Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Year Ended December 31,
	2023		2022		2021
Americas	$	9,261	$	9,401	$	7,501
Europe, Middle East and Africa	1,932		1,852		1,343
Asia and Australasia	628		576		342
Total lease revenues	$	11,821	$	11,829	$	9,186

The following table presents our lease revenues disaggregated by brand:

	Year Ended December 31,
	2023		2022		2021
Avis	$	6,660	$	6,420	$	4,828
Budget	4,425		4,650		3,674
Other	736		759		684
Total lease revenues	$	11,821	$	11,829	$	9,186

________

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, 2023 and 2022, we have guaranteed up to $52 million and $65 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,
	2023		2022		2021
Property leases
Operating lease expense	$	860	$	703	$	561
Variable lease expense	402		520		433
Sublease income	(6)		(5)		(6)
Total property lease expense (a)	$	1,256	$	1,218	$	988
Vehicle leases
Finance lease expense:
Amortization of ROU assets (b)	$	28	$	29	$	37
Interest on lease liabilities (c)	6		3		4
Operating lease expense (b)	167		138		156
Total vehicle lease expense	$	201	$	170	$	197

__________

(a)    Primarily included in operating expenses and for the years ended December 31, 2022 and 2021, includes $(9) million and $(2) million of minimum annual guaranteed rent in excess of concession fees as defined in our rental concession agreements, 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,
	2023		2022
Property leases
Operating lease ROU assets	$	2,654	$	2,405
Short-term operating lease liabilities (a)	$	576	$	555
Long-term operating lease liabilities	2,117		1,884
Operating lease liabilities	$	2,693	$	2,439
Weighted average remaining lease term	8.1 years		8.2 years
Weighted average discount rate	4.83%		4.30%
Vehicle leases
Finance
Finance lease ROU assets, gross	$	265	$	267
Accumulated amortization	(41)		(45)
Finance lease ROU assets, net (b)	$	224	$	222
Short-term vehicle finance lease liabilities	$	59	$	44
Long-term vehicle finance lease liabilities	113		132
Vehicle finance lease liabilities (c)	$	172	$	176
Weighted average remaining lease term	2.8 years		2.0 years
Weighted average discount rate	3.68%		1.82%
Operating
Vehicle operating lease ROU assets (d)	$	117	$	86
Short-term vehicle operating lease liabilities	$	83	$	64
Long-term vehicle operating lease liabilities	36		22
Vehicle operating lease liabilities (e)	$	119	$	86
Weighted average remaining lease term	1.5 years		1.4 years
Weighted average discount rate	5.13%		4.86%

_________

(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,
	2023		2022		2021
Cash payments for lease liabilities within operating activities:
Property operating leases	$	838	$	743	$	639
Vehicle finance leases	6		3		4
Vehicle operating leases	167		137		162
Cash payments for lease liabilities within financing activities:
Vehicle finance leases	105		181		193
Non-cash activities - increase in ROU assets in exchange for lease liabilities:
Property operating leases	1,079		812		484
Vehicle finance leases	118		153		223
Vehicle operating leases	191		161		115

Maturities of lease liabilities as of December 31, 2023 are as follows:

	Property Operating Leases		Vehicle Finance Leases		Vehicle Operating Leases
Within 1 year	$	688	$	59	$	83
Between 1 and 2 years	478		—		30
Between 2 and 3 years	414		—		8
Between 3 and 4 years	357		108		2
Between 4 and 5 years	263		5		—
Thereafter	1,051		—		—
Total lease payments	3,251		172		123
Less: Imputed interest	(558)		—		(4)
Total	$	2,693	$	172	$	119

Leases

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Year Ended December 31,
	2023		2022		2021
Americas	$	9,261	$	9,401	$	7,501
Europe, Middle East and Africa	1,932		1,852		1,343
Asia and Australasia	628		576		342
Total lease revenues	$	11,821	$	11,829	$	9,186

The following table presents our lease revenues disaggregated by brand:

	Year Ended December 31,
	2023		2022		2021
Avis	$	6,660	$	6,420	$	4,828
Budget	4,425		4,650		3,674
Other	736		759		684
Total lease revenues	$	11,821	$	11,829	$	9,186

________

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, 2023 and 2022, we have guaranteed up to $52 million and $65 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,
	2023		2022		2021
Property leases
Operating lease expense	$	860	$	703	$	561
Variable lease expense	402		520		433
Sublease income	(6)		(5)		(6)
Total property lease expense (a)	$	1,256	$	1,218	$	988
Vehicle leases
Finance lease expense:
Amortization of ROU assets (b)	$	28	$	29	$	37
Interest on lease liabilities (c)	6		3		4
Operating lease expense (b)	167		138		156
Total vehicle lease expense	$	201	$	170	$	197

__________

(a)    Primarily included in operating expenses and for the years ended December 31, 2022 and 2021, includes $(9) million and $(2) million of minimum annual guaranteed rent in excess of concession fees as defined in our rental concession agreements, 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,
	2023		2022
Property leases
Operating lease ROU assets	$	2,654	$	2,405
Short-term operating lease liabilities (a)	$	576	$	555
Long-term operating lease liabilities	2,117		1,884
Operating lease liabilities	$	2,693	$	2,439
Weighted average remaining lease term	8.1 years		8.2 years
Weighted average discount rate	4.83%		4.30%
Vehicle leases
Finance
Finance lease ROU assets, gross	$	265	$	267
Accumulated amortization	(41)		(45)
Finance lease ROU assets, net (b)	$	224	$	222
Short-term vehicle finance lease liabilities	$	59	$	44
Long-term vehicle finance lease liabilities	113		132
Vehicle finance lease liabilities (c)	$	172	$	176
Weighted average remaining lease term	2.8 years		2.0 years
Weighted average discount rate	3.68%		1.82%
Operating
Vehicle operating lease ROU assets (d)	$	117	$	86
Short-term vehicle operating lease liabilities	$	83	$	64
Long-term vehicle operating lease liabilities	36		22
Vehicle operating lease liabilities (e)	$	119	$	86
Weighted average remaining lease term	1.5 years		1.4 years
Weighted average discount rate	5.13%		4.86%

_________

(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,
	2023		2022		2021
Cash payments for lease liabilities within operating activities:
Property operating leases	$	838	$	743	$	639
Vehicle finance leases	6		3		4
Vehicle operating leases	167		137		162
Cash payments for lease liabilities within financing activities:
Vehicle finance leases	105		181		193
Non-cash activities - increase in ROU assets in exchange for lease liabilities:
Property operating leases	1,079		812		484
Vehicle finance leases	118		153		223
Vehicle operating leases	191		161		115

Maturities of lease liabilities as of December 31, 2023 are as follows:

	Property Operating Leases		Vehicle Finance Leases		Vehicle Operating Leases
Within 1 year	$	688	$	59	$	83
Between 1 and 2 years	478		—		30
Between 2 and 3 years	414		—		8
Between 3 and 4 years	357		108		2
Between 4 and 5 years	263		5		—
Thereafter	1,051		—		—
Total lease payments	3,251		172		123
Less: Imputed interest	(558)		—		(4)
Total	$	2,693	$	172	$	119

Leases

Leases

Lessor

The following table presents our lease revenues disaggregated by geography:

	Year Ended December 31,
	2023		2022		2021
Americas	$	9,261	$	9,401	$	7,501
Europe, Middle East and Africa	1,932		1,852		1,343
Asia and Australasia	628		576		342
Total lease revenues	$	11,821	$	11,829	$	9,186

The following table presents our lease revenues disaggregated by brand:

	Year Ended December 31,
	2023		2022		2021
Avis	$	6,660	$	6,420	$	4,828
Budget	4,425		4,650		3,674
Other	736		759		684
Total lease revenues	$	11,821	$	11,829	$	9,186

________

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, 2023 and 2022, we have guaranteed up to $52 million and $65 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,
	2023		2022		2021
Property leases
Operating lease expense	$	860	$	703	$	561
Variable lease expense	402		520		433
Sublease income	(6)		(5)		(6)
Total property lease expense (a)	$	1,256	$	1,218	$	988
Vehicle leases
Finance lease expense:
Amortization of ROU assets (b)	$	28	$	29	$	37
Interest on lease liabilities (c)	6		3		4
Operating lease expense (b)	167		138		156
Total vehicle lease expense	$	201	$	170	$	197

__________

(a)    Primarily included in operating expenses and for the years ended December 31, 2022 and 2021, includes $(9) million and $(2) million of minimum annual guaranteed rent in excess of concession fees as defined in our rental concession agreements, 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,
	2023		2022
Property leases
Operating lease ROU assets	$	2,654	$	2,405
Short-term operating lease liabilities (a)	$	576	$	555
Long-term operating lease liabilities	2,117		1,884
Operating lease liabilities	$	2,693	$	2,439
Weighted average remaining lease term	8.1 years		8.2 years
Weighted average discount rate	4.83%		4.30%
Vehicle leases
Finance
Finance lease ROU assets, gross	$	265	$	267
Accumulated amortization	(41)		(45)
Finance lease ROU assets, net (b)	$	224	$	222
Short-term vehicle finance lease liabilities	$	59	$	44
Long-term vehicle finance lease liabilities	113		132
Vehicle finance lease liabilities (c)	$	172	$	176
Weighted average remaining lease term	2.8 years		2.0 years
Weighted average discount rate	3.68%		1.82%
Operating
Vehicle operating lease ROU assets (d)	$	117	$	86
Short-term vehicle operating lease liabilities	$	83	$	64
Long-term vehicle operating lease liabilities	36		22
Vehicle operating lease liabilities (e)	$	119	$	86
Weighted average remaining lease term	1.5 years		1.4 years
Weighted average discount rate	5.13%		4.86%

_________

(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,
	2023		2022		2021
Cash payments for lease liabilities within operating activities:
Property operating leases	$	838	$	743	$	639
Vehicle finance leases	6		3		4
Vehicle operating leases	167		137		162
Cash payments for lease liabilities within financing activities:
Vehicle finance leases	105		181		193
Non-cash activities - increase in ROU assets in exchange for lease liabilities:
Property operating leases	1,079		812		484
Vehicle finance leases	118		153		223
Vehicle operating leases	191		161		115

Maturities of lease liabilities as of December 31, 2023 are as follows:

	Property Operating Leases		Vehicle Finance Leases		Vehicle Operating Leases
Within 1 year	$	688	$	59	$	83
Between 1 and 2 years	478		—		30
Between 2 and 3 years	414		—		8
Between 3 and 4 years	357		108		2
Between 4 and 5 years	263		5		—
Thereafter	1,051		—		—
Total lease payments	3,251		172		123
Less: Imputed interest	(558)		—		(4)
Total	$	2,693	$	172	$	119