Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Provision for (Benefit From) Income Taxes

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

		Year Ended December 31,
		2021		2020		2019
Current
	Federal	$	—	$	(5)	$	(3)
	State	35		21		41
	Foreign	12		29		50
	Current income tax provision	47		45		88
Deferred
	Federal	309		(104)		41
	State	78		(90)		(37)
	Foreign	(9)		(123)		(107)
	Deferred income tax provision (benefit)	378		(317)		(103)
Provision for (benefit from) income taxes		$	425	$	(272)	$	(15)

Pretax Income (Loss) for Domestic and Foreign Operations

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

	Year Ended December 31,
	2021		2020		2019
United States	$	1,529	$	(590)	$	125
Foreign	179		(366)		162
Pretax income (loss)	$	1,708	$	(956)	$	287

Deferred Income Tax Assets and Liabilities

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

		As of December 31,
		2021		2020
Deferred income tax assets:
	Net tax loss carryforwards	$	1,480	$	1,146
	Long-term operating lease liabilities	625		657
	Accrued liabilities and deferred revenue	272		237
	Tax credits	11		17
	Depreciation and amortization	19		3
	Provision for doubtful accounts	18		8
	Other	100		110
	Valuation allowance (a)	(167)		(204)
Deferred income tax assets		2,358		1,974
Deferred income tax liabilities:
	Operating lease right-of-use assets	614		649
	Depreciation and amortization	102		105
	Prepaid expenses	23		8
	Other	4		14
Deferred income tax liabilities		743		776
Deferred income tax assets, net		$	1,615	$	1,198

__________

(a)    The valuation allowance of $167 million at December 31, 2021 relates to tax loss carryforwards and certain deferred tax assets of $163 million and $4 million, respectively. The valuation allowance will be reduced when and if we determine it is more likely than not that the related deferred income tax assets will be realized. The valuation allowance of $204 million at December 31, 2020 relates to tax loss carryforwards and certain deferred tax assets of $195 million and $9 million, respectively. The valuation allowance will be reduced when and if we determine it is more likely than not that the related deferred income tax assets will be realized. The decrease in valuation allowance as compared to the year ended December 31, 2020 relates to the expiration of certain federal net operating loss carryforwards for which the deferred income tax asset was not more likely than not to be realized. As of December 31, 2021, the net operating loss deferred tax asset and corresponding valuation allowance were reduced.

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

	As of December 31,
	2021		2020
Deferred income tax assets:
Depreciation and amortization	$	80	$	62
Other	19		27
Deferred income tax assets	99		89
Deferred income tax liabilities:
Depreciation and amortization	2,321		1,445
Other	20		27
Deferred income tax liabilities	2,341		1,472
Deferred income tax liabilities under vehicle programs, net	$	2,242	$	1,383

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 our effective income tax rate is as follows:

		Year Ended December 31,
		2021		2020		2019
U.S. federal statutory rate		21.0	%	21.0	%	21.0	%
Adjustments to reconcile to the effective rate:
	State and local income taxes, net of federal tax benefits	5.5		4.8		(1.7)
	Changes in valuation allowances	(0.6)		—		(26.9)
	Taxes on foreign operations at rates different than U.S. federal statutory rates	(2.0)		3.1		3.4
	Stock-based compensation	(0.3)		(0.1)		—
	Other non-deductible (non-taxable) items	0.6		(0.4)		(1.4)
	Other	0.7		—		0.4
		24.9	%	28.4	%	(5.2)	%

Changes in Gross Unrecognized Tax Benefits

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

		2021		2020		2019
Balance, January 1		$	57	$	54	$	61
	Additions for tax positions related to current year	4		4		6
	Additions for tax positions for prior years	3		—		—
	Reductions for tax positions for prior years	(3)		(1)		(8)
	Settlements	—		(3)		(4)
	Statute of limitations	—		—		(1)
	Foreign currency translation	(3)		3		—
Balance, December 31		$	58	$	57	$	54

Unrecognized Tax Benefits

The following table presents unrecognized tax benefits:

	As of December 31,
	2021		2020
Unrecognized tax benefit in non-current income taxes payable (a)	$	30	$	24
Accrued interest payable on potential tax liabilities (b)	29		29

__________

(a)Pursuant to the agreements governing the disposition of certain subsidiaries in 2006, we are entitled to indemnification for certain predisposition tax contingencies. As of December 31, 2021 and 2020, $13 million, respectively, of unrecognized tax benefits are related to tax contingencies for which we believe it is entitled to indemnification.

(b)We recognize 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, 2021, 2020 and 2019, were not significant and were recognized as a component of the provision for income taxes.