Leases (Notes)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Year Ended December 31,
	2021		2020		2019
Americas	$	7,501	$	3,864	$	6,303
Europe, Middle East and Africa	1,343		1,080		2,141
Asia and Australasia	342		299		584
Total lease revenues	$	9,186	$	5,243	$	9,028

The following table presents our lease revenues disaggregated by brand:

	Year Ended December 31,
	2021		2020		2019
Avis	$	4,828	$	2,851	$	5,163
Budget	3,674		1,878		3,129
Other	684		514		736
Total lease revenues	$	9,186	$	5,243	$	9,028

________

Other includes Zipcar and other operating brands.

Lessee

We have operating and finance leases for rental locations, corporate offices, vehicle rental fleet and equipment. Many of our operating leases for rental locations contain concession agreements with various airport authorities that allow us to conduct our 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. Our operating leases for rental locations often also require us to pay or reimburse operating expenses.

We lease a portion of our vehicles under operating leases. As of December 31, 2021 and 2020, we have guaranteed up to $102 million and $202 million, respectively, of residual values for these vehicles at the end of their respective lease terms. We believe 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 have not recorded a liability related to guaranteed residual values.

The components of lease expense are as follows:

	Year Ended December 31,
	2021		2020		2019
Property leases (a)
Operating lease expense	$	561	$	575	$	722
Variable lease expense	433		152		274
Sublease income	(6)		(6)		(8)
Total property lease expense	$	988	$	721	$	988
Vehicle leases
Finance lease expense:
Amortization of ROU assets (b)	$	37	$	33	$	42
Interest on lease liabilities (c)	4		3		4
Operating lease expense (b)	156		195		255
Total vehicle lease expense	$	197	$	231	$	301

__________

(a)    Primarily included in operating expenses and includes $(2) million and $60 million of minimum annual guaranteed rent in excess of concession fees as defined in our rental concession agreement for the year ended December 31, 2021 and 2020, respectively.

(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,
	2021			2020
Property leases
Operating lease ROU assets	$	2,368		$	2,560
Short-term operating lease liabilities (a)	$	496		$	514
Long-term operating lease liabilities	1,910			2,078
Operating lease liabilities	$	2,406		$	2,592
Weighted average remaining lease term	8.8 years			8.4 years
Weighted average discount rate	3.84		%	3.86		%
Vehicle leases
Finance
Finance lease ROU assets, gross	$	353		$	304
Accumulated amortization	(72)			(42)
Finance lease ROU assets, net (b)	$	281		$	262
Short-term vehicle finance lease liabilities	$	126		$	86
Long-term vehicle finance lease liabilities	116			140
Vehicle finance lease liabilities (c)	$	242		$	226
Weighted average remaining lease term	2.2 years			1.8 years
Weighted average discount rate	1.97		%	1.99		%
Operating
Vehicle operating lease ROU assets (d)	$	63		$	113
Short-term vehicle operating lease liabilities	$	50		$	82
Long-term vehicle operating lease liabilities	14			31
Vehicle operating lease liabilities (e)	$	64		$	113
Weighted average remaining lease term	1.3 years			1.5 years
Weighted average discount rate	2.66		%	2.90		%

_________

(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,
	2021		2020		2019
Cash payments for lease liabilities within operating activities:
Property operating leases	$	639	$	740	$	733
Vehicle operating leases	162		196		248
Vehicle finance leases	4		3		4
Cash payments for lease liabilities within financing activities:
Vehicle finance leases	193		294		266
Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:
Property operating leases (a)	484		666		531
Vehicle operating leases (a)	115		111		262
Vehicle finance leases	223		257		304

_________

(a)    For the year ended December 31, 2019, ROU assets obtained in exchange for lease liabilities since initial recognition.

Maturities of lease liabilities as of December 31, 2021 are as follows:

	Property Operating Leases		Vehicle Finance Leases		Vehicle Operating Leases
Within 1 year	$	577	$	126	$	51
Between 1 and 2 years	466		5		13
Between 2 and 3 years	335		95		1
Between 3 and 4 years	255		16		—
Between 4 and 5 years	202		—		—
Thereafter	1,056		—		—
Total lease payments	2,891		242		65
Less: Imputed interest	(485)		—		(1)
Total	$	2,406	$	242	$	64

Leases

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Year Ended December 31,
	2021		2020		2019
Americas	$	7,501	$	3,864	$	6,303
Europe, Middle East and Africa	1,343		1,080		2,141
Asia and Australasia	342		299		584
Total lease revenues	$	9,186	$	5,243	$	9,028

The following table presents our lease revenues disaggregated by brand:

	Year Ended December 31,
	2021		2020		2019
Avis	$	4,828	$	2,851	$	5,163
Budget	3,674		1,878		3,129
Other	684		514		736
Total lease revenues	$	9,186	$	5,243	$	9,028

________

Other includes Zipcar and other operating brands.

Lessee

We have operating and finance leases for rental locations, corporate offices, vehicle rental fleet and equipment. Many of our operating leases for rental locations contain concession agreements with various airport authorities that allow us to conduct our 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. Our operating leases for rental locations often also require us to pay or reimburse operating expenses.

We lease a portion of our vehicles under operating leases. As of December 31, 2021 and 2020, we have guaranteed up to $102 million and $202 million, respectively, of residual values for these vehicles at the end of their respective lease terms. We believe 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 have not recorded a liability related to guaranteed residual values.

The components of lease expense are as follows:

	Year Ended December 31,
	2021		2020		2019
Property leases (a)
Operating lease expense	$	561	$	575	$	722
Variable lease expense	433		152		274
Sublease income	(6)		(6)		(8)
Total property lease expense	$	988	$	721	$	988
Vehicle leases
Finance lease expense:
Amortization of ROU assets (b)	$	37	$	33	$	42
Interest on lease liabilities (c)	4		3		4
Operating lease expense (b)	156		195		255
Total vehicle lease expense	$	197	$	231	$	301

__________

(a)    Primarily included in operating expenses and includes $(2) million and $60 million of minimum annual guaranteed rent in excess of concession fees as defined in our rental concession agreement for the year ended December 31, 2021 and 2020, respectively.

(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,
	2021			2020
Property leases
Operating lease ROU assets	$	2,368		$	2,560
Short-term operating lease liabilities (a)	$	496		$	514
Long-term operating lease liabilities	1,910			2,078
Operating lease liabilities	$	2,406		$	2,592
Weighted average remaining lease term	8.8 years			8.4 years
Weighted average discount rate	3.84		%	3.86		%
Vehicle leases
Finance
Finance lease ROU assets, gross	$	353		$	304
Accumulated amortization	(72)			(42)
Finance lease ROU assets, net (b)	$	281		$	262
Short-term vehicle finance lease liabilities	$	126		$	86
Long-term vehicle finance lease liabilities	116			140
Vehicle finance lease liabilities (c)	$	242		$	226
Weighted average remaining lease term	2.2 years			1.8 years
Weighted average discount rate	1.97		%	1.99		%
Operating
Vehicle operating lease ROU assets (d)	$	63		$	113
Short-term vehicle operating lease liabilities	$	50		$	82
Long-term vehicle operating lease liabilities	14			31
Vehicle operating lease liabilities (e)	$	64		$	113
Weighted average remaining lease term	1.3 years			1.5 years
Weighted average discount rate	2.66		%	2.90		%

_________

(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,
	2021		2020		2019
Cash payments for lease liabilities within operating activities:
Property operating leases	$	639	$	740	$	733
Vehicle operating leases	162		196		248
Vehicle finance leases	4		3		4
Cash payments for lease liabilities within financing activities:
Vehicle finance leases	193		294		266
Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:
Property operating leases (a)	484		666		531
Vehicle operating leases (a)	115		111		262
Vehicle finance leases	223		257		304

_________

(a)    For the year ended December 31, 2019, ROU assets obtained in exchange for lease liabilities since initial recognition.

Maturities of lease liabilities as of December 31, 2021 are as follows:

	Property Operating Leases		Vehicle Finance Leases		Vehicle Operating Leases
Within 1 year	$	577	$	126	$	51
Between 1 and 2 years	466		5		13
Between 2 and 3 years	335		95		1
Between 3 and 4 years	255		16		—
Between 4 and 5 years	202		—		—
Thereafter	1,056		—		—
Total lease payments	2,891		242		65
Less: Imputed interest	(485)		—		(1)
Total	$	2,406	$	242	$	64

Leases

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Year Ended December 31,
	2021		2020		2019
Americas	$	7,501	$	3,864	$	6,303
Europe, Middle East and Africa	1,343		1,080		2,141
Asia and Australasia	342		299		584
Total lease revenues	$	9,186	$	5,243	$	9,028

The following table presents our lease revenues disaggregated by brand:

	Year Ended December 31,
	2021		2020		2019
Avis	$	4,828	$	2,851	$	5,163
Budget	3,674		1,878		3,129
Other	684		514		736
Total lease revenues	$	9,186	$	5,243	$	9,028

________

Other includes Zipcar and other operating brands.

Lessee

We have operating and finance leases for rental locations, corporate offices, vehicle rental fleet and equipment. Many of our operating leases for rental locations contain concession agreements with various airport authorities that allow us to conduct our 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. Our operating leases for rental locations often also require us to pay or reimburse operating expenses.

We lease a portion of our vehicles under operating leases. As of December 31, 2021 and 2020, we have guaranteed up to $102 million and $202 million, respectively, of residual values for these vehicles at the end of their respective lease terms. We believe 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 have not recorded a liability related to guaranteed residual values.

The components of lease expense are as follows:

	Year Ended December 31,
	2021		2020		2019
Property leases (a)
Operating lease expense	$	561	$	575	$	722
Variable lease expense	433		152		274
Sublease income	(6)		(6)		(8)
Total property lease expense	$	988	$	721	$	988
Vehicle leases
Finance lease expense:
Amortization of ROU assets (b)	$	37	$	33	$	42
Interest on lease liabilities (c)	4		3		4
Operating lease expense (b)	156		195		255
Total vehicle lease expense	$	197	$	231	$	301

__________

(a)    Primarily included in operating expenses and includes $(2) million and $60 million of minimum annual guaranteed rent in excess of concession fees as defined in our rental concession agreement for the year ended December 31, 2021 and 2020, respectively.

(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,
	2021			2020
Property leases
Operating lease ROU assets	$	2,368		$	2,560
Short-term operating lease liabilities (a)	$	496		$	514
Long-term operating lease liabilities	1,910			2,078
Operating lease liabilities	$	2,406		$	2,592
Weighted average remaining lease term	8.8 years			8.4 years
Weighted average discount rate	3.84		%	3.86		%
Vehicle leases
Finance
Finance lease ROU assets, gross	$	353		$	304
Accumulated amortization	(72)			(42)
Finance lease ROU assets, net (b)	$	281		$	262
Short-term vehicle finance lease liabilities	$	126		$	86
Long-term vehicle finance lease liabilities	116			140
Vehicle finance lease liabilities (c)	$	242		$	226
Weighted average remaining lease term	2.2 years			1.8 years
Weighted average discount rate	1.97		%	1.99		%
Operating
Vehicle operating lease ROU assets (d)	$	63		$	113
Short-term vehicle operating lease liabilities	$	50		$	82
Long-term vehicle operating lease liabilities	14			31
Vehicle operating lease liabilities (e)	$	64		$	113
Weighted average remaining lease term	1.3 years			1.5 years
Weighted average discount rate	2.66		%	2.90		%

_________

(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,
	2021		2020		2019
Cash payments for lease liabilities within operating activities:
Property operating leases	$	639	$	740	$	733
Vehicle operating leases	162		196		248
Vehicle finance leases	4		3		4
Cash payments for lease liabilities within financing activities:
Vehicle finance leases	193		294		266
Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:
Property operating leases (a)	484		666		531
Vehicle operating leases (a)	115		111		262
Vehicle finance leases	223		257		304

_________

(a)    For the year ended December 31, 2019, ROU assets obtained in exchange for lease liabilities since initial recognition.

Maturities of lease liabilities as of December 31, 2021 are as follows:

	Property Operating Leases		Vehicle Finance Leases		Vehicle Operating Leases
Within 1 year	$	577	$	126	$	51
Between 1 and 2 years	466		5		13
Between 2 and 3 years	335		95		1
Between 3 and 4 years	255		16		—
Between 4 and 5 years	202		—		—
Thereafter	1,056		—		—
Total lease payments	2,891		242		65
Less: Imputed interest	(485)		—		(1)
Total	$	2,406	$	242	$	64