Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Year Ended December 31,
	2022		2021		2020
Americas	$	9,401	$	7,501	$	3,864
Europe, Middle East and Africa	1,852		1,343		1,080
Asia and Australasia	576		342		299
Total lease revenues	$	11,829	$	9,186	$	5,243

The following table presents our lease revenues disaggregated by brand:

	Year Ended December 31,
	2022		2021		2020
Avis	$	6,420	$	4,828	$	2,851
Budget	4,650		3,674		1,878
Other	759		684		514
Total lease revenues	$	11,829	$	9,186	$	5,243

________

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, 2022 and 2021, we have guaranteed up to $65 million and $102 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,
	2022		2021		2020
Property leases (a)
Operating lease expense	$	703	$	561	$	575
Variable lease expense	520		433		152
Sublease income	(5)		(6)		(6)
Total property lease expense	$	1,218	$	988	$	721
Vehicle leases
Finance lease expense:
Amortization of ROU assets (b)	$	29	$	37	$	33
Interest on lease liabilities (c)	3		4		3
Operating lease expense (b)	138		156		195
Total vehicle lease expense	$	170	$	197	$	231

__________

(a)    Primarily included in operating expenses and includes $(9) million, $(2) million and $60 million of minimum annual guaranteed rent in excess of concession fees as defined in our rental concession agreement for the years ended December 31, 2022, 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,
	2022			2021
Property leases
Operating lease ROU assets	$	2,405		$	2,368
Short-term operating lease liabilities (a)	$	555		$	496
Long-term operating lease liabilities	1,884			1,910
Operating lease liabilities	$	2,439		$	2,406
Weighted average remaining lease term	8.2 years			8.8 years
Weighted average discount rate	4.30		%	3.84		%
Vehicle leases
Finance
Finance lease ROU assets, gross	$	267		$	353
Accumulated amortization	(45)			(72)
Finance lease ROU assets, net (b)	$	222		$	281
Short-term vehicle finance lease liabilities	$	44		$	126
Long-term vehicle finance lease liabilities	132			116
Vehicle finance lease liabilities (c)	$	176		$	242
Weighted average remaining lease term	2.0 years			2.2 years
Weighted average discount rate	1.82		%	1.97		%
Operating
Vehicle operating lease ROU assets (d)	$	86		$	63
Short-term vehicle operating lease liabilities	$	64		$	50
Long-term vehicle operating lease liabilities	22			14
Vehicle operating lease liabilities (e)	$	86		$	64
Weighted average remaining lease term	1.4 years			1.3 years
Weighted average discount rate	4.86		%	2.66		%

_________

(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,
	2022		2021		2020
Cash payments for lease liabilities within operating activities:
Property operating leases	$	743	$	639	$	740
Vehicle finance leases	3		4		3
Vehicle operating leases	137		162		196
Cash payments for lease liabilities within financing activities:
Vehicle finance leases	181		193		294
Non-cash activities - increase in ROU assets in exchange for lease liabilities:
Property operating leases	812		484		666
Vehicle finance leases	153		223		257
Vehicle operating leases	161		115		111

Maturities of lease liabilities as of December 31, 2022 are as follows:

	Property Operating Leases		Vehicle Finance Leases		Vehicle Operating Leases
Within 1 year	$	646	$	44	$	64
Between 1 and 2 years	441		4		18
Between 2 and 3 years	345		128		6
Between 3 and 4 years	286		—		1
Between 4 and 5 years	234		—		—
Thereafter	967		—		—
Total lease payments	2,919		176		89
Less: Imputed interest	(480)		—		(3)
Total	$	2,439	$	176	$	86

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Year Ended December 31,
	2022		2021		2020
Americas	$	9,401	$	7,501	$	3,864
Europe, Middle East and Africa	1,852		1,343		1,080
Asia and Australasia	576		342		299
Total lease revenues	$	11,829	$	9,186	$	5,243

The following table presents our lease revenues disaggregated by brand:

	Year Ended December 31,
	2022		2021		2020
Avis	$	6,420	$	4,828	$	2,851
Budget	4,650		3,674		1,878
Other	759		684		514
Total lease revenues	$	11,829	$	9,186	$	5,243

________

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, 2022 and 2021, we have guaranteed up to $65 million and $102 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,
	2022		2021		2020
Property leases (a)
Operating lease expense	$	703	$	561	$	575
Variable lease expense	520		433		152
Sublease income	(5)		(6)		(6)
Total property lease expense	$	1,218	$	988	$	721
Vehicle leases
Finance lease expense:
Amortization of ROU assets (b)	$	29	$	37	$	33
Interest on lease liabilities (c)	3		4		3
Operating lease expense (b)	138		156		195
Total vehicle lease expense	$	170	$	197	$	231

__________

(a)    Primarily included in operating expenses and includes $(9) million, $(2) million and $60 million of minimum annual guaranteed rent in excess of concession fees as defined in our rental concession agreement for the years ended December 31, 2022, 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,
	2022			2021
Property leases
Operating lease ROU assets	$	2,405		$	2,368
Short-term operating lease liabilities (a)	$	555		$	496
Long-term operating lease liabilities	1,884			1,910
Operating lease liabilities	$	2,439		$	2,406
Weighted average remaining lease term	8.2 years			8.8 years
Weighted average discount rate	4.30		%	3.84		%
Vehicle leases
Finance
Finance lease ROU assets, gross	$	267		$	353
Accumulated amortization	(45)			(72)
Finance lease ROU assets, net (b)	$	222		$	281
Short-term vehicle finance lease liabilities	$	44		$	126
Long-term vehicle finance lease liabilities	132			116
Vehicle finance lease liabilities (c)	$	176		$	242
Weighted average remaining lease term	2.0 years			2.2 years
Weighted average discount rate	1.82		%	1.97		%
Operating
Vehicle operating lease ROU assets (d)	$	86		$	63
Short-term vehicle operating lease liabilities	$	64		$	50
Long-term vehicle operating lease liabilities	22			14
Vehicle operating lease liabilities (e)	$	86		$	64
Weighted average remaining lease term	1.4 years			1.3 years
Weighted average discount rate	4.86		%	2.66		%

_________

(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,
	2022		2021		2020
Cash payments for lease liabilities within operating activities:
Property operating leases	$	743	$	639	$	740
Vehicle finance leases	3		4		3
Vehicle operating leases	137		162		196
Cash payments for lease liabilities within financing activities:
Vehicle finance leases	181		193		294
Non-cash activities - increase in ROU assets in exchange for lease liabilities:
Property operating leases	812		484		666
Vehicle finance leases	153		223		257
Vehicle operating leases	161		115		111

Maturities of lease liabilities as of December 31, 2022 are as follows:

	Property Operating Leases		Vehicle Finance Leases		Vehicle Operating Leases
Within 1 year	$	646	$	44	$	64
Between 1 and 2 years	441		4		18
Between 2 and 3 years	345		128		6
Between 3 and 4 years	286		—		1
Between 4 and 5 years	234		—		—
Thereafter	967		—		—
Total lease payments	2,919		176		89
Less: Imputed interest	(480)		—		(3)
Total	$	2,439	$	176	$	86

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Year Ended December 31,
	2022		2021		2020
Americas	$	9,401	$	7,501	$	3,864
Europe, Middle East and Africa	1,852		1,343		1,080
Asia and Australasia	576		342		299
Total lease revenues	$	11,829	$	9,186	$	5,243

The following table presents our lease revenues disaggregated by brand:

	Year Ended December 31,
	2022		2021		2020
Avis	$	6,420	$	4,828	$	2,851
Budget	4,650		3,674		1,878
Other	759		684		514
Total lease revenues	$	11,829	$	9,186	$	5,243

________

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, 2022 and 2021, we have guaranteed up to $65 million and $102 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,
	2022		2021		2020
Property leases (a)
Operating lease expense	$	703	$	561	$	575
Variable lease expense	520		433		152
Sublease income	(5)		(6)		(6)
Total property lease expense	$	1,218	$	988	$	721
Vehicle leases
Finance lease expense:
Amortization of ROU assets (b)	$	29	$	37	$	33
Interest on lease liabilities (c)	3		4		3
Operating lease expense (b)	138		156		195
Total vehicle lease expense	$	170	$	197	$	231

__________

(a)    Primarily included in operating expenses and includes $(9) million, $(2) million and $60 million of minimum annual guaranteed rent in excess of concession fees as defined in our rental concession agreement for the years ended December 31, 2022, 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,
	2022			2021
Property leases
Operating lease ROU assets	$	2,405		$	2,368
Short-term operating lease liabilities (a)	$	555		$	496
Long-term operating lease liabilities	1,884			1,910
Operating lease liabilities	$	2,439		$	2,406
Weighted average remaining lease term	8.2 years			8.8 years
Weighted average discount rate	4.30		%	3.84		%
Vehicle leases
Finance
Finance lease ROU assets, gross	$	267		$	353
Accumulated amortization	(45)			(72)
Finance lease ROU assets, net (b)	$	222		$	281
Short-term vehicle finance lease liabilities	$	44		$	126
Long-term vehicle finance lease liabilities	132			116
Vehicle finance lease liabilities (c)	$	176		$	242
Weighted average remaining lease term	2.0 years			2.2 years
Weighted average discount rate	1.82		%	1.97		%
Operating
Vehicle operating lease ROU assets (d)	$	86		$	63
Short-term vehicle operating lease liabilities	$	64		$	50
Long-term vehicle operating lease liabilities	22			14
Vehicle operating lease liabilities (e)	$	86		$	64
Weighted average remaining lease term	1.4 years			1.3 years
Weighted average discount rate	4.86		%	2.66		%

_________

(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,
	2022		2021		2020
Cash payments for lease liabilities within operating activities:
Property operating leases	$	743	$	639	$	740
Vehicle finance leases	3		4		3
Vehicle operating leases	137		162		196
Cash payments for lease liabilities within financing activities:
Vehicle finance leases	181		193		294
Non-cash activities - increase in ROU assets in exchange for lease liabilities:
Property operating leases	812		484		666
Vehicle finance leases	153		223		257
Vehicle operating leases	161		115		111

Maturities of lease liabilities as of December 31, 2022 are as follows:

	Property Operating Leases		Vehicle Finance Leases		Vehicle Operating Leases
Within 1 year	$	646	$	44	$	64
Between 1 and 2 years	441		4		18
Between 2 and 3 years	345		128		6
Between 3 and 4 years	286		—		1
Between 4 and 5 years	234		—		—
Thereafter	967		—		—
Total lease payments	2,919		176		89
Less: Imputed interest	(480)		—		(3)
Total	$	2,439	$	176	$	86