Australasia	584
Total lease revenues	$	9,028

The following table presents the Company’s lease revenues disaggregated by brand.



	Year Ended December 31, 2019
Avis	$	5,163
Budget	3,129
Other	736
Total lease revenues	$	9,028

________

Other includes Zipcar and other operating brands.

Lessee

The Company has operating and finance leases for rental locations, corporate offices, vehicle rental fleet and equipment. Many of the Company’s operating leases for rental locations contain concession agreements with various airport authorities that allow the Company to conduct its vehicle rental operations on site. In general, concession fees for airport locations are based on a percentage of total commissionable revenue as defined by each airport authority, some of which are subject to minimum annual guaranteed amounts. Concession fees other than minimum annual guaranteed amounts are not included in the measurement of operating lease ROU assets and operating lease liabilities, and are recorded as variable lease expense as incurred. The Company’s operating leases for rental locations often also require the Company to pay or reimburse operating expenses.

The Company leases a portion of its vehicles under operating leases. As of December 31, 2019, the Company has guaranteed up to $314 million of residual values for these vehicles at the end of their respective lease terms. The Company believes that, based on current market conditions, the net proceeds

from the sale of these vehicles at the end of their lease terms will equal or exceed their net book values and therefore has not recorded a liability related to guaranteed residual values.

The components of lease expense are as follows:



	Year Ended December 31, 2019
Property leases ^(a)
Operating lease expense	$	722
Variable lease expense	274
Sublease income	(8		)
Total property lease expense	$	988

Vehicle leases
Finance lease expense:
Amortization of ROU assets ^(b)	$	42
Interest on lease liabilities ^(c)	4
Operating lease expense ^(b)	255
Total vehicle lease expense	$	301

__________


^(a)	Primarily included in operating expenses.


^(b)	Included in vehicle depreciation and lease charges, net.


^(c)	Included in vehicle interest, net.

Supplemental balance sheet information related to leases is as follows:



	As of December 31, 2019
Property leases
Operating lease ROU assets	$	2,596

Short-term operating lease liabilities ^(a)	$	479
Long-term operating lease liabilities	2,140
Operating lease liabilities	$	2,619

Weighted average remaining lease term	8.9 years
Weighted average discount rate	4.31		%

Vehicle leases
Finance
Finance lease ROU assets, gross	$	337
Accumulated amortization	(56		)
Finance lease ROU assets, net ^(b)	$	281

Short-term vehicle finance lease liabilities	$	95
Long-term vehicle finance lease liabilities	157
Vehicle finance lease liabilities^(c)	$	252

Weighted average remaining lease term	2.0 years
Weighted average discount rate	1.67		%

Operating
Vehicle operating lease ROU assets ^(d)	$	195

Short-term vehicle operating lease liabilities	$	124
Long-term vehicle operating lease liabilities	71
Vehicle operating lease liabilities ^(e)	$	195

Weighted average remaining lease term	1.8 years
Weighted average discount rate	3.08		%

_________


^(a)	Included in Accounts payable and other current liabilities.


^(b)	Included in Vehicles, net within Assets under vehicle programs.


^(c)	Included in Debt within Liabilities under vehicle programs.


^(d)	Included in Receivables from vehicle manufacturers and other within Assets under vehicle programs.


^(e)	Included in Other within Liabilities under vehicle programs.

Supplemental cash flow information related to leases is as follows:



	Year Ended December 31, 2019
Cash payments for lease liabilities within operating activities:
Property operating leases	$	733
Vehicle operating leases	248
Vehicle finance leases	4
Cash payments for lease liabilities within financing activities:
Vehicle finance leases	266
Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:
Property operating leases ^(a)	531
Vehicle operating leases ^(a)	262
Vehicle finance leases	304

_________


^(a)	ROU assets obtained in exchange for lease liabilities since initial recognition.

Maturities of lease liabilities as of December 31, 2019 are as follows:



	Property Operating Leases			Vehicle Finance Leases		Vehicle Operating Leases
Within 1 year	$	580		$	95	$	128
Between 1 and 2 years	470			29		51
Between 2 and 3 years	400			127		17
Between 3 and 4 years	348			1		5
Between 4 and 5 years	230			—		—
Thereafter	1,174			—		—
Total lease payments	3,202			252		201
Less: Imputed interest	(583		)	—		(6		)
Total	$	2,619		$	252	$	195