Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Three Months Ended  September 30,				Nine Months Ended  September 30,
	2022		2021		2022		2021
Americas	$	2,682	$	2,391	$	7,216	$	5,417
Europe, Middle East and Africa	654		508		1,468		968
Asia and Australasia	160		68		412		266
Total lease revenues	$	3,496	$	2,967	$	9,096	$	6,651

The following table presents our lease revenues disaggregated by brand:

	Three Months Ended September 30,				Nine Months Ended  September 30,
	2022		2021		2022		2021
Avis	$	1,926	$	1,573	$	4,915	$	3,464
Budget	1,356		1,185		3,598		2,676
Other	214		209		583		511
Total lease revenues	$	3,496	$	2,967	$	9,096	$	6,651

_______

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 Right of Use (“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.

The components of lease expense are as follows:

	Three Months Ended September 30,				Nine Months Ended  September 30,
	2022		2021		2022		2021
Property leases (a)
Operating lease expense	$	184	$	146	$	513	$	419
Variable lease expense	169		152		423		318
Total property lease expense	$	353	$	298	$	936	$	737

__________

(a)    Primarily within operating expense and includes $(4) million for the three months ended September 30, 2021, and $(9) million and $12 million for the nine months ended September 30, 2022 and 2021, respectively, of minimum annual guaranteed rent in excess of concession fees, net, as defined in our rental concession agreements.

Supplemental balance sheet information related to leases is as follows:

	As of  September 30, 2022			As of  December 31, 2021
Property leases
Operating lease ROU assets	$	2,275		$	2,368
Short-term operating lease liabilities (a)	$	488		$	496
Long-term operating lease liabilities	1,822			1,910
Operating lease liabilities	$	2,310		$	2,406
Weighted average remaining lease term	8.5 years			8.8 years
Weighted average discount rate	4.04		%	3.84		%

_________

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

Supplemental cash flow information related to leases is as follows:

	Nine Months Ended  September 30,
	2022		2021
Cash payments for lease liabilities within operating activities:
Property operating leases	$	537	$	445
Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:
Property operating leases	$	508	$	226

Leases

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Three Months Ended  September 30,				Nine Months Ended  September 30,
	2022		2021		2022		2021
Americas	$	2,682	$	2,391	$	7,216	$	5,417
Europe, Middle East and Africa	654		508		1,468		968
Asia and Australasia	160		68		412		266
Total lease revenues	$	3,496	$	2,967	$	9,096	$	6,651

The following table presents our lease revenues disaggregated by brand:

	Three Months Ended September 30,				Nine Months Ended  September 30,
	2022		2021		2022		2021
Avis	$	1,926	$	1,573	$	4,915	$	3,464
Budget	1,356		1,185		3,598		2,676
Other	214		209		583		511
Total lease revenues	$	3,496	$	2,967	$	9,096	$	6,651

_______

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 Right of Use (“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.

The components of lease expense are as follows:

	Three Months Ended September 30,				Nine Months Ended  September 30,
	2022		2021		2022		2021
Property leases (a)
Operating lease expense	$	184	$	146	$	513	$	419
Variable lease expense	169		152		423		318
Total property lease expense	$	353	$	298	$	936	$	737

__________

(a)    Primarily within operating expense and includes $(4) million for the three months ended September 30, 2021, and $(9) million and $12 million for the nine months ended September 30, 2022 and 2021, respectively, of minimum annual guaranteed rent in excess of concession fees, net, as defined in our rental concession agreements.

Supplemental balance sheet information related to leases is as follows:

	As of  September 30, 2022			As of  December 31, 2021
Property leases
Operating lease ROU assets	$	2,275		$	2,368
Short-term operating lease liabilities (a)	$	488		$	496
Long-term operating lease liabilities	1,822			1,910
Operating lease liabilities	$	2,310		$	2,406
Weighted average remaining lease term	8.5 years			8.8 years
Weighted average discount rate	4.04		%	3.84		%

_________

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

Supplemental cash flow information related to leases is as follows:

	Nine Months Ended  September 30,
	2022		2021
Cash payments for lease liabilities within operating activities:
Property operating leases	$	537	$	445
Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:
Property operating leases	$	508	$	226

Leases

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Three Months Ended  September 30,				Nine Months Ended  September 30,
	2022		2021		2022		2021
Americas	$	2,682	$	2,391	$	7,216	$	5,417
Europe, Middle East and Africa	654		508		1,468		968
Asia and Australasia	160		68		412		266
Total lease revenues	$	3,496	$	2,967	$	9,096	$	6,651

The following table presents our lease revenues disaggregated by brand:

	Three Months Ended September 30,				Nine Months Ended  September 30,
	2022		2021		2022		2021
Avis	$	1,926	$	1,573	$	4,915	$	3,464
Budget	1,356		1,185		3,598		2,676
Other	214		209		583		511
Total lease revenues	$	3,496	$	2,967	$	9,096	$	6,651

_______

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 Right of Use (“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.

The components of lease expense are as follows:

	Three Months Ended September 30,				Nine Months Ended  September 30,
	2022		2021		2022		2021
Property leases (a)
Operating lease expense	$	184	$	146	$	513	$	419
Variable lease expense	169		152		423		318
Total property lease expense	$	353	$	298	$	936	$	737

__________

(a)    Primarily within operating expense and includes $(4) million for the three months ended September 30, 2021, and $(9) million and $12 million for the nine months ended September 30, 2022 and 2021, respectively, of minimum annual guaranteed rent in excess of concession fees, net, as defined in our rental concession agreements.

Supplemental balance sheet information related to leases is as follows:

	As of  September 30, 2022			As of  December 31, 2021
Property leases
Operating lease ROU assets	$	2,275		$	2,368
Short-term operating lease liabilities (a)	$	488		$	496
Long-term operating lease liabilities	1,822			1,910
Operating lease liabilities	$	2,310		$	2,406
Weighted average remaining lease term	8.5 years			8.8 years
Weighted average discount rate	4.04		%	3.84		%

_________

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

Supplemental cash flow information related to leases is as follows:

	Nine Months Ended  September 30,
	2022		2021
Cash payments for lease liabilities within operating activities:
Property operating leases	$	537	$	445
Non-cash activities - increase (decrease) in ROU assets in exchange for lease liabilities:
Property operating leases	$	508	$	226