Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of the provision (benefit) for income taxes for each of the three years in the period ended December 31, 2021 are as follows:

	Year ended December 31,
	2021		2020		2019
Current
Federal	$	78	$	290	$	97
Foreign	26		15		(6)
State and local	88		65		45
	192		370		136
Deferred
Federal	260		(107)		185
Foreign	14		6		14
State and local	(6)		(20)		5
	268		(121)		204
Total	$	460	$	249	$	340

A reconciliation of the provision (benefit) for income taxes and the amount computed by applying the statutory federal income tax rate of 21 percent to the income before provision (benefit) for income taxes for each of the three years in the period ended December 31, 2021 is as follows:

	Year ended December 31,
	2021		2020		2019
Computed tax at statutory tax rate	$	388	$	239	$	318
State income taxes, net of federal tax benefit	64		31		43
Other permanent items	1		(3)		(17)
Change in federal valuation allowance	—		(22)		(3)
Foreign tax rate differential	7		4		(1)
Total	$	460	$	249	$	340

The components of deferred income tax assets (liabilities) are as follows:

	December 31, 2021		December 31, 2020
Reserves and allowances	$	165	$	129
Debt cancellation and other	16		10
Net operating loss and credit carryforwards	175		242
Operating lease assets	210		183
Total deferred tax assets	566		564
Less: valuation allowance (1)	(9)		(21)
Total net deferred tax assets	557		543
Property and equipment, including rental equipment	(2,349)		(1,962)
Operating lease liabilities	(210)		(183)
Intangibles	(152)		(166)
Total deferred tax liability	(2,711)		(2,311)
Total net deferred tax liability	$	(2,154)	$	(1,768)

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(1)    Relates to state net operating loss carryforwards and state tax credits that may not be realized.

We file income tax returns in the U.S., Canada and Europe. Without exception, we have completed our domestic and international income tax examinations, or the statute of limitations has expired in the respective jurisdictions, for years prior to 2012.

For financial reporting purposes, income before provision for income taxes for our foreign subsidiaries was $134, $83 and $62 for the years ended December 31, 2021, 2020 and 2019, respectively.

We have historically considered the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested, and, accordingly, no taxes were provided on such earnings prior to the fourth quarter of 2020. In the fourth quarter of 2020, we identified cash in our foreign operations in excess of near-term working capital needs, and determined that such cash could no longer be considered indefinitely reinvested. As a result, our prior assertion that all undistributed earnings of our foreign subsidiaries should be considered indefinitely reinvested changed. In the fourth quarter of 2021, we identified additional cash in our foreign operations in excess of near-term working capital needs, and remitted $203 of cash from foreign operations (such amount represents the cumulative amount of identified cash in our foreign operations in excess of near-term working capital needs). The taxes recorded associated with the remitted cash were immaterial in both 2020 and 2021.

We continue to expect that the remaining balance of our undistributed foreign earnings will be indefinitely reinvested. If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes. At December 31, 2021, unremitted earnings of foreign subsidiaries were $737. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable.

We have net operating loss carryforwards (“NOLs”) of $475 for federal income tax purposes that expire from 2032 through 2037, $3 for foreign income tax purposes that expire from 2024 through 2030 and $621 for state income tax purposes that expire from 2022 through 2034.